Patent Docs

Insmed Announces Bioequivalent G-CSF Biologic

July 10, 2008

By Kevin E. Noonan —

Insmed Inc. announced today that a just-completed clinical trial showed that its INS-19 product, a recombinant human granulocyte colony stimulating factor (G-CSF) was "bioequivalent" to Amgen’s FDA-approved Neupogen®, a product used for treating neutropenia, a blood deficiency disorder associated with, inter alia, chemotherapeutic drug treatment.

One of the key points of contention over legislation permitting so-called "follow-on biologic" drugs (also termed "biosimilars") is the need for the drug to have the same safety, efficacy, and other characteristics of the innovator molecule. There is real reason for concern in this regard. Unlike conventional pharmaceuticals that are made using well-defined and controlled chemical reactions, biologic drugs are almost always made by a living cell (bacterial, yeast, or mammalian), and the cells used by the innovators are rarely available. Cells, even cells of the same type, are expected to have phenotypic variability that can influence the structure of the biologic drug product made by them. These differences can include differences in primary amino acid sequence (although this type of variability should be rare, in view of the possibility for significant changes in the biologic properties of such variants). The differences are more likely to be in post-translational processing, particularly in glycosylation patterns that are known to differ between different cell types (and may even differ between different strains or populations of the same cell type). It can also be expected that different formulations may have different properties. Potential consequences of this type of variability include changes in biovailability, biological activity, solubility (including the propensity for agglomerization), and immunogenicity.

Insmed’s clinical trial was a "single-center, double-blind, two-way crossover bioequivalence" study, according to the company’s press release. There were 32 healthy volunteers enrolled in the study, who were injected (randomly) with either INS-19 or Neupogen®, and then after a "washout" period dosed with the alternative drug product. The study reported maximum drug concentrations (Cmax) and total delivered drug concentrations (AUCs) in assessing bioequivalence of pharmacokinetic and pharmacodynamic responses.

The results reported by the company were that the Cmax values were nearly identical for INS-19 and Neupogen® (44.7 +/- 2.1 versus 45.5 +/- 1.9 ng/mL), and AUC values were 341 +/- 16 and 343 +/- 14 ng/mL hr, respectively. These values were reflected by a comparison of the response profile of neutrophil counts detected in blood samples after treatment with both drugs, which were "the same" according to the company.

Innovator biologics companies and their representatives (such as the Biotechnology Industry Organization, see "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation – Part II") have insisted that public safety requires human clinical trials to establish the safety and efficacy of follow-on biologic drugs, with strict post-approval surveillance. The "generic" biologics industry has opposed these strict requirements, maintaining that the requirements should be tailored to fit the particular biologic drug and to give FDA the flexibility needed to make such a determination on a case-by-case basis. Insmed’s announcement represents the first demonstration that a follow-on biologic is bioequivalent to an innovator biologic drug.

Sales of Neupogen® in 2007 were approximately $1 billion.

For additional information regarding this or other related topics, please see:

• "Dr. Robert Shapiro Discusses Follow-on Biologics Report," February 19, 2008
• "Insmed Announces National Awareness Campaign Regarding Follow-on Biologics," February 13, 2008
Roche Palo Alto LLC v. Apotex, Inc. (Fed. Cir. 2008)

July 9, 2008

By Donald Zuhn —

The Federal Circuit today affirmed a finding on summary judgment by the District Court for the Northern District of California that U.S. Patent No. 5,110,493, which is owned by Plaintiff-Appellee Roche Palo Alto LLC, is valid and infringed by Defendants-Appellants Apotex, Inc. and Apotex Corp. (Apotex). In affirming the District Court’s determination of validity and infringement, the Federal Circuit concluded that the lower court did not err in holding that the reverse doctrine of equivalents is inapplicable or that Apotex’s defenses of invalidity and unenforceability were barred by claim preclusion.

The ‘493 patent is directed to a drug formulation for treating eye inflammation that contains (1) a non-steroidal anti-inflammatory drug, (2) a quaternary ammonium preservative, and (3) the nonionic surfactant octoxynol 40. Claim 1 of the ‘493 patent recites:

Claim 7, which depends from claim 1, adds 0.79% sodium chloride to the formulation.

Roche’s predecessor (Syntex (U.S.A.) LCC) marketed a drug formulation containing 0.5% of the non-steroidal anti-inflammatory drug ketorolac tromethamine (KT), 0.01% of the quaternary ammonium preservative benzalkonium chloride (BAC), 0.01% octoxynol 40, and 0.8% NaCl as ACULAR®. Plaintiff-Appellee Allergan, Inc. currently markets another drug formulation containing 0.4% KT, 0.0063% BAC, 0.004% octoxynol 40, and 0.8% NaCl as ACULAR®LS.

During prosecution of the ‘493 patent, the examiner rejected the claims as being obvious over a number of references. To overcome the rejection, applicants amended the claims to add the octoxynol 40 limitation, and submitted a declaration stating that a formulation containing octoxynol 40 yielded unexpected results (i.e., that it produced a clear solution). In view of the amendment and declaration, the examiner allowed the claims.

Seeking approval to market a generic version of Roche’s ACULAR® formulation, Apotex filed an Abbreviated New Drug Application (ANDA) with the FDA in 2001. In response, Syntex filed an infringement suit against Apotex in the District Court for the Northern District of California (Syntex I).

