Patent Docs

Astellas US LLC v. Hospira, Inc. (Fed. Cir. 2022)

By Kevin E. Noonan --

A change in the weather is known to be extreme
But what's the sense of changing horses in midstream?
I'm going out of my mind, oh, oh
With a pain that stops and starts
Like a corkscrew to my heart
Ever since we've been apart

"You're a Big Girl Now," Blood on the Tracks, Bob Dylan

In perhaps one of his most infelicitous lyrics* Bob Dylan inserted the adage that it is unwise to change horses in midstream.  This lesson comes to mind with regard to the Federal Circuit's decision late last year regarding an attempt to pursue a new theory of infringement just weeks before trial would commence (which attempt failed) in Astellas US LLC v. Hospira, Inc.

The case involved ANDA litigation brought by Gilead Sciences, Inc., Astellas US LLC and Astellas Pharma US, Inc. against Hospira for infringement of U.S. Patent Nos. 8,106,183; RE47,301; and 8,524,883 claiming a particular polymorph (termed Form A, a monohydrate) of regadenoson, an A2A adenosine receptor agonist that is a coronary vasodilator used to mimic cardiac stress and sold as Lexiscan®.  The formula for Hospira's generic regadenoson contained Form G as its active pharmaceutical ingredient (API) that would not infringe Astellas's asserted claim (the basis for Hospira's Paragraph IV certification), made by a process converting crude regadenoson to Form F (another polymorph) to Form G.  Plaintiff's initial theory of the case was that Hospira's generic drug nevertheless infringed the asserted claims, because Form A was made inadvertently by Hospira's third party supplier of an intermediate product and consequently the Form A polymorph was incorporated into Hospira's final generic product (on the basis that when these compounds "are exposed to a sufficient amount of water, including water in the air . . . and in reagents, they will convert to Form A").  In response to Hospira amending the Drug Master File (DMF) portion of its ANDA prior to trial (in an attempt to make Astellas's infringement showing harder to establish, wherein the new DMF recited that its manufacturing process had been optimized to "limit the presence of water"), Astellas asserted an alternative theory alleging that Form A arose as part of Hospira's compounding process in making its generic regadenoson.

The District Court granted Hospira's motion to strike Astellas's newly presented infringement contentions and expert testimony and evidence, with the case going to trial on Astellas's original infringement theory.  The District Court found Hospira did not infringe according to Astellas's original infringement contentions, and Astellas appealed solely on the issue of whether the District Court's preventing their assertion of their alternative infringement theory and contentions and expert evidence associated therewith was an abuse of discretion.

The Federal Circuit ruled that the District Court had not abused its discretion and affirmed the judgment in favor of Hospira, in an opinion by Judge Dyk joined by Judges Reyna and Cunningham.  The opinion notes that the District Court granted Astellas extra fact discovery in response to Hospira's change in its ANDA, but in addition to taking this discovery, Astellas submitted its new infringement contentions and expert evidence related to these contentions.  On the procedural issue of whether Astellas's motion was untimely, the Court recited the circumstances the panel relied upon in finding no abuse of discretion by the District Court.  These included testimony by Astellas's expert in the initial discovery phase that he was offering no opinion regarding whether Form A was made during Hospira's compounding process as well as several timing issues.  These included that Astellas proffered its alternative theory a year after the close of fact discovery and six months after expert discovery closed, and waited 14 months after Hospira's document disclosure, six months after learning of Hospira's ANDA change and two months after receiving Hospira's actual ANDA amendments.  In addition, Astellas waited "more than a month" after the District Court's grant of supplemental discovery prompted by Hospira's ANDA change.  Under these circumstances, the Federal Circuit stated that:

There was no reason, other than Astellas's own litigation choices, that the compounding infringement theory could not have been asserted earlier.

This is not a case where Astellas relied on new information disclosed in the ANDA amendment to craft a new theory of infringement.  Instead, Astellas simply decided that the ANDA amendment would make it harder to prove its original infringement theory and decided to try a new theory related to a process not changed by the amendment.

Based in a supplementary discovery order the District Court had issued against another defendant (who later settled) in this case who had amended its ANDA, the Federal Circuit considered the supplementary discovery order here to have been limited to Hospira's changes to its ANDA and was not broad enough to be used to develop Astellas's alternative infringement theories or proffer expert evidence in support thereof, as well as representations by Astellas to the District Court regarding the limited extent of this discovery.  On this issue the Federal Circuit based its affirmance of the District Court striking Astellas's alternative infringement contention and expert evidence on  the "great deference . . . given to a district court's interpretation of its own order," citing WRS, Inc. v. Plaza Entertainment, Inc., 402 F.3d 424 (3rd Cir. 2005).

The Federal Circuit similarly rejected Astellas's arguments that, timely or not, it was an abuse of the District Court's discretion to exclude its alternative theory of infringement.  Applying Third Circuit law, the Court considered whether Astellas had not satisfied the factors required in the Third Circuit under Meyers v. Pennypack Woods Home Ownership Assn, 559 F.2d 894 (3rd Cir. 1977):

(1) "the prejudice or surprise in fact of the party against whom the excluded witnesses would have testified" or the excluded evidence would have been offered; (2) "the ability of that party to cure the prejudice"; (3) the extent to which allowing such witnesses or evidence would "disrupt the orderly and efficient trial of the case or of other cases in the court"; (4) any "bad faith or willfulness in failing to comply with the court's order"; and (5) the importance of the excluded evidence.

Here, the Federal Circuit held that, while there was no finding under factor (4) of bad faith, the other factors supported the exercise of the District Court's discretion to preclude Astellas's alternative infringement theory.  These included clear evidence that Hospira was surprised by the alternative theory and was prejudiced thereby in view of the time remaining before trial, particularly in view of Astellas's expert's earlier testimony that he had no opinion regarding whether the Form A polymorph arose in Hospira's compounding process and there being insufficient time to perform the testing necessary to show that this conversion did not take place.  The Court also considered the prejudice to other parties to the litigation if the District Court postponed trial long enough for Hospira to complete this testing.  The opinion states that regarding factor (3) Astellas had not presented any persuasive evidence that the District Court erred in finding disruption of the court's calendar, and that Astellas had not shown that the evidence was sufficiently important to satisfy factor (5) (the opinion voicing reasons why the panel was not convinced that the excluded evidence would have been helpful for Astellas in establishing infringement).

Ultimately the decision came down to the District Court's discretion, and the Federal Circuit was unwilling to second guess that court absent more compelling evidence than Astellas was able to provide.

Astellas US LLC v. Hospira, Inc. (Fed. Cir. 2022)
Nonprecedential disposition
Panel: Circuit Judges Dyk, Reyna, and Cunningham
Opinion by Circuit Judge Dyk

* Of course he also wrote this lyric on that album, so maybe it was just a phase:

They say I shot a man named Gray
And took his wife to Italy
She inherited a million bucks
And when she died they came to me
Can I help it if I'm lucky?

"Idiot Wind"

Genentech, Inc. v. Sandoz Inc. (Fed. Cir. 2022)

By Kevin E. Noonan --

The Federal Circuit recently affirmed a district court judgment of invalidity for obviousness and for noninfringement for a series of patents challenged in ANDA litigation, in Genentech Inc. v. Sandoz Inc.  In doing so, a majority of the panel illustrated perhaps unintentionally how initial impressions regarding the issues before the Court can influence the final outcome in circumstances where the Federal Circuit is compelled to give deference to the lower court.

These issues arose in ANDA litigation brought by Genentech and InterMune against ANDA filer Sandoz and its supplier LEK Pharmaceuticals.  The drug at issue was pirfenidone used to treat idiopathic pulmonary fibrosis (IPF), an incurable, chronic, irreversible disease whose patients have a 2- to 5-year average survival length.  There is one other drug, nintedanib that has been approved for treating IPF and the two drugs split the marker evenly (approximately).  Pirfenidone had a long development time (more than 30 years) before obtaining orphan drug approval in 2004 and was approved for IPF treatment in 2014 as Esbriet®, the drug sold by Genentech and the proximal subject of this lawsuit.

Unlike most ANDA suits, the patents at issue here were not directed at the drug, formulations thereof, or methods of treatment, but rather towards administration methods for ameliorating or avoiding certain drug side effects.  There were two categories of patents at issue in the ANDA litigation and this appeal.  The first, termed the "LFT patents," were directed at administration methods for patients having liver abnormalities as detected by biomarker alterations.  These patents were U.S. Patent Nos. 7,566,729 (the "'729 patent"), 7,635,707 (the "'707 patent"), 8,592,462 (the "'462 patent"), and 8,609,701 (the "'701 patent") and the claims at issue are set forth in this table:

The asserted LFT patent claims:

The opinion summarizes the claimed subject matter into five categories:  administration methods that (1) temporarily reduce the administered dose followed by return to the "full" therapeutic dose; (2) maintain the full administered dose; (3) reduce the dose (and maintain the reduced dose); (4) discontinue administration for a week and then return to the full therapeutic dose; and (5) discontinue administration for a week and then administer a reduced dose.

Infringement was assessed as to these claims based on Sandoz's proposed label, which recited how the drug should be administered to patients showing sufficiently severe liver abnormalities:

Dosage modifications or interruptions may also be necessary when liver enzyme and bilirubin elevations are exhibited.  For liver enzyme elevations, modify the dosage as follows:

If a patient exhibits >3 but ≤5 x the upper limit of normal (ULN) ALT and/or AST without symptoms or hyperbilirubinemia after starting pirfenidone tablets therapy:

• Discontinue confounding medications, exclude other causes, and monitor the patient closely.
• Repeat liver chemistry tests as clinically indicated.
• The full daily dosage may be maintained, if clinically appropriate, or reduced or interrupted (e.g., until liver chemistry tests are within normal limits) with subsequent re-titration to the full dosage as tolerated.

wherein the italicized language was particularly relevant to Genentech's allegations sounding in inducement of infringement under 35 U.S.C. § 271(b).

Sandoz asserted invalidity for obviousness over three references:  a scientific journal article by Azuma related to a clinical trial of pirfenidone; a label for Shionogi's pirfenidone product approved in Japan, Pirespa®; and "known, standard medical practices."  The Federal Circuit's opinion characterized the teachings of the Azuma reference to specify a "stepwise" reduction in pirfenidone administration up to and including discontinuing the drug in response to severity of liver-associated side effects, and that the Pirespa® label specified discontinuing the drug.  The District Court had found that four of the five liver-associated side-effect induced alterations in pirfenidone administration were disclosed in the Pirespa® label, and furthermore found that Genentech's asserted claims in the LFT patents were invalid for obviousness in light of the references relied upon by Sandoz.

Sandoz also argued that there was no specific intent to induce infringement and thus its label did not induce infringement.

The other category of patents asserted by Genentech were directed to adverse interactions with another drug, fluvoxamine (termed "the DDI patents").  Fluvoxamine inhibits an enzyme, CYP1A2, that is involved in liver detoxification and metabolism of drugs including pirfenidone, where administration of pirfenidone to a patient taking fluvoxamine would result in what the opinion calls "supertherapeutic" drug levels in the patient's body.  The claims at issue for these patents were as follows:

The opinion summarizes the instructions in Sandoz's label (which forms the basis for Genentech's direct (literal) infringement allegations) as directing that fluvoxamine administration be discontinued prior to administering pirfenidone or reducing the amount of pirfenidone administered to a specified dose (267mg/3 time per day).  The District Court found this label to be insufficient to support Genentech's direct infringement allegations by a preponderance of the evidence because, despite Genentech showing that the label "encourages, recommends, or promotes an infringing use" Genentech failed to show that "such an infringement will in fact occur" (which seems at least odd in view of the function of the label as enshrining FDA determinations regarding how an approved drug can be safely and effectively used).  The basis for the District Court's decision was that Genentech failed to show that any patient would be prescribed both drugs to be administered together or at the same time, a prohibition that if it deemed necessary, the FDA would be capable of requiring, particularly insofar as the label expressly stated that:

The concomitant administration of pirfenidone and fluvoxamine or other strong CYP1A2 inhibitors (e.g., enoxacin) is not recommended because it significantly increases exposure to pirfenidone.  . . .   Use of fluvoxamine or other strong CYP1A2 inhibitors should be discontinued prior to administration of pirfenidone and avoided during pirfenidone treatment.  In the event that fluvoxamine or other strong CYP1A2 inhibitors are the only drug of choice, dosage reductions are recommended.  Monitor for adverse reactions and consider discontinuation of pirfenidone as needed [emphasis added].

The Federal Circuit affirmed, in an opinion by Judge Lourie who was joined by Judge Prost; Judge Newman dissented without an opinion (perhaps getting to the point where the Judge is not willing to waste her judicial breath in cases where her opinion has proven to be unavailing).  With regard to the District Court's finding that the asserted claims of the LFT patents were obvious, the majority displayed the mindset brought to the question by stating that "it is worth noting our initial perception that, as the district court noted, varying doses in response to the occurrence of side effects would seem to be a well-established, hence obvious, practice.  Thus, claiming it as an invention would appear to be at best a long shot" before stating that, like the District Court, the Federal Circuit would give the matter "careful scrutiny."  Perhaps not surprisingly in view of the majority's preconceptions, the Court agreed with Sandoz that these claims were obvious, despite Genentech's objections regarding what Azuma and the Pirespa® label taught to the skilled artisan (which as questions of fact the District Court's findings were due "clear error" deference by the Federal Circuit).  The District Court's findings as to the teachings of the asserted prior art were supported in the majority's view by "record evidence" and expert testimony.  Finally, the majority relied upon the Federal Circuit's rubric following KSR v. Teleflex that "weak secondary considerations [as the District Court and the majority considered Genentech's secondary considerations arguments to be] generally do not overcome a strong prima facie case of obviousness," citing W. Union Co. v. MoneyGram Payment Sys., Inc., 626 F.3d 1361, 1371 (Fed. Cir. 2010).  These arguments included skepticism in the art and long-felt but unmet need; none of these were sufficiently established by Genentech in the majority's view nor had Genentech established that the District Court clearly erred in arriving at its conclusions in this regard.

Having affirmed the District Court's obviousness determination, the panel did not reach the District Court's non-infringement decision.

With regard to the DDI patents, despite citing precedent that "a patentee does not need to prove an actual past instance of direct infringement by a physician to establish infringement in an ANDA case," Vanda Pharms. Inc. v. W.-Ward Pharms. Int'l Ltd., 887 F.3d 1117, 1129–30 (Fed. Cir. 2018), the majority nevertheless opined that the question of direct infringement requires "'consideration of all the relevant evidence,' including the proposed label's instructions and physician practice," citing Ferring v. Watson Lab'ys, 764 F.3d 1401, 1408 (Fed. Cir. 2014), because "past conduct is relevant to what will happen in the future" (a position the opinion acknowledges Sandoz argued).  The majority's affirmance relied upon expert witness testimony that the two drugs (pirfenidone and fluvoxamine) would not be administered together or at the same time based on "decades of treating IPF patients" (which testimony is at least curious in view of the 2014 approval date of Genentech's Esbriet® product) and that there was an alternative product on the market (nintedanib) that the physicians would prescribe instead.  The majority characterized as speculation without evidentiary support Genentech's argument that instructions regarding co-administration were important enough that the FDA included them on Sandoz's label, and in any event were not enough to sufficiently support Genentech's direct infringement arguments according to the majority.  (And in what appears to be something of a "Hail Mary" argument, the majority rejected Genentech's assertion that fluvoxamine can be used to treat COVID-19 infection in an IPF patient as speculation.)

