In Elan Corporation v. Andrx Pharmaceuticals, Nos. 03-1354, -1355, -1386, -1387 (Fed. Cir. May 5, 2004), the federal circuit reversed a judgment invalidating Elan’s U.S. Patent No. 5,637,320 (directed to a controlled-release naproxen formulation) based on the on-sale bar of § 102(b).
Andrx sought approval to commercialize a generic version of controlled-release naproxen and Elan sued. Andrx alleged the ‘320 patent was invalid under § 102(b) as a result of Elan’s having solicited licensing interest from a number of potential pharmaceutical partners, describing -- as part of that solicitation -- a plan to supply bulk tablets pursuant to certain terms, conditions, and price margins. The letters preceded the filing of the first application leading to the issuance of the ‘320 patent by more than a year. The district court found that Elan’s letter to Lederle initiated the period for the on-sale bar, noting that the letter included a price term and referred to a proposed contract. In addition, the district concluded that the formulation that Elan had offered to supply to Lederle was “ready for patenting” and was the same composition that was eventually patented.
On appeal, the federal circuit disagreed, stating that the district court incorrectly characterized the Lederle letter as an offer to sell that constituted an on-sale bar. Based on the standards for analyzing an on-sale bar under Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), and its progeny, the federal circuit first concluded that an offer to enter into a license under a patent for future sale of the invention covered by the patent when and if it had been developed was not an offer to sell the patented invention that constituted an on-sale bar. The letter to Lederle made clear that Elan was not offering to sell naproxen tablets to Lederle, but rather seeking to grant a license under the patent and offering Lederle the opportunity to become its partner in the clinical testing and eventual marketing of such tablets at some indefinite point in the future. Moreover, the Lederle letter lacked any mention of quantity, time or place of delivery, or product specifications (beyond a general statement that the potential product would be a 500 mg once-daily tablet containing naproxen).
Having concluded the first prong of the on-sale analysis (a definite offer for sale) was not satisfied, the court declined to address the second prong -- Elan’s contention that the invention was not “ready for patenting” at the time the letters soliciting interest were sent.
To view the full decision visit http://www.aplf.org/mailer/Issue209.doc
To discuss this topic further, please feel free to contact the author Michael R. Dzwonczyk, (firstname.lastname@example.org), at Sughrue Mion, PLLC in Washington DC., USA.
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