Eisai Co. Ltd. v. Dr. Reddy's Laboratories, Ltd.

• Citation: 533 F.3d 1353
• Decision Date: 21 July 2008
• Docket Number: No. 2007-1397.,No. 2007-1398.,2007-1397.,2007-1398.
• Parties: EISAI CO. LTD. and Eisai, Inc., Plaintiffs-Appellees, v. DR. REDDY'S LABORATORIES, LTD. and Dr. Reddy's Laboratories, Inc., Defendants-Appellants, and Teva Pharmaceuticals USA, Inc., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

533 F.3d 1353

EISAI CO. LTD. and Eisai, Inc., Plaintiffs-Appellees, v. DR. REDDY'S LABORATORIES, LTD. and Dr. Reddy's Laboratories, Inc., Defendants-Appellants, and Teva Pharmaceuticals USA, Inc., Defendant-Appellant.

No. 2007-1397.

No. 2007-1398.

United States Court of Appeals, Federal Circuit.

July 21, 2008.

Joseph M. O'Malley, Jr., Paul, Hastings, Janofsky & Walker, LLP, of New York, New York, argued for plaintiffs-appellees. With him on the brief were Bruce M. Wexler, David M. Conca, Gary G. Ji, and Quinn E. Clancy.

Maurice N. Ross, Budd Larner, P.C., of Short Hills, New Jersey, argued for defendants-appellants Dr. Reddy's Laboratories, Ltd., and Dr. Reddy's Laboratories, Inc. With him on the brief were Andrew J. Miller, Louis H. Weinstein, Ellen T. Lowenthal, and Dmitry V. Sheluho.

Henry C. Dinger, Goodwin Procter LLP, of Boston, Massachusetts, argued for defendant-appellant Teva Pharmaceuticals USA, Inc. With him on the brief were Elaine H. Blais, and David M. Hashmall, Frederick H. Rein, and Emily L. Rapalino, of New York, New York.

Before RADER, LINN, and PROST, Circuit Judges.

RADER, Circuit Judge.

On summary judgment, the United States District Court for the Southern District of New York found in favor of plaintiffs Eisai Co., Ltd. and Eisai, Inc. (collectively Eisai) with respect to the validity and enforceability of U.S. Patent No. 5,045,552 ('552 patent). Eisai Co. v. Teva Pharms. USA, Inc., 472 F.Supp.2d 493 (S.D.N.Y.2006) (SJ Validity Order); Eisai Co. v. Dr. Reddy's Labs., Ltd., No. 03 Civ. 9053 (S.D.N.Y. Oct. 5, 2006) (SJ Enforceability Order). After a bench trial, the district court found that Dr. Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc. (collectively Dr. Reddy's) and Teva Pharmaceuticals USA, Inc. (Teva) had failed to prove the remaining allegations of inequitable conduct, and that Eisai had established that Dr. Reddy's and Teva infringed Eisai's '552 patent. Eisai Co. v. Dr. Reddy's Labs., Ltd., No. 03 Civ. 9053, 2007 WL 1406565 (S.D.N.Y. May 11, 2007) (Trial Order). Because the district court correctly determined that the '552 patent is non-obvious over the proffered prior art and that Eisai's alleged acts during prosecution did not rise to the level of inequitable conduct, this court affirms.

I

The '552 patent claims rabeprazole and its salts. Rabeprazole is part of a class of drugs known as proton pump inhibitors, which suppress gastric acid production by inhibiting action of the enzyme H + K + AT-Pase. The distinctions between rabeprazole and its salts are not relevant for this appeal. Therefore this court refers to rabeprazole and its salts collectively as "rabeprazole." Rabeprazole's sodium salt is the active ingredient in Aciphex, a pharmaceutical approved in 1991 by the FDA for the treatment of duodenal ulcers, heartburn, and associated disorders. Aciphex has been a commercial success, garnering over $1 billion in worldwide yearly sales.

Dr. Reddy's and Teva each filed Abbreviated New Drug Applications (ANDAs) under the Hatch-Waxman Act, 21 U.S.C. § 355 and 35 U.S.C. § 271(e), seeking to manufacture a generic version of Aciphex before the expiration of the '552 patent. Because filing an ANDA is an artificial, but legally cognizable, act of patent infringement, see Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1344 (2004), Eisai filed suit against Dr. Reddy's and Teva. Eisai also sued Mylan Laboratories Inc. and Mylan Pharmaceuticals Inc. (collectively Mylan), another ANDA filer, but that proceeding was stayed pending the outcome of these actions. Mylan agreed to be bound by the final judgments and any appeals in these cases. Eisai Co., Ltd. v. Mylan Labs., Inc., No. 04 Civ. 656 (S.D.N.Y. Nov. 3, 2004). Both Dr. Reddy's and Teva conceded infringement of claims 1-6 of the '552 patent, but asserted that the '552 patent is unenforceable for inequitable conduct. Trial Order at 6-7. Dr. Reddy's stipulated to the validity of all six of the '552 patent's claims, id. at 6, but Teva argued before the district court and maintains on appeal that the '552 patent is invalid for obviousness. Both Dr. Reddy's and Teva appeal the trial court's judgments of enforceability. Neither Dr. Reddy's nor Teva appeals the trial court's judgment of infringement. This court has jurisdiction under 28 U.S.C. § 1295(a)(1).

