Greenblum & Bernstein, P.L.C.


Recent News in Intellectual Property


October 2015

In This Issue:

·    PTAB rejects Celgene’s request to dismiss Bass patent challenge 

·    Ariosa and subject matter eligibility

·    First biosimilar launched in US

·    FDA proposes suffix to distinguish biosimilar from reference biologic

Contact Us:

Walter Schlapkohl, Ph.D., Esq.

703-716-1191 (phone)

703-716-1180 (fax)

Celgene’s Request for Sanctions Against Hedge Fund Manager Kyle Bass Dismissed

Over the past six months Kyle Bass, head of the Coalition for Affordable Drugs, has sought to invalidate over 30 pharmaceutical patents owned by such companies as Insys Pharma, NPS Pharmaceuticals, and Celgene.

Critics assert that Bass, who also heads Hayman Capital Management, is using such filings for his own financial gain. In particular, critics allege that he is betting against, or shorting, the shares of the very same pharmaceutical companies whose patents he is challenging.  His critics also assert that he is taking advantage of a new form of patent challenge proceeding in a way that was never intended.

Bass has filed each patent challenge in the form of an Inter Partes Review, a proceeding established in 2012 by the America Invents Act that makes it possible for practically any member of the public with the requisite resources to institute a patent challenge.

Bass asserts that by challenging spurious patents, the public benefits because barriers to generic drug entry to the markets are removed.

Over the summer Celgene won permission from the U.S. Patent and Trademark Office to file a motion seeking sanctions against Bass and dismissal of the patent challenges for abuse of process.  However, the Patent Trial and Appeal Board decided not to sanction the controversial hedge fund manager and to deny Celgene’s request that the challenges be dismissed.  In its decision, the Board noted that “an economic motive for challenging a patent claim does not itself raise abuse of process issues” and that short selling is “legal and regulated.”

In response to the ruling, the Biotech Industry Organization stated the “cursory and erroneous ruling reinforces the immediate need for Congress and the PTO leadership to take clear and decisive action to prevent any further misuse and abuse of the Inter Partes Review process by hedge funds, extortionists and other questionable entities seeking to undermine it for their own financial benefit.”

Ariosa Diagnostics v. Sequenom, Inc. and the Continuing Controversy over Patent Eligible Subject Matter

On June 12, 2015, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s ruling that certain claims of U.S. Patent No. 6,258,540 -- exclusively licensed by San Diego-based Sequenom, Inc. and based on the discovery that paternity-identifying DNA can be detected in serum or plasma from a pregnant female -- were directed to patent ineligible subject matter (Ariosa Diagnostics, Inc., v. Sequenom, Inc., 788 F.3d 1371, 115 U.S.P.Q.2d 1152 (Fed Cir. 2015)).  The decision was not welcome news to Sequenom, which on August 13, 2015, filed a petition for rehearing by the full court.  In the petition, Sequenom asserted among other things that the Federal Circuit’s decision “poses an existential threat to patent protection in multiple fields of invention.” Twelve amicus briefs filed by stakeholders in the biotech and pharmaceutical industries, including the Intellectual Property Owners Association, the Pharmaceutical Research and Manufacturers of America, as well as 23 law professors, were also filed in support of the petition on August 27, 2015.  Ariosa Diagnostics’ response is due October 19, 2015.

First Biosimilar Launched in US

On September 3, 2015, Sandoz, the generics division of Novartis, announced the launch of the first biosimilar in the US: Zarxio® (filgrastim-sndz).  The drug is used to help patients undergoing chemotherapy fight off infection.  Amgen, maker of the reference product Neupogen®, had sought in legal proceedings to block Sandoz from launching Zarxio®.  However, Amgen’s request was denied by the District Court for the Northern District of California. Amgen appealed the decision to the Federal Circuit Court of Appeals, but in a split decision by the Court, Amgen was able to delay -- but not prevent -- the launch. Biosimilars are expected to provide increased affordability and patient access to important medical therapies.

Suffix to Distinguish Generic Drugs from their Brand Name Counterparts

In August the Food and Drug Administration published proposed plans to distinguish brand-name biologics from their counterpart generic versions by attaching a suffix to the generic name.  Under the FDA proposal, brand-name biologics would also carry a suffix. 

Doctors often prescribe drugs by using a generic name, also known as a “nonproprietary name.”  For example, Eisai Inc.’s Aricept® and approved generic versions of drug having the same active ingredient go by the nonproprietary name donepezil.

However, biologics are made from living organisms and are therefore not necessarily exact copies of the active ingredient in the corresponding brand name product.  As a result, concerns have been raised with regard to unintended alternating or switching between the brand and generic versions of an approved biological drug.

The goal of the naming convention proposed by FDA is to help minimize inadvertent substitution. FDA also hopes that the naming convention will make tracking the safety of the biologics easier. 

FDA hasn’t yet decided whether a generic biologic deemed to be “interchangeable” with the brand name counterpart should have the same suffix or a distinguishing suffix. 

According to FDA, the suffix should be “unique” and “devoid of meaning” so that it is not “promotional.”  As an example of the naming convention, Sandoz’s Zarxio® (filgrastim-sndz) would become “filgrastim-bflm” (the “sndz” suffix would be modified so that it no longer implies the name of the manufacturer) and Amgen’s Neupogen® (filgrastim) would be designated “filgrastim-jcwp.”

FDA is seeking public comment on the proposal before it issues final guidance.