Orange Book Blog

PTAB Finds § 315(b) Barred Petition for Inter Partes Review Challenging Claims Amended in Reexamination

BioDelivery Sciences Int'l, Inc. v. MonoSol RX, LLC, IPR2013-00315 (PTAB)

    by Robert F. Kappers

On November 13, 2013, the Patent Trial and Appeal Board issued a decision denying the petition for inter partes review filed by BioDelivery Sciences targeting MonoSol Rx's U.S. Patent 7,425,292.  The '292 patent relates to thin films with non-self-aggregating uniform heterogeneity for use in drug delivery systems.

BioDelivery filed its petition for inter partes review on June 12, 2013, more than one year after MonoSol served BioDelivery with a complaint asserting infringement of the '292 patent, but less than one year after an ex parte reexamination proceeding terminated upon issuance of a reexamination certificate that confirmed or amended each of the original claims.

The Board denied BioDelivery's petition because it was untimely filed under 35 U.S.C. § 315(b).  Specifically, the Board found that § 315(b) barred BioDelivery's petition even though the petition challenged claims that were amended by a reexamination certificate issued after service of the complaint.  In adopting a broad interpretation of § 315(b), the Board emphasized that reexamination does not result in a new patent:

A reexamination certificate merely "incorporates in the patent any proposed amended or new claim determined to be patentable."  35 U.S.C. § 307(a).  The reexamination certificate itself states: "The patent is hereby amended as indicated below."  The identical reference in § 315(b), to the "date on which the petitioner . . . is served with a complaint alleging infringement of the patent" indicates that the timeliness analysis is to be made with reference to "the patent."

This decision comes as further development of the PTAB's broad interpretation of § 315(b).  See, e.g., Accord Healthcare v. Eli Lilly and Co., IPR2013-00356 (a second complaint in the second of two prior lawsuits did not reset the time for filing a petition); St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., IPR2013-00258 (counterclaim is a "complaint alleging infringement of the patent" within the meaning of § 315(b).)

Motion to Amend Pleadings to Assert Inequitable Conduct Denied in Rapamycin Case

Pfizer Inc. v. Sandoz Inc., No. 12-654-GMS-MPT (D. Del.)

    by Malaika D. Tyson

Undue delay that resulted in prejudice to Pfizer coupled with failure to demonstrate good cause are some of the reasons why on November 4, 2013, Magistrate Judge Mary Pat Thynge issued a report and recommendation denying Sandoz’s motion to amend its answers, defenses and counterclaims to add an inequitable conduct defense.

On May 24, 2012, Pfizer filed suit against Sandoz for infringement of U.S. Patent No. 8,026,276 directed to parenteral formulations of rapamycin.  In Sandoz's expert reports, which were served August 20, 2013, Sandoz first raised the theory of inequitable conduct.  On September 20, 2013, Sandoz moved to amend its pleadings to add claims of inequitable conduct.  The deadline to amend the pleadings was March 22, 2013.

When deciding whether to grant leave to amend pleadings under Rule 15(a), the court considers four elements: 1) undue delay by the movant; 2) unfair prejudice to the nonmovant; 3) improper purpose; and 4) futility.  As for the good cause requirement of Rule 16(b), the movant must demonstrate "that the amendment could not have been reasonably sought in a timely manner despite diligence."

While undue delay alone is "not sufficient to justify a denial of leave to amend," it weighs in favor of denial.  Here, the court focused on the actions of Sandoz, concluding that because Sandoz had the required documents in its possession within a few weeks of the deadline to amend the pleadings, its delay was undue.  The court was not convinced by Sandoz’s explanation for the delay--the volume of the record and concurrent litigation--concluding that Sandoz did not establish good cause under Rule 16(b) because it could not "satisfactorily explain its substantial delay."

The court then concluded that Pfizer would be subject to unfair prejudice if the leave to amend was granted.  Even though the inequitable conduct allegations were based on documents within Pfizer's control, the court concluded that Pfizer had "a significantly compressed time frame" for a response compared to the "fourteen months" Sandoz had to develop its inequitable conduct defense.

The court also concluded that Sandoz's amendment would be futile (improper purpose was not challenged by Pfizer and therefore not addressed by the court).  Inequitable conduct is based in fraud and under Rule 9(b) the elements of fraudulent claims must be plead with particularity.  Sandoz argued that Pfizer’s Rule 131 and Rule 132 declaration were "unmistakably false and the falsehood is both material and evidence of specific intent."  But the court concluded that Sandoz failed to "create a reasonable inference of specific intent to deceive the PTO" because "other than alleging that the inventor filed two false affidavits, [Sandoz] does no more than argue that information and belief is sufficient to reasonably infer intent. Thus, there is an insufficient factual basis to draw an inference of specific intent to deceive."

Finally the court held that "[e]ven if the proposed amendment is not futile, the failure to demonstrate good cause and inadequately explained delay for filing the motion resulting in prejudice warrant denying the motion."

