Fresh From the Bench: Precedential Patent Cases From the Federal Circuit
Amgen v. Apotex – The Circuit affirms the issuance of a preliminary injunction ordering that Apotex may not commercially market its product that is “biosimilar” to Amgen’s FDA-approved Neulasta® until 180 days after FDA notice of a license. The drug is used by patients undergoing chemotherapy, and can stimulate the production of neutrophils (a type of white blood cell) and thereby decrease the incidence of infection. Amgen received a biologics license from the FDA for Neulasta® in 2002 pursuant to 42 U.S.C. § 262(a). In 2014, Apotex filed an application for an FDA license to market a biosimilar version of Neulasta®.
The Biologics Act lays out a step-by-step process for exchanging information and channeling litigation about patents relevant to the application. Apotex and Amgen proceeded several steps into that process, leading to the present suit in which Amgen alleges that Apotex's proposed marketing would infringe an Amgen patent.
In Amgen v. Sandoz, the Circuit held that the commercial-marketing provision is mandatory, with the 180-day period beginning only upon FDA notice that it has been granted a license to introduce the biosimilar product, and that an injunction was proper to enforce the provision against Sandoz. But in that case Sandoz had entirely skipped the statutory process of information exchange and patent-litigation channeling. In the present case, the panel rejects the Apotex argument that a different result is required here—that the commercial-marketing provision is not mandatory and may not be enforced by an injunction—because it, unlike Sandoz, did launch the statutory process for exchanging patent information and channeling patent litigation.
Rapid v. Cellzdirect – This decision provides hope that life science methods are patent eligible. The Circuit finds that the district court erred in its finding that the claimed methods in a patent for producing pure cultures of mature hepatocytes to be used for testing, diagnostic, and treating purposes were invalid under section 101. According to the opinion, the claims were not directed to a law of nature because the claims are simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles; rather, the claims are directed to a new and useful laboratory technique for preserving hepatocytes. A claim that is interpreted as being a "constructive process" directed to achieving a new and useful end, the panel states, "is precisely the type of claim that is eligible for patenting." The panel recognizes that the inventors' discovery of the capacity for hepatocytes to undergo multiple cycles of freezing and thawing was just the beginning of their finding and was not where they stopped or what they patented, distinguishing this case from the recent decisions in Genetic Techs., Ltd. v. Merial L.L.C.; Ariosa Diagnostics, Inc. v. Sequenom, Inc. (cert. denied); and In re BRCA1- & BRCA2.
Comment – Rapid is the third Federal Circuit decision in as many weeks reversing decisions finding patents invalid as not being directed to patentable subject matter. Enfish and Bascom Global both involved computer-related claims, while Rapid related to life sciences. Until Enfish and Bascom, we have had little guidance in claim drafting other than DDR, which was decided in late 2014. Rapid is encouraging as to the protection of technology in the life sciences and provides needed guidance since the Supreme Court denied cert in Ariosa v. Diagnostics. Rapid shows that claims that are drafted to methods for producing a tangible thing have a much better chance of being found patent eligible than methods of producing diagnostic information.
Amgen Inc. v. Apotex Inc., Fed. Cir. Case 2016-1308 (July 5, 2016)
This appeal involves an action brought by Amgen against Apotex under the Biologics Act. Apotex has an application pending with the FDA, filed under the Biologics Act, that seeks permission to begin marketing a product allegedly biosimilar to Amgen's FDA-approved Neulasta®. For such an applicant, the Biologics Act lays out a step-by-step process for exchanging information and channeling litigation about patents relevant to the application. Apotex and Amgen proceeded several steps into that process, leading to the present suit in which Amgen alleges that Apotex's proposed marketing would infringe an Amgen patent.
