Bayer Pharma AG v. Watson Labs., Inc.

Case Name: Bayer Pharma AG v. Watson Labs., Inc., 874 F.3d 1316, No. 2016-2169, 2017 U.S. App. LEXIS 21705 (Fed. Cir. Nov. 1, 2017) (Circuit Judges Lourie, Moore, and O’Malley presiding; Opinion by Moore, J.) (Appeal from D. Del., Sleet, J.) (The district court clearly erred when it failed to consider the relevant prior art before it, relying instead on expert-witness testimony.)

Drug Product and Patent(s)-in-Suit: Staxyn® (vardenafil hydrochloride trihydrate); U.S. Patent No. 8,613,950 (“the ’950 patent”)

Nature of the Case and Issue(s) Presented: Watson filed an ANDA seeking to market a generic version of Staxyn and Bayer sued Watson for patent infringement. The parties conducted a bench trial in the United States District Court for the District of Delaware. During the trial, Watson introduced a number of pieces of prior art, arguing that the claims of the ’950 patent were obvious at the time of invention. In its opinion, however, the district court did not consider these prior art, instead relying on Bayer’s expert witness, who himself did not consider Watson’s prior art. Further, the district court pointed to vardenafil’s bitter tastes as a reason why one of ordinary skill would not formulate a drug as an oral disintegrating tablet, as claimed in the ’950 patent, and as additional evidence that the claims of the ’950 patent were not obvious. As a result, the court found in Bayer’s favor. Watson appealed and the Federal Circuit reversed.

Why Watson Prevailed: The Federal Circuit began by criticizing the district court’s treatment of Watson’s prior art, deeming it clear error. Watson submitted six references that were clearly on point, showing that erectile dysfunction drugs such as vardenafil were candidates for an oral disintegrating tablet (“ODT”) formulation, as claimed in the ’950 patent. The Federal Circuit acknowledged that it was up to the district court to make credibility determinations and that it credited a persuasive expert witness, but took the district court to task because it could not justify ignoring relevant prior art when the expert also failed to consider the relevant art. Indeed, the six relevant references were not mentioned at all in the district-court opinion. Thus, the court committed clear error, and the Federal Circuit reversed the decision.