Senju – Claims of Senju’s patent covering Allergan’s Zymar eye drops had been determined in prior litigation to be invalid. However, Senju was subsequently successful in obtaining narrower claims in an ex parte reexamination. Senju then sued Lupin and HiTech on its reexamined patent claims based upon their ANDA filings for generic eye drops. A divided panel affirms the district court’s invalidation of the reexamined claims, holding that the district court properly concluded that Senju’s argument of unexpected results proved too weak to rebut a strong case of obviousness when challenged in a judicial forum.
Cadence – The Circuit affirms claim construction and determinations of infringement and validity in Hatch-Waxman Act litigation involving patents directed to the injectable pain killer Ofirmev. Secondary considerations were considered important in the panel’s nonobviousness analysis even though the claims do not literally cover the commercial product.
Exela – The Circuit rules that a third party, Exela, may not challenge, by way of the Administrative Procedure Act, a PTO ruling reviving a patent application that had become abandoned by failure to meet the 30-month national phase filing deadline.The district court dismissed Exela’s complaint for failing to meet the statute of limitations for claims filed against the U. S. The Circuit affirms the dismissal on the ground that PTO revival rulings are not subject to third party collateral challenge, thereby precluding review regardless of whether Exela’s claims were time-barred.
Senju Pharmaceutical Co., Ltd., et al. v. Lupin Limited, et al., Fed. Cir. Case 2013-1630
(March 20, 2015)
The invention at issue relates to gatifloxacin, an aqueous liquid pharmaceutical eye drop composition, with added disodium edetate (“EDTA”). Seven prior art patents are alleged as the basis for the obviousness determination, each containing some of claimed chemistry. In addition, there were several prior patent infringement suits involving the same chemistry and the same ‘045 patent; these suits are relevant, though to some extent the issues and parties vary.
In a prior suit the district court ruled that the asserted claims were infringed, but that claims 1-3 and 6-9 were invalid. ( Apotex 1). The district court reopened the case to consider additional evidence regarding claim 7 but ultimately ruled the claim was obvious ( Apotex 2), and the Circuit affirmed that ruling. ( Apotex I). Meanwhile, before final judgment was entered in that litigation, Senju filed for ex parte re-examination, and submitted the prior art, the arguments relied upon by the court and parties, and the court’s opinion. The PTO eventually issued a reexamination certificate which cancelled claims 1-3 and 8-11, allowed amended claim 6, and added claims 12- 16.
Senju then sued Apotex again, alleging infringement of the reexamined claims by the same ANDA filing at issue in the earlier litigation. The district court dismissed that case based on claim preclusion, ruling that “the reexamination of the patent-at-issue did not create a new cause of action against the same previ- ous defendants and accused product.” ( Apotex 3). The Circuit affirmed (“ Apotex II“).
While all this was going on, Senju filed the suit at issue here against Lupin and Hi-Tech, who had sought FDA approval to market and sell generic copies of Senju’s gatifloxacin ophthalmic solution. As in the second suit against Apotex, Senju alleged infringement of the reexamined claims 6 and 12-16.
Lupin moved for judgment on the pleadings, alleging that the narrower reexamined claims of the ‘045 patent were invalid for obviousness, and that plaintiffs should be collaterally estopped from relitigating these claims based on the court’s findings in Apotex 3. The district court ruled that, although Lupin might later at trial succeed in showing that the reexamined claims were invalid for obviousness, Senju in the Apotex 1 & 2 litigations had not fully litigated a claim with a limitation of 0.01 w/v% EDTA and, therefore, collateral estoppel would not apply.
The district court, having reserved the question of infringement and the validity of the reexamined claims in light of the prior art of record, proceeded to trial. The court’s ultimate judgment was that the reexamined claims were infringed, but were invalid for obviousness. Thus, the question before the Cicuit is whether the district court erred when, in the current suit against Lupin and Hi-Tech, it concluded that reexamined claims 6 and 12-16 of the ‘045 patent were invalid for obviousness.
