-FBS Pfizer Inc., et al v. Teva Pharmaceuticals USA, Inc., No. 2:2010cv00128 - Document 470 (E.D. Va. 2011)

Court Description: OPINION and FINAL ORDER: The court GRANTS IN PART Teva's Motion to Dismiss for Lack of Standing and ORDERS Pfizer Ireland Pharmaceuticals Co. DISMISSED from the litigation; the court DENIES Teva's Motion for Leave to File its Proposed Secon d Amended Answer and Counterclaim; the court FINDS that Teva's proposed generic equivalent of Viagra would INFRINGE the '012 patent and FINDS the'012 patent is VALID and ENFORCEABLE; the Clerk is DIRECTED to enter judgment for Pfizer on the Amended Complaint and Amended Counterclaim in this case, in accordance with this Opinion and Final Order. Signed by District Judge Rebecca Beach Smith and filed on 8/12/11. (mwin, )

Download PDF

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA Norfolk Division PFIZER INC., PFIZER LTD., FILED and PFIZER IRELAND UNLIMITED AUG PHARMACEUTICALS LIABILITY CO., 1 2 2011 CLERK. U.S. DISTRICT COURT NORFOLK. VA Plaintiffs and Counterclaim Defendants, Civil No. v. TEVA PHARMACEUTICALS Defendant USA, 2:10cvl28 INC., and Counterclaim Plaintiff. OPINION AND FINAL On March 24, 2010, Pfizer, ORDER Inc., Ireland Pharmaceuticals Partnership1 Pfizer, Ltd., and Pfizer (collectively "Pfizer")2 filed suit in this court against Teva Pharmaceuticals USA, Inc. ("Teva")3 1 Upon Motion by Pfizer, and over Teva's objection, this court added Pfizer Ireland Pharmaceuticals plaintiff on June 30, 2011, Amended Complaint on the by agreement of Pharmaceuticals Docket #434; same the Unlimited see Docket # day. Co. as a and Pfizer filed an See Docket # parties, dismissed Partnership from this infra note Liability 406, 4 07. The Pfizer suit on July 14, court, Ireland 2011. See 31. 2 This Opinion consistently refers to the plaintiffs as a whole as Pfizer; however, when necessary, court specific refers to particularly in Section III, plaintiffs with reference to their this full name. 3 Pfizer initially brought suit Pharmaceutical Industries, Ltd., The complaint dismissed May 4, against without 2010. Teva # two Pharmaceutical prejudice See Docket against 26. defendants: and Teva Pharmaceuticals USA, upon Industries, agreement of the Teva Inc. Ltd. parties was on alleging imminent infringement of Pfizer's United States Patent No. 6,469,012 the ("the Treatment '012 patent"), of (filed May 13, Impotence." 1994) entitled "Pyrazolopyrimidinones for United (issued Oct. (hereinafter referred to as "PTX") States 22, Patent No. 2002), 0001. 6,469,012 Plaintiff's Exhibit The *012 patent claims the use of certain chemical compounds as a method of treating erectile dysfunction ("ED"). Only Claims in dispute in this case. No. 2:10cvl28, 18, 2011) F. 25 and 26 of the v012 patent are See Pfizer, Inc. v. Teva Phartns. USA, Inc., Supp. 2d , slip. op. at 9-10 (E.D. Va. Jan. (noting that only these claims are at issue in this case) , Docket # 77.4 One of the especially preferred compounds of is sildenaf il, the x012 patent the active ingredient in the ED drug Viagra.5 On October 25, 2004, Teva filed an Abbreviated New Drug Application with the Food and Drug Administration (UFDA") seeking approval to market a generic equivalent of Viagra containing sildenafil citrate. PTX 238. On April 24, to do so.6 2007, See the FDA granted Teva tentative approval Pfizer alleges in its Amended Complaint that Teva's 4 Pfizer executed a covenant not to sue Teva on Claims 1-23 of the '012 agree patent on December that only Claims 8, 25 2010, see Docket and 26 are at # 64, and the parties issue now. s Viagra is made of sildenaf il citrate, a pharmaceutically acceptable salt of sildenafil. 6 Teva was granted permission to begin marketing its generic version of Viagra 5,250,534 after ("the the '534 expiration patent"), of United on March 2 27, States 2012. Patent See Number PTX 244; planned generic drug will infringe the '012 patent, and seeks a Complaint and filed a declaration from the court to that effect. On April Counterclaim 29, 2010, against Teva Pfizer answered seeking planned drug will not infringe the of the *012 patent are invalid. granted, leave Counterclaim, of the which court amendment the a declaration that Teva's '012 patent and that the claims Teva subsequently sought, to file added an an Amended allegation and was Answer that the and '012 patent is invalid because of inequitable conduct committed during its prosecution before the Patent and Trademark Office ("PTO") .7 December 13, 2010, this court held a hearing pursuant to Markman v. Westview Instruments, Inc., 517 U.S. opinion 2011, construing patent. , on March 17, See Pfizer, 2011 W.L. 996794 Inc. v. (E.D. 370, 372 the At trial, 2011, terms Inc., F. of the Supp. 2d 2011) . Teva stipulated therefore this issue is not before the court. July 17, and issued an disputed Teva Pharms. USA, Va. (1996), A bench trial in this case commenced on June 15, for twelve days. On to 2011, lasting infringement, and See Docket # 330. On after final arguments had concluded, this court took United States Patent No. 5,250,534 (filed June 20, 1990) (issued Oct. 5, 1993). The '534 patent is a compound patent which claims the invention of sildenafil, among other compounds. See infra Section I.e. 7 Teva's subsequent Motion for Leave to File Proposed Second Amended Answer and Counterclaim, see Docket # 345, before this court. See infra Section III. 3 is currently pending all outstanding Order issues addresses and under advisement. resolves all This remaining Opinion and motions and Final merits determinations. I. The patent in suit particular Claims 25. 25 Factual Overview in this case and 26, is the *012 patent, and in which claim: A method of treating erectile dysfunction in a male human, comprising orally administering to a male human in need of such treatment an effective amount of a compound selected from: [listing nine different chemical compounds] or a pharmaceutically acceptable or a pharmaceutical 26. A method as defined in claim 25, [listing a chemical compound] thereof, patent wherein said compound is or a pharmaceutical ly acceptable salt teach lines 1-39, PTX 0001.8 the oral administration 8 In its decision on claim construction, following means thereof; or a pharmaceutical composition containing either entity. patent col. 10, the salt composition containing either entity. terms of Claims 25 and 26: Thus, these claims of of sildenafil and other the court construed the (1) "erectile dysfunction" "an inability to obtain or sustain an erection adequate intercourse"; {2) "treating erectile dysfunction" for requires no construction because a person ordinarily skilled in the art reading the patent would understand its ordinary and customary meaning; "a male human [animal] (3) in need of such treatment" means "a male human in need of treatment for erectile dysfunction"; (4) "an effective amount" requires no construction because a person ordinarily skilled in the art reading the patent would understand its ordinary and customary meaning; and (5) "a method of treating erectile dysfunction in . . . a male human practiced Pfizer, for Inc. v. the in need of purpose Teva Pharms. of USA, such treatment" treating Inc., means erectile 2011 W.L. "a method dysfunction." 996794 at *9. compounds for the treatment of ED.9 October 22, As 2019. The *012 patent will expire on See Final Pretrial Order U 9, the patent in suit concerns Docket # 267.10 the treatment of ED, bringing with it a host of technical terminology and a background of underlying knowledge, this court will first review the biology and physiology of erections11 and then will move to a description of the invention and patents concerned. A.12 The penis of a male human contains erectile tissue called the corpus cavernosum, length. consisting of two corpora cavernosa that run its The corpus cavernosum is smooth muscle tissue that is spongy and composed of cavernosal spaces which can expand and fill with blood to produce an erection. The corpus cavernosum fibrous tissue known as the tunica albuginea. a flaccid state, is surrounded by When the penis is in the corpus cavernosum is contracted. An erection is produced when the corpus cavenosum relaxes so that it expands and 9 Sildenafil is the compound named in Claim 26 of the '012 patent. 10 The provisions of the '012 patent will be discussed further, infra, in Section I.e. 11 In reviewing the biology of erections, the court relies on the testimony of Teva's and Pfizer's urology experts, Carson III and Dr. Irwin Goldstein, Dr. Culley C. respectively. 12 This Subsection contains information which would not have been available at the time the it the for context. application *012 patent was filed; The state of for the '012 concerning erectile function, the art at patent, the with 5 of relation will be addressed, IV. the court includes time the to infra, filing of knowledge in Section fills with blood. As the corpus cavernosum relaxes, the tunica albuginea compresses the veins that drain blood from the penis, thus preventing blood from flowing out and raising pressure inside the penis, producing an erection. Detumescence of the penis occurs when the corpus cavernosum contracts and bloods flows out of the penis. An erection is controlled by the nervous system. three neurotransmission pathways in the human body: nerves; the cholinergic non-cholinergic ("NANC") function. a male When nerves; nerves. human to the penis, as to sexual stimuli, the NANC The neurotransmitter in this case they synthesize NO from L-arginine in the endothelial the corpus guanylate non-adrenergic, Thus, when the NANC nerves send a signal cells of the vascular system. cells of the the adrenergic The NANC nerves control erectile reacts nerves send a signal to the penis. is nitric oxide ("NO") .13 and There are The NO travels into the smooth muscle cavernosum where cyclase. Guanylate it activates an enzyme known cyclase synthesizes another enzyme, cyclic guanosine monophosphate ("cGMP") by interacting with guanosine signaling triphosphate. cGMP is the enzyme that cues smooth muscle tissue, in this case the corpus cavernosum, to relax.14 13 NO is also referred to as endothelium-derived relaxing factor. 14 There is also smooth muscle tissue in the vascular system; so at the same time the smooth muscle in the corpus cavernosum relaxes to allow the penis likewise relax, to fill with blood, the arteries into the penis thereby increasing blood flow into the penis. This entire process is known as the L-arginine-nitric oxide-cyclic GMP pathway. cGMP is a cyclic nucleotide, a form of enzyme. Enzymes, as is evident from cGMP's function in the smooth muscle described above, are proteins that catalyze chemical reactions in the body. degraded by cGMP phosphodiesterase binds to cGMP and breaks ("PDE"), another enzyme, it down into GMP. PDE3, PDE4, At the time the *012 there were five known types of PDEs: and PDE5. PDE1 and PDE5 which GMP does not have the same signaling effect in smooth muscle as cGMP. patent was filed, cGMP is both degrade PDE1, PDE2, cGMP and, thus, are termed cGMP PDEs.ls cGMP PDE can be inhibited by cGMP PDE inhibitors. An inhibitor functions in the same was that cGMP PDE itself functions with cGMP, by binding to it to block or decrease In other words, turn, the activity of the enzyme. cGMP PDE inhibitors bind to cGMP PDE so that it, cannot bind to cGMP. in The effectiveness of a PDE inhibitor is measured in terms of its potency, the amount of the inhibitor required to effectively inhibit the PDE,16 and its selectivity, i.e., the ratio at which the inhibitor prefers one PDE over another.17 15 PDE5 is also termed cGMP specific PDE because it only degrades cGMP. PDE1, by contrast, ("cAMP"), also degrades cyclic andosine monophosphate another cyclic nucleotide. 16 Potency is measured by the half-maximal inhibitory concentration ("ICS0") of the compound which measures the concentration of the B. Beginning in 1985, Pfizer researchers in Sandwich, England were working on the creation of cGMP PDE inhibitor drugs to cardiovascular diseases such as hypertension and angina. Dr. Peter Ellis was the head of the team of biologists on the project, Dr. Nicholas Terrett led the chemists. treat while Pfizer hoped that cGMP PDE inhibitors would be able to treat these cardiovascular diseases by causing relaxation thereby lessening of the smooth muscle stress on the tissue in the cardiovascular arteries, system. In particular, Pfizer aimed to create compounds that would inhibit cGMP PDEs, thereby enhancing the action of cGMP within smooth muscle and causing smooth muscle The project compounds. relaxation. first started with the chemistry team creating Such compounds were based off other compounds known to inhibit cGMP PDE, and the chemistry team worked to make such compounds more selective, in terms of which enzyme they inhibited, potent in their inhibitory capability.18 made, and more Once the compounds were the biology team tested the compounds in assays it designed compound required to inhibit 50% of the activity of the PDE. a lower IC50 value indicates a more potent Thus, inhibitor. 17 In order to determine the selectivity of a compound between two PDEs, the ratio between the IC50 values for each PDE is determined. 18 Dr. Terrett testified that Pfizer began with the known cGMP PDE inhibitors 982:1-11. zaprinast and a Warner Lambert compound. Trial Tr. to determine their selectivity and potency for cGMP PDE. The chemistry team then received feedback and modified the compounds further, if necessary, to improve their biological activity. The chemistry team also ran tests to assess the safety of the compounds, while the pharmacokinetic team studied the compounds to determine their absorption, distribution, metabolism, and excretion in the human body. The chemistry team first synthesized sildenafil in 1989, it quickly became pharmacokinetic a "lead tests had compound," been after run. 19 The the biology results were and and so encouraging that the team working on the project recommended that Pfizer begin clinical development of of angina. its first See PTX 354. clinical 695:21-697:14. As A year later, trial this sildenafil using in July 1991, sildenafil, clinical for the treatment trial Study was a 201. Phase I subjects were healthy volunteers, in this case males, was drug to assess the safety pharmacokinetic properties. after it, of the and Pfizer began further Trial Tr. study, the and the goal determine its This initial study, and several others all tested single doses of sildenafil. In 1992, Pfizer began a multiple dose study of sildenafil, again using healthy male volunteers, Study 207. Trial Tr. 697:21-699:9. 19 While it was in development at Pfizer, sildenafil was referred to by its compound number, UK-92,4 80. The volunteers placebo daily volunteers were for ten reported myalgia, 20 administered days. several headaches, and three At the side doses of sildenafil conclusion effects; spontaneous the of most the or a study, common were The Early erections. Candidate Management Team ("ECMT" ) , the team charged with the initial testing and development of sildenafil that included Dr. to erections, as such a side effect had never been previously reported Pfizer that clinical volunteers, a common trials. As a side effect result of this was was surprised in hear Ellis, spontaneous report the the ECMT decided to run a clinical trial with sildenafil directed toward the treatment of ED. The first Phase II clinical study with sildenafil, began on July 28, 471. from 1993, and concluded on November 15, As it was a Phase II study, targeted disease, i.e., Study 350, 1993. See PTX its volunteers were males with the men who suffered from ED. The volunteers were orally administered either sildenafil or a placebo three times a day for seven days. They recorded experienced during the first six days. any erectile activity On the seventh day, while each volunteer was provided sexual stimulation by watching an erotic video, 20 rigidity and circumference of his penis was measured using Myalgia means muscle pain. 10 a Rigiscan.21 The results showed that sildenafil significantly improved erections for those men in the test with ED. Pfizer then commenced a single dose Phase II study, Study 3 51, on February 24, 706:21-707:20. 1994, concluding May 30, Trial Tr. In this study, male volunteers with ED were given a single dose of sildenafil on one occasion, administered. 1994. and a Rigiscan was The same volunteers were then given sildenafil once a day for seven days, and they made note of their erectile activity. The results were encouraging and showed a correlation between the administration of sildenafil and improved erectile function for men with ED. Based on the results of the studies described, to the FDA for approval of Viagra, Pfizer applied sildenafil citrate. Viagra was approved by the FDA in 1998 in New Drug Application No. a drug to treat ED. 20-895 as Viagra works, as the '012 patent states, because it is a PDE5 inhibitor that prevents PDE5 from binding to cGMP and rendering cGMP inactive in the L-arginine-nitric oxide-cyclic GMP pathway, thus increasing the level of cGMP in the corpus cavernosum. Viagra's introduction on the market in 1998 generated a flurry of publicity and interest from scientists and consumers alike. Experts from both parties admitted that Viagra revolutionized the treatment 21 A Rigiscan is a medical device which measures penile rigidity and circumference using two loops placed on the penis, one at the base and one near the tip. 11 of ED, making the treatment both more effective and accessible. Since its introduction in 1998, Viagra has generated cumulative sales of over $10 billion. c. After successfully filed creating compounds, Pfizer a series Initially, Pfizer filed several European Patent Number sildenafil of and other applications for compound patents. 0463756A1 ("EP patents.22 The first was »756") entitled "Pyrazolopyrimidinone Antianginal Agents," filed June 7, published February sildenafil, 1, 1992. PTX 0352. among other compounds, EP X756 related 1991, and first disclosed and claimed such compounds as selective cGMP PDE inhibitors23 which elevate the levels of cGMP. See EP '756, 3:5-7, PTX 0352. The specification of the patent discloses: [T]he compounds have utility in the treatment of a number of disorders, including stable, unstable and variant (Prinzmetal) angina, hypertension, congestive heart failure, atherosclerosis, conditions of reduced blood vessel patency e.g. coronary angioplasty disease, stroke, asthma, allergic postpercutaneous (post-PTCA), bronchitis, rhinitis, transluminal peripheral chronic asthma, glaucoma, and vascular allergic diseases 22 This Subsection of the Opinion does not exhaustively set out each of the patents referenced at trial. Here, it is sufficient to give an overview of the structure of the patents for sildenafil and its related compounds for contextual purposes. The court will analyze other relevant patents during the discussion of the issues in the case which specifically involve those patents. 23 The patent stated that1 the claimed compounds inhibited both types of cGMP PDE: PDE1 and PDE5. 12 characterized by disorders of gut motility, e.g. irritable bowel EP '756, syndrome 3:9-14, (IBS). PTX 0352. Of the compounds in Claims 25 and 26 of the patent in suit, EP '756 disclosed five, including sildenafil.24 Pfizer next filed European Patent Number 0526004A1 {"EP '004") , also entitled "Pyrazolopyrimidinone February 7, 1992. Antianginal Agents," EP '004 was published on March 2, 1993. on PTX 0066. EP '004 claimed additional potent and selective cGMP PDE inhibitors useful in the treatment of: [S]table, unstable and variant (Prinzmetal) angina, hypertension, pulmonary hypertension, congestive heart failure, atherosclerosis, conditions of reduced blood vessel patency e.g. postpercutaneous transluminal coronary angioplasty (post-PTCA), peripheral vascular disease, stroke, bronchitis, chronic asthma, allergic asthma, allergic rhinitis, glaucoma, and diseases characterized by disorders of gut motility, e.g. irritable bowel syndrome (IBS). EP '004, 2:10-14, PTX 0066. in Claim 25 of the Finally, EP '004 disclosed four of the compounds '012 patent.25 Pfizer filed United States Patent Number 5,250,534 ("the '534 patent") on May 14, 1992. the U.S. equivalent "Pyrazolopyrimidinone of EP '756 Antianginal PTX 0002. and, thus, Agents" and The '534 patent is is also shares entitled the same EP '756 will be discussed further in this Opinion as its disclosures relate to Teva's claim that the '012 patent is void for obviousness. See infra Section IV. 25 EP '004 will be discussed further as concerns obviousness. infra Section IV. 13 See specification and characteristics of EP '756 described above, including the diseases the compounds were believed to be useful in treating. The '534 patent likewise covers five of the compounds listed in Claims 25 and 26 of the v012 patent, including sildenaf il. The '534 patent issued on October 5, patents - EP »756, EP v004, 1993.26 and the '534 Each of these compound patent - disclosed oral administration of the relevant compounds. After Pf izer had filed the compound patents for sildenaf il and the other cGMP PDE inhibitors, it filed the patent in suit directed to a method of treating ED using some of the compounds from EP '756 and EP '004. ED, and Claims 25 and 26 specifically claim oral treatment of the specification of the administration is the preferred route. 