Federal Circuit No. 2013-1674

When an applicant takes it upon himself to obtain a patent by intentionally duping the Examiner as to material issues, the applicant's conduct is inequitable and will result in a finding of unenforceability.  This is what the Federal Circuit found in upholding the District Court's decision in Apotex

The technology of the patent on appeal, U.S. Patent No. 6,767,556 (“the ‘556 patent”) is a pharmaceutical composition comprising moexipril magnesium.  The '556 patent is owned by Apotex, Inc.  Dr. Bernard Charles Sherman, is the founder and chairman of Apotex, and is the sole inventor of the '556 patent.  Dr. Sherman also wrote the application for the '556 patent. 

The '556 patent is generally directed to a process for manufacturing moexipril tablets.  Moexipril is an angiotensin-coverting-enzyme (ACE) inhibitor used to treat hypertension.  Stability of moexipril is improved by preparing moexipril magnesium by reacting moexipril or its acid salt with an alkaline magnesium compound.  The process claimed in the '556 patent is recited in the only independent claim, claim 1:

Claim 1.       A process of making a solid pharmaceutical composition comprising moexipril magnesium, said process comprising the step of reacting moexipril or an acid addition salt thereof with an alkaline magnesium compound in a controlled manner in the presence of a sufficient amount of solvent for a predetermined amount of time so as to convert greater than 80% of the moexipril or moexipril acid addition salt to moexipril magnesium.

In the preferred embodiment of the '556 patent, moexipril hydroxide is reacted with magnesium hydroxide or the magnesium salt of a weak acid (e.g., magnesium carbonate) to obtain moexipril magnesium.  '556 patent, col. 2, l. 66 to col. 4, l. 5.  The process used is "wet granulation," which has been known in the pharmaceutical industry since the 1980s. 

During prosecution of the '556 patent, the claims were rejected over (1) U.S. Patent No. 4,743,450 ("the '450 patent"), which discloses an ACE inhibitor and magnesium carbonate as an alkaline stabilizer, (2) UNIVASC® and UNIRETIC®, which are made using the process described in U.S. Patent No. 4,743,450 to Warner-Lambert ("the 450 patent;" which is listed in the Orange Book for both products), and (3) an NPL reference ("the Gu article;" Gu et al., Drug-Excipient Incompatibility Studies of the Dipeptide Angiotensin-Converting Enzyme Inhibitor, Moexipril Hydrocholride: Dry Powder vs. Wet Granulation, 7. Pharm. Res. 379 (1990)), which describes the chemistry involved in stabilizing moexipril, including a wet process for converting moexipril to moexipril magnesium.  In addition, the background section of '556 patent includes a discussion of all of the above prior art.  In this discussion, Dr. Sherman characterized each of the prior art as including a combination of two individual compounds, i.e., Dr. Sherman describes the compositions of each of the prior art as including unreacted moexipril and a stabilizer.  In fact, during prosecution, at the direction of Dr. Sherman, counsel submitted the product monographs for UNIVASC® and characterized the same as including a moexipril composition that contains magnesium oxide that is "unreacted but combined and [functions] as a stabilizer."  Counsel also characterized the Gu article as teaching that the components of the moexipril composition disclosed therein as containing moeixipril hydrochloride and an alkaline stabilizing agent that are "merely combined and any reaction is insignificant to the desired end result," again at the direction of Dr. Sherman.  An expert Declaration by Dr. Michael Lipp was also submitted, in which Dr. Lipp reinforced the representations regarding the prior art that were included in the application as well as counsel's arguments submitted during prosecution.  In a subsequent Interview, the Examiner agreed to allow the application when Dr. Sherman's counsel agreed to amend claim 1 to recite that "greater than 80%" of the moexipril or moexipril acid salt is converted to moexipril magnesium.  The Examiner's basis for allowing the application was that "the prior art teaches that only a portion of the drug (if any) may be converted to the alkaline salt and that the stable product results entirely or primarily not from conversion to alkaline salts, but from stabilization of the moexipril hydrochloride by the presence of the alkaline stabilizing compound in the final product."  It should be noted that the Examiner's reasons above were in line with Dr. Sherman's characterization of the prior art. 

Upon issuance of the '556 patent Apotex filed suit in the Southern District of Florida alleging infringement of the '556 patent by UCB (licensee of the '450 patent from Warner Lambert) based on their manufacture of UNIVASC® and UNIRETIC®, and generic versions of the same.  The District Court found the '556 patent to be unenforceable based on inequitable conduct.  On appeal, the Federal Circuit analyzed the Dr. Sherman's actions for both materiality and intent. 

The Federal Circuit found clear and convincing evidence that Dr. Sherman engaged in material misconduct.  Primarily, the court found that Dr. Sherman directed the prosecution of the '556 patent application, both through his counsel and through Dr. Lipp.  Dr. Sherman directly instructed his counsel to continue to submit arguments that mischaracterized the prior art references, and also failed to inform Dr. Lipp of the true facts surrounding the composition of UNIVASC®.  In fact, at the District Court, Dr. Lipp testified that he was specifically asked to limit his discussions only to the documents provided by Apotex, which did not include any information on experiments conducted by Apotex on UNIVASC®.  The UNIVASC® product was tested by Apotex, and the results showed that the final product "mainly" contained moexipril magnesium.  At no time during prosecution of the '556 patent application was this data disclosed to the Patent Office.  In contrast, Dr. Sherman continued to mischaracterize UNIVASC® as containing unreacted moexipril and an alkaline stabilizing agent.  Moreover, as part of its infringement case, Apotex conducted NMR tests to show that UNIVASC® contains more than 80% moexipril magnesium, which contradicted all of Dr. Sherman's previous assertions about this product.  The Federal Court also determined that "but-for" Dr. Sherman's mischaracterization of the prior art, the Examiner would not have allowed the '556 patent to issue.  The Federal Circuit clarified that an applicant for a patent is entitled to advocating, in good faith, a reasonable interpretation of the teachings of the prior art.  SeeRothman v. Target Corp., 556 F.3d 1310, 1328-29 (Fed. Cir. 2009).  However, Dr. Sherman "affirmatively and knowingly misrepresented material facts regarding prior art," and the Federal Circuit found "particularly significant and inexcusable that Dr. Sherman arranged for the preparation and submission of an expert declaration containing false statements instrumental to issuance of the patent." 

With regard to Dr. Sherman's intent, the Federal Circuit found clear and convincing evidence to establish Dr. Sherman's intent to deceive the Patent Office, based on his blatant mischaracterization of prior art, submission of an expert declaration to bolster such mischaracterizations, and withholding of prior art.  In addition, Dr. Sherman admitted that he never performed any of the experiments described in the '556 patent, but nonetheless, drafted the examples in the specification in past tense.  The Federal Circuit agreed with the District Court that "Dr. Sherman's conduct evidences a pattern of lack of candor… deceptive intent is the single most reasonable inference that can be drawn from the evidence."

The Federal Circuit affirmed the decision of the District Court of the Southern District of Florida, finding that the district court did not abuse its discretion in holding the '556 patent to be unenforceable due to inequitable conduct.