The Senju appellants make two main arguments relating to obviousness: (1) the district court erred by finding that the prior art taught using 0.01 w/v% EDTA in an ophthalmic formulation would work to increase corneal permeability; and (2) the district court erred by finding appellants’ proffer of evidence of unexpected results unavailing.
With respect to claims 12-16, the majority concludes that the district court properly held these claims obvious. Appellants’ argument relating to the eight year gap between the prior art and the filing of the ‘045 patent application was not properly raised below. Appellants only show of support for this issue being raised prior to this appeal is a single citation to the district court opinion in which appellants argue, in a footnote, that the district court “acknowledged the vintage of the prior art.” This is insufficient discussion to consider this argument raised at the district court, and this argument was therefore waived.
The majority does not find persuasive appellants’ argument that it is necessary to consider corneal permeability when analyzing claims 12-16 because the claimed compositions embody the method of reexamined claim 6. The Leo Pharmaceutical Products, Ltd. v. Rea, 726 F.3d 1346 (Fed. Cir. 2013) case appellants cite examines a composition claim that includes as a limitation the function of the composition. In composition claims 12-16 of the ‘045 patent, there is no limitation denoting the function of the composition and the majority declines to import this limitation into the claims.
Many of appellants’ arguments on the lack of reasons to combine the teachings of three references rely on the fact that they do not disclose the corneal permeability of gatifloxacin solutions. As noted above, this is not a limitation of claims 12-16 and, therefore, is not relevant to the obviousness determination.
Lastly, the majority concludes that the use of gatifloxacin with EDTA would have been obvious to a person of ordinary skill in the art. Based on the foregoing, the majority concludes that the district court properly held that claims 12-16 were invalid as obvious.
With respect to claim 6, the majority concludes that the court properly held this claim invalid as obvious. in light of the seven cited references. The district court applied correct legal standards, accepting that the ‘045 patent was entitled to a presumption of validity; that appellees had to establish the underlying factual proofs of obviousness by clear and convincing evidence; and that the court properly considered all of the relevant evidence. See Sciele Pharma Inc. v. Lupin Ltd., 684 F.3d 1253, 1260 (Fed. Cir. 2012) (“Whether a reference was previously considered by the PTO, the burden is the same: clear and convincing evidence of invalidity.”).
Though the district court did not specifically cite to Kompella and Mitra in its opinion, this is not fatal because neither the Mitra nor the Kompella reference actually teach away from utilizing a lower EDTA concentration at the claimed pH level. While both references find success at higher EDTA concentrations, they do not provide any indication that lower EDTA concentrations would not also work. Because the district court was not required to directly address these references and the references do not provide evidence of teaching away from the ‘045 patent disclosure, the district court did not commit clear error in its analysis.
At bottom, the district court’s analysis rests largely on a determination that Lupin’s experts were more credible than Senju’s experts. Based on this determination, the district court found that the prior art taught that 0.01 w/v% EDTA would be effective to increase corneal permeability. On the evidence before us, that determination by falls well within the wide discretion the court has to weigh expert credibility. Ordinarily, and absent compelling reason otherwise, an appellate court defers to such credibility determinations.
2. Unexpected Results
The majority concludes that the district court properly considered evidence of unexpected results, and did not err in finding that the increase in corneal permeability shown by plaintiffs using a 0.01 w/v% EDTA is not unexpected or surprising, but is a product of routine optimization that would have been obvious to one of skill in the art. These determinations, much like many of the obviousness determinations, were based on credibility judgments on which, on the evidence before us, we defer to the district court.
The majority further concludes that the court properly applied a presumption of validity, considering both the evidence of obviousness and the evidence of unexpected results, to find that appellees set forth clear and convincing evidence of invalidity. It was not clear error for the court to conclude that the unexpected results evidence that Senju relied upon during reexamination did not withstand scrutiny by Lupin’s experts and the district court. Ultimately the court properly concluded that the theories presented during reexamination proved too weak when challenged in a judicial forum to rise to the level of unexpected results sufficient to rebut a strong case of obviousness.
