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Recent Cases
United States
Court of Appeals for the Federal Circuit
03-1061
VIRAJ
GROUP, LTD.,
Plaintiff,
v.
UNITED
STATES,
Defendant-Appellant,
and
CARPENTER TECHNOLOGY
CORPORATION, EMPIRE SPECIALTY STEEL, INC., and THE UNITED STEEL WORKERS OF AMERICA,
AFL-CIO/CLC,
Defendants.
Michael
D. Panzera, Attorney, Commercial Litigation Branch, Civil Division,
Department of Justice, of Washington, DC, argued
for defendant-appellant. On the
brief were David M. Cohen, Director; and Lucius B. Lau,
Assistant Director. Of counsel
on the brief were John D. McInerney, Chief Counsel for Import
Administration; Berniece A. Brown, Senior Counsel; and David W.
Richardson, Senior Attorney, Department of Commerce, of Washington, DC. Of counsel was Christine Sohar,
Attorney, Department of Commerce.
Appealed from: United
States Court of International Trade
Chief
Judge Gregory W. Carman
United States
Court of Appeals for the Federal Circuit
03-1061
VIRAJ
GROUP, LTD.,
Plaintiff,
v.
UNITED STATES,
Defendant-Appellant,
and
CARPENTER TECHNOLOGY CORPORATION, EMPIRE SPECIALTY
STEEL, INC.,
and THE UNITED STEEL WORKERS OF AMERICA,
AFL-CIO/CLC,
Defendants.
__________________________
DECIDED: September
9, 2003
__________________________
Before
LOURIE, SCHALL, and LINN, Circuit
Judges.
LOURIE,
Circuit Judge.
The
United States appeals
from the decision of the United States Court of International Trade
affirming the Department of Commerce’s third remand redetermination
of a dumping margin. Viraj
Group, Ltd. v. United
States, 217 F. Supp. 2d 1359 (Ct.
Int’l Trade 2002) (“Viraj IV”). Because we conclude that the court failed
to give priority to an express statutory provision, we reverse.
BACKGROUND
Viraj manufactures stainless steel
wire rod in India and
imports the same into the United
States. The United States Department of Commerce
initiated an antidumping investigation. It concluded that Viraj was dumping
that merchandise onto the United
States market at a margin of
11.88%, and that an antidumping duty rate of the same percentage should be
applied to Viraj’s imports.
Viraj Group, Ltd. v. United
States, 162 F. Supp. 2d 656, 658
(Ct. Int’l Trade 2001) (“Viraj I”). Commerce calculated that dumping
margin based upon the rupee-dollar exchange rate on November 3, 1997, the date
of a Viraj purchase order, which Commerce determined established the date
of sale. Id. at 660.
Viraj appealed to the Court of
International Trade, asserting, inter alia, that Commerce
inaccurately computed the dumping margin for its imports by failing to take
account of fluctuations in the rupee-dollar exchange rate. Id. at
661. More specifically, Viraj
contended that, because the rupee had devalued over 10% in relation to the
dollar over the period of the investigation after November 3, 1997,
Commerce’s selection of an earlier exchange rate distorted the
dumping margin. Id. According to Viraj, Commerce’s
computation was entirely due to its erroneous choice of an exchange
rate. Id.
The court was not satisfied with
Commerce’s choice of an exchange rate date. While “not disput[ing] that
Commerce adhered to its regulatory and statutory obligations to utilize the
exchange rate in effect on the date of sale,” id., the court
stated that “[m]ere compliance with regulations cannot trump what
appears to be an absurd result,” id. at 662. The court held that “Commerce
is under a duty to determine dumping rates as accurately as possible”
and, according to the court, it was not clear whether Commerce had done
so. Id. at
662-63. Accordingly, the court
held that Commerce’s failure to justify its choice of an exchange
rate was contrary to law, and it remanded for Commerce to provide either a
justification for its choice or a recalculation of the dumping margin. Id. at
663-64.
On remand, Commerce explained its reasons for
believing that its choice of exchange rates, besides being statutorily
required, resulted in an accurate dumping margin. Viraj Group, Ltd. v. United
States, 193 F. Supp. 2d 1331, 1334
(Ct. Int’l Trade 2002) (“Viraj II”). Viraj again appealed, and the court
found that Commerce’s explanation was inadequate and again
remanded. Id.
at 1339. Commerce filed in the
court a second remand redetermination further supporting its original
determination; the court again found it unsatisfactory and remanded yet
again. Viraj Group, Ltd. v. United
States, 206 F. Supp. 2d 1340, 1344
(Ct. Int’l Trade 2002) (“Viraj III”).
In its third remand redetermination, Commerce
acquiesced and recalculated the dumping margin utilizing the exchange rate
on the date of payment, not the November
3, 1997 date of sale.
The new result was a dumping rate of zero for Viraj. However, Commerce noted that the
methodology forced upon it by the court did not improve accuracy and that
it in fact distorted the dumping determination. Finally, Commerce complained that
the court-ordered methodology was “inconsistent with the
statute.” The court
affirmed while not endorsing Commerce’s reasoning. Viraj IV at 1361.
The government timely appealed to this court, and our
jurisdiction is based on 28 U.S.C. § 1295(a)(5).
DISCUSSION
On
appeal, the government argues that its attempt to utilize the sale-date
exchange rate complied with 19 U.S.C. § 1677b-1 and 19 C.F.R. §
351.415, and that substantial evidence supports its finding that none of
the exceptions to those provisions is applicable. The government further contends that
the goal of achieving an accurate dumping margin is general and hortatory
and does not displace Congress’s specific command to use a sale-date
exchange rate. Even if Commerce
could ignore the language of the statute in order to achieve a more
accurate dumping margin, according to the government, using the sale-date
exchange rate achieves that goal, whereas the Court of International
Trade’s methodology based on post-sales events is distortive.
Viraj
did not file a responsive brief and has not participated in this appeal.
A preliminary issue is whether this
case presents a case or controversy that we can adjudicate. The Constitution establishes that
“[t]he judicial power shall extend to cases . . . [or] controversies
. . . .” U.S. Const.
art. III, § 2, cl. 1. That
clause has been interpreted as a prohibition against federal courts’
rendering decisions in cases in which the parties bringing the case lack
standing. See Pandrol
USA, LP v.
Airboss Ry. Prods., Inc., 320 F.3d 1354, 1367 (Fed. Cir.
2003) (citing Lewis v. Casey, 518 U.S. 343, 349 n.1 (1996)). We pause to consider whether this is
such a case, even though no party has raised the issue. Id. (citing Nat’l
Org. of Women, Inc. v. Scheidler, 510 U.S. 249, 255 (1994)
(“[T]he court sua sponte can raise the issue of standing for the
first time at any stage of the litigation, including on appeal.”)); see
also Arizonans for Official English v. Arizona, 520 U.S. 43,
64 (1997) (holding that the standing requirement must be satisfied by
persons seeking appellate review). We do so because this appeal
comes to us in a strange posture:
The government has appealed from the court’s decision affirming
the government agency’s determination; in other words, the winner
has appealed because its determination was affirmed by the trial court only
on the basis of reasoning with which it disagrees.
When questioned at oral argument
whether it has standing to appeal as the prevailing party, the government
responded that it could not have appealed from one of the court’s
earlier decisions because the court’s judgments in those earlier
decisions were remands, which are nonappealable. The government’s premise is
correct in that the general rule is that decisions by a court remanding a
matter to an agency are nonfinal and not appealable to a reviewing
court. Cabot Corp. v. United
States, 788 F.2d 1539, 1542 (Fed. Cir. 1986). However, there are certain
exceptions to the general rule, and the question remains whether the
government, under one of those exceptions, should have appealed from one of
the court’s earlier decisions, and whether its failure to do so
deprives it of standing in this appeal.
One of the exceptions to the
finality requirement is the collateral order doctrine, which permits an
appeal from a nonfinal decision that conclusively adjudicates an issue
completely separate from the merits, if that issue would be effectively
unreviewable after a later final judgment. Travelstead v. Derwinski, 978
F.2d 1244, 1247 n.7 (Fed. Cir. 1992) (citing Cohen v. Beneficial Indus.
Loan Corp., 337 U.S. 541, 546 (1949)). Another exception more specific to
judicial review of agency determinations is one in which (1) a
court’s remand decision makes an important legal determination, such
as a statutory interpretation, and (2) the agency could not appeal after
following the remand instructions, thereby making the legal question
effectively unreviewable. See
id. at 1248, 1249 (citing Sullivan v. Finkelstein, 496 U.S.
617 (1990)).
In this case, the collateral order
exception was not applicable because the issue of which exchange rate to
utilize in the calculation of Viraj’s dumping margin was not
collateral to the case. On the
contrary, that issue was the central issue in the case at the time of the
Court of International Trade’s earlier decisions (Viraj I
through Viraj III).
However, the Finkelstein exception was arguably applicable,
as both of its requirements were arguably satisfied. First, the court’s holdings in
Viraj I, Viraj II, and Viraj III that accuracy in
dumping margin determinations is a goal that can override a specific
statute directing Commerce to use a specific exchange rate is an important
legal determination at least akin to statutory interpretation. Second, after eventually following
the court’s remand instructions in Viraj I, Viraj II,
and Viraj III, the government has found itself as the prevailing
party, with questionable standing now to seek our review.
The fact that the government
perhaps could have appealed from one of the court’s earlier decisions
creates a circular dilemma. To
hold that the government could have appealed sooner, we must necessarily
find that it cannot bring this appeal; and to hold that it cannot bring
this appeal, we must find that it could have appealed sooner. Rather than bootstrap our reasoning
to reach those two conclusions, we believe that the better course is to
hold that the government has sufficient standing to bring this appeal. Even though technically the
prevailing party under the Court of International Trade’s final
decision (Viraj IV), the government prevailed only because it
acquiesced and abandoned its original position, which it had zealously
advocated, and adopted under protest a contrary position forced upon it by
the court. Thus, in substance,
the government is truly the non-prevailing party in this case. To hold otherwise would exalt form
over substance. We therefore
are satisfied that this appeal presents a case or controversy that we can
address on the merits. See
British Steel PLC v. United States, 127 F.3d 1471, 1473 n.1 (Fed.
Cir. 1997) (holding that the United States had standing to appeal from a
decision sustaining Commerce’s remand determination because such an
appeal was the government’s only opportunity to challenge an earlier
adverse decision in which the Court of International Trade remanded
Commerce’s final determination).
On the merits, the issue is whether
Commerce utilized the correct exchange rate when it utilized the rate on
the payment date, albeit under judicial instruction, rather than the sale
date. We conclude that Commerce
acted unlawfully when it did so.
