Indiana Intellectual Property Law News

July 30, 2014

Indiana Trade Secret Law: Removing Allegation of Theft of Trade Secrets Results in Defendants’ Release from “Lockdown”

Indianapolis, Indiana – In 2013, a federal indictment including counts of theft of trade secrets belonging to Eli Lilly and Company (“Lilly”) was presented to the Southern District of Indiana. On the basis of this indictment, the court ordered Defendants Guoqing Cao and Shuyu Li, formerly employed by Eli Lilly and Company, to be detained at housing provided by Volunteers of America – Indiana (“VOA”), pending their criminal trial. When the 2013 indictment was superseded by a second indictment that did not include counts for the theft of trade secrets, the court granted Defendants’ request to be released to home detention.

On August 14, 2013, Defendants Cao and Li, two doctoral-level scientists formerly employed by Lilly, were charged with multiple counts of theft. At issue was intellectual property belonging to Lilly valued at $55 million. Counts one through three of the indictment, as well as counts five through ten, were listed as theft of trade secrets and aiding and abetting. Count four alleged conspiracy to commit theft of trade secrets.

In the initial proceedings, the United States maintained that the Defendants were traitors who had conveyed “American trade secrets” – specifically, “crown jewels” in the form of many millions worth of intellectual property belonging to Lilly – to Jiangsu Hengrui Medicine Co., Ltd., a company located in Shanghai, China. These arguments strongly impacted the court’s decision to order “lockdown” detention at the VOA.

A second indictment was later filed by the United States. Under the new indictment, the Defendants faced no charges of trade-secret theft. Instead, they were charged with one count each of wire fraud, aiding and abetting, and conspiracy to commit wire fraud. Based on the absence of allegations relating to trade-secret theft in the subsequent indictment, the Defendants asked the court to modify the terms of their detention.

The court was persuaded that such a change was warranted. It noted that there was “a difference between allegations of ‘theft of trade secrets’ and disclosure of ‘Lilly Property.'” It further stated that the earlier allegation – that Lilly’s “crown jewel” secrets had been stolen and provided to China – had been a critical factor in justifying the Defendants’ incarceration.

When the allegations of trade secret misappropriation were removed, the court found that those justifications were no longer applicable: “No longer are the Defendants accused of stealing ‘trade secrets’–those words are found nowhere in the superseding indictment” and released the Defendants from lockdown to the less-restrictive conditions of home detention.

Practice Tip #1: Nine Lilly trade secrets pertaining to pharmaceuticals under development for cardiovascular disease, diabetes and cancer were at issue in this Indiana criminal prosecution for theft of intellectual property.

Practice Tip #2: Defendants’ home detention restricts individuals to their residence at all times except for employment; education; religious services; medical, substance abuse, or mental health treatment; attorney visits; court appearances; court-ordered obligations; or other activities approved in advance by the pretrial services office or supervising officer. Defendants were also ordered not to access or use any internet-enabled device with the exception of utilizing email to communicate with counsel.

July 28, 2014

Copyright Office Requests Comments on Music Licensing

By Overhauser Law Offices, LLC

Washington, D.C. – The U.S. Copyright Office has undertaken a study to evaluate the effectiveness of current methods for licensing musical works and sound recordings. It seeks additional comments on whether and how existing music licensing methods serve the music marketplace, including new and emerging digital distribution platforms.

An initial round of written comments and roundtable sessions were held, during which a number of significant issues were discussed. The Copyright Office believes these issues merit additional consideration.

First, the two federal district courts overseeing the antitrust consent decrees governing the largest performance rights organizations (”PROs”), American Society of Composers, Authors and Publishers (”ASCAP”) and Broadcast Music, Inc. (”BMI”), held in separate opinions that under those decrees, music publishers could not withdraw selected rights – such as ”new media” rights – to be directly licensed outside of the PROs; rather, a particular publisher’s song catalog must either be ”all in” or ”all out.” Following these rulings, both in public statements and at the recent roundtables, certain major music publishers have indicated that, if the consent decrees remain in place without modification, they intend to withdraw their entire catalogs from the two PROs and directly license public performances. Such a move would affect not only online services, but more traditional areas of public performance such as radio, television, restaurants, and bars.

July 25, 2014

Indiana Passes New Statute Criminalizing Offenses Against Intellectual Property

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Indiana Code § 35-43-1-7 has been made effective as of July 1, 2014.

This new criminal statute, enacted by P.L.158-2013, SEC. 458, covers certain computer-related offenses against intellectual property. It takes the place of 35‐43‐1‐4, which was repealed.

