GSK Annual Report 2002

104 GlaxoSmithKline Notes to the financial statements
30 Legal proceedings continued
In May 2001 Geneva Pharmaceuticals commenced an action in the
US District Court for the Eastern District of Virginia over four
patents recently issued to GlaxoSmithKline covering clavulanic acid,
a key ingredient in Augmentin and Timentin. Geneva asked the
court to declare the new patents, which expire in 2017 and 2018,
invalid. In August 2001 Geneva extended its complaint to cover
three additional patents which expired in 2002. In September 2001
Teva Pharmaceuticals filed a similar action challenging the four
recently issued patents and a patent expiring in December 2002
that cover Augmentin. In December 2001 Ranbaxy Pharmaceuticals
filed a further action challenging the four patents expiring in 2017
and 2018. The Ranbaxy and Teva actions were consolidated with
the Geneva case. At December 2001 and March 2002 hearings on
Teva’s motions for summary judgement the trial judge held that the
Group’s patents expiring in 2017 and 2018 were invalid. At the
consolidated trial in May 2002, the same judge ruled that the
patents expiring in 2002 were invalid. The FDA has granted
approval to all three companies and Lek Pharmaceuticals for their
generic products and all four are now marketed in the USA. The
Group continues to believe that its patents are valid and appealed
the District Court decisions to the CAFC. The hearing on the appeal
was heard on 5th March 2003 but as of the date of this report the
CAFC had not yet ruled on the appeal.
In August 2002 the Group commenced proceedings against
Geneva Pharmaceuticals and its parent Novartis AG, Biochemie
GmbH and Biochemie SpA before the US International Trade
Commission and in Colorado state court, alleging that the
manufacture and sale in the USA of Geneva’s generic Augmentin
product using a production strain stolen earlier from
GlaxoSmithKline constitutes misappropriation of the Group’s trade
secrets and unfair competition. Both proceedings seek to prevent
the importation and sale in the USA of generic Augmentin
containing clavulanate made using the stolen GlaxoSmithKline
production strain; the Colorado action seeks damages as well.
Similar state court actions have been initiated against Teva, Lek
and Ranbaxy.
Five distributors of generic pharmaceutical products have filed
ANDAs for sustained release bupropion hydrochloride tablets
(Wellbutrin SR and Zyban) in the USA, accompanied in each case
with a certification of invalidity of the Group’s patents. The Group
has brought suit for patent infringement against each of the filing
parties. The Group filed suit against Andrx Pharmaceuticals, the first
to file an ANDA, in the US District Court for the Southern District of
Florida. In February 2002 the District Court Judge granted Andrx’s
summary judgement motion and ruled that its product does not
infringe the Group’s patents. The Group has appealed that decision
to the CAFC. The oral argument on the appeal was held in
December 2002 but as of the date of this report the CAFC has not
ruled on the appeal. Actions have also been filed against Watson
Pharmaceuticals in the US District Court for the Southern District of
Ohio, Eon Labs Manufacturing in the US District Court for the
Southern District of New York, Impax Laboratories in the US District
Court for the Northern District of California and Excel
Pharmaceuticals in both the US District Court for the District of New
Jersey and the US District Court for the Eastern District of Virginia.
The Watson case has been settled. Judges granted summary
judgement of non-infringement in the Impax and Excel cases, both
of which are on appeal to the CAFC. Summary judgement was
denied to Eon. On Eon’s motion for reconsideration, the judge
confirmed denial of the summary judgement. No trial date has yet
been set in the Eon case. At this point Eon is the only distributor
with tentative FDA approval for its generic version of the product.
The 30-month Hatch-Waxman stay on final FDA approval expires
April 2003 but final FDA approval may also be held up in view of
rights to a 180 day marketing exclusivity that may be held by
Andrx.
The Group filed an action for infringement of its patents for
cefuroxime axetil, the active ingredient in the Group’s Ceftin antiinfective
product, against Ranbaxy Pharmaceuticals in the US District
Court for New Jersey. A preliminary injunction was granted in
favour of the Group but the CAFC subsequently vacated that
injunction and remanded the case to the District Court for a full
trial on the merits. Thereafter Ranbaxy launched its generic version
in March 2002. The trial is scheduled to begin 8th July 2003. Since
the patent as to which the Group claims infringement expires in
May 2003, the Group now seeks monetary damages based on
Ranbaxy’s sales. The Group has filed a similar action against Apotex,
a second distributor of generic pharmaceutical products, in the US
District Court for the Northern District of Illinois. A preliminary
injunction was granted in favour of the Group in June 2002. Apotex
subsequently obtained FDA approval for their generic product. The
full trial with Apotex was concluded in January 2003, but as at the
date of this report no decision had been announced.
In August 2001 the Group commenced an action in the US District
Court for the District of New Jersey against Reddy-Cheminor and
Dr. Reddy’s Laboratories, alleging infringement of three patents for
ondansetron, the active ingredient in Zofran tablets. FDA approval
of the ANDA filed by Reddy is stayed until the earlier of January
2004 or resolution of the patent infringement litigation. In March
2002 the Group filed a similar action against Teva, which alleged
invalidity or non-infringement of two method of use patents but
not the compound patent expiring in 2005, in the US District Court
for the District of Delaware. A trial date of 19th November 2003
has been set for the Teva case. A third ondansetron case, involving
orally disintegrating Zofran tablets, was commenced in February
2003 against Kali Laboratories in the US District Court for the
District of New Jersey.
In August 2002 the Group commenced an action in the US District
Court for the District of New Jersey against Teva, alleging
infringement of the Group’s compound patent for lamotrigine, the
active ingredient in Lamictal oral tablets. That patent expires in July
2008. The defendant has filed an ANDA with the FDA with a
certification of invalidity of the Group’s patent. FDA approval of
that ANDA is stayed until the earlier of January 2005 or resolution
of the patent infringement litigation. The case is in its early stages.
In October 2002 Pfizer Inc. filed an action against Bayer AG and
GlaxoSmithKline in the US District Court for the District of
Delaware, alleging that the manufacture and sale of Levitra
(vardenafil) would infringe a patent newly issued to Pfizer and
asking that Bayer and GlaxoSmithKline be permanently enjoined.
The case is in its early stages.
In January 2003 Cipla and Neolab filed an action in the UK High
Court, seeking revocation of one of the Group’s patents relating to
the asthma treatment Seretide/Advair. This patent, set to expire in
2013, including supplementary protection certificate protection,
relates to the combination of the active ingredients, salmeterol
and fluticasone propionate, on which separate patents exist (which
have not been challenged), providing patent protection in the UK
until late 2005. Several other UK Seretide patents, for example
those relating to the Diskus device and the CFC-free MDI device
which expire in 2011 and 2012 respectively, have not been
challenged. There has been no challenge to the Group’s patents
relating to Seretide/Advair in the USA or in other countries.