IP Law Daily, PATENT—Fed. Cir.: Patents asserted by The Medicines Company were invalid under the on-sale bar, (Jul 2, 2015)

By Peter Reap, J.D., LL.M.

U.S. Patent Nos. 7,582,727 and 7,598,343, relating to the drug bivalirudin and asserted by The Medicines Company against Hospira, were invalid under the on-sale bar because bivalirudin batches prepared by Ben Venue Laboratories before the critical date were sold to The Medicines Company and were not prepared primarily for an experimental purpose, the U.S. Court of Appeals for the Federal Circuit has ruled (The Medicines Company v. Hospira, Inc., July 2, 2015, Hughes, T.). Thus, a federal district court’s finding that the on-sale bar did not apply was reversed, and the appellate court declined to reach the other issues raised by the parties.

Background. The Medicines Company owns the ‘727 and ‘343 patents. The patents relate to the drug bivalirudin, a synthetic peptide used as an anti-coagulant.

The Medicines Company sells a bivalirudin drug for injection under the Angiomax® brand. From 1997 to October 2006, The Medicines Company purchased pharmaceutical batches of Angiomax® from Ben Venue Laboratories. In 2005, Ben Venue created a batch of bivalirudin with levels of Asp9-bivalirudin impurity that exceeded the Food and Drug Administration’s approved maximum of 1.5%. Accordingly, The Medicines Company could not use the batch.

After another batch failure, The Medicines Company hired a consultant, Dr. Musso, to investigate and resolve the issue. Dr. Musso discovered that certain methods of adding a pH-adjusting solution during the compounding process minimize the Asp9-bivalirudin impurity to less than 0.6%. In July 2008, The Medicines Company filed applications for the ’343 and ’727 patents, which include product-by-process claims describing this discovery.

Over one year before filing these applications, however, The Medicines Company hired Ben Venue to prepare three batches of bivalirudin using an embodiment of the patented method, the court noted. Each lot was marked with a commercial product code and a customer lot number, and was released to The Medicines Company for commercial and clinical packaging.

On August 19, 2010, The Medicines Company filed this suit against Hospira, Inc., alleging that two of Hospira’s ANDA filings infringe claims 1–3, 7–10, and 17 of the ’727 patent and claims 1–3 and 7–11 of the ’343 patent. The district court construed the asserted claims and, after a bench trial, found the patents not infringed and not invalid as obvious, indefinite, or under the on-sale bar. The Medicines Company appealed the district court’s claim construction and finding of non-infringement. Hospira appeals the district court’s holdings on obviousness, indefiniteness, and the on-sale bar.

The on-sale bar. The on-sale bar under 35 U.S.C. § 102(b) applies when, before the critical date, the claimed invention (1) was the subject of a commercial offer for sale; and (2) was ready for patenting.

The district court found that the claimed invention was ready for patenting but not commercially offered for sale before the critical date. The district court concluded that no commercial sale occurred because: (1) Ben Venue only sold manufacturing services, not pharmaceutical batches; and (2) the batches fall under the experimental use exception.

While the district court was correct that Ben Venue invoiced the sale as manufacturing services and title to the pharmaceutical batches did not change hands, that did not end the inquiry, according to the appellate court. To ensure that the doctrine is not easily circumvented, the Federal Circuit has found the on-sale bar to apply where the evidence clearly demonstrated that the inventor commercially exploited the invention before the critical date, even if the inventor did not transfer title to the commercial embodiment of the invention. For example, in D.L. Auld Co., the Federal Circuit found the on-sale bar to apply where, before the critical date, an inventor sold products made by the patented method. D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147 (Fed. Cir. 1983).

There was no principled distinction between the commercial sale of products prepared by the patented method at issue in D.L. Auld Co. and the commercial sale of services that result in the patented product-by-process here, the court reasoned. The Medicines Company paid Ben Venue for performing services that resulted in the patented product-by-process, and thus a “sale” of services occurred. See Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353, 1355 (Fed. Cir. 2001). As in D.L. Auld Co., the sale of the manufacturing services here provided a commercial benefit to the inventor more than one year before a patent application was filed.

Accordingly, the district court clearly erred in finding the Ben Venue sale of services did not constitute a commercial sale. To find otherwise would allow The Medicines Company to circumvent the on-sale bar simply because its contracts happened to only cover the processes that produced the patented product-by-process. This would be inconsistent with the Federal Circuit’s principle that “no ‘supplier’ exception exists for the on-sale bar.” Special Devices, 270 F.3d at 1357.

The district court also clearly erred in finding that the experimental use doctrine bars the application of the on-sale bar to the Ben Venue batches, the court held. The Medicines Company asserted that it had not reduced the invention to practice when the batches were made because it did not appreciate the maximum impurity level limitation of the claimed invention until after twenty-five batches of bivalirudin were manufactured according to The Medicine Company’s new process. “However, [the Federal Circuit has] held that where an invention is on sale, conception is not required to establish reduction to practice.” Scaltech, Inc. v. Retec/Tetra, LLC, 269 F.3d 1321, 1331 (Fed. Cir. 2001). This was not a situation in which the inventor was unaware that the invention had been reduced to practice, and was experimenting to determine whether that was the case, according to the court. The batches sold satisfied the claim limitations, and the inventor was well aware that the batches had levels of Asp9-bivalirudin well below the claimed levels of 0.6%.

Finally, The Medicines Company argued that the district court erred in finding its invention was ready for patenting because there was no reduction to practice and the inventors had not prepared drawings or written descriptions sufficient to enable a person skilled in the art to practice the invention. But because the invention was sold, the Ben Venue batches reduced the invention to practice, the court said. Thus, the district court did not clearly err in finding the invention was ready for patenting.

The case is Nos. 2014-1469 and 2014-1504.

Attorneys: Edgar Hauf (Frommer Lawrence & Haug LLP) for The Medicines Company. Bradford Peter Lyerla (Jenner & Block LLP) for Hospira, Inc.

Companies: The Medicines Company; Hospira, Inc.

Cases: Patent FedCirNews