Indiana Code § 35-43-1-7 reads, in full:

July 24, 2014

Lilly Successful in Defending Alimta Method-of-Use Patent

By Overhauser Law Offices, LLC

Indianapolis, Indiana – In conjunction with co-counsel, an Indiana patent attorney for Eli Lilly of Indianapolis, Indiana prevailed in the Southern District of Indiana on claims of patent infringement. At issue was Lilly’s patent on the use of Alimta® in conjunction with specific vitamins. District Judge Tanya Walton Pratt concluded that Defendants Teva Parenteral Medicines, Inc. of Irvine, California; APP Pharmaceuticals, LLC of Schaumburg, Illinois; Pliva Hrvatska D.O.O. of Zagreb, Croatia; Teva Pharmaceuticals USA Inc. of North Wales, Pennsylvania; and Barr Laboratories, Inc. of Montvale, New Jersey failed to prove invalidity of U.S. Patent No. 7,772,209 (the “‘209 Patent”) and entered judgment in favor of Lilly.

Lilly sells the drug Alimta (“pemetrexed”), a chemotherapy drug, to treat various types of lung cancer, including mesothelioma. However, certain side effects were troublesome, including treatment-related hematologic and gastrointestinal toxicity. Deaths among some patients were attributed to treatment with pemetrexed. In response to this concern, Lilly took the unusual step of mandating supplementation of the pemetrexed protocol with two vitamins – folic acid and vitamin B₁₂. The patentability of that idea was the focus of a patent challenge – this litigation – by five manufacturers of generic drugs.

Lilly’s ‘209 Patent describes a method of using an antifolate, pemetrexed, with vitamins. Antifolates are a type of chemotherapy drug used to treat certain types of cancer. They work by competing with folates, a class of essential nutrients that includes folic acid. By interfering with the action of folates, antifolates thereby deprive cancer cells of the DNA precursors they need to proliferate.

The generic challengers contended in part that the patent on the combined therapy is invalid, arguing that someone knowledgeable about both nutrition and medicine could have easily concluded that supplementation with B₁₂ and folate might alleviate certain side effects of pemetrexed.

Lilly, in contrast, argued that the vitamin regimen was not only counterintuitive when it was proposed, it was called “crazy” by a leading cancer doctor before testing showed its benefits.

Lilly prevailed. The court found that Defendants failed to show by clear and convincing evidence that the asserted claims of the ‘209 Patent were invalid for obviousness, obviousness-type double patenting, inadequate description or lack of enablement. Thus, the ‘209 Patent is valid and enforceable.

The ‘209 Patent is presumed to be valid under 35 U.S.C. § 282. Defendants, as the parties challenging the validity of the ‘209 Patent, bore the burden of proving invalidity by clear and convincing evidence.

Defendants’ first contention was that the ‘209 Patent was obvious. To prove obviousness, they would have to show by clear and convincing evidence that the differences between the claims and the prior art at the time the invention were such that, considered as a whole, the claims would have been obvious to a person of ordinary skill in the art (“POSA”) in that subject matter.

Obviousness is a legal conclusion based on underlying factual findings. Such findings include: 1) the scope and content of the prior art; (2) the differences between the claims and the prior art; (2) the level of ordinary skill in the art; and (4) objective considerations of non-obviousness such as commercial success and satisfaction of a long-felt need. Moreover, it is insufficient that prior art merely includes separate references to the subject matter of a subsequent patent claim. Instead, obviousness requires the additional showing that a POSA would have combined those elements of the prior art. Thus, Defendants in this case bore the burden of proving that a POSA would have had reason to (1) administer folic acid pretreatment with pemetrexed, (2) administer vitamin B₁₂ pretreatment with pemetrexed, and (3) administer each of them according to the doses and schedules indicated in the ‘209 Patent.

The court first found that folic pretreatment with pemetrexed was not obvious. Among its findings were that the prior studies on mice would not have led a POSA to consider such supplementation. There would have been considerable difficulty in comparing studies on the combined treatment in mice with effects likely to be observed in humans, given the differences between humans and mice. One substantial difference was that mice have much higher requirements for folic acid. As an additional confounding factor, the studies on mice given low-folate diets were only possible because the mice were also given an antibiotic to prevent bacteria in the intestines of the mice from making folic acid that would otherwise raise a mouse’s level of folic acid.

These and other differences would have represented substantial obstacles in making the leap from the prior state of understanding of vitamin supplementation with antifolates to the claims of the ‘209 Patent. The court thus held that a POSA reviewing the prior art, instead of concluding that the supplementation was useful, would have likely concluded that supplementation decreased the efficacy of the drug. Consequently, those prior studies would have resulted in a “teaching away” from the claimed invention by discouraging a POSA from pursuing vitamin supplementation in conjunction with pemetrexed.

The court concluded that, likewise, vitamin B₁₂ pretreatment with pemetrexed was not obvious and that, as of June 1999, a POSA would have expected that vitamin B₁₂ would counteract the efficacy of antifolates. Instead, the court held that the benefit of using B₁₂ in conjunction with pemetrexed was not discovered until late 1999, when a mathematician for Lilly ran an extensive statistical analysis of data from patients in the worldwide, phase-III pemetrexed trial.

