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Hi-Tech Pharmacal (HITK) Invalidates Five Beta-Alanine, CarnoSyn, Patents Held By NAI



9/6/2017 7:18:37 AM

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NORCROSS, Ga., Sept. 6, 2017 /PRNewswire/ -- Today we eviscerated (5) Natural Alternatives International, Inc. ("NAI"; NASDAQ: NAII) patents related to Beta-Alanine. NAI alleges to be a leading formulator, manufacturer and marketer of customized nutritional supplements. However, Hi-Tech had warned NAI that their patent portfolio was bogus and they proceeded with filing a lawsuit anyway. NAI had sued dozens of supplement manufacturers and raw material importers over the past 5 years trying to intimidate them into stopping selling beta alanine.

Hi-Tech Pharmaceuticals, Inc. (PRNewsFoto/Hi-Tech Pharmaceuticals, Inc.)

The five Beta Alanine patents, issued by the U.S. Patent and Trademark Office is part of NAI's portfolio covering CarnoSyn® beta-alanine. On September 16, 2016, Plaintiff NAI filed a complaint against Hi-Tech. (16-cv-2343-Doc. No. 1.) Subsequently, Plaintiff filed a first amended complaint against Hi-Tech, alleging claims for: (1) breach of contract; (2) patent infringement; and (3) violation of the Lanham Act § 32. (16-cv-2343-Doc. No. 21, FAC 197-217.) In its claim for patent infringement against Hi-Tech, Plaintiff alleges infringement of U.S. Patent Nos. 5,965,596, 7,825,084, RE45,947, 8,993,610, and 8,470,865. However, in a ruling by the Honorable MARILYN L. HUFF all 5 listed patents were invalidated.

The Supreme Court has "'long held that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.'" Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013). The Supreme Court has devised a two-stage framework to determine whether a claim falls outside the scope of section 101." Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016); see Alice Corp. Pty. v. CLS Bank Int'l, 134 S. Ct. 2347, 2355 (2014). "The prescribed approach requires a court to determine (1) whether the claim is directed to a patent-ineligible concept, i.e., a law of nature, a natural phenomenon, or an abstract idea, and if so, (2) whether the elements of the claim, considered both individually and as an ordered combination, add enough to transform the nature of the claim into a patent-eligible application."

Thus, the five beta alanine patents acknowledges that beta-alanine is a natural occurring phenomenon. Accordingly, claim 1 of '084 patent is directed to excluded subject matter specifically beta-alanine, a natural phenomenon thereby satisfying step one of the Alice inquiry.  Here, the inventive concept described in claim 1 of the '084 patent is placing a specific dosage of beta-alanine into a human dietary supplement. See '084 Patent at 22:26-29. The '084 patent acknowledges that placing a natural substance into a dietary supplement to increase the function of tissues is conventional activity. Because placing a natural substance into a human dietary supplement to increase the function of tissues when consumed is a conventional activity, employing a dietary supplement to administer beta-alanine a natural phenomenon to achieve a high level of carnosine synthesis in a human applying a natural law is insufficient to render the claims at issue patent eligible.

Additionally, Hi-Tech was awarded legal fees in 2017 from a similar dispute with Thermolife.

Recently Hi-Tech finished driving a stake into the ground in our relentless fight against patent trolls we were awarded our legal fees from the Third most litigious patent troll in America Thermolife International and Ron Kramer" said Jared Wheat, President of Hi-Tech Pharmaceuticals. To that end,  Hi-Tech Pharmaceuticals, Inc. ("Hi-Tech") moved for attorney fees against Plaintiffs The Board of Trustees of the Leland Stanford Junior University and ThermoLife International, LLC (collectively "Plaintiffs") in accordance with the requirements set forth in Federal Rule of Civil Procedure 54(d)(2)(B), Hi-Tech Pharmaceuticals recovered  $913,370.006 in attorney fees and $25,071.46 in expenses.

