United States: Combination Is Not Obvious To Try Based On Later-Manifest Unexpected Benefits

In Sanofi-Aventis Deutschland GmbH v. Glenmark Pharmaceuticals Inc., USA, No. 12-1489 (Fed. Cir. Apr. 21, 2014), the Federal Circuit, holding that it had appellate jurisdiction, affirmed the district court's rulings and judgment that the asserted patent was not invalid as obvious, that the jury instruction regarding evidence spoliation was not prejudicial, and that certain coplaintiff companies had standing.

The Court then remanded for an accounting of any postverdict damages.

U.S. Patent No. 5,721,244 ("the '244 patent") is directed to antihypertension drugs that utilize a combination of two active ingredients in a single dosage product:  an angiotensin converting enzyme ("ACE") inhibitor and a calcium channel blocker.  Claim 3 of the '244 patent claims the ACE inhibitors trandolapril and quinapril, both of which are "double-ring" compounds, as opposed to the "single-ring" compounds combined with calcium channel blockers in the prior art.  

Sanofi-Aventis Deutschland GmbH, Aventis Pharma S.A., Abbott GmbH, Abbott Laboratories, and Abbott Laboratories Inc. (collectively "Plaintiffs") own or exclusively license the '244 patent, which covers the antihypertension drug Tarka®.  Tarka® is a combination of trandolapril and the calcium channel blocker verapamil hydrochloride, and is longer lasting than previously known treatments with significant advantages, including improved kidney function and blood vessel structure.  Plaintiffs sued Glenmark Pharmaceuticals Inc. and Glenmark Pharmaceuticals Ltd. (collectively "Glenmark") after Glenmark filed an ANDA with the FDA, seeking to market a generic version of Tarka®.  Glenmark admitted infringement, and after the thirty-month stay under 21 U.S.C. § 355(j)(5)(B)(iii) expired and Glenmark launched its generic version of Tarka® "at-risk," a jury found that the '244 patent had not been proved invalid and awarded damages.  Slip op. at 3.  The district court denied posttrial motions and entered judgment on the verdict, retaining authority to assess postverdict damages if the Federal Circuit sustained the judgment.  Glenmark appealed.

"As illustrated in In re O'Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988), it would not be 'obvious to try' when 'the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful.'"  Slip op. at 9.

On appeal, the Federal Circuit first held that the Court had appellate jurisdiction even though the district court retained authority to award postjudgment damages and did not issue a document entitled "final judgment."  Id. at 4.  Relying on 28 U.S.C. § 1292(c)(2), which assigns the Federal Circuit appellate jurisdiction of patent infringement actions if the judgment is "final except for an accounting," the Court reiterated that "'an accounting' includes the determination of damages."  Id.  The Court also held that the wording of the Order closing the case did not negate the finality of the judgment, as "[n]o 'magic words' are needed to confer final judgment."  Id. at 5.

The Court then considered the jury's verdict that claim 3 of the '244 patent was not invalid as obvious.  The Court rejected Glenmark's argument that claim 3 was invalid as a matter of law because the prior art tested single-ring ACE inhibitors in combination with calcium channel blockers, and, thus, "it was 'obvious to try' every combination of effective ACE inhibitor and calcium channel blocker," including double-ring ACE inhibitors.  Id. at 8.  Citing KSR International Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007), the Court explained that "obvious to try" may apply when there are a finite number of identified, predictable solutions to a known problem, and that "the identified path must 'present a finite (and small in the context of the art) number of options easily traversed to show obviousness.'"  Slip op. at 9 (quoting Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358, 1364 (Fed. Cir. 2008)).  The Court also rejected Glenmark's argument that later-discovered benefits cannot be considered in the obviousness analysis, holding that "patentability may consider all of the characteristics possessed by the claimed invention, whenever those characteristics become manifest."  Id. at 10.  Distinguishing the cases cited by Glenmark—Merck & Co. v. Biocraft Laboratories, Inc., 874 F.2d 804 (Fed. Cir. 1989), and Richardson-Vicks Inc. v. Upjohn Co., 122 F.3d 1476 (Fed. Cir. 1997)—the Court observed that, in both cases, the drug combinations were without unexpected results and deemed obvious to try in conformity with the Supreme Court's explication in KSR

Turning to the facts of this case, the Court concluded that the jury could reasonably have relied on the testimony of the Plaintiffs' expert that persons skilled in the art at the time of the invention would not have predicted the longer-lasting hypertension control demonstrated by the double-ring ACE inhibitors quinapril and trandolapril because of the widespread belief that double-ring inhibitors would not fit into the pocket structure of ACE.  The Court thus affirmed the judgment that claim 3 was invalid as obvious.

The Federal Circuit next held that Glenmark was not entitled to a new trial based on the district court's jury instruction that the jury may draw an adverse inference that electronic documents deleted by Glenmark would have been unfavorable to Glenmark.  The Court noted that it was undisputed that Glenmark did not retain emails for longer than one month in 2005 and 2006, and that this policy continued as Glenmark prepared for litigation related to its generic product, as evidenced by work-product entries on its privilege log.  Applying the Third Circuit's four-factor test for spoliation, the Court agreed that "[i]t was reasonable for the district court to infer that some destroyed emails related to issues for which litigation was expected by Glenmark," and that Glenmark did not negate this reasonable inference.  Slip op. at 14.  According to the Court, "[t]he courts are not required to tolerate acts in derogation of the integrity of judicial process," and, thus, the adverse jury instruction was well within the district court's discretion.  Id. at 15.

Finally, the Federal Circuit held that Abbott Laboratories and Abbott Laboratories, Inc. ("ALI") had standing as coplaintiffs to recover damages due to infringement.  The Court first noted that it was undisputed that Sanofi-Aventis, as the owner by assignment of the '244 patent, and Aventis Pharma, as exclusive licensee, had standing; that Aventis Pharma in turn granted an exclusive license to Abbott GmbH; that Abbott Laboratories had owned the FDA-approved NDA for Tarka® since 2001; and that ALI was the exclusive U.S. distributor for Abbott Laboratories.  The Court then rejected Glenmark's assertions that since Abbott Laboratories acquired the NDA in 2001, before Abbott GmbH's exclusive license in 2004, the NDA could not support a finding of express or implied exclusive rights and that a 2010 "Confirmatory Agreement" was void for lack of consideration.  Rather, the Court concluded that the evidence as a whole was sufficient to support a finding that "the Plaintiffs intended that the Abbott United States companies have exclusive rights in the United States under the '244 patent."  Id. at 18.

Accordingly, the Court affirmed the rulings and judgment of the district court, and remanded for the reserved accounting for any postverdict damages.

Judges:  Newman (author), Linn, Wallach

[Appealed from D.N.J., Judge Cavanaugh]

This article previously appeared in Last Month at the Federal Circuit, May 2014.

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.

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