May 14, 2009

Altana Pharma AG and Wyeth v. Teva Pharmaceuticals USA, Inc., and Teva Pharmaceutical Indus. Ltd.

In yet another case applying KSR to patents covering pharmaceutical compounds and demonstrating the deference granted district courts in equitable proceedings, the Federal Circuit affirmed the denial of a motion for preliminary injunction from the ANDA filer’s planned launch of a product containing pantoprazole, the active ingredient in Altana’s anti-ulcer drug Protonex®, a protein-pump inhibitor. As the 30-month automatic stay approached its conclusion, Altana sought a preliminary injunction against the launch of a generic compound at risk. The district court denied the motion, primarily because there was no likelihood of success on the merits due to a “substantial question” as to invalidity. The district court also ruled that the patent holder had failed to show irreparable harm. The Federal Circuit affirmed.

As an initial matter, the Federal Circuit granted the district court’s decision of the denial of the preliminary injunction great deference, particularly where there was evidence to support the selection of a lead compound for the initiation of the obviousness analysis and that the modifications to the lead compound was likewise suggested in the prior art. As for irreparable harm, the Federal Circuit found that the district court had properly considered the potential of price erosion, lost in market share, lost profits, lost research opportunities, and possible layoffs. Although the district court did not expressly find that such harms were not irreparable as a matter of law, the district court simply did not find them probative of establishing harm that could not be compensated by money damages. The Federal Circuit deemed this an appropriate analysis, and in conjunction with the issue of success on the merits, affirmed the denial of the preliminary injunction.

Judge Newman tendered a concurring opinion, which while affirming the denial of the preliminary injunction, noted that, in her view, the evidence presented to the district court did not establish invalidity of the patent on the claimed compound. However, in light of the conflicting expert opinions on interpreting the evidence, she deferred to the district court’s discretion.

In the end, it would appear that a reasoned opinion supporting the denial of a motion for preliminary injunction will be accorded great deference by the Federal Circuit.

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May 13, 2009

Proctor & Gamble Co. v. Teva Pharmaceuticals USA, Inc.

In the ongoing development of the law of obviousness as applied to the pharmaceutical industry in the wake of KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007), the Federal Circuit reaffirmed the principle that for pharmaceutical compound patents, the obviousness analysis will often hinge on structural similarities and differences between the claimed and the prior art compounds. In this case, the risedronate used in P&G’s Actonel, a member of a group of compounds referred to as bisphosphonates, was dis-cov¬ered to be effective in the treatment of osteoporosis, the subject of U.S. Patent No. 5,583,122. A prior art patent disclosed the use of another bisphosphonate, 2-pyr EHDP, as useful for the inhibition of bone minerali¬zation. Teva contended that the structural similarities between risedronate and 2 pyr EHDP rendered the challenged claims of the ‘122 Patent obvious.

The Federal Circuit relied heavily on the testimony and writings of P&G’s expert, particularly where the expert cautioned that “to infer from one compound the effects of another is dangerous and can be misleading.” The Federal Circuit failed to find the requisite predictability and expectation of success in determining that residronate would have the same properties as its isomer 2-pyr EHDP, as required by KSR,. Finding no credible evidence that the claimed structural modification was routine, the Federal Circuit affirmed the district court’s finding of nonobviousness. Thus, Teva failed to establish a prima facie case of obviousness. The Federal Circuit further took into consideration the introduction of suf¬ficient evidence of unexpected results to rebut the prima facie case of obviousness if had it been shown. Likewise, the Federal Circuit cited the commercial success of the invention and its satisfaction of a long-felt need, although it noted that the district court correctly gave little weight to commercial success.

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February 24, 2009

Eli Lilly and Company v. Teva Pharmaceuticals USA, Inc.

In a case illustrating the Court’s discretion to shorten or lengthen the statutory thirty-month stay in ANDA cases, the Federal Circuit affirmed the district court’s four month extension.

