Smithkline Beecham Corp. v. Apotex Corp.

Citation247 F.Supp.2d 1011
Decision Date03 March 2003
Docket NumberNo. 98 C 3952.,98 C 3952.
PartiesSMITHKLINE BEECHAM CORP. and Beecham Group, P.L.C., Plaintiffs, v. APOTEX CORP., Apotex, Inc., and TorPharm, Inc., Defendants.
CourtU.S. District Court — Northern District of Illinois

John W. Treece, Richard J. O'Brien, Sidley Austin Brown & Wood, Chicago, IL, for Beecham Group, p.l.c.

Ford F. Farabow, Richard Racine, Howard W. Levine, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, for SmithKline Beecham Corp.

Ford F. Farabow, Richard Racine, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, for Beecham Group.

Hugh L. Moore, Richard Philip Beem, Scott B. Feder, Keith D. Parr, Paul J. Molino, Willaim Anderw Rakoczy, Deanne M. Mazzochi, Lord, Bissell & Brook, Chicgo, IL, for Apotex Corp., Torphram, Inc., Apotex, Inc.

Robert F. Green, Leydig, Voit & Mayer, Ltd., Chicago, IL, for Pentech Pharmaceuticals, Inc.

OPINION

RICHARD A. POSNER, Circuit Judge.

I conducted a bench trial in this patent infringement case between February 5 and 21 of this year, by designation of the chief circuit judge pursuant to 28 U.S.C. § 291(b), and this opinion comprises the findings of fact and conclusions of law that Fed.R.Civ.P. 52(a) requires me to issue. The plaintiffs in their post-trial brief erroneously refer to "findings" that I made in the course of the trial. I made no findings during the trial; these are my findings. The Procedural Setting and Pretrial Rulings

The plaintiffs are two subsidiaries of Glaxo, the British manufacturer of pharmaceutical drugs. I shall refer to the two collectively as "SmithKline". The defendants are Apotex, Inc., a Canadian manufacturer of generic pharmaceuticals, and affiliates of it; I shall refer to the defendants collectively as "Apotex." Smith-Kline claims that Apotex is (more precisely, as I'll explain in due course, will be) infringing SmithKline's U.S. patent 4,721,723, or "723" as the parties refer to it, after its last three digits. The patent is on an antidepressant drug that SmithKline sells under the trade name Paxil. Paxil is now the leading brand of antidepressant drug, with annual sales of $3.2 billion worldwide, about two-thirds in the United States.

SmithKline argues not only that Apotex is an infringer but also that the infringement is willful, entitling SmithKline to additional relief, namely an award of attorneys' fees. Apotex contends that the patent (more precisely, the claim in the patent that covers the composition of the drug, as distinct from claims concerning processes for making the drug) is invalid but, if valid, not infringed, and if valid and infringed still not infringed willfully. I deferred consideration of the issue of willfulness to such time as I might hold the patent valid and infringed. Since I hold that the patent although valid is not infringed and further that even if it is valid and infringed SmithKline is entitled to no relief, I do not reach the issue of willfulness. Should the case be remanded to me, I would have to conduct a further evidentiary hearing in order to resolve that issue.

Judge (now Chief Judge) Kocoras of the Northern District of Illinois, to whom the case was initially assigned when it was filed back in 1998, made a number of pretrial rulings, and I must consider the extent to which I am bound by them in accordance with the doctrine of law of the case. The doctrine requires a court to adhere to its previous rulings in the same litigation unless there is a compelling reason, such as an intervening change of law or newly discovered evidence, to reexamine them. Its usual application is to a case that is remanded by the court of appeals and then returns to that court by an appeal from the decision on remand. The doctrine counsels the court not to revisit the issues it decided on the first appeal, but it does not limit a trial judge's changes of mind during the course of a litigation uninterrupted by an appeal, and such changes of mind are of course frequent. When however the judges in a case are switched in midstream, as happened here, the successor judge may not reconsider his predecessor's rulings with the same freedom that he may reconsider his own rulings. "As this court [the Seventh Circuit] explained in Williams v. C.I.R., 1 F.3d 502 (7th Cir.1993), the law of the case doctrine in these circumstances reflects the rightful expectation of litigants that a change of judges midway through a case will not mean going back to square one. See also Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 816-17,108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). Although the second judge may alter previous rulings if he is convinced they are incorrect, `he is not free to do so ... merely because he has a different view of the law or facts from the first judge.' Williams, 1 F.3d at 503. Instead, the presumption is that earlier rulings will stand, even though it can be overcome for compelling reasons (such as new controlling law or clear error)." Best v. Shell Oil Co., 107 F.3d 544, 546 (7th Cir.1997); see also Peterson v. Lindner, 765 F.2d 698, 704 (7th Cir.1985); Fagan v. City of Vineland 22 F.3d 1283, 1290 (3d Cir.1994).

