By Kevin E. Noonan --
The Supreme Court on Monday declined to grant certiorari in Momenta Pharmaceuticals v. Amphastar Pharmaceuticals, a case involving a split in authority that has arisen among Federal Circuit judges regarding the scope of the "safe harbor" provisions on 35 U.S.C. § 271(e)(1). Specifically, two panels of the Court, both consisting of Chief Judge Rader and Judge Moore, have come to different interpretations of the statute with regard to post-approval activities. In Classen Immunotherapies, Inc. v. Biogen IDEC, (where the Court earlier refused to grant certiorari in a case styled Glaxo Smith Kline v. Classen Immunotherapeutics), a majority of the merits panel (Chief Judge Rader joined by Judge Newman) held that post-approval activity did not fall within the safe harbor (over a vigorous dissent by Judge Moore). In contrast, in the Momenta case, the panel majority (Judge Moore joined by Judge Dyk) found that such activity does fall within the scope of the statute (over an equally vigorous dissent by Chief Judge Rader), giving the statutory language a broad reading compelled, according to Judge Moore, by the Supreme Court's decision in Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005).
To briefly recap, the Momenta decision arose in the context of a District Court grant of a preliminary injunction to Momenta in litigation between two ANDA filers. Momenta entered the marketplace after ANDA litigation with the patent holder, Aventis, over Lovenox (enoxaparin), a specific formulation of heparin. As explained in the opinion, heparin (unlike most drugs) is not "a single defined molecule" but rather a heterogeneous mixture of molecules that differ in "the length of the polysaccharide chain" and the "component disaccharide units and the corresponding distribution of disaccharide unit sequences in the polysaccharide chains." This affects its molecular weight distribution as well as the distribution of uronic acid moieties. Enoxaparin is the result of fragmentation of native heparin into a "diverse set" of oligosaccharides. Accordingly, FDA approval for ANDA filers required five "criteria" or "standards of identity" to be met, including "[e]quivalence in disaccharide building blocks, fragment mapping, and sequence of oligosaccharide species" identified by specific enzymatic treatment and physical/chemical analyses of the drug product, including separation and spectroscopy.
Although Amphastar filed its ANDA first, Momenta was first to market. Perhaps tellingly, the Federal Circuit described the genesis of this lawsuit as follows:
Being the only generic version of enoxaparin has it benefits: its sales generated revenues of $260 million per quarter. . . . The approval of Amphastar's version of enoxaparin, and the resultant ruinous competition of another generic version of the drug, threatened this unique market position. Understandably unwilling to give up a billion dollars in yearly revenue, Momenta initiated the present litigation two days after Amphastar received final FDA approval to market its generic enoxaparin.
The legal basis for the suit was infringement of U.S. Patent No. 7,575,866, assigned to Momenta, which claimed methods for analyzing heparin and specifically low molecular weight heparins such as enoxaparin. The opinion cited claims 6 and 15 as being "representative" of the '886 patent claims that Momenta asserted against Amphastar:
6. A method for analyzing an enoxaparin sample for the presence or amount of a non naturally occurring sugar associated with peak 9 of FIG. 1 that results from a method of making enoxaparin that included β-eliminative cleavage with a benzyl ester and depolymerization, comprising: providing an enoxaparin sample that has been exhaustively digested with two or more heparin degrading enzymes; using a separation method to determine, in the enoxaparin sample that has been contacted with two or more heparin degrading enzymes, the presence of a structural signature associated with the non naturally occurring sugar associated with peak 9 of FIG. 1 that results from a method of making enoxaparin that includes .beta.-eliminative cleavage with a benzyl ester and depolymerization; and making a determination about the enoxaparin sample based upon a comparison of the determination of the presence of a structural signature associated with the non naturally occurring sugar associated with peak 9 to a reference standard for enoxaparin, wherein the determination based upon the comparison to the reference standard regards the quality of the sample, to thereby analyze the enoxaparin sample.
