Orange Book Blog

At the intersection of Patent and FDA Law

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  • Teva’s Victory Over Apotex in Fight for Generic Pravachol Exclusivity Survives Appeal

    The Court of Appeals for the D.C. Circuit today upheld an FDA rule stating that a district court order dismissing a patent suit for lack of subject matter jurisdiction is not a "court decision" under the Hatch-Waxman Act, and is therefore insufficient to trigger the first ANDA filer’s 180-day exclusivity period.  The case is Apotex v. FDA, No. 06-5105 (D.C. Cir. June 6, 2006).

    This case has a long and winding history.  According to the court’s opinion (which was filed per curium), Apotex first initiated a separate lawsuit in order to sabotage Teva’s 180-day exclusivity period for a generic version of BMS’s Pravachol:

    Teva filed the first ANDA to market a generic version of Pravachol . . . .  BMS’s patent on the Pravachol molecule expired on April 20, 2006, at which point Teva expected to roll out its product and take advantage of its 180-day exclusivity period.  But one of Teva’s competitors had other plans.  In an effort to trigger Teva’s 180-day exclusivity period long before Teva could market its generic product, Apotex, Inc., appellant herein, filed suit against BMS in the Southern District of New York in October 2003 seeking a declaratory judgment that its own generic version of Pravachol did not violate various BMS patents.  . . .  BMS and Apotex ultimately resolved the dispute by agreeing to a "stipulation and order" stating that BMS had no intention of suing Apotex and that the complaint should be dismissed "for lack of subject matter jurisdiction."

    Apotex then asked the FDA whether the signed stipulation and order triggered Teva’s 180-day exclusivity period for generic Pravachol.  The FDA answered "yes," based on the D.C. Circuit’s holdings in two previous cases, Teva I and Teva II.  Teva’s 180-day exclusivity period had therefore long since expired.  Teva responded by filing suit against the FDA.  In Teva III, the court held that "FDA mistakenly thought itself bound by our decisions" and that its "error rendered its decision arbitrary and capricious."

    On remand from Teva III, the FDA reversed itself, finding Apotex’s "stipulation and order" insufficient to trigger Teva’s 180-day exclusivity.  Justifying this reversal, it re-adopted its earlier rule (challenged in Teva I and Teva II) that a triggering "court decision" must include an "actual ‘holding’ . . . evidenced by language on the face of the court’s decision showing that the determination of invalidity, noninfringement, or unenforceability has been made by the court."  According to the D.C. Circuit, "Given the vagaries of patent law and FDA’s lack of expertise in patent matters, the agency explained that inquiring into the estoppel effects of representations embodied in district court opinions would spawn litigation and lead to unpredictability in the marketplace."

    Apotex then filed this lawsuit, challenging FDA’s decision in Teva III as arbitrary and capricious, and the district court granted Teva’s motion to intervene.  Apotex then moved for a temporary restraining order and a preliminary injunction forbidding FDA from allowing Teva to begin exclusive marketing of a generic version of Pravachol.  The district court denied the motion (click here for opinion), reasoning that Apotex had no chance of prevailing on the merits.  Apotex then appealed to the D.C. Circuit, which today summarily affirmed the district court’s refusal to grant the preliminary injunction.

    In affirming the lower court, and upholding the FDA rule established in Teva III, the D.C. Circuit rejected Apotex’s argument that "FDA’s decision merely regurgitates the same tired explanations and rationales that this Court previously rejected" in Teva II.  Instead, the court found that the FDA offered a better justification for its rule than it had previously, in Teva I and Teva II.  According to the court, whereas the FDA had previously justified its rule on the basis that FDA had insufficient resources to inquire into the legal effects of settlements, the FDA this time thoughtfully reasoned that an FDA inquiry into a court-ordered dismissal of a patent suit would be fraught with uncertainty.

