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Outlier? Split Federal Circuit Denies En Banc Review of Written Description Requirement

The US Court of Appeals for the Federal Circuit denied a patent owner’s request for en banc rehearing of a panel decision that invalidated a patent for lack of written description on the basis that a person of skill in the art would not be able to recognize the clinical efficacy of the claimed dose and thus would not recognize that the inventors were in possession of the claimed invention at filing. Biogen International GMBH, Biogen MA, Inc. v. Mylan Pharmaceuticals Inc., Case No. 20-1933 (Fed. Cir. March 16, 2022) (per curiam) (Moore, C.J., Lourie, Newman, JJ., dissenting).

Biogen owns a patent relating to the drug Tecfidera®. The patent claims a method of treating multiple sclerosis with dimethyl fumarate (DMF) at a specific dose of 480 mg per day via oral administration (DMF480). In the written description, the patent describes a method for treating a neurological disease using DMF and states that the neurological disease can be multiple sclerosis. The patent discloses that an effective dose of DMF for oral administration can be “from about 0.1 g to 1 g per day, 200 mg to about 800 mg per day (e.g., from about 240 mg to about 720 mg per day, or from about 480 mg to about 720 mg per day; or about 720 mg per day).”

Biogen sued Mylan for infringement after Mylan submitted an abbreviated new drug application (ANDA) for a generic version of Tecfidera®. Mylan challenged the validity of the patent based on lack of written description. The district court invalidated the patent, finding that the claimed method lacked written description support because the DMF480 dose was listed only once in the specification and finding that the specification’s focus on basic research and broad DMF-dosage ranges showed that the inventors did not possess a therapeutically effective DMF480 dose at the time of filing. Biogen appealed.

In a 2–1 panel decision, the Federal Circuit affirmed the district court finding, explaining that “a skilled artisan would not have recognized, based on the single passing reference to a DMF480 dose in the disclosure, that DMF480 would have been efficacious in the treatment of MS, particularly because the specification’s only reference to DMF480 was part of a wide DMF-dosage range and not listed as an independent therapeutically efficacious dose.”

Judge O’Malley issued a dissenting opinion, questioning whether the district court erred in requesting clinical data showing efficacy of the claimed DMF480 dose under the written description context.

Biogen timely petitioned for en banc review, raising two questions:

  1. Must a “written description” prove the invention’s efficacy?
  2. Is there a need to repeatedly emphasize elements of the invention in order to satisfy the written description requirement?

The Federal Circuit issued a 6–3 decision denying the en banc petition. Judge Lourie wrote in dissent, joined by Chief Judge Moore and Judge Newman, calling this case “an outlier” at “the farthest end of the spectrum of cases where written description has not been found” given that every claim limitation was expressly described [...]

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Long-Felt Need Not Felt Long Enough to Overcome Obviousness

The US Court of Appeals for the Federal Circuit upheld a finding that patents covering Narcan, a naloxone-based intranasal opioid overdose treatment, were obvious despite evidence of long-felt need. Adapt Pharma Operations Ltd. v. Teva Pharms. USA, Inc., Case No. 20-2106 (Fed. Cir. Feb. 10, 2022) (Prost, Stoll, JJ.) (Newman, J., dissenting).

In 2012, during the growing opioid crisis, the US Food & Drug Administration (FDA) identified a need for an improved intranasal naloxone treatment that could be FDA-approved and deliver the same amount of naloxone to the blood as an injectable formulation. In 2015, Adapt filed a patent application for Narcan, a method of nasally administering naloxone using about 4 mg of naloxone, benzalkonium chloride (BZK) and three other excipients. After Teva submitted an abbreviated new drug application (ANDA) to sell a generic version of Narcan, Adapt sued Teva for infringement. After a two-week bench trial, the district court determined that Adapt’s patents were obvious in view of prior art. Adapt appealed.

The Federal Circuit found no error in the district court’s conclusions that a skilled artisan would have been motivated to combine the prior art, that the prior art did not teach away from the claimed combination and that Adapt’s evidence regarding unexpected results, copying and industry skepticism was not probative of nonobviousness. The Court noted that a skilled artisan would have been motivated to improve on existing treatments because their shortcomings were well known, and the FDA had explicitly identified a need for an improved intranasal product. The claimed excipients also were separately taught in the prior art within the claimed concentration ranges. The Court agreed that a skilled artisan would have been motivated to combine these components to achieve the tonicity and pH required for a drug to be tolerable in the nose and to preserve and stabilize the formulation. While the prior art suggested that BZK causes naloxone degradation, the Court found that this did not teach away from its use because BZK was commonly used in intranasal formulations.

