Intent to Deceive Was Sufficient to Establish Inequitable Conduct
May 14, 2008
Last Month at the Federal Circuit - June 2008
Judges: Rader (dissenting), Prost (author), Moore
[Appealed from: C.D. Cal., Judge Pfaelzer]
In Aventis Pharma S.A. v. Amphastar Pharmaceuticals, Inc., No. 07-1280 (Fed. Cir. May 14, 2008), the Federal Circuit affirmed the district court’s finding of inequitable conduct before the PTO and unenforceability of U.S. Patent Nos. 5,389,618 (“the ’618 patent”) and RE 38,743 (“the ’743 patent”).
Aventis Pharma S.A. (“Aventis”) is the owner of both patents at issue; the ’618 patent was surrendered upon the issuance of the ’743 patent. The patents are directed to a composition comprising low molecular weight heparins (“LMWHs”). According to the ’618 patent specification, there are several advantages of the claimed LMWHs as compared to heparin, including that they exhibit a longer half-life.
During prosecution of the ’618 patent, the examiner rejected the claims under 35 U.S.C. §§ 102(b) and 103 over several references, including European Patent 40,144 (“EP ’144”). The rejection was based on the prior art teachings of sulfated heparinic admixtures within the molecular weight (“MW”) range of the claims that were considered by the examiner “We cannot agree that the district court clearly erred in its determination that the half-life comparisons were, at least in part, intended to show compositional differences.” Slip op. at 18. to be inherently the same as the claimed admixtures. The examiner stated that because the prior art teaches a product that is “identical or nearly identical” to the claimed invention, it is “incumbent upon the Applicant to convincingly demonstrate that the claimed product provides some unexpected or unobvious property not demonstrated by the prior art products.” Slip op. at 3.
In response, Aventis, through its outside counsel, independently addressed the §§ 102 and 103 rejections. With respect to § 102, Aventis argued that EP ’144 did not expressly state that the mixture contains two types of polysaccharides with the claimed MWs or MW ratio. Additionally, Aventis pointed to Example 6 of the ’618 patent, which was prepared with the help of Dr. Uzan, a noninventor, in which the claimed invention was compared to EP ’144. Based on the Example, Aventis argued that the claimed LMWHs exhibited a significantly longer half-life than formulations prepared in accordance with EP ’144, and that evidence of a difference in a property (i.e., half-life) serves as evidence of a difference in structure. With respect to § 103, Aventis argued that EP ’144 did not suggest, to a person of ordinary skill in the art, the specific modifications to the EP ’ 144 product required to attain the particular combination of claimed structural elements. The examiner maintained the §§ 102 and 103 rejections.
Aventis subsequently amended its claim and submitted a declaration from Dr. Uzan (“first Uzan declaration”) in which he (1) noted that the half-life of the claimed formulation was greater than 4½ hours 45% of the time, as compared to EP ’144, which achieved such a half-life only 17% of the time; (2) remarked “[t]his represents an increase in 250% in the half life and is very significant because it enables the same effect to be achieved with lower dosages” (id. at 6); and (3) analyzed the MW of the oligosaccharide chains of the EP ’144 formulations, concluding that they were clearly outside of the scope of the claimed invention. With respect to § 102, Aventis argued that the EP ’144 compounds were not inherently the same as the claimed compounds because of the difference in half-life and because compounds prepared in accordance with EP ’144 fall outside of the scope of the claims. With respect to § 103, Aventis argued that the prior art did not exhibit the unexpected properties of the claimed combination of MW chains.
In a third office action, the examiner affirmatively withdrew several rejections, but maintained the § 103 rejection based on EP ’144. The examiner continued to require that Applicant demonstrate some “unexpected or unobvious property,” but now referred to the prior art as teaching a product “which is nearly identical to that claimed.” Id. at 7 n.4. Finding a lack of evidence on unexpected results and statistically significant differences in half-lives, the examiner maintained the rejection.
In response, Aventis submitted another declaration from Dr. Uzan (“second Uzan declaration”), which included five tables comprising the raw data from the half-life comparisons and results showing a statistically significant difference in half-life. The table indicated that the dosage of the claimed compound was 40 mg, but did not indicate the dosage of the EP ’144 compound. Aventis asserted that the second Uzan declaration demonstrated statistically significant differences in half-life and, therefore, that the claimed compounds and prior art were unexpectedly different in properties. The application was subsequently allowed.
Amphastar Pharmaceuticals, Inc. (“Amphastar”) and Teva Pharmaceuticals USA, Inc. (“Teva”) each filed an ANDA to obtain approval to market a generic version of Lovenox®, the ANDAs containing a paragraph IV certification challenging the listed patents. Aventis sued both Amphastar and Teva in the district court. Amphastar filed a motion for SJ on its affirmative defense and counterclaim that the ’618 patent was unenforceable due to inequitable conduct because Dr. Uzan failed to disclose that the half-life comparisons were made using different doses. The district court found Aventis’s representation regarding improved half-life to be material to patentability because Aventis referred to it at least four times during prosecution and the examiner ultimately allowed the application after Aventis’s representation regarding the statistical significance of the data. The districtcourt found a strong inference of intent to deceive because of its conclusion that there was no credible explanation for using different doses and because a comparison at the same dose showed little difference in half-life. After weighing the evidence of materiality and intent, the district court granted SJ against Aventis and held the ’618 patent unenforceable.
