Cephalon, Inc. v. Watson Pharmaceuticals, Inc. (Fed. Cir. 2013)

Whether ANDA litigation has had a positive or negative impact on generic drug availability is an open question, in view of several recent reports looking at the effects such litigation has had on both branded and generic drugs over the past thirty years.  Indeed, the current squabble over "reverse payment" settlement agreements of lawsuits under the ANDA provisions of the Hatch-Waxman Act (codified at 35 U.S.C. § 271(e)(2)) involves many of these same issues, revolving around the question of whether it is prudent for both branded and generic parties of ANDA lawsuits to settle rather than wage protracted, often pyrrhic, patent litigation (see "FTC Releases Another Report on Reverse Payment Settlement Agreements in ANDA Litigation").  Occasionally, of course, both parties get an outcome they can live with, and one such occasion occurred today in Cephalon v. Watson Pharmaceuticals, where the Federal Circuit affirmed a District Court decision that the generic drug did not infringe the patent-in-suit but reversed the District Court on the issue of whether the patents were invalid for lack of enablement.

Cephalon #2The case involved a formulation of fentanyl, an opioid sold by NDA holder Cephalon under the brand name FENTORA®.  Cephalon listed U.S. Patent Nos. 6,200,604 and 6,974,590 in the Orange Book and asserted both patents in response to Watson's ANDA filing; claim 1 of the '604 patent:

1.  A method of administering at least one systemically distributable pharmaceutical agent across the oral mucosa comprising:
    a) providing a solid oral dosage form including a pharmaceutically effective amount of an orally administerable medicament; and at least one effervescent agent in an amount sufficient to increase absorption of said orally administerable medicament across the oral mucosa; wherein said orally administerable medicament is not substantially encompassed by or dispersed in a material that prevents absorption of said medicament across the oral mucosa;
    b) placing said solid oral dosage form in the mouth of a patient so that saliva in said patient's mouth activates said at least one effervescent agent in said tablet; and
    c) holding said solid oral dosage form and the dissolving contents of said solid oral dosage form in the mouth of a patient whereby said at least one effervescent agent promotes absorption of said orally administerable medicament across the oral mucosa.

and claim 1 of the '590 patent:

1. A method of administration of fentanyl to a mammal across the oral mucosa thereof, said method comprising:
    providing a solid oral dosage form comprising fentanyl or a pharmaceutically acceptable salt thereof and at least one saliva activated effervescent agent in an amount sufficient to increase absorption of said fentanyl or pharmaceutically acceptable salt thereof across said oral mucosa, at least one pH adjusting substance, and wherein said amount of said at least one effervescent agent is between about 5% by weight and about 80% by weight; and buccally, sublingually or gingivally administrating said solid oral dosage form to said mammal.

are representative (emphases in original opinion).

The formulation involved orally administered fentanyl designed to use the mucosal membranes of the mouth and oral cavity to introduce the drug into the body (thus avoiding the gastrointestinal tract).  The claims of the patents-in-suit were directed to the use of effervescent agents as penetration enhancers to promote uptake of fentanyl (or other drugs) into the oral mucous membranes.  In addition, the patent claims included in the formulation a "pH adjusting substance" that worked together with the effervescent agent in promoting drug uptake.  As explained in the Federal Circuit opinion, effervescence agents falling within the scope of the patent claims included "at least one compound that evolves a gas," typically via a chemical reaction between the agent and water (saliva) in the mouth.  These agents included an acid source, such as citric acid, and a carbon dioxide source (such as carbonate or bicarbonate), wherein the reaction resulted in carbon dioxide production.  The pH adjusting substance was included because the effervescence reaction reduces the pH of saliva in the mouth, which can affect the solubility of fentanyl or other drug in the formulation.

Watson PharmaceuticalsThe District Court found that Watson's ANDA product did not infringe, based on its construction of the claim term "at least one [saliva activated] effervescent agent in an amount sufficient to increase absorption . . . across [the] oral mucosa."  In the District Court's construction, the effervescent agent was required to be activated by contact with saliva, which raised the question of whether the potassium bicarbonate and mannitol components of Watson's accused infringing generic drug reacted to have this effect.  (Cephalon's Fentora® product contained fentanyl citrate, mannitol, sodium starch glycolate, magenesium stearate, citric acid, sodium bicarbonate, and sodium carbonate, wherein the sodium bicarbonate and citric acid are an effervescent couple that react to evolve carbon dioxide, whereas Watson's generic version contained fentanyl citrate and mannitol, sodium starch glycolate, potassium bicarbonate, and magnesium stearate.)  The District Court did not credit Cephalon's expert's testimony that mannitol was the acidic component of an effervescent agent, despite testimony that the higher the mannitol concentration levels the more acidic a water solution containing it, in part because Cephalon provided no evidence of the effect of mannitol on saliva.  Rather, the Court determined that Watson's expert was more persuasive when he testified that "the important piece of information that is missing [in this case] is what the potential or alleged acidity of mannitol in either artificial saliva or, even more important, in the human mouth . . . and there is no evidence that mannitol would be acidic under those conditions."

Regarding invalidity, the District Court construed the term "effervescent agent" to require that "at least one compound that evolves gas by means of an effervescent reaction" (emphasis in original opinion) and further determined that the claim language required the "effervescent agent" to be a single compound.  Watson argued that the "effervescent agent" is disclosed in the Cephalon patents as comprising a "couple" (the acidic compound and the carbon dioxide-releasing compound) and thus that the term should require "a combination of two or more compounds that evolve gas."  Under the District Court's construction, the soluble acid source must be in a separate dosage form from the effervescent agent itself and that these separate dosage forms be co-administered.  Using this construction, the District Court found that the patents-in-suit were not enabling, being devoid of any disclosure relating to co-administration of two separate dosage forms and thus requiring undue experimentation.

The Federal Circuit reversed in part and affirmed in part, in an opinion by Judge Wallach joined by Judges Bryson and Reyna.  The opinion affirmed the finding of no infringement on the grounds that there was no clear error by the District Court in deciding in Watson's favor on this issue.  With regard to invalidity, the panel noted that the District Court erred by reasoning that Watson had raised a prima facie case of non-enablement against Cephalon's claims, which Cephalon did not rebut at trial.  The panel, citing Morton Int'l, Inc. v. Cardinal Chem. Co., 5 F.3d 1464, 1469–70 (Fed. Cir. 1993), invoked the statutory presumption of validity in asserting that this was error, and that the challenger (Watson) bore the burden of proving invalidity by clear and convincing evidence.  Turning to this question, the panel considered the District Court's reliance on Watson's proffered expert testimony that amounted (according to the Federal Circuit) to mere "ipse dixit" opinion that did not rise to the level of clear and convincing evidence.  And the District Court's interpretation of Cephalon's expert's testimony regarding whether experimentation per se would be required to satisfy the enablement portion of the statute in view of the District Court's claim construction was also improper, according to the opinion, because the mere fact of experimentation is not the standard; the question is whether whatever experimentation that may be required is undue.  Here, the Federal Circuit considered Watson's showing that the extent of experimentation that might be required was undue to be insufficient to arise to the level of clear and convincing evidence.  Specifically, the panel stated that "[u]nsubstantiated statements indicating that experimentation would be 'difficult' and 'complicated are not sufficient" to establish undue experimentation.  Thus, Watson had failed to establish non-enablement as a matter of law and the panel reversed.

Cephalon, Inc. v. Watson Pharmaceuticals, Inc. (Fed. Cir. 2013)
Panel: Circuit Judges Reyna, Bryson, and Wallach
Opinion by Circuit Judge Wallach


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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