ANDA Update


A Brand Must Allege Facts to Survive a Motion to Dismiss Induced Infringement Claims

Addressing the pleading standard for induced infringement, the U.S. District Court for the District of New Jersey dismissed Otsuka Pharmaceutical’s claims finding that a formulaic recitation of the legal standard without sufficient factual support did not state a claim for induced infringement. Otsuka Pharmaceutical Co., Ltd. v. Zydus Pharmaceuticals USA, et al., Civil Action No. 14-3168, Otsuka Pharmaceutical Co., Ltd. v. Torrent Pharmaceuticals Limited, Inc., et al., Civil Action No. 14-4671; Otsuka Pharmaceutical Co., Ltd. v. Teva Pharmaceuticals USA, Inc., Civil Action No. 14-5878; Otsuka Pharmaceutical Co., Ltd. v. Teva Pharmaceuticals USA, Inc., Civil Action No. 14-6398; Otsuka Pharmaceutical Co., Ltd. v. Zydus Pharmaceuticals USA, et al., Civil Action No. 14-7252 (D.N.J. October 13, 2015) (Simandle, J.).

Factual Background

The related Hatch-Waxman patent infringement actions generally concern Otsuka’s brand name aripiprazole product, Abilify®. Otsuka included U.S. Patent No. 8,759,350 (‘350 Patent) in the Orange Book listing for Abilify. The primary indication for the ‘350 Patent is as a product for the adjunctive treatment of major depressive disorder.

Following the court’s decision on Otsuka’s motions for preliminary injunction and to amend its complaints, but before the Markman hearing, defendants moved to dismiss Otsuka’s direct, induced and contributory infringement claims for the ‘350 Patent. Otsuka did not oppose the dismissal of its direct infringement claims; however, the company argued that dismissal of the induced infringement claim would be premature before claim construction and prior to the resolution of fact issues related to whether Defendants’ proposed labels actively instructed and/or encouraged infringement of the asserted patent, notwithstanding that each defendant submitted a “section viii” statement in its abbreviated new drug application (ANDA) certifying that the applicant did not seek approval for any indications or uses covered by the ‘350 Patent (e.g. “adjunctive treatment for major depressive disorder”).

Otsuka Failed to Sufficiently Allege Induced Infringement

The court focused on the standard for induced infringement and whether Otsuka’s complaints stated plausible claims of induced infringement of the ‘350 Patent. Otsuka’s claims would survive “if, but only if” it alleged direct infringement and presented plausible facts that Defendants knowingly induced infringing acts and possessed a specific intent to encourage another to infringe the ‘350 Patent.”

The court held that Otsuka’s allegations of “actual knowledge” of the ‘350 Patent and that the labels for the generic products would “recommend, suggest, encourage and/or instruct others to use [Defendants’] generic products in a manner that infringes at least one claim of the ‘350 Patent” were insufficient to state a cause of action for induced infringement. Otsuka’s complaints failed to allege any specific intent by the defendants or specific actions taken to encourage infringement “much less any attendant factual support to render these allegations plausible.” The “formulaic and incomplete” recitation of the standard for induced infringement failed to plead the “factual content” necessary for the Court to draw the “reasonable inference of culpable conduct intended to induce infringement.”

The court dismissed Otsuka’s induced infringement claims without prejudice and with leave to amend within seven days “to the extent such amendment can be made consistent with counsel for Otsuka’s obligations under Federal Rule of Civil Procedure 11(b).”


Otsuka filed amended complaints within the seven days and defendants again moved to dismiss. Following the court’s Markman ruling, the parties have entered stipulations converting the motions to dismiss to motions for summary judgment and stipulating to a partial summary judgment concerning direct infringement based on the court’s constructions.

A Substantially Pure Isomer Is Obvious in View of Both a Completely Pure Isomer and an Impure Mixture

Addressing an unusual twist on an obviousness case, the U.S. Court of Appeals for the Federal Circuit held a substantially pure isomer obvious in view prior art disclosing both a completely pure isomer and an impure mixture. Spectrum Pharmas. V. Sandoz Inc., 15-1407(Oct. 2, 2015) (Lourie, J.). The court also held that Spectrum surrendered any doctrine of equivalents arguments related to different dosages during prosecution.

The case related to the drug leucovorin, and a patent covering a mixture of its isomers. Leucovorin has a chiral sixth carbon, so it exists in two enantiomers, 6R and 6S. The 6S enatiomer has a variety of therapeutic uses including counteracting the toxic effects of methotrexate, a cancer treatment, and treating folate deficiency. The 6R enantiomer lacks any relevant therapeutic effects.

Spectrum’s patent covered substantially pure mixtures of the two enantiomers with at least 92 percent or 95 percent 6S enantiomer, depending on the claim. The prior art disclosed two relevant formulations, a 50/50 mixture of both enantiomers and a completely pure 6S formulation. Sandoz argued those two pieces of prior art rendered the Spectrum patent obvious. Spectrum countered that a person of skill in the art lacked motivation to pursue a substantially pure 6S isomer since the completely pure isomer already existed in the art. The court sided with Sandoz, invalidating the patent.

