Roche Palo Alto LLC v. Apotex, Inc.

• Decision Date: 09 July 2008
• Docket Number: No. 2008-1021.,2008-1021.
• Citation: 531 F.3d 1372
• Parties: ROCHE PALO ALTO LLC (formerly known as Syntex (U.S.A.) LLC) and Allergan, Inc., Plaintiffs-Appellees, v. APOTEX, INC. and Apotex Corp., Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

531 F.3d 1372

ROCHE PALO ALTO LLC (formerly known as Syntex (U.S.A.) LLC) and Allergan, Inc., Plaintiffs-Appellees, v. APOTEX, INC. and Apotex Corp., Defendants-Appellants.

No. 2008-1021.

United States Court of Appeals, Federal Circuit.

July 9, 2008.

[531 F.3d 1374]

Alexander L. Brainerd, Heller Ehrman LLP, of San Francisco, California, argued for plaintiffs-appellees. With him on the brief were Christine Saunders Haskett, Samuel F. Ernst, and Nathan E. Shafroth. Of counsel was Keith R. Weed.

Manny D. Poktilow, Caesar, Rivise, Bernstein, Cohen & Pokotilow, LTD., of Philadelphia, Pennsylvania, argued for defendants-appellants. With him on the brief were Robert S. Silver, Mona Gupta, and William J. Castillo. Of counsel on the brief was Shashank S. Upadhye, Apotex, Inc., of Toronto, Ontario, Canada.

Before MICHEL, Chief Judge, PROST, Circuit Judge, and HOCHBERG, District Judge.^*

PROST, Circuit Judge.

This is a patent infringement case under the Hatch-Waxman Act. Apotex, Inc. and Apotex Corp. (collectively "Apotex") appeal the grant of summary judgment by the United States District Court for the Northern District of California that the patent held by Roche Palo Alto LLC and Allergan, Inc. (collectively "Roche") is valid and infringed by the formulation covered by Apotex's abbreviated new drug application ("ANDA"). Roche Palo Alto, LLC v. Apotex, Inc., 526 F.Supp.2d 985 (N.D.Cal.2007). Because we find no error in the court's holding that the reverse doctrine of equivalents is inapplicable and that claim preclusion prohibits Apotex from raising other validity challenges, we affirm.

I

A

Roche is the owner of U.S. Patent No. 5,110,493 ("the '493 patent"), which is directed to a drug formulation for treatment of eye inflammation, such as that caused by glaucoma, conjunctivitis, eye surgery, or eye injury. '493 patent, col. 1, ll. 14-28. The formulation contains a non-steroidal anti-inflammatory drug ("NSAID"), such as ketorolac tromethamine ("KT"); a quaternary ammonium preservative, such as benzalkonium chloride ("BAC"); and the nonionic surfactant, octoxynol 40 ("O₄₀"). Id., col. 3, ll. 13-19, col. 4, ll. 20-41. Claim 1 is representative:

An opthalmologically acceptable nonsteroidal anti-inflammatory drug formulation, comprising:

an opthamologically acceptable nonsteroidal anti-inflammatory carboxyl group-containing drug in an effective amount for ophthalmic treatment between 0.001 % and 10.00% wt/vol;

a quaternary ammonium preservative in an antimicrobially effective amount between 0.001% and 1.0% wt/vol;

an ethoxylated alkyl phenol that conforms generally to the formula: C₈H₁₇ C₆H₄(OCH₂-CH₂)_n OH where n has an average value of 40 [O₄₀] in a stabilizing amount between 0.001% and 1.0% wt/vol; and an aqueous vehicle q.s. to 100%.

Dependent claim 7 further includes sodium chloride ("NaCl") at a concentration of 0.79% wt/vol.

The last limitation in claim 1, requiring the presence of _O40, was added in response to the examiner's obviousness rejection over several prior art references. Accompanying the claim amendment, the applicants submitted the Lidgate Declaration, which stated that O₄₀ produced unexpected results over other nonionic surfactants, such as O₃ and O₅. Specifically, the declaration stated that O₄₀ produced a clear solution while the others did not. The examiner allowed the claims based on the unexpected results of O₄₀.

Over the years, Apotex filed two different ANDAs on two different generic drug formulations, each containing a paragraph IV certification that the '493 patent is invalid, unenforceable, or will not be infringed by the generic version of the drug. In 2001, Apotex filed its first ANDA ("ANDA-1"), directed to a generic version of Roche's ACULAR®. Subsequently, in 2005, Apotex filed its second ANDA ("ANDA-2"), directed to a generic version of Roche's ACULAR®LS. The two formulations differ in their compositions as follows:

                                      ANDA-1                           ANDA-2
                                  (ACULAR®) (ACULAR®LS)
                KT                    0.5%                             0.4%
                BAC                   0.01%                          0.0063%
                O40                   0.01%                           0.004%
                NaCl                   0.8%                             0.8%
                

Notably, the concentration of O₄₀ is reduced in the ANDA-2 formulation as compared to the ANDA-1 formulation, but both are within the range claimed in claim 1 of the '493 patent. The concentration of NaCl is identical in the two formulations and encompassed by at least claim1 of the patent.

