Surveying the Biologic Patent Battleground

The market for biologics is growing at a very rapid pace; the percentage of the world’s pharmaceutical sales from biotechnology products has increased from 14 percent in 2006 to 23 percent in 2014, and it is expected to reach 27 percent by 2020 (1). In 2014, six of the global top 10 blockbuster drugs were biologics (2) and it’s widely accepted that the industry’s future lies in biopharmaceuticals.

With the basic patents for some blockbuster biologics already expired – and many more to follow in the next decade – the path is opening for biosimilars. The true impact of the biologics “patent cliff” remains uncertain: complex manufacturing processes and extensive regulatory approval requirements make bringing a biosimilar to the market significantly more costly and time-consuming than small-molecule generics. Development of a biosimilar has been estimated to take 7-8 years and to cost between $100-250 million; in contrast, a small-molecule generic takes just 3-5 years and costs $1-4 million (3). Clearly, the competitive landscape for biosimilars will be very different to that of small-molecule generics.

I specialize in intellectual property dispute resolutions, with an emphasis on patents. I’m based in the UK, which is one of the most transparent countries in the world for litigation matters; all non-confidential court judgments are readily available to the public. There have been very few reported patent litigation cases concerning biosimilars. Instead, most litigation regarding biologic patents has been between competing originator companies. In this article, I’ll briefly discuss the patent challenges faced by originator biologic manufacturers, both in terms of validity and enforcement, and based upon the court cases that have been reported to date in the UK. 

Plausibility attack

The information disclosed by a patent specification is important because it fulfils the inventor’s side of the bargain with the state: the state grants a monopoly in return for the public disclosure of the invention in enough detail that competitors should be able to work the invention when the monopoly ends. Commonly, attacks against the validity of biologic patents have centered on alleged intrinsic flaws in the quality and extent of the disclosure contained in the patent specification, and in particular on the question of whether the information disclosed in the patent is sufficient to make the invention “plausible”. This is likely to reflect the fact that patents for biologics are typically filed very early on, before data to support the often fairly broad claims contained in them have been produced. This in turn is tied to the fact that bringing biologics to the market is extremely costly and time consuming, and the existence of a patent (or application) will facilitate investment in the further steps (including clinical trials) necessary to develop the drug – and which might not otherwise take place.

The so-called ‘plausibility attack’ is a fairly new concept in patent law. In fact, ‘plausible’ is not a term found in the legislation – either the European Patent Convention or the UK 1977 Patents Act – and there is no law of plausibility as such. However, the idea of plausibility has been developed by the case law of both the European Patent Office and the English Courts (4, 5). In essence, it asks the question “is the invention credible on the face of the patent specification?” A patent will not be granted for an invention that is purely speculative because the patent owner is not contributing any useful technical knowledge to society and hence does not deserve monopoly protection.

In establishing what it takes for a patent to be plausible, the courts have sought to strike a balance between pure speculation and a requirement that the patent owner provides full proof that the invention indeed works, such as clinical proof of efficacy of a new drug. The Court of Appeal has held that for an invention to be plausible, it must be possible to make a reasonable prediction that the invention will work with substantially everything falling within its scope (4). On the other hand, if it is not possible to make such a prediction, or if it is shown the prediction is wrong and the invention does not work with substantially all the products or methods falling within its scope, then the scope of monopoly will exceed the technical contribution the patent owner has made to society – and the patent will be invalid.

Ultimately, whether a specification sufficiently discloses an invention is a question of degree, and will depend on the individual facts of each case.

According to the courts, it is not permissible for a patent owner to rely solely upon evidence that post-dates the patent to demonstrate that their invention is credible and plausible. However, such evidence can be relied upon to cast doubt on the plausibility of an invention. This is because it would be unfair to justify a monopoly by reference to an alleged contribution, which is then later demonstrated not to exist (6).

A recent High Court decision provided further clarification on this point in relation to inventions that describe a principle of general application (in this case, a claim for a biological inhibitor useful to treat all cancers) (7). The Court held that later evidence showing that the invention did not work in every cancer did not render the claim implausible, as long as the generalization made in the patent in light of that evidence is still a fair one – for example, that the invention works with substantially all cancers. That said, this decision has been appealed and it remains to be seen whether it will be upheld by the Court of Appeal.

To date, the most prominent attacks against the validity of biologic patents have concerned alleged intrinsic defects with the patent specification itself. But other grounds of invalidity, such as lack of novelty and inventive step, are available to anyone wishing to revoke such patents. It seems reasonable to assume that as the biologics field advances and becomes more crowded, these other grounds of attacks will become more common.

Injunction dysfunction?

The unique market dynamics will also likely have an impact on the enforcement of patents, particularly when it comes to preliminary injunctions against competitors planning to launch at risk. In my experience, a key question considered by the courts when assessing whether to grant a preliminary injunction is whether entry of the competing product onto the market will result in irreparable harm to the patent owner. In the world of small-molecule chemicals, generic entry will typically result in a “feeding frenzy” of competition, which has a dramatic and irreversible effect on price (almost certainly irreparable harm).

In contrast, the high investment required to develop a biosimilar means that an originator biologic product is likely to be faced with a much smaller number of competitors than small-molecule chemicals – perhaps as little as one or two. Additionally, manufacturers of biosimilars may not be willing to offer price cuts on the same order of magnitude as those seen for small-molecule generics. And since biosimilars are not identical to their biologic counterpart, some doctors may be less willing to substitute biologics with biosimilars. Therefore, negative price spirals, such as those observed upon the market entry of small-molecule generics, are unlikely to occur and preliminary injunctions may not be a weapon that can be regularly deployed by originators. Case law on this point has yet to develop for biosimilars, so we’ll have to wait and see. 

The life-saving nature of some biologics may sometimes make it inappropriate to seek a final injunction. Such a position was recently adopted by Ono Pharmaceuticals, who opted not to seek an injunction against MSD, provided an appropriate royalty was agreed or awarded by the court for future infringement of its patent for the use of anti-PD-1 antibodies for the treatment of cancer (7).

The biologics market is extremely valuable and it is inevitable that competition will intensify. Whether this will be accompanied by an increase in the volume of biologic patent litigation and, in particular, litigation involving biosimilars, remains to be seen. Some may say that the biologic patent hurdle is illusory, with the real barrier to market entry for biosmiliars being a regulatory, technical and financial one; others point to the high value of the market and say that increasing litigation is therefore certain. My own view is that litigation will increase, but only gradually at first. With high investments made by both originator and biosimilar manufacturers, competitors will litigate if they must, but will perhaps be more inclined to reach a commercial resolution.

Laura von Hertzen is an Associate at Bristows LLP, UK.