Both a statute and a regulation provide specifically and clearly
that, with exceptions not relevant to this case, Commerce is to utilize an
exchange rate on the date of sale.
Section 1677b-1 of Title 19 provides in pertinent part that
“[i]n an antidumping proceeding under this subtitle, the
administering authority shall convert foreign currencies into United States
dollars using the exchange rate in effect on the date of sale of the
subject merchandise . . . .”
19 U.S.C. § 1677b-1 (2000) (emphasis added). Commerce has interpreted that
statute to mean exactly what it says when it adopted section 351.415 of
Title 19 of the Code of Federal Regulations, which similarly states in
pertinent part that “[i]n an antidumping proceeding, the Secretary
will convert foreign currencies into United States dollars using the rate
of exchange on the date of sale of the subject merchandise.” 19 C.F.R. § 351.415 (2003)
(emphasis added).
That Congress intended Commerce to
utilize the sale date for currency conversions is unquestionable in the
face of an unambiguous and specific statute providing exactly that. We therefore need not accord any deference
to Commerce’s interpretation.
Even if we were to accord Commerce deference pursuant to Chevron, we certainly would
hold that its interpretation of the statute as requiring currency
conversion using the sale-date exchange rate was reasonable.
We disagree with the Court of
International Trade’s view that concern over the accuracy of the
dumping margin determination compels Commerce to ignore the mandate of 19
U.S.C. § 1677b-1. The
court cited no statute that sets forth the goal that dumping margins be
determined with accuracy. While
the court did cite one of our decisions stating that accuracy is a goal
when determining dumping margins, Viraj I at 662 (citing NTN
Bearing Corp. v. United States, 74 F.3d 1204, 1208 (Fed. Cir. 1995)),
that statement is properly understood as expressing a goal within the
confines of the statutes, not in derogation of a statutory provision. And while the court also cited a
statement of administrative action accompanying the Uruguay Round
Agreements Act, id. at 662-63, as expressing the goal that
“the process of currency conversion . . . not distort dumping
margins,” that goal is merely hortatory, and, as such, cannot
displace Congress’s clear and specific command, as expressed in 19
U.S.C. § 1677b, to convert foreign currencies to dollars using the
exchange rate on the sale date.
See Ad Hoc Comm. of Az-NM-Tx-Fl Producers of Gray Portland
Cement v. United States, 13 F.3d 398, 402-03 (Fed. Cir. 1994) (holding
that accuracy concerns cannot trump a specific statutory provision). We therefore need not decide whether
Commerce or the court was correct in believing that its choice of exchange
rate produces the most accurate result. Even if we were to agree with the
court on that point, it is not a ground for Commerce to act contrary to 19
U.S.C. § 1677b-1.
CONCLUSION
Because
the court’s decision was premised on a failure to give controlling
effect to 19 U.S.C. § 1677b-1 in the dumping margin determination in
this case, we
REVERSE.
COSTS
No
costs.
United
States Court of Appeals for the Federal Circuit
2006-1261
PFIZER, INC., Plaintiff-Appellee, v. APOTEX, INC. (formerly known as
TorPharm, Inc.)
Defendant-Appellant.
Richard G. Greco, Kay Scholer LLP, of New York, New York, argued for
plaintiff-appellee. With him on the brief were Milton Sherman, Betty A.
Ryberg, and Regina O. Kent. Robert B. Breisblatt, Welsh & Katz, Ltd.,
of Chicago, Illinois, argued for defendant-appellant. With him on the brief
were A. Sidney Katz, Steven E. Feldman, and Philip D. Segrest, Jr. Appealed
from: United States District Court for the Northern District of Illinois
Chief Judge James M. Rosenbaum
United
States Court of Appeals for the Federal Circuit 2006-1261 PFIZER, INC.,
Plaintiff-Appellee, v. APOTEX, INC. (formerly known as TorPharm, Inc.)
Defendant-Appellant. __________________________ DECIDED: March 22, 2007
__________________________ Before MICHEL, Chief Judge, MAYER, and LINN,
Circuit Judges. Opinion for the court filed by Chief Judge MICHEL. Circuit
Judge LINN concurs in the result. MICHEL, Chief Judge. Pfizer Inc. filed
suit against Apotex, Inc. (formerly known as TorPharm, Inc.) in the United
States District Court for the Northern District of Illinois on July 30,
2003, alleging that, pursuant to 21 U.S.C. § 355(j)(5)(B)(iii),
Apotex’s filing with the United States Food and Drug Administration
(“FDA”) of its Abbreviated New Drug Application
(“ANDA”) No. 76-719 seeking approval to commercially sell
amlodipine besylate tablets (2.5 mg, 5 mg, and 10 mg strengths) before the
expiration of the term of U.S. Patent No. 4,879,303 (“the ’303
patent”) to Pfizer, infringed claims 1-3 of the ’303 patent.
The ANDA product sought to be approved by Apotex is a generic version of
Pfizer’s
amlodipine
besylate drug product, which is commercially sold in tablet form in the
United States under the trademark Norvasc®. Norvasc® is approved by
the FDA for treating hypertension and chronic stable and vasospastic
angina. The ’303 patent, entitled “Pharmaceutically Acceptable
Salts,” is listed in the FDA’s Approved Drug Products with
Therapeutic Equivalence Evaluations (“Orange Book”) with
respect to the Norvasc® drug product in accordance with 21 U.S.C.
§ 355(b)(1). Apotex certified in ANDA No. 76-719 that it believed the
’303 patent was invalid and unenforceable, and sought approval to
market and sell its amlodipine besylate tablets before September 25, 2007
(i.e., the expiration date of the ’303 patent plus an additional six
months of pediatric exclusivity) pursuant to 21 C.F.R. §
314.94(a)(12)(i)(A)(4). In its answer to Pfizer’s complaint, Apotex
denied infringement and counterclaimed for declaratory judgments that the
claims of the ’303 patent are invalid for anticipation and
obviousness, and that the ’303 patent is unenforceable due to
Pfizer’s alleged inequitable conduct before the United States Patent
and Trademark Office (“USPTO”). Prior to trial, however, Apotex
stipulated that its ANDA product contains each limitation of claims 1-3 of
the ’303 patent, and that if the ’303 patent were upheld as
valid and enforceable, its ANDA product would literally infringe those
claims. Following a bench trial, the district court entered a final
judgment on January 29, 2006 for Pfizer and against Apotex on
Apotex’s request for declaratory judgments that the claims of the
’303 patent are invalid or unenforceable. Based on the stipulation,
the trial court found infringement. The district court then ordered that
the effective date of any approval of Apotex’s ANDA No. 76-719 shall
not be earlier than September 25, 2007, and enjoined Apotex from making,
using, offering to sell, selling, or importing into
2006-1261
2
the United
States any product comprising amlodipine besylate covered by (or the use of
which is covered by) the claims of the ’303 patent until September
25, 2007. Pfizer Inc. v. Apotex, Inc., No. 03C 5289 (N.D. Ill. Jan. 29,
2006). Pfizer dismissed its claim of willful infringement against Apotex by
a Stipulation and Order dated January 23, 2006. Apotex now appeals from the
district court’s final judgment, challenging the rulings as to
validity and enforceability. Because the district court erred in holding that
the subject matter of claims 1-3 of the ’303 patent would not have
been obvious, we reverse. We therefore do not address Apotex’s
assertion that it had proven that Pfizer engaged in inequitable conduct
before the USPTO during prosecution of the ’303 patent. I. BACKGROUND
A. Norvasc® contains amlodipine besylate. The active ingredient found
in Norvasc® is
2-[(2-aminoethoxy)methyl]-4-(2-chlorophenyl)-3-ethoxycarbonyl-5-methoxycarbonyl-6-methyl-1,4-dihydropyridine,
commonly referred to as amlodipine. Amlodipine is a member of a class of
compounds referred to as dihydropyridines. Active drug molecules, such as
amlodipine, are frequently made into pharmaceutically-acceptable acid
addition salts to improve their bioavailability. Amlodipine besylate1 is an
acid addition salt form of amlodipine, formed from the reaction of
amlodipine, a weak base, and benzene sulphonic acid. Pfizer’s
Discovery Chemistry group, located in Sandwich, England, invented
amlodipine and discovered its anti-hypertensive and anti-ischemic pharmacological
1 Besylate is referred to in the art interchangeably as benzene sulphonate,
benzenesulphonate, or benzene sulfonate.
2006-1261
3
properties
prior to 1982. Pfizer filed a patent application in the United Kingdom on
March 11, 1982 specifically claiming amlodipine. A U.S. counterpart
application claiming priority from the U.K. application issued as U.S.
Patent No. 4,572,909 (“the ’909 patent”) on February 25,
1986.2 The ’909 patent claims certain dihydropyridine compounds and
their pharmaceutically-acceptable acid addition salts. The ’909
patent discloses that the pharmaceutically-acceptable acid addition salts
of amlodipine “are those formed from acids which form non-toxic acid
addition salts containing pharmaceutically acceptable anions, such as hydrochloride,
hydrobromide, sulphate, phosphate or acid phosphate, acetate, maleate,
fumarate, lactate, tartrate, citrate and gluconate salts,” and that
the preferred salt is maleate.3 ’909 patent col.2 ll.3-10. Meanwhile,
on or about July 14, 1982, the Discovery Chemistry group recommended that
amlodipine be developed as a commercial drug product. By this time, Pfizer
had made several acid addition salts of amlodipine, including the maleate,
fumarate, salicylate, hydrochloride, and methane sulphonate forms. The
Discovery Chemistry group designated amlodipine maleate as the drug
substance for development. 2 The ’909 patent was subject to an appeal
before this court in Pfizer Inc. v. Dr. Reddy’s Labs., Ltd., 359 F.3d
1361 (Fed. Cir. 2004). There, this court held that the term of the
’909 patent as extended under the patent term restoration provision
of the Hatch-Waxman Act covers amlodipine and any salt or ester as claimed
in claims 1, 7, and 8. Id. at 1367. 3 We recognize that hydrochloride and
hydrobromide are not technically anions. However, since the patentee chose
to be his own lexicographer, we will refer to these two acids as anions for
purposes of this opinion. Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed.
