Sandoz Inc. v. Amgen Inc.

773 F.3d 1274

112 U.S.P.Q.2d 2004

SANDOZ INC., Plaintiff–Appellant

v.AMGEN INC. and Hoffmann–La Roche Inc., Defendants–Appellees.

No. 2014–1693.

United States Court of Appeals, Federal Circuit.

Dec. 5, 2014.

James F. Hurst, Winston & Strawn LLP, of Chicago, IL, argued for plaintiff-appellant. With him on the brief were Maureen L. Rurka and James M. Hilmert.

David T. Pritikin, Sidley Austin LLP, of Chicago, IL, argued for defendants-appellees. With him on the brief were VernoN M. Winters, of San Francisco, CA, and Jeffrey P. Kushan, of Washington, DC. Of counsel on the brief were Wendy A. Whiteford, J. Drew Diamond, and Gail A. Katz, Amgen, Inc., of Thousand Oaks, CA, for Amgen Inc. of counsel were James A. High, JR., of Washington, DC, M. Patricia Thayer, of San Francisco, CA, and Samuel N. Tiu, of Los Angeles, CA.

Before DYK, TARANTO, and CHEN, Circuit Judges.

Opinion

TARANTO, Circuit Judge.

Sandoz Inc. sued Amgen Inc. and Hoffman–La Roche Inc. to obtain a declaratory judgment that two patents, owned by Hoffman–La Roche and exclusively licensed to Amgen, are invalid and unenforceable and will not be infringed if Sandoz uses, offers to sell or sells, or imports a drug product “biosimilar” to Amgen's Enbrel ®. At the time it brought suit, Sandoz had not (as it still has not) filed an application for approval of its contemplated product by the Food and Drug Administration (FDA) and had only just begun certain testing required for its contemplated FDA filing. The district court dismissed the case, determining that no Article III controversy (yet) existed between the parties and also that the suit was barred by the Biologics Price Competition and Innovation Act of 2009 (BPCIA), Pub.L. No. 111–148, §§ 7001–7003, 124 Stat. 119, 804–21 (2010) (codified principally at 42 U.S.C. § 262 ). Sandoz Inc. v. Amgen Inc., No. CV–132904 MMC, 2013 WL 6000069, at *2–3 (N.D.Cal. Nov. 12, 2013). We affirm, concluding that Sandoz did not allege an injury of sufficient immediacy and reality to create subject matter jurisdiction. We do not address the district court's interpretation of the BPCIA.

Background

Amgen markets Enbrel ®, a “biological product” under 42 U.S.C. § 262(i), as a therapy for rheumatoid arthritis. The active ingredient in Enbrel ® is the protein etanercept.¹ Amgen's predecessor, Immunex, received an FDA Biologics License for Enbrel ®, under 42 U.S.C. § 262(a) and 21 C.F.R. pt. 601, in 1998. Sandoz began developing its own etanercept product in 2004.

In late 2011 and early 2012, the Patent and Trademark Office issued Patent Nos. 8,063,182 and 8,163,522 to Hoffman–LaRoche. The '182 patent claims specified proteins and related pharmaceutical compositions. The ' 522 patent claims certain methods of using host cells that include specified polynucleotides that encode certain proteins, specified polynucleotides themselves, and vectors and cells containing specified polynucleotides. Amgen has identified those two patents as among four patents “for etanercept.” J.A. 3146; see J.A. 3129 (press release stating that the '182 patent is “related to Enbrel ®”). Sandoz alleges in its complaint that, “[a]ccording to Amgen, the patents cover ... ‘etanercept,’ ” J.A.2002; see Sandoz, 2013 WL 6000069, at *1, although Sandoz alleges that Amgen is wrong, J.A.2010.

Sandoz needs FDA approval to enter the market with its own etanercept drug, and in 2010 Sandoz began a series of meetings with the FDA to plan for an application based on biosimilarity to Enbrel ®. That year, Congress enacted the BPCIA, borrowing from (though not copying) the Hatch–Waxman Act's process for use of an Abbreviated New Drug Application (ANDA), rather than a full New Drug Application, to obtain approval of generic versions of previously approved drugs. E.g., 21 U.S.C. § 355(j). The BPCIA establishes an FDA regulatory-approval process—more abbreviated than the full Biologics License Application process—for biological products that are shown to be “biosimilar” to a “reference product” already approved by the FDA. See 42 U.S.C. § 262(k).² On June 24, 2013, after close consultation with the FDA, Sandoz announced a large-scale human (Phase III) trial for its contemplated etanercept product. See 21 C.F.R. § 312.21 (Phase III trials “usually include from several hundred to several thousand subjects”). This trial, expected to run into 2015, was to be completed before Sandoz filed any application for FDA approval.