The court next held that the doses and schedules within the claims asserted by Lilly were not obvious. The vitamin dosing regimens attempted in the prior art, which contained folic acid only, reduced the efficacy of pemetrexed as compared to unsupplemented trials. However, the regimen in the ‘209 Patent actually improved the efficacy of the drug over unsupplemented clinical trials. While normally a change in temperature, concentration or both would be an unpatentable modification, patentability may be found if the results of such a change are “unexpectedly good.” The court held that the changes resulting from the methods described in the ‘209 Patent fell within this exception to the general rule.

The scheduling of the pretreatment with the vitamin supplementation was also deemed non-obvious by Judge Walton Pratt, as prior studies had shown that administration of folic acid one week prior to the administration of lometrexol (another chemotherapy agent) reduced the efficacy of the drug and was a cause of concern for oncologists. Based upon the results of that study, a POSA would have not have anticipated a likelihood of success with pretreatment with vitamins.

In its evaluation of non-obviousness, the court last considered secondary indicia of non-obviousness of the asserted claims of the ‘209 Patent. These indicia include the commercial success of the invention at issue and its satisfaction of a long-felt need; skepticism or disbelief before the invention; failure of others and evidence of unexpected properties. It found these indicia supported a conclusion of non-obviousness.

Finally, the court held that the claims at issue were not invalid for obviousness-type double patenting, concluding that the claims asserted in the ‘209 Patent were patentably distinct from Lilly’s U.S. Patent No. 5,217,974 (the “‘974 Patent”). The court included in its reasoning that the ‘974 Patent discloses, inter alia, the use of a much greater amount of folic acid, does not reference pemetrexed and includes nothing about pretreating with vitamin B₁₂.

Consequently, the court found that the asserted claims of the ‘209 Patent were valid and enforceable, and entered judgment in favor of Lilly and against Defendants.

Practice Tip #1:

Patent-infringement litigation between brand-name manufacturers and generic-drug makers is common. In a typical lawsuit, a company that wishes to sell a generic version of a brand-name drug, usually a widely used drug, will try to invalidate the patent on the drug, in the hopes that it could then offer the same drug in generic form.

This litigation was different from traditional patent litigation. The original patent on Alimta, administered as a stand-alone treatment, protects only Alimta’s active ingredient. That patent will expire in 2017. However, the focus of the current litigation was on the combination treatment – a “method-of-use patent” – that involves both Alimta and the vitamin regimen.

Practice Tip #2:

Because the ‘209 Patent was upheld, the period of exclusivity for Alimta, in conjunction with the vitamin supplementation, now expires in 2022. In 2013, Lilly earned revenues of $2.7 billion from global sales of Alimta. Thus, the extra five years of patent protection may result in additional revenues in excess of $10 billion for Lilly.

July 23, 2014

Indiana Trademark Law: Trademark Infringement and Counterfeiting Defendants Held Liable for Both Damages and Plaintiff’s Attorney’s Fees

By Overhauser Law Offices, LLC

South Bend, Indiana – Chief Judge Philip P. Simon of the Northern District of Indiana ordered Defendants The Treasure Box, Inc. and Heather Hiatt, both of Elkhart, Indiana to pay statutory damages, attorney’s fees and costs to Coach, Inc. of New York, New York and Coach Services, Inc. of Jacksonville, Florida for trademark infringement and counterfeiting.

By way of summary judgment, the court had earlier determined in this Indiana trademark and counterfeit litigation that Defendants The Treasure Box and Hiatt were liable for the trademark infringement and trademark counterfeiting of Plaintiff Coach’s trademarks. The court’s summary judgment determinations also included a finding that “The Treasure Box and Heather Hiatt acted with knowledge and intent” that was sufficient to support enhanced statutory damages. In this opinion and order, the court fixed the amount due to Coach from Defendants.

Instead of requesting actual damages resulting from Defendants’ trademark infringement and counterfeiting within Indiana, Coach opted for statutory damages under §1117(c). It asked the court for damages of $100,000 for each of the 15 infringing marks, for a total of $1,500,000. The Treasure Box and Hiatt, unrepresented by counsel at the time, filed no response or opposition to Coach’s damages request.

The court first addressed the proper measure of damages. Statutory damages for trademark infringement and trademark counterfeiting under 15 U.S.C. §1114 are limited to:

(1) not less than $1,000 or more than $200,000 per counterfeit mark per type of goods…, as the court considers just; or
(2) if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of good…, as the court considers just.

Because the statute provides little guidance regarding what constitutes a “just” award, the court referred to the relevant factors under the analogous statutory damages provision in the Copyright Act, 17 U.S.C. §504(c). These considerations include: the profits reaped by the infringer; the revenues lost by the plaintiff; the value of the trademarks; whether the infringing conduct was willful; the duration of the infringement; and the potential deterrent effect on the defendant and others.

