Biotech General Discussion

May 21, 2020

By: Manny Vacchiano*, J.D., PhD

As an AMRN investor, the current key question that I have, and you probably have as well, is whether there are, or will be developments that occur during the Vascepa ANDA litigation appeal process that will give us some indication of a better or worse outcome of the appeal and the litigation overall for AMRN. As we analyze this process and the legal briefing that started and will occur over the next few months, every brief and the oral arguments is like getting some interim clinical trial data that might help us gain some further insight into the likelihood of success of AMRN’s appeal.

The following considerations are important as we analyze any of the developments in this case:

1. AMRN appealed a ruling by the district court, that their asserted patents are obvious;

2. Obviousness determinations, especially that center on “objective” indicia of non-obviousness, are currently quite subjective (See BIO Amicus brief for pages of support for my conclusion);

3. The District Court ruled that there is evidence of the objective indicia long-felt need (slightly) and commercial success, but not praise, unexpected benefits or skepticism with respect to the asserted AMRN patents;

4. Although the factual findings in this case on which an obviousness analysis is performed were established by the District Court, the 3 judge appellate panel that will be assigned will render a decision on this appeal, without giving any deference to the trial judge (district court) ruling with respect to obviousness.

BIO Brief Overall Position

On 5/19/20 the BIOTECHNOLOGY INNOVATION ORGANIZATION ("BIO"), the largest trade organization representing biotech companies and Universities in the U.S. and many other countries, filed an amicus brief in the Amarin appeal. The brief relates to the specific way obviousness analysis is performed and does NOT take a position regarding the validity/non-obviousness of the asserted Amarin patents. The appellate court has discretion in whether to consider BIO's amicus brief and the procedural obviousness framework it urges the Federal Circuit to adoptl in that brief. It will be interesting to see if more amicus briefs are filed with similar requests.

In its Amicus brief, BIO asks the Federal Circuit to clarify the analysis that is to be performed in an obviousness determination (See Footnote below for Conclusion for BIO Amicus brief and see attached brief). Overall, the BIO brief has a slightly positive effect for AMRN, that would be more positive if the court in its discretion actually decides to adopt the legal framework suggested. BIO asks the appellate court to endorse a specific analysis framework ("totality framework") under which obviousness analysis should be performed, or to provide further clarity regarding the degree of secondary factor evidence that is sufficient to overcome a 3-factor prima facie obviousness determination.

Federal Circuit justices, and therefore Federal Circuit 3-judge panels, have been split about how obviousness analysis should be performed: 1) a prima facie 3-factor analysis followed by 2' factors approach vs. 2) a totality framework of all 4 factors together in a single step, as BIO urges. BIO argues that the 3-factor prima facie analysis followed by secondary factors considerations unfairly shifts the burden to the patentee and rarely leads to a finding of non-obviousness/validity citing Federal Circuit precedent. Some of the justices at the Federal Circuit have been fairly aggressive through dissenting opinions in endorsing a totality framework analysis (See for example, Judge Newman's dissent in Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC,683 F.3d 1356 (Fed.Cir. 2012)). We are currently analyzing certain judge's preferences and tendencies and will likely write an article on that topic with respect to the AMRN litigation in the near future.

It is noteworthy that the approach the district court judge took in the Amarin lower court case (3-factor prima facie obviousness followed by 2' factor consideration) is the approach that the BIO brief, and certain Federal Circuit justices, argue against. However, it is also noteworthy that in a close-call obviousness determination like the current AMRN situation, regardless of which of the 2 legal analysis processes are performed, judges will likely look at the relevant facts and reach a legal conclusion on whether they feel the patents are obvious, and then apply the facts in this case to whichever legal analysis they adopt, to support their conclusion. Without a more rigid rule, even the Totality Framework includes a significant subjective aspect, since "objective" indicia of obviousness (the secondary factors) are included and all of this is within the Supreme Court's prior guidance, that the overall obviousness inquiry must be expansive and flexible (KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 415, 419 (2007)).

