Upjohn Co. v. Medtron Laboratories, Inc.

• Decision Date: 19 October 1990
• Docket Number: No. 87 Civ. 5773 (SWK).,87 Civ. 5773 (SWK).
• Citation: 751 F. Supp. 416
• Parties: The UPJOHN COMPANY, Plaintiff, v. MEDTRON LABORATORIES, INC., Anthony Imbriolo, and Dominick J. Carlisi, M.D., Defendants.
• Court: U.S. District Court — Southern District of New York

751 F. Supp. 416

The UPJOHN COMPANY, Plaintiff, v. MEDTRON LABORATORIES, INC., Anthony Imbriolo, and Dominick J. Carlisi, M.D., Defendants.

No. 87 Civ. 5773 (SWK).

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

October 19, 1990.

COPYRIGHT MATERIAL OMITTED

Kenyon & Kenyon by Thomas L. Creel, Richard L. DeLucia, Stuart D. Sender, Richard S. Gresalfi, and Andrea H. Scheidt, New York City, and Robert A. Armitage and Lawrence T. Welch, Kalamazoo, Mich., for plaintiff The Upjohn Co.

Cooper & Dunham by Lewis H. Eslinger and William E. Pelton, New York City, for defendants Medtron Laboratories, Inc., Anthony Imbriolo and Dominick J. Carlisi, M.D.

CORRECTED MEMORANDUM OPINION AND ORDER¹

KRAM, District Judge.

This is an action for infringement brought by plaintiff The Upjohn Company ("Upjohn"), claiming that defendants' topical minoxidil formulation, MINOXIDIL PLUS, infringes two Upjohn patents on the topical use of minoxidil to treat male pattern baldness. The patents at issue are U.S. Patent No. 4,139,619 ("'619 patent") and U.S. Patent No. 4,596,812 ("`812 patent").

Presently before the Court is Upjohn's motion for a preliminary injunction to enjoin defendants from engaging in activities that allegedly infringe the '619 and '812 patents. Although defendants concede infringement, they have raised several possible defenses to validity and enforcement. In a previous opinion, familiarity with which is presumed, this Court denied defendants' defense based on the equitable doctrine of laches and ordered a hearing on the obviousness and fraud defenses to the validity or enforceability of the patents. This Court held a hearing on June 18, 19, 21, 25 and 27, 1990. The parties have submitted post-hearing briefs, post-hearing reply briefs, proposed findings of fact and subsequent letter briefs. The following background of the development of minoxidil and the '619 and '812 patent prosecutions is important in light of defendants' allegations of patent invalidity and unenforceability.

BACKGROUND

The history of minoxidil research dates to the late 1950's, when Upjohn began to experiment with a compound used in the production of plastics, in pursuit of a medication for the treatment of ulcers. Although its effect as an ulcer treatment was not promising, this compound, n,n-diallyl melamine, was found to lower the blood pressure in dogs. Thus, Upjohn began to research the efficacy of using this or similar compounds as a potential antihypertensive medication. After screening and synthesizing over 200 compounds of similar chemical structure, Upjohn synthesized the compound "minoxidil" in 1963.

In 1967, Upjohn filed an Investigational New Drug ("IND") application with the Food and Drug Administration ("FDA") to study minoxidil as an anti-hypertensive agent in humans. Thereafter, an Upjohn consultant and clinical pharmacologist and cardiologist, Dr. Charles A. Chidsey, began research for Upjohn at the University of Colorado where he served as a professor. Consistent with industry custom, Chidsey signed an agreement whereby he was obligated to assign to Upjohn any inventions that he made while working as a clinician on minoxidil.

In early 1971, Chidsey discovered increased hair growth (known as "hypertrichosis") on patients who took oral doses of minoxidil. Dr. Chidsey consulted with an endocrinologist who advised him after testing that the observed hair growth was not the result of abnormal endocrine function. Following this consultation, Chidsey concluded that the systemic, orally administered minoxidil was the active agent causing the hair growth. Chidsey further noted that this conclusion was consistent with his observation of hypertrichosis in a patient he had earlier treated with minoxidil. Chidsey then reported this finding to Upjohn Doctors Zins and Freyburger.

At around this time, Chidsey consulted with a dermatologist, Dr. Kahn, and his medical resident, Dr. Grant, to better understand the characteristics of minoxidil's hair growing capability. According to Dr. Chidsey, he had reported his discovery that minoxidil caused hypertrichosis to Upjohn prior to his consultation with Drs. Kahn and Grant. In this initial consultation, Chidsey explained to Dr. Kahn how minoxidil affected various organs of the body. As a vasodilator, he explained, it increased blood flow to the various organs, including the skin. Their discussions also covered the functions of the body involved in hair growth.

