AstraZeneca UK Ltd. v. Aurobindo Pharma Ltd.

Case Name: AstraZeneca UK Ltd. v. Aurobindo Pharma Ltd., et al., Civ. Nos. 2010-1460, 2010-1461, 2010-1462, 2010-1463, 2010-1464, 2010-1465, 2010-1466, 2010-1467, 2010-1468, 2010-1469, 2010-1470, 2010-1471, 2010-1472, 2010-1473, 2012 U.S. App. LEXIS 25694 (Fed. Cir. Dec. 14, 2012) (Circuit Judges Newman, Mayer, and Plager presiding; Opinion by Newman, Concurrence by Plager, Dissent by Mayer) (Appeal from D. Del., Farnan, Jr., J.)

Drug Product and Patent(s)-in-Suit: Crestor® (rosuvastatin); U.S. Pat. No. RE 37,314 (“the ’324 patent”) 

Nature of the Case and Issue(s) Presented: The Federal Circuit first addressed claims of invalidity on the basis of obviousness and inequitable conduct during the prosecution of the ’314 patent application. As to the inequitable conduct claim, the issue was whether the alleged error that supported the reissue application occurred with deceptive intent. Finally the court addressed whether a subsidiary of one of the defendants, Apotex Corp., was a “submitter” of an ANDA under the Hatch-Waxman Act where the subsidiary signed and filed the ANDA on behalf of Apotex Corp. and was likely to be a beneficiary of the ANDA.

Crestor was approved for use in controlling cholesterol and for treatment of atherosclerosis. The active ingredient of Crestor is rosuvastatin. In response to several ANDA filings and Paragraph IV notices against the ‘314 patent, AstraZeneca filed suits alleging infringement of the ‘314 patent against Aurobindo Pharma Ltd., Mylan Pharmaceuticals Inc., Apotex Corp., Cobalt Pharmaceuticals Inc. and Cobalt Laboratories Inc., Sun Pharmaceutical Industries, Ltd., Teva Pharmaceuticals USA, Inc., Par Pharmaceuticals, Inc., and Sandoz, Inc (collectively “defendants”). The suits were consolidated before the Delaware District Court. Defendants argued that the ’314 patent was invalid as obvious, that the patent was improperly reissued, and that the patent is unenforceable for inequitable conduct. The district court found that the ’314 patent was valid, enforceable, and infringed. The defendants all stipulated to infringement, with the lone exception of defendant Apotex Corp. All of the defendants appealed the rulings of validity and enforceability.  The Federal Circuit affirmed.        

Why AstraZeneca Prevailed:  The Federal Circuit first addressed defendants’ argument that the ’314 patent was invalid as obvious. In support of their argument, the defendants identified a prior art reference known as Sandoz Compound 1b. Although this compound differed structurally from rosuvastatin, the defendants claimed that it would have served as a suitable lead compound for further research. AstraZeneca countered by arguing that other compounds described in the same reference that disclosed Sandoz Compound 1b demonstrated greater in vitro potency. Further, AstraZeneca cited the fact that at the time of invention, there was a high degree of uncertainty associated with statin development. In fact, at least five pharmaceutical companies had abandoned their research in relation to pyrrole-based statins. The Federal Circuit found that the district court had applied the correct standard, and that the defendants failed to demonstrate by clear and convincing evidence that the compound was obvious. The court specifically was persuaded by the fact that the prior art taught away from the claimed invention, and that other companies had abandoned their attempts to develop similar compounds.

The Federal Circuit next addressed defendants’ inequitable conduct argument.  The district court found that while the inventors made deliberate decisions to withhold material references from the U.S. Patent Office during the prosecution of the application that ultimately lead to the issuance of the patent-in-suit, the defendants failed to establish that the omissions occurred with requisite deceptive intent. The Federal Circuit noted that there had been substantial evidence before the district court, including testimony from two employees accused of inequitable conduct. The Federal Circuit reaffirmed that although deceptive intent may be inferred from circumstantial evidence under Therasense, the inference must be the single most reasonable inference one could draw from the evidence. The Federal Circuit refused to revisit the district court’s finding that deceptive intent was not the single most reasonable inference. Instead of deceptive intent, the Federal Circuit agreed with the district court that AstraZeneca provided adequate evidence that the omissions were due primarily to a combination of factors. Some factors included the fact that the Shionogi patent department had a heavy work load and was understaffed, that employee oversight was the result of confusion and error, and that at least one employee’s inexperience and unfamiliarity with the patent examination process led to his failure to disclose the documents at issue.

The Federal Circuit then addressed defendants’ contention that Shionogi deliberately presented a claim in the original patent application that overlapped the products described in a prior art reference in order to gain greater patent protection. The district court found that the inventors did not intentionally create the error, citing, among other evidence, confusion, limited personnel, inexperience and lack of legal training among the inventors. In affirming the district court, the Federal Circuit, notably, rejected the defendants’ argument that deceptive intent in the reissue statute requires a less rigorous standard of proof than deceptive intent in relation to inequitable conduct. The Federal Circuit also looked favorably upon the fact that the reissue application was promptly filed upon discovery of the error.

Finally, the Federal Circuit considered defendant Apotex Corp.’s argument that it could not be an infringer because it was not an ANDA “submitter” as the term was understood under the Hatch-Waxman Act. Apotex argued that it did not “submit” the ANDA within the meaning of Section 271(e)(2)(A) of the Act because it only signed and filed the ANDA on behalf of its Canadian affiliate, and therefore it did not infringe. Apotex claimed that the parent-subsidiary relationship, agency principles or intent to benefit from an ANDA were not factors to be considered in determining whether an entity was a “submitter” under the Hatch-Waxman Act. The Federal Circuit held that the district court was correct in finding that Apotex was properly named as a defendant, and affirmed the judgment of infringement. The Federal Circuit noted that lower courts have applied liability to the ANDA “submitter” who signs the ANDA and intends to directly benefit from the ANDA. In this case, it was clear that Apotex intended to sell the drug within the U.S.

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