One day prior to issuance of the district court’s order, Aventis surrendered the ’618 patent to the PTO pursuant to reissue proceedings in the ’743 patent application. The district court subsequently granted Aventis’s motion to substitute the ’743 patent for the ’618 patent and amended its earlier holding to apply to the ’743 patent, based on the well-settled principle that a reissue proceeding cannot rehabilitate a patent held to be unenforceable due to inequitable conduct.
On appeal for the first time, the Federal Circuit held that there was no genuine issue of material fact that Dr. Uzan failed to disclose that the comparison was made using different doses and that such failure prevented the examiner from considering information important to patentability and constituted a failure to disclose material information. The Federal Circuit, however, found that the district court erred in finding intent to deceive on SJ, because the different-dose comparison may have been reasonable and the failure to disclose may have been due purely to inadvertence. The Court thus remanded on that issue.
Following remand, the district court held a bench trial on the issue of intent and ultimately rejected each rationale for the nondisclosure. Based on the totality of the facts and circumstances, the district court concluded that but for Dr. Uzan’s intentional omissions, the probability was high that the ’618 patent would not have issued, even though the PTO issued the ’743 reissue patent without any reliance on the half-life comparison. Thus, the district court held the ’743 patent unenforceable.
On appeal for a second time, Aventis alleged that the district court clearly erred by (1) finding that the central question relating to patentability was compositional differences (i.e., anticipation, rather than obviousness) and by concluding that the issue of obviousness “necessarily folds into, and is subsumed, by inherency” (id. at 17); and (2) that the purpose of Dr. Uzan’s comparisons was to show differences in composition rather than properties.
Addressing Aventis’s first point, the majority of the Federal Circuit panel noted that Aventis appeared to ask the Court to revisit its materiality findings, but because materiality and intent to deceive are necessarily intertwined, the panel majority addressed the merits of the argument with respect to deceptive intent. Although the district court erroneously suggested that obviousness is subsumed by inherency, the panel majority concluded that the inherency statement was merely a recognition that the properties of a compound are inherent in its composition and, therefore, a difference in property could demonstrate a difference in composition. Thus, the panel majority did not find clear error in the district court’s ultimate conclusion.
Second, the panel majority addressed Aventis’s argument that the MW analysis in the first Uzan declaration was directed to anticipation, whereas the half-life comparisons were directed to obviousness. The panel majority found no clear error in the district court’s determination that the half-life comparisons were, “at least in part, intended to show compositional differences” (id. at 18) and, thus, were directed to both rejections: (1) nothing in Example 6 of the specification indicated that it was designed to 13 Last Month at the Federal Circuit show only nonobviousness and not lack of identity, and (2) the first Uzan declaration did not clearly delineate between evidence intended to address § 102 and evidence intended to address § 103. Thus, because the panel majority concluded that the comparisons were intended to address both rejections, to the extent they were directed to anticipation, the failure to disclose the dosage information evidenced intent to deceive.
Additionally, even though the panel majority conceded that the district court may have erred in concluding that the anticipation rejection was still pending in the third office action, as Aventis asserted, the panel majority did not agree that such error was critical to the court’s ultimate finding of intent to deceive because the panel majority held that the evidence submitted prior to the third office action, namely, Example 6 and the first Uzan declaration, evidenced intent to deceive.
The panel majority then addressed a further argument it attributed to Aventis: that the district court erred by excluding evidence that comparisons of half-lives at different doses were the standard practice in the LMWH field; specifically, that those in the field used the “clinically relevant dose” for comparisons, and that is why Dr. Uzan selected the 40 mg dose for the patented compound and the 60 mg dose for the EP ’144 compound. The panel majority found no abuse of discretion in the district court’s exclusion of the evidence.
First, evidence of industry practice in that regard would only be relevant if the half-life comparisons were only directed to obviousness (which the panel majority found they were not), because Aventis conceded that half-life comparisons must be at the same dose to show compositional differences.
Second, the district court did not accept that Dr. Uzan selected the clinically relevant dose for the comparisons. While the 40 mg dose was clinically relevant for prevention of deep venous thrombosis during high-risk orthopedic surgery, neither the claims nor the specification were limited to such use and there was no dispute that the claimed invention could be used at different doses for different indications.