In Syntex I, the District Court first construed the term "stabilizing amount" in the octoxynol 40 limitation as being a statement of intended result rather than a claim limitation, since the octoxynol 40 limitation also recites a concentration range. The District Court then granted Syntex’s motion for partial summary judgment of literal infringement, and following a bench trial, determined that the ‘493 patent is valid and enforceable.

On appeal, the Federal Circuit affirmed the District Court’s claim construction and finding of no inequitable conduct, but reversed its determination of nonobviousness (Syntex II). On remand, the District Court again found the ‘493 patent to be valid as nonobvious (Syntex III), and the Federal Circuit affirmed without opinion. One day after the Federal Circuit affirmed, the Supreme Court issued its decision in KSR Int’l Co. v. Teleflex Inc. Apotex’s attempt to secure a rehearing in view of KSR, however, was unsuccessful as the CAFC denied Apotex’s motion for a recall and stay of the CAFC’s affirmance.

In 2005, Apotex filed a second ANDA with the FDA, this time seeking approval to market a generic version of Roche’s ACULAR®LS formulation. In response, Roche filed an infringement suit against Apotex, once again in the Northern District of California.

At trial, Roche filed a motion for summary judgment that Apotex’s new formulation infringes the ‘493 patent, and that Apotex’s defenses of validity and unenforceability should be barred under the doctrines of issue preclusion and claim preclusion. Apotex argued that its new formulation should escape infringement under the reverse doctrine of equivalents, and that the doctrines of issue preclusion and claim preclusion were inapplicable as a result of a change in the law (i.e., the intervening KSR decision).

The District Court granted Roche’s summary judgment motion, and found that Apotex had failed to establish a prima facie case of noninfringement under the reverse doctrine of equivalents. The Court also determined that Apotex was barred by issue preclusion from asserting its defenses of invalidity (except for obviousness) or unenforceability, since the same assertions had been made in Syntex I. As for obviousness, the District Court held that Apotex was barred by claim preclusion from asserting this defense.

In the instant appeal, Apotex first argued that the District Court erred in failing to find noninfringement under the reverse doctrine of equivalents. Noting that "[t]he reverse doctrine of equivalents is rarely applied," and further, that the Federal Circuit had "never affirmed a finding of non-infringement under the reverse doctrine of equivalents," the CAFC described the equitable doctrine as one "designed ‘to prevent unwarranted extension of the claims beyond a fair scope of the patentee’s invention.’" The doctrine stems from the Supreme Court’s decision in Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950), where the Supreme Court stated (emphasis added):

[W]here a device is so far changed in principle from a patented article that it performs the same or similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the [reverse] doctrine of equivalents may be used to restrict the claim and defeat the patentee’s action for infringement.

At trial, Apotex argued that the "principle" of the claimed formulation of the ‘493 patent is to use a sufficient amount of octoxynol 40 to cause the formation of micelles, which stabilize the drug formulation by preventing interactions between KT and BAC. In support of its argument, Apotex relied on the declaration of its scientific expert. Apotex also argued that the concentration of octoxynol 40 in its new formulation was below the threshold needed to form micelles, and that interactions between KT and BAC are instead prevented by NaCl, which acts to ionically shield KT and BAC. As a result, Apotex contended that its new formulation is stabilized in a "substantially different way" from the claimed formulation of the ‘493 patent.

The Federal Circuit, however, determined that the District Court did not err in finding that Apotex had failed to establish a prima facie case of noninfringement under the reverese doctrine of equivalents. In particular, the District Court determined that Apotex did not properly establish the "principle" of the claimed formulation because it exclusively relied on its expert declaration instead of the specification, prosecution history, and prior art. The Federal Circuit noted that "there is no support in the claims or specification for micelle formation or for robust stabilization of the formulation by prevention of KT/BAC interactions," and further, that "there is no indication that the examiner, in allowing the claims, attributed the unexpected results of [octoxynol 40] to its superiority in forming micelles." Moreover, the CAFC observed that Example 3 of the ‘493 patent discloses a formulation containing 0.004% of octoxynol 40, which is the same concentration of octoxynol 40 as in the ACULAR®LS formulation (and thus, the same concentration as in Apotex’s new formulation).

Apotex next argued that the District Court erred in determining that Apotex’s validity challenges were barred by claim preclusion. In particular, Apotex asserted that the District Court erred in finding that the instant litigation and Syntex litigation involved the same claim or cause of action.

The Federal Circuit first noted that under its own law, an infringement claim in a second suit is the "same claim" as the infringement claim in an earlier suit if the accused products in the two suits are "essentially the same," and further, that accused products are essentially the same where the differences between the products are merely "colorable" or "unrelated to the limitations in the claim of the patent." As with its reverse doctrine of equivalents argument, Apotex asserted that its new formulation was not essentially the same as its earlier formulation because the two formulations are stabilized by completely different ingredients and mechanisms. Apotex also argued that the fact that it had to file separate ANDAs for the two formulations provided additional evidence that the formulations were materially different.

The Federal Circuit, however, once again found no error in the District Court’s analysis. In particular, the District Court had determined that both of Apotex’s formulations fell within the ranges recited in the asserted claims. The Federal Circuit stated that "[t]he fact that [Apotex’s two formulations] are stabilized by different mechanisms, even if true, is irrelevant because both formulations are encompassed by the claims of the ‘493 patent," and therefore concluded that "any difference in composition between the two formulations is merely colorable and the two formulations are ‘essentially the same.’"

