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A recent U.S. district court decision invalidating three patents for the controversial painkiller OxyContin is raising questions about a popular defense to patent infringement claims. The case was initiated by Purdue Pharma L.P., the Stamford, Conn.-based manufacturer of OxyContin, as a patent infringement action against Endo Pharmaceuticals Holdings Inc., after the Chadds Ford, Pa.-based maker of pain medications sought Food and Drug Administration approval for a generic version of OxyContin. Endo responded by claiming in part that Purdue’s OxyContin patents were unenforceable because of alleged inequitable conduct by Purdue in the course of obtaining the patents in the 1990s. Inequitable conduct is a breach of good faith, candor and honesty before the Patent and Trademark Office (PTO), coupled with intent to deceive or misleadand is a frequently employed defense to a patent infringement claim. Some patent law experts contend that the inequitable conduct doctrine has shown signs of expansion in recent cases, providing those who seek access to markets protected by patents with an increasingly potent defense against patent infringement claims. Patents ‘unenforceable’ In the January opinion in Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., Judge Sidney Stein of the Southern District of New York found that Endo had infringed upon Purdue’s patents, but that because Purdue had engaged in inequitable conduct, the patents were unenforceable. The judge found inequitable conduct in Purdue Pharma’s statements before the PTO of a “surprising discovery” using “precise, quantified, past tense language” absent “scientific proof.” In addressing whether Purdue had engaged in inequitable conduct, Stein said that “Purdue should have informed the PTO that its discovery . . . had not been proven and was inherently difficult to demonstrate . . . .These repeated intentional material misrepresentations are so serious as to warrant the severe sanction of holding the patent[s] unenforceable.” Both Purdue and Endo said they are appealing the decision-with Purdue disputing the inequitable conduct finding and invalidation of the patents and Endo disputing the finding that it had infringed. The stakes are high indeed. Should Stein’s decision hold up, Purdue Pharma stands to lose its patent-supported monopoly in the approximately $1.5 billion a year OxyContin market-a market that Endo and other generic-drug manufacturers are seeking to enter with cut-rate bioequivalents of the powerful pain-relief medicine. For those who require the drug for pain relief, including many cancer victims, the availability of generic OxyContin could provide necessary medication at much reduced prices. On the other hand, OxyContin has also been abused and, as a street drug, can be dangerous. Availability of cut-rate generic OxyContin could exacerbate that drug abuse problem. Just one day after the January opinion was issued, Connecticut Attorney General Richard Blumenthal announced an antitrust investigation of Purdue Pharma. Blumenthal said the antitrust investigation “is a major priority for us because Purdue Pharma is located in Connecticut and the product, OxyContin, is a real lifesaver for people who suffer from chronic pain so the availability of the generic version would be a major boon.” Misuse of a patent can translate into antitrust liability because a patent is a legal monopoly and misuse of patent can transform legally monopolistic behavior into illegal anti-competitive behavior in violation of antitrust laws. Blumenthal said his office was seeking to enlist other state attorneys general in the investigation and that he intended to proceed with the investigation before resolution of the appeal. Purdue Pharma also faces civil antitrust lawsuits. Howard R. Udell, executive vice president and chief legal officer of Purdue Pharma, said that, given what in his view is a likelihood of reversal, he did not think parties, including state attorneys general, should put a “great deal of energy” into antitrust claims against his company prior to resolution of the appeal. ‘Absurd on its face’ Some patent law experts said that the Purdue decision had gone too far. Martin J. Adelman, professor of law at George Washington University Law School and a nationally known patent law expert with no relationship with Endo or Purdue Pharma, called the OxyContin decision “almost absurd on its face” because “inequitable conduct really requires that I don’t disclose pertinent information or that I lied to the patent officer. “If I tell the patent office what turns out to be the truth and I intended it to be the truth, then I neither had an intent to deceive nor did I deceive,” Adelman said. “How do you destroy billions of dollars of property on the flimsy basis that the examiner would have wanted to know that you hadn’t run detailed clinical trials yet? I find this one very hard to understand.” Endo’s lead trial counsel, Edward V. Filardi of Skadden, Arps, Slate, Meagher & Flom in New York, countered, “This case does not stand for the proposition that the district court would have applicants for a new drug submit scientific proof to have their patent application allowed. It’s the manner in which under the specific facts of this case Purdue proceeded to convince the patent office without scientific proof that quote unquote new sustained release OxyContin formulations were somehow different from prior patents.” Filardi predicted that the opinion would “be sustained on appeal based upon the full record” of the case. Paul M. Janicke, professor and co-director of the intellectual property and information law program at the University of Houston Law Center, said that while an appeal could go either way, where the Purdue Pharma opinion was weakest was on “intent to mislead,” which must be proven by “clear and convincing” evidence. “Are you trying to hoodwink the examiner or not?” Janicke said. “The judge is a little thin on that. Here it might have been more an error of linguistics and that’s not enough.” However, William Atkins, an intellectual property attorney in the Northern Virginia office of Pillsbury Winthrop, said the opinion included “a pretty factually detailed analysis” that reduced the chance of a reversal on appeal. “It’s not that chances are slim to none and slim just left the room, but it’s not 50-50, either,” he said. The decision shifted Purdue Pharma and its lawyers, including its lead counsel, the widely respected patent attorney Herbert F. Schwartz of Fish & Neave in New York, into damage control mode. Purdue Pharma announced recently that it has retained Seth Waxman and Edward DuMont of Washington-based Wilmer, Cutler & Pickering to assist Schwartz with the brief in the appeal. On Jan. 9, Purdue filed a petition with the Food and Drug Administration seeking to delay the introduction of generic forms of OxyContin. On Jan. 12, Purdue filed a notice of appeal and, on Jan. 13, the company submitted to Stein an emergency ex parte motion for a 120-day stay of both the court’s opinion and the accompanying court order enjoining Purdue from enforcing the patents in the suit. The company also hired antitrust counsel Timothy C. Hester of Covington & Burling in Washington. The company has filed a motion for expedited appeal. Stein denied Purdue’s motion for a suspension of his Jan. 5 opinion invalidating three of Purdue Pharma’s patents and his accompanying court order enjoining Purdue from enforcing the patents. In a mid-February memorandum and order, in response to Purdue Pharma’s motion, Stein expressed concern for public access to generic forms of OxyContin, stating that a suspension of his Jan. 5 decision would “deprive the public of prompt access to generic equivalents of a widely used analgesic.” Contrary to a previous decision by Stein in a previous OxyContin patent infringement case, he was not persuaded by Purdue Pharma’s argument that the possibility of a generic manufacturer’s entry into the OxyContin market presented a likely risk of irreparable harm to Purdue Pharma. Lawyers who closely follow the U.S. Court of Appeals for the Federal Circuit on inequitable conduct decisions pointed to a recent willingness of the Federal Circuit to interpret inequitable conduct broadly. With respect to the recent Endo decision, Foley & Lardner partner Harold C. Wegner said, “Two years ago, it would have been clear that this case would have been reversed on appeal. Now it’s a wild card because there has been a renaissance of inequitable conduct holdings by the Federal Circuit in the past year to 18 months.” Wegner is the former director of the intellectual property law program at George Washington Law School. A dissenter One dissenting judge on the Federal Circuit, Pauline Newman, has railed against the application of the inequitable conduct doctrine in some recent cases. In one dissenting opinion, she characterized unwarranted inequitable conduct claims as a “new plague” that can infect “the entire body of invention and inventors” because “every experiment done and not done, every scientific inference, every judgment or belief, is fair game for opportunistic attack.” Endo, according to general counsel and secretary Caroline Manogue, has already warehoused generic OxyContin. She would not comment on Endo’s strategy with respect to selling the medication. But patent law experts warned that bringing a generic form of OxyContin to market prior to resolution of an appeal is risky business because, should the decision be reversed, any company that violated Purdue Pharma’s patent would be accountable for damages. Given the possibility of reversal, in Adelman’s view, “If they started marketing this stuff, I would be shocked.”

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