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Federal Circuit Dismisses Momenta IPR Appeal for Lack of Standing and Mootness After Momenta Abandons Orencia® Biosimilar

Last week, the Federal Circuit issued its long-awaited opinion in Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., No. 2017-1694, slip op. (Fed. Cir. Feb. 7, 2019).  While many had hoped the decision would provide clarity on whether a biosimilar maker who has not yet filed an aBLA has standing to appeal a PTAB decision upholding an innovator patent, the Federal Circuit instead dismissed the appeal for lack of standing and mootness based on post-appeal developments making it clear that Momenta had abandoned its efforts to develop the biosimilar in question.  Nevertheless, Momenta is important in that it illustrates the continued risk to biosimilar makers of unappealable IPR decisions when they bring IPRs years before filing an aBLA.

Biosimilar developers have been aggressive in filing such early IPRs challenging biologics patents well before filing a marketing application.  Early IPRs challenging biologics patents have been attractive for biosimilar makers: they provide a chance to potentially invalidate innovator patents and, at the least, gain a fuller understanding of the intellectual property risks of their development strategies well before sinking most of the costs.  And because petitioners need not have Article III case-or-controversy standing to bring an IPR, the remoteness and uncertainty of future infringement in such circumstances does not preclude these early IPRs.

However, it is well established that to seek a Federal Circuit appeal from a final PTAB decision, the appellant must have Article III standing.  This precedent has created uncertainty for IPR petitioners who have yet to even file their aBLA.  In Momenta, the biosimilar developer sought to appeal an adverse IPR decision upholding a BMS patent covering a formulation of Orencia® (abatacept), a biologic used to treat rheumatoid arthritis.  But Momenta had not yet filed an aBLA and was still years away from doing so—a Phase I trial of its Orencia® biosimilar had failed and it had not settled on a workable formulation.  BMS argued that these facts conclusively demonstrated that Momenta lacked standing to appeal.  Momenta countered that it had already invested millions of dollars in developing the biosimilar and that it had reached a critical “fork in the road” of its development plans as a result of the PTAB’s decision affirming patentability.  The Federal Circuit heard oral argument on December 5, 2017, and a majority of the panel appeared poised to potentially require the filing of an aBLA to confer Article III standing, as is the case for district court litigation.  See Sandoz v. Amgen, 773 F.3d 1274, 1279 (Fed. Cir. 2014).

In October 2018, Momenta informed the Court that it had initiated discussions with its collaborator, Mylan, to exit its participation in the development of an Orencia® biosimilar, and would apprise the Court of any outcome of those discussions.  See slip op. at 3-4.  Momenta nevertheless maintained that its appeal was not moot because, as of that moment, it was still jointly responsible for the costs of developing an Orencia® biosimilar and still “face[d] the same fork in the road about [its] commercial formulation.”  Id. at 4.  Momenta also argued that it would potentially be entitled to royalties from Mylan should Mylan go on to develop the biosimilar alone. Id. at 5.  BMS countered that “a third party’s possible future development of this abandoned product does not provide constitutional standing to Momenta,” since any possible future royalties were “too speculative” and such “hypothetical future harm” was insufficient.  Id.  Then, in December 2018, Momenta informed the Court that it had decided to formally terminate its collaboration agreement with Mylan with respect to a proposed Orencia® biosimilar.  Id.

In a February 7, 2019 opinion, a unanimous Federal Circuit panel dismissed Momenta’s appeal “for absence of standing/jurisdiction and for mootness” in a decision by Judge Newman.  Id. at 2.  The panel held that “Momenta does not have standing to invoke federal appellant jurisdiction, and the appeal is mooted by Momenta’s discontinuance of any potentially infringing activity.”  Id. at 11.  They explained that “[a]lthough Momenta had initially stressed that it had spent millions of dollars in its development of an Orencia® biosimilar, now upon Momenta’s termination of all potentially infringing activity, Momenta has not shown an invasion of a legally protected interest that is actual or imminent, not conjectural or hypothetical.”  Id. at 7.  Therefore, Momenta “has no legally protected interest in the validity of” BMS’s patent, making judicial review unavailable.  Id. at 7-8.  Further, the estoppel effect of 35 U.S.C. § 315(e) could not provide Momenta with injury-in-fact because it was “irrelevant now that Momenta has ‘exited’ its development of the Orencia® product.”  Id. at 8.  Lastly, as to mootness, the Court explained that although “[s]tanding and mootness may not be coextensive in all cases,” here “the cessation of potential infringement means that Momenta no longer has the potential for injury, thereby mooting the inquiry.”  Id. at 10-11.

Given the fact-specific holding of Momenta, it remains to be seen whether the Federal Circuit will ultimately require a biosimilar maker to have filed an aBLA in order to have standing to appeal an adverse IPR decision.  Nevertheless, Momenta highlights the continued risk to biosimilar makers of bringing early IPRs challenging innovator patents years before filing an aBLA.  Biosimilar makers who bring such early challenges and lose at the PTAB may find themselves unable to appeal, as in Momenta where development of the product in question was abandoned and no aBLA was filed.

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