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Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals
Citation: Not availableDocket: 16-2707
Court: Court of Appeals for the Federal Circuit; April 13, 2018; Federal Appellate Court
Original Court Document: View Document
West-Ward Pharmaceuticals International Limited and West-Ward Pharmaceuticals Corp. appeal a ruling from the U.S. District Court for Delaware, which determined that they infringed claims 1–9, 11–13, and 16 of U.S. Patent 8,586,610, related to methods for treating schizophrenia with iloperidone based on patient genotypes, specifically the CYP2D6 gene. The court affirmed the earlier decision after a bench trial, noting that the ’198 patent, owned by Aventisub LLC and exclusively licensed to Vanda Pharmaceuticals, had been stipulated to be infringed. The ’610 patent, expiring November 2, 2027, specifies that patients with lower CYP2D6 activity (poor metabolizers) should receive a lower dosage of iloperidone (12 mg/day or less) compared to those with normal CYP2D6 activity (up to 24 mg/day) to mitigate the risk of QT prolongation, which can lead to serious cardiac issues. The claims of the ’610 patent were upheld as valid and non-obvious. The opinion was authored by Circuit Judge Lourie, with a dissenting opinion from Chief Judge Prost. Vanda Pharmaceuticals owns NDA 22-192 for Fanapt (iloperidone), an atypical antipsychotic approved by the FDA in 2009 for schizophrenia treatment. The FDA approval was partially based on the ’610 patent, which addresses side effects associated with QTc prolongation, enhancing treatment safety. Both the ’198 and ’610 patents are included in the FDA’s Orange Book for Fanapt®. In 2013, West-Ward submitted ANDA 20-5480 for a generic version of Fanapt in various strengths, certifying that the ’198 patent was invalid or not infringed. This led to a lawsuit filed by Vanda for infringement of the ’198 patent. West-Ward’s proposed labeling closely mirrored Fanapt's, with specific dosage recommendations and warnings regarding QT prolongation. The ’610 patent issued on November 19, 2013, prompting Vanda to file a separate infringement suit in 2014. West-Ward subsequently amended its ANDA to challenge the validity of the ’610 patent. The district court consolidated the cases and determined that West-Ward's actions constituted inducement of infringement of the ’610 patent, while not amounting to contributory infringement. The court ruled that West-Ward's Paragraph IV certification was an infringement act, and that Vanda’s expert demonstrated the patent's claims were practiced with Fanapt. Additionally, the court upheld the validity of the asserted claims against challenges under sections 101, 103, and 112 for lack of written description. The court determined that the asserted claims relate to natural laws involving iloperidone, CYP2D6 metabolism, and QTc prolongation. However, it noted that the ’610 patent enhances these natural relationships by incorporating CYP2D6 genotyping tests to optimize iloperidone dosing for minimizing QTc risks. The court ruled that West-Ward failed to demonstrate by clear and convincing evidence that the specific test and results were conventional. The data in the patent was deemed sufficient for establishing possession of the claimed dosage range, despite not being statistically significant. Relief under 35 U.S.C. 271(e)(4)(A) was denied for the ’610 patent because it was issued after West-Ward filed its ANDA. The court granted injunctive relief, enjoining West-Ward from commercial activities related to its ANDA product until after the expiration of the ’610 patent. It also mandated that the effective date for any FDA approval of West-Ward’s ANDA must not be earlier than the expiration of the patent and any associated exclusivities. West-Ward appealed the district court’s decision, and the appellate court has jurisdiction under 28 U.S.C. 1295(a)(1). The appellate review standard includes de novo for legal conclusions and clear error for factual findings. The court addressed jurisdiction issues, specifically whether the district court had authority under the Hatch-Waxman Act for a patent that issued after the ANDA was filed. Vanda argued that infringement claims under 35 U.S.C. 271(e)(2) provided subject matter jurisdiction, while West-Ward contended that such claims could only arise from patents issued before the ANDA. West-Ward also claimed that the amended Paragraph IV certification did not create jurisdiction since it was not filed prior to the 2014 suit. The appellate court agreed with Vanda that the district court had jurisdiction in this case. By enacting 35 U.S.C. § 271(e)(2), Congress established a specific cause of action for patent infringement, allowing district courts to assert jurisdiction under 28 U.S.C. § 1338(a) when patentees bring claims