Orange Book Blog

At the intersection of Patent and FDA Law

Recent Posts

  • Abbott Labs Under Scrutiny for Alleged Antitrust Violations

    Abbott Laboratories is currently fighting antitrust allegations relating to two of its best-selling drugs: Norvir, a protease inhibitor used in AIDS treatment, and Hytrin, a drug used to treat enlarged prostate and hypertension.

    Last week the Wall Street Journal ran a cover story on the Norvir case entitled "Inside Abbott’s Tactics to Protect AIDS Drug."  According to the article, in December 2003 Abbott quintupled the price of Norvir in order to protect sales of Kaletra, its more profitable AIDS medication.  Other options that Abbott considered but ultimately rejected included withdrawing Norvir from the market entirely and selling Norvir only in a liquid formulation that one Abbott executive said tastes "like someone else’s vomit."  The article is based on previously undisclosed Abbott documents (available at WSJ.com with a subscription).  Abbott’s price hike has sparked an investigation by the Illinois Attorney General’s office, as well as federal antitrust lawsuits.

    At the same time, Abbott is fighting allegations of unlawful monopolization in connection with Hytrin.  Kaiser Foundation Health Plan, a health care provider, is the plaintiff in the case.  According to Kaiser’s appeal brief, filed with the 9th Circuit last November, "Abbott extended its Hytrin monopoly by seeking objectively invalid new patents and gaming the regulatory system to delay generic competition for four additional years."  In addition, Kaiser alleged that Abbott paid Geneva Pharmaceuticals (now Sandoz) not to sell a generic version of Hytrin, "thereby violating Section 1 of the Sherman Act."  Abbott successfully defended itself in the district court by invoking Noerr-Pennington immunity, which protects petitioning the government from antitrust liability.

    RELATED READING:

    NOTE:  Thanks to David Balto for providing a copy of the Hytrin brief.

  • Supreme Court Reshapes Declaratory Judgment Jurisdiction in Patent Cases

    MedImmune v. Genentech et al., 549 U.S. ___ (2007)

    The U.S. Supreme Court handed down its highly anticipated decision in MedImmune v. Genentech today, holding by an 8-1 majority that a patent licensee is not required to terminate its license agreement before seeking a declaratory judgment that the subject patent is invalid, unenforceable, or not infringed.  (Click here for opinion; click here for dissent; click here for syllabus.)  Consistent with the Court's recent suspicion of patent quality generally, this decision will make it much easier for parties to challenge the validity of patents in court.

    The Petitioner, MedImmune, manufactures Synagis, a drug used to prevent respiratory tract disease in infants.  MedImmune entered into a license agreement with respondent, Genentech, that covered an existing patent ("Cabilly I") relating to the production of chimeric antibodies, as well as a pending patent application ("Cabilly II") relating to coexpresion of immunoglobulins in host cells.

    When Cabilly II issued as a patent, in 2001, Genentech sent a letter to MedImmune stating that Synagis was covered by it and therefore MedImmune owed royalties.  MedImmune, however, believed the Cabilly II patent was invalid and unenforceable, and therefore thought it should not owe any royalties.  Nevertheless, MedImmune considered Genentech's letter to be a clear threat to enforce the Cabilly II patent, and rather than risk treble damages, attorney fees, and an injunction prohibiting the sale of Synagis (which has accounted for 80% of MedImmune's sales), MedImmune paid the royalties to Genentech "under protest and with reservation of all its rights."

    MedImmune proceeded to sue Genentech for a declaratory judgment that the Cabilly II patent was invalid, unenforceable, and not infringed by MedImmune's sales of Synagis.  However, the district court dismissed MedImmune's complaint based on the Federal Circuit's decision in Gen-Probe v. Vysis (Fed. Cir. 2004), which held that a patent licensee in good standing cannot establish an Article II case or controversy with regard to validity, enforceability, or scope of the patent because the license agreement "obliterates any reasonable apprehension" of suit.  The Federal Circuit affirmed the district court, also relying on Gen-Probe.

    Now that the Supreme Court has reversed the Federal Circuit, the case will be remanded and MedImmune will have its day in court.  Moreover, the Federal Circuit will be forced to reexamine its "reasonable apprehension of suit" test for declaratory judgment jurisdiction in patent cases, at least insofar as it applies the test to licensees.  It remains to be seen whether the Federal Circuit will go further than that, and perhaps discard the reasonable apprehension test entirely.

    RELATED READING:

  • LSI’s Biotechnology 2007 Conference, January 28-29, 2007, San Francisco

    Law Seminars International will present its “Biotechnology 2007: Key Legal and Business Developments” conference January 28-29, 2007, in San Francisco.  Speakers include outside and inside counsel, biotechnology industry executives, and financiers.

