McNeil-Ppc, Inc. v. Perrigo Co., 05 Civ. 1321(WHP).

• Decision Date: 27 July 2006
• Docket Number: No. 05 Civ. 1321(WHP).,05 Civ. 1321(WHP).
• Citation: 443 F.Supp.2d 492
• Parties: McNEIL-PPC, INC. et al., Plaintiffs, v. PERRIGO COMPANY et al., Defendants.
• Court: U.S. District Court — Southern District of New York

443 F.Supp.2d 492

McNEIL-PPC, INC. et al., Plaintiffs, v. PERRIGO COMPANY et al., Defendants.

No. 05 Civ. 1321(WHP).

United States District Court, S.D. New York.

July 27, 2006.

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Raymond N. Nimrod, Jenner & Block LLP, Chicago, IL, for Plaintiffs.

James A. Mitchell, Price, Heneveld, Cooper, DeWitt & Litton, LLP, Grand Rapids, MI, for Defendants.

MEMORANDUM AND ORDER

PAULEY, District Judge.

McNeill-PPC, Inc. ("McNeil"), Merck & Co., Inc. and Johnson & Johnson. Merck Consumer Pharmaceuticals Co. (collectively, the "Plaintiffs") bring this action pursuant to the Hatch-Waxman Act, 35 U.S.C. § 271(e)(2), against Perrigo Company, L. Perrigo Company and Perrigo Research & Development Company (collectively, the "Defendants" or "Perrigo"). Plaintiffs accuse Perrigo of infringing U.S. Patent No. 5,817,340 (the "'340 patent") by filing Abbreviated New Drug Application ("ANDA") No. 77-355 with the United States Food and Drug Administration (the "FDA").

Defendants move under Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.Cir.1995), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996) and Fed.R.Civ.P. 56 for the Court to construe the relevant patent claims and for summary judgment dismissing the Complaint on grounds of non-infringement and invalidity. Defendants also seek sanctions under Fed.R.Civ.P. 11 for the inclusion of willful infringement allegations in the Complaint. For the reasons set forth below, Defendants' motions for summary judgment and Rule 11 sanctions are denied, and this Court grants summary judgment in favor of Plaintiffs on their claim of infringement.

BACKGROUND

The '340 patent pertains to a solid oral dosage of aluminum hydroxide or magnesium hydroxide (the "antacids") and famotidine. Famotidine is a guanidinothiazole compound that inhibits acid secretion in the stomach by interfering with histamine receptors in the stomach lining. (Declaration of Kristopher R. Kiel, dated Feb. 24, 2006 ("Kiel Decl."), Ex. 1: '340 Patent col. 51, ll. 31-32; Transcript of Proceedings, dated Apr. 25, 2006 ("Tr.") at 13-14.) Aluminum hydroxide and magnesium hydroxide neutralize acid already present in the stomach. (Tr. at 8-9.) When combined in a solid oral dosage, famotidine and antacids are used to treat gastric disorders arising from acid secretion, such as acid indigestion. McNeil markets this combined dosage as Pepcid Complete. (Declaration of James Gabriele, dated Dec. 30, 2005 ("Gabriele Decl.") ¶ 6; Tr. at 15.)

McNeil filed the '340 patent application on December 1, 1992 with Edward John Roche ("Roche"), Susan Decoteau and Eleanor Freeman as the named inventors. (Kiel Decl. Ex. 1: Paper No. 1.)¹ These inventors discovered that famotidine degrades when exposed to antacids, yielding a therapeutically ineffective product with unknown properties. (Kiel Decl. Ex. 1: '340 Patent col. 1, ll. 26-30; col. 2, ll. 41-49; col. 2, ln. 61—col. 3, ln. 2.) The '340 patent teaches a method for preventing famotidine degradation.

At issue are independent composition claim 1 and independent method claim 5 of the '340 patent. Claim 1 recites as follows:

1. A solid oral dosage form for the treatment of gastrointestinal disorders comprising a therapeutically effective amount of impermeably coated famotidine granules for the treatment of gastric disorders and pharmacologically acceptable salts thereof; and a therapeutically effective amount of aluminum hydroxide or magnesium hydroxide wherein the oral dosage form has said coated famotidine granules and the aluminum hydroxide or magnesium hydroxide in contact with each other, but separated by said impermeable coating on the famotidine granules which is impermeable to the aluminum hydroxide or magnesium hydroxide.

('340 Patent col. 14, ll. 39-49.) Claim 5 recites as follows:

5. A method for manufacturing a solid oral dosage form comprising: a) forming granules containing famotidine for the treatment of gastric disorder; b) coating the granules with a coating impermeable to aluminum hydroxide or magnesium hydroxide to form impermeably coated famotidine granules; c) mixing a therapeutically effective amount of aluminum hydroxide or magnesium hydroxide with a therapeutically effective amount of impermeably coated famotidine granules and pharmaceutically acceptable excipients to form a compression mixture; then d) pressing the compression mixture to form a solid oral dosage form.

