DCT

1:17-cv-01837

Altaire Pharma Inc v. Paragon Bioteck Inc

Log In

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:17-cv-01837, E.D.N.Y., 04/03/2017
  • Venue Allegations: Venue is alleged to be proper because Defendant is deemed a New York resident due to the court’s personal jurisdiction, a substantial part of the events giving rise to the claims occurred in the district, and Defendant acquiesced to venue in prior litigation between the parties.
  • Core Dispute: Plaintiffs seek a declaratory judgment that Defendant's patent is invalid for improper inventorship and anticipation/obviousness, and is unenforceable due to inequitable conduct committed during prosecution; alternatively, Plaintiffs request a correction of inventorship.
  • Technical Context: The technology concerns stable ophthalmic formulations of phenylephrine, a drug used for pupil dilation, focusing on methods to maintain the chiral purity of the therapeutically active R-isomer over time.
  • Key Procedural History: The complaint alleges a pre-existing contractual relationship where Plaintiff Altaire provided confidential formulation data to Defendant Paragon. Paragon allegedly used this data to obtain the patent-in-suit without naming Plaintiff Assad Sawaya as an inventor. The complaint also references a prior Post-Grant Review (PGR) proceeding at the Patent Trial and Appeal Board (PTAB) and alleges Paragon made material misrepresentations to the U.S. Patent and Trademark Office (USPTO) during the patent's prosecution.

Case Timeline

Date Event
2000-01-01 Altaire began manufacturing and selling its Phenylephrine Products (approximate start)
2011-05-30 Altaire and Paragon entered into a supply and manufacturing Agreement
2012-09-21 Paragon filed New Drug Application (NDA) 203-510 for the Phenylephrine Products
2013-03-21 NDA 203-510 was approved by the FDA
2013-11-14 U.S. Patent Application No. 14/080,771 (leading to '623 patent) filed
2014-10-14 U.S. Patent No. 8,859,623 issued
2017-04-03 Complaint for Declaratory Judgment filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,859,623 - "Methods and Compositions of Stable Phenylephrine Formulations"

  • Patent Identification: U.S. Patent No. 8,859,623, "Methods and Compositions of Stable Phenylephrine Formulations", issued October 14, 2014.

The Invention Explained

  • Problem Addressed: The patent specification notes that commercially available phenylephrine solutions stored at controlled room temperature can "turn brown over time," which necessitates that the packages "cannot be used and thus create waste" (’623 Patent, col. 7:1-3). This suggests an underlying problem of chemical instability that affects the product's viability.
  • The Patented Solution: The invention is a method of using an ophthalmic composition of R-phenylephrine hydrochloride that maintains its chiral purity over time. The key step is storing the composition at a low temperature (between -10 to 10 degrees Celsius) for at least six months, which is claimed to substantially maintain the initial high chiral purity of the active R-isomer (’623 Patent, Abstract; col. 6:12-20). The patent presents data showing that a formulation stored at 2-8° C for six months maintained its 99.3% chiral purity (’623 Patent, Fig. 3; col. 11:56-60).
  • Technical Importance: By stabilizing the formulation and preserving the concentration of the therapeutically active R-isomer, the invention purports to ensure consistent drug potency and efficacy for pupil dilation while reducing product degradation and waste (’623 Patent, col. 8:26-33, col. 11:20-24).

Key Claims at a Glance

  • The complaint identifies independent claim 1 as a representative claim (Compl. ¶50).
  • Independent Claim 1:
    • A method of using an ophthalmic composition for pupil dilation, the composition comprising R-phenylephrine hydrochloride with an initial chiral purity of at least 95% and an aqueous buffer.
    • The method includes administering the composition to an individual's eye.
    • The composition is stored between -10° and 10° Celsius prior to administration.
    • After storage, the composition comprises R-phenylephrine hydrochloride with a chiral purity of at least 95%.
    • The chiral purity after 6 months of storage is at least 95% of the initial chiral purity.
  • The complaint notes that dependent claims recite further details regarding concentrations, packaging, and specific storage temperatures (Compl. ¶50).

III. The Accused Instrumentality

Product Identification

  • This is a declaratory judgment action. The instrumentality at issue is Plaintiffs' own "Phenylephrine Products," which have been manufactured and sold by Altaire since at least 2000 (Compl. ¶13). Altaire intends to file an Abbreviated New Drug Application (ANDA) to resume selling these products and anticipates that Paragon will sue for infringement of the ’623 Patent (Compl. ¶¶88, 90).

Functionality and Market Context

  • The complaint alleges that Altaire's Phenylephrine Products are ophthalmic solutions containing R-phenylephrine in 2.5% and 10% concentrations, used for pupil dilation (Compl. ¶¶12, 15, 19).
  • The product's instructions for use allegedly direct storage at temperatures between 2° C and 8° C (Compl. ¶17). Altaire alleges its products were sold in opaque bottles, consistent with packaging limitations in the patent's dependent claims (Compl. ¶22). An image of Altaire's opaque product bottle is provided in the complaint as evidence of the prior art product's packaging (Compl. ¶22, Ex. B).
  • The complaint asserts that these pre-existing products, which Paragon allegedly used to obtain the ’623 Patent, are the very subject of the patent's claims and form the basis for the invalidity and unenforceability counts (Compl. ¶¶53, 57).

