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Federal Circuit Blocks Generics-Makers, Finds Eisai's Aciphex Drug Patent Valid and Enforceable
Eisai Co. Ltd., et al v. Dr. Reddy's Laboratories, Ltd., et al.
No. 2007-1397, -1398, U.S. Court of Appeals for the Federal Circuit, 07/21/2008
Companies Mentioned: Dr. Reddy's Laboratories, Inc., Dr. Reddy’s Laboratories, Ltd., Eisai Co., Ltd., Eisai, Inc., Teva Pharmaceuticals USA, Inc.
Holding
The U.S. Court of Appeals for the Federal Circuit in this appeal ruled that plaintiff-appellee Eisai's patent relating to its blockbuster anti-gastric acid drug Aciphex was valid and enforceable. Defendant-appellant Dr. Reddy's and Teva earlier attempted to manufacture a generics version of this billion-dollar earning drug under the Hatch-Waxman Act, 21 U.S.C. Section 355 and 35 U.S.C. Section 271 (e), and in the process challenged the validity of patent-at-issue. Unfortunately for them, the U.S. District Court for the Southern District of New York ruled in favor of patentee Eisai. On appeal, the Federal Circuit found that the district court properly concluded that the record did not support a case of obviousness of the patent as a matter of law. With regard to defendants-appellants' charge of inequitable conduct, the district court likewise correctly determined that Eisai' alleged acts during prosecution did not rise to the level of inequitable conduct, absent any proof of deceptive intent. For these reasons, the Federal Circuit affirmed the district court's finding that defendants-appellants failed to prove that the patent was invalid for obviousness or unenforceable for inequitable conduct.
Detailed Summary
On summary judgment, the district court found in favor of plaintiffs Eisai Co., Ltd. and Eisai, Inc. (collectively “Eisai") with respect to the validity and enforceability of 552 patent. Opinion, pp. 1-2, citing Eisai Co. v. Teva Pharms. USA, Inc., No. 03 Civ. 9223 (S.D.N.Y. Oct. 5, 2006); Eisai Co. v. Dr. Reddy’s Labs., Ltd., No. 03 Civ. 9053 (S.D.N.Y. Oct. 5, 2006).
After a bench trial, the district court found that Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively “Dr. Reddy’s") and Teva Pharmaceuticals USA, Inc. ("Teva") had failed to prove the remaining allegations of inequitable conduct, and that Eisai had established that Dr. Reddy’s and Teva infringed Eisai’s ’552 patent. Id., citing Eisai Co. v. Dr. Reddy’s Labs, Ltd., No. 03 Civ. 9053 (S.D.N.Y. May 11, 2006).
The ’552 patent claims rabeprazole and its salts. Rabeprazole is part of a class of drugs known as proton pump inhibitors, which suppress gastric acid production by inhibiting action of the enzyme H+K+ATPase. Rabeprazole’s sodium salt is the active ingredient in Aciphex, a pharmaceutical approved in 1991 by the FDA for the treatment of duodenal ulcers, heartburn, and associated disorders. Aciphex has been a commercial success, garnering over $1 billion in worldwide yearly sales. Id.
Dr. Reddy’s and Teva each filed Abbreviated New Drug Applications (ANDAs) under the Hatch-Waxman Act, 21 U.S.C. § 355 and 35 U.S.C. § 271(e), seeking to manufacture a generic version of Aciphex before the expiration of the ’552 patent. Because filing an ANDA is an artificial, but legally cognizable, act of patent infringement, Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1344 (2004), Eisai filed suit against Dr. Reddy’s and Teva.
Both Dr. Reddy’s and Teva conceded infringement of six claims of the ’552 patent, but asserted that the ’552 patent is unenforceable for inequitable conduct. Id., p. 3, citing Trial Order at 6-7. Dr. Reddy’s stipulated to the validity of all six of the ’552 patent’s claims, but Teva argued before the district court and maintained on appeal that the ’552 patent is invalid for obviousness. Both Dr. Reddy’s and Teva appealed the trial court’s judgments of enforceability. Neither Dr. Reddy’s nor Teva appealed the trial court’s judgment of infringement.
