Northern District of Illinois Holds That a Biosimilar Applicant Is Not a Necessary Party to a BPCIA Lawsuit

On Aug. 23, 2021, the U.S. District Court for the Northern District of Illinois denied Alvotech hf.’s motion to dismiss AbbVie’s biosimilar lawsuit involving its blockbuster arthritis drug, Humira. AbbVie Inc. et al. v. Alvotech HF, No. 21 C 2258, 2021 WL 3737733, at *1 (N.D. Ill. Aug. 23, 2021). AbbVie filed the lawsuit against Alvotech hf. in April 2021, asserting infringement of four patents and seeking injunctive relief. Alvotech hf., an Icelandic company, is not named as the applicant for the proposed biosimilar product, and it moved to dismiss the complaint for lack of subject matter jurisdiction, lack of personal jurisdiction, failure to state a claim and failure to join an indispensable party. It argued that the Biosimilar Price Competition and Innovation Act (BPCIA) required AbbVie to sue the applicant named in the biosimilar application, Alvotech USA (the U.S. subsidiary of Alvotech hf.), instead of or in addition to Alvotech hf. The district court rejected each of Alvotech hf.’s arguments.

In 2020, Alvotech USA submitted an abbreviated Biologics License Application (aBLA) seeking FDA approval for its proposed biosimilar of Humira called AVT02. Alvotech USA notified AbbVie of the application, and the parties engaged in the BPCIA’s patent dance. AbbVie identified 62 patents that would be infringed by the proposed biosimilar product. Alvotech USA limited the patents that could be asserted in the immediate phase of the litigation to four of the 62 that AbbVie identified. In its complaint, AbbVie asserted these four patents against Alvotech hf. in the Northern District of Illinois (Alvotech hf., as a foreign entity, could be sued in any district in the United States). AbbVie did not name Alvotech USA in the complaint, a subsidiary that recently became incorporated in the Eastern District of Virginia.

Alvotech hf. moved to dismiss. It first argued that AbbVie named the wrong defendant and should have named Alvotech USA (the aBLA applicant), and therefore, the court lacked subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1). The court held that “the issue of whether [the defendant] submitted the [abbreviated drug approval] application for purposes of Section 271(e)(2) is a question that goes to the merits of one of the elements of Plaintiffs’ infringement claim under Section 271(e)(2).” Id. at *4. It held that this issue should be evaluated under Fed. R. Civ. P. 12(b)(6) for failure to state a claim, rather than Rule 12(b)(1).

Second, Alvotech hf. argued the complaint should be dismissed under Rule 12(b)(6) because Alvotech hf. did not “submit” the aBLA for AVT02 to the FDA within the meaning of 35 U.S.C. § 271(e)(2). AbbVie argued that Alvotech hf. was properly named because it created and prepared the information in the aBLA despite not being the named applicant in the application. AbbVie further argued that Alvotech hf. is the entity that will engage in the manufacture, commercialization, marketing and sale of AVT02. The court agreed with AbbVie and concluded that the complaint adequately alleged that Alvotech hf. “submitted” the aBLA within the meaning of 35 U.S.C. § 271(e)(2). It found the term “submit” to have the same meaning under the BPCIA as it has under the Hatch-Waxman Act: “Parties actively involved in preparing the [abbreviated New Drug Application (ANDA)] are deemed to have submitted the ANDA, regardless of whether they are the named applicant, especially where the parties involved are in the same corporate family.” Id. at *8. It also held that “active involvement” includes marketing and distributing the approved generic drugs, as well as participating in the drugs’ manufacture or importation. Id. The court explained that direct participation in the patent dance is not a “prerequisite” to being sued because the BPCIA specifically authorizes the reference product sponsor to file suit even when the patent dance does not occur. Id.

Third, the court denied Alvotech hf.’s motion to dismiss under Rule 19. It held that Alvotech USA is a wholly owned subsidiary whose interests are protected, and therefore would not be prejudiced by lack of joinder. The court rejected Alvotech hf.’s argument that the court would not be able to render an adequate judgment without the joinder of Alvotech USA because Alvotech USA is the named applicant. The court explained that a “parent company ‘may be liable for patent infringement for selling, offering to sell, making or using the infringing [product], regardless of [its subsidiary’s] downstream role.’” Id. at *10.

Fourth, the court rejected Alvotech hf.’s argument that the case should be dismissed for lack of personal jurisdiction. The court held that the Northern District of Illinois has specific jurisdiction over Alvotech hf. because it had the intent to market and distribute AVT02 in Illinois. The court also found that personal jurisdiction was reasonable in light of the considerations of “fair play and substantial justice.” It held that any burden to Alvotech hf. was strongly outweighed by AbbVie’s interest and the state’s interest in adjudicating the dispute.

In May 2021, a few weeks after AbbVie filed its lawsuit in the Northern District of Illinois, Alvotech hf. together with Alvotech USA (collectively, “Alvotech”) filed a declaratory judgment suit in the Eastern District of Virginia, seeking a judgment of noninfringement and invalidity of the same four patents at issue in the Illinois suit. In order to be able to file a declaratory judgment action in accordance with the BPCIA, Alvotech provided AbbVie with a 180-day notice of commercial marketing the same day it filed its complaint. In its complaint, Alvotech alleged that AbbVie deliberately filed suit in the Northern District of Illinois in order to delay resolution of the litigation. In filing its declaratory judgment action, however, Alvotech lost the ability to limit the scope of the immediate litigation phase to four patents. Under the BPCIA, the reference product sponsor can sue on any remaining patents after the biosimilar applicant provides 180-day notice of commercial marketing. Alvotech’s notice of commercial marketing allowed AbbVie to assert each of the remaining patents.

That is exactly what AbbVie did. Two weeks after Alvotech provided its notice of commercial marketing, AbbVie filed a second action for patent infringement against Alvotech hf. in the Northern District of Illinois that included claims of infringement for the remaining 58 patents. AbbVie also alleged that Alvotech was engaging in forum shopping by filing a complaint in the Eastern District of Virginia, and stated that it would seek to consolidate the second action with the first in the Northern District of Illinois.

While it remains to be seen what happens with the Eastern District of Virginia lawsuit, the court’s recent ruling in the Northern District of Illinois is important. It makes clear that the applicant named in the aBLA may not be a necessary party to a biosimilar litigation, as in the case of Alvotech USA, and that the lawsuit may go forward in the preferred forum of the patent owner without the named applicant for the biosimilar application. Biosimilar applicants that have or are considering incorporating U.S. subsidiaries in the Eastern District of Virginia or other “rocket” dockets in view of the Federal Circuit’s decision on venue in Valeant Pharms. v. Mylan Pharms. Inc. may see lawsuits go forward without those entities named. 978 F.3d 1374 (Fed. Cir. 2020). Although Alvotech USA’s incorporation in the Eastern District of Virginia is unsurprising, it likely will take establishing companies with a substantial role in the preparation or marketing of the biosimilar application to locate the lawsuit solely in that district.