Duramed Pharmaceuticals, Inc. v. Watson Laboratories, Inc. et al

Filing 295

ORDER denying 260 Motion for Preliminary Injunction. See order for specifics. Signed by Judge Larry R. Hicks on 6/16/11. (Copies have been distributed pursuant to the NEF - EM)

1
2
3
4
5
6

UNITED STATES DISTRICT COURT

7

DISTRICT OF NEVADA

8

***
)
)
)
)
)
)
)
)
)
)
)
)

9
DURAMED PHARMACEUTICALS, INC.,
10
Plaintiff,
11
v.
12
WATSON LABORATORIES, INC.,
13
Defendant.
14
15

3:08-cv-0116-LRH-RAM
ORDER

Before the court is plaintiff Duramed Pharmaceuticals, Inc.’s (“Duramed”) motion for a

16

temporary restraining order and preliminary injunction. Doc. #260.1 Defendant Watson

17

Laboratories, Inc. (“Watson”) filed a response (Doc. #276) to which Duramed replied (Doc. #285).

18

I.

19

Facts and Background
Plaintiff Duramed is a pharmaceutical company that researches, patents, commercializes,

20

markets, and distributes brand name pharmaceutical drugs. On January 22, 2008, Duramed was

21

issued U.S. Patent No. 7,320,969 (“the ‘969 patent”) for a new extended contraceptive regimen2 to

22
1

23
2

24
25
26

Refers to the court’s docket number.

Combined oral contraceptive products have been on the market since the early 1960s. These early
contraceptive regimens administered the pill on a 28-day standard cycle. For the first 21 days, a patient would
take a combined active pill which included estrogen and other hormones designed to prevent pregnancy. This
period was followed by a 7-day hormone-free interval in which a patient took a placebo pill in which no
hormones were administered. This 28-day pill cycle would be repeated as desired to help prevent pregnancy.
An extended contraceptive regimen is the same as a traditional contraceptive regimen (a period of

1

be marketed under the brand name Seasonique. In contrast to traditional contraceptive regimens,

2

Seasonique follows the active combined contraceptive cycle with seven (7) days of low-dose

3

estrogen in place of the hormone-free placebo pill.

4

On March 6, 2008, Duramed filed the instant action against Watson for infringement of the

5

‘969 patent. Watson is a pharmaceutical company that develops generic versions of name brand

6

drugs for the market. Watson filed, and was approved for, a generic drug application with the FDA

7

to make and market a generic equivalent to Duramed’s Seasonique product. In its answer, Watson

8

challenged the validity of the ‘969 patent and asserted that the patent was invalid as obvious.

9

Doc. #68.

10

On August 14, 2009, Duramed moved for summary judgment on Watson’s affirmative

11

defense of patent invalidity. Doc. #175. On March 31, 2010, after a hearing on the motion, the

12

court granted Duramed’s motion for summary judgment holding that the ‘949 patent was not

13

obvious based upon the relevant prior art. Doc. #214. Watson appealed (Doc. #219), and on

14

March 28, 2011, the Federal Circuit reversed this court’s order granting summary judgment

15

(Doc. #229).

16

After the Federal Circuit’s decision, Watson indicated its intention to release its generic

17

version of the Seasonique regimen on June 20, 2011. In response, Duramed filed the present

18

motion for a temporary restraining order and preliminary injunction seeking to enjoin Watson from

19

marketing and distributing its generic contraceptive. Doc. #260.

20

///

21

///

22

///

23

///

24
25
26

combined hormone pills followed by a hormone-free period) except that the cycle is elongated so that the active
combined pills are taken continuously for up to three months. The standard 7-day hormone free interval follows.
Duramed markets a traditional extended oral contraceptive regimen under the brand name Seasonale.

2

1

II.

Legal Standard

2

A. Preliminary Injunction3

3

A preliminary injunction is an “extraordinary remedy that may only be awarded upon a clear

4

showing that the plaintiff is entitled to such relief.” Id. (citing Mazurek v. Armstrong, 520 U.S. 968,

5

972 (1997) (per curiam)). A court may only grant a preliminary injunction upon a showing that:

6

(1) the petitioner is likely to succeed on the merits of his complaint; (2) irreparable harm will result

7

in the absence of an injunction; (3) the balance of equities favors an injunction; and (4) an

8

injunction is in the public’s interest. Winters v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 376

9

(2008) (citations omitted). These considerations require a plaintiff to show “serious questions going

10

to the merits” and that “the balance of hardships tips sharply in the plaintiff’s favor” before a court

11

may issue injunctive relief. Alliance for Wild Rockies v. Cottrell, 622 F.3d 1045, 1050 (9th Cir.

