Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc. (Fed. Cir. 2010)

Further Adventures in Obviousness and Inequitable Conduct

    By Kevin E. Noonan --

In Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc., the Federal Circuit exercised its prerogative to illustrate its fractured jurisprudence on two issues, obviousness and inequitable conduct, in a (fortunately) nonprecedential decision.  Contrary to its Congressional mandate to bring jurisprudential consistency to U.S. patent law, on these matters at least the outcome is highly dependent on the constitution of the panel rather than a consistent application of the law.  In view of the fact-intensive nature of the issues involved it is perhaps inevitable, but that does little to help the patent community understand what behavior does (and does not) fit within the statutory standard.

This case arose after Par filed an ANDA for Purdue Pharma's Ultran ER® product, a sustained release formulation of the opiate analgesic tramadol, with a Paragraph IV certification that Purdue Pharma's Orange Book-listed, U.S. Patent Nos. 6,254,887 and 7,074,430 were invalid and/or unenforceable.  The District Court held that Par's generic tramadol formulation infringed claims 3, 13, 27, and 29 of the '887 patent and claims 5, 7, and 11 of the '430 patent.  However, the Court also found that these claims were invalid for obviousness over the disclosure of U.S. Patent No. 5,580,578 ("the Oshlack patent") but that the patents were not unenforceable for inequitable conduct.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges Linn and Dyk.  The panel's grounds for affirming the obviousness determination was that the Oshlack patent disclosed tramadol as one of 14 opiate drugs that could be formulated in an extended-release formulation, dosing to encompass a bioavailability profile of from 10 to 33 hours, and a "controlled release coating" comprising water-insoluble polymethacrylate and polyvinylpyrrolidone.  Purdue's patents disclosed alternative, water-insoluble coatings.  The Court held that the Oshlack patent selected tramadol as one of 14 opiate drugs (out of the "myriad other possible active ingredients" that could have been used to prepare an extended-release formulation), and that this disclosure rendered Purdue's claimed formulations obvious "regardless of whether or not the patent lists tramadol as a preferred embodiment."  (The Court helpfully cited another case, Perricone v. Medicis Pharm. Corp., that "reject[ed] the notion that one of [14 listed] ingredients cannot anticipate because it appears without special emphasis in a longer list," relying it seems on the maxim that "anticipation is the epitome of obviousness," In re Kalm, 378 F.2d 959, 962 (CCPA 1967).)  The Court also found that the Oshlack reference expressly taught "once-daily" tramadol formulations albeit without necessarily enabling production thereof (citing Symbol Technologies Inc. v. Opticon, Inc., 935 F.2d 1569, 1578 (Fed. Cir. 1991)).  The panel held that Purdue had waived arguments relating to the non-obviousness of formulations having bioavailability profiles disclosed and claimed in the '887 and '430 patents, as well as (and perhaps more importantly) the argument that the Oshlack patent was not prior art under 35 U.S.C. § 102(e), because these arguments were not raised before the District Court.  A review of Patent Office records indicates that the Oshlack patent was assigned to Purdue in December 1997, suggesting that Purdue's argument was that this patent was not available as prior art under § 102(e) pursuant to the provisions of 35 U.S.C. § 103(c).  This argument, properly made, should have been enough to overcome Par's obviousness defense.  Finally, the Court continued its recent pattern of disregarding the "secondary considerations" of non-obviousness under the Supreme Court's Graham v. John Deere precedent, agreeing with the District Court that evidence of copying was irrelevant in an ANDA context (an argument of apparently first enunciation), and that Purdue had not provided sufficient context (or perhaps sufficient "nexus") for its commercial success evidence to rebut the District Court's legal conclusion of obviousness.

Turning to inequitable conduct, the panel agreed with the District Court that Purdue had withheld material information from the Office in the form of experimental data, and indeed had submitted a "misleading" affidavit during prosecution:  the declaration contained "more favorable" experimental data than the data that Purdue withheld.  Par reasonably contended that this constituted inequitable conduct, since Purdue could provide "no credible explanation" for these actions.  In finding no inequitable conduct, the District Court found insufficient evidence of deceptive intent.  For example, the Court characterized the declaration as being "an overly aggressive attempt to put a positive spin on the data."  Par also contended that the District Court erred in relying on "evidence" of good faith, which included that the declarant failed to recall why the less-favorable data was not submitted to the Office, "that the formulators did not recognize the data's import to patentability when the evidence showed that they did," and that patentees had later submitted "similar" (presumptively negative) data to the Office.

The Federal Circuit affirmed the District Court's finding of no inequitable conduct based on several factors that are consistent with the deference that the "abuse of discretion" standard is intended to produce, as well as others that are less reasonably related to the conclusion.  These include witness credibility, but also include that the declaration was "prepared" to overcome a rejection on inherent anticipation before the European Patent Office (but if it wasn't submitted to the USPTO it could not have been used to support an inequitable conduct defense).  The panel also seemed to sanction as a factor related to deceptive intent the later submission of "more pertinent experimental results," which the Court noted had been "generated for a foreign litigation."  Also impliedly sanctioned was the "credible excuse" proffered by Purdue, that "[t]he omitted data did not reproduce conditions from the prior art and revealed dissolution rates outside those claimed in the asserted patents."  The panel stated that "[e]ven assuming that the applicants withheld material data and submitted a materially misleading declaration, as the district court found" in affirming the District Court's decision, a statement that seems to stretch to the breaking point the principle that intent to deceive cannot be inferred from materiality alone.  And the fact that Purdue later disclosed "similar" experimental data seems equally inadequate to overcome the behavior the District Court found, and the panel agreed, was exhibited by Purdue in not only withholding material information but filing a misleading affidavit (compare, for example, different panel holdings in Aventis Pharma S.A. v. Amphastar Pharma, Inc. and Ferring B.V. v. Barr Laboratories, Inc.).  In making this determination, the panel seems to distinguish an earlier panel's decision in Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed. Cir. 2007) on the grounds that in Cargill, the patentees consistently submitted misleading information to the Office.  And the panel found that "the reasonableness of inferring that any omission or misleading statement in the preparation of the declaration was made with the specific intent of deceiving the PTO" was diminished because the declaration was prepared for an EPO proceeding (ignoring the fact that the issue was the intent in submitting the declaration to the USPTO during prosecution of the '887 and '430 patents).  For this panel, at least, the District Court's decision of no inequitable conduct was affirmed "[b]ecause intent to deceive is not the single most reasonable inference that can be drawn from the evidence."

Perhaps the en banc court's decision in Therasense v. Becton, Dickenson & Co. will bring some consistency to the Court's inequitable conduct jurisprudence.

Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc. (Fed. Cir. 2010)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Linn, and Dyk
Opinion by Circuit Judge Lourie