IP News

On appeal, the panel held that the district court incorrectly focused on the lack of case or controversy as to whether Abbvie was infringing the patent-at-issue. Rather, the real dispute was whether invalidation of the patent would end Abbvie's contractual obligations under the licensing agreement with MedImmune under British contract law. The Federal Circuit noted that, “properly presented[,] such a contractual dispute could confer declaratory-judgment jurisdiction.” Id. at 1336-37. For example, in Powertech Technology Inc. v. Tessera, Inc., the Federal Circuit held that the parties' dispute as to whether a license agreement required royalty payments to be tied to valid patent coverage was sufficient to confer declaratory judgment jurisdiction. 660 F.3d 1301, 1308-10 (Fed. Cir. 2011).

Here, however, Abbvie did not seek a declaration of its contractual obligations, but rather only sought a declaration of patent invalidity, the adjudication of which would not resolve the parties' contractual dispute. The panel recited a Supreme Court principle that a party may not use a declaratory-judgment to obtain piecemeal resolution of an underlying controversy. Here, even if Abbvie proved that the patent-at-issue was invalid, there would still be “an open question whether British courts would consider the invalidation of a patent to be tantamount to its expiration for purposes of this agreement.” Id. at 1338.

Because this case did not fall under an exception to the rule against piecemeal adjudication, such as where co-pending litigation would resolve the outstanding issues in the parties' dispute, the panel affirmed the district court's decision dismissing the case for lack of declaratory-judgment jurisdiction.

Federal Circuit Affirms Non-Infringement Finding Despite Defendant's Discovery Violation

On Feb. 9, 2018, a Federal Circuit panel of Judges Taranto, Clevenger, and Stoll issued a unanimous opinion, authored by Judge Stoll, in Merck Sharp & Dohme Corp. v. Amneal Pharm. LLC, 881 F.3d 1376 (Fed. Cir. 2018). Because: 1) the district court did not abuse its discretion in denying Merck's requests for additional samples of Amneal's ANDA products; and 2) Merck failed to prove infringement as a matter of law, the panel affirmed.

The patent-at-issue claims a polymorph of mometasone furoate (MFA) called mometasone furoate monohydrate (MFM). MFM is used in Merck's Nasonex product for the treatment of allergic rhinitis and nasal polyps. The dispute arose when Amneal filed an ANDA seeking FDA approval to market a generic nasal spray containing MFA. Merck sued Amneal, alleging that although the active ingredient of the ANDA product was MFA, the MFA would convert to MFM over the product's shelf-life.

Amneal provided the FDA data on ANDA submission batches (Exhibit Batches) of its proposed product and submitted samples of the batches to Merck. However, it also submitted data to the FDA on a different, commercial-sized batch that it did not produce to Merck. The district court issued a discovery order requiring Amneal: 1) to file a declaration attesting that the Exhibit Batch samples were representative of Amneal's commercial ANDA product; and 2) to provide Merck with samples of any new representative samples of its commercial product sent to the FDA.

Amneal filed the ordered declaration, but in violation of the discovery order, did not provide Merck with samples of all subsequent batches it submitted to the FDA. Specifically, the FDA required Amneal to complete a “bulk-hold” study in which a commercial batch would be held for a four-day period before being packaged into nasal spray. Amneal drew samples from a new commercial batch it made for the study on multiple occasions: on the first day (Day 1 Batch); on day 4, after mixing (Day 4 Batch); and, after additional mixing and completion of the bulk-hold study (A Batch). Amneal only produced samples from the Day 1 Batch to Merck.

Six weeks before trial, Merck became aware of the Day 4 and A Batch samples and sought emergency relief from the court, arguing that samples from these batches should be produced, as additional mixing could promote conversion of MFA to MFM. In order not to delay trial, the district court decided not to compel Amneal to produce the additional samples, but gave Merck an opportunity to prove at trial the Day 4 and A Batch samples were materially different from the Day 1 Batch samples. Ultimately, however, the district court found that Merck failed to carry its burden of proving by a preponderance at trial that the additional samples would have contained MFM and that Amneal ANDA product would infringe the patent-at-issue.

On appeal, the panel began with the question whether the district court abused its discretion by denying Merck's request for the Day 4 and A Batches. The panel found that, although the question “is a close one,” the district court's decision not to compel discovery was reasonable given the timing of the dispute shortly before trial and the steps that the court took to ensure that proceeding with trial would not prejudice Merck. Id. at 1382. At trial, one of Merck's experts testified that his study, which involved seeding the Exhibit Batch with MFM and subjecting the mixture to vigorous shaking for 27 days, showed that MFA converted to MFM. Merck's other expert testified that, generally, additional mixing increases the likelihood of polymorphic conversion to MFM. The panel found, however, that this testimony only showed that MFA could convert into MFM with additional mixing, not that it would. Further, the panel commented that Merck's study did not attempt to recreate the conditions used to create the Day 4 and A Batch samples from the Day 1 Batch sample in Merck's possession.

The panel then turned to the question whether the district court erred in relying on the Day 1 Batch samples to find that Amneal's product would not infringe the patent-at-issue. Again, because Merck was given the opportunity — but failed at trial — to prove that the Day 4 and A Batch samples would have materially differed from the Day 1 Batch, the panel found that the district court did not clearly err in finding the Day 1 Batch representative of Amneal's final product. The panel further emphasized that Amneal's Day 1 Batch was not an intermediate product, but rather complied with Amneal's ANDA specification.

Finally, the panel held that there was no clear error in the district court's finding of noninfringement of the patent-at-issue. Merck's expert had testified that that he had tested the Day 1 Batch using Raman spectroscopy and identified a single “Raman peak” that was characteristic of MFM. However, the district court found that this testimony was rebutted by the credible testimony of Amneal's expert, who explained that three “Raman peaks” are typically used to confirm the presence of molecules in complex mixtures. The district court had also noted the District of New Jersey's decision in Schering Corp v. Apotex Inc., No. 09-6373, 2012 U.S. Dist. LEXIS 83414, 2012 WL 2263292 (D.N.J. June 15, 2012), which had considered similar testimony from the same Merck expert and concluded that three peaks were required to confirm MFM.

Because the district court did not clearly err in its decision not to compel discovery and its non-infringement decision, the Federal Circuit affirmed.

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Jeff Ginsberg is a Partner of Patterson Belknap Webb & Tyler LLP and Assistant Editor of this newsletter. Dorothy LeRay is an associate at the firm.