Orange Book Blog

ACI "Paragraph IV Disputes" Conference, San Francisco, December 4-5

American Conference Institute will be holding its popular "Paragraph IV Disputes" conference in San Francisco next week, on December 4-5.  I will have the honor of speaking at the conference on a panel addressing "Paragraph IV Strategies for Method of Treatment Patents in View of Recent and Pending Decisions Regarding Inducement and Divided Infringement."

The remainder of the conference agenda includes the following:

• Anticipating and Reassessing Paragraph IV Challenges in the Era of the Patent Cliff
• Analyzing Invalidity and Noninfringement Assertions in Light of the ANDA Applicant's Prelitigation Obligations and Assertions
• Prior Art Obviousness and Obviousness-Type Double Patenting: Legal Analysis and Practical Applications for Brand Names and Generics
• Labels, Patents and Use Codes: Understanding the Significance of Novo Nordisk v. Caraco to Hatch-Waxman Challenges
• A View from the Bench--a panel featuring Judges Tonianne Bongiovanni, Garrett Brown, David Folsom, and Eugene Lynch
• FTC Keynote: Pay-for-Delay Update
• Settling Paragraph IV Disputes: Drafting and Negotiation Strategies for Brand Names and Generics
• Exclusivities and Forfeitures: New Developments, Controversies and Concerns Relative to Paragraph IV Litigation
• Controversies Surrounding Damages and At-risk Launches
• Updating the Standards in Inequitable Conduct Post-Therasense: Ethical Considerations for Paragraph IV Cases

In addition to the two-day main conference, two pre-conference workshops are offered on December 3rd: "Hatch-Waxman and BPCIA 101--a Primer on IP Basics and Regulatory Fundamentals" and "AIA/PTO Working Group: Assessing the Impact of New PTO Procedures Under the AIA on Paragraph IV Litigation."  There will also be a post-conference working group session: "Biosimilars: Product Development Strategies, Regulatory Review, and Anticipated Litigation Through a Hatch-Waxman Lens."

Orange Book Blog readers are eligible for discounted registration by using code OBB 200.  For more information or to register, please visit the conference website.

The America Invents Act: Basic Information for Patent Owners and Inventors

    by George F. Wheeler

The United States passed a radically new patent statute, the Leahy-Smith America Invents Act ("AIA"), on September 16, 2011.  The AIA has some provisions already in effect and others that will become effective in the near future.  This primer addresses the most important change of the AIA: The AIA will soon make patents more difficult to obtain and easier to defeat, in most instances.

A brief summary of this effect of the AIA follows.

1. EFFECTIVE DATE: The AIA will apply only to patent applications filed on or after March 16, 2013, regardless of when the resulting patents issue.  It won't substantially affect the patent applications on file before that date, for which the previous rules will apply.  By use of proper strategy, which is tricky, pre-AIA applications can be prosecuted for many years in the future and not ever be subject to the AIA.

Note, however, that a dramatically different effective date rule applies to determine for which patent applications a patent interference can be filed, and some of the points made below do not apply to an interference situation.  Patent interferences already are very uncommon, and will not be important to most applicants.  But patent interferences will still be available under certain circumstances for many years in the future, before the AIA phases them out.

2. CHANGE TO A 'FIRST-INVENTOR-TO-FILE" SYSTEM: Proof of when the inventors carried out experimental work or when they discovered their invention will have essentially no value for applications subject to the AIA.  Nor will such proof be useful to others to attack patents subject to the AIA.  In any contest between the first to invent and the first to file a patent application, the first to file will virtually always win, for applications and patents subject to the AIA.

3. PARING BACK THE GRACE PERIOD: In the US before the AIA, the rule has been that once the invention is disclosed or commercialized by anyone (including a competitor or total stranger), the inventor has had one year to file a patent application to avoid losing all rights.  The one year period is called a "grace period."

Under the AIA, this grace period will be an exception to the rule, not the rule.  The details of application of the new rule are complex, but the rule of thumb is simple.  The only truly safe way to conduct oneself as of March 16, 2013, is to follow the rule that Europe and many other countries have had for a long time: assume no grace period whatever, and get a patent application on file before the invention is first published, offered for sale, or revealed anywhere in the world, in any manner.

4. EXPANDING ON THE SCOPE OF PRIOR ART: "Prior art" is all the information that legally existed before an application for the claimed invention was filed.  Prior art has an "effective date" (not to be confused with the effective date of the AIA).  Any information that is prior art can be used to show that an application or patent filed later is unpatentable or invalid.  The AIA expands what is prior art in several respects.

