Patent Baristas

In another update to the preliminary injunction issued August 29 in the Apotex case, The Fire of Genius writes that there are two interesting things to note about Judge Stein’s decision: (1) it nowhere mentions the eBay v. MercExchange case, at all (!); and (2) Judge Stein applies the traditional pre-eBay “presumption of irreparable harm” standard.

In eBay, the CAFC had stated that courts must grant preliminary injunctions (alleged) infringers under very weak conditions in ruling that the standards for preliminary injunctions for patents should be as stringent as those in other forms of legal actions. The Supreme Court ruled unanimously that there is no “general rule” to permanently enjoin patent infringement. Instead the Court held that “the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity.”

Here, Judge Stein states that:

Having found that Sanofi has clearly established a likelihood of success on the merits, the Court also finds that Sanofi receives the benefit of a presumption of irreparable harm. Not only does Sanofi receive the benefit of that presumption, but it has also offered independent evidence of irreparable harm, namely, evidence that this Court credits that it will suffer irreversible price erosion, loss of good will, and will be forced to lay off personnel and discontinue research devoted to developing other medical uses for Plavix.

…

Apotex has not produced evidence sufficient to rebut the presumption of irreparable harm to Sanofi, or to adequately explain away the other forms of irreparable harm for which Sanofi has adduced credible evidence.

…

Because Sanofi has demonstrated a likelihood of success on the merits, and thereby secured the statutory presumption of irreparable harm, and has, moreover, proffered further persuasive evidence of irreparable harm, the Court concludes for the purposes of this motion that Sanofi will indeed suffer such harm in the absence of a preliminary injunction.

The order does seem to strengthen Sanofi’s infringement case given that Judge Stein sums up stating that “Sanofi has adequately demonstrated that the questions Apotex raises as to the validity and enforceability of Sanofi’s ‘265 patent are without substantial merit based on the evidence adduced to date, Sanofi has demonstrated a likelihood of success on the merits at trial.”

Apotex tried to get the court to stay the injuction but was turned down. See the motion here.

What a perfect wrap-up for the week before a long holiday weekend. The United States Patent and Trademark Office (USPTO) has released for public comment a draft five-year strategic plan designed to “foster American innovation and competitiveness at home and around the globe.” We’re fostering everyone else’s innovation now? The draft plan identifies quality and timeliness of the patent and trademark review processes through 2012.

The proposals included in this draft strategic plan include:

First, there must be a common understanding between the USPTO and its stakeholders of what defines quality. That definition must recognize the inherent realities of limited time and money, and must then be translated into concrete programs.

Defining an acceptable time frame from filing to final decision also is important.

Additionally, hiring, training and retaining highly skilled patent examiners, abolishing the one-size fits all examination system, focusing examination on the claimed invention, and leveraging state-of-the-art information technology are other important components to ensuring high quality and timely reviews of patent applications.

Included among the draft proposed initiatives designed to ensure effective and efficient review of patent applications are:

• hiring at least 1,000 patent examiners annually for the next five years;
• consideration of establishing regional offices;
• creating partnerships with universities;
• offering retention bonuses and new monetary awards to patent examiners for meeting goals; and
• maximizing the potential of state-of-the-art electronic tools.

Jon Dudas says “The U.S. intellectual property system is critical to American innovation and competitiveness.” Apparently, that’s why he’s hell-bent on making it impossible to get a patent by introducing ideas like the proposed rules to limit the number of continuing, CIP and RCE applications that can be filed by patent applicants. We only wish they could put such efforts into the “Tanorexia Threat Level” panic.

A copy of the USPTO’s draft proposed five-year strategic plan can be found here.

U.S. District Judge Sidney H. Stein in Manhattan issued an injunction blocking the sale of generic Plavix® (clopidogrel bisulfate) after a two-day hearing (Sanofi-Synthelabo v. Apotex Inc., 02cv2255, U.S. District Court for the Southern District of New York). Sanofi-Aventis SA and Bristol-Myers Squibb sought the preliminary injunction against Apotex Inc . to stop sales of the generic drug citing the likelihood that they will prevail in the patent case and that Apotex’s launch last week is causing them irreparable harm. The judge also denied demands by the companies that Apotex be forced to remove from the market the generic product it had already sold to distributors.