The Federal Circuit dismissed Apotex’s final argument that claim preclusion should not apply in this case given the change in law following the Supreme Court’s decision in KSR, stating that the District Court "correctly recognized that there is no ‘change of law’ or fairness exception to prevent application of claim preclusion." The Federal Circuit noted that to hold otherwise would be to nullify the doctrine of res judicata.

Roche Palo Alto LLC v. Apotex, Inc. (Fed. Cir. 2008)
Panel: Chief Judge Michel, Circuit Judge Prost, and District Judge Hochberg
Opinion by Circuit Judge Prost
The Written Description Training Materials and Ex parte Porro

July 8, 2008

By Donald Zuhn —

Last month, we reported on a presentation that Dr. George Elliott, Group 1600 Director of the U.S. Patent and Trademark Office, gave at this year’s BIO International Convention (see "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S." and "Docs at BIO: "Gotcha" Games Continue at USPTO"). Among the topics that Dr. Elliott addressed during his presentation were the new written description training materials — specifically, Example 11, which concerns claims directed to a polynucleotide or polypeptide sequence that shares percent identity with another sequence.

As we noted in an earlier report, Example 11 seems to suggest that the recitation of a functional limitation can render an otherwise allowable claim unallowable (see "An Analysis of the New Written Description Training Materials – DNA Hybridization & Percent Identity"). In particular, Example 11 introduces the following exemplary claims:

Claim 1: An isolated nucleic acid that encodes a polypeptide with at least 85% amino acid sequence identity to SEQ ID NO: 2.

Claim 2: An isolated nucleic acid that encodes a polypeptide with at least 85% amino acid sequence identity to SEQ ID NO: 2; wherein the polypeptide has activity X.

Example 11 concludes that despite the specification’s disclosure of only a single species encoding the polypeptide of SEQ ID NO: 2 (i.e., SEQ ID NO: 1), and the lack of any teaching in the specification regarding which amino acid residues in SEQ ID NO: 2 are tolerable to change, the specification satisfies the written description requirement with respect to claim 1 (because a skilled artisan could use a computer to identify all of the nucleic acids encoding a polypeptide sharing at least 85% sequence identity with SEQ ID NO: 2), but not claim 2 (because the specification lacks any teaching of the residues associated with the recited function).

During his BIO presentation, Dr. Elliott noted that with respect to the situation presented in Example 11, the USPTO had reversed its position, having previously asserted that claims lacking functional language failed to comply with the written description requirement and that claims possessing such language complied with the requirement. According to Dr. Elliott, claims with functional language (where the specification lacks any teaching regarding the amino acid residues that are tolerable to change) do not satisfy the written description requirement because "the minute you add function, you’ve limited the claim to a subset of species, and you don’t know which species are in the subset and which species aren’t." In other words, absent any teaching of structure/function relationships, the USPTO’s (and Dr. Elliott’s) position is that one cannot determine the species that share at least 85% sequence identity with the recited sequence and also possess the recited function (this explanation does not, of course, take into account case law that allows for the recitation of a genus containing some inoperative species).

Dr. Elliott also acknowledged that Example 11 may be a little disingenuous in that it appears to suggest that an applicant would be better off omitting a functional limitation from a claim. However, he pointed out that this example includes the following practice note:

Dr. Elliott informed session attendees that just because claim 1 in Example 11 satisfied the written description requirement, this does not mean that the claim would necessarily satisfy the enablement and utility requirements. For a more thorough discussion of the rationale behind the USPTO’s reversal on functional limitations, Dr. Elliott recommended that attendees read the decision in Ex parte Porro. We decided to take Dr. Elliott’s advice.

In Porro, which was decided last March, the Board of Patent Appeals and Interferences affirmed the Examiner’s determination that claims to a method of making ascorbic acid (vitamin C) lacked an adequate written description. Claims 12-14 were at issue on appeal; representative claim 13 recites:

13. A method of generating ascorbic acid, comprising:
a) obtaining a recombinant yeast capable of converting an ascorbic acid precursor into ascorbic acid, wherein the yeast is functionally transformed with a coding region encoding L-galactose dehydrogenase (LGDH) enzyme having at least about 90% identity with SEQ ID NO: 11,
b) culturing the recombinant yeast in a medium comprising an ascorbic acid precursor, thereby forming ascorbic acid, and
c) isolating the ascorbic acid.

During prosecution of the claims at issue, the Examiner noted that the specification disclosed only a single LGDH sequence (i.e., SEQ ID NO: 11), which the inventors had obtained from Arabidopsis thaliana. The Examiner also noted that the prior art failed to disclose other LGDH enzymes sharing 90% identity to SEQ ID NO: 11. Concluding that the claims encompassed a very large genus of sequences and that the specification and prior art provided a limited description of the motifs or structures responsible for LGDH activity, the Examiner determined that the specification did not adequately describe the genus of "L-galactose dehydrogenase (LGDH) enzyme[s] having at least about 90% identity with SEQ ID NO: 11."

The Board affirmed the Examiner’s determination that claims 12-14 lacked an adequate written description, citing University of California v. Eli Lilly and Co., 119 F.3d 1559 (Fed. Cir. 1997) and University of Rochester v. G.D. Searle & Co., 358 F.3d 916 (Fed. Cir. 2004) in support of its decision. With respect to Eli Lilly, the Board determined that "[t]he Eli Lilly court held that a fully described genus is one for which a person skilled in the art can ‘visualize or recognize the identity of the members of the genus,’" and in the instant case, "the Specification does not provide guidance regarding what structural features are responsible for the enzymatic activity of LGDH, nor does it describe what amino acid changes can be made in the wild-type sequence without affecting the enzymatic activity of the protein." The Board concluded that "the Specification does not describe the recited genus adequately for those skilled in the art to distinguish the SEQ ID NO: 11 variants that are within the claims from other variants of SEQ ID NO: 11," and therefore, "does not adequately describe the recited genus under the standard of Eli Lilly."

