In our most recent publication, Bristows’ Biotech Review, we reported on the US Supreme Court decision which, at the time, was the latest judgment in the ongoing saga between Sandoz and Amgen. As readers will recall, this litigation relates to the abbreviated pathway for obtaining FDA approval of a biosimilar under the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”) and, specifically, the information exchange procedures contained therein for resolving patent disputes between innovators and biosimilar applicants in the process known as the “Patent Dance”. In the Supreme Court decision, the Court held that under federal law an injunction is not available to enforce the information exchange provisions of the BPCIA and a biosimilar applicant need not defer giving the requisite notice of marketing until FDA approval (thereby precluding a de facto 180 day extension to the patentee’s monopoly).

On remand, the Federal Circuit Court of Appeals has now ruled on whether state law (in this case Californian law) would determine non-compliance with the Patent Dance as unlawful and, if so, whether the BPCIA pre-empts any additional remedy available under state law for failure to comply (U.S. Court of Appeals for the Federal Circuit, Amgen Inc. v Sandoz Inc. 2015-1499).

Amgen’s substantive argument (the only issue considered in this update) was that the BPCIA does not pre-empt state law and therefore state law may bite on a party that fails to “dance the dance”. In response, Sandoz argued that state law should not apply as it is pre-empted by the BPCIA under two grounds: (1) the field pre-emption; and (2) the conflict pre-emption. The former excludes state law from regulating “conduct in a field that Congress intended the Federal Government to occupy exclusively” whereas the latter excludes state law “where it is impossible for a private party to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”

In its judgment, the Court held that state law exemption should not apply under the field pre-emption as the BPCIA and the Patent Dance are not in a field “traditionally occupied” by individual states and furthermore (echoing the words of the Supreme Court) the BPCIA “sets forth a carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of [patent] infringement” and that this is, in itself, so pervasive that a reasonable inference can be drawn that Congress left no room for individual state law to supplement it. By way of similar reasoning, the Court also held that the conflict pre-emption applies as introducing additional state law relief would create “a conflict in the method of enforcement” in the regulatory system chosen by Congress and introducing state law (and, by extension, 50 iterations thereof) would “interfere with the careful balance struck by Congress” in the BPCIA. On this basis, the Court dismissed Amgen’s state law claims.

Whilst this decision may seem to be only a small part of a much larger picture, it does seem to close the door to any further state law claims being used to enforce non-compliance with the rules of the Patent Dance.

As a post script, this decision may close the door on state law claims but it certainly does not represent an end to litigation concerning the Patent Dance; in December, Genentech commenced an action against Sandoz (again) about its failure to comply with the Patent Dance.