Orange Book Blog

Eli Lilly & Co. v. Teva Pharms. USA, Inc., No. 2009–1071 (Fed. Cir. 2009)

Under the Hatch-Waxman Act, final FDA approval of an ANDA is automatically stayed for thirty months when a patent owner files suit for patent infringement within 45 days of receiving a Paragraph IV notice letter.  The purpose of the stay is to allow the parties to litigate the patent infringement claims while the ANDA filer pursues FDA approval of its generic drug.  Pursuant to 21 U.S.C. § 355(j)(5)(B)(iii), a district court may shorten or lengthen the thirty–month stay if "either party to the action failed to reasonably cooperate in expediting the action."

Today, in a 2–1 decision authored by Judge Rader and joined by Chief Judge Michel, the Federal Circuit affirmed a district court order extending the thirty-month stay of FDA approval of Teva's ANDA for generic Evista (raloxifine hydrochloride) tablets.  Eli Lilly markets Evista for the treatment and prevention of postmenopausal osteoporosis.  Evista accounted for $1.075 billion in sales in 2008.

Thirteen patents are currently listed in the Orange Book for Evista, with expiration dates ranging from 2012 to 2017.  On May 16, 2006, Teva notified Lilly of its Paragraph IV certifications on at least some of the patents.  Lilly sued Teva on June 29, 2006, alleging that Teva's ANDA infringed four method patents.  Thus, the 30–month stay was originally set to expire on November 16, 2008.  The district court scheduled trial to begin on March 9, 2009.

In February 2007, Lilly amended its complaint to assert that Teva infringed three more patents–U.S. Patent Nos. 6,458,811; 6,797,719; and 6,894,064–covering raloxifene particle size and formulations.  On July 8, 2008, Teva amended its ANDA to include a new particle-size measuring methodology for the raloxifene in its generic drug product.  Shortly thereafter, Lilly filed a motion to extend the thirty-month stay, arguing that Teva "failed to reasonably cooperate in expediting the action . . . as evidenced by Teva's last-minute alteration of its proposed drug product and its multiple delays in producing critical discovery . . . [which have] adversely affected Lilly's infringement case and trial preparation."

The district court granted Lilly's motion and extended the thirty-month stay by about four months, to March 9, 2009.  In an order dated October 29, 2008, the court stated:

In light of the fact that Teva has recast its product more than eighteen months after it provided the original sample to Lilly and only eight months before trial is set to commence, we find that, in preparation for trial, Lilly is entitled to have sufficient opportunity to identify the nature and composition of the raloxifene product as Teva intends for it to be sold.

In its decision today, the Federal Circuit concluded that the district court did not abuse its discretion:

In making this determination, the record contained sufficient evidence, not based on clearly erroneous factual findings, upon which the district court rationally based its decision.  The court relied on the evidence in the record that Teva altered its proposed generic raloxifene hydrochloride tablets late in the litigation.  Specifically, Teva changed the particle size manufacturing specification of its active pharmaceutical ingredient and the method of measuring the particle size.  Teva then delivered its changed samples to Lilly past the court’s August 18, 2008, discovery deadline.

Judge Prost dissented, writing that "the district court never made any finding related to the statutory standard, i.e., whether Teva reasonably cooperated in expediting the action."  Moreover, she stated that "the consequences of the majority opinion are of particular importance here" because "this court has not previously provided any guidance to the district courts as to what qualifies as a 'failure to reasonably cooperate in expediting the action.'"  She concluded, "To affirm in this case is to effectively eliminate the statutorily required finding, and to prematurely terminate the development of appropriate standards governing modification under 21 U.S.C. § 355(j)(5)(B)(iii)."

According to the FDA website, Teva's ANDA for generic Evista is tentatively approved.  As a result of today's decision, final approval of Teva's remains stayed until March 9, 2009, when trial is set to begin in the Southern District of Indiana.  According to the district court's order of October 29, 2008, Teva previously "informed Lilly that it will launch its generic raloxifene hydrochloride upon expiration of the statutory stay."

RELATED READING:

• Dow Jones
• Patently-O

Sanofi-Synthelabo et al. v. Apotex, No. 2007-1438 (Fed. Cir. 2008)

In an opinion released last Friday, the Federal Circuit affirmed the decision of the U.S. District Court for the Southern District of New York, following a 2007 bench trial, that Sanofi's U.S. Patent No. 4,847,265 is not invalid for anticipation or obviousness.  The '265 patent covers clopidogrel bisulfate, the active ingredient in Sanofi and Bristol-Myers Squibb's blockbuster heart medication Plavix.  A botched settlement of the case in 2006 led to Apotex's at-risk launch of its generic Plavix, followed by a preliminary injunction against Apotex, and ultimately the departure of executives from BMS.

Claim 3 of the '265 patent is directed to clopidogrel bisulfate:  "Hydrogen sulfate of the dextro-rotatory isomer of methyl alpha-5(4,5,6,7-tetrahydro(3,2-c)thienopyridyl)(2-chlorophenyl)-acetate substantially separated from the levo-rotatory isomer."  Apotex stipulated to infringement and argued that claim 3 is invalid as anticipated by and obvious over Sanofi's U.S. Patent No. 4,529,596, which describes the racemate that includes clopidogrel.

For anticipation, Apotex argued that the '596 patent describes not only the racemate ("PCR 4099"), but also its addition salts and enantiomeric forms.  The district court found that although the racemate is in the prior art, the dextrorotatory enantiomer and salt in claim 3 of the '265 patent are not described, either explicitly or inherently, in any reference.  The court reasoned that the '596 patent would not have guided a person of ordinary skill in the art to either the dextrorotatory enantiomer of PCR 4099 or its bisulfate salt.  On appeal, according to the Federal Circuit, Apotex argued that the district court "erred in law, and that it suffices that the reference shows the specific racemate PCR 4099 and states that the compounds in the reference have enantiomers and that the enantiomers are included in the invention."

