Amgen Inc. v. Sandoz Inc.

United States Court of Appeals
for the Federal Circuit
______________________
AMGEN INC., AMGEN MANUFACTURING
LIMITED,
Plaintiffs-Appellants
v.
SANDOZ INC.,
Defendant-Appellee
______________________
2015-1499
______________________
Appeal from the United States District Court for the
Northern District of California in No. 3:14-cv-04741-RS,
Judge Richard Seeborg.
______________________
Decided: December 14, 2017
______________________
NICHOLAS P. GROOMBRIDGE, Paul Weiss, Rifkind,
Wharton & Garrison LLP, New York, NY, for plaintiffs-
appellants. Also represented by JENNIFER GORDON,
JENNIFER H. WU, ARIELLE K. LINSEY, MICHAEL T. WU,
PETER SANDEL, ERIC ALAN STONE; LOIS M. KWASIGROCH,
WENDY A. WHITEFORD, KIMBERLIN L. MORLEY, Amgen
Inc., Thousand Oaks, CA; VERNON M. WINTERS,
ALEXANDER DAVID BAXTER, Sidley Austin LLP, San Fran-
cisco, CA.
2 AMGEN INC. v. SANDOZ INC.
DEANNE MAYNARD, Morrison & Foerster LLP, Wash-
ington, DC, for defendant-appellee. Also represented by
MARC A. HEARRON, JOSEPH R. PALMORE; JULIE PARK, San
Diego, CA; ERIK JEFFREY OLSON, Palo Alto, CA.
MICHAEL A. MORIN, Latham & Watkins LLP, Wash-
ington DC, for amicus curiae AbbVie Inc. Also represented
by DAVID PENN FRAZIER, GREGORY G. GARRE, MELISSA
ARBUS SHERRY, CASEY L. DWYER, ROBERT J. GAJARSA.
GREGORY DISKANT, Patterson Belknap Webb & Tyler
LLP, New York, NY, for amicus curiae Janssen Biotech,
Inc. Also represented by IRENA ROYZMAN; DIANNE B.
ELDERKIN, BARBARA MULLIN, Akin, Gump, Strauss, Hauer
& Feld, LLP, Philadelphia, PA.
LISA BARONS PENSABENE, O’Melveny & Myers LLP,
New York, NY, for amicus curiae Biotechnology Industry
Organization. Also represented by FILKO PRUGO,
CARLOS T. ANGULO, Zuckerman Spaeder LLP, Wash-
ington, DC, for amicus curiae Generic Pharmaceutical
Association.
CHARLES B. KLEIN, Winston & Strawn LLP, Washing-
ton, DC, for amici curiae Hospira, Inc., Celltrion
Healthcare Co., Ltd, Celltrion, Inc. Also represented by
ANDREW CURTIS NICHOLS, STEFFEN NATHANAEL JOHNSON;
SAMUEL S. PARK, DAN HOANG, Chicago, IL.
WILLIAM M. JAY, Goodwin Procter LLP, Washington,
DC, for amicus curiae The Biosimilars Council. Also
represented by JAIME ANN SANTOS; ELAINE BLAIS, Boston,
MA.
LOWELL STURGILL, JR., Appellate Staff, Civil Division,
United States Department of Justice, Washington, DC,
for amicus curiae United States. Also represented by
AMGEN INC. v. SANDOZ INC. 3
CHAD A. READLER, HASHIM M. MOOPPAN, SCOTT R.
MCINTOSH.
WILLIAM A. RAKOCZY, Rakoczy Molino Mazzochi Siwik
LLP, Chicago, IL, for amicus curiae Mylan Inc. Also
represented by PETER JAMES CURTIN, LARA E.
FITZSIMMONS.
______________________
Before NEWMAN, LOURIE, and CHEN, Circuit Judges.
LOURIE, Circuit Judge.
This appeal has returned to us on remand from the
Supreme Court of the United States. In their earlier
appearance in this court, Amgen Inc. and Amgen Manu-
facturing Ltd. (collectively, “Amgen”) appealed from the
decision of the United States District Court for the North-
ern District of California (1) granting partial judgment on
the pleadings to Sandoz Inc. (“Sandoz”) on its counter-
claims seeking a declaratory judgment interpreting the
Biologics Price Competition and Innovation Act of 2009
(“BPCIA”), Pub. L. No. 111-148, §§ 7001–7003, 124 Stat.
119, 804–21 (2010) (codified as amended at 42 U.S.C.
§ 262, 35 U.S.C. § 271(e), 28 U.S.C. § 2201(b), 21 U.S.C.
§ 355 et seq.); (2) dismissing with prejudice Amgen’s
unfair competition claims asserting unlawful business
practices under California Business & Professions Code
§ 17200 et seq. (“UCL”) and conversion claims (collective-
ly, the “state law claims”); and (3) denying Amgen’s
motion for a preliminary injunction based on its state law
claims. Amgen Inc. v. Sandoz Inc., No. 14-cv-04741, 2015
WL 1264756 (N.D. Cal. Mar. 19, 2015) (“Opinion”).
Following full briefing and oral argument, we af-
firmed the dismissal of Amgen’s state law claims, vacated
the judgment on Sandoz’s counterclaims, directed the
district court to enter judgment on those counterclaims
consistent with our opinion, and remanded for further
4 AMGEN INC. v. SANDOZ INC.
proceedings. See Amgen Inc. v. Sandoz Inc., 794 F.3d
1347 (Fed. Cir. 2015), rev’d in part, vacated in part, 137 S.
