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Teva's Challenges to Pfizer's VIAGRA Patents Fail

Tuesday, August 30, 2011
Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc., No. 10-CV-00128, 2011 BL 209149 (E.D. Va. Aug. 12, 2011) The U.S. District Court for the Eastern District of Virginia ruled against Teva Pharmaceuticals USA, Inc. in litigation concerning the validity and enforceability of patents covering Pfizer Inc.'s blockbuster VIAGRA erectile dysfunction drug. The district court ruled that: (1) two of three Pfizer entities had standing to assert infringement claims against Teva under the Hatch-Waxman Act,; (2) Teva's attempt to amend its pleading to expand its allegations of inequitable conduct was untimely, (3) the Pfizer patent at issue was not obvious or invalid for obviousness-type double patenting; and (4) Pfizer's counsel was not guilty of inequitable conduct during the prosecution of the patent, under the Federal Circuit's Therasense ruling.

Pfizer's VIAGRA Patents

Pfizer owns U.S. and foreign patents covering the use of chemical compounds to treat erectile dysfunction, including U.S. Patent No. 6,469,012 (the '012 patent), entitled "Pyrazolopyrimidinones for the treatment of impotence." In 2004, Teva filed an Abbreviated New Drug Application ("ANDA") seeking approval to market a generic form of sildenfil citrate, the active ingredient in VIAGRA. Three Pfizer affiliates, Pfizer, Inc., Pfizer, Ltd., and Pfizer Ireland Pharmaceuticals Unlimited Liability Co. ("Pfizer Ireland") filed suit against Teva under the Hatch-Waxman Act, 35 U.S.C. § 271(e)(2), alleging that Teva's ANDA certifications constituted infringement of the '012 patent. Teva counterclaimed for a declaration that the '012 patent was invalid and unenforceable.

District Court Rules Against Teva on Motions to Dismiss and Amend Inequitable Conduct Claim

Conducting a bench trial, the district court ruled in favor of Pfizer on all but one issue presented. First, the court granted-in-part and denied-in-part Teva's motion to dismiss the action on the grounds that the Pfizer plaintiffs lacked standing to maintain a patent infringement action. The named inventors of the '012 patent were based in the UK and were employees of Pfizer, Ltd. The inventors had assigned their rights to Pfizer, Inc., and Pfizer, Ltd. executed an agreement acknowledging the assignment and stating that Pfizer, Inc. would retain legal title to the patent, with Pfizer, Ltd. retaining beneficial ownership. Teva, however, argued that neither Pfizer, Inc. (which had legal title) nor Pfizer, Ltd. (which had beneficial ownership) had standing to bring an infringement action. The district court ruled that Pfizer, Inc. was legal owner of the '012 patent, and thus had standing to maintain the infringement action. Pfizer, Inc. was listed on the patent as assignee, and the court ruled that the assignments from the inventors were valid. In addition, the court ruled that Pfizer, Ltd. also enjoyed standing to maintain the action as a co-plaintiff. First, the court ruled that a beneficial owner "has most to all of the traditional property rights of the owner, except for actual legal title to the property." Pfizer at 29. Accordingly, the court ruled that Pfizer, Ltd. had standing to join the action as a party when the legal owner, Pfizer, Inc., was also joined as a party. See Sicom Systems, Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 980 (Fed. Cir. 2005). The district court ruled, however, that Pfizer Ireland lacked standing to maintain the action. Pfizer Ireland's right in the '012 patent arose from an "exclusive" license agreement between Pfizer, Ltd. and Pfizer Ireland's predecessor-in-interest. The license agreement provided Pfizer Ireland with the right to manufacture drugs under the patent and grant sublicenses. However, the license agreement also contained a provision which allowed Pfizer, Ltd. to convert the exclusive license to a non-exclusive license. A second provision gave Pfizer, Ltd. control over any litigation relating to the patent. Thefore, the district court ruled that Pfizer, Ltd. retained significant right to the '012 patent and Pfizer Ireland was not a true exclusive licensee. Furthermore, the district court denied Teva's motion to file an amended pleading on the eve of trial to assert new grounds for its inequitable conduct defense. Noting that the motion to amend was well after the court-ordered deadline to file amended pleadings, the district court ruled that Teva's motion was untimely and would prejudice Pfizer. In the course of its discussion, the district court ruled that the Federal Circuit's decision in Therasense, Inc. v. Becton, Dickinson and Co., 99 U.S.P.Q.2d 1065 (Fed. Cir. 2011) (en banc), which substantially increased the standard required to prove inequitable conduct, did not alter the Federal Circuit's prior decision in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009). In Exergen, the Federal Circuit held that a defendant pleading inequitable conduct must do so with particularity under Fed. R. Civ. P. 9(b), and that the pleading must include the who, what, when, where, and how of the alleged misrepresentation or omission. The Pfizer court ruled that this heightened pleading requirement still applied after Therasense, with one change—instead of merely identifying the person who committed the alleged misrepresentation or omission:
[A] party must make an initial showing from which it may be plausibly inferred that: (1) the individual knew of the information not disclosed; (2) the information not disclosed was but-for material to the prosecution of the patent; and (3) the intent to deceive is the single most likely explanation for the non-disclosure.
Id. at 45 (emphasis in original). The court rejected Teva's argument that Pfizer would not suffer any prejudice from the late amendment, pointing to discovery material from May 2011 identifying the substance of the proposed amendments. The court noted, however, that the same discovery materials established that Teva was aware of the issue well prior to its motion to amend.

