By Kevin E. Noonan --
The Federal Circuit has grappled with, divisively in some instances, the extent to which the safe harbor provisions of 35 U.S.C. § 271(e)(1) extend to activities not strictly for obtaining regulatory approval, such as post-approval quality testing and "stockpiling" product used for commercial purposes. For example, in Classen Immunotherapies, Inc. v. Biogen IDEC, then-Chief Judge Rader joined by Judge Newman held that "routine" post-approval submissions are outside the safe harbor (over a vigorous dissent by Judge Moore), whereas in the following case, Momenta Pharm. v. Amphastar Pharm., the roles were reversed, with Judge Moore finding herself in the majority (with Judge Dyk), and then-Chief Judge Rader filing a dissent. Yesterday, the Federal Circuit revisited these issues in its decision in Amgen Inc. v. Hospira, Inc.
The case arose over Amgen's complaint that Hospira infringed its U.S. Patent Nos. 5,865,298 and 5,756,349 relating to cells and methods of preparing erythropoietin (EPO). The jury found that Hospira had not carried its burden of showing either patent to be invalid by clear and convincing evidence; and 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 106cells 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 106cells in 48 hours.
3. Vertebrate cells according to claim 1 capable of producing in excess of 1000 U erythropoietin per 106cells 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 106cells in 48 hours as determined by radioimmunoassay.
5. Vertebrate cells according to claim 4 capable of producing in excess of 500 U erythropoietin per 106cells in 48 hours.
6. Vertebrate cells according to claim 4 capable of producing in excess of 1000 U erythropoietin per 106cells 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 jury entered a verdict that Hospira infringed claim 27 of the '298 patent but that Amgen had not shown that Hospira infringed the claims of the '349 patent. The District Court also assessed damages in the amount of $70 million, inclusive of pre- and post-judgment interest.
Both parties moved for Judgment as a Matter of Law (JMOL). 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. 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 District Court held 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 District Court. 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 District Court denied both parties' motions for JMOL and this appeal followed.
The Federal Circuit affirmed the jury verdicts and decisions of the District Court with respect to Hospira's appeal and Amgen's cross-appeal, in a decision by Judge Moore joined by Judges Bryson and Chen. The Federal Circuit first held that the District Court correctly construed the claims so that the limitation "a mixture of two or more erythropoietin isoforms of claim 1" did not require mixing of two separately prepared and independently isolated EPO isoforms. This construction was contrary to Hospira's expert testimony, but the District Court and the Federal Circuit disagreed. According to the opinion, "[n]othing in the claim language or the specification suggests that it would be proper to limit claim 27 in the manner Hospira proposes," based in part on disclosure in the '298 patent specification that the claimed mixtures of EPO isoforms could be produced by "isolating selected erythropoietin isoforms simultaneously" (emphasis in opinion). The Federal Circuit concluded that "[t]he specification clearly contemplates the preparation of mixtures of isoforms in more than one way."
The opinion also affirmed based on substantial evidence the jury's finding that Hospira's EPO preparations infringed claim 27 of the '298 patent based on expert testimony and portions of Hospira's aBLA. The Federal Circuit also affirmed the jury's decision that claim 27 was not anticipated by a prior art reference because it did not disclose "a composition with a predetermined in vivo activity" but just that the EPO produced according to the reference was "biologically active."
Regarding the effect of the statutory safe harbor, the opinion rejected Hospira's objections to the jury instructions, particularly the final sentence:
You must evaluate each of the accused activities separately to determine whether the Safe Harbor applies. If you find that an accused activity was reasonably related to the development and submission of information to the FDA for the purpose of obtaining FDA approval, then Hospira has proved its Safe Harbor defense as to that activity. If Hospira has proved that the manufacture of a particular batch was reasonably related to developing and submitting information to the FDA in order to obtain FDA approval, Hospira's additional underlying purposes for the manufacture and use of that batch do not remove that batch from the Safe Harbor defense.
Hospira's objection was that "the jury instructions and verdict form improperly focused the jury on the reasons why each batch of EPO was manufactured, not how each batch was used or whether that use was reasonably related to the development and submission of information to support Hospira's BLA." The opinion rejected this argument, stating "[t]he jury instructions properly articulated the legal principles underlying the Safe Harbor inquiry. Section 271(e)(1)'s exemption from infringement 'extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA,'" citing Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005). The relevant question was whether each of Hospira's acts of manufacturing EPO falling within the scope of claim 27 of the '298 patent "was for uses reasonably related to submitting information to the FDA" and this was the question properly put to the jury by these instructions.
Turning to the merits, the Federal Circuit affirmed the jury's decision that fourteen batches of Hospira's EPO were not protected under the safe harbor. The other seven batches were clearly made for purposes related to obtaining FDA approval (two batches for qualifying Hospira's process and another five for mandatory pre-approval inspections). The opinion found substantial evidence that Hospira planned to use the other batches "[to] serve as commercial inventory to support single dose vial launch stock" and that "[w]hen it resubmitted its application in late 2015 after litigation began, Hospira changed the designation of certain batches from "commercial inventory" to "[continued process verification (CPV)]." Accordingly the Federal Circuit affirmed the jury's determination that these fourteen batches were not protected by the § 271(e)(1) safe harbor.
Nor did the panel find reversible error in the damages awarded to Amgen, which fell between the amounts asserted by Amgen's and Hospira's experts.
Finally, the Federal Circuit affirmed the District Court's denial of Amgen's JMOL on the ground that Amgen had not shown by substantial evidence that Hospira's cells produced EPO in amounts recited in the '349 patent claims.
Amgen Inc. v. Hospira, Inc. (Fed. Cir. 2019)
Panel: Circuit Judges Moore, Bryson, and Chen
Opinion by Circuit Judge Moore
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