On July 8, 2008, 18 months after Teva provided Lilly with Teva amended its ANDA to include a new particle-size measuring methodology for the active pharmaceutical ingredient. Teva disclosed this amendment to Lilly on July 10, 2008, and provided three batch samples on July 28, August 19, and September 17, 2008. The district court, however, previously set a discovery deadline of August 18, 2008. By September 5, 2008, Teva also provided Lilly with 27,000 pages of related documentation. The district court ordered Teva to produce additional raloxifene samples to Lilly by December 15, 2008, in response to Lilly’s motion to compel discovery.

Lilly sought an extension to the thirty month stay. Lilly alleged that Teva failed to “reasonably cooperate in expediting the action,” as required by statute, as allegedly evidenced by Teva’s last-minute alteration of its proposed drug product and its multiple delays in producing critical discovery, which were alleged to have adversely affected Lilly’s infringement case and trial preparation. Lilly also alleged that Teva prejudiced its preparations for trial by not timely disclosing its plans to alter the particle-size measuring methodology of its proposed raloxifene tablets. Teva allegedly began changing its particle-size measuring methodology as early as November 2007 with the goal of avoiding infringement of Lilly’s asserted patents.

The District Court ruled in favor of Lilly, and held that in light of the fact that Teva has recast its product more than eighteen months after it provided the original sample to Lilly and only eight months before trial is set to commence, Lilly was entitled to have sufficient opportunity to identify the nature and composition of the raloxifene product as Teva intends for it to be sold. The court relied on the evidence in the record that Teva altered its proposed generic raloxifene hydrochloride tablets late in the litigation. Specifically, Teva changed the particle size manufacturing specification of its active pharmaceutical ingredient and the method of measuring the particle size. Teva then delivered its changed samples to Lilly past the court’s August 18, 2008, discovery deadline.

In an opinion authored by Judge Rader, the Federal Circuit affirmed.  It held that the district court acted within its discretion under 21 U.S.C. § 355(j)(5)(B)(iii), which grants district courts the discretion to adjust the statutory thirty-month stay of ANDAs if “either party to the action failed to reasonably cooperate in expediting the action.” Trial courts, thus, may shorten or extend the thirty-month statutory period based on the parties’ uncooperative discovery practices before the court.

Judge Prost dissented. She cast the question as one of statutory construction, and observed that the district court never made any finding related to the statutory standard, i.e., whether Teva reasonably cooperated in expediting the action.  She wrote: “To affirm in this case is to effectively eliminate the statutorily required finding, and to prematurely terminate the development of appropriate standards governing modification under 21 U.S.C. § 355(j)(5)(B)(iii).”

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December 9, 2008

Takeda Chemical Industries, Ltd v. Mylan Laboratories, Inc. and Alphapharm Pty, Ltd.

In a decision underscoring the importance of a well supported basis for invalidity and/or non-infringement in an ANDA Paragraph IV certification letter, the Federal Circuit affirmed the decision of Judge Denise Cote of the Southern District of New York on December 8, 2008 in assessing attorney fees, expenses, and expert’s fees against Mylan for the amount of $11,400,000.00 and against Alphapharm in the amount of $5,400,000.00.

Mylan and Alphapharm each filed an ANDA relating to the anti-diabetic drug Pioglitazone.  Both certified that the ‘777 patent was invalid for obviousness.  In response, Takeda sued both for infringement.  The District Court found that none of the invalidity arguments advanced by the Defendants were meritorious.  In the case of Alphapharm, the Court found that the Paragraph IV Certification letter was baseless under structural obviousness law for failing to articulate a motivation to select a particular compound as the lead compound.  In addition, the Court found that Alphapharm’s certification letters included scientific errors.  Also, the District Court noted that Alphapharm’s invalidity position was “constantly shifting.”  Because of the failure to lay out a prima facia case of obviousness in its Paragraph IV letter, in conjunction with Alphapharm’s conduct during trial, the Court concluded that the deficiencies were so glaring that Alphapharm had “acted in bad faith in filing in its Paragraph IV certification.”  The Federal Circuit, in affirming the Judge’s finding, confirmed that the standard for finding an exceptional case was not gross negligence nor mere negligence.  Rather, the Federal Circuit found that Alphapharm’s filing was baseless and it failed to present even a prima facia case.  Thus, the Federal Circuit confirmed that a Paragraph IV certification in the ANDA context must at least pass the threshold of a prima facia case.