related to patents. The Federal Circuit and Supreme Court have clarified that jurisdiction is proper in cases alleging infringement under § 271(e)(2), regardless of the ultimate merits of the claims. In the case at hand, Vanda's complaint against West-Ward for infringing the ’610 patent by filing an ANDA was sufficient to establish the district court's subject matter jurisdiction. Arguments concerning the validity of the infringement claim pertain to the merits, not jurisdiction. An actual controversy existed from the time the suit was filed, as required for federal court adjudication, despite West-Ward's delay in submitting a Paragraph IV certification for the patent. Section 271(e)(2) provides a defined act of infringement that creates a justiciable controversy, enabling courts to resolve disputes regarding infringement and validity promptly. The district court had jurisdiction over the ’610 patent under the Hatch-Waxman Act. In a bench trial, infringement is assessed as a factual question, reviewed for clear error. The infringement analysis under 35 U.S.C. § 271(e)(2)(A) involves comparing patent claims against a product likely to be sold after ANDA approval. The patentee must prove infringement by a preponderance of the evidence. The case addresses whether a claim for infringement under § 271(e)(2)(A) can exist when the ’610 patent was issued after the original ANDA submission, and Vanda sued West-Ward before West-Ward submitted a Paragraph IV certification. The district court found that West-Ward's Paragraph IV certification submission constituted an act of infringement. Vanda contended that amending the ANDA to include a Paragraph IV certification for a newly issued patent is an infringement under § 271(e)(2). West-Ward argued that because the ANDA was filed before the patent issuance, the amendment cannot be deemed an infringement, as it only pertains to drugs claimed in existing patents, not those potentially claimed later. The Hatch-Waxman Act was designed to balance incentives for drug research with the need for affordable generic drugs, creating an "artificial" act of infringement for ANDA submissions. Specifically, it establishes that submitting an ANDA for a drug claimed in a patent constitutes infringement if aimed at obtaining approval to manufacture or sell the drug before the patent expires. While acknowledging that only an issued patent can support an infringement claim under § 271(e)(2)(A), the court disagreed with West-Ward's argument that this precludes Vanda’s claim in this instance. The ’610 patent pertains to a drug and its usage, which is recognized despite the patent being issued after West-Ward's submission of its Abbreviated New Drug Application (ANDA). West-Ward later amended its ANDA to include a Paragraph IV certification for the newly issued ’610 patent. Under 35 U.S.C. § 271(e)(2)(A), the infringement analysis must consider this amended ANDA. The statute does not limit infringement assessments to the initial ANDA filing, as it allows for amendments as standard practice. Such amendments, including those for patents issued post-ANDA submission, can constitute infringement under § 271(e)(2)(A). It is established that West-Ward's submission of a Paragraph IV certification for the ’610 patent after its issuance qualifies as an infringement act. Consequently, an ANDA filer can face infringement claims for patents that are granted after the ANDA is filed but before FDA approval, promoting early resolution of patent disputes between generic and brand-name drug companies as intended by the law. The FDA regulations and legislative history refute West-Ward's claim that the term 'application' in § 271(e)(2)(A) does not encompass ANDA amendments. The Hatch-Waxman Act modified the Federal Food, Drug, and Cosmetics Act to enable a streamlined process for generic drug approvals and mandates that New Drug Application (NDA) holders update patent information for patents issued after NDA approval. ANDA applicants must provide one of four certifications regarding patents listed in the FDA's Orange Book, and if a Paragraph IV certification is made, the NDA holder must be notified. Moreover, ANDA applicants are generally required to amend their applications to include appropriate patent certifications for patents issued after the ANDA submission. The type of certification affects the timing of FDA approval, with a Paragraph IV certification allowing for a potential thirty-month stay of approval, which may be modified under certain conditions. Historical amendments to this provision indicate that 'application' in 35 U.S.C. § 271(e)(2) includes ANDA amendments, and multiple thirty-month stays can occur for the same ANDA due to various Paragraph IV certifications related to patents listed in the Orange Book, regardless of their issuance timing relative to the original