Shire Wins Vyvanse Case, but Supplier Escapes Liability

Shire LLC v. Amneal Pharma, et al. (Fed. Cir. 2015)

This ANDA patent litigation arose after the defendants filed Abbreviated New Drug Applications (ANDAs) with the FDA requesting permission to make and sell a generic version of Shire’s “safe” amphetamine Vyvanse. According to the unreputable urban dictionary: “Unlike other amphetamine pills like Adderall that have distinct ups and downs, and relatively quick effects, Vyvanse is like a big slow moving amphetamine truck that hits you all day long.”

Under 35 U.S.C. 271(e)(2), the filing of an ANDA with the FDA is a form of patent infringement so long as the original NDA owner has listed covering patents in the FDA’s Orange Book. Shire sued the ANDA filers for infringement under this provision.

The money-ruling: The Federal Circuit affirmed the lower court’s finding that – as a matter of law – the claimed inventions of the asserted patents are not obvious and that the lower court did not abuse its discretion by denying a late-filed on-sale-bar defense. The result is that patents will remain in force until their expiration in 2023 – protecting Shire’s billion dollar market.

Supplier Liability: As part of each case, Shire also sued Johnson Matthey who was partnering with each of the ANDA filers and supplying the drug to those entities. As part of its work, Matthey had (1) filed a drug master file with the FDA (but did not itself file an ANDA) and (2) supplied each of the ANDA filers with product covered by one of the patents. In the appeal, the Federal Circuit ruled that these acts do not constitute infringement – either direct or by inducement.

First, the appellate court found that Matthey’s supply of the infringing product qualified under the research exemption of Section 271(e)(1) –

Johnson Matthey is correct that it cannot be liable for the [active ingredients – API] it sold the ANDA defendants up to this point. Johnson Matthey, as an API supplier, has thus far done nothing more than provide material for use by the ANDA defendants in obtaining FDA approval. As the district court found, these sales, and the ANDA defendants’ use of the API for filing the ANDA, were “reasonably related to the submission of an ANDA.” As such, Johnson Matthey’s activities are protected by the safe harbor of § 271(e)(1), and the district court erred by entering judgment that Johnson Matthey has induced infringement of the compound claims at issue.

Second, the appellate court found that Matthey “cannot be liable for infringement under § 271(e)(2)” because it did not submit an ANDA.

The court here seems to skirt its prior holding in Forest Laboratories, Inc. v. Ivax Pharmaceuticals, Inc., 501 F.3d 1263 (Fed. Cir. 2007). In that case, the Federal Circuit found that a supplier could be held enjoined to prevent it from inducing infringement: “Section 271(e)(2) may support an action for induced infringement. . . . Under the standards for inducement which we apply to 35 U.S.C. § 271(b), [the supplier] has therefore actively induced the acts of [the ANDA filer] that will constitute direct infringement upon approval of the ANDA, and it was thus not inappropriate for the district court to include [the supplier] within the scope of the injunction.”

In Forest, the court explained though that – at the point of an ANDA lawsuit – that the supplier was not infringing (for the two reasons discussed above), but that it would be infringing/inducing if the ANDA was approved. As such, the Forest court found that it was appropriate to preemptively enjoin the suppler from taking that action that would constitute infringement. Coming back to the Shire case, the appellate panel distinguished Shire – finding that “Forest involved the scope of an injunction under § 271(e)(4). No such injunction has been issued against Johnson Matthew here and thus Forest is inapposite. Johnson Matthey is therefore not currently liable for infringement.”

25 thoughts on “Shire Wins Vyvanse Case, but Supplier Escapes Liability

  1. 4

    Does this decision support the argument that chemical synthesis companies can now start manufacturing API in the US for supply to a generic company without fear of infringement of the API patent? (So long as generic files an ANDA?)

    To this end, how can we rationalize the decision when JM’s activities – who didn’t file the ANDA, but presumably got paid for supplying API to Amneal – are now considered to fall within the research exemption? Did this court just expand the research exemption to include commercial activities so long as the end result is that the infringing product is being used for an ANDA filing?

  2. 3

    “This ANDA patent litigation arose after the defendants filed Abbreviated New Drug Applications (ANDAs) with the FDA requesting permission to make and sell a generic version of Shire’s “safe” amphetamine Vyvanse. According to the unreputable urban dictionary: “Unlike other amphetamine pills like Adderall that have distinct ups and downs, and relatively quick effects, Vyvanse is like a big slow moving amphetamine truck that hits you all day long.”

