AMGEN, INC., Plaintiff, V. F. HOFFMANN–LA ROCHE LTD., Roche Diagnostics Gmbh, and Hoff

160 581 FEDERAL SUPPLEMENT, 2d SERIES

patenting subtle variations of the same AMGEN, INC., Plaintiff, device. 35 U.S.C.A. § 102. v. See publication Words and Phras- es for other judicial constructions F. HOFFMANN–LA ROCHE LTD., and definitions. Roche Diagnostics GmbH, and Hoff- mann–La Roche Inc., Defendants. 2. Patents O120 Civil Action No. 05–12237–WGY. An obviousness double patenting United States District Court, (ODP) inquiry is comprised of two steps: D. Massachusetts. first, as a matter of law, a court construes the claim in the earlier patent and the Oct. 2, 2008. claim in the later patent and determines Background: Patentee brought infringe- the differences, and second, the court de- ment action against competitor alleging termines whether the differences in sub- infringement of patents related to recom- ject matter between the two claims render binant erythropoietin (EPO), a naturally the claims patentably distinct. 35 occurring protein that stimulates the pro- U.S.C.A. § 102. duction of red blood cells. Following jury verdict in favor of patentee, patentee 3. Patents O120 sought entry of injunction to restrain fu- Defendants who seek to invalidate a ture infringement. The District Court en- particular claim via obviousness double tered preliminary injunction. Competitor patenting (ODP) must prove by clear and appealed. While appeal was pending, pat- convincing evidence that the original claim entee sought permanent injunction. and the allegedly duplicative claim are not Holdings: The District Court, William G. patentably distinct. 35 U.S.C.A. § 102. Young, J., held that: (1) patent for EPO production was not 4. Patents O120 invalid as anticipated by prior patent; Where the metes and bounds are dis- (2) patentee’s defense against obviousness cernable from the face of the patent claim, double patenting (ODP) allegations the obviousness double patenting (ODP) were not barred by judicial estoppel; inquiry focuses on what is claimed without (3) competitor was not entitled to new trial reference to the disclosure. 35 U.S.C.A. based on invalidity of patent; § 102. (4) patent was not invalid based on indefi- 5. Patents O120 niteness; There are two ways that a court can (5) jury’s finding that accused product in- conduct the obviousness double patenting fringed patent claim was supported by (ODP) analysis in a patent infringement sufficient evidence; and action; in most cases, courts employ a (6) entry of permanent injunction would ‘‘one-way’’ test where the court compares moot appeal of preliminary injunction. the claims according to the order in which Ordered accordingly. the patents issued.

1. Patents O120 6. Patents O120 ‘‘Obviousness double patenting’’ A later patent claim that is not patent- (ODP) is a judicially devised species of ably distinct from an earlier claim in a obviousness that prevents inventors from commonly owned patent is invalid for obvi- over-extending the term of exclusivity by ous-type double patenting. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 161 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

7. Patents O120 not publicly disclosed or available, and as If the scope of the patent application far as ordinarily skilled artisan at the time and the patent claims are not identical, the was concerned, there was no recombinant court must ask whether the later patent’s erythropoietin. 35 U.S.C.A. §§ 102, 121. claim defines merely an obvious variation of the earlier patent’s claim, when conduct- 11. Patents O120 ing an obviousness double patenting (ODP) Obviousness-type double patenting analysis. (ODP) rejections are based on the premise that an applicant is claiming no more than 8. Patents O120 an obvious variation, which would be obvi- The two-way test to determine obvious to anyone of ordinary skill in the art, ousness double patenting (ODP) must be of an invention on which a patent has used if: (1) the patent applicant could not already been granted. have filed both claims together in the earlier-filed application, and (2) the applicant 12. Patents O120 did not cause the later filed claim to issue When performing obviousness double first by delaying examination of the earli- patenting (ODP) analysis, patent claims er-filed claim during the period when both are looked to only to see what has been applications were pending before the Pat- patented, the subject matter which has ent and Trademark Office (PTO), the ‘‘co- been protected, not for something one may pendency period’’. find to be disclosed by reading them. 9. Patents O120 13. Patents O120 Later filed patent for erythropoietin purification disclosed follow-on invention Patentee was entitled to protection that issued after underlying claims due to under safe harbor provision, and thus restriction order imposed by Patent and claims in patent related to recombinant Trademark Office (PTO) on application, erythropoietin (EPO) were immune from and thus two-way test to determine obvi- obviousness double patenting (ODP) rejec- ousness double patenting (ODP) applied in tion; follow-up patent applications were patentee’s infringement action; it was im- filed as result of Patent and Trademark possible for patentee to have filed claim of Office (PTO) restriction requirement, and later patent as part of application, and patentee complied with restriction require- patentee did not delay examination of ear- ments. 35 U.S.C.A. § 121. lier filed application during co-pendency 14. Patents O120 period or cause later filed patent to issue Claims in a divisional patent applica- before patents in suit. 35 U.S.C.A. tion are only immune from an obviousness- §§ 120, 121. type double patenting (ODP) rejection 10. Patents O120 when strict consonance exists between the Claim in follow-up patent which de- earlier restriction requirement and the scribed specific seven step process for pu- claims later prosecuted. 35 U.S.C.A. rifying recombinant erythropoietin (EPO) § 121. and underlying claims in patent related to recombinant erythropoietin (EPO), were 15. Patents O110 not identical in scope, and thus underlying Consonance requires that the line of patent for EPO production was not invalid demarcation between the independent and for obviousness double patenting (ODP); distinct inventions that prompted the Pat- patent was not prior art, applications were ent and Trademark Office (PTO) restric- 162 581 FEDERAL SUPPLEMENT, 2d SERIES

tion requirement be maintained; where produce glycosylated polypeptide having that line is crossed the safe harbor provi- specified characteristics. 35 U.S.C.A. sion does not apply. 35 U.S.C.A. § 121. § 121. 16. Patents O110 21. Patents O120 New or amended claims in a divisional patent application are entitled to the bene- The second step in the obviousness fit of the safe harbor provision if the double patenting (ODP) analysis, after claims do not cross the line of demarcation identifying the differences between the drawn around the invention elected in the claims at issue, is to determine whether restriction requirement. 35 U.S.C.A. those differences in subject matter render § 121. the later-issued claim patentably distinct from the earlier-issued claim. 17. Patents O120 Determining what is patented by cor- 22. Patents O120 rect claim interpretation is essential to the determination of obviousness-type double A later-claimed invention is patent- patenting (ODP) issues. ably distinct, and therefore not invalid for obviousness double patenting (ODP), if 18. Patents O314(5) that invention as a whole would not have It is the Court’s role, not the jury’s, to been obvious over the earlier-claimed in- determine the metes and bounds of the vention to a person of ordinary skill in the claimed inventions in a patent infringe- art at the time just before the later- ment action. claimed invention was made. 19. Patents O120 When a patent claim is not immunized 23. Estoppel O68(2) from allegations of obviousness-type dou- ‘‘Judicial estoppel doctrine’’ prevents a ble-patenting (ODP) due to the safe harbor litigant from pressing a claim that is incon- provision, the question becomes whether sistent with a position taken by that liti- the defendant has met its burden of prov- gant either in a prior legal proceeding or ing the ODP defense; as with other affir- in an earlier phase of the same legal pro- mative defenses of invalidity, the defen- ceeding. dant bears the burden of proving ODP by See publication Words and Phras- clear and convincing evidence. 35 es for other judicial constructions U.S.C.A. § 121. and definitions. 20. Patents O66(1.12) 24. Estoppel O68(2) Patentable differences existed between prior patent for DNA sequences Primary purpose of the doctrine of encoding erythropoietin and patent for judicial estoppel is to safeguard the integ- production of recombinant erythropoietin rity of the courts by preventing parties (EPO), and thus patent for recombinant from manipulating the machinery of the EPO production was not invalid as antici- judicial system. pated by prior patent; claims in prior pat- 25. Estoppel O68(2) ent were directed to purified and isolated DNA sequences and cells into which such Judicial estoppel applies to arguments DNA sequences had been introduced, and positions presented to the Patent and while claims in patent at issue were pro- Trademark Office (PTO) from which the cess claims that recited steps required to patentee gained a benefit. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 163 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

26. Estoppel O68(2) 30. Patents O155 Two requirements must be satisfied in Terminal disclaimers are used to over- order to invoke judicial estoppel: first, the come double patenting rejections. 35 prior position must be directly inconsistent U.S.C.A. § 121. with the present position, and second, the responsible party must have succeeded in 31. Federal Civil Procedure O2608.1 persuading a court to accept its prior posi- District courts may set aside a jury’s tion. verdict only if it is so clearly against the weight of the evidence as to amount to a 27. Estoppel O68(2) manifest miscarriage of justice. Fed. Patentee did not take inconsistent po- Rules Civ.Proc.Rule 50(a)(1), 28 U.S.C.A. sition regarding patents related to recombinant erythropoietin (EPO), a naturally 32. Patents O72(1) occurring protein that stimulates the pro- A patent claim is anticipated if every duction of red blood cells, to Patent and limitation is present in a single device in Trademark Office (PTO) during prosecu- the prior art. tion and court during patent infringement action, as required for patentee’s defense 33. Patents O101(6) against obviousness double patenting The touchstone of the definiteness re- (ODP) allegations in patent infringement quirement is whether a person having or- action to be barred by judicial estoppel. dinary skill in the art at the time of the 28. Patents O110 patent application would be able to discern Patents related to recombinant eryth- the scope of the claim. 32 U.S.C.A. § 112. ropoietin (EPO), a naturally occurring pro- 34. Patents O66(1.12) tein that stimulates the production of red blood cells, were issued as the result of Claim in patent related to recombi- restriction requirement issued by Patent nant erythropoietin (EPO), a naturally oc- and Trademark Office (PTO) and main- curring protein that stimulates production tained consonance with that restriction re- of red blood cell, was not invalid as antici- quirement, and thus patents were protect- pated by prior art; during claim construc- ed under safe harbor provision. 35 tion, court determined that term ‘‘purified U.S.C.A. § 121. from mammalian cells grown in culture’’ limited claim, EPO used in prior art study 29. Patents O120 was purified from human urine, source Previously issued patents related to limitation claim was entitled to presump- recombinant erythropoietin (EPO), a natu- tion of validity, and competitor failed to rally occurring protein that stimulates the rebut presumption. 35 U.S.C.A. §§ 112, production of red blood cells, were issued 282; Fed.Rules Evid.Rule 301, 28 U.S.C.A.; from applications filed as result of restric- Fed.Rules Civ.Proc.Rule 59(a)(1), 28 tion requirement issued by Patent and U.S.C.A. Trademark Office (PTO) and did not share subject matter with later filed patents, and 35. Patents O314(5) thus prior patents were immunized as pri- Requiring a patentee to prove to a or art, as required for later filed patents to jury that a source limits a claim inverts the be invalid for obviousness double patenting role of judge and fact-finder during trial in (ODP). 35 U.S.C.A. § 121. patent litigation. 164 581 FEDERAL SUPPLEMENT, 2d SERIES

36. Patents O314(5) 41. Patents O226.6 Certain issues subsumed in patent In order to prove patent infringement, claim construction questions resemble a plaintiff must demonstrate that an ac- questions of fact; but the mere fact the cused device embodies all limitations of the issue requires a court to make credibility claim either literally or by the doctrine of determinations does not mean that those equivalents. questions must be submitted to a jury. 37. Patents O112.1 42. Patents O239 In patent cases, the respect due to Where a product embodies all patent patent, the presumptions that all the pre- limitations, merely adding elements to an ceding steps required by the law had been otherwise infringing device will not enable observed before its issue, the immense im- the infringer to escape liability. portance and necessity of the stability of titles dependent upon these official instru- 43. Patents O250 ments, demand that the effort to set them Accused product contained erythro- aside, to annual them, or to correct mis- poietin (EPO), a naturally occurring pro- takes in them, should only be successful tein that stimulates the production of red when the allegations on which this is at- blood cells, and thus infringed patents re- tempted are clearly stated, and fully sus- lating to recombinant erythropoietin tained by proof. 35 U.S.C.A. § 282. (EPO); claim construction made clear that 38. Patents O72(1) focus of claim element was amino acid Invalidity of patent based on anticipa- sequence, and competitor failed to produce tion requires that the identical invention evidence that pegylation process used in was known or its existence would reason- accused product altered EPO’s amino acid ably have been known to a person of ordi- sequence. nary skill in the field. 35 U.S.C.A. § 102. 44. Patents O239 39. Patents O312(6) It is fundamental that one cannot Evidence at patent infringement trial avoid patent infringement merely by add- established that patent related to recombi- ing elements if each element recited in the nant erythropoietin (EPO), a naturally oc- claims is found in the accused device. curring protein that stimulates the production of red blood cells, was not invalid 45. Patents O226.6 based on indefiniteness; credible expert A plaintiff alleging patent infringe- testimony suggested that term ‘‘human er- ment must prove all elements, including ythropoietin’’ was as exacting as could source and process limitations. have been expected given state of scientific knowledge at time. 35 U.S.C.A. § 112. 46. Federal Civil Procedure O2651.1 40. Patents O101(6), 112.5 The mere fact that a jury verdict Plaintiffs seeking to invalidate a pat- could, in theory, appear to be inconsistent ent for indefiniteness face a difficult bur- with a grant of summary judgment does den; not only must they prove their claims not require a court to reconsider its pre- by clear and convincing evidence, the de- trial ruling because the determinations are gree of definiteness required for a given made on different records at different claim varies depending upon the state of stages of the litigation and according to the art. different legal standards. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 165 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

47. Patents O312(6) damages were inadequate, and balance of Jury’s finding that accused product hardships favored patentee, as required containing pegylation erythropoietin for permanent injunction; value of patents (EPO) infringed claim in patent related to would be greatly diminished by competi- recombinant EPO, a naturally occurring tor’s entry into market. protein that stimulates the production of red blood cells, was supported by sufficient 52. Patents O317 evidence and was proper as matter of law; Public interest would not be disserved patentee offered evidence that pegylation by a permanent injunction prohibiting used in accused product did not alter ami- competitor’s entry into market for recom- no acid sequence of epoetin beta, and pat- binant erythropoietin (EPO), a naturally ent’s focus was glycoprotein’s amino acid occurring protein that stimulates the pro- sequence. duction of red blood cells, as required for 48. Patents O226.6 permanent injunction in patent infringe- Infringement liability is found where ment action, although some patients might an accused device falls precisely within the benefit from availability of competitor’s scope of a claim as delineated by the limi- product in market; accused product did not tations. offer significant clinical advantages over patented product, competitor’s product 49. Patents O317 would not reduce Medicare costs, failure to A party seeking a permanent injunc- enter permanent injunction would risk un- tion following a judgment of patent in- dermining incentives for innovation that fringement must demonstrate: (1) that it have produced medical advances that ex- has suffered an irreparable injury, (2) that tend and enhance the value of life. remedies available at law, such as monetary damages, are inadequate to compen- 53. Constitutional Law O2558 sate for injury, (3) that, considering the Separation of powers considerations balance of hardships between the parties, a dictate that, absent a strong showing that remedy in equity is warranted, and (4) the government is being fleeced, courts that the public interest would not be dis- should proceed with caution before at- served by a permanent injunction. tempting to intervene on Medicare’s be- 50. Patents O191 half. ‘‘Patent trolls’’ are non-practicing enti- 54. Patents 317 ties who do not manufacture products, but O instead hold patents, which they license Entry of permanent injunction prohib- and enforce against alleged infringers. iting competitor’s future infringement of See publication Words and Phras- patents related to recombinant erythro- es for other judicial constructions poietin (EPO), a naturally occurring pro- and definitions. tein that stimulates the production of red 51. Patents O317 blood cells, would moot appeal of prelimi- Failure to enter permanent injunction nary injunction to Court of Appeals in prohibiting competitor’s future infringe- patent infringement action, and thus dis- ment of patents related to recombinant trict court would not enter permanent in- erythropoietin (EPO), a naturally occur- junction while appeal was pending, al- ring protein that stimulates the production though injunction was warranted based on of red blood cells, would result in irrepara- injury to patentee and balance of hard- ble harm to patentee for which monetary ships. 166 581 FEDERAL SUPPLEMENT, 2d SERIES

Patents O328(2) ford, Amgen Inc., Thousand Oaks, CA, 3,623,712, 4,047,496, 4,667,016, 4,703,- William Diaz, McDermott Will & Emery 008. Cited. LLP, Irvine, CA, for Plaintiff. Patents O328(2) Aaron Stiefel, Alfred H. Heckel, Chris- 5,441,868, 5,547,933, 5,618,698, 5,756,- topher T. Jagoe, Sr., Howard Suh, Jeanna 349, 5,955,422. Valid and Infringed. Wacker, Krista M. Rycroft, Leora Ben– Ami, Manvin Mayell, Matthew McFarlane, Patents O328(2) Monica Contreras, Patricia A. Carson, Pe- 5,621,080. Infringed. ter Fratangelo, Richard A. De Sevo, Thomas F. Fleming, Kaye Scholer LLP, New York, NY, Aton Arbisser, Julian Brew, Kaye Scholer LLP, Los Angeles, Aaron R. Hand, Adam Arthur Bier, CA, David L. Cousineau, Mark S. Popof- Andy H. Chan, Berrie R. Goldman, Chris- sky, Kaye Scholer LLP, Kathleen McDer- tian E. Mammen, Craig H. Casebeer, Dar- mott, Sonnenschein Nath & Rosenthal cy A. Paul, David M. Madrid, Deborah E. LLP, Washington, DC, George W. John- Fishman, Geoffrey M. Godfrey, Jon B. Du- ston, Nancy Dilella, Patricia Rocha–Tra- brow, Katie J.L. Scott, Krista M. Carter, maloni, Hoffmann–La Roche Inc., Law Lloyd R. Day, Jr., Mario Moore, Rebecca Department, Nutley, NJ, Julia Huston, J. Wais, Renee Dubord Brown, Robert M. Robert L. Kann, Erik Paul Belt, Joel R. Galvin, Susan M. Krumplitsch, Lauren M. Leeman, Keith E. Toms, Kimberly J. Selu- Papenhausen, Day Casebeer Madrid & ga, Lee C. Bromberg, Nicole A. Rizzo Batchelder LLP, Cupertino, CA, Andrew Smith, Robert M. Asher, Timothy M. Mur- Kumamoto, Firasat Ali, Mary Boyle, Mi- phy, Bromberg & Sunstein LLP, Boston, chelle E. Moreland, Terrence P. McMahon, MA, for Defendants. William G. Gaede, III, McDermott Will & Emery LLP, Palo Alto, CA, Bobby R. MEMORANDUM AND ORDER Burchfield, Jon B. Dubrow, Raymond A. WILLIAM G. YOUNG, District Judge. Jacobsen, Richard W. Smith, McDermott Will & Emery, LLP, Washington, DC, Amgen Inc. (‘‘Amgen’’) sought declarato- Cullen N. Pendleton, Jennifer E. Flory, ry relief to prevent F. Hoffmann–LaRoche Jeremy D. Protas, Kevin M. Flowers, Limited, Roche Diagnostics GmbH, and Mark Izraelewicz, Matthew C. Nielsen, Hoffmann–La Roche Inc. (collectively, Sandip H. Patel, Thomas I. Ross, Michael ‘‘Roche’’) from marketing a drug that in- F. Borun, Marshall Gerstein & Borun fringes U.S. Patent Nos. 5,441,868, 5,547,- LLP, Michael F. Borun, Marshall, O’Toole, 933, 5,618,698, 5,621,080, 5,756,349, and Gerstein, Murray & Borun, Chicago, IL, 5,955,422. These patents relate to Am- D. Dennis Allegretti, Michael R. Gottfried, gen’s recombinant erythropoietin (‘‘EPO’’), Christopher S. Kroon, Patricia R. Rich, a naturally occurring protein that stimu- Duane Morris LLP, Dana M. McSherry, lates the production of red blood cells. Daniel A. Curto, James M. Fraser, Joshua Amgen, Inc. v. Hoechst Marion Roussel, A. Munn, Lauren M. Papenhausen, Mi- Inc., 3 F.Supp.2d 104, 106 (D.Mass.1998). chael Kendall, Nicole A. Longton, Peter M. The jury found for Amgen across the Acton, McDermott, Will & Emery LLP, board, upholding the validity of the claims- Boston, MA, Darrell G. Dotson, Erica S. in-suit for the 8422, 8933, 8868, 8698, and Olson, Kimberlin L. Morely, Monique L. 8349 patents and finding that Roche literal- Corday, Sandip H. Patel, Wendy A. White- ly infringed all of the claims-in-suit except AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 167 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

for claim 12 of the 8933 patent, which it the jury’s finding that Roche literally in- found infringed by the doctrine of equiva- fringed claim 3 of the 8933 patent. See lents. Jury Verdict [Doc. No. 1542] at 2–3. Jury Verdict at 2. As shall be discussed The Court writes to explain its rulings on below, Amgen patented recombinant EPO various pre-trial motions for summary by reference to a specific amino acid se- judgment, specifically its findings and rul- quence. See Amgen, Inc. v. F. Hoffmann– ings that the Amgen patents survive La Roche Ltd., 494 F.Supp.2d 54, 63 Roche’s obviousness-double patenting con- (D.Mass.2007) [hereinafter ‘‘Amgen Mark- tentions, to resolve various post-trial mo- man ’’]. Pegylation—the chemical reac- tions, and to explain the decision to grant tion that attaches PEG to EPO via a single Amgen’s request for a permanent injunc- bond to form CERA, the active ingredient tion. in MIRCERA—does not alter EPO’s ami- Due to the sheer number, the Court will no acid sequence. See Trial Ex. 53, not be able to address every motion.1 Roche’s Biologic License Application at Therefore, all motions not already granted 00004027 [hereinafter ‘‘Roche BLA’’]. The and not resolved herein are denied. After attachment of PEG to EPO does not place explaining the grant of summary judgment MIRCERA beyond the boundary of the on the issue of obviousness-type double claims because ‘‘the specification expressly patenting, the Court will address post-trial contemplates that additional molecules motions in three groups: validity, infringe- may be attached to ‘human erythropoiet- ment, and injunctive relief. Regarding va- in.’ ’’ Amgen Markman, 494 F.Supp.2d at lidity, the Court will write to explain three 63 (emphasis omitted). Thus, any minor decisions. Primarily, the Court concluded modification of EPO that does not alter that the source ‘‘purified from mammalian the specific amino acid sequence—such as cells grown in culture’’ limits claim 1 of the the displacement of a single hydrogen 8422 patent. As shall be discussed, the atom—is immaterial and does not preclude undisputed record revealed that none of a finding of infringement. the prior art, including the Goldwasser Finally, Amgen has satisfied all four fac- study, satisfied this limitation. Second, tors necessary for a permanent injunction sufficient evidence supported the jury’s set forth in eBay Inc. v. MercExchange, finding that the term ‘‘human erythro- L.L.C., 547 U.S. 388, 126 S.Ct. 1837, 164 poietin,’’ found in claim 1 of the 8422 patent L.Ed.2d 641 (2006). Failure to issue a and claims 3, 7, and 9 of the 8933 patent, is permanent injunction would cause irrepa- not indefinite, even though the specifica- rable, immeasurable harm, for which there tions do not specify whether the glycopro- is no adequate remedy at law. Given that tein described therein would be 165 or 166 Roche infringes Amgen’s valid patents, amino acids in length. and in light of the harms that will be Next, the Court will write to explain its discussed, the balance of hardships clearly grant of summary judgment to Amgen favors Amgen. Moreover, the Court has with respect to infringement of claim 1 of concluded that ‘‘the public interest would the 8422 patent, see Electronic Order Au- not be disserved by a permanent injunc- gust 28, 2007, and the decision to uphold tion.’’ Id. at 391, 126 S.Ct. 1837. The

1. With well over 1,000 pages of post-trial of the parties’ remaining contentions have briefing, responding to every issue would be been considered and found wanting. Be- an inappropriate use of judicial resources. cause the jury’s verdict will stand, Roche’s The Court will focus on those issues that the anti-trust claims are moot. parties raised at the February 28 hearing. All 168 581 FEDERAL SUPPLEMENT, 2d SERIES

record compiled over the course of a four- theless, a generation of researchers grap- day evidentiary proceeding reveals no ben- pled with how to introduce exogenous EPO efit to patient health or the public coffers into the bloodstream of anemic patients. so great as to outweigh the public’s inter- Id. Some of America’s most accomplished est in a robust patent system. researchers believed they could isolate and purify EPO that had exited the body in I. BACKGROUND urine. Id. Others attempted to obtain ‘‘Erythropoiesis, the production of red EPO from plasma. Id. These approaches blood cells, occurs continuously throughout proved ‘‘unsuccessful because such recov- the human life span to offset cell destruc- ery employed techniques that were compli- tion.’’ 8422 Patent col. 5 ll. 41–43. ‘‘EPO cated, yet still resulted in a low-yield, high- is a protein hormone’’ that regulates eryth- impurity, or unstable EPO end product. ropoiesis. Lodish Decl. [Doc. No. 513] Similar attempts using antibody tech- ¶ 13. Produced in the kidneys, EPO circu- niques failed because of difficulty in pro- lates in the blood stream, id. ¶ 15, and, viding for the large-scale isolation of quan- ‘‘[l]ike a key in a lock,’’ id. ¶ 14, binds with tities of EPO from mammalian sources EPO receptors located on erythroid pro- sufficient for further analysis, clinical test- genitor cells in the bone marrow, id. ¶ 17. ing, or therapeutic use.’’ Id. (internal cita- When EPO binds to the EPO receptor it tion omitted). As of 1984, mass production ‘‘initiate[s] the signaling pathway that ulti- of erythropoietin from recombinant DNA mately leads to red blood cell production.’’ was not possible. Amgen, Inc. v. Hoechst Id. ¶ 24. Red blood cells, of course, con- Marion Roussel, Inc., 457 F.3d 1293, tain hemoglobin, the body’s vehicle for 1303–04 (Fed.Cir.2006) (hereinafter ‘‘Am- transporting oxygen. Id. ¶ 15. ‘‘In gen IV ’’). healthy humans, the amount of EPO in circulation in the bloodstream is exquisite- In this case, Roche’s anticipation de- ly regulated to produce just the required fense focused on a clinical study super- numbers of red cells.’’ Id. Diseases or vised by Dr. Eugene Goldwasser. Dr. disorders affecting the kidneys often result Goldwasser’s study, which began in 1979– in an EPO deficit, which leads to a low 1980, attempted to treat three anemic pa- level of red blood cells, a condition gener- tients with EPO purified from human ally referred to as anemia. Amgen Inc. v. urine. Amgen, Inc. v. Hoechst Marion Hoechst Marion Roussel, Inc., 314 F.3d Roussel, Inc., 126 F.Supp.2d 69, 111 1313, 1321 (Fed.Cir.2003) [hereinafter (D.Mass.2001) [hereinafter ‘‘Amgen I ’’]. ‘‘Amgen II ’’].2 The results of the Goldwasser study were For some time preceding the 1980s, the mixed and are still a matter of dispute. medical community believed that the intro- While experts debate whether and to what duction of additional EPO into a patient’s extent an increase in reticulocyte count bloodstream could combat the effects of may be attributed to Dr. Goldwasser’s uri- anemia by stimulating the production of nary EPO, Dr. Goldwasser, who character- additional red blood cells. See id. Never- ized the study as a failure, has admitted