With respect to University of Rochester, the Board stated that:

Just as in University of Rochester, the present application discloses a genus of chemical compounds (proteins having amino acid sequences at least 90% identical to SEQ ID NO: 11). According to Appellants’ calculations, the genus encompasses 3.4 x [ten to the power of 41] different proteins. But the claims are limited to only those compounds having a desired characteristic (having LGDH enzymatic activity). Just as in University of Rochester, the present Specification does not guide the skilled artisan to the subset of proteins within the genus of 3.4 x [ten to the power of 41] proteins that are at least 90% identical to SEQ ID NO: 11 that have the recited enzymatic activity.

In affirming the Examiner’s rejection, the Board concluded that a subgenus of "functional variants" within a genus of "variants" must be described by disclosing a representative number of functional variants or by disclosing "structural features that are common to functional variants that distinguish them from the rest of the genus (i.e., structural features that correlate with enzymatic activity regardless of other variations from SEQ ID NO: 11)," and that the application at issue provided neither. Interestingly, the Board conceded that there may be other ways to describe such a subgenus, but that "the case law is a little hazy in this area."

While the Written Description Training Materials (which were published in late March) do not mention the Porro case by name, the language of Example 11 leaves little doubt that Porro (which was decided March 11) served as the basis for Example 11. For example, the Board states that:

Certainly SEQ ID NO: 11 is adequately described. We can also assume, for present purposes, that a description of SEQ ID NO: 11 is adequate to describe amino acid sequences that are 90% identical to SEQ ID NO: 11[.] Given a computer and sequence-comparison software, a skilled artisan may well be able to visualize or recognize the identity of members of that genus.

The Board’s conclusion and reasoning in Porro is nearly identical to that provided by the Training Materials for exemplary claim 1 (including statements about using a computer to identify sequence variants).

Moreover, the Board’s response to the applicants’ argument that "[t]he skilled artisan would have a reasonable expectation that an LGDH . . . would be operable in the claimed methods" evokes Example 11’s Practice Note. In particular, the Board stated that such an argument was not directed to the issue raised on appeal since the Examiner had not made an enablement rejection. In view of the decision in Porro and the new Training Materials, it will be interesting to see how the Patent Office balances the issues of operability and enablement with respect to pending claims that resemble exemplary claim 1 of Example 11 (particularly since Judge Lourie did not find these issues to present a problem for hybridization variants in Enzo Biochem, Inc. v. Gen-Probe Inc., 296 F.3d 1316 (Fed. Cir. 2002)).

Ex parte Porro (B.P.A.I. 2008)
Panel: Administrative Patent Judges Scheiner, Mills, and Grimes
Opinion by Administrative Patent Judge Grimes
Recent Developments in Pharmaceutical Patenting and Compulsory Licensing of Pharmaceutical Patents in Developing Countries

July 8, 2008

By Kevin E. Noonan —

Two of the leaders among developing countries in challenging Western assumptions behind the TRIPS agreement and the WTO, Brazil and India, recently announced a further evolution of their national laws directed to implementing the provisions of that treaty.

Brasil’s announcement concerns the administrative procedures governing the interaction between the Brazilian Patent Office (the Instituto Nacional da Propriedade Industrial or INPI) and its Public Health Service (the Agencia Nacional da Vigilancia Sanitaria or ANVISA). Under Brazilian law, ANVISA has the authority (and the responsibility) to grant prior consent to patent applications on pharmaceutical products and methods that were either pending or filed after December 15, 1999. This authority was part of the national enabling legislation under which TRIPS IP protection for pharmaceuticals became part of Brazilian law (Article 229-C); beforehand Brazilian patent law did not recognize pharmaceuticals as patentable subject matter. Although the statutory provisions requiring ANVISA’s consent went into force on February 14, 2001, until now there were no established rules for an applicant to apply for ANVISA permission. The new rules, announced on June 23rd and coming into force on June 24th as Resolution No. 45, for the first time provide standardized administrative procedures for a pharmaceutical patent applicant to petition ANVISA for its consent that the applicant obtains a patent. This permission is now dependent, in part, on the patentability of the pharmaceutical or pharmaceutical method, as well as being grounded in public health concerns. The new rules are expected to reduce the extent to which ANVISA permission depends on the exercise of its discretionary authority. The rules provide applicants with the opportunity to submit documentary and other evidence, including prior art and counterpart granted foreign patents, as well as having provisions for interested third parties to submit evidence. The rules make a distinction between applicant- and third-party submissions in that third party submissions will not be published to the applicant. An adverse decision by ANVISA will not be made public, but upon notice to the applicant there is a 90-day term for filing a response. Appeals to the Full Board of Directors can be had within 60 days of any final decision. ANVISA’s final decisions will be published in the Federal Patent Gazette. Once ANVISA’s consent is obtained, the application is returned to INPI for patent grant.

