By: Karin C. Khan

            Defendants Dr. Reddy’s Laboratories Ltd., Dr. Reddy’s Laboratories, Inc. (“Reddy”) and Teva Pharmaceuticals USA, Inc. (“Teva”) appealed the district court’s judgment of enforceability in favor of Plaintiff Eisai Co. Ltd. and Eisai, Inc. (“Eisai”).

            Eisai’s U.S. Patent No. 5,045,552 (the ‘552 patent) claiming rabeprazole and its salts for suppressing gastric acid production was previously the subject of two abbreviated new drug applications filed by Reddy and Teva under the Hatch-Waxman Act.  Upon the filing of the drug applications, Eisai decided to sue both Reddy and Teva for patent infringement because these types of drug applications are considered an act of patent infringement.

            While Reddy and Teva conceded infringement of the ‘552 patent, both asserted that the ‘552 patent was unenforceable due to inequitable conduct.  Teva also asserted that the ‘552 patent was invalid on grounds of obviousness.  The district court had granted Eisai’s summary judgment motion finding that the ‘552 patent was valid and enforceable.  Then, after a bench trial, the district court found that Reddy and Teva infringed the ‘552 patent and failed to prove their claim of inequitable conduct. 

            The district court decided upon the issue of the ‘552 patent’s validity and enforceability in Eisai’s summary judgment motion that overcame Teva’s obviousness argument.  The Court of Appeals reviewed the third Graham factor in particular in order to analyze the structural similarities and differences between the claimed chemical compound and the prior art.  In doing so, this Court reviewed the prior art cited by Teva in support of its obviousness argument.

            The first reference taught a similar compound to rabeprazole, namely, lansoprazole.  The only difference between the two compounds is that lansoprazole has a trifluoroethoxy substituent and rabeprazole has a methoxypropoxy substituent.  The second reference taught a different compound, but one that was directed as gastric acid inhibition.  The third reference covered a class of anti-ulcerative compounds with a core structure common to the compounds already referenced.

            The Court explained that one skilled in the art must be able to begin with a lead compound for developing a gastric acid inhibiting compound.  Even though Teva argued that lansoprazole was the lead compound that led to developing rabeprazole, the Court instead noted the differences between anti-ulcer action and gastric acid inhibition and lansoprazole’s potential role as being a lead compound for developing new anti-ulcer compounds.  The Court also noted that the fluorinated substituent of lansoprazole increases lipophilicity, making it an especially advantageous property of the compound.  Thus, a skilled artisan would not be likely to use lansoprazole to develop rabeprazole by changing the most advantageous feature of lansoprazole.  Finally, the Court explained the considerations of a KSR analysis, which focuses on identifiable predictable solutions, only to comment on the unpredictability of solutions in the chemical arts.

            In the second major issue before the Court, the district court had reviewed five allegations made by Reddy and Teva that Eisai had misled the United States Patent and Trademark Office (“USPTO”).  Of particular importance were the first two allegations, which asserted that (1) Eisai failed to disclose its own co-pending application claiming an “ethyl homolog” (also known as “SHKA 661”) of rabeprazole and (2) withholding rejections from its co-pending application that would have been applicable to the prosecution of the ‘552 patent.

            As to the first allegation, the Court noted that calling the SHKA 661 an “ethyl homolog” of rabeprazole was misleading since SHKA 661 has one less methylene unit on its pyridine ring making it an ethoxy group rather than a propoxy group as in rabeprazole.  While the Court believed the two compounds to be separately patentable, it still noted that the two applications were material enough to warrant encouraging the disclosure by Eisai of the co-pending application.  Even so, the Court did not find that the co-pending application was material such that Eisai should have disclosed this information or that Eisai had an intent to deceive the USPTO by not disclosing its co-pending application. 

            As to the second allegation, the Court did not consider whether the rejections in the co-pending application were material to the prosecution of the ‘552 patent since the district court did not even find proof of intent to deceive.  The district court had reviewed a series of communications between one of Eisai’s inventors and its patent agent regarding a presentation to a pharmaceutical trade industry group as well as witness testimony relating thereto.  This Court agreed with the district court’s review and noted that even though Eisai might have disclosed the rejections in the co-pending application, it certainly did not rise to the level of inequitable conduct.

            Overall, the Court of Appeals affirmed all of the district court’s findings on inequitable conduct and the ‘552 patent’s validity and enforceability.