Orange Book Blog

District Court Dismisses Impax's Declaratory Judgment Complaint in ANDA Case Against Medicis

Impax Labs. v. Medicis Pharm., No. C-08-0253 MMC (N.D. Cal. 2008)

Last Wednesday, the U.S. District Court for the Northern District of California dismissed a declaratory judgment complaint filed by Impax against Medicis, ruling that the court lacks jurisdiction because there is no case or controversy between the parties.  The decision is interesting because it follows two recent decisions in ANDA cases where the Federal Circuit expanded declaratory judgment jurisdiction: Teva v. Novartis and Caraco v. Forest.  The district court, however, distinguished this case by finding that Impax had not alleged a cognizable injury-in-fact.

Medicis manufactures and sells Solodyn, a minocycline extended-release tablet used as an oral acne medication.  Medicis owns U.S. Patent No. 5,908,838, which claims methods of treating acne by administering minocycline.  However, because minocycline is an "old antibiotic," Medicis was not required (or allowed) to submit any patents on Solodyn to the FDA for listing in the Orange Book.

Impax filed an ANDA for a generic version of Solodyn in 2007 and, on December 20, voluntarily sent Medicis a letter informing Impax of its ANDA and asserting that Impax does not infringe any valid claim of the '838 patent.  In the same letter, Impax asked Medicis for a covenant not to sue under the '838 patent.  Medicis replied on January 11, 2008, stating that it would consider Impax's letter and have a further response within two weeks.  Impax did not wait for that response, and instead filed a complaint for a declaratory judgment of invalidity and noninfringement on January 15, 2008.

According to the court, Impax argued, based on 35 U.S.C. § 271(e)(2), that the filing of an ANDA is sufficient to create an actual controversy for purposes of the Declaratory Judgment Act.  The court, however, found that "an act of infringement under § 271(e)(2) is not, by itself, sufficient to create an actual controversy for purposes of standing for declaratory judgment relief."  The court stated that the defendant must have "taken some affirmative action sufficient to constitute a threat of imminent injury."

Citing the Supreme Court's recent decision in MedImmune v. Genentech, the court further stated that even if Impax had pled facts sufficient to give rise to standing, the court would use its "substantial discretion in deciding whether to declare the rights of litigants."  According to the court:

[P]laintiff's allegation of jurisdiction rests on the existence of the '838 patent, plaintiff's filing an ANDA, and defendant's failure to immediately agree to a covenant not to sue.  If, under such circumstances, the Court were to exercise declaratory judgment jurisdiction, it would promote the premature filing of declaratory judgment actions and reduce the incentive for potential infringers to communicate with patentees before filing suit.

Given Medicis's public statements about its intent to vigorously enforce its patents on Solodyn, it will be interesting to see whether Medicis files suit against Impax at some point in the future.

RELATED READING:

• Complaint
• Motion to Dismiss
• Memorandum in Opposition to Motion to Dismiss
• Reply Brief in Support of Motion to Dismiss

Pharma News Briefs

• FDA recently posted numerous comments from industry regarding Ramipril 180-day exclusivity issues on its website.  The comments come in response to FDA's request last month.  A summary of the new comments is in the works.
• FDA also established a docket for comments on Granisetron HCl 180-day exclusivity issues.  This too follows an FDA request made last month.
• Yesterday, the WSJ Health Blog had two pessimistic reports on the pharmaceutical industry: "Drug Drought Deepens as FDA Approvals Lag" and "Pharma Woes Won't Let Up Soon."
• On a happier note, Wednesday, the U.S. District Court for the Eastern District of Virginia granted GSK's motion for a preliminary injunction against the USPTO, halting implementation of the PTO's new claims and continuation rules (see Patent Docs).
• Also on Halloween, the New York Time published a spooky article entitled "Chinese Chemicals Flow Unchecked Onto World Drug Market."  Reuters published a similar article the next day.  This can't be good publicity for pharmaceutical companies--both innovators and generics alike--who are increasingly outsourcing production of key ingredients to China.
• On Tuesday, the Federal Circuit denied rehearing of BIO and PhRMA v. District of Columbia, in which the court previously found Washington, D.C.'s drug price control law to be unconstitutional (see Patently-O).
• Last week, Sen. Bernie Sanders (D-VT) introduced a new bill that would scrap patent and market exclusivity for drugs and replace it with a "medical innovation prize fund" (see FDA Law Blog and Pharmalot).  I suspect that this bill is DOA, and therefore nothing to fear.
• Also last week, the WSJ Health Blog reported on Amgen's big win in its patent infringement suit against Roche's Mircera drug.
• A couple weeks ago, BioPharma Reporter published an interesting article, "U.S. Dragging its Heels on Biosimilars, Report Says."