('340 Patent col. 15, ln. 6—col. 16, ln. 2.) The specification details several embodiments of the invention. In the preferred embodiment, granulated famotidine is coated with an impermeable material that protects the famotidine from the antacids. ('340 Patent col. 9, ll. 7-12.) The specification details two variations on this embodiment. In Examples I and V, the coated famotidine granules and the antacids are interspersed throughout a single-layer tablet. ('340 Patent col. 9, ln. 39—col. 10, ln. 60; col. 13, ln. 52—col. 14, ln. 37.) Examples II and III depict two-layer embodiments in which the coated famotidine granules comprise one layer and the antacids comprise the other layer.² ('340 Patent col. 10, ln. 63—col. 12, ln. 51.)

The specification also presents three-layer embodiments in which a layer of impermeable film-forming polymer separates a layer of uncoated famotidine from a layer of antacids. ('340 Patent col. 3, ln. 14—col. 4, ln. 43.) There are two variations of this embodiment in the specification. In Figures 1 and 2, the uncoated famotidine is on top and the antacids are on the bottom, with a layer of impermeable material in between (the "barrier sandwich" embodiment). ('340 Patent col. 3, ll. 14-34.) Figures 3 and 4 depict an inner core of antacids encapsulated by the impermeable material, which is surrounded by an outer layer of uncoated famotidine (the "core" embodiment). ('340 Patent col. 3, ll. 35-65.)

The original '340 application encompassed all of the above-described embodiments (Kiel Decl. Ex. 2: Paper No. 1, at 5-8, 20-32.). The application purported to show that at 40 degrees Celcius and 75% humidity, uncoated guanidinothiazole exposed to aluminum hydroxide experienced 1.1% degradation by weight over the course of a month. (Kiel Decl. Ex. 2: Paper No. 1, Fig. 8.) Under the same conditions, coated famotidine experienced approximately 0.1-0.2% degradation by weight. (Kiel. Decl. Ex. 2: Paper No. 1, Fig. 9.) Thus, McNeil argued that the coating reduced the level of famotidine degradation.

The Patent Office repeatedly rejected McNeil's claims, primarily on grounds of obviousness. (See Kiel Decl. Ex. 2: Paper Nos. 5, 9, 16, 20, 29.) The examiner stated that primary references such as Boswell (Defendants' Summary Judgment Exhibit ("Defs.SJ.Ex.") C), Estevenel et al. (Defs. SJ Ex. D) and EP 294,933 (Defs. SJ Ex. E) use a coating material to prevent interaction between solid forms. (Kiel Decl. Ex. 2: Paper No. 16, at 3-4.) Plaintiffs also submitted to the examiner Roche's U.S. Patent No. 5,075,114 (the "'114 patent") which recited a method for masking the taste of famotidine granules with an impermeable coating material. (Defs.SJ.Ex. J.) According to the examiner, "granulated active ingredients coated with barrier materials are old and well known in the art." (Kiel Decl. Ex. 2: Paper No. 16, at 3.) The examiner determined that "the effect of combining histamine receptor antagonist compounds and antacids" is disclosed by the prior art. (Kiel Decl. Ex. 2: Paper No. 16, at 3-4.) Although none of the prior art disclosed famotidine degradation, published patent application WO 92/00102 by Davis et al. ("Davis") (Defs. SJ Ex. F) and Wolfe U.S. Patent No. 5,229,137 ("Wolfe") (Defs. SJ Ex. G) recited combinations of famotidine and antacids in a solid oral dosage. The examiner determined that the '340 patent application was obvious because, based on the prior art, one of ordinary skill would be motivated to use a barrier material to protect famotidine from the antacids.

Further, because the examiner believed that "the stability problem with guanidinothizole compounds when administered with antacids was well known in the art," she determined that "the very small, approximately 1% difference in degradation . . . between the uncoated and coated guanidinothizole compound is not seen to present unexpected results .. ." (Kiel Decl. Ex. 2: Paper No. 20, at 3.) The examiner concluded that "[t]he evidence [of the 1% difference] is additionally questionable since there is no statistical evaluation to determine the significance of the results." (Kiel Decl. Ex. 2: Paper No. 20, at 3.)

From the initial submission of the '340 application to September 1997, the examiner consistently rejected McNeil's arguments regarding the obviousness of the invention. (See Kiel Decl. Ex. 2: Paper Nos. 5, 9, 16, 20, 29.) On September 18, 1997, Roche submitted a declaration to the examiner setting forth the results of a test he had conducted. (Kiel Decl., Ex. 2: Paper Nos. 31-32.) By combining 10mg of uncoated famotidine granules with 200mg of aluminum hydroxide or magnesium hydroxide in a single layer tablet, Roche observed a 25-70% degradation in the famotidine. When impermeably coated famotidine granules were substituted for the uncoated granules, approximately 2% degradation occurred. (Kiel Decl., Ex. 2: Paper No. 32, Figs. 4-5; Defendants' Claim Interpretation Brief, dated Feb. 24, 2006, at 9.) Roche did not test the effect of impermeable coating in a two-layer coated granule embodiment.

The Patent Office deemed the Roche declaration "persuasive as to unexpected results in stability over the prior art for the dosage form tested therein, i.e., coated granule solid oral dosage form containing famotidine and aluminum or magnesium hydroxide." (Kiel Decl. Ex. 2: Paper No. 33, at 2.) Based on these results, the Patent Office allowed originally filed claims 9, 10 and 27.³ (Kiel Decl. Ex. 2: Paper No. 33, at 2-3.) The examiner...