Turning to secondary considerations of nonobviousness, the Federal Circuit affirmed the following:

  • Narcan’s 56% increase in bioavailability was not “evidence of unexpected results” because BZK was a known permeation enhancer expected to increase bioavailability.
  • “[C]opying in the ANDA context is not probative of nonobviousness because . . . bioequivalence is required for FDA approval.”
  • The FDA’s recommendation to increase naloxone dosage in intranasal formulations negated any alleged industry skepticism regarding the higher dosage.

While the Federal Circuit found that the district court erred in finding there was no long-felt but unmet need for an effective intranasal naloxone product, the Court concluded that this error was harmless because the long-felt need began just three years before the patents’ priority date, which was not long enough to overcome the “strong case of obviousness . . . in view of the plethora of prior art.” The Court further agreed that competitors’ alleged failure to obtain FDA approval was not probative of nonobviousness and ultimately affirmed the district [...]

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Silence May Be Sufficient Written Description Disclosure for Negative Limitation

Addressing the issue of written description in a Hatch-Waxman litigation, the US Court of Appeals for the Federal Circuit affirmed the district court’s finding that the patent adequately described the claimed daily dose and no-loading dose negative limitation. Novartis Pharms. v. Accord Healthcare Inc., Case No. 21-1070 (Fed. Cir. Jan. 3, 2022) (Linn, O’Malley, JJ.) (Moore, CJ, dissenting).

Novartis’s Gilenya is a 0.5 mg daily dose of fingolimod hydrochloride medication used to treat relapsing remitting multiple sclerosis (RRMS). HEC filed an abbreviated new drug application (ANDA) seeking approval to market a generic version of Gilenya. Novartis sued, alleging that HEC’s ANDA infringed a patent directed to methods of treating RRMS with fingolimod or a fingolimod salt at a daily dosage of 0.5 mg without an immediately preceding loading dose.

The specification described the results of an Experimental Autoimmune Encephalomyelitis (EAE) experiment induced in Lewis rats showing that fingolimod hydrochloride inhibited disease relapse when administered daily at a dose of 0.3 mg/kg or administered orally at 0.3 mg/kg every second or third day or once a week, and a prophetic human clinical trial in which RRMS patients would receive 0.5, 1.25 or 2.5 mg of fingolimod hydrochloride per day for two to six months. The specification did not mention a loading dose associated with either the EAE experiment or the prophetic trial. It was undisputed that loading doses were well known in the prior art and used in some medications for the treatment of multiple sclerosis.

The district court found that HEC had not shown that the patent was invalid for insufficient written description for the claimed 0.5 mg daily dose or the no-loading dose negative limitation. The district court also found sufficient written description in the EAE experiment and/or prophetic trial and credited the testimony of two of Novartis’s expert witnesses. HEC appealed.

The Federal Circuit affirmed the district court’s decision. Turning first to the daily dose limitation, the majority held that the prophetic trial described daily dosages of 0.5, 1.25 or 2.5 mg and found no clear error by the district court in crediting expert testimony converting the lowest daily rat dose described in the EAE experiment to arrive at the claimed 0.5 mg daily human dose. Reciting Ariad, the Court explained that a “disclosure need not recite the claimed invention in haec verba” and further, that “[b]laze marks” are not necessary where the claimed species is expressly described in the specification, as the 0.5 mg daily dose was here.

Turning to the no-loading dose negative limitation, the majority disagreed with HEC’s arguments that there was no written description because the specification contained zero recitation of a loading dose or its potential benefits or disadvantages, and because the district court inconsistently found that a prior art abstract (Kappos 2006) did not anticipate the claims because it was silent as to loading doses. The Court explained that there is no “new and heightened standard for negative claim limitations.” The majority acknowledged that silence alone is insufficient disclosure but emphasized that [...]

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Rounding Error: Intrinsic Evidence Informs Plain and Ordinary Meaning

Vacating a stipulated infringement judgment based on an incorrect claim construction, the US Court of Appeals for the Federal Circuit explained that it is improper to isolate claim language from the intrinsic evidence when determining the plain and ordinary meaning of a disputed term. AstraZeneca AB v. Mylan Pharms. Inc., Case No. 21-1729 (Fed. Cir. Dec. 8, 2021) (Stoll, J.) (Taranto, J., dissenting).

AstraZeneca sued Mylan Pharmaceuticals for infringement of three patents listed in the US Food and Drug Administration’s (FDA) orange book covering the Symbicort® pressurized metered-dose inhaler for the treatment of asthma and COPD. 3M submitted an abbreviated new drug application (ANDA) to the FDA to manufacture and sell a generic version of the Symbicort® inhaler and certain interests to the ANDA were later transferred to Mylan. After receiving a Paragraph IV letter from Mylan, AstraZeneca filed an infringement suit.

