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VOL. 129 | NO. 202 | Thursday, October 16, 2014

Supreme Court Weighs Generic Drug Dispute

SAM HANANEL | Associated Press

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WASHINGTON (AP) – The Supreme Court seems divided as it considers a high-stakes patent dispute between rival pharmaceutical companies over the world's best-selling multiple sclerosis treatment.

Justices heard arguments Wednesday in a case that threatens to cut into the profits of Israel-based Teva Pharmaceutical Industries Ltd., which sells $4 billion annually of the drug Copaxone.

Teva claims the U.S. Court of Appeals for the Federal Circuit wrongly overturned five of its patents for the drug. That 2013 ruling cleared legal hurdles for rival drug companies to sell cheaper generic versions this year, though no company has yet received federal approval.

Teva's patent on Copaxone is set to expire in September 2015, but it would like to keep its exclusive rights to the lucrative drug until then.

At issue is whether the appeals court was allowed to second guess factual findings made by a federal district court that had earlier ruled in Teva's favor. The Federal Circuit re-examined the evidence and concluded that Teva's patent claim based on the drug's molecular weight was too ambiguous.

The justices seemed split over whether patent cases should be reviewed under a different standard than other cases, where appeals courts must defer to factual findings made by lower courts.

Federal rules generally allow appeals courts to interpret the law and not to take a fresh look at the facts. But the Federal Circuit – a specialized court created to hear patent appeals – routinely reconsiders factual findings to determine whether a patent is valid. It has relied on a 1996 Supreme Court decision that says patent claims are for courts to decide, not a jury.

Teva attorney William Jay argued that scientific evidence about the patent is factual and should not be questioned by an appeals court.

"The trial judge is in the best position to draw inferences from the record," Jay said.

But Justice Samuel Alito suggested placing limits on the Federal Circuit's consideration of facts on appeal would make the appeals court's job a "struggle."

"Is it worthwhile as a practical matter?" he asked.

Chief Justice John Roberts worried about a lack of uniformity if different district courts reach different conclusions about a patent that "binds the world."

On the other side, Justice Stephen Breyer suggested patents should be treated like any other technical case. That means deferring to the trial judge's finding of facts because "he sat there the whole time and listened to the experts talk."

But Carter Phillips, attorney for the generic companies, said patents are unique in the law.

"Patent claim construction is different," Phillips said. "The only way to provide notice to the world is to have one court that's the expert make the final decision." The companies Phillips represents are Mylan Inc., Momenta Pharmaceuticals Inc., Natco Pharma Ltd. and Sandoz, Inc.

Earlier this year, Supreme Court Chief Justice John Roberts declined to block the Federal Circuit ruling from taking effect while the high court considered Teva's appeal. Teva claimed it would suffer irreparable harm if the appeals court decision was not postponed, since generics could come on the market while the legal issues could take months to decide.

Teva has also been trying to switch existing Copaxone patients to a new formulation of the drug that has patent protection until 2030.

A ruling is expected by June.

Follow Sam Hananel on Twitter at www.twitter.com/SamHananelAP

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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