    The first day of the conference will focus on legal developments important to the biotechnology industry, while the second day will focus on business and financing issues.  Specific talks of interest include:

    • “New Developments and the Realities of Dealing with the FDA in Today’s Regulatory Environment”
    • “Is a Thriving Generic Biotechnology Industry Just Around the Corner?” (which I’ll be presenting)
    • “Recent Federal Circuit and Supreme Court Cases Affecting Biotech Companies”
    • “Understanding the Venture Capital Climate for Biotechs Today:  What Are VC’s Looking For?”
    • “Comprehensive IP Strategies: Understanding the Ins and Outs of Your IP”

    The full program is available here.  Additional details and registration information are available on the conference website.

  • Federal Circuit Sides With Abbott in Biaxin XL Case Against Andrx

    Abbott Labs. v. Andrx Pharms. et al., No. 06-1101 (Fed. Cir. 2006)

    Abbott Labs is fending off multiple generic challenges to Biaxin XL (clarithromycin extended-release tablets), an antibiotic with annual sales of over $300 million in the United States.  Companies that have filed ANDAs for generic versions of Biaxin XL include Ranbaxy, Teva, Andrx, Roxane, and Sandoz.

    In Abbott’s case against Teva, Abbott lost a motion for a preliminary injunction on grounds that its patents on Biaxin XL were likely invalid.  Shortly after the Federal Circuit affirmed that decision, Abbott and Teva reached a settlement.  In Abbott’s case against Ranbaxy, the district court held that two of Abbott’s patents were likely unenforceable.  Now, in a unanimous opinion released last Friday, the Federal Circuit has affirmed a preliminary injunction that Abbott won against Andrx.

    On appeal, Andrx presented two main arguments:  (1) based on the findings made in Abbott’s cases against Teva and Ranbaxy, Abbott was collaterally estopped from asserting the patents in suit against Andrx; and (2) given the district court’s construction of the claim term "pharmaceutically acceptable polymer," Andrx’s generic version of Biaxin XL does not infringe the claims under the doctrine of equivalents.

    With regard to Andrx’s first argument, the Federal Circuit found that in the Teva and Ranbaxy cases, "the district court judge did not intend to ‘firmly and finally resolve the issue’ for which preclusion is asserted," as required by the Supreme Court’s Blonder-Tongue decision.  Furthermore, the court found that this case did not "present the rare circumstance in which a determination made during a preliminary injunction is sufficiently final to be accorded preclusive effect."  Therefore, the court held that Abbott was not collaterally estopped from asserting the patents in suit against Andrx.

    In addressing Andrx’s noninfringement argument, the Federal Circuit first reviewied the district court’s construction of the claim term "pharmaceutically acceptable polymer."  The court found that the district court contrued this term too narrowly, in part because it read Markush group language from the specification into the claim:

    The term ‘Markush group’ does not have any meaning within the context of a written description of a patent and therefore to the extent the district court relied on the Markush group language to limit its construction to the compounds listed in the written description, it erred.

    The court then proceeded to reject Andrx’s noninfringement position, which was based on the "specific exclusion principle" and the "doctrine of claim vitiation."  Accordingly, the court found that Andrx’s generic Biaxin XL formulation could be shown to be equivalent to Abbott’s claimed formulation.

    RELATED READING:

  • New Academic Work Sheds Light on Big Pharma Patenting Activity, Reverse Payment Settlements

    People in academia seem more interested lately in the activities of the pharmaceutical industry.  Kyle Jensen, a Research Affiliate at the Harvard-MIT Division of Health Sciences & Technology, and C. Scott Hemphill, an Associate Professor of Law at Columbia, recently contacted me and let me know about their work.

    Dr. Jensen and his group analyzed drug approval and patent data since 1982 to learn how the pharmaceutical industry uses patents.  Their findings include:  most approved drugs are protected by very few patents (2.69 patents on average); "platform technologies" are rare (most patents cover only one approved drug); drug companies are generally self-sufficient (the NDA filer owns all of the patents listed for a given NDA 60% of the time), but collaboration is still necessary; and certain families of drugs are protected by "patent thickets."  Dr. Jensen’s work can be read by clicking here.

    Prof. Hemphill is interested in reverse payment settlements of Hatch-Waxman litigation, in which the innovator company pays the generic company to delay launching its generic drug.  Prof. Hemphill calls these "pay-for-delay" settlements.  His analysis of the Hatch-Waxman Act reveals that certain features of the Act widen the potential for anticompetitive harm from pay-for-delay settlements and that the Act reflects a congressional preference for litigated patent challenges over negotiations between litigants.  Prof. Hemphill reaches a conclusion that is even more strongly anti-settlement than the FTC’s position:  "a settlement should be accorded a presumption of illegality as an unreasonable restraint of trade if the settlement both restricts the generic firm’s ability to market a competing drug and includes [any] compensation from the innovator to the generic firm."  Prof. Hemphill’s paper can be read by clicking here.