Federal Circuit Affirms Invalidity of Par Pharma's Patents on Megestrol Acetate Formulations

Par Pharmaceuticals v. Roxane Labs, No. 2007-1093 (Fed. Cir. 2007)

In the early 1990s, Bristol-Myers Squibb developed and patented Megace, a liquid pharmaceutical composition of megestrol acetate indicated for the treatment of anorexia, cachexia, or an unexplained weight loss.  Par Pharmaceuticals sought to design around the claims of BMS's patent and introduce a generic version of Megace.  In developing its product, Par discovered that flocculated suspensions of megestrol acetate could be formed using a much wider range of excipients and concentrations than those known to BMS.  Through those efforts, Par obtained a series of patents on its flocculated suspensions, including U.S. Patent Nos. 6,593,318 and 6,593,320, the two patents-in-suit in this case.

Par won its paragraph IV challenge of BMS's patent in 2001 and, as the first ANDA applicant to file a paragraph IV certification, earned 180 days of market exclusivity for megestrol acetate oral suspension.  In 2003, Par brought suit against Roxane Laboratories, a subsequent ANDA filer for megestrol acetate oral suspension, asserting that Roxane's formulation infringes the '318 and '320 patents.  The district court granted Roxane's motion for summary judgment of invalidity for lack of enablement under section 112, paragraph 1.  Last Friday, the Court of Appeals for the Federal Circuit affirmed that decision.

The test of enablement is whether one of ordinary skill in the art can make and use the claimed invention without undue experimentation.  Furthermore, under In re Wands (Fed. Cir. 1988), eight factors are relevant to the enablement analysis: (1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the claims.

The Federal Circuit cited two factors that were particularly relevant to the enablement analysis in this case: the unpredictability of the art and the breadth of the claims.  According to the court, "all the record evidence establishes that the art of making stable flocculated suspensions of megestrol acetate is highly unpredictable."  Moreover, the court concluded that the claims at issue "have an extraordinarily broad scope," allowing, for example, "the choice of any surfactant in any concentration."  The court observed: "In this case, Par sought extremely broad claims in a field of art that it acknowledged was highly unpredictable, therefore, Par has set a high burden that its patent disclosure must meet to satisfy the requisite quid pro quo of patent enablement."

In reviewing Par's evidence of enablement, the Federal Circuit noted that the specification of Par's patents discloses only three working examples, utilizing only one new surfactant.  Moreover, the court found the two declarations submitted by Par's expert witness to be conclusory and lacking "specifics as to the experimentation that would be needed to practice the entire scope of the claims."  Additionally, the court characterized Par's evidence that Par's inventor was able to formulate the claimed composition with seven different surfactants as "merely colorable" evidence, failing to create a genuine issue of material fact as to enablement of the full scope of the claims.

Thus, the Federal Circuit concluded that each of the asserted claims of Par's patents is invalid for lack of enablement, and therefore affirmed the district court's grant of summary judgment.

Pharma News Briefs

• The Federal Circuit reissued its July 11 opinion in Daiichi Sankyo v. Apotex as a precedential opinion, one day after denying Daiichi's petition for rehearing.  According to Hal Wegner, a major reason for making the decision precedential was Prof. Joseph Scott Miller's Rule 47.6(c) filing.
• Biosimilars legislation is "off the table" for now.  The FDA bill is moving forward without it.  (Bloomberg; Pharmalot).
• Novartis is set to launch its biosimilar Epoetin in Europe.  (msnbc.com).
• Cubist Pharmaceuticals has asked the FDA to delist a patent on its lead product, Cubicin, from the Orange Book.  (The Street.com).
• FDA issued final guidance on commercially distributed Analyte Specific Reagents, such as antibodies and nucleic acids.  (FDA Law Blog).
• Dr. Reddy's and Teva settled their patent dispute over generic Zoloft.  Teva had alleged that Dr. Reddy's infringed its sertraline HCl polymorph patents.  (Patent Docs; TMCnet.com).
• Imclone and Repligen/MIT settled their patent dispute over Erbitux.  (Patent Prospector).
• Ranbaxy vs. Pfizer worldwide Lipitor patent litigation scorecard: mixed results.  (MarketWatch.com).
• Feroz Ali Khader has written a new book on Indian patent law, particularly as it relates to pharmaceuticals.  (Generic Pharmaceuticals & IP blog).
• Mr. Kapil Sibal, Honorable Minister for Science and Technology in India, will be speaking tomorrow, September 17 at 4 pm at the George Washington University Law School.  (Flyer; Program).

