IP News

The Hatch-Waxman Act provides that the first generic company to challenge the Orange Book patents is entitled to a 180-day period of exclusive marketing rights. The exclusivity period can be triggered by one of two events: 1) commercial marketing of the drug by the first generic filer, or 2) entry of a court judgment finding the listed patents invalid or not infringed, whichever happens first.

In the case of Aricept, Ranbaxy Pharmaceuticals is the first filer, with Teva having filed two Abbreviated New Drug Applications (“ANDA”) after Ranbaxy: The first ANDA challenged a single patent for Aricept (“the '841 patent”). The second ANDA was filed through Gate Pharmaceuticals, a division of Teva, and was directed to a different form of generic Aricept. These two ANDAs resulted in two separate litigations, both in the District of New Jersey.

In February 2008, Eisai moved for and received a preliminary injunction in the first action to prevent Teva and Gate from marketing any form of generic Aricept. At the time of the appeal, this litigation was still ongoing and the preliminary injunction was still in effect.

In May 2008, Teva filed a declaratory judgment action against Eisai regarding the four patents related to the second ANDA, filed by Gate Pharmaceuticals. Before the filing of this action, Eisai filed statutory disclaimers canceling the claims of two of the four patents, though those patents remained listed in the Orange Book.

Shortly after the declaratory judgment action began, Eisai moved to dismiss the case for lack of subject matter jurisdiction. While that motion was pending, the parties negotiated a covenant-not-to-sue covering the two patents that Eisai had not disclaimed. Eisai relied on this covenant-not-to-sue as well as the statutory disclaimers while arguing that there was no justiciable controversy between the two parties.

Chief Judge Garrett E. Brown, Jr. of the District of New Jersey granted Eisai's motion to dismiss. On appeal, the Federal Circuit reversed, holding that the listing of the patents in the Orange Book, even though two contained canceled claims and two were subject to a covenant-not-to sue, is all that is necessary to maintain an actual controversy between the two parties.

The Federal Circuit reached this result because Teva still needs a judgment of noninfringement or invalidity to trigger Ranbaxy's exclusivity period, which will eventually lead to Teva obtaining FDA approval and entering the market. The court found the preliminary injunction in the parallel case unpersuasive, noting that its “preliminary” nature does not eliminate the existence of a controversy. Finally, the Federal Circuit held that declaratory judgment jurisdiction exists even though the patent owner could not have brought an infringement action to enforce the patents.

Two Inequitable Conduct Rulings Shape Litigations in Eastern District of Texas

On Oct. 29, 2010 Verizon, Inc. scored a win in its case against TiVo Inc. when Judge David Folsom struck TiVo's claims that two of the six patents Verizon is asserting were unenforceable due to inequitable conduct. TiVo, Inc. v. Verizon Communications, Inc., 09-cv-00257 (E.D. Tex. 2010).

In August 2009, TiVo filed separate patent infringement suits against Verizon and AT&T, accusing each of infringing three patents related to digital video recording. In February 2010, Verizon counterclaimed that TiVo is infringing several of Verizon's own patents regarding the same technology. As part of its defense to these claims, TiVo counterclaimed that several of the asserted Verizon patents were unenforeceable because they were fraudulently prosecuted before the U.S. Patent and Trademark Office (“PTO”).

Judge Folsom ruled that these pleadings did not contain facts specific enough to satisfy the stringent standards for pleading inequitable conduct, and struck TiVo's counterclaims. He did, however, give TiVo leave to amend its allegations that Verizon withheld certain material prior art from the PTO.

In an unrelated case, MedioStream, Inc. v. Microsoft Corp., 08-cv-0369 (E.D. Tex. 2010), Magistrate Judge Charles Everingham denied MedioStream's motions seeking to dismiss inequitable conduct affirmative defenses and counterclaims from the case.

MedioStream is suing major technology companies including Microsoft, Apple, and Sony for infringing their patents for direct recording of video information onto a disk medium. In their answers, the defendants asserted inequitable conduct defenses and counterclaims alleging that MedioStream misled the PTO when prosecuting its patents, specifically by failing to disclose related prior art and failing to disclose prior rejections in related applications.

MedioStream filed a motion to dismiss these counterclaims on the grounds that the strict pleading standard for inequitable conduct was not met, but Judge Everingham disagreed, noting that for each act of inequitable conduct, the defendants had specifically identified at least one individual who withheld information.

Medical Device Maker Wins $60 Million Verdict in Trademark Suit

A federal jury in the Central District of California found that NuVasive, Inc., a maker of products used in spinal surgery, willfully infringed Neurovision Medical Products, Inc.'s Neurovision trademark, awarding the plaintiff $60 million in damages. Neurovision Medical Products, Inc. v. NuVasive, Inc., 09-cv-6988 (C.D. Cal. 2010).

Neurovision filed the suit in September 2009, alleging that NuVasive was infringing Neurovision's trademark in connection with surgical equipment. Neurovision claimed that the mark had been in use since 1993, and that NuVasive began using the Neurovision mark without authorization after the two companies broke off talks in connection with a contract for the use of Neurovision's products.

