Orange Book Blog

Federal Circuit Affirms Invalidity of Concerta Patent for Lack of Enablement

ALZA Corp. v. Andrx Pharms., No. 2009-1350 (Fed. Cir. 2010)

Earlier this week, the Federal Circuit affirmed a district court decision finding ALZA's U.S. Patent No. 6,919,373 invalid for lack of enablement.  The '373 patent claims methods for treating Attention Deficit and Hyperactivity Disorder ("ADHD") and is listed in the Orange Book for Concerta, an extended-release formulation of methylphenidate.

Last year, following a bench trial held in late 2007, the U.S. District Court for the District of Delaware found the '373 patent not invalid for obviousness, but invalid for lack of enablement and also not infringed by Andrx's ANDA for a generic version of Concerta.  The Federal Circuit affirmed the lack-of-enablement finding, and therefore did not address the other issues.

Claim 1 of the '373 patent reads:

A method for treating ADD or ADHD comprising administering a dosage form comprising methylphenidate that provides a release of methylphenidate at an ascending release rate over an extended period of time.

According to the Federal Circuit opinion, the specification of the '373 patent "focuses on how osmotic systems can be adapted to create an ascending release dosage form to treat ADHD.  The specification also mentions non-osmotic dosage forms."  Both Concerta and Andrx's product are non-osmotic dosage forms that contain an outer immediate-release coating around a sustained-release inner core.

On appeal, ALZA argued that the district court erred in finding claim 1 invalid for lack of enablement on the grounds that the specification does not enable the full scope of claim 1, which covers both osmotic and non-osmotic dosage forms.  The parties agreed that osmotic dosage forms are enabled, but disputed whether the specification would have enabled a person of ordinary skill in the art to create non-osmotic oral dosage forms--namely, tablets and capsules--with ascending release rates without undue experimentation.

The test of enablement is whether the specification would have taught someone having ordinary skill in the art, at the time of invention, how to make and use the full scope of the claimed invention without undue experimentation.  In the Wands case, the Federal Circuit set forth eight factors (the "Wands factors") that a court may consider when determining whether undue experimentation would have been required:

(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.

ALZA asserted that creating non-osmotic dosage forms and manipulating their release rates were well known to a person of ordinary skill in the art at the time of invention.  In addition, ALZA argued that the specification provides sufficient guidance regarding non-osmotic dosage forms because "it identifies a variety of suitable non-osmotic dosage forms and cites to a portion of a standard text to explain how to make and use such non-osmotic, sustained-release dosage forms" with mere routine experimentation.

Andrx disputed ALZA's contention that enablement can be satisfied by referring to what persons of ordinary skill in the art would know "because what one of the proper skill in the art knows cannot substitute for disclosure of novel aspects of the invention, i.e., the non-osmotic dosage forms exhibiting ascending release rates."  In addition, Andrx pointed to three Wands factors in particular--the sparse guidance provided by the specification, the absence of working embodiments, and the breadth of the claims--in support of its argument that creating non-osmotic dosage forms with ascending release rates would have required undue experimentation.

The Federal Circuit rejected ALZA's first argument:

To the extent that ALZA argues that the knowledge of a person of ordinary skill in the art satisfies the enablement requirement, we disagree.  As this court has repeatedly stated, "the rule that a specification need not disclose what is well known in the art is merely a rule of supplementation, not a substitute for a basic enabling disclosure."  Auto. Tech., 501 F.3d at 1282.

The Federal Circuit next addressed ALZA's argument that the disclosure in the '373 patent specification enables a person of ordinary skill to make and use the claimed dosage forms.  According to the court, ALZA pointed to "ten lines of the specification, which mention non-osmotics and refer to a textbook discussing how to make and use various types of non-osmotic sustained-release dosage forms."  The court agreed with the district court that "this disclosure provides no guidance as to how to achieve ascending release with non-osmotic oral dosage forms."  The court again quoted the Auto. Tech. case:

The omission of minor details does not cause a specification to fail to meet the enablement requirement.  However, when there is no disclosure of any specific starting material or of any of the conditions under which a process can be carried out, undue experimentation is required.

The Federal Circuit concluded with a statement akin to "you've made your bed, now lie in it":

As we stated in Liebel-Flarsheim . . ., "The irony of this situation is that Liebel successfully pressed to have its claims include a jacketless system, but, having won that battle, it then had to show that such a claim was fully enabled, a challenge it could not meet."  In this case, ALZA successfully argued to the district court that the claims encompassed both osmotic and non-osmotic dosage forms.  However, ALZA's patent specification does not enable the full scope of the claims, namely non-osmotic oral dosage forms with ascending release rates.

