Why was the Markman hearing cancelled in Celgene’s Revlimid® patent case against Dr. Reddy’s?
On March 23, Celgene ($CELG) and Dr. Reddy’s ($RDY) informed the Court that they jointly have resolved the single pending claim construction dispute—namely, the construction of the word “crystalline” within the two asserted polymorph patents. What does this mean for the case?
As we previously discussed, Celgene has commenced multiple patent lawsuits seeking to delay generic competition for Revlimid®. The most important patents in the lawsuits are two polymorph patents. The case against Dr. Reddy’s is the farthest along, and an upcoming Markman hearing was anticipated to bring a potentially disputed issue to a head. The parties previously filed opening claim-construction briefs in advance of a Markman hearing. In those brief, they disputed the construction of the word “crystalline.” Dr. Reddy’s proposed generic is purportedly amorphous, whereas the patents require a crystalline polymoph of lenalidomide. (A more detailed explanation of the respective arguments over the words “crystalline” was previously discussed here.)
On March 23, both Celgene and Dr. Reddy’s were scheduled to file responsive claim construction briefs—namely, briefs that responded to each opposing party’s opening briefs supporting their respective construction of the words “crystalline.” After that, it was anticipated that the Court would schedule claim construction hearing, otherwise known as a Markman hearing. Instead, on March 23, the parties jointly informed the Court that there will be no need for a Markman hearing in their dispute. The parties wrote to the Court: “We are pleased to inform the Court that the parties have resolved their remaining claim construction disputes. Accordingly, the parties will not be filing responsive Markman briefs today, and a Markman hearing will not be necessary.”
Dr. Reddy’s had previously told the Court that its generic product is amorphous, and thus necessarily not crystalline. Thus, Dr. Reddy’s believed that the case can be won or lost around the interpretation of the word “crystalline.” By contrast, Celgene disagreed. Celgene told the Court that the word “crystalline” only appears in two of the multiple asserted patents, and even if the Court adopts Dr. Reddy’s proposed construction of “crystalline,” then Celgene will still be able to show infringement.
On the first point, Celgene is correct that it has asserted several patents against Dr. Reddy’s, but only two of those patents recite the word “crystalline.” But those two patents—the two polymoroph patents—are the crucial patents in this case. They do not expire until 2024/2027, whereas all the other patents expire by 2022. From the market’s perspective, this case is all about the polymorph patents.
Celgene other point—that it can still show infringement even under Dr. Reddy’s construction of the word “crystalline”—is the more important one. Celgene has not yet publicly disclosed any details behind that theory of infringement. Further, although the parties resolved this claim construction dispute, they did not file any stipulated construction of the term “crystalline.” Thus, it is difficult to make an assessment of the strength or weakness of Celgene’s infringement theory against the stipulated construction of the word “crystalline.”
Dr. Reddy’s stuffed a number of limitations into its proposed construction. Not all of those limitations were likely to have survived the Court’s scrutiny. Dr. Reddy’s likely believed, and likely has, traded away some of those limitations for a clearer definition of what “crystalline” means. On the other hand, the claims expressly recite that the patented polymorphs must be “crystalline.” Thus, Celgene most likely knows that it cannot avoid that completely. And it likely knows that simply proposing that “crystalline” be interpreted according to its plain and ordinary meaning, which was its proposed construction, will not necessarily be helpful unless it has a theory for why Dr. Reddy’s purportedly “amorphous” product is, in fact, “crystalline.”
Thus, at the end of the day, the parties appear to have reached agreement that this is not really a claim construction dispute. Rather, it is an infringement dispute. As an infringement dispute, it will be subject to more detailed and rigorous scientific issues over which the experts can battle. As we previously discussed, Celgene may be hoping to prove that Dr. Reddy’s drug, while not always crystalline, may nevertheless become crystalline at some point—such as within the patient’s stomach. There is precedent that if the accused drug infringes the claim at some point in the supply chain, even if only after oral ingestion by the patient, then that may be sufficient to show infringement. And that, in theory, may justify an injunction against the generic. There are, however, a lot of if’s and maybe’s in that sentence. Proving that a drug takes on a crystalline structure after it is ingested by the patient is a tall order, and something that depends upon there existing scientific technological methods for actually showing that.
The next major stage of this case will be expert discovery. It will be important to keep an eye on the docket to identify clues, such as through discovery disputes or dispositive motions, into further details of Celgene’s infringement theory against Dr. Reddy’s allegedly amorphous product.