BIO Brief Does Not Take a Position on the AMRN Patents, But Is Consistent with AMRN's Position

The BIO brief is consistent in its procedural request with AMRN's procedural analysis arguments in its appeal brief, in urging the court to adopt a totality framework analysis for obviousness. However, AMRN's appeal goes further first in requesting that the appellate court (i.e. Federal Circuit) hold that the district court erred in its legal analysis, and of course, requesting that the appellate court hold that AMRN's asserted patents are valid given the facts in the AMRN case. BIO does NOT put forth a view on whether the AMRN asserted patents should be held non-obvious/valid in view of the specific facts in the AMRN case. Thus, on its own there is only a slightly positive impact of this Amicus brief for AMRN because it shows that there is wider support of an influential industry organization, for adopting the legal framework that AMRN urges its appellate panel to adopt. In fact, the Cyclobenzaprine case cited heavily by BIO in its brief, is the same case cited heavily by AMRN in their brief, and Jonathan Singer, the lead counsel for the patent holder in the Cyclobenzaprine case, is AMRN's lead attorney on this Vascepa appeal (In re Cyclobenzaprine, 676 F.3d 1063 (Fed. Cir. 2012)). The Cyclobenzaprine panel used the Totality Framework approach that BIO is urging in its brief. Furthermore, the BIO amicus brief criticizes the 3-factor prima facie approach, followed by secondary factor analysis, which is the methodology used by the district court judge in the AMRN case.

Bio Brief - Unlikely but en banc hearing/rehearing is slightly more possible now

The court has discretion as to whether or not to consider BIO's amicus brief and adopt the specific analysis recommended therein for obviousness determinations. My understanding is that it would take the en banc Federal Circuit to fully adopt what BIO is urging. That's because a 3-judge panel will perform an obvious analysis and reach a majority decision, with the authoring judge's analytical obviousness approach set out in the opinion explaining the decision. The 3-judge panel that is assigned to the case can render a precedential opinion. However, with a split legal analysis situation like the present obviousness situation, the panel on their own cannot set a procedural framework that must be followed by all Federal Circuit justices. That would require review of the case en banc (i.e. by all active, regular Federal Circuit judges, of which I believe there are currently 12 (PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O’MALLEY, REYNA, WALLACH, TARANTO, CHEN, HUGHES, and STOLL) and/or by the Supreme Court. One of the parties, or one of the Federal Circuit judges assigned to the panel, on their own (sua sponte), could request en banc hearing before an initial 3-judge panel decision. Alternatively, after the panel renders its decision, any of the judges on the panel or any of the parties could request en banc rehearing. (See Rule 35 of the Federal Rule of Appellate Procedure and Federal Circuit rules here: http://www.cafc.uscourts.gov/sites/default/files/rules-of-practice/FederalCircuitRulesofPractice-December2019.pdf).

Why should possible en banc matter to investors?

Why should this en banc question matter to investors? Because it could affect the timing of a final decision in the AMRN appeal. Currently, based on our initial work, it seems unlikely that there would be en banc review granted in this case, based on prior requests for en banc review of the same obviousness analysis divide. However, if en banc hearing or rehearing is requested and granted, it would slow down a final ruling here. Plus, it should be more likely that there would be a Supreme Court certiorari requested and granted, although still highly unlikely, if there is an en banc Federal Circuit review. All this is premature discussion, because currently there has been no request for an en banc hearing and we are at least 6 months away from a panel decision that could then be considered for a rehearing.

It will be interesting to see if there are many more amicus briefs filed that urge the Federal Circuit to clarify the law regarding obviousness analysis, especially in urging a totality framework.

Concluding Comments

Thus for now, we should keep our eyes open for any en banc hearing requests and for additional Amicus briefs. To this end, we see appearances in the AMRN appeal docket from attorneys representing an organization called Aimed Alliance, which according to their web site has a function "Supporting laws, regulations, and policies that encourage or require health care to be accessible, culturally competent, efficient, ethical, safe, and transparent." I am just speculating, but this seems like an organization that would file an amicus brief that is more in favor of generic litigants. However, I am not familiar with this organization. Maybe they will file an amicus brief calling for uniformity in obviousness analysis too. We'll see. In the meantime, we have been doing additional analysis on a number of issues in this case, and await the Appellees’ (i.e. defendant generic companies') response brief(s) no later than June 16, 2020. Shortly thereafter, we expect to write an analysis of that brief and make it available to interested investors.

FOOTNOTE

Here is the CONCLUSION of the BIO amicus brief, in which you can see its focus on the obviousness analysis framework:

"BIO respectfully submits that the prima facie framework has the potential to

introduce error that the totality framework does not. By endorsing only the totality framework or providing further clarification of the prima facie framework, the Court will ease the task of litigants, lower court judges, and judges of this Court. This can only lead to more accurate case outcomes in future cases furthering the goals of the Patent Act."

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Disclaimer:

*Emanuel "Manny" Vacchiano, J.D., PhD., is a licensed U.S. patent attorney.

No attorney-client relationship is established by your purchase of this product. If you would like to inquire about a possible legal representation by Dr. Vacchiano and his law firm, Double Helix Law, LLC, please contact Dr. Vacchiano at mannyv@doublehelixlaw.com.

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