As for Mylan, the District Court noted that Mylan failed to pursue the same arguments at trial as it had set forth in it Paragraph IV letter, as well as pursued an inequitable conduct claim without any evidence of intent.  The Federal Circuit noted that Mylan’s invalidity argument in its certification letter appeared even more baseless than that of Alphapharm’s, and contained assertions that were emphatically contradicted by Takeda’s experts.  Indeed, the merits of Mylan’s Paragraph IV letter were deemed “utterly frivolous.”  Due to the scientific errors in the letter and the litigation misconduct, i.e., pursuing inequitable conduct without any evidence that Takeda hid or misrepresented any information to the PTO, the Federal Circuit found that there was ample reason for the District Court to find that the certification letter was filed in bad faith with no reasonable basis to claim that the ‘777 patent was invalid.  The Federal Circuit affirmed the finding of an exceptional case.

The Federal Circuit dismissed the argument that ANDA filers would be dissuaded from filing or making Paragraph IV certifications.  Rather, the Federal Circuit held that “well supported filings challenging the validity and infringement of patents owned by an ANDA holder should not raise the specter of an unjustified holding of an exceptional case.” Accordingly, Paragraph IV certification letters forming the basis for the assertion of invalidity and/or non-infringement must be very well thought out and well supported in order to avoid the misfortunes of Mylan and Alphapharm in the context of an ANDA filing.

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November 7, 2008

TAKEDA PHARMACEUTICAL COMPANY LIMITED and TAP PHARMACEUTICAL PRODUCTS, INC. v. TEVA PHARMACEUTICALS USA, INC. and TEVA PHARMACEUTICAL INDUSTRIES LTD.

Teva filed an ANDA relating to the combination of magnesium carbonate and lansoprazole, better known as Prevacid®, owned by Takeda.  The Court of Appeals for the Federal Circuit affirmed per curiam the district court’s decision finding no infringement of the remaining patent in the suit and rejecting Teva’s defenses of obviousness under 35 U.S.C. §103 and unenforceability due to inequitable conduct.

The district court found that Teva’s pharmaceutical composition did not infringe any claim of the ‘321 patent requiring “even” contact between the magnesium carbonate and lansoprazole. Teva’s product granules were layered, with lansoprazole and magnesium carbonate touching in many areas, and likely interspersed in some areas.However, the presence of both molecules in the same region of space was not dispositive as to whether this proximity (or touching) constitutes “even” contact as per the claims. Contact, even where “substantial,” is not necessarily even. The court found that it is at least as likely that the distribution of lansoprazole and magnesium carbonate Teva’s granules was is not uniform; and Takeda did not proven infringement by a preponderance of the evidence.

As for invalidity of Claim 10 of the ‘321 patent, Teva failed to identify a sufficient suggestion in the art for making the specific molecular modifications necessary to achieve the claimed invention. For example, Teva failed to show close or established structural relationships between the compounds, even though there were three differing substituents between lansoprazole and the prior art. Even assuming that a person of skill in the art would have been motivated to move the substituents, Teva did not proffer clear and convincing evidence that such a person would have been motivated to relocate the substituent to the claimed specific location with a reasonable expectation of success. Thus, Teva has not demonstrated that the claimed combination was a predictable solution for a stable PPI.

Claim 2 was also found not invalid. The asserted reference was before the examiner during prosecution of the '321 patent. In addition, there are structural differences between the compound of the prior art and lansoprazole imparting differences in functionality. The prior art did not mention lansoprazole or magnesium carbonate. The court could not find that a person of skill in the art would look to combine the references presented by Teva to make the claimed combination, and would have a reasonable expectation of success in doing so.

