Free Proposed Pretrial Order - District Court of Delaware - Delaware

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EXHIBIT 1

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EXHIBIT 2

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EXHIBIT 2 DEFENDANTS' STATEMENT OF FACTS REMAINING TO BE LITIGATED A. The '098 Patent 1. Teva will prove by clear and convincing evidence that claim 10 of the '098

patent was anticipated under section 102 of the Patent Code or obvious under section 103 of the Patent Code as of August 16, 1984, the date on which the priority application was filed. Claim 10 claims the molecular structure for the compound lansoprazole. Lansoprazole is one of a class of anti-ulcer drugs known as proton proton-pump inhibitors ("PPIs"). 2. Claim 10 of the `098 patent is anticipated or rendered obvious by, at least,

the following prior art: (1) PPI compounds developed and patented by Hässle, including omeprazole (the first commercially available PPI); (2) PPI compounds developed and patented by Byk Gulden; and (3) an article authored by George Sachs. These references establish that, as of August 1984, the benzimidazole-methylsulfinyl-pyridine backbone structure common to PPI compounds (and first used in the PPI timoprazole in the 1970s) was known, it was known to use an alkoxy compound at the R4 position of the pyridine ring of the backbone structure, it was known to use fluorinated substituents in PPIs, and having a pKa value of the pyridine ring of approximately 4.0 allowed the PPI to avoid premature activation in slightly acidic portions of the body and to accumulate in the parietal cell where the PPI can properly activate. 3. Teva also will demonstrate that its prima facie case of obviousness of the

`098 patent is not rebutted by any alleged secondary considerations of non-obviousness. First, Teva will show that Plaintiffs cannot establish unexpectedly superior potency of lansoprazole over prior art products. Plaintiffs were in possession of data that demonstrated that lansoprazole was not unexpectedly superior in potency to omeprazole or a specific Byk Gulden compound. Further, Teva has conducted its own experiments using the same animal model disclosed in the

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`098 patent that show lansoprazole and prior art compounds to be of the same order of magnitude in potency. 4. Second, Teva will show that there is no demonstrable connection between

properties of the lansoprazole compound (or its formulation) and sales of TAP's Prevacid product sufficient to establish any alleged commercial success. Rather, such sales are due to the pre-existing PPI market established by omeprazole and advertising efforts by TAP after Prevacid was launched. 5. Third, Teva will show that Plaintiffs cannot prove that others in the

industry were initially skeptical of PPI compounds or that others in the industry failed to develop their own PPIs. In addition, Teva will demonstrate that its use of the active ingredient lansoprazole is required by statute and does not constitute a decision to "copy" any alleged invention of the `098 patent. Indeed, as required by statute, Teva has used the active ingredient in each of the commercially available PPIs in seeking approval from the U.S. Food and Drug Administration ("FDA") to market generic versions of those products. 6. Teva will prove by clear and convincing evidence that the `098 patent was

procured by inequitable conduct. In support of the patentability of the `098 patent, Takeda introduced experimental data from an indomethacin-induced antral ulcer rat model ("IMAU model") purporting to show that lansoprazole was superior in potency to prior art compounds, including omeprazole and a specific Byk Gulden compound. (See `098 patent, col. 6, ll. 5-28.) Teva will prove that Takeda was in possession of and intentionally withheld from the U.S. Patent and Trademark Office ("PTO") experimental results from the IMAU model and other relevant testing models that are inconsistent with the data submitted to the PTO. This includes data submitted to the FDA in the application seeking approval for the sale of lansoprazole in the U.S.

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Teva also will show that data from models other than the IMAU model are just as relevant to the potency of a PPI as the data actually submitted and would have been considered highly material to the prosecution of the application by a reasonable Patent Examiner. Teva further will show that, given Takeda's undisputed knowledge of the inconsistent experimental results and Takeda's decision to withhold such highly material information, it is proper to infer that Takeda had an intent to deceive the PTO. B. The '321 Patent 7. Teva will prove by a preponderance of the evidence that claim 2 of the

'321 patent is not infringed, either literally or under the doctrine of equivalents, by the products described in Teva's ANDA No. 77-255. In particular, Teva will show that Teva's products do not contain the "pharmaceutical composition" required by claim 2 of the `321 patent. Teva further will show that the benzimidazole compound (lansoprazole) and the basic inorganic salt (magnesium carbonate) in Teva's products are not "in contact ... evenly" as required by the language of claim 2 of the `321 patent. Teva's non-infringement of claim 2 is demonstrated by the design specifications for Teva's proposed products set forth in its ANDA and testing performed on Teva's proposed products. 8. Teva also will prove by clear and convincing evidence that claim 2 of the

`321 patent was obvious under section 103 of the Patent Code as of February 13, 1986, the date on which the priority application was filed. Teva will show that lansoprazole was a publicly known compound as of that date, that lansoprazole was known to be unstable in acidic environments, and that it was known to mix basic inorganic salts of magnesium with compounds that were unstable in acidic environments.

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C.

Injunction 9. Teva will demonstrate that an injunction by the Court preventing Teva

from marketing the proposed lansoprazole delayed-release capsule products described in ANDA No. 77-255 before the expiration of the '098 and '321 patents is not warranted. First, an injunction is not warranted because Teva has not infringed valid and enforceable patents, as explained above. Second, Plaintiffs will not be able to establish the factors for a permanent injunction discussed in eBay v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006). Third, Teva will show that any damages incurred due to sales of Teva's proposed products are calculable and would not exceed Teva's ability to pay them. 10. Teva will demonstrate that this is an exceptional case under 35 U.S.C. §

285, and Teva should be awarded attorneys' fees.

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EXHIBIT 3

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