Bayer Healthcare Pharma v. Watson Pharma

Citations: 713 F.3d 1369; 2013 WL 1606014Docket: 12-1397

Court: Court of Appeals for the Federal Circuit; April 16, 2013; Federal Appellate Court

Original Court Document: View Document

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In Bayer Healthcare Pharmaceuticals, Inc. and Bayer Schering Pharma AG v. Watson Pharmaceuticals, Inc., et al., the United States Court of Appeals for the Federal Circuit addresses consolidated patent infringement appeals from the District Court for the District of Nevada. The defendants, including Watson Pharmaceuticals and Sandoz, challenge the district court's summary judgment that claims 13 and 15 of Bayer's U.S. Patent RE37,564 are not invalid for obviousness based on prior art. The court, led by Circuit Judge Lourie, reverses the district court's ruling. The case revolves around combined oral contraceptive (COC) formulations, which have been used since 1960 to prevent pregnancy by delivering synthetic hormones that inhibit the ovarian cycle. The discussed COCs consist of a progestin and estrogen that suppress folliculogenesis, thereby preventing ovulation. For effective contraceptive action, these synthetic hormones must be taken daily, typically in 28-day packs which correspond to the natural ovarian cycle duration.

Early combined oral contraceptives (COCs) utilized a 21/7 dosing regimen, consisting of 21 active pills with synthetic progestin and estrogen followed by 7 placebo pills. This regimen aimed to induce a withdrawal bleed similar to natural menstruation and provide a break from synthetic hormones to reduce side effects. Most COCs still follow this 21/7 model. Over time, hormone doses were lowered due to adverse effects associated with high doses of synthetic estrogen, such as thromboembolism and nausea. The first low-dose COC with 20 µg of ethinylestradiol (EE) was approved in 1976, but this reduced dosage also led to weaker ovarian suppression, increasing the risk of escape ovulation and unintended pregnancy from missed pills. Bayer developed 23/5 and 24/4 regimens to enhance contraceptive efficacy by shortening the pill-free interval, leading to the filing of a patent application on December 22, 1993, which resulted in the '564 patent covering low-dose COCs. The '564 patent includes claims for formulations with specific dosages of EE and drospirenone (DRSP) and describes a product marketed as YAZ, which contains 24 active pills with 20 µg EE and 3 mg DRSP, approved for sale in the U.S. on March 16, 2006.

Defendants submitted Abbreviated New Drug Applications (ANDAs) to the FDA to market generic versions of YAZ, accompanied by Paragraph IV certifications claiming the invalidity of the ’564 patent. Bayer responded with patent infringement lawsuits, asserting that the ANDAs infringed claims 13 and 15 of the ’564 patent under 35 U.S.C. 271(e)(2). The Defendants admitted infringement but counterclaimed that the ’564 patent was invalid due to obviousness based on prior art. Both parties filed for summary judgment on the obviousness claim, with the district court favoring Bayer, ruling the patent claims were valid despite the cited prior art. Final judgments were issued against the Defendants, prohibiting FDA approval of their ANDAs until the patent's expiration on June 30, 2014. The Defendants appealed. The appellate court affirmed jurisdiction under 28 U.S.C. 1295(a)(1) and confirmed that the district court did not abuse its discretion in applying Rule 54(b) for partial final judgment on the patent's validity. The appeal focuses on whether the district court erred in its summary judgment ruling regarding the obviousness claim.

The Defendants present six prior art references to argue that the asserted claims of the ’564 patent are obvious: AU’094, EP’607, Molloy, Guillebaud, Landgren, and Goldstuck. They assert that the combination of AU’094, which details a combined oral contraceptive (COC) with 20-40 µg of EE and 1-10 mg of DRSP, with any of the other references would have made the claims obvious at the time of invention. The Defendants highlight that EP’607, along with the other references, disclose dosing regimens (23/5 and 24/4) that address the issue of missed-pill conceptions, suggesting a solution through shorter pill-free intervals. They claim that the district court erred in its interpretation of these references and in accepting insufficient evidence as secondary indicia of nonobviousness.