Brasil’s law gives the Public Health Service an effective veto on the patentability of any pharmaceutical or pharmaceutical method patent, and represents another example of developing countries obtaining the benefits of WTO membership while crafting national laws that de facto perpetuate a patent-unfriendly environment with regard to pharmaceutical patents. The danger to Western drug companies attempting to navigate national law in Brasil under its implementation of TRIPS is that ANVISA’s veto permitted national interests to trump intellectual property protection, and hence was susceptible to political influence. After all, what Brasilian politician would risk being accused of harming (or worse, acting in a way that harmed) public health in Brasil in favor of a foreign drug company’s intellectual property rights in Brasil. The best that can be said of Resolution No. 45 is that it has the potential to normalize the process of obtaining ANVISA approval for pharmaceutical and pharmaceutical method patents, and thus reducing to some degree the effects of political influence on the process. (Patent Docs thanks Brasilian associate Momsen Leonardos & Cia for alerting us to these developments and providing information about them.)

In India, the government has decided to grant innovator drug companies a hearing whenever an Indian company petitions for the government to grant a compulsory license on a patented drug. Compulsory licenses are available under Indian law (Patent Rules, Section 92A) for, inter alia, producing drugs for export to countries unable to produce the drug itself:

92A. (1) Compulsory license shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory license has been granted by such country or such country has, by notification of otherwise, allowed importation of the patented pharmaceutical products from India.

Explanation — For the purposes of this section, "pharmaceutical products" means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use.

The specific instance involved in the government’s decision is the petition by Natco Pharma, an Indian generic drug company located in Hyderabad, to manufacture Sutent® (sunitinib), an anticancer monoclonal antibody drug patented by Pfizer, and export it to Nepal, a country without the industrial infrastructure or capacity to make the drug itself. These rules implement the provisions of TRIPS and the Doha Declaration that permit a national drug company to seek a compulsory license to address a "public health crisis." However the law has been vague in defining the metes and bounds of what constitutes a "public health crisis," nor have the procedures and protocols for obtaining a license been definitively set forth under Indian law; one possible reason for this failure is that Natco is the only Indian generic drug company that has sought a compulsory license under the terms of Section 92A. Over Natco’s protests, denied on July 4th, the Indian Patent Office decided that it would hear from Pfizer on the prudence of granting such a license.

It remains to be seen whether Pfizer’s opportunity to be heard will have any substantive impact on the inclination of the Indian Patent Office to grant a compulsory license to Natco. In addition, other Western drug companies will be watching this decision, particularly Roche: Natco has also applied for a compulsory license to make and export to Nepal Roche’s patented anticancer monoclonal antibody, Tarceva® (erlotinib).

For additional information regarding this and other related topics, please see:

• "More on Global Drug Patenting Crisis," August 14, 2007
• "Trying to Find a Solution to the Global Drug Pricing Crisis," July 16, 2007
• "Pharma Sanity Lacks Global Reach," July 13, 2007
• "Brasil Prevails in Dispute with Abbott over AIDS Drug Pricing," July 9, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007
• "A Modest Proposal Regarding Drug Pricing in Developing Countries," May 2, 2007
• "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries," May 1, 2007
BIO Submits Amicus Brief in Amgen v. Hoffman-LaRoche

July 7, 2008

By Kevin E. Noonan —

The Biotechnology Industry Organization (BIO) submitted an amicus brief today to the Court of Appeals for the Federal Circuit in the Amgen v. Hoffman-LaRoche case (see "Brief of Biotechnology Industry Organization as Amicus Curiae in Support of Appellee and Affirmance
"). This case involves Roche’s Mircera® drug product, a form of recombinant EPO that has been covalently linked to polyethylene glycol. Last October, a jury found that Mircera® infringed several Amgen patents. That verdict found that Roche’s Mircera® infringed claims 3, 7, and 8 of Amgen’s U.S. Patent No. 5,547,933 (claim 12 was found not to be literally infringed but infringed under the Doctrine of Equivalents); claims 1 and 2 of U.S. Patent No. 5,441,868; and claims 6 through 9 of U.S. Patent No. 5,618,698. (Amgen’s infringed claims were directed to recombinant methods and recombinant EPO protein.) In addition, the jury found that Roche had not sustained its burden of establishing that any of Amgen’s asserted claims were invalid (see "Amgen Survives Another EPO Challenge").

On February 28, 2008, the U.S. District Court for the District of Massachusetts (Judge William G. Young, presiding) granted a preliminary injunction to Amgen against Hoffman La-Roche, preventing Roche from selling Mircera®. Using the four-factor test set forth by the Supreme Court in eBay Inc. v. MercExchange, L.L.C., the District Court relied upon the jury verdict that Amgen’s asserted claims were infringed and not invalid; in addition, the Court found that Amgen’s injury would not be adequately compensated merely with money damages, and that the balance of the hardships weighed in favor of granting the injunction. The District Court struggled with the public interest prong of the test, in view of Roche’s argument that the public interest was served by the (presumed) reduced drug price that would ensue from competition between Mircera® and Amgen’s Epogen® and Aranesp® products, as well as Roche’s representations of the advantages of its Mircera® product over Amgen’s version of EPO (including inter alia less frequent dosing; see "Long-Acting Drug for Dialysis Anemia Equivalent to Weekly Agent").

The District Court set out conditions under which it would modify the injunction, conditions that amounted to a compulsory license. These included: first, that Roche would pay Amgen a royalty of 22.5%; second, Mircera® would be introduced to the Medicare patient population at a cost no less than the average sales price of Amgen’s EPO products; third, Roche would have to provide clinical evidence to permit the Court to determine a "dosage conversion factor" between Mircera® and Epogen®; fourth, Roche would pay for an independent agency to monitor sales and determine royalty payments owed to Amgen; and finally, Roche would agree to supply Mircera® to any patient needing it, at or below the authorized price. Although Roche agreed to these terms (see "Roche Agrees to Court’s Conditions for Modifying Preliminary Injunction"), the Court decided it needed the advice of a special master to consider the question of how dosing and pricing of Amgen’s and Roche’s products should be compared. Instead of agreeing to provide the District Court with a list of candidates to be special master, Roche filed its appeal to the Federal Circuit on April 11, 2008 (see "Hoffmann-LaRoche Can’t Wait, Files Notice of Appeal to the Federal Circuit").