ADDITIONAL READING:

• AP story
• J&J (ALZA) press release
• Watson (Andrx) press release

Dr. Reddy's Wins Attorney's Fees from AstraZeneca in Prilosec OTC Case

AstraZeneca v. Dr. Reddy's, No. 07–6790 (S.D.N.Y. 2010)

After Dr. Reddy's filed an ANDA for Prilosec OTC (omeprazole), AstraZeneca filed suit, alleging infringement of U.S. Patent Nos. 5,690,960 and 5,900,424.  The patents claim omeprazole formuilations comprising a magnesium salt "having more than 70% crystallinity" and related processes of manufacture.

In response, Dr. Reddy's provided independent test results purporting to show that their product did not infringe the patents and offered to produce samples for Astra to test, suggesting that this matter could be resolved quickly.  The district court subsequently required Dr. Reddy's to produce samples of their omeprazole product and ordered Astra to test those samples.  Astra’s tests confirmed that the Dr. Reddy's samples were less than 1% crystalline (essentially amorphous).  Dr. Reddy's then moved for summary judgment on the ground of noninfringement.

But Astra pressed on, filing a request for additional discovery under Rule 56(f), arguing that further discovery was necessary to adequately access whether to maintain the suit.  Astra provided Dr. Reddy's and the court with proposed additional interrogatories, document requests and deposition requests, alleging that Dr. Reddy's may be manufacturing a crystalline product and then converting it into an amorphous form.  The court allowed limited discovery, requiring Dr. Reddy's to produce portions of their ANDA and DMF and to make available a witness with knowledge of Dr. Reddy's process for manufacturing omeprazole magnesium.  After completing discovery, Astra was unable to provide any evidence to the court's satisfaction that Dr. Reddy's product and process infringed the listed patents.  Nevertheless, Astra declined to withdraw its Complaint and instead requested a Markman hearing to construe the phrase "by addition of water."

In March 2009, the district court ruled on summary judgment that there was "no evidence whatever that Dr. Reddy's makes or uses a salt with the requisite degree of crystallinity."  Late last year, the Federal Circuit affirmed the ruling without further opinion.

Last month, the district court granted Dr. Reddy's motion for attorney's fees.  Analyzing a motion for attorney's fees is a two-step process:  (1) the court considers the "totality of the circumstance" in determining whether the case is exceptional under 35 U.S.C. § 285; (2) if found exceptional, the court determines whether granting attorney's fees is appropriate.

In finding this case to be exceptional, the court weighed the "reasonableness" of Astra's decision not to withdraw the suit despite evidence from an independent source and Astra itself that Dr. Reddy's product did not infringe.  The court reasoned that "an inference of bad faith exists when a patentee is manifestly unreasonable in assessing infringement, while continuing to assert infringement in court."  The court thus concluded:

[Astra] had an obligation not to file a lawsuit unless it had some evidence that Dr. Reddy's was in fact infringing.  The fact that a competitive product comes onto the market is not, without more, evidence of infringement.  Dr. Reddy's provided Astra with evidence of noninfringement prior to plaintiff’s filing suit.  Given the evidence in record before this court . . . I am hard pressed to see why the act of filing this lawsuit did not violate Fed. R. Civ. P. 11.

The court reacted strongly to AstraZeneca's arguments against a finding of exceptional case:

AstraZeneca insists that its litigation conduct here was appropriate because a lot of money was on the line.  That is a ridiculous claim to make.  Astra was not free to throw up roadblocks or to assert a claim construction in bad faith — to abuse the court system — just because it was to its economic advantage to keep a competitor out of the marketplace.

 

AstraZeneca also argues that finding this case "exceptional" will "act to chill zealous advocacy by other litigants."  I certainly hope that this ruling chills the sort of unreasonable, frivolous, anti-competitive, anti-consumer litigation in which plaintiffs here engaged.  This lawsuit was nothing more than an effort to keep a legitimate competitor out of the market on flimsy-to-nonexistent grounds.  Plaintiffs did not engage in zealous advocacy here; they engaged in litigation misconduct.  They abused the litigation process and needlessly consumed the scarce time of the court.  A case in which such tactics are employed ought be deemed exceptional.