Judge Newman’s Dissent
In prior litigation, the district court held Senju’s patent claims invalid on the ground of obviousness. Before that decision reached finality, Senju requested PTO reexamination, presenting new claims of significantly narrowed scope. The PTO reexamined Senju’s patent and held the narrowed claims patentable. In this subsequent litigation, the district court gave no deference to the PTO’s review of the restricted claim scope or the unexpected results at that scope, and held the narrowed claims invalid on the same grounds it previously applied to the original claims.
My colleagues on this panel repeat that flawed analysis: they do not consider the scope of the reexamined claims, the unexpected results at that scope, and the teaching-away of the prior art. The scientific references, the experimental record, and the commercial success all support the conclusion that the subject matter of claim 6 would not have been obvious to a person of ordinary skill at the time of the invention. The PTO on reexamination correctly applied the law of obviousness. Invalidity of reexamined claim 6 was not proved by clear and convincing evidence. From my colleagues’ contrary ruling, I respectfully dissent.
Cadence Pharmaceuticals Inc. SCR Pharmatop v. Exela Pharmsci Inc., Fed. Cir. Case 2014-1184 (March 23, 2015)
Exela filed an ANDA with the FDA, seeking approval of a generic equivalent of Ofirmev®. In response, Cadence sued Exela for infringement of the ‘222 and ‘218 patents. The ‘222 patent explains that in aqueous solutions, acetaminophen decomposes into potentially toxic products. The ‘222 patent is directed at avoiding this decomposition by adding a free-radical capturing agent and a buffer. The ‘218 patent discloses a method for obtaining stable acetaminophen formulations by deoxygenating solutions with an inert gas to achieve oxygen concentrations below 2 parts-per-million.
The ‘222 Patent
1. Claim Construction
The district court construed the term “buffering agent” to mean any agent that helps the formulation resist change in pH. On appeal, Exela urges that a buffering agent must be present in a sufficient concentration to prevent a material change in pH. The panel agrees with the district court that the plain and ordinary meaning of “buffering agent” is “an agent that helps the formulation resist change in pH.” We see nothing in the intrinsic record to warrant adding requirements of effective concentration or resistance to material change. The statement in the specification that the concentration of the buffer “may be” between 0.1 and 10 mg/ml is not limiting, because it would not be proper to import from the patent’s written description limitations that are not found in the claims themselves. Moreover, the fact that during prosecution applicants added the term “buffering agent” in response to a rejection does not show that the phrase requires a minimum concentration or resistance to material change.
Exela’s appeal of the district court’s finding of infringement of the ‘222 patent is based on its proposed claim construction, which we have now rejected. Because the district court’s finding that the sodium ascorbate present in Exela’s formulation as an antioxidant met the buffering agent limitation, as correctly construed, the panel affirms the district court’s finding that claim 1 is infringed.
The ‘218 Patent
1. Infringement Under the Doctrine of Equivalents
The district court construed the terms “aqueous solution” and “solution” in claim 1 of the ‘218 patent as “a composition containing water as a solvent and an active ingredient susceptible to oxidation.” The district court thus concluded that the claimed step of “deoxygenation of the solution” required that an active ingredient already be dissolved. In other words, the district court interpreted the claim to directly cover only the method of first dissolving an active ingredient to form a solution and then deoxygenating the solution. Exela’s accused process, by contrast, first deoxygenates a solvent and only then adds an active ingredient. Accordingly, the court found that Exela did not literally infringe claim 1. Nevertheless, the court found that Exela’s ANDA formulation infringed claim 1 under the doctrine of equivalents. It found that the timing of the addition of the active ingredient did not matter and ruled that the differences between the claimed steps and Exela’s method were insubstantial.