    The court explained:  "FDA is indisputably correct that equitable estoppel in the patent law context rarely presents pure issues of law amenable to easy resolution.  . . .  We have little doubt that applying this standard would force FDA, an agency lacking patent law expertise, to resolve borderline questions about the estoppel effects of patent-holder declarations."  The court continued:

    As FDA sees it, the uncertainty inherent in an estoppel-based inquiry would lead to two inter-related problems, neither of which relates to the drain-on-resources rationale set forth . . . in Teva II.  First, FDA believes that the uncertainty would "undermine marketplace certainty and interfere with business planning and investment."  And second, FDA worries that forcing it to parse court decisions will invite fruitless litigation from generic drug manufacturers seeking to trigger, or to avoid triggering, exclusivity periods.

    The D.C. Circuit concluded:  "In our view, these perfectly reasonable propositions adequately support FDA’s position that an estoppel-based approach to the court decision trigger is ill-advised."  The court also quickly disposed of three other arguments Apotex had offered against the FDA rule.

    Teva began shipping its generic Pravachol drug products in April, after the district court denied Apotex’s motion for a TRO and preliminary injunction.  Teva’s 180-day generic exclusivity period is set to expire in October.  Having now lost its appeal, it is unclear whether Apotex will press forward with the case in the district court.

    Thanks very much to Kurt Karst for providing a copy of today’s D.C. Circuit opinion.

    RELATED READING:

  • FDA Releases Omnitrope Citizen Petition Response

    Last Tuesday, on the same day the FDA approved Sandoz's application for Omnitrope, a recombinant human growth hormone (rhGH) that Sandoz is calling the first-ever "biogeneric" drug, the FDA also released a 53-page response to a series of citizen petitions that had opposed FDA approval of Omnitrope.  Consistent with its approval of Sandoz's Omnitrope application, the FDA denied the citizen petitions.  Sandoz filed its application for Omnitrope in 2003; the citizen petitions were filed by Pfizer, Genentech, and the Biotechnology Industrial Organization (BIO) in 2003 and 2004.

    The citizen petitions primarily objected to Sandoz's reliance on the FDA's finding of safety and effectiveness of Genotropin, Pfizer's rhGH, which is approved for the same indications that Sandoz sought for Omnitrope (pediatric and adult growth hormone deficiencies).  The BIO petition went a bit further, requesting the FDA to refuse any application for a therapeutic protein product that relies on information contained in another approved application.

    Sandoz filed its application for Omnitrope approval under section 505(b)(2) of the FFDCA, which allows for NDA's containing full reports of safety and effectiveness in which at least some of the information required for approval comes from non-applicant studies and for which the applicant has not obtained a right of reference.  505(b)(2) applications are sometimes also referred to as "paper NDA's." 

    The FDA has interpreted this section to mean that a 505(b)(2) NDA applicant can rely on published literature that describes the study result, or on a reference to FDA's finding of safety and effectiveness of a previously approved drug, provided such reliance is scientifically justified and the 505(b)(2) applicant complies with the applicable statutory requirements regarding patent certification.

    Among other arguments, the citizen petitions asserted that it was not scientifically justifiable to find that Omnitrope and Genotropin were similar enough to satisfy the requirements of section 505(b)(2), and that the only possible way to compare the two drugs to find such similarly would be to access Pfizer's proprietary information submitted in the Genotropin NDA, in order to assess manufacturing differences between the two rhGH's.

    In denying the citizen petitions, the FDA found that Sandoz had provided adequate data, including Sandoz's own clinical trial data, to establish that its reliance on the FDA finding of safety and effectiveness for Genotropin was justified without the need to access any proprietary Pfizer information.  This finding was made, in spite of acknowledged manufacturing differences between Omnitrope and Genotropin, based on the highly similar nature of the end products, which the FDA characterized as "relatively simple recombinant proteins." It appears this statement is based on the fact that Omnitrope is a non-glycosylated recombinant protein.  Thus, glycosylated recombinant proteins may face stricter FDA scrutiny under 505(b)(2).

    Thanks very much to a helpful reader for sending us a copy of the FDA citizen petition response!