Ct. 1664 (2017).
In particular, we held that under 42 U.S.C.
§ 262(l)(8)(A) “a subsection (k) applicant may only give
effective notice of commercial marketing after the FDA
has licensed its product.” Id. at 1357. In addition, we
held that the “shall” provision in paragraph (l)(2)(A) did
not mean “must” and concluded that “when a subsection
(k) applicant fails the disclosure requirement [of
§ 262(l)(8)(A)], 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C.
§ 271(e) expressly provide the only remedies as those
being based on a claim of patent infringement.” Id. at
1355–57.
Both parties petitioned for rehearing en banc, which
this court denied. See Amgen Inc. v. Sandoz Inc., No. 15-
1499, slip op. (Fed. Cir. Oct. 16, 2015). Sandoz then filed
a petition for a writ of certiorari in the Supreme Court
presenting the following questions: “Whether notice of
commercial marketing given before FDA approval can be
effective and whether, in any event, treating Section
262(l)(8)(A) as a standalone requirement and creating an
injunctive remedy that delays all biosimilars by 180 days
after approval is improper.” Petition for a Writ of Certio-
rari at ii, Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664
(2017) (No. 15-1039).
Amgen subsequently filed a conditional cross-petition
for a writ of certiorari presenting the following questions:
Is an Applicant required by 42 U.S.C.
§ 262(l)(2)(A) to provide the Sponsor with a copy of
its biologics license application and related manu-
facturing information, which the statute says the
Applicant “shall provide,” and, where an Appli-
cant fails to provide that required information, is
the Sponsor’s sole recourse to commence a declar-
atory-judgment action under 42 U.S.C.
AMGEN INC. v. SANDOZ INC. 5
§ 262(l)(9)(C) and/or a patent-infringement action
under 35 U.S.C. § 27l(e)(2)(C)(ii)?
Conditional Cross-Petition for a Writ of Certiorari at ii,
Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664 (2017) (No. 15-
1195). The Supreme Court granted both Sandoz’s petition
and Amgen’s conditional cross-petition and consolidated
the cases for briefing and oral argument. Sandoz Inc. v.
Amgen Inc., 137 S. Ct. 808 (2017). The United States
filed a brief and argued as amicus curiae.
On June 12, 2017, the Court announced its decision.
Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664 (2017). The
Court held that an injunction under federal law is not
available to enforce 42 U.S.C. § 262(l)(2)(A); and a biosim-
ilar applicant may provide the notice required by 42
U.S.C. § 262(l)(8)(A) either before or after receiving FDA
approval, i.e., the applicant need not defer giving notice of
commercial marketing until FDA licensure of the biosimi-
lar in order to begin the running of the 180-day clock. Id.
at 1674, 1677. The Court reversed our decision in part
and vacated it in part and remanded the case for further
proceedings consistent with its opinion. The Court di-
rected:
On remand, the Federal Circuit should determine
whether California law would treat noncompli-
ance with § 262(l)(2)(A) as “unlawful.” If the an-
swer is yes, then the court should proceed to
determine whether the BPCIA pre-empts any ad-
ditional remedy available under state law for an
applicant’s failure to comply with § 262(l)(2)(A)
(and whether Sandoz has forfeited any pre-
emption defense, see 794 F.3d, at 1360, n. 5). The
court is also of course free to address the pre-
emption question first by assuming that a remedy
under state law exists.
Id. at 1676–77.
6 AMGEN INC. v. SANDOZ INC.
Following remand, we recalled our mandate, reopened
the appeal, and directed supplemental briefing on July 26,
2017. Both parties responded with supplemental briefing,
which, inter alia, addressed the question whether Sandoz
waived any preemption defense it had to Amgen’s state
law claims.
Because Sandoz did not forfeit its preemption defense
and the BPCIA preempts state law remedies for an appli-
cant’s failure to comply with § 262(l)(2)(A), we now affirm
the district court’s dismissal of Amgen’s state law claims.
BACKGROUND
In 2010, as part of the Patient Protection and Afford-
able Care Act, Congress enacted the BPCIA, which estab-
lished an abbreviated pathway for regulatory approval of
follow-on biological products that are “highly similar” to a
previously approved product (“reference product”). Pub.
L. No. 111-148, §§ 7001–7003, 124 Stat. at 815. Congress
established such “a biosimilars pathway balancing inno-
vation and consumer interests.” BPCIA, Pub. L. No. 111-
148, § 7001(b), 124 Stat. at 804.
The BPCIA has certain similarities in its goals and
procedures to the Drug Price Competition and Patent
Term Restoration Act of 1984 (“the Hatch-Waxman Act”),
Pub. L. No. 98-417, 98 Stat. 1585 (1984), but it has sever-
al obvious differences. We note this as a matter of histor-
ical interest, but otherwise do not comment on those
similarities and differences.
Under the governing statutory scheme, the Food and
Drug Administration (“FDA”) approves a biological prod-
uct for commercial marketing by granting a biologics
license under 42 U.S.C. § 262(a). An applicant filing an
original biologics license application (“BLA”) typically
must provide clinical data to demonstrate the safety and
efficacy of its product. In contrast, under the abbreviated
regulatory approval pathway created by the BPCIA,
AMGEN INC. v. SANDOZ INC. 7
codified at 42 U.S.C. § 262(k), an applicant filing an
abbreviated biologics license application (“aBLA” or
“biosimilar application”) instead submits information to
demonstrate that its product is “biosimilar” to or “inter-
changeable” with a previously approved reference prod-
uct, together with “publicly-available information
regarding the [FDA]’s previous determination that the
reference product is safe, pure, and potent.” Id.
