Santarus, Inc. v. Par Pharm., Inc., 2010-1360

• Decision Date: 04 September 2012
• Docket Number: 2010-1360,2010-1380
• Parties: SANTARUS, INC., Plaintiff-Appellant, AND THE CURATORS OF THE UNIVERSITY OF MISSOURI, Plaintiff-Appellant, v. PAR PHARMACEUTICAL, INC., Defendant-Cross Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

SANTARUS, INC., Plaintiff-Appellant,

AND THE CURATORS OF THE UNIVERSITY OF MISSOURI, Plaintiff-Appellant,

v.PAR PHARMACEUTICAL, INC., Defendant-Cross Appellant.

2010-1360

2010-1380

United States Court of Appeals for the Federal Circuit

Decided: September 4, 2012

Appeals from the United States District Court for the District of Delaware in consolidated Case Nos. 07-CV-0551 and 07-CV-0827, Chief Judge Gregory M. Sleet.

MORGAN CHU, Irell & Manella LLP, of Los Angeles, California, argued for both plaintiffs-appellants. With him on the brief for The Curators of the University of Missouri were JAMISON E. LYNCH, Mayer Brown LLP, of Chicago, Illinois. Of counsel for Santarus, Inc. were GARY N. FRISCHLING andJOSEPH M. LIPNER, Irell & Manella LLP, of Los Angeles, California; and ANDREA C. HUTCHINSON, Mayer Brown LLP, of Chicago, Illinois, for The Curators of the University of Missouri.

Janine A. Carlan, Arent Fox, LLP, of Washington, DC, argued for defendant-cross-appellant. On the brief was Richard J. Berman. Of counsel were Timothy W. Bucknell, Aziz Burgy, Janine A. Carlan, Joshua T. Morris, Amy E.L. Schoenhard, and Anthony W. Shaw.

Before RADER, Chief Judge, NEWMAN, AND MOORE, Circuit Judges.

Opinion for the court filed PER CURIAM. Opinion concurring

in part and dissenting in part filed by Circuit Judge

NEWMAN.

PER CURIAM.

Appeal and cross-appeal are taken from the judgment of the United States District Court for the District of Delaware.¹ Plaintiff Santarus, Inc. is the exclusive licensee of patents on specified formulations of benzimidazole proton pump inhibitors (PPI) - a class of chemical compounds that inhibit gastric acid secretion and help prevent and treat stomach acid-related diseases and disorders. The patents are for the inventions of Dr. Jeffrey Phillips, and are assigned to the University of Missouri. Santarus provides the PPI product omeprazole in the formulations covered by the Phillips patents, with the brand name Zegerid®.

Defendant Par Pharmaceutical, Inc. filed an Abbreviated New Drug Application (ANDA) for FDA approval to sell a generic counterpart of the Santarus Zegerid® products, invoking the Hatch-Waxman Act (the Drug Price Competition and Patent Term Restoration Act of 1984), which established a procedure called a "Paragraph IV certification," 21 U.S.C. § 355(j)(2)(A)(vii)(IV), whereby an entity that seeks to market a generic counterpart of a patented drug product or method of use, before the patent has expired, may challenge the patent before actually marketing the drug. Thus the parties are here litigating the issues of infringement, validity, and enforceability of the Phillips patents.

The district court found that Par's ANDA products infringe the Phillips patents, but held all of the asserted claims invalid on the ground of obviousness, 35 U.S.C § 103. The court also held certain claims invalid on the ground of inadequate written description, 35 U.S.C. § 112. On the defense of unenforceability, the district court held that there was not inequitable conduct by Dr. Phillips, the University of Missouri, or their counsel in procuring the patents. Each side appeals the rulings adverse to it, except that Par does not appeal the finding of infringement. We conclude that the district court erred by holding that some of the thirty-six asserted claims would have been obvious over the prior art; these rulings are reversed. The court's other rulings are affirmed.

I. THE PHILLIPS PATENTS

Proton pump inhibitors affect the action of an enzyme within the stomach's parietal cells, the cells within the membrane of the stomach that secrete hydrochloric acid. It was known that chemicals of the class of benzimidazoles have the property of inhibiting or inactivating this proton pump enzyme. The benzimidazoles operate by a mechanismwhereby the benzimidazole PPI, upon ingestion or intravenous infusion, circulates in the bloodstream, from which it reaches and accumulates in the parietal cells and affects the proton pump enzyme. Hydrochloric acid secretion does not recover until the body produces a new quantity of the proton-producing enzyme. Several benzimidazoles have been approved by the FDA for PPI use, including products having the common names omeprazole (brand name Prilosec®), esomeprazole (Nexium®), lansoprazole (Prevacid®), rabeprazole (Aciphex®), and pantoprazole (Protonix®).

