Court Orders Entry of Final Judgment of Invalidity in Ongoing Janssen v. Celltrion BPCIA Dispute

A number of new developments arose this past week in the ongoing litigation between Celltrion and Janssen. (C.A. No. 1:15-cv-10698, D. Mass.) As discussed here­, the dispute centers around Inflectra®, which is Celltrion's FDA-approved biosimilar of Janssen's Remicade® (infliximab). On Monday, Judge Wolf of the U.S. District Court of Massachusetts granted Celltrion's Motion for Entry of Final Judgment that U.S. patent No. 6,284,471 is invalid. (D.I. 249.) This order allows for an immediate appeal of the invalidity ruling, should Janssen choose to appeal to the U.S. Court of Appeals for the Federal Circuit. This was followed by an additional memorandum "more fully explain[ing]" the court's reasons for granting summary judgment of invalidity. (D.I. 253.) In addition, on Tuesday, Celltrion and Janssen filed a Joint Pretrial Memorandum and a Joint Proposed Agenda for Pretrial Conference, providing guidance on when and how the litigation will proceed. (D.I. 251; D.I. 252.) These recent developments will help shape the rest of the litigation and are discussed in turn below.

BACKGROUND INFORMATION

Janssen holds a number of patents covering Remicade®, including U.S. Patent No.'s 7,598,083 and 6,284,471. Remicade® is used to treat severe chronic pain. In October 2014, the FDA accepted Celltrion's abbreviated biologics license application ("aBLA") for a biosimilar of Remicade® called Inflectra®. In March 2015, Janssen sued Celltrion under 37 U.S.C. § 271(e)(2)(c) for technical infringement of six patents, including the '€˜083 and '€˜471 patents. (D.I. 1.) In April 2016, the FDA approved the Inflectra® biosimilar. Janssen also alleged procedural violations of the BPCIA. In June 2016, Janssen filed a second action against Celltrion alleging actual infringement of the '083 patent under 37 U.S.C. § 271(a) and (b) relating to Celltrion's foreign activities. The two cases have been consolidated. (D.I. 226.)

In a Memorandum and Order dated August 19, 2016, the court invalidated the '471 patent on two grounds. (D.I. 226.) First, the court explained that the '€˜471 patent is invalid for obviousness-type double-patenting in light of the patentability indistinct, earlier-expiring U.S. Patent No. 6,790,444. (Id. at 1-2.) Second, the court found that the '471 patent is invalid for an obviousness-type double-patenting based on U.S. Patent Nos. 5,698,195 and 5,656,272. (Id. at 2-5.)

On August 22, pursuant to Fed. R. Civ. P. 54(b), Celltrion moved for entry of partial final judgment that the '471 patent is invalid. (D.I. 229.) Janssen opposed the motion, arguing in part that an immediate appeal of the '471 patent to the Federal Circuit could create redundant litigation should the dispute regarding the '083 patent later reach the Federal Circuit. (D.I. 237.)

COURT GRANTS CELLTRION'S MOTION FOR ENTRY OF FINAL JUDGMENT

On Monday, the court granted Celltrion's Motion for Entry of Partial Final Judgment. (D.I. 249.) In holding that there was "no just reason to delay" the entry of final judgment, the court considered issues of judicial efficiency and equity. (Id. at 2-3.) With regard to judicial efficiency, the court narrowed in on whether the issues of claim construction, infringement, and invalidity of the '471 patent were separate and distinct from those issues with respect to the '083 patent. (Id. at 12.) In other words, was there a risk that the Federal Circuit would "have to decide the same issues more than once if there [is] a subsequent appeal concerning the '083 patent?" (Id.) The court determined there was no risk of redundant litigation because the '471 patent and '083 patent involve "distinctly different inventions" that "present no common questions of fact or law." (Id.) Also, the court determined that Janssen's claim that Celltrion did not follow the procedural requirements of the BPCIA was separate and distinct from the issue of validity of the '471 patent. (Id.) For these reasons, the court determined that an Entry of Partial Final Judgment would not result in duplicative litigation at the Federal Circuit.

The court also relied on equitable considerations that heavily favored Celltrion. First, the court voiced concern that continued uncertainty as to invalidity may delay the launch of Inflectra®. This delay could result in Janssen "having a monopoly generating more than $4 billion a year based on a patent that [the] court has found to be invalid." (Id. at 16.) Second, the court determined that doubt as to the invalidity of the '471 patent could also affect decisions by potential investors in both Celltrion and Janssen, and could even discourage doctors from prescribing Inflectra® in the future. (Id. at 16-17.) Most importantly, the court explained that the public has a strong interest in a less costly alternative to Remicade®. According to the court, Remicade® can cost up to $20,000 a year, and for this reason is unavailable to many people with severe chronic pain. (Id.) In granting entry of final judgment, the court ruled that these equities reflected the purpose of the BPCIA patent litigation provisions, which is "to reduce uncertainty and thus encourage the sale of non-infringing, more affordable biosimilars which may be important to human health." (Id. at 3.)

SETTING UP THE ISSUES FOR APPEAL

On the heels of the court's grant of entry of judgment, on September 28, 2016, the court issued an additional memorandum that "more fully explains" its reasons for granting summary judgment and "clarifies and amplifies some language" the court's previous order. (D.I. 253.) In addition to more fully explaining the relevant case law applied by the court, the new memorandum emphasizes the public policy underlying the double-patenting doctrine. The court explains that it is a "bedrock principle" at the "heart of the obviousness-type double patenting doctrine" for the public to be free to use expired patents, as well as obvious or patently indistinct modifications of those inventions. (D.I. 253 at 7.)

THE NEXT STEPS

With the '471 patent dispute ripe for appellate review, Janssen and Celltrion have moved forward with litigation concerning the '083 patent, the only remaining patent-in-suit. According to their Joint Pretrial Memorandum, trial is scheduled for two weeks beginning on February 13, 2017. (D.I. 251.) The trial will address liability and whether Janssen is entitled to injunctive relief. A pretrial conference will be held in January 2017.

Earlier this month, Celltrion filed a Motion to Dismiss, asserting that Janssen failed to state a claim (1) as to Celltrion's direct infringement of the '083 patent; (2) as to Celltrion's liability for inducing non-party HyClone to the infringe the '083 patent; and (3) as to Hospira's liability for inducement of the '083 patent. (D.I. 240, 241). Defendants have requested a hearing regarding the Motion to Dismiss.

Because Celltrion received FDA approval and provided Janssen with Notice of Commercial Marketing in April, Celltrion would be able to launch its product as early as October 2016 (180 days after notice). Although, as the court noted, Celltrion has made public statements that it intends to launch Inflectra® in 2016, it remains to be seen whether Celltrion will launch in October.

We will continue to monitor the case as it develops and provide updates.