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Astrazeneca Lp and Astrazeneca Ab v. Astrazeneca Lp and Astrazeneca Ab

April 1, 2013

ASTRAZENECA LP AND ASTRAZENECA AB, PLAINTIFFS,
v.
ASTRAZENECA LP AND ASTRAZENECA AB, DEFENDANT.
APOTEX, INC. AND APOTEX CORP., PLAINTIFFS,
v.
ASTRAZENECA LP AND ASTRAZENECA AB, DEFENDANTS.
BREATH LIMITED, PLAINTIFFS,
v.
SANDOZ INC., DEFENDANT. ASTRAZENECA LP AND ASTRAZENECA AB, PLAINTIFFS,
v.
WATSON LABORATORIES, INC., DEFENDANT.



The opinion of the court was delivered by: Bumb, United States District Judge:

[Dkt. Ent. 458]

OPINION

TABLE OF CONTENTS

I. INTRODUCTION.............................................. 6

II. BACKGROUND................................................ 9

A. The Drug Approval Process....................... 9

B. AstraZeneca's Budesonide Drug and Patents...... 11

C. The Defendants' Generic Drugs and FDA Approval....................................... 13

1. Breath/Watson's ANDA...................... 13

2. Apotex's ANDA............................. 14

3. Sandoz's ANDA............................. 14

III. LEGAL ANALYSIS........................................... 15

A. The '603 Patent................................ 15

1. Infringement.............................. 16

a. Defendants' Product Labels........... 16

i. Breath/Watson's Labels.......... 17

ii. Apotex's Label.................. 18

iii. Sandoz's Label.................. 19

b. Infringement by Sandoz &

Breath/Watson's 1.0 mg Labels........ 20

c. Infringement by Apotex &

Breath/Watson's 0.25 & 0.5 mg Labels............................... 21

2. Invalidity................................ 33

a. Obviousness.......................... 35

i. Scope and Content of the

Prior Art....................... 38

1. Once-Daily Studies......... 40 3

2. Delivery Devices........... 41

3. Expert Testimony........... 43

4. Brattsand & Selroos: The

Inherent Properties of Budesonide................. 43

5. McCarthy: The

Effectiveness of Once-Daily Budesonide by DPI and MDI.................... 48

6. Jackson: The

Comparability of Nebulized Budesonide and Budesonide by MDI.......... 52

7. AstraZeneca's Rebuttal..... 56

ii. Differences between Prior Art & Claimed Invention............. 60

iii. Motivation to Try Once-Daily Nebulized Budesonide............ 61

1. Compliance & Convenience... 63

2. "Stepwise" Approach to

Asthma Therapy............. 66

iv. Reasonable Expectation of

Success......................... 68

v. Secondary Considerations.......... 69

vi. Conclusion of Law................ 74

vii. Dependent Claims................ 76

b. Anticipation......................... 82

i. Barnes Article.................. 83

ii. Boutin & Boulet................. 91

iii. The '528 Patent and Foreign

Labels.......................... 95

c. Enablement........................... 96

d. Dependent Claims..................... 96

B. The '834 Patent............................... 96

1. Claim Construction of "Micronized Powder Composition"...................... 103

a. The Patent.......................... 107

b. Prosecution History................... 117

c. Extrinsic Evidence.................... 120

d. Conclusion............................ 122

2. Non-Infringement........................... 125

a. Defendants' Sterilization

Processes........................... 126

b. Literal Infringement................ 127

c. Doctrine of Equivalents.............. 130

i. All Elements Rule.............. 134

ii. Prosecution History Estoppel... 141

IV. CONCLUSION............................................... 143

I.INTRODUCTION

Plaintiffs AstraZeneca LP and AstraZeneca AB ("AstraZeneca") bring this consolidated action for patent infringement against the defendants, Breath Limited, Watson Laboratories, Inc. (collectively, "Breath/Watson"*fn1 ), Apotex Corp., Apotex, Inc. (collectively, "Apotex"), and Sandoz, Inc. (all the defendants are collectively referred to as "Defendants"). This case involves AstraZeneca's PULMICORT RESPULES® product, a once-daily nebulized budesonide suspension used to treat asthma in children. AstraZeneca seeks to enjoin Defendants from manufacturing and selling generic versions of this drug, claiming that their products will induce infringement of two of AstraZeneca's patents, U.S. Patent No. 6,598,603 (the "'603 Patent") and U.S. Patent No. 7,524,834 (the "'834 Patent"). Defendants filed counterclaims for declaratory judgment that the patents are invalid and that Defendants do not infringe them.

