Roche v. Apotex (CAFC 08-1021)

The asserted patent was 5,110,493, "which is directed to a drug formulation for treatment of eye inflammation, such as that caused by glaucoma, conjunctivitis, eye surgery, or eye injury."

The action to date on the second case -

On May 24, 2005, Roche sued Apotex for infringement of the '493 patent based on the ANDA-2 formulation. Apotex asserted the defenses of non-infringement; invalidity under 35 U.S.C. §§ 101, 103, and 112; and unenforceability due to inequitable conduct. Thereafter, Roche filed a motion for summary judgment that the ANDA-2 formulation infringes the '493 patent and that the validity and unenforceability defenses should be barred based on the earlier Syntex litigation (Syntex I, Syntex II, and Syntex III) under the doctrines of issue preclusion and claim preclusion. Apotex countered by arguing that the ANDA-2 formulation escapes infringement under the reverse doctrine of equivalents. Apotex further averred that the doctrines of issue preclusion and claim preclusion were inapplicable because the ANDA-2 formulation and the ANDA-1 formulation were distinct, and the change in law exception, in view of KSR, prevented application of those doctrines.

The district court then handed a victory to Roche on all counts in summary judgment.

[T]he court held that Apotex did not meet its burden of establishing a prima facie case of noninfringment under the reverse doctrine of equivalents.

Apotex's invalidity arguments were washed out by claim preclusion, except possibly obviousness, because of the first '493 suit.

With respect to the validity challenge on obviousness grounds, the court did not reach whether the Supreme Court decision in KSR constituted a change in law necessitating an exception to issue preclusion because it held that such a challenge was prevented by claim preclusion.

With respect to claim preclusion, the district court held that the two accused products, ANDA-1 and ANDA-2, are "essentially the same," and thus each of the invalidity claims in the ANDA-2 litigation was prevented by claim preclusion. Id. at 997-99. The court further held that there is no "change of law" or fairness exception to claim preclusion to prevent its application despite the intervening KSR decision. Id. at 999-1000. Hence, the court held that Apotex's invalidity and unenforceability affirmative defenses were barred by claim preclusion. Id. at 1000.

On the reverse doctrine of equivalents, where the burden shifts to the defendant to prove substantial difference once the patent holder has shown infringement -

The reverse doctrine of equivalents is an equitable doctrine designed "to prevent unwarranted extension of the claims beyond a fair scope of the patentee's invention." Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1581 (Fed. Cir. 991). According to the Supreme Court:

[W]here a device is so far changed in principle from a patented article that it performs the same or similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the [reverse] doctrine of equivalents may be used to restrict the claim and defeat the patentee's action for infringement.

Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608-609 (1950) (emphases added). While the patentee bears the burden of proving infringement, if the patentee establishes literal infringement, the burden shifts to the accused infringer to set forth a prima facie case of non-infringement under the reverse doctrine of equivalents. SRI Int'l, 775 F.2d at 1123-24. If the accused infringer is successful in making a prima facie case, the patentee must then rebut that prima facie case. Id. at 1124. The reverse doctrine of equivalents is rarely applied, and this court has never affirmed a finding of non-infringement under the reverse doctrine of equivalents. Tate Access Floors, Inc. v. Interface Architectural Res., Inc., 279 F.3d 1357, 1368 (Fed. Cir. 2002).

Apotex argued that its formulation was much different.

Apotex asserts, the ANDA-2 formulation is stabilized by a completely different ingredient and mechanism, and functions in a "substantially different way" from the formulation claimed in the '493 patent.

The CAFC disagreed, in part because Apotex relied just upon expert witness declaration, without proper reference to intrinsic evidence.

We agree with the district court that Apotex has failed to set forth a prima facie case of non-infringement under the reverse doctrine of equivalents because it does not properly establish the principle of the '493 patent. The "principle" or "equitable scope of the claims" of the patented invention is determined in light of the specification, prosecution history, and the prior art. Scripps Clinic, 927 F.2d at 1581. Here, however, Apotex relies exclusively on the declaration of its expert, Dr. Mitra.

Further, the principle Apotex whipped up was never mentioned in the specification, and played no part in prosecution.

Claim preclusion squashes litigation rehash.

Apotex next asserts that the district court erred in holding that its validity challenges to the '493 patent were barred by claim preclusion. Under Ninth Circuit law, claim preclusion applies where: "(1) the same parties, or their privies, were involved in the prior litigation, (2) the prior litigation involved the same claim or cause of action as the later suit, and (3) the prior litigation was terminated by a final judgment on the merits." Cent. Delta Water Agency v. United States, 306 F.3d 938, 952 (9th Cir. 2002) (citing Blonder-Tongue Labs. v. Univ. of Ill. Found., 402 U.S. 313, 323-24 (1971)); Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 985, 987 (9th Cir. 2005).

From a '493 patent perspective, Apotex's two formulations were essentially the same.

The court determined that the ANDA-1 formulation and the ANDA-2 formulation are "essentially the same" because any differences between them are unrelated to the claims of the '493 patent. Though the court recognized that there are differences in the concentrations of the ingredients in the ANDA-1 and ANDA-2 formulations, it also realized that all of the concentrations are well within the ranges claimed in the '493 patent. The fact that they are stabilized by different mechanisms, even if true, is irrelevant because both formulations are encompassed by the claims of the '493 patent. Thus, any difference in composition between the two formulations is merely colorable and the two formulations are "essentially the same."

Res judicata has only rare exception, and KSR didn't offer an exception.

The district court, however, correctly recognized that there is no "change of law" or fairness exception to prevent application of claim preclusion. Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981); see also Clifton v. Att'y Gen. of Cal., 997 F.2d 660, 663 (9th Cir. 1993) ("For us to conclude, under the facts of this case, that the district court's order has become an 'instrument of wrong' merely because it rests on a since repudiated rationale would be to nullify the doctrine of res judicata."); Wilson v. Lynaugh, 878 F.2d 846, 850-51 (5th Cir. 1989); Precision Air Parts, Inc. v. Avco Corp., 736 F.2d 1499, 1503 (11th Cir. 1984) ("The general rule . . . throughout the nation, is that changes in the law after a final judgment do not prevent the application of res judicata and collateral estoppel, even though the grounds on which the decision was based are subsequently overruled."); Hardison v. Alexander, 655 F.2d 1281, 1288-89 (D.C. Cir. 1981). Although there may be a rare exception in cases involving "momentus changes in important, fundamental constitutional rights," Precision Air Parts, 736 F.2d at 1504, no such right is involved here.

As the Supreme Court explained:

Nor are the res judicata consequences of a final, unappealed judgment on the merits altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case. . . . We have observed that "[t]he indulgence of a contrary view would result in creating elements of uncertainty and confusion and in undermining the conclusive character of judgments, consequences which it was the very purpose of the doctrine of res judicata to avert."

Federated Dep't Stores, 452 U.S. at 398-99 (citations and internal quotations omitted). Thus, the KSR decision does not prevent application of claim preclusion.

Affirmed.