Source: https://www.orangebookblog.com/hatchwaxman_litigation/index.html
Timestamp: 2019-04-20 06:53:35+00:00

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In an opinion last week, Judge Stark of the District of Delaware granted Teva's motion for judgment as a matter of law that GSK failed to present sufficient evidence to support a jury verdict that Teva induced infringement of U.S. Patent No. RE40,000. Judge Stark's decision effectively vacates a jury award of more than $200 million to GSK.
Judge Stark held a seven-day jury trial last year. The jury found that Teva willfully induced infringement of certain claims of the '000 patent during two time periods: (1) January 2008 to April 2011 (the "skinny label" period); and (2) May 2011 to June 2015 (the "full label" period). The jury awarded $234 million in lost profits and $1.4 million in reasonable royalty damages to GSK. The parties then filed post-trial motions.
The Court agrees with Teva that neither sufficient nor substantial evidence supports the jury's finding of inducement. GSK failed to prove by a preponderance of the evidence that "Teva's alleged inducement, as opposed to other factors, actually caused the physicians [i.e., as a class or even at least one of them] to directly infringe," by prescribing generic carvedilol and to do so for the treatment of mild to severe CHF. Without proof of causation, which is an essential element of GSK's action, a finding of inducement cannot stand.
The court's decision that no reasonable jury could have found that Teva induced infringement of the '000 patent during the skinny label period is not surprising. But the court's decision of no inducement during the "full label" period is unexpected.
In addition to the knowledge and experience that ordinarily skilled cardiologists had acquired by July 2007 about the benefits of treatment with carvedilol, such doctors had access to American Heart Association and American College of Cardiology guidelines, carvedilol research studies published in the New England Journal of Medicine, The Lancet, and the British Heart Journal, GSK's own Coreg® label and product insert, and GSK's extensive promotional activity--totaling nearly $1 billion--which included sending doctors to hospitals, giving seminars, and detailing, marketing, and advertising Coreg®.
Further, Teva showed that once generic carvedilol entered the market in September 2007, and continuing beyond 2007, doctors continued prescribing carvedilol (be it Coreg® or a generic) in the same manner as they had prior to the generics' entrance, as they based their prescription decisions on the various factors addressed above without relying on Teva's--or any other generic manufacturers'--label. GSK's expert, Dr. McCullough, testified that he had not read Teva's generic label before he started writing prescriptions for carvedilol. As GSK concedes, prior to the generics' entrance into the market in 2007, physicians already knew how to use carvedilol for treating CHF. Three cardiologists testified at trial . . . and all three agreed that even in September 2007, when generic companies (including Teva) began selling carvedilol, doctors relied on guidelines and research, as well as their own experience, in addition to GSK marketing. None viewed generic labeling, including Teva's label, as impacting prescribing behavior.
As Teva correctly notes, no direct evidence was presented at trial that any doctor was ever induced to infringe the '000 patent by Teva's label (either skinny or full). There was no direct evidence that Teva's label caused even a single doctor to prescribe generic carvedilol to a patient to treat mild to severe CHF. Hence, in order to uphold the verdict, the Court must find in the record substantial evidence to render it reasonable for the jury to have inferred that at least one doctor was so induced. GSK, as the verdict winner, is entitled to the benefit of all reasonable inferences that may be drawn from the evidence presented to the jury. The Court's determination, however, is that--given the dearth of evidence that doctors read and understand and are affected by labels, and given the vast amount of evidence that doctors' decisions to prescribe carvedilol during the relevant periods were influenced by multiple non-Teva factors--such an inference was an unreasonable one for the jury to have drawn.
For instance, GSK directs the Court to Sanofi v. Watson Laboratories Inc., 875 F.3d 636, for the proposition that the marketing of a generic drug with labeling that encourages infringement can be viewed as causing infringement despite the fact that the innovator company published the results of clinical studies and promoted the patented use. That case does not persuade the Court to reach a different conclusion than described above. Sanofi involved the ordinary Hatch-Waxman framework, where a claim of induced infringement is filed before the generic has launched its product, and necessarily, before the generic has even attempted to communicate with any direct infringer. In those cases, as this Court held during earlier portions of this case, the focus must be on intent, rather than actual inducement. Here, by contrast, GSK filed its case almost seven years after Defendants launched their generic carvedilol products into the market. Hence, GSK's inducement claims are not premised on a hypothetical, but instead must be supported by sufficient evidence as to what actually happened during the relevant time period. This Court has decided that reliance on a label and speculation about what may occur in the future cannot substitute for actual evidence about what has actually occurred in the past when, as in this case, there has been a period of actual, past conduct that is pertinent to infringement.