On November 12, 2013, the parties jointly submitted a letter to the court stating that they had agreed to settle the case.

First-Ever Judicial Interpretation of Biosimilar Patent Litigation Statute Results in Dismissal of DJ Action

Sandoz v. Amgen and Hoffman-La Roche, No. 13-204 (N.D. Cal.)

    by Aaron F. Barkoff

In what appears to be the first court decision interpreting the patent litigation provisions of the BPCIA (the "Biosimilar Act"), the U.S. District Court for the Northern District of California granted Amgen's motion to dismiss Sandoz's declaratory judgment complaint concerning patents protecting Enbrel (etanercept).  In its order dismissing the case, the court stated that "neither a reference product sponsor, such as Amgen, nor [a biosimilar] applicant, such as Sandoz, may file a lawsuit unless and until they have engaged in a series of statutorily-mandated exchanges of information."

Sandoz filed its complaint in June, alleging that it is conducting clinical trials on a "biologic drug containing etanercept" and that it "intends to file an FDA application for licensure of its etanercept product as biosimilar to Enbrel" upon completion of the clinical trials.  Sandoz sought a declaration that its biosimilar product does not infringe either U.S. Patent No. 8,063,182 or 8,163,522 and that the two patents are invalid and unenforceable.

Amgen responded by filing a motion to dismiss for lack of subject matter jurisdiction, arguing that the complaint was premature for two reasons: (1) a district court lacks statutory authority to consider a patent dispute involving a biosimilar product until after such time as an application for FDA approval of the biosimilar product has been filed, and (2) as a factual matter, a cognizable case or controversy does not presently exist.

Sandoz argued in its opposition brief that the Biosimilar Act "provides [declaratory judgment] actions can be filed by either party upon the biosimilar manufacturer's notice of commercial marketing, which Sandoz has given here."  But the court disagreed:

First, as set forth in the section on which Sandoz relies, a "notice of commercial marketing" is required to be given by the applicant to the reference product sponsor "not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k)."  Here, Sandoz cannot, as a matter of law, have provided a "notice of commercial marketing" because, as discussed above, its etanercept product is not "licensed under subsection (k)."  Second, even after an applicant provides a "notice of commercial marketing," it cannot bring an action for declaratory relief until, at a minimum, it has complied with its obligations under § 262(l)(2)(A).

In addition, the court determined that Sandoz failed to establish a "case or controversy" as required by Article III of the Constitution.  Here, the court found that Amgen never threatened to sue Sandoz and that Sandoz did not submit "evidence demonstrating [Amgen], by some means other than an express threat to sue, subjected Sandoz to an 'immediate' threat of injury."  Further, citing two Federal Circuit cases in support, the court found that "Sandoz's allegation that it intends in the future to file an application with the FDA is insufficient to create a case or controversy."

Ever since the Biosimilar Act was passed in 2010, litigators have studied the patent litigation provisions of the Act and debated which strategies to pursue.  The court's interpretation of the Act in this case is significant--particularly since it is the first.  If other district courts interpret the Act in the same way, certain litigation strategies will be off the table.

PTAB Finds Counterclaims Alleging Infringement Within § 315(b) and Declines to Institute Inter Partes Review of Cardiovascular Diagnostic Device Patent

St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., IPR2013-00258 (PTAB)

    by Robert F. Kappers and Herbert D. Hart III

On October 16, 2013, the Patent Trial and Appeal Board issued a decision denying the petition for inter partes review filed by St. Jude Medical targeting Volcano Corp.'s U.S. Patent No. 7,134,994 ("the '994 patent").  The '994 patent relates to a multifunctional invasive cardiovascular diagnostic measurement device.

The Board denied St. Jude's petition because it was filed more than one year after Volcano served a counterclaim asserting a claim of infringement in a prior district court suit between the parties (St. Jude Medical, Cardiology Division, Inc., et al. v. Volcano Corp., 1:10-cv-00631 (D. Del.)).

Specifically, the Board found that Volcano's counterclaim alleging infringement of the '994 patent is a "complaint alleging infringement of the patent" within the meaning of the one-year statutory time bar of 35 U.S.C. § 315(b).  In adopting a broad interpretation of § 315(b), the Board relied on legislative history indicating Congress' intent to provide a quick and cost effective alternative to litigation:

Nothing in the legislative history indicates that Congress intended to apply the § 315(b) time limit to some, rather than all, accused infringers.  Construing "complaint" in § 315(b) restrictively, to exclude counterclaims that present allegations of infringement, would have just that effect.  It would leave a patent open to serial attack, even after years of patent infringement litigation, in the event that the accused infringer is accused of infringement only via a counterclaim.

This decision comes as further development of the Board’s previous interpretation of § 315(b) in Accord Healthcare v. Eli Lilly and Co., IPR2013-00356, where the Board found that the filing of a second complaint in the second of two prior lawsuits did not reset the time for filing a petition.

St. Jude's petition can be found here, and Volcano's patent owner response can be found here.