Greenblum & Bernstein, P.L.C.
Recent Litigation News in Intellectual Property
In This Issue
· Supreme Court Rules that Generic Companies May Counterclaim to Correct Use Codes
· Federal Circuit Affirms District Court’s Jurisdiction Over Declaratory Judgment Action
· Federal Circuit Affirms Summary Judgment That Means-Plus-Function Language Was Indefinite
· Federal Circuit Affirms Dismissal Of Complaints
In a unanimous decision, the United States Supreme Court ruled in Caraco Pharmaceutical Laboratories, Inc. v. Novo Nordisk A/S (Case No. 10-844), that generic companies may use the Hatch-Waxman Act de-listing/correction counterclaim provision to force brand companies to correct overly broad Use Codes.
Novo Nordisk’s patent Re 37,035 contained claims to treating diabetes with a combination of repaglinide and metformin. Novo’s Prandin® product was approved for three uses: as monotherapy, in combination with thiazolidinediones, and in combination with metformin. After Novo changed the Use Code to generally cover use of repaglinide to treat diabetes, the FDA required Caraco (the ANDA applicant) to include all three uses, and to convert from a Section viii carve-out to a Paragraph IV certification.
Relying on the de-listing counterclaim provision of the Hatch-Waxman Act, Caraco sued Novo to correct the Prandin® Use Code to reflect what the patent claimed, as this would permit Caraco to re-submit a Section viii carve-out, thereby ending the litigation over that patent. Caraco won in the district court. Novo appealed to the Federal Circuit, which reversed, ruling that as long as a patent claims any approved use, the generic company may not use the de-listing counterclaim provision to correct a Use Code.
The Supreme Court acknowledged that the counterclaim provision is not a model of clarity, and that both Caraco’s and Novo’s interpretations of “the patent does not claim . . . an approved method of using the drug” have some merit. The Supreme Court noted that one purpose of the counterclaim provision was to prevent a patent that does not claim a use not sought from barring generic approval, and ruled that the counterclaim provision applies even when the patent covers one of several approved uses.
The Supreme Court then addressed whether Use Code information can be challenged in such a counterclaim. The Federal Circuit had held that “patent information” submitted for listing in the Orange Book is strictly limited to patent number and expiration date, and does not include Use Codes. The Supreme Court disagreed, holding that the “patent information submitted” under the Act clearly should include all information submitted, including Use Codes.
Federal Circuit Affirms District Court’s Jurisdiction Over Declaratory Judgment Action
In Dey Pharma v. Sunovion Pharma (Case No. 2011-1507), the Federal Circuit affirmed the district court’s order concluding that it had subject-matter jurisdiction over the declaratory judgment action.
This case involves such a declaratory judgment claim by the second ANDA filer (Dey) against the patent holder and NDA filer (Sunovion), designed to trigger the first ANDA filer’s (Breath’s) 180-day market exclusivity period. The FDA approved Sunovion’s NDA for Xopenex® in 1999, and Sunovion listed three patents relating to Xopenex® in the Orange Book.
In June 2005, Breath filed the first ANDA for generic Xopenex®, which contained Paragraph IV certifications for all three Orange Book patents. In October 2005, Sunovion sued Breath for infringement of all three patents. In May 2008, the suit was dismissed based in accordance with a settlement agreement between Sunovion and Breath. Under the settlement, Breath, in return for paying a license fee, was allowed to market generic Xopenex® under its ANDA starting on August 20, 2012 (or on the date of an earlier third-party commercial launch).
In July 2005, Dey filed a second ANDA for generic Xopenex®, which also contained Paragraph IV certifications for all three patents. In February 2006, Sunovion sued Dey under two of the patents, but Sunovion did not assert the ’289 patent. Dey later filed a different ANDA on a “concentrate” version of Xopenex®, and after Sunovion again sued Dey with respect to the two patents but not the ’289 patent, the actions were consolidated in district court in December 2006. On June 20, 2008, Dey brought a declaratory judgment action, seeking a declaration that the ’289 patent is invalid or not infringed by either ANDA product. In response, Sunovion provided Dey with a covenant not-to-sue on the ’289 patent and moved to dismiss the declaratory judgment action for lack of subject-matter jurisdiction.
The district court denied Sunovion’s motion to dismiss, holding that the covenant did not defeat declaratory judgment jurisdiction. The district court held further that, even if the two Orange Book patents asserted by Sunovion were held invalid, the ’289 patent would remain a legal barrier to Dey’s ANDA approval, and that this potential barrier was a cognizable injury that could be redressed through a declaratory judgment action.
The Federal Circuit noted that that the first ANDA filer, Breath, had not yet marketed generic Xopenex®, and that Breath’s failure to do so, absent a triggering event, could delay Dey’s ability to market until 2021, when the ’289 patent expires. Since there was jurisdiction when Dey filed the declaratory judgment action in June 2008, the Federal; Circuit concluded that the case should proceed until rendered moot. Accordingly, the district court’s judgment was affirmed.
