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The U.S. Court of Appeals for the Federal Circuit has confirmed a Southern District of New York ruling prohibiting the holder of the OxyContin patent from pursuing an infringement claim against a generic manufacturer. The appellate panel found that the patents held by the plaintiff, Purdue Pharma, were unenforceable because the company had misled the U.S. Patent and Trademark Office during its application. The case, Purdue Pharma v. Endo Pharmaceuticals, 04-1189, started when Endo Pharmaceuticals began developing a generic version of Purdue’s popular painkiller, OxyContin. The time-release drug often used to treat patients with severe pain brings in about $1.5 billion in annual sales for Purdue. The entrance of a generic would have cut significantly into that figure. Purdue initiated a patent infringement suit in October 2000 in an attempt to block Endo from proceeding with its generic version. In the pharmaceutical setting, owners of brand-name drugs regularly try to extend the life of their patents or block generics from entering the market. Likewise, generic manufacturers often aggressively try to enter the market. Because a great deal of money is at stake, many of the disputes inevitably end up in court. The case originated in the Southern District, where Judge Sidney Stein last year ruled in Endo’s favor. Judge Stein found that although Endo infringed Purdue’s patents, Purdue’s “inequitable conduct” in the patent application stage invalidated its patents. The federal appellate panel, which included Judges Arthur Gajarsa, S. Jay Plager and Richard Linn, on Tuesday upheld the lower court. “Applicants for patents have a duty to prosecute patents … with candor and good faith,” Judge Plager wrote for the unanimous panel. “A breach of this duty may constitute inequitable conduct.” The panel found that Endo had met its burden of proving inequitable conduct by a clear and convincing standard. The key facts in the findings centered on Purdue’s submission during its patent application process. Purdue claimed that a specific dosage of OxyContin was effective in controlling pain in 90 percent of patients compared to other dosages. But there was one problem in the panel’s eyes. “Purdue had no clinical evidence supporting its claim at the time it was made or at any time before the patents [were] issued,” the panel said. Purdue countered that clinical evidence is not a prerequisite for such a claim. The panel relied on a two-part test to determine inequitable conduct. In addressing the first prong, materiality, the panel said, “While Purdue never expressly stated that the discovery of the … dosage range was based on the results of clinical studies, that conclusion was clearly to be inferred from the language used by Purdue.” In other words, the totality of Purdue’s claim and the manner in which it presented its claims led the panel to conclude that its failure to produce supporting clinical data amounted to material misinformation. In examining the second prong of the test, Purdue’s intent or state of mind when it made these dosage claims, Plager wrote, “Direct proof of wrongful intent is rarely available but may be inferred from … the surrounding circumstances.” Again, the panel honed in on Purdue’s dosage claims. “A patentee facing a high level of materiality and clear proof that it knew or should have known of that materiality, can expect to find it difficult to establish ‘subjective good faith’ sufficient to prevent the drawing of an inference of intent to mislead,” Plager wrote. The panel was not searching for a smoking gun exposing Purdue’s intent but instead relied on Purdue’s presentation of its dosage claims. “In this case, intent to mislead the [patent office] can be inferred from Purdue’s statements and context in which they were made,” the court said. “Purdue’s carefully chosen language suggests that it had obtained clinical results, and that suggestion was left unclarified.” Herbert Schwartz of the Fish & Neave IP group of Ropes & Gray along with lawyers from the Washington, D.C., office of Wilmer Cutler Pickering Hale and Dorr represented Purdue. Edward Filardi of Skadden, Arps, Slate, Meagher & Flom along with lawyers from Kramer Levin Naftalis & Frankel represented Endo.

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