12

2010).

13

However, in a patent infringement action, an injunction should not issue “if the party

14

opposing the injunction raises “a substantial question concerning infringement or validity, meaning

15

that it asserts a defense that [the party seeking the injunction] cannot prove lacks substantial merit.”

16

Oakley Inc. v. Sunglass Hut Intern., 316 F.3d 1331, 1339-40 (Fed. Cir. 2003). Further, “while ‘the

17

burden of proving invalidity is with the party attacking validity,’ the party seeking the injunction

18

‘retains the burden of showing a reasonable likelihood that the attack on the patent’s validity would

19

fail.’” Id. (quoting H.H. Robertson Co., v. United Steel Deck, Inc., 820 F.2d 384, 387 (Fed. Cir.

20

1987).

21

B. Patent Obviousness

22

An issued patent is presumed valid by statute. See 35 U.S.C. § 282. However, under the

23

Patent Act, a patent may be deemed invalid as a matter of law “if the differences between the

24
3

25
26

The same legal standard applies to temporary restraining orders and preliminary injunctions. See
Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001) (noting that the analysis
applied to temporary restraining orders and preliminary injunctions is “substantially identical”).

3

1

subject matter sought to be patented and the prior art are such that the subject matter as a whole

2

would have been obvious at the time the invention was made to a person having ordinary skill in

3

the art to which said subject matter pertains.” 35 U.S.C. § 103(a).

4

A defendant proffering the affirmative defense of obviousness bears the burden to prove the

5

patent is obvious by clear and convincing evidence. Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d

6

955, 962 (Fed. Cir. 2001); see also, Finnigan Corp. v. Int’l Trade Comm’n, 180 F.3d 1354, 1365

7

(Fed. Cir. 1999). A patent invention is obvious if a person of ordinary skill in the art4 would have

8

had a reason to combine the particular elements or technologies in the way the claimed new

9

invention does. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007). Thus, an invention is

10

obvious when it “simply arranges old elements with each performing the same function it had been

11

known to perform” and yields no more than one would expect from such an arrangement. Sakraida

12

v. AG Pro, Inc., 425 U.S. 273, 282 (1976). Comparatively, an invention is not obvious “where

13

vague prior art does not guide an inventor toward a particular solution.” Bayer Schering Pharma

14

AG v. Barr Labs., Inc., 575 F.3d 1341, 1347 (Fed. Cir. 2009). Further, there can be no finding of

15

obviousness where “where the prior art gave only general guidance as to the particular form of the

16

claimed invention or how to achieve it.” Id. (quoting In re O’Farrell, 853 F.2d 894, 903 (Fed. Cir.

17

1988)).

18

Although the ultimate determination of obviousness under § 103 is a question of law, it is

19

based on several underlying factual findings, including (1) the scope and content of the prior art; (2)

20

the level of ordinary skill in the pertinent art; (3) the differences between the claimed invention and

21

the prior art; and (4) evidence of secondary factors, such as commercial success, long-felt need, and

22

the failure of others. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).

23
4

24
25
26

A person of ordinary skill in the art is a person presumed to think “along the line of conventional
wisdom in the art and is not one who undertakes to innovate, whether by patient, and often expensive,
systematic research or by extraordinary insights.” Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 454
(Fed. Cir. 1985).

4

1

III.

Discussion

2

A. Prima Facie Obviousness

3

The Federal Circuit, in its decision reversing this court’s order granting summary judgment

4

in favor of Duramed on the issue of obviousness and patent validity, specifically held that “Watson

5

has put forth a prima facie case of obviousness based on the relevant prior art at the time Duramed

6

put forth its patent application.” Duramed Pharms., Inc., v. Watson Labs, Inc., 2011 U.S. App.

7

LEXIS 6309, *15 (Fed. Cir. March 25, 2011).