The court considered each factor in turn. It found that, because The Treasure Box’s operations were both brief and “even trivial” in scale, neither Defendants’ profits nor Coach’s lost revenue supported a large statutory damages award. Instead, the court cited Nimmer on Copyright for the proposition that statutory damages “should be woven out of the same bolt of cloth as actual damages.” “Statutory damages,” said the court, “should represent some approximation of actual damages and are not to represent a windfall to a prevailing plaintiff.”

In contrast, the factors of “value of the trademarks” and “willful conduct” weighed against Defendants. The court acknowledged that the Coach trademarks were valuable and noted that, in determining statutory damages, other courts had valued the trademarks at between $2,000 per mark and $30,000 per mark, for an average of approximately $14,000 per mark. Moreover, it characterized Hiatt’s infringement as having been pursued with “bold willfulness” with regard to her efforts to sell what she knew was knock-off Coach merchandise.

The last two considerations – duration of infringement and potential deterrent effect on Defendant and others – weighed against a large award of damages. The Treasure Box had operated for only three months, closing in late 2011. Such a brief term of infringement, as well as the court’s conclusion that Hiatt and the defunct The Treasure Box were now apparently beyond deterrence, militated in favor of lower damages. Regarding deterrence for others, the court stated, “Mom & Pop operators such as the Hiatts could doubtless be deterred from similar conduct by much less frightful sums than the $1.5 million Coach requests.”

The court concluded that an award of $3,000 per trademark for each of the 15 counterfeited trademarks at issue, for a statutory damages award of $45,000, was appropriate.

The court was also asked to award to Coach attorney’s fees of $14,780 pursuant to §1117(a)(3). This section permits a court “in exceptional cases” to award reasonable attorney’s fees to the prevailing party. The court first noted the ambiguity inherent in the placement of §1117(a)(3) within the statute. Specifically, subsection (a) addresses recovery for actual damages, while subsection (c) allows a plaintiff to opt for statutory damages. Here, Coach chose an award of statutory damages under subsection (c), which raised the question of whether the provision for attorney’s fees under §1117(a)(3) could be applied.

The only Court of Appeals to have addressed the question was the Second Circuit. That court concluded that subsection (c) offers an election as to the basis for damages, but not an election regarding remedies, including attorney’s fees. Thus, it concluded, a court could award attorney’s fees in conjunction with an award for either actual or statutory damages. Chief Judge Simon adopted the Second Circuit’s reasoning. He also determined that the definition of an “exceptional” case – for example, one in which “the losing party was the defendant and had no defense yet persisted in trademark infringement” – was also met, given the willfulness of Defendants’ knowing sale of counterfeit Coach goods and that Defendants had no viable defense.

In addition to the statutory damages award of $45,000, the court awarded attorney’s fees of $14,780 as well as expenses and costs of $1,076.16 to Coach. The judgments were entered against Treasure Box, Inc. and Heather Hiatt jointly and severally.

Practice Tip: Chief Judge Simon noted that Coach had a history of requesting statutory damages that were considerably in excess of what was eventually awarded by the courts in other cases. In Coach, Inc. v. Paula’s Store Sportwear LLC, 2014 WL 347893 (D.N.J. Jan. 31, 2014), Coach requested $800,000 in statutory damages – $100,000 for each of eight counterfeited marks – at a shop from which four counterfeit Coach wallets and two counterfeit Coach handbags had been seized. In that litigation for counterfeiting, the court noted that the retail value of the six counterfeit items was less than $1500 and awarded $5000 for each of the eight marks that had been counterfeited, multiplied by the two types of goods, for a total statutory damages award of $80,000.

July 21, 2014

IUPUI Research Commercialization and Outreach on the Rise

By Overhauser Law Offices, LLC

Indianapolis, Indiana – The Indiana University-Purdue University Indianapolis Innovation-to-Enterprise Initiative, which supports faculty and students as they turn research and product development into profitable commercial ventures, is resulting in a sharp increase in inventions, patents and start-up business concepts.

The initiative was created to enable the campus community to reach its full potential in research commercialization and economic development, and to provide opportunities for students to learn about discovery, innovation and enterprise creation, while developing entrepreneurial and business skills.

In 2013, IUPUI collaborated with almost 200 companies and organizations in developing over 500 student internships and community-engagement research and service projects supported by just under $1 million in direct and in-kind support from IUPUI and its community partners. A recent collaboration contributed to improving the quality of life and healthy habits on the Near Eastside of Indianapolis through the realization of 17 projects that addressed dental care, public health, urban produce gardens, fitness care and career development.