• First, foreign public use or sale of the invention, which was never prior art before, will become prior art.
• Second, the effective date of many Patent Cooperation Treaty (PCT) published patent applications as prior art will be earlier than before.  Under pre-AIA law, a PCT patent application published in a foreign language was prior art as of its publication date, and many English-language PCT patent applications were prior art as of the PCT filing date.  Under the AIA, many PCT patent applications will have as the prior art date the first day a corresponding patent application was filed anywhere in the world.
• Third, a US patent application based on an earlier foreign patent application will have the earliest US or foreign filing date in the world as its effective date.

These new rules can make the effective date of prior art patents and patent applications earlier by up to 18 months.  And again, you need to file an application before these new, earlier prior art dates, not just discover the invention first.

5. HOW TO PREPARE FOR THE AIA: To gain pre-AIA treatment for your patent application, which will usually be more favorable, you need to file a patent application disclosing and claiming the invention as fully as possible and as soon as possible, but definitely before March 16, 2013--no extensions of that deadline will be available.  Plan ahead to avoid the rush, as everyone with an invention that wants to file a patent application will need to get their applications on file by the same deadline.  Moreover, nothing is gained by waiting until just before the deadline.  The purpose for filing this application is to avoid the more expansive AIA prior art rules, but also to obtain the earliest filing date possible.  Even under pre-AIA law, the first applicant to file usually wins in a contest with a later filer who invented first.

There are a few niche areas in which the scope of prior art is reduced under the AIA, making it advantageous for a patent applicant to file a new or continuing application after March 16, 2013, to gain the benefit of the AIA.  But this will be a rare occurrence.  These rare occurrences can be dealt with by taking two steps:

•  First, file a file a patent application as soon as possible claiming any invention that will benefit from post-AIA treatment.  Don't wait to do this until March 16, 2013, so your claims benefitting from post-AIA treatment will have an earlier effective filing date.
• Second, on or after March 16, 2013, file a second patent application claiming priority to the first application and containing at least one claim NOT supported by the first application.  This unsupported claim does not need to be one of the ones that benefits from post-AIA treatment.

By doing this, you will have claims with a pre-March 16, 2013, effective filing date that nonetheless benefit from post-AIA prior art rules--the best of both worlds.

There are many other changes already here, or coming, due to the AIA.  Probably the most important of these are fundamental changes in how a US patent can be attacked in the U.S. Patent and Trademark Office.  The AIA provides post-grant review, a new procedure much like opposition proceedings in Europe.  The AIA also expands "prior user rights" enabling one who discovers and practices an invention commercially to continue practicing the invention even if someone else later independently discovers it and patents it.

Note that this is a brief summary, and is not exactly applicable to every instance or situation, or everything you might ever need to know about the AIA.  But the above is in my view the core knowledge that every inventor and patent owner needs to possess in the near future to effectively deal with the AIA.

ACI "Maximizing Pharmaceutical Patent Life Cycles" Conference, New York, October 10-11

American Conference Institute will be holding its 13th annual "Maximizing Pharmaceutical Patent Life Cycles" conference in New York City on October 10-11.  There have many important developments in pharmaceutical patent law over the last year--from use codes to Myriad to the safe harbor--and this conference will bring you up to speed.

The conference agenda includes the following talks:

• From Product Development to Patent Portfolio Management:  Patent Life Cycle Strategies for a Post-AIA World
• An Industry Perspective on Implementation of the AIA, New PTO Proceedings, and Their Collective Impact on Life Cycle Management
• Preparing for the Implementation of the FDA's Biosimilars Pathway and its Effects on Life Cycle Planning
• REMS Studies and Generic Entry:  Exploring the Latest Regulatory Conundrums Affecting Pharmaceutical Patent Life Cycle Strategies
• Personalized Medicine and Patent Life Cycle Considerations in Light of Prometheus and Other Recent Challenges to Subject Matter Patentability, Written Description, and More
• Employing Strategies to Avoid Findings of Obviousness:  Legal Analysis and Practical Applications for Brand Names and Generics
• Inequitable Conduct Post-Therasense and How it Impacts Life Cycle Planning
• USPTO Keynote:  The Brave New World of Patent Reform and its Impact on Pharmaceutical Patents
• Understanding How Caraco has Redefined the Relationship Between Pharmaceutical Patents, Labels, and Use Codes
• Analyzing Method Claims and the Madness Over Recent and Pending Inducement and Divided Infringement Cases
• Exclusivities and Forfeitures:  New Developments, Controversies and Related Concerns
• An Update on FDA Activities Impacting Pharmaceutical Patent Life Cycle Planning
• Safe Harbor or Stormy Port?  Calming the Legal Tempest Left by Proveris
• Understanding the Importance of Rx to OTC Switches to the Future of Pharmaceutical Patent Life Cycle Management

In addition to the two-day main conference, ACI is offering two pre-conference workshops on October 9th:  Assessing the Impact of New PTO Procedures Under the AIA on Hatch-Waxman Strategies Relative to Patent Life Cycle Management; and Basic Training in the Essentials of Patent Term Adjustment and Patent Term Restoration for Patent Lawyers Serving the Biopharmaceutical Industry.

