District Court Invalidates Merck's Formulation Patent on Pepcid Complete, Relying on KSR v. Teleflex

Aaron Barkoff
In an opinion released Tuesday, Judge William H. Pauley III of the U.S. District Court for the Southern District of New York ruled that Merck's patent on the formulation for Pepcid Complete is invalid as obvious, clearing the way for Perrigo Co. to sell its own generic version of the medication. The decision is one of the first pharmaceutical patent decisions to rely on and quote extensively from the Supreme Court's April 30 decision in KSR v. Teleflex.
The patent-in-suit was Merck's U.S. Patent No. 5,817,340. Claim 1 of the '340 patent recites a solid oral dosage form comprising impermeably coated famotidine granules and aluminum hydroxide or magnesium hydroxide. Pepcid Complete comprises coated famotidine granules (to inhibit stomach acid secretion) and magnesium hydroxide (to neutralize stomach acid already present). The coating on the famotidine granules is important; without it, magnesium hydroxide would cause famotidine to degrade upon contact. Additionally, the coating masks the bitter taste of famotidine.
According to Judge Pauley's opinion, two prior art references, "Davis" and "Wolfe," had previously taught the use of famotidine with magnesium hydroxide in a pharmaceutical composition. Moreover, according to the opinion, two prior art patents, the '072 and '114 patents, taught coating of famotidine granules in order to mask famotidine's bitter taste.
Judge Pauley began his analysis by referring to the "teaching, suggestion, or motivation" test as follows: "Until recently, the Federal Circuit had employed an additional test for determining the obviousness of combining prior art references." Then, after reviewing the scope and content of the prior art, he stated: "Under KSR, 'the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.' The '340 patent does no more than combine the predictable results of Davis and Wolfe with the predictable results of the '072 and '114 patents."
Judge Pauley went on to imply that even pre-KSR, he would have found the '340 patent invalid as obvious, since one of skill in the art "would have been motivated to use impermeable coating to improve the palatability of a chewable tablet comprised of coated famotidine and antacids." Nonetheless, the decision is still informative of how district courts are applying KSR to pharmaceutical formulation patents.
Ortho-McNeil, a unit of Johnson & Johnson, markets Pepcid Complete in partnership with Merck. Pepcid Complete is an over-the-counter product intended for the treatment of heartburn, with annual retail sales of about $90 million. Perrigo reportedly plans to begin selling its generic version sometime next year, and expects to have 180-day exclusivity when it does.