Dey, L.P. v. Sunovion Pharms., Inc.

• Decision Date: 20 May 2013
• Docket Number: No. 2012–1428.,2012–1428.
• Parties: DEY, L.P., Dey, Inc., and Mylan, Inc., Plaintiffs–Appellants, v. SUNOVION PHARMACEUTICALS, INC. (formerly known as Sepracor, Inc.), Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

715 F.3d 1351

DEY, L.P., Dey, Inc., and Mylan, Inc., Plaintiffs–Appellants,

v.SUNOVION PHARMACEUTICALS, INC. (formerly known as Sepracor, Inc.), Defendant–Appellee.

No. 2012–1428.

United States Court of Appeals,

Federal Circuit.

May 20, 2013.

Evan R. Chesler, Cravath, Swaine & Moore, LLP, of New York, NY, argued for plaintiffs-appellants. With him on the brief was Roger G. Brooks. Of counsel on the brief were Edgar H. Haug and Robert E. Colletti, Frommer, Lawrence & Haug, LLP, of New York, NY.

Joseph M. O'Malley, Jr., Paul Hastings, LLP, of New York, NY, argued for defendant-appellee. With him on the brief were Bruce M. Wexler and David M. Conca. Of counsel on the brief was Stephen B. Kinnaird of Washington, DC.

Before NEWMAN, BRYSON, and O'MALLEY, Circuit Judges.

Opinion for the court filed by Circuit Judge BRYSON.

Dissenting opinion filed by Circuit Judge NEWMAN.

BRYSON, Circuit Judge.

During the late 1990s and 2000s, Sunovion Pharmaceuticals, Inc., and the Dey plaintiffs (Dey, L.P.; Dey, Inc.; and Mylan, Inc.) were simultaneously developing pharmaceutical products to treat lung disease. Sunovion filed a patent application, followed by an application to test its productsin human subjects. It then received a patent and held clinical trials, all before ultimately releasing a commercial product. Dey likewise filed a series of patent applications, received several patents, ran human subject trials, and released a commercial product. Dey's patent applications were filed after Sunovion's, and its patents were issued after consideration of Sunovion's patent.

When Dey sued Sunovion for patent infringement, Sunovion argued, and the district court agreed, that some of Dey's patents were invalid because a Sunovion clinical trial in which Sunovion tested its own product constituted a prior public use of Dey's inventions within the meaning of 35 U.S.C. § 102(b).¹ In that respect, this case is unusual. To the extent the public use bar is raised in the context of clinical trials, it normally entails a party defending its own clinical trials against the charge that the trials constituted a public use of the same party's invention. Here, by contrast, Sunovion asserts that a drug formulation that was tested in its own clinical trial anticipated Dey's inventions and was accessible to the public, thus invalidating the later-issued Dey patents. Although the parties' dispute would seem to present a classic issue of priority, it comes to us as a public use dispute, not a priority contest, and we must apply public use principles to resolve it. Doing so, we conclude that Sunovion has not shown that it is entitled to summary judgment based on its assertion that its use of formulations meeting the limitations of Dey's later-issued patents constituted a public use of Dey's inventions within the meaning of section 102(b). We therefore reverse the grant of summary judgment for Sunovion.

I

Both parties own patents and sell products concerning the treatment of chronic obstructive pulmonary disease (“COPD”) by storing the compound formoterol in an aqueous solution and administering it through a nebulizer. Sunovion owns U.S. Patent No. 6,040,344 (the “Gao patent”), which issued in March 2000 from an application filed in 1998. Dey owns two families of patents, the second of which includes U.S. Patent Nos. 7,348,362; 7,462,645; 7,465,756; 7,473,710; and 7,541,385. The patents in the second Dey family all issued in 2008 or 2009 but claim the benefit of an application filed on July 10, 2003.² According to Dey, the significant difference between the two companies' patents relates to the stability of the formulations during long-term storage.

Sunovion ultimately produced a commercial product, known as Brovana, in 2007, but the path that led to the marketing of that drug was long. In February 1998, Sunovion filed an Investigational New Drug application with the FDA, seeking approval to conduct clinical trials with human subjects. Tests began shortly thereafter. One such test was Clinical Study Number 091–050 (“Study 50”), a Phase III trial that began in February 2002. The study, which was double-blind and randomized, tested three different dosages of formoterol known as Batches 3501A, 3501B, and 3501C. The parties have stipulated that the formulation of Batch 3501A is identical to the formulation that Sunovion ultimately marketed as Brovana. During a 12–week period in the middle of the study, the participants received treatments to take home and self-administer twice daily.

