updated 6/7/2005 3:55:35 PM ET 2005-06-07T19:55:35

A federal appeals court ruled Tuesday that three Purdue Pharma LP patents covering its OxyContin pain reliever were invalid, prompting Endo Pharmaceuticals Holdings Inc. to say it will launch its generic versions of the drug immediately.

The Washington court's ruling affirmed a decision made by the U.S. District Court for southern New York in January. The New York court said then that Endo's proposed generic products would infringe Purdue's patents, but ruled that those patents were invalid because of certain unfair conduct on Purdue's part in obtaining them, according to court papers. Endo said the ruling permanently blocks Purdue from enforcing the patents.

"They had implied that they conducted a clinical trial to support their claim that OxyContin would relieve pain in patients with chronic pain over a narrower range of doses and a longer period of time than existing opioids," Endo spokesman Bill Newbould said. "Purdue never made it clear to the patent office that it was just a hypothesis." Newbould said Purdue's claims have since proved true.

Privately held Purdue plans to appeal the decision by requesting a review by all 12 of the federal circuit judges, according to special counsel Tim Bannon. Tuesday's decision was handed down by a smaller, three-judge panel.

"Purdue has believed from the outset of this litigation that its patents covering OxyContin were properly obtained," Bannon said. He added that Endo could end up paying large damages if it launches the generic tablet and Purdue prevails in the final ruling. Endo's Newbould said the company is launching the drug now because it is confident the current decision will hold.

The Endo oxycodone tablets were approved in 2004 but Endo delayed their launch because of the patent dispute. The tablets use the same active ingredient as OxyContin and are made in doses of 10 milligrams, 20 milligrams, 40 milligrams and 80 milligrams.

OxyContin and its generic equivalents posted U.S. sales of $2 billion in 2004, according to Endo. Chadds Ford, Pa.-based Endo will be the first company to offer the lower-dose generic version of the extended-release tablets and will receive six months of exclusive marketing for those strengths.

Endo said it now plans to take Stamford, Conn.-based Purdue to court to block it from selling an "authorized generic" during this period. Companies that own a branded drug sometimes offer these off-brand equivalents to compete with lower-priced generic versions.

"We feel that, because they were found to have obtained the patents fraudulently, they shouldn't benefit from being one of only two drugs on the market," Newbould said. He said he was not aware of any court rulings that would set a precedent for such a decision.

OxyContin is approved to manage moderate-to-severe pain over an extended time. The popular pain pill is also highly addictive and has been abused by some patients, who grind it up to concentrate the active ingredient.

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