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Impax Labs., Inc. v. Lannett Holdings Inc.

United States District Court, D. Delaware

March 29, 2017

Impax Labs., Inc., AstraZeneca AB, and AstraZeneca UK Ltd., Plaintiffs,
v.
Lannett Holdings Inc. and Lannett Co., Inc., Defendants.

          Steven J. Balick, Esq., Tiffany Geyer Lydon, Esq., Andrew C. Mayo, Esq., Ashby & Geddes, Wilmington, Del.; Jim Hurst, Esq., Marcus E. Sernel, Esq., Alyse Wu, Esq., Kirkland & Ellis LLP, Chicago, Ill; Stefan M. Miller, Esq., Ashley Borom, Esq., Sam Kwon, Esq., Kirkland & Ellis LLP, New York, N.Y., attorneys for Plaintiffs Impax Labs., Inc., AstraZeneca AB, and AstraZeneca UK Ltd.

          Seth A. Niederman, Esq., Austen C. Endersby, Esq., Fox Rothschild LLP, Wilmington, Del.; Joseph F. Posillico, Esq., Frank Carroll, Esq., Fox Rothschild LLP, Philadelphia, Pa.; Michael W. Glynn, Fox Rothschild LLP, New York, N.Y., attorneys for Defendants Lannett Holdings, Inc., and Lannett Co., Inc.

          TRIAL OPINION

          ANDREWS, U.S. DISTRICT JUDGE

         Plaintiffs Impax Laboratories, AstraZeneca UK ("AZUK"), and AstraZeneca AB ("AZAB") brought suit against Defendants Lannett Holdings, Inc. and Lannett Company, Inc. for infringement of U.S. Patent Nos. 6, 750, 237 and 7, 220, 767 ("the Dearn patents").

         The Dearn patents claim invention of a nasal formulation for zolmitriptan. Zolmitriptan is a member of the triptan class of drugs, which treat migraines.

         AstraZeneca Pharmaceuticals LP holds New Drug Application No. 21450 for zolmitriptan nasal spray. Zolmitriptan nasal spray, as well as other zolmitriptan products, are marketed as Zomig. The Dearn patents are listed in the Orange Book as covering Zomig.

         Plaintiffs brought this infringement suit after Defendants filed Abbreviated New Drug Application No. 206350. Defendants stipulated to infringement.[1] (D.I. 136). Defendants argue, however, that (1) Plaintiffs do not have standing to bring suit, (2) the Dearn patents are invalid as anticipated, and (3) the Dearn patents are invalid as obvious.

         The Court held a three day trial on September 6, 7, and 8, with closing arguments on the 9th. I now address each of Defendants' arguments in turn. My findings of fact and conclusions of law are stated below.

         I. Standing

         Defendants challenge Plaintiffs' standing to bring suit. Essentially, Defendants argue that Plaintiffs have failed to establish the exact ownership arrangement of the patents, and, as such, I cannot be sure that all the ownership interests are represented.

         Standing to sue is a jurisdictional requirement under Article III of the United States Constitution. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). In the patent context, standing usually requires the plaintiff to have legal title to the patent. Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010). Further, when ownership is divided, all owners usually must participate as plaintiffs for standing to be proper. See Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481, 1484 (Fed. Cir. 1998).

         Following the bench trial, both parties submitted briefing on standing (D.I. 145, 152, 157)[2] and Plaintiffs submitted a declaration by Amy Allen (D.I. 145-1), the Director of Sales Planning and Operations for AstraZeneca, (Id. at ¶ 1).

         A. Admissibility of the Allen Declaration

         As a preliminary matter, Defendants move to strike the Allen declaration. (D.I. 152 at 17-19). Defendants argue it is unfair to allow Plaintiffs to submit new evidence this late and without an opportunity for them to cross-examine Ms. Allen.

         I do not agree that the admission of the declaration or other evidence of standing is unfair or untimely. While parties are supposed to use the pretrial order process to identify the issues for trial, see D. Del. LR 16(c)(5), 16(d)(4), Defendants did not raise standing as an issue to be tried in the pretrial order (see D.I. 140), and only brought it up at the pretrial conference (D.I. 121 at 24). That is why, at the conference, I told the parties that I did not consider standing an issue for trial. (Id.). It would be unfair to Plaintiffs if, after telling them not to produce evidence of standing at the trial, I then told them they also could not produce evidence of standing outside the trial.

         I do not believe cross-examination of Ms. Allen is necessary to rely on her statements to find standing. Defendants argue that Ms. Allen's prior testimony calls her knowledge into question. (D.I. 152 at 18). Specifically, in her deposition, Ms. Allen stated that she did not know how Zomig came to AstraZeneca. (D.I. 152-2 at 3). She also stated that she was unsure if anyone other than Impax approached AstraZeneca about licensing Zomig. (Id.). Neither issue is at all relevant to the standing question in the case.

         Nevertheless, out of an abundance of caution, if Defendants want to have Ms. Allen testify live, which is not a request they have made, I will schedule such a hearing at a convenient date. In the meantime, I have made a provisional ruling on standing based on the Allen declaration. Defendants have one week to request a hearing. If that hearing so requires, I will reconsider my standing ruling.