    Is this really a necessary statement? Many people who struggle with ADHD benefit immensely from amphetamines. A colleague of mine would probably be unemployed but for Vyvanse. Your opinion about the safety of the drug has nothing to do with the merits of this case.

    Just compromises the integrity of this blog in my opinion to include throw-away statements like that in a legitimate analysis of a patent case.

    1. 3.1

      ” Many people who struggle with ADHD benefit immensely from amphetamines.”

      I don’t think anyone disputes that.

      But describing *any* clinically approved amphetamine as “safe” (in quotes) seems perfectly reasonable to me (given the addictive potential of the drugs and their side-effects; see, e.g., link to drugs.com) but doubly so concerning these particular amphetamines, especially when incautiously prescribed to children who are incapable of meaningfully consenting to the risks (known and unknown).

      1. 3.1.2

        Couldn’t agree more. But this isn’t an antipsychiatry blog. It’s a patent blog. And it’s also a legal blog. So if the FDA approves a drug, it is “safe.”

        I was also medicated for ADHD as a child. I was on Ritalin and Concerta. Made my symptoms worse.

        I am on Wellbutrin XL off label now and it works a lot better.

        We can debate the merits of the drugs all day. But should it be on this blog? And should it be initiated by a snide comment citing urban dictionary.

        1. 3.1.2.1

          I was a child who did not consent to the risks and paid the price( would rather not get into how) And yet, I come out against the demonization of these drugs. Why?

          Because the medical community didn’t know better at the time. Children seemed to benefit immensely from the drugs. And the evidence at the time showed that the costs were outweighed by the benefits.

          So they continued innovating. They came out with nonstimulant medications like strattera and NDRI drugs like Wellbutrin.

          I can sit here and complain all day about not consenting to being medicated but at the end of the day, I am a patent attorney and not a high school dropout.

          Most ‘critics’ of psychatric medication contribute nothing to the debate or to science.They just whine and suggest ‘woo’ like meditating and taking supplements. Or they just tell you to become a libertarian or join Scientology.

          There are a few doctors (like your daughter Ned) who are actually trying to find safer alternatives using actual science.

          The whole point of this giant rant is that we patent attorneys are supposed to be better than this.

          We should not criticize good faith efforts to help struggling children through medication.

          I have a lot of personal feelings about this issue. There may be a parent (who is a patent attorney) reading this blog that is struggling with the moral dilemma of putting their ADHD
          child on Vyvanse

          They go about their day trying to read about an FDA case on their favorite patent blog and then BAM.

          Bottom line. Watch what you say. There are billions of people in this world and this is a highly trafficked website. I took the comment rather personally. Perhaps I shouldn’t have but I did. Words are actions. Actions have consequences. Watch what you say–you don’t know how it will affect others.

          1. 3.1.2.1.1

            I don’t think there’s any way Dennis could’ve thought that comment was anything but innocent. I read the comment and had no idea anyone would take umbrage with it. Who knew that someone would get upset at that?

            On the other hand, the comment is superfluous and doesn’t need to be there.

            1. 3.1.2.1.1.1

              Right.

              1) comment MAY offend somebody
              2) If something is relevant to a topic and not completely offensive, relevance should outweigh potential offensiveness
              3) comment not relevant to topic.
              4) Comment should be deleted because it is potentially offensive AND irrelevant.

              1. 3.1.2.1.1.1.1

                1) anything “may” offend somebody.

                2) law, and more to the point, the discussion of law will be – and at times should be – rough. The PatentHawk had a quote by John Maynard Keynes: Words ought to be a little wild, for they are the assault of thought on the unthinking.

                Your point 4) eliminates nearly ALL of Malcolm’s posts.

                Hmmmm, maybe you have something there, my Eggshell Skull friend….

                ;-)

                1. I agree with all of that.

                  I care more about the relevance aspect.

                  That does happen here a lot and it is not one person.

                  1) Post is about topic A.

                  2) Commenter raises provocative debate point about topic B

                  3) Childish debate about topic B ensues.

                  4) people other than the “usual suspects” don’t comment. These people are the sane ones (a group which may not include myself quite frankly).

