Patent Docs

Unforeseeability a Slender Reed for Rebutting Presumption of Prosecution History Estoppel

By Kevin E. Noonan --

The doctrine of equivalents, and the extent to which prosecution history estoppel limits application of the doctrine, was perhaps the issue that prompted the Supreme Court to start its decade-long review (and, generally, reversal) of Federal Circuit precedent (in cases like eBay Inc. v. MercExchange, L.L.C., KSR Int'l Co. v. Teleflex Inc., MedImmune, Inc. v. Genentech, Inc., Microsoft Corp. v. AT&T Corp., and Quanta Computer, Inc. v. LG Electronics, Inc.).  The Supreme Court and the Federal Circuit used the Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. case to set rough contours of how these two legal doctrines interact.  The Supreme Court's last word, in Festo VIII, established three grounds for rebutting a presumption of estoppel for amendments submitted during patent prosecution for reasons "substantially related to patentability."  These are:  1) that the equivalent was unforeseeable, 2) that the amendment had only a tangential relation to the equivalent, or 3) that there was "some other reason" that suggested the patentee would not have reasonably been expected to describe the equivalent.  The Federal Circuit, tasked with establishing the extent to which these exceptions apply, last spoke in Festo X, where the Court held that "an alternative is foreseeable if it is disclosed in the pertinent prior art in the field of the invention.  In other words, an alternative is foreseeable if it is known in the field of the invention as reflected in the claim scope before amendment."  Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 493 F.3d 1368, 1379 (Fed. Cir. 2007).

However, as in other areas of patent law where the Federal Circuit must labor to flesh out rather broad, general directives from the Supreme Court (such as obviousness under KSR), development in the lower courts occurs on a case-by-case basis.  The latest case in which the Court assessed the scope of foreseeability for rebutting prosecution history estoppel, Duramed Pharmaceuticals, Inc. v. Paddock Laboratories, Inc., followed a trend started in Festo X and applied in several other doctrine of equivalents decisions by the Federal Circuit in the nine years since the Supreme Court established foreseeability as a basis for rebutting the presumption of prosecution history estoppel.  The Court affirmed a District Court finding that the presumption of prosecution history estoppel applied to the claim limitation at issue (relating to ethyl cellulose used as a moisture barrier coating element in a pharmaceutical formulation of conjugated estrogens) because the patentee, Duramed, narrowed the scope of that claim element to response to a rejection over prior art.  The Federal Circuit rejected Duramed's assertion that the alleged equivalent used by accused infringer Paddock Labs (polyvinyl alcohol) was not foreseeable, because polyvinyl alcohol was known in the pharmaceutical arts as a moisture barrier coating for pharmaceuticals, and that the failure of the art to teach this use specifically in combination with conjugated estrogens did not make its use unforeseeable.

This decision is consistent with how the Federal Circuit has consistently applied unforeseeability as a basis for rebutting the presumption of prosecution history estoppel.  In Festo X, the Court held that "foreseeability does not require that the accused infringing product or process be foreseeable, nor that any equivalent exist at the time; rather foreseeability only requires that one of ordinary skill in the art would have reasonably foreseen the proposed equivalent at the pertinent time."  Festo X, 493 F.3d at 1382.  Further:

This criterion presents an objective inquiry, asking whether the alleged equivalent would have been unforeseeable to one of ordinary skill in the art at the time of the amendment.  Usually, if the alleged equivalent represents later-developed technology (e.g., transistors in relation to vacuum tubes, or Velcro® in relation to fasteners) or technology that was not known in the relevant art, then it would not have been foreseeable.  In contrast, old technology, while not always foreseeable, would more likely have been foreseeable.  Indeed, if the alleged equivalent were known in the prior art in the field of the invention, it certainly should have been foreseeable at the time of the amendment.  By its very nature, objective unforeseeability depends on underlying factual issues relating to, for example, the state of the art and the understanding of a hypothetical person of ordinary skill in the art at the time of the amendment.  Therefore, in determining whether an alleged equivalent would have been unforeseeable, a district court may hear expert testimony and consider other extrinsic evidence relating to the relevant factual inquiries.

Festo IX, 344 F.3d at 1369.  The theoretical underpinnings of this standard were enunciated by the Federal Circuit in Honeywell Int'l, Inc. v. Hamilton Sundstrand Corp., 523 F.3d 1304, 1312-13 (Fed. Cir. 2008):

The principle of foreseeability ties patent enforcement appropriately to patent acquisition.  In making this connection, foreseeability reconciles the preeminent notice function of patent claims with the protective function of the doctrine of equivalents.  Thus, foreseeability in this context ensures that the doctrine does not capture subject matter that the patent drafter could have foreseen during prosecution and included in the claims.  The goal of the principle is to ensure that the claims continue to define patent scope in all foreseeable circumstances, while protecting patent owners against insubstantial variations from a claimed element in unforeseeable circumstances.  The foreseeability principle thus relegates the doctrine of equivalents to its appropriate exceptional place in patent enforcement.

The Court specifically rejected the argument (raised again by Duramed) that the equivalent must be foreseeable for the specific use for which it is applied in the allegedly infringing article in Schwarz Pharma, Inc. v. Paddock Labs., Inc., 504 F.3d 1371 (Fed. Cir. 2007).  There, the accused infringing article contained MgO as an equivalent to an alkali or alkaline earth metal carbonate in a pharmaceutical formulation of moexipil hydrochloride (and ACE inhibitor).

The Court came to the same conclusion in Glaxo Wellcome, Inc. v. Impax Laboratories, Inc., 356 F.3d 1348 (Fed. Cir. 2004), which involved sustained release formulations of bupropion hydrochloride sold by Glaxo as Wellbutrin®SR for treatment of depression and as Zyban® for smoking cessation.  The limitation added by amendment was that the formulation comprised hydroxypropyl methylcellulose (HPMC, a partly O-methylated and O-(2-hydroxypropylated) cellulose), where the accused infringing article contained hydroxypropyl cellulose (HPC).  The Federal Circuit affirmed the District Court's finding that "anyone skilled in the art [at the relevant time] would have known that HPC and HPMC were substantially equivalent," and that the Supreme Court required that a patent "must show that at the time of the amendment [that] one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent."  Festo VIII, 535 U.S. at 741.  "The Supreme Court ties foreseeability to whether the applicant would have been expected to know of, and thus properly claim, the proposed equivalent at the time of amendment."  The "quintessential example of an unforeseeable equivalent" according to the Court, is after-arising technology, and unforeseeability as a basis for rebutting the presumption of prosecution history estoppel "compensates for the patentee's inability to claim" the unforeseeable.

In Glaxo, the Federal Circuit expressly uncoupled the existence (and hence foreseeability) of an equivalent from whether it was known to be an equivalent, citing this language from the Supreme Court's Festo VIII opinion:

The Supreme Court's passage addresses the time of amendment only and does not address the instance where the applicant could not properly claim a known equivalent because it had purposely left that known substitute out of its disclosure at the time of filing.  In such an instance, the applicant should have foreseen and included the proposed equivalent in its claims at the time of filing.  The Supreme Court states clearly in Festo: "The patentee, as the author of the claim language, may be expected to draft claims encompassing readily known equivalents."  535 U.S. at 740.

Viewed in this light, the result in Duramed is unremarkable, but points out once again that the Federal Circuit will seek (under the appropriate evidentiary circumstances) to use prosecution history estoppel to limit the scope of equivalents available to patentees.  This is particularly important in technologies, such as the biotech and especially the pharmaceutical industries, where salts, excipients, and other components of commercially valuable formulations and dosage forms can be substituted to provide substantially the same active pharmaceutical agent in alternative forms.  These alternative excipients will thus always exist in the pharmaceutical arts and thus presumptively be foreseeable at the time an estoppel-raising amendment is made.  Moreover, the argument regarding unforeseeability supporting the rebuttal of prosecution history estoppel is in conflict with the assertion that the accused infringing article comprises an equivalent:  the same factors (interchangeability, insubstantial differences) that support infringement under the doctrine of equivalents also support the argument that the equivalent was foreseeable.  See Ranbaxy Pharms. Inc. v. Apotex, Inc., 350 F.3d 1235 (Fed. Cir. 2003).  The availability of these choices suggests that claims useful and sufficient to protect pharmaceutical and biotech drugs should be pursued with the minimum of amendment, either by crafting several claims of narrow scope or including in claims only the minimum required ingredients to provide operable embodiments of the invention.  The commercial and pharmaceutical "equivalence" of PVA and ethyl cellulose-containing excipients as moisture barrier agents was established by Paddock's successful incorporation of PVAs into it commercial embodiments.  The legal equivalence as evidenced by the cited art suggests that the patentees could profitably have either included PVAs (and any other promising, or not so promising, moisture barrier coatings) in their specification, or avoided reciting these excipients in the claims of the '638 patent.  In either case, because only hindsight is 20-20, it will remain a challenge to appropriately protect pharmaceutical and biologic drugs in view of the Federal Circuit's parsimonious application of the doctrine of equivalents.

Duramed Pharmaceuticals, Inc. v. Paddock Laboratories, Inc. (Fed. Cir. 2011)

By Donald Zuhn --

In Duramed Pharmaceuticals, Inc. v. Paddock Laboratories, Inc., the Federal Circuit today affirmed a decision by the District Court for the Southern District of New York granting summary judgment of noninfringement to Paddock Laboratories, Inc. with respect to U.S. Patent No. 5,908,638.  The '638 patent, which is assigned to Duramed, relates to a conjugated estrogen forumulation that includes a moisture barrier coating (MBC) (the claimed conjugated estrogens are extremely water sensitive and therefore highly susceptible to moisture degradation during storage).

During prosecution of the '638 patent, Duramed overcame an obviousness rejection by amending claim 1, which originally recited a conjugated estrogen pharmaceutical composition "coated with a moisture barrier coating," to incorporate the limitations of dependent claim 7, which frecited a moisture barrier coating comprising ethylcellulose.  Claim 1 as issued recites (emphasis added):

1.  A pharmaceutical composition in a solid, unit dosage form capable of oral administration for the hormonal treatment of peri-menopausal, menopausal and post-menopausal disorders in a woman comprising:
    conjugated estrogens coated onto one or more organic excipients forming a powdered conjugated estrogen composition where said composition is substantially free of inorganic excipients and further comprises about 30-70% gel-forming organic excipient and about 30-70% non-gel forming organic excipient by weight and having less than about 2.5% free water by weight and greater than 2.5% total water wherein said solid unit dosage form is coated with a moisture barrier coating comprising ethylcellulose.

Seeking approval to market a generic version of Duramed's conjugated estrogen hormone replacement therapy Cenestin®, Paddock filed an Abbreviated New Drug Application (ANDA) with the FDA.  In response to that ANDA filing, Duramed brought suit against Paddock for infringement of claims 1, 4, and 6-8 of the '638 patent under the doctrine of equivalents (Paddock's proposed generic uses a polyvinyl alcohol (PVA) MBC, marketed as Opadry AMB, instead of ethylcellulose).  Paddock then moved for summary judgment of noninfringement, asserting that Duramed was barred by prosecution estoppel from alleging that PVA met the "moisture barrier coating comprising ethylcellulose" limitation of the asserted claims.  In its motion for summary judgment, Paddock relied, in part, on an International publication (the Colorcon PCT) disclosing formulations of PVA-based MBCs, including Opadry AMB.  The District Court granted Paddock's motion, holding that the amendment adding the ethylcellulose limitation was substantially related to patentability, this amendment narrowed the scope of the asserted claims, and that Duramed had surrendered all subject matter between the original and amended claim scope.  The District Court also held that PVA MBCs were foreseeable at the time of the narrowing amendment based on, inter alia, the prior art disclosure of both PVA as "a moisture barrier coating for pharmaceutical tablets" and the Opadry AMB formulation used by Paddock.

In an opinion authored by Judge Lourie and joined by Judges Gajarsa and Dyk, the Federal Circuit noted that because Duramed narrowed the scope of claim 1 in response to a prior art rejection, a presumption of prosecution history estoppel applied.  The Court also noted that Duramed could attempt to rebut this presumption by showing that the alleged equivalent would have been unforeseeable at the time of the amendment.  Duramed argued on appeal that PVA MBCs were not foreseeable because the relevant art did not disclose either PVA or Opadry AMB as suitable MBCs for moisture-sensitive pharmaceutical compounds, such as conjugated estrogens.  The Court noted, however, that "to the extent that Duramed argues that foreseeability requires that PVA must have been known as an MBC for use with conjugated estrogens, we have previously rejected such a restrictive definition of the field of invention."  The Court then determined that "the Colorcon PCT discloses PVA MBCs, including Opadry AMB, in the field of pharmaceutical compositions, rendering such PVA MBCs 'known in the field of the invention,' and thus foreseeable."

In response to Duramed's argument that the Colorcon PCT fails to establish that PVA-based Opadry AMB was suitable as an MBC because it provides only conclusory statements that the inventors had solved the technical drawbacks of PVA MBCs, the Federal Circuit noted that "foreseeability does not require such precise evidence of suitability," adding that:

[E]ven if the PCT disclosure indicates that PVA is less than ideal in some pharmaceutical uses as an MBC, it is still disclosed to be useful as such, and that renders it foreseeable for purposes of prosecution history estoppel.  Foreseeability does not require flawless perfection to create an estoppel.

Finding that Duramed had failed to show that PVA MBCs would have been unforeseeable at the time of its narrowing amendment, the Federal Circuit affirmed the District Court's grant of summary judgment of noninfringement.

Duramed Pharmaceuticals, Inc. v. Paddock Laboratories, Inc. (Fed. Cir. 2011)
Panel: Circuit Judges Lourie, Gajarsa, and Dyk
Opinion by Circuit Judge Lourie

Reckitt Benckiser Inc. v. Watson Laboratories, Inc. - Florida (Fed. Cir. 2011)

    By Donald Zuhn --

Last week, in Reckitt Benckiser Inc. v. Watson Laboratories, Inc. - Florida, the Federal Circuit affirmed a decision by the District Court for the Southern District of Florida holding that Defendant-Appellee Watson Laboratories, Inc. - Florida did not infringe the asserted claims of U.S. Patent No. 6,372,252.  The Federal Circuit also determined that the District Court correctly construed the asserted claims of the '252 patent.

Plaintiff-Appellant Reckitt Benckiser Inc. markets bilayer tablets comprising guaifensin, an expectorant used to relieve congestion, as Mucinex®.  Reckitt's bilayer tablets contain guaifensin in both immediate release (IR) and sustained release (SR) formulations.  In obtaining FDA approval for its Mucinex® products, Reckitt listed the '252 patent in the Orange Book as covering the guaifensin tablets.

Seeking approval to market guaifensin tablet formulations, Watson filed an Abbreviated New Drug Application (ANDA) with the FDA.  In response to Watson's ANDA filing, Reckitt brought suit against Watson for infringement of claims 24, 26-28, 31-34, 39, 57, and 58 of the '252 patent.  Representative claim 24 reads (emphasis added by panel):

24.  A modified release product having two portions, wherein a first portion comprises a first quantity of guaifenesin in an immediate release form which becomes fully bioavailable in the subject's stomach and a second portion comprises a second quantity of guaifenesin in a sustained release form wherein the ratio of said first quantity to said second quantity provides a Cmax in a human subject equivalent to the Cmax obtained when the first of three doses of a standard immediate release formulation having one third the amount of guaifenesin is dosed every four hours over a 12 hour period and wherein said product also provides therapeutically effective bioavailability for at least twelve hours after a single dose in a human subject according to serum analysis.

In construing the term "portion," which appears in each of the asserted independent claims, the District Court determined that the term means "a discrete part of the product."  Following a bench trial, the District Court found that Watson's products, which are non-layered polymer matrix tablets made from a single guaifenesin formulation, do not have separate IR and SR portions, and therefore do not literally infringe the asserted claims of the '252 patent.  The District Court also found no infringement under the doctrine of equivalents because Reckitt disclaimed products lacking two discrete structural portions during prosecution, and Watson's products lack two discrete structural portions.

In its opinion, the Federal Circuit noted that the prosecution history of the '252 patent was relevant to the parties' arguments on appeal.  The Court pointed out that as originally filed, claims 1-11 were directed to a SR composition, claims 12-24 were limited to products with two portions, and claims 25-32 were directed to modified release tablets.  In response to a rejection of claims 1-32 for obviousness, applicants cancelled the claims and added new claims 33-55, stating that the new claims were directed to "[a] modified release tablet having two portions," and adding that "the sustained release claims have been cancelled to facilitate prosecution."  Applicants also distinguished the new claims over the cited prior art, stating that one reference "does not disclose a composition having both an immediate release portion . . . and a sustained release portion," and that the other reference, despite disclosing tablets with two separate portions, "specifically teaches away from employing any immediate realease portion."

On appeal, Reckitt argued that the District Court erred in construing "portion" and in finding no infringement either literally or under the doctrine of equivalents.  In determining that the District Court did not err in construing the term "portion" to mean "a discrete part of the product," the Federal Circuit noted that:

The applicants disavowed claim coverage of sustained release tablets by cancelling original claims 1-11 and remarking to the examiner that "[o]riginal claims 1-11 were directed to a sustained release formulation . . . . [T]he sustained release claims have been cancelled to facilitate prosecution."  The unmistakable effect of that disavowal, evident from the applicants' remarks distinguishing the prior art, was to limit the remaining claims to two-portion guaifenesin products [citations omitted].

The panel determined that "[t]he file history thus demonstrates a 'clear and unambiguous' prosecution disclaimer."

As for the District Court's finding of no infringement, the Federal Circuit stated that:

As the court correctly found, Watson's products do not infringe because they are non-layered, single-formulation polymer matrix tablets that do not contain the claimed "first portion" or "second portion."  . . .  The district court correctly concluded that Watson's products do not have two structural portions and that guaifenesin granules on the surface of Watson’s tablets do not constitute the claimed first portion of guaifenesin in an IR form.

With respect to infringement under the doctrine of equivalents, the panel concluded that:

[O]n the facts of this case, prosecution history estoppel bars Reckitt from recapturing single-formulation SR guaifenesin tablets like those it disclaimed in obtaining the '252 patent.  As the district court correctly noted, Reckitt's narrowing claim amendments were made for reasons of patentability [citations omitted].

