Carter-Wallace, Inc. v. Riverton Laboratories, Inc.

• Decision Date: 02 October 1969
• Docket Number: Civ. A. No. 65-4.
• Parties: CARTER-WALLACE, INC., Plaintiff, v. RIVERTON LABORATORIES, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

304 F. Supp. 357

CARTER-WALLACE, INC., Plaintiff, v. RIVERTON LABORATORIES, INC., Defendant.

Civ. A. No. 65-4.

United States District Court S. D. New York.

October 2, 1969.

COPYRIGHT MATERIAL OMITTED

Morgan, Finnegan, Durham & Pine, New York City, for plaintiff. George B. Finnegan, Jr., William D. Denson, John D. Foley, William C. Sigerson, New York City, of counsel.

John P. Chandler, New York City, for defendant. Zachary T. Wobensmith, II, Zachary T. Wobensmith, III, Philadelphia, Pa., of counsel.

CANNELLA, District Judge.

The plaintiff, Carter-Wallace, Inc. ("Carter-Wallace"), instituted this action for infringement of U. S. Patent No. 2,724,720 issued to its predecessor, Carter Products, Inc., on November 22, 1955. The patent relates to certain organic compounds useful in the treatment of disorders of the central nervous system. Claim 4 of the patent in issue covers the compound 2-methyl-2-n-propyl-1, 3-propanediol dicarbamate, a substance otherwise known as meprobamate. This compound has been marketed as an ethical drug¹ under certain trade names, of which "Miltown" and "Equanil" are the most common. The validity of the plaintiff's patent on meprobamate is challenged by the defendant, Riverton Laboratories ("Riverton"). The latter has produced the patented compound and has sold it under its generic designation of meprobamate. Prior to the trial of this case, Riverton conceded that it "has infringed claim 4 of the United States Patent No. 2,724,720 by making and selling meprobamate tablets, provided the court further finds said patent to be valid and enforceable."² It has thus narrowed the issues before this court to the questions of the validity and the enforceability of the patent in suit.

The defendant raised certain defenses in its pleadings which can be summarized as follows:

1) That the patent in suit is invalid due to fraud practiced upon the Patent Office during the pendency of the patent application;³

2) That the patent is unenforceable due to false and misleading representations made to the public constituting a misuse of the patent privilege and unclean hands on the part of the plaintiff;

3) That the plaintiff used its patent to extend its lawful monopoly to certain unpatented materials;⁴ and

4) That the plaintiff used its patent to lessen competition by allegedly interfering with the defendant's performance of government contracts.

This summarization of defenses does not encompass all the matters raised before the court, but it does serve to frame the questions presented so that a determination of the fundamental issues may be initially presented.

The Court finds that the patent in suit is valid, enforceable and infringed and that the plaintiff is entitled to judgment in this case. After examination and consideration of all relevant matters of fact and law, the court finds that the defendant has failed to sustain its burden of establishing that the patent was procured by fraud upon the Patent Office and thus overcome the prima facie validity of the patent in suit. Further, the defendant has failed to prove that the plaintiff engaged in activities which would constitute interference with its performance of government contracts and that this failure of proof requires dismissal of this defense to the enforcement of the patent. The court further finds, as the defendant concedes,⁵ that the record is devoid of any evidence which could justify the court in finding that the plaintiff committed a fraud on the public or extended its monopoly to unpatented materials.⁶

Therefore, the counterclaim of the defendant is dismissed as are its defenses and the court directs that judgment be entered for the plaintiff, including its right to damages, injunctive relief and an accounting. The plaintiff's demands for punitive damages and attorneys' fees are denied.

The court finds that it has jurisdiction of both the parties to, and the subject matter of, this action and that venue is properly laid in this district. 28 U.S.C. §§ 1338(a), 1400(b) (1964 ed.); Purer & Company v. Aktiebolaget Addo, 410 F.2d 871 (9th Cir. 1969); Pre-Trial Order, para. 3A (iii).

Prior to the trial of this action by the court, sitting without a jury, the matter of plaintiff's motion to strike certain defenses asserted by Riverton was denied. The hearing on the motion had been deferred to the trial judge and, after argument, this court denied the motion. Carter-Wallace, Inc. v. Riverton Laboratories, Inc., 47 F.R.D. 366 (S.D.N.Y. 1969). The plaintiff had attacked the defenses summarized above as insufficient in law and had moved that they be stricken from the pleadings prior to the trial of the action.