62-65, PTX 0001.27 patent states that oral '012 patent, col. 5, lines, In the specification of the patent, Pfizer discloses that the compounds of the *012 patent have been found to be potent and selective inhibitors of PDE5 cGMP levels 26 The in the '534 patent obviousness. corpus will cavernosum. Id. such that they enhance col. 5, lines also be discussed further as See infra Section IV; 33-35, concerns supra notes 24 and 25. 27 The preferred dosing regimen disclosed is 5 to 75 mg of the compound three times a day. '012 patent, col. 5, lines 65-66. Pfizer, Inc. v. Teva Pharms, 2011 W.L. at *7 (holding preferred dosing regimen is not a claim limitation). 14 But that see the 39-44, PTX 0001.2B rejections, The '012 patent issued, after overcoming numerous on October 22, 2002. With the pertinent factual underpinnings of the case set out, this court turns to the substantive issues remaining before it. II. Teva's Motion to Dismiss During trial on July 6, for Lack of Standing. for Lack of Standing 2011, Teva filed a Motion to Dismiss See Docket # 412. Teva argues that Pfizer has failed to carry its burden to demonstrate that each plaintiff has standing to sue for infringement of the patent in suit because it has failed to prove that any plaintiff has sufficient interest in the patent to sue for infringement. Per a briefing schedule set by the court, Pfizer responded in opposition on July 15, 2011, Docket # 435, and Teva replied on July 20, 2011, see see Docket # 451. The motion is now ripe for decision. A. The issue of standing in this case is bound up with the evidence on the issue of ownership,29 and thus the court reviews the evidence Pfizer identified the predominant PDE in the corpus cavernosum as PDE5. »012 patent, col. 5, lines 29-32, PTX 0001. To the extent that the issue of ownership was preserved for trial, this Section of the Opinion resolves questions of ownership as well as standing. However, the court notes that Teva did not preserve ownership as a triable issue in the Final Pretrial Order as to the '012 patent. See Final Pretrial Order, at 277, Docket # 276. Pfizer did so preserve the question, and thus the court addresses it because Pfizer, as the plaintiff, has the burden to prove ownership of the patent in suit, Tyco Healthcare Grp. L.P. v. Ethicon Endo-Surgery, 15 as to both presented at trial.30 itself, the Pfizer, *012 patent. Inc. Looking first to the patent in suit is named as the owner-assignee on the face of PTX 0001. Pfizer, Inc. received the assignment of rights to the patent from the patent's inventors, Drs. Nicholas Terrett 0363. and Peter Ellis, assignment, Drs. [S]ell, on October 10, 1995. PTX In the Terrett and Ellis agreed to: assign, and transfer unto PFIZER, INC. . . . the entire right, title, and interest in and to our application for Letters Patent of the United States . . . entitled PYRAZOLOPYRIMIDINONES FOR THE TREATMENT OF IMPOTENCE and our entire right, title, and interest in the United States in and to all our inventions, whether joint or sole, disclosed in said application for Letters Patent, and in all and to all United States patents granted on the foregoing inventions. Id. at 1. On the same day, Pfizer, Ltd., whose employment of Drs. Terrett and Ellis entitled it to claim full rights to the patentable inventions, consented to the assignment, noting that "PFIZER LIMITED desires that PFIZER INC. receive the full benefits of the foregoing assignment by its aforesaid employee(s)." Id. at 3. Inc., 587 F.3d 1375, 1378 (Fed. Cir. 2009), even though such ownership was not challenged by Teva until concerning waiver. trial, raising serious questions 30 Pfizer's Vice President and Assistant General Counsel, Mr. Gregg Benson, testified on the first day of trial as to matters of ownership. See Trial Tr. 63:17-98:8. The court does not reference his testimony directly because it, in substance, merely confirmed the terms of the documentary evidence referenced herein, and the court finds the documentary evidence authoritative over the testimony, as the interpretation of the agreements and their relation to standing are questions for the court to decide. 16 Previously on August entered Filing into a Patent Agreement 9, 1993, Filing memorialized Pfizer, Agreement. "the Inc. PTX and Pfizer, 0322. procedures to The be Ltd. Patent applied in respect of the filing of patent applications resulting from research carried out under the Cost Sharing Agreement [between Pfizer, Inc. and Pfizer, Ltd.] and the procedure applicable to patent applications resulting from other research carried on by LIMITED." Id. at 2. Specifically: LIMITED Property patent applications will be filed by PFIZER [INC.] in the USA. . . . In filing such applications, PFIZER [INC.] will act as agent for LIMITED, so that such applications and any patents issued thereon shall be held by PFIZER [INC.] in trust for LIMITED, as the beneficial owner thereof. Id. at 3-4. In addition, to effectuate the filing of patents, Pfizer, Ltd. agreed that it would be "deemed to assign PFIZER [INC.] . . . all rights hereunder." necessary Id. at 5 . applications, Pfizer, Id_;_ at to file patent applications In consideration for its filing of the patent Inc. non-exclusive license . in the USA." ... . could receive from Pfizer, Ltd. wa . with respect to any such LIMITED Property 6. After the application for the '012 patent was filed, but before it was issued by the PTO, Pfizer, Ltd. executed a license agreement with Pfizer Pharmaceuticals Production Corporation, effective as of January 1, 1997. for sildenafil, PTX 0324. The license agreement concerned patents either issued or currently pending, 17 including both the 4534 patent and the '012 patent. Id^ at 13. Therein, Pfizer, Ltd. granted to Pfizer Pharmaceuticals Production Corporation "(1) an exclusive license under the U.S. Patent Rights to make, use, sell, and offer for sale Licensed Product in the Commercial Territory, and to import Licensed Product into the Commercial Territory and (2) an exclusive license to use the Technical Information in the Commercial territory in connection with the activities referred to [above]." Id_^ at 4. "Commercial Territory" was defined as the United States of America, id. at 2, and "Licensed Product" was defined as "any drug for human use containing the Compound, Thus, [sildenafil]." id^ at 3. Pfizer Pharmaceuticals Production Corporation received, in essence, an exclusive license to manufacture and sell sildenafil in the United States. Ltd.'s retained This exclusive license was subject to Pfizer, "Conversion exclusive license granted . . Right," the right "to convert the . to a non-exclusive license" at any time when at least 20% remains on the patent term. Id. at 2-4. In return for the exclusive license, Pfizer Pharmaceuticals Production Corporation would pay Pfizer, Ltd. royalties based on net sales in a schedule set out in the agreement. ld_;_ at 6. In the case of infringement of any of the patents covered by the agreement, Pfizer, Ltd. had "the initial right to bring suit in its own name" with Pfizer Pharmaceuticals Production Corporation's cooperation, Pfizer, Ltd. failed to bring suit within thirty (30) 18 days, but if Pfizer Pharmaceuticals Production Corporation could bring suit in its own name, joining Pfizer, Ltd. and Pfizer, Inc. as necessary. Id. at 7-8. The license agreement for sildenafil has since "changed hands" several times due to changes in ownership of the entity holding it. First, on January Corporation 15, entered 1998, Pfizer into a Pharmaceuticals Sale Agreement Pharmaceuticals Production Corporation, Ltd. business and Irish Corporation." of Pfizer PTX 0325, at 1. Pharmaceuticals assets, assets Production including all Production with Pfizer for the "entire Irish Pharmaceuticals Production As part of the Sale Agreement, Pfizer Corporation licenses. Id. transferred at 2, 4. The all of license its for sildenafil was specifically noted as one of the licenses that would transfer to the new entity. Subsequently, on Id. November at 14, 13. 2000, Pfizer Pharmaceuticals Production Corporation, Ltd. entered into an "Agreement for Sale of Business and Assets" with Pfizer Ireland Pharmaceuticals. Again, as part of this Agreement for Sale, Production Corporation, Pharmaceuticals agreements, sildenafil. id. Id. all at at Ltd. assets, 5, Pfizer Pharmaceuticals transferred id. at 4, one of which was 10. 19 to Pfizer including the PTX 0326. Ireland contracts license agreement and for The license was transferred yet again on November 28, 2003, via an "Agreement for Sale of Business and Assets" between Pf izer Ireland Pharmaceuticals PTX 0209. and Pfizer Pfizer Ireland Ireland Pharmaceuticals Pharmaceuticals agreed to Partnership. transfer to Pfizer Ireland Pharmaceuticals Partnership all of its assets and business, including contracts. include all license Pharmaceuticals. however, Id. at 5. agreements Id. at 2. Contracts was defined to undertaken This by Agreement Pfizer for Sale Ireland did not, list the particular licenses to be transferred. Finally, on January 10, 2011, Pfizer Ireland Pharmaceuticals Partnership sold all of its assets to Pfizer Ireland Pharmaceuticals Unlimited Liability PTX 0210. Co. {"Pfizer Ireland Pharmaceuticals Pfizer Ireland Pharmaceuticals Co."). Partnership agreed to transfer all of its assets, including its interest in contracts, id. at 7, 2. which was defined to include all license agreements. Again, agreements there was no transferred. schedule listing Pfizer the Ireland specific id. at license Pharmaceuticals Co. currently holds the license for sildenafil in the United States. B. Standing is a jurisdictional requirement for any federal case and may never be waived by the parties. v. Agilent Techs., Inc., 427 F.3d 971, 975 E.g., Sicom Systems, (Fed. Cir. 2005); Pandrol USA, L.P. v. Airboss Ry. Prods., Inc., 320 F.3d 1354, 1367 20 Ltd. (Fed. Cir. 2003) ("It is well-established that any party, sua sponte, any can raise the stage of asserting the the issue of litigation, infringement standing for the including on has and even the court the burden first appeal."). to prove time at The party that it has standing to do so. Mentor H/S, Inc. v. Med. Device Alliance, Inc., 240 F.3d 1016, 1017 (Fed. Cir. 2001) (per curiam) . In patent cases, the law of standing has its sources both in constitutional law and the Patent Act. F. Supp. 2d 515, Beam Laser Sys., 520 (E.D. Va. Inc. 2000). v. Cox Commc'ns, Inc., 117 The Patent Act provides: "A patentee shall have remedy by civil action for infringement of his patent." 35 U.S.C. § 281 (2006). "Patentee" is defined under the Act to include "not only the patentee to whom the patent was issued but also the successors in title to the patentee." Microsoft, ("The 'successor [] in title' is the party holding legal title to the (emphasis plaintiff must be in original)). a "patentee" 1339 (Fed. at § 100; see also Morrow v. patent." 499 F.3d 1332, Id. Cir. Beyond the requirement under the statute to 2007) that a sue for infringement, there is also the constitutional requirement that the party alleging infringement F.3d at The show an injury-in-fact. Morrow, 499 1339. Federal Circuit has held that there are parties for standing purposes as concerns patents: three types of "those that can sue in their own name alone; those that can sue as long as the patent 21 owner is joined in the suit; and those that cannot even participate as a party to an infringement suit." Id. There are three entities that meet the requirements for the first category. the statute that the patentee, owner of the patent, may sue on its own for infringement. F.3d at 976. Additionally, It is clear from 35 U.S.C. § is a party that 281; if a patentee assigns Sicom, its rights 427 in a patent, the assignee may sue for infringement in its own name, Sicom, 427 F.3d Morrow, at 499 976, as F.3d at the 1339. assignee has Finally, legal title an exclusive to the patent. licensee who has all substantial rights in the patent is treated like an assignee for the purposes of standing. Sicom, 427 F.3d at 976. The court must look to the license agreement to determine if the licensee in fact holds all substantial rights. Inc., 52 F.3d 1026, The 1030 second category, patent is joined, (Fed. Ortho Pharm. Corp. v. Genetics Inst., Cir. parties who may sue Corp. of Am., 269 U.S. 459, 468 v. Diamedix Corp., exclusive licensee, if the owner of the includes exclusive licensees that do not have all substantial rights in the patent. Labs, 1995). licensee Indep. Wireless Tel. Co. v. Radio (1926) ; Sicom, 427 F.3d at 980; Abbott 47 F.3d 1128, receives more 1132 rights but fewer than an assignee. (Fed. than Cir. a 1995). "An nonexclusive An example of an exclusive licensee is a licensee who receives the exclusive right to practice an invention but only within a given limited territory." 22 Sicom, 427 F.3d at 976 (citing Rite-Hi te Corp. v. Kelley Co. , Inc., 56 F. 3d 1538, 1552 (Fed. Cir. 1995)). Thus, crucial to the determination of whether an entity is an exclusive licensee is whether the licensee holds exclusionary rights to the patent, the right to "prevent others from practicing the invention." Morrow, 4 99 F.3d at 1340. "To have co-plaintiff standing in an infringement suit, a licensee must hold some of the proprietary sticks from the bundle of patent rights, albeit a lesser share of rights in the patent than for an assignment and standing to sue alone." words, Ortho Pharm. , 52 F.3d at 1031. to have standing at all, a licensee must have "beneficial ownership of some of the patentee's proprietary rights." 1034. in other Id^ at Again, the court looks to the license agreement to determine if a licensee is an exclusive licensee. The final type of entity for standing purposes is a nonexclusive licensee that cannot even join an infringement suit. The Federal Circuit has been clear that « [a] holder of such a nonexclusive license suffers no legal injury from infringement and, thus, has no standing to bring suit or even join in a suit with the patentee." Pharm., 52 F.3d at 1031. Qrtho Nonexclusive licensees are "those that hold less than all substantial rights to the patent and lack exclusionary rights under requirement." the patent statutes to Morrow, 499 F.3d at 1340. 23 meet the injury-in-fact Such entities do not meet the statutory or constitutional requirements of standing and may not join with other parties The three in pursuing an infringement suit. categories of plaintiffs enumerated above are well-settled in Federal Circuit precedent for establishing standing in suits at law for damages. Moreover, there is one other type of entity that may have standing to sue in equity, injunctive relief. in other words for In Arachnid, Inc. v. Merit Industries, Inc., 939 F.2d 1574 (Fed. Cir. 1991) , the Federal Circuit distinguished between entities with standing in law and entities with standing in equity. It held that when an entity has equitable ownership of a patent, entity may seek only prospective relief in equity, infringement. damages law') of at 1579. for infringement of A party "seeking a United States not damages for to patent recover money (an action 'at must have held the legal title to the parent during the time the party Id. that infringement." only has Id. equitable (emphasis title, "a omitted). federal Conversely, district court if a has jurisdiction to consider claims for equitable relief stemming from the alleged infringement." Id. at 1580 (emphasis court has recognized the Federal Circuit precedent omitted). This supporting the conclusion that a party having equitable title to a patent may sue in equity to prevent further infringements. 2d at 520. standing With these legal underpinnings, issue raised by Teva. 24 Beam Laser, 117 F. Supp. the court turns to the c. Teva argues that all of the remaining Pfizer entities31 lack standing to sue for infringement of the patent. For the sake of clarity, the court will consider each of the parties individually.32 First, Teva argues that Pfizer has failed to prove that Pfizer, Inc. has standing to sue because it has not shown Pfizer, Inc. has an ownership interest in the patent sufficient to establish standing. In particular, Teva submits that the Patent Filing Agreement between Pfizer, Inc. and Pfizer, Ltd., patents in trust for Pfizer, demonstrates that Pfizer, in the patent. in which Pfizer, Inc. Ltd. as beneficial owner, Pfizer responds that such ownership is evident and *012 patent as the assignee of recognized as owner of Inc. the is listed on the face inventors and, thus, is the patent. The court agrees with Pfizer, Pfizer, the has no substantial ownership rights unassailable from the fact that Pfizer, of the Inc. holds the filed as it is not open for debate that Inc. is the legal owner of the '012 patent. agreement, as reflected in the patent itself, The assignment rendered Pfizer, Inc. 31 As a result of an agreement of the parties and by Order on the final day of trial, July 13, 2011, the court dismissed Pfizer Ireland Pharmaceuticals Partnership from the case for lack of standing. See Docket #433; supra note 1. 32 Overall, however, the court notes that Teva's argument boils down to the contention that essentially no entity owns and no party has infringement. a sufficient interest 25 in the the patent '012 patent to sue for the legal title holder of the patent. See Furthermore, there is no evidence that Pfizer, 35 U.S.C. § 100. Inc. has assigned its interest to any other party such that it would lose its presumptive right to enforce the patent. Accordingly, Pfizer, Inc. has standing to sue in its own name on the patent. Next, Teva argues that Pfizer, Ltd. lacks standing to sue on the patent, either because Pfizer has failed to demonstrate that the Patent Filing Agreement was utilized for the application for the '012 patent, or because Pfizer has failed to establish that Pfizer, Ltd., as a beneficial owner rights to enforce it. of the patent, has sufficient proprietary Pfizer responds that Pfizer, Ltd. has standing to enforce the patent, both because it is the equitable owner of the patent seeking equitable relief, and because per the explicit terms of the Patent Filing Agreement, from practicing the it has the right to exclude others invention. At the outset, the court disagrees with Teva that the assignment and application for the %012 patent were done outside the parameters of the Patent Filing Agreement. The evidence in this case demonstrates that the assignment and application specifically were done in keeping with the Patent Filing Agreement. In particular, the inventors, whose invention would normally have been property of their employer, invention to Pfizer, Pfizer, Ltd., Inc. assigned all of their rights for the 26 purposes of filing a in the patent application. See PTX 363. This assignment follows the terms of the Patent Filing Agreement, because therein the parties agreed that the inventions, which would be the property of held in trust by Pfizer, Inc., Pfizer, so that Pfizer, the patent in the United States. Inc. See PTX 0322, Ltd., would be could prosecute at 3-4. In order to facilitate this process, Pfizer, Ltd. consented to the assignment. In other words, the evidence of an assignment is not proof that the Patent Filing Agreement was ignored by the parties; rather it is proof that it was inventors, in effect, Pfizer, for Pfizer, Inc. because without the assignment from the could not have prosecuted the application Ltd. Although the court has determined subject to the Patent Filing Agreement, that the '012 patent is it remains for the court to determine what rights Pfizer, Ltd. retained in the patent under that agreement and whether such rights are sufficient to create standing. As stated in the Patent Filing Agreement, Pfizer, Ltd. is considered the "beneficial Additionally, owner" Pfizer, of Ltd. the patents prosecuted. the patent. See PTX 0322, at 4. retained the right to grant licenses to Id. at 6. Finally, both Pfizer, Ltd. and Pfizer, Inc. have the right to enforce patents and agreed to cooperate in doing so. Id. at 5. 