Federal Circuit Says BPCIA’s 180-Day Post-Licensure Notice Is Mandatory and Enforceable by Preliminary Injunction

By Andrew J. Hull & Mark I. Schwartz

On Tuesday, the U.S. Court of Appeals for the Federal Circuit affirmed a preliminary injunction against Apotex Inc. and Apotex Corp. (collectively, “Apotex”) related to Apotex’s biosimilar version of Amgen Inc. and Amgen Manufacturing Limited’s (collectively, “Amgen’s”) NEULASTA (pegfilgrastim).  Last December, the U.S. District Court for the Southern District of Florida had enjoined Apotex from entering the market with its biosimilar product until 180 days after Apotex provided Amgen with notice of FDA licensure of its biosimilar product (referred to as a “Section 351(k) BLA,” or as an “abbreviated BLA” or “aBLA”) (see our previous post here).  Apotex immediately appealed the decision to the Federal Circuit.

 As many of our readers are aware, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) set up an intricate multi-stage process for litigating potential patent disputes between the reference product sponsor and the biosimilar product applicant before the biosimilar product reaches the market (otherwise referred to as the “patent dance”).  While the parties are not required to participate in all of these steps, there are various statutory provisions that incentivize the parties to engage at each stage. 

 Specifically, the notice provisions of Public Health Service Act (“PHS Act”) § 351(l)(8)(A) (“Paragraph (8)(A)”) require an applicant to give the reference product sponsor notice at least 180 days before commercially marketing its “licensed” product (“Paragraph (8)(A) notice”).  PHS Act § 351(l)(8)(A).  The reference product sponsor can then seek a preliminary injunction against the applicant marketing the newly licensed aBLA within those 180 days based on alleged patent infringement of certain patents held by the reference product sponsor.  Id. § 351(l)(8)(A).

 Apotex engaged in the earlier steps of the patent dance with its biosimilar version of Amgen’s NEULASTA, and, in April 2015, provided Amgen with notice (identical to the information required in a Paragraph (8)(A) notice) of its future intent to commercially market the product, even though Apotex had not yet obtained an FDA license for the product.

 Subsequent to Apotex’s pre-licensure notice to Amgen, the Federal Circuit issued its decision in Amgen, Inc. v. Sandoz, Inc., 794 F.3d 1347 (Fed. Cir. 2015) (see our previous post here), in which the Court held that the Paragraph (8)(A) notice must be provided after, not before, FDA licensure of the biosimilar, id. at 1358.  The Court also concluded that Paragraph (8)(A) is “mandatory” for the applicant.  Id. at 1359.

 After the Sandoz decision, Amgen sought the underlying preliminary injunction that would require Apotex to provide Amgen with Paragraph (8)(A) notice upon licensing of its biosimilar, and that would enjoin Apotex from marketing that product until 180 days from such notice.  The district court agreed with Amgen’s assessment that Sandoz required an applicant to make a Paragraph (8)(A) notice, and granted the preliminary injunction.

 On appeal, the issue before the Federal Circuit was whether the 180-day notice provision of Paragraph (8)(A) is mandatory for all applicants upon licensure and, if so, whether that requirement is enforceable by a preliminary injunction.

 The Federal Circuit rejected Apotex’s argument that the Paragraph (8)(A) notice was not a requirement to an applicant that had previously provided notice under Paragraph (2)(A) (an earlier patent dance step):

 Paragraph (8)(A) provides that “[t]he subsection (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” § 262(l)(8)(A) (emphasis added).  The word “shall” generally indicates that the directive is mandatory.  See Nat’l Ass’n of Home Builders v. Defs. of Wildlife, 551 U.S. 644, 661–62 (2007); Lopez v. Davis, 531 U.S. 230, 241 (2001); Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35 (1998).  We ruled in Amgen v. Sandoz that this language is, indeed, “mandatory,” and we did not say that it was mandatory only in no- (2)(A)-notice circumstances.  794 F.3d at 1359.  Decision at 15.

 The Court also rebuffed Apotex’s argument that requiring the 180-day notice period would effectively provide the reference product sponsor with an additional 180 days of exclusivity.  The Court understood Paragraph (8)(A) to require notification upon issuance of the license, and not necessarily upon the date the license is effective.  Id. at 17.  Additionally, the Court explained that the purpose of Paragraph (8)(A)’s 180-day notice requirement is to give the parties adequate time for fair and accurate decision-making regarding potential patent litigation, and to give parties and the courts, in the event of litigation, appropriate time to litigate and adjudicate these matters:

 As this court explained in Amgen v. Sandoz, the purpose is to ensure that, starting from when the applicant’s product, uses, and processes are fixed by the license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy.  Id. at1358, 1360.  At the least, the reference product sponsor needs time to make a decision about seeking relief based on yet-to-be litigated patents, and a district court needs time for litigants to prepare their cases, in a complicated area, to provide a reliable basis for judgment.  While that may not be true in every single case, Congress clearly made a categorical fixed-period judgment in (8)(A)—as it did elsewhere in the Biologics Act—and we have explained that the “statute must be interpreted as it is enacted, not especially in light of particular, untypical facts of a given case.” Id. at 1358.  Decision at 17-18.

 Finally, the Court rejected Apotex’s argument that a declaratory judgment was the only relief available to aggrieved reference product sponsors.  Noting the lack of a “clear and valid legislative command” limiting the federal courts’ equitable jurisdiction over violations of Paragraph (8)(A), the Court held that the reference product sponsor could seek a preliminary injunction to enjoin an applicant to comply with the notice provisions of Paragraph (8)(A).  Id. at 21.

 As we mentioned in our earlier post, we believe that the Federal Circuit’s decision in this matter may not be the final song played at this dance.  We would not be surprised to see Apotex petition the Supreme Court for writ of certiorari, especially in the event that the Supreme Court chooses not to take up this issue on a different appeal (see our previous post here for the most recent developments in the Sandoz case).  We will keep you posted on any developments.