Caraco Wins Appeal Over Ortho-McNeil

Jan.24.07 | About: Caraco Pharmaceutical (CPD)

Last Friday the Federal Circuit affirmed a district court ruling that Caraco Pharmaceutical Laboratories' (NYSEMKT:CPD)ANDA for a generic version of Ortho-McNeil's Ultracet does not infringe Ortho's U.S. Patent No. 5,336,691. Ultracet, an analgesic combining tramadol and acetaminophen, generated sales of approximately $350 million last year for Ortho-McNeil. Caraco is majority-owned by Sun Pharmaceutical, the fifth largest generic drug maker in India, while Ortho-McNeil is a wholly-owned subsidiary of Johnson & Johnson (NYSE:JNJ). The Federal Circuit's opinion vindicated Caraco's decision to launch its generic version of Ultracet "at risk" in late December 2005, after the district court ruling.

Ortho filed suit in the district court after Caraco filed an ANDA for a generic version of Ultracet, which included a paragraph IV certification with respect to the '691 patent. Caraco's ANDA requested approval for a formulation containing tramadol and acetaminophen with an average weight ratio of tramadol to acetaminophen of 1:8.67, and requiring a weight ratio of no less than 1:7.5. Ortho alleged that Caraco's proposed formulation infringed claim 6 of the ’691 patent, which recites (when read in conjunction with the two claims on which it depends): "A pharmaceutical composition comprising a tramadol material and acetaminophen, wherein the ratio of the tramadol material to acetaminophen is a weight ratio of about 1:5."

The only issue in the case was the claim construction for "about," as the parties had previously stipulated to be bound by the patent validity and enforceability decisions in Ortho-McNeil's corresponding Ultracet ANDA litigations against Kali Laboratories, Inc. (a Par Pharmaceutical (NYSE:PRX) subsidiary), No. 02-CV-5707-JCL-MF (D. N.J.), and Teva Pharmaceutical Industries (NASDAQ:TEVA), Ltd., No. 04-CV-886-HAA-GDH (D. N.J). (The Kali and Teva cases are still pending.)

Caraco argued that the proper construction of "about 1.5" was "approximately 1:5, subject perhaps to minor measuring errors of, say, 5 or 10%." Ortho argued that the proper construction is "approximately 1:5, and . . . encompasses a range of ratios of at least 1:3.6 to 1:7.1."

On motion for summary judgment, the district court followed Ortho's claim construction and found that Caraco's ANDA formulation did not literally infringe the '691 patent, nor did it infringe under the doctrine of equivalents, based on the doctrine of claim vitiation. The district court concluded that finding infringement by Caraco’s formulation with an average weight ratio of 1:8.67 would render meaningless the "about 1:5" limitation.

In reviewing the district court's claim construction de novo, the Federal Circuit found no error in the district court's construction of the claim term "about 1:5," and further found there could be no literal infringement because Caraco’s formulation must have a weight ratio of tramadol to acetaminophen of no less than 1:7.5. Finally, the Federal Circuit found no error in the district court's doctrine of equivalents analysis, stating that the 1:5 parameter was critical to the invention.

Related Reading:

* Jan. 19 Caraco press release

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