For the motivation argument, the court focused on the 50/50 mixture. It found that a person of skill in the art had the motivation to purify the 50/50 mixture, regardless of the already existing completely pure isomer. The court also held the patent invalid over the completely pure isomer. It reasoned that the substantially pure isomer worked identically to the completely pure isomer for treatment purposes, so no unexpected result justified finding the substantially pure isomer non-obvious.

The court also addressed five claims related to the dosage amount. The Spectrum patent’s claims limited it to “a quantity sufficient to provide multiple doses . . . in an amount of 2000mg per dose.” Sandoz’s abbreviated new drug application (ANDA) covered a product distributed in vials of 175 milligrams or 250 milligrams. Spectrum argued that because Sandoz would import those vials in aggregate amounts beyond the 2,000 milligram doses, they infringed under the doctrine of equivalents. The court held the Sandoz vials did not infringe because Spectrum repeatedly emphasized the importance of their dosage size during prosecution to ensure that their patent issued over another prior art reference that disclosed a different amount of leucovorin. As such, Spectrum surrendered equivalents arguments based on other dosage sizes.

This case provides a road map to patent defendants seeking to invalidate formulation patents that stress purity as their novel aspect, and it also highlights the litigation importance of arguments and interpretations made during a patent’s prosecution.

AbbVie Documents Not Protected by Privilege in FTC Sham Litigation Suit

The U.S. District Court for the Eastern District of Pennsylvania ordered AbbVie, Inc. and Besins Healthcare to produce unredacted documents to the Federal Trade Commission (FTC), because the documents were relevant to the FTC’s pay-for-delay and sham litigation claims and contained business advice and analysis provided by attorneys, not legal advice. Federal Trade Commission v. AbbVie, Inc., 2015 WL 8623076, Civil Action No. 14-5151 (E.D. Penn. Dec. 13, 2015), (Bartle, J.).

The current FTC case relates to prior patent litigation involving U.S. Patent No. 6,503,894, which covered the brand-name testosterone drug, AndroGel® (testosterone gel). AndroGel was developed by Unimed Pharmaceuticals—which was later acquired by Solvay Pharmaceuticals—and Besins Healthcare. In 2009, Perrigo Company filed an abbreviated new drug application (ANDA) for a generic version of AndroGel. Solvay and Besins considered bringing a patent infringement claim, but ultimately decided against doing so. Then, in 2010, AbbVie acquired Solvay and subsequently sued both Perrigo and Teva Pharmaceutical Industries (who had also filed an ANDA) for infringement of the ‘894 patent. AbbVie and Teva eventually reached a settlement agreement.

In September 2014, the FTC initiated this case, alleging that AbbVie and Besins filed a sham patent litigation against Teva and Perrigo in order to delay approval of the companies’ generic version of AndroGel. The FTC further alleged that the AbbVie/Teva settlement agreement was anticompetitive—claiming that Teva delayed its generic launch in return for the right to market an authorized generic version of AbbVie cholesterol drug TriCor® (fenofibrate).

After initial discovery in the case, the FTC filed a motion to compel production from both Besins and AbbVie. The FTC alleged that AbbVie and Besins improperly withheld and redacted documents. AbbVie and Besins responded by stating the documents themselves (or the redacted portions) were protected by the attorney-client privilege, the work product doctrine or both.

Besins’ Challenged Documents

The first challenged document was an email from Besins’ outside counsel in the United States to outside counsel in Europe, and contained a redacted sentence relaying a statement by a U.S. Patent and Trademark Office examiner during prosecution of the ‘894 patent. The court determined that even though the statement was from a lawyer, it simply reported a fact gathered during conversation with a third party and did not constitute legal advice and ordered production of the email.

Next, Besins redacted an email from in-house counsel in which in-house counsel reported on ongoing litigation and estimated the expected launch date of specific drugs based on that litigation. In finding the material non-privileged, the court stated that the report on ongoing litigation was for the business purpose of identifying expected launch dates, and was not providing legal advice.

Finally, Besins withheld two documents that were sent for the purpose of providing outside counsel with technical information necessary for outside counsel to provide legal advice. The court found that those documents were privileged and did not need to be produced.

AbbVie Challenged Documents

The first set of challenged AbbVie documents related to spreadsheets prepared by a non-lawyer relating to forecasting analysis for AndroGel. Because these documents were prepared at the request of counsel in order to conduct legal analysis regarding settlement discussions with Teva, the court found that the documents were protected by the work product doctrine.

Next, AbbVie withheld an email chain in which an AbbVie employee stated to another employee his desire to speak with in-house counsel. The court found that this type of communication is not between two privileged persons and is therefore not protected by privilege.

AbbVie also withheld several documents, including presentations, prepared as part of AbbVie’s due diligence research in advance of its possible acquisition of Solvay. Since these documents were prepared as part of the business decision to acquire Solvay and did not relate to any pending or future litigation, the court found that the documents were not protected by attorney-client privilege or the work product doctrine.

Alternatively, the court found that communications between counsel and AbbVie and counsel for Solvay (that were exchanged after AbbVie had agreed to acquire Solvay) were protected, even though the acquisition had not been completed. The emails were protected because they related to legal advice regarding AndroGel, and because AbbVie and Solvay shared a common legal interest in AndroGel after the acquisition agreement was signed.

