IP Law Daily Appeal of $70M jury award for infringement of erythropoietin manufacturing process fails
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Monday, December 16, 2019

Appeal of $70M jury award for infringement of erythropoietin manufacturing process fails

By Pamela C. Maloney, J.D.

Hospira’s appeal of a $70 million jury award for infringement of one of Amgen’s two patents for methods of manufacturing erythropoietin was rejected.

The U.S. Court of Appeals for the Federal Circuit has affirmed a decision by the federal district court in Wilmington, Delaware, that upheld a $70 million award for infringement of one of Amgen’s two patents for methods of manufacturing erythropoietin—a hormone that plays a key role in the production of red blood cells—based on the appellate court’s finding that there was substantial evidence to support the jury’s award. The Federal Circuit further found that the jury’s determination that only seven of 21 batches of Hospira’s EPO were protected by the Safe Harbor Act (Amgen Inc. v. Hospira, Inc., December 16, 2019, Moore, K.).

Amgen holds U.S. Patent Nos. 5,856,298 and 5,756,349 (the ’298 and ’349 patents, respectively), which covered erythropoietin (epoetin or EPO) isoforms and aspects of their production, including techniques for separating protein molecules. Amgen sue Hospira for infringement, asserting Hospira’s manufacture of a drug substance for its epoetin biosimilar drug product infringed claims 24 and 27 of the ’298 patent and claims 1-7 of the ’349 patent. Following trial, the jury found that each of the asserted claims of the ’298 patent was not proved invalid and returned a verdict of infringement on the ’298 patent. The jury also found that the ’349 patent was not infringed. Of Hospira’s 21 accused drug substance batches, the jury found that seven batches were entitled to the safe harbor defense. The jury awarded Amgen $70 million in damages for Hospira’s infringement. Both sides filed post-trial motions challenging the unfavorable aspects of the verdict. The court denied all those motions, and then awarded interest. Both parties appealed.

Infringement of ’298 patent. On appeal, Hospira again argued that the district court’s construction of claim 27 of the ’298 patent was erroneous and that no reasonable jury could find infringement under the proper construction. The district court had construed the limitation in claim 27—"a mixture of two or more erythropoietin isoforms of claim 1"—to mean "a mixture of two or more of the isolated erythropoietin isoforms of claim 1" and had instructed the jury that claim 27 did not require the individual isoforms of claim 1 to be separately prepared prior to making the mixture. According to Hospira, the district court’s construction contradicted the intrinsic evidence and the testimony of the inventor who had stated that the purpose of his invention "was to separate isoforms and then ‘recombine’ them or ‘mix those fractions back together’ to make EPO compositions." Rejecting Hospira’s construction, the Federal Circuit concluded that nothing in the claim language or the specification suggested it would be proper to limit claim 27 in the manner Hospira proposed. Claim 27’s reference to "preparing a mixture of two or more erythropoietin isoforms of claim clearly contemplated the preparation of mixtures of isoforms in more than one way." In addition, the intrinsic evidence suggested that the claim was not limited to methods of preparing individual isoforms separately and mixing them together. Therefore, it would be improper to limit claim 27 to one embodiment based on the inventor’s testimony.

Hospira’s claim that even under the district court’s construction, no reasonable jury could have found infringement of claim 27 because Amgen’s evidence demonstrated only that Hospira’s product was biosimilar to Amgen’s product. The Federal Circuit disagreed, finding that Amgen had introduced substantial evidence at trial showing that Hospira had prepared a product containing biologically active EPO, thereby establishing the limitations of the claim. In addition, Hospira’s statements in its Biologics License Application showed that its EPO fell within a specified range of in vivo specific activity, a range that was predetermined based on Amgen’s reference product. This evidence was sufficient to support the jury’s infringement verdict.

Hospira further argued that no reasonable jury could find claim 27 valid under Amgen’s U.S. Patent No. 4,667,016 (Lai). The Federal Circuit explained that Lai was directed to processes of efficient recovery of EPO from a fluid, that is, separating EPO from non-EPO contaminants and, thus, it did not anticipate claim 27. In addition, Lai did not refer to a composition with a predetermined in vivo activity. It only disclosed that biologically active EPO was eluted. As a result, Lai did not expressly disclose EPO isoforms with a predetermined in vivo specific activity (or EPO isoforms at all).

