Forest Laboratories v. Abbot Laboratories

• Decision Date: 13 February 2001
• Citation: 239 F.3d 1305,57 USPQ2d 1794
• Parties: (Fed. Cir. 2001) FOREST LABORATORIES, INC. and ONY INC., Plaintiffs-Cross Appellants, v. ABBOTT LABORATORIES, Defendant-Appellant, and TOKYO TANABE CO., LTD., (acquired by Mitsubishi-Tokyo Pharmaceuticals, Inc.), Defendant-Appellant. 99-1494,-1495,-1512 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1305

239 F.3d 1305 (Fed. Cir. 2001)

FOREST LABORATORIES, INC. and ONY INC., Plaintiffs-Cross Appellants, v. ABBOTT LABORATORIES, Defendant-Appellant and TOKYO TANABE CO., LTD., (acquired by Mitsubishi-Tokyo Pharmaceuticals, Inc.), Defendant-Appellant.

99-1494,-1495,-1512

United States Court of Appeals for the Federal Circuit

DECIDED: February 13, 2001

Appealed from: United States District Court for the Western District of New York Judge Richard J. Arcara

Kenneth B. Herman, Fish & Neave, of New York, New York, argued for plaintiffs-cross appellants. With him on the brief were Herbert F. Schwartz, Christopher J. Harnett, A. Joy Arnold, William L. Leschensky, and Robert B. Wilson.

Thomas M. Durkin, Mayer, Brown & Platt, of Chicago, Illinois, argued for defendant-appellant Abbott Laboratories. W ith him on the brief was Tarek Ismail; andDonald M. Falk, Mayer, Brown & Platt, of Washington, DC.

Robert J. Gunther, Jr., Latham & Watkins, of New York, New York, argued for defendant-appellant, Tokyo Tanabe Co., Ltd. With him on the brief were John J. Kirby, Jr., Thomas G. Gallatin, Jr., and James S. Blank.

Before LOURIE, LINN, and DYK, Circuit Judges.

LOURIE, Circuit Judge.

Abbott Laboratories and Tokyo Tanabe Co., Ltd. appeal from the decision of the United States District Court for the Western District of New York granting ONY Inc. and Forest Laboratories, Inc.'s motion for judgment as a matter of law ("JMOL") following a jury verdict of infringement of Tokyo Tanabe's U.S. Patents 4,338,301 and 4,397,839. Because the jury's verdict was not supported by substantial evidence, the district court did not err in granting JMOL of non-infringement. Accordingly, we affirm.

BACKGROUND

Tokyo Tanabe is the assignee of the '301 and '839 patents, which relate to a lung surfactant composition for treating Respiratory Distress Syndrome ("RDS") in premature babies. Forest Labs. v. Abbott Labs., No. 96-CV-159A, slip op. at 2 (W.D.N.Y. Aug. 3, 1998) (deciding claim construction) ("Forest I"). The claims are reproduced below in relevant part:

1. Surface active material containing phospholipid, neutral lipid, total cholesterol, carbohydrate, protein and water, which material is obtained from lung tissue of a mammal with or without further phospholipid, characterized in that the phospholipid content is 75.0-95.5%, the neutral lipid content is 1.8-14.0%, the total cholesterol content is 0.0-3.0%, the carbohydrate content is 0.1-1.5%, the protein content is 0.5-5.0% and water content is 1.7-6.0%, all based on the dried weight of said material . . . .

'301 patent, col. 17, ll. 59-68 (emphasis added).

7. A pharmaceutical composition useable for the treatment of hyaline-membrane disease [RDS] comprising an effective amount of surface-active material as set forth in claim 1 and a pharmaceutically acceptable non-toxic carrier thereof [sic, therefor].

Id. at col. 18, ll. 32-59 (emphasis added).

1. A surface active material comprising (1) phospholipid, neutral fat, total cholesterol, free fatty acids, carbohydrate, protein and water, all of which are obtained from the lung tissue of a mammal . . . characterized in that the overall phospholipid content is 68.6-90.7%, the overall neutral fat content is 0.3-13.0%, the total cholesterol content is 0.0-8.0%, the overall free fatty acid content is 1.0-27.7%, the carbohydrate content is 0.1-2.0%, the protein content is 0.0-3.5%, and the water content is 2.1-5.2%, allbased on the dry weight of the material . . . .

'839 patent, col. 17, ll. 13-25 (emphasis added).

9. A pharmaceutical composition useable for the treatment of respiratory distress syndrome comprising an effective amount of a surface active material as set forth in claim 1 and a pharmaceutically acceptable carrier thereof [sic, therefor].

Id. at col. 18, ll. 15-19 (emphasis added).