    RELATED READING:

    • Pfizer's citizen petition and related comments are available here
    • Genentech's citizen petition and related comments are available here
    • BIO's citizen petition and related comments are available here
    • Comments relating to FDA's public workshop on biogenerics are here

  • FDA Approves First Biogeneric Drug–Or Does It?

    Sandoz announced Wednesday that the FDA has approved Omnitrope, Sandoz’s recombinant human growth hormone drug product.  According to Sandoz’s press release, the FDA approval is “precedent-setting” because Omnitrope is the first “follow-on version of a previously approved recombinant biotechnology drug” (or “biogeneric”).  Omnitrope is similar to Pfizer’s Genotropin.

    The FDA, however, disputes Sandoz’s claim.  According to a FDA Question and Answer sheet released on Tuesday, Omnitrope is not a generic biologic because it “is not rated as therapeutically equivalent to (and therefore substitutable for) any of the other approved human growth hormone products.”  The Q&A sheet states, “Omnitrope is more appropriately characterized as a ‘follow-on protein product,’” several of which have previously been approved by the FDA.

    Moreover, according to the FDA, the approval of Omnitrope does NOT create a new pathway for biogenerics.  The agency states:  “There is no abbreviated approval pathway analogous to 505(b)(2) or 505(j) of the [Food, Drug, and Cosmetic] Act for protein products.”  The FDA believes that such approval would require new legislation.

    FDA approval of Omnitrope follows an April 10, 2006, decision by the U.S. District Court for the District of Columbia requiring the FDA to make a decision on Sandoz’s Omnitrope application, which had been held up for years.

    GPhA, the trade group representing generic drug makers, released a statement hailing the FDA’s decision to approve Omnitrope, though PhRMA, the trade group representing innovator drug companies, released no statement one way or the other.

    RELATED READING:

  • Antitrust Case Against Abbott Moves Forward: Were TriCor Formulation Changes Illegal?

    In an opinion released last Friday, Judge Kent A. Jordan of the U.S. District Court for the District of Delaware denied Abbott’s motion to dismiss numerous antitrust claims in Abbott Labs et al. v. Teva Pharms. et al., No. 02-1512.

    The antitrust claims were originally brought by Teva and Impax as counterclaims in patent infringement litigation concerning Abbott’s TriCor (fenofibrate) drug product, a treatment for high cholesterol and triglycerides.  Later, various pharmacies and third-party payors filed related antitrust claims against Abbott, and those cases were consolidated with the patent infringement cases.  The antitrust plaintiffs are seeking treble damages from Abbott.

    Teva and the other antitrust plaintiffs allege that Abbott responded to the threat of generic entry by changing the formulation of TriCor, not to improve the product but simply to prevent generic formulations from becoming AB-rated for substitution with TriCor.  Pharmacists may substitute a generic equivalent for a branded drug only if the generic drug has been AB-rated by the FDA, which means not only that the generic drug is bioequivalent to the branded drug, but also that the generic has the same form, dosage, and strength.

    If true, Teva’s allegations reveal how Abbott employed some very creative "life-cycle management" strategies for TriCor:

    • 1998:  Abbott receives FDA approval for TriCor capsules;
    • 1999:  Teva files ANDA for TriCor capsules, with Paragraph IV certification to U.S. Pat. No. 4,895,726, covering the TriCor capsule formulation;
    • 2000:  Abbott sues Teva for patent infringement, initiating a 30-month stay;
    • early 2001:  Abbott files a new NDA for 54 mg and 160 mg TriCor tablets, submitting capsule safety and efficacy data as support;
    • Sep. 2001:  FDA approves Abbott’s TriCor tablets NDA; Abbot withdraws capsules from market and changes the code for TriCor capsules in the National Drug Data File ("NDDF") to "obsolete," meaning pharmacies can no longer fill TriCor prescriptions with a generic capsule formulation;
    • Mar. 2002:  N.D. Ill. grants summary judgment of non-infringement to Teva in the capsule litigation;
    • Apr. 2002:  FDA approves Teva’s ANDA for TriCor capsules;
    • Jun. 2002:  Teva files ANDA for 54 mg and 160 mg TriCor tablets, with Paragraph IV certification;
    • Oct. 2002:  Abbott sues Teva for infringing its patents on TriCor 54 mg and 160 mg tablets, initiating another 30-month stay;  Teva files counterclaims for antitrust violations;
    • Mar. 2003:  Fed. Cir. affirms summary judgment in capsule litigation;
    • 2003-2005:  Abbott files a new NDA, for 48 mg and 145 mg TriCor tablets, seeking a label change stating that the new tablets need not be taken with food (the "no food effect label");
    • May 2005:  D. Del. grants partial summary judgment of non-infringement to Teva in the tablets litigation; FDA then grants final approval to Teva’s ANDA for 54 mg and 160 mg TriCor tablets; Abbott voluntarily dismisses remaining patent infringement claims.

