Saturday, April 16, 2005

Lilly wins Zyprexa case at district court level

Coverage by Jeff Swiatek in the Indianapolis Star noted that Lilly's U.S. patent 5,229,382, directed to the composition of matter of Zyprexa, weathered a 12-day trial and a stiff legal assault on six claims in federal district court in Indianapolis (before Judge Richard L. Young). Generic companies including Ivax, Dr. Reddy's and Teva had asserted during the trial last year that Lilly illegally double-patented Zyprexa (an issue that led to the demise of later patents on Prozac), misled the patent office in applying for the patent (inequitable conduct, which had been a widely reported charge in this particular case), and got a patent that was obvious at the time to the average drug researcher (obviousness under 35 USC 103). The day after Young's ruling (the ruling was on April 14, 2005), Lilly's stock price jumped $2.91 a share, closing at $58.07 on Friday, April 15.

Some of the quotes in Swiatek's piece attracted my attention:

With such a battle-tested case, the appeals court tends to be more reluctant to overturn a district court's opinion, according to experts.

"Typically, the hardest (case) to overturn (on appeal) is a decision that follows a full-blown trial, like this," said Nicholas Groombridge, a partner and patent expert at the New York law firm of Weil, Gotshal & Manges. "The court of appeals can be very reluctant to substitute its views" for a judge who presided at a lengthy trial.

One need only go back to the Apotex case on paroxetine to find a situation wherein the Federal Circuit was quite willing to substitute its views for those of Judge Posner (of the 7th Circuit, sitting by designation as the trial court judge). In fact, they substituted their views twice. There are plenty of other examples. And one recalls that the reversal rate at the CAFC is about 50%.

Lilly President Sidney Taurel noted: in drug patent cases, "there is no composition-of-matter patent that's been held up at the district court level and overturned on appeal." [One recalls that in the nabumetone [RELAFEN] case, the composition of matter claim of the '639 patent was found invalid both at the district court and appellate level.]

Groombridge also noted: Young's 222-page decision, which states repeatedly that the generic challengers "failed to prove by clear and convincing evidence" the Lilly patent is invalid, "is clearly a high-quality job." That makes it tougher to find appealable issues. "This judge clearly put a great deal of work into this." Groombridge also said the generic challengers will have to focus on just one or a few legal points in their appeal, because appeal briefs are limited to about 50 pages and oral arguments last just 15 minutes per side.

Gary D. Street, a Cincinnati-area patent attorney who's followed the Zyprexa case for Wall Street investment firm clients: The court has "two different factions, and one is kind of anti-patent and one is kind of pro- patentYou never know what the (three-judge) mix is going to be."


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