By Jason Rantanen
Sciele Pharma Inc. v. Andrx Corporation (Fed. Cir. 2012) Download 12-1228
Panel: Moore (author), Lourie, Prost
Lupin sought permission to market a generic version of Fortamet, an extended-release tablet of metaformin hydrochloride. In response, Shionogi filed a lawsuit asserting infringement of Patent No. 6,866,866, thus triggering a 30-month stay of FDA approval. The stay expired while the litigation was still ongoing and Lupin attempted an at risk launch of its generic product. Shionogi obtained a preliminary injunction to prevent Lupin from selling its product that Lupin appealed.
This opinion is noteworthy largely for its discussion of the presumption of validity. Lupin argued that the presumption of validity should not apply because of errors committed by the patent office during prosecution: the patent office erroneously issued the patent with claims that had been both rejected by the examiner and cancelled by the applicant. Shionogi argued that there should be a heightened presumption of validity because the prior art references relied on by Lupin were before the PTO during prosecution.
The Federal Circuit rejected both arguments, although it acknowledged that the specific circumstances could carry some weight in the overall determination. "Whether a reference was previously considered by the PTO, the burden of proof is the same: clear and convincing evidence of invalidity...The burden does not suddenly change to some-thing higher–“extremely clear and convincing evidence” or “crystal clear and convincing evidence”–simply because the prior art references were considered by the PTO." Slip Op. at 10-11. However, the fact that references were previously before the PTO could impact the weight the court or jury assigns to the evidence: "For example, it could be reasonable to give more weight to new arguments or references that were not explicitly considered by the PTO when determining whether a defendant met its burden of providing clear and convincing evidence of invalidity." Id.
Likewise, while the court rejected the argument that the presumption of validity did not apply because of the PTO's errors during prosecution, it allowed those errors to be considered: "We can take it all into account, including both the fact that the Cheng and Timmins references were before the Patent Office and the bizarre circumstances surrounding the issuance of the claims in this patent." Id. at 12.
Against this backdrop, the CAFC concluded that the district court's obviousness analysis was flawed because it overstated the fact that the references were not before the PTO in KSR and incorrectly rejected Lupin's substantive arguments on disclosure and motivation to combine.
Although the standard for determining whether the patentholder has demonstrated a likelihood of success on the merits is a significant issue in some preliminary injunction appeals, this does not appear to be one where the outcome would have turned out differently if the CAFC had applied a standard other than whether the applicant raised a substantial question as to validity.' The Federal Circuit judges were clearly persuaded that there was a strong obviousness challenge to the patent.
