If a patent owner enters a contract under which its distributor agrees to take title to a patented product, does this qualify as potentially invalidating “offer for sale” under §102(b)?

April 9, 2018

The Medicines Company v. Hospira, Inc.

2014-1469, 2014-1504

Decided: February 6, 2018

Case Summary

 

Under pre-AIA §102(b), a patent is invalid if—more than 1 year before the patent’s U.S. filing date—both (1) the patented product was the subject of a commercial offer for sale; and (2) the claimed invention was ready for patenting. If a patent owner enters a contract under which its distributor agrees to take title to a patented product, does this qualify as potentially

invalidating “offer for sale” under §102(b)? In a case involving the anticoagulant drug Angiomax (generically known as bivalrudin), the U.S. Court of Appeals for the Federal Circuit said yes.

 

The Medicines Company owns US patent numbers 7,582,727 and 7,598,343, both of which were filed in July 2008 and cover methods for making bivalrudin with very low levels of a particular impurity. The claimed methods were first tested about 20 months before the patents were filed; and about 17 months before filing, The Medicines Company entered into an

agreement under which ICS (a distributor and reseller) agreed to distribute Angiomax in the US. A key provision in this agreement requires ICS to take title to the product before reselling it.

 

The dispute here began when Hospira sought to market a generic version of Angiomax by filing an Abbreviated New Drug Application with the FDA. After The Medicines Company filed suit in Delaware, Hospira asserted that the ‘727 and ‘343 patents were invalid because the distribution/resale agreement with ICS constituted a commercial offer for sale more than one

year before the patents’ filing date; Hospira also presented a noninfringement defense. The District Court agreed that the patents were not infringed, but held that the patent owner’s distribution agreement with ICS was not a commercial offer for sale.

 

On appeal, The Medicines Company argued that the distribution/resale agreement permitted

it to reject purchase requests from ICS, and therefore did not constitute a potentially invalidating commercial offer for sale. The Federal Circuit disagreed, explaining that The Medicines Company could not simply reject its distributor’s orders for any reason, "but

instead was required to fill them unless it was commercially unfeasible to do so.” And when viewed through the lens of the Universal Commercial Code, the distribution agreement—which describes the transactions as “sales” and which says that title to the product is to pass to ICS—was plainly a commercial offer for sale. But the panel did not reach the ultimate question

of invalidity; instead, it sent the case back to the District Court to decide whether the ICS agreement covered Angiomax/bivalrudin made by the methods covered in the patents at issue, or whether it covered the drug made by different methods.

 

Earlier in the opinion the Federal Circuit also addressed the infringement dispute, which turned on whether Hospira’s method for making bivalrudin met the claims’ “efficient mixing limitation”—which requires (1) a pH-adjusting solution to be added at a controlled rate; and (2) a paddle mixer to be used in conjunction with a homogenizer. Because Hospira’s method adds

a pH-adjusting solution in three equivalent portions (and not at a controlled rate) and does not use a homogenizer, the panel affirmed the District Court’s finding of no infringement.

Click here for the PDF

 

 

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