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Sandoz Petitions the Supreme Court for Review of Enbrel® Patent License

The fight over proposed Enbrel® (etanercept) biosimilar Erelzi® continues. Sandoz Inc., Sandoz International GmbH and Sandoz GmbH (“Sandoz”) recently filed a petition for certiorari requesting review of the judgement of the Federal Circuit on whether:

[a] patent owner [may] avoid the rule against double patenting by buying all of the substantial rights to a second, later-expiring patent for essentially the same invention, so long as the seller retains nominal ownership and a theoretical secondary right to sue for infringement?

Petition at i. In July 2020, the Federal Circuit considered Sandoz’s arguments that two patents covering Immunex Corp.’s (“Immunex”) Enbrel were invalid for obviousness-type double patenting.  The Federal Circuit concluded that the patents-at-issue were not owned by Immunex, and therefore not subject to the alleged obviousness-type double patenting defect.  Id. at 3.  After unsuccessfully seeking rehearing en banc, Sandoz now asks the Supreme Court to weigh in.  Id. at 4. 

In its petition, Sandoz argues that “the Federal Circuit’s decision undermines the rule . . . that patentees may not obtain two patents on the same invention.”  Id. at 16.  It contends that Immunex was able to extend Enbrel’s patent protection by a decade through “a straw-ownership deal” in which “Immunex engineered a contract giving it control of” patent applications to a Roche protein and allowing Immunex “to rewrite the applications, replacing Roche’s original claims with claims for Immunex’s own protein.”  Id. at 2.  According to Sandoz, the Federal Circuit’s decision “allowed Immunex to contract around [the Supreme Court’s] decisions—and, indeed, the entire [obviousness-type double patenting] doctrine—by leaving Roche with nominal ownership of the patent but no substantial rights to exploit it.”  Id. at 19.  Sandoz further alleges that the Federal Circuit’s acceptance of this strategy resulted in billions of dollars in increased stock value for Amgen, Immunex’s parent, effectively creating one of the largest civil damages awards ever.  Id. at 23-24.

In stating its case, Sandoz explains that the Immunex-Roche agreement “gave Immunex virtually all the hallmarks of patent ownership, including”:

(1) the complete, unfettered right to control prosecution of Roche’s patent applications;

(2) the sole right to make, use, sell, or import the claimed inventions;

(3) the right to exclude anyone—including Roche—from commercializing the claimed inventions;

(4) the sole right to grant sublicenses to the claimed inventions; and

(5) [] the first right to sue others for infringement of the patents, including the right to control the suit and unilateral authority to settle and collect all damages.

Id. at 8-9.  By contrast, “Roche (as the nominal owner) retained a . . . secondary right to sue for infringement if Immunex did not exercise its first right to sue within 180 days” and “a reciprocal nonassignment clause, barring either party from giving away its rights . . . without the other’s consent.”  Id. at 9. 

Sandoz contends that the Immunex-Roche agreement is a blueprint for obtaining improper extensions of patent term that will be replicated by others in the future.  Id. at 3, 23.  To “avoid a double-patenting objection, the agreement transferring all of these rights need only preserve a formal right for the putative licensor to bring its own infringement suit if the ‘licensee’ declines to do so.”  Id. at 22.  Ultimately, Sandoz urges the Supreme Court to “grant review to ensure that every patented invention passes to the public after one prescribed term.”  Id. at 29. 

Immunex’s response is expected on April 14, 2021.

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