                2. Also this isn’t a free speech issue. It is a user friendliness issue.

                  The comments are already a wasteland. It can’t bleed over to the articles too.

                  There really aren’t any better patent blogs out there, so I frequent this one in spite of these annoyances.

            2. 3.1.2.1.1.2

              Also Dennis. I know you didn’t mean this. I love this blog. I have been witnessing a decline in quality of content lately though. Figured this was a time to point it out.

              There was also a guest poster who made an argument that was clearly nothing other than self promotion. He got blasted in the comments.

                1. topce,

                  Since you appear to be genuine, let me give you a genuine response to your several posts here:

                  First, “relevance” is in the mind of the beholder, and the relevance of the 101 issue is – or at least colorably may be – at the very heart of all things patent.

                  That said, yes, it does appear that nearly every single thread is h1jacked.

                  I have pointed this out previously, as well as noted exactly who does the vast, vast, vast amount of h1jacking (yes, it is the sAmeones who spew their ad infinitum ad nauseam propaganda without the courtesy of being inte11ectually honest and tacking the valid counterpoints put on the table of discussion into consideration.

                  The “childish debate about topic B ensues” precisely because the inte11ectually honest logical conclusion of those counterpoints is something to be avoided at all costs by those who desire a certain narrative – and only that certain narrative – to be heard.

                  This is repeated on a perpetual Merry Go Round basis.

                  It has been a solid two weeks since the latest “experiment” here failed miserably (last post on the new “forum”) for the “debates” – exactly as I predicted.

                  It is approaching nearly, what, FOUR years since I personally suggested to Prof. Crouch what needs to be done – and what was confirmed in the thread that Prof Crouch himself likes to refer to (the ecosystem thread). The problem – as clearly shown on the ecosystem thread – is that a blight here is not only merely allowed to continue unabated, but that the blight has the appearance of being sanctioned because that blight ALSO reflects a certain desired narrative (at times).

                  Being “friendly” is simply not going to be possible when so much is on the line with the relentless propaganda being used to shape the narrative. Point blank: you will not (and cannot) have an “honor system: when certain people refuse to have honor in their postings.

                  As to your “traffic is dropping” link – interesting, but I am afraid that such may not tell the story you want it to tell. That August 2014 highpoint may very well have been an aberration, and the more “steady state” history may in fact be an accurate assessment.

                  All in all, your comment of “ The comments are already a wasteland. It can’t bleed over to the articles too.” is just too little, and too late.

                  The better question is: how do you enforce inte11ectual honesty and stop the propaganda?

                  I would suggest that any person who evades a counter point and merely posts the same argument on any new thread have that post wiped out.

                  If you want to stop the one-way drive-by actions and invite actual dialogue, you have to stop the monologues.

  3. 1

    DC : the lower court did not abuse its discretion by denying a late-filed on-sale-bar defense. The result is that patents will remain in force until their expiration in 2023 – protecting Shire’s billion dollar market.

    I haven’t read the decision yet (thank you for the fresh reporting!) but I’m curious about the merits of the 0n-sale bar defense. Assuming there is an on-sale bar problem, this issue could be raised in a timely manner by another party prior to 2023 … right?

    1. 1.1

      seemingly so – perhaps even a public interest group or a State AG. And, if it turns out that the patent is invalid as on sale then there could potentially be a consumer class-action against Shire.

      1. 1.1.3

        “And, if it turns out that the patent is invalid as on sale then there could potentially be a consumer class-action against Shire.”

        Why? Having a patent declared invalid doesn’t have retroactive effect, does it?

        1. 1.1.3.1

          Ken,

          From the Supreme Court’s 1965 Walker Process case: “The question before us is whether the maintenance and enforcement of a patent obtained by fraud on the Patent Office may be the basis of an action under § 2 of the Sherman Act, and therefore subject to a treble damage claim by an injured party under § 4 of the Clayton Act.

          The Court answered in the affirmative. Here, they mean knowing and willful fraud, a much higher standard than inequitable conduct. This is quite rare, but in the past sometimes defendants accused patentees in hopes of a windfall. Now, I think Rule 11 and exceptional cases are being taken more seriously.

    2. 1.2

      MM, anyone not issue or claim precluded may file their own ANDA and assert the on-sale bar. The defendants in this action cannot.

Comments are closed.