Pharma News Briefs

• FDA Law Blog had a post Thursday about "The Dog Ate My Homework Act," which would give a reprieve to companies that miss the deadline for filing a patent term extension request.
• Pharmalot had this post Wednesday, reporting that Congress has delayed the FDA bill until September.
• Patently-O reported Wednesday on the Federal Circuit's decision on Washington, D.C.'s drug price law.  PhRMA made a press release on the decision.  The Washington Post published this article on the case.
• Tuesday, Wyeth announced a deal with Teva and Sun concerning generic Protonix.  Today, Teva announced that FDA approved its ANDA for Protonix.
• Investor's Business Daily had an interesting article last week, "RNAi Stirs Excitement in Big Pharma."
• The Patent Prospector had a neat post last week, "Dealing with KSR."

Festo XIII: Federal Circuit Further Limits the Doctrine of Equivalents

Festo v. Shoketsu Kinzoku Kogyo Kabushiki Co., No. 2005-1492 (Fed. Cir. 2007)

In a decision that appears to diminish the value of pharmaceutical formulation patents, today the Federal Circuit held that "[a]n equivalent is foreseeable if one skilled in the art would have known that the alternative existed in the field of art as defined by the original claim scope, even if the suitability of the alternative for the particular purposes defined by the amended claim scope were unknown."  Judge Dyk wrote today's opinion; he was joined by Chief Judge Michel.  Judge Newman wrote a strong dissent.

This litigation began in August 1988 when Festo sued the defendant for infringement of U.S. Patent No. 4,354,125.  The '125 patent, entitled "Magnetically Coupled Arrangement for a Driving and a Driven Member," has nothing whatsoever to do with pharmaceuticals, but the ensuing litigation has had a dramatic effect on patent law.  The case has made two round-trips from the district court to the Federal Circuit and Supreme Court and back--and then finally back up to the Federal Circuit, which is where today's decision was made.

The case concerns the scope of the Doctrine of Equivalents, a judicial doctrine stating that although an accused product might not be literally identical to a patented invention, it still may be held to infringe the patent if it is "equivalent".  The doctrine is especially important with respect to pharmaceutical formulation patents, because generic drug companies often try to "design around" such patents by using excipients that are not identical to those used in the innovator product, but which serve the same function.

In 2002 (in "Festo VIII"), the Supreme Court held that a narrowing amendment to the claims of a patent application, made during prosecution, would preclude application of the doctrine of equivalents, with three exceptions: (1) the equivalent was "unforeseeable at the time of the application," (2) "the rationale underlying the amendment bears no more than a tangential relation to the equivalent in question," or (3) that "some other reason suggests that the patentee could not reasonably be expected to have described the insubstantial substitute in question."

Earlier this year, the Federal Circuit strictly limited the "tangential relation" exception (in Cross Medical); now the court has done something similar with the "unforeseeability" exception.  By holding that whether a scientist in the field of the invention would have in fact recognized a substitute as usable is irrelevant to the legal question of foreseeability, the court has practically eliminated the exception.

As applied to pharmaceutical formulation patents, generic drug companies will certainly argue that the case stands for the proposition that if an excipient was known to exist at the time a claim amendment was made, then as a matter of law it was not unforeseeable--even if a formulation scientist would not have recognized that the excipient could have served as an acceptable substitute.

Given the Federal Circuit's pattern of rulings in Doctrine of Equivalents cases over the last 15 years or so, today's decision is not especially surprising.  Nonetheless, it serves to remind patent owners that they should anticipate having to enforce patents by proving literal infringement.

RELATED READING:

• Patent Docs

Supreme Court Upholds "TSM Test" of Obviousness; Mixed Impact for Pharmaceutical Patent Owners

KSR Int'l v. Teleflex, 550 U.S. ___ (2007)

In a unanimous decision released this morning, the Supreme Court reversed the Federal Circuit's decision in KSR v. Teleflex.  The Court rejected the Federal Circuit's rigid application of its "Teaching, Suggestion or Motivation" ("TSM") test in this particular case, but stopped short of discarding the test entirely.  Justice Kennedy wrote the opinion for the Court.

Under the TSM test, an invention is obvious (and therefore unpatentable) only if there is a teaching, suggestion or motivation to combine prior art references.  The TSM test is especially relevant to patents on "combination inventions," such as those on pharmaceutical formulations.  Indeed, in today's decision the Supreme Court cited with approval the Federal Circuit's flexible application of the TSM test in Alza v. Mylan, in which the Federal Circuit invalidated Alza's patent on an extended-release formulation of Ditropan.