Cir. 2005) (en banc). 2006-1261 4
On or
about August 11, 1982, the project of formulating a commercial drug product
was assigned to Dr. James Wells, a manager in Pfizer’s Pharmaceutical
Research and Development Department, who was assisted by Mr. Edward
Davison, a member of the same group. By April 24, 1984, Dr. Wells
identified a formulation for amlodipine maleate that produced
“excellent capsules.” In attempting to produce a direct
compression tablet product of an amlodipine maleate formulation, however,
Dr. Wells encountered two problems: (1) chemical instability of the
amlodipine maleate, and (2) stickiness of the tablet blend of amlodipine
maleate. Chemical stability refers to the resistance of a drug compound to
chemical breakdown, while stickiness refers to the adherence of the drug
substance, in formulation, to manufacturing equipment, such as the punch
faces of a tablet-making press. To solve the problems of the tablet form of
amlodipine maleate, Dr. Wells suggested that other amlodipine salts be made
and tested. In a memo dated April 24, 1984, Dr. Wells acknowledged the
difficulty in stickiness and stability he was experiencing in attempting to
make a tablet formulation of amlodipine maleate and stated that, by
changing from the maleate salt to the free base of amlodipine or another
acid addition salt, “many of the stability problems would
disappear.” Dr. Wells identified six alternative anions, i.e.,
hydrochloride, methane sulphonate, benzene sulphonate, lactate, succinate,
and acetate, as potential anions with which to create acid addition salt forms
of amlodipine. He also eventually added the tosylate anion to this group.
Dr. Wells testified at trial that he selected these candidates based on
their differing structures and properties, but could not explain why three
of the seven alternative anions were members of the same class of sulphonic
acids.
2006-1261
5
Mr.
Davison testified at trial that he tested these amlodipine acid addition
salt forms as well as amlodipine maleate and the free base for solubility,
pH, hygroscopicity, and stickiness. Another researcher, Dr. Robin Platt, an
analytical chemist at Sandwich, was brought in to test the stability of the
amlodipine acid addition salts. Dr. Platt subjected the maleate, acetate,
succinate, besylate, mesylate, and eventually the tosylate, salicylate, and
hydrochloride salt forms of amlodipine to thin-layer chromatography to
determine the number and amount of degradants found in the various
amlodipine salts, and compiled a ranking thereof based upon the stability
of each salt formulation. Dr. Platt’s findings were communicated to
Dr. Wells via memorandum on or about October 9, 1984, wherein Dr. Platt
reported that the besylate salt “showed a much improved stability
profile over the maleate in all cases.” On October 11, 1984, Dr.
Wells recommended via memorandum to Dr. J.R. Davidson, a deputy of
Pfizer’s Pharmaceutical Research and Development Department, that the
amlodipine maleate salt be replaced with amlodipine besylate for the
commercial amlodipine tablet product based on Dr. Platt’s memo and
Mr. Davison’s test results. By April 30, 1985, both amlodipine
maleate and amlodipine besylate were undergoing human testing in clinical
trials. Pfizer scientists predicted that the capsule form of amlodipine
maleate would have a shelf life of three years, but that “poor
stability of amlodipine maleate tablet formulations” precluded
commercialization. On the other hand, the scientists noted that amlodipine
besylate tablet formulations exhibited “clear superiority” in
their processing characteristics, particularly non-stickiness, and in
stability. Capsule formulations of amlodipine besylate had not yet been
produced, but 2006-1261 6
work on
this project was “expected to be straightforward.” On April 4,
1986, Pfizer filed a patent application to amlodipine besylate in the U.K.,
which eventually issued as U.K. Patent No. 160833. On May 5, 1986, Pfizer
submitted a supplement to the FDA stating that the dosage form anticipated
for commercial use would be a tablet of amlodipine besylate and that all
future clinical trials with amlodipine would use this new formulation. In
the supplement, Pfizer stated, “We feel that the change in salt form
is justified since benzenesulfonate is a commercially acceptable salt, as
exemplified by the tranquilizer mesoridazine (Serentil).” In support
of the use of the besylate salt form of amlodipine, Pfizer submitted a
summary of the acute oral toxicity of amlodipine besylate and amlodipine
maleate in rats and a comparison of the effects of both the besylate and
maleate forms on blood pressure and heart rate of dogs. Pfizer stated that
the results showed that there was no quantitative difference in efficacy
between equivalent doses of amlodipine besylate tablets or capsules and
amlodipine maleate capsules. In addition, Pfizer submitted a pharmacokinetic
report and interim clinical summary showing that amlodipine besylate
tablets and amlodipine maleate capsules were bioequivalent and had
comparable safety and toleration when administered to healthy human
volunteers. On March 25, 1987, Pfizer filed a U.S. application (serial no.
07/030,658) to amlodipine besylate claiming priority from the U.K.
application. During prosecution, the examiner initially rejected all claims
of the application as obvious over the ’909 patent in view of U.S. Patent
4,032,637 to Spiegel (1977) (“Spiegel”) and U.S. Patent
3,816,612 to Schmidt (1974) (“Schmidt”). The examiner noted
that Schmidt discloses that aryl sulphonic acid salts, which include
besylate, are superior to the preferred maleate of the
2006-1261
7
’909
patent, while Spiegel provides an example of a pharmaceutical compound
wherein the besylate form is specifically identified as the preferred
embodiment. In response to the rejection, Pfizer argued that the besylate
salt, while not the most soluble salt, has many other advantages not
possessed by other acid addition salts . . . . [I]n addition to having good
solubility, [the besylate salt] is unique in imparting to the product good
stability, nonhygroscopicity and good processability. For one salt to have
all of these outstanding features is not suggested or taught in the art,
and would require extensive experimentation to find. The examiner, however,
maintained the rejection, stating that “these qualities are basic
considerations by a person skilled in the art for selecting a suitable
pharmaceutical salt” as evidenced by Berge, “Pharmaceutical
Salts,” J. Pharm. Sci., 66(1):1-19 (Jan. 1977) (“Berge”).
Table 1 of Berge shows 53 FDA-approved, commercially marketed anions,
including benzene sulphonate, that are useful for making
pharmaceutically-acceptable salts, and lists the relative frequency of
which each was used as a percentage based on the total number of anions or
cations in use through 1974. Berge discloses that benzene sulphonate had a
frequency of use of 0.25%. In response to a final obviousness rejection by
the Examiner, Pfizer filed a continuation application (serial no.
07/256,938) and abandoned the original application. Along with the
continuation application, Pfizer submitted a preliminary amendment and
statement, and a declaration under 37 C.F.R. § 1.132 by Dr. Wells
dated October 3, 1988 (“Wells Declaration”). In the statement,
Pfizer argued that the Wells Declaration demonstrated that the besylate
salt of amlodipine possessed “all the desired characteristics
necessary for a medicinal agent” and that it would not have been
obvious “that only the besylate salt of amlodipine would have all the
necessary properties for a commercial product.” Pfizer argued that
choosing an appropriate salt is 2006-1261 8
a very
difficult task “since each salt imparts unique properties to the
parent compound” and that one skilled in the art would
“conclude that the besylate salt of amlodipine is a unique compound
and not an obvious one.” The Wells Declaration stated that the
besylate salt of amlodipine was “found to possess a highly desirable
combination of physicochemical properties,” including good
solubility, stability, non-hygroscopicity, and processability, which
properties are “unpredictable both individually and collectively.”
The continuation application was allowed and issued as the ’303
patent on November 7, 1989. The first three claims of the ’303 patent
are reproduced here: 1. The besylate salt of amlodipine. 2. A
pharmaceutical composition comprising an antihypertensive, antiischaemic or
angina-alleviating effective amount of the besylate salt of amlodipine as
claimed in claim 1 together with a pharmaceutically-acceptable diluent or
carrier. 3. A tablet formulation comprising an anti-hypertensive,
antiischaemic or angina-alleviating effective amount of the besylate salt
of amlodipine as claimed in claim 1 in admixture with excipients.
Norvasc® was launched as a commercial product by Pfizer in the U.S. in
November 1992. B. From January 11, 2006, to January 18, 2006, the district
court conducted a bench trial on the issues of (1) whether the claims of
the ’303 patent were anticipated by the disclosure of the ’909
patent, (2) whether the ’303 patent was invalid for obviousness, and
(3) whether the claims of the ’303 patent were unenforceable due to
inequitable conduct before the USPTO. On January 18, 2006, the district
court stated its findings and conclusions pursuant to Fed. R. Civ. P. 52(a)
orally in open court. Bench Order Tr. 1-28, January 18, 2006. The district court
concluded that Apotex failed 2006-1261 9
to meet
its burden of proving invalidity or inequitable conduct by clear and
convincing evidence. The district court first addressed the issue of
invalidity by anticipation, finding that while the ’909 patent claims
a genus of pharmaceutically-acceptable salts of amlodipine that encompasses
amlodipine besylate, the ’909 patent does not as a matter of law
disclose it. The district court held that since the ’909 patent does
not list the species of a salt made from benzene sulphonate, it does not
anticipate the claims of the ’303 patent. With regard to obviousness,
the district court rejected Apotex’s argument that the ’909
patent in view of the Berge article (and other prior art) rendered the invention
of the claims of the ’303 patent obvious. The district court first
found that a person of ordinary skill in the art would have a
bachelor’s degree in pharmaceutical science or analytical chemistry,
and some experience in drugs and drug preparation. The district court concluded
that the Berge article does not direct the skilled artisan to create the
besylate salt of amlodipine because Berge discloses that benzene sulphonate
was used only at a frequency of 0.25%, or 1 out of every 400 drugs, prior
to 1974. The district court noted that the examiner must have considered
the Berge article since it was cited in the ’303 patent, yet the
examiner ultimately determined that the claims of the ’303 patent
were not obvious in view of this reference.4 Further, the district court
stated that there would 4 The trial transcript reads, “The patent
examiner cannot [sic] have been aware of the Berge article as it was
specifically noted and cited in the ’303 patent itself. As such, the
Court could not possibly find by clear and convincing evidence that the
article and its teachings could not have been considered by the patent
[sic] when ultimately determining whether the ’303 patent was obvious
. . . .” Bench Order Tr. 22:16-22. We interpret this passage in the
only way that makes sense—that the
2006-1261
10
be no
expectation of success in making a besylate salt of amlodipine because, as
Berge teaches and expert testimony on both sides accepted, “There is
no reliable way of predicting the influence of a particular salt species on
the behavior of a parent compound.” Bench Order Tr. 23:3-6. The
district court also stated that the besylate salt of amlodipine was
unexpectedly superior to the amlodipine salts of the prior art.
