Apotex v. UCB: Inventor Instigates Misrepresentations of Counsel and Expert, Results in Inequitable Conduct Invalidation

Category: Inequitable Conduct 
By: Jesus Hernandez, Blog Editor/Contributor   
TitleApotex Inc. v. UCB, Inc., No. 2013-1674 (Fed. Cir. Aug. 15, 2014).
IssueApotex argues that merely advocating a particular interpretation of the prior art cannot support an inference of deceptive intent [and that there is no duty to disclose an inventor’s own suspicions or beliefs regarding relevant prior art.].
Apotex Inc. at *16 (text added).
HoldingThe district court’s findings regarding materiality and intent are not clearly erroneous, and its ultimate determination that Dr. Sherman [, the sole inventor of the patent at issue,] breached his duty of candor, good faith, and honesty before the PTO was not an abuse of discretion [because Dr. Sherman was aware that prior art, Univasc, was made according to his claimed process, concealed this knowledge from the PTO, and misrepresented the nature of Univasc and other prior art through his counsel’s arguments and Dr. Lipp’s declaration.]
Id. at *12-13 (text added). 
Procedural HistoryApotex Inc. and Apotex Corp. (collectively, “Apotex”) appeal the decision of the United States District Court for the Southern District of Florida finding that: (1) Apotex’s U.S. Patent No. 6,767,556 (“the ’556 patent”) is unenforceable due to inequitable conduct; (2) Apotex is judi- cially estopped from alleging infringement of the ’556 patent by the accused products; (3) the asserted claims are indefinite; (4) Apotex disclaimed coverage of the accused products from the scope of the ’556 patent’s claims; and (5) Apotex is barred by laches from recovering pre-suit damages. Apotex, Inc. v. UCB, Inc., 970 F. Supp. 2d 1297 (S.D. Fla. 2013).
Apotex Inc. at *2.
Legal Reasoning (Reyna, Wallach, Hughes)
Prosecution before the Examiner
During prosecution before the U.S. Patent and Trademark Office (“PTO”), the ’556 patent received three obviousness rejections. First, the Examiner rejected the claims based on the combination of the ’450 patent and U.S. Patent No. 4,344,949, which discloses using moexipril tablets to treat hypertension. In response, Dr. Sherman’s counsel argued that the cited prior art did not disclose a reaction, but disclosed only combining moexipril hydrochloride and an alkaline magnesium compound.
Apotex Inc. at *5.
The Examiner rejected the claims a second time, but this time based on the combination of the ’450 patent and the Gu article. The Examiner observed that it would have been obvious to combine the ’450 patent’s teaching that ACE inhibitor drugs can be stabilized with an alkaline magnesium compound, with Gu’s teaching regarding stabilization of moexipril hydrochloride via wet granulation. In response, counsel again distinguished the prior art on the basis that no reaction was taught […]
Id. at *6.
Unconvinced, the Examiner issued a third and final rejection on obviousness grounds based on Gu and the ’450 patent, finding that the neutralization taught by the cited references constituted a reaction.
Id. at *6-7.
Appeal and Allowance
Dr. Sherman’s counsel appealed the final rejection to the PTO’s Board of Appeals, arguing that the cited references merely taught combining moexipril hydrochloride with an alkaline stabilizing agent. […] At the direction of Dr. Sherman, counsel also submitted the expert declaration of Dr. Michael Lipp, who reinforced the representations regarding the prior art. Specifically, Dr. Lipp explained that the function of a stabilizer is to inhibit or prevent reactions that would degrade the active ingredient, and that a stabilizer needs to be unreacted to perform this function.
Id. at *7.
In a subsequent telephonic interview, the Examiner and Dr. Sherman’s counsel agreed to incorporate into claim 1 a limitation requiring “greater than 80%” conversion of the moexipril or moexipril acid addition salt to moexipril magnesium. As a result, the Examiner allowed the ’556 patent claims on April 20, 2004.
