There Is Little Basis to Infer Intent to Deceive When Materiality Is Low
February 01, 2006
Judges: Gajarsa, Plager (author), Linn
In Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., Nos. 04-1189, -1347, -1357 (Fed. Cir. Feb. 1, 2006), the Federal Circuit withdrew its previous holding, vacated the district court’s holding that certain OxyContin® patents were unenforceable due to inequitable conduct, and remanded the case for further consideration regarding a determination of inequitable conduct. The Federal Circuit also affirmed the district court’s infringement holding.
Purdue Pharma L.P. and other related companies (collectively “Purdue”) asserted three patents directed to controlled release oxycodone medications for treatment of moderate to severe pain against Endo Pharmaceuticals Inc. and a related company (collectively “Endo”). The specification of each patent states: “It has now been surprisingly discovered that the presently claimed controlled release oxycodone formulations acceptably control pain over a substantially narrower, approximately fourfold [range] . . . in approximately 90% of patients. This is in sharp contrast to the approximately eight-fold range required for approximately 90% of patients for opioid analgesics in general.” Slip op. at 4, quoting U.S. Patent No. 5,549,912 (emphasis added).
In September 2000, Endo filed an ANDA with the FDA seeking approval to make and sell a generic version of Purdue’s OxyContin® formulation. By that time, Purdue had listed the three patents-in-suit in the Orange Book as covering OxyContin®. In October 2000, Purdue filed suit on the basis of Endo’s ANDA filing.
During the trial, Dr. Kaiko, a named inventor, testified that his “insight” led to the discovery of the reduced dosage range. Using his knowledge of opioids and oxycodone, he “envisioned” a four-fold dosage range in 90% of patients. Despite the absence of any clinical results to support this claim, Purdue repeatedly relied on the “discovery” of that reduced dosage range during the prosecution of the patents-in-suit to distinguish the invention from other prior art opioids. Moreover, Purdue used languagesuggesting the existence of clinical results supporting the reduced dosage range.
While the trial court found that Endo’s proposed generic drug product would infringe Purdue’s patents, it also held Purdue’s patents unenforceable due to inequitable conduct during prosecution of the patents. The district court found that Purdue’s failure to inform the PTO that its reduced dosage “discovery” supported only by Dr. Kaiko’s insight without any supportive clinical results constituted a failure to disclose material information that was inconsistent with arguments for patentability. The district court then inferred intent to deceive the PTO from the high materiality of the omission and Purdue’s inability to prove its reduced dosage claimfrom existing clinical trials. After weighing materiality and intent, the district court held the patents unenforceable due to inequitable conduct.
In its initial decision, Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., 410 F.3d 690 (Fed. Cir. 2005), the Federal Circuit affirmed the district court’s holding that the patents were unenforceable due to inequitable conduct. In that decision, the Court held that Purdue’s failure to disclose that the invention was not supported by clinical studies, despite its implications to the contrary, was material. The Court further held that intent to mislead could be inferred from Purdue’s statements in the context in which they were made and the clear pattern of misdirection evident throughout the prosecution of the patents.
In reconsidering its earlier decision on petition for rehearing, the Federal Circuit withdrew its previous decision, vacated the district court’s holding of inequitable conduct, and remanded the case for further consideration on the issue of inequitable conduct. According to the Court, Purdue did not make an affirmative misrepresentation. Though the requisite intent to deceive required for a finding of inequitable conduct may be inferred in some cases when a patentee has withheld highly material information such as a key prior art reference and knew or should have known of its materiality, Purdue’s failure to disclose to the PTO that its discovery was based on insight rather than experimental data did not rise to such a high level of materiality. The Court further explained that Purdue’s admitted inability to prove to the FDA with experimental results that OxyContin® was a more efficiently titratable analgesic than opioids did not necessarily conflict with Purdue’s statements to the PTO regarding discovery of a reduced dosage range. The quantum of proof necessary for FDA approval is significantly higher than that required by the PTO. Citing these errors in the trial court’s intent analysis, the Federal Circuit remanded the case for the district court to reconsider its intent finding and, if the trial court still finds a threshold level of intent to deceive, to reweigh its materiality and intent findings to determine whether the sanction of inequitable conduct is warranted.
The Federal Circuit also affirmed the trial court’s judgment of infringement despite the Court’s finding that the trial court erroneously construed the claims. The trial court impermissibly imported a limitation that the invention acceptably control pain for 90% of patients over a four-fold dosage range into the claim because Purdue described the four-fold dosage range “as a property of, or a result of administering,” not “a necessary feature” of the claimed oxycodone formulation. Endo did not challenge that other limitations are met. Therefore, the Court affirmed the infringement determination.