McNeil Gelatin Capsules Patent Infringed By Bayer, Jury Says

Two gelcap formulations of Bayer aspirin infringe a McNeil-PPC patent covering dual-colored, gelatin-coated caplets, a jury concluded July 26.

Extra Strength Bayer 500 mg gelcaps (red and white) and Genuine Bayer Aspirin 325 mg gelcaps (yellow and white) literally infringe four claims of patent 4,820,524, entitled "Gelatin Coated Caplets and Process for Making Same," the jury found.

The panel awarded McNeil total damages of $6.2 mil., encompassing $300,000 in "lost profits" and a "reasonable royalty amount" of $5.9 mil.

McNeil-PPC division McNeil Consumer & Specialty Pharmaceuticals uses the patented technology in several OTCs, including Tylenol , Tylenol PM, and cough/cold products under the brand Motrin, and Pepcid AC .

McNeil-PPC sued Bayer in September 1999, alleging the latter "is and has been infringing, contributorily infringing and/or inducing infringement of one or more claims of the '524 patent...without license from McNeil." The complaint asserted McNeil "is being irreparably injured by the infringing activity."

The plaintiff sought entry of a judgment of infringement against Bayer, as well as a preliminary injunction barring such infringement, compensatory and treble damages, and attorneys' fees.

In a press release, McNeil said it introduced gelcaps in 1988 and that Bayer began selling infringing products in 1999.

According to the complaint, the U.S. Patent & Trademark Office issued the '524 patent to McNeilab, a predecessor-in-interest, on April 11, 1989. McNeilab was the assignee of inventor Norbert Berta.

The patent states the invention "provides a novel method for coating solid cores, such as caplets, with gelatinous coatings to produce simulated capsule-like medicaments."

"Such capsule-like medicaments are achieved by individually dipping and drawing first one end and then the other end of each caplet to provide a medicament which is observed to be similar to a regular capsule," the patent states.

An object of the invention is to provide "a simulated, capsule-like medicament having a gelatinous coating capable of being provided in two or more colors," the patent notes.

The patent also references capsule tampering concerns arising from the Tylenol cyanide poisoning incidents in the early 1980s. "It is another object of this invention to provide a simulated, capsule medicament that is tamper-resistant," the patent says.

"It is still another object of this invention to provide a novel and less expensive method and apparatus for adapting existing hard capsule equipment for manufacturing gelatin-coated caplets" and "to provide a heavy layer of gelatin as a single coating to cover imperfections inherent on the caplet core," the patent states.

The trial commenced June 11 before Judge Petrese Tucker and jury deliberations began July 25. Before the case went to the jury, the court granted Bayer judgment as a matter of law on McNeil's claim of willful infringement.

In its verdict, the jury concluded Bayer failed to show "by clear and convincing evidence" that any of the disputed claims in the '524 patent were invalid either as obvious in light of the prior art, or because the patent specification "does not provide an adequate written description" of the claims.

The jury further found that Bayer failed to demonstrate the disputed claims are invalid because Berta "failed to disclose in the '524 patent specification a best mode that he had contemplated for carrying out the invention claimed by that claim."

Bayer said it disagrees with the verdict and plans to appeal the decision.

The case marks the second recent patent decision involving McNeil. In June, a Philadelphia federal judge concluded the J&J division's patent claims for Imodium Advanced were obvious in light of the prior art and, therefore, invalid. The court awarded attorneys' fees to Perrigo, whom McNeil had sued for infringement (¹ (Also see "McNeil Imodium Patent Prosecution Conduct Leads To Perrigo Fee Award" - Pink Sheet, 1 Jul, 2002.), p. 3).

On July 23, McNeil appealed the decision to the U.S. Federal Circuit Court of Appeals.