ANDA submission. In 2003, Congress amended 21 U.S.C. 355(j) to prevent multiple thirty-month stays for the same Abbreviated New Drug Application (ANDA) and required that the relevant patent information must be submitted to the FDA before the ANDA submission date. However, the amendment did not alter 35 U.S.C. 271(e)(2) to exclude amendments and supplements to the ANDA as acts of infringement, indicating that "application" in 271(e)(2) includes these amendments. This understanding supports the district court's infringement analysis for the ’610 patent under 35 U.S.C. 271(e)(2)(A). Regarding inducement, West-Ward contested the court's finding of induced infringement, arguing that Vanda did not prove direct infringement or specific intent to induce. Vanda countered that the district court correctly found West-Ward would induce infringement of the asserted claims. Under 35 U.S.C. 271(b), active inducement requires a showing of direct infringement and specific intent to encourage that infringement. Circumstantial evidence, such as advertising or labeling that instructs how to infringe, can support a finding of specific intent. The proposed label must encourage or promote infringement to establish intent. West-Ward claimed the district court erred in determining that its label met the asserted claims and in finding that Dr. Alva practiced the asserted claims by not administering an infringing dose to a poor metabolizer. Vanda argued that, in a Hatch-Waxman context, it was not necessary to prove actual instances of direct infringement by physicians, as infringement is defined by the filing of an ANDA or its amendments. Vanda identified Dr. Alva as practicing the asserted claims and contended that the claims do not require a single physician to administer iloperidone to both poor and non-poor CYP2D6 metabolizers. The court agreed with Vanda, affirming that proof of actual past direct infringement by a physician is not needed to establish infringement under 35 U.S.C. 271(e)(2)(A). Section 271(e)(2)(A) allows patent owners to seek a court ruling on whether a drug would infringe a patent if marketed, with the infringement inquiry being hypothetical since the product is not yet available. The patent owner must prove by a preponderance of the evidence that the alleged infringer is likely to market an infringing product. In Hatch-Waxman litigations concerning method patents, patentees do not need to demonstrate that a previously used drug meets the limitations of the asserted claims. Instead, the focus is on whether the actions sought in an Abbreviated New Drug Application (ANDA) would constitute infringement. Vanda can demonstrate predicate direct infringement by showing that the proposed ANDA product would infringe the ’610 patent if marketed. The district court found that the proposed label suggests that physicians perform the claimed steps, and its analysis was deemed proper. The determination of infringement considers all relevant evidence, and the ANDA description is pivotal in this analysis. Regarding specific intent, West-Ward argues that Vanda did not prove its label would encourage physicians to perform all claimed methods, citing noninfringing uses. Vanda contends that the district court's finding of induced infringement for independent claims 1, 9, and 13 was not clearly erroneous. The proposed label sections detail dosage recommendations and adjustments, emphasizing the need for careful titration of iloperidone. The court affirmed the district court’s infringement findings for the independent claims, rendering any errors concerning dependent claims harmless. Therefore, the damages award from the district court remains upheld, as it was not contingent on specific claims. Co-administration of iloperidone with strong CYP2D6 inhibitors, such as fluoxetine, leads to a 2.3-fold increase in iloperidone plasma levels, necessitating a dose reduction to half. Additionally, patients identified as poor metabolizers (PMs) of CYP2D6 should also have their iloperidone dosage halved. Genotyping tests are available to identify these PMs, and the district court found that the label suggests practitioners perform such tests. Both parties' expert testimonies confirmed that these laboratory tests refer to genotyping. The court concluded that the label’s recommendations imply a need for genotyping tests, rejecting West-Ward’s arguments and evidence to the contrary, and found no clear error in this determination. Furthermore, the court stated that the label recommends specific dosing guidelines for non-genotypic and genotypic CYP2D6 PMs, affirming the dosage instructions as consistent with the evidence presented. The district court's findings regarding the recommendations for genotyping and dosing were upheld, with recognition that the absence of an explicit statement about obtaining biological