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What is the status of the PCSK9 patent case (updated)?

Zachary Silbersher

Amgen’s ($AMGN) patent fight against Regeneron ($REGN) and Sanofi has been quiet for much of this year.  But it is likely to heat up again shortly.  What is coming up?

As a brief recap, Amgen sued Regeneron and Sanofi in 2014.  Amgen alleged that Regeneron’s Praluent® infringed Amgen’s patents.  After stipulating to infringement on two patents the case went to trial in March 2016 before a jury on invalidity.  Amgen prevailed at trial, and in January 2017, the court issued a somewhat controversial order permanently enjoining Praluent® from the market.  The injunction was stayed pending the appeal.  In October 2017, the Federal Circuit reversed the jury’s verdict that the patents were not invalid, and therefore, vacated the pending injunction.  The case was remanded back to the district court to re-try Regeneron’s argument that Amgen’s patents are invalid. 

For the past year, the case has quietly bumbled along, while the parties have conducted additional discovery.  In particular, over Amgen’s initial objection, the district court permitted Regeneron to collect more discovery related to post-priority date evidence. 

We discussed the issue previously, and it is summarized as follows:  During the trial, Regeneron argued that Amgen’s patents were invalid because they failed to adequately described the claimed proteins.  In particular, the patents covered a broad genus of antibodies that can bind to PCSK9, but only disclosed two specific examples of such an antibody.  At the trial, Regeneron attempted to convince the jury that those two examples did not sufficiently describe the entire genus claimed in the patents. 

To do so, Regeneron moved to show to the jury its own protein, for Praluent®, so that it could demonstrate how different its own protein was from the two disclosed example proteins in Amgen’s patents.  Yet, the district court denied Regeneron’s request because Regeneron’s protein constituted post-priority date evidence.  The district court reasoned that written description and enablement questions are typically assessed as of the priority date of the patent.  (The Federal Circuit subsequently held that reasoning was error, hence the remand for another trial. 

Now, the case is heading for another trial in early 2019.  A three-day trial is currently scheduled to begin February 19, 2019.  That trial will address whether Amgen’s patents are invalid for lack of written description or enablement, which are essentially the same issues previously tried to the jury in March 2016.  

Before that, however, the Court’s schedule provides that the parties can make dispositive motions by November 16, 2018.  Those motions must be briefed by December 11, 2018.  We anticipate that both parties are likely to file dispositive motions, which will hopefully provide a strong preview of the arguments they intend to make at trial.  That will theoretically allow analysts to more adequately handicap the upcoming trial. 

Technically, the district court could decide the case on summary judgment, thus nullifying the need for a jury trial—either by finding that patents are invalid, in favor of Regeneron, or upholding their validity, in favor of Amgen.  While it is far too early to make an adequate assessment of how likely that is, given the size of this case, and its history, we view it to be slightly more likely that the district court will let this case go to trial.

Because that trial will be a jury trial, rather than a bench trial, the jury should in theory render a verdict immediately at the end of the three-day trial.  If Regeneron wins, the case is essentially over, and we expect that Amgen will appeal to the Federal Circuit.  If Amgen prevails, however, then that means Amgen is entitled to some form of relief.  That relief will comprise past damages, but also possibly a future royalty and an injunction.

On the issue of past damages, the Court’s schedule provides that if Amgen prevails at the jury trial, the jury will be retained to assess past damages.  This is in contrast to the trial in 2016, when the Court put off trying damages until after the injunction hearing---and thus, never reached any decisions on damages.  At the time, however, both Praluent® and Repatha® had only been on the market for approximately half a year, and thus, the damages were not likely that material. 

Now, however, with more than three years of sales, damages may be more important to both companies.  The jury may or may not decide a royalty rate to assess past damages.  If so, that rate may be very important to the larger potential scope of damages—namely, the future ongoing royalty.

Amgen has also requested that its damages, if there are any, be potentially trebled under the premise that Regeneron has willfully infringed Amgen’s patents.  Regeneron has moved to dismiss the claim that it has infringed the patents willfully.  Though that briefing is complete, the district court scheduled a hearing on that issue in January 2019.  Thus, we will likely have a decision on that issue before the trial in February, but not likely long before that. 

 That decision could be very important to outcome of this dispute.  Under one scenario, Amgen prevails at the trial, but cannot convince the district court to enjoin Praluent® from the market.  In that case, Amgen will likely still be entitled to recover future royalties on sales of Praluent®--essentially a tax on all sales by its competitor.  Whether that tax is material depends, obviously, on the size of the royalty rate. 

The royalty rate in this case could, theoretically be sizeable (upwards of 20% or more) since the patents cover the protein itself—i.e., the active ingredient.  (We will address our analysis of the potential royalty rate in this case in future posts.)  If Regeneron is also deemed to be a willful infringer, that could considerably jack up the future royalty rate, making this a big win for Amgen, even without the benefit of an injunction. 

Mind you, there remain a lot of ifs in that scenario—Amgen still has to show its patents are not invalid, which is far from certain.  And it also still much show that Regeneron is a willful infringer.  During the earlier injunction hearing, in March 2016, the district court made informal remarks suggesting that it did not view Regeneron to be a willful infringer.  The judge presiding over the case at the time (the Honorable Sue L. Robinson) has since retired from the bench, and a new judge (the Honorable Richard G. Andrews) is now presiding over the case.  Nevertheless, the likelihood that Regeneron is deemed a willful infringer remains, at this time, slightly less than likely.

Then, there is also the possibility of an injunction.  Again, if Amgen prevails at the trial on liability—meaning Regeneron once again fails to convince the jury that Amgen’s patents are invalid—then Amgen will certainly request an injunction against future sales of Praluent®.  The court will convene the permanent injunction hearing only after the briefing on that issue is complete.  Under the current schedule, that briefing will not be complete until April 22, 2019. 

That means, assuming Amgen prevails at the February trial, the injunction hearing will not be held until at least May 2019.  The Court will decide the issue of whether to enjoin Praluent® on its own, without a jury.  That means, we will have to await the district court’s opinion, which is not likely to issue before the middle of 2019.

The next big catalyst is therefore the potential dispositive motions expected in mid-November.  We’ll keep watching the docket.