Federal Circuit Upholds Rifaximin Patent Rulings, Affirms ANDA Approval Restrictions | Sheppard Mullin Richter & Hampton LLP

In Salix Pharmaceuticals, Ltd. v. Norwich Pharmaceuticals, Inc. 2023-1952 (Fed. Cir. April 11, 2024), this case involves appellate review of a district court’s findings regarding patent obviousness and infringement in Hatch-Waxman litigation. Specifically, the Federal Circuit reviewed the lower court’s obviousness analysis for dosage regimen and polymorph patent claims, as well as its interpretation of ANDA approval resetting provisions.

Background:

Rifaximin is the active ingredient in Salix Pharmaceuticals, Ltd.’s commercial product Xifaxan. Rifaximin has been used as an antibiotic for decades and was first synthesized in the early 1980s in Italy and approved there as an antibiotic in 1985. The FDA approved Xifaxan in 2004 as 200 mg tablets treating travelers’ diarrhea. The FDA later approved 550 mg tablets for hepatic encephalopathy (HE) in 2010 and for irritable bowel syndrome with diarrhea (IBS-D) in 2015. Norwich Pharmaceuticals, Inc. sought to market a generic version of rifaximin and filed an Abbreviated New Drug Application (ANDA) in 2019 for 550 mg tablets with the same indications as Xifaxan, certifying that Salix’s rifaximin patents were invalid.

Salix sued, asserting Norwich’s ANDA infringed dozens of Salix’s valid, Orange Book-listed patents. By trial, the case was streamlined to three groups of patents:

1. The IBS-D patents (the ’569 and ’667 patents)
2. The polymorph patents (the ’199 and ’206 patents)
3. The HE patents (the ’573, ’195, and ’397 patents)

In the district court, Norwich challenged the IBS-D’s claims’ validity based on two prior art references: a clinical trial protocol (“the Protocl”) and a journal article (“Pimentel”). The Protocol only disclosed using one of three specific dosages twice daily, none of which would have resulted in the claimed dosage, but the district court considered Pimentel’s teaching that the “optimal dosage of rifaximin may, in fact, be higher” than what was used in its own study and also its teaching regarding thrice-daily dosages. The district court found that these two reference disclose each and every claim limitation of the challenged claims and would have been motivated to combine the references to result in what is claimed, with a reasonable expectation. Namely, that a skilled artisan would have applied Pimentel’s thrice-daily teaching with one of the specific dosages disclosed in the protocol to result in the claimed dosage. After the bench trial, the district court held Norwich infringed the HE patents and failed to prove they were invalid. The court also held Norwich’s ANDA infringed the IBS-D and polymorph patents but found their asserted claims obvious.

Salix appealed the obviousness findings for the IBS-D and polymorph patents. On appeal, Salix asserted there would have been no reasonable expectation of success in using the claimed dosage, which was higher than the dosages the references disclosed. Norwich cross-appealed issues related to the ANDA approval timing.

Issues:

1. Whether the district court erred in finding the IBS-D patents’ asserted claims obvious.
2. Whether the district court erred in finding the polymorph patents’ asserted claims obvious.
3. Whether the district court properly interpreted 35 U.S.C § 271(e)(4)(A) in ordering the effective date of Norwich’s ANDA’s final approval cannot precede the HE patents’ expiration.

Holdings:

1. The Federal Circuit affirmed the district court’s finding that the IBS-D patents’ asserted claims would have been obvious.
2. The Federal Circuit affirmed the district court’s finding that the polymorph patents’ asserted claims would have been obvious.
3. The Federal Circuit affirmed the district court’s order setting the effective approval date of Norwich’s ANDA to be no earlier than the HE patents’ expiration.

Reasoning:

1. The Federal Circuit saw no error in the district court’s conclusion that a skilled artisan would have looked to the combined teachings of the Protocol and Pimentel and to apply one of the dosages in the Protocol thrice daily as taught by the Protocol. The Federal Circuit also credited background reference’s teachings of using disclosing using higher rifaximin doses to treat related conditions, without causing an intolerable increase in negative side effects. Thus, the Federal Circuit affirmed on this issue.

2. Norwich challenged the asserted claims of the polymorph patents based on a prior art reference called Cannata. (1) a skilled artisan would have had good reason to characterize the crystalline rifaximin obtained by following the Cannata protocols, (2) that such characterization was routine and could have been performed “in one day,” and (3) that doing so would have led the skilled artisan to have “detected rifaximin β.” The district court concluded the asserted claims were obvious over Cannata in view of the skilled artisan’s common knowledge. On appeal, Salix asserted the district court’s holding was erroneous in view of Federal Circuit precedent. The Federal Circuit found no clear error in the district court’s factual findings regarding a reasonable expectation of success in characterizing the crystalline rifaximin obtained using the prior art protocols disclosed in references like Cannata. The court explained that the scope of the claimed invention, under the parameters as outlined in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), was effectively just the routine characterization of the resulting crystalline form, which the evidence showed skilled artisans would have been able to readily perform. The Federal Circuit explained that a lack of clear error in finding non-obviousness in the Grunenthal and Pharmacyclics cases does not compel a conclusion of non-obviousness in this case. Additionally, the court noted that Grunenthal underscored the factual nature of these inquiries and expressly held that it did “not rule out the possibility that polymorph patents could be found obvious.” The Federal Circuit emphasized that the determination of obviousness is dependent on the facts of each case.

In Grunenthal and Pharmacyclics, the issue was whether a skilled artisan would have had a reasonable expectation of success in producing a crystalline form of a compound. Here, the prior art included a process to produce a crystalline form of rifaximin, and the dispute centered around characterizing the crystalline form resulting from that process. The Federal Circuit stated that these distinct factual predicates support the district courts’ factual findings in each of these three cases under the clear error standard of review. While Salix argued this amounted to patenting the unknown, the Federal Circuit disagreed, stating that rifaximin’s β form constituted a non-obvious invention because, although skilled artisans “actually succeed[ed]” in producing and characterizing it, they would not have “expect[ed] to succeed” since the polymorphic nature of rifaximin had not yet been reported and the identity of the β form remained undisclosed as of the critical date. The court stated that Salix’s framing of the issue suggests that no unknown entity could ever be obvious, as one cannot reasonably expect what was previously unknown, which is incorrect. Here, the district court found a reasonable expectation of success in characterizing the crystalline product of Cannata for potential polymorphism using routine, conventional methods and skill. The Federal Circuit saw no clear error in that conclusion.

3. The Federal Circuit affirmed the district court’s interpretation of 35 U.S.C. § 271(e)(4)(A) in ordering that the effective approval date of Norwich’s full ANDA could not precede the expiration of the infringed HE patents. The court explained that § 271(e)(4)(A) is properly construed as directed to approval of the particular infringing uses included in the ANDA, not all potential uses of the drug, including non-infringing uses that may be covered by the ANDA.

Since the FDA approves specific uses of a drug product in an ANDA rather than the drug in the abstract, the “drug…involved in the infringement” referred to in the statute encompasses the full ANDA submission containing the infringing use. The Federal Circuit found that the district court’s order appropriately delayed final approval of the infringing ANDA as a whole until expiration of the HE patents. Referencing the full ANDA was proper and not overly broad, as it was the submission of the ANDA including the infringing HE indication that constituted the act of infringement under 35 U.S.C. § 271(e)(2)(A). The presence of a non-infringing use in the ANDA alongside the infringing use does not negate the infringement or allow that portion to be carved out of the order resetting the approval date.

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