The judge said Sanofi had demonstrated that questions Apotex raised as to the validity and enforceability of its patent were without substantial merit and he also concluded Sanofi would suffer irreparable harm if Apotex were permitted to continue selling the generic while any detriment to Apotex was a result of the company’s own calculated risk-taking. The judge also considered the public interest of permitting competition to continue noting that “although there are competing — and substantial — public interests at stake on both sides of this litigation, the balance of those competing public interests slightly favors Sanofi, the public interest in lower-priced drugs is balanced by a significant public interest in encouraging the massive investment in research and development that is required before a new drug can be developed and brought to market.”

The judge said he based his decision on the chances that Apotex could ultimately prove it is entitled to sell its generic drug; the level of irreparable harm each side might suffer; the balance of hardships; and the impact on the public. He also ordered Sanofi to put up bond of $400 million, an amount meant to cover losses Apotex will have suffered if it eventually wins the case. The Canadian drug maker had requested $4 billion; Sanofi and Bristol-Myers argued for $25 million. Apotex said the bond amount was “grossly inadequate” to compensate for the damages it was in jeopardy of incurring, which gives you a glimpse at just what’s at stake in this case – last year’s sales of Plavix were $6.3 billion. It didn’t hurt that an accountant testified for Apotex that the company stood to lose up to $4 billion in costs, future sales and lost opportunity if it was forced to withdraw its drug from the marketplace.

Earlier, Apotex agreed to delay selling its drug in return for a minimum of $40-million from Bristol and Sanofi. In return, Apotex would be allowed to introduce its version of Plavix before the patent expired sometime in 2011. State attorneys general, who must approve arrangements between Bristol-Myers and generic drug makers as a result of earlier litigation, rejected the deal between the drug companies. As we said before, this is far from over since the U.S. Federal Trade Commission has initiated a criminal investigation by the Department of Justice. FBI agents have already confiscated documents at Bristol-Myers’ New York headquarters, and both companies received grand jury subpoenas to determine if the agreement broke antitrust laws.

The disputed patent, U.S. Patent No. 4,847,265 (the ’265 patent), covers Plavix’s main ingredient and does not expire until 2011. The first patent covering Sanofi’s oral antiplatelet chiral drug clopidogrel bisulfate (US 4,529,596), was filed in 1983 and expired in July 2003, and claims both enantiomers and their mixture, whereas the ‘265 patent, due to expire in 2011, claims only the (+)-enantiomer. Apotex claims the ‘265 patent is either invalid or would not be infringed by its proposed generic product.

While Sanofi could win the suit against Plavix over the generic, the preliminary injunction may only buy some extra time. Then again, even if the patent is later upheld in court, penalties would be limited under the terms of its deal with Sanofi and Bristol-Myers.

Apotex said it will appeal and it is filing an emergency motion with the Court of Appeals for the Federal Circuit to stay the injunction pending the appeal.

See earlier posts from the Patent Baristas:

Update: Sanofi and Bristol-Myers File for Preliminary Injunction Against Apotex
Apotex To Launch Generic Plavix At Its Own Risk
FTC Rejects Patent Deal by Bristol-Myers and Sanofi
Does Sanofi-Aventis Patent Settlement With Apotex Reveal a Trend?

Novozymes has won a patent infringement suit against Danisco concerning infringement of a Novozymes patent on enzymes for bioethanol. Danisco has withdrawn the infringing product (Spezyme Ethyl) from the market. Spezyme Ethyl is a thermostable alpha-amylase enzyme for the liquefaction of starch at high temperatures and is used in the production of bioethanol.

Amylase (1,4-a-D-Glucan glucanohydrolase; EC 3.2.1.1) is a digestive enzyme (present in saliva, for example) that breaks down long-chain carbohydrates (such as starch) as an initial step in the production of ethanol from grain starch. In this type of production, corn or starchy grain is ground into flour (“meal”), which is then slurried with water to form a mash. Enzymes are added for the conversion of starch to sugar, the whole mash is processed in a high-temperature cooker and then transferred to fermenters where yeast is added and the conversion of sugar to ethanol and CO2 begins.

Most of the ethanol in the U.S. is made using the dry mill method. In the dry mill process, the starch portion of the corn is fermented into sugar then distilled into alcohol. The starch is usually heated at around 105°C or higher in the presence of thermostable alpha amylase, and then liquefied further at a lower temperature (around 90ºC). The high temperatures help reduce bacteria levels in the mash (high bacteria levels reduce yield).

