August 9, 2018

At Risk Launch: A Hypothetical Case Study

Consider the following hypothetical:  Your company is a biosimilar applicant.  You are in the early stages of BPCIA litigation against the Reference Product Sponsor, and you want to launch at-risk following FDA approval (assumed to be 3 years from now).  How should the litigation be managed to allow that to happen?

The predicate step to an at-risk launch is to ensure the requisite 180-day notice of intent to market is given to the RPS.  This 180-day notice is required regardless of whether the Patent Dance occurs, under Amgen Inc. v. Apotex Inc., 827 F.3d 1052 (Fed. Cir. 2015).  Timely notice must be given at least 180 days before you are able to market your product.

Next, the key for an at-risk launch would be to position yourself to defeat a preliminary injunction motion from the RPS.  The scope of a preliminary injunction motion could be much wider than the complaint if, for example, the RPS has a large number of patents (a common strategy in this space), it may have held some of them back from the complaint, and likely did so if the patent dance was followed.  This is because BPCIA § 262(l)(8)(B) allows the RPS to file for a preliminary injunction on all patents listed in its Patent Dance disclosures (or later-issued patents), and does not provide you with a mechanism to limit the number of patents asserted.  As an interesting side note that will likely be addressed by the courts, the statute specifically allows for a preliminary injunction on the larger group of a patents.  It is potentially unclear whether a permanent injunction could issue based on the patents that are not asserted in the complaint.)

In deciding a preliminary injunction motion, the Court will consider the following factors: (1) the likelihood of ultimate success on the merits; (2) the possibility of irreparable harm; (3) the relative rights and hardships of the parties; and (4) the public interest.  Preliminary injunction proceedings move quickly.  It will thus be important for you to anticipate the issues that will likely arise during that process, and do as much work as possible to be prepared to address those issues before the preliminary injunction motion is filed.  This will put you in a better position you to address any issues that unexpectedly arise during the preliminary injunction phase.

To address the first factor, likelihood of success, you will need to prepare arguments (noninfringement, invalidity, or unenforceability) for each patent that the RPS could theoretically assert in a preliminary injunction.  Given the potentially large number of patents involved, this could be a very substantial undertaking that should begin well before a preliminary injunction motion is filed, given the expected short timeframe of preliminary injunction proceedings.  You should also expected to be unsuccessful in efforts to take early discovery regarding patents not asserted in the complaint, as there is case law stating that, in BPCIA cases, it is inappropriate to allow discovery regarding patents that are not asserted.  Rather, you will need to conduct prior art searches, and prepare noninfringement theories using its own technical information.  You should also retain and prepare technical expert witnesses to provide testimony on these issues before the preliminary injunction proceedings begin.

As to factor 2, the threat of irreparable harm, the Federal Circuit has found there is no presumption that money damages are inadequate.  Thus, you should be prepared to show that it has sufficient liquidity to satisfy any later damages amount.  You also should be prepared to show what the appropriate measure of damages would be, e.g., reasonable royalty, and also to rebut assertions of, e.g., price erosion should and injunction not issue.  This likely would involve presenting early expert testimony on damages.  Accordingly, as a part of normal discovery you should early on seek information relevant to damages.  You should also consider whether to offer to post a bond.  You should also take discovery (in the form of contention interrogatories) on the RPS’s particularized irreparable harm contentions, and prepare rebuttals to any of the RPS’s theories for why money damages would be inadequate.

The third factor, balance of the hardships, often follows from the Court’s finding of likelihood of success on the merits.  Aside from that, you also should take discovery to obtain the RPS’s contention as to what hardships it would face if an injunction were not issued, and rebut them.  You should also address any hardships it will face if an injunction issues, and prepare your evidence on those points.

The final preliminary injunction factor is the public interest.  For this, early in the case you should take discovery to understand the RPS’s contention on this point.  You should also compile evidence on patient benefits that would flow from market competition.  This would include data on the cost of of the RPS’s product, proposed pricing for your alternative, and distribution mechanisms that you would utilize.

A preliminary injunction proceeding can present a significant hurdle to an at-risk launch.  But, by thinking ahead and being proactive instead of reactive in crafting arguments, the biosimilar applicant’s chances of overcoming a preliminary injunction motion can be improved.