Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Novartis Pharmaceuticals Corporation v. Breckenridge Pharmaceutical Inc.

United States District Court, D. Delaware

March 28, 2017

NOVARTIS PHARMACEUTICALS CORPORATION and NOVARTIS AG, Plaintiff;
v.
BRECKENRIDGE PHARMACEUTICAL, INC., Defendant. NOVARTIS PHARMACEUTICALS CORPORATION and NOVARTIS AG, Plaintiff;
v.
WEST-WARD PHARMACEUTICALS INTERNATIONAL LIMITED, Defendant. NOVARTIS PHARMACEUTICALS CORPORATION and NOVARTIS AG, Plaintiff;
v.
PAR PHARMACEUTICAL, INC., Defendant.

          Daniel M. Silver, Esq., MCCARTER & ENGLISH, LLP, Wilmington, DE; Nicholas N. Kallas, Esq., FITZPATRICK, CELLA, HARPER & SCINTO, New York, NY; Christopher E. Loh, Esq., FITZPATRICK, CELLA, HARPER & SCINTO, New York, NY; Charlotte Jacobsen, Esq., FITZPATRICK, CELLA, HARPER & SCINTO, New York, NY; Christina L. Schwarz, Esq., FITZPATRICK, CELLA, HARPER & SCINTO, New York, NY. Attorneys for Plaintiffs

          Kelly E. Farnan, Esq., RICHARDS, LAYTON & FINGER, PA, Wilmington, DE; Selena Molina, Esq., RICHARDS, LAYTON & FINGER, PA, Wilmington, DE; B. Jefferson Boggs, Jr., Esq., MERCHANT & GOULD PC, Alexandria, VA; Matthew L. Fedowitz, Esq., MERCHANT & GOULD PC, Alexandria, VA; Christopher J. Sorenson, Esq., MERCHANT & GOULD PC, Minneapolis, MN; Rachel C. Hughey, Esq., MERCHANT & GOULD PC, Minneapolis, MN; Daniel R. Evans, Esq., MERCHANT & GOULD PC, Atlanta, GA. Attorneys for Defendant Breckenridge Pharmaceutical, Inc.

          David E. Moore, Esq., POTTER ANDERSON & CORROON LLP, Wilmington, DE; Bindu A. Palapura, Esq., POTTER ANDERSON & CORROON LLP, Wilmington, DE; Stephanie E. O'Byrne, Esq., POTTER ANDERSON & CORROON LLP, Wilmington, DE; Marta E. Gross, Esq., GOODWIN PROCTER LLP, New York, NY; Keith A. Zullow Esq., GOODWIN PROCTER LLP, New York, NY; Michael B. Cottier Esq., GOODWIN PROCTER LLP, New York, NY; Steven J. Bernstein Esq., GOODWIN PROCTER LLP, New York, NY; Naomi Birbach Esq., GOODWIN PROCTER LLP, New York, NY. Attorneys for Defendant West-Ward Pharmaceuticals International Limited

          Steven J. Fineman, Esq., RICHARDS, LAYTON & FINGER, PA, Wilmington, DE; Katharine L. Mowery, Esq., RICHARDS, LAYTON & FINGER, PA, Wilmington, DE; Daniel G. Brown, Esq., LATHAM & WATKINS LLP, New York, NY; Roger J. Chin, Esq., LATHAM & WATKINS LLP, San Francisco, CA; Marc N. Zubick, Esq., LATHAM & WATKINS LLP, Chicago, IL; Brenda L. Danek, Esq., LATHAM & WATKINS LLP, Chicago, IL; Parker M. Tresemer, Esq., LATHAM & WATKINS LLP, Los Angeles, CA. Attorneys for Defendant Par Pharmaceutical, Inc.

          TRIAL OPINION

          Andrews, U.S. District Judge

         Plaintiffs brought these patent infringement actions against Breckenridge Pharmaceutical, Inc., Roxane Laboratories, Inc.[1], and Par Pharmaceutical, Inc. in 2014. (D.I. I).[2] Breckenridge, Roxane, and Par each filed an Abbreviated New Drug Application ("ANDA"), seeking to engage in the commercial manufacture, use, and sale of generic versions of Novartis's Zortress product. (D.I. 141-1, ¶¶44, 52, 59). Plaintiffs allege that these ANDAs infringe U.S. Patent No. 5, 665, 772 ("the '772 patent"). Plaintiffs further allege that by filing these ANDAs, Roxane and Breckenridge induced infringement of U.S. Patent No. 6, 239, 124 ("the '124 patent") and Roxane and Par induced infringement of U.S. Patent No. 6, 455, 518 ("the '518 patent").

