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Cumberland Pharmaceuticals Inc. v. Mylan Institutional LLC

United States Court of Appeals, Federal Circuit

January 26, 2017

CUMBERLAND PHARMACEUTICALS INC., Plaintiff-Appellee
v.
MYLAN INSTITUTIONAL LLC, MYLAN INC., Defendants-Appellants

         Appeals from the United States District Court for the Northern District of Illinois in No. 1:12-cv-03846, Judge Rebecca R. Pallmeyer.

          Laura Pollard Masurovsky, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, argued for plaintiff-appellee. Also represented by Danielle Andrea Duszczyszyn, Mark J. Feldstein, Jason Lee Romrell.

          Nicole W. Stafford, Wilson, Sonsini, Goodrich & Rosati, PC, Austin, TX, argued for defendants-appellants. Also represented by Robert Delafield; Adam William BURROWBRIDGE, Washington, DC; Elham FlROUZl STEINER, San Diego, CA; NANCY L. ZHANG, Palo Alto, CA.

          Before MOORE, Reyna, and TARANTO, Circuit Judges.

          TARANTO, CIRCUIT JUDGE.

         Cumberland Pharmaceuticals, Inc. owns U.S. Patent No. 8, 399, 445, which describes and claims acetylcysteine compositions substantially free of chelating agents. It is listed in the Food and Drug Administration's Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange Book) as covering Cumberland's chelating-agent-free formulation of Acetadote®, an intravenous antidote for overdoses of acetaminophen. When Mylan Institutional LLC filed an abbreviated new drug application to market its own chelating-agent-free acetylcysteine formulation, Cumberland brought this patent-infringement action in the Northern District of Illinois against Mylan Institutional LLC and Mylan Inc. (hereafter "Mylan, " individually or jointly). Mylan stipulated to infringement but asserted invalidity on two grounds: derivation of the claimed invention from someone at the FDA and obviousness. The district court rejected both challenges after a bench trial. In particular, the court found that Mylan proved neither (1) that anyone at the FDA conceived of the claimed invention before the patent-named inventor nor (2) that there was a reasonable expectation that the claimed formulations, without any chelating agents, would succeed. Cumberland Pharm., Inc. v. Mylan Institutional LLC, 137 F.Supp.3d 1108, 1121-22, 1127 (N.D. 111. 2015). We affirm.

         I

         A

         At the priority date relevant here (August 24, 2005), acetylcysteine was known in the art as an antidote for acetaminophen overdoses. '445 patent, col. 1, lines 20-34. It also was known to have a stability problem: heavy metal ions, whether inherent in the formulation or found as contaminants, catalyze the oxidation of acetylcysteine in solution, causing it to degrade. Id., col. 1, lines 39-40; see Cumberland, 137 F.Supp.3d at 1112 n.2. A prior-art response to the stability problem was to include edetate disodium (EDTA or edetate) in an acetylcysteine formulation. '445 patent, col. 1, line 45, through col. 2, line 4. EDTA, a chelating agent, surrounds and binds to heavy metal ions, preventing them from acting as catalysts that oxidize acetylcysteine. Id. Such EDTA-containing formulations of acetylcysteine were considered safe, despite potential negative side effects. Id., col. 2, lines 14-27.

         Cumberland's '445 patent declares: "It has been surprisingly found that an aqueous composition containing acetylcysteine, sterilized water, and a pH-adjusting agent, is stable without the addition of a chelating agent." Id., col. 2, lines 48-50. The patent claims such compositions. Every claim in the patent requires a "stable" composition that is "free of chelating agents, " id., col. 9, line 16, through col. 10, line 53, and the district court construed the term to mean "[T]acking one or more chelating agents, " Cumberland, 137 F.Supp.3d at 1112.

         B

         The facts central to the dispute over the '445 patent's validity date from 2002, when the FDA was considering Cumberland's application for permission to market the original EDTA-containing formulation of Acetadote®, a formulation previously approved in other countries. On December 10, 2002, the FDA sent Cumberland a letter, in which the FDA gave Cumberland the following instructions (among others): "[2c] Provide scientific and regulatory justification for the inclusion of Edetate as a component in the drug product. In addition, provide a description of the pharmacological properties for Edetate in this drug product." J.A. 12837. Six days later, representatives of the FDA and Cumberland spoke by telephone. Notes of the call state: "Regarding item 2(c), the Division explained that data should be provided to support any justification for the inclusion of Edetate, since a non-trivial amount is included in the formulation." J.A. 12899.

         On December 20, 2002, Cumberland formally responded to the FDA in a letter written by Leo Pavliv, who was the Cumberland official responsible for Acetadote® and who is the named inventor on the '445 patent.[1] The letter explained that EDTA was included to stabilize the formulation and stated: "If no or lower concentrations of edetate are capable of ensuring product stability, lowering or removing edetate would raise questions of how the safety and efficacy of the product would be effected." J.A. 14783. Mr. Pavliv ultimately testified at trial that, shortly after writing this letter, he had the idea of testing the stability of an acetylcysteine formulation without EDTA.

         On March 5, 2003, Cumberland asked the FDA to schedule a call for further discussion of its December 20, 2002 response. With respect to question 2c, Cumberland proposed to discuss the following: "Cumberland believes the use of Edetate as a component in the drug product is justified both from a scientific as well as a regulatory point of view. Does FDA agree?" J.A. 11343. There is no written record of the occurrence or content of the requested call. At trial, however, Mr. Pavliv testified that the call took place; that FDA representatives indicated on the call that they were not prepared to say whether they considered EDTAs inclusion justified; and that Mr. Pavliv then stated his idea to perform a stability study. Accord- ing to Mr. Pavliv, at least one FDA representative on the call approved of his idea to do a study and asked him to put the proposal in writing.

         Cumberland did so in a July 21, 2003 letter, stating: "As requested by FDA, upon product approval [i.e., upon FDA approval of the EDTA-containing formulation], Cumberland Pharmaceuticals intends to initiate studies to determine the impact on product stability of both decreasing and completely removing edetate disodium from the formulation." J.A. 14916. The FDA issued its Chemistry Review of the EDTA-containing formulation on January 9, 2004. That document states: "The sponsor reported that, as requested by the FDA upon drug approval, an independent study will be initiated to determine the impact on drug product stability of both decreasing and completely removing the amount of edetate sodium." J.A. 12968; see id. at 12969 (referring twice more to Cumberland's commitment to a post-approval study). The FDA approved the EDTA-containing product on January 23, 2004, J.A. 11334-37, with the approval letter reminding Cumberland of its commitment to "evaluate the potential benefit of Edetate disodium on the stability of the drug product, " the study to "include a comparison of the current concentration of Edetate to a formulation with a lower concentration and no concentration of Edetate." Id. at 11336.

         Cumberland then arranged by contract for testing to be done by Bioniche Pharma Group, "Mylan's predecessor company." Cumberland, 137 F.Supp.3d at 1116. The protocol, proposed by Mr. Pavliv and approved by the FDA without change, included testing a formulation that turned out to be the claimed invention, i.e., a formulation containing neither EDTA nor any other chelating agent.[2]On November 18, 2004, three months into the study, Mr. Pavliv received encouraging stability data. On August 24, 2005, having received further encouraging stability data ...


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