Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc. , 377 F. App'x 978 ( 2010 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
PURDUE PHARMA PRODUCTS L.P.,
AND NAPP PHARMACEUTICAL GROUP LTD.,
Plaintiffs-Appellants,
AND
ORTHO-MCNEIL, INC.,
Plaintiff,
v.
PAR PHARMACEUTICAL, INC.
AND PAR PHARMACEUTICAL COMPANIES, INC.,
Defendants-Cross Appellants.
__________________________
2009-1553, -1592
__________________________
Appeals from the United States District Court for the
District of Delaware in consolidated Case No. 1:07-CV-
00255, Circuit Judge Kent A. Jordan (sitting by
designation).
____________________________
Decided: June 3, 2010
____________________________
PURDUE PHARMA v. PAR PHARMACEUTICAL 2
ROBERT J. GOLDMAN, Ropes & Gray LLP, of East Palo
Alto, California, argued for plaintiffs-appellants. With
him on the brief were SASHA G. RAO; PABLO D. HENDLER
and SONA DE, of New York, New York.
DANIEL G. BROWN, Wilson Sonsini Goodrich & Rosati,
of New York, New York, argued for defendants-cross
appellants. With him on the brief were RON E. SHULMAN,
of Palo Alto, California; JENNIFER KOH, of San Diego,
California; and NICOLE W. STAFFORD, of Austin, Texas.
__________________________
Before LOURIE, LINN, and DYK, Circuit Judges.
LOURIE, Circuit Judge.
Purdue Pharma Products L.P. and Napp Pharmaceu-
tical Group Ltd. (collectively, “Purdue”) appeal from a
decision of the United States District Court for the Dis-
trict of Delaware holding U.S. Patents 6,254,887 (“the
’887 patent”) and 7,074,430 (“the ’430 patent”) invalid for
obviousness. Par Pharmaceutical, Inc. and Par Pharma-
ceutical Companies, Inc. (collectively, “Par”) cross-appeal
from the district court’s decision finding the ’887 and ’430
patents not unenforceable due to inequitable conduct. We
affirm.
3 PURDUE PHARMA v. PAR PHARMACEUTICAL
BACKGROUND
Purdue owns the ’887 and ’430 patents, which claim
controlled-release tramadol formations suitable for once-
daily oral dosing. Tramadol is an opioid analgesic used to
treat moderate to moderately severe pain, including pain
from arthritis. Certain claims further limit the tramadol
formulation to certain dissolution rates and W50 values 1
between ten and thirty-three hours. Ortho-McNeil, Inc.
sells once-daily tramadol (branded as Ultram® ER) under
a license from Purdue. Par filed an abbreviated new drug
application (“ANDA”) seeking FDA approval to market
generic Ultram® ER, and Purdue filed suit alleging in-
fringement of claims 3, 13, 27, and 29 of the ’887 patent
and 5, 7, and 11 of the ’430 patent. Par counterclaimed
that the asserted patents were invalid under 35 U.S.C. §
112 for lack of enablement and written description, inva-
lid under § 103 for obviousness, and unenforceable due to
inequitable conduct.
After a five-day bench trial, the district court held
that Par’s proposed generic tramadol product literally
infringed the asserted patents, that the asserted patents
were not unenforceable, but that the asserted claims were
invalid for obviousness. Purdue Pharma Prods. L.P. v.
Par Pharm., Inc., 642 F. Supp. 2d 329 (D. Del. 2009).
With regard to invalidity, the district court held that the
asserted claims would have been obvious in light of (1)
U.S. Patent 5,580,578 (“Oshlack”), which describes formu-
lations of opioid analgesics, including tramadol, for once-
daily dosing and (2) what was known in the art about
tramadol and once-daily formulations. The court rea-
soned that the Oshlack patent taught the use of tramadol
as one of fourteen different opioid analgesics to be used
1 The W50 value equals the width of an adminis-
tered drug’s plasma profile (plasma concentration over
time) at half the drug’s maximum plasma concentration.
PURDUE PHARMA v. PAR PHARMACEUTICAL 4
and that any differences in incorporating tramadol as the
active ingredient in a once-a-day formulation would have
involved only routine experimentation. Id. at 369-73.
The court then rejected Purdue’s claims of secondary
considerations, finding evidence of copying not compelling
in the ANDA context where bioequivalency is a prerequi-
site to FDA approval, and that Purdue’s evidence of
commercial success was “underwhelming.” Id. at 373-74.
With regard to unenforceability, the district court
found that Par had failed to prove intent to deceive by
clear and convincing evidence. Specifically, while finding
that the applicants had withheld material experimental
data and had submitted a materially misleading declara-
tion (“the Malkowska declaration”), the district court
found plausible the inference that the applicants were
merely overly aggressive in trying to put a positive spin
on the experimental results without intending to deceive
the United States Patent and Trademark Office (“PTO”).
