Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc.

A sale that is conditioned on FDA approval is still a sale for the purposes of the on-sale bar and the AIA’s amendments to the on-sale bar did not change its scope with regards to public disclosure.

July 14, 2017

GENERICally Speaking

Case Name: Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 855 F.3d 1356, 2017 U.S. App. LEXIS 7650 (Fed. Cir. May 1, 2017) (Circuit Judges Dyk, Mayer, and O’Malley presiding; Opinion by Dyk, J.) (appeal from D.N.J., Cooper, J.)

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

Nature of the Case and Issue(s) Presented: Helsinn owns the four patents-in-suit, which relate to the use of palonosetron to reduce the likelihood of chemotherapy-induced nausea and vomiting. Teva filed an ANDA seeking FDA approval to manufacture generic palonosetron. Helsinn filed a lawsuit alleging infringement of its patents in the District of New Jersey. The district court ruled that the patents-in-suit were valid. The Federal Circuit reversed, invalidating the patents pursuant to the on-sale-bar doctrine. On appeal, the Federal Circuit considered three issues: (i) whether Helsinn offered its product for sale prior to the critical date; (ii) whether the America Invents Act (AIA) changed the standard for the on-sale bar; and (iii) whether Helsinn had reduced its invention to practice sufficiently early enough that the on-sale bar applied.

Why Teva Prevailed:  The Federal Circuit first found that Helsinn offered its products for sale prior to the critical date. There was no dispute that Helsinn entered into a license and supply agreement with a third party. Helsinn argued, however, that since the agreement was premised on Helsinn’s product’s passing the FDA’s Phase III trials, and because the product did not pass Phase III trials until after the critical date, there was no sale triggering the on-sale bar. The Federal Circuit disagreed, holding that even if it contains a condition precedent, a sale is a sale. The Federal Circuit stated, “the fact that a transaction was subject to regulatory approval would not, absent more, prevent it from being a sale for the purposes of the on sale bar.” Accordingly, the sales pursuant to the license and supply agreement constituted a sale for the purposes of the on-sale bar.

Next, Helsinn argued that the AIA changed the rules of the on-sale bar. In particular, Helsinn argued that the AIA requires that the sale be of a public nature. Helsinn pointed to the change in language from pre-AIA 102(b), prohibiting patenting of an invention “in public use or on sale in this county,” compared to post-AIA 102(a)(1) barring patentability of an invention “in public use, on sale, or otherwise available to the public.” Helsinn argued that by amending the language of the statute, Congress changed the law relating to the on-sale bar, requiring that the sale make the invention available to the public. Again, the Federal Circuit disagreed, noting that such a change would be a “foundational” change to the law, as many prior cases applied the on-sale bar even to products that were not available to the public. Reviewing the legislative history of the AIA, the Federal Circuit found no statements supporting such a sweeping change—statements Congress would have made if it had intended to change to the on-sale bar jurisprudence. Thus, the law governing the on-sale bar remains the same after the AIA as it was prior to the AIA’s enactment.

Finally, the Federal Circuit had to determine if the invention was ready for patenting as of the critical date, such that the on-sale bar could apply. By the critical date, Helsinn had already determined that the invention worked for its intended purpose. The Federal Circuit also found that the district court erred in requiring a new drug to obtain FDA approval for the drug to be reduced to practice. This was a much higher standard than was required. Because the invention was working for its intended purpose, it was reduced to practice.

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