Orange Book Blog is a media partner of the conference, so readers are eligible for a $200 discount by using registration code OBB 200.  For more information or to register, please visit the conference website.

Federal Circuit Affirms Validity of Lilly's Alimta (Pemetrexed) Patent

Eli Lilly & Co. v. Teva Parenteral Medicines , No. 2011-1561 (Fed. Cir.)

Lilly's anticancer drug Alimta (pemetrexed) is approved for the treatment of mesothelioma and non-small cell lung cancer.  Teva, Barr and APP filed ANDAs seeking approval to market generic versions of Alimta prior to the expiration of U.S. Patent No. 5,344,932, owned by Princeton University and exclusively licensed to Lilly.

In a unanimous opinion last Friday, the Federal Circuit affirmed a district court decision that the asserted claims of the '932 patent are not invalid for obviousness-type double patenting.

Claim 3 of the '932 patent recites pemetrexed:

Teva asserted that claim 3 of the '932 patent is invalid for obviousness-type double patenting over two patents in the same family as the '932:  U.S. Patent Nos. 5,028,608 and 5,248,775.  The '608 and '775 patents have expired, but the '932 patent remains in effect until July 24, 2016, due to a patent term extension of over four years to compensate for delays in the regulatory approval of Alimta.  Lilly holds a further six months of pediatric exclusivity over pemetrexed.

As the Federal Circuit explained:

The doctrine of obviousness-type double patenting is intended to prevent the extension of the term of a patent by prohibiting the issuance of claims in a second patent not patentably distinct from the claims of the first patent.  A later patent claim is not patentably distinct from an earlier claim if the later claim is obvious over, or anticipated by, the earlier claim.

Teva's first argument was that pemetrexed is not patentably distinct from a compound recited in claim 3 of the '608 patent:

Here, according to the Federal Circuit:

Teva's primary argument concerns the appropriate legal standard for evaluating obviousness-type double patenting.  Relying on our decision in Amgen Inc. v. Hoffman La-Roche Ltd., 580 F.3d 1340 (Fed. Cir. 2009), Teva contends that the correct analysis involves only the differences between the claims at issue, so that any features held in common between the claims--in this case, all but the aryl regions of the '608 Compound and pemetrexed--would be excluded from consideration.  In Amgen, we explained that once the differences between claims are established, the obviousness-type double patenting analysis entails determining "whether the differences in subject matter between the claims render the claims patentably distinct."  But those differences cannot be considered in isolation--the claims must be considered as a whole.

On the merits, the court stated:

In the chemical context, we have held that an analysis of obviousness-type double patenting requires identifying some reason that would have led a chemist to modify the earlier compound to make the later compound with a reasonable expectation of success.  Here, the district court considered the parties' arguments and evidence, particularly their conflicting expert testimony as to how an ordinarily skilled chemist presented with the '608 Compound would have been motivated to proceed at the time.  In its decision, the court credited Lilly's evidence to find that "the ways in which a person of ordinary skill in the art would modify [the '608 Compound] would not result in pemetrexed."  We owe that finding considerable deference on appeal, and we see no clear error based on the record before us.

Teva's second argument was that pemetrexed is not patentably distinct from a compound recited in claim 2 of the '775 patent:

Here, Teva's arguments were based not on the structural similarity of pemetrexed and the '775 Intermediate, but rather on the fact that the '775 patent disclosed that the '775 Intermediate is used to make pemetrexed.  As the court put it, "By later claiming pemetrexed itself, Teva maintains, the '932 patent appropriates a previously disclosed use for previously patented compound, which renders the asserted '932 claims invalid for obviousness-type double patenting under a line of our precedent including . . . Sun Pharm. Indus. v. Eli Lilly & Co. (Fed. Cir. 2010)."

The Federal Circuit explained:

As a general rule, obviousness-type double patenting determinations turn on a comparison between a patentee's earlier and later claims, with the earlier patent's written description considered only to the extent necessary to construe its claims.  . . .  The cases on which Teva relies represent a limited exception to this customary framework.  . . .  In Pfizer v. Teva Pharms. USA (Fed. Cir. 2008), we held claims to methods of administering a particular anti-inflammatory drug invalid for obviousness-type double pateting where th patentee's earlier patent claimed the drug itself and disclosed the same methods of administering the drug.  And in Sun, the patent holder had developed an antiviral compound, gemcitabine, that also proved useful for treating cancer.  . . .  As in Pfizer, we held the patentee's subsequent claims to methods of using gemcitabine to treat cancer invalid for double pateting, looking to the disclosure of anticancer utility in the first patent's specification.