Shortly before trial, the district court held a claim construction hearing to determine the meaning of “0.001%,” the claimed concentration of PVP (one of the active ingredients). The district court construed the term based on its “plain and ordinary meaning, that is, expressed with one significant digit.” Based on this definition, Mylan stipulated to infringement and the district court entered judgment. The district court held a bench trial on invalidity, ultimately determining that Mylan did not prove that the claims were invalid as obvious. Mylan appealed the stipulated judgment stemming from the claim construction determination and the judgment of no invalidity.

First, Mylan challenged the district court’s claim construction of “0.001%.” AstraZeneca argued that the district court improperly construed the term to encompass a range from 0.0005% to 0.0014%. Mylan contended that, in view of the specification and the prosecution history, the term was to be defined precisely at 0.001% with only “minor variations” allowed. The Federal Circuit agreed, finding that Mylan’s proposed construction was more properly aligned with the patent’s description as further informed by the prosecution history.

The Federal Circuit stated that the proper construction of 0.001% only allowed minor variations from 0.00095% to 0.00104%. There was no dispute that the term 0.001% would ordinarily encompass the range of 0.0005% to 0.0014%. AstraZeneca argued that this “ordinary meaning” would control absent lexicography or disclaimer. The Court disagreed, finding that it would improperly isolate the term from the claim language, specification and patent prosecution history. The Court explained that the “ordinary meaning” is not the ordinary meaning in the abstract but is instead the “meaning to the ordinary artisan after reading the entire patent,” and therefore the claims must be read in view of both the written description and the prosecution history. The Court’s rationale for narrower construction was based on the intrinsic record reflecting that the written description and prosecution history showed that very minor differences in PVP concentration would impact stability.

The Federal Circuit found that the written description explained that stability was one of the most important factors and that even very minor differences in PVP concentration could impact stability. The written description also [...]

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Federal Circuit Clarifies Venue in Hatch-Waxman Case

Addressing venue in the context of a Hatch-Waxman case, the US Court of Appeals for the Federal Circuit explained that sending a paragraph IV notice letter to a company in the district is insufficient to establish venue. Celgene Corp. v. Mylan Pharmaceuticals Inc., Case No. 21-1154 (Fed. Cir. Nov. 5, 2021) (Prost, J.) The Court affirmed a district court finding that venue was improper since the defendant had not committed any acts of infringement and did not have a regular and established place of business in the district.

Celgene owns patents related to a multiple-myeloma drug that it markets and sells under the brand name Pomalyst. Mylan Pharmaceuticals Inc. (MPI) submitted abbreviated new drug applications (ANDAs) to the US Food & Drug Administration in order to bring a generic version of Pomalyst to market. Celgene filed suit in New Jersey against MPI and its related companies, Mylan Inc. and Mylan N.V. While Celgene is headquartered in New Jersey, MPI is based in West Virginia, Mylan, Inc. is based in Pennsylvania and Mylan N.V. is based in the Netherlands and Pennsylvania. The district court dismissed the case for improper venue (MPI and Mylan, Inc.) and for failure to state a claim (Mylan N.V.). Celgene appealed.

Citing Valeant v. Mylan, the Federal Circuit reiterated that venue for Hatch-Waxman cases must be predicated on past acts of infringement, and “it is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this context.” Celgene argued that because MPI sent a paragraph IV notice letter from West Virginia to Celgene’s headquarters in New Jersey, acts of infringement occurred in New Jersey. Celgene also argued that since the notice letter was mandatory and the ANDA had to be amended to include proof of delivery, the delivery of the letter was “sufficiently related to the ANDA submission.” The Court disagreed, explaining that venue in Hatch-Waxman cases is focused on the submission of the ANDA itself, including acts involved in the preparation of an ANDA submission. The Court noted these acts must be part of the ANDA submission and that Celgene’s “related to” standard was impermissibly broad. The Court found that since the submission of the ANDA did not take place in New Jersey, venue there was improper.

The Federal Circuit also found that neither MPI nor Mylan, Inc. had a regular and established place of business in New Jersey. Celgene argued both had a regular and established place of business based on places associated with Mylan employees as well as Mylan affiliates. In rejecting these arguments, the Court noted that the employees Celgene pointed to were working remotely from home, and that the employee’s home numbers were contained in business communications. However, the Court noted that there was no indication that the defendants owned, leased or rented the employees’ homes; participated in the selection of the homes; stored inventory there or took any other actions to suggest that they had an intention to maintain a place of [...]

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The Skinny Label That Wasn’t—Federal Circuit Reinstates Induced Infringement Verdict

The US Court of Appeals for the Federal Circuit vacated the district court’s grant of judgment as a matter of law (JMOL) of non-infringement where substantial evidence supported the jury’s verdict of induced infringement by an attempted “skinny label” that nonetheless encouraged doctors to engage in a patented use. GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., Case Nos. 18-1876, -2023 (Fed. Cir. Aug. 5, 2021) (Moore, C.J.) (Prost, J., dissenting).