         At issue in these cases is the compound 40-O-(2-hydroxyethyl)-rapamycin, also referred to as everolimus, which is the active ingredient in Novartis's Zortress product. Everolimus is a derivative of the compound rapamycin and is claimed in the '772 patent. The only difference between rapamycin and everolimus is that the hydroxyl group at the C-40 position in rapamycin is replaced with a 2-hydroxyethyl group in everolimus. (Trial Transcript ("Tr.") 193:4-13).

         Rapamycin has long been known to have beneficial medicinal properties, such as antifungal activity (Tr. 96:11-12), anticancer activity (Tr. 96:13-97:3), and immunosuppressive activity (Tr. 95:2-10). Rapamycin is recognized as having limited utility in pharmaceutical applications as it has low bioavailability, high toxicity, and poor solubility. ('772 patent at 1: 36-40). Rapamycin derivatives such as everolimus, however, have been shown to have better stability and bioavailability, making them more desirable for pharmaceutical preparations. (Id. at 1:41-45).

         Also at issue are methods of treating or preventing transplant rejection using everolimus and one of a class of compounds known as IL-2 transcription inhibitors. The '124 patent claims the use of synergistically effective amounts of cyclosporin A and everolimus in weight ratios from 2:1 to 180:1. The proposed labels for both Roxane's and Breckenridge's generic products include instructions for co-administration of cyclosporin A and everolimus for the prevention and treatment of transplant rejection in kidney transplant patients. (D.I. 130-1, ¶¶ 51, 58). The '518 patent claims the use of synergistically effective amounts of an IL-2 transcription inhibitor and everolimus in weight ratios from 2:1 to 180:1. The proposed labels for both Roxane's and Par's generic products include instruction for co-administration of the IL-2 transcription inhibitor FK506, also known as tacrolimus, and everolimus for the prevention and treatment of transplant rejection in liver transplant patients. (Id. at ¶¶ 58, 66).

         The Court held a bench trial on August 29-September 1, 2016. Defendants concede that their proposed products meet all limitations of the '772 patent. (D.I. 152 at 3). Defendants argue that Plaintiffs have not proven by a preponderance of evidence that Defendants induced infringement of the '124 and '518 patents. Defendants further argue that the '772, '124, and '518 patents are invalid as obvious and for obviousness-type double patenting.

         I. LEGAL STANDARDS

         A. Obviousness-Type Double Patenting

         "Obviousness-type double patenting is a judicially created doctrine that 'prohibit[s] a party from obtaining an extension of the right to exclude through claims in a later patent that are not patentably distinct from claims in a commonly owned earlier patent.'" Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353, 1363 (Fed. Cir. 2008) (internal citation omitted). There are two steps to a double-patenting analysis. First, the court construes the claims of the commonly owned patents and identifies the differences. See Pfizer, 518 F.3d at 1363 (citing Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 967 (Fed. Cir. 2001)). In the second step of the double patenting analysis, the court determines whether the differences between the claims render them patentably distinct. See Eli Lilly, 251 F.3d at 968. A later claim that is obvious over, or anticipated by, an earlier claim is not patentably distinct from it. See Id .

         B. Obviousness

         A patent claim is invalid as obvious under 35 U.S.C. § 103 "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. § 103; see also KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406-07 (2007). The determination of obviousness is a question of law with underlying factual findings. See Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1359-60 (Fed. Cir. 2012). "The underlying factual inquiries include (1) the scope and content of the prior art; (2) the differences between the prior art and the claims at issue; (3) the level of ordinary skill in the art; and (4) any relevant secondary considerations ...." Western Union Co. v. Money Gram Payment Sys., Inc., 626 F.3d 1361, 1370 (Fed. Cir. 2010) (citing Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966)).

         A court is required to consider secondary considerations, or objective indicia of nonobviousness, before reaching an obviousness determination, as a "check against hindsight bias." See In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1078-79 (Fed. Cir. 2012). Relevant secondary considerations include commercial success, long felt but unsolved needs, failure of others, praise, unexpected results, and copying, among others. Graham, 383 U.S. at 17-18; Ruiz v. A.B. Chance Co., 234 F.3d 654, 662-63 (Fed. Cir. 2000); Tex. Instruments, Inc. v. U.S. Int'l Trade Comm 'n, 988 F.2d 1165, 1178 (Fed. Cir. 1993). Secondary considerations of nonobviousness are important because they "serve as insurance against the insidious attraction of the siren hindsight...." W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1553 (Fed. Cir. 1983).