27 "Beneficial owner" is not defined in the Patent Filing Agreement,33 and it specif ically provides that it is to be interpreted under the laws of England. Id. at 8.34 The court has undertaken a review of English law and found that "beneficial owner" is often used to describe an entity that gathers the benefits of an asset, business, or agreement without Investment CJSC v. (P.C.) necessarily holding legal E.g., [2011] Kyrgyz Mobil Tel Ltd., title. 1 C.L.C. 205, AK 211 {referring in the recitation to the facts to the differences between the "beneficial owner" and the "ultimate owner") ; Shell U.K., Ltd. v. Total U.K. Ltd. , [2010] 1 C.L.C. 343 (Ct. of App.) (discussing the ability of a beneficial owner to recover in tort for damage caused 33 Teva has made much of the fact that in his testimony Mr. Benson said he did not know what Filing Agreement. "beneficial Trial Tr. owner" 77:14-22. 34 The court procedural to decide. notes that See notice requirements. in a contract supra note again Teva seems See in the Patent This is entirely beside the point because the term "beneficial owner" term for the court means is a legal 30. to be supra note ignoring proper 29. Federal Rule of Civil Procedure 44 .1 requires that when a party intends to raise an issue of foreign law, or other writing." question of what England, it was opposing party, e.g., Fed. that party "must give notice by a pleading R Civ. "beneficial P. 44.1. required to give As Teva has means ownership" under such notice to the raised the the laws court and the which it did not do in any pretrial pleading. Final Pretrial Order, Docket # 276 of See, (failing even to raise the issue under English law in the final order governing trial issues); supra note 29. Moreover, at trial and in post-trial briefing, Teva has likewise merely raised the issue without affording the court any benefit of analysis or facts concerning the Patent Filing Agreement under the 28 laws of interpretation of England. the by negligence) .35 From the court's research, it appears that the terra "beneficial owner" has similar meanings in both English and American law. This is not surprising given that countries sounds in equity, common law. the Black's Eighteenth in both which evolved from mutual roots Law Dictionary, Century, "beneficial owner" defines noting the term's "beneficial in the origins owner" as in "[o]ne recognized in equity as the owner of something because use and title belong to that person, else who .... is Also termed equitable owner. entitled copyright even though legal title may belong to someone even to enjoy though legal Black's Law Dictionary 1214 F. Supp. 2d at 520. that, under the owner, title except in is a A person or entity patent, vested 2009) ; in trademark, someone or else." see also Beam Laser, 117 "[t]he beneficial owner has standing Black's the general such an entity has most of rights {9th ed. Further, to sue for infringement." appears the ... Law Dictionary 1214. definition of Thus, "beneficial it owner," to all of the traditional property rights for actual legal title to the property. The terms of the Patent Filing Agreement do not contradict this meaning of the rights of a beneficial owner. Under that agreement, 35 This court's review of the laws of England is pursuant to Federal Rule of Civil Procedure 44.1 which provides that "[i]n determining foreign law, the court may consider any relevant material or source, including admissible testimony, under the whether Federal or not Rules submitted of Evidence. by a party The court's determination must be treated as a ruling on a question of law. " R. Civ. P. 44.1. 29 or Fed. Pfizer, Inc. holds the patents in trust for Pfizer, Ltd., while Pfizer, Ltd. has the right to grant licenses and enforce the patent. Therefore, this court proprietary rights name alone. Pfizer, concludes that Pfizer, Ltd. has in the patent to confer standing to sue in its However, even if the court were to conclude otherwise, Ltd. certainly has sufficient proprietary rights to sue for infringement in concert with the owner of the patent, here with Pfizer, Finally, Teva argues for sildenafil is licenses, as it has done Inc. that Pfizer Ireland Pharmaceuticals Co. does not have standing to sue, grant sufficient either because the license it holds invalid because Pfizer, or because it is only a Ltd. lacks the right to nonexclusive licensee. Pfizer replies that the Patent Filing Agreement clearly contemplated that Pfizer, Ltd. would grant licenses such that this particular license is valid, and Pfizer Ireland Pharmaceuticals Co.' s exclusive license to make and sell sildenafil in the United States renders it an exclusive licensee with standing to sue in concert with the owner of the patent. First, the court has already concluded that the Patent Filing Agreement explicitly gave Pfizer, PTX 0322, at 6. Thus, Ltd. the power to grant licenses. there is no basis for the assertion that the 30 license itself is null and void ab initio.36 Second, the court must determine if the license granted to Pfizer Ireland Pharmaceuticals Co. constitutes an exclusive license such that it has standing to join a suit where the owner of the patent, Pfizer, Inc., is a party. As recounted above, the Federal Circuit has held that « [a] n exclusive licensee receives more rights than a nonexclusive licensee, but fewer than an assignee. An example of an exclusive licensee is a licensee who receives the exclusive right to practice an invention but only within a given limited territory." added). Sicom, 427F.3dat976 (emphasis The Federal Circuit has directed courts considering this question to carefully parse the license agreement and the rights granted to the licensee, paying attention to whether the licensee has exclusive rights in a territory, id.; Ortho Pharm., 52 F.3d at 1031-32; whether the licensor has retained the right to grant further licenses, Morrow, 499 F.3d at 1342; whether the licensee has the right to sue for infringement, licensor retains Fieldturf, Inc. v. rights Sicom, to 427 F.3d at 979; develop and Southwest Recreational 1266, 1269 (Fed. Cir. 2004). and whether the market the invention. Indus., Inc., 357 F.3d None of these factors are individually 36 Likewise, there is no basis for Teva to assert, as it did during the trial proceedings and in post-trial briefing, that there was insufficient evidence of the license agreement passing with each Agreement of Sale between the various Pfizer entities. The court finds it clear that the license transferred at each sale to the new holder of the assets and business. Two of the sale agreements even specifically list the license agreement as transferring. 0325, at 13; PTX 0326, at 10. 31 See PTX determinative, and the court must make a fact-specific decision of whether the license creates an exclusive license. at Sicom, 427 F.3d 976. In this case, it is clear that Pfizer Ireland Pharmaceuticals Co. is not an assignee because it has not received all substantial rights in the patent. It is a close question, however, whether it has sufficient rights to be considered an exclusive licensee under the Federal Circuit' s precedent. The factors cut both ways. First, Pfizer Ireland Pharmaceuticals Co. has the exclusive right to make and sell sildenafil within the United States. Second, it has the right to enforce the patent and compel the participation of other parties necessary for the suit. Both of these facts favor Pfizer Ireland Pharmaceuticals Co. being considered an exclusive licensee because it has the right to exclude and the right to enforce the patent. way. However, there are two considerations that cut the other First, Pfizer Ireland Pharmaceuticals Co. 's exclusive license is subject to Pfizer, Ltd.'s retained "Right of Conversion;" Pfizer, Ltd., at any time when there is at least 20% remaining in the patent term, may revoke the exclusive license to create a nonexclusive license for the remaining term of the patent. Second, while Pfizer Ireland Pharmaceuticals See PTX 0324, at 2-4. Co. has a right to enforce the patent, that right is subject to Pfizer, Ltd.'s primary right of enforcement, as Pfizer, Ltd. has the initial right to enforce 32 the patent and ultimate control over the litigation. Pf izer Ireland Pharmaceuticals Co. may only bring its own suit, joining Pfizer, Ltd. and Pfizer, Inc., if Pfizer, Ltd. fails to bring suit within thirty (30) days from the discovery of the infringement. See id^ at 8. On the balance, the court finds that under the Federal Circuit' s precedent, Pfizer Ireland Pharmaceuticals Co. does not have sufficient proprietary rights in the '012 patent to be joined in the suit as an exclusive licensee. Rather, the court finds that Pfizer Ireland Pharmaceuticals Co. is a nonexclusive licensee that does not meet the injury-in-fact requirement for standing. While at the time of this suit, Pfizer Ireland Pharmaceuticals Co. enjoys an exclusive license to make and sell the invention in the United States and is joined in a consensual suit to challenge infringement by Teva, these rights are ephemeral, license at any time, as Pfizer, Ltd. could revoke the exclusive and it wields ultimate control over the litigation. D. For the reasons stated above, the court FINDS that Pfizer, Inc. and Pfizer, Ltd. have standing to sue for infringement of the x012 patent, standing. while Pfizer Ireland Pharmaceuticals Co. lacks such Accordingly, the court DENIES IN PART and GRANTS IN PART Teva's Motion to Dismiss for Lack of Standing and DISMISSES Pfizer Ireland Pharmaceuticals Co. from the litigation. 33 III. Teva's Motion for Leave to File its Proposed Second Amended Answer and Counterclaim The other outstanding motion the court must take up is Teva's Motion for Leave to File its Proposed Second Amended Answer and Counterclaim ("Second Motion to Amend") , filed at the end of the third day of trial, Friday, June 17, 2011. See Docket # 345. Teva sought leave from the court to again amend its Answer and Counterclaim to change the allegations therein concerning inequitable conduct. On a briefing schedule set by the court, Pfizer responded in opposition on June 24, 2011, see Docket # 378, and Teva replied on June 27, 2011. See Docket #398. By oral order during trial, the court denied the Second Motion to Amend, entirety on July 6, 2011.38 in part, on June 29, 2011, 37 and in its The court memorialized its denial of the Second Motion to Amend in a written Order on July 7, 2011, and reserved the option to issue a written opinion detailing its ruling. See Docket # 428.39 37 See Trial Tr. 1050:20-1055:4. 38 See Trial Tr. 1176:14-25. 39 After the court denied Teva' s Second Motion to Amend at trial, Teva submitted an "Offer of Proof" with respect to the denied amendment on July 7, 2011, see Docket # 423, to which Pfizer objected on July 11, 2011. See Docket # 431. The court has reviewed the "Offer of Proof" and finds nothing therein which would lead it to reconsider its denial of the Second Motion to Amend. 34 A. On November 12, 2010, Teva filed its first Motion for Leave to File an Amended Answer and Counterclaim ("First Motion to Amend"). See Docket #55. In particular, Teva sought leave of the court to amend its Answer and Counterclaim to add the allegation that the *012 patent was invalid because Pfizer engaged in inequitable conduct during the patent's prosecution and reexamination. After the First Motion to Amend was fully briefed and argued, the court issued an opinion allowing the amendment on January 18, 2011. v. Teva Pharms. USA, op. Inc., No. 2:10cvl28, {Jan. 18, 2011), Docket #77. w [t] hough it [pleading] 9(b)." [was] a close requirements Id., specifically F. Supp. 2d Specially, question, . . . named [Federal] Rule at op. 7. court the who, The what, and Inc. , slip the court found that, of slip Pfizer, Teva ha[d] [of Civil held when the Procedure] that of met the Teva had alleged misrepresentation before the PTO and that the allegations concerning intent to deceive the PTO, initial pleading stage. while tenuous, Id^ at 7-8. were sufficient at the Thus, the court directed Teva to file its Amended Answer and Counterclaim. On June 17, Counterclaim, 2011, seeking Teva again moved to amend its Answer and to inequitable conduct claim. and Counterclaim, change its allegations regarding the Previously, in its First Amended Answer Teva alleged that 35 four individuals - Dr. Peter Ellis, an inventor of the '012 patent; Gregg C. Benson and James T. Jones, internal counsel for Pfizer; and Gerard M. O'Rourke, Pfizer's external counsel - committed inequitable prosecution of the '012 patent.40 conduct during the The substance of the inequitable conduct claim was that "Pfizer actively prosecuted the *O12 patent to include claims that the treatment would benefit a 'male animal' with ED." Pfizer, slip op. at 5. because Pfizer unpatentable; Inc. v. Teva Pharms. USA, This allegedly amounted to knew Pfizer that the withheld animal claims information Inc., No. 2:10cvl28, "inequitable conduct were overbroad from the PTO and that demonstrated the unpatentability of the claims; and Pfizer continued to espouse the animal claims in the reexamination of the patent." Id. at 5-6. As evidence of this knowledge of overbreadth, Teva pointed to the fact that Pfizer disclaimed the animal claims in the Canadian version of the '012 patent when challenged in a Canadian court. These facts are the basis of the inequitable conduct claim currently before the court.41 40 See infra note 41. 41 In its Memorandum of Law in Support of its Motion for Leave to File a Second Amended Answer and Counterclaim and again during trial, Teva admitted that it found no evidence of any wrongdoing by three of the four individuals named in the First Amended Answer and Counterclaim: Mr. Benson, Mr. Jones, and Dr. Ellis. As a result, the court entered an Order on July 1, 2011, finding insufficient evidence existed to proceed with any inequitable conduct claim against these individuals, dismissing them from the First Amended Answer and 36 Teva now seeks to amend the factual allegations concerning inequitable conduct. The content of the inequitable conduct claim is still generally the same, as it is tied to the disclaimer of the animal claims in Canada, but the individuals and the specifics of their actions are different. Teva now details two separate, but related, courses of inequitable conduct. First, Teva alleges that "Pfizer in-house attorneys Watson McMunn and Dr. Peter Richardson, and Pfizer's outside counsel Daniel DiNapoli of the Kaye Scholer law firm, engaged in inequitable conduct during the prosecution of the application for the '012 patent." Mem. of Law in Supp. of Mot. for Leave to File Proposed Second Am. Ans. & Countercl., Ex. A, Proposed Second Am. Countercl. 1 15, Docket # 347. Specifically, Mr. McMunn, Dr. Richardson, and Mr. DiNapoli were aware that a Pf izer competitor, Bayer Aktiengesellschaft and Bayer, Inc., filed a claim in Canada ("the Bayer Statement of Claim"), arguing that the claims of the Canadian patent directed to the treatment of non-human animals were invalid for overbreadth. Id^ With the knowledge that these challenged claims were identical to the claims in the *012 patent, these individuals did not disclose to the PTO that the claims in the '012 patent were overbroad. Id^ at 1 16. This information was allegedly material and should have been disclosed to the PTO, but instead Mr. McMunn, Dr. Richardson, and Mr. DiNapoli intentionally Counterclaim, and leaving Mr. O'Rourke as the sole person named in the First Amended Answer and Counterclaim. 37 See Docket # 409. withheld the information from the PTO so that the '012 patent would issue as soon as possible. id, at « 17-l8.« Teva alleges that, if the information had been disclosed, the PTO would not have allowed Claims 1-19 and 21-23 of the '012 patent to issue. Id, at fl 65. The second course of inequitable conduct Teva now alleges concerns Mr. O'Rourke, who was named in the First Amended Answer and Counterclaim, and Rudolph Hutz, both partners at the time at the law firm of Connolly Bove Lodge & Hutz ("Connolly Bove") . Id, at H 19." Connolly Bove was hired by Pfizer during the prosecution of the -012 patent to submit documents to the PTO pursuant to the duty of disclosure, id. Initially, Teva alleges, Mr. O'Rourke and Mr. Hutz committed inequitable conduct by "dumping" documents on the PTO without regard to the materiality of the documents. id, Teva alleges that this practice changed after Mr. Hutz and Mr. O'Rourke learned that the patent examiner was going to allow the claims of the '012 patent, in that they no longer submitted any disclosures to the PTO. Id, Teva states that this was inequitable conduct ac?^?? In64 °f thS Amended Counterclaim detail the specific f °« t^9ldly takSn by the individuals named in regard to the of a liscla?merayoef £at«^V"l.im - Canada, the consideration 2S-64. firm of Ratner prestia- ° 38 These because it was a system of "willful blindness," the object of which was to avoid awareness of any information that disclosed to the PTO to prevent delaying the patent. would normally be issuance of the '012 Id^ at % 20.44 B. Federal Rule pertinent part, matter of of Civil that course . "[a] . . Procedure before However, other time, it may only do requires," pleading a being so "court Fed. R. Civ. P. be should denied part of the moving party, Harvey, freely only give when 426 Mem. Second Am. Ans. UU 82-128; of Law the {4th Cir. 82-128 detail 785 when justice so "leave to amend a amendment would be in Supp. & Countercl., of Mot. Ex. A, see supra note 42. 39 2006) (emphasis added) F.2d 503, 509 {4th Cir. the specifics of the actions allegedly taken by the named individuals, herein. leave The rules there has been bad faith on the Oroweat Foods Co., Paragraphs responsive or the amendment would have been futile." 438 F.3d 404, {citing Johnson v. a 15 (a) (2) . and the Fourth Circuit has held that should 44 Again, with a "with the opposing party's written prejudicial to the opposing party, Laber v. served in if a party seeks to amend its pleading at any consent or the court's leave." that provides, party may amend its pleading once as pleading." require 15(a)(l)(A) and do not bear repeating for Leave to File Proposed Second Am. Proposed Countercl. 1986) and Foman v. Davis. 371 U.S. 178, 182 (1962)).45 Delay is another important factor for the court to consider, Foman, 371 U.S. at 182, but delay alone, without prejudice, is an insufficient reason to deny a motion to amend. Davis v. Piper Aircraft Corp. , 615 F.2d 606, 613 (4th Cir. 1980). Conversely, "prejudice resulting to the opponent by a grant of leave to amend is reason sufficient to deny amendment." Id. Overall, Foman directs the court's attention to prejudice, futility, and bad faith because such concerns are related to the protection of the system or other litigants. at 613. Davis, 615 F.2d Importantly, "conjecture about the merits of the litigation should not enter into the decision whether to allow the amendment." Id. To avoid questions of bad faith or prejudice, "a motion to amend should be made as soon as the necessity for altering the pleading becomes apparent." Deasy v. Hill, 833 F.2d 38, 41 (4th Cir. 1987) (citation and internal quotation marks omitted) . Motions to amend made on the day of or close to trial "may be particularly disruptive, and may therefore be subject to special scrutiny." id^ However, "the mere fact that an amendment is offered late in the case is not enough to bar it." Sweetheart Plastics, Inc. v. Detroit Forming, The standard for whether a motion to amend should be granted in a patent case is a matter of the relevant circuit' s law in the district where the case is pending, not that of the Federal Circuit. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1318 (Fed. Cir. 2009) . 