This case is relatively unique--particularly because it involved an at-risk launch. It will be interesting to see how the case affects litigation strategies used in other ANDA cases involving method-of-use patents. And we will certainly be paying attention to the inevitable appeal.
Where is an ANDA applicant subject to personal jurisdiction when the only act of infringement is "artificial" infringement under 35 U.S.C. § 271(e)(2)(A)? This question has generated a great deal of interest recently--especially since the Supreme Court's Daimler decision two years ago. In a precedential opinion on Friday, the Federal Circuit answered the question and determined that personal jurisdiction exists in any state where the ANDA applicant intends to market its product--essentially everywhere in the United States.
Mylan filed ANDAs in connection with Ampyra® (dalfampridine), Onglyza® (saxagliptin), and Kombiglyze® (saxagliptin/metformin). Acorda markets Ampyra® for the treatment of multiple sclerosis while AstraZeneca markets Onglyza® and Kombiglyze® for the treatment of type 2 diabetes. Both Acorda and AstraZeneca sued Mylan in Delaware, and Mylan filed motions to dismiss for lack of personal jurisdiction in both cases.
Both motions were denied. In the dalfampridine case, Judge Stark held that Mylan was subject to both general and specific personal jurisdiction. In the saxagliptin case, Judge Sleet held that Mylan was subject to specific personal jurisdiction, but not general personal jurisdiction. Mylan sought and obtained interlocutory review by the Federal Circuit of both of those orders. The appeal attracted six amicus filings, including briefs from GPhA, Teva, BIO, and PhRMA.
The Federal Circuit majority opinion limited its analysis to specific personal jurisdiction. The court began with the rule from International Shoe: specific personal jurisdiction may be exercised over a defendant "when the defendant has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Further, "the minimum contacts requirement focuses on whether the defendant's suit-related conduct creates a substantial connection with the form State."
In short, the Federal Circuit held that specific personal jurisdiction may be exercised over Mylan because "the minimum-contacts standard is satisfied by the particular actions Mylan has already taken--its ANDA filings--for the purpose of engaging in that injury-causing and allegedly wrongful marketing conduct in Delaware."
In a formulation worded to address suits for retrospective relief based on past acts, the Supreme Court has said that the minimum-contacts requirement is met when the defendant "purposefully directed" activities at the forum, and the litigation results from alleged injuries that "arise out of or relate to" those activities.
Mylan's ANDA conduct is "suit-related" and has a "substantial connection" with Delaware because the ANDA filings are tightly tied, in purpose and planned effect, to the deliberate making of sales in Delaware (at least) and the suit is about whether that in-State activity will infringe valid patents. Thus, Mylan's ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs. Delaware is undisputedly a State where Mylan will engage in that marketing if the ANDAs are approved. And the marketing in Delaware that Mylan plans is suit-related: the suits over patent validity and coverage will directly affect when the ANDA can be approved to allow Mylan's Delaware marketing and when such marketing can lawfully take place.
Although the majority opinion did not address the issue of general personal jurisdiction, Judge O'Malley's concurring opinion did. Judge O'Malley wrote that a straightforward application of Supreme Court precedent also establishes general personal jurisdiction in these cases. It may be, however, that the question of general personal jurisdiction is now moot given the court's analysis of specific personal jurisdiction.
In an opinion last week, the U.S. District Court for the District of New Jersey stymied what appears to be an attempt by Purdue Pharma to prevent TWi Pharmaceuticals from obtaining a final judgment of noninfringement of all four Orange Book-listed patents on Intermezzo® (zolpidem tartrate). A final judgment could trigger the marketing requirement of the first ANDA filer. If the first filer does not market its product within 75 days of a final judgment, it will forfeit its 180-day exclusivity.
