By Kevin E. Noonan --
The Federal Circuit and the Supreme Court spent an inordinate amount of time wrestling with each of their conceptions of the scope and application of the doctrine of equivalents a dozen years ago, coming to an accommodation in the last of the Federal Circuit's decisions in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. (Fed. Cir. 2007). In Intendis GmbH v. Glenmark Pharmaceuticals Inc., USA the Federal Circuit demonstrated the resulting equipoise in affirming a district court's determination that the doctrine applied to an accused infringing generic formulation.
The case involved ANDA litigation between the parties over Orange Book Listed U.S. Patent No. 6,534,070 directed to Finacea® Gel, a topical medication for various skin disorders. This product is a formulation comprising 15% by weight azelaic acid and excipients including triglycerides and lecithin provided as a hydrogel. Claim 1 of the '070 patent at issue in this litigation reads as follows:
1. A composition that comprises:
(i) azelaic acid as a therapeutically active ingredient in a concentration of 5 to 20% by weight,
(iii) at least one triacylglyceride in a concentration of 0.5 to 5% by weight,
(iv) propylene glycol, and
(v) at least one polysorbate, in an aqueous phase that further comprises water and salts, and the composition further comprises
(ii) at least one polyacrylic acid, and (vi) lecithin,
wherein the composition is in the form of a hydrogel. (emphases in opinion).
The accused infringing article that was the subject of Glenmark's ANDA was a 15% azelaic acid formulation where the ANDA formulation substituted isopropyl myristate for the combination of lecithin and triglyceride, which substitution Glenmark contended was non-infringing. The District Court found the claims not invalid for obviousness and infringed under the doctrine of equivalents (DOE). The District Court used the "function-way-result" test to find DOE infringement, and rejected Glenmark's arguments that 1) if infringing the claims would encompass the prior art, and 2) that DOE infringement was marred by prosecution history estoppel. The District Court also rejected Glenmark's validity challenge for obviousness, based on failure to show motivation to combine the asserted prior art references and failure to show a reasonable expectation of success. In addition, the District Court found that the objective indicia, including unexpected results and commercial success, "weighed in favor of non-obviousness."
The Federal Circuit affirmed, in an opinion by Judge Moore joined by Chief Judge Prost and Judge Taranto. With regard to DOE infringement, the panel applied the "clear error" standard appropriate for questions of fact in a bench trial, citing Allergan, Inc. v. Sandoz Inc., 796 F.3d 1293, 1311 (Fed. Cir. 2015). Although there was no objection by either party to the District Court using the function-way-result test for determining whether there was infringement under the doctrine of equivalents, Glenmark contended that the District Court erred in its application of the "function" prong (and the opinion expressly points out that the question of the substantiality vel non of the differences in chemical structure between isopropyl myristate, triglycerides, and lecithin was not before it). The District Court found that isopropyl myristate in Glenmark's formulation had the same function as the combination of lecithin and triglyceride in the claimed formulation, i.e., to enhance azelaic acid's penetration into the skin, based on expert testimony and statements in Glenmark's ANDA itself. For the "way" prong, the District Court found that Glenmark's isopropyl myristate component worked in substantially the same way as the patent combination of lecithin and triglyceride, "by disrupting the lipids in the skin's outermost layer, known as the stratum corneum." Finally, the District Court found that use of isopropyl myristate in Glenmark's formulation produced substantially the same result as the combination of lecithin and triglyceride in the claimed formulation, so that "a therapeutically effective azelaic acid composition  is able to penetrate the skin in order to deliver the active ingredient."
Glenmark's argument against these factual conclusions was that the District Court erred in finding that the combination of lecithin and triglyceride acted as skin penetration enhancers. In support of this argument Glenmark asserted that the '070 patent itself was silent on this question (which was "fatal to Intendis' infringement case") as well as evidence from Finacea's NDA (which characterized lecithin as an emulsifier and triglyceride as an emollient) and the absence of any scientific literature support for skin penetration-enhancing properties of these compounds or their combination.
The Federal Circuit rejected this argument, stating that its cases did not require a patentee to establish the mechanism through which a claimed invention operated, in favor of recourse to how the ordinarily skilled artisan would understand the specification and claims. Instead of being confined to the intrinsic record, according to the opinion, "[t]he relevant inquiry is what the claim element's function in the claimed composition is to one of skill in the art, and a fact finder may rely on extrinsic evidence in making this factual determination," citing Zenith Labs., Inc. v. Bristol-Myers Squibb Co., 19 F.3d 1418, 1425 (Fed. Cir. 1994). In addition, the panel said that it was "fatal to Glenmark's argument" that its own ANDA contained statements "repeatedly referring to the claimed excipients (triglyceride and lecithin) as penetration enhancers." (And somewhat amusingly, the opinion cited "seemingly extemporaneous arguments" during oral argument in the case where counsel asserted that any such statements in Glenmark's FDA filings were "a 'guess' and 'wrong.'")
