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20 November 2020AmericasSarah Morgan

Fed Circuit affirms GSK $107m patent loss

The US Court of Appeals for the Federal Circuit rejected GlaxoSmithKline’s (GSK) challenge of a $107 million verdict which found the drugmaker had infringed a dry-powder inhaler patent.

In a precedential opinion handed down yesterday, November 19, the Federal Circuit denied GSK’s argument that it should get a new damages trial and affirmed a decision from the US District Court for the District of Delaware.

In 2016, pharmaceutical company Vectura accused GSK of infringing US patent number 8,303,991, through the sale of three of its “Ellipta” dry powder inhaler products.

Vectura prevailed on the issues of validity, infringement, and willful infringement, and a jury awarded damages of $89.7 million.

Subsequently, US District Judge Richard Andrew granted Vectura's motion for supplemental damages, at a 3% royalty rate. In total, Vecture was awarded $107 million.

On appeal, GSK raises four issues: that Vectura failed to present substantial evidence that the accused inhalers use additive material that “promotes the dispersion” of the active material; that the district court’s construction of the term “composite active particles” was erroneous; there are flaws in the calculation of the royalty proposed by Vectura’s damages expert; and that Vectura made prejudicial references to GSK’s sales and advanced an improper “pennies on the dollar” argument.

However, the Federal Circuit dismissed all four arguments.

Circuit Judge William Bryson, on behalf of the court, found that substantial evidence supported the jury’s finding that the accused inhalers satisfied claim 1’s dispersion limitation and rejected GSK’s challenge to the district court’s claim construction.

The court also rejected GSK’s third argument, which alleged that Vectura’s damages theory was legally flawed, and found that the jury was entitled to award damages without applying a royalty cap.

Finally, GSK argued that Vectura overemphasised GSK’s US sales and made an improper “pennies on the dollar” argument, by framing its requested damages as small compared to those sales.

The Delaware court had found that Vectura had “repeatedly emphasised the amount of revenues made by defendants and the relative smallness of the damages award they were requesting”, and that its conduct in that regard was improper.

However, the court found that the effect of the improper remarks was not so prejudicial as to require a new trial.

“We find no basis to second-guess the judgment of the experienced trial judge in this regard. We therefore decline to conclude that the district court abused its discretion, and we uphold the court’s decision denying a new trial on this ground,” said Bryson.

The Federal Circuit affirmed the lower court’s decision and dismissed GSK’s appeal. GSK has 30 days to file a petition for rehearing.

Will Downie, CEO of Vectura, said: “We are very pleased with the result of this appeal, which confirms the validity of our IP and the decision to progress this litigation with GSK. Once we have further clarity regarding final settlement and potential timing of receipts, we will provide a further market update.”

A spokesperson for GSK said: “We are disappointed with the ruling and are weighing our options.”

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More on this story

Americas
18 November 2020   Patent law experts and pharmaceutical companies have lent their support to Merck Sharp & Dohme in its effort to confirm the patent-eligibility of genus claims at the US Supreme Court.
Americas
25 February 2021   A panel of the US Court of Appeals for the Federal Circuit has considered for a second time the $235 million award to GlaxoSmithKline after Teva Pharmaceuticals was found to have infringed its Coreg heart drug.
Big Pharma
16 September 2019   A district court has upped Vectura’s award of $89.7 million in damages by $10m, after a jury trial earlier this year found that GlaxoSmithKline has willfully infringed one of its patents.