November 2, 2010
AstraZeneca sought and got a preliminary injunction against Apotex, which was hankering to launch a generic version of the asthma drug Pulmicort. Apotex did manage to invalidate "kit" claims of asserted 6,598,603 and 6,899,099. Appeal left things as at district court, with dissent on the injunction, owing to a different take on validity.
AstraZeneca v. Apotex (CAFC 2009-1381, -1424) precedential
Judge Linn penned a tidy synopsis of the byzantine route for launching a generic version of a patented drug.
I. The Drug Approval Process
In part, this appeal concerns the procedures for obtaining permission to sell either a "new" or generic drug under the Federal Food, Drug, and Cosmetic Act, ch. 675, 52 Stat. 1040 (1938) (codified as amended in scattered sections of 21 U.S.C.). Under the Act, the FDA must approve all new drugs before such drugs may be distributed in interstate commerce. 21 U.S.C. § 355(a). To obtain approval for a new drug, an applicant may file a New Drug Application ("NDA") that includes examples of the proposed label for the drug and clinical data demonstrating that the drug is safe and effective for use. Id. § 355(b)(1)(A), (b)(1)(F). The NDA must contain the patent number and expiration date of any patent that claims either the drug or a method of using the drug if "a claim of patent infringement could reasonably be asserted." Id. § 355(b)(1). The FDA publishes the names of approved drugs and their associated patent information in the Approved Drug Products with Therapeutic Equivalence Evaluations list, commonly referred to as the "Orange Book."
An applicant seeking approval to market a generic version of a drug may file either an Abbreviated New Drug Application ("ANDA") or a "505(b)(2) application," which is also known as a "paper NDA." Id. § 355(b)(2), (j).
An ANDA allows an applicant to rely on the safety and efficacy information for the listed drug if the applicant can show that the generic drug is "bioequivalent" to the listed drug.
An ANDA has three requirements that are particularly relevant here. First, the applicant must demonstrate that "the route of administration, the dosage form, and the strength of the new drug are the same as those of the listed drug," unless the FDA has approved a "suitability petition" requesting permission to file an ANDA that differs from the listed drug in one or more of these respects. Id. § 355(j)(2)(A)(iii), (j)(2)(C). Second, subject to changes required by FDA regulations or a successful suitability petition, the applicant must also show that "the labeling proposed for the new drug is the same as the labeling approved for the listed drug." Id. § 355(j)(2)(A)(v). Third, for each patent listed in the Orange Book that claims either the listed drug or a use of the listed drug for which the applicant is requesting approval, an ANDA must include either one of four certifications or a "section viii statement."
If an applicant chooses to submit a certification, the applicant must certify "(I) that . . . patent information has not been filed, (II) that such patent has expired, (III) . . . the date on which such patent will expire, or (IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug." Id. § 355(j)(2)(A)(vii)(I)-(IV). These certifications are referred to as Paragraph I, II, III, and IV certifications, respectively.
Assuming all regulatory requirements are satisfied, the FDA may immediately make effective the approval of an ANDA that includes either a Paragraph I or II certification. Id. § 355(j)(5)(B)(i). By contrast, the filing of a Paragraph III or IV certification may delay the effective date of an ANDA approval, and, in the case of a Paragraph IV certification, invite a patent infringement suit. See 35 U.S.C. § 271(e)(2), 21 U.S.C. § 355(j)(5)(B)(ii)-(iii).
If, however, an applicant is seeking approval for a method of use not claimed in a "method of use patent" associated with the listed drug, the applicant must submit a section viii statement declaring that the patent does not claim such a use. 21 U.S.C. § 355(j)(2)(A)(viii). The applicant must also remove or "carve out" any mention of the patented method of use from the proposed label for the generic drug. See 21 C.F.R. § 314.92(a)(1); Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 601 F.3d 1359, 1361 (Fed. Cir. 2010) ("Along with the section viii statement, the generic manufacturer must submit a proposed label to the FDA that does not contain the patented method of using the listed drug."). Unlike a Paragraph III or IV certification, the filing of a section viii statement will not by itself delay approval of an ANDA.
