the sedona conference… · anda filers have filed an ipr petition on a patent-in-suit, a court may...

WG10 Chapter on Biopharma Patent Litigation (Mar. 2019)

The Sedona Conference

The Sedona Conference Commentary on Patent Litigation Best Practices: Biopharma Litigation Chapter XXX 2019

i Sedona WG10 Biopharma – 2019-03-24 ver.

Biopharma Litigation Chapter for The Sedona Conference Working Group 9/10

For The Sedona Conference WG10 Commentary on Patent Litigation Best Practices

Chapter Editors: Deborah Fishman

Andrea Jeffries

Phil Johnson

Drafting Team Members: Raj Davé

Paul Ehrlich

Dianne Elderkin

Nicholas Groombridge

R. Eric Hutz

Steven Lieberman

Josephine Liu

Erik Olson

Maureen Rurka

Gurpreet (Ray) S. Walia

James Wallace

Judicial Advisors: Hon. Stanley R. Chesler

Hon. Faith Hochberg (ret.)

Hon. Sue Robinson (ret.)

Hon. Leda Dunn Wettre

[Note: This is a preliminary draft. While the substance of all sections of this draft

have been the subject of numerous drafting team full or subteam calls, the content

of all sections of this draft does not necessarily represent the consensus of the full

drafting team at this stage.]

Copyright 2019, The Sedona Conference.


ii Sedona WG10 Biopharma – 2019-03-24 ver.

Table of Contents Biopharma Litigation Principles “At a Glance” ........................................................................................... iv

Biopharma Litigation Best Practices “At a Glance” ..................................................................................... v

I. Introduction .............................................................................................................................................. 1

II. Overview of Hatch-Waxman and BPCIA Litigation .......................................................................... 2

Overview of Hatch-Waxman (ANDA) Litigaton ......................................................................... 2

Overview of Biosimilar LitigatIon ................................................................................................. 4

III. Pleading Standards For Biopharmaceutical Cases—Unique Considerations .................................. 8

IV. Discovery Issues Unique to Biopharma Litigation .......................................................................... 11

Initial Burden of Production; Sequence of Contentions ........................................................... 11

Protective order and access issues for PLA/BLA, consideration of an FDA bar akin to a prosecution bar ................................................................................................................................ 13

Scope of discovery: Proportionality and Asymmetry ................................................................. 14

Multiple Defendant Issues ............................................................................................................. 15

1. Consolidation/coordination – best practices. May not matter as long as same patentissues before same judge. Would be helpful to get a judicial perspective here. ............. 15

2. Special considerations where multiple defendants with different interests in movingforward with the litigation. ..................................................................................................... 15

3. Special considerations where some generics already on the market or already a firsttraunch of defendants? ........................................................................................................... 15

Any special discovery issues created for special types of claims, dosing claims, method of treatment claims, etc. ....................................................................................................................... 15

Disclosure of FDA correspondence ANDA filer only? Is discovery of NDA (or BLA) relevant at all? Should certain portions be discoverable? Under what circumstances? ......... 15

Consider adoption of NJ Local Rules or something like it? ..................................................... 15

Off-label 16

V. Interplay Between PTAB Challenges and ANDA and BPCIA Litigation ..................................... 17

Overview of AIA Post Grant Challenges .................................................................................... 17

Timing of IPR/PGR Challenges ................................................................................................... 18

Interplay of 30-month regulatory stay and requests for stay pending ipr (or PGR) .............. 21

Additional Considerations in Multiple Defendant anda Cases ................................................. 26

Special Considerations Relating to Bpcia cases ........................................................................... 31

VI. Injunctive Relief in Biopharma Cases ................................................................................................. 32


iii Sedona WG10 Biopharma – 2019-03-24 ver.

ANDA Litigation ............................................................................................................................. 32

1. “At Risk” Launch and Preliminary Injunctive Relief ......................................................... 32

2. Interplay Between IPRs/PGRs and the Availability of Preliminary Injunctive Relief . 33

3. Permanent Injunctive Relief .................................................................................................. 33

BPCIA Litigation ............................................................................................................................. 34



Branded Biologic Patent Litigation ............................................................................................... 36


2. Interplay Between IPRs/PGRs and the Availabiltiy of Preliminary Injunctive Relief . 37



iv Sedona WG10 Biopharma – 2019-03-24 ver.

Biopharma Litigation Principles “At a Glance”

Principle No. 1 – Access to information in the ABLA and ANDA should be provided to the patent holder under terms that balance the patent holder’s need for certain information in order to assess claims of patent infringement with protections for the confidentiality of the Section k applicant’s confidential information. ................................................................................................................................ 13

Principle No. 2 – In cases brought under the Hatch-Waxman or BPCIA Acts, the courts and the USPTO should take into consideration their respective judicial and PGR/IPR proceedings to achieve a just and efficient resolution of these disputes. ........................................................................... 17

Principle No. 3 – In managing their respective proceedings, the courts in ANDA and BPCIA litigations and the USPTO in PGR/IPR proceedings should take into account the interests of patent owner(s) and all actual and potential generic or biosimilar applicants, avoiding to the extent possible, prejudice to all actual or potential parties. .................................................................................................... 17


v Sedona WG10 Biopharma – 2019-03-24 ver.

Biopharma Litigation Best Practices “At a Glance”

Best Practice 1 – The parties should agree to pre-litigation confidential access provisions that provide access for outside and appropriate inside counsel and for technical experts. Participation in IPRs should not preclude access to confidential information of the biosimilar applicant. .... 13

Best Practice 2 – The parties should agree to litigation phase protective orders that are substantively the same as the pre-litigation phase protective orders. .............................................................................. 14

Best Practice 3 – Given the often substantial amounts in controversy in Hatch-Waxman and BCPIA cases, all the factors set forth in Fed. R. Civ. Proc. 26(b)(1) should be considered in a proportionality evaluation on the scope of permissible discovery. ...................................................................................... 14

Best Practice 4 –The parties should inform the USPTO/PTAB and other tribunals of both ongoing and reasonably anticipated litigation involving the same or related patents (e.g., expected Hatch-Waxman or BPCIA litigation), and the potential impact of IPR or PGR proceedings on the litigation... ......................................................................................................................................................... 19

Best Practice 5 – In deciding whether to extend the Hatch-Waxman 30-month stay of regulatory approval, considerations may include whether the extension or lack thereof would (a) cause undue prejudice or place the non-movant at a significant tactical disadvantage, (b) simplify the issues to be resolved, and (c) inappropriately delay the litigation given the status of discovery and any scheduled trial. .................................................................................................................................................................... 22

Best Practice 6 – The court in considering a motion to stay an ANDA litigation in view of a pending IPR should consider the efficient, orderly management of the district court litigation, including the impact of a stay on consolidated or coordinated patent litigation proceedings involving ANDA filers not parties to the IPR proceedings as well as those who have filed for IPR. ......................................... 27

Best Practice 7 – In consolidated or coordinated district court ANDA litigation, where one or more ANDA filers have filed an IPR petition on a patent-in-suit, a court may wish to inquire of the remaining ANDA filers whether they intend to join the IPR proceeding. ............................................. 27

Best Practice 8 – In a multi-party ANDA litigation, a court may consider whether as a condition of any stay, all alleged infringers are willing to agree to be finally bound by the final decision of the PTAB in the IPR proceeding and to waive all other 102 & 103 (prior art based) validity challenges.27

Best Practice 9 – When deciding whether to stay district court litigation, the court may balance considerations of judicial economy and orderly resolution of multiple cases with considerations related to first-to-file (FTF) exclusivity. ........................................................................................................ 27

Best Practice 10 – When determining whether or not to institute an IPR or PGR petition, the USPTO/PTAB should take into account whether substantial progress in parallel ANDA litigation involving the same patent has been made and the amount of time that has passed after the first filing of any ANDA litigation pertaining to the challenged patent (regardless of the identity of the petitioner). ......................................................................................................................................................... 30

Best Practice 11 – Where there are multiple ANDA litigants, and some but not all litigants file parallel IPR/PGR petitions, the Director should consider providing an opportunity for all interested


vi Sedona WG10 Biopharma – 2019-03-24 ver.

parties to participate in a single consolidated proceeding, and decline to institute any petition filed after that date. ................................................................................................................................................... 30

Best Practice 12 – Parties and the court should discuss/consider discussing at case management conference the possibility of a launch at risk or the possibility of a preliminary injunction motion during the pendency of a case. Parties and the court should discuss/consider discussing at subsequent status conference whether plans have changed. ..................................................................... 38

Best Practice 13 – The court and parties should discuss notice of any at-risk launch to permit the court time to resolve any injunction issue. ................................................................................................... 38

Best Practice 14 – The parties should communicate regarding the timing and proposed schedule for preliminary injunction proceedings, which communications should be treated as confidential information under a governing protective order. ........................................................................................ 38

Best Practice 15 – Ideally, a defendant will agree to notify patentee’s counsel, under the terms of a protective order, of its intent to launch at risk with sufficient notice to afford the parties the opportunity to discuss timing and the proposed schedule for any preliminary injunction proceedings. If a defendant is unwilling to agree to provide notice, the patentee may request that the court order a defendant to provide notice at least 30-60 days before any commercial launch so that the court and the parties may conduct preliminary injunction proceedings in advance of any such launch. ................................................................................................................................................................ 38

Best Practice 16 – Parties and the court should discuss and consider the scope of any injunction (whether in the preliminary or permanent injunction context) to ensure that it is appropriately tailored to the acts of infringement implicated by patent coverage. ........................................................ 38

Best Practice 17 – Parties and court should consider whether permanent injunction proceedings can/should be tried together with liability issues before the bench. ........................................................ 38

Best Practice 18 – In an ANDA proceeding, at the same time the parties and the court address at risk-launch, they should also address how to handle damages issues and the patentee’s right to a jury trial on the timing and case management of the proceeding. .................................................................... 38


1 Sedona WG10 Biopharma – 2019-03-24 ver.

Introduction Biologic and pharmaceutical patent litigation differs from other types of patent litigation in significant ways. They are frequently the result of statutory provisions for resolving patent disputes that are part of the generic drug or biosimilar approval framework. These provisions create unique substantive and case management issues. Where innovative biologic and pharmaceutical products requiring first-time FDA approvals are involved, other unique legal and case management issues often arise. Biologic and pharmaceutical patent litigations also frequently call on courts to balance the public’s interest in encouraging and rewarding the discovery and development of new drugs and biologics against that of making differentiated, life-altering and/or life-sustaining therapies available to patients who may benefit from them.



Overview of Hatch-Waxman and BPCIA Litigation

OVERVIEW OF HATCH-WAXMAN (ANDA) LITIGATON

The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) created an Abbreviated New Drug Application (ANDA), procedure regulated by the Food and Drug Administration (FDA), that in certain circumstances allows generic drugs to be approved based upon the same safety and efficacy test data earlier produced and used by the drug’s originator to gain the first FDA approval of that drug. Among the circumstances addressed are those relating to whether the proposed marketing of the generic drug would occur after the patents pertaining to the original “brand name” drug expire, or if not, whether the ANDA applicant can certify that the proposed generic product would not infringe any valid claim of originator’s patents pertaining to the proposed generic product.1

The Act is intended to strike a balance between two competing policy interests. On the one hand, the Act sought to induce and reward the pioneering development of new drugs and treatments by providing a set of incentives for branded drug manufacturers to conduct new developments and testing in exchange for restoration of a portion of the originator’s patent term lost on account of FDA required pre-market testing, and for up to five years of regulatory exclusivity.

On the other, the Act sought to facilitate the efficient marketing of low-cost, generic versions of the branded drugs as promptly as possible at the close of a patent termin the absence of patent protection. The Act does this by exempting generic manufacturers from patent infringement for activities relating to the development and submission of information to the FDA in connection with its ANDA application, limiting the testing an ANDA applicant needs to show that a generic will be bioequivalent to its branded counterpart, and shortening the normal FDA approval time by

authorizing the ANDA applicant to claim the benefit of the branded drug’s original clinical testing.2

The Hatch-Waxman Act also includes incentives to encourage generic companies to challenge patents pertaining to the brand name drug. The first ANDA applicant (“first filer”) to successfully challenge such a patent is rewarded with 180 days of market exclusivity relative to all other would-be generic entries. This exclusivity allows the first filer (or first filers, if multiple ANDAs are filed on the same day) to sell its generic product at higher prices in the absence of other generic competitors. than it could were it to face competition from additional generic entriesntrants. This head start gives

1 Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. §§ 355, 360cc; 35 U.S.C. §§ 156, 271), as amended by

the Medicare Prescription Drug Improvement and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003).

2 The ANDA application process is abbreviated because preclinical (animal) and clinical (human) data to establish safety and efficacy are not required. Instead, the ANDA can rely on the safety and effectiveness data submitted by the original innovator in the New Drug Application (“NDA”) of the drug to be copied, and gain an approval based on data establishing bioequivalence between the generic product defined in the ANDA and the reference brand name drug. Thus, instead of completing lengthy procedures for new drug approval, which previously could not be conducted until the brand name drug patents expired without risking patent infringement, the Hatch-Waxman Act created an expedited pathway for entry of generic drugs into the United States.

Commented [A1]: We suggest “as quickly as possible,” not “at the close of a patent term.” See 149 Cong. Rec. S15885 (Nov. 25, 2003) (Sen. Kennedy) / Teva v. Novartis, 482 F.3d 1330, 1344 (Fed. Cir. 2007). (“at the close of the patent term” is not accurate in the instance where the patent was held invalid or not infringed)

Commented [A2]: How about “once patent protection ends.”

Commented [A3]: I agree with XX’s recommendation of “as quickly as possible”. “In the absence of patent protection” may be confusing as the rest of the paragraph describes what generics can do even with patents still in place.



the first filer a potentially significant marketing and revenue advantage over its other generic competitors.

The Act further establishes a framework for addressing patent disputes when a generic manufacturer seeks to obtain FDA approval of the proposed generic product. The Act first requires the originator of each FDA approved drug to list its patents pertaining to that drug in an FDA maintained registry known as the “Orange Book.” This framework then requires each generic manufacturer filing an ANDA with the FDA to include one of the following certifications with its application: (1) that the drug has not been patented; (2) that the patent has already expired; (3) that the generic drug will not go on the market until after the expiration of the relevant Orange Book listed patents; or (4) that each relevant Orange Book listed patent3 is not infringed or is invalid. If an ANDA application certifies a patent is invalid, unenforceable, or not infringed, the applicant must notify the reference product manufacturer (the “NDA holder”) via what is commonly referred to as a “paragraph IV notice letter,” of its position, and must further provide a detailed statement for the basis of its assertion that the relevant patent is invalid, unenforceable or not infringed. The Paragraph IV certification provides notice to the patent owner that an ANDA has been filed by someone seeking to market a generic product before patent expiration.