Pharmaceutical patent owners are likely relieved that the Supreme Court did not reject the TSM test outright and replace it with a much more stringent standard, such as "Synergism" (as applied in a 1976 Supreme Court case) or "Extraordinary Level of Innovation" (as suggested by the Solicitor General).  On the other hand, today's decision does seem to raise the bar to patentability.

While the Court's decision today didn't establish a clear test of obviousness, it did suggest "predictability" as a touchstone for obviousness:

• "The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results."
• "[W]hen a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result."
• "If a person of ordinary skill can implement a predictable variation, Section 103 likely bars its patentability."
• "[A] court must ask whether the improvement is more than the predicatable use of prior art elements according to their established functions."

PhRMA, BIO, and IPO all filed briefs in support of Teleflex and a flexible TSM test.  Paul Berghoff, Jeremy Noe, and I contributed to the IPO brief.

[Incidentally, nothing seems to bring the Supreme Court together as much as a patent case.  In his confirmation hearings last year, Chief Justice Roberts spoke of his desire to bring more unity to the Court.  It seems like every Supreme Court patent decision in the past year has been unanimous or nearly so.  Maybe this explains the Court's recent interest in patent cases!]

RELATED READING:

• Patently-O; Pharmalot; WSJ Health Blog
• Legal Times article, quoting Chief Judge Michel

Pfizer Wins Attorney's Fees from Synthon in Case Involving Synthon's Amlodipine Process Patent

Synthon IP v. Pfizer, No. 05-1267 (E.D. Va. 2007)

Last month the Federal Circuit invalidated three key claims of Pfizer's Norvasc patent and currently a district court in Washington, D.C. is deciding whether to allow a flood of Norvasc generics on the market.  But the news for Pfizer hasn't been all bad lately.  Though it might be small consolation, a district court in Virginia recently awarded Pfizer $3.2 million in attorney's fees and costs in a case in which Synthon (who is also one of the Norvasc generic applicants) accused Pfizer of infringing its patent on a process for making amlodipine, the active ingredient in Norvasc.

As we previously reported, last August a jury in the Eastern District of Virginia found that Pfizer did not infringe Synthon's amlodipine process patent (U.S. Patent No. 6,653,481).  As we also reported, in February Judge T.S. Ellis, III (of the same court) found the '481 patent unenforceable due to inequitable conduct.  Pfizer subsequently filed a motion for attorney's fees and costs pursuant to 35 USC 285.  On April 16, Judge Ellis granted Pfizer's motion.

Under 35 USC 285, courts hearing patent disputes "in exceptional cases may award attorney's fees to the prevailing party."  The prevailing party must prove the exceptional nature of the case by clear and convincing evidence.  Even if that burden is met, the district court has discretion to determine whether an award of attorney's fees is appropriate in the circumstances.

In a nine-page Order, Judge Ellis explained that "the Federal Circuit has recognized many types of misconduct that may create an exceptional case for purposes of awarding fees, including inequitable conduct before the PTO, litigation misconduct such as vexatious or unjustified litigation or frivolous filings, and willful infringement."  According to Judge Ellis, "[t]hese principles, applied here, compel the conclusion that this case is appropriately deemed 'exceptional' in light of Synthon's inequitable conduct before the Patent and Trademark Office."  He continued:

And significantly, while Synthon's inequitable conduct before the PTO is alone sufficiently compelling to render this case exceptional, it should also be noted that Synthon's litigation strategy and conduct in the course of these proceedings further supports an exceptional case finding.  Indeed, a review of the record as a whole makes clear that Synthon copied and sought patents on what it knew to be Pfizer's work and then, once those patents had issued, filed against Pfizer what it knew, or should have known with reasonable investigation, was a baseless suit for willful infringement of two invalid patents.

Although Judge Ellis granted Pfizer's motion, he didn't give Pfizer everything it asked for.  He reduced Pfizer's request for fees and nontaxable costs and expenses by 20% due to what he called "unnecessary work and excessiveness."  He also refused Pfizer's request for reimbursement of $345,000 in expert witness fees, as well as Pfizer's request for pre-judgment interest.

Federal Circuit Affirms Invalidity of AstraZeneca Prilosec Process Patent

In re Omeprazole Patent Litigation, No. 04-1562 (Fed. Cir. 2007)

In a 2-1 decision released today, the Federal Circuit affirmed a 2004 district court decision finding AstraZeneca's U.S. Patent No. 6,013,281 invalid as inherently anticipated.  The '281 patent covers a process for making Prilosec, Astra's blockbuster anti-ulcer medication.

