Court Dismisses Biosimilar Petitioner's IPR Appeal For Lack of Standing

01 March 2019 PTAB Trial Insights Blog

In Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., the Federal Circuit dismissed Momenta’s appeal from an adverse IPR decision for lack of standing after Momenta suspended its potentially infringing biosimilar development activity.  Although Momenta had been pursuing such activity when appellate proceedings began, the court dismissed the appeal for mootness/lack of standing because Momenta had ceased its development program and “no concrete plans [were] afoot” implicating the patent claims challenged in the underlying IPR.[1]

Momenta’s Procedural Evolution

In July 2015, Momenta petitioned the PTO for inter partes review of all claims in Bristol-Myers Squibb’s U.S. Patent No. 8,476,239. The ‘239 Patent covers fluid formulations of CTLA4Ig, the active immunosuppressive agent in BMS’s rheumatoid arthritis treatment ORENCIA®. Following IPR proceedings, the PTAB sustained patentability of all claims in the ‘239 Patent.[2] Momenta appealed the Board’s Final Written Decision to the Federal Circuit, under 35 U.S.C. § 319.[3] Highlights from the appeal’s procedural evolution are summarized below:

  • When Momenta petitioned for IPR in 2015, it was developing its ORENCIA® biosimilar in collaboration with Mylan N.V.
  • However, when Momenta appealed the PTAB’s decision in 2017, its proposed biosimilar product had failed Phase 1 clinical trials. BMS moved to dismiss for lack of standing because Momenta had not filed a Biologics License Application at the FDA and had publicly stated that development would proceed regardless of the outcome on appeal.[4]
  • On September 19, 2017, Momenta responded that it had standing because (1) it had invested “millions of dollars” into developing a formulation that potentially infringed the ‘239 Patent, (2) was forced to adjust its business strategy, and (3) was injured-in-fact by the AIA estoppel provisions of § 315(e).[5]
  • On October 1, 2018, Momenta filed a letter with the court including a press release announcing that “[t]he Company has initiated discussions with its collaboration partner, Mylan, to exit its participation in the development of … M834, a proposed biosimilar to ORENCIA® ….”[6]
  • On October 23, 2018, the court issued an Order to Show Cause why the appeal should not be dismissed as moot. Momenta responded, citing its joint responsibility with Mylan for substantial product development costs and its potential right to royalties from Mylan should the product be developed.[7]
  • On December 10, 2018, BMS filed a letter including documents that Momenta had filed four days earlier with the SEC, which stated:

We have elected to terminate our collaboration agreement with Mylan with respect to the development of … M834, a proposed biosimilar to ORENCIA® …. On November 19, 2018, we delivered a formal notice of this partial termination to Mylan, as provided in the collaboration agreement.[8]

Momenta neither responded nor withdrew its appeal.

The Federal Circuit’s Holding

The Federal Circuit dismissed the appeal, holding that Momenta lacked standing, despite pursuing infringing activity when the proceedings began.

[E]ven though Momenta may have been working in pursuit of potentially infringing activity, it is established that jurisdiction must exist throughout the judicial review, and an intervening abandonment of the controversy produces loss of jurisdiction.[9]

According to the court, “In essence, ‘mootness is the doctrine of standing set in a time frame; that is, the requisite personal interest that must exist at the time of commencement of the litigation (standing) must continue throughout its existence (mootness).’”[10] Given that Momenta had ceased the ORENCIA® biosimilar development program, the court concluded there was no potential for injury, “thereby mooting the inquiry.”[11]

Momenta did not persuade the court that it had standing based on lost possible future royalties, should Mylan eventually develop an ORENCIA® biosimilar product.[12] Instead, the court agreed with BMS that “possible future royalty … is too speculative to support standing,”[13] especially when such injury is based on “the unfettered choices made by independent actors not before the court.”[14]

Without deciding the issue, the Federal Circuit also dismissed Momenta’s argument that the AIA’s estoppel provision independently supports Article III standing. (Under 35 U.S.C. § 315(e), IPR petitioners are estopped from later raising before the PTO, a U.S. district court, or the ITC any ground of invalidity that the petitioner “raised or reasonably could have raised” during the IPR.) As the court stated, “[E]stoppel of Momenta is irrelevant now that Momenta has ‘exited’ its development of the Orencia® product.  Estoppel cannot constitute an injury-in-fact when Momenta ‘is not engaged in any activity that would give rise to a possible infringement suit.’”[15]