In summary, according to the court, Pfizer and Sun "address the situation in which an earlier patent claims a compound, disclosing the utility of that compound in the specification, and a later patent claims a method of using that compound for a particular use described in the specification of the earlier patent.  Furthermore, in each of those cases, the claims held to be patentably indistinct had in common the same compound or composition."

The court distinguished this case:

Rather than a composition and a previously disclosed use, the claims at issue recite two separate and distinct chemical compounds:  the '775 Intermediate and pemetrexed, differing from each other in four respects.  That alone suffices to undermine Teva's argument regarding the '775 Intermediate, for the asserted claims of the '932 patent do not recite a use of the same compound, but a different compound altogether.

Finally, the Federal Circuit corrected an error made by the district court.  The district court disregarded Lilly's objective evidence of nonobviousness, holding that "secondary considerations are not relevant to the analysis of invalidity for obviousness-type double patenting."  The Federal Circuit took the opportunity to reiterate its recent statement from In re Cyclobenzaprine:  a fact-finder "must withhold judgment on an obviousness challenge until it has considered all relevant evidence, including that relating to the objective considerations."

Federal Circuit Continues to be Split Over Scope of 271(e)(1) Safe Harbor

Momenta Pharms. v. Amphastar Pharms., No. 2012-1062 (Fed. Cir.)

Last year, in Classen v. Biogen IDEC, a three-judge panel of the Federal Circuit held that the safe harbor of Section 271(e)(1) "does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained."  The majority opinion was written by Judge Newman, with Chief Judge Rader concurring and providing additional views, and Judge Moore dissenting.  A petition for certiorari in the case is currently pending at the Supreme Court, and the Court recently asked the Solicitor General's office to weigh in with its views.

Last Friday, in Momenta v. Amphastar, a case between two manufacturers of generic Lovenox (enoxaparin), a slightly different three-judge panel of the Federal Circuit held that the safe harbor does apply to certain post-approval activities.  In the case, Judge Moore wrote the majority opinion, joined by Judge Dyk, and Chief Judge Rader wrote a blistering 29-page dissent.  The decisions in the two cases do not seem entirely consistent with each other, which likely raises the odds that the Supreme Court will agree to hear the Classen case.

Momenta is the assignee of U.S. Patent No. 7,575,886, which generally relates "to methods for analyzing heterogeneous populations of sulfated polysaccharides, e.g. heparin [and] . . . LMWH [low molecular weight heparin--e.g., enoxaparin]."  Two days after Amphastar received final FDA approval to market its generic enoxaparin (and more than a year after Momenta received its own approval), Momenta filed suit against Amphastar, accusing Amphastar of "manufacturing generic enoxaparin for commercial sale" and performing "in their process for manufacturing batches of enoxaparin" an analytical method that infringes the '886 patent.  According to the majority opinion, Momenta also alleged that this infringing testing was necessary to "satisfy the FDA's requirements."

The district court granted Momenta a preliminary injunction, concluding that Amphastar's testing falls outside the scope of the safe harbor under Section 271(e)(1):  "although the safe harbor provision permits otherwise infringing activity that is conducted to obtain regulatory approval of a product, it does not permit a generic manufacturer to continue in that otherwise infringing activity after obtaining approval."  Amphastar appealed, contending that the district court adopted an overly restrictive view of the safe harbor.

The Federal Circuit majority opinion began by addressing Momenta's "contention that the information in question was not 'submitted' to the FDA, but rather was retained by the ANDA holder."  Here, the majority concluded that "the fact that the FDA does not in most cases actually inspect [Amphastar's manufacturing test records] does not change the fact that they are for the development and submission of information under a Federal law."  The majority cited the Supreme Court's Merck v. Integra decision for "holding that uses which are not ultimately included in a submission to the FDA are nonetheless exempted by the safe harbor."

The majority then turned to whether Amphastar's submissions are protected by the safe harbor.  Here, the majority took pains to distinguish Classen:

At issue in Classen were [post-marketing] studies to evaluate the association between the timing of childhood vaccinations and the risk of developing certain immune-mediated disorders.  The studies themselves were not mandated by the FDA, but any vaccine license holder was required to report to the FDA "adverse experience information," such as adverse side effects, it acquired as a result of vaccine studies.  We found that the studies conducted by the vaccine license holder according to patented methods were not insulated by the safe harbor because the studies did not facilitate marketing a generic drug by "expediting development of information for regulatory approval."  We, of course, are bound by the Classen decision unless it is overruled en banc or by the Supreme Court.  Accordingly, the scope of the safe harbor provision does not extend to "information that may be routinely reported to the FDA, long after marketing approval has been obtained."

