A First? Orange Book Patent Delisting Counterclaim Denied in Litigation Over Acetaminophen Injection

June 11, 2014

By Kurt R. Karst –      

In what might very well be the first decision in a case involving a counterclaim seeking an order to correct or delete patent information from the Orange Book (and not concerning a patent use code), last week the U.S. District Court for the Southern District of California denied a Motion for Summary Judgment filed by Fresenius Kabi USA, LLC (“Fresenius”) to remove a patent – U.S. Patent No. 6,992,218 (“the ‘218 patent”) – from the Orange Book listed by Cadence Pharmaceuticals (“Cadence”) for OFIRMEV (acetaminophen) Injection.  FDA approved OFIRMEV on November 2, 2010 under NDA No. 022450 for the management of mild-to-moderate pain, for the management of moderate-to-severe pain with adjunctive opioid analgesics, and for the reduction of fever.  In 2012, Fresenius submitted a 505(b)(2) application – NDA No. 204767 – to FDA containing Paragraph IV certifications to the ‘218 patent and to U.S Patent No. 6,028,222, both of which are listed in the Orange Book as drug product patents.

Before we get into the specifics of the OFIRMEV case, some background is necessary for those who don’t necessarily get into every nook and cranny of the Hatch-Waxman Amendments. . . .

The 2003 Medicare Modernization Act (“MMA”) added provisions to the FDC Act to give 505(b)(2) and ANDA applicants the ability to challenge the listing of a patent in the Orange Book for a brand-name reference listed drug.  Prior to the enactment of the MMA, courts had ruled that there was no private right of action to delist an allegedly improperly listed patent (see, e.g., Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323, 60 USPQ2d 1576 (Fed. Cir. 2001); Andrx Pharmaceuticals, Inc. v. Biovail Corp., 276 F.3d 1368, 61 USPQ2d 1414 (Fed.Cir.2002)).  As a result of these decisions, as well as a July 2002 report from the Federal Trade Commission – “Generic Drug Entry Prior to Patent Expiration: An FTC Study” – that highlighted the problem of, among other things, the submission of inaccurate patent information, Congress added the patent delisting counterclaim provisions to the statute. 

The patent delisting counterclaim provisions at FDC Act §505(c)(3)(D)(ii)(I) applicable to 505(b)(2) applications state:

If an owner of the patent or the holder of the approved application under [FDC Act § 505(b)] for the drug that is claimed by the patent or a use of which is claimed by the patent brings a patent infringement action against the applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under FDC Act § 505(b) or (c)] on the ground that the patent does not claim either – (aa) the drug for which the application was approved; or (bb) an approved method of using the drug.

The MMA also added almost identical counterclaim provisions at FDC Act §505(j)(5)(C)(ii)(I) applicable to ANDA sponsors. 

The patent delisting counterclaim provision was most famously the topic of the U.S. Supreme Court’s decision in Caraco Pharm. Labs, Ltd. v. Novo Nordisk A/S, __ U.S. __; 132 S. Ct. 1670 (2012) (see our previous post here); however, that case concerned the scope of the counterclaim provision.  That is, whether challengeable patent information includes patent use code narratives.  While there have been some cases in which the delisting counterclaim provisions have been asserted by 505(b)(2) and ANDA applicants (see our previous posts here and here), the cases were ultimately resolved without a merits decision on the counterclaim.

The OFIRMEV case caught our attention last year when the district court decided Cadence’s Motion to Dismiss the Amended Counterclaim for “Improper Patent Listing” (Count V, ¶¶ 25-45) of the ‘218 patent filed by Fresenius (opposition and reply briefs here and here).  According to Fresenius, the ‘218 patent is improperly listed in the Orange Book for OFIRMEV because it “only consists of process claims and a single product-by-process claim directed to a non-novel product.”  Under regulations promulgated by FDA in 2003, process patents are not eligible for Orange Book listing (21 C.F.R. § 314.53(b)(1)); however, product-by-process patents can be listed if the product claimed is novel (21 C.F.R. § 314.53(c)(2)(i)(L)).  Cadence argued that Fresenius’ counterclaim does not fit into either of the categories identified in the FDC Act and should be dismissed.  Finding that Fresenius “can state a delisting counterclaim by alleging that the ‘218 patent, a product-by-process patent, does not claim a novel product,” the district court denied Cadence’s Motion to Dismiss and allowed the counterclaim challenge to proceed.

Following the court’s decision to let the counterclaim challenge proceed, Fresenius ultimately filed a Motion for Summary Judgment to delist the ‘218 patent from the Orange Book (opposition and reply briefs here and here).  According to Fresenius:

While the ‘218 patent contains 19 claims, the first 18 claims are “process” claims that do not support Orange Book listing.  Claim 19 is the only claim of the ‘218 patent that could provide the basis for listing the ‘218 patent because it is a product-by-process claim, and product-by-process patents are listable if the claimed product of the process is “novel.”  But the product of claim 19, an injectable aqueous solution of acetaminophen, is not novel. . . .  Because the product of product-by-process claim 19 is not novel, the ‘218 patent should be delisted from the Orange Book pursuant to the counterclaim provisions of the Hatch-Waxman Act.

Put another way, Fresenius argued that a product-by-process claim directed to a non-novel product is substantively no different than a process claim; thus ‘218 patent is a process patent that may not be listed in the Orange Book.  The district court, however, did not agree.

In a June 5th decision, the district court sided with Cadence, saying that the issue of novelty ultimately bears on the validity of the ‘218 patent:

Fresenius asks the Court to decide in the delisting context whether Cadence’s representation of novelty is correct. Whether the product claimed is novel also bears on the validity of claim 19.  A product-by-process claim which claims a non-novel product is invalid. . . .  Fresenius’ attack on the novelty of the product claimed in claim 19 is therefore also an attack on the claim’s validity.

According to Fresenius, in analyzing the novelty issue in the delisting context, the Court should disregard the presumption of patent validity and the accompanying heavier burden of proof to overcome the presumption. . . .  Fresenius has cited no authority in support of this argument, and the Court is aware of none.  On the other hand, Fresenius has asserted a separate invalidity counterclaim contending that claim 19 is invalid because the claimed product is obvious, i.e., not novel.  The invalidity counterclaim is not the subject of Fresenius’ pending summary judgment motion.  In light of the foregoing, the Court declines to determine solely in the delisting context whether the product of claim 19 is not novel. The novelty issue is better addressed at trial in the context of Fresenius’ invalidity counterclaim.

The court also noted that following Fresenius’ logic could mean an odd outcome: “a discordant finding that a product which is found novel in light of the validity presumption for purposes of patent validity, is not novel for listing purposes, and that the product-by-process patent claiming it is therefore not entitled to listing, thus requiring delisting of a valid product-by-process patent.”

Whether an appeal of the district court’s decision will ensue remains to be seen.  Perhaps the issue of novelty will ultimately be decided, leading Fresenius to revisit Orange Book listing of the ‘218 patent.   Regardless, there is now more jurisprudence to consider when challenging the listing of a patent.