In reaching that conclusion, the district court relied, inter
alia, on the credibility of Ms. Malkowska’s testimony and
the applicants’ later disclosure of the more pertinent
Napp repeat experiments generated for a foreign litiga-
tion. Id. at 375-79.
Both Purdue and Par appealed. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
Purdue appeals from the district court’s decision hold-
ing claims 3, 13, 27, and 29 of the ’887 patent and 5, 7,
and 11 of the ’430 patent invalid as obvious. Par cross-
appeals from the decision that the asserted patents are
not unenforceable due to inequitable conduct. Par also
cross-appeals from the district court’s finding of infringe-
ment in light of the court’s claim construction, but, as that
5 PURDUE PHARMA v. PAR PHARMACEUTICAL
argument merely asserts another ground for affirmance of
non-liability, it is not appropriate for cross-appeal, Voda
v. Cordis Corp., 536 F.3d 1311, 1324 n.4 (Fed. Cir. 2008),
nor is it persuasive. We consider each appeal in turn.
Obviousness
While the ultimate question of obviousness under 35
U.S.C. § 103 is a question of law, reviewed de novo, it is
based on several underlying factual determinations,
which we review after a bench trial for clear error.
Golden Blount, Inc. v. Robert H. Peterson Co., 365 F.3d
1054, 1058 (Fed. Cir. 2004). The relevant factual deter-
minations include 1) the scope and content of the prior
art, 2) the level of ordinary skill in the art, 3) the differ-
ences between the claimed invention and the prior art,
and 4) evidence of secondary factors. Graham v. John
Deere Co., 383 U.S. 1, 17-18 (1966).
Purdue challenges the district court’s finding of obvi-
ousness on multiple grounds. 2 First, Purdue argues that
the district court erred in finding that it would have been
obvious in light of Oshlack to select tramadol as an active
ingredient for use in a once-daily formulation. Rather,
according to Purdue, the prior art teaches away from
2 Purdue also argues that the district court made
two factual errors, erroneously finding that (1) two pat-
ents, including Oshlack, were not before the PTO and (2)
the use of tramadol disclosed in those patents did not
represent work “by another” under § 102(e). Because the
outcome is the same regardless whether Oshlack was
before the PTO, we need not address this argument. As
for Purdue’s § 102(e) argument, Purdue raises it for the
first time on appeal, and thus it has been waived. See
Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420,
1426 (Fed. Cir. 1997). Even if it had not been waived,
Purdue presented no evidence that the disclosures in the
two cited patents were the invention of the inventors of
the presently contested patents.
PURDUE PHARMA v. PAR PHARMACEUTICAL 6
selecting tramadol, reporting it as unpredictable and
poorly understood, and the development of a one-a-day
formulation for tramadol involved time-intensive design
(i.e., invention) not routine experimentation. Purdue next
argues that the district court erred in finding that the
claimed twenty-four hour therapeutic effect and W50
values were obvious since, at the time, there were no oral
opioid formulations effective for greater than twelve hours
and the W50 values, which were not disclosed in the prior
art, do not emerge from routine experimentation. Finally,
Purdue argues that the court gave insufficient weight to
its secondary considerations of nonobviousness, including
Par’s copying of the invention and Ultram® ER’s commer-
cial success.
Par responds that the district court correctly found
that one skilled in the art would have been motivated to
make the claimed tramadol formulation in light of Osh-
lack’s listing of tramadol for use in a once-daily formula-
tion and the prior art’s reports of its favorable
characteristics. According to Par, Purdue presented no
evidence of unexpected results over the Oshlack patent’s
controlled-release formulations and failed to rebut evi-
dence that only routine experimentation was required to
make the claimed formulation. Par also contends that the
claimed twenty-four hour therapeutic effect and the
claimed W50 values (the latter argument raised for the
first time on appeal) were obvious as the Oshlack patent
disclosed a formulation with a twenty-four hour effective
blood concentration that would necessarily have a W50
value within the claimed range of ten to thirty-three
hours. Finally, Par argues that the district court rightly
rejected Purdue’s secondary considerations, correctly
finding that evidence of copying is not compelling in the
Hatch-Waxman context and that the evidence of commer-
cial success was “underwhelming.”
