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Unigene Laboratories, Inc. v. Apotex Inc.

August 31, 2009


The opinion of the court was delivered by: Robert P. Patterson, Jr., U.S.D.J.


In this patent infringement action brought by Plaintiffs Unigene Laboratories, Inc. and Upsher-Smith Laboratories, Inc. (collectively, "Unigene" or "Plaintiffs") against Defendants Apotex, Inc. and Apotex Corp. (collectively, "Apotex" or "Defendants"), Defendants, in their motion for summary judgment filed on April 17, 2009, assert that Claim 19 of legally issued U.S. Patent No. 6,440,392 ("the '392 patent"), which was reissued on June 30, 2009 under US RE40,812 ("the '812 reissued patent"), is invalid on the grounds of obviousness pursuant to 35 U.S.C. Section 103.*fn1 Plaintiffs, in their cross-motion filed on April 23, 2009 for summary judgment, counter that Claim 19 is not obvious as a matter of law.*fn2 Oral argument on the summary judgment motions was held on July 9, 2009 ("07/09/2009 Tr."). For the following reasons, Plaintiffs' motion for summary judgment is granted, and Defendants' motion for summary judgment is denied. Accordingly, Plaintiffs' related motion to exclude the two late filed expert reports submitted by Defendants on April 23, 2009, which was argued before the Court on July 16, 2009 ("07/16/2009 Tr."), is dismissed as moot.

1. Factual Overview*fn3

On August 27, 2002, the United States Patent and Trade Office ("PTO") issued the '392 patent, entitled "Nasal Calcitonin Formulations," based on a patent application filed on February 4, 2000. (Amended Complaint filed on July 2, 2009 ("Compl."), ¶12; Pl. 56.1 ¶6.) Plaintiff Unigene owns the '392 patent by assignment from Dr. William Stern, the sole inventor. (Compl. ¶13; Compl. Ex. A [Reissued Patent 06/30/2009]; Pl. 56.1 ¶8.)*fn4

The calcitonin formulation is currently sold as a nasal spray under the trademark Fortical ("Fortical"). (Compl. ¶15; Pl. 56.1 ¶2.) Fortical is manufactured by Plaintiff Unigene and provided to Plaintiff Upsher-Smith, who packages, distributes, and markets the product throughout the United States. (Compl. ¶16.) Fortical is a pharmaceutical product for administration to patients for the treatment of postmenopausal osteoporosis. (Compl. ¶17; Pl. 56.1 ¶3.)

On February 5, 2004, Plaintiff Unigene filed a reissue application seeking to correct an error in claim 1 of the '392 patent. (Pl. 56.1 ¶14.) On July 24, 2006, Plaintiffs Unigene and Upsher-Smith filed a complaint in the Southern District of New York, alleging infringement of the '392 patent by Defendants Apotex Inc. and Apotex Corp. pursuant to 35 U.S.C. § 271(e)(2)(A). (Compl. ¶22; Pl. 56.1 ¶¶1, 4.) Apotex Inc. is a large Canadian pharmaceutical company that manufactures generic pharmaceuticals and distributes them in the United States. (Compl. ¶¶21, 25.) Its subsidiary, Apotex Corp., assists Apotex Inc. in obtaining FDA approval for the pharmaceuticals Apotex Inc. plans to manufacture and distribute. (Id.)

Plaintiffs claim against Defendants is based on Defendants' submission of an Abbreviated New Drug Application ("ANDA No. 078200") on June 1, 2006, which sought FDA approval to engage in the commercial manufacture, use, offer for sale, sale, and/or importation of a generic version of Fortical before the expiration of the '392 patent. (Compl. ¶¶21, 25; Pl. 56.1 ¶¶1, 4.) The same day, Defendants sent a Certification Letter to Plaintiffs, pursuant to federal statute, advising that Defendants had submitted an ANDA for a salmon calcitonin nasal spray, and stating the grounds on which Defendants believed the '392 patent to be invalid and unenforceable. (Compl. ¶¶ 24, 26.)

The only claim of the '392 patent at issue in this litigation is Claim 19. (Compl. ¶21; Pl. 56.1 ¶¶1-2, 4; Def. 56.1 ¶1.) Claim 19 of the '392 patent ("Claim 19" or "the claim-in-suit") teaches: "A liquid pharmaceutical composition comprising about 2,200 MRC units of salmon calcitonin, about 20 mM citric acid,*fn5 about 0.2% phenylethyl alcohol, about.5% benzyl alcohol, and about.1% polyoxyethylene(20) sorbitan monooleate." (Pl. 56.1 ¶¶7, 16.)

On December 18, 2008 the PTO allowed the '392 reissue application with a substantially identical Claim 19. (Pl. 56.1 ¶¶18-23.) During the reissue proceedings, Plaintiffs submitted, and the patent examiner considered, all prior art cited by Defendants in their motion for summary judgment, as well as all of Defendants' expert reports. (Pl. 56.1 ¶¶21-22, 24-25, 95-96.) The Examiner's reasons for allowing the reissue of Claim 19 were that:

The closest prior art, does not teach or suggest a formulation comprising calcitonin and citric acid or a salt thereof for intranasal administration in a concentration-dependent manner with enhanced bioavailability and shelf stability, wherein the concentration of citric acid or a salt thereof is the critical element. Applicants have discovered that the narrow concentration range of 10-25 mM of citric acid and/or a salt thereof gives the formulation both its enhanced bioavailabilty and shelf stability. (Pl. 56.1 ¶23; '812 reissue patent [Table 1 [effect of concentration of citric acid on the bioavailability of salmon calcitonin], Table 3 [effect of the concentration of citric acid on the stability of salmon calcitonin stored at 50 degrees celcius].)

On June 30, 2009, the PTO reissued the '392 patent as US RE40,812.*fn6 (Pl. 56.1 ¶27.)

2. Summary Judgment Standard

The general standard for summary judgment applies in a patent case. See Brown v. 3M, 265 F.3d 1349, 1350 (Fed. Cir. 2001) (general summary judgment standard applies to patent invalidity); Spectra Corp. v. Lutz, 839 F.2d 1579, 1581 n.6 (Fed. Cir. 1988) ("summary judgment is as appropriate in a patent case as in any other"). Accordingly, as to each motion for summary judgment, the burden is on the moving party to establish that there are no genuine issues of material fact in dispute and that it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986 (purpose of the summary judgment procedure is not to deprive a litigant of a trial, but to avoid an unnecessary trial when there is only reasonably possible outcome.)

A court must grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact.." Miner v. Glens Falls, 999 F.2d 655, 661 (2d Cir. 1993); see also Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1095 (Fed. Cir. 2008). A dispute regarding a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir. 1992). After discovery, if the nonmoving party "has failed to make a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof," then summary judgment is appropriate. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

The moving party bears the burden of establishing the absence of any genuine issue of material fact and all significant doubt over factual issues must be resolved in the opposing party's favor. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). The "fact that both the parties have moved for summary judgment does not mean that the court must grant summary judgment to one party or the other. Cross-motions are no more than a claim by each party that it alone is entitled to summary judgment, and the court must evaluated each motion on its own merits, taking care in each instance to view the evidence in favor of the nonmoving party." Bubble Room, Inc. v. United States, 159 F.3d 553, 561 (Fed. Cir. 1998); Mingus Constructors Inc. v. United States, 812 F.2d 1387, 1391 (Fed Cir. 1987). As explained in detail below, the issue of obviousness is a challenge to the validity of the patent and requires the Court to determine whether the challenger has established a genuine issue of material fact as a matter of law as to whether or not the patent is obvious. See, e.g., Interconnect Planning Corp. v. Feil, 774 F.2d 1132, 1137-38 (Fed. Cir. 1985).

3. Applicable Law

Defendants bear a higher burden of proof because a patent is presumed valid. 35 U.S.C. § 282. In an infringement action where the accused counters by charging invalidity of the patent, that challenger, to prevail, "must establish facts, by clear and convincing evidence, which persuasively lead to the conclusion of invalidity." Avia Group Int'l v. L.A. Gear California, 853 F.2d 1557, 1561 (Fed. Cir. 1988). The challenger bears the burden of persuasion and must demonstrate invalidity by clear and convincing evidence through final judgment. Id. at 1562; Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 894 (Fed. Cir. 1984). This burden is significant because clear and convincing evidence "proves in the mind of the trier of fact an abiding conviction that the truth of [the] factual contentions [is] highly probable." Intel Corp. v. U.S. Int'l Trade Comm'n, 946 F.2d 821, 830 (Fed. Cir. 1991).

Where a claim has also survived a reissue proceeding, and has thus been twice considered by the PTO, the burden of proving invalidity is made "heavier," and must be met by the party asserting invalidity. Interconnect Planning Corp. v. Feil, 774 F.2d 1132, 1139 (Fed. Cir. 1985); Fromson v. Advance Offset Plate, Inc., 755 F.2d 1549, 1555 (Fed. Cir. 1985). Indeed, the presumption of validity "carries with it a presumption that the Examiner did [her] duty and knew what claims [she] was allowing." Al-Site Corp. v. VSI Int'l, Inc., 174 F.3d 1308, 1323 (Fed. Cir. 1999).

