Burroughs Wellcome Co. v. Barr Laboratories, Inc., 91-41-CIV-4-H

• Decision Date: 04 June 1993
• Docket Number: 92-156-CIV-4-H and 92-117-CIV-5-H.,No. 91-41-CIV-4-H,92-134-CIV-4-H,91-41-CIV-4-H
• Citation: 828 F. Supp. 1200
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: BURROUGHS WELLCOME CO., Plaintiff, v. BARR LABORATORIES, INC., Defendant, BURROUGHS WELLCOME CO., Plaintiff, v. NOVOPHARM, INC., Defendant, BURROUGHS WELLCOME CO., Plaintiff, v. NOVOPHARM LTD., Defendant. BURROUGHS WELLCOME CO., Plaintiff, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES and the National Institutes of Health, Defendants.

828 F. Supp. 1200

BURROUGHS WELLCOME CO., Plaintiff, v. BARR LABORATORIES, INC., Defendant, BURROUGHS WELLCOME CO., Plaintiff, v. NOVOPHARM, INC., Defendant, BURROUGHS WELLCOME CO., Plaintiff, v. NOVOPHARM LTD., Defendant.

BURROUGHS WELLCOME CO., Plaintiff, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES and the National Institutes of Health, Defendants.

Nos. 91-41-CIV-4-H, 92-134-CIV-4-H, 92-156-CIV-4-H and 92-117-CIV-5-H.

United States District Court, E.D. North Carolina.

June 4, 1993.

Thomas Curnin, New York City and Mark Ash, Raleigh, NC, for Burroughs Wellcome Co.

Daniel Webb, Chicago, IL and John A.J. Ward, New Bern, NC, for Barr Laboratories, Inc.

Robert Green, Chicago, IL and Rudolph Ashton, III, New Bern, NC, for Novopharm, Inc. and Novopharm, Ltd.

Robert B. Lanman, Chief, NIH Branch Office of Gen. Counsel, HHS, Bethesda, MD and Paul M. Newby, Asst. U.S. Atty., Office of U.S. Atty., Raleigh, NC, for Nat. Inst. of Health.

ORDER

MALCOLM J. HOWARD, District Judge.

This matter is before the court on two motions for partial summary judgment filed by plaintiff Burroughs Wellcome Co. ("BW Co."). BW Co. moves for partial summary judgment against defendants Barr Laboratories, Inc., ("Barr"), and Novopharm, Inc., and Novopharm Ltd. (together "Novopharm") that no employee of the National Institutes of Health ("the NIH") was an inventor of any of the subject matter claimed in U.S. patents 4,724,232 (the "'232 patent") and 4,833,130 (the "'130 patent"). BW Co. also moves for partial summary judgment against Novopharm on the issues of inequitable conduct before the U.S. Patent Office and failure to name the proper inventors with deceptive intent. These motions have been fully briefed. On May 28, 1993, the court heard extensive oral arguments on the motions. These matters are now ripe for ruling.

Having fully reviewed the motions and memoranda and considered the oral arguments of counsel, the court hereby DENIES BW Co.'s motions for partial summary judgment.

PROCEDURAL BACKGROUND

BW Co., a research-oriented pharmaceutical company, owns and controls six U.S. patents covering various methods of using azidothymidine ("AZT") in the treatment of persons infected with the Human Immunodeficiency Virus ("HIV").¹ HIV is a causative agent of acquired immune deficiency syndrome ("AIDS"). BW Co. manufactures and sells AZT under the brand name Retrovir®.

On March 19, 1991, Barr filed an Abbreviated New Drug Application ("ANDA") with the Food & Drug Administration ("FDA") seeking approval to manufacture and distribute a generic pharmaceutical capsule containing AZT. In accordance with the Drug Price Competition and Patent Term Restoration Act of 1984, codified as 21 U.S.C. § 355 and 35 U.S.C. §§ 156, 271(e), Barr certified to the FDA that the BW Co. patents were either invalid or not infringed by the product described in its ANDA. Barr also informed BW Co. by letter dated April 9, 1991, pursuant to 21 U.S.C. § 355(j)(2)(B), of its certification to the FDA that the BW Co. patents were invalid or, in the alternative, that the generic product described in its ANDA did not infringe the BW Co. patents.

On May 14, 1991, BW Co. commenced this action for patent infringement against Barr, alleging technical infringement of the BW Co. patents under 35 U.S.C. § 271(e)(2)(A). In its answer to the complaint, Barr contends that two scientists employed by the NIH were coinventors of the subject matter of the BW Co. patents but were not joined as inventors on the patents. Barr and the NIH entered into a nonexclusive licensing agreement in which Barr agreed to litigate the issue of the NIH's inventorship interest in the BW Co. patents in exchange for a license from the NIH to manufacture and market AZT in the event that such rights were established.