8

In its motion for injunctive relief, Duramed contends that the Federal Circuit was only

9

viewing the issue on a narrow procedural light, and thus, the Federal Circuit’s finding of a prima

10

facie case of obviousness is not binding. See Doc. #260. However, the court finds that the Federal

11

Circuit’s holding of prima facie obviousness is binding upon this court. First, the court notes that

12

the Federal Circuit had a full record before it at the time it issued its opinion, including all relevant

13

prior art, the parties briefing on summary judgment, and the parties expert reports. Second, despite

14

Duramed’s claim of a narrow procedural posture on appeal, the Federal Circuit made specific

15

factual findings relating to the teachings of the relevant prior art,5 credited Duramed’s low level of

16

skill in the art,6 and held that “[t]here appear to be no genuine issues of material fact that, based on

17

the teachings of [the relevant prior art], one of ordinary skill would have been motivated to

18

combine [a traditional extended oral contraceptive regimen] and 7 days of [unopposed estrogen]

19

with a reasonable expectation that the combination would reduce the incidence of headaches

20

associated with that regimen.” Duramed Pharms, Inc., 2010 U.S. App. LEXIS 6309, *21.

21

Additionally, the Federal Circuit specifically remanded the case to this court for the sole

22
23
24

5

See Duramed Pharms, Inc., 2010 U.S. App. LEXIS 6309, *19-20 (making specific factual findings
as to the teachings of the relevant prior art including Kovacs, the ‘749 patent, and the two Sulak articles).
6

25
26

See Duramed Pharms, Inc., 2010 U.S. App. LEXIS 6309, *19 (crediting Duramed’s lower level of
skill in addressing whether a reasonable person of ordinary skill in the art would have been motivated to
combine the relevant prior art to reach Duramed’s ‘949 patent.

5

1

purpose of evaluating the remaining Graham factor and allowing Duramed the opportunity to

2

challenge Watson’s prima facie cases of obviousness by introducing evidence of “secondary

3

considerations” of nonobviousness. Duramed Pharms., Inc., 2011 U.S. App. LEXIS 6309, *21

4

(“Duramed did not have an opportunity to challenge Watson’s prima facie case of obviousness or

5

introduce any secondary considerations of nonobviousness. Accordingly, we leave that

6

determination to the district court on remand.”). Therefore, the court finds that the Federal Circuit’s

7

holding that Watson has established a prima facie case of obviousness is binding upon this court.

8

Thus, the only issue before the court in addressing Duramed’s motion for injunctive relief is

9

whether Duramed has proffered sufficient evidence of secondary considerations of nonobviousness

10

to overcome Watson’s prima facie case of obviousness and establish that Watson’s patent

11

invalidity defense lacks merit.

12

B. Secondary Considerations

13

A patent holder can negate a prima facie case of obviousness by proffering evidence of

14

secondary considerations of nonobviousness. KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 405

15

(2007). This is because “[s]econdary considerations ‘may often establish that an invention

16

appearing to have been obvious in light of the prior art was not.’” Crocs, Inc. v. ITC, 598 F.3d

17

1294, 1310 (Fed. Cir. 2010) (quoting Stratoflex, Inc. v. Areoquip Corp., 713 F.2d 1530, 1538 (Fed.

18

Cir. 1983)). Thus, “[s]econdary considerations ‘can be the most probative evidence of non-

19

obviousness in the record . . . .’” Id. (quoting Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc.,

20

807 F.2d 955, 960 (Fed Cir. 1986)). Relevant secondary considerations include: a product’s

21

commercial success; skepticism in the field; copying of the product by others; and the product

22

meeting a long felt, but unsolved need. See e.g., KRS, 550 U.S. at 405 (commercial success and

23

long felt need); Metabolite Labs. Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1368 (Fed.

24

Cir. 2004) (initial skepticism); Akami Techs., Inc. v. Cable & Wireless Servs., Inc., 344 F.3d 1186,

25

1196 (Fed. Cir. 2003) (copying).

26

6

1

In its motion, Duramed argues that there are sufficient secondary considerations of

2

nonobviousness to overcome Watson’s prima facie case of obviousness and establish the validity

3

of the ‘969 patent including: (1) the Food and Drug Administration’s skepticism of the Seasonique

4

regimen; (2) Seasonique’s commercial success; (3) copying by other pharmaceutical companies

5

including Watson; (4) Seasonique’s “unexpected results” in reducing breakthrough bleeding during

6

the extended cycle; and (5) the public’s long felt, but unsolved need for an extended cycle oral

7

contraceptive that reduced hormone withdrawal symptoms including headaches. See Doc. #260.

