Eli Lilly and Co. v. Aradigm Corp.

• Citation: 376 F.3d 1352
• Decision Date: 20 July 2004
• Docket Number: No. 03-1336.,No. 03-1337.,03-1336.,03-1337.
• Parties: ELI LILLY AND COMPANY, Plaintiff-Appellant, v. ARADIGM CORPORATION, Defendant-Cross Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

376 F.3d 1352

ELI LILLY AND COMPANY, Plaintiff-Appellant, v. ARADIGM CORPORATION, Defendant-Cross Appellant.

No. 03-1336.

No. 03-1337.

United States Court of Appeals, Federal Circuit.

Decided: July 20, 2004.

Appeal from the United States District Court for the Southern District of Indiana, Richard L. Young, J.

COPYRIGHT MATERIAL OMITTED

Donald E. Knebel, Barnes & Thornburg, of Indianapolis, IN, argued for plaintiff-appellant. With him on the brief were Todd G. Vare and Erin Roth Bohannon.

Gregory A. Castanias, Jones Day, of Washington, DC, argued for defendant-cross appellant. With him on the brief were Tharan Gregory Lanier of Menlo Park, CA, and Todd Geremia of New York, NY.

Before LOURIE, CLEVENGER, and GAJARSA, Circuit Judges.

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

CLEVENGER, Circuit Judge.

Eli Lilly and Company ("Lilly") sued Aradigm Corporation ("Aradigm") seeking, inter alia, to have two of its scientists recognized as joint inventors on Aradigm's U.S. Patent No. 5,888,477 ("the '477 patent"). Based on a jury verdict, the United States District Court for the Southern District of Indiana entered final judgment in favor of Lilly insofar as it ordered the Patent and Trademark Office to add one of Lilly's scientists, Dr. DiMarchi, as an inventor. Eli Lilly & Co. v. Aradigm Corp., No. IP 98-828-C-Y/F (S.D.Ind. Mar. 5, 2003). On the inventorship issue, Aradigm cross appeals and we reverse.

In the same district court proceedings, Lilly also sought to recover damages based on contract and unjust enrichment causes of action. The district court entered final judgment in favor of Aradigm on the unjust enrichment claim and in favor of Lilly on the contract claim, but it awarded only nominal contract damages to Lilly. Id. Lilly appeals the district court's judgment on these state law claims, and we affirm.

I

Lilly is a pharmaceutical company. In May 1996, U.S. Patent No. 5,514,646 ("the '646 patent") issued to Lilly. It claims among other inventions the insulin analog "lispro" (now commercially marketed by Lilly as Humalog (R)), and it lists Dr. DiMarchi as an inventor. Traditionally, regular, or natural, insulin is administered by subcutaneous injection, i.e., via a needle that deposits the insulin under the skin, to help diabetics regulate their blood glucose levels. When regular insulin molecules are in aqueous solution in the syringe, they self-associate into a stable hexamer, or six-molecule cluster. It is believed that the approximately thirty-minute delay between the insulin's injection and the onset of its therapeutic effect can be traced to the time required for the hexamer delivered under the skin to disassociate into unclustered monomers and to diffuse away from the injection site and into the blood stream.

Lispro is a modified version of regular insulin. Like all proteins, insulin is a molecule made up of linear sequences of amino acids strung together in chains. Lispro is comprised of chains of amino acids identical to those in regular insulin except that two amino acids at one point in one of the chains are reversed in order. According to the '646 patent, this slight structural alteration makes lispro "less prone to ... self-association" than regular insulin and endows lispro with "a comparatively more rapid onset of activity," while at the same time enabling lispro to "retain[ ] the biological activity of [regular] insulin." '646 patent, col. 1, ll. 17-20. In other words, "[a]lthough [lispro] exists in solution as a hexamer, it very rapidly disassociates into a virtually entirely monomeric form following subcutaneous administration ... [permitting it to be] absorbed quantitatively faster than [regular] insulin after subcutaneous administration." '477 patent, col. 12, ll. 14-19.

Aradigm's business focuses on drug delivery through the inhalation of aerosols. In January 1997, a number of Aradigm scientists filed a patent application that, in March 1999, issued as the '477 patent. Titled "Use of Monomeric Insulin as a Means for Improving the Bioavailability of Inhaled Insulin," Aradigm's '477 patent claims methods of aerosolized administration of lispro, among other monomeric insulin analogs, in which the lispro "quickly enters the circulatory system after being inhaled into the lung." Id. at col. 3, ll. 9-10. One difficulty with administering regular insulin in aerosolized form is believed to be that inhaled insulin "is sequestered in the lung to a significant degree" and therefore does not rapidly or predictably enter the bloodstream where insulin must be located to have its therapeutic effect. Id. at col. 13, l. 8. When filing the '477 patent, Aradigm believed that inhalation of lispro instead of regular insulin would reduce the tendency of insulin to remain in the lungs because, "as with subcutaneous delivery, the disassociation of insulin from hexameric to monomeric form is an important first step prior to the absorption of insulin into the blood stream," and because lispro dissociates more rapidly than regular insulin does. Id. at col. 13, ll. 15-18.