GlaxoSmithKline LLC (GSK) sells a drug called carvedilol (brand name Coreg®), which is approved for three indications: Hypertension, congestive heart failure (CHF) and left ventricular dysfunction following a myocardial infarction (post-MI LVD). In 2002, Teva filed an abbreviated new drug application (ANDA) for US Food and Drug Administration (FDA) approval of its generic carvedilol for all three indications. At that time, GSK’s patent on the carvedilol compound was still in force; Teva certified that it would not launch its product until the patent expired in 2007. GSK also had a second patent on a method of treating CHF using carvedilol and a second agent. In 2002, Teva sent GSK a Paragraph IV notice contending that the claims of that patent were invalid over prior art. Rather than sue Teva, GSK applied for reissue of the patent. In 2004, Teva received FDA “tentative approval” for its ANDA “for the treatment of heart failure and hypertension,” which was to become effective at the expiry of the compound patent in 2007.

In January 2008, the method-of-use patent reissued with claims directed to a method of decreasing mortality caused by CHF by administering carvedilol with at least one other therapeutic agent. Just before its launch in 2007, Teva certified to the FDA that its label would not include the indication listed in the Orange Book as covered by the original method-of-use patent (i.e., “decreasing mortality caused by congestive heart failure”), and thus included only the hypertension and post-MI LVD indications. Teva’s press releases stated that its generic carvedilol was “indicated for treatment of heart failure and hypertension.” In 2011, the FDA asked Teva to revise its labeling to be identical with GSK’s. Teva obliged (listing again the CHF indication) and took the position that it did not need to provide certification for the reissued patent because it received final approval of its ANDA before the patent reissued. GSK sued.

GSK won a jury verdict that the challenged patents had not been shown to be invalid and that Teva was liable for induced infringement. At trial, GSK contended—and the jury heard evidence—that post-MI LVD is a form (and fell within the Court’s construction) of CHF such that Teva’s attempted skinny label nonetheless encouraged doctors to engage in a patented use. After trial, however, the district court granted JMOL of non-infringement because the CHF and post-MI LVD indications were different. On appeal, the Federal Circuit found that substantial evidence supported the implied jury, finding that post-MI LVD is a form of CHF such that the label with the post-MI LVD indication induced infringement of the reissued [...]

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Tax Court Allows Partial Deduction, Requires Partial Capitalization of Generic Drug Approval Legal Expenses

The US Tax Court determined that a pharmaceutical manufacturer’s legal expenses incurred to defend against a patent infringement suit were eligible for an immediate deduction as ordinary and necessary business expenses, while legal expenses incurred as part of an abbreviated new drug application (ANDA) were not eligible for an immediate deduction and thus had to be capitalized and then amortized over 15 years. Mylan, Inc. & Subsidiaries v. Commissioner, 156 T.C. No. 10 (Apr. 27, 2021) (Urda, J.)

The ANDA process allows for faster approval of a generic drug if the manufacturer can show that the generic drug is sufficiently similar to an approved brand name drug. As part of the ANDA process, the generic manufacturer must file statements certifying that the generic drug does not infringe any brand drug patents, or that such patents are invalid. The generic manufacturer also must send a notification to the holder of any patents covered by the certification statements.

Mylan filed several ANDAs for generic versions of brand name drugs, including Celebrex, Lunesta and Nexium, during the tax years at issue in the case. Considerable legal expenses were incurred as part of filing the ANDAs and making the required certifications and notifications. As a result of those certifications and notifications, patent holders brought approximately 120 patent infringement suits against Mylan. Mylan defended itself against the infringement suits, incurring litigation expenses.

In general, taxpayers may take an immediate deduction for ordinary and necessary business expenses. However, taxpayers must capitalize expenditures that create or enhance a distinct asset or otherwise generate benefits for taxpayers beyond a single tax year. Special rules apply to determine whether expenses related to an intangible asset should be capitalized. The income tax regulations provide that a “taxpayer must capitalize amounts paid to a governmental agency to obtain, renew, renegotiate, or upgrade its rights under a trademark, trade name, copyright, license, permit, franchise, or other similar right granted by that governmental agency.” Taxpayers must also capitalize an amount paid to facilitate an acquisition or creation of an intangible.

Litigation expenses for patent suits may be deducted or must be capitalized depending on the nature of the litigation. Defense of title claims are treated as the acquisition or disposition of a capital asset and must be capitalized. In contrast, patent infringement claims arise in tort and can be deducted in the year the expense is incurred.

Applying these rules to Mylan’s legal expenses, the Tax Court held that expenses related to the preparation of the ANDA, including the certifications and notices, were capital expenses to acquire or create an intangible asset and had to be recovered incrementally over 15 years. However, the Tax Court held that the costs of defending against patent infringement suits is an ordinary and necessary business expense for a generic drug manufacturer and permitted Mylan to deduct its litigation expenses in the year the expense was incurred.




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