Federal Circuit Affirms Preliminary Injunction Barring Defendant from Launching FDA-Approved Generic Drug
November 01, 2010
Last Month at the Federal Circuit - December 2010
Judges: Rader, Bryson (concurring-in-part, dissenting-in-part), Linn (author)
[Appealed from: D.N.J., Judge Bumb]
In AstraZeneca LP v. Apotex, Inc., Nos. 09-1381, -1424 (Fed. Cir. Nov. 1, 2010), the Federal Circuit upheld the district court’s finding of no anticipation of AstraZeneca LP and AstraZeneca AB’s (collectively “AstraZeneca”) method claims and affirmed the district court’s grant of a preliminary injunction against Apotex, Inc. and Apotex Corp. (collectively “Apotex”). The Court also affirmed the district court’s invalidity finding of AstraZeneca’s “kit” claims.
AstraZeneca markets its FDA-approved budesonide inhalation suspension under the name PULMICORT RESPULES®. The Orange Book entry for this budesonide product includes U.S. Patent Nos. 6,598,603 (“the ’603 patent”) and 6,899,099 (“the ’099 patent”). Both patents have nearly identical specifications. Both patents include method claims directed to administering a budesonide composition once daily and product claims directed to a kit containing either a budesonide composition or suspension and a label indicating once-daily administration by nebulization. The label repeatedly warns patients to “titrate down” to the lowest effective dose of the medication. The FDA requires all manufacturers of inhaled corticosteroids, such as budesonide, to include this downward titration language in their labels.
Apotex submitted an ANDA seeking FDA approval to manufacture and sell a generic version of budesonide for twice-daily use, which is not claimed by either patent-in-suit. Other than minor differences, Apotex proposed an ANDA label for its generic drug identical to AstraZeneca’s label. Apotex also submitted a section viii statement asserting that it was not seeking approval for the once-daily method claimed by the patents-in-suit.
The day after the FDA approved Apotex’s ANDA, AstraZeneca initiated a DJ action and moved for a preliminary injunction barring Apotex from distributing its generic budesonide drug. AstraZeneca argued that Apotex would induce infringement of the specified method claims in the ’603 patent. Additionally, AstraZeneca argued that Apotex would infringe certain kit claims in both patents. The district court issued a preliminary injunction finding that Apotex had the requisite specific intent to induce infringement and that AstraZeneca would suffer irreparable harm without the injunction. But the district court found it likely that Apotex would succeed in proving invalidity of the kit claims.
On appeal, the Federal Circuit concluded that the asserted method claims would likely withstand a validity challenge posed by U.S. Patent No. 5,192,528 (“the ’528 patent”). The ’528 patent discloses a method for treating lung conditions by administering a suspension of budesonide “entrapped” within a liposome. Slip op. at 13. Apotex argued that the ’528 patent anticipated the asserted method claims. Considering intrinsic evidence from the specification and uncontested expert testimony in the record, the Court evaluated whether the term “budesonide composition” excluded the liposome embodiment in the ’528 patent. The Court stated that “[w]hen a patentee uses a claim term throughout the entire patent specification in a manner consistent with only a single meaning, he has defined that term by implication.” Id. at 16 (quoting Bell Atl. Network Servs., Inc. v. Covad Commc’ns Group, Inc., 262 F.3d 1258, 1271 (Fed. Cir. 2001)) (internal quotations omitted). The Court noted the consistent use of the term “budesonide composition” throughout the specification to mean “budesonide dispersed in a solvent in the form of a solution or suspension.” Id. Apotex argued that the district court’s construction improperly excluded the specification’s reference to liposome formulations in two places. The Court disagreed, explaining that “[n]either of the liposome formulations discussed in the specification use liposomes in the manner described in the ’528 patent.” Id. at 17. Moreover, the Court found it proper to rely on uncontested expert testimony to understand how the claimed invention works and to construe the disputed term in a manner consistent with that understanding, which excluded the liposome-entrapped embodiments disclosed in the ’528 patent. Considered together, the Court found the intrinsic evidence and expert testimony supported the conclusion that a person skilled in the art would have understood the term “budesonide composition” to exclude the embodiment disclosed in the ’528 patent. Thus, the Court held that the district court correctly found that the asserted claims would likely withstand the validity challenge posed by the ’528 patent.
