Friday, 27 July 2012

"Presumption of Validity" - Whether it Changes or Not (Sciele Vs Lupin)

The recently decided CAFC case, Sciele Pharma Inc. v. Lupin Ltd, has a rather very “interesting” fact pattern and throws new light on the discussion on “presumption of validity” under US patent laws. [Section 35 U.S.C. 282 discusses the concept of “presumption of validity”.  Link: Here]

Background: Lupin wanted to introduce a generic version of a drug for which Sciele held a patent (6,866,866) and filed for an ANDA with the FDA. In response to Lupin’s application for marketing the generic, Sciele decides to sue them for patent infringement. Sciele files a lawsuit and is able to delay the FDA’s decision on the generic for 30 months. However, the 30 month period expires during the litigation and Lupin goes ahead with the introduction of the generic in the market only to receive a preliminary injunction from the District Court. Lupin appeals the decision of the district court and the case comes to CAFC. 

The “interesting” fact pattern of US 6,866,866:

1.       Sciele receives office action from the examiner stating that certain claims are not allowable. The file wrapper is not available so I am not able to cite the exact claim numbers.
2.      In response to the office action, Sciele cancels the claims marked as “not allowable” and rewrites other claims in “allowable” form as independent claims.
3.      A notice of allowance is mailed. However, the notice of allowance includes the new claims and the cancelled claims.
4.      Sciele notifies the USPTO and the USPTO issues a supplemental notice of allowance for only the new claims.
5.      However, when the patent is issued, the patent still includes the new claims and the cancelled claims.

If the above sequence of actions did not raise questions in your mind, then what followed certainly will. Sciele files a patent litigation suit against Lupin asserting the cancelled (and invalid?) claims.  In defense, Lupin argues on the patentability of claims by citing references that were already used by the examiner during prosecution for destroying the novelty of the cancelled claims.

While Lupin argues that “presumption of validity” should not apply as the cancelled claims were issued accidently, Sciele argues that a “stronger” presumption should be applied as the patents presented by Lupin have already been considered by the examiner. 

So what does CAFC decide? 

CAFC says that both parties assertion is WRONG. Confused? The explanation that CAFC gave was that a patent is presumed valid (which can be rebutted) and the burden of proof is always the same – clear and convincing evidence irrespective of the fact that the references have already been considered by the examiner. (See: Microsoft vs. i4i). 

Outcome: The CAFC has vacated the preliminary injunction and sent the case back to district court for further processing.

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