Based on the totality of the evidence relied upon by the District Court, the Federal Circuit majority affirmed the District Court's finding that Sandoz would not necessarily directly infringe the claims of Genentech's DDI patents.

Genentech, Inc. v. Sandoz Inc. (Fed. Cir. 2022)
Panel: Circui9t Judges Newman, Lourie, and Prost
Opinion by Circuit Judge Lourie; dissent without opinion by Circuit Judge Newman

Alpek Polyester, S.A. v. Polymetrix AG (Fed. Cir. 2021)

By Kevin E. Noonan --

While the Federal Circuit has patent law as its principal focus, as a U.S. Circuit Court of Appeals, questions come before the Court on more mundane, procedural matters (which, sometimes being dispositive, does not reduce their importance to the parties and occasionally the rest of us).  One such case was decided on December 16th in Alpek Polyester, S.A. v. Polymetrix AG (complicated, as should be evident from the caption, by involving non-US. parties and having putatively infringing activities arising both here and abroad).

The case arose over Polymetrix's asserted infringement of U.S. Patent Nos. 7,790,840, 7,868,125, and 7,192,545 owned by Alpek (a Mexican company) and exclusively licensed to co-Plaintiff DAK Americas LLC (a U.S. company), the patent claim being directed to methods for producing polyethylene terephthalate (PET) resins; because the matters on appeal were exclusively procedural there was no need in the opinion (or here) to delve into the scope of the claims any further.  Defendant Polymetrix is a Swiss company in the business of supplying equipment and engineering services for constructing plants for making PET resin (while not making the resin itself, i.e., it provides the means but not the product and thus did not itself practice the claimed methods).

The activity that prompted the lawsuit was Polymetrix contracting with a Polish company, Indorama Ventures Poland sp. z o.o. ("IVP") wherein Polymetrix equipped a manufacturing plant located in Wloclawek, Poland to run the patented process.  When the work was completed Polymetrix entered into a "commissioning" period during which the plant was tested (using the patented process to product PET resin); during this time Polymetrix retained ownership of the equipment and IVP withheld payment until the installation passed appropriate tests.

Jurisdiction arose in the U.S. when IVP sent to affiliates in the U.S. (Auriga Polymers and AlphaPet Inc.) samples of PET resin made in the Wloclawek plant using Polymetrix equipment to perform the patented process.  There were three instances of this importation, including one wherein an AlphaPet employee brought the sample into the country personally.  Alpek sued following these activities, alleging that Polymetrix induced infringement under 35 U.S.C. § 271(b) (the predicate literal infringement lying under the provisions of § 271(g)).  While the opinion references "a complicated and protracted international discovery process" that ensued, only three incidents were worthy of the Court's consideration.  The first involved failure of Defendant Polymetrix to disclose under Federal Rule of Civil Procedure 26 the identity of IVP's director, Mr. Saini (the relevance of this failure being Polymetrix's reliance on a declaration in support of a summary judgment motion at issue in this appeal).  Second was disputed testimony in a deposition (of a Rule 30(b)(6) witness representing Auriga) that Polymetrix owned the plant in Wloclawek, Poland, supporting Alpek's motion to amend its complaint to include an allegation of direct infringement under § 271(g).  The third and final discovery dispute involved an assertion of privilege by Polymetrix over an opinion of counsel concerning Alpek's infringement allegations, which Alpek alleged had been waived by disclosure to a potential corporate suitor.

Polymetrix filed a summary judgment motion that it did not infringe, which the District Court granted.  The District Court rejected Alpek's arguments that there were disputed issues of material fact, denied Alpek's motion to strike the Saini testimony due to failure to satisfy Rule 26 when Polymetrix did not identify him as someone with knowledge about the company and its activities, and held that the misstatement at deposition was inadmissible under Federal Rule of Evidence 602 because the witness lacked personal knowledge regarding importation of PET resin made in the Polish plant using the patented process.  The District Court also denied Alpek's motion to amend the complaint as being untimely.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges O'Malley and Stoll.  The opinion addresses the four arguments raised by Alpek on appeal:

• First, Alpek argues that the court abused its discretion by disregarding [the Rule 30(b)(6) witness's] admission that the July 17, 2014 sample was brought into the United States 'for Polymetrix' [arguing that the statement was admissible because the witness's testimony under Rule 30(b)(6) does not require personal knowledge to be admissible].

• Second, Alpek argues that the court erred by finding that Polymetrix did not ratify IVP's importation by using test results from the United States [by receiving and relying on test results it knew were produced by Auriga and AlphaPet in the U.S.]

• Third, Alpek argues that the court erred in failing to recognize fact disputes that stem from Polymetrix's ownership of the equipment under a Swedish law interpretation of the contract[ and]

• [F]ourth, Alpek argues that the court erred by declining to strike the Saini declaration upon which Polymetrix heavily relied to support its summary judgment motion [based on Federal Rule of Civil Procedure 37].

Polymetrix's counterargument was based on the causation prong of § 271(b), i.e., that its activities did not cause IVP to import into the U.S. PET resin samples for testing.  Regarding Alpek's first argument, Polymetrix contended that the witness misspoke due to misunderstanding the question (which the witness clarified at the time during subsequent testimony during the deposition).  The Federal Circuit, applying Eighth Circuit law appropriate for reviewing the District Court's decision here, noted that in the Eighth Circuit evidence to be considered on summary judgment must be "admissible evidence," citing Crews v. Monarch Fire Prot. Dist., 771 F.3d 1085, 1092 (8th Cir. 2014) (emphasis in original) (citing Nooner v. Norris, 594 F.3d 592, 603 (8th Cir. 2010).  Under the applicable abuse of discretion standard, the Federal Circuit found no abuse (noting that the witness did not testify at trial and "would not [have been] admissible at trial under Federal Rule of Evidence 801(d)(2)" nor Federal Rule of Civil Procedure 32(a)(3) relating to the testimony of an adverse party.  The opinion also distinguished seemingly contrary precedent in General Mills Operations, LLC v. Five Star Custom Foods, Ltd., 703 F.3d 1104, 1110 (8th Cir. 2013), because the disputed testimony was not by an adverse party's witness.  Finally, the Federal Circuit did not find Alpek's argument persuasive insofar as it relied on two words ("for Polymetrix") "excerpted from one question in one deposition in the larger context of a protracted discovery process that lasted years" and was asserted by Alpek for an inducement argument that was "contrary to the overwhelming majority of the evidence which demonstrates that Polymetrix had no knowledge or concern about where, when, or how IVP conducted performance tests."  In the panel's view the evidence showed the witness simply misspoke.  The Court found no genuine issue of material fact here that would justify the "delay and expense" of a trial.

Regarding Alpek's second argument, the Federal Circuit did not see any genuine issue of material fact on the evidence, which the Court considered to be supported only with "a conclusory assertion by [Alpek's] expert."  According to the opinion, the "overwhelming majority of the evidence" supported a finding that AlphaPet was not the source of the data relied upon by Polymetrix with regard to the performance of the Polish plant (including agreement with the District Court that Alpek blundered when it asserted that this data "match[ed] up almost exactly," the opinion stating that "If the AlphaPet test results were really the source of the data for Polymetrix's report, we can discern no reason why the two sets of data would not match up exactly" (emphases in opinion).

As for Alpek's third argument, the Federal Circuit agreed with the District Court that the details of Swedish contract law, asserted to support Alpek's contention that under that law Polymetrix was responsible for the activities in the Polish plant, were "inapposite."  "As a matter of American law," according to the opinion, 'the mere fact that Polymetrix owned the plant equipment is wholly insufficient for Alpek to meet its burden of proving that Polymetrix took active steps to induce IVP to infringe," citing MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 935–36 (2005), in support for this principle.

Finally, the Court rejected Alpek's fourth argument, based in part on the breadth of the District Court's discretion on discovery matters and enforcement of the Civil Procedure rules.  The Federal Circuit saw none of the surprise or prejudice the Rule was intended to prevent, in view of the "more than 1,000 documents produced during discovery" bearing the witness's name.

Having dispensed with the summary judgment portion of the appeal, the panel turned to the District Court's denial of Alpek's motion to amend its complaint.  Here the Court found no justification for Alpek's failure to file its motion by the deadline date the District Court had established, and the panel rejected Alpek's allegations that witness testimony adduced during a deposition that occurred after the deadline alerted it to the factual bases for the amended complaint, i.e., that Polymetrix was a literal infringer under § 271(g).  And Alpek's arguments, according to the opinion, "consist[ed] of mere disagreement with the magistrate judge's view of the facts."  Under these circumstances the Federal Circuit affirmed denial of Alpek's motion to amend.

The final issue considered by the Court was Alpek's motion to compel production of attorney opinion based on waiver due to disclosure to Polymetrix's corporate suitor.  The Court agreed with Polymetrix that the panel need not address the issue because it "has no bearing on the district court's summary judgment ruling."  The opinion notes that Alpek had the burden of showing that Polymetrix caused IVP's infringement of the patents-in-suit, while the opinion even if offered into evidence would only address Polymetrix' intent to induce infringement, citing Omega Patents, LLC v. CalAmp Corp., 920 F.3d 1337, 1352–53 (Fed. Cir. 2019).  Because the District Court's basis for granting summary judgment was Alpek's failure to establish Polymetrix's causation of IVP's asserted infringement, "the issue of intent did not factor into the district court's grant of summary judgment" according to the Court (emphasis in opinion).  This issue, in view of the Court's affirmance of the District Court's grant of summary judgment, was thus moot according to the panel.

Alpek Polyester, S.A. v. Polymetrix AG (Fed. Cir. 2021)
Nonprecedential disposition
Panel: Circuit Judges Lourie, O'Malley, and Stoll
Opinion by Circuit Judge Lourie

Jennewein Biotechnologie GmbH v. International Trade Commission (Fed. Cir. 2021)

By Kevin E. Noonan --

The International Trade Commission can more readily provide injunctive relief against an adjudged infringer than a district court, under appropriate conditions (i.e., with regard to an infringing product or a product made by infringing a claimed method).  In September, the Federal Circuit affirmed an exclusion order by the Commission in Jennewein Biotechnologie GmbH v. International Trade Commission (Glycosyn LLC joined as an Intervenor based on its patent being the basis for the exclusion order), based on importation of a product made by a patented method, which relied in part on an application of the doctrine of equivalents in establishing infringement (something that has become more common of late; see, e.g., Ajinomoto Co. v. International Trade Commission).

The matter arose when Glycosyn filed a complaint before the ITC under 19 U.S.C. § 1337 for importing milk oligosaccharaides (particularly, fucosyllactose or 2'-FL) made using methods claimed in its U.S. Patent No. 9,970,018.  Claim 1 is representative of the patented methods:

1.  A method for producing a fucosylated oligosaccharide in a bacterium, comprising providing an isolated E. coli bacterium comprising,
    (i)  a deletion or functional inactivation of an endogenous β-galactosidase gene;
    (ii)  an exogenous functional β-galactosidase gene comprising a detectable level of β-galactosidase activity that is reduced compared to that of a wildtype E. coli bacterium, wherein the level of β-galactosidase activity comprises between 0.05 and 200 units;
    (iii)  an inactivating mutation in a colanic acid synthesis gene; and
    (iv)  an exogenous lactose-accepting fucosyltransferase gene;
    culturing said bacterium in the presence of lactose;
and
    retrieving a fucosylated oligosaccharide from said bacterium or from a culture supernatant of said bacterium.

Relevant limitations were that the bacterium has an inactivated colonic acid synthase gene and that the endogenous β-galactosidase gene (lacZ) is deleted or inactivated and an exogenous lacZ gene had been added to produce low-level ("between 0.05 and 200 Miller units") β-galactosidase activity; this enzymatic activity would degrade residual lactose that would be difficult and expensive to eliminate in the final product, while being expressed at a level low enough not to "significantly diminish the intracellular lactose pool."

Important cell characteristics resulting from these genetic manipulations included: (1) an increased intracellular guanosine diphosphate (GDP)-fucose pool; (2) an increased intracellular lactose pool; and (3) a fucosyltransferase, resulting in an apparently delicate metabolic balance.

The basis for Glycosyn's ITC complaint was Jennewein's importing 2'-FL made by the process claimed in the '018 patent.  Two of the strains express lacZα and lacZΩ, two gene fragments that when expressed together produce active β-galactosidase, with expression of the lacZΩ fragment being under temperature regulatory control (i.e., the gene is expressed at 42°C but not at 30°C).

The ALJ construed the limitations "'β-galactosidase activity comprises between 0.05 and 200 units' to mean 'β-galactosidase activity is measurable at between exactly 0.05 and exactly [200] Miller Units, as defined in Miller'"; "functional β-galactosidase gene" to mean "a functional sequence of DNA that encodes β-galactosidase;" and the term "exogenous" to have its plain and ordinary meaning.  The ALJ did not impose any temporal limits on the claimed activity ("the claimed activity need only be met 'at some point in time'").  Under this construction, the ALJ held that the two accused strains that expressed the lacZα and lacZΩ fragments infringed while a third strain (that only expressed the lacZα fragment) and did not use lactose to produce 2'-FL did not have sufficient evidentiary findings to adjudicate whether it infringed or not.

The Commission reviewed the ALJ's findings and concluded that the two strains that expressed lacZα and lacZΩ fragments infringed under the doctrine of equivalents, and that the third, lacZα-expressing strain did not infringe.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Chen joined by Judges Lourie and Bryson.  The panel expressly rejected Jennewain's three arguments:

(1) [that] Jennewein's [two strains adjudged to infringe did not] satisfy the claim limitation requiring that "the level of β-galactosidase activity comprises between 0.05 and 200 units"; (2) [that] Jennewein's [two strains adjudged to infringe did not] satisfy the "exogenous functional β-galactosidase gene" claim limitation; and (3) that the ITC erred in holding that "the level of β-galactosidase activity comprises between 0.05 and 200 units" claim limitation does not require the β-galactosidase activity to occur "within the claimed range at substantially all times during 2'-FL production and retrieval."

As for Jennewein's first argument, the Federal Circuit assessed the Commission's decision under the substantial evidence standard appropriate for questions of fact such as infringement.  The panel held that the evidence presented to the Commission was sufficient under this standard to withstand Jennewein's appeal, and in particular that no negative control strain was needed when performing the Miller assay to determine β-galactosidase activity.  There was no evidence of "background" lactose being produced in these cells or that any other enzymatic pathway produced this sugar other than the combination of the lacZα and lacZΩ fragments to produce functional (albeit barely) β-galactosidase (and thus that there was nothing to control for), according to the Court.  The panel agreed that any β-galactosidase activity detected at the lower temperature (30°C) was due to "leakage" in the temperature control of lacZΩ fragment expression, according to unrebutted expert (Glycosyn's)) testimony as well as other controls performed as part of the Miller assay.

The Court also was not convinced by Jennewein's quantitative arguments that showed the two negative control strains having higher Miller values than the accused strains.  Because the negative control strains should only have "background" β-galactosidase activity levels these results were anomalous for the panel, leading them to conclude that these strains were "not valid" as negative controls.  That the two control strains had different Miller levels also suggested to the Court that there was something amiss.  (There were also communications between Jennewein and a third party hired to assess infringement that undercut Jennenwein's arguments in this regard, to the effect that the control strains were "not suitable.")

