CAFC affirms DNJ in budesonide case
In Astrazeneca v. Apotex, the CAFC concluded that
the district court of New Jersey did not abuse its discretion by granting
the preliminary injunction and did not err in determining that the kit claims are invalid.
As to a claim term issue:
Here, the specification of the ’603 Patent supports the
conclusion that one of ordinary skill in the art would have
understood the term “budesonide composition” to mean
“budesonide dispersed in a solvent in the form of a solu-
tion or suspension” as construed by the district court. The
specification consistently describes the budesonide com-
positions in that way. The SUMMARY OF THE
INVENTION states that “the invention features a method
of treating a patient suffering from a respiratory disease
in which a composition, e.g., a suspension, of budesonide
is administered by nebulization,” ’603 Patent col.1 ll.29-
31, and explains a few sentences later that “[t]he drug can
be provided as an aqueous suspension in which the
budesonide is suspended in a solvent,” id. col.1 ll.37-39.
The SUMMARY OF THE INVENTION notes that “the
invention also features a kit . . . including a budesonide
composition in a sealed container, the composition includ-
ing 0.05 mg to 15 mg budesonide and a solvent.” Id. col.2
ll.1-6. Similarly, the DETAILED DESCRIPTION states
that “[t]he drug can be delivered in a solvent, e.g., in the
form of a solution or a suspension.” Id. col.3 ll.22-23. The
DETAILED DESCRIPTION goes on to note that nebuliz-
able budesonide is packaged in vials containing “mi-
cronized budesonide suspended in a volume, e.g., 2 ml, of
solvent.” Id. col.4 ll.12-14. The EXAMPLES section
describes two clinical studies performed to determine the
safety and efficacy of administering budesonide once
daily. The patent discloses that in each study
“[b]udesonide was administered once per day as a lized suspension.”
Id. col.4 ll.65-67, col.7 ll.57-60. (...)
Neither of the liposome
formulations discussed in the specification use liposomes
in the manner described in the ’528 Patent. The ’528
Patent describes entrapping budesonide in a liposome.
Such entrapment separates the budesonide from the
surrounding solvent. By contrast, the reference in the
specification to placing liposomes in a suspension as an
excipient indicates a formulation where budesonide and liposomes
are in the same suspension, with the liposomes
independent of and apart from the budesonide, which
remains in contact with the solvent. The statement that
“[s]olutions or suspensions can be encapsulated in lipo-
somes or biodegradable microspheres” indicates that
budesonide either dissolved or floating in a solvent may be
placed within a liposome, not that the term “budesonide
composition” includes budesonide separated from a sol-
vent by a liposome as described in the ’528 Patent.
As to expert testimony:
This court
sees no error in relying on uncontested expert testimony
to explain how the invention described in the intrinsic
record functions. See Netword, LLC v. Centraal Corp.,
242 F.3d 1347, 1356 (Fed. Cir. 2001) (“[A] district court
can not be faulted for relying on the only expertt explanaion of the
technology that was presented.”).
A problem with an advertisement:
As discussed above, a British medical journal pub-
lished the Thorax advertisement in 1994, more than one
year before the filing of the application that issued as the ’603 Patent.
(...)
The district court found
that the advertisement does not anticipate the asserted
method claims, finding persuasive the explanation of
AstraZeneca’s expert, Dr. Bradley Chipps, that the adver-
tisement does not explicitly or inherently disclose once-
daily dosing because the advertisement was published
“before we had any information or historical perspective
that once a day therapy worked for anyone.”
AND
Apotex argues that in con-
cluding otherwise the district court improperly imposed a
temporal limitation on the anticipation inquiry, violating
the oft-repeated axiom “that which would literally in-
fringe if later in time anticipates if earlier.” AstraZeneca
responds that because the drug was only approved for
twice-daily use and was not known to be safe or effective
when administered once daily, there is nothing to show
that one of skill in the art at the time the patent applica-
tion was filed would have understood the advertisement
to disclose once-daily dosing. AstraZeneca thus argues
that the Thorax advertisement was not enabling and for
that reason cannot be considered anticipatory. In any
event, AstraZeneca argues that the reference simply does
not disclose once-daily dosing.
AND
Rather, “the dispositive question regarding
anticipation [is] whether one skilled in the art would
reasonably understand or infer from a [prior art refer-
ence]” that every claim element is disclosed in that refer-
ence. In re Baxter Travenol Labs, 952 F.2d 388, 390 (Fed.
