United States: Federal Circuit Upholds Inequitable Conduct Defense Against Apotex Patent

In Apotex Inc. v. UCB, Inc., the Federal Circuit upheld the district court's finding that Apotex's patent is unenforceable due to inequitable conduct. While affirming on the ground of "but-for materiality," the Federal Circuit noted that the inventor's conduct "at a minimum, come[s] close to the type of affirmative misconduct" that can "justify finding inequitable conduct without showing but-for materiality." This case also serves as a reminder that the USPTO still has not acted on its proposal to align Rule 56 with Therasense.

The Patent at Issue

The patent at issue was U.S. 6,767,556, directed to a method of making tablets of moexipril, which is an ACE inhibitor used to treat hypertension. Dr. Sherman is the sole inventor named on the '556 patent, the founder and chairman of Apotex, and "directs all litigation for Apotex."

Claim 1 is the only independent claim in the patent:

1. A process of making a solid pharmaceutical composition comprising moexipril magnesium, said process comprising the step of reacting moexipril or an acid addition salt thereof with an alkaline magnesium compound in a controlled manner in the presence of a sufficient amount of solvent for a predetermined amount of time so as to convert greater than 80% of the moexipril or moexipril acid addition salt to moexipril magnesium.

According to the Federal Circuit decision, moexipril is "susceptible to degradation and instability." The '556 patent addresses this problem by "making moexipril tablets consisting mostly of moexipril magnesium obtained by reacting moexipril or its acid addition salts with an alkaline magnesium compound." According to the patent, "the reaction cannot be accomplished in dry form and must be carried out in the presence of a solvent," using "wet granulation" methodology that "has been known in the pharmaceutical industry since at least the 1980s."

The Accused Products and Prior Art

The accused products were UCB's Univasc® and Uniretic® products, which were prior art to the '556 patent. Other prior art included U.S. Patent 4,743,450 which was listed in the Orange Book for the UCB products and which discloses a process that "involves the wet granulation of moexipril hydrochloride and magnesium oxide." The '450 patent cited a 1990 article by Gu et al. that discussed the mechanism by which alkaline stabilization of moexipril might occur.

The Prosecution History

The '556 patent and prosecution history distinguished the prior art by asserting that the prior art taught the use of an alkaline compound stabilizer in the final, solid product, while the claimed methods taught reacting moexipril with an alkaline magnesium compound to form moexipril magnesium.

For example, the '556 patent characterizes the '450 patent as teaching a stabilized solid product that includes an alkaline compound as stabilizer, and characterizes Gu as being "consistent with" the '450 patent and teaching "that only a portion (if any) of the drug, and only that portion at the outer surface of the granules, may be converted to the alkaline salt, and that the stable product thus results entirely or primarily not from conversion to alkaline salts, but from stabilization of the moexipril hydrochloride by the presence of the alkaline stabilizing compound in the final product."

The applicant asserted and emphasized these alleged differences throughout prosecution. For example, in one response the applicant argued:

The Examiner alleges that Gu et al. renders obvious the process of making moexipril magnesium and that Gu discloses a process of making a moexipril alkaline salt by allegedly reacting moexipril hydrochloride with an alkaline stabilizing agent. Respectfully no such reaction is taught. The components are merely combined and any reaction is insignificant to the desired end result.

The applicant submitted an expert Declaration attesting that a "stabilizer" (as taught in the '450 patent) would have to be unreacted to perform its intended function. Thus, a person of ordinary skill in the art "would ... not expect a reaction to occur between the ACE inhibitor and the alkaline stabilizer disclosed in the '450 patent."

The Examiner's Reasons for Allowance indicate that the patent was allowed on the basis of that alleged distinction:

The primary reason for allowance is that the prior art does not disclose nor fairly suggest a process of making a pharmaceutical composition comprising moexipril magnesium, comprising the step of reacting moexipril or an acid addition salt thereof with an alkaline magnesium compound so as to convert greater than 80% of the moexipril or moexipril acid addition salt to moexipril magnesium. Rather, the prior art teaches that only a portion of drug (if any) may be converted to the alkaline salt and that the stable product results entirely or primarily not from conversion to alkaline salts, but from stabilization of the moexipril hydrochloride by the presence of the alkaline stabilizing compound in the final product.