Similarly, the Court found that the asserted method claims would likely withstand a validity challenge presented by an advertisement for AstraZeneca’s budesonide drug in the British medical journal, Thorax (“the Thorax advertisement”). The Thorax advertisement was published before the filing of the application that issued as the ’603 patent. The advertisement included a statement for twice-daily dosing where “the maintenance dose should be the lowest dose which keeps the patient symptom-free.” Id. at 21. The Court noted that “although a reference must be enabling to be anticipatory, unlike enablement under § 112, a reference need not . . . demonstrate utility or efficacy to be enabling in the context of § 102.” Id. at 23. The Court explained that Apotex ignored a key difference between the advertisement and the proposed label when contending the advertisement was anticipatory: the advertisement, unlike the proposed label, explicitly stated how often a maintenance dose should be given (twice daily). Additionally, the Court considered uncontested expert testimony stating that one skilled in the art would have understood the advertisement to teach about once-daily dosing but rather instructed twice-daily dosing. The Court held that the district court did not clearly err in concluding that Apotex would not be able to demonstrate by clear and convincing evidence that the Thorax advertisement anticipated the asserted method claims.
The Court also affirmed the district court’s finding that AstraZeneca would likely prove induced infringement at trial. In reaching its decision, the Court considered Apotex’s proposed label, its compliance with the FDA’s labeling requirements, and its decision to move forward with its product launch despite knowing its label presented infringement problems. The Court dismissed Apotex’s argument that some users may ignore the warning in the proposed label, maintaining that the language would lead some consumers to practice the claimed method. The Court noted that active steps taken to encourage direct infringement (e.g., instructing how to engage in an infringing use) show affirmative intent for infringing use of the product. The Court then classified Apotex’s compliance with FDA label requirements as immaterial, stating, “the FDA is not the arbiter of patent infringement issues.” Id. at 35. Further, the Court emphasized that if Apotex could not create a noninfringing label, Apotex had other avenues to pursue. The Court’s suggested alternatives to Apotex included waiting for the patents to expire before distributing its generic drug, filing a Paragraph IV certification challenging infringement and the validity of the asserted claims, formally appealing the FDA’s labeling requirements, or filing either a suitability petition or a paper NDA seeking approval for a noninfringing strength of the drug.
The Court found no reason to disturb the district court’s determination that AstraZeneca would suffer irreparable harm. Specifically, the Court assessed the potential economic harm relating to a confidential settlement agreement between AstraZeneca and Teva. Under the agreement, AstraZeneca would have market exclusivity until a certain time, after which AstraZeneca and Teva would share the market. Lacking reliable data regarding a market with only AstraZeneca and Teva’s products, the Court found no error in classifying the economic damages as incalculable if Apotex began selling its generic drug. AstraZeneca’s president also testified that the launch of Apotex’s generic drug would result in manufacturing layoffs and U.S. workforce reduction. The Court found this undisputed testimony sufficient to support a finding of significant and unquantifiable noneconomic loss. While the Court did not find a strong showing for damages to AstraZeneca’s reputation and goodwill, it could not identify any clear error with this finding.
The Court held that the district court correctly determined that the recitation in the claims of a label instructing not more than once-daily dosing is of no patentable consequence. Under § 101, the Court has generally found printed matter to fall outside its scope. But, the Court noted, an exception applies when a functional relationship exists between the printed matter and its substrate that serves to distinguish the invention from the prior art. In In re Ngai, 367 F.3d 1336 (Fed. Cir. 2004), the Court affirmed the rejection of a claim reciting a kit comprising instructions to amplify ribonucleic acids. The Court reasoned that the printed matter and the kit did not depend on each other since the printed matter simply taught a new use for an existing product. Seeking guidance from Ngai, the Court found that the claimed instructions did not function with the drug to create a new, unobvious product such that they are entitled to patentable weight. Thus, the Court affirmed the district court’s invalidity determination for the kit claims.
In a separate opinion, Judge Bryson concurred with the majority’s opinion on the invalidity of the kit claims. Judge Bryson, however, would have reversed the district court’s grant of a preliminary injunction. Specifically, he believed that the district court’s unduly narrow claim construction of the term “budesonide composition” led it to incorrectly conclude that the ’528 patent did not anticipate the ’603 patent claims. Additionally, Judge Bryson stated that the district court’s rationale for distinguishing between the Apotex label and the Thorax advertisement was flawed. He suggested that even though the scientific community had yet to confirm the effectiveness of once-daily dosing at the time the advertisement circulated, the language could still suggest decreasing the frequency of the administration to achieve a reduced dose.
Summary authored by Danielle A. Duszczyszyn, Ph.D., Esq.