The Federal Circuit therefore affirmed the District Court's finding of no infringement, either literally or under the doctrine of equivalents.

Reckitt Benckiser Inc. v. Watson Laboratories, Inc. - Florida (Fed. Cir. 2011)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Linn, and Dyk
Opinion by Circuit Judge Lourie

Federal Circuit Grants En Banc Review in McKesson Technologies Inc. v. Epic Systems Corp.

By Donald Zuhn --

One day after issuing its en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., the Federal Circuit decided that the appeal in McKesson Technologies Inc. v. Epic Systems Corp. warrants en banc consideration.  In the Court's per curiam order, it noted that the panel that heard the appeal considered the petition for rehearing submitted by Plaintiff-Appellant, McKesson Technologies Inc., as well as McKesson's motion for expedited consideration and offer of accelerated briefing in view of the Court's grant of en banc review in Akamai Technologies, Inc. v. Limelight Networks, Inc., Defendant-Appellee Epic Systems Corp.'s response to the motion to expedite, and McKesson's reply.  The petition, motion, response, and reply were then referred to the other Circuit Judges, a poll on whether to rehear the appeal en banc was requested and taken, and the Court decided to hear the appeal en banc and vacate the panel's April 12, 2011 opinion.

The parties have been asked to file new briefs addressing the following issues:

1.  If separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement or for contributory infringement?  See Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565 (Fed. Cir. 1983).

2.  Does the nature of the relationship between the relevant actors -- e.g., service provider/user; doctor/patient -- affect the question of direct or indirect infringement liability?

McKesson must file its brief by June 20, 2011, and Epic Systems must file its response 30 days from the date of service of McKesson's brief.  McKesson's reply would be due 15 days from the date of service of Epic Systems' response.  The Court noted that it would entertain briefs of amici curiae, which may be filed without consent and leave of Court.

Last month, the Federal Circuit decided to hear the Akamai Technologies, Inc. v. Limelight Networks, Inc. appeal en banc.  In that appeal, which was originally decided on December 20, 2010, the parties have been asked to file new briefs addressing the following issue:

If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?

Pursuant to the Court's order, Plaintiffs-Appellants' (Akamai Technologies and the Massachusetts Institute of Technology) brief is due on June 4, 2011, Defendant-Cross Appellant Limelight Networks' is due 30 days from the date of service of Plaintiffs-Appellants' brief, and Plaintiffs-Appellants' reply brief is due 15 days from the date of service of Limelight Networks' response.  The Court noted that it would entertain briefs of amici curiae, which may be filed without consent and leave of Court.

McKesson Technologies Inc. v. Epic Systems Corp. (Fed. Cir. 2011)
Order, per curiam

Adams Respiratory Therapeutics, Inc. v. Perrigo Co. (Fed. Cir. 2010)

By Donald Zuhn --

In Adams Respiratory Therapeutics, Inc. v. Perrigo Co., decided last Thursday, the Federal Circuit vacated and remanded a determination by the District Court for the Western District of Michigan that the guaifenesin product described in Defendants-Appellees' ("Perrigo") Abbreviated New Drug Application (ANDA) would not infringe the asserted claims of Plaintiffs-Appellants' ("Adams") U.S. Patent No. 6,372,252.  The panel's decision to vacate was based in part on the District Court's erroneous claim construction.

The '252 patent relates to controlled-release formulations of guaifenesin (at left), an expectorant used to thin, loosen, and help expel mucus that causes congestion.  The preferred embodiment of the '252 patent is Mucinex®, an extended release guaifenesin tablet that contains an immediate release (IR) portion and a sustained release portion.  Seeking approval to market 600 mg guaifenesin extended-release tablets, Perrigo filed an ANDA with the FDA.  In response to Perrigo's ANDA filing, Adams brought suit against Perrigo for infringement of claims 26, 33, 34, and 39 of the '252 patent.

After construing the claims, the District Court granted summary judgment of noninfringement to Perrigo.  At issue before the District Court was the meaning of the term "equivalent" in claim 24, from which each of the asserted claims depends.  Claim 24 recites (emphasis added):

24.  A modified release product having two portions, wherein a first portion comprises a first quantity of guaifenesin in an immediate release form which becomes fully bioavailable in the subject's stomach and a second portion comprises a second quantity of guaifenesin in a sustained release form wherein the ratio of said first quantity to said second quantity provides a Cmax in a human subject equivalent to the Cmax obtained when the first of three doses of a standard immediate release formulation having one third the amount of guaifenesin is dosed every four hours over a 12 hour period and wherein said product also provides therapeutically effective bioavailability for at least twelve hours after a single dose in a human subject according to serum analysis.

The District Court construed "equivalent" as "within 80% to 125% of the value with which it is being compared, at a 90% confidence interval," basing its construction on statements made by Adams during reexamination proceedings on the '252 patent.  According to the Court, "Adams explicitly stated during reexamination that 'equivalent' meant 'the FDA bioequivalence guidelines' [i.e., the FDA's "Approved Drug Products with Therapeutic Equivalence Evaluations," which reflect both an 80 to 125% range and a 90% confidence interval]."  In addition, the Court noted that a declaration submitted by Adams during reexamination indicated that one of ordinary skill in the art would understand the term "equivalent" to mean within the FDA bioequivalent range of 80 to 125%.

On appeal, Adams challenged the requirement of a 90% confidence interval, noting that the '252 patent does not require or mention such an interval.  While acknowledging that it defined "equivalent" to mean within the 80 to 125% range, Adams argued that a 90% confidence interval was never included in that definition.  Adams asserted that the 90% confidence made sense in the context of drug approval, but not in the context of proving infringement, and that by requiring a 90% confidence interval, the District Court was requiring Adams to prove that Perrigo's guaifenesin product would infringe the '252 patent 90% of the time (rather than simply showing that it was more likely than not that Perrigo's ANDA, if approved, would permit Perrigo to market a product that infringes the '252 patent).  Perrigo countered that Adams "expressly defined 'equivalent' as FDA's bioequivalence guidelines, i.e., 'within 80% to 125% of the value with which it is being compared, at a 90% confidence interval."

In vacating the District Court's summary judgment of noninfringement, the Federal Circuit construed "equivalent" to require a Cmax that is 80% to 125% of the value to which it is being compared, adding that "[c]ontrary to Perrigo's assertion, Adams did not define equivalent as meeting all of the requirements of the FDA’s bioequivalence guidelines," but rather referred specifically to the 80 to 125% range of the FDA guidelines.  The panel noted that "[t]he range and the confidence interval are independent concepts," explaining that "[t]he range reflects 'a medical decision that, for most drugs, a -20%/+25% difference in the concentration of the active ingredient in blood will not be clinically significant,'" and that "the 90% confidence interval reflects the FDA's concern that a generic drug consistently match the performance of the branded drug."  With respect to the District Court's construction, the panel stated that:

Patent infringement does not require bioequivalence, and Adams did not import the 90% confidence interval into its claim.  Requiring a 90% confidence interval would inappropriately raise the bar for establishing infringement.  Adams must show that it is more likely than not that Perrigo's ANDA product will have a Cmax within the 80 to 125% range.  Adams is not required to show that Perrigo's product will meet this requirement 9 times out of 10.

Turning to the issue of equivalence, the panel noted that before the lower court, Adams had failed to present evidence of equivalence sufficient to create a genuine issue of material fact of infringement.  In particular, Adams had attempted to show that Perrigo's ANDA product would have a Cmax equivalent to a standard IR product by showing that Perrigo's ANDA product was bioequivalent to Mucinex® and that Mucinex® was bioequivalent to a standard IR product.  The District Court found fault with Adams' comparison, in particular because Adams had compared Perrigo's ANDA product to Adams' commercial embodiment.  The lower court determined that equivalence must be shown by a two-way crossover study comparing Perrigo's ANDA product and a standard IR product, as required by the FDA to establish bioequivalence (a study that Adams had not performed).

The Federal Circuit agreed with Adams that a two-way crossover study was unnecessary and that Adams had provided sufficient evidence of infringement to create a genuine issue of material fact.  With respect to Adams' comparison of Perrigo's ANDA product to Adams' commercial embodiment, the panel stated that "[o]ur case law does not contain a blanket prohibition against comparing the accused product to a commercial embodiment," and added that "when a commercial product meets all of the claim limitations, then a comparison to that product may support a finding of infringement."

Perrigo also argued that one could not establish infringement based on the available data.  However, the panel noted that while Perrigo's argument appears to assume that the claim requires a 90% confidence interval, Perrigo had offered no explanation why Adams' evidence failed to establish infringement under the correct construction of "equivalent."  In addition, the Court noted that Adams presented more than just the fact of bioequivalence of the two sets of products (i.e., Perrigo's ANDA product and Mucinex®; Mucinex® and a standard IR product), explaining that:

If Adams had relied on the mere fact of bioequivalence of the two sets of products (and no PK data or Cmax values), that would not be enough to survive summary judgment.  If product A is bioequivalent to B, and B is bioequivalent to C, then it is entirely possible that A is not equivalent to C because bioequivalence indicates a range of values (80 to 125%).  Bioequivalence values on the low or high end of the range would not indicate equivalence (e.g., if A is consistently 80% of B, and B is consistently 80% of C, then A is likely to be 64% of C).  However, here, in addition to its evidence of bioequivalence, Adams presented actual PK data and Cmax values.  In light of this evidence, a fact-finder could reasonably conclude that it is more likely than not that Perrigo's ANDA product will have a Cmax equivalent to that of a standard IR product.  Therefore, Adams has raised a genuine issue of material fact on infringement under the proper construction of the term equivalent, sufficient to preclude summary judgment.

The Federal Circuit also rejected Perrigo's alternative basis for affirming the District Court's finding of noninfringement:  that Adams cannot establish that Perrigo's ANDA product has an IR portion of guaifenesin that becomes "fully bioavailable in the subject's stomach" as required by claim 24.  On appeal, Perrigo asserted that "bioavailable" means absorption, and Adams contended that it means release into the stomach, rather than absorption into the body.  In support of its position, Adams pointed to the specification, which repeatedly states that the IR portion of guaifenesin is released in the stomach, but never states that it is absorbed in the stomach.  While acknowledging that "Perrigo and Adams each proposed a reasonable construction of the term bioavailable in the abstract," the panel concluded that:

Adams' construction is consistent with the use of this term in the specification; Perrigo’s is not.  Claim terms are not construed in a vacuum divorced from the specification.  Although the specification never expressly defines bioavailable, it uses the term when describing the availability of the drug for absorption, not the actual absorption.

. . .

Adams' construction -- requiring release and availability for absorption -- covers the preferred embodiment.  Perrigo's construction -- requiring both release and actual absorption -- excludes the preferred embodiment and essentially all guaifenesin formulations, as the specification explains that absorption occurs in the intestinal tract.

The last section of the opinion addresses Adams argument that it should be allowed to establish infringement of claim 34 under the doctrine of equivalents.  According to the panel, claim 34 recites:

34.  The modified release product of claim 26 [which claims the modified release product of claim 24 wherein the total quantity of guaifenesin is 600 mg] wherein the Cmax of said product is at least 1000 ng/mL and said product has an AUCinf of at least 3500 hr*ng/mL.

Adams noted that the highest AUCinf (the area under a plasma concentration versus time curve, i.e., the total amount of guaifenesin absorbed by the subject) for Perrigo's ANDA product was 3493.38 hr*ng/mL, which was within 0.189% of the recited value.  Citing Abbott Labs. v. Dey, L.P., 287 F.3d 1097, 1100, 1105-08 (Fed. Cir. 2002), Adams argued that the Federal Circuit had previously concluded that infringement under the doctrine of equivalents could apply to claims requiring a specific numeric range.  The District Court, however, had determined that the term "at least" in claim 34 indicates an absolute lower limit of the range (citing Quantum Corp. v. Rodime, PLC, 65 F.3d 1577 (Fed. Cir. 1995)), and that allowing Adams to show infringement under the doctrine of equivalents would vitiate the 3500 hr*ng/mL limitation.

The panel noted that the limitation "at least 3500 hr*ng/mL" was comparable to the specific numerical ranges in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Abbott Labs. v. Dey, L.P.; and Jeneric/Pentron, Inc. v. Dillon Co., 205 F.3d 1377 (Fed. Cir. 2000), and that these cases indicate that "[t]he recitation of a specific numerical value does not by itself foreclose the application of the doctrine of equivalents."  Determining that "[t]he addition of 'at least' in this case does not change this analysis," and further that "[t]he fact that the claim does not contain words of approximation (i.e., 'about at least 3500 hr*ng/mL') does not affect the analysis," the Court stated that the proper inquiry is whether the accused value is insubstantially different from the claimed value.  The panel concluded that Adams had introduced sufficient evidence from which a reasonable fact-finder could conclude that an AUC value of 3493.38 hr*ng/mL is insubstantially different from a value of 3500 hr*ng/mL, and therefore vacated the District Court's grant of summary judgment of noninfringement of claim 34 under the doctrine of equivalents.

Adams Respiratory Therapeutics, Inc. v. Perrigo Co. (Fed. Cir. 2010)
Panel: Circuit Judges Linn, Moore, and Friedman
Opinion by Circuit Judge Moore

Scantibodies Laboratory, Inc. v. Immutopics, Inc. (Fed. Cir. 2010)

    By Andrew Williams --

Last week, in Scantibodies Laboratory, Inc. v. Immutopics, Inc., the Federal Circuit affirmed a claim construction decision and corresponding summary judgment of non-infringement rendered by the U.S. District Court for the Central District of California.  The patent at issue was U.S. Patent No. 6,689,566 ("the '566 patent"), "Methods, Kits, and Antibodies for Detecting Parathyroid Hormone."  Claim 5, the only claim addressed on appeal, reads (with the claim terms at issue underlined):

5.  A method for measuring an amount of whole parathyroid hormone in a sample comprising:

    a)  adding to a sample a labeled antibody or antibody fragment specific for an initial peptide sequence of whole parathyroid hormone wherein said initial peptide sequence consists of VAL-SER-GLU-ILE-GLN-LEU-MET (SEQ ID NO:3), and wherein at least four amino acids in said initial peptide sequence are part of a reactive portion to said labeled antibody;

    b)  allowing said labeled antibody to bind to whole parathyroid hormone present, thereby forming a complex; and

    c)  measuring the amount of said labeled complex to measure the amount of whole parathyroid hormone in said sample while not detecting an interfering non-(1-84) parathyroid hormone fragment.

The District Court construed these terms to mean:

• "specific for" = having a measurable affinity for and detectable binding to an epitope having at least four amine acids of the seven in SEQ ID No. 3 (VAL-SER-GLU-ILE-GLN-LEU-MET)

• "not detecting an interfering non-(1-84) parathyroid hormone fragment" = having no detectable binding to an interfering non-(1-84) parathyroid hormone fragment

Because Scantibodies conceded that the accused Immutopics antibody did not meet the later limitation, the District Court granted summary judgment of non-infringement.

The application that issued as the '566 patent was filed January 14, 1999.  The application described antibodies, methods of use, and kits for detecting whole or non-fragmented parathyroid hormone ("w-PTH") in a biological sample.  Measuring serum levels of PTH in patients is important for a large number of diseases, including familial hypocalciuric, osteoporosis, and Paget's bone disease.  However, measuring biologically active levels of PTH in humans has been challenging.  One problem is that PTH circulates at extremely low levels.  In addition, these circulating levels of protein are heterogeneous due to the large number of PTH fragments, which leads to interference when attempting to measure the biologically active form ("the (1-84) PTH fragment").  In order to overcome this fragment interference, two-site immunoradiometric assays had previously been developed, which allow for the measurement of intact PTH ("I-PTH").  A measurement of I-PTH, however, includes w-PTH and a large PTH fragment cleaved at amino acids 5 to 8.  In fact, patients with hyperparathyroid or renal failure have significant concentrations of these large, non-whole PTH fragments, which can give inaccurate measurements of the biologically active form.  To overcome this problem, the Scantibodies scientists discovered methods for detecting w-PTH in a biological sample while not detecting this non-(1-84) large PTH fragment component of I-PTH.  They also developed antibodies for use with such methods.  The Scantibodies method used an antibody "specific for" at least four amino acids of seven amino acids disclosed from the N-terminal end of the protein.  Use of such an antibody was important, because it would not react with the interfering non-(1-84) parathyroid hormone fragment.

The originally filed claims in the application that lead to the '566 patent did not contain the limitation "not detecting an interfering non-(1-84) parathyroid hormone," even though the necessity of not detecting this fragment was described in the specification.  During prosecution, however, the examiner cited to several pieces of art in both novelty (§ 102) and obviousness (§ 103) rejections.  The most significant art described the methodology of the measurement of I-PTH.  In order to obtain allowable claims, therefore, the applicant amended the claims to include the "not detecting" limitation, because apparently all of the prior art methods couldn't differentiate w-PTH from this interfering non-(1-84) parathyroid hormone.

Scantibodies filed the present lawsuit on October 26, 2004.  Subsequently, both parties filed reexamination requests, which eventually resulted in a reexamination certificate that altered the antibody and kit claims, but apparently did not change the method of use claims.  This may be the reason that the parties focused on claim 5 during the appeal.  The District Court determined that it needed to construe the claims before it could issue a non-infringement summary judgment order.  And, after two claim construction orders, the Court did just that.  Scantibodies appealed.

The Federal Circuit recognized that the District Court's construction of "not detecting" to mean "no detectable binding" created a difficult, although not insurmountable, hurdle for finding infringement.  Apparently, Scantibodies argued that such a definition would exclude all antibodies, because it was impossible not to have some cross-reactivity.  However, the specification of the '566 patent apparently touted the fact that no cross-reactivity could be achieved.  Moreover, the Federal Circuit pointed out that this construction was based on another limitation that Scantibodies did not challenge ("does not specifically bind to an interfering non-(1-84) parathyroid hormone fragment").  The Court did not give much weight to the testimony of one of the patentees, nor did the Court find it relevant that Scantibodies' product literature defined "no cross-reactivity" as "no significant cross-reactivity."  Scantibodies argued that no PTH assay can absolutely detect PTH without detectable cross-reactivity.  However, the Court pointed out a 2001 reference from Gao et al., which included the inventors as authors, disclosing that an N-terminal PTH antibody that bound to the first few amino acids, and did not have detect the (7-84) PTH fragment at concentrations of 10,000 pg/ml.  The Federal Circuit used this as proof that it was possible to meet the limitations of the claim as construed by the District Court.