The District Court Decision

The district court found that the '556 patent "is unenforceable due to Dr. Sherman's inequitable conduct." As summarized in the Federal Circuit decision, the district court found that "Dr. Sherman was aware that Univasc was made according to his claimed process, concealed this knowledge from the PTO, and misrepresented the nature of Univasc and the prior art through his counsel's arguments and Dr. Lipp's declaration," and that "Dr. Sherman withheld relevant prior art and submitted results of experiments that he never conducted."

For example, shortly after the patent application was filed, "two Apotex scientists ... produced a detailed mass spectrometry report on Univasc and concluded that moexipril in Univasc is 'mainly present' as moexipril magnesium," but that information never was disclosed to the Patent Office. On the other hand, the patent included examples written in the past tense that were "made up in [Dr. Sherman's] head."

With regard to materiality, the district court found that the misinformation and withheld information was "but-for" material and, in the alternative, that Dr. Sherman had engaged in "egregious misconduct during prosecution." With regard to intent, the district court found that "the single most reasonable inference that could be drawn from the evidence was that Dr. Sherman intended to deceive the PTO."

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Reyna and joined by Judges Wallach and Hughes. The Federal Circuit determined that "the district court's findings regarding materiality and intent were "not clearly erroneous," and its "ultimate determination ... was not an abuse of discretion."

The Federal Circuit reviewed the facts outlined above, and found that "[c]lear and convincing evidence demonstrates that Dr. Sherman engaged in material misconduct." In this regard, the court noted that "Dr. Sherman was actively involved in the prosecution of the '556 patent and instigated the representations made on his behalf by his counsel and Dr. Lipp." Thus, the finding that "Dr. Sherman is responsible for the alleged misconduct is not clearly erroneous."

The Federal Circuit found that the misconduct was "'but-for' material to the issuance of the '556 patent," as shown by the course of prosecution and the Examiner's Reasons for Allowance. As set forth above, although the Federal Circuit did not decide whether Dr. Sherman's conduct amounted to "egregious misconduct" under Therasense, the Federal Circuit noted that the inventor's conduct "at a minimum, come[s] close to the type of affirmative misconduct" that can "justify finding inequitable conduct without showing but-for materiality."

The Federal Circuit also agreed that "clear and convincing evidence establishes Dr. Sherman's intent to deceive the PTO."

As of the filing of the '556 patent application, Dr. Sherman was aware that some of the assertions he made in the specification regarding the prior art were at least misleadingly incomplete, if not plainly inaccurate. Additionally, Dr. Sherman admitted that he never performed the experiments described in the '556 patent, and yet he drafted the examples in the specification entirely in past-tense language. ... Dr. Sherman was also aware that additional misrepresentations were made on his behalf to the PTO, and directed his counsel to bolster those misrepresentations by procuring and submitting the declaration of an expert who was deliberately shielded from the truth.

Responding to Apotex's arguments that "merely advocating a particular interpretation of the prior art cannot support an inference of deceptive intent," the Federal Circuit explained that "Dr. Sherman's statements were not mere advocacy for a preferred interpretation; his statements were factual in nature and contrary to the true information he had in his possession."

Thus, the Federal Circuit upheld the district court's finding that the '556 patent is unenforceable due to inequitable conduct.

What Constitutes Inequitable Conduct?

If my "inequitable conduct" blog articles are an accurate indication, this is the third case since Therasense where the Federal Circuit has upheld a finding of inequitable conduct. (In a fourth, the Federal Circuit remanded to the district court to make findings on intent.) In all of these cases, at least some of the misconduct at issue involved affirmative statements made during prosecution, not simply the failure to submit a prior art reference. Still, the PTO has not updated Rule 56 to conform to Therasense, even though it published proposed rule changes in 2011 that would do so.

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
 
In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.