JOLT Digest

Supreme Court Expands Generic Drug Manufacturers’  Right to Challenge Scope of Patents
By Elettra Bietti – Edited by Lauren Henry

Caraco Pharmaceutical Laboratories, Ltd. v Novo Nordisk A/S, No. 10–844 (U.S. April 17, 2012)
Slip opinion

The Supreme Court reversed the Federal Circuit Court of Appeals’ ruling that denied a generic manufacturer the right to compel a brand manufacturer to correct misstatements regarding uses covered by a patent when those corrections would have allowed the generic manufacturer to market their generic drug.

The Court held that a generic manufacturer may rely on 21 U.S.C. § 355(j)(5)(C)(ii)(I), which grants a statutory counterclaim to generic manufacturers sued for patent infringement, to compel a brand manufacturer to modify a use code if it wrongly describes a patent as covering uses which it does not in fact cover. In so holding, the court slightly shifts balance of power in the pharmaceutical industry away from patentees and toward generic manufacturers.

Patently-O provides an overview and describes it as an example of a “nuanced” Supreme Court case. Alison Frankel, writing for Reuters, notes that the decision represents a slight victory for generic manufacturers over the brands. (more…)

Federal Circuit Rules Federal Law Trumps State Law in Interpretation of Patent Ownership Rights
By Flora Amwayi – Edited by Jonathan Allred

Abraxis Bioscience, Inc. v. Navinta LLC, 2009-1539, 2011 WL 873298 (Fed. Cir. Mar. 14, 2011)
Slip Opinion

The Federal Circuit denied a petition for an en banc rehearing of a Federal Circuit panel order dismissing Abraxis’ patent infringement case against Navinta. The court dismissed the case on the grounds that Abraxis did not have standing to sue for infringement since it did not own the patents at the time the original complaint against Navinta was filed. The original panel order hinged on whether interpretation of patent ownership should be governed by New York state law (as outlined in choice of law provisions) or by federal rules of patent ownership and assignment (Federal Circuit law). See 35 U.S.C. § 261.

By denying the en banc rehearing, the court affirmed the panel’s holding that the resolution of ownership and assignment question is an issue of Federal Circuit law since it determines a plaintiff’s standing to sue for patent infringement. In so holding, the court stated that “state law cannot retroactively override federal law to revive failed agreements.”

The Patent Law Blog provides an overview of the case. The Patent Prosecutor criticizes the decision as a refusal to correct the Federal Circuit’s intrusion into state contract law. (more…)

By Dorothy Du

IBM Creation “Watson” May Have the Potential to Assist in Legal Research

Watson, an IBM super computer four years in the making, competed on the popular TV game show Jeopardy! on February 14 through 16. On the 16th, Watson prevailed against former Jeopardy! champions Ken Jennings and Brad Rutter, tallying in at a total of $77,147 in winnings — more than triple each human contestant’s totals, as PC World reports. Robert Weber, IBM’s senior vice president of legal and regulatory affairs and general counsel explained in The National Law Journal that Watson could be useful in performing some of the basic legal research that junior associates are often assigned. PC World explains that Watson is equipped with a natural language processing system called DeepQA that allows it to understand a complex question, even one involving wordplay; the system uses six million logic rules in order to mine 200 million pages of content for human-like answers. Weber believes DeepQA could prove useful for “gathering facts and identifying ideas when building legal arguments” and says the technology could even “come in handy, near real-time, in the courtroom.”  Jennifer Chu-Carroll, who helped create Watson, told Computer World: “Watson is a significant step, allowing people to interact with a computer as they would a human being.”

Recent Cases Support the Use of Internet to Assist Counsel in Voir Dire

ABA Journal reports that conducting Internet searches to uncover personal details about potential jurors in order to facilitate in jury selection during voir dire has become increasing popular. Quinn Emanuel reports that a New Jersey appellate court in Carino v. Muenzen held that it was unreasonable to prohibit counsel’s use of the Internet during jury selection. And the Missouri Supreme Court in Johnson v. McCullough affirmed a decision to grant a new trial because a juror had failed to disclose his prior lawsuits, but added the qualification that in light of advances in technology allowing access to information about potential jurors, it was appropriate to increase the burden on parties to bring such matters to the court’s attention earlier. With more than 500 million people on Facebook, 175 million on Twitter, and over 70 million actively using LinkedIn, the Internet has become a revolutionary tool allowing jury consultants and trial lawyers to uncover facts that may be may not be discoverable via traditional jury questionnaires. Internet searches allow counsel to select jurors that with particular political affiliations, community involvement, sexual orientation, or income level, Reuters reports.