    Teva is pursuing ten separate antitrust claims against Abbott, including Sherman Action monopolization and sham litigation violations, Walker Process violations, and state law tortious interference with valid business expectations.  In opposition to Teva’s motion to dismiss, Abbott unsuccessfully argued that changing its TriCor formulation did not violate federal antitrust law; that any actions taken in its patent infringement litigation are immune under the Noerr-Pennington doctrine because Teva did not adequately plead the litigation was a sham; and that the state law allegations failed to state a claim.

    While acknowledging that "[o]ne of the benefits of competition is the introduction of new, improved products," the court relied on the Microsoft case, 253 F.3d 34 (D.C. Cir. 2001) and the "nature of the pharmaceutical drug market," to determine that Teva’s antitrust counterclaims should proceed and be analyzed under the "rule of reason."  According to Judge Jordan’s opinion, "The per se standard proposed by Defendants presupposes an open market where the merits of any new product can be tested by unfettered consumer choice.  But here, consumers were not presented with a choice between fenofibrate formulations.  Instead, [Abbott] allegedly prevented such a choice by removing the old formulations from the market while introducing new formulations.

    As the antitrust case moves forward, "Plaintiffs [will] not [be] required to prove that the new formulations were absolutely no better than the prior version or that the only purpose of the innovation was to eliminate the complementary product of a rival.  Rather, as in Microsoft, if Plaintiffs show anticompetitive harm from the formulation changes, that harm will be weighed against any benefits presented by Defendants."

    RELATED READING:

  • Prominent Senator Proposes Compulsory Licensing of Patented Drugs

    Vermont Senator Patrick Leahy, co-chairman of the Intellectual Property Subcommittee of the Senate Judiciary Committee, introduced a bill last week entitled "Life-Saving Medicines Export Act of 2006."  If enacted, the bill would provide for compulsory licensing of patented medicines (including vaccines and diagnostic tests) in the United States.  According to a statement from Sen. Leahy's office, the bill "allows U.S. companies to make low-cost generic versions of patented medicines for export to impoverished nations that face public health crises but cannot produce those life-saving medicines for themselves."

    Sen. Leahy's office also released a summary of the bill providing some details of the proposal.  Under the bill, the Director of the U.S. Patent and Trademark Office (USPTO) would be required to issue a compulsory license to U.S. generic drug companies to make and export patented medicines under several conditions, including:

    • the generic company must have made efforts to license directly from the patent holder;
    • the compulsory license cannot exceed seven years, although it can be extended once;
    • re-export of any drugs is prohibited;
    • the generic company must pay a royalty to the patent holder, not to exceed 4% of the commercial value of the exported medicine; the royalty rate will be determined  by the Director of the USPTO.

    The summary posted on Sen. Leahy’s web site provides no information about reporting requirements to be imposed on the generic drug companies that obtain compulsory licenses.

    UPDATE:

  • FDA Appeals Decision on Generic Zocor to D.C. Circuit

    The FDA has appealed the decision in Ranbaxy v. Leavitt to the D.C. Circuit Court of Appeals.  On May 1st, the district court in the case found that by denying Ranbaxy’s and Teva’s citizen petitions, the FDA improperly stripped the companies of their 180-day marketing exclusivity rights for generic Zocor.  The citizen petitions had asked the FDA to relist Merck’s patents on Zocor in the Orange Book.  The FDA denied the petitions, and so Ranbaxy and Teva sued the FDA in federal court.  The parties have agreed to an expedited appeal schedule.