The Federal Circuit found that Jennewein's strains satisfied the "exogenous functional β-galactosidase gene limitations" under the substantial evidence standard, at least under the doctrine of equivalents.  Jennewein based its arguments on the endogenous nature of the lacZα β-galactosidase gene fragment but the Federal Circuit agreed with the Commission (supported by substantial evidence) that the (barely) functional β-galactosidase gene was exogenous because the lacZΩ fragment was exogenous.  (The lacZΩ fragment itself is exogenous to the E. coli genome, having originated according to the opinion in a prophage.)

Finally, the panel agreed with the Commission that there was no temporal aspect recited in the claims and rejected Jennewein's argument that the Commission erred by not requiring Glycosan to establish that "the modified bacterium's level of β-galactosidase activity be 'within the claimed range substantially throughout 2'-FL production and retrieval'" based on the Commission's claim construction.  In reaching this conclusion, the Federal Circuit reviewed the Commission's claim construction de novo because the Commission had relied solely on intrinsic evidence, using the rubrics set forth in Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc), finding no error.

Jennewein Biotechnologie GmbH v. International Trade Commission (Fed. Cir. 2021)
Panel: Circuit Judges Lourie, Bryson, and Chen
Opinion by Circuit Judge Chen

Bio-Rad Laboratories, Inc. v. International Trade Comm. (Fed. Cir. 2021)

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed imposition of an exclusion order under 19 U.S.C. § 1337 (Section 337 of the Tariff Act of 1930) by the Federal Trade Commission against 10X Genomyx (an intervenor in this appeal) over importation of patented microfluidic chips, in Bio-Rad Laboratories, Inc. v. International Trade Commission.  (10X Genomyx obtained a similar exclusion order against Bio-Rad in a case appealed last month; see "Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm".)

In this action, Bio-Rad filed a complaint against 10X Genomyx alleging that importation of certain microfluidics chips infringed claims of U.S. Patent Nos. 9,500,664, 9,636,682, and 9,649,635.  Representative claims set forth in the opinion are these:

The '664 patent:

1.  A system for forming a plurality of sample-containing droplets suspended in a back- ground fluid, comprising:
    a substrate having a bottom surface and a top surface;
    a sample well, a background fluid well, and a droplet well each having an upper region protruding from the top surface of the substrate;
    a network of channels formed in the bottom sur- face of the substrate and fluidically interconnecting the sample well, the background fluid well, and the droplet well; and
    a droplet generation region defined by the network of channels and configured to generate sample-containing droplets suspended in the background fluid;
    wherein the droplet generation region is de- fined by the intersection of a first channel, a second channel, and a third channel;
    wherein the first channel is configured to transport sample-containing fluid from the sample well to the droplet generation region, the second channel is configured to transport background fluid from the background fluid well to the droplet generation region, and the third channel is configured to transport sample-containing droplets from the droplet generation region to the droplet well; and
    wherein the substrate and the upper region of each well are injection molded as a single piece.

The '682 patent:

14.  A system for generating droplets, comprising:
    a device including a row of sample wells each configured to receive sample-containing fluid, a row of continuous-phase wells each configured to receive continuous-phase fluid, and a row of droplet wells, the device also including a corresponding channel network for each sample well, the channel network including a droplet-generation region and fluidically connecting the sample well to one of the continuous-phase wells and one of the droplet wells;
    a holder for the device;
    a gasket configured to be attached directly to the holder, such that the gasket extends over each sample well, each continuous-phase well, and each droplet well; and
    an instrument configured to
        (a) receive an assembly including the device, the holder, and the gasket,
        (b) engage the gasket with a manifold, and
        (c) apply positive pressure and/or negative pressure to the device via the manifold, such that sample-containing fluid flows from each sample well to the corresponding droplet-generation region, continuous-phase fluid flows from each continuous-phase well to the corresponding droplet-generation region, and sample-containing droplets flow from each droplet-generation region to the corresponding droplet well.

The '635 patent:

1.  A system to form and concentrate an emulsion, comprising:
    a device including a sample well configured to receive sample-containing fluid, a continuous-phase well configured to receive continuous-phase fluid, and a droplet well, the device also including a channel network having a first channel, a second channel, and third channel that meet one another in a droplet-generation region; and
    an instrument configured to operatively receive the device and to create
        (a)    a first pressure differential to drive sample- containing fluid from the sample well to the droplet-generation region via the first channel, continuous-phase fluid from the continuous-phase well to the droplet-generation region via the second channel, and sample-containing droplets from the droplet-generation region to the droplet well via the third channel, such that the droplet well collects an emulsion including sample- containing droplets disposed in continuous-phase fluid, and
        (b)    a second pressure differential to decrease a volume fraction of continuous-phase fluid in the emulsion, after the emulsion has been collected in the droplet well, by selectively driving continuous-phase fluid, relative to sample-containing droplets, from the droplet, from the droplet well via the third.

(wherein the text in italics and boldface is the claim term at issue).

The technology at issue was related to microfluidics chips for performing bioanalytic assays using small amounts of sample contained in microdroplets, defined in the opinion as "a contiguous amount of one type of fluid that is encapsulated within a different fluid," wherein "the inner fluid is aqueous or water-based, while the outer fluid is oil" in typical embodiments.  Generally, the sample is contained in the aqueous inner fluid.  An advantage of this arrangement was that each sample could be subject to chemical reactions in its own droplet (a "mini-test tube" according to the '664 patent) and that a larger number of chemical reactions can be performed in parallel.  Such reactions are performed on microchips as claimed in the patents-at-issue (the opinion noting that such microchips were known in the art at the priority dates of these patents).

As set forth in the opinion, the named inventors of the asserted patents previously worked for a company (QuantaLife, Inc.) that was thereafter acquired by Bio-Rad.  These inventors had agreed in their employment contracts with QuantaLife to promptly assign to the company their rights to the provisional applications that matured into the three patents-in-suit, which they assigned to Bio-Rad after the acquisition.  These inventors later left Bio-Rad and formed 10X Genomics, where they developed the technology asserted by Bio-Rad to infringe the patents-in-suit.  Two embodiments of these chips were at issue in this case:

• GEM Chips, having "input wells for three different materials—gel beads, sample, and oil—and one output well to collect droplets.  The microfluidic channels on the GEM Chips intersect each other such that the gel bead and sample fluid are mixed at a first intersection, the resulting mixture enters into a microfluidic channel referred to as a 'singulation channel,' and the mixture then mixes with the oil at a second intersection."

• Chip GB, which 10X Genomyx utilizes "to generate droplets that are used to make the gel beads that are packaged with the GEM Chips and sold to customers.  The Chip GB contains one input well that holds an aqueous monomer solution, a second input well that holds oil, and channels from each of the wells that intersect each other to allow for the formation of droplets that are collected in a droplet well.  Over time, the monomers within each droplet polymerize, and the droplet becomes a gel bead."

Responsive to Bio-Rad's complaint, an Administrative Law Judge (ALJ) granted summary determination that the doctrine of assignor estoppel precluded 10X Genomyx from challenging the validity of the asserted patents.  The ALJ then construed the claims with regard to the term "droplet-generation region" to mean "the intersection of (1) a sample-containing dispersed phase fluid inlet channel, (2) a continuous phase fluid inlet channel, and (3) a droplet outlet channel."  The parties agreed that the term "sample" meant "a compound, composition, and/or mixture of interest, from any suitable source(s)."

Under this construction, the ALJ determined that 10X Genomyx's GEM Chips infringed the three patents, but that while the GB Chips infringed the claims of the '682 and '635 patents they did not infringe asserted claims 1 and 14 of the '664 patent because the monomer solution used with those chips was not a "sample" under the agreed-upon construction.  The Commission reviewed the ALJ's findings and adopted them, that the GEM chips infringed the three asserted patents (either literal, induced, or contributory infringement) but that the GB chips did not literally infringe the '644 patent.  The parties appealed each of the adverse determinations against them.

The Federal Circuit affirmed, in an opinion by Judge Lourie, joined by Judges Newman and Dyk.  With regard to Bio-Rad's appeal, the panel addressed two assertions that the ALJ erred.  The first was that because the GB chips did not involve a sample they did not have structures corresponding to "a 'sample well,' a sample channel, sample-containing droplets, or the claimed 'droplet generation region.'"  Second, Bio-Rad argued that due to the structural nature of the elements of the claims (wells and channels), infringement could not depend on what was in those wells and channels.  The "sample" limitation was assessed based on the parties' agreed-upon definition (which was taken from the '664 specification), and the Federal Circuit found no error in the ALJ relying on witness testimony that what was encapsulated in 10X Genomyx's GB Chip was not a sample under the agreed-upon definition but rather was "an input for a reagent production process" (emphasis in opinion).  This determination was also consistent with distinctions made in the '664 specification regarding the differences between a sample ("something that the customer cares about and wants to analyze") and a reagent ("which 'are of no interest'").  And this interpretation was also consistent with exemplified samples ("blood and plasma, and research samples such as culturued [sic] cells or bacteria") and reagents, defined as ""a compount [sic], set of compounds, and/or composition that is combined with a sample in order to perform a particular test(s) on the sample")(emphasis in opinion).  Bio-Rad's challenge was on these definitions, which they argued imported unsupported additional limitations into the claim term and were based on faulty conclusions (such as the monomer being "of no interest" under circumstances where "10X care-fully designed the monomer solution with particular concentrations of ingredients to serve as a gel bead precursor solution").  The Court agreed with the Commission and 10X Genomyx that Bio-Rad's arguments in this regard were directed to the Commission's factual determinations, and that under the Administrative Procedures Act the Commission's factual determinations were entitled to deference and "substantial evidence" review (which Bio-Rad did not satisfactorily challenge).  In this regard, the opinion states that "[t]he compelling factor here is the distinction between 'samples' and 'reagents'" as set forth (and relied upon by the Commission) in the '644 patent specification.  And, in particular, the panel did not find that consideration of the term "of interest" in construing the meaning of the claims and applying that construction to 10X Genomyx's GB chips imported any untoward subjectivity to the analysis.

Turning to Bio-Rad's second argument, the Federal Circuit considered this argument to "fail[]" for several substantive and procedural reasons.  The opinion states that it is "not clear" that Bio-Rad made this argument before the Commission, and accordingly should be precluded from presenting it on appeal in the first instance, citing Interactive Gift Express, Inc. v. CompuServe Inc., 256 F.3d 1323, 1346 (Fed. Cir. 2001).  Even if this procedural hurdle had been overcome, the panel asserted Bio-Rad would not prevail because its argument rested on "rewriting the claims in an oversimplified form and removing all limitations that differentiate the recited structures from each other."  The opinion illustrates this defect in Bio-Rad's argument by comparing the description of what is claimed in their brief with the actual claims, saying that the former "is not remotely close to what the claim says" it is.  "Inventors are masters of their claims, and the words they use to describe and claim their invention are decisive and binding," said the Court, and in the panel's view the '664 inventors did not claim their invention as broadly as it would need to have been claimed for Bio-Rad to prevail in its infringement argument here.  It was the inventors' decision "to characterize the wells and channels based on the material contained within them," according to the Court, and this choice cannot be "escaped" by recourse to the principle that "apparatus claims cover what a device is, not what a device does."  See Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 1468 (Fed. Cir. 1990) (emphasis in original opinion).

10X Genomyx's appeal challenged the Commission's determination that its GEM chips infringed the asserted claims of the three patents-in-suit.  The first of two challenges by 10X Genomyx was based on whether their GEM chips contained the "droplet-generating region" required by the claims.  10X Genomyx's other challenge was directed to whether the evidence supported the Commission's determination regarding indirect infringement.  The challenge regarding whether GEM chips comprised the "droplet-generating region" was on claim construction, where 10X Genomyx asserted this alternative construction of the term:

[T]he intersection of the sample input channel that receives the dispersed phase fluid from the sample well, the oil input channel that receives the continuous-phase or background fluid from the oil well, and the droplet outlet channel that outputs to the droplet well, at which droplets are generated.

Bio-Rad (and the Commission) countered that 10X Genomyx had waived this argument three times:  "first, by failing to propose it in the parties' Joint Claim Construction Chart; second, by failing to seek review by the Commission of the ALJ's waiver finding; and third, by failing in its principal brief to ask this court to overturn the ALJ's waiver finding."  The Court was not convinced, citing instances in the record (including that the construction proposed here was identical to 10X Genomyx's initial construction asserted before the ALJ and maintained before the Commission), and that this consistent assertion of its construction did not constitute waiver that would preclude 10X Genomyx from making its alternative claim construction argument on appeal.

Nevertheless, on the merits, the panel found that the ALJ had correctly construed the term, based on the plain meaning of the claims and the specifications of the patents-in-suit.  The Court held that 10X Genomyx's proposed alternative construction would impermissibly impose requirements on the claimed invention not supported by the intrinsic evidence.  The Court also rejected 10X Genomyx's argument that the ALJ erred by applying the doctrine of assignor estoppel to preclude it from challenging construction based on the prior art, for the simple reason that the Court found evidence in the record that the ALJ had permitted these art-based challenges and that they had failed (which is not the same thing).  The opinion states that the ALJ had properly construed the claims using the intrinsic evidence under Phillips v. AWH Corp., 415 F.3d 1303, 1312–15 (Fed. Cir. 2005) (en banc), and the fact that prior art considerations did not make their way into the Commission's opinion (which the Court termed "less relevant arguments") did not indicate error.

With regard to the Commission's finding of indirect infringement, the Federal Circuit recognized 10X Genomyx's argument to be a factual one (was there enough evidence presented to support the determination?) that is entitled to the substantial evidence standard of review.  The facts at issue revolved around whether 10X Genomyx had knowledge of the patents (on contrast with the priority applications, where such knowledge was not in doubt).  In finding that the Commission's determination was supported by substantial evidence, the opinion states that "10X's various arguments attempt to distract from the reality of this case: named inventors of the asserted patents sold their company and patent rights to Bio-Rad, worked for Bio-Rad for a short time, left Bio-Rad to start a new company, and launched new products that have been determined to infringe the patents they assigned to Bio-Rad."  In addition, the opinion states that 10X Genomyx's arguments "largely attack the ALJ's credibility determinations and weighing of the evidence" (which fails the substantial evidence challenge), particularly with regard to the ALJ's credibility determinations of the witnesses (including the named inventors).  And regarding the existence of non-infringing uses relevant to the Commission's contributory infringement determination, the Court rejected 10X Genomyx's assertion of "hypothetical" systems (which 10X Genomyx asserted were relevant due to the statutory language that an accused product be "suitable" for non-infringing use) as being contrary to precedent (for which the panel sets forth examples including Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1330–31 (Fed. Cir. 2010), and Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354, 1363 (Fed. Cir. 2006).  In sum, because "[i]t is not within [the Court's] purview to reweigh the evidence or to question the ALJ's credibility determinations" the Court affirmed the Commission's infringement determinations against 10X Genomyx.

Over the past six weeks, 10X Genomyx has obtained an exclusion order against Bio-Rad's importation of certain of their microfluidic chips over 10X Genomyx's patents and Bio-Rad in this case has obtained an exclusion order against 10X Genomyx's importation of certain of their microfluidic chips over Bio-Rad's patents.  The relationship and history between the companies argues against settlement, but under these circumstances settlement seems a sensible solution for both parties (depending of course on the relative market share and competitive positions of the parties excluded goods).

