Teva Pharmaceuticals
AMRX/TEVA/NVS: Impax, Actavis Head to Trial May 14 Over Parkinson’s Drug Patents
Fri 05/11/2018 18:26 PM
Relevant Documents:
Complaint - Actavis
Rytary - Actavis Summary Judgment Opinion
Complaint - Sandoz
Complaint - Zydus
Reorg Litigation Recap
Impax filed patent infringement actions in the District of New Jersey against three different defendants over Rytary, including a case against Actavis that is set for a bench trial on May 14. Reorg Litigation Intelligence will provide daily coverage of this trial.
Though Impax asserted a total of eight patents against Actavis, four patents have been dismissed from the case and the remaining four have been stripped of multiple claims of direct infringement - both facts that indicate that Impax could be facing an uphill battle at trial. If Impax is unable to mount a strong case and Actavis manages to prevail, Impax’s arguments in two related actions against Sandoz and Zydus could be compromised. A loss for Impax could accelerate the entry of generic versions of Rytary into the market and put $91.6 million of Impax’s revenue at risk. As Impax states in its latest 10-K, “If such litigation is resolved unfavorably for us such that we are unable to rely on our patent protection for Rytary® as a barrier to entry of potential generic versions of the product, we may experience significant decreased revenue from sales of Rytary® which could materially and adversely affect our business, results of operations and financial condition.”
Summary of District Court Actions
Currently, there are three Rytary patent infringement actions pending against each of Actavis (which comprises three consolidated actions), Sandoz, and Zydus. Below is a chart of all Rytary actions:
Rytary Actions
Rytary Patents
Impax asserted a total of eight Rytary patents - all of which are listed in the FDA’s Orange Book - in the five actions filed in the District of New Jersey. Below is a chart of all Rytary patents, including their status in the May 14 trial against Actavis:
On Feb. 28 of this year, Impax added a ninth Rytary patent to the Orange Book, U.S. Patent No. 9,901,640, or the ’640 patent. Impax has not yet asserted the ’640 patent.
Actavis Actions (Rytary)
Impax filed a total of three actions in the District of New Jersey against Actavis over the course of nearly eight months based on Actavis’s ANDA No. 208522, which seeks FDA approval for Actavis’s generic version of Rytary extended release capsules in 23.75 mg/95 mg, 36.25 mg/145 mg, 48.75 mg/195 mg, and 61.25 mg/245 mg dosages. The initial complaint, filed on Sept. 17, 2015, includes the ’427, ’474, ’998, ’283, ’607, and ’608 patents; the second complaint, filed on Dec. 20, 2016, includes the ’246 patent; and the third complaint, filed on May 9, 2017, includes the ’046 patent. Impax filed the later two actions upon the issuance and submission to the Orange Book of the patents asserted in each action. Because all three actions involve the same family of patents and similar allegations of infringement, the court consolidated them into a single action involving all eight patents presided over by Judge Stanley Chesler.
To date, Actavis has successfully fought off four of the eight asserted Rytary patents, and dismissed multiple direct and literal infringement claims for the remaining patents. First, all asserted claims of three of the patents - the ’474, ’998, and ’607 patents - were dismissed under a stipulation entered on June 8, 2017 based on a claim construction order which heavily favored Actavis’s noninfringement contentions. Next, the ‘427 patent was dismissed on Jan. 3 of this year after the USPTO cancelled all claims based on an ex parte reexamination of the patent. Finally, on April 18, the court issued an order granting in part Actavis’s motion for summary judgment of noninfringement. That order dismissed all of Impax’s claims of direct, literal infringement - i.e., allegations that Actavis itself will infringe all claims of the patents - of all asserted claims of the ’283 and ’608 patents, as well as most asserted claims of the ’246, and ’046 patents. This leaves only claims of infringement under the doctrine of equivalents for the ’283 and ’608 patents and claims of contributory infringement and inducement of the ’246 and ’046 patents. In order to prevail at trial, Impax must prove infringement under the doctrine of equivalents for the ’283 and ’608 patents, and must prove either inducement or contributory infringement of the ’246 and ’046 patents.
Below is a summary of the Doctrine of Equivalents, inducement of infringement, and contributory infringement as they relate to the remaining claims that Impax will assert at trial.
Doctrine of Equivalents
Based on the dismissal of five patents and the dismissal of all literal infringement claims of the others, Impax is left with claims against four patents based on the doctrine of equivalents. The doctrine of equivalents allows for a finding of infringement when the accused product is differentiated only by insubstantial changes to the patented invention.