Finally, the court evaluated several emails between business and legal employees at Solvay relating to the ‘894 patent. The court found that one email included legal advice from counsel regarding patent protection was protected by attorney-client privilege. However, the remaining documents were mainly between business employees at the company and included a discussion of business strategy. Therefore, the remaining documents were not protected by attorney-client privilege or the work product doctrine.

Expected Toxicity of Claimed Immunoconjugates Thwarts Showing of Prima Facie Obviousness

In an inter partes review (IPR) proceeding, the Patent Trial and Appeal Board (Board) upheld the patentability of Phigenix’s patent claims that were challenged on the basis of obviousness. Phigenix, Inc. v. Immunogen, Inc., Case IPR-2014-00676, Final Written Decisions dated October 27, 2015 (Paper 39).

Phigenix’s U.S. Patent No. 8,337,856 is directed to immunoconjugates (antibodies bound to toxins) used to target and kill cancer cells that express the ErbB2 family of receptors, such as breast cancer. Independent claim 1 of the ‘856 patent is specifically directed to “an immunoconjugate comprising an anti-ErbB2 antibody conjugated to a maytansinoid, wherein the antibody is huMAb4D5-8.” Dependent claims 2 through 8 include specific forms or numbers of the conjugated maytansinoid toxin molecules and the use of specific chemical linkers.

In the IPR proceeding based on a theory of unpatentability due to obviousness, the Board found that Phigenix did not show by a preponderance of evidence that claims 1 through 8 of the ‘856 patent are unpatentable (page 3). Specifically, the Board determined that Phigenix did not demonstrate a prima facie case of obviousness of the challenged claims, even though Phigenix presented evidence that the primary prior art reference (Chari 1992) disclosed “all limitations recited in [claim 1] … except [the specific antibody] huMAB4D5-8” (page 11) Chari 1992 disclosed the use of a mouse antibody (TA.1) in an immunoconjugate with the claimed toxin maytansinoid (pages 7–8). Further, huMAB4D5-8 had been commercialized in the prior art product, Herceptin®, which was known for use in treating breast cancer, including in combination with other cytotoxic agents (pages 8–9). Phigenix argued that one of skill in the art would have been motivated to substitute the mouse TA.1 antibody of Chari 1992 with huMAB4D5-8 because: human antibodies were preferred to mouse antibodies for clinical applications; huMAB4D5-8 was receptor selective and approved by the U.S. Food and Drug Administration; and huMAB4D5-8 worked synergistically with other chemotherapeutic agents (pages 12–13).

Significantly, the Board found persuasive Immunogen’s rebuttal evidence on the issue of expectation of success. Immunogen presented prior art showing that at the time the ‘856 patent was filed (2000), “Herceptin-maytansinoid immunoconjugates would have been expected to exhibit unacceptable levels of antigen-dependent toxicity in normal human liver tissue in patients” (pages 16–22). Consequently, the Board concluded that Phigenix “did not establish by a preponderance of evidence that those general statements in Chari 1992 [that maytansinoid conjugates may effectively treat human cancer] in view of teachings years later in the Herceptin Label … and other references regarding liver toxicities, would have motivated an ordinary artisan to substitute” in the human antibody safely and effectively treat tumors (pages 19–22).

Additionally, the Board found dependent claims 6 and 8 relating to non-cleavable linkers non-obviousness for the reasons set forth above, in addition to prior art teaching the benefit of cleavable linkers and evidence of secondary inidicia of non-obviousness, including long-felt and unmet need, industry praise and commercial success of the purported commercial embodiment, Kadcycla®.

With regarding to Phigenix evidentiary objections to the admission of Immunogen’s evidence of commercial success, the Board accepted the submission by Immunogen’s economist of voluminous data summaries relating to marketing and sales information for Kadcycla (consistent with Fed. R. Evid. 703), but also accepted certain paragraphs of the expert’s declaration objected to as hearsay “[b]ecause that Declaration corresponds to Mr. Jarosz’s direct testimony in this trial” (page 28).

In December 2015, Phigenix filed a notice of appeal from the final decision including as the basis for appeal: the Board’s ruling that the challenged claims were not obvious under the preponderance of evidence standard and the Board’s denial of Phigenix’s motion to exclude evidence relating to commercial success.

The Board declined to institute an IPR in response to Phigenix’s petition on related U.S. Patent No. 7,575,748 (IPR2014-00842).

Federal Circuit Affirms Ariosa, but Not Without Concerns

Denying a petition for en banc rehearing, the U.S. Court of Appeals for the Federal Circuit confirmed the panel’s decision that Sequenom’s patent claiming “a method of detecting paternally inherited nucleic acid” is an unpatentable law of nature. The order was accompanied by two concurrences by Justices Alan Lourie and Timothy Dyk addressing the patentability concerns of medical diagnostics and therapeutic methods, and a dissent by Justice Sandra Schultz Newman drawing distinctions between the facts here and those in Mayo. Ariosa Diagnostics, Inc. et al. v. Sequenom Inc. et al. 2014-1139, 2014-1144 (Fed. Cir. December 2, 2015).