Bio-Rad Laboratories, Inc. v. International Trade Comm. (Fed. Cir. 2021)
Panel: Circuit Judges Newman, Lourie, and Dyk
Opinion by Circuit Judge Lourie

Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm. (Fed. Cir. 2021)

By Kevin E. Noonan --

Last month, the Federal Circuit affirmed an exclusion order imposed by the International Trade Commission against Bio-Rad for importing infringing microfluidic systems and components used for gene sequencing or related analyses, in Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm.

The ITC's decision followed a complaint by 10X Genomics, an intervenor in this appeal, for infringement of U.S. Patent Nos. 9,689,024, 9,695,468, and 9,856,530.  An ITC Administrative Law Judge found importation of the accused articles infringed claims in each of the asserted patents, that Bio-Rad had not established that the patents were invalid, and that 10X Genomics practiced the claims (and thus satisfied the "domestic industry" requirement of the Tariff Act of 1930, 19 U.S.C. § 1337(a)(2)).  Also, the ALJ rejected Bio-Rad's affirmative defense that it was a co-owner of these patents under terms of a prior employment contract with certain of the inventors.

The following claims are representative for each of the asserted patents:

Claim 1 of the '024 patent:

1.  A method for sample preparation, comprising:
    a) providing a droplet comprising a porous gel bead and a target nucleic acid analyte, wherein said porous gel bead comprises at least 1,000,000 oligonucleotide molecules comprising barcode sequences, wherein said oligonucleotide molecules are releasably attached to said porous gel bead, wherein said barcode sequences are the same sequence for said oligonucleotide molecules;
    b) applying a stimulus to said porous gel bead to release said oligonucleotide molecules from said porous gel bead into said droplet, wherein upon release from said porous gel bead, a given oligonucleotide molecule from said oligonucleotide molecules attaches to said target nucleic acid analyte; and
    c) subjecting said given oligonucleotide molecule attached to said target nucleic acid analyte to nucleic acid amplification to yield a barcoded target nucleic acid analyte.

Claim 1 of the '468 patent:

1.  A method for droplet generation, comprising:
    (a) providing at least 1,000,000 oligonucleotide molecules comprising barcode sequences, wherein said barcode sequences are the same sequence for said at least 1,000,000 oligonucleotide molecules, wherein said at least 1,000,000 oligonucleotide molecules are releasably attached to a bead, wherein said bead is porous;
    (b) combining said at least 1,000,000 oligonucleotide molecules and a sample comprising a nucleic acid analyte each in an aqueous phase at a first junction of two or more channels of a microfluidic device to form an aqueous mixture comprising said at least 1,000,000 oligonucleotide molecules attached to said bead and said sample; and
    (c) generating a droplet comprising said at least 1,000,000[ ]oligonucleotide molecules attached to said bead and said sample comprising said nucleic acid analyte by contacting said aqueous mixture with an immiscible continuous phase at a second junction of two or more channels of said microfluidic device.

Claim 1 of the '530 patent:

1.  A method for nucleic acid preparation or analysis, comprising:
    (a) providing:
        (i) at least 1,000 gel beads;
        (ii) releasably attached to each of said at least 1,000 gel beads, at least 1,000 barcode molecules comprising identical barcode sequences that are distinct from barcode sequences of at least 1,000 barcode molecules releasably attached to any other gel bead of said at least 1,000 gel beads; and
        (iii) a plurality of cells each comprising a plurality of polynucleotide molecules;
    (b) generating a plurality of droplets, wherein at least 1,000 droplets of said plurality of droplets each comprise:
        (i) a single gel bead from said at least 1,000 gel beads; and
        (ii) a single cell from said plurality of cells; and
    (c) in each of said at least 1,000 droplets, using said plurality of polynucleotide molecules from said single cell and barcode molecules of said at least 1,000 barcode molecules from said single gel bead to generate a plurality of barcoded polynucleotide molecules,
    wherein said barcode molecules become detached from said gel bead.

The factual history as set forth in the Federal Circuit's opinion is as follows.  Two of the named inventors of the asserted patents previously worked for a company (QuantaLife, Inc.) that was thereafter acquired by Bio-Rad.  These inventors had agreed in their employment contracts with QuantaLife to promptly disclose and assign to the company "the full details of any and all ideas, processes, recipes, trademarks and service marks, works, inventions, discoveries, marketing and business ideas, and improvements or enhancements to any of the foregoing ("IP")" that they "conceive[d], develop[ed] or create[d] alone or with the aid of others during the term of Employee's employment with the Company," and assign any such IP to the company (emphasis added).  These inventors signed similar agreements with Bio-Rad after the acquisition.

These inventors then left Bio-Rad in April 2012 and formed 10X Genomics in July 2012, where they developed the technology claimed in the asserted patents.  As set forth in the opinion, the 10X Genomics technology had a "gel bead in emulsion" (GEM) architecture that differed from the more conventional "capsule-in-capsule and capsule-in-droplets architecture."  The relevant features of this technology as claimed included that it "involves 'partitioning nucleic acids, DNA or RNA, in droplets together with gel beads that are used to deliver the barcodes into the droplet,' where the 'barcodes are released from the gel beads using a stimulus.'"  According to the opinion, there was no evidence that the inventors conceived of their technology prior to January 2013.

The basis for 10X Genomics' complaint was that Bio-Rad's products practiced the invention claimed in each asserted patent.  With regard to the '024 patent, the ALJ determined that Bio-Rad's accused methods practiced the step of "applying a stimulus to said porous gel bead to release said oligonucleotide molecules from said porous gel bead" (emphasis in opinion).  Bio-Rad unsuccessfully contended that the stimulus in its method acted on the oligonucleotides themselves rather than the gel bead, but the ALJ held (and the Commission affirmed) that the oligonucleotides were part of the gel bead and thus Bio-Rad's method satisfied this limitation.  For the '468 patent, Bio-Rad argued a distinction over the claim requirement of  "combining said at least 1,000,000 oligonucleotide molecules and a sample comprising a nucleic acid analyte . . . at a first junction of two or more channels of a microfluidic device to form an aqueous mixture."  Bio-Rad argued that the sample and oligonucleotide combination did not form an aqueous mixture at the first junction of the apparatus but were separate until droplets formed thereafter.  The ALJ disagreed based on testimony from 10X Genomics' expert, and the Commission agreed.  Concerning the '530 patent, Bio-Rad argued that its method did not fulfill the ALJ's construction of the claim that the second step (generating at least 1,000 droplets) was complete prior to the third step ("generating a plurality of barcoded polynucleotide molecules").  Bio-Rad supported this argument by the contention that the enzymes that provide the stimulus in its product "begin to form barcoded molecules immediately upon droplet formation" rather than after at least 1,000 droplets are formed.  The ALJ rejected this argument because the evidence showed that in practice the enzyme did not act sufficiently quickly to have "finish[ed] cleaving all barcoded molecules from the gel bead within the droplets before 1,000 droplets are formed."

The ALJ also rejected Bio-Rad's assertions that the 10X Genomics' product did not practice the invention claimed in the '530 patent any more than its own product did, a decision affirmed by the Commission on a slightly different basis, as well as rejecting Bio-Rad's argument that the claims of the '530 patent were indefinite.

Turning to Bio-Rad's affirmative defense that it was a co-owner of the asserted patents, the ALJ rejected the argument because there was no evidence that the invention(s) claimed in these patents had been conceived prior to January 2013 (after the inventors had left Bio-Rad's employ) and "'[n]o provision of any of the applicable contracts governs future inventions' merely because the future inventions 'are based on or developed from work done during employment.'"  In agreeing, the Commission also stated that the "ideas" identified by Bio-Rad purportedly worked on by the inventors during their employment terms were too "generic" to support co-ownership because the lacked the specifics required by the claims (and in particular that their work at Bio-Rad involved "droplet-in-droplet" not "gel-bead" architecture).  Also supporting the Commission's decision was their determination that many of the ideas asserted by Bio-Rad were to be found in Bio-Rad's prior art U.S. Patent No. 9,347,059 that named one of the inventors (showing, according to the Commission, that Bio-Rad had received the "benefit of its bargain" from the employment contract).

The Commission having affirmed the ALJ's decision, this appeal followed.

The Federal Circuit affirmed, in a decision by Judge Taranto joined by Judges Chen and Stoll.  The Federal Circuit held that substantial evidence supported the Commission's decision that Bio-Rad's accused imported articles infringed the asserted claims of the '024 patent.  The opinion notes that the plain meaning of the claim language recites that the oligonucleotides are releasably attached to the porous gel bead, and release is caused by applying a stimulus; Bio-Rad's system satisfies those requirements according to the Court.  The panel rejected Bio-Rad's arguments to the contrary, based on the distinction between the oligonucleotides and the porous gel bead being distinct entities, and differences in how its stimulus differs from what is exemplarily disclosed in the '024 specification.

The Court also rejected Bio-Rad's distinctions between what is claimed in the '468 patent and its accused imported articles based on the details of mixing the nucleic-acid-sample solution and reagent solution.  The opinion states that the evidence Bio-Rad relied upon to make a spatial distinction between where these solutions are mixed and where droplets are formed was "hazy" and that without record evidence supporting Bio-Rad's argument the Court "cannot say that the Commission lacked substantial evidence to find that Bio-Rad infringed the '468 patent."

The opinion also set forth and rejected the arguments Bio-Rad raised against the Commission's determination that its accused imported articles infringed the asserted claims of the '530 patent.  As a threshold matter the opinion states that:

Bio-Rad's argument must fail unless the Commission erred, as a matter of claim construction, in determining that the claim permits some barcode detachment (from the gel of the bead) to occur before 1,000 droplets are formed—as long as the claim-required number of detachments occur after 1,000 droplets have formed.

But Bio-Rad made no objection or argument regarding the Commission's claim construction, and the panel found none.  The claim recites that the second step of claim 1 of the '530 patent be completed before the third step.  But the panel opinion states that "[c]ritically, that conclusion does not mean, and the claim language does not require, that there be no barcode detachment before 1,000 droplets are generated" (which was the basis for Bio-Rad's argument).  The opinion states that the Commission's determination was supported by substantial evidence that "barcode molecules are not released from the gel beads instantaneously and that, instead, the barcoding process merely begins to occur upon droplet formation, with enough barcode detachment still occurring after 1,000 droplets are formed to meet the claim requirement" and, if that was the case, the Commission was correct in finding that "[t]he fact that barcoding of other polynucleotides also happened before 1,000 droplets were generated is irrelevant."

Bio-Rad turned this argument on its head in contending that 10X Genomics' product did not practice the invention claimed in the asserted claims of the '530 patent and thus did not satisfy the domestic industry requirement in the statute for relief from the ITC under Section 1337(a)(2).  But because "[t]he test for satisfying the 'technical prong' of the [domestic] industry requirement is essentially [the] same as that for infringement, i.e., a comparison of domestic products to the asserted claims," Alloc, Inc. v. Int'l Trade Comm'n, 342 F.3d 1361, 1375 (Fed. Cir. 2003), the Federal Circuit also rejected this challenge to the Commission's determination.  According to the opinion, Bio-Rad failed to show the Commission's determination was not supported by substantial evidence, being based on documentary evidence and expert testimony.

Bio-Rad also asserted (and the Federal Circuit rejected) that the claims of the '530 patent are indefinite, which the panel reviewed de novo in the absence of any challenge to the Commission's material findings.  The opinion affirmed the Commission's determination that Bio-Rad had forfeited this defense by raising it for the first time during the Commission's consideration of the ALJ's determination (Bio-Rad did not contest this decision until its Reply brief below).  But in addition, the panel rejected the basis for Bio-Rad's indefiniteness contention, that the Commission had to clarify the ALJ's initial claim construction.  The opinion notes that "[m]odifications are proper and sometimes necessary steps as disputes sharpen during litigation," citing Pfizer, Inc. v. Teva Pharms. USA, Inc., 429 F.3d 1364, 1377 (Fed. Cir. 2005), and that in this case all that occurred before the Commission was "[m]ere amplification of an initial construction to resolve a material dispute about claim meaning," which "provides an even weaker potential basis for a suggestion of indefiniteness."

Finally, the Court turned to Bio-Rad's argument that it is a co-owner of the asserted patents based on an employment contract with some of the inventors.  As the Court understood Bio-Rad's contentions:

First, Bio-Rad asserts, if [inventors] Drs. Hindson and Saxonov, when working at Bio-Rad (or its predecessor QuantaLife), had ideas that contributed to the post-employment inventions at issue, and if those contributions would make them co-inventors (regardless of post-employment contributions to the inventions), then the assignment provisions required assignment of their co-ownership interest to Bio-Rad.  Second, Bio-Rad asserts, Drs. Hindson and Saxonov did in fact have such co-inventorship-qualifying ideas while employed at Bio-Rad (specifically, while working for QuantaLife).

The Court assessed these assertions under California law as matters of contract interpretation; under that law interpretation of a contract is a matter of law subject to de novo review according to the opinion.  The opinion comes directly to the point:  "Bio-Rad has furnished no persuasive basis for disturbing the Commission's conclusion that the assignment provisions do not apply to a signatory's ideas developed during the employment (with Bio-Rad or QuantaLife) solely because the ideas ended up contributing to a post-employment patentable invention in a way that supports co-inventorship of that eventual invention."  Specifically, the panel appreciated that the employment contracts by their terms were limited to intellectual property that arose in the course of employment at the time the inventors were employed by Bio-Rad's predecessor-in-interest, QuantaLife (i.e., "before the termination of employment").  Under these circumstances, the Court noted that "Bio-Rad does not argue, much less demonstrate, that a person's work, just because it might one day turn out to contribute significantly to a later patentable invention and make the person a co-inventor, is itself protectible intellectual property before the patentable invention is made."  For a patent, "the pertinent intellectual property does not exist until at least conception of that invention" the opinion states, citing, inter alia, Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1227–28 (Fed. Cir. 1994).  None of the precedent Bio-Rad advanced in support of its co-ownership argument was to the contrary (and remarkably did not support its argument in the Court's opinion), in particular Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 583 F.3d 832, 837 (Fed. Cir. 2009).  Finally, the panel understood California law to "recognize[] significant policy constraints on employer agreements that restrain former employees in the practice of their profession, including agreements that require assignment of rights in post-employment inventions" insofar as "[s]uch an agreement might deter a former employee from pursuing future work related to the subject matter and might deter a future employer from hiring that individual to work in the area."  And the panel did not find any reversible error by the Commission in deciding, on the merits, that nothing the inventors had done during the course of their employment had sufficient specificity to support Bio-Rad's claims of an ownership interest in any of the asserted patents.

Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm. (Fed. Cir. 2021)
Panel: Circuit Judges Taranto, Chen, and Stoll
Opinion by Circuit Judge Taranto

Bayer Healthcare LLC v. Baxalta Inc. (Fed. Cir. 2021)

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed a jury verdict against Baxalta Inc., Baxalta US Inc., and Nektar Therapeutics for infringing Bayer Healthcare's patent to human blood clotting factor conjugates in Bayer Healthcare LLC v. Baxalta Inc.

Bayer Healthcare sued Defendants on U.S. Patent No. 9,364,520, alleging willful infringement by Baxalta's product, Adynovate®.  This product is a recombinant human Factor VIII (the blood clotting factor responsible for causing Hemophilia A) having the protein structural domains A1-A2-B-A3-C1-C2, wherein the B portion was specifically modified by addition of polyethylene glycol (PEG).  PEGylation is important because Factor VIII has an 11-hour half-life which requires frequent injections and leads to reduced patient compliance.  The prior art had disclosed "random" modification of Factor VIII with PEG, which had "several drawbacks" due to the multiplicity of PEGylations sites ("158 lysines, the two N-termini, and multiple histidines, serines, threonines, and tyrosines") in the Factor VIII protein, which led to heterogeneity in the species produced, including ones having deleterious effects on Factor VIII activity and ones having a multiplicity of PEG residues conjugated to the protein.

