Insite Vision Inc. and Inspire Pharmaceuticals, Inc. v. Sandoz, Inc., No. 2014-1065, 2015 U.S. App. LEXIS 5717 (Fed. Cir. Apr. 9, 2015) (Linn, J.). Click Here for a copy of the opinion.

Pfizer owns U.S. Pat. No. 6,861,411, which claims a method of treating an ocular infection by administering topical azithromycin. Insite owns three patents (US. Pat. Nos. 6,239,113; 6,569,443 and 7,056,893), which claim a topical ophthalmic composition and a process for treating an eye with an azalide antibiotic. Inspire is licensed under all of these patents, which are listed in the FDA Orange Book as covering Insite's topical azithromycin solution (Azasite).  Sandoz sought to market a generic version of Azasite and filed an Abbreviated New Drug  Application (ANDA) with a Paragraph IV certification alleging that Orange Book patents for Azasite were invalid and/or not infringed.  Plaintiffs in turn sued Sandoz for infringement.

Before trial, the district court denied Sandoz's motion to amend the pre-trial order to include the file history of the '411 patent's European counterpart as evidence.  After the trial, the court ruled that Sandoz failed to show "by clear and convincing evidence that the asserted claims would have been obvious to a person of ordinary skill in the art." On appeal, Sandoz argued that the district court "misframed" the inquiry facing a person of ordinary skill in the art at the time of the invention.  Sandoz also appealed the court's refusal to admit the European file history into evidence.

The district court framed the obviousness inquiry as "whether it would have been obvious to a person of ordinary skill in the art at the time of the invention to develop a topical ophthalmic formulation containing azithromycin." Sandoz argued for a more specific question: "whether it would have been obvious that topical azithromycin could be used to treat conjunctivitis."  

The Federal Circuit found that factual findings support the district court's decision.  Azithromycin and its class of molecules were "known to be bacteriostatic, to have a limited spectrum of activity, and to require multiple doses per day to penetrate tissue." Furthermore, "the unique balance of log P, molecular weight, solubility, and charge" made the compound a poor candidate for treating ocular infections. The district court's broader question did not foreclose Sandoz from proving that it would have been obvious to use topical azithromycin to treat one infection.  The issue, according to the Court, was Sandoz's failure to carry its burden of proof on a properly framed question.

Sandoz relied on two references: one disclosing a topical formulation of erythromycin and the other disclosing an oral azithromycin formulation used to treat conjunctivitis. Sandoz argued that azithromycin is a "newer iteration" of erythromycin, and it would have been common sense to replace an old antibiotic with a new one.  Also, a person skilled in the art would have been motivated to use azithromycin topically, because it was well known that topical treatments for the eye are more effective than oral treatments.

The Federal Circuit agreed with district court and found that there were "innumerable" options for ophthalmic treatments, and some were known to be better than azithromycin.  It would have been a legitimate concern for those skilled in the art that azithromycin might not penetrate the ocular tissue given its high molecular weight, charge and insolubility in water.  In addition, oral azithromycin was delivered to the eye through phagocytosis, a bloodstream dependent process, which is a different process than for topical administration.

With respect to the exclusion of the late-proffered European file history, the Court considered five factors: (1) "the prejudice or surprise in fact of the party against whom the excluded witnesses would have testified" or the excluded evidence would have been offered; (2) "the ability of that party to cure the prejudice"; (3) the extent to which the new evidence would "disrupt the orderly and efficient trial of the case or of other cases in the court"; (4) any "bad faith or willfulness in failing to comply with the court's order"; and (5) the importance of the excluded evidence.  Pennypack Woods Home Ownership Ass'n, 559 F.2d 894, 904-05 (3rd Cir. 1977). The first two factors favored the Plaintiffs.  They would have to explain the differences between the EP and US patent law and the significance of comparing the US and EP file histories on the eve of trial.  The third and fourth factors were found to be neutral. The fifth factor did not favor Sandoz, because the district court properly questioned the relevance and probative value of the EPO file history under U.S. law.

Because there was no error in the district court's factual findings, the Federal Circuit affirmed.

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