(Eli Lilly and Company v Zenith Goldline and ors (2006), CAFC 05-1396)
The Zyprexa case is a timely reminder that in IP Strategy, a simple rule of thumb, though useful, is almost always inadequate. Zyprexa underscores the point that infringement and novelty are not flip sides of the same coin.
A disclosure can infringe a claim but not necessarily invalidate it for lack of novelty. (And, if the prior disclosure were a patent claim, it can be infringed by the later patent, but not disclose sufficient subject matter to invalidate the later patent claims for lack of novelty.)
The degree of disclosure as understood by the person of ordinary skill in the art is the key.
On 26 December 2006, in a unanimous judgment in a closely monitored Hatch-Waxman contest, the US Court of Appeals for the Federal Circuit held that Eli Lilly’s Zyprexa (Olanzapine) composition of matter (or active pharmaceutical ingredient) patent (US 5,229,382),was not anticipated nor obvious in light of prior disclosures of a class of molecules with optional substituents which included Olanzapine.
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My two most recent articles were:
· Scorecard for the global Lipitor patent dispute (20 December 2006)
The human brain is particularly attracted to simple explanations and rules of thumb. Clearly they are very useful in many circumstances. However, the Zyprexa case is a timely reminder that the simple explanation is almost always inadequate.
One such rule of thumb is that in patent law, infringement and novelty are flip sides of the same coin. This is not a bad rule of thumb and has arisen because very similar steps are used to determine the construction and breadth of the claims and whether the prior art or alleged infringement falls within their scope.
The Zyprexa case demonstrates that a particular disclosure can infringe a claim but not necessarily invalidate it for lack of novelty. (And, if the prior disclosure were a patent claim, it can be infringed by the later patent, but not disclose sufficient subject matter to invalidate the later patent claims for lack of novelty.) How does this come about?
The two tests part company when determining the actual content of the disclosure of the prior art (or alleged infringement) in each case.
In Zyprexa, the prior art (the Chakrabarti article) disclosed a class of molecules with optional substituents which included Olanzapine. Consequently, to the extent that it included Olanzapine, the Chakrabarti article ‘infringed’ the US '382 patent claims. Furthermore, if the Chakrabarti article had itself been a patent claim, then it would clearly have encompassed the Olanzapine molecule which would thus have infringed the (Chakrabarti) claims.
However, since the Chakrabarti article was prior art, to invalidate the claim, it was required to provide a sufficient degree of disclosure so that the skilled addressee would be in possession of the invention (Olanzapine). It was held that this was not the case since, if one were to try every combination disclosed by the molecular diagrams in question, there would be millions of possible molecules and the Chakrabarti article favoured a class (halogenated) which excluded Olanzapine.
Lilly’s simple answer to the anticipation case was, of course, that nowhere in any of the prior art citations was the Olanzapine molecule described or depicted. This left the appellants (Zenith Goldline - now Ivax, Teva, and Dr Reddy’s) to argue that the disclosure in the prior art inherently anticipated claims to the Olanzapine molecule. The argument being that the skilled addressee would be taught the Olanzapine molecule on reading the prior art disclosure (even though it was not literally present). The test for inherent anticipation is slightly different in different jurisdictions, but basically requires that the skilled addressee would inevitably read the disclosure as teaching the required subject matter (ie 100% of the time).
Here, the CAFC held that the Chakrabarti article did not anticipate the claim as it did not put the Olanzapine molecule in the possession of the public and did not disclose each and every essential feature of Olanzapine.
Why was this case so closely monitored?
The Zyprexa Hatch-Waxman litigation is an example of generic companies filing a paragraph IV certification against a composition of matter patent. In essence, such patents are supposed to provide the strongest protection for the innovator product. If the Zyprexa patent had been invalidated, it would encouraged generic companies to use this strategy in the future and likely have a serious affect on the monopolies (and share prices) held by innovator companies. (For this reason, in a 2005 research paper, one analyst firm referred to the Zyprexa case as the ‘Z Bomb’).
Other grounds of appeal
The unanimous opinion was written by Judge Rader and also dealt with obviousness, experimental use and inequitable conduct.
Orange Book Blog commentary here.
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