Federal Circuit Discounts Commercial Success Evidence Even Though Alleged Invention Helped Secure Regulatory Approval

Last Thursday, in its decision in AstraZeneca LP v Breath Ltd., the Federal Circuit affirmed Breath Ltd.’s Paragraph IV ANDA challenge of AstraZeneca’s Orange Book patent covering sterile budesonide compositions.  It was undisputed that those of ordinary skill in the art would have been motivated to pursue a sterile budesonide composition, limiting the obviousness dispute to the difficulty and unpredictability of the means for achieving that end.  The District Court found that the prior art rendered the sterility solution obvious, and the Federal Circuit agreed.  In the process, the Court clarified the difference between commercial success and success in achieving regulatory approval.

In finding the claims obvious, the District Court found that a person of ordinary skill would have had a reasonable expectation of success in using four of five known prior art sterilization methods.  “[A]lthough each sterilization method had known disadvantages, a skilled artisan ‘had within her toolbox several methods to address them.’”  AstraZeneca argued that its claims were not obvious because none of the cited references “disclose[d] processes yielding a sterile, micronized budesonide product of sufficient purity and pharmaceutical acceptability.”  The Federal Circuit disagreed, finding that AstraZeneca was attempting to raise the generic drug company’s burden, which requires “only a reasonable expectation of success, not a guarantee[.]”  The panel seemed impressed with the District Court’s lengthy and detailed analysis of this issue, stating that, “[t]he district court’s findings on the prior art and the reasonable expectation of success span over ninety pages and include detailed examinations of multiple prior art references and testimony of numerous witnesses.”

AstraZeneca also argued that the district court improperly analyzed the objective indicia of nonobviousness.  In particular, AstraZeneca argued that the commercial success of the drug covered by the patent is evidence that the claims are nonobvious.  But the Federal Circuit held that the district court correctly discounted sales revenues.  While sterility was necessary to comply with FDA requirements, it did not drive the economic success of the product.  “Whether or not there is a nexus between the novel features of the patented product and the commercial success must be evaluated in terms of what is driving sales, not what is allowing the products to reach the shelf in the first place.”  In a decision from ANDA litigation concerning extended release oxycodone (OxyContin®) issued last month, the Southern District of New York embraced the same holding.  Purdue Pharma v. Amneal Pharm., LLC,[1] 13-cv-3372 (S.D.N.Y April 8, 2012) (“[T]he Court is hesitant to equate regulatory success to commercial success . . .”).

Thus, in assessing the weight to assign to commercial success, generic drug companies should make sure to focus the court on the correct inquiry.  Even if the claimed invention provided a feature that helped secure FDA approval, that does not qualify as evidence of commercial success unless the invention also drove sales.


[1] Carlson Caspers led the invalidity challenge during the underlying trial for this matter.