         A patentee is not required to present evidence of secondary considerations. See Prometheus Labs., Inc. v. Roxane Labs., Inc., 805 F.3d 1092, 1101 (Fed. Cir. 2015). That said, if the patent challenger establishes a prima facie case of obviousness, "the patentee would be well advised to introduce evidence sufficient to rebut that of the challenger." Id. (quoting Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1360 (Fed. Cir. 2007)). There must be enough evidence, however, for a finding that a given secondary consideration exists by a preponderance of the evidence. See Apple, Inc. v. Samsung Elec. Co., Ltd., 839 F.3d 1034, 1053 (Fed. Cir. 2016) (en banc). If there is, then the probative value of each secondary consideration will be considered in light of the evidence produced. That does not mean, though, that the burden of persuasion on the ultimate question of obviousness transfers to the proponent of the secondary consideration. Pfizer, Inc., 480 F.3d at 1359. That burden stays always with the patent challenger. Id. at 1359- 60.

         A party asserting that a patent is invalid as obvious must "show by clear and convincing evidence that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so." Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1361 (Fed. Cir. 2007). That "expectation of success need only be reasonable, not absolute." Id. at 1364. "Whether an ordinarily skilled artisan would have reasonably expected success .... is measured as of the date of the invention[] . . . ." Amgen Inc. v. F. Hoffman-La Roche Ltd, 580 F.3d 1340, 1362 (Fed. Cir. 2009).

         C. Infringement

         A patent is infringed when a person "without authority makes, uses, offers to sell, or sells any patented invention, within the United States ... during the term of the patent...." 35 U.S.C. § 271(a). A two-step analysis is employed in making an infringement determination. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370 (1996). First, the court must construe the asserted claims to ascertain their meaning and scope. See Id . The trier of fact must then compare the properly construed claims with the accused infringing product. See Id . This second step is a question of fact. Bai v.L&L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998). "Literal infringement of a claim exists when every limitation recited in the claim is found in the accused device." Kahn v. Gen. Motors Corp., 135 F.3d 1472, 1477 (Fed. Cir. 1998). "If any claim limitation is absent from the accused device, there is no literal infringement as a matter of law." Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000). The patent owner has the burden of proving infringement by a preponderance of the evidence. See SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988).

         35 U.S.C. § 271(b) provides that "[w]hoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). "In order to prevail on an inducement claim, the patentee must establish first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement." ACCO Brands, Inc. v. ABA Locks Mfrs. Co., 501 F.3d 1307, 1312 (Fed. Cir. 2007) (internal quotation marks omitted). In other words, "inducement requires evidence of culpable conduct, directed to encouraging another's infringement, not merely that the inducer had knowledge of the direct infringer's activities." DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc). "[S]pecific intent may be inferred from circumstantial evidence where a defendant has both knowledge of the patent and specific intent to cause the acts constituting infringement." Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325, 1342 (Fed. Cir. 2008). "[L]iability for induced infringement can only attach if the defendant knew of the patent and knew as well that 'the induced acts constitute patent infringement.'" Commil USA, LLC v. Cisco Sys., Inc., 135 S.Ct. 1920, 1926 (2015) (quoting Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2068 (2011)). The knowledge requirement may be satisfied by showing actual knowledge or willful blindness. See Global-Tech, 131 S.Ct. at 2068 (2011).

         In Hatch-Waxman cases alleging that a proposed drug label will induce infringement by physicians, "The pertinent question is whether the proposed label instructs users to perform the patented method." AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1060 (Fed. Cir. 2010). "The label must encourage, recommend, or promote infringement." Takeda Pharm. USA, Inc. v. West-Ward Pharm. Corp., 785 F.3d 625, 631 (Fed. Cir. 2015). "The mere existence of direct infringement by physicians, while necessary to find liability for induced infringement, is not sufficient for inducement." Id. Rather, "specific intent and action to induce infringement must be proven." Id. (internal quotation marks omitted). Even where a proposed label does not explicitly track the language of a claimed method, a package insert containing directives that will "inevitably lead some consumers to practice the claimed method" provides sufficient evidence for a finding of specific intent. See AstraZeneca, 633 F.3d at 1060; see also Abraxis Bioscience, Inc. v. Navinta, LLC, 630 F.Supp.2d 553, 570 (D.N.J. 2009) ("Statements in a package insert that encourage infringing use of a drug product are alone sufficient to establish intent to encourage direct infringement."), rev'd and vacated on other grounds, 625 F.3d 1359 (Fed. Cir. 2010).