2. Amgen Inc. v. Hoechst Marion Rousell and 69 (D.Mass.2001) (‘‘Amgen I ’’); Amgen Inc. v. Transkaryotic Therapies, Inc., No. 97–10814– Hoechst Marion Roussel Inc., 314 F.3d 1313 WGY, a related case in this session of the (Fed.Cir.2003) (‘‘Amgen II ’’); Amgen Inc. v. Court involving the same patents, spawned Hoechst Marion Roussel Inc., 339 F.Supp.2d two written opinions by this Court and two 202 (D.Mass.2004) (‘‘Amgen III ’’); Amgen from the Federal Circuit: Amgen Inc. v. Inc. v. Hoechst Marion Roussel Inc., 457 F.3d Hoechst Marion Roussel Inc., 126 F.Supp.2d 1293 (Fed.Cir.2006) (‘‘Amgen IV ’’). AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 169 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

that the study did not actually increase 126 F.Supp.2d at 77 (noting that EPO- patient hematocrit, the primary indicator GEN, the first commercial embodiment of of health benefits for erythropoiesis-stimu- Amgen’s patents, is one of the most suc- lating agents (‘‘ESAs’’). Id. at 111–12. cessful blockbuster drugs in the history of Moreover, due to a shortage of urine from the American pharmaceutical industry). aplastic anemia patients, the study never Of course, Rockefeller never figured out expanded beyond the three patients. Id. how to produce a limitless supply of his at 112. product in a petri dish. In 1983, a team of Amgen researchers led by Dr. Fu–Kuen Lin identified a means A. PRODUCTION AND PATENTING OF EPO of producing recombinant erythropoietin. Example 10 of the patent’s specifica- Amgen II, 314 F.3d at 1321. Rather than tion 4 discloses the method for producing attempting to obtain EPO from natural EPO. The process begins with the: sources such as human urine, Lin identi- transfection (introduction) of exogenous fied human and monkey EPO and was DNA into host [CHO] cells. The CHO ‘‘able to determine the entire DNA se- host cell, using its own transcription ma- quence of human EPO and from that, its chinery,5 then expresses human rEPO in predicted amino acid sequence.’’ Id. at abundance, which then accumulates in 1321–22. Next, Lin generated an expres- the host cell cytoplasm or in the culture sion vector 3 that he could inject into a host media. [8933 patent] col. 37, lines 43–49. Chinese hamster ovary (‘‘CHO’’) cell and The rEPO so recovered has the same or that would yield a protein with the amino similar amino acid sequences and biolog- acid sequence of human EPO. Id. Because ical properties as naturally occurring hu- the protein has the requisite amino acid man EPO, but differs in its ‘‘glycosyla- sequence, it performed the key-in-lock function of EPO and stimulated erythro- tion,’’ i.e., in the patterns of branched poiesis. carbohydrate chains that attach to the protein. [Id.] col. 10, lines 34–41. Amgen’s recombinant EPO revolution- ized the treatment available for anemia Amgen II, 314 F.3d at 1321–22 (footnote and other blood disorders. See id. at 1321. supplied). To say that the cluster of patents protect- Of utmost importance to this case is the ing EPO in the United States has been a protein this process produces. Graphically financial boon to Amgen would be like depicted, the protein, also referred to as a observing that Standard Oil had done pret- polymer or a polypeptide, resembles a ty well in the oil business. See Amgen I, loosely coiled chain. Pl.’s Stat. Mat. Facts

3. Expression vector refers to a ‘‘circular piece rather than thymine, bound to ribose and a of DNA. that is inserted into a host cell to phosphate group.’’ 8422 Patent col. 1 ll. 50– produce (or ‘express’) a protein.’’ Amgen II, 52. The process of generating a protein be- 314 F.3d at 1321 n. 2. gins when ‘‘DNA nucleotide sequences (genes) are ‘transcribed’ into relatively unsta- 4. All of the patents at issue share this identi- ble messenger RNA (mRNA) polymers.’’ This cal specification. mRNA then serves as a template for the formation of the protein. Id. col. 1 ll. 54–58; see 5. Transcription is the process wherein the also ALBERTS, supra, at 302. Through a pro- nucleotide sequence of DNA is copied onto cess known as ‘‘translation,’’ ‘‘small RNA ribonucleic acid (‘‘RNA’’). BRUCE ALBERTS ET strands (tRNA) TTT transport and align indi- AL., MOLECULAR BIOLOGY OF THE CELL 302 (4th vidual amino acids along the MRNA strand to ed.2002). RNA ‘‘is a polynucleotide compris- allow for formation of polypeptides in proper ing adenine, guanine, cytosine and uracil (U), amino acid sequences.’’ Id. col. 1 ll. 59–63. 170 581 FEDERAL SUPPLEMENT, 2d SERIES

[Doc. No. 512] at 1. Every protein is com- of EPO, oxygen and hydrogen atoms at- prised of a specific amino acid sequence; tached. See id. each amino acid represents a link in the chain. See id. at 1–2. The term ‘‘amino When amino acids bond together to form acid sequence’’ refers to the order in which a protein, the n-terminal of one bonds with each of the particular amino acids are the c-terminal of another. See id. The bond formed between the carbon from the linked to form the protein. See BRUCE ALBERTS ET AL., MOLECULAR BIOLOGY OF THE c-terminal and the nitrogen from the n- CELL 140 (4th ed.2002). terminal of the two amino acids is a peptide bond. ALBERTS, supra, at 132. The Perhaps the best way to understand the bonding process results in the displace- manner in which a specific amino acid ment of one or two hydrogen atoms from sequence represents a particular protein is the n-terminal and an oxygen or an oxygen by analogy. While the English language has an alphabet of 26 letters, there are and a hydrogen atom from the c-terminal. twenty amino acids. See 8422 Patent col. 1 See Pl.’s Stat. Mat. Facts ¶ 26. These ll. 63–67. As particular letter combina- bonds are replicated at every spot where tions in a certain order form a word in the one amino acid attaches to another along English language, each unique sequence of the sequence. At the end, the first amino amino acids forms a different protein. acid retains an unbonded n-terminal, while Just as ‘‘cat’’ cannot be spelled c-t-a, the the final amino acid has an unbonded c- desired protein may only be expressed if terminal. Id. ¶ 2. the amino acids are in order. Depending After the protein is produced in the upon the type of cell that generates the ribosome, it is secreted into the endo- protein, human EPO consists of 165 or 166 plasmic reticulum where it undergoes gly- amino acid residues.6 Pl.’s Stat. Mat. cosylation, a process where sugars attach Facts [Doc. No. 512] at 1–2. The precise to the polypeptide backbone. ALBERTS, su- order of the amino acid sequence is critical pra, at 702. When a protein is formed in a because ‘‘even a single change in the amino mammalian host cell, it is called a glyco- acid sequence of the [EPO protein] or protein. Lodish Decl. ¶ 20. The EPO receptor can inhibit binding’’ and prevent protein has four sites where chains of car- the stimulation of erythropoiesis. Lodish bohydrates (sugar residues) can be at- Decl. ¶ 14. tached, and three of these sites are n- Also critical to this case is the manner in terminals. Id. which these amino acids bond. Each amino acid is bookended by a carbon-terminal Glycosylation can affect inter alia a pro- (‘‘c-terminal’’) on one end and a nitrogen- tein’s three-dimensional structure. See terminal (‘‘n-terminal’’) on the other. The ALBERTS, supra, at 702. ‘‘The three dimen- term ‘‘n-terminal’’ refers to a configuration sional structure of a protein reflects its of a nitrogen atom bonded to two or three primary structure (amino acid sequence), hydrogen atoms. ALBERTS, supra, at 131. secondary structure (localized folding of In the case of EPO, the nitrogen in the n- parts of the polypeptide chain), and terti- terminal is bonded to two hydrogen atoms. ary structure (long-range folding).’’ Lod- See Pl.’s Stat. Mat. Facts ¶ 26. A c-termi- ish Decl. ¶ 18. Amgen’s patents teach nal is a similar configuration with a carbon EPO by reference to recombinant EPO’s atom serving as the base, and, in the case primary structure without mentioning the

6. In some mammalian cells, one of the 166 amino acids is removed, leaving 165. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 171 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

other aspects of structure potentially af- disease (‘‘ESRD’’). Chertow Expert Rep. fected by glycosylation. ¶¶ 16–17. Available in the United States since the B. AMGEN CLAIMED ITS PATENTS BY REF- 1960s, dialysis removes waste products in ERENCE TO EPO’S AMINO ACID SE- the blood of ESRD patients whose kidneys QUENCE cannot perform that function on their own. Amgen obtained a total of seven product Id. ¶ 18. Although dialysis cleanses a pa- and process patents by reference to the tient’s blood, it does not aid production of amino acid sequence. As the Court noted erythropoietin. Id. While the development in claim construction, ‘‘[t]he patent itself is of dialysis treatments in the 1960s likely silent as to TTT any structural characteris- extended the lives of many ESRD pa- tic beyond the required amino acid se- tients, the anemia in these people persist- quence.’’ Amgen Markman, 494 F.Supp.2d at 63. The specification: ed, resulting in symptoms of weakness, fatigue, and lack of energy, requiring ei- does not define ‘‘erythropoietin’’ by ref- ther patient acceptance of continued mor- erence to the presence or absence of any attached molecules, such as the carbohy- bidity or some form of treatment. Id.; drate that can be attached to EPO pro- Fishbane Expert Rep. ¶ 20. Recombinant teins for glycosylated EPO. In fact, the EPO met the previously unmet needs of specification expressly contemplates that CKD and ESRD patients for an erythro- additional molecules may be attached to poiesis stimulating agent. ‘‘human erythropoietin.’’ By implica- In 1989, Amgen launched epoetin alfa, tion, therefore, those additional mole- or EPOGEN, which served both CKD and cules are not part of the amino acid ESRD patients. In the mid–1990s, Am- structure that comprises the claimed gen developed a second-generation ESA, product. darbepoetin alfa, branded Aranesp. Bern- Id. (internal citation omitted). It follows heim Expert Report ¶ 35. The key differ- that modifications not affecting the amino ence between these drugs is how frequent- acid sequence are immaterial. ly patients must take them. For patients

C. THE MARKET FOR ERYTHROPOIESIS receiving epoetin alfa (EPOGEN) two to STIMULATING AGENTS (‘‘ESAS’’) three times per week and switching to Aranesp, the label provides that Aranesp Since obtaining its patents, Amgen has developed two drugs to treat anemia and be administered either subcutaneously or anemia-related diseases, EPOGEN and intravenously once weekly. For patients Aranesp. Anemia can result from exces- initiating treatment for correction of ane- sive loss of blood, from chemotherapy in mia, the recommended dosing is also one cancer patients (because some chemother- administration per week. For mainte- apeutic agents destroy not only cancer nance patients who had been receiving cells, but also the bone marrow where EPOGEN once per week, however, the blood cell formation occurs), and from label provides that Aranesp can be admin- chronic kidney disease (‘‘CKD’’), a pro- istered once every two weeks. Fishbane gressive decline in kidney function leading Expert Rep. ¶ 24. Although the Aranesp to the buildup of waste products in the label does not provide for less frequent blood. Bernheim Expert Rep. ¶ 25. Pa- dosing than once every two weeks, for tients with 85–95% loss of kidney function some CKD patients there is off-label usage are said to experience end-stage kidney at once per month. Id.; Chertow Expert failure, commonly called end-stage renal Rep. ¶ 19. 172 581 FEDERAL SUPPLEMENT, 2d SERIES

Anemia drugs are sold in two markets, Epoetin beta, the starting ingredient for CKD and ERSD, based upon patient need. CERA, is a protein that is materially indis- In the United States, Amgen markets Ara- tinguishable from the EPO in EPOGEN or nesp primarily for use in the CKD market Aranesp. See Lodish Decl. ¶ 41 (‘‘Roche’s segment and markets EPOGEN primarily manufacturing process for producing the for use by ESRD patients. Remedy Trial recombinant EPO in [CERA] closely Tr. vol. 1 [Doc. 1737] at 44–46; Berheim tracks the teachings of Example 10 of Expert Rep. ¶ 37. With the exception of Amgen’s [p]atents.’’). Like Amgen’s EPO, Johnson & Johnson, which obtained limit- epoetin beta is a recombinant EPO formed ed market entry via a license agreement, by injecting DNA encoding human EPO Amgen, by virtue of its patents, has a into a CHO cell. Id. ¶ 42 (citing Ex. 8 at monopoly over both markets. In 2006, ITC–R–BLA–000046667). And, like Am- annual net sales of Aranesp in the United gen’s EPO, ‘‘[t]he resulting glycosylated States were over $2,800,000,000, greater human EPO polypeptide product contains than those of EPOGEN and the Johnson the identical amino acid sequence as natu- & Johnson drug, Procrit, which each had rally occurring human EPO.’’ Id. ¶ 47. annual sales of approximately $2,400,000,000. Bernheim Expert Rep. In order to form CERA, Roche subjects ¶ 37. epoetin beta to a chemical reaction with a polyethylene glycol polymer (‘‘PEG’’), id. D. PRODUCTION OF MIRCERA ¶ 48, attaching PEG to epoetin beta at one Roche sought to break Amgen’s monop- of ‘‘9 potential pegylation sites on human oly by introducing MIRCERA into the EPO—the N-terminal amino group [or one market of ESAs. CERA, the active ingre- of] the 8 epsilon-amino groups of lysines.’’ dient in MIRCERA, is an acronym for Id. ¶ 52. The net result of the reaction is Continuous Erythropoietin Receptor Acti- ‘‘a single bond between one carbon atom of vator, referring to the fact that CERA has [the PEG] molecule and one amino nitro- a longer half-life than either darbepoetin gen of EPO.’’ Id. ¶ 50. According to alfa (Aranesp) or epoetin alfa (EPOGEN Roche’s own analysis, pegylation does not or Procrit). Fishbane Expert Rep. ¶ 30. affect epoetin beta’s amino acid sequence, While Aranesp has been approved only for glycosylation, or carbohydrate structure. dosing every two weeks, MIRCERA re- Trial Tr. at 2743; see also Lodish Decl. ceived FDA approval to provide correction ¶ 53. Prior to marketing or this litigation, of anemia with once-every-two-week dos- Roche referred to CERA as peg-EPO. ing and to maintain stable hemoglobin lev- See Trial Tr. at 2738–40. els with once-monthly or once-every-two- week dosing in all CKD patients. As shall Pegylation—the attachment of PEG to a be described below, Roche formed MIRC- protein—is a familiar technique in the ERA by attaching a sugar to EPO in order pharmaceutical and cosmetic industry. to extend the protein’s half-life in the Pl.’s Stat. Undisp. Mat. Facts ¶ 40. In body. theory, the addition of PEG, an inert polymer, to a therapeutic protein, such as 1. The active ingredient in MIRC- EPO, can expand the drug’s life in the ERA, CERA, is formed via a body and reduce levels of toxicity, allowing chemical reaction that bonds PEG for extended dosing intervals. Id. ¶¶ 39– to EPO 40; Lodish Decl. ¶ 31. The technique was MIRCERA is the branded name for me- first employed as early as 1977, and EPO thoxy polyethylene glycol-epoetin beta. is only one of a number of human proteins AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 173 Cite as 581 F.Supp.2d 160 (D.Mass. 2008) that have been pegylated. Lodish Decl. Roche’s motion for summary judgment but ¶ 30. granted Amgen’s cross-motions for summary judgment for no obviousness-type II. OBVIOUSNESS DOUBLE PAT- double patenting on the eve of trial. The ENTING Court now writes to explain that decision. [1] Since the inception of the Republic, The Court determined that the two-way our patent system ‘‘has been about the test was applicable to the 8016 claims be- difficult business ‘of drawing a line because the 8016 patent disclosed a follow-on tween the things which are worth to the invention that issued after the underlying public the embarrassment of an exclusive patent, and those which are not.’ ’’ Bonito claims due to a restriction order imposed Boats, Inc. v. Thunder Craft Boats, Inc., by the Patent and Trade Office (‘‘PTO’’). 489 U.S. 141, 148, 109 S.Ct. 971, 103 Applying the two-way test, the claims-in- L.Ed.2d 118 (1989)(quoting 13 WRITINGS OF suit were not obvious over claim 10 of the THOMAS JEFFERSON 335 (Memorial 8016 patent because the metes and bounds ed.1904)). Codified at 35 U.S.C. §§ 102(a)- of the claim are readily discernable with- (b), the novelty requirement reflects Con- out reference to the specification and are gress’s determination that the public will clearly drawn to a seven-step process for not pay the dear price of a 17–year monop- purifying EPO. Claim 10 is clearly not oly for information that is already available drawn to the protein itself or to the pro- to the public. See id. ‘‘The nonobviou- cess of its production. In addition, be- ness requirement extends the field of un- cause the order in which Amgen’s patents patentable material beyond that which is issued was a function of a restriction re- known to the public under § 102, to in- quirement imposed by the PTO, and be- clude that which could readily be deduced cause the claims at issue are consonant from publicly available material by a per- with those restrictions, the claims of the son of ordinary skill in the pertinent field 8933, 8422, and 8349 patents are immune of endeavor.’’ Id. at 150, 109 S.Ct. 971. from ODP over the 8008 patent under the Obviousness double patenting (‘‘ODP’’) is a terms of 35 U.S.C. § 121. judicially devised species of obviousness that prevents inventors from over-extend- A. THE LEGAL FRAMEWORK ing the term of exclusivity by patenting subtle variations of the same device. Ap- [2–4] An ODP inquiry is comprised of plied Materials, Inc. v. Advanced Semi- two steps. ‘‘First, as a matter of law, a conductor Materials Am., Inc., 98 F.3d court construes the claim in the earlier 1563, 1568 (Fed.Cir.1996). patent and the claim in the later patent At summary judgment, Roche invoked and determines the differences. Second, ODP, averring that the claims-in-suit were the court determines whether the differ- obvious over claim 10 of the 8016 patent ences in subject matter between the two because it contained the term ‘‘erythro- claims render the claims patentably dis- poietin from a mammalian cell culture su- tinct.’’ Eli Lilly and Co. v. Barr Labs., pernatant fluid.’’ See Mem. Supp. Sum. J. Inc., 251 F.3d 955, 968 (Fed.Cir.2001)(in- of ODP Over 8016 [Doc. No. 491] at 1–2; ternal citations omitted). Defendants who see also Mot. Summ. J. Of ODP Over 8016 seek to invalidate a particular claim via [Doc. 490]. Amgen then moved for sum- ODP must prove by clear and convincing mary judgment of no ODP over both the evidence that the original claim and the 8016 and 8008 patents [Doc. No. 498]. allegedly duplicative claim are not patent- Without explanation, the Court denied ably distinct. Symbol Techs., Inc. v. Opti- 174 581 FEDERAL SUPPLEMENT, 2d SERIES

con, Inc., 935 F.2d 1569, 1580 (Fed.Cir. covering the underlying invention. The 1991). It is also important to note that two-way test seeks where the metes and bounds are discerna- to prevent rejections for obviousness- ble from the face of the claim, the ODP type double patenting when the appli- inquiry focuses on what is claimed without cants filed first for a basic invention and reference to the disclosure. See General later for an improvement, but, through Foods Corp. v. Studiengesellschaft Kohle no fault of the applicants, the PTO de- mbH, 972 F.2d 1272, 1281 (Fed.Cir. cided the applications in reverse order of 1992)(‘‘[T]he disclosure of a patent cited in filing, rejecting the basic application al- support of a double patenting rejection though it would have been allowed if the cannot be used as though it were prior art, applications had been decided in the or- even where the disclosure is found in the der of their filing. claims.’’) (emphasis in original). Id. Where patents have issued out of or- 1. The ‘‘One–Way’’ and ‘‘Two–Way’’ der, the examiner will employ the one-way Tests test, but ‘‘the examiner also asks whether [5–7] There are two ways that a court the patent claims are obvious over the can conduct the ODP analysis. In most application claims. If not, the application cases, courts employ a ‘‘one-way’’ test claims later may be allowed.’’ Id. In this where the court compares the claims ac- case, Amgen asks the Court to apply the cording to the order in which the patents two-way test. issued. ‘‘A later claim that is not patent- [8] The determination of whether the ably distinct from an earlier claim in a one-way or two-way test applies is matter commonly owned patent is invalid for obvi- of law. Id. The two-way test must be used ous-type double patenting.’’ Eli Lilly, 251 if: (1) the applicant could not have filed F.3d at 968. If the scope of the applica- both claims together in the earlier-filed tion and the patent claims is not identical, application; and (2) the applicant did not the court must ask whether the later pat- cause the later filed claim to issue first by ent’s claim defines merely an obvious vari- delaying examination of the earlier-filed ation of the earlier patent’s claim. See In claim during the period when both applica- re Goodman, 11 F.3d 1046, 1052 (Fed.Cir. tions were pending before the PTO (the 1993). Although the one-way test applies ‘‘co-pendency period’’). See, e.g., In re in the large majority of cases, the Federal Emert, 124 F.3d 1458, 1461 (Fed.Cir.1997); Circuit created a ‘‘two-way’’ test that ap- Engineered Prods. Co. v. Donaldson Co., plies in a narrow set of circumstances. In 225 F.Supp.2d 1069, 1111 (N.D.Iowa 2002), re Berg, 140 F.3d 1428, 1432 (Fed.Cir. vacated in part on other grounds, 147 1998). Fed.Appx. 979 (Fed.Cir.2005). The two-way test is a response to the reality that the Patent Office is perennially 2. The Safe Harbor Provision, 35 underfunded and slow. See id. These U.S.C. § 121 indisputable facts cause various anomalies, including the issuance of patents in an The two-way test is not the only mecha- order other than that which the inventor nism devised to protect inventors from intended. In rare cases, quirks in the inadvertent inequities arising from the application process may cause a patent PTO’s application process. Congress en- covering a subsequently conceived follow- acted a safe harbor, codified at 35 U.S.C. on invention to issue before the patent § 121, which provides: AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 175 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

If two or more independent and distinct On July 3, 1986, shortly after Drs. Lai inventions are claimed in one applica- and Strickland filed the 8119 application, tion, the Director may require the appli- the PTO imposed a restriction require- cation to be restricted to one of the ment on the 8298 application. Pursuant to inventions. If the other invention is 35 U.S.C. § 121, the PTO mandated that made the subject of a divisional applica- Amgen divide the claims in the 8298 appli- tion which complies with the require- cation into distinct groups based on sub- ments of section 120 of this title it shall ject matter: I) polypeptides; II) DNA; be entitled to the benefit of the filing III) plasmids; IV) cells; V) pharmaceuti- date of the original application. A pat- cal composition; and VI) assay. See Lod- ent issuing on an application with re- ish Decl. ¶ 17. spect to which a requirement for restric- As a result of the restriction require- tion under this section has been made, ment, Amgen elected to allow its DNA or on an application filed as a result of (restriction Group II) claims to proceed to such a requirement, shall not be used as examination in the 8298 application. Id. a reference either in the Patent and ¶ 20. All of the elected claims fit into Trademark Office or in the courts restriction Group II. See Lodish Decl. ¶ 25. against a divisional application or In addition, on October 23, 1987, Amgen against the original application or any filed two divisional applications, U.S. Pat- patent issued on either of them, if the ent Application Nos. 07/113,178 and divisional application is filed before the 07/113,179. All of the claims in the 8178 issuance of the patent on the other ap- and 8179 applications were taken from the plication. 8298 application. See Pl.’s Stat. Undisp.

B. THE PROSECUTION HISTORY REVEALS Mat. Facts [Doc. No. 500] ¶¶ 4–5. The THAT THE PTO, NOT AMGEN, DICTATED 8178 application contained claims drawn to THE ORDER OR FORM IN WHICH ITS a polypeptide (restriction Group I) and a PATENTS ISSUED pharmaceutical composition (restriction Group VI). See Moore Decl. Ex. I, U.S. Dr. Lin filed U.S. Patent Application Patent Application No. 07/113,178, at AM– No. 06/675,298 on November 30, 1984. See ITC 00941037–45, AM–ITC 00941076–77; Moore Decl. [Doc. No. 501] Ex. H–1, U.S. Moore Decl. Ex. H–8, Office Action, July 3, Patent Application No. 06/675,298, at 1986, at 2. The 8179 application included AM670167625. On June 20, 1985, two oth- claim 1 from the 8298 application, which er Amgen researchers, Drs. Lai and Strickland, filed U.S. Patent Application was placed in restriction Group I. See No. 06/747,119. Claim 10 of the 8119 appli- Moore Decl. Ex. J, U.S. Patent Application cation is drawn to a specific seven-step No. 07/113,179 at AM–ITC 004539820–90, process for purifying recombinant EPO. AM–ITC 00454000–01; Moore Decl. Ex See Lodish Decl. [Doc. No. 502] ¶ 48. The H–8, Office Action, July 3, 1986, at 2. claim does not describe a product or teach On May 19, 1987, while Amgen and the a process for producing EPO from mam- PTO were still sorting Amgen’s applica- malian cells. Lodish Decl. ¶ 44. It is tions into restriction groups, Drs. Lai and undisputed that Drs. Lai and Strickland Strickland’s 8119 application issued as U.S. did not conceive of the process described Patent No. 4,667,016. Pl.’s Stat. Undisp. in the 8119 application until after Dr. Lin Mat. Facts ¶ 9. The 8298 application issued filed the 8298 application. See Strickland as U.S. Patent No. 4,703,008, but not until Decl. [Doc. No. 503] ¶¶ 11–16. October 27, 1987, see id. ¶ 1, four days 176 581 FEDERAL SUPPLEMENT, 2d SERIES

after Amgen filed the 8178 and 8179 appli- patentably distinct from the 8016 claims, cations, see id. ¶¶ 4–5. The 8178 and 8179 Roche bears an even heavier burden in applications subsequently issued as the proving ODP based on the 8016 claims. 8933, 8349, and 8422 patents. The claims in See Amgen I, 126 F.Supp.2d at 105 (Where these patents are not drawn to restriction the asserted grounds for invalidity were Group II. See Lodish Decl. ¶¶ 26–34. reviewed by the PTO, ‘‘the challenger has the added burden of overcoming the defer- C. THE COURT GRANTED AMGEN’S MO- ence that is due to a qualified government TION FOR SUMMARY JUDGEMENT AND agency presumed to have properly done its DENIED ROCHE’S BECAUSE THERE WAS job.’’) (internal quotation omitted). Roche NO GENUINE ISSUE OF MATERIAL FACT cannot overcome that burden. THAT THE CLAIMS–IN–SUIT WERE NOT INVALID FOR ODP OVER THE 8016 1. The two-way test applies in evalu- PATENT CLAIMS ating whether the claims-in-suit Roche moved for summary judgment on are invalid over the claim 10 of the the ground that claim 10 of Drs. Lai and 8016 patent Strickland’s 8016 patent rendered the claims-in-suit obvious because claim 10 [9] While courts generally apply the contains the term ‘‘recombinant erythro- ‘‘one-way’’ test, the Federal Circuit has poietin from a mammalian cell culture su- recognized special circumstances in which pernatant fluid.’’ See Def.’s Mem. Supp. the ‘‘two-way’’ test is to be applied. Eli Sum. J. at 1–2. As shall be explained, the Lilly, 251 F.3d at 968–969. The two-way Court must employ the two-way test in test should apply where an underlying evaluating this claim because the 8016 pat- claim and a follow-on claim issue in re- ent was a subsequently conceived follow-on verse order through no fault of the paten- invention that issued before the claims-in- tee. See In re Berg, 140 F.3d at 1432. In suit due to the PTO’s imposition of the order to apply the two-way test, the Court 1986 restriction requirement. Under the must determine that Amgen (1) could not two-way test, it is clear that claim 10 of the have filed the 8119 application together 8016 patent and the claims-in-suit are not with the 8298 application and (2) did not identical in scope. They are in fact drawn cause the 8016 patent to issue first by to very different subject matter, and the delaying examination of the 8298 applica- differences are not merely obvious variation during the co-pendency period. See tions. id.; see also In re Emert, 124 F.3d at As a threshold matter, it is important to 1461; Engineered Prods., 225 F.Supp.2d note that when deciding a motion for sum- at 1111. The Court was satisfied that both mary judgment, the Court ‘‘must view the of these criteria were met. evidence presented through the prism of the substantive evidentiary burden.’’ As noted above, the first filing involved Anderson v. Liberty Lobby, Inc., 477 U.S. Lin’s invention of recombinant EPO as 242, 254, 106 S.Ct. 2505, 91 L.Ed.2d 202 described in the 8298 application. See (1986). Here, Roche bears the burden of Moore Decl. Ex. H–1, U.S. Patent Applica- proving ODP by clear and convincing evi- tion No. 06/675,298, at AM670167625. dence, ‘‘a heavy and unshifting burden.’’ Even though the 8016 patent issued prior Symbol Techs., 935 F.2d at 1580. More- to the claims in suit, the undisputed record over, since the PTO—on two separate oc- reveals that Lai & Strickland’s EPO purifi- casions—rejected Roche’s ODP argument cation process was a subsequently con- and determined that Dr. Lin’s claims are ceived follow-on invention. See Strickland AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 177 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