Abbott developed a commercial product known as "Survanta " after receiving an exclusive U.S. license to these patents from Tokyo Tanabe. Forest I at 2. ONY developed a competing product for treating RDS, which it called "Infasurf "; it entered into an agreement with Forest under which Forest would further develop and market Infasurf . Id. at 3. ONY and Abbott maintained collaborative contacts throughout the development of these products from 1983 until Abbott received FDA approval to market Survanta in 1991, during which time ONY maintains that Abbott gave it no reason to believe that its Infasurf product would infringe any patents of Abbott. Forest Labs. v. Abbott Labs., No. 96-CV-159A, slip op. at 11, 33 (W.D.N.Y. June 23, 1999) (deciding equitable estoppel) ("Forest II"). In fact, Abbott performed a patentability search for ONY in 1984 and informed ONY that ONY's Infasurf was not patentable. Id. at 25-26. In contrast, in 1994, Abbott informed ONY that it had reason to believe that Infasurf might infringe the Tokyo Tanabe patents under which Abbott was exclusively licensed. Id. at 14.

In 1996, ONY and Forest (hereinafter collectively "ONY") sued Abbott, seeking a declaratory judgment of non-infringement and patent invalidity. Abbott counterclaimed for infringement of claims 1-12 of the '301 patent and claims 1, 2, 8, 9, and 11-15 of the '839 patent. After suit was brought, ONY added Tokyo Tanabe as a defendant, which also counterclaimed for infringement. ONY later raised the additional defense of equitable estoppel, alleging that Abbott had led ONY to believe that Abbott would not assert the Tokyo Tanabe patents against it.

Following a Markman hearing, the court construed a disputed term, "surface active material," in claim 1 of the '301 and '839 patents. Forest I at 1. The court accepted ONY's construction of the term, concluding that it refers to the lung surfactant extract material in dry form before it is suspended in physiological saline to form a "pharmaceutical composition" and that the chemical composition of the "surface active material" must be determined for infringement purposes before it is made into a "pharmaceutical composition." Id. at 17. Thus, the court distinguished between the "surface active material" of claim 1 of the '301 and '839 patents and the "pharmaceutical compositions" of claims 7 and 9 of those patents, respectively. Id. In its view, the surface active material was only a "part or a subset" of the pharmaceutical compositions. Id. at 18. The court also interpreted the expression "based on the dry weight" ¹ as meaning the dry weight of the lung surfactant extract before it is combined with a pharmaceutical carrier. Id. at 26.

At trial, Abbott and Tokyo Tanabe (hereinafter collectively "Abbott") introduced evidence of the percentages of all of the ingredients ² of the accused product, with one exception: water. Forest Labs. v. Abbott Labs., No. 96-CV-159A, slip op. at 10 (W.D.N.Y. June 23, 1999) (granting JMOL of non-infringement) ("Forest III"). The specification of each patent states that the water content was measured by the Karl Fischer method. '301 patent, col. 5, ll. 17-19; '839 patent, col. 3, ll. 49-50. Abbott's expert testified that he had never measured the percentage of water in CLSE ("Calf Lung Surfactant Extract," the "dry" form of Infasurf ) by any method, let alone the Karl Fischer method. Forest III at 10-11. Rather than measuring the percentage of water in CLSE, Abbott assumed water to be present in the claimed percentages and calculated what the percentages of the other components would be at the limits of the claimed water concentrations. Id. at 11-12. To show infringement under the doctrine of equivalents, Abbott presented testimony that the percentage of water in the surface active material is irrelevant; ONY countered with testimony from the primary inventor of CLSE/Infasurf , Dr. Egan, that the percentage of water affects CLSE's physical and biological properties. Id. at 12, 13 n.6.

A jury returned a verdict in favor of Abbott on all issues except willfulness. The jury also returned an advisory verdict in favor of Abbott on the issue of equitable estoppel. ONY then moved for a post-trial judgment of equitable estoppel and JMOL of non-infringement. The court, stating that it was not bound by the advisory verdict, applied equitable estoppel after concluding that Abbott had misled ONY into believing that it did not infringe the Tokyo Tanabe patents, and that ONY had relied on Abbott's conduct and was prejudiced by it. Forest II at 22. The court also granted ONY's motion for JMOL of non-infringement and its motion for a conditional new trial because it found that Abbott had failed to prove that CLSE met the claim limitations requiring specific water content percentages. Forest III at 16. Finally, the court rejected Abbott's claim of infringement under the doctrine of equivalents for lack of evidence of equivalence. Id.

Abbott appeals the court's judgment applying equitable estoppel and its grant of JMOL of non-infringement. ONY argues that the court decided these issues correctly, but also argues that the judgment of non-infringement may also be sustained on the basis of a different construction of two other claim limitations. ONY also raises a conditional cross-appeal, asking this court to consider its invalidity and unenforceability arguments in the event that we do not decide in its favor and remand the case for a new trial. We have jurisdiction of this appeal pursuant to 28 U.S.C. § 1295(a)(1) (1994).

DISCUSSION

The district court may grant JMOL when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Fed. R. Civ. P. 50(a)(1). We review a district court's decision granting a motion for JMOL de novo, reapplying the JMOL standard. Markman v. Westview Instruments, Inc., 52 F.3d 967, 975, 34 USPQ2d 1321, 1326 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370, 38 USPQ2d 1461 (1996). On appeal, we must consider the record evidence in the light most favorable to the non-movant and...