Finally, the Federal Circuit noted that the error should be assigned to the patent drafters, because if they had wanted "not detecting" to mean something else, they could have either used different claim language, or provided a different definition in the specification.  This analysis ignores the reality that this claim limitation was required to overcome prior art cited during prosecution.  Moreover, it ignores the fact that the specification highlighted the criticality of not detecting an interfering non-(1-84) parathyroid hormone fragment.  In fact, it is possible that if the claims had issued without the "not detecting" limitation, Scantibodies could have had a written description problem.  Therefore, the Federal Circuit is correct in pointing out that claim drafters need to be careful in choosing the language of claim limitations, but claim drafters also need to mindful of the invention that is actually disclosed in the specification.

Scantibodies Laboratory, Inc. v. Immutopics, Inc. (Fed. Cir. 2010)
Nonprecedential disposition
Panel: Chief Judge Michel and Circuit Judges Plager and Moore
Opinion by Chief Judge Michel

Image of parathyroid hormone (above) by Emw, from the Wikipedia Commons under the Creative Commons license.

Enzo Biochem, Inc. v. Applera Corp. (Fed. Cir. 2010)

    By Donald Zuhn --

On March 26, the Federal Circuit reversed the judgment of the District Court for the District of Connecticut that U.S. Patent Nos. 5,328,824 and 5,449,767 are invalid, affirmed the judgment of the District Court that U.S. Patent No. 5,476,928 is anticipated, and affirmed the judgment of the District Court that 5,082,830 is not infringed.

The '824, '767, '928, and '830 patents, which are owned by Plaintiffs-Appellants Enzo Biochem, Inc., Enzo Life Sciences, Inc., and Yale University ("Enzo"), are directed to various techniques for labeling and detecting nucleic acids.  More particularly, the '824, '767, and '928 patents are directed to a compound, or a method of using that compound as a detection probe.  In this compound (shown below), a nitrogenous base B is covalently attached, either directly or through a "linkage group" (dotted line), to a chemical moiety A.

In the asserted claims, the linkage group is recited functionally (rather than structurally) as "not interfering substantially" with both hybridization and detection (in the '824 and '767 patents) or detection alone (in the '928 patent).  Chemical moiety A is a label that facilitates detection, "compris[ing] at least three carbon atoms and represent[ing] at least one component of a signalling moiety capable of producing a detectable signal" (claim 1 of the '824 and '767 patents) or "represent[ing] at least three carbon atoms and an indicator molecule selected from the group consisting of fluorescent dyes, electron-dense reagents, enzymes which can be reacted with a substrate to produce a visually detectable reaction product, and radioisotopes" (claim 1 of the '928 patent).  The '830 patent is directed to a compound and a method of detection using a compound, wherein the claimed compound is a nucleotide labeled with "at least one non-radioactive moiety directly or indirectly attached to each of the 5′ and 3′ end nucleotides thereof," and the detection method is accomplished using a "preformed detectable molecular complex."

In June 2004, Enzo brought suit against Defendants-Appellees Applera Corp. and Tropix, Inc. ("Applera") for infringement of the '824, '767, '928, and '830 patents (as well as U.S. Patent Nos. 4,711,955 and 4,994,373, which were not at issue in the appeal).  In October 2006, the District Court issued a claim construction ruling, determining that the "not interfering substantially" functional language for the linkage group means that "the linkage group neither substantially interferes with the ability of the compound to hybridize with the nucleic acid nor substantially interferes with the ability of [moiety] A to be detected."  As for moiety A, the District Court determined that for the '824 and '767 patents, "[moiety] A may be a part of or the entire signalling moiety"; for the '928 patent, the plain language of the patent "precludes a construction where A is the entire [indicator] molecule"; and for the '830 patent, the term "non-radioactive moiety" means "a moiety that is utilized in indirect detection, i.e., a moiety that can be detected with a preformed detectable molecular complex."

Enzo conceded that under the District Court's construction, it could not prove infringement of the '830 patent, and the District Court granted summary judgment of noninfringement to Applera.  Applera then moved for summary judgment of lack of written description, lack of enablement, indefiniteness, and anticipation with respect to the three remaining patents.  The District Court granted summary judgment of indefiniteness and anticipation, finding the "not interfering substantially" language in the asserted claims to be indefinite because "[t]he specifications neither set forth how one would gauge substantial interference, nor delimit the threshold at which interference with the procedure prevents [the claimed] method from being implemented," and determining that the asserted claims were anticipated by three references (Kasai et al., 1979; Pingoud et al., 1977; and Bauman, 1980).

Indefiniteness

On appeal, Enzo argued that the District Court incorrectly determined that the "not interfering substantially" language in the '824, '767, and '928 patents is indefinite.  In particular, Enzo argued that the specifications provide specific examples of linkage groups that do not substantially interfere with hybridization and detection and a test for measuring the degree of interference (i.e., comparing the melting temperature of a modified polynucleotide with that of an unmodified polynucleotide).  Applera countered that nothing in the patents explains how to measure "interference" or how to determine whether such interference is "substantial."

In determining that the claims of the '824 and '767 patents are not indefinite, the Federal Circuit noted that "[t]he claims in this case provide at least some guidance as to how much interference will be tolerated."  Pointing to a dependent claim that recites the structure –CH=CH–CH₂–NH–, the panel observed that "[a] person of ordinary skill would presume that a structure recited in a dependent claim will perform a function required of that structure in an independent claim," and "[t]hus, it may be presumed that the term 'not interfering substantially' in the independent claims allows for at least as much interference as that exhibited when the linkage group has the structure specified in the dependent claims."

The panel also looked to examples of suitable linkage groups, as well as criteria for selecting such linkage groups, disclosed in the specification.  For example, the specification discloses that more preferred chemical linkage groups be derived from a primary amine and have the structure –CH2–NH–, and further, that thermal denaturation profiles and hybridization properties of a polynucleotide can be used to measure the degree to which a linkage group interferes with hybridization.  In view of the teachings in the specification, the panel concluded that the specification indicates that "when a linkage group is incorporated into a DNA strand having a length and sequence similar to those used in the specification, a decrease in Tm of up to 5 ^oC implies that the linkage group does not 'substantially interfere' with hybridization, and a decrease of up to 15 ^oC is acceptable if the degree of cooperativity and the extent of hyperchromicity are the same for the modified and unmodified strands."

Finally, the panel noted that during the prosecution of the patents, Enzo overcame an indefiniteness rejection by submitting a declaration under 37 C.F.R. § 1.132 listing eight specific linkage groups, including the –CH=CH–CH2–NH– group listed in the patents' dependent claims.  Thus, the panel concluded that:

Because the intrinsic evidence here provides "a general guideline and examples sufficient to enable a person of ordinary skill in the art to determine [the scope of the claims]," the claims are not indefinite even though the construction of the term "not interfering substantially" defines the term without reference to a precise numerical measurement.  When deciding whether a particular linkage group is or is not "substantially" interfering with hybridization within the meaning of the district court's construction, a person of ordinary skill would likely look to the thermal denaturation profiles and hybridization properties (including Tm) of the modified nucleotide, to see whether they fall within the range of exemplary values disclosed in the intrinsic evidence.

(citations omitted).

The Federal Circuit similarly found the claim language not indefinite with respect to detection  (Wherein the '824 and '767 patents concern the effect of the linkage group on hybridization and detection, the '928 patent only concerns the effect of the linkage group on detection.)  In support of this additional finding, the panel noted that the eight linkage groups listed in the declaration "were said not to 'interfere[] with the ability of biotin in an oligo- or polynucleotide probe of this invention to form a detectable complex with one of avidin, streptavidin or antibodies to biotin or iminobiotin.'"  Thus, the panel concluded that:

So long as moiety A can be detected within the level of detection achieved by the applicants using the exemplary linkage groups disclosed in the intrinsic evidence, a person of ordinary skill would understand that a different linkage group (one that is not disclosed in the intrinsic evidence) likewise does not "substantially interfere" with the detection of moiety A.

Anticipation

The Federal Circuit next addressed the issue of anticipation, finding that Enzo had raised a genuine issue of material fact as to the Kasai et al. and Pingoud et al. references sufficient to survive summary judgment of anticipation of the '824 and '767 patents, but that Enzo had failed to raise a genuine issue of material fact with respect to the Bauman reference and '928 patent.  Looking at the first two references, the panel noted that each "employ[s] a –CH2–NH– linkage group, which arguably belongs to the set of linkage groups disclosed in the patents-in-suit as 'even more preferred' embodiments," adding that "[i]f unopposed, this evidence would entitle Applera to judgment as a matter of law."  At trial, Enzo responded by offering an expert declaration stating that the –CH2–NH– linkage group of Kasai et al. "would not provide sufficient rigidity to prevent significant interference with hybridization of a complementary polynucleotide," and "[i]ndeed, one would predict based on the flexibility of this functional group and the concomitant high degree of motion, there would be significant interference due to free rotation about the single bonds."

On appeal, Applera argued that Enzo's expert declaration could not be credited because it conflicted with Enzo's Rule 132 declaration, and further, because Enzo's expert offered no support for his assertion that Kasai et al. would substantially interfere.  The Federal Circuit, however, determined that:

Viewing the [expert] declaration in a light most favorable to Enzo requires that [the expert's] explanation be read as limited to the specific one-carbon aminomethyl group [i.e., –CH2–NH–] disclosed in Kasai and not as a sweeping condemnation of single bonds or an unyielding requirement of double bonds.  . . .  [The expert's] statement that the aminomethyl group disclosed in Kasai would substantially interfere and [the Rule 132 declaration's] statement that a six-carbon diamine group would not are not inconsistent, particularly when viewed in a light most favorable to Enzo, as it must be.

The panel also noted that while Enzo's expert focused on the impact of the nature of the bonds in the linkage group (i.e., single or double) on hybridization and detection, the specification also recognizes that the length of linkage group impacts hybridization and detection.

Lastly, the panel addressed Applera's argument that the –CH2–NH– linkage group, which is described in Kasai et al., was also within Enzo's "even most preferred" embodiments.  In response, the Court determined that Enzo's counterargument that "the 'even more preferred' language is properly read as describing a subset of the preferred embodiments -- i.e., those with carbon-carbon double bonds at the α-positition -- such that the most preferred embodiments have both a carbon-carbon double bond at the α-position, and are derived from a primary amine and include a –CH2–NH– group," was reasonable and should have been credited on summary judgment.

Turning to Pingoud et al., the Court noted that "[o]n its face, Pingoud notes that there was substantial interference with hybridization."  In particular, the panel pointed to a statement in the reference that "[c]odon-anticodon interaction . . . is severely affected by the [fluorescent labeling] modification," stating that "'[c]odon-anticodon interaction' is indicative of hybridization, and 'severely affected' suggests substantial interference."  The panel therefore concluded that there was a genuine issue of material fact as to whether the linkage group disclosed in Pingoud et al. substantially interferes with hybridization.  The Court also rejected Applera's argument that the –CH2–NH– linkage group, which is similarly described in Pingoud et al., was within Enzo's "even most preferred" embodiment.

Turning to the final reference, the panel noted that in Bauman, hybridization is performed before moiety A is attached to base B via the linkage group.  Enzo argued that in view of this chronology, Bauman did not anticipate the '928 patent.  However, the Court determined that "[i]t is irrelevant, for purposes of anticipation, what method is used, much less what order of steps is used, to attach both moiety A and the linkage group to base B."  The Court also noted that because the '928 patent is silent as to hybridization, "[a]ll that is required of this particular linkage group is that it not substantially interfere with the ability of A to be detected."

Infringement

Addressing the last issue on appeal (i.e., infringement of the '830 patent), the Federal Circuit first reviewed the District Court's construction of the term "non-radioactive moiety," which the lower court had found to mean "a moiety that is utilized in indirect detection, i.e., a moiety that can be detected with a preformed detectable molecular complex."  The Federal Circuit found the District Court's construction to be reasonable, and affirmed the lower court's judgment of noninfringement with respect to the '830 patent.  In response to Enzo's argument that the District Court's construction violated the doctrine of claim differentiation because dependent claim 14 adds "a preformed detectable molecular complex" to claim 1, the panel stated that:

[T]he district court's construction imposes no requirement that a preformed detectable molecular complex is actually present in claim 1; rather, it simply requires the "non-radioactive moiety" to be capable of performing a function:  "can be detected with a preformed detectable molecular complex."  Claim Construction, 2006 WL 2927500, at *11 (emphasis added).  Claim 1, unlike claim 14, is infringed even in the absence of a preformed detectable molecular complex.

Enzo Biochem, Inc. v. Applera Corp. (Fed. Cir. 2010)
Panel: Chief Judge Michel and Circuit Judges Plager and Linn
Opinion by Circuit Judge Linn

Amgen Inc. v. F. Hoffman-La Roche Ltd. (Fed. Cir. 2009)

Something for Everyone, but the Injunction Stands

    By Kevin E. Noonan --

Amgen has several times successfully defended its erythropoietin (EPO) franchise, the company's first commercial success and in many ways the crown jewel of its (or anyone's) biologics drug pipeline.  That string of successes continued today with a decision by the Federal Circuit against its latest challenger, Hoffman-La Roche.  But the decision also put several of the patents protecting Amgen's EPO at risk, making this a mixed victory at best for the biotechnology company.

The case involved the most recent challenge, Roche's Mircera® product, a pegylated derivative of human EPO.  Amgen sued Roche in a declaratory judgment action in Massachusetts asserting six patents:  U.S. Patent Nos. 5,547,933 (the '933 patent), 5,441,868 (the '868 patent), and 5,618,698 (the '698 patent), U.S. Patent Nos. 5,955,422 (the '422 patent, claim 1) and 5,756,349 (the '349 patent, claim 7) and U.S. Patent No. 5,621,080 (the '080 patent).  On October 23, 2007, a jury found that Mircera® infringed the '933 patent, the '868 patent and the '698 patent, and that these patents as well as the '422 patent and the '349 patent were not invalid.  (The jury reached neither infringement nor validity of the '080 patent).  Specifically, the jury found that Roche's Mircera® infringed claims 3, 7, and 8 of the '933 patent (claim 12 was found not to be literally infringed but infringed under the Doctrine of Equivalents); claims 1 and 2 of the '868 patent; and claims 6 through 9 of the '698 patent.  On October 1, 2008, Massachusetts District Court Judge William Young ruled (in Amgen's favor for each) on several post-trial motions, including:  1) affirming the jury's infringement decision by denying Roche's motion for judgment as a matter of law (JMOL); 2) reaffirming its pretrial decision to grant summary judgment regarding infringement of claim 1 of the '422 patent; 3) "explaining" its reasoning for ruling, also pretrial, that the claims of Amgen's patents-in-suit are not invalid for obviousness-type double patenting (despite the intervening Federal Circuit decision in Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc.); 4) denying Roche's motion for JMOL that claim 1 of the '422 patent and claims 3, 7, and 9 of the '933 patent are not invalid for indefiniteness for reciting the term "human erythropoietin"; and 5) granting Amgen a permanent injunction barring "Roche, its agents, servants, employees, counsel, and all persons and entities acting in concert therewith" from infringing the claims of the patents-in-suit for the remaining life of those patents.

The Federal Circuit's decision, written by Judge Schall and joined by Judges Mayer and Clevenger, affirmed most of the determinations by the District Court and the jury.  These will be discussed more extensively in future posts, but can be summarized simply here:  the panel vacated Judge Young's decision on whether the '933 (claims 3, 7, and 8), '349 (claim 7) and '422 (claim 1) patents are not invalid under obviousness-type double patenting and remanded this issue to the trial court; vacated the judgment that claim 7 of the '349 patent was not infringed and remanded for a new trial on that issue; affirmed the judgments that the asserted claims of the '868 patent (claims 1 and 2) and the '698 patent (claims 6-9) are not invalid and were infringed, and that claims 3, 7, and 8 of the '933 patent and claim 1 of the '422 patent were infringed; and finally that claims 9, 11, 12, and 14 of the '933 patent are not infringed by Mircera®.

Because of the number claims asserted and the status of these various claims under the CAFC's opinion, a scorecard seems in order:

The following claims of the '933 patent are infringed but may be invalidated by the trial court for obviousness-type double patenting:

3.  A non-naturally occurring glycoprotein product of the expression in a mammalian host cell of an exogenous DNA sequence comprising a DNA sequence encoding human erythropoietin said product possessing the in vivo biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells.

7.  The glycoprotein product according to claim 3 . . . wherein the host cell is a non-human mammalian cell.

8.  The glycoprotein product according to claim 7 wherein the non-human mammalian cell is a CHO cell.

The following claim is infringed by Mircera® under the doctrine of equivalents, but its status with regard to the obviousness-type double patenting question is uncertain (it does not fall within the CAFC's remand):

12.  A pharmaceutical composition comprising an effective amount of a glycoprotein product effective for erythropoietin therapy according to claim 7 and a pharmaceutically acceptable diluent, adjuvant or carrier.  [Infringed under the doctrine of equivalents.]

The following claims of the '868 patent are both not invalid and are infringed:

1.  A process for the production of a glycosylated erythropoietin polypeptide having the in vivo biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells comprising the steps of:
    (a)  growing, under suitable nutrient conditions, mammalian host cells transformed or transfected with an isolated DNA sequence encoding human erythropoietin; and
    (b)  isolating said glycosylated erythropoietin polypeptide therefrom.

2.  The process according to claim 1 wherein said host cells are CHO cells.

The following claims of the '698 patent are not invalid and are infringed:

6.  A process for the production of a glycosylated erythropoietin polypeptide having the in vivo biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells comprising the steps of:
    a) growing, under suitable nutrient conditions, vertebrate cells comprising amplified DNA encoding the mature erythropoietin amino acid sequence of FIG. 6; and
    b) isolating said glycosylated erythropoietin polypeptide expressed by said cells.

