The U.S. Court of Appeal for the Federal Circuit affirmed the grant of a preliminary injunction against the launch of a generic version of PULMICORT RESPULES® inhalation suspension, an anti-inflammatory corticosteroid, concluding that AstraZeneca had shown a likelihood of success in its contention that the method claims, but not kit claims (which the district determined were invalid) infringe the patents-in-suit. AstraZeneca LP v. Apotex, Inc., Case Nos. 09-1381, 1424 (Fed. Cir., Nov. 1, 2010) (Linn, J.) (Bryson, J.; concurring-in-part; dissenting-in-part).
AstraZeneca owns patents covering methods and kits directed to once-daily administration of budesonide formulations to treat respiratory diseases in children. Apotex submitted an Abbreviated New Drug Application (ANDA) for U.S. Food and Drug Administration (FDA) approval to market a generic version of budesonide for twice-daily use, which was not claimed in either of the AstraZeneca patents in suit. As part of its submission, Apotex provided a statement asserting that it did not seek approval for the once-daily method of use claimed in the AstraZeneca patents and that the proposed generic label would not explicitly mention once-daily administration. The FDA approved the generic drug. However, the generic label did include FDA-mandated downward-titration language that also appeared on AstraZeneca’s label for its drug. One day after approval of the ANDA, AstraZeneca filed a declaratory judgment action for patent infringement and requested a preliminary injunction barring Apotex from distributing its generic drug. The district court had found that Apotex’s downward titration label would lead users to directly infringe the asserted method claims of the patents-in-suit, that Apotex had the requisite intent to induce infringement because it proceeded with its plan to market its drug despite knowing that the downward titration label posed infringement problems and that AstraZeneca would suffer irreparable harm. Apotex appealed.
Likelihood of Success on the Merits
Apotex argued that AstraZeneca had failed to establish a likelihood of success that it could prove validity and infringement of the method claims, reiterating arguments that the asserted method claims were anticipated a prior art patent and an AstraZeneca advertisement in the British medical journal Thorax. The Federal Circuit found its analysis on the claim terms “budesonide composition,” which the district court had construed as “budesonide dispersed in a solvent in the form of a solution or suspension” but excluding liposomes (as described in the prior art). At the district court, AstraZeneca offered expert testimony that distinguished the AstraZeneca patent from the prior art, and the district court relied on that expert testimony to arrive at its narrow construction that avoided the prior art.
Apotex argued that in arriving at its claim construction, the district court improperly disregarded that the AstraZeneca patents discloses budesonide formulations that include liposomes and improperly relied on contradictory expert testimony. The Federal Circuit disagreed, noting that the specification supported the conclusion that a person of ordinary skill would have understood that the AstraZeneca patents teaches that budesonide either dissolved or floating in a solvent may be placed within a liposome, but not that the budesonide is separated from a solvent by a liposome as taught in the prior art. Additionally, the Federal Circuit pointed out that the district court’s reliance on expert testimony was proper because the testimony was useful for understanding how the claimed invention works and for construing “budesonide composition” consistently with that understanding.
Regarding AstraZeneca’s Thorax advertisement, Apotex argued that if the language of the advertisement (which recommends an initial twice-daily dose) suggests the possibility of administering the drug once daily, then it would have suggested that possibility when the advertisement was first published, regardless of when it was proven that the drug is effective when administered only once daily. AstraZeneca argued that because at the time of the advertisement the drug was approved for only twice-daily use and was not known to be safe and effective for once-daily administration, there is nothing to show that a person of ordinary skill in the art at the time the patent application was filed would have understood the advertisement to disclose once-daily dosing. The Federal Circuit agreed with the district court that from the advertisement, a skilled artisan would have concluded that the recommended dose is a maintenance dose that should be administered twice daily.
Regarding inducement, the evidence showed that Apotex was aware and even concerned about the possibility that its label created a potential infringement problem, but nevertheless proceeded to market its generic drug. The district court specifically considered a letter from the FDA that explicitly stated that downward titration may involve once-daily dosing.
Apotex had approached the FDA about altering the label by adding “twice daily” to the downward-titration language, adding language that the drug is not approved for less than twice-daily use and removing the downward-titration language. However, the FDA would not permit any of these changes. On the basis of the evidence, the Federal Circuit affirmed on the issue of inducement, noting that Apotex had options to remedy the situation that it chose not to pursue. For example, Apotex could have formally appealed the FDA decision, filed a suitability petition or a paper New Drug Application (NDA) seeking approval to produce the generic drug at strength that did not teach an infringing use, submitted a Paragraph III certification and waited until the patents expired before marketing its generic drug, and filed a Paragraph IV certification and challenge the infringement and validity of the asserted claims. The Court discounted Apotex (and amici) argument that the labeling alone was not sufficient evidence of specific intent to induce infringement.
The Federal Circuit found that AstraZeneca would suffer three types of harm if the preliminary injunction was not granted. First, while there existed a confidential settlement agreement between AstraZeneca and Teva regarding the sale of generic budesonide, it would not be possible to calculate the economic harm from a premature launch of Apotex’s generic drug. Second, AstraZeneca would suffer unquantifiable damage to its reputation and goodwill with patients and doctors if Apotex were permitted to launch its drug and subsequently forced to remove it from the market. Third, the damage to AstraZeneca as a result of layoffs if Apotex launched its product would be significant and unquantifiable.
Judge Bryson, in dissent, explained that both the prior art patent and AstraZeneca’s Thorax advertisement cast sufficient doubt on the validity of the method claims to preclude preliminary injunctive relief.