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Novartis Pharmaceuticals Corp. v. Accord Healthcare Inc.

United States District Court, D. Delaware

June 24, 2019

NOVARTIS PHARMACEUTICALS CORPORATION, Plaintiff,
v.
ACCORD HEALTHCARE INC., et al., Defendants.

          MEMORANDUM ORDER

          HONORABLE LEONARD P STARK UNITED STATES DISTRICT JUDGE

         Having considered the parties' briefing (D.I. 358, 458, 514) and having conducted an evidentiary hearing and heard oral argument on June 21, 2019, IT IS HEREBY ORDERED THAT Plaintiffs motion for a preliminary injunction (D.I. 357) is GRANTED.

         IT IS FURTHER ORDERED THAT the parties shall submit a joint status report by Friday, June 28, 2019. That status report shall address, in addition to anything else the parties wish to raise, (a) whether the trial date should be accelerated; (b) how long the parties are likely to need for their trial presentations; (c) the amount of bond the Court should require Plaintiff to post; and (d) whether any discovery disputes remain ripe and require judicial attention.

         The Court's decision to grant the preliminary injunction was, as stated as the conclusion of the hearing, for the following reasons:

         First I want to note I carefully considered all the materials that were in the record, including the voluminous record that you all created before today and, of course, everything that was cited in court today. That includes, but is not limited to, the various declarations of the witnesses, the deposition testimony, many documents, and the testimony that I got to hear live today.

         The legal standards I think are not disputed, but let me just try to quickly note them for the record.

         A preliminary injunction, of course, is an extraordinary remedy that should be granted only in limited circumstances. Deciding whether to grant a preliminary injunction requires consideration of whether the moving party can prove the following. A reasonable likelihood of success on the merits, irreparable harm if the injunction is not granted, a balance of hardship tipping in its favor, and the injunction's favorable impact on the public interest. Although the factors are not applied mechanically, a movant must establish the existence of both of the first two factors to be entitled to a preliminary injunction.

         In the context of this suit, which is a patent infringement action, with respect to the likelihood of success on the merits, Novartis as the moving party must show both, one, it is likely to prove that the proposed generic product will infringe the asserted patent claim on which the motion is based, and, two, that defendants' challenges to the validity of the patent lack[] substantial merit.

         Having applied that law to the facts as best as I could, my decision is to grant the motion for a preliminary injunction. Let me try to explain why.

         First, turning to likelihood of success on the merits, I find that Novartis has met its burden to demonstrate a likelihood of success on the merits. Infringement is not contested for purposes of the preliminary injunction motion, so I need not address it any further. The issue, of course, is invalidity, and on invalidity, I have made a preliminary assessment as I'm required to do on defendants' three challenges. Anticipation by Kappos 2006, lack of adequate written description, and lack of enablement or utility.

         At one level I think it is fair to say that there is a "substantial question of patentability." [But] I don't think that that is a fair description when that phrase is used in the manner that I understand it to be pertinent to the preliminary injunction analysis. That is, I don't think that defendants' invalidity contentions as argued here today are frivolous. If I were to permit summary judgment practice in this case, the defendants' invalidity defenses might very well survive a summary judgment motion. It's even possible, despite what I'm about to say, that defendants might prevail on one or more of their invalidity theories after trial, but having considered the evidence and the arguments before me at this stage, my finding is that defendants are not at all likely to prevail at trial on invalidity.

         That is, I am persuaded by Novartis that at trial, defendants will likely fail to persuade me by clear and convincing evidence that the asserted claims of the '405 patent are invalid due to anticipation by Kappos 2006, or due to lack of adequate written description, or due to lack of enablement and utility.

         Having made that finding, I believe that plaintiff has done what the law requires it to do on likelihood of success on the merits when confronted with a challenge to the validity of its patent at the preliminary injunction stage. That's my understanding of what the Federal Circuit has told us is the legal standard at this stage. For instance, in the Titan Tire decision, 566 F.3d at page 1372, a 2009 decision, [1] the Federal Circuit told us that what the Court must do is "determine whether it is more likely than not that the patent challenger will be able to prove at trial by clear and convincing evidence that the patent is invalid." And, again, my finding for reasons I'm going to now try to explain is for the plaintiff, applying that standard.

         Highly relevant to my finding on likelihood of success on the merits is that the defendants have proposed the wrong person of ordinary skill in the art, the wrong POSA. I am persuaded instead by plaintiff that the PTAB's definition of a POSA is correct here. It is a team that includes not just a clinician, but also a pharmacologist. I've been using a shorthand here, as I hope you will appreciate. As a formal matter, I'm adopting the specific definition of a POSA proposed by the plaintiff.

         I've reached this conclusion for at least the following reasons. The patent contains parts that would be best understood by a pharmacologist even though the claims are principally directed to treatment and therefore to a clinician.

         For instance, a pharmacologist is needed to understand the link between the EAE discussion of the specification and human dosing. Some of the prior art listed on the face of the patent and considered by the PTO is .. . pharmacological work relating to fingolimod. The invention as a whole is directed to a team which would necessarily include a pharmacologist for all the reasons that plaintiff has given, which are all well supported in the record.

         Defendants did not present any evidence from a pharmacologist or from the perspective of a pharmacologist. Therefore, they did not provide any evidence from the perspective of a POSA. Their expert, Dr. Hoffman, candidly admitted he doesn't know how a pharmacologist would interpret the patent. This alone I think is likely a sufficient basis to find that defendants are not likely to prevail on their invalidity challenges at trial. But I am not resting my decision solely or even principally on my finding regarding a POSA.

         I will now turn to the three specific invalidity defenses that defendants have argued, and I find again that defendants are ...


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