This appeal involves Amgen's motion for a preliminary injunction concerning what will happen if and when the FDA licenses Apotex's proposed biosimilar product. Amgen sought a preliminary injunction to enforce a provision of the Biologics Act that requires a biosimilar-product applicant to give notice 180 days before commercially marketing its FDA-licensed product, 42 U.S.C. § 262(l)(8)(A). We held in Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015), that the 180-day period runs from post-licensure notice. Here, the district court, agreeing with Amgen, preliminarily enjoined Apotex from entering the market unless it has given Amgen notice after receiving the requested FDA license and then waited 180 days.
In Amgen v. Sandoz, we held that the commercial-marketing provision is mandatory, with the 180-day period beginning only upon post-licensure notice, and that an injunction was proper to enforce the provision against Sandoz, a biosimilar-product applicant that had entirely skipped the statutory process of information exchange and patent-litigation channeling. Apotex argues that a different result is required here—that the commercial-marketing provision is not mandatory and may not be enforced by an injunction—because it, unlike Sandoz, did launch the statutory process for exchanging patent information and channeling patent litigation. We reject the asserted distinction. We hold that the commercial-marketing provision is mandatory and enforceable by injunction even for an applicant in Apotex's position.
The Biologics Act Sets Forth Specific Rules and Deadlines
The Biologics Act authorizes enterprises like Apotex to gain approval, after a time, for a product sufficiently similar to the "reference product," without repeating all of the work of the pioneer, the "reference product sponsor." Under § 262(k), an applicant may obtain a license by demonstrating that its product is "biosimilar" to a reference product. For the purpose of balancing innovation and consumer interests, Congress prescribed that a biosimilar-product application may not be submitted until four years after the reference product was first licensed under § 262(a) and that a biosimilar-product license may not be made effective until twelve years after the product was first licensed. 42 U.S.C. § 262(k)(7)(A), (B).
Under (2)(A), within 20 days after the FDA notifies the applicant that its application has been accepted for review, the applicant is to give notice to the reference product sponsor by providing the application as well as information describing the manufacturing process. Under (3)(A), within 60 days of receiving that notice, the reference product sponsor is to provide a list of patents that could reasonably be asserted against the applicant and specify which it would be prepared to license to the applicant.
Under (3)(B), within 60 days after receiving that list, the applicant is to respond with a detailed statement identifying why each patent on the reference product sponsor's list is invalid, unenforceable, or not infringed, or declaring that it does not intend to commercially market the biosimilar product before a particular patent expires, and also addressing the reference product sponsor's statement of readiness to license. The applicant, in its response, may also provide its own list of patents that it believes could reasonably be asserted against it. Under (3)(C), then, within 60 days of receiving the applicant's (3)(B) response, the reference product sponsor is to provide a detailed reply regarding those patents on its (3)(A) list as to which the applicant has asserted non-infringement, invalidity, or unenforceability.
Besides setting out the foregoing regime, the Biologics Act amended 35 U.S.C. § 271 in a way that is tied to that regime. As amended, 35 U.S.C. § 271(e)(2) provides that, in two circumstances, it is "an act of infringement" for a person "to submit" "an application seeking approval of a biological product" if the purpose is to obtain approval "to engage in the commercial manufacture, use, or sale of a . . . biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent." The two circumstances involve, respectively, an applicant that has launched the Biologics Act information-exchange process we have described and an applicant that has not.
Specifically, one circumstance is when the patent "is identified in the list of patents described in" paragraph (3), "including as provided under" paragraph (7), of the Biologics Act's patent provisions described above. § 271(e)(2)(C)(i). Filing the biosimilar application is an act of infringement of patents that the reference product sponsor has listed through the Biologics Act's prescribed processes, which occurs only when the applicant has provided the (2)(A) notice. The other circumstance involves an applicant that "fails to provide the application and information required" under (2)(A). In that case, filing the biosimilar application is an act of infringement as to a patent that "could be identified pursuant to" (3)(A), i.e., a patent that the reference product sponsor could identify as one it believes "could reasonably be asserted" with respect to the biosimilar product at issue. § 271(e)(2)(C)(ii).
