Orange Book Blog

Cephalon Ordered to Pay Anchen's Attorney Fees for Maintaining Suit Despite Having No Evidence of Infringement

In re: Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, No. 09-MD-2118-SLR (D. Del.)

Under 35 U.S.C. § 285, a court may, in "exceptional cases," award attorney fees to the prevailing party.  In an Order filed on January 12th, the district court presiding over the ANDA litigation involving AMRIX granted Anchen's motion for attorney fees, concluding that Cephalon's decision to maintain its suit against Anchen after it knew that Anchen's ANDA product did not infringe made the case exceptional.

Anchen filed its motion for attorney fees last May, after the district court granted final judgment of noninfringement in favor of Anchen.  Anchen argued in its motion that Cephalon's suit was baseless from the start, but the court disagreed:

Plaintiffs' complaint provides the basis on which the suit was filed.  Plaintiffs' complaint explains that "the Anchen Paragraph IV Notice letters . . . fail to comply with the requirements of 21 U.S.C. § 355(j)(2)(B)(iv)(II) because, inter alia, they contain very limited information about the generic formulation for which Anchen filed ANDA No. 91-281.  For example, the Anchen Paragraph IV Notice letters do not list any of the ingredients in the proposed generic versions."  Having been unable to come to an agreement with Anchen on the conditions under which they could procure or view a copy of ANDA No. 91-281, plaintiffs opted to file suit in order to obtain the information (and then prove that infringement was occurring as suspected).

The court decided, however, that Cephalon should have dropped its suit once it knew that Anchen's ANDA product was noninfringing.  Cephalon argued that it was within its rights to maintain the suit because Anchen was proceeding to trial on a "sham" formulation, and if a final judgment of noninfringement was granted to Anchen "the Court would no longer have had jurisdiction to police Anchen's compliance with its promise not to reformulate, and Plaintiffs would have had no assurance that Anchen would not immediately reformulate its product in a manner that would infringe by, for example, simply copying Plaintiffs' product in order to obtain quick FDA approval."

The court rejected Cephalon's argument, concluding, "there are safeguards against the end-run [Cephalon] feared."  Specifically, according to the court, "when an ANDA filer makes an alteration or amendment to its application, for example, by changing the drug's formula, the FDA requires ANDA filers to provide a new Paragraph IV Certification and re-notice the patent holder and drug owner."  The court dismissed Cephalon's concern "that another Paragraph IV Certification may not be required by the FDA" because Cephalon failed to explain "why or under what circumstances they would not be re-noticed (and, thus, have another opportunity to sue for infringement) if Anchen reformulated its drug."  The court concluded, "Without some explanation of how this fear would become reality, the court declines to accept plaintiffs' justification for maintaining suit."

Accordingly, the court granted Anchen's motion for fees.  The court cited AstraZeneca v. Dr. Reddy's in support of the rule that maintenance of a suit despite a lack of evidence of infringement makes a case exceptional.  The court assessed attorney fees from September 2010, "a date by which plaintiffs opted to maintain a suit with clear knowledge that Anchen's product, as formulated, did not infringe."  In support of its decision to assess fees from September 2010 forward, rather than from the beginning, the court explained, "plaintiffs did not originally file a frivolous suit; the suit became unjustifiable once plaintiffs declined to acknowledge that there was no need to maintain the suit in order to police Anchen's conduct."

RELATED READING:

• OBB post on May 2011 trial decision

ACI "Patent Reform for Life Sciences Companies" Conference, New York, Jan. 31 - Feb. 1

American Conference Institute will be holding a conference on "Patent Reform for Life Sciences Companies" in New York, NY, January 31st to February 1st, 2012.  According to ACI, this is "the critical industry forum on the Leahy-Smith America Invents Act."