The same day that Sandoz began its Phase III trial, Sandoz filed a complaint against Amgen and Hoffman–LaRoche (hereafter collectively “Amgen”). Sandoz sought a declaratory judgment that “the manufacture, use, sale, offering for sale, or importation of its etanercept product will not infringe, directly or indirectly, any valid claim of” either the '182 or the '522 patent, that both patents are unenforceable due to prosecution laches, and that both patents are invalid. J.A.2015–18. Sandoz had not—and still has not—filed an application for FDA approval to market an etanercept product.

Amgen moved to dismiss the complaint, arguing, among other things, that the court lacked jurisdiction because no immediate, real controversy between the parties yet existed. The district court granted the motion. It agreed with Amgen that Sandoz had not “established a ‘real and immediate injury or threat of future injury’ ” caused by Amgen and so had not established a case or controversy. Sandoz, 2013 WL 6000069, at *2 (quoting Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339 (Fed.Cir.2008) ).

The district court also relied on a separate ground for dismissal—that the BPCIA prohibited Sandoz's suit. Among its provisions, the BPCIA establishes procedures for the narrowing and resolution of patent disputes between biosimilarity applicants and reference-product sponsors.See 42 U.S.C. § 262(l ). The district court concluded that Sandoz could not obtain a declaratory judgment before filing an FDA biosimilarity application. The court reasoned that, because Sandoz planned to enter the market by the biosimilarity route, it had to follow the BPCIA's patent-related procedures applicable to biosimilarity applicants—which it had not done. Sandoz, 2013 WL 6000069, at *1–2.

Sandoz timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

Discussion

We review de novo the dismissal of a declaratory-judgment action for lack of subject-matter jurisdiction. 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1377 (Fed.Cir.2012). Sandoz bears the burden of establishing jurisdiction. McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936).

A

Under the Declaratory Judgment Act, “[i]n a case of actual controversy within its jurisdiction ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201. The Act creates a remedy, not an independent source of subject-matter jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 94 L.Ed. 1194 (1950). Indeed, “the phrase ‘case of actual controversy’ in the Act refers to the type of ‘Cases' and ‘Controversies' that are justiciable under Article III.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007).

To answer the underlying case-or-controversy question in this context, we ask “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. (internal quotation marks omitted). The inquiry, focused on the combination of immediacy and reality, involves no bright-line test. See id. The required distinction is between a suit involving a “real and substantial” dispute that “ad-mit[s] of specific relief through a decree of a conclusive character” and a suit that calls for “an opinion advising what the law would be upon a hypothetical state of facts.” Id. (internal quotation marks omitted).

We have frequently applied MedImmune 's “all the circumstances” standard to determine, in the patent context, whether a declaratory-judgment plaintiff has presented a case of sufficient “immediacy and reality.” See, e.g., Arkema Inc. v. Honeywell Int'l, Inc., 706 F.3d 1351, 1356–60 (Fed.Cir.2013) ; Matthews Int'l Corp. v. Biosafe Eng'g, LLC, 695 F.3d 1322, 1328–31 (Fed.Cir.2012) ; Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 878–83 (Fed.Cir.2008) ; Benitec Austl., Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1343–49 (Fed.Cir.2007). The immediacy requirement is not concerned in the abstract with the amount of time that will occur between the filing of the declaratory judgment action and the liability-creating event. An event that is several years in the future may be an appropriate subject for a declaratory judgment. The immediacy requirement is concerned with whether there is an immediate impact on the plaintiff and whether the lapse of time creates uncertainty. The two issues—immediacy and reality—are thus related.

We have assessed “immediacy” by considering how far in the future the potential infringement is, whether the passage of time might eliminate or change any dispute, and how much if any harm the potential infringer is experiencing, at the time of suit, that an adjudication might redress.See Matthews, 695 F.3d at 1329–30 (citing cases). We have assessed “reality” by examining any uncertainties about whether the plaintiff will take an action that will expose it to potential infringement liability and, if so, exactly what action. Arkema, 706 F.3d at 1360 (noting absence of “uncertainty about whether the supplier's product is going to be used in a way that might or might not infringe the patentee's rights”); Matthews, 695 F.3d at 1330–31 (discussing cases requiring that plaintiff's conduct be “substantially fixed”). In short, we have focused on...