Intent Matters in Safe Harbor under BPCIA
By Kevin E. Noonan --
Earlier this week, Judge Richard G. Andrews, U.S. District Court Judge for the District of Delaware decided a veritable plethora of post-trial motions (by both parties) in Amgen Inc. v. Hospira, Inc. (he denied them all). These included Hospira's Rule 50(a) Motion for Judgment as a Matter of Law on the Issues of Safe Harbor, Noninfringement, Invalidity, and Damages and related briefing, Hospira's Motion for Judgment as a Matter of Law Under Rule 50(b) and, in the Alternative, For Remittitur or New Trial Under Rule 59 and related briefing, Hospira's Motion to Seal Confidential Exhibits Admitted at Trial and related briefing, Amgen's Renewed Motion for Judgment as a Matter of Law of Infringement of the '349 Patent or, in the Alternative, for a New Trial and related briefing, and Amgen's Motion for Prejudgment and Post-judgment Interest and related briefing. Of note is the basis for the Court's denial of Hospira's safe harbor motion under the provisions of the Biologics Price Competition and Innovation Act (BPCIA).
The case arose over Amgen's complaint that Hospira infringed its U.S. Patent Nos. 5,865,298 and 5,756,349. The jury found that Hospira had not carried its burden of showing either patent to be invalid by clear and convincing evidence; that Hospira infringed claims 24 and 27 of the '298 patent but had not infringed claims 1-7 of the '349 patent:
'298 patent claims at issue:
24. A method of preparing erythropoietin molecules having a predetermined number of sialic acids per molecule said number selected from the group consisting of 1-14, comprising applying material containing erythropoietin to an ion exchange column and selectively eluting said molecules from the column.
27. A method for obtaining an erythropoietin composition having a predetermined in vivo specific activity comprising preparing a mixture of two or more erythropoietin isoforms of claim 1.
Where independent claim 1 recites:
1. An isolated biologically active erythropoietin isoform having a single isoelectric point and having a specific number of sialic acids per molecule, said number selected from the group consisting of 1-14, and said isoform being the product of the expression of an exogenous DNA sequence in a non-human eucaryotic host cell.
'349 patent claims at issue:
1. Vertebrate cells which can be propagated in vitro and which are capable upon growth in culture of producing erythropoietin in the medium of their growth in excess of 100 U of erythropoietin per 106 cells in 48 hours as determined by radioimmunoassay, said cells comprising non-human DNA sequences which control transcription of DNA encoding human erythropoietin.
2. Vertebrate cells according to claim 1 capable of producing in excess of 500 U erythropoietin per 106 cells in 48 hours.
3. Vertebrate cells according to claim 1 capable of producing in excess of 1000 U erythropoietin per 106 cells in 48 hours.
4. Vertebrate cells which can be propagated in vitro which comprise transcription control DNA sequences, other than human erythropoietin transcription control sequences, for production of human erythropoietin, and which upon growth in culture are capable of producing in the medium of their growth in excess of 100 U of erythropoietin per 106 cells in 48 hours as determined by radioimmunoassay.
5. Vertebrate cells according to claim 4 capable of producing in excess of 500 U erythropoietin per 106 cells in 48 hours.
6. Vertebrate cells according to claim 4 capable of producing in excess of 1000 U erythropoietin per 106 cells in 48 hours.
7. A process for producing erythropoietin comprising the step of culturing, under suitable nutrient conditions, vertebrate cells according to claim 1, 2, 3, 4, 5 or 6.
The Court also assessed damages in the amount of $70 million, inclusive of pre- and post-judgment interest.
Hospira contended that the jury instructions were "legally erroneous and prejudicial," inter alia, because "ulterior motives and intent are irrelevant to [entitlement to] the Safe Harbor." Specifically, Hospira argued that the instructions did not clarify the use of the terms "use" and "make" as relevant to whether an activity was entitled to the safe harbor provisions of the statute. ("We would urge the broader standard for uses, but focus on the instruction should be on the uses and not the motives or purposes in making [a] batch. The statutory exemption is premised on the use aspect.") According to Hospira, the jury was asked to determine whether "manufacture" of the accused infringing article (biosimilar erythropoietin, bEPO) fell under the safe harbor when the only burden Hospira rightfully was obliged to meet was whether "use" of the allegedly infringing bEPO was "reasonably related to obtaining FDA approval." The Court disagreed, stating that "Hospira's potentially infringing 'use' of Amgen' s patented invention is Hospira's manufacture of the EPO drug substance referred to in its BLA (i.e., Hospira's performance of the steps of Amgen's method claims), not Hospira's subsequent use of the EPO drug substance (i.e., Hospira's subsequent use of the product obtained by practicing Amgen's method claims)." Thus, the safe harbor is available to Hospira only if manufacture of its bEPO was "reasonably related to obtaining FDA approval." Hospira's subsequent use of the bEPO is "probative in determining whether Hospira's manufacture of its EPO drug substance was reasonably related to obtaining FDA approval, [but] it is the manufacture itself (not Hospira's subsequent uses of EPO drug substance) that is the potentially infringing act which must be evaluated for safe harbor protection."
In addition, Hospira argued that it was unduly prejudicial for the Court not to instruct the jury that "intent is irrelevant to evaluating safe harbor protection." The Court interpreted Hospira's position to be that "intent is entirely irrelevant to the safe harbor analysis" but with that the judge expressly disagreed as being unsupported by the cited case law. Specifically, the Memorandum Opinion interprets Abtox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997), to mean that a party can use the benefit of the safe harbor "to use its data from the tests for more than FDA approval" and "does not look to the underlying purposes or attendant consequences of the activity (e.g., tests led to the sale of the patent), as long as the use is reasonably related to FDA approval" but "did not state that intent was irrelevant in determining whether an activity is reasonably related to obtaining FDA approval." On the contrary, the opinion states that "evidence of intent can be a relevant factor in determining whether an activity is reasonably related to obtaining FDA approval, and that these cases stand for the proposition that evidence of commercial intent is not determinative of the safe harbor inquiry." "[O]nce it is determined that 'the activity is reasonably related to obtaining FDA approval,'  intent or alternative uses are irrelevant to its qualification to invoke the section 271(e) shield," according to the opinion. And further:
[A]dopting Hospira's interpretation of the safe harbor defense would expand the defense beyond recognition and create a loophole that would make it virtually impossible to prove infringement in cases involving products regulated by the FDA. Since Hospira's interpretation requires ignoring intent in deciding whether the safe harbor applies, a party could manufacture 200 drug substance batches and earmark them for future use as commercial inventory without infringing, so long as the party used each of those batches for at least one test to generate data of the type used by the FDA in determining whether to approve the drug. In that scenario, each batch would be tested to generate data that could conceivably be used to respond to inquiries from the FDA, making each batch reasonably related to obtaining FDA approval. Essentially, Hospira's interpretation allows a single "token" submission of information derived from a potential infringing act to exempt that act from infringement, without regard to the realities surrounding the potentially infringing act. It seems to me that Hospira's interpretation reads the words "solely" and "reasonably" out of the statute, and that a party's stated intent may be considered as part of whether the manufacture or use of a patented drug was "solely for uses reasonably related to" obtaining FDA approval. I think that the jury instructions properly recited the role of intent in the safe harbor analysis.
The hypothetical nicely illustrates the practical considerations behind the scope of the safe harbor, and how these considerations influence how courts evaluate the safe harbor's proper scope.
Amgen Inc. v. Hospira, Inc. (D. Del. 2018)
Memorandum Opinion by Judge Andrews