Each Paragraph IV Certification creates District Court jurisdiction for any ensuing patent dispute between the ANDA filer and the patented drug manufacturer over the subject of that certification. The Hatch-Waxman Act accomplishes this through subsection (e) of 35 U.S.C. § 271 which makes the filing of an ANDA an artificial or technical act of infringement. This satisfies the case or controversy requirements and gives the patentee standing to file suit against the generic manufacturer.

After receipt of the Paragraph IV Certification, the patent owner may immediately file a patent

infringement suit against the generic manufacturer.4 If the patent owner does so within 45 days of receiving such a certification, the Hatch-Waxman Act provides for an automatic regulatory stay of the FDA’s approval of the ANDA for the proposed generic product pending the district court’s resolution of the the dispute, or 30-months from paragraph IV notice letter, whichever occurs first.5 Such a stay does not deprive the FDA of its jurisdiction to continue to examine the ANDA application, and the FDA’s practice is to continue review and even grant tentative approval with final approval pending resolution of the case. Lengths of ANDA examinations vary considerably depending upon the timing of the ANDA filing, the original product, the would-be generic, the sufficiency of the bioequivalence testing, the proposed labeling for the generic product, and many other factors. If the FDA completes its review of the ANDA prior to the district court’s ruling or

3 The Act requires the applicant or holder of a New Drug Application (“NDA”) to list the patent rights applicable to a

drug in an FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations. Commonly referred to as the “Orange Book”, this publication lists all commercial drug products approved in the United States along with the patents relevant to the active drug ingredient, as well as formulations, inert ingredients and uses. Typically listed patents include compound patents, formulation patents, and method of treatment or use patents.

4 In most instances, a patent holder will receive Paragraph IV Certifications from multiple generic manufacturers and will file suit against multiple defendants in the courts where there is jurisdiction.

5 21 U.S.C. 355(j)(5)(B)(iii). In the event that this regulatory stay is less than seven and one-half years from the date of approval of the new active ingredient, the 30-month stay may be extended “by such amount of time (if any) which is required for seven and one-half years to have elapsed from the date of approval” of a new active ingredient. See 21 U.S.C. 355(j)(5)(F)(ii).



the expiration of the 30-month period, it will issue an “approvable” letter, indicating that the FDA intends to allow the ANDA when it is able to do so.

The purpose of providing an automatic stay is to permit the parties to resolve the merits of any

patent enforcement action before permitting a generic drug to enter the market.6 Congress recognized that premature generic entry could harm the branded company and could generate significant damage claims against the generic manufacturer. Accordingly, the stay was designed to minimize the risk of irreparable harm to the branded company and the generic company incurring liability for potentially significant damage awards. The 30-month period was chosen as a reasonable

approximation of the time it should take a court to resolve the patent dispute on its merits.7 District courts normally implement a litigation schedule that will enable a final district court decision before the end of (but often close to expiration of) the 30-month stay. The timing of the district court’s decision in an ANDA case is significant to all involved parties. A court decision in favor of the ANDA filer will terminate the 30-month stay early, while one adverse to the ANDA filer will keep the generic drug off the market until the subject patent expires (unless that decision is later reversed by the Federal Circuit). On the other hand, if a court decision has not been rendered by the end of the 30-month stay, the ANDA filer may be eligible to obtain final FDA approval (if the FDA review is complete) and, if the 30 month stay is not extended by the court for good cause shown, will have the right to launch its generic product. Because such a launch would be “at risk” of infringement, an ANDA filer may decide not to launch the generic pending the district court’s decision (or that of final decision from the Federal Circuit).

OVERVIEW OF BIOSIMILAR LITIGATION

The Biologic Price Competition and Innovation Act (“BPCIA”), which was passed as part of the Affordable Care Act, for the first time allowed developers of products similar to a previously approved biologic (the “reference product”) to rely upon the safety and efficacy test data submitted to the FDA by the original developer of that product (the “reference product sponsor”) for the purpose of gaining marketing approval of a “biosimilar.” A biologic therapeutic (also known as a “biologic”) is any medicine made using a living organism. Biologics are larger and more complex than traditional pharmaceuticals, which are chemically synthesized. Also, because biologics are made from living organisms and not synthesized in a laboratory), they are inherently variable. As a consequence, biosimilar products are different from “generics” because, while a biosimilar may be very similar to a biologic reference product, it is not identical to the reference product. Therefore, biosimilar manufacturers must demonstrate that their proposed products are “highly similar to the reference product notwithstanding minor differences in clinically inactive components” and “there are no clinically meaningful differences between the biological product and the reference product in

terms of the safety, purity, and potency.”8

6 Ben Venue Labs., Inc. v. Novartis Pharm. Corp., 146 F. Supp. 2d 572, 579 (D.N.J. 2001) (“[T]he purpose of the

30-month stay is…to create an adequate window of time during which to litigate the question of whether a generic

will infringe the patented product, without actually having to introduce the generic product to the market.’’ (citing

130 Cong. Rec. H9118 (daily ed. Sept. 6, 1984) (statement of Rep. Waxman); 130 Cong. Rec. S10504 (daily ed.

Aug. 10, 1984) (statement of Sen. Hatch)). 7 [Address what happens if 30-month stay expires and litigation still pending. Describe what happens if ends earlier.]

8 See 42 U.S.C. § 262(i)(2).

Commented [A4]: Consider adding some background on Congress trying to balance interests. Would also help everyone to provide a short discussion on differences between Hatch-Waxman and BPCIA and why Congress thought it was important to have those differences. This will help this section read like it is more balanced.

Commented [A5]: XX’s suggestion is a good one; we need a volunteer to draft something.



Both the BPCIA and Hatch Waxman are intended to facilitate the marketing of competitive products, while providing a streamlined, efficient process to resolving patent disputes. They both permit the generic or biosimilar applicant to rely, in part, upon the safety and efficacy test data submitted by the reference product sponsor. They both provide incentives to the generic or biosimilar manufacturers to file applications as early as practicable, including exclusivity periods for being the first to file certain types of applications. But, the BPCIA differs from the Hatch-Waxman Act in several ways. While FDA approval under the Hatch-Waxman Act relies on bioequivalence studies, the BPCIA relies on studies demonstrating no clinically meaningful differences from the reference product in safety, purity, and potency. The BPCIA contains longer and more timing restrictions on when a biosimilar applicant may submit and obtain approval of a biosimilar to a newly approved biologic product, but it contains no automatic stay of FDA approval triggered by a lawsuit, like Hatch-Waxman does. Accordingly, for some biosimilar products, FDA approval may occur before patent litigation is even initiated or completed. Moreover, there are no Orange Book listing requirements imposed on the reference product sponsor for relevant patents, nor are there patent certification and notice requirements imposed on the biosimilar applicants. Instead, the BPCIA creates a framework in which the reference product sponsor and biosimilar applicant may negotiate over the potential patents to be litigated before the litigation commences.

Before the passage of the BPCIA, each biologic submitted to the FDA for approval needed to undergo a full complement of safety and efficacy testing, regardless of how similar that product traditimight be to a previously approved therapeutic biologic. Absent prohibiting patent protection, developers of biologics could conduct that testing and gain regulatory approval for their biologics without regard to when other similar biologics had been approved. Competing drugs, all of which target the same condition, might each be independently developed by competing biologics manufacturers without reliance on their competitors’ safety and efficacy data.

The BPCIA specifies that for parties wishing to rely on another product’s safety and efficacy testing, a biosimilar application may first be filed beginning at four years after the original approval of the reference product, but that no such application will be approved until 12 years after the original approval of the reference product. Depending upon the filing date of the biosimilar application, a period of up to eight years may thus be provided during which the parties may work to resolve any patent infringement issues.

While the BPCIA does not require that all patent issues be resolved before biosimilar approval and marketing, the BPCIA does provide for a fairly elaborate number of pre-litigation information exchanges between the patent owner and biosimilar applicant, which exchanges have become known as the “patent dance.” These information exchanges are intended o identify which of the reference product sponsor’s patents may be asserted to cover the proposed biosimilar, which patents the parties wish to litigate immediately, and which patents the parties are willing to defer litigating at

least until after the FDA has approved the biosimilar for marketing.9 The BPCIA has been interpred by the Supreme Court as providing a biosimilar applicant the option, rather than the requirement, to

9 The BPCIA contemplates that the parties will engage in the “patent dance” before litigation is filed, though the

subsequent issuance or acquisition of relevant patents by an RPS may require updating the information exchange. In addition, as discussed herein, the “patent dance” exchange has been held not to be a mandatory provision of the BPCIA, so many litigants may engage in only a portion of the information exchange or may opt out of the exchange altogether. [Add cites to BPCIA statute and to S.Ct. Amgen v. Sandoz decision.

Commented [A6]: Something here got cut off?

Commented [A7R6]: Yest,the prior deletion was unintentional and the original text has been retored.

Commented [A8R6]: J. Ko 3/24 note: an alternative formulation has been presented by team co-lead on 3/22: Before the passage of the BPCIA, each biologic submitted to the FDA for approval needed to undergo a full complement of safety and efficacy testing and obtain independent regulatory approval. Absent prohibiting patent protection, ….



participate in the patent dance.10 However, one consequence of foregoing the patent dance is that a patent owner may but is not obligated to bring suit sooner and, if it does so, may avoid certain restrictions placed on the number of patents that may be initially asserted in an enforcement action11

The patent provisions of the BPCIA allow for patent litigation between the patent holder and the biosimilar applicant to begin before the applicant markets its biolsimilar.

The BPCIA further contemplates that a permanent injunction will be entered if the patent owner prevails on the merits prior to the biosimilar product’s approval. In particular, 35 U.S.C. 271(e)(4)(D) provides:

the court shall order a permanent injunction prohibiting any infringement of the patent by the biological product involved in the infringement until a date which is not earlier than the date of the expiration of the patent that has been infringed under paragraph (2)(C), provided the patent is the subject of a final court decision, as defined in section 351(k)(6) of the Public Health Service Act, in an action for infringement of the patent under section 351(l)(6) of such Act, and the biological product has not yet been approved because of section 351(k)(7) of such Act. (bolding and underlining added.)

However, because there is no counterpart in the BPCIA to the 30-month regulatory stay of Hatch-Waxman, biosimilar products may be approved by FDA before the merits of the reference product sponsor’s patent enforcement action against the biosimilar product has been resolved. The remedies available in connection with a lawsuit brought under the BPCIA are discussed further below.

In addition to any patent concerns, many scientific, business and regulatory factors bear on the biosimilar applicant’s decision as to when to file a biosimilar application. The BPCIA’s timing for “patent dance” disclosures is triggered by the filing of a biosimilar applicant’s aBLA. In cases where the reference product has already been on the market for a considerable period of time, some or all of the theoretically-available eight year period for engaging in the “patent dance” may already have passed. If filed early enough to allow the patent issues to be finally resolved before the biosimilar is

10 Amgen v. Sandoz, ___ U.S. ___(2017). Another issue arising in Amgen was whether the BPCIA’s required 180 day

notice of the biosimilar’s intent to market its biosimilar could be given before that product’s approval, or only after. The purpose of this 180 day notice provision is to allow the patent owner to bring any necessary preliminary injunction motions on patents that the parties determined were not to be the subject of earlier litigation. Here the Federal Circuit concluded that the terms of the statute require the biologic to be approved before that notice is given. Because the biosimilar applicant must wait for expiration of the 180 day period before marketing its approved biosimilar, in instances where the biosimilar product approval occurs later than 11½ years after the approval of the reference product, this may result in some delay (but no more than 180 days) in the introduction of the biosimilar. In Amgen, the Supreme Court disagreed, concluding that the product need not be approved prior to the time notice of intent to market is given.

11 In order to facilitate this “dance” to occur, the BPCIA prohibits the premature filing of declaratory judgment cases, and under certain conditions for certain patents, limits future collection of past damages to reasonable royalties. In particular, 271(e)(6)(B) provides:

In an action for infringement of a patent described in subparagraph (A) [action for listed patents brought out of time requirements in the law or dismissed without prejudice], the sole and exclusive remedy that may be granted by a court, upon a finding that the making, using, offering to sell, selling, or importation into the United States of the biological product that is the subject of the action infringed the patent, shall be a reasonable royalty. (emphasis added.)



approved., the biosimilar applicant may be relieved of the risks of any patent damages and the potential disruption of its biosimilar marketing were a patent-based injunction to be entered after the biosimilar’s launch. Nonetheless, patent issues are only one of many important factors, and other circumstances and considerations may favor later filing of the biosimilar application.



Pleading Standards For Biopharmaceutical Cases—Unique

Considerations Pleading requirements in patent cases have been the subject of significant attention in recent years. In particular, courts have focused on whether and how the Iqbal and Twombly standards should be applied, and the effect of the abolition of Form 18 in the December 2015 amendments to the Federal Rules of Civil Procedure. The broad purpose of these changes was to discourage pro forma pleadings lacking evidentiary support,and to ensure that under the notice pleading standard defendants would receive fair notice of the asserted basis for the claims against them. The Sedona

Conference’s Working Group 10 has developed best practices recommendations on this subject.12 Broadly speaking, that guidance applies to biopharmaceutical cases and this section treats only certain unique elements that arise for cases concerning biologics.

With certain important exceptions, the series and nature of prior exchanges of information that occur between biopharmaceutical patent holders and alleged infringers mean that pleadings play a less significant role in giving the patent holder or ther alleged infringer notice regarding the nature and scope of the claims of each party regarding infringement and invalidity. On the one hand, this means that the alleged infringer is less at risk that it will lack the information it needsto mount an effective defense. On the other hand, it means that a patent holder will often (although not always) have access to the information necessary to target its allegations of infringement in a way that identifies the claims that are at issue and the compounds, formulations or methods that it accuses. Particular care should be taken in the more unusual cases in which either the patent holder lacks information about the accused infringer’s process or product or where the patent holder is asserting a claim regarding a patent that did not go through the exchange process included in either the ANDA or BPCIA processes.

