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Par Pharmaceuticals, Inc. v. Twi Pharmaceuticals, Inc.

United States District Court, D. Maryland

February 21, 2014



CATHERINE C. BLAKE, District Judge.

Plaintiffs Par Pharmaceuticals Inc. and Alkermes Pharma Ireland, Limited (collectively, "Par") filed this action against TWi Pharmaceuticals, Inc. ("TWi") alleging infringement of U.S. Patent 7, 101, 576 ("the 576 patent"). The patent relates to Par's Megace ES medication, a nanoparticulate formulation of megestrol acetate used to treat anorexia, cachexia, and unexplained weight loss in patients with HIV and AIDS. After this court's summary judgment order, and prior to trial, the parties stipulated that TWi's generic version of Megace ES would infringe the asserted claims of the 576 patent, leaving before this court only TWi's defense that the 576 patent is invalid and its claim that Par Pharmaceuticals, Inc. does not have standing to bring suit as co-plaintiff. A five-day bench trial to determine the remaining claims was held in October 2013. After hearing the evidence and considering the post-trial briefs, the court concludes that the 576 patent was obvious, and thus invalid.[1] Pursuant to Federal Rule of Civil Procedure 52(a), the following memorandum constitutes the court's findings of fact and conclusions of law.


In 1993, Bristol Meyers Squibb ("BMS") began marketing Megace OS, an oral suspension of micronized megestrol acetate, [2] to treat anorexia and cachexia in AIDS patients. The drug was a medical and commercial success. In fact, the FDA subsequently approved five abbreviated new drug applications ("ANDAs") for generic versions of Megace OS, including one submitted by Par. According to TWi, by 2005, Par had the majority of the generic Megace OS market, with approximately $25 million in annual sales.

During experimentation with reformulating the drug to reduce the particle size of the megestrol acetate to the nanoparticulate range (using Alkermes's already patented "NanoCrystal" technology), the inventors of the 576 patent discovered, "surprisingly, " according to Par, that BMS's Megace OS exhibited low bioavailability when administered to a patient without food and much higher absorption when administered with food. Par asserts that this "strong food effect" was previously unknown and that it is a significant weakness in Megace OS because the target patients of the drug are individuals suffering from conditions with low appetites, thus making it unlikely the drug can be administered in a sufficiently fed state. The 576 patent inventors discovered, however, that their new nanoparticulate formulation resulted in dramatically improved bioavailability in the fasted state and reduced the absorption difference between the fed and fasted states. The 576 inventors filed for patent protection for this new formulation in 2002. The Patent Office rejected the application several times because it deemed the claimed invention obvious in light of the prior art. ( See, e.g., Pl.'s Trial Ex., [hereinafter PTX], 359.) After Par amended its application to highlight the reduced fed-fasted effect, (Def.'s Trial Ex., [hereinafter DTX], 248), the Patent Office eventually granted the application and issued the patent in 2006.

The 576 patent claims a method of treating wasting in humans. Claim 1 is representative of the asserted independent claims:

"A method of increasing the body mass in a human patient suffering from anorexia, cachexia, or loss of body mass, comprising administering to the human patient a megestrol formulation, wherein:
(a) the megestrol acetate formulation is a dose of about 40 mg to about 800 mg in about a 5 mL dose of an oral suspension;
(b) the megestrol acetate formulation comprises megestrol particles having an effective average particle size of less than about 2000 nm, and at least one surface stabilizer associated with the surface of the megestrol particles; and
(c) the administration is once daily; wherein after a single administration in a human subject of the formulation there is no substantial difference in the Cmax of megestrol when the formulation is administered to the subject in a fed versus a fasted state, wherein fasted state is defined as the subject having no food within at least the previous 10 hours, and wherein fed state is defined as the subject having a high-calorie meal within approximately 30 minutes of dosing."

(DTX 1 at Claim 1; see also Claim 4.) The asserted dependent claims claim the use of the method in treating wasting associated with HIV/AIDS, ( Id. at Claims 2, 10, 21, 24), various plasma concentration levels, ( Id. at Claims 5, 7, 12-15, 19, 26-29), and the use of a surface stabilizer, ( Id. at Claims 16, 17, 30, 31).