    Both Dr. Jensen and Prof. Hemphill would welcome any feedback about their work.

  • Savient Loses Motion for Preliminary Injunction in Oxandrin Case, Launches Authorized Generic, and Halts Promotion of Branded Oxandrin

    Savient Pharms. v. Sandoz, No. 07-1081 (Fed. Cir.)

    On December 28, 2006, the Federal Circuit Court of Appeals denied Savient Pharmaceuticals’ motion for a preliminary injunction, pending appeal, to prevent Sandoz and Upsher-Smith from marketing their generic Oxandrin (Oxandrolone) products.  Oxandrin, with annual sales of $60 million, is indicated for the promotion of weight gain following extensive surgery, chronic infection, or severe trauma.

    Savient appealed an earlier district court decision and had moved the Federal Circuit for a preliminary injunction, pending that appeal.  Although Savient may still pursue its appeal if it so chooses, the December 28th Order left Sandoz and Upsher-Smith free to launch their generic Oxandrin products.

    In response to the Federal Circuit’s decision, Savient announced in a December 29 press release that Watson Pharmaceuticals has launched an A-B rated authorized generic of oxandrolone tablets.  Additionally, Savient announced in a press release today that it "will discontinue its 19 person Oxandrin field sales force."  It appears that Savient is content to profit from its authorized generic deal with Watson, and will cease promotion of the branded product.

    RELATED READING:

  • ACI’s 3rd National Conference on Life Sciences IP Due Diligence, January 22-23, 2007, San Francisco

    American Conference Institute has announced that its 3rd National Conference on Life Sciences IP Due Diligence will take place in San Francisco on January 22-23, 2007.

    This event features leading IP practitioners and experienced in–house counsel from the West Coast who will address some of the unique challenges facing companies when conducting IP due diligence, including such important matters as:

    • PTO reform and new case law;
    • preparing for a future due diligence review from the target’s perspective;
    • creating a checklist;
    • protecting attorney-client privilege;
    • and performing Freedom to Operate searches.

    The event features special sessions on “Getting the Target’s House in Order” and “Conducting Due Diligence from the Suitor’s Perspective.”  In addition, there will be a panel on “Real Life Case Studies Where the Due Diligence Went Terribly Wrong.”

    Additional details are available on the conference website.

  • Lilly Prevails Over IVAX, Teva, and Dr. Reddy’s in Zyprexa Appeal

    Eli Lilly & Co. et al. v. Zenith Goldline Pharms. et al., Nos. 05-1396, -1429, and -1430 (Fed. Cir. 2006)

    Yesterday the Federal Circuit affirmed Eli Lilly’s April 2005 district court victory in its dispute with ANDA filers Zenith Goldline (now IVAX), Teva, and Dr. Reddy’s over generic Zyprexa.  The patent-in-suit, U.S. Patent No. 5,229,382, claims the the active ingredient in Zyprexa, olanzapine, and its use to treat schizophrenia.

    Lilly developed olanzapine in the early 1990s.  The drug proved to be a safe alternative to clozapine and other thienobenzodiazepines that Lilly had previously developed.  The opinion, written by Judge Rader for a unanimous panel, addresses inherent anticipation, obviousness, experimental use negation, and inequitable conduct.

    I. Inherent anticipation

    The defendants had argued that olanzapine was inherently anticipated by a 1980 journal article that identified compounds in the same family.  The defendants argued that disclosure of a set of structurally similar compounds is sufficient for inherent anticipation, even when the prior art discloses no genus containing the patented compound.  They cited In re Petering, 301 F.2d 676 (CCPA 1962), and In re Schaumann, 572 F.2d 312 (CCPA 1987), to support their argument.  The Federal Circuit distinguished these cases, however.

    Petering had addressed a situation where the prior art had not merely disclosed a broad disclosure of a genus, but had actually disclosed a set of compounds such that they formed a class containing only twenty compounds.  In Schaumann, the prior art disclosed compounds that differed only by a single variable, such that only a limited number of compounds was encompassed by the implied class.  In contrast, the 1980 journal article disclosed a wide-ranging series of clozapine-like compounds.  Any genus implied by the class would have included millions of compounds.  And the article gave no indication that the substituents could be interchanged.  Although the journal article did disclose the ethyl homolog of olanzapine, the discussion indicated that the homolog was excluded from the class of preferred compounds.

