Helsinn Healthcare, S.A. v. Dr. Reddy’s Labs. Ltd.

Case Name: Helsinn Healthcare, S.A. v. Dr. Reddy’s Labs. Ltd., Civ. No. 11-3962 (MLC), 2016 U.S. Dist. LEXIS 27477 (D.N.J. Mar. 3, 2016) (Cooper, J.)

Drug Product and Patent(s)-in-Suit: Aloxi® (palonosetron); U.S. Patents Nos. 7,947,724 (“the ’724 patent”), 7,947,725 (“the ’725 patent”), 7,960,424 (“the ’424 patent”), and 8,598,219 (“the ’219 patent”)

Nature of the Case and Issue(s) Presented: Teva argued that the asserted claims of each of the four patents-in-suit were invalid (i) as obvious and (ii) under the on-sale bar provision of 35 U.S.C. § 102; and (iii) for not meeting the written-description requirement under 35 U.S.C. § 112. Concerning non-infringement, Teva also filed one consolidated ANDA, seeking approval for products at two different dose levels (0.25 mg and 0.075 mg), and for two different treatment indications :chemotherapy-induced nausea and vomiting (“CINV”) for the 0.25 mg dose, and post-operative nausea and vomiting (“PONV”) for the 0.075 mg dose. The concentration of both proposed Teva products is 0.05 mg/ml, because the 0.25 mg dose solution is 5 ml and the 0.075 mg dose solution is 1.5 ml. The asserted ’219 patent claims specify only a 0.25 mg dose, in a 5 ml volume (i.e., concentration 0.05 mg/ml), for CINV. Plaintiffs argued that if the ’219 patent claims were held valid, those claims would be infringed by Teva’s ANDA product.

The court had previously made certain findings of facts and conclusions of law related to the above-mentioned arguments. This supplemental opinion comprised the court’s findings and conclusions on the issues of the on-sale bar under 35 U.S.C. § 102, written description under 35 U.S.C. § 112, and infringement under 35 U.S.C. § 271. The court concluded that Teva did not prove that the ’724, ’725, and ’424 patents were invalid under the pre-AIA on-sale bar; Teva did not prove that the ’219 patent was invalid under the post-AIA on-sale bar; Teva did not prove that the specification of the ’219 patent failed to provide adequate written description under 35 U.S.C. § 112(a), The court further found that Teva’s ANDA infringed the patents-in-suit, with the exception of the 0.075 mg dose  and the ’219 patent.

Why Plaintiffs Prevailed: The court first addressed the issue of AIA on-sale bar with respect to the ’219 patent. Plaintiffs argued that the ’219 patent is subject to the AIA, and that the AIA established a new standard for the on-sale bar, i.e., that commercial sales or offers for sale of the invention must now be made available to the public for the on-sale bar to apply. Plaintiffs argued that its contracts with service providers and its licensing and supply agreements with third parties were not commercial sales or offers for sale, or, in the alternative, that even if those contracts were deemed commercial sales or offers for sale, the post-AIA on-sale bar applicable to the ’219 patent did not apply here because the contracts never made the invention available to the public. In response, Teva argued that the AIA did not amend the on-sale bar to include a public-sale requirement. Teva argued that under the correct interpretation of the AIA, Helsinn violated the on-sale bar by executing a supply agreement for the marketing and sale of Aloxi with a third party. Teva additionally argued that Helsinn violated the on-sale bar even under Helsinn’s proposed interpretation of the AIA, as the supply agreement was publicized and the party to that agreement is a member of the public. After considering the statutory language, the PTO’s guidelines, the AIA Committee Report, and public policy considerations, the court found that that § 102(a)(1) requires a public sale or offer for sale of the claimed invention. “The new requirement that the on-sale bar apply to public sales comports with … Congress’s overarching goal to modernize and streamline the United States patent system.”

The court next found that for purposes of the pre-AIA on-sale bar, Plaintiffs’ supply agreement constituted a sale because it was a contract for a future commercial product. The fact that the clearly-described “products” had not yet received FDA approval at the time of the contracting was of no moment. With regard to its manufacturing contracts, there was no dispute that Helsinn entered into binding contracts for the manufacture of developmental batches of palonosetron, including “commercial scale” batches to satisfy NDA requirements. But the court found that nothing in those agreements suggested the contracts contemplated a commercial sale of any of those batches. Many pharmaceutical companies relied on the outsourcing of developmental batch manufacturing before the commencement of clinical trials. While the on-sale bar is intended to prevent the commercial exploitation of a patent prior to its critical date, the court did not see how Helsinn’s supply agreements for developmental batches could reasonably be considered commercial exploitation when, particularly in the pharmaceutical field, the developmental batches are critical to pre-commercialization steps, like clinical trials, formulation development, and manufacturing-quality requirements. Thus, the court found that Helsinn’s manufacturing agreements did not constitute sales under the pre-AIA on-sale bar.

Then the court addressed Teva’s written-description argument. Teva argued that if the court found that Phase III data would be required as claim support in order for the ’219 patent to be “ready for patenting” under the on-sale bar, then that patent is invalid for lack of written description because there are no Phase III data, or any preclinical or clinical efficacy data, in the specification. Helsinn countered that the ’219 patent specification did satisfy the written-description requirement because it described the claimed inventions, both as to formula and as to efficacy. Helsinn also argued that the on-sale-bar “ready for patenting” prong is measured on the date one year prior to the patent application filing date, whereas written description includes that intervening year and what a POSA would know from publicly available data as of the application date. The court found that the specification of the ’219 patent provided an adequate written description of the efficacy of the invention claimed by disclosing the claimed formulations. The court also found that a POSA “would immediately discern the claimed formulation in that disclosure.” Moreover, actual data from the clinical study were publicized by Helsinn at a conference in June 2002.

With respect to infringement, Teva conceded that its 0.25 mg/5 ml CINV dosage strength product would infringe the ’219 patent. Plaintiffs analogized this case to Sunovion in that both applicants’ ANDAs specified an infringing product, but argued that this case differed in that Teva’s ANDA specification also defined another product: the 0.075 mg/1.5 mL product. The asserted patent claims “require a formulation that includes palonosetron hydrochloride in an amount of 0.25 mg based on the weight of its free base.” Teva asserted, and the court found, that “[a]s a matter of law, 0.075 mg cannot be equivalent to 0.25 mg.” Moreover, Teva argued, and the court found, that the asserted patent claims require a formulation that has a 5 ml sterile aqueous isotonic solution, whereas Teva’s 0.075 mg/1.5 ml product has a solution volume of only 1.5 ml.

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