Evidence of Cost Savings in Manufacturing Process Found Insufficient to Establish Commercial Success of Patented Product Made by that Process

Authored by Mindy L. Ehrenfried, D. Brian Kacedon, and John C. Paul

When rebutting a defense of obviousness, patent owners often introduce evidence of secondary considerations, including the alleged commercial success of the patented invention. A recent decision from the United States District Court for the Northern District of Illinois in The Medicines Company v. Mylan Inc.,¹ clarifies the type of evidence a patent owner may use to show commercial success.

In that decision, the Court granted a motion to exclude the opinions of the patent owner's employee/expert on alleged commercial success. The Court granted the motion to exclude on two grounds: (1) the expert's opinions addressed only decreased manufacturing costs and did not discuss or consider increased sales, market share, or customer demand for the patented invention and (2) the expert failed to show a nexus between the patented invention and the alleged commercial success.

Background

The Medicines Company (TMC) filed a patent-infringement suit against Mylan after Mylan sought FDA approval to market a generic version of Angiomax^®, an anticoagulant drug marketed by TMC. The patented invention covers "pharmaceutical batches" of a drug product containing the active ingredient in Angiomax^® and also having a certain maximum level of impurity. While the claims recited a maximum level of impurity, they did not, however, cover the process of making the batches or recite any processing steps.

To rebut Mylan's obviousness argument, TMC sought to introduce the expert opinions of its former Vice President of Global Manufacturing and Supply to show the alleged commercial success of Angiomax^®. Specifically, the expert intended to discuss the "commercial reliability" and "robustness of the manufacturing process" of Angiomax^®, which, according to the expert, resulted in less impurity and therefore fewer rejected pharmaceutical batches and reduced manufacturing costs. Mylan moved to exclude the expert's opinions, not because Mylan challenged the underlying facts, but because the opinions (1) were "not grounded in Federal Circuit law" and (2) failed to show a nexus between the patented invention and the alleged commercial success.

The Decision

To establish commercial success, the Court observed, a patent owner "must prove that the product has a substantial share of sales in a definable market." Because of that requirement, the Court rejected TMC's theory that manufacturing cost savings alone could establish commercial success. In doing so, the Court noted that in a copending litigation involving the same patent in the United States District Court for the District of Delaware, the Delaware Court rejected TMC's theory on commercial success. Further, the Court relied on the expert's deposition testimony as evidence that the expert did not understand the definition of 'commercial success' in the context of an obviousness analysis. Because the expert did not discuss increased sales, market share, or customer demand for the patented invention, the Court held, the expert applied the wrong legal standard. Finding the expert's opinions "legally flawed" and therefore unhelpful, the Court granted Mylan's motion to exclude.

The Court also agreed with Mylan's second argument for excluding the expert's opinions—TMC's failure to link the alleged commercial success to the patented invention. The Court first highlighted several prior decisions, all emphasizing that commercial success is relevant only if a nexus exists between the alleged commercial success and the invention claimed in the asserted patent. In other words, if the increased sales, market share, or customer demand result from other factors (e.g., successful marketing) rather than the patented invention, any commercial success is irrelevant to the obviousness analysis. Again relying on the expert's deposition testimony, the Court found that the expert did not appear to understand the nexus requirement. The Court then held that TMC could not rely on process-related aspects (i.e., manufacturing cost savings) to support the commercial success of a patented composition, such as that in the asserted patent. Similarly, because TMC had not told its customers about the patented invention, the Court held that it could not link customers' purchase decisions Angiomax^® to the asserted patent.

Finally, the Court rejected TMC's argument that the Court should presume a nexus exists. Where a commercial product is coextensive with a patent, a nexus between the commercial success of the product and the patented invention can be presumed. Because TMC alleged that multiple patents it owns all cover Angiomax^®, however, the Court found that the product could not be coextensive with the asserted patent.

Strategy and Conclusion

This decision shows the importance of demonstrating commercial success of a patented product through increased sales, market share, or customer demand rather than relying solely on evidence of cost savings. Further, it emphasizes that parties seeking to establish commercial success should show a nexus between any evidence and the patented invention.

Endnotes

¹ The opinion can be found at http://www.finnegan.com/files/upload/LES_Insights_Column/2014/TheMedicines_v_Mylan.pdf.

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