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Presumption of Validity of an Issued Patent Is Unchanged by Mistaken Issuance of a Claim or Previous Consideration of Prior Art by the PTO

July 02, 2012
Smyth, Jeffrey D.

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Last Month at the Federal Circuit - August 2012

Judges: Lourie, Prost, Moore (author)

[Appealed from: D. Del., Judge Kugler]

In Sciele Pharma Inc. v. Lupin Ltd., No. 12-1228 (Fed. Cir. July 2, 2012), the Federal Circuit vacated the district court’s issuance of a preliminary injunction stopping the sale of a generic drug product and remanded the case to the district court for further proceedings.

Shionogi Pharma Inc. (“Shionogi”), previously known as Sciele Pharma Inc., markets Fortamet, an extended-release tablet of metaformin hydrochloride. Lupin Ltd. and Lupin Pharmaceuticals Inc. (collectively “Lupin”) submitted an ANDA to the FDA, seeking approval to market a generic version of Fortamet. Shionogi sued Lupin for patent infringement, asserting, inter alia, U.S. Patent No. 6,866,866 (“the ’866 patent”) directed to Fortamet formulations with certain peak dosage limitations.

After expiration of the thirty-month stay, the FDA gave final approval to Lupin’s ANDA, and Lupin launched its generic version of Fortamet “at risk.” Shionogi moved for a preliminary injunction and a recall of Lupin’s generic products. The district court granted the motion without addressing Lupin’s obviousness arguments, and Lupin appealed. The Federal Circuit vacated the preliminary injunction and remanded the case, directing the district court to “make appropriate findings and conduct an appropriate obvious analysis in the first instance.” Slip op. at 6. On remand, the district court reinstated the injunction and Lupin again appealed.
In the instant appeal, the Federal Circuit first addressed the appropriate presumption of validity and burden of proof. Lupin argued that the presumption of validity should not attach because claims that had been cancelled in response to an obviousness rejection were erroneously included in the issued patent. Shionogi argued that there should be a heightened presumption of validity because the prior art references were before the PTO during prosecution.

The Court dismissed the parties’ arguments, holding instead that “[t]he presumption of validity attaches to all issued patents and the clear and convincing evidence burden applies to all issued patents.” Id. at 10. The Court noted that this burden of proof is the same regardless of whether a reference was previously considered by the PTO, though new evidence considered by the PTO may carry more weight. The Court held that the prosecution history, including “the bizarre circumstances surrounding the issuance of the claims in [the ’866] patent,” does not affect the burden of proof and instead would be taken into account in the Court’s obviousness analysis. Id. at 12.

In addressing obviousness, the Court held that Lupin’s obviousness arguments raised substantial questions of invalidity, and that the district court’s obviousness analysis was “flawed.” The Court found that the district court failed to correctly apply KSR based on a perceived factual difference between KSR and the present case, namely, that the present references were before the PTO during prosecution.

The Court found that the district court clearly erred in concluding that there was no motivation to combine the two references. The Court reasoned that the second reference identified a number of benefits that would have motivated one skilled in the art to modify the first reference to obtain the claimed dosage limitation. The Court found further motivation based on the drug profile of the industry standard drug.

The Court noted that its holding was further supported by Shionogi’s argument during prosecution that one skilled in the art would be able to manipulate the formulations of the prior art to achieve the claimed invention. Rejecting Shionogi’s contention that this language only applied to enablement, the Court held that, coupled with the motivation from the prior art, “the applicant’s characterization of the predictability and skill in the art during prosecution provides further evidence that [the claimed invention] would have been a routine and obvious design choice . . . .” Id. at 16. Thus, the Court vacated the district court’s issuance of a preliminary injunction stopping the sale of a generic drug product and remanded the case to the district court for further proceedings.

Summary authored by Jeffrey D. Smyth, Esq.