40 inc., 743 F.2dlO39/ 1044 (4th Cir. 1984); see also Davis, 615 F.2d at 613. As regards futility, a party seeking to amend its pleadings must meet the pleading requirements for the particular cause of action it seeks to bring to avoid denial on the basis of futility. The Federal Circuit has previously held that a party asserting a claim of inequitable conduct must plead it with the specificity required by Federal Rule of Civil Procedure 9(b). Exergen Corp. v. Wal-Mart Stores, inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009); see Fed. R. civ. P. 9(b) ,46 Failure to plead a claim of inequitable conduct with the specificity required by Rule 9 (b) will result in the amendment's denial as futile. Exergen, 575 F.3d at 1331; United States ex rel. Wilson v. Kellogcr Brown & Root, Inc.. 525 F.3d 370, 376 (4th Cir. 2008) . Thus, the Federal Circuit has held that the party alleging inequitable conduct must "identify the specific who, what, when, where, and how of the material misrepresentation or omission committed" before the PTO to satisfy Rule 9 (b) . at 1328. Exergen, 575 F.3d In other words, the pleadings "must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or the falsity of the material misrepresentation, and " In patent cases before the district court, Federal Circuit law determines whether inequitable conduct has been pleaded with the particularity required. Exergen, 41 575 F.3d at 1328 (2) withheld or misrepresented this information with a specific intent to deceive the PTO." id. at 1328-29. C. As an initial question, the court must decide whether Exergen, decided in 2009, continues to state the standard for pleading inequitable conduct, or whether its holding has been modified by the Federal Circuit's recent en bane decision in Therasense, Inc. v. Beeton, Dickinson & Co., _ F.3d _, 2011 w.L. 2028255 {Fed. Cir. May 25, 2011) {en bane) ,47 In Therasense, the Federal Circuit granted rehearing en bane to consider "the problems created by the expansion and overuse of the inequitable conduct doctrine." id^ at *4. Before Therasense, a party alleging inequitable conduct had to prove by clear and convincing evidence that (1) material information was not disclosed to the PTO, and (2) the non-disclosure was done with the intent to deceive the PTO. Id^ at *6. Those two elements were then put on a sliding scale where a strong showing of one element, either materiality or intent, could override a weaker showing of the other. Id. at *7. However, because of concerns about the expansion of the use of an inequitable conduct allegation as a strategic tool, the Federal The court will discuss Therasense in greater detail later in Section VI, infra, when it decides whether Teva has made out a case of inequitable conduct on the merits. Thus, the court in this Subsection of the Opinion gives only an overview of Therasense's holding as it pertains to the requirements for pleading under Rule 42 Circuit revisited and recrafted the requirements inequitable infringer conduct. must The prove by en bane clear court and applicant knew of the reference, held for a showing of that convincing "the evidence accused that the knew that it was material, and made a deliberate decision to withhold it." Id. at *9 {emphasis added). The court also heightened the required showing for both materiality and intent to deceive, where a party alleging inequitable must now show "but-for materiality" and that the intent to deceive is "the single most reasonable inference able evidence." Id. at omitted) . In without requisite the only *10-ll one {citation and instance "but-for" may to be drawn from the internal the court causation, when quotation marks find materiality "the patentee has engaged in affirmative acts of egregious misconduct." Thus, conduct Id. at *12. it is clear that Therasense significantly heightened the requirements for a showing of inequitable conduct on the merits, but the question remains as to whether it had any effect on the pleading standards provides for that inequitable conduct under .Rule "[i]n alleging fraud or mistake, 9{b).48 Rule a party must 9 (b) state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, may be alleged generally." 48 See Jersey Asparagus 10-2849, 2011 (unpublished) W.L. and other conditions of a person's mind Fed. Farms, 2148631, R. Civ. Inc. at * P. 9 (b) . v. Rutgers 14 (D.N.J. In pleading the University, May 31, No. 2011) (noting that Therasense does not directly address the initial pleading stage). 43 intent prong, the court evaluates whether a sufficient showing has been made under the standards of Federal Rule of Civil Procedure Rule 8<a), Ashcroft v. Iqbal, which requires that U.S. a party , state 129 S. Ct. 1937, 1954 a claim for relief (2009), that is "plausible on its face." Id^ at 1949; see BellAtl. Corp. v. Twombly, 550 U.S. 544, (Rule 8(a) pleading standard clarified by 555 (2007) Iqbal) ; Adiscov, L.L.C. v. Autonomy Corp., 762 F. Supp. 2d 826, 829 (E.D. Va. 2011) (applying the Twombly and Iqbal standards in a patent case) . To comply with Rule 9 (b) , Exergen held that a party alleging inequitable conduct underlying facts "must include sufficient allegations of from which a court may reasonably infer that a specific individual (l) knew of the withheld material information or the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO." Exergen, 575 F.3d at 1328-29. After reviewing all of this precedent, Exergen still states the correct elements inequitable conduct after Therasense. the specific who, what, when, where, required for pleading A party must still "identify and misrepresentation or omission committed." 1328. the court finds that how of the Exergen, material 575 F.3d at Additionally, a party must allege intent to deceive the PTO, such that the specific intent is plausible from the facts alleged pursuant to Rule 8 (a) . However, 44 the court does note that after Therasense, a mere recitation that "X" individual, at "X" time, failed to turn over "X" information to the PTO that would have been material to the prosecution, with the specific intent to deceive the PTO, is insufficient under Rule 9(b). Instead, in alleging those elements, a party must make an initial showing from which it may be plausibly inferred that: (1) the individual knew of the information not disclosed; (2) the information not disclosed was but-for material to the prosecution of the patent; and (3) the single most Iqbal, 129 S. 2028255, at *9 the intent to deceive is likely explanation for the non-disclosure. Ct. at 1954 (plausibility); (specificity); Exergen, See Therasense, 2011 W.L. 575 F.3d at 1328 (Rule 9(b) pleading requirements). The court is mindful that at the pleading stage a party is not required to meet the clear and convincing evidence standard that applies on the merits. However, as made clear in Therasense, courts must take an active role in examining the propriety of inequitable conduct claims, Therasense, 2011 W.L. 2028255, at *9, and without incorporating allegations of the specific elements to be proven on the merits at the pleading stage, albeit at a lower standard of plausibility at this initial juncture, function. 45 courts cannot perform this D. With these standards Second Motion to Amend. in mind, the court now looks to Teva's Teva argues that its Second Motion to Amend should be granted because it meets the pleading requirements of Rule 9(b); there was no delay in filing for the amendment because Teva did so as soon as it received the pertinent information; and the amendment would not prejudice Pfizer because Pfizer had notice of the substance of the allegations a month beforehand. in Supp. of Mot. Countercl. at indefensible June 17, for Leave 21. Pfizer because 2011, to File Proposed Second Am. replies Teva had Mem. that the the delay, information of Law Ans. which much 20. as is before seriously prejudices Pfizer by forcing it to try a completely different case than the one for which it prepared. in Opp'n Mot. and for Leave to File Second Am. Ans. Mem. and Countercl. at Additionally, Pfizer argues that Teva's motion should be denied futile. Id. at 7. Beginning with considerations of delay, timing of the filing concluded on June 10, of the 2011, motion five to days the before Teva attributes fact that trial the discovery began. Teva argues that Pfizer's discovery practices delayed Teva's receipt of the information underlying the proposed amended inequitable conduct claim. In particular, privilege on February Pfizer's limited waiver of attorney-client 23, 2011, 46 Teva represents, subsequently required Teva to litigate documents relevant to the with Pfizer to force discovery of Teva Canadian disclaimer. the specifically asserts that it did not find out about the role that Dr. played until May 20, to take Dr. Pfizer June 17, and then it was forced to make a motion Richardson's deposition after discovery had concluded. responds Proposed 2011, Richardson that Second 2011, Teva knew of Amended Answer such that there Discovery has been each of fully Magistrate Judge in this case, and the individuals Counterclaim is no excuse well for this litigated before in the before late filing. the United States and the court does not rehash it here. It suffices to say that the United States Magistrate Judge, who was deeply involved in this case and well-versed in the law of discovery, specifically declined to find that Pfizer had violated any provisions of the discovery rules and denied Teva's Motion for Sanctions. Docket # of 286. whether focuses Thus, Pfizer's this learned of Second Motion to Amend. Mr. McMunn on Additionally, court does not engage with the question productions on when Teva April were the timely facts or not, underlying its 2011, in March 2011, and Mr. Hutz on May 117, Teva responded rather current that 4, 2011, 2011. Teva served a subpoena on Mr. DiNapoli. In responding to Pfizer's Motion to Quash the subpoena, # but Teva deposed Mr. O'Rourke on April 1, 8, See it was seeking to depose see Docket Mr. DiNapoli because of information Pfizer had turned over in discovery regarding 47 Mr. DiNapoli's involvement with the decision to disclaim the animal claims in Canada. in support of See Docket # 143. its The basic facts Teva offered subpoena were the same facts which underlie the current inequitable conduct claim involving Mr. DiNapoli.49 Further, it is true that Teva did not seek a deposition of Dr. Richardson until May 23, Trial # to 253 . allow for 2011, as part of its Motion to Continue the further depositions to be taken. See Docket Teva argues that it made such a motion for a deposition after discovery had concluded, because it had just received the information which revealed Mr. two Richardson's role. reasons why this should be, or Richardson's name is on the face of However, is, the the it is unclear for scenario. First, Dr. * 012 patent as one of its prosecuting attorneys, such that his role in its prosecution has been evident from the inception of the litigation in this court. 0001, June at 10, 1. 2011, Second, counsel question posed to Mr. during for Mr. Teva Richardson's conducting Richardson, the See PTX deposition deposition, in on a stated: In response to an interrogatory that Teva propounded in this lawsuit to Pfizer, in which Teva asked Pfizer to identify all the individuals associated with the filing or prosecution of other than the respect to you, a former the named Dr. Senior application inventors, for the Pfizer '012 patent, answered with Richardson that Peter C^ Richardson, Vice President and Associate General Counsel at Pfizer New York as in-house U.S. patent counsel 49 Teva again reiterated those facts in its Memorandum in Support of its Motion to Reconsider the United States Magistrate Judge's Order See Docket # 217. quashing the subpoena. 48 for Pfizer supervised the prosecution of U.S. patent application number 08/549792. Richardson dep. Thus, 30:12-31:08 (emphasis added) Teva's direct words undermine know Dr. Richardson's are among the its contention that it did not role until May 20, initial steps {as played at trial). 2011, as interrogatories in discovery. Most telling to the court, however, is Teva's argument in its brief concerning why Pfizer would not be prejudiced by the amendment: Pfizer is well allegations Answer aware detailed and of in detail in Memorandum to Teva its subpoena of in 2011 May 23, of Law in Supp. Ans. & Countercl. wondering why, revealed all of of Mot. at 21 and 2011 the Court's trial June far back as May 12, counsel, 2^, 2011 and Order and Reply its Motion for Sanctions. for Leave to File Proposed Second Am. (emphasis allegations 2011, those Motion added). The if Teva asserts on the one hand that its conduct Second Amended described 12, Pfizer's Memorandum Memorandum in Support of Mem. May Reconsider quashing Teva's its inequitable proposed Counterclaim. allegations Supporting the in Teva's concerning court is left it previously inequitable conduct as that it now with a "straight face" can also assert that it has brought this Second Motion to Amend during trial on the grounds that it information beforehand. did not have access to requisite This kind of double-talk does not fool the court, when the plain facts before it are otherwise. finds the that Teva delayed unnecessarily to Amend. 49 in filing the The court thus Second Motion However, reason to as deny recounted a motion above, to delay alone amend; rather whether prejudice flows from such delay. a is an court insufficient must determine The court finds it beyond doubt that both Pf izer and the individuals Teva seeks to name in its Second Amended Answer and Counterclaim would be seriously prejudiced were the amendment to be allowed. charge against an individual, fraud. It can be a Inequitable conduct is a serious indeed it amounts to an allegation of career-ending against whom it is alleged, finding by the court if proven on the merits. considering whether to allow a claim of for Thus, those a court inequitable conduct to go forward must strictly enforce the pleading requirements of Rule 9 (b) to protect those named in such an accusation. In particular, the court must consider whether allowing the amendment would give these individuals time to seek out and engage their own counsel, so desire. and In this case, allowing Teva yet again to amend its Answer Counterclaim, allegations this against Mr. time after Hutz, Mr. the trial was ongoing, DiNapoli, Mr. McMunn, Richardson would prejudice each of these individuals.50 to fathom if they how these individuals would have time to add and Mr. It is hard to prepare sufficiently for trial, when they are added once the trial has begun.S1 50 Because Mr. O'Rourke was named in the First Amended Answer and Counterclaim, these concerns do not pertain to him. 51 See infra notes 52 and 53 and accompanying text. 50 Furthermore, to allow amendment at this late date would severely prejudice Pfizer. First and foremost, to allow amendment to add a claim of inequitable conduct against Mr. DiNapoli could likely have necessitated a declaration of a mistrial, because it would require Mr. DiNapoli to withdraw from representation of Pfizer after serving as one of two lead counsel since the inception of this suit.52 Second, amendment at this late date would require Pfizer to try a different case than it had prepared for, and a different case than was memorialized in the Final Pretrial Order, see Docket # 276, which Order governs the parties and the court regarding the remaining issues for trial as well as the presentation of evidence at trial on these issues. While Teva asserts that Pfizer already knew of the substance of the inequitable conduct allegations in the Proposed Second Amended Answer and Counterclaim, this assertion has no bearing on whether Pfizer would be prejudiced, as it would still have to try a newly proposed case on inequitable conduct, simply because Teva did not seek to amend its Answer and Counterclaim in an timely manner, i.e., when it initially received the information. Thus, the court finds that Teva's Second Motion to Amend should be denied in its entirety because to allow amendment at this juncture would severely 52 Teva has stated that it does not seek the disqualification of Mr. DiNapoli, even if the Proposed Second Amended Answer and Counterclaim were filed. The court finds this assertion, that Mr. DiNapoli could be the subject of a claim of fraud and still act as co-lead counsel in the case, to be incredible. 51 prejudice both Pfizer and the individuals named in the Proposed Second Amended Answer and Counterclaim.53 Beyond the issue of prejudice, the court Motion to Amend should be denied for futility. above, finds that Teva's As the court held Teva must make a plausible showing with the specificity required by Rule 9 (b) : (1) that the individual alleged knew of the information not disclosed; (2) that the information disclosed was but-for material to the prosecution of the patent; and (3) the intent to deceive is non-disclosure.54 reasons. First, the single Teva has most likely explanation for the failed to meet this standard for two Teva has failed to make a plausible showing that two of the individuals that it named had any duty of disclosure to the PTO such that they could have had any intent to deceive the PTO. Neither Mr. McMunn nor Mr. DiNapoli is admitted to practice before the PTO and thus can have no duty of disclosure thereto. McMunn dep. 16:13-16 (as played at trial); Mem. in Opp'n Mot. for Leave to File Second Am. Ans. and Countercl. at 12. Mr. McMunn is a patent agent registered in the United Kingdom, while Mr. DiNapoli is a litigator 53 This ruling does not even take into account the effect on the court's docket, as the filing of a Second Amended Answer and Counterclaim during trial would clearly have necessitated, at minimum, a continuance, and, most likely, a mistrial. See supra note 52 and accompanying text. To reschedule a long-set patent trial of this magnitude would wreak havoc on a court's trial docket and cause hardship and additional costs to other litigants. 54 See supra at 45 {citing Iqbal, 129 S. Ct. at 1954; Therasense, 2011 W.L. 2028255, at *9; Exergen, 575 F.3d at 1328) . 52 in the United States. Am. Ans. Mem. and Countercl. at in Opp'n Mot. 12. Neither prosecuting attorneys of the %012 patent. Teva has failed to meet for Leave to File Second Exergen's of them were See PTX 0001. requirement that listed as Therefore, the pleading provide a "factual basis to infer that any specific individual, who owed a duty of disclosure in prosecuting the ['012] patent" knew of any material information that was not disclosed to the PTO. 575 F.3dat 1330 (emphasis added) . Exergen, Moreover, a failure to prove that an individual owed a duty of candor to the PTO is likewise a failure to make a showing of Second, and because Teva has materiality of specific intent to deceive the PTO. importantly, Teva's amendment is also futile failed to make any plausible showing of but-for the information not disclosed to the PTO. With respect to Mr. Hutz and Mr. O' Rourke55 and Teva' s allegation that they failed to turn over the Bayer Statement of Claim to the PTO, Teva has made no showing that such statement of claim was but-for material to the issuance of the *012 patent. Even at the pleading stage, the court cannot imagine how a generalized complaint against Pf izer that its Canadian patent was "covetous" under Canadian law could have had any bearing whatsoever on the issuance of the '012 patent under the 55 This non-disclosure and materiality issue with respect to Mr. O'Rourke will be discussed further in Section VI, infra, concerning inequitable conduct on the merits of the First Amended Answer and Counterclaim. 53 law of the United States. referred to as "DX") and Dr. 2018, Richardson, See Defendant's Exhibit at 7. As to Mr. (hereinafter DiNapoli, Mr. McMunn, given that the disclaimer in Canada was done pursuant to Canadian law after the '012 patent issued, 56 it is difficult to see any materiality such disclaimer would have in the United States patent prosecution. The disclaimer in Canada was done in response to the Bayer Statement of Claim on the belief that the animal claims were too broad under Canadian law. The disclaimer had no relation to overbreadth under United States law. Further, the disclaimer in Canada occurred after the '012 patent issued in the United States, such that at the time the Canadian Disclaimer was made, there was no duty of disclosure to the PTO; prosecution of the '012 patent had ceased. expert in patent stating the See Trial Tr. law duty to 1121:5-7 and procedure, disclose Cameron Weiffenbach, applied application to the issue of the patent.)" denies Teva's proposes is {testimony of Teva's from the filing Esq., of the Therefore, the court also Second Motion to Amend because the amendment it futile. 56 The '012 patent issued October 22, 2002, see PTX 0001, while the disclaimer in Canada was filed November 14, 2002. See PTX 817. 