The '520 patent specification disclosed site-specific PEGylation at a site not at an N-terminal amine; claim 1 is representative:

1.  An isolated polypeptide conjugate comprising a functional factor VIII polypeptide and one or more biocompatible polymers, wherein the functional factor VIII polypeptide comprises the amino acid sequence of SEQ ID NO: 4 or an allelic variant thereof and has a B-domain, and further wherein the biocompatible polymer comprises polyalkylene oxide and is covalently attached to the functional factor VIII polypeptide at the B-domain.

(wherein the italicized portions of the claim identify claim language disputed in the litigation).

At trial, the District Court construed the term "isolated polypeptide conjugate" to mean "a polypeptide conjugate where conjugation was not random."  Specifically, the District Court held that during prosecution of the '520 patent, Bayer had disclaimed embodiments having random PEGylation.  Further, the District Court construed the term "at the B-domain" to mean "attachment at the B-domain such that the resulting conjugate retains functional factor VIII activity," rejecting Baxalta's proposed construction that the phrase should be construed to mean "at a site that is not any amine or carboxy site in factor VIII and is in the B-domain."  The District Court granted Defendants' pre-trial motion as a matter of law that there was no willful infringement, and a jury found that Defendants infringed claims 1-3 and 8 of the '520 patent.  The jury found against Defendants' counterclaim of non-enablement, and awarded Bayer $155,190,264 in reasonable royalty damages, based on a 17.78% royalty rate for $872,836,128 in Defendants' profits.  The District Court also denied Defendants' JMOL motions on the issues of infringement, enablement, and damages.  Bayer filed a motion under Federal Rule of Civil Procedure 59(a) for pre-verdict supplemental damages, which the District Court granted and awarded Bayer another $18,324,562.  The District Court also denied Bayer's motion for JMOL on willful infringement.  Both parties appealed.

The Federal Circuit affirmed, in an opinion by Judge Stoll, joined by Judges Newman and Linn.  The opinion first opined on the District Court's claim construction, which (because the District Court had not relied upon extrinsic evidence) was performed de novo, with regard to the interpretation of the terms "at the B-domain" and "random" PEGylation of the B portion of Factor VIII.  The opinion rejected Defendants' argument that the term "at the B-domain" should have been interpreted to exclude amine/lysine PEG conjugation.  The opinion sets forth its claim construction analysis by way of the factors enunciated in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc):  plain meaning of the claim terms, the specification, and the prosecution history.  The Federal Circuit found the plain meaning of the term "'[a]n isolated polypeptide conjugate' in which PEG 'is covalently attached to the functional factor VIII polypeptide at the B-domain'" does not require any particular amino acid residue to be PEGylated, saying that the claim "broadly requires PEGylation at the B-domain as a region."  The panel identified statements in the specification that supported this construction, and while acknowledging that PEGylation at cysteine residues was expressly disclosed, held that this disclosure did not limit the scope of site-specific PEGylation to just cysteine residues.  The Federal Circuit also disagreed with Defendants that the specification disparaged amine/lysine PEG conjugation, expressly based on Indivior Inc. v. Dr. Reddy's Laboratories, S.A., 930 F.3d 1325 (Fed. Cir. 2019); Gaus v. Conair Corp., 363 F.3d 1284 (Fed. Cir. 2004); and SciMed Life Systems, Inc. v. Advanced Cardiovascular Systems, Inc., 242 F.3d 1337 (Fed. Cir. 2001) (although the opinion states that it was a close question).  Rather than disparaging or disclaiming any particular type of conjugation with PEG, the panel held that the '520 patent specification disparaged random PEGylation (which is not the same thing).  Finally, the opinion held that nothing in the prosecution history was to the contrary, specifically in that it did not contain "a clear and unmistakable surrender of claims directed to non-random amine/lysine PEGylation."  While art cited by the USPTO included amine/lysine conjugation sites, taken as a whole and as understood by a person of ordinary skill in the art, the Federal Circuit held the rejection and cited art was directed to random PEGylation.  (And Defendants' citation of statements made in the prosecution of related European Patent Application No. 11153287.4 were unavailing, both on the merits and, in agreement with the District Court, "varying legal and procedural requirements for obtaining patent protection in foreign countries might render consideration of certain types of representations inappropriate for consideration in a claim construction analysis of a United States counterpart.")

With regard to the term "random," the Federal Circuit rejected Defendants' argument that the District Court had erred by not expressly defining the term, thus improperly leaving construction of this term to the jury.  The panel held that the District Court had "resolved the parties' differences" with regard to this term by addressing (and rejecting) Defendants' arguments that "(1) that 'random' conjugation means any conjugation at amines or carboxy sites; and (2) that 'random' conjugation means all heterogenous conjugation."  The Federal Circuit understood the District Court's construction did not exclude any degree of heterogeneity from PEG conjugation but rather that Bayer had disparaged embodiments with "a high degree of heterogeneity" (which was the problem with prior art embodiments of PEGylated Factor VIII preparations that distinguished Bayer's invention).  Reciting the District Court's construction, the opinion states that the District Court found (correctly) that "non-random conjugation neither required that each FVIII protein in a product such as Adynovate® be PEGylated in the same places (homogeneity among conjugates in the product) nor required that every PEG on each FVIII protein be in the B-domain (homogeneity within each conjugate)."  Accordingly, the Federal Circuit held that limiting the term "random" with reference to construction of the term "isolated polypeptide conjugate" to mean "a polypeptide conjugate where conjugation was not random" sufficiently defined the meaning of the word "random" in the claimed context, and that this was consistent with other district court decisions, including denial of Defendants' motion in limine on this issue.

The panel also affirmed as being supported by substantial evidence the jury's infringement decision, and consequently, that the District Court did not err in denying Defendants' motion for JMOL.  The opinion provided a synopsis of the parties' evidence, including differing expert witnesses on infringement, supported by Baxalta's submissions to FDA regarding the specificity with which its Factor VIII product comprised "controlled, targeted chemical addition of 20 [kilodalton] PEG conjugates to this FVIII B-domain" (emphasis in opinion), statements inconsistent with random PEGylation.

Similarly, the Federal Circuit held that there was substantial evidence for the jury's rejection of Defendants' non-enablement defense, particularly with regard to embodiments comprising non-random lysine PEGylation.  According to the opinion, "Bayer presented substantial evidence from which a reasonable juror could find that the specification's disclosure of instructions as to the reaction conditions required to practice the claimed invention using cysteine PEGylation were sufficient to enable not only non-random cysteine PEGylation at the B-domain, but also non-random lysine PEGylation at the B-domain."  Somewhat in contrast to recent, more stringent applications of the Federal Circuit's standards for enablement (see Amgen Inc. v. Sanofi and Idenix Pharmaceuticals LLC v. Gilead Sciences Inc.), this panel held that "the specification need not include a working example of every possible embodiment to enable the full scope of the claims," citing Alcon Rsch. Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 1189–90 (Fed. Cir. 2014), and Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1336–37 (Fed. Cir. 2003).

Defendants also appealed the jury's damages calculations and the basis thereof.  While agreeing with the District Court in rejecting Bayer's expert's 50-50 split royalty rate, the panel disagreed with several other assertions of error by Defendants.  These included the basis for the 17.78% reasonable royalty rate, which Defendants' argued relied on a "a flawed and speculative methodology—namely, asking the jury to pick a rate between the range of feasible rates presented by [Bayer's expert] as the reasonable rate."  The Federal Circuit held that "[t]he district court properly exercised its discretion in allowing Bayer to ask the jury to select a rate between the range presented," within the confines of a damages expert using "reliable methodology for determining the range of possible hypothetical negotiation royalty rates."  When, as here, a jury's damages award "fell within the range suggested by the patentee's damages expert" the Federal Circuit stated it was supported by substantial evidence, citing Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., 853 F.3d 1370, 1382 (Fed. Cir. 2017), and that the District Court had not erred in permitting the jury to received Bayer's damage expert's testimony.  Defendants had had (and had exercised) the opportunity to cross-examine Bayer's expert on his methodology and damaged calculation, according to the opinion, and "ultimately, the jury evaluated his opinions and adopted a rate within his proposed range."  In the Federal Circuit's opinion there was nothing improper about the jury's damages calculation or award.

Finally, Defendants argued that the District Court had violated their Seventh Amendment rights by awarding pre-judgment damages under Fed R Civ Pro 59.  In doing so, according to the Federal Circuit, the District Court used actual sales data instead of projected amounts and applied the same 17.78% royalty rate on the amount of these actual sales.  "Under these circumstances," said the Federal Circuit, "we are not persuaded that the District Court's award constitutes an impermissible additur or an otherwise 'bald addition of something which in no sense can be said to be included in the verdict,'" citing Dimick v. Schiedt, 293 U.S. 474, 486 (1935) (the remainder of the Court's opinion making it clear that its judgment was limited to the facts in this case).

Regarding Bayer's appeal on the District Court's grant of Defendants' motion for JMOL on willful infringement, the panel held that there was insufficient evidence of the necessary "state of mind" having "a specific intent to infringe at the time of the challenged conduct" to support willfulness, citing Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933 (2016) ("willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate").  The panel affirmed the District Court's decision even though "there was no dispute that Baxalta was 'aware of the '520 patent,'" because "Bayer merely 'assume[d] that [Baxalta] knew Adynovate[®] infringed because it involved pegylation at the B-domain of factor VIII."  The Federal Circuit rendered this opinion even in the face of testimony by Defendants' witnesses "concerning their awareness of the patent application that issued as the '520 patent" and representations to FDA regarding non-random PEGylation in Defendants' Adynovate® product.

Bayer Healthcare LLC v. Baxalta Inc. (Fed. Cir. 2021)
Panel: Circuit Judges Newman, Linn, and Stoll
Opinion by Circuit Judge Stoll

Top Stories of 2020: #5 to #8

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 14th annual list of top patent stories.  For 2020, we identified eight stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  Today, we count down stories #8 to #5, and later this week we will count down the top four stories of 2020.  As with our other lists (2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2020" on January 20, 2020 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a few of the most important stories on this year's list, can be found here.

8.  Patenting and Artificial Intelligence

In October, the U.S. Patent and Trademark Office, which had earlier issued a request for comments on patenting artificial intelligence (AI) based inventions and then collated the comments it received from stakeholders, released a report entitled "Public Views on Artificial Intelligence and Intellectual Property Policy."  In its report, the USPTO noted that most commenters believed the current framework for examining computer-implemented software inventions should be suitable for examining AI-based inventions, but that it may be difficult to meet the requirements of 35 U.S.C. § 112(a) for certain AI-based inventions; that most commenters believed that AI may lead to changes in how the standard of a person of ordinary skill in the art is interpreted; and that some commenters expressed concerns that AI would lead to a proliferation of prior art making it difficult for examiners to conduct searches for relevant prior art.  Shortly after releasing that report, the USPTO released a study entitled "Inventing AI," which highlighted the increasing prevalence of AI-based patent applications in the U.S. over the past few decades.  The study, prepared by the Office of the Chief Economist of the USPTO, surveyed publicly available granted U.S. patents and U.S. patent application pre-grant publications published from 1976 through 2018.  In the study, the USPTO sets forth the perhaps unsurprising finding that the number of AI patent applications increased by more than 100% between 2002 and 2018, and the more surprising finding that the share of applications relating to AI grew from 9% to nearly 16% of all patent applications over that same time period.  The study suggests that it is clear that AI-based patents will remain an important part of the U.S. patent landscape going forward.

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

• "New USPTO Study Shows Rapid Growth, Regional Spread of AI-Based Patenting," October 27, 2020
• "USPTO Publishes Report on AI-Related Policies," October 11, 2020
• "'Creativity Machine' Cannot Be Named As Inventor," August 18, 2020

7.  CRISPR Interference Progresses

Five years ago, the journal Science picked the CRISPR (clustered regularly interspaced short palindromic repeats) technology as its "Breakthrough of the Year," declaring that the technology had "matured into a molecular marvel."  Not surprisingly, CRISPR's status as breakthrough molecular marvel has resulted in a battle over who has the best patent position with respect to this technology.  And despite an ongoing and worsening pandemic, Interference No. 106,115 between the Broad Institute, Harvard University, and the Massachusetts Institute of Technology (as Senior Party) and the University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (as Junior Party) moved forward in 2020 with the two Parties presenting various motions and oppositions to those motions.  CRISPR interferences have now made three of our last four top stories lists, and could very well be on next year's list as well.

In a related development, the Opposition Division of the European Patent Office revoked European Patent No. EP 2771468 in its entirety in January.  The patent, which named as Proprietors the Broad Institute, MIT, and Harvard College, had been opposed by Novozymes and CRISPR Therapeutics.  In December, the Technical Board of Appeal affirmed the revocation, finding that because Rockefeller University had not been named as an Applicant, the named Proprietors could not validly claim priority to several provisional applications, and by the filing date of the provisional application to which the named Proprietors could validly claim priority, there had published prior art that invalidated the granted claims.