§ 262(k)(2)–(5); see also id. § 262(i). The BPCIA thus
permits a biosimilar applicant to rely in part on the
approved license of a reference product.
To balance the goals of innovation and price competi-
tion, Congress enacted the BPCIA to provide a four-year
and a twelve-year exclusivity period to a reference prod-
uct, both beginning on the date of first licensure of the
reference product. Specifically, a biosimilar application
“may not be submitted to the Secretary until the date that
is 4 years after the date on which the reference product
was first licensed under subsection (a),” id. § 262(k)(7)(B),
and approval of a biosimilar application “may not be made
effective by the Secretary until the date that is 12 years
after the date on which the reference product was first
licensed under subsection (a),” id. § 262(k)(7)(A). Thus, a
sponsor of an approved reference product (the “reference
product sponsor” or “RPS”) receives up to twelve years of
exclusivity against follow-on products, regardless of
patent protection.
The BPCIA established a biosimilar patent dispute
resolution regime by amending Titles 28, 35, and 42 of the
United States Code. The BPCIA amended the Patent Act
to create an artificial “act of infringement,” similar to that
of 35 U.S.C. § 271(e)(2)(A), and to allow infringement
suits to begin based on the filing of a biosimilar applica-
tion prior to FDA approval and prior to marketing of the
biological product. See 35 U.S.C. § 271(e)(2)(C), (e)(4),
(e)(6). The BPCIA also established a unique and elabo-
rate process for information exchange between the biosim-
8 AMGEN INC. v. SANDOZ INC.
ilar applicant and the RPS in order to help resolve biosim-
ilar patent disputes. See 42 U.S.C. § 262(l).
Under that process, codified at 42 U.S.C. § 262(l), the
biosimilar applicant provides the RPS confidential access
to its aBLA and to the manufacturing information per-
taining to the biosimilar product no later than 20 days
after the FDA accepts its application for review. Id.
§ 262(l)(1)–(2). The parties may then exchange lists of
patents for which they believe a claim of patent infringe-
ment could reasonably be asserted by the RPS, as well as
their respective positions on infringement, validity, and
enforceability of those patents. Id. § 262(l)(3). Following
that exchange period, the parties negotiate to formulate a
list of patents (“listed patents”) that would be expected to
be the subject of an immediate patent infringement
action, id. § 262(l)(4)–(5), and the RPS then may sue the
biosimilar applicant within 30 days, id. § 262(l)(6). The
information exchange and negotiation thus contemplate
an immediate infringement action brought by the RPS
based only on listed patents.
Subsection 262(l) also provides that the applicant give
notice of commercial marketing to the RPS at least 180
days prior to commercial marketing of its product licensed
under subsection (k). The RPS thus has a period of time
to seek a preliminary injunction based on patents that the
parties initially identified during information exchange,
but which were not selected for an immediate infringe-
ment action, as well as any newly issued or licensed
patents (collectively, “non-listed patents”). Id. § 262(l)(7)–
(8).
Subsection 262(l) additionally provides, in paragraph
(l)(9)(A), that if the applicant discloses the information
“required under paragraph (2)(A),” then neither the RPS
nor the applicant may bring a declaratory judgment
action based on the non-listed patents prior to the date on
which the RPS receives the notice of commercial market-
AMGEN INC. v. SANDOZ INC. 9
ing under paragraph (l)(8)(A). Id. § 262(l)(9)(A). Para-
graphs (l)(9)(B) and (l)(9)(C), however, permit the RPS,
but not the applicant, to seek declaratory relief with
respect to infringement, validity, or enforceability of
certain patents in the event that the applicant fails to
comply with certain provisions of subsection (l). Id.
§ 262(l)(9)(B)–(C). “The remedy provided by § 262(l)(9)(C)
excludes all other federal remedies, including injunctive
relief,” for failure to comply with § 262(l)(2)(A). Sandoz,
137 S. Ct. at 1675.
Amgen has marketed filgrastim under the brand
name Neupogen® (“Neupogen”) since 1991. In May 2014,
Sandoz filed an aBLA, seeking FDA approval of a biosimi-
lar filgrastim product, for which Neupogen was the refer-
ence product. On July 7, 2014, Sandoz received
notification from the FDA that it had accepted Sandoz’s
application for review.
Immediately thereafter, on July 8, 2014, Sandoz noti-
fied Amgen that it: had filed the biosimilar application
referencing Neupogen; believed that the application
would be approved in “Q1/2 of 2015”; and intended to
launch its biosimilar product immediately upon FDA
approval. J.A. 1472. Later in July, in response to an
inquiry from Amgen, Sandoz confirmed that the FDA had
accepted its application for review; it informed Amgen
that it had “opted not to provide Amgen with Sandoz’s
biosimilar application within 20 days of the FDA’s notifi-
cation of acceptance” but that Amgen was entitled to sue
Sandoz under § 262(l)(9)(C) “to require Sandoz to disclose
[its] biosimilar application.” J.A. 1495–96. Sandoz thus
did not disclose its aBLA or its product’s manufacturing
information to Amgen according to § 262(l)(2)(A).