In contrast, Bayer argues that AU’094 and EP’607 relate specifically to hormone-replacement therapy and would not have been combined by a skilled artisan aiming to develop a COC in 1993. Bayer contends that the prior art suggested traditional 21/7 dosing, which discouraged the claimed formulations due to concerns about increased hormone exposure from reduced pill-free intervals. Bayer supports the district court's findings of unexpected results and other evidence of nonobviousness.

Ultimately, the Defendants assert that the district court incorrectly ruled the claims not invalid, citing 35 U.S.C. 103(a) which states that a claim is invalid for obviousness if it differs only in ways that would have been obvious to a skilled person at the time. They argue that all limitations of claims 13 and 15 of the ’564 patent are disclosed in the cited references, with EP’607 outlining a dosage regimen that includes the necessary hormonal components, although DRSP is not specifically mentioned.

AU’094 identifies DRSP as an additional progestin for contraceptive preparations, either alone or with estrogens, specifically recommending 20–40 µg of EE in combination with 1–10 mg of DRSP. It references EP’607, noting that the EE/DRSP formulations can be used similarly to those in EP’607 and incorporates its disclosures. Both AU’094 and EP’607 meet the limitations of the asserted claims, with AU’094 providing COC formulations that include the specified dosages and EP’607 outlining similar combinations under the 24/4 and 23/5 regimens. The critical legal question is whether a person skilled in the field would have been motivated to combine these teachings to achieve the claimed invention successfully. Establishing obviousness necessitates evidence that such a person would have selected and merged prior art elements, as supported by the KSR precedent. The prior art does not show a known desirability for the specific combination of drospirenone and EE with the claimed regimen, but it does highlight a motivation due to concerns about ovarian activity during the pill-free interval, which can lead to unintended pregnancies. Studies indicate that the risk of ovulation increases if the traditional pill-free period is extended, particularly for low-dose COCs. Bayer’s expert acknowledged that low-dose COCs are more susceptible to missed-pill ovulation risks. The evidence indicates that this issue was recognized in the field by 1993, with proposed solutions such as a 28-day pack with 23 active pills and 5 placebos to mitigate the risk of missed-pill ovulation while allowing for a withdrawal bleed.

The 24/4 dosing regimen is deemed beneficial as it maintains a 28-day cycle and reduces the risk of missed pills for women. Guillebaud suggests shortening the pill-free interval, typically to four days, for those at risk of breakthrough ovulation. Existing prior art supports implementing a shortened pill-free interval with low-dose combined oral contraceptives (COCs). Bayer argues that certain references focus on older women needing hormone replacement therapy and would not lead a skilled person to consider the 24/4 regimen for contraceptive purposes. However, these references clearly encompass both hormone replacement and contraceptive uses without differentiating by patient demographics. Bayer also claims that the prior art favored 21/7 dosing, but this does not negate the multiple references advocating for a shorter pill-free interval to enhance COC effectiveness. Guillebaud’s suggestions of shortening the pill-free interval while increasing hormone dosage are not interdependent, and each measure alone could mitigate missed-pill ovulation risks. Moreover, a finding of desirability for a combination does not require it to be the preferred method according to prior art. Bayer's arguments regarding secondary indicia of non-obviousness, such as unexpected results and expert skepticism, are insufficient. The data presented merely confirm that increasing active pills enhances follicular suppression, which is common sense. The FDA's request for data on the proposed regimen does not imply skepticism but reflects standard safety and efficacy evaluations for new drug applications.

Bayer asserts that its invention received widespread acclaim from experts in the combined oral contraceptive (COC) field, citing journal articles that reference its efficacy studies and potential non-contraceptive uses for the 24/4 COC regimen. One article, authored by the first-named inventor of the relevant patent, describes the regimen as "innovative." However, the reliance on these citations is deemed insufficient to demonstrate genuine industry praise, especially when the invention appears obvious based on existing published references. Additionally, Bayer's argument that the copying of its COC preparations by generic manufacturers supports its case for validity is rejected, as evidence of copying does not indicate nonobviousness given the requirement of bioequivalence for FDA approval. Ultimately, Bayer's remaining arguments are found unconvincing, leading to the conclusion that claims 13 and 15 of the ’564 patent are invalid due to obviousness based on prior art, resulting in the reversal of the district court's judgment.