35 U.S.C. § 271(e)(4) addresses remedies for such infringements. Subparagraphs (B) and (C) authorize injunctions and damages, and subparagraph (D) states that "the court shall order a permanent injunction" against infringement of a patent in certain cases decided in the Biologics Act's first-stage (paragraph (6)) litigation. Section 271(e)(4) adds that those remedies "are the only remedies which may be granted by a court for an act of infringement described in paragraph (2)," except for attorney's fees.
35 U.S.C. § 271(e)(6), however, then limits the just described remedies in two ways evidently designed to reinforce the reference product sponsor's incentives to follow the distinctive Biologics Act's patent process where the applicant has launched that process. First: If the reference product sponsor is late in bringing the first stage infringement action under § 262(l)'s paragraph (6), the only remedy the reference product sponsor can get in that action is a reasonable royalty. Second: If a patent that the reference product sponsor should have included on its (3)(A) list or its (7) supplement "was not timely included," then the owner of that patent may not sue for infringement under § 271 with respect to the product at issue.
Unlike Amgen v. Sandoz, Apotex Complied with What Is Required Under the Act
In October 2014, Apotex filed a biologics license application with the FDA under § 262(k), and the FDA accepted Apotex's application for review on December 15, 2014. On December 31, 2014, Apotex provided Amgen a copy of the application and information detailing Apotex's pegfilgrastim manufacturing process, complying with § 262(l)'s paragraph (2)(A). Amgen provided Apotex its (3)(A) list on February 27, 2015, identifying three patents, and Apotex provided its (3)(B) patent-specific response on April 17, 2015. In that response, Apotex certified that it did not intend to begin commercial marketing before two of the patents had expired and, as to the remaining patent, described bases for asserting noninfringement and invalidity. The same day, Apotex sent a letter to Amgen stating that it was thereby providing notice of future commercial marketing pursuant to (8)(A), though Apotex lacked (as it still lacks) an FDA license. On June 16, 2015, Amgen furnished Apotex its (3)(C) reply regarding validity and infringement. The parties then negotiated under (4) and agreed to an immediate action under (6)(A) for infringement of the two then-extant patents; Amgen filed that action on August 6, 2015; and when one of the patents expired in October 2015, that action became about only one patent, U.S. Patent No. 8,952,138.
Just before that action was filed, this court decided Amgen v. Sandoz. The court held first that a biosimilar product applicant cannot be compelled to provide notice of FDA review under (2)(A) and that an infringement suit under § 271(e)(2) is the reference product sponsor's remedy if the applicant does not provide such notice. The court stressed that § 271(e)(2)(c)(ii) declares precisely that conduct—filing an application and failing to give the (2)(A) notice—to constitute an infringement (of a patent that could have been listed under (3)(A)) and that § 271(e)(4) declares the monetary and injunctive remedies in a suit for that infringement to be the exclusive remedies for that conduct.
In the present case, Amgen filed a motion for preliminary injunction in October 2015 that would require Apotex to provide an (8)(A) notice if and when it receives a license and to delay any commercial marketing for 180 days from that notice. The parties stipulated that Amgen will be irreparably harmed if Apotex enters the market without giving the 180 days' notice, the balance of the hardships favors Amgen, and the public interest favors the injunction. The decision whether to grant the preliminary-injunction motion, therefore, turned on Amgen's likelihood of success on the legal question presented: whether the (8)(A) notice requirement is a mandatory one enforceable by injunction as to an applicant (such as Apotex) that, unlike Sandoz in Amgen v. Sandoz, gave the (2)(A) notice to launch the information-exchange process leading to the paragraph (6) infringement suit. Notably, there is no dispute that Apotex's pre-licensure April 2015 notice is of no effect under (8)(A) as construed in Amgen v. Sandoz.
Injunctive Relief Is an Appropriate Remedy to Enforce the 180 Day Notice Requirement
The district court agreed with Amgen, and we agree: that Apotex gave a (2)(A) notice provides only a factual distinction, not a legally material distinction, between its situation and that of Sandoz in Amgen v. Sandoz. The (8)(A) requirement of 180 days' post-licensure notice before commercial marketing, we conclude, is a mandatory one enforceable by injunction whether or not a (2)(A) notice was given.
