Opinions / Panel Activity

Recently the Federal Circuit issued its opinion in Immunex Corp. v. Sandoz Inc., a case we have been tracking because it attracted two amicus briefs. In the opinion, Judges O’Malley and Chen affirm the lower court’s ruling that Sandoz failed to prove that the patents-in-suit were invalid. Judge Reyna filed a dissenting opinion. Here is a summary of the opinion and dissent.

This case reached the Federal Circuit following a judgment in favor of Immunex. The district court found that Sandoz failed to prove that the patents-in-suit were invalid. As explained in our argument preview, Sandoz argued on appeal that the patents-in-suit are invalid. Immunex responded that Sandoz failed to show clear error at the trial court. As mentioned, two amicus briefs were filed in support of Sandoz.

Judge O’Malley wrote the opinion for the panel, which affirmed the district court’s judgment in favor of Immunex. She described the relevant facts as follows:

Patent owner Hoffmann-La Roche Inc. (“Roche”), its exclusive licensee Immunex Corp. . . . initiated this patent infringement suit pursuant to the Biologics Price Competition and Innovation Act (“BPCIA”). . . . Sandoz sought approval to market Erelzi, a biosimilar version of Immunex’s biologic drug, Enbrel®. . . . The patents-in-suit are directed to the fusion protein etanercept and methods of making the same. Etanercept is the active ingredient in Immunex’s biologic drug Enbrel®. . . . By 1990, both Roche and Immunex Corp. were separately engaged in researching TNF and investigating whether targeting this molecule could provide any therapeutic benefits. . . . Immunex Corp., working independently on TNFR-IgG fusion proteins, obtained FDA approval of Enbrel® in 1998. Almost a year later, Immunex Corp. and Roche entered into a license (the “Immunex-Roche agreement”), effective as of the approval date of Enbrel®, pursuant to which Immunex obtained a license to, inter alia, the EP ’707 Application and the ’013 Application, and all patents that issue from those applications. . . . In 2002, non-party Amgen, Inc. acquired Immunex Corp. Subsequently, in 2004, Amgen, Inc., Immunex Corp., Roche, and non-party Wyeth entered into an “Accord & Satisfaction” agreement concerning the same patent family. J.A. 25836. The purpose of the agreement was “to eliminate the continuing obligations to pay royalties to Roche” pursuant to the Immunex-Roche agreement. . . . In February 2016, Immunex, together with Roche, filed this patent infringement action against Sandoz under the BPCIA.

Sandoz presented three issues: (1) whether Immunex improperly extended its patent term by violating the equitable prohibition on obviousness-type double patenting (ODP); (2) whether Immunex failed to meet the written description requirement; and (3) whether the patents-in-suit were obvious.

The panel majority rejected all three of Sandoz’s arguments.

The court turned first to the issue of obviousness-type double patenting (ODP). It began by analyzing each side’s opposing theories of “common ownership.” Sandoz theorized that “if a party acquires all substantial rights in a patent application, including the right to control prosecution, then obviousness-type double patenting should apply.” Immunex responded that “common ownership-based obviousness-type double patenting arises only where relevant inventions were owned by the same entity at the time of the invention.” The court rejected Immunex’s “time of invention” test, pointing out that it conflicted with precedent and that it “might lead to the absurd result where, even if originally applied for by inventors working under an obligation of future assignment to an employer, patents may not be considered ‘commonly owned’ because, at the ‘time of invention,’ the assignment had not been effectuated.” On the other hand, the Court found the “all substantial rights test” proposed by Sandoz to be consistent with ODP analysis and thus appropriate to apply.

Although the court agreed to apply Sandoz’s “all substantial rights theory,” it nonetheless concluded that ODP does not apply in this case because an Accord & Satisfaction between Roche and Immunex did not transfer all substantial rights in the patents-in-suit to Immunex. Under the Accord & Satisfaction, Roche maintained several rights, including (1) a secondary right to sue; (2) rights to practice the patents for internal, non-clinical research; (3) a right to additional consideration for Immunex to convert the license into an assignment; and (4) a right to veto the assignment of Immunex’s interest to any unrelated party. The panel majority found this convincing enough to conclude that Roche did not transfer all of its substantial rights and, thus, ODP did not apply.  

Next, the court turned to the issue of the written description requirement. First, Sandoz contended that the written description for the full length p75 DNA sequence was inadequate because the application described a fusion protein based on a truncated/mutated p75 DNA sequence. The court disagreed because sequence identification numbers mentioned in the specification would have led a person of skill in the art to complete the sequence. Second, Sandoz argued that the priority application did not adequately demonstrate possession of the claimed p75-IgG1 fusion protein. The panel majority disagreed, concluding that the district court’s findings were supported by the as-filed specification.

Finally, the court turned to the issue of obviousness.

The district court found that a person of skill in the art would be deterred from pursuing the claimed combination of p75 with immunoglobulin by concerns of stimulating inflammation and aggregation. Although Sandoz contended that the claims are not directed to treatment of any disease or condition, the court found that it was Sandoz’s burden to prove motivation to combine and the district court properly focused on the evidence presented. Despite criticism of the amici, the panel found that the district court’s analysis was not legally erroneous because “the arguments at trial were focused on therapeutic effects of the claimed invention” and “the district court properly weighed the evidence presented and concluded as a matter of fact that a [person of skill] would be dissuaded from selecting or combining the components as claimed.”

Further, the Court disagreed with Sandoz’s contention that the district court incorrectly analyzed the required nexus between the claims and the objective indicia of non-obviousness. The court pointed out that “there is a presumption of nexus when the patentee shows the asserted objective evidence is tied to a specific product and that product is the invention disclosed and claimed in the patent.” The court concluded that nexus is appropriately presumed in this case because “the claims are directed to the active ingredient in Enbrel® and its method of manufacture.”

As a result of its analysis, the Federal Circuit affirmed the holding of the district court that Sandoz failed to prove that the patents-in-suit were invalid.

In his dissent, Judge Reyna maintained that the district court misapplied the “all substantial rights test” for ODP. He would have held that Immunex effectively owned the patents-in-suit for ODP purposes. He argued that “the majority permits the type of gamesmanship it sought to prevent—gamesmanship in prosecution which could result in unjustified extension of patent rights.” He pointed out that, during prosecution, Immunex extended its right to exclude to 2029 by “amending the applications to claim etanercept, which Immunex itself had claimed in its own patents and which was an active ingredient in Immunex’s Enbrel® product.” Further, Roche’s secondary rights are illusory, he said.