United States: No Inference of Deceptive Intent Where It Is "Equally Plausible" That Patent Owner Believed Prosecution Requirements Had Been Met

In AstraZeneca v. Aurobindo, Nos. 10-1460 to -1473 (Fed. Cir. Dec. 14, 2012), the Federal Circuit affirmed the district court's decision that U.S. Reissue Patent No. 37,314 ("the '314 patent"), which is a reissue of U.S. Patent No. 5,260,440 ("the '440 patent"), is not invalid for obviousness or unenforceable for inequitable conduct.  The Court also affirmed the district court's decisions that the PTO properly reissued the '440 patent and that defendant Apotex U.S. infringed the '314 patent by submitting an ANDA for a generic version of Crestor® on behalf of Apotex Inc. ("Apotex Canada").

The '314 patent, which is directed to the statin compound known as rosuvastatin, is owned by Shionogi Seiyaku Kabushiki Kaisha ("Shionogi").  AstraZeneca UK, IPR Pharmaceuticals Inc., and Shionogi (collectively "Plaintiffs") market Crestor®, whose active ingredient is the calcium salt of rosuvastatin.  Crestor® is approved by the FDA for use in control of cholesterol and for treatment of atherosclerosis.  Several generic producers filed ANDAs to market generic versions of Crestor® before the expiration of the '314 patent, and Plaintiffs filed suit.  The district court ruled that the '314 patent is valid, enforceable, and infringed.  Eight generic producers appealed the rulings of validity and enforceability, and only Apotex U.S. appealed the ruling of infringement.

On appeal, the generic producers challenged patent validity on the ground of obviousness.  The generic producers argued that Sandoz, Inc.'s ("Sandoz") European Patent Office ("EPO") Publication No. 0 367 895 disclosed "a good 'lead compound,'" and that the change from the -CH3 substituent at the C2 position in that compound to the -SO2CH3 substituent in rosuvastatin would have been obvious in order to increase hydrophilicity.  Slip op. at 7.  In response, Plaintiffs pointed out that the Sandoz compound demonstrated unexpected increased toxicity; that publications stated that statin potency could be increased by substituents at the C2 position that are lipophilic, the converse of hydrophilic; and that statin development was unpredictable.

"Recognizing the complexity of patent prosecution, negligence—even gross negligence—is insufficient to establish deceptive intent."  Slip op. at 18.

The Federal Circuit held that the district court correctly determined that the '314 patent was not invalid for obviousness.  The Court noted the district court's conclusion that the generic producers did not demonstrate the required motivation for selecting the Sandoz compound as a lead compound, or for making the specific change to that compound.  "We agree that 'obvious to try' was negated by the general skepticism concerning pyrimidine-based statins, the fact that other pharmaceutical companies had abandoned this general structure, and the evidence that the prior art taught a preference not for hydrophilic substituents but for lipophilic substituents at the C2 position."  Id. at 10.

The Court also affirmed the district court's decision that the '314 patent was not unenforceable for inequitable conduct.  The generic producers argued that the '314 patent was unenforceable because two employees in Shionogi's in-house patent staff, Ms. Tomoko Kitamura and Mr. Takashi Shibata, did not disclose the Sandoz reference, a Bayer Japanese patent application, or an EPO search report that included the Sandoz reference to the PTO during prosecution of the original '440 patent.  The generic producers argued that the Sandoz and Bayer references were material, and that they were deliberately withheld with deceptive intent.  Plaintiffs responded that there was no intent to deceive or mislead the PTO, and that any error in prosecution of the '440 patent was unintentional and was rectified by prompt filing of the reissue application and disclosure of the references as soon as Shionogi discovered the error.

The Court noted that there was extensive evidence and argument before the district court, including the live testimony of the Shionogi personnel who were accused of acting inequitably.  It was explained that when Shionogi scientists obtained favorable results with certain compounds, including rosuvastatin, Shionogi's patent department was asked to file a patent application on their results.  Ms. Kitamura in the patent department obtained search reports related to the products, and the reports identified the Sandoz reference and the Bayer application, which described a large class of statin compounds that generically included the rosuvastatin class of substituents, but did not show the specific compounds submitted for patenting.  Ms. Kitamura testified that because there were no instances of the same compounds as Shionogi, she did not believe that the references created a patentability problem.  She then left her employment at Shionogi shortly after filing the '440 patent application, and Mr. Shibata assumed responsibility for the applications.  Mr. Shibata received an EPO search report in a counterpart application that identified the Sandoz reference as particularly relevant.  No IDS was filed for the '440 patent application, and neither the Sandoz reference nor the Bayer application was provided to the PTO or cited by the examiner.  The '440 patent later issued on November 9, 1993. 

During subsequent licensing negotiations between AstraZeneca and Shionogi, it was discovered that no IDS had been filed during prosecution of the '440 patent application.  U.S. patent counsel was consulted and Shionogi filed an application to reissue the '440 patent to submit an IDS citing the references.  Shionogi certified that it had erroneously not brought these references to the examiner's attention, and that it was through error and not due to deceptive intent.  The reissue examiner rejected the original, generic statin claim of the '440 patent based on one of the IDS references, and Shionogi responded by limiting the '440 patent to rosuvastatin and its salts.  The application was subsequently allowed and reissued as the '314 patent.