The agenda features the following presentations:

• A keynote address by Robert Stoll, Commissioner for Patents, USPTO
• "The Timeline of Enactment: Identifying What Needs to be Done Now and Planning for Future Changes"
• "First to File: Developing an Updated and Comprehensive Intellectual Property Strategy in the New Race to the Patent Office Regime"
• "Examining the Consequences of Changes to Inventorship Provisions"
• "Prior Art and Public Disclosure: Identifying What Constitutes Prior Art Under the Revised Section 102"
• "Expediting the Examination Process by Strategically Using the Different Examination Tracks, Including the New Prioritized Examination Option"
• "The Ghost of Best Mode: Balancing the Seemingly Contradictory Provisions to Maximize IP Protection"
• "Preparing for Emerging Patent Challenges Under the New Post-Grant Review System"
• "The Different World of Inter Partes Review"
• "Examining the Potential Ramifications of Patent Reform on Hatch-Waxman Litigation and the Brand/Generic Wars"
• "Specific Considerations for Universities, Non-Profit Institutions and Micro-Entitites"
• "Analyzing the Potential Impact of the 'Miscellaneous Provisions' on Life Sciences Companies"

In addition, ACI is offering an optional pre-conference primer on January 30th:  "Patent Reform 101: Overview of the Fundamental Provisions in the America Invents Act."

For more information or to register, please visit the conference website.  To receive a $200 discount on registration fees, use discount code OBB 200.

Federal Circuit Vacates Preliminary Injunction Entered Against Mylan in Doxycycline Case

Warner Chilcott Labs. v. Mylan Pharms. Inc., No. 2011-1611 (Fed. Cir.)

An interesting development in ANDA litigation this year has been the increasing frequency with which district courts have granted preliminary injunctions or temporary restraining orders against ANDA filers--even, in some cases, after the district court has found after a full trial that the patents in suit are invalid.  In a decision Monday, the Federal Circuit vacated a preliminary injunction against Mylan because the district court "relied on disputed facts in granting the preliminary injunction without holding an evidentiary hearing, and failed to make any findings as to Mylan's invalidity defense."

In this case, involving Mylan's ANDA for a generic version of DORYX (doxycycline hyclate), Warner Chilcott sued Mylan for infringement of U.S. Patent No. 6,958,161, directed to a tablet formulation of doxycycline.  In August 2011, just one month before the 30-month stay would expire, Warner Chilcott filed a motion for a temporary restraining order and preliminary injunction against Mylan.  The district court heard arguments from counsel, but did not conduct an evidentiary hearing and did not hear live testimony from any of the witnesses.  The district court granted the preliminary injunction, but "did not address Mylan's arguments that the '161 Patent is invalid because of anticipation or obviousness, though it did acknowledge that those claims had been asserted."  The Federal Circuit granted Mylan's request for expedited briefing and heard oral arguments on November 22, 2011.

At the outset of its analysis, the Federal Circuit cited the four well-known requirements for a preliminary injunction, as established by the Supreme Court, and noted that a preliminary injunction "is an extraordinary remedy never awarded as of right."  The court then cited its own precedent as establishing that when an accused infringer has challenged the validity of a patent in response to a motion for a preliminary injunction, "the trial court first must weigh the evidence both for and against validity that is available at this preliminary stage in the proceedings."  The Federal Circuit found:

In this case, the district court abused its discretion in two ways.  The court: (1) failed to hold an evidentiary hearing despite acknowledging that the decision turned on disputed factual issues; and (2) did not weigh the evidence or make any findings as to Mylan's invalidity challenge.

Interestingly, while the Federal Circuit vacated the preliminary injunction, it suggested that a temporary restraining order might be appropriate:

Although the district court's entry of the preliminary injunction in this case is contrary to controlling authority, we are mindful of the court's demanding schedule and desire to avoid duplicating its efforts with a soon-to-be-scheduled bench trial in this case.  If doing so serves judicial efficiency, the district court may consider entering a temporary restraining order after this court's mandate issues, then consolidating the preliminary injunction hearing with the bench trial on the merits, assuming that can occur within the timeframes mandated by the Federal Rules of Civil Procedure.

Discounted Registration for "Pharma IPR India 2012" Ending Soon

As we previously announced, CPhI will be holding a three-day conference on pharmaceutical intellectual property rights in Mumbai, India from January 31 through February 2, 2012.  Day 1 of the conference will focus on pharma IPR in India; Day 2 will focus on pharma IPR in the United States; and Day 3 will focus on pharma IPR in Europe, Japan, Brazil and China.  Click here for the complete agenda, which was recently updated.

Sign up now to take advantage of discounted registration fees.  Register by Friday, December 9, 2011 to receive a discount of INR 13,000 / US $300; register by Friday, January 13, 2012 to receive a discount of INR 7,000 / US $150.  For more information, please visit the conference website.

