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Par Pharm., Inc. v. TWi Pharms., Inc.

United States District Court, D. Maryland

July 28, 2015

PAR PHARMACEUTICAL, INC. and ALKERMES PHARMA IRELAND LTD
v.
TWi PHARMACEUTICALS, INC

Decided July 27, 2015

Page 469

For Par Pharmaceutical, Inc., Plaintiff: James P Ulwick, LEAD ATTORNEY, Kramon and Graham PA, Baltimore, MD; Daniel G Brown, Gina R Gencarelli, Jennifer R Saionz, PRO HAC VICE, Latham and Watkins LLP, New York, NY; Jennifer Koh, PRO HAC VICE, Latham and Watkins LLP, San Diego, CA; Jeremy A Tigan, Morris Nichols Arsht and Tunnell LLP, Wilmington, DE; Michael R Seringhaus, PRO HAC VICE, Latham and Watkins LLP, Menlo Park, CA; Roger J Chin, PRO HAC VICE, Latham and Watkins LLP, San Francisco, CA; Sami Sedghani, Terrence J P Kearney, PRO HAC VICE, Latham and Watkins LLP, Menlo Park, CA.

For Alkermes Pharma Ireland Limited, Plaintiff: James P Ulwick, LEAD ATTORNEY, Kramon and Graham PA, Baltimore, MD; Jack B Blumenfeld, Jeremy A Tigan, Maryellen Noreika, PRO HAC VICE, Morris Nichols Arsht and Tunnell LLP, Wilmington, DE; Sami Sedghani, PRO HAC VICE, Latham and Watkins LLP, Menlo Park, CA.

For TWi PHARMACEUTICALS, INC., Defendant: John A Sholar, LEAD ATTORNEY, Husch Blackwell LLP, Chicago, IL; Michael A Gatje, LEAD ATTORNEY, Husch Blackwell LLP, Washington, DC; Donald J Mizerk, PRO HAC VICE, Husch Blackwell LLP, Chicago, IL.

Page 470

MEMORANDUM

Catherine C. Blake, United States District Judge.

Plaintiffs Par Pharmaceutical, Inc. and Alkermes Pharma Ireland, Limited (collectively, " Par" ) filed this action against TWi Pharmaceuticals, Inc. (" TWi" ) alleging infringement of U.S. Patent No. 7,101,576 (" '576 patent" ).[1] After a five-day bench trial, the court issued a memorandum concluding that " the '576 patent was obvious, and thus invalid." (Post-Tr. Mem. 1, ECF No. 212.) Par appealed to the Federal Circuit, which vacated the court's judgment of invalidity, and remanded the case for further analysis. The court held a hearing to consider the parties' remand arguments on invalidity. Based on the arguments presented then and in the parties' remand briefs, and after reviewing the trial record, the court now makes additional findings of fact and conclusions of law under Federal Rule of Civil Procedure 52(a). In sum, the court concludes that TWi has shown by clear and convincing evidence that the asserted claims in the '576 patent are invalid on two separate grounds: they are obvious, and they are not enabled.

BACKGROUND

The following has occurred since the court issued its post-trial memorandum on February 21, 2014. [2] On March 18, 2014, Par appealed the court's judgment in TWi's favor. (ECF No. 219.) On August 12, 2014, the court granted Par's motion for an injunction pending appeal. (ECF Nos. 257-58.) On September 10, 2014, TWi filed a notice of appeal concerning the injunction.

On December 3, 2014, the Federal Circuit issued an opinion vacating the court's judgment that the '576 patent was invalid as obvious and remanding because, in its view, the court " incorrectly applied [Federal Circuit] law on inherency in the context of obviousness." Par Pharm., Inc. v. TWi Pharms., Inc., 773 F.3d 1186, 1188 (Fed. Cir. 2014).

The Federal Circuit's opinion began by outlining its standard for inherency. It stated that, while " inherency may supply a missing claim limitation[,] . . . the use of inherency . . . must be carefully circumscribed in the context of obviousness." Id. at 1194-95 (citations omitted). It then

Page 471

described the " high standard" parties must meet to show that a claim limitation is inherent in the prior art: " the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art." Id. at 1196.

The Federal Circuit concluded that the court " did not require that TWi present evidence sufficient to prove inherency under this standard." Id. TWi had presented evidence that a reduction in particle size would improve bioavailability, and TWi had elicited testimony from its expert, Dr. Beach, that " an improvement in bioavailability 'necessarily results in a decrease in any food effect[.]'" Id. (citing Post-Tr. Mem. 13). On the basis of those two facts, the court concluded, " thus any food effect will inherently be reduced." (Post-Tr. Mem. 26.) But the Federal Circuit concluded that the court had " ignore[d] the claim limitations at issue." Par Pharm., 773 F.3d at 1196. " There [we]re simply no findings of fact addressing th[e] question" of whether TWi had " present[ed] evidence sufficient to demonstrate that the claimed food effect limitations necessarily are present in the prior art combinations" --that is, whether " a reduction in particle size naturally results" in (1) " 'no substantial difference in Cmax' between the fed and fasted states" (as in claim 1), and (2) a " 'difference in Cmax' between the fed and fasted states [that is] within an enumerated percentage difference" (as in claim 4). Id. (emphasis in original) (citations omitted).

The Federal Circuit accepted this court's analysis in all other respects. Specifically, the Federal Circuit held that the court did not err in: (1) concluding that TWi failed to prove " that a food effect for micronized megestrol was known in the art[,]" id. at 1194 (citing Post-Tr. Mem. 6-10); (2) considering " motivations beyond the food effect[,]" id. at 1197; (3) finding that " the viscosity and interpatient variability problems with micronized megestrol" were valid " alternate motivations[,]" id. ; (4) finding sufficient " motivation to combine megestrol with nanoparticle technology[,]" id. at 1198; (5) finding a " reasonable likelihood of success in combining megestrol with nanoparticle technology[,]" id. ; (6) concluding that " Graham d[id] not teach away from combining megestrol with the NanoCrystal technology[,]" id. at 1198-99; and (7) " its analysis of the objective indicia of nonobviousness[,]" id. at 1199.

The Federal Circuit's mandate issued on February 13, 2015. (ECF Nos. 267-68.) That same day, Par filed a motion for a temporary restraining order and injunction pending entry of final judgment on remand, (ECF No. 269), which the court granted as to the injunction, (ECF Nos. 279-80). After the parties filed briefs, the court held a hearing on June 12, 2015.

ANALYSIS

Because the parties dispute the scope of the issues on remand, the court addresses that question first before turning to the merits of TWi's invalidity arguments.

I. Scope of Issues on Remand

At the end of its opinion, the Federal Circuit concluded:

[a]lthough we agree with the district court's analysis and conclusions on motivation to combine, reasonable expectation of success, and objective indicia of nonobviousness, we vacate the district court's judgment that the '576 patent is obvious, and remand for further analysis of the food effect limitation ...

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