Accordingly, in October 2014, Amgen sued Sandoz in
the Northern District of California, asserting claims of
(1) unfair competition by engaging in unlawful business
practices under the UCL, based on two alleged violations
10 AMGEN INC. v. SANDOZ INC.
of the BPCIA; (2) conversion for allegedly wrongful use of
Amgen’s approved license on Neupogen; and
(3) infringement of Amgen’s U.S. Patent 6,162,427 (“the
’427 patent”), which claims a method of using filgrastim.
Amgen alleged that Sandoz violated the BPCIA by failing
to disclose the information required under § 262(l)(2)(A)
and by giving a premature, ineffective, notice of commer-
cial marketing under § 262(l)(8)(A) before FDA approval
of its biosimilar product. Sandoz counterclaimed for a
declaratory judgment that the BPCIA permitted its
actions, that Amgen’s state law claims were unlawful
and/or preempted, and that the ’427 patent was invalid
and not infringed. Sandoz also asserted in its answer as
an affirmative defense preemption of the state law claims
by the BPCIA.
In January 2015, the parties filed cross-motions for
judgment on the pleadings on Amgen’s state law claims
and Sandoz’s counterclaims regarding its actions under
the BPCIA. In February 2015, Amgen also filed a motion
for a preliminary injunction to enjoin Sandoz from launch-
ing its biosimilar product, Zarxio, after FDA approval,
based solely on its state law claims. Also, in February
2015, through discovery, Amgen obtained access to
Sandoz’s biosimilar application.
On March 19, 2015, the district court granted partial
judgment on the pleadings to Sandoz on its counterclaims
to the extent that Sandoz’s interpretation of the BPCIA
statute was consistent with the court’s interpretation.
Specifically, the district court concluded that: (1) the
BPCIA renders permissible a biosimilar applicant’s
decision not to disclose its aBLA and the manufacturing
information to the RPS, subject only to the consequences
set forth in 42 U.S.C. § 262(l)(9)(C); (2) such a decision
alone does not offer a basis for the RPS to obtain injunc-
tive relief, restitution, or damages against the applicant;
and (3) the applicant may give notice of commercial
AMGEN INC. v. SANDOZ INC. 11
marketing under § 262(l)(8)(A) before FDA approval.
Opinion, 2015 WL 1264756, at *8, *11.
Based on its interpretation of the BPCIA, the district
court then dismissed Amgen’s unfair competition and
conversion claims with prejudice, concluding that Sandoz
did not violate the BPCIA or act unlawfully. Id. at *8–9.
Sandoz did not then argue, and the district court did not
address, its preemption counterclaim or affirmative
defense. J.A. 1876–77. The court also denied Amgen’s
motion for a preliminary injunction based on its state law
claims, noting that Amgen “has yet to proceed on its
remaining claim for patent infringement.” Opinion, 2015
WL 1264756, at *10.
On the parties’ joint motion, on March 25, 2015, the
district court entered final judgment as to Amgen’s unfair
competition and conversion claims and as to Sandoz’s
BPCIA counterclaims under Rule 54(b) of the Federal
Rules of Civil Procedure.
On October 15, 2015, Amgen filed its First Amended
and Supplemental Complaint, which added a claim for
infringement of Amgen’s U.S. Patent 8,940,878 (“the ’878
patent”). On September 13, 2017, the district court
entered a stipulated judgment of noninfringement of the
’427 patent. The parties’ claims and counterclaims relat-
ing to infringement, validity, and enforceability of the ’878
patent remain pending at the district court.
Meanwhile, on March 6, 2015, the FDA approved
Sandoz’s aBLA for all approved uses of Amgen’s
Neupogen. Although Sandoz did not launch its filgrastim
product at that time, it eventually did so after our deci-
sion on appeal.
Amgen timely appealed from the March 25, 2015 final
judgment as to Amgen’s unfair competition and conver-
sion claims and as to Sandoz’s BPCIA counterclaims, and
from the denial of a preliminary injunction. We have
12 AMGEN INC. v. SANDOZ INC.
jurisdiction under 28 U.S.C. § 1295(a)(1) and § 1292(a)(1)
and (c)(1).
DISCUSSION
We apply the procedural law of the regional circuit,
here the Ninth Circuit, when reviewing a district court’s
grant of a motion for judgment on the pleadings. Merck &
Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317, 1320 (Fed.
Cir. 2007). The Ninth Circuit reviews the grant of judg-
ment on the pleadings de novo, Peterson v. California, 604
F.3d 1166, 1169 (9th Cir. 2010), and “accept[s] all materi-
al allegations in the complaint as true and construe[s]
them in the light most favorable to [the non-moving
party],” Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir.
2004) (third alteration in original).
Amgen argues that (1) Sandoz waived its preemption
defense to its state law claims in this appeal; (2) the
BPCIA does not preempt state law remedies for failure to
comply with § 262(l)(2)(A); and (3) failure to comply with
§ 262(l)(2)(A) is both “unlawful” under the UCL and an
act of conversion. Sandoz responds that (1) we have
discretion to address preemption now; (2) both field and
conflict preemption bar Amgen’s state law claims;
(3) Amgen’s state law claims fail under California law;
and (4) Amgen abandoned its conversion claim. We will
address the parties’ arguments in turn. 1
1 Because we conclude that Sandoz did not waive
its preemption defense and Amgen’s state law claims are
preempted, we do not reach the parties’ arguments relat-
ing to (1) whether Sandoz preserved its conversion claims;
or (2) whether failure to comply with § 262(l)(2)(A) is
“unlawful” under the UCL or an act of conversion. See
Sandoz, 137 S. Ct. at 1677 (“The court is also of course
free to address the pre-emption question first by assum-
ing that a remedy under state law exists.”).