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

• "Broad Files Priority Motion in CRISPR Interference*," December 31, 2020
• "CVC Files Substantive Motion No. 3 (for Improper Inventorship) and Broad Opposes," December 30, 2020
• "Broad Files Motion Opposing CVC's Motion to Subpoena Witnesses," December 28, 2020
• "Broad Institute Loses Appeal in European Patent Office, Patents Remain Revoked," December 8, 2020
• "CVC Discloses Priority Evidence and Earliest Conception Date in Interference," November 19, 2020
• "CRISPR Housekeeping," October 29, 2020
• "PTAB Grants Broad Motion No. 4 for Priority Benefit to U.S. Provisional Application No. 61/736,527," October 6, 2020
• "PTAB Denies Broad Motion No. 3 to De-designate Claims as Not Corresponding to Count No. 1," October 4, 2020
• "CVC Takes Its Turn at Filing Dispositive Motion to End Interference," September 28, 2020
• "PTAB Denies Broad Motion No. 2 to Substitute the Interference Count," September 27, 2020
• "Claim Construction by PTAB in CRISPR Interference Decision," September 24, 2020
• "PTAB Decision Denying Broad's Substantive Motion No. 1 in CRISPR Interference," September 20, 2020
• "PTAB Decides Parties' Motions in CRISPR Interference," September 11, 2020
• "PTAB Hears Oral Argument on Motions in Interference No. 106,115," May 19, 2020
• "The Plot Thickens: Sigma Aldrich Has Allowed Claims," May 14, 2020
• "PTAB Sets Date for Oral Argument in CRISPR Interference," April 30, 2020
• "CVC Files Reply to Broad Opposition to CVC's Motion to Exclude Broad Evidence," April 26, 2020
• "Broad Reply No. 4 to CVC's Opposition No. 4 to Broad's Motion No. 4 for Priority to U.S. Provisional Application No. 61/736,527," April 22, 2020
• "Broad Reply No. 3 to CVC's Opposition No. 3 to Broad's Motion No. 3 to De-designate Claims as Not Corresponding to Count No. 1," April 22, 2020
• "Broad Reply No. 2 to CVC's Opposition No. 2 to Broad's Motion No 2 to Substitute the Count," April 21, 2020
• "CVC Files Motion to Exclude Broad Evidence; Broad Opposes," April 16, 2020
• "CVC Reply No. 2 to Broad's Opposition No. 2 to CVC's Motion No. 2 to Be Accorded Benefit of Priority," April 14, 2020
• "CVC Reply No. 1 to Broad's Opposition No. 1 to CVC's Motion No. 1 to Be Accorded Benefit of Priority," April 12, 2020
• "CRISPR Housekeeping," March 3, 2020
• "CVC Files Motion in Opposition to Broad's Substantive Motion No. 4," February 20, 2020
• "CVC Files Motion No. 3 in Opposition to Broad's Substantive Motion No. 3 to De-designate Claims as Not Corresponding to Count No. 1," February 10, 2020
• "CVC Submits Motion No. 2 in Opposition to Broad's Substantive Motion No. 2 to Substitute the Count," February 5, 2020
• "Broad Files Opposition to CVC's Motion No. 1 for Priority Benefit," January 30, 2020
• "Meanwhile, Back at the Broad-CVC Interference . . .," January 29, 2020
• "Broad Institute Patents Remain Revoked in Europe," January 28, 2020

6.  IP Decisions Implicate Sovereign Immunity

Last year, the question of sovereign immunity in patent cases -- more particularly whether tribal sovereign immunity could protect the St. Regis Mohawk Indian Tribe from being named as a party in an inter partes review (IPR) proceeding, and whether the University of Minnesota, as an "arm of the state," could assert sovereign immunity in an IPR -- made our top stories list (coming in at #3).  The issue of sovereign immunity with respect to IP cases has once again made our list for 2020.  In two recent cases, the Federal Circuit determined in Gensetix, Inc. v. Board of Regents of the University of Texas System that Gensetix was without remedy for a claim of infringement asserted against the Baylor College of Medicine, Diakonos Research, and William Decker with respect to patents licensed from the University of Texas (UT), because UT refused to join as a necessary party on sovereign immunity grounds.  In this case, the Federal Circuit found that the Eleventh Amendment precluded involuntary joinder of a State in a lawsuit brought by a citizen of the State or other States.  And last month, in Board of Regents of the University of Texas System v. Baylor College of Medicine, the Federal Circuit found that state sovereign immunity did not prevent a petitioner from instituting an IPR against a state or arm of the state in view of its decision in Regents of the University of Minnesota v. LSI Corp. (for which certiorari was denied in 2020).

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

• "Board of Regents of the University of Texas System v. Baylor College of Medicine (Fed. Cir. 2020)," December 23, 2020
• "Gensetix, Inc. v. Board of Regents of the University of Texas System (Fed. Cir. 2020)," July 27, 2020
• "Allen v. Cooper (2020)," March 23, 2020

5.  Doctrine of Equivalents Continues to Make Comeback

The doctrine of equivalents is a Supreme Court-created patent doctrine that arose in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950).  However, the doctrine fell into disfavor at the Federal Circuit during the 1990's and arguably provided the first inkling to the Supreme Court that the Federal Circuit's patent jurisprudence would benefit from the Court's closer oversight.  In Warner-Jenkinson Co. v. Hilton Davis Chem. Co. and Festo v. Shoketsu Kinzoku Kogyo Kabushiki, the Supreme Court reiterated the vibrancy of the doctrine; nevertheless, its successful assertion continued to decline.

As we noted in our top stories list last year, the doctrine of equivalents began to make a bit of a comeback in 2019 (enough to make last year's top stories list, coming in at #10), and this comeback continued in 2020.  In March, the Federal Circuit continued its recent willingness to affirm findings of infringement under the doctrine of equivalents in Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC, affirming the District Court's decision regarding infringement under the doctrine of equivalents with respect to some asserted patents (while reversing as to infringement under the doctrine of equivalents with respect to other asserted patents).  And then last month, in Eli Lilly & Co. v. Apotex, Inc., the Federal Circuit again affirmed a finding of infringement under the doctrine of equivalents.  Between those two decisions, however, the Federal Circuit, in Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC, applied the dedication-disclosure doctrine to affirm a District Court dismissal on the pleadings of infringement allegations under the doctrine of equivalents.

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

• "Eli Lilly & Co. v. Apotex, Inc. (Fed. Cir. 2020)," December 27, 2020
• "Supreme Court Denies Another Certiorari Petition on Doctrine of Equivalents," June 16, 2020
• "Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC (Fed. Cir. 2020)," May 11, 2020
• "Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC (Fed. Cir. 2020)," March 29, 2020
• "DOE Infringers Petition for Certiorari over PHE "Tangential Relationship" Test," March 18, 2020

Eli Lilly & Co. v. Apotex, Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

After more than two decades of being the red-headed stepchild of patent infringement before the Federal Circuit, infringement under the doctrine of equivalents has made a dramatic comeback in the past few years, the Court affirming plaintiffs asserting their patents under the doctrine six times (versus denying DOE infringement on the basis of prosecution history estoppel twice, on the basis of the dedication-disclaimer estoppel twice, and finding no equivalents twice).  One of those affirmances was in Eli Lilly & Co. v. Hospira, Inc., directed to the same patent and with assertion of infringement under the doctrine of equivalents as in the most recent case decided by the Federal Circuit, Eli Lilly & Co. v. Apotex, Inc.

This case arose in ANDA litigation over Apotex's generic version of Eli Lilly's ALIMTA® (premetrexed disodium) drug product for treating mesothelioma and certain lung cancers.  Lilly asserted Orange Book-listed U.S. Patent No. 7,772,209 against Apotex for infringement under the doctrine of equivalents pursuant to 35 U.S.C. § 271(e)(2); claims 1 and 12 are representative:

1.  A method for administering pemetrexed disodium to a patient in need thereof comprising administering an effective amount of folic acid and an effective amount of a methylmalonic acid lowering agent followed by administering an effective amount of pemetrexed disodium, wherein
    the methylmalonic acid lowering agent is selected from the group consisting of vitamin B12, hydroxycobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-cobalamin perchlorate, azidocobalamin, cobalamin, cyanocobalamin, or chlorocobalamin. . . .

12.  An improved method for administering pemetrexed disodium to a patient in need of chemotherapeutic treatment, wherein the improvement comprises:
    a) administration of between about 350 μg and about 1000 μg of folic acid prior to the first administration of pemetrexed disodium;
    b) administration of about 500 μg to about 1500 μg of vitamin B12, prior to the first administration of pemetrexed disodium; and
    c) administration of pemetrexed disodium.

The accused infringing article, Apotex's generic version of ALIMTA®, comprised pemetrexed dipotassium (instead of the disodium salt).  As explained in this opinion, while the District Court was considering the parties' cross-motions for summary judgment, the Federal Circuit handed down its decision in Eli Lilly v Hospira for infringing generic versions of ALIMTA® comprising pemetrexed ditromenthamine.  In applying this decision, the District Court considered whether, in the face of rejection, Lilly's change from ALIMTA to "pemetrexed disodium" raised an estoppel sufficient for the Court to find infringement under the doctrine of equivalents for dipotassium species.  Neither this substitution nor expressly reciting "pemetrexed disodium" in the claim was sufficient to raise prosecution estoppel in the District Court's opinion.  The District Court having granted summary judgment against Apotex for infringement under the doctrine of equivalents, this appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Stoll joined by Chief Judge Prost and Judge Bryson.  In the panel's view, Lilly's substitution of "ALIMTA" with "pemetrexed disodium" was not a narrowing amendment that raises prosecution history estoppel, the Court expressly relying on its earlier Eli Lilly v. Hospira precedent.  One basis for this conclusion was that the '209 specification expressly equated ALIMTA with pemetrexed disodium, thereby introducing no narrowing amendment (being in the panel's view merely a change in nomenclature).  This equivalence was supported by the Examiner's rejection of claims reciting ALIMTA for indefiniteness, the opinion quoting MPEP § 2173.05(u) (2004) for the proposition that "[i]f the trademark or trade name is used in a claim as a limitation to identify or describe a particular material or product, the claim does not comply with the requirements of 35 U.S.C. 112, second paragraph," that "claim scope is uncertain since the trademark or trade name cannot be used properly to identify any particular material or product," and that the "value of a trademark would be lost to the extent that it became descriptive of a product, rather than used as an identification of a source or origin of a product."  In response Lilly swapped "ALIMTA" with "pemetrexed disodium" in its claims, which in due course passed to issue in the '209 patent.  In the Court's view "[n]othing in the prosecution history suggests that Lilly's amendment narrowed the claims, that the Examiner understood Lilly to be narrowing the claims, or that either Lilly or the Examiner understood "ALIMTA" to mean anything other than pemetrexed disodium."

The Court considered Apotex's reading of the District Court's reasoning, that the Examiner's indefiniteness rejection rested on ALIMTA meaning either pemetrexed disodium or pemetrexed alone, to be a "misread[ing] of the prosecution history."  It was not the case that the Examiner rejected claims reciting ALIMTA for being indefinite and for reciting a trade name; rather, in the Court's view the rejection was raised that such claims were indefinite because they recited the ALIMTA trade name.

And finally, the panel also did not credit Apotex's argument that in a corresponding European Patent Convention application the Applicant had substituted pemetrexed disodium for pemetrexed per se, saying "[i]n light of the European prosecution history as a whole, we do not read Lilly's statement that it was "refocus[ing]" the claims in its application to suggest that Lilly equated "ALIMTA" with "pemetrexed."

Eli Lilly & Co. v. Apotex, Inc. (Fed. Cir. 2020)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Bryson and Stoll
Opinion by Circuit Judge Stoll

Vectura Ltd. v. GlaxoSmithKline LLC (Fed. Cir. 2020)

By Kevin E. Noonan --

Trial courts tend to get more than the benefit of the doubt when their decisions are viewed under the "abuse of discretion" standard, and juries similarly are affirmed unless there isn't substantial evidence supporting their verdicts.  Both these rubrics, which extend more generally to cases involving disputes outside patent law, were used by the Federal Circuit to affirm both the finding of infringement and a hefty ($89,712,069) damages calculation in Vectura Ltd. v. GlaxoSmithKline LLC.

The case arose involving Vectura's patented components for pulmonary administration for dry-powder inhalers, the components claimed in U.S. Patent No. 8,303,991.  Vectura asserted Claim 3, dependent on independent claim 1 as further limited to magnesium stearate as the "additive material" against GSK in the litigation:

1.  Composite active particles for use in a pharmaceutical composition for pulmonary administration, each composite active particle comprising a particle of active material and particulate additive material on the surface of that particle of active material, wherein the composite active particles have a mass median aerodynamic diameter of not more than 10 μm, and wherein the additive material promotes the dispersion of the composite active particles upon actuation of a delivery device.

(wherein the District Court's construction of the italicized limitations was at issue on appeal).

Vectura asserted this claim against three GSK accused infringing articles:

• Breo, which comprises two blisters, one containing a mixture of vilanterol, lactose, and magnesium stearate and the second containing a mixture of fluticasone and lactose, but not magnesium stearate.

• Anoro, which comprises two blisters, one containing a mixture of vilanterol, lactose, and magnesium stearate and the second containing a mixture of umeclidinium, lactose, and magnesium stearate.

• Incruse, which comprises only one blister, containing a mixture of umeclidinium, lactose, and magnesium stearate.

GSK's method of preparing its accused infringing articles was relevant to Vectura's infringement accusations:

GSK first mixes the lactose excipient with magnesium stearate in the absence of the active ingredient.  That step yields lactose particles that are discontinuously coated with magnesium stearate.  After a de-lumping step, GSK then mixes the lactose particles with the active ingredient.  In that step, small particles of the active ingredient are deposited onto the larger lactose particles, which are already coated with small particles of magnesium stearate.

The District Court construed two terms of Claim 3:

[T]he court construed the phrase "promotes the dispersion of the composite active particles" (the dispersion limitation) to mean "wherein a composition that contains one or more composite active particles has increased dispersion of the active material upon activating a delivery device for inhalation into the lungs by a patient, as compared to the same composition wherein unmodified active particles are substituted for the composite active particles.

The court construed the term "composite active particles."  GSK's proposed construction of that term included a process limitation requiring that the composite active particles be "formed by milling . . . using sufficient energy and duration to ensure sufficient break-up of agglomerates of both constituents, dispersal, and even distribution of additive over the active particles."  The district court rejected GSK's proposed construction, holding that the term "composite active particles" does not include a process limitation.  The court construed the term to mean "[a] single particulate entit[y/ies] made up of a particle of active material to which one or more particles of additive material are fixed such that the active and additive particles do not separate in the airstream."

The District Court found a "distinction without a difference" under this claim construction of GSK's process of mixing the active ingredient with magnesium stearate in the presence of lactose instead of in its absence.  The jury found that this claim was infringed and not invalid, and GSK appealed the District Court's denial of motions for judgment as a matter of law on infringement and damages.  This appeal followed (and did not involve the District Court's judgment that the claims were not invalid).

The Federal Circuit affirmed, in an opinion by Judge Bryson, joined by Chief Judge Prost and Judge Wallach.  GSK raised four issues on appeal:

• First, that the district court should have granted JMOL on infringement because "Vectura failed to present substantial evidence that the accused inhalers use additive material that "promotes the dispersion" of the active material," or in the alternative granted GSK a new trial.

• Second, that the district court should have granted JMOL on claim construction, wherein "the district court's construction of the term "composite active particles" was erroneous, requiring a new trial on infringement."

• Third, for a new trial on damages because of flaws in Vectura's expert's calculations.

• Finally, for a new trial on damages due to prejudicial arguments made to the jury regarding GSK sales made by Vectura's damages expert and counsel.

The Federal Circuit opinion set forth for the reader's convenience the standards of its review:  substantial evidence for jury verdicts, citing Personalized User Model, LLP v. Google Inc., 797 F.3d 1341, 1345 (Fed. Cir. 2015); and abuse of discretion for its new trial motion, citing Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 308 F.3d 1167, 1182 (Fed. Cir. 2002).

GSK argued that under the District Court's construction it was not disputed between the parties that Vectura had the burden to show "the use of magnesium stearate in the accused inhalers improves the dispersion of the active ingredient compared to identical products in which only the lactose excipient is coated with magnesium stearate."  GSK argued the District Court erred in denying its motion for JMOL on this issue because in its view the jury based its decision that Vectura had satisfied its burden on an allegedly flawed scientific test.  The asserted flaws had to do with whether the lactose alone was covered with magnesium stearate vs. coating the drug-containing particles and the lactose (wherein the latter composition was dispersed better in the lungs).  The Federal Circuit found GSK's argument was deficient because this test was not the only basis for the jury's determination.  The District Court found in denying JMOL that Vectura relied on aspects other than the flawed study and that there was "ample other evidence" the jury could have relied upon other than the putatively flawed study.  This included evidence that a magnesium stearate coating "helps overcome the tendency of the particles to stick together and therefore increases the dispersion of the particles in the lungs" and test results wherein GSK's accused infringing products showed the particles "were consistently associated with magnesium stearate."  The District Court also held that the jury was entitled to rely on GSK documentary evidence regarding satisfaction of the dispersal limitation in Claim 3.  Thus, according to the panel, the totality of the evidence developed below was sufficient to satisfy the substantial evidence standard for affirming the jury's verdict of infringement.

