In re Omeprazole Patent Litigation

• Decision Date: 23 April 2007
• Docket Number: No. 04-1562.,No. 04-1563.,No. 04-1589.,04-1562.,04-1563.,04-1589.
• Citation: 483 F.3d 1364
• Parties: In re OMEPRAZOLE PATENT LITIGATION. Astra Aktiebolag, Aktiebolaget Hassle, Astra Merck Enterprises Inc., Astra Merck Inc., KBI-E, Inc., KBI, Inc., and Astrazeneca LP, Plaintiffs-Cross Appellants, v. Andrx Pharmaceuticals, Inc., Defendant-Appellant, and Genpharm, Inc., Kremers Urban Development Co., and Schwarz Pharma, Inc., Defendants.
• Court: U.S. Court of Appeals — Federal Circuit

483 F.3d 1364

In re OMEPRAZOLE PATENT LITIGATION Astra Aktiebolag, Aktiebolaget Hassle, Astra Merck Enterprises Inc., Astra Merck Inc., KBI-E, Inc., KBI, Inc., and Astrazeneca LP, Plaintiffs-Cross Appellants, v. Andrx Pharmaceuticals, Inc., Defendant-Appellant, and Genpharm, Inc., Kremers Urban Development Co., and Schwarz Pharma, Inc., Defendants.

No. 04-1562.

No. 04-1563.

No. 04-1589.

United States Court of Appeals, Federal Circuit.

April 23, 2007.

Errol B. Taylor, Milbank, Tweed, Hadley & McCloy LLP, of New York, NY, argued for plaintiffs-cross appellants. With him on the brief were Fredrick M. Zullow and Lawrence T. Kass; and Jay I. Alexander, of Washington, DC. Of counsel were John M. Griem, Jr. and Claire A. Gilmartin.

Margaret A. Dale, Proskauer Rose LLP, of New York, NY, argued for defendant-appellant. With her on the brief were Louis M. Solomon and Jeremy R. Kasha. Of counsel on the brief were James V. Costigan and Martin P. Endres, Hedman & Costigan, of New York, NY.

Before NEWMAN, RADER, and BRYSON, Circuit Judges.

Opinion for the court filed by Circuit Judge RADER. Opinion concurring in part and dissenting in part filed by Circuit Judge, NEWMAN.

RADER, Circuit Judge.

Astra Aktiebolag, Aktiebolaget Hässle, Astra Merck Enterprises Inc., Astra Merck Inc., KBI-E Inc., KBI Inc., Astra Pharmaceuticals L.P., and AstraZeneca L.P. (collectively Astra) filed patent infringement suits against several pharmaceutical companies that were seeking permission from the Food and Drug Administration (FDA) to market generic versions of Prilosec®, Astra's gastric acid inhibiting drug. The United States District Court for the Southern District of New York tried the case in four phases. Following a fifty-two day bench trial, the district court decided in Phases I and III that Andrx's product infringes two of Astra's patents, U.S. Patent Nos. 4,786,505 (the '505 patent) and 4,853,230 (the '230 patent). Astra Aktiebolag v. Andrx Pharm., Inc., 222 F.Supp.2d 423 (S.D.N.Y.2002). This court affirmed that judgment. In re Omeprazole Patent Litig., 84 Fed.Appx. 76 (Fed.Cir.2003) (Omeprazole II).

This appeal involves Phases II and IV of the same litigation. The district court entered a final judgment finding that Andrx Pharmaceuticals, Inc. (Andrx) literally infringed claims 1, 2, 3, 7, 9, 16, and 20-21 of Astra Aktiebolag's United States Patent No. 6,013,281 (the '281 patent). The trial court also entered several other judgments about the enforceability of that patent and other Astra patents. In re Omeprazole Patent Litig., M-21-81 (BSJ), MDL Docket No. 1291 (S.D.N.Y. July 15, 2004) (Final Judgment). At the same time, however, the district court also found the asserted claims of Astra's '281 patent anticipated or obvious. Final Judgment, slip op. at 2. Detecting no error of law or fact, this court affirms.

I

Phases I and III of this case produced judgments of patent infringement against Andrx and other defendants. This case, however, involves only the '281 patent and one defendant, Andrx. As set out in the district court's thorough 38-page opinion, Phase II involves infringement and validity of the '281 patent; Phase IV involves Andrx's defenses of inequitable conduct and unclean hands. In re Omeprazole Patent Litigation, M-21-81 (BSJ), MDL Docket No. 1291 (S.D.N.Y. May 19, 2004) (Omeprazole III). In addition, unlike the patents that claimed a formulation in Phases I and III, the '281 patent claims only a process.

Omeprazole is the generic name for Prilosec®. Astra Aktiebolag v. Andrx Pharm., Inc., 222 F.Supp.2d 423, 433 (S.D.N.Y.2002) (Omeprazole I). Omeprazole inhibits the production of gastric acid through a unique mechanism. Id. at 434. After a complex absorption process, Omeprazole transforms into its active species in the parietal cells (acid-producing cells in the stomach lining) and inhibits acid production. Id. However, omeprazole degrades in acidic and neutral environments. Therefore, it must be protected from contact with gastric juices while traveling to the parietal cells. Omeprazole III, slip op. at 3. Thus, an omeprazole formulation needs a protective enteric coating around the core containing the active alkaline reacting compound (ARC) and a separating layer between that core and the coating. Id.

