Shire Dev., LLC v. Watson Pharm., Inc.

• Decision Date: 28 March 2014
• Docket Number: 2013-1409
• Parties: SHIRE DEVELOPMENT, LLC, SHIRE PHARMACEUTICAL DEVELOPMENT, INC., COSMO TECHNOLOGIES LIMITED, AND GIULIANI INTERNATIONAL LIMITED, Plaintiffs-Appellees, v. WATSON PHARMACEUTICALS, INC. (now known as Actavis, Inc.), WATSON LABORATORIES, INC. FLORIDA, WATSON PHARMA, INC. (now known as Actavis Pharma, Inc.), AND WATSON LABORATORIES, INC., Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

SHIRE DEVELOPMENT, LLC, SHIRE PHARMACEUTICAL DEVELOPMENT, INC.,COSMO TECHNOLOGIES LIMITED, AND GIULIANI INTERNATIONAL LIMITED, Plaintiffs-Appellees, v. WATSON PHARMACEUTICALS, INC. (now known as Actavis, Inc.),

WATSON LABORATORIES, INC. FLORIDA, WATSON PHARMA, INC.

(now known as Actavis Pharma, Inc.), AND WATSON LABORATORIES, INC., Defendants-Appellants.

2013-1409

United States Court of Appeals for the Federal Circuit

Decided: March 28, 2014

Appeal from the United States District Court for the Southern District of Florida in No. 12-CV-60862, Judge Donald M. Middlebrooks.

EDGAR H. HAUG, Frommer Lawrence & Haug, LLP, of New York, New York, argued for plaintiffs-appellees. With him on the brief were JASON A. LIEF, ANDREW S. WASSON, NICHOLAS F. GIOVE, ELIZABETH MURPHY, and JONATHAN A. HERSTOFF.

STEVEN A. MADDOX, Knobbe, Martens, Olson & Bear, LLP, of Washington, DC, argued for defendants-appellants. With him on the brief were JONATHAN E. BACHAND and NEIL M. MCCARTHY. Of counsel was KRISTIN MARIE COOKLIN, Crowell & Moring, LLP, of Washington, DC.

Before RADER, Chief Judge, PROST and HUGHES, Circuit

Judges.

HUGHES, Circuit Judge.

The plaintiffs-appellees (collectively, Shire) own U.S. Patent No. 6,773,720, which claims a controlled-release oral pharmaceutical composition for treating inflammatory bowel diseases. Shire markets these oral pharmaceutical compositions under the brand name LIALDA®. After the defendants-appellants (collectively, Watson) submitted an Abbreviated New Drug Application (ANDA) seeking approval to sell the bioequivalent of LIALDA®, Shire sued for infringement of the '720 patent. After construing certain relevant claim language, the district court found that Watson's product infringed the '720 patent. We conclude that the district court's constructions of "inner lipophilic matrix" and "outer hydrophilic matrix" impermissibly broaden the ordinary meaning of the terms. Accordingly, we reverse the district court's claim constructions of "inner lipophilic matrix" and "outer hydrophilic matrix," and subsequent finding of infringement, and remand for further proceedings consistent with this opinion.

I.

The '720 patent—entitled "Mesalazine Controlled Release Oral Pharmaceutical Composition"—concerns controlled-release oral pharmaceutical compositions for treating inflammatory bowel diseases, such as Crohn'sdisease and ulcerative colitis. '720 patent col. 1 ll. 9-13. The active ingredient in these compositions is 5-amino-salicylic acid, which is also known as mesalazine or mesalamine (hereinafter, mesalamine). Mesalamine treats inflamed areas in the bowel by direct contact with the intestinal mucosal tissue. J.A. 9054. Thus, mesalamine must pass through the stomach and small intestine without being absorbed into the bloodstream. J.A. 9054. And, it must be administered throughout the entire length of the colon so that the mesalamine contacts all affected tissues. J.A. 9054. Given these requirements, the oral composition must contain a high percentage, by weight, of mesalamine. '720 patent col. 3 ll. 52-56.

The '720 patent teaches an inner lipophilic matrix and an outer hydrophilic matrix to address the limitations of the prior art systems.¹ According to the '720 patent, the combination of a lipophilic and hydrophilic matrix in an inner-outer matrix system, respectively, is advantageous because the inner-outer matrix properties cause the mesalamine to be released in a sustained and uniform manner. '720 patent col. 3 ll. 57-59 ("[T]he compositions of the invention provide a release profile of [mesalamine] more homogenous than the traditional systems."); see also col. 3 l. 60-col. 4 l. 5. The '720 patent also teaches the "advantageous characteristic" of a composition with up to 95% active ingredient by weight. '720 patent col. 3 ll. 52-56.