Decl. ¶¶ 11–16. Thus, it was impossible other manner to cause the 8016 patent to for Amgen to have filed claim 10 of the issue first. Instead, the record suggests 8016 patent as part of Lin’s November 30, that Amgen made efforts to accelerate ex- 1984 8298 application that gave rise to the amination of the 8298 application. See, claims-in-suit. Roche does not dispute this e.g., Moore Decl. Ex. H–5, Petition to fact, but contends that it is sufficient that Make Special. Thus, it was the PTO, not the 8016 claims and Dr. Lin’s claims could Amgen, that caused the later-filed 8016 have been combined together in a continu- patent to issue before Dr. Lin’s 8298 appli- ation-in-part application filed some time cation. after Dr. Lin’s earlier filed 8298 applica- The Court therefore will apply the two- tion. See Def.’s Mem. Supp. Sum. J. at 14. way test. This argument rests on Roche’s contention that the 8119 application (from which the 2. Roche’s argument that the 8016 8016 patent claims priority) constitutes the patent discloses ‘‘purified recom- ‘‘earlier filed application.’’ The undisputed binant EPO’’ fails because ODP facts, however, are that the claims-in-suit analysis is confined to an exami- claim priority from the 8298 application. nation of the claim Thus, Dr. Lin’s 8298 application, filed No- [10] At its essence the ODP inquiry vember 30, 1984, is the one deemed ‘‘earli- asks: ‘‘Is the same invention being claimed er filed’’ as compared to the 8119 applica- twice?’’ Gen. Foods, 972 F.2d at 1278. tion, which was not filed until June 20, 8 1985. See 35 U.S.C. § 120. Therefore, Claim 10 of the 016 patent is drawn to a the first requirement of the two-way test is seven-step process for recovering a puri- satisfied. fied recombinant EPO. Claim 10 does not purport to teach the production of recom- Second, Amgen did not delay examina- binant EPO. Lodish Decl. ¶ 44. ‘‘Recombi- tion of Dr. Lin’s earlier-filed 8298 applica- nant erythropoietin’’ is a different invention during the ‘‘co-pendency’’ period or tion than the recovery process taught in cause the later-filed 8016 patent to issue claim 10. The Court must therefore con- before Dr. Lin’s patents-in-suit. Dr. Lin’s clude that the scope of claim 10 is not 8298 application was filed on November 30, identical to the scope of the claims-in-suit. 1984. Moore Decl. Ex H–1, U.S. Patent See In re Goodman, 11 F.3d at 1052. De- Application No. 06/675,298, at spite Roche’s urging, the Court cannot AM67067625. The patents-in-suit issued conclude that these differences are obvi- between 1996 and 1999. See U.S. Patent ous. No. 5,547,933 (issued August 20, 1996); U.S. Patent No. 5,756,349 (issued May 26, [11, 12] Roche’s argument that claim 1998); U.S. Patent No. 5,955,422 (issued 10 is obvious over the claims-in-suit be- September 21, 1999). The 8119 application cause it contains the term ‘‘recombinant was filed on June 20, 1985, and the 8016 erythropoietin’’ is premised on the fatally patent issued on May 19, 1987. See U.S. flawed assumption that the Court must Patent No. 4,667,016. Thus, the relevant look to 8016 patent specification—including co-pendency period is from June 20, 1985 the earlier teachings of Dr. Lin’s own pat- (the 8016 filing date) to May 19, 1987 (the ent application as incorporated by refer- 8016 issuance date). During the co-pen- ence in the 8016 specification—as though dency period, Amgen did not request or they both constituted prior art to Dr. Lin’s receive any extensions of time to prosecute 8298 patent claims. To the contrary, the Dr. Lin’s 8298 application, nor did it delay Federal Circuit has made clear that examination of the 8298 application in any ‘‘[d]ouble patenting is altogether a matter 178 581 FEDERAL SUPPLEMENT, 2d SERIES

of what is claimed.’’ Gen. Foods, 972 F.2d Federal Circuit analyzed the claims’ scope at 1277. ‘‘[T]he disclosure TTT cannot be and utility by looking not only to the used as though it were prior art, even claims themselves but also to the specifica- where the disclosure is found in the tions. The Federal Circuit explained: claims.’’ Id. at 1281 (emphasis in origi- [T]his court does not consider the Flem- nal); see also In re Braat, 937 F.2d 589, ing claim in a vacuum, as a simple com- 594 n. 5 (Fed.Cir.1991). As the Court of pound, without considering the com- Customs & Patent Appeals explained in In pound’s disclosed utilityTTTTT Standing re Aldrich, 55 C.C.P.A. 1431, 398 F.2d 855 alone, that claim does not adequately (C.C.P.A.1968): disclose the patentable bounds of the Obviousness-type double patenting re- invention. Therefore, this court exam- jections TTT are based on the premise ines the specifications of both patents to that an applicant is claiming no more ascertain any overlap in the claim scope than an obvious variation—which would for the double patenting comparison. A be obvious to anyone of ordinary skill in person of ordinary skill in the art re- the art—of an invention on which a pat- viewing the disclosure of the Fleming ent has already been grantedTTTT To patent would recognize a single use for that end, patent claims are looked to potassium clavulanate, administration to only to see what has been patented, the patients to combat bacteria that produce subject matter which has been protect- [beta]-lactamaseTTTT The Fleming pated, not for something one may find to be ent discloses no other use. The 8720 disclosed by reading them. patent simply claims that use as a meth- Id. at 859. od. Thus, the 8016 patent and Dr. Lin’s ap- Id. at 1385 (emphasis added)(internal cita- plication incorporated therein are not prior tions omitted). art for purposes of the two-way ODP anal- Geneva is inapposite. Here, unlike Ge- ysis. In fact, Dr. Lin’s patent applications neva, the limitations adequately set forth were not publicly disclosed or available as the metes and bounds of the claim. And it prior art as of the date of the Lai & is clear that the claim is drawn to a partic- Stickland EPO purification invention re- ular purifying recombinant EPO that has flected in the 8016 patent (the legally rele- already been produced. The claim does vant date for the ODP analysis). As far as not describe the polypeptide or the process the ordinarily skilled artisan at the time by which it is made. Geneva is inapplica- was concerned, there was no ‘‘recombinant ble because the sole utility of the 8016 erythropoietin.’’ patent is purifying EPO for the patents in Nevertheless, in support of its argument suit. In fact, even if Roche is right that that the Court ought look to the specifica- the 8016 and the current patents literally tion, Roche relies on Geneva Pharmaceuti- overlap—all mentioning EPO—it does not cals, Inc. v. GlaxoSmithKline PLC, 349 follow that the patents in suit are the F.3d 1373 (Fed.Cir.2003). In Geneva the ‘‘single use’’ for EPO.7

7. The Federal Circuit’s recent decision in Pfiz- neva, which permitted the court to look at the er, Inc. v. Teva Pharmaceuticals USA, Inc., 518 specification where the metes and bounds F.3d 1353 (Fed.Cir.2008), does not alter the were not immediately apparent. See Geneva, outcome. In Pfizer, the Federal Circuit noted 349 F.3d at 1385. Here, the scope of claim that ‘‘[t]here is nothing that prevents us from 10 is clear; it claims a seven-step process for looking to the specification to determine the purifying recombinant EPO. The claim does proper scope of the claims.’’ Id. at 1363 n. 8. The Court reads Pfizer as consistent with Ge- AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 179 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

Thus, claim 10 and the claims-in-suit are satisfied both the statutes strictures as patentably distinct. On the basis of this well as the consonance requirement. conclusion, the Court denied Roche’s motion for summary judgment on ODP [Doc. 1. Amgen filed the 8178 and 8179 ap- No. 490] with respect to the 8016 patent plications in response to the PTO- and granted Amgen’s [Doc. No. 498]. imposed restriction requirement After the PTO imposed the 1986 restric- D. THE COURT GRANTED AMGEN’S CROSS tion requirement, Amgen restricted the MOTION FOR PARTIAL SUMMARY JUDG- claims prosecuted in Dr. Lin’s 8298 applica- MENT OF NO ODP OVER THE CLAIMS tion to one invention (Lin’s DNA claims), IN THE 8008 PATENT BECAUSE AMGEN which ultimately issued as the 8008 patent. WAS ENTITLED TO THE SAFE HARBOR It filed two divisional applications, the 8178 CODIFIED AT 35 U.S.C. § 121 and 8179, which ultimately issued as the The third sentence of 35 U.S.C. § 121 8933, 8422, and 8349 patents. The undis- provides: puted evidence shows that both the 8178 A patent issuing on an application with and 8179 applications were filed as a result respect to which a requirement for re- of the PTO’s 1986 restriction requirement. striction under this section has been Thus, Amgen has met its burden with made, or on an application filed as a respect to the first part of the safe harbor result of such a requirement, shall not inquiry. The Court now considers wheth- be used as a reference either in the er Amgen maintained consonance. Patent and Trademark Office or in the courts against a divisional application or 2. Amgen satisfied the consonance against the original application or any requirement patent issued on either of them, if the [14–16] As noted above, claims in a divisional application is filed before the divisional application are only immune issuance of the patent on the other ap- from an obviousness-type double patent- plication. ing rejection when strict consonance [13] The applicability of this safe har- exists between the earlier restriction bor provision is matter of law. ‘‘In addi- requirement and the claims later prose- tion to the express requirements of section cuted. Bristol–Myers Squibb Co. v. 121, [the Federal Circuit has] construed Pharmachemie B.V., 361 F.3d 1343, the statute to require consonance: the ap- 1348 (Fed.Cir.2004); Geneva Pharms., plicant must maintain the line of demarca- Inc. v. GlaxoSmithKline PLC, 349 F.3d tion between the independent and distinct at 1381; Gerber Garment Tech., Inc. v. inventions that prompted the restriction Lectra Sys., Inc., 916 F.2d 683, 688 requirement.’’ Pfizer, Inc. v. Teva (Fed.Cir.1990). ‘‘Consonance requires Pharms. USA, Inc., 518 F.3d 1353, 1359 that the line of demarcation between (Fed.Cir.2008). Thus, the Court must de- the ‘independent and distinct inventions’ termine 1) whether the three applications that prompted the restriction require- at issue were in fact filed in response to a ment be maintainedTTTT Where that PTO imposed restriction requirement; and line is crossed the prohibition of the 2) whether Amgen remained faithful to the third sentence of Section 121 does not restriction requirements. As set forth be- apply.’’ Gerber, 916 F.2d at 688. low, the Court concludes that Amgen has ‘‘[N]ew or amended claims in a divi-

not contemplate the production of recombinant EPO. 180 581 FEDERAL SUPPLEMENT, 2d SERIES

sional application are entitled to the canceling certain of the 8298 claims so that benefit of [section] 121 if the claims do only subsets of those claims were included not cross the line of demarcation in the 8178 and 8179 applications as filed. drawn around the invention elected in See Moore Decl. Ex. P–1, PATENT AND the restriction requirement.’’ Symbol TRADEMARK OFFICE, MANUAL OF PATENT EX- Techs., 935 F.2d at 1579. In delineat- AMINING PROCEDURE § 201.06(a) (5th ing the scope of the groups, the prop- Ed.1983) (outlining regulations for ‘‘[c]on- er point of reference is the actual re- tinuing or divisional application[s] for in- striction groupings (i.e., the substance vention disclosed in a prior application’’). of the claims in each restriction group), In keeping with the 1986 restriction re- not the examiner’s written descriptions quirement and the election of Group II, thereof. Texas Instruments Inc. v. Amgen canceled all claims belonging to ITC, 988 F.2d 1165, 1179 (Fed.Cir. Group II and selected only claims belong- 1993). ing to the non-elected restriction groups Here, the 8933, 8349 and 8422 patent for filing in the 8178 and 8179 applications. claims are consonant with the PTO’s 1986 The 8178 application as filed contained restriction requirement. See Pl.’s Rep. Br. original claims 1–13, 16, 39–41, 47–49, and Supp. Sum. J. No ODP [Doc. 676] at 3–12. 55–57, which the PTO had assigned to Under 35 U.S.C. § 121, the 1986 restric- restriction Groups I and V. See Moore tion requirement mandated that Amgen Decl. Ex. I, U.S. Patent Application No. confine its inventions to the following 07/113,178, at AMITC 00941037–45, AM– groups: ITC 00941076–77; Moore Decl. Ex H–8, I. Claims 1–13, 16, 39–41, 47–54 and Office Action, July 3, 1986, at 2. The 8179 59, drawn to polypeptide, classified application as filed contained original claim in Class 260, subclass 112. 1, which the PTO had assigned to restric- II. Claims 14, 15, 17–36, 58 and 61–72, tion Group I. See Moore Decl. Ex. J, U.S. drawn to DNA, classified in Class Patent Application No. 07/113,179 at AM– 536, subclass 27. ITC 004539820–90, AM–ITC 00454000–01; Moore Decl. Ex H–8, Office Action, July 3, III. Claims 37–38, drawn to plasmid, 1986, at 2. classified in Class 435, subclass 240. The Court is satisfied that Amgen complied with the restriction requirements. IV. Claims 42–46, drawn to cells, clas- To begin, the 8298 claims, which issued as sified in Class 435, subclass 240. the 8008 patent, fall within elected Group V. Claims 55–57, drawn to pharmaceu- II. Lodish Decl. ¶ 25. Moreover, the tical composition, classified in Class claims-in-suit fall within the scope of the 435, subclass 177. non-elected restriction groups. 8933 VI. Claim 60, drawn to assay, classified claims 1–8 (EPO glycoproteins and glyco- in Class 435, subclass 6. protein products) are drawn to ‘‘polypep- Lodish Decl. Ex. E–1, 8298 Prosecution, tide’’; 8933 claims 9–14 and 8422 claims 1–2 Paper 8 at 2. (pharmaceutical compositions and methods Amgen elected claims falling within re- of using same) are drawn to ‘‘pharmaceuti- striction Group II for further examination cal composition’’; and 8349 claims 1–7 (ver- in the 8298 application. See Lodish Decl. tebrate cells for producing EPO and pro- ¶ 20. Amgen then filed the 8178 and 8179 cesses for using same) fall within the scope applications by submitting a copy of the of Group IV because they are drawn to 8298 application (as originally filed) and ‘‘cells.’’ See id. ¶¶ 26–34. None of these AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 181 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

claims cross the line of demarcation drawn conclude that the 8422 and 8933 forfeited around the elected Group II. See id. the shelter provided by section 121. Roche argues that Amgen cannot avail Roche’s claim that the 8933 patent broke itself of section 121’s safe harbor because consonance by claiming a non-naturally oc- its prosecutions were not consonant with curring glycoprotein is also unpersuasive. the restriction requirement. First, Roche Roche argues that the only polypeptides contends that Amgen broke consonance by that satisfy the strictures of Group I are prosecuting claims from Group I and those that are isolated from a natural Group V in a single application. Def.’s source; the ‘‘non-naturally occurring gly- Mem. Opp. Sum. J. Of No ODP [Doc. No. coprotein’’ taught in claim 7, Roche em- 568] at 2. Similarly, Roche maintains that phasizes, can only be obtained with recom- during the prosecution of the 8422 patent binant DNA. Roche maintains that once Amgen broke consonance by combining Amgen modified gylcoprotein with ‘‘non- claims from Group V and Group VII in the naturally occurring’’ the claim was no same application. Id. In addition, Roche longer drawn to a polypeptide (Group I), avers that Amgen vitiated the restriction but instead to a DNA sequence (Group II). requirement by claiming a ‘‘non-naturally Were the Court’s examination confined occurring glycoprotein’’ in claim 7 of the solely to the Examiner’s written descrip- 8933 patent. See id. Finally, Roche con- tion of the groups, Roche’s argument tends that Amgen violated the restriction would have considerable force. The rela- requirement by converting verbrate cell vant line of demarcation, however, is ‘‘the claims into a process claim during the grouping restriction actually imposed by prosecution of the 8349 patent. Id. The the examiner.’’ Texas Instruments, 988 process claims of the 8349 patent, Roche F.2d at 1179. Roche does not dispute that argues, belong in the elected Group II. See the Examiner assigned some claims to id. Group I that were from non-naturally oc- To begin, Roche’s argument that Amgen curring sources. Thus, the Court cannot broke consonance by including claims in conclude that the inclusion of the term multiple restriction groups in the same ‘‘non-naturally occurring’’ broke conso- application lacks legal foundation. Under nance. Roche’s theory, Amgen was required to Finally, Roche contends that Amgen maintain strict consonance by filing a divi- broke consonance by separating the 8349 sional application for claims within each patent into Group IV. Roche maintains restriction group. Roche cites no case for that the 8349 patent belongs in Group II this proposition. The reason they are un- because Amgen added claim 7, a claim able to do so is that the available Federal drawn to the recombinant process of using Circuit precedent indicates that ‘‘new or vertebrate cells to produce EPO. Roche is amended claims in a divisional application mistaken. As noted above, restriction are entitled to the benefit of [section] 121 Group II was comprised of claims drawn if the claims do not cross the line of de- to DNA, while Group IV was drawn to marcation drawn around the invention cells. Lodish Decl. ¶¶ 23, 29. The mere elected in the restriction requirement.’’ addition of a process claim does not trans- Symbol Techs., 935 F.2d at 1579. Roche form a Group IV claim into a Group II does not allege that the 8933 or 8422 claims claim. As Amgen notes, ‘‘only 4 of the 35 blurred the line of demarcation around the claims assigned to Group II were process elected Group II. Thus, the Court cannot claims.’’ Pl.’s Rep. Br. Supp. Sum. J. No 182 581 FEDERAL SUPPLEMENT, 2d SERIES

ODP at 9. Moreover, the common feature is essential to [the] determination of obvi- of the Group II claims is that they ‘‘re- ousness-type double patenting issues.’’ quire[ ] a specific, purified, and isolated Gen. Foods, 972 F.2d at 1279 (capitaliza- DNA sequence, encoding either human or tion altered). It is the Court’s role, not monkey erythropoietin or an analog poly- the jury’s, to determine the metes and peptide related to erythropoietin in both bounds of the claimed inventions. See structure and function.’’ Lodish Decl. Markman v. Westview Instruments, Inc., ¶ 21. Claims 1–3, referenced in the pro- 517 U.S. 370, 384–91, 116 S.Ct. 1384, 134 cess taught in claim 7, merely require that L.Ed.2d 577 (1996). Accordingly, because the EPO DNA in the vertebrate cells ‘‘be ‘‘[d]ouble-patenting is altogether a matter transcriptionally controlled by ‘non-human of what is claimed,’’ Gen. Foods, 972 F.2d DNA sequences.’ ’’ Lodish Decl. ¶ 30. In at 1277, obviousness-type double patenting short, because the focus remains on the is an issue for the Court. Other district cells, the inclusion of claim 7 does not courts have agreed, ruling that decisions cause the 8349 claim to stray over the line regarding the ODP defense should be of demarcation into Group II. made by a judge, not a jury. See, e.g., Engineered Prods., 313 F.Supp.2d at 993 Accordingly, on the record before the (‘‘[T]he double-patenting defense will be Court, there were no genuine issues of fact tried to the court because it is a question to be decided and, thus, the Court granted of law.’’); Applera Corp. v. MJ Research Amgen’s motion for summary judgment Inc., 363 F.Supp.2d 261, 262 (D.Conn.2005) and held that Section 121 ‘‘insulates the (explaining that the Court reached ‘‘find- ensuing patents from the charge of double ings of fact and conclusions of law’’ regard- patenting.’’ Applied Materials, 98 F.3d at ing ODP based upon, inter alia, deposition 1568. testimony not introduced at trial as well as Given these rulings, the Court believed evidence submitted at trial). For these that it had put paid to the ODP issues in reasons, the Court here concluded that the this case. The Court was wrong. After ODP issue presented a matter for the extensive argument during the final pre- Court. trial conference, Roche convinced the After conducting hearings outside the Court that there remained genuine issues presence of the jury, the Court carefully of material fact for trial upon what the reviewed both ODP arguments that Roche parties came to call Roche’s theories 3 and put forward on the basis of the entire trial 4. record. For purposes of simplicity the Court and the parties referred to these E. FINDINGS AND RULINGS AFTER TRIAL arguments as theories number 3 and 4. And so the trial came. The Court was The Court presents its findings and rul- somewhat surprised (and concerned) that ings below. Roche focused heavily in its opening to the jury on double patenting issues, as though 2. Roche’s Theory Number 3 this were some sort of equitable defense. Roche’s theory number three argues that the asserted 8868 and 8698 claims are 1. Jury or Non-jury? invalid for ODP over the 8008 claims. The [17, 18] After careful reflection, the parties agree that the safe harbor provi- Court ruled on September 7, 2007 that sion delineated in section 121 does not obviousness double patenting ought not be apply to these claims. See, e.g., Resp. to submitted to the jury. ‘‘Determining what Roche’s Proposed Findings and Conclu- is patented by correct claim interpretation sions [Doc. 1628] ¶ 5. In order for section AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 183 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

121 to apply, the 8868 and 8698 patents ble-patenting due to section 121, the ques- would have to derive from a patent appli- tion becomes whether the defendant has cation that was subject to a restriction met its burden of proving the ODP de- requirement; furthermore, the claims of fense. As with other affirmative defenses the 8868 and the 8698 patents would have of invalidity, the defendant bears the bur- to address an invention distinct from the den of proving ODP by clear and convinc- elected invention prosecuted by way of the ing evidence. Symbol Techs., 935 F.2d at original application. See, e.g., Gerber, 916 1580. F.2d at 688. Here, however, both the 8008 As described part III.A, the ODP analy- claims and the asserted claims of the 8868 sis entails two steps. First, the Court and 8698 patents fall within Group II of the construes the claims and determines PTO’s 1986 Restriction Requirement. whether there are any differences. Eli Therefore, because section 121 does not Lilly, 251 F.3d at 968. Second, to the apply as between patents that contain extent that differences exist, the Court claims belonging to the same restriction must determine whether the distinctions group, no safe harbor protection exists. are sufficient to render the claims patent- [19] When a claim is not immunized ably distinct. Id. The Court will consider from allegations of obviousness-type dou- the 8868 patent first:

8008 claims 2, 4, 6, 7, 25, 27 8868 claims 1–2

2. A purified and isolated DNA sequence 1. A process for the production of glycosylat- consisting essentially of a DNA sequence ed erythropoietin polypeptide having the in encoding human erythropoietin. vivo biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells comprising the steps of: (a) growing, under suitable nutrient conditions, mammalian host cells transformed or transfected with an isolated DNA sequence encoding human erythropoietin; and (b) isolating said glycosylated erythropoietin polypeptide therefrom.

4. A procaryotic or eucaryotic host cell trans- 2. The process according to claim 1 wherein formed or transfected with a DNA sequence said host cells are CHO cells. according to claim 1, 2 or 3 in a manner allowing the host cell to express erythropoietin.

6. A procaryotic or eucaryotic host cell stably transformed or transfected with a DNA vector according to claim 5.

7. A purified and isolated DNA sequence consisting essentially of a DNA sequence encoding a polypeptide having an amino acid sequence sufficiently duplicative of that of erythropoietin to allow possession of the biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells, and to increase hemoglobin synthesis or iron uptake.

184 581 FEDERAL SUPPLEMENT, 2d SERIES

[23. A procaryotic or eucaryotic host cell transformed or transfected with a DNA sequence according to claim 7 TTT in a manner allowing the host cell to express said polypeptide.]

25. A transformed or transfected mammalian host cell according to claim 24.

27. A transformed or transfected CHO cell according to claim 25.

[20] Roche argues that the 8008 claims cells, while the claims of the 8008 patent provided: (1) a ‘‘mammalian host cell’’ (2) claim only certain DNA molecules and cer- that is ‘‘transformed or transfected’’ (3) tain cells transformed or transfected with with ‘‘a purified and isolated DNA se- said DNA molecules. Id. (asserting that, quence consisting essentially of a DNA unlike the 8868 patent, the 8008 patent sequence encoding a polypeptide having an does not ‘‘claim a process for producing amino acid sequence sufficiently duplica- anything’’). tive of that of erythropoietin.’’ Roche fur- In other words, Amgen explains, ‘‘the ther asserts that 8008 claims provide that 8008 claims are directed to purified and (4) the cell is transfected in such a way ‘‘to isolated DNA sequences and cells into allow possession of the biological property’’ which such DNA sequences have been in- of erythropoietin, which is (5) stimulating troduced. In contrast, the 8868 claims 1 red blood cell formation, or ‘‘causing bone and 2 are process claims that recite the marrow cells to increase production of reti- steps required to produce a glycosylated culocytes and red blood cells.’’ Def.’s polypeptide having specified characteris- Mem. on ODP [Doc. 1550] at 14–15. tics.’’ Id. at 41 (emphasis added). ‘‘Un- Roche reasons that claim 1 of the 8868 like the asserted claims of the 8868 patent, patent therefore simply tells one skilled in none of the 8008 claims require: (1) that the art to ‘‘take the cells that were claimed the recited host cell actually express any in the 8008 patent and grow them, let[ting] EPO polypeptide; (2) that the recited host them do what they normally do.’’ Id. at 15 cell actually express a glycosylated EPO (quoting testimony of Dr. Lowe). Similar- polypeptide; (3) that the host cell be capa- ly, Roche asserts that claim 2 of the 8868 ble of producing an isolatable amount of a patent, which specifically contemplates us- glycosylated EPO polypeptide; and (4) ing CHO cells, is obvious given the fact that any glycosylated EPO isolated from that the 8008 patent also claimed the use of cells grown in culture have the stated in CHO cells. Id. vivo function.’’ Id. These differences, ac- Amgen, on the other hand, argues that cording to Amgen, render the 8868 claims the differences between the patents are distinct from the 8008 claims. ‘‘several’’ and ‘‘significant.’’ Pl.’s Mem. on The Court agrees. Simply having the No ODP [Doc. 1310] at 40. In particular, starting material (which is reflected in the Amgen asserts that the 8868 patent claims 8008 patent) and knowing that, in theory, it (1) processes for making (2) isolatable can be used to create proteins is not the quantities of a glycosylated EPO polypep- equivalent of having an actual process that tide (3) having the in vivo biological activi- successfully does so. See id. at 40 (quot- ty of causing bone marrow cells to increase ing testimony of Dr. Lodish). Roche has production of reticulocytes and red blood failed to meet its burden of demonstrating AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 185 Cite as 581 F.Supp.2d 160 (D.Mass. 2008) by clear and convincing evidence that no that the 8868 claims are different from the patentable difference exists between the claims of the 8008 patent. 8008 and 8868 patents. Accordingly, the Court finds that the 8868 claims are not The Court now considers the ODP alle- anticipated by the 8008 patent and rules gations with regard to the 8698 patent:

8008 claims 2, 4, 6, 7, 25, 27 8698 claims 6–9 2. A purified and isolated DNA sequence 6. A process for the production of a glycosy- consisting essentially of a DNA sequence lated erythropoietin polypeptide having the encoding human erythropoietin. in vivo biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells comprising the steps of: (a) growing, under suitable nutrient conditions, vertebrate cells comprising amplified DNA encoding the mature erythropoietin amino acid sequence of [figure] 6, and (b) isolating said glycosylated erythropoietin polypeptide expressed by said cells.

4. A procaryotic or eucaryotic host cell trans- 7. The process of claim 6 wherein said formed or transfected with a DNA sequence vertebrate cells further comprise amplified according to claim 1, 2 or 3 in a manner marker gene DNA. allowing the host cell to express erythropoietin.

6. A procaryotic or eucaryotic host cell stably 8. The process of claim 7 wherein said ampli- transformed or transfected with a DNA fied marker gene DNA is Dihydeofolate vector according to claim 5. reductase (DHFR) gene DNA.

7. A purified and isolated DNA sequence 9. The process according to claims 2, 4, and 6 consisting essentially of a DNA sequence wherein said cells are mammalian cells. encoding a polypeptide having an amino acid sequence sufficiently duplicative of that of erythropoietin to allow possession of the biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells, and to increase hemoglobin synthesis or iron uptake.

[23. A procaryotic or eucaryotic host cell transformed or transfected with a DNA sequence according to claim 7 TTT in a manner allowing the host cell to express said polypeptide.]

