The Amgen v. Sanofi decision will encourage more biotech innovation—not the other way around.

Zachary Silbersher

I have blogged about the Amgen v. Sanofi case several times, and the case has been summarized in my prior posts andelsewhere.  The case pitted two competing PCSK9-inhibitors against one another, and after several years, resulted in cancelling broad patents covering the new class of antibodies.  Whenever there is any case that cancels patents within the pharmaceutical or biotech space, the common knee-jerk retort from some commentators is that the decision will suppress innovation, chill R&D and discourage any investment in life-saving medicine.  In this case, the opposite is true.

This case is about enablement, which borders on being one of the more esoteric criterion for patentability.  Indeed, it is not that common that the Supreme Court weighs in on the enablement requirement, which was evident from the Court’s opinion that cited heavily upon prior Supreme Court precedent from 1800’s and early 1900’s.  In doing so, the Court appeared to be saying something very simple: the tech may change, but the law remains the same.  The Court’s opinion conclude: “Today’s case may involve a new technology, but the legal principle is the same.”

And that principle is very simple: “if an inventor claims a lot, but enables only a little, the public does not receive its benefit of the bargain.”  In Amgen’s case, it described the amino acid sequence of only 26 antibodies, and it depicted the three-dimensional structure for only two of these embodiments.  Yet, the patent claims at issue were so sweeping, they covered potentially millions of different potential antibodies.  In the Court’s estimation, Amgen enabled a handful, but claimed in the millions.  Two centuries of Supreme Court enablement decisions could not sanction that.

It makes you wonder how Amgen got this far?  How did Amgen initially prevail in the district court case?  How did Amgen actually win an injunction against its primary competitor, whose antibody looked nothing like the 26 embodiments disclosed in Amgen’s patents?  How could a biotech company come so close to literally cornering the entire market on an entire new class of drug (PCSK9-inhibitors) despite only reducing to practice a handful of useful examples?  How did Amgen come this close to monopolizing nature?

Part of the problem, which was not discussed within the Supreme Court’s decision, harkens back to the “newly characterized antigen” test.  The test is fairly simple: if an inventor adequately characterizes an antigen, that inventor can patent all antibodies that bind to that antigen.  Although the test appears to fly-in-the-face of much of the Supreme Court precedent cited in its Amgen decision, the test previously had roots in prior USPTO materials.  It was \ documented in PTO training materials and parts of the MPEP (Manual of Patent Examination Procedure.)  It was cited in dicta in prior Federal Circuit decisions.  In fact, when this case was before the Federal Circuit, Amgen’s primary argument relied upon the “newly characterized antigen” test as precedent for its position.

After the Federal Circuit decision in this case questioned the “newly characterized antigen” test, the USPTO issued a memorandum that removed the test from the MPEP.  The test was likely a product of a different time when antibody technology was more nascent and less advanced.  The test is now technically gone.  Yet, it helps explain how Amgen likely gained such a meaningful foothold on an enablement argument so clearly-at-odds with two-centuries of precedent. 

Some commentators have already suggested that the Supreme Court’s Amgen decision has ushered in a new era of enablement law.  Yet, the opposite is more likely true.  Viewed through the lens of the “newly characterized antigen” test, the Supreme Court’s recent holding on enablement within the context of antibody patents is not a departure, but rather a correction.  A correction of an exception that was made for specific field of technology, namely, antibody patents.  An exception that unfairly permitted one company to corner an entire market without having done the work to do so.  An exception that violated the principle bargain of patent law.

One of Amgen’s arguments during this case was that, if Amgen’s patents go down for lack of enablement, then that will significantly chill innovation within biotech.  In other words, companies will be reluctant to invest in biotech inventions for fear of not being able to protect those innovations with patents.  GlaxoSmithKline’s amicus brief in support of Amgen’s petition for a writ of certiorari argued that, “[t]he overall undermining of genus claims weakens the incentives for research-oriented companies, like GSK, to invest in groundbreaking research, and to disclose those discoveries at all.” (at 13).  Another amicus argued, “[t]he new rule makes it unreasonably difficult for a pharmaceutical company that comes up with an innovative new class of drugs to protect that class against imitation. That result threatens innovation.” (at 13).

Yet, the facts of Amgen’s dispute with Sanofi and Regeneron shows the opposite is more likely true.  There was no evidence from the litigation that Sanofi/Regeneron copied Amgen’s patents.  There was no evidence that Amgen would lose its business case for its drug if it lost this case. Rather, the story revealed that Sanofi/Regeneron did their own hard work that eventually led to a PCSK9-inhibtor, just one that looked a lot different than Amgen’s.  Yet, despite that, having poured billions of dollars into developing a competing PCSK9-inhibitor, Regeneron and Sanofi faced an injunction for their drug. 

In light of this, it’s not surprising that amici supporting Sanofi argued that upholding Amgen’s patents would significantly undermine innovation.  In one amicus brief filed by small and medium-sized biotech firms, they argued, “[t]he effect of the [Amgen’s proposed enablement] standard could be to encourage a land-grab where speculator patentees crowd out true innovators, like [small- and medium-biotech firms], who are willing to invest in that experimentation.” (at 27).  They also argued that small-biotech firms might “decide to pull products from their development pipelines, preferring to eat the sunk costs already invested rather than face the risks and uncertainty of an altered patent bargain.” (at 25). 

Another amicus brief, which was filed by other brand biotech and pharmaceutical companies, takes the position that Amgen’s position on enablement would undermine innovation in drug development, rather than the other way around.  These amici claim to be pharmaceutical companies that purportedly “discover, develop, and commercialize medicines.”  They argued that “overbroad patents present barriers to the research, development, and provision of lifesaving therapies.”  They claim that some of the “have already allocated resources and directed research programs in particular ways because of concerns about potential lawsuits by competitors asserting broad functional genus claims. And even when they have forged ahead, they have faced significant risks that would deter other entities with fewer resources.”  (at 1-2).

Much of the briefing in this case discussed that sound patent policy requires striking the right balance.  Just as weak patent protection discourages investment, overly-rigorous patent protection ironically may do the same. 

The lower courts are likely to digest the Amgen decision by further defining the contours of undue experimentation within the context of antibody biotech patents.  Indeed, even before the Supreme Court’s opinion, some courts have already done this work.  In one recent case, the district court analyzed undue experimentation for antibody patents within the context of “conservative” versus “non-conservative” substitutions.  The Supreme Court in the Amgencase did not rule out that “conservative” substitutions may suffice, but just that it didn’t suffice in Amgen’s case. Expect future cases to dig in further.