Around the same time the 576 patent was approved, the FDA approved Par's New Drug Application for Megace ES, a nanoparticulate megestrol acetate oral suspension that the parties have stipulated embodies the claims of the patent. (Stipulation, ECF No. 174, ¶ 4(a).) Unlike Megace OS, the FDA-approved label for Megace ES states that the drug can be taken "without regard to meals."[3] (PTX 70 at 2.) According to Par, Megace ES has been a resounding commercial success, resulting in more than $600 million in net sales since its launch in 2005.[4]

TWi filed an ANDA seeking FDA authorization to market a generic version of Megace ES. TWi timely notified Par of this filing, and, under 21 U.S.C. § 355(b)(2)(A) (a "Paragraph IV" certification under the Hatch-Waxman Act), asserted that the 576 patent "is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted." Par filed suit in September 2011 to block the sale of TWi's generic product on the grounds that it infringed the 576 patent. Par asserts claims 1-2, 4-5, 7, 10, 12-17, 19, 21, 24, and 26-31 against TWi. In defense, TWi argues the asserted claims are invalid because they are obvious in light of the prior art, are not enabled, and do not cover patentable subject matter. TWi also claims Par Pharmaceuticals, Inc. does not have standing.


I. Standard of Review

Patents are presumed valid and a party claiming invalidity must prove it by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P'ship, 131 S.Ct. 2238, 2242 (2011); In re Cyclobenzaprine, 676 F.3d 1063, 1068-69 (Fed. Cir. 2012). A patent is invalid for obviousness "if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains." 35 U.S.C. § 103.

Obviousness is a question of law based on underlying factual findings as to (1) the level of ordinary skill in the art, (2) the scope and content of the prior art, (3) differences between the prior art and the claimed subject matter, and (4) secondary considerations of non-obviousness such as commercial success, long-felt but unsolved needs, and failure of others. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007) (citing Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17-18 (1966)). "An invention is not obvious just because all of the elements that comprise the invention were known in the prior art.'" Broadcom Corp. v. Emulex Corp., 732 F.3d 1325, 1335 (Fed. Cir. 2013) (quoting Power-One, 599 F.3d 1343, 1351 (Fed. Cir. 2010)). "Generally, a party seeking to invalidate a patent as obvious must demonstrate... that a skilled artisan would have had reason to combine the teaching of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success from doing so." In re Cyclobenzaprine, 676 F.3d at 1068-69. "Often, it will be necessary for a court to look to interrelated teachings of multiple patents; the effects of demands known to the design community or present in the marketplace; and the background knowledge possessed by a person having ordinary skill in the art, all in order to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue." KSR Int'l Co., 550 U.S. at 418. Further, the court does not have to rely only on teachings directly aimed at the claimed subject matter, but can take into account inferences and creative steps a person skilled in the art would have taken. Id. The inquiry is "expansive and flexible, " id. at 415, and the court is not required to set aside its common sense, see id. at 421.

Once the party challenging validity has made out a prima facie case of obviousness, the patentee can offer evidence of objective secondary considerations of non-obviousness, such as commercial success, long-felt but unsolved need, and failure of others. Wyers v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1359-60 (Fed. Cir. 2007). That the defending party can provide such evidence does not, however, shift the burden away from the challenging party. Pfizer, 480 F.3d at 1359-60. Further, secondary considerations cannot overcome a strong prima facie showing of obviousness. Wyers, 616 F.3d at 1246.