    The defendants’ basic proposition appears to remain intact: that inherent anticipation does not require express disclosure of a genus containing the compound.  Disclosure of structurally similar compounds may be sufficient to anticipate if (i) the disclosure implies a sufficiently limited genus containing the patented compound; and (ii) the disclosure does not exclude the patented compound from membership in a preferred class.

    II. Obviousness

    The defendants made several obviousness arguments.  The court held that the prior art references generally taught away from modifying the disclosed compounds to reach olanzapine.  Prior to Lilly’s development of olanzapine, those of skill in the art believed that the therapeutic effect of clozapine-like compounds depended on the presence of an electron-withdrawing group at the 7-position of the benzene ring.  (Olanzapine has a hydrogen at this position.)  Even though one reference disclosed the ethyl homolog of olanzapine, the court held that one of skill in the art would have modified the ethyl homolog by adding an electron-withdrawing group at the 7-position rather than replacing the ethyl with methyl.

    III. Other arguments

    The defendants had also asserted that Lilly had used olanzapine in public in violation of the public use bar.  The court held that Lilly’s clinical trials were not public, and would have been protected as an experimental use (even if they had been conducted in public).

    The defendants had also made three different inequitable conduct arguments.  The court held that none of the conduct cited by defendants was material to patentability.

  • ACI’s Pharma/Biotech Industry Forum on Patent Portfolio Management, February 27-28, 2007, New York City

    American Conference Institute will present its "Pharma/Biotech Industry Forum on Patent Portfolio Management" conference in New York City on February 27-28, 2007.

    Many commercialized drugs are born in universities.  Pharma/biotech companies face budget constraints, so they turn to universities to come up with early-stage drugs that the companies then refine.  But such tech transfer deals between industry and universities are not being made as frequently as they should be.  Each side is struggling with how to bridge the technology/innovation gap between discovery and commercialization.

    Years ago, the model was as follows: a university would have early-stage venture capitalists start companies on concepts or exciting results.  Some would succeed and many would fail, but then those technologies would form the pipeline picked up by established companies. This model no longer works. Companies and VCs now want phase II drugs and/or want to license discoveries further along in the pipeline, and this is not what universities do.  Companies and VCs have moved away from licensing early-stage life science technologies, and these are exactly the types of discoveries that universities are seeking to license.  The result: it’s more difficult to get deals done and company pipelines are bare.

    The Pharma/Biotech Industry Forum on Patent Portfolio Management will address the ongoing concern associated with how the target market (collectively) gets promising early scientific results developed to the point where a company wishes to take over the project.  Another topic will be the inherent culture clash between industry and academia: academia wants to educate, disseminate and publish, and industry wants to gain competitive advantage from control over the IP.

    The conference is targeted at licensing executives and in-house counsel for medium-to-large biotechnology companies and large pharmaceutical companies, as well as research institutions with technology transfer/licensing offices, and outside attorneys who represent any of the parties to such deals.

    Additional details are available at the conference website.

  • District Court Denies Abbott’s TRO Motion in Biaxin XL Case Against Sandoz

    Savient Pharms. v. Sandoz, No. 05 C 5373 (N.D. Ill. 2006)

    In a short opinion and order signed last Friday, Judge David H. Coar of the U.S. District Court for the Northern District of Illinois denied Abbott Labs’ motion for a Temporary Restraining Order aimed at keeping Sandoz from launching its generic version of Biaxin XL (extended-release clarithromycin tablets). Biaxin XL, which is used primarily to treat bacterial infections of the skin and upper respiratory system, has annual sales of $255 million in the United States.

    Besides Sandoz, Teva has filed an ANDA for generic Biaxin XL.  In Abbott’s litigation against Teva, Judge Coar granted Abbott’s motion for a preliminary injunction.  However, last summer the Federal Circuit vacated that decision, holding that Teva had raised a substantial question regarding the validity of Abbott’s U.S. Patent No. 6,010,718.  Abbott asserted the same patent against Sandoz, and while Judge Coar found that the Federal Circuit decision did not preclude Abbott’s assertion that there were no substantial questions of validity (because it was a ruling made in connection with preliminary relief), he stated that "the practical effect of that court’s holding still militates toward the denial of the TRO in the instant case."

    Judge Coar wrote:

    Given the holding of the Federal Circuit Court of Appeals and the deference owed thereto, this Court will not reach a result inconsistent with that holding absent a substantial showing that on a more complete record, the Federal Circuit would have reached a different result.  While Abbott has put forth argument and suggests some evidence that the Teva Case’s analysis may have been flawed, on the limited record in the TRO hearing, this Court is not persuaded that the Federal Circuit’s reasoning is not controlling in this (Sandoz) case as to the likelihood of prevailing on the invalidity claims.

    Abbott and Teva settled their litigation shortly after the Federal Circuit decision in that case (link). Abbott’s case against Sandoz now proceeds toward trial.