The panel agrees with Cadence and finds no clear error in the court’s finding of infringement under the doctrine of equivalents. The district court relied on the testimony of Cadence’s expert, Dr. Orr, “that adding acetaminophen before or after the deoxygenation step would have no impact on the stability of the final product.” This testimony supports the district court’s finding that changing the timing of the deoxygenation step was an insubstantial difference.
The district court also did not accept Exela’s argument that this scope of equivalents would vitiate a limitation of the claim. Exela challenges that determination and contends that deoxygenating after adding the active ingredient is the “antithesis” of deoxygenating before adding the active ingredient and that because such a substitution would “vitiate” the claimed limitation, there can be no finding of equivalence.
Exela fundamentally misunderstands the doctrine of claim vitiation. “Vitiation” is not an exception or threshold determination that forecloses resort to the doctrine of equivalents, but is instead a legal conclusion of a lack of equivalence based on the evidence presented and the theory of equivalence asserted. Characterizing an element of an accused product as the “antithesis” of a claimed element is also a conclusion that should not be used to overlook the factual analysis required to establish whether the differences between a claimed limitation and an accused structure or step are substantial vel non. The determination of equivalence depends not on labels like “vitiation” and “antithesis” but on the proper assessment of the language of the claimed limitation and the substantiality of whatever relevant differences may exist in the accused structure.
2. Claim Construction of the Vacuum Stoppering Step
The district court concluded that the phrase “optionally topped with an inert gas . . . and placed in a closed container in which the prevailing pressure is 65,000 Pa maximum” (the “vacuum stoppering step”) indicates that the vacuum stoppering step is optional, because the language of claim 1 plainly indicates that the word “optionally” applies to both the first and second clauses, which are connected by the word “and.” According to the district court, whatever statements were made during prosecution “do not rise to the level of an explicit disclaimer.” On appeal, Exela contends that the vacuum stoppering step is mandatory, relying on the language of the claim, the specification and the prosecution history.
We conclude, as did the district court, that the step of stoppering under vacuum is optional. The plain and ordinary meaning of “optionally . . topped . . . and placed” is that both the topping and placing steps are optional. This conclusion is supported by the specification, which does not describe vacuum stoppering as one of “the four parameters that have to be taken into consideration as essential for preservation.” While some examples may work better than others, the specification’s observation that stoppering under vacuum “constitutes a distinct advantage,” cannot be read to imply that the invention is limited to such embodiments. Nor is there anything in the prosecution history to amount to a clear and unmistakable disavowal of the plain and ordinary meaning of the vacuum stoppering step being optional.
At the district court, Exela contended that the ‘218 patent was obvious over the ‘222 patent in view of the Palmieri article. Exela claimed, and Cadence did not dispute, that the only difference between the asserted claims of the ‘218 patent and the disclosure of the ‘222 patent is that the ‘222 patent did not disclose decreasing the oxygen content to below 2 ppm (as recited in claim 1) or even lower levels (as recited in certain dependent claims). Exela argued that deoxygenating below 2 ppm would have been obvious based on the disclosure of the ‘222 patent that the stability of acetaminophen solutions depends, inter alia, on “removal of oxygen dissolved in the carrier,”
The district court found that it would not have been obvious to combine the Palmieri article with the ‘222 patent, because pyrogallol degrades by oxidation while acetaminophen degrades primarily by hydrolysis, and because deoxygenation to levels below 2 ppm was “technically difficult.” According to the district court, Ofirmev® —which the district court found to be made by a process equivalent to that claimed in the ‘218 patent—fulfilled a long-felt need, was a commercial success, was licensed and was praised in the industry. The court also found that the ‘218 patent exhibited unexpected results as to stability as compared to the ‘222 patent.
Exela bears a difficult burden in this case on the question of obviousness, and the panel concludes that. Exela has not met its burden. At trial, one of the inventors, Francois Dietlin, in discussing Example II, testified that the experiments he performed confirmed that degradation of acetaminophen resulted from hydrolysis, followed thereafter by oxidation. Moreover, Cadence’s expert, Dr. Edmond Elder, testified that the primary degradation mechanism in acetaminophen is hydrolysis.
