yakovliev /
10 October 2018AmericasFilko Prugo, Charlotte Jacobsen, Matt Rizzolo and Henry Huang

USITC: a powerful forum for biologics patent owners

For manufacturers of biologics and biosimilars, the Biologics Price Competition and Innovation Act (BPCIA) imposes a complex statutory scheme that restricts the timing and control of patent litigation in district court. Biosimilar applicants who find themselves on the receiving end of a potential patent infringement complaint in district court have the advantage of (and have utilised) patent challenges at the Patent Trial and Appeal Board (PTAB).

However, another option also exists for biologics patent owners—one that proceeds at a fast pace using specialised rules and judges and that eschews stays pending PTAB challenges: the International Trade Commission (ITC).

The ITC provides a potentially robust supplement to BPCIA litigation in federal court—with distinct strategic considerations and powerful potential remedies for patent owners. Most significantly, the ITC may permit earlier resolution of ‘second phase’ BPCIA patent disputes and avoid the need for a preliminary injunction to prevent an at-risk biosimilar launch.

Patent owners who resort to ITC litigation can avoid certain BPCIA obstacles. The statutory ‘patent dance’ is not a prerequisite to an ITC complaint, and the reference product sponsor (RPS) can assert any number of patents without negotiating its selection with the abbreviated biologic licence application (aBLA) holder.

Once an investigation is instituted, the ITC’s specialised administrative law judges (ALJs) preside over these so-called ‘section 337’ proceedings, and often have substantially more experience with patent litigation issues than a typical district court judge.

The ITC also moves much more quickly than the district courts, providing final determinations within 16 to 18 months. Additionally, because it is required to complete section 337 proceedings ‘at the earliest practicable time’ after the investigation begins, the ITC does not stay investigations pending parallel patent challenges such as inter partes review or reexamination.

While the ITC cannot award monetary damages, the remedies it does issue are extremely powerful: the ITC is empowered to issue exclusion orders, which are effectively injunctions enforced by US customs to stop infringing products at the border, as well as cease-and-desist orders to prohibit the sale of infringing products that are already present in the country.

Obtaining an exclusion order or cease-and-desist order at the ITC is simpler than seeking a permanent injunction in district court, as the ITC is not bound by the equitable test of eBay v MercExchange (US Supreme Court, 2006).

For the unsuccessful complainant, moreover, ITC rulings on invalidity or infringement issues lack preclusive effect in district courts, allowing patent owners in certain instances a second opportunity to enforce their patent rights.

ITC barriers

For these reasons, the ITC allows the RPS greater control over the timing and scope of biosimilar litigation, but the unique barriers to ITC access by an RPS warrant closer examination.

First, the relative amount and scope of domestic and foreign activities of the RPS may affect ITC jurisdiction in a given case. ITC complainants must show a ‘domestic industry’—a significant or substantial investment in the US relating to products or processes that practise the asserted patents. Merely manufacturing the reference product abroad and importing it for sale in the US generally will not suffice. However, the RPS usually engages in domestic, post-marketing regulatory and sales activity that could satisfy this requirement.

Second, ITC complainants must also establish the aBLA applicant’s importation, sale for importation, or sale after importation of products that either infringe an asserted patent or were made by a process that infringes an asserted patent. Showing such importation or sale is ‘imminent’ may suffice, but the Federal Circuit has not resolved how imminent the importation or sale must be in order to establish ITC jurisdiction or whether the filing of an aBLA is enough to make launch imminent, even if the RPS has years of exclusivity remaining.

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