Sciele Pharma Inc. v. Lupin Ltd.

• Decision Date: 02 July 2012
• Docket Number: No. 2012–1228.,2012–1228.
• Citation: 103 U.S.P.Q.2d 1250,684 F.3d 1253
• Parties: SCIELE PHARMA INC. (now known as Shionogi Pharma Inc.), Plaintiff–Appellee, and Andrx Corporation, Andrx Pharmaceuticals Inc. (doing Business as Watson Laboratories Inc.–Florida), Andrx Pharmaceuticals L.L.C., Andrx Laboratories (NJ) Inc., Andrx EU Ltd., and Andrx LABS L.L.C., Plaintiffs, v. LUPIN LTD. and Lupin Pharmaceuticals Inc., Defendants–Appellants, and Mylan Inc. and Mylan Pharmaceuticals Inc., Defendants.
• Court: U.S. Court of Appeals — Federal Circuit

684 F.3d 1253

103 U.S.P.Q.2d 1250

SCIELE PHARMA INC. (now known as Shionogi Pharma Inc.), Plaintiff–Appellee,andAndrx Corporation, Andrx Pharmaceuticals Inc. (doing Business as Watson Laboratories Inc.–Florida), Andrx Pharmaceuticals L.L.C., Andrx Laboratories (NJ) Inc., Andrx EU Ltd., and Andrx LABS L.L.C., Plaintiffs,

v. LUPIN LTD. and Lupin Pharmaceuticals Inc., Defendants–Appellants,andMylan Inc. and Mylan Pharmaceuticals Inc., Defendants.

No. 2012–1228.

United States Court of Appeals, Federal Circuit.

July 2, 2012.

David B. Bassett, Wilmer Cutler Pickering Hale and Dorr LLP, of New York, NY, argued plaintiff-appellee. With him on the brief were David A. Manspeizer and Christopher R. Noyes; and Mark C. Fleming, of Boston, MA.

Douglass C. Hochstetler, Kelley Drye & Warren LLP, of Chicago, IL, argued for defendants-appellants. With him on the brief was Beth D. Jacob, of New York, NY. Of counsel was Clifford Katz.

Before LOURIE, PROST, and MOORE, Circuit Judges.

MOORE, Circuit Judge.

Lupin Ltd. and Lupin Pharmaceuticals Inc. (collectively Lupin) submitted an Abbreviated New Drug Application (ANDA) to the Food and Drug Administration seeking approval to market a generic version of Fortamet, an extended-release tablet of metformin hydrochloride. Shionogi Pharma Inc.¹ (Shionogi), which markets Fortamet, sued Lupin for patent infringement under 35 U.S.C. § 271(e)(2)(A) asserting, among others, U.S. Patent No. 6,866,866 ('866 patent), which is listed in the Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) entry for Fortamet. Lupin attempted to launch its generic Fortamet “at risk,” i.e., without a final judgment on the merits in the litigation. Shionogi moved for a preliminary injunction to stop Lupin from selling its generic Fortamet and the district court granted Shionogi's request for injunctive relief. For the reasons discussed below, we vacate the preliminary injunction and remand for further proceedings consistent with this opinion.

Background

The '866 patent is entitled “Controlled Release Metformin Compositions” and describes and claims, inter alia, dosage forms with “a mean time to maximum plasma concentration (Tmax) of the drug which occurs at 5.5 to 7.5 hours after oral administration on a once-a-day basis to human patients.” '866 patent, at [57]; see also col.21 ll.48–59. Other claims narrow the Tmax range to, for example, between 5.5 and 7.0 hours after the administration of the dose of metformin. '866 patent col.21 ll.64–67. Shionogi asserted claims 1, 3, 4, 5, and 25 in this litigation. Claim 3 is the only asserted claim explicitly limited to a narrower Tmax range.

The claimed Tmax range reflects a quirk in the '866 patent's prosecution history. During prosecution, the examiner rejected a number of pending claims as obvious in light of WO 99/47125 (Cheng) in view of U.S. Patent No. 3,845,770. J.A. 2634. In a subsequent examiner interview, the applicant discussed the “importance of Tmax ... and the relationship to gluconeogenesis,” and the examiner indicated that the “closest prior art”—Cheng—“suggest[s] the general teaching of a Tmax of 8.” J.A. 2643. In response, the applicant cancelled a number of claims including claim 1, which had an upper Tmax range of 7.5 hours, and rewrote then-pending claim 5, which had an upper Tmax range of 7 hours, into independent form. J.A. 2668. The applicant indicated that the examiner agreed during the interview “that [pending] claim 5, which had an upper Tmax of 7.0 hours and which value is directly supported by the working examples, is patentably distinct over the Cheng, et al. reference.” J.A. 2675.