AMGEN INC. v. SANDOZ INC. 13
I.
We first address the parties’ waiver arguments. “Un-
der the usual rule, an affirmative defense is deemed
waived if it has not been raised in a pleading, by motion,
or at trial.” Daingerfield Island Protective Soc’y v. Bab-
bitt, 40 F.3d 442, 445 (D.C. Cir. 1994) (internal quotation
marks omitted); see also Fed. R. Civ. P. 12(h)(2) (listing
“[f]ailure to state a claim upon which relief can be grant-
ed” as a defense that may be raised “in any pleading
allowed or ordered under Rule 7(a)”; “by a motion under
Rule 12(c)”; or “at trial”).
Neither the district court nor this court in its prior de-
cision addressed preemption on the merits. The Supreme
Court has observed that as a “general rule . . . a federal
appellate court does not consider an issue not passed
upon below.” Singleton v. Wulff, 428 U.S. 106, 120 (1976).
Appellate courts, however, have discretion to decide when
to deviate from this general waiver rule. See id. at 121
(“The matter of what questions may be taken up and
resolved for the first time on appeal is one left primarily
to the discretion of the courts of appeals, to be exercised
on the facts of individual cases.”). We have previously
articulated five reasons that may justify an appellate
court’s consideration of an issue not argued to the district
court:
(i) the issue involves a pure question of law and
refusal to consider it would result in a miscarriage
of justice; (ii) the proper resolution is beyond any
doubt; (iii) the appellant had no opportunity to
raise the objection at the district court level;
(iv) the issue presents significant questions of
general impact or of great public concern; or
(v) the interest of substantial justice is at stake.
L.E.A. Dynatech, Inc. v. Allina, 49 F.3d 1527, 1531 (Fed.
Cir. 1995) (internal quotation marks and alteration
omitted); see also Interactive Gift Express, Inc. v. Com-
14 AMGEN INC. v. SANDOZ INC.
puserve Inc., 256 F.3d 1323, 1344–45 (Fed. Cir. 2001)
(citing L.E.A., 49 F.3d at 1531). We consider subcategory
iv especially compelling here. The issue of preemption is
a significant question regarding the interpretation of the
BPCIA.
Amgen argues that Sandoz waived its preemption de-
fense by not arguing it before the district court. Accord-
ing to Amgen, “preemption is an affirmative defense that
can be waived.” Appellants’ Suppl. Br. 8 (citing Teutscher
v. Woodson, 835 F.3d 936, 945 n.1 (9th Cir. 2016); Russian
Media Grp., LLC v. Cable Am. Inc., 598 F.3d 302, 309 (7th
Cir. 2010); Wood v. Milyard, 566 U.S. 463, 470 (2012)).
Amgen stresses that we previously declined to address
preemption in this case. Amgen further contends that we
should not remand the issue of preemption to the district
court.
Sandoz responds that we have discretion to address
its preemption defense now. Sandoz contends that “this is
a case of great importance” and “preemption will have
been ‘fully briefed’ and is a pure ‘matter of law.’” Appel-
lee’s Suppl. Br. 8 (quoting Interactive Gift, 256 F.3d at
1345). Sandoz further argues that Amgen will not be
prejudiced by our consideration of preemption because
Sandoz can assert preemption in the district court later as
it preserved the defense in its answer.
We agree with Sandoz that we have discretion to ad-
dress preemption in this appeal and should exercise that
discretion. The Supreme Court expressly invited us to do
so, and to assume that a remedy under state law would
exist if there were not preemption. See Sandoz, 137 S. Ct.
at 1676–77. We hereby make that assumption.
Preemption is a legal question that the parties have
fully briefed. This appeal, and its remand, require us to
consider whether state law claims may play a role in
enforcing compliance with § 262(l)(2)(A). Preemption in
this case thus presents “a significant question[] of general
AMGEN INC. v. SANDOZ INC. 15
impact or of great public concern.” See Hall v. Bed Bath
& Beyond, Inc., 705 F.3d 1357, 1371 (Fed. Cir. 2013)
(holding party did not waive preemption argument by
failing to raise it in its Rule 12(b)(6) motion because
“waiver is generally inapplicable to ‘significant questions
of general impact or of great public concern.’” (quoting
Interactive Gift, 256 F.3d at 1345)).
Moreover, even if we declined to reach preemption
now, Sandoz could raise the defense on remand before the
district court. Sandoz preserved its ability to assert
preemption by pleading the defense in its answer. See
Daingerfield, 40 F.3d at 445 (holding defense pled in
answer not waived even though defendant failed to assert
the defense before the prior appeal); 5 C. Wright & A.
Miller, Federal Practice and Procedure § 1277 (3d ed.
2017) (explaining “the failure to raise an affirmative
defense by motion will not result in a waiver as long as it
is interposed in the answer”); see also Fed. R. Civ. P.
12(h)(2). We thus discern no prejudice to Amgen by
resolving the preemption issue now.
