Last week the District Court issued an important memorandum and order in Amgen v. Roche, a patent infringement litigation of great importance to biotechnology. The 150 page memorandum seeks to address and resolve all matters pending before the court, putting the case in condition for full appellate review. When reading the decision, I came away with the impression that Judge Young has been overwhelmed by the many complex issues brought up in the case. Early in the opinion, he acknowledges that due to the massive volume of post-trial briefing he was unable to address every motion. Nonetheless, he ends by noting that the order should be sufficiently "final" to allow for an immediate appeal, welcome appellate guidance, and expresses his hope that in this case he will be able “to avoid the process of appeal-remand-appeal-remand that unfortunately has characterized the related Amgen v. TKT/HMR litigation.”
I found a number of Judge Young's conclusions surprising, and will summarize a few of them here.
The Patents and Allegedly Infringing Product
Amgen's asserted patents claim methods and reagents for expressing and purifying recombinant erythropoietin (EPO), one of the earliest and still most successful biotechnology products. The patents come out of Amgen's groundbreaking work at the dawn of the biotechnology era which resulted in the successful cloning and recombinant expression of human EPO. Amgen sells two recombinant EPO biologic drugs (referred to as “erythropoiesis stimulating agents,” or ESAs), EPOGEN and Aranest. It also licenses Johnson & Johnson to sell its ESA, Procrit.
Roche’s allegedly infringing product is a pegylated-version of recombinant EPO, which goes under the trade name MIRCERA. Pegylation refers to the covalent attachment of PEG (a non-biological polymer) to the protein, and is a common technique used to modify the functional characteristics of a protein. In the case of MIRCERA, pegylation reportedly increases the half-life of the EPO protein in the body, allowing the drug to be administered at less frequent intervals. MIRCERA is produced by Roche in Europe, but they have sought FDA approval to market the drug in the US, sparking the infringement suit by Amgen.
Obviousness Double Patenting
Roche apparently pinned much of his hope of escaping liability on its argument that Amgen's patents are invalid for violating the judge-made prohibition against obviousness-type double patenting (ODP). Unfortunately for Roche, the court did not find this argument very persuasive. There appears to have been some confusion as to whether the determination of ODP is for the judge or jury. Judge Young noted that he was "surprised (and concerned) that Roche focused heavily in its opening to the jury on double patenting issues, as though it were some sort of equitable defense.” Ultimately, he decided it was a decision for the judge, not jury, and he rejected all of Amgen's ODP arguments.
At times, Judge Young appeared to confuse obviousness double patenting with statutory double patenting. For example, he states that “at its essence the inquiry ODP asks: “Is the same invention being claimed twice?”
Based on the facts as I understand them, Roche seemed to have some pretty strong arguments for ODP. For example, Amgen’s earliest EPO patent (4,703,008; expired now but successfully asserted in Amgen v. Chugai and Amgen v. TKT/HMR) includes a claim 23 which recites a “[eucaryotic] host cell transformed or transfected with a DNA sequence [encoding erythropoietin] in a manner allowing the host cell to express [the EPO protein].” The judge acknowledges this claim in his memorandum , but for some reason chooses to ignore the more relevant Claim 24, which depends from Claim 23 and specifies that “the host cell is capable of glycosylating [the EPO protein].”
The only practical utility for the cell of Claim 24 is to express the glycosylated EPO and to purify it. Methods for purifying glycosylated EPO were available at the time, as evidenced by the earlier success of others in purifying glycosylated EPO from the trace amounts present in human urine. Nonetheless, the judge found that the claim to the cell did not render obvious Amgen’s later issued 5,441,868 patent claims reciting a process for the production of glycosylated [EPO protein] comprising the steps of growing up the cell claimed in the ‘008 patent and isolating the glycosylated [EPO].
The judge held that “simply having a starting material [i.e., the cell capable of expressing glycosylated EPO] and knowing that, in theory, it can be used to create proteins is not the equivalent of having an actual process of successfully does so.” But this implies that the earlier patent was not enabled, since he is essentially arguing that there was no reasonable expectation of successfully expressing and isolating glycosylated EPO from the claimed cells, which means the earlier patent did not adequately teach one of skill in the art to use the invention. He does not provide any positive explanation as to why the use of the cells for their intended purpose would not have been obvious given the disclosure of the cells.
He was not persuaded by some seemingly relevant statements made by Amgen in an interference proceeding before the PTO involving some of the asserted patents. For example, in the past Amgen has argued that “clearly, the whole purpose and intent of the purified and isolated DNA sequence encoding human EPO (and cells transfected therewith) at issue in the litigation was to express in vivo biologically active human EPO.” In its decision, the Interference Board ruled that Amgen's work “relating to expression of the EPO gene in mammalian host cells and isolation of the resulting product involved [nothing] more than the exercise of ordinary skill by practitioners in the field.”
The judge concludes his ODP analysis by finding “that the ‘868 claims are not anticipated by the ‘008 patent and  that the ‘868 claims are different from the claims of the ‘008 patent, again seemingly confusing anticipation with obviousness.
Roche also argued that Amgen's claims directed to pharmaceutical compositions comprising recombinant EPO were anticipated by the earlier purification of the EPO from human urine. The court rejected this argument, finding that a claim limitation requiring that the EPO be purified from mammalian cells grown in culture distinguished over the prior art. This determination was based on evidence that there are structural differences between recombinant EPO and EPO purified from human urine. In particular, it had been shown that the glycosylation of recombinant EPO differs from urinary EPO, so that the limitation to EPO purified from cell culture reflected a real structural difference relative to the prior art, although the structural difference was not determined with any specificity.