In March, 2005, Novozymes A/S filed a complaint against Danisco’s subsidiary Genencor in the United States District Court for the district of Delaware for patent infringement under U.S. Patent No. 6,867,031. The complaint, which was filed the same day Novozymes’ patent was issued, focuses on the manufacture, use and or sale of Genencor’s SPEZYME® Ethyl, a high performance amylase enzyme that is sold to the fuel ethanol industry.

The ‘031 patent claims a variant of a parent Bacillus stearothermophilus alpha-amylase. The variant improves the stability of alpha-amylases which are obtainable from Bacillus strains and which themselves had been selected on the basis of their starch removal performance in alkaline media.

The court concluded “that the Defendants have infringed claims 1, 3 and 5 of the ´031 patent, that those claims are valid, and that the ´031 patent is enforceable. Accordingly, this case will proceed to the second phase trial to decide the issues of willfulness and damages.” The size of the damages will be decided in the fall. Novozymes has claimed several million US dollars in damages for loss of profits.

Danisco announced today that the company has withdrawn the product that infringed Novozymes’ patent (Spezym Ethyl)

Novozymes now plans to sell replacement products, Liquozyme and Termamyl, to customers replacing the infringing product that Danisco has withdrawn from the market.

We’ll leave the discussions of the politics and economic long-term viability of bioethanol as an alternate fuel to others.

Last year, we detailed that the U.S. Court of Appeals for the Federal Circuit upheld a trial court decision that three patents held by Purdue Pharma LP couldn’t be enforced because of misrepresentations to the U.S. Patent and Trademark Office about the painkiller’s effectiveness thus giving Endo Pharmaceutical Holdings Inc. the right to sell a generic version. OxyContin, a time-release painkiller generally prescribed to cancer patients and chronic-pain sufferers, had about $2 billion in sales last year.

This was a patent infringement case in which the patents were held unenforceable by the trial court due to inequitable conduct during prosecution before the USPTO. The district court found that Endo would infringe Purdue’s patents, but determined the patents were unenforceable due to the inequitable conduct that occurred during prosecution. Purdue then appealed the inequitable conduct judgment. Purdue Pharma was filed a combined petition for panel rehearing and rehearing en banc.

We then reported that the CAFC granted the panel rehearing and withdrew the previous opinion and issued a new one. The CAFC vacated the trial court’s judgment that the patents-in-suit are unenforceable due to inequitable conduct and remanded the case for further proceedings consistent with this opinion. The trial court’s judgment of infringement was affirmed.

Purdue and Endo have now settled the patent infringement lawsuit between them that was pending in the United States District Court for the Southern District of New York. According to the agreement, Endo will stop selling infringing versions of OxyContin by the end of 2006. In exchange, Purdue Pharma will not pursue damages against Endo for Endo’s past infringement of its OxyContin patents.

On February 1, 2006, the Court of Appeals for the Federal Circuit ruled that Endo’s extended-release oxycodone products infringe the Purdue Pharma patents. In its ruling, the Court also vacated a trial court finding that the Purdue Pharma patents were unenforceable and sent the issue back to the trial court for reconsideration.

Under the terms of the settlement agreement, Endo will no longer dispute that the Purdue Pharma OxyContin patents are valid, enforceable and infringed by Endo’s extended-release oxycodone product. The parties also have agreed to propose to the Court a consent judgment holding that Endo is infringing the Purdue patents and prohibiting Endo from infringing sales after December 31, 2006.

The Position:

PATENT LITIGATION ASSOCIATE with at least three years of experience in patent litigation for our growing Intellectual Property Department in the Cincinnati, Ohio office. Candidates should be enthusiastic team players with a strong technical background, as well as excellent academic credentials, writing and communication skills. Candidates should also enjoy working with quirky individuals like us.

The Place:

Frost Brown Todd LLC is one of the 100 largest law firms in the United States with a top rated Midwest intellectual property practice. Not to mention the home of the Patent Baristas.

The Rest:

To learn more about us and the communities we serve, we invite you to visit our home page at www.frostbrowntodd.com. Send resume, law school and undergraduate transcripts and writing samples to Karen Laymance, Frost Brown Todd LLC, 2200 PNC Center, 201 East Fifth Street, Cincinnati, Ohio 45202 or by email to klaymance@fbtlaw.com.