57 The reexamination September 23, 2003, of the '012 patent did and is not at issue here. 54 not begin until E. For the reasons stated above and on the record during trial, the court DENIES Teva's Motion for Leave to File its Proposed Second Amended Answer and Counterclaim on the grounds of both prejudice and futility. IV. Obviousness Teva makes three arguments concerning the validity of the '012 patent, the first of which is that the '012 patent's claims are obvious in light of the prior art and earlier-issued Pfizer patents. In particular, Teva argues that the prior art, in view of EP '756, either alone or combined with EP v004 and the '534 patent, makes the claims of the '012 patent obvious to a person ordinarily skilled in the art to ("POSITA"), treat ED. such that a POSITA would try using sildenafil Pfizer disagrees and argues that the prior art references do not teach that oral administration of sildenafil would have any Pfizer expectation argues that of success secondary in treating considerations ED. of Additionally, non-obviousness demonstrate that the invention was not obvious. A. At May 13, the time of the application for the '012 patent, 1994,58 the treatment of ED was still in a nascent stage, but The actual March 4, 1996, 58 is May 13, application in the United States was filed on PTX 0004, but the priority date of the application 1994. PTX 0001. 55 there was a sense of building momentum in the function research. In 1994, involved the injection of referred as to the cutting vasodilators intercavernosal purpose, most prostaglandin El, commonly edge injections erectile treatment directly into administered into the corpus cavenosum. this field of for ED the penis, because they were Each of the drugs used for papaverine, phentolamine, either alone or in combination, treat other conditions such as hypertension.59 and was also used to All of these drugs were known to relax smooth muscle tissue and, when injected directly into the penis, attributed the produced erection. effectiveness of the Researchers injections at to the their time being administered locally, which resulted in a high concentration of the drug in the penis and avoided systemic Krane, et al., 1648, 1654 Medical Progress: (1989), PTX 0029. side Impotence, When effects. 321 New Eng. J. administered however, these drugs had no effect on treating ED. and Pfizer's experts induced ED when testified, administered Robert J. Med. systemically, Indeed, as Teva' s many hypertension drugs actually systemically. See, e.g., Serge Carrier, et al., Erectile Dysfunction, 23 Endocrinology & Metabolism 59 In their normal use for other conditions, such as hypertension, these drugs were systemically, not locally, administered. Systemic administration refers to administration of the medicine such that it reaches the entire body, for example by oral or intravenous routes. 56 Clinics of N. Impotence, Am. 773 (1994), 321 New Eng. J. PTX Med. 0046; 1648, Krane, Medical Progress: PTX 0029. Because of the drawbacks of injection treatments, including pain, scarring, and patient preference, researchers at the time were actively trying to develop substances that could be applied topically to the penis, such as a cream, which would then diffuse to reach the smooth muscle tissue. For example, one researcher applied nitroglycerine, normally used systemically to treat hypertension, topically to the penis and found that it induced erection. A. Owen et al., Topical Nitroglycerine: Impotence, 141 J. Urology 546 (1989), James A Potential Treatment for PTX 0042. Indeed, Pfizer's impotence project in the late 1980s and early 1990s was focused on development of such a topical treatment, testing Pfizer's known cardiovascular drugs to determine whether they induced erections upon topical application to the penis. In were oral treatments that were tried for ED, but they had little efficacy. For example, addition to urologists the injection See PTX 0188. would compound found in plants, treatments, prescribe there yohimbine, a for the treatment of ED. thought to work on the central nervous system, but, psychoactive Yohimbine was as Teva's and Pfizer's experts agreed,60 yohimbine was not effective in the general population. In addition, doctors sometimes prescribed tradazone, 60 See supra note 11. 57 a drug used to treat psychiatric conditions, of ED. Overall, Again, both experts agreed that for the oral treatment it was not effective. the December 1992 National Institutes of Health ("NIH") Consensus Statement on Impotence summarized the state of the art with respect to treatment of ED, noting that further research was required to " [d]evelop[] . . . new therapies, including pharmacologic agents, and with an emphasis on oral agents, that may address the cause of male erectile dysfunction with greater specificity." PTX 0018, at 27. At the same time as these treatments were being administered, researchers were engaged in further studies to identify the causes of ED and to learn more about erectile function generally. The early 1990s were a period of gathering momentum when researchers began to build a base of knowledge previously absent. about erectile function that had been Before 1990, the scientific community was aware that that corpus cavernosum of the penis was made up of smooth muscle, the function of which was essential for an erection. was known that nitric oxide ("NO") By 1990, it is the chemical messenger in the body that mediates smooth muscle relaxation by activating the enzyme guanylate cyclase to form cGMP. DX 2258A. cGMP PDEs break down cGMP to GMP. It was also known that Additionally, researchers had isolated the PDE enzymes in human corpus cavernosum and reported that it contained PDE3, PDE4, and PDE5. 58 Akmal Taher, et al., Phosphodiesterase Activity in Human Cavernous Tissue and the Effect of Various Selective Inhibitors, 2172A. 149 J. Urology 285A (1993), DX Thus, after 1990, researchers conducted experiments aimed at determining the chemical pathway involved in the relaxation of smooth muscle tissue in the corpus cavernosum to better understand erectile function.61 First, in 1990, Dr. Louis Ignarro reported the results of an in vitro experiment on rabbit corpus cavernosum tissue strips mounted in an organ bath.62 Louis L. Ignarro, et al. , Nitric Oxide and Cyclic GMP Formation Upon Electrical Field Stimulation Cause Relaxation of Corpus Cavernosum Smooth Muscle, 170 Biochemical & Biophysical Res. Comm. 843 (1990), PTX 0073." Once the rabbit tissue strips were stretched and mounted and a pressure transducer was attached, the adrenergic and cholinergic nerve systems were blocked using chemicals added to the bath, and the tissue was stimulated by using a high-volt electrical current. The experiment itself involved 61 This Opinion does not discuss in detail every prior art reference presented at trial but instead focuses on the three references Teva relies on for its obviousness argument. However, the court has reviewed and considered all of the references in forming its opinion as to what a POSITA would have understood at the time. 62 An organ bath is an artificial laboratory environment where tissue strips are mounted in an artificial blood solution and oxygen is bubbled into the solution. 63 Teva does not specifically rely on Ignarro for its obviousness argument, but its discussion is warranted as it sets the groundwork for later studies. See supra note 61. 59 adding chemicals to the organ bath to inhibit the production of NO, which prevented stimulation, messenger smooth muscle relaxation thereby confirming that NO is for such relaxation. upon electrical indeed the chemical In addition, Ignarro added an inhibitor of guanylate cyclase, which in turn prevented smooth muscle relaxation upon electrical stimulation, confirming guanylate cyclase and cGMP in such relaxation. the role of Ignarro concluded that the study results confirmed that smooth muscle relaxation is mediated by the NANC nerve system and its formation of NO. Id^ at 848. Shortly thereafter, Dr. Jacob Rajfer reported on another in vitro experiment on human corpus cavernosum tissue strips mounted in an organ bath. Jacob Rajfer, et al. , Nitric Oxide as a Mediator of Relaxation of the Corpus Cavernosum in Response to Nonadrenergic, Noncholinergic Neurotransmission, 326 New Eng. J. Med. 90 (1992), PTX 0077. As in the previous experiment, the adrenergic and cholinergic nervous systems were blocked using chemicals, the tissue was stimulated by using a high-volt electrical current, and various inhibitors of NO and guanylate cyclase were added,. This time, however, zaprinast, a known inhibitor of cGMP PDE, was added to the organ bath, effect of and the researchers observed that it potentiated the smooth muscle relaxation 60 in response to electrical stimulation.64 This experiment supported the conclusion that by inhibiting the breakdown relaxation is enhanced. 65 confirmed the role of of cGMP Rajfer by cGMP concluded the NANC NO pathway erections and suggested that ¢[d]efects in case some forms of impotence." Id. PDEs, at smooth muscle that his research in the mediation of [the NANC] pathway may 90. In 1993, Dr. Margaret Bush published her doctoral thesis, which summarized the findings and methods behind the previous experiments described in the Ignarro conclusions. " and Rajfer Margaret A. articles Bush, The and drew further Role of the L-Arginine-Nitric-Oxide-Cyclic GMP Pathway in Relaxation of Corpus Cavernosum Smooth conclusion was Muscle the (1993), PTX L-arginine-nitric 0070. Bush's oxide-cGMP overall pathway is responsible for the relaxation of the smooth muscle in the corpus 64 Potent iat ion refers to when two signals act in concert in a chemical pathway and their cumulative effect on the pathway is greater than would be expected by simply adding their separate effects together. See Trial Tr. 138:1-16. 65 Another researcher conducted a similar experiment in vivo using anesthetized dogs. Flavio Trigo-Rocha, et al.f Nitric Oxide and cGMP: Mediators of Pelvic Nerve-Stimulated Erection in Dogs, 264 Am. J. Physiology H419 (1993), PTX 0080. Zaprinast was administered to the dog by intercavernosal injection; researchers then electrically stimulated the dog's pelvic nerve, observing that zaprinast multiplied the effects of smooth muscle relaxation. Id^ at H420. However, zaprinast only had this effect when administered at a very high dose. Id. 66 Dr. Bush was a doctoral research student in Dr. Ignarro's and Dr. Rajfer's laboratory and was a co-author on the previously mentioned articles. See PTX 0073; PTX 0077. 61 cavernosum, though she cautioned that "penile erection is a complex neurovascular event, understood." the mechanism of Id, at 7. which is not clearly Thus, she concluded that her research had set the groundwork for future studies of erectile function and ED. Id, at 161. m particular, Bush suggested nitrovasodilators by injection to treat ED, the use of and commented that -clinical development of a specific cyclic GMP phosphodiesterase inhibitor should be considered for the treatment of impotence" because ¢ [a] specific cyclic GMP phosphodiesterase inhibitor could enhance corporal smooth muscle relaxation by inhibiting the breakdown of cyclic GMP, thus having a direct and specific effect on the L-arginine-nitric oxide-cGMP mediated relaxation process." Id. at 159-60. Finally, Dr. Kenneth Murray published a review article which recounted recent research on PDE5 inhibitors. Kenneth J. Murray, py^sphodiesterase VA Inhibitors, 6 D. N. & P. 150 (1993), PTX 0076. in particular, Murray identifies the location of PDEVA in the body, describes known PDEVA inhibitors, and discusses those inhibitors effects in the body.67 PDEVA is a cGMP specific PDE, which is located " PDE5 and PDEV refer to the same enzyme. Previously roman numerals were used to refer to the classes of PDEs, but now Arabic numbers are standard. Trial Tr. 311:22-312:1 (Corbin testimony) The A in PDEVA refers to the fact that the article is about *°*-«tinal PDEV, as retinal PDEV is PDEVBkc. Murray, Phosphodiesterase Vft Inhibitors, 6 D. N. & P. at 151; Trial Tr. 311:19-21. 62 in the lung, spleen, platelets, and various smooth muscle tissues, giving it, Murray states, "limited tissue distribution." 150-151. £L « Murray then discusses zaprinast as a PDEV, inhibitor, though he notes that its selectivity between POEV, and PDKI has not been well-established. Id, at 151. Zaprinast was known to inhibit PDEV> and cause relaxation in a number of smooth muscle tissues, including human corpus cavernosum. Id, at 152-53." In evaluating the potential therapeutic uses of these inhibitors, Murray concluded chat Ms]mooth muscle relaxation appears to be the most promising Of the potential uses of PDEV. inhibitors, and possible therapeutic uses could include vasodilation. bronchodilation, modulation of gastrointestinal motility and treatment of impotence." X54-55. Id, « Murray states the selective action of these inhibitors »oould be achieved" in tissues with a high level of guanylate cyclase activity, though he makes no mention of any such tissues. Id, at 155. Therefore, in May 1994, a POSITA would have known that in vitro experiments taught that the relaxation of the smooth muscle tissue in the corpus cavernosum was controlled by the MANC nerve system with IT^^T^eThat the only in through systematic ^inistrat-n pigs to in 1993. study its ¢« ¢='" ^^^^ °n See PTX 0076; PTX 0080. 63 Mrray, & p. at 153, or in humans N0 as a mediator to stimulate the production of cGMP. Further, a POSITA would have understood that cGMP PDE breaks down cGMP and the inhibition of CGMP PDE increases the production of cGMP. Finally, a POSITA would have been aware that Bush and Murray had suggested that a specific cGMP PDE inhibitor could potentially be useful in the treatment of impotence. B. A patent is presumed valid, thus «[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity." 35 U.S.C. i 282 (2006). This burden exists at every stage of the litigation and does not shift. Canon computer Svs., 7 ¢ ^ ttn-Kote Int'1, Inc., 134 F.3d 1085, 1088 (Fed. Cir. 1998). invalidity is a defense to infringement that must be proven by clear and convincing evidence. Microsoft Corp. v. 141 Ltd. p,ship> _a.S. __, 131 S. Ct. 2238, 2252 (2011) (reaffirming that the clear and convincing evidence standard applies in all cases involving arguments of invalidity). 69 Pfizer cites to Tokai Corp. v. Easton Enterprises, Inc., 632 F.3d 1358 1367 (Fed. Cir. 2011) , for the rule that when a party attacking tne vaUdity of the patent relies only on prior art that was already consTdertd'by the PTO, that party has an "enhanced burden" to prove obviousness. It is unclear whether this decision survives under the Supreme Court's recent holding in Microsoft, so the court does not apply any enhanced burden to Teva, even though it appears that all of the prior art on which Teva relies was before the PTO. See infra, note 78 Furthermore, as this court holds herein that Teva cannot meet its burden to show invalidity by clear and convincing evidence, consideration of such an enhanced burden is unnecessary. 64 defense of invalidity on the basis of obviousness is codified in the Patent Act, which provides that a patent shall not issue "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. | 103 (a) (2006) . obviousness then is focused on the scope of the patent in suit, not the patentee' s goal in creating the patent. (2007). «** mt'l Co. v. Teleflex, Inc.,, 550 U.S. 398, 419 The supreme Court has set forth the factors a court must consider when evaluating a claim of obviousness: Under § 103, the give light to the circumstances surrounding the g «? hhe subiect matter sought to be patented. As indicia o"f o^ious^ess'or nonobviousness, these inquiries may have relevancy. v. John Dee- ~ (emphasis added) . inquiry. «f Kansas City, 383 U.S. 1. 17-18 (1966. This is a flexible, commonsense, and broad KSR, 550 U.S. at 415 (disavowing the Federal Circuit's restrictive "teaching, suggestion, or motivation" test) , but see ~~.w L Gamble ~ - " " "»- ¢- ^°- 566 F'3d 989' "4 (Fed. Cir. 2009) (stating that 65 the "teaching, suggestion or motivation" test provides helpful insight into the obviousness question so long as it is not applied rigidly" (citing KSR, 550 U.S. at 419)) ¢ X patent is obvious, if it is a -predictable use of prior art elements according to their established functions." at 417. KSR, =50 U.S. When a known problem exists "and there are a finite number of identified predictable solutions, a person of ordinary skill has gOod reason to pursue the known options .... land, li, f this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense." Id, « 421. thus, is whether the invention was "obvious to try." The issue, £L «» Federal Circuit has held that a way of analyzing this question is whether ¢. skiHed artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so." 994 M.Hr, Cir. Proctor_^Gamble, 566 F.3d at ¢ V- ^otex. inc., 480 F.3d 1348, 1361 (Fed. 2007)) . A patent is not obvious, however, if it was "obvious to explore a new technology or general approach . . . (but) the prior art gave only general guidance as to the particular form of the claimed invention or how to achieve it." Proctor s Gamble., 566 F.3d 989 (internal quotation marks omitted) (quoting In re O'Farrell, 853F.2d 66 894, 903 (Fed. dr. 1988)); see AbbofM.abs. v. Sandoz, 544 F.3d 1341, 1352 (Fed. Cir. 2008) ("Slight reflection suggests, we think, that there is usually an element of obviousness to try' in any research endeavor, that is not undertaken with complete blindness but rather with some semblance of a chance of success." (citing Publicationof Tomlinson, 363 F.2d 928, 931 (1966))). Furthermore, if the prior art "teaches away from combining certain known elements, discovery of a successful means of combining them is more likely to be nonobvious." KSR, 550 U.S. at 416. In determining the teaching of the prior art, the court must be aware of and avoid any distortion of hindsight. Id, at 421. Additionally, a "judge must not pick and choose isolated elements from the prior art and combine them so as to yield the invention in question if such combination would not have been obvious at the time of the invention." Panduit Corp., 475 U.S. 809, 810 (1986). Dennison Mfq. Co. v, Overall, the court must keep in mind that obviousness is a fact-specific inquiry where Melach case must be decided in its particular context, including the characteristics of the science or technology, advance, the nature of the known choices, its state of the specificity or generality of the prior art, and the predictability of results in the area of interest." Abbott Labs., 544 F.3d at 1352; see id, at 1351-52 ("The evaluation of choices made by a skilled scientist, when such choices lead to the desired result, is a challenge to judicial 67 understanding of ho» technical advance is achieved in the particular field of science of technology."). If a party challenging a patent makes out a prima facie case of obviousness, the party defending the patent may offer evidence of secondary considerations of non-obviousness, though secondary considerations of non-obviousness may not overcome a strong prima facie case. 2010). wy^s v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. Such secondary considerations are, "commercial success, long felt but unsolved needs, others." Graham, 383 U.S. 17-18. among others, [and] failure of The patentee must show, however, that there is a nexus between the commercial success of the product and the claims in the patent. "A prima facie case of nexus is made out when the patentee shows both that there is commercial success, and that the product that is commercially successful is the invention disclosed and claimed in the patent." Comm'n, 598 F.3d 1294, "commercial success 1311 or Crocs, Inc. v. Int'l Trade (Fed. Cir. other 2010). secondary In other words, considerations may presumptively be attributed to the patented invention only where the marketed product embodies the claimed features and is coextensive with them." Muniauction, Inc. v. Thomson Corp., 523 F.3d 1318, 1328 (Fed. Cir. 2008) (internal quotation marks omitted) (citing Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311-12 (Fed. Cir. 2006)). Once this prima face nexus is demonstrated, the burden shifts to the 68 party challenging the patent to prove that such a nexus does not exist. Id. c. Given the foregoing standards for obviousness, this court first looks to the Graham factors and evaluates whether Teva has shown by clear and convincing evidence that the ' 012 patent is obvious. Teva argues that the prior art, especially the Rajfer, Bush, and Murray studies, together with the EP '756, EP '004, and '534 patents,70 renders the claims of the '012 patent obvious. In particular, Teva argues that given a POSITA' s underlying knowledge of the role of cGMP in the erectile process, and the fact that these disclosed potent and selective PDE5 inhibitors, try those inhibitors to treat ED. three patents it was obvious to Pfizer counters that there is nothing in the prior art that teaches that an oral treatment with a PDE5 inhibitor would be effective for ED, when the details of the erectile process were unknown, the causes of ED were not established, and no in vivo testing had been done. Pfizer argues, to the contrary, that the prior art taught away from the use of sildenafil because other vasodilators actually caused ED when administered systemically. 