Paragraph (8)(A) provides that "the subsection (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k)." We ruled in Amgen v. Sandoz that this language is, indeed, "mandatory," and we did not say that it was mandatory only in no-(2)(A)-notice circumstances.
The language of (8)(A) is categorical. It contains no words that make the applicability of its notice rule turn on whether the applicant took the earlier step of giving the (2)(A) notice that begins the § 262(l) information-exchange process. And in Amgen v. Sandoz we stated that (8)(A) was "a standalone notice provision" not dependent on the information-exchange processes that begin with (2)(A).
The established and evident purpose of (8)(A) covers applicants that file (2)(A) notices as well as those that do not. As we explained in Amgen v. Sandoz, the purpose is to ensure that, starting from when the applicant's product, uses, and processes are fixed by the license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy. At the least, the reference product sponsor needs time to make a decision about seeking relief based on yet-to-be litigated patents, and a district court needs time for litigants to prepare their cases, in a complicated area, to provide a reliable basis for judgment. While that may not be true in every single case, Congress clearly made a categorical fixed-period judgment in (8)(A). Therefore, we conclude that an applicant must provide a reference product sponsor with 180 days' post-licensure notice before commercial marketing begins, regardless of whether the applicant provided the (2)(A) notice of FDA review. Because the parties here stipulated to the remaining injunction factors, we affirm the grant of a preliminary injunction without addressing those factors.
Rapid Litigation Management Ltd. v. Cellzdirect, Inc., Fed. Cir. Case 2015-1570 (July 5, 2016)
Appellants sought review of the district court's summary judgment determination that U.S. Patent No. 7,604,929 ("'929 patent") is invalid under 35 U.S.C. § 101. The district court concluded that the patent is directed to a patent-ineligible law of nature—that hepatocytes are capable of surviving multiple freeze-thaw cycles—and that the patented process lacks the requisite inventive concept. The court applied the Supreme Court's two-step framework. At step one, the court concluded that the '929 patent is directed to an ineligible law of nature: the discovery that hepatocytes are capable of surviving multiple freeze-thaw cycles. At step two, the court determined that the patented process lacks the requisite inventive concept, observing that, upon discovering the cells' capability of surviving multiple freeze-thaw cycles, the inventors simply reapplied a well-understood freezing process.
Federal Circuit Finds Claims Survive Step 1
Claim 1 recites a method of producing a desired preparation of multi-cryopreserved hepatocytes: step (A) requires performing density gradient fractionation on a set of previously frozen and thawed cells to separate out the viable ones; step (B) requires recovering the separated viable cells; and step (C) requires cryopreserving the recovered cells. The end result is a preparation of multi-cryopreserved cells that can be thawed for immediate use, retaining 70% viability. The resulting preparation, and the process for creating it, achieved a notable advance over prior art techniques for preserving hepatocytes.
The district court identified in these claims what it called a natural law—the cells' capability of surviving multiple freeze-thaw cycles. However, the Federal Circuit finds that the claims are simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles. Rather, the claims are directed to a new and useful laboratory technique. This type of constructive process, carried out by an artisan to achieve a new and useful end, is precisely the type of claim that is eligible for patenting. The inventors certainly discovered the cells' ability to survive multiple freeze-thaw cycles, but that is not where they stopped, nor is it what they patented. Rather, as the first party with knowledge of' the cells' ability, they were in an excellent position to claim applications of that knowledge. They employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.
The Claims Are Distinguishable From Other Non-Patentable Biotechnology Methods
The claims in this case are immediately distinguishable from those found patent ineligible since Mayo and Alice. In recent cases, courts have found claims directed to a patent-ineligible concept when they amounted to nothing more than observing or identifying the ineligible concept itself. In Genetic Technologies, the claim recited methods for detecting a coding region of DNA based on its relationship to noncoding regions; in Ariosa, the claims recited methods for detecting paternally inherited cffDNA in the blood or serum of a pregnant female; and in In re BRCA, the claims recited methods for screening human germline for an altered BRCA1 gene by comparing the target DNA sequence with wild-type sequence. Although the claims in each of these cases employed method steps, the end result of the process, the essence of the whole, was a patent-ineligible concept.
