Immunex and Roche v. Sandoz (Fed. Cir. 2020) [SandozEnBancPetition]
The court just denied Sandoz’s petition for en banc rehearing in this case, but the issue is pretty interesting and is set-up for a Supreme Court petition. The basic question in the case is whether companies are permitted to work-out an ownership scheme that avoids court scrutiny for obviousness-type-double-patenting.
The basic setup here is that folks at Immunex invented a tumor necrosis factor (TNF) blocker known as etanercept and obtained two patents on the protein and methods of use. U.S. Patent Nos. 5,605,690 and 7,915,225. Roche separately patented its own fusion protein, and Immunex (Amgen) effectively purchased this third patent. However, rather than receiving a formal assignment, Immunex “insisted on styling the U.S. agreement as a license.” Although a license, the grant included sole rights to make, use, sell, import products covered; grant sublicenses; and exclude others (including the patent owner) from commercializing the invention. The license also included a right to sue to enforce the patent and control any litigation including authority to determine any settlement as well as the right to control patent prosecution. En banc petition. This was a complete assignment – except that Roche continued to hold legal title even though Immunex effectively held all rights.
Why license instead of assign?: One reason is obviousness-type-double-patenting. Without common-ownership, the doctrine has no application. The following excerpt comes from the testimony of Stuart Watt, Immunex’s lead negotiator for the agreement:
After taking control of the patents, Immunex amended the claims to focus on its own activity rather than Roche’s prior approach. The benefit is that these new patents expire in 2028-2029 — ten years after expiry of Immunex’s other patent. Of importance — the drug at issue here (Enbrel) generated $5 billion in US sales in 2019.
In its decision, the Federal Circuit agreed with Sandoz that a strict common-ownership test for OTDP could allow for “unjustified patent term extensions” and “harassments” of defendants from multiple lawsuits. In particular, the court focused on transfer of right to control prosecution of the patents as a key feature. In the end, however, the court found that all-substantial-rights had not been granted since Roche retained a “secondary right to sue” infringers “if Immunex fails to rectify any infringement within 180 days after written request by Roche.” The distinction here of course is not actually meaningful in any way with regard to Immunex’s attempt to extend its exclusive rights over its product.
In its now failed petition for rehearing Sandoz asks the following:
A party that obtains an exclusive license conveying “all substantial rights” to a patent, including the right to control prosecution, is effectively that patent’s owner for purposes of obviousness-type double patenting.
May a party nonetheless avoid becoming an effective owner under the all-substantial-rights test, and thereby evade double-patenting scrutiny, merely by leaving the nominal owner with a theoretical secondary right to sue, which the licensee can prevent from ever ripening by issuing a royalty-free sublicense?
Petition. The petition was supported by amicus briefs from Samsung Bioepis (who is being sued on the same patent); the Association for Accessible Medicines; and America’s Health Insurance Plans, Inc.