Despite cancelling the rejected claims including claim 1, the applicant received a notice of allowance for pending claims 1, 4, 5, 7–27, and 29. J.A. 2645. The applicant contacted the Patent Office and explained that the notice of allowance mistakenly allowed cancelled claims, including the previously cancelled claim 1. J.A. 2650. The applicant provided “a listing of the pending claims,” which once again indicated that claim 1 was cancelled. Id. The examiner issued a supplemental notice of allowance acknowledging the amendment after the interview, removing the cancelled claims, and allowing the amended claims. J.A. 2686. The supplemental notice of allowance thus accurately reflected the applicant's prior submission: the pending claims directed to a Tmax with an upper limit of 7.5 hours (including claim 1) were “[c]ancelled,” J.A. 2668, and claims 5, 7–27, 29, 30, and 43 (with an upper Tmax of 7 hours) were allowed, J.A. 2668–73.

After this, the '866 patent issued with a surprise; the issued patent contained the cancelled claims from the first notice of allowance—not the supplemental notice of allowance. Hence, the patent issued with claim 1's original upper Tmax limit of 7.5 hours, the exact Tmax limit that the examiner found problematic, and that the applicant sought to avoid by cancelling pending claim 1. J.A. 2675. After issuance, the patentee did not pursue further action, and claim 1 of the issued patent continues to recite the higher Tmax limit of 7.5 hours. Because claim 1 is the only independent claim in the patent, many of the dependent claims also include the limitation that the upper end of the Tmax range is 7.5 hours.

The '866 patent was eventually listed in the Orange Book entry for Fortamet. When Lupin filed its ANDA seeking permission to sell a generic version of Fortamet, the application included a Paragraph IV certification that the '866 patent was invalid, unenforceable, and/or would not be infringed by Lupin's ANDA products. Shionogi filed a suit for patent infringement within the requisite time period, thereby triggering the statutory 30–month stay of FDA approval of Lupin's ANDA. Although the patentee previously sought on several occasions to cancel what essentially issued as claim 1 in the '866 patent, Shionogi nevertheless asserted claim 1, along with claims 3–5 and 25, in the present litigation. Claim 3 is the only asserted claim limited to dosage forms with an upper Tmax of 7 hours. The other claims have an upper Tmax limit of 7.5 hours. The litigation progressed but remained unresolved when the 30–month stay expired. The expiration of the 30–month stay allowed the FDA to give final approval to Lupin's ANDA on June 29, 2011, and Lupin launched its ANDA product on September 30, 2011. Shionogi moved for a preliminary injunction and a recall of Lupin's generic products on October 12, 2011.

On December 6, 2011, the district court granted a preliminary injunction that prohibited Lupin from “further importation and sales of its generic version of ... Fortamet.” J.A. 1. After reviewing the standard for a preliminary injunction, the court held that Shionogi was likely to prevail on its infringement claim based primarily on Lupin's proposed labeling. J.A. 11. The court then rejected Lupin's argument that the claims of the '866 patent were improperly issued. J.A. 12. Although the court did not reach the merits of Lupin's obviousness arguments, it did note that in light of the presumption of validity and “the very steep requirement that the Defendant show clear and convincing evidence of the invalidity of Plaintiff's patent, the factual dispute concerning the prosecution of the '866 patent is not sufficient to persuade the Court to resolve the question of validity in Defendant's favor at this preliminary stage.” J.A. 12.

Lupin appealed. We vacated the preliminary injunction and remanded it to the district court because the “district court's order imposing the preliminary injunction failed to even address Lupin's obviousness arguments.” Sciele Pharma Inc. v. Lupin Ltd., No. 2012–1118, 2012 U.S.App. LEXIS 2442, at *2 (Fed.Cir. Feb. 6, 2012). In particular, we noted that the “district court did not make any findings of fact or any conclusions of law regarding Lupin's obviousness arguments.” Id. at *2–3. We further indicated that the “fact that prior art was before the PTO can not be the only reason to reject an obviousness defense,” and that “Lupin is entitled to have the district court make an independent assessment of its defense and apply the proper burden of proof.” Id. at *3. We remanded for the district court to make appropriate findings and conduct an appropriate obviousness analysis in the first instance. Id. at *4.

On remand the district court noted that although Lupin's obviousness “argument relies heavily on the Supreme Court's ruling in KSR,” there is “a fundamental factual difference between this case and KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007)—namely, that in this case the prior art allegedly rendering the '866 Patent obvious was considered by the Patent and Trademark Office ... when it approved the '866 Patent.”Sciele Pharma Inc. v. Lupin Ltd., No. 09–0037, 2012 U.S. Dist. LEXIS 22782, at *9–10 (D.Del. Feb. 14, 2012). The court also pointed out that during the prosecution of the '866 patent, “the PTO not only had the opportunity to consider the prior art taught by Cheng, but in fact did consider it.” Id. at *11. The other prior art reference relied upon by Lupin, Timmins (WO99/47128), was also “before the PTO when the '866 Patent was approved.” Id. at *12. The court found it important that Timmins teaches a median Tmax while the '866 patent claims a mean Tmax. Id. at *12–13.

The district court also drew three legal conclusions. First, the court concluded that it was required to defer to the PTO as a “qualified government agency,” notwithstanding the odd sequence of events that gave rise to the ' 866 patent. Id. at *17. The court explained that because the prior art references were previously before the PTO, Lupin faced an “ ‘added burden of overcoming the deference that is due to a qualified government agency presumed to have done its job.’ ” Id. at *16–17 (quoting PharmaStem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342, 1366 (Fed.Cir...