         II. VALIDITY OF THE '772 PATENT

         A. Findings of Fact

1. The '990 patent is a proper double-patenting reference for the '772 patent.
2. The '772 and '990 patents are both assigned to Novartis.
3. Each of claims 8, 9, 11-21, 25, and 27-35 of the '990 patent discloses all limitations of claims 1-3 and 10 of the '772 patent.
4. Each of claims 25 and 27-35 of the '990 patent discloses all limitations of claim 7 of the '772 patent.

         B. Conclusions of Law

         Prior to trial, the parties stipulated that the '990 patent discloses all limitations of claims 1-3, 7, and 10 of the '772 patent, and that the two patents are assigned to the same entity and share named inventors.[3] (D.I. 152 at 5). The parties further stipulated "that if the Court finds the '990 patent is a proper double-patenting reference to the '772 patent, then the claims of the '990 patent will render the Asserted Claims invalid for non-statutory double patenting." (Id. at 4). Therefore, the only issue to be decided is whether the '990 patent is a proper double-patenting reference.

         The unusual facts of this case are the result of the Uruguay Round Agreements Act ("URAA"), which changed how patent terms are determined, effective as of June 8, 1995. Any patent issuing from an application filed prior to June 8, 1995, received a term of seventeen years from the date of issuance or twenty years from the earliest effective filing date, whichever was longer. 35 U.S.C. § 154(c)(1). Patents issuing from post-URAA applications receive a term of twenty years from the earliest effective filing date. 35 U.S.C. § 154(a)(2).

         The issue in this case is that, through the operation of the URAA, the '772 patent, which issued from an earlier filed application, has a later expiration date than the later-filed '990 patent.

         The application that issued as the '772 patent was filed on April 7, 1995 with an earliest effective filing date of September 24, 1993. (D.I. 152 at 6). This pre-URAA patent received a term of seventeen years from its issue date of September 9, 1997. (Id. at 6-7). Although the original expiration date of this patent was, therefore, September 9, 2014, it received a patent term adjustment of five years pursuant to 35 U.S.C. § 156 so that it now expires on September 9, 2019. (Id. at 7).

         The application that issued as the '990 patent began life as a divisional of the application that issued as the '772 patent. (Id. at 8). This application was filed in 1997, making it a post-URAA patent. It also has an earliest effective filing date of September 24, 1993. (Id.). This patent, therefore, received a term of twenty years from the earliest effective filing date and expired on September 24, 2013. (Id.).

         While the Federal Circuit has not addressed the precise issue presented in this case, the Court has addressed the issue of whether a later-filed but earlier expiring patent can serve as a double-patenting reference for an earlier-filed but later-expiring patent. Gilead Sciences, Inc. v. Natco Pharma Ltd., 753 F.3d 1208, 1212 (Fed. Cir. 2014). The patents at issue in Gilead were both post-URAA patents that were not part of the same family and, therefore, had different priority dates. Id. at 1210. The different priority dates led to a situation where the later-filed patent expired before the earlier-filed patent. Id. The Gilead court emphasized that the "bedrock principle of our patent system" that the prohibition on double patenting seeks to protect is the idea that when a patent expires, the public is entitled to use the invention and any obvious modifications of the invention claimed in the patent. Id. at 1214. According to the Federal Circuit, what matters in a double patenting analysis, at least for post-URAA patents, is the expiration dates of the patents. Id. at 1215. The Federal Circuit has since revisited this question and made explicit that "the doctrine of obviousness-type double patenting continues to apply where two patents that claim the same invention have different expiration dates." AbbVie, Inc. v. Mathilda & Terence Kennedy Inst, of Rheumatology Trust, 764 F.3d 1366, 1374 (Fed. Cir. 2014).

         Significant to the instant case is the fact that the Gilead decision cites to a Board of Patent Appeals and Interferences ("BPAI" or "Board") decision with substantially similar facts to the instant case. Id. at 1211 n.2. In that case, the Board found that a later-filed post-URAA patent with an expiration date in 2015 could serve as a double-patenting reference for an earlier-filed pre-URAA patent with an expiration date in 2019. Ex Parte Pfizer, Inc., Patent Owner & Appellant, 2010 WL 532133, at *16 (Bd. Pat. App. & Interf. Feb. 12, 2010). The Board found that the later-expiring pre-URAA patent would "extend Appellant's right to exclude the public from practicing" the invention. Id. at *21. This, the Board concluded, was "precisely what obviousness-type double patenting was intended to prevent." Id. This is the same reasoning applied by the Gilead court. Gilead, 753 F.3d at 1214.