In pharmaceutical cases where claims involve chemical compositions, the Federal Circuit’s 2017 opinion in Mylan v. Aurobindo appears to indicate a preference for the “insubstantial differences” test articulated by the Supreme Court’s 1949 decision Graver Tank v. Linde Air. The Graver test holds that the doctrine of equivalents can be applied if an accused product “performs substantially the same function in substantially the same way to obtain the same results.” This prevents defendants from circumventing patent claims by making insubstantial changes to a chemical composition. Here, Impax will have to prove that the formulation used by Actavis - which Impax concedes is different than its own formulation - is not substantially different and is therefore equivalent to the claims of the ’283 and ’608 patents.
Inducement
In order to prove inducement, Impax must first show that there was direct infringement, and then show that the defendant knowingly induced infringement with specific intent to do so. Actavis moved for summary judgment on the issue of inducement for the ’246 and ’046 patents, arguing that the proposed label for their generic product states nothing about taking the product with or without food. According to Actavis, a study conducted as part of their ANDA showed that taking their generic product with food would not meet all the limitations of the asserted claims. Actavis argues that giving the drug to users without specifying that it should be taken without food means that all the claim limitations will not be met and no inducement will take place. However, in the summary judgment order, the court points out that “what the label says about food or fasting has no relevance to the inquiry into specific intent to induce infringement” in this action, distinguishing a 2014 District of New Jersey case regarding administration of a drug after a patient has been fed.
Actavis further argues that not all patients will use the drug in a manner that infringes the patents and that there is a substantial noninfringing use - a factor used in determining infringement. However, the District of New Jersey provides lengthy quotations from two Federal Circuit opinions in its summary judgment order regarding specific intent of inducement showing that the appellate court “focuses the inquiry into specific intent to induce infringement on what the label instructs, rather than on whether some proportion of uses will or will not end up infringing.” In other words, the issue at trial will be the label itself, not whether patients follow it.
Contributory Infringement
In order to prove contributory infringement, Impax must show that an alleged infringer sells or imports a component of a product that has “no substantial, noninfringing use” and “constitutes a material part of the invention.” As stated in the court’s April 18 summary judgment order, because “there is a material factual dispute over whether the Actavis product is suitable for substantial noninfringing use,” the issue of contributory infringement of asserted claims of the ’246 and ’046 patents must be determined at trial. Notably, the court devoted a good portion of its summary judgment order to the issue of contributory infringement, including long quotations from recent Federal Circuit cases involving patents that disclose methods for drug treatment. This could indicate that the court finds Actavis’s position unfavorable, though it could also indicate that the court simply was unwilling to settle the matter at the summary judgment phase.
Actavis’s Omnibus Motion in Limine to Preclude Certain Theories
On April 20, Actavis filed a motion in limine to preclude Impax from advancing certain theories at trial. Specifically, Actavis asked the court for an order (1) precluding Impax from arguing infringement under the Doctrine of Equivalents for all claims, (2) precluding Impax’s expert witness, Dr. Mansoor Amiji, from testifying regarding the Doctrine of Equivalents, (3) precluding Impax from arguing literal infringement for any claims of the ’246 and ’046 patents, and (4) precluding Dr. Amiji from testifying regarding literal infringement for any claims of the ’246 and ’046 patents. The brief in support of Actavis’s motion was filed under seal and is not currently publicly available, but the motion itself appears to illustrate an attempt by Actavis to revive the portions of its previous motion for summary judgment that Judge Chesler declined to adopt. On May 3, Judge Chesler issued a one-page order denying Actavis’s motion and maintaining Impax’s ability to argue its remaining theories at trial. Again, this likely indicates that the court is unwilling to settle these matters prior to the May 14 bench trial, not that Actavis’s position is particularly weak with regard to those theories.
Actavis Drops Its Obviousness Defense
On May 9, Actavis sent a letter under seal to Judge Chesler, announcing its intention to drop its obviousness defense at trial. On May 10, Impax sent its own unsealed letter in response. Impax’s letter indicates that Actavis, as part of the withdrawal of its obviousness defense, has proposed dropping the testimony of several witnesses - including three witnesses that Impax argues are “highly relevant to many issues that remain in the case.” Testimony from those witnesses includes issues relevant to “Actavis’s defenses with respect to the doctrine of equivalents and various estoppel arguments, which have overlapping factual issues with Actavis’s now-abandoned obviousness defenses.”
Impax’s letter asks Judge Chesler to allow its three experts to testify despite the dropped obviousness defense. Impax argues that it “will be horribly prejudiced if it cannot call these experts to present opinions that remain highly relevant to the issues that remain for trial,” and notes that its “preparation for trial has already been disrupted by having to account for Actavis’s eleventh-hour decision to drop its obviousness defense.” Given the timing of the letters, it appears likely that this issue will be resolved at trial.
