In re Omeprazole Patent Litigation

• Decision Date: 20 August 2008
• Docket Number: No. 2007-1459.,No. 2007-1414.,No. 2007-1458.,No. 2007-1416.,2007-1414.,2007-1416.,2007-1458.,2007-1459.
• Parties: In re OMEPRAZOLE PATENT LITIGATION Astrazeneca AB, Aktiebolaget Hassle, KBI-E, Inc., KBI, Inc., and Astrazeneca LP, Plaintiffs-Appellees, v. Apotex Corp., Apotex, Inc., and Torpharm, Inc., Defendants-Appellants, and Impax Laboratories, Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

536 F.3d 1361

In re OMEPRAZOLE PATENT LITIGATION

Astrazeneca AB, Aktiebolaget Hassle, KBI-E, Inc., KBI, Inc., and Astrazeneca LP, Plaintiffs-Appellees, v. Apotex Corp., Apotex, Inc., and Torpharm, Inc., Defendants-Appellants, and Impax Laboratories, Inc., Defendant-Appellant.

No. 2007-1414.

No. 2007-1416.

No. 2007-1458.

No. 2007-1459.

United States Court of Appeals, Federal Circuit.

August 20, 2008.

Errol B. Taylor, Milbank, Tweed, Hadley & McCloy, LLP, of New York, NY, argued for plaintiffs-appellees. Of counsel were Fredrick M. Zullow, John M. Griem, Jr., Lawrence T. Kass, David C. Haber, Claire A. Gilmartin, and Emily J. Kunz.

Robert B. Breisblatt, Katten Muchin Rosenmann LLP, of Chicago, IL, argued for defendants-appellants Apotex Corp., et al. With him on the brief were Robert S. Silver, Bruce J. Chasan, Allan H. Fried, William C. Youngblood, and Marc B. Bassler, Caesar, Rivise, Bernstein, Cohen & Pokotilow, Ltd., of Philadelphia, PA.

Jeffrey J. Toney, Sutherland Asbill & Brennan LLP, of Atlanta, GA, argued for defendant-appellant Impax Laboratories, Inc. With him on the brief were John L. North, N.E.B. Minnear, Jackie L. Toney, and Kristin M. Timm, of Atlanta, GA, and Blair M. Jacobs, of Washington, DC. Of counsel was Leslie S. Thomasson.

Before LOURIE, BRYSON, and GAJARSA, Circuit Judges.

BRYSON, Circuit Judge.

Apotex Corp., Apotex, Inc., and Torpharm, Inc., (collectively, "Apotex") and Impax Laboratories, Inc., appeal judgments entered against them by the United States District Court for the Southern District of New York. Apotex and Impax were defendants in a multidistrict litigation initiated by plaintiffs Astrazeneca AB, Aktiebolaget Hassle, KBI-E, Inc., KBI, Inc., and Astrazeneca LP (collectively, "Astra") against a number of generic drug manufacturers for infringement of Astra's patents covering formulations of omeprazole, the active ingredient in Prilosec, a drug designed to treat acid-related gastrointestinal disorders. The district court divided the defendants into two separate "waves" for purposes of trial. For each wave, the district court held a consolidated bench trial.

We decided appeals from the "first wave" litigation in In re Omeprazole Patent Litigation, 84 Fed.Appx. 76 (Fed.Cir. 2003), and In re Omeprazole Patent Litigation, 483 F.3d 1364 (Fed.Cir.2007). The present appeals arise from the "second wave" litigation. In the second wave cases, the district court entered judgment of noninfringement with respect to Mylan Laboratories, Inc., and judgments of infringement against Apotex and Impax. Astra appealed the judgment of noninfringement in the Mylan case, and we recently affirmed that judgment in In re Omeprazole Patent Litigation, 2008 WL 2369864 (Fed.Cir. June 10, 2008). In this consolidated appeal, Apotex and Impax challenge the district court's judgments of infringement against each of them. Because we find no error in the district court's decision, we affirm.

I

The patents involved in this appeal are U.S. Patent No. 4,786,505 ("the '505 patent") and U.S. Patent No. 4,853,230 ("the '230 patent"). The two patents relate to pharmaceutical preparations containing omeprazole, the active ingredient in Prilosec. Omeprazole is a potent inhibitor of gastric acid secretion, but it is susceptible to degradation in acid-reacting and neutral media. Its stability is also affected by moisture and organic solvents. To protect omeprazole from gastric acid in the stomach, a pharmaceutical dosage can include an enteric coating that covers the drug core. Enteric coatings, however, contain acidic compounds, which can cause the omeprazole in the drug core to decompose while the dosage is in storage, resulting in discoloration and decreasing omeprazole content in the dosage over time. To increase the storage stability of a pharmaceutical dosage, alkaline reacting compounds ("ARCs") may be added to the drug core. The addition of an ARC, however, can compromise the enteric coating. A conventional enteric coating allows for some diffusion of water from gastric juices into the drug core, but water entering the drug core will dissolve the ARCs, which can in turn cause the enteric coating to dissolve. '505 patent, col. 1, line 33, to col. 2, line 4.