If you’re familiar with the drug industry, it should come as no great shock that the Generic Pharmaceutical Association (GPhA) disagrees with a report put out by the Pharmaceutical Research and Manufacturers of America (PhRMA).

According to a recent report commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), wholesale price discounts off brand prices on average were 15.8% greater in markets with authorized generics than in those without them.

The GPhA released its own analysis of authorized generics that concluded that the practice of introducing authorized generics (AGs) “significantly reduce incentives for independent generic firms to challenge invalid brand name patents and to develop non-infringing processes.” This analysis also raised questions about the validity of the PhRMA study. The study concluded that, despite PhRMA’s claims to the contrary, “the long-term effect of allowing authorized generics on the market during the 180-day generic exclusivity period will be less competition and reduced access to cheaper drugs.”

The GPhA study of the PhRMA study concluded that the prices consumers pay will be virtually unchanged by the presence or absence of authorized generics (the GPhA claims that much of PhRMA’s alleged “discount” associated with authorized generics is accounted for by higher brand name drug prices). It should be no big surprise that the GPhA also claims that allowing authorized generic entry during the 180-day exclusivity period harms the incentives generic firms have to challenge invalid patents or develop products.

An authorized generic is the brand’s product repackaged and marketed either through a subsidiary or third-party. Because the brand is selling part of its inventory as a generic, it can currently compete with the true ANDA generic during the exclusivity period.

In creating the Hatch-Waxman Act, Congress determined that it was in the best interest of consumers to create the 180-day incentive to encourage generic companies to challenge questionable or frivolous brand pharmaceutical patents as part of the complex, intellectual property-based U.S. generic drug approval process. The 180-day exclusivity provision of the patent challenge process provides the check and balance in the drug patenting process, while also providing generic companies with a mechanism to recoup the significant costs of litigation and provides incentives to challenge more questionable patents in the future.

When authorized generics are marketed during the Act’s 180-day exclusivity period for first generic entrant, they reduce incentives for independent generic firms to challenge brand name patents and to develop non-infringing processes. Supporters argue that authorized generics offer significant consumer benefits.

The Drug Price Competition and Patent Term Restoration Act, known as the Hatch-Waxman Act, added section 505(j) to the Food, Drug, and Cosmetic Act. This created the Abbreviated New Drug Application (ANDA) process. The Hatch-Waxman Act, and specifically the ANDA process, were designed to provide independent generic firms a strong incentive to develop and introduce lower cost generic drugs to consumers. To implement this policy goal, Congress provided that the first generic ANDA filer that challenged an invalid brand name firm patent on which the brand name product relied, or that developed a non-infringing means to produce the same drug, would be granted a 180-day marketing exclusivity period. This process is known as the paragraph IV certification process.

The brand name firm may challenge the generic firm’s paragraph IV certification, claiming that the generic product violates the brand name firm’s patent rights. If a patent infringement action is filed within 45 days by the brand name firm, the FDA may not approve the ANDA for 30 months, or until the patent dispute has been resolved, whichever is sooner.

An ANDA applicant whose ANDA contains a paragraph IV certification is protected from competition from subsequent generic versions of the same drug product for 180-days after either the first marketing of the first applicant’s drug or a decision of a court holding the patent that is the subject of the paragraph IV certification to be invalid or not infringed.

Don’t look for this sparring over authorized generics to end soon. This political football is hotly contested by the generic and brand-name drug companies, due to the billions of dollars at stake. The fact is that the number of authorized generics produced by the name brand companies has increased considerably over the past few years, and the issue will only get hotter. Where brand name drug pipelines are not as full as they could be, these companies will do whatever it takes to hold on to market share.

See the GPhA Report here.

For more on the FTC’s investigation into the matter, see here.

For the bill introduced to limit authorized generics, see here.

In a classic tale of who said what to whom, the Court of Appeals for the Federal Circuit overturned an earlier infringement ruling of Purdue University’s patent by ACell, Inc. and denied adding a Purdue inventor to the ACell patent based in part on the inventor’s testimony to the USPTO. Cook Biotech Inc. and Purdue Research Foundation v. Acell, Inc. et al. (Aug. 18, 2006; 05-1458, -1558, -1559)

The technology involves tissue-engineered biomaterial that was developed by ACell, but allegedly infringed on a patent owned by the Purdue Research Foundation and licensed to Cook Biotech Inc. The graft material can be implanted at the site of an injury or damaged tissue to stimulate a unique healing response. Instead of scar tissue, the extracellular matrix remodels new tissue, allowing the body to heal almost as if it had not been injured.

