DCT

2:06-cv-02768

Apotex Inc v. Cephalon Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:06-cv-02768, E.D. Pa., 06/26/2006
  • Venue Allegations: Venue is alleged to be proper as Defendant Cephalon, Inc. is a corporation organized in Delaware with its principal place of business in Frazer, Pennsylvania, and transacts business within the district.
  • Core Dispute: Plaintiff Apotex, a generic drug manufacturer, alleges that Defendant Cephalon entered into anti-competitive "reverse payment" settlement agreements with other generic drug manufacturers (the "Generic Defendants") to unlawfully delay the market entry of generic modafinil, and seeks a declaratory judgment that Cephalon's key patent is invalid, unenforceable, and not infringed.
  • Technical Context: The dispute centers on formulations of modafinil (marketed by Cephalon as Provigil®), a wakefulness-promoting agent used to treat disorders such as narcolepsy.
  • Key Procedural History: The complaint alleges that after the Generic Defendants filed Abbreviated New Drug Applications (ANDAs) with Paragraph IV certifications challenging Cephalon's patent, Cephalon sued them for infringement. Subsequently, Cephalon entered into settlement agreements with each of the Generic Defendants, allegedly paying them to delay the launch of their generic products until at least 2012. The complaint’s central thesis is that these settlements were based on Cephalon’s knowledge that its patent was procured through inequitable conduct and was invalid over prior art and activities by a French company, Laboratoire L. Lafon.

Case Timeline

Date Event
1986-01-31 U.S. Patent No. 4,927,855 Priority Date
1990-05-22 U.S. Patent No. 4,927,855 Issue Date
1994-10-06 U.S. Reissue Patent No. RE 37,516 Original Application Filing Date
1997-04-08 Original U.S. Patent No. 5,618,845 Issue Date
1998-12-24 FDA approves Cephalon's New Drug Application for Provigil®
1999-04-01 Cephalon files reissue application for the '845 patent
2002-01-15 U.S. Reissue Patent No. RE 37,516 Issue Date
2002-12-24 Generic Defendants (Barr, Ranbaxy, Mylan, Teva) file ANDAs
2003-03-28 Cephalon files infringement suit against the Generic Defendants
2005-03-30 Apotex files its ANDA for generic modafinil
2005-12-09 Cephalon announces settlement with Teva
2005-12-22 Cephalon announces settlement with Ranbaxy
2006-01-10 Cephalon announces settlement with Mylan
2006-02-01 Cephalon announces settlement with Barr
2006-06-26 Complaint Filing Date

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

The complaint seeks a declaratory judgment of non-infringement, invalidity, and unenforceability for U.S. Reissue Patent No. RE 37,516. It also seeks a declaratory judgment of non-infringement for U.S. Patent No. 4,927,855, but provides no substantive allegations regarding this patent beyond noting it was not being asserted by Cephalon and was nearing expiration (Compl. ¶23). The analysis below focuses on the ’516 Reissue patent, which is the subject of all substantive counts.

U.S. Reissue Patent No. RE 37,516 E - Acetamide Derivative Having Defined Particle Size

  • Patent Identification: U.S. Reissue Patent No. RE 37,516 E, Acetamide Derivative Having Defined Particle Size, issued January 15, 2002.

The Invention Explained

  • Problem Addressed: The patent does not explicitly state a problem but implicitly addresses the challenge of achieving consistent therapeutic effects with the drug modafinil. The summary of the invention states a discovery that "the size of modafinil particles is important to the potency and safety profile of the drug" (RE 37,516 Patent, col. 2:11-13).
  • The Patented Solution: The invention is a pharmaceutical composition containing modafinil particles of a specific, controlled size. By defining the particle size—for instance, requiring a "substantially homogeneous mixture" where at least 95% of particles are smaller than about 200 microns—the patent purports to control the drug's dissolution rate and bioavailability (RE 37,516 Patent, col. 10:4-11; col. 5:15-24). This control is presented as a way to ensure a more reliable and safe therapeutic effect compared to formulations with less-defined or larger particle sizes (RE 37,516 Patent, col. 5:20-24).
  • Technical Importance: For pharmaceutical compounds with low solubility, controlling particle size is a known method to enhance the rate of dissolution, which in turn can improve absorption and bioavailability, potentially leading to more consistent patient outcomes.

Key Claims at a Glance

The complaint seeks a declaratory judgment against the patent generally. The broadest independent claim provides a representative basis for analysis.

  • Independent Claim 1:
    • A pharmaceutical composition comprising a substantially homogeneous mixture of modafinil particles,
    • wherein at least about 95% of the cumulative total of modafinil particles in said composition have a diameter of less than about 200 microns (μm).
  • The complaint challenges "some or all of the claims" of the patent (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

  • The "instrumentality" at issue is Plaintiff Apotex's proposed generic modafinil drug product, for which it filed ANDA No. 77-667 (Compl. ¶89).

Functionality and Market Context

  • The complaint describes the product as a "generic version of Provigil®" (Compl. ¶89). As an ANDA product, it is intended to be a therapeutic equivalent to Cephalon's branded drug, used for treating sleepiness associated with conditions like narcolepsy (Compl. ¶¶16–17).
  • The complaint does not provide sufficient detail for analysis of the specific technical characteristics of Apotex's proposed product, such as its formulation or particle size distribution. The basis for the non-infringement allegation is a Paragraph IV certification filed with the FDA, but the specific technical grounds for that certification are not detailed in the complaint (Compl. ¶173).