July 18, 2014

Indiana Patent and Trademark Litigation: American Archery Accused of Patent and Trademark Infringement

By Overhauser Law Offices, LLC

Evansville, Indiana – Indiana intellectual property attorneys for SOP Services, Inc. of Las Vegas, Nevada and Bear Archery, Inc. of Evansville, Indiana (collectively “Bear Archery”) initiated an infringement lawsuit in the Southern District of Indiana alleging that American Archery, LLC of Suwanee, Georgia infringed “Arrow Rest,” Patent No. RE38,096; “Arrow Rest System and Method,” Patent No. 6,978,775; WHISKER BISCUIT ARROW REST, Trademark Registration No. 2,501,255; and WHISKER BISCUIT, Trademark Registration No. 3,312,392, which have been issued by the U.S. Patent and Trademark Office.

Bear Archery is in the business of researching, developing, designing, manufacturing, and selling archery products. Its business includes traditional archery bows, compound bows, bow sights, arrow rests, arrows and arrow components, archery targets, and various other archery accessories. American Archery is in the business of selling hunting products and accessories, including archery products.

At issue in this Indiana intellectual property dispute are arrow rests for mounting to archery bows. The lawsuit asserts claims of patent infringement, trademark infringement, as well as false and deceptive labeling and unfair competition.

American Archery is accused of selling counterfeit arrow rests, both through its website and through online auction sites. Specifically, Bear Archery asserts that the “ready to shoot” packages offered by American Archery advertise that they include a genuine Bear Archery Whisker Biscuit® arrow rest as part of the preassembled bow. However, Plaintiffs state, the bow that a consumer receives instead includes a pre-installed counterfeit arrow rest.

There are two patents at issue in this litigation: “Arrow Rest,” Patent No. RE38,096 (the “‘096 patent”) and “Arrow Rest System and Method,” Patent No. 6,978,775 (the “‘775 patent”). The ‘096 patent and the ‘775 patent (collectively “the patents-in-suit”) are owned by SOP Services. Bear Archery has been granted an exclusive license to the patents-in-suit. Plaintiffs accuse American Archery of having willfully, intentionally and deliberately infringed the patents-in-suit by offering the allegedly counterfeit items.

In addition to patent infringement assertions, this Indiana litigation also includes allegations of trademark infringement. Bear Archery contends that it owns trademark rights for the Whisker Biscuit mark, indicating that it has used the mark with its arrow rest products since at least 1999. It claims that consumers have come to recognize the mark as identifying Bear Archery’s arrow rest products. It further asserts that it owns a trademark on “Whisker Biscuit Arrow Rest” for archery equipment, namely arrow-rest devices. Bear Archery claims that American Archery’s use of the marks is likely to cause confusion, mistake, or deception as to origin, sponsorship or approval and therefore constitute trademark infringement and counterfeiting in violation of Section 32 and 43(a) of the Lanham Act, 15 U.S.C. § 1114 et seq. and the common law.

Bear Archery includes a final claim of “false and deceptive labeling and unfair competition” under Lanham Act 15 U.S.C. §1125 and the common law.

Bear Archery, via its Indiana intellectual property lawyers, asks the court for the following relief:

A. A judgment of infringement of the ‘096 patent and the ‘775 patent;
B. A judgment that the use of the “WHISKER BISCUIT” mark in Defendant’s commercial advertising and sales in the Unites States creates a likelihood of confusion, mistake, or deception among relevant consumers and therefore infringes Plaintiff’s trademarks;
C. A judgment that Defendant has engaged in counterfeiting with respect to Plaintiffs’ trademarks;
D. An order permanently restraining Defendant or any of its agents from further acts of infringement of the patents-in-suit;
E. An order permanently restraining Defendant or any of its agents from engaging in misleading advertising of products or services bearing or resembling the “WHISKER BISCUIT” mark that have caused actual confusion, mistake or deception of the public;
F. An order that all infringing devices or materials in the possession of, or subject to control by, Defendant or its agents be delivered up and destroyed or altered to eliminate any possibility any further infringement;
G. An award of damages not less than a reasonably royalty, adequate to compensate Plaintiffs for Defendant’s acts of infringement under 35 U.S.C. §284;
H. An award to Plaintiffs of treble Defendant’s profits under 15 U.S.C. § 1117(a) and (b);
I. An award to Plaintiffs of statutory damages for counterfeiting up to $2,000,000, pursuant to 15 U.S.C. § 1117(c);
J. An order declaring that this is an exceptional case pursuant to 35 U.S.C. § 285 and 15 U.S.C. 1117 as a result of Defendant’s knowing and willful infringement of the patents-in-suit and the asserted trademarks, and awarding Plaintiffs their attorneys’ fees;
K. An award of Plaintiffs’ costs, and/or expenses; and
L. Aw award of Defendant’s wrongful profits associated with its infringement of Plaintiffs’ patent and/or trademark rights.