Finally, in contrast to an ANDA, a paper NDA must include safety and effectiveness data. 21 U.S.C. § 355(b)(2). However, a paper NDA may rely on safety and effectiveness data not developed by the applicant. Id. As with an ANDA, a paper NDA requires the applicant to submit either a patent certification or a statement declaring that the patent does not claim the method of use for which the applicant is seeking approval. Id. § 355(b)(2)(A)-(B).
To the specifics of '603 and '099, which claim an asthma treatment product kit, as well as method-of-use claims.
In 2000, the FDA approved AstraZeneca's NDA for a budesonide inhalation suspension that AstraZeneca now markets under the name "PULMICORT RESPULES®." Each "respule" is a plastic vial containing a single dose of budesonide, an anti-inflammatory corticosteroid, suspended in a sterile liquid. The drug is administered by squeezing the entire contents of a vial into a jet nebulizer and inhaling the resulting mist through a mask attached to the nebulizer.
The Orange Book entry for AstraZeneca's budesonide product includes the '099 Patent and its parent, the '603 Patent. Both patents are owned by AstraZeneca and have specifications that are nearly identical in all relevant respects. The patents explain that "[t]he invention provides a new method of treating respiratory diseases such as asthma that involves administering a budesonide composition with a nebulizer not more than once per day." '603 Patent col.1 ll.20-23; '099 Patent col.1 ll.26-29. "The invention also features a kit for treating respiratory diseases, the kit including a budesonide composition in a sealed container . . . and a label indicating administration by nebulization in a continuing regimen at a frequency of not more than once per day." '603 Patent col.2 ll.1-6; '099 Patent col.2 ll.7-12. Both patents include method claims directed to administering a budesonide composition once daily and product claims directed to the described kit containing either a budesonide composition or suspension and a label indicating once-daily administration by nebulization.
The FDA approved Apotex's ANDA on March 30 2009. The next day, AstraZeneca filed a DJ.
The court held a five-day hearing on AstraZeneca's request for a preliminary injunction. At the hearing, Apotex argued that U.S. Patent No. 5,192,528 ("the '528 Patent") anticipates all but three of the asserted method claims (claims 12, 14, and 16).
Apotex argued non-infringement of the method claims, because its proposed label would not induce consumers to directly infringe. The district court didn't buy that.
The district court "found that AstraZeneca would suffer irreparable harm if the court did not issue a preliminary injunction."
The CAFC on preliminary injunctions -
"A plaintiff seeking a preliminary injunction must establish that [it] is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008); see also Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1375 (Fed. Cir. 2009). Apotex appeals only the district court's findings that AstraZeneca is likely to succeed on the merits with respect to the asserted method claims and is likely to suffer irreparable harm in the absence of a preliminary injunction.
A. Likelihood of Success on the Merits
For a patentee to establish that it is likely to succeed on the merits, it "must demonstrate that it will likely prove infringement of one or more claims of the patents-in-suit, and that at least one of those same allegedly infringed claims will also likely withstand the validity challenges presented by the accused infringer." Amazon.com, 239 F.3d at 1351. When reviewing the grant of a preliminary injunction, this court "views the matter in light of the burdens and presumptions that will inhere at trial." Titan Tire Corp., 566 F.3d at 1376 (citation omitted). A preliminary injunction should not issue if an alleged infringer raises a substantial question regarding either infringement or validity, i.e., the alleged infringer asserts an infringement or invalidity defense that the patentee has not shown lacks substantial merit. Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997).
Claim Construction & '603 Validity in Light of '528
Naturally, the '528 prior art attack depended upon the breadth of claim construction.
There is no serious dispute that the '528 Patent would anticipate the majority of the asserted method claims if the term "budesonide composition" is interpreted to include the liposome embodiments disclosed in the '528 Patent and would not anticipate the method claims if the district court's construction was correct.