Previously, in 2009, AstraZeneca moved for a preliminary injunction to prevent Apotex from launching its generic budesonide product. See AstraZeneca v. Apotex, Civ. No. 09-1518. At the time, only Apotex had received approval from the U.S. Food and Drug Administration ("FDA") to market its product. After a hearing, the Court granted AstraZeneca's motion and preliminarily enjoined Apotex.*fn2 The United States Court of Appeals for the Federal Circuit affirmed. AstraZeneca LP v. Apotex, Inc., 623 F. Supp. 2d 579 (D.N.J. 2009), aff'd, 633 F.3d 1042 (Fed. Cir. 2010). AstraZeneca brought related actions against the other defendants,*fn3 and the Court consolidated them, with the parties' consent, into the instant action. [Dkt. Ents. 74, 89.] After lengthy discovery and a five-day Markman hearing, the parties filed motions for summary judgment. Shortly thereafter, Breath/Watson received FDA approval to launch its generic product, and AstraZeneca moved for a preliminary injunction to enjoin Breath/Watson from putting its product on the market.*fn4 [Dkt. Ent. 458.]

In the interest of judicial efficiency and expediency, the Court consolidated the preliminary injunction hearing with the trial on the merits pursuant to Federal Rule of Civil Procedure 65(a)(2) and dismissed all pending motions for summary judgment without prejudice. [Dkt. Ent. 469.] The Court conducted a 19-day bench trial from November 7, 2012, through December 18, 2012. It then permitted the parties to file post-trial briefing and heard closing arguments on March 6, 2013.*fn5

After considering all the evidence, and for the reasons set forth below, the Court finds that: (1) Defendants will induce infringement of the '603 Patent; but (2) that Patent is invalid as obvious and anticipated by the prior art; and (3) Defendants will not infringe the '834 Patent. Accordingly, the Court enters judgment against AstraZeneca and in favor of Defendants. This Opinion constitutes the Court's findings of fact and conclusions of law pursuant to Rule 52(a).*fn6

II. BACKGROUND*fn7

A. The Drug Approval Process

The FDA must approve all new drugs before they may be distributed in interstate commerce. 21 U.S.C. § 355(a). To secure approval for a new drug, an applicant may file a New Drug Application ("NDA") that includes examples of the proposed label for the drug and clinical data demonstrating that it is safe and effective. Id. at § 355(b)(1)(A, F). "The FDA publishes the names of approved drugs and their associated patent information in the Approved Drug Products with Therapeutic Equivalence Evaluations list, commonly referred to as the 'Orange Book.'" AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1045 (Fed. Cir. 2010).

An applicant seeking approval to market a generic version of a drug that has already been approved may file either an Abbreviated New Drug Application ("ANDA") or a "505(b)(2) application," known as a "paper NDA." Id. (citing 21 U.S.C. § 355(b)(2), (j)). "An ANDA allows an applicant to rely on the safety and efficacy information for the listed drug if the applicant can show that the generic drug is 'bioequivalent' to the listed drug." Id.

Generally, an ANDA applicant must demonstrate that "the route of administration, the dosage form, and the strength of the new drug are the same as those of the listed drug." 21 U.S.C. § 355(j)(2)(A)(iii). The applicant must also show that "the labeling proposed for the new drug is the same as the labeling approved for the listed drug." Id. at § 355(j)(2)(A)(v). "[F]or each patent listed in the Orange Book that claims either the listed drug or a use of the listed drug for which the applicant is requesting approval, an ANDA must include either one of four certifications or a 'section viii statement.'" AstraZeneca LP, 633 F.3d at 1046.

If an applicant submits a certification, the applicant must certify "(I) that . . . patent information has not been filed, (II) that such patent has expired, (III) . . . the date on which such patent will expire, or (IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug." 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV). The last of these is known as a "paragraph IV certification".

If an applicant seeks approval for an ANDA for a method of use not claimed in a "method of use" patent associated with the listed drug, the applicant must submit a "section viii statement" stating that the patent does not claim such a use. 21 U.S.C. § 355(j)(2)(A). Additionally, the applicant must "remove or 'carve out' any mention of the patented method of use from the proposed label for the generic drug." AstraZeneca, 633 F.3d at 1045 (citing 21 C.F.R. § 314.92(a)(1)).

