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Teva/Cubist patent litigation over Cubicin could be closely fought, attorneys say 30 August 2010 Teva Pharmaceutical Industries (NASDAQ:TEVA) and Cubist Pharmaceuticals (NASDAQ:CBST) could be in a tight battle over obviousness in ongoing patent litigation over Cubicin (daptomycin), patent attorneys said. Settlement in the litigation is possible, they added, noting that Teva’s inequitable conduct challenge could raise the pressure on Cubist. Cubist sued Teva for patent infringement in March 2009 in Delaware federal court with respect to three patents: US Patent Nos. 6,468,967, 6,852,689 and RE39,071. A Markman hearing, or hearing on claim construction, was recently held in the ongoing litigation. Teva declined to comment for this article. A spokesperson for Cubist said, "We are confident in our patent estate for Cubicin and are asserting the patents vigorously in this litigation." She added that Cubist is on track for trial beginning on 25 April 2011. It could be "a close call" with respect to Teva’s obviousness challenge on the reissue patent, while Teva’s obviousness challenges on the other two patents are even stronger, said Robert Gould, a partner with Duane Morris. Teva has a “good challenge,” as the compound is similar to some of the prior art, he added. Kirby Drake, a senior associate at Klemchuk Kubasta, agreed that Teva has a “strong argument” with respect to obviousness, especially with respect to the reissue patent and a correction to the patent made late in the game. “I think that the claim construction ruling favors Teva in terms of the obviousness challenge for the method patents and a potential non-infringement argument for the reissue patent,” said Rod Fuller, a director at Fennemore Craig. Fuller noted that the reissue patent in particular is vulnerable to attack because of the new matter that was added, and that the claim terms favor Teva in terms of designing around the patent. However, Howard Susser, a partner with Burns & Levinson, disagreed, noting that Teva is seeking a broader claim construction. He added that the Judge simply said that the claims were entitled to their “plain and ordinary meaning,” which he said

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likely favors Cubist. Therefore, he explained that the claim construction ruling could favor Cubist because it can argue that to render the claims obvious, prior art must be at a dosage interval that minimizes skeletal toxicity, and in a therapeutically acceptable amount. Brian O’Shaughnessy, a partner with Buchanon Ingersoll, agreed, noting that interpreting the claims according to their plain and ordinary meaning probably favors Cubist. In addition, Teva is currently attempting to amend its counterclaim to assert an inequitable conduct defense. Inequitable conduct requires a showing of both materiality that the information withheld from the patent office was material to the patent office’s decision to grant the patent and that the misrepresentation was intentional. The standard for proving intent must be demonstrated with “clear and convincing evidence.” The defense must be pled with particularity by the defendant. Gould noted that it appears that Teva pled inequitable conduct with enough specificity that it is likely to be allowed in as a defense by the court. He noted that Teva is arguing that the patentees intentionally mischaracterized a prior art reference on order to gain patentability during patent prosecution. Susser and O’Shaughnessy agreed, noting that Teva’s inequitable conduct defense is “thoroughly pled,” and likely to be allowed as a defense in the case. Drake also agreed that the inequitable conduct defense was well-pled by Teva. Drake added that the inequitable conduct briefing puts additional pressure on Cubist to settle the litigation. She added that if the court allows Teva to add an inequitable conduct claim, it may “raise the stakes for Cubist to the point where it may settle.” Gould noted that there has been acquisition interest in Cubist and that this litigation is still standing in the way of that. A settlement would bring more certainty to the M&A situation, he added. Gould added that the case is likely to settle before summary judgment motions are made if Cubist is worried about Teva’s strong position. This news service previously reported that the litigation would likely keep potential buyers for Cubist wary until it was resolved.

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Fuller noted that the case may be more difficult to settle because of the pending pay-for-delay legislation before the Senate. by Sasha B. Coffiner