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Fresenius Kabi USA, LLC v. Fera Pharms., LLC

Case Name: Fresenius Kabi USA, LLC v. Fera Pharms., LLC, No. 15-cv-3654 (KM)(MAH), 2016 U.S. Dist. LEXIS 128126 (D.N.J. Sept. 20, 2016) (McNulty, J.) 

Drug Product and Patent(s)-in-Suit: Levothyroxine Sodium for Injection; U.S. Patent No. 9,006,289 (“the ’289 patent”)

Nature of the Case and Issue(s) Presented: The issue here was whether to award plaintiff a preliminary injunction barring infringement of the ’289 patent. The ’289 patent relates to levothyroxine, a hormone produced by the thyroid. The patent claims a form of lyophilized (freeze-dried) levothyroxine. The claims combine levothyroxine, a buffer and a specific amount of mannitol, a bulking agent. According to the patent, using a lower amount of mannitol than found in grandfathered versions of levothyroxine unexpectedly increases the formulation’s stability. After considering the four-factor test for awarding preliminary injunctive relief—likelihood of success on the merits, irreparable harm, the balance of the equities and the public interest—the court ordered the injunction.

Why Fresenius prevailed: Fera believed it would win on the merits based on its non-infringement, double-patenting, anticipation and on-sale bar, obviousness and inequitable conduct/unclean hands arguments. The court first addressed Fera’s non-infringement argument. The asserted claims require a buffer. Fera argued that a buffer must be a liquid, and accordingly argued that its generic product did not infringe. The court’s construction of buffer, however, did not support this argument. Next, Fresenius overcame the double-patenting challenge by filing a terminal disclaimer for the ’289 patent.

Then, before reaching Fera’s anticipation and on-sale bar argument, the court reviewed the standard for showing likelihood of success. It identified two lines of cases, and expressed frustration at not knowing which to apply. (“As a district judge, I am ill-equipped to enforce the internal operating procedures of the Federal Circuit, or to decide which of its precedents to give priority.”) The Amazon “vulnerability” standard favors the accused infringer, and the Titan Tire “substantial question” standard favors the patentee. Under the Amazon standard, if the accused infringer shows a patent’s vulnerability by raising “a substantial question concerning either infringement or validity,” the preliminary injunction is denied. Genentech, Inc. v. Novo Nordisk A/ S, 108 F.3d 1361, 1364 (Fed. Cir. 1997). Under the Titan Tire standard, “a trial court should consider both the evidence of invalidity and the patentee's rebuttal evidence.” Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372 (Fed. Cir. 2009). A grandfathered levothyroxine formulation, introduced in 1969, formed the basis of Fera’s anticipation and on-sale bar argument. Fera argued that simply dividing the grandfathered formulation into two equal parts would produce two samples that anticipated the claims at issue by reducing the amount of mannitol to the value within the claims of the ’289 patent. The court said, though, that the various doses of the grandfathered product all held the amount of mannitol constant, at a high level, even as the dose of levothyroxine was changed. Using the Titan Tire standard, then, the court decided in favor of the patentee. It said that if it used the Amazon standard, it was a closer question, but even then the court concluded that Fresenius had demonstrated a likelihood of success. Fera’s obviousness argument failed similarly, as the court concluded that Fera had not shown that a skilled artisan would change the amount of mannitol in the prior-art grandfathered product.

Fera’s inequitable conduct/unclean hands argument alleged that the patent applicant intentionally withheld information about the prior-art product’s stability, or at least misled the examiner about its stability. The court examined the patent’s file history, determined that the examiner demonstrated a good understanding of the issues involved, and concluded that Fera had not raised a substantial question about enforceability. The court did note that Fera’s position was possibly weakened because it had not taken the depositions of those involved with the patent’s prosecution. On the other hand, the court said that under the Amazon standard it would have rejected the inequitable-conduct challenge with more ease.

After reviewing the other three factors, the court granted Fresenius’ motion for a preliminary injunction. It determined that the irreparable harm factor favored Fresenius, and discounted the presence of a new competitor in the market, Par Sterile Products, LLC. The court noted that Par was “not precisely a third-party entrant,” as it was operating under a license from Fresenius. The court found that the balance of harms did not favor Fera. It also found that making generic drugs cheaper was not in the public interest when there was a valid patent covering the generic—outweighing the benefit of lower prices is the concomitant failure to encourage innovation.

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