BIO’s brief addresses a single issue before the Federal Circuit: should the public interest prong of the eBay four-factor test be construed to encompass the "public interest" in lower drug prices. BIO’s brief argues that it should not. First, BIO argues that the prospect of patent exclusivity is an important part of the patent grant, particularly for biotechnology companies. The brief recites the economic realities: that it can cost $1.2 billion to get a biologic drug to market; that "[b]iologics research and development is high-risk, with greater capital costs, higher material costs, greater manufacturing costs and uncertainties, longer development times, and lower late-stage success rates than small molecule pharmaceutical drugs"; and that sales of a biologic drug reach the break-even point for recovering the research and development costs at between approximately 12 and 16 years after the drug enters the marketplace. These economic realities are important, according to BIO, because investors will not be willing to take the significant risks attendant upon this technology unless there is a sufficient likelihood that a biologic drug will retain its market exclusivity for the maximum patent term.

BIO’s brief also notes the irreparable harm to the patentee that would be caused by improvidently permitting an infringing product to enter the marketplace, particularly for a preliminary injunction. Besides price erosion, the brief notes that market entry of a competing product would be "virtually impossible to undo." Indeed, such a policy would serve to create a "public interest" when a court, as here in the face of a verdict of infringement and non-invalidity, would be considering a permanent injunction after the public has come to rely on a lower-priced competitor product.

The brief distinguishes eBay on its facts, being limited to a patentee that did not practice a business-method patent. BIO reminds the Federal Circuit that the Supreme Court held that the exercise of a court’s injunctive relief powers "must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards," which standards have traditionally granted injunctions against infringing competitors. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). The proper focus of the public interest analysis, according to BIO, should be "whether there exists some critical public interest that would be injured by the grant" of injunctive relief (citing Hybritech Inc. v. Abbott Laboratories , 849 F.2d 1446, 1458 (Fed. Cir. 1988)). In this regard, the brief cites numerous examples of courts granting injunctions but staying their implementation, in the public interest, to permit the patentee to obtain regulatory approval (Johns Hopkins Univ. v. CellPro, No. 94-105-RRM, 1997 U.S. Dist. LEXIS 24162, at *20-22, 50 (D. Del. July 24, 1997), aff’d in part, vacated in part, 152 F.3d 1342 (Fed. Cir. 1998)), or being capable of supplying the market with the patented article.

The brief also notes that considering the public interest in lower priced drugs as an appropriate measure of the "public interest" prong of the four-factor test is contrary to policy decisions made by Congress. In this regard, the brief cites the Bayh-Dole act, which contains severely restricted "march-in" rights provisions only in the face of unmet medical need, as well as the Hatch-Waxman Act, that actually increases patent term to an innovator as a recompense for regulatory delay. Nor does the Medicare Act support using lower drug prices as a sufficient equitable reason for denying an injunction, since Congress has refused to reduce reimbursement (which would achieve a similar purpose) without further study, which BIO’s brief argues attests to the "the multifaceted nature of drug pricing issues, and underscores the delicate balance of competing economic and health care policies that is best left to the legislative branch." The brief also cites the numerous failed attempts to pass legislation authorizing compulsory patent licenses.

BIO reminds the Federal Circuit that is has already decided that it should be up to Congress, not the courts, to make the kinds of drug pricing decisions that would result from the proposed compulsory license for Mircera®. In Biotechnology Indus. Org. v. District of Columbia, 496 F.3d 1362, 1373 (Fed. Cir. 2007), a case involving a District of Columbia city ordinance that would have mandated pricing of patented drugs, the Court said:

The present patent system reflects the result of Congress’ deliberations. Congress has decided that patentees’ present amount of exclusionary power, the present length of patent terms, and the present conditions for patentability represent the best balance between exclusion and free use.

And BIO argues that this represents a policy judgment by Congress that the Federal Circuit should respect "in applying the public interest prong of the four factor injunction test."

The brief makes one more, forceful and thoughtful point. If the Federal Circuit should hold that district courts can consider the "public interest" of lower drug prices as part of the public interest prong of the injunctive relief test under eBay, then the hallmark of the patent grant, exclusivity, would be decided in a case-by-case, ad hoc manner that would completely undermine the economic basis for patent protection and the benefits of the patent grant relied upon by investors. Moreover, appellate review of the district court’s decision would be "under the deferential abuse of discretion standard," which would do nothing to ensure predictability of outcomes or the Federal Circuit’s supervisory role under its Congressional implementing statute to bring consistency to U.S. patent law. Indeed, the brief argues that the effect of permitting district courts to consider lower drug prices would result in each district court acting as a drug "price czar," thereby undermining public policy and substituting Congressional deliberation with "a limited evidentiary record and the exercise of [a court’s] equitable discretion." And the irony according to the brief is that the result may not be lower drug prices: in the case before the CAFC, the proposed compulsory license required Mircera® to be priced "at or less than" Amgen’s erythropoietin products. This raises the real possibility that a compulsory license could be granted to an infringing competitor "with no price advantage to the consumer."

