Greenblum & Bernstein, P.L.C.
PRACTICE GROUP NEWSLETTER
Recent News in Intellectual Property
In This Issue
· Attorney Fees Awarded Against Cephalon For Maintaining Suit With No Evidence Of Infringement In AMERIX® Litigation
· Preliminary Injunction Against Mylan Vacated By Federal Circuit In DORYX® Case
Greenblum & Bernstein is proud to announce that we are hosting a pre-conference workshop titled: Biosimilars In America: IP Strategy and Due Diligence at the 10th EGA International Symposium on Biosimilar Medicines that will take place April 19-20, 2012 in London. Please contact us for additional information and/or with any questions.
Attorney Fees Awarded Against Cephalon For Maintaining Suit With No Evidence Of Infringement In AMERIX® Litigation
The U.S. District Court for the District of Delaware awarded attorney fees against Cephalon in In re: Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, for maintaining the patent infringement action without evidence of infringement. The instant case was a consolidated Multi-District Litigation based upon separate Hatch-Waxman paragraph IV actions involving ANDAs for AMRIX® from the following parties Mylan Pharmaceuticals, Inc. (“Mylan”), Impax Laboratories, Inc. (“Impax”) and Anchen Pharmaceuticals, Inc. (“Anchen”), which were filed by Cephalon, Inc. (“Cephalon”). AMRIX® is a pain drug with the active ingredient of cyclobenzaprine hydrochloride, for which U.S. Patent Nos. 7,387,793 (“the ‘793 patent”) and 7,544,372 (“the ‘372 patent”)(collectively “the patents-in-suit”).
By way of background, the Delaware District Court granted final judgment of noninfringement in favor of Anchen on May 12, 2011, and Anchen thereafter filed a motion for attorney fees on May 26, 2011 arguing that Cephalon's suit was entirely baseless from its inception. The District Court, however, disagreed stating that:
Plaintiffs' complaint provides the basis on which the suit was filed. Plaintiffs' complaint explains that "the Anchen Paragraph IV Notice letters . . . fail to comply with the requirements of 21 U.S.C. § 355(j)(2)(B)(iv)(II) because, inter alia, they contain very limited information about the generic formulation for which Anchen filed ANDA No. 91-281. For example, the Anchen Paragraph IV Notice letters do not list any of the ingredients in the proposed generic versions." Having been unable to come to an agreement with Anchen on the conditions under which they could procure or view a copy of ANDA No. 91-281, plaintiffs opted to file suit in order to obtain the information (and then prove that infringement was occurring as suspected).
The Delaware District Court then opined that Cephalon should have dismissed the suit after Anchen established that its ANDA product did not infringe the patents-in-suit. Cephalon responded that maintaining the action was justified because Anchen intended to go to trial on a "sham" formulation, and that should the Court grant Anchen final judgment of noninfringement "the Court would no longer have had jurisdiction to police Anchen's compliance with its promise not to reformulate, and Plaintiffs would have had no assurance that Anchen would not immediately reformulate its product in a manner that would infringe by, for example, simply copying Plaintiffs' product in order to obtain quick FDA approval."
The Delaware District Court found Cephalon's argument lacking admonishing that "there are safeguards against the end-run [Cephalon] feared." That is, "when an ANDA filer makes an alteration or amendment to its application, for example, by changing the drug's formula, the FDA requires ANDA filers to provide a new Paragraph IV Certification and re-notice the patent holder and drug owner." The District Court, likewise, summarily dismissed Cephalon's alleged concern "that another Paragraph IV Certification may not be required by the FDA" because Cephalon failed to explain "why or under what circumstances they would not be re-noticed (and, thus, have another opportunity to sue for infringement) if Anchen reformulated its drug." The District Court was not persuaded again admonishing Cephalon that "Without some explanation of how this fear would become reality, the court declines to accept plaintiffs' justification for maintaining suit."