7 PURDUE PHARMA v. PAR PHARMACEUTICAL
We agree with Par and affirm the district court’s deci-
sion finding the ’887 and ’430 patents would have been
obvious in view of Oshlack. Purdue’s asserted claims
require (1) a tramadol formulation, (2) a controlled-
release coating, and (3) a dosing that is suitable for ad-
ministration every twenty-four hours or that provides a
therapeutic effect for about twenty-four hours. Some
claims further recite very broad in vitro dissolution
ranges, some claims recite an in vivo W50 value of be-
tween ten to thirty-three hours, and some claims recite a
controlled-release coating consisting of a water-insoluble
wax, a water-insoluble polymer, a water-insoluble cellu-
lose, a mixture of the foregoing, or the water-insoluble
cellulose polyvinylpyrrolidone. In comparison, Oshlack
discloses a controlled-release tramadol formulation with a
similarly broad, although truncated, dissolution profile
that provides effective blood levels for about twenty-four
hours. ’578 patent col.43 l.48–col.44 l.36 claims 43, 44,
47. It also discloses at least one opioid analgesic formula-
tion with a W50 value of approximately twelve hours. Id.
col.37 ll.28-31 Fig 8. And it discloses controlled-release
coatings comprising polymethacrylate, a water-insoluble
polymer, and polyvinylpyrrolidone.
Purdue’s main argument is that a person of skill in
the art would not have selected tramadol out of the myr-
iad other possible active ingredients for use in a once-
daily formulation. But Oshlack makes that very selec-
tion; it lists tramadol as one of fourteen different opioid
analgesics to use in a controlled-release formulation that
provide effective blood levels for twenty-four hours. As
such, Oshlack itself renders the selection of tramadol
obvious regardless whether or not the patent lists
tramadol as a preferred embodiment. See Perricone v.
Medicis Pharm. Corp. 432 F.3d 1368, 1376 (Fed. Cir.
2005) (“This court rejects the notion that one of [14 listed]
ingredients cannot anticipate because it appears without
PURDUE PHARMA v. PAR PHARMACEUTICAL 8
special emphasis in a longer list.”); see also Merck & Co. v.
Biocraft Labs., Inc., 874 F.2d 804, 807 (Fed. Cir. 1989)
(holding that the prior art’s disclosure of a multitude of
combinations failed to render any particular formulation
less obvious).
Purdue’s alternative formulation of its argument, that
the selection of a once-daily dose with twenty-four hour
effect for tramadol was not obvious, similarly fails.
Again, Oshlack expressly teaches once-daily formulations,
see, e.g., Oshlack col.12 ll.17-18; col.33 ll.33-34; col.34 ll.4-
7, with dissolution rates designed to provide effective
blood levels for about twenty-four hours, compare id.
col.12 ll.12-18, with id. col.43 l.48–col.44 l.9 claim 43.
And it claims such formulations for use with tramadol.
Id. col.44 ll.29-36 claim 47. To the extent that Purdue is
arguing that the Oshlack patent fails to enable a once-
daily tramadol formulation, this argument also fails. For
purposes of § 103, a prior art reference need not itself be
enabled but is prior art for all that it discloses. Symbol
Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1578 (Fed. Cir.
1991). Oshlack discloses a once-daily formulation of
tramadol, and the district court found that in light of the
knowledge in the art about once-daily formulations and
about tramadol, persons of skill in the art would have
been able to achieve a once-daily tramadol formulation
with the claimed properties through routine experimenta-
tion. Purdue Pharma, 642 F. Supp. 2d at 373. We see no
clear error in that finding.
Although argued on appeal, Purdue does not appear
to have distinguished the Oshlack patent on the basis of
the claimed W50 values before the district court, waiving
the argument. See Sage Prods., Inc. v. Devon Indus., Inc.,
126 F.3d 1420, 1426 (Fed. Cir. 1997). Yet, we note that
Oshlack does in fact disclose a once-daily formulation
with a W50 value within the broad range of ten to thirty-
9 PURDUE PHARMA v. PAR PHARMACEUTICAL
three hours claimed in claim 13 of the ’887 patent and
claim 11 of the ’430 patent. Specifically, Figure 8 graphs
the plasma concentration of the opioid analgesic morphine
from Example 20 over time, revealing a W50 value of
approximately twelve hours. Thus, Oshlack itself pro-
vides a motivation to prepare a once-a-day tramadol
formulation with a W50 value within the claimed range
whether or not such a W50 value is, as the district court
found, necessarily a characteristic of a one-a-day
tramadol formulation. Purdue Pharma, 642 F. Supp. 2d
at 373.
Finally, we also reject Purdue’s argument that the
district court placed insufficient weight on its secondary
considerations of nonobviousness. Such considerations
here do not rebut Par’s clear case of obviousness. See
Agrizap, Inc. v. Woodstream Corp., 520 F.3d 1337, 1344
(Fed. Cir. 2008). Moreover, we do not find compelling
Purdue’s evidence of copying in the ANDA context where
a showing of bioequivalency is required for FDA approval.