Issues to Watch At Trial
While the fact that few direct infringement claims remain is hardly fatal to Impax’s case, it still limits the arguments that it can bring to trial. The combination of four dropped patents and a slew of claims limited by the summary judgment order have narrowed Impax’s case. While it is still possible that Impax will prevail - particularly on the claims of contributory infringement and inducement of the two method patents, the ’246 and ’046 - the court’s previous decisions with regard to claim construction have worked in Actavis’s favor. If Impax is unable to mount a strong case and Actavis manages to evade a finding of infringement - (or if Actavis convinces the court that the remaining Rytary patents are invalid) - it could diminish Impax’s arguments in the remaining actions against Sandoz and Zydus. That could accelerate the entry of generic versions of Rytary into the market and put $91.6 million of Impax’s revenue at risk.
Sandoz Action (Rytary)
On March 31, 2017, Impax filed an action against Sandoz in the District of New Jersey alleging infringement of the same eight Rytary patents asserted in the Actavis action. After multiple deadline extensions stipulated by the parties, Sandoz filed its answer and counterclaims on Feb. 28 of this year. Impax filed its answer to Sandoz’s counterclaims on March 22. Sandoz filed its amended answer and counterclaims on April 27. The case was assigned to Judge Stanley Chesler and Magistrate Judge Cathy Waldor. A teleconference with Magistrate Judge Waldor is scheduled for May 21 at 9:45 a.m. ET.
Zydus Action (Rytary)
On Dec. 19, 2017, Impax filed an action against Zydus in the District of New Jersey alleging infringement of only one of the Rytary patents - the ’608 patent. Zydus filed its answer and counterclaims on April 11. The action against Zydus was also assigned to Judge Chesler and Magistrate Judge Waldor. An initial conference before Magistrate Judge Waldor is scheduled for May 18 at 11:30 a.m. ET.
Complaint - Actavis
Rytary - Actavis Summary Judgment Opinion
Complaint - Sandoz
Complaint - Zydus
Reorg Litigation Recap
- On May 14, Impax heads to trial in the District of New Jersey over alleged infringement by Actavis, Teva’s generic pharma business, of several Impax patents protecting Rytary, a $91.6 million drug used in the treatment of Parkinson’s disease.
- A series of orders in the Actavis case have significantly reduced the number of patents and claims asserted by Impax, which could prove difficult for Impax in the upcoming trial. Actavis filed another motion on April 20 in an effort to further reduce the arguments available to Impax at trial.
- Impax has filed two other complaints asserting Rytary patents against Sandoz, Novartis’s generic division, and Zydus. Both of those cases are in the early stages of litigation, with scheduling orders not yet issued. Both are likely to head to trial no sooner than 2019.
- Impax and Amneal completed an all-stock merger on May 7, creating the fifth largest generics business by gross revenue in the U.S. The company trades on the NYSE under the ticker AMRX.
Impax filed patent infringement actions in the District of New Jersey against three different defendants over Rytary, including a case against Actavis that is set for a bench trial on May 14. Reorg Litigation Intelligence will provide daily coverage of this trial.
Though Impax asserted a total of eight patents against Actavis, four patents have been dismissed from the case and the remaining four have been stripped of multiple claims of direct infringement - both facts that indicate that Impax could be facing an uphill battle at trial. If Impax is unable to mount a strong case and Actavis manages to prevail, Impax’s arguments in two related actions against Sandoz and Zydus could be compromised. A loss for Impax could accelerate the entry of generic versions of Rytary into the market and put $91.6 million of Impax’s revenue at risk. As Impax states in its latest 10-K, “If such litigation is resolved unfavorably for us such that we are unable to rely on our patent protection for Rytary® as a barrier to entry of potential generic versions of the product, we may experience significant decreased revenue from sales of Rytary® which could materially and adversely affect our business, results of operations and financial condition.”
Summary of District Court Actions
Currently, there are three Rytary patent infringement actions pending against each of Actavis (which comprises three consolidated actions), Sandoz, and Zydus. Below is a chart of all Rytary actions:
Rytary Actions
Rytary Patents
Impax asserted a total of eight Rytary patents - all of which are listed in the FDA’s Orange Book - in the five actions filed in the District of New Jersey. Below is a chart of all Rytary patents, including their status in the May 14 trial against Actavis:
On Feb. 28 of this year, Impax added a ninth Rytary patent to the Orange Book, U.S. Patent No. 9,901,640, or the ’640 patent. Impax has not yet asserted the ’640 patent.