25. A transformed or transfected mammalian host cell according to claim 24.

27. A transformed or transfected CHO cell according to claim 25.

The parties basically reiterate the argu- reasoning is likewise similar. Of particu- ments made with regard to the 8868 pat- lar importance to the Court are the two ent. See Def.’s Mem. on ODP at 17; Pl.’s additional limitations included in the 8698 Mem. on No ODP at 44. The Court’s 186 581 FEDERAL SUPPLEMENT, 2d SERIES

claims: (1) the requirement of ‘‘amplified and 8698 claims patentably distinct from DNA encoding the mature erythropoietin those in the 8008 patent, and this Court sequence of [figure] 6’’ and (2) the require- agrees. ment of ‘‘amplified marker gene DNA.’’ No The Court also finds unpersuasive such requirements are present in the 8008 Roche’s argument that judicial estoppel claims. And, like with the 8868 claims, applies to prevent Amgen from making 8698 process is designed to produce a gly- arguments, when defending against the cosylated in vivo biologically active EPO ODP allegations, that Roche asserts are product. To be able to produce such a inconsistent with Amgen’s prior represen- product from cells containing multiple cop- tations to the PTO. See Def.’s Mem. on ies of EPO DNA would have been novel to ODP at 24. In particular, Roche asserts one skilled in the art at the time of the invention (even if the skilled artisan had that because Amgen stated that the 8008, possession of the product claimed in the 8868, and 8698 patents are manifestations 8008 patent). Accordingly, the Court rules of a single invention, it is now barred from that the 8698 is a different process than asserting that the relevant claims are pat- the product obtained from the 8008 patent. entably distinct. Id. at 24–25. [21, 22] The second step in the ODP [23–25] ‘‘[T]he doctrine of judicial es- analysis, after identifying the differences toppel prevents a litigant from pressing a between the claims at issue, is to deter- claim that is inconsistent with a position mine whether those differences in subject taken by that litigant either in a prior legal matter render the later-issued claim pat- proceeding or in an earlier phase of the entably distinct from the earlier-issued same legal proceeding.’’ InterGen N.V. v. claim. In re Metoprolol Succinate Patent Grina, 344 F.3d 134, 144 (1st Cir.2003) Litig., 494 F.3d 1011, 1016 (Fed.Cir.2007). (citing Pegram v. Herdrich, 530 U.S. 211, A later-claimed invention is patentably dis- 227 n. 8, 120 S.Ct. 2143, 147 L.Ed.2d 164 tinct (and therefore not invalid for ODP) if (2000)). The doctrine’s primary purpose is that invention as a whole would not have to safeguard the integrity of the courts by been obvious over the earlier-claimed in- preventing parties from manipulating the vention to a person of ordinary skill in the machinery of the judicial system. See art at the time just before the later- New Hampshire v. Maine, 532 U.S. 742, claimed invention was made. See id. 749–50, 121 S.Ct. 1808, 149 L.Ed.2d 968 Here, the credible evidence shows, and the (2001); United States v. Levasseur, 846 Court so finds, that each invention claimed F.2d 786, 792 (1st Cir.1988). Judicial es- in the 8868 and 8698 asserted claims is toppel also applies to arguments and posi- patentably distinct from each invention tions presented to the PTO from which the claimed in the 8008 patent. Thus, the Court rejects Roche’s Theory Number 3 patentee gained a benefit. See Lampi ODP defense. In other words, Roche’s Corp. v. American Power Prods., Inc., 228 argument that the 8008 patent renders the F.3d 1365, 1377 (Fed.Cir.2000) (applying asserted claims of the 8868 and 8698 pat- judicial estoppel to proceedings before ents obvious because, once one skilled in PTO when doing so was dictated by the the art had possession of the EPO DNA law of the circuit from which the case sequence, growing the cells and culturing originated); Portela–Gonzalez v. Secretary them to obtain a protein with the charac- of the Navy, 109 F.3d 74, 78 (1st Cir.1997) teristics claimed in the 8868 and 8698 pat- (‘‘Equitable doctrines of estoppel apply in ents required no inventive effort in 1983 or administrative and judicial fora, and a par- 1984 is rejected. The PTO found the 8868 ty cannot take one position in [a] TTT AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 187 Cite as 581 F.Supp.2d 160 (D.Mass. 2008) administrative proceeding and then dis- DNA sequence encoding human EPO claim it in a subsequent suit arising out of [i.e., the process patent claims], and the the agency proceedings.’’) (internal citation litigation was directed to the purified omitted); see also Analog Devices, Inc. v. and isolated DNA sequence and host Linear Tech. Corp., 479 F.Supp.2d 202, 212 cells transfected or transformed thereby (D.Mass.2007)(Harrington, J.). [i.e., the 8008 DNA claims], it is evident [26] Two requirements must be satis- that these are only different manifesta- fied in order to invoke judicial estoppel. tions of the same inventionTTTT Clearly, First, the prior position must be directly the whole purpose and intent of the inconsistent with the present position. purified and isolated DNA sequence en- Faigin v. Kelly, 184 F.3d 67, 82 (1st Cir. coding human EPO (and host cells 1999); see also Levasseur, 846 F.2d at 794. transfected therewith) at issue in the Second, the responsible party must have litigation was to express in vivo biologi- succeeded in persuading a court to accept cally active human EPO. Stated other- its prior position. See Faigin, 184 F.3d at wise, the process language of the Lin 82 (explaining party being estopped must patent claims at issue in the litigation succeed utilizing inconsistent position); (‘‘encoding human EPO’’) [see 8008 pat- Lydon v. Boston Sand & Gravel Co., 175 ent claims] is, for all intents and pur- F.3d 6, 13 (1st Cir.1999) (same). Courts poses, a description of the present count. also often inquire as to whether judicial Def.’s Mem. on ODP at 27 (quoting Brief acceptance of a party’s initial position con- for the Senior Party Lin, Interference No. ferred a benefit on that party. See, e.g., 102,097, dated July 29, 1991, at 25–26). Patriot Cinemas, Inc. v. General Cinemas Roche asserts that these statements indi- Corp., 834 F.2d 208, 213 (1st Cir.1987); cate that Amgen acknowledged that the Levasseur, 846 F.2d at 793. patents at issue all reflect a single inven- [27] In this case, Roche fails to satisfy tion, contrary to its representations to this the first requirement. Roche has put for- Court. See id. at 25. ward virtually innumerable arguments in At first blush, this argument seemed support of the idea that Amgen has taken compelling. When the statement is put in inconsistent positions. See Def.’s Mem. on the context of the whole interference, how- ODP at 24–33. After careful review of ever, an entirely different coloration each and every one of these arguments as emerges. Roche’s quote omits the refer- well as its supporting documents, however, ence to the adverse party in the interfer- the Court finds that no actual inconsisten- ence: Fritsch. A detailed reading of the cy exists. 8097 Lin brief reveals that Amgen was The first alleged contradiction concerns referring to Fritsch’s position in order to Amgen’s statements to the PTO made in prove that, even under Fritsch’s own theo- the context of the 8096 and 8097 interfer- ry, Amgen had priority. In other words, ences. Id. at 27–30. Roche cites a Amgen was saying to the Interference paragraph entitled ‘‘Summary of Lin’s Board that (1) given Fritsch’s own admis- Positions’’ from a brief Amgen filed in sions and (2) taking into account Judge connection with the 8097 interference, in Saris’ decision in Amgen, Inc. v. Chugai which Amgen stated: Pharm. Co., No. 87–2617–Y, 1989 WL While the count is directed to a process 169006 (D.Mass. December 11, 1989), for preparing in vivo biologically active Fritsch would never be able to establish EPO using a mammalian host cell trans- that he had invented the Process Count fected or transformed with an isolated before Lin. This is not the equivalent of 188 581 FEDERAL SUPPLEMENT, 2d SERIES

adopting Frisch’s reasoning, as Roche as- Court is satisfied with mentioning the most serts, see Def.’s Mem. on ODP at 27; in- compelling ones. As for the rest, the stead, Amgen simply was pointing out that Court has taken them into account but, even if Fritsch’s arguments were credited failing to see factual or legal merit in Fritsch would still lose. them, summarily denies them. Roche also asserts that Amgen contra- dicts itself here because Amgen indicated 3. Roche’s Theory Number 4 it did not consider ‘‘in vivo biological activi- [28, 29] Roche’s last attempt to invali- ty to provide a patentable distinction over date the 8933, 8422, and 8349 patents rests the EPO DNA sequence,’’ which is incon- on the contention that they would have sistent with Amgen’s arguments to this been obvious to one skilled in the art over Court. See Def.’s Mem. on ODP at 27–33. the claims of the 8868 and 8698 patents and Roche again relies upon the theory that that any distinctions between the claims of Amgen adopted Fritsch’s arguments and the former and latter group are not pat- admitted that, once a skilled artisan had entable. Def.’s Mem. on ODP at 4. If the DNA sequence, the new claims would Amgen is eligible to invoke the safe harbor be obvious. As explained above, however, provision of 35 U.S.C. § 121, Roche would a detailed reading of the Lin’s 8097 inter- be unable to succeed on this theory. In ference reveals that Amgen was putting order to benefit from the protection of- forward all the information regarding pri- fered by section 121, it must be true both ority of invention, not adopting this obvi- that (a) the 8933, 8422, and 8349 patents ousness theory. arose from an application that was the Finally, a third alleged contradiction, result of a PTO restriction requirement, which initially caught the Court’s atten- and (b) the claims of those patents are tion, also ultimately fails. Roche asserts consonant with the restriction require- that Amgen’s arguments in the 8096 and ment. Gerber, 916 F.2d at 687–88. 8097 interferences are the basis upon which the Interference Board relied when The first of these requirements has al- ruling that Amgen’s work ‘‘relating to ex- ready been addressed in this decision. In pression of the EPO gene in mammalian granting partial summary judgment, this host cells and isolation of the resulting Court ruled that the 8933, 8422, and 8349 glycoprotein product involved [nothing] patents were filed as a result of the 1986 more than the exercise of ordinary skill by restriction requirement. practioners in the field.’’ Id. at 32. Roche With regard to consonance, in issuing reasons that the Interference Board’s con- the 1986 restriction requirement, the exclusion demonstrates that Amgen itself ad- aminer broke the claims put forth in the vocated that there was ‘‘nothing novel or 8298 application into six groups: inventive in making glycosylated biologi- I. Claims 1–13, 16, 39–41, 47–54 and cally active EPO.’’ Id. Nowhere, however, 59, drawn to polypeptide, classified does the Interference Board’s decision ad- in Class 260, subclass 112. dress the issue of obviousness; rather, its decision appears driven by the issue of II. Claims 14, 15, 17–36, 58 and 61–72, priority and Fritsch’s concession, not any drawn to DNA, classified in Class argument by Amgen. 536, subclass 27. As mentioned, Roche’s memoranda are III. Claims 37–38, drawn to plasmid, full of other alleged inconsistencies. For classified in Class 435, subclass the purposes of this decision, however, the 240. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 189 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

IV. Claims 42–46, drawn to cells, clas- in-suit, Amgen canceled claims, amended sified in Class 435, subclass 240. claims, and added new claims. As a result, V. Claims 55–57, drawn to pharmaceu- the issued claims in the patents-in-suit are tical composition, classified in Class not identical to the original claims filed in 435, subclass 177. the 8178 and 8179 applications. All of the VI. Claim 60, drawn to assay, classified claims of the 8933, 8349, and 8422 patents, in Class 435, subclass 6TTTTT however, fall within the scope of the non- Because these inventions are distinct for elected restriction groups: the 8933 patent the reasons given above and have ac- claims fall within the scope of restriction quired a separate status in the art be- Groups I and V, the 8422 patent claims fall cause of their recognized divergent sub- within restriction Group V, and the 8349 ject matter, restriction for examination patent claims fall within restriction Group purposes as indicated is proper. IV. None of the claims in these patents fall Lodish Decl. Ex. E–1, 8298 Prosecution, within the scope of restriction Group II, Paper 8 at 2. ‘‘Restriction [of the applica- which was prosecuted to issuance in the tion] to one of the[se six] inventions [was] 8008 patent. In contrast, the issued claims required under 35 U.S.C. § 121.’’ Id. Am- of the 8868 and 8698 patents fall within the gen accordingly selected the Group II scope of restriction Group II. claims for continued examination in the Roche does not seem to contest these 8298 application. Moore Decl. Ex. H–8, factual findings. In its memoranda, how- Office Action, at AM–ITC 00952502. The ever, Roche argues two propositions. other, non-elected claims were cancelled First, in order for section 121 to apply, from the application. Id. Although Amgen Roche asserts that each of the patents at initially elected all of the Group II claims, issue—the 8933, 8422, and 8349, as well as which included DNA, host cell, and process the 8868 and 8698 patents—must have aris- 8 claims, for further prosecution in the 298 en from applications filed as a result of a application, it also later cancelled the pro- restriction requirement. Def.’s Mem. on cess claims after it became apparent that Consonance [Doc. 1548] at 3–5. Second, the PTO would not allow issuance of those Roche argues that the 8868 and 8698 pat- claims based on In re Durden, 763 F.2d ents did not maintain consonance with the 1406 (Fed.Cir.1985). Moore Decl. Ex. H– restriction requirement, defeating Amgen’s 13, Office Action, at AM–ITC 00952592; ability to invoke section 121. Id. at 7–8. id. Ex. H–14, Examiner Interview Sum- The premise underlying both arguments is mary Record, at AM–ITC 00952596; id. that the two section 121 prerequisites must Ex. H–15, Applicant’s Amendment and Re- be satisfied both by the allegedly invalid ply, at AM–ITC 00952599. On October 27, 1987, Dr. Lin’s 8298 application issued as patent and by the patent asserted as the the ’008 patent. Consistent with Amgen’s ODP reference. Id. at 3. election to have Group II claims examined Based on the plain language of section in the 8298 application, all of the 8008 121, the Court agrees with Roche’s first patent claims fall within the scope of re- premise: that the prior art, as well as the striction Group II. allegedly invalid patent, must have arisen On October 23, 1987, Amgen filed two from applications filed as a result of a new applications: the 8178 application and restriction requirement. Section 121 the 8179 application. During prosecution states that ‘‘a patent issuing on an applica- of the these applications, as well as subse- tion with respect to which a requirement quent applications leading to the patents- for restriction TTT has been made, or [issu- 190 581 FEDERAL SUPPLEMENT, 2d SERIES

ing] on an application filed as a result of The Court also rejects Roche’s late-aris- such a requirement, shall not be used as a ing argument that the 8868 and 8698 pat- reference against’’ the divisional applica- ents must have maintained consonance tion, the original application, or any patent with the 8008 patent in order to be re- issuing therefrom. 35 U.S.C. § 121. In moved as a reference for the 8933, 8342, other words, section 121 cannot be invoked and 8433 patents. As an initial matter, to remove a patent as prior art unless that none of the cases cited by Roche explicitly patent issued from an application subject require this be the case. Indeed, although to a restriction requirement or an applica- Roche asserts that ‘‘case law makes clear tion as a result of that restriction. that consonance is relevant to determining whether a patent may be used as a refer- The fact that Roche has correctly identi- ence,’’ Def.’s Mem. on Consonance at 6, it fied the limits imposed by section 121 on fails to cite any cases standing for this immunized prior art, however, does not alleged rule immediately thereafter. See help its cause. This Court concluded at id. Instead, it attempts to reach this con- the time it granted summary judgment, as clusion in a roundabout way by citing later it does now, that the 8178 and 8179 applica- to three cases—Applied Materials, Sym- tions were filed as a result of a restriction bol Technologies, and Geneva Pharmaceu- requirement. See supra part II.D.1. The ticals—that stand for the proposition that 8868 patent issued from the 8179 applica- consonance is maintained ‘‘as long as the tion; accordingly, it is among those pieces amended claims preserved the Examiner’s of prior art to which section 121 may ap- demarcation between claim groups.’’ Id. ply. In Geneva Pharmaceuticals, however, the The 8698 patent, however, issued from court did not analyze consonance with re- the 8381 application, which was a continua- gard to the relevant patents because it tion of the 8179 application. The scope of concluded that the restriction requirement prior art immunized by section 121 none- failed sufficiently to delineate the subject theless appears to extend to the 8698 pat- matter such that consonance could be as- ent. The Federal Circuit has, when apply- sessed. See Geneva Pharms., 349 F.3d at ing section 121 to allegedly invalid patents, 1381–82. This case thus does not advance permitted its protections to be extended to Roche’s argument even implicitly. patents issuing from applications that were The Court finds another case relied continuations of applications filed as a re- upon by Roche, Applied Materials, quite sult of a restriction requirement. See, e.g., instructive, but not in the way Roche Symbol Techs., 935 F.2d at 1579–80; 8 Ap- would hope. In Applied Materials, the plied Materials, 98 F.3d at 1567–69. Federal Circuit analyzed the validity of a There is no apparent reason why the same patent, the 8609 patent, issuing from a rule should not apply on the other side of divisional application resulting from a re- the equation. striction requirement by reference to two

8. Pfizer, Inc. v. Teva Pharmaceuticals USA, in-part application filed in lieu of a divisional Inc. does not invalidate this precedent. As an application when responding directly to a re- initial matter, Pfizer did not name Symbol striction requirement. Id. at 1362. It said Technologies as one of the decisions that was nothing about what happens if an applicant possibly at odds with the Pfizer decision. See files a divisional application—which is eligi- Pfizer, 518 F.3d at 1362 (naming other cases). ble for section 121’s safe harbor—and then Furthermore, Pfizer addressed the scope of files a continuation application to that divi- section 121 in the context of a continuation- sional application. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 191 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

other patents. One reference patent, the by filing a terminal disclaimer). Indeed, 8712 patent, issued from the original par- the effective date of the 8496 patent’s dis- ent application upon which the restriction claimer, November 30, 1988, indicates that was imposed. See Applied Materials, Inc. it was designed to resolve double patenting v. Advanced Semiconductor Materials concerns arising from the 8712 patent. See Am., Inc., 1994 WL 362005, at *2 Applied Materials, 1994 WL 362005, at *1 (N.D.Cal.1994). The second reference pat- (noting 8712 patent expired in 1988); U.S. ent, the 8496 patent, issued from a second Patent No. 3,623,712 (noting issuance date divisional application. See Applied Mate- of November 30, 1971). The only reason, rials, 98 F.3d at 1567. When determining meanwhile, that a terminal disclaimer the applicability of section 121, the court would be required is if section 121 did not focused its consonance analysis on the al- immunize the 8712 patent as a reference legedly invalid patent as opposed to the for double patenting, suggesting that the reference patents, see id. at 1568–69, and 8496 patent did not maintain consonance ultimately concluded that ‘‘consonance was with the 8712 parent.9 not violated, for the process claims [re- In any event, the Applied Materials flected in the challenged 8609 patent] re- court applied section 121 and upheld the mained in the separate patents from the district court’s determination that the 8609 apparatus claims [reflected in the 8496 and patent was not invalid for double patenting 8712 patents],’’ id. at 1568. over both the 8712 patent and the 8496 [30] While the Applied Materials court patent. Applied Materials, 98 F.3d at looked to the two reference patents to 1569. In doing so, it indicated that the determine whether they covered the same relevant inquiry—to the extent that the material as the allegedly invalid 8609 pat- substance of the reference art determines ent, notably it did not ask whether the 8496 whether section 121 may apply—is wheth- patent maintained consonance with the er the allegedly invalid patent and the 8712 patent. This is of particular interest reference art adhere to the restriction set given two facts: (1) the 8712 and 8496 forth by the PTO by covering distinct in- patent both covered ‘‘apparatus’’ claims ventions, not whether the reference art and (2) the 8496 patent was subject to a maintains consonance with the parent it 10 terminal disclaimer. See U.S. Patent No. shares with the allegedly invalid patent. 4,047,496. Terminal disclaimers, of course, See id. at 1568 (finding it sufficient that are used to overcome double patenting the allegedly invalid patent covered pro- rejections. See, e.g., Eisai Co. v. Dr. Red- cess claims while reference patents cov- dy’s Laboratories, Ltd., 533 F.3d 1353, ered apparatus claims). 1360 (Fed.Cir.2008) (noting patent appli- The facts of the instant case, of course, cants ‘‘routinely overcome’’ ODP rejections are not so different from Applied Materi-

9. For example, because the 8868 and 8698 issuing from the original application made patents, like the 8008 patent, contain restric- subject to a restriction requirement. Symbol tion Group II claims, section 121 did not Techs., 935 F.2d at 1580. The relevant ques- defeat allegations that the 8868 and 8698 pat- tion was ultimately whether the allegedly in- ents were invalid for ODP over the 8008 pat- valid patent and the reference art covered ent. See Pl.’s Response to Def.’s ODP Briefs distinct and separate invention. See id. at [Doc. 1555] at 41. 1579–81. Of course, because the reference 10. Nothing about the third case Roche cites, art in Symbol was a patent issuing from the Symbol Technologies, alters this conclusion. original application, Symbol has little to say In Symbol, the reference art was a patent about the question confronting this Court. 192 581 FEDERAL SUPPLEMENT, 2d SERIES

als. It is undisputed that the claims of new trial according to the regional circuit 8933, 8422, and 8349 patents do not cover standard). Under Federal Rule of Civil anything that falls within restriction Group Procedure 59(a)(1), ‘‘a ‘new trial may be II. Meanwhile, the 8868 and 8698 patents granted TTT for any of the reasons for contain only Group II claims. According- which new trials have TTT been granted in ly, consonance was not violated, to borrow actions at law in the courts of the United the phrasing of Applied Materials, be- States.’ ’’ Fernandez v. Leonard, 963 F.2d cause the Group II claims remained in 459, 468 n. 13 (1st Cir.1992). ‘‘District separate patents from the claims of other courts ‘may set aside a jury’s verdict TTT restriction groups. only if [it] is so clearly against the weight Because the 8933, 8422, and 8349 patents of the evidence as to amount to a manifest issued as the result of a restriction re- miscarriage of justice.’ ’’ Rivera Castillo quirement and maintain consonance with v. Autokirey, Inc., 379 F.3d 4, 13 (1st that restriction requirement, they fall Cir.2004). within the protection of section 121. Simi- larly, because the 8868 and 8698 patents issued from applications filed as the result B. VALIDITY of a restriction requirement and do not Section 282 of the Patent Act, 35 share subject matter with the 8933, 8422, U.S.C., states, ‘‘A patent shall be pre- and 8349 patents, the 8868 and 8698 patents are immunized as prior art. Accordingly, sumed valid.’’ This is far more significant the Court declines to find the 8933, 8422 than a true evidentiary presumption, cf. and 8349 patents invalid for ODP. Fed.R.Evid. 301; section 282 shifts to the party challenging the patent the burden of III. POST–TRIAL JUDGMENT AS proving invalidity by clear and convincing MATTER OF LAW evidence. Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365, 1380 (2d A. THE LEGAL FRAMEWORK Cir.2008). Under no circumstance is that Roche, having lost before the jury, burden to be borne by the patent holder. moves for judgment as matter of law Id. The presumption of validity codified in (‘‘JMOL’’) and for a new trial. The JMOL is the modern equivalent of a motion for section 282 reflects Congress’s judgment judgment notwithstanding the verdict. that the Patent and Trademark Office’s See Syngenta Seeds, Inc. v. Delta Cotton decision to issue a patent is entitled to Co-op., Inc., 457 F.3d 1269, 1274 n. 1 (Fed. some deference. See Purdue Pharma Cir.2006). ‘‘Federal Rule of Civil Proce- L.P. v. Faulding, Inc., 230 F.3d 1320, 1329 dure 50(a)(1) provides that a court may (Fed.Cir.2000); see also United States v. grant a motion for JMOL only where there Budd, 144 U.S. 154, 161, 12 S.Ct. 575, 36 is no legally sufficient evidentiary basis for L.Ed. 384 (1892). In the instant case, a reasonable jury to find for the non- Roche asserted a number of invalidity de- movant.’’ Paice LLC v. Toyota Motor fenses including anticipation, obviousness, Corp., 504 F.3d 1293, 1303 (Fed.Cir.2007) indefiniteness, and non-enablement. Be- (internal quotation marks omitted). low, the Court focuses on Roche’s asser- [31] This Court will apply First Circuit tion that claim 1 of the 8422 patent was standards in reviewing the motions for a anticipated by the Goldwasser study as new trial. See Z4 Techs., Inc. v. Microsoft well as Roche’s contention that the term Corp., 507 F.3d 1340, 1347 (Fed.Cir.2007) ‘‘human erythropoietin’’ is fatally indefi- (reviewing the refusal of a motion for a nite. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 193 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

[32] A claim is anticipated if every lim- A [1] pharmaceutical composition com- itation is present in a single device in the prising a [2] therapeutically effective prior art. Finisar Corp. v. DirecTV amount of [3] human erythropoietin and Group, Inc., 523 F.3d 1323, 1334 (Fed.Cir. a [4] pharmaceutically acceptable dilu- 2008). As shall be discussed below, ent, adjuvant or carrier, wherein said Roche’s anticipation challenge centered erythropoietin is [5] purified from mam- upon its assertion that claim 1 of the 8422 malian cells grown in culture. patent was anticipated by the Goldwasser 8422 patent col. 38 ll. 36–41 (emphasis sup- study. Roche could not as matter of law plied). At claim construction, the Court meet its burden of proving anticipation concluded that each of the numbered ele- because ‘‘purified from mammalian cells ments limited the claim, including the grown in culture’’ limits claim 1 while the product’s source, ‘‘purified from mammali- EPO used in the Goldwasser study was an cells grown in culture.’’ The undisput- purified from human urine. ed record revealed that none of the alleg- [33] The definiteness requirement is edly anticipatory prior art was ‘‘purified derived from section 112, paragraph 2 of from mammalian cells grown in culture.’’ the Patent Act, which provides that ‘‘[t]he The Court therefore granted Amgen’s mo- specification shall conclude with one or tion for a directed verdict on the validity of more claims particularly pointing out and claim 1 of the 8422 patent on the ground distinctly claiming the subject matter that ‘‘Roche [ ] failed TTT to prove by clear which the applicant regards as his inven- and convincing evidence as to the 8422 tion.’’ 35 U.S.C. § 112. The touchstone of patent claim 1 that it was anticipatedTTTT’’ the definiteness requirement is whether a Trial Tr. at 1380. person having ordinary skill in the art at Roche asserts that ‘‘Amgen had the bur- the time of the application would be able to den at trial to ‘convincingly show’ that the discern the scope of the claim. See Exxon source limitation imparts novel structure Research & Eng’g Co. v. United States, to an otherwise non-novel product.’’ Def.’s 265 F.3d 1371, 1375 (Fed.Cir.2001). As Post Tr. Br. at 50. Roche’s proffered rule the Court shall explain below, the term is contrary to the fundamental principle ‘‘human erythropoietin’’ is sufficiently defi- that a defendant must demonstrate ‘‘by nite, even though the specification does not clear and convincing evidence that each specify whether EPO’s amino acid se- and every element of the claimed inven- quence was 1 to 165 or 1 to 166. tion’’ was present in the prior art. Zenon Envtl., Inc. v. U.S. Filter Corp., 506 F.3d 1. The Court properly concluded that 1370, 1379 (Fed.Cir.2007). Moreover, it is claim 1 of the 8422 patent was not contrary to Markman v. Westview Instru- anticipated because ‘‘purified ments, Inc., 517 U.S. 370, 387, 116 S.Ct. from mammalian cells grown in 1384, 134 L.Ed.2d 577 (1996), which makes culture’’ limits the claim and the clear that issues of claim construction are prior art was purified from urine within the exclusive province of the Court. [34] Roche contends that it is entitled In addition, the rule contravenes the pre- to judgment as matter of law or, in the sumption of validity codified at 35 U.S.C. alternative, a new trial because a reason- § 282 by shifting the burden of persuasion able jury would have been forced to con- to Amgen. While a patentee seeking to clude that claim 1 of the 8422 patent is have a source or process limit a claim may invalid as anticipated by the prior art. be required to come forward with evidence Claim 1 of the 8422 patent teaches: during claim construction, once that bur- 194 581 FEDERAL SUPPLEMENT, 2d SERIES

den is satisfied, as it was in this case, then neered EPO is that the urinary EPO has the patentee need not re-prove at trial been exposed to enzymes and bodily pro- what he has already demonstrated to the cesses that may hinder its efficacy for patent office and court. future use. In Amgen I, the Court noted differences in glycosylation and specific ac- a. ‘‘Purified from mammalian cells tivity, which may also reflect recombinant grown in culture’’ limits claim 1 EPO’s resistance to degradation in the At claim construction, the Court noted human body: that ‘‘as has long been recognized by the As disclosed in Column 28 of the patent Federal Circuit, source or process limita- TTT according to Western blot and SDS– tions can and do serve to define the struc- PAGE analyses, ‘‘the CHO-produced ture of a claimed product where such limi- EPO material had a somewhat higher tations are the best means to distinguish a molecular weight than the COS–1 ex- claimed product over prior art.’’ Amgen pression product which, in turn, was Markman, 494 F.Supp.2d at 65 (citing In slightly larger than the pooled source re Luck, 476 F.2d 650, 653 (C.C.P.A.1973)). human urinary extract.’’ [U.S. Patent As ‘‘Dr. Lin has testified[,] at the time, ‘the No. 5,955,422] at [col.] 28 [ll.] 38–41. only way [to] characterize [his claimed] Amgen scientists then treated the pro- product is by the way they were making teins with neuraminidase, which re- [it].’ Accordingly, the Court deem[ed] it moves the sialic acids from the protein. appropriate to include the ‘source limita- Id. at [col.] 28 [ll.] 42–43. Following tion’ in a product claim.’’ Id. (internal neuraminidase treatment, the COS–1 citation omitted)(first two alterations in and CHO recombinant products had ap- original). The Federal Circuit has upheld this construction in a related case. See proximately equal apparent molecular Amgen II, 314 F.3d at 1329 (noting that weights, but were both nonetheless larg- ‘‘ ‘purified from mammalian cells grown in er than the resulting asialo human uri- culture’ in claim 1 clearly limits the source nary extract. See id. at [col.] 28 [ll.] 42– of the EPO used in the claimed ‘pharma- 46. Amgen then treated the CHO and ceutical composition’ ’’). The Court held human urinary products with endoglyco- that ‘‘purified from mammalian cells grown sidase F, which removes not only sialic in culture’’ means ‘‘obtained in substantial- acids, but also any other carbohydrate ly homogeneous form from the mammalian chains attached to the protein. Id. at cells, using the word from in the sense that [col.] 28 [ll.] 46–48. Amgen scientists it originates in the mammalian cells, with- discovered that the CHO and urinary out limitation to it only taking it directly products were ‘‘substantially homoge- out of the interior of the cells, which have nous products having essentially identi- been grown in the in vitro culture.’’ Id. cal molecular weight characteristics.’’ The Court’s decision that the source limits Id. at [col.] 28 [ll.] 49–50. The conclu- the claim in this case was consistent with sion to be drawn from this series of tests the Court’s conclusions in Amgen I, where is that the difference in the apparent the Court observed distinctions between molecular weights of recombinant and the claimed recombinant EPO and the uri- urinary EPO products on SDS–PAGE nary EPO employed in the Goldwasser and Western blot is explained by differ- study. See Amgen I, 126 F.Supp.2d at 124– ences in glycosylation between the two 27. types of EPO glycoproteins. In light of One critical distinction between EPO ex- this data reported in Column 28, one tracted from urine and synthetically engi- skilled in the art in 1983 would under- AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 195 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

