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Failure to Provide Unpublished Information About Less Similar Compounds Is Not Inequitable Conduct

September 25, 2009

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Last Month at the Federal Circuit - October 2009

Judges: Newman (author), Rader, Prost

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

In AstraZeneca Pharmaceuticals LP v. Teva Pharmaceuticals USA, Inc., Nos. 08-1480, -1481 (Fed. Cir. Sept. 25, 2009), the Federal Circuit affirmed the district court’s SJ that appellants Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries, Ltd. (collectively “Teva”) and Sandoz, Inc. (“Sandoz”) had not presented evidence sufficient for a reasonable jury to find that, during prosecution of the subject patent application, AstraZeneca Pharmaceuticals LP and AstraZeneca UK Limited (“AstraZeneca”) had misrepresented or omitted material fact with intent to mislead the patent examiner.

The patent at issue, U.S. Patent No. 4,879,288 (“the ’288 patent”), assigned to AstraZeneca, claims the antipsychotic drug quetiapine (marketed under the brand name “SEROQUEL®”). The claimed drug is an “atypical” antipsychotic, lacking undesirable side effects associated with “typical” antipsychotics, such as involuntary body movements including torsion spasms, muscle spasms and dystonia of the face, neck, or back with protrusion of the tongue, and tonic spasms of the limbs (dyskinesia). The ’288 patent expires on September 26, 2011.

Teva and Sandoz, both generic drug manufacturers, each filed an ANDA seeking FDA approval to market a generic version of Seroquel®. AstraZeneca responded by filing suit against both for patent infringement. The suits were consolidated in the U.S. District Court for the District of New Jersey. The district court granted SJ that there was no inequitable conduct during prosecution.

On appeal, Teva and Sandoz only challenged the SJ of no inequitable conduct. The Federal Circuit noted that “[a]lthough the premises of inequitable conduct require findings based on all the evidence, . . . a motion for summary judgment may be granted when, drawing all reasonable factual inferences in favor of the non-movant, the evidence is such that the non-movant can not prevail.” Slip op. at 3 (quoting ATD Corp. v. Lydall, Inc., 159 F.3d 534, 547 (Fed. Cir. 1998)). As stated by the Court, the issue in the case “relate[d] to the extent to which the patent applicant, having fully disclosed the relevant prior art and having provided comparative data to the satisfaction of the patent examiner, must also present any additional unpublished information in the applicant’s possession concerning other less structurally similar compounds, and must also synthesize additional compounds for comparative testing.” Id. at 4. According to the Court, both the materiality of withheld information and deceptive intent must be separately proved and, if both are proved, materiality and deceptive intent are balanced by the court, with cognizance of the underlying facts, to determine whether there was inequitable conduct. Finally, the Court stated that if a district court finds there was inequitable conduct, it may, in its discretion, declare the patent unenforceable.

The Court noted that the prior art references at issue had been presented to the PTO in AstraZeneca’s Information Disclosure Statement (“IDS”), which had been submitted before the examiner’s first Office Action. Four compounds listed in the prior art references identified in the IDS were relevant compounds. The compounds included Compound 21076, Compound 24028 (“Schmutz B”), perlapine (“Schmutz I”), and fl uperlapine. Although AstraZeneca possessed internal test data for these compounds, as well as for many other compounds, it did not include this internal data in the IDS. Teva and Sandoz argued that AstraZeneca’s data showed that some prior art compounds potentially exhibited atypical antipsychotic activity, and that this information should have been reported to the patent examiner.

The Court examined whether the information allegedly withheld could establish the fact of materiality and whether there was evidence of intentional withholding of the information. Noting that there are several standards for establishing materiality, the Court addressed the most frequently employed test, which questions “whether a reasonable examiner would have considered the information important in deciding whether to grant the patent, even when the omitted information does not negate patentability.” Id. at 10. The Court considered the argument by Teva and Sandoz that AstraZeneca misrepresented that the atypical properties of quetiapine were unexpected, presenting only internal test data from compounds that were typical while omitting internal test data from those that were potentially atypical. It also considered the argument by AstraZeneca that it performed the comparison requested by the examiner, and that it never represented that quetiapine’s atypical properties made it completely unique, noting it identified the references describing the compounds that are allegedly atypical antipsychotics.

The Court concluded that “[n]o relevant reference [was] asserted to have been withheld.” Id. at 11. The Court further noted that various references indicate that certain prior art compounds were known to be atyptical antipsychotics. Further, noting that the examiner made his prima facie obviousness rejection with all the references before him, the Court addressed the contentions that AstraZeneca falsely stated that generating test data on relevant prior art compounds would be very expensive, and that AstraZeneca should have submitted its existing test data for these compounds because their structures are equally close to quetiapine. The Court rejected the notion that AstraZeneca falsely stated that generating test data on the relevant prior art compounds would be very expensive. Specifically, the Court noted that, in this case, there was no evidence that if such tests had been conducted, it would have been material to patentability, as no showing was made that structural similarity between the compounds would establish that the prior art compounds would have atypical properties.

Regarding the determination of which compounds are more structurally similar, the Court stated that precedent suggests ascertaining the common elements of the claimed invention and the prior art. In this case,that was concluded to be the core structure. Thus, once the core structure was identified, the similarity of appended side chains must then be considered. The Court found this process consistent with what was asserted by AstraZeneca, not disputed by the examiner, and led to its conclusions that AstraZeneca’s substitution of references was not a material misrepresentation, and the nonprovision of data on the less structurally similar Compound 24028 was not a material omission.

The Court then rejected Teva and Sandoz’s argument that AstraZeneca’s submission of its internal test data along with its internal test data of prior art references was an implied misrepresentation because it omitted other internal test data, including that for fl uperlapine, perlapine, Compound 21076, and Compound 24028. The Court noted that AstraZeneca had not asserted that no prior art compound was atypical, but that the structurally closest prior art compounds, as required by the examiner, did not possess the same properties as quetiapine.

The Court then addressed whether Teva and Sandoz could establish the intent to deceive required for a finding of inequitable conduct by clear and convincing evidence. It first dismissed as incorrect that a high level of materiality allowed for a proportionately lesser showing of intent to deceive. The Court set forth that the only evidence of intent offered was AstraZeneca’s internal knowledge that certain compounds of this structural class were atypical, and that it did not include this information in the IDS. The Court stated that the law was clear that inequitable conduct requires more than an intent to withhold, but rather required an intent to deceive. The Court further stated that intent to deceive cannot be inferred simply from the decision to withhold information where the reasons for withholding the information are plausible, as in this case, where the examiner focused on the other structurally closest compounds.

Finally, the Court agreed with the district court’s conclusion that the Appellants had not provided evidence sufficient to establish the threshold facts of material withholding with intent to deceive and affirmed the district court’s grant of SJ.

Summary authored by Wesley B. Derrick, Ph.D., Esq.