IP Law Daily, PATENT—D.N.J.: Lupin cannot amend answer in Jazz Pharmaceuticals’ infringement lawsuit, (Feb 21, 2025)

By Saurabh Kashyap, B.A., LL.B., LL.M.

Court finds proposed amendment futile as defendant failed to plead sufficient facts supporting inequitable conduct.

A federal district court in New Jersey denied a motion by Lupin Inc. to amend its answer in Jazz Pharmaceuticals Ireland Limited’s patent infringement lawsuit. The defendant sought to add a counterclaim asserting that Jazz’s asserted narcolepsy treatment patent was unenforceable due to inequitable conduct. The court held that the proposed amendment was futile, finding that the defendant failed to plead sufficient facts to establish that Jazz withheld material information from the U.S. Patent and Trademark Office (USPTO) with the specific intent to deceive. The court also ruled that the defendant failed to demonstrate the requisite diligence to satisfy the "good cause" standard under Local Patent Rule 3.7, further justifying the denial of its motion (Jazz Pharmaceuticals Ireland Limited v. Lupin Inc., No. 2:21-cv-14271-SRC-JSA (D.N.J. Feb. 18, 2025)).

Background. The plaintiff, Jazz Pharmaceuticals Ireland Limited, a subsidiary of Jazz Pharmaceuticals plc, is a global biopharmaceutical company specializing in sleep disorders and neurological treatments. The company holds patents related to its gamma-hydroxybutyrate (GHB) formulations, marketed under the brand name Xywav®, which is used to treat narcolepsy-related cataplexy and excessive daytime sleepiness.

The defendants, Lupin Inc., Lupin Pharmaceuticals, Inc., and Teva Pharmaceuticals, Inc., are major pharmaceutical manufacturers with substantial operations in the United States. Lupin and Teva have both developed generic versions of Jazz's GHB formulations, prompting litigation under the Hatch-Waxman Act.

Jazz’s asserted U.S. Patent No. 11,426,373 (the ’373 patent) covers a method of reducing food effects due to the administration of GHB in patients with narcolepsy. The patent claims a specific composition of GHB salts that purportedly achieves a reduced food effect compared to immediate-release GHB formulations.

Jazz filed this lawsuit alleging that Lupin and Teva’s generic formulations infringed the ’373 patent. During litigation, the defendant moved to amend its Answer to assert that Jazz engaged in inequitable conduct before the USPTO by withholding critical data from the FDA regulatory process and misrepresenting the extent of the reduced food effect. Jazz opposed the motion, arguing that the proposed counterclaim was legally insufficient and untimely.

Inequitable conduct. Lupin’s inequitable conduct counterclaim was based on two primary theories. First, it argued that Jazz withheld material data from the USPTO, particularly error bars showing statistical variability in GHB absorption data. The defendant contended that Jazz provided the FDA with complete statistical data—including error bars—but removed this information from the figures submitted to the USPTO. It alleged that this omission misrepresented the consistency of the reduced food effect, leading the USPTO to grant the patent on the mistaken belief that the improvement was significant and unexpected.

Second, Lupin asserted that Jazz failed to disclose prior art references cited in an internal consultant’s email (the Wilding email), which it argued undermined Jazz’s claims of an unexpected food effect reduction. The defendant alleged that Jazz’s own consultants had indicated that the observed differences in GHB absorption could be explained by known properties of magnesium salts, contradicting Jazz’s assertion that the claimed composition provided unexpected results.

Further, Lupin contended that the USPTO would not have granted the ’373 patent had it been aware of the omitted data and prior art references. It claimed that Jazz’s selective disclosure was intended to mislead the patent examiner, constituting inequitable conduct under Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), which requires clear and convincing evidence that a patent applicant both misrepresented or omitted material information and did so with specific intent to deceive.

Materiality of omitted data. The court rejected the defendant’s argument that the omitted error bars were material to patentability. It found that the defendant failed to explain how including error bars in Jazz’s USPTO submissions would have changed the examiner’s decision to allow the claims. The court noted that while Jazz had characterized the reduced food effect as “unexpected,” the examiner did not specify the magnitude of the effect in the Notice of Allowance. Moreover, the patent specification itself contained sufficient data to demonstrate the reduced food effect, making it implausible that the USPTO would have rejected the claims had it been aware of the omitted statistical variability.

Citing Belcher Pharms., LLC v. Hospira, Inc., 11 F.4th 1345 (Fed. Cir. 2021), the defendant argued that withholding material information from regulatory agencies could constitute inequitable conduct. However, the court distinguished Belcher, emphasizing that in the present case, the withheld information did not directly contradict the claimed invention.

Prior art and the Wilding email. The court similarly dismissed Lupin’s argument that Jazz improperly withheld prior art references. The defendant contended that the Wilding email cited studies showing that magnesium salts could influence gastric emptying, contradicting Jazz’s claims of an unexpected result. However, the court found that the defendant had not plausibly alleged that these prior art references would have rendered the claims unpatentable.

Citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007), the court reiterated that an obviousness determination requires more than simply identifying prior art references—it requires showing that a skilled artisan would have been motivated to combine them in a way that would have led to the claimed invention. The court found that the defendant had failed to meet this standard and that its inequitable conduct allegations amounted to mere hindsight-based assertions.

Intent to deceive. The court further held that the defendant had not plausibly alleged the specific intent required for inequitable conduct. Under Therasense, intent to deceive must be “the single most reasonable inference” from the evidence. The court found that the defendant's allegations failed to meet this high standard.

Instead of demonstrating deliberate deception, the court found that the differences between Jazz’s FDA and USPTO submissions were more likely attributable to differing regulatory standards. The court cited Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 855 F.3d 1356 (Fed. Cir. 2017), which distinguished between FDA and patent law requirements, noting that discrepancies between FDA submissions and patent prosecution do not necessarily indicate fraud.

Diligence. In addition to finding the proposed amendment legally insufficient, the court ruled that the defendant had not acted diligently in asserting its inequitable conduct claim. Under Local Patent Rule 3.7, amendments to pleadings require showing "good cause," which includes demonstrating diligence in uncovering and asserting new claims. The court found that the defendant had access to the relevant FDA and USPTO documents by late 2023 but waited until October 2024 to file its motion. The court determined that this delay undercut its claim of diligence and provided an independent basis for denying the motion.

The court, therefore, denied the defendant’s motion to amend its Answer, concluding that its inequitable conduct allegations lacked sufficient factual support and were untimely.

The Case is No. 2:21-cv-14271-SRC-JSA.

Judge: Chesler, S.

Attorneys: Alexander Lee Callo (Saul Ewing LLP) for Jazz Pharmaceuticals Ireland Ltd. James S. Richter (Midlige Richter LLC) for Lupin Inc., Lupin Inc., Lupin Pharmaceuticals, Inc., and Teva Pharmaceuticals, Inc.

Companies: Jazz Pharmaceuticals Ireland Ltd.; Lupin Inc.; Lupin Pharmaceuticals, Inc.; Teva Pharmaceuticals, Inc.,

Cases: Patent NewJerseyNews