Shire asserts independent claim 1 and dependent claim 3. Claim 1 recites:

1. Controlled-release oral pharmaceutical compositions containing as an active ingredient 5-amino-salicylic acid, comprising:

a) an inner lipophilic matrix consisting of substances selected from the group consisting of unsaturated and/or hydrogenated fatty acid, salts, esters or amides thereof, fatty acid mono-, di- or triglycerid[e]s, waxes, ceramides, and cholesterol derivatives with melting points below 90° C., and wherein the active ingredient is dispersed both in said the lipophilic matrix and in the hydrophilic matrix;

b) an outer hydrophilic matrix wherein the lipophilic matrix is dispersed, and said outer hydrophilic matrix consists of compounds selected from the group consisting of polymers or copolymers of acrylic or methacrylic acid, alkylvinyl polymers, hydroxyalkyl celluloses, carboxyalkyl celluloses, polysaccharides, dextrins, pectins, starches and derivatives, alginic acid, and natural or synthetic gums;

c) optionally other excipients;

wherein the active ingredient is present in an amount of 80 to 95% by weight of the total composition, and wherein the active ingredient is dispersed both in the lipophilic matrix and in the hydrophilic matrix.

'720 patent col. 6 ll. 7-30. Claim 3 depends from claim 1 and requires that the composition be in the form of tablets, capsules, or minitablets. '720 patent col. 6 ll. 35-36.

The '720 patent teaches a three-step process to arrive at the claimed composition. '720 patent col. 2 ll. 48-59.First, one or more low melting, lipophilic excipients² are mixed with mesalamine during heating. '720 patent col. 2 ll. 50-53. Second, the mixture is cooled to form the lipophilic matrix and then reduced in size into "matrix granules containing the active ingredient." '720 patent col. 2 ll. 54-56. Third, the lipophilic matrix granules are mixed together with hydrophilic excipients and compressed to form tablets. '720 patent col. 2 ll. 50-53, col. 3 ll. 40-45.

During prosecution of the '720 patent, the examiner initially rejected the applicants' claims as obvious in view of GB 2 245 492 A (Franco); obvious and anticipated in view of U.S. Patent No. 5,593,690 (Akiyama); and obvious in view of the combination of U.S. Patent No. 5,851,555 (Sanghvi) and U.S. Patent No. 6,395,300 (Straub). J.A. 15469-71. The examiner explained that Franco taught a pharmaceutical composition with an active core, a lipophilic coating, and a hydrophilic film. J.A. 15469.

In response, the applicants stated that Franco disclosed a reservoir system where "the active ingredient is confined within a core which acts as a reservoir from which the active ingredient is released via the erosion of the outer coating. However, as to the present invention, the active ingredient is dispersed in a lipophilic matrix, not in an isolated core." J.A. 15480-81.

The applicants then distinguished Akiyama based on the claimed invention's two matrices and high active ingredient concentration. The applicants argued that Akiyama "fail[s] to disclose or suggest the two matrices and the arrangement of the matrices as set forth in theclaimed invention. The arrangement of the matrices in the present invention aid[s] in the combined release of an active ingredient via diffusion from a lipophilic matrix." J.A. 15479. The applicants also argued that Akiyama's composition contained the "active ingredient . . . in an amount much lower than that according to the claimed invention:"—Akiyama taught an active ingredient in granules in an amount ranging from 0.005-75% by weight, but the applicants' amended claim taught 80-95%. J.A. 15478-79.

To distinguish Sanghvi and Straub, the applicants again focused on a lack of two separate matrices: Sanghvi "fails to disclose a system containing two separate matrices. [It] merely discloses formulations obtained by mixing together hydrophilic and lipophilic substances into a single matrix." J.A. 15481. When discussing the combination of Sanghvi and Straub, the applicants explained that "[w]hile the publications might teach the advantageous results of using a lipophilic matrix, the publications fail to disclose or suggest a composition comprising a combination of two separate matrices. In fact, there is no mention or suggestion of a composition utilizing different control mechanisms." J.A. 15482.

The examiner maintained her rejection of the pending claims as obvious in view of Franco. The examiner also rejected the claims because "the feature upon which applicant relies (i.e., the active ingredient is dispersed in a lipophilic matrix) is not recited in the rejected claims." J.A. 15489. Further, the examiner explained that the limitation-at-the-time—"active ingredient is at least partly inglobated"—"does not limit the claim to 'active ingredient is dispersed in a lipophilic matrix' as alleged by the applicant." J.A. 15489.

In response, the applicants maintained that Franco taught a reservoir system, but that the claimed invention "relates to a 'multimatrix system' and not to a reservoirsystem." J.A. 15492; see also J.A. 15492 ("FRANCO et al. do[es] not teach an inner lipophilic matrix or an outer hydrophilic matrix . . . . The composition taught by FRANCO et al. is not based on an actual matrix."). The applicants also amended their claims to state that the active ingredient is dispersed in the lipophilic matrix and added a Markush group³ for both the inner lipophilic matrix and the outer hydrophilic matrix. J.A. 15491-92, 96, 99. Following an interview with the examiner, the claims were amended to require the mesalamine to be dispersed in the outer hydrophilic matrix and not just the lipophilic matrix. J.A. 15546-50. The claims were then allowed and the '720 patent issued.

When Watson submitted its ANDA seeking FDA approval to sell the bioequivalent of LIALDA®, Shire sued Watson for infringement of the '720 patent. In January 2013, the district court construed several disputed terms, including "inner lipophilic matrix" and "outer hydrophilic matrix." See Shire Dev. LLC v. Watson Pharm., Inc., No. 12-60862, 2013 WL 174843 (S.D. Fla. Jan. 17, 2013).

The district court held a bench trial in April 2013...