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Federal Circuit Decides Amgen v. Apotex, Holds that 180-Day Notice of Commercial Marketing is Always Mandatory in Biosimilar Litigation

Today, the Federal Circuit decided Amgen v. Apotex, No. 2016-1308 (Fed. Cir. July 5, 2016), its second decision interpreting the U.S. biosimilar statute, the Biologics Price Competition and Innovation of Act of 2009 (BPCIA).  The Federal Circuit affirmed the district court’s preliminary injunction barring Apotex from selling its proposed biosimilar on the U.S. market during the 180-day post-approval notice of commercial marketing period.  Writing for a unanimous panel that also included Judges Wallach and Bryson, Judge Taranto held that “the commercial marketing provision is mandatory and enforceable by injunction even for an applicant in Apotex’s position.”

Two provisions of the BPCIA were at play in the Federal Circuit’s decision.  First, under § 262(l)(2)(A), the biosimilar applicant initiates the statutory “patent dance” by providing a copy of its biosimilar application and information about how its product is manufactured.  Second, under § 262(l)(8)(A), the applicant must provide a notice to the innovator 180 days before the first commercial marketing of the biosimilar product.  In Amgen v. Sandoz, the Federal Circuit’s first BPCIA decision, the court held that (2)(A) was optional, but that (8)(A) was mandatory and could only be provided post-approval.  Sandoz was free not to provide information about its product to Amgen, but it had to provide a notice of commercial marketing after FDA licensure and could not enter the market for 180 days after doing so.

In Amgen v. Apotex, Apotex had argued that the (8)(A) notice provision, and its concomitant 180-day period before sales may begin, was not mandatory on the facts of its case.  Apotex seized upon what it saw as a key distinction between itself and Sandoz:  Sandoz had refused to provide any information under (2)(A), while Apotex had elected to follow the patent dance and made its (2)(A) disclosures to Amgen.  Apotex argued that under Amgen v. Sandoz, the (8)(A) notice of commercial marketing was only mandatory if the applicant failed to provide the information required by (2)(A).

The Federal Circuit rejected this argument and upheld the district court’s grant of an injunction to Amgen.  The court held that (8)(A) is mandatory in all circumstances, whether or not the applicant engages in the patent dance.  As the court stated, the fact “that Apotex gave (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 … is a mandatory one enforceable by injunction whether or not a (2)(A) notice was given.”

The court’s reasoning rested on several grounds, taking into account the text, purpose, and practical effect of the BPCIA.  First, the Federal Circuit looked to the text of the law, finding that the “language of (8)(A) is categorical” and that 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 patent dance.  Moreover, there was “no other statutory language that effectively compels a treatment of (8)(A) as non-mandatory.”

Second, the court rejected Apotex’s argument that a mandatory notice impermissibly extends the BPCIA’s 12-year exclusivity period by 180 days.  It noted that under the statute, the 12-year date was the earliest date on which a biosimilar could enter the market, not the latest.  Moreover, the court pointed out (as the panel had also noted in Amgen v. Sandoz) that nothing stops the FDA from approving a biosimilar product before the 12-year exclusivity period is up, as long as the license does not become effective until the 12-year mark.  In those cases, the Federal Circuit suggested, “the 180-day notice of commercial marketing [could] be sent as soon as the license issues, even if it is not yet effective,” and there would be no extension of the 12-year statutory exclusivity period.

Next, the Federal Circuit looked to the “established and evident purpose” of the notice of commercial marketing, observing that it “covers applicants that file (2)(A) notices as well as those that do not.”  Citing Amgen v. Sandoz, the court characterized purpose of the (8)(A) notice as providing the parties with a pre-launch period during which “the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy.”  In other words, the notice provides a valuable period during which patent infringement can be adjudicated before the irreparable harm of a launch occurs.  In the Federal Circuit’s view, this purpose is served regardless of whether the applicant made patent dance disclosures or not.

Finally, the Federal Circuit rejected Apotex’s contention that Amgen could not obtain an injunction because the reference product sponsor’s sole remedy for a violation of the (8)(A) notice provision is to bring a declaratory judgment action against the applicant.  The court found nothing in the text of the BPCIA to support the idea that a declaratory judgment action is the exclusive remedy, noting that while the law does provide for declaratory judgment actions in some circumstances, it “does not exclude the monetary and injunctive infringement remedies” expressly authorized by the Patent Act.  The Federal Circuit also pointed out that the opportunity for the reference product sponsor to bring a declaratory judgment action would not be a meaningful remedy for the loss of the post-notice 180-day dispute resolution period, finding that “relegating a reference product sponsor to a patent-merits declaratory judgment action would introduce the very problem of rushed decision-making … that it is (8)(A)’s purpose to avoid.”

Summing up, the Federal Circuit concluded 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.”

(Patterson Belknap filed an amicus brief in support of Amgen’s position in the Amgen v. Apotex appeal.)