Auxilium Pharms., Inc. v. FCB I LLC

Case Name: Auxilium Pharms., Inc. v. FCB I LLC, Civ. No. 12-3084 (JLL), 2013 U.S. Dist. LEXIS 142462 (D.N.J. Oct. 2, 2013) (Hammer, M.J.) (Finding that defendants’ allegations meet the “but-for materiality” and “intent to deceive” prerequisites of an inequitable conduct claim, the court granted the instant motion to amend.)

Drug Product and Patent(s)-in-Suit: Testim® (testosterone gel); U.S. Patent Nos. 7,320,968 (“the ’968 patent”), 7,608,605 (“the ’605 patent”), 7,608,606 (“the ’606 patent”), 7,608,607 (“the ’607 patent”), 7,608,608 (“the ’608 patent”), 7,608,609 (“the ’609 patent”); 7,608,610 (“the ’610 patent”), 7,935,690 (“the ’690 patent”), 8,063,029 (“the ’029 patent”); and 8,178,518 (“the ’518 patent”)

Nature of the Case and Issue(s) Presented: Auxilium filed a complaint against Watson for infringement of the patents-in-suit, contending that Watson’s ANDA paragraph IV certifications directed to each of the patents-in-suit constitute patent infringement. On the final day to amend pleadings under the court’s scheduling order, Watson filed a motion for leave to amend its answer and counterclaims to add defenses and counterclaims related to inequitable conduct.

The patents-in-suit list one inventor, Robert J. Gyurik. Watson alleges Gyurik misrepresented to the PTO that he was the sole inventor. Watson alleges that before Gyurik filed any application, Conrex Pharms. Corp. (“Conrex”) had developed and tested a pharmaceutical composition comprising of testosterone (an androgen), a Hsieh enhancer (CPE-215), and a carbomer (a thickening agent). Watson further alleges that Conrex had developed and tested certain testosterone formulations, recorded the results, and submitted the information to Bentley Pharms., Inc. (“Bentley”), Gyurik’s employer at the time he filed two patent applications. Watson alleges that Gyurik, as a Bentley employee, had access to Conrex’s Formulation Assets, which were purchased by Bentley in 1999, before the patent applications and knew that Conrex had developed and tested compositions containing an androgen, a Hsieh enhancer, and a thickening agent. Watson further alleges Gyurik used CPE-215 in his studies and relied on it as the basis for the invention, essentially claiming it as his own. Based on these allegations, Watson argues that Conrex should have been named as a co-inventor. The court granted Watson’s motion to amend.

Why Watson Prevailed: The court rejected Auxilium’s argument that Watson’s motion to amend was futile because (i) it did not satisfy the high pleading standards of inequitable conduct that the Federal Circuit set forth in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), and (ii) Watson did not identify “a single, issued claim of the patents-in-suit with respect to its inequitable conduct allegations” and that Watson’s proposed Amended Answer identifies only certain preliminary, composition claims that were either cancelled during prosecution, or were subsequently amended to include additional limitations. Instead, the court found that Watson’s inequitable conduct allegations satisfied “but-for materiality” because Watson alleged sufficient facts supporting its claim that “but-for” the details laid out above, the PTO would not have issued the patent. Moreover, false claims of inventorship are highly material to patentability. Finally, the court reasoned that many of Auxilium’s arguments relate to the merits of Watson’s claims. Such arguments, however, are unavailing at the pleading stage because the court must accept all of Watson’s factual allegations, and any reasonable inferences that can be drawn from them, as true.

Next, the court found that Watson adequately pled Auxilium’s intent to deceive. While Auxilium argued that Watson must meet a “single most reasonable inference” standard, the Federal Circuit’s decision in Therasense did not address whether intent to deceive must be the single most reasonable inference able to be drawn at the pleading stage because that case was decided on the merits, not the pleadings.