Specifically, the district court stated that, while amlodipine besylate was
not superior to amlodipine maleate “in every category,” it
nonetheless “clearly and unexpectedly illustrates a superior
combination of properties when compared to what was suggested in the
preferred preparation”—ostensibly the amlodipine maleate
disclosed as the preferred embodiment of the ’909 patent. These
properties included good solubility, stability, non-hygroscopicity, and
processability (non-stickiness). The district court found that amlodipine
besylate exhibited at least a solubility exceeding 1.0 mg/ml, which the
court stated is the desirable solubility factor for a commercial product,
and that the ’303 patent listed the besylate salt form of amlodipine
as the most stable salt form out of eight salts tested, with the maleate
salt form being sixth on the list. The district court also rejected
Apotex’s argument that amlodipine besylate is actually hygroscopic
rather than non-hygroscopic as disclosed in the ’303 patent. Apotex
asserted that amlodipine besylate attracts water because it (1) can exist
as a hydrate, (2) may have water within its crystalline structure, and (3)
can have water on its surface at extended temperatures and humidity. The
district court stated that while each of these facts is true, each was
entirely unenlightening because hygroscopicity per Examiner did consider
the Berge reference during prosecution. While oral bench rulings are
certainly authorized, they may be ill-advised in a case of this complexity.
2006-1261
11
se was not
a critical factor. Instead, the district court emphasized that the maleate
salt of amlodipine underwent a Michael addition reaction when exposed to
water, creating at least ten degradation products making amlodipine maleate
unsuitable at least in tablet form for medicinal purposes, whereas the
amlodipine besylate did not undergo the same reaction. Lastly, the district
court found that Pfizer conducted extensive tests for processability of the
amlodipine besylate by manufacturing tablets on conventional tablet-making
machinery and measuring the amount of product sticking to the punch face
after each manufacturing run. The district court concluded that the tests
showed that amlodipine besylate was sufficiently non-sticky so as to be
commercially processable and less sticky than the maleate form. Besides
evidence of superiority provided in the ’303 patent itself, the
district court pointed to another “objective consideration” in
determining that amlodipine besylate was not obvious over the prior art:
“Pfizer would not have changed from the maleate, into which it had
invested both time and research dollars, to seek out a very strange and
rare besylate salt, absent an extremely good reason.” Bench Order Tr.
23:16-21. For all these reasons, the district court held that the claims of
the ’303 patent were not proven invalid for obviousness. Next, the
district court rejected Apotex’s claim that Pfizer engaged in
inequitable conduct before the USPTO in violation of its duty of candor and
37 C.F.R § 1.56. Apotex argued that Pfizer made several material
misrepresentations to the USPTO during prosecution of the application
leading to the ’303 patent, including misrepresenting the solubility,
stability, and hygroscopicity of amlodipine besylate and misrepresenting
the number of tablets tested for processability both in the patent 2006-1261
12
application
and in the Wells Declaration. Specifically, Apotex asserted that Pfizer (1)
fraudulently identified the solubility of amlodipine besylate in its
application for patent as 4.6 mg/ml where internal Pfizer documents show
the solubility to actually be 3.5 mg/ml; (2) fraudulently claimed in the
application to have tested over a thousand tablets for stickiness where
internal Pfizer documents show varying numbers up to only 150 tablets were
actually tested; and (3) fraudulently ranked the respective stabilities of
the various salt forms of amlodipine in an ordinal—rather than
quantitative—fashion so as to conceal from the USPTO that the
stability differences between the besylate, tosylate, and mesylate salt
forms of amlodipine were actually very minor. The district court first
determined that none of these alleged misrepresentations were either
material or false. In this regard, the court stated that whether the
solubility of amlodipine besylate is 4.6 mg/ml as identified in the
’303 patent or 3.5 mg/ml as identified in internal Pfizer documents
was at most a minor discrepancy given that any solubility over the critical
1.0 mg/ml level was sufficient solubility to meet the standards of a drug
company seeking to produce a commercial drug. As for stability, the
district court found that amlodipine besylate was far more stable than
amlodipine maleate, which as described above undergoes the undesirable
Michael addition reaction. Second, the district court held that Apotex
failed to show intent to deceive by clear and convincing evidence. Indeed,
the court found “precious little evidence at all” showing an
intent to deceive, stating that “[w]hile it is clear that Pfizer was
eager to extend the patent life of its amlodipine compound, such a desire
does not rise to the level of fraudulent conduct.” Bench Order Tr.
25:24-26:1.
2006-1261
13
On January
29, 2006, the district court entered a final judgment in favor of Pfizer
and against Apotex on Pfizer’s claim of infringement as well as on
Apotex’s counterclaims alleging and seeking declarations of
invalidity and unenforceability of the ’303 patent. The district
court also ordered that, pursuant to 35 U.S.C. § 271(e)(4)(A), the
effective date of any approval of Apotex’s ANDA No. 76-719 shall not
be earlier than September 25, 2007, and pursuant to 35 U.S.C. §
271(e)(4)(B), enjoined Apotex, its officers, agents, servants, employees
and attorneys, and those persons in active concert or participation with
it, from engaging in the manufacture, use, offer for sale, or sale within
the U.S., or importation into the U.S. of any product comprising amlodipine
besylate covered by, or the use of which is covered by, the claims of the
’303 patent until September 25, 2007. Pfizer Inc. v. Apotex, Inc.,
No. 03C 5289 (N.D. Ill. Jan. 29, 2006). On February 17, 2006, Apotex filed
a timely notice of appeal. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1). II. DISCUSSION A. Apotex appeals the district
court’s final judgment that it failed to prove by clear and
convincing evidence that the invention of claims 1-3 of the ’303
patent would have been obvious and are therefore invalid, and the district
court’s finding that Apotex failed to prove Pfizer committed
inequitable conduct before the USPTO. Because the district court erred in
holding non-obvious the invention of claims 1-3 of the ’303 patent,
we reverse the district court’s judgment. Since we hold that claims
1-3 are invalid for obviousness, we need not and do not address
Apotex’s assertion that Pfizer engaged in inequitable conduct before
the USPTO during prosecution of the ’303 patent.
2006-1261
14
On appeal
from a bench trial, this court reviews the trial court’s conclusions
of law de novo and findings of fact for clear error. Golden Blount, Inc. v.
Robert H. Peterson Co., 365 F.3d 1054, 1058 (Fed. Cir. 2004). The ultimate
conclusion of whether a claimed invention would have been obvious is a
question of law reviewed de novo based on underlying findings of fact
reviewed for clear error. Richardson-Vicks Inc. v. Upjohn Co., 122 F.3d
1476, 1479 (Fed. Cir. 1997). A factual finding is clearly erroneous if,
despite some supporting evidence, “the reviewing court on the entire
evidence is left with the definite and firm conviction that a mistake has
been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395
(1948). B. The district court held that Apotex had established a prima
facie case of obviousness because the patent examiner initially rejected
the claims to amlodipine besylate for obviousness. Specifically, the
district court stated, “The ’303 patent’s file wrapper
shows that the examiner originally rejected the claimed invention because
of obviousness. Under these circumstances, of course, the Court must accept
that the defendant has made a prima facie showing on this question.”
Bench Order Tr. 21:20-24. The district court’s ruling must be
rejected, not only because it is legally incorrect, but also because it may
reflect a serious misconception regarding the proper burden of proof each
party bears in a patent litigation. Our case law consistently provides that
a court is never bound by an examiner’s finding in an ex parte patent
application proceeding. Fromson v. Advance Offset Plate, Inc., 755 F.2d
1549, 1555 (Fed. Cir. 1985). Thus, it can never be the case that an examiner’s
interim finding of prima facie obviousness renders the claims of an issued
2006-1261
15
patent
prima facie obvious. Instead, deference to the decisions of the USPTO takes
the form of the presumption of validity under 35 U.S.C. § 282. Purdue
Pharma L.P. v. Faulding Inc., 230 F.3d 1320, 1329 (Fed. Cir. 2000). That
is, by statute a patent is valid upon issuance, 35 U.S.C. § 282, and
included within the presumption of validity is a presumption of
non-obviousness. Structural Rubber Prods. Co. v. Park Rubber Co., 749 F.2d
707, 714 (Fed. Cir. 1984). Since we must presume a patent valid, the patent
challenger bears the burden of proving the factual elements of invalidity
by clear and convincing evidence.5 That burden of proof never shifts to the
patentee to prove validity. Hybritech Inc. v. Monoclonal Antibodies, Inc.,
802 F.2d 1367, 1375 (Fed. Cir. 1986). “The presumption [of validity]
remains intact and [the burden of proof remains] on the challenger
throughout the litigation, and the clear and convincing standard does not
change.” Id. It is true that once a challenger has presented a prima
facie case of invalidity, the patentee has the burden of going forward with
rebuttal evidence. See Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206,
1216 (Fed. Cir. 1998) (citing Hybritech, 802 F.2d at 1376); Cable Elec.
Prods. Inc. v. Genmark, Inc., 770 F.2d 1015, 1022 (Fed. Cir. 1985)
(“[I]f evidence is presented establishing a prima facie case of
invalidity, the opponent of invalidity must come forward with evidence to
counter the prima facie 5 The “clear and convincing” standard
is an intermediate standard which lies somewhere in between the
“beyond a reasonable doubt” and the “preponderance of the
evidence” standards of proof. Addington v. Texas, 441 U.S. 418, 425
(1979); see also SSIH Equip. S.A. v. United States Int’l Trade
Comm’n, 718 F.2d 365, 380-81 (Fed. Cir. 1983) (Nies, J., additional
views). Although an exact definition is elusive, “clear and
convincing evidence” has been described as evidence that
“place[s] in the ultimate factfinder an abiding conviction that the
truth of its factual contentions are highly probable.” Colorado v.
New Mexico, 467 U.S. 310, 316 (1984) (internal quotations omitted).
2006-1261 16
challenge
to the presumption of section 282.”). But, all that means is that
even though a patentee never must submit evidence to support a conclusion
by a judge or jury that a patent remains valid, once a challenger
introduces evidence that might lead to a conclusion of
invalidity—what we call a prima facie case—the patentee
“would be well advised to introduce evidence sufficient to rebut that
of the challenger.” Orthokinetics, Inc. v. Safety Travel Chairs,
Inc., 806 F.2d 1565, 1570 (Fed. Cir. 1986). However, this requirement does
not “in substance shift the burden of persuasion,” Cable Elec.,
770 F.2d at 1022, because “the presumption of validity remains intact
and the ultimate burden of proving invalidity remains with the challenger
throughout the litigation.” Mas-Hamilton Group, 156 F.3d at 1216; see
also Innovative Scuba Concepts, Inc. v. Feder Indus., Inc., 26 F.3d 1112,
1115 (Fed. Cir. 1994); Ashland Oil, Inc. v. Delta Resins &
Refractories, Inc., 776 F.2d 281, 287 (Fed. Cir. 1985). The trial court has
the responsibility to determine whether the challenger has met its burden
by clear and convincing evidence by considering the totality of the
evidence, including any rebuttal evidence presented by the patentee.
Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534 (Fed. Cir. 1983).