IV. Analysis of Infringement Allegations

The complaint is a declaratory judgment action seeking a finding of non-infringement, invalidity, and unenforceability; it does not contain infringement allegations made by Cephalon against Apotex. Instead, it proactively asserts that the '516 Reissue is invalid and unenforceable, thereby precluding any finding of infringement by Apotex's product. The complaint does not provide a claim chart or a narrative theory of non-infringement. Its focus is on invalidating the patent.

No probative visual evidence provided in complaint.

Identified Points of Contention

The complaint raises numerous, detailed questions regarding the validity and enforceability of the '516 Reissue patent, which form the core of the dispute.

  • Inventorship & Derivation: The complaint repeatedly alleges that the core invention—the recognition of particle size's importance and the development of modafinil tablets with specific particle distributions—was the work of scientists at a French company, Laboratoire L. Lafon, not the named Cephalon inventors (Compl. ¶¶39, 41, 55). This raises a fundamental question of derivation under 35 U.S.C. § 102(f) (pre-AIA).
  • Prior Art & Public Use/On-Sale Bar: The complaint alleges that Lafon manufactured, characterized, and sold modafinil tablets and API to Cephalon prior to the patent's critical date of October 6, 1993 (Compl. ¶¶43, 48–49). It further alleges that these prior products "read directly on the composition claims" (Compl. ¶48). This raises the question of whether the claimed invention was anticipated or rendered obvious by prior art, or barred from patentability by the on-sale or public use provisions of 35 U.S.C. § 102(b) (pre-AIA).
  • Inequitable Conduct: The complaint alleges that the named inventors and their attorneys knew of Lafon's role, the prior sales, and pre-existing data on particle size but intentionally withheld this "material information" from the PTO with deceptive intent during the prosecution of both the original and reissue patents (Compl. ¶¶32, 39, 43, 53). This raises the question of whether the '516 Reissue is unenforceable due to inequitable conduct.

V. Key Claim Terms for Construction

The Term: "substantially homogeneous mixture"

  • Context and Importance: This term defines the required uniformity of the particle population. The plaintiff's invalidity case rests on prior art tablets made by Lafon. Whether those earlier batches qualify as a "substantially homogeneous mixture" will be critical. Practitioners may focus on this term to determine if it implies a specific statistical distribution that distinguishes it from what was allegedly sold before the critical date.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The term itself is not explicitly defined with numerical limits, which may support a more general, qualitative meaning of uniformity.
    • Evidence for a Narrower Interpretation: The specification discusses the ideal ratio of median:mean:mode as 1:1:1 and notes that a "standard deviation of less than about 25 between the mean, median and mode measurements is acceptable" ('516 Patent, col. 3:9–16). This language could be used to argue for a more stringent, quantitative requirement for what constitutes a "substantially homogeneous" mixture.

The Term: "a diameter"

  • Context and Importance: The patent claims are tied to particle "diameter." However, the patent specification and the complaint both acknowledge that different measurement techniques (e.g., Coulter Counter vs. Hiac/Royko) yield different results for the same batch of particles ('516 Patent, col. 3:36-51). The enforceability of the claims could depend on which measurement method is controlling, as this would affect any comparison to prior art.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim does not specify a measurement method, potentially allowing for any reasonable method known in the art.
    • Evidence for a Narrower Interpretation: The patent states that its "value ranges provided above are relative and are most preferably to be considered in view of utilization of instruments and operating systems manufactured by Hiac/Royko" ('516 Patent, col. 3:46-51). This could be argued to tie the claim term "diameter" to a specific measurement technology, thereby narrowing its scope.

VI. Other Allegations

  • Indirect Infringement: This is not alleged, as the action is for declaratory judgment of non-infringement.
  • Willful Infringement: Willfulness is not alleged against Apotex. Instead, the complaint alleges that Defendant Cephalon and the Generic Defendants knew the '516 Reissue was invalid or unenforceable when they entered into the settlement agreements (Compl. ¶125). This allegation of knowledge is not for patent infringement damages but serves as a basis for Apotex's claims of monopolization under the Sherman Act and patent misuse (Compl. ¶¶130, 157-159).

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

  • A central issue will be one of historical fact and inventorship: What was the true nature and timing of the work performed by Lafon scientists versus the named Cephalon inventors? The case's viability appears to depend heavily on evidence establishing that the claimed invention—linking a specific particle size distribution of modafinil to its therapeutic profile—was conceived and reduced to practice by Lafon and sold to Cephalon before the patent’s critical date.
  • A related question is one of inequitable conduct: Assuming the factual allegations are proven, the key legal determination will be whether the failure to disclose Lafon's role, pre-critical date sales, and associated technical data to the PTO constituted a breach of the duty of candor sufficient to render the '516 Reissue patent unenforceable.
  • Finally, the case presents a significant antitrust question: Irrespective of the patent's ultimate validity, the court will need to determine whether the settlement agreements between Cephalon and the Generic Defendants, which allegedly involved substantial payments to delay generic entry, constitute an unlawful restraint of trade under the Sherman Act.