Takeda also put forward evidence of secondary considerations. Lansoprazole has made over $35 billion since its launch and has annual sales of over $1 billion. Teva’s expert agreed that Prevacid® was a “good product.”  Teva asserted that lansoprazole met no long-felt need that was not already met by omeprazole in 1984. But the court observed that when Prilosec® (commercial omeprazole) was released in 1989, it carried a black-box warning about potential toxicity issues. Takeda also introduced evidence that lansoprazole had superior properties to omeprazole in several respects, for example, superior chemical stability, better bioavailability, and a faster onset of action. Out of dozens who tried, only four companies succeeded in producing a viable PPI.

As for inequitable conduct, the court declined to find that the additional test data in Takeda’s possession would not have been deemed important under the reasonable examiner standard. Rather, Takeda had actual knowledge of the withheld data, and should have known of its materiality. For purposes of the court's balancing test, however, the court assigned this data a low level of materiality. And while the court recognized that Takeda’s disclosure of the most favorable of its test data to the PTO was self-serving, absent any indication that the data was false or manipulated the focus of the examiner in any manner, the court declined to find a high level of intent on this record such as would tip the balance in favor of inequitable conduct in this case.

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October 15, 2008

In Re Ciprofloxacin Hydrochloride Antitrust Litigation

In a case under the Hatch-Waxman Act, indirect purchasers of Cipro and several advocacy

groups challenged a settlement agreement between a patent holder and a generic manufacturer under the antitrust laws. The agreements included a reverse payment from the patent holder to the generic manufacturer, but did not implicate the 180-day exclusivity period. The district court granted summary judgment against the federal antitrust claims and dismissal of the state antitrust claims against the patent holders and brand-name manufacturers, Bayer AG and Bayer Corp., and generic manufacturers Barr Labs., Inc, Hoechst Marion Roussel, Inc., The Rugby Group, Inc., and Watson Pharmaceuticals, Inc., holding that any anti-competitive effects caused by the settlement agreements between Bayer and the generic defendants were within the exclusionary zone of the patent, and thus could not be redressed by federal antitrust law. The U.S. Court of Appeals for the Federal Circuit affirmed.  In affirming, the Federal Circuit noted that in cases where all anticompetitive effects of the settlement agreement are within the exclusionary power of the patent, the outcome should be the same whether the court begins its analysis under antitrust law by applying a rule of reason approach to evaluate the anti-competitive effects, or under patent law by analyzing the right to exclude afforded by the patent. The essence of the inquiry is whether the agreements restrict competition beyond the exclusionary zone of the patent. In addition, the Federal Circuit noted that, in the absence of evidence of fraud before the PTO or sham litigation, the court need not consider the validity of the patent in the antitrust analysis of a settlement agreement involving a

reverse payment.

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October 3, 2008

Impax Laboratories, Inc. v. Aventis Pharmaceuticals Inc.

The Court of Appeals for the Federal Circuit recently confirmed in that in order for a reference to anticipate claims under 35 U.S.C. §102, the prior art must enable the claimed invention.

Impax Laboratories, Inc. (Impax) filed with the Food and Drug Administration (FDA) an

Abbreviated New Drug Application (ANDA), seeking approval to market generic riluzole tablets,

a treatment for amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease). Impax later sued

Aventis Pharmaceuticals Inc., the owner of a patent for use of riluzole to treat ALS, for a

declaratory judgment that Impax did not infringe the patent in suit, which Impax also alleged was invalid as anticipated by the prior art. The district court found that the asserted prior art did not enable the claimed invention, and could not anticipate the patent in suit. The Federal Circuit

affirmed.

When an accused infringer asserts that a prior art patent anticipates specific patent claims, the infringer enjoys a presumption that the anticipating disclosure also enables the claimed invention without undue experimentation. The standard for enablement of a prior art reference for purposes of anticipation under §102 differs from the enablement standard under 35 U.S.C. § 112. While §112 provides that the specification must enable one skilled in the art to “use” the invention, §102 makes no such requirement as to an anticipatory disclosure. Rather, anticipation does not require actual performance of suggestions in a disclosure. Anticipation only requires that those suggestions be enabled to one of skill in the art.

