Philip Brooks' Patent Infringement Updates

Trade Agency Wants to End Deals Delaying Generics

The following is excerpted from a May 6, 2008 Reuters article by Diane Bartz:

A practice by major pharmaceutical companies of paying generic drug companies to delay putting cheaper medicines on the market violates federal law and must be stopped, a top ranking official with the U.S. Federal Trade Commission (FTC) said.

These so-called reverse payments are made after a generic company files with the Food and Drug Administration (FDA) to sell a generic version of a drug still under patent.

The maker of the original drug often sues for patent infringement, but sometimes these lawsuits are settled when the maker of the brand name drug gives the generic company money to bring the generic drug to market before the patent expires but much later than the generic company had wanted, a government source explained.

The settlements can be structured to make it appear that the drug companies are paying for something other than delayed generic entrance, according to the government source and an industry legal source, both of whom asked not to be identified because they are not authorized to speak to reporters.

Another pharmaceutical industry source, who asked not to be named, confirmed that reverse payments would often be structured so that it would look like the brand-name drug maker was paying for something else. "It's never: 'Here's $50 million, don't launch the product,"' the source said. "I don't think there's a place for those reverse payments."

The FTC says such payments violate antitrust law by dividing up the market.

Generics can be 20 percent to 90 percent cheaper than brand-name drugs.

All drug companies are required to report any patent settlement to the FTC.

Read the full article here.

The Increasing Role of Antitrust Principles in Defining Patent Rights

The Antitrust, Pharmaceutical, and Standards Committees of the Intellectual Property Owners Association is hosting the above titled conference on June 9, 2008 in Washington, DC at the Ronald Regan Building and International Trade Center.

This conference will examine the role of competition law by the courts and antitrust enforcement agencies in defining patent rights. Panels will discuss a variety of industries and topics dealing with this ever-challenging intersection of patent and antitrust law.

Licensing IP in the Current Patent Litigation Environment will address the topic of licensing patents in light of the Supreme Court’s decision in MedImmune v. Genentech affecting declaratory relief jurisdiction and in Quanta v. LG Electronics addressing restrictive licensing practices.

Antitrust Implications of Standards Organization IP Policies will address principles of competition as they are applied to the standard setting activities. Such forums have been recognized as simultaneously having both procompetitive and anticompetitive potential, making differentiating between the two difficult – a situation only intensified by the increasing prevalence of IP rights that are incorporated into a standard. The panel will discuss the Federal Trade Commission’s activities in this arena, including the N-Data Solutions and Rambus cases.

Antitrust Liability in Reverse Payments Cases and Lifecycle Management in the Pharmaceutical Industry will focus on recent developments in the pharmaceutical industry and in particular the treatment of “reverse payments” under Hatch-Waxman life-cycle management and orange book listing strategies.

Inequitable Conduct, Walker Process and Handgards Litigation will address the status of inequitable conduct and fraud at the U.S. Patent and Trademark Office and related issues that arise later in a large number of patent infringement cases. Topics will include a review of recent case law; differences between fraudulent procurement in Walker Process and simple inequitable conduct claims following the Federal Circuit’s Dippin’ Dots decision; evolving perspectives on the Noerr-Pennington doctrine; and the problems of market definition and market power in antitrust counterclaims.

More information and registration are available here.

DCGI Rules Out Low-Cost Version of Patented Drugs

Joe C Mathew, writing today, May 1, 2008, for the Business Standard, India’s leading business daily states:

The Drugs Controller General of India (DCGI) has decided to reject applications seeking marketing approvals for copycat versions of medicines that have product patents in the country.

The move is important as it allows multinational drug firms to launch their patent-protected medicines without fear of infringement by domestic drug-makers.

Leading drug firm Cipla recently launched a low-cost version of cancer drug erlotinib, challenging the patent enjoyed by Swiss drug firm Roche on the medicine in India.

The matter is currently under litigation after Roche dragged Cipla to the Delhi High Court alleging "patent infringement". DCGI's latest move will prevent a repeat of such cases as the authority will not give marketing approval for low-cost version of patented medicines.

Multinational drug firms have welcomed the DCGI move while domestic players have termed it "unwarranted" saying it doesn't have any legal basis. The law governing drug regulation (Drugs and Cosmetics Act, 1940) does not provide for any linkage between patent status and regulatory approvals, they say.

"Patent linkage is the practice that creates a link between the patent status of a product and the application for a marketing authorisation. It prevents registration and authorisation of generic medicines until the expiry of the patent and considerably delays generic market entry," says D G Shah, secretary general, Indian Pharmaceutical Alliance, the representative body of leading Indian drug makers.

Read the full article here.