This court agrees with AstraZeneca and concludes that the district court was correct in its claim construction. A claim term is generally given its "ordinary and customary meaning," that is, "the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention." Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005) (en banc). "[T]he person of ordinary skill in the art is deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification." Id. at 1313. "[T]he specification may reveal a special definition given to a claim term by the patentee that differs from the meaning it would otherwise possess. In such cases, the inventor's lexicography governs." Id. at 1316. The specification need not reveal such a definition explicitly. See Bell Atl. Network Servs., Inc. v. Covad Commc'ns Group, Inc., 262 F.3d 1258, 1268 (Fed. Cir. 2001) ("[A] claim term may be clearly redefined without an explicit statement of redefinition."). "[W]hen a patentee uses a claim term throughout the entire patent specification, in a manner consistent with only a single meaning, he has defined that term 'by implication.'" Id. at 1271 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)).
This nuanced interpretation of claim construction, away from "ordinary and customary meaning" to "special definition by implication" is frightening in its ambiguity. In this case, narrow definition skirted invalidity. Left open is the question of how such "implied" construction affects the doctrine of equivalence with regard to infringement.
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 solution or suspension" as construed by the district court. The specification consistently describes the budesonide compositions in that way.
The specification and the claims are not the only sources that a court may consider when determining the meaning of a claim term. A court may look to "those sources available to the public that show what a person of skill in the art would have understood disputed claim language to mean," which, in addition to the claims and the rest of the specification, may include "the prosecution history and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art." Phillips, 415 F.3d at 1314 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). Extrinsic evidence "consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises." Id. at 1317 (quoting Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995)).
Here, the record includes the testimony of AstraZeneca's expert, Dr. Williams. This court generally views expert testimony "as less reliable than the patent and its prosecution history in determining how to read claim terms." Id. at 1318. However, expert testimony can be useful "for a variety of purposes, such as to provide background on the technology at issue, to explain how an invention works, [or] to ensure that the court's understanding of the technical aspects of the patent is consistent with that of a person of skill in the art . . . ." Id. at 1318. In this case, the district court properly relied on the testimony of Dr. Williams to understand how the claimed invention works and construed the disputed term in a manner consistent with that understanding. As described above, Dr. Williams explained that the '603 Patent discloses that the depot effect permits budesonide to be effective when administered once daily and opined that for the depot effect to occur budesonide must be in direct contact with the solvent. He also testified that one of skill in the art would have understood the '603 Patent to disclose budesonide in immediate contact with the solvent as either a solution or suspension. This would exclude the liposome-entrapped embodiments disclosed in the '528 Patent. Although Apotex takes issue with the district court's reliance on Dr. Williams's testimony, Apotex does not seriously dispute his explanation of how the claimed invention works and provided no testimony to the contrary at the preliminary injunction hearing. 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 expert explanation of the technology that was presented.").
Considered together, the intrinsic evidence and expert testimony support the conclusion that a person skilled in the art would have understood the term "budesonide composition" to mean "budesonide dispersed in a solvent in the form of a solution or suspension" and excludes "the involvement of liposomes as described in the '528 Patent."
So '528 falls by the wayside of anticipation.
Advertising Prior Art
Apotex argued that AstraZeneca had invalidated its own patent with advertising in a British medical journal, Thorax.
In the first of two opinions, the district court agreed that Apotex had shown a likelihood of success in its contention that all of the asserted kit claims were invalid, concluding that the "addition of the instruction does not functionally alter the known product so as to create a new patentable product." AstraZeneca LP v. Apotex, Inc. ("Opinion"), 623 F. Supp. 2d 579, 591 (D.N.J. 2009). With respect to the asserted method claims, the court determined that under its construction of the term "budesonide composition" Apotex had not shown the asserted method claims likely to be anticipated by the '528 Patent. Id. at 595. The court likewise was not convinced that the Thorax advertisement anticipated these claims, finding persuasive evidence that one of ordinary skill in the art at the time of the invention would not have understood the advertisement to instruct once-daily usage of AstraZeneca's PULMICORT RESPULES® drug. Id. at 596.
