Apotex USA v. Meck & Co

• Decision Date: 08 June 2001
• Citation: 59 USPQ2d 1139,254 F.3d 1031
• Parties: (Fed. Cir. 2001) APOTEX USA, INC., Plaintiff-Appellant, v. MERCK & CO., INC., Defendant-Appellee. 00-1272 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1031

254 F.3d 1031 (Fed. Cir. 2001)

APOTEX USA, INC., Plaintiff-Appellant, v. MERCK & CO., INC., Defendant-Appellee.

00-1272

United States Court of Appeals for the Federal Circuit

DECIDED: June 8, 2001

Corrected: June 26, 2001

Appealed from: U.S. District Court for the Northern District of Illinois Judge Matthew F. Kennelly

[Copyrighted Material Omitted]

Alan H. Bernstein, Caesar, Rivise, Bernstein, Cohen & Pokotilow, LTD., of Philadelphia, Pennsylvania, argued for plaintiff-appellant. With him on the brief were Robert S. Silver and William Joseph Castillo.

Nicolas G. Barzoukas, Howrey Simon Arnold & White, LLP, of Houston, Texas, argued for defendant-appellee. With him on the brief were John F. Lynch, Gerard M. Devlin, Jr., and Peter J. Chassman, Howrey Simon Arnold & White, LLP, and Paul D. Matukaitis, Merck & Company, of White Station, New Jersey.

Before LOURIE, CLEVENGER, and LINN, Circuit Judges.

LOURIE, Circuit Judge.

Apotex USA, Inc. appeals from the decision of the United States District Court for the Northern District of Illinois granting Merck & Co., Inc.'s motion for summary judgment that the claims of U.S. Patents 5,573,780 and 5,690,962 are invalid under 35 U.S.C. § 102(g). Apotex Corp. v. Merck & Co., No. 96-C-7375, (N.D. Ill. Jan. 25, 2000) ("Apotex I"). Because the district court did not err in granting summary judgment that the '780 and '962 patents are invalid under 35 U.S.C. § 102(g), we affirm.

BACKGROUND

Apotex is the assignee of the '780 and '962 patents, which relate to a process for making a stable solid formulation of enalapril sodium for use in the treatment of high blood pressure. Apotex I at *1. Claim 1 of the '780 patent, which is representative of the claims at issue, reads as follows:

1. A process of manufacture of a pharmaceutical solid composition comprising enalapril sodium, which process comprises the steps of:

i) a) mixing enalapril maleate with an alkaline sodium compound and at least one other excipient, adding water sufficient to moisten, and mixing to achieve a wet mass, or

b) mixing enalapril maleate with at least one excipient other than an alkaline sodium compound, adding a solution of an alkaline sodium compound in water, sufficient to moisten and mixing to achieve a wet mass; thereby to achieve a reaction without converting the enalapril maleate to a clear solution of enalapril sodium and maleic acid sodium salt in water,

ii) drying the wet mass, and iii) further processing the dried material into tablets.

'780 patent, col. 5, l. 34 to col. 6, l. 15. The claims of the '962 patent, which is a continuation of the application that led to the '780 patent, are identical to those found in the '780 patent except that they are not restricted to tablet form, but rather encompass any solid pharmaceutical dosage form of enalapril sodium. '962 patent, col. 5, l. 22 to col. 6, l. 11. This distinction is not material to the resolution of this appeal.

Merck manufactures enalapril sodium under the trade name VASOTEC , and has been continuously manufacturing and commercially selling VASOTEC tablets since 1983. Apotex I at *7. Merck owns both U.S. and Canadian patents covering the enalapril sodium compound, but does not own a patent covering its process of manufacturing VASOTEC . Id. at *1. However, in 1992, Merck disclosed the ingredients utilized in its VASOTEC manufacturing process in a Canadian product monograph, and more than 30,000 copies of the monograph were distributed in 1993 alone. Id. at *7. Merck also disclosed the ingredients used in manufacturing RENITEC (the trademark used for its enalapril sodium product sold in various foreign countries) in the 1988 edition of the Dictionnaire Vidal, a French pharmaceutical dictionary. Id.

In 1991, Merck and its Canadian subsidiary, Merck Frosst Canada, Inc., sued Apotex's Canadian affiliate, Apotex Canada, for infringement of Merck's Canadian patent covering the enalapril sodium compound. Id. at *1. During the 1994 trial ("the Canadian trial"), Brian McLeod, Merck's then-vice president of marketing, performed a step-by-step narration of a videotape demonstrating Merck's process of manufacturing VASOTEC . Id. Within days of hearing this testimony, Dr. Bernard Sherman, an Apotex official, allegedly conceived the patented process at issue. Id.

