Glaxo Group Ltd. v. Apotex, Inc.

• Decision Date: 27 July 2004
• Docket Number: No. 03-1575.,03-1575.
• Citation: 376 F.3d 1339
• Parties: GLAXO GROUP LIMITED and Smithkline Beecham Corp., Plaintiffs-Appellees, v. APOTEX, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

376 F.3d 1339

GLAXO GROUP LIMITED and Smithkline Beecham Corp., Plaintiffs-Appellees, v. APOTEX, INC., Defendant-Appellant.

No. 03-1575.

United States Court of Appeals, Federal Circuit.

Decided: July 27, 2004.

Rehearing Denied September 10, 2004.

Appeal from the United States District Court for the Northern District of Illinois, Robert W. Gettleman, J.

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Dennis J. Mondolino, Morgan, Lewis & Bockius LLP, of New York, NY, argued for plaintiffs-appellees. With him on the brief were Michael F. Hurley, Brett M. Schuman, Esther H. Steinhauer, Brian W. Nolan and Christopher S. Pennisi. Of counsel was Thomas M. Peterson, of San Francisco, CA.

Scott B. Feder, Lord, Bissell & Brook LLP, of Chicago, IL, argued for defendant-appellant. With him on the brief were Hugh L. Moore, Hugh S. Balsam and Kevin M. Nelson.

Before SCHALL, GAJARSA, and DYK, Circuit Judges.

Opinion for the court filed by Circuit Judge GAJARSA. Opinion concurring-in-part and dissenting-in-part filed by Circuit Judge DYK.

GAJARSA, Circuit Judge.

Apotex, Inc. ("Apotex") appeals the judgment of the United States District Court for the Northern District of Illinois, which found that Apotex's filing of an Abbreviated New Drug Application ("ANDA") for a generic version of the antibiotic Ceftin(R) willfully infringed U.S. Patent No. 4,562,181 (the "'181 patent") and U.S. Patent No. 4,820,833 (the "'833 patent") owned by Glaxo Group Limited and SmithKline Beecham Corp. (collectively "Glaxo"). Glaxo Group Ltd. v. Apotex, Inc., 268 F.Supp.2d 1013 (N.D.Ill.2003). While we affirm the district court's determination that Apotex's ANDA infringes the "'181 and '833 patents pursuant to 35 U.S.C. § 271(e)(2), and also affirm that the patents at issue are not invalid, we reverse the district court's finding that Apotex's ANDA filing constituted willful infringement. We hold that the mere filing of an ANDA cannot constitute an act of willful infringement compensable by attorney's fees under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act.

I. BACKGROUND

A. The '181 and '833 patents

Glaxo is the owner by assignment of a series of patents directed to antibiotics in the cephalosporin family. In the 1970s, Glaxo developed the cephalosporin compound of cefuroxime, the subject of U.S. Patent No. 3,974,153. Cefuroxime required intravenous or intramuscular injection because of bioabsorption difficulties and was therefore of limited usefulness. Glaxo then synthesized a family of cefuroxime esters that were capable of oral administration and obtained U.S. Patent No. 4,267,320 (the "'320 patent"), which issued May 12, 1981. The '320 patent claimed, among other compounds, a compound known as cefuroxime axetil (hereinafter "CA"). The '320 patent disclosed CA in the forms of (1) an impure amorphous compound and (2) a purer crystalline compound. Crystalline compounds contain a structure whereby molecules are arranged in a regularly repeating order. By contrast, amorphous is often defined as the opposite of crystalline and refers to a structure where molecules are randomly distributed with respect to one another. See Glaxo Group Ltd. v. Ranbaxy Pharms., Inc., 262 F.3d 1333, 1335 (Fed.Cir. 2001) (explaining that amorphous compounds lack an "ordered arrangement").

After the issuance of the '320 patent, Glaxo scientists continued development on CA because of persistent difficulties with bioabsorption. On July 29, 1983, Glaxo filed the application that matured into the '181 patent, a continuation of U.S. Patent Application Ser. No. 781,505 (the "'505 application"). The '181 patent is directed to a highly pure amorphous form of CA that offers superior bioavailability and stability than crystalline forms of CA. According to the patent, the discovery that an amorphous CA compound provided a better pharmaceutical formulation ran counter to the expectations of those familiar with cephalosporin compounds. '181 patent, col. 2, ll. 3-9. The '181 patent issued on December 31, 1985, and expired on July 29, 2003.

The '181 patent has fourteen claims, of which Claims 1 and 8 are most relevant to the current appeal:

1. Cefuroxime axetil in amorphous form essentially free from crystalline material, and having a purity of at least 95% aside from residual solvents.

8. An antibacterial pharmaceutical composition containing an antibacterially effective amount of cefuroxime axetil according to claim 1 in admixture with one or more pharmaceutical carriers or excipients.

Id. at col. 13, ll. 4-8; col. 14, ll. 1-4 (emphasis added).

