Bayer Ag v. Schein Pharmaceuticals, Inc.

• Decision Date: 09 August 2002
• Docket Number: No. 01-1286.,No. 01-1287.,01-1286.,01-1287.
• Citation: 301 F.3d 1306
• Parties: BAYER AG and Bayer Corporation, Plaintiffs/Counterclaim Defendants-Appellees, v. SCHEIN PHARMACEUTICALS, INC., Danbury Pharmacal, Inc., and Reddy-Cheminor, Inc., Defendants/Counterclaimants-Appellants, and Mylan Pharmaceuticals, Inc., and Mylan Laboratories Inc., Defendants/Counterclaimants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

301 F.3d 1306

BAYER AG and Bayer Corporation, Plaintiffs/Counterclaim Defendants-Appellees, v. SCHEIN PHARMACEUTICALS, INC., Danbury Pharmacal, Inc., and Reddy-Cheminor, Inc., Defendants/Counterclaimants-Appellants, and Mylan Pharmaceuticals, Inc., and Mylan Laboratories Inc., Defendants/Counterclaimants-Appellants.

No. 01-1286.

No. 01-1287.

United States Court of Appeals, Federal Circuit.

August 9, 2002.

Rehearing and Rehearing En Banc Denied October 18, 2002.

COPYRIGHT MATERIAL OMITTED

Fred H. Bartlit, Jr., Bartlit Beck Herman Palenchar & Scott, of Chicago, IL, argued for plaintiffs/counterclaim defendants-appellees. With him on the brief were Mark L. Levine and Sean W. Gallagher. Of counsel on the brief were Charles W. Bradley and Stanley L. Amberg, Orrick, Herrington & Sutcliffe LLP, of New York, NY.

E. Anthony Figg, Rothwell, Figg, Ernst & Manbeck P.C., of Washington, DC, argued for defendants/counterclaimants-appellants. With him on the brief for Mylan Pharmaceuticals, Inc., et al., were Glenn E. Karta and Elizabeth A. Leff. On the brief for Schein Pharmaceuticals, Inc., et al., were Andrew J. Miller, Brian T. Moriarty, and Bruce D. Radin, Budd, Larner, Gross, Rosenbaum, Greenberg & Sade, of Short Hills, NJ.

Before CLEVENGER, RADER and DYK, Circuit Judges.

Opinion for the court filed by Circuit Judge CLEVENGER. Concurring opinion filed by Circuit Judge RADER.

CLEVENGER, Circuit Judge.

In these four consolidated patent infringement suits,¹ Bayer AG and Bayer Corporation (collectively, "Bayer") sued Schein Pharmaceutical, Inc., Danbury Pharmacal, Inc., Reddy-Cheminor, Inc., Mylan Pharmaceuticals, Inc., and Mylan Laboratories Inc. (collectively, "Schein") for infringement of U.S. Patent No. 4,670,444 and Reexamination Certificate B1 4,670,444 (collectively, the "'444 patent"), directed towards a class of chemical compounds that includes the broad-spectrum antibiotic ciprofloxacin, better known as Cipro. Schein raised an affirmative defense of invalidity under 35 U.S.C. § 102(d). On cross-motions for summary judgment, the district court held that the '444 patent was entitled to the filing date of its U.S. parent, Application No. 292,560 (the "'560 application") and thus was not invalid under section 102(d), and therefore the court granted Bayer's motion for summary judgment on validity. Bayer AG v. Schein Pharm., Inc., 129 F.Supp.2d 705, 725 (D.N.J.2001).

On appeal, Schein argues that the '444 patent cannot claim the benefit of the parent application because the parent is invalid for failure to satisfy the best mode requirement of 35 U.S.C. § 112. Because we find that the '444 patent is entitled to the filing date of the '560 application under 35 U.S.C. § 120, we affirm.

I BACKGROUND

Ciprofloxacin is a relatively simple heterocyclic organic compound developed by Bayer in the 1980s and shown in the figure below, where R^a is hydrogen.

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During the 1970s a group of scientists at Bayer experimented with a group of similar antibiotics, and they discovered that substitution of a cyclopropyl group² at the 1-position, i.e., on the nitrogen of the heterocycle ring, greatly increased the potency of the resulting antibiotic. In the fall of 1980, Dr. Klaus Grohe, one of the Bayer scientists, attended a conference at which a Japanese firm disclosed the structure of norfloxacin, a broad-spectrum antibiotic that it had developed. The structure of norfloxacin is identical to that depicted in the figure above for ciprofloxacin, except that norfloxacin has an ethyl rather than a cyclopropyl group on the ring nitrogen. From his earlier research, Dr. Grohe knew that substituting a cyclopropyl group for the ethyl group of norfloxacin would increase antibiotic activity, and he hastened home from the conference determined to make such a compound.

The general synthetic route to Dr. Grohe's desired compound involves construction of the bicyclic ring structure followed by addition of the amino group to provide the final product. An example of the final step—addition of an amine to the previously—constructed bicyclic ring to give the desired antibiotic and a byproduct — is depicted in the figure below. Using generic terms for the types of chemical compounds involved, the final reaction step can be described as follows: starting bicyclic + amine = final product.