AstraZeneca PLC Soars on Nexium Drug Patent Settlement

The following press release appeared yesterday, April 15, 2008, on BioSpace:

Ranbaxy Pharmaceuticals Inc. (RPI), a wholly owned subsidiary of Ranbaxy Laboratories Limited (RLL), announced today that it has reached several agreements with AstraZeneca. Two of these agreements concern Esomeprazole magnesium capsules. The third agreement pertains to Omeprazole 40mg tablets, and the fourth agreement pertains to Felodipine ER capsules. All of the agreements are specific to the U.S. market.

The agreement settles the patent infringement litigation filed by AstraZeneca following Ranbaxy's submission to the United States Food & Drug Administration of an Abbreviated New Drug Application for a generic version of Esomeprazole magnesium. Under the settlement agreement, Ranbaxy concedes that all six patents asserted by AstraZeneca in the patent litigation are valid and enforceable.

The settlement agreement will allow Ranbaxy to commence exclusive sales of a generic version of Nexium under a license from AstraZeneca on May 27, 2014. During the 180-day period following the date, RPI will distribute the only generic Esomeprazole magnesium product in the US market.

Ranbaxy has filed a Consent Judgment with the U.S. District Court for the District of New Jersey reflecting the terms of the settlement agreement. With the Court now having entered the Consent Judgment, the settlement agreement is final, and the patent infringement litigation against Ranbaxy has been dismissed.

Read the full release here.

Caraco Pharm Labs v. Forest Labs (Lexapro) CAFC Decision

The following guest post is provided by H. Keeto Sabharwal, IP Litigation Practice Group Leader for Blank Rome LLP, based in Washington, DC:

In its 2-1 decision in Caraco Pharm. Labs. v. Forest Labs. yesterday, the CAFC further refined its 180-day exclusivity jurisprudence and its position regarding the sufficiency Declaratory Judgments under the FDCA and the Supreme Court's new standard articulated in MedImmune v. Genentech.  In so doing, it appears to have offered a solution to the so-called "bottleneck" problem, where subsequent ANDA applicants are barred from approval when a first ANDA applicant settles litigation and the innovator refuses to sue subsequent filers.

The case centers around Forest Lab's blockbuster antidepressant drug escitalopram oxalate (LEXAPRO).  Forest has listed 2 patents - U.S. Patent Nos. RE 34,712 and 6,916,941 - in the FDA's orange book as covering escitalopram.  Ivax pharmaceuticals was the first to file ANDA applications containing Paragraph IV certifications that the '712 (exp: 2012) and '941 (exp: 2023) patents were either not infringed by its generic version, or the patents were invalid and/or unenforceable.  Forest sued Ivax on the '712 patent, but not on the '941 patent.  Ultimately, the Ivax's generic version was found to infringe the '712 patent and, thus, Ivax was enjoined from marketing its generic version until 2012.

Consequently, all subsequent ANDA filers were precluded from approval until 181 days after the expiration of the '712 patent, because Ivax has procured 180-day exclusivity (a.k.a. generic exclusivity) by virtue of its first-to-file status.  Subsequent filers may circumvent Ivax's exclusivity, however, by obtaining a court-judgment that both the '712 and '941 patents are invalid or not infringed.

Caraco Pharm. Labs. filed an ANDA application against both the '712 and '941 Patents.  In response, Forest sued Caraco within the 45-day period only on the '712 patent, but not on the '941 patent.  Because Caraco must obtain a court-judgment on both '712 and '941 patents to immediately trigger Ivax's exclusivity and expedite the approval of its own ANDA, Caraco filed a Declaratory Judgment action seeking a ruling of noninfringement or invalidity of the '941 patent.  In response, engaging in a clever example of "Hatch-Waxman Gamesmanship," Forest freely and unilaterally granted Caraco an irrevocable covenant not to sue for infringement of the '941 patent, knowing that a "covenant not to sue" would not qualify as a triggering event under the Hatch-Waxman amendments.  The court dismissed Caraco's complaint for not meeting the "actual case or controversy" requirement for DJ actions.

In reversing the district court, the CAFC panel concluded that Caraco had satisfied the Supreme Court's MedImmune standard for Declaratory Judgment actions.  The Court advanced three primary reasons for finding Caraco had standing: (1) it had a cognizable injury-in-fact; (2) Forrest's listing of the '712 and '941 is the source of that injury; and (3) its alleged injury is redressible by the court.  For more information, please click here for the Court's full opinion, or see the attached pdf file.[Download 07-1404.pdf]

Lastly, it is important to note that the center piece of this case is Ivax's ANDA, which was filed before the Medicare Modernization Act Amendments to the FDCA.  Therefore, the forfeiture provisions that now would typically apply to Ivax had its ANDA been filed after 2003 do not.  To that end, this decisions effect in finding injury in the post-MMA context remains unclear.