Cir. 1991). And although a reference must be enabling to
be anticipatory, see Sanofi-Synthelabo, 550 F.3d at 1082,
unlike enablement under § 112, a reference need not, as
AstraZeneca suggests, demonstrate utility or efficacy to
be enabling in the context of § 102, see In re Gleave, 560
F.3d 1331, 1335-36 (Fed. Cir. 2009) (“[A] reference need
disclose no independent use or utility to anticipate a claim
under § 102.”); Bristol-Myers Squibb Co. v. Ben Venue
Labs., Inc., 246 F.3d 1368, 1379 (Fed. Cir. 2001). As
explained in Rasmusson v. SmithKline Beecham Corp.,
413 F.3d 1318, 1325 (Fed. Cir. 2005), the reason for this
distinction “is that [§] 112 ‘provides that the specification
must enable one skilled in the art to ‘use’ the invention
whereas [§] 102 makes no such requirement as to an
anticipatory disclosure.’" Id. (quoting In re Hafner, 410 F.2d 1403, 1405 (CCPA 1969 )).
Inducement to infringe
“Whoever actively induces infringement of a patent
shall be liable as an infringer.” 35 U.S.C. § 271(b).
“[I]nducement requires that the alleged infringer know-
ingly induced infringement and possessed specific intent
to encourage another’s infringement.” DSU Med. Corp. v.
JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc in
relevant part) (citation omitted) (internal quotation
marks omitted). “Infringement is a question of fact re-
viewed for clear error.” Golden Blount, Inc. v. Robert H.
Peterson, Co., 438 F.3d 1354, 1361 (Fed. Cir. 2006) (cita-
tion omitted). “A factual finding is clearly erroneous
when, despite some supporting evidence, the reviewing
court is left with the definite and firm conviction that a
mistake has been made.” Id. at 1361 (citation omitted).
(...)
Tau testified that, in addition to
removing all explicit references to once-daily dosing, at
the advice of counsel, Apotex had also inserted the phrase
“by administration twice-daily” in sections of the proposed
label that Apotex included with its ANDA. Prelim. Inj.
Hr’g Tr. 19, 21-22, May 20, 2009. She explained that the
FDA responded by instructing Apotex to delete this
phrase and sending Apotex a template containing the
language Apotex was to include in the proposed label. Id.
at 22-23.
(...)
Tau acknowledged that she knew that FDA decisions
could be appealed, but stated that she was not familiar
with the process, as she had never had to appeal an FDA
decision regarding an ANDA. Id. at 37, 40.
(...)
However, “liability for active induce-
ment may be found ‘where evidence goes beyond a prod-
uct’s characteristics or the knowledge that it may be put
to infringing uses, and shows statements or actions di-
rected to promoting infringement.’” Ricoh Co. v. Quanta
Computer Inc., 550 F.3d 1325, 1341 (Fed. Cir. 2008)
(quoting Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
Ltd. (“Grokster”), 545 U.S. 913, 935 (2005)). As the Su-
preme Court explained in Grokster in the context of
infringement under the copyright laws, “[e]vidence of
active steps . . . taken to encourage direct infringement,
such as advertising an infringing use or instructing how
to engage in an infringing use, show an affirmative intent
that the product be used to infringe.” 545 U.S. at 936
(internal quotation marks and citations omitted).
(...)
Apotex asserts that the
label does not instruct users to titrate down from a spe-
cific starting dose; instead, the label contains a general
recommendation that is applicable to any dosing regimen.
This court disagrees. In the context of specific intent,
it is irrelevant that some users may ignore the warnings
in the proposed label. The pertinent question is whether
the proposed label instructs users to perform the patented
method. If so, the proposed label may provide evidence of
Apotex’s affirmative intent to induce infringement.
Gun to head moment:
This court agrees with AstraZeneca. Both Astra-
Zeneca and Apotex rely on the testimony of Richard
Fante, the president of AstraZeneca. Fante admitted that
AstraZeneca and Teva did forecast certain market data
during the settlement negotiation, but characterized the
negotiation as a “gun-to-head moment” and explained
that the companies relied mostly on “the experience we’d
had as executives” when generating the forecast. Prelim.