8
9

After reviewing the pleadings and documents in this matter, along with the attached
declarations, the court finds that these secondary considerations are not sufficient to overcome

10

Watson’s prima facie case of obviousness. The court shall address each raised secondary

11

consideration below.

12

1. Initial Skepticism

13

Duramed contends that there was significant skepticism about the Seasonique regimen

14

when it was first released. In particular, Duramed argues that the Food and Drug Administration

15

(“FDA”) was so concerned about the impact of the inclusion of the unopposed estrogen during the

16

traditional hormone-free interval that it required Duramed to undergo extensive clinical trials prior

17

to approval despite already having an approved extended cycle oral contraceptive on the market

18

(Seasonale). However, there is no evidence before the court that the FDA would not always require

19

such a clinical trial of any new pharmaceutical drug which includes “novel” features like the

20

inclusion of new chemical combinations or compounds (like the inclusion of the unopposed

21

estrogen at issue here), the effects of which have not been clinically tested to government

22

guidelines. Further, there is no evidence that the FDA’s conduct in this case is unique to the ‘949

23

patent or that it related to any skepticism of the inclusion of unopposed estrogen rather than to the

24

FDA’s mandate to protect consumers by only allowing tested drugs which are not unduly harmful

25

onto the market.

26

7

1

2. Commercial Success

2

Duramed argues that Seasonique is the best-selling extended regimen oral contraceptive in

3

the United States, selling over $260,000,000 worth of the product since its launch in 2006, and

4

therefore, the market’s acceptance of the product establishes that the patent was not obvious.

5

See Doc. #273, Woodford Decl., Exhibit 1, ¶¶ 24-45. However, the court finds that Duramed has

6

not established a sufficient nexus between the sales of Seasonique and its claimed novelty (the

7

inclusion of unopposed estrogen during the traditional hormone-free period). In order for a

8

product’s commercial success to be a valid secondary consideration of nonobviousness, the

9

patentee must establish a nexus between the purported commercial success and the novelty of the

10

patented product. See Demanco Corp. v. F. Von Langsdorff Licensing, Ltd., 851 F.2d 1387, 1392

11

(Fed. Cir. 1988); see also Crocs, Inc., 598 F.3d at 30. Absent a sufficient nexus, a product’s

12

commercial success can be inferred on market forces unrelated to the inventiveness of the product.

13

Crocs, Inc., 598 F.3d at 31.

14

Here, the court finds that Duramed has failed to demonstrate how that novel aspect of the

15

patent, the inclusion of unopposed estrogen during the traditional hormone-free period, has led to

16

the claimed commercial success. Prior to the release of Seasonique, Duramed marketed and

17

distributed Seasonale, a traditional extended oral contraceptive that, as Duramed claims, created the

18

market for extended cycle contraceptives. However, upon generic introduction of similar regimens,

19

Duramed switched its marketing and distribution focus to Seasonique. Thus, it can be inferred that

20

sales of Seasonique are significantly linked to Seasonale’s successful history rather than on the

21

products “novelty.” Further, one can infer that Seasonique’s commercial success is likewise related

22

to Duramed’s heavy marketing campaign of roughly $60 to $70 million a year, rather than on the

23

inclusion of unopposed estrogen. Therefore, based on the record before the court, the court finds

24

that Duramed has failed to establish the required nexus between Seasonique’s commercial success

25

and the inclusion of unopposed estrogen during the traditional hormone-free period.

26

8

1

3. Copying of the Seasonique Regimen

2

Duramed argues that the fact that generic drug manufacturers7 are pursuing the introduction

3

of generic versions of its drug establishes the ‘969 patent’s nonobviousness. In general, market

4

acceptance of an invention, which can be proven through evidence of copying by others, shows that

5

those skilled in the art considered the invention novel and innovative rather than obvious and

6

trivial. Akami Techs, Inc., 344 F.3d at 1196.