Actavis Actions (Rytary)
Impax filed a total of three actions in the District of New Jersey against Actavis over the course of nearly eight months based on Actavis’s ANDA No. 208522, which seeks FDA approval for Actavis’s generic version of Rytary extended release capsules in 23.75 mg/95 mg, 36.25 mg/145 mg, 48.75 mg/195 mg, and 61.25 mg/245 mg dosages. The initial complaint, filed on Sept. 17, 2015, includes the ’427, ’474, ’998, ’283, ’607, and ’608 patents; the second complaint, filed on Dec. 20, 2016, includes the ’246 patent; and the third complaint, filed on May 9, 2017, includes the ’046 patent. Impax filed the later two actions upon the issuance and submission to the Orange Book of the patents asserted in each action. Because all three actions involve the same family of patents and similar allegations of infringement, the court consolidated them into a single action involving all eight patents presided over by Judge Stanley Chesler.
To date, Actavis has successfully fought off four of the eight asserted Rytary patents, and dismissed multiple direct and literal infringement claims for the remaining patents. First, all asserted claims of three of the patents - the ’474, ’998, and ’607 patents - were dismissed under a stipulation entered on June 8, 2017 based on a claim construction order which heavily favored Actavis’s noninfringement contentions. Next, the ‘427 patent was dismissed on Jan. 3 of this year after the USPTO cancelled all claims based on an ex parte reexamination of the patent. Finally, on April 18, the court issued an order granting in part Actavis’s motion for summary judgment of noninfringement. That order dismissed all of Impax’s claims of direct, literal infringement - i.e., allegations that Actavis itself will infringe all claims of the patents - of all asserted claims of the ’283 and ’608 patents, as well as most asserted claims of the ’246, and ’046 patents. This leaves only claims of infringement under the doctrine of equivalents for the ’283 and ’608 patents and claims of contributory infringement and inducement of the ’246 and ’046 patents. In order to prevail at trial, Impax must prove infringement under the doctrine of equivalents for the ’283 and ’608 patents, and must prove either inducement or contributory infringement of the ’246 and ’046 patents.
Below is a summary of the Doctrine of Equivalents, inducement of infringement, and contributory infringement as they relate to the remaining claims that Impax will assert at trial.
Doctrine of Equivalents
Based on the dismissal of five patents and the dismissal of all literal infringement claims of the others, Impax is left with claims against four patents based on the doctrine of equivalents. The doctrine of equivalents allows for a finding of infringement when the accused product is differentiated only by insubstantial changes to the patented invention.
In pharmaceutical cases where claims involve chemical compositions, the Federal Circuit’s 2017 opinion in Mylan v. Aurobindo appears to indicate a preference for the “insubstantial differences” test articulated by the Supreme Court’s 1949 decision Graver Tank v. Linde Air. The Graver test holds that the doctrine of equivalents can be applied if an accused product “performs substantially the same function in substantially the same way to obtain the same results.” This prevents defendants from circumventing patent claims by making insubstantial changes to a chemical composition. Here, Impax will have to prove that the formulation used by Actavis - which Impax concedes is different than its own formulation - is not substantially different and is therefore equivalent to the claims of the ’283 and ’608 patents.
Inducement
In order to prove inducement, Impax must first show that there was direct infringement, and then show that the defendant knowingly induced infringement with specific intent to do so. Actavis moved for summary judgment on the issue of inducement for the ’246 and ’046 patents, arguing that the proposed label for their generic product states nothing about taking the product with or without food. According to Actavis, a study conducted as part of their ANDA showed that taking their generic product with food would not meet all the limitations of the asserted claims. Actavis argues that giving the drug to users without specifying that it should be taken without food means that all the claim limitations will not be met and no inducement will take place. However, in the summary judgment order, the court points out that “what the label says about food or fasting has no relevance to the inquiry into specific intent to induce infringement” in this action, distinguishing a 2014 District of New Jersey case regarding administration of a drug after a patient has been fed.
Actavis further argues that not all patients will use the drug in a manner that infringes the patents and that there is a substantial noninfringing use - a factor used in determining infringement. However, the District of New Jersey provides lengthy quotations from two Federal Circuit opinions in its summary judgment order regarding specific intent of inducement showing that the appellate court “focuses the inquiry into specific intent to induce infringement on what the label instructs, rather than on whether some proportion of uses will or will not end up infringing.” In other words, the issue at trial will be the label itself, not whether patients follow it.
