Opinion ID: 178456
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: In part, this appeal concerns the procedures for obtaining permission to sell either a new or generic drug under the Federal Food, Drug, and Cosmetic Act, ch. 675, 52 Stat. 1040 (1938) (codified as amended in scattered sections of 21 U.S.C.). Under the Act, the FDA must approve all new drugs before such drugs may be distributed in interstate commerce. 21 U.S.C. § 355(a). To obtain approval for a new drug, an applicant may file a New Drug Application (NDA) that includes examples of the proposed label for the drug and clinical data demonstrating that the drug is safe and effective for use. Id. § 355(b)(1)(A), (b)(1)(F). The NDA must contain the patent number and expiration date of any patent that claims either the drug or a method of using the drug if a claim of patent infringement could reasonably be asserted. Id. § 355(b)(1). The FDA publishes the names of approved drugs and their associated patent information in the Approved Drug Products with Therapeutic Equivalence Evaluations list, commonly referred to as the Orange Book. An applicant seeking approval to market a generic version of a drug may file either an Abbreviated New Drug Application (ANDA) or a 505(b)(2) application, which is also known as a paper NDA. Id. § 355(b)(2), (j). An ANDA allows an applicant to rely on the safety and efficacy information for the listed drug if the applicant can show that the generic drug is bioequivalent to the listed drug. An ANDA has three requirements that are particularly relevant here. First, the applicant must demonstrate that the route of administration, the dosage form, and the strength of the new drug are the same as those of the listed drug, unless the FDA has approved a suitability petition requesting permission to file an ANDA that differs from the listed drug in one or more of these respects. Id. § 355(j)(2)(A)(iii), (j)(2)(C). Second, subject to changes required by FDA regulations or a successful suitability petition, the applicant must also show that the labeling proposed for the new drug is the same as the labeling approved for the listed drug. Id. § 355(j)(2)(A)(v). Third, for each patent listed in the Orange Book that claims either the listed drug or a use of the listed drug for which the applicant is requesting approval, an ANDA must include either one of four certifications or a section viii statement. If an applicant chooses to submit a certification, the applicant must certify (I) that. . . patent information has not been filed, (II) that such patent has expired, (III) . . . the date on which such patent will expire, or (IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug. Id. § 355(j)(2)(A)(vii)(I)-(IV). These certifications are referred to as Paragraph I, II, III, and IV certifications, respectively. Assuming all regulatory requirements are satisfied, the FDA may immediately make effective the approval of an ANDA that includes either a Paragraph I or II certification. Id. § 355(j)(5)(B)(i). By contrast, the filing of a Paragraph III or IV certification may delay the effective date of an ANDA approval, and, in the case of a Paragraph IV certification, invite a patent infringement suit. See 35 U.S.C. § 271(e)(2), 21 U.S.C. § 355(j)(5)(B)(ii)-(iii). If, however, an applicant is seeking approval for a method of use not claimed in a method of use patent associated with the listed drug, the applicant must submit a section viii statement declaring that the patent does not claim such a use. 21 U.S.C. § 355(j)(2)(A)(viii). The applicant must also remove or carve out any mention of the patented method of use from the proposed label for the generic drug. See 21 C.F.R. § 314.92(a)(1); Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 601 F.3d 1359, 1361 (Fed.Cir.2010) (Along with the section viii statement, the generic manufacturer must submit a proposed label to the FDA that does not contain the patented method of using the listed drug.). Unlike a Paragraph III or IV certification, the filing of a section viii statement will not by itself delay approval of an ANDA. Finally, in contrast to an ANDA, a paper NDA must include safety and effectiveness data. 21 U.S.C. § 355(b)(2). However, a paper NDA may rely on safety and effectiveness data not developed by the applicant. Id. As with an ANDA, a paper NDA requires the applicant to submit either a patent certification or a statement declaring that the patent does not claim the method of use for which the applicant is seeking approval. Id. § 355(b)(2)(A)-(B).
