Earlier this month, the Federal Circuit heard oral argument in Salix Pharmaceuticals, Ltd. v. Norwich Pharmaceuticals Inc., a patent case we are following because it attracted amicus briefs. In this case, the Federal Circuit is reviewing 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 recap.
William R. Peterson argued for the plaintiffs-appellants, Salix Pharmaceuticals and two related parties. As a preliminary matter, Peterson stated that he would focus on the “district court’s two errors,” which he argued were “misallocating the burden” regarding a press release qualifying as prior art and “misapplying this court’s precedent.” In particular, Peterson contended, Norwich “bore the burden of proof by clear and convincing evidence on all issues” related to the press release being considered prior art, including “whether the press release was by others.” He argued Norwich failed to carry its burden.
One judge asked if it was correct that the two co-inventors were not mentioned in the press release. Peterson stated that this was correct. The judge then asked, “what is wrong with concluding that there is no indication that the actual co-inventors were the ones that produced” the press release. In response, Peterson argued the “framing of the question” was important, and that he was not arguing that Salix had the burden to show that the press release was based on the inventor’s work, but instead that “Norwich bore the burden to prove. . . that it was not reporting the work of the inventors.” Another judge asked if there was a “shifting of the burden” to Salix. Peterson argued that would only be appropriate if Norwich had made “a prima facia case that the press release was reporting the work of individuals other than the inventors.”
The judges asked if Peterson agreed there was possibly “other evidence” presented to the district court that may have “allowed” it to reach the same conclusion. In response, Peterson asserted “there was key fact finding” that would have been necessary for the district to rely on the other evidence. He further argued the prior art the court relied on to decide “expectation of success” was not complete, because it relied only on instances of reported success. One judge brought up the issue of the disclosure of the relevant protocol, asking whether or not this disclosure “discloses the invention.” Peterson argued that while the protocol “suggests” the range of dosing that may be tested, it does not “give an expectation of success across the entire range” and does not “justify finding the expectation of success.” Additionally, he argued, there are many drugs that “look successful” in their trials, but that turn out unsuccessful.
The argument eventually turned to whether the court needed to reach the issue of the press release qualifying as prior art. Peterson argued that, if the court agrees that “Norwich failed to show reasonable expectation of success at the claimed dosage,” it does not need to address the issue. He argued the press release and reports did not show any success at the “claimed dosage.”
Chad A. Landmon argued for Norwich Pharmaceuticals. He began by asserted that, “even if Salix could have shown that there was some error in the district court’s findings that the press release was prior art,” it was not the only document the district court relied on in its decision. He pointed to “widespread off label use” as compelling evidence of a reasonable expectation of success. Additionally, Landmon argued, the district court looked to other pieces of prior art, but anyway, he continued, it did not err in finding that the press release constituted prior art. He maintained the press release was “issued by Salix, not a named inventor,” was “publicly accessible, and nothing in it references the inventors Forbes and Johnson.” In response to a question, Landmon argued Forbes is referenced “as an officer of the company,” but the document does not say that he “came up with anything.” Additionally, he argued, “most of the information on the press release was already publicly disclosed” in the protocol, including “method sets,” the “efficacy end points,” and the dosage.
Landmon claimed that “other prior art” along with “widespread off label use” were also considered by the district court. Moreover, Landmon asserted, even though some of the reports about utilizing the drug were published after the priority date, “they’re reporting activities that happened pre-priority date,” which constituted “public use.” One judge interjected, stating that the district court did not “make a ruling on prior public use.” In response, Landmon argued this is evidence supporting the district court’s ruling on “widespread off label use.”
Landmon then turned to Norwich’s cross appeal, arguing that the district court’s order should be vacated because “it blocked the FDA from approving Norwich’s amended ANDA” even though “it does not contain the infringing indication.” One judge asked if the ANDA was not amended until after the final order. Landmon confirmed that that is correct, but argued that Norwich is challenging both the scope of the original ANDA and its motion to amend the ANDA. Landmon contended the district court put Norwich in an “unfair position” by giving the ANDA a ”much broader scope than its limited infringement findings.” He argued the “scope of the injunction should not exceed the scope of an infringement finding.”
A judge asked what was wrong with the district court’s opinion that, “at the time of final judgment,” Norwich was stuck with the ANDA that had been submitted. In response, Landmon argued that, “under the plain language of the statute,” the order is to be directed to the infringed drug. Landmon argued the Hatch-Waxman Act was “enacted with the goal of bringing generic drugs to market as quickly as possible,” and, he continued, courts have held that this statute “fulfills this purpose to enable generic companies to get approval for products that are only directed to methods that are not covered by a valid patent.” Additionally, he argued, “Congress didn’t put a temporal limitation” on ANDAs. Regardless, he maintained, “injunctions are supposed to be tailored to the act of infringement.”
Finally, one judge asked whether the district court “wrongfully relied” on the protocol. In response, Landmon relied upon “similar cases” regarding the disclosure of an entire range, arguing “this court has never required a clinical study to be performed.”
In his response and rebuttal, Peterson asserted that he is “happy to stand on the briefs” in reference to the polymorph claims. He then turned the argument to the protocol, where he argued the only place where specific doses were mentioned would have been read by skilled artisans to mean that the dose did not work across the entire range. Indeed, he said, “there is no evidence in [the] record that would support a finding that skilled artisans would understand that the entire range from 1100 mg to 2200 mg . . . was successful.” As to the cross-appeal, he argued that, in order to amend the ANDA, Norwich should have filed a new ANDA or “should potentially have asked the district court to please delay entry of judgment” instead of amending the ANDA after the judgment.
In his rebuttal related to the cross appeal, Landmon said “of course Salix wants the filing of a new ANDA because it would get a new 30 month stay.” He argued the issue presented in this case “doesn’t come up in most cases.” And he asserted it does not make sense under the statute or “normal patent law provisions to not allow a product to go to market when it . . . won’t infringe one of the patents.”
We will continue monitoring this case and report on developments.