7.  The process of claim 6 wherein said vertebrate cells further comprise amplified marker gene DNA.

8.  The process of claim 7 wherein said amplified marker gene DNA is Dihydrofolate reductase (DHFR) gene DNA.

9.  The process according to claims 2, 4 and 6 wherein said cells are mammalian cells.

Claim 1 of the '422 patent is infringed but may be invalidated for obviousness-type double patenting:

1.  A pharmaceutical composition comprising a therapeutically effective amount of human erythropoietin and a pharmaceutically acceptable diluent, adjuvant or carrier, wherein said erythropoietin is purified from mammalian cells grown in culture.

Finally, infringement of claim 7 of the '349 patent will be decided in a new trial, but may be invalid under obviousness-type double patenting:

7.  A process for producing erythropoietin comprising the step of culturing, under suitable nutrient conditions, vertebrate cells according to claim 1, 2, 3, 4, 5 or 6.

Wherein claims 1 through 6 of the '349 patent related to vertebrate cells encoding recombinant EPO:

1.  Vertebrate cells which can be propagated in vitro and which are capable upon growth in culture of producing erythropoietin in the medium of their growth in excess of 100 U of erythropoietin per 10⁶ cells in 48 hours as determined by radioimmunoassay, said cells comprising non-human DNA sequences which control transcription of DNA encoding human erythropoietin.

The significance of the Federal Circuit's decision, and the consequences of an adverse decision on remand for the '933, '349 and '422 patents are illustrated by the respective expiration dates of the five patents at issue in the litigation:

*term shortened by terminal disclaimer

Thus, invalidation of the '933, '349 and '422 patents would reduce Amgen's patent protection on its various EPO products (including Aranesp® and Epogen®) from May 2015 to August 2012 (more than 3 years), which would have a significant (negative) effect on the corporate bottom line.  Accordingly, Amgen can be expected to continue this litigation.

The CAFC's opinion did not disturb the permanent injunction imposed by Judge Young, preventing Roche from marketing Mircera® in the U.S. despite obtaining FDA approval in November, 2007, giving Roche more than sufficient incentive to continue as well.

The substance of the Federal Circuit's opinion, including its reasoning on the standards for obviousness type double patenting, will be the subject of later posts.     

Amgen Inc. v. F. Hoffman-La Roche Ltd. (Fed. Cir. 2009)
Panel: Circuit Judges Mayer, Clevenger, and Schall
Opinion by Circuit Judge Schall

Amgen, Inc. v. Ariad Pharmaceuticals, Inc. (Fed. Cir. 2009)

    By Andrew Williams --

On Monday, the Federal Circuit issued its decision in Amgen, Inc. v. Ariad Pharmaceuticals, Inc.,  dealing another blow to Ariad Pharmaceuticals and U.S. Patent No. 6,410,516, directed to certain aspects of the NF-κB transcription factor pathway.  Previously, on April 3, the Federal Circuit held that four of the claims of the '516 patent were invalid because of a failure to satisfy the written description requirement.  At that time, Patent Docs provided a detailed report of that case.  In the present case, the Court affirmed a Delaware District Court's grant of Amgen's motion for summary judgment of non-infringement related to Amgen's Enbrel® (etanercept, a TNF blocker) product.

The technology of the '516 patent relates to gene regulation, and specifically the transcription factor NF-κB.  The technology was described in detail in the Ariad v. Lilly opinion, as well as our post regarding that case.  Briefly, NF-κB exists in an inactive state in the cytoplasm of a cell when it is bound to its natural inhibitor, IκB.  NF-κB is activated when various stimuli external to the cell cause the NF-κB-IκB complex to dissociate, resulting in the transcription factor traveling into the nucleus and binding NF-κB recognition sites found in various promoters.  This binding results in the production of many different proteins.  When the external stimulus is eventually removed, the cell returns to a state in which NF-κB is inactive.  This natural cycle of NF-κB control can become disrupted, resulting in the continual production of protein, often to the detriment of the cell, and can result in various diseases and conditions, ranging from sepsis, cancer, and AIDS.

The '516 patent issued with 203 claims -- 197 of which contain the single step of either "reducing" or "altering" NF-κB activity in cells.  In fact, all of the claims at issue in the present case contain the limitation "reducing NF-κB activity in [the] cells."  For example, claim 6 reads:

6.  A method for diminishing induced NF-κB-mediated intracellular signaling comprising reducing NF-κB activity in cells such that NF-κB-mediated intracellular signaling is diminished.

As another example, claim 18 reads:

18.  A method for reducing Interleukin-1 or Tumor Necrosis Factor-α activity in mammalian cells comprising reducing NF-κB activity in the cells so as to reduce intracellular signaling caused by Interleukin-1 or Tumor Necrosis Factor-α in the cells.

The District Court construed this phrase to mean "taking action inside cells to directly inhibit (interfere or block) an NF-κB activity."  However, Amgen's Enbrel works outside the cells by binding to free TNF-α, thereby interfering with TNF-α's ability to reach the receptors on the cell surface, resulting in an interference of inducing NF-κB activity.  Therefore, because Enbrel works outside the cell, it could not infringe these claims, and the District Court granted Amgen's summary judgment motion of non-infringement.

Ariad argued that the District Court's claim construction was wrong, and that under the proper construction, Enbrel infringes.  Judge Moore authored the opinion for the Court, reviewing support for the construction of this claim term in the language of the claims, the context of the entire patent, including the specification, and the prosecution history of the patent.  The Court first noted that the ordinary meaning of "reducing NF-κB activity in cells" was unclear.  In fact, a simple conclusion that the term means that NF-κB activity must occur in cells would be redundant, because NF-κB activity already only occurs in cells.  Ariad took the position that the method must be performed on cells in which NF-κB is present, regardless of where the reducing agent is situated.  The Court then reviewed the specification and found that the '516 patent differentiates external influences (such as TNF-α) from intercellular transducers (such as NF-κB), and that the dividing line between these two is the cell membrane.  The specification provides hypothetical agents for carrying out this step, including inhibitors, decoy molecules, and dominantly interfering molecules.  However, all of these examples act within the cell to reduce NF-κB activity.  The specification does not provide any example of agents that could work outside the cell to block external influences from reaching the cell.  And, this is exactly what Enbrel does, blocking TNF-α from reaching the cells and interacting with receptors found in the cell membrane.

Most damaging for Ariad was a position that they took in the prosecution history, not of the original patent, but one taken during the currently pending reexamination of the '516 patent.  One of the class of prior art molecules asserted as inherently anticipating the '516 claims was antibiotics.  Antibiotics work outside the cell by killing bacteria, which subsequently reduces the amount of TNF-α released by cells in response to the bacterial infection with a concomitant reduction in NF-κB activity.  As a result, Ariad was in the tenuous position of placing a boundary for where the reducing activity could occur somewhere outside of the cell, to cover Enbrel, but not anywhere outside a cell, in order to leave antibiotics outside of the scope of the claims.  The Federal Circuit picked up on a distinction Ariad made in the reexam between two types of claims found in the patent:  (a) methods that reduce the induced NF-κB activity by intervening intracellularly at a specific segment within the signaling pathway, and (b) methods that prevent the external inducing stimuli from inducing the intercellular signaling pathway in the first place.  Clearly, decoy molecules and dominantly interfering molecules belong to category (a), while antibiotics belong to category (b).  Tellingly, however, Ariad lacked any basis in the specification to distinguish Enbrel from antibiotics in this scheme.  And, because the patent creates a category of agents that impact "external influences," both Enbrel and antibiotics must be found in this category.  Therefore, because the specification and prosecution history, albeit of the reexamination of the '516 patent, "unequivocally point" to a construction whereby the reduction of NF-κB activity occurs within the cells, the Court concluded that the District Court's claim construction was correct.  And, as a result, the Federal Circuit affirmed that Enbrel does not infringe the claims at issue.

Finally, in light of the Ariad v. Lilly decision, Amgen moved the Court for affirmance on the alternative ground of collateral estoppel.  The Court, however, declined to reach this issue.

Amgen, Inc. v. Ariad Pharmaceuticals, Inc. (Fed. Cir. 2009)
Nonprecedential disposition
Panel: Chief Judge Michel and Circuit Judges Dyk and Moore
Opinion by Circuit Judge Moore

Carnegie Mellon University v. Hoffman-La Roche Inc. (Fed. Cir. 2008)

    By Donald Zuhn --

On Monday, the Federal Circuit affirmed a finding on summary judgment by the District Court for the Northern District of California that the asserted claims of U.S. Patent Nos. 4,767,708 and 5,126,270 and certain asserted claims of U.S. Patent No. 6,017,745 are invalid, and that the remainder of the asserted claims of the '745 patent are not infringed by Defendants-Appellees Hoffmann-La Roche, Inc., Roche Molecular Systems, Inc., Roche Diagnostic Systems, Inc., Roche Biomedical Laboratories, Inc., The Perkin Elmer Corporation, Laboratory Corporation of America Holdings, Roche Diagnostic Corp., Laboratory Corporation of America, and Applera Corp. (Roche).  In affirming the District Court's determination of invalidity and noninfringement, the Federal Circuit concluded that the lower court did err in holding the claims invalid for failure to meet the written description requirement or in performing its infringement analysis.

The patents in suit are related to, inter alia, recombinant plasmids for the enhanced expression of DNA polymerase I (which is encoded by the polA gene), bacterial strains containing such plasmids, and methods for conditionally controlling the expression of DNA polymerase I using such bacterial strains.  The claimed plasmids, bacterial strains, and methods seek to overcome a problem that existed in the prior art -- namely that bacterial host cells transformed with a plasmid containing the entire polA gene overexpress DNA polymerase I, which is lethal in bacterial host cell.  In the claimed plasmids, bacterial strains, and methods, this problem is overcome by removing most or all of the polA promoter such that the cloned polA gene "contains essentially none of or at the most only a portion of the activity of its natural promoter."

In August of 1994, Plaintiffs-Appellants Carnegie Mellon University and Three Rivers Biologicals, Inc. (Carnegie Mellon) brought suit against Roche for patent infringement, asserting that Roche's recombinant plasmid pLSG5, which can be used to express Thermus aquaticus (Taq) DNA polymerase, infringes the '708 and '270 patents.  In response, Roche filed separate motions for summary judgment of invalidity for lack of written description and noninfringement.  The District Court granted Roche's motion for summary judgment of noninfringement of the '708 patent and Roche's motions for summary judgment of invalidity of the '708 and '270 patents.  With respect to Roche's motion for summary judgment of invalidity of the '708 patent, the District Court concluded that the '708 patent lacked an adequate written description under Regents of University of California v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997), since the claims encompass a cloned polA gene from any bacterial source, but the specification only describes plasmids containing the polA gene from Escherichia coli.

In January of 2001, Carnegie Mellon filed a second patent infringement suit against Roche, this time alleging infringement of the '745 patent.  Roche again moved for summary judgment of invalidity for lack of written description, and the District Court again granted Roche's motion.  Roche also moved for summary judgment of noninfringement under the doctrine of equivalents, and the District Court granted this motion as well.

On appeal, Carnegie Mellon argued that the District Court had erred in granting Roche's motions for summary judgment of invalidity of the '708, '270, and '745 patents.  Carnegie Mellon also argued that the District Court had erred in granting Roche's motions for summary judgment of noninfringement of the '708 and '745 patents.

With respect to the issue of invalidity of the '708 and '745 patents, the Federal Circuit noted that "[t]he appealed claims of the '708 patent are directed to recombinant plasmids that contain a DNA coding sequence that is broadly defined, and only by its function, viz., encoding DNA polymerase I," and further, that "the generic claims are not limited to a single bacterial species, but broadly encompass coding sequences originating from any bacterial species."  The Court similarly noted that "the appealed claims of the '745 patent are broadly directed to recombinant plasmids that contain a DNA coding sequence, again, only defined by function, viz., encoding an enzyme with either DNA polymerase or nick-translation activity," and that "[t]hose claims are also not limited to a single bacterial species, but cover all bacterial species."

In addition, the Federal Circuit observed that at the time of invention, out of thousands of bacterial species, only three bacterial polA genes had been cloned, and only one of these genes had been described in the patents at issue.  Moreover, despite the description in the patents that "an important feature of this invention [is] that the cloned polA gene fragment contains essentially none of or at the most only a portion of the activity of its natural promoter," the patents "fail to disclose the nucleotide sequence or other descriptive features for a polA gene (including the promoter sequence) from any bacterial source other than E. coli."  As a result, the Federal Circuit concluded that no genuine issues of material fact existed as to whether the written descriptions of the '708 and '745 patents adequately support the appealed claims, and therefore, the Court affirmed the District Court's grant of summary judgment of invalidity.

With respect to the issue of invalidity of the '270 patent, the Federal Circuit determined that the District Court had erroneously found the asserted claims of this patent invalid under Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1998).  In particular, the District Court had found the asserted claims invalid for failure to recite the problem that the invention was intended to solve (i.e., lethality).  Citing Cooper Cameron Corp. v. Kvaerner Oilfield Products, Inc., 291 F.3d 1317 (Fed. Cir. 2002), the CAFC noted that it had "not announce[d] a new 'essential element' test mandating an inquiry into what an inventor considers to be essential to his invention and requiring that the claims incorporate those elements" in Gentry Gallery.  However, the Federal Circuit determined that the asserted claims of the '270 patent were nonetheless invalid under Eli Lilly for the same reasons that the '708 and '745 patents were invalid.

Finally, with respect to the issue of noninfringement, the Federal Circuit noted that its affirmance of invalidity of the '708 patent rendered the issue of noninfringement of this patent moot.  However, because the validity of the claims of the '745 patent that were found to be noninfringed had not been challenged, the CAFC was forced to take this issue up.  On appeal, Carnegie Mellon argued that Roche's pLSG5 plasmid infringed the '745 patent under the doctrine of equivalents because the substitution of Taq polymerase for E. coli polymerase was an insubstantial and unimportant change that resulted in an infringing equivalent.  In affirming the District Court's grant of summary judgment of noninfringement, the Federal Circuit determined that to find otherwise would be to vitiate the limitation of the asserted claims which required that the bacterial source of the DNA polymerase be E. coli.  In particular, the CAFC stated that "in drafting the claims, the patentees specifically chose to limit claim 4 to a recombinant plasmid where the bacterial source is E. coli," and that Carnegie Mellon "cannot now argue that any bacterial source, including Taq, would infringe that claim."

(In an interesting footnote to the opinion, the CAFC noted that "Taq DNA polymerase was and continues to be integral to the success of [the] polymerase chain reaction ("PCR"), a widely used technique in molecular biology," and that Taq polymerase garnered the title of "Molecule of the Year" from Science in 1993.  The Court also noted that "[w]hile we reach our decision irrespective of those facts, we readily can see why appellants have attempted to broaden the scope of their claims beyond the E. coli species disclosed.")

Carnegie Mellon University v. Hoffman-La Roche Inc. (Fed. Cir. 2008)
Panel: Circuit Judges Lourie, Bryson, and Prost
Opinion by Circuit Judge Lourie

In re Omeprazole Patent Litigation (Fed. Cir. 2008)

    By Kevin E. Noonan --

The Federal Circuit today affirmed AstraZeneca's latest victory in its long-running battle against generic drug companies who filed ANDAs for its (former) blockbuster drug, Prilosec®.  The Court affirmed in toto the decisions of Judge Barbara S. Jones, the District Court judge sitting in the Southern District of New York who has handled the consolidated infringement actions brought by AstraZeneca under 35 U.S.C. § 271(e)(2)(A).  The two sets of defendants, Apotex Corp., Apotex, Inc., and Torpharm Inc. on the one hand and Impax Laboratories on the other, were found to infringe the patents in suit, and neither defendant had established that these patents were invalid by clear and convincing evidence.

The Federal Circuit characterized the decision appealed from in this case as the "second wave" of the consolidated, multidistrict litigation involving these patents and various generic company ANDA filers who filed Paragraph IV certifications that AstraZeneca's patents were invalid.  The Court had heard and affirmed the first wave decisions in In re Omeprazole Patent Litigation, 86 Fed. App'x. 76 (Fed. Cir. 2003) and In re Omeprazole Patent Litigation, 483 F.3d 1364 (Fed. Cir. 2007).  In this case, the Court addressed separately and rejected the contentions of each of the two parties defendant, in a unanimous decision by Judge Bryson, Judges Lourie and Gajarsa concurring.

There were two patents in suit, U.S. Patent Nos. 4,786,505 and 4,853,230.  Claim 1 of the '505 patent reads as follows:

An oral pharmaceutical preparation comprising:
    (a) a core region comprising an effective amount of a material selected from the group consisting of omeprazole plus an alkaline reacting compound, an alkaline omeprazole salt plus an alkaline reacting compound and an alkaline omeprazole salt alone;
    (b) an inert subcoating which is soluble or rapidly disintegrating in water disposed on said core region, said subcoating comprising one or more layers of materials selected from among tablet excipients and polymeric film-forming compounds; and
    (c) an outer layer disposed on said subcoating comprising an enteric coating.

And claim 1 of the '230 patent reads as follows:

A pharmaceutical preparation comprising:
    (a) an alkaline reacting core comprising an acid-labile pharmaceutically active substance and an alkaline reacting compound different from said active substance, an alkaline salt of an acid labile pharmaceutically active substance, or an alkaline salt of an acid labile pharmaceutically active substance and an alkaline reacting compound different from said active substance;
    (b) an inert subcoating which rapidly dissolves or disintegrates in water disposed on said core region, said subcoating comprising one or more layers comprising materials selected from the group consisting of tablet excipients, film-forming compounds and alkaline compounds; and
    (c) an enteric coating layer surrounding said subcoating layer, wherein the subcoating layer isolates the alkaline reacting core from the enteric coating layer such that the stability of the preparation is enhanced.

Impax challenged the District Court's decisions on both procedural and substantive grounds.  Procedurally, Impax asserted error in each of the District Court decisions regarding jurisdiction over the action after AstraZeneca's patents-in-suit had expired and denying its demand for a jury trial.  (The District Court dealt with the latter ground summarily, stating that it had once before rejected Impax's contentions with regard to its petition for a writ of mandamus, and upholding its prior determination as "the law of the case.")  On the jurisdictional question, the patents-in suit expired between the end of the bench trial and when the District Court entered judgment, and according to Impax, patent expiry eliminated any "case or controversy" between the parties.  The District Court also extended the time that the FDA was prohibited from allowing Impax's ANDA for six months from the date of patent expiry, as a consequence of the Agency's granting AstraZeneca a six-month period of pediatric exclusivity.  (Pursuant to 21 U.S.C. § 355(a), the FDA has the authority to request that an NDA holder perform pediatric studies on the effect of an approved drug.  If the NDA holder performs such studies, the Agency can extend the term of a patent-holder's exclusivity for an additional six months after Orange Book listed patents have expired.  In this case, that date was October 20, 2007.)