B

On June 6, 2001, Roche's predecessor, Syntex (U.S.A.) LLC ("Syntex") sued Apotex for infringement of the '493 patent based on the ANDA-1 formulation. The district court issued a claim construction order. Syntex (U.S.A.) LLC v. Apotex, Inc., No. 01-2214 (N.D.Cal. Nov. 19, 2002). Because claim 1 of the '493 patent expressly states a concentration range for O₄₀, the court held that the claim term "stabilizing amount" is merely a statement of intended result and not a claim limitation. Id., slip op. at 9. Thereafter, the district court granted Syntex's motion for partial summary judgment that the ANDA-1 formulation literally infringed the '493 patent. Syntex (U.S.A.) LLC v. Apotex, Inc., No. 01-2214, slip op. at 4-5 (N.D.Cal. Mar. 19, 2003). Following a bench trial on Apotex's invalidity defenses of lack of utility, lack of enablement, indefiniteness, and obviousness, and its unenforceablity defense based on inequitable conduct, the court held that the '493 patent was both valid and enforceable. Syntex (U.S.A.) LLC v. Apotex, Inc., No. 01-2214 (N.D.Cal. Dec. 29, 2003) ("Syntex I").

On May 18, 2005, this court affirmed the district court's claim construction and holding of no inequitable conduct, but reversed its holding of validity based on nonobviousness. Syntex (U.S.A.) LLC v. Apotex, Inc., 407 F.3d 1371 (Fed.Cir.2005) ("Syntex II"). Specifically, we found that the district court clearly erred in some of its factual findings and misapplied certain legal presumptions with respect to its obviousness analysis. Id. at 1378-83. On remand, the district court again held that the '493 patent was not invalid for obviousness, Syntex (U.S.A.) LLC v. Apotex, Inc., No. 01-2214, 2006 WL 1530101 (N.D.Cal. June 2, 2006) ("Syntex III"), and we affirmed without opinion. 221 Fed.Appx. 1002 (Fed.Cir.2007).

One day after our mandate issued, the Supreme Court issued its opinion on obviousness in KSR International Co. v. Teleflex Inc., ___ U.S. ___, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007). Apotex then filed a motion to recall and stay the mandate, and to extend the time to request a rehearing in view of KSR, but the motion was denied. Apotex also filed a petition for writ of certiorari, and that petition too was denied. Apotex, Inc. v. Syntex (U.S.A.) LLC, ___ U.S. ___, 128 S.Ct. 209, 169 L.Ed.2d 146 (2007).

C

On May 24, 2005, Roche sued Apotex for infringement of the '493 patent based on the ANDA-2 formulation. Apotex asserted the defenses of non-infringement; invalidity under 35 U.S.C. §§ 101, 103, and 112; and unenforceability due to inequitable conduct. Thereafter, Roche filed a motion for summary judgment that the ANDA-2 formulation infringes the '493 patent and that the validity and unenforceability defenses should be barred based on the earlier Syntex litigation (Syntex I, Syntex II, and Syntex III) under the doctrines of issue preclusion and claim preclusion. Apotex countered by arguing that the ANDA-2 formulation escapes infringement under the reverse doctrine of equivalents. Apotex further averred that the doctrines of issue preclusion and claim preclusion were inapplicable because the ANDA-2 formulation and the ANDA-1 formulation were distinct, and the change in law exception, in view of KSR, prevented application of those doctrines.

On September 11, 2007, the district court granted Roche's motion for summary judgment. Roche Palo Alto LLC v. Apotex, Inc., 526 F.Supp.2d 985 (N.D.Cal. 2007). First, the court found that Apotex had failed to properly establish the "principle" of the '493 invention under the first prong of the reverse doctrine of equivalents analysis. Id. at 992-93. Although Apotex contended that the "principle" of the invention was to use O40 to provide robust stability to the formulations by forming micelles to prevent interaction between KT and BAC, the court noted that Apotex did not support this "principle" by reference to the claim language, specification, prosecution history, and/or prior art, which are the proper sources to determine the equitable scope of the claims. Id. Therefore, the court held that Apotex did not meet its burden of establishing a prima facie case of noninfringement under the reverse doctrine of equivalents. Id.

The district court also held that Apotex's invalidity and unenforceablity arguments, with the exception of obviousness, were prevented by issue preclusion because the invalidity of the '493 patent had already been asserted against Roche in the ANDA-1 litigation. Id. at 994-95. Following Ninth Circuit precedent, the court held that issue preclusion barred Apotex from challenging validity on any ground, even grounds that had not been raised in the first litigation. Id. at 995. With respect to the validity challenge on obviousness grounds, the court did not reach whether the Supreme Court decision in KSR constituted a change in law necessitating an exception to issue preclusion because it held that such a challenge was prevented by claim preclusion. Id. at 997.

With respect to claim preclusion, the district court held that the two accused products, ANDA-1 and ANDA-2, are "essentially the same," and thus each of the invalidity claims in the ANDA-2 litigation was prevented by claim preclusion. Id. at 997-99. The court further held that there is no "change of law" or fairness exception to claim preclusion to prevent its application despite the intervening KSR decision. Id. at 999-1000. Hence, the...