Dusa Pharmaceuticals sues New England Compounding over acne med

In MercExchange v. eBay, the Court of Appeals for the Federal Circuit dealt with, among other issues, inducement of infringement. [see earlier post on IPBiz.] Under the patent law (35 USC 271(b)), "whoever actively induces infringement of a patent shall be liable as an infringer." The CAFC has construed that text to require proof of intent. There must be evidence that the inducer (in the above case, eBay; in the litigation below, New England Compounding Pharmacy) intended that induced party (in the above case, ReturnBuy; in the litigation below, the physicians) to perform an act incorporating all the limitations of the asserted claim(s). Further, the patentee must demonstrate that the inducer had knowledge of the infringing acts. In the MercExchange case, the CAFC found that there was no evidence that eBay induced ReturnBuy to use barcode scanners and printers to keep track of its inventory, and thus the CAFC found no inducement to infringe. This inquiry was very fine-tuned in the MercExchange decision. Although eBay required ReturnBuy to provide a digital image for the goods that ReturnBuy wanted to sell, the CAFC found no evidence that eBay induced ReturnBuy to use a digital camera, as required by the claim.

from "Drug makers mix it up" by Andrew J. Manuse, MetroWest Daily News:

-->A Framingham firm that makes medications from scratch is defending its sale of a drug for treating acne and other skin lesions.

Lawyers representing New England Compounding Pharmacy Inc. of Framingham and Dusa Pharmaceuticals Inc. of Wilmington will meet at U.S. District Court in Boston to argue whether the pharmacy's sale of the drug violates patents held by Dusa for the compound's use with a light therapy that makes it work.

The compound, known by its abbreviation "ALA," is applied to lesions on a patient's skin but doesn't actually do anything unless it is activated with a certain wavelength of "blue light," said William McNichol Jr., the lead counsel representing Dusa.

Dusa filed its patent-infringement lawsuit on Dec. 27 after the pharmacy, which does business as New England Compounding Center, allegedly faxed advertisements to doctors promoting its ability to produce ALA. In court documents, Dusa included a copy of one fax it claims the defendant sent to doctors in November. It read: "Are you treating acne patients with Blue Light Therapy? We may be able to help!"

"Dusa's position is that by sending out those unsolicited faxes, New England Compounding is inducing those physicians to unknowingly infringe Dusa's patents," said McNichol, an attorney at Reed Smith LLP in Philadelphia. "The law treats that the same way as if New England Compounding was infringing Dusa's patents themselves."

Dusa spent "millions of dollars" investing in licenses for the method, developed by Queen's University at Kingston, Ontario, and in building a business around the clinical effectiveness of that method, said McNichol.

By selling ALA to doctors, New England Compounding is taking advantage of Dusa's work and investment, he said.

But the lawyer representing the pharmacy yesterday argued that Dusa's patent does not cover the sale of ALA itself, and that Dusa's lawsuit and related actions are anticompetitive.

"Dusa's complaint completely ignores and misunderstands the compounding industry as a whole," said Dan Rabinovitz of the law firm Menard, Murphy & Walsh LLP in Boston. "Dusa may be unhappy with the fact that the physician has placed the order with New England Compounding rather than Dusa, but Dusa's patents do not -- and in fact cannot -- prevent a physician from selecting New England Compounding as the company to fill the prescription."

The pharmacy filed a response to Dusa's allegations last week. It also filed a counterclaim against the company, alleging that Dusa made "false and misleading remarks disparaging" the quality of the pharmacy's products and business practices.

"Employees of Dusa have been interfering with New England Compounding relationships with physicians in an unlawful way," said Rabinovitz.

Rabinovitz referenced a December statement Dusa released to the press, which read, in part, "We intend to protect against damage to our product's reputation that might arise from the use of what could be an unsafe copy of our products."

The focus of the counterclaim is to stop Dusa from interfering with the New England Compounding Pharmacy's attempts to do business, Rabinovitz said.

McNichol said Dusa was just defending its intellectual property, which, he said, it has the right to do. In January, the company also filed a patent-infringement lawsuit against The Cosmetic Pharmacy, of Tucson, Ariz., in which it references the ongoing suit with the New England Compounding Center.

Rabinovitz said Dusa's case was the first against the Framingham pharmaceutical company. The firm, located on Waverley Street, mixes medications that are either no longer manufactured, in short supply or not commercially available in the combination or form a patient needs.

Dusa is seeking a court injunction to stop the pharmacy from selling the compound and unspecified damages. In its counterclaim, New England Compounding is seeking a ruling that Dusa's patents are unenforceable as well as damages.