70 Each of these patents is discussed, 69 supra, in Section I.e. This court has already set out the parameters of the first Graham factor, the "scope and content of the prior art,"71 and now turns to the question of what is the "level of ordinary skill in the pertinent art." Graham, 383 U.S. at 17. Both Teva's and Pfizer's experts offered a definition of what would constitute a POSITA in this case. The consensus was that a POSITA would have knowledge and skill in several scientific disciplines scientists with Ph.D.s chemistry, pharmacology, or and M.D.s would with and urology. comprise knowledge a team of of medicinal See Trial Tr. 140:17-25 (Corbin testimony) ; 891:25-892:8 (Goldstein testimony) . The POSITA would have knowledge of the mechanism of erection and detumescence, ED and its treatment, and PDEs and PDE inhibitors. The POSITA would certainly be aware of the prior art recounted above and presented at trial. The court agrees with this definition and sees no way in which it should be changed. The final Graham factor, and the key inquiry, is a determination of the "differences between the prior art and the claims at issue." Graham, 383 U.S. at 17. In contrast to many cases involving obviousness, there is no one reference that speaks to all of the elements of the claims. Claims 25 and 26 of the >012 patent claim a number of all of which are potent and selective compounds, inhibitors of cGMP PDE, for the oral treatment of ED in a male human. 71 See supra Section IV.A. 70 >012 patent, col. 1, lines 46-50, PTX 0001. Two prior patents, EP *756 and EP '004, disclose all of the compounds that are the basis of the method claims at issue in the '012 patent.72 and EP '004 both disclose that the Further, EP '756 claimed compounds are vasodilators, which are highly potent and selective for cGMP PDEs73 and elevate CGMP levels. DX 2006.74 EP '756, 3: 1-14, DX 2074; EP '004, 2:1-14, Finally, EP '756 and EP '004 disclose that the compounds may be administered orally. 9:11-15, EP '756, 7:23-32, DX 2074; EP '004, DX 2006. The '534 patent is the counterpart in the United States to EP »756, and its specification is substantially the same. especially preferred compounds of the '534 patent, sildenafil, are in Claims 25 and 26 of the '012 patent. Five of the including During the prosecution of the '534 patent, Dr. Ellis submitted an affidavit to the PTO on March 23, PDE5 over PDE3 1992, which gave selectivity information for for numerous compounds, including twenty of the 72 EP l756, DX 2074, discloses sildenafil and four other compounds of Claim 25, while EP '004, DX 2006, discloses the other four. See supra Section I.C. 73 These compounds are all potent and selective inhibitors of cGMP PDEs, both PDE1 and PDE5, over PDE3. 74 EP '004 additionally contained a table with selectivity and potency of thirteen compounds in EP '004 for PDES over PDE3. EP '004, 26:1-35, DX 2006; see infra note 75. 71 .pounds of the '534 patent. DX 2240." com1 Dr. Ellis'a affidavit disclosed that these twenty compounds of the '534 patent, including Bildenafil, were highly potent and selective for PDE5 over PDE3.76 Each of these prior patents discloses that the compounds are useful in the treatment of various cardiovascular illnesses, including angina and hypertension, as well as for the treatment of bronchitis and irritable bowel syndrome, among others, through the elevation of cGMP levels; ED was not included. Thus, from the patents, a POSITA would be aware of the existence of potent and selective cGMP PDE inhibitors that could enhance cGMP levels. In addition, a POSITA would understand that twenty of the compounds in the '534 patent and thirteen compounds in EP '004 were potent and selective inhibitors of PDE5 in particular. The other prior art, discusses the chemical from Rajfer, messengers for demonstrated in tissue bath experiments. Bush, and Murray, erectile function, all as In particular, Rajfer and Bush document their research into the importance of NO as the chemical messenger for the corpus cavernosum by acting as a signaling agent ¢ Dr Corbin, Teva's expert, testified that a POSITA would have understood calcium/calmodulin independent cyclic GMP PDE to mean PDE5 and cGMP-inhibited cAMP PDE to mean PDE3 . Trial Tr. 332:1-8, 13-14. 76 This affidavit and the table in EP '004 did not disclose the compounds' selectivity and potency for PDE5 over PDE1, as they only compared selectivity between calcium/calmodulin independent cyclic GMP PDE and cGMP-inhibited cAMP PDE. no See supra note 75. tor guanylate cyclase and cGMP. Murray adds to this discourse by summarising research on PDE5 and PDE5 inhibitors. PDE, it inhibits the production of cGMP. As PDE5 is a cGMP If a substance in turn inhibits PDE5, it boosts production of cGMP and thereby enhances smooth muscle relaxation. Through Rajfer, Bush, and Murray, a POSITA would have been aware that zaprinast was a cGMP PDE inhibitor and that research had shown that it potentiated the relaxation of smooth muscle tissue stimulated with electric current. None of these references, however, gives any relevant data on in vivo studies in humans for ED. The one in vivo study in humans of zaprinast was for the treatment of asthma and the relaxation of the smooth muscle of the lungs. Murray, xnhibitors, 6 D. H. * P. at 154, PTX 0076. Phosphodiesterase V, Further, the one in vivo study in dogs testing zaprinasfs effect on erections showed that it was only effective at extremely high doses when injected into the corpus cavernosum. Trigo-Rocha, Ni trie, oxide and cGMP, 264 Am. J. Physiology H419. PTX 0080." Some of the articles, particularly those of Bush and Murray, did, however, suggest that a cGMP PDE inhibitor could be used to treat ED, though there was no particular discussion of an oral treatment. 77 See supra note 65. 73 Against all of these factors, the court assesses obviousness.78 In this case, it is helpful to consider whether the prior art provided motivation to try sildenafil for the treatment of ED and whether it predicted a reasonable expectation of success in doing so; though the court notes that pursuant to KSR, it uses this analysis only as a tool to bring out evidence of obviousness and not for setting rigid requirements. Teva argues that these articles and the patents that disclosed potent cGMP PDE inhibitors made it "obvious to try" the use of sildenafil, or another compound in Claims 25 and 26 of the '012 patent, for the treatment of ED. As evidence of how a POSITA would connect the dots, Teva points to a handwritten note by Dr. Peter Ringrose, then head of Pfizer drug discovery, at the top of a copy of Rajfer' s article,79 which article and note were circulated to other members of the Pfizer team.80 The note states: "Should we not try The court does note that all of the references relied on by Teva were disclosed and considered by to the PTO, see *012 patent, at 2-7, PTX 0001; Teva Post-Trial Findings of Fact and Conclusions of Law on Standing and Validity H 33 0, Docket #411. Teva could not establish with particularity when Dr. Ringrose wrote the notation and circulated the article, but Dr. Ringrose testified that it was likely soon after the article was published. Ringrose dep. 124:8-20 (as played at trial). 80 Teva references other contemporaneous evidence as illustrations of what a POSITA would have understood at the time. In particular, Teva presented evidence from Dr. Jackie Corbin, its expert in the fields of pharmacology and enzymology, who discovered PDE5 in 1976. Dr. Corbin testified that when he saw the Rajfer article, he understood that PDE5 inhibitors could be used to treat ED. The court finds such evidence interesting, though not highly probative, first 74 out UK 92,480 [sildenafil] s/e's?" .81 DX 2109. in impotence? Have we seen any beneficial Pfizer argues in opposition that the disclosure of the compounds and the prior art references is insufficient to demonstrate that there would be any motivation to try sildenafil, or any other cGMP PDE inhibitor, because there was not enough information on how such a compound would work in the body. In KSR, the Supreme Court held that a patent is likely obvious when it is obvious to try a combination of elements from prior art. KSR, 550 U.S. at 421. some motivation to try, The question is not whether there would be or even substantial motivation to try, but rather whether it would have been obvious to a POSITA to try, as judged on a clear and convincing evidence standard. the negative. The answer here is in The court finds that it certainly was not so obvious as Teva contends during the pre-Viagra era of the early to mid-1990' s. First, Teva has overstated the level of knowledge concerning erectile function during experiments, the relevant time period. While among them those of Ignarro and Rajfer, several had reported because the evidence offered concerning the letters Dr. Corbin wrote to Vanderbilt University and GlaxoSmithKline were not in the public domain such that a POSITA would be aware of them, see DX 2275; DX 2455; DX 2267; and, second, because the court's task is to determine what a POSITA would have understood, not what one particular scientist understood. The court is also mindful that Dr. Corbin's primary area of research for his life's work is in PDEs. Trial Tr 110:22-25. 81 Dr. Ringrose Ringrose dep. testified 123:22-23 that "s/e's" meant (as played at trial). 75 "side effects." findings that NO was the messenger from the NANC nerve system to the smooth muscle tissue and that cGMP caused smooth muscle relaxation, all of those experiments were conducted in a tissue bath environment with artificially contracted tissue, artificial blood, and a high level of oxygen. This is not to discount the scientific validity and importance of tissue bath experiments, but rather to note their limitation in predicting results in the human body and to recognize that they are often only an initial step in conducting research. The Federal Circuit has noted that motivation and predictability in the chemical arts are particularly difficult, Procter & Gamble, 566 F.3d at 996, because of the difference between in vitro data and in vivo behavior in the human body. Abbott Labs. , 544 F.3d at 1348. Thus, while multiple experiments noted the significance of NO and cGMP, it is important to remember that such experiments were in vitro with all other systems besides the NANC nerve system blocked. Thus, in May 1994, a POSITA lacked substantive knowledge about the function of the erectile system and whether other factors outside of the NANC nerve system played a significant role in the relaxation of the corpus cavernosum. Second, again Teva overestimates the import of the function of zaprinast in the in vitro experiments. potentiated smooth muscle precontracted tissue in relaxation vitro did 76 The fact that zaprinast in electrically stimulated not necessarily give any information about its function in vivo. This is borne out by Dr. Trigo-Rocha's experiment with anesthetized dogs where only a veryhigh dose of zaprinast injected intercavernosally had any effect on smooth muscle relaxation. PTX 0080.82 Thus, such experimental results informed a POSITA in 1994 that zaprinast had an effect on smooth muscle relaxation in vitro, which effect had not yet been repeated in vivo at a sustainable dose in animals or humans. Third, the fact that Murray and Bush suggested that a selective cGMP PDE or PDE5 inhibitor could be used to treat ED provides only some motivation to try such a known inhibitor. expected that researchers will use While it is to be conditional language such as "could" or "potentially" in suggesting avenues of future research, the mere fact that the course of treatment was suggested is not sufficient to demonstrate that it would have been obvious to try. Here in particular, causes of ED. in May 1994, there was little knowledge of the Rajfer suggested that perhaps a defect in the pathway caused ED, but that could have involved either a lack of NO, guanylate cyclase, or cGMP, or conversely an overabundance of cGMP PDE. Indeed, the 1992 NIH Consensus Statement on Impotence concludes that "important information on many aspects of erectile dysfunction is lacking; major research efforts are essential to the improvement of our understanding of the appropriate 82 See supra note 65. 77 diagnostic assessments and treatments of this condition." PTX 0018, at 29. Thus, a POSITA could have been motivated to try a cGMP PDE inhibitor to treat ED, but such motivation would seem to come more from a willingness to try a "longshot" rather than from the treatment being the obvious logical step. Even if a POSITA was motivated to try one of the compounds in EP '756 or EP '004, success in the he would have had no reasonable expectation of endeavor. Teva again argues experiments showing the effect of zaprinast, that the in vitro the suggestion that a cGMP PDE inhibitor could treat ED, and the number of known selective and potent cGMP PDE inhibitors from EP '756 and EP '004, would give rise to a reasonable probability of success. Pfizer again counters that there was very little suggestion that a cGMP PDE inhibitor would be effective in general, and particularly when administered orally, given that vasodilators generally caused ED, rather than preventing or treating it. The court finds that in May 1994 there was no reasonable expectation that oral administration of a compound from EP '756 or EP '004 would have been successful in treating ED. Specifically, it was disclosed in the EP '756, EP '004, and '534 patents that the compounds claimed therein were vasodilators with the potential to treat various cardiovascular diseases. This disclosure would have taught away from using the compounds to treat ED because, as noted by researchers 78 in the field at the time, vasodilators used to treat hypertension often caused ED. See J. David Curb in et al., Antihypertensive Drug Side Effects the Hypertension Detection and Follow-Up Program, 11 Hypertension 51, 51 (1988) (reporting that in a study of over 5,000 people "[a]mong the known side effects of antihypertensive drugs, sexual problems in males are often of major concern. Impotence was frequently reported problem for all drugs."), PTX 0047. there was little research on whether cGMP PDE the most Moreover, inhibitors could actually have any effect on the relaxation of the corpus cavernosum. The in vitro studies, the limitations of which were discussed above, and the Trigo-Rocha intercavernosal study, likewise did not indicate that the compounds would have the desired effect in the human body and thus a reasonable probability of success.83 Finally, and most importantly, there was no basis for a POSITA to believe that the administration of a cGMP PDE inhibitor orally would have the desired effect. A cGMP PDE had never been administered orally to treat ED; indeed, the only oral study in humans concerned the treatment of asthma. Murray, Inhibitors, 6 D. N. & P. at 154, PTX 0076. study conducted to determine treatment intercavernosal injection in dogs. Phosphodiesterase VA The only cGMP PDE inhibitor for ED in vivo was by Trigo-Rocha, Nitric Oxide and 83 Furthermore, contrary to Teva's repeated assertions, the court finds no evidence that a POSITA in 1994 had any knowledge that the penis contained a large amount of PDE5. A POSITA knew PDE5 was present in the penis, but not in any relative amount. 79 cGMP, 264 Am. J. Physiology H419, PTX 0080. The state of the art at the time was to treat ED with a vasodilator applied locally, either through the practice of injection or the emerging topical treatments, so that a sufficient concentration of the medicine existed in the local area. Again, as discussed above, systemic administration was avoided so as not to cause side effects and to prevent the medication from causing vascular steal away from the penis. 84 The court, therefore, finds that Teva has failed to establish by clear and convincing evidence that the obviousness, x012 patent is void for as the claims in suit are undoubtedly "more than the predictable use of prior art elements according to their established functions." KSR, 550 U.S. at 417. The court does not deny that there is some evidence which would tend to show motivation to try one of these compounds, but a POSITA would have no expectation that oral administration of such compounds would be successful in treating ED, and thus such method was not obvious to try. is supported by Dr. Ringrose's note. This conclusion His suggestion Ms]hould we not try out UK 92,480 [sildenafil] in impotence?" bespeaks of a "well, why not try" attitude, rather than a belief that "this will definitely work." In addition, it is emblematic of the accepted understanding 84 Vascular steal refers to when a vasodilator is administered systemically, thereby relaxing the entire vascular system, and blood is diverted away from the penis because of increased blood flow all there is then insufficient blood flow to sustain an over the body; erection. Trial Tr. 905:15-906:1. 80 at the time that systemic application was a dead end; did test sildenafil as part of through intercavernosal its injection when Pfizer impotence program, in monkeys. it did so Trial Tr. 710:3-716:5. Because Teva did not prove even a prima facie case of obviousness, this court need not consider Pfizer's arguments concerning secondary considerations of non-obviousness.85 D. Therefore, this court FINDS that Teva has not shown by clear and convincing evidence that the %012 patent is invalid because of obviousness and, therefore, DIRECTS THE CLERK TO ENTER JUDGMENT for Pfizer on Teva's Amended Counterclaim to this effect. V. Double Patenting The second argument Teva makes concerning the validity of the patent is that the patent is invalid for obviousness-type double patenting. In particular, Teva argues that Claims 25 and 26 of the *012 are patent not patentably distinct earlier-issued United patent"). States Patent from Claim 1 Number 6,100,270 of Pfizer's {"the *270 United States Patent No. 6,100,270 {filed Oct. 16, 1995) 85 Before the court, Pfizer presented evidence concerning the sales of Viagra, that it met a long-felt need, and that it had inspired other copycat drugs as proof that it was not an obvious invention. See Trial Tr. 1011:24-1046:5 (testimony of Henry Grabowski, Pfizer's expert in the economics of the pharmaceutical industry). 81 {issued Aug. 8, 2000), DX 2066.86 Pfizer counters that there are fundamentally important distinctions between the '012 patent and the '270 patent, most importantly in terms of structure of the compounds and their method of administration, such that the '012 patent is distinct and valid. A. The '270 patent, entitled "Bicyclic Heterocyclic Compounds for the Treatment of Impotence," was filed on October 16, 1995, over a year after the '012 patent was filed, but it issued two years before the '012 patent. DX 2066. Thus, Compare '012 patent, PTX 0001, with '270 patent, the '270 patent is considered an earlier-issued patent for the purposes of double patenting. patent claims: Claim 1 of the '270 "A method of treating male erectile dysfunction comprising administering to a male human in need of such treatment an effective amount of a compound of formula (I) ." 8, lines 8-10, DX 2066. '270 patent, col. The patent disclosed that the formula created compounds that are potent and selective inhibitors of cGMP PDE, id^ at col. 1, lines 47-50, DX 2066, and that some compounds of the formula were tested and found to be potent and selective inhibitors of PDE5 over PDE3. Id^ at col. 7, lines 9-11, DX 2066. Earlier Teva argued that the '012 patent was invalid for double patenting based on both the '270 patent and United States Patent Number 6,534,511, but at trial limited its double patenting claim to the '270 patent. Trial Tr. 508:1-12. 