The Federal Circuit, however, explained in its opinion that Apotex's view "is not the correct view of the law of anticipation, which requires the specific description as well as enablement of the subject matter at issue.  To anticipate, the reference must not only disclose all elements of the claim within the four corners of the document, but must also disclose those elements arranged as in the claim."  Distinguishing the classic cases of In re Petering (CCPA 1962) and In re Schaumann (CCPA 1978), the court stated, "PCR 4099 is shown in the references as one of several compounds with desirable biological properties, but the district court did not clearly err in finding that the reference disclosure would not have led one of ordinary skill to recognize either an explicit or inherent disclosure of its dextrorotatory enantiomer, as well as the bisulfate salt."  Similarly, consistent with Forest Labs v. Ivax, the court discerned no clear error in the district court's finding that the asserted prior art does not enable one to separate the enantiomers of PCR 4099 without undue experimentation.

With respect to obviousness, the district court "held that the unpredictable and unusual properties of the dextrorotatory enantiomer, and the therapeutic advantages thereby provided, weighed in favor of nonobviousness, and that Apotex had not met its burden of establishing otherwise."  On appeal, Apotex argued "that the only features of clopidogrel bisulfate arguably not explicit in the prior art — the separation of the dextro- from the levorotatory enantiomer and its preparation as a bisulfate salt — required no more than well-known chemical techniques."  Apotex cited known examples of other chiral compounds that exhibit stereoselectivity and that even if some experimentation was required, upon separation of the enantiomers, "routine testing would have revealed the favorable allocation of properties in the dextrorotatory isomer."

In affirming the district court's holding of nonobviousness, the Federal Circuit cited numerous instances where Apotex's expert witnesses appeared to admit the unexpected properties of clopidogrel.  For example, according to the court, Sanofi determined that the enantiomers of PCR 4099 had the "rare characteristic of 'absolute stereoselectivity':  the dextrorotatory enantiomer provided all of the favorable antiplatelet activity but with no significant neurotoxicity, while the levorotatory enantiomer produced no antiplatelet activity but virtually all of the neurotoxicity.  The experts for both sides agreed that while it was generally known that enantiomers can exhibit different biological activity, this degree and kind of stereoselectivity is rare, and could not have been predicted."  In addition, "the experts of both parties agreed that whether a pharmaceutically suitable crystalline salt will form from a particular acid-base combination is unpredictable."  Moreover, "here Sanofi presented evidence that the prior art taught away from the use of sulfuric acid with an enantiomer, for strong acids could encourage re-racemization."

When Apotex launched its generic version of Plavix in 2006, it was able to ship a six-month supply of its generic drug before the district court preliminarily enjoined further sales.  Thus, potential damages could run into the billions of dollars.  Accordingly, it would not be surprising for Apotex to appeal the Federal Circuit decision to the Supreme Court.

RELATED READING:

• Sanofi/BMS press release
• Apotex press release
• Bloomberg article
• Previous OBB posts:  8/8/06 (Apotex launches at-risk); 12/10/06 (Fed. Cir. affirms preliminary injunction); 6/19/07 (district court trial decision); 4/27/08 (Apotex sues to recover 180-day exclusivity)

Takeda v. Mylan and Alphapharm, Nos. 2007-1269, -1270 (Fed. Cir. 2008)

In an opinion released Monday, the Federal Circuit affirmed a district court decision granting $16.8 million for attorney fees, expenses and expert fees to Takeda for baseless paragraph IV certification letters and litigation misconduct by Mylan and Alphapharm in ANDA litigation involving Actos (pioglitazone).  We previously reported on the district court decision here; and on the Federal Circuit briefing here.

With respect to Alphapharm, the Federal Circuit observed that the district court “methodically examined a number of shortcomings in Alphapharm’s Paragraph IV letter, which were made obvious by Alphapharm’s ‘constantly shifting set of arguments,’ that supported the finding that the certification was baseless.”  The court concluded that “the district court correctly found that Alphapharm’s filing would amount to litigation misconduct supporting an exceptional case finding if it were ‘baseless’ and if it ‘failed to present even a prima facie case of invalidity in filing the paragraph IV certification.’”

With respect to Mylan, the Federal Circuit stated, “Mylan’s invalidity argument in its certification letter appears even more baseless than Alphapharm’s.”  Moreover, the court concluded, “the finding that Mylan engaged in litigation misconduct was well-supported and explained by the district court.”  According to the court, “We do not find persuasive Mylan’s argument that the district court took issue with the mere fact that Mylan changed its theory of invalidity and then lost.  Rather, the court determined that Mylan’s initial certification letter was completely baseless and that the claims Mylan offered as substitutes were similarly frivolous.”

The Federal Circuit was similarly unimpressed with the “chilling effect” argument put forward by Alphapharm and Mylan and supported by an amicus brief from GPhA:  namely, that a high fee award would deter paragraph IV ANDA filings.  The court stated, “It is clear from the district court’s opinion that it was not faulting Alphapharm or Mylan for the act of filing an ANDA that challenged the pioglitazone patent, nor did it limit the filers to the theories raised in their certification letters.  Rather, the district court found the case exceptional based on the specific circumstances involved in this case, viz., baseless certification letters compounded with litigation misconduct.”

Finally, the Federal Circuit affirmed the specific amount awarded by the district court, as well the “allocation of two-thirds of the fee burden to Mylan because it acted as lead defense counsel for discovery of the obviousness claims and then added considerably to the complexity of the case with an untimely assertion of an inequitable conduct claim.”