Apotex filed the present action against Merck, alleging that Merck's process of manufacturing VASOTEC infringes all of the claims of both the '780 and '962 patents. Id. Both parties filed cross-motions for summary judgment on the issue of infringement, and Merck cross-moved for summary judgment of invalidity under § 102(g). Id. The district court granted Apotex's motion for summary judgment of infringement, but also granted Merck's cross-motion for summary judgment of invalidity because it found that Merck invented the process claimed in the '780 and '962 patents within the United States before Apotex, and did not abandon, suppress, or conceal that invention within the meaning of § 102(g). Id. at *9.

Apotex thereafter filed a motion asking the court to reconsider its grant of summary judgment of invalidity, which the district court denied. Apotex Corp. v. Merck & Co., No. 96-C-7375, (N.D. Ill. Mar. 17, 2000). Apotex appeals from the district court's grant of summary judgment of invalidity. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (1994).

DISCUSSION

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). For purposes of the motion, "[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). We review a district court's grant of a motion for summary judgment de novo. Ethicon Endo-Surgery, Inc. v. United States Surgical Corp., 149 F.3d 1309, 1315, 47 USPQ2d 1272, 1275 (Fed. Cir. 1998).

Apotex argues that the district court improperly invalidated the '780 and '962 patents because Merck failed to prove by clear and convincing evidence that it did not suppress or conceal the patented process. Apotex contends that proof of invalidity under § 102(g) requires Merck to prove that it did not suppress or conceal the process of manufacturing VASOTEC tablets based on its activities within the United States, and that Merck's foreign disclosures therefore cannot be used to satisfy its burden of proof. Apotex also contends that, in any event, Merck's foreign disclosures fail to prove that it did not suppress or conceal the process because nothing in the testimony from the Canadian trial, the product monograph, or the French dictionary disclosed the use of water, the occurrence of an acid-base chemical reaction between enalapril maleate and sodium bicarbonate, or the resultant enalapril sodium product. Finally, Apotex argues that the evidence demonstrates that Merck in fact suppressed or concealed its invention by failing to file a patent application on the process, by submitting misleading information in its New Drug Application ("NDA") that only disclosed the starting ingredients used to make VASOTEC , and by preventing the details of its process from circulating outside of the company.

Merck responds that § 102(g) only requires proof that the prior invention was made in the United States, and that evidence of lack of suppression or concealment can be proven by both foreign and domestic activities. Merck further argues that it did not suppress or conceal the process because it used it commercially, disclosed it in open court directly to its competitor, and published the ingredients used to make VASOTEC tablets in both the product monograph and the French dictionary. Merck also argues that the submissions it made with respect to its NDA were proper and in any event could not constitute suppression or concealment because it was the Food and Drug Administration that never made those submissions public. Finally, Merck contends that the process was not suppressed or concealed because it was obvious and Dr. Sherman admitted that VASOTEC tablets could be reverse-engineered to reveal the details of the process.

Section 102(g) operates to ensure that a patent is awarded only to the "first" inventor in law. In addition to governing priority determinations in interference proceedings in the United States Patent and Trademark Office, § 102(g) may be asserted as a basis for invalidating a patent in defense to an infringement suit. New Idea Farm Equip. Corp. v. Sperry Corp., 916 F.2d 1561, 1566, 16 USPQ2d 1424, 1428 (Fed. Cir. 1990) (citation omitted). That section provides in relevant part that: "A person shall be entitled to a patent unless . . . before such person's invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it." 35 U.S.C.A. § 102(g) (West Supp. 2000). Therefore, if a patentee's invention has been made by another, prior inventor who has not abandoned, suppressed, or concealed the invention, § 102(g) will invalidate that patent. New Idea, 916 F.2d at 1566, 16 USPQ2d at 1428.

Apotex does not dispute that Merck invented the patented process in the United States well before Dr. Sherman's alleged date of conception. Apotex also concedes that Merck did not abandon its process of manufacturing VASOTEC tablets as shown by its continuous commercial use of the process since 1983. The sole issue on appeal, therefore, is whether Merck "suppressed" or "concealed" the process within the meaning of § 102(g). Whether suppression or concealment has occurred is a question of law, which we review de novo. Brokaw v. Vogel, 429 F.2d 476, 480, 166 USPQ 428, 431 (CCPA 1970).

As an initial matter, we disagree with Apotex's interpretation of §...