Regarding materiality, the Federal Circuit agreed with the district court that the reference compounds were sufficiently similar in structure to warrant citation, even though they did not negate the patentability of rosuvastatin.  The Federal Circuit held, however, that there was no deceptive intent.  The generic producers argued that deceptive intent should be inferred because (1) Ms. Kitamura possessed the Bayer reference at the time she filed the '440 patent application and knew she had a duty to disclose it to the PTO; (2) an internal Shionogi memorandum stated that "[d]evelopment information on S-4522 [rosuvastatin] must not be leaked to the outside because it is included in the text of the published unexamined Bayer patent application"; and (3) Mr. Shibata did not disclose the Bayer and Sandoz references to the PTO, even though, according to the generic producers, he knew about them.  Id. at 15 (alterations in original).

The Federal Circuit noted that the district court disagreed with the generic producers after receiving testimony from Mr. Shibata, Ms. Kitamura, and a third Shionogi employee, and that the district court found that "actions suggestive of malfeasance become no more than a string of mishaps, mistakes, misapprehensions and misjudgments on the part of inexperienced and overworked individuals."  Id. (citation omitted).  The Court held that "[c]lear error has not been shown in the district court's finding that deceptive intent was not shown, and was not the single most reasonable inference based on all of the evidence."  Id. at 17.  "The district court observed the witnesses under examination and cross-examination, examined the documents, and reasonably found that it was 'equally plausible' that Mr. Shibata believed the requirements of the United States patent prosecution had been met."  Id.  "Recognizing the complexity of patent prosecution, negligence—even gross negligence—is insufficient to establish deceptive intent."  Id. at 18.

Turning to the question of reissue, the Federal Circuit agreed with the district court that the PTO properly reissued the '440 patent.  The generic producers argued that the statutory reissue requirement of error without deceptive intent had not been met.  The Court disagreed, noting that the district court found no evidence of deceptive intent or a deliberate choice to omit or abandon the rosuvastatin species, which was described in the specification as the most effective product.  "The district court considered the . . . arguments directed to both error and deceptive intent, and concluded that Shionogi did not act intentionally to make the error for which it seeks reissue."  Id. at 23.

Finally, the Federal Circuit addressed Apotex U.S.'s appeal on the issue of infringement.  Apotex U.S. argued that while it signed and filed an ANDA on behalf of Apotex Canada, it did not "submit" the ANDA within the meaning of 35 U.S.C. § 271(e)(2) and thus did not infringe the '314 patent.  The Court disagreed.  The Court noted that Apotex U.S. participated in preparing the ANDA and represented that it would sell the product in the United States.  The Court concluded that the district court did not err in holding that Apotex U.S. was properly named as a defendant in the action, and affirmed the judgment of infringement against all of the generic producers.

Judge Plager concurred, writing separately "to clarify [his] understanding of why Apotex U.S. should be treated as having 'submit[ted]' an application for an ANDA, and therefore be held liable as an infringer under 35 U.S.C. § 271(e)(2)."  Plager Concurrence at 2 (second alteration in original).  Judge Plager opined that the district court's decision was supported by the statutory analysis and the evidentiary record, noting that Apotex U.S. and Apotex Canada were closely related through a complex corporate structure.  Judge Plager also stated that Apotex U.S. clearly intended to engage in, and presumably submitted the ANDA for the purpose of, selling the approved drug in the United States, and that the statute speaks in terms of engaging in the drug's use or sale.  "Under either analysis, the district court did not err in concluding that Apotex U.S. is liable for an act of infringement."  Id. at 6.

Judge Mayer dissented, stating that there can be no infringement of the '314 patent because he believed that patent is invalid for improper reissue.  According to Judge Mayer, "reissue is warranted only where a patentee 'supplies . . . facts indicating how . . . ignorance,' accident, or mistake caused an error in his claims."  Mayer Dissent at 7.  Judge Mayer stated that "the majority conflate[d] the issue of whether Shionogi was guilty of inequitable conduct with the question of whether it met the requirements for reissue under section 251."  Id. at 9.  Judge Mayer additionally stated that Shionogi forfeited its right to obtain reissue by not exercising due diligence in seeking to rectify the alleged defect.

Judges:  Newman (author), Mayer (dissenting), Plager (concurring)

[Appealed from D. Del., Judge Farnan, Jr.]

This article previously appeared in Last Month at the Federal Circuit, January 2013

Copyright © 2013 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP | All rights reserved

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
13 Nov 2018, Conference, Washington, DC, United States

Finnegan is an Event sponsor of the PTAB Bar Association Thought Leader Summit. The program will take place at the Westin Hotel in Alexandria, Virginia.

13 Nov 2018, Conference, California, United States

Finnegan is a Lunch sponsor of the fifth annual Corporate IP Strategy Conference, hosted by Unified Patents.

14 Nov 2018, Speaking Engagement, Washington, DC, United States
Similar Articles
Relevancy Powered by MondaqAI
Banner & Witcoff
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Banner & Witcoff
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions