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King Pharmaceuticals, Inc. v. Eon Labs

September 28, 2010

KING PHARMACEUTICALS, INC., KING PHARMACEUTICALS RESEARCH AND DEVELOPMENT, INC., PLAINTIFFS/COUNTERCLAIM DEFENDANTS,
v.
EON LABS, INC., DEFENDANT/COUNTERCLAIM PLAINTIFF,
v.
ELAN PHARMACEUTICALS, INC. AND JONES PHARMA INC. COUNTERCLAIM DEFENDANTS.



The opinion of the court was delivered by: Trager, J

MEMORANDUM AND ORDER

This opinion lays to rest the final issues in this case and a related case, No. 03-CV-0006 ("the 400 mg action"), which remained after this Court's January 20, 2009 Order granting summary judgment to defendant Eon Labs, Inc. ("Eon") on the grounds that the two patents at issue in these actions are invalid. The two patents -- U.S. Patent Nos. 6,407,128 ("the '128 patent") and 6,683,102 ("the '102 patent") -- both claim a new method of administering the muscle relaxant metaxalone with food in order to increase the bioavailability of the drug. This Court's January 20, 2009 Order held that all of the claims in the two suit patents were invalid, either because they were anticipated under 35 U.S.C. § 102, failed for obviousness under 35 U.S.C. § 103 or claimed subject matter not patentable under 35 U.S.C. § 101. King Pharms., Inc. v. Eon Labs, Inc., 593 F. Supp. 2d 501 (E.D.N.Y. 2009). On August, 2, 2010, the Federal Circuit affirmed this Court's Order regarding invalidity, although on slightly different grounds for some claims. King Pharms., Inc. v. Eon Labs, Inc., Nos. 2009-1437, 2009-1438, 2010 WL 3001333 (Fed. Cir. Aug. 2, 2010).

This Court now addresses Eon's counterclaim against plaintiffs King Pharmaceuticals, Inc., King Pharmaceuticals Research and Development, Inc. and Jones Pharma Inc. (collectively "King") and counterclaim defendant Elan Pharmaceuticals, Inc. ("Elan") (collectively "counterclaim defendants") under 35 U.S.C. § 285 that this action and the related 400 mg action are exceptional cases entitling Eon to reasonable attorney's fees. Because Eon has failed to meet its burden of proving by clear and convincing evidence that this is an exceptional case, its motion is denied.

Overview and Procedural History

This case and the 400 mg action both arise from a dispute between brand name manufacturers of the drug metaxalone (Elan and King) and a potential rival that wanted to market a generic version of the drug (Eon). The original patent on metaxalone issued in 1962 and expired long ago. See U.S. Patent No. 3,062,827. This dispute concerns the prosecution of two separate patent applications that Elan applied for in 2001 and 2002 respectively, and litigation based on those patents once they issued in 2002 and 2004 respectively. Both patent applications were based on a fed-fasted study that was arranged and conducted between June and September of 2001 ("Study 101"), through which Elan claims to have discovered that the bioavailability of metaxalone is greater when the drug is administered in the fed state than when it is administered in the fasted state. The patents claimed to protect a method for administering metaxalone with food to increase the bioavailability of the drug, and using that method in the treatment of musculoskeletal conditions.

(1) The Suit Patents

a. Prosecution of the '128 Patent

On December 3, 2001, two employees of Elan -- Michael Scaife and Jaymin Shah -- filed a patent application based on the results of the 101 study ("the '128 application"*fn1 ). The application claimed to patent a method for increasing the bioavailability of metaxalone by administering the drug with food. Eon Ex. 17. On December 23, 2001, the examining attorney in the Patent and Trademark Office ("PTO") issued an office action rejecting claims 1-8 and 17-19 of the '128 application. Eon Ex. 19 at 5. The office action stated that claims 1-8 "fail[ed] to particularly point out and distinctly claim the subject matter which applicant regards as the invention," and suggested that applicant could overcome these concerns by amending claim 1 to read: "A method of increasing the oral bioavailability." Id. at 1.

On January 31, 2002, Applicants*fn2 filed a petition to make special*fn3 with the PTO. Eon Ex. 19 at 8-21. In connection with the petition, Applicants stated that they had performed a preexamination search of U.S. patents in class 514, subclasses 161, 384, 457 and 558, and class 424, subclasses 464, 468, 469 and 484, as well as a keyword search of the Claims data base of the Dialog Information System using the key terms "metaxalone" and "food." Id. Based on the results of that search, Applicants referenced nine patents and one patent application that they deemed to be "the most closely related to the subject matter of the pending claim" in their petition to make special. Id. Applicants did not reference any prior art other than patents and the one patent application in the petition. Id.

On February 7, 2002, the PTO granted Applicants' petition to make special. Id. at 22. The next day, Applicants filed a response to the first office action in which they agreed to amend claim 1 in the manner suggested by the examining attorney, cancel claims 17-19 and add new claims 23-29 to the '128 application. Id. at 7, 23, 28. On March 4, 2002, the PTO accepted Applicants' response to the first office action and issued a notice of allowance.*fn4 Id. at 31. On June 18, 2002, the PTO issued the patent as patent number 6,407,128. Eon Ex. 16.

b. Prosecution of the '102 Patent

On March 25, 2002, Applicants filed a second patent application based on the 101 study ("the '102 application"*fn5 ). The '102 application was a continuation of the '128 application that had the same specifications as the '128 application but differed in that it claimed to apply the '128 patent to the treatment of musculoskeletal conditions. On August 13, 2002, Applicants filed a petition to make special for the '102 application. King Ex. D at KG1186-1213. The petition stated that Applicants had conducted a preexamination search which was substantially similar to the one conducted for the petition filed in connection with the '128 application, and referenced fifteen patents or patent applications that Applicants deemed to be the "most closely related to the subject matter of the pending claims." Eon Ex. 20 at KG001187-001188.

On November 18, 2002, the patent examiner issued an office action rejecting claim 27 as being obvious over the Physician's Desk Reference, 55th Ed., and all other pending claims under the doctrine of obviousness-type double patenting over claims 1-22 of the '128 patent. Id. at KG001219-001220. On November 27, 2002, Applicants responded to the office action by filing an amendment canceling claim 27 and a terminal disclaimer obviating the double patenting rejection of the other pending claims. Id. at KG001226-001228.

(2) Eon's ANDA

In late 2002, after the '128 patent had issued but while the '102 application was still pending, Eon filed an Abbreviated New Drug Application ("ANDA") with the United States Food and Drug Administration ("FDA") seeking to market a generic version of metaxalone. King Ex. E. As part of its ANDA, Eon informed the FDA that, although it sought to manufacture the drug before expiration of the '128 and '102 patents, it believed that it would not infringe on the patents and, moreover, that the patents were invalid. Id. On November 7, 2002, Eon notified Elan of its ANDA and identified an article by Kazem Fathie, M.D. which Eon alleged was prior art that invalidated the '128 patent because it referred to taking metaxalone "with food" ("Fathie II").*fn6 Id.

On November 27, 2002, Applicants filed an Information Disclosure Statement ("IDS") with the PTO identifying Fathie II. King Ex. D at KG1225. On December 13, 2002, Applicants filed a second IDS identifying a related article by the same author that recommended taking metaxalone "after each meal and at bedtime" ("Fathie I").*fn7 King Ex. D at KG1229-36. On January 9, 2003, after having received both IDSs, the PTO issued a notice of allowance for the '102 application. Id. at KG1246.

On February 7, 2003, Eon's counsel sent Elan a letter identifying additional references that Eon's counsel believed invalidated the '128 patent, namely, articles by Lloyd W. Morey and Allan R. Crosby ("Morey")*fn8 and Julia Keio Elenbaas ("Elenbaas").*fn9 King Ex. F. Morey describes a study in which patients were given metaxalone "after meals and at bedtime," Eon Ex. 5 at E008795, and Elenbaas lists the half-life of metaxalone as "2-3 hours," Eon Ex. 36 at E003386. On March 4, 2003, Applicants filed another IDS with the PTO disclosing these two references. King Ex. D at KG1250. On March 26, 2003, after considering the references identified in the most recent IDS, the PTO again issued a notice of allowance for the '102 application. Id. at KG1251-1252.

Following additional disclosures by Applicants of newly released clinical study reports, patents and the litigation concerning the '128 patent, the PTO issued another notice of allowance on September 16, 2003, and on January 27, 2004, the PTO issued the '102 patent. Eon Ex. 18. Throughout the entire application process for the '102 patent, Applicants never disclosed to the PTO a number of references that Eon now argues are material.*fn10

(3) Infringement Suits Brought by Elan

On January 2, 2003, in response to Eon's ANDA, Elan brought an infringement action against Eon seeking to enjoin Eon from manufacturing a 400 mg version of metaxalone (No. 03-cv-0006, or "the 400 mg action"). On January 23, 3004, Eon filed counterclaims alleging that the '128 patent was invalid, that Eon was not infringing on the patent and that the court should find this an exceptional case entitling Eon to attorney's fees and costs. See Doc. No. 5 (03-0006) at 4-6.*fn11

On June 12, 2003, King acquired the Skelaxin(r) brand from Elan, including the '128 patent and '102 application. King Ex. D at KG1278. King then sought to intervene in the 400 mg action, which the court allowed. Doc. Nos. 45, 46 (3-0006). After King intervened, Elan made a motion to substitute King for Elan as plaintiff in the 400 mg action, Doc. No. 49, 150 (03-0006), which Eon opposed, Doc. No. 50 (03-0006), and which the court denied, Doc. No. 180 (03-0006). Despite being unable to substitute King for Elan in the 400 mg action, Elan covenanted never to assert any rights for past, present or future infringement of the '128 patent. King Pharms., Inc., 2010 WL 3001333, at *15.

Eon later amended its ANDA to include an 800 mg version of metaxalone. Doc. No. 352 ¶ 16. In response, King filed the instant lawsuit on December 17, 2004 alleging that production of an 800 mg version of metaxalone by Eon would infringe King's '128 and '102 patents ("the 800 mg action"). Eon again filed counterclaims, this time against both King and Elan, arguing that the suit patents were invalid and asking for a determination that this is an exceptional case meriting an award of litigation expenses. Doc. No. 352 at 23-45.

On September 28, 2006, Eon notified King and Elan that it had withdrawn its 400 mg metaxalone ANDA. Elan Ex. 22. There is some dispute over why Eon withdrew its ANDA. Eon argues that Elan and King convinced the FDA that one 800 mg tablet was safer than two 400 mg tablets, thereby destroying the market for a generic 400 mg version of metaxalone. Eon Reply at 20 n.15. Elan argues that Eon was unable to gain approval for its 400 mg version of metaxalone. Elan Mem. Law. Opp. Eon's Mot. Determination of Exceptional Case ("Elan Opp.") at 27. Regardless of why Eon withdrew its ANDA, on March 19, 2007, Eon voluntarily agreed to dismiss all of its counterclaims in the 400 mg action as moot except for its claim that the case is an exceptional case under ยง 285. Doc. No. ...


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