15. A method for analyzing an enoxaparin sample for the presence or amount of a non naturally occurring sugar associated with peak 9 of FIG. 1 that results from a method of making enoxaparin that included β-eliminative cleavage with a benzyl ester and depolymerization, comprising: providing an enoxaparin sample that has been exhaustively digested with two or more heparin degrading enzymes; using a separation method to determine, in the enoxaparin sample that has been contacted with two or more heparin degrading enzymes, the presence of a structural signature associated with the non naturally occurring sugar associated with peak 9 of FIG. 1 that results from a method of making enoxaparin that includes .beta.-eliminative cleavage with a benzyl ester and depolymerization; and making a determination about the enoxaparin sample based upon a comparison of the determination of the presence of a structural signature associated with the non naturally occurring sugar associated with peak 9 to a reference standard for enoxaparin, wherein the level of one or more structural signatures associated with the non naturally occurring sugar associated with peak 9 of FIG. 1 is determined, to thereby analyze the enoxaparin sample.
The Federal Circuit characterized Momenta's complaint as alleging that Amphastar infringed the '886 patent by complying with FDA requirements for testing its enoxaparin product as part of the quality control necessary for making this drug. Judge Moore's opinion vacated the preliminary injunction and remanded using language that made it very unlikely that the District Court would be able to grant the injunction (see Patent Docs post). Chief Judge Rader's dissent directed his contrary analysis not only to the specific matter before the Court but also opined more broadly (see "Momenta Pharmaceuticals Inc. v. Amphastar Pharmaceuticals, Inc.: 'The Rest of the Story'").
Amphastar's defense in opposing the injunction was that its activities fell within the "safe harbor" of 35 U.S.C. § 271(e)(1):
It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.
The District Court rejected this contention because the infringing activity occurred after Amphastar received regulatory approval, the Court interpreting the statute to be limited to otherwise infringing acts that were performed in order to obtain approval (while acknowledging that the information was, ultimately, submitted to the FDA). According to Judge Moore's opinion, the District Court interpreted the meaning of the statute with reference to its legislative history. This was the source of the District Court's error, according to Judge Moore.
Rather than addressing Momenta's arguments that the answer to the question before the Court was mandated by the earlier Classen decision, the majority turned instead to its own independent interpretation of the statute. In the majority's view, the "plain meaning" of the statutory language was clear (and did not justify resort to the statute's legislative history; indeed, the panel majority deemed any such recourse to the legislative history to be improper, quoting United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240 (1989), for the proposition that the "inquiry must cease if the statutory language is unambiguous and 'the statutory scheme is coherent and consistent.'"). Selectively quoting from portions of the legislative history, the opinion noted that the statute was enacted to "balance the need to stimulate innovation against the goal of furthering the public interest." H.R. Rep. 98-857, pt. 2, at 2714 (Aug. 1, 1984). In citing the statute, the majority highlighted the clause reading that the safe harbor was "solely for uses reasonably related to the development and submission of information under a Federal law," which was enough to put an end of it: "Congress could not have been clearer in its choice of words," and thus "any activity" included acts taken after approval (provided that there was information submitted under a Federal law). Moreover, for the majority, it was significant that Congress did not limit (expressly) the scope of the safe harbor to the Food, Drug and Cosmetic Act but "broadly" included within the scope of the safe harbor "any federal law" that "regulates the manufacture, use, or sale of drugs." This interpretation is consistent with the majority's parsing of the rest of the statute, citing portions of the provision that do specifically reference the FDCA (referring to animal drug or veterinary biological product[s]" and by reciting in § 271(e)(2) the specific provisions of the FDCA relating to submission of an ANDA. For the majority, the fact that Congress included express reference to provisions of the FDCA relating to obtaining approval under § 271(e)(2) for infringement made it improper to "import" that limitation into the safe harbor provisions of § 271(e)(1). Calling their's the "only coherent and consistent interpretation of" provisions of § 271(e)(1) relating to "a Federal law which regulates the manufacture, use, or sale of drugs," the majority declared its analysis of the scope of the safe harbor to be "complete":
When the intent of Congress is expressed so clearly and consistently throughout the statute, there is neither the need nor the occasion to refer to the legislative history. Id. The scope of the Hatch-Waxman safe harbor does not stop at activities reasonably related to development of information submitted in an ANDA. Instead, the safe harbor applies "to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products." As long as the allegedly infringing use is "for uses reasonably related" to the development and submission of that information it is not an act of infringement, regardless of where that requirement resides in the law.