Federal Circuit Affirms Invalidity of Teva's Patent on Rosuvastatin Formulation

Teva Pharm. Indus. Ltd. v. AstraZeneca Pharms. LP, No. 2011-1091 (Fed. Cir.)

In a precedential opinion filed today, the Federal Circuit affirmed the invalidity of Teva's U.S. Patent No. RE39,502 under 35 U.S.C. § 102(g)(2).  Teva's '502 patent claims a rosuvastatin formulation comprising "a stabilizing effective amount" of crospovidone.  This post describes the district court decision and provides background on the case.

There was no dispute in this case that AstraZeneca manufactured rosuvastatin tablets falling within the scope of the '502 patent claims before Teva conceived and reduced to practice its claimed invention.  Instead, the principal dispute was whether, to prove prior invention under § 102(g)(2), AstraZeneca was required to prove that it "appreciated the stabilizing effect of crospovidone in its drug formulation."

In affirming the district court's answer to that question in the negative, the Federal Circuit traced a line of cases that it said demonstrate "consistent applications of the same rule."  According to the court, "[t]o establish prior invention, the party asserting it must prove that it appreciated what it had made."  In other words, an "unrecognized, accidental duplication" is not a prior invention.  But, the court continued, "[t]he prior inventor does not need know everything about how or why its invention worked.  Nor must it conceive of its invention using the same words as the patentee would later use to claim it."

Applying the rule to this case, the court explained:

AstraZeneca had to appreciate that the [formulation] it asserted as its invention was stable and what the components of this formulation were.  There is no question that AstraZeneca had this appreciation.  However, AstraZeneca did not need to appreciate which component was responsible for the stabilization.

Teva made other arguments as well, but the Federal Circuit summarily disposed of them.

District of Delaware Rules that API Manufacturer Cannot Be Sued Under Section 271(e)(2)

    by John L. Abramic

Leo Pharma A/S v. Tolmar, Inc., No. 10-269-SLR (D. Del.)

LEO Pharma A/S sued Tolmar, Inc. in the District of Delaware for patent infringement under 35 U.S.C. § 271(e)(2) after Tolmar submitted an ANDA for a generic version of DOVONEX, certifying that a certain LEO Pharma patent is invalid or would not be infringed by Tolmar’s ANDA products.  Subsequently, LEO Pharma sought to amend its complaint to, among other things, add Teva Pharmaceutical Industries Ltd. as a defendant.

LEO Pharma asserted that Teva manufactures the API used in Tolmar's ANDA products and submitted the Drug Master File for the API to the FDA for reference in Tolmar’s ANDA.  According to the court, LEO Pharma asserted that Teva was liable for infringement under three theories:

1. "pursuant to 35 U.S.C. § 271(e), because Teva participated in, contributed to, aided, abetted and/or induced the submission of Tolmar's ANDAs";
2. "pursuant to 35 U.S.C. § 271(a), (b), (c) and/or (g), if Teva 'commercially manufactures, uses, offers for sale or sells,' or 'imports . . . into the United States, or induces or contributes to any such conduct,' the API of the ANDA products"; and
3. "pursuant to 35 U.S.C. § 271(b), because Teva has 'engag[ed] in a cooperative venture with Tolmar to submit the ANDA and [has] incorporate[d] by reference Teva's DMF thereto to the FDA to obtain approval to engage in the commercial manufacture, use, sale and/or importation’ of Tolmar's ANDA products. . . ."

In a Memorandum Order last week, the court granted the motion with respect to the second theory, but denied the motion to the extent that LEO Pharma's claims related to the filing of the ANDAs.  The court stated that "an API manufacturer like Teva cannot be held liable for 'inducing' the submission of the ANDAs."  The court also found that Teva was not involved in preparing the ANDAs such that it could be held liable under section 271(e)(2):

Although "[p]arties 'actively involved' in preparing an ANDA are deemed to have 'submit[ted]' the ANDA," Cephalon, Inc. v. Watson Pharmaceuticals, Inc., 629 F. Supp. 2d 338, 349 (D. Del. 2009), I decline to extend liability under § 271(e)(2) to third parties for work protected under § 271(e)(1).  In this regard, I conclude that the allegation that Teva "participated in the work related to the submission" is distinguishable from actually preparing the ANDA.