samples does not negate the court's conclusions on induced infringement related to those requirements. For genetic CYP2D6 poor metabolizers, the recommended dose is reduced by half, resulting in a target dose range of 6 to 12 mg/day, with a maximum of 12 mg/day. The label's instruction to titrate dosage does not contradict its clear dosage recommendations. In contrast, the dosing range for non-poor metabolizers is 12 to 24 mg/day; thus, administering greater than 12 mg/day to this population satisfies the independent claims of the patent. The presence of a target dose that instructs users to perform the patented method supports a finding of intent to induce infringement, irrespective of whether all practitioners will prescribe an infringing dose. The argument by West-Ward referencing Warner-Lambert is deemed irrelevant, as that case involved off-label uses with significant noninfringing uses, whereas here, the proposed label directly recommends infringing acts. Consequently, West-Ward can be held liable for induced infringement under Section 271(b), which does not have the substantial noninfringing use limitation found in Section 271(c). Regarding patent subject matter eligibility, West-Ward claims the asserted patents are ineligible under Section 101 due to their focus on a natural relationship involving iloperidone, CYP2D6 metabolism, and QT prolongation, arguing they are similar to claims invalidated in past cases. Vanda counters that the claims meet patent eligibility requirements at both steps of the Mayo/Alice test and asserts that the district court erred in classifying the claims as laws of nature. Vanda argues that the court's conclusions do not legally establish ineligibility. The excerpt analyzes the eligibility of patent claims under Section 101 of the Patent Act, specifically focusing on the two-step framework established by the Supreme Court in the Alice/Mayo analysis. The first step requires determining whether the claims are directed to patent-ineligible concepts, such as laws of nature, natural phenomena, or abstract ideas. If they are not, the inquiry ends there. If they are, the second step involves evaluating whether additional elements in the claims transform them into a patent-eligible application, seeking an "inventive concept" that ensures the patent is significantly more than just the ineligible concept itself. The excerpt references relevant case law, including Mayo and Alice Corp., emphasizing the need for a careful determination to avoid overly broad interpretations that could undermine patent law. It states that the asserted claims in this case, specifically a method for treating schizophrenia with iloperidone based on a patient's CYP2D6 genotype, do not fall under patent-ineligible subject matter. The claims include specific steps for determining the patient's genotype and administering tailored dosages, which West-Ward argues are similar to claims deemed ineligible in prior cases. However, the court agrees with Vanda that the claims are patent-eligible, as they are not directed to an ineligible concept. The Supreme Court determined that certain claims recited a natural law without additional features that would ensure they are more than an attempt to monopolize that law. In contrast to the Mayo case, where claims were centered on a diagnostic method involving natural metabolic processes without addressing a specific treatment, the current case involves the ’610 patent, which pertains to a method for using iloperidone to treat schizophrenia. The inventors acknowledged the natural relationships between iloperidone, CYP2D6 metabolism, and QTc prolongation but focused on specific claims that require doctors to administer defined dosages based on genetic testing results. This approach represents a novel application of an existing drug, enhancing patient safety by reducing QTc prolongation risks. Unlike the Mayo claims, which did not limit doctors' treatment choices and could lead to patent violations regardless of dosage adjustments, the ’610 patent does not restrict subsequent treatment decisions by doctors, thereby distinguishing it from the Mayo precedent. Claims in the '610 patent specify a dosage regimen for administering iloperidone based on a patient's CYP2D6 genotype, requiring a maximum of 12 mg/day for poor metabolizers and up to 24 mg/day for others. This contrasts with the Mayo case, where the claim merely indicated a need for dosage adjustment without prescribing specific amounts. The claims in the '610 patent do not restrict a physician's treatment decisions but instead provide detailed treatment protocols, supporting their patent eligibility. The decision in CellzDirect reinforces this by highlighting that claims directed to practical methods, rather than mere observations, can be patent eligible. The Supreme Court's ruling in