Chief Judge Gregory Sleet, District of Delaware
Chief Judge Gregory Sleet, District of Delaware ()

A Delaware federal judge on Tuesday extinguished Mallinckrodt Pharmaceuticals’ patent infringement suit against industrial gases company Praxair Inc., striking five of the Irish drugmaker’s patents for its INOMAX respiratory treatment system as invalid and ruling that Praxair had not infringed on five more.

Mallinckrodt had sued in 2015 to protect its patents for INOMAX, the company’s second best-selling product, which accounts for 15 percent of Mallinckrodt’s total revenue and brings in $500 million in annual sales. According to court documents, the patents related to an inhaled nitric oxide and the devices were used to administer it to newborns and children with breathing disorders.

Praxair, which had applied to bring a generic version of the treatment and devices to market, had attacked the validity of Mallinckrodt’s patents during a seven-day trial in March.

The company argued in court papers that the one subset of the INOMAX patents were directed to patent-ineligible subject matter and failed to claim an inventive concept, under the relevant U.S. Supreme Court framework. The other five, Praxair said, were incompatible with Praxair’s product, and could not be infringed.

U.S. District Judge Gregory M. Sleet of the District of Delaware on Tuesday sided with Praxair on both arguments in a 45-page memorandum.

In the ruling, he said Praxair had met its burden of proving the invalidity of Mallinckrodt’s so-called HF patents by clear and convincing evidence.

“The court finds it abundantly clear that the claim limitations of the HF patents recite routine, conventional activity that does nothing to transform the law of nature at the core of the ‘invention,’” Sleet wrote.

“The court thus concludes that the HF patents are invalid under 35 U.S.C. Section 101 because they disclose patent-ineligible subject matter without an inventive step that transforms that nature of the invention into something worthy of patent protection.”

On the second grouping, Sleet said the patent claims on the companies’ products were divergent enough to warrant a ruling of noninfringement in favor of Praxair.

Multiple media outlets reported on Tuesday the double-digit drops in Mallinckrodt’s stock in the hours following the ruling. In a statement, Mallinckrodt said that it planned to appeal.

“We are aware of and disappointed in Judge Sleet’s ruling today in Mallinckrodt’s case against Praxair for patent infringement, particularly in light of the fact that INOMAX is used for treatment of hypoxic respiratory failure in fragile neonates. However, we have a solid basis for appeal and will appeal this decision,” the company said, noting that it had regulatory exclusivity for the treatment until October 2018.

Praxair, a Delaware company headquartered in New Jersey, did not immediately provide a response to the ruling.

Praxair was represented by Morgan, Lewis & Bockius, led by partners Mike Abernathy, Sanjay Murthy and Jason White. A spokeswoman for the firm called the ruling a “complete victory” for Praxair, but did not respond Wednesday to messages requesting additional comment.

Attorneys from Latham & Watkins and Morris, Nichols, Arsht & Tunnell represented Mallinckrodt.

The case is captioned Mallinckrodt Hospital Products v. Praxair Distribution.