         B. Analysis

         On the faces of the Dearn patents, AZAB is the assignee. (See also DX 111 at 30-37 (USPTO Notice of Recordation of Assignment Document)). The patents issued in 2004 and 2007, and they both ultimately relate back to application 10/129, 773, filed on November 28, 2000.

         The patents claim priority from a 1999 United Kingdom patent application, No. 9928578.5. On June 27, 2000, AZUK assigned to AZAB all rights related to the UK patent application. (PX 239). Plaintiffs contend this assignment applies to the Dearn patents. (D.I. 145 at pp. 2-3). The agreement stated that AZUK was granting AZAB "all rights in the Inventions [contained in various patent applications including GB 9928578.5] and its rights to apply for prosecute and obtain patent or similar protection in respect of the Inventions in any and all of the countries of the world...." (PX 239 at pp. 1, 4). The agreement does not appear to contemplate any reservation of interest by AZUK.

         AstraZeneca also contends that a 2002 Patent Administration Services Arrangement applies to the Dearn patents. (D.I. 145 at pp. 6-7; D.I. 145-1 at ¶ 4). The 2002 administration agreement explicitly reserves to AZUK a "beneficial ownership" interest in "certain patent[s]." (PX 240 at 1-2). This agreement does not appear to describe which patents are the "certain patent[s]" covered. (PX 240 at 1). Plaintiffs have proffered no addendum or definitional section showing that the Dearn patents are covered by the 2002 Agreement.

         While AZAB is the assignee of both patents and the 2000 assignment agreement purports to give AZAB all rights in the patents, the 2012 licensing agreement is between AZUK and Impax. (PX 8). The 2012 licensing agreement purports to bind AZUK and its affiliates. (Id. at 60). Affiliates are defined by the agreement as two entities under common control. (Id. at 8). Ms. Allen, who represented AztraZeneca in negotiation of the licensing agreement, stated that AZAB consented to the license. (D.I. 145-1 at ¶ 8). Ms. Allen's declaration also confirms that AZAB and AZUK are commonly owned by AstraZeneca PLC and thus would be affiliates. (Id. at ¶ 7)

         Impax holds an exclusive license. (PX 8 at 61). Ms. Allen also swore in her declaration that the patents have not been further licensed or assigned. (D.I. 145-1 at ¶¶ 9-10).

         Defendants hone in on the gap between AZAB and AZUK. They argue that I cannot be sure that all ownership interests are represented without Plaintiffs having filled this gap. There is no reason to believe, however, that all ownership interests are not represented. I credit Ms. Allen's assertion that AZAB consented to an exclusive license to Impax and that no further assignments of the Dearn patents have been made. Her assertion is bolstered by the fact that Impax was satisfied that it had successfully executed an exclusive license to the patents, which it could not have done had a third party had some interest in them.

         It is possible, based on the documents before the Court, that AZUK has no ownership interest in the patents, in which case AZUK should not be a plaintiff. On the one hand, the 2012 licensing agreement between AZUK and Impax is consistent with Plaintiffs' argument that the 2002 service arrangement covers the Dearn patents. On the other hand, Plaintiffs have offered no proof that the 2002 agreement does, in fact, extend to the Dearn patents. Defendants, however, have not moved to dismiss AZUK, but only to dismiss the case in toto for lack of standing. Because there is a valid assignment of the patents to AZAB, AZAB has consented to an exclusive license to Impax, and there is no evidence that the Dearn patents have been assigned outside of the three plaintiffs, I find that within the plaintiff class there is standing. There is no missing plaintiff. Thus, I have subject matter jurisdiction. As stated earlier, I will reconsider this holding if Defendants request a hearing with Ms. Allen and that hearing necessitates reconsideration.

         II. Invalidity

         Defendants have two invalidity arguments. Defendants argue that two of the asserted claims are anticipated by prior patents. Defendants also argue that all of the asserted claims are obvious in light of the prior art.

         First, I describe the inventions in the asserted claims. Second, I make findings on the person of ordinary skill in the art. Third, I make findings on the scope of the prior art that is relied on for Defendants' anticipation and obviousness arguments. Fourth, I address Defendants' anticipation argument and find that Defendants have failed to prove by clear and convincing evidence that the asserted claims are anticipated. Fifth, I address Defendants' obviousness argument and find that Defendants have failed to prove the patents are obvious by clear and convincing evidence.

         A. The Patents in Suit

         The '767 patent is a continuation of the '237 patent and both generally relate to pharmaceutical formulations of zolmitriptan. Claims 4, 11, 12, and 14 of the '237 patent and claims 6, 14, 15, and 16 of the '767 patent are asserted in this case. (D.I. 151 at 48-49). Claim 14 of the '237 patent and claim 14 of the '767 patent have four and twelve possible iterations respectively.

         Each claim involves zolmitriptan with different combinations of five characteristics: (1) form, (2) pH, (3) buffer, (4) sterility, and (5) packaging.

         All but two claims require a pharmaceutical formulation suitable for intranasal administration. Claims 15 and 16 of the '767 patent require an aqueous solution. Defendants have made no unique invalidity arguments as to Claims 15 and 16. Thus, I will treat them in kind with the other claims.

