U.S. Supreme Court. Photo: Diego M. Radzinschi/NLJ

For two years, Amgen Inc. has argued that “shall means shall” – and that when the Biologics Price Competition and Innovation Act says biosimilar drug applicants “shall” engage in the so-called patent dance, failure to do so can be enforced by an injunction that blocks the launch of their product.

On Monday, Amgen finally found a court that agreed – kind of. The U.S. Supreme Court ruled that the patent dance might be mandatory, but that it’s up to state law to determine whether and how to enforce it. “The mandatory or conditional nature of the BPCIA’s requirements matters only for purposes of California’s unfair competition law, which penalizes ‘unlawful’ conduct,” Justice Clarence Thomas wrote for a unanimous court in Sandoz v. Amgen.

“Shall means shall, but only if state law tells us that,” said Finnegan, Henderson, Farabow, Garrett & Dunner partner Sanya Sukduang, who’s been following the case closely.

The upshot is continued uncertainty as to whether drug companies must comply with the patent dance, a complex series of disclosures between biosimilar makers and the manufacturer of the branded version, as spelled out in the 2010 BPCIA. Sandoz Inc. had argued that Amgen Inc.’s only remedy was a declaratory judgment action for patent infringement, while Amgen had been trying to enjoin Sandoz from launching its drug Zarxio, a biosimilar version of Amgen’s Neupogen.

Sukduang said his immediate reaction was that outcomes in BPCIA litigation could now vary from state to state. “I think at the end of the day people were looking to the Supreme Court for some certainty, and this decision doesn’t provide that,” Sukduang said.

Sukduang and another patent attorney in the life sciences space noted that the Supreme Court also cautioned that state law claims could be pre-empted by federal law. The other patent lawyer, who requested anonymity, said it might be a tall order to prove both that state law applies and that it isn’t pre-empted.

The BPCIA established a fast track for resolving patent claims surrounding biosimilar drugs. Amgen originally invoked the BPCIA and California’s unfair competition law three years ago when it accused Sandoz of refusing to engage in the patent dance before launching Zarxio. Judge Richard Seeborg dismissed the state law claim in 2015, and that issue lay dormant as the case wound through the Federal Circuit. New Supreme Court Justice Neil Gorsuch raised the state law issue during oral arguments in April.

The U.S. Court of Appeals for the Federal Circuit had ruled that the patent dance is optional for biosimilar makers, with the potential consequence being a declaratory judgment action. The Federal Circuit also ruled that the BPCIA’s requirement of 180 days’ notice prior to commercial launch did not start until a biosimilar maker gained U.S. Food and Drug Administration approval. Biosimilar makers complained that gave the branded drug makers – known as reference product sponsors – an additional six months of market exclusivity.

The Supreme Court disagreed with the Federal Circuit there too. “The applicant may provide notice either before or after receiving FDA approval,” Thomas held.

The overall decision looks like a win for Sandoz, which was represented before the Supreme Court by Morrison & Foerster partner Deanne Maynard and in the district court proceedings by a team led by partner Rachel Krevans.

Wilmer Cutler Pickering Hale and Dorr partner Seth Waxman represented Amgen at the Supreme Court, with Paul, Weiss, Rifkind, Wharton & Garrison partner Nicholas Groombridge arguing the appeal at the Federal Circuit.

Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.