The inventors of the '505 and '230 patents solved that problem by adding an inert subcoating that rapidly disintegrates in water. The subcoating increases storage stability and provides sufficient gastric acid resistance to prevent omeprazole from degrading in the stomach. Once the dosage reaches the small intestine, the solubility of the subcoating allows for rapid release of the omeprazole in the drug core. '505 patent, col. 5, ll. 19-68.

The '505 patent covers a pharmaceutical preparation containing omeprazole. Claim 1 recites:

An oral pharmaceutical preparation comprising

(a) a core region comprising an effective amount of a material selected from the group consisting of omeprazole plus an alkaline reacting compound, an alkaline omeprazole salt plus an alkaline reacting compound and an alkaline omeprazole salt alone;

(b) an inert subcoating which is soluble or rapidly disintegrating in water disposed on said core region, said subcoating comprising one or more layers of materials selected from among tablet excipients and polymeric film-forming compounds; and

(c) an outer layer disposed on said subcoating comprising an enteric coating.

The '230 patent more broadly covers a preparation containing an "acid-labile pharmaceutically active substance." Claim 1 of the '230 patent recites:

A pharmaceutical preparation comprising:

(a) an alkaline reacting core comprising an acid-labile pharmaceutically active substance and an alkaline reacting compound different from said active substance, an alkaline salt of an acid labile pharmaceutically active substance, or an alkaline salt of an acid labile pharmaceutically active substance and an alkaline reacting compound different from said active substance;

(b) an inert subcoating which rapidly dissolves or disintegrates in water disposed on said core region, said subcoating comprising one or more layers comprising materials selected from the group consisting of tablet excipients, film-forming compounds and alkaline compounds; and

(c) an enteric coating layer surrounding said subcoating layer, wherein the subcoating layer isolates the alkaline reacting core from the enteric coating layer such that the stability of the preparation is enhanced.

II

On December 31, 1999, Impax sought approval from the Food and Drug Administration ("FDA") to sell 10- and 20-mg generic versions of Prilosec. In response, Astra filed suit for infringement of the '505 and '230 patents under 35 U.S.C. § 271(e)(2)(A). Astra filed a second action against Impax after Impax amended its application to include a 40-mg product. In September 2004, the FDA granted Impax final approval to market its 10- and 20-mg omeprazole products. Impax began marketing its approved products, which prompted Astra to amend its complaint to include claims for damages under 35 U.S.C. § 271(a)-(c). Impax filed an answer to Astra's second amended complaint in which it asserted counterclaims for fraud and sham litigation, for a declaration of unenforceability as to the two patents, and for declarations of noninfringement and invalidity as to all the claims of both patents. Impax demanded a jury trial for all of its counterclaims and for Astra's claims of infringement.

At that time, Astra's claims for damages and willful infringement had been severed and stayed pending the resolution of the liability issues in the case. Astra and Impax had also agreed in 2003 to sever and stay Impax's antitrust counterclaims. At a hearing on December 1, 2005, Astra asked the court to sever its claims of infringement under section 271(a)-(c) from its claims under section 271(e), for which it did not seek damages, so that the district court could consolidate its claims against Impax under section 271(e) in a bench trial with the other defendants. The district court requested briefing on whether Impax was entitled to a jury trial. In response, Astra stipulated that it would agree to dismiss its demand for damages against Impax with prejudice if the district court heard its claims against Impax in the consolidated bench trial. Based on that stipulation, the court denied Impax's demand for a jury trial and consolidated the section 271(e) claims against Impax with the claims against the other defendants.

The district court then held a 42-day bench trial. Following the trial and before the court issued its decision, the patents both expired. Impax filed a motion to dismiss Astra's claims against it as moot because Astra had dismissed its claims for damages against Impax. The district court denied that motion, however, because the FDA had granted Astra a six-month period of market exclusivity following the expiration of the '505 and '230 patents. On May 31, 2007, the district court issued its decision, holding that Astra's patents were valid, enforceable, and infringed by Impax. The court therefore set the effective date of Impax's ANDA to October 20, 2007, the end of Astra's six-month period of market exclusivity.

On appeal, Impax argues that the district court erred in denying its demand for a jury trial and in denying its motion to dismiss Astra's claims as moot. It also challenges the sufficiency of the evidence of infringement, and it further claims that the district court committed clear error by not finding the claims of the two patents invalid under the public-use bar of 35 U.S.C. § 102(b).

A

We first address Impax's argument that the district court lost jurisdiction over the case after the patents expired on April 20, 2007. Impax argues that on that date the case became moot because Astra, having already dismissed its claims for damages, had no remaining claim for any possible relief to which it might be legally entitled. The district court rejected that argument because...