Historically, the great majority of patent litigation in the biopharmaceutical area consisted of ANDA cases brought under the procedures of the Hatch-Waxman Act. In these cases it has been rare to encounter pleadings that are insufficient to provide notice or that are otherwise inadequate. In the first place, ANDA litigation is in effect initiated by the defendant through the act of submitting its Abbreviated New Drug Application for marketing approval to the FDA and, if it intends to begin marketing prior to the expiration of any patents listed in the Orange Book with respect to the approved drug product, providing a detailed explanation of its invalidity and non-infringement positions to theNDA holder. Because of this inversion of the typical roles of plaintiff and defendant, entities named as a defendant in an ANDA case almost always have a very good understanding of the basis for the claims asserted against them. In addition, as a result of the exchanges that have taken place between the parties before litigation is commenced, the pleadings in ANDA cases have tended to be significantly more detailed than was required under the old Form 18. Typically the complaint in an ANDA case identifies the relevant NDA, the approved drug product and its

12 See The Sedona Conference Commentary on Patent Litigation Best Practices: Chapter on Heightened Pleading Standards (May

2016 public comment ver.), available at: https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Patent%20Litigation%20Best%20Practices%3A%20Heightened%20Pleading%20Standards%20Chapter.

Commented [A9]: The submission of the ANDA gives the Court jurisdiction. Consider rephrasing. I can see people reacting to this as it is the RLD holder’s decision to bring suit.

Commented [A10]: Resp: The ANDA submission does more than just give jurisdiction. As explained, the paragraph IV notice alleging that the patent is invalid and/or not infringed “in effect” initiates the dispute.

Commented [A11]: Recommend deleting this sentence. I do not think we will get agreement that the roles are reversed. I also don’t think we can say that defendants almost always have a very good understanding of the basis for the claims asserted against them. Because of the 30 month stay, there is an incentive to initiate suit. I’ve been in plenty of cases where the non-infringement defense is fairly clear (and straightforward) yet the defendant still gets sued.

Commented [A12]: Resp: This was not the rentiment of the the group. This inversion has been recognized, for example, in the local rules of the District of New Jersey, and distinguishes ANDA cases from other patent litigation.

https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Patent%20Litigation%20Best%20Practices%3A%20Heightened%20Pleading%20Standards%20Chapter

https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Patent%20Litigation%20Best%20Practices%3A%20Heightened%20Pleading%20Standards%20Chapter



indications, the ANDA, and at least the salient facts about the information provided by the defendant to the plaintiff (the Paragraph IV notice and detailed statement) prior to the filing of the complaint. In non-ANDA biopharmaceutical cases—of which there have historically been relatively few—pleading practices appear to have largely followed the style of ANDA complaints and likewise tend to include information regarding the accused product, the patented product if there is a commercial embodiment, and their respective FDA approvals. To summarize then, the “bare bones” patent infringement complaint has generally not been a problem in this field.

There are situations in which an ANDA plaintiff may have to plead its complaint with less than complete information. For example, where the parties have been unable to agree to the terms of an offer for confidential access, the plaintiff may not have received information relevant to a determination of infringement or non-infringement of some or all listed patents. Because the filing of an ANDA with a Pararagraph IV notice constitutes a technical act of infringement and given the very significant consequences of failing to bring suit within the prescribed statutory time period—loss of the 30-month stay of ANDA approval—plaintiffs will almost always bring suit within the allotted 45-day window to commence litigation.

A similar situation can emerge in biosimilar litigation with respect to which FDA approval is sought under the Biologics Price Competition and Innovation Act, or BPCIA. Under the holdings of the Supreme Court (and the Federal Circuit, on remand) in Amgen v. Sandoz, a biosimilar applicant may elect not to disclose to the reference product sponsor its FDA submission or “aBLA,” other information that describes the process or processes used to manufacture the biological product, and/or additional information requested by the reference product sponsor. The submission of the aBLA is an act of infringement of any assertable patents under 35 U.S.C. §271(e)(2)(c), but as a practical matter the reference product sponsor may not know the full scope of its patents that could form the basis of a reasonable claim of infringement, especially for example where the patents are directed to methods of manufacture. Both law and practice are still evolving in this area and it remains to be seen how plaintiffs will address such a lack of information.

If the information exchange under the BPCIA has taken place, the alleged infringer has provided its FDA application and other information under 42 U.S.C. §262(l)(2), and the reference product sponsor has provided a list of assertable patents under 42 U.S.C. §262(l)(3)(A), the parties, in some respects, may each have more information about each other’s positions than in a typical patent lawsuit. Nonetheless, where the parties have completed this exchange process, the dismissal of a subsequent complaint can raise additional issues. Under the BPCIA remedy provisions codified at 35 U.S.C. §271(e)(6)(A) and (B), if an action asserting such a patent is dismissed without prejudice or not fully prosecuted by the patent holder, the patent holder’s remedy in a subsequent action may be limited to a reasonable royalty. Thus, at least arguably, a consequence of a successful motion to dismiss without leave to amend might be to cut off the plaintiff’s right to lost profits damages or injunctive relief if the action is subsequently refiled with a new complaint that cures the original pleading defect. Given the short history of BPCIA litigation, this situation has yet to be addressed by the courts.

Another potential basis for a motion to dismiss is failure to meet the venue requirements of the patent statute. Now that the Supreme Court has generally restricted venue in its TC Heartland decision, the courts are beginning to address whether TC Heartland will similarly restrict venue in ANDA and biosimilar cases under the BPCIA, both of which rest on statute-based technical

Commented [A13]: Consider rephrasing? Seems strange that a patentee doesn’t know the full scope of its patents. I would recommend breaking out the second part of the section and draw an analogy to the HW situation where there is no agreement on OCA so the RLD holder doesn’t have the information it needs to make an infringement determination.

Commented [A14]: Resp:Agreed. Better to be phrased “reference product sponsor may not know which of its patents could reasonably be asserted to be infringed, especially…”



infringements which may be viewed as being of national scope. One court recently ruled that TC

Heartland “clearly” applies to ANDA cases.13

As noted above, the consequences of dismissal might be very severe in BPCIA litigation. The same is true in the ANDA context where even if a suit is refiled in a forum where venue is proper, the result may be forfeiture of an automatic 30-month stay. Patent cases must proceed in federal court. Thus, given the potential prejudicial effect of a dismissal in both ANDA and BPCIA litigation, courts may opt to transfer suits or ensure that the patent holder is in a position to proceed in another venue rather than dismiss for improper venue. In any event, it seems likely that venue disputes will now become significantly more common in biopharmaceutical cases.

In view of the considerations discussed above, best practices in this area should balance a defendant’s need for fair notice of the claims against it with the scope of information available to the parties in the individual dispute and the potentially prejudicial consequences of dismissal to the patent holder in an ANDA or BPCIA case. In deciding a motion to dismiss, a court should understand what really underlies the motion and the claim of lack of notice. As part of best practices, at least the following factors should be considered:

• Whether the plaintiff has undertaken a reasonable investigation to assess infringement

• The plaintiff’s efforts to gain access to information for pleading purposes

• The scope of the information exchanged before the lawsuit was filed

• Whether other venues are already available for the suit

• Any evidence of gamesmanship or unclean hands by either party

• Potential relief for the defendant other than dismissal that may cure a lack of notice

13 Bristol-Myers Squibb v. Aurobindo, 2018 U.S. Dist. LEXIS 179154 at *16-17 (D.Del. 2018) (J. Stark).

Commented [A15]: This is a presentation of brand side argument without a presentation of the counter argument. Consider deleting sentence.

Commented [A16]: Resp:The sentence appropriately recognizes that this is an option that the court may or may not choose to exercise.

Commented [A17]: I’m not aware of any case law that considers this as a factor. Is there legal precedent for this? If not, isn’t this essentially adding an additional factor (other than the ones listed in the bullet points below) for the Courts to consider? We will lose our generic audience.

Commented [A18]: Resp:Suggest replacing “draconian” with “prejudicial”



Discovery Issues Unique to Biopharma Litigation

The Sedona Conference’s Working Group 10 has published as part of its Commentary on Patent Litigation Best Practices a Chapter on Discovery, providing principles and best practice

recommendations for patent litigation in general.14

INITIAL BURDEN OF PRODUCTION; SEQUENCE OF CONTENTIONS

Because Hatch-Waxman litigation is usually precipitated by the defendant in the form of a challenge to the plaintiff’s patents, one approach to case management is to reverse the usual sequence of disclosure of contentions by requiring the defendant to go first. For example, this approach is embodied in the Local Rules of the District of New Jersey specifically for ANDA cases. Under what circumstances should the patent challenger have the burden to go first in disclosure of contentions, and should the same principles apply to both Hatch-Waxman and biosimilar cases?

In ANDA cases and in BPCIA cases where the statutory information exchange has occurred, courts should consider whether to require the defendant to disclose its contentions before the plaintiff. However, this procedure should also permit subsequent amendment of contentions where appropriate, for example with respect to previously unknowable information obtained in discovery.

Cases brought under the Hatch-Waxman differ from the typical patent infringement action in several respects. One of the salient differences is that the accused infringer largely controls when the litigation will begin. Hatch-Waxman cases usually involve patents listed in the FDA patent registry known as the Orange Book. For any product regulated as a drug, all patents covering the product itself or an approved indication must be listed in the Orange Book and thus a would-be generic market entrant has advance notice of them. If market entry is sought before the expiration of any listed patent, the generic must provide the patent holder with a detailed statement of the reasons why it contends the patent is not infringed, invalid or unenforceable. Typically such a generic market entrant will spend several months or even several years analyzing the patent situation before it provides the detailed statement and triggers litigation. Thus, by comparison with a typical patent infringement action outside the biopharmaceutical area, the defendant in a Hatch-Waxman case not only has greater opportunity to develop its positions well in advance of the litigation, but is also subject to a statutory requirement that it do so.

Because of this there is a question whether the defendant in a Hatch-Waxman action should be required to disclose its contentions regarding infringement, validity and enforceability before the plaintiff patent holder is required to set forth its contentions. This approach has been adopted by the District of New Jersey in its Local Patent Rule 3.6. The rule also requires an ANDA-filer to produce its entire ANDA on the date when its answers or otherwise responds to the complaint.

14 See The Sedona Conference Commentary on Patent Litigation Best Practices: Chapter on Discovery (Dec. 2015 Edition),

available at: https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Patent%20Litigation%20Best%20Practices%3A%20Discovery.

Commented [A19]: J. Ko 10/11/18 note: several subsections need to be drafted in the first instance here: Sect. IV.D-H.

https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Patent%20Litigation%20Best%20Practices%3A%20Discovery

https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Patent%20Litigation%20Best%20Practices%3A%20Discovery



In our view there is merit to the approach adopted by the District of New Jersey. Given the unique statutory framework it is appropriate to require that an accused infringer disclose its contentions first, and this will help facilitate prompt resolution of the case. However, it is also appropriate that there should be a mechanism to permit subsequent amendment of contentions where appropriate. Non-limiting examples of such circumstances include situations in which the ANDA-filer learns information in discovery which it could not reasonably have known through pre-suit diligence or when a change in invalidity or non-infringement contentions is useful or necessary to respond to a position taken by the NDA-holder as to infringement or validity.

Biosimilar cases, brought under the Biologics Price Competition and Innovation Act or BPCIA, are also subject to unique rules albeit ones that in some respects differ markedly from the Hatch-Waxman regime. One of the most significant differences is that under the BPCIA there is no patent registry equivalent to the Orange Book. Instead, the BPCIA provides for a pre-litigation information exchange to identify relevant patents and require the parties to crystallize the disputes on their respective positions regarding those patents. This procedure begins with disclosure of the biosimilar applicant’s FDA submission, frequently referred to as an abbreviated Biologics License Application or “aBLA,” to the patent holder, followed by an identification of assertable patents and an exchange

of contentions with respect to validity, enforceability and infringement.15 Notably, in this exchange

the biosimilar applicant is required to provide its position first.16

The Supreme Court has recently decided that the sole consequence under federal law for failing to disclose the aBLA is that specified in the provision which then allows the patent owner to

immediately bring a declaratory judgment action for infringement. 17 The Court declined to address the question as to whether further liability and/or injunctive relief might be available under state law, remanding that issue for further consideration. Assuming that the law remains as it currently is and that the exchange is not mandated, biosimilar cases will fall into two categories: those in which the pre-litigation exchange of contentions took place and those in which it did not. It is difficult to see a compelling reason to treat the second category of cases differently from any other action for patent infringement: the plaintiff will commence the case by bringing suit on one or more patents of its choice and the normal pretrial procedures may then be followed.

However, where the statutory pre-litigation exchange of information has taken place, the situation is materially different. Under this procedure the biosimilar applicant will have already provided what are in essence non-infringement, invalidity and perhaps unenforceability contentions pursuant to subsection 262(l)(3)(B). The patent holder will have provided responsive contentions pursuant to subsection 262(l)(3)(B), and thus issue will have been joined. There may be value in converting these statements into formal contentions as required by most patent local rules and therefore we believe that as a best practice parties should be required to do so. And, given that under the statutory regime it is the biosimilar applicant that frames the issues it makes sense to require that party to disclose its contentions first. For the same reasons addressed above with respect to ANDA cases, there should be an opportunity to amend contentions where appropriate, for example with respect to previously unknowable information first obtained in discovery.

15 42 U.S.C. §262(l)(2)-(3).

16 42 U.S.C. §262(l)(3)(B).

17 Sandoz v. Amgen, ___ U.S. ___at ___. (No. 15-1039).



PROTECTIVE ORDER AND ACCESS ISSUES FOR PLA/BLA, CONSIDERATION OF AN FDA BAR AKIN TO A PROSECUTION BAR

Principle No. 1 – Access to information in the ABLA and ANDA should be provided to the patent holder under terms that balance the patent holder’s need for certain information in order to assess claims of patent infringement with protections for the confidentiality of the Section k applicant’s confidential information.

Best Practice 1 – The parties should agree to pre-litigation confidential access provisions that provide access for outside and appropriate inside counsel and for technical experts. Participation in IPRs should not preclude access to confidential information of the biosimilar applicant.

