Pfizer v. Teva (Fed. Cir. 2005) (05–1331).
On appeal from the District Court’s grant of a preliminary injunction against generic manufacturers/distributors Ranbaxy and Teva, the Federal Circuit concurred with the lower court’s finding of likelihood of success and irreparable harm and thus affirmed the PI grant. Perhaps the most significant portion of the decision related to the Circuit’s clarification of dedication of subject matter to the public for the purposes of the doctrine of equivalents, as recently set forth in Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co. (Fed. Cir. 2002) (en banc).
Warner-Lambert is the assignee of the ‘450 patent, which claims pharmaceutical compositions using compounds known as ACE inhibitors. Warner-Lambert marketed a specific ACE inhibitor, quinapril, under the trademark Accupril®. Claim 1 of the ‘450 patent is directed to specific formulations of ACE inhibitors containing components that prevent degradation of the ACE inhibitor, and which specifically prevent hydolysis and oxidation. Claim 16 is directed to methods of stabilizing the ACE inhibitor by combining the ACE inhibitor with the additional components. One of the primary issues in the case revolved around the construction of the claim term “saccharides” (used in the patent to inhibit hydrolysis).
In 1999, Teva filed an Abbreviated New Drug Application (“ANDA”) with the FDA to begin marketing a generic version of Accupril®. Pursuant to provisions of the Hatch-Waxman Act, Teva also filed a Paragraph IV certification alleging that the ‘450 patent covering the drug was invalid. Relying on the P-IV certification for jurisdiction, Warner-Lambert filed suit against Teva and, during the course of that litigation, the parties agreed to a stipulated claim construction for the term “saccharides.” That litigation is not the subject of this dispute. As a result of being the first generic to file an ANDA, Teva was entitled to a 180-day exclusivity upon launch of its product.
In 2002, Ranbaxy also filed an ANDA and Paragraph IV certification — this time alleging that, based on the stipulated claim construction from the previous Teva case, its formulation would not infringe the patent. Specifically, Ranbaxy argued that it use of a microcrystalline cellulose fell outside the scope of the “saccharides” disclosed and claimed in the ‘450 patent. Ranbaxy & Teva entered into an agreement whereby Teva would distribute Ranbaxy’s allegedly non-infringing generic product, and, in late 2004, Teva gave up its exclusivity period and began marketing Ranbaxy’s generic. Warner-Lambert and its parent company, Pfizer, then filed suit against Teva and Ranbaxy. Warner-Lambert successfully sought a preliminary injunction against Teva and Ranbaxy, and that PI grant was the subject of the instant appeal. In granting the PI, the district court elected not to adopt the stipulated claim construction from the previous Teva case.
Stipulated Claim Construction: In addressing the construction of the term “saccharides,” the Circuit explicitly refused to adopt the claim construction stipulated to by Warner-Lambert and Teva in the prior litigation, primary because the stipulation stated that it was solely for the purposes of that litigation. Rejecting Ranbaxy’s very limited construction of saccharides as sugars having less than 10 monosaccharide units (which was based on a portion of the patent that read “saccharides (i.e. sugars)”), the Court noted that adopting Ranbaxy’s construction would improperly remove a preferred embodiment from the scope of the claims. Referring to more exemplary language in the patent, the Circuit found no error in the lower court’s claim construction, which defined saccharides to include polysaccharides having more than 10 monosaccharide units. Ranbaxy had already admitted that this claim construction would result in a finding of infringement of Claim 16 of the patent, thus the Court also endorsed the lower court’s finding of infringement of Claim 16.
With respect to Claim 1, Ranbaxy argued that it required that the saccharide component actually inhibit hydrolysis. The Circuit again failed to find error in the lower court’s consideration of expert testimony indicating that the microsrystalline cellulose actually inhibited hydrolysis in finding literal infringement of claim 1, even though that expert had not conducted his own tests of the product. The Circuit held that quantitative testing is not a prerequisite to a finding of infringement, especially in the PI context.
DOE: The Court next addressed infringement under the doctrine of equivalents, although it noted that its finding of literal infringement of both claims 1 and 16 obviated the need to do so. The Court argued, however, that because claim construction can evolve as the case evolves, it would be appropriate for it to address DOE issues in the appeal.
The focus of Ranbaxy’s DOE argument was that Warner-Lambert had explicitly dedicated microcrystalline cellulose to the public by disclosing it but not claiming it in the ‘450 patent. Both the lower court and the Circuit stated, however, that the “disclosure-dedication rule” did not apply in this case because the disclosures of cellulose in the ‘450 patent were not explicitly set forth as alternatives to any claim element. The Circuit clarified the disclosure-dedication rule by stating that “the public notice function of patents suggests that before unclaimed subject matter is deemed to have been dedicated to the public, that unclaimed subject matter must have been identified by the patentee as an alternative to a claim limitation.”
The Circuit further summarily rejected Ranbaxy’s argument that inclusion of microcrystalline cellulose under the DOE would violate the all limitations rule.
Finally, the Court affirmed the lower court’s finding that Warner-Lambert was entitled to a presumption of irreparable harm, based on the strength of its likelihood of success, and that Ranbaxy had failed to rebut the presumption. The Circuit found that neither (1) Warner-Lambert’s decision to sue one infringer at a time nor (2) Warner-Lambert’s grant of a single narrow, exclusive license, nor (3) Warner-Lambert’s decision not to sue Ranbaxy within the 45-day limits provided under Hatch-Waxman in order to activate a 30-month stay on approval of the Ranbaxy product vitiated the presumption of harm. The Court found no abuse of discretion in the lower court’s balancing of the harms, or in the lower court’s balancing of the public interest in favor of enforcing valid patents over the public interest in low cost generic medication.
Richard Carden is an intellectual property litigator at MBHB with litigation experience in cases involving diverse technologies, including medical devices, diagnostic equipment, pharmaceuticals, injection-molding systems, and automotive refrigerants. His background includes a BSE in chemical engineering from Tulane University, an MS in chemical engineering from the University of Pennsylvania, and JD from Washington University in St. Louis.