82 The specification states that the preferred route of administration of the compounds is oral, id^ at col. 7, lines 22-23, DX 2066, though Claim 1 does not name a method of administration. The formula in the '270 patent was initially disclosed in World Intellectual Property '104"), filed April 1, 1993. Organization September 4, See "Pyrazolopyrimidinone 1992, DX Patent with a 2068. Antianginal Number 93/06104 publication WO Agents," '104, disclosed ("WO date of entitled a group of compounds according to the formula that were selective and potent inhibitors of cGMP PDEs over cAMP PDEs. WO '104 stated that the compounds were useful in the treatment of "cardiovascular disorders, such as angina, hypertension, WO '104, at 1, DX 2068. heart failure and atherosclerosis." Additionally, WO '104 included a table which listed selectivity and potency data for PDE5 examples of compounds of the formula. Id. over PDE3 at 18-19, for four DX 2068. WO '104 discloses that the compounds may be administered orally. at 8-9, DX Id. 2068. B. The law concerning well-settled. "The obviousness-type double judicially-created obviousness-type double patenting . . . patenting doctrine prohibit[s] is of a party from obtaining an extension of the right to exclude through claims in a later patent that are not patentably 83 distinct from claims in a commonly owned earlier patent." 251 F.3d 955, 967 (Fed. Cir. double patenting "prevent[s] Eli Lilly & Co. v. Barr Labs., Inc. . 2001) (en bane). claims in separate applications or patents that do not recite the 'same' Obviousness-type invention, but nonetheless claim inventions so alike that granting both exclusive patent rights would effectively extend the life of patent protection." Perricone v. Medicis Pharm. Corp.. 432 F.3d 1368, 1373 (Fed. Cir. 2005). The question, thus, is whether the later invention is a "slight variant" of the earlier. Geneva Pharms., Inc. v. GlaxoSmithKline P.L.C., 349 F.3d 1373, (Fed. 1378 Cir. 2003). The court must undertake a two-step analysis in determining whether a patent is void for double patenting. of law, "First, as a matter a court construes the claim in the earlier patent and the claim in the later patent and determines the differences. the court determines whether the differences in Second, subject matter between the two claims render the claims patentably distinct." Lilly, 251 F.3d at 968 (citation omitted). Eli "A later patent claim is not patentably distinct from an earlier patent claim if the later claim is obvious over, or anticipated by, the earlier claim." Id. As stated above as relates to obviousness, the party challenging the patent bears the burden of proving that the patent is invalid by clear and convincing evidence. Microsoft, 84 131 S. Ct. at 2252. c. Teva argues that because the compounds of the informed by EP '756 and EP formula of the '270 patent, patentably distinct. compounds in the '004, as '012 patent, as have the same properties as the informed by WO In particular, '104, Teva argues they are not that all of the '012 and the %270 patents are selective and potent inhibitors of cGMP PDE, all may be administered orally, and all have the same pyrazolopyrimidinone nucleus with an alkoxy substituent at the 2-position of the phenyl ring. there are patents: two important First Claims Pfizer argues in opposition that patentable 25 and 26 of differences the between '012 patent the two specify oral administration of the compounds while Claim 1 of the '270 patent does not; and second the differences in structure of the compounds in each patent render them patentably distinct. Turning to the first step in the analysis mandated by Eli Lilly, the court construes the claims at issue in both the earlier patent and the patent in suit and determines their differences. has already construed Claims 25 and 26 of the of its claim construction analysis. USA, Inc. , F. Supp. 2d '012 patent as part See Pfizer, Inc. v. TevaPharms. , 2011 W.L. 996794 (E.D. Va. 2011). Claim 1 of the '270 patent remains to be construed. '270 patent claims, This court in pertinent part: Thus, Claim 1 of the "A method of treating male erectile dysfunction comprising administering to a male human in need 85 of such treatment an effective amount of a compound of formula (I) ." '270 patent, col. 8, of the same terms as lines 8-10, in the DX 2066. '012 patent, As this claim has many it is construed under the court's previous claim construction order as:87 "A method practiced for the purpose of treating an inability to maintain or sustain an erection adequate for intercourse comprising administering to a male human in need of of formula (I) ." Claim 1 of the between the such treatment an effective amount of a compound Comparing Claims 25 and 26 of the '270 patent, claims are: '012 patent and it is clear that the only differences (1) the '012 patent specifies that administration of the effective amount of the compound shall be oral; and (2) the compounds named in the claims are not the same. Given these differences, the court looks to the second part of the Eli Lilly analysis and determines whether the differences between the two claims render them patentably distinct. Pfizer and Teva squarely disagree as to whether the addition of "orally administering" to the claims in the of itself renders the claims patentably distinct. because WO '270 '012 patent in and Teva argues that '104 disclosed that the compounds of the formula of the patent could be administered orally, and because the 87 The court sees no indication in the specification and claims of the '270 patent that would indicate its meaning from the terms of the '012 patent. terms had any different Indeed, the '270 and the '012 patent share the same definition of erectile dysfunction. '270 patent, col. 1, 13-16, DX 2066; PTX 0001. 86 See '012 patent, col. 1, lines 11-14, specification of the l270 patent itself states that the preferred route of delivery is oral, then there is no difference in the methods of administration of the claims. Pfizer argues that given the knowledge of a POSITA at the time the '270 patent was filed, the method of administration is critical, because a POSITA would assume local application given the issues experienced with systemic administration of vasodilators.88 The court finds that there is no patentable difference between the '270 and the '012 patents on this metric alone. that Claim 1 of administration, the the '270 patent patent's does not While it is true itself specification specify mentions oral oral administration as the preferred route and does not mention local application, either topically or through iritercavernosal injection. In fact, each of the routes of administration mentioned - oral, sublingual, or buccal - are all systemic administrations of the drug. Therefore, the court finds unavailing Pfizer's argument that a POSITA would have understood the '270 patent to provide for local administration of the compounds of the formula. Therefore, it remains to be determined whether the claims are patentably distinct by the fact that they claim different compounds for the treatment of ED, or if they are only "slight variants" of one another. Geneva Pharms.. 349 F.3d at 1378. 88 See supra Section IV.A. 87 Teva argues that the differences between the compounds are minimal and do not have any effect on their pharmacologic properties and activity in the body. Pfizer, by contrast, contends that even small changes in the structure of a compound can make significant and unpredictable changes to their effectiveness and function. Looking to the formula in Claim 1 of the '270 patent and the compounds in Claims 25 and 26 of the '012 patent, Teva's and Pfizer's experts agree that the ring structure of the compounds is the same in both cases, and only the substrates are different. Compare '012 patent col. 10, lines 5-30, 35-37, PTX 0001, with '270 patent col. 2, lines 2-21, DX 2066. Dr. Nicholas Terrett, Pfizer's expert in medicinal chemistry, compared the structures of the formula in the '270 patent and the compounds in the '012 patent and discussed two differences between the substrates. Trial Tr. 969:6-1010:24.89 First, where the '270 patent has a methyl group, a one carbon chain, the '012 patent has a propyl chain, a three carbon group. Trial Tr. 989:4-13. He testified that a propyl group in that position helps the compound bind better with cGMP PDE. another substrate location, Trial Tr. 989:13-16. Additionally, in the formula of the '270 patent has a sulfonamide group containing a sulfur, two oxygens, and a nitrogen, in a chain structure. Trial Tr. 989:20-22. The '012 patent's compounds also have a sulfonamide group at that substrate location, 89 The court finds Dr. Terrett to be an extremely credible witness. 88 but its elements form a ring structure. Trial Tr. 990:1-5. Dr. Terrett testified that the structure of the sulfonamide group was particularly important for determining how the compound interacts with the body. Trial Tr. 990:6-11. Overall, Dr. Terrett testified that when dealing with protein inhibitors, the structure of the compound is particularly important because the protein binds with the inhibitor via a three-dimensional binding site on the protein itself. Trial Tr. 976:25-977:13. the protein determines How well the inhibitor binds with its potency and selectivity. Trial Tr. 992:5-8. Teva does not challenge that these structural differences exist, but maintains that they are unimportant when the compounds have the same properties: of cGMP PDE. The They are potent and selective inhibitors court, however, disagrees determining whether a pharmaceutical, that its task in "drug" patent is void for obviousness-type double patenting is to only look at broad properties of pharmaceutical compositions. Instead, the court must examine the details of the structure and function of the claimed compounds to determine if they are patentably distinct. from the expert testimony of Dr. In this case, it is clear Terrett that the structural differences between the formula in Claim 1 of the v270 patent and the compounds in the '012 patent render them patentably distinct. While these compounds may have had the same general function, changes 89 in the structure of the compounds can have significant effects on their function within the body. Trial Tr. 992:5-8. The court further observes that, as the trier of fact, the table included in WO '104, admitted into evidence as DX 2068, lists the potency and selectivity values for four examples of compounds from the formula. Three of the examples show differences only within the sulfonamide substrate, but their selectivity ratios range from 250 to 3830. '104, at 18-19, DX 2068.90 WO This table demonstrates that as the three-dimensional structure of the molecule changes, its selectivity for PDE5 over PDE3 changes.91 Additionally, there is no evidence that the effects on selectivity caused by these changes in structure were in any way predictable. The court finds no merit to Teva' s argument that the differences in structure of the compounds make them only slight variants, as such changes have unpredictable and sometimes significant effects on the compounds function within the body, and thus Claims 25 and 26 of the 4012 patent are patentably distinct from Claim 1 of the v270 patent. 90 While the court is not an expert chemist, these factual observations are clear from the exhibit itself. Moreover, the court does not consider Example 1 because it appears "on its face" to have an additional difference in another of the substrates. DX WO '104, 18, 2068. 91 The court does note, from the face of the exhibit, that the potency of the compounds remains relatively constant. WO '104, 18-19, DX 2068. 90 D. Therefore, court FINDS that Teva has not shown by clear and convincing evidence that the '012 patent is invalid because of obviousness-type this double patenting and DIRECTS THE CLERK TO ENTER JUDGMENT for Pfizer on Teva's Amended Counterclaim to this effect. VI. Inequitable Conduct Teva makes a third and final claim concerning the enforceability of the x012 patent. Teva argues that the patent should be invalidated in its entirety because of inequitable conduct committed during its prosecution argues that Gerard M. and reexamination. O'Rourke, during the prosecution of the one of In Pfizer's '012 patent, particular, outside Teva counsel committed inequitable conduct by failing to disclose information to the PTO.92 Pfizer does not dispute any of the facts or evidence presented by Teva at trial, but argues that as a matter of constitute inequitable conduct. law the conduct alleged does not The court agrees with Pfizer. 92 The involvement of additional parties was alleged in the Amended Answer and Counterclaim, but, as previously noted by the court, upon stipulation by Teva, these additional parties were dismissed from consideration. See supra note 41. Thus, the only allegations which remain before the court, trial, concern Mr. and upon which evidence was presented at O'Rourke. 91 A.93 Mr. O'Rourke was a partner at the Delaware law firm Connolly Bove Lodge & Hutz {"Connolly Bove"),94 which firm was engaged by Pf izer to manage disclosure of certain information to the PTO during the prosecution of the ' 012 patent. He testified that his particular duties were to send Information Disclosure Statements ("IDS") to the PTO during the prosecution of the patent. Teva's patent law and procedure expert, Cameron Weiffenbach, Esq., testified that pursuant to the continuing duty of disclosure to the PTO, a patent applicant must send an IDS to the PTO to bring new information to the patent examiner's attention after the application has been filed. Tr. 1110:06-22. Trial The duty of disclosure arises from the duty of candor and good faith contained in Rule 56 of the Rules of Practice in Patent Cases. Trial Tr. 1120:21-1121:7.95 The Rules provide that 93 The facts in this Subsection are found from the credible testimony, via videotape deposition played at trial, of Mr. O'Rourke, Mr. Hutz, Mr. Jones, Mr. McMunn, and Mr. Richardson, as well as the agreed exhibits 94 See in the case. supra note 43. 95 Rule 56 provides, in pertinent part: "Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section." 37 C.F.R. § 1.56 (a) . An "individual associated with the filing and prosecution of a patent application" is defined as: " (1) Each inventor named in the application; (2) Each attorney or agent who prepares or prosecutes the application; person who is substantively involved in 92 and the (3) Every other preparation or a patentee has a continuing duty of disclosure to the PTO with respect to information material to patentability of the application. Trial Tr. 1121:22-1122:11." Connolly Bove and Mr. O'Rourke were hired to fulfill this obligation with regard to sending the PTO information concerning prosecution in foreign jurisdictions of the subject matter of the '012 patent. requesting See that DX 2183 Connolly {letter Bove set from up James a system documents from foreign jurisdictions to the PTO). handled the foreign disclosures itself, Jones for of disclosing Initially Pfizer but eventually the volume became such that the use of outside counsel was necessary. dep. 78:13-22 (as played at trial). Mr. Pfizer Jones O'Rourke was assigned to prosecution of the application and who is associated with the inventor, with the assignee or with anyone to whom there is an obligation to assign the application." Id. at § 1.56{c). 96 to Information is material to patentability when it is not cumulative information already of record or being made of record in the application, and: (1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; (2) or It refutes, applicant takes (i) or is inconsistent with, in: Opposing an argument of unpatentability relied on by the Office, (ii) Id. § a position the or Asserting an argument of patentability." 1.56(b). 93 the project by Rudolph Hutz, a more senior partner at Connolly Bove, and they worked together to submit the IDS forms and materials. 2118 Mr. (power of attorney of February 9, 1998, DX from Pfizer granting Hutz power of attorney to prosecute the '012 patent on its behalf) ; DX 2012 (power of attorney of November 13, 2000, from Pfizer granting Mr. O'Rourke power of attorney to prosecute the v012 patent on its behalf). Mr. Hutz explained to Mr. O'Rourke the general subject matter of the patent and then told Mr. O'Rourke that Mr. O'Rourke would be responsible for gathering the foreign documents and determining which ones should be disclosed to the PTO. 38:25-39:24 (as played at trial). Hutz dep. In total, Mr. O'Rourke submitted three IDS disclosures to the PTO - one in November 2000, DX 2128; one in March 2001, DX 2129; and one in February 2002, DX 2130 - all of which submitted documents from foreign prosecutions. reviewed these IDS before they were sent to the PTO. Mr. Hutz Id^ at28:13-16. Mr. O'Rourke obtained the foreign documents in two ways, either directly from the foreign counsel prosecuting and defending the patent overseas, or from Watson McMunn, an internal United Kingdom patent counsel at Pfizer who was in charge of worldwide prosecution of the subject matter of the (as played at trial). Mr. *012 patent. McMunn and O'Rourke dep. the foreign 38:12-15 attorneys, following Pfizer policy, sent Mr. O'Rourke every document from every foreign proceeding and then left it up to him to determine what needed 94 to be disclosed to the PTO. trial). McMunn dep. 55:20-56:04 (as played at As a patent agent admitted only in the United Kingdom, Mr. McMunn was unfamiliar with the PTO rules and relied on counsel in the United States to correctly comply with them. Id. at 56:09-12. In order to fulfill his duty of disclosure and comply with Pfizer policy, Mr. O'Rourke testified that he looked at each document that came in and determined whether to turn it over to the PTO. May 2002, Mr. O'Rourke substantively relevant, purely procedural. turned over all documents were leaving out only those documents that were however, Mr. O'Rourke's practice changed as a result of instructions he received from Mr. Hutz. Beyond reviewing Mr. Hutz also attended meetings with the patent examiner on behalf of Pfizer. examiner notified Mr. going to be allowed, for that O'Rourkedep. 53:23-54:05 (as played at trial) .97 After May 2002, the IDS, Before reexamination. At one such meeting on May 7, 2002, the patent Hutz that the claims of the '012 patent were so long as Pfizer submitted a written request See DX 2183 (interview notes from patent examiner indicating that the claims were in condition for allowance) . Also at the interview, Mr. Hutz testified that the examiner indicated he was not interested in the foreign materials of the type Pfizer had been submitting. Hutz dep. 137:12-18 (as played at trial) . As 97 Mr. O'Rourke built a database with every document received from Mr. McMunn and the foreign attorneys and kept track of everything he turned over to the PTO. O'Rourke dep. 47:03-05 (as played at trial). 95 a result of this meeting, Mr. O'Rourke testified that he met with Mr. Hutz, who asked Mr. O'Rourke if there were any foreign materials that were any different than those previously submitted. When Mr. O'Rourke answered in the negative, Mr. Hutz told him that the claims were being allowed, similar foreign O'Rourke dep. and the examiner was not interested in anymore materials, 60:8-17 so no further IDS needed to be sent. (as played at trial). Therefore, after approximately May 7, 2002, Mr. O'Rourke, while he continued to receive documents from Mr. McMunn and the foreign attorneys, did not review such documents as he had before. Instead, when a document came in, he would determine which country it was from, tell his paralegal to enter the document into the running database of documents received,98 and then have it filed it in a box with the rest of the documents from that country. played at trial). way to determine O'Rourke dep. 61:5-10 {as Mr. O'Rourke did not review the documents in any if they were material, and he testified that he expected that if something was truly important, Mr. McMunn would have brought it to his attention. Id_;_ at 71:7-15, 74:18-20." Thus, after May 7, 2002, no one from Pfizer reviewed documents from foreign litigations 98 See to determine supra note if they should be disclosed to the PTO. 97. 