Last June, we detailed that the U.S. Court of Appeals for the Federal Circuit upheld a trial court decision that three patents held by Purdue Pharma LP couldn’t be enforced because of misrepresentations to the U.S. Patent and Trademark Office about the painkiller’s effectiveness thus giving Endo Pharmaceutical Holdings Inc. the right to sell a generic version. OxyContin, a time-release painkiller generally prescribed to cancer patients and chronic-pain sufferers, had about $2 billion in sales last year.

A combined petition for panel rehearing and rehearing en banc by Purdue Pharma was filed along with amicus briefs by the Biotechnology Industry Organization; Richard L. Edelson, M.D.; the International Intellectual Property Institute; Congressman Darrell Issa; Law Professors John F. Duffy, et al.; the Pharmaceutical Research and Manufacturers of America; and the Washington Legal Foundation. The CAFC then granted the panel rehearing and withdrew the previous opinion and issued a new one.

This was a patent infringement case in which the patents were held unenforceable by the trial court due to inequitable conduct during prosecution before the USPTO. The district court found that Endo would infringe Purdue’s patents, but determined the patents were unenforceable due to the inequitable conduct that occurred during prosecution. Purdue then appealed the inequitable conduct judgment.

For a claim of inequitable conduct, applicants for patents have a duty to prosecute patents in the PTO with candor and good faith, including a duty to disclose information known to the applicants to be material to patentability. A breach of this duty may constitute inequitable conduct, which can arise from an affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive or mislead the PTO. A party asserting that a patent is unenforceable due to inequitable conduct must prove materiality and intent by clear and convincing evidence.

Regarding materiality, the court stated that:

A failure to inform the PTO whether a “surprising discovery” was based on insight or experimental data does not in itself amount to a material omission. In this case, however, Purdue did much more than characterize the four-fold dosage range of the claimed oxycodone formulation as a surprising discovery. Purdue repeatedly relied on that discovery to distinguish its invention from other prior art opioids while using language that suggested the existence of clinical results supporting the reduced dosage range. Presented with these unique facts, we cannot say the trial court erred in finding that Purdue failed to disclose material information to the PTO. … Some language in its opinion, however, indicates the trial court considered Purdue’s failure to tell the PTO the basis for its discovery to be highly material. As discussed below, the trial court may have erred to the extent it relied on a high level of materiality in determining whether Purdue intended to deceive the PTO and whether Purdue ultimately committed inequitable conduct.

Regarding intent, the court stated that:

Intent to deceive, however, cannot be “inferred solely from the fact that information was not disclosed; there must be a factual basis for a finding of deceptive intent.” Hebert v. Stryker SalesLisle Corp., 267, 99 F.3d 1370, 13811109, 1116 (Fed. Cir. 1996). When determining whether intent has been shown, a court must weigh all evidence, including evidence of good faith. Baxter, 149 F.3d at 1330.

While Purdue alleged during prosecution that ease of titration would result from a reduced dosage range, the two concepts are different. Furthermore, the quantum of proof necessary for FDA approval is significantly higher than that required by the PTO. Therefore, evidence that Purdue personnel believed it would be difficult to satisfy FDA requirements is at best marginally related to whether they intended to deceive the PTO. For these reasons, the trial court erred in giving the weight it did to this evidence when determining that Purdue acted with deceptive intent during prosecution of its patents.

Purdue then claimed that the trial court erred by importing the four-fold dosage range limitation into the claims and that, if the claims do not include that limitation, the CAFC should affirm the trial courts infringement determination because Endo does not dispute that its product satisfies the remaining claim limitations.

Regarding infringement, the court stated that:

In this case, the trial court concluded that during prosecution Purdue “deliberately and clearly relinquished, disclaimed and surrendered controlled release oxycodone formulations that do not control pain relief in approximately 90% of patients with an approximately four-fold dosage range.” Purdue Pharma, 2004 WL 26523, at *14. We agree with Purdue that it made no such disclaimer or disavowal, and the trial court’s holding to the contrary was in error. While it is true that Purdue relied on its discovery of the four-fold dosage range to distinguish its claimed oxycodone formulations from other prior art opioids, Purdue’s statements do not amount to a clear disavowal of claim scope.

The CAFC then vacated the trial court’s judgment that the patents-in-suit are unenforceable due to inequitable conduct and remanded the case for further proceedings consistent with this opinion. The trial court’s judgment of infringement was affirmed.

We’ll keep you posted on further developments.

See the revised Opinion here.

See the Order here.

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