This case, however, fits well within Classen because the information submitted is necessary both to the continued approval of the ANDA and to the ability to market the generic drug.  Here, the submissions are not "routine submissions" to the FDA, but instead are submissions that are required to maintain FDA approval.  . . .  Failure to comply with these requirements could result in suspension or revocation of Amphastar's ANDA approval to market the drug.

We also note that, unlike in Classen where the patented studies performed were not mandated by the FDA, the information here is not generated voluntarily by the manufacturer but is generated by FDA requirements the manufacturer is obligated under penalty of law to follow.  Under such circumstances, the information can be said to have been gathered solely for submission to the FDA and not, as in Classen, primarily for non-FDA purposes.  While Momenta urges us to adopt the pre-/post-approval distinction used by the district court, we cannot:  Classen did not turn on this artificial distinction, and the plain language of the statute is not restricted to pre-approval activities.

Unlike Classen, where the allegedly infringing activity "may" have eventually led to an FDA submission, there is no dispute in this case that Amphastar's allegedly infringing activities are carried out to "satisfy the FDA's requirements."

In a strongly-worded dissent, Chief Judge Rader repeatedly refers to Amphastar as a "trespasser" and "infringer."  He traces the legislative history of Section 271(e)(1)--which is curious given that the Supreme Court has twice minimized the legislative history and based its decisions instead on the plain (and broad) language of the statute.  And he takes great exception to the majority opinion's basis for distinguishing Classen.  Finally, he claims that the majority's "interpretation of 271(e)(1) would essentially render manufacturing method patents worthless."  While this is an exaggeration, the Supreme Court might reply:  "that is a problem for Congress to fix, if they so choose."

Where the scope of the 271(e)(1) safe harbor ends up matters a great deal, particularly as we approach the era of biosimilar patent litigation.  Like enoxaparin, biologics are complex molecules and thus analytical-method patents figure to be in the patent portfolios protecting them.  The sooner the courts can agree on the scope of the safe harbor, the better for everyone.

"Business of Biosimilars & Generic Drugs" Conference, Boston, MA, September 10-12

FDA has been busy preparing for the day when the first biosimilar application is filed.  In February, FDA published three draft guidance documents on biosimilars.  In May, FDA held a public hearing on the guidance.  And earlier this week, FDA announced biosimilar user fee rates for fiscal year 2013.

Patent lawyers have been busy preparing too.  On September 11th, I will be speaking on "Best Practices in Portfolio Management During the Patent Exchange Process" at IIR USA's 13th Annual Business of Biosimilars & Generic Drugs conference, to be held in Boston from September 10-12.  According to the conference producer:

Initially established in 1999 as "The Generic Drugs Summit," this event from the outset helped shape best practice and performance standards in the generics industry.  In early years, a major topic of discussion was the potential for "biogenerics," with the biotech industry hoping that these molecules could be created and approved through long-tested and familiar methods.  When it became clear that a radically different pathway would be required, we became the first commercial event to address the regulatory and commercialization concerns relevant to follow-on biologics, under our new banner, "The Business of Biosimilars and Biobetters."  Now building off the accumulated expertise of our long history, we are proud to offer "The Business of Biosimilars and Generic Drugs" in order to illuminate the most urgent and timely topics relevant to follow-on biopharmaceuticals.  This year's program features crossover topics of interest to both groups, as well as breakout sessions to give equal time when their needs diverge.

Here is the complete agenda:

September 10

• Morning Summit:  Biosimilar R&D Scenario Planning Session
• Afternoon Summit:  choose from "Map the Strengths, Weaknesses, and Defenses of your IP Assets to Prepare for the Challenges of the Follow-On Process" or "Assessing the Immunogenicity Potential for Biosimilars"

September 11--Morning

• Think Different--Navigating the Brave New Globalized Life Science Industry
• The World is Flat--Make Sure Your Sales Are Not--Commercializing Generics in Global and Emerging Markets
• The New Paradigm in Strategic Partnerships for Follow-On Biopharmaceutical Development
• Reimbursement Strategies for Generics and Biosimilars Around the World

September 11--Afternoon

Track 1:  Market Access for Biosimilars

• The Strategy and Case Study of Global Biosimilar Development
• Overview of Biosimilar Trends in BRIC Countries
• The Future of Biosimilars in Specific Emerging Markets
• Combat Misinformation About Biosimilars