The BPCIA includes within it default terms for a confidential access by the innovator and patent holder of the subsection k applicant’s confidential information.18

In-house and outside counsel. The statute provides for access by “One or more attorneys designated by the reference product sponsor who are employees of an entity other than the reference product sponsor.” There is no limit provided in the statute for number of attorneys from an outside firm or the number of outside firms that a reference product sponsor may designate. The statute limits the number of in house counsel to one individual; however the parties should consider circumstances when access to more than one in-house attorney may be warranted, such as different technical areas of responsibility or expertise.

Prosecution bar. The statute provides that in house and outside counsel who are eligible to have access to the subsection k applicant’s information “do not engage, formally or informally, in patent prosecution relevant or related to the reference product.” Although recipients of the confidential information may only use the information for the “purpose of determining . . . whether a claim of patent infringement could reasonably be asserted,” the patent prosecution bar with respect to the reference product addresses a concern of inadvertent disclosure of the information. Administrative post-grant challenges to patents, such as Inter Partes Review or Oppositions, may be sought by biosimilar and ANDA applicants for patents that are or may be involved in Hatch Waxman or BPCIA litigation. Involvement in such post-grant proceedings should not be considered engaging “formally or informally, in patent prosecution relevant or related to the reference product.”

Party experts. The expertise of outside consultants is often helpful in assessing whether a claim of patent infringement may be reasonably brought, and in assessing whether additional information may be needed in order to make that assessment. The BPCIA provides that a patentee must obtain the prior consent of the subsection k applicant in order to provide information in the ABLA to outside scientific consultants. Such consent by the subsection k applicant “shall not be unreasonably

18 The statute governing ANDA applications provides that a “document providing the offer of confidential access shall

contain such restrictions as to persons entitled to access, and on the use and disposition of any information accessed, as would apply had a protective order been entered for the purpose of protecting trade secrets and other confidential business information.” Many courts and the USPTO have developed default protective orders that incorporate many of the principles discussed in this commentary for ongoing proceedings. The principles recited below with respect to aBLA cases also apply to ANDA cases.

Commented [A20]: I think this provision may be objetionable to generic and biosimilar representatives.



withheld.” The parties should agree to access for outside technical consultants of the reference product sponsor, provided that the technical experts: (a) agree to maintain the information as confidential and (b) agree to use the information solely for the purpose of assisting in determining whether a claim of patent infringement may be reasonably brought. The parties should agree to a procedure to permit the subsection k applicant to object to experts prior to disclosure being made.

Best Practice 2 – The parties should agree to litigation phase protective orders that are substantively the same as the pre-litigation phase protective orders.

The prospect of different rules in the pre-litigation and litigation phases creates logistical difficulties. Parties should agree to restrictions in the litigation phase protective order that are substantively the same as in the pre-litigation confidential access agreement.

SCOPE OF DISCOVERY: PROPORTIONALITY AND ASYMMETRY

Best Practice 3 – Given the often substantial amounts in controversy in Hatch-Waxman and BCPIA cases, all the factors set forth in Fed. R. Civ. Proc. 26(b)(1) should be considered in a proportionality evaluation on the scope of permissible discovery.

The latest amendments to the Federal Rules of Civil Procedure went into effect on December 1, 2015. One of the most significant changes was the change to Rule 26(b)(1) which defines the scope of permissible discovery. The amendments eliminated the prior standard for the scope of discovery that had persisted for decades: Discovery “reasonably calculated to lead to the discovery of admissible evidence.” In its place, the Rule now sets forth a standard rooted in relevance and “proportionality.” The new rule reads:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable. Fed. R. Civ. P. 26(b)(1).

Courts reactions to amended Rule 26 have been mixed. Some courts have rejected the notion that proportionality is new, explaining that various aspects of the proportionality assessment were taken into account under the prior version of the rule. Other courts have said that the amended rule places additional burdens on a party requesting discovery when faced with objections by the responding party. In applying the amended rule thus far, many courts have looked at the dollar value of the case, and the expense of the requested discovery relative to the amount in controversy in assessing proportionality. Such an assessment should not stop there in patent cases arising under the Hatch-Waxman Act or the BPCIA, as the high dollar value of these cases and the fact that they involve healthcare and modern therapeutics could, at some level, be used to justify any and all discovery. In

Commented [A21]: This isn’t super-clear. I think the point here is that there still needs to be some relevance/burden assessment, not just based on case value/proportionality because the case value perspective could lead to onerous and asymmetrical discovery obligations that could be used more tactically than substantively to advance a case.



Hatch-Waxman and BPCIA cases however, time is often the most valuable thing at stake, and overbroad discovery which unnecessarily consumes time and the limited resources of the court may be the enemies of reaching a fair, just and timely result. Accordingly, courts evaluating discovery requests in these cases should also consider the other factors – including the scope of the patent claims in dispute, the discovery that is most relevant to resolving the infringement and invalidity issues attendant to those claims, and the facts underlying any equitable and/or public interest issues the court may be called on to decide. In determining the proportionality of discovery, courts should be mindful of the asymmetry of potentially discoverable information that exists as between the patent holder and the ANDA applicant. In most Hatch-Waxman cases, the ANDA applicant has very little in the way of documents beyond the ANDA itself, whereas the approved NDA filer may have a large volume of data relating to the FDA-approved drug. To be sure, it is a rare case in which the entirety of data is relevant to the patent claims at issue, but it can nevertheless be exploited by an ANDA applicant seeking to impose significant burdens on its opponent in the litigation. Focusing on the key issues in dispute in the case will help to curtail overly broad and unnecessarily burdensome discovery. To the extent the court nonetheless concludes that extensive, unilateral discovery is necessary, the court may wish to have the party requesting that discovery pay for the cost of its production and consider whether that production may warrant an extension of the 30-month stay.

MULTIPLE DEFENDANT ISSUES

1. Consolidation/coordination – best practices. May not matter as long as same patent issues before same judge. Would be helpful to get a judicial perspective here.

• Consolidation for discovery only? For invalidity? For non-infringement?

• Protective order issues vis-avis multiple defendants.

2. Special considerations where multiple defendants with different interests in moving forward with the litigation.

• Consider terms on which courts may stay certain actions to simplify proceedings.

3. Special considerations where some generics already on the market or already a first traunch of defendants?

ANY SPECIAL DISCOVERY ISSUES CREATED FOR SPECIAL TYPES OF CLAIMS, DOSING CLAIMS, METHOD OF TREATMENT CLAIMS, ETC.

DISCLOSURE OF FDA CORRESPONDENCE ANDA FILER ONLY? IS DISCOVERY OF NDA (OR BLA) RELEVANT AT ALL? SHOULD CERTAIN PORTIONS BE DISCOVERABLE? UNDER WHAT CIRCUMSTANCES?

CONSIDER ADOPTION OF NJ LOCAL RULES OR SOMETHING LIKE IT?

• Where working or where not working?

Commented [A22]: Jud. Adv. 9/28 comment: On p. 14, the last sentence of section C recommends that the court consider cost-shifting onto the generic for “extensive, unilateral discovery” from the branded product owner. This will be controversial and, in the view of this advisor, may not necessarily be well-founded. Cost-shifting simply because one party has more information to produce than another would open up a Pandora’s Box of sanctions-like applications that would make these litigations even more consuming of judicial resources than they are already. Strongly recommend removing this sentence.

Commented [A23]: J. Ko 10/11/18 note: several subsections need to be drafted in the first instance here.



• Judge Felzer…DJ rules for patent cases.

OFF-LABEL

• Carve outs or skinny label, potential additional discovery do you need to get

inducement, sales force telling doctors



Interplay Between PTAB Challenges and ANDA and BPCIA Litigation

Principle No. 2 – In cases brought under the Hatch-Waxman or BPCIA Acts, the courts and

the USPTO should take into consideration their respective judicial and PGR/IPR proceedings to achieve a just and efficient resolution of these disputes.

Principle No. 3 – In managing their respective proceedings, the courts in ANDA and BPCIA litigations and the USPTO in PGR/IPR proceedings should take into account the interests of patent owner(s) and all actual and potential generic or biosimilar applicants, avoiding to the extent possible, prejudice to all actual or potential parties.

OVERVIEW OF AIA POST GRANT CHALLENGES

The America Invents Act of 2011 authorized the USPTO’s Patent Trial and Appeal Board (PTAB) to review the validity of issued patents in a streamlined adversarial proceeding. While the AIA authorized three types of post-grant challenges — inter partes reviews (IPR), post-grant reviews (PGR), as well as a transitional review for covered business method patents (CBM) — IPRs and PGRs are the most relevant to biopharmaceutical patents. By statute, the PTAB is required to make a decision on institution within 6 months of the filing of a petition for IPR or PGR. In that decision, the PTAB must decide if the petition has shown that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims sought to be challenged. If the PTAB institutes review (or a “trial”), the PTAB is supposed to issue its final written decision on validity within another 12 months (or, by statute, 18 months from the filing of the petition). Where the proceeding is joined with other reviews, which is not uncommon when more than one party is seeking approval of a generic drug or biosimilar, then the actual length of time to a final written

decision may substantially exceed one year from institution.19

Moreover, unlike a district court proceeding, there is no Article III standing requirement for a party to bring an IPR or PGR challenge; the only limitation on the timing for filing such a challenge is that a party may not file a challenge more than one year after it or its real party in interest has been served with a complaint alleging infringement of the patent at issue.20

An IPR proceeding will normally take 18 months to complete as measured from the time of its first filing. This period includes about 6 months for the USPTO to decide whether or not to institute an

19 The PTAB views joinder cases as having no deadline. Some examples where PTAB issued it’s final written decision

after 12 months: IPR2016-00318, IPR2016-00237, IPR2016-00240, IPR2016-1340, IPR2016-0084.

20 35 U.S.C. §316(a)(11). See also 37 C.F.R. §42.100(c). Note that Federal Circuit does require that IPR appellants establish standing to appeal by showing actual injury or injury-in fact. Accordingly, not all unsuccessful IPR challengers may bring appeals to the Federal Circuit. The Article III injury-in-fact requirement applies for appeals from the PTAB, the burden falling on the IPR petitioner to show actual injury before appealing to the Federal Circuit. Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1172 (Fed. Cir. 2017)

Commented [A24]: Should add footnote that PTO now considering change in PTAB procedure so that it applies same claim construction standard as the Courts and NOT broadest reasonable interpretation

Commented [A25]: This change has now been implemented by the USPTO. Suggest we mention in the body of the text rather than a footnote here.

Commented [A26]: Question to all – agreed? If so – action item to implement.

Commented [A27]: Should footnotes be included about recent Sp Ct decision upholding PTAB deciding validity of claims not violating Constitution and also new procedure that PTAB will consider all claims and grounds of challenge raised in the petition.

Commented [A28]: Action Item: Agreed. The SAS case should be mentioned, although it’s not specific to BPCIA or H-W.

Commented [A29]: Action item: Add footnote citing to RPX case.



IPR “trial” and 12 additional months (but no more than 18 months) for that trial to be completed and for a final USPTO decision to be rendered. A petition seeking institution may not be filed more

than one year after district court litigation is initiated.21 A decision whether to file a petition for IPR therefore often will need to be made before issues are fully developed in litigation, and sometimes

even before all of the asserted claims are known.22

Because IPR proceedings are limited to challenges based on novelty and obviousness, and then only on prior art consisting of prior patents and printed publications, even if an IPR is instituted, it may not address all of the validity issues that have been raised in the ANDA or BPCIA litigation. Accordingly, validity issues relating to patent claims not made the subject of an instituted IPR trial, and those asserted claims which are found “not invalid” by the USPTO, may still need to be litigated before the district court.

The Sedona Conference’s Working Group 10 has published as part of its Commentary on Patent Litigation Best Practices a Chapter on Parallel USPTO Proceedings, providing principles and best

practice recommendations for such parallel patent proceedings in general.23

TIMING OF IPR/PGR CHALLENGES

An ANDA or ABLA applicant may bring an IPR or PGR challenging the validity of an innovator’s patent even before it ever files for regulatory approval. While both the Hatch-Waxman and BPCIA statutes make the filing of an abbreviated license application an artificial act of infringement that permits patent litigation to commence, as noted above, IPRs and PGRs do not require Article III standing. As such, a potential ANDA or ABLA applicant may seek institution of an IPR at any time (subject only to the one year limitation triggered by any infringement suit brought against it by the

patent holder).24

21 35 U.S.C. §316(a)(11). See also 37 C.F.R. §42.100(c).

22 35 U.S.C. §315(b). In ANDA cases, and in BPCIA cases where the parties have engaged in full disclosures under the statutory “patent dance,” the likely product claims to be asserted are already known, as they are identified in the Orange Book listing which was the subject of the ANDA applicant’s Paragraph IV certification or have been identified in the information exchanges provided under the BPCIA. In those cases where the claims to be asserted are not already known, the most common reason is that the patent owner has not been given sufficient information concerning the details of a product or of an involved manufacturing process or formulation to reasonably determine which claims need to be asserted.

23 See The Sedona Conference Commentary on Patent Litigation Best Practices: Chapter on Parallel USPTO Proceedings (Stage One, Oct. 2016 Edition; and Stage Two July 2017 public comment ver.), available at: https://thesedonaconference.org/publication/Parallel_USPTO_Proceedings

24 Hatch-Waxman precludes parties from litigating the patent issues before an ANDA application is filed; in constrast, there is no such statutory prohibition concerning the filing of IPR petitions in the period before an ANDA filing.

Commented [A30]: It may be even more likely in the context of a BPCIA suit, than an ANDA suit, that the asserted claims may not be known within a year of filing suit. This could happen when the biosimilar applicant chooses not to share the ABLA, and other requested information, with the reference product sponsor (RPS) , and the RPS brings suit on a whole host of patents to avoid losing the opportunity for lost profits. I suggested some language to add to footnote 19 but maybe this is more complication than you want here.

Commented [A31]: Recommend adding this to the section on BPCIA special considerations if the group agrees it’s a good idea to break out the BPCIA.

Commented [A32]: Question to all – what if anything from here should we export to new Sect. V.E. (SPECIAL CONSIDERATIONS RELATING TO BPCIA CASES).

Commented [A33]: Recommend keeping this section as a HW only section and addressing BPCIA cases in a seperate section. If the group decides to keep this as HW only, I would recommend revising this to current practice. I think the reason we don’t see many HW litigants filing IPRs early is because they risk forfeiture if they do.

Commented [A34]: J. Ko note: see new subsection V.E. (SPECIAL CONSIDERATIONS RELATING TO BPCIA CASES). Question to all – should we thus delete “or ABLA” here?

