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Janssen Biotech, Inc. v. Celltrion Healthcare Co., Ltd.

United States District Court, D. Massachusetts

September 26, 2016

JANSSEN BIOTECH, INC. ET AL, Plaintiffs,
v.
CELLTRION HEALTHCARE CO. INC., ET AL., Defendants.

          MEMORANDUM AND ORDER

          WOLF, D.J.

         I. SUMMARY

         In 2015, plaintiffs Janssen Biotech, Inc. and New York University (collectively "Janssen") filed Civil Action No. 15-10698 (the "2015 Action") against defendants Celltrion Healthcare Co., Ltd., Celltrion Inc., and Hospira, Inc. (collectively "Celltrion"). The case was brought pursuant to the Biologies Price Competition Act (the "BPCIA"), 42 U.S.C. §262, 35 U.S.C. §271(e)(2)(C). In the 2015 Action, Janssen alleged infringement by defendants' biosimilar product of several of Janssen1s patents, including U.S. Patent No. 6, 284, 471 (the,, , 471" patent") and U.S. Patent No. 7, 598, 083 (the '"083" patent"), used to produce Remicade. Remicade is prescribed for chronic pain and generates billions of dollars of sales in the United States annually. In addition, in the 2015 Action, Janssen alleged violations of the BPCIA.

         In 2016, Janssen filed Civil Action No. 16-11117 (the "2016 Action"), pursuant to 35 U.S.C. §271(a), alleging infringement of the '083 patent relating to Celltrion's activities outside the United States. The two cases have been consolidated.

         In August 2016, the court decided two Celltrion motions for summary judgment and held that the '471 patent is invalid due to obviousness-type double patenting. Celltrion has moved for entry of a final judgment on this issue pursuant to Federal Rule of Civil Procedure 54(b). Janssen opposes that motion.

         For the reasons explained in this Memorandum, Celltrion's motion for final judgment concerning the '471 patent is being allowed. The court has decided all issues concerning the validity of the '471 patent. Its judgment is, therefore, "final" for the purposes of Rule 54 (b) . In addition, there is no just reason to delay the entry of final judgment concerning the '471 patent. The decisions concerning the '471 patent are separable from the remaining issues in these cases. This court finds that the results of the pending reexamination of the '471 patent by the Patent and Trademark Office (the "PTO") will not affect the decision that the '471 patent is invalid. Nor will the Federal Circuit be required to decide the same issues more than once.

         The equities also favor an immediate appeal of the decisions that the '471 patent is invalid. Uncertainty concerning that question could delay the sale of Inflectra in the United States. Even if Inflectra is sold in the United States, uncertainty about whether Inflectra will be removed from the market because it infringes the '471 patent could discourage doctors from prescribing it. In either case, the individuals suffering great pain could be unfairly deprived for some time of a more affordable alternative to Remicade if the '471 patent is found on appeal to be invalid. In any event, legitimate price competition may be delayed while Janssen reaps substantial monopoly profits that would be unjustified if the '471 patent is invalid.

         The BPCIA established an expedited procedure to promote the prompt resolution of claims of patent infringement by biosimilar products. This process is intended to reduce uncertainty and thus encourage the sale of non-infringing, more affordable biosimilars which may be important to human health. Granting Celltrion's Rule 54(b) motion serves the purposes of the BPCIA.

         II. THE FACTS AND PROCEDURAL HISTORY

         Janssen holds patents employed to create the biologic product "Remicade, " which is based on the antibody infliximab. Remicade is used to treat intense, chronic pain. It can cost up to $20, 000 per person a year. It generates revenue from sales in the United States of about $4 billion a year for Janssen and its parent, Johnson & Johnson.

         The '471 patent is a patent to a group of chimeric antibodies including the infliximab antibody in Remicade. It is referred to by the parties as the "antibody patent." The '083 patent claims the liquid solution in which cells are grown, such as the cells that produce the infliximab antibody. It is referred to by the parties as the "soup patent." In contrast to the '471 patent, the '083 patent does not include any reference to infliximab.

         Celltrion has developed a product named Inflectra that is biosimilar to Remicade. Celltrion invested more than $100 million to develop Inflectra. Hospira, which is owned by Pfizer, has an exclusive agreement with Celltrion to market Inflectra in the United States.

         In April 2016, the United States Food and Drug Administration approved Inflectra for sale. Pursuant to the BPCIA, Celltrion may begin selling Inflectra in the United States in October 2016. See Amgen Inc. v. Apotex Inc., 827 F.3d 1052, 1066 (Fed. Cir. 2016).

         In essence, the BPCIA: requires the developer of a biosimilar product to disclose promptly the information necessary for a patent holder to decide whether it believes its patent has been infringed; requires the patent holder to sue promptly for any alleged infringement; and limits a patent holder to recovering a reasonable licensing fee, rather than lost profits, if the alleged infringement is not prosecuted promptly. See Amgen Inc. v. Sandoz Inc., 794 F.3d 1347, 1351-52 (Fed. Cir. 2015); 35 U.S.C. §271(e)(6). The BPCIA seeks to "'ensure that litigation surrounding relevant patents will be resolved expeditiously and prior to the launch of the biosimilar product, providing certainty to the applicant, the reference product manufacturer, and the public at large.'" Amgen, 794 F.3d at 1363 (Newman, J. concurring in part, dissenting in part) (quoting Biologies and Biosimilars: Balancing Incentives for Innovation: Hearing Before the Subcommittee On Courts and Competition Policy of the House Committee On the Judiciary, 111th Cong. 9 (July 14, 2009) (statement of Rep. Eshoo)) . The BPCIA is based in part on the understanding that uncertainty concerning whether an innovative biologic infringes a valid patent can discourage development and sale of a product that may be helpful to human health and more affordable than the patented product.

         In these consolidated cases, Janssen now alleges that Inflectra infringes the '471 patent and the '083 patent.[1] In addition, Janssen asserts that Celltrion has not satisfied the requirements of the BPCIA. Janssen seeks declaratory and injunctive relief, and damages as well.

         Despite being offered by the court several opportunities to do so, Janssen did not move for a preliminary injunction to prohibit the sale of Inflectra in the United States pending the outcome of these cases. Janssen did, however, move for a stay of the litigation until the PTO concluded the pending reexamination of the '471 patent. Celltrion opposed that request.

         At a May 19, 2016 hearing, the court denied the motion for a stay. See May 19, 2016 Transcript at 54-57. In explaining its decision, the court noted that the case was at an early stage and the litigation would be simplified at the district court level if the PTO found the '471 patent invalid. Id. The court cited these factors as favoring a stay. Id. at 54-55.

         However, the court found these considerations to be outweighed by the undue prejudice to Celltrion and the public if the stay were granted. It reasoned, in part, that a stay would undermine a primary purpose of the BPCIA-achieving the expeditious resolution of the issues of alleged infringement to promote certainty as to whether a biosimilar product could be sold without exposing an innovator to the risk of an award of lost profits, which ...


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