stand that the recombinant proteins are ent reveals that the recombinant EPO glycosylated differently than the natu- product contains a higher ratio of N- rally-occurring protein, and that these acetylneuraminic acid (.998) than the differences can be revealed by running urinary EPO product (.930). Id. at [col.] an SDS–PAGE and doing a western blot 28 [ll.] 56–66. This difference in the as described here. carbohydrate constitution values be- Amgen I, 126 F.Supp.2d at 125 (some in- tween the recombinant and urinary EPO ternal citations and quotation marks omit- glycoproteins is ‘‘consistent with the ted). Western blot and SDS–PAGE analysis In addition, evidence suggests that re- described above.’’ Id. at [col.] 28 [ll.] combinant and urina EPO glycosilate at 66–67. different rates: Id. (internal indentation of block quote [i]n the final paragraph of Column 28, omitted)(footnote omitted)(alterations in Amgen disclosed the results of another second paragraph in original). set of experiments intended to show dif- It is significant that the source is what ferences in glycosylation between re- enables mass production and commercial combinant and urinary EPO products. viability. If a drug manufacturer sought 8422 patent at [col.] 28 [ll.] 51–67. Am- to produce the naturally occurring EPO in gen performed ‘‘carbohydrate analyses’’ the Goldwasser study, the manufacturer in order to identify the individual mono- would have to scour the world for aplastic saccharide sugar residues present on anemia patients whose urine was suscepti- both the EPO derived from CHO cells ble to purification according to the Miyake and derived from urine. See id. method. Then the producer would have to [I]n this experiment the glycoprotein is contract with enough patients willing to taken and hydrolyzed in the presence of provide quantities of urine sufficient to acid TTT and that cleaves the bonds be- meet the vast demand for anemia drugs, tween the amino acids, cleaves the bonds thereby transforming the company into a between the individual sugar resi- glorified urine collection agency. Of duesTTTT [A]ll the sugars then are pres- course, it is unlikely that this ever could ent unlinked to each other as individual monosaccharides. They can be labeled have happened because as Dr. Baron in- and separated by some chromatographic formed the FDA ‘‘twice, in 1985 and 1987,’’ method. So that, say the sialic acids are the requisite type of urine was in such separated from the N-acetylglucosa- short supply that it prevented even limited mines and Fucose and so forth. three-patient studies like those he had con- Once all of the sugars are separated and ducted with Dr. Goldwasser. Def.’s Post identified, their relative distribution can Tr. Br. at 47. Part of the genius of Am- be calculated. In particular, one type of gen’s EPO is that it does not depend on a sugar is designated as one, and the oth- scarce resource. er sugars are compared by their abundance in relation to the standardized b. Issues pertaining to claim construc- sugar. In the nomenclature of the pat- tion may not be submitted to the ent specification, one can identify the jury carbohydrate constitution values ex- [35] Once the Court made its determi- pressed as molar ratios of the carbohy- nation at claim construction, there is no drates in the product. Id. at [col.] 28 precedent that permits courts to treat [l1.] 56–58. Using this method, the pat- source limitations differently than other 196 581 FEDERAL SUPPLEMENT, 2d SERIES

limitations. See In re Luck, 476 F.2d at fall on the ‘‘party asserting [ ] invalidity.’’ 653 (‘‘[P]roduct claims may include process 35 U.S.C. § 282. Because the source limits steps to wholly or partially define the Claim 1 of the 8422 patent, it is entitled to claimed product. To the extent these pro- a presumption of validity that must be cess limitations distinguish the product overcome with clear and convincing evi- over the prior art, they must be given the dence. As the Supreme Court explained same consideration as traditional product in 1892: characteristics.’’)(internal citation omitted). In [patent cases], the respect due to Requiring a patentee to prove to a jury patent, the presumptions that all the that a source limits a claim inverts the role preceding steps required by the law had of judge and fact-finder during trial in been observed before its issue, the im- patent litigation. It has long been estab- mense importance and necessity of the lished that ‘‘[q]uestions of construction are stability of titles dependent upon these questions TTT for the judge, not questions official instruments, demand that the ef- of fact for the jury.’’ See Markman, 517 fort to set them aside, to annual them, U.S. at 387, 116 S.Ct. 1384 (quoting A. or to correct mistakes in them, should Walker, Patent Laws § 189, at 173 (3d ed. only be successful when the allegations 1895)). Requiring a patentee to prove to a on which this is attempted are clearly jury that a source limits his claim plainly stated, and fully sustained by proof. subverts the longstanding division of re- sponsibility the Supreme Court clarified in United States v. Budd, 144 U.S. 154, 161, Markman. See id. at 384–391, 116 S.Ct. 12 S.Ct. 575, 36 L.Ed. 384 (1892)(quoting 1384. United States v. Maxwell Land–Grant Co., 121 U.S. 325, 381, 7 S.Ct. 1015, 30 L.Ed. [36] To be sure, certain issues sub- 949 (1887)). sumed in claim construction questions re- Because the source claim delineates the semble questions of fact. See id. at 389– scope of Amgen’s patent, it is entitled to 90, 116 S.Ct. 1384. For instance, here, the the same presumption of validity due any Court confronted the question of whether product limitation. Roche’s approach and to what extent structural distinctions would eviscerate the presumption by forc- between urinary and recombinant EPO ing Amgen to come forward with evidence are attributable to recombinant EPO’s to establish novelty. Federal Circuit prec- source. Resolution of this issue required edent is to the contrary. See Stratoflex, not only examination of the patent and the Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534 prosecution, but also expert opinion. But the mere fact the issue requires a court to (Fed.Cir.1983). Once applied, the pre- make credibility determinations does not sumption of validity may not be diminish- mean that those questions must be submit- ed. Id. ted to a jury. Id. at 387, 116 S.Ct. 1384 Neither 35 U.S.C. § 282 nor any prece- (‘‘[M]atters of claim construction, even dent provides a basis for shifting the bur- those aided by expert testimony, are ques- den to the patent-holder during trial. tions for the court[.]’’). Nevertheless, Roche insists that ‘‘Amgen had the burden at trial to ‘convincingly c. Saddling patentees with a burden of show’ that the source limitation imparts proof at trial is contrary to 35 novel structureTTTT’’ Roche has taken the U.S.C. § 282 words ‘‘convincingly show’’ from In re [37] Section 282 of the Patent Act Moeller, 28 C.C.P.A. 932, 117 F.2d 565, 567 mandates that the burden of proof shall (C.C.P.A.1941), a 1941 opinion of the Court AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 197 Cite as 581 F.Supp.2d 160 (D.Mass. 2008) of Customs and Patent Appeals. In re (Fed.Cir.2007). It is undisputed that nei- Moeller, however, dealt with an appeal ther ‘‘Dr. Goldwasser’s study [nor any oth- from the Board of Appeals of the United er allegedly anticipating prior art] in- States Patent and Trademark Office. The volve[d] an EPO purified from mammalian significance of this fact is that Moeller was cells grown in culture, which is TTT re- a patent applicant and did not enjoy a quired by Claim 1 of the 8422 patent.’’ presumption of validity. Amgen I, 126 F.Supp.2d at 140–41. Roche’s other cited authority, Smith- Therefore, the Court will not reverse its Kline Beecham Corp. v. Geneva Pharms., directed verdict for Amgen on Roche’s de- Inc., No. 99–CV02926, 2002 U.S. Dist. fense of anticipation as to claim 1 of the LEXIS 25275 (E.D. Pa Dec. 20, 2002), an 8422 patent. unpublished opinion from the District Nevertheless, Roche contends it is enti- Court for the Eastern District of Pennsyl- tled to judgment as matter of law because vania, is similarly unpersuasive. Roche Amgen failed to meet its ‘‘heavy burden’’ avers that SmithKline ‘‘implicitly recog- of demonstrating that ‘‘purified from mam- niz[es] that the patentee bears the burden’’ malian cells grown in culture’’ imparts nov- of demonstrating that a source limits a elty. Def.’s Post Tr. Br. at 52. Roche claim. Def.’s Post Tr. Br. at 50. The avers this is so because the limitation is so truth is the district court in SmithKline vague that it embraces a myriad of hypo- did not apply the burden to either party, thetical EPO structures that might be much less suggest that a patentee must ‘‘structurally indistinguishable TTT from demonstrate that a source limits a claim at human urinary EPO.’’ Id. at 360. There- trial. Id. at *19–21. fore, according to Roche, any distinctions In short, there is no reason for this between human and urinary EPO that are Court to eschew the ordinary presumption caused by differences in purification tech- of validity. The Court therefore concludes niques cannot establish novelty. the source limitation in Claim 1 of the 8422 patent is entitled to a presumption of va- As this Court has outlined, Roche bears lidity that Roche failed to rebut. the burden of proving that Dr. Goldwas- ser’s EPO was in fact identical to the EPO d. Roche could not prove anticipation described in claim 1 of the 8422 patent. of claim 1 of the 8422 patent with The mere fact that some mammalian cell clear and convincing evidence be- purified in some manner in some culture cause the prior art was purified might produce some glycoprotein structur- from the urine of aplastic anemia ally similar to Dr. Goldwasser’s EPO hard- patients ly proves anticipation by clear and convinc- [38] ‘‘Invalidity based on ‘anticipation,’ ing evidence. 35 U.S.C. § 102, requires that the identical invention was known or its existence would e. The Court’s conclusion is consistent reasonably have been known to a person of with Federal Circuit’s dicta in Am- ordinary skill in the fieldTTTT’’ SmithKline gen IV and the holding of Smith- Beecham Corp. v. Apotex. Corp., 403 F.3d Kline 1328, 1330 (Fed.Cir.2005). In order to The Court’s conclusion that the source prevail at trial, Roche had to demonstrate limits the claim is consistent with Federal a particular piece of prior art anticipated Circuit precedent as well as dicta in the each element of claim 1. In re Omeprazole Federal Circuit’s opinion in the related Patent Litigation, 483 F.3d 1364, 1371 TKT litigation. As the Federal Circuit 198 581 FEDERAL SUPPLEMENT, 2d SERIES

observed in Amgen II, ‘‘a claimed product In sum, the Court’s grant of summary shown to be present in the prior art cannot judgment on the issue of anticipation of be rendered patentable solely by the addi- claim 1 of the 8422 patent was proper tion of source or process limitations.’’ 314 because ‘‘purified from mammalian cells F.3d at 1354 n. 20. It is also true, however, grown in culture’’ limits the claim and that source and process limitations may because the prior art was derived from impart novel structure to a product claim. human urine. SmithKline, 439 F.3d at 1319 (‘‘If those product-by-process claims produced a dif- 2. The jury’s finding that claim 1 of ferent product than that disclosed in the the 8422 patent and claims 3, 7, [prior art], there would be an argument and 9 of the 8933 patent are not that the [prior art] disclosure did not antic- indefinite is based on sufficient ipate.’’). As discussed above, the source evidence helps to distinguish recombinant EPO [39] Roche argues that even if ‘‘puri- from the prior art. The distinctions be- fied from mammalian cells grown in cul- tween urinary and recombinant EPO dic- ture’’ limits the claim, claim 1 of the 8422 tate that the rule articulated in Amgen II patent as well as claims 3, 7, and 9 of the does not apply. 8933 patent are indefinite because ‘‘the It is also worth noting that the Court’s breadth of the claim term ‘human erythro- construction of this term has twice been poietin’ makes it impossible to determine appealed, and in neither case has the Fed- what is and what is not within the claim.’’ eral Circuit held that this Court erred in Def.’s Post Tr. Br. at 108. Although concluding that the source limits the claim. Roche concedes that Amgen offered expert See Amgen II, 314 F.3d at 1329–30. In evidence on this point at trial, Roche con- Amgen II, the Federal Circuit explained: tends that Dr. Lodish’s opinion was a ‘‘tor- As to the 8422 patent, the limitation tured explanation,’’ contradicted by ‘‘purified from mammalian cells grown in Roche’s expert, Dr. Flavell. Id. Because culture’’ in claim 1 clearly limits the the Court is not permitted to re-weigh source of the EPO used in the claimed evidence, and because Dr. Lodish’s testi- ‘‘pharmaceutical composition.’’ The lim- mony provided a sufficient basis for a rea- itation only speaks to the source of the sonable jury to conclude Roche failed to EPO and does not limit the process by prove indefiniteness by clear and convinc- which the EPO is expressed. Rather, ing evidence, Roche’s motion for judgment the claim is broadly drawn to a ‘‘phar- as matter of law or a new trial must be maceutical composition’’ having certain denied. elements, one of those being EPO ‘‘puri- [40] Plaintiffs seeking to invalidate a fied from mammalian cells in culture.’’ patent for indefiniteness face a difficult This reading is in line with the district burden. Not only must they prove their court’s constructionTTTT claims by clear and convincing evidence, Id. at 1329. The Court expanded on its the degree of definiteness required for a view in a footnote: ‘‘We do not hold that given claim varies depending upon the these limitations lack meaning, only that state of the art. PharmaStem Therapeu- they mean just what they say. According- tics, Inc. v. ViaCell, Inc., 491 F.3d 1342, ly, they limit only the source from which 1373 (Fed.Cir.2007). The Federal Circuit the EPO is obtained, not the method by has recognized that ‘‘in fields of new and which it is produced.’’ Id. at 1330 n. 5. evolving knowledge, that the claims can be AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 199 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

no more precise than the knowledge in the release into their growth medium human field permits.’’ Id. Simply put, where EPO.’’ Id. at 2306. knowledge is still evolving, a patentee will According to Dr. Lodish, Example 10 of be held to a lower standard. ‘‘[I]f the the specification ‘‘inherently demonstrates meaning of the claim is discernible, even 165 amino acid EPO.’’ Id. at 2314. Exam- though the task may be formidable and the ple 10 provides instructions for making conclusion may be one over which reason- EPO. ‘‘In other words, if a person skilled able persons will disagree, TTT [the] claim in the art followed Example 10, they would [is] sufficiently clear to avoid invalidity on be in possession of a 165 amino acid human indefiniteness grounds.’’ Exxon Research & Eng’g Co. v. United States, 265 F.3d EPO.’’ Id. Qualified scientists of the time 1371, 1375 (Fed.Cir.2001). As will be dis- would know the product was EPO because cussed below, credible expert testimony in ‘‘[t]he human EPO produced in Example this case suggests that the term ‘‘human 10 of Dr. Lin’s patents has the 1 to 165 erythropoietin’’ was as exacting as could amino acid [sequence] recited in Figure 6.’’ have been expected given the state of sci- Id. at 2313. entific knowledge at the time. Using Figure 6 as a demonstrative, Dr. Amgen presented sufficient evidence Lodish showed the jury how a skilled from which the jury could have concluded worker in 1984 would have understood that ‘‘a skilled artisan could [have] discern[ed] portion of the specification to describe hu- the boundaries of the claim based on the man EPO. It is important to note, howev- claim language [and] the specification TTT er, that Dr. Lodish did not explain ‘‘human as well as her knowledge of the relevant erythropoietin’’ by reference to a particu- art area.’’ Halliburton Energy Servs. v. lar number of amino acids: M–I LLC, 514 F.3d 1244, 1249–50 (Fed. Figure 6 describes first of all the DNA Cir.2008). Amgen presented the testimo- sequence of the human EPO gene. And ny of Dr. Lodish who, in addition to being that is this series of A’s, G’s, and C’s a well-qualified expert, was a person just running from left to right in rows. skilled in the art during the relevant time And one skilled in the art at the time, period. Dr. Lodish testified: and Dr. Lin did, could deduce from this [‘Human erythropoietin]’ quite certainly DNA sequence, the sequence of the is definite. One of skill in the art read- EPO protein. And what is indicated ing the patent would understand very above certain of these three base units, clearly what human EPO is and what is these are the triplets or, as it were, within the fence of the patent defining codons. Here is a GCC that specifies human EPO and what would be outTTTT the first amino acid alanine. It was as precise as the subject matter allows. * * * Trial Tr. at 2324. Dr. Lodish explained, ‘‘human erythro- And then above it in the three letter poietin’’ is ‘‘described in many places’’ in code, ALA stands for alanine. And the the patent. Id. at 2306. For example, plus 1 above the alanine specifies that ‘‘Figure 6 TTT describes the deduced amino it’s the first amino acid in this ultimately acid sequence of human erythropoietin; 166 proteinTTTT and importantly, Example 10 in the patent And just reading along you can see the describes how using this EPO DNA, intro- sequence, the deduced amino acid se- ducing it into mammalian cells TTT will TTT quence from the DNA and the correct 200 581 FEDERAL SUPPLEMENT, 2d SERIES

deduced amino acid sequence of the would not have a legally sufficient eviden- EPO polypeptide. tiary basis to find for the [Amgen]’’); see also Comark Comm., Inc. v. Harris Corp., * * * 156 F.3d 1182, 1190 (Fed.Cir.1998) (ob- Again, you can see [now referring to serving that ‘‘it is not the function of the Figure 6E] we’re talking at the end or courts to reweigh the evidence presented the carboxyl-terminus of the EPO pro- to the jury.’’). That Dr. Flavell may have tein. Again, the DNA sequence that offered a contrary opinion is of little mo- specifies other amino acids, and it ends ment because the jury could—and appar- in this AGA, which specifies the arginine ently did—believe Dr. Lodish. Thus, Dr. at 166, which is the one that may or may Flavell’s disputed testimony does not pro- not be cleaved off when the protein is vide the Court with the authority to set made. aside the jury’s verdict. Id. at 2319–20. Roche rests its argument on the testi- a. The fact that Example 10 does not mony of its expert, Dr. Flavell, who opined specify that human EPO could con- that ‘‘[t]he patent specification contem- sist of 1 to 165 or 1 to 166 amino plates dozens of ‘polypeptides of the inven- acids does not render ‘‘human er- tion’ that fall within the scope of ‘human ythropoietin’’ indefinite erythropoietin,’ including mutants, analogs In addition to Dr. Flavell’s opinion, and allelic variants.’’ Def.’s Post Tr. Br. at Roche emphasizes that ‘‘the only informa- 68. Thus, Roche contends that, faced with tion available as of November 1984 was a panoply of possible polypeptides, one that human EPO had 166 amino acids.’’ skilled in the art would not be able to discern the meets and bounds of ‘‘human Def.’s Post Tr. Br. at 68. Thus, according erythropoietin.’’ Id. to Roche, the patent does not put those skilled in the art on notice that human Roche is mistaken. As Amgen correctly EPO could be either be a sequence of 1 to observes, ‘‘none of these polypeptides [to 165 or 1 to 166, ‘‘but not sequences of 164 which Dr. Flavell refers] on their face fall or 167 amino acids.’’ Id. within the scope of the claim term ‘human erythropoietin.’ ’’ Pl.’s Post Tr. Opp. Br. To begin, Roche’s focus on the number [Doc. 1649] at 127. That the specification of amino acids is misplaced. The Court’s may refer to other amino acid sequences is construction of the term ‘‘human erythro- irrelevant. See 35 U.S.C. § 112, ¶ 2 (‘‘The poietin’’ does not require an amino se- specification shall conclude with one or quence of a precise length. See Amgen more claims that particularly pointing out Markman, 494 F.Supp.2d at 64 (constru- and distinctly claiming the subject matter ing ‘‘human EPO’’ as ‘‘[a] protein having which the applicant regards as his inven- the amino acid sequence of human EPO, tion.’’). such as the amino acid sequence of EPO Although Roche’s argument seems to be isolated from human urine’’). Instead, the premised on the notion that the Court is Court has held that EPO is best under- required to accept the opinion of its ex- stood by reference to the order in which perts and disregard Amgen’s testimony, the particular amino acids are linked. It is the present procedural posture requires perfectly consistent with the claim that the opposite. See Fed.R.Civ.P. 50(a)(1) Example 10 could produce a protein of (stating that the Court may not disturb the either 165 or 166 amino acids. So long as jury’s verdict unless ‘‘a reasonable jury one skilled in the art in 1984 could identify AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 201 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

that protein as human EPO, the term is 1. The Court’s grant of summary sufficiently definite. judgment of infringement as to In explaining how one skilled in the art claim 1 of the 8422 patent was would have understood ‘‘human erythro- proper because MIRCERA con- poietin,’’ Dr. Lodish testified that it was tains EPO best understood by reference to the se- [43] At every stage of the litigation, quence of amino acids—the ‘‘series of A’s, and now in its post-trial motions, Roche’s G’s, TTT and C’s just running from left to core theory for evading infringement has right in rows.’’ Trial Tr. at 2319. As he been that MIRCERA does not contain explained, whether the EPO amino acid EPO because CERA, the active ingredient sequence has 165 or 166 amino acids de- in MIRCERA, is a solitary and stable pends on the cell in which it is produced. molecule with distinct chemical properties. See id. at 2315. Although all mammalian CERA is formed through pegylation, a cells produce 166 EPO, ‘‘[s]ome cells TTT chemical reaction where methyoxy-poly- have an enzyme, that is, a kind of machine ethylene glycol (‘‘PEG’’) is connected via a that cuts off that last amino acid, discards single bond to epoetin beta. See Trial Ex. it. So what remains is the first 165TTTT’’ 53, Roche BLA at 00004027. Epoetin beta Id. at 2315. is made from ‘‘EPO-producing [CHO] cells Roche does not dispute that EPO is (DN2–3]3 cells) [that] contain an exoge- either 165 or 166 amino acids in length. nous DNA sequence encoding the mature Nor did it present any evidence that any erythropoietin amino acid sequence of Fig- person skilled in the art now or then actu- ure 6 of Lin’s patents spanning from posi- ally thought that EPO consisted of 164 or tions v1 through v166.’’ Pl.’s Mem. 167 amino acids. Nor does it argue that a Supp. Summ. J. Infringe, of 8422 Claim 1, person skilled in the art following the in- 8933 Claim 3, and 8698 Claim 6 [Doc. No. structions in Example 10 would produce 510] at 5 (‘‘Pl.’s Mem. Supp. Summ. J.’’). anything other than human EPO. At bot- It is undisputed that epoetin beta fits with- tom, however, the procedural posture dic- in the parameters of Amgen’s product and tates that the Court may only consider process patents. See Trial Ex. 53, Roche whether Amgen presented sufficient evi- BLA at 00004027. Roche emphasizes, dence to support the jury’s conclusion. however, that once pegylation is complet- Dr. Lodish’s testimony provides just that. ed, the resulting product, CERA, does not

C. INFRINGEMENT contain EPO. Roche now seeks to overturn the Court’s grant of summary judgment on [41, 42] In order to prove infringe- claim 1 of the 8422 patent, see Electronic ment, a plaintiff must demonstrate that an Order, August 28, 2007, based on this sin- accused device embodies all limitations of gle molecule theory. the claim either literally or by the doctrine of equivalents. TIP Sys., LLC v. Phillips Roche’s single-molecule theory is flawed & Brooks/Gladwin, Inc., 529 F.3d 1364, for two reasons. First, Roche’s assertion 1379 (Fed.Cir.2008). Where, as in this that MIRCERA does not contain EPO is case, a product embodies all limitations, belied by its internal communications and merely adding elements to an otherwise representations to the FDA. Second, Am- infringing device will not enable the in- gen patented EPO by reference to the fringer to escape liability. See A.B. Dick glycoprotein’s amino acid sequence. Pegy- Co. v. Burroughs Corp., 713 F.2d 700, 703 lation merely attaches a sugar, via a single (Fed.Cir.1983). carbon bond, to a recombinant glycopro- 202 581 FEDERAL SUPPLEMENT, 2d SERIES

tein with the patented amino acid se- FDA are in tension with Roche’s asser- quence; it does not alter the patented tions that CERA does not contain EPO. properties of EPO. b. Amgen patented recombinant EPO a. Roche’s internal documents and by reference to its amino acid se- representations to the FDA confirm quence, and pegylation does not al- that ‘‘peg-EPO’’ contains EPO ter that sequence Prior to marketing its drug and this At claim construction, both parties litigation, Roche referred to the active in- agreed that claim 1’s ‘‘human erythropoiet- gredient in MIRCERA as ‘‘peg-EPO’’ in in’’ limitation described a particular amino internal communications. See Trial Tr. at acid sequence that mirrored the amino 2738–40. This name reflected Roche’s acid sequence of EPO found in human view that not only did peg-EPO contain urine. See Amgen Markman, 494 EPO, but also that pegylation did little if F.Supp.2d at 63. Thus, the Court con- anything to alter the properties of epoetin strued the limitation as follows: ‘‘Human beta. At trial, Dr. Adrienne Farid, erythropoietin: A protein having the ami- Roche’s ‘‘project manager for peg-EPO,’’ no acid sequence of human EPO, such as Trial Tr. at 2738, testified to internal com- the amino acid sequence of EPO isolated munications describing peg-EPO as ‘‘com- from human urine.’’ Id. at 64. prised of human erythropoietin which is mono-pegylated,’’ id. at 2740. According In an effort to avoid summary judgment, to a 1999 memo entitled ‘‘Description of Roche pointed to structural differences be- peg-EPO,’’ Trial Ex. 61, ‘‘[b]oth EPO and tween EPO and peg-EPO. Roche’s argu- peg-EPO have identical amino acid se- ment, for example, that ‘‘the Lin specifica- quence and composition.’’ Trial Tr. at tion does not disclose the substitution of 2741. ‘‘The only difference in the composi- hydrogen from human EPO’s lysine resi- tion of native and modified proteins is due dues or N-terminal residues’’ is irrelevant to the formation of an amide bond between to infringement because the substitution the amino group of EPO and the peg does not affect the amino acid sequence. molecule at the point of attachment.’’ Id. Def.’s Mem. Opp. Summ. J. Infringe of at 2742. Roche’s analysis indicated that 8422 Claim 1, 8933 Claim 3, and 8698 Claim pegylation did not affect epoetin beta’s 6 [Doc. No. 588] at 4–6. Tellingly, Roche amino acid sequence, glycosylation, or car- sought to include structural limitations in bohydrate structure. Id. at 2743. claim 1 at the claim construction. The Roche’s internal communications were Court rejected Roche’s request because consistent with its representations to the [t]he specification does not define ‘‘er- FDA. In its BLA, which the FDA requires ythropoietin’’ by reference to the pres- for human testing, Trial Tr. at 2611, Roche ence or absence of any attached mole- emphasized that pegylation did not alter cules, such as the carbohydrate that can epoetin beta. Roche stated that ‘‘[b]oth be attached to EPO proteins for glycosy- EPO starting material[, epoetin beta,] and lated EPO. In fact, the specification ex- RO0503821[, CERA,] have the identical pressly contemplates that additional amino acid sequence and composition of molecules may be attached to ‘‘human the carbohydrate moiety.’’ See Trial Ex. erythropoietin.’’ By implication, there- 53, BLA at 00004027. fore, those additional molecules are not In short, Roche’s internal communica- part of the amino acid structure that tions as well as its representations to the comprises the claimed product. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 203 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

Amgen Markman, 494 F.Supp.2d at 63 ican Cyanamid Co., 82 F.3d 1568 (Fed. (internal citation omitted). Cir.1996). In that case, Eli Lilly, the own- Thus, ‘‘[t]he patent itself is silent as to er of patents describing the popular antibi- TTT any structural characteristic beyond otic Cefaclor, sought a preliminary injunc- the required amino acid sequence.’’ Id. tion to prevent importation of an allegedly The Court’s claim construction makes infringing drug. Id. at 1569–70. The dis- clear that the focus of this claim element is trict court denied the injunction based on a the amino acid sequence. Roche could not factual determination that Cefaclor and avoid summary judgment because it could the allegedly infringing product ‘‘differ sig- not produce evidence from which a reason- nificantly in their structure and properties, able jury could conclude that pegylation including their biological activity.’’ Id. at altered EPO’s amino acid sequence. 1571. In upholding the district court’s Roche asks the Court to enter a judg- decision, the Federal Circuit wrestled with ment in its favor on the basis of its theory the meaning of ‘‘material change’’ in the that once pegylation has occurred, the pro- context of the Process Patent Amend- cess cannot be reversed and the product is ments Act of 1988. See id. at 1571–78. a stable, single molecule. Roche’s asser- Although it concluded that the district tion is contested by Amgen expert Dr. Les court did not err in holding that Eli Lilly Benet, who testified that PEG and EPO was unlikely to succeed on its infringement separate in the body after administration. claim, its investigation into the meaning of Trial Tr. at 2610. But even presuming ‘‘material change’’ was inconclusive. Id. at that Roche’s assertion about reversibility 1578. is correct as a matter of fact, the perma- It is difficult to conceive how Eli Lilly nency of the bond does not save Roche. could be read to stand for any legal propo- [44] ‘‘It is fundamental that one cannot sition that conflicts with A.B. Dick. A.B. avoid infringement merely by adding ele- Dick merely states that the addition of ments if each element recited in the claims elements will not preclude a finding of is found in the accused device.’’ A.B. infringement so long as all of the elements Dick, 713 F.2d at 703. As the Federal of the underlying claim are met. See A.B. Circuit reasoned by analogy in A.B. Dick, Dick, 713 F.2d at 703. Furthermore, in an infringer could not avoid liability by this case, the Court does not confront the incorporating a patented pencil into a com- fundamental question addressed—and ulti- plex machine. See id. More to the point, mately left unanswered—in Eli Lilly, just because the pencil cannot be removed which is the meaning of ‘‘material change.’’ from the complex machine, it does not The Eli Lilly decision turned on the dis- follow that the manufacturer has circum- trict court’s conclusion that the accused vented infringement. See id. Regardless product did not infringe. Here, the facts of whether the effects of pegylation can be cut against Roche. To the extent that Eli reversed, Roche is infringing because Lilly is applicable here, it merely high- epoetin beta retains its distinct amino acid lights the principle that questions of in- sequence through pegylation. fringement raise issues of fact appropriate- Roche’s attempts to distinguish A.B. ly decided on a case-by-case basis. The Dick remain as unpersuasive as they were Court does not doubt that the substitution at the time the Court granted summary of one chemical group for another within a judgment. In an effort to convince the drug, whether in Eli Lilly or any hypo- Court that A.B. Dick is not applicable, thetical drug patent case, could provide a Roche relied on Eli Lilly and Co. v. Amer- basis for a finding of non-infringement. 204 581 FEDERAL SUPPLEMENT, 2d SERIES