The jury concluded that NuVasive not only infringed the trademark, but did so willfully, leading to an enhanced damages award. The $60 million damages amount is not final and may change based on post-trial motions, or on appeal.

Second Circuit Gives New Life to Counterfeit Jeans Suit

The Second Circuit has reinstated a case by Famous Horse, Inc., the operator of the V.I.M. retail chain, which claims that a supplier of allegedly counterfeit jeans bearing the “Rocawear” mark violated the Lanham Act. Famous Horse v. 5th Avenue Photo, Inc., 08-cv-4253 (2d Cir. 2010). The suit alleges that the supplier, 5th Avenue Photo, Inc., falsely represented to other potential buyers that V.I.M. was a satisfied customer.

In May 2008, the Southern District of New York dismissed the complaint for failure to state a claim, ruling that trademark infringement requires “alleged confusion as to the source of a product,” and false endorsement requires “likelihood of confusion between the parties' products.”

The Second Circuit panel of Judge Robert D. Sack, Judge Debra Ann Livingston, and Judge Gerard E. Lynch reversed the lower court's decision, holding that under either provision confusion need not be as to the origin of the product. The panel noted that the allegedly infringing advertisements used the V.I.M. trademark in stating that V.I.M. was a satisfied customer, thus satisfying the Lanham Act's requirements that the defendant used in commerce a “reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution or advertising” of the plaintiff's services in a way that was “likely to cause confusion, or to cause mistake, or to deceive.” The Second Circuit specifically noted that ' 43(a) of the Lanham Act specifically defines causing confusion as to affiliation, association, or sponsorship as infringing activity.

Judge Livingston dissented, agreeing with most of the majority opinion but reasoning that the plaintiff lacked standing to sue on the unfair competition claim. Judge Livingston relied on the five-factor test for standing enunciated in Conte Bros. Automotive Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221 (3d Cir. 1998). Applying the test, Judge Livingston concluded that only one of the five factors weighed in favor of finding standing.

Jeffrey S. Ginsberg is a partner and Joseph Mercadante is an associate in the New York office of Kenyon & Kenyon LLP.

Standing of Subsequent Paragraph IV Filers Confirmed By Federal Circuit

On Oct. 6, 2010, a Federal Circuit panel consisting of Chief Judge Randall Ray Rader, Judge Timothy B. Dyk, and Judge Sharon Prost issued its ruling in Teva Pharmaceuticals v. Eisai Co., Civ. No. 2009-1593. Judge Prost, writing for the panel, held that Teva had standing to sue Eisai under Article III of the U.S. Constitution.

The case was on appeal from the District of New Jersey, and involved Teva's desire to manufacture and market a generic version of Aricept, a drug used in the treatment of Alzheimer's disease. Eisai holds five patents for Aricept listed in the Orange Book.

The Hatch-Waxman Act provides that the first generic company to challenge the Orange Book patents is entitled to a 180-day period of exclusive marketing rights. The exclusivity period can be triggered by one of two events: 1) commercial marketing of the drug by the first generic filer, or 2) entry of a court judgment finding the listed patents invalid or not infringed, whichever happens first.

In the case of Aricept, Ranbaxy Pharmaceuticals is the first filer, with Teva having filed two Abbreviated New Drug Applications (“ANDA”) after Ranbaxy: The first ANDA challenged a single patent for Aricept (“the '841 patent”). The second ANDA was filed through Gate Pharmaceuticals, a division of Teva, and was directed to a different form of generic Aricept. These two ANDAs resulted in two separate litigations, both in the District of New Jersey.

In February 2008, Eisai moved for and received a preliminary injunction in the first action to prevent Teva and Gate from marketing any form of generic Aricept. At the time of the appeal, this litigation was still ongoing and the preliminary injunction was still in effect.

In May 2008, Teva filed a declaratory judgment action against Eisai regarding the four patents related to the second ANDA, filed by Gate Pharmaceuticals. Before the filing of this action, Eisai filed statutory disclaimers canceling the claims of two of the four patents, though those patents remained listed in the Orange Book.

Shortly after the declaratory judgment action began, Eisai moved to dismiss the case for lack of subject matter jurisdiction. While that motion was pending, the parties negotiated a covenant-not-to-sue covering the two patents that Eisai had not disclaimed. Eisai relied on this covenant-not-to-sue as well as the statutory disclaimers while arguing that there was no justiciable controversy between the two parties.

Chief Judge Garrett E. Brown, Jr. of the District of New Jersey granted Eisai's motion to dismiss. On appeal, the Federal Circuit reversed, holding that the listing of the patents in the Orange Book, even though two contained canceled claims and two were subject to a covenant-not-to sue, is all that is necessary to maintain an actual controversy between the two parties.

The Federal Circuit reached this result because Teva still needs a judgment of noninfringement or invalidity to trigger Ranbaxy's exclusivity period, which will eventually lead to Teva obtaining FDA approval and entering the market. The court found the preliminary injunction in the parallel case unpersuasive, noting that its “preliminary” nature does not eliminate the existence of a controversy. Finally, the Federal Circuit held that declaratory judgment jurisdiction exists even though the patent owner could not have brought an infringement action to enforce the patents.