The reader may wonder at my citing Seventh Circuit rather than Federal Circuit cases on this point, since if my decision is appealed it will be appealed to the Federal Circuit. But that court applies the law of the circuit in which the district court is located to procedural matters that are not unique either to patent law or to appellate as distinct from trial procedure. See Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574-75 (Fed.Cir.1984) (per curiam); Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d 850, 858 (Fed.Cir.1991). The doctrine of law of the case is not unique in either sense and so its application here is governed by Seventh Circuit (and of course Supreme Court) precedent.

The parties asked me to reexamine several of Judge Kocoras's rulings, but only one met the criteria for reexamination, his order of July 16, 2002. That order excluded evidence that infringement of SmithKline's patent 723 would occur when Apotex's product combined with the fluids in a patient's stomach to create small amounts of the patented product, or perhaps even earlier when the patient opened the bottle of tablets and took out a pill, reexposing it as well as the remaining pills in the bottle to air and hence to moisture. The patient would be the infinger in either of those cases (assuming that there is any infringer in those cases, which I express no view on), but Smith-Kline argues that Apotex, knowing that infringement would occur, would be guilty of inducement to infringe. 35 U.S.C. § 271(b). As it pointed out in its motion to vacate the July 16 order, the Federal Circuit's decision in Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed.Cir. 2003), undercuts the ground of that order and so reexamination is warranted. But Warner-Lambert also makes clear that the burden of proving inducement is a heavy one, id. at 1363-64, and Smith-Kline's motion provided no ground for thinking that SmithKline could carry the burden. Even if a patient's gastrointestinal juices convert the nonpatented product that Apotex plans to manufacture to the product patented by SmithKline and Apotex knows this will happen, there is no evidence that Apotex intends, in the sense of desires or is working to achieve, this result. For the gastrointestinal "infringement" does nothing for Apotex commercially; it merely increases Apotex's exposure to liability. That is equally true if infringement is thought to occur when the bottle is opened. Apotex has tried to prevent conversion of its product to the patented form and a principal issue in this case is whether it has succeeded; there is no suggestion that Apotex desires conversion. I therefore denied the motion to vacate the July 16 order and I adhere to that ruling. But I add that, in light of the discussion of relief in the last part of this opinion, it is plain that if Apotex were guilty of inducement in the circumstances outlined above, SmithKline would not be entitled to any relief.

The Background of the Case

Early in 1977 a British company called Ferrosan obtained a U.S. patent ("196," also known as the Christensen patent) on a set of compounds that included what came to be called "paroxetine." The paroxetine molecule consists of carbon, nitrogen, oxygen, hydrogen, and fluorine atoms arranged in a particular configuration. When combined with additional atoms to form a salt molecule (a hydrochloride, for example, if paroxetine base is bathed in hydrochloric acid), and mixed with additional compounds (binders, lubricants, disintegrants, etc.-collectively, "excipients") to bulk up into a pill and to improve handling, tableting, and dissolution, paroxetine was believed, correctly as it turned out, to be effective in treating depression and related psychiatric disorders. Like fluoxetine-the active ingredient in Prozacparoxetine is a selective serotonin reuptake inhibitor, which helps to assure an adequate supply of the "feel good" enzyme serotinin to brain cells. Although mention of Prozac is a reminder that Paxil faces competition from other SSRIs (not to mention other types of antidepressant drug, and other modes of treatment altogether), there are medically significant differences, both in efficacy and side effects, even among the different SSRIs. Paxil, for example, is preferred to Prozac by many doctors for the treatment of depression coupled with anxiety (a common combination), because unlike Prozac it has been approved by the Food and Drug Administration for anxiety disorders.

Ferrosan was not a manufacturer of pharmaceutical drugs, so in 1980 it licensed its paroxetine patent to Smith-Kline. Although the patent specified paroxetine maleate as the paroxetine salt it was claiming, Ferrosan had already, after some travail, succeeded in creating a...

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