Federal Circuit Affirms Summary Judgment That Means-Plus-Function Language Was Indefinite
In Noah Systems v. Intuit, Inc. (Case No. 2011-1390), the Federal Circuit affirmed the district court’s determination that the claim term “access means” was indefinite.
The patent-in-suit related to an automated financial accounting system. The system allows a business or individual to connect to the computers of companies with which that entity conducts business so that information regarding financial transactions can be transmitted between them.
All of the asserted claims contained the “access means” limitation. The parties agreed that this was a means-plus-function limitation performed by a processor. The district court granted summary judgment of invalidity to Intuit based upon the special master’s findings that the patent-in-suit’s specification did not disclose an algorithm and, therefore, no structure.
On appeal, the Federal Circuit noted that the specification of the patent-in-suit must contain an algorithm to perform the function associated with the “access means” limitation, or the limitation is indefinite. In other words, the patent would be invalid if the specification did not disclose an algorithm to perform the function or functions associated with the “access means” limitation.
The Federal Circuit stated that in cases involving a special purpose computer-implemented means-plus-function limitation, the structure disclosed in the specification must be more than simply a general purpose computer or microprocessor. Rather, the specification must disclose an algorithm for performing the claimed function. The specification may express the algorithm in any understandable terms including as a mathematical formula, in prose, or as a flow chart, or in any other manner that provides sufficient structure. However, simply disclosing software without providing some detail about the means to accomplish the function is not enough.
After reviewing the patent-in-suit, the Federal Circuit concluded that the specification disclosed a partial algorithm for the functional language associated with the “access means” limitation. The Federal Circuit held that where a disclosed algorithm supports some, but not all, of the functions associated with a means-plus-function limitation, the specification is treated as if no algorithm had been disclosed at all.
Accordingly, the Federal Circuit affirmed the district court’s judgment that the asserted claims were invalid as indefinite because the specification did not disclose an algorithm which performs all the functions associated with the “access means” limitation.
Federal Circuit Affirms Dismissal Of Complaints
In Bayer Schering Pharma v. Lupin Ltd., (Case No. 2011-1143), the Federal Circuit affirmed the district court’s dismissal of Bayer’s claims for patent infringement against Lupin, Sandoz and Watson.
Bayer listed three patents in the Orange Book covering the use of the drug Yasmin® for oral contraception. Defendants in two separate cases ((1) Lupin and (2) Sandoz and Watson) filed ANDAs certifying that the three patents that Bayer had listed in the Orange Book in connection with Yasmin® were either invalid or would not be infringed by their generic version of Yasmin®. In response, Bayer filed a complaint against Watson and Sandoz in April 2008, and filed a complaint against Lupin in July 2010. In both cases, Bayer only asserted infringement of one of the three listed Orange Book patents, i.e., U.S. Patent No. 5,569,652 (“the ’652 patent”).
The asserted ‘652 patent claims recite that the claimed method achieves three effects simultaneously: a contraceptive (or gestagenic) effect, an anti-androgenic effect (which reduces the activity of male hormones and can be effective in treating conditions such as hirsutism or acne), and an anti-aldosterone effect (also known as an anti-mineralocorticoid effect, which can be effective in reducing excess water retention in the body). Sandoz and Watson argued that their generic drugs were intended to be applied only for oral contraceptive and not for the other effects. The district court agreed with the arguments holding that the FDA had not given its approval for the entire spectrum of uses of the drug claimed in the ‘652 patent, but rather the approval was only for use as a contraceptive.
The district court also found that the defendants were not liable for inducement to infringement because there was nothing in the record to indicate that the defendants sought to promote their generic versions of Yasmin® based on the anti-androgenic or anti-aldosterone properties claimed in the ’652 patent.
Pursuant to that ruling, Bayer and Lupin stipulated to, and the district court entered, final judgment in Bayer’s suit against Lupin. Bayer appealed both judgments, and the two cases were consolidated.
The Federal Circuit reviewed the FDA’s approval and affirmed that the defendants did not infringe Bayer’s ’652 patent under section 271(e)(2)(A) and that their sale of the generic form of Yasmin® would not induce infringement of the ‘652 patent. The Federal Circuit stated “The defendants’ ANDAs seek approval to market the generic form of Yasmin solely for contraceptive use, and there is no valid patent on the use of the drug for that purpose alone. The FDA-approved label for Yasmin does not indicate to physicians that the specific use claimed in the ’652 patent, i.e., producing contraceptive, anti-mineralocorticoid, and anti-androgenic effects in premenopausal and menopausal women with a specific need of all three effects, is safe and effective. Therefore, we agree with the district court that the FDA has not approved such use and that the defendants cannot be held liable for infringement of the patent.”