In an appeal by Apotex, the Court of Appeals for the Federal Circuit affirmed a summary judgment in favor of Merck that Merck had been using a process before it was patented by Apotex. Apotex v. Merck & Co. (06-1405)

Apotex Corp. appeals the decision of the United States District Court for the Northern District of Illinois1 granting summary judgment in favor of Merck & Co. in an action by Apotex to set aside a judgment on charges of fraud.  Apotex also asserted state law claims against Merck for common law fraud and tortious interference with prospective economic advantage, and sought to compel discovery pursuant to the crime fraud exception to the attorney-client privilege. The judgment of the district court is affirmed.

Apotex sued Merck alleging that its process for formulating and producing tablets of the pharmaceutical compound enalapril (Vasotec) used to treat high blood pressure) infringed Apotex’s U.S. Pat. No. 5,573,780 and No. 5,690,962.

The Apotex process involves the following steps, as set forth in claim 1 of the ‘780 patent:

1. A process of manufacture of a pharmaceutical solid composition comprising enalapril sodium, which process comprises the steps of:

(i) (a) mixing enalapril maleate with an alkaline sodium compound and at least one other excipient, adding water sufficient to moisten, and mixing to achieve a wet mass, or (b) mixing enalapril maleate with at least one excipient other than an alkaline sodium compound, adding a solution of alkaline sodium compound in water, sufficient to moisten and mixing to achieve a wet mass; thereby to achieve a reaction without converting the enalapril maleate to a clear solution of enalapril sodium and maleic acid sodium salt in water;

(ii) drying the wet mass, and;

(iii) further processing the dried material into tablets.

The district court ruled that the Apotex patents were invalid because the process had been invented and used by Merck before Apotex made the invention.

35 U.S.C. ‘102(g) provides that an applicant is not entitled to a patent if “before such person’s invention thereof, the invention was made in this country by another, who had not abandoned, suppressed, or concealed it.”

In earlier cases, it was shown that Merck had invented and practiced the accused process well before Apotex had but Apotex argued that it was entitled to a patent because Merck had suppressed or concealed the invention and practiced it in secret, and therefore that Merck infringed the Apotex patents.

The district court rejected the Apotex argument, finding that the process as practiced by Merck was not suppressed, concealed, or secret. The court found that Merck had widely distributed a list of the ingredients in its product

Then, Apotex tried again charging that the earlier rulings were obtained by fraud. Apotex charged that Merck had falsely stated that “the entire process was publicly discussed and falsely stated that “[t]his process has not been abandoned, suppressed, or concealed.” Apotex also charged that Merck misrepresented facts in its summary judgment brief submitted to the district court and in its appellate brief submitted to the Federal Circuit, and made false statements.

The district court did not agree with Apotex stating that whether Merck had fully disclosed all of its own manufacturing details was irrelevant to the validity of the Apotex patents covering the process broadly.

Fraud upon the court requires that there was a material subversion of the legal process such as could not have been exposed within the one-year window. Fraud upon the court is typically limited to egregious events such as bribery of a judge or juror or improper influence exerted on the court, affecting the integrity of the court and its ability to function impartially.

The Federal Circuit found no error had been shown in the district court’s analysis and conclusions. Upon review, the Federal Circuit held :

To obtain this exception to the privilege, Apotex must make a prima facie showing of some foundation for the asserted fraud. See Clark v. United States, 289 U.S. 1, 15 (1993) (loss of attorney-client privilege requires prima facie evidence that the charge of fraud has “some foundation in fact”). Apotex states that Merck’s counsel made fraudulent statements during the litigation, as discussed ante. The district court found that the accused statements were simply attorney argument as to the inferences to be drawn from the evidence, and that falsity was not shown. We agree that Apotex has not made a prima facie showing that fraud was committed, and that the district court did not abuse its discretion in refusing to compel discovery of material protected by the attorney-client privilege.

The summary judgment was affirmed.

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