Cephalon’s Billion Dollar Patent Struck Down

On April 8, 2013, the Federal Court upheld the trial court’s judgment of invalidity and unenforceability for Cephalon’s RE’516 patent.  Cephalon’s RE’516 patent used to protect their mainstay drug – Provigil®.  Provigil® is the brand name for modafinil which is used to treat sleep disorders.  In 2007, Cephalon, now owned by Teva Pharmaceuticals, had over $800 million in sales from Provigil®.

Apotex, a generic drug manufacturer, challenged the validity and enforceability of Cephalon’s RE’516 patent, in Apotex, Inc. v. Cephalon Inc.  The trial court found that the patent was invalid and unenforceable because Cephalon committed fraud on the patent office by misrepresenting the true inventor of modafinil of a defined particle size and by intentionally omitting Laboratorie Lafon’s, a French company, invention of the claimed modafinil.  The Federal Circuit upheld that finding, which invalidates Cephalon’s patent.

Cephalon’s use of its RE’516 patent is also at issue in a number of antitrust lawsuits filed against Cephalon and several generic drug companies alleging a reverse payment scheme.  The Supreme Court recently granted cert. and heard oral argument in Federal Trade Commission v. Watson Pharmaceuticals, Inc., U.S. No. 12-416, wherein the Court is expected to rule on the antitrust implications of name brand-generic drug reverse payment schemes.

A copy of the Federal Circuit’s opinion can be found at Apotex, Inc. v. Cephalon, Inc., No. 2012-1417, 2013 U.S. App. Lexis 7018 (Fed. Cir. Apr. 8, 2013).  A copy of the District Court’s opinion can be found at Apotex, Inc. v. Cephalon, Inc., No. 06-cv-2768, 2011 U.S. Dist. Lexis 125859 (E.D.Pa. Oct. 31, 2011).

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