Id. at *8.
Dr. Lipp DeclarationThe [district] court found that Dr. Sherman failed to inform Dr. Lipp of the true facts about Univasc and shielded him from the truth, which resulted in a declaration that Dr. Sherman knowingly submitted to the PTO to perpetuate his mischaracterizations of the prior art. Dr. Lipp testified that he was specifically asked to limit his discussions to only the documents provided by Apotex, which did not include any information regarding the tests conducted on Univasc or Dr. Sherman’s knowledge of the product.
Id. at *10.
Analysis: Materiality
Guided Misrepresentation of Counsel and Expert DeclarationClear and convincing evidence demonstrates that Dr. Sherman engaged in material misconduct. First, Dr. Sherman was actively involved in the prosecution of the ’556 patent and instigated the representations made on his behalf by his counsel and Dr. Lipp. The ’556 patent’s specification, written by Dr. Sherman, omits important details regarding the prior art that were determined to have been known to him. Record evidence shows that Dr. Sherman’s counsel was in constant communication with him during prosecution and kept him appraised of actions taken by the PTO and arguments made in response, including the representation that the prior art did not involve a reaction. Indeed, Dr. Sherman directly instructed his counsel to continue pressing those arguments and to bolster them through an expert declaration.
Apotex Inc. at *13.
Affirmative RepresentationsSecond, Dr. Sherman made affirmative misrepresentations of material facts. Apotex’s internal tests showed that moexipril in Univasc is “mainly present” as moexipril magnesium. Although the tests were conducted in 2001, before the PTO issued its first rejection of the ’556 patent claims, Dr. Sherman repeatedly asserted before the PTO that the process of the ’450 patent used to manufacture Univasc did not involve a reaction that would produce moexipril magnesium. Years after issuance of the patent, as part of its infringement case, Apotex confirmed through Nuclear Magnetic Resonance (NMR) testing that Univasc indeed contains more than 80% moexipril magnesium. Dr. Sherman’s assertions during prosecution regarding the absence of moexipril magnesium in Univasc were false.
Id. at *13-14.
"but-for" materialityThird, Dr. Sherman’s misconduct was “but-for material” to the issuance of the ’556 patent. The Examiner’s rejections were based on the very same prior art that is the subject of Dr. Sherman’s misrepresentations. The Examiner allowed the claims only after being convinced that the prior art moexipril tablets were stable not from conversion to moexipril magnesium (i.e., a reaction), but because the alkaline stabilizer was combined and remained present in the final product without reacting with the moexipril. […]
Id. at *14.
Analysis: Intent
The district court did not clearly err in finding that Dr. Sherman knew, or at least had a strong suspicion, that he was seeking to patent the very same process used to obtain an already existing and widely available drug. As of the filing of the ’556 patent application, Dr. Sherman was aware that some of the assertions he made in the specification regarding the prior art were at least misleadingly incomplete, if not plainly inaccurate. Additionally, Dr. Sherman admitted that he never performed the experiments described in the ’556 patent, and yet he drafted the examples in the specification entirely in past-tense language. […] Dr. Sherman was also aware that additional misrepresentations were made on his behalf to the PTO, and directed his counsel to bolster those misrepresentations by procuring and submitting the declaration of an expert who was deliberately shielded from the truth.
Apotex Inc. at *15-16 (citations omitted).
The district court did not abuse its discretion in holding the ’556 patent unenforceable due to inequitable conduct.
Apotex Inc. at *16.
 Image Attribution Statement: unknown, “Daniel Webster stealing Henry Clay's thunder,” available as a public domain image due to expired copyright, http://commons.wikimedia.org/wiki/File:Daniel_Webster_stealing_Henry_Clay%27s_thunder_-_cartoon_-_Project_Gutenberg_eText_16960.jpg (image edited) (last visited August 18, 2014).

© 2000-2022, Journal of the Patent & Trademark Office Society
Disclaimer & Privacy Policy