February 06, 2018

Jenner & Block achieved a victory for client Hospira, Inc. in a patent infringement matter brought against it by the Medicines Company (MedCo). On February 6, the Federal Circuit Court of Appeals affirmed the district court’s finding that Hospira, a generic drug maker and Abbreviated New Drug Application filer, does not infringe two blood thinner patents belonging to MedCo. The circuit court also remanded the question of whether MedCo’s distribution agreement with another company would render the patents invalid under the on-sale bar.

The MedCo asserted two patents covering its Angiomax drug product against Hospira.  Although Angiomax has been available for decades, MedCo developed a new method of formulating Angiomax to reduce impurities.  This formulation was the subject of the asserted patents, which issued on July 27, 2008.  Prior to filing the patents, MedCo entered into a distribution agreement with Integrated Commercialization Solutions, Inc. (ICS) to distribute the new Angiomax formulation.  The district court found that the invention was ready for patenting at the time of the agreement, but found that the patents were valid under 102(b)’s on-sale bar because the distribution agreement between MedCo and ICS did not constitute an offer to sell.

The Federal Circuit reversed and remanded, finding that the terms of the distribution agreement show that the agreement was an offer for sale.  In particular, the terms included a statement that MedCo desired to sell the product and that ICS desired to purchase the product.  The agreement also included the commercial price of the product and the transfer of title to ICS.  MedCo argued the agreement was not an offer for sale because it was permitted to reject all purchase orders.  The Federal Circuit noted, however, that the agreement required MedCo to use “commercially reasonable efforts” to fill the purchase orders, and MedCo would be unlikely to reject an order because ICS had exclusive distribution rights under the agreement and Angiomax constituted the majority of MedCo’s revenues.  Therefore, the Federal Circuit held that the distribution agreement did not constitute an optional sales arrangement, and instead provided all of the necessary terms and conditions to constitute a commercial offer for sale.  The Federal Circuit remanded for the district court to determine whether the offer to sell covered the patented invention.

The team was led by Partners Sara Tonnies Horton and Bradford P. Lyerla and included Partners Aaron A. Barlow, Harry J. Roper, Adam G. Unikowsky and Shaun Van Horn, Department Counsel Yusuf Esat and Senior Paralegal David Nelson. Former colleagues Paul Margolis, Josh Segal and Chad Ray were important contributors, as were others who helped moot three oral arguments in the Federal Circuit that were key to earning this victory.