Polsinelli
The Federal Circuit issued recent decisions in a couple of appeals which provide guidance on when international filers who submit abbreviated Biologics License Applications are subject to United States jurisdiction. The Federal Circuit ruled that international biosimilars are subject to US jurisdiction when they submit an aBLA intending to market their finished product in the forum.
1. Regeneron’s Patent Infringement Cases
The Plaintiff in each case is Regeneron Pharmaceuticals, Inc., who holds Biologics License Application No. 125387 for EYELEA(r), which is approved by the U.S. Food and Drug Administration (FDA) for the treatment of patients with angiogenic eye diseases–Wet Age-Related Macular Degeneration (AMD), Macular Edema following Retinal Vein Occlusion (RVO), Diabetic Macular Edema (DME) and Diabetic Retinopathy (DR)–via injection into the body of the eye.
Regeneron sued several companies, including Samsung Bioepis Co., Ltd. (SB) and Formycon AG (Formycon), that had filed aBLAs with the FDA seeking approval under the Biologics Price Competition and Innovation Act (BPCIA) to market EYLEA(r) biosimilars. The cases were consolidated at the U.S. District Court for the Northern District West Virginia. The district issued preliminary orders against Formycon and SB, prohibiting them from selling or offering for sale the products described in the aBLAs that have been approved by FDA. SB appealed the preliminary order on several grounds including that it was not under personal jurisdiction. This is the subject of this article.
2. SB’s Connections with the United States
SB, a biosimilar products company headquartered in Incheon (South Korea), is a South Korean biosimilar product company. SB argued that it does not have any facilities or employees in America, is not registered for business in West Virginia and has no registered agent there. It also said it does not do business in West Virginia. SB also claimed that it would sell its product to Biogen MA Inc., a U.S. firm, in a state outside of West Virginia but would not market, distribute or otherwise sell it in the United States.
3. Formycon’s Connections to the United States
Formycon is a biopharmaceutical company based in Bavaria, Germany. Formycon argued it had no “direct” connections to West Virginia, was not registered as a business there and did not have a registered agent; it also claimed it had no assets or employees in West Virginia. It also claimed that it contracted with packaging and manufacturers who would produce finished products and related materials elsewhere. Formycon argued further that it had developed the product pursuant an agreement with another German firm, and had no plans or rights for itself to commercialize the product within the United States. Instead, the product would be sold to another company for marketing and distribution, and Formycon would have no control over the selection of that company or its decisions regarding commercialization.
4. The Federal Circuit’s Jurisdictional Analysis
When determining if a defendant has personal jurisdiction in a state forum, the court considers (1) whether the state long-arm statute allows service of process; and (2) whether assertion of jurisdiction is inconsistent with due process as defined by the U.S. Constitution. In many states, including West Virginia, the long-arm statutes are “coextensive with the full reach of due process,” so the questions collapse into one constitutional inquiry.
Under the U.S. Constitution, a court in a state may exercise jurisdiction over a defendant that has sufficient “minimum contacts” with the state that it would not “offend traditional notions of fair play and substantial justice.” This standard requires that the defendant’s suit-related conduct create a “substantial connection” with the forum state. The standard is not always easy to apply in these cases because patent infringement actions based on aBLA filings are not easily comparable to other types or traditional patent infringement suits. Cir. Cir. 2016), which addressed the jurisdictional issue in the context a lawsuit arising from the filing of a Abbreviated New Drug Application. In Acorda the court held that planned future interactions with a state satisfied the “minimum contact” requirement. The submission of an ANDA with the intent to distribute the generic product in a state was held sufficient to support exercising jurisdiction.
Extending Acorda to aBLA cases, the Federal Circuit found similar evidence of conduct sufficient to exercise jurisdiction. Specifically as to SB, the court observed that SB had filed an aBLA; had served Regeneron with a Notice of Commercial Marketing, which communicates an intent to market upon FDA approval; had engaged various partners within the United States; and had entered into a nationwide distribution agreement with a U.S. company, through which SB retained “significant involvement” in commercialization activities.
Notwithstanding the apparent differences in involvement in commercialization activities, the Federal Circuit also found that Formycon intended to market the finished product in West Virginia and other states. The court cited Formycon’s filing of an aBLA, its service of Notice of Commercial Marketing and its partnership with U.S. firms to manufacture, package and brand the product. Although it had not yet entered into an agreement with a marketing partner, the court found Formycon intended to ultimately distribute the finished product nationwide.
Thus, filing an aBLA, providing Notice of Commercial Marketing, and having more than speculative plans to market the finished product throughout the United States appears sufficient to subject an international biosimilar company to jurisdiction in any state having a long-arm statute coextensive with the U.S. Constitution. The stronger the link between commercialization plans and jurisdiction, the stronger the argument for jurisdiction. However, these factors do not appear to play a significant role at first in the analysis. Guidance for International Biosimilars Companies
International biosimilars companies that file aBLAs in the United States with plans to market the finished product should expect a high likelihood of being subject to jurisdiction for related patent infringement cases. Some steps may mitigate the risk, however, and increase the likelihood of avoiding jurisdiction:
Reduce contact with the United States as much as possible. For example, perform all development, sourcing, manufacturing, packaging and labeling outside the United States.
Introduce layers between the aBLA filer and the ultimate marketer. The aBLA filing company may contract with international companies who, in turn contract with a US marketing partner. It may be helpful to exclude certain states. If there are states in which the international biosimilar company does not want to be subject to jurisdiction, expressly exclude those states from commercialization agreements.
- These and other factors can significantly affect whether a company is ultimately subject to jurisdiction in the United States, and similar considerations may affect other partners in the international supply chain.