At issue is Sequenom’s U.S. Patent No. 6,258,540, directed to diagnosing birth defects of an unborn child without the use of highly intrusive means by detecting the presence of cell-free fetal DNA (cffDNA) in maternal plasma. It was believed that fetal DNA present in maternal blood could be amplified based on the portions inherited paternally, as opposed to maternally, and then screened for birth defects. Specifically, the claims are directed to two steps: 1) amplifying paternally inherited DNA from a plasma sample taken from a pregnant female; and 2) detecting the presence of cffDNA. The court relied on the Supreme Court of the United States’ decision in Mayo v. Prometheus, as controlling precedent, in holding that the amplification and detection steps add nothing innovative to the natural phenomenon of cffDNA in maternal serum to make the subject matter patent-eligible. Under the framework of Mayo, detecting the presence of a naturally occurring thing or phenomenon, coupled with general instructions applying known routines and/or conventional techniques, does not transform the unpatentable law of nature into patentable subject matter. The same is true in Ariosa. In Ariosa, Sequenom’s testing and determination steps were well known in the art and therefore those additional conventional steps were not enough to make the claims patent-eligible.

In two separate concurrences, Justices Lourie and Dyk shared concerns that the patent-eligibility test set forth in Mayo may be too restrictive, particularly as it applies to medical diagnostics and therapeutic methods where the discoveries are often driven by natural laws of life science. Specifically, there is concern that “method claims that apply newly discovered natural laws and phenomenon in somewhat conventional ways are screened out by the Mayo test.” This is true particularly in cases where a claim is narrowly tailored to what an applicant has actually invented and reduced to practice, thus limiting any risk of undue preemption of the underlying idea. Notwithstanding, the court agreed that the panel’s decision was correct in view of the Supreme Court’s precedent, and rehearing was denied.

Judge Newman’s dissent criticized the original panel’s reliance on Mayo stating the facts here and in Mayo are clearly distinguishable. In Mayo, the claimed medicinal product and its metabolite were previously known, “leaving sparse room for innovative advance in using this information as a diagnostic tool.” Whereas here, the inventors are claiming the discovery of a new diagnostic method using breakthrough information, namely, that birth defects can be identified earlier in the gestation period and without the risks of an invasive procedure.

The Federal Circuit’s denial for a rehearing paves the way for a writ of certiorari to the Supreme Court, particularly with so many members of the Federal Circuit requesting that the breath of Mayo should be revisited.

Method of Treatment Claims Cancelled in View of Prior Art under Theory of Obviousness, but Not Anticipation

In an inter partes review (IPR) proceeding, the Patent Trial and Appeal Board (Board) found all of Los Angeles Biomedical Research Institute’s (LA-Bio Med) patent claims unpatentable on the basis of obviousness in view of a combination of published prior art. Eli Lilly and Co. v. Los Angeles Biomedical Research Institute at Harbor-UCLA Medical Center, Cases IPR-2014-00752, Final Written Decision dated October 22, 2015 (Paper 44).

The patent at issue, U.S. Patent No. 8,133,903, relates to methods of treatment of fibrotic conditions, such as erectile dysfunction (ED), with phosphodiesterase inhibitors. Claim 1 of the ‘903 patent is directed to “a method comprising: a) administering a … (PDE 5) inhibitor according to a continuous long-term regimen to an individual with at least one of a penile tunical fibrosis and corporal tissue fibrosis; and b) arresting or regressing the … tissue fibrosis, wherein the PDE-5 inhibitor is administered at a dosage up to 1.5 mg/kg/day for not less than 45 days.”

In 2013, LA-BioMed filed suit against Eli Lilly alleging the ’903 patent claims encompass the use of Lilly’s Cialis® (tadalafil) product for the once-daily treatment of ED. Los Angeles Biomedical Research Institute at Harbor-UCLA Medical Center v. Eli Lilly and Co., No. 2:13-cv-08567 (C.D. Cal.)(stayed in view of IPR proceedings). Within the year, Eli Lilly submitted two IPR petitions challenging the validity of the ‘903 patent claims on the basis of anticipation and obviousness.

In the IPR proceeding addressing obviousness, the Board construed claim elements in dispute, including interpreting “continuous long-term regimen” as including administration of a drug over a period of time without intermission such that treatment is therapeutically effective, and not less that the claimed “up to 1.5 mg/kg/day 45 days” (although the later phrase was not defined) (pages 6–7, 9). The Board did not adopt LA-BioMed’s position that the claim should be narrowed such that “continuous” required maintaining a constant level of PDE-5 inhibitor. The Board found “an individual . . . with fibrosis” to be one having symptoms, but not necessarily diagnosed with, fibrosis (page 8). The Board declined to interpret “arresting or regressing … the … fibrosis” because that is the intended result of administering the medication (pages 8–0).

Significantly, the Board concluded that LA-Bio Med was not entitled to claim priority to its earliest 2002 provisional patent application because the claim limitation of “up to 1.5 mg/kg/day” was not adequately disclosed by an animal study that could not confirm the exact dosage of drug delivered by daily water intake and could not be readily translated to a human dosage upper limit (pages 9–13). Consequently, the primary obviousness reference (Montorsi 2002) qualified as prior art against the ‘903 patent.