The Thorax magazine ad, predating the '603 by more than a year, had the following dosage statement:
Initially . . . the recommended dose in adults . . . is usually 1-2 mg twice daily. . . . Children . . . 0.5-1 mg twice daily. The maintenance dose should be the lowest dose which keeps the patient symptomfree. Recommended doses are Adults . . . 0.5-1 mg twice daily. Children . . . 0.25-0.5 mg twice daily.
When the advertisement was published, AstraZeneca's budesonide product was not approved for any use in the United States and was approved for only twice-daily use in Europe.
Because it is undisputed that the asserted method claims cover the use of budesonide solution, the only question before the district court was whether the advertisement disclosed administering that solution "in a continuing regimen at a frequency of not more than once per day" as recited in the claims. 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 advertisement 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." Opinion at 596. The district court reached that conclusion with the understanding of Dr. Chipps, who also testified that, if made today, the statement "[t]he maintenance dose should be the lowest dose which keeps the patient symptom-free" would be equivalent to the downward-titration language included in the proposed label that AstraZeneca claimed would induce infringement of the asserted method claims. Prelim. Inj. Hr'g Tr. 186, May 4, 2009.
The most natural reading of this passage is that the recommended doses are recommended maintenance doses, which the advertisement explicitly states should be administered twice daily. Thus, although Dr. Chipps testified that the statement "[t]he maintenance dose should be the lowest dose which keeps the patient symptom-free" would, if made today, be equivalent to the downward-titration language included in the proposed label, the advertisement unlike the proposed label clearly states how often a maintenance dose should be given: twice per day.
Anticipation is a question of fact, Sanofi-Synthelabo v. Apotex, Inc., 550 F.3d 1075, 1082 (Fed. Cir. 2008) (citation omitted), that must be established at trial by clear and convincing evidence, Purdue Pharma L.P. v. Boehringer Ingelheim GmbH, 237 F.3d 1359, 1365 (Fed. Cir. 2001). This court reviews for clear error the district court's determination that AstraZeneca has demonstrated that the asserted method claims will likely survive the validity challenge posed by the Thorax advertisement. See Amazon.com, 239 F.3d at 1350.
While the question is close, this court agrees with AstraZeneca that the district court correctly determined that AstraZeneca has demonstrated that the asserted method claims will likely withstand the validity challenge presented by the Thorax advertisement. In the context of anticipation, the question is not whether a prior art reference "suggests" the claimed subject matter as posited by Apotex. Rather, "the dispositive question regarding anticipation [is] whether one skilled in the art would reasonably understand or infer from a [prior art reference]" that every claim element is disclosed in that reference. 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 )).
After considering the reference and appreciating how that reference would have been understood by persons of ordinary skill in the art at that time, this court is not left with a definite and firm conviction that the district court clearly erred by concluding that at trial Apotex will likely not be able to demonstrate by clear and convincing evidence that the Thorax advertisement anticipates the asserted method claims. Accordingly, the district court's determination is affirmed.
Left inscrutable is why Apotex relied upon anticipation rather than the looser obviousness noose.
"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 knowingly 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 reviewed for clear error." Golden Blount, Inc. v. Robert H. Peterson, Co., 438 F.3d 1354, 1361 (Fed. Cir. 2006) (citation 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).
Suggesting to swallow a tablet a day puts the patent in play.
Before the district court, AstraZeneca contended that Apotex's proposed label would induce consumers to infringe the asserted method claims because the label implicitly instructed users to administer the generic drug once daily.
This court agrees with AstraZeneca. Apotex is correct that "where a product has substantial noninfringing uses, intent to induce infringement cannot be inferred even when the [alleged inducer] has actual knowledge that some users of its product may be infringing the patent." Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003). However, "liability for active inducement may be found 'where evidence goes beyond a product's characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed 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 Supreme 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).