Practice Tip: Bear Archery requested that eBay remove various auctions posted by Bear Archery on the grounds that the items for sale were counterfeit. Bear Archery indicates that eBay removed the auctions and notified American Archery that the auctions had been removed because they had been flagged as offering counterfeit goods. Bear Archery requested this under eBay’s Verified Rights Owner (“VeRO”) Program. The VeRO Program provides a mechanism for an owner of intellectual property to request the removal of eBay auctions that offer items that infringe that owner’s intellectual property rights.

July 17, 2014

Indiana Patent Litigation: Lilly Brings Another Defendant into Effient Patent Infringement Litigation

By Overhauser Law Offices, LLC

Indianapolis, Indiana – In conjunction with co-counsel from Washington, D.C., an Indiana patent attorney for Eli Lilly and Company of Indianapolis, Indiana; Daiichi Sankyo Co., Ltd of Tokyo, Japan; Daiichi Sankyo, Inc. of Parsippany, New Jersey; and Ube Industries, Ltd. of Yamaguchi, Japan sued in the Southern District of Indiana alleging that First Time US Generics LLC of Broomall, Pennsylvania infringed Effient® products, Patent Nos. 8,404,703 and 8,569,325 which have been issued by the U.S. Patent Office.

This is a civil action for patent infringement. It arises out of the filing by Defendant First Time US Generics LLC (“FTUG”) of an Abbreviated New Drug Application (“ANDA”) with the United States Food and Drug Administration (“FDA”) seeking approval to manufacture and sell generic versions of two of Lilly’s pharmaceutical products, Effient® 5mg and Effient® 10mg tablets, prior to the expiration of Daiichi Sankyo’s and Ube’s U.S. patents, which purportedly cover methods of using Effient® products. Plaintiffs assert that Lilly holds an exclusive license to these products. DSI currently co-promotes Effient® products in the United States with Lilly.

Effient® products were approved by the FDA for the reduction of thrombotic cardiovascular events in certain patients with acute coronary syndrome (ACS) who are to be managed with percutaneous coronary intervention (PCI, or angioplasty). The instructions accompanying Effient® products state that patients taking Effient® products should also take aspirin. The use of Effient® products in combination with aspirin for the reduction of thrombotic cardiovascular events in patients with ACS who are to be managed with PCI is covered by the claims of the ‘703 and ‘325 patents.

FTUG has submitted an Abbreviated New Drug Application (the “FTUG ANDA”) to the FDA pursuant to 21 U.S.C. § 355(j), seeking approval to market a generic version of Lilly’s product for oral administration (the “FTUG Products”) in the United States.

Plaintiffs assert that FTUG will knowingly include with the FTUG Products instructions for use that substantially copy the instructions for Effient® products, including instructions for administering the FTUG Products with aspirin as claimed in the ‘703 and ‘325 patents. Moreover, Plaintiffs contend that FTUG knows that the instructions that will accompany the FTUG Products will induce and/or contribute to others using the FTUG Products in the manner set forth in the instructions. Plaintiffs also contend that FTUG specifically intends that health care providers, and/or patients will use the FTUG Products in accordance with the instructions provided by FTUG to directly infringe one or more claims of the ‘703 and ‘325 patents. FTUG therefore will actively induce and/or contribute to infringement of the ‘703 and ‘325 patents, state Plaintiffs.

In the complaint, the Indiana patent lawyer for Plaintiffs listed the following counts:

• Count I: Infringement of U.S. Patent No. 8,404,703
• Count II: Declaratory Judgment of Infringement of U.S. Patent No. 8,404,703
• Count III: Infringement of U.S. Patent No. 8,569,325
• Count IV: Declaratory Judgment of Infringement of U.S. Patent No. 8,569,325

Plaintiffs ask the court for judgment:

A. That FTUG has infringed or will infringe, after the FTUG ANDA is approved, one or more claims of the ‘703 patent;
B. That FTUG has infringed or will infringe, after the FTUG ANDA is approved, one or more claims of the ‘325 patent;
C. That, pursuant to 35 U.S.C. § 271(e)(4)(B), FTUG and its agents be permanently enjoined from making, using, selling or offering to sell either or both of the FTUG Products within the United States, or importing either or both of the FTUG Products into the United States prior to the expiration of the ‘703 and ‘325 patents;
D. That, pursuant to 35 U.S.C. § 271(e)(4)(A), the effective date of any approval of the FTUG ANDA under § 505(j) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 355(j)) shall not be earlier than the latest of the expiration dates of the ‘703 and ‘325 patents, including any extensions;
E. If FTUG commercially makes, uses, sells or offers to sell either or both of the FTUG Products within the United States, or imports either or both of the FTUG Products into the United States, prior to the expiration of either of the ‘703 and ‘325 patents, including any extensions, that Plaintiffs will be awarded monetary damages for those infringing acts to the fullest extent allowed by law and be awarded prejudgment interest based on those monetary damages;
F. That this case be deemed exceptional under 35 U.S.C. § 285
G. Declaring that the ‘703 patent remains valid and enforceable;
H. Declaring that the ‘325 patent remains valid and enforceable; and
I. That Plaintiffs be awarded reasonable attorney’s fees, costs and expenses.