In 2000, the FDA approved AstraZeneca's NDA for a budesonide inhalation suspension that AstraZeneca now markets under the name PULMICORT RESPULES®. Each respule is a plastic vial containing a single dose of budesonide, an anti-inflammatory corticosteroid, suspended in a sterile liquid. The drug is administered by squeezing the entire contents of a vial into a jet nebulizer and inhaling the resulting mist through a mask attached to the nebulizer. The Orange Book entry for AstraZeneca's budesonide product includes the '099 Patent and its parent, the '603 Patent. Both patents are owned by AstraZeneca and have specifications that are nearly identical in all relevant respects. The patents explain that [t]he invention provides a new method of treating respiratory diseases such as asthma that involves administering a budesonide composition with a nebulizer not more than once per day. '603 Patent col.1 ll.20-23; '099 Patent col.1 ll.26-29. The invention also features a kit for treating respiratory diseases, the kit including a budesonide composition in a sealed container . . . and a label indicating administration by nebulization in a continuing regimen at a frequency of not more than once per day. '603 Patent col.2 ll.1-6; '099 Patent col.2 ll.7-12. Both patents include method claims directed to administering a budesonide composition once daily and product claims directed to the described kit containing either a budesonide composition or suspension and a label indicating once-daily administration by nebulization. While AstraZeneca's patents are directed to once-daily treatment, the label that accompanies AstraZeneca's budesonide product indicates that the drug may be administered once or twice daily. The label states that the drug is available in three strengths0.25 mg, 0.5 mg, and 1.0 mg per 2 mL vialand provides a table of recommended starting doses based on a patient's history of therapy. The label repeatedly warns that patients should titrate down to the lowest effective dose of the medication to avoid any adverse effects from excessive use of the medication. For example, in its DOSAGE AND ADMINISTRATION section, the label states that [i]n all patients, it is desirable to downward-titrate to the lowest effective dose once asthma stability is achieved and [o]nce the desired clinical effect is achieved, consideration should be given to tapering to the lowest effective dose. The PRECAUTIONS section also warns that suppression of HPA function may be associated . . . when the dose is not titrated to the lowest effective dose and [t]o minimize the systemic effects of orally inhaled corticosteroids . . . each patient should be titrated to his/her lowest effective dose. It is undisputed that the FDA requires all manufacturers of inhaled corticosteroids such as budesonide to include this downward titration language in the labels of their inhaled corticosteroid products.
Apotex submitted an ANDA seeking FDA approval to manufacture and sell a generic version of budesonide for twice-daily use, a use not claimed in either the '603 or '099 patents. The ANDA included a proposed label for the generic drug that, with certain exceptions, is identical to the label included with AstraZeneca's budesonide product. Specifically, in its label, Apotex replaced the PULMICORT RESPULES® brand name on Astra-Zeneca's product with the generic name budesonide inhalation suspension. Apotex also submitted a section viii statement asserting that it was not seeking approval for the once-daily method of use claimed in the '603 and '099 patents and that its proposed generic label would contain no explicit mention of once-daily administration. However, the proposed label retained the FDA-mandated downward-titration language found in AstraZeneca's PULMICORT RESPULES® product label. Apotex further represented that the proposed label would indicate that the generic drug is available in only two strengths: 0.25 mg and 0.5 mg per 2 mL vial. The FDA approved Apotex's ANDA on March 30, 2009.
