Merck Sharp Dohme v Amneal Pharmaceuticals

Merck Sharp & Dohme Corp., v. Amneal Pharmaceuticals LLC

No. 2017-1560 Fed. Cir. Feb. 9 2018 Opinion by Circuit Judge Stoll with Circuit Judges Taranto and Clevenger.

Merck filed an infringement suit alleging that, if approved by the FDA, Amneal’s proposed Abbreviated New Drug Application (“ANDA”) product would infringe U.S.Patent No. 6,127,353. Following a bench trial, the district court found that Merck failed to prove by preponderant evidence that Amneal’s ANDA product would infringe the patent. The United States Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed the district court.

The ’353 patent claims mometasone furoate monohydrate (“MFM”), the active ingredient in Merck’s Nasonex® nasal product. Amneal’s ANDA product contained the corticosteroid anhydrous mometasone furoate (“MFA”). Merck alleged that the MFA would convert to the infringing MFM form over time. The issue of infringement before the district court was whether Amneal’s ANDA product would contain MFM during its two-year shelf-life.

Amneal prepared batches of the ANDA product, one of which was Batch 16001. Amneal drew samples on the first day (“Day 1 Batch”) and on the fourth day (“Day 4 Batch”). Before sampling the Day 4 Batch, Amneal mixed the batch at 840 revolutions per minute for 30 minutes. Amneal later mixed Batch 16001 again and bottled it for storage, producing the “A Batch”.

Amneal produced samples from the Day 1 Batch to Merck and indicated they were representative of Amneal’s finished commercial product. Later, Amneal served a rebuttal expert report on infringement, in which its expert opined regarding samples from the Day 4 Batch. Merck represented to the district court that this report was its first awareness of the Day 4 and A Batch samples.

Six weeks before trial, a discovery dispute ensued.  Merck argued that because the Day 4 and A Batches underwent additional mixing, which can promote conversion of MFA to the infringing MFM form, Amneal should have produced samples from those batches. The upcoming trial would have to be “materially postponed” if the Day 4 and A Batch samples were produced and Merck was given a full opportunity to test those samples.

The district court acknowledged Amneal’s discovery violation and that, ideally, Amneal should have produced samples of the Day 4 and A Batches. The district court determined that it did not have enough information to determine whether the Day 4 and A Batch samples were materially different from the Day 1 Batch samples. The district court did not compel Amneal to produce the additional samples or postpone trial. Instead, the district court gave Merck the opportunity to prove at trial that the Day 4 and A Batch samples were substantively different than the Day 1 Batch samples.

The Court applied Third Circuit law in deciding the discovery issue. Under that law, an appellate court will not disturb a denial of additional discovery absent an abuse of discretion and a showing of actual and substantial prejudice.

The Court applied Third Circuit law in deciding the discovery issue. Under that law, an appellate court will not disturb a denial of additional discovery absent an abuse of discretion and a showing of actual and substantial prejudice. Calling the question “a close one” — due to Amneal’s failure to abide by the discovery order, resulting in a trial situation that was less than ideal — the Court found that the district court took adequate steps to ensure that proceeding with trial would not prejudice Merck since the court allowed Merck the opportunity to prove that the Day 4 and A Batch samples were different than the Day 1 Batch samples.

At trial, Merck’s expert testified that he performed a study which demonstrated the conversion of MFA to MFM. The expert added MFM to Amneal’s Exhibit Batch of MFA then subjected the mixture to vigorous shaking for 27 days. At the end of the process, the mixture converted to MFM. He testified that he “intentionally added [MFM] so that the conversion could take place with both forms present, and so [he] wouldn’t know if [MFM] would become present or when it would become present if [he] hadn’t added it.” The expert testified that he would have preferred to test samples of the Day 4 and A Batches because they were “more representative” of Amneal’s final product in that they went through additional mixing.

Merck’s other expert opined that generally additional mixing increases the likelihood of polymorphic conversion to MFM. This conversion concept was based on general chemical, thermodynamic, and kinetic principles and whether conversion occurs in a given sample requires testing, according to this expert. This expert did not test Amneal’s product.

Amneal’s expert testified that increased mixing does not necessarily result in increased polymorphic conversion. His view was that conversion of MFA would be difficult due to the high energy required to convert to MFM.

The Court agreed that Merck presented little more than theoretical evidence and the expert’s study was “not representative of the ANDA product (because of the addition of MFM) and did not measure the effect of mixing speed or time on the rate of conversion.” Stating “that it would have been better for the process if Amneal had provided samples of the Day 4 and A Batches,” the Court nonetheless found that it was “not left with a definite and firm conviction that the district court was in error to overturn its fact-finding.”

Next, Merck argued that the finding of noninfringement must be reversed as a matter of law because the district court improperly based its noninfringement finding on Amneal’s intermediate product, rather than its final, commercial-sized product. This resulted in a failure to recognize the proper subject of the infringement inquiry. The Court disagreed, finding that Amneal represented to the FDA that its Day 1 Batch samples were representative of its ANDA product, met Amneal’s ANDA specification, and thus represented its final ANDA product. The Court distinguished Ferring B.V. v. Watson Labs, Inc.-Fla., 764 F.3d 1401, 1409 (Fed. Cir. 2014), wherein it found “that Watson could not sell uncoated tablets because they did not comply with Watson’s ANDA specification.”

Further, the Court found no clear error in the district court’s fact-finding of noninfringement. The parties presented conflicting expert testimony. The district court Page 11 found Amneal’s expert evidence “at least as consistent and credible” as Merck’s expert and concluded that Merck failed to prove infringement by preponderant evidence. Since the noninfringement finding is supported by the record, no clear error was present.

The Court noted that in Schering Corp v. Apotex Inc.,No. 09-6373, 2012 WL 2263292 (D.N.J. June 15, 2012), the district court addressed the same issue of whether a single peak or three peaks in Raman spectroscopy analysis were required to identify MFM. Evidence from the same expert as in this case was given “little weight because it [did] not identify three peaks” and concluded that Apotex did not infringe. The lower court opinion was affirmed by the Federal Circuit without opinion.

Read more:  Federal Bar member attorneys may access the full case summary by registered patent attorney B.C. “Bill” Killough in the March 2018 issue of Federal Circuit Case Digest.

B.C. Killough is a registered patent attorney based in Charleston, SC. On behalf of his clients, Bill has obtained more than 300 United States patents, participated in prosecuting more than 100 foreign patent applications and he has filed more than 1000 trademark applications with the US Patent and Trademark Offices.

Additionally, you may read the full opinion here.