Commented [A35]: The time-bar hasn’t been much of an issue for BPCIA challenges as post grant challenges have, at least to date, been prior to district court litigation.



Best Practice 4 –The parties should inform the USPTO/PTAB and other tribunals of both ongoing and reasonably anticipated litigation involving the same or related patents (e.g., expected Hatch-Waxman or BPCIA litigation), and the potential impact of IPR or PGR proceedings on the litigation..When determining whether to grant institute an IPR or PGR petition, the USPTO/PTAB should take into account if FDA approval is pending or has been approved for a new drug or therapeutic biologic protected by the patent. .

T he Hatch-Waxman Act balanced the interests of the public and innovator and generic pharmaceutical companies, and its litigation framework was a key element to ensuring this balance. PGR and IPR proceedings on biopharmaceutical patents were not available at the time the legislation was passed and may affect the balance set forth in the statute and also alter the process for resolving patent disputes as originally contemplated in the Act. Examples of why this may be so are the ability to initiate PTAB proceedings prior to the earliest date of Hatch-Waxman litigation, the potential for PTAB proceedings to extend beyond the 30 month period intended to complete litigation, and the possible use of district court litigation and PTAB proceedings by multiple ANDA filers to provide numerous opportunities to challenge a patent to provide a final adjudication of patent infringement and validity.

In exchange for providing generic companies an opportunity to perform regulatory testing during the life of patent under 35 USC 271(e)(1), the Act created a specific litigation framework that could not be initiated until after an ANDA application had been accepted by FDA and the generic company submitted a notification letter to the innovator setting forth its position as to non-infringement or invalidity of any patents listed by the innovator in the Orange Book. Under the Hatch-Waxman Act, this period is four years following initial drug approval, or four and ½ years in the event the innovator has submitted pediatric data triggering an additional six months exclusivity.

Under this framework, patent owners are effectively prohibited from suing generic companies because of the infringement exemption of 35 USC 271(e)(1) until after the filing of their ANDA, and generic companies are similarly barred from challenging the Orange Book listed patent in the courts prior to this process. The AIA does not does not contain similar standing requirements and therefore allows IPR and PGR challenges prior to ANDA litigation. The BPCIA also provides a four year period before any patent challenges can be made by the biosimilar applicant, and thus may trigger similar considerations for the grant of PRG or IPR petitions.

IPR challenges are currently seen by some as a strategic alternative for generic drug manufacturers to press certain invalidity contentions before the USPTO’s Patent Trial and Appeal Board (“PTAB”) rather than the court. However, the Hatch-Waxman framework hinges on a complex paradigm in which district court litigation has and will continue to play a central role. Therefore, the decision to pursue IPR on a patent depends largely on how adjudication of an IPR at the PTO will impact the regulatory scheme, i.e., the Hatch-Waxman litigation (also commonly referred to as “ANDA litigation”) in district court.

Depending on the relative timings of the filings of infringement litigation and an IPR petition challenging the asserted patent, and their respective timelines in reaching their final decision, it is possible that an IPR and its appeal could be finally resolved before the corresponding district court

Commented [A36]: Why? I don’t understand this BP at all. I understand having the PTAB consider whether litigation is pending but not whether an aBLA application has been filed. Also, by the way, the filing of an aBLA is NOT public unless the company issues a press release. This is not the sort of thing that is evident to the public.

Commented [A37]: I agree with this comment. Perhaps the following would be better: “When determining whether to institute an IPR or PGR petition, the USPTO/PTAB should take into account whether the challenged patent protects a new drug or therapeutic biologic that has been or is in the process of being approved by the FDA.” I don’t think the intent of this was to reach ANDA or aBLA filings. Presumably, the USPTO would learn of a pending or approved NDA or BLA from the parties.

Commented [A38]: I don’t understand why this is a best practice recommendation (i.e. I don’t understand the objective of this proposal).

Commented [A39]: I agree. Nothing in the AIA suggests that this should be a consideration. HW and BPCIA existed when the AIA was passed, and Congress could have made this a consideration but apparently chose not to do so.

Commented [A40]: XX proposes here a new wording for this best practice that focuses on informing the USPTO of the existence and nature of any actual or prosepective litigation involving patents sought to be made the subject of an IPR or PGR proceeding.

Commented [A41]: Action item to all – does this revised BP work for you?

Commented [A42]: Is this sentence correct? BPCIA provides a 4-year data exclusivity period before any aBLA can be filed. It does not say there cannot be any patent challenges before that time period is up, and the AIA does not prohibit IPR in BPCIA contexts.

Commented [A43]: Resp:Insert “under the BPCIA”. XX further suggests that the sentence end after “applicant.”

Commented [A44]: Resp: We should discuss. Its my understanding that one or more cases DJ have been dismissed when brought before the filing of an ABLA.

Commented [A45]: I’m not sure I understand this point.

Commented [A46]: Resp:We can discuss. The point is that district court ANDA litigation is and will remain an important part of the ANDA approval process, whether or not an IPR is filed.



litigation. A common approach employed by ANDA applicants is to wait for some or all of the one year period after the litigation is commenced before filing their IPR petitions, in which case a district court decision entered before the expiration of the 30 month stay period will often occur at or before the time of a final decision of the PTAB. An ANDA applicant may not wish to file an IPR early because doing so may simply clear the way for its competitors, or because it may risk forfeiture of its 180-day exclusivity period by obtaining a final court decision before it has final FDA approval. Additionally, by waiting to file, petitions can be better positioned to focus on the weak points in a patent owner’s case. Because an invalidity decision by the PTAB in an IPR is an administrative one,

it does not result in the lifting of a 30 month stay until it is affirmed on appeal by the CAFC.25 Accordingly, many ANDA filers rely more heavily on winning the initial district court decision, because a decision that is favorable to the ANDA applicant will lead to an earlier introduction of the generic product. In these situations, if the PTAB invalidity decision is affirmed by the Federal Circuit, it will trump the result of the district court litigation, thereby giving the generic a second route by which to enter the market. On the other hand, the USPTO has recently taken the position that once a final decision has been entered by the PTAB in an IPR, regardless of its outcome, the petitioner is immediately estoped by 35 USC 315(e)(2) from advancing that position or any other

position that it raised or reasonably could have raised in the IPR to the district court.26

There are many factors parties consider before availing themselves an IPR proceeding. An IPR filer (which may or may not be a generic drug company) may elect to file much earlier, even significantly in advance of any paragraph IV filing, in an effort to short circuit the Hatch-Waxman litigation/framework. It is not necessary for an IPR filer who is not an ANDA filer to file a paragraph IV certification to file an IPR challenge. For example, Kyle Bass’ Coalition for Affordable Drugs has filed several IPRs.27 If the ANDA filer does not file a petition for IPR first, but instead waits to be sued, the first consideration is that the IPR statute permits only novelty and obviousness validity challenges based on printed patents and publications, and not other types of validity challenges or non-infringement defenses. The ANDA filer therefore must weigh the strengths and weaknesses of its other validity and non-infringement positions before deciding on the timing for filing the IPR and the appropriate course of action.

Generic companies often weigh the success rates before the PTAB and district courts, as well as the type of patent being challenged (e.g., active pharmaceutical ingredient (API) patents, formulation patents, and method of use patents) in deciding whether to pursue a patent challenge through IPR before the PTAB.

It therefore is not surprising that a dual strategy for patent challenges in the pharmaceutical industry has recently emerged: as soon as Hatch-Waxman litigation begins in the district court, the same patents are simultaneously challenged at the PTAB – though the timings for the patent challenges in the district court and PTAB could vary depending on the facts of each case. Yet, the existence of the

25 [Action item: XXX to look for a citation for this point]

26 See IP Law360, February 5, 2019, “USPTO Says Successful PTAB Cases Can’t Be Cloned in Court,” citing to USPTO Amicus filed in BTG et al v Amneal et al, Federal Circuit Appeal 2019-1147.

27 Susan Decker, Kyle Bass Is ‘Frustrated’ by Shire’s Lialda Patent Ruling, (Oct. 8, 2016), The Washington Post with

Bloomberg, http://washpost.bloomberg.com/Story?docId=1376-OEN2Q56KLVRF01-

4NR4Q2UKT5O10M833ET3A7ALU7.

Commented [A47]: Not much happens in the first year of litigation. You are typically in fact discovery, usually documents haven’t been produced. I’m not aware of this being expressed as a rationale for timing on IPR for the generics. I think it’s because of the forfeiture risk.

Commented [A48]: Resp:What happens in the first year depends on the local rules and case management practices of the forum. In some districts, quite a lot is done in the first year, particularly relating to which claims are being asserted, etc.

Commented [A49]: Has this issue been litigated? The counter-argument here is that once PTAB decides a patent is invalid it is as if the patent never existed in the first place, the 30 month stay dissolves much like it dissolves when the patent expires. If there is case law saying that a patent is not deemed not to exist until a Federal Circuit mandate, I would recommend making that point instead.

Commented [A50]: Resp: This has been litigated. A non-final administrative decision of the PTAB which is on appeal is not binding on the court. Courts thus routinely proceed with their cases pending the Federal Circuit decision….often deciding them on the merits before the Federal Circuit rules.

Commented [A51]: The current trend is to litigate in district court but I think that is because of the number of OB patents listed.

Commented [A52]: Recommend moving this to the BPCIA section as companies have not been challenging patents prior to ANDA filing.

Commented [A53]: Resp: Not so. Some companies that have not filed ANDAs have filed IPRs on drug-related patents.

http://washpost.bloomberg.com/Story?docId=1376-OEN2Q56KLVRF01-4NR4Q2UKT5O10M833ET3A7ALU7

http://washpost.bloomberg.com/Story?docId=1376-OEN2Q56KLVRF01-4NR4Q2UKT5O10M833ET3A7ALU7



dual strategy is based on the idea that the innovator company faces attack in two fronts: the PTAB and the district court.

INTERPLAY OF 30-MONTH REGULATORY STAY AND REQUESTS FOR STAY PENDING IPR (OR PGR)

As noted above, upon initiation of a patent infringement action between branded and generic pharmaceutical companies, the Hatch-Waxman Act (21 U.S.C. § 355(j)) provides for an automatic 30-month stay of FDA approval of the ANDA for the proposed generic pharmaceutical product. The legislative history of the Act makes clear that the purpose of the 30-month stay is to permit

resolution of the underlying patent dispute before the generic product may enter the market.28

Since enactment of the AIA, parties have sought stays of the district court litigation during the pendency of IPRs. This raises questions about whether a stay would create conflict with 30-month stay, and whether it should be extended. Although IPRs progress rapidly, with final written decisions for instituted IPRs issuing within 18 months of a petition’s filing date,29 a stay of the district court litigation during some or all of the 18 months significantly shortens the time available for litigation to resolve before the 30-month stay expires.

Federal courts have broad discretionary power to control the disposition of their cases, including the power to grant a temporary stay of the proceedings pending the outcome of administrative actions. In general – outside the context of Hatch-Waxman cases -- some courts will grant a stay request based on the filing of an IPR petition,30 whereas others will order a stay only after the IPR petition has been instituted.31 District court decisions to grant or deny a stay are based on the consideration of a number of factors, including:

• whether a party will be prejudiced or tactically disadvantaged;

• whether the co-pending administrative review will simplify issues for the district court, and;

• the present stage and posture of the district court litigation.

Courts granting stays generally view the IPR process as one that will simplify the litigation by resolving key issues of invalidity. Indeed, if all asserted claims are found unpatentable, the IPR may resolve the litigation entirely. And, even where claims survive, the issues are simplified because the petitioners will be estopped from asserting in the litigation any ground of invalidity it “raised or

28 Because BPCIA patent litigation does not involve a stay of regulatory approval, the same tension does not exist in

seeking a stay pending IPR, although a delay in the resolution of the BPCIA litigation may affect a sponsor’s ability to secure a permanent injunction as a matter of right. See 35 U.S.C. § 262.

29 See 35 U.S.C. § 316(a)(11); 37 C.F.R. § 42.100(b).

30 See, e.g., Roche Molecular Sys., Inc. v. Cepheid, Case 14-cv-3228-EDL, Document 63, at 6 (N.D. Cal. Jan. 7, 2015).

31 See, e.g., Eli Lilly& Co. v. Accord Healthcare, Inc., 2015 BL 407149 (S.D. Ind. Dec. 11, 2015) (granting a post-institution stay noting, “[l]ast time around, the Court found Defendants’ request for stay to be premature in that no inter partes review had been instituted and thus there was no parallel proceeding that could address any of the issues in this litigation.”).

Commented [A54]: Jud. Advisor consensus:

•Several BPs in this section undiplomatically tell the court what to do

•refocus BPs to: In determining whether or not to stay an ANDA proceeding pending IPR, a court should consider:

▪the effect this will have on the ability of the court to dispose of the litigation substantially in advance of expiration of a 30 mo stay.

▪if parties are willing to extend the stay in light of IPR proceedings.

▪the willingness of the ANDA applicant to toll the 30 mo. Period

▪Etc.

Commented [A55]: J. Advisor 9/28 additional comment: Best Practices 7 through 11 on p. 25: Consider whether issuing this many Best Practices on an area that is undeveloped in the courts is appropriate. It may give the impression Sedona is trying to preempt or unduly influence the judiciary in this area.

Commented [A56]: Question to all – have our Judicial Advisor comments been appropriately addressed in this updated Sect V.C. now?

Commented [A57]: I suggest we add a citation to the legislative history here.

Commented [A58]: Action item: Implement



reasonably could have raised during that inter partes review.”32 Thus, even when IPR petitions have been filed and instituted late in the litigation, district courts have entertained a request for stay.33

In the Hatch-Waxman context, there is generally a strong incentive to deny a stay request, because Courts are disinclined to allow the litigation to extend beyond the 30-month regulatory stay and hence increase the likelihood of an at-risk launch, which may lead to preliminary injunction proceedings. It has been argued that such preliminary injunction proceedings would put a significant burden on the parties and on the court, as they would create the need for accelerated fact and expert discovery to address the likelihood of success on the merits, as well as the other preliminary injunction factors, by the parties and the court in a very compressed timeframe.

Decisions may be expected to vary on a case-by-case basis, and perhaps jurisdiction-by-jurisdiction, as courts come to weigh the various factors over time.