Regarding secondary considerations, the panel agrees with the district court that secondary considerations related to the marketing of Ofirmev® are not per se irrelevant to the non-obviousness of the claims of the ‘218 patent, despite the fact that the claims do not literally cover Ofirmev®. There is no reason to believe that any secondary considerations attendant to Ofirmev®, in which the solvent is deoxygenated prior to the addition of the active ingredient, would not also be present in formulations literally covered by the claims, i.e., where the solvent is deoxygenated after the addition of active ingredient. The district court also did not clearly err in finding that the process claimed in the ‘218 patent achieved unexpected stability relative to that disclosed in the ‘222 patent and in finding that the licensing of the ‘218 patent is probative of non-obviousness.
Exela Pharma Sciences, LLC v. Michelle K. Lee, Fed. Cir. Case 2013-1206 (March 26, 2015)
SCR Pharmatop (“Pharmatop”) filed its initial patent application in France on June 6, 2000 and, in conformity with the PCT, filed an international patent application identifying the U. S., among others, as a designated state on June 6, 2001. The PCT implementing statute, 35 U.S.C. §351 et seq., requires the applicant to fulfill certain U. S. documentary and fee requirements within 30 months after the filing of the foreign priority application. Pharmatop failed to file the required materials within the 30 months, and consequently the U. S. application was deemed abandoned. Shortly after the deadline, SCR filed a petition to revive, stating that the delay was “unintentional”. The PTO granted the petition, the application was examined, and the patent issued.
In 2011 Pharmatop sued Exela for infringement under the HatchWaxman Act in response to Exela’s filing of an ANDA relating to Pharmatop’s injectable acetaminophen-based drug Ofirmev®. Exela filed a petition in the PTO, under the APA and 37 C.F.R. §§1.181, 1.182, and 1.183, challenging the PTO’s revival of the patent application that led to issuance of the patent. Exela argued that “unintentional” delay was not an available ground for revival of a patent application claiming priority under the PCT-implementing statute then in effect. Exela pointed out that 35 U.S.C. §371(d) limited the revival of such national stage applications to those in which the non-compliance was “unavoidable.” Exela asserted that a PTO regulation cannot override a statute, and therefore, the PTO lacked discretion to grant Pharmatop’s revival petition for “unintentional” delay.
The PTO declined to consider Exela’s petition, stating that no statute or regulation authorizes third party challenge to a PTO ruling concerning revival of a patent application. Following the PTO’s rejection of its petition, Exela filed this district court action under the APA, asking the court to compel the PTO to vacate its revival decision. The PTO moved to dismiss Exela’s complaint on several grounds, including that Exela lacked standing to challenge the PTO’s revival ruling, that Exela’s APA action was time-barred, and that a PTO revival ruling was not subject to judicial review at the request of a third party challenger. The district court held Exela’s action time-barred by the six-year period of limitations and this appeal followed.
Exela argues that its complaint was improperly dismissed and that it is entitled to proceed, citing the APA’s purpose of providing remedy to any “person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute.” 5 U.S.C. §702. Exela stresses that the dominating consideration in APA actions is the “strong presumption that Congress intends judicial review of administrative action.” Exela states that the PTO’s action in reviving the Pharmatop application was contrary to the PCT statute, and that unless judicial review is available, an ultra vires PTO action will escape correction.
The question on this appeal is not whether a patent applicant may challenge a PTO revival ruling as to its application; that question was resolved in the affirmative by this court’s decision in Morganroth v. Quigg, 885 F.2d 843 (Fed. Cir. 1989). The issue here is whether a third party may collaterally challenge and obtain judicial review of a PTO revival ruling concerning an unrelated patent application. The Patent Act’s “intricate scheme for administrative and judicial review of PTO patentability determinations,” and “the Patent Act’s careful framework for judicial review at the behest of particular persons through particular procedures” demonstrate that third party challenge of PTO revival rulings under the APA is not legislatively intended. Pregis Corp. v. Kappos, 700 F.3d 1348 (Fed. Cir. 2012) (“A third party cannot sue the PTO under the APA to challenge a PTO decision to issue a patent.”).
