Can Microspherix knock out Merck’s prior-inventorship defense in its Nexplanon patent suit?
Zachary Silbersher
Microspherix has been embroiled in a long-running patent suit against Merck and its spinoff Organon. The suit alleges that Organon’s drug, Nexplanon, is infringing multiple Microspherix patents. Nexplanon is a contraceptive implant that accounts for 10 percent of Organon’s sales. After several years, the suit is finally teeing up for trial in October 2023. Yet, Microspherix has recently tried to short-circuit the trial by asking the court to knock out one of Merck’s primary defenses in the case before trial. Will Microspherix’s ploy work?
Microspherix has asserted three patents against Merck. Each patent is directed to an implantable seed or strand that releases the drug over time and also includes a radiopaque marker for detection by X-ray within the patient’s body tissue. Merck previously filed a series of petitions for inter partes review (IPR) challenging the validity of each of Microspherix’s patents. Those IPRs failed to knock out the patents altogether. As a result, Merck has essentially already exhausted its effort to invalidate Microspherix’s patents based upon prior art.
Accordingly, Merck’s primary defense at the upcoming trial aims to take a different tact. Rather than relying upon prior art, Merck plans to argue that Microspherix’s patents should be cancelled because it was Merck, in fact, who was the first to conceive of the inventions disclosed in Microspherix’s patents. If Merck is successful on this defense, it will prevail at trial, and avoid any royalty liability on one of Organon’s largest drugs.
Merck’s evidence is fairly straightforward. Microspherix’s patents were filed in 2000 and 2001. Yet, Merck claims that as early as 1999, two Merck scientists, Jeroen Grandia and Marc-Anton Kruft, conceived of the same inventions disclosed in Microspherix’s patents. As proof of this, Merck points to an internal memo from 1999 produced during discovery that shows that Grandia and Kruft purportedly detailed the same inventions subsequently patented by Microspherix.
To understand Merck’s prior-inventorship defense requires a brief detour into U.S. patent law. For decades, the United States followed a first-to-invent scheme rather than a first-to-file scheme. If an inventor filed for a patent, and was granted one by the Patent Office, that first inventor could lose their patent if another inventor subsequently proved he or she was the first to actually invent what was claimed in the patent. In other words, where two people both invented the same thing (which has happened more often than one would think), the first person to get to the Patent Office was not necessarily the first person to get the patent.
This first-to-invent rule was embodied in an earlier version of the Patent Statute under 35 U.S.C. 102(g)(2). The Patent Statute has since been amended so that for patent applications filed after March 2013, the first-to-invent scheme no longer applies. Rather, the United States has now joined most of the rest of the world in following a first-to-file patent scheme. Yet, because Microspherix’s patents were filed before 2013, the earlier version of the Patent Statute still applies. Accordingly, Merck is still entitled to argue, under the old version of the Patent Statute, that it was Merck, in fact, who was purportedly the first to invent the patents previously granted to Microspherix.
To successfully claim under 35 U.S.C. 102(g) (pre-AIA) that you invented something someone else already patented, you must show both an earlier conception as well as reasonable diligence reducing the invention to practice. In other words, you must prove not only that you were the first to conceive of the invention, but also that you didn’t sit around on your idea, but diligently tried to reduce it to practice. One common way to reduce an invention to practice is to get a patent application on file at the Patent Office. Another important point is that you also have to show that you came up with the invention in the United States, and not somewhere abroad.
Herein lies Microspherix’s hook. Microspherix points out that Merck’s purported prior invention occurred abroad, in the Netherlands. It did not happen in the United States. Merck’s 1999 memo was purportedly authored by and distributed to people only within the Netherlands. Accordingly, as a matter of law, Microspherix argues that Merck’s prior-inventorship defense must fail.
Microspherix also argues that Merck’s prior-inventorship defense is deficient for a second reason. Namely, Merck did not diligently reduce the invention to practice. Rather, Merck eventually filed a patent application that purportedly disclosed the same invention claimed by Microspherix’s patents. But that patent application was filed in 2004. That was nearly five years after the 1999 memo where Merck purportedly conceived of the same invention. Accordingly, as a matter of law, Micropherix argues that Merck cannot show that it was diligent reducing the invention to practice.
Despite the upcoming trial scheduled for October 2023, Microspherix has asked the court to rule on Merck’s prior-inventorship defense before the trial. In particular, Microspherix has asked for the court’s permission to file a motion for summary judgment on Merck’s defense. Microspherix wants the court to review the evidence in advance of trial and find that that evidence weighs so heavily in Microspherix’s favor that no reasonable jury could agree with Merck’s defense.
Microspherix’s ploy is not simply an effort to relieve its burden at trial. Its ploy is also tactical. By seeking summary judgment on Merck’s prior-inventorship defense, Microspherix is attempting control the narrative that Merck presents to the jury. If Merck is permitted to enthrall the jury with a story that it was in fact Merck’s genius that actually came up with the asserted inventions, that will distract from Microspherix’s job of simultaneously proving that Merck has infringed those patents. In other words, Microspherix doesn’t want the jury confused about who actually invented the patents because that makes it harder to pin Merck as the bad guys stealing someone else’s invention.
Yet, even if the evidence may potentially favor Microspherix, its ploy may nevertheless fail. Earlier this year, the court acknowledged that this case has been pending for a long time. In an order filed February 27, 2023, the court stated, “given the age of this case, the Court intends to try it as expeditiously as possible.” (Case No. 17-03984, D.N.J., Dkt. 194). As a result, the court may be wary of taking up a time-consuming summary judgment motion the result of which may be just to go to trial in any event.
That is because, whenever a party moves for summary judgment, the ultimate inquiry is not necessarily whether the movant should win or lose on the merits of its argument. Rather, the ultimate inquiry is whether the evidence is so strong in the movant’s favor that it’s not worth sending the issue before the jury. Yet, if Microspherix’s motion is ultimately denied, then the result could just be to send the issue to the jury in any event. And months will have been lost just bring the court back to where it is right now—namely, teeing the case up for trial.
Worse, in Merck’s telling, the facts in favor of its prior-inventorship defense are not as clear cut as Microspherix would have them. Rather, according to Merck, there is more to the story. Merck points out that, following the 1999 memo, it disclosed the substance of that memo, including an x-ray visible Implanon, to Merck employees located in New Jersey. This is important because, although the statute requires prior invention to occur within the U.S., there is nevertheless caselaw suggesting that, even if a prior inventor conceives abroad, that inventor can nevertheless satisfy Section 102(g)(2) as long as that conception is promptly disclosed to agents within the U.S. Here, Merck claims that’s exactly what happened.
In addition, Merck pushes back against Microspherix’s claim that it sat on its purported conception for five years before filing a patent application in 2004. Rather, Merck claims there is considerable evidence showing that Merck’s Dutch scientists collaborated diligently with U.S. employees to develop a commercially-marketable drug as well as pursue FDA approval for that drug. And again, there is caselaw suggesting that the months required to acquire FDA approval for a drug may be sufficient to demonstrate reasonable diligence reducing a drug to practice.
Merck’s prior-inventorship defense may ultimately lose, but the facts do not necessarily appear to be clear cut enough for disposition on summary judgment. And the court in this case has already exhibited a preference for clearing this case off its docket as soon possible. It is therefore likely that one of Merck’s primary defenses to Microspherix’s lawsuit may ultimately be decided by a jury. That may ultimately suit Merck in the short-term, but whether it favors Microspherix in the long-term remains to be seen.