On March 31, 2009, the day after Apotex's ANDA was approved, AstraZeneca initiated the declaratory judgment action underlying this appeal and moved for a preliminary injunction barring Apotex from distributing its generic budesonide drug. In that action, AstraZeneca argued that Apotex would directly infringe certain kit claims in both patents (claims 29 and 30 of the '603 Patent and claims 17, 18, 20, 21, and 24-27 of the '099 Patent) and would induce infringement of specified method claims in the '603 Patent (claims 1-3, 6-8, 11-18, and 21-28) by including the downward-titration statements in the proposed label. AstraZeneca asserted that the downward-titration statements effectively instructed consumers to use the drug once daily. Claims 1 and 29, respectively, are representative of the asserted method and kit claims in the '603 Patent: 1. A method of treating a patient suffering from a respiratory disease, the method comprising administering to the patient a nebulized dose of a budesonide composition in a continuing regimen at a frequency of not more than once per day. '603 Patent col.10 ll.18-22. 29. A kit for treating respiratory diseases, the kit comprising (a) a budesonide composition in a sealed container, the composition containing 0.05 mg to 15 mg budesonide and a solvent, and (b) a label indicating administration by nebulization in a continuing regimen at a frequency of not more than once per day. Id. col.12 ll.3-8. Claim 17 is representative of the asserted kit claims in the '099 Patent: 17. A kit for treating a respiratory disease, the kit comprising (a) a budesonide suspension in a sealed container, the suspension containing 0.05 mg to 15 mg budesonide and a solvent, and (b) a label indicating administration by nebulization in a continuing regimen at a frequency of not more than once per day. '099 Patent col.11 ll.9-14. The court held a five-day hearing on AstraZeneca's request for a preliminary injunction. At the hearing, Apotex argued that U.S. Patent No. 5,192,528 (the '528 Patent) anticipates all but three of the asserted method claims (claims 12, 14, and 16). Apotex also argued that a 1994 advertisement for AstraZeneca's PULMICORT RESPULES® drug in the British medical journal Thorax (the Thorax advertisement) anticipates each of the asserted method claims. Apotex contended that the asserted kit claims of both patents were invalid because the claimed budesonide composition and suspension were known in the prior art and the recited label could not render a known product patentable. Apotex further argued that it would not induce infringement of the asserted method claims. Apotex contended that the proposed label would not lead consumers to directly infringe the claims because the downward-titration statements included in the label did not instruct users to take the generic drug once daily. In support of this argument, Apotex pointed out that the FDA had previously issued a letter agreeing that the downward-titration language did not teach once-daily usage and was not protected by the '603 and '099 patents. Apotex also contended that it lacked the requisite specific intent to induce infringement because it was the FDA that had required Apotex to include the downward-titration statements in the label. Moreover, because the generic drug allegedly has substantial noninfringing uses (e.g., twice-daily administration to treat asthma), Apotex argued that the district court could not infer that Apotex intended to induce infringement. In the first of two opinions, the district court agreed that Apotex had shown a likelihood of success in its contention that all of the asserted kit claims were invalid, concluding that the addition of the instruction does not functionally alter the known product so as to create a new patentable product. AstraZeneca LP v. Apotex, Inc. (Opinion), 623 F.Supp.2d 579, 591 (D.N.J.2009). With respect to the asserted method claims, the court determined that under its construction of the term budesonide composition Apotex had not shown the asserted method claims likely to be anticipated by the '528 Patent. Id. at 595. The court likewise was not convinced that the Thorax advertisement anticipated these claims, finding persuasive evidence that one of ordinary skill in the art at the time of the invention would not have understood the advertisement to instruct once-daily usage of AstraZeneca's PULMICORT RESPULES® drug. Id. at 596. Regarding inducement, the district court concluded that the downward-titration language would lead many users to directly infringe the asserted method claims because titrating down from the recommended starting doses would necessarily lead to once-daily usage. Id. at 601-02. The court found that the proposed label provided evidence of Apotex's affirmative intent to induce infringement and that there was no evidence in the record that Apotex had attempted to craft a noninfringing label. Id. at 605, 607. The district court also found that AstraZeneca would suffer irreparable harm if the court did not issue a preliminary injunction, as the damage caused by layoffs and loss of consumer goodwill would be unquantifiable, and a confidential settlement agreement between AstraZeneca and Teva Pharmaceuticals (Teva) made determining economic harm speculative. Id. at 611-14. The court found that the public interest did not favor either party. Id. at 614. Before deciding whether to issue the requested preliminary injunction, the court offered Apotex the opportunity to present additional evidence addressing whether Apotex had the necessary specific intent to induce infringement of the asserted method claims. Apotex accepted and presented testimony regarding Apotex's efforts to develop a non-infringing label. After considering this testimony, the court issued a supplemental opinion in which it concluded that AstraZeneca had shown that Apotex had the requisite specific intent to induce infringement. AstraZeneca LP v. Apotex, Inc. (Supplemental Opinion), 623 F.Supp.2d 615 (D.N.J.2009). The district court then issued its preliminary injunction. Apotex filed a timely appeal and AstraZeneca timely filed a cross-appeal. This court has jurisdiction under 28 U.S.C. § 1292(c)(1).