Enzo Biochem, Inc. v. Gen-Probe, Inc.

• Decision Date: 30 September 2005
• Docket Number: No. 04-1570.,04-1570.
• Parties: ENZO BIOCHEM, INC., Plaintiff-Appellant, v. GEN-PROBE INCORPORATED, Defendant-Appellee, and Becton Dickinson and Company, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

424 F.3d 1276

ENZO BIOCHEM, INC., Plaintiff-Appellant, v. GEN-PROBE INCORPORATED, Defendant-Appellee, and Becton Dickinson and Company, Defendant-Appellee.

No. 04-1570.

United States Court of Appeals, Federal Circuit.

September 30, 2005.

COPYRIGHT MATERIAL OMITTED

Charles A. Weiss, Kenyon & Kenyon, of New York, New York, argued for plaintiff-appellant. With him on the brief were Richard L. DeLucia, John R. Kenny and Patrice P. Jean. Of counsel were Anita Pamintuan Fusco and Henry N. Wixon.

William F. Lee, Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, Massachusetts, argued for defendants-appellees. With him on the brief for Gen-Probe Incorporated were William G. McElwain and Nina S. Tallon. Of counsel was Henry N. Wixon. On the brief for Becton Dickinson and Company were Donald R. Ware, Barbara A. Fiacco, and Katherine J. Fick, Foley Hoag LLP, of Boston, Massachusetts. Of counsel were Denise W. DeFranco and Lauren T. Knapp.

Before LOURIE, LINN, and PROST, Circuit Judges.

LOURIE, Circuit Judge.

Enzo Biochem, Inc. ("Enzo") appeals from the summary judgment of the United States District Court for the Southern District of New York holding that United States Patent 4,900,659 is invalid under the on-sale bar of 35 U.S.C. § 102(b). Enzo Biochem, Inc. v. Gen-Probe, Inc., No. 99 Civ. 3548 (S.D.N.Y. July 27, 2004) ("Order"). Because the invention claimed in the '659 patent was the subject of an offer for sale before the critical date, we conclude that the patent is invalid and we affirm the district court's judgment.

BACKGROUND

Enzo is the assignee of the '659 patent, which relates to nucleic acid probes that selectively hybridize with the bacteria that cause gonorrhea, namely, Neisseria gonorrhoeae, as well as methods for using those probes to detect the bacteria. N. gonorrhoeae has a high degree of homology with Neisseria meningitidis, making it difficult to differentiate between the two bacteria. Enzo recognized the need for a chromosomal DNA probe specific for N. gonorrhoeae, and it derived three such sequences that preferentially hybridized with six common strains of N. gonorrhoeae over six common strains of N. meningitidis. '659 Patent, col. 3, l. 49 to col. 4, l. 14; col. 4, ll. 45-50. Enzo deposited those sequences in the form of a recombinant DNA molecule within an E. coli bacterial host at the American Type Culture Collection ("ATCC"). Id., col. 13, ll. 27-31.

Claim 1 of the '659 patent reads, in pertinent part, as follows:

1. A composition of matter that is specific for Neisseria gonorrhoeae comprising at least one nucleotide sequence for which the ratio of the amount of said sequence which hybridizes to chromosomal DNA of Neisseria gonorrhoeae to the amount of said sequence which hybridizes to chromosomal DNA of Neisseria meningitidis is greater than about five, said ratio being obtained by a method comprising the following steps;

Id., col. 27, ll. 29-36. The method steps that follow are directed to obtaining the claimed ratio. Id., col. 27, l. 37 to col. 28, l. 26. Claim 4 of the patent is directed to the deposited probes, referenced by their accession numbers, and variations thereof:

4. The composition of claim 1 wherein said nucleotide sequences are selected from the group consisting of:

a. the Neisseria gonorroheae [sic] DNA insert of ATCC 53409, ATCC 53410 and ATCC 53411, and discrete nucleotide subsequences thereof,

b. mutated discrete nucleotide sequences of any of the foregoing inserts that are within said hybridization ratio and subsequences thereof; and c. mixtures thereof.

Id., col. 28, ll. 31-39. Claim 5, upon which Claim 6 depends, is directed to a method of conducting a hybridization assay with the deposited probes and variations thereof:

5. In a nucleic acid hybridization assay for the detection of Neisseria gonorrhoeae utilizing a polynucleotide probe, wherein said probe is contacted with a sample and the amount of any hybridized probe is detected, the improvement which comprises utilizing as said nucleotide probe a composition of claim 1, wherein said composition is labeled with a detectable marker.

Id., col. 28, ll. 40-46.