Nor do we find compelling Purdue’s sales figures without
any evidence giving context to such figures. Accordingly,
we affirm the district court’s final judgment holding the
asserted claims of the ’887 and ’430 patents invalid as
obvious.
Inequitable Conduct
This court reviews the district court’s inequitable con-
duct determination under a two-tier standard; we review
the underlying factual determinations for clear error but
the ultimate decision on inequitable conduct for an abuse
of discretion. Star Scientific, Inc. v. R.J. Reynolds To-
bacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008). A conclu-
sion of inequitable conduct requires an accused infringer
to show that the applicant (1) made an affirmative mis-
representation of material fact, failed to disclose material
PURDUE PHARMA v. PAR PHARMACEUTICAL 10
information, or submitted false material information, and
(2) did so with intent to deceive the PTO. Id. Both mate-
riality and intent to deceive must be proven by clear and
convincing evidence, after which the court must balance
the equities to determine whether the conduct was egre-
gious enough to warrant holding the entire patent unen-
forceable. Id.
Par argues that the district court erred in not finding
intent to deceive because Purdue offered no credible
explanation for withholding material experimental data
and submitting a materially misleading declaration by
Ms. Malkowska that reported other, more favorable, data
to the PTO. In fact, according to Par, the district court’s
characterization of the Malkowska declaration as an
overly aggressive attempt to put a positive spin on the
data is effectively a finding of deceptive intent under this
court’s case law, citing Cargill, Inc. v. Canbra Foods, Ltd.,
476 F.3d 1359 (Fed. Cir. 2007) and Paragon Podiatry
Laboratory, Inc. v. KLM Laboratories, Inc., 984 F.2d 1182
(Fed. Cir. 1993). Par also asserts that the district court
incorrectly relied on irrelevant evidence of good faith,
including Ms. Malkowska’s failure to recall why the data
were not submitted; the potential that the formulators did
not recognize the data’s import to patentability when the
evidence showed that they did; and the applicants’ later
submission of similar data, the Napp repeat experiments.
Purdue responds that the district court correctly
found no intent to deceive based on the credibility of
Purdue’s witnesses in light of the entire record, including
that the Malkowska declaration was prepared to rebut,
not a rejection of obviousness by the PTO, but inherent
anticipation in an EPO proceeding, and that the appli-
cants timely disclosed more pertinent experimental
results, the Napp repeat experiments, generated for a
foreign litigation. Furthermore, according to Purdue, no
11 PURDUE PHARMA v. PAR PHARMACEUTICAL
evidence of good faith was required since Par did not meet
its burden of showing intent to deceive, which cannot be
inferred from materiality alone. Regardless, Purdue
argues, the record supports a credible excuse: The omit-
ted data did not reproduce conditions from the prior art
and revealed dissolution rates outside those claimed in
the asserted patents.
We agree with Purdue and affirm the district court’s
decision of no inequitable conduct. Even assuming that
the applicants withheld material data and submitted a
materially misleading declaration, as the district court
found, Purdue Pharma, 642 F. Supp. 2d at 378, we find no
clear error in the district court’s finding that Par failed to
present clear and convincing evidence of intent to deceive,
id. at 379. Specifically, the fact that the applicants later
submitted to the PTO the Napp repeat experiments
strongly suggests that the applicants did not act with
deceptive intent when they omitted similar data from the
Malkowska declaration or when they submitted the
Malkowska declaration with its omitted data to the PTO.
Cf. Cargill, 476 F.3d at 1366 (finding intent to deceive
when applicants repeatedly omitted highly relevant test
data). In fact, the Napp repeat experiments were even
more pertinent than the withheld data as they revealed
dissolution rates that fell directly within—rather than
near—the claimed rates. Therefore, another reasonable
inference is that the applicants believed (rightly or
wrongly) that the withheld data were irrelevant, either
because the experimental conditions did not replicate
those of the prior art or because they did not replicate
those in an earlier Malkowska declaration.
Any inference of deceptive intent in the preparation of
the declaration itself is further undermined by the fact
that the applicants prepared the Malkowska declaration,
not to respond directly to a rejection by the PTO, but for
PURDUE PHARMA v. PAR PHARMACEUTICAL 12
an EPO proceeding regarding a related patent. Cf. Fer-
ring B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1193 (Fed.
Cir. 2006); Paragon Podiatry, 984 F.2d at 1191. That
further diminishes 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. See Star Scientific, 537 F.3d at 1366.
Because intent to deceive is not the single most reason-
able inference that can be drawn from the evidence, id.,
we affirm the district court’s determination of no inequi-
table conduct.
We have considered the parties remaining arguments,
including Par’s alternative ground for affirming the
district court’s invalidity decision, and do not find them
persuasive. Accordingly, we affirm.
AFFIRMED