The court further found that attorney's fees were appropriate, citing the "public’s interest in getting non-infringing generic drugs to the market without delay" and as a means to protect the courts "from patentees who maintain abusive and frivolous litigations."  The court concluded:

It was obvious from very early on that plaintiffs had brought and were maintaining this lawsuit in a desperate effort to keep any competing product from hitting the shelves — even if the competing product was not an infringing product.  For choosing that bad faith business strategy, and for cluttering a busy court with work that should never have had to be done, [plaintiffs] should pay the full measure of the fees and expenses incurred by defendants in getting rid of AstraZeneca’s baseless lawsuit.

ADDITIONAL READING:

• Business Standard

District Court Declines to Stay Integrilin Case, Putting Teva At Risk of Forfeiting 180-Day Exclusivity

Millenium Pharms. and Schering Corp. v. Teva, No. 09–105 (D. Del. 2010)

Under the “failure to market” forfeiture provision, the first ANDA filer forfeits its exclusivity is it fails to market its ANDA product within 75 days of a Federal Circuit decision of patent invalidity or noninfringement.  See 21 U.S.C. 355(j)(5)(D)(i)(I)(bb)(AA).  This presents a dilemma to ANDA applicants who wish to file a Paragraph III certification on a patent that will not expire until far in the future—specifically, more than 75 days after a Federal Circuit decision would be reached.

In this case, Teva filed an ANDA for generic versions of Integrilin (eptifibatide), an antiplatelet drug that is used to reduce the risk of acute cardiac ischemic events.  Teva’s ANDA included Paragraph III certifications to U.S. Patent Nos. 5,686,570 and 5,756,451, which expire in 2014; and Paragraph IV certifications to U.S. Patent Nos. 5,807,825, 5,747,447 and 5,968,902, which expire in 2015.

Teva duly provided notice of its Paragarph IV certifications to Millenium and Schering, who last year responded by filing suit for infringing the ‘825, ‘447 and ‘902 patents under 35 U.S.C. 271(e)(2).  Last month, believing that the case will take roughly 2.5 years to litigate, and not wishing to forfeit its 180–day exclusivity, Teva filed a motion to stay the action until May 11, 2012 (2.5 years before the patents-in-suit will expire).  In its motion, Teva relied on last year’s decision by the Northern District of Illinois in Abbott v. Matrix, which granted a motion to stay in similar circumstances.

Unfortunately for Teva, the District of Delaware saw things differently.  Last week, the court denied Teva’s motion.  According to the court:

Given that Plaintiffs have demonstrated more than “a fair possibility” that they will be harmed by the entry of a stay, Defendants must show that they have a “clear case of hardship or inequity” in order to justify the granting of a stay.  Admittedly, Defendants have shown that they will be harmed if a stay is not entered, as they will likely forfeit their 180-day exclusivity period.  Defendants, however, have only themselves to blame for this result.  Defendants were aware of the statutory preconditions necessary for them to obtain the 180–day exclusivity period, and were aware of the potential that this could be forfeited given the timing of the filing of their ANDAs.  Although Defendants did not file this suit, they were well aware that their ANDA triggered the start of a 45-day period for Plaintiffs to defend the validity of their patents, and, in this sense, did control the timing of the present litigation.  Rather than wait until they could fully take advantage of their position as first filer, however, Defendants sought to prematurely reserve their place at the front of the line, and now seek an order from this Court that allows them to preserve that position.  This is not the type of hardship or balance of inequities that can appropriately convince this Court to issue a stay in the present proceedings.  Although Defendants may suffer a hardship, it is one of their own creation and, therefore, we do not think that it can outweigh the harm caused to Plaintiffs by granting this stay.

 ADDITIONAL READING:

• Millenium brief in opposition to Teva motion
• Teva reply brief
• Shearlings Got Plowed

Federal Circuit Vacates Injunction that Directed Novo Nordisk to Revise Patent Use Code for Prandin

Novo Nordisk v. Caraco Pharm. Labs. et al., No. 2010-1001 (Fed. Cir. 2010)

In the Medicare Modernization Act of 2003, Congress gave ANDA applicants who have been sued for patent infringement the statutory right to file a counterclaim seeking the delisting of the patent from the Orange Book:

If an owner of the patent or the holder of the [NDA] for the drug that is claimed by the patent or a use of which is claimed by the patent brings a patent infringement action against the [ANDA] applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder . . . on the ground that the patent does not claim either—(aa) the drug for which the application was approved; or (bb) an approved method of using the drug.  21 USC 355(j)(5)(C)(ii).