Additionally, there was significantly less of a difference in half-lives when any other dose (20 mg, 60 mg, or 80 mg) of the patented compound was compared to the 60 mg dose of EP ’144, and, according to the panel majority, there was no evidence corroborating Dr. Uzan’s testimony that he selected the 40 mg dose for its efficacy in preventing DVT. Thus, the panel majority concluded that evidence of industry practice would not have impacted the district court’s credibility determination with respect to whether Dr. Uzan intended to use the clinically relevant doses and, therefore, the court did not abuse its discretion in excluding that evidence.
The panel majority then addressed several additional arguments by Aventis focused on whether Dr. Uzan actually had deceptive intent. First, the panel majority rejected an argument that Dr. Uzan believed he informed the examiner that he was comparing half-lives at different doses in the following statement in his first declaration: “[T]his represents an increase in 250% in the half life and is very significant because it enables the same effect to be achieved with lower dosages.” Id. at 24 (alteration in original). The panel majority reiterated that during the first appeal, the Court had concluded that there was no genuine issue of material fact that Dr. Uzan’s statement had not disclosed that the comparison was made between different doses, but it had left open the possibility that Dr. Uzan intended his statement to disclose that fact. The panel majority asserted that on remand, the district court heard Dr. Uzan’s testimony and determined that it did not outweigh the cumulative evidence evincing an intent to deceive. Thus, the panel majority ruled that the district court did not commit clear error.
Second, the panel majority rejected Aventis’s assertion that Dr. Uzan disclosed the dosage information for the patented compound to the examiner in Example 6, and in the second Uzan declaration by including the raw half-life data. Even if the data at other doses were disclosed, the panel majority noted, the disclosure was made in a very misleading way, and the district court did not clearly err in finding that the prior art dosage was not disclosed.
Finally, the panel majority rejected Aventis’s contention that the failure to disclose the dosage information was due purely to inadvertence. The panel majority noted that even if other errors during prosecution were made, there is sufficient evidence of concealment to warrant a determination that the dose information was intentionally withheld. Thus, the district court did not clearly err by concluding that the failure to disclose was not due to mere inadvertence.
In dissent, Judge Rader stated that he did not view the record as showing clear and convincing evidence of intent to deceive the PTO, and that the Federal Circuit’s case law restricts a finding of inequitable conduct only to the most extreme cases of fraud and deception. Judge Rader reiterated the view that pleading inequitable conduct as a litigation strategy had become a “plague” and noted that the Federal Court’s Kingsdown decision was intended to reduce abuse of inequitable conduct. After discussing the facts of Kingsdown, in which the evidence reflected a material mistake, but not intent to deceive, Judge Rader noted that, more recently, the judicial process has emphasized materiality to the near exclusion of the required level of intent, which has revived the litigation tactic of pleading inequitable conduct.
Specifically, Judge Rader noted that one of the study charts used by Dr. Uzan showing the clinical studies comparing the half-lives of the claimed LMWH invention compared to the prior art LMWHs did not show the dosage information for the prior art LMWHs. Judge Rader accepted that Dr. Uzan should have disclosed the dosage information in Example 6, but did not. However, Judge Rader also pointed out that Dr. Uzan did not attempt to conceal data that were otherwise present; rather, he submitted the study chart in unaltered form without adding to the disclosure. Thus, even if negligent, Judge Rader did not believe this omission to reach Kingsdown’s level of culpable intent to deceive. Additionally, Judge Rader thought that Dr. Uzan’s explanation for why he did not submit the different dose information in the first Uzan declaration “has merit,” because it was appropriate to compare drug properties at their clinically relevant dosages. Again, even if negligent, such conduct did not rise to the level of intent to deceive.
Finally, Judge Rader pointed to other factors that he believed distinguished the level of intent from Kingsdown: (1) the absence of dosage information in a part of Example 6, as compared to other parts of that Example, made the absence so blatantly obvious, and if Dr. Uzan really intended to deceive the PTO, he would not have made the omission so conspicuous; (2) Dr. Uzan has had a magnificent fifty-year career with Aventis, has published over 350 scientific articles, and has received numerous prestigious awards, including France’s highest award for drug discovery, and would be unlikely to risk his reputation and tarnish his career for a single example in the prosecution of a patent in which he was not an inventor; (3) the errors were made by collective action (i.e., two individuals, Dr. Uzan and Aventis’s prosecuting attorney), which are less likely to show intent to deceive because the attorney did not know that the dosages were different and Dr. Uzan admitted that he inadvertently neglected to add the dosage data; (4) Dr. Uzan himself revealed the error when he submitted all of the raw data to the PTO in his second declaration, thus correcting the mistake before issuance of the patent (which the examiner still issued); (5) Aventis filed a reissue application for the ’618 patent, which reissued with all of the original independent claims, but without Example 6, thus indicating that the half-life data were not even necessary for patentability; and (6) Aventis did not have the opportunity to make the last point to the district court because the PTO granted the reissue a day before the district court granted SJ on the unenforceability of the ’618 patent. Thus, because “materiality and intent seem suspect on this record,” Judge Rader would reverse. Rader Dissent at 8.