Greenblum & Bernstein, P.L.C.


Recent News in Intellectual Property


January 2017

In This Issue:

·    Cert Denied in Apotex v. Amgen.

·    Jury Verdict of $2.54 Billion in Idenix Pharm. LLC v. Gilead Sciences Inc.

·    Are Subject Matter Eligibility Changes Looming in 2017?








Contact Us:

Walter Schlapkohl, Ph.D., Esq.

703-716-1191 (phone)

703-716-1180 (fax)

Supreme Court Denies Apotex’s Petition for Writ of Certiorari But May Still Consider Issues Raised in Amgen v. Sandoz

Apotex filed a petition for a writ of certiorari with the U.S. Supreme Court on September 9, 2016.  Apotex’s petition presented two questions for the Court to consider: (1) whether the Federal Circuit erred in holding that biosimilar applicants that make all disclosures necessary under the Biologics Price Competition and Innovation Act (BPCIA) for the resolution of patent disputes must also provide the reference product sponsor with a 180-day notice of commercial marketing; and (2) whether the Federal Circuit improperly extended by six months the statutory 12-year exclusivity period provided to reference product sponsors by holding that a biosimilar applicant cannot give effective notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A) for its biosimilar product until it receives an FDA license.  On December 12, 2016, the Supreme Court denied Apotex’s petition without comment.

Nevertheless, questions remain with regard to the Federal Circuit’s interpretation of the BPCIA’s 180-day notice of commercial marketing provision and the proper handling of the patent dispute resolutions under the BPCIA.  This is because the Supreme Court still has the option of addressing similar issues raised in Amgen v. Sandoz, 794 F.3d 1347 (Fed. Cir. 2015).

In that case the Federal Circuit held that (1) Sandoz did not violate the BPCIA by failing to disclose its abbreviated Biological License Application and manufacturing information to Amgen (the reference product sponsor), and (2) that a biosimilar applicant may only provide effective notice of commercial marketing of its biosimilar after the FDA has licensed its product.  The parties filed cross-petitions for writ of certiorari with the U.S. Supreme Court.

On June 20, 2016, the Supreme Court invited the Solicitor General to file a brief expressing the views of the United States in the Amgen v. Sandoz case.  The Solicitor General replied to the Court’s invitation on December 7, 2016, recommending that the Court should hear the case.

                                           --By Walter Schlapkohl

Gilead Sciences Ordered to Pay $2.54 Billion to Merck & Co.

On December 15, 2016, a federal jury concluded that Gilead Sciences Inc. must pay $2.54 billion to Merck & Co. for patent infringement, the  largest U.S. patent-infringement verdict ever (Idenix Pharm. LLC v. Gilead Sciences Inc., D. Del., No. 14-846, jury verdict 12/15/16).  Prior to this, the largest jury verdict in U.S. history was a $1.67 billion judgment Abbott Laboratories was to pay to Johnson & Johnson, which was later thrown out on appeal. 

Gilead has indicated that they will “vigorously challenge” the jury’s decision.

The record-breaking verdict is the latest development in a global patent dispute between Gilead and Idenix regarding hepatitis C treatments. 

In 2009, Merck’s subsidiary, Idenix Pharmaceuticals Inc., patented a potentially lifesaving compound used to treat hepatitis C.  Merck’s drug, called Zepatier, was approved in 2016.   Pharmasset Inc., a Gilead subsidiary, began producing and selling its own treatments for hepatitis C in 2013.  The infringing products, Sovaldi and Harvoni, account for more than half of Gilead’s revenue.

Merck alleged that Pharmasset’s founder “betrayed” the CEO of Idenix (allegedly his “best friend”) by sharing proprietary information about the patented compound with Pharmasset scientists, which Pharmasset then used to create its hepatitis C treatments.  Gilead asserted that Pharmasset did not take anything from Idenix and instead developed its own compound during the course of three years of research.

At trial, Merck’s lawyer described the case to jurors as “a story of betrayal” among former friends.  The story resonated with the jury, who instructed Gilead to pay Merck $2.54 billion, an amount based on a 10% royalty rate on total sales of Gilead’s hepatitis C treatments.  Moreover, the jury found the infringement to be willful, leaving open the possibility that the damage award may be increased up to three times the amount (up to $7.62 billion).

                                                --By Aaron Gerger

Are Subject Matter Eligibility Changes Looming in 2017?

On November 2, 2016, the USPTO issued a memo to the examining corps on subject matter eligibility.  Although the memo was issued in response to the McRO and BASCOM Federal Circuit decisions – both software cases – the memo also included instructions to examiners to avoid relying on non-precedential decisions such as the SmartGene case (SmartGene, Inc. v. Advanced Biological Labs., 555 Fed. Appx. 950 (Fed. Cir. 2014)) unless the facts of the application under examination “uniquely match” those in SmartGene.  In SmartGene, the independent claims at issue were directed to a method, a system, and a computer program, respectively, for guiding the selection of a treatment regimen for a patient with a known disease or medical condition.

The USPTO will likely revise its guidelines related to subject matter eligibility in the first quarter of 2017 in response to roundtable discussions with stakeholders held in 2016.  The life science industry is hopeful that the USPTO will change its guidelines to allow more subject matter in view of recent Federal Circuit eligibility wins in cases such as Rapid Litig. Mgmt. Ltd. v. CellzDirect Inc., BASCOM Glob. Internet Servs. Inc. v. AT&T Mobility LLC, McRO Inc. v. Bandai Namco Games Am. Inc., and Amdocs (Israel) Ltd. v. Openet Telecom Inc.  In Rapid Litig. Mgmt., the Federal Circuit found that even though the claims recited a natural law (that hepatocytes are capable of surviving multiple freeze-thaw cycles), the claims were nevertheless directed to a new, useful technique for liver cell preservation that produces a “tangible and useful result.” 

While patent legislation does not appear to be a priority with either the Trump administration or the Congress in 2017, the USPTO will likely have a new director by the end of the year, and both biotech and software industry stakeholders are hopeful that the incoming director will favor increased patent protection for software and biotech cases.

                                             --By Walter Schlapkohl