In evaluating obviousness, the Board concluded that Eli Lilly “demonstrated by a preponderance of the evidence that claims 1-5 of the ‘903 patent are unpatentable” in view of two prior publications (Montorsi 2002 and Porst 2000) and published patent application to Whitaker 2001 (page 2). As to claim 1, the Board found that Montorsi 2002 disclosed that the pathophysiology underlying ED can be fibrosis, and disclosed treatment of ED using up to daily doses of 100 mg of a PDE-5 inhibitor (sildenafil) over a 12-week to six-month period, one hour before sexual activity. Whitaker 2001 disclosed the motivation for the use of a long-term (eight to 12 weeks), up to daily treatment (rather than on-demand) for ED of one to 10 milligrams Viagra® (sildenafil, but preferably tadalafil). Porst 2000 provided further motivation for continuous dosing by disclosing the safety and efficacy of daily administration of another PDE-5 inhibitor (IC351) at up to 100 milligrams for three weeks to treat ED (pages 13–19). The Board agreed with Eli Lilly that a skilled artesian would have “had a reasonable expectation of success of achieving the claimed invention because Montorsi teaches early intervention, Whitaker teaches daily administration, and Porst teaches that the administration of 100 milligrams per day of a PDE-5 inhibitor was safe and generally well tolerated” (page 20). The Board did not find persuasive LA-Bio Med’s arguments relating to unexpected results in view of or teaching away by the prior art. The Board found claims 2-5 unpatentable for the same reasons and because no additional basis for patentability was presented (page 28). In December, LA-Bio Med filed a notice of appeal to the final decision on obviousness.

In the IPR proceeding addressing anticipation, Eli Lilly contended that the ‘903 patent claims 1-5 were unpatentable for being anticipated by Whitaker 2001 alone. However, the Board found that Whitaker did not disclose all of the elements of claim 1. Specifically, the Board concluded that Whitaker lacked a disclosure of daily administration of a PDE-5 inhibitor, even though the title of the Whitaker patent is “Daily treatment for the erectile dysfunction using a PDE5 inhibitor,” and discloses “…administration…preferably daily as long as the patient suffers from [ED]…” The Board found Whitaker’s description of the clinical study assessing efficacy of a PDE-5 inhibitor for the treatment of ED wherein men took the study drug, “greater than 70 percent of the time during the study” (lasting eight to twelve weeks) to not inherently disclose daily dosing for at least 45 days, as claimed. Eli Lilly has filed a notice of appeal to the final decision on anticipation.

Pharmaceutical Preservative Patent Survives Indefiniteness Challenge

Applying the Supreme Court of the United States’ new indefiniteness standard from Nautilus v. Biosig, the U.S. District Court for the District of New Jersey held three claim terms in a patent on a stabilized, opthalmic nonsteroidal anti-inflammatory drug (NSAID) not invalid for indefiniteness. Senju Pharma. Co. Ltd. v. Lupin Ltd., 2015 Markman 7302183 (D.N.J. 2015) (Simandle, C.J.). The court also construed the transitional phrase “consisting essentially of” as it relates to the addition of unclaimed active ingredients to a pharmaceutical formulation patent.

The case centered on a patent for bromfenac, an NSAID sold in eye-drop form for relieving pain and swelling associated with cataract surgery. In particular, this patent claimed a formulation of bromfenac that included a stabilizing surfactant, tyloxapol. The Markmanhearing involved the construction of four claim terms: “in an amount sufficient to stabilize the first component” and “stable”; “satisfies the preservative efficacy of U.S. Pharmacopoeia as follows,” followed by certain contamination benchmarks; and “consisting essentially of.”

The defendants argued that the first set of terms, “sufficient to stabilize the [bromfenac]” and “stable” were indefinite because the claim did not provide any way of determining how much extra stability the tyloxapol needed to provide. The court disagreed. Instead, the court relied on a stability test from the examples that demonstrated specific storage conditions and the minimum stability results necessary to qualify as stable. The court held that the disclosure in the example defined the claim terms well enough to meet the Nautilus standard.

The defendants also argued that the claim term related to the U.S. Pharmacopoeia was indefinite. The term contained an internal contradiction because it referred to the U.S. Pharmacopoeia, but the contamination benchmarks listed corresponded to the European Pharmacopoeia. While the defendants contended that a person having ordinary skill in the art could not determine which Pharmacopoeia the patent meant, the court held that it could correct this inconsistency as an “obvious error”. The court interpreted the standards as being the European Pharmacopoeia based on the fact that the patent’s examples only contained references to the European standards.

Finally, the parties also disputed the meaning of the transitional phrase, “consisting essentially of.” The parties agreed that the transitional phrase limited additional elements to those “that do not affect the basic and novel properties of the invention.” However, they disagreed over whether the addition of unclaimed active ingredients necessarily affected the invention’s basic and novel properties. Ultimately, the court sided with Defendants, holding that the addition of other active ingredients did not necessarily alter the invention’s novel properties.

Re-Exam Claiming Opposite Enantiomer Not Enough to Invalidate Patent

The U.S. Court of Appeals for the Federal Circuit affirmed the judgment of the district court regarding the five asserted patents. Cubist Pharmaceuticals, Inc. v. Hospira, Inc., 805 F.3d 1112, 1115 (Fed. Cir. 2015).

The asserted patents were follow-on patents directed to compositions, formulations and methods of treating bacterial infections with the antibiotic daptomycin (U.S. Patent No. RE 39,071, the ‘071 patent), dosage regimens for administering daptomycin (the dosing patents), and purification of daptomycin compositions (the purity patents).