Track 2:  Market Access for Generics

• Preparing Global Manufacturing Processes for Product Rollouts
• Direct-to-Pharmacy and Direct-to-Consumer Rebate Strategies:  What's Coming Next?
• Analyzing the Regulatory Criteria That Your Generic Drug Candidate Must Meet
• Establishing R&D Methods and Timetables That Will Streamline Your Expansion to New Markets

Track 3:  Legal/IP for Biosimlars

• Turn Antitrust Laws to Your Advantage in the Generics and Biosimilars Marketplace
• Best Practices in Portfolio Management During the Patent Exchange Process
• Experiences from Developing Biosimilars for EMA:  Unique Perspectives from Growth Hormones to Monoclonal Antibodies
• Adapt to New Regulatory Requirements for Biosimilar Approval and Success

September 12

• Outlook and Strategic Impact of the U.S. Biosimilar Approval Pathway
• Regulatory Extrapolation of Therapeutic Indications for Complex Biosimilars:  Clinical and Regulatory Updates, and Ways to Proceed
• Improve and Approve:  Boost the Safety and Convenience of Biobetters, and Navigate the New Regulatory Environment
• Building Product Awareness and Acceptance:  What Can Biosimilars and Generics Learn from One Another?
• When Being the Same is Good Enough:  Building Public Confidence and Interest in Biosimilars
• Preparing for IP Challenges:  What Originators and Follow-On Companies Need to Know

For more information or to register, please visit the conference website.  To save 25%, register using promotion code XP1786OBB.

OBB News Briefs: First-Inventor-to-File Rules; Myriad oral argument; Lyrica decision

• On Friday morning, the USPTO pre-published its proposed rule changes implementing the provisions of the America Invents Act that convert the U.S. patent system from a "first to invent" to a "first inventor to file" system.  The proposed rules (available here) were scheduled to be published in the Federal Register on Monday, but were withdrawn later Friday.  We understand that the proposed rules were withdrawn because there was not enough space in Monday's Federal Register to accomodate both the proposed rules and a companion "guidance document" that the PTO wants published in the same issue of the Federal Register.  We expect that the proposed rules and guidance document will be published together sometime next week, and further that the published proposed rules will be identical to those that were pre-published today.
• Also Friday morning, the Federal Circuit heard oral argument in AMP v. Myriad following remand from the Supreme Court for further consideration in light of Prometheus.  An .mp3 audio recording of the oral argument is available here and also posted on the Federal Circuit's website.
• On Thursday, Judge Sleet of the U.S. District Court for the District of Delaware issued a 133-page opinion holding Pfizer's patents on Lyrica (pregabilin) valid and infringed by eight generic drug companies who filed ANDAs with paragraph IV certifications to the patents.  The ANDA applicants are now enjoined from marketing their generic versions of Lyrica until at least December 30, 2018, when, according to the Orange Book, the last of the patents-in-suit will expire.  The issues in the case included obviousness, anticipation, priority, written description, inventorship, literal and DOE infringement, and finally whether two patent term extensions, stemming from two separate NDAs for Lyrica that were approved on the same day, were valid.

Third Circuit Issues Landmark Decision in Reverse Payment Case, Setting Up Supreme Court Review

In Re: K-Dur Antitrust Litigation, No. 10-2077 (3d Cir.)

In what antitrust experts are calling a "landmark" decision, the Third Circuit Court of Appeals on Monday held that so-called "pay-for-delay" or "reverse payment" settlement agreements are presumptively anticompetitive and illegal.  In 2005, the Eleventh Circuit Court of Appeals, analyzing the same settlement agreements at issue here, but applying a different test, reached essentially the opposite result.  Because of the circuit split, many observers believe that with this case, the Supreme Court will finally address the legality of reverse payment settlements.

The two settlement agreements at issue in the case involve Schering's blood pressure drug K-Dur 20.  In 1997, Schering and Upsher-Smith settled their paragraph IV case on terms that included a $60 million payment from Schering to Upsher and an agreement by Upsher not to market its generic version of K-Dur until 2001.  At about the same time, Schering and ESI Lederle settled their paragraph IV case on terms that included a $10 million payment from Schering to ESI and an agreement by ESI not to market its generic K-Dur until 2004.

