Apotex, Inc. v. UCB, Inc., Civ.
"Egregious” misconduct on the part of the inventor—someone who is well versed in pharmaceutical formulations and the patent prosecution and enforcement processes—resulted in the Court’s finding of inequitable conduct, laches, and disclaimer.
Case Name: Apotex, Inc. v. UCB, Inc., Civ. No. 12–cv-60706, 2013 U.S. Dist. LEXIS 129057 (S.D. Fla. Sept. 6, 2013) (Middlebrooks, J.)
Drug Product and Patent(s)-in-Suit: Uniretic® (moexipril HCl / hydrochlorothiazide); U.S. Patent No. 6,767,556 (“the ‘556 patent”)
Nature of the Case and Issue(s) Presented: “This case involves an orchestrated scheme to deceptively obtain a patent with respect to a competitor’s product. It is illustrative of inventive litigation, as opposed to the scientific discovery that the patent laws were designed to promote.” Apotex alleged that UCB’s ANDA product infringes claims 8–12 of the ‘556 patent. UCB countered that it does not infringe the ‘556 patent and that the patent is invalid for the following reasons: Apotex disclaimed the Univasc process from the scope of the claims during prosecution; the ’556 patent is unenforceable due to inequitable conduct; and Apotex is barred by the laches doctrine from collecting pre-filing damages. The court ruled in favor of UCB and against Apotex.
Why UCB Prevailed: The court found that the patent was unenforceable due to inequitable conduct. In applying the Therasense standard, the court found that the single most reasonable inference to be drawn from the circumstantial evidence, (Apotex’s founder) Dr. Sherman’s overall pattern of misconduct, and his poor credibility at trial is that Dr. Sherman had the intent to deceive the USPTO in order to obtain the ’556 patent. The court found that Dr. Sherman did not invent any new process; instead, he took publicly available information for Univasc, combined it with teachings from a prior art patent, and then purposefully misled the USPTO Examiner into believing that his process was not taught by the prior art. The court relied on a memo from Dr. Sherman to his employees that stated that Dr. Sherman’s “invention” was the same process used to make a prior art product yet Dr. Sherman repeatedly told the USPTO otherwise. Dr. Sherman’s intent to deceive the USPTO was further evidenced by the fact that the examples in the patent and their results were never actually conducted or obtained. The court also found that Dr. Sherman misrepresented the contents of the prior art Gu reference during prosecution by consistently representing that Gu teaches that “only a portion (if any)” of the drug is converted to moexipril magnesium, despite the fact that Gu does not state or suggest that none of the drug is converted, among other misrepresentations. The sworn Lipp Declaration that Dr. Sherman commissioned and submitted during the prosecution also mischaracterizes the Gu reference. In addition, Dr. Sherman failed to disclose Dr. Lipp’s significant financial relationship with Apotex. Coupled with the fact that the court found that Dr. Sherman’s misrepresentations regarding Univasc (the prior art product) to the USPTO during prosecution were material to the issuance of the ’556 patent, it held that Apotex engaged in inequitable conduct. Further, the court held “that this case is one of those exceptional cases where, as discussed above, a finding of materiality is not necessary.”
As to indefiniteness, the court held that the ’556 patent is invalid as indefinite because neither it nor its file history (i) provides any guidance to a person of ordinary skill in the art on how much time, solvent, or what manner of control is sufficient to achieve or avoid the “greater than 80%” conversion threshold required by the asserted claims, and (ii) provides any objective test or measure to determine whether the “greater than 80%” conversion limitation is met.
As to disclaimer, the court found that despite repeatedly describing the claimed product as containing magnesium oxide, unreacted but combined and functioning as a stabilizer, Dr. Sherman never once mentioned that the process for determining the claimed chemical conversion was unknown to the public. The court further found that Dr. Sherman’s statements to the USPTO “to be so clear as to show reasonable clarity and deliberateness and so unmistakable as to be unambiguous evidence of disclaimer.” Thus, the court held that Dr. Sherman was describing only what the publicly available information stated and therefore disclaimed the Univasc and Uniretic process from the scope of the ‘556 patent claims.
As to the laches defense, the court first found that because Apotex filed this action nearly eight years after the ’556 patent issued, the presumption of laches applied. Next, the court held that Apotex has not presented evidence that justifies the delay or challenges the prejudice to UCB. Because Apotex could have performed “simple” tests in 2004 that would form a basis to sue at that time, combined with Dr. Sherman’s knowledge that Univasc contained moexipril magnesium, as well as the fact that Apotex provides no credible reason for its delay in testing the product or bringing the suit, Apotex’s delay was not justifiable. Moreover UCB has been materially prejudiced (economically and evidentiary) by Apotex’s delay, and Apotex has failed to introduce evidence to place the economic or evidentiary prejudice in dispute.
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