The district court found the asserted claims of the ‘071 patent valid and infringed. The U.S. Patent and Trade Office (USPTO) issued a certificate of correction to the ‘071 patent that corrected an error in the chemical structure of daptomycin. When the original application and the reissue application for the ’071 patent were filed, it was universally believed that the asparagine amino acid in daptomycin was the L-isomer, as depicted in the ‘071 patent. Later, it was discovered that the asparagine was in fact the D-isomer. Cubist sought and obtained a certificate of correction, correcting the structural diagram of daptomycin found in the specification and claims.

Before the district court and on appeal, Hospira argued that the certificate of correction was invalid because it broadened the scope of the claims. Under Hospira’s proposed construction of the as-issued claim, Hospira would not infringe because the claim would not cover daptomycin.

The Federal Circuit rejected Hospira’s argument, noting that the specification did not rely exclusively on the erroneous structural diagram to describe daptomycin, but rather also identified the compound they were claiming in several ways, including a process to obtain daptomycin and an internal code name. Cubist established that the process necessarily resulted in, and the code name referred to daptomycin, not the L-isomer variant.

Hospira made two additional arguments that the claims as-corrected of the ‘071 patent are invalid: written description and the recapture rule. The Federal Circuit rejected both arguments. The recapture rule applies if the reissue claims are broader than the original patent claims, and the broader aspects of the reissued claims relate to subject matter surrendered in the prosecution of the original patent in order to overcome a prior art rejection. The court found the reissue claims did not violate the recapture rule because they are narrower than the original claims, and also the applicants did not surrender subject matter to avoid prior art during the prosecution of the original application.

Regarding written description, the court found the specification as a whole showed that that the inventors had possession of daptomycin, even though they may not have had an accurate picture of the entire chemical structure of that compound.

In a somewhat pyrrhic victory for Hospira, the Federal Circuit affirmed the district court’s decision that the remaining four asserted patents were invalid for obviousness. Confronted with a prior art reference that pointed to the claimed dosage regimen, Cubist relied heavily on secondary considerations evidence to support its non-obviousness arguments relating to the dosage regimen patents, but the Federal Circuit found no clear error in the district court’s analysis.

The specification and claims of the purity patents focused on two primary purification steps: micelle or aggregation filtration and anion exchange chromatography. The purity patents do not point to any additional techniques necessary to obtain the recited purity levels in the claims. The district court found, and the Federal Circuit affirmed, that it would have been obvious to use micelle filtration in view of two prior art references showing that: 1) micelle filtration could be used for the recovery and purification of most surfactants, and 2) daptomycin displays the properties of a surfactant. Anion exchange chromatography was well known in the industry as a purification technique. As it did for the dosage regimen patents, the Federal Circuit found no clear error in the district court’s analysis of secondary considerations. The court noted in particular that there was no long felt need because Lilly’s decision not to pursue its research into daptomycin was based on economic considerations, not on the absence of methods for obtaining sufficiently high purity levels.

Species Claims Invalidated by Genus Prior Art and a Lack of Secondary Indicia of Non-Obviousness

The U.S. Court of Appeals for the Federal Circuit upheld the U.S. District Court for the District of New Jersey’s finding of patent invalidity on the basis of obviousness, but did not reach the issue of invalidity due to double patenting, in this Hatch-Waxman patent infringement action. Prometheus Laboratories, Inc. v. Roxane Laboratories, Inc. and Cipla, Ltd., 805 F.3d 1092 (Fed. Cir. 2015).

The patent at issue, U.S. Patent No. 6,284,770, relates to Prometheus’ medication used to treat irritable bowel syndrome (IBS), Lotronex® (alosetron). Prometheus filed suit against Roxane alleging infringement of select claims of the ’770 patent. In relevant part, claim 5 of the ‘770 patent is directed to: “A method for treating a diarrhea-predominant female IBS patient . . . administering an effective amount of alosetron . . . to said patient who has experienced symptoms for at least six months. . .” Claim 13 also added the limitation that the female patient, “experiences at least moderate baseline pain.”

Roxane challenged the validity of the ‘770 patent under theories of obviousness (and obviousness-type double patenting) in view of the ‘800 patent (owned by Prometheus) and the state of the art of treating IBS. The parties agreed on the level of one of skill in the art of the ‘770 patent (gastroenterologist with three years of experience), and the parties agreed that the ‘770 patent claims species of the genus methods claimed in the prior art ‘800 patent.

Finding this case analogous to AbbVie Inc. v. Mathilda & Terence Kennedy Inst. of Rheumatology Tr., 764 F.3d 1366 (Fed.Cir.2014), the court held 1) that the ‘770 patent was obvious; 2) secondary considerations did not support a conclusion that the patent was not obvious; and 3) the district court did not improperly shift the burden of proof to Prometheus to demonstrate a nexus between its secondary consideration evidence and the ‘770 patent claims—even if the district court opinion may have included “imperfect language” on the burden to produce evidence of secondary indicia of non-obviousness. Prometheus Labs at 1101-1102.

The court commented that, [t]he genus species distinction may have particular relevance in the field of personalized medicine, where for example, a particular treatment may be effective with respect to one subset of patients and ineffective (and even harmful) to another subset of patients.” Id. at 1098. While a narrow species can be non-obvious despite prior art disclosing a genus (such as “where the new patient subset displayed unexpected results”), the court did not find that situation in this case. Id. at 1098.