The Third Circuit's opinion provides a concise history of court decisions examining reverse payment settlements under the antitrust laws.  Since 2001, five other circuit courts have addressed the legality of reverse payment settlements.  The D.C. Circuit in 2001 and the Sixth Circuit in 2003 both concluded that such agreements should be subject to strict antitrust scrutiny, at least where the parties attempted to "park" the first ANDA filer's 180-day exclusivity period in order to block subsequent ANDA filers.  The Eleventh Circuit in 2003 and 2005, the Second Circuit in 2006, and the Federal Circuit in 2008 each applied the "scope of the patent" test, under which "the essence of the inquiry is whether the agreements restrict competition beyond the exclusionary zone of the patent."  More specifically, under the scope-of-the-patent test, "reverse payments are permitted so long as (1) the exclusion does not exceed the patent's scope, (2) the patent holder's claim of infringement was not objectively baseless, and (3) the patent was not procured by fraud on the PTO."

The Third Circuit rejected the scope-of-the-patent test here, stating:  "As a practical matter, the scope of the patent test does not subject reverse payment agreements to any antitrust scrutiny.  As the antitrust defendants concede, no court applying the scope of the patent test has ever permitted a reverse payment antitrust case to go to trial."  According to the court, the "test improperly restricts the application of antitrust law and is contrary to the policies underlying the Hatch-Waxman Act and a long line of Supreme Court precedent on patent litigation and competition."

The court further explained:

In rejecting the scope of the patent test, we are cognizant that such a test encourages settlement, an objective our decisions generally support.  However, the judicial preference for settlement, while generally laudable, should not displace countervailing policy objectives or, in this case, Congress's determination--which is evident from the structure of the Hatch-Waxman Act and the statements in the legislative record--that litigated patent challenges are necessary to protect consumers from unjustified monopolies by name brand drug manufacturers.  We also emphasize that nothing in the rule of reason test we adopt here limits the ability of the parties to reach settlements based on a negotiated entry date for marketing of the generic drug: the only settlements subject to antitrust scrutiny are those involving a reverse payment from the name brand manufacturer to the generic challenger.

The Third Circuit thus remanded the case to the district court with the following instructions:

to apply a "quick look" rule of reason analysis based on the economic realities of the reverse payment settlement rather than the labels applied by the settling parties.  Specifically, the finder of fact must treat any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market as prima facie evidence of an unreasonable restraint of trade, which could be rebutted by showing that the payment (1) was for a purpose other than delayed entry or (2) offers some pro-competitive benefit.

Consistent with the Third Circuit's decision, the FTC has often stated that it is not concerned with settlements in which the brand and generic companies compromise on a generic entry date that is prior to patent expiration but later than would occur if the patent-in-suit were invalidated in court--so long as nothing of value is provided from the brand to the generic as part of the agreement.  The FTC has also publicly stated that besides cash payments, it considers an agreement by the brand company not to launch an authorized generic drug at the time of generic entry to be "something of value" that should make the agreement presumptively anticompetitive.

RELATED READING:

• GPhA press release
• Statement by FTC Chairman Jon Leibowitz
• Thomson Reuters News & Insight
• Washington Post article
• WSJ Law Blog

Federal Circuit Again Vacates Preliminary Injunction in Metformin Case

Sciele Pharma v. Lupin, No. 2012-1228 (Fed. Cir.)

In a precedential decision today, the Federal Circuit vacated a preliminary injunction that had been entered against Lupin in the ANDA litigation over Lupin's generic version of FORTAMET (metformin extended-release tablets).  This is the second preliminary injunction against Lupin that the Federal Circuit has vacated in the litigation.

The U.S. District Court for the District of Delware entered the first preliminary injunction against Lupin in December 2011.  The Federal Circuit vacated the injunction on February 6, 2012, because the "district court's order imposing the preliminary injunction failed to even address Lupin's obviousness arguments."  On remand shortly therafter, the district court again entered a preliminary injunction against Lupin.  Lupin then moved for a stay, which the district court denied.  Lupin appealed again to the Federal Circuit, which ordered expedited briefing, held oral arguments on April 18, 2012, and, later the same day, granted Lupin's request to stay the second preliminary injunction.

Lupin argued in the appeal that the presumption of validity should not apply because the PTO erroneously granted the asserted claims of the patent-in-suit, U.S. Patent No. 6,866,866.  Sciele argued, on the other hand, that there should be a heightened presumption of validity because the prior art references relied upon by Lupin (Cheng and Timmins) were before the PTO during prosecution.  The Federal Circuit explained that, while new evidence not considered by the PTO "may carry more weight than evidence previously considered," the burden of proof required to prove invalidity, clear and convincing evidence, never changes:

The burden does not suddenly change to something higher--"extremely clear and convincing evidence" or "crystal clear and convincing evidence"--simply because the prior art references [relied on to prove invalidity] were considered by the PTO.  In short, there is no heightened or added burden that applies to invalidity defenses that are based upon references that were before the Patent Office.  The burden is always the same, clear and convincing evidence.