Generic Particulars

From today's (March 21, 2008) The Indian Express, comes this editorial:

From January 2005, a new law was to have brought India into compliance with the WTO on how pharmaceutical products were to be patented. Earlier, patent protection was offered on the process; now the product itself was sought to be protected by patent. This meant that a drug could no longer be reverse engineered and marketed. However, as a case that came in for an interim order in the Delhi high court on Wednesday shows, the new patent regime still has many grey zones which need to be addressed before the public policy implications can be adequately assessed. The court refused to stay drug-maker Cipla from manufacturing and selling a lung cancer formulation which the Swiss company, Roche, says is being done in violation of its patent. The case comes in for hearing again in August. Positions have predictably been taken by activists and pharma players, but the issues raised go beyond the specifics of the Cipla/Roche case.

Read the full editorial here.

Barr Subsidiary Sues Watson for SEASONIQUE(R) Patent Infringement

PR Newswire reported today, March 5, 2008:

Barr Pharmaceuticals, Inc. (NYSE: BRL) today announced that its wholly-owned subsidiary, Duramed Pharmaceuticals, Inc., has filed suit against Watson Pharmaceuticals (NYSE: WPI) and its subsidiary, Watson Laboratories, Inc., for infringement of the patent protecting Duramed's SEASONIQUE(R) extended-cycle oral contraceptive product. The Company's SEASONIQUE Patent No. 7,320,969 is due to expire on January 30, 2024. In addition to the patent, the Company also has 3-year New Product Exclusivity for its SEASONIQUE product until May 25, 2009.

See the full press release here.

$29 Billion Reasons to Litigate?

Duncan Bucknell of IP Thinktank Blog wrote in his post yesterday, February 20, 2008:

The most successful IP strategies in the pharma industry are often aggressive.  They have to be.

US $29 Billion in drugs come off patent this year - however that's the innovators' current markets - these products will all have multiple generic suppliers on patent expiry, and so with price competition, the actual markets will be much smaller.

The fruits go to those companies who don't wait for patent expiry before launching, and instead develop non-infringement or invalidity strategies.  High risk, but high reward.

Read the full post here.  Also take a look at Mr. Bucknell's most recent Global Week in Review.  A "selection of top intellectual property news breaking in the blogsphere and Internet."

Cephalon Disappointed by FTC Action on PROVIGIL Patent Settlements

Cephalon issued a press release yesterday, February 13, 2008, that reads, in part:

Cephalon, Inc., (Nasdaq: CEPH) issued the following statement in response to a complaint filed today by the U.S. Federal Trade Commission (FTC) in U.S. District Court for the District of Columbia challenging the validity of certain agreements entered into by the company in late 2005 and early 2006 to settle the PROVIGIL(R) (modafinil) [C-IV] patent infringement litigation and seeking to permanently enjoin the Company from maintaining or enforcing these agreements.

Cephalon stands by the strength and validity of our PROVIGIL patents and the legal basis for these settlements. We are disappointed that the FTC has determined to challenge these agreements as we believe they fully comply with both the spirit and letter of the antitrust laws. As importantly, our settlements confer a meaningful benefit to U.S. consumers by providing for the entry of generic modafinil three years early.

Cephalon is prepared to vigorously defend itself in this matter and expects to prevail.

Thanks to the reader who alerted me to this release.

European Commission Probes Pharmaceutical Sector

From a January 30, 2008 item by Kevin Aschenbrenner of Jaffe Legal News Service:

In a bid to discover why, despite a strengthened patent system, there has been a decline in both new and generic drugs coming onto the market in Europe, the European Commission (EC) has launched a probe of the pharmaceutical sector. It has already conducted raids on the European operations of several pharma companies. "The EC's decision to launch a sector wide investigation into the pharmaceutical industry backed up with dawn raids demonstrates the Commission's concern," says Martin Baker, who heads the Competition, Regulations and Trade Practice Group at Taylor Wessing (London). The primary focus of the investigation is on the use of patent litigation for intimidation, along with reverse payments to generics and the reasons for higher generic prices in Europe as opposed to the U.S. So far the probe is not targeting individual companies. "Its purpose is to enable the Commission to gather information and draw conclusions about the sector. If it discovers issues that need attention, it can be expected to launch proceedings against individual companies probably under Article 82. At the very least, the investigation will enable the Commission to be informed of the workings of the industry," says Baker. He is available to discuss the investigation, its aim, and what pharmaceutical companies with European operations need to know.

See here for contact information for Mr. Aschenbrenner.