The panel majority cited two specific instances where the Supreme Court ruled on the meaning of § 271(e)(1) in a manner consistent with its interpretation: Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 666 (1990), and Merck KGaA v. Integra Lifesciences I, Ltd. In the Lilly case, the Court interpreted the safe harbor to include testing of medical devices because (despite the "clear and unambiguous language of the statute" that the safe harbor was limited to drugs) in the Court's view, regulation of medical devices fell within the ambit of the FDCA. And in Merck, the Supreme Court "reaffirmed this expansive view" of the safe harbor, holding that infringement of patent claims directed towards activities that were not directly related to obtaining data for submission to the FDA, i.e., clinical trials, but extended to basis compound discovery activities, on the grounds that Congress had used the word "any" in reciting the activities within the scope of the safe harbor. And the panel majority also provided a reminder that Merck held that the phrase "reasonably related to the development and submission of information" relating to regulatory approval did not require that the activities actually resulted in information that was submitted for regulatory approval. Accordingly, the panel majority concluded that the Court's Merck decision "explicitly rejected the notion that § 271(e)(1) was limited 'to the activities necessary to seek approval of a generic drug'" so long as "the accused infringer 'has a reasonable basis for believing' that the use of the patented invention might yield information that 'would be appropriate to include in a submission to the FDA.'"
The panel majority based its decision that Amphastar's activities fell within the safe harbor expressly on the Merck decision, and in the process distinguished the Federal Circuit's earlier Classen decision (as it had to in order to arrive at its contrary conclusion). Classen, the panel majority stated, involved voluntary studies "not mandated by the FDA" and that produced "'information that may be routinely reported to the FDA, long after marketing approval has been obtained'" (i.e., adverse event information that is reported as it is obtained). That was not this case according to the opinion, because the information obtained from infringing Momenta's patents was necessary for Amphastar to continue to sell enozaparin (and failure to do so could cause FDA to "suspen[d] or revo[ke] Amphastar's approval"). Accordingly, the opinion stated that "post-approval studies that are "reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs" fall within the scope of the § 271(e)(1) safe harbor." And under this interpretation of the law, the majority further held that Momenta was not likely to prevail on the merits below.
Judge Rader's dissent focused on the limited scope of the safe harbor, based on his understanding of the fundamental right to exclude embodied in the patent statute and the limited exception to that right granted under § 271(e)(1). ("Thus, exceptions to the traditional property remedy amount to a get-out-of-jail-free card for the trespasser. Accordingly, such exceptions must occur only sparingly with awareness that this license allows the wrongdoer free reign to continue trespassing.") That limited scope is the result of a balance, expressly struck by Congress, between the recompense to patentees who lost patent term during regulatory review (comprising the patent term extension provisions of 35 U.S.C. § 156 et seq.) and the benefits to the public by legislative override of Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858 (Fed. Cir. 1984) (preventing any infringing activity prior to patent expiration including activities required by the FDA or other government agencies for approval of drugs):
The purpose of 271(e)(1) and (2) is to establish that experimentation with a patented drug product, when the purpose is to prepare for commercial activity which will begin after a valid patent expires, is not a patent infringement. Since the Committee's Subcommittee on Health and the Environment began consideration of this bill, the Court of Appeals for the Federal Circuit held that this type of experimentation is infringement. In Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858 (Fed. Cir. 1984), the Court of Appeals for the Federal Circuit held that the expiration date of a patent claiming that drug product constitutes patent infringement, even though the only purpose of the experiments is to seek FDA approval for the commercial sale of the drug after the patent expires. It is the Committee's view that experimental activity does not have any adverse economic impact on the patent owner's exclusivity during the life of a patent, but prevention of such activity would extend the patent owner's commercial exclusivity beyond the patent expiration date.
H.R. REP. NO. 98-857, pt. 1, at 45-46 (1984) (emphases added).
In the Momenta case, Judge Rader discerned a "strong incentive to invent [around] the patented manufacturing method," that Amphastar eschewed in favor of infringing Momenta's patented method:
At that point, Amphastar stepped in and took Momenta's patented invention without permission and used it to manufacture each commercial batch it sells on the market. Indeed Amphastar continues to trespass and promises to trespass for years to come. In fact, as the court repeatedly acknowledges, Amphastar is only able to compete with Momenta by taking its patented invention. Amphastar has not developed its own method, but instead delights in trespassing and refuses to pay a reasonable royalty to make the trespass lawful.