The Federal Circuit affirmed the District Court's interpretation of the statute, saying that the relevant provisions clearly give the District Court the authority to extend a patentee's period of exclusivity for the six-month additional period provided as a reward for performing pediatric testing at the FDA's behest.  The CAFC pointed to the express words of the statute, that "the period during which an ANDA may not be approved under section 355(j)(5)(B) 'shall be extended by a period of six months [i.e., the period of pediatric or market exclusivity] after the date the patent expires (including any patent extensions).'"  The Federal Circuit also rejected Impax's underlying basis for its argument, that patent expiry removed the District Court's jurisdictional basis under Article III's "case or controversy" requirement.  Stating the principle that what is required for a case to be justiciable is "a real and substantial controversy," the CAFC refused to permit patent expiry to be a ground for destroying jurisdiction when there clearly remained a "real and substantial controversy" between the parties (since Impax conceded that, even as they construed the situation, the District Court would have retained its authority if it had rendered its decision before the patents expired).  The Federal Circuit also rejected Impax's reliance on Kearns v. Chrysler Corp. and Roche Palo Alto v. Apotex, saying that the Kearns case concerned injunctive relief under 35 U.S.C. § 283 not § 271(e)(4)(A), and that in Roche, the dispute was on "the particular terms of the district court's order" (i.e., how the court worded its order), not a challenge on whether relief was available under the statute.

Impax's appeal of the District Court's decision that its ANDA product infringed the patents-in-suit was based on whether AstraZeneca had introduced sufficient and relevant evidence that each of the claim elements could be identified in its product.  First, Impax attacked the District Court's finding that the Impax formulation contains an "effective amount" of omeprazole and an alkaline reactive compound (ARC).  Second, Impax argued that there was insufficient evidence that its formulation contained an inert subcoating.  Since this appeal was from the District Court's decision after a bench trial, Impax had the burden of showing clear error in the District Court's decisions, a burden the Federal Circuit held it did not carry on either ground of appeal.  The CAFC had construed the meaning of the term "effective amount" in the so-called "first wave" phase of the litigation, to require the limitation applied to both the amount of omeprazole and the amount of the ARC.  Further, the CAFC had construed the meaning of the term "alkaline reacting compound" to mean "(1) a pharmaceutically acceptable alkaline, or basic, substance having a pH greater than 7 that (2) stabilizes the omeprazole or other acid-labile compound by (3) reacting to create a micro-pH of not less than 7 around the particle of omeprazole or other acid-labile compound."  Impax contended that this construction required AstraZeneca to introduce evidence of comparative stability testing to show that Impax's formulation fell within the scope of the claim.

The Federal Circuit rejected this contention, saying that the evidence AstraZeneca did introduce established that the ARC created the recited "'micro-pH' in the drug core," which the CAFC said was "the same evidentiary burden that the district court placed on Astra" in the first wave of the litigation.  Accordingly, the CAFC found no clear error in the District Court's determination that AstraZeneca had established infringement by a preponderance of the evidence.  Similarly, the CAFC rejected Impax's contention that, absent affirmative evidence that its formulation showed "enhanced stability," the District Court had "read [the limitation] out of the claims entirely" of the '230 patent.  All that was required, according to the Federal Circuit, was that AstraZeneca establish "the presence of an inert subcoating and a drug core having a micro-pH of not less than 7," and the CAFC found no clear error in the District Court's reliance on AstraZeneca's evidence in this regard.  Finally, the CAFC rejected Impax's contention that its decision in Warner-Lambert Co. v. Teva Pharmaceuticals USA, Inc. mandated a different result, since in that case the Federal Circuit reversed a summary judgment determination (where its review of the District Court's decision was de novo), while here it was reviewing a final judgment (requiring evidence of clear error).

The Federal Circuit also rejected Impax's second contention, that its formulation did not satisfy the "inert subcoating" limitation of the patents-in-suit, and that the District Court was in error for crediting AstraZeneca's expert testimony that the subcoating was formed "in situ," i.e., as a consequence of reaction between the components of the formulation rather than being introduced as a discrete step during formulation.  The Federal Circuit found no clear error in the District Court's determination that AstraZeneca's expert testimony and evidence was more credible than Impax's contrary interpretation of that expert testimony.

Finally, although disagreeing with the District Court's determination that AstraZeneca's Phase III clinical trials were an "experimental use" rather than a "public use," the Federal Circuit nonetheless upheld the District Court's decision that the patents-in-suit were not invalid based on public use prior to one year before their earliest priority date(s) under 35 U.S.C. § 102(b).  The basis for the CAFC's decision was evidence that AstraZeneca's invention was not "ready for patenting," as required by the Supreme Court's decision in Pfaff v. Wells Electronics, Inc.  The inventors testified that, although they had produced certain embodiments of the claimed invention prior to the Phase III clinical trials (and prior to the critical date), they did not (indeed, could not) know whether these embodiments would work for their intended purpose until receiving the results of the clinical trials.  Thus, according to the District Court, the claimed invention had not been reduced to practice until the clinical trials were over and thus were not "ready for patenting" during the clinical trials.  The Federal Circuit affirmed this determination, based on evidence of the uncertainty during development of the formulations and that the clinical trials were required to establish that the claimed invention had been reduced to practice.

Apotex also appealed the District Court's determination that its ANDA formulations infringed, as well as the District Court's rejection of its anticipation and obviousness challenges to the validity of the patents-in-suit.  Since the Federal Circuit characterized the infringement appeal as a dispute between the evidence presented by each side's experts, it found no clear error in the District Court's decision to credit AstraZeneca's expert testimony over the contrary expert testimony of the Apotex experts.  The CAFC also affirmed the District Court's determination that the patents-in-suit were not anticipated by two U.S. and one European prior art patent; here, the challenge was on claim construction, specifically the meaning of the term "alkaline salt" and "acid labile."  The CAFC rejected Apotex's contention that an "alkaline salt" was limited to salts comprising an element from Groups I and II of the periodic table, finding that it was contrary to the specification of the '230 patent and claim 8, which included within the scope of the term ammonium salts (which do not contain any Group I or Group II elements).  Regarding the term "acid labile," the Court interpreted the cited prior art to disclose acid-stable compounds that did not anticipate the claims at issue.

Apotex also asserted a large number of references to support its contention that the claims of the patents-in-suit were obvious.  The basis for the District Court's rejection of Apotex's obviousness claim is that the prior art did not recognize the need for a subcoating between the omeprazole/ARC-containing core and the enteric coating.  Even if the skilled worker in the art had recognized the need (i.e., that there would be a "negative interaction" between the core and the enteric coating), the District Court provided "multiple paths" that the worker of ordinary skill could consider in addressing the problem.  In this regard, Apotex raised the Supreme Court's discussion of the "obvious to try" standard set forth in the KSR Int'l. Co. v. Teleflex, Inc. decision.  The Federal Circuit distinguished on the grounds that the District Court "found that a person of skill in the art would not have seen a reason to insert a subcoating in the prior art formulation."  The District Court's finding of non-obviousness, affirmed by the Federal Circuit, "was based on Apotex's failure to demonstrate that a person of skill in the art would conclude that a negative interaction would take place between the enteric coating and the drug core," i.e., that the skilled worker would not have recognized that there was a problem to be solved in the first place, thus removing a necessary predicate to employing the "obvious to try" analysis.

This decision represents the latest (and perhaps the final) victory for AstraZeneca over its Prilosec® franchise.  These victories have about them, however, something of a Pyrrhic quality in view of events that have occurred since these suits were initiated almost ten years ago.  The most important of these is that AstraZeneca has transferred its focus from Prilosec® to Nexium®, the purified S-enantiomer of omeprazole.  Second, one ANDA filer, Kremers Urban Development Co., was found not to infringe AstraZeneca's patents and launched a generic omeprazole product almost five years ago; this launch was followed by others, and indeed AstraZeneca partnered with Proctor & Gamble to put an over-the-counter form of omeprazole on the market.  In this case, once Impax launched "at risk" prior to patent expiry, AstraZeneca amended its complaint to request damages, but before trial it stipulated for the District Court to dismiss its damages claims with prejudice in order for the Court to join Impax in the consolidated bench trial.  Accordingly, it appears that AstraZeneca actually gained very little, in market share, damages, or exclusivity, as a result of its participation in this protracted litigation.  This result provides a cautionary tale and to some degree refutes those who mischaracterize patent litigation as a "jackpot" or an impediment to innovation.  AstraZeneca protected its Prilosec® franchise at great cost, but it is reasonable to ask, to what end and for what benefit?  It doesn't appear to be an easy question to answer.

In re Omeprazole Patent Litigation (Fed. Cir. 2008)
Panel: Circuit Judges Lourie, Bryson, and Gajarsa
Opinion by Circuit Judge Bryson

Adequate Method Claiming Requirements: Muniauction, Inc. v. Thomson Corp.

     By Kevin E. Noonan --

The Federal Circuit clarified its position on method claim infringement to the detriment of the plaintiff in Muniauction, Inc. v. Thomson Corp., vacating an $84.6 million dollar judgment (in a contingency fee case, no less).  In a jury trial, Defendants Thomson Corp. and I-Deal LLC were found to infringe U.S. Patent No. 6,161,099, and that the asserted claims (claims 1, 2, 9, 14, 18, 20, 24, 31, 32, 36, 40, 42, 46, and 56) were not invalid.  (The District Court reviewed the non-obviousness determination upon Thomson's JMOL motion, filed after the Supreme Court's decision in KSR Int'l Co. v. Teleflex Inc., but denied the motion.)  The District Court found infringement to be willful and granted a permanent injunction.  The Federal Circuit reversed (in a unanimous opinion by Judges Gajarsa, Plager, and Proust, Judge Gajarsa writing for the Court), finding claims 1, 9, 14, 31, 36, and 56 to be obvious, and that the remaining claims were not infringed.

The patent was directed to "electronic methods for conducting 'original issuer auctions of financial instruments,'" i.e., methods for performing auctions for original-issuer municipal bonds over the Internet.  As explained in the opinion, these types of auctions are typically structured so that the issuer -- a municipality -- offers the bonds in a block to "bidders" (underwriters) who purchase the entire bond offering on an "all or nothing" basis, and then the underwriters sell individual bonds to the public.  The bonds typically comprise a variety of debt instruments having different maturity dates and principal amounts, so the bidder must offer a price based on these amounts and maturity dates.

The portion of the decision invalidating claims 1, 9, 14, 31, 36, and 56 for obviousness has been discussed elsewhere (see Patently-O, "Obviousness is Reviewed De Novo").  It is the remaining claims asserted by Muniauction, which the Federal Circuit found not to be infringed, that concern us here.  The Court's non-infringement decision was based on its determination that "no single party performs every step of the asserted claims" (which the CAFC characterized as being undisputed by the parties), coupled with the further rubric that a method claim can only be infringed if all steps of the claimed method are performed (see BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007)).  Here, some steps of the claimed methods were performed by the bidder, while others ("a majority") were performed by the auctioneer's computer system.  Thus, the Federal Circuit opined, the "issue [was] whether the actions of at least the bidder and the auctioneer may be combined" to amount to infringement by the auctioneer.

The Court decided they could not.  In its opinion, the CAFC relied on the principles enunciated in the BMC Resources case, which required that a single "party" must perform every step of a claimed method.  (The Court also cited its decision in NTP Inc. v. Research in Motion, that the users of the accused system could not directly infringe method claims where one step of the method was performed in Canada.)  Since a literal application of this rule would permit a defendant to avoid infringement liability by having a third party carry out at least one step of the method, the CAFC had adopted what it termed the "mastermind" test, wherein direct infringement will lie against multiple actors performing the steps of a claimed method if "one party exercises 'control or direction' over the entire process."

The question for the Federal Circuit was whether Thomson exercised sufficient control over the bidders to impute their actions to Thomson for purposes of infringement liability.  The Court concluded that Thomson did not, saying that the BMC Resources test would be satisfied "in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of the claimed method."  Thomson was in no way in control of the actions by the bidders, and Muniauction having presented "no legal theory" supporting liability, the Court reversed the judgment and vacated the damages award.

The case is certainly a cautionary tale, but it may have particular relevance to biotechnology claiming, as illustrated by the CAFC's earlier decision in Monsanto Co. v. Syngenta Seeds, Inc.  In that case, the Federal Circuit affirmed a judgment of non-infringement of claim 4 of U.S. Patent No. 5,538,880:

4.  A process comprising obtaining progeny from a fertile transgenic plant obtained by the process of claim 1 which comprise said DNA.

And claim 5 of U.S. Patent No. 6,013,863:

5.  The process of claim 1 further comprising obtaining transgenic glyphosate resistant progeny plants of subsequent generations from said fertile transgenic plant.

where claim 1 in each patent recited the method for producing the transgenic plants.

The District Court found that the asserted claims of the '880 and '863 patents required not merely the step of obtaining transgenic progeny but also the process of producing the transgenic plant in the first place, based on the dependent-claim structure of the asserted claims of these patents.  It was undisputed that the predecessor in interest of these patents, DeKalb Genetics Corp., had produced the transgenic plants initially and had thus performed these steps recited by the claims.

The Federal Circuit unanimously affirmed in an opinion by Judge Rader.  The CAFC rejected both of Monsanto's theories of infringement:  first, that claim 4 of the '880 patent was an independent claim and did not require performance of the steps recited in earlier claims; and second, that performance of the transgenic plant production steps by DeKalb did not preclude a finding of Syngenta's infringement by performing the ultimate step of obtaining the progeny transgenic plants.  Regarding Monsanto's first theory, the Federal Circuit stated that claim 4 of the '880 patent and claim 5 of the '863 patent were cast in the conventional form of dependent claims.  By itself this would not be sufficient, however, and the CAFC analyzed these claims with regard to whether they not only referenced at least one earlier claim but further limited the referent claim (pursuant to 35 U.S.C. § 112, fourth paragraph).  In this analysis, the Federal Circuit held that claim 4 fulfilled the statutory requirements of a dependent claim, and further stated that while Monsanto could have presented claim 4 as merely requiring the product of process claim 1 as a starting material, it had not.  The prosecution history supported this interpretation, as the claim as originally presented was "unquestionably" a dependent claim, and the patentees had asserted that amendments made to cast the claim into the form that issued as claim 4 were "directed to matters of form not affecting the scope of the invention" and did not introduce new matter.

The Federal Circuit also rejected Monsanto's contention, made during oral argument, that claim 1 was a product-by-process claim and thus merely provided a starting material for the process of claim 4.  Having affirmed the District Court's determination that claims 4 (of the '880 patent) and 5 (of the '863 patent) were dependent claims, the Federal Circuit held that Syngenta's performance merely of the ultimate step of the properly-construed process claim was not infringement as a matter of law.  The principle is simple:  although an independent claim may be infringed while its dependent claim is not, the converse is not true (see Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1552 (Fed. Cir. 1989)).  Here, it was undisputed that the steps comprising the independent claims of both asserted patents were performed not by the accused infringer Syngenta, but by Monsanto or DeKalb.  Thus, since Syngenta did not infringe these independent claims, it could not infringe the asserted dependent claims.  Moreover, the steps of the corresponding independent claims were practiced by Monsanto or DeKalb prior to grant of either of the asserted patents.  Accordingly, this activity did not support Monsanto's infringement claims (made under both § 271(a) and § 271(g)).

Thus, although not expressly addressing the issue raised in the Muniauction case, the Court's decision in Monsanto is consistent:  that a single party, or parties where one party is the "mastermind" who exerts "control or direction," must perform all steps of a method claim. 

These results suggest that biotechnology patent claims, drafted in ignorance of these principles, may be at risk.  As we have suggested earlier, caution should accompany claim drafting dependent on process steps, even should those process steps be necessary to overcome prior art or to fulfill the requirements of § 112.  In the Monsanto case, the outcome might have been different had claim 4 of the '880 patent recited a claim such as:

A process comprising obtaining progeny from a fertile transgenic plant comprising a chimeric gene encoding a chloroplast transit peptide/5-enolpyruvylshikimate-3-phosphate synthase fusion polypeptide expressed at a level sufficient to increase the plant's resistance to glyphosate.

or even better,

Progeny of a fertile transgenic plant comprising a chimeric gene encoding a chloroplast transit peptide/5-enolpyruvylshikimate-3-phosphate synthase fusion polypeptide expressed at a level sufficient to increase the plant's resistance to glyphosate.

Either of these claims would be free of any process steps that could raise issues with regard to performance of any steps other than the steps Syngenta certainly performed in this case, i.e., producing progeny of Monsanto's transgenic plants.

The CAFC's case law, consistent and evolving, thus suggests that prudent biotechnology patent prosecutors consider the interrelationships between independent, "method of making," claims and any dependent, "method of using" claims, to avoid this latest trap for the unwary.

Muniauction, Inc. v. Thomson Corp. (Fed Cir. 2008)
Panel: Senior Circuit Judge Plager and Circuit Judges Gajarsa and Prost
Opinion by Circuit Judge Gajarsa

Roche Palo Alto LLC v. Apotex, Inc. (Fed. Cir. 2008)

    By Donald Zuhn --

The Federal Circuit today affirmed a finding on summary judgment by the District Court for the Northern District of California that U.S. Patent No. 5,110,493, which is owned by Plaintiff-Appellee Roche Palo Alto LLC, is valid and infringed by Defendants-Appellants Apotex, Inc. and Apotex Corp. (Apotex).  In affirming the District Court's determination of validity and infringement, the Federal Circuit concluded that the lower court did not err in holding that the reverse doctrine of equivalents is inapplicable or that Apotex's defenses of invalidity and unenforceability were barred by claim preclusion.