'012 Patent Claims Found Not Obvious

On the merits of the issues presented at trial, the district court ruled for Pfizer and against Teva on both obviousness and inequitable conduct defenses. Regarding obviousness, Teva argued that the prior art contained substantial information about the use of compounds to stimulate smooth muscle tissue, and included references suggesting that a general class of enzyme inhibitors might be useful in treating impotence. Essentially, Teva argued that the prior art rendered the patent obvious under an "obvious-to-try" theory, recognized by the Supreme Court in KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398, 421 (2007). The district court noted that the prior art was limited because the in vivo enzyme inhibitor research involved treatment for illness such as angina and bronchitis, not erectile dysfunction. Reported testing of enzyme inhibitors in erectile tissue was limited to in vitro tests, which excluded factors which could be significant in treating erectile dysfunction. Therefore, the court concluded that Teva failed to prove that the '012 patent subject matter was "obvious to try" because the prior art did not establish that a person skilled in the art would have a reasonable expectation of success in using oral administration of the enzyme blocker to treat erectile dysfunction. The district court also rejected Teva's argument that the '012 patent subject matter was invalid in light of an earlier Pfizer patent under the doctrine of obviousness-type double patenting. The court credited expert testimony that the compound recited in the '012 patent claims was structurally different from that claimed in the earlier patent. As a result, the '012 patent claims were patentably distinct. See Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 967 (Fed. Cir. 2001).

No Evidence to Support Inequitable Conduct Defense Under Therasense Standard

Finally, the district court ruled in favor of Pfizer on Teva's allegation that Pfizer's patent counsel withheld from the U.S. Patent and Trademark Office a material reference relating to a competitor's foreign patent activity. Teva argued that Pfizer retained a law firm to submit references arising from foreign patent activities to the USPTO, but after Pfizer learned that the examiner planned to allow the pending application, the counsel stopped submitting references. Pfizer presented testimony that the firm stopped its practice of submitting foreign references following an interview with the examiner, who stated that the claims would be allowed and further advised that he was not interested in receiving any more foreign references. The district court ruled that under Therasense, Teva failed to demonstrate inequitable conduct. First, the court found no evidence that "but for" the withheld references, the '012 patent would not have issued. Second, Teva failed to show an actual intent to deceive the USPTO. The foreign patent reference came to light only after Pfizer had paid the issue fee on the '012 patent. Thus, under the USPTO's rules, the reference could be submitted only if it proved the unpatentability of one or more claims. See 37 CFR §1.313. Second, the evidence failed to show that the "single most reasonable inference" was that Pfizer's counsel acted with an actual intent to deceive the USPTO. Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy. ©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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