The Federal Circuit next addressed the merits of Lupin's invalidity argument, i.e., that the asserted claims of the '866 patent are invalid as obvious over Cheng and Timmins.  The asserted claims are directed to controlled-release dosage forms of metformin providing a mean time to maximum plasma concentration (Tmax) of between 5.5 and 7.5 hours.  According to the Federal Circuit, Cheng discloses all of the limitations of the asserted claims except for the Tmax range of 5.5 to 7.5 hours (instead disclosing a Tmax of 8-12 hours).  In addition, while Timmins discloses a median Tmax and not the claimed mean Tmax, Timmins, according to the Federal Circuit, "also provides the raw data from which one skilled in the art could compute the range of possible mean Tmax values."  According to the court, "[b]ased on this data, one skilled in the art would understand that the mean Tmax in Timmins must fall between 4.67 and 6.33 hours."  Thus, according to the court, Timmins "teaches one skilled in the art to lower the Tmax of Cheng."  This, in the Federal Circuit's view, was sufficient to raise a substantial question of validity that should have precluded a preliminary injunction.

To buttress its findings on the issue of obviousness, the Federal Circuit cited statements that the patentee made during prosecution in support of enablement:

During prosecution the applicant indicated "that one skilled in the art would be able to manipulate the processes and formulations of the [prior art] by other methods to obtain the claimed pharmacokinetic parameters of the present invention by routine experimentation.  While [Sciele] argued, and the district court seemed to accept, that this statement applies only to enablement, we are hard pressed to understand this distinction.  Coupled with the motivation to lower the Tmax, as disclosed in Timmins, the applicant's characterization of the predictability and skill in the art during prosecution provides further evidence that it would have been a routine and obvious design choice to make an extended-release dosage form with a lower Tmax.

Quoting KSR, the Federal Circuit concluded, "After all, 'if a person of ordinary skill can implement a predictable variation, section 103 likely bars its patentability.'"

Accordingly, the court vacated the preliminary injunction and remanded the case to the district court for further proceedings.

"5th Product and Pipeline Enhancement for Generics" Conference, Washington, DC, July 18-19

Marcus Evans Conferences will be holding its "5th Product and Pipeline Enhancement for Generics" conference in Washington, DC, on July 18-19.  According to the producer, the conference will help attendees "adopt innovative approaches to strengthen the product pipeline and prepare for regulatory changes to emerge as a global player."  The conference chair is Richard Dicicco, Chairman of Harvest Moon Pharmaceuticals.

The full agenda is as follows:

• Implementing Strategies to Meet Current and Heightened Abbreviated New Drug Application (ANDA) Standards to Gain Product Approval
• Understanding Key Techniques to Ensure Regulatory Compliance
• America Invents Act: Assessing the Impact on Generics
• Understanding Antitrust Concerns When Settling Paragraph IV Litigation and the Analysis of Pay-for-Delay Settlements, by Markus H. Meier, Asst. Director of the Health Care Division, Bureau of Competition
• Analyzing Recent Updates to the Hatch-Waxman Act to Grasp Future Impacts and Challenges
• Developing Key Patent Strategies to Protect Intellectual Property and Ensure Market Sustainability
• Identifying Strategies to Strengthen Paragraph IV Patent Filings and Litigation to Maintain Exclusivity
• Exploring U.S. Healthcare Changes and the Effect on Patent Litigation for Generic Companies
• Adopting Key Techniques to Select, Prioritize and Manage a Generics Portfolio
• Examining Trends in Market Opportunities and Partnerships to Diversify the Company's Portfolio
• Implementing Successful Resource Management Techniques with Limited Resources
• Understanding How At-Risk Product Launches Factor into Portfolio Development
• Identifying Tactics to Improve Strategic API Sourcing
• How Generic User Fees (GDUFA) are Likely to Impact the API Industry
• Studying the Impact of the FDA's Guidance on Biosimilars for the Generics Industry to Ensure Regulatory Compliance
• Global Biosimilars: Differentiating Between the Draft U.S. Biosimilars Guidance and Existing EMA and Japanese Biosimilars Regulations
• Leveraging Novel Drug Delivery Technologies to Drive Innovation and Differentiation
• Understanding the Role and Challenges of a Small Startup Generics Company
• Generics in Emerging Markets: Analyzing the Benefits and Risks of Expanding to New Markets
• Assessing Global Manufacturing Possibilities to Increase Efficiency and Explore Business Opportunities

There will also be a pre-conference workshop on July 17, "Overcoming the Challenges of Global Portfolio Management to Improve Decision-Making."

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