This can’t be what the Supreme Court had in mind when it decided eBay, but the expansiveness of its pronouncements, in this as in other areas of patent law, have done little to promote the kind of certainty in this area of the law that Congress intended. A less activist Court might be willing to recognize, as the Supreme Court had been until recently, that patent law is one area where restraint in exercising its authority can be the more prudent course of action.

For additional information regarding this and other related topics, please see:

• "How to Avoid a Permanent Injunction: The Lessons of Amgen v. Hoffmann-LaRoche," April 28, 2008
• "Glasses Half-full or Half-empty: Hoffman-LaRoche’s Different Interpretation of Pfizer v. Teva," April 15, 2008
• "Hoffmann-LaRoche Can’t Wait, Files Notice of Appeal to the Federal Circuit," April 11, 2008
• "Will the Federal Circuit’s Pfizer v. Teva Decision Spell the End of Amgen’s Patent Rights to Recombinant Human Erythropoietin?" March 31, 2008
• "Court Still Cannot Decide on Amgen’s Permanent Injunction," March 26, 2008
• "Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)," March 20, 2008
• "Roche Agrees to Court’s Conditions for Modifying Preliminary Injunction," March 20, 2008
• "Roche’s Mircera® Remains Off the Market (For Now)," March 2, 2008
• "Amgen Survives Another EPO Challenge," October 28, 2007
AstraZeneca Prevails in Seroquel® Paragraph IV Litigation

July 7, 2008

By Sherri Oslick —

Late last week, Judge Pisano of the District Court of New Jersey granted summary judgment of no inequitable conduct in favor of AstraZeneca in its consolidated Paragraph IV litigation against Teva Pharmaceuticals and Sandoz, Inc. over AstraZeneca’s antipsychotic drug Seroquel®. Because the Defendants previously abandoned their other defenses, no issues remain for trial; AstraZeneca has petitioned for entry of final judgment.

The patent-in-suit, U.S. Patent No. 4,879,288 ("Novel Dibenzothiazepine Antipsychotic," issued November 7, 1989), covers quetiapine fumarate, the active ingredient in Seroquel®, used to treat schizophrenia and bipolar disorder. The original case, 05-cv-05333 (JAP) was consolidated with later filed cases, including one against Sandoz as reported here, and one against Teva, as reported here.

AstraZeneca moved for summary judgment of no inequitable conduct on March 18, 2008. The Defendants had alleged multiple bases for their charge of inequitable conduct, however, Judge Pisano found the alleged omissions to lack sufficient materiality to constitute inequitable conduct. Additionally, the Court found that the Defendants had failed to present
evidence of intent. AstraZeneca’s motion was granted on July 1, 2008.

For additional information, please see:

• Judge Pisano’s opinion

• AstraZeneca’s press release
• "Court Report," July 1, 2007
• "Court Report," April 15, 2007
Court Report

July 6, 2008

By Sherri Oslick —

About
Court Report: Each week we will report briefly on recently filed
biotech and pharma cases, and a few interesting cases will be selected
for periodic monitoring.

Shire LLC v. Nostrum Pharmaceuticals, Inc. et al.
3:08-cv-03309; filed July 2, 2008 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,326,570 ("Advanced Drug Delivery System and Method of Treating Psychiatric, Neurological and Other Disorders with Carbamazepine," issued July 5, 1994) and 5,912,013 (same title, issued June 15, 1999) following a paragraph IV certification as part of Nostrum’s filing of an amended ANDA to manufacture a generic version of Shire’s Carbatrol® (carbamazepine, used to treat epilepsy and trigeminal neuralgia). View the complaint here.

E8 Pharmaceuticals LLC et al. v. Affymetrix, Inc.
1:08-cv-11132; filed July 1, 2008 in the District Court of Massachusetts

Infringement of U.S. Patent No. 6,703,228 ("Methods and Products Related to Genotyping and DNA Analysis," issued March 9, 2004) based on Affymetrix’s use, manufacture, and sale of GeneChip® products. View the complaint here.

Bavarian Nordic A/S v. Oxford Biomedica PLC et al.
3:08-cv-01156; filed June 30, 2008 in the Southern District of California

Infringement of U.S. Patent Nos. 6,761,893 ("Modified Vaccinia Ankara Virus Variant," issued July 13, 2004), 6,913,752 (same title, issued July 5, 2005), and 7,335,364 (same title, issued February 26, 2008) based on Oxford’s manufacture, use, and importation of, and induction of others to use its TroVax® products. View the complaint here.

AstraZeneca UK Ltd. et al. v. Dr. Reddy’s Laboratories, Ltd. et al.
3:08-cv-03237; filed June 27, 2008 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,319,097 ("Pharmaceutical Agents," issued June 7, 1994), 5,482,963 ("Pharmaceutical Agents Useful As Leukotriene Antagonists," issued January 9, 1996), and 6,143,775 ("Process For Preparing Pharmaceutical Composition Containing A Heterocyclic Amide," issued November 7, 2000) following a paragraph IV certification as part of Dr. Reddy’s filing of an ANDA to manufacture a generic version of AstraZeneca’s Accolate® (zafirlukast, used to treat asthma). View the complaint here.