Although these PPIs are effective at blocking stomach acid production, they are extremely acid-sensitive. It was known that unprotected PPIs in the stomach's acidic environment do not survive long enough to be absorbed into the bloodstream, and thus do not reach the parietal cells. To avoid this destruction, PPI products for oral ingestion were provided with an acid-resistant enteric coating, whereby the coated PPI passes safely through the stomach to the intestine, where the coating dissolves and the PPI is absorbed.

Before Dr. Phillips's invention, all PPI products that were FDA-approved for oral administration had an enteric coating. In contrast, the Phillips products do not have an enteric coating. The products can be administered as liquid suspensions of the solid uncoated PPI together with a buffering agent, whereby the PPI is absorbed directly from the stomach into the bloodstream. This formulation has the advantages of rapid and consistent bioavailability and increased effectiveness, as well as ease of administration to patients unwilling or unable to swallow capsules or tablets. The Phillips patents explain:

in their current form (capsules containing enteric-coated granules or enteric-coated tablets), proton pump inhibitors can be difficult or impossible toadminister to patients who are either unwilling or unable to swallow tablets or capsules, such as critically ill patients, children, the elderly, and patients suffering from dysphagia.

U.S. Patent No. 7,399,772, col.7 l.65 - col.8 l.4. The Phillips products "can alternatively be formulated as a powder, tablet, suspension tablet, chewable tablet, capsule, effervescent powder, effervescent tablet, pellets and granules." Id. col.11 ll.50-53. The Phillips patents claim specific combinations of the uncoated benzimidazole PPI and buffering agents.

Par Pharmaceutical filed ANDA documents with the FDA, requesting permission to market the same formulations as the Zegerid® PPI, and describing the Par products as bioequivalent to the Zegerid® products marketed by Santarus. Par asserted unenforceability of all of the claims of the Phillips patents, and invalidity of the claims for which Santarus charged Par with infringement: U.S. Patent No. 6,489,346 (the '346 patent) claims 26, 37, 38, 49, 50, 58, 59, 60, 66, 68, 80, 81, 82; U.S. Patent No. 7,399,772 (the '772 patent) claims 1, 4, 5, 8, 10, 12, 14, 15, 20, 21; U.S. Patent No. 6,780,882 (the '882 patent) claims 11, 12, 15, 27; U.S. Patent No. 6,699,885 (the '885 patent) claims 2, 9, 11, 15, 16, 17, 18, 41; and U.S. Patent No. 6,645,988 (the '988 patent) claim 29.

Each of the Phillips patents is a continuation or continuation-in-part in a chain that originated with Patent No. 5,840,737 (the '737 patent) based on a provisional application filed on January 4, 1996. The '737 patent describes the combination of the PPI and sodium bicarbonate, and states the broadest claim as follows:

1. A method for treating gastric acid disorders by administering to a patient a single dose of a pharmaceutical composition of omeprazole or lansoprazole in a pharmaceutically acceptable carrier consisting essentially of a bicarbonate salt of a Group IA metal wherein said administering step consists of providing to the patient orally a single dose of an aqueous solution or, suspension of the pharmaceutical composition without requiring further administration of the bicarbonate salt of the Group IA metal.

'737 patent claim 1.

The '346 patent is a continuation-in-part of the '737 patent, with an intervening abandoned application. Similar to the '737 patent, the '346 patent generally claims a method for treating an acid-caused gastrointestinal disorder comprising administering a solid pharmaceutical composition in a dosage form that is not enteric coated. See, e.g., '346 patent claim 24. The dosage consists of PPI and a buffering agent, and the claims specify certain ranges of PPI and buffer.

The '988 patent is a continuation-in-part of its predecessors. It includes a new Figure 5 showing the pH of gastroesophageal reflux disease and discusses the scientific mechanism of operation of the PPI. Only claim 29 is asserted. It recites a non-enteric coated solid oral pharmaceutical dosage form comprising approximately 5-300 mg of PPI and a buffer in an amount of 0.1-2.5 mEq per mg of PPI. '988 patent claim 29. The dosage form also includes a pharmaceutically-acceptable excipient, indicating that it is a conventional dosage form such as a tablet, capsule, or granule. Id.

The other patents include additional limitations. For example, the '885 patent claims recite the serum concentration or blood level of PPI that is obtained within 30 minutes after administration. See, e.g., '885 patent claim 2. The '882 patent claims a stable powder for suspension, having a specified ratio of buffering agent to PPI, and a thickening agent. The composition recited in the '772 patent contains no sucralfate. '772 patent claim 1.

Par argues that every asserted claim would have been obvious over any one of several pieces of prior art. Par also argues that Dr. Phillips's own '737 patent renders obvious those claims to which it is prior art. Finally, Par argues that all of the patents are unenforceable for inequitable conduct in the Patent and Trademark Office. We start with the issue of inequitable conduct, for this defense is asserted against all claims of all of the patents in suit.

II. INEQUITABLE CONDUCT

Par argues that all of the Phillips patents are unenforceable due to inequitable conduct by Dr. Phillips, the University of Missouri, and their attorneys, on the ground that they were tardy in...