Apotex, Inc. v. Ucb, Inc.

• Citation: 970 F.Supp.2d 1297
• Decision Date: 09 September 2013
• Docket Number: Case No. 12–60706–CIV.
• Parties: APOTEX, INC., et al., Plaintiff/Counter–Defendants, v. UCB, INC., et al., Defendants/Counter–Plaintiffs.
• Court: U.S. District Court — Southern District of Florida

970 F.Supp.2d 1297

APOTEX, INC., et al., Plaintiff/Counter–Defendants,

v.UCB, INC., et al., Defendants/Counter–Plaintiffs.

Case No. 12–60706–CIV.

United States District Court, S.D. Florida.

Sept. 9, 2013.

Brian J. Sodikoff, Craig M. Kuchii, Dennis C. Lee, Elese E. Hanson, Eric C. Cohen, Julia L. Kasper, Martin S. Masar, III, Michael A. Dorfman, Robert Burton Breisblatt, Katten, Muchin, Rosenman, LLP, Chicago, IL, Christopher B. Ferenc, Katten, Muchin, Rosenman, LLP, Washington, DC, Maria Josefa Beguiristain, White & Case, LLP Miami, FL, Matthew Scott Nelles, Broad and Cassel, Fort Lauderdale, FL, for Plaintiff/Counter–Defendants.

Adam R. Gahtan, Amit Thakore, Christopher J. Glancy, Dimitrios Drivas, Laura Moran, White & Case, LLP, New York, NY, for Defendants/Counter–Plaintiffs.

OPINION AND ORDER

DONALD M. MIDDLEBROOKS, District Judge.

THIS CAUSE comes before the Court for final disposition of the issues presented during a bench trial held from July 29, 2013, through July 31, 2013. Apotex ¹ asserts that UCB ² infringes Claims 8, 9, 10, 11, and 12 of United States Patent No. 6,767,556 (the “'556 Patent”) by manufacturing and selling their Univasc and Uniretic products, as well as generic versions thereof. UCB contends that it does not infringe the ' 556 Patent and that the patent is invalid. UCB also contends that: (1) Apotex disclaimed the Univasc process from the scope of the claims during prosecution of the ' 556 Patent; (2) Apotex's infringement claims are barred by judicial estoppel; (3) the ' 556 Patent is unenforceable due to inequitable conduct; and (4) Apotex is barred by the laches doctrine from collecting pre-filing damages.

This case involves an orchestrated scheme to deceptively obtain a patent with respect to a competitor's product. It is illustrative of inventive litigation, as opposed to the scientific discovery that the patent laws were designed to promote.

The claimed “invention” is the addition of an unspecified amount of water in a wet granulation process for an unspecified amount of time in a controlled but unspecified manner. The Patent issued because the inventor: (1) misrepresented the nature of an existing drug already on the market for years prior to his filing, as well as the prior art (pursuant to which that drug had been licensed); (2) concealed his knowledge of the Univasc process from the PTO; and (3) gave the United States Patent and Trademark Office (the “PTO”) Examiner results of experiments that he never conducted. Now, nearly 8 years after the inventor and founder of Apotex, Dr. Bernard Charles Sherman (“Dr. Sherman”), explicitly told the PTO that the existing drug's manufacturing process was different, Apotex brings this suit alleging infringement by that same drug. Not only should the Patent never have issued, but this lawsuit should never have been brought, certainly not at this late date.

For the reasons stated in greater detail below, judgment is due to be entered in favor of UCB and against Apotex.

I. Procedural Background

Apotex initiated this action for patent infringement on April 20, 2012. On July 24, 2012, I consolidated this case for pretrial purposes with another case before me, as the same plaintiffs alleged infringement of the same patent, but against different defendants. This separate case, No. 12–CV–60707–MIDDLEBROOKS/TORRES, was later dismissed upon the submission of a Rule 41 joint stipulation of dismissal.

In the Complaint, Plaintiffs allege that UCB ³ infringes ' 556 Patent, which is owned by Apotex Inc.⁴ The ' 556 Patent is entitled “Pharmaceutical Compositions Comprising Moexipril Magnesium,” and was issued on July 27, 2004, naming Dr. Sherman as the sole inventor and assignee. Dr. Sherman subsequently executed a nunc pro tunc assignment of the ' 556 Patent to Apotex, Inc., effective as of July 2004. The ' 556 Patent claims a process for the manufacture of stable moexipril magnesium tablets for the treatment of high blood pressure.

Specifically, the Complaint alleges that UCB's processes for the manufacture of their “Univasc” and “Uniretic” products infringe the ' 556 Patent's claims. UCB has manufactured and sold Univasc and Uniretic in the United States for the treatment of hypertension since the 1990s.

