Encore Dermatology Inc. v. Glenmark Pharms. Ltd.

Case Name: Encore Dermatology Inc. v. Glenmark Pharms. Ltd., Civ. No. 20-02509 (KM) (ESK), 2020 WL 7586958 (D.N.J. Dec. 22, 2020) (McNulty, J.) 

Drug Product and Patent(s)-in-Suit: Impoyz® (clobetasol); U.S. Patent No. 9,956,231 (“the ’231 patent”)

Nature of Case and Issue(s) Presented: Encore owns the ’231 patent, which claims “[a] topical pharmaceutical composition comprising: clobetasol … wherein the composition is … propylene glycol-free.” Encore also holds an NDA for Impoyz, which uses the patented drug. Glenmark filed an ANDA seeking approval of a generic clobetasol cream. Glenmark disclosed to Encore in its Paragraph IV Notice Letter that its proposed ANDA product contained 10% propylene glycol, and therefore argued that its product did not infringe the ’231 patent. Glenmark only provided Encore with access to a limited portion of its ANDA. In turn, Encore argued it was not able to fully understand the safety of the proposed ANDA product if it indeed contained propylene glycol. Encore brought suit under 271(e)(2) claiming a “good faith basis” to question Glenmark’s assertions. Glenmark moved to dismiss under Fed. R. Civ. P. 12(b)(6), which the court denied.

Why Encore Prevailed: In denying Glenmark’s motion to dismiss, the court held that: (i) dismissal of the asserted claims required claim construction of disputed terms; and (ii) Encore’s good-faith basis to question the ANDA raised a plausible right to relief.

The court explained that the claim term “propylene glycol-free” needed to be construed. Either the term meant that the composition was completely free of propylene glycol, or as Encore proposed, “free of an amount of propylene glycol that would be unsafe.” Encore argued that the specification of the ’231 patent provided a reasonable basis for the latter construction. Thus, the court explained that at this early stage, where the court must afford a claim term is broadest possible construction, it was not possible to determine on the pleadings whether Glenmark’s proposed product infringed.

Next, the court explained that under the Twombly/Iqbal standard, the complaint alleged “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence to support” Encore’s allegation of infringement. The court acknowledged Glenmark’s argument that under Federal Circuit precedent, the focus of the infringement inquiry should be on the product described in the ANDA where the ANDA directly addresses the issue of infringement. But the court further explained that Encore was not required to prove its case at this stage and the purpose of 271(e)(2) litigation was “in effect, to determine whether the Paragraph IV certification is erroneous.”

The court further stated that it was “swayed” by Encore’s argument that Glenmark had only provided limited information about its proposed ANDA product. Thus, discovery may reveal additional information important to the infringement question.