99 Mr. McMunn, on the other hand, testified that he turned everything over to United States could follow United disclosed. counsel, States McMunn dep. Mr. law O'Rourke, and 67:14-19 96 so that Mr. determine what O'Rourke needed (as played at trial). to be One document that Mr. O'Rourke received after May 7, 2002, which he did not review, was a Statement of Claim from Canada in which Bayer Aktiengesellschaft and Bayer, Inc. (collectively Pfizer on the Canadian version of the "Bayer") '012 patent.100 sued In that Statement of Claim, filed June 5, 2002, in the Federal Court of Canada Trial Division, invalid. See Bayer DX argued 2018. that Smart Pfizer's & Biggar, Canadian patent Pfizer's was designated representatives for service of process in Canada, were served with the claim on June 11, 2002. They then forwarded it to Mr. McMunn on June 12, 2002, which he apparently received in the United Kingdom Patent Department on June 17, 2002. DX 2020. On July 9, McMunn forwarded the Statement of Claim to Mr. O'Rourke. Meanwhile, on May 22, 2002, 2002, Mr. PTX 0365. the PTO sent Pfizer a "Notice of Allowance and Fee(s) Due," which notified Pfizer that the claims of the '012 patent were going to be allowed and payment of the issue fee was due by August 2, 2002. DX 2125. On June 12, 2002, Pfizer transmitted the issue fee to the PTO, which apparently received it on June 20, 2002. PTX 2002. DX 2126. The v012 patent issued on October 22, 0001. B. The court's determination of whether Mr. constitute inequitable conduct is 100 See supra Section III.A. 97 O'Rourke's actions controlled by the Federal Circuit's recent en bane decision in Therasense, Dickinson & Co., bane). F.3d Inc. v. Becton, , 2011 W.L. 2028255 (Fed. Cir. 2011) {en Therein, the Federal Circuit redefined the required showing to invalidate a patent on the grounds of inequitable conduct. The Federal Circuit significantly narrowed the number of instances in which a court may find inequitable conduct, and thus an in-depth explanation of Therasense's holdings is warranted. In Therasense, sued Therasense, "Abbott") Abbott's Becton, Inc. and Dickinson & Co. Abbott seeking a declaratory patent for Laboratories judgment glucose blood ("Becton Dickinson") test of (collectively non-infringement strips. Beyond of arguing non-infringement, Becton Dickinson claimed that the patent in suit was void and unenforceable because of inequitable conduct committed during its prosecution. The actions alleged constituting inequitable conduct arose from Abbott's prosecution of the patent in the United States and the position it took in that prosecution with respect to a prior patent prosecuted in Europe. The earlier European patent claimed another glucose test strip, preferably, stated, with a membrane over the sensory electrode. it When defending the instant patent in the United States, Abbott had to overcome an obviousness argument from the PTO which referenced the prior European patent. Abbott's attorney and the patent's inventor submitted affidavits to the PTO which stated that the previous patent only 98 taught a glucose test strip with a membrane, while the instant patent specifically stated that a membrane was not used in the invention. However, in the earlier prosecution of the European patent, Abbott had argued that the European patent provided for a glucose test strip with or without a membrane. Abbott then did not disclose that previous position to the PTO in the prosecution of the new patent in the United States, an action Becton Dickinson claimed constituted inequitable conduct. On this evidence, the district court invalidated the patent for inequitable conduct. Co., 565 F. Supp. See Therasense, 2d 1088 (N.D. the Federal Circuit affirmed. & Co., 593 F.3d 1289 {Fed. Ca. Inc. v. 2008) . Becton, Dickinson & On appeal, a panel of Therasense, Inc. v. Becton, Dickinson Cir. 2010). However, recognizing "the problems created by the expansion and overuse of the inequitable conduct doctrine, [the Federal Circuit] granted [Abbott's] petition for rehearing en bane," further proceedings. F.3d , 2011 W.L. then reversed and remanded the Therasense, 2028255, case for Inc. v. Becton, Dickinson & Co., at *4 (Fed. Cir. May 25, 2011) (en bane) .101 101 In granting following 1. rehearing en bane, the Federal Circuit posed the six questions: Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced? 99 "Inequitable conduct infringement that, is if proved, an equitable defense to patent bars enforcement of a patent. This judge-made doctrine evolved from a trio of Supreme Court cases that applied the doctrine of unclean involving egregious misconduct." hands Id. to dismiss patent cases Early inequitable conduct cases involved the manufacture or suppression of evidence before the PTO, but the doctrine then evolved to encompass not only affirmative fraud but also nondisclosure of information to the PTO. Id. at *6. What stayed constant was that a party arguing inequitable conduct was required to prove both intent to deceive the PTO and materiality of the non-disclosed information. Id^ The standards for finding 2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? If so, what is the appropriate standard for fraud or unclean hands? 3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office's rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued? 4. Under what circumstances is it proper to infer intent from materiality? 5. Should the balancing inquiry (balancing materiality and intent) be abandoned? 6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context. Therasense, Inc. v. Becton, Dickinson & Co., 374 Fed. Appx. 35, 35-36 (Fed. Cir. Apr. 26, 2010) (unpublished). 100 intent, however, fluctuated over time, where at one time a finding of gross negligence or negligence was sufficient. v. Cebalo, 731 F.2d 878, 885 {Fed. Cir. 1984) . E.g., Driscoll Materiality was judged from the broad viewpoint of a reasonable examiner. E.g., Am. Hoist & Derrick Co. v. Sowa & Sons, Inc. , 725 F.2d 1350, 1362-63 (Fed. Cir. 1984) . Those two elements were considered together on a sliding scale where a strong showing of one element, intent, either materiality or would balance out a weaker showing of the other and prove inequitable conduct occurred. Id. at 1362. The Federal Circuit found that while the more flexible standard for showing inequitable conduct had been put in place to encourage disclosure to the PTO, consequences. troubling of the expansion of the doctrine had unintended Therasense, these 2011 W.L. consequences 2028255, was that at *7. pleading conduct had become a litigation strategy because it The most inequitable "conveniently expands discovery into corporate practices before patent filing and disqualifies the prosecuting attorney from the patentee's litigation team." Id. Furthermore, "[b]ecause the doctrine focuses on the moral turpitude of the patentee with ruinous consequences for the reputation of his patent attorney, deflects issues." attention Id. from the merits Additionally, increase the complexity, it discourages settlement and of validity and infringement "[i]nequitable conduct disputes also duration and cost of patent infringement 101 litigation that is already notorious (citation and for its internal complexity and high cost." id. quotation marks omitted). Finally, compounding concerns about the far-reaching consequences of the doctrine, "the remedy for inequitable conduct is the 'atomic bomb' law," of patent whereby "inequitable conduct regarding any single claim renders the entire patent unenforceable." For all these reasons, the Federal Circuit requirements for a showing of inequitable conduct, standards for finding both intent and Id. at *8. revisited the "tighten[ing] the materiality in order to redirect a doctrine that has been overused to the detriment of the public." Id. at *9. Therefore, after Therasense, substantiate a claim of inequitable conduct, in order to "the accused infringer must prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, decision to withhold it." with the sliding scale intent and materiality, Id. test, and made a deliberate Additionally, the court did away requiring instead that each element, be proven by clear and convincing evidence and that neither may be inferred from a strong showing of the other. Id. at *10. On the intent prong in particular, the Federal Circuit held that courts may infer intent from direct and circumstantial evidence, but that such intent must be "the single most reasonable inference able to be drawn from the evidence." Id. 102 (emphasis added) (citation and internal quotation marks omitted). "When reasonable inferences that may be drawn, be found." Id^ For materiality, there are multiple intent to deceive cannot the court held that "the materiality required to establish inequitable conduct is but-for materiality." Id. at *11 {emphasis added). Thus, the court must determine "whether the PTO would have allowed the claim if it had been aware of the undisclosed reference." Id^ If the party challenging the patent shows each of these elements by clear and convincing evidence, the party defending the patent may offer a good faith defense. Id^ at *10. The court did recognize one exception to the "but-for" causation required for affirmative assumed. materiality. acts Id^ at of *12. When egregious "the patentee misconduct," has engaged materiality may in be Willfully filing a false affidavit is an example of such egregious misconduct. Id. The court made clear, however, that "mere nondisclosure of prior art references to the PTO [or] failure to mention prior art references in an affidavit" does not constitute affirmative egregious misconduct. Id. The Federal Circuit approved of the egregious misconduct exception because its roots are in the original "unclean hands" cases and it allows for flexibility when a willful fraud is perpetrated upon the PTO. at *13. 103 Id^ c. Turning to the specific facts in this case, Mr. Teva argues that O'Rourke's failure to turn over the Bayer Statement of Claim constituted inequitable conduct because the reference proved the invalidity of the animal claims in the patent, and it was withheld with the specific intent to deceive the PTO and to speed the issuance of the *012 patent. Further, Teva maintains that this is a case of affirmative egregious misconduct because Mr. O'Rourke was engaged in a scheme of willful blindness to prevent his discovery of material information that would need to be turned over to the PTO. The court, therefore, determines whether Teva has shown by clear and convincing evidence that the Bayer Statement of Claim was but-for material and the intent to deceive the PTO is the single most reasonable inference from the facts. The court finds that there is utterly no evidence as to either of these elements.102 On materiality, the Bayer Statement of Claim Indeed, there is such little evidence in this case of any wrongdoing by Mr. O'Rourke, the court must question Teva's conduct in pursuing this case, particularly after the Federal Circuit's decision in Therasense. A party asserting a claim in litigation represents that such claim (1) is not made for an improper purpose such as to harass or needlessly increase the cost of litigation; and (2) is warranted by existing law. Fed. R. Civ. P. 11 (b) . The court finds that Teva has overreached in this case, and while it makes no intimations concerning sanctions, finds this case approaches the line between an argument which is quite a stretch, and an argument that is so devoid of support as to give rise to questions about that party's intent in pursuing it. See Fed. R. Civ. P. ll(c){3). 102 104 hardly approaches the but-for materiality required by Therasense where "the PTO would not have allowed a claim had it been aware of [it]." Therasense, 2011 W.L. 2028255, at *11. First, the Bayer Statement of Claim concerned a patent under Canadian law, law which has not been shown to have anything in common with or any bearing on the law of the United States as regards validity of patents.103 Indeed, the Statement of Claim states as a cause of action that the claims of the Canadian are "covetous," DX 2018, at 7, which Robert MacFarlane, a Canadian patent attorney with the firm of Bereskin & Parr, testified means that the patent claims more than it describes. MacFarlane dep. explanation, 44:15-20 (as played at trial).104 Under this the doctrine of covetousness does not seem to have a clear equivalent in the law of patents in the United States. Second, the Bayer Statement of Claim related to the Canadian patent, a patent which was issued under different standards than the '012 patent in There is a dispute between the parties as to whether foreign litigation documents can ever be material such that they would need to be disclosed. The Manual of Patent Examining Procedure Section 2001.06 provides: "Where the subject matter for which a patent is being sought is or has been involved in litigation, the existence of such litigation and any other material information arising therefrom must be brought to the attention of the U.S. Patent and Trademark Office." M.P.E.P. § 2001.06(c). The parties dispute whether such litigation includes litigation concerning foreign patents in foreign countries. The court need not resolve this 103 dispute to determine materiality under Therasense, but makes note of the fact that the PTO guidelines are at least unclear on that point. 104 See supra note 35 concerning foreign law. 105 the United States. Third, the Bayer Statement of Claim appears to be merely a rote recitation of causes of action and does not contain any factual contentions or references which could have informed the patent examiner in the United States. Fourth, and finally, it is emblematic of how little relevance the Bayer Statement of Claim has to the prosecution of the v012 patent in the United States that the patent examiner specifically requested not foreign references Therefore, this similar court finds to those that Teva to receive any other already has submitted. failed to show any materiality of the nondisclosed reference material. On intent, Teva's contentions fare just as poorly, as there is no evidence to suggest that Mr. O'Rourke had any intent to deceive the PTO in failing to disclose the Bayer Statement of Claim because (1) he had no such duty in the first place, and (2) such intent is hardly the single most likely inference from his actions. Teva's own patent law expert testified that while an applicant has a duty of candor and good faith to the PTO, an applicant may not continue to freely disclose information to the PTO, notice of allowance. Trial Tr. may only disclose information, 1111:8-23. once there has been a Instead, an applicant if such reference demonstrates the "unpatentability of one or more claims," 37 C.F.R. § 1.313, or as 105 Mr. Hutz testified that the Bayer Statement of Claim was quite similar in form and substance to the other challenges to foreign patents already submitted to the PTO. Hutz dep. 187 : 02-16 (as played at trial). 106 part of a request for continued examination. 37 C.F.R. § 114. Once the issue fee has been paid, however, the only way an applicant can file additional information is if such information shows that the claims are unpatentable. 37 C.F.R. The evidence before § 114{a)(l). the court is that Mr. O'Rourke did not receive the Bayer Statement of Claim until July 9, 2002, but the issue fee was paid on June 20, 2002; thus, the information could have only been disclosed, pursuant to Rule 313, unpatentability of one or more claims. if it demonstrated the This standard is certainly not met for all the reasons concerning materiality set out above. At base, the Bayer Statement of Claim is just a rote recitation of the bases for invalidity of patents under Canadian law, law that is not controlling on the patent process in the United States; and the Bayer Statement of Claim has no facts that would lead the examiner to reexamine his conclusions on issuance of the claims. Thus, Mr. O'Rourke had no duty to disclose this Statement of Claim in the first place and, as such, could not have had the requisite intent to deceive. Second, Therasense commands the court to determine whether the party challenging the patent has made a showing by clear and convincing evidence that intent to deceive the PTO is uthe single most reasonable inference able to be Therasense, 2011 W.L. 2028255, at *10. 107 drawn from the evidence." The only inference the court can draw from the evidence presented at trial was that Mr. 0'Rourke was a busy young law partner who devised a somewhat "sloppy" for sorting foreign litigation material.106 the incantation blindness."107 inequitable that Mr. 0'Rourke Teva unendingly repeats engaged in "scheme of willful It is as if Teva hopes to conjure up the flame of conduct from thin air. Instead, claim of inequitable conduct for what it is: the court sees this an attempt to induce the court to believe that if enough smoke is created, a fire. system there must be The court sees through this smokescreen and finds that Teva has failed to bring any evidence to the court's attention which shows that Mr. 0'Rourke acted with the specific intent to deceive the PTO.108 106 While the court notes that it may not have adopted or approved of the sorting system and practice followed by Mr. 0'Rourke, his actions do not rise to the level of specific intent to deceive the PTO. Moreover, while the court discounts Teva's extreme arguments that allowing Mr. 0'Rourke's behavior would lead, in essence, to the downfall of the patent system, the court is mindful that his practice was not a model for compliance with the PTO's directives. the court also notes that Mr. well 107 through May 2002. See infra note to a that Mr. misconduct similar fate. "scheme supra note 97 and accompanying text. 108. 108 Teva's argument egregious See However, 0'Rourke created a system that worked such 0'Rourke's that actions were affirmative materiality may be assumed meet a Again, Teva argues that Mr. O'Rourke's actions amount of willful blindness." The court finds otherwise because (1) there was no indication that any of the foreign litigation materials which had been collected over years could ever rise to the materiality required by Rule were patentable; and (2) 313 by demonstrating on the facts of this case, that Mr. the claims O'Rourke's actions are more akin to mere nondisclosure of a reference rather than affirmative doctrine. actions Therasense, of fraud 2011 W.L. covered 2028255, 108 by at the *12. "unclean hands" D. In sum, this court finds that this case is the archetype of the action the Federal Circuit was aiming to curtail with the tightening of the standards disclosing all in Therasense. substantive Pfizer's documents from initial every behavior foreign of patent prosecution and litigation is understandable, particularly now in hindsight, and given the unfounded, costly, time-consuming accusations, which have resulted from not turning over one completely non-material document after the time for disclosures had passed, except in the most extreme of cases, with this not being one.109 The court refuses to read Therasense in any way other than how the Federal Circuit intended, as a bulwark against the waste of resources by both the judiciary and litigants, of the reasons as has occurred in this case. stated above, the court FINDS that For all Pfizer did not commit inequitable conduct in the prosecution of the '012 patent and, therefore, DIRECTS THE CLERK TO ENTER JUDGMENT for Pfizer on Teva's Amended Counterclaim to this effect. 109 "With inequitable conduct casting the shadow of a hangman' s noose, it is unsurprising that patent prosecutors regularly bury PTO examiners with a deluge of prior art references, most of which have marginal value." Therasense, 2011 W.L. 109 2028255, at *9. VII. Conclusion For the reasons set out in this Opinion and Final Order, court hereby GRANTS IN PART Teva's Motion to Dismiss Standing and ORDERS Pfizer from the litigation. for Leave to Pharmaceuticals Additionally, File Counterclaim. Ireland its patent for Lack of Co. DISMISSED the court DENIES Teva's Motion Proposed Second Amended Answer and Finally, the court FINDS that Teva' s proposed generic equivalent of Viagra would INFRINGE the '012 the is VALID and ENFORCEABLE. x012 patent and FINDS the Therefore, the Clerk is DIRECTED to enter judgment for Pfizer on the Amended Complaint and Amended Counterclaim in this case, and in accordance with this Opinion Final Order. The court further DIRECTS the Clerk to send a copy of this Opinion and Final Order to all counsel in this case. IT IS SO ORDERED. Rebecca Beach Smith United States District Judge Norfolk, August Virginia \\, 2011 110

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.