FDA Deputy Commissioner Speaks About New Food Safety Modernization Act (FSMA)

On February 17, Michael Taylor, FDA Deputy Commissioner for Foods gave his first speech on imports since the FDA Food Safety Modernization Act (FSMA) was signed into law by President Obama this year, Quality Assurance Magazine reports. The FSMA represents the biggest reform of U.S. food safety regulation in decades, and was drafted partially in response to a number of high-profile food-related incidents between 2007 and 2010, as Sidley Austin details.  Taylor indicated that, in light of the fact that 50 percent of our fresh fruits, 20 percent of our vegetables, and 80 percent of our seafood is imported, the FDA sought to establish a new paradigm for regulating imported food through the FSMA, according to the FDA. Taylor stated that “food safety is not only the right thing to do, it is good business,” noting “the major disruptions to our economies and to international trade that occur in the wake of major foodborne illness outbreaks and product recalls.” Food Safety News says the new law gives the FDA new tools to manage imports, such as the power to create agreements with exporting countries that facilitate inspection and certification of food in the country of origin.

California Judge Dismisses Another Class Action Lawsuit Against Pacemaker Manufacturer

MassDevice reports that Judge Manuel Real of the U.S. District Court for the Central District of California recently dismissed a class-action lawsuit against Guidant Corp., a subsidiary of medical device company Boston Scientific. The plaintiff, who had the “Insignia 1298” pacemaker implanted in 2004, was understandably concerned when he heard in the news that pacemakers like his were failing, explains Drug and Device Law. Rather than waiting or undergoing surgery, he decided to sue Guidant Corp., the manufacturer of the pacemaker. The plaintiff’s complaint in Cohen v. Guidant Corp. was dismissed on grounds of “preemption and want of injury, facts, and particularity.”  According to the judge’s order, the complaint failed to provide factual support showing that there was a specific defect in the pacemaker. The court also stated that fear of future injury, in the absence of an actual manifestation of a defect that results in injury, is not a legally cognizable claim under California law.

Class action claim against Zicam manufacturer Matrixx reinstated by the Ninth Circuit

By Abby Lauer – Edited by Alissa Del Riego
Siracusano v. Matrixx Initiatives, Inc., No. 06-15677 (9th Cir. Oct. 28, 2009)
Opinion

The Ninth Circuit has unanimously reversed the U.S. District Court for the District of Arizona’s holding, which had dismissed a class action claim against Zicam manufacturer Matrixx for the complaint’s failure to adequately allege a violation of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).

In an opinion written by Tashima, J., the Ninth Circuit held that the District Court improperly relied on a statistical significance standard to determine that the plaintiffs’ complaint did not allege “a material misrepresentation or omission of fact.” Siracusano v. Matrixx Initiative, Inc., No. 06-15677 at 18 (9th Cir. Oct. 28, 2009). Instead of determining materiality as a matter of law, the district court should have allowed the jury to conduct a “fact-specific inquiry.” Siracusano v. Matrixx Initiative, Inc., No. 06-15677 at 20 (9th Cir. Oct. 28, 2009). In addition, the Ninth Circuit held that the lower court erred in dismissing plaintiffs’ complaint for failure to allege scienter on the part of Matrixx executives. The court reasoned that the inference that Matrixx executives knew about the possible link between Zicam and anosmia (loss of smell) before issuing allegedly misleading statements is at least as likely as any plausible opposing inference.

Phoenix’s East Valley Tribune provides an overview of the case. For further discussion of the opinion and pleading standard precedents, see The D & O Diary. For more information about homeopathic remedies, including Zicam, see this recent Washington Post article. (more…)

By Sarah Sorscher*, JD/MPH Candidate, Harvard Law School &
Sara Crager, MD/PhD Candidate, Yale
Editorial Policy

Text of H.R. 1427
Summary

Last week, Rep. Henry Waxman and several other representatives unveiled the latest version of a bill designed to lower the price of drugs by encouraging generic competition in biological products (“biologics”). Biologics are products derived from living processes and used to prevent, treat, or cure human illness. Most drugs, in contrast, are synthesized using chemical reactions.  Biologics include products such as vaccines, blood-derived products, antibodies, and recombinant proteins (e.g. proteins that modulate the immune system, or proteins that induce the proliferation of red blood cells). Over the past 30 years, a revolution in recombinant DNA technology has propelled the sub-field of biologics from the periphery into prominence in the biopharmaceutical industry. Three of the top 10 best-selling drugs in the U.S. in 2007 were biologics (Enbrel, Aransep, and Epogen), and biological products now represent some of the most expensive drugs on the market; annual per-patient treatment costs for one expensive drug topped $300,000 last year.

The new bill, H.R. 1427, dubbed the “Promoting Innovation and Access to Life-Saving Medicines Act,” is intended to introduce price competition in biologics by granting the FDA clear authority to approve generic, or “follow-on” biologics, which are comparable in safety and efficacy to biologics already on the market. The new legislation is modeled on the Hatch-Waxman Act of 1984, which allowed generic manufacturers to gain market approval by showing that their products were interchangeable, or bio-equivalent, with previously approved products, without the need to preform additional clinical trials. Until now, the FDA has been reluctant to allow for this type of abbreviated approval for biologics, which have historically been regulated under a different legal regime from other drugs. Although, as described in this testimony by an FDA official, the story is more complicated. Some proteins that were initially purified from human and animal tissues, such as insulin and human growth hormone, were categorized as drugs when they first obtained FDA market approval. Today these substances remain regulated as drugs, even though they are now synthesized using recombinant DNA technology, like many biologics.
(more…)