Safe harbor instructions. Hospira also challenged the district court’s jury instructions regarding its safe harbor defense, arguing that the instructions improperly focused on reasons why each batch of EPO was manufactured rather than on how each batch was used or whether that use was reasonably related to the development and submission of information to support Hospira’s Biologics License Agreement, which had been submitted to the FDA. The patented inventions in this case were Amgen’s claimed methods of manufacture and the infringing activity was Hospira’s use of Amgen’s claimed methods of manufacture. The relevant inquiry, therefore, was not how Hospira used each batch it manufactured, but whether each act of manufacture was for uses reasonably related to submitting information to the FDA. According to the Federal Circuit, the challenged jury instructions properly asked whether each act of manufacture, that is, each accused activity, was for uses reasonably related to submitting information to the FDA. Contrary to Hospira’s contentions, the instructions struck the appropriate balance by telling the jury that Hospira’s additional underlying purposes did not matter as long as Hospira proved that the manufacture of any given batch of drug substance was reasonably related to developing information for FDA submission.

Safe harbor findings. The Federal Circuit also found that there was substantial evidence to support the jury’s finding that only seven batches of EPO were protected by the safe harbor Act, despite Hospira’s claim that all 21 batches at issue were used for the development and submission of information included in the original BLA filing or in a subsequent filing necessitated by a Complete Response Letter (CRL) from the FDA. Hospira’s argument was counted by one of Amgen’s experts who testified that Hospira was not required to manufacture additional batches after it made its 2012 batch and explained that the 2013 batch was merely part of a post-approval continuity program. Amgen’s expert also explained that continued process verification (CPV) was part of an ongoing process that applied to batches made for commercial proof and was not required before FDA approval. Hospira’s own R&D director admitted that Hospira did not manufacture any drug substance batches in response to the FDA’s CRL and that the CRL did not require the manufacture of additional batches.

In addition, documentary evidence showed that Hospira planned to use the balance of the 2013 batch, as well as the 2014 and 2015 batches, to serve as commercial inventory. While not dispositive of the safe harbor defense, this evidence was probative as to whether Hospira’s use of Amgen’s patented process was reasonably related to seeking FDA approval. Furthermore, the fact that the jury found that some of the commercial inventory batches were protected by the defense supported the conclusion that the jury did not reject the defense simply because Hospira made batches for commercial inventory.

Damages. Like the district court, the Federal Circuit found no reversible error in the jury’s $70 million award. Despite Hospira’s Daubert challenge to Amgen’s damages expert, Hospira was given the opportunity to cross-examine that expert and had presented testimony by its own expert. Hospira had been allowed to argue that it had not yet received FDA approval and that the amount of damages should be based on replacement cost. Amgen’s expert had testified that he considered the appropriate factors in determining a reasonable royalty rate as the basis for the award and had explained his reasons for proposing a lump-sum structure for those royalties, including the fact that the infringement in this case was tied to manufacture and not to sales of the product. Both experts had testified to a reasonably royalty range and the jury’s award fell within those amounts.

Noninfringement of the ’349 patent. Amgen’s cross appeal challenging the jury’s finding of noninfringement of the ’349 patent was dismissed based on the Federal Circuit’s conclusion that there was substantial evidence supporting the jury’s finding. The only disputed issue at trial was whether Hospira’s cells were capable of producing EPO in excess of 100 U (claims 1 and 4), in excess of 500 U (claims 2 and 5), or in excess of 1000 U (claims 3 and 6) of EPO per 106 cells in 48 hours, as determined by radioimmunoassay RIA. Both parties offered expert testimony which agreed that Hospira’s dot-blot assay results, which were part of its BLA submission, could not be correlated to EPO production rates as determined by RIA. Amgen’s own expert confirmed the need to use the same standard to compare results. Because Amgen used a different standard than that set forth in Hospira’s BLA, the jury could reasonably find that Amgen failed to meet its burden of proving infringement.

This case is Nos. 2019-1067 and 2019-1102.

Attorneys: John Labbe (Marshall, Gerstein & Borun LLP) for Amgen Inc. and Amgen Manufacturing, Ltd. Thomas J. Meloro (Willkie Farr & Gallagher LLP) for Hospira, Inc.

Companies: Amgen Inc.; Amgen Manufacturing, Ltd.; Hospira, Inc.

MainStory: TopStory Patent FedCirNews

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