         Other district courts have considered cases with facts substantially identical to the instant case. In Janssen, the district court faced the same question and, in light of the Federal Circuit's decision in Gilead, reached the conclusion that a later-filed post-URAA patent with an earlier expiration date is a proper double-patenting reference for an earlier-filed pre-URAA patent with a later expiration date. See Janssen Biotech, Inc. v. Celltrion Healthcare Co., Ltd., 2016 WL 5698362 (D. Mass. Sept. 28, 2016), appeal docketed, No. 17-1120 (Fed. Cir. Oct. 25, 2016). Other district courts have also reached the same conclusion on identical facts. See MLC Intellectual Property, LLC v. Micron Technology, Inc., 2016 WL 4192009, at *3 n.4 (N.D. Cal. Aug. 9, 2016) ("The fact that the patents in Gilead were governed by the URAA was not relevant to the Court's reasoning."); DDB Technologies, LLC v. Fox Sports Interactive Media, LLC, 2014 WL 12167628, at *3-4 (W.D. Tex. May 15, 2014) (applying reasoning from Gilead that "expiration date of the patents should control").

         Plaintiffs expend considerable effort attempting to distinguish this case from Gilead. Plaintiffs argue first that Defendants have misread Gilead. (D.I. 170 at 8). According to Plaintiffs, double-patenting is an equitable doctrine requiring Defendants to prove that the patentee has obtained an unjustified extension of patent rights. (Id. at 11). Plaintiffs argue strenuously that there has been no unjustified extension of patent rights in this case. (Id. at 15). I disagree. Gilead reaffirms the long-standing principle that when a patent expires, the public is entitled to make use of the claimed invention. Gilead, 753 F.3d at 1214. The "unjustified extension of patent rights" here is the extension on the patent holder's term of exclusivity past the expiration date of a patent that discloses the invention. The patentee in this case chose to seek two patents on the same invention. If the term of one of those patents is allowed to extend past the expiration date of the other, the patentee has obtained an unjustified extension of patent rights.

         Plaintiffs next argue that Gilead and Abb Vie are inapplicable because the patentees in those cases engaged in gamesmanship, acting strategically to obtain the benefit of a later expiration date. (D.I. 170 at 8-11). According to Plaintiffs, Novartis's actions here are unlike those of the patentees in Gilead and Abbvie because Novartis did not violate any of the principles of double patenting. (Id. at 14). Plaintiffs further argue that Novartis has not engaged in gamesmanship. (Id. at 21). I disagree that there is no violation of double patenting principles and I find the argument about the absence of gamesmanship irrelevant. A patentee need not engage in gamesmanship or act strategically in order to violate the principles of double patenting. Neither Gilead nor AbbVie held that gamesmanship is required. A patentee can obtain an unjustified extension of patent rights without engaging in gamesmanship simply by seeking two patents on the same invention, as the patentee did here. The only relevant issue is the earlier expiration date of the '990 patent, as it is the extension of the period of exclusivity by virtue of the '772 patent's later expiration date that violates the principles underlying the double patenting prohibition. The patentee's motives are not relevant.

         Plaintiffs next argue that expiration dates alone do not control the double patenting analysis. (D.I. 170 at 17). According to Plaintiffs, the holdings and reasoning in Gilead and AbbVie are limited to the specific factual contexts of those cases. (Id. at 17-18). While it may be true that Gilead did not establish a hard and fast rule that expiration dates control the double patenting analysis, I am not persuaded that the facts of this case require a different analysis. I think that the reasoning in Gilead is equally applicable to the facts of this case for the reasons I have already stated.

         Plaintiffs next argue that application of Gilead to the facts of this case would frustrate legislative intent. (D.I. 170 at 19). Plaintiffs contend that allowing an earlier-expiring post-URAA patent to serve as a double patenting reference for a later expiring pre-URAA patent would effectively shorten the statutorily mandated terms of pre-URAA patents. (Id. at 19-20). Plaintiffs' argument misses the mark.[4] A patentee who chooses to seek a second patent for an obvious variant of his invention, as the patentee did here, runs this risk and cannot claim in retrospect that only the later-expiring patent counts.

         Plaintiffs next argue that there is no harm to the public because "Novartis has not enjoyed more than one patent term per invention." (Id. at 20). According to Plaintiffs, the '772 patent's expiration date "is the same as it would have been had the '990 patent never issued." (Id.). This argument also misses the mark. The patentee chose to file the application that matured into the '990 patent. The patentee knew when the '990 patent issued on August 27, 2002 that it would expire before the '772 patent, which had issued five years earlier. The harm to the public lies in the inability to make use of an invention disclosed in an expired patent. That the '772 patent's expiration date would be ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.