The '493 patent is directed to a drug formulation for treating eye inflammation that contains (1) a non-steroidal anti-inflammatory drug, (2) a quaternary ammonium preservative, and (3) the nonionic surfactant octoxynol 40.  Claim 1 of the '493 patent recites:

Claim 7, which depends from claim 1, adds 0.79% sodium chloride to the formulation.

Roche's predecessor (Syntex (U.S.A.) LCC) marketed a drug formulation containing 0.5% of the non-steroidal anti-inflammatory drug ketorolac tromethamine (KT), 0.01% of the quaternary ammonium preservative benzalkonium chloride (BAC), 0.01% octoxynol 40, and 0.8% NaCl as ACULAR®.  Plaintiff-Appellee Allergan, Inc. currently markets another drug formulation containing 0.4% KT, 0.0063% BAC, 0.004% octoxynol 40, and 0.8% NaCl as ACULAR®LS.

During prosecution of the '493 patent, the examiner rejected the claims as being obvious over a number of references.  To overcome the rejection, applicants amended the claims to add the octoxynol 40 limitation, and submitted a declaration stating that a formulation containing octoxynol 40 yielded unexpected results (i.e., that it produced a clear solution).  In view of the amendment and declaration, the examiner allowed the claims.

Seeking approval to market a generic version of Roche's ACULAR® formulation, Apotex filed an Abbreviated New Drug Application (ANDA) with the FDA in 2001.  In response, Syntex filed an infringement suit against Apotex in the District Court for the Northern District of California (Syntex I).

In Syntex I, the District Court first construed the term "stabilizing amount" in the octoxynol 40 limitation as being a statement of intended result rather than a claim limitation, since the octoxynol 40 limitation also recites a concentration range.  The District Court then granted Syntex's motion for partial summary judgment of literal infringement, and following a bench trial, determined that the '493 patent is valid and enforceable.

On appeal, the Federal Circuit affirmed the District Court's claim construction and finding of no inequitable conduct, but reversed its determination of nonobviousness (Syntex II).  On remand, the District Court again found the '493 patent to be valid as nonobvious (Syntex III), and the Federal Circuit affirmed without opinion.  One day after the Federal Circuit affirmed, the Supreme Court issued its decision in KSR Int'l Co. v. Teleflex Inc.  Apotex's attempt to secure a rehearing in view of KSR, however, was unsuccessful as the CAFC denied Apotex's motion for a recall and stay of the CAFC's affirmance.

In 2005, Apotex filed a second ANDA with the FDA, this time seeking approval to market a generic version of Roche's ACULAR®LS formulation.  In response, Roche filed an infringement suit against Apotex, once again in the Northern District of California.

At trial, Roche filed a motion for summary judgment that Apotex's new formulation infringes the '493 patent, and that Apotex's defenses of validity and unenforceability should be barred under the doctrines of issue preclusion and claim preclusion.  Apotex argued that its new formulation should escape infringement under the reverse doctrine of equivalents, and that the doctrines of issue preclusion and claim preclusion were inapplicable as a result of a change in the law (i.e., the intervening KSR decision).

The District Court granted Roche's summary judgment motion, and found that Apotex had failed to establish a prima facie case of noninfringement under the reverse doctrine of equivalents.  The Court also determined that Apotex was barred by issue preclusion from asserting its defenses of invalidity (except for obviousness) or unenforceability, since the same assertions had been made in Syntex I.  As for obviousness, the District Court held that Apotex was barred by claim preclusion from asserting this defense.

In the instant appeal, Apotex first argued that the District Court erred in failing to find noninfringement under the reverse doctrine of equivalents.  Noting that "[t]he reverse doctrine of equivalents is rarely applied," and further, that the Federal Circuit had "never affirmed a finding of non-infringement under the reverse doctrine of equivalents," the CAFC described the equitable doctrine as one "designed 'to prevent unwarranted extension of the claims beyond a fair scope of the patentee’s invention.'"  The doctrine stems from the Supreme Court's decision in Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950), where the Supreme Court stated (emphasis added):

[W]here a device is so far changed in principle from a patented article that it performs the same or similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the [reverse] doctrine of equivalents may be used to restrict the claim and defeat the patentee’s action for infringement.

At trial, Apotex argued that the "principle" of the claimed formulation of the '493 patent is to use a sufficient amount of octoxynol 40 to cause the formation of micelles, which stabilize the drug formulation by preventing interactions between KT and BAC.  In support of its argument, Apotex relied on the declaration of its scientific expert.  Apotex also argued that the concentration of octoxynol 40 in its new formulation was below the threshold needed to form micelles, and that interactions between KT and BAC are instead prevented by NaCl, which acts to ionically shield KT and BAC.  As a result, Apotex contended that its new formulation is stabilized in a "substantially different way" from the claimed formulation of the '493 patent.

The Federal Circuit, however, determined that the District Court did not err in finding that Apotex had failed to establish a prima facie case of noninfringement under the reverese doctrine of equivalents.  In particular, the District Court determined that Apotex did not properly establish the "principle" of the claimed formulation because it exclusively relied on its expert declaration instead of the specification, prosecution history, and prior art.  The Federal Circuit noted that "there is no support in the claims or specification for micelle formation or for robust stabilization of the formulation by prevention of KT/BAC interactions," and further, that "there is no indication that the examiner, in allowing the claims, attributed the unexpected results of [octoxynol 40] to its superiority in forming micelles."  Moreover, the CAFC observed that Example 3 of the '493 patent discloses a formulation containing 0.004% of octoxynol 40, which is the same concentration of octoxynol 40 as in the ACULAR®LS formulation (and thus, the same concentration as in Apotex's new formulation).

Apotex next argued that the District Court erred in determining that Apotex's validity challenges were barred by claim preclusion.  In particular, Apotex asserted that the District Court erred in finding that the instant litigation and Syntex litigation involved the same claim or cause of action.

The Federal Circuit first noted that under its own law, an infringement claim in a second suit is the "same claim" as the infringement claim in an earlier suit if the accused products in the two suits are "essentially the same," and further, that accused products are essentially the same where the differences between the products are merely "colorable" or "unrelated to the limitations in the claim of the patent."  As with its reverse doctrine of equivalents argument, Apotex asserted that its new formulation was not essentially the same as its earlier formulation because the two formulations are stabilized by completely different ingredients and mechanisms.  Apotex also argued that the fact that it had to file separate ANDAs for the two formulations provided additional evidence that the formulations were materially different.

The Federal Circuit, however, once again found no error in the District Court's analysis.  In particular, the District Court had determined that both of Apotex's formulations fell within the ranges recited in the asserted claims.  The Federal Circuit stated that "[t]he fact that [Apotex's two formulations] are stabilized by different mechanisms, even if true, is irrelevant because both formulations are encompassed by the claims of the '493 patent," and therefore concluded that "any difference in composition between the two formulations is merely colorable and the two formulations are 'essentially the same.'"

The Federal Circuit dismissed Apotex's final argument that claim preclusion should not apply in this case given the change in law following the Supreme Court's decision in KSR, stating that the District Court "correctly recognized that there is no 'change of law' or fairness exception to prevent application of claim preclusion."  The Federal Circuit noted that to hold otherwise would be to nullify the doctrine of res judicata.

Roche Palo Alto LLC v. Apotex, Inc. (Fed. Cir. 2008)
Panel: Chief Judge Michel, Circuit Judge Prost, and District Judge Hochberg
Opinion by Circuit Judge Prost

BIO Submits Amicus Brief in Amgen v. Hoffman-LaRoche

    By Kevin E. Noonan --

The Biotechnology Industry Organization (BIO) submitted an amicus brief today to the Court of Appeals for the Federal Circuit in the Amgen v. Hoffman-LaRoche case (see "Brief of Biotechnology Industry Organization as Amicus Curiae in Support of Appellee and Affirmance ").  This case involves Roche's Mircera® drug product, a form of recombinant EPO that has been covalently linked to polyethylene glycol.  Last October, a jury found that Mircera® infringed several Amgen patents.  That verdict found that Roche's Mircera® infringed claims 3, 7, and 8 of Amgen's U.S. Patent No. 5,547,933 (claim 12 was found not to be literally infringed but infringed under the Doctrine of Equivalents); claims 1 and 2 of U.S. Patent No. 5,441,868; and claims 6 through 9 of U.S. Patent No. 5,618,698.  (Amgen's infringed claims were directed to recombinant methods and recombinant EPO protein.)  In addition, the jury found that Roche had not sustained its burden of establishing that any of Amgen's asserted claims were invalid (see "Amgen Survives Another EPO Challenge").

On February 28, 2008, the U.S. District Court for the District of Massachusetts (Judge William G. Young, presiding) granted a preliminary injunction to Amgen against Hoffman La-Roche, preventing Roche from selling Mircera®.  Using the four-factor test set forth by the Supreme Court in eBay Inc. v. MercExchange, L.L.C., the District Court relied upon the jury verdict that Amgen's asserted claims were infringed and not invalid; in addition, the Court found that Amgen's injury would not be adequately compensated merely with money damages, and that the balance of the hardships weighed in favor of granting the injunction.  The District Court struggled with the public interest prong of the test, in view of Roche's argument that the public interest was served by the (presumed) reduced drug price that would ensue from competition between Mircera® and Amgen's Epogen® and Aranesp® products, as well as Roche's representations of the advantages of its Mircera® product over Amgen's version of EPO (including inter alia less frequent dosing; see "Long-Acting Drug for Dialysis Anemia Equivalent to Weekly Agent").

The District Court set out conditions under which it would modify the injunction, conditions that amounted to a compulsory license.  These included:  first, that Roche would pay Amgen a royalty of 22.5%; second, Mircera® would be introduced to the Medicare patient population at a cost no less than the average sales price of Amgen's EPO products; third, Roche would have to provide clinical evidence to permit the Court to determine a "dosage conversion factor" between Mircera® and Epogen®; fourth, Roche would pay for an independent agency to monitor sales and determine royalty payments owed to Amgen; and finally, Roche would agree to supply Mircera® to any patient needing it, at or below the authorized price.  Although Roche agreed to these terms (see "Roche Agrees to Court's Conditions for Modifying Preliminary Injunction"), the Court decided it needed the advice of a special master to consider the question of how dosing and pricing of Amgen's and Roche's products should be compared.  Instead of agreeing to provide the District Court with a list of candidates to be special master, Roche filed its appeal to the Federal Circuit on April 11, 2008 (see "Hoffmann-LaRoche Can't Wait, Files Notice of Appeal to the Federal Circuit").

BIO's brief addresses a single issue before the Federal Circuit:  should the public interest prong of the eBay four-factor test be construed to encompass the "public interest" in lower drug prices.  BIO's brief argues that it should not.  First, BIO argues that the prospect of patent exclusivity is an important part of the patent grant, particularly for biotechnology companies.  The brief recites the economic realities:  that it can cost $1.2 billion to get a biologic drug to market; that "[b]iologics research and development is high-risk, with greater capital costs, higher material costs, greater manufacturing costs and uncertainties, longer development times, and lower late-stage success rates than small molecule pharmaceutical drugs"; and that sales of a biologic drug reach the break-even point for recovering the research and development costs at between approximately 12 and 16 years after the drug enters the marketplace.  These economic realities are important, according to BIO, because investors will not be willing to take the significant risks attendant upon this technology unless there is a sufficient likelihood that a biologic drug will retain its market exclusivity for the maximum patent term.

BIO's brief also notes the irreparable harm to the patentee that would be caused by improvidently permitting an infringing product to enter the marketplace, particularly for a preliminary injunction.  Besides price erosion, the brief notes that market entry of a competing product would be "virtually impossible to undo."  Indeed, such a policy would serve to create a "public interest" when a court, as here in the face of a verdict of infringement and non-invalidity, would be considering a permanent injunction after the public has come to rely on a lower-priced competitor product.

The brief distinguishes eBay on its facts, being limited to a patentee that did not practice a business-method patent.  BIO reminds the Federal Circuit that the Supreme Court held that the exercise of a court's injunctive relief powers "must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards," which standards have traditionally granted injunctions against infringing competitors.  eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).  The proper focus of the public interest analysis, according to BIO, should be "whether there exists some critical public interest that would be injured by the grant" of injunctive relief (citing Hybritech Inc. v. Abbott Laboratories , 849 F.2d 1446, 1458 (Fed. Cir. 1988)).  In this regard, the brief cites numerous examples of courts granting injunctions but staying their implementation, in the public interest, to permit the patentee to obtain regulatory approval (Johns Hopkins Univ. v. CellPro, No. 94-105-RRM, 1997 U.S. Dist. LEXIS 24162, at *20-22, 50 (D. Del. July 24, 1997), aff'd in part, vacated in part, 152 F.3d 1342 (Fed. Cir. 1998)), or being capable of supplying the market with the patented article.

The brief also notes that considering the public interest in lower priced drugs as an appropriate measure of the "public interest" prong of the four-factor test is contrary to policy decisions made by Congress.  In this regard, the brief cites the Bayh-Dole act, which contains severely restricted "march-in" rights provisions only in the face of unmet medical need, as well as the Hatch-Waxman Act, that actually increases patent term to an innovator as a recompense for regulatory delay.  Nor does the Medicare Act support using lower drug prices as a sufficient equitable reason for denying an injunction, since Congress has refused to reduce reimbursement (which would achieve a similar purpose) without further study, which BIO's brief argues attests to the "the multifaceted nature of drug pricing issues, and underscores the delicate balance of competing economic and health care policies that is best left to the legislative branch."  The brief also cites the numerous failed attempts to pass legislation authorizing compulsory patent licenses.

BIO reminds the Federal Circuit that is has already decided that it should be up to Congress, not the courts, to make the kinds of drug pricing decisions that would result from the proposed compulsory license for Mircera®.  In Biotechnology Indus. Org. v. District of Columbia, 496 F.3d 1362, 1373 (Fed. Cir. 2007), a case involving a District of Columbia city ordinance that would have mandated pricing of patented drugs, the Court said:

The present patent system reflects the result of Congress' deliberations.  Congress has decided that patentees' present amount of exclusionary power, the present length of patent terms, and the present conditions for patentability represent the best balance between exclusion and free use.

And BIO argues that this represents a policy judgment by Congress that the Federal Circuit should respect "in applying the public interest prong of the four factor injunction test."

The brief makes one more, forceful and thoughtful point.  If the Federal Circuit should hold that district courts can consider the "public interest" of lower drug prices as part of the public interest prong of the injunctive relief test under eBay, then the hallmark of the patent grant, exclusivity, would be decided in a case-by-case, ad hoc manner that would completely undermine the economic basis for patent protection and the benefits of the patent grant relied upon by investors.  Moreover, appellate review of the district court's decision would be "under the deferential abuse of discretion standard," which would do nothing to ensure predictability of outcomes or the Federal Circuit's supervisory role under its Congressional implementing statute to bring consistency to U.S. patent law.  Indeed, the brief argues that the effect of permitting district courts to consider lower drug prices would result in each district court acting as a drug "price czar," thereby undermining public policy and substituting Congressional deliberation with "a limited evidentiary record and the exercise of [a court's] equitable discretion."  And the irony according to the brief is that the result may not be lower drug prices:  in the case before the CAFC, the proposed compulsory license required Mircera® to be priced "at or less than" Amgen's erythropoietin products.  This raises the real possibility that a compulsory license could be granted to an infringing competitor "with no price advantage to the consumer."

This can't be what the Supreme Court had in mind when it decided eBay, but the expansiveness of its pronouncements, in this as in other areas of patent law, have done little to promote the kind of certainty in this area of the law that Congress intended.  A less activist Court might be willing to recognize, as the Supreme Court had been until recently, that patent law is one area where restraint in exercising its authority can be the more prudent course of action.

For additional information regarding this and other related topics, please see:

• "How to Avoid a Permanent Injunction: The Lessons of Amgen v. Hoffmann-LaRoche," April 28, 2008
• "Glasses Half-full or Half-empty: Hoffman-LaRoche's Different Interpretation of Pfizer v. Teva," April 15, 2008
• "Hoffmann-LaRoche Can't Wait, Files Notice of Appeal to the Federal Circuit," April 11, 2008
• "Will the Federal Circuit's Pfizer v. Teva Decision Spell the End of Amgen's Patent Rights to Recombinant Human Erythropoietin?" March 31, 2008
• "Court Still Cannot Decide on Amgen's Permanent Injunction," March 26, 2008
• "Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)," March 20, 2008
• "Roche Agrees to Court's Conditions for Modifying Preliminary Injunction," March 20, 2008
• "Roche's Mircera® Remains Off the Market (For Now)," March 2, 2008
• "Amgen Survives Another EPO Challenge," October 28, 2007

In re Omeprazole Patent Litigation (Fed. Cir. 2008)

    By Donald Zuhn --

Yesterday, the Federal Circuit affirmed the determination by the District Court for the Southern District of New York that Defendants-Appellees Mylan Laboratories, Inc., Mylan Pharmaceuticals, Incorporated, Esteve Quimica, S.A., and Laboratorios Dr. Esteve, S.A. (Mylan) did not infringe U.S. Patent Nos. 4,786,505 and 4,853,230, which relate to oral pharmaceutical preparations for omeprazole.  Omeprazole is the active ingredient in Prilosec®, which is marketed by Plaintiffs-Appellants Astrazeneca, AB, Aktiebolaget Hassle, KBI-E, Inc., KBI, Inc., and Astrazeneca LP (Astrazeneca) for the treatment of gastric and duodenal ulcers, and which acts by inhibiting the production of gastric acid.

Astrazeneca developed the omeprazole oral formulation claimed in the '505 and '230 patents in order to overcome formulation problems with omeprazole resulting from the compound's susceptiblity to degradation in acid-reacting and neutral media, and sensitivity to heat, organic solvents, moisture, and light.  In particular, the claimed oral formulation includes, inter alia, a core containing omeprazole and an alkaline reacting compound (ARC).

Seeking approval to market a generic version of Astrazeneca's omeprazole formulation, Mylan filed an Abbreviated New Drug Application (ANDA) with the FDA.  Mylan's formulation includes an inert sugar/starch core with an active coating of omeprazole, talc, and hydroxypropyl methylcellulose.

In response to Mylan's ANDA filing, Astrazeneca filed suit for infringement of the '505 and '230 patents.  Astrazeneca similarly filed infringement suits against a number of other generic drug manufacturers seeking to market generic omeprazole formulations.  These suits were consolidated with the action against Mylan in a multi-district litigation, and then tried in two waves.