We conclude that PTO revival actions are not subject to third party challenge under the APA. On this ground, the dismissal of the Exela complaint is affirmed.
Judge Newman’s concurrence
I join the court’s decision, for neither the Patent Act nor the APA provides a cause of action in which third persons may challenge the revival by the PTO of an application deemed abandoned for failure to meet a filing date. I write separately to address the concerns raised in Judge Dyk’s concurring opinion, in which he criticizes the ruling in Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 543 F.3d 657 (Fed. Cir. 2008). I do not share the view that Aristocrat was wrongly decided.
In Aristocrat the defendant argued that the PTO erroneously revived Aristocrat’s PCT application, and sought invalidity on that ground. This court stated that the PTO’s revival of an application “is neither a fact or act made a defense by title 35 nor a ground specified in part II of title 35 as a condition for patentability.” The recently enacted AIA, which provides new mechanisms for third party attacks on issued patents, did not change the principle that PTO procedures are not subject to third party collateral attack.
Judge Dyk correctly points out that there are areas in which “a non-listed defense has been recognized by courts,” citing cases in which antitrust violation, patent misuse, and shop right have been recognized as defenses to patent infringement. With all respect, my colleague errs in stating that such major substantive issues, each of which is a traditional defense, “cannot be so easily distinguished” from an excuse for a missed filing date. If judges cannot easily distinguish the significance of antitrust violation from a missed date, we must try harder.
Judge Dyk’s concurrence
I join the majority opinion holding that the structure of the Patent Act bars third party APA challenges to patent validity based on an improper revival of an abandoned patent application.
The heart of Exela’s argument to the contrary is that it is entitled to proceed under the APA because there is a “strong presumption that Congress intends judicial review of administrative action,” and because, since our precedent in Aristocrat Technologies barred review of improper revival as a defense in infringement actions, the only available route to review is under the APA.
In Aristocrat, this court held that a defendant in an infringement action could not assert improper revival of an abandoned patent application as a defense in that action. We need not decide here whether Aristocrat was correctly decided. Whether it was or not, the Patent Act is inconsistent with third party APA review. However, I write separately to explain why I think our decision in Aristocrat was problematic.
The panel in Aristocrat held that improper revival could not be raised as a defense to an infringement action because improper revival was not literally among the catalog of defenses listed in 35 U.S.C. § 282. The panel noted that we have held that a “provision of the Patent Act not falling within the literal scope of section 282 may nevertheless provide a defense of noninfringement or invalidity.”
There are four aspects of the Aristocrat opinion that in my view warrant its reconsideration.
First, Aristocrat did not discuss the presumption of judicial review of agency action. As we hold today, there is no APA review for improper revivals and no alternative mechanism for review, so an invalidity defense would be the only route available for judicial review.
Second, contrary to the suggestion in Aristocrat and by my colleague in her concurrence, this is not a case involving a minor procedural error in the PTO process. Here, Congress thought the issue of timely filing to be sufficiently important that it provided that a patent would be treated as abandoned for noncompliance, and it allowed the PTO to reinstate the patent only when specific criteria were satisfied.
Third, in Morganroth v. Quigg, 885 F.2d 843 (Fed. Cir. 1989), we held that review of the PTO’s refusal to revive a patent application was available under the APA. That case is not cited in Aristocrat, and it is indeed difficult to understand why a third party facing liability for infringement of the patent cannot seek judicial review of a revival decision if the patent applicant can do so.
Fourth, Aristocrat failed to recognize that there are many situations in which a non-listed defense has been recognized by courts. Obviousness-type double patenting, patent misuse and the shop right doctrine are all examples that are not explicitly provided by statute. These other cases cannot be so easily distinguished from the situation in Aristocrat.
In the future, en banc action to reconsider Aristocrat may be appropriate.