On Feb 6, 2018, Federal Circuit affirmed a district court’s finding that Hospira doesn’t infringe two blood thinner patents belonging to The Medicines Co., but remanded the question of whether The Medicines Co.’s distribution agreement with another company would render the patents invalid under the so-called on-sale bar.
The Medicines Company owns U.S. Patent Nos. 7,582,727 and 7,598,343. The patents cover an improved process for manufacturing a drug product of bivalirudin, a synthetic peptide used as an anti-coagulant. The Medicines Company’s original manufacturing process occasionally produced batches of Angiomax with unacceptably high levels of the impurity Asp9-bivalirudin. To solve this problem, The Medicines Company developed a new mixing method, which it incorporated in the master batch record on October 25, 2006. The Medicines Company’s contract manufacturer, Ben Venue Laboratories, used this patented mixing method for all Angiomax batches manufactured since October 31, 2006. By using this process, Ben Venue consistently manufactures Angiomax batches with a maximum Asp9-bivalirudin impurity level of 0.6%.
On Feb 27, 2007, The Medicines Company entered into a “Distribution Agreement” with Integrated Commercialization Solutions, Inc. (ICS). That agreement stated that The Medicines Company “now desire[d] to sell the Product” to ICS and ICS “desire[d] to purchase and distribute the Product.” Accordingly, title passed to ICS “upon receipt of Product at the distribution center.” The Distribution Agreement included a “Commercial Price List” dictating the price of the product, and required ICS to place weekly orders “for such quantities of Product as are necessary to maintain an appropriate level of inventory based on customers’ historical purchase volumes.” ICS first received batches of Angiomax produced by the improved process in August 2007.
Seeking to market a generic version of Angiomax, Hospira submitted an Abbreviated New Drug Application (ANDA) to the Food and Drug Administration. In Hospira’s mixing process, the pH-adjusting solution is added to the bivalirudin solution in three equivalent portions. The first two portions are “added rapidly with about 2-minute mixing time,” and the third portion is “added gradually over a period of approximately 10 minutes.” The Medicines Company filed suit in the District of Delaware alleging infringement of the ’727 and ’343 patents under 35 U.S.C. § 271(e)(2). In response, Hospira asserted that the patents are invalid. After a bench trial, the district court concluded that the patents were neither infringed nor invalid. The district court found that the invention was ready for patenting but was not sold or offered for sale before the critical date of July 27, 2008. Both parties appealed. This case is on remand from Medicines Co. v. Hospira, Inc. (Medicines I), 827 F.3d 1363 (Fed. Cir. 2016) (en banc).
Federal circuit analyzed claims of the ’727 and ’343 patents & determined that both patents require “efficient mixing” as defined by Example 5 of the specification. Therefore, Hospira clearly does not infringe the patented method because it does not perform “efficient mixing.” Hospira adds the pH-adjusting solution in three portions, rather than at a controlled rate. Hospira also uses a single paddle mixer at 560 rpm, but the claimed method requires using a paddle mixer in conjunction with a homogenizer. Because Hospira’s mixing process does not satisfy the “efficient mixing” limitation, federal circuit affirmed the district court’s finding of non-infringement.
With respect to invalidity a patent is invalid under the on-sale bar if, before the critical date, 1) the product is the subject of a commercial offer for sale, and 2) the invention is ready for patenting. Federal circuit said that under the standards established by Medicines I, the terms of the Distribution Agreement make clear that the Medicines Company and ICS entered into an agreement to sell and purchase the product. Those relevant terms include: a statement that The Medicines Company “now desire[d] to sell the Product” to ICS and ICS “desire[d] to purchase and distribute the Product,” the price of the product, the purchase schedule, and the passage of title from The Medicines Company to ICS. Here, the terms of the Distribution Agreement clearly demonstrate the “commercial character” of the transaction. Therefore, the Distribution Agreement was a commercial offer for sale. Of course, the question remains whether the Distribution Agreement covered the patented product. For the on sale bar to apply, the invention, as defined by the patent’s claims, must be on sale. Because the district court incorrectly concluded that the Distribution Agreement was not a commercial offer for sale, it did not reach the question of whether the Distribution Agreement covered the Angiomax created by the new, patented process. Therefore federal circuit left this question for the district court to consider on remand.
With respect to second prong, the district court found that the invention was ready for patenting before the critical date because the master batch record “disclose[d] how to use the process according to the invention.” Federal circuit agreed & held that Ben Venue used the master batch record to produce batches of Angiomax using the patented process. Furthermore, Ben Venue reduced the invention to practice by following the master batch record. Thus the district court correctly determined that the invention was ready for patenting before the critical date.
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