The Medicines Co. v. Hospira, Inc.

On-sale bar is not triggered by production of drug by third party, even if that drug is stockpiled and later sold.

October 25, 2016

GENERICally Speaking

Case Name: The Medicines Co. v. Hospira, Inc., 827 F.3d 1363 (Fed. Cir. July 11, 2016) 

Drug Product and Patent(s)-in-Suit: Angiomax® (bivalirudin); U.S. Patents Nos. 7,582,727 (“the ’727 patent”) and 7,598,343 (“the ’343 patent”)

Nature of the Case and Issue(s) Presented: The Medicines Co. (“TMC”) employs a third party, Ben Venue Laboratories, to manufacture its Angiomax product, used as an anticoagulant in coronary surgery. TMC’s original Angiomax formulation was subject to degradation, leading to an unacceptable amount of impurities in the product. To remedy this problem, TMC developed an improved formulation of Angiomax created using a new process, which issued as the patents-in-suit. The critical date of the patents-in-suit is July 27, 2007.

In 2006 TMC paid Ben Venue to manufacture three batches of the improved Angiomax. TMC then placed these batches into quarantine. The batches were finally made available for sale in August 2007, after the critical date of the patents-in-suit. Hospira subsequently filed an ANDA to manufacture and sell a generic bivalirudin product. In response, TMC sued Hospira for patent infringement in the District of Delaware.

After a bench trial, the court concluded that the three batches manufactured in 2006 did not trigger the on-sale bar provision of 35 U.S.C. § 102(b), and that the patents-in-suit were valid and infringed. On appeal, the Federal Circuit reversed this determination. TMC then petitioned for en banc rehearing. In the present decision, resulting from the en banc rehearing, the Federal Circuit agreed with the district court, and held that the on-sale bar did not apply in this scenario.

Why TMC Prevailed: The patents-in-suit were valid because the manufacture of the 2006 batches of Angiomax did not constitute a commercial sale of the invention, as required by section 102(b). Firstly, the Federal Circuit determined that employing Ben Venue to manufacture and provide the Angiomax back to TMC was not a sale of the patented invention. Instead, Ben Venue sold contract manufacturing services to TMC and did not trigger the 102(b) bar. Further, the Federal Circuit analogized the situation to sales in the Uniform Commercial Code. TMC did not transfer title of the patented products to Ben Venue. Indeed, Ben Venue was not free to do what it wished with the products it produced. It was contractually obliged to provide the manufactured Angiomax to TMC, who at all times retained title to the goods. In other words, no commercial sale occurred.

The Federal Circuit was also unconvinced by Hospira’s arguments that TMC’s “stockpiling” of product should trigger the on-sale bar provision because the stockpiling provided TMC with a commercial benefit. The plain language of section 102(b) was clear that it is not a commercial benefit that triggers the statutory bar. Rather, the product must be on-sale or offered for sale. In contrast, stockpiling or building an inventory is merely “pre-commercial activity in preparation for a future sale.”

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