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(Pw) Otsuka/BMS's Abilify: Strong inequitable conduct challenge presented
by generics at trial faces uphill battle - attorneys
Otsuka (PINK:OSUKF) and Bristol-Myers Squibb’s (NYSE:BMS) anti-psychotic drug Abilify faces a strong inequitable conduct challenge, but generics will face an uphill battle because of the high burden of proof for their inequitable conduct defense, attorneys said. The patent trial with respect to the Orange Book Patent for Abilify, U.S. Patent No. 5,006,528 recently concluded. Post-trial briefing and closing arguments will take place on 21 October. Generic challengers in the litigation include Teva (NASDAQ:TEVA), Sandoz, Sun Pharmaceuticals, Zydus Pharmaceuticals, and Apotex Pharmaceuticals. The patent trial took place in August in a New Jersey federal court. The 30-month stay is believed to expire in November of 2010, and the patent is scheduled to expire in April 2015. Inequitable conduct is very hard to prove, but it looks like the defendants have a strong inequitable conduct argument, said Robert Gould, a patent litigation attorney for Duane Morris. However, he noted that the standard for proving inequitable conduct is clear and convincing Inequitable conduct cases are very hard to win, agreed Doug Robinson, an associate with Harness Dickey. There are five to six bases for inequitable conduct in this case, but it is difficult to convince a judge that these allegations are strong enough to be considered actual inequitable conduct. However, he added that disclosing references for the first time on reexamination, as defendants assert, may be enough to prove inequitable conduct, depending on whether the court thinks the references are material or merely cumulative. Federal courts require proving both materiality and intent to support a finding of inequitable conduct during patent procurement. Defendants are arguing that a handful of references were first disclosed on reexamination, and that the examiner relied on those references in making obviousness rejections, said Brian O’Shaughnessy, a partner at Buchanon Ingersoll. He noted that the prior art patents at issue disclose similar compounds but would need to be modified to create the claimed compound. The defendants have raised some "pretty fact specific" arguments from declaration statements, as O’Shaughnessy said the inequitable conduct argument seems more thoroughly pled than the typical inequitable conduct defense. He noted that the arguments for intent seem rational, but materiality may be a problem because of the modifications required to the references. However, he explained that inequitable conduct cannot be cured on reexamination. The inequitable conduct argument looks like a close argument, said Howard Susser, a partner at Burns & Levinson. On their face, several of the declarations withheld are pertinent and questionable, but inequitable conduct is a very high burden to prove, he explained. There is an inference of intent here, but the real question is materiality and how important the withheld information is, Susser added. This could go either way, as there seems to be enough evidence to carry the defendants’ burden, he indicated. With respect to one of the withheld declarations, the intent looks bad, so less materiality will be required to prove inequitable conduct, Susser noted. When Otsuka obtained their patent, they did not file an Information Disclosure Statement (IDS) citing all of the pertinent art to the patent office, but cited this art on reexamination, said Hunter Baker, a partner at Wolf Greenfied. Courts have been very strict on the duty of disclosure, he said. Baker added “I wouldn’t be surprised if the court found inequitable conduct here,” as this is a strong case for inequitable conduct. It is clear that they knew about the art beforehand and it is In addition, defendants are also challenging the patents on obviousness, said Robinson, arguing that the lead compounds in the prior art were obvious to modify by a person of ordinary skill in the art. The patent holder is arguing that the prior art compounds would not have been selected and modified in this way, and that there are unexpected results. The patent holder probably has the better case on obviousness, he added. The same prior art references are being asserted in both the inequitable conduct and obviousness arguments raised by defendants, O’Shaughnessy added. He noted that this argument is unlikely to prevail based on the modifications required to the references. Sonia Choi, a spokesperson for Bristol-Myers Squibb provided the following comment by e- mail: “Bristol-Myers Squibb and Otsuka believe the Abilify patent is valid and enforceable. Otsuka, as the owner of the patent, will vigorously defend its intellectual property rights.”

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