    In addition, Teva announced that it has received tentative approval from the FDA for its generic Zocor products.  Merck’s final patent on Zocor is set to expire on June 23, 2006, and analysts expect Teva and Ranbaxy to launch generic Zocor on or shortly after that date.  Teva would have generic exclusivity on four dosage strengths, while Ranbaxy would have exclusivity on a fifth dosage strength.  Zocor is the world’s second-biggest selling drug (behind Pfizer’s Lipitor), with $4.6 billion in annual sales.

    LINKS:

  • “Reverse Payment” Settlements: Should Congress Weigh In?

    The Solicitor General's recent recommendation to deny certiorari in FTC v. Schering seems to raise the likelihood that the Supreme Court will decline to hear the case.  If the Supreme Court denies cert, perhaps Congress should consider the policy issues at play.

     

    In FTC v. Schering, the FTC is appealing an Eleventh Circuit decision vacating the FTC's ruling that a settlement of Hatch-Waxman litigation including substantial "reverse payments" from Schering-Plough to two generic challengers violated the unfair competition laws.  The Solicitor General's brief is one of several amicus briefs filed with the Court in the case.

     

    The various briefs reveal two competing views of reverse payment settlements:

    1. reverse payments that delay generic market entry for an amount of time greater than the delay would have been in the absence of a payment violate the antitrust laws; and
    2. so long as the exclusionary effects of a settlement agreement do not extend beyond the patent expiration date, the agreement comports with the antitrust laws.

    The FTC and consumer advocate groups tend to hold the first view, while the courts have generally adopted the second.  These competing views highlight the tension between the patent laws (which reward innovation by granting an exclusionary right for a fixed term), the antitrust laws (which prohibit parties with market power from allocating markets among their competitors), and the Hatch-Waxman Amendments (which seek to promote generic drug market entry while rewarding innovation by branded drug makers).

     

    For those groups holding the first view, the public policy goal of bringing generic drugs to consumers at the earliest possible date trumps the other competing issues.  While these groups see reverse payments as particularly egregious, their real issue is that any settlement in which generic entry is potentially delayed is harmful to consumers and should be considered a violation of the antitrust laws.  One problem with this view is that it conflicts with the policy of encouraging settlements of lawsuits; another is that the courts haven’t bought into it.

     

    A branded drug maker is currently entitled, under Hatch-Waxman, to a 30 month stay upon timely filing suit against an ANDA applicant who files a paragraph IV certification.  Accordingly, the FTC and consumer advocate groups would seem most concerned by settlement agreements that extend a branded drug maker's exclusivity beyond the 30 month stay.

     

    One way to reduce incentives for settlements that delay generic market entry beyond the 30 month stay is to require the first ANDA applicant who files a paragraph IV certification ("first filer") to forego all or part of its 180-day exclusivity rights if it enters into such a settlement agreement.  Moreover, all or part of the exclusivity rights would transfer from the first filer to the second ANDA filer.  Assuming the second ANDA has been approved by the FDA, the second filer could begin marketing its generic drug.  If the branded drug maker settles with the second filer, the exclusivity would then pass to the third filer–and so on.

     

    The purpose of the 180-day exclusivity for first filers is, after all, to encourage generic drug companies to challenge weak patents on brand name drugs.  If the generic drug company drops its patent challenge in a settlement agreement, it should lose the exclusivity.  Transferring the 180-day exclusivity to subsequent filers encourages multiple ANDA filings and multiple patent challenges for drugs protected by patents perceived to be weak, which should ultimately bring generic drugs to market sooner.

     

    Comments on the proposal described above are welcome–and encouraged.