The basis (as opposed to the mere existence) of an examiner’s initial
finding of prima facie obviousness of an issued patent is therefore, at
most only one factual consideration that the trial court must consider in
context of the totality of the evidence “in determining whether the party
asserting invalidity has met its statutory burden by clear and convincing
evidence.” Fromson, 755 F.2d at 1555. It does not, however, lessen or
otherwise affect the burden of proof, nor does it require that unless the
patentee introduces evidence of secondary considerations to establish non-
2006-1261
17
obviousness,
the patent challenger will necessarily prevail. C. The underlying factual
determinations made by the trial court that this court must review for
clear error include (1) the scope and content of the prior art, (2) the
level of ordinary skill in the art, (3) the differences between the claimed
invention and the prior art, and (4) objective indicia of non-obviousness.
Graham v. John Deere Co., 383 U.S. 1, 17 (1966). We start by noting that the
parties stipulated to many of the facts, but disagree as to the ultimate
legal outcome of obviousness based upon those facts. The parties do not
dispute that benzene sulphonate was known in the art at the time of the
inventions claimed in the ’909 and ’303 patents. Pfizer
admitted that several publications, including the Berge article, were prior
art to claims 1-3 of the ’303 patent and pertinent to the problem the
inventors sought to overcome. Neither party disputes the district
court’s characterization of the ordinarily skilled artisan. Further,
there is really no dispute as to the scope of the ’909 patent and the
differences between it and the claimed invention. The ’909 patent
specifically states that the pharmaceutically-acceptable salts of
amlodipine “are those formed from acids which form non-toxic acid
addition salts containing pharmaceutically-acceptable anions.”
’909 patent col.2 ll.3-6. The ’909 patent lists a genus of
pharmaceutically-acceptable anions “such as the hydrochloride,
hydrobromide, sulphate, phosphate or acid phosphate, acetate, maleate,
fumarate, lactate, tartrate, citrate and gluconate.” ’909
patent col.2 ll.6-9. The only examples of acid addition salts of amlodipine
are maleates. The ’909 patent does not expressly disclose the benzene
sulphonate anion nor salts formed from benzene sulphonic acid or a larger
class of sulphonic acids in
2006-1261
18
general.
But, while neither the claims nor the written description of the ’909
patent expressly disclose amlodipine besylate or the benzene sulphonate
anion, neither do they exclude amlodipine besylate or the benzene
sulphonate anion. Rather, the only limitations placed on the anion are that
it is pharmaceutically-acceptable, and that in salt form, it is able to
produce a non-toxic acid addition salt. Thus, as the district court found
and the parties agree, the ’909 patent claims literally encompass
amlodipine besylate. By statute, a claimed invention is unpatentable if the
differences between it and the prior art “are such that the subject matter
as a whole would have been obvious at the time the invention was made to a
person having ordinary skill in the art.” 35 U.S.C. § 103(a).
Subsumed within the Graham factors is a subsidiary requirement articulated
by this court that where, as here, all claim limitations are found in a
number of prior art references, the burden falls on the challenger of the
patent to show by clear and convincing evidence that a skilled artisan
would have been motivated to combine the teachings of the prior art references
to achieve the claimed invention, and that the skilled artisan would have
had a reasonable expectation of success in doing so. DyStar Textilfarben
GmbH v. C.H. Patrick Co., 464 F.3d 1356, 1360 (Fed. Cir. 2006); Velander v.
Garner, 348 F.3d 1359, 1363 (Fed. Cir. 2003). Here, the parties vigorously
disagree. A difficulty in the district court’s opinion arises
because, in assuming a prima facie case of obviousness, the district court
did not fully address whether Apotex showed by clear and convincing evidence
that a skilled artisan would have been motivated to combine the teachings
of the prior art references relied on, especially the ’909 patent and
Berge, to achieve the claimed invention. However, the district
court’s omission in this case is harmless error because evidence of
record easily satisfies us
2006-1261
19
that a
reasonable fact-finder could only conclude that Apotex has shown by clear
and convincing evidence that the skilled artisan would indeed have been so
motivated to combine the prior art to produce the besylate salt of
amlodipine. The record also satisfies us that, contrary to the district
court’s finding, a reasonable fact-finder could only conclude that
the skilled artisan would have had a reasonable expectation of success with
the besylate salt form of amlodipine for the reasons elaborated, post.
Motivation to Combine Prior Art References to Achieve the Claimed Invention
Pfizer does not argue that there was no motivation to combine the prior art
references per se. Rather, Pfizer argues that (1) the ’909 patent
does not suggest or motivate the skilled artisan to make amlodipine
besylate because none of the anions listed in the ’909 patent have a
cyclic structure as does besylate, and (2) even if the ’909 patent
were combined with Berge, the skilled artisan would not have been motivated
to make amlodipine besylate because Berge shows that besylate was actually
one of the most rarely used anions in the pharmaceutical industry, as only
0.25% of approved drugs as of 1974 were besylate salts. Finally, Pfizer
asserts that other prior art references relied upon by Apotex are not
relevant because the examples of besylate salts disclosed in these
references are limited to pharmaceuticals unrelated to amlodipine. We
reject Pfizer’s first argument, since a suggestion, teaching, or
motivation to combine the relevant prior art teachings to achieve the
claimed invention does not have to be found explicitly in the prior art
references sought to be combined, but rather “may be found in any
number of sources, including common knowledge, the prior art as a whole, or
the nature of the problem itself.” DyStar, 464 F.3d at 1361; see also
Ormco 2006-1261 20
Corp. v.
Align Tech., Inc., 463 F.3d 1299, 1307-08 (Fed. Cir. 2006). In other words,
it is irrelevant that none of the anions specifically listed in the
’909 patent have a cyclic structure, because the motivation to make
amlodipine besylate here is gleaned not only from the prior art as a whole
rather than the ’909 patent alone, but also from the nature of the
problems encountered with the amlodipine maleate tablet formulations sought
to be solved by the inventors of the ’303 patent. In this regard,
testimony of record evidences that one skilled in the art would have been
motivated to choose an anion having a different structure than that of
maleate. The maleate salt ion is acyclic and consists of a double bond
between the carbon atoms, whereas the besylate salt ion is cyclic and lacks
the same double bond. Early in development, Pfizer discovered that
amlodipine maleate was susceptible to degradation from a Michael addition
reaction in which the double bond of maleate underwent an addition reaction
causing the formation of degradation products. Apotex avers that unrebutted
testimony from its expert, which we find compelling, supports an inference
that the skilled artisan actually would have been encouraged, rather than
discouraged, to choose an anion without the same double bond, such as
benzene sulphonate, in order to avoid the Michael addition reaction. Thus,
the fact that none of the anions listed in the ’909 patent have a
cyclic structure is hardly dispositive to the question of whether the
skilled artisan would have been motivated to combine the prior art
references to achieve amlodipine besylate. We similarly are not persuaded
by Pfizer’s second argument, as clear and convincing evidence shows
that a skilled artisan would have been motivated to combine the ’909
patent and Berge to make amlodipine besylate. Pfizer’s expert, Dr.
Anderson, testified that there were an unlimited number of anions, many of
which could be used to 2006-1261 21
form
pharmaceutically-acceptable acid addition salts. Yet a reasonable
fact-finder could not accept Dr. Anderson’s testimony that the number
of acceptable anions was “unlimited.” Of course, new salts can
always be made or attempted. However, irrefutable evidence shows that a
skilled chemist at the time would simply make known
pharmaceutically-acceptable salts of whatever active ingredient with which
he or she was working at the time. Indeed, Mr. Davison, an inventor of the
’303 patent, testified that it “would have been a
mistake” to choose a novel anion. Rather, “part and parcel of
pharmaceutically accepted[] was to look in pharmacopoeias and
compendia” to find an anion having “precedence for use within
the pharmaceutical industry.” Dr. Anderson similarly admitted in his
testimony that it would have been logical to use Berge’s list of
FDA-approved anions to produce a drug formulation: Court: What if I sic my
phalanx of zealous scientists on that list and then come up with a product.
Would that be a logical thing for me to do? The Witness: It would be
logical to try that. This is true especially given the fact that the genus
of FDA-approved anions at the time was small, i.e., only 53. That benzene
sulphonate was only used in creating 0.25% of FDA-approved drugs is not
highly probative, much less dispositive. Indeed, beyond hydrochloride,
which was used in approximately 43% of approved drugs, almost all other
salts could be characterized as “rarely used.” See Berge, Table
1 (showing that 40 out of 53 anions were used in less than 1% of drugs and
23 out of 53 were used in 0.25% or less of drugs). But the outcome of this
case need not rest heavily on the size of the genus of pharmaceutically-acceptable
anions disclosed by Berge because clear and convincing evidence establishes
that, out of the list of 53 anions, one of ordinary skill in the art would
have favorably considered benzene sulphonate because of its known acid
2006-1261
22
strength,
solubility, and other known chemical characteristics as reported in several
other publications Pfizer has admitted are prior art. Schmidt discloses
that aryl sulphonic acids, such as benzene sulphonic acids, considerably
increase the solubility of pharmaceuticals containing one or more basically
reacting nitrogen atoms. ’612 patent col.2 ll.14-41. Spiegel
specifically identifies besylate as the preferred
pharmaceutically-acceptable acid addition salt form of a pharmaceutical
compound. ’637 patent col.2 ll.38-39. Other patents not before the
examiner during prosecution of the ’303 patent also point to benzene
sulphonate. U.S. Patent 3,970,662 to Carabateas (1976)
(“Carabateas”) discloses an intermediate dihydropyridine
compound useful in the form of an acid addition salt derived from benzene
sulphonate. ’662 patent col.3 ll.35-49 & col.4 ll.20-24. U.S.
Patent 4,432,987 to Barth (1984) (“Barth”), assigned to Pfizer,
discloses the besylate acid addition salt form of a pharmaceutical composition
having excellent pharmacokinetic properties, near-optimal solubility, and
improved stability. ’987 patent col.2 ll.45-46. Taken together, these
references provide ample motivation to narrow the genus of 53
pharmaceutically-acceptable anions disclosed by Berge to a few, including
benzene sulphonate. The district court ignored the significance of these
other prior art references suggesting the besylate salt because the
pharmaceuticals disclosed in those prior art references were not described
as useful to treat hypertension or angina, as is amlodipine. By not
considering these references in its obviousness analysis, however, the
district court clearly erred. As here, the besylate acid addition salt form
was described in these prior art references as useful in promoting stability
and solubility, as well as improving other physicochemical characteristics.