GSK's second argument on appeal was that proper construction of the claim limitation "composite active particles" required that these particles be produced by a "high-energy milling" process (which GSK argued does not describe their process).  According to GSK, the '991 specification discloses high-energy milling, and disclosure of this process was used during prosecution of the '991 patent to overcome a prior art reference.  Thus, according to GSK, a correct construction of the "composite active particles" requires the particles (and drugs made from those particles) to be made using a "high-energy milling" process.

On the merits, the Federal Circuit considered "this case [to] fall[] between two prior cases from this court: Continental Circuits LLC v. Intel Corp., 915 F.3d 788 (Fed. Cir. 2019), and Andersen Corp. v. Fiber Composites, LLC, 474 F.3d 1361 (Fed. Cir. 2007)."  In the Continental Circuits case, the Federal Circuit had refused to import a process limitation into an apparatus claim, whereas in the Anderson case, the Court had construed an apparatus claim to encompass a process limitation.  From these cases the panel enunciated a standard, wherein "process steps can be treated as part of the product claim if the patentee has made clear that the process steps are an essential part of the claimed invention."  As a practical matter, the opinion states this standard another way, saying the Court looks to "language of requirement, not preference."  Here, from the Federal Circuit's assessment of the '991 patent specification the Court reached the conclusion that the disclosure in the specification was more similar to the circumstance in the Continental Circuits case, where the specification set forth a preference but not a requirement for the process step (citing several instances in the specification supporting this view).  And with regard to the prosecution history, the opinion states the Court rejected GSK's argument because the distinction GSK raised to overcome the asserted prior art reference was directed at another aspect of the method for making the claimed composition.

With regard to damages, the Federal Circuit considered the parties' prior licensing history, wherein Vectura had previously granted GSK a nonexclusive license that had expired in 2016.  This license had had a "tiered structure" ("a royalty of 3% on its first 300 million British pounds in sales, 2% on sales between 300 million and 500 million pounds, and no additional royalties on sales above 500 million pounds") that Vectura's expert used as a "comparable license" in reaching her damages conclusions.  Significantly, however, the expert did not include the cap of no additional royalties after 500 million pounds, based on "changed circumstances."  In contrast. GSK's royalty rate was much lower (only 0.0187%).

GSK argued that Vectura's analysis was flawed because it used the "entire market value" approach rather than distinguishing the non-infringing components of the accused infringing articles.  The Court considered the damages theories to relate to "a rather unusual circumstance," because the choice is usually between where "an entire-market-value royalty base is appropriate only when the patented feature creates the basis for customer demand or substantially creates the value of the component parts, and apportionment is required when an entire-market-value royalty base is inappropriate," citing Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1326 (Fed. Cir. 2014).  Here, however, the Court thought that any such apportionment is contained ("built-in") in the earlier license so re-apportionment was unnecessary.  The panel opined that the District Court properly credited Vectura's expert's testimony regarding the comparability of her damages calculations as a reasonable royalty and the terms of the earlier license.  And with regard to the lack of a royalty cap, the Court held that "[i]t was . . . permissible for the jury to credit Ms. Schenk's testimony and to award damages without applying a royalty cap."

GSK's other grounds for a new trial based on damages was that Vectura's damages expert and counsel mentioned the total sales of GSK's products and that this was prejudicial.  The District Court had found some of these references to be improper but in total that they were not so prejudicial as to warrant a new trial.  Asserting that "[o]n the issue of the impact of improper conduct at trial, the views of the judge who supervised the trial proceedings are entitled to considerable weight,"  Fineman v. Armstrong World Indus., Inc., 980 F.2d 171 (3d Cir. 1992), the Federal Circuit found these disclosures not to be sufficiently prejudicial for it to find the District Court's denial of JMOL to be an abuse of discretion.

Vectura Ltd. v. GlaxoSmithKline LLC (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Bryson and Wallach
Opinion by Circuit Judge Bryson

Supreme Court Denies Another Certiorari Petition on Doctrine of Equivalents

By Kevin E. Noonan --

The Federal Circuit during 2019 and 2020 has issued a spate of decisions on the proper application of the Doctrine of Equivalents (see, e.g., UCB, Inc. v. Watson Laboratories Inc. and Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC) and its related limiting doctrines, prosecution history estoppel (Amgen Inc. v. Coherus BioSciences Inc. and Pharma Tech Solutions, Inc. v. Lifescan, Inc.) and the dedication-disclosure doctrine (Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC and Indivior Inc. v. Dr. Reddy's Laboratories, S.A.).  There then followed, like night follows day, a slew of petitions for certiorari.  The Supreme Court has already denied cert in Actavis Laboratories FL, Inc. v. Nalproprion Pharmaceuticals, Inc., and on Monday, the Court showed equal disinterest in the issue, denying certiorari in Eli Lilly & Co. v. Hospira, Inc.

To recap, this case arose in ANDA litigation over Eli Lilly's U.S. Patent No. 7,772,209 directed to "improved" methods for administering its anticancer drug Alimta® (pemetrexed disodium), a frequent target for generic drugmakers.  The drug itself, an antifolate metabolic inhibitor of thymidylate synthase, inhibits cell growth (normal and malignant) by interfering with production of DNA precursors and hence inhibiting replication.  The anticancer efficacy for this drug (like many anticancer drugs) relies on the greater replicative activity of cancer cells compared with normal cells.

Pemetrexed, and its disodium salt, is not a new drug, being disclosed and claimed in U.S. Patent No. 5,344,932, and Eli Lilly's licensed U.S. Patent No. 4,997,838, that disclosed a large genus of structurally related compounds that encompass pemetrexed but did not disclose the molecule itself.  This reference also taught that "pharmaceutically acceptable bases," such as "alkali metals, alkali earth metals, non-toxic metals, ammonium, and substituted ammonium" could be prepared from the disclosed antifolate inhibitors.

Eli Lilly's own investigations showed that Alimta® administration is nevertheless associated with significant side-effects, including "severe hematologic and immunologic side effects, resulting in infections, nausea, rashes, and even some deaths," which are not uncommon with antifolates according to the '209 patent specification.  The '209 patent claims methods for pemetrexed administration supplemented with folic acid and a methylmalonic acid-lowering agent (including, e.g., vitamin B12), "improved" to the extent that these side effects are reduced.  Claim 12 is representative:

12.  An improved method for administering pemetrexed disodium to a patient in need of chemotherapeutic treatment, wherein the improvement comprises:
    a) administration of between about 350 μg and about 1000 μg of folic acid prior to the first administration of pemetrexed disodium;
    b) administration of about 500 μg to about 1500 μg of vitamin B12, prior to the first administration of pemetrexed disodium; and
    c) administration of pemetrexed disodium.

In a parent application to the '209 patent, broader claims directed to methods for reducing antifolate toxicity recited administration of a broad class of antifolates with methylmalonic acid lowering agents with or without folic acid.  These claims were rejected as being anticipated by an earlier prior art reference or for being obvious over a combination of references.  In response, Eli Lilly amended the rejected claims to pemetrexed disodium and argued that the asserted art either did not recite the pemetrexed disodium or, for overcoming the obviousness rejection, that the art did not suggest vitamin supplementation.

The defendants in ANDA litigation did not request FDA approval for pemetrexed disodium but for a different salt -- the ditromethamine salt -– and argued to the agency that "their choice of the tromethamine cation was immaterial because pemetrexed dissociates from its counterion in solution" and that this salt was known to be safe for pharmaceutical use.  At trial against Dr. Reddy's Laboratories, the District Court construed the term "administration of pemetrexed disodium" to mean "liquid administration of pemetrexed disodium," which "is accomplished by dissolving the solid compound pemetrexed disodium into solution."  Using this construction, the District Court denied defendant's motion for summary judgment of noninfringement on the ground that Eli Lilly was not precluded by prosecution history estoppel to assert that Dr. Reddy's ditromethamine pemetrexed salt was an equivalent to Eli Lilly's claimed disodium salt.  The Court reasoned that the amendment made during the earlier prosecution was only tangentially related to the differences in these salts, the amendment being made to distinguish different antifolate species and not different salt forms thereof.  The District Court also rejected defendant's "dedication to the public" argument with regard to the earlier known antifolate compounds disclosed in the '838 patent because that patent disclosed a large genus comprising thousands of compounds.

In litigation with Hospira, Eli Lilly argued both literal infringement as well as infringement under the doctrine of equivalents, based on Hospira's label that permitted pemetrexed ditromethamine to be reconstituted in saline.  Hospira conceded (subject to appeal) that its product would infringe, and the District Court granted summary judgment against Hospira on both literal infringement and infringement under the doctrine of equivalents.

The Federal Circuit reversed-in-part (regarding literal infringement) and affirmed-in-part (regarding infringement under the Doctrine of Equivalents), in an opinion by Judge Lourie joined by Judges Moore and Taranto.  With regard to DOE infringement, the Court found that the District Court had not erred in finding the substitute salts to be equivalents. With regard to prosecution history estoppel, under Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushki Co., 535 U.S. 722, 733 (2002) the question was whether the amendments made in the earlier patent from which the '209 patent claims priority were made for reasons related to patentability and do not fall within Supreme Court-recognized exceptions.

Eli Lilly did not dispute that its amendments satisfied the fundamental requirements of behavior that raises the estoppel:  that "the amendment in question was both narrowing and made for a substantial reason relating to patentability."  But the District Court found and the Federal Circuit affirmed that prosecution history estoppel did not bar DOE infringement because the amendments made to the claims during prosecution "[bore] no more than a tangential relation to the equivalent in question," citing Festo.  Hospira and Dr. Reddy's Laboratories colorfully argued that "the tangential exception is not a patentee's-buyer's-remorse exception" and that the tangential relationship exception should be construed narrowly, but the Federal Circuit held that appellants had advanced a "too rigid" application of prosecution history estoppel.  The Court agreed with the District Court's assessment that Lilly had narrowed the claims of the earlier, related application to overcome rejection based on treatment with methotrexate, and that "the particular type of salt to which pemetrexed is complexed relates only tenuously to the reason for the narrowing amendment," which was to avoid prior art directed to methotrexate administration.  The panel also refused to adopt Dr. Reddy's position as a bright-line rule, stating that "such a bright-line rule is both contrary to the equitable nature of prosecution history estoppel, [citing Festo], and inconsistent with the equitable spirit that animates the doctrine of equivalents," citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950).

The panel also rejected Dr. Reddy's Laboratories' argument that the "disclosure-dedication" rule, Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co., 285 F.3d 1046, 1054 (Fed. Cir. 2002) (en banc), prevented Lilly from asserting its claims under the Doctrine of Equivalents.  The Federal Circuit agreed with Eli Lilly that this doctrine did not apply where, as here, the patent did not disclose the specific embodiment at issue (here, pemetrexed ditromethamine) and thus the patentee could not have dedicated it to the public.  Despite reference to earlier disclosure comprising about 50 antifolate compounds (none of them pemetrexed) and disclosure related to pharmaceutically acceptable salts thereof (but not ditromethamine), in the absence of express disclosure of pemetrexed ditromethamine the Court did not apprehend a "reason why a skilled artisan would set out on DRL's winding path to cobble together pemetrexed ditromethamine" and thus held that the dedication-disclaimer rule did not preclude Eli Lilly from asserting infringement under the doctrine of equivalents.

This case provided a full-throated analysis of proper application of the DOE and both prosecution history estoppel and the disclosure-dedication rule.  The Supreme Court found no reason to disturb the Federal Circuit's treatment of its doctrines, providing a refreshing affirmance (or at least a resistance to meddle) for how the appellate court charged with harmonizing U.S. patent law had properly fulfilled its unique role in the Federal appellate regime on this issue.

EMED Technologies Corp. v. Repro-Med Systems, Inc. (Fed. Cir. 2020)

    By Donald Zuhn --

In April, the Federal Circuit affirmed a decision by the U.S. District Court for the Eastern District of Texas granting summary judgment in favor of Repro-Med Systems, Inc., finding that Repro-Med did not infringe U.S. Patent No. 8,961,476.  EMED Technologies Corp., which owns the '476 patent, had filed suit against Repro-Med, asserting that Repro-Med's safety needle devices infringed the '476 patent.

The '476 patent is directed to medical needle devices with built-in safety structures to protect users from the sharp tip of the medical needle, with the specification describing various embodiments, and the relevant embodiment being depicted in Figure 10:

As shown in Figure 10, the safety device includes a needle 208 between a pair of opposing "wings" 216 and 218, which when rotated into a closed position, house the needle into a "groove" (which is not labeled in Figure 10, but which is shown in the figure as a narrow recess in wing 216).

In response to EMED's complaint, Repro-Med petitioned for inter partes review of claims 1-10 of the '476 patent.  The Board instituted the IPR and found claims 1-8 and 10 to be unpatentable.  In an earlier decision, the Federal Circuit affirmed the Board's determination, leaving claim 9 as the only claim at issue before the District Court.  Claim 9 depends from claim 8, which depends from claim 1.  Claims 1, 8, and 9 recite (with emphasis in claims 8 and 9 from the panel opinion):

1.  A device for protecting a user from a sharp tip of a medical needle, the device comprising:
    a central body portion;
    the medical needle having a first end in fluid connection with a delivery tube, and a second end distal from the central body portion including the sharp tip;
    a pair of wings, each wing of the pair of wings having an inner region and an outer region, the inner region of each wing in attachment to the central body portion, the outer region of each wing extending away from the central body portion, the pair of wings disposed in opposition to one another with the medical needle positioned therebetween, and the pair of wings being selectively positionable from an open position to a closed position, where the wings in the open position are spaced apart from each other to expose the medical needle to al-low placement of the medical needle into a treatment site and delivery of a medicinal fluid, and wherein the wings in the closed position cover the medical needle to protect against accidental needle stick injury from the medical needle;
    a mechanical fastener disposed on at least one wing of the pair of wings, the mechanical fastener con-figured to selectively attach the pair of wings together with the medical needle positioned therebetween so as to protect against accidental needle stick injury from the sharp tip of the medical needle;
    the mechanical fastener including a lip extending along at least a portion of a perimeter of at least one wing of the pair of wings, and a mating portion along a perimeter of at least one other wing of the pair of wings, and wherein the mating portion and the lip are configured to align the at least one wing relative to the at least one other wing in the closed position.

8.  The device in accordance with claim 1, wherein at least one of the pair of wings is formed with a groove having a size configured for housing at least a portion of the medical needle when the pair of wings are in the closed position.

9.  The device in accordance with claim 8, wherein the groove is formed in a single one of the pair of wings.

In response to EMED's assertion of infringement, Repro-Med argued that its safety needle devices differ with respect to the exposed length of the needle as measured from the housing to the sharp tip.  Repro-Med provided the annotated figures and description of those figures set forth below:

[E]ach wing (E) has a needle facing surface that in-cludes a smooth rectangular section (A) interposed between two thinned areas (B and C). A first thinned area (B) is provided between the housing (D) and the wing (E), thereby allowing each wing (E) to move between open and closed positions. A second thinned area (C) is provided between the rectangular section (A) and the outer section (F) of the wing (E) bearing the plug (G) and the wing (E) bearing the socket (H). This second thinned area (C) allows the outer section (F) of each wing (E) to bend relative to its adjacent smooth rectangular section (A), allowing the plug (G) and the socket (H) to engage and thereby lock the wings together in the closed position about the medical needle. Each of the rectangular surface sections (A) have a ridge (I) adjacent the second thinned area (C), the ridge (I) extending perpendicular to the length (J) of the medical needle extending from the housing.