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Although Dr. Grohe succeeded in making numerous compounds similar in structure to ciprofloxacin, his standard synthetic methodology failed when he attempted to make ciprofloxacin. The problematic part of the synthesis was the construction of the starting bicyclic, 6-fluoroquinolinic acid ("6-FQA"). Dr. Grohe's standard method of making the starting bicyclics used a "cycloaracyclation" reaction that he had previously developed and had disclosed in a published patent application. However, in the case of ciprofloxacin, Dr. Grohe could not make the starting material he needed for the cycloaracyclation reaction. Therefore, he enlisted the help of one of his colleagues at Bayer, Dr. Klauke, who successfully synthesized the precursor 2,4-dichloro-5-fluorobenzoyl chloride, the so-called "Klauke compound," necessary to make 6-FQA via cycloaracyclation. Bayer AG, 129 F.Supp.2d at 710. While Dr. Grohe concededly had difficulty making the Klauke compound without assistance, it is undisputed that a person of skill in the art could readily obtain the Klauke compound by using commercially-available starting materials and known synthetic methods retrieved through a routine search of the chemical literature.

Using the Klauke compound, Dr. Grohe performed the cycloaracyclation reaction to obtain 6-FQA, which he then converted to ciprofloxacin. The overall reaction sequence Dr. Grohe used to make ciprofloxacin can be regarded as containing three primary steps: (1) synthesis of the Klauke compound; (2) synthesis of 6-FQA via cycloaracyclation of the Klauke compound; and (3) addition of piperazine to 6-FQA to synthesize ciprofloxacin.

Bayer ultimately obtained patents on both the Klauke compound, U.S. Patent No. 4,439,620, and 6-FQA, U.S. Patent No. 4,620,007. It also, of course, sought and obtained a patent on the target compound itself, ciprofloxacin: the '444 patent. The '444 patent claims, as compositions of matter, a class of compounds that includes ciprofloxacin. The parties have stipulated that only claims 1-2, 5, 11-12, 16, 18-21, 25, 27, 29-32, 34, and 36-39 of the '444 patent cover ciprofloxacin.

The application that matured into the '444 patent was not the first filed patent claiming ciprofloxacin; seven other applications preceded it. Bayer filed the first patent application arguably claiming ciprofloxacin in Germany on September 3, 1980. However, that application is not relevant here, because Bayer has stipulated that it does not claim entitlement to its filing date. Thus, for purposes of this appeal, Bayer filed the first relevant patent application in Chile on August 12, 1981. The next day, August 13, 1981, it filed the '560 application in the United States, followed swiftly by applications in South Africa (September 2, 1981), Spain (September 2, 1981), and Argentina (September 3, 1981). It filed a second German application on October 29, 1981. The Chilean, South African, Spanish, and Argentinean patents issued between May and September of 1982. On October 22, 1982, after the issuance of the four foreign patents, Bayer filed a second U.S. application, Application No. 436,112 (the "'112 application"), as a continuation of the '560 application, and then abandoned the '560 application. Bayer filed U.S. application No. 614,923 (the "'923 application") on May 29, 1984, as a continuation-in-part of the '112 application, and then abandoned the '112 application. The '923 application eventually matured into the '444 patent, which issued on June 2, 1987. The parties agree that under 35 U.S.C. § 120, the '444 patent is entitled, at a minimum, to the benefit of the filing date of the '112 application.

The defendants in this case filed Abbreviated New Drug Applications ("ANDAs") with the Food and Drug Administration (FDA) under 21 U.S.C. § 355(j) seeking approval to market generic versions of ciprofloxacin. Bayer AG, 129 F.Supp.2d at 707. Bayer sued under 35 U.S.C. § 271(e)(2), alleging that filing the ANDAs infringed the '444 patent, and this suit stayed the ANDAs before the FDA. Id. On cross-motions for summary judgment, Schein conceded infringement but argued that the '444 patent is invalid based on the filing and issuance of the Chilean, South African, Spanish and Argentinean patents, because under 35 U.S.C. § 102(d) those foreign patents are prior art that would invalidate the '444 patent. Id. Bayer countered that the '444 patent is entitled to a filing date of August 13, 1981, the filing date of the '560 application, or, in the alternative, that under 35 U.S.C. § 119, it should be entitled to the filing date of the second German application, October 29, 1981. Id. Schein argued that Bayer cannot rely on the '560 application because, in its view, that application does not disclose Dr. Grohe's best mode of making ciprofloxacin as required by section 112. Schein also contended that section 119 should not apply as a matter of law to defeat a section 102(d) bar, and that Bayer was collaterally estopped from arguing the section 119 issue by its failure to appeal an earlier district court decision entering judgment against Bayer on the merits of the section 119 issue.

The district court granted Bayer's motion for summary judgment, holding that the '560 application satisfies the best mode requirement. Id. at 724. After setting forth the two-pronged test for whether a disclosure satisfies the best mode requirement, the court proceeded to analyze the first prong, i.e., whether Dr. Grohe subjectively possessed a preferred mode of practicing his...