This was an appeal of a jury’s finding that ACell’s product, ACell Vetâ„¢, infringed U.S. Patent No. 5,554,389, owned by Purdue Research Foundation and that Drs. Badylak and Spievack willfully induced ACell to infringe. Purdue Research Foundation is responsible for Purdue University’s technology-transfer program.

The CAFC found that the district court erred in its claim construction and that the ACell Vetâ„¢ product cannot infringe the ’389 patent. The CAFC also denied Purdue’s appeal of the district court’s rulings in favor of ACell and co-defendants Alan Spievack and Stephen Badylak regarding who was the inventor.

The ’389 patent is directed to a urinary bladder submucosa derived tissue graft composition comprising bladder submucosal tissue “delaminated from the abluminal muscle layers and at least the luminal portion of the tunica mucosa of the urinary bladder tissue,” that can be implanted to replace or support damaged or diseased tissues. Claim 1 is for “A composition comprising urinary bladder submucosa delaminated from both the abluminal muscle layers and at least the luminal portion of the tunica mucosa of a segment of a urinary bladder of a warm blooded vertebrate.” The ’389 patent names four inventors, one of whom is Badylak who assigned his rights to Purdue.

Spievack, a Harvard University professor and surgeon, visited Badylak at Purdue University and discussed his work on graft compositions. Spievack tried to obtain a license from Purdue for non-SIS products but when turned down, he worked on what he considers to be his own UBM technology, the subject of the ’265 patent and U.S. Patent No. 6,579,538 claiming a tissue graft composition including an epithelial basement membrane (UBM).

While the ’265 patent was still pending, Purdue asked the USPTO to declare an interference claiming that four other individuals, including Badylak, were co-inventors with Spievack of the invention claimed in the ’265 patent.

Purdue sought to establish on summary judgment that Badylak is a joint inventor of the ’265 patent alleging that he collaborated with Spievack in developing the urinary bladder as a tissue graft composition. But, since they failed to assert that Badylak is the sole inventor, they were limited to “omitted” inventors.

The district court didn’t buy it based in no small part on the fact that Badylak had filed papers under oath with the PTO in which he denied inventorship of the ’265 patent (oops!).

Whilte Purdue argued that Badylak worked on a graft composition that included the basement membrane as early as 1994 and that Badylak collaborated with Spievack before the priority date of the Disputed Patents, The CAFC was unmoved. Specifically, Purdue argued that the only other evidence offered as corroboration of Spievack’s alleged completion of the invention was Spievack’s unwitnessed laboratory notebooks, which are legally insufficient corroboration.

However, ACell asserted: (1) there is no evidence that Badylak communicated a contribution to Spievack’s invention during the relevant time period, (2) Purdue admitted under oath that Spievack is an inventor of the ’265 patent, (3) the 1994 Disclosure does not reveal a basement membrane composition, and (4) Badylak disavowed any role in the conception of the invention claimed in the ’265 patent in his testimony and in a letter he sent to the PTO.

The CAFC held that:

First, we do not read Purdue’s brief as challenging the district court’s determination that Spievack is an inventor of the ’265 patent. In fact, Purdue admitted as much when it represented that Spievack was a co-inventor in an application it submitted to the PTO to provoke an interference with the ’265 patent.

Second, the only record evidence argued by Purdue to create a genuine issue of material fact is the 1994 Disclosure and Spievack’s testimony in which he stated that “[Badylak] and I had talked about the basement membrane stuff somewhere along in ’97 and ’98, because I know at some point I had told him about my―the studies I had done in Boston with the dog bladders that we were talking about.” (Spievack Dep. 38:4-7, Aug. 24, 2004.) Spievack’s testimony, however, is not sufficient to create a genuine issue of material fact as to whether Badylak contributed “to the conception of the claimed invention that is not insignificant in quality” by sharing his knowledge of graft compositions, some of which is reflected in the 1994 Disclosure. See Eli Lilly & Co. v. Aradigm, 376 F.3d 1352, 1358-59 (Fed. Cir. 2004). This is especially so in light of Badylak’s disavowal of having conceived of, reduced to practice, or recognized the importance of a basement membrane graft composition.