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Horizon Pharma Ireland Ltd. v. Actavis Labs., UT, Inc.

Case Name: Horizon Pharma Ireland Ltd. v. Actavis Labs., UT, Inc., Civ. No. 14-7992 (NLH/AMD), 2016 U.S. Dist. LEXIS 109068 (D.N.J. Aug. 17, 2016) (Hillman, J.)

Drug Product and Patent(s)-in-Suit: Pennsaid® (diclofenac sodium); U.S. Patents Nos. 8,252,838 (“the ’838 patent”), 8,563,613 (“the ’613 patent”), 8,871,809 (“the ’809 patent”), 9,066,913 (“the ’913 patent”), 9,101,591 (“the ’591 patent”), 8,546,450 (“the ’450 patent”), 8,217,078 (“the ’078 patent”), 8,618,164 (“the ’164 patent”) and 9,132,110 (“the ’110 patent”).

Nature of the Case and Issue(s) Presented: This case addressed the issue of claim construction in the patents-in-suit, which purportedly covered Pennsaid, the first FDA-approved twice-daily topical diclofenac sodium formulation for the treatment of the pain of osteoarthritis of the knees. Of the nine patents-in-suit, five patents—the ’838, ’613, ’809, ’913 and ’591 patents—were part of “the ’838 patent family” and shared an identical specification. All of the disputed terms for the court to construe were contained within the ’838 patent family.

The first proposed term for construction was “the topical formulation produces less than 0.1% impurity A after 6 months at 25°C and 60% humidity.” Horizon proposed a construction that equated “impurity A” with USP Diclofenac Related Compound A RS (“USP Compound A”). Horizon argued that a person of ordinary skill in the art (“POSA”) would know that “impurity A” would refer to USP Compound A. Actavis argued that the language of the specification and absence of testing information within the specification made the identity of “impurity A” impossible to know.

The second proposed term for construction was “the formulation degrades by less than 1% over 6 months.” In its proposed construction, Horizon sought to explain storage conditions by relying on Example 6 of the specification and explain what it means if something “degrades”, by using “impurity A” from Example 6. Actavis argued that Horizon’s approach was improperly importing limitations from the specification into the claims, and that even if this were permissible, the specification provided multiple methods of storage without specifying when one was proper, thereby making the term indefinite.

The third proposed term for construction was “consisting essentially of.” The major dispute between the parties was whether the Nautilus standard applied. Horizon argued that because Nautilus applies only to the bounds of claims it should not be read so broadly as to apply to the basic and novel properties in construing “consisting essentially of.” Actavis countered that because the basic and novel properties were part of defining the scope of the claim, Nautilus should apply to them as well.

The court found all of the proposed terms for construction indefinite.

Why Actavis prevailed: There is no reference in the specification to USP Compound A. The only identity information provided for “impurity A” in the specification were retention times derived from a HPLC characterization. But the specification only says “the samples were tested for impurities by [HPLC]”, without providing any additional information about the conditions under which the HPLC experiment were undertaken. Actavis’ expert explained that the disclosure was insufficient for a POSA to replicate and understand the HPLC results to identify “impurity A.” Horizon’s expert contended that the HPLC experiment was carried out using a pharmacopoeia chromatographic system, but the specification did not support that position. The court held that the identity of “impurity A” is unknowable to a reasonable certainty to a POSA; therefore, it is indefinite.

Having already concluded that “impurity A” is indefinite, the second proposed term for construction must also be indefinite because no other explanation for how to identify the means of degradation was provided.

Finally, the court found that the term “consisting essentially of” normally meant that the invention necessarily included the listed ingredients and was open to unlisted ingredients that did not materially affect the basic and novel properties of the invention. But when the “basic and novel properties” themselves were in dispute, courts had construed the term in order to define the “basic and novel properties” to delineate what must be shown for the purposes of infringement or invalidity. Whether the Supreme Court’s indefiniteness standard as defined in its Nautilus decision applied to the determination of the “basic and novel properties” was an issue of first impression. The court held that a court’s assessment of the basic and novel properties may be performed at the claim construction phase because under certain circumstances the basic and novel properties of an invention were part of the construction of a claim containing the phrase “consisting essentially of.” Because the basic and novel properties of an invention were part of the construction of a claim containing the phrase “consisting essentially of,” the Nautilus standard applied to the assessment of an invention’s basic and novel properties. The basic and novel properties of the claimed invention were: (i) better drying time; (ii) higher viscosity; (iii) increased transdermal flux; (iv) greater pharmacokinetic absorption; and (v) favorable stability. Actavis argued that those terms are too imprecise to be definite. As an example, Actavis (and the court) focused on the first property: better drying time. The specification described two different methods for evaluating “better drying time,” and the two methods did not provide consistent results at consistent times. Further, the claimed results were not seen across all formulations of the claimed invention, and when “dryness” was evaluated at any time shorter than four hours, not all formulations of the claimed invention actually exhibited “better drying time.” Therefore, a POSA would not know under what standard to evaluate the drying rate of the claimed invention. The result is that the “better drying rate” basic and novel property was indefinite. And once one of them was indefinite, they all become problematic.

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