Another Precedent in the Federal Circuit’s Standing Jurisprudence

This case adds a new piece to the Federal Circuit’s recent jurisprudence on Article III standing in IPR appeals. Judge Newman contrasted Momenta’s circumstances to those of the petitioner in E.I. DuPont de Nemours & Co. v. Synvina C.V., where the Federal Circuit found DuPont satisfied “the irreducible constitutional minimum of standing.”[16] DuPont, a direct competitor of Synvina, built and operated a demonstration plant to produce furan dicarboxylic acid (FDCA), implicating patent claims challenged in the underlying IPR proceedings.  According to the court, DuPont’s endeavors evidenced “concrete plans” for present and “future activity that create a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.”[17] DuPont’s ongoing, potentially infringing activity was sufficient to underwrite standing throughout the appeal.

Previously, we reported on JTEKT Corp. v. GKN Automotive Ltd., where the Federal Circuit held that the petitioner lacked standing to appeal an adverse IPR decision. According to the court in that case, the petitioner lacked a final product design that could support an infringement analysis for its drivetrain concept and therefore could not demonstrate “concrete plans for future activity” that posed substantial future infringement risk.[18] Unlike JTEKT, Momenta satisfied the Article III standing requirements when it first appealed to the Federal Circuit, but it did not maintain standing throughout appellate proceedings like DuPont.

The takeaway here is that potentially infringing activity must persist throughout an appeal to support Article III standing and avoid dismissal for mootness.  Petitioners who appeal adverse IPR decisions should be mindful that abandoning potentially infringing activity (or making public statements indicating such abandonment) may trigger dual risks: dismissal at the Federal Circuit, to go along with estoppel under the AIA.[19]

[1] Momenta Pharm., Inc. v. Bristol-Myers Squibb Co., No. 2017-1694, 2019 WL 470177, at *4 (Fed. Cir. Feb. 7, 2019).

[2] See Momenta Pharm., Inc. v. Bristol-Myers Squibb Co., IPR2015-01537, 2016 WL 7987985 (P.T.A.B. Dec. 22, 2016).

[3] “A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.” 35 U.S.C. § 319; see also § 141(c).

[4] Brief for Respondent at 3, Momenta, 2019 WL 470177 (Fed. Cir. filed Sept. 12, 2017).

[5] Reply Brief for Appellant at 19, Momenta, 2019 WL 470177 (Fed. Cir. filed Sept. 19, 2017).

[6] Momenta, 2019 WL 470177, at *1.

[7] See id. at *2.

[8] Id.

[9] Id. at *4.

[10] Id. at *5 (quoting Milwaukee Police Ass’n v. Bd. of Fire & Police Comm’rs, 708 F.3d 921, 929 (7th Cir. 2013)).

[11] Id.

[12] Id. at *4.

[13] Id. at *2 (citing Clapper v. Amnesty Int’l USA, 568 U.S. 398, 402, 409 (2013) (“[W]e have repeatedly reiterated that ‘threatened injury must be certainly impending to constitute injury in fact,’ and that ‘[a]llegations of possible future injury’ are not sufficient.”).

[14] Id. at *4 (quoting Clapper, 568 U.S. at 414 n.5).

[15] Id. (quoting Consumer Watchdog v. Wis. Alumni Res. Found., 753 F.3d 1258, 1262 (Fed. Cir. 2014)).

[16] 904 F.3d 996, 1004 (Fed. Cir. 2018) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)).

[17] Id. at 1005.

[18] JTEKT Corp. v. GKN Auto. Ltd., 898 F.3d 1217, 1221 (Fed. Cir. 2018).

[19] We note here that JTEKT has petitioned the United States Supreme Court for certiorari to review the Federal Circuit’s decision. One question presented is whether the Federal Circuit can refuse to hear an appeal from an adverse final decision in an IPR when Congress has created the AIA estoppel provisions (i.e., whether the AIA estoppel provisions independently create injury-in-fact). See Petition for Writ of Certiorari, JTEKT Corp. v. GKN Auto. Ltd., No. 18-750 (Dec. 12, 2018). Stay tuned for further developments on this important issue.

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