In Spring 1971, an attorney in Upjohn's patent law department, James Killinger, began to draft the Chidsey patent application ("Chidsey application"), which was filed on December 29, 1971. In connection with the application, Chidsey signed an oath that he believed himself to be the original, first and only inventor of the topical use of minoxidil as a treatment for male pattern baldness. Apparently in light of the many ineffective treatments for baldness peddled throughout history, Upjohn had difficulty convincing the patent examiner of utility, i.e., that minoxidil had some therapeutic value. Four successive applications were denied before the patent examiner found that Upjohn's fifth application satisfied the requisite showing of utility. Accordingly, the '619 patent issued on February 13, 1979.

The dermatologists consulted by Chidsey, Drs. Kahn and Grant, also claimed to be the inventors of topical minoxidil. In May or June, 1971, Kahn asked for and received some minoxidil from Chidsey's assistant, Dr. Gottlieb. Kahn and Grant applied a topical minoxidil solution to their own forearms, as well as to two other individuals, and observed increased hair growth. This initial Kahn and Grant test on humans was not authorized by the FDA, as they had not applied for an IND. The parties to this litigation have agreed that Upjohn began working on the Chidsey patent application before Kahn and Grant did any work applying minoxidil topically. See Medtron's Request for Admission No. 177, admitted by Upjohn (quoted in Letter of Thomas L. Creel to the Court dated August 21, 1990).

Seeking some remunerative participation in the development of topical minoxidil, Kahn and Grant requested a meeting with Upjohn. Accordingly, they met with at least one Upjohn patent attorney and several scientists assigned to its hypertension project team, which was the Upjohn group assigned to work on minoxidil. At this meeting, Kahn and Grant generally discussed their work with topical minoxidil, disclosing that they had successfully grown hair on human beings through the topical application of minoxidil. According to Dr. Grant, they did not at that time disclose the details of their experiment. Kahn unequivocally stated that he wanted fortune, not fame, and that it would be reasonable for Kahn and Grant to receive between two and four percent of the sale of all products marketed by Upjohn that included topical minoxidil. Upjohn did not acquiesce to this request.

Kahn and Grant then hired an attorney, John E. Reilly, who again sought a two to four percent royalty participation in any future topical minoxidil products. In response, Upjohn advised

Upon reviewing the facts available to us it is the conclusion of the Patent Law Department that Doctor Chidsey is the first and sole inventor of the claimed subject matter of a patent application now pending before the Patent Office. Should Doctor Kahn believe himself to be the first and sole inventor in the use of U-10,858 minoxidil in promoting hair growth, we would wish priority to be determined by an interference proceeding within the Patent Office.

Thereafter, Kahn and Grant filed their patent application on May 17, 1974. This application disclosed knowledge of another drug, diazoxide, that caused hair growth resulting from systemic administration. In connection with this application, Kahn and Grant each signed an oath that they were the "original, first and joint inventors of the invention." Hearing Transcript ("Tr.") at 282. Just as the Chidsey application excluded Kahn and Grant, their application did not include Chidsey as a joint inventor.

Kahn and Grant also had difficulty convincing the patent examiner of utility and safety. Their first application was denied on these grounds pursuant to 35 U.S.C. § 101, as well as on others, and the examiner explained:

applicants alleged that their compositions and method are capable of "arresting and reversing male pattern baldness." These are incredible allegations of utility. Moreover, since the active ingredient herein claimed is a potent blood pressure lowering agent, the safety of the same is queried in persons who do not have elevated blood pressure.

Plaintiff's Proposed Findings of Fact at ¶ 95 (citing Plaintiff's Exhibit 6a, at 21-23; Tr. at 283). Kahn and Grant amended their application on December 18, 1975, responding to the patent examiner's grounds for rejections. The claims of this amendment were also rejected by the examiner in April 1976. Like Upjohn, Kahn and Grant persevered and filed successive applications that were again denied by the examiner. Kahn and Grant appealed the denial of their second application to the Board of Appeals, which affirmed and explained:

Appellants thus are not categorically precluded from obtaining a patent on the claimed invention, but in order to receive a patent grant thereon convincing factual evidence must be presented which refutes the commonly accepted fact that alopecia cannot be treated.... Appellants' evidence does not meet the criterion of clear and convincing evidence which is required to rebut the presumption of inoperativeness of the claimed invention.

Plaintiff's Proposed Facts at ¶ 104 (citing Plaintiff's Exhibit 6b at 68, 117-19; Tr. at 288.

Kahn and Grant's third application was filed as a continuation of the second application on August 28, 1980. As with its predecessor applications, it was denied for lack of demonstrated utility, as well as other grounds. On February 1, 1982, Kahn and Grant informed the PTO,...