How Cuozzo v. Lee Could Impact The Biosimilar Market
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Inter Partes Review (IPR) has become a prominent fixture in pharma patent litigation, in part because of Kyle Bass’ very public stock-shorting crusade against drug patents. In an article recently published in Life Science Leader, I discuss the impact Bass’ challenges (or, rather, abuses of the IPR process) could have on drug development and the Intellectual Property (IP) landscape. The IPR process was launched as part of the America Invents Act (AIA) of 2011. The process was earmarked as a more efficient and cost-effective way to clear away bad patents. Now, though Bass’ use of this process stole headlines and greatly frustrated pharma players, he’s certainly not the only one drawn to the IPR process. Generics and biosimilar companies’ use of the IPR is shaping up to be quite the sore spot for innovators.
How Are Biosimilar Makers Using IPRs?
Pharma is no stranger to patent challenges, nor is it unusual for a generic competitor to focus on eliminating patents barring their product’s market entry. But in a recent interview, I learned a few things. Though Bass’ efforts got a lot of media and industry attention, generics and biosimilar makers’ IPRs are playing an even bigger role in the ballooning use of IPRs. And these challenges are also just as worrisome to pharma as Bass — if not more so.
Biosimilar and generics makers have begun turning away from established protocols for patent litigation as designated by Hatch-Waxman and biosimilar laws. Prior to the launch of the IPR process, small molecule generics companies used the Paragraph IV certification process under the Hatch-Waxman act. However, according to an article published in the New Jersey Law Journal IP Supplement, as of September 2014, more than 90 IPRs had been filed by generic companies. Over the past two years, this number has likely grown, especially as the U.S. market is now open to biosimilars. Think, for instance, of the recent news about Amgen’s big IPR loss to AbbVie a few months ago. Biosimilar companies are now choosing to file IPRs prior to filing for approval with the FDA. This move keeps reference product sponsors from suing for patent infringement because the generic/biosimilar maker is protected under a safe harbor period. Several high-profile industry organizations have begun arguing against the use of this procedure for generic medicines. The general argument is that using the IPR defeats the successful procedures (i.e., the Paragraph IV certification process) that have been in place for years. As a pharmaphorum article declares, the IPR process “disrupts the carefully balanced framework of compromises underlying the Hatch-Waxman Act.”
What’s New In The IPR Debate Today?
My interest in the use of IPR was peaked when a press release crossed my desk from the Generic Pharmaceutical Association (GPhA) and America’s Health Insurance Plans (AHIP). The release announced the organizations’ filing of an amicus brief in response to the Supreme Court case Cuozzo v. Lee. (Cuozzo Speed Technologies and Michelle K. Lee, under secretary of Commerce for Intellectual Property, and director of the Patent and Trademark Office [PTO].) These parties have gone head-to-head over the suitability of the Patent Trial and Appeal Board’s (PTAB’s) broadest reasonable interpretation standard (BRI) when determining patentability in IPRs. For a digestible — though opinionated — overview of the case, here’s an article from IPWatchdog.
In brief, the GPhA and AHIP are siding with the respondent, Lee. These parties believe that Congress intended for BRI to be used in IPR proceedings, especially because of the PTO’s history of using BRI in Interferences (proceedings that are similar to IPRs).
As is to be expected, the innovators have had their say on this same case. PhRMA also issued an amicus brief, arguing in support of the petitioner, Cuozzo. In its amicus brief, the organization argues the use of BRI in IPR proceedings is unsuitable because BRI can lead to duplicative litigation. Similarly, the use of BRI promotes conflicts between rulings of the district court and the PTAB. Indeed, the fact that a patent could be found valid in district court and invalid via an IPR challenge has proved perplexing and concerning for innovators in particular, my recent interview revealed.
However, the Supreme Court’s decision, should it alter the IPR process, could largely impact how IPRs are used to challenge pharma innovator patents. As the GPhA and AHIP state, the IPR process is a valuable component to opening up the market to generic competition. The organizations’ press release states, “As branded specialty drug costs continue to increase and outpace overall health care cost growth, any attempt to weaken a viable, administrative process that helps expedite patient access to more affordable medicines should be rejected.”
Though Cuozzo v. Lee is not directly related to pharmaceutical companies, this is clearly an issue of utmost importance to brand and generic/biosimilar companies alike. The Supreme Court’s decision will not dictate the ability of generics and biosimilar companies to use the IPR process to get their products to market quickly. But it will impact the way the IPR process is approached by these parties. As the GPhA argues firmly in its amicus brief, the IPR process was intended to provide a “relatively quick and inexpensive PTO procedure to eliminate improperly granted patents.” It was not intended to duplicate district court proceedings, which require clear and convincing evidence and “broad document and deposition discovery.” (aka a lot of time.)
The growth of the U.S. biosimilar market — as young as it still is — is already marred with legal battles. These challenges will only continue to escalate as the market grows. Not only does the BRI in IPRs encourage clear language in claims (which ensures a clearer and less flexible ruling), it can also halt patent owners from having claims interpreted more broadly in subsequent infringement litigation. Though the IPR process has not proven to be a success for biosimilar makers, it’s likely this case will be highly influential on future efforts and the speed at which biosimilars can enter the market.