But that is not the case here. In this case, single molecule that does not contain EPO. the addition of PEG to EPO replaces a The single-molecule theory reflects single hydrogen atom with a single carbon Roche’s flawed but unwavering belief that atom. Because the amino acid sequence it is entitled to judgment as matter of law remains unaltered, this displacement does if it can characterize CERA as a molecule. not enable Roche to avoid infringement. The theory has no sound basis in law or In short, Roche’s argument that CERA science, and this Court and the jury have constitutes a single molecule that cannot rejected it time and again. As discussed be broken down into smaller parts is un- above, EPO is the main ingredient for tenable because, it is contrary to its own CERA. Roche did not—and could not— admissions, good science, and common deny that epoetin beta was ‘‘made from sense. A molecule is merely a group of mammalian cells grown in culture.’’ atoms joined together by covalent bonds, Therefore, summary judgment was appro- such that the group of atoms is stable and priate. retains a neutral electrical charge. AL- BERTS, supra, at G:9, G:23. Peg–EPO is a [45] Nevertheless, Roche maintains glycosylated protein because the pegyla- that ‘‘if the source limitation imparts some tion process adds a sugar to a protein unique structure, then Amgen had to molecule. See id. at G:16. The glycosyla- prove that unique structure existed in tion process does not alter EPO’s patented MIRCERA.’’ Post Trial Hr’g Tr. [Doc. primary structure, its amino acid se- 1676] at 31. There is no doubt that an quence. The active ingredient in CERA, EPO, is an expression of the same amino infringement plaintiff must prove all ele- acid sequence taught in Amgen’s patents. ments, including source and process limita- Therefore, the summary judgment of in- tions. See BMC Res., Inc. v. Paymentech, fringement was proper. L.P., 498 F.3d 1373, 1378 (Fed.Cir.2007). But it is quite a different proposition to 2. The Court’s conclusion that ‘‘puri- require patentees to prove not only that fied from mammalian cells grown the limitation is met, but also that the in culture’’ limits claim 1 of the inclusion of the limitation results in the 8422 patent does not affect the same expression as the preferred embodi- Court’s grant of summary judgment. Roche has failed to offer any legal ment with respect to infringement support for its contention that Amgen was Per the preceding discussion, the Court required to do so in this case. has concluded that ‘‘purified from mamma- It is true that certain structural distinc- lian cells grown in culture’’ limits claim 1 of the 8422 patent. Roche argues that if tions between recombinant EPO and uri- this is so, then Amgen could not, as matter nary EPO are attributable to the source. of law, demonstrate Roche met this limita- But the structural differences are merely tion for the purposes of literal infringe- evidence that the source limits the claim; ment. Roche argued summary judgment they are not themselves limitations. Once was inappropriate because ‘‘CERA is a the Court has concluded that the source chemically synthesized product’’ that can- limits the claim, there is no reason why not be made from mammalian cells. Def.’s such a limitation ought not be treated like Mem. Opp. Summ. J. at 9. This is undoubt- other limitations. As stated above, epoetin edly true because CERA is generated beta satisfied the limitation. Therefore, the through pegylation. The problem is that Court’s grant of summary judgment was Roche relies on the theory that CERA is a appropriate. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 205 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

3. The Court’s grant of summary ceutically acceptable diluent, adjuvant or judgment in favor of Amgen on carrier. claim 1 of the 8422 patent will 8933 patent col. 39 l. 10–col. 40 l. 2. stand notwithstanding the jury’s Roche maintains that ‘‘for the jury ver- verdict regarding claim 12 of the dict to be internally consistent one must 8933 patent conclude that the jury found that MIRC- The jury found all of the claims of the ERA does not have ‘an effective amount patents in suit literally infringed with the TTT effective for erythropoietin therapy’ of exception of claim 12 of the 8933 patent, the glycoprotein product according to which it found infringed by the doctrine of claim 7, and/or that MIRCERA is not ‘a equivalents. Following the trial, on Octo- pharmaceutical composition comprising ber 30, 2007, the Court granted Roche’s TTT a pharmaceutically acceptable diluent, motion for judgment notwithstanding the adjuvant or carrier.’ ’’ Def.’s Post Tr. Br. verdict with respect to this claim because, at 144 (emphasis omitted). Since the at trial, Amgen failed to ‘‘identify claim by Court construed the terms the same way claim the equivalent means-way-result.’’ for each patent, Roche contends that the Scheduling Conference Tr. [Doc. 1736] at failure to find literal infringement of claim 4. Roche alleges that the jury’s verdict of 12 of the 8933 patent is inconsistent with infringement by the doctrine of equivalents the Court’s grant of summary judgment in requires the Court to reverse its grant of favor of Amgen with regard to infringe- summary judgment in favor Amgen on ment of claim 1 of the 8422 patent. Id. literal infringement of claim 1 of the 8422 The remedy Roche proposes is that the patent. Assuming arguendo that there Court reverse its summary judgment rul- are theoretical inconsistencies between the ing and grant summary judgment for court’s pre-trial ruling and the jury ver- Roche. Id. at 145. dict, there is simply no requirement that [46] Roche’s argument rests on a this Court reverse its summary judgment faulty legal premise. The mere fact that a determination because Roche’s claim that jury verdict could, in theory, appear to be MIRCERA does not contain EPO has no inconsistent with a grant of summary judg- sound basis in the record. ment does not require a court to reconsid- Again, claim 1 of the 8422 patent teach- er its pretrial ruling because the determi- es: nations are made on different records at different stages of the litigation and ac- A pharmaceutical composition compris- cording to different legal standards. ing a therapeutically effective amount of human erythropoietin and a pharmaceu- The sole case Roche cites in support of tically acceptable diluent, adjuvant or its position, Therma–Tru Corp. v. Peach- carrier, wherein said erythropoietin is tree Doors Inc., 44 F.3d 988 (Fed.Cir. purified from mammalian cells grown in 1995), is inapplicable. In Therma–Tru, culture. the Federal Circuit reversed a district court’s post-trial factual finding because it 8422 patent col. 38 ll. 36–40. was contrary to facts found by the jury. Claim 12 of the 8933 patent describes: Id. at 994, 996. Although the district court A pharmaceutical composition compris- was empowered to make certain findings ing an effective amount of a glycoprotein under its equitable authority, the Federal product effective for erythropoietin ther- Circuit reasoned that the district court’s apy according to claim 7 and a pharma- findings in Therma–Tru deprived the 206 581 FEDERAL SUPPLEMENT, 2d SERIES

plaintiff of its right to trial by jury under tive motions prior to trial, rather than Beacon Theatres, Inc. v. Westover, 359 based on evidence adduced at trial and U.S. 500, 510–11, 79 S.Ct. 948, 3 L.Ed.2d also weighed by a jury. In short, the facts 988 (1959). See Therma–Tru, 44 F.3d at and constitutional concerns that compelled 994–95. Beacon Theatres explains that the Federal Circuit’s decision in Therma– ‘‘when equitable claims are joined with le- Tru are not present in this case. gal claims and have factual questions in More importantly, Roche fails to illumi- common, the judge’s determination of the nate any ground for reversal that actually equitable claims can not deprive the liti- pertains to the Court’s grant of summary gants of their right to a jury trial on judgment on claim 1 of the 8422 patent. factual questions.’’ Therma–Tru, 44 F.3d The Court granted summary judgment for at 994–95 (citing Beacon Theatres, 359 U.S. at 510–11, 79 S.Ct. 948). Thus, Amgen because the Court concluded that a ‘‘[w]hen a party has a right to a jury trial reasonable jury would be forced to con- on an issue involved in a legal claim, the clude that CERA literally infringed all the judge is TTT bound by the jury’s determi- limitations of the claim. At this stage, nation of that issue as it affects his disposi- Roche has merely repeated its claims that tion of an accompanying equitable claim.’’ MIRCERA does not contain EPO. This Id. at 995 (quoting Gutzwiller v. Fenik, argument has been rejected because it be- 860 F.2d 1317, 1333 (6th Cir.1988))(internal lied by the record. quotation marks omitted). 4. The jury’s finding of infringement There is a critical distinction between with respect to claim 3 of the 8933 Therma–Tru and the instant case that ex- patent was supported by sufficient plains why the reasoning of Beacon The- atres does not apply here. The judicial evidence and was proper as matter determination in Therma–Tru was factual of law finding that followed a trial. By contrast, [47] In order for the jury’s verdict to the grant of partial summary judgment in stand, Amgen must have provided evi- this case was a ruling as matter of law dence from which a jury could have con- made prior to trial. See IPXL Holdings, cluded that Roche’s product infringed each L.L.C. v. Amazon.com, Inc., 430 F.3d 1377, of the limitations of claim 3 of the 8933 1380 (Fed.Cir.2005) (noting that the Fed- patent. The claim teaches: eral Circuit ‘‘review[s] de novo TTT wheth- A non-naturally occurring glycoprotein er the prevailing party is entitled to judg- product of the expression in a mamma- ment as a matter of law’’). While the lian host cell of an exogenous DNA se- district court in Therma–Tru made factual quence comprising a DNA sequence findings, ‘‘at the summary judgment stage encoding human erythropoietin said the judge’s function is not himself to weigh product possessing the in vivo biologi- the evidence and determine the truth of cal property of causing bone marrow the matter but to determine whether there cells to increase production of reticulo- is a genuine issue for trial.’’ Anderson v. cytes and red blood cells. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). This is 8933 patent col. 38 ll. 26–31. significant because the determinations Roche seeks to overturn the jury’s find- were made on records that are different in ing of infringement on the 8933 patent on kind. Here, the Court’s grant of summary two grounds. Primarily, Roche asks for a judgment was based on the undisputed new trial, contending that the jury’s ver- record at the time the parties filed disposi- dict was without support in the record. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 207 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

Second, Roche claims that it is entitled to quence, alterations that do not affect the judgment as matter of law because the amino acid sequence are immaterial. undisputed record reveals that pegylation displaces a hydrogen atom in epoetin beta. I. Amgen offered evidence that pegyla- See Def.’s Post Tr. Br. at 140. Thus, tion did not alter epoetin beta’s ami- Roche maintains that this minute altera- no acid sequence or carbohydrate tion entitles it to a judgment of non-in- structures fringement. As shall be discussed below, however, the jury’s verdict finds ample For all of the reams of paper devoted to support in the record. Moreover, Roche’s overturning the jury’s verdict with respect request for judgment as matter of law is to the 8933 patent, Roche concedes that premised on a misunderstanding of the law Amgen’s experts provided testimony that with respect to infringement. Amgen pegylation does not change the amino acid need not prove MIRCERA’s EPO is iden- sequence of epoetin beta. Def.’s Post. Tr. tical down to the precise number of hydro- Rep. Br. at 6. This concession is consistent gen atoms; rather, the question is whether with the record, which reveals ample evi- MIRCERA’s EPO deviates from claim 3 of dence from which the jury could have con- the 8933 patent. It does not. cluded that pegylation did not alter the amino acid sequence. For example, Dr. a. The jury’s finding of infringement Lodish testified: is supported by the record Roche argues that no reasonable jury Q. In your opinion, does the removal of could have concluded that MIRCERA is ‘‘a [the hydrogen] atom change the amino product of TTT expression in a mammalian acid sequence? host cell’’ because ‘‘CERA is a chemically A. No. synthesized compound that is created in a Q. Why? laboratory’’ with a ‘‘substantially different TTT structure and function from a product A. Because it’s the same amino acid of the recited process.’’ Def.’s Post Tr. before and after and, as I testified, in Br. at 140 (internal quotation marks omit- particular, the linkage between alanine ted). According to Roche, the undisputed and peg, say, at the beginning of the evidence demonstrates that MIRCERA protein, it’s the identical linkage that does not contain ‘‘the product of the ex- alanine would have to other amino acids pression of a DNA sequence encoding hu- inside the protein. And despite that man erythropoietin’’ because pegylation al- linkage or not, we still call it an alanine. ters the amino acid sequence. Id. Even if It’s what one skilled in the art calls the amino acid sequence is not altered, amino acids. It’s the same amino Roche contends that the undisputed dis- acidTTTT placement of a hydrogen atom with a car- Trial Tr. at 2528–29. Dr. Torchilin opined bon atom results in ‘‘differences between the carbohydrates’’ requiring a finding of that peg-EPO had the ‘‘identical amino non-infringement. Def.’s Post Tr. Rep. acid sequence and composition of carbohy- Br. at 5–6. drate moiety which relates to the structure. The structure is the same.’’ Id. at Amgen offered ample evidence that pe- 2664. gylation did not alter the amino acid sequence of epoetin beta. Because claim 3 Dr. Torchilin’s testimony confirmed of the 8933 patent describes a product by what the Court already noted about reference to a specific amino acid se- Roche’s representations to the FDA: 208 581 FEDERAL SUPPLEMENT, 2d SERIES

Q. Now, Doctor, based upon your re- [48] Infringement liability is found view of [Roche’s submission to the where an accused device falls precisely FDA], did Roche tell the FDA that the within the scope of a claim as delineated amino acid sequence of EPO was by the limitations. See TIP Sys., LLC, changed by the pegylation? 529 F.3d at 1379. The law does not re- A. Quite opposite. It exactly say that quire Amgen to prove identity to an un- identical amino acid sequence [sic]. And claimed level of specificity. Thus, varia- by the way, this is exactly the way I see tions such as the displacement of a single it. hydrogen atom, which do not deviate from Trial Tr. at 2730. the scope of at least one claim limitation, The Court concludes Amgen provided are immaterial. To hold otherwise would sufficient evidence from which the jury require inventors to claim their inventions could have concluded that MIRCERA in- with atomic specificity and would entitle fringed claim 3 of the 8933 patent because infringers to a patent merely because they pegylation does not alter epoetin beta’s were able to make the same product, sans amino acid sequence. Furthermore, testi- a single atom, via the claimed process. mony from Amgen’s experts indicated that Here, the Court construed claim 3 as: pegylation does not alter the carbohydrate a glycoprotein (not occurring in nature) structure. That Roche may have offered that is the product of the expression 11 in evidence to the contrary is beside the a mammalian host cell of a DNA se- point. So long as there is evidence to quence that does not originate in the support the jury’s verdict, the Court is not genome of the host, and which contains free to reach a different outcome. See the genetic instructions (or a DNA se- Rivera Castillo, 379 F.3d at 13. quence) encoding human erythropoietin. b. Amgen need not demonstrate in- Amgen Markman, 494 F.Supp.2d at 71–72 fringement to an unclaimed level of (footnote in original). specificity The product of this process described Roche still believes it is entitled to judg- above is, of course, a glycoprotein com- ment as matter of law even if pegylation prised of the patented sequence of 165 does not alter the amino acid sequence or amino acids. The Court’s construction carbohydrate moiety because Amgen can- makes clear that the patent’s focus is the not prove that the EPO in MIRCERA is glycoprotein’s amino acid sequence. The identical to the product of the process very reason for this claim is to describe a described in claim 3 of the 8933 patent. process for making a product with ‘‘genetic According to Roche, the fact that pegyla- instructions.’’ It is not concerned with the tion replaces a hydrogen atom with a car- particular charge or precise number of bon atom is sufficient to preclude a judg- carbohydrates, so long as the glycoprotein ment of infringement. The legal premise has a DNA sequence that is exogenous to of Roche’s argument is that plaintiffs seek- the mammalian host cell and that ‘‘encodes ing to prove infringement of a product-by- human erythropoietin.’’ It follows that process claim must demonstrate that the modifications that do not affect the amino accused product is identical to the product acid sequence do not deviate from the of the patented process. claim.

11. Wherein expression means that glycopro- from the cell culture. tein was produced in a cell and recovered AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 209 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

I. The cases Roche cites are inapplica- from the claim terms despite the hydrogen ble and unpersuasive displacement. Thus, it is entirely plausi- There is no precedent requiring the ble, as the jury found, that the EPO in Court to depart from basic patent princi- MIRCERA satisfies the requirement that ples in the context of product-by-process ‘‘every limitation set forth in a claim must claims. Roche marshals three cases in be found in an accused product, exactly.’’ support of its exact identity theory: Litton Southwall Techs., 54 F.3d at 1575. Systems, Inc. v. Honeywell, Inc., 140 F.3d Having concluded that the jury’s find- 1449 (Fed.Cir.1998), Southwall Technolo- ings will stand and that the Court will not gies, Inc. v. Cardinal IG. Co., 54 F.3d 1570 reverse its rulings with respect to validity (Fed.Cir.1995), and Johnston v. IVAC and infringement of claim 1 of the 8422 Corp., 885 F.2d 1574 (Fed.Cir.1989). patent, Roche’s motion for judgment as There is simply no way to read any of matter of law [Doc. No. 1618] and its these cases as departing from the general motion for a new trial [Doc. No. 1618] are rule that otherwise immaterial distinctions DENIED. will not preclude a finding of infringement in the context of a product-by-process IV. INJUNCTIVE RELIEF claim. [49] As the Supreme Court recently In each case, Roche seizes on the Feder- al Circuit’s use of the word ‘‘exactly’’ to reiterated, a party seeking a permanent describe the all-elements requirement. injunction following a judgment of in- See Litton, 140 F.3d at 1454 (‘‘Literal infringement must demonstrate: fringement requires that the accused de- (1) that it has suffered an irreparable vice contain each limitation of the claim injury; (2) that remedies available at exactly; any deviation from the claim pre- law, such as monetary damages, are in- cludes a finding of literal infringement.’’); adequate to compensate for injury; (3) Southwall Techs., 54 F.3d at 1575 (‘‘To that, considering the balance of hard- establish literal infringement, every limita- ships between the [parties], a remedy in tion set forth in a claim must be found in equity is warranted; and (4) that the an accused product, exactly.’’); Johnston, public interest would not be disserved 885 F.2d at 1577 (‘‘To establish infringe- by a permanent injunction. ment of a patent, every limitation set forth eBay Inc. v. MercExchange, L.L.C., 547 in a claim must be found in an accused U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d product or process exactly or by a substan- 641 (2006). tial equivalent.’’). The Supreme Court’s decision in eBay, Context is everything. Here it is fatal which overturned the Federal Circuit’s to Roche. These statements Roche quotes ‘‘general rule’’ that injunctions should issue are not even in reference to product-by- when a plaintiff has won a judgment of process claims. That the Federal Circuit infringement, see id. at 393–94, 126 S.Ct. has employed ‘‘exactly’’ on approximately 1837, generated a flurry of speculation three occasions in the context of a boiler- about whether district courts would depart plate recitation of the all-elements require- from established norms in patent cases. ment is by no means illustrative of a trans- formation in patent law. The 8933 patent In the present case, the Court thought makes no claim to a specific number of initially that the FDA’s approval of MIRC- hydrogen atoms, and Amgen’s experts ERA and the competition it would give opined that Roche’s EPO did not deviate Amgen’s products indicated rather strong- 210 581 FEDERAL SUPPLEMENT, 2d SERIES ly that the public interest would be served fringed MercExchange’s ‘‘business method by allowing its introduction, upon terms, patent for an electronic market designed into the United States pharmaceutical to facilitate the sale of goods between pri- market. To test this initial impression, the vate individuals by establishing a central Court held extensive evidentiary hearings, authority to promote trust among partici- appointed a special master and technical pants.’’ 547 U.S. at 390–91, 126 S.Ct. advisor, and carefully weighed the public 1837. MercExchange was a company that interest.12 In fact, the Court’s initial im- those familiar with the industry would pression does not withstand a reflective characterize as a ‘‘patent troll.’’ Patent and detailed analysis. trolls are ‘‘nonpracticing entities’’ who ‘‘do While eBay has allowed courts to decline not manufacture products, but instead hold requests for injunctive relief where the TTT patents, which they license and en- plaintiff is a ‘‘patent troll,’’ eBay has force against alleged infringers.’’ Taurus changed little where a prevailing plaintiff IP v. DaimlerChrysler Corp., 519 seeks an injunction to keep an infringing F.Supp.2d 905, 911 (W.D.Wis.2007). The competitor out of the market. This case is district court refused the request for an no exception to that trend. As shall be injunction, reasoning that the ‘‘ ‘plaintiff’s outlined below, the first three eBay factors willingness to license its patents’ and ‘its strongly favor a permanent injunction be- lack of commercial activity in practicing cause Roche’s entry into the ESA market the patents’ would be sufficient to establish would cause immense, immeasurable, ir- that the patent holder would not suffer reparable harm, with the balance of the irreparable harm if an injunction did not hardships falling on Amgen. In addition, issue.’ ’’ eBay, 547 U.S. at 393, 126 S.Ct. the public interest would not be disserved 1837 (quoting MercExchange L.L.C. v. by an injunction because there is no solid eBay, Inc., 275 F.Supp.2d. 695, 712 evidence that patients or the public coffers (E.D.Va.2003)). The Federal Circuit re- will suffer significant harm if the status versed, ‘‘articulat[ing] a ‘general rule,’ quo is maintained. In this case, the pub- unique to patent disputes, ‘that a perma- lic’s interest in a robust patent system that nent injunction will issue once infringe- maintains incentives for pharmaceutical in- ment and validity have been adjudged.’ ’’ novation outweighs the highly speculative, Id. at 393–94, 126 S.Ct. 1837 (quoting Mer- de minimis benefits that might occur as cExchange L.L.C., v. eBay, Inc., 401 F.3d the result of a denial of an injunction. 1323, 1338 (Fed.Cir.2005)). The Supreme Court vacated on the A. EBAY HAS CHANGED LITTLE WHERE FAIL- ground that ‘‘neither court below correctly URE TO GRANT INJUNCTIVE RELIEF applied the traditional four-factor frame- WOULD PERMIT A COMPETITOR TO ENTER work that governs the award of injunctive THE MARKET relief.’’ Id. at 394, 126 S.Ct. 1837. The [50] In eBay, a jury concluded that Court reiterated that plaintiffs seeking an eBay, a popular on-line auction site, in- injunction must satisfy the four-factor in-

12. The Court is not, of course, the only dis- a future royalty since ‘‘under some circum- trict court to explore the parameters of eBay. stances, the court may award an ongoing See Lynne Marek, Juries may take up future royalty for patent infringement in lieu of in- damages in patent cases, NAT’L LAW J. (Aug. 4, junctive relief.’’ Id. This technique is not 2008) at 7. In fact, Judge Ron Clark of the only efficient, it recognizes the vital role of U.S. District Court for the Eastern District of the jury as fact finding partner. See United Texas has entered an order requiring the par- States v. Luisi, 568 F.Supp.2d 106, 2008 WL ties to prepare for jury trial upon the issue of 2854498, *4–*12 (D.Mass. July 25, 2008). AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 211 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

quiry. Id. at 391, 126 S.Ct. 1837. Cate- have confronted before.’’ Id. at 396, 126 gorical rules, the Court reasoned, contra- S.Ct. 1837 (Kennedy, J., concurring). He vened the Patent Act’s remedial provision, suggested, however, that district courts which ‘‘expressly provides that injunctions ‘‘should bear in mind that in many instanc- ‘may’ issue ‘in accordance with the princi- es the nature of the patent being enforced ples of equity.’ ’’ Id. at 392, 126 S.Ct. 1837 and the economic function of the patent (quoting 35 U.S.C. § 283). holder present considerations quite unlike The Supreme Court does not appear to earlier cases.’’ Id. He warned that ‘‘[a]n have intended eBay to be pathbreaking industry has developed in which firms use precedent. The bare-bones majority opin- patents not as a basis for producing and ion did little more than remind courts that selling goods but, instead, primarily for they must exercise discretion in accor- obtaining licensing fees. For these firms, dance with the framework Congress ap- an injunction TTT can be employed as a proved. See id. at 394, 126 S.Ct. 1837. bargaining tool to charge exorbitant fees The Court did not even take a ‘‘position on to companies that seek to buy licenses to whether permanent injunctive relief practice the patent.’’ Id. at 396, 126 S.Ct. should or should not issue in [that] partic- 1837 (internal citation omitted). ular case.’’ Id. The two concurrences History, Justice Kennedy indicated, was emphasized the importance of looking to not on the side of patent trolls like Mer- historical practice when imposing injunc- cExchange. ‘‘[I]njunctive relief may have tive relief. Chief Justice Roberts, joined different consequences for the burgeoning by Justices Scalia and Ginsburg, empha- number of patents over business methods, sized that the majority opinion ‘‘rightly which were not of much economic and rest[ed] on the proposition that ‘a major legal significance in earlier times. The departure from the long tradition of equity potential vagueness and suspect validity of practice should not be lightly implied.’ ’’ some of these patents may affect the calcu- Id. at 395, 126 S.Ct. 1837 (Roberts, C.J., lus under the four-factor test.’’ Id. at 397, concurring). The Chief Justice explained: 126 S.Ct. 1837. He concluded that ‘‘equi- From at least the early 19th century, table discretion over injunctions, granted courts have granted injunctive relief by the Patent Act, is well suited to allow upon a finding of infringement in the courts to’’ take account of such circum- vast majority of patent cases. This stances before issuing an injunction. Id. ‘‘long tradition of equity practice’’ is not The Supreme Court’s narrow decision surprising, given the difficulty of pro- and emphasis on history appear to have tecting a right to exclude through mone- had their intended effect. Where failure tary remedies that allow an infringer to to grant an injunction would allow a com- use an invention against the patentee’s petitor to enter the market, district courts wishes—a difficulty that often implicates have continued to issue injunctions. A the first two factors of the traditional recent study reveals that since eBay, ‘‘with four-factor test. two exceptions, permanent injunctions is- Id. sued in all twenty-six cases where courts Joined by Justices Stevens, Souter, and found direct competition between a plain- Breyer, Justice Kennedy agreed with the tiff and the infringer.’’ Douglas Ellis et Court and the Chief Justice that ‘‘historical al., The Economic Implications (and Un- practice TTT is most helpful and instructive certainties) of Obtaining Permanent In- when the circumstances of a case bear junctive Relief after eBay v. MercEx- substantial parallels to litigation the courts change, 17 FED. CIR. B.J. 437, 442–43 212 581 FEDERAL SUPPLEMENT, 2d SERIES

