Federal Circuit Affirms District Court’s Extension of 30-Month FDA Stay

Eli Lilly v. Teva Pharmaceuticals (Fed. Cir. 2009)

Teva is hoping to make a generic version of Lilly’s Evista brand raloxifene tablets that are used to help prevent postmenopausal osteoporosis. In May 2006, Teva filed an abbreviated new drug agreement (ANDA) and Lilly subsequently sued for patent infringement and to block the generic release. Under the law, after the patentee files suit, the FDA cannot then approve the generic for thirty months “unless the court has extended or reduced the period because of a failure of either [party] to cooperate reasonably in expediting the action.” This is commonly known as the “thirty month stay.”

In this case, the court originally set a trial date four months after the end of the thirty month period. In the months leading up to trial Teva altered its proposed generic formulation, which changed Lilly’s litigation strategy. As a result, the district court ordered that the FDA thirty month stay be extended for four extra months – until May 2009. Teva filed an emergency appeal to lift the stay.

On appeal, a split Federal Circuit panel affirmed – finding that the district court acted within its discretion in extending the stay based on Teva’s activity. “Trial courts, thus, may shorten or extend the thirty-month statutory period based on the parties’ uncooperative discovery practices before the court.” In its decision, the court distinguished the 2002 Andrx v. Bioval case. In Andrx, the Federal Circuit found that the district court had abused its discretion in shortening a thirty-month stay based on a party’s “positions before the FDA.” Rather, changes to the thirty-month period must be based on failure to cooperate court.

In dissent, Judge Prost argued that the majority misinterpreted the statute to grant too much deference to the district court in extending the stay. Rather, the statute requires that the stay should only be extended when a party fails “to cooperate reasonably in expediting the action.” Here, Judge Prost argues, the lower court did not find that Teva failed to cooperate, but only that Lilly could use more time to respond. The statute is limited in a way that does not allow extension of the stay in that situation.

Notes:

  • Judge Rader wrote the majority opinion and was joined by Chief Judge Michel.
  • On the expedited schedule, Appellant filed its principle brief November 24, 2008; briefing was complete on December 30, 2008; Oral arguments were heard on January 14, 2009; and a decision rendered on February 24, 2009.

Federal Circuit Announces Proposed Amendments to Its Internal Operating Procedures

The Federal Circuit has proposed several amendments to its Internal Operating Procedures (IOP).  Comments on the proposed changes are due by July 18, 2008. Most of the proposed changes reflect current practice. [Proposed changes]

Notable changes include:

  • Motion practice: When a motion relates to an appeal that has already been remanded, the motion may be referred to the same panel for consideration.
  • Expedited Appeal: The ‘motion panel’ may choose to hear an appeal as the ‘merits panel’ upon granting a motion to expedite.
  • Confidential Material: Materials submitted subject to a protective order will be disposed of upon completion of the case.
  • Making orders Public: The old rules distinguished how precedential and non-precedential materials were publicized. Under the new rule, “all dispositions” are to be published in the daily disposition sheet.

CAFC Reverses After Lower Court Denies Patentee the Opportunity to Present a New Infringement Argument on Remand

CertificateofcorrectionCentral Admixture Pharmacy Services v. Advanced Cardiac Solutions (Fed. Cir. 2008) (Non-precedential)

Most non-precedential opinions affirm the lower court. In fact, this decision is the first non-precedential reversal of 2008 (according to a Lexis search). In the prior decision, the CAFC voided a certificate of correction that had attempted to change a claim limitation from osmolarity to osmolality.

The final line of the original opinion reads as follows: “On remand, CAPS [the patentee] may pursue its allegations of infringement of the uncorrected ‘osmolarity’ version of the ’515 patent claims.” However, after the remand the district court refused to allow CAPS to prove infringement based on the uncorrected version of the patent.  Its reasoning was that CAPS had previously stated that it would not pursue that theory of infringement.

On appeal the second time, the CAFC reversed and remanded — holding that its prior order was “clear: on remand, the district court was to decide the merits of CAPS’s infringement claim under the pre-[Certificate of Correction] claims.  The district court was not at liberty to ‘determine’ the issue on procedural grounds, as it did.”

Reversed and remanded for consideration of the patentee’s infringement arguments.

Notes:

  • This panel included Judges Schall, Clevenger, and Gajarsa. 
  • The original panel included Judges Schall, Gajarsa, and Prost. Opinion by Gajarsa [LINK]
  • The patent at issue (No. 4,988,515) covers a solution of glucose and amino acids used to nourish heart tissue during open heart surgery when blood flow is stopped.
  • This decision appears quite limited. The patentee is able to present its new infringement argument because the original CAFC opinion specifically ordered the court to allow the new argument. This decision does not require a reversed lower court to allow a party to present arguments that had previously been dropped.

PTO Implements Final BPAI Appeal Rules

PatentLawPic362The PTO has announced implementation of “final rules” that govern the procedure of ex parte appeals before the PTO’s Board of Patent Appeals and Interferences (BPAI).  A year ago, I commented on the rise of of “technical rejections” of appeal filings. Most of these involved issues such as failing to list non-appealed claims; failing to include an appendix page (even if you have no appendix); and the use of a section headings that varied (in form but not substance) from the required heading. In my 2007 sample of 720 appeals, I found that a full 25% had been rejected as ‘defective’ based on these formalities. [Link]

With this large number of defective briefs in mind, the BPAI developed the new rules:

A major objective of the amended rules is to avoid unnecessary returns to examiners by the Appeals Center and the Board, along with the resulting delays in application and appeal pendency. The requirements of the amended rules are believed to be more objective and, therefore, both appellants and examiners will have a better understanding of what is required, thereby minimizing, if not eliminating, a need to hold appeal briefs defective.

In reality, the new rules appear to significantly increase the number of formalities.  This increase in formalities will likely increase the time required to prepare an appeal. The new rules apply to all appeals in which an appeal brief is filed on or after December 10, 2008.

Some changes:

  1. The most substantive change may be the requirement that non-appealable errors must be resolved by petition prior to filing an appeal to the BPAI. “Failure to timely file a petition seeking review of a decision of the examiner related to a non-appealable issue would generally constitute a waiver to have those issues considered.”
  2. Instead of filing a summary of the invention, the applicant must file “a claims analysis.” This analysis is essentially a claim chart indicating “the page and line or paragraph after each limitation where the limitation is described in the specification as filed.”
  3. 30 page limit for the Grounds of Rejection, Statement of Facts, and Arguments. (14 point font).
  4. A complete appeal brief will include each of the following (in the correct order):
    • Statement of the real party in interest,
    • statement of related cases,
    • jurisdictional statement,
    • table of contents,
    • table of authorities,
    • [reserved],
    • status of amendments,
    • grounds of rejection to be reviewed,
    • statement of facts,
    • argument, and
    • an appendix containing (a) claims section, (b) claim support and drawing analysis section, (c) means or step plus function analysis section, (d) evidence section, and (e) related cases section.
  5. new grounds of rejection are no longer permitted in an examiner’s answer,
    the examiner’s response to a reply brief is eliminated,
  6. petitions to exceed the page limit for an appeal brief, reply brief or request for rehearing are made under Rule 41.3 which requires a $400 fee,
  7. petitions for an extension of time to file a reply brief, request for oral hearing, or request for rehearing are made under Rule 41.3 which requires a $400 fee, and
  8. a list of technical terms or unusual words to be provided to the transcriber at the oral hearing.

Appeal Rules PDF