Astra v. KV Pharmaceutical, Andrx, and Eon Labs (CAFC 06-1254)

This was another in a long string of 2-1 split decisions, Judges Gajarsa and Mayer in the majority, Schall with the short straw.

On metoprolol -

Astra manufactures and markets metoprolol succinate in “extended release” forms under the brand name Toprol-XL®. Metoprolol is a therapeutically active compound, which can form salts by reaction with acids and is used in the treatment of angina, hypertension, and congestive heart failure. Metoprolol succinate is the salt of metoprolol with succinic acid.

On the peculiar pedigree -

The stats - Lejus Medical AB filed: USPA 690,197 from SE 8400085 = USPN 4,780,318; CIP USPA 172,897 = USPN 5,001,161; a continuation of '897 = USPN 5,081,154.

The short version of a convoluted story is that Astra and Lejus had an ownership dispute over the patents, as the named inventors were ex-Astra employees. There was also an issue of whether all the inventors were named. The two parties settled the ownership issue, with Astra getting '161 and '154, and Lejus retaining parent '318. The inventorship issue, never mentioned to the patent office, was never resolved.

A. Invention and Ownership

In 1971, an Astra employee “named Toivo Nitenberg synthesized metoprolol succinate as well as the tartrate and sulfate salts of metoprolol” at Astra’s facilities in Sweden. At the time, Astra chose to commercialize the tartrate salt product. Id. at 28. Similarly in 1982, another Astra employee in Sweden named Lars Lilljequist synthesized a number of metoprolol salts, including metoprolol succinate. The parties submitted conflicting evidence as to whether two other Astra employees in Sweden, Curt Appelgren and Christina Eskilsson, had directed Lilljequist to synthesize metoprolol succinate. See id. at 28-30.

In 1983, Appelgren and Eskilsson left Astra to join another company, Lejus Medical AB (“Lejus”). In January 1984, Lejus filed a patent application (SE 8400085) with the Swedish Patent Office, describing “delayed and extended release dosage forms of pharmaceutical compositions, including metoprolol succinate” and naming Appelgren and Eskilsson as the inventors. In January 1985, Lejus filed U.S. application Ser. No. 690,197 (the ’197 Application), claiming priority from the Swedish application. Id. at 30.

In October 1985, after noticing the publication of the Swedish application, Astra commenced a transfer of ownership action with the Swedish Patent Office asserting that Nitenberg, not Appelgren and Eskilsson, invented metoprolol succinate. Astra and Lejus subsequently settled this ownership dispute. Id. at 30-31. In the settlement agreement, Lejus agreed to divide claims to “metoprolol succinate” and to a “pharmaceutical composition, characterized in that the active substance is metoprolol succinate” from the ’197 Application and to assign the divided claims to Astra. The settlement agreement listed Appelgren and Eskilsson as the inventors of the divided metoprolol succinate claims. Astra agreed that Lejus retained the rights to the ’197 Application that did not include the divided claims.

B. Astra’s U.S. Patents

In March 1988 and in accordance with the settlement agreement, Lejus filed U.S. application Ser. No. 172,897 (the ’897 Application), which was a continuation-in-part of the ’197 Application. The record indicates that while the settlement agreement resolved the issue of ownership, disagreement remained on the issue of inventorship. Lejus filed the ’897 Application with Appelgren and Eskilsson as the named inventors. Both before and after the filing, however, Astra’s in-house counsel asserted to Lejus that Nitenberg, not Appelgren and Eskilsson, was the inventor of metoprolol succinate. Similarly, after Lejus transferred the prosecution of the ’897 Application to Astra, Astra’s in-house counsel asserted to Astra’s outside U.S. patent counsel that “there remains an open question who is the proper inventor.” The last mention of this issue in the record is a phone call between Astra’s in-house counsel and outside U.S. patent counsel in January 1989. Summary Judgment, slip op. at 32-35.

In March 1991, the ’897 Application issued as U.S. Patent No. 5,001,161 (the ’161 Patent). The only claim of the ’161 Patent reads: “A pharmaceutical composition comprising metoprolol succinate together with a sustained release pharmaceutically acceptable carrier.” Id. col.2 ll.36-38.

In January 1992, a continuation of the ’897 Application issued as U.S. Patent No. 5,081,154 (the ’154 Patent). The only claim of the ’154 Patent simply reads, “Metoprolol succinate.” Id. col.2 l.36.

The ’161 and ’154 Patents both list Appelgren and Eskilsson as the inventors, and Astra as the assignee. Astra never revealed the inventorship issue to the U.S. Patent & Trademark Office during the prosecution of the two patents. Summary Judgment, slip op. at 25.

C. Lejus’s U.S. Patent

During the same time period, Lejus’s ’197 Application issued as U.S. Patent No. 4,780,318 (the ’318 Patent) in October 1988. Lejus is the assignee of the ’318 Patent, which also lists Appelgren and Eskilsson as the inventors. While Lejus, Appelgren, and Eskilsson are not parties in this multidistrict litigation, the ’318 Patent is pertinent because the district court invalidated Astra’s ’161 and ’154 Patents as double patenting over Lejus’s ’318 Patent.

Invalidity by Double Patenting

Astra appealed the invalidity of '154, but not '161.