Amgen’s cited cases are readily distinguishable. In
Teutscher, the Ninth Circuit “decline[d] to consider
[preemption] sua sponte.” 835 F.3d at 945 n.1. Here,
preemption has been fully briefed and the Supreme Court
expressly invited us to address the issue on remand. See
Sandoz, 137 S. Ct. at 1676–77.
In Russian Media, the Seventh Circuit declined to ad-
dress preemption for the first time on appeal in reviewing
a district court’s grant of a preliminary injunction where
preemption had not been timely raised at the district
court. See 598 F.3d at 309 (“It is not appropriate for this
court to overturn an injunction on the basis of a defense
that the district court had no opportunity to consider.”).
The court “express[ed] no opinion on whether the preemp-
tion defense is preserved for further proceedings in the
district court.” Id. Here, we are not reviewing the grant
16 AMGEN INC. v. SANDOZ INC.
of a preliminary injunction and Sandoz timely raised the
defense in its answer.
In Wood, the Supreme Court stated the general rule
that “[a]n affirmative defense, once forfeited, is excluded
from the case, and, as a rule, cannot be asserted on ap-
peal,” 566 U.S. at 470 (internal citations and alternations
omitted), and went on to recognize an exception to that
general rule in the case, id. at 473. Here, we have deter-
mined that Sandoz has not forfeited its preemption de-
fense, so the general rule has no applicability.
II.
We therefore turn to the question whether Amgen’s
state law claims are preempted by the BPCIA. We apply
our own law to determine whether the BPCIA preempts
the state law claims. See Midwest Indus., Inc. v. Karavan
Trailers, Inc., 175 F.3d 1356, 1360–61 (Fed. Cir. 1999) (en
banc in relevant part) (“In order to fulfill our obligation of
promoting uniformity in the field of patent law, it is
equally important to apply our construction of patent law
to the questions whether and to what extent patent law
preempts or conflicts with other causes of action.”), abro-
gated on other grounds by TrafFix Devices, Inc. v. Mktg.
Displays, Inc., 532 U.S. 23, 28 (2001). Preemption is a
question of law that we review de novo. Ultra-Precision
Mfg., Ltd. v. Ford Motor Co., 411 F.3d 1369, 1376 (Fed.
Cir. 2005).
A.
The Supremacy Clause states a clear rule that federal
law “shall be the supreme Law of the Land; and the
Judges in every State shall be bound thereby, any Thing
in the Constitution or Laws of any State to the Contrary
notwithstanding.” U.S. Const. art. VI, cl. 2. The Suprem-
acy Clause preempts state law by means of express
preemption, field preemption, or conflict preemption. See
English v. Gen. Elec. Co., 496 U.S. 72, 78–79 (1990). “Pre-
AMGEN INC. v. SANDOZ INC. 17
emption fundamentally is a question of congressional
intent and when Congress has made its intent known
through explicit statutory language, the courts’ task is an
easy one.” Id. (internal citation omitted). Express
preemption is not at issue in this appeal, so we focus only
on the latter two forms of preemption.
Under field preemption, “state law is pre-empted
where it regulates conduct in a field that Congress in-
tended the Federal Government to occupy exclusively.”
Id. at 79. We may infer such a congressional intent from
a “scheme of federal regulation . . . so pervasive as to
make reasonable the inference that Congress left no room
for the States to supplement it,” or where an Act of Con-
gress “touch[es] a field in which the federal interest is so
dominant that the federal system will be assumed to
preclude enforcement of state laws on the same subject.”
Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947).
“Where Congress occupies an entire field . . . even com-
plementary state regulation is impermissible.” Arizona v.
United States, 567 U.S. 387, 401 (2012).
State laws are also preempted when they conflict with
federal law. Id. at 399. Conflict preemption occurs
“where it is impossible for a private party to comply with
both state and federal requirements, or where state law
stands as an obstacle to the accomplishment and execu-
tion of the full purposes and objectives of Congress.”
English, 496 U.S. at 79 (internal citation and quotation
marks omitted).
Additionally, where Congress has legislated “in [a]
field which the States have traditionally occupied,” “we
start with the assumption that the historic police powers
of the States were not to be superseded by the Federal Act
unless that was the clear and manifest purpose of Con-
gress.” Rice, 331 U.S. at 230. No such “presumption
against finding federal pre-emption of a state law cause of
action” applies, however, where the field is not “‘a field
18 AMGEN INC. v. SANDOZ INC.
which the States have traditionally occupied.’” Buckman
Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 347 (2001)
(quoting Rice, 331 U.S. at 230). We conclude that both
field and conflict preemption exist here.
B.
Amgen argues that the BPCIA does not preempt state
law remedies for failure to comply with § 262(l)(2)(A).
Amgen contends that we have “held that patent law does
not fully preempt related state-law doctrines,” including
“state unfair-competition laws.” Appellants’ Suppl. Br. 15
(citing Hunter Douglas, Inc. v. Harmonic Design, Inc., 153
F.3d 1318, 1333 (Fed. Cir. 1998), overruled on other
grounds by Midwest Indus., 175 F.3d 1356). According to
Amgen, field preemption does not apply to its state law
claims because “the federal statute does not provide a
meaningful remedy for the state-recognized interests that
have been injured by Sandoz’s failure to comply with 42
U.S.C. § 262(l)(2)(A).” Id. at 16.