         The other characteristics are claimed and asserted in the following combinations:

Claim

PH

Buffer

Sterility

Packaging

237 Patent

4

5

( .04)

Buffered

N/A

N/A

11

4.5 to 5.5

Buffered in citric acid and disodium phosphate

N/A

N/A

12

4.5 to 5.5

Buffered in citric acid and disodium phosphate

Sterile

N/A

14(i)

4.5 to 5.5

N/A

N/A

Intranasal administration device packaged to protect the formulation from light

14(ii)

5 ( .04)

N/A

N/A

Intranasal administration device packaged to protect the formulation from light

14(iii)

<7

Buffered in citric acid and disodium phosphate

N/A

Intranasal administration device packaged to protect the formulation from light

14(iv)

4.5 to 5.5

Buffered in citric acid and disodium phosphate

N/A

Intranasal administration device packaged to protect the formulation from light

'767 Patent

6

3.5 to 5.5

Buffered in citric acid and disodium phosphate

N/A

N/A

14(i)

<6

N/A

N/A

Intranasal administration device packaged to protect the formulation from light

14(ii)

3.5 to 5.5

N/A

N/A

Intranasal administration device packaged to protect the formulation from light

14(iii)

<6

Buffered

N/A

Intranasal administration device packaged to protect the formulation from light

14(iv)

3.5 to 5.5

Buffered

N/A

Intranasal administration device packaged to protect the formulation from light

14(v)

<6

Buffered in citric acid and disodium phosphate

N/A

Intranasal administration device packaged to protect the formulation from light

14(vi)

3.5 to 5.5

Buffered in citric acid and disodium phosphate

N/A

Intranasal administration device packaged to protect the formulation from light

14(vii)

<6

N/A

Sterile

Intranasal administration device packaged to protect the formulation from light

14(viii)

3.5 to 5.5

N/A

Sterile

Intranasal administration device packaged to protect the formulation from light

14(ix)

<6

Buffered

Sterile

Intranasal administration device packaged to protect the formulation from light

14(x)

3.5 to 5.5

Buffered

Sterile

Intranasal administration device packaged to protect the formulation from light

14(xi)

<6

Buffered in citric acid and disodium phosphate

Sterile

Intranasal administration device packaged to protect the formulation from light

14(xii)

3.5 to 5.5

Buffered in citric acid and disodium phosphate

Sterile

Intranasal administration device packaged to protect the formulation from light

15

<6.0

Buffered

N/A

N/A

16

3.5 to 5.5

Buffered

N/A

N/A

         B. Person of Ordinary Skill in the Art

         The skilled artisan is an individual with a bachelor's of science or master's degree in pharmacy or chemistry and five years of experience related to pharmaceutical formulations, or a doctorate or medical degree and a lesser degree of experience. The experts did not significantly disagree on the person of ordinary skill in the art. (See Tr. at 409, 689-90). The skilled artisan here need not have a specialty in nasal formulations. (Tr. at 690).

         C. Prior Art

         In assessing Defendants' anticipation and obviousness arguments, first I must make factual findings on the state of the art at the time of invention.[3]Defendants rely on all four references for their obviousness case and the Chauveau and Marquess references for anticipation.

         The priority date for both patents is December 3, 1999, the date of the U.K. patent application. (Tr. 689-90; see '237 Patent; '767 Patent). All asserted prior art predates December 3, 1999, and their status as prior art is not contested.

         i. Sumatriptan Nasal Spray

         As of 1997, a sumatriptan nasal spray was being used to treat migraines. (Tr. at 185).[4] The branded name of sumatriptan nasal spray is Imitrex. (Tr. at 90). As formulated, Imitrex is buffered in disodium phosphate and has an approximate pH of 5.5. (DX 63 at 8; D.I. 146 at 14; D.I. 151 at 35). Imitrex has "a very bad taste, a very bitter taste." (Tr. at 195).

         Both sumatriptan and zolmitriptan are triptans, a migraine specific family of drugs. (DX 117 at pp. 403-04). Sumatriptan was the first to market; zolmitriptan the second. (Id. at p. 403). In 1999, there were seven additional triptans in testing. (Tr. at 213; see also DX 117 at pp. 403-04).

         As I will discuss, zolmitriptan has a more powerful, active metabolite that is created when zolmitriptan passes through the liver. Sumatriptan, in contrast, does not have an active metabolite. (Tr. at 214). Only two other triptans, eletriptan and almotriptan, have active metabolites, but their metabolites "don't really contribute at all to the efficacy of those drugs." (Id.). Zolmitriptan stands alone in the class of triptans as having an active, more potent metabolite. (Id.).

         ii. Chauveau

         U.S. Patent No. 6, 326, 401 (JX 4) and French Patent Application No. 2, 773, 489 (DX 3) (collectively "Chauveau") both claim a pharmaceutical formulation containing Labrasol for oromucosal administration. On both the patent and the application, Jacques Chauveau is the first named inventor. The U.S. Patent claims priority from the French application and the two documents are the same in relevant ...


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