On June 26, 1992, Novopharm Ltd., a Canadian corporation, filed an ANDA with the FDA seeking approval to manufacture and market Novo-AZT, a generic version of AZT. At the same time, Novopharm, Inc., unsuccessfully sought to obtain a license from the NIH to exploit the NIH's alleged inchoate rights in the BW Co. patents. After learning of these events, BW Co. filed a suit for patent infringement against the Novopharm defendants. The Novopharm actions were consolidated with the Barr action by this court on November 30, 1992.

Like Barr, Novopharm asserts that two scientists employed by the NIH should have been named as coinventors on the BW Co. patents. But, unlike Barr, Novopharm contends that BW Co. engaged in inequitable conduct before the U.S. Patent Office and acted with deceptive intent when it failed to inform the U.S. Patent Office of the identity of all of the proper inventors. For this reason, Novopharm seeks a declaration that the BW Co. patents are invalid and unenforceable.

STATEMENT OF FACTS

From the parties' memoranda and exhibits, the court has discerned the following facts which the court believes to be relevant to the issues of inventorship and inequitable conduct. The inventors named on the BW Co. patents are Dr. Janet Rideout, Dr. David Barry, Dr. Sandra Lehrman, Ms. Martha St. Clair and Dr. Phillip Furman (hereinafter "the BW Co. inventors"). Barr and Novopharm contend that Dr. Samuel Broder and Dr. Hiroaki Mitsuya, both employees of the NIH, should also be named as inventors.

With the emergence and identification of AIDS in the early 1980s, researchers throughout the scientific community began searching for both the cause of and a cure for AIDS. In 1984, Dr. Gallo of the NIH and Dr. Montagnier of the Institute Pasteur in France discovered independently that AIDS was caused by a retrovirus identified as HIV. After the discovery that HIV was a retrovirus, BW Co. began screening compounds for antiretroviral activity in an effort to find an effective therapy for AIDS. BW Co. screened compounds for activity against two murine retroviruses.²

During this same time period, scientists at the NIH, primarily under the direction of Dr. Broder, began searching for a cure for AIDS. Unlike BW Co., Dr. Broder and his fellow scientists at the NIH, in particular Dr. Mitsuya, worked with live HIV. As a result of their work with live HIV, they were able to develop an assay incorporating a unique cell line capable of demonstrating a compound's effectiveness at inhibiting the replication of HIV.

After learning that Dr. Broder was interested in obtaining compounds from private pharmaceutical companies to screen for activity against HIV, BW Co. contacted Dr. Broder in the fall of 1984 and arranged a meeting. On October 5, 1984, Dr. Broder visited BW Co.'s offices in Research Triangle Park, North Carolina, to conduct a seminar on the pathogenesis and clinical manifestations of HIV. Further, Dr. Broder met with Dr. Barry and as a result of this meeting, Dr. Broder agreed to accept compounds under code from BW Co. for testing against live HIV.

On October 29, 1984, Dr. Rideout selected AZT for testing in BW Co.'s murine screens. Ms. St. Clair conducted these tests and reported that AZT showed significant activity against FLV and HaSV at low concentrations. After obtaining these positive results, the BW Co. scientists first discussed patenting the use of AZT to treat AIDS on December 5, 1984. On January 15, 1985, BW Co. decided to file a patent application covering the use of AZT as an AIDS therapy.

On February 4, 1985, BW Co. sent a sample of AZT to Dr. Broder under the code name Compound S. In the letter accompanying the sample of Compound S, Dr. Lehrman informed Dr. Broder that Compound S had been tested in murine and feline leukemia virus systems and that HIV replication had been inhibited at certain concentrations. Dr. Lehrman suggested screening Compound S at 1, 5, 10, and 50 micromolar concentrations.

By February 6, 1985, a draft patent application was prepared for filing in the United Kingdom disclosing the use of AZT as an AIDS therapy. This draft application did not disclose the identity of inventors, but did disclose an effective dosage range sufficient to treat humans infected with HIV.

In mid-February, Dr. Mitsuya tested Compound S against live HIV and reported positive activity against replication of HIV. On February 20, 1985, Dr. Broder phoned Dr. Lehrman to give her the results of Dr. Mitsuya's testing. On March 1, Dr. Broder once again met with the BW Co. scientists at Research Triangle Park to review the results of Dr. Mitsuya's testing and to develop a plan for clinical trials of AZT. It was at this meeting on March 1 that BW Co. informed Dr. Broder that Compound S was AZT. Before BW Co. told Dr. Broder that Compound S was AZT, Dr. Mitsuya had never heard of AZT and neither Dr. Broder nor Dr. Mitsuya had thought of using AZT as a potential AIDS therapy.

The legal significance of these facts is hotly contested and embodies the central issue in these law suits. BW Co. contends that the inventors named on the BW Co. patents had a full and complete conception of the idea of using AZT as a therapy for AIDS prior to the testing performed by Dr. Broder and Dr. Mitsuya and without any conceptive contribution from them. In contrast, the defendants contend that the Dr. Broder and Dr. Mitsuya contributed to the conception of the idea of using AZT as an AIDS therapy and that, as a matter of law, the BW Co. inventors could not have had a full and complete conception until AZT had been tested and found effective against live HIV.

DISCUSSION

Standards for Summary Judgment

Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, ...