The Seventh Circuit’s ruling that
The decision leaves competitors who want to offer biosimilar drugs—cheaper versions of complex treatments made from living cells— or others hoping for easier access with lengthier and more expensive options. They can either challenge the validity of individual patents or try to prove invalid patents have been asserted in bad faith.
“The Humira decision shows how hard it is for anyone to thread the needle of antitrust law,” Robin Feldman, a law professor at the University of California Hastings, said in an email.
The US Court of Appeals for the Seventh Circuit decision came amid calls to improve the quality of patents that the US Patent and Trademark Office issues.
Strength in Numbers
The appellate panel held Aug. 1 that AbbVie’s body of 132 patents related to Humira isn’t an unfair competitive hurdle to other drugmakers that want to bring biosimilars to market. It said any issued patents are presumed to be valid and enforceable.
“What’s wrong with having lots of patents? If AbbVie made 132 inventions, why can’t it hold 132 patents?” wrote Judge
The main patent protecting Humira expired at the end of 2016, but AbbVie obtained additional patents related to aspects such as manufacturing and administering the drug, which has become the best-selling medication in the world.
The plaintiffs in the case—a group of unions and pension plans that claimed AbbVie unfairly “cornered the market” for Humira—presented the sheer number of patents as prohibitive to any alternative reaching the market.
That antitrust theory was ultimately shot down twice: once at the Seventh Circuit, and in the underlying Illinois federal court’s June 2020 ruling dismissing the lawsuit, said Kevin Noonan, co-chair of McDonnell Boehnen Hulbert & Berghoff LLP’s biotechnology and pharmaceuticals practice group.
“This idea that having so many patents is, in itself, an antitrust violation went nowhere with the appellate court, as it went nowhere with the district court,” he said.
To succeed on antitrust grounds, a challenger would typically have to prove that a company obtained patents they knew were invalid and used them to smother their competitors with baseless lawsuits, attorneys said.
Under the US Supreme Court’s 2013 ruling in FTC v. Activis, a company’s behavior could also present anticompetitive concerns if it pays a competitor to delay the release of a generic product, although the analysis of what constitutes a payment is complicated.
In the AbbVie case, indirect Humira buyers alleged the company secretly allowed biosimilars to enter European markets in 2018 in exchange for staying out of the US market until 2023. The courts found that logic to be a stretch because no money was exchanged. They said both settlements should be viewed independently.
“As the district judge saw things, 0 + 0 = 0. We see this the same way,” Easterbrook wrote for the Seventh Circuit panel.
But Rutgers Law School antitrust professor Michael Carrier suggested the appellate court didn’t fully tackle the pay-for-delay arguments, because the case was cut off at the motion to dismiss stage, before discovery.
Multiple settlements at the same time could be “a way to camouflage payments,” Carrier said. “Those are issues that could’ve been fleshed out in litigation. When the Seventh Circuit says the European settlement is completely separate from the US settlement, that’s a bit simplistic.”
An attorney for AbbVie declined to comment, and company media representatives didn’t immediately respond to a request for comment.
The high bar for challenging large groups of patents related to a drug has amplified calls from some in the IP world who say the patent protections drugmakers enjoy are too strong.
Patents are presumed valid once they’re issued, and courts tend to have more sympathy for patent owners than patent challengers, said William Hubbard, director of the Center for the Law of Intellectual Property and Technology at the University of Baltimore. Challengers must fight to prove the patents shouldn‘t have been granted if they wish to claim antitrust abuses, he said.
Mounting challenges to issued patents—at either the agency’s Patent Trial and Appeal board or in federal courts—are expensive endeavors.
“To challenge 10 patents, it would cost you millions of dollars,” Hubbard said of PTAB challenges, which were designed to be a lower-cost alternative to federal court litigation. “The idea of a patent thicket is a very real thing.”
The Seventh Circuit’s opinion protecting the Humira patents isn’t surprising, but it does seem to ignore the other half of the picture: that the sum of a patent holder’s portfolio can add up to an unpassable gulf for challengers, according to Hubbard.
“That’s what’s kind of missing from this decision: the recognition that small players can’t cross,” he said.
Still, George Mason University law professor Adam Mossoff, who participated in a Seventh Circuit amicus brief siding with AbbVie, said the appeals court decision came down on the side of strong patent protections.
“Populist rhetoric may work in policy debates—and plaintiffs’ rhetoric about so-called ‘thickets’ has influenced policymakers in DC—but thankfully, courts hold parties accountable to facts and evidence in protecting the legal rights of patent owners creating new drugs and driving the US innovation economy,” Mossoff said in an email.
Some lawmakers are calling on the PTO to step in. In June, Sens.
For now the Seventh Circuit has given pharmaceutical giants the green light to continue beefing up their portfolios, said Tahir Amin, the co-founder of I-MAK, a group that advocates to curb pharmaceutical patenting.
“Patent law basically doesn’t understand this practice or it doesn’t choose to deal with it,” Amin said. “That is the real sad part about this decision: it’s almost encouraging companies to go ahead and patent the hell out of a drug and leave it to litigation and a settlement deal.”
The Seventh Circuit’s decision also highlights the debate around patent quality.
The Humira buyers argued that the drug patents were “too weak to monopolize the sales of such an important drug,” but the Seventh Circuit panel disagreed.
“Weak patents are valid; to say they are weak is to say that their scope is limited, not that they are illegitimate,” Easterbrook wrote.
Leahy and Sen.
The lawmakers said patent examiners are often under pressure to evaluate technically complex patent applications at a rapid clip while also searching through troves of potential prior art that could render the patent invalid.
“If the United States is going to continue to be the world’s leading innovation economy, then we have to first make sure our patent system is strong and instills confidence,” Tillis said in a statement.