Myriad is also distinguished; it dealt with naturally occurring DNA segments, while the '610 patent does not involve such claims but rather a specific method of treatment. Overall, the '610 patent's claims are patentable as they detail a precise treatment method that enhances safety for patients using iloperidone, distinguishing them from the Mayo precedent. Additionally, there is an ongoing consideration of whether the patent satisfies the written description requirement, which mandates that the patent must clearly convey the invention's details. The legal document addresses the adequacy of the written description in the ’610 patent concerning dosage ranges for CYP2D6 metabolizers. West-Ward contends that the patent lacks sufficient description for the claimed dosages, particularly for poor metabolizers, arguing that it does not include experiments with doses of 12 mg/day or less. Vanda asserts that the district court's finding of adequate written description is not clearly erroneous. The patent includes test results that correlate QTc prolongation with the administration of iloperidone, demonstrating that dosage adjustments based on CYP2D6 genotype enhance patient safety. Specifically, it provides examples of reducing iloperidone doses for poor metabolizers to 75%, 50%, or 25% of typical dosages, with a specific example of reduced dosages of 18, 12, or 6 mg per day. The court noted that the presence of a dose outside the claimed range does not invalidate the written description, as it is permissible for claims to specify a subset of a broader range. Testimonies presented indicated a trend supporting the need for dosage reduction in poor metabolizers, and while West-Ward challenged the data and its analysis, the court found the supporting evidence sufficient for upholding the patent's validity. The district court's finding that the ’610 patent adequately discloses the claimed range for poor metabolizers was not clearly erroneous. West-Ward forfeited its challenge regarding the written description for non-poor metabolizers by failing to raise it adequately in the trial court. The Supreme Court's precedent indicates that federal appellate courts generally do not consider issues not addressed below, and West-Ward has not provided justification for deviating from this rule. West-Ward referenced only a few pages from its post-trial briefs, which did not substantiate its claim that the issue was not waived, as it failed to address the written description for non-poor metabolizers in its pretrial submissions. Regarding injunctive relief, West-Ward argued that the injunctions were unsupported by the court's equitable powers and that lack of jurisdiction under 35 U.S.C. § 271(e)(2) undermined the injunctions under § 271(e)(4). West-Ward also claimed that the FDA's independent determination on the ’610 patent's litigation status should prevent delays in ANDA approvals. Vanda countered that the injunctions were valid under § 271(e)(4) and challenged the court's decision not to grant relief based on that provision. The court found that Vanda had demonstrated infringement under § 271(e)(2) and concluded that § 271(e)(4) justified the injunctive relief awarded by the district court, which allows for injunctions against infringers to prevent the commercial activities related to the infringing products. The remedies specified in subparagraphs (A), (B), (C), and (D) are the exclusive remedies a court can grant for patent infringement under paragraph (2), except for attorney fees under section 285. Section 271(e)(4) does not provide exceptions for patents issued after the submission of the original Abbreviated New Drug Application (ANDA). Following an infringement finding under section 271(e)(2), the district court must issue remedies as outlined in section 271(e)(4). West-Ward's argument relying on an FDA letter regarding another company's ANDA for iloperidone tablets is flawed, as the letter confirms that the '610 patent's submission after the ANDA negates the thirty-month statutory stay. The letter does not address whether the FDA would modify the effective approval date of the ANDA based on a court order under section 271(e)(4)(A), should the '610 patent be found valid and infringed. The requirements for a thirty-month stay under 21 U.S.C. 355(j)(5)(B)(iii) differ from the remedies available under section 271(e)(4) following an infringement finding. If the FDA has already approved the ANDA, a section 271(e)(4)(A) order would change the final approval to tentative approval. The district court's authority extends beyond the specific circumstances listed in 21 U.S.C. 355(j)(5)(B)(iii). The court correctly reset the effective date of the ANDA under 35 U.S.C. 271 without needing to go through 21 U.S.C. 355. The affirmation of the district court's infringement finding under 271(e)(2) supports