Bearing the burden of rebuttal, the patentee may overcome the presumption with persuasive

evidence showing that the prior art patent does not enable the claimed invention. Here, the

evidence overcame the presumption of enablement. Specifically the trial court opined that the

prior art patent disclosed hundreds or thousands of compounds and several diseases. Nothing

in the prior art patent directed one skilled in the art to recognize that riluzole could be used to

treat ALS. The mere mention of riluzole was insufficient to put one skilled in the art in the

possession of the claimed invention. The district court also did not find the dosage information in the disclosure to teach a proper treatment. Instead the dosage guidelines were broad and not specific to any of the hundreds of compounds of the claimed invention or to any of the listed

diseases. Moreover, the prior art patent tied the dosing information to the compounds of the

invention, specifically excluding riluzole from the invention. Finally, the trial court also noted the

absence of working examples.

In view of these findings, the Court Appeals for the Federal Circuit affirmed that one of ordinary

skill in the pharmaceutical arts would have needed extensive experimentation to link riluzole

with the treatment of ALS. The district court correctly reached the ultimate conclusion that the

prior art patent did not enable the claims of the patent in suit and thus, was not anticipatory.

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July 21, 2008

Eisai v. Dr. Reddy's Laboratories and Teva

In a case further illustrating the post-KSR landscape, in the pharmaceutical arts, the U.S. Court

of Appeals for the Federal Circuit affirmed the district court’s judgment that the patent in suit

was non-obvious over the proffered prior art and that the alleged acts during prosecution did not rise to the level of inequitable conduct. The suit involved rabeprazole’s sodium salt, the active ingredient in Aciphex for the treatment of duodenal ulcers, heartburn, and associated disorders.

Of interest was Judge Rader’s application of KSR, where he writes:

“In other words, post-KSR, a prima facie case of obviousness for a chemical compound still, in

general, begins with the reasoned identification of a lead compound. Teva cannot create a

genuine issue of material fact on obviousness through the unsupported assertion that

compounds other than lansoprazole might have served as lead compounds. Further, the record

contains no reasons a skilled artisan would have considered modification of lansoprazole by

removing the lipophilicity-conferring fluorinated substituent as an identifiable, predictable

solution. In sum, the district court properly concluded that the record did not support a case of

obviousness of the ’552 patent as a matter of law.”

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July 9, 2008

Roche Palo Alto LLC v. Apotex, Inc.

In a decision regarding ACULAR®LS, the U.S. Court of Appeals for the Federal Circuit held that

Apotex’ ANDA-1 formulation in an earlier suit against Syntex and the ANDA-2 formulation of the

instant case against Roche (successor to Syntex) were “essentially the same.” The CAFC

affirmed the judgment of the district court of infringement and claim preclusion on the invalidity

defenses.

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May 14, 2008

Aventis v. Amphastar

The U.S. Court of Appeals for the Federal Circuit affirmed the lower court finding of inequitable

conduct. Amphastar and Teva each filed an ANDA to obtain approval to market a generic

version of Lovenox®. The ANDA contained a paragraph IV certification challenging two Aventis

patents. After trial, the district court found that there was intent to deceive and held the patents

unenforceable for inequitable conduct. The decision was affirmed.

In particular, the district court found that submitted half-life comparisons were intended to

address both anticipation and obviousness rejections, and, to the extent that they were intended to address the anticipation rejection, the failure to disclose the dosage information evidenced intent to deceive. Interestingly, the issue of anticipation was withdrawn as a basis for rejection later by the Examiner, a fact that did not override the evidence of intent to deceive based on the failure to disclose dosage information in the half-life comparisons in the specification and in the first declaration earlier in the prosecution.

Judge Rader issued a strong dissent. He found most important that Dr. Uzan, here accused of

inequitable conduct, himself revealed the error, showing candor inconsistent with deceptive

intent. Dr. Uzan submitted all of the underlying data to the patent office with his second

declaration on June 9, 1994. Thus, Dr. Uzan corrected the mistake before it resulted in an

issued patent and clearly articulated that the half-life data showed superior properties of the

inventive LMWH over the prior art.

Nonetheless, inequitable conduct remains a potent defense.

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