In addition to permitting "this arrogance" to continue, according to the Chief Judge, the majority erred by "expanding the limited reach of 35 U.S.C. § 271(e)(1)" and "ignor[ing] the binding precedent of Classen Immunotherapies, Inc. v. Biogen IDEC." Those limits, according to Judge Rader, were limits in time (pre-marketing approval), type (experimentation) and quantity (in an amount that would have "limited impact on the patentee's exclusivity during the life of the patent"), none of which limitations were satisfied by Amphastar's activities. Importantly, "the authors made clear that section 271(e)(1) would not apply to commercial sales, i.e., the 'infringing' product would not enter the market until after the patent's life" said the Chief Judge, citing H.R. REP. NO. 98-857, pt. 1, at 45 (1984) ("This section does not permit the commercial sale of a patented drug by the party using the drug to develop such information, but it does permit the commercial sale of research quantities of active ingredients to such party.") (emphasis added). Accordingly:
Nowhere in the legislative history can this court find any suggestion that § 271(e)(1) would apply other than in the limited scenario of conducting de minimis experiments pre-approval (i.e., to obtain FDA approval). Nowhere in the legislative history can this court find a hint that an "infringer" could continue to use its competitor's patented method in manufacture of each commercial batch for contemporaneous sale. Nowhere in the legislative history can this court find any mention of the post-approval, continuous, commercial sales allowed by this decision. Nowhere in the legislative history can this court find any suggestion that the mere maintenance or retention of information as part of a company's records is considered a submission that would trigger § 271(e)(1). In fact, this court makes no attempt to examine the legislative history of this section at all -- a very telling silence.
As a result:
This new interpretation would allow almost all activity by pharmaceutical companies to constitute "submission" and therefore justify a free license to trespass. The FDA can inspect records of any drug manufacturer and seller. See 21 U.S.C. § 374. Thus, the drug manufacturer need only make a record, which could potentially be inspected by the FDA, and then any activity could satisfy this new meaning of "submission."
While the Supreme Court does not indicate why it refused to grant certiorari, consideration must be given to the views of the Solicitor General which were expressed upon invitation by the court in the GSK v. Classen Immunotherapeutics case.
According to the Solicitor General's CVSG brief, "further review [of the Classen decision with regard to the safe harbor} was "no longer warranted" in view of the Federal Circuit's later Momenta decision. The SG expressed the view that the Classen majority erred when the opinion stated "that Section 271(e)(1)'s safe harbor encompasses only activities undertaken to obtain the FDA's pre-marketing approval of generic products" because "Congress not only contemplated that drug manufacturers would conduct post-approval scientific studies and clinical trials, but specifically authorized the FDA to require such studies in a variety of circumstances." Thus, any post-approval studies that involve the use of patented inventions solely for uses reasonably related to the development and submission of information to the FDA should fall within the safe harbor by the statute's plain meaning. The basis for the SG's arguments came almost exclusively from the Court's reasoning in the Merck decision, which held that any use of a patented invention for developing information that could be submitted to the FDA or other regulatory agency to obtain marketing approval falls within the scope of the safe harbor. And, according to the SG, there is no basis in the statutory language to distinguish eligible post-approval activity from pre-approval activity. The SG maintained that the Federal Circuit corrected its error in its Momenta decision by applying the law according to the government's position, thus eliminating the need for the Supreme Court to apply correction by granting certiorari.
An unfortunate consequence of the Court's refusal to grant certiorari is that whether a particular activity -- pre- or post-approval -- falls within the safe harbor will depend on how a panel is constituted. In his Momenta dissent, the Chief Judge contended that the Court had "already decided the meaning of this statute," which if correct would preclude the later panel from having come to the opposite conclusion. That the majority in the Momenta case did come to the opposite conclusion was based on Judge Moore being able to distinguish the facts and activities in Classen from those in Momenta. However, given the fact-intensive nature of the question, it is not unlikely that the next case before the next panel that considers the question would (and depending on the panel's constitution, perhaps will) make its own distinctions. Unless the entire Court takes the case en banc there will be no firm precedent (despite the SG's reassurances to the Supreme Court) upon which litigants will be able to rely. This situation is antithetical to Congress's purpose in establishing the Federal Circuit, and provides one more example of questions arising before the court that have no consistent answers. Although Supreme Court review has its own perils (KSR, Bilski, Mayo, Myriad), this question would appear to be one that will only be resolved by an unambiguous decision from the Court (which, no matter how it comes out on the merits will at least confer the benefits of certainty).