Ariad Pharmaceuticals, Inc. v. Eli Lilly & Co., CIvil Action No. 02-11280-RWZ.

Citation529 F.Supp.2d 106
Decision Date06 July 2007
Docket NumberCIvil Action No. 02-11280-RWZ.
CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
PartiesARIAD PHARMACEUTICALS, INC., Massachusetts Institute of Technology, The Whitehead Institute for Biomedical Research, and the President and Fellows of Harvard College v. ELI LILLY & CO.

Christopher T. Jagoe, Leora Ben-Ami, Patricia A. Carson, Thomas F. Fleming, Vladimir Drozdoff, Kaye Scholer LLP, New York City, Lee C. Bromberg, Meredith L. Ainbinder, Kerry L. Timbers, Lisa M. Fleming, Bromberg & Sunstein LLP, Boston, MA, for Plaintiff.

Alison Baldwin, Andrew M. Williams, Anita Terpstra, David M. Frischkorn, Grantland G. Drutchas, Nicole A. Keenan, Paul Berhgoff, S. Richard Carden, McDonnell Boehnen Hulbert & Berghoff, Chicago, IL, Charles E. Lipsey, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP., Reston, VA, Christopher S. Schultz, Lawrence R. Robins, Leslie A. McDonell, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP., Cambridge, MA, David S. Forman, Howard W. Levine, Jennifer A. Johnson, Laura P. Masurovsky, Robert D. Bajefsky, Sanya Sukduang, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP., Washington, DC, for Defendant.

FINDINGS OF FACTS AND CONCLUSIONS OF LAW

ZOBEL, District Judge.

Table of Contents
                 I. Introduction..............................................................................112
                II. Background of the Case ...................................................................112
                    A. Ariad's Invention......................................................................112
                    B. Obtaining Allowance....................................................................113
                    C. Lilly's Drugs..........................................................................114
                    D. Commencement of Litigation.............................................................114
                    E. The Jury Trial.........................................................................114
                    F. Post—Verdict Motions ............................................................115
                    G. The Bench Trial........................................................................115
                III. Discussion...............................................................................116
                    A. Validity of the Patent Under 35 U.S.C. § 101......................................116
                       1. Exceptions to Patentable. Processes ................................................116
                       2. The Autoregulatory Loop Theorizes a Reduction in NF-KB Activity.....................117
                          a. Support for the Existence of the Autoregulatory Loop, ...........................118
                          b. Testimony of Ariad's Expert, Dr. Ravetch.........................................119
                          C. Cross—Examination of Dr. Latchman..........................................120
                          d. There Is Insufficient Evidence to Invalidate the Patent..........................120
                B. Inequitable Conduct During Prosecution of the '516 Patent .................................120
                       1. The Legal Standard for Inequitable Conduct..........................................121
                       a. Materiality.........................................................................121
                       b. Intent..............................................................................122
                    2. The Allegedly Withheld Information.....................................................122
                       a. Errors in Figure 43.................................................................122
                       b. References Showing Inherent Anticipation ...........................................123
                    3. The Materiality of the Errors and Omissions in Figure 43...............................123
                       a. The Description of Figure 43 Is Incorrect...........................................123
                       b. Figure 43 Is Incomplete.............................................................124
                       c. Figure 43 Is Material Despite Its Late Addition to the
                            Application ......................................................................125
                       d. Figure 43 Is Not Cumulative ........................................................125
                       e. The Errors in Figure 43 Are Material Under Both Standards ..........................126
                    4. The Materiality of the Prior Art References............................................127
                       a. The Cited References Are Not Cumulative.............................................128
                       b. Recognition Requirement for Inherent Anticipation ..................................130
                    5. Evidence of Intent Concerning the Errors in Figure 43 .................................131
                       a. The Prosecuting Firm and Attorney History of the '516 Patent........................131
                       b. Evidence of Intent by Hausdorff.....................................................133
                       c. Evidence of Intent by Vincent ......................................................133
                       d. Evidence of Intent by Clauss........................................................134
                          (1) Clauss' Testimony on Materiality................................................134
                          (2) Clauss' Response to Office Action...............................................134
                    6. Evidence of Inventor Baldwin's Intent to Conceal References............................135
                C. Lilly's Prosecution Laches Defense.........................................................136
                    1. The Legal Standard for a Finding of Prosecution Laches ................................136
                    2. Analysis of Delays in the Prosecution of the '516 Patent ..............................137
                       a. Requirement to File an Appeal.......................................................137
                       b. Six Month Response to Office Actions................................................138
                       c. The Pre-'898 Applications...........................................................138
                       d. Post Development Applications.......................................................138
                          (1) Prejudice to Public Rights......................................................139
                       e. Use of Transitional Rules...........................................................139
                IV. Conclusion ...............................................................................140
                