Turning to the question of whether the District Court's interpretation of the claims and the equivalence of isopropyl myristate with lecithin and triglyceride would "encompass the prior art," the opinion cites DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1322 (Fed. Cir. 2009), and Ultra-Tex Surfaces, Inc. v. Hill Bros. Chem. Co., 204 F.3d 1360, 1364 (Fed. Cir. 2000), that making this determination requires a two-prong analysis. First, the court should craft a "hypothetical" claim that literally ensnares the accused infringing article. Second, the court should determine whether that hypothetical claim is patentable over the prior art or record; note that the patentee bears burden of establishing patentability of this hypothetical claim. In performing the hypothetical claim analysis, the District Court included isopropyl myristate as an alternative expressly recited in the claim; unfortunately for Glenmark, the art it asserted disclosed dimethyl sulfoxide as a penetration enhancer and not isopropyl myristate, lecithin, or triglyceride.
On appeal Glenmark argued that the District Court erred by crafting a hypothetical claim that was narrower than the actual claims at issue, and that the Court should have created a hypothetical claim that recited any penetration enhancer (which would have ensnared the art disclosing DMSO). The Federal Circuit rejected this criticism, stating that "[t]he district court's infringement finding was that the excipient in Glenmark's product (isopropyl myristate) was equivalent to the claimed excipients (lecithin and triglycerides); it was not a finding that any penetration enhancer would be equivalent to the claimed excipients," citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 609 (1950). Because Glenmark challenged the District Court's choice of hypothetical claim and not its conclusion that the claims would be patentable, the Federal Circuit found no reversible error in the lower court's factual findings.
The panel also rejected Glenmark's third argument on appeal, that prosecution history estoppel barred application of the doctrine of equivalents to these claims. The basis for Glenmark's argument was that, during prosecution, the examiner objected to language in two dependent claims because this language could be interpreted to result in formulations having no lecithin (concentrations of "up to 1%" and "up to 3%" could include 0%, i.e., none). Applicants argued that this interpretation was inconsistent with dependency on claim 1, which affirmatively recited that the formulation contained lecithin (albeit without specifying a particular amount). In addition, however, these dependent claims were amended to recited concentrations of "from more than 0 to 1%" or "from more than 0 to 3%" to overcome the examiner's rejections and Glenmark argued that prosecution history estoppel should therefore apply to claim 1. The District Court rejected Glenmark's argument that these amendments amounted to disclaimer and the Federal Circuit (reviewing this determination de novo) agreed, stating that it could find "no clear and unmistakable surrender of subject matter" as required, inter alia, by Deering Precision Instruments, LLC v. Vector Distrib. Sys., Inc., 347 F.3d 1314, 1326 (Fed. Cir. 2003). And because the amendments did not narrow the scope of the dependent claims, the panel agreed that these were "clarifying" amendments that did not raise prosecution history estoppel against asserted claim 1.
Finally, the opinion also rejected Glenmark's argument that claim 1 of the '070 patent was obvious. The asserted prior art ("previously-marketed Skinoren® cream" combined with references disclosing formulations comprising the claimed excipients and art disclosing azelaic acid formulations) did not render the claimed compositions obvious due to "certain undesirable qualities" of the prior art Skinoren® cream that would have led the skilled artisan to develop a "different dosage form given the market forces and deficiencies of the prior art formulation." Although the District Court acknowledged that this art would have motivated the skilled worker to pursue hydrogel formulations like the claimed invention, the Court did not find any motivation to use the claimed lecithin and triglyceride excipients. And the District Court also found that even if the art could be viewed a providing the required degree of motivation to combine the art to arrive at the invention claimed in the '070 patent there was insufficient likelihood of success to support an obviousness determination. The Federal Circuit disagreed with Glenmark's challenges to the District Court's determinations (reciting and dismissing them cursorily) and upheld the District Court's conclusion that the claims were not obvious.
Intendis GmbH v. Glenmark Pharmaceuticals Inc., USA (Fed. Cir. 2016)
Panel: Chief Judge Prost and Circuit Judges Moore and Taranto
Opinion by Circuit Judge Moore