In doing so, the court recognized a fine line between "engaging in protected work under § 271(e)(1), which 'enables generic manufacturers to test and seek approval to market' ANDA products, Warner-Lambert, 316 F.3d at 1358, and being 'actively involved in preparing the ANDA,' e.g., by 'contributing employees to the various teams responsible for preparing the ANDA,' and having employees of each prepare and execute ANDA-related documents, Cephalon, 629 F. Supp. 2d at 349. . . ."

CPhI "Pharma IPR India 2012" Conference, Mumbai, January 31 to February 2, 2012

CPhI Conferences will hold a three-day conference on pharmaceutical intellectual property in Mumbai, India, from January 31, 2012 to February 2, 2012.  The first day of the conference will focus on India; the second day will focus on the United States; and the third day will focus on the rest of the world, including Europe, Japan and emerging markets.  I have the honor of speaking on the Hatch-Waxman Act on Day 2.

The complete agenda is as follows:

Day 1: India

• Patent Scenario in India
• Patentability in the Pharmaceutical Industry
• Section 3(d) of the Indian Patent Act
• Data Exclusivity
• Compulsory Licensing
• Patent Oppotions in India--Current Trends
• Trademarks and Copyrights

Day 2: United States

• The United States Patent System
• The Hatch-Waxman Act
• Paragraph IV Certifications
• The America Invents Act
• Biosimilars in the United States
• Freedom to Operate in the United States
• Doctrine of Equivalents
• Polymorphs

Day 3: Europe, Japan and Emerging Markets

• Patent Systems in Europe, Japan and Emerging Markets
• Supplementary Protection Certificates
• Biosimilars in Europe
• Freedom to Operate in the EU
• Doctrine of Equivalents in the EU
• Japanese Patent System

For more information or to register, please visit the conference website.

ACI "Advanced Forum on Biotech Patents" Conference, Boston, Nov. 30 - Dec. 1

American Conference Institute will be holding its 13th Advanced Forum on Biotech Patents conference at the Omni Parker House hotel in Boston, MA, November 30th to December 1st.  ACI subtitles this conference, "practical strategies for prosecuting and litigating biotech patents in a rapidly shifting legal environment."

The agenda includes many presentations that will prove valuable:

• Protection vs. Exploitation: Preparing for the Next Chapter in the Development of Biosimilars
• Examining the Potential Effect of Patent Reform on PTO Practices and its Impact on Biotech Patents
• Preparing for a Radical Overhaul of the U.S. Patent System: The Impact of Reform on Biotech Patent Strategies
• Examining 35 U.S.C. 101 Subject Matter Patentability in the Wake of Myriad and Prometheus
• Microsoft v. i4i and Stanford v. Roche: Understanding Their Collective Implications for the Biotechnology Industry
• Confronting the Written Description Requirement Post-Centocor and Evaluating its Impact on Biotech Patent Practices
• The Emergence of the New Obviousness Standard and its Impact on Biotech Patenting: Taking a Closer Look at Obviousness-Type Double Patenting
• Inequitable Conduct Following Therasense: Assessing its Significance for Biotech Patent Litigation
• International Filing: Strategic Considerations and Advanced Tactics for Patenting Biotech Inventions Abroad
• Analyzing and Resolving the Difficulties of Claiming Joint Infringement After Akamai and McKesson
• Creating Favorable Patent Tactics in Developing Countries

In addition, ACI is offering an option pre-conference session in the morning of November 30th that will feature two Supervisory Patent Examiners from teh USPTO:  "Integrating Changes at the PTO into Biotech Patent Practices."  ACI is also offering optional post-conference Master Class on December 2nd:  "Successful and Practical Strategies for Patenting Antibodies."

For more information or to register, please visit the conference website.  To receive a $200 discount on registration fees, use discount code OBB 200.

The America Invents Act: a Three-Page Guide and Detailed Presentation

    by Scott P. McBride

President Obama signed the America Invents Act last Friday, bringing the most sweeping reform to U.S. patent law since 1952.  The 150-page act makes dramatic changes to many aspects of patent law, including (1) the definition of prior art under 35 U.S.C. § 102, (2) procedures available at the Patent Office to challenge applications, (3) defenses available in patent litigation, (4) limits on patent-eligibility and patentability for certain subject-matter, and (5) marking and false marking.

