Argument Preview

Two cases being argued this month at the Federal Circuit attracted amicus briefs. One of those cases is Salix Pharmaceuticals, Ltd. v. Norwich Pharmaceuticals Inc., a patent case. In it, the Federal Circuit will review a judgment of the District of Delaware ruling on patent infringement and invalidity claims. The district court held that, if approved, Norwich’s Abbreviated New Drug Application would induce infringement of certain Salix patent claims (the “HE,” “IBS-D,” and “Polymorph” claims). Additionally, the court held that, while Salix’s HE claims are nonobvious and therefore not invalid, the asserted Polymorph and IBS-D claims are invalid as obvious. Both parties appealed the district court’s judgment. This is our argument preview. 

In their opening brief, the plaintiffs-appellants (Salix Pharmaceuticals and two related parties) first argue the district court “committed two independent errors” when finding that the IBS-D claims are invalid as obvious. They claim that the court “erred by treating the RFIB2001 Press Release as prior art under pre-AIA Section 102(a)” because Norwich failed to prove by clear and convincing evidence that the press release was “a work of others.” Plaintiffs-appellants argue that the district court incorrectly concluded that “Salix waived its challenge to the RFIB2001 Press release as prior art.” Second, plaintiffs-appellants assert that a remand is unnecessary because the district court erred in finding that “a skilled artisan would have had an expectation of success in using the claimed dosage.” Plaintiffs-appellants reason that, “[b]ecause the claimed dosage was outside the range known to be effective” for treatment, the court erred by applying the Federal Circuit’s “prior-art-range cases.”

Plaintiffs-appellants next address the Polymorph Claims, where they claim the district court erred in holding these claims invalid as obvious because, based on prior art at the time and common sense, “an artisan of ordinary skill in June of 2012 could not reasonably have expected to make a crystalline form of ibrutinib with the six claimed 2-Theta peaks.” Plaintiffs-appellants also contend the district court used the wrong test for obviousness, considering whether a person of ordinary skill in the art “would have been motivated to characterize the rifaximin produced by the Cannata processes,” instead of “whether a skilled artisan would have been motivated to make and had a reasonable expectation of success in making a crystalline form of rifaximin with the claimed peaks.”

Based on thair arguments, plaintiffs-appellants ask the Federal Circuit to reverse the district court’s judgment that the IBS-D and Polymorph Claims are invalid, render judgment that Norwich failed to show invalidity, and order the Food and Drug Administration not to approve Norwich’s ANDA until the patents expire. 

In its principal and response brief, Norwich (the defendant-cross-appellant) argues the district court “legally erred” by interpreting the remedy provision of U.S.C. ยง 271 to “require that the date of the ANDA approval in the mandated order be tied solely to the ‘drug.'” Instead, it argues, “to comply with the statutory requirements . . . the court had to specify that the approval date pertains to Norwich’s ANDA” as filed. Norwich reasons that the Hatch-Waxman Act allows “the FDA to approve the marketing of a generic drug for particular unpatented uses,” and there is no “temporal limitation” on the applicant for these uses. Therefore, it argues, it can amend its ANDA “such that the applicant is no longer seeking approval” for methods claimed by the patent “at any time,” including “after a finding of infringement.”

Norwich contends only its interpretation of the statute “is consistent with the animating purpose of the Act,” which is to bring generics to the market “as quickly as possible.” Additionally, it argues, only Norwich’s interpretation is consistent with the fundamental principles of patent law. It first says injunctions must be tailored specifically to infringing conduct, but the injunction “prevents FDA from approving Norwich’s Amended ANDA” even though it does not seek approval for the HE indication. It also argues patent law encourages infringers to design around existing patents and there “is no indication that Congress intended to foreclose an infringer’s ability to do similarly in the Hatch-Waxman context.” In this respect, Norwich maintains the district court abused its discretion in denying Norwich’s motion to modify the judgment.

Norwich argues the district court correctly held the IBS-D patents as obvious and, in this respect, there was “no clear error.” Norwich asserts plaintiffs-appellants failed to preserve their argument regarding alleged “derivation,” and even if the press release was not prior art, it continues, “the evidence supports the court’s conclusion and the alleged error is harmless.” It also argues the district court correctly found a reasonable expectation of success based on Norwich’s evidence of “widespread off-label use,” “positive results,” and “clinical studies.”

Norwich contends the district court also correctly held the Polymorph patents as obvious because “Cannata disclosed crystalline rifaximin having antibacterial properties . . . would have motivated a POSA to consider it as a potential drug candidate.” It argues that, even if the Federal Circuit finds claim 4 was not obvious, “the invalidity of the ruling should be affirmed on the alternative ground that the claim is inherently anticipated by Cannata.”

In their response and reply brief, plaintiffs-appellants maintain that “permitting Norwich to evade the judgment by a post-judgment ANDA amendment would be unprecedented and prejudicial to Salix.” They contend Norwich “wrongly asserts that the sole purpose of the Hatch-Waxman Act is to bring generics to market as quickly as possible,” instead of “balancing generic and brand interests within the pharmaceutical industry.” Plaintiffs-appellants additionally argue that, if a generic wants to amend its ANDA and have the court consider that amendment, it has the right to do so before trial. If it is amended “after trial, but before entry of judgment,” plaintiffs-appellants assert, the district court has the discretion to consider it based on “principles of fairness and prejudice.” 

In its reply brief, Norwich again argues the district court legally erred in failing to reference the HE indication in their order. It contends plaintiffs-appellants’ interpretation of the statute makes it “redundant” and contrary to the “cardinal principle” of interpretation. Additionally, Norwich reasons, claims of unfairness and prejudice are unfounded because plaintiffs-appellants “enjoyed the full benefit of the 30-month stay provided by the Hatch-Waxman Act.” Additionally, it argues, plaintiffs-appellants’ suggestion that they may have pursued a different trial strategy if the amendment had occurred earlier is not supported by evidence. Norwich maintains the only unfairness is that Norwich “is unable to obtain FDA approval . . . despite having undertaken the burden and expense of proving that Salix’s Polymorph and IBS-D patents are invalid before following the roadmap . . . to amend its ANDA and remove the infringing HE indication.”

Vanda Pharmaceuticals filed an amicus brief in support of plaintiffs-appellants. Vanda argues government-mandated disclosures during clinical trials threaten patent rights because “a wave of infringers” have attempted to use the mandated disclosures to invalidate patents. Vanda contends the Federal Circuit should clarify that “a drug manufacturer’s government-mandated disclosure of ongoing clinical trials necessary to develop the drug and secure FDA approval does not constitute prior art.” Vanda argues that, not only can these postings not inform a POSA’s reasonable expectation of success because the trial is “uncertain,” but they are “quintessential experimental uses” that do not constitute prior art. 

Regeneron Pharmaceuticals also filed an amicus brief in support of plaintiffs-appellants. Regeneron asserts clinical trial disclosures are not supported by a reasonable expectation of success. It argues studies show most clinical trials are not successful, and the Federal Circuit has previously held that “low clinical success rates can be fatal to the readable expectation of success inquiry.” It also contends “inventions challenged by their own, originating clinical trials” undermine developers’ investment and unduly pressure them to file early.

This case will be argued on Monday, January 8. We will report on any developments.