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July 2014: Quinn Emanuel Obtains Victory in Bet-the-Company Patent Litigation

July 2014

The firm recently obtained a key victory for an innovator pharmaceutical company, Avanir Pharmaceuticals, Inc., in a “bet-the-company” Hatch-Waxman patent litigation against five generic competitors in the District of Delaware. The judgment holds that Avanir’s Nuedexta® is entitled to patent protection until 2026. Nuedexta® is a combination of two drugs, dextromethorphan (“DM”) and quinidine (“Q”), and is used for the treatment of pseudobulbar affect, or PBA—a devastating neurological disorder characterized by episodes of involuntary laughing and crying that are unrelated to the patient’s mood.

The case began in July 2011, when Par Pharmaceutical, Inc. sent notice that it had filed an application with the Food and Drug Administration to market a generic version of Nuedexta® prior to the expiration of the patents that cover the product. Four other generics (Actavis, Wockhardt, Impax and Watson) quickly followed Par’s lead. Avanir’s patents claim the use of low-dose DM and Q combinations for the treatment of PBA—with DM as the therapeutic ingredient and Q acting to inhibit the body’s metabolism of DM. The generics argued that Avanir’s patents were invalid as obvious in view of earlier patents that broadly claimed the use of DM and Q, at much higher doses, for the treatment of PBA.

Quinn Emanuel quickly identified that the generics’ obviousness theories were based entirely on hindsight—starting with Avanir’s patents and working backwards to piece together the claimed inventions. Throughout discovery, the firm sought to expose the flaws in the generics’ misplaced theory, including that persons skilled in the art at the time would not have ignored the prior art’s teachings that much higher amounts of DM and Q were required to treat PBA. The firm obtained key admissions from the generics’ experts that persons skilled in the art at the time of invention would not have had reason to lower the doses of DM and Q used in the prior art to treat PBA, and that even if they did, they would not have reasonably expected that the claimed lower dose combinations could effectively treat PBA.

After a six-day bench trial in front of Judge Leonard P. Stark, the Court ruled in Avanir’s favor, holding the patents nonobvious. Judge Stark adopted many of Quinn Emanuel’s nonobviousness arguments wholesale in his opinion, agreeing persons skilled in the art would have had no reason to diverge from the DM and Q dosages disclosed in the prior art for the treatment of PBA. Judge Stark also credited the evidence presented by Quinn Emanuel that persons skilled in the art at the time of invention would not have expected the use of the claimed amounts of DM and Q to be effective in treating PBA where “the dose of Q administered was reduced approximately 80-93%” from the prior-art dose.

Judge Stark’s decision was critical to Avanir’s future. Nuedexta® provides virtually all of Avanir’s revenue, and many analysts predicted that Avanir would have had to shut its doors if it suffered defeat in this litigation. Instead, as a result of Quinn Emanuel’s victory, Avanir’s market value increased nearly 50% overnight, and Avanir retains patent protection on its flagship product for the next twelve-plus years.