Novartis Corp. et al. v. Cobalt Laboratories, Inc. et al.
3:08-cv-03237; filed June 27, 2008 in the District Court of New Jersey

Infringement of U.S. Patent No. 6,162,802 ("Synergistic Combination Therapy Using Benazepril and Amlodipine for the Treatment of Cardiovascular Disorders and Compositions Therefor," issued December 19, 2000) following a paragraph IV certification as part of Cobalt’s filing of an ANDA to manufacture a generic version of Novartis’ Lotrel® (amlodipine besylate/benazepril hydrochloride, used to treat hypertension). View the complaint here.

Wyeth v. Biovail Corp. et al.
1:08-cv-00390; filed June 26, 2008 in the District Court of Delaware

Infringement of U.S. Patent Nos. 6,274,171 ("Extended release formulation of venlafaxine hydrochloride," issued August 14, 2001), 6,403,120 (same title, issued June 11, 2002), and 6,419,958 (same title, issued July 16, 2002) following a paragraph IV certification as part of Biovail’s filing of an ANDA to manufacture a generic version of Wyeth’s EFFEXOR XR® (venlafaxine hydrochloride, extended release, used to treat depression). View the complaint here.
Conference & CLE Calendar

July 6, 2008

July 7, 2008 – Life After Quanta v. LGE: What Every Patent Lawyer Needs to Know (Practising Law Institute) – 1:00-2:00 PM (EDT) webcast

July 9, 2008 – Quanta v. LG: What You Should Know (ALI-ABA) – 12:00-1:00 PM (EST) webcast

July 9-11, 2008 – Fundamentals of Patent Prosecution 2008: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

July 16, 2008 – Patent Claim Construction Workshop (Law Seminars International) – Seattle, WA

July 24-25, 2008 – Advanced Patent Prosecution Workshop 2008: Claim Drafting & Amendment Writing (Practising Law Institute) – New York, NY

August 11-12, 2008 – Advanced Patent Prosecution Workshop 2008: Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

August 10-15, 2008 – Advanced Courses (Patent Resources Group) – Washington, DC

September 11, 2008 – Developments in Pharmaceutical and Biotech Patent Law (Practising Law Institute) – New York, NY

September 11-12, 2008 – Current Issues in Complex IP Licensing (Law Seminars International) – Philadelphia, PA

September 15-16, 2008 – Biotech Patents*** (American Conference Institute)

September 21-23, 2008 – 2008 Annual Meeting (Intellectual Property Owners Association) – San Diego, CA

September 22-23, 2008 – USPTO Boot Camp: Patent Edition*** (American Conference Institute) – Alexandria, VA

September 22-23, 2008 – FDA Boot Camp*** (American Conference Institute)

September 22-23, 2008 – Patent Litigation 2008 (Practising Law Institute) – San Francisco, CA

October 6-7, 2008 – Patent Litigation 2008 (Practising Law Institute) – McLean, VA

October 15, 2008 – Developments in Pharmaceutical and Biotech Patent Law (Practising Law Institute) – San Francisco, CA

October 15-17, 2008 – Maximizing Pharmaceutical Patent Lifecycles*** (American Conference Institute) – New York, NY

October 23-24, 2008 – Patent Litigation 2008 (Practising Law Institute) – Chicago, IL

November 10-11, 2008 – Patent Litigation 2008 (Practising Law Institute) – Atlanta, GA

November 17-18, 2008 – Patent Litigation 2008 (Practising Law Institute) – New York, NY

***Patent Docs is a media sponsor of this conference or CLE
PLI CLE on Quanta Computer, Inc. v. LG Electronics, Inc.

July 4, 2008

Practising Law Institute (PLI) will be offering an audio webcast entitled: "Life After Quanta v. LGE: What Every Patent Lawyer Needs to Know" on July 7, 2008 from 1:00-2:00 PM (EDT). J. Scott Ballenger of Latham & Watkins LLP and Jeffrey T. Green of Sidley Austin LLP will address the following issues:

• Can you structure a "multi-tier" license, extracting royalties from several different levels of a distribution chain, after the Quanta decision?
• What does Quanta mean for "use" restrictions and the Federal Circuit’s "conditional sales" doctrine?
• What does this decision mean for self-replicating products like seeds and software?

The registration fee for this webcast is $299. Those interested in registering for the webcast, can do so here.

For additional information regarding the Quanta Computer decision, please see:

• "Quanta Computer, Inc. v. LG Electronics, Inc. (2008)," June 9, 2008
IPO 2008 Annual Meeting

July 3, 2008

The Intellectual Property Owners Association (IPO) will be holding its 2008 Annual Meeting on September 21-23, 2008 in San Diego. The meeting will have concurrent patent and trademark sessions. Among the presentations being offered in the patent sessions are:

• Overview of Recent Patent Case Law
• Indefiniteness Before and After Datamize
• The Patent Exhaustion Landscape: Quanta, McFarling, and More
• Licensing and Litigation in the Wake of Medimmune and Quanta Computer
• Patent Searching: Types, Scope, and Definitions of Searches
• The State and Future of Patentability Under §101
• Inequitable Conduct: Which Standard? What Evidence?
• The Real World: Insight on In-house IP Strategy
• Patent Quality: Defining It, Managing It

In addition, Invitrogen Corp. CEO Gregory T. Lucier will present the luncheon keynote on September 22, and Chief Judge Paul R. Michel of the U.S. Court of Appeals for the Federal Circuit will present the luncheon keynote on September 23.

A complete brochure for the meeting, including an agenda, list of speakers, and registration form can be downloaded here.

The registration fee for the meeting is $950 for IPO members or $1,450 for attendees who are not IPO members (attendees registering before July 31 will receive a $100 discount). Those interested in registering for the meeting can do so here.

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