II. Experts

Before continuing with the merits of the case, it is helpful to describe the backgrounds and qualifications of the various experts on whom the parties relied and to whose testimony the court will refer. TWi relied on the testimony of Dr. David Beach, who has a Ph.D in Pharmacy. He was qualified at trial as an expert in pharmaceutics and has over thirty years of experience working in drug formulation and development, including conducting human clinical trials. (DTX 273; Trial Tr. Day 2, Volume 2, [hereinafter Tr. 2:2], at 15:12-14.) Dr. Beach also has specific experience working with nanoparticles. (Tr. 2:2 at 5:24-6:4; 12:20-13:1.) Par introduced testimony from Dr. Lawrence Fleckenstein, who was qualified as an expert in pharmacokinetics, biopharmaceutics, and clinical trial design.[5] (Trial Tr. Day 3, Volume 2, [hereinafter Tr. 3:2], at 31:1-7.) Dr. Fleckenstein has been a professor of pharmaceutical sciences and Director of the Clinical Pharmacokinetics Laboratory at the University of Iowa for over twenty years, where he conducts studies of the pharmacokinetics and bioavailability of drugs in humans. (PTX 180 at 1; Tr. 3:2 at 22:6-23:5.) He also has published numerous papers on pharmacokinetics, (PTX 180 at 2-16), and has taught pharmacokinetics to university students and FDA reviewers, (Tr. 3:2 at 22:3-5; 25:6-19).

Dr. Cory Berkland also testified for Par and was qualified as an expert in pharmaceutical formulations, with specific expertise in pharmaceutical particles and nanoparticles. (Trial Tr. Day 4, Volume 2, [hereinafter Tr. 4:2], at 79:1-8.) He started studying drug particles during his thesis work for his Ph.D in Chemical Engineering and has continued his work in the ten years since receiving his Ph.D. (Tr. 4:2 at 70:25-71:2; 72:25-74:2.) He is currently a professor of Chemical Engineering and Pharmaceutical Engineering at the University of Kansas. (PTX 176 at 1.)

Par also offered testimony from Dr. Christine Wanke, a Professor of Medicine, Director of the Division of Nutrition and Infection, and Associate Chair of the Department of Public Health and Community Medicine at Tufts Medical School. (PTX 184 at 1.) Dr. Wanke was qualified as an expert in the clinical treatment of nutritional and metabolic complications of HIV and AIDS. (Tr. 4:2 at 24:24-25:5.) Her work is focused on nutritional and metabolic complications of HIV and other infectious diseases, and she has experience in conducting clinical trials. ( Id. at 19:1-8; 20:11-21:2; 21:12-23:14.)

Finally, both parties introduced expert testimony regarding Megace ES's commercial success. Par introduced the testimony of Dr. Walter Vandaele, an economist and managing director of Navigant Economics, who was qualified as an expert in economic, financial, statistical, and general business issues concerning pharmaceutical products. (PTX 226; Trial Tr. Day 5, Volume 1, [hereinafter Tr. 5:1], at 47:21-48:6.) He has over two decades of experience in the economics of the pharmaceutical industry, with specific experience in the area of commercial success of both brand and generic pharmaceutical companies. ( Id. at 44:5-45:25.) Mr. Charles Boghigian, testifying for TWi, was qualified as an expert in portfolio management, commercialization, marketing, and promotion of pharmaceutical products. (Trial Tr. Day 5, Volume 2 [hereinafter Tr. 5:2], at 54:19-55:2.) He has over forty years of experience in pharmaceutical sales and marketing, thirty of which were spent with Hoffman-LaRoche, where he started in sales, but moved to managing sales and marketing for entire regions and drug products-including HIV/AIDS treatments-and eventually heading marketing for the company's entire United States drug market. (DTX 311; Tr. 5:2 at 44:16-18; 45:16-50:2; 51:18-52:22.)

III. Level of Ordinary Skill in the Art

The parties' experts-Dr. Beach for TWi and Dr. Fleckenstein for Par-did not appear to disagree materially over the definition of a person of ordinary skill in the art. Both agreed that a degree of some kind-B.S., M.S., or Ph.D.-was necessary in pharmacy, chemistry or chemical engineering, pharmacokinetics, medicine, or pharmacology. (Tr. 2:2 at 37:6-7; Tr. 3:2 at 59:18-20.) Further, both testified that the person's experience would depend on his level of education: those with less education would require more experience. (Tr. 2:2 at 37:10-17; Tr. 3:2 at 59:17-22.) Finally, there was agreement between the experts' testimony that a person skilled in the art would have basic knowledge of how to formulate the relevant drug compounds as well as their physical and chemical properties. ( See Tr. 2:2 at 37:8-10, 38:6-9; Tr. 3:2 at 59:13-15.) The court agrees with the experts' conclusions regarding the level of education, experience, and knowledge a person skilled in the art would have and sees no ...

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