Two Inequitable Conduct Rulings Shape Litigations in Eastern District of Texas

On Oct. 29, 2010 Verizon, Inc. scored a win in its case against TiVo Inc. when Judge David Folsom struck TiVo's claims that two of the six patents Verizon is asserting were unenforceable due to inequitable conduct. TiVo, Inc. v. Verizon Communications, Inc., 09-cv-00257 (E.D. Tex. 2010).

In August 2009, TiVo filed separate patent infringement suits against Verizon and AT&T, accusing each of infringing three patents related to digital video recording. In February 2010, Verizon counterclaimed that TiVo is infringing several of Verizon's own patents regarding the same technology. As part of its defense to these claims, TiVo counterclaimed that several of the asserted Verizon patents were unenforeceable because they were fraudulently prosecuted before the U.S. Patent and Trademark Office (“PTO”).

Judge Folsom ruled that these pleadings did not contain facts specific enough to satisfy the stringent standards for pleading inequitable conduct, and struck TiVo's counterclaims. He did, however, give TiVo leave to amend its allegations that Verizon withheld certain material prior art from the PTO.

In an unrelated case, MedioStream, Inc. v. Microsoft Corp., 08-cv-0369 (E.D. Tex. 2010), Magistrate Judge Charles Everingham denied MedioStream's motions seeking to dismiss inequitable conduct affirmative defenses and counterclaims from the case.

MedioStream is suing major technology companies including Microsoft, Apple, and Sony for infringing their patents for direct recording of video information onto a disk medium. In their answers, the defendants asserted inequitable conduct defenses and counterclaims alleging that MedioStream misled the PTO when prosecuting its patents, specifically by failing to disclose related prior art and failing to disclose prior rejections in related applications.

MedioStream filed a motion to dismiss these counterclaims on the grounds that the strict pleading standard for inequitable conduct was not met, but Judge Everingham disagreed, noting that for each act of inequitable conduct, the defendants had specifically identified at least one individual who withheld information.

Medical Device Maker Wins $60 Million Verdict in Trademark Suit

A federal jury in the Central District of California found that NuVasive, Inc., a maker of products used in spinal surgery, willfully infringed Neurovision Medical Products, Inc.'s Neurovision trademark, awarding the plaintiff $60 million in damages. Neurovision Medical Products, Inc. v. NuVasive, Inc., 09-cv-6988 (C.D. Cal. 2010).

Neurovision filed the suit in September 2009, alleging that NuVasive was infringing Neurovision's trademark in connection with surgical equipment. Neurovision claimed that the mark had been in use since 1993, and that NuVasive began using the Neurovision mark without authorization after the two companies broke off talks in connection with a contract for the use of Neurovision's products.

The jury concluded that NuVasive not only infringed the trademark, but did so willfully, leading to an enhanced damages award. The $60 million damages amount is not final and may change based on post-trial motions, or on appeal.

Second Circuit Gives New Life to Counterfeit Jeans Suit

The Second Circuit has reinstated a case by Famous Horse, Inc., the operator of the V.I.M. retail chain, which claims that a supplier of allegedly counterfeit jeans bearing the “Rocawear” mark violated the Lanham Act. Famous Horse v. 5th Avenue Photo, Inc., 08-cv-4253 (2d Cir. 2010). The suit alleges that the supplier, 5th Avenue Photo, Inc., falsely represented to other potential buyers that V.I.M. was a satisfied customer.

In May 2008, the Southern District of New York dismissed the complaint for failure to state a claim, ruling that trademark infringement requires “alleged confusion as to the source of a product,” and false endorsement requires “likelihood of confusion between the parties' products.”

The Second Circuit panel of Judge Robert D. Sack, Judge Debra Ann Livingston, and Judge Gerard E. Lynch reversed the lower court's decision, holding that under either provision confusion need not be as to the origin of the product. The panel noted that the allegedly infringing advertisements used the V.I.M. trademark in stating that V.I.M. was a satisfied customer, thus satisfying the Lanham Act's requirements that the defendant used in commerce a “reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution or advertising” of the plaintiff's services in a way that was “likely to cause confusion, or to cause mistake, or to deceive.” The Second Circuit specifically noted that ' 43(a) of the Lanham Act specifically defines causing confusion as to affiliation, association, or sponsorship as infringing activity.

Judge Livingston dissented, agreeing with most of the majority opinion but reasoning that the plaintiff lacked standing to sue on the unfair competition claim. Judge Livingston relied on the five-factor test for standing enunciated in Conte Bros. Automotive Inc. v. Quaker State-Slick 50, Inc. , 165 F.3d 221 (3d Cir. 1998). Applying the test, Judge Livingston concluded that only one of the five factors weighed in favor of finding standing.

Jeffrey S. Ginsberg is a partner and Joseph Mercadante is an associate in the New York office of Kenyon & Kenyon LLP.