As relevant to this appeal, the '477 patent contains the following method claims:

5. A method of improving the bioavailability of insulin delivered via the lung, comprising:

aerosolizing a formulation of an insulin analog which analog rapidly disassociates into monomeric form;

inhaling the aerosolized formulation of the insulin analog into the lungs in a manner which allows the particles of the insulin analog to deposit on the lung tissue.

6. The method of claim 5, wherein the inhaled insulin analog is insulin lispro which rapidly disassociates in a monomeric form producing a relative bioavailability greater than twice that seen after the inhalation of a similar amount of recombinant human insulin.

15. A method of reproducibly effecting a serum glucose level, comprising:

aerosolizing a formulation comprising monomeric insulin;

administering the aerosolized formulation.

17. The method of claim 15, wherein the monomeric insulin is insulin lispro.

Id. at col. 49, l. 65 to col. 50, l. 10; col. 50, ll. 38-42, 48-49.

II

All of Lilly's allegations reduce to a single alleged wrong: that Aradigm improperly appropriated information about the advantages of pulmonary delivery of lispro from Lilly and incorrectly claimed the invention in the '477 patent as exclusively its own. In 1995 and 1996, Lilly and Aradigm held four meetings to discuss a possible collaboration that would take advantage of Lilly's expertise in insulin compounds and Aradigm's expertise in aerosolized drug delivery. Several scientists from Lilly were involved in the four meetings with Aradigm scientists: In June and November of 1995, Dr. Harrison from Lilly attended; in June 1996, Dr. Roeder from Lilly attended; and in July 1996, Drs. DiMarchi and Wolff from Lilly, among others, attended. Lilly insists that its scientists conveyed to Aradigm during these meetings the specific advantages to be expected from using lispro instead of regular insulin in an aerosol delivery device.

In the district court, Lilly brought a claim under 35 U.S.C. § 256 to address the alleged omission of Drs. Harrison and DiMarchi from the list of inventors on the '477 patent,¹ arguing to the jury that both were joint inventors of the inventions in dependent claims 6 and 17. The verdict form instructed the jury to answer whether or not Lilly had proved by clear and convincing evidence that either Dr. Harrison or Dr. DiMarchi had contributed to either of the two following inventions: "inhaling an aerosolized formulation of insulin lispro into the lungs, which produces a relative bioavailability greater than twice that seen after the inhalation of a similar amount of [regular] insulin," or "a method for aerosolizing a formulation of insulin lispro and administering that aerosolized formulation." The former states the invention of claim 6, and the latter states the invention of claim 17. The jury found that Dr. DiMarchi only — not Dr. Harrison — was a co-inventor of the former invention claimed in claim 6, but that neither Lilly scientist was a co-inventor of the latter invention of a method for aerosolizing and administering lispro claimed in claim 17.

In its cross-appeal, which we address first, Aradigm argues that the jury verdict finding Dr. DiMarchi to be a co-inventor of claim 6 cannot stand. Aradigm argues that the district court's instructions to the jury on the inventorship issue were legally erroneous, and that, even if the instructions were not erroneous, Lilly did not introduce substantial evidence to demonstrate by clear and convincing evidence that Dr. DiMarchi was a co-inventor of the invention in claim 6. We hold that the instructions were not erroneous, but that the record does not contain substantial evidence to support the jury's finding that Dr. DiMarchi was a co-inventor given Lilly's clear and convincing burden of proof on the issue. Lilly argues that, if we reverse the jury verdict due to insufficient evidence, a new trial is required because Lilly should only have been required to satisfy a preponderance of the evidence burden of proof to demonstrate co-inventorship.² We reject this argument.³

Lilly also tried two contract claims and an unjust enrichment claim to the jury. These claims resulted in only two dollars of nominal damages against Aradigm. In its post-judgment briefing, Lilly did not argue that the jury's findings on these claims were incorrect. Instead, Lilly argued that the jury's findings demonstrated that Lilly was entitled to an injunction prohibiting Aradigm from continuing to file and prosecute patent applications containing information in which Lilly retains contractual or equitable rights. The district court denied Lilly's requests for injunctive relief, and Lilly appeals this denial to us. We affirm.

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

III

Section 256 creates a...