The denial of that motion and the dismissal of the same defenses herein might be construed on the surface as inconsistent. But the rationale for the determination on the motion was clear — that the defendant be given the opportunity to prove its defenses at trial and that to deny it this chance prior to trial would be improper. In addition, the Court determined that certain questions, such as the effect of Brenner v. Manson, 383 U.S. 519, 86 S.Ct. 1033, 16 L.Ed.2d 69 (1966), on the matters in issue, be better left for discussion after trial. The court has no intention of delineating its decision on the motion within this opinion. It is only appropriate however, to note the seeming inconsistency of holding the defenses sufficient as a matter of law prior to trial and dismissal of these defenses after trial and to reiterate that the court gave the defendant every opportunity to sustain its defenses by adequate proof. The court finds that the defendant has not done so.

The patent in suit was issued on November 22, 1955 to Carter Products, Inc. upon the application of Frank M. Berger and Bernard J. Ludwig. The application was first filed on July 29, 1950 by the patentees and thereafter a continuation-in-part application was filed on August 3, 1953. This latter application matured into the patent in suit. Claim 4 of the patent is that meprobamate is a substance which possesses certain anti-convulsant properties and also can produce a marked paralyzing action on voluntary muscles when administered in certain dosages. The applications furnished to the Patent Office disclosed that certain tests had been performed on laboratory animals, with stated results, that the compound was similar in reaction to maphenesin, a drug used at the time of the applications (1950-1955), but that it possessed properties which made it more effective and of longer duration in the treatment of muscle spasm, anxiety and other disorders of the nervous system. Based upon the information furnished to the Patent Office, the patent issued to Carter Products, Inc. On December 9, 1954, Dr. Frank M. Berger filed a new drug application with the Food and Drug Administration ("F. D.A."), an application which contained all the pharmacological and chemical data on meprobamate available at that time. Based upon fulfillment of its requirements, the F.D.A. granted the application on April 28, 1955, and the first sale of the substance was made on May 9, 1955.

Meprobamate was marketed as an ethical drug by the plaintiff for it was Dr. Berger's conclusion concurred in by the F.D.A., that use of the drug should be initiated and supervised by a physician. The plaintiff sold the substance under certain brand or trade names while the defendant, when it began to sell meprobamate, did so by marketing it as a generic drug, without the use of trade names. The court is of course aware that for some time the ethics and economics of the use of trade names in the sale of generic drugs has been the source of a great deal of discussion, some dispute and suggestions for proposed regulation. However interesting this area may be, it is not truly an issue in the case at bar. The defendant does not attempt to justify any of its actions by resort to a claim that its sale of meprobamate as a generic drug is of aid to the public at large per se or that this course of action was followed for reasons other than sale of the product to the government. While the temptation to comment on this important question is a great one, the court will refrain from injecting such an issue into the matters before it.

Another matter of recent nation-wide attention does bear some relation, however tangential, to the issue presented by the defendant in its claim of fraud by the patentee in its application to the Patent Office. Although the matter will be explored in some detail infra, it can be stated at this juncture that Drs. Berger and Ludwig presented statistical and pharmacological information on meprobamate to the Patent Office based upon tests performed on laboratory animals. Human statistical information was neither provided nor requested. At a later time, the F.D.A. granted a new drug application made by Dr. Berger based upon a broader range of information including tests on humans. Of late, the testing procedures for new drugs has come under close scrutiny with some reports that information provided to the F.D.A. has been both inadequate and in some instances may be inaccurate. While such emphasis by the national media on new drugs and their controls brings to mind the still evident consequences of the thalidomide controversy, this issue is also not squarely before the court. Neither the defendant in asserting its rights, nor the court in protecting the public interest found it necessary to delve into F.D.A. procedures for granting new drug applications except insofar as that matter related to the background of the case and the intent of the patentees. The grant of such new drug application is not in issue; the issuance of the patent certainly is. Thus, the concern which all of us possess toward the proper regulation of the drug industry is only present here in the broadest sense for the facts which will be discussed relate to the manner in which a chemical compound is tested for the first time and...