Purdue holds the NDA for Intermezzo®, a drug used to treat middle-of-the-night insomnia. Four patents are listed in the Orange Book in connection with the NDA. By the time TWi filed its ANDA, four other ANDAs had already been filed and presumably at least one of those is entitled to 180-day exclusivity. Purdue sued TWi on only two of the patents, and granted TWi a covenant not to sue on the other two. TWi filed a DJ counterclaim for noninfringement of all four Orange Book-listed patents.
As simplified by the court, TWi's DJ counterclaim is important because it "could potentially trigger the first ANDA filer's 180-day exclusivity period. This would have the effect of expediting TWi's ability to market its generic version of Intermezzo®."
Purdue filed a motion to dismiss TWi's counterclaim, presenting three arguments that no case or controversy exists and therefore the court lacks jurisdiction: (1) the "covenant not to sue rendered moot any such controversy," (2) "the Court cannot redress TWi's alleged injury," and (3) "the dispute is not ripe in light of TWi's inability to obtain tentative approval."
In response to Purdue's mootness argument, the court stated, "[t]here is ample authority supporting the proposition that a later ANDA filer's declaratory judgment claims involving patents for which the patent holder has given a covenant not to sue are justiciable." The court therefore held that "the binding principles the Federal Circuit set forth in Dey and Caraco compel this Court to conclude that Plaintiffs' covenant not to sue TWi on the '945 and '628 patents does not moot TWi's counterclaims seeking declaratory judgment that these patents are not infringed."
With regard to whether TWi's injury is redressable, Purdue argued that "a judgment favorable to TWi on the '945 and '628 patents will not redress any injury arising from delay in TWi's ability to market its generic version of Intermezzo® because such a judgment would not independently trigger the first ANDA filer's exclusivity period as TWi has not received tentative approval from the FDA to market its generic product." In other words, Purdue argued that because "an applicant in TWi's position cannot trigger the first applicant's exclusivity period through a declaratory judgment action unless it has first received tentative approval," the court cannot redress TWi's purported injury.
The court noted that the Federal Circuit has not addressed whether a subsequent ANDA filer must first have tentative approval to maintain a declaratory judgment action like TWi's. Nevertheless, it rejected Purdue's argument based largely on Judge Dow's decision in Seattle Children's Hospital v. Akorn (N.D. Ill. 2011). The Akorn court recognized that the Hatch-Waxman Act "created a civil action to obtain patent certainty ("CAPC") that could be brought by an ANDA applicant at a time when it likely would not have tentative approval," indicating that other DJ actions similarly do not require that the ANDA filer must have tentative approval. Following Akorn, the court held that tentative approval is not required for TWi to maintain its DJ counterclaim.
Finally, the court held that the case is indeed ripe, noting that "delaying judicial consideration of TWi's counterclaims could result in depriving TWi of the ability to trigger the first ANDA filer's 180-day exclusivity period, thus causing TWi to lose profits during the period of time it is excluded from the market. Accordingly, the court found that "delay in resolving TWi's counterclaims will have an immediate and substantial impact on TWi."
Although not settled until the Federal Circuit weighs in, based on this case and Akorn it appears that the courts will permit ANDA filers to assert DJ counterclaims even before receiving tentative approval from the FDA and despite having a covenant not to sue from the patent owner.
Teva and several other generic pharmaceutical companies each submitted an ANDA seeking approval to market a generic version of Lyrica, for treating seizures and pain. In a unanimous decision last Thursday, the Federal Circuit affirmed the judgment of the U.S. District Court for the District of Delaware by finding claim 2 of U.S. Patent Nos. 6,197,819, covering the active ingredient of Lyrica, pregabalin, infringed and not invalid for lack of enablement, written description, or obviousness.
2. 4-amino-3-(2-methylpropyl) butanoic acid, or a pharmaceutically acceptable salt thereof.