Inj. Hr’g Tr. 63-64, Apr. 30, 2009. Given the lack of
reliable data regarding a market with only AstraZeneca
and Teva, this court is not left with a definite and firm
conviction that the district court erred by concluding that
the damages AstraZeneca would incur under the settlement
agreement would be incalculable.
The layoff of employees:
However, as noted by AstraZeneca, Fante
later clarified that if Apotex and Teva were both in the
market that “in that scenario we would have to have a
layoff [in the manufacturing facility].” Id. Moreover,
when asked what effect Apotex’s launch would have on
AstraZeneca employees, Fante explained that
“[u]ndoubtedly . . . I would have to have a further reduc-
tion in the size of the U.S. workforce.” Id. at 47. Simi-
larly, when asked whether this reduction would occur if
Apotex launched its product after December 15, he stated, “Absolutely.”
The kit claims and printed matter:
This court has generally found printed matter to fall
outside the scope of § 101. See In re Chatfield, 545 F.2d
152, 157 (CCPA 1976) (“Some inventions, however meri-
torious, do not constitute patentable subject matter, e.g.,
printed matter . . . .” (citation omitted)). However, as
observed by the district court, this court has long recog-
nized an exception to this general rule: If there is a “func-
tional relationship” between the printed matter and its
substrate, the printed matter may serve to distinguish the
invention from the prior art. See In re Miller, 418 F.2d
1392, 1396 (CCPA 1969); In re Gulack, 703 F.2d 1381, 1385-87 (Fed. Cir. 1983).
This court considered the printed matter exception in
Ngai, a case similar to the one now before us. In Ngai,
the Board affirmed the rejection of a claim reciting a kit
comprising instructions to amplify ribonucleic acids. The
Board found that the only difference between the claimed
kit and the prior art was the content of the claimed in-
structions. Concluding that this content was not func-
tionally related to the kit, the Board found that the claim
was anticipated by the prior art. This court affirmed,
rejecting the argument that the addition of new printed
matter to a known product makes the product patentable.
This court reasoned that “the printed matter in no way
depends on the kit, and the kit does not depend on the
printed matter. All that the printed matter does is teach
a new use for an existing product.” Ngai, 367 F.3d at
1339.
Judge Linn dissented in part, citing to
Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d
1343, 1359 (Fed. Cir. 2001)
the district court of New Jersey did not abuse its discretion by granting
the preliminary injunction and did not err in determining that the kit claims are invalid.
As to a claim term issue:
Here, the specification of the ’603 Patent supports the
conclusion that one of ordinary skill in the art would have
understood the term “budesonide composition” to mean
“budesonide dispersed in a solvent in the form of a solu-
tion or suspension” as construed by the district court. The
specification consistently describes the budesonide com-
positions in that way. The SUMMARY OF THE
INVENTION states that “the invention features a method
of treating a patient suffering from a respiratory disease
in which a composition, e.g., a suspension, of budesonide
is administered by nebulization,” ’603 Patent col.1 ll.29-
31, and explains a few sentences later that “[t]he drug can
be provided as an aqueous suspension in which the
budesonide is suspended in a solvent,” id. col.1 ll.37-39.
The SUMMARY OF THE INVENTION notes that “the
invention also features a kit . . . including a budesonide
composition in a sealed container, the composition includ-
ing 0.05 mg to 15 mg budesonide and a solvent.” Id. col.2
ll.1-6. Similarly, the DETAILED DESCRIPTION states
that “[t]he drug can be delivered in a solvent, e.g., in the
form of a solution or a suspension.” Id. col.3 ll.22-23. The
DETAILED DESCRIPTION goes on to note that nebuliz-
able budesonide is packaged in vials containing “mi-
cronized budesonide suspended in a volume, e.g., 2 ml, of
solvent.” Id. col.4 ll.12-14. The EXAMPLES section
describes two clinical studies performed to determine the
safety and efficacy of administering budesonide once
daily. The patent discloses that in each study
“[b]udesonide was administered once per day as a lized suspension.”
Id. col.4 ll.65-67, col.7 ll.57-60. (...)
Neither of the liposome
formulations discussed in the specification use liposomes
in the manner described in the ’528 Patent. The ’528
Patent describes entrapping budesonide in a liposome.