Best Practice 5 – In deciding whether to extend the Hatch-Waxman 30-month stay of regulatory approval, considerations may include whether the extension or lack thereof would (a) cause undue prejudice or place the non-movant at a significant tactical disadvantage, (b) simplify the issues to be resolved, and (c) inappropriately delay the litigation given the status of discovery and any scheduled trial.In considering whether to take the significant step of extending the Hatch-Waxman 30-month stay of regulatory review in ANDA proceedings, a court should consider the following factors: note four highlighted factors below.1. claimed prejudice or tactical disadvantage; 2. impact on discovery deadlines; and 3. improper litigation delays.

To date, in the absence of the agreement of the parties, courts have yet to extend the 30-Month stay in light of a pending IPR. [CHECK] Such agreements may be reached and, particularly if they include an agreement on the effect of such a stay on the issues that will remain for trial and/or what impact the stay of the litigation, will have on the tolling of the 30 month regulatory stay.

Over the past year [UPDATE?], at least two courts have considered whether to extend or toll the 30-month stay to maintain the Hatch-Waxman status quo in the context of considering a stay of litigation in light of a pending IPR.: Eli Lilly & Co. v. Accord Healthcare Inc.,34 and Alcon Labs., Inc. v. Akorn, Inc.35

32 35 U.S.C. § 315(e)(2).

33 See, e.g., Ultratec Inc. v. Sorenson Commc’ns, Inc., Case 3:13-cv-00346-bbc, Document 876, at 2 (W.D. Wisc. May 13, 2015) (granting post-judgment stay request), aff’d, Ultratec Inc. v. CaptionCall, LLC, 611 Fed. Appx. 720, 722 (Fed. Cir. 2015).

34 2015 BL 407149 (S.D. Ind., Dec. 11, 2015).

35 2016 BL 4735 (D.N.J. Jan. 8, 2016).

Commented [A59]: We suggest this BP be clarified to state that these factors can be considered in deciding whether to extend the 30-month stay of regulatory approval “in connection with a request to stay the litigation pending IPR or PGR.” As Eli Lilly and Alcon point out, the only statutory basis for extending (or shortening) the 30-month stay is a party’s failure to reasonably cooperate in expediting the action. The factors listed here are factors that relate to the appropriateness of granting a stay *of the litigation*, and can only weigh on the regulatory stay when a party has asked to stay the litigiation (as in Novartis and Abbott Labs).

Commented [A60]: Resp: This was the subject of extensive discussion in the January 14 call, because these same considertions are applied when the request to extend the stay is not IPR/PGR related. New Section V.E. will address this in part, and the distinction will be clarified by a cross-referencing footnote.



In Eli Lilly, the defendants sought a litigation stay after filing IPR petitions challenging all asserted claims of two of the three patents asserted in the litigation.36 The court denied the initial stay request, and the defendants renewed their request after the IPRs were instituted. Eli Lilly opposed both stay requests, and argued that if a litigation stay was granted, the court should toll the 30-month regulatory stay until the PTAB issued its final written decision.37

After considering the stay factors, the court granted the post-institution litigation stay and declined to extend or toll the regulatory stay. In reaching its decision, the court acknowledged the tension between a litigation stay and the 30-month limit on the regulatory stay, but concluded that a stay was warranted because “Plaintiff will have ample opportunity to seek an injunction once the IPRs are finally concluded, which eliminates any alleged prejudice to Plaintiffs.”38

With regard to Eli Lilly’s request for an extension of the regulatory stay, the court held that there was “no law that justifies this request.” According to the court, “the only basis that courts have relied on to extend the regulatory stay is the violation of the statutory requirement of 21 U.S.C. § 355(j)(5)(B)(iii) that a party has failed to reasonably cooperate in expediting the litigation,” and the absence of any specific litigation delays prevented extension of the regulatory stay. 39

In Alcon, the district court raised sua sponte the question of whether the litigation should be stayed after the PTAB instituted Akorn’s IPR petition challenging all of Alcon’s asserted patent claims. Although both parties contended that “some degree of prejudice may befall them if a stay is ordered,” the court found that, on balance, the stay factors warranted staying the litigation until the PTAB issued final written decisions.

As in Eli Lilly, the Alcon court refused to extend or toll the regulatory stay, stating that it had no authority to do so: “A court has discretion to extend the 30-month regulatory stay, but only if a party has ‘failed to reasonably cooperate in expediting the action.’ Put simply, the Court is not prepared to hold—nor have Plaintiffs argued—that either party has failed to reasonably cooperate in expediting the action.”40 In this regard, the Alcon court noted that it had raised the stay sua sponte.41

Before the passage of the AIA and the implementation of IPR proceedings, there were only two decisions in which courts tolled the 30-month stay pending resolution of administrative proceedings

36 Thirty five defendants were involved in the litigation, accounting for thirteen ANDAs. The two patents for which

IPRs were instituted were asserted against all defendants; a third patent was asserted against one defendant group.

37 Id.

38 Id. It is interesting to note that the court initially gave credence to Plaintiff’s concerns about the running of the clock on the 30-month stay before IPR institution, but, in its later opinion, stated that the concerns were “not a recognized prejudice.”

39 Id.

40 Id. (internal citations omitted).

41 Id. The Alcon court also noted that its view of Section 355(j)(5)(B)(iii) was in accord with a prior District of New Jersey case. Id. In that prior case, the court rejected the defendant’s argument that the 30-month stay should be shortened or “not toll[ed]” as a condition of the litigation stay because the Plaintiff had prevented FDA approval of its generic by suing it over patent claims that had been twice rejected in reexamination proceedings and hence lacked merit. Cima Labs, Inc. v. Actavis Group HF, Case 2:06-cv-01970-DRD-MAS, Document 40, at 19-20 & n.5 (D. [Note: part of this cite was cut off. Action item: Fill]

Commented [A61]: If the group is okay with breaking this up into a Background section and an IPR specific section, everything after this could go into the Background section to make it clear to practitioners and courts that extending/shortening 30-month stays is a broader issue than just IPRs.

Commented [A62]: Question to co-leads and all – should we implement? If so – action item.



based on both their inherent powers and a broad interpretation of 21 U.S.C. § 355(j)(5)(B)(iii)—

Novartis Corp. v. Dr. Reddy’s Labs. and Abbott Labs. vs. Matrix Labs.42 43 In Novartis, Dr. Reddy’s requested a stay of the ANDA litigation pending the FDA’s safety and efficacy review of its proposed generic product. In analyzing Dr. Reddy’s stay request, the court applied the same three factor test later used by the Eli Lilly and Alcon courts to determine whether a stay pending an IPR was appropriate, i.e., whether (1) a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) a stay will simplify the issues in question and trial of the case; and (3) discovery is complete and whether a trial date has been set.44 Under factor (1), the Novartis court found that Novartis would not be unduly prejudiced by the litigation stay if it was granted a commensurate extension of the 30-month regulatory stay.45 The Novartis court thus considered—and ultimately granted—an extension of the 30-month stay as part of the three-factor test attendant to its inherent power to control the cases on its docket. In addition, the Novartis court found that it “further” had the discretion to extend the regulatory stay under Section 355(j)(5)(B)(iii), because Dr. Reddy’s could not “feasibly argue” that it was “reasonably cooperating in expediting the action” while asking to stay the same.46

In Abbott Labs. v. Matrix Labs., Inc., the generic manufacturer, Matrix, requested a five-year stay of litigation because it was unable to commercialize its generic therapy until additional Abbott Orange Book listed patents not involved in the litigation—which Matrix could not argue were invalid or non-infringed—expired. Matrix requested a tolling of the regulatory stay along with its requested litigation stay.47 In granting the stay, the court explained that the 30-month period must be tolled to prevent prejudice to Abbott.48 Like Novartis, the Abbott court based its decision to extend the regulatory stay on “the combination of its inherent authority to exercise control over cases pending on its docket and the statutory authority to adjust the thirty-month period [under Section 355(j)(5)(B)(iii)].”49

Based on these cases, the following factors are among those that may be considered in seeking to extend the Hatch-Waxman 30-month stay of litigation pending the outcome of IPR/PGR proceedings:

1. Undue prejudice or clear tactical disadvantage to the non-movant. Explaining with specificity all of the issues that will need to be presented to resolve the issues may persuade the court that the Plaintiff could be prejudiced or tactically disadvantaged by a litigation stay in the absence of tolled regulatory stay. For example, there may be asserted

42 Novartis Corp. v. Dr. Reddy’s Labs., Ltd..N.J. June 7, 2007) (unpublished) Case 1:04-cv-0757-SAS, Document 21

(S.D.N.Y. Oct. 21, 2004).

43 Abbott Labs. vs. Matrix Labs , Case 09-cv-1586, Document 49 (N.D. Ill. Nov. 5, 2009).

44 See id.

45 Id.

46 Id.

47 Id. at 1.

48 Id. at 4 (“Abbott could suffer prejudice if any motion for stay were not accompanied by an order tolling the 30-month limitations period.” (emphasis in original)).

49 Id. at 4-5.

Commented [A63]: XX suggests that the larger group consider providing more emphasis on the importance of the court deciding the case within the original 30 month time period.



claims as to which IPRs have not been instituted, or defendants may have asserted defenses that will not be addressed in the IPR(s)—invalidity based on product prior art, enablement, written description, indefiniteness, obviousness-type double patenting, and/or non-infringement. Under these circumstances, the TRO and/or preliminary injunction proceedings will closely resemble the very proceedings the 30-month stay was designed to avoid, i.e., the collection and presentation of complicated scientific and market evidence and arguments in a very compressed timeframe. To show that an extension of the regulatory stay is being sought to maintain the status quo rather than to gain a tactical advantage, the party requesting the stay should request the submission of a status report to the court upon issuance of the final written decision in the IPR(s), so the court can lift any regulatory stay the circumstances may then warrant.

2. Impact on discovery deadlines. Completion of significant work already done to pursue the case may militate against staying the litigation. In declining to extend the 30-month stay due to alleged discovery abuses, the court in Bayer Schera Pharma AG v. Sandoz, Inc. noted that the patent-holder had never even asked for a Rule 26(f) conference with the ANDA filer.50 More importantly, the court stated that while it had granted early jurisdictional discovery, the parties never made efforts to take merits discovery concurrently.51

3. Improper litigation delays. Courts sometimes cite a party’s failure to meet discovery deadlines in decisions finding a failure to reasonably cooperate under Section 355(j)(5)(B)(iii).52 It is thus useful to point out any delays or discovery issues coming from the other side. For example, where a party has failed to facilitate relevant discovery, particularly where discovery is located outside of the United States (hence necessitating the party’s cooperation), it may be possible to argue that the opposing party has not been reasonably cooperative. Notably, some courts have emphasized that parties requesting a

regulatory stay extension must have clean hands.53 In addition, parties should provide an estimate of the time and expenses associated with any discovery delays. In Shire LLC v. Watson Pharm., Inc., the court denied the request to extend the regulatory stay, but noted that if it had been inclined to grant the extension, it would have opted for a “specified amount of time proportionate to the length of the delay caused by a party.”54 Parties, however, should be careful to reserve this factor for significant and truly prejudicial delays, and not bringing litany of discover complaints.

In reaching its conclusion, one issue that seemed to concern the court in Eli Lilly was that Eli Lilly had argued in a different Hatch-Waxman case that a litigation stay pending resolution of an IPR was not prejudicial but rather beneficial to a patent owner.55 Thus, parties requesting or opposing a stay

50 Case 1:08-cv-03710-PGG, Document 160, at 14-15 (S.D.N.Y. Sept. 2, 2010).

51 See id.

52 See, e.g., id.

53 Id. at 8-15.

54 Case 1:11-cv-2340-JPO, Document 104, at 4 (S.D.N.Y. Sept. 25, 2012).

55 See 2015 BL 407149; Eli Lilly & Co. v. Accord Healthcare, Inc., Case 1:14-cv-00389 SEB-TAB, Document 357, at 2-4 (S.D. Ind. Oct. 26, 2015) (Defendants’ Reply Brief in Support of Defendants’ Motion for Stay of Litigation).



should ensure that they maintain a consistent litigation position regarding litigation stays (and commensurate regulatory stays), or be prepared to clearly explain why the circumstances of a given case are distinguishable from those of a case in which a different position was taken.

ADDITIONAL CONSIDERATIONS IN MULTIPLE DEFENDANT ANDA CASES

While some ANDA patent litigations involve a single generic challenger and a brand company patentee, many if not most ANDA litigations involve multiple generic challengers. One common scenario occurs when multiple generics file ANDAs in close proximity in time. In this scenario, the notice periods are close in time and the district court litigations are filed close enough in time, often in the same court. These cases are typically coordinated and are often tried together. An example of this scenario occurs when multiple ANDA filers submit their ANDAs on the so-called NCE-1 date (one year before the expiration of New Chemical Entity (NCE) exclusivity, which is the first date an ANDA may be accepted for filing. In such case, the litigations against each of the ANDA filers will proceed in coordinated proceedings. It is also common that after initial litigation begins against the “first wave” of ANDA filers, additional ANDAs are submitted and later cases are filed. When the delay to the filing of later ANDAs gets to be long enough that it is not feasible for a later filed case to “catch-up,” there can be one or more generics grouped in a “second wave” of litigation, or even a “third wave.”

This section explores the issues that arise in the interplay between IPR proceedings and district court litigation involving multiple ANDA filers, and proposes and then proposes six “Best Practices” that may be applicable in various scenarios. In particular, we consider scenarios where fewer than all of the ANDA filers in coordinated district court litigation are participating in IPR proceedings. In addition, a strategy has emerged wherein late-filing generics will choose to file IPR petitions in cases where the result of “first wave” litigation was in the patentee’s favor. Any such later IPR challenges should take care to demonstrate that the invalidity challenge does not present substantially the same prior art or arguments that were previously presented in the litigation.



Best Practice 6 – The court in considering a motion to stay an ANDA litigation in view of a pending IPR should consider the efficient, orderly management of the district court litigation, including the impact of a stay on consolidated or coordinated patent litigation proceedings involving ANDA filers not parties to the IPR proceedings as well as those who have filed for IPR.

This Best Practice serves as a reminder that in these multiparty litigations, the individual interests of different ANDA filers are not always aligned, and that the most efficient, orderly and just management of the litigation may depend upon the court’s ability to understand and balance the differing interests of the parties appearing before it.