The compound of claim 2 contains a single chiral center, and may exist, for example, in enantiomerically pure (R)- or (S)- forms or a racemic form, the latter containing equal quantities of both enantiomers. Lyrica and the proposed generic products each contain pregabalin, which is only the S-enantiomer of 4-amino-3-(2-methylpropyl) butanoic acid. Before the district court, the defendants asserted that claim 2 of the '819 patent should be interpreted to cover only the racemic form of 4-amino-3-(2-methylpropyl) butanoic acid (also "3-isobutyl-gamma-aminobutyric acid" or "3-isobutylGABA"). If so construed, the proposed products would not literally infringe the claim. Further, the defendants alleged that claim 2 is invalid for failing the enablement and written description requirements of 35 U.S.C. 112(a) and for obviousness under 35 U.S.C. 103 in view of three asserted prior art references.
The district court's Markman order construed claim 2 of the '819 patent to encompass all stereochemical forms of 3-isobutylGABA. The parties stipulated to infringment by the defendants' proposed products if claim 2 was found valid and enforceable, as interpreted by the district court. This appeal followed the district court's finding that claim 2 of the '819 patent was enforceable and not invalid for the reasons offered by the defendants. On appeal, the defendants asserted that the district court erred in claim construction and its findings with respect to enablement, written description, and obviousness. The Federal Circuit affirmed the district court on all issues.
With respect to claim construction and infringement, the Federal Circuit declined to read limitations into claim 2 that were not present in the claim text. After noting that the defendants' expert admitted that claim 2 covers "3-isobutylGABA in any isomeric form," the court stated that the '819 patent made clear that the patent applicants were capable of indicating when individual enantiomers and when racemic forms of compounds were intended, by using the appropriate (R,S)- or (R)- or (S)- prefixes. Nor could the court find any clear disavowal in the '819 patent that would indicate that a lack of stereochemical indication was intended to limit the disclosure to only the racemic form. In view of the lack of any stereochemical limitation within claim 2, the court upheld the district court's interpretation and finding of infringement of claim 2 of the '819 patent.
On enablement, the ANDA filers asserted that if claim 2 were interpreted to cover all compositions of 3-isobutylGABA, regardless of enantiomeric form, then the specification failed to "teach a skilled artisan how to prepare every conceivable mixture of 3-isobutylGABA’s enantiomer." However, the defendants failed to convince the court that such mixtures were anything other than routine to one of ordinary skill in the art. The court noted that the '819 patent disclosed the method for synthesizing the compound and states that the compound's "enantiomers may be prepared or isolated by methods already well known in the art." Citing In re Hogan, 559 F.2d 595, 606 (CCPA 1977), the court declined to require an applicant to disclose "a detailed recipe for preparing every conceivable permutation of the compound they invented to be entitled to a claim covering that compound."
For written description, Appellant Sun Pharmaceuticals (only) focused on a lack of disclosure by the '819 patent regarding isolation of the individual enantiomers. Sun proposed that since later application filings by the patentee indicated that enantiomer separation for 3-isobutylGABA may have been less than routine, and that the inventors admitted that at the time of filing of their original applications, they had not yet actually separated the 3-isobutylGABA enantiomers, then the applicants were not in possession of the broader claim scope. However, the court found Sun's focus on the enantiomers to be unpersuasive. Rather, the court focused on whether "relevant identifying characteristics" were provided such that "persons of ordinary skill in the art  recognize that the inventor invented what is claimed." Here, the court noted that disclosure of the claimed structure (in the absence of stereochemical definition), in vitro and in vivo data for the compound, and a method of synthesizing the compound satisfied the statutory requirements.
Finally, the ANDA applicants argued that the district court erred in finding claim 2 of the '819 patent not obvious in view of three proffered prior art references. The references were alleged to disclose that 3-isopropylGABA and other homologous compounds may have anticonvulsant activity, that 3-isobutylGABA would have been expected to have similar activity because of its close structural simlarity to the former, and that the anti-convulsant gabapentin, another 3-substituted gamma-amino butyric acid (GABA) derivative, provided motivation to try other substitutions as the 3-position of GABA.
The court applied the two-part test for obviousness of a chemical compound outlined in Eisai and Takeda by reviewing for (1) whether the asserted prior art compound would have been selected as a lead compound for further modification and (2) whether the prior art would have taught a skilled artisan to make the "specific molecular modifications" necessary to the selected lead compound to yield the claimed compound with a reasonable expectation of success.
