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Celltrion Healthcare Co., Ltd. v. Kennedy Trust for Rheumatology Research

United States District Court, S.D. New York

December 1, 2014

CELLTRION HEALTHCARE CO., LTD. and CELLTRION, INC., Plaintiffs,
v.
KENNEDY TRUST FOR RHEUMATOLOGY RESEARCH, Defendant.

OPINION & ORDER

PAULA. CROTTY, District Judge.

Plaintiffs Celltrion Healthcare Co, Ltd. and Celltrion Inc. (collectively, "Celltrion" or "Plaintiffs") bring this action against Defendant Kennedy Trust for Rheumatology Research ("Kennedy") for a declaratory judgment that three patents held by Kennedy are invalid because of improper tactics used by Kennedy to obtain the patents. Celltrion seeks this declaration to enable its biosimilar drug Remsirna to enter the United States market. Defendants move to dismiss the complaint for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1); or for a stay pending the outcome of reexamination/reissue proceedings by the U.S. Patent and Trademark Office ("PTO"). For the reasons that follow, Defendant's motion to dismiss is granted.

BACKGROUND

A. The Parties

i. Kennedy

Kennedy, "the pioneer in the discovery of methods of treating patients with rheumatoid arthritis ("RA") and other auto-immune diseases, " owns the three patents at issue in this litigation: U.S. Patent Nos. 7, 846, 442 (the "'442 patent"), 8, 298, 537 (the "'537 patent"), and 8, 383, 120 (the "'120 patent"). Defendant Kennedy Trust's Memorandum in Support of its Motion to Dismiss Plaintiff Celltrion's Complaint for Lack of Subject Matter Jurisdiction Pursuant to Fed.R.Civ.P. 12(b)(1) ("Def. Mem:), at 5, 6. These patents cover methods of treating rheumatoid arthritis "by administering a combination of an anti-TNFa antibody (such as Remicade ®) and the known rheumatoid arthritis drug methotrexate." Complaint for Declaratory Judgment ("Compl."), at ¶ 4. In 1998, Janssen Biotech, Inc. ("Janssen"), a licensee of Kennedy, received FDA approval for its drug infliximab, which contains the monoclonal antibody cA2, under the trademark Remicade. Def. Mein. at 7-8. Originally, the FDA approved Remicade to treat Crohn's disease; in later years, Remicade was approved for the treatment of RA, ulcerative colitis, ankylosing spondylitis, psoriatic arthritis, and plaque psoriasis. Id. at 8.

ii. Celltrion

Celltrion, a biopharmaceutical company that specializes in developing biosimilars, [1] has spent several years, and large sums of money, developing Remsima, a biosimilar version of Remicade. Compl. ¶ ¶ 19-22. Celltrion began developing Remsima in 2008 and has invested more than $112 million in the process. Id. ¶ 19. In 2010, Celltrion applied for and received approval from multiple countries to begin clinical trials for Remsima. Id. ¶ 25. Remsima has since been approved in 47 nations, and approval is pending in 23 other countries. Id. ¶29. Celltrion began the process of obtaining FDA approval to market Remsima in the U.S. on July 10, 2013, when Celltrion met with FDA representatives to receive guidance on additional studies needed. Id. ¶ 31. At that meeting, the FDA recommended a short follow-up clinical trial. Id. ¶ 32. Celltrion successfully completed this trial, a bridging study comparing Remsima with Remicade sourced from the E.U. and the U.S., in March 2014. Id. Meanwhile, Celltrion submitted an Investigational New Drug ("IND") application pursuant to section 505(i) of the Federal Food, Drug, and Cosmetic Act on October 2, 2013, and the FDA accepted it on November 18, 2013. Id. ¶31. Celltrion has scheduled a final meeting with the FDA, during which Celltrion plans to finalize the specifics of its application, and Celltrion anticipates that the FDA will approve Remsima for RA treatment in the first quarter of 2015. Id. ¶ 33.[2] The patents at issue are currently under reexamination and reissue proceedings before the PTO. Compl.¶¶ 41, 42, 44.

B. The Biologics Price Competition and Innovation Act

Congress passed the Biologics Price Competition and Innovation Act (the "BPCIA") in 2009. See 42 U.S.C. § 262. The BPCIA provides a statutory framework under which biologics manufacturers may apply for, and obtain, a license by showing its product is a biosimilar to another product, known as the "reference product." Id . § 262(i)(2), (k). This provides a quicker and less expensive pathway for biosirnilar manufacturers to obtain FDA approval for products with "no clinically meaningful differences" from the reference product. Id . § 262(i)(2)(B). The reference product receives exclusivity for a period of twelve years. Id . § 262(k)(7)(A).

The BPCIA contains a dispute resolution mechanism in order to ensure that patent disputes are resolved prior to the end of the reference product's exclusivity period. Pl. Mem. at 3. Through this process, the BPCIA ripens otherwise unripe patent disputes and provides a pathway for the resolution of these disputes before the exclusivity period tei ininates, enabling biosimilar products to enter the market promptly upon the expiration of exclusivity. Id. Pursuant to this process, the applicant provides a copy of its application to the reference product sponsor within twenty days after the application is accepted for review. 42 U.S.C. § 262(1)(2). Within sixty days of receipt of this application, the reference product sponsor is to respond, identifying patents for which an infringement claim "could reasonably be asserted." Id . § 262(1)(3)(A)(i). The parties then negotiate these claims in good faith and if, after fifteen days of negotiations, the parties have not reached an agreement, the reference product sponsor may then bring an action for patent infringement. Id . § 262(1)(6)(B). The applicant must also provide to the reference product sponsor a notice of commercial marketing no later than 180 days before marketing of the biosimilar is to commence, at which time the reference product sponsor may seek a preliminary injunction against the applicant. Id . § 262(1)(8)(A). Neither party may bring a declaratory judgment action while the process is under way; if the applicant fails to comply with these procedures, the reference product sponsor may bring a declaratory judgment action, but the applicant may not. Id . § 262(9)(A), (B). The BPCIA addresses the role of patent owners in the provision discussing recipients of confidential information; the Act provides that "[a] representative of the owner of a patent exclusively licensed to a reference product sponsor with respect to the reference product and who has retained a right to assert the patent or participate in litigation concerning the patent may be provided the confidential information, provided that the representative informs the reference product sponsor and the... applicant of... [its] agreement to be subject to the confidentiality provisions" of the Act. Id . § 262(l)(I)(B)(ii).

DISCUSSION

A. Applicable Law

Article III of the Constitution and the Declaratory Judgment Act impose the additional jurisdictional requirement of an actual controversy. See Nike, Inc. v. Already, LLC, 663 F.3d 89, 95 (2d Cir. 2011). The Act provides that "[i]n a case of actual controversy, " a federal court "may declare the rights... of any interested party seeking such declaration." 28 U.S.C. § 2201(a). The Second Circuit applies a totality-of-the-circumstances test to determine the existence of a justiciable controversy in intellectual property cases. See Nike, 663 F.3d at 95 (citing MedImrnune, Inc. v. Genentech, Inc., 549 U.S. 118, 126-27 (2007)). Under this test, the court considers whether "the adversity of legal interests that exists between the parties is real and substantial and admits of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be on a hypothetical state of facts." Id. at 95-96 (citing Medimmune, 549 U.S. at 127) (internal quotation marks and alterations omitted); Telebrands Corp. v. Exceptional Prods., 2011 ESL 6029402, at *2 (D.N.J. Dec. 5, 2011) ("[T]he Court must decide 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.' (quoting Medlmmune, 549 U.S. ...


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