Apotex is alleging infringement of Claims 8, 9, 10, 11, and 12 of the '556 Patent against UCB. Dependent Claims 9–12 are being asserted based on their dependency from Claim 8 only.⁵ In response to the Complaint, UCB filed its Amended Answer, Affirmative Defenses, and Counterclaims (“Answer”) (DE 88) on February 20, 2013. Defendants counterclaimed for the following: (1) a declaratory judgment of non-infringement of the ' 556 Patent (Count I); (2) a declaratory judgment of invalidity of the ' 556 Patent (Count II); and (3) a declaratory judgment of unenforceability of the ' 556 Patent (Count III).

The parties filed cross Motions for Summary Judgment. In Apotex's Motion, Apotex sought summary judgment on UCB's unenforceability, invalidity, and non-infringement defenses and counterclaims. In UCB's Motion, UCB sought summary judgment based on disclaimer, judicial estoppel, invalidity, unenforceability based on inequitable conduct, and laches. After conducting a Status Conference held on July 11, 2013, during which I listened to the parties' arguments on the Motions, I determined that the best course action was to deny the motions and proceed to trial, given the specialized knowledge and understanding required. ( See DE 188). Because of my suspicion based upon the argument and written submissions that the issues to be decided by the Court would predominate over matters entrusted to a jury, I decided to bifurcate the trial to spare jurors the inconvenience of a lengthy trial which might be unnecessary.

The Court held a three-day bench trial to address the issues suited to be resolved by the Court, with a jury trial scheduled to follow for the remaining issues.⁶ After hearing the evidence and testimony presented by both parties, I found it appropriate to first rule on the bench issues before calling in prospective jurors. As stipulated by the parties, ( see DE 209), the bench trial issues included claim construction issues (including UCB's disclaimer defense and indefiniteness invalidity defense) and UCB's equitable defenses ( i.e., inequitable conduct, laches, and judicial estoppel). Had a jury been selected, they would have considered infringement, damages, and UCB's other invalidity defenses (including anticipation, obviousness, and lack of written description and enablement).

This Opinion constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). The parties filed post-trial proposed findings of fact and conclusions of law on August 7, 2013.

II. Factual Background

The issues in this case involve processes for making stable moexipril tablets, used to treat high blood pressure.⁷ The stability of a drug is important, as both the efficacy and safety of the drug can be negatively affected if the drug degrades over time. For example, moexipril must be stable because it will degrade over time into another chemical compound (diketopiperazine) that is not effective for treating high blood pressure.⁸Moexipril's instability has been a known problem for pharmaceutical formulators for quite some time—long before the issuance of the patent-in-suit.

A. Univasc and Uniretic

UCB has continuously marketed and sold stable moexipril tablets—Univasc and Uniretic—in the United States since 1995 and 1997, respectively. The Univasc and Uniretic manufacturing processes are the same with respect to the moexipril component in each; they both involve the wet granulation of moexipril hydrochloride,⁹ lactose monohydrate, and magnesium oxide. ¹⁰ The ingredients, master formulation, and manufacturing processes for the Univasc and Uniretic products have not materially changed since both drugs' introduction to the market.

The exact processes for manufacturing Univasc and Uniretic were never explicitly disclosed by UCB. While Apotex tried to argue that UCB took steps to retain the processes as a trade secret, the testimony from UCB's witness, Jeffrey Seifert, indicated that the processes were merely never publicly disclosed. However, several factors lend themselves to allow an experienced pharmaceutical formulator to determine UCB's processes. First, the Univasc and Uniretic products were sold in the United States and able to be examined. Second, all of the ingredients used to manufacture Univasc tablets were publicly disclosed at least as early as 1998 in the “Product Monograph for Univasc” (JTX 2E).¹¹ Third, the Food and Drug Administration's (the “FDA”) Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) associated Univasc and Uniretic with the ' 450 Patent, indicating that these products were made in accordance with the ' 450 Patent' s teachings.¹²

In sum, Univasc and Uniretic had been on the market for several years by 2001. This, combined with the publicly available information, allowed for a skilled pharmaceutical formulator to easily discover and practice UCB's processes. As it turns out, Univasc's process, which reacts moexipril hydrochloride with magnesium oxide to get the more stable moexipril compound, moexipril magnesium, is nearly the same process that was later claimed by one such skilled formulator.

B. Dr. Bernard Sherman

Enter Dr. Bernard Sherman, a distinguished engineer by education and accomplished pharmaceutical formulator and businessman by trade. Dr. Sherman is the founder and chairman of Apotex, Inc. and Apotex Corp. Apotex, Inc. is a pharmaceutical manufacturer of generic drugs, and the largest pharmaceutical company in Canada. In all, Dr. Sherman has about 10,000 employees under his direction.

To say that Dr. Sherman is experienced in pharmaceutical formulations would be an understatement. He testified that he has supervised or conducted “tens of thousands”...