As to the first prong, the court reiterated that more than "mere structural similarity" is necessary for a prior art compound to serve as a lead compound. Rather, other properties, such as chemical activity or potency, inform the lead compound selection. Here, the court was unmoved by the offer of either 3-isopropylGABA or gabapentin as a lead compound. The court found insufficient details in the cited art regarding properties of either compound that would have lead to their selection for further research. With respect to gabapentin, the prior art was vague as to whether the compound was in the prior art at all, and if so, whether any of its relevant properties, such as anticonvulsant activities in the context of other anticonvulsants known at the time would have highlighted the compound for further modification. For 3-isopropylGABA, the court noted that the prior art failed to teach its "mechanisms of action, including whether it has anticonvulsive properties."
Moving to the second prong, the court noted that even if either compound were selected as a lead compound, the proffered art failed to teach the precise modifications necessary to yield 3-isobutylGABA. Rather, the court noted that the cited art merely suggest "trillions" of compounds "without calling out alkyl groups in particular or singling out isobutyl specifically." The court concluded by agreeing with the district court's finding that the appellees had convincingly established the complicated and unpredictable nature of anticonvulsant field at the time of filing, thereby precluding any reasonable expectation of success in achieving anticonvulsant in 3-isobutylGABA "even if Appellants were able to establish that the prior art taught the substitution of isobutyl at GABA’s 3-position."
Divided Federal Circuit Panel Strikes Down Galderma’s Patents as Obvious—in Shifting the Burden of Production Regarding Secondary Considerations to the Patentee, Did the Majority in Fact Shift the Burden of Persuasion, Too?
On December 11, 2013, a three-judge Federal Circuit panel struck down the asserted claims of five patents belonging to Galderma Laboratories for being invalid as obvious. In Judge Sharon Prost's opinion for the court, joined by Judge William Bryson, she sought to draw a narrow distinction between shifting to the patentee the burden of production rather than the burden of persuasion, once an accused infringer has shown that the claimed invention falls within a range disclosed in the prior art. Judge Pauline Newman vociferously criticized this burden-shifting in her dissent.
5. A topically applicable pharmaceutical composition comprising 0.3% by weight of [adapalene] relative to the total weight of the composition, effective for the treatment of acne, formulated into a topically applicable, pharmaceutically acceptable medium therefor, said composition being in the form of a topically applicable, pharmaceutically acceptable aqueous gel comprising at least one carbomer gelling agent and wherein the sole anti-acne ingredient is adapalene.
In September 2009, Tolmar filed an ANDA seeking approval to market a generic version of the patented product, Differin Gel, 0.3%. In response, in January 2010, Galderma sued Tolmar for patent infringement in the United States District Court for the District of Delaware. After a bench trial, the district court ruled in favor of Galderma on several issues, including validity. On appeal to the Federal Circuit, the sole issue before the court was invalidity for obviousness under 35 U.S.C. § 103.
The Federal Circuit panel majority held that Tolmar had proven obviousness by clear and convincing evidence, and therefor reversed the district court's decision. Tolmar's obviousness argument relied primarily on three prior art references: two prior art patents ("Shroot '720 patent" and "Shroot '440 patent") and Galderma's data sheet for its earlier-marketed 0.1% adapalene gel product ("Data Sheet"). Tolmar further supported its obviousness argument with nine scientific journal articles.
The Shroot '720 patent disclosed several compositions containing a broad range of adapalene concentrations: 0.001%, 0.1%, and 1%. Similarly, claim 4 of the Shroot '440 patent listed a preferred range of 0.01 to 1% for cosmetic compounds including the inventive compounds, such as adapalene, as the active ingredient. The majority pointed out that both Shroot patents were listed in the FDA's Orange Book for Galderma's prior art 0.1% adapalene gel product and its 0.3% adapalene gel product. Although the Data Sheet disclosed simply 0.1% adapalene as an acne treatment and not a range, it also disclosed virtually every inactive ingredient listed in the asserted claims.