Such entrapment separates the budesonide from the
surrounding solvent. By contrast, the reference in the
specification to placing liposomes in a suspension as an
excipient indicates a formulation where budesonide and liposomes
are in the same suspension, with the liposomes
independent of and apart from the budesonide, which
remains in contact with the solvent. The statement that
“[s]olutions or suspensions can be encapsulated in lipo-
somes or biodegradable microspheres” indicates that
budesonide either dissolved or floating in a solvent may be
placed within a liposome, not that the term “budesonide
composition” includes budesonide separated from a sol-
vent by a liposome as described in the ’528 Patent.
As to expert testimony:
This court
sees no error in relying on uncontested expert testimony
to explain how the invention described in the intrinsic
record functions. See Netword, LLC v. Centraal Corp.,
242 F.3d 1347, 1356 (Fed. Cir. 2001) (“[A] district court
can not be faulted for relying on the only expertt explanaion of the
technology that was presented.”).
A problem with an advertisement:
As discussed above, a British medical journal pub-
lished the Thorax advertisement in 1994, more than one
year before the filing of the application that issued as the ’603 Patent.
(...)
The district court found
that the advertisement does not anticipate the asserted
method claims, finding persuasive the explanation of
AstraZeneca’s expert, Dr. Bradley Chipps, that the adver-
tisement does not explicitly or inherently disclose once-
daily dosing because the advertisement was published
“before we had any information or historical perspective
that once a day therapy worked for anyone.”
AND
Apotex argues that in con-
cluding otherwise the district court improperly imposed a
temporal limitation on the anticipation inquiry, violating
the oft-repeated axiom “that which would literally in-
fringe if later in time anticipates if earlier.” AstraZeneca
responds that because the drug was only approved for
twice-daily use and was not known to be safe or effective
when administered once daily, there is nothing to show
that one of skill in the art at the time the patent applica-
tion was filed would have understood the advertisement
to disclose once-daily dosing. AstraZeneca thus argues
that the Thorax advertisement was not enabling and for
that reason cannot be considered anticipatory. In any
event, AstraZeneca argues that the reference simply does
not disclose once-daily dosing.
AND
Rather, “the dispositive question regarding
anticipation [is] whether one skilled in the art would
reasonably understand or infer from a [prior art refer-
ence]” that every claim element is disclosed in that refer-
ence. In re Baxter Travenol Labs, 952 F.2d 388, 390 (Fed.
Cir. 1991). And although a reference must be enabling to
be anticipatory, see Sanofi-Synthelabo, 550 F.3d at 1082,
unlike enablement under § 112, a reference need not, as
AstraZeneca suggests, demonstrate utility or efficacy to
be enabling in the context of § 102, see In re Gleave, 560
F.3d 1331, 1335-36 (Fed. Cir. 2009) (“[A] reference need
disclose no independent use or utility to anticipate a claim
under § 102.”); Bristol-Myers Squibb Co. v. Ben Venue
Labs., Inc., 246 F.3d 1368, 1379 (Fed. Cir. 2001). As
explained in Rasmusson v. SmithKline Beecham Corp.,
413 F.3d 1318, 1325 (Fed. Cir. 2005), the reason for this
distinction “is that [§] 112 ‘provides that the specification
must enable one skilled in the art to ‘use’ the invention
whereas [§] 102 makes no such requirement as to an
anticipatory disclosure.’" Id. (quoting In re Hafner, 410 F.2d 1403, 1405 (CCPA 1969 )).
Inducement to infringe
“Whoever actively induces infringement of a patent
shall be liable as an infringer.” 35 U.S.C. § 271(b).
“[I]nducement requires that the alleged infringer know-
ingly induced infringement and possessed specific intent
to encourage another’s infringement.” DSU Med. Corp. v.
JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc in
relevant part) (citation omitted) (internal quotation
marks omitted). “Infringement is a question of fact re-
viewed for clear error.” Golden Blount, Inc. v. Robert H.
Peterson, Co., 438 F.3d 1354, 1361 (Fed. Cir. 2006) (cita-
tion omitted). “A factual finding is clearly erroneous
when, despite some supporting evidence, the reviewing
court is left with the definite and firm conviction that a
mistake has been made.” Id. at 1361 (citation omitted).
(...)
Tau testified that, in addition to
removing all explicit references to once-daily dosing, at
the advice of counsel, Apotex had also inserted the phrase
“by administration twice-daily” in sections of the proposed
label that Apotex included with its ANDA. Prelim. Inj.