The CAFC begin with case law on non-statutory double patenting, where a later set of claims overlap previously granted claims. This obviousness-type patenting is taboo because it would extend the life of the patent grant. During prosecution, the proper response to non-statutory double patenting is a terminal disclaimer.

We have noted that “[n]on-statutory, or ‘obviousness-type,’ double patenting is a judicially created doctrine adopted to prevent claims in separate applications or patents that do not recite the ‘same’ invention, but nonetheless claim inventions so alike that granting both exclusive rights would effectively extend the life of patent protection.” Perricone, 432 F.3d at 1373 (citation omitted).

Generally, an obviousness-type double patenting analysis entails two steps. First, as a matter of law, a court construes the claim in the earlier patent and the claim in the later patent and determines the differences. Second, the court determines whether the differences in subject matter between the two claims render the claims patentably distinct. A later claim that is not patentably distinct from an earlier claim in a commonly owned patent is invalid for obvious-type double patenting. A later patent claim is not patentably distinct from an earlier patent claim if the later claim is obvious over, or anticipated by, the earlier claim.

Eli Lilly, 251 F.3d at 968 (footnote and citations omitted).

This court perceives no error in the district court’s claim constructions, and therefore, the only issue on appeal regarding the invalidity of the ’154 Patent is whether the district court correctly found the claims not patentably distinct.

The CAFC cuts through some semantic stink.

Astra asserts that the district court erred in concluding that Claim 8 of the ’318 Patent and Claim 1 of the ’154 Patent recited a species/genus relationship. Instead, Astra asserts that the claims define an element/combination relationship. This court has stated that such disputes “about the characterization of the relation between the two claims” in a double patenting context are irrelevant.

Emert insists that the claims stand in a combination (’624 patent) and subcombination (’887 application) relationship. The PTO insists that the claims stand in a genus (’887 application) and species (’624 patent) relationship. . . . In spite of the parties’ eagerness to conform the round-peg facts of the case into semantic, square holes, the critical inquiry remains whether the claims in the ’887 application define an obvious variation of the invention claimed in the ’624 patent.

In re Emert, 124 F.3d 1458, 1461-62 (Fed. Cir. 1997). Therefore, Astra’s reliance on semantic distinctions fails.

So, the denouement is that the parent, '318, bludgeoned the CIPs: '161 & '154, for double patenting.

Judge Schall dissented on the double patenting finding.

A double patenting analysis turns on what is claimed. General Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1275 (Fed. Cir. 1992) (“[T]he law of double patenting is concerned only with what patents claim. ‘Double patenting,’ therefore, involves an inquiry into what, if anything, has been claimed twice.”) To me, the critical point is that, in this case, the compound metoprolol succinate has not “been claimed twice.”

I believe the law is that there is no double patenting simply because a later claimed element is set forth in an earlier claim to a combination.

Unenforceability via Inequitable Conduct

The district court construed intent by having a motive to hide the inventorship dispute, but the CAFC said there is no evidence Astra's in-house patent counsel even gave it any thought. Hence, summary judgment was inappropriate, as factual evidence needed to be developed first.

We have stated that “‘[i]ntent need not, and rarely can, be proven by direct evidence.’ Rather, intent to deceive is generally inferred from the facts and circumstances surrounding the applicant’s overall conduct.” Impax Labs., Inc. v. Aventis Pharm. Inc., 468 F.3d 1366, 1375 (Fed. Cir. 2006) (quoting Merck & Co., Inc. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1422 (Fed. Cir. 1989)).

In this case, the district court inferred intent to deceive on summary judgment based on an analysis of what could have happened if Astra had disclosed the inventorship dispute to the U.S. Patent & Trademark Office.

Not only was the issue of the dispute of inventorship highly material, Astra had a strong incentive to not disclose the dispute. If a patent examiner had learned of the dispute and found Nitenberg to be the sole inventor of metoprolol succinate, the ’897 patent application would not have been entitled to priority to the January 1985 United States application. The effective filing date for the ’897 patent would have been March 25, 1988. As a consequence, Astra’s metoprolol succinate patents may have been denied as anticipated by the prior art of the publication of the Lejus’ European application on July 17, 1985.

Summary Judgment, slip op. at 44. Based on this but for analysis, the district court found “by clear and convincing evidence that Astra’s motivation to not reveal the dispute was great based on the risk of losing its metoprolol succinate inventions as anticipated by prior art. The intent to deceive is clearly present.” Id. at 45.

On appeal, the parties dispute the soundness of the district court’s but for analysis. Even assuming arguendo that the patents at issue would have been invalid based on anticipation if Astra had disclosed the inventorship dispute to the U.S. Patent & Trademark Office, the district court erred in equating the presence of an incentive with an intent to deceive on summary judgment. Specifically, the deposition of Astra’s in-house patent counsel indicates that he did not know of and was not concerned about the incentives identified by the district court in its but for analysis. Therefore, the record reveals a genuine factual dispute of whether Astra had an intent to deceive the U.S. Patent & Trademark Office. The district court improperly resolved this factual dispute on summary judgment and thus, erred in holding on summary judgment that the ’161 and ’154 Patents are unenforceable based on inequitable conduct.

The majority affirmed '154 as invalid ('161 declared dead without being appealed), but vacated and remanded whether '154 and '161 had been illicitly gotten by not naming all the inventors, thus not only dead, but damned.