Par Pharm., Inc. v. TWI Pharms., Inc.,

Case Name: Par Pharm., Inc. v. TWI Pharms., Inc., No. 2014-1391, 2014 U.S. App. LEXIS 22737 (Fed. Cir. Dec. 3, 2014) (Circuit Judges O’Malley, Wallach, and Hughes presiding; Opinion by O’Malley, J.) (appeal from D. Md., Blake, J.) (district court’s finding of invalidity was vacated because it misapplied the law of inherency)

Drug Product and Patent(s)-in-Suit: Megace® ES (megestrol acetate); U.S. Pat. No. 7,101,576 (“the ’576 patent”)

Nature of the Case and Issue(s) Presented: Par sued TWi for infringing its patent related to the use of nanosized megestrol formulations to “increase the body mass in a human patient suffering from anorexia, cachexia, or loss of body mass.” Although micronized megestrol formulations have been used to treat wasting in cancer patients for a long time, the absorption of micronized megestrol is reduced when administered to a patient in a fasting state. Par’s smaller, nanosized megestrol, on the other hand, exhibited a reduced food effect and greater absorption in fasting patients. Due to its lesser food effect, nanosized megestrol is particularly beneficial in treating those with diminished appetites, such as AIDS patients.

Par alleged that TWi’s ANDA product will infringe claims 1-2, 4-5, 7, 10, 12-17, 19, 21, 24 and 26-31 of the ’576 patent. After a bench trial, the district court found that the ’576 patent was obvious and invalid because the reduced food effect of nanosized megestrol was inherent in the prior art, even if it was previously unknown. Because the lower court misapplied the law of inherency, the Federal Circuit vacated the district court’s obvious determination and remanded.

Why Par Prevailed:  Citing In re Oelrich, 666 F.2d 578 (C.C.P.A. 1981), the Federal Circuit noted that inherency only exists if the claim element is the “natural result” of a prior-art combination. Therefore, for inherency to apply, the party challenging the patent must demonstrate that “the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art.” Because the district court did not hold TWi to this standard, its obviousness determination was flawed.

At trial, TWi’s expert testified that an improvement in bioavailability “necessarily results” in a reduced food effect. TWi also submitted prior art evidence that reducing the size of a particle improves its bioavailability. Since Par’s formulation decreased the size of the megestrol particles, the district court reasoned that the bioavailability of the particles increased, and thus the food effect was reduced. Based on this logical chain, the court ruled that reduced food effect was inherently present in the prior art, rendering the ’576 patent obvious.

The Federal Circuit vacated the judgment below because the district court did not consider the specific limitations of the claims. Claim 1 of the ’576 patent requires “no substantial difference in C_max” when administered in fed and fasting states. Other claims require that the difference between C_max in fed and fasting states fall within a specific percentage. The Federal Circuit agreed that, while reducing the size of a particle could naturally result in a reduced food effect, TWi did not submit evidence that a reduction in particle size would naturally lead to no substantial difference in food effect, as called for by the claim. In other words, the possibility the reducing the size of the megestrol formulation could naturally result in the claim limitation is not evidence that it is a necessary result, and thus the limitation is not inherently present in the prior art. Although the Federal Circuit agreed that TWi had shown a motivation to combine the prior art with a reasonable expectation of success, the district court’s opinion, based on improper analysis, was vacated and the case remanded for further proceedings.