In Sanofi v. Watson Labs., the Circuit affirms a determination of induced infringement of one patent and direct infringement of another, thus assuring Sanofi another 12 years of exclusivity as to its Multaq® atrial fibrillation drug.

Thanks to my colleague Lance Termes for his help with this week’s report. Lance has joined our Bend office as part of the recent expansion of the firm’s IP group.

Pete Heuser

Sanofi v. Watson Laboratories Inc., Fed. Cir. Case 2016-2722, -2726 (November 9, 2017)

The panel affirms a district court judgment that generic manufacturers Watson and Sandoz (collectively “Watson”) would induce or directly infringe valid claims of two patents covering Sanofi’s Multaq dronedarone drug designed to address atrial fibrillation (“AF”). This is a significant win for Sanofi, as sales of Multaq could reach $500 million this year. Watson is a subsidiary of Teva, so this could have dramatically affected those sales had Watson prevailed in this appeal.

Watson filed ANDA actions alleging that Sanofi’s ’800 and ’167 patents were invalid and/or not infringed by their proposed generic. In a bench trial, the district court ruled that the sale of the generic drugs, with their proposed labels, would induce physicians to infringe valid claims of the ’167 patent and would directly infringe valid claims of the ’800 patent.

The district court found that the label to be used by defendants instructed patients with a history of AF to take the drug. The label also referenced extensive testing as to which patients could most benefit from taking the drug. The panel finds no clear error in the finding that this label showed an intent to induce infringement of the ’167 patent.

Watson contended that, because Multaq has substantial noninfringing uses not forbidden by the proposed labels, the district court could not permissibly find intent. But, according to the opinion, there is no legal or logical basis for the suggested limitation on inducement. Section 271(b), on inducement, does not contain the “substantial noninfringing use” restriction of section 271(c), on contributory infringement. The panel cites the Supreme Court’s 2005 Grokster copyright case (which, in its analysis, drew on patent cases) for the proposition that a person can be liable for inducing an infringing use of a product even if the product has substantial noninfringing uses. The opinion also cites to the Circuit’s 2010 AstraZeneca v. Apotex case, which upheld an inducement finding without the kind of limiting commands that Watson suggests a label must contain.

As to obviousness of the ’167 patent, the panel rejects Watson’s argument that the court employed too high of a standard for proving reasonable expectation of success. The district court held that the claims of the ’167 patent were not proved to be obvious because a person of ordinary skill in the art in 2008 would not have had a reasonable expectation that Multaq would reduce the risk of hospitalization for patients with AF. Although the evidence might well have supported the opposite finding, the district court did not clearly err in its finding that a person of ordinary skill would not have had a reasonable expectation that Multaq would succeed in reducing cardiovascular hospitalization in the pertinent patient population.

In seeking to reverse the finding of infringement of the ’800 patent, Watson argued that the district court erred by failing to limit the claims of the ’800 patent to exclude polysorbate surfactants. Watson pointed to the fact that, while prosecuting the parent application, Sanofi amended the independent claims to exclude pharmaceutical compositions with a “polysorbate surfactant.” Based on that amendment, Watson contended that Sanofi made a prosecution disclaimer that also limits the scope of the claims of the ’800 patent, despite the absence of any limiting language in the ’800 patent’s claims. According to the panel, a prosecution disclaimer will only apply to a subsequent patent if that patent contains the same claim limitation as its predecessor.

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