During a 42-day bench trial, both Astrazeneca and Mylan presented evidence as to whether Mylan's formulation contained an ARC in the active core region, as required by the claims.  In particular, Astrazeneca argued that the talc in Mylan’s formulation was alkaline and that the source of this alkalinity was carbonates (i.e., the use of talc introduces carbonates into the active drug layer, and these carbonates are the ARCs required by the claims).  Astrazeneca's expert performed tests that indicated that carbonates were present in Mylan’s talc, and that these carbonates were the source of the alkalinity of the talc.  Mylan countered with tests that indicated that their talc contained no detectable amount of carbonates.  After weighing the competing evidence, the District Court determined that Astrazeneca failed to prove that Mylan's talc contained carbonates, and found for Mylan on the issue of infringement.

On appeal, the Federal Circuit rejected each of Astrazeneca's arguments for reversal.  The CAFC first rejected Astrazeneca's argument that the District Court had applied the wrong legal standard (i.e., something higher than a preponderance of the evidence), determining that the District Court "knew, understood, and applied the proper standard of proof."  The Federal Circuit next rejected Astrazeneca's argument that it had met its burden of proof since the District Court had "ignored vast amounts of evidence that showed the presence of carbonates in the talc."  The CAFC, however, noted that such an argument "amounts to mere disagreement with the court’s factual findings, which cannot serve as a basis for reversing the court."  As a result, the Federal Circuit affirmed the District Court's finding of noninfringement.

In re Omeprazole Patent Litigation (Fed. Cir. 2008)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Bryson, and Gajarsa
Opinion by Circuit Judge Lourie

Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)

Federal Circuit Gives Amgen a Mixed Decision on Its ITC Complaint against Roche's Mircera®

    By Kevin E. Noonan --

The Federal Circuit in a decision handed down on Wednesday affirmed the International Trade Commission's grant of summary judgment against Amgen in its attempts to block importation of Roche's Mircera® peglylated erythropoietin product.  In so doing, the Federal Circuit continued its parsing of the expansive scope of the "safe harbor" provisions of 35 U.S.C. § 271(e)(1) established by the Supreme Court in Merck KGaA v. Integra Lifesciences I, Ltd. and Eli Lilly and Co. v. Medtronic, Inc.

Amgen requested the ITC to ban importation of Mircera® under the provisions of 19 U.S.C. § 1337(a)(1)(B)(ii):

19 U.S.C. 1337(a)(1)  Subject to paragraph (2), the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section:

                                * * *

    (B) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that--
    (i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright under title 17, United States Code; or
    (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.

Amgen's complaint was based on alleged infringement of the following patents:  U.S. Patent Nos. 5,411,868 (claims 1 and 2); 5,547,933 (claims 3, 4, 5, and 11); 5,618,698 (claims 4-9); 5,621,080 (claims 4 and 6); 5,756,349 (claim 7); and 5,955,422 (claim 1).  (These patents also formed the basis for Amgen's successful patent infringement action against Roche in the District Court of Massachusetts.)

Roche countered that its Mircera® drug product was exempt from infringement under the "safe harbor" provisions of 35 U.S.C. § 271(e)(1):

35 U.S.C. §271(e)(1)  It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention  . . .  solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

The ITC agreed with Roche, that the imported Mircera® was exempt from infringement under the safe harbor provisions of § 271(e)(1).  The ITC made this determination on summary judgment, despite allegations by Amgen that: (1) the importation at issue occurred after Roche had submitted its Biologic License Application to the U.S. Food and Drug Administration; (2) the imported Mircera® drug product was used for marketing surveys, infringement analysis, and activities related to Amgen's patent infringement litigation with Roche and not for activities "reasonably related to the development and submission of information" to the FDA; and (3) these activities were not protected under the safe harbor provisions of § 271(e)(1).

In addition to granting summary judgment on the safe harbor issues, the ITC also determined that it lacked jurisdiction to "investigate and resolve" Amgen's charges of infringement, since its jurisdiction was limited to acts of importation and sale of infringing articles (or articles made by using an infringing process) and there was no evidence that any of Roche's Mircera® drug product had been sold or the subject of a contract for sale in the U.S. (which was true, since Roche had not yet received FDA approval for Mircera®).

The Federal Circuit (in an opinion by Judge Newman, joined by Judge Lourie and in part by Judge Linn) affirmed the ITC's interpretation of the interactions of 19 U.S.C. § 1337, 35 U.S.C. § 271(e)(1) and § 271 (g), but reversed and remanded on the jurisdictional issue.  The CAFC rejected Amgen's argument that the ITC, pursuant to § 1337, had the authority to bar importation of any product made by the infringing use of a patented process, regardless of any exemption from infringement that may apply to the product.  Amgen's argument was that the exemption vel non of Roche's Mircera® drug product under § 271(e)(1) was irrelevant, since the act of importing a product made using an infringing method was sufficient.  The Federal Circuit refused to adopt this rationale, since to do so would have permitted Amgen to use the ITC to prevent Roche from importing Mircera® solely for purposes falling within the safe harbor provisions of § 271(e)(1).  This outcome would contravene the Supreme Court's determination that § 271(e)(1) should be read broadly to prevent a patentee from any action that would prevent or inhibit another from using a patented invention for activities (even otherwise infringing ones) that are "reasonably related" to producing information for submission in support of obtaining regulatory approval (e.g., for a generic version of a patented drug).

In making this decision, the Federal Circuit distinguished its decision from the rationale for the Court's decision in Kinik Co. v. International Trade Comm'n.  In the Kinik case, the Federal Circuit held that the accused infringer could not avail itself of the exceptions set forth in 35 U.S.C. § 271(g)(1) or (2):

35 U.S.C. §271(g)  Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.  . . .  A product which is made by a patented process will, for purposes of this title, not be considered to be so made after--
    (1) it is materially changed by subsequent processes; or
    (2) it becomes a trivial and nonessential component of another product.

But in that case, the Court recognized that the act constituting infringement (using a process abroad that is patented in the U.S., and then importing the product of that process) was being newly established as a basis for patent infringement in U.S. district courts.  However, such activities for many years had been a basis for instituting an ITC action under 19 U.S.C. § 1337(a)(1)(B)(ii).  Taking into consideration this statutory situation in view of statements from § 271(g) and the legislative history to the effect that the statute was not intended to affect already-existing causes of action under, inter alia, the ITC, the Court in Kinik held that § 271(g) did not confer the two exemptions onto acts forming the basis for ITC action under 19 U.S.C. § 1337(a)(1)(B)(ii).

In the instant case, the Federal Circuit found that Congressional purposes for § 271(e)(1), as interpreted by the Supreme Court in Merck and Eli Lilly, would be thwarted should the ITC be able to ban importation of articles falling within the safe harbor provisions of the statute that were made using an infringing method.  Accordingly, the CAFC affirmed the ITC's judgment not to impose a ban on Roche's importation of its Mircera® drug product to the extent that the imported drug was used for activities "reasonably related" to obtaining FDA approval for the drug.

The Court reversed the ITC on the question of its jurisdiction to determine whether any portion of the imported Mircera® drug product had been used for activities other than those "reasonably related" to obtaining FDA approval for the drug, however.  Citing Merck, the Federal Circuit held that the Supreme Court expressed the view that its textual reading of the statute should give an expansive scope to the activities falling within the safe harbor.  However, the Federal Circuit asserted that the Supreme Court did not intend to give carte blanche to an accused infringer for all activities using an otherwise infringing product.  Rather, the CAFC found Supreme Court guidance that the accused activities must be scrutinized to determine whether they properly could be said to be "reasonably related" to obtaining FDA approval for the drug.  As for the ITC's contention that the absence of a sale or contract for sale thwarted its jurisdiction, the Federal Circuit held that the ITC had the power to use prophylactically its authority to ban importation, so as to prevent harm to American industry "in its incipiency."  The CAFC reasoned that the purpose of ITC actions were to prevent infringing articles from getting into the stream of commerce, and to unify actions against an accused infringer before commercial activities required a profusion of individual suits to prevent infringement.

Judge Linn dissented from affirming summary judgment regarding the safe harbor to ITC actions.  While acknowledging that the majority's interpretation was consistent with Supreme Court teachings on the scope of § 271(e)(1) and with the extant Congressional record, he opined that consistency was not enough:  it was up to Congress not the Court to say unambiguously that its intention was to extend safe harbor protection to activities that would otherwise fall within the scope of the ITC's authority to ban under 19 U.S.C. § 1337(a)(1)(B)(ii).

Amgen Inc. v. International Trade Comm'n (Fed. Cir. 2008)
Panel: Circuit Judges Newman, Lourie, and Linn
Opinion by Circuit Judge Newman, opinion concurring-in-part and dissenting-in-part by Circuit Judge Linn

Additional information regarding this case can be found at Patently-O and the Orange Book Blog.

Regents of the Univ. of California v. DakoCytomation California, Inc. (Fed. Cir. 2008)

    By Donald Zuhn --

On February 28th, the Federal Circuit, in Regents of the Univ. of California v. DakoCytomation California, Inc.:  (a) affirmed the denial by the District Court for the Northern District of California of a preliminary injunction sought by the Regents of the University of California, Abbott Molecular Inc., and Abbott Laboratories Inc. (Appellants), (b) affirmed in part the District Court's grant of summary judgment of noninfringement as to U.S. Patent No. 6,596,479, (c) reversed in part the District Court's grant of summary judgment of noninfringement as to U.S. Patent No. 5,447,841, (d) affirmed the District Court's construction of "heterogeneous mixture of labeled unique sequence nucleic acid fragments," (e) reversed the District's Court's construction of "morphologically identifiable cell nucleus," and (f) reversed the District Court's determination that Appellants were estopped from asserting that Dako's products meet a limitation of the '841 patent under the doctrine of equivalents.  The Federal Circuit remanded the case to the District Court.

The '841 and '479 patents, which are owned by the Regents of the University of California and are exclusively licensed by Abbott, are directed to improved methods for identifying and classifying chromosomes in order to detect chromosomal abnormalities.  The improved methods of the '841 and '479 patents seek to overcome two problems that existed in the prior art:  (1) the requirement of prior art methods that chromosomes be in the metaphase stage of the cell-division cycle (when the chromosomes are condensed and microscopically visible) as opposed to the interphase stage (when the chromosomes are not condensed and therefore not microscopically visible), and (2) the nonspecificity of prior art methods that use nucleic acid probes to detect particular chromosomal sequences, which leads to unacceptable false-positive results.  This nonspecificity is caused by the hybridization of the nucleic acid probes to repetitive nucleotide sequences scattered throughout the chromosomes; in effect, the repetitive sequences "interfere" with the ability of the nucleic acid probes to hybridize only with particular chromosomal sequences.

The claimed methods of the '841 and '479 patents overcome the problems in the prior art by eliminating the "interference" caused by repetitive sequences.  In the methods of the '841 patent, the interference is eliminated by blocking repetitive sequences, and in the methods of the '479 patent, the interference is eliminated by removing the repetitive sequences.  In particular, in the methods of the '841 patent, "blocking nucleic acid . . . fragments which are substantially complementary to repetitive segments" are added to "labeled nucleic acid . . . fragments which are substantially complementary to nucleic acid segments within the chromosomal DNA for which detection is desired," and in the methods of the '479 patent, "a heterogeneous mixture of labeled unique sequence nucleic acid fragments which are substantially complementary to nucleic acid segments within the interphase chromosomal DNA for which detection is desired" is used.

In September of 2005, Appellants brought suit against Dako for patent infringement, and then in October of 2005 filed a motion for preliminary injunction seeking to enjoin Dako from manufacturing and selling its HER2 kit.  Based on the District Court's construction of the limitations "morphologically identifiable chromosome or cell nucleus" and "heterogeneous mixture of labeled unique sequence nucleic acid fragments" of the '479 patent, and its conclusion that Dako's product did not meet the "blocking nucleic acid" limitation of the '841 patent under the doctrine of equivalents, the District Court determined that Appellants had failed to show a likelihood of success on the merits with respect to their infringement claims, and therefore denied Appellants' motion.

The District Court subsequently issued a second order, amending the basis for its denial of Appellants' preliminary injunction motion.  In particular, the District Court maintained its rejection of Appellants' proposed construction of "heterogeneous mixture of labeled unique sequence nucleic acid fragments," but on the grounds that adopting such a construction would render the '479 patent invalid under the doctrine of obviousness-type double patenting (the District Court had previously determined that adopting Appellants' construction, which only appears in the '479 patent, would render the '479 patent invalid in view of the '841 patent, which the Court determined to be prior art to the '479 patent).  Appellants appealed both orders to the Federal Circuit.

While these appeals were pending, Dako moved for summary judgment of noninfringement.  Following a Markman hearing, the District Court granted summary judgment of noninfringement as to the '479 patent based on the Court's construction of the "heterogeneous mixture of labeled unique sequence nucleic acid fragments" limitation, and granted summary judgment of noninfringement as to the '841 patent based on the Court's conclusion that Appellants were barred from asserting that two of Dako's products met the "blocking nucleic acid" limitation under the doctrine of equivalents (the Court denied summary judgment as to the '841 patent for twenty other Dako products).  Following the District Court's order, the parties filed a joint motion to certify for immediate appeal, which the District Court granted, and the Federal Circuit then granted permission to appeal the interlocutory order.

On appeal, Appellants argued that the District Court had erred in:  (1) construing the limitation "heterogeneous mixture of labeled unique sequence nucleic acid fragments," (2) applying prosecution history estoppel to the "blocking nucleic acid" limitation, and (3) construing the limitation "morphologically identifiable cell nucleus."  With respect to the first issue, Appellants argued that the District Court erred in construing the limitation to mean that the heterogeneous mixture excludes repetitive sequences (Dako's kits contain repetitive sequences).  Appellants based their argument on the doctrine of claim differentiation (some of the patent's dependent claims require repetitive sequences) and the District Court's improper reliance on the prosecution history (Appellants asserted that the term "unique sequence" was added during prosecution to clarify that the claimed method was related to the detection -- and not necessarily use -- of unique sequences).

Despite finding that the District Court erred in first concluding that the '841 patent was prior art to the '479 patent and then concluding that the '479 patent would be rendered invalid due to obviousness-type double patenting, the Federal Circuit affirmed the District Court's construction of the heterogeneous mixture limitation as well as the District Court's determination that some of Dako's kits contain repetitive sequences, and therefore, do not infringe the '479 patent.  The basis of the Federal Circuit's affirmance was Appellants' ability to overcome an enablement rejection (the examiner argued that a mixture containing repetitive sequences would not work due to nonspecific hybridization) by limiting the heterogeneous mixture's composition to unique sequences.  As for Appellants' claim differentiation argument, the Federal Circuit noted that "the presumption created by the doctrine of claim differentiation is 'not a hard and fast rule and will be overcome by a contrary construction dictated by the written description or prosecution history.'"

With respect to the "blocking nucleic acid" limitation, Appellants argued that the District Court erred in barring them from asserting that the peptide nucleic acids (PNAs) used in Dako's kits were an equivalent of the blocking nucleic acids recited in the claims (the parties had stipulated that the "nucleic acid" portion of the term was limited to DNA and RNA).  In particular, Appellants asserted that since the "blocking nucleic acid" limitation was never narrowed during prosecution, the District Court improperly applied the doctrine of prosecution history.

The Federal Circuit concluded first that "[b]ecause the prosecution history suggests that the patentees limited the claim to the blocking method at least in part to overcome the examiner's rejections, the patentees presumptively surrendered all equivalents of the 'blocking nucleic acid' limitation."  The CAFC then concluded that Appellants "met their burden of showing that the amendment did not surrender the equivalent in question because the narrowing amendment was only tangential to the accused PNA equivalent," and therefore, determined that the District Court erred in finding that Appellants were estopped from asserting that Dako's products infringe under the doctrine of equivalents.  The Federal Circuit based its conclusion on the fact that when the patentees amended the claims to add the "blocking nucleic acid" limitation, they  "argued that that the invention was new and nonobvious because it used the blocking method in connection with in situ hybridization for the detection of unique sequences" (emphasis added).  Thus, the CAFC concluded that Appellants' narrowing amendment focused on the "blocking" aspect and not on the "nucleic acid" aspect of the limitation.  The Federal Circuit, therefore, reversed the District Court's determination that Appellants were barred from asserting that Dako's PNA-containing kits infringed under the doctrine of equivalents.

Finally, with respect to the "morphologically identifiable cell nucleus" limitation, Appellants argued that the District Court erred in construing the term to mean "a single cell nucleus that contains the full complement of chromosomal DNA."  Appellants asserted that the limitation "merely requires that the nucleus be 'capable of being identified by its form or function' and does not require the full set of DNA."  The Federal Circuit agreed with Appellants, stating that "[s]ignificantly, nowhere in the prosecution history, or the specification for that matter, do we find any indication that the 'morphologically identifiable' language was added to impose a requirement that the cell nucleus must retain its full complement of chromosomal DNA."  The CAFC, therefore, determined that the District Court erred in construing this limitation.

Judge Prost dissented with respect to the portion of the majority opinion that holds that the doctrine of equivalents is not precluded by prosecution history estoppel because the tangential exception applies, writing that the majority's finding "is contrary to this court's precedent and to the proper application of prosecution history estoppel as set forth by the Supreme Court."  Citing Norian Corp. v. Styker Corp., Judge Prost noted that:

[I]t frequently happens that patentees surrender more through amendment than may have been absolutely necessary to avoid particular prior art.  In such cases, we have held the patentees to the scope of what they ultimately claim, and we have not allowed them to assert that claims should be interpreted as if they had surrendered only what they had to.

Observing that the patentees narrowed the scope of the claims from any method of eliminating interference from repetitive sequences to just the use of "blocking nucleic acid," Judge Prost stated that:

It is irrelevant to the determination of the scope of the surrendered territory that to overcome the prior art references the patentee did not need to amend the claims to a method of disabling the hybridization capacity of repetitive sequences by blocking with a "blocking nucleic acid," but instead could have amended the claims to a method of disabling repetitive sequences by blocking.

