Novartis Pharms. Corp. v. Watson Labs., Inc.

Case Name: Novartis Pharms. Corp. v. Watson Labs., Inc., Fed. Cir. Nos. 2014-1799, -1800, 2015-1061, -1062, -1120, -1121, -1141, 2015 U.S. App. LEXIS 8374 (Fed. Cir. May 21, 2015) (Circuit Judges Lourie, Taranto, and Hughes presiding; Opinion by Lourie, J.) (Appeal from D. Del., Andrews, J.)

Drug Product and Patent(s)-in-Suit: Exelon^® (transdermal rivastigmine); U.S. Patents Nos. 6,316,023 ("the '023 patent") and 6,335,031 ("the '031 patent")

Nature of the Case and Issue(s) Presented: Novartis owns the patents-in-suit, which are directed to a transdermal patch delivering a pharmaceutical formulation of rivastigmine to treat dementia from Alzheimer’s disease. Watson and Par filed ANDAs to market a generic version of Novartis’ patch. In response, Novartis filed suit against the companies, alleging infringement of its patents. The cases were tried separately, but both focused on a common limitation in all claims requiring the presence of an “antioxidant” in the composition. The court construed the term “antioxidant” as “an agent of that reduces oxidative degradation.” Watson argued that Novartis’ patents were invalid as obvious in light of the prior art. The district court disagreed and held the patents valid and infringed by Watson. Par argued that it did not infringe the patents because its composition did not include an antioxidant. The court agreed with Par, and entered a verdict in its favor. Both cases were appealed to the Federal Circuit, which affirmed.

Why Novartis Prevailed:  On appeal, Watson argued that the district court erred in rejecting its argument that Novartis’ patents were obvious. Watson claimed that U.K Patent Application 2 203 040 (“GB ’040”) taught every limitation of Novartis’ patents, except for an antioxidant. However, the addition of an antioxidant, Watson contended, was obvious in light of U.S. Patent Number 4,948,807 (“the ’807 patent”) and Elmalem, a prior-art article. The Federal Circuit found that Watson failed to meet its burden in proving obviousness. Turning first to the ’807 patent, the Federal Circuit relied on the district court’s finding that the ’807 patent did not disclose any evidence that rivastigmine undergoes oxidative degradation. The ’807 patent teaches alternatives to be used in place of the chemically unstable formulation physostigmine, which must be prepared with an antioxidant. One disclosed alternative is rivastigmine. In addition, the ’807 patent notes generically that buffers, preservatives, antioxidants, etc. may be added “as required” to the formulation. The court reasoned this disclosure was not sufficient to teach a rivastigmine/antioxidant combination because, without prior knowledge that rivastigmine oxidatively degrades, a person of ordinary skill would not be motivated to incorporate an antioxidant into the formulation. Since the ’807 patent did not disclose that rivastigmine undergoes oxidative degradation, it was not sufficient to render Novartis’ patents obvious. The court’s determination regarding the Elmalem article amounted to a battle of the experts. Like the ’807 patent, Elmalem contrasted physostigmine, a low stability compound, with other, more stable compounds, including rivastigmine. Both parties submitted expert testimony regarding the understanding of a person of ordinary skill at the time. After considering this evidence, the district court concluded that a person of ordinary skill would not know that rivastigmine oxidatively degrades, and thus would not have thought to combine an antioxidant with rivastigmine. Ultimately, the Federal Circuit held that Watson did not demonstrate that a rivastigmine formulation was susceptible to degradation. Thus, there was no motivation to combine GB ’040 with an antioxidant.

Why Par Prevailed: Par’s formulation included rivastigmine and acetaldehyde. At trial, Novartis contended that acetaldehyde was an antioxidant. Par argued that it was not. Acetaldehyde is a reducing agent but not all reducing agents are antioxidants. Although a reducing agent may reduce oxidative degradation by undergoing sacrificial oxidation, it does not necessarily do so. The burden was on Novartis to prove that acetaldehyde reduces oxidative degradation of the rivastigmine compound. It was unable to do so. While Novartis was able to describe behavior based on its expert testing, it did not meet its burden. Further, the Federal Circuit reiterated that it is the job of the district court to evaluate expert testimony and to determine its credibility. The district court did so here and found that Novartis’ expert’s testing did not demonstrate that acetaldehyde reduced oxidative degradation.