Provided here are a three-page guide to the Act, as well as a detailed presentation on the many sections of the Act.  For your convenience, the presentation's Table of Contents is hyperlinked to the subsequent slides, and there are hyperlinks back to the Table of Contents in the lower right-hand corner of each slide.

In addition, the USPTO released an "effective date" table last Friday, which patent practitioners will certainly find useful.  The table indicates the dates on which each provision of the America Invents Act takes effect.

Federal Circuit Confines 271(e)(1) Safe Harbor to Pre-Approval Activities

Classen Immunotherapies v. Biogen IDEC et al., Nos. 2006-1634, -1649 (Fed. Cir. 2011)

In a 2-1 opinion today, the Federal Circuit held that the Section 271(e)(1) safe harbor "does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained."

35 U.S.C. § 271(e)(1) states:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States . . . a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs . . . .

The law was passed as part of the Hatch-Waxman Act in 1984, and while the purpose of the law was to shield generic drug makers from claims of patent infringement during the generic drug development process, the Supreme Court has interpreted the law much more broadly.

For instance, in Eli Lilly v. Medtronic, 496 U.S. 661 (1990), the Court held that the safe harbor applies not only to pharmaceutical development, but also to medical device development.  More recently, in Merck v. Integra, 545 U.S. 193 (2005), the Court held that the safe harbor applies not only to generic pharmaceutical development, but rather to "all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA."  In addition, the Court stated, "there is simply no room in the statute for excluding certain information from the exemption on the basis of the phase of research in which it is developed or the particular submission in which it could be included."  In both Lilly and Merck, the Supreme Court reached its conclusions based on the plain language of the statute, which is intentionally broad.

In this case, Classen accused Biogen IDEC and GlaxoSmithKline of infringing its patents claiming methods of immunization on the ground that both companies participated in post-approval studies "to evaluate suggested associations between childhood vaccinations, particularly against hepatitis B and Haemophilus influenza . . . and risk of developing type 1 diabetes; and to determine whether timing of vaccinations influences risk."  The district court granted summary judgment that these activities are within the Section 271(e)(1) safe harbor.

On appeal, Classen argued "that this statute, as enacted and intended, and as judicially interpreted, is limited to activities conducted to obtain pre-marketing approval of generic counterparts of patented inventions, before patent expiration."  Biogen and GSK argued, on the other hand, that their participation in studies evaluating risks associated with different vaccination schedules is reasonably related to their requirement under, e.g., 21 C.F.R. § 601.70 and 21 C.F.R. § 600.80, to review and report adverse events to the FDA.

The majority opinion, authored by J. Newman and joined by J. Rader, found in favor of Classen, stating:

Classen is correct, for § 271(e)(1) provides an exception to the law of infringement in order to expedite development of information for regulatory approval of generic counterparts of patented products.  The statute does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained.

The majority opinion then proceeds to review the legislative history of the Hatch-Waxman Act, which obviously focused on the then-new abbreviated approval process for generic drugs.  While the majority opinion quotes from both Eli Lilly v. Medtronic and Merck v. Integra, it ignores how broadly the Supreme Court interpreted the safe harbor in those cases.  Rather, according to the majority opinion, "every decision examining the statute has appreciated that § 271(e)(1) is directed to premarketing approval of generic counterparts before patent expiration."

But as the dissent by J. Moore notes, regardless of what the statute "is directed to" (whatever that means), there was no dispute in this case that the safe harbor applies to pre-approval activities.  J. Moore wrote:

The majority cites extensively from the legislative history in an attempt to justify its construction.  But these citations miss the point entirely.  There is no dispute that § 271(e)(1) covers pre-approval studies, as the legislative history indicates.  None of the legislative history cited by the majority, nor the cases it references, speak to the question at issue here -- whether the statute as enacted also covers post-approval activities.  The question is not whether Congress intended to protect pre-approval activity -- but whether the enacted legislation covers more than just pre-approval activity.  The language Congress chose to enact and that was signed by the President is plain on its face.  There is no "pre-approval" limitation.

The other main issue addressed in the opinion concerns the patent-eligibility of Classen's claims under 35 U.S.C. § 101.  Patently-O has an excellent discussion of that portion of the opinion.