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Regulatory News | 16 May 2016 | By Zachary Brennan
The US Court of Appeals for the Federal Circuit on Friday ruled that a Merck KGaA patent - linked to two of Bayer’s oral contraceptives, Safyral and Beyaz - is invalid because ingredients in the drug were offered for sale before the filing of the patent.
The reversal of the lower court decision could mean a loss of patent protection and the launch of new Safyral and Beyaz generics before the patent expires in April 2020.
The story and patent claim on the contraceptives hinge on a single fax (people still used fax machines in 1998) from a Merck manager to the nutritional supplement company Weider Nutrition International, in which the Merck manager offered a price for the sale of the ingredient in the contraceptives, though no sale was ever made.
Bayer spokesman Chris Loder told Focus: “Bayer disagrees with the decision. The company is committed to defending its intellectual property rights and will consider its legal options.”
The patent claim in question is for an ingredient developed by Merck and used in the two Bayer contraceptives, known as “MTHF,” or as the Federal Circuit describes it: “simply a crystalline form of the natural isomer of folate produced by the human body.”
In August 1998, Weider notified Merck that it was no longer interested in forming a joint venture to market MTHF in the US, “explaining that the advertising expenses associated with such a ‘large-scale’ project were too high,” but that it would still like to purchase two kilograms of MTHF on a stand-alone basis.
In response, on 9 September 1998, Dr. Roland Martin, a manager in Merck’s Health, Cosmetic and Nutrition Business Unit, sent Weider one signed fax stating:
“[W]e would like to handle your purchase of [MTHF] very simpl[y]. Therefore please send the order to my attention and I will arrange everything. In addition we need the exact delivery address/person. The price is 25,000 US$ per kg [of MTHF] free delivered to your R&D center in the U.S. Payment terms are 60 days net. With Rick Blair and Richard Bizzaro we discussed a purchase of 2 kg [of MTHF]. If you need more, we have no problem for an immediate delivery. After receiving your order you will get the official confirmation of the order.”
In 2013, Bayer Pharma AG, Bayer Healthcare Pharmaceuticals Inc. and Merck & Cie, a Merck subsidiary, brought suit against Watson Laboratories, accusing Watson of infringing on the patent by filing Abbreviated New Drug Applications with the US Food and Drug Administration seeking approval to manufacture and market generic versions of Safyral and Beyaz.
Following a trial, the district court held that the patent was not invalid – meaning Watson could not launch its generics -- as even though MTHF “was ready for patenting by September 1998,” there had been no invalidating commercial offer for sale or sale of the product, and “the fax Merck sent to Weider on September 9, 1998, was not sufficiently definite to qualify as a commercial offer because it did not include ‘important safety and liability terms.’”
Watson then appealed that decision.
Now, the Federal Circuit is saying that because Merck’s September 9, 1998, offer (ie. The fax) to sell MTHF was a premature commercial exploitation of its invention, the claim on the patent is invalid because of what’s known as the “on-sale bar,” which holds that an invention cannot be patented if it has been for sale for over one year prior to the patent filing.
And though the court says that the fax was not an unsolicited price quote sent to numerous potential customers, it maintains that “Martin’s detailed fax—providing essential price, delivery, and payment terms—contained all the required elements to qualify as a commercial offer for sale.”
And in the weeks following Martin’s fax, both Merck and Weider proceeded on the understanding that Merck had made an unequivocal offer to sell MTHF.
“Regardless of whether the communications between Merck and Weider in the fall of 1998 were sufficient to establish a binding contract for the sale of MTHF, they confirm that, at a minimum, both parties understood that Martin’s September 9, 1998, fax was an offer to sell the product,” the court contends.
And even though Merck ultimately failed to deliver any MTHF to Weider— “possibly because it subsequently decided to pursue a more lucrative exclusive licensing arrangement with one of Weider’s competitors … this is not dispositive. An offer to sell is sufficient to raise the on-sale bar, regardless of whether that sale is ever consummated,” the court said.
Tags: Merck KGaA, Bayer, Beyaz, contraceptives, fax machine, drug patents