That none of these references
2006-1261
23
discloses
a medication for treating hypertension or angina like amlodipine is
therefore unimportant, if not actually irrelevant. As Pfizer concedes, the
besylate part of the acid addition salt has no therapeutic effect, but
merely serves as a means to deliver the amlodipine part of the molecule to
the body. Prior art disclosing the use of benzene sulphonate for improving
the bioavailability of other pharmaceuticals—especially a
dihydropyridine as disclosed by Carabateas—is therefore highly
relevant in weighing the factors relating to obviousness. Considering all
of the evidence, we hold that a reasonable fact-finder could only conclude
that Apotex indeed produced clear and convincing evidence that one skilled
in the art, facing the problems including the stickiness of the tablet form
of the maleate acid addition salt, would have been motivated to combine the
teachings of the ’909 patent, Berge, and other prior art, to produce
the besylate salt of amlodipine. Reasonable Expectation of Success As noted
above, the district court found that the skilled artisan would have had no
expectation of success in making a besylate salt of amlodipine because
there was no reliable way to predict the influence of a particular salt
species on the active part of the compound. We cannot reject the district
court’s finding that in 1986, it was generally unpredictable as to
whether a particular salt would form and what its exact properties would
be. The problem with the district court’s ultimate conclusion of
non-obviousness based on that factual finding, however, is that case law is
clear that obviousness cannot be avoided simply by a showing of some degree
of unpredictability in the art so long as there was a reasonable
probability of success. See In re Corkill, 771 F.2d 1496, 1500 (Fed. Cir.
1985) (“Although [the inventor] declared that it cannot be predicted
how any 2006-1261 24
candidate
will work in a detergent composition, but that it must be tested, this does
not overcome [the prior art’s] teaching that hydrated zeolites will
work.”); see also Brown & Williamson Tobacco Corp. v. Philip
Morris Inc., 229 F.3d 1120, 1125 (Fed. Cir. 2000); Merck & Co., Inc. v.
Biocraft Labs., Inc., 874 F.2d 804, 809 (Fed. Cir. 1989); In re Merck &
Co., Inc., 800 F.2d 1091, 1097 (Fed. Cir. 1986). Indeed, a rule of law
equating unpredictability to patentability, applied in this case, would
mean that any new salt—including those specifically listed in the
’909 patent itself—would be separately patentable, simply
because the formation and properties of each salt must be verified through
testing. This cannot be the proper standard since the expectation of
success need only be reasonable, not absolute. Merck, 874 F.2d at 809; In
re O’Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988). The evidence would
convince a reasonable finder of fact that the skilled artisan would have
had that reasonable expectation of success that an acid addition salt of besylate
would form and would work for its intended purpose. See In re Rinehart, 531
F.2d 1048, 1053-54 (C.C.P.A. 1976). Specifically, the evidence clearly
shows that as soon as tablet processing problems arose with the amlodipine
maleate tablet formulations, Dr. Wells readily compiled a list of seven
alternative anions—including the besylate—each of which he
expected would form an amlodipine acid addition salt: Q. And one of the
reasons why you chose these various salts [sic], or suggested these various
salts [sic], is because you expected that they would be able to make a salt
of them, correct? A. There was an expectation, but that wasn’t
guaranteed. But, once again, only a reasonable expectation of success, not
a guarantee, is needed. O’Farrell, 853 F.2d at 903; Brown &
Williamson, 229 F.3d at 1125. That reasonable expectation of success is
further amply reflected in Dr. Wells’ further testimony that he
2006-1261
25
expected
these seven amlodipine acid addition salts would show improved
physicochemical characteristics over the maleate salt, including improved
stability and non-stickiness: Q. And when you chose these salts . . . you
believed that if you could, in fact, make an amlodipine salt out of them,
these might be a cure for the problems you were having with maleate,
correct? A. Indeed. We also note that the ’909 patent placed no
limitations on the acid addition salt whatsoever, except that it be
non-toxic and formed from an acid containing a pharmaceutically-acceptable
anion. Accordingly, the ’909 patent contained a strong suggestion
that any and all pharmaceutically-acceptable anions would form non-toxic
acid addition salts and would work for their intended purpose—that
is, to improve bioavailability of the active ingredient amlodipine and to improve
handling and storage of amlodipine. Indeed, in proceedings before this
court in Pfizer v. Dr. Reddy’s Laboratories involving the ’909
patent, Pfizer downplayed any difference between amlodipine maleate and any
other acid addition salt form of amlodipine, including the besylate,
prompting this court to observe that the sole active ingredient is
amlodipine, and that it acts the same in the human body whether
administered as a besylate salt or as a maleate salt. 359 F.3d at 1366.
Finally, there is a suggestion in Pfizer’s supplemental filing with
the FDA that it was known that the besylate salt of amlodipine would work
for its intended purpose: “We feel that the change in salt form [from
maleate to besylate] is justified since benzenesulfonate is a commercially acceptable
salt, as exemplified by the tranquilizer mesoridazine (Serentil).”
Thus, although Dr. Wells testified that it was not guaranteed whether
amlodipine besylate would form and what its salient characteristics would
be,
2006-1261
26
“this
does not overcome [the prior art’s] teaching that [amlodipine
besylate] will work.” Corkill, 771 F.2d at 1500. Considering all of
the evidence, we conclude that the district court clearly erred in finding
that Apotex failed to produce clear and convincing evidence that one
skilled in the art would have had a reasonable expectation of success with
the besylate salt of amlodipine. “Obvious-to-Try” To be sure,
“to have a reasonable expectation of success, one must be motivated
to do more than merely to vary all parameters or try each of numerous
possible choices until one possibly arrived at a successful result, where
the prior art gave either no indication of which parameters were critical
or no direction as to which of many possible choices is likely to be
successful.” Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1165
(Fed. Cir. 2006) (internal quotations omitted). Pfizer argues that, if
anything, amlodipine in its besylate salt form would at most be
“obvious to try,” i.e., to vary all parameters or try each of
numerous possible choices to see if a successful result was obtained.
O’Farrell, 853 F.2d at 903. Parties before this court often complain
that holdings of obviousness were based on the impermissible “obvious
to try” standard, and this court has accordingly struggled to strike
a balance between the seemingly conflicting truisms that, under 35 U.S.C.
§ 103, “obvious to try” is not the proper standard by
which to evaluate obviousness, In re Antonie, 559 F.2d 618, 620 (C.C.P.A.
1977), but that, under O’Farrell and other precedent, absolute
predictability of success is not required. 853 F.2d at 903. Reconciling the
two is particularly germane to a situation where, as here, a formulation
2006-1261 27
must be
tested by routine procedures to verify its expected properties. The
question becomes then, when the skilled artisan must test, how far does
that need for testing go toward supporting a conclusion of non-obviousness?
As we have said before, “[e]very case, particularly those raising the
issue of obviousness under section 103, must necessarily be decided upon
its own facts.” In re Jones, 958 F.2d 347, 350 (Fed. Cir. 1992).
Consequently, courts cannot decide the obviousness or non-obviousness of a
patent claim by proxy. Undue dependence on mechanical application of a few
maxims of law, such as “obvious to try,” that have no bearing
on the facts certainly invites error as decisions on obviousness must be
narrowly tailored to the facts of each individual case. As we stated in
DyStar, Obviousness is a complicated subject requiring sophisticated
analysis, and no single case lays out all facets of the legal test. [There
is] danger inherent in focusing on isolated dicta rather than gleaning the
law of a particular area from careful reading of the full text of a group
of related precedents for all they say that is dispositive and for what
they hold. When parties . . . do not engage in such careful, candid, and
complete legal analysis, much confusion about the law arises and, through
time, can be compounded. 464 F.3d at 1367. On the facts of this case,
however, we are satisfied that clear and convincing evidence shows that it
would have been not merely obvious to try benzene sulphonate, but would
have been indeed obvious to make amlodipine besylate. First, this is not
the case where there are “numerous parameters” to try. Rather,
the only parameter to be varied is the anion with which to make the
amlodipine acid addition salt. Although we recognize some degree of unpredictability
of salt formation, see, e.g., Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d
1368, 1379 (Fed. Cir. 2006), the mere possibility that some salts may not
form does not demand a conclusion that those that do are necessarily
non-obvious. This is especially true here, where (1) as noted
2006-1261
28
above, the
skilled artisan had a reasonable (although not guaranteed) expectation that
amlodipine besylate would form; (2) Pfizer conceded in prior litigation
that the type of salt had no effect on the therapeutic effect of the active
ingredient, amlodipine, and was practically interchangeable, Pfizer v. Dr.
Reddy’s Labs., 359 F.3d at 1365-66; and (3) numerous other
publications (described above) clearly directed the skilled artisan to a
pharmaceutically-acceptable acid addition salt made from benzene
sulphonate, including, significantly, the Carabateas patent which taught
the besylate acid addition salt form of another dihydropyridine
pharmaceutical compound. Second, this is not the case where the prior art
teaches merely to pursue a “general approach that seemed to be a
promising field of experimentation” or “gave only general
guidance as to the particular form of the claimed invention or how to
achieve it.” O’Farrell, 853 F.2d at 903; Medichem, 437 F.3d at
1167. Here, as admitted by Mr. Davison, in selecting an acid addition salt
formulation, one skilled in the art looked to pharmacopoeias and compendia
to find a salt that was previously approved by the FDA and used
successfully within the pharmaceutical industry. Berge clearly pointed the
skilled artisan to 53 anions that, as of 1974, were pharmaceutically
acceptable. As Dr. Wells’ testimony and the Carabateas patent
demonstrated, one of ordinary skill in the art was capable of further
narrowing that list of 53 anions to a much smaller group, including benzene
sulphonate, with a reasonable expectation of success. Finally, Pfizer
protests that a conclusion that amlodipine besylate would have been obvious
disregards its “discovery” because it was obtained through the
use of trial and error procedures. While the pharmaceutical industry may be
particularly adversely impacted by application of an “obvious to
try” analysis, see, e.g., In re Merck, 800 F.2d
2006-1261
29
at 1100
(Baldwin, J., dissenting), that Pfizer had to verify through testing the
expected traits of each acid addition salt is of no consequence because it
does not compel a conclusion of non-obviousness here. In coming to this
conclusion, we have not ignored the fact that “[p]atentability shall
not be negatived by the manner in which the invention was made.” 35
U.S.C. § 103(a). Nor are we ignorant of the fact that reference to
“routine testing” or “routine experimentation” is
disfavored. See, e.g., In re Yates, 663 F.2d 1054, 1056 n.4 (C.C.P.A. 1981)
(“The Solicitor . . . argues that it is ‘not unobvious to
discover optimum or workable ranges by routine experimentation.’ In
many instances, this may be true. The problem, however, with such
‘rules of patentability’ (and the ever-lengthening list of
exceptions which they engender) is that they tend to becloud the ultimate
legal issue—obviousness—and exalt the formal exercise of
squeezing new factual situations into preestablished pigeonholes.