     

    RELATED READING:

  • FDA Approves Teva’s Generic Lexapro; Patent Case Still Pending in District Court

    Teva announced Monday that the FDA has granted final approval of generic Lexapro to Teva’s IVAX unit.  Lexapro, manufactured by Forest Laboratories, is a selective serotonin reuptake inhibitor (SSRI) antidepressant, with annual sales of over $2 billion in the United States.  Lexapro sales account for 60% of Forest’s revenue.

    Forest Labs’ patent infringement case against IVAX concerning IVAX’s ANDA for generic Lexapro is still pending before Judge Farnan in the U.S. District Court for the District of Delaware.  See Forest Labs. v. IVAX Pharms., No. 03-891.  A bench trial was held in March, and post-trial briefing was completed last week.  Teva has not announced whether it intends to launch generic Lexapro at risk.

    In the patent case, Forest alleges that IVAX’s ANDA for generic Lexapro infringes U.S. Pat. No. Re. 34,712, which is a reissue patent of U.S. Pat. No. 4,943,590.  The ‘712 patent claims substantially pure (+)-citalopram, the active ingredient in Lexapro, also known as "S-citalopram" or "escitalopram."  (+)-citalopram is also the active ingredient in Forest’s older generation SSRI, Celexa, which is a racemic mixture of (+) and (-) citalopram.  The patents on Celexa have expired.  According to the Orange Book, the ‘712 patent will not expire until June, 2009.  [Update:  An alert reader just informed me that Forest was recently granted a patent term extension.  The ‘712 patent is now set to expire in March, 2012.  Forest announced the extension in a recent press release.]

    In its post-trial brief, IVAX argues that the ‘712 patent is invalid for anticipation and obviousness, invalid for broadening reissue, and unenforceable for inequitable conduct.  In its lead argument, IVAX argues that a prior art reference, Smith, describes (+) and (-) citalopram as individual enantiomers in a form separated from each other.  Forest counters in its post-trial brief that Smith does not anticipate the ‘712 patent because it does not enable one of skill in the art to make substantially pure (+)-citalopram without undue experimentation.

    Based on prior experience with Judge Farnan, a decision in the case may not be announced for six months to a year.

  • Solicitor General Recommends that Supreme Court Deny Certiorari in SKB v. Apotex, Arguing that Federal Circuit’s Inherent Anticipation Finding was Correct

    Responding to the Supreme Court’s invitation, the Solicitor General has filed an amicus brief in SmithKline Beecham v. Apotex.  The Solicitor General recommends that the Supreme Court deny SKB’s petition for certiorari.

    Previously, SKB lost its patent infringement suit against Apotex both in the district court and at the Federal Circuit.  In the suit, SKB alleges that Apotex’s ANDA for a generic version of Paxil infringes SKB’s patent on the hemihydrate form of paroxetine hydrochloride (PHC), the active ingredient in Paxil.  Paxil is a leading anti-depressant drug, with annual sales of over $3 billion.

    This case has a long, somewhat convoluted history, which has been closely tracked by Patently-O.  In 2003, Judge Posner, sitting by designation, found SKB’s patent not infringed.  In 2004, a Federal Circuit panel affirmed the decision, but on different grounds:  the patent was invalid because the invention had been in public use during clinical trials.  In 2005, the full Federal Circuit vacated the panel decision and simultaneously the original panel issued a new opinion, holding that SKB’s patent was invalid as inherently anticipated.

    The Federal Circuit held that a prior art patent inherently anticipated PHC hemihydrate because "the manufacture of PHC anhydrate according to the [prior art] patent necessarily results in the production of PHC hemihydrate."  Further, according to the Federal Circuit, although no one recognized the creation of PHC hemihydrate in the prior art, "inherent anticipation does not require a person of ordinary skill in the art to recognize the inherent disclosure in the art at the time the prior art is created."

    In its petition for certiorari, SKB presented the issue for review as follows:

    Whether the Federal Circuit erred in holding, in conflict with this Court’s decision in Tilghman v. Proctor, 102 U.S. 707 (1881), and its progeny, that the "unwitting" and "unappreciated" prior creation of a product renders a subsequent patent of that product invalid as "inherently anticipated," and thus not novel under Section 102 of the Patent Act.

