Pfizer, Inc. v. Teva Pharmaceuticals Usa, Inc.

• Decision Date: 07 March 2008
• Docket Number: No. 2007-1271.,2007-1271.
• Citation: 518 F.3d 1353
• Parties: PFIZER, INC., Pharmacia Corp., Pharmacia & Upjohn, Inc., Pharmacia & Upjohn Company, G.D. Searle & Co., G.D. Searle LLC, Searle LLC (Delaware) and Searle LLC (Nevada), Plaintiffs-Appellees, v. TEVA PHARMACEUTICALS USA, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

518 F.3d 1353

PFIZER, INC., Pharmacia Corp., Pharmacia & Upjohn, Inc., Pharmacia & Upjohn Company, G.D. Searle & Co., G.D. Searle LLC, Searle LLC (Delaware) and Searle LLC (Nevada), Plaintiffs-Appellees, v. TEVA PHARMACEUTICALS USA, INC., Defendant-Appellant.

No. 2007-1271.

United States Court of Appeals, Federal Circuit.

March 7, 2008.

Leora Ben-Ami, Kaye Scholer LLP, of New York, NY, argued for plaintiffs-appellees. With her on the brief were Daniel L. Reisner and Daniel Forchheimer. Of counsel on the brief was David De Lorenzi, Gibbons P.C., of Newark, NJ.

Henry C. Dinger, P.C., Goodwin Procter LLP, of Boston, MA, argued for defendant-appellant. With him on the brief were Thomas L. Creel, P.C., Keith A. Zullow, Christopher M. Ries, of New York, NY.

Before MICHEL, Chief Judge, DYK, Circuit Judge, and KENNELLY, District Judge.^*

DYK, Circuit Judge.

Appellant Teva Pharmaceuticals USA, Inc. ("Teva") appeals from a final judgment of the United States District Court for the District of New Jersey, entered after a bench trial, in favor of Appellees Pfizer, Inc. et al. (collectively "Pfizer"). Pfizer Inc. v. Teva Pharms. USA, Inc., 482 F.Supp.2d 390 (D.N.J.2007). The district court held that Teva infringed three patents owned by Pfizer: specifically, claims 1-3, 7-9, 11, and 13 of U.S. Patent No. 5,466,823 ("the '823 patent"), claims 1-5 and 15-18 of U.S. Patent No. 5,563,165 ("the '165 patent"), and claims 1-4 and 11-17 of U.S. Patent No. 5,760,068 ("the '068 patent"). The district court also held that the asserted claims of the three patents were not invalid for a best mode violation and that the asserted claims of the '068 patent were not invalid for obviousness-type double patenting. The district court held that none of the patents was unenforceable on grounds of inequitable conduct. We find that the asserted '068 patent claims are invalid based on double patenting. However, we agree that claim 9 of the '823 patent and claim 17 of the '165 patent are not invalid for a best mode violation. The '823, '165 and '068 patents also are not unenforceable for inequitable conduct. We therefore affirm-in-part and reverse-in-part.

BACKGROUND

Pfizer produces and sells the drug Celebrex, a non-steroidal anti-inflammatory drug ("NSAID"), for the treatment of osteoarthritis and rheumatoid arthritis. Pfizer owns the patents-in-suit, which encompass a broad genus of non-steroidal anti-inflammatory compounds, compositions using those compounds, and methods of using those compositions. The claims of the patents include celecoxib — the active ingredient in Celebrex.

Teva is a generic drug manufacturer. Pursuant to the provisions of the Hatch-Waxman Act, 21 U.S.C. § 355, Teva filed an Abbreviated New Drug Application ("ANDA") with the Food and Drug Administration ("FDA") addressed to a proposed drug identified as "Celecoxib Capsules, 100 mg, 200 mg, and 400 mg." Pfizer, 482 F.Supp.2d at 398. Because the patents covering celecoxib are listed in the Orange Book, Teva was required to certify that those patents "[are] invalid or will not be infringed by the manufacture, use or sale of the new drug for which the [ANDA] is submitted." 21 U.S.C. § 355(j)(2)(A)(vii)(IV).¹ Teva's ANDA contained the required "Paragraph IV certification." That certification did not dispute that the filing of Teva's ANDA would infringe the patents, but challenged the validity of the patents covering celecoxib. In February 2004, in response to the submission of Teva's ANDA, Pfizer initiated this litigation by filing a patent infringement action against Teva pursuant to 35 U.S.C. § 271(e). Pfizer alleged that Teva's ANDA filing was an act of patent infringement because the ANDA sought approval to manufacture, use or sell a drug claimed in a patent or the use of which is claimed in a patent. In May 2004, Teva filed an answer. It did not argue that its ANDA was not within the scope of the claims but rather asserted affirmative defenses that the patents-in-suit were invalid or unenforceable. Teva did not counterclaim. Understanding these affirmative defenses requires an understanding of the history of NSAIDs and the prosecution history of the three patents.