The presumption of validity is "most formidable" when the "party asserting invalidity relies upon prior art considered by the (PTO)." Central Soya Co., Inc. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1577 (Fed. Cir. 1983); see also Al-Site Corp., 174 F.3d at 1323 ("challenger's burden is especially difficult when the prior art was before the PTO examiner during prosecution of the application"); American Hoist & Derrick v. Sowa and Sons, 725 F.2d 1350, 1359 (Fed. Cir. 1984) ("When no prior art other than that which was considered by the PTO examiner is relied on by the attacker, he has the added burden of overcoming the deference that is due to a qualified government agency presumed to have properly done its job.").

Where the basis for alleging invalidity is a patent's purported obviousness under 35 U.S.C. § 103, courts must consider an array of factors in determining whether the totality of the evidence warrants overturning the presumption of validity. Brown and Williamson Tobacco Corp. v. Philip Morris, 229 F.3d 1120, 1124 (Fed. Cir. 2000). A claimed invention is unpatentable due to obviousness if the difference between it and the prior art is "such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art." 35 U.S.C. § 103(a).

Whether the invention was obvious under Section 103 is a legal conclusion based on certain factual inquiries, In re Huang, 100 F.3d 135, 138 (Fed. Cir. 1996); see also Richardson-Vicks v. Upjohn Co., 122 F.3d 1476, 1483 (Fed Cir. 1997), InterConnect, 774 F.2d at 1137 (obviousness is a question of law), including: 1) the level of ordinary skill in the art; 2) the scope and content of the prior art, and; 3) the differences between the claimed invention and prior art. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966) ("Graham Factors"). In answering this question, the Supreme Court in KSR directed courts facing this question to reject a "rigid approach" in favor of an "expansive and flexible approach using "common sense" when assessing whether an invention would have been obvious to a person of ordinary skill in the art. KSR International v. Teleflex, 550 U.S. 398, 415-16 (2007).

If the challenger establishes a prima facie showing of obviousness under these primary factors, the court then weighs secondary considerations of nonobviousness, which can include: commercial success, long felt but unmet need, failure of others, and unexpected results. Graham, 383 U.S. at 17; Sud-Chemie, Inc. v. Multisorb Techs., 554 F.3d 1001 (Fed. Cir. 2009) (secondary considerations, including "unexpected results, copying, and commercial success,". "constitutes independent evidence of nonobviousness" and can be quite instructive in the obviousness inquiry"); In re Sullivan, 498 F.3d 1345, 1351 (Fed. Cir. 2007) (evidence to rebut prima facie case of obviousness include "unexpected results," "commercial success," and "long-felt but unresolved needs"); In re Glaug, 283 F.3d 1335, 1338 (Fed. Cir. 2002); Winner Int'l Royalty v. Wang, 202 F.3d 1340, 1350-51 (Fed. Cir. 2000) (only after prima facie case of obviousness is established does burden shift to non-movant to rebut prima facie case with secondary considerations); Simmons Fastener Corp. v. Ill. Tool Works, Inc., 739 F.2d 1573, 1575 (Fed. Cir. 1984) ("Only after all evidence of nonobviousness has been considered can a conclusion on obviousness be reached"); see also Pfizer v. Apotex, 480 F.3d 1348, 1369 (Fed. Cir. 2007) ("evidence of unexpected results can be used to rebut a prima facie case of obviousness").

The obviousness inquiry must be approached from the correct temporal and objective perspectives. KSR, 500 U.S. at 421 (a patent is invalid only if a person of ordinary skill in the art, at the time of the invention, would have been able to construct the invention based on the prior art and some motivation). Indeed, "determinations of obviousness cannot be based on the hindsight combination of components selectively culled from the prior art to fit the parameters of the patented invention." Crown Operations Int'l, Ltd. v. Solutia, Inc., 289 F.3d 1367, 1376 (Fed. Cir. 2002). Put differently, a challenger who relies on the "blueprint drawn by the inventor," beginning the analysis at the claimed invention and matching it to the prior art, has not demonstrated obviousness. Interconnect, 774 F.2d at 1138 (holding "[t]he invention must be viewed not with the blueprint drawn by the inventor, but in the state of the art that existed at the time"); ATD Corp. v. Lydall, ...

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