Pursuant to this provision, after Novo Nordisk sued Caraco for infringement of U.S. Patent No. 6,677,358 based on Caraco’s paragraph IV certification, Caraco filed a counterclaim requesting an order directing Novo to change the Orange Book patent use code for the ‘358 patent, and thereby “correct the patent information” for the ‘358 patent.

Prandin (repaglinide) is FDA-approved for three uses:  (1) repaglinide by itself (i.e., monotherapy); (2) repaglinide in combination with metformin; and (3) repaglinide in combination with thiazolidinediones.  The ‘358 patent, which is the only patent listed in the Orange Book for Prandin, claims, “A method for treating non-insulin dependent diabetes mellitus (NIDDM) comprising administering to a patient in need of such treatment repaglinide in combination with metformin.”  Accordingly, the original patent use code for Prandin was “Use of repaglinide in combination with metformin to lower blood glucose.”

Caraco’s ANDA contained a paragraph IV certification to the ‘358 patent and a section viii statement declaring that Caraco was not seeking approval for the repaglinide-metformin combination therapy.  Because there was no overlap between Caraco’s proposed carve-out label and the repaglinide-metformin use code, FDA accepted the proposed label.

Thereafter, Novo changed the use code for the ‘358 patent to broaden it from the repaglinide-metformin combination therapy to “A method for improving glycemic control in adults with type 2 diabetes mellitus.”  The new use code covered all three approved uses for Prandin, even though the ‘358 patent covered only one approved use.  Caraco’s carve-out label now overlapped with the use code, and therefore FDA retracted its approval of Caraco’s proposed label and section viii statement.  As a result, Caraco’s current label now includes the repaglinide-metformin combination therapy, which is stipulated to infringe claim 4 of the ‘358 patent.  This prompted Caraco’s counterclaim seeking an order directing Novo to replace the new use code with the former listing.

On September 24, 2009, the U.S. District Court for the Eastern District of Michigan ruled that Caraco was entitled to the requested injunction.  The court stated, “Novo, by the change in the use code narrative is attempting to extend the life of an expired patent”—namely, U.S. patent RE37,035, which broadly claims repaglinide.  According to the court, “the clear legislative intent behind the 2003 amendments to Hatch-Waxman that added the counterclaim provision, section 355(j)(5)(C)(ii), [was] to curb Orange Book abuses arising from misinformation regarding listed patents.”  The next day, the court issued an order granting the injunction sought by Caraco.

On Wednesday, in a 2-1 decision—over a 28–page dissent from Judge Dyk—the Federal Circuit reversed and vacated the injunction.  The majority reasoned that the statutory language is clear on its face:  “an approved method of using the drug” means “any approved method” (as Novo urged) rather than “all approved methods” (as Caraco argued).  Further, according to the majority, its decision to vacate the injunction is consistent with the legislative intent:  the counterclaim provision in the 2003 Act “sought to correct the specific issue raised in Mylan v. Thompson (Fed. Cir. 2002), i.e., to deter pioneering manufacturers from listing patents that were not related at all to the patented product or method.”  In addition, the majority concluded that “the patent information” referred to in the counterclaim provision meant “the patent number and the expiration date”—not also the use code narrative.

In dissent, Judge Dyk expressed strong disagreement with the majority.  He wrote:

In 2003, Congress enacted the counterclaim provision of the Hatch-Waxman Act in order to prevent manipulative practices by patent holders with respect to the Orange Book listings.  These practices were designed to delay the onset of competition from generic drug manufacturers.  In my view, the majority, in reversing the district court, now construes the statute contrary to its manifest purpose and allows the same manipulative practices to continue in the context of method patents.

Judge Clevenger, in a short concurring opinion, stated that, in his view, “Novo did nothing that was illegal or forbidden.”  He acknowledged that FDA “may have inadvertently upset the careful balance of interests represented by the efficient dispute resolution mechanism Congress created in the Hatch-Waxman Act.”  But, he concluded, “Congress is the appropriate entity to readjust, if necessary, the delicate balance it has struck between original drug manufacturers and their generic counterparts.”

Perhaps Congress will "readjust" the Act--time will tell.  Caraco and Novo Nordisk have not yet commented on the Federal Circuit’s decision.