(2008). The two exceptions proved the nificant litigation expenses and uncertainty rule. In ‘‘Innogenetics, N.V. v. Abbott about the value of Amgen’s patents. Sim- Laboratories, [512 F.3d 1363 (Fed.Cir. ply put, the value of the patents at issue, 2008) ], the Federal Circuit reversed the which are admittedly ‘‘the foundation of district court’s grant of a permanent in- Amgen’s business,’’ see Pl.’s Mem. Supp. junction because the damages awarded at Perm. Inj. [Doc. 1578] at 12, would be trial presumably contemplated a hypotheti- greatly diminished. Amgen’s stock price cal license for the life of the patent-at-issue would fall along with its ability to attract (not just for pre-trial infringement).’’ Id. investment for research and development. at 443. In ‘‘Praxair, Inc. v. ATMI, Inc., In addition, producing and marketing [479 F.Supp.2d 440 (D.Del.2007) ] the dis- MIRCERA would enable Roche to develop trict court TTT did not issue a permanent infrastructure that would make Roche a injunction because the plaintiff did not pro- viable competitor not only in the ESA vide sufficient evidence of lost sales, lost market, but also in markets for future profits, and/or lost market share.’’ Id. drugs. In view of these potentially immense B. THE FIRST THREE EBAY FACTORS and unquantifiable harms, the Court con- STRONGLY FAVOR PERMANENT INJUNC- cludes that failure to enter a permanent TIVE RELIEF FOR AMGEN injunction would result in irreparable [51] It is easy to understand why harm for which monetary damages are courts have continued to issue injunctions inadequate. Furthermore, because Am- where the infringer will become a direct gen’s patents are valid, enforceable, and competitor. Here, were the Court were to infringed, and in light of the potential deny Amgen’s request for a permanent harms described above, there can be little injunction, Roche would enter the ESA doubt that the balance of hardships favors market as Amgen’s competitor. The vast Amgen. Thus, the first three eBay factors majority of Roche sales would be to the strongly favor an injunction. The Court exclusion of Amgen sales, resulting in lost now turns to the fourth and final eBay profits, market share, and good will. Am- factor, the public interest. gen’s economic expert, Professor B. Doug- C. The public interest would not be las Bernheim, testified that: disserved by a permanent injunc- through market share erosion, Amgen tion would lose considerable revenues. I [52] Entering the remedy phase, the think that there’s a tremendous amount Court identified two aspects of the public of uncertainty as to exactly what the interest that might be affected by a deci- market share penetration would be, how sion to keep MIRCERA off the market. much revenue TTT Amgen would there- Primarily, the Court wanted to be sure fore lose. But despite the uncertainty that Amgen adequately satisfied the cur- about the specific magnitude, I think rent demand for ESAs. Were it the case that we can be quite confident from the that MIRCERA could aid a number of record that the losses would be extreme- patients not presently served by EPOGEN ly large. or Aranesp, then injunctive relief denying Remedy Trial Tr. vol. 1 at 103. them access to the life-altering effects of Moreover, Roche’s entry into the mar- recombinant EPO would disserve the pub- ket, despite a judgment of infringement, lic interest. Second, it seemed that Am- could encourage other would-be infringers gen’s virtual monopoly on the ESA market to attempt to gain access, resulting in sig- might be unduly burdensome on Medicare AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 213 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

and the public coffers, and Roche’s entry vide correction of anemia with once-every- might mitigate the deleterious conse- two-week dosing and to maintain stable quences. Of course, the public derives hemoglobin letters with once monthly or significant benefits from the innovation once-every-two-week dosing in all CKD generated by the economic incentives in patients. Roche’s and Amgen’s experts our patent system. Because the first debated the effectiveness of MIRCERA three factors strongly favored an injunc- when given monthly. In the opinion of tion and in light of the public interest in a Roche’s expert, Dr. Steven Fishbane, the robust patent system, the Court recog- data from clinical trials establish non-infe- nized that the evidence of harm to patients riority of MIRCERA in efficacy when and Medicare would need to be fairly com- compared to the currently available ESAs, pelling. After a four-day hearing on injunctive relief, the Court was satisfied that as well as that MIRCERA has a compara- the public interest would not be disserved ble safety profile to the currently available by maintaining the status quo in the ESA ESAs. Fishbane Expert Rep. ¶¶ 58, 74. In market. addition to concluding that Roche’s studies establish non-inferiority of MIRCERA as Below, the Court will balance three factors: patient health, Medicare savings, and compared to currently available ESAs, Dr. the public’s interest in a robust patent Fishbane concluded that ‘‘MIRCERA’s system. First, although an additional ability to maintain a safe and stable hemo- choice would undoubtedly benefit patients globin level over time is not clinically infe- and doctors, it is not clear that MIRCERA rior to the hemoglobin stability achieved offers an advantage so appreciable that it with presently available ESAs, such as would justify abrogation of Amgen’s mo- EPOGEN and ARANESP.’’ Id. ¶ 75 (us- nopoly privilege. Any conclusions regarding plus/minus 1g/dL criterion). ing a potential savings to Medicare are too speculative to justify the denial of a per- Amgen’s expert John Lubina disputed manent injunction. In fact, the warped Fishbane’s conclusions regarding hemoglo- economic incentives created by Medicare bin stability of MIRCERA and claimed reimbursement and speculation about that plots of weekly mean hemoglobin re- changes in regulation mean that MIRC- veal increased hemoglobin variability asso- ERA’s presence on the market might actu- ciated with MIRCERA treatment, particu- ally result in more expensive drugs for larly during the titration phase of the consumers. Finally, any marginal health Phase III trials. Lubina Expert Rep. or economic benefits would be outweighed ¶¶ 87, 93. Moreover, patients treated with by the potential harm to the incentives for peg-EPO (MIRCERA) statistically have a innovation underlying the patent system. significantly greater likelihood of prema- In short, the Court cannot conclude that ture withdrawals from treatment relative granting a permanent injunction disserves to patients treated with reference drugs. the public interest. Id. ¶¶ 91, 100.

1. Although doctors and patients The half-life of a medicine is a measure would probably benefit from addi- of the amount of time a therapy is avail- tional choice, it is not clear that able to be used by the body. Dr. Fishbane MIRCERA offers significant clini- claims that, for intravenous administration, cal advantages over Aranesp the half-life of MIRCERA (134 hours) is As outlined in the background section, significantly longer than that for Aranesp MIRCERA received FDA approval to pro- (25.3 hours) or EPOGEN (6.8 hours); with 214 581 FEDERAL SUPPLEMENT, 2d SERIES subcutaneous administration, the half-lives Expert Rep. ¶ 141; Remedy Trial Tr. vol. are estimated at 139, 48.4, and 19.4 hours 3 [Doc. 1739] at 532; Remedy Trial Tr. vol. for MIRCERA, Aranesp, and EPOGEN, 4 [Doc. 1740] at 641–42. respectively. Unlike Aranesp and EPO- GEN, whose half-lives when administered For ESRD patients not going to dialy- intravenously are considerably shorter sis centers three times weekly for hemo- than when administered subcutaneously, dialysis treatment but instead receiving MIRCERA’s half-life is essentially unaf- home dialysis or peritoneal dialysis, any fected by route of administration. Fish- benefits from more intense monitoring as- bane Expert Rep. ¶¶ 30, 130, 132. sociated with thrice-weekly dialysis center While the longer half-life of MIRCERA visits are not available. Instead, for these underlies its FDA approval for once- patients, there may well be a convenience monthly dosing for CKD maintenance pa- benefit to less frequent dosing with subcu- tients, the Roche and Amgen experts dif- taneously administered MIRCERA, par- fered in how they interpreted and evaluat- ticularly for those for whom travel times ed the less frequent dosing requirement or mobility is an issue. Fishbane Expert for MIRCERA. According to Amgen’s ex- Rep. ¶ 138. Similarly, for CKD anemia pert Dr. Glenn Chertow, because ESRD patients not on dialysis, the less frequent patients already typically receive hemo- once-every-two-weeks or once-monthly dialysis at a dialysis center three times dosing with MIRCERA-as opposed to weekly via arteriovenous fistula or graft thrice-weekly dosing with Procrit or once (native and artificial connections between weekly dosing with Aranesp-is likely to arteries and veins) or large intravenous provide benefits in the form of increased catheter, and because these blood lines can convenience and less travel time. See id. also be used efficiently to administer epoe- ¶ 153; Remedy Trial Tr. vol. 4 at 616–18. tin alfa (EPOGEN) simultaneously three Moreover, for patients receiving an ESA times weekly, there is little benefit to the via the subcutaneous route of administra- patient or provider to switching to the less tion, the less frequent administration with frequent dosing associated with use of MIRCERA implies less patient discomfort MIRCERA. Chertow Expert Rep. ¶¶ 25– from the fewer number of injections. 26; see also Remedy Trial Tr. vol. 2 [Doc. Fishbane Expert Rep. ¶¶ 139, 150; Reme- 1738] at 310–11. Moreover, the more fre- dy Trial Tr. vol. 4 at 656–58. In sum, quent administration may in fact be pref- while for many ESRD patients receiving erable as it can facilitate more rapid and thrice-weekly dialysis the potential con- precise titration, which may be particularly venience of less frequent dosing on important for ESRD patients having co- morbidities. Chertow Expert Rep. ¶ 32; MIRCERA may not be important, for see also id. ¶¶ 25–26. On the other hand, their providers and nurses it would reduce more frequent dosing involves more time administration efforts and perhaps medi- spent ordering, preparing, administering, cation errors. For CKD patients, howev- and recording ESA treatments and there- er, particularly for those patients whose by creates greater opportunities for mak- time value and traveling expenses are ing dosing or medication errors. Fishbane large, the availability of a more conve- Expert Rep. ¶¶ 140, 143, 156. In addition, nient, less frequent dosing regimen could the less frequent dosing of MIRCERA constitute a substantial improvement in relative to EPOGEN and Aranesp for pa- quality of life and perhaps even an im- tients on dialysis frees up time for dialysis proved treatment adherence and health center staff, particularly nurses. Fishbane outcome. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 215 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

Other benefits of permitting MIRCERA FDA, the established ESAs on the U.S. to enter the market would be expanding market are already ‘‘clinically used at long- the armamentarium with which doctors er dosing intervals than the intervals that treat CKD patients with anemia, some of are FDA approved in the labels.’’ Reme- whom exhibit poorly understood idiosyn- dy Trial Tr. vol. 3 at 424–26. cratic responses, and reducing the vulnera- Regarding hemoglobin variability, Dr. bility to manufacturing problems that ex- Chertow testified that ‘‘the individuals who ists by virtue of the fact that Amgen is the were treated with peg-EPO relative to sole manufacturer of all ESAs marketed in those treated with epoetin alfa and dareo- the United States: EPOGEN, Procrit, and poetin, established ESAs, were, for in- Aranesp. Fishbane Expert Rep. ¶¶ 164– stance, threefold more likely to experience 166; Remedy Trial Tr. vol. 4 at 622–23; a hemoglobin excursion above 14 grams see also Fishbane Supp. Expert Rep. ¶ 51. per deciliter TTT which as I noted earlier As to the first issue, Dr. Rebecca Schmidt are associated with adverse clinical testified that it is a common albeit poorly events.’’ Remedy Trial Tr. vol. 3 at 451.13 understood phenomenon that some pa- Moreover, during the titration phase of the tients respond better with one seemingly Phase III studies there was a statistically similar medication than another. Remedy significant greater mortality rate for sub- Trial Tr. at 622–23. While it is impossible to predict with any confidence just how jects treated with pegEPO versus those large the overall clinical benefits from en- treated with established ESAs, Remedy try by MIRCERA into the United States Trial Tr. vol. 3 at 455, although by the end market would be, it is possible they could of the study the likelihood of death was be considerable. ‘‘roughly the same’’ in peg-EPO treated subjects and subjects treated with the ref- In contrast, Amgen’s expert, Dr. Glenn erence ESAs. Id. at 455–56. During cross- Chertow argued that: examination, Dr. Chertow acknowledged The medical need in the case of anemia that, in approving MIRCERA for the is to prevent transfusion and to restore treatment of anemia due to chronic renal the hemoglobin concentration to a level failure, the FDA stated that its evaluation sufficient to maintain adequate energy, of product safety data for MIRCERA ‘‘did strength, and to prevent symptoms such not reveal particular safety issues that as breathlessness and conditions such as heart failure. And those needs are ade- were unexpected for a member of the ESA quately met by existing ESAs or eryth- class when used for this specific indica- ropoiesis stimulating agents. tion.’’ Id. at 465; see also Remedy Trial Tr. vol. 4 at 649 (providing testimony of Remedy Trial Tr. vol. 3 at 421–22. More Dr. Fishbane to same effect). generally, Dr. Chertow concluded that ‘‘Roche’s clinical studies, as set forth in its Dr. Fishbane testified that hemoglobin regulatory filings, fail to demonstrate that variability has been quantified in the rele- its peg-EPO product satisfies any unmet vant scientific literature ‘‘as large move- medical need in the treatment of anemia ments of hemoglobin, one and a half to two associated with chronic kidney disease.’’ and half, three grams of hemoglobin.’’ Chertow Expert Rep. ¶ 21. In terms of Remedy Trial Tr. at 647. This quantifica- dosing frequency, Chertow notes that al- tion of variability is considerably larger though off-label and not approved by the than that discussed and emphasized by Dr.

13. A hemoglobin excursion is a ‘‘hemoglobin ly desired target rate.’’ Remedy Trial Tr. vol. concentration that falls outside of the clinical- 3 at 459. 216 581 FEDERAL SUPPLEMENT, 2d SERIES

Chertow, which apparently ranged from ertheless, one set of facts is clear and 0.3 to 0.5 grams. Fishbane Supplemental warrants particularly strong consideration. Report ¶¶ 56–57. When asked whether he Although clinical studies in support of a had seen any such variability in the Phase Biologics License Application at the Unit- III study patients, Dr. Fishbane responded States Food and Drug Administration ed that ‘‘1789 patients studied in the Phase or at the European Medicinal Evaluation III program, and with this big a primary Agency frequently involve several thou- power analysis, there was no evidence of sand patients, it often takes many years variability with MIRCERA compared to before the medical community learns how the comparators.’’ Remedy Trial. Tr. vol. new therapies are to be used safely and 3 at 647. The implication is that while effectively, for what patients and at what Chertow’s findings on greater hemoglobin doses, and conditions under which their variability may be statistically significant, use is not advised. As physician/patient they are not clinically relevant. See Fish- experience accumulates and scientific evi- bane Supp. Rep. ¶¶ 55–58. dence evolves, the benefit/risk calculation Dr. Fishbane notes that because the ti- underlying treatment often shifts as well. tration period is a dose-finding exercise designed to find the correct dose of the For example, while EPOGEN was experimental drug for a particular patient, launched in 1989 and Aranesp in 2001 in findings from the titration period are not the U.S., major changes in treatment examined to determine effects of the drug. guidelines and FDA product labeling for Rather, the proper period for assessing these ESAs were still emerging as late as drug effects is the evaluation phase, which 2007. These included reducing the hemo- is also known as the assessment phase. globin treatment upper range target to 12 Id. ¶ 25. Because physicians have more mg/dL and warning that dosing to achieve experience with dosing of established target hemoglobin of greater than 12 ESAs, one should expect that those pa- mg/dL increases the risk for: (1) death and tients receiving MIRCERA would have serious cardiovascular events; (2) short- greater hemoglobin variations during the ened time to tumor progression in patients titration period. Dr. Fishbane stated: with advanced head and neck cancer re- As the patients who are continuing on ceiving radiation therapy; (3) increased the older drug are not titrating—the deaths attributed to disease progression in correct dose for that patient is already patients with metastatic breast cancer re- known and the patient is receiving it— ceiving chemotherapy; and (4) increased any comparisons between results of pa- risk of death in patients with active malig- tients taking the experimental drug with nant disease not under treatment with che- patients taking the older drug is not an motherapy or radiation therapy. Bern- equivalent comparison and has no scien- heim Expert Rep. ¶ 39. Some of these tific merit. new FDA treatment guidelines took the Id. ¶ 26. form of product label black box warnings, a. Findings with respect to patient which are the strongest warnings the FDA health can issue short of ordering product with- Obviously, the Roche and Amgen ex- drawal from the U.S. market. Fishbane perts differ in their interpretations and Supp. Rep. ¶ 17. In addition, after review- evaluations of the clinical, convenience, and ing data on its ESAs at the request of the quality of life attributes of MIRCERA rel- FDA, in 2007 Amgen removed a number of ative to the currently available ESAs. Nev- quality-of-life claims from its product label. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 217 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

Id. ¶ 14; Remedy Trial. Tr. vol. 3 at 473– a. A primer on how Medicare calcu- 75. lates its reimbursement rate for ERSD drugs Given that both the FDA and the Euro- pean Medicines Agency have approved Medicare is the dominant payor in the MIRCERA as safe and effective for the ERSD market and plays a very important treatment of anemia in patients with albeit less dominant role in the CKD mar- chronic renal failure, it seems likely that ket. Because ERSD patients regardless some patients might well benefit from of age are generally eligible for coverage by Medicare Part B beginning in the MIRCERA being on the market as an fourth month of dialysis treatment, Medi- additional element in the physicians’ arma- care Part B is the dominant payor for mentarium due to clinical, convenience, EPOGEN. Amgen expert Professor and quality-of-life concerns. Nevertheless, Douglas Bernheim estimates that, in 2006, with major changes in recommended treat- Medicare Part B accounted for 75% of ment modalities still occurring many years EPOGEN sales in the United States, while after the initial product launch for current- other governmental payors included Med- ly available ESAs, it is also plausible that, icaid (2%), the Veterans’ Administration were MIRCERA allowed to be marketed and Department of Defense (1%), and oth- in the United States, information and con- er public health services (2%). Together, sensus on its risk/benefit profile relative to governmental purchasers comprised ap- those of EPOGEN, Procrit, and Aranesp proximately 80% of EPOGEN sales, while would also evolve and change, perhaps commercial payors accounted for the re- substantially. See Remedy Trial Tr. vol. 1 maining 20%. Bernheim Expert Rep. at 157–58. Hence, it is difficult if not ¶ 46, Fig. 4. Medicare is also a large pur- impossible to predict with any reasonable chaser of Aranesp. In 2006, Medicare ac- level of confidence what the net clinical, counted for 41% of Aranesp sales. Id. convenience, and quality-of-life benefits of ¶ 46, Fig. 5. Mircera will be relative to those of the existing ESAs. Medicare’s method of paying for ESRD drugs, which are separately billable under Part B, has changed several times in re- 2. The Court cannot conclude that cent years. Under provisions of the Medi- MIRCERA would reduce Medicare care Prescription Drug, Improvement and costs14 Modernization Act of 2003 (‘‘MMA’’), the As shall be outlined below, the record basis on which Medicare Part B reim- does not support a finding that MIRCERA bursement of most physician-dispensed would reduce Medicare costs; indeed, drugs was changed, effective January 1, prices may actually rise. 2004, from 95% of the Average Wholesale

14. The Court is indebted in this section of its plex technical litigation’’); see also MediaCom memorandum to the fine work of Ernest Corp. v. Rates Tech., Inc., 4 F.Supp.2d 17, 29– Berndt, an applied economics professor at the 30 (D.Mass.1998). While Professor Berndt Massachusetts Institute of Technology Sloan consulted with and prepared memoranda for School of Business, who the court appointed, the Court, his engagement ended before the with the parties’ consent, its special master writing of this opinion, and he had no partic- and technical advisor on the economics of the ipation therein. The analysis and conclusions Medicare reimbursement system. See Amgen are, of course, those of the Court alone. Pro- I, 126 F.Supp.2d at 78 n. 3 (discussing the fessor Berndt markedly accelerated and deep- appointment of technical advisors in ‘‘com- ened the Court’s understanding. 218 581 FEDERAL SUPPLEMENT, 2d SERIES

Price (‘‘AWP,’’ a list price) to 85% of the which rebates are earned in a quarter ‘‘t’’ April 1, 2003 AWP. Patricia Danzon, Gail but are not paid until, say, quarter t v 2. R. Wilensky, and Kathleen E. Means, Al- The payment of the rebate increases the ternative Strategies for Medicare Payment price concession for quarter t v 2 (and of Outpatient Prescription Drugs—Part B three subsequent quarters, because ASP is and Beyond, 11 AM. J. MANAGED CARE 173, calculated as a four-quarter moving aver- 173 (2005). Beginning January 1, 2005, age) but has no impact on the net ASP in Medicare Part B reimbursement for sin- quarter t or quarter t v 1. See Bernheim gle-source (primarily on-patent originator) Expert Rep. ¶¶ 113–14. As discussed be- drugs became 106% of their two-quarter low, this dynamic aspect of rebates and lagged average sales price (‘‘ASP’’) or price concessions in ASP calculations has their current wholesale acquisition cost strategic pricing implications for drug (‘‘WAC’’), whichever is lower. Id. The manufacturers, including both incumbents ASP is intended to represent the volume- and potential entrants. weighted, average manufacturer sales price net of rebates and discounts to all ASP levels are calculated and then pub- United States purchasers excluding sales licly posted each quarter. The published that are exempt from the Medicaid best ASP price for quarter t represents the price calculation and those to other federal average sales price lagged two quarters, purchasers. Id.; see also Bernheim Ex- i.e., from quarter t—2. U.S. GOV’T AC- pert Rep. ¶ 49. COUNTABILITY OFFICE, END–STAGE RENAL DIS- Rebates and discounts incorporated into EASE: BUNDLING MEDICARE’S PAYMENT FOR the ASP calculation include volume dis- DRUGS WITH PAYMENT FOR ALL ESRD SER- counts, prompt payment discounts, cash VICES WOULD PROMOTE EFFICIENCY AND CLIN- discounts, free goods that are contingent CIAL FLEXIBILITY 12, available at http:// on any purchase requirement, charge- www.gao.gov/new.items /d0777.pdf (last backs, and rebates (other than rebates un- visited Sept. 9, 2008). Because the calcula- der the Medicaid drug rebate program). tion of an average sales price requires a See 42 C.F.R. § 414.804(a)(2). Because sales history, a different methodology some discounts and rebates are deter- must be employed for new drugs or biolog- mined on an annual basis, the manufactur- icals. The Centers for Medicare and Med- er is instructed to calculate the quarterly icaid Services (‘‘CMS’’) has specified that, ASP by adding up the relevant data for for new drugs and biologicals approved for the most recent 12–month period, dividing marketing in the United States, the pay- this by the relevant sales subject to the ment allowance is 106% of the WAC or, if ASP reporting requirement for the same the WAC is not published, the invoice 12–month period, and applying that per- price. See, e.g., Centers for Medicare and centage to the current quarter sales as the Medicaid Services, Change Request 5646 price concession for the quarter for which (June 15, 2007), at 4, available at http:// the ASP is being submitted. Id. www.cms.hhs.gov/Transmittals/downloads § 414.804(a). R1270CP.pdf (last visited Sept. 2, 2008). Rebate payments can also be deferred Put simply, for the first two quarters for to time periods after they are earned; spe- which a new drug is sold, the ASP is cifically, rebates affect ASP calculations by computed as 106% of the WAC, or invoice reference to when they are paid, not pricing if the WAC is not published. Be- earned. A consequence of this is the phe- ginning in the third calendar quarter of its nomenon known as ‘‘rebate overhang,’’ in first year of U.S. sales, however, the AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 219 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

drug’s published ASP represents the aver- plus 6%) and what the provider actually age sales price lagged two quarters. paid for the drug. Id. at 109. This difference is called the ‘‘cost recovery.’’ Bern- b. Medicare’s current method for cal- heim Expert Rep. ¶ 72. culating reimbursement rates pro- Therefore, unlike in a textbook competi- vides an incentive to pharmaceuti- tive market where manufacturers compete cal companies selling ESAs to keep their prices high by reducing prices, vendors in the ESA market instead focus on making their In undertaking an appropriate economic product attractive to physicians by maxim- analysis of the effect MIRCERA’s entry izing their cost recovery. Remedy Trial might have on the ESA market, Professor Tr. vol. 1 at 110. This often has the effect Bernheim explained that one must ‘‘begin of encouraging pharmaceutical companies with an understanding of the institutional to avoid reducing their prices.15 In es- framework within which competition is taking place, an understanding of the in- sence, the Medicare policy of reimbursing centives that creates, [and] an understand- providers on a fee-for-service basis at a ing of how the organizations are intending rate of ASP plus 6% gives those providers to respond to those incentives.’’ Remedy incentives to maximize their cost-based Trial Tr. vol. 1 at 106. Bernheim identi- billing, subject to acceptable medical prac- fied three ways in which the market for tice, a goal that can be best achieved with ESAs, characterized by ‘‘ASP-based com- more expensive drugs. petition,’’ differs from traditional ‘‘plain va- Given the two-quarter lagged ASP cal- nilla competition.’’ Id. at 107–08. First, culation for incumbents and the fact that a in textbook market competition, end user new entrant is assigned an ASP equal to consumers make choices. In prescription its WAC, the above circumstances create drug markets, however, physicians and an incentive for new entrants to launch at providers, not patients, generally make prices that are higher than those of the product choices. Id. at 108. Second, incumbent and that, accordingly, offer a while in textbook market competition end higher cost recovery to providers, which users pay directly for products they con- presumably will gain the new entrant mar- sume, in the ESA market end users pay at ket share. As Professor Bernheim testi- most only a relatively small proportional fied, a new entrant can preserve this initial co-payment, and it is Medicare and third- party payors that bear most of the direct advantage over time: burden. Id. at 108–09. Third—and per- [The new entrant] could make this haps most important—in textbook market advantage permanent by simply dis- competition end users attempt to satisfy counting and then maintaining their their needs at minimum cost. Under ASP- discounts, or alternatively they could based competition, however, providers are discount and then increase these dis- drawn to the drugs that offer the largest counts somewhat through time[.] difference between the amount a provider [T]heir ASP would be declining, but is reimbursed per drug unit under Medi- [the entrant] could manage that in a care (currently, as discussed above, ASP way that would allow them to converge

15. The fact that patients bear little to no bur- price to gain market share. Instead, the pri- den for the cost of their ESA drugs and that mary factor constraining an upward trend in they generally do not pick which drug they price is the threat that action by government will receive remove virtually any need for or other payors will ‘‘change the rules of the pharmaceutical companies to reduce their game.’’ Remedy Trial Tr. vol. 1 at 112. 220 581 FEDERAL SUPPLEMENT, 2d SERIES

to an ASP that’s higher than the in- ment system was implemented in 2005. cumbent’s ASP[,] thereby preserving Id. at 160–61. A search yielded two such [its] advantage. drugs: one for treatment of breast cancer Id. at 128. and the other for age-related macular de- In general, Professor Bernheim opined generation. Id. at 162. In both cases, a that ‘‘there’s no reason to think that the new entrant launched at a WAC higher dynamics of price cutting [present in text- than that of the competitor’s ASP. In nei- book competition] will apply’’ in the ESA ther case did the addition of the new com- market. Id. at 160. Instead, product pric- petitor to the market lead to decreased ing will depend on whether the relevant prices. Instead, the incumbent manufac- companies are focused on the long or short turer maintained its ASP while the ASP term. Id. at 159–60. Specifically, the for the new drug remained above that. ASP-based market creates a ‘‘Hobson’s Id.; see also Bernheim Expert Rep. choice’’ for companies choosing a pricing ¶¶ 107–11. In sum, given the incentives strategy. On one hand, they can choose to that exist in the ASP-based reimburse- discount prices at first to gain market ment system that represents the core of share, which negatively impacts their ASP the ESA market, Professor Bernheim and thus their future competitiveness. On opined that ‘‘it [is] likely that you will not the other, they can charge high prices to get any competition driving prices maximize their ASP, losing market share down.’’ 16 Id. at 202–03. in the present in order to be more competitive in the future. Id. at 160. While it is c. Roche is likely to enter the market impossible to predict with certainty what at a price higher than that of Am- will happen, Professor Bernheim testified gen’s products and to maintain high that some empirical evidence exists as to prices over time which of these paths companies might The provider preference for drugs that choose. maximize cost recovery was a major factor Professor Bernheim described for the considered by Roche when formulating its Court the pricing decisions made by drug MIRCERA pricing strategy. Barbara Se- manufacturers that sell drugs for which nich, Vice President of Marketing and Medicare reimbursement is important af- Sales for Roche, testified that launching ter the ASP-based Medicare reimburse- MIRCERA with a price that provided phy-