II

This court reviews a grant of summary judgment without deference. Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1362 (Fed.Cir.2003). Obviousness under 35 U.S.C. § 103(a) is ultimately a legal question, based on underlying factual determinations. See Richardson-Vicks Inc. v. Upjohn Co., 122 F.3d 1476, 1479 (Fed.Cir.1997). The factual determinations underpinning the legal conclusion of obviousness include 1) the scope and content of the prior art, 2) the level of ordinary skill in the art, 3) the differences between the claimed invention and the prior art, and 4) evidence of secondary factors, also known as objective indicia of non-obviousness. Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Thus, in reviewing a district court's summary judgment of nonobviousness, this court reviews the record for genuine issues of material fact without deference, bearing in mind the movant's burden to prove invalidity by clear and convincing evidence. See Monarch Knitting Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d 877, 881 (Fed.Cir.1998).

Where, as here, the patent at issue claims a chemical compound, the analysis of the third Graham factor (the differences between the claimed invention and the prior art) often turns on the structural similarities and differences between the claimed compound and the prior art compounds. See Eli Lilly & Co. v. Zenith Goldline Pharms., Inc., 471 F.3d 1369, 1377 (Fed.Cir.2006) (noting that, for a chemical compound, a prima facie case of obviousness requires "structural similarity between claimed and prior art subject matter ... where the prior art gives reason or motivation to make the claimed compositions" (quoting In re Dillon, 919 F.2d 688, 692 (Fed.Cir.1990) (en banc))). Obviousness based on structural similarity thus can be proved by identification of some motivation that would have led one of ordinary skill in the art to select and then modify a known compound (i.e. a lead compound) in a particular way to achieve the claimed compound. See Takeda Chem. Indus. v. Alphapharm Pty., Ltd., 492 F.3d 1350, 1356 (Fed.Cir.2007). In keeping with the flexible nature of the obviousness inquiry, KSR Int'l Co. v. Teleflex Inc., ___ U.S. ___, 127 S.Ct. 1727, 1739, 167 L.Ed.2d 705 (2007), the requisite motivation can come from any number of sources and need not necessarily be explicit in the art. See Aventis Pharma Deutschland GmbH v. Lupin, Ltd., 499 F.3d 1293, 1301 (Fed.Cir.2007). Rather "it is sufficient to show that the claimed and prior art compounds possess a `sufficiently close relationship ... to create an expectation,' in light of the totality of the prior art, that the new compound will have `similar properties' to the old." Id. (quoting Dillon, 919 F.2d at 692).

Teva asserts that a combination of three prior art references renders the '552 patent obvious: 1) European Patent No. 174,726 (owned by Takeda), claiming lansoprazole (EP '726); 2) United States Patent No. 4,255,431 (to Junggren), claiming omeprazole ('431 patent); and 3) an article by Brändström, et al., entitled "Structure Activity Relationships of Substituted Benzimidazoles" (Brändström). EP '726 teaches, inter alia, the ulcer treatment compound lansoprazole. Lansoprazole differs structurally from rabeprazole at the 4-position on the pyridine ring, as indicated in the diagram below. Lansoprazole has a trifluoroethoxy (OCH₂CF₃) substituent, whereas rabeprazole has a methoxypropoxy (OCH₂CH₂CH₂OCH₃) substituent.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Appellant Teva's Br. at 28. Otherwise, the two compounds are identical. See SJ Validity Order at 7. Both rabeprazole and lansoprazole are "asymmetrically substituted" with respect to the 4-position on the pyridine ring because the substituent at the 3-position (a methyl group in both compounds) is not the same as the substituent at the 5-position (a hydrogen in both compounds).

The '431 patent discloses a broad class of gastric acid inhibiting compounds, including omeprazole, the first commercial proton pump inhibitor, sold as Prilosec. Although sharing the same basic structure, omeprazole is structurally farther afield from rabeprazole than is lansoprazole. For instance, omeprazole's pyridine ring is symmetrically substituted and has a methoxy (OCH3) group at the 4-position.

Finally, Brändström describes a class of anti-ulcerative compounds having a benzimidazole-sulfinylmethyl-pyridine core (the Brändström core structure):

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Rabeprazole, lansoprazole, and omeprazole are all Brändström core structure compounds. Taking the evidence in the light most favorable to Teva, this court assumes that as per EP '726, lansoprazole is twenty times superior to omeprazole for anti-ulcer action, as measured by an indomethacin-induced gastric lesion assay in rats. This court also assumes that lansoprazole has certain traits, including lipophilicity (the ability of a compound to cross lipid membranes) and low molecular weight, that would have made it desirable to a skilled artisan.

Under these assumptions, one of skill in this art may have considered it a candidate for a lead compound in the search for anti-ulcer compounds. To the contrary, the district court emphasized the differences between anti-ulcer action and gastric acid inhibition. The trial court specifically noted that Teva's expert testified with respect to the EP '726 data that "[t]he level of acid secretion ... from these [anti-ulcer] data ... cannot be determined." SJ Validity Order at 13. In this context, this court consults the counsel of K...