Federal Circuit Finds No Common Ownership Where Not All Substantial Rights Are Transferred to Exclusive Licensee

In Immunex Corp. v. Sandoz Inc., No. 2020-1037 (Fed. Cir. July 1, 2020), the Federal Circuit affirmed the district court’s holding that Sandoz failed to prove invalidity of the patents-in-suit.

Sandoz filed an abbreviated Biologics License Application, seeking approval to market a biosimilar version of Immunex’s biologic drug, Enbrel®, which is covered by the patents in suit. 

Patent owner Hoffmann-La Roche Inc. (“Roche”), its exclusive licensee Immunex Corp., and exclusive sublicensee Amgen Manufacturing, Ltd., initiated an infringement action against Sandoz pursuant to the Biologics Price Competition and Innovation Act (“BPCIA”). Sandoz did not dispute patent infringement, but raised three grounds of invalidity, which it raised again on appeal.

On appeal, Sandoz argued the patents-in-suit were invalid for (1) obviousness-type double patenting; (2) failure to meet the written description requirement of pre-AIA 35 U.S.C.  § 112; and (3) obviousness under pre-AIA 35 U.S.C. § 103.

In determining that ODP  did not apply, the Court determined that Immunex and Roche did not “commonly own” the patents-in-suit. This issue turned on whether an Accord & Satisfaction agreement entered into by Roche and Immunex was a licensing agreement or an effective assignment of all substantial rights. The Court reasoned that “where one of the rights transferred is the right to prosecute the patent at issue, identification of the effective ‘patentee’ is informative in evaluating whether the patents are ‘commonly owned’ for purposes of obviousness-type double patenting.” Slip op. at 14.

The Court concluded that the enforcement and alienation rights under the Accord & Satisfaction—particularly Roche’s secondary right to sue, which when vested, triggers Roche’s exclusive right to rectify infringement-—made clear that Roche did not transfer all substantial rights in the patents-at-issue to Immunex. Therefore, the Court held that the Immunex patents and patents-in-suit were not “commonly owned” and obviousness-type double patenting did not apply.

On the issue of written description, the Court affirmed the district court’s finding that the priority application disclosed and demonstrated possession of the full length DNA sequence that was the subject of the patents-in-suit as supported by the as-filed specification.

Finally, on the issue of obviousness, Sandoz argued that the district court improperly focused on therapeutic effects of the claimed invention rather than the objective reach of the claims in determining motivation to combine. The Court concluded that the district court’s analysis was not legally erroneous because the treatment of illnesses was a stated objective of the claimed invention, arguments at trial were focused on therapeutic effects of the claimed invention, and at least two of the asserted claims were directed to pharmaceutical compositions. The Court further found that Sandoz failed to rebut the presumption of nexus between the claimed invention and the various objective indicia of obviousness.

Judge Reyna dissented on the issue of ODP, finding that the Accord & Satisfaction amounted to an assignment of the patents-in-suit to Immunex, making Immunex a common owner for obviousness-type double patenting purposes.