Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc.

889 F.3d 1274
CourtCourt of Appeals for the Federal Circuit
DecidedMay 2, 2018
Docket2017-1487
StatusPublished
Cited by18 cases

This text of 889 F.3d 1274 (Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., 889 F.3d 1274 (Fed. Cir. 2018).

Opinions

Dissenting opinion filed by Circuit Judge Schall.

Wallach, Circuit Judge.

Appellant Altaire Pharmaceuticals, Inc. ("Altaire") sought post-grant review of claims 1-13 ("the Asserted Claims") of Appellee Paragon Bioteck, Inc.'s ("Paragon") U.S. Patent No. 8,859,623 ("the '623 patent"). The U.S. Patent and Trademark Office's Patent Trial and Appeal Board ("PTAB") issued a final written decision determining that Altaire failed to prove that the Asserted Claims were unpatentable for obviousness over two production lots of Altaire's phenylephrine hydrochloride ophthalmic solution products, Lots #11578 and #11581,1 which are used to dilate patients' pupils. See Altaire Pharm., Inc. v. Paragon Bioteck, Inc. , No. PGR2015-00011 (P.T.A.B. Nov. 14, 2016) (J.A. 1-21).

Altaire appeals. We have jurisdiction pursuant to *127828 U.S.C. § 1295(a)(4)(A) (2012). We reverse-in-part, vacate-in-part, and remand.

BACKGROUND

I. The Relevant Facts

Phenylephrine contains a chiral center with two enantiomers known as R- and S-phenylephrine hydrochloride. J.A. 2; see J.A. 1150. The R-phenylephrine hydrochloride, but not the S-phenylephrine hydrochloride, is useful to dilate pupils. See '623 patent col. 6 ll. 21-30; see also J.A. 737. To determine the phenylephrine hydrochloride products' effectiveness, industry members measure the products' "chiral purity," which is the relative amount of each enantiomer expressed as a percentage. See '623 patent col. 1 ll. 15-20, col. 3 ll. 43-48; see also J.A. 750.

By 2000, Altaire was manufacturing R-phenylephrine hydrochloride products, including products containing 2.5% and 10% phenylephrine hydrochloride ophthalmic solution. J.A. 733. In 2011, Altaire and Paragon entered into an agreement to pursue U.S. Food and Drug Administration ("FDA") approval for Altaire's products. See J.A. 1909-13 ("the Agreement"). Pursuant to the Agreement, "Paragon shall be responsible for preparing and submitting the [new drug] applications [ ('NDAs') ] in support of the products," and "Altaire will provide and bear the costs for the chemistry, manufacturing, and controls ... in support of an NDA filing for the products." J.A. 1910 (capitalization modified).

Paragon submitted an NDA, and the FDA responded by recommending that Paragon, inter alia, "[c]onsider adding a chiral purity test to the d[r]ug product specification or provide a justification for not doing so." J.A. 773. In response, Altaire measured the optical rotation of Lot #11578, a 2.5% phenylephrine hydrochloride ophthalmic solution product, and Lot #11582, a 10% phenylephrine hydrochloride ophthalmic solution product, see J.A. 783-91; see also '623 patent col. 4 ll. 33-34 ("[I]t is known in the art chiral purity can be determined by optical rotation."). Altaire provided a summary of these optical rotation test results to Paragon, and Paragon submitted a supplementary NDA filing to the FDA, which approved Paragon's NDA in March 2013. J.A. 739; see J.A. 783-91. In addition to the optical rotation tests, Altaire conducted high performance liquid chromatography ("HPLC") testing on Lots #11578 and #11582, which it internally refers to as "TMQC-247." J.A. 11, 802.

In June 2013, Paragon's counsel proposed an amendment to the Agreement "to address [a] new patent application filing ... discussed with Altaire." J.A. 1840. Altaire responded that: "the formulation, processes[,] and controls applicable to the ... product[s] were developed solely by [Altaire's Chief Executive Mr.] Al Sawaya and Altaire[ ] and are ... the proprietary and confidential information of Altaire"; the Agreement "does not contemplate Paragon using such information to support a patent application"; and "any such patent application should identify either [Mr.] Al Sawaya or Altaire as the sole inventor." J.A. 1839. Although Paragon's counsel responded that they "look[ed] forward to further discussions," J.A. 1839, there is no indication in the record that Paragon's counsel responded to the substantive comments raised by Altaire.

In November 2013, Paragon filed a drug patent application that issued as the '623 patent. J.A. 22. Entitled "Methods and Compositions of Stable Phenylephrine Formulations," the '623 patent includes *1279thirteen claims. '623 patent col. 12 l. 39-col. 13 l. 14. Independent claim 1 is illustrative and recites:

A method of using an ophthalmic composition for pupil dilation, the composition comprising R-phenylephrine hydrochloride having an initial chiral purity of at least 95% and an aqueous buffer, wherein the chiral purity of R-phenylephrine hydrochloride is at least 95% of the initial chiral purity after 6 months, the method comprising:
administering the composition into an eye of an individual in need thereof, wherein the composition is stored between -10 to 10 degree Celsius prior to administration, and wherein the composition comprises R-phenylephrine hydrochloride having a chiral purity of at least 95% when administered after storage.

Id. col. 12 ll. 39-50. Dependent claims 2-13 depend from independent claim 1, either directly or indirectly. See id. col. 12 l. 51-col. 13 l. 14.

In March 2014, while the application that led to the '623 patent was being prosecuted, Paragon requested "all the work [Altaire] ha[s] on chiral purity" for its annual report to the FDA. J.A. 1606. In response, Altaire sent Paragon a report purporting to confirm that Altaire's TMQC-247 methodology accurately measures relative quantities of R- or S-phenylephrine hydrochloride. J.A. 1602; see J.A. 1536-601, 1603-05.

In April 2015, Altaire filed a complaint against Paragon in the U.S. District Court for the Eastern District of New York ("Eastern District"), alleging that Paragon breached a nondisclosure clause of the Agreement between the parties, see Appellant's Br. viii; Appellee's Br. vii, and Paragon responded by alleging that Altaire materially breached the nondisclosure clause and seeking the right to terminate the Agreement, J.A. 1012, 1020; see J.A. 1911-12 (Non-Disclosure Clause). In April 2017, Altaire filed another complaint against Paragon in the Eastern District, seeking a declaratory judgment of invalidity of the '623 patent. See Appellant's Br. viii; Appellee's Br. vii, 22-23. At the time of argument, both of these actions were pending.

II. Procedural History

In May 2015, Altaire filed a petition for post-grant review of the '623 patent, arguing that the Asserted Claims would have been obvious over Lots #11578 and #11581, see J.A. 37-114, and attaching the supporting declaration of Mr. Al Sawaya2 ("First Al Sawaya Declaration"), see J.A. 732-61.

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889 F.3d 1274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/altaire-pharmaceuticals-inc-v-paragon-bioteck-inc-cafc-2018.