Beginning in March 2013, Thermolife filed eighty-one related patent infringement lawsuits in this Court, including the instant case regarding Hi-Tech Pharmaceuticals. The company prevailed in its argument that this case was "exceptional" due to the fact that Plaintiffs (1) lacked a reasonable basis to allege infringement; and (2) pursued a file-and-settle strategy typical of "patent trolls" while simultaneously engaging in "questionable litigation conduct." Hi-Tech also successfully argued that this case is "exceptional" because of Plaintiffs' aggressive litigation tactics; namely that Thermolife and Stanford sued many defendants in order to extract nuisance-value settlements, which is typical behavior for a "patent troll."

NAI tried to get creative and argue that the inventive concept of the patents-in-suit is to "unnaturally over-supplement the normal/natural level of beta-alanine in the diet of an individual over time to force an override [in] the homeostatic nature of the individual's muscle tissue to achieve an unnatural high level of carnosine synthesis." But the Court ruled that even assuming NAI was correct, this inventive concept would still be insufficient to render the patents-in-suit subject matter eligible under § 101. This inventive concept as described by NAI still only describes a natural law: the relationship between beta-alanine in an individual's diet with the carnosine synthesis that occurs in the individual's tissue.

Hi-Tech hopes that after winning another high stakes patent case that companies would simply leave Hi-Tech alone. In the past 5 years Hi-Tech has been part of invalidating the following compounds: D-Aspartic acid, L-Citrulline, L-arginine, creatine nitrate and beta alanine. In sum, the '084 patent, the '947 patent, the '376 patent, the '596 patent, the '865 patent, and the '610 patent claim ineligible subject matter and, thus, are invalid under 35 U.S.C. § 101.16 Accordingly, the Court granted Hi-Tech' motions for judgment on the pleadings, and the Court dismisses NAI's claims for patent infringement with prejudice.

About Hi-Tech Pharmaceuticals

Hi-Tech Pharmaceuticals (https://www.hitechpharma.com/index.htm) is a leading Sports Nutrition manufacturer. Since 1979, Hi-Tech Pharmaceuticals, Inc. and its sister company, Hi-Tech Nutraceuticals, LLC have been providing quality custom manufacturing services to the pharmaceutical, dietary supplement and beverage industries. Hi-Tech Pharmaceuticals is a cGMP certified company that operates out of Four (4) US Production facilities and (2) Warehouses, totally over 600,000 sq. ft. The two Georgia based production facilities are both located outside Atlanta in the Norcross and Suwanee Advanced Technology areas. Hi-Tech also has Two (2) facilities located outside State College, Pennsylvania. Hi-Tech holds a Drug Manufacturing License issued by the State of Pennsylvania Food and Drug Branch and is registered as a Food and Drug Establishment with the FDA in Pennsylvania.

Hi-Tech is an extremely aggressive company that has been looking to increase scale, revenue, market share, and competitive advantage by being very active with mergers and acquisitions. Hi-Tech has been able to increase its market share in the United States through the acquisition of Florida-based Synergy Nutritional Industries in 2005, and gained a larger market share when it acquired Advanced Performance Supplements ("APS") in 2011. Hi-Tech gained further industry dominance when it acquired Nittany Pharmaceuticals in Pennsylvania and ALR Industries in California in 2012. Hi-Tech's recent strategy has been, and according to its leaders will continue to be, growth through M&A activity. In 2015, Hi-Tech acquired Advanced Pharmaceuticals and Nutritionals, FormuTech Nutrition, Innovative Laboratories, Sports One, LG Sciences and iForce Nutrition. In 2016, Hi-Tech acquired the majority interest in Prime Nutrition and Gaspari Nutrition. In 2017, Hi-Tech acquired Top Secret Nutrition and launched the Nature's Essentials line of supplements. Hi-Tech also acquired one of the industry's top sports nutrition websites supplementwarehouse.com to showcase its brands of products.

Hi-Tech Pharmaceuticals has impressive capabilities to supply the global demand of sports supplements, vitamins, and pharmaceuticals. On an annual basis, Hi-Tech Pharmaceuticals can manufacture 35 billion tablets and 10 billion capsules. Hi-Tech Pharmaceuticals can also package 500 million bottles, 250 million blister packs, and 150 million pacquettes

 

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SOURCE Hi-Tech Pharmaceuticals, Inc.


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