Best Practice 7 – In consolidated or coordinated district court ANDA litigation, where one or more ANDA filers have filed an IPR petition on a patent-in-suit, a court may wish to inquire of the remaining ANDA filers whether they intend to join the IPR proceeding.

By learning of the intentions of the other ANDA filers with respect to ongoing or future IPRs, all parties and the court will be in a position to best plan for the prompt and orderly resolution of the affected litigations.

Best Practice 8 – In a multi-party ANDA litigation, a court may consider whether as a condition of any stay, all alleged infringers are willing to agree to be finally bound by the final decision of the PTAB in the IPR proceeding and to waive all other 102 & 103 (prior art based) validity challenges.

This approach should allow the parties and the court to better manage the case, while preserving non-infringement defenses as to each defendant, which may be litigated following lifting of a stay, if any. (Some or all non-infringement issues may be mooted if asserted claims found invalid.

In cases where ANDA filers will be pursuing validity defenses under 35 USC 101 & 112 (e.g., enablement, written description, indefiniteness), the court should consider what impact those defenses should have on the timely resolution of the action.

Best Practice 9 – When deciding whether to stay district court litigation, the court may balance considerations of judicial economy and orderly resolution of multiple cases with considerations related to first-to-file (FTF) exclusivity.

In general, the parties should strive to coordinate the cases so as not to require the court to conduct separate Markman hearings or trials unless absolutely necessary. While joint proceedings do require special care to avoid one generic’s sharing its confidential information with another, these issues are most often able to be worked out. While true consolidation almost never occurs in these cases, they may nonetheless be closely coordinated in a manner that synchronizes schedules and often allows certain joint depositions, as well as common Markman hearings and trials.

Commented [A64]: How does litigating additional issues after the PTAB decision follow from BP11 8? If that’s the intention of BP XX 14, we would be recommending a practices that puts parties and the courts in a bind as to whether they could finish the case before the 30 months expire.

Commented [A65]: The FTF exclusivity was part of the balancing of competiting interest by HW. Won’t this be taken as an upsetting of that balance by the courts?

Commented [A66]: Resp:Isn’t this adequately addressed below?



FTF exclusivity may be forfeited if a FTF generic does not launch its ANDA product within a

certain period of time following various “forfeiture events.” 56 In practice, the most relevant forfeiture events are: (i) failure to market within 75 days after the date any ANDA filer with tentative approval obtains a favorable court decision (including appeal) with respect to the patent(s) that

entitled the first-filer to exclusivity,57 and (ii) failure to obtain tentative approval within 30 months after the date on which the ANDA was filed, unless the failure is caused by a change in or a review

of the requirements for FDA approval after the date on which the ANDA was filed.58 These forfeiture provisions were intended to prevent a first-filed ANDA from blocking generic competition, including in circumstances where the FTF ANDA is delayed in obtaining FDA approval. That is, there is a public interest in the earliest possible generic competition that is consistent with the protection of the brand company’s patent rights. A FTF generic may be motivated to slow down litigation in order to avoid forfeiture if it perceives a risk of not obtaining final FDA approval in time to launch within 75 days following a favorable appellate court decision, or if it perceives a risk that another ANDA applicant will win a judgment of noninfringement that does not apply to the FTF’s ANDA product. A brand company may also be incented to preserve a

56 The original 180-day exclusivity provision was modified in 2003 by the Medicare Prescription Drug Improvement and Modernization Act (“MMA”). The MMA’s exclusivity changes only apply to first-filed ANDA applications submitted after December 8, 2003.

There were two ways to trigger the 180-day exclusivity period pre-MMA. First, the first-filer could trigger its 180 days by commercially marketing its approved product. Second, another ANDA applicant could try to trigger the first filer’s exclusivity by obtaining a judgment of invalidity and/or non-infringement on all the patents included in the first filer’s Paragraph IV certification. This immediately triggered the 180 day period even if the first filer was not ready to take advantage of its exclusivity.

The MMA changes retained the existing commercial marketing trigger (see 21 U.S.C. §355(j)(5)(B)(iv)(I)), but revised the court-judgment trigger and identified a series of forfeiture events that, if applicable, would cause the first-filer to lose its exclusivity. These forfeiture events are: (I) failure to market by the later of (aa) 75 days after approval or 30 months after the ANDA application was submitted to the FDA, whichever is earlier; and (bb) within 75 days of the date as of which, as to each patent for which the FTF applicant filed and maintained a Paragraph IV challenge: (AA) any applicant obtains a final, non-appealable decision that the patent is invalid or not infringed; (BB) there is a settlement or consent decree with a later applicant that the patents in the Paragraph IV certification are invalid and/or not infringed; or (CC) all of the patents in the Paragraph IV certification are delisted from the Orange Book; (II) withdrawal of the first-filed ANDA by the applicant; (III) amendment or withdrawal of all Paragraph IV certifications; (IV) the first filer’s failure to get tentative FDA approval within 30 months from the date the FDA accepted the application; (V) a final non-appealable decision that the first-filed ANDA applicant entered into an anti-competitive agreement with the NDA holder, patent owner or another ANDA applicant for the specific drug; or (VI) all the patents in the Paragraph IV certification have expired.

57 See 21 U.S.C. § 355(j)(5)(D)(i)(I).

58 See 21 U.S.C. § 355(j)(5)(D)(i)(IV).



first-filer’s exclusivity, to avoid the risk of early generic approvals. Non-FTF generics may devise their litigation strategies in order to trigger a forfeiture by the FTF generic.

Where FTF ANDA holder has filed an IPR, alone or with less than all generic filers, a FTF generic may seek a litigation stay to reduce risk of forfeiting exclusivity. Considerations of judicial efficiency and fairness to all litigants will usually weigh against a stay. That is, a patentee may agree to a stay of district court litigation with the FTF generic (and potentially others). However, if non-FTF generics who are not involved in the IPR do not agree to a stay, a stay of those cases may not be appropriate. In such case, considerations of judicial efficiency would weigh in favor of proceeding with all pending ANDA litigations simultaneously.

Where one or more non-FTF ANDA holders have filed for IPR and parties to the IPR seek a stay of district court litigation, a stay may be appropriate of in those ANDA litigations, but not the cases of other ANDA filers. A patentee and FTF generic should have the ability to proceed with district court litigation with a goal to obtain a district court decision by the end of the 30-month-stay. However, a stay of non-FTF ANDA cases would not be efficient unless those non-FTF generics agreed not to re-litigate issues being litigated in the cases that proceed. That is, considerations of judicial efficiency, and fairness to the patentee, suggest that a non-FTF generic seeking a stay of litigation should agree to be bound by validity decisions in the IPR and other ANDA litigations (for example, decisions on other bases of invalidity, to which IPR estoppel would not apply). Otherwise,

a stay of district court litigation would not be appropriate.59

ANDA litigation against a non-FTF generic who files an ANDA with P-IV certification too late to be part of a “first wave” litigation may well be stayed, whether or not an IPR petition is filed. If a “first wave” litigation is close to trial, or even after district court decision, the parties and the court will often agree to stay the later-filed case until an outcome is determined in the first wave. For example, IPRs have been filed when the first round of ANDA filers have fully litigated and lost the patent challenge in district court and/or on appeal. In such cases, it is rarely a good use of the parties’ or the court’s resources to proceed with parallel district court litigation.

Such non-FTF generics should not be given advantage over FTF generics through the filing of a second or subsequent IPR whose intent is to disrupt the orderly resolution of the “first wave” issues. A best practice would be for the PTAB to carefully consider whether the later-filed IPR presents new arguments that were not raised by unrelated parties to an ongoing district court litigation, or whether the arguments in the subsequent IPR are redundant to the ongoing litigation and more efficiently resolved in that forum.Accordingly, the best practice would be for the PTAB to decline to institute the later filed IPR, leaving it to the court to finally and efficiently resolve the later-raised issues.

59 If a non-FTF generic files an IPR petition after substantial litigation has progressed against a FTF generic (with or

without other ANDA filers in the “first wave”), a stay of the district court litigation against that later ANDA filer will often be the most efficient process.

Commented [A67]: How does this avoid forfeiting exclusivity?

Commented [A68]: Do we want to try to outline all scenarios? Or woud it be sufficient to outline the factors that courts consider?

Commented [A69]: J. Ko 2/14 question to all - should this be elevated to BP13?



Best Practice 10 – When determining whether or not to institute an IPR or PGR petition, the USPTO/PTAB should take into account whether substantial progress in parallel ANDA litigation involving the same patent has been made and the amount of time that has passed after the first filing of any ANDA litigation pertaining to the challenged patent (regardless of the identity of the petitioner).

The 30 month regulatory stay period provided by the HW Act provides an efficient window to conduct and complete district court litigation. Institution of an IPR or PGR petition will be decided no later than six months from filing and, if granted, the merits decision will following within one year to eighteen months. Therefore, if an IPR petition is filed while ANDA litigation on the same patent(s) is proceeding to resolution within 30 months, a parallel validity determination at the USPTO will occur within eighteen months to two years. On the other hand, any IPR petition filed 12 months or more after the initiation of ANDA litigation will extend the USPTO decision beyond the 30 month stay period (without taking into account the period of any subsequent appeal).

Best Practice 11 – Where there are multiple ANDA litigants, and some but not all litigants file parallel IPR/PGR petitions, the Director should consider providing an opportunity for all interested parties to participate in a single consolidated proceeding, and decline to institute any petition filed after that date.

The grant of the 180 day period of co-exclusivity to the first filed generic provides a significant incentive to successfully challenge patents listed in the Orange Book. Yet this incentive can be destroyed if another challenge (ie a second filing generic) initiates a parallel IPR challenge while litigation is pending, particularly if a number of separate petitions are filed by different challengers. Where fewer than all ANDA filers file such petitions, the remaining ANDA filers should weigh whether and when to join the original proceeding. On the one hand, where new parties join the original proceeding, the PTAB generally has had the first filer continue to take the lead. On the other hand, where the remaining ANDA filers have delayed their petitions so that joinder isn’t feasible, the PTAB has begun scrutinizing whether there was good reason for that delay and/or whether it has given the later filer an unfair advantage.

Commented [A70]: See comment above. Especially when the Petitioner is not party to the original litigation, PTAB should consider the arguments put forth in the petition, and whether they are in fact redundant/duplicative of the ANDA litigation.

Commented [A71]: Resp: This point will presumably be handled through the resolution of the above referenced comments.

Commented [A72]: Same comment as above. How would this square with when collatoral estoppel applies?



SPECIAL CONSIDERATIONS RELATING TO BPCIA CASES

Some special considerations relate to BPCIA patent challenges. As discussed in Section II.B, there is no counterpart in the BPCIA to the 30-month regulatory stay of Hatch-Waxman. Because biosimilar applicants may file their applications as soon as eight years before marketing approval, in some instances it may be possible to time and complete their challenges so that an at risk launch will not be an issue. In other situations, such challenges will not have been completed and the biosimilar applicants will therefore be faced with launch-at-risk decisions while the BPCIA litigation is still in progress. To mitigate this risk, some biosimilar applicants may opt to challenge patents in IPR or PGR proceedings in advance of district court litigations.

Prospective BLA filers should carefully weigh the pros and cons of filing an IPR or PGR before their ABLA. As mentioned above, the USPTO has taken the position that if such proceedings reach a final decision, the biosimilar petitioner will henceforth be estopped from advancing any position it raised or reasonably could have raised in the IPR or PGR. In addition, if the biosimilar petitioner has not yet filed its ABLA, it may find that it lacks standing to appeal an adverse final decision in the IPR or PGR to the Federal Circuit. On the other hand, the USPTO has recently indicated that it will begin considering whether a later filed IPR or PGR is raising cumulative or redundant issues relative to earlier IPRs and/or PGRs, and may deny institution on that basis. This means that a biosimilar maker may find that an IPR or PGR may not be available to them if the issues have already been definitively addressed by PTAB, but rather must be pursued in district court.

Finally, because the BPCIA does not have a counterpart to the same-day-filers-all-treated- as-first-

filers provision of Hatch-Waxman,60 the chances of aBLA applications being filed on the same day or around the same time are slim. Current aBLA filings have been staggered in time meaning IPR/PGR challenges are staggered as well.

60 The 2003 MMA allowed for shared first filer exclusivity. For NCE-1 filing opportunities (RLD with New Chemical

Entity exclusivity which allow ANDA filers to file 1 year prior to the expiry of the exclusivity), applicants pursuing first filer status will all file their application on the same day and will be sued around the same time.

Commented [A73]: I’ve endeavored to edit this section based on XXX’s suggestions. See what you think.



Injunctive Relief in Biopharma Cases

ANDA LITIGATION

1. “At Risk” Launch and Preliminary Injunctive Relief

Ordinarily, “at risk” launch and preliminary injunctions are not an issue in ANDA cases because the

Hatch-Waxman Act provides for a 30-month stay of regulatory review pending resolution of the

underlying patent dispute. However, in cases where the 30 month stay does not apply or has expired,

a generic company may decide to launch “at risk” by commercially marketing its product after

obtaining FDA approval and before all outstanding patent issues with the branded company have

been resolved.61 Since any such launch would be before all patent issues were resolved, the generic

company would be at risk of being found liable for patent infringement if the patents are ultimately

found to be valid and infringed. The generic company would also face potentially having to

withdraw its product from the market, as well as a lost profits and willful infringement claim from

the branded company.

Historically, the risk of pulling product off the market and/or the potential for significant lost

profits damages was often enough to convince a generic company to wait until all patent issues had

been resolved before launch. However, generic companies have more recently shown a greater

willingness to launch at risk, particularly where district court decisions (e.g., summary judgment)

made it more likely that the generic company would prevail at trial or where the generic company

received a favorable final judgment from a district court.

An “at risk” generic entrant must carefully weigh the risk/reward probabilities in deciding whether

to launch a generic product before a final decision on the merits of all asserted patents has been

rendered. Even if the 30-month stay has expired, a district court may look dimly on a launch that

jumps the gun on the district court’s impending decision. In the event of an adverse district court

judgment, the generic will at the least face damages claims that may include lost profits and price

erosion components which together may total more than the gross sales of the generic product. In

addition, an injunction is likely, as the public interest favors the enforcement of valid patents and

there are usually no other public interest considerations that favor having a second brand of the

same drug on the market. While generics facing an injunction will often argue the public will benefit

from having a lower cost alternative to the branded product, those arguments are normally easily

dismissed because the patent right itself is intended to allow for premium pricing as a reward to the

inventor and as an incentive for further innovation.