The participants in Study 50 were given some information about the study and were subjected to certain controls. They were told that the study concerned “the effects of (R,R)-formoterol, an experimental medication (not yet approved by the ... FDA) to treat COPD,” and that it would test three particular doses of (R,R)-formoterol (the three batches) as compared to a placebo and another drug.³ Participants were not provided any more specific information about the formulation of Batch 3501A. A Sunovion witness testified that the specific formulation of Brovana remained “[un]available to the public” and “confidential” even as of the time this action was brought.

The participants in the study signed a consent form stating that the medications “must be taken only by the person for whom it was intended” and that subjects would have to keep usage logs and return unused medications. The form also noted that participants “may wish to discuss this study ... with [their] regular doctor[s]” and allowed them to “request that the person who is in charge of this study speak directly with [their] doctor[s].” The participants were not prohibited from speaking with others about the study.

The test administrators were also subject to detailed restrictions. They had to sign a formal “Clinical Investigator Confidentiality Agreement” directing them to hold all proprietary information in confidence for five years. They were forbidden from disclosing the study protocols or dispensing the drug to any person who was not a trial subject, and they were held accountable for securely storing the drug and maintaining records of its disposition and use. Like the trial subjects, the investigators were instructed that unused supplies of the drug were to be returned upon completion or termination of the study.

A total of 587 subjects participated in the study. Of those, 124 received Batch 3501A. At least some of those individuals received Batch 3501A prior to July 10, 2002—one year before Dey filed the patent application that led to its second family of patents. Thousands of vials containing Batch 3501A were distributed during the trial; the study records indicate that a fraction of one percent of those vials were lost and not returned. The subjects who misplaced the vials were given replacements and were allowed to continue with the tests. The study concluded in June 2003.

In March 2007, shortly before Brovana was set to launch, Dey brought suit charging Sunovion with infringement of its first and second families of patents. Sunovion moved for partial summary judgment, and the district court granted the motion. Sunovion conceded for purposes of its motion that “the Batch 3501A composition [fell] within the asserted claims stemming from Dey's second family of patents.” That meant that the composition would anticipate Dey's asserted claims if it was in “public use,” as that term has been interpreted under 35 U.S.C. § 102(b). The district court concluded that Sunovion's clinical trial of Batch 3501A did constitute a “public use” of Dey's inventions, and, accordingly, held the asserted claims of Dey's second family of patents invalid. Dey appeals.

II

A

An applicant may not receive a patent for an invention that was “in public use ... in this country, more than one year prior to the date of the application for patent in the United States.” 35 U.S.C. § 102(b) (2006). To decide whether a prior use constitutes an invalidating “public use,” we ask “whether the purported use: (1) was accessible to the public; or (2) was commercially exploited.” Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380 (Fed.Cir.2005).

Our cases have provided considerable guidance as to what it means to be “accessible to the public.” We have explained that the policies underlying the public use bar inform its scope and that one such policy is “discouraging the removal, from the public domain, of inventions that the public reasonably has come to believe are freely available.” Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192, 1198 (Fed.Cir.1994). In addition, we have set forth factors that may be helpful in analyzing the question of public use, including “ ‘the nature of the activity that occurred in public; the public access to and knowledge of the public use; [and] whether there was any confidentiality obligation imposed on persons who observed the use.’ ” Bernhardt, L.L.C. v. Collezione Europa USA, Inc., 386 F.3d 1371, 1379 (Fed.Cir.2004). And we have said that a public use may occur when “a completed invention is used in public, without restriction.” Allied Colloids Inc. v. Am. Cyanamid Co., 64 F.3d 1570, 1574 (Fed.Cir.1995). Such formulations are designed to capture the commonsense notion that whether an invention is “accessible to the public” or “reasonably ... believe[d] [to be] freely available” depends, at least in part, on the degree of confidentiality surrounding its use: “[A]n agreement of confidentiality, or circumstances creating a similar expectation of secrecy, may negate a ‘public use’ where there is not commercial exploitation.” Invitrogen, 424 F.3d at 1382.

The same is true when an unaffiliated third party is responsible for the allegedly public use. Although prior uses are often carried out by or at the direction of the inventor-patentee, we have held that “third party prior use accessible to the public is a section 102(b) bar.” Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1334 (Fed.Cir.2005). But...