In addition to the three primary prior art references, Tolmar supported its obviousness argument with nine scientific journal articles that Tolmar believed showed using 0.3% adapalene for acne treatment would have been obvious to a person of ordinary skill in the art at the time of the invention. The majority noted that "many skilled artisans believed at the time of the invention that 0.1% was the optimal concentration of adapalene for the treatment of acne," a statement that Judge Newman seized upon in her dissent.
where there is a range disclosed in the prior art, and the claimed invention falls within that range, the burden of production falls upon the patentee to come forward with evidence that (1) the prior art taught away from the claimed invention; (2) there were new and unexpected results relative to the prior art; or (3) there are other pertinent secondary considerations.
To support this burden-shifting standard, the majority cited Novo Nordisk A/S v. Caraco Pharm. Labs. Ltd., 719 F.3d 1346, 1352-54 (Fed. Cir. 2013), a case bearing certain similarities to the present case: Judge Prost authored the majority opinion and Judge Newman wrote a dissenting opinion. And even though the issue in Novo Nordisk was not precisely the same—the prior art suggested an allegedly obvious combination of two drugs rather than disclosing a range—the Federal Circuit held that there is a shift to the patentee to bear "the burden of production once the court determined that the challenger has established a prima facie case of obviousness." Id. at 1354. The Novo Nordisk majority emphasized that it was not shifting the burden of persuasion, "as long is the [district] court reserved its ultimate conclusion on validity until after it considered the evidence from both sides . . . ." Id.
In applying this standard, the panel majority examined three secondary consideration factors in reaching its conclusion that the claims are invalid as obvious: (1) teaching away; (2) unexpected results; and (3) commercial success. First, the majority held that the district court "clearly erred" by finding that the prior art taught away from a 0.3% concentration, because although the prior art understanding was that 0.1% was the optimal concentration, "[a] teaching that a composition may be optimal . . . does not criticize, discredit, or otherwise discourage investigation into other compositions," and therefore does not qualify as a "teaching away." Second, the majority found that there were no unexpected results because although "the expected result was an increase . . . in . . . certain side effects[,] [t]he failure of that . . . increase to materialize, though unexpected, constitutes a only a difference in degree from the prior art results." Third, the majority discounted the commercial success of Galderma's 0.3% gel product because "[t]he now expired Shroot patents blocked the market entry of 0.3% adapalene products until their expiration in 2010," which meant that "no entity other than Galderma could have successfully brought . . . 0.3% to market prior to 2010."
In her dissent, Judge Newman accused her colleagues of "distort[ing] the burdens of proof and production, ignor[ing] the applicable standard of proof and rely[ing] on their own factual determinations and creative theories of law . . . ." In doing so, she stated, the panel majority "places on the patentee the burden of establishing patentability based on 'secondary considerations.'" She suggests that the majority's standard, quoted above, does not shift only the burden of production, but the burden of persuasion, too, because the majority held that Tolmar had met its evidentiary burden simply by demonstrating that "the invention fell within a broad range disclosed in the prior art . . . ." In addition, Judge Newman was clearly bothered by the majority's lack of deference to the district court, which "applied the correct law to a vast body of evidence, most of which is not discussed by the panel majority."
Judge Newman also analyzed the secondary consideration factors of "teaching away" and "unexpected results." First, she relied upon the district court's finding (based on "prior art" and "expert testimony presented by both sides") that the prior art as a whole taught away from increasing the adapalene concentration above 0.1%. Second, Judge Newman found no clear error in the district court's holdings that: (a) it was "unexpected that the tolerability profile of 0.3% adapalene was not statistically different from that of 0.1% adapalene"; and (b) that the difference was "in kind, not in degree," because Galderma's products "violated the trend" of exhibiting "increased adverse side effects with increased concentration."
It will be interesting to see whether Galderma petitions for en banc review of this opinion in light of the potentially controversial burden-shifting standard adopted by the panel majority.
On November 22, 2013, the U.S. District Court for the District of Delaware issued a Final Judgment and Permanent Injunction barring Exela from manufacturing a generic version of OFIRMEV®, which is an injectable liquid acetaminophen composition. Judge Leonard Stark held that all fourteen asserted claims from the two patents in suit were not invalid and would be infringed by Exela's generic product. Judge Stark's reasoning was revealed in his November 14 Memorandum Opinion which was unsealed on November 22.