Additionally, the emphasis upon routine experimentation is contrary to the
last sentence of section 103.”) (internal citation omitted); In re
Saether, 492 F.2d 849, 854 (C.C.P.A. 1974) (“In his argument that
‘mere routine experimentation’ was involved in determining the
optimized set of characteristics, the solicitor overlooks the last sentence
of 35 U.S.C. § 103 . . . . Here we are concerned with the question of
whether the claimed invention would have been obvious at the time it was
made to a person having ordinary skill in the art—not how it was
achieved.”) (internal citation omitted); In re Fay, 347 F.2d 597, 602
(C.C.P.A. 1965) (“[W]e do not agree that ‘routine
experimentation’ negatives patentability. The last sentence of
section 103 states that ‘patentability shall not be negatived by the
manner in which the invention was made.’ To support the board’s
decision that ‘routine experimentation within the teachings of the
art’ will defeat patentability requires a
2006-1261
30
primary
determination of whether or not appellants’ experimentation comes
within the teachings of the art. Whether the subsequent experimentation is
termed ‘routine’ or not is of no consequence.”). However,
on the particularized facts of this case, consideration of the
“routine testing” performed by Pfizer is appropriate because
the prior art provided not only the means of creating acid addition salts
but also predicted the results, which Pfizer merely had to verify through
routine testing. Merck, 874 F.2d at 809. The evidence shows that, upon
making a new acid addition salt, it was routine in the art to verify the
expected physicochemical characteristics of each salt, including
solubility, pH, stability, hygroscopicity, and stickiness, and
Pfizer’s scientists used standard techniques to do so. These type of
experiments used by Pfizer’s scientists to verify the physicochemical
characteristics of each salt are not equivalent to the trial and error
procedures often employed to discover a new compound where the prior art
gave no motivation or suggestion to make the new compound nor a reasonable
expectation of success. This is not to say that the length, expense, and
difficulty of the techniques used are dispositive since many techniques
that require extensive time, money, and effort to carry out may
nevertheless be arguably “routine” to one of ordinary skill in
the art. Rather, our conclusion here relies on the fact that one skilled in
the art would have had a reasonable expectation of success at the time the
invention was made, and merely had to verify that expectation. Cf. Velander
v. Garner, 348 F.3d 1359, 1368 (Fed. Cir. 2003) (that one skilled in the
art would view variability in producing fibrinogen in transgenic mammals as
evidence that “expense, time and effort” would be involved did
not equate to a conclusion that success was unlikely). Simply put, to
conclude that 2006-1261 31
amlodipine
besylate would have been obvious, “the prior art, common knowledge,
or the nature of the problem, viewed through the eyes of an ordinary
artisan” merely had to suggest reacting amlodipine base with benzene
sulphonic acid to form the besylate acid addition salt, and that that acid
addition salt form would work for its intended purpose. DyStar, 464 F.3d at
1361. They did. See O’Farrell, 853 F.2d at 904. We find this case
analogous to the optimization of a range or other variable within the
claims that flows from the “normal desire of scientists or artisans
to improve upon what is already generally known.” In re Peterson, 315
F.3d 1325, 1330 (Fed. Cir. 2003) (determining where in a disclosed set of
percentage ranges the optimum combination of percentages lies is prima
facie obvious). In In re Aller, 220 F.2d 454, 456 (C.C.P.A. 1955), our
predecessor court set forth the rule that the discovery of an optimum value
of a variable in a known process is usually obvious. See also In re Boesch,
617 F.2d 272, 276 (C.C.P.A. 1980) (“[D]iscovery of an optimum value
of a result effective variable in a known process is ordinarily within the
skill of the art.”). Similarly, we hold that the optimization of the
acid addition salt formulation for an active pharmaceutical ingredient
would have been obvious where as here the acid addition salt formulation
has no effect on the therapeutic effectiveness of the active ingredient and
the prior art heavily suggests the particular anion used to form the salt.
Cf. In re Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997) (“‘[I]t
is not inventive to discover the optimum or workable ranges by routine
experimentation.’” (quoting Aller, 220 F.2d at 456)); In re
Kulling, 897 F.2d 1147, 1149 (Fed. Cir. 1990) (finding no clear error in
Board of Patent Appeals and Interferences’ conclusion that the amount
of eluent to be used in a washing sequence was a matter of routine
optimization known in the pertinent 2006-1261 32
prior art
and therefore obvious). Indeed, the logical line of testing was to react
benzene sulphonate with amlodipine to confirm the presence of a salt, and
then to verify that the physicochemical properties of amlodipine besylate
were adequate, particularly the trait of sufficient non-stickiness. The experimentation
needed, then, to arrive at the subject matter claimed in the ’303
patent was “nothing more than routine” application of a
well-known problem-solving strategy, Merck, 874 F.2d at 809, and we
conclude, “the work of a skilled [artisan], not of an
inventor.” DyStar, 464 F.3d at 1371; see also In re Luck, 476 F.2d
650, 652-53 (C.C.P.A. 1973) (use of routine testing to identify optimum
amounts of silane to be employed in a lamp coating, without establishing a
critical upper limit or demonstrating any unexpected result, lies within
the ambit of the ordinary skill in the art); In re Esterhoy, 440 F.2d 1386,
1389 (C.C.P.A. 1971) (“One skilled in the art would thus manifestly
operate the Switzer et al. process under conditions most desirable for
maximum and efficient concentration of the acid. The conditions recited in
the claims appear to us to be only optimum and easily ascertained by
routine experimentation.”); In re Swentzel, 219 F.2d 216, 219
(C.C.P.A. 1955) (“It may well be that the size represents the largest
particles suitable for appellant’s purpose, but the determination of
that desired size under the present circumstances involves nothing more
than routine experimentation and exercise of the judgment of one skilled in
the art.”); In re Swain, 156 F.2d 246, 247-48 (C.C.P.A. 1946)
(“In the absence of a proper showing of an unexpected and superior
result over the disclosure of the prior art, no invention is involved in a
result obtained by experimentation.”). Thus, while patentability of
an invention is not negated by the manner in which it was made, “the
converse is equally true: patentability is not imparted where ‘the
prior
2006-1261
33
art would
have suggested to one of ordinary skill in the art that this process should
be carried out and would have a reasonable likelihood of
success.’” Merck, 874 F.2d at 809 (quoting In re Dow Chem. Co.,
837 F.2d 469, 473 (Fed. Cir. 1988)). For these reasons, we hold that Apotex
introduced clear and convincing evidence that a skilled artisan would have
had a reasonable expectation of success with the besylate salt form of
amlodipine at the time the invention was made. Accordingly, we agree with
the district court that a prima facie case of obviousness was established
with regard to the claims of the ’303 patent, albeit for different
reasons. Secondary Considerations Before we turn to the remaining conflict
between the parties—the district court’s consideration of the
objective indicia of non-obviousness—we must first address the
district court’s reference in its bench opinion to Pfizer’s
business decision to switch its commercial product from an amlodipine
maleate formulation to an amlodipine besylate formulation, apparently as
evidence of non-obviousness. See Bench Order Tr. at 6:21-7:1 (“Pfizer
is a big company, which by this time had a large investment in amlodipine
maleate. . . . A decision to switch to some other product, or even to
abandon the entire product, is the corporate equivalent of turning the
Queen Mary.”); Bench Order Tr. at 18:17-21 (“Pfizer would not
have changed from the maleate, into which it had invested both time and
research dollars, to seek out a very strange and rare besylate salt, absent
an extremely good reason.”). The district court’s reliance on
this “objective consideration” seems suspect as there is no
evidence in the appellate record to support the implicit finding that
Pfizer ever considered abandoning amlodipine or stood to lose significant
time and investment dollars. Indeed, we are not ignorant of the fact that
2006-1261
34
pharmaceutical
companies are in the business of research and development. We therefore
disregard the district court’s findings on this point as clearly
erroneous, or in any event insufficiently probative of non-obviousness to
overcome the evidence of the prior art teachings. Evidence of unexpected
results can be used to rebut a prima facie case of obviousness. Peterson,
315 F.3d at 1330. The district court found that, while amlodipine besylate
was not superior to amlodipine maleate in every category of physicochemical
properties, it nonetheless “clearly and unexpectedly illustrates a
superior combination of properties when compared to” amlodipine
maleate.6 With regard to solubility, the ’303 patent discloses that
amlodipine besylate has a solubility of 4.6 mg/ml at pH 6.6, whereas
amlodipine maleate has a solubility of 4.5 mg/ml at pH 4.8. The district
court stated that any product having a solubility greater than 1.0 mg/ml is
acceptable, and that “[t]he rest is sound and fury.” Bench
Order Tr. at 11:10. We conclude from this statement that the district court
did not find that the solubility of amlodipine besylate was materially
superior, much less “unexpectedly superior” to the solubility
of amlodipine maleate. Similarly, we also conclude that the district court
did not rely on non-hygroscopicity as a secondary consideration. Thus, the
two allegedly unexpected and superior properties remaining are drug
stability and tablet processing. With respect to stability, the district
court found that the ’303 patent provided an ordinal listing of
several tested salts descending in rank order from the most stable to 6 We
reject Apotex’s assertion that the district court erred by giving
weight to the commercial success of Norvasc®. The district court relied
on the production of billions of amlodipine besylate tablets by Pfizer as
evidence of non-stickiness rather than commercial success. Apotex’s
arguments with regard to an alleged absence of a “nexus”
between the claimed features and the sales of Norvasc® are therefore
irrelevant. 2006-1261 35
the least
stable, where the besylate salt was the most stable of the eight salts
tested, and the maleate salt was the sixth most stable salt. The district
court also found that amlodipine besylate was “sufficiently nonsticky
to obtain commercial processability.” Pfizer asserts that these
improvements have significant practical value and are indicative of
non-obviousness. In contrast, Apotex asserts that the district court
committed several errors when assessing secondary considerations. Specifically,
Apotex asserts that the district court erred by comparing amlodipine
besylate only to the maleate preferred embodiment disclosed in the
’909 patent rather than the entire genus of amlodipine salts claimed
therein. Apotex also asks this court to discount Pfizer’s evidence of
unexpectedly superior properties because the stability and drug processing
properties of amlodipine besylate are neither “unexpected” nor
“surprising.” Finally, Apotex asserts that even if amlodipine
besylate exhibits a better combination of solubility, pH, stability,
non-hygroscopicity, and non-stickiness properties than other members of the
genus of amlodipine salts, this purported superiority of amlodipine
besylate is not significant enough as a matter of law to make it non-obvious.