Judge Prost concluded that:

To overcome the presumption of prosecution history estoppel "[t]he patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent."  Here, the appellants could reasonably have been expected to have drafted a claim that encompassed blocking repetitive sequences using PNA.  The appellants should, therefore, be estopped from asserting that PNA is an equivalent to "blocking nucleic acid" in the '841 patent.

Regents of the Univ. of California v. DakoCytomation California, Inc. (Fed. Cir. 2008)
Panel: Circuit Judges Mayer, Lourie, and Prost
Opinion by Circuit Judge Lourie; opinion dissenting-in-part by Circuit Judge Prost

Additional information regarding this case can be found at Patently-O.

Innogenetics, N.V. v. Abbott Labs. (Fed. Cir. 2008)

Innogenetics Loses Injunction; Abbott HCV Genotyping Test to Remain on the Market

    By Robert Dailey --

The Federal Circuit today released its opinion in the ongoing dispute between Abbott and Innogenetics over diagnostic tools for classifying hepatitis C virus (HCV) genotypes.  Patent Docs previously reported on the District Court order and its issuance of an injunction.

Innogenetics owns U.S. Patent No. 5,846,704 directed to methods of genotyping HCV.  Claim 1 recites:

A method of genotyping HCV present in a biological sample comprising hybridizing nucleic acids in a biological sample with at least one probe and detecting a complex as formed with said probe and said nucleic acids of HCV, using a probe that specifically hybridizes to the domain extending from the nucleotides at positions -291 to -66 of the 5' untranslated region of the HCV.

Abbott argued that its product could not infringe the claim because its product constitutes after-arising technology (i.e., it relies on developments that did not exist as of the '704 patent's priority date).  Therefore, the Federal Circuit could have used this case as an opportunity to refine the differences between two 2004 cases:  SuperGuide Corp. v. DirectTV Enterprises, Inc., 358 F.3d 870 (Fed. Cir. 2004) (holding that after-arising technology may infringe) and Chiron Corp. v. Genentech, Inc., 363 F.3d 1247 (Fed. Cir. 2004) (holding that claims that sweep in after-arising technology fail the written description requirement).  In the end, this didn't happen.  The Federal Circuit agreed with the District Court in finding that Abbott never properly raised the issue at trial.

The Federal Circuit affirmed the District Court's findings on patent validity and enforceability with one exception.  An Abbott expert had testified that a prior art patent, U.S. Patent No. 5,580,718 anticipated claim 1 of the '704 patent.  The District Court had rejected his testimony because the lower court assessed that the testimony was premised on a misunderstanding of its claim construction.  The Federal Circuit held that the expert's testimony was consistent with the claim construction, and asked the District Court to reconsider whether the '718 patent anticipates the Innogenetics patent.  The Federal Circuit resisted weighing in on the merits of this anticipation issue until the District Court can hold a new trial.

The Federal Circuit also dissolved the permanent injunction that the District Court had issued following the trial.  The District Court's damage award of $7 million had included $5.8 million market entry fee as well as an ongoing royalty of 5-10 euro per test.  The Federal Circuit held that Innogenetics could not collect a market entry fee and an ongoing royalty, and simultaneously benefit from a permanent injunction.  In general, the willingness of a patentee to accept royalty payments does not preclude issuance of a permanent injunction.  But the situation is different when the patentee also accepts damages covering market entry fees and ongoing royalty payments.

Hence, the case is headed back to the District Court in Madison, Wisconsin, for a mini-trial on the issue of whether the '718 patent anticipates the Innogenetics patent.  But now that the injunction has been dissolved, the two parties may be much closer to settling their dispute.

Innogenetics, N.V. v. Abbott Labs. (Fed. Cir. 2008)
Panel:  Circuit Judge Bryson, Senior Circuit Judge Clevenger, and Circuit Judge Moore
Opinion by Circuit Judge Moore

For additional information regarding this topic, please see:

• "Innogenetics Appeals Its Win over Abbott," January 30, 2007
• "Permanent Injunction Issued against Abbott HCV Genotyping Test Kit," January 12, 2007
• "Innogenetics Wins $7 Million Judgment against Abbott for Infringing HCV Genotyping Method," January 8, 2007

Additional information regarding this case can also be found at Patently-O.

Abbott Labs. v. Torpharm, Inc. (Fed Cir. 2007)

ANDA Filing Not Violation of Express Terms of Injunction

    By Sherri Oslick --

In an opinion authored by Chief Judge Michel and issued late last week, the CAFC reversed the United States District Court for the Northern District of Illinois, finding Apotex not to have violated an injunction prohibiting it from manufacturing, using, selling, offering for sale, or importing into the United States generic divalproex sodium until the expiration of U.S. Patent Nos. 4,988,731 and 5,212,326.  Divalproex sodium (an oligomer of units of sodium valproate and valproic acid) is marketed by Abbott as Depakote®, and is an anti-seizure medication.  The claims of the '731 and '326 require that the oligomer contain 4-6 units.

The present holding represents round 3 at the CAFC for the parties.  In 1997, Apotex filed an ANDA seeking approval to market generic Depakote®; the ANDA included a Paragraph IV certification of invalidity against the '731 and '326 patents, the two patents listed in the Orange Book for Depakote®.  Abbott filed suit against Apotex for infringement of the '731 and '326 patents, and obtained a favorable ruling on summary judgment on both validity and infringement.  Apotex appealed; the CAFC affirmed the ruling on validity but remanded for a trial on infringement.  Following a bench trial, Judge Posner (sitting by designation) determined that Apotex's filing of an ANDA infringed Abbott's patents as Abbott had proved by a preponderance of the evidence that Apotex's product was a 4-6 unit oligomer of divalproex sodium.  As such, the District Court entered an injunction prohibiting Apotex from "commercially manufacturing, using, selling, or offering to sell generic divalproex sodium which the Court has found to be infringing within the United States, or from importing such product into the United States, until Abbott's U.S. Patent Nos. 4,988,731 and 5,212,326 expire and defendants have received final approval from FDA to market generic divalproex sodium."  Apotex appealed the judgment and the CAFC affirmed without opinion.

Subsequently, Apotex attempted to prepare a design-around having greater than 6 units of divalproex sodium, and entered into an agreement with Nu-Pharm (formerly owned by Apotex's parent company) whereby Apotex would fund, but Nu-Pharm would file, an ANDA for the design-around.  Nu-Pharm's ANDA was filed in 2005 with a Paragraph IV certification of non-infringement, and Abbott responded by filing suit against Nu-Pharm.  After Nu-Pharm filed an amended ANDA directed to additional dosages, and having learned of the defendants' relationship, Abbott filed a second suit, this time against Nu-Pharm and Apotex.  Upon motion by Abbott, the second suit was reassigned to Judge Pallmeyer based on its relatedness to the first case.

On the day that Nu-Pharm moved for summary judgment of non-infringement before Judge Pallmeyer, Abbott moved both to enforce the injunction before Judge Posner and to stay the proceedings in front of Judge Pallmeyer.  The stay was granted, and Judge Posner found Apotex in contempt, interpreting the injunction to cover any generic divalproex sodium found to be infringing.  Because Posner found no difference (and therefore no "colorable" difference) between Apotex's prior product and its design-around, he found Apotex's new product to infringe the claims of Abbott's patents and extended the injunction to cover the Nu-Pharm ANDA.  Apotex appealed.

On appeal, Apotex argued that the District Court had no statutory authority to entertain the contempt proceeding as the Hatch-Waxman Act does not grant such subject matter jurisdiction, and in the alternative, that the proceedings were improper as an infringement inquiry was to be handled only by trial under the Federal Rules of Civil Procedure.  Specifically, on the first point, Apotex argued that in a Hatch-Waxman scenario, such a contempt proceeding was unlawful because the underlying suit is filed prior to any "classically infringing" activity (i.e., making and selling an infringing product) and more specifically, that Apotex had not engaged in such activities.  In short, asserted Apotex, the "artificial infringement" as a result of their second ANDA filing was not an act subject to scrutiny in a contempt proceeding.

The CAFC dismissed Apotex's argument, noting that it had held numerous times that, albeit "highly artificial," the filing of a Paragraph IV certification as part of an ANDA was, by statute, an act of infringement and that infringement in a Hatch-Waxman suit was to be analyzed in the same way as any other infringement suit.  Moreover, noted the CAFC, the District Court had authority outside of the Hatch-Waxman Act in general principles of equity governing injunctions.  The District Court, according to the CAFC, had the authority to enforce its injunction through contempt proceedings, and nothing in the Hatch-Waxman Act ran contrary to this.

Additionally, while the CAFC recognized that it had previously cautioned against contempt proceedings of a summary nature where expert and other testimony would be helpful, such as in an infringement determination, it noted that such caution applied where an alleged infringer made a "good faith effort to modify" a prior infringing product.  In this case, however, the lower court concluded that Apotex's decision to have Nu-Pharm file the second ANDA was nothing more than a "subterfuge intended to give Apotex a crack at another district judge" and a more favorable ruling.  The CAFC declined to disturb that finding, and concluded that it was not an abuse of discretion on the part of the lower court to address issues of infringement related to the Nu-Pharm ANDA in a contempt proceeding.

Moreover, the CAFC, in applying its two part test, affirmed the lower court's finding that the subject of the Nu-Pharm ANDA was an infringing product, and that the extension of the injunction to include this product was not an abuse of discretion.  According to the first part of the two part test, the District Court must address whether a contempt proceeding is the proper forum for addressing infringement of the design-around, including an assessment of whether there is more than a colorable difference between the original and new products such that there are substantial issues to be tried.  The CAFC found that the lower court, which carefully reviewed the evidence presented, did not abuse its discretion in determining that there was no colorable difference the two products and that contempt proceedings were appropriate.  In the second part of the two part test, the lower court must then engage in an infringement determination.  Here, the CAFC found, in light of all the evidence, that the lower court did not clearly err in this regard.

With regard to the ultimate finding of contempt, however, the CAFC reversed the District Court, finding an error of law in the lower court's interpretation of the original injunction to include the mere act of filing an ANDA.  The original injunction, noted the CAFC, was limited to commercial acts within the U.S., and as it was undisputed that Apotex's design-around activities all occurred outside of the U.S., Apotex had not violated the injunction.  In short, while the CAFC concluded that the Nu-Pharm ANDA filing was an act of infringement, it was not a violation of the injunction, and the lower court had erred in misinterpreting the injunction as excluding acts beyond its plain terms.

Dissenting-in-part, Judge Dyk asserted that the contempt proceedings were inappropriate as there was "fair ground of doubt" as to whether the injunction applied.  Specifically, because the original injunction did not preclude the filing of an ANDA, argued Judge Dyk, there was a "fair ground of doubt" as to whether Apotex's conduct was wrongful, summary contempt proceedings were therefore inappropriate, and the majority's use of the "colorable difference" test was a too narrow an application of the more general "fair ground of doubt" test.  In a lengthy footnote, the majority countered the dissent by noting that Judge Dyk failed to identify any doubt that would require full litigation rather than a summary proceeding, and more particularly, what was doubtful about the determination that the Nu-Pharm ANDA did not fall within the injunction.  Summary determination was appropriate, countered the majority, as there was no doubt in either the infringement determination or the determination that an ANDA filing was outside of the scope of the original injunction.  The dissent's approach of requiring full litigation on infringement, rather than a contempt proceeding, according to the majority, would serve neither Apotex's due process interests nor judicial economy where the ultimate determination was that the filing of the ANDA was not a violation of the injunction.

Abbott Labs. v. Torpharm, Inc. (Fed. Cir. 2007)
Panel: Chief Judge Michel, Circuit Judge Dyk, and District Judge Otero
Opinion by Chief Judge Michel; opinion concurring-in-part and dissenting-in-part by Circuit Judge Dyk

Additional information regarding this case can be found at Patently-O and the Orange Book Blog.

Schwarz Pharma, Inc. v. Paddock Labs., Inc. (Fed. Cir. 2007)

    By Kevin E. Noonan --

In Schwarz Pharma, Inc. v. Paddock Labs., Inc., the Federal Circuit affirmed a District Court determination that infringement under the doctrine of equivalents was precluded by prosecution history estoppel, and decided whether a patentee is an indispensable party to confer standing on the exclusive licensee.

Schwarz Pharma and its corporate parent, the German company Schwarz Pharma AG, are the exclusive licensees of U.S. Patent No. 4,743,450, owned by Warner-Lambert Co.  The patent relates to Angiotensin Converting Enzyme (ACE) inhibitors combined with stabilizers (to prevent degradation) for treating hypertension, marketed by Schwarz Pharma as Univasc®.  Specifically, the '450 patent teaches use of an alkali or alkaline earth metal carbonate to inhibit cyclization and discoloration.

Claim 1 of the '450 patent reads as follows:

A pharmaceutical composition which contains:
    (a) a drug component which comprises a suitable amount of an ACE inhibitor which is susceptible to cyclization, hydrolysis, and discoloration,
    (b) a suitable amount of an alkali or alkaline earth metal carbonate to inhibit cyclization and discoloration, and
    (c) a suitable amount of a saccharide to inhibit hydrolysis.

The suit was initiated in response to a Paragraph IV certification by Paddock as part of its ANDA submission to the FDA for approval of its moexipril hydrochloride (an ACE inhibitor; "MH") and magnesium oxide ("MgO") formulation.  The parties stipulated that Paddock's formulation did not literally infringe the '450 patent claims.  The District Court granted Paddock's motion for summary judgment that prosecution history estoppel precluded infringement under the doctrine of equivalents.  Specifically, independent claim 1 as filed recited "metal containing stabilizer" and independent claim 16 (a method claim) recited "an alkali or alkaline earth-metal salt."  Both were amended to recite "an alkali or alkaline each metal carbonate," and the District Court held that the estoppel raised by that amendment precluded Paddock's MgO-containing formulation from infringing the composition or method claims.

The Federal Circuit affirmed in an opinion written by Judge Lourie and joined by Judges Michel and Moore.  As an initial matter, the Federal Circuit addressed Paddock's jurisdictional objection that Schwarz Pharma did not have standing to appeal in its own right.  The patentee, Warner-Lambert, did not appeal (although it did join the Schwarz Pharma licensees in suing at the District Court).  The question was whether Schwarz Pharma had standing to appeal in its own name without participation of the patentee.  It is certainly possible to see why a patentee might have a different perspective than its licensee, even an exclusive licensee, on whether an appeal was desirable.  In view of the propensity for the Federal Circuit to creatively construe claims, for example, a patentee might be content to exit the litigation with its claims relatively intact based on the District Court's claim construction.  This is particularly the case where under the District Court's construction the licensee's activities remain within the scope of the construed claims.  On the other hand, under these circumstances a licensee might have no disincentive to appeal, since reversal would provide it with a victory in the infringement action, and further construction of the claims by the Federal Circuit, or invalidation of the patent claims, could free it from its obligations under the license.

Schwarz Pharma made the distinction between the requirement for constitutional standing and prudential standing; the latter, according to Schwarz Pharma, is important in the District Court case to prevent an accused infringer from being subject to multiple lawsuits for the same accused infringing activities.  No such concerns are implicated on appeal, and constitutional standing, which Schwarz Pharma asserts it possesses, is thus sufficient.

The Federal Circuit, saying the issue was one of first impression, held that the concerns behind the prudential requirement that a patentee must be joined to avoid the risk of multiple suits by different plaintiffs (the licensee and the patentee, separately) against the same defendant for the same allegedly-infringing acts did not apply on appeal.  That risk did not exist on appeal, because the patentee (Warner-Lambert) would be bound by the determination of the District Court as modified vel non on appeal.  Moreover, another reason for compelling joinder of the patentee below is to protect the patentee from the risk of having its patent invalidated without the opportunity to participate, another consideration that does not apply (the Federal Circuit neglecting its own claim construction jurisprudence and the effects it can have on a patentee's property rights).  The CAFC also asserted as a basis for its holding that Schwarz Pharma, as plaintiff, was entitled to appeal decisions by the District Court adverse to its interests.  However, in making its decision to permit Schwarz Pharma to appeal without joinder by Warner-Lambert, the Federal Circuit chose to value the risk to the accused infringer, and the interests of the licensee, over the patentee's (legitimate) concerns for its patent rights.

On the merits, Schwarz Pharma argued that prosecution history estoppel did not preclude infringement under the doctrine of equivalents because the patentee "never claimed compositions or processes involving MgO."  The specification, according to Schwarz Pharma, supported an interpretation of the terms "metal containing stabilizer" and "alkali or alkaline earth metal salt" to mean only alkali or alkaline earth metal cations and carbonate, borate, or silicate anions, and thus MgO never fell within the scope of the original claims.  Alternatively, Schwarz Pharma argued that there were genuine issues of material fact regarding whether MgO was a foreseeable equivalent of an alkali or alkaline earth metal carbonate, and that there was no more than a tangential relationship of the claim limitation and the MgO equivalent.

The Federal Circuit disagreed, finding that the specification disclosed more broadly than Schwarz Pharma contended, and that the plain meaning of "metal containing stabilizer" and "alkali or alkaline earth metal salt" encompassed MgO; thus, amendment of the independent claims to recite "alkaline earth metal carbonate" raised an estoppel for all foreseeable equivalents relinquished by the amendment.  The CAFC found that the amendments were made in response to an obviousness rejection and thus were presumptively made for reasons relating to patentability.  The Federal Circuit also rejected Schwarz Pharma's contention that while MgO was known, it was not known to stabilize ACE inhibitors from the type of degradation disclosed in the '450 patent.  Finally, the CAFC considered Schwarz Pharma's "tangential relation" argument to mean that rejection over the asserted reference could have been overcome without amendment.  The Federal Circuit called this argument irrelevant and merely speculative, and placed upon Schwarz Pharma (as licensee) the consequences of the patentees decisions during prosecution, consistent with more than a decade of Federal Circuit jurisprudence (see Sage Products, Inc. v. Devon Indus., Inc.).  The Federal Circuit thus found no reason to disturb the District Court's judgment below.

Schwarz Pharma, Inc. v. Paddock Labs., Inc. (Fed. Cir. 2007)
Panel: Chief Judge Michel and Circuit Judges Lourie and Moore
Opinion by Circuit Judge Lourie

Additional information regarding this case can be found at Patently-O and the Orange Book Blog.