Here, the court found insubstantial differences between the prior art and the limitations set forth in claim 5 of the ‘770 patent drawn to 1) a known type of IBS (diarrhea-predominant or IBS-D); 2) the gender most commonly effected by IBS (female); 3) treatment of a patient only after a duration of time commonly used when evaluating patients for treatment (six months); and 4) treatment after a physician evaluates a patient for at least moderate pain (claim 13). Id. at 1098-1101.

With regard secondary indicia of non-obviousness, the court found that it was not unexpected that alosetron was more effective for patients with IBS-D, rather than IBS predominated by constipation (IBS-C), because prior art disclosed that “alosetron and other 5-HT3 antagonists slow colonic transit” and “taught that alosetron would be beneficial to prescribe with those with IBS-D and potentially harmful to those with IBS-C.” Id. at 1099. The court also found product praise and allegedly long-felt, unexpected improvements in safety and risk profiles more attributable to the alosetron compound and the precautions issued after the product’s relaunch due to safety concerns, rather than the asserted method claims. Id. at 1101.

Additionally, the court found that Prometheus had not advanced sufficient evidence of commercial success where there was only a modest increase in Lotronex sales following its relaunch with prescribing information mirroring the ‘770 patent claims. Finally, the court found the incremental increase in Lotronex revenue was attributable to marketing activity, increases in sales price and rebates provided to patients to stimulate sales. Id. at 1101-1102. Notably, the court criticized Prometheus’ failure to control for these marketing variables when assessing increases in Lotronex’s sales and revenue. Id. at 1101.

The ‘770 patent was Orange Book-listed for Lotronex with a patent expiry on October 5, 2018. Roxane is the only company with the U.S. Food and Drug Administration’s final approval to sell AB-rated, generic alosetron products.

The Use of Expert Opinions in 'Reverse-Payment' Settlement Cases Under Actavis

Applying its previous rulings in related litigation and interpreting FTC v. Actavis, 570 U.S. 756 (2013), the U.S. District Court for the Eastern District of Pennsylvania was tasked with determining whether to preclude expert testimony pursuant to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993) in antitrust lawsuits involving “reverse-payment” settlements. King Drug Company of Florence, Inc., et al. v. Cephalon, Inc., et al., Case No. 06-1797, 2015 WL 6750899 (E.D. Pa. Nov. 5, 2015) (Goldberg, D.J.).

Factual and Procedural Background

Defendant Cephalon was granted U.S. Pat. No. 5,618,845 in 1997 for the modafinil formulation in Provigil®. In January 2002, Cephalon was granted a reissue patent on Provigil, U.S. Pat. No. RE 37,516 (RE‘516 patent). In December 2002, generic manufacturers (the Generic Defendants) each filed an abbreviated new drug application (ANDA) for generic Provigil, all of which included Paragraph IV certifications that Cephalon’s patent was either invalid or not infringed.

In 2003, Cephalon sued the Generic Defendants for infringement (Paragraph IV litigation), which settled between 2005 and 2006. Under the settlement, Cephalon paid the Generic Defendants millions of dollars to stay off market until 2012. This type of settlement is referred to as a reverse-payment or pay-for-delay settlement, and was recently analyzed by the Supreme Court of the United States in Actavis. Direct purchasers and end payors of Provigil, along with generic competitor Apotex, Inc., sued Cephalon and the Generic Defendants alleging these reverse-payment settlements violate antitrust laws (consolidated as the In re Modafinil Litigation). Apotex also alleged the Paragraph IV litigation was a sham, violating the Sherman Act.

In addition to the antitrust claims, Apotex sued Cephalon seeking a declaratory judgment on validity, unenforceability and infringement. Following two bench trials, the court found the RE ‘516 patent 1) invalid; 2) unenforceable; and 3) not infringed by Apotex’s generic product.

Motions to Preclude Expert Testimony

Cephalon identified numerous experts who may testify at the antitrust trial and the In re Modafinil Litigation plaintiffs raised a number of challenges to these experts under Daubert.

Under the rule-of-reason analysis of Actavis, plaintiffs bear the initial burden of demonstrating anticompetitive effects, including evidence of large reverse payments. Defendants then have the burden to show procompetitive effects, including justifications for the reverse payments (e.g., fair value for services and avoided litigation costs). Plaintiffs can rebut these justifications by showing the reverse payments were not reasonably necessary to achieve the procompetitive effects and were instead aimed at delaying generic entry. The direct purchasers and end payors argued that Cephalon’s experts’ opinions should be excluded because they do not fit any issue the jury will consider under the Actavis standards. All Plaintiffs also challenged the validity and infringement experts for reliability and fit, alleging inconsistencies between the experts’ opinions and this court’s prior rulings in the Apotex case. Apotex also challenged the experts’ opinions on the reasonableness of the validity, enforceability and infringement arguments raised by Defendants in the Paragraph IV litigation and their decision to settle, arguing that these opinions present impermissible legal opinions that usurp the roles of the judge and jury.

