Locke Lord QuickStudy: Federal Circuit Provides Guidance on Evidence to Satisfy Burden of Proving Infringement in Hatch-Waxman Litigations

February 21, 2018

On February 9, 2018, the Federal Circuit affirmed the District of Delaware’s holding that Merck Sharp & Dohme Corp. (“Merck”) failed to meet its burden of proving that Amneal Pharmaceuticals LLC’s (“Amneal”) ANDA product would infringe U.S. Patent No. 6,127,353 (“the ’353 patent”). See Merck Sharp & Dohme Corp. v. Amneal Pharm. LLC, No. 2017-1560, 2018 WL 798668 (Fed. Cir. Feb. 9, 2018). Notably, the Merck decision held that (1) theoretical evidence was insufficient to satisfy Merck’s burden of proving infringement, and (2) proof for infringement/non-infringement is to be based on representative samples.

The ’353 patent is directed to mometasone furoate monohydrate (MFM). Id. at *1. Merck alleged that Amneal’s ANDA product—which contained anhydrous mometasone furoate (MFA)—would infringe the ’353 patent, if approved, because MFA would convert to MFM over time. Id. During the course of discovery, Amneal was required to complete a bulk-hold study for its ANDA product because Amneal’s specification allowed for the bulk product to be stored for up to four days. Id. at *2. Amneal completed the study and collected samples from Day 1, Day 4, and a batch following completion of the study (referred to as “Batch 16001A” or “A Batch”). Id. Amneal then submitted data to FDA for the Day 1 and Day 4 samples. Id. In the litigation, however, Amneal produced samples from the Day 1 collection to Merck, but not from the other collections. Id.

On appeal, Merck argued that the district court abused its discretion in not compelling production samples from the Day 4 and Batch 16001A batches. Id. at *4. The Court held that the district court did not abuse its discretion because it “took adequate steps to ensure that proceeding with trial would not prejudice Merck.” Id. Notably, the district court permitted Merck the opportunity at trial to prove that the Day 4 and Batch 16001A batches were different than the Day 1 batch for purposes of infringement; however, Merck failed to provide evidence to carry its burden. Id. at *4-5. The district court found that “Merck presented little more than theoretical evidence to show that the Day 4 and A Batch samples would be more likely to undergo conversion than the Day 1 Batch samples.” Id. at *5. The Federal Circuit agreed noting that “Merck made no attempt to prove that Amneal’s product would convert simply by the additional mixing Amneal performed on the produced Day 1 samples.” Id. (emphasis in original). Indeed, the Federal Circuit reasoned that although Merck did not receive the Day 4 and Batch 16001A batches, Merck had samples of Amneal’s Exhibit and Day 1 Batches, and Merck had the opportunity to reproduce what Amneal carried out to arrive at the Day 4 and A Batch samples to prove the conversion of MFA to MFM. See id. Merck’s expert instead conducted an alternative process experiment including seeding the sample with MFM and failed to duplicate the mixing speed and time of Amneal’s process, which the Federal Circuit found non-probative. See id. at *5.

Merck also argued that the district court erred in basing its opinions on Amneal’s “intermediate” product (the Day 1 Batch samples) rather than its final, commercial product (the A Batch samples). Id. at *6. The Court disagreed, again noting that Merck was allowed an opportunity to prove at trial that samples of the Day 4 and A Batches would have materially differed from the Day 1 Batch samples. See id. The Court then clarified that proof of infringement in the ANDA context is not on any particular product, but rather, “the critical inquiry is whether it is representative of what is likely to be approved and marketed.” Id. Such representative products include biobatch data and actual samples of the proposed ANDA product that was submitted to FDA. See id. Accordingly, the Court held that Amneal’s Day 1 batch was representative of the commercial product because the specification allows for up to 4-days of hold before packaging, and could have been packaged on day 1. Id. at *6-7.

The Merck decision makes clear that presentation of mere theoretical evidence rather than actual evidence that exactly or closely approximates the processing steps of the ANDA product does not satisfy the burden of proof for infringement in a Hatch-Waxman litigation. In addition, this decision reaffirms that proof for infringement/non-infringement is to be based on representative samples of what is likely to be approved and marketed—not necessarily on samples of any particular final, commercial product.