In addition to the '181 patent, Glaxo holds the '833 patent claiming a method for preparing highly pure amorphous CA. The '833 patent, which, like the '181 patent, is a continuation of the '505 application, issued on April 11, 1989. The '833 patent contains a terminal disclaimer and expired on July 31, 2003, along with the '181 patent. The one independent claim of the '833 patent reads:

1. A process for preparing a highly pure, substantially amorphous form of cefuroxime axetil which comprises preparing a highly pure solution of cefuroxime axetil and spray drying said solution to recover highly pure, substantially amorphous cefuroxime axetil.

%'833 patent, col. 14, ll. 4-8 (emphasis added). Spray drying is a technique by which a solution is atomized into droplets and then instantaneously dried, creating an amorphous rather than a crystalline form of the compounds suspended in the solution. See id. at col. 8, ll. 27-41.

The commercial embodiment of the '181 and '833 patents is Ceftin(R), a drug formulation approved by the Food and Drug Administration ("FDA") that has been very successful in the marketplace. Glaxo has generated almost $4 billion in sales from Ceftin(R) in the drug's fifteen years on the market.

B. ANDA

On April 5, 2000, Apotex filed an ANDA seeking approval by the FDA to market a generic version of Ceftin(R). Apotex creates its generic drug by: (1) dissolving excipients zinc chloride and sorbitol into a solution of water and acetone along with approximately 98% pure crystalline CA; (2) mixing the resulting solution; (3) spray drying the solution under nitrogen; (4) collecting, compacting, and milling the resulting spray dried amorphous particles into granules; (5) mixing the granules with additional excipients; (6) compressing the resulting blend into a tablet core; and (7) coating the tablet. Apotex's spray dried solution creates an amorphous "co-precipitate" comprised of 90% CA, 9% sorbitol, and 1% zinc chloride by mass. On November 26, 2002, the patent office issued to Apotex U.S. Patent No. 6,485,744 (the " '744 patent") relating to Apotex's unique use of zinc chloride as a stabilizing excipient for CA.

Apotex's ANDA filing is atypical in that it did not contain a certification pursuant to 21 U.S.C. § 355(j)(2)(A). Under the Hatch-Waxman Act, most patentees and NDA holders must list patents related to their approved drugs in the FDA's "Approved Drug Products with Therapeutic Equivalence Evaluations" publication (the "Orange Book"). 21 U.S.C. § 355(b)(1). Reciprocally, a generic company has an obligation to consult the Orange Book before filing an ANDA and certify that either (I) no patent information is listed in the Orange Book for the proposed generic drug; (II) that the listed patents have expired; (III) that the listed patents will expire before the generic company markets its product; or (IV) that the patents listed are invalid or will not be infringed by the generic drug (a "paragraph IV certification"). 21 U.S.C. § 355(j)(2)(A)(I)-(IV).

In the current case, however, CA was approved under 21 U.S.C. § 357, a now-repealed provision of the Federal Food, Drug, and Cosmetic Act relating to antibiotics. Drug manufacturers who utilized Section 357 to obtain FDA approval are exempt from listing the patents related to their antibiotic in the Orange Book. Correspondingly, ANDA applicants attempting to market generics of such antibiotics are not required to file a certification under 21 U.S.C. § 355(j)(2)(A). See Pub. L. 105-115, Title I, § 125(d), 11 Stat. 2326 (1997). Accordingly, Glaxo did not list the '181 or '833 patent in the Orange Book, and Apotex therefore did not file a paragraph IV certification in its ANDA application.

C. Procedural History

Glaxo brought a declaratory judgment action against Apotex after the filing of Apotex's ANDA, alleging anticipatory infringement and "artificial" infringement pursuant to 35 U.S.C. § 271(e)(2)(A). Section 271(e)(2)(A) provides a jurisdictional basis for a declaratory judgment suit against a generic manufacturer and states:

(2) It shall be an act of infringement to submit —

(A) an application under Section 505(j) of the Federal Food, Drug, and Cosmetic Act ... for a drug claimed in a patent or the use of which is claimed in a patent, ... [i]f the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug... claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.

35 U.S.C. § 271(e)(2)(A); see also Glaxo, Inc. v. Novopharm Ltd., 110 F.3d 1562, 1569 (Fed.Cir.1997) (stating that " § 271(e)(2) provided patentees with a defined act of infringement sufficient to create case or controversy jurisdiction to enable a court to promptly resolve any dispute concerning infringement and validity"); Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990) (explaining that 35 U.S.C. § 271(e)(2) and (e)(4) have a "very limited and technical purpose" and that such purpose is "to enable the judicial adjudication upon which the ANDA and paper NDA schemes depend").

On June 10, 2002, the district court issued a preliminary injunction preventing Apotex from marketing its generic CA product pending resolution of the case. As part of its order enjoining Apotex, the...