Practice Tip:

In March 2014, Lilly et al. filed a 101-page complaint making similar accusations against more than thirty defendants: Accord Healthcare, Inc. USA; Accord Healthcare, Inc.; Intas Pharmaceuticals Ltd.; Amneal Pharmaceuticals LLC; Amneal Pharmaceuticals of New York, LLC; Amneal Pharmaceuticals Co. India Pvt. Ltd.; Aurobindo Pharma Limited; Aurobindo Pharma USA Inc.; Dr. Reddy’s Laboratories, Ltd; Dr. Reddy’s Laboratories, Inc.; Glenmark Generics Inc., USA; Glenmark Generics Ltd.; Glenmark Pharmaceuticals Ltd.; Hetero USA Inc.; Hetero Labs Limited; Hetero Labs Limited Unit V; Hetero Drugs Ltd.; Mylan Pharmaceuticals Inc.; Mylan Inc.; Mylan Laboratories Limited; Par Pharmaceutical Companies, Inc.; Par Pharmaceutical, Inc.; Sun Pharma Global FZE; Caraco Pharmaceutical Laboratories, Ltd.; Sun Pharma Global Inc.; Sun Pharmaceutical Industries, Ltd.; Teva Pharmaceuticals USA, Inc.; Teva Pharmaceutical Industries, Ltd.; Watson Laboratories, Inc.; Actavis plc; Actavis, Inc.; Actavis Pharma, Inc.; Zydus Pharmaceuticals USA, Inc.; and Cadila Healthcare Ltd. d/b/a Zydus Cadila.

FTUG is the latest of addition to Lilly’s list of defendants in the Effient litigation. In contrast to the March complaint against 30-plus mostly unrelated defendants, FTUG, as well as the other subsequent unrelated defendants, have been added via separate complaints alleging patent infringement.

July 16, 2014

Indiana Patent Litigation – Stopinc AG Sues J.W. Hicks Inc. for Patent Infringement

By Overhauser Law Offices, LLC

Hammond, Indiana – An Indiana patent attorney for Stopinc Aktiengesellschaft of Hünenberg, Switzerland sued in the Northern District of Indiana alleging that J. W. Hicks Inc. of Merrillville, Indiana infringed “Slide Gate for a Container Containing Molten Metal,” Patent No. 6,422,435, which has been issued by the U.S. Patent Office.

Plaintiff Stopinc Aktiengesellschaft (“Stopinc AG”) asserts that it is the owner by assignment of Patent No. 6,422,435 (the “‘435 patent”). It charges Defendant J. W. Hicks Inc. with infringing upon the patent by, inter alia, importing into the United States and selling its product, known both as the OMEGA Slidegate Systems and also as the TITAN Slidegate, that infringes at least claims 1, 8, 11 and 12 of the ‘435 patent. Stopinc AG also asserts that J. W. Hicks Inc. has induced and contributed to the infringement of the patent by others. Finally, Stopinc AG contends that Defendant’s acts of infringement and inducement to infringe are willful, knowing and deliberate.

A single count – patent infringement – is listed in Stopinc AG’s complaint, which was filed by an Indiana patent lawyer. The Indiana court is asked for the following relief:

• An injunction prohibiting Defendant and its agents from marketing, importing, offering for sale, selling, advertising or promoting or distributing in the United States any products that infringe the ‘435 patent;
• An Order that all infringing products, as well as all means for producing, advertising or promoting those products, be destroyed;
• An Order that all infringing products already distributed be recalled;
• Damages, including Defendant’s profits, as well as for Plaintiff’s lost sales, attorney’s fees, and interest; and
• That damages be trebled.

Practice Tip: Patent infringement can be demonstrated under two general theories: literal infringement and infringement under the doctrine of equivalents. An assertion of “literal infringement” will require a showing that every element recited in a claim has identical counterpart in the accused device or method. A claim may also be infringed under the “doctrine of equivalents” if some other element of the accused device or method performs substantially the same function, in substantially the same manner, to achieve substantially the same result.

July 14, 2014

Indiana Patent Litigation: HEC Pharm Added to Effient Patent Infringement Litigation

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana patent attorney for Eli Lilly and Company of Indianapolis, Indiana; Daiichi Sankyo Co., Ltd of Tokyo, Japan; Daiichi Sankyo, Inc. of Parsippany, New Jersey; and Ube Industries, Ltd. of Yamaguchi, Japan sued in the Southern District of Indiana alleging that HEC Pharm Co., Ltd. of China and HEC Pharm USA Inc. of Princeton, New Jersey (collectively, “HEC Pharm”) infringed Lilly’s patented Effient® product, Patent No. 8,404,703, which has been issued by the United States Patent Office.