The case arose from the efforts of several generic drug companies, including Andrx, Genpharma, and Kudco, to market generic versions of Prilosec.  In the same litigation, the Federal Circuit previously found that Andrx's generic Prilosec infringed two Astra patents on Prilosec formulations: U.S. Patent Nos. 4,786,505 and 4,853,230.

In today's decision, Judge Rader (writing for himself and Judge Bryson) concluded that a Korean patent application to Chong Kun Dan Corp. ("CKD") inherently anticipated claim 1 of the '281 patent, which recites a process for making a pharmaceutical formulation by "forming in situ a separating layer" between an active ingredient core and an enteric coating.  In support, J. Rader cited numerous statements--apparently admissions--that Astra made in Korean litigation and Korean patent office proceedings, as well as the district court's finding that Andrx's expert was more credible than Astra's.

J. Rader's opinion further stated:

Inherency is not necessarily coterminous with knowledge of those of ordinary skill in the art.  Artisans of ordinary skill may not recognize the inherent characteristics of functioning of the prior art.  Though [Astra's scientists] may not have recognized that a characteristic of CKD's Method A ingredients, disclosed in the CKD Patent Application, resulted in an in situ formation of a separating layer, the in situ formation was inherent.

Judge Newman, dissenting, wrote that the majority opinion applied a "novel theory" and a "flawed analysis" of inherent anticipation.  She stressed that the majority failed to appreciate that claim 1 of the '281 patent is directed to a process--not a composition of matter.  Moreover, she noted, "[i]t is not disputed that a sublayer does not form under the conditions in the CKD patent application."  J. Newman explained:

While some properties and uses of known compositions may indeed be 'inherently anticipated' in that their existence would have been known to persons in the field of the invention, even if unpublished, that is not this situation.  No prior art describes the Astra process, and there is no evidence that a person of ordinary skill would have known of its existence.  What is unknown cannot 'anticipate.'

RELATED READING:

• Patent Docs; Patently-O; Peter Zura's 271 Patent Blog

Apotex and Its CEO Ordered to Pay $3.1 Million in Attorney Fees to Eon Labs

Apotex et al. v. Eon Labs Mfg., No. 01-0482 (E.D.N.Y. 2007)

Apotex and its CEO, Bernard (Barry) C. Sherman, were ordered by a federal district court last week to pay Eon Labs $3.1 million in attorney fees and expenses in a patent case they pursued for years before admitting that their patent was invalid.  In a Memorandum and Order granting Eon's motion for fees, Judge Avern Cohn of the U.S. District Court for the Eastern District of New York described the case as a "debacle" and the manner in which it was litigated as "reflect[ing] all that is bad in patent litigation."

In the case, Apotex and Sherman sued Eon for infringing U.S. Patent No. 5,798,333 (entitled "Water-Soluble Concentrates Containing Cyclosporin," and naming Dr. Sherman as the sole inventor), alleging that Eon's cyclosporin drug product infringed the patent.  Both Apotex and Eon (since acquired by Sandoz) are generic drug makers.  The only problem, which Apotex characterized as a "technicality," was that the '333 patent was invalid under 35 USC 102(d).

Section 102(d), a relatively obscure provision of the patent statute, states that a patent is invalid if:

the invention was first patented . . . by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor's certificate filed more than twelve months before the filing of the application in the United States.

More than a year before Apotex filed the U.S. patent application that led to the '333 patent, Apotex filed a patent application on the same invention in New Zealand.  The New Zealand patent then issued before Apotex filed its U.S. patent application.  Amazingly, these facts weren't discovered until "the morning of the sixth day of a bench trial, following five years of hard fought and sometimes contentions pretrial proceedings."  This is especially surprising because the New Zealand patent was cited by the patent examiner during prosecution and is listed on the face of the '333 patent.

Judge Cohn's opinion is well worth reading--not only for the lessons it contains for patent lawyers, but also because at times it reads like a mystery.  In the end, Judge Cohn concludes that "the record supports a finding of gross negligence and a reckless indifference to the obligations of counsel as to make this case exceptional."  However, Judge Cohn also assigned some blame to Eon, finding that Eon should have discovered sooner that the '333 patent was invalid.  Judge Cohn therefore reduced Eon's award of attorney fees by 30% from the amount requested.

Thanks very much to a helpful reader for letting us know about this interesting case.

RELATED READING:

• 15-Aug-06 New York Times article cited in Judge Cohn's opinion