Cephalon argued the testimony will not be offered to prove issues it is estopped from litigating, such as validity, enforceability and infringement, but rather to assist the jury in determining whether the settlements were reasonable and procompetitive under Actavis. Cephalon also argued the testimony would show the motivation for settling the Paragraph IV litigation was to avoid litigation uncertainty, as opposed to having any anticompetitive purpose. Finally, Cephalon offered these opinions to show it had a reasonable basis to bring infringement claims against the Generic Defendants in response to Apotex’s sham litigation claim.

Opinions Regarding Strength of Patent Positions

The court first addressed Plaintiffs’ challenge to expert testimony offered to establish the strength of Defendants’ patent positions in the Paragraph IV litigation, which Plaintiffs argued is irrelevant under Actavis. The court noted, however, Plaintiffs seek to introduce evidence regarding the weakness of the RE ‘516 patent in order to establish Defendants had anticompetitive motivations in entering into settlement agreements, which Plaintiffs argued is relevant to the Actavis rule of reason analysis. The court found Plaintiffs’ positions inconsistent, and concluded that “if Plaintiffs pursue a theory that a weak patent is probative of antitrust motivations in settling the Paragraph IV litigation, [it] will allow Defendants to respond and attempt to rebut this evidence.” Evidence regarding the strength or weakness of a patent “speaks directly to the issue of why the settlement agreements were executed” and “may assist the jury in answering [the question as to the reasons for the reverse payment settlement], as it can provide circumstantial evidence of the settling parties’ intentions.”

Opinions Regarding Validity

Next, the court addressed Plaintiffs’ challenge to the validity experts’ testimony that the RE ‘516 patent is valid. Plaintiffs argued this testimony conflicts with the court’s prior rulings in the Apotex litigation and must be excluded. Cephalon argued this testimony is not offered to prove the RE ‘516 patent is valid, but rather “to show that, ex ante, a company in Cephalon’s position could have reasonably believed that the RE ‘516 patent was strong and expected to prevail in the Paragraph IV litigation.” Finding these opinions to directly contradict the rulings in the Apotex trial, the court held the validity experts’ opinions as to the validity of the RE ‘516 patent do not fit the facts of this case and are not admissible. “Such testimony would likely be confusing to the jury and would not assist them in deciding the facts at issue in the antitrust trial, as the validity of the patent has been decided and is no longer in contention.”

Opinions Regarding Infringement

Turning to the infringement opinions, the court held that “Cephalon’s experts [cannot] opine that the Generic Defendants’ products presently infringe the RE ‘516 patent,” since that “testimony would not fit the facts of this case and has the potential to confuse the jury.” The infringement experts are limited to the “infringement opinions and arguments raised by the parties at the time of the Paragraph IV litigation on an ex ante basis.”

The court then addressed challenges to specific infringement experts’ opinions on drug testing, claim construction and the doctrine of equivalents. The court excluded the drug testing expert’s opinions as unreliable, just as it did in the Apotex litigation, since the substantial variations in the results were so severe it rendered them inadmissible. The court found the claim construction opinions permissible, despite conflicting with the court’s prior claim construction ruling, since “that evidence [helped] to explain, on an ex antebasis, what Cephalon could have reasonably believed about the claim construction of the RE ‘516 patent.” The court also allowed the doctrine of equivalents expert opinion. Despite Cephalon not advancing that argument during the Paragraph IV litigation, it does not mean Cephalon never considered it at the time of the reverse-payment settlements, and “testimony regarding arguments made during the Paragraph IV litigation and the information available to the parties at that time regarding infringement would not offend Daubert’s fit requirement.”

Opinions Regarding “Reasonableness”

Finally, the court addressed the “reasonableness” expert testimony. The experts in this category—all lawyers—opined on the reasonableness of the validity, enforceability and infringement arguments raised by Defendants during the Paragraph IV litigation and Defendants’ decision to settle. Plaintiffs challenged these experts for making statements that conflicted with the court’s prior findings in the Apotex trial. The court reiterated the experts cannot opine the RE ‘516 is currently valid or to adopt legal standards that directly conflict with the conclusions of law established in the Apotex litigation.

Apotex separately challenged these experts for presenting what it argued is impermissible legal opinions—“opinions presented by lawyers who are simply applying patent law to the underlying facts of the Paragraph IV litigation, such that their conclusions usurp the roles of the judge and jury.” Cephalon argued the experts did not present a legal opinion, but rather gave opinions as to the customs and practices of the industry, as well as factors the Defendants considered in deciding whether to settle the Paragraph IV litigation.

For the Actavis claims, while the court acknowledged evidence offered to show strength of patent positions in the Paragraph IV litigation is allowed, it held that including opinions that those arguments were reasonable and opinions as to whether it was reasonable to expect success on the merits would be excluded as impermissible legal opinions. “The proposed experts are attorneys who are evaluating the merits of a legal argument by applying the facts to the law, which invades the jury’s role.” The court also found opinions by an attorney expert as to whether he would have counseled a Defendant to settle the Paragraph IV litigation are also excluded as prejudicial and confusing to the jury.

With respect to Apotex’s sham litigation claim against Cephalon, the court concluded the reasonableness opinions were not helpful to the jury. “Whether Cephalon presented reasonable claims during the underlying litigation, such that it could have realistically expected success on the merits is an element Apotex must prove to the jury in order to establish sham litigation.” The court held that opinions that merely tell the jury which conclusion to reach on an essential element would clearly usurp the role of the jury, and must be excluded.