Fed Circuit remands Allergan inventorship dispute

The US Court of Appeals for the Federal Circuit concluded that a New York judge had rushed to grant summary judgment in an inventorship dispute between Ferring and Allergan.

In a precedential opinion issued yesterday, November 10, the Federal Circuit vacated and remanded the case to resolve the issue of whether Ferring is equitably estopped from seeking to correct inventorship of the patents at issue.

“Where the matter adjudged is a quintessentially fact-laden one, such as the equitable matter at issue here, it is especially important that we guard against a rush to judgment. We conclude that such a rush to judgment happened here,” said Circuit Judge Kathleen O’Malley on behalf of the court.

Switzerland-based Ferring had challenged the inventorship of three patents that a former consultant for the company had sold to Allergan in a $43 million deal in 2010.

When consulting for Ferring, Seymour Fein had become involved in a Ferring project involving desmopressin, which is used to treat nocturia (disruption of night time sleep due to the need to urinate).

In 2012, Ferring filed a complaint requesting correction of inventorship of the Fein patents, naming Allergan, Fein and his company Serenity Pharmaceuticals as some of the defendants.

Three years later, Allergan requested summary judgment. This was subsequently granted by the court, the US District Court for the Southern District of New York, which found that Ferring’s inaction on Fein’s patents (after a period of correspondence in 2004) satisfied the misleading conduct prong of equitable estoppel.

As part of this correspondence, Ferring had disavowed any ownership claim to the sublingual, transmucosal route of delivery of desmopressin.

While Fein had advised Ferring that he intended independently to pursue patent protection for “the sublingual administration route and the associated low dosage possibilities enabled by same”, he subsequently pursued claims “untethered to sublingual administration of desmopressin”, said the Federal Circuit.

Ferring appealed against the New York court’s decision, claiming that the district court had erred by considering conduct that preceded the issuance of the Fein patents in the equitable estoppel analysis and resolving disputed issues of fact in favour of the defendants.

Yesterday, the Federal Circuit concluded that the case needed to be remanded.

The court rejected Ferring’s “bright-line rule that equitable estoppel cannot apply whenever the scope of the issued patent is different than what the parties discussed in communications leading to the allegedly misleading conduct”.

However, O’Malley added that this doesn’t mean ‘material differences in the potential patent claims discussed pre-issuance and the claims that ultimately issue need not be considered”.

“And it, importantly, does not mean that such differences may not give rise to material issues of fact regarding the implications of any period of silence following pre-issuance communications,” she said.

According to O’Malley, the district court had abused its discretion by applying equitable estoppel to bar Ferring’s claims because it had failed to address the material differences in the scope of Fein’s issued patent claims as compared to the invention described prior.

The Federal Circuit added that the lower court had failed to consider all relevant evidence (including evidence that Fein intentionally and deliberately copied Ferring’s clinical study protocol for use in his own clinical studies) and that Ferring’s silence didn’t necessarily lead to estoppel.

The case has been remanded to the Southern District of New York.

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