In June 1982, Enzo and Ortho Diagnostic Systems ("Ortho"), an affiliate of Cambridge Research Labs, entered into an agreement involving joint funding of research and development on "any human diagnostic product resulting from the program of research" (defined elsewhere in the agreement) "whether or not invented or developed by Enzo prior to the effective date of this agreement." In August 1983, the parties executed an amendment that made it clear that a probe for gonorrhea was part of the agreement. Importantly, paragraph 2.14 of the Enzo-Ortho agreement provided the following:

ENZO shall supply to ORTHO and ORTHO shall purchase from ENZO for use in Licensed Products no less than ninety percent (90%) of ORTHO's United States requirements or seventy-five percent (75%) of ORTHO's worldwide requirements of Active Ingredients; provided, however, that ENZO shall have this right to supply and ORTHO shall have this obligation to purchase only with regard to Active Ingredients supplied to ORTHO at prices and time schedules which are reasonably competitive with those of other sources....

The agreement also contained a paragraph 2.12 reading as follows:

ENZO shall supply ORTHO at ENZO's fully allocated cost with all quantities of any Licensed Product reasonably required by ORTHO or any Affiliate for its own research, development, and test marketing, including that required to perform all preclinical and clinical studies.

In December 1984, apparently in satisfaction of paragraph 2.12, a key research and development provision of the agreement, Enzo transferred to Ortho a probe that was essentially the same as GC155, one of the three probes that Enzo deposited at the ATCC. Enzo filed a patent application on that subject matter in January 1986, more than one year after the transfer of the probe and the execution of the agreement, that eventually issued as the '659 patent in February 1990. The ATCC accession numbers were cited in the patent.

Enzo sued the defendants, Gen-Probe, Incorporated and Becton Dickinson and Company (collectively, "Gen-Probe"), for infringement of the '659 patent, and Gen-Probe moved for summary judgment that the claims were invalid for failure to satisfy the written description requirement of 35 U.S.C. § 112. The district court granted Gen-Probe's motion, and Enzo appealed to this court. In 2002, we reversed the district court's grant of summary judgment and remanded the case to the district court because genuine issues of material fact existed regarding the satisfaction of the written description requirement. Enzo Biochem, Inc. v. Gen-Probe, Inc., 323 F.3d 956 (Fed.Cir.2002).

On remand, Gen-Probe moved for summary judgment of invalidity on different grounds, this time contending that all the claims of the '659 patent were barred by the offer to sell contained in Enzo's agreement with Ortho, in violation of the 35 U.S.C. § 102(b) on-sale bar. In a detailed oral hearing conducted on July 27, 2004, the district court delivered its decision invalidating the '659 patent for violation of the on-sale bar. The court first considered whether the material offered for sale was within the scope of all of the claims. Because Enzo's success in its suit depended in part on its establishing that GC155 satisfies all the limitations of the claims for purposes of the enablement and written description requirements, the court determined that it was appropriate for Gen-Probe to rely on that contention as if proved for the purpose of Gen-Probe's own motion for summary judgment on the on-sale bar.

Second, the court determined that Enzo offered an embodiment of the '659 patent for sale prior to the critical date. The court found that the material transferred from Enzo to Ortho in December 1984 was GC155, the same material that was deposited at the ATCC in January 1986 as an embodiment of the invention. The court did not agree with Enzo that a genuine issue of material fact existed as to whether the probe sent to Ortho in December 1984 was identical to that deposited at the ATCC. Enzo had argued that the probe was still being developed and had only 700 base pairs, not the 840 base pairs that comprised ATCC 53411. The district court, on the other hand, relied on evidence in the form of laboratory notebooks and testimony from Enzo scientists that did not distinguish between various lengths of GC155.

Finally, the court evaluated Enzo's assertion of experimental use. The court found that Enzo had asserted that the probe that it delivered to Ortho was its final product, which it deposited at the ATCC, and thus that it had reduced the invention to practice. The court reasoned that the policy behind the rule that experimental use negates an on-sale bar is to give the inventor the opportunity to reduce an invention to practice, and thus that what occurs after a reduction to practice cannot be experimental use; consequently, it concluded that Enzo's use was not experimental.

Enzo filed a Notice of Appeal on August 20, 2004. Gen-Probe then moved to dismiss the appeal, arguing that its counterclaim of unenforceability for inequitable conduct remained unadjudicated and that the district court's judgment was thus nonfinal. We determined that Gen-Probe's pending counterclaim rendered the district court's judgment nonfinal for purposes of appeal, but restated the principle that "a premature notice of appeal ripens upon subsequent action of the district court." Enzo Biochem, Inc. v. Gen-Probe, Inc., 414 F.3d 1376, 1380 (Fed.Cir. July 13, 2005) (quoting Pause Tech. LLC v. TiVo Inc., 401 F.3d 1290, 1295 (Fed.Cir.2005)). Hence, we permitted the parties to seek remedial action in the district court and move to reinstate the appeal from a final judgment.

The parties returned to the district court requesting dismissal of Gen-Probe's pending counterclaim. The court...