This lawsuit adds another defendant, HEC Pharm, to Lilly’s Indiana patent litigation regarding Effient. In these Effient patent-defense lawsuits, Lilly et al. allege infringement of certain patents related to the pharmaceutical Effient. At issue in the litigation against HEC Pharm is only one of the Effient-related patents, 8,404,703 “Medicinal Compositions Containing Aspirin,” (the “‘703 patent”).

This complaint asserts patent infringement arising out of the filing by HEC Pharm of an Abbreviated New Drug Applications (“ANDA”) with the United States Food and Drug Administration (“FDA”) seeking approval to manufacture and sell generic versions of two pharmaceutical products – Effient 5mg and Effient 10mg tablets – prior to the expiration of the ‘703 patent. These patents cover a method of using Effient products for which Lilly claims an exclusively license.

Effient products were approved by the FDA for the reduction of thrombotic cardiovascular events in certain patients with acute coronary syndrome (ACS) who are to be managed with percutaneous coronary intervention (PCI, or angioplasty). Effient products contain prasugrel hydrochloride, which is also known as 5-[(1RS)-2-cyclopropyl-1-(2-fluorophenyl)-2-oxoethyl]-4,5,6,7-tetrahydrothieno[3,2-c]pyridin-2-yl acetate hydrochloride.

The instructions accompanying Effient products state that patients taking Effient products should also take aspirin. The use of Effient products in combination with aspirin for the reduction of thrombotic cardiovascular events in patients with ACS who are to be managed with PCI is allegedly covered by the claims of the ‘703 patent.

HEC Pharm is accused of planning to infringe the patents-in-suit by including with its products instructions for use that substantially copy the instructions for Effient products, including instructions for administering HEC Pharm’s products with aspirin as claimed in the ‘703 patent.

Plaintiffs contend that HEC Pharm knows that the instructions that HEC Pharm intends to include with its products will induce and/or contribute to others using those products in the allegedly infringing manner set forth in the instructions. Moreover, Lilly et al. also contend that HEC Pharm specifically intends for health care providers, and/or patients to use HEC Pharm’s products in accordance with the instructions provided by HEC Pharm and that such use will directly infringe one or more claims of the ‘703 patent. Thus, state Plaintiffs, HEC Pharm’s actions will actively induce and/or contribute to infringement of the ‘703 patent.

The complaint, filed by an Indiana patent lawyer, lists two counts:

• Count I: Infringement of U.S. Patent No. 8,404,703
• Count II: Declaratory Judgment of Infringement of U.S. Patent No. 8,404,703

Plaintiffs ask the court for judgment:

• That HEC Pharm has infringed the ‘703 patent and/or will infringe, actively induce infringement of, and/or contribute to infringement by others of one or more claims of the ‘703 patent;
• That, pursuant to 35 U.S.C. § 271(e)(4)(B), HEC Pharm be permanently enjoined from making, using, selling or offering to sell any of its accused products within the United States, or, where applicable, importing accused products into the United States prior to the expiration of the ‘703 patent;
• That, pursuant to 35 U.S.C. § 271(e)(4)(A), the effective date of any approval of the HEC Pharm ANDA under § 505(j) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 355(j)) shall not be earlier than the later of the expiration dates of the ‘703 patent, including any extensions;
• If HEC Pharm commercially makes, uses, sells or offers to sell any accused product within the United States, or, where applicable, imports any accused product into the United States, prior to the expiration of either of the ‘703 patent, including any extensions, that Plaintiffs be awarded monetary damages for those infringing acts to the fullest extent allowed by law and be awarded prejudgment interest based on those monetary damages;
• That the case be deemed exceptional under 35 U.S.C. § 285;
• That the ‘703 patent remains valid and enforceable;
• That Plaintiffs be awarded reasonable attorney’s fees, costs and expenses.

Practice Tip #1: The Effient litigation also involves Patent No. 5,288,726, “Tetrahydrothienopyridine Derivatives, Furo and Pyrrolo Analogs Thereof and Their Preparation and Uses for Inhibiting Blood Platelet Aggregation,” and Patent No. 8,569,325, “Method of Treatment with Coadministration of Aspirin and Prasugrel.”

Practice Tip #2: The FDA’s ANDA process for generic drugs has been abbreviated such that, in general, the generic drug seeking approval does not require pre-clinical (animal and in vitro) testing. Instead, the process focuses on establishing that the product is bioequivalent to the “innovator” drug that has already undergone the full approval process.

The statute that created the abbreviated process, however, had also created some interesting jurisdictional issues with respect to declaratory judgments. For an interesting look at some of the issues, see here
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