Greenblum & Bernstein, P.L.C.


Recent Litigation News in Intellectual Property


                                                                                                   June 2012   

In This Issue

·    Federal Circuit Affirms District Court holding Patent Valid

·    Federal Circuit Affirms Contempt For Violating Injunction

·    Federal Circuit Affirms District Court Holding Patent Invalid

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Federal Circuit Affirms District Court Holding Patent Valid        

In Otsuka Pharma v. Sandoz, (Case Nos. 2011-1126, 1127), the Federal Circuit affirmed the district court’s final decision sustaining the validity of the asserted claims of the patent-in-suit. 

Otsuka marketed the antipsychotic drug Abilify® with the active ingredient Aripiprazole.  Aripiprazole is a carbostyril derivative.  The patent-in-suit, U.S. Patent No. 5,006,528 (the ‘528 patent), recites claims which cover Abilify®, including claim 23 which recites a method of treating schizophrenia comprising administering a pharmaceutical composition containing aripiprazole as an active ingredient.

The defendants asserted that the claims were invalid for obviousness based on three “lead compounds” relating to carbostyril derivatives.  The district court evaluated the differences between the claimed invention and the prior art, and found that the asserted prior art did not teach one of ordinary skill to select the lead compounds asserted by defendants for further antipsychotic research.  The district court thus concluded that the defendants failed to prove by clear and convincing evidence that one of ordinary skill would have been motivated to combine the asserted prior art to make Aripiprazole and would have had a reasonable expectation of success in doing so.

The Federal Circuit stated that whether a new chemical compound would have been prima facie obvious over particular prior art compounds ordinarily follows a two-part inquiry. First, the court determines whether a chemist of ordinary skill would have selected the asserted prior art compounds as lead compounds, or starting points, for further development efforts. A lead compound is “a compound in the prior art that would be most promising to modify in order to improve upon its . . . activity and obtain a compound with better activity.” In other words, a lead compound is “a natural choice for further development efforts.”

The second inquiry in the analysis is whether the prior art would have supplied one of ordinary skill in the art with a reason or motivation to modify a lead compound to make the claimed compound with a reasonable expectation of success.

The Federal Circuit held that the district court had applied the proper law, and correctly concluded that at the relevant time, carbostyrils were not plausible lead compounds. 

Federal Circuit Affirms Contempt For Violating Injunction

In BASF Agro v. CIPLA Ltd., (Case Nos. 2011-1471, 1472), the Federal Circuit affirmed the district court’s judgment holding Cipla in contempt for violating an injunction and holding Velcera in contempt for acting in concert with Cipla to violate the injunction.

The two patents-in-suit relate to compositions for protecting dogs and cats from infestation of ectoparasites, e.g., fleas and ticks.  In 2007, Merial filed suit against Cipla asserting infringement of the two patents.  Cipla did not respond to the Complaint, and a default judgment was entered.  The district court held that the court had proper jurisdiction over Cipla, that the asserted patents were not invalid, and that the patents were infringed.  The district court entered a permanent injunction barring Cipla from directly or indirectly infringing either of the asserted patents in the future.

Velcera engaged Cipla to develop a low priced competitive product to Merial’s Frontline products.  Velcera formed a subsidiary FidoPharm, which entered into a license and development agreement with Omnipharm under which Omnipharm would develop PetArmour Plus formulations and license those formulations to FidoPharm exclusively for sale in the U.S.   The agreement identified Cipla as the intended manufacturer of PetArmour Plus.  In March 2011, the first shipments of PetArmour Plus arrived in the U.S.

Before importing into the U.S. , Velcera filed a declaratory judgment action alleging noninfringement and invalidity of Merial’s patent which was the subject of the injunction (the other patent having expired).   Soon thereafter, Merial filed a motion for contempt against Cipla contending that Cipla’s activities relating to PetArmour Plus violated the 2008 injunction.  The district court enjoined Cipla and Valecra from making, using, selling, or importing into the U.S. infringing products.

On appeal, the Federal Circuit affirmed that the district court had proper jurisdiction over Cipla when it issued the original injunction.  The Federal Circuit held that Cipla’s argument that the case could have originally been brought in Illinois had no merit, and held further that Cipla’s argument that it had not been properly served in accordance with the provisions of the Hague Convention were raised for the first time on appeal, and therefore deemed waived.

The Federal Circuit also rejected Cipla’s argument that the contempt motion should have been stayed in favor of the first-filed declaratory judgment action brought by Valcera.  The Federal Circuit noted that the contempt motion originated from the action filed in 2007, and therefore was properly deemed to have been filed first.

The Federal Circuit further confirmed that the district court did not clearly err in determining that there was infringement and that the PetArmour Plus was not more than colorably different from Cipla’s previously enjoined product.  The Federal Circuit also confirmed that Cipla’s extraterritorial conduct violated the injunction and that Velcera’s actions were contemptuous.  Accordingly, the Federal Circuit affirmed the judgment of the district court.

Federal Circuit Affirms District Court Holding Patent Invalid

In Leader Tech. v. Facebook, (Case No. 2011-1366), the Federal Circuit affirmed the district court’s judgment holding the asserted claims were invalid under 35 U.S.C. §102(b) because the claimed invention was offered for sale and publicly demonstrated prior to the critical date.

The patent-in-suit relates to software that allows users on a network to communicate and collaborate on a large scale.  Prior to the critical date, Leader offered the Leader2Leader® product for sale and demonstrated the product to a number of companies.  During discovery, interrogatory responses of Leader and testimony from an inventor (and the founder of Leader) showed that the Leader2Leader® product was covered by the patent-in-suit, and that the product had been offered for sale and in public use prior to the critical date.

During trial, Facebook did not rely upon expert testimony, but instead relied upon the interrogatory responses and deposition testimony to establish that the claimed invention had been on sale and publicly used prior to the critical date.  The Federal Circuit held that there was sufficient evidence to establish that the claimed invention was on sale and publicly used prior to the critical date, and affirmed the judgment of the district court.


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