Courts have allowed biosimilar developers "safe harbor" against infringement suits, but there are limits, attorneys from Goodwin Proctor explain.
A 2019 biosimilar patent dispute resulting in a $70 million damage award for Amgen formed the crux of a recent panel discussion aimed at broadening understanding of when biosimilar developers may overstep and incur infringement liability.
Intellectual property law attorneys from Goodwin Procter of Boston discussed “safe harbor” laws that allow biosimilar developers some protection against patent infringement during the product development phase. The law tolerates, or allows, patent infringement if it is “reasonably related” to the development of evidence or information needed for a biologics license application to the FDA.
In the case of Amgen v Hospira, the courts upheld the $70 million jury verdict that Hospira had infringed 2 patents in the development of a biosimilar for Amgen’s epoetin alfa (Epogen) product, a recombinant human erythropoietin for the treatment of anemia. The courts found that the safe harbor provision protected just 7 of 21 batches of drug substance created for the testing and development of Hospira’s biosimilar version of the Amgen product.
Intention vs Actual Use
The law leaves open to interpretation just what the intention was in the use of patented material, and whether this use was strictly intended for the support of an application for biosimilar approval, the panelists said. The courts have acknowledged that transgressing patents may be necessary during the development stages even though, ultimately, the knowledge gathered and the uses to which the patented material was put were not directly related to the FDA approval application.
“A potential infringer does not lose protection for a particular activity just because many aspects of drug development have dual or multiple purposes,” said Josh Weinger, an associate in Goodwin’s Litigation Department.
The safe harbor provision “extends beyond activities that are purely necessary to seek approval for a drug,” Weinger said. For example, safe harbor allows biosimilar developers “to experiment without perfect clarity with respect to what the FDA is going to require to demonstrate [biosimilarity], so even if the biosimilar developer is not entirely sure what they’re going to need to do to meet FDA requirements, they have a good deal of flexibility.”
“I think the main distinction ends up being whether the [batch] testing is sort of the foundational testing as part of the application, or if it’s more of a routine testing of that particular batch,” Weinger. He defined routine testing as that which occurs after the FDA application package is complete, which “is a situation where there will be more risk of the safe harbor not applying.”
In Amgen v Hospira, the jury distinguished between the batches specifically for regulatory approval and those that were not necessary for that purpose. A lot of power rests with the jury in making that distinction, and on appeal the jury verdict was affirmed by the district court (Delaware) and the Court of Appeals for the Federal Circuit. “It’s not clear that if the jury had come up the other way, that decision wouldn’t also have been affirmed, so I think the jury has a fair amount of discretion to come out either way,” Weinger said.
Jury Trial or Bench Trial?
Panel moderator Elaine Blais, head of the Litigation Department in Goodwin’s Boston office, said that based on that outcome, parties to such a case should consider whether there are ways to steer the case to a jury trial or prevent that from happening, based on relative advantages. “There are always considerations whether you want a bench trial or a jury trial,” she said.
The attorneys also discussed US Code § 271(g), which governs the unauthorized import of a product produced outside of the United States using a process patented inside the United States, which is considered infringement. This section also provides protection against infringement for processes that involve use of patents but result in a material alteration such that the patented product becomes a “trivial or nonessential component of” the final product.
“In the chemical and biotechnology context, the general rule is that a significant change in structure and properties would be a material change. Of course, that’s still somewhat ambiguous,” said panelist Kevin DeJong, an associate with the Goodwin litigation group. “The inquiry is definitely a context dependent, factual determination. “
The courts may also consider whether it would be impossible to make the product without the patented process in question. “For example, a product that can only be made by the patented process may not be considered to be materially changed,” he said.
This section of the law was created in 1988, and prior to that time patent owners had “no real remedy against infringers who would import a product into the United States when it was made outside the United States using the patent method,” DeJong said. The implication for biosimilar developers is that they should be diligent about understanding any patents that might be involved in, for example, cell culture processes and purification.
Amgen Inc v Hospira Inc, 944 F3d 1327-1338 (Fed Cir 2019).