Further Adventures in Obviousness and Inequitable Conduct

    By Kevin E. Noonan —

In Purdue
Pharma Products L.P. v. Par Pharmaceutical, Inc., the Federal Circuit
exercised its prerogative to illustrate its fractured jurisprudence on two
issues, obviousness and inequitable conduct, in a (fortunately)
nonprecedential decision.  Contrary to its Congressional mandate to bring
jurisprudential consistency to U.S. patent law, on these matters at least the
outcome is highly dependent on the constitution of the panel rather than a
consistent application of the law.  In view of the fact-intensive nature of the issues involved it is
perhaps inevitable, but that does little to help the patent community understand
what behavior does (and does not) fit within the statutory standard.

This case arose after Par filed an ANDA for Purdue
Pharma's Ultran ER® product, a sustained release formulation of the opiate
analgesic tramadol, with a Paragraph IV certification that Purdue Pharma's
Orange Book-listed, U.S. Patent Nos. 6,254,887 and 7,074,430 were invalid
and/or unenforceable.  The District
Court held that Par's generic tramadol formulation infringed claims 3, 13, 27, and 29 of the '887 patent and claims 5, 7, and 11 of the '430 patent.  However, the Court also found that
these claims were invalid for obviousness over the disclosure of U.S. Patent
No. 5,580,578 ("the Oshlack patent") but that the patents were not
unenforceable for inequitable conduct.

The Federal Circuit affirmed, in an opinion by
Judge Lourie joined by Judges Linn and Dyk.  The panel's grounds for affirming the obviousness
determination was that the Oshlack patent disclosed tramadol as one of 14
opiate drugs that could be formulated in an extended-release formulation, dosing
to encompass a bioavailability profile of from 10 to 33 hours, and a "controlled
release coating" comprising water-insoluble polymethacrylate and
polyvinylpyrrolidone.  Purdue's
patents disclosed alternative, water-insoluble coatings.  The Court held that the Oshlack patent selected
tramadol as one of 14 opiate drugs (out of the "myriad other possible
active ingredients" that could have been used to prepare an
extended-release formulation), and that this disclosure rendered Purdue's
claimed formulations obvious "regardless of whether or not the patent
lists tramadol as a preferred embodiment."  (The Court helpfully cited another case, Perricone v. Medicis Pharm. Corp., that "reject[ed]
the notion that one of [14 listed] ingredients cannot anticipate because it
appears without special emphasis in a longer list," relying it seems on
the maxim that "anticipation is the epitome of obviousness," In re Kalm, 378 F.2d 959, 962 (CCPA
1967).)  The Court also found
that the Oshlack reference expressly taught "once-daily" tramadol
formulations albeit without necessarily enabling production thereof (citing Symbol Technologies Inc. v. Opticon, Inc.,
935 F.2d 1569, 1578 (Fed. Cir. 1991)).  The panel held that Purdue had waived arguments relating to the
non-obviousness of formulations having bioavailability profiles disclosed and
claimed in the '887 and '430 patents, as well as (and perhaps more importantly)
the argument that the Oshlack patent was not prior art under 35 U.S.C. § 102(e),
because these arguments were not raised before the District Court.  A review of Patent Office records indicates that the Oshlack
patent was assigned to Purdue in December 1997, suggesting that Purdue's
argument was that this patent was not available as prior art under § 102(e)
pursuant to the provisions of 35 U.S.C. § 103(c).  This argument, properly made, should have been enough to
overcome Par's obviousness defense.  Finally, the Court continued its recent pattern of disregarding the "secondary
considerations" of non-obviousness under the Supreme Court's Graham v. John Deere precedent, agreeing
with the District Court that evidence of copying was irrelevant in an ANDA
context (an argument of apparently first enunciation), and that Purdue had not
provided sufficient context (or perhaps sufficient "nexus") for its commercial success evidence to rebut
the District Court's legal conclusion of obviousness.

Turning to inequitable conduct, the panel agreed
with the District Court that Purdue had withheld material information from the Office in the form of experimental data, and indeed had submitted a "misleading"
affidavit during prosecution:  the declaration contained "more favorable"
experimental data than the data that Purdue withheld.  Par reasonably contended that this constituted inequitable
conduct, since Purdue could provide "no credible explanation" for these
actions.  In finding no inequitable
conduct, the District Court found insufficient evidence of deceptive
intent.  For example, the Court characterized
the declaration as being "an overly
aggressive attempt to put a positive spin on the data."  Par also contended that the District Court erred in relying on "evidence" of good faith, which included
that the declarant failed to recall why the less-favorable data was not submitted
to the Office, "that the formulators did not recognize the data's import
to patentability when the evidence showed that they did," and that
patentees had later submitted "similar" (presumptively negative) data
to the Office.

The Federal Circuit affirmed the District Court's finding of no inequitable conduct based on several
factors that are consistent with the deference that the "abuse of
discretion" standard is intended to produce, as well as others that are
less reasonably related to the conclusion.  These include witness credibility, but also include that the
declaration was "prepared" to overcome a rejection on inherent
anticipation before the European Patent Office (but if it wasn't submitted to
the USPTO it could not have been used to support an inequitable conduct
defense).  The panel also seemed to
sanction as a factor related to deceptive intent the later submission of "more
pertinent experimental results," which the Court noted had been "generated
for a foreign litigation."  Also impliedly sanctioned was the "credible excuse" proffered
by Purdue, that "[t]he omitted data did not reproduce conditions from the
prior art and revealed dissolution rates outside those claimed in the asserted
patents."  The panel stated
that "[e]ven assuming that the applicants withheld material data and submitted
a materially misleading declaration, as the district court found" in
affirming the District Court's decision, a statement that seems to stretch to
the breaking point the principle that intent to deceive cannot be inferred from
materiality alone.  And the fact
that Purdue later disclosed "similar" experimental data seems equally
inadequate to overcome the behavior the District Court found, and the panel
agreed, was exhibited by Purdue in not only withholding material information but
filing a misleading affidavit (compare, for
example, different panel holdings in Aventis Pharma S.A. v. Amphastar Pharma, Inc. and Ferring
B.V. v. Barr Laboratories, Inc.).  In making this determination, the panel seems to distinguish an earlier
panel's decision in Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed.
Cir. 2007) on the grounds that in Cargill, the patentees consistently submitted
misleading information to the Office.  And the panel found that "the reasonableness of inferring that any
omission or misleading statement in the preparation of the declaration was made
with the specific intent of deceiving the PTO" was diminished because the
declaration was prepared for an EPO proceeding (ignoring the fact that the
issue was the intent in submitting the declaration to the USPTO during
prosecution of the '887 and '430 patents).  For this panel, at least, the District Court's decision of
no inequitable conduct was affirmed "[b]ecause intent to deceive is not
the single most reasonable inference that can be drawn from the evidence."

Perhaps the en banc
court's decision in Therasense v. Becton,
Dickenson & Co. will bring some consistency to the Court's inequitable
conduct jurisprudence.

Purdue Pharma Products L.P.
v. Par Pharmaceutical, Inc. (Fed. Cir. 2010)
Nonprecedential
disposition
Panel:
Circuit Judges Lourie, Linn, and Dyk
Opinion
by Circuit Judge Lourie