At trial, the District Court construed several terms relating to the "groove" of claim 9, determining that the term "groove" means "a long narrow cut or depression," and adopting the parties' agreed-upon constructions of the claimed groove "having a size configured for housing at least a portion of the medical needle" to mean "having a size designed for housing at least a portion of the medical needle that includes the sharp tip," and the phrase "wherein the groove is formed in a single one of the pair of wings" to mean "wherein the groove is formed in only one of the pair of wings."  Repro-Med moved for summary judgment of noninfringement, and a magistrate judge recommended that summary judgement be granted in favor of Repro-Med.  Because there is no space to house the needle in Repro-Med's safety needle devices, the magistrate recommended a finding of no literal infringement.  The magistrate also recommended a finding of no infringement under the doctrine of equivalents because treating portions of Repro-Med's safety needle devices as the claimed "groove" would vitiate the claim limitations of "a groove having a size configured for housing at least a portion of the medical needle when the pair of wings are in the closed position" and "wherein the groove is formed in a single one of the pair of wings."  The District Court adopted the magistrate's recommendation and granted summary judgment of noninfringement in favor of Repro-Med.

The Federal Circuit begins by explaining that under the District Court's constructions, which neither party disputed, the claimed groove is a "a long narrow cut or depression" formed in "only one of the pair of wings," "ha[s] a size designed for housing at least a portion of the medical needle that includes the sharp tip," and must perform the specific function of housing the needle "when the pair of wings are in the closed position."  The opinion notes, however, that Repro-Med's safety needle devices lack a "groove" as claimed and protect the user from the needle in a different way:

Although EMED argued that the "groove" is self-evident in the images above, the Federal Circuit disagreed, explaining that "EMED's theory fails to account for the requirement that the groove 'house[s]' the needle 'when the pair of wings are in the closed position.'"  The Federal Circuit therefore agreed with the District Court that there was no genuine dispute that Repro-Med's safety needle devices do not contain the claimed groove, and therefore do not literally infringe claim 9 of the '476 patent.

With respect to infringement under the doctrine of equivalents, the Federal Circuit noted that the claims explicitly require that the "groove" must house the needle when the wings are in the closed position, and explained that "[t]o extend the claimed 'groove' to encompass structures that do not house the needle would vitiate that claim limitation."  The Federal Circuit, therefore, affirmed the District Court's grant of summary judgment of noninfringement.

EMED Technologies Corp. v. Repro-Med Systems, Inc. (Fed. Cir. 2020)
Nonprecedential disposition
Panel: Circuit Judges Chen, Schall, and Hughes
Opinion by Circuit Judge Chen

Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC (Fed. Cir. 2020)

By Kevin E. Noonan --

Infringement under the doctrine of equivalents (as a basis of a successful cause of action having renewed vigor before the Federal Circuit recently (see, e.g., "Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC") is most frequently rebutted by the doctrine of prosecution history estoppel ("Pharma Tech Solutions, Inc. v. Lifescan, Inc.").  This is not the only defense available to an accused infringer; its sister doctrine, of dedication-disclosure, can be equally effective under circumstances where a patentee has disclaimed aspects or embodiments that could fall within the scope of equivalents but was disclaimed to avoid prior art, for lack of utility, or insufficiency of disclosure under 35 U.S.C. § 112.  Last Friday, the Federal Circuit applied the dedication-disclosure doctrine to affirm the District Court's dismissal on the pleadings of plaintiff Eagle Pharmaceuticals' infringement allegations under the doctrine of equivalents in Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC.

The case arose in ANDA litigation over Eagle's bendamustine formulation (BELRAPZO®).  Eagle asserted U.S. Patent Nos. 9,265,831; 9,572,796; 9,572,797; and 10,010,533 in the litigation; claim 1 of the '796 patent was considered representative by the parties and hence the Court:

1.  A non-aqueous liquid composition comprising:
    bendamustine, or a pharmaceutically acceptable salt thereof;
    a pharmaceutically acceptable fluid comprising a mixture of polyethylene glycol and propylene glycol, wherein the ratio of poly- ethylene glycol to propylene glycol in the pharmaceutically acceptable fluid is from about 95:5 to about 50:50; and
    a stabilizing amount of an antioxidant;
    wherein the composition has less than about 5% total impurities after 15 months of storage at about 5° C., as calculated on a normalized peak area response basis as determined by high performance liquid chromatography at a wavelength of 223 nm.

The emphasized limitation was the basis of the dispute, Slayback conceding that in all other respects its competing generic formulation literally infringed Eagle's claims.  Eagle contended in its complaint that that term was infringed under the doctrine of equivalents, wherein the ethanol used in Slayback's product was equivalent to Eagle's polyethylene glycol.  Slayback countered with a motion under Fed. R. Civ. Pro. 12(c) that Eagle was barred by the dedication-disclosure doctrine from prevailing on its doctrine of equivalents allegation, because the '796 specification (and the specifications of all the other asserted patents) disclosed but did not claim ethanol-containing embodiments.

Set forth in the Federal Circuit's opinion, as relied upon by the District Court, are almost a half dozen citations to the specification reciting ethanol as a "pharmaceutically acceptable fluid" used in the claimed formulation (including ones where ethanol is a dreaded "preferred" embodiment).  Eagle countered by asserting that ethanol was properly a component of the claimed invention only in the presence of chloride salts (which were not claimed) and not in the claimed embodiments comprising an antioxidant.  Eagle supported its assertions with a declaration from an expert witness that the skilled worker would appreciate this distinction and understand that patentee had not disclaimed ethanol-comprising embodiments, properly formulated; there was no rebuttal of this testimony by Slayback.  Refusing to consider the expert's testimony (and opining that Eagle was attempting to "manufacture a factual dispute"), the District Court held for Slayback and granted its motion to dismiss as a matter of law; this appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Reyna, joined by Judges O'Malley and Chen.  The opinion sets out the relationship between the doctrine of equivalents as defined by the Supreme Court in Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950), and Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997), and its limitation by the disclosure-dedication doctrine in Johnson & Johnston Assoc. v. R.E. Servs., 285 F.3d 1046 (Fed. Cir. 2002) (en banc).  The equitable principle of the doctrine recognized by the Court is that it "reinforces 'the primacy of the claims in defining the scope of the patentee's exclusive right.'"  To be properly applied, the specification must "disclose[] unclaimed subject matter with 'such specificity that one of ordinary skill in the art could identify the subject matter that had been disclosed and not claimed,'" citing PSC Comput. Prods., Inc. v. Foxconn Int'l, Inc., 355 F.3d 1353, 1360 (Fed. Cir. 2004).

The panel appreciated Eagle's challenge to be procedural, regarding whether the District Court properly dismissed its complaint on the pleadings, as well as on the merits of whether plaintiff had disclaimed ethanol-comprising embodiments by disclosing but not claiming them.  The Court recognized that Eagle claimed its bendamustine formulations were disclosed in three alternatives:  "(i) chloride salt formulations; (ii) antioxidant formulations; and (iii) dimethyl sulfoxide ("DMSO") formulations," and that ethanol was an alternative only in the "unclaimed chloride salt formulations" (emphasis in opinion).  According to Eagle, the skilled worker would appreciate that distinction and that it had not disclaimed ethanol as an equivalent to polyethylene glycol in other formulations.  As pithily put in the opinion, the Court "disagreed."

Citing Johnson, the opinion asserts that "[t]he disclosure-dedication doctrine does not require the specification to disclose the allegedly dedicated subject matter in an embodiment that exactly matches the claimed embodiment"; indeed, according to the opinion the patentee made arguments (unsuccessfully) in that case similar to Eagle's arguments here.  The issue of whether the disclosure-dedication doctrine applies is resolved "only [where] the specification disclose[s] the unclaimed matter 'as an alternative to the relevant claim limitation,'" citing Pfizer, Inc. v. Teva Pharm. USA, Inc., 429 F.3d 1364, 1378 (Fed. Cir. 2005).  The panel found no qualifications in the specification as now asserted by Eagle regarding limitations to where ethanol is or is not an alternative to polyethylene glycol.  The Court was "not persuaded" that the facts here track those in Pfizer (where the Court deigned not to apply the doctrine), on the grounds that in Pfizer the limitation in dispute was directed to a unique, specific purpose ("a suitable amount of a saccharide to inhibit hydrolysis"; emphasis in opinion) whereas in this case the alternatives all have only one purpose (i.e., to be "pharmaceutically acceptable").

Turning to Eagle's procedural objections, the opinion sets these forth as 1) there was a factual dispute that precluded judgment; 2) the District Court did not draw all inferences in non-movant Eagle's favor; and 3) the District Court did not consider its proffered expert's testimony.  In rejecting these contentions, the opinion notes that considering evidence (like Eagle's expert's) outside the pleadings is within the District Court's discretion (and in doing so converts the motion to be one for summary judgment), citing Kulwicki v. Dawson, 969 F.2d 1454, 1462 (3d Cir. 1992), and 5C WRIGHT & MILLER, FED. PRAC. & PROC. CIV. § 1371 (3d ed.).  The standard of review is thus abuse of discretion and the panel found no such abuse in relying on the disclosure in the asserted patents themselves.  Nor was there any error in deciding the issue as a matter of law, and the opinion states that "[e]xpert testimony is not always required for a district court to determine how a skilled artisan would understand a patent's disclosure and claimed invention," citing Union Carbide Corp. v. Am. Can Co., 724 F.2d 1567, 1573 (Fed. Cir. 1984), and Amgen Inc. v. Coherus BioSciences Inc., 931 F.3d 1154, 1160 (Fed. Cir. 2019).

Finding these and all other Eagle arguments unpersuasive, the Federal Circuit affirmed.

Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC (Fed. Cir. 2020)
Panel: Circuit Judges O'Malley, Reyna, and Chen
Opinion by Circuit Judge Reyna

Biogen Int'l v. Banner Life Sciences LLC (Fed. Cir. 2020)

By Kevin E. Noonan --

In 1984, Senator Orrin Hatch (R-UT) and Rep. Henry Waxman (D-CA) shepherded a grand legislative compromise through Congress that balanced the rights and solved inefficient regulatory consequences for both branded and generic drug makers.  Forever known as the Hatch-Waxman Act (formally, the Drug Price Competition and Patent Term Restoration Act), certain of the provisions created a safe harbor for generic drugs to be tested for purposes related to regulatory approval without incurring infringement liability (codified at 35 U.S.C. § 271(e)(1)) as well as a pathway for generic drug makers to challenge patents listed by branded drug makers as being non-infringed, invalid, or unenforceable and litigation (ANDA litigation) to resolve these allegations (codified at codified at 35 U.S.C. § 271(e)(2)).  For branded drug makers, the Act provided for extension of patent term (PTE) to make up for regulatory delay in obtaining marketing approval (codified at 35 U.S.C. § 156 et seq.).  Litigation has ensued robustly under § 271(e)(2) and PTE's obtained by numerous branded drugs in the 35+ years since enactment of the Hatch-Waxman Act, but the proper application of the Act with regard to PTE provisions continues to be litigated, most recently in Biogen Int'l v. Banner Life Sciences LLC (ANDA litigation is almost a patent law specialty, for good or ill; see "Yet Another Study Suggesting Changes in Hatch-Waxman Regime").

The case arose in an infringement action by Biogen asserting U.S. Patent No. 7,619,001 against Banner over Banner's application under 21 U.S.C. § 355(b)(2) (a § 505(b)(2) application) for its generic version of Biogen's Tecfidera® (dimethylfumarate), a drug for treating multiple sclerosis.  As set forth in the Federal Circuit's opinion, DMF is metabolized to the monomethyl form (MMF), as illustrated in this figure:

Claim 1 of the '001 patent was considered representative by the Court:

1.  A method of treating multiple sclerosis comprising administering, to a patient in need of treatment for multiple sclerosis, an amount of a pharmaceutical preparation effective for treating multiple sclerosis, the pharmaceutical preparation comprising
at least one excipient or at least one carrier or at least one combination thereof; and
dimethyl fumarate, methyl hydrogen fumarate, or a combination thereof.

Importantly for the issues before the Court, Banner obtained its approval for the monomethyl form, which would be infringing as being recited in the '001 patent claims if and only if the '001 was entitled to extension of term for this drug.  As set forth in more detail below in the context of the Federal Circuit opinion, PTE is limited to claims that encompass the approved drug and extended claims can be asserted only against infringement for drugs subject to FDA approval.

The District Court granted Banner's motion to dismiss under Fed. R. Civ. P. 12(c) on the grounds that the PTE did not apply to Banner's product because, while encompassed by the '001 patent claims, those claims were not entitled to PTE because MMF was not the drug approved by the FDA for which Biogen was entitled to PTE for regulatory delay.  The District Court rejected Biogen's argument that, for method claims, the extension applied to any approved drug that fell within the scope of the claim.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges Moore and Chen.  The Court based its affirmance on its interpretation of the statute, specifically that "the scope of a patent term extension under 35 U.S.C. § 156 only includes the active ingredient of an approved product, or an ester or salt of that active ingredient, and the product at issue does not fall within one of those categories."  The issue for the Court was the proper interpretation of § 156(f), which "defines "product" as "the active ingredient of . . . a new drug . . . including any salt or ester of the active ingredient."  § 156(f)(2)(A).

Biogen in arguing against the District Court's decision cites Pfizer Inc. v. Dr. Reddy's Labs., Ltd., 359 F.3d 1361 (Fed. Cir. 2004) for the proposition that "product" encompasses "the de-esterified form [here, MMF], particularly where 'a later applicant's patentably indistinct drug product . . . relies on the patentee's clinical data'" (which was the case for Banner's application under § 505(b)(2)).  Biogen contended the term "active ingredient" meant "active moiety" and the proper interpretation was not governed by Glaxo Ops. UK Ltd. v. Quigg, 894 F.2d 392, 395 (Fed. Cir. 1990), which Banner argued excluded de-esterified forms of an active ingredient.

The Federal Circuit rejected both parties' recourse to case law and relied on the plain meaning of the statute.  According to the Court, the term "active ingredient" has a specific definition as "any component that is intended to furnish pharmacological activity or other direct effect," citing 21 C.F.R. § 210.3(b)(7).  It also "must be present in the drug product when administered," citing Hoechst-Roussel Pharm., Inc. v. Lehman, 109 F.3d 756, 759 n.3 (Fed. Cir. 1997), and is itself defined by what the FDA approved and is specified on the drug label under 21 U.S.C. § 352(e)(1)(A)(ii); 21 C.F.R. § 201.100(b)(4).

Here, MMF is not the approved product and is not specified on the label, and thus Banner's activities (which would have been infringing before expiry of the unextended term of the patent) were not infringing because, as to its embodiments, the '001 patent had expired.

Interestingly, while the statute expressly encompasses esters in the definition of an active ingredient, de-esterified active ingredients like MMF are not.  Thus the Federal Circuit established a well-defined (perhaps arising to a "bright line") rule that:

All these precedents, and now this case, rest on the same holding: the term "product," defined in § 156(f) as the "active ingredient . . . including any salt or ester of the active ingredient," has a plain and ordinary meaning that is not coextensive with "active moiety."  It encompasses the active ingredient that exists in the product as administered and as approved—as specified by the FDA and designated on the product's label—or changes to that active ingredient which serve only to make it a salt or an ester.  It does not encompass a metabolite of the active ingredient or its deesterified form.

Biogen Int'l v. Banner Life Sciences LLC (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Moore, and Chen
Opinion by Circuit Judge Lourie