Plaintiff Cadence Pharmaceuticals, Inc. ("Cadence") holds approved NDA No. 022450 for OFIRMEV®, which was approved by the U.S. Food and Drug Administration in November 2010. Plaintiff SCR Pharmatop ("Pharmatop") is a French civil law partnership that owns U.S. Patent Nos. 6,028,222 ("the '222 patent") and 6,992,218 ("the '218 patent"), which are directed to, respectively, a formulation of, and a method for preparing, a liquid acetaminophen (or paracetamol) composition. Paracetamol is the name used outside of the United States for acetaminophen. Cadence is a Delaware corporation based in California that has an exclusive license to the '222 and '218 patents.
In 2011, Cadence and Pharmatop sued Exela Pharma Sciences, LLC, Exela Pharmsci, Inc., and Exela Holdings, Inc. (collectively, "Exela") for patent infringement after Exela notified the plaintiffs that it had filed ANDA No. 203092 seeking regulatory approval for a generic version of OFIRMEV®.
Cadence and Pharmatop had also sued Perrigo Company, and its subsidiaries Paddock Laboratories, Inc. and Paddock Laboratories, LLC. Each of these three parties were dismissed from the suit by a joint stipulation of the parties after the parties settled and entered into a license agreement. Cadence announced in November 2012 that, under the license agreement, Perrigo has the exclusive right of first refusal to negotiate an agreement with Cadence to market an authorized generic version of OFIRMEV® in the United States if Cadence elects to launch an authorized generic version of the product.
After construing the claims in August 2012, the Court conducted a seven-day bench trial in May and July of 2013.
At trial, Cadence and Pharmatop successfully proved by a preponderance of the evidence that Exela's generic version of OFIRMEV® literally infringed all ten asserted claims of the '222 patent. Despite Exela's arguments to the contrary, the plaintiffs successfully proved that in Exela's generic product, sodium ascorbate acted as a "buffering agent" and mannitol acted as a "free radical scavenger" (i.e., an antioxidant). This meant that Exela's generic product met each of the asserted claim limitations.
Although Cadence and Pharmatop failed to prove literal infringement of any of the four asserted claims of the '218 patent, the plaintiffs succeeded under the doctrine of equivalents. The court found no literal infringement because independent claim 1 required the solution to have a dissolved oxygen content of greater than 2.0 ppm prior to the deoxygenation step. Because the evidence at trial showed no substantial difference based on the time at which the oxygen content is reduced to below 2.0 ppm, the court held that Exela infringed under the doctrine of equivalents.
To invalidate the '222 patent, Exela argued that three pieces of prior art—Greek Patent Application No. 870101510, Korean Patent No. 1993-011994, and U.S. Patent No. 5,270,050—rendered the '222 patent anticipated or obvious. Excela's anticipation argument failed because Exela was unable to convince the court that the prior art disclosed a "stable" liquid formulation, as recited in claim 1, the only independent claim at issue in the '222 patent. Exela's obviousness argument failed for the same reason and additionally because the court was persuaded that each of the following secondary considerations supported a finding of nonobviousness: (1) unexpected results, (2) satisfaction of an unmet need, (3) failure of others, (4) commercial success, (5) successful licensing, and (6) praise of others.
Exela was similarly unable to win its argument that the '218 patent was invalid as obvious in view of the '222 patent combined with an article from the 1978 Journal of Pharmaceutical Studies. Importantly, the 1978 article concerned the oxidative degradation of pyrogallol, which is highly sensitive to oxidation, rather than paracetamol, which is not. The court was unconvinced by Exela's argument for two reasons. First, the court found independent claim 1 was valid and nonobvious given the technical differences in degradation of paracetamol compared to the degradation of pyrogallol (hydrolysis instead of oxidation), as well as the technical difficulties of deoxygenation. Second, Cadence and Pharmatop persuaded the court that all six secondary considerations listed above supported the nonobviousness of the '222 patent.
Based on its findings, the court enjoined Exela from producing its generic version of OFIRMEV® until the '222 and '218 patents expire: August 5, 2017 for the '222 patent and June 6, 2021 for the '218 patent.
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.

References: v. 
 § 271
 v. 
 § 103
 art 0
 v. 
 Application No. 870101510