The '281 patent recites a method for making this pharmaceutical formulation. The pharmaceutical formulation is composed of a core that contains a proton pump inhibitor like omeprazole to decrease gastric acid secretion, a water soluble separating layer, and an enteric coating layer. '281 patent, Abstract. Specifically, the '281 patent recites a process for creating the separating layer by causing an in situ reaction involving the enteric-coating material and the ARC in the core. Omeprazole III, slip op. at 4. The reaction creates a salt form of the enteric-coating polymer between the core and the enteric-coating layer. Id. Thus, the '281 process produces an omeprazole formulation with three distinct layers, but starts with only two of the three layers. Id. This in situ reaction requires a specific ARC concentration in the core. Claim 1, for example, requires more than 0.1 mmol/g dry ingredients in the alkaline-containing core:

1. A process for preparing an oral pharmaceutical formulation comprising the steps of:

forming a core material comprising a proton pump inhibitor and at least one alkaline reacting compound [ARC], wherein the concentration of the alkaline reacting compound is about 0.1 mmol/g dry ingredients in the alkaline containing part of the core material, and applying an enteric coating polymer layer so as to surround the core material thereby forming in situ a separating layer as a water soluble salt product between the alkaline compound and the enteric coating polymer.

'281 Patent col.15 l.65 — col.16 l.9. The remaining claims all depend upon claim 1. Claim 9, which the district court found obvious, recites:

9. The process according to claim 1, wherein the alkaline reacting compound is an alkaline salt of phosphoric acid, carbonic acid or silicic acid.

'281 Patent col.18 ll.3-5. The '281 process adjusts the variables during the enteric-coating process to account for the particular enteric coatings. Omeprazole III, slip op. at 4. The '281 patent states that "process parameters such as inlet air temperature, air flow, atomizer air flow and spraying rate are adjusted with respect to the equipment used for the process as well as the specific enteric coating polymer(s)." '281 Patent col. 8 ll.51-55. For example, when using hydroxypropyl methylcellulose acetate succinate LF (HPMCAS LF) for applying the enteric coating to a tablet, in the specification under "Examples," the patent states:

100 grams of . . . core material . . . was film-coated . . . as described below. . . . The dispersion was fed with a rate of 3.8 g/min. Inlet air temperature used was 42 °C[sic] and flow was set to 40 Nm³/h. Atomizing airflow used was 2.1 Nm³/h, obtained with a pressure of 1.7 bar.

'281 Patent col.11 ll.41-65. After enteric coating, the specification also specifies an increase in the inlet air temperature to 60 °C for approximately five minutes. Id.

The '281 patent issued in the United States on January 11, 2000, with priority back to the February 9, 1995, Swedish application. However, in 1993, before Astra's Swedish filing, a Korean company, the Chong Kun Dan Corporation (CKD), began selling a form of omeprazole under the name "OMP" in Korea. CKD had filed an application (CKD Patent Application) with the Korean Intellectual Property Office (KIPO) for its OMP formulation. The CKD Patent Application became public at KIPO on April 20, 1993. Omeprazole III, slip op. at 2. As a result, Astra questioned CKD about infringement of its Korean process patent for manufacturing omeprazole, a foreign sister to portions of Astra's '505 (Astra's Korean Patent), which issued on November 22, 1988. CKD denied infringement in reliance on its own "unique know-how and . . . patents." CKD's Korean patent publications described compositions with no enteric coating processes. CKD maintained its enteric coating process—its "know how"—as a trade secret.

Astra filed suit in Korea against CKD for infringement. CKD initiated a proceeding in the KIPO, called a "negative confirmation of scope proceeding," seeking an advisory opinion that its process did not infringe Astra's Korean Patents.

This Korean Litigation and its associated KIPO proceedings turned on whether CKD's OMP product contained a subcoating. CKD relied on its two-step process to avoid Astra's Korean '505 patent. This two-step method — variously referred to in the documents as "Method A," method "No. (Ga)" or method "(Ka)ho" (collectively Method A) — did not involve a separate third step to make a sub-coating. CKD's description of Method A included core ingredients (omeprazole, arginine, microcrystalline cellulose, SLS, corn starch and magnesium stearate) and enteric coating ingredients (HPMCAS, ethyl citrate, talc, and sorbitan sesquioleate), but no enteric coating process conditions. Then, in September 1993, CKD submitted a modified list of ingredients for the Method A process which added the coating agent "HPMC grade 2910," but still provided no enteric coating process conditions. The '505 patent required a separate application of a subcoating. Omeprazole I, 222 F.Supp.2d at 444-47. To verify CKD's denials of any third sub-coating application step, Astra conducted various experiments on CKD's product. Astra's investigations and testing of CKD's batches MA00200 and MA00400 led Astra to repeatedly conclude that CKD's product in fact contained a subcoating. Thus, the Astra inventors continued to believe that CKD actually applied a conventional separating layer.

Thereafter, in June 1994, two of Astra's '281 patent inventors, Dr. Kurt Lövgren and Johan Lundberg, Ph.D., postulated instead that neutralizing enteric coating materials may produce a reaction in situ....