Silvergate Pharmaceuticals, Inc. v. Bionpharma, Inc.: The Relevance and Award of Attorney Fees under the Hatch Waxman Statute.
In Silvergate Pharmaceuticals, Inc. v. Bionpharma Inc., the US District Court for the District of Delaware decided an open question regarding pre-filing investigation and attorney fees under Title 35 of the US Code, Section 285, and offers of confidential access (OCAs) under the Hatch-Waxman framework.
On May 26, 2022, defendant Bionpharma Inc. filed a renewed motion for attorney fees pursuant to Section 285 after prevailing at trial against plaintiff Azurity Pharmaceuticals Inc. (Azurity is the successor-in-interest to the named plaintiff Silvergate Pharmaceuticals, Inc.) Bionpharma argued that Azurity filed suit only to delay Bionpharma’s market entry and in relevant part, took an unreasonable position regarding a claim limitation directed to a chemical buffer because the plaintiff did not review Bionpharma’s abbreviated new drug application (ANDA) before filing suit. The judge’s October 4, 2024 denial of Bionpharma’s Section 285 motion provides useful guidance as to how both new drug application (NDA) holders and ANDA filers may conduct themselves before commencing litigation.
Case background
When the manufacturer of a generic drug includes a Paragraph IV certification against patents listed in the US Food and Drug Administration (FDA)’s Orange Book, the Hatch-Waxman statute requires the generic manufacturer to make an OCA for the NDA holder to review the ANDA. 21 U.S.C. SS 355(j)(5)(C)(i)(III). The statute allows the generic manufacturer to impose restrictions on who can access information, and how it is used and disposed of, “as would be the case if a protective order had been entered to protect trade secrets and other confidential information.” Id. If the NDA is accepted, the NDA can review the ANDA in order to assess the strength of generic manufacturer’s claims of non-infringement. The NDA holder is not required to accept the OCA. However, the US Court of Appeals Federal Circuit has made it clear that a plaintiff who fails to conduct a sufficient pre-suit investigation of patent infringement can sometimes be awarded attorney fees. See, e.g., ThermoLife Int’l LLC, v. GNC Corp. 922 F.3d. 1347 (Fed. Cir. 2019).
Azurity markets an oral liquid dosage form of a medication with the active ingredient enalapril under the trade name Epaned(r). Bionpharma filed a generic ANDA with FDA to market Epaned(r), with a Paragraph III certification. Bionpharma informed Azurity it believed that its ANDA product wouldn’t infringe Azurity Orange Book Patents. Azurity’s patents covering Epaned(r) required that the claimed medicament contain a buffer comprising specific concentrations of citric acid and sodium citrate.
Court rules Azurity’s rejection of Bionpharma’s OCA was reasonable
In litigation, Azurity conceded that the buffer limitations were not literally present in the Bionpharma ANDA product, but it argued that the ANDA product satisfied the buffer claim limitations under the doctrine of equivalents. After a five-day bench trial in 2021, the district court determined in relevant part that due to amendments and arguments made by Azurity during prosecution of the asserted patent claims, Azurity disclaimed any buffer other the citrate buffer explicitly claimed.
After trial, Bionpharma moved for fees and argued that Azurity lacked a legitimate theory to overcome prosecution history estoppel regarding the citrate buffer claim limitations. Bionpharma argued that Azurity was not interested in Bionpharma’s defenses because it refused to review Bionpharma’s ANDA prior to filing suit. The court found that Azurity was reasonable in rejecting Bionpharma’s OCA. It rejected Bionpharma’s claim that the OCA conditions Azurity initially refused were essentially the same as the terms to which Azurity agreed during litigation. Here, the court noted that Azurity ultimately accessed the ANDA with a less extensive limitation on Azurity’s outside counsel’s ability to conduct patent prosecution and perform regulatory work before the FDA.
Silvergate highlights potential costly pitfall for NDA holders and ANDA filers