Hr’g Tr. 19, 21-22, May 20, 2009. She explained that the
FDA responded by instructing Apotex to delete this
phrase and sending Apotex a template containing the
language Apotex was to include in the proposed label. Id.
at 22-23.
(...)
Tau acknowledged that she knew that FDA decisions
could be appealed, but stated that she was not familiar
with the process, as she had never had to appeal an FDA
decision regarding an ANDA. Id. at 37, 40.
(...)
However, “liability for active induce-
ment may be found ‘where evidence goes beyond a prod-
uct’s characteristics or the knowledge that it may be put
to infringing uses, and shows statements or actions di-
rected to promoting infringement.’” Ricoh Co. v. Quanta
Computer Inc., 550 F.3d 1325, 1341 (Fed. Cir. 2008)
(quoting Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
Ltd. (“Grokster”), 545 U.S. 913, 935 (2005)). As the Su-
preme Court explained in Grokster in the context of
infringement under the copyright laws, “[e]vidence of
active steps . . . taken to encourage direct infringement,
such as advertising an infringing use or instructing how
to engage in an infringing use, show an affirmative intent
that the product be used to infringe.” 545 U.S. at 936
(internal quotation marks and citations omitted).
(...)
Apotex asserts that the
label does not instruct users to titrate down from a spe-
cific starting dose; instead, the label contains a general
recommendation that is applicable to any dosing regimen.
This court disagrees. In the context of specific intent,
it is irrelevant that some users may ignore the warnings
in the proposed label. The pertinent question is whether
the proposed label instructs users to perform the patented
method. If so, the proposed label may provide evidence of
Apotex’s affirmative intent to induce infringement.
Gun to head moment:
This court agrees with AstraZeneca. Both Astra-
Zeneca and Apotex rely on the testimony of Richard
Fante, the president of AstraZeneca. Fante admitted that
AstraZeneca and Teva did forecast certain market data
during the settlement negotiation, but characterized the
negotiation as a “gun-to-head moment” and explained
that the companies relied mostly on “the experience we’d
had as executives” when generating the forecast. Prelim.
Inj. Hr’g Tr. 63-64, Apr. 30, 2009. Given the lack of
reliable data regarding a market with only AstraZeneca
and Teva, this court is not left with a definite and firm
conviction that the district court erred by concluding that
the damages AstraZeneca would incur under the settlement
agreement would be incalculable.
The layoff of employees:
However, as noted by AstraZeneca, Fante
later clarified that if Apotex and Teva were both in the
market that “in that scenario we would have to have a
layoff [in the manufacturing facility].” Id. Moreover,
when asked what effect Apotex’s launch would have on
AstraZeneca employees, Fante explained that
“[u]ndoubtedly . . . I would have to have a further reduc-
tion in the size of the U.S. workforce.” Id. at 47. Simi-
larly, when asked whether this reduction would occur if
Apotex launched its product after December 15, he stated, “Absolutely.”
The kit claims and printed matter:
This court has generally found printed matter to fall
outside the scope of § 101. See In re Chatfield, 545 F.2d
152, 157 (CCPA 1976) (“Some inventions, however meri-
torious, do not constitute patentable subject matter, e.g.,
printed matter . . . .” (citation omitted)). However, as
observed by the district court, this court has long recog-
nized an exception to this general rule: If there is a “func-
tional relationship” between the printed matter and its
substrate, the printed matter may serve to distinguish the
invention from the prior art. See In re Miller, 418 F.2d
1392, 1396 (CCPA 1969); In re Gulack, 703 F.2d 1381, 1385-87 (Fed. Cir. 1983).
This court considered the printed matter exception in
Ngai, a case similar to the one now before us. In Ngai,
the Board affirmed the rejection of a claim reciting a kit
comprising instructions to amplify ribonucleic acids. The
Board found that the only difference between the claimed
kit and the prior art was the content of the claimed in-
structions. Concluding that this content was not func-
tionally related to the kit, the Board found that the claim
was anticipated by the prior art. This court affirmed,
rejecting the argument that the addition of new printed
matter to a known product makes the product patentable.
This court reasoned that “the printed matter in no way
depends on the kit, and the kit does not depend on the
printed matter. All that the printed matter does is teach
a new use for an existing product.” Ngai, 367 F.3d at
1339.
Judge Linn dissented in part, citing to
Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d
1343, 1359 (Fed. Cir. 2001)
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