This ruling seems correct, based on the apparent structural differences between the claimed and prior art proteins, assuming that the claims would not cover a recombinant EPO that is structurally identical to the prior art EPO derived from urine. There was one interesting statement from Judge Young that did stand out. In addressing the anticipation argument, he noted that "it is significant that the source [i.e., from recombinant cell culture] is what enables mass production and commercial viability.” In effect, he appears to be suggesting that recombinant EPO protein would be patentable over the prior art even if the structure of recombinant and prior art EPO is identical. This clearly cannot be correct. The invention of a new process for producing a prior art product can be patentable, but it does not render product produced by the new process patentable unless there is some structural difference from the prior art, regardless of the commercial significance of the new process.
Roche also argued that certain claims were indefinite because "the breadth of the claim term ‘human erythropoietin’ makes it impossible to determine what is and what is not within the claim." Roche present expert testimony which opined that “the patent specification contemplates dozens of ‘polypeptides of the invention’ that fall within the scope of ‘human erythropoietin,’ including mutants, analog and allelic variants." However, the jury sided with Amgen, apparently crediting Amgen's expert, who testified that one of skill in the art would have understood the meaning of the term, and the court found this was enough to support the jury’s verdict.
Roche argued that the EPO claimed in the Amgen patents does not encompass pegylated EPO, and thus MIRCERA does not contain the claimed EPO. The court found that these assertions were inconsistent with Roche's own internal communications, and communications with FDA in connection with seeking regulatory approval for MIRCERA. Prior to litigation, Roche referred to the active ingredient in MIRCERA as “peg-EPO” in internal communications. In its biologic license application (BLA), submitted to FDA to gain approval to market a product in the US, Roche stated that pegylation did not alter the amino acid sequence or glycosylation of EPO.
While acknowledging structural differences between EPO and pegylated EPO, the court found these differences to be irrelevant because they did not affect the underlying amino acid sequence of the protein. According to the court, the only structural limitations set forth in Amgen's patent relate to amino acid sequence, and therefore attachment of other chemical groups to the amino acid sequence (i.e., post-translational modifications) are irrelevant to the question of infringement. The problem with this is that structural modifications to the amino acid chain were critical to the patentability of Amgen's recombinant EPO. The amino acid sequence of recombinant EPO was not novel, but inherently existed in the prior art EPO purified from human urine. In order to overcome this prior art, Amgen limited its EPO claims to EPO derived from cultured cells (i.e, recombinant EPO), which it argued had a different chemical structure than the prior art EPO. But these patentable differences did not reside in the amino acid sequence, but rather in the carbohydrate groups attached to the string of amino acids, i.e., the glycosylation pattern. I think the judge is confused when he states that the attachment of carbohydrate groups to the amino acid chain are irrelevant to infringement, when it is these very modifications that distinguish the patented recombinant EPO over the prior art.
Judge Young engages in some circular logic in his infringement analysis. He concedes that the source limitation in the claims (derived from cell culture) confers patentability because they result in a structural difference relative to the prior art. If recombinant EPO derived from cell culture had identical structure to the prior art EPO, then recombinant EPO would not be a novel chemical and would not be patentable as a product. However, he concludes that “the structural differences are merely evidence that the source limits the claim; they are not themselves limitations.” He concludes that once a determination has been made that a source limitation confers patentability, the issue of structure becomes immaterial. But he seems to forget that since this is a claim directed to the protein itself, not the process used to produce it, the source limitation is relevant only to the extent it serves as a proxy for a definition by structure.
Judge Young thought seriously about denying Amgen permanent injunctive relief, based on its initial view that the introduction of competition in the EPO market would benefit the public. Under the 2006 Supreme Court decision in eBay v. Mercexchange, the public interest is one of the four factors to be considered in weighing whether to grant a permanent injunction after infringement of a valid patent has been found. Nonetheless, he ultimately decided that entering a permanent injunction is the proper remedy under eBay.
The judge surveyed post-eBay case law and found it very rare for a court not to grant injunctive relief in cases where not granting the injunction would result in competition between the plaintiff and infringer.
He then found that the first three eBay factors strongly favored permanent injunctive relief for Amgen. In particular, he found that the entry of Roche in the EPO market would cause substantial market erosion and loss of revenue for Amgen, and could encourage other would-be infringers to attempt to gain access to the market. This would weaken Amgen's patents, which the court characterized as "the foundation of Amgen's business." He opined that the Amgen stock price would fall, along with its ability to attract investment and to engage in research and development.
Regarding the fourth eBay factor, Judge Young found that the public interest would not be disturbed by permanent injunction. He determined that Amgen would be able to adequately satisfy the current demand for EPO products, and that Roche had failed to adequately prove that MIRCERA offers significant clinical advantages over Amgen's products.
He also found that declining to enter injunctive relief would harm the public interest by weakening the patent system, which he characterized as critical for incentivizing the highly expensive and risky business of drug development.
Finally, he found that the competition Roche’s product would introduce into the EPO market would probably not result in any savings to the US consumer (or more particularly, to Medicare, which ultimately fits the bill for most EPO sold in the US). To the contrary, he concluded that it was not unlikely that the introduction of competition would actually result in higher prices, a counterintuitive conclusion that I discuss in more detail in an earlier post.
Judge Young concludes by noting that a modified injunction that he had originally considered, which would have in effect amounted to a compulsory license to Roche under terms dictated by the court, would be difficult to enforce and manage. Not only would it be difficult to set and monitor entry prices for MIRCERA, but the court would almost certainly be called on to monitor pricing and resolve disputes that would occur during the remaining life the patents. In short, the compulsory licensing scheme he considered would result in “needless, protracted involvement in the affairs of these two companies.”
Judge Young's View of PTO Operations
The judge expressed some cynicism regarding the functioning of the PTO, stating that it is an "indisputable fact" that the Office is "perennially underfunded and slow."