IV. Analysis of Infringement Allegations

The complaint does not contain a formal claim chart. The following table summarizes Altaire's allegations regarding its own prior art product's features, which it contends meet the limitations of the ’623 Patent’s claims. This forms the basis for Altaire's assertion of a justiciable controversy and its claims of invalidity.

'623 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality (Altaire's Prior Art Product) Complaint Citation Patent Citation
A method of using an ophthalmic composition for pupil dilation... administering the composition into an eye of an individual in need thereof Altaire's Phenylephrine Products are ophthalmic compositions used for pupil dilation, and the package insert instructs users to place drops into the eye. ¶¶19, 105 col. 11:40-48
the composition comprising R-phenylephrine hydrochloride having an initial chiral purity of at least 95% and an aqueous buffer Altaire's products contain R-phenylephrine, use an aqueous buffer, and were allegedly 100% chirally pure initially. A PTAB decision found that the products met this limitation. ¶¶15, 89, 109 col. 11:41-43
wherein the composition is stored between -10 to 10 degree Celsius prior to administration The product insert for Altaire's products directs consumers to store them at temperatures between 2° C and 8° C, which is within the claimed range. ¶¶17, 109 col. 11:49-50
wherein the composition comprises R-phenylephrine hydrochloride having a chiral purity of at least 95% when administered after storage Altaire alleges its products contained no S-phenylephrine after being stored in cold storage for longer than 6 months, and thus the chiral purity remained at least 95%. ¶¶25-26, 106 col. 11:51-col. 12:2
wherein the chiral purity of R-phenylephrine hydrochloride is at least 95% of the initial chiral purity after 6 months The complaint alleges that after at least 6 months of cold storage, the chiral purity of its products was at least 95% of the initial purity. The complaint also asserts that phenylephrine's chiral purity does not degrade under these conditions. ¶25, 109-110 col. 11:44-46
  • Identified Points of Contention: The core of the case is not a dispute over claim scope or technical operation in a traditional infringement sense. Instead, the central questions are historical and factual:
    • Derivation & Inventorship: Was the subject matter claimed in the ’623 Patent conceived and reduced to practice by Altaire's Assad Sawaya and provided to Paragon under a confidentiality agreement, as the complaint alleges? (Compl. ¶¶28, 32-33, 95).
    • Prior Art Status: Does Altaire's Phenylephrine Product, allegedly on sale and in public use since 2000, qualify as invalidating prior art under 35 U.S.C. § 102? (Compl. ¶¶13, 16, 105).
    • Inequitable Conduct: Did Paragon and its attorneys intentionally conceal Altaire’s prior art product and its true inventor from the USPTO? The complaint points to a declaration submitted by Paragon inventor Patrick Witham, which allegedly contained a misleading chromatogram and false statements about prior art storage conditions, as evidence of intent to deceive the examiner (Compl. ¶¶70-71, Ex. M).

V. Key Claim Terms for Construction

  • The Term: "substantially maintains an initial chiral purity"
  • Context and Importance: This term is central to the patent's claim of stability. The patent itself provides a definition ("not more than 15% deviation of the initial purity") but also provides examples where the purity is maintained at 99.3% with essentially no deviation (’623 Patent, col. 7:42-44; Fig. 3). The complaint alleges that Altaire's prior art product inherently met this limitation because its chiral purity "does not degrade over time" under the specified storage conditions (Compl. ¶110). Practitioners may focus on this term to argue whether the alleged stability is an inherent property of any high-purity R-phenylephrine formulation when refrigerated, or if it represents a non-obvious discovery.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification explicitly defines the term as allowing "not more than 15% deviation of the initial purity," which could be argued to encompass a measurable degree of degradation (’623 Patent, col. 7:42-44).
    • Evidence for a Narrower Interpretation: The abstract and summary state the invention maintains the "initial chiral purity," and the primary example (Figure 3) shows the purity is maintained at 99.3% after 6 months, suggesting little to no degradation. A party could argue the "15% deviation" language is merely an outer bound and the core invention is near-perfect stability (’623 Patent, Abstract; col. 11:56-60).

VI. Other Allegations

  • Willful Infringement: The complaint does not allege willful infringement by Paragon. However, it alleges that Paragon's own conduct in obtaining the patent was willful and intentional, forming the basis for the inequitable conduct claim. The complaint alleges that Paragon and its attorneys "knowingly, intentionally, and willfully omitted Assad Sawaya as a sole or joint inventor" and "deliberately and deceptively intended to omit" him with the intent to deceive the USPTO (Compl. ¶¶67, 74).

VII. Analyst’s Conclusion: Key Questions for the Case

This declaratory judgment action appears to turn on three primary questions of fact and intent rather than claim construction:

  1. A core issue will be one of inventorship and derivation: Can Altaire prove with corroborating evidence that its employee, Assad Sawaya, was the true inventor of the stable formulation method and that Paragon derived the invention from confidential disclosures made by Altaire?

  2. A key evidentiary question will be one of inequitable conduct: Does the evidence, including communications between the parties and submissions to the USPTO, establish that Paragon and its counsel acted with a specific intent to deceive the patent examiner by concealing Altaire's alleged prior art and Mr. Sawaya's role as inventor?

  3. A dispositive validity question will be one of prior public use and sale: Can Altaire demonstrate that its own Phenylephrine Products—allegedly embodying all limitations of the asserted claims—were in public use or on sale in the U.S. more than one year before the patent's November 14, 2013 filing date, which would render the patent invalid under 35 U.S.C. § 102?