The same is not true here. The end result is not simply an observation or detection of the ability of hepatocytes to survive multiple freeze-thaw cycles. Rather, the claims are directed to a new and useful method of preserving hepatocyte cells. The claims recite a method of producing a desired preparation of multi-cryopreserved hepatocytes. Through the recited steps, the patented invention achieves a better way of preserving hepatocytes. The '929 patent claims are like thousands of others that recite processes to achieve a desired outcome. That one way of describing the process is to describe the natural ability of the subject matter to undergo the process does not make the claim directed to that natural ability. If that were so, one would find patent-ineligible methods of, say, producing a new compound (as directed to the individual components' ability to combine to form the new compound), treating cancer with chemotherapy (as directed to cancer cells' inability to survive chemotherapy), or treating headaches with aspirin (as directed to the human body's natural response to aspirin).
At step one, therefore, it is not enough to merely identify a patent-ineligible concept underlying the claim; it must be determined whether that patent-ineligible concept is what the claim is directed to. Here, the plain claim language shows that it is not. The '929 patent does not simply claim hepatocytes' ability to survive multiple freeze-thaw cycles. The '929 patent instead claims a method of producing a desired preparation of multi-cryopreserved hepatocytes. This new and improved technique, for producing a tangible and useful result, falls squarely outside those categories of inventions that are directed to patent ineligible concepts.
The Circuit Finds that the Claims Survive Step 2
Even if the '929 patent is directed to hepatocytes' natural ability to survive multiple freeze-thaw cycles, and that we must proceed to step two, the claims are patent-eligible at that point as well. Under step two, claims that are directed to a patent-ineligible concept, yet also improve an existing technological process, are sufficient to transform the process into an inventive application of the patent ineligible concept. The claims of the '929 patent do precisely that: they recite an improved process for preserving hepatocytes for later use. The benefits of the improved process over the prior art methods are significant. The claimed method is patent eligible because it applies the discovery that hepatocytes can be twice frozen to achieve a new and useful preservation process.
That each of the claims' individual steps were known independently in the art does not make the claim unpatentable. It is true that, at step two, a claim that recites only well understood, routine, conventional activity already engaged in by the scientific community will not be patent eligible. However, in examining claims under step two, they must be viewed as a whole, considering their elements both individually and as an ordered combination. Thus, a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made.
Here, the claimed process involves freezing and thawing hepatocytes twice. The individual steps of freezing and thawing were well known, but a process of preserving hepatocytes by repeating those steps was itself far from routine and conventional. Just as in Diehr, it is the particular combination of steps that is patentable here. To require something more at step two would be to discount the human ingenuity that comes from applying a natural discovery in a way that achieves a new and useful end.
Patent-Eligibility Does Not Turn On Obviousness
The crux of LTC's argument seems to be that, once it was discovered that hepatocytes could survive multiple freeze-thaw cycles, it would have been a simple task to repeat the known freeze-thaw process to arrive at the claimed invention. But patent-eligibility does not turn on ease of execution or obviousness of application. Those are questions that are examined under separate provisions of the Patent Act.
There Is No Pre-emption
While pre-emption is not the test for determining patent-eligibility, it is certainly the concern that undergirds § 101 jurisprudence. Here, while not resting the opinion on them, the court noted the district court's findings that the '929 patent does not lock up the natural law in its entirety and that LTC has already managed to engineer around the patent. These findings accord with the conclusion that the patent is not directed to a patent-ineligible building block of human ingenuity.
- Karri Kuenzli Bradley, Ph.D.Shareholder
- Ian J. Griswold, Ph.D.Associate
- Peter HeuserShareholder