By Elissa Sanford
On March 12, 2021, ALJ Clark Cheney issued the public version of Order No. 22 (dated January 7, 2021) denying Respondent Regeneron Pharmaceuticals’ (“Regeneron”) motion to terminate the investigation for lack of standing in Certain Pre-Filled Syringes for Intravitreal Injection and Components Thereof (Inv. No. 337-TA-1207).

By way background, this investigation is based on a June 19, 2020 complaint filed by Novartis Pharma AG, Novartis Pharmaceuticals Corporation, and Novartis Technology LLC (collectively, “Novartis”) alleging a violation of Section 337 by Regeneron in the importation and/or sale of certain pre-filled syringes for intravitreal injection and components thereof by reason of infringement of claims 1-6 and 11-26 of U.S. Patent No. 9,220,631 (“the ’631 patent”). Regeneron filed a motion to terminate the investigation for lack of standing on the grounds that Novartis does not have a statutory cause of action to assert the ’631 patent without adding non-party Vetter Pharma International GmbH (“Vetter”) as a complainant.

According to the Order, the relationship between Novartis and Vetter dates back to 2009 and was memorialized in an agreement dated January 27, 2009. Novartis was involved in the manufacture and sale of pharmaceutical products and Vetter supplied Novartis with pre-filled pharmaceutical products. On February 14, 2013, Vetter informed Novartis that pursuant to the terms of the 2009 agreement, Vetter owned certain intellectual property claimed in Novartis patent applications. Specifically, Vetter asserted ownership in a German patent application filed by Novartis (DE 20 2012 011 016 U), one of the foreign priority applications identified on the face of the ’631 patent asserted in this investigation. The 2013 dispute led the parties to execute a fourth amendment to the 2009 agreement acknowledging a dispute “as to the ownership of, and the rights of and the use related to,” the intellectual property, including the ’631 patent. On December 19, 2019, the parties executed a seventh amendment (the “2019 Amendment”) to the 2009 agreement.

Regeneron’s motion to terminate focused on the scope of patent rights granted to Vetter in the 2019 Amendment. In particular, Regeneron argued that the 2019 Amendment granted Vetter such substantial rights in the ’631 patent that Vetter must be joined as a co-complainant in this investigation, relying on language from the 2019 Amendment granting Vetter a “co-exclusive” license. ALJ Cheney disagreed, and found that the “co-exclusive” license to the ’631 patent was limited and not enough to confer standing on Vetter. The ALJ noted that the assignment history of the ’631 patent demonstrated that the inventors assigned their rights in the ’631 patent to Novartis, and that Regeneron did not dispute that Novartis owns the ’631 patent. ALJ Cheney then determined that Vetter was not granted exclusionary rights regarding the ’631 patent sufficient to confer standing, stating that Vetter’s rights to exclude others from using the claimed invention are wholly contingent on the actions of Novartis and are limited and “illusory.” For example, the ALJ pointed to Vetter’s limited right to sublicense the ’631 patent under the 2019 Amendment.

Regeneron also argued that “the potential for serial litigation weighs in favor of making Vetter a party to this investigation.” But ALJ Cheney found that the provisions of the 2019 Amendment “demonstrate that Vetter has no right to re-litigate the investigation as complainant after the investigation is terminated.” For example, Regeneron asserted that, when litigation between Novartis and Regeneron concludes, “there is nothing in the [2019] amendment to the Agreement to prevent Vetter from providing a notice of infringement and, after six months, filing a lawsuit against Regeneron in its own name and under its own direction and control.” The ALJ, however, stated that “Regeneron’s argument seems predicated on the assumption that Vetter would notify Novartis of the same allegedly infringing acts at issue in this investigation, i.e., the importation into the United States of the EYLEA pre-filled syringe,” and observed that “that … infringement (as defined in the 2019 Amendment) is in fact being litigated by Novartis in this investigation” and that “[t]he 2019 Amendment does not permit Vetter to bring suit regarding that act of alleged infringement once Novartis has done so.”