B. AstraZeneca's Budesonide Drug and Patents

On August 8, 2000, AstraZeneca received FDA approval for its NDA for a budesonide inhalation suspension, which AstraZeneca now markets under the name, PULMICORT RESPULES®. Its sole active ingredient is budesonide, an anti-inflammatory corticosteroid. It is approved for maintenance treatment of asthma and as prophylactic therapy in children 12 months to 8 years of age. Stipulated Facts ¶¶ 50-54, 56 [Dkt. Ent. 700-1].

PULMICORT RESPULES® is available in dosages of 0.25 mg to

1.0 mg/2 mL.*fn8 The label recommends both once daily and twice daily starting doses, determined by the severity of the asthma and prior medication history of the patient. The label also instructs doses to be titrated down to the lowest effective dose once a patient's asthma stabilizes.

The '603 Patent covers the once-daily use of PULMICORT RESPULES®. AstraZeneca asserts that before the '603 Patent, there were no once-daily nebulized medications for controlling asthma in young children and infants.*fn9 Trial Transcript ("Tr.") 140:23-141:25 (Dr. Bertil Andersson, an inventor of the '603 Patent). Although nebulized budesonide had been available outside the United States for use twice daily, there were no clinical studies showing that it would be effective once daily. Defendants dispute AstraZeneca's claims relating to the '603 Patent on grounds of non-infringement and invalidity.

AstraZeneca further contends that it would not have been permitted to launch PULMICORT RESPULES® in the United States without its '834 Patent, which covers the sterilization of all aqueous-based inhalation solution and suspension products. Specifically, AstraZeneca contends that prior to its '834 invention, no one had ever sterilized budesonide or any aqueous inhalation suspension. AZFF ¶ 3. Defendants dispute this claim as well, and argue that this Patent is invalid. Further, each defendant argues non-infringement on the grounds that their sterilization processes are different from the process required by the '834 Patent.

C. The Defendants' Generic Drugs and FDA Approval

1. Breath/Watson's ANDA

On July 7, 2006, Breath filed ANDA No. 78-404 with the FDA seeking regulatory approval to market budesonide inhalation suspension in 0.25 mg/2 mL and 0.5 mg/2 mL dosages. On December 2, 2009, Breath transferred its rights to Breath/Watson. Breath/Watson's ANDA No. 78-404 identifies the listed drug product that is the basis for the submission as PULMICORT RESPULES®. Breath's ANDA included a paragraph IV certification asserting that the '603 and '834 Patents are invalid, unenforceable, or will not be infringed by the manufacture or sale of Breath's generic budesonide inhalation suspension. On July 31, 2012, FDA approved Breath/Watson's ANDA No. 78-404.

On February 2, 2011, Breath/Watson submitted ANDA No. 202558 to the FDA seeking regulatory approval to market its budesonide inhalation suspension in the 1.0 mg/2 mL dosage strength. This ANDA also included a paragraph IV certification. It is currently pending.

2. Apotex's ANDA

On March 31, 2006, Apotex submitted ANDA No. 78-202 to the FDA for approval to market a generic version of PULMICORT RESPULES® in 0.25 mg/2 mL and 0.5 mg/2 mL dosages. Apotex identifies PULIMICORT RESPULES® as the reference listed drug. Apotex's ANDA included a Section viii certification, asserting that the '603 Patent does not claim any indication for which Apotex is seeking approval. On March 30, 2009, the FDA approved Apotex's ANDA.

3. Sandoz's ANDA

On May 28, 2010, Sandoz submitted ANDA No. 20-1966 to the FDA for approval to market its generic version of PULMICORT RESPULES®, 1.0 mg/2 mL. On September 21, 2010, Sandoz submitted a major amendment to its ANDA, which added a request for approval of the 0.25 mg/2 mL and 0.5 mg/2 mL strengths. Sandoz's ANDA included a paragraph IV certification asserting that the '603 and '834 Patents are invalid, unenforceable, or will not be infringed by the manufacture or sale of the Sandoz product. This ANDA is currently pending.

III. LEGAL ANALYSIS

The Court begins by addressing the '603 Patent. It first determines that Defendants will infringe the asserted claims of this Patent, but also concludes that these claims are invalid as obvious and anticipated by the prior art. The Court then considers the '834 Patent and ultimately determines that Defendants will not infringe the asserted claims of this Patent.

A. The '603 Patent

The '603 Patent is directed to the once-daily use of nebulized budesonide.*fn10 '603 Patent col. 1, ll. 20-23. AstraZeneca asserts that Defendants will infringe claims 1-3, 7, 8, 12-17 and 24-28.*fn11 Claim 1, the only independent claim, recites:

A method of treating a patient suffering from a respiratory disease, the method comprising administering to the patient a nebulized dose of a budesonide composition in a continuing regimen at a frequency of not more than once per day.