I. Introduction

Plaintiffs Ariad Pharmaceuticals, Inc., Massachusetts Institute of Technology, the Whitehead Institute for Biomedical Research, and the President and Fellows of Harvard College (collectively "Ariad"), owners and assignees of U.S. Patent No. 6,410,516 ("the '516 patent"), "Nuclear Factors Associated With Transcriptional Regulation," complain that defendant Eli Lilly & Co. ("Lilly") infringed it. Following a fourteen-day trial in April 2006, a jury found that the four asserted claims were valid against anticipation, enablement and written description defenses, and that use of Lilly's Evista and Xigris products infringed the patent. The jury awarded plaintiffs damages in excess of $65 million.

The parties agreed that certain additional defenses were to be tried to the court. Lilly asserts that the '516 patent is invalid ' because it attempts to claim non-patentable subject matter under 35 U.S.C. § 101. Even if the patent is valid, Lilly argues (1) that it cannot be enforced because of inequitable conduct by plaintiffs during the prosecution of the patent, or in the alternative; (2) that plaintiffs are estopped from recovering for any infringement because they unreasonably delayed prosecution of the patent.1 Following a second trial focused on these issues, I find that: (1) the four claims asserted are patentable; (2) Lilly has not proven inequitable conduct during patent prosecution; and (3) Ariad did not unreasonably delay prosecution of the '516 patent. Accordingly, the jury award stands.

II. Background of the Case
A. Ariad's Invention

In the mid-1980s, scientists at the Massachusetts Institute of Technology, the Whitehead Institute for Biomedical Research, and Harvard University ("plaintiff institutions") identified a protein called Nuclear Factor Kappa B ("NF-κB"). Present in the cytoplasm of many different cell types, NF-κB is what is known as a transcription factor, a protein that affects gene expression.2 In the inactive state, NF-κB binds in the cytoplasm with another protein, Inhibitor Kappa B ("IκB"), to form a multi-protein complex.3 When NFRB is activated by various stimuli external to the cell, the complex dissociates and free NF-κB is released. This free NF-κB , then travels into the cell nucleus and binds there to specific DNA sequences, causing the cell to produce proteins that are associated with many diseases, including cancer, AIDS, sepsis, and atherosclerosis. Inhibiting this process has enormous and wide-ranging therapeutic effects.

The inventors filed a patent application on their invention. After a sixteen year trek through the United States Patent and Trademark Office (the "PTO") ,littered with abandoned, divisional and continued applications, they were granted the '516 patent on June 25, 20024 Throughout much of the prosecution history of the '516 patent, questions concerning enablement under 35 U.S.C. § 112 delayed allowance,5 in many instances because the claims called for the use of an "agent" or "substance" to effect a reduction or alteration in the level of NF-κB activity in the cell. The PTO repeatedly rejected these claims because it said that the specification did not adequately describe all possible agents or substances encompassed by the claims.

B. Obtaining Allowance

On August 10, 2000, the primary examiner of the '516 application, Dr. Robert Schwartzman ("Schwartzman"), rejected all but one claim of the pending application as not adequately describing the agents used in claims drawn to methods requiring "an agent which has an effect on . . . NFRB and/or IκB." (DTX 2 at ADL823-33, ADL825.)6...

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