Sandoz responds that field preemption bars Amgen’s
state law claims because the BPCIA’s comprehensive
framework demonstrates Congressional intent that
federal law exclusively occupy the field of patent dispute
resolution triggered by the filing of a biosimilar applica-
tion. According to Sandoz, the inference of Congressional
intent to occupy the field is particularly strong because
the scheme “touch[es] a field in which the federal interest
is so dominant that the federal system will be assumed to
preclude enforcement of state laws on the same subject.”
Appellee’s Suppl. Br. 12 (alternation in original) (quoting
Rice, 331 U.S. at 230). Sandoz also contends that no
presumption against preemption applies here.
We agree with Sandoz that the BPCIA preempts state
law claims predicated on an applicant’s failure to comply
with § 262(l)(2)(A). As an initial matter, no presumption
against preemption applies in this case because biosimilar
patent litigation “is hardly ‘a field which the States have
AMGEN INC. v. SANDOZ INC. 19
traditionally occupied.’” Buckman, 531 U.S. at 347 (quot-
ing Rice, 331 U.S. at 230). Indeed, patents are “inherent-
ly federal in character” because a patent “originates from,
is governed by, and terminates according to federal law.”
Id. In keeping with this federal character, Congress has
granted federal courts “exclusive jurisdiction over cases
‘arising under any Act of Congress relating to patents.’”
Gunn v. Minton, 568 U.S. 251, 253 (2013) (quoting 28
U.S.C. § 1338(a)); see also 28 U.S.C. § 1338(a) (“No State
court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents,
plant variety protection, or copyrights.”). Similarly, the
FDA has exclusive authority to license biosimilars pursu-
ant to the provisions of 42 U.S.C. § 262. See 42 U.S.C.
§ 262(a)(1).
The BPCIA is a “complex statutory scheme . . . [that]
establishes processes both for obtaining FDA approval of
biosimilars and for resolving patent disputes between
manufacturers of licensed biologics and manufacturers of
biosimilars.” Sandoz, 137 S. Ct. at 1669. It “sets forth a
carefully calibrated scheme for preparing to adjudicate,
and then adjudicating, claims of [patent] infringement.”
Id. at 1670 (citing 42 U.S.C. § 262(l)). Congress estab-
lished this scheme as part of its careful “balancing [of]
innovation and consumer interests.” BPCIA, Pub. L. No.
111-148, § 7001(b), 124 Stat. at 804.
Similar to the federal alien registration system in Ari-
zona that the Supreme Court held preempted that field,
the scheme here is “comprehensive” and “provide[s] a full
set of standards governing” the exchange of information
in biosimilar patent litigation, “including the punishment
for noncompliance.” Arizona, 567 U.S. at 401. The Su-
preme Court has held that “[t]he remedy provided by
§ 262(l)(9)(C) excludes all other federal remedies, includ-
ing injunctive relief,” for failure to comply with
§ 262(l)(2)(A). Sandoz, 137 S. Ct. at 1675. The Court has
described the BPCIA as possessing a “carefully crafted
20 AMGEN INC. v. SANDOZ INC.
and detailed enforcement scheme” and stated that this
scheme “provides strong evidence that Congress did not
intend to authorize other remedies that it simply forgot to
incorporate expressly.” Id. at 1675 (emphasis in original)
(internal quotations omitted). The BPCIA’s comprehen-
sive, carefully calibrated “scheme of federal regulation . . .
[is] so pervasive as to make reasonable the inference that
Congress left no room for the States to supplement it.”
Rice, 331 U.S. at 230.
Moreover, Amgen seeks through California law to im-
pose penalties on Sandoz for failure to comply with
§ 262(l)(2)(A), e.g., injunctive relief and damages, that the
BPCIA does not provide. Section 262(l)(9)(C) permits the
RPS, but not the applicant, to bring an action “for a
declaration of infringement, validity, or enforceability of
any patent that claims the biological product or a use of
the biological product.” Because § 262(l)(9)(C) provides
the exclusive federal remedy for failure to comply with
§ 262(l)(2)(A), federal law does not permit injunctive relief
or damages for such failure. See Sandoz, 137 S. Ct. at
1675. “Permitting the State to impose its own penalties
for the [alleged violation of federal law] here would con-
flict with the careful framework Congress adopted.”
Arizona, 567 U.S. at 402; cf. Amalgamated Ass’n of St.,
Elec. Ry. & Motor Coach Emps. of Am. v. Lockridge, 403
U.S. 274, 287 (1971) (holding state law claim preempted
and explaining “[t]he technique of administration and the
range and nature of those remedies that are and are not
available is a fundamental part and parcel of the opera-
tive legal system established by the [preempting] Act”).
This conflict in available remedies between federal and
state law “underscore[s] the reason for field preemption.”
Arizona, 567 U.S. at 403.
Amgen’s reliance on Hunter Douglas is misplaced. In
Hunter Douglas, we held that “federal patent law” did not
preempt “the field pertaining to state unfair competition
law.” 153 F.3d at 1333. But our recognition that patent
AMGEN INC. v. SANDOZ INC. 21
law does not preempt all related state law claims does not
dictate the outcome in this case. See Bonito Boats, Inc. v.
Thunder Craft Boats, Inc., 489 U.S. 141, 154, 167 (1989)
(stating that “all state regulation of potentially patentable
but unpatented subject matter is not ipso facto pre-
empted by the federal patent laws” and holding preempt-
ed the particular state law at issue, which “enter[ed] a
field of regulation which the patent laws have reserved to
Congress”). The field here is biosimilar patent litigation,
not patent law generally. As explained above, the federal
government has fully occupied this field.