the grant of injunctive relief, which aligns with the available remedies in 271(e)(4). Thus, the district court's decision to grant injunctive relief is upheld. Vanda Pharmaceuticals was not required to file a cross-appeal to support the district court's grant of injunctive relief regarding the FDA. An appellee can argue for affirmance based on the record, even if it involves critiquing the lower court's reasoning, but cannot seek to expand their rights or diminish those of their adversary without a cross-appeal. The court referenced El Paso Natural Gas Co. v. Neztsosie and other precedents to clarify that a party cannot introduce issues on which they have not appealed if it would alter the judgment. Vanda's arguments were deemed valid under 271(e)(4), allowing for affirmance without modifying their rights. The court noted that a party not adversely affected by a judgment lacks standing to cross-appeal, citing TypeRight Keyboard Corp. v. Microsoft Corp. The court also evaluated West-Ward's remaining arguments and found them unconvincing, ultimately affirming the district court's decision. In a dissent, Chief Judge Prost argued that the asserted patent claims were directed to a law of nature, contending that the majority's distinction from Mayo was flawed. Prost maintained that the claims failed to provide an inventive concept necessary for patent eligibility, despite agreeing on jurisdiction under the Hatch-Waxman Act. The dissent emphasized that merely stating a law of nature with the directive to apply it does not meet the patent-eligibility requirements as established in Mayo Collaborative Services v. Prometheus Laboratories. The ’610 patent claims an invention that enables safer treatment of patients with low CYP2D6 enzyme activity using a lower dose of a drug known to cause QT prolongation. It asserts that administering iloperidone at 12 mg/day or less is safer for CYP2D6 poor metabolizers compared to higher doses. The majority opinion concludes that the claims do not address ineligible subject matter under the Mayo/Alice framework, a stance which is disputed. The Mayo case established that patents could not claim laws of nature, specifically highlighting the relationship between metabolite concentrations and drug efficacy or toxicity. The Supreme Court's ruling in Mayo identified that precise correlations between metabolite levels and drug effects were not previously known in the field. The ’610 patent's claims, however, detail a method for treating schizophrenia by first determining a patient's CYP2D6 metabolizer status and then administering appropriate dosages of iloperidone tailored to that status, thereby directly linking treatment outcomes to the identified genotype. The excerpt analyzes the legal implications of the ’610 patent in the case of Vanda Pharmaceutical Inc. v. West-Ward Pharmaceutical International Ltd., emphasizing the relationship between the CYP2D6 genotype and the dosage of iloperidone in relation to QTc prolongation risk. The majority opinion differentiates this patent from the Mayo case, asserting that the claim involves a specific method of treatment rather than merely recognizing a natural law. However, the dissent argues that despite the specific dosages outlined in the patent, the claims still fundamentally reflect a natural law similar to that in Mayo. The dissent highlights that the patent does not introduce an inventive concept, merely instructing doctors to apply known natural laws in routine practice, which was already established prior to the patent's filing. It critiques the majority for failing to adequately distinguish the substantive similarities between the two cases, asserting that the additional elements in the claims, such as the genetic assay, are conventional and do not enhance patent eligibility under Section 101. The dissent concludes that the differences cited by the majority do not suffice to establish an inventive step beyond what Mayo prohibits. Patent claims in this case do not limit themselves to specific applications of natural laws, distinguishing them from typical drug patents. The majority opinion references the Mayo decision, asserting that the claims are directed to a natural law. This view aligns with the precedent set in Rapid Litigation Management Ltd. v. CellzDirect, where the claims involved a process that went beyond merely observing a natural ability. In contrast, the current claims merely apply the natural law regarding iloperidone dosage adjustments for poor metabolizers, which does not introduce an inventive concept. The district court's finding of non-obviousness was based on clinical testing results related to the natural law rather than any novel aspect of the claims. Consequently, the claims are deemed directed to ineligible subject matter, leading to a dissenting opinion on their patentability.