As such, the Delaware District Court granted Anchen's motion for attorney fees citing AstraZeneca v. Dr. Reddy's for the proposition that maintaining a suit absent evidence of infringement renders a case exceptional. The attorney fees were not assessed from the filing of suit, but rather from September 2010, "a date by which plaintiffs opted to maintain a suit with clear knowledge that Anchen's product, as formulated, did not infringe." In doing so, the District Court noted that "plaintiffs did not originally file a frivolous suit; the suit became unjustifiable once plaintiffs declined to acknowledge that there was no need to maintain the suit in order to police Anchen's conduct."
Preliminary Injunction Against Mylan Vacated By Federal Circuit In DORYX® Case
The U.S. Court of Appeals for the Federal Circuit vacated the preliminary injunction against Mylan Pharmaceuticals, Inc. (“Mylan”) granted by the U.S. District Court for the District of New Jersey in Warner Chilcott Labs. v. Mylan Pharmaceuticals Inc. The litigation stems from Mylan’s filing of an ANDA containing a paragraph IV certification seeking FDA approval to market a generic version of DORYX® (active ingredient - doxycycline hyclate), for which U.S. Patent No. 6,958,161 (“the ‘161 patent”), that is directed to a tablet formulation of doxycycline, is listed in the Orange Book.
The New Jersey District Court construed the asserted claims in a Markman hearing, and thereafter advised the parties that the Court could not conduct a trial until January 2012 because of a murder trial that was set for fall 2011.
Then, one month before the 30-month stay was set to expire, in August 2011, Warner Chilcott filed a motion for a temporary restraining order and preliminary injunction against Mylan. In conjunction with this motion, the New Jersey District Court allowed arguments from counsel, but did not hold an evidentiary hearing and did not take testimony from any witnesses. The New Jersey District Court thereafter granted the preliminary injunction, but, as the Federal Circuit noted in its opinion, "did not address Mylan's arguments that the '161 Patent is invalid because of anticipation or obviousness, though it did acknowledge that those claims had been asserted." Mylan immediately filed a request for expedited briefing with the Federal Circuit and oral arguments were held on November 22, 2011.
In vacating the preliminary injunction, the Federal Circuit initially noted that a preliminary injunction "is an extraordinary remedy never awarded as of right." The Federal Circuit further noted that, when an accused infringer challenges the validity of a patent in response to a motion for a preliminary injunction, "the trial court first must weigh the evidence both for and against validity that is available at this preliminary stage in the proceedings."
The Federal Circuit continued in noting that the claim construction, although not directly at issue in the appeal, was relevant to the “reasonable likelihood of success on the merits” element of the preliminary injunction test. The Federal Circuit additionally observed that the New Jersey District Court considered the “battle” of expert witness reports from both Warner Chilcott and Mylan relating to the infringement question (but did not receive any testimony thereon), and moreover that the outcome of the "battle" was hardly definitive citing the New Jersey District Court’s statement that there were "some serious factual disputes" between the parties' experts that would need to be resolved after "further testimony and examination and credibility" at trial. The Federal Circuit also observed that "the district court did not address Mylan's arguments that the '161 Patent is invalid because of anticipation or obviousness."
As such, the Federal Circuit held that:
In this case, the district court abused its discretion in two ways. The court: (1) failed to hold an evidentiary hearing despite acknowledging that the decision turned on disputed factual issues; and (2) did not weigh the evidence or make any findings as to Mylan's invalidity challenge.
Interestingly, however, the Federal Circuit noted that a temporary restraining order might be in order as follows:
Although the district court's entry of the preliminary injunction in this case is contrary to controlling authority, we are mindful of the court's demanding schedule and desire to avoid duplicating its efforts with a soon-to-be-scheduled bench trial in this case. If doing so serves judicial efficiency, the district court may consider entering a temporary restraining order after this court's mandate issues, then consolidating the preliminary injunction hearing with the bench trial on the merits, assuming that can occur within the timeframes mandated by the Federal Rules of Civil Procedure.