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13 December 20217 minute read

The Pharmaceutical Corner

Tension between FDA submissions and patent prosecution disclosures can result in a finding of inequitable conduct

When applying for a patent, patent applicants and their attorneys have a duty to disclose to the US Patent and Trademark Office information that is material to the patentability of the claimed invention. 37 C.F.R. § 1.56. This duty applies to “each individual associated with the filing and prosecution” of the patent application, and it exists as long as the patent application is pending. Id. Failing to abide by this obligation can render a patent unenforceable due to inequitable conduct.

Because inequitable conduct is an equitable defense to a charge of patent infringement, a finding of inequitable conduct can be disastrous for the patentee.  The Federal Circuit describes it as the “atomic bomb” of patent law: it renders all the claims of the affected patent unenforceable; it cannot be cured through reissue; and it can be imputed to all related patents and applications in the same patent family. Therasense, Inc. v. Becton, Dickenson & Co., 649 F.3d 1276, 1288-89 (Fed. Cir. 2011).

The judicially created doctrine of inequitable conduct evolved from a series of Supreme Court cases in which patent applicants engaged in egregious misconduct: 

  • In Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933), the patentee paid off a prior user to sign a false affidavit and suppress evidence of the invalidating prior use.
  • In Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976), the patentee’s attorneys wrote an article falsely describing the extraordinary improvement achieved by the claimed invention, paid an expert to sign the article and publish it under his own name, and then submitted the article to the examiner, who allowed the claims to issue.
  • And in Precision Instruments Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806 (1945), the patentee suppressed evidence of perjury before the USPTO while trying to enforce the tainted patent.

Since these early cases, inequitable conduct has matured into a formal doctrine. As these early cases “all involved deliberately planned and carefully executed schemes to defraud not only the PTO but also the courts,” a finding of inequitable conduct requires both materiality and proof of an intent to deceive. Therasense, 649 F.3d 1287 (internal citation omitted). More specifically, to make a successful claim of inequitable conduct, the accused infringer must show with clear and convincing evidence that the patentee acted knowingly, deliberately, and with specific intent to deceive the USPTO. Id. at 1290.

Inequitable conduct can result from intentionally submitting false material facts during prosecution. For example, in Apotex Inc. v. UCB, Inc., 763 F.3d 1354 (Fed. Cir. 2014), the patent at issue claimed a process for making moexipril tablets. The named inventor (who was also the company CEO and in charge of patent prosecution and litigation) knew that the prior art magnesium-stabilized formulation was made using the claimed process, but he concealed this information during prosecution and misrepresented the prior art during the litigation. Apotex argued that the inventor/CEO was “merely advocating a particular interpretation of the prior art.” The Federal Circuit, however, bluntly rejected this argument, pointing out that his statements “were factual in nature and contrary to the true information he had in his possession . . . . We agree with the district court that deceptive intent is the single most reasonable inference that can be drawn from the evidence.” Id. at 1362.

Inequitable conduct can also result from intentionally withholding material references during prosecution. A reference is material if it satisfies the “but for” test – which asks whether the patent would have issued if the patent examiner had known of the withheld information. In Regeneron Pharmaceuticals, Inc. v. Merus N.V., 864 F.3d 1343 (Fed. Cir. 2017), the Federal Circuit affirmed a finding of inequitable conduct based, in part, on four references that were intentionally not disclosed in prosecution.

Competing disclosures to FDA and USPTO

Demonstrating inequitable conduct requires an exacting level of proof for both intent and materiality, but pharmaceutical patents may be uniquely vulnerable because of the regulatory submissions required for FDA approval.

If disclosures made to the FDA as part of a New Drug Approval (NDA) application or Biologics License Application (BLA) are inconsistent with disclosures made during prosecution, this may create a concern. This very scenario played out in Belcher Pharmaceuticals, LLC v. Hospira, Inc., 11 F.4th 1345 (Fed. Cir. 2021) – the Federal Circuit affirmed the lower court’s finding of inequitable conduct because the patent applicant had withheld material information to the USPTO.

In 2012, Belcher submitted an NDA for an injectable formulation of L-epinephrine. Although the hormone epinephrine has been sold since the 1930s, liquid formulations of epinephrine were known to undergo racemization and oxidation, resulting in the conversion of L-epinephrine to the much less potent D-epinephrine.

Belcher’s NDA described old formulations of L-epinephrine developed in Switzerland by Sintetica in the 1930s. A Sintetica formulation manufactured for the US market was utilized as the reference drug product for Belcher’s NDA. This formulation was manufactured using an in-process pH of 2.8 to 3.3. While Belcher originally proposed using an in-process pH of 2.4 to 2.6 to manufacture its product, during the back and forth with the FDA, Belcher agreed to revert back to the pH range of 2.8 to 3.3 to hasten regulatory approval.

Two years after Belcher filed its NDA, Belcher’s CEO filed a patent application that later issued as US Patent No. 9,283,197 (the ’197 patent). The ’197 patent addressed the problem of racemization and oxidation in existing formulations of L-epinephrine and claimed a formulation with a pH range of 2.8 to 3.3. The specification described how the idea of raising the in-process pH above 2.2-2.6 was contradicted in the prior art, and that the inventor found that the increase in pH to 2.8-3.3 unexpectedly reduced racemization. During prosecution, the inventor/applicant emphasized the criticality of the 2.8-3.3 pH range.  The ’197 patent issued and was listed in the Orange Book.

Hospira subsequently filed an ANDA for L-epinephrine with a Paragraph IV certification for the ’197 patent and Belcher filed suit.  During the trial, Belcher’s chief scientific officer (CSO) testified that he was responsible for overseeing regulatory submissions, product development, and intellectual property matters.  He helped draft the application that resulted in the ’197 patent as it was involved in prosecution.  He testified that before the filing of the patent application, he was aware that Sintetica’s “old” formulation had a pH range of 2.8-3.3, that prior art publications described the racemization of L-epinephrine as a “well-known process,” and that a third company, JHP, had already introduced an epinephrine product with a pH in the 2.8-3.3 range.       

The district court found the ’197 patent to be unenforceable for inequitable conduct, ruling that the withheld information (Sintetica’s old formulation, JHP’s formulation, and the prior art publication) were all material to patentability. The court found the requisite intent because Belcher’s CSO, “a key player in the FDA approval process as well as the ’197 patent’s prosecution,” personally knew of the significant omissions in the disclosures made to the USPTO. 

Belcher appealed. The Federal Circuit rejected Belcher’s argument that the CSO lacked deceptive intent because he “genuinely believed” the withheld information to be irrelevant. Instead, the Federal Circuit concluded that the district court’s intent finding was supported by the evidence and affirmed the original finding that the ’197 patent was unenforceable for inequitable conduct.

Final thoughts

Pharmaceutical companies should rigorously review disclosures made to the FDA and USPTO to ensure that statements are consistent and disclosures are coextensive where appropriate.

This is especially critical for pharmaceutical patent applications that need to address prior art and overcome obviousness rejections during prosecution where this prior art may also be included in a regulatory submission.

A key fact in Belcher was that a single employee, the CSO, played a significant role in both preparation of the NDA and prosecution of the ’197 patent. Such overlap was also at the heart of Apotex, in which a single individual was the inventor, the CEO, and the person responsible for patent prosecution and litigation. That is, where possible, pharmaceutical companies should diversify these functions to ensure that the responsibilities for patent prosecution and for regulatory submissions are carried out by different individuals.