Bausch Health Ireland Ltd. v. Padagis Israel Pharms. Ltd.

Case Name: Bausch Health Ireland Ltd. v. Padagis Israel Pharms. Ltd., Civ. No. 2:20-cv-05426-SRC-CLW (consol.), 2021 WL 4593271 (D.N.J. Oct. 6, 2021) (Waldor, J.)

Drug Product and Patent(s)-in-Suit: Bryhali® (halobetasol propionate); U.S. Patents Nos. 8,809,307 (“the ’307 patent”), 10,478,502 (“the ’502 patent”), 10,251,895 (“the ’895 patent”), and 10,426,787 (“the ’787 patent”)

Nature of Case and Issue(s) Presented: Bausch filed suit in May 2020, alleging infringement of the ’307 and ’502 patents. Bausch then file another lawsuit alleging similar allegations concerning those patents and the ’895 and ’787 patents. The two cases were consolidated and Padagis filed answers with counterclaims in response to both. In July 2018, Jeffrey Sugarman, MD, had submitted a declaration to the PTO in support of the ’895 and ’787 patents. He had claimed that the achievement of the clinical results of the invention was unexpected and very surprising, and that “the Invention unexpectedly achieved the synergistic efficacy over the combination of halobetasol proprionate and tazarotene monotherapies.” But in an article published by Dr. Sugarman the previous year, “Sugarman 2017,”he wrote:

Tazarotene has been shown to be an effective treatment for psoriasis. Use of topical tazarotene is limited by its potential irritancy. However, combining a topical corticosteroid [such as halobetasol propionate, with tazarotene] is one option that may prevent the irritancy effects of tazarotene while providing a synergistic therapeutic effect as well as a potential decrease in steroid-induced atrophy.

Sugarman 2017 (emphasis in court opinion). The aforementioned text cited to a 2001 reference. Thus, Padagis argued that by stating in 2018 that he was surprised to see the synergistic therapeutic effect that his own article demonstrated he was aware of at least one year previously, Dr. Sugarman violated the duty of candor, in turn rendering the ’895 and ’787 patents invalid and unenforceable. That was the basis for Padagis’s motion to amend its answer to include an inequitable conduct affirmative defense and counterclaim. The court granted Padagis’s motion.

Why Padagis Prevailed: Bausch raised two arguments in opposition. First, Dr. Sugarman’s statements in 2018 spoke to his surprise “at the time of the invention,” namely 2015. Sugarman 2017 was written two years later. Therefore, there was no fraud in Dr. Sugarman’s stating he was surprised in 2015, and thereafter, in 2017, writing that such effects were commonly known. The court rejected this argument on two bases. The 2018 declaration stated the Dr. Sugarman was very surprised at the results of the “clinical trials of the invention.” There is no indication in the declaration when the inventors showed the clinical trial results to Dr. Sugarman. Moreover, even if Dr. Sugarman were to have seen the results in 2015, Sugarman 2017’s reference to the 2001 article suggested that synergistic efficacy was known in the prior art as early as 2001.

Padagis also sought to amend its answer to include an inequitable conduct affirmative defense and counterclaim based on Bausch’s failure to disclose the results of a clinical study, which was publicly available, listed Bausch as the sponsor, and identified Dr. Binu Alexander (co-author of Sugarman 2017) as the central contact. According to Padagis, this study was the same study disclosed in the ’895 and ’787 patents and Sugarman 2017. Among other arguments, Bausch countered that the information disclosed in the study was disclosed in the specification of the relevant patents. But that missed the mark, according to the court, because it was not the information itself that underlay the claimed misconduct. “Instead, it is the fact that this information was available in the prior art, something that the information itself (submitted to the PTO only in the context of prior clinical trials) does not reveal.”

Finding that Padagis’s proposed amendment included the requisite who, what, when, where, and how inferences to be reasonably drawn, as well as the knowledge and intent inferences, the court granted Padagis’s motion to amend relating to the Sugarman Declaration and the clinical study.