61 This situation can occur when: (1) the branded company fails to file suit within 45 days of receiving the Paragraph IV

notice letter; (2) the litigation extends beyond the 30 month stay; and/or (3) where there is a judicial determination that the patents identified in the Paragraph IV Certification are invalid, unenforceable or not infringed. In those instances, the FDA can immediately approve the ANDA, thereby allowing the generic company to market its product.

Commented [A74]: J. Ko 7/18/18 note: several subsections need to be drafted in the first instance:

•Sect. VI.B. (Injunctive Relief - BCPIA Litigation) [in particular p. 34 placeholders]

•Sect VI.C.2. (Injunctive Relief – Branded Biologic Patent Litigation - Interplay Between IPRs/PGRs and the Availability of Preliminary Injunctive Relief) [p. 36].

Action item: Need to identify primary drafters.



An “at risk” launch will disrupt the status quo and will convert the ongoing legal action from one seeking only equitable relief to one that also seeks monetary damages. The presence of a damages issue may entitle the patent owner to a jury trial and creates case management issues for the district court. If the district court has not yet ruled on the merits, and advance notice is not provided to the patent owner and the court, a motion for a temporary restraining order may be expected together with a request for an order extending the 30 month period. If the district court has ruled on the merits and the patent owner has appealed, a motion for an injunction pending the resolution of the appeal may still be forthcoming. Of course, the generic applicant is under no legal obligation to provide such advance notice.

2. Interplay Between IPRs/PGRs and the Availability of Preliminary Injunctive Relief

With respect to the likelihood of success factor, the CAFC has indicated that a “preliminary injunction should not issue if the accused infringer raises a substantial question concerning either

infringement or validity.”62 This is a lower standard than the clear and convincing evidence burden at trial, and is a key factor in resolving whether a preliminary injunction to stop an at risk launch is appropriate. A co-pending IPR or PGR challenge, particularly where instituted, can serve as persuasive evidence that there exists a substantial question concerning the validity of an asserted patent, as discussed below.

[To Come]

• When an IPR has been filed by the defendant or a third party but has not been instituted

• When an IPR proceeding filed by the defendant of a third party has been instituted but not decided

• When an IPR proceeding has been decided in favor of the defendant petitioner or a third party

• When an IPR proceeding has been decided in favor of the patent owner

• When an IPR decision adverse to a patent owner is being appealed to the Federal Circuit.

3. Permanent Injunctive Relief

The remedies in a Hatch-Waxman action are set forth in 35 U.S.C. § 271(e) (4)(A)-(C). 35 U.S.C. § 271(e)(4)(A) provides for relief in addition to the more traditional equitable injunction. Specifically, the Court “shall” order the effective date of any approval of the drug product involved in the infringement to be a date which “is not earlier than the date of the expiration of the patent which has been infringed”. Thus, courts have authority to direct the FDA to withhold or withdraw ANDA approval after a finding of infringement. Most courts apply the mandatory “shall” language as requiring issuance of an order directing the FDA to withhold or withdraw ANDA approval once

62 See, e.g., Metalcraft of Mayville, Inc. v. Toro Co., 2017 U.S. App. Lexis 2719 *2 (Fed. Cir. February 16, 2017).



infringement is established, which amounts to a de facto injunction where the traditional equitable principles underlying an injunction do not apply. 35 U.S.C. § 271(e)(4)(B) generally provides for equitable injunctive relief. This section uses permissive language that brings in the traditional factors used to evaluate whether the equitable remedy is applicable: (1) irreparable injury (with no presumption of irreparable harm); (2) inadequacy of money damages; (3) a favorable balance of the hardships, and (4) a lack of harm to the public interest by a grant of the permanent injunction (cite Ebay). Thus, a successful branded company seeking an injunction under this section still needs to satisfy all four of these requirements and courts have denied injunctive relief where the patentee failed to make the required showing.

The remedies in a Hatch-Waxman action are set forth in 35 U.S.C. § 271(e)(4)(A)-(C). 35 U.S.C. § 271(e)(4)(A) provides for relief in addition to the more traditional equitable injunction. Specifically, the Court “shall” order the effective date of any approval of the drug product involved in the infringement to be a date which “is not earlier than the date of the expiration of the patent which has been infringed.” Thus, courts have authority to direct the FDA to withhold or withdraw ANDA approval after a finding of infringement. Most courts apply the mandatory “shall” language as requiring issuance of an order directing the FDA to withhold or withdraw ANDA approval once infringement is established, which amounts to a de facto injunction where the traditional equitable principles underlying an injunction do not apply.

35 U.S.C. § 271(e)(4)(B) generally provides for equitable injunctive relief. This section uses permissive language that brings in the traditional factors used to evaluate whether the equitable remedy is applicable: (1) irreparable injury (with no presumption of irreparable harm); (2) inadequacy of money damages; (3) a favorable balance of the hardships, and (4) a lack of harm to the public interest by a grant of the permanent injunction (cite eBay). Thus, a successful branded company seeking an injunction under this section still needs to satisfy all four of these requirements and courts have denied injunctive relief where the patentee failed to make the required showing.

Despite these two different remedies, the mandatory language regarding directing the FDA to withhold or withdraw the ANDA effectively obtains the same result, stopping the generic launch, but without having to establish the equitable requirements for a permanent injunction. As a result, successful branded companies often opt for the former alternative.

BPCIA LITIGATION

Unlike for ANDA cases, because there is no automatic stay of regulatory approval under the BPCIA, it may be common that litigation is still ongoing when a biosimilar application is approved. This raises the potential for a biosimilar manufacturer to launch “at risk” of later being found to have infringed a valid patent. Under these circumstances, the company marketing the biosimilar will be at risk of paying monetary damages for the infringement plus potential willfulness enhancements. Due to the biosimilar nature of the infringing product, it is possible that substantial lost profits and price erosion components may also be involved. In addition, unique damages issues may arise in situations where the damage caused to the patent owner by early illegal entry into the market permanently harms the value of this aspect of their business going forward.

[Flesh out preliminary injunctive relief in BPCIA litigation…actually contemplated by statute…purpose of 180-days notice for commercial marketing of biosimilar, etc.]



i. For non-compliance with the BPCIA?

1. Amgen v Sandoz determined that compliance with BPCIA was optional at the election of the biosimilar. This case is currently pending review at SCT

ii. Pending judicial decision on the merits?

1. Statute provides for 180-day advance notice of commercial marketing to allow time for the filing and resolution of a PI

2. Currently, required, enforceable by injunction, and must occur after FDA approval of biosimilar application

3. Case pending review at the Supreme Court that may affect this law.

Many other issues remain to be finally decided by the courts. Once such issue is the effect of partial compliance with the requirements of the patent dance. CITE Pfizer. Most recently, the Supreme Court has agreed to hear the Amgen case, so additional guidance on several of these issues should be forthcoming.


a) Interplay Between IPRs/PGRs and the Availability of Preliminary Injunctive Relief


[Need to address permanent injunction where litigation resolved pre-approval vs. post-approval.] Section 271(e)(4)(D) does not address the availability of a permanent injunction in cases where the biosimilar approval precedes a final judgment on the patent issues, which means that the courts will likely resort to a conventional eBay analysis in deciding whether to issue one. Whether, and what form, an injunction takes may depend on the availability of information concerning the degree of similarity, and patient response, to the biosimilar. Biosimilars that have been approved as “interchangeable” with the reference product are likely at higher risk of being enjoined, not only because they are more likely to irreparably harm the reference product sponsor, but also because the interchangeability of these products negates any public interest in having both remain on the market.



BRANDED BIOLOGIC PATENT LITIGATION

Biologic patent litigation (between innvoators of separately-licensed biologic products) is different

from biosimilar litigation in a few important respects.63 First and foremost, there exists the potential for differentiated biological products. In other words, the alleged infringer may be seeking licensure of a product that is not necessarily a “me-too” or “copycat” product, unlike a biosimilar product.

While sometimes these differences may be subtle and contrived,64 in other cases, a completely different biological product may nonetheless infringe the claims of a competitor’s patent.

Another important difference is that where an alleged infringer holds a separate BLA (it is not entering the market with an aBLA), it may end up entering the market before the patentee or innovator with the dominant patent position. For example, recently, in Amgen Inc. v. Sanofi, Sanofi and Regeneron’s accused PCSK9 inhibitor (Praluent) was approved by FDA and launched commercially before Amgen’s own PCSK9 inhibitor product (Repatha). See, Amgen v. Sanofi, Case No. 14-1317-SLR (D. Del.).

These factual differences may drive important legal differences, particularly in the consideration of injunctive relief. For example, the existence of differentiated products makes the analysis of whether an injunction would disserve the public interest more complicated than where the innovator’s product and the accused product are identical or highly similar.

At the preliminary injunction phase, there may be a legitimate concern in allowing patients (and physicians) to become reliant to their detriment on a potentially infringing therapy where the effects of switching are not yet known. For example, recently, the N.D.Cal. court granted a preliminary injunction that removed a medical diagnostic test from the market noting that the public interest (among other factors) weighed in favor of a preliminary injunction because as clinical laboratories adopted the accused product, they may grow reliant on the potentially infringing technology. See Illumina, Inc. v. Qiagen, N.V., 207 F.Supp.3d 1081, 1094 (N.D.Cal. 2016). The concerns about detrimental reliance and patient harm should be even greater in the therapeutics context than in the diagnostic context (where it is laboratories and physicians

On the other hand, where an unmet medical need exists, such as where the patentee has not yet launched its own product, a district court may be very reluctant to keep a potential therapy off the market, even if it is later adjudged to infringe. However, an alleged infringer may present more nuanced arguments that it accused product provides an important alternative to some segment of patients that are not already served (or well-served) by an innovator’s product. These public interest arguments are often very difficult for a court to resolve, particularly in the context of a preliminary injunction.


In instances where a branded company decides to launch at risk the branded company could file for a preliminary injunction to try and block the launch. To be successful, the branded company must

63 Among those differences, of course, the statutory framework of the BPCIA for resolving patent disputes is entirely

inapplicable to biologic patent litigation.

64 For instance, differences in dosage form, routes of administration, or the demonstration through Phase IV clinical trials of not unexpected clinical endpoints.



establish (1) a likelihood of success on the merits; (2) irreparable harm in the absence of preliminary relief; (3) that the balance of the hardships tips in the branded company’s favor; and (4) that a preliminary injunction would not disserve the public interest.

Patentees in the biopharma space are usually head-to-head competitors who can readily show irreparable harm and can ususally also show balance of hardships. Therefore, in the context of preliminary injunctive relief, often the most meaningful factors are likelihood of success on the merits and to not disserve the public interest.

2. Interplay Between IPRs/PGRs and the Availabiltiy of Preliminary Injunctive Relief


As noted above, one significant concern in letting an accused infringer enter the market or continue in the market before litigating the underlying patent dispute is that patients (and providers) may be put at risk in the process. Moreover, where an accused infringer launches at risk, it may use its market entry to develop evidence of product diffentiation and unmet medical need (e.g. through different dosage points or clinical end-points, even for chemically similar products). However, in so doing, it may exploit patients and providers as leverage in a later permanent injunction decision, knowing that the risk that a medication is removed from the market puts a district court judge in an uncomfortable position, particularly in the case of differentiated product. In this area, it is critical that judges are mindful of the incentives that their case management and injunction decisions may create for both patentees and alleged infringers.

Once a practicing patentee has prevailed on the merits, absent exceptional circumstances, a court should ordinarily enter a permanent injunction. The public interest in encouraging innovation and fostering competition was considered by Congress and the balance of these competing interests is embodied in our current patent system, so absent some additional showing, a successful patentee should be entitled to an injunction. In other words, arguments regarding lower cost medicines and increased consumer choice (entry of competition) on the one hand and the cost of innovation on the other have already been taken into account in our patent system. In fact, if lower medical costs and increased physician or patient choice were sufficient to defeat an injunction, this would have the perverse policy effect of penalizing companies that work on our most important problems – healthcare – as compared to other industries. Instead, relevant, probative evidence that the public may be disserved by an injunction should be limited to evidence of meaningful product differentiation, unmet medical need, and limited available treatment options.

While courts ordinarily grant permanent injunctions where a patentee/competitor has prevailed on the merits, in a could few of cases, courts have entered permanent injunctions that were limited in scope to address an unmet medical need. [Insert examples.] Likewise, in some cases, patentees have only sought a royalty, albeit a significant royalty, on infringing sales in recognition of significant product differentiation and public demand. [Insert examples.]



Best Practice 12 – Parties and the court should discuss/consider discussing at case management conference the possibility of a launch at risk or the possibility of a preliminary injunction motion during the pendency of a case. Parties and the court should discuss/consider discussing at subsequent status conference whether plans have changed.

Best Practice 13 – The court and parties should discuss notice of any at-risk launch to permit the court time to resolve any injunction issue.

Best Practice 14 – The parties should communicate regarding the timing and proposed schedule for preliminary injunction proceedings, which communications should be treated as confidential information under a governing protective order.

Best Practice 15 – Ideally, a defendant will agree to notify patentee’s counsel, under the terms of a protective order, of its intent to launch at risk with sufficient notice to afford the parties the opportunity to discuss timing and the proposed schedule for any preliminary injunction proceedings. If a defendant is unwilling to agree to provide notice, the patentee may request that the court order a defendant to provide notice at least 30-60 days before any commercial launch so that the court and the parties may conduct preliminary injunction proceedings in advance of any such launch.

Best Practice 16 – Parties and the court should discuss and consider the scope of any injunction (whether in the preliminary or permanent injunction context) to ensure that it is appropriately tailored to the acts of infringement implicated by patent coverage.

Best Practice 17 – Parties and court should consider whether permanent injunction proceedings can/should be tried together with liability issues before the bench.

Best Practice 18 – In an ANDA proceeding, at the same time the parties and the court address at risk-launch, they should also address how to handle damages issues and the patentee’s right to a jury trial on the timing and case management of the proceeding.

Commented [A75]: This BP is still very much in discussion. Some folks want it only to apply to ANDA, which in my view, makes it pretty meaningless and unhelpful since it is really in biologic-biologic and to a lesser extent BPCIA casces where a court and a patentee have much less information about when an at-risk launch could happen..

the sedona conference… · anda filers have filed an ipr petition on a patent-in-suit, a court may...

Documents