IP Law Daily, PATENT—Fed Cir.: Drug patent invalidation reversed because court used a reason not raised at trial, (Sep 18, 2024)

By Robert B. Barnett Jr., J.D.

If a defendant raises patent invalidity grounds only under 35 U.S.C. §112, the court has no right to invalidate the patent on grounds under 35 U.S.C. §101.

The Federal Circuit has reversed a Delaware district court’s decision invalidating three claims of Astellas Pharma’s patent for Myrbetriq, used to treat an overactive bladder, because the district court “misapprehended its role in adjudicating the issue of patentability.” Instead of presuming patent validity and determining whether the defenses offered by the defendant Zydus Pharmaceuticals under 35 U.S.C. §112 had merit, which was the court’s proper role, the trial court made an independent decision that the claims were invalid under 35 U.S.C. §101, as directed to an ineligible natural law, which was a defense never raised at trial (Astellas Pharma, Inc. v. Sandoz, Inc., Nos. 23-2032, 23-2063, and 23-2089 (Fed. Cir. Sept. 18, 2024)).

Background. In 2012, the FDA approved a new drug for extended-release mirabegron tablets for the treatment of an overactive bladder, which was marketed by Astellas Pharma under the brand name Myrbetriq. Astellas’s patent for Myrbetriq is U.S. Patent 10,842.780 (the ‘780 patent).

As Mybetriq was being developed, Astellas discovered a problem: the drug’s bioavailability was affected by the presence or absence of food in a patient’s stomach. Too much food, the drug was ineffectual. Too little food, the drug could be toxic. Thus, Astellas developed a sustained-release formulation of mirabegron, which allowed the drug to be released in such a way to avoid the undesirable food effect. The time-release formulations were included in the ‘780 patent.

The ’780 patent includes two independent claims, each of which is directed to a sustained-release composition. The first one sets forth the exact pharmaceutical composition for the sustained release hydrogel-forming formulation, which includes claim 5 and claim 20, both relevant to this lawsuit. The second independent claim is a slightly different hydrogel-forming formulation, which includes claim 25, the third and final key claim in this lawsuit.

On the same day the patent was issued, Astellas sued Sandoz Inc., Zydus Pharmaceuticals (USA) Inc., Zydus LifeSciences Ltd, Lupin Pharmaceuticals, Inc., and Lek Pharmaceuticals, D.D., (hereafter, collectively referred to as “Sandoz”) in Delaware federal court for patent infringement. As trial neared, the parties narrowed their theories of the case. Astellas agreed to assert patent infringement claims only under claims 5, 20, and 25 of the ‘780 patent. Sandoz, meanwhile, agreed to limit its defenses to claims of invalidity under 35 U.S.C. §112.

After a five-day bench trial, the Delaware district court ruled that the three claims were invalid under 35 U.S.C. §101. More specifically, the court ruled that the three claims were invalid because they relied on formulations depending upon the natural law of food dissolution “via routine, conventional, and well-known methods.” Astellas appealed the decision to the Federal Circuit.

Patent claim invalidity. Important to this litigation, the Federal Circuit said, was the “cornerstone” of patent litigation found in 35 U.S.C. §282, which holds that patents are presumed valid and that the burden of establishing otherwise rests with the party asserting invalidity. Thus, the court’s role is never to declare a patent valid; instead, it is merely to determine whether the party asserting invalidity has proved the grounds asserted. The district court erred, the Federal Circuit ruled, because it forgot, neglected, or misunderstood this basic principle.

The district court erred, the appellate court said, when it determined that Astellas “conceded” that the ‘780 patent was enabled because it claimed invalid subject matter via well-known methods. The district court then used that “concession” to hold the patent claims invalid. Doing so was an abuse of discretion, the Federal Circuit concluded. The district court had no right to “chart the course of the litigation” because it is the parties’ right to do so, not the court’s right.

In addition, the district court erred by apparently presuming that patent eligibility under 35 U.S.C. §101 was a threshold inquiry, like subject matter jurisdiction. It is not. The presumption of patent validity “applies equally to all grounds of validity, including the eligibility of the claimed subject-matter” because the Patent and Trademark Office has already examined whether the prerequisites have been satisfied.

The Federal Circuit then dismissed all of Sandoz’s efforts to justify the lower court’s ruling. For example, Sandoz argued that the Supreme Court has long allowed courts to consider the eligibility or validity of patents. Those citations, however, were all to Supreme Court cases in the 1800s, long before the Patent Act of 1952 created the presumption that patents were valid. In addition, Sandoz argued that public policy justified the lower court’s decision. Such public responsibility concerns, the appellate court ruled, have long been rejected in favor of the policy preventing trial courts from straying from their authority.

The Federal Circuit, therefore, ruled that lower court abused its discretion by holding the claims invalid under 35 U.S.C. §101 because the ground was not invoked by Sandoz at trial. The case was reversed and remanded for further adjudication.

Reassignment. The Federal Circuit then turned to one final issue, which involved Astellas’ request that the case be reassigned on remand to a different district court judge. Astellas cited the trial court’s two “rather extraordinary” post-trial decisions, which revealed a lack of impartiality and fairness (the judge made statements highly critical of pharmaceutical industry greed).

The Federal Circuit denied the request. Reassignment is an exceptional remedy, to be made sparingly. In doing so, the appellate court rejected Astellas’ argument that the trial court’s failure to abide by the arguments presented was enough by itself to justify reassignment. Erroneous rulings, by themselves, are not proof of bias or prejudice. Ultimately, while questioning the trial court’s inclusion of the negative comments in his ruling, the Federal Circuit noted that the trial judge had overseen nearly 200 patent cases, ruling both in favor of and against pharmaceutical companies. No evidence other than these post-trial comments from the four-year litigation was offered as proof of the court’s bias or prejudice. Thus, the Federal Circuit expressed confidence that the trial court could make reasoned decisions applying the rules set forth in its opinion.

The Federal Circuit, therefore, vacated and remanded the trial court’s judgment.

The Case is Nos. 23-2032, 23-2063, and 23-2089.

Judge: Lourie, A.

Attorneys: Paul Whitfield Hughes, III (McDermott Will & Emery LLP for Astellas Pharma, Inc., Astellas Ireland Co., Ltd., and Astellas Pharma Global Development, Inc. William R. Zimmerman (Knobbe, Martens, Olson & Bear, LLP) for Sandoz Inc., Zydus Pharmaceuticals (USA) Inc., Zydus LifeSciences Ltd, Lupin Pharmaceuticals, Inc., and Lek Pharmaceuticals, D.D. Kevin Patrick Burke (Rakoczy Molino Mazzochi Siwik LLP) for Sandoz Inc. and Lek Pharmaceuticals, D.D. Michael Gaertner (Locke Lord LLP) for Zydus Pharmaceuticals (USA) Inc., and Zydus Lifesciences Ltd.

Companies: Astellas Pharma, Inc.; Astellas Ireland Co., Ltd.; Astellas Pharma Global Development, Inc.; Sandoz Inc.; Zydus Pharmaceuticals (USA) Inc.; Zydus LifeSciences Ltd; Lupin Pharmaceuticals, Inc.; Lek Pharmaceuticals, D.D

Cases: Patent FedCirNews DelawareNews GCNNews