16. Professor Bernheim did admit that there is you know, that’s a good almost in and of some degree of uncertainty in predicting the itself if you can introduce competition. effects on price of a new entrant in the ASP That’s generally what economists think, market: isn’t it, generally? ‘‘THE COURT: You’re telling me that un- THE WITNESS: Generally, yes. We think der this ASP system you cannot predict the that competition in a free market, and price effects of adding competitors? Stop that’s the key point, is a good thing. But there. there are recognitions in the economics lit- THE WITNESS: I think— erature that competition isn’t always benefi- THE COURT: Is that right? cial. For example, the phenomenon of the THE WITNESS: I think it’s, I think it’s natural monopoly. Competition may lead very difficult to do that. We have a limited to very inefficient outcomes TTTT’’ foundation, a limited amount of evidence Remedy Trial Tr. at 165–66. Ultimately, how- that can be brought to bear on that. ever, he concluded the incentives present in THE COURT: Though in what you’re call- the ESA-market likely will induce pharmaceu- ing vanilla economics, competition is al- tical companies to refrain from reducing their most the greatest good. If you compete, prices. See id. 202–03. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 221 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

sicians with an adequate cost recovery was Meeting, February 27–28, 2007 (‘‘MIRC- one of three goals Roche wanted to satisfy ERA Pricing Meeting’’) at slide 47, 197, with its pricing strategy, the other two 206 (stating there is a ‘‘[n]eed to carefully being (1) avoiding setting a price so high monitor rate of ASP decline to avoid race as to jeopardize Medicare 17 and other cov- to the bottom—[t]his is the Glide Path erage and (2) providing a return on concept’’). Professor Bernheim opined Roche’s investments. Remedy Trial Tr. that, based on his review of Roche docu- vol. 4 at 561–62, 567, 569–71. As explained ments and his knowledge of the ESA mar- above, one way that new entrants can pro- ket, Roche would ‘‘execute this glide path, vide superior cost recovery to providers is this management of its initial advantage to set their WACs at prices that exceed [over Amgen], in a way that preserves the ASP of incumbents. Indeed, Professor that advantage through time and main- Bernheim testified that his review of a tains a relatively high ASP.’’ Remedy Tri- series of high-level Roche planning docu- al Tr. at 130–31. ments and his understanding of the institu- Roche’s ability to manage its glide path tional peculiarities of the ESA market led to maintain a high ASP is somewhat de- him to conclude that Roche is ‘‘very likely’’ pendent on Amgen’s pricing decisions. If to ‘‘enter with a WAC that implies a sub- Amgen fails to reduce the ASP of Aranesp stantial premium on a treatment basis.’’ and EPOGEN to increase cost recovery Remedy Trial Tr. vol. 1 at 130. for providers, Roche may be required to This would not be the end of the matter, implement only minimal decreases to its for as Roche’s Vice President of Sales and ASP in order to maintain its advantage, Marketing testified: meaning that its price would remain rela- [I]f you want to maintain the net cost tively high. On the other hand, if Amgen recovery at the provider level you have responded to MIRCERA entry by increas- to then decrease TTT the price or in- ing discounts and rebates substantially— crease your discounts to those providers thus increasing Aranesp and EPOGEN’s to keep them whole so to speak. But cost recovery and making them more com- those incremental discounts then are re- petitive—Roche may be forced to respond flected in your ASP two quarters later. in a manner that generates a steeper re- So you’re constantly stepping down, if duction in its ASP. See Remedy Trial Ex. you will, to maintain the net cost recov- 6, MIRCERA Pricing Meeting at slide 335. ery to the providers. And so by that alone the ASP, if you will, goes down d. Amgen’s competitive response to and that’s what we call the glide path. Roche is uncertain, but there is a Remedy Trial Tr. vol. 4 at 569. Roche reasonable likelihood it would either has expressed an intention to do what it raise prices or maintain the status can to minimize the decline of its ASP quo while at the same time maintaining cost Professor Bernheim concluded, based on recovery for its providers. See Remedy information obtained from Amgen and in Trial Ex. 6, MIRCERA WAC and Pricing part on the evidence gleaned from the

17. Roche analysts recognized that Medicare It recognized that an unreasonably high price, would be the largest payor for MIRCERA and although likely to cause MIRCERA to gain concluded that ‘‘Medicare reimbursement is market share via a high cost recovery, might the foundation of MIRCERA business.’’ Rem- trigger unfavorable action. See id. at slides edy Trial Ex. 6, MIRCERA WAC and Pricing 86, 90. Meeting, February 27–28, 2007, at slide 109. 222 581 FEDERAL SUPPLEMENT, 2d SERIES

pricing decisions made by incumbents of- Id. ¶ 3.2. The sum of the potential rebates fering breast cancer and macular-degener- for which Fresenius may qualify during ation drugs in similar situations in the the term of the agreement is $225 million. past, that ‘‘the most likely outcome’’ is that Id. Ex. 3.1, Discount Terms and Condi- Amgen would not reduce its prices. Rem- tions, ¶ 8.3. edy Trial Tr. vol. 1 at 178. Similarly, although admitting it was difficult to pre- The rebate scheme, however, is signifi- dict with certainty, Professor Bernheim cantly backloaded. Fresenius was eligible opined that ‘‘the most likely thing is [that to earn just $10,000,000 in rebates in the there will be] either no price erosion or final quarter of 2006 and just $25,000,000 some degree of price erosion’’ with regard in rebates in the years 2007, 2008, and to Amgen’s products. Id. at 181. 2009. Id. The potential rebates increase In fact, Amgen has already taken a sig- sharply thereafter to $55,000,000 in 2010 nificant step toward locking in a high and $85,000,000 in 2011. Id. In other ASP—and with it, a high reimbursement words, 62.5% of the rebates are to be paid rate—for the life of the patent. On Octo- in the final two years of the agreement— ber 13, 2006, Amgen and Fresenius Medi- just prior to the point when the first of cal Care Holdings, Inc. entered into a Amgen’s patents is scheduled to expire in sourcing and supply agreement covering 2012. from October 1, 2006 to December 31, 2011. Remedy Trial Ex. 20, Amgen–Fre- senius Sourcing and Supply Agreement e. The Court cannot compensate for (‘‘Supply Agreement’’) ¶¶ 1.11–1.12. Under the peculiarities of the ESA market the terms of the agreement, Amgen is the MIRCERA’s likely market entry at a sole supplier of the erythropoiesis stimu- price higher than that of Amgen products lating proteins (‘‘ESPs’’) that Fresenius is one reason it seems prices for ESA very uses to treat its patients. Id. ¶ 2.1. well may not decline. While it may seem Fresenius is a large dialysis organization that the Court could encourage lower that, together with another large dialysis prices by directing MIRCERA to set a organization called DaVita, accounts for launch price no higher than the prices of about two-thirds of treated ERSD patients the Amgen products, it is not that simple. in the United States. Because these large As Professor Bernheim testified, one rea- dialysis organizations account for such a son for this is the possibility that MIRC- large percentage of the market, the prices they pay will have a significant affect on ERA is less efficient on a dosing basis ASP. Under the terms of the agreement, than EPOGEN; were this true, MIRC- Amgen will be able to maximize its ASP ERA would still have an advantage. Rem- and the corresponding Medicare reim- edy Trial Tr. vol. 1 at 157. A second bursement rate. reason for this is that the court-ordered Specifically, the agreement provides for parity could be undermined due to the an Annual Incremental Rebate (‘‘AIR’’) existence of rebate overhang. Id. at 188. Opportunity to Fresenius if its aggregate But perhaps most importantly, putting the Qualified Gross Purchases of EPOGEN companies on equal footing would not elim- meet certain annual volume thresholds. inate the idiosyncratic dynamics of ASP- See id. ¶¶ 3.1–3.2. Rebates will be calculat- based competition, which do not lend ed on a quarterly basis but will be paid in themselves to the ‘‘usual dynamics of price the year or the year after they are earned. cutting.’’ Id. at 160. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 223 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

f. Further complicating the inquiry, indicated he expected bundling polices to administrative changes may alter be adopted ‘‘shortly.’’ Fishbane Expert companies’ incentives, making it dif- Rep. ¶ 149. In sum, there is much uncer- ficult for the Court to predict the tainty about when the reimbursement effect of MIRCERA on the market scheme will change. In considering the likely effect of While Roche and Amgen make differing MIRCERA’s entry into the ESA market, assumptions about when bundling might the Court must bear in mind that the occur, both agree that the impact of the administrative landscape is constantly switch would be substantial. Roche, for shifting and, accordingly, altering drug example, believes that bundling would pro- manufacturer incentives. In 2003, Con- duce cost pressures that would reduce gress instructed CMS to design and assess ESRD dosing by 25%. Remedy Trial Ex. the feasibility of a payment system that, 8, 2007 MIRCERA Business Plan at slide instead of paying for ERSD drugs under a 25. separate billable rate as is done currently, would bundle payment for these drugs g. Ultimately, the Court cannot con- with payment for other ESRD services clude that MIRCERA’s entry into under a single prospectively set rate. This the ESA market would reduce Medi- Medicare policy change has been endorsed care costs by the GAO, the Medicare Payment Advi- Professor Bernheim ultimately conclud- sory Commission, and CMS. U.S. GOV’T ed that MIRCERA’s market entry ‘‘would ACCOUNTABILITY OFFICE, END–STAGE RENAL probably not lead to reduced Medicare FAILURE, supra, at 23. reimbursement costs.’’ Remedy Trial Tr. If Congress passed legislation bundling vol. 1 at 201. He opined that while Amgen payment for drugs with other items such ‘‘may experience some price erosion,’’ it as clinical laboratory tests, the incentives was ‘‘very unlikely that Amgen’s prices facing providers of treatment for ESRD will go down far enough and fast enough to would change dramatically. Specifically, if overcome the higher reimbursements asso- reimbursement came in the form of a pre- ciated with peg-EPO and this high WAC in determined bundled amount, ERSD pro- executing the glide path.’’ Id. According- viders would have an economic incentive to purchase the ESAs and other drugs with ly, potentially Medicare might actually end the lowest acquisition cost in order to cre- up paying more, were Roche permitted to ate the maximum cost recovery, which in compete, as providers switched to more- these circumstances would be the differ- expensive MIRCERA because it offered ence between the drug acquisition cost and them a higher cost recovery. See id. at the fixed bundle reimbursement rate. 206. Bernheim Expert Rep. ¶ 72. Of course, the future cannot be predict- Roche generally assumed, when produced with certainty, and even Professor ing its planning models for the launch of Bernheim acknowledged it was ‘‘very diffi- MIRCERA, that CMS would implement cult’’ to assess the effects of adding a new ESRD bundling in 2010. Remedy Trial competitor to ASP-based competition, id. Tr. vol. 4 at 585. Some Roche documents, at 165–66, in part because it is difficult to however, indicated it expected bundling to anticipate how the companies will decide occur as late as 2011, while Amgen be- between short-term versus long-term mar- lieves it may occur as early as 2009. keting concerns (and the pricing decisions Bernheim Rebuttal Rep. ¶ 63. One expert that will result), see, e.g., id. at 176–77. At 224 581 FEDERAL SUPPLEMENT, 2d SERIES

bottom, predictions about how Amgen and Medicare costs. Because DaVita is almost Roche will compete with regard to price as large as Fresenius, any delayed rebate are speculative. provisions in a sole-sourcing contract be- Furthermore, Roche produced their own tween Roche and DaVita would further expert, Professor Einer Elhauge, who delay a reduction in ASP and, accordingly, opined that ‘‘MIRCERA entry would lower Medicare savings. prices and spending.’’ Remedy Trial Tr. It is simply impossible to predict with vol. 4 at 669. Professor Elhauge criticized certainty the effect that MIRCERA’s en- Professor Bernheim’s analysis, arguing it try would have on prices and, accordingly, ‘‘really assume[s] Medicare is irrational.’’ on Medicare expenditures. Making the He explained that, because Bernheim ‘‘as- task even more difficult are several fac- sumes there’s no quality advantage to tors. First, historical experiences with MIRCERA,’’ there would be ‘‘no rational ESAs demonstrate it is reasonable to ex- reason’’ for Medicare to approve reim- pect that the information about the risk- bursement at higher prices. Id. at 676. benefit profile of MIRCERA relative to Professor Elhauge argued that Medicare the incumbent ESAs will evolve and would rationally approve reimbursement at change, perhaps substantially. It is possi- a rate higher than that charged by Amgen ble that clinical studies or other sources only if (1) MIRCERA is ‘‘of higher quality could raise questions about the safety or than Amgen’s product’’ or (2) if Medicare efficacy of MIRCERA (or indeed, any of ‘‘thought, in fact, TTT that [MIRCERA’s] the other ESAs), thereby changing CMS entry was going to lead to lower prices treatment guidelines for reimbursement or over time [and] wanted to help fund the leading the FDA to issue a black box entry TTT to make sure that happened.’’ warning. This latter event, which likely Id. at 676–77. has a substantial impact on the ESA mar- Moreover, there is the question of ket, has occurred multiple times within the whether Roche will enter into a sole sourc- last several years, despite the fact that ing agreement with DaVita as Amgen has EPOGEN and Aranesp have been on the done with Fresenius. It appears to con- market for some time. See Bernheim Ex- template doing so; its marketing plans pert Rep. ¶ 39; Fishbane Supp. Report assume MIRCERA will capture 100% of ¶¶ 14, 17; Remedy Trial Tr. vol. 3 at 473– DaVita’s ESA use by the end of 2009. 75. Remedy Tr. Ex. 8, 2007 MIRCERA Busi- Second, it is unclear when—or wheth- ness Plan at slide 17. Under the terms of er—Congress will change the reimburse- the Amgen–Fresenius agreement, the ma- ment policy for ESAs, choosing to reim- jority of rebates Amgen will provide to burse providers on a bundled basis. Fresenius will not be paid until 2010 and Third, there is likely a difference between 2011. Because the Medicare ASP formula how ESAs are dosed in the ‘‘real world’’ as only takes rebates into account when they opposed to in a clinical environment, which are paid, these contract provisions will affects dose conversion ratios among ESAs have the effect of delaying considerably and, accordingly, their relative treatment the decline of the Medicare-calculated costs. As recognized by Roche’s Director ASP. In addition, were Medicare to switch for Strategic Pricing in the Renal Seg- to a bundled reimbursement system with ment: initial rates based upon contemporaneous [Drug companies] can do research or ASPs, these provisions would raise the analysis of our clinical studies TTT to try initial reimbursement rate and thus overall and figure out what the appropriate AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 225 Cite as 581 F.Supp.2d 160 (D.Mass. 2008)

dose or dose conversion is going to be. ment; as discussed above, for instance, it [U]ltimately, the dose conversion that can choose to reimburse on a bundled ba- occurs in the marketplace is a function sis. It also could simply reduce reim- of the provider’s experience with the bursement rates. See, e.g., Susan Adler product and what they feel is appropri- Channick, The Ongoing Debate Over Medi- ate for their patients. We can model it care: Understanding the Philosophical all we want[,] and we still may not get it and Policy Divides, 36 J. HEALTH L. 59, 70 right. (2003) (noting that, in response to ‘‘runa- Bernheim Expert Rep. ¶ 63 (quoting depo- way cost escalation,’’ ‘‘Congress changed sition of Sonders Beimfohr). Moreover, [Medicare] inpatient hospital reimburse- though it may be possible to pin down the ment in 1983 to a prospective payment ‘‘right’’ dose conversion ratio for one point system’’); Joan H. Krause, Regulating, in time, new information, changes in reim- Guiding, and Enforcing Health Care bursement policies, and the issuance of Fraud, 60 N.Y.U. ANN. SURV. AM. L. 241, label warnings may change the dose con- 268 (2004) (noting Congress’s authority to version ratio, with important economic im- reduce Medicare reimbursement rates). plications for the various ESAs. Congress could also pass legislation aug- In sum, the multiple variables present in menting or undermining incentives for in- the ESA market as well as the incentives novation that affect the value of drug pat- provided by ASP-based competition pre- ents. See, e.g., Bayh–Dole Act of 1980, 35 vent this Court from concluding that U.S.C. §§ 200–212 (permitting public uni- MIRCERA’s entry into the marketplace versities to enter into exclusive license would reduce Medicare expenditures. agreements with private companies); Drug Price Competition and Patent Term Resto- h. Separation of powers considerations ration Act, Pub.L. No. 98–417, 98 Stat. and Federal Circuit precedent sug- 1585 (1984) (restructuring regulations for gest that cheaper drugs are not a generic drugs). Separation of powers con- strong justification for refusing a siderations thus dictate that, absent a permanent injunction strong showing that the government is [53] Medicare is regulated and admin- being fleeced, courts should proceed with istered by the elected branches of govern- caution before attempting to intervene on ment, and it has procedural mechanisms Medicare’s behalf. See United States v. designed to keep drug prices from reach- Oakland Cannabis Buyers’ Cooperative, ing exorbitant levels. See Remedy Trial 532 U.S. 483, 497, 121 S.Ct. 1711, 149 Ex. 6, MIRCERA Pricing Meeting at L.Ed.2d 722 (2001) (stating that courts slides 83–84, 86, 90. Congress could fashioning injunctive relief cannot ‘‘over- change the way it calculates reimburse- ride Congress’ policy choice[s]’’).18

18. As the Honorable Dennis Jacobs, Chief development of mental capacityTTTT [Yet] Judge of the Second Circuit Court of Appeals, depending on the question, the legal mind has explained: may be insufficient or may be inferior to the moral imagination; the scientific method; [A] consequence of biased vision is the the practical arts of healing, politics, and assumption that if something is of great entrepreneurship; the promptings of loyal- importance, it can be safely left to law- ty, faith, and patriotism; and the experi- yersTTTT As judges, we tend to assume that ence and expertise found elsewhere and adversarial hearings and expert testimony among others. [J]udges should accept that will render the judge omni-competent and the legal mind is not the best policy instru- fit to decide the great questions, and that a ment, and that lawyer-driven processes and legal mind is the highest and most useful lawyer-centered solutions can be unwise, 226 581 FEDERAL SUPPLEMENT, 2d SERIES

Furthermore, even assuming MIRC- in encouraging innovation. Indeed, the ERA would reduce Medicare’s costs, this ‘encouragement of investment-based risk is not a sufficiently strong justification for is the fundamental purpose of the patent declining Amgen’s request for an injunc- grant, and is based directly on the right to tion. The Federal Circuit has concluded exclude.’ Importantly, the patent system that ‘‘selling a lower priced product does provides incentive to the innovative drug not justify infringing a patent. Were that companies to continue costly development to be a justification for patent infringe- efforts.’’ Sanofi–Synthelabo v. Apotex, ment, most injunctions would be denied Inc., 470 F.3d 1368, 1383 (Fed.Cir.2006) because copiers universally price their (quoting Patlex Corp. v. Mossinghoff, 758 products lower than innovators.’’ Payless F.2d 594, 599 (Fed.Cir.1985)). Shoesource, Inc., v. Reebok Int’l Ltd., 998 The evidence in this case confirmed the F.2d 985, 991 (Fed.Cir.1993); see also Federal Circuit’s evaluation of the impor- Pfizer, Inc. v. Teva Pharm. USA, Inc., tance of the right to exclude as an incen- 429 F.3d 1364, 1382–83 (Fed.Cir.2005) (cit- tive for investment. Amgen CEO Kevin ing Payless when upholding a district Sharer characterized pharmaceutical de- court’s grant of a preliminary injunction velopment as the ‘‘riskiest business that I even though a denial would have led to know of in the world.’’ Remedy Trial Tr. cheaper drugs). Of course, in this case— vol. 1 at 28. ‘‘[I]t can easily take 15 years’’ as explored above—there is no guarantee and a billion dollars for a company like that allowing MIRCERA to enter the mar- Amgen to discover and develop a new ket would lead to lower priced drugs. It is drug. Id. at 27. Sharer’s estimate is con- also important to bear in mind that, as sistent with the findings of the district much as Medicare may spend on ESAs per court in Sanofi–Synthelabo, which conclud- year, that amount is a billion-dollar drop in ed that ‘‘the average cost of developing a a nearly trillion-dollar bucket. Any sav- blockbuster drug is $800 million.’’ 470 ings that might occur as a result of MIRC- F.3d at 1383. Of course, most of these ERA’s market entry would be a minute enormous investments fail to result in mar- fraction of Medicare’s overall expendi- ketable drugs. In his eight years at Am- tures. Hence, Roche’s argument that cost gen, Mr. Sharer has seen a ‘‘hundred or savings justify the denial of a permanent injunction simply lacks force. As explored more’’ products ‘‘close to or actually in below, while the exclusionary rights con- human testing’’; only six or seven of those ferred with a patent may result in more actually made it to market. Remedy Trial expensive products, this is part and parcel Tr. vol. 1 at 35. In order to maintain its of the bargain embodied in the Patent and business model and its research and devel- Copyright Clause. opment, Amgen must be able ‘‘to demonstrate to [its] investors that the full invest- 3. Permitting Roche to enter the ment they make can be recaptured.’’ Id. market would undermine the in- at 37. centives for innovation embedded If the Court allowed Roche to introduce in the Patent and Copyright MIRCERA into the market, perhaps a few Clause patients would benefit, and maybe Medi- The Federal Circuit has ‘‘long acknowl- care would save a few dollars. These ar- edged the importance of the patent system guments, however, could be made for al-

insufficient, and unjust, even if our friends See Dennis Jacobs, The Secret Life of Judges, and colleagues in the legal profession lead 75 FORDHAM L.REV. 2855, 2862–63 (2007). us that way. AMGEN, INC. v. F. HOFFMAN–LA ROCHE LTD. 227 Cite as 581 F.Supp.2d 160 (D.Mass. 2008) most any infringing drug. Were courts to own interest.’’ ADAM SMITH, THE WEALTH refuse injunctions on the basis of such OF NATIONS, Book I, Chapter II: Of the speculation, then pharmaceutical patents Principle which gives Occasion to the Di- would be worth far less than they are vision of Labour, available at http://www. today because they would no longer in- econlib.org/library/Smith/smWN1.html. clude a right to exclude infringers from the The Court has relinquished any notion that market. The diminishing returns would the long-suffering or terminally ill among disincentivize research and development our number may rely upon ‘‘the benevo- for pathbreaking drugs by lowering the lence of’’ pharmaceutical companies. expected value of discovery. By contrast, Companies like Amgen invest in risky re- granting injunctions encourages companies search and development to discover drugs to devote their energies toward developing like EPO because such drugs are worth drugs that will satisfy unmet medical tens of billions of dollars, period. If Amer- needs. Were it possible to obtain market ica is to continue to be an engine of medi- entry by making incremental improve- cal innovation it will be because we protect ments to existing drugs, it is doubtful that the right of inventors to exploit the limited companies designed to generate discover- monopoly granted in the Patent Clause. ies could exist. After taking evidence for four days and At bottom, Roche attached a sugar to a entertaining oral argument and extensive patented protein. As the jury concluded, briefing, the Court cannot conclude with this was not innovation. Of course, any certainty that MIRCERA will save Roche’s efforts to modify Amgen’s patent- lives or money. Failure to enter a perma- ed product will not go entirely unreward- nent injunction, however, would risk un- ed. As it stands, European companies dermining the incentives for innovation such as Roche can profit from building that have produced, and hopefully will con- upon American discoveries by producing tinue to produce, medical advances that and selling infringing products in Europe extend and enhance the value of life. The and throughout the rest of the world. Court therefore concludes that the public Nevertheless, the fact that Roche ‘‘built up interest will not be disserved by a perma- its manufacturing facility in [Europe] and nent injunction. prepared to market its product was simply a risk it took with eyes open to the’’ possi- D. THE PROPOSED MODIFIED INJUNCTION bility that it would not be permitted to WOULD NOT ADEQUATELY COMPENSATE market MIRCERA in the United States. AMGEN AND WOULD BE INAPPROPRIATE Pfizer, 429 F.3d at 1382 (internal quota- IN VIEW OF THE FINDINGS ABOVE tions and alterations omitted). At a hearing on February 28, after As Adam Smith observed in 1776, ‘‘[i]t is Roche admitted it would no longer volun- not from the benevolence of the butcher, tarily refrain from entering the ESA mar- the brewer, or the baker, that we expect ket, the Court preliminarily enjoined our dinner, but from their regard to their Roche.19 The Court, however, indicated

19. Roche’s potential presence in the United but apprised the parties of the contours of the States required immediate action by the permanent injunction it was then considering. Court, yet the Court was (in February 2008) The Court figured that if either party appealed still conflicted. Notwithstanding the exten- it could get some guidance from the Federal sive hearing on remedy, the Court then had Circuit. Since then, of course, the Court has four large cartons filled with unread deposi- completed its post-trial review and reflection tions. Accordingly, the Court tried to have it upon the proceedings before it. Its ultimate both ways. It preliminarily enjoined Roche 228 581 FEDERAL SUPPLEMENT, 2d SERIES that it was considering entering a perma- could not eradicate the deleterious effects nent injunction subject to the following of failing to enter an injunction altogether. conditions: As discussed at length above, there is no Primarily, Roche must pay a 22.5% roy- evidence of medical or economic harm alty. Second, MIRCERA must be intro- compelling enough to override the public’s duced in the Medicare field with an ASP interest in a robust patent system. Were at or less that the ASP for EPOGEN, there evidence of a shortfall in supply, a and the ASP must remain at or below compulsory license or a modified injunc- EPOGEN’s for the remainder of the life tion might be appropriate. If Amgen was of Amgen’s patents. Third, Roche must unable or unwilling to meet the demand provide evidence of clinical usage and for ESAs, then barring the entry of a the real world dosage of MIRCERA so company that could supply the public’s that the Court accurately can determine needs would disserve the public interest. a dose conversion factor for MIRC- ERA’s FDA approved indications. The record, however, reveals that, al- Fourth, Roche must fund an indepen- though EPOGEN and Aranesp are not be dent agency that will monitor Roche perfect, they adequately meet the current sales and account for the royalty pay- demand. ments. Finally, if Roche decides to en- Furthermore, a modified injunction ter the market based on these condi- would be difficult to enforce and manage. tions, regardless of the outcome of any Before the Court could set and monitor an future litigation, Roche must agree that entry price for MIRCERA, it would have it will continue to provide MIRCERA to to determine the real world dosing conver- any patient who requests it, at or below the same price for which it was author- sion ratio. This is a thorny issue that ized, so long as the patient requires. would require a special master whose conclusions would undoubtedly be disputed Order and Preliminary Injunction [Doc. No. 1675] at 3. and unsatisfying. The Court would almost certainly be called on to monitor pricing Although a modified injunction would and resolve myriad disputes that would mitigate the irreparable harm to Amgen, it occur during the remaining life of the pat- would still permit Roche to gain profits, market share, and a foothold into the ents. In short, the proposed modified in- American drug market to which it is sim- junction would result in needless, protract- ply not entitled. Anything less than a ed involvement in the affairs of these two permanent injunction would create uncer- companies. Should the parties wish to tainty about the value of Amgen’s patents reach a license agreement, they may do so. and potentially undermine the incentives If, however, Amgen wishes to exclude for investment and pharmaceutical innova- Roche from the market, it has earned that tion. In short, the modified injunction right.

findings are set forth in the text of the opin- Court, February 24, 1978. ‘‘This statement is ion. There is no reason to delay its issuance. more profound than it sounds. Of course, we While the Court entered the preliminary must do our best to get it right and, of course, injunction without a complete review of the we must not hesitate to correct our errors. record, it has no regrets. On the day I first We must, however, decide. Failure to act is became a judicial officer, Judge Vincent Brog- oft-times as injurious to justice as judicial na gave me this sage advice: ‘‘Have the cour- error.’’ William G. Young, Vanishing Trials, age of your own error.’’ Hon. Vincent Brog- Vanishing Juries, Vanishing Constitution, 40 na, Justice of the Massachusetts Superior SUFF. U.L.REV. 67, 93 (2006). MORRISSEY v. MANTICA 229 Cite as 581 F.Supp.2d 229 (D.Mass. 2008)

V. THE INTERLOCUTORY APPEAL validity of claim 1 of the 8422 patent be- [54] On April 9, 2008, Roche appealed cause ‘‘purified from mammalian cells this Court’s entry of a preliminary injunc- grown in culture’’ limits the claim. More- tion. See Notice of Appeal [Doc. No. over, summary judgment of infringement 1703]. That appeal is pending. There- on claim 1 of the 8422 patent was appropri- fore, with respect to the preliminary inate because MIRCERA contains an injunction, this Court is divested of jurisdic- fringing form of recombinant EPO. tion to act other than in aid of the appeal. The Court was on the precipice of enter- See Gilda Indus., Inc. v. United States, ing a modified injunction. On a different 511 F.3d 1348, 1350 (Fed.Cir.2008); Hy- record, such a decision might have been britech Inc. v. Abbott Labs., 849 F.2d 1446, appropriate. Here, however, the uncer- 1450 (Fed.Cir.1988). Because this an in- tainties inherent in the available clinical terlocutory appeal, however, this Court re- evidence and the highly speculative eco- tains jurisdiction to enter the necessary nomic projections are simply not enough findings and rulings on the judge-tried to override the public’s interest in robust portions of this case and to decide the patent rights that protect incentives for in- pending post-trial motions. This memo- novation. Unless the Federal Circuit randum addresses and resolves these mat- mandates otherwise in resolving the inter- ters. Having now fully reviewed and re- locutory appeal, Roche, its agents, ser- flected upon the record the Court sets vants, employees, counsel, and all persons forth its reasoning relative to remedy—i.e. and entities acting in concert therewith a permanent injunction is not only war- will be permanently enjoined for the life of ranted, but ought be imposed. To enter the remaining patents-in-suit, as to the such a declaratory judgment, however, claims of the patents-in-suit found to be would moot the appeal of the preliminary infringed herein, from infringing those injunction—an interlocutory appeal the patents in any way within the United Court welcomed for appellate guidance. States. The case is administratively This the Court may not do. closed pending resolution of the interlocu- Accordingly, having stated its firm in- tory appeal. It may be reopened upon tention to enter such a permanent (for the motion of any party thereafter. life of the patents-in-suit) injunction—un- SO ORDERED. less resolution of the interlocutory appeal mandates a different conclusion—the Court will order this case administratively , closed. This ought be a sufficiently ‘‘final order’’ to allow any party to appeal at once and seek to consolidate such appeal with Charlene MORRISSEY, Plaintiff, that presently pending. The Court seeks to avoid the process of appeal-remand- v. appeal-remand that unfortunately has Elizabeth MANTICA, R.N., Defendant. characterized the related Amgen v. TKT/ Civil Action No. 06–11761–RBC. HMR litigation. See Amgen IV, 457 F.3d United States District Court, at 1321–22 (Michel, C.J., dissenting). D. Massachusetts. VI. CONCLUSION Oct. 6, 2008. In sum, the jury’s verdict will stand. Background: Patient sued nurse for med- The Court will not reverse its ruling on ical malpractice in connection with physical