7

However, an initial approved generic version of a drug, like Watson’s, cannot constitute

8

evidence of copying because of the statutory incentives to copy a patented drug and challenge the

9

patent’s validity. See 21 U.S.C. § 355(j)(5)(B)(iv) (providing a 180 day period of exclusivity to any

10

first generic manufacturer of a product that successfully challenges a patent covering the drug at

11

issue); see also, Santarus, Inc. v. Par Pharms, Inc., 720 F. Supp. 2d 427, 459 (D. Del. 2009) (where

12

evidence of copying was only an accused ANDA generic, the evidence was “not persuasive

13

objective evidence of non-obviousness.”). Further, the court finds the fact that other generic drug

14

manufacturers desire to enter the market with a generic version of Duramed’s patented drug is not,

15

in itself, sufficient to overcome Watson’s prima facie case of obviousness as outlined by the

16

Federal Circuit.

17

4. “Unexpected Results”

18

In its motion, Duramed references the “unexpected results” of its Seasonique regimen in

19

reducing breakthrough or spot bleeding during the contraceptive cycle. Duramed contends that this

20

unexpected benefit is a sufficient secondary consideration to overcome Watson’s claim of

21

obviousness. See P&G v. Teva Pharms. USA, Inc., 566 F.3d 989, 994 (Fed. Cir. 2009) (a prima

22

facie case of obviousness may be rebutted by strong evidence of unexpected results).

23

However, the court has reviewed the documents and pleadings relating to this secondary

24
7

25
26

Besides Watson, Duramed contends that several other drug manufacturers including Mylan
Pharmaceuticals, Inc. and Lupin Pharmaceuticals, Inc. are in the process of procuring the rights to make generic
versions of the drug.

9

1

consideration and finds that this evidence is not sufficient to overcome the prima facie case of

2

obviousness. First, despite Duramed’s claim that the Seasonique regimen reduces breakthrough

3

bleeding, the FDA only allowed Duramed to market Seasonique as a standard contraceptive

4

regimen. Duramed was precluded from marketing its product based on any claims that Seasonique

5

helped reduced breakthrough bleeding. Second, there is an issue whether Duramed’s claim is even

6

properly considered by the court because Duramed tested the Seasonique regimen against an

7

internal, nonpublic, company manufactured drug, and not against the closest prior art which was

8

Duramed’s Seasonale brand. See e.g., Kao Corp. v. Unilever U.S., Inc., 441 F.3d 963, 970 (Fed.

9

Cir. 2006) (“[W]hen unexpected results are used as evidence of nonobviousness, the results must

10

be shown to be unexpected compared to the closest prior art.”). Thus, there is insufficient evidence

11

before the court that Seasonique was any better than other extended contraceptive regimens on the

12

market, including Seasonale, at reducing breakthrough bleeding to overcome Watson’s prima facie

13

case of obviousness.

14

5. Long-felt, But Unsolved Need

15

Finally, Duramed argues that there was a long-felt need for its invention, but that the need

16

had been unsolved until its patent. Specifically, Duramed claims that there was a need for an

17

extended contraceptive regimen that reduced the traditional complaints of extended regimens like

18

breakthrough bleeding. The general assumption is that a long felt unsolved need points to

19

nonobviousness because if there had been such a need and its solution was so obvious, an ordinary

20

artisan would have found that solution prior to the patent. See KRS, 550 U.S. at 405-06.

21

However, once again there is insufficient evidence before the court that Seasonique was

22

better than other drugs on the market, including its own product Seasonale, at preventing

23

breakthrough bleeding. This is evidenced by the fact that the FDA did not allow Duramed to

24

market this proclaimed benefit. Thus, even if there was a long felt need for a product that reduced

25

breakthrough bleeding during an extended cycle, the Seasonique regimen could not have satisfied

26

10

1

that need in the public’s mind because the benefit was unknown.

2

Therefore, based on the record before the court, the court finds that Duramed has not

3

proffered sufficient evidence of secondary considerations of nonobviousness to overcome Watson’s

4

prima facie case of obviousness. As such, the court finds that Duramed has not raised serious

5

questions that Watson’s patent invalidity defense lacks merit to warrant Duramed’s requested

6

injunctive relief. Accordingly, the court shall deny Duramed’s motion for a temporary restraining

7

order and preliminary injunction.

8
9
10

IT IS THEREFORE ORDERED that plaintiff’s motion for a temporary restraining order
and preliminary injunction (Doc. #260) is DENIED.

11

IT IS SO ORDERED.

12

DATED this 16th day of June, 2011.
__________________________________
LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

13
14
15
16
17
18
19
20
21
22
23
24
25
26

11