Glaxo, Inc. v. Novopharm, Ltd., 96-1466

Citation110 F.3d 1562,42 USPQ2d 1257
Decision Date04 April 1997
Docket NumberNo. 96-1466,96-1466
PartiesGLAXO, INC., and Glaxo Group Limited, Plaintiffs-Appellants, v. NOVOPHARM, LTD., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Stephen B. Judlowe, Hopgood, Calimafde, Kalil & Judlowe, New York City, argued for plaintiffs-appellants. With him on the brief were Janet B. Linn, Lynne A. Borchers, and Robert G. Gibbons. Of counsel on the brief was Joseph W. Eason, Moore & Van Allen, Raleigh, North Carolina.

Robert F. Green, Leydig, Voit & Mayer, Ltd., Chicago, Illinois, argued for defendant-appellee. With him on the brief was Pamela J. Ruschau. Of counsel was John R. Wallace, Wallace, Creech & Sarda, L.L.P., Raleigh, North Carolina.

Before LOURIE, CLEVENGER, and SCHALL, Circuit Judges.

LOURIE, Circuit Judge.

Glaxo, Inc. and Glaxo Group Limited (collectively "Glaxo") appeal from the judgment of the United States District Court for the Eastern District of North Carolina, dismissing Glaxo's claims that Novopharm Ltd. and its wholly owned subsidiary, Granutec, Inc., (collectively "Novopharm") (1) infringed U.S. Patent 4,521,431 under 35 U.S.C. § 271(e) by filing an abbreviated new drug application (ANDA), (2) would infringe U.S. Patent 4,672,133 under 35 U.S.C. § 271(g) by importing materials following the approval of the ANDA, and (3) violated state unfair competition law by violating a protective order. Glaxo, Inc. v. Novopharm Ltd., 931 F.Supp. 1280 (E.D.N.C.1996). Because the district court did not err in finding that Glaxo failed to prove infringement of the '431 and '133 patents or in determining that Glaxo could not prohibit Novopharm from using publicly available information, we affirm.


This appeal involves the parties' ongoing dispute over Novopharm's efforts to market The '658 patent discloses a method of making RHCl and claims the compound per se, both specifically and generically. This patent application was apparently filed before Glaxo scientists knew that RHCl could exist in more than one crystalline form. It makes no reference to crystalline form, but the crystalline form of RHCl first obtained by the procedures described in the '658 patent has come to be known as Form 1 RHCl. The '658 patent will expire on July 25, 1997.

a generic version of Glaxo's highly successful anti-ulcer medication, Zantac TM. The active ingredient in Zantac TM is ranitidine hydrochloride (RHCl), a salt that may occur in at least two distinct crystalline forms. Glaxo owns three patents that are relevant to this dispute: U.S. Patents 4,128,658; 4,521,431; and 4,672,133.

After Glaxo scientists discovered that a different crystalline form of RHCl could be made using the process described in the '658 patent and that this new form had physical characteristics preferable to those of the first known crystalline form, they filed a patent application for the new form, which they named Form 2 RHCl. This crystalline form of RHCl is currently the active ingredient in Zantac TM. The '431 and '133 patents issued from this application, and they claim, respectively, Form 2 RHCl and a process for making Form 2 RHCl. The claims in both of these patents characterize Form 2 RHCl by means of a specific, 29-peak infra-red (IR) spectrum. Several dependent claims in these patents also define Form 2 RHCl as characterized by a 32-intensity x-ray powder diffraction pattern. The '431 patent will expire in 2002 and the '133 patent will expire in 2004.

In 1991, Novopharm Ltd., a Canadian-based manufacturer, formulator, and seller of generic pharmaceuticals, filed an ANDA with the United States Food and Drug Administration (FDA) seeking permission to sell Form 2 RHCl. See 21 U.S.C. § 355(j) (1994); 21 C.F.R. § 314 Subpart C (1996). In the course of an infringement suit brought by Glaxo under 35 U.S.C. § 271(e)(2), Novopharm admitted infringement, but challenged the validity of the '431 patent, alleging that the '658 patent anticipated the '431 patent's claims to Form 2 RHCl. The district court found that none of the methods disclosed in the '658 patent invariably yielded crystals of Form 2 RHCl, but could yield crystals of either crystalline form. Glaxo, Inc. v. Novopharm Ltd., 830 F.Supp. 871, 876-77, 29 USPQ2d 1126, 1130-31 (E.D.N.C.1993) (Glaxo 1 ). Based on this finding, the court concluded that the '658 patent did not inherently disclose Form 2 and therefore did not anticipate the claims of the '431 patent. Id. at 876-77, 881, 29 USPQ2d at 1131, 1135. We affirmed, inter alia, on the grounds that the district court's factual findings were not clearly erroneous and that, based on those findings, the court properly rejected Novopharm's anticipation defense. Glaxo Inc. v. Novopharm Ltd., 52 F.3d 1043, 1047-48, 34 USPQ2d 1565, 1567 (Fed.Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 516, 133 L.Ed.2d 424 (1995) (Glaxo 2 ).

Not discouraged by its inability to use Form 2 to bring RHCl to the market, Novopharm filed another ANDA on April 25, 1994, this time seeking approval to market Form 1 RHCl. As part of this ANDA, Novopharm filed a so-called "paragraph IV certification," indicating that its product would not infringe the '431 patent and that it did not intend to market Form 1 RHCl before the expiration of the '658 patent. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (1994). The ANDA, as initially filed, specified that the marketed product be approximately 99% pure Form 1 RHCl (with impurities that may include Form 2 RHCl) as determined by an IR spectroscopic analysis. Amended ANDAs filed by Novopharm would have permitted the marketed product to have a Form 1 RHCl purity as low as 90%.

In response, on July 22, Glaxo sued Novopharm, asserting infringement of the '431 patent under § 271(e)(2) and seeking a declaratory judgment that Novopharm would infringe the '133 patent under § 271(g) if and when it imported the product following FDA approval of the ANDA. Glaxo also asserted a state law unfair competition claim, based upon its allegation that Novopharm and its expert witness, Dr. Natalie Lazarowych, misappropriated Glaxo trade secrets regarding the production of Form 1 RHCl in violation of a protective order issued by the Glaxo 1 court. Novopharm counter-claimed, asserting After conducting a bench trial, the district court first determined that, in order to prevail under § 271(e)(2), Glaxo must prove by a preponderance of the evidence that the product sold by Novopharm pursuant to the approved ANDA "will at least more probably than not read on the ['431] patent." Glaxo, Inc. v. Novopharm Ltd., 931 F.Supp. 1280, 1286 (E.D.N.C.1996). The court first construed the '431 and '133 claims to be limited to "pure Form 2 [RHCl]." Id. at 1291. The court further found that, even assuming that mixtures of Form 1 and Form 2 RHCl would infringe the patents, Glaxo had not met its burden of proving infringement of the patents. Id. at 1291-97. Finally, the court concluded that Glaxo's state law claims were without merit because the confidentiality of all of the relevant proprietary information possessed by Novopharm and Lazarowych was waived by Glaxo at the public Glaxo 1 trial, id. at 1300, or, in the alternative, was independently developed by Novopharm, id. at 1304. Accordingly, the court entered judgment for Novopharm on all of Glaxo's claims and dismissed the action. Glaxo appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (1994).

that Glaxo violated federal antitrust and state unfair competition laws.


Glaxo argues that the district court erred by dismissing its claim for infringement of the '431 patent, its claim seeking a declaration that Novopharm's post-approval importation of RHCl would infringe the '133 patent, and its state law unfair competition claim. We address the issues in that order.

A. Infringement of the '431 Patent

A determination of infringement requires a two step analysis. "First, the claim must be properly construed to determine its scope and meaning. Second, the claim as properly construed must be compared to the accused device or process." Carroll Touch, Inc. v. Electro Mechanical Sys., Inc., 15 F.3d 1573, 1576, 27 USPQ2d 1836, 1839 (Fed.Cir.1993). The first step, claim construction, is a question of law which we review de novo; the proper construction of the claims is based upon the claim language, the specification, the prosecution history, and if necessary to aid the court's understanding of the patent, extrinsic evidence. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 979-81, 34 USPQ2d 1321, 1329-31 (Fed.Cir.1995) (in banc), aff'd, --- U.S. ----, 116 S.Ct. 1384, 134 L.Ed.2d 577, 38 USPQ2d 1461 (1996). The second step, determining whether a particular device infringes a properly construed claim, is a question of fact which we review for clear error on appeal from a bench trial. See Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1569, 219 USPQ 1137, 1140 (Fed.Cir.1983). In order to prove infringement, a patentee must show that every limitation of the claims asserted to be infringed is found in the accused device. See Dolly, Inc. v. Spalding & Evenflo Cos., 16 F.3d 394, 397, 29 USPQ2d 1767, 1769 (Fed.Cir.1994).

Glaxo argues that the district court erred by construing the '431 (and the '133) claims to cover only pure Form 2 RHCl (and a method for making pure Form 2 RHCl). Glaxo argues that the claims are properly construed to encompass products containing any amount of Form 2 RHCl and methods for making such products. Novopharm responds that the district court did not base its decision on a narrow ("pure Form 2 RHCl") claim construction. Rather, Novopharm argues that, because the court accepted Glaxo's broad claim construction for purposes of its infringement analysis, the narrow claim construction was dictum, not binding upon the parties. In fact, at oral argument Novopharm disavowed the narrow claim construction by admitting that "there is nothing that comes from ... the lower court's...

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