Traditional NSAIDs have been used for many years to treat people suffering from pain and other symptoms associated with inflammation. Aspirin, for example, has been on the market for nearly a century. Aspirin was followed several decades later by the introduction of other similar drugs, such as ibuprofen and naproxen. Although these traditional NSAIDs were effective in treating pain from inflammation, they were also associated with harmful gastrointestinal side effects, ranging from slight stomach discomfort to serious life-threatening ulcers.

In the early 1970s, scientists made a breakthrough in understanding the operative mechanism of the traditional NSAIDs when they discovered that the drugs inhibited the cyclooxygenase ("COX") enzyme in the body, which produces small molecules associated both with pain and inflammation and also with good housekeeping functions that contribute to, for example, good gastrointestinal physiology. Several years later, scientists made another significant breakthrough when they discovered that there were in fact at least two different kinds of COX enzymes: the first, COX-1, produces the molecules associated with the good housekeeping functions inside the body, and the second, COX-2, produces the molecules associated with pain and inflammation. Traditional NSAIDs were found to inhibit both of these COX enzymes. In the years following and leading up to the discovery of celecoxib, scientists began searching for a compound that would selectively inhibit the COX-2 enzyme to treat pain and inflammation without inhibiting the COX-1 enzyme. In other words, they began to focus their efforts on identifying a compound that would effectively treat pain without the harmful side effects identified with the traditional NSAIDs. See generally Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 917-18 (Fed.Cir.2004) (describing the development of modern NSAIDs).

By 1993, Pfizer had identified several new compounds that it believed would selectively inhibit COX-2. On November 30, 1993, Pfizer filed U.S. Patent Application No. 08/160,594 ("the '594 application") with the Patent and Trademark Office ("PTO") that claimed a broad range of these chemical compounds. The application included claims directed to the chemical compounds themselves, to compositions using these compounds, and to methods of using these compounds, including specific claims to celecoxib.

In an office action dated July 12, 1994, the patent examiner issued a restriction requirement, which identified the compound claims, the composition claims, and the method claims as each directed to patentably distinct subject matter. The restriction requirement required Pfizer to select for prosecution one of these three claim groups. In the same office action, the examiner further required the applicant "to elect a single disclosed species" that the examiner identified.² J.A. at 26326. In response, Pfizer elected to prosecute the generic compound claims and within that genus, the single compound species celecoxib. The resulting compound claims remaining in the original '594 application were ultimately allowed, and the application issued as the '823 patent.

Subsequent to the restriction requirement but before the '594 application issued, Pfizer filed a series of continuation applications claiming priority to the '594 application and covering the non-elected subject matter which it had elected not to prosecute in the original '594 application.³ In particular, Pfizer filed a divisional application, which ultimately issued as the '165 patent, that included the restricted-out composition claims, and a continuation-in-part application ("CIP"), which ultimately issued as the '068 patent, that included the restricted-out method claims.

Following an 18-day bench trial, the district court rejected each of Teva's invalidity arguments and found Pfizer's patents infringed. The district court first rejected Teva's defense that the asserted patents were invalid as obvious over the prior art. Teva does not appeal that aspect of the district court's decision, and we do not discuss it here. The district court rejected Teva's best mode defense as to all of the asserted patents because it held that Pfizer's subjective preference for COX-2 selectivity was not the type of preference that best mode requires an applicant to disclose. The district court also rejected Teva's double patenting argument based on the theory that the '165 patent was prior art to the '068 patent. The district court held that, under 35 U.S.C. § 121, the '165 patent could not be used as prior art against the '068 patent. Finally, the district court held that there was no inequitable conduct. Teva asserted that two Merck references, International Application No. WO 95/00501 ("the '501 application") and U.S. Patent No. 5,474,995 ("the '995 patent") should have been disclosed to the PTO. The district court held that they were not material because they did not qualify as prior art under 35 U.S.C. § 102(e). The latter holdings are the subject of this appeal.

After trial, the district court issued a judgment, concluding that Teva infringed each of the '823, '165, and '068 patents and ordering that Teva's ANDA not be approved earlier than the expiration date of the '823, '165, and '068 patents. The judgment also included an order enjoining Teva from engaging in the manufacture, use, offer to sell, sale, or importation into the United States of any product comprising the chemical compound celecoxib. Teva timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

I

We first consider whether the claims of the '068 method patent are invalid based on obviousness-type double patenting over the '165 composition patent. If the '068 patent is invalid, Pfizer is...