Contributory Infringement
In order to prove contributory infringement, Impax must show that an alleged infringer sells or imports a component of a product that has “no substantial, noninfringing use” and “constitutes a material part of the invention.” As stated in the court’s April 18 summary judgment order, because “there is a material factual dispute over whether the Actavis product is suitable for substantial noninfringing use,” the issue of contributory infringement of asserted claims of the ’246 and ’046 patents must be determined at trial. Notably, the court devoted a good portion of its summary judgment order to the issue of contributory infringement, including long quotations from recent Federal Circuit cases involving patents that disclose methods for drug treatment. This could indicate that the court finds Actavis’s position unfavorable, though it could also indicate that the court simply was unwilling to settle the matter at the summary judgment phase.
Actavis’s Omnibus Motion in Limine to Preclude Certain Theories
On April 20, Actavis filed a motion in limine to preclude Impax from advancing certain theories at trial. Specifically, Actavis asked the court for an order (1) precluding Impax from arguing infringement under the Doctrine of Equivalents for all claims, (2) precluding Impax’s expert witness, Dr. Mansoor Amiji, from testifying regarding the Doctrine of Equivalents, (3) precluding Impax from arguing literal infringement for any claims of the ’246 and ’046 patents, and (4) precluding Dr. Amiji from testifying regarding literal infringement for any claims of the ’246 and ’046 patents. The brief in support of Actavis’s motion was filed under seal and is not currently publicly available, but the motion itself appears to illustrate an attempt by Actavis to revive the portions of its previous motion for summary judgment that Judge Chesler declined to adopt. On May 3, Judge Chesler issued a one-page order denying Actavis’s motion and maintaining Impax’s ability to argue its remaining theories at trial. Again, this likely indicates that the court is unwilling to settle these matters prior to the May 14 bench trial, not that Actavis’s position is particularly weak with regard to those theories.
Actavis Drops Its Obviousness Defense
On May 9, Actavis sent a letter under seal to Judge Chesler, announcing its intention to drop its obviousness defense at trial. On May 10, Impax sent its own unsealed letter in response. Impax’s letter indicates that Actavis, as part of the withdrawal of its obviousness defense, has proposed dropping the testimony of several witnesses - including three witnesses that Impax argues are “highly relevant to many issues that remain in the case.” Testimony from those witnesses includes issues relevant to “Actavis’s defenses with respect to the doctrine of equivalents and various estoppel arguments, which have overlapping factual issues with Actavis’s now-abandoned obviousness defenses.”
Impax’s letter asks Judge Chesler to allow its three experts to testify despite the dropped obviousness defense. Impax argues that it “will be horribly prejudiced if it cannot call these experts to present opinions that remain highly relevant to the issues that remain for trial,” and notes that its “preparation for trial has already been disrupted by having to account for Actavis’s eleventh-hour decision to drop its obviousness defense.” Given the timing of the letters, it appears likely that this issue will be resolved at trial.
Issues to Watch At Trial
While the fact that few direct infringement claims remain is hardly fatal to Impax’s case, it still limits the arguments that it can bring to trial. The combination of four dropped patents and a slew of claims limited by the summary judgment order have narrowed Impax’s case. While it is still possible that Impax will prevail - particularly on the claims of contributory infringement and inducement of the two method patents, the ’246 and ’046 - the court’s previous decisions with regard to claim construction have worked in Actavis’s favor. If Impax is unable to mount a strong case and Actavis manages to evade a finding of infringement - (or if Actavis convinces the court that the remaining Rytary patents are invalid) - it could diminish Impax’s arguments in the remaining actions against Sandoz and Zydus. That could accelerate the entry of generic versions of Rytary into the market and put $91.6 million of Impax’s revenue at risk.
Sandoz Action (Rytary)
On March 31, 2017, Impax filed an action against Sandoz in the District of New Jersey alleging infringement of the same eight Rytary patents asserted in the Actavis action. After multiple deadline extensions stipulated by the parties, Sandoz filed its answer and counterclaims on Feb. 28 of this year. Impax filed its answer to Sandoz’s counterclaims on March 22. Sandoz filed its amended answer and counterclaims on April 27. The case was assigned to Judge Stanley Chesler and Magistrate Judge Cathy Waldor. A teleconference with Magistrate Judge Waldor is scheduled for May 21 at 9:45 a.m. ET.
Zydus Action (Rytary)
On Dec. 19, 2017, Impax filed an action against Zydus in the District of New Jersey alleging infringement of only one of the Rytary patents - the ’608 patent. Zydus filed its answer and counterclaims on April 11. The action against Zydus was also assigned to Judge Chesler and Magistrate Judge Waldor. An initial conference before Magistrate Judge Waldor is scheduled for May 18 at 11:30 a.m. ET.
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2024 Reorg Research, Inc. All rights reserved.