    The Solicitor General’s brief argues that the Supreme Court has "squarely rejected" the contention that inherent anticipation occurs only if persons skilled in the art recognize the inherent matter at the time the prior art was created; to the contrary, the Court has held that "a characteristic of a pre-existing product is not patentable even if no one had previously recognized that characteristic."  The Solicitor General argues that PHC hemihydrate is a characteristic of PHC because producing PHC inevitably results in PHC hemihydrate.

    Moreover, according to the Solicitor General, the cases cited by SKB "are distinguishable for three reasons:  they did not involve attempts to patent pre-existing products; they did not involve patents that would prevent the public from practicing the prior art; and it was not clear in those cases that the prior art had in fact inevitably produced the allegedly inherent result."

    The following briefs have been filed in the Supreme Court:

    Thanks to an alert reader for bringing the Solicitor General’s brief to my attention!

  • GSK May Be On The Hook for Antitrust Liability Stemming From Wellbutrin SR Patent Litigation

    In this antitrust case, In re Wellbutrin SR Antitrust Litigation, Nos. 04-5525, 04-5898, 05-396 (E.D. Pa.), three classes of plaintiffs, representing direct and indirect purchasers of Wellbutrin SR, as well as Medical Mutual of Ohio, a "third-party payor for Wellbutrin SR," sued GlaxoSmithKline (GSK) for violating various state and federal antitrust laws.  The plaintiffs allege that GSK pursued frivolous patent infringement litigation against several generic drug makers who filed ANDA’s for Wellbutrin SR.  In March of this year, the district judge presiding in the case denied GSK’s motion to dismiss, finding that for the purposes of the motion, GSK’s patent litigation was "sham litigation," and therefore not entitled to Noerr-Pennington immunity from the antitrust laws.

    GSK developed Wellbutrin SR, a sustained release version of its popular Wellbutrin antidepressant, shortly after the last of its Wellbutrin patents expired in 1991.  Wellbutrin SR contains bupropion, the active ingredient, and an excipient known as hydroxypropyl methylcellulose ("HPMC").  In 1993, GSK filed a patent application broadly covering any sustained release formulation of bupropion.  However, the broad claims were rejected, and GSK thereafter narrowed the claims to cover only formulations containing HPMC.  The Patent Office granted GSK a patent on the narrow claims.

    Beginning in 1999, several generic drug makers, including Andrx Pharms., Eon Labs, Impax Labs, Excel Pharms., and Watson Labs filed ANDA’s to market generic versions of Wellbutrin SR containing sustained release excipients other than HPMC.  Accordingly, the generic drug makers filed paragraph IV certifications, alleging that they did not infringe GSK’s formulation patent.  GSK sued each company for patent infringement, thereby earning an automatic 30-month stay of generic approval.  However, in separate decisions, the courts held that GSK’s patent was not infringed.  Subsequently, GSK was sued for antitrust violations based on GSK’s unsuccessful Wellbutrin SR patent litigation.

    GSK moved to dismiss the antitrust case on grounds that its patent infringement suits qualify for Noerr-Pennington immunity, which generally shields from antitrust liability those parties who petition the government for redress.  The antitrust plaintiffs acknowledged that lawsuits are ordinarily protected activity under Noerr-Pennington, but argued that GSK’s infringement actions are subject to the "sham litigation" exception because they were "objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits" and they concealed "an attempt to interfere directly with the business relationships of a competitor, through the use of the governmental process."

    The district court agreed with the plaintiffs.  In particular, the court found that "any reasonable litigant confronting the facts Plaintiffs alleged at the time the infringement suits were filed would have concluded that GSK would be estopped from claiming infringement by equivalence.  Without a viable argument for infringement by equivalence, GSK could not reasonably have expected success on the merits."  The court therefore found GSK’s infringement suits "objectively baseless," and entered an Order denying GSK’s motion to dismiss.

    Last week, the district court denied GSK’s motion to certify the Order for interlocutory appeal to the Federal Circuit, meaning the case now moves forward in the district court.  Stay tuned . . . .

    LINKS: