A recent decision by the U.S. District Court for the Southern District of Florida in Apotex, Inc. v. UCB, Inc. provides a cautionary tale about aggressive offensive tactics sometimes employed by generic drug companies in the context of high-stakes pharmaceutical patent litigation. The Florida federal district court judge captured the essence of the tale as follows: “This case involves an orchestrated scheme to deceptively obtain a patent with respect to a competitor’s product. It is illustrative of inventive litigation, as opposed to the scientific discovery that the patent laws were designed to promote.”

The lawsuit arose from a patent filed by generic drug company Apotex to cover a drug developed and sold by branded drug company UCB. The patent was filed several years after UCB’s drug already existed in the market. During a bench trial, the court found that Apotex’s founder and chairman, Dr. Bernard Sherman, was not just the alleged inventor named on the patent, but also had directed both the prosecution and litigation of the asserted patent. Noting his predominant role in this case, the court found that the asserted patent issued only because of his deceptive conduct. While the court discussed each of Dr. Sherman’s alleged deceptive acts in detail, the court’s overall finding was that Dr. Sherman did not invent any new process; instead, the court found that he took publicly available information about UCB’s drug, combined this information with teachings in the prior art, and secretly conducted his own testing of UCB’s drug from which he inferred UCB’s process for making its drug. The court found that Dr. Sherman then pursued a patent for this process while, as the court explained, purposely misleading the Patent Office Examiner into believing that his process was different from the prior art, including that used to make UCB’s existing drug.

In analyzing Dr. Sherman’s intent, the court also considered his conduct during an unrelated litigation between Apotex and branded drug company Merck that took place around the filing date of this asserted patent. The court noted that, in the Merck case, Dr. Sherman had been accused of the same type of misconduct that was the focus of UCB’s inequitable-conduct defense — allegedly obtaining information about the branded drug company’s product and filing a patent trying to cover that product as leverage for litigation.

Though not mentioned by the court, Dr. Sherman and Apotex were no strangers to patent litigation, having been featured in an Aug. 15, 2006 New York Times article, “A Generic Drug Tale, With an Ending Yet to be Written.” In the Times article, Dr. Sherman recounts his lawsuit against Bristol-Myers Squibb and Sanofi-Aventis regarding Apotex’s generic form of the drug Plavix®, with the article quoting him as boasting “that he negotiated the settlement on the assumption that the Federal Trade Commission and state attorneys general would never approve it” with a focus on “extract[ing] favorable concessions from Bristol-Myers and Sanofi that would take effect even without the government’s approving the deal.”

Seven years later, Dr. Sherman is in the limelight again, this time on the receiving end of an adverse decision. These stories provide a valuable lesson about how to both prepare for and deal with situations where aggressive companies seek to patent aspects of an innovator’s product and then use that intellectual property as attempted leverage against the innovator. Though the doctrine of inequitable conduct serves as some deterrence, innovators may nevertheless find themselves embroiled in these kinds of litigations. As the Apotex case demonstrates, innovators should take care to be forward-thinking about the intellectual property surrounding their manufacturing processes, both their own and others’.