The remaining method claims are all dependent on Claim 1, meaning that they include all of the limitations of Claim 1 as well as additional limitations.*fn12

1.Infringement

a.Defendants' Product Labels

AstraZeneca contends that Defendants' labels for their generic products will induce infringement because they instruct once-daily administration.*fn13 The Court considers each label in turn.

i.Breath/Watson's Labels

Breath/Watson seeks to market its generic product in three dosage strengths, the 0.25 mg, 0.5 mg, and 1 mg strength. Its approved label for the 0.25 mg/2 mL and 0.5 mg/2 mL dosage strengths provides in relevant part:

DOSAGE AND ADMINISTRATION Previous Recommended Highest Therapy Starting Dose Recommended

Dose

Bronchodilators 0.5 mg total daily 0.5 mg total alone dose administered daily dose twice daily in divided doses Inhaled 0.5 mg total daily 1 mg total Corticosteroids dose administered daily dose twice daily in divided doses Oral 1 mg total daily 1 mg daily Corticosteroids dose administered as dose

0.5 mg twice daily

The label also contains a "titration down" statement:

In all patents, it is desirable to downward titrate to the lowest effective dose once asthma stability is achieved.

Ex. DTX 370.

Breath/Watson's proposed label for the 1.0 mg/2 mL strength provides in relevant part:

DOSAGE AND ADMINISTRATION

Previous Recommended Starting Highest Therapy Dose Recommended Dose Bronchodilators 0.5 mg total daily 0.5 mg total alone dose administered daily dose either once daily or twice daily in divided doses Inhaled 0.5 mg total daily 1 mg total daily Corticosteroids dose administered dose either once daily or twice daily in divided doses Oral 1 mg total daily As l mg total Corticosteroids dose administered daily dose either 0.5 mg twice daily or 1 mg once daily The label also contains a "titration down" statement:

In all patents, it is desirable to downward titrate to the lowest effective dose once asthma stability is achieved.

Ex. PTX 151.

ii.Apotex's Label

Apotex's approved dosage label for the 0.25 mg/2 mL and 0.5 mg/2 mL strengths provides in relevant part:

DOSAGE AND ADMINISTRATION

Previous Recommended Starting Highest Therapy Dose Recommended

Dose

Bronchodilators 0.5 mg total daily dose 0.5 mg total alone administered twice daily dose daily in divided doses Inhaled 0.5 mg total daily dose 1 mg total Corticosteroids administered twice daily dose daily in divided doses Oral 1 mg total daily dose 1 mg total Corticosteroids administered as 0.5 mg daily dose twice daily

The label also contains a "titration down" statement:

In all patients, it is desirable to downward-titrate to the lowest effective dose once asthma stability is achieved.

Ex. PTX 171.

iii.Sandoz's Label

Sandoz's proposed label for the 0.25 mg/2 mL, 0.5 mg/2 mL and 1 mg/2 mL provides in relevant part:

DOSAGE AND ADMINISTRATION Previous Recommended Starting Highest Therapy Dose Recommended

Dose

Bronchodilators 0.5 mg total daily 0.5 mg alone dose administered total daily either once daily or dose twice daily in divided doses Inhaled 0.5 mg total daily 1 mg total Corticosteroids dose administered daily dose either once daily or twice daily in divided doses Oral 1 mg total daily dose 1 mg total Corticosteroids administered either daily dose as 0.5 mg twice daily or 1 mg once daily

The label contains the following language:

If once-daily treatment does not provide adequate control, the total daily dose should be increased and/or administered as a divided dose. In all patients, it is desirable to downward-titrate to the lowest effective dose once asthma stability is achieved.

EX. PTX 110.

b.Infringement by Sandoz & Breath/Watson's

1.0 mg Labels

AstraZeneca contends, first, that Sandoz and Breath/Watson's 1.0 mg labels explicitly instruct once-daily administration for each of the three previous therapy categories of patients. Indeed, neither Sandoz nor Breath/Watson seriously disputes infringement as to these labels. Sandoz's former Director of Regulatory Affairs, Dr. William Kwok, admitted that its label includes explicit instructions for once-daily administration.*fn14 Although Breath/Watson weakly responds that the FDA has not approved labeling for its 1.0 mg product, its proposed labeling explicitly induces once-daily use. Tr. 1142 (Chipps). These labels clearly infringe the only disputed claim limitation (once-daily use). Accordingly, the Court finds ...


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