In this appeal, Teva asserted that a combination of three prior art references rendered the ’552 patent obvious: 1) European Patent No. 174,726 (owned by Takeda), claiming lansoprazole (EP ’726); 2) United States Patent No. 4,255,431 (to Junggren), claiming omeprazole (’431 patent); and 3) an article by Brändström, et al., entitled “Structure Activity Relationships of Substituted Benzimidazoles” (Brändström). EP ’726 teaches, inter alia, the ulcer treatment compound lansoprazole.
But the Federal Circuit found that Lansoprazole differs structurally from rabeprazole As to the ‘431 patent, the Federal Circuit found this patent (’431 patent) discloses a broad class of gastric acid inhibiting compounds, including omeprazole, the first commercial proton pump inhibitor, sold as Prilosec. Although sharing the same basic structure, omeprazole is structurally farther afield from rabeprazole than is lansoprazole. Finally, Brändström describes a class of anti-ulcerative compounds. The district court correctly emphasized the differences between anti-ulcer action and gastric acid inhibition.
In other words, post-KSR v. Teleflex, 550 U.S. ____, 127 S. Ct. 1727 (2007), , a prima facie case of obviousness for a chemical compound still, in general, begins with the reasoned identification of a lead compound. Here, Teva was unable to create a genuine issue of material fact on obviousness through the unsupported assertion that compounds other than lansoprazole might have served as lead compounds. In sum, the district court properly concluded that the record did not support a case of obviousness of the ’552 patent as a matter of law. Id., pp. 8-9.
With respect to the charge of inequitable conduct, defendants-appellants alleged that Eisai misled the Patent Office in five ways: 1) failing to disclose Eisai’s own co-pending ’013 application, which claimed the “ethyl homolog” of rabeprazole (compound SHKA 661); 2) withholding rejections from the ’013 application’s prosecution that also would have been applicable to the ’552 patent’s prosecution; 3) failing to disclose the prior art “Byk Gulden patent” (WO 8602646); 4) submitting a misleading declaration (the Fujisaki Declaration) to the examiner of the ’552 patent; and 5) concealing lansoprazole from the examiner. The district court rejected the fifth assertion on summary judgment, Id., p. 10, citing SJ Enforceability Order at 58, and the other four after a bench trial, Trial Order.
For the first ground above, the Federal Circuit held that while disclosure of the co-pending SHKA 661 application to the Patent Office during the prosecution of the ’552 patent would have been prudent, Eisai’s failure to do so is by no means fatal, for two reasons. First, the district court had ample evidence from which to conclude that the materiality of the SHKA 611 application was low. Second, the record was devoid of any real suggestion of intent to deceive the Patent Office, much less the clear and convincing evidence required to support a finding of inequitable conduct. Id., p. 11.
As for the rejections of the ’013 application that would have been relevant to the prosecution of the ’552 patent, the district court acted correctly in finding that such issue was immaterial because of insufficient proof of intent to deceive.
With respect to the Byk Gulden patent, the district court was well within its discretion in concluding that the Byk Gulden patent was not material to the prosecution of the ’552 patent. Even if Byk Gulden had been material, the lack of clear and convincing evidence of intent to deceive would nonetheless have imposed an insurmountable bar to finding inequitable conduct, for the reasons given by the district court. Id., p. 13.
As for the Fujisaki Declaration, Eisai submitted it during prosecution to overcome an obviousness rejection. The Fujisaki Declaration indisputably showed a comparison between rabeprazole and the prior art compound called out by the examiner, demonstrating rabeprazole’s superiority. Id.
Thus the district court did not abuse its discretion in concluding that Eisai did not commit inequitable conduct in failing to include additional data in the Fujisaki Declaration to the examiner. Even here, where the submission to the Patent Office itself was highly material to prosecution, the lack of deceptive intent rendered stillborn yet another allegation of inequitable conduct. Id., p. 14.
For failure of Teva and Dr. Reddy’s to prove that patent at issue was invalid for obviousness or unenforceable for inequitable conduct, the Federal Circuit affirmed the district court’s judgment.
View a PDF of the judicial opinion.Service
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