Additionally, Amgen’s assertion that the BPCIA “does
not provide a meaningful remedy for the state-recognized
interests that have been injured by Sandoz’s failure to
comply with 42 U.S.C. § 262(l)(2)(A),” Appellants’ Suppl.
Br. 16, misunderstands the relevant inquiry. The Su-
preme Court has explained that “[p]re-emption funda-
mentally is a question of congressional intent,” English,
496 U.S. at 78–79, and reiterated that “‘[t]he purpose of
Congress is the ultimate touchstone’ in every pre-emption
case,” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)
(alternation in original) (quoting Retail Clerks v.
Schermerhorn, 375 U.S. 96, 103 (1963)). As discussed
supra, this “scheme of federal regulation . . . [is] so perva-
sive as to make reasonable the inference that Congress
left no room for the States to supplement it.” Rice, 331
U.S. at 230. Thus, assuming arguendo that there are any
state-recognized interests in play here, California law
must “give way to federal law.” See Arizona, 567 U.S. at
399.
C.
Amgen also argues that the BPCIA does not conflict
with Amgen’s state law claims. First, Amgen contends,
the state law claims “do not ‘clash’ with the objectives of
the BPCIA and federal patent laws.” Appellants’ Suppl.
Br. 12 (quoting Sears, Roebuck & Co. v. Stiffel Co., 376
22 AMGEN INC. v. SANDOZ INC.
U.S. 225, 231 (1964)). Second, according to Amgen, the
state law claims include additional elements not ad-
dressed by the BPCIA or found in the patent litigation
facilitated by the BPCIA. See Rodime PLC v. Seagate
Tech., Inc., 174 F.3d 1294, 1306 (Fed. Cir. 1999). Third,
Amgen argues that the state law claims do not depend on
the resolution of Amgen’s patent disputes and that the
relief sought is both different from and independent of the
remedy provided by the BPCIA and patent law.
Sandoz responds that the state law remedies conflict
with the intricate federal scheme. According to Sandoz,
such remedies “would disrupt the balance struck by the
BPCIA’s express consequences for noncompliance with its
procedural steps,” Appellee’s Suppl. Br. 13, frustrating
“Congress’s deliberate omission of an injunction to compel
disclosure of an application, and its provision of only the
Section 262(l)(9)(C) consequence,” id. at 14. Sandoz
contends that this “disruption to the federal scheme
would be compounded by the multiplicity of remedies
different states might make available for ‘violations’ of the
BPCIA.” Id. at 15–16.
We agree with Sandoz that conflict preemption also
bars Amgen’s state law claims. Contrary to Amgen’s
assertions, its state law claims “clash” with the BPCIA,
and the differences in remedies between the federal
scheme and state law claims support concluding that
those claims are preempted. As the Supreme Court has
recognized, a “[c]onflict in technique can be fully as dis-
ruptive to the system Congress erected as conflict in overt
policy.” Amalgamated Ass’n, 403 U.S. at 287. Additional-
ly, compliance with the BPCIA’s “detailed regulatory
regime in the shadow of 50 States’ tort regimes,” and
unfair competition standards, could “dramatically in-
crease the burdens” on biosimilar applicants beyond those
contemplated by Congress in enacting the BPCIA. Buck-
man, 531 U.S. at 350.
AMGEN INC. v. SANDOZ INC. 23
As previously discussed, Amgen seeks through state
law to impose penalties on Sandoz unavailable under the
BPCIA for failure to comply with § 262(l)(2)(A)’s disclo-
sure requirements. This “conflict in the method of en-
forcement” between the BPCIA and state law creates “an
obstacle to the regulatory system Congress chose.” Arizo-
na, 567 U.S. at 406. We must assume that Congress
acted intentionally when it did not provide an injunctive
remedy for breach of § 262(l)(2)(A)’s disclosure require-
ments. See Sandoz, 137 S. Ct. at 1675. Where, as here,
“Congress made a deliberate choice not to impose” certain
penalties for noncompliance with federal law, state laws
imposing those penalties “would interfere with the careful
balance struck by Congress.” Arizona, 567 U.S. at 405–
06.
Amgen’s reliance on Rodime is misplaced. In Rodime,
we determined that the patent laws did not preempt
patentee’s state law claims for tortious interference with
prospective economic advantage and unfair competition
based on the accused infringer’s alleged efforts to dis-
suade other companies from taking a license to the as-
serted patent. 174 F.3d at 1306. Our statement, applied
to the facts of Rodime, that “[t]he patent laws will not
preempt such claims if they include additional elements
not found in the federal patent law cause of action and if
they are not an impermissible attempt to offer patent-like
protection to subject matter addressed by federal law,” id.,
does not immunize state law claims in other types of cases
from ordinary principles of preemption. As discussed
supra, the preemption analysis here demonstrates that
Amgen’s state law claims conflict with the BPCIA and
intrude upon a field, biosimilar patent litigation, that
Congress reserved for the federal government.
We have considered Amgen’s remaining arguments
but find them to be unpersuasive.
24 AMGEN INC. v. SANDOZ INC.
CONCLUSION
For the foregoing reasons, we affirm the dismissal of
Amgen’s unfair competition and conversion claims.
Amgen’s state law claims are preempted on both field and
conflict grounds.
AFFIRMED
COSTS
Each party shall bear its own costs.