The district court found that AstraZeneca would suffer three types of irreparable harm if the court did not grant the requested preliminary injunction. First, the court determined that a confidential settlement agreement between AstraZeneca and Teva would make calculating the economic harm from a premature launch of Apotex's generic budesonide impossible. Second, the court concluded that AstraZeneca would incur unquantifiable damage to its reputation and goodwill if Apotex were allowed to launch its generic drug and was subsequently forced to remove the drug from the market. Third, the court found that the damage caused by layoffs stemming from entry of the generic drug into the market would also be significant and unquantifiable.
The CAFC could not find error here.
Killing the Kit
The asserted kit claims recite two elements: (1) a budesonide composition or suspension in a sealed container containing 0.05 mg to 15 mg budesonide and a solvent, and (2) a label indicating administration by nebulization in a continuing regimen at a frequency of not more than once per day. See, e g., '603 Patent col.12 ll.3-8; '099 Patent col.11 ll.9-14. The district court concluded that the kit claims are invalid, finding the claimed budesonide composition and suspension were known in the prior art and that the instructions in the claimed label are non-statutory subject matter and therefore not entitled to patentable weight. Opinion at 589-92.
There is no dispute that the budesonide suspension recited in the claims is known in the prior art. The question before us is whether the district court correctly determined that the recitation in the claims of a label instructing not more than once-a-day dosing is of no patentable consequence. This court reviews de novo the district court's determination that the asserted claims recite non-statutory subject matter. See In re Comiskey, 554 F.3d 967, 975 (Fed. Cir. 2009) (explaining that "whether the asserted claims . . . are invalid for failure to claim statutory subject matter under 35 U.S.C. § 101 is a question of law which we review without deference." (quoting AT&T Corp. v. Excel Commc'ns, Inc., 172 F.3d 1352, 1355 (Fed. Cir. 1999))).
Printed matter isn't generally patentable, but printing to establish a "functional relationship" has patentable traction potential.
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 meritorious, do not constitute patentable subject matter, e.g., printed matter . . . ." (citation omitted)). However, as observed by the district court, this court has long recognized an exception to this general rule: If there is a "functional 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 instructions. Concluding that this content was not functionally 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.
This court agrees with Apotex that as in Ngai the claimed instructions here are not entitled to patentable weight. The instructions in no way function with the drug to create a new, unobvious product. Removing the instructions from the claimed kit does not change the ability of the drug to treat respiratory diseases. Although AstraZeneca is correct that FDA regulations require a label containing information needed for the safe and effective use of any drug, this is a requirement for FDA approval, not patentability.
This court also agrees with the district court that the dispute over whether the "substrate" is the label or the drug is immaterial, for in both cases the instructions do nothing more than explain how to use the known drug. Our decision in Ngai foreclosed the argument that simply adding new instructions to a known product creates the functional relationship necessary to distinguish the product from the prior art. As explained in Ngai, if this court concluded otherwise "anyone could continue patent- ing a product indefinitely provided that they add a new instruction sheet to the product." 367 F.3d at 1339. Neither the Patent Act nor our precedent countenances such an outcome. The district court's determination that the kit claims are invalid is affirmed.
Fully affirmed. Hats off to New Jersey District Court Judge Renee Marie Bumb for a well-reasoned ruling in tough terrain.
Judge Bryson, in partial dissent, would have vacated the preliminary injunction because he thought better of Apotex's invalidity attack on the other '603 claims.
Posted by Patent Hawk at November 2, 2010 12:40 AM | Injunction
You'll note all the little notes throughout the case that state that the defendant was very careful not to argue anything that would invalidate the claims.
Lulz. Oh well, if their own patents are valuable enough to them to take this big of a hit, more power to them. Someone else will come along after them and do the deed.
Posted by: 6000 at November 6, 2010 1:26 PM
Worth repeating (especially for you 6000):
"However, as observed by the district court, this court has long recognized an exception to this general rule: If there is a "functional 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)."
Posted by: Pedantic Pete at November 6, 2010 9:56 PM