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Claim Term “and” Meant “or,” and Invention Was Not Obvious Because Infringer Was Relying on Hindsight to Show Obviousness

March 31, 2008

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Last Month at the Federal Circuit - April 2008

Judges: Michel, Rader (author), Linn

[Appealed from: D.N.J., Judge Chesler]

In Ortho-McNeil Pharmaceutical, Inc. v. Mylan Laboratories, Inc., No. 07-1223 (Fed. Cir. Mar. 31, 2008), the Federal Circuit held that the district court correctly construed the claim term “and” in U.S. Patent No. 4,513,006 (“the ’006 patent”) owned by Ortho-McNeil Pharmaceutical, Inc. (“Ortho-McNeil”); affirmed its dismissal of Mylan Laboratories, Inc. and Mylan Pharmaceuticals, Inc.’s (collectively “Mylan”) invalidity defenses based on obviousness, inequitable conduct, and nonenablement; and found that the district court had not erred in resetting the effective date of Mylan’s ANDA.

The ’006 patent claims the anticonvulsive drug topiramate, an epilepsy drug with annual sales exceeding $1 billion. Mylan filed an ANDA with the FDA with a paragraph IV certification, asserting that the ’006 patent was invalid and not infringed. As a result, Ortho-McNeil filed this lawsuit against Mylan. After a Markman hearing, the district court rejected Mylan’s position that claim 1 of the ’006 patent did not cover topiramate. In light of this construction, Mylan stipulated that its generic topiramate infringed claim 1 and other claims of the ’006 patent. On SJ, the district court also ruled against Mylan’s affirmative defenses of unenforceability due to inequitable conduct and invalidity based on obviousness and nonenablement. In addition, the district court reset the effective date of Mylan’s ANDA. Mylan appealed.

On appeal, Mylan argued that the district court erred in construing the word “and” to mean “or” in claim 1 of the ’006 patent and that under the proper construction, the claim did not cover topiramate. The Federal Circuit disagreed. The Court explained that as used in the claim, “and” conjoined mutually exclusive possibilities and that the claim did not use “and” in isolation but in a larger context that clarified its meaning. The Court noted that construing claim 1 to require a conjunctive meaning of “and” would render several dependent claims meaningless and that the specification also supported the district court’s reading of “and.” It added that dictionary definitions also supported the district court’s reading of the term. Accordingly, the Court held that the district court properly construed the claim.

The Court next considered Mylan’s inequitable conduct defense. Mylan accused Ortho-McNeil of committing inequitable conduct because it disclosed certain references (“Kochetkov”) to the PTO, but failed to disclose the results of nonpublic tests it conducted on Kochetkov compounds. Mylan argued that Ortho-McNeil’s statements about the Kochetkov references during prosecution were inconsistent with Ortho-McNeil’s own information about the compounds. The Federal Circuit disagreed. The Court reviewed the statements in the prosecution history and noted that Ortho-McNeil did not make any misrepresentations to the PTO. Accordingly, it held that the district court was correct in dismissing Mylan’s inequitable conduct defense.

Regarding the obviousness defense, Mylan, relying on KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727, 1742 (2007), argued that a person of ordinary skill in the art faced with finding a diabetes drug (as the inventor was) would necessarily design an FBPase inhibitor. Disagreeing with Mylan, the Federal Circuit noted that the record showed that even if an ordinarily skilled artisan sought an FBPase inhibitor, that person would not have chosen topiramate. The Court determined that this invention, contrary to Mylan’s characterization, did not present a finite (and small in the context of the art) number of options easily traversed to show obviousness. It observed that Mylan’s expert simply retraced the path of the inventor with hindsight, discounted the number and complexity of the alternatives, and concluded that the invention of topiramate was obvious. The Court explained that after KSR, a flexible teaching, suggestion, or motivation (“TSM”) test remains the primary guarantor against a nonstatutory hindsight analysis such as occurred in this case. It reasoned that “[t]he TSM test, flexibly applied, merely assures that the obviousness test proceeds on the basis of evidence – teachings, suggestions (a tellingly broad term), or motivations (an equally broad term) – that arise before the time of invention as the statute requires.” Slip op. at 11. The Court reiterated that those teachings, suggestions, or motivation need not always be written references, but may be found within the knowledge and creativity of ordinary skilled artisans. The Court determined that here, the record amply supported the district court’s finding of nonobviousness, which included consideration of objective criteria showing nonobviousness. Accordingly, the Court affirmed the district court’s dismissal of Mylan’s obviousness defense.

The Court also rejected Mylan’s argument that claims 6-8 were not enabled because the drug’s effective amount was unclear and its determination would require undue experimentation. In so doing, the Court noted that the disclosure adequately enabled the claims and that even if clinical trials informed the effective amount, the record did not show that extensive or undue tests would be required to practice the invention. It thus concluded that the district court was correct in summarily dismissing Mylan’s nonenablement defense.

Finally, the Federal Circuit turned to and affirmed the district court’s decision to reset the effective date of Mylan’s ANDA. The Court explained that when a generic manufacturer files an ANDA with a paragraph IV certification, the Hatch-Waxman Act grants the brand name pharmaceutical manufacturer a thirty-month stay of the approval of that ANDA within which to litigate the case. At the expiration of the thirty months, the ANDA is automatically approved unless the court grants a preliminary injunction or finds infringement. Because neither of those two events occurred before expiration of thirty months, the FDA approved Mylan’s ANDA by operation of law. Therefore, after determining infringement, the district court reset the effective date of approval pursuant to 35 U.S.C. § 271(e)(4)(A), which provides that “[f]or an act of infringement . . . , the court shall order the effective date of any approval of the drug . . . involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed.” The Federal Circuit explained that although the statute does not expressly reset the effective date when the thirty-month stay expires before the patent is found to be infringed or a preliminary injunction granted, the statute, as informed by its legislative history, supported the district court’s action of resetting the effective date. The Court noted further that 21 U.S.C. § 355(j)(5)(B)(iii), which lays out two measures for delaying an ANDA’s approval, did not limit a court’s authority to reset the approval date. Accordingly, the Federal Circuit concluded that the district court was correct in resetting the effective date of Mylan’s ANDA.