Apotex argues that amlodipine is the active ingredient and the sole source
of therapeutic effects of amlodipine besylate, whereas the besylate is
merely a means of delivering the amlodipine part of the molecule. Thus,
Apotex asserts, any salt need only exhibit adequate physicochemical
characteristics in order to serve its purpose of delivering the amlodipine.
Apotex contends that the record here demonstrates that the amlodipine
maleate tablet also performs these same functions. The issue before us is
whether, based upon the evidence as a whole, Pfizer’s showing of
superior results was sufficiently unexpected so 2006-1261 36
as to
rebut Apotex’s showing of a prima facie case of obviousness. While we
agree that the teaching of a prior art patent is not limited to its
preferred embodiment, see Merck, 874 F.2d at 807 (“the fact that a
specific [embodiment] is taught to be preferred is not controlling, since
all disclosures of the prior art, including unpreferred embodiments, must
be considered”), the other amlodipine salts of which Apotex complains
(i.e., amlodipine tosylate and amlodipine mesylate) were not expressly
recited in the ’909 patent or elsewhere in the prior art. Thus, the
district court’s obligation to consider the entire range of prior art
compounds would have been satisfied here by its comparison of the closest
prior art compound to amlodipine besylate. Kao Corp. v. Unilever United
States, Inc., 441 F.3d 963, 970 (Fed. Cir. 2006) (“‘[W]hen
unexpected results are used as evidence of nonobviousness, the results must
be shown to be unexpected compared with the closest prior
art.’” (quoting In re Baxter Travenol Labs., 952 F.2d 388, 392
(Fed. Cir. 1991)). However, there is precious little (if any) evidence to
support any implicit finding by the district court that amlodipine maleate
is actually the closest prior art compound to amlodipine besylate. Indeed,
the prior art of Schmidt, Spiegel, Carabateas, and Barth, discussed above,
evidences that one skilled in the art would expect an acid addition salt
made from benzene sulphonate to have good physicochemical properties.
Another defect in the district court’s reasoning is its failure to
recognize that by definition, any superior property must be unexpected to
be considered as evidence of non-obviousness. In re Chupp, 816 F.2d 643,
646 (Fed. Cir. 1987). Thus, in order to properly evaluate whether a
superior property was unexpected, the court should have considered what
properties were expected. Merck, 874 F.2d at 808. Here, Pfizer’s
2006-1261 37
evidence
must fail because the record is devoid of any evidence of what the skilled
artisan would have expected. We will not simply presume that the skilled
artisan would have expected that amlodipine besylate would have the same
characteristics as amlodipine maleate, because as Pfizer asserts, its
properties are not absolutely predictable. Further, Dr. Wells’
testimony reflects the fact that he believed that amlodipine besylate would
solve the problems of amlodipine maleate. Unrebutted testimony from Apotex’s
expert evidences that, given the range of 53 anions disclosed by Berge, one
skilled in the art would expect those anions to provide salts having a
range of properties, some of which would be superior, and some of which
would be inferior, to amlodipine maleate. Pfizer has simply failed to prove
that the results are unexpected. Boesch, 617 F.2d at 278. Finally, we do
not see the trial court’s finding that amlodipine besylate had
adequate physicochemical characteristics as sufficient to uphold the court’s
ultimate holding of unexpected superiority. Pfizer rejected amlodipine
maleate not because it failed to exhibit an adequate combination of
solubility, pH, stability in capsule form, and non-hygroscopicity, but
because it could not be easily manufactured because of stickiness and
limited stability of amlodipine maleate in the preferred commercial form of
a tablet. The district court wrongly relied on the fact that the
“besylate salt works” because considerable evidence shows that
amlodipine maleate also worked for its intended purpose and even did so in
human clinical trials, even though somewhat inferior in ease of tableting
and projected shelf-life. At most, then, Pfizer engaged in routine,
verification testing to optimize selection of one of several known and clearly
suggested pharmaceutically-acceptable salts to ease its commercial
manufacturing and
2006-1261
38
marketing
of the tablet form of the therapeutic amlodipine. Creating a “product
or process that is more desirable, for example because it is stronger, cheaper,
cleaner, faster, lighter, smaller, more durable, or more efficient . . . to
enhance commercial opportunities . . . is universal—and even
common-sensical.” DyStar, 464 F.3d at 1368. Amlodipine besylate is
obvious on the facts of this case because the ’909 patent
suggested—and Dr. Wells expected—that every other potential
salt form of amlodipine would be adequate for its intended purpose, i.e.,
to increase bioavailability of amlodipine, and would solve the stickiness
problem of the maleate salt. The fact that amlodipine besylate was the best
of the seven acid addition salts actually tested proves nothing more than
routine optimization that would have been obvious to one of ordinary skill
in the art. See Aller, 220 F.2d at 456 (“[E]ven though applicant’s
modification results in great improvement and utility over the prior art,
it may still not be patentable if the modification was within the
capabilities of one skilled in the art.”). These facts lead us to
conclude that the resulting commercial embodiment claimed in the ’303
patent, amlodipine besylate, does not satisfy the standards of
patentability. Alternatively, we hold that even if Pfizer showed that
amlodipine besylate exhibits unexpectedly superior results, this secondary
consideration does not overcome the strong showing of obviousness in this
case. Although secondary considerations must be taken into account, they do
not necessarily control the obviousness conclusion. Newell Cos., Inc. v.
Kenney Mfg. Co., 864 F.2d 757, 768 (Fed. Cir. 1988). Here, the record
establishes such a strong case of obviousness that Pfizer’s alleged
unexpectedly superior results are ultimately insufficient. Id. at 769.
2006-1261
39
From our
de novo assessment of the determination below on obviousness in view of all
of the evidence and for the reasons articulated above, we conclude that the
district court erred in holding that the claims of the ’303 patent
would not have been obvious. III. CONCLUSION Because we find claims 1-3 of
the ’303 patent invalid for obviousness, we find it unnecessary to
address Apotex’s assertion that Pfizer engaged in inequitable conduct
during prosecution of the ’303 patent and that its patent should
therefore be declared unenforceable. For the aforementioned reasons, the
district court’s judgment is reversed. REVERSED.
LINN,
Circuit Judge, concurs in the result.
United
States Court of Appeals for the Federal Circuit
2006-1514
CELLCO
PARTNERSHIP
(doing
business as Verizon Wireless),
Plaintiff-Appellant,
v.
BROADCOM
CORPORATION,
Defendant-Appellee.
Aaron M.
Panner, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., of
Washington, DC, argued for plaintiff-appellant. With him on the brief were
Mark C. Hansen, Richard H. Stern, and Michael E. Joffre. Of counsel on the
brief were John Thorne and Robert H. Griffen, Verizon, of Arlington,
Virginia; Richard Cullen, Brian C. Riopelle, and Robert M. Tyler,
McGuireWoods LLP, of Richmond, Virginia; David L. Shapiro, of Cambridge,
Massachusetts; and James H. Wallace, Jr., John B. Wyss, and Kevin P.
Anderson, Wiley Rein LLP, of Washington, DC.
Michael H.
Page, Keker & Van Nest, LLP, of San Francisco, California, argued for
defendant-appellee. With him on the brief were Robert A. Van Nest and
Steven A. Hirsch.
Appealed
from: United States District Court for the Eastern District of Virginia
Judge
Leonie M. Brinkema
NOTE: This
disposition is nonprecedential.
UNITED
STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
2006-1514
CELLCO
PARTNERSHIP
(doing
business as Verizon Wireless),
Plaintiff-Appellant,
v.
BROADCOM
CORPORATION,
Defendant-Appellee.
_______________________
DECIDED:
March 19, 2007
________________________
Before
MAYER, Circuit Judge, PLAGER, Senior Circuit Judge, and PROST, Circuit
Judge.
PER
CURIAM.
In light
of MedImmune, Inc. v. Genentech, Inc., 549 U.S. ___, 127 S. Ct. 764 (2007),
we conclude that the district court erred as a matter of law in holding
that no actual controversy existed between the parties, as required by the
Declaratory Judgment Act, 28 U.S.C. § 2201(a) and Article III of the
Constitution. See id. at ___ n.11, 127 S. Ct. 774 n.11. However, MedImmune
also reaffirmed that trial courts have “unique and substantial
discretion” in determining whether to decide cases over which
they have
declaratory judgment jurisdiction. Id. at ___, 127 S. Ct. at 776 (quoting
Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995)).
The same
patents at issue here are also the subject of a pending International Trade
Commission (“ITC”) proceeding, which was instituted by Broadcom
Corporation (“Broadcom”) against Qualcomm Corporation
(“Qualcomm”). Qualcomm manufactures the chips used by Cellco
Partnership (“Cellco”). That proceeding raised many of the same
issues as Cellco’s declaratory judgment action, including the validity
of the patents. Although the ITC’s findings lack preclusive effect
and cannot conclusively resolve the controversy between Cellco and
Broadcom, they can be considered by federal courts for their persuasive
value. Texas Instruments v. Cypress Semiconductor Corp., 90 F.3d 1558,
1568-69 (Fed. Cir. 1996).
In
addition, a separate district court proceeding raising similar issues was
pending between Qualcomm and Broadcom in the Central District of
California. As required by statute, that case was stayed at Qualcomm’s
request until the ITC’s determination becomes final. 28 U.S.C. §
1659(a); see In re Princo Corp., ___ F.3d ___, 2007 WL 610732 (Fed. Cir.
2007) (order). When that suit resumes, it will have the benefit of the
ITC’s determinations, and Cellco can seek to intervene.
In light
of these other proceedings involving the chip manufacturer, the trial court
determined that entertaining Cellco’s declaratory judgment action
would be “an inappropriate use of multiple judicial districts.”
Because of potential judicial efficiency, and because Cellco has not shown
sufficient harm to require immediate resolution of its case prior to the
conclusion of these other proceedings, we find no abuse of discretion in
dismissing the case. Accordingly, we affirm.
United
States Court of Appeals for the Federal Circuit
2007-1088
WHIRLPOOL
CORPORATION and WHIRLPOOL PATENTS COMPANY,
Plaintiffs-Appellants,
v.
LG
ELECTRONICS, INC. and LG ELECTRONICS U.S.A., INC.,
Defendants-Appellees,
and
GENERAL
ELECTRIC COMPANY,
Defendant-Appellee.
ON MOTION
Before
NEWMAN, RADER, and LINN, Circuit Judges.
RADER,
Circuit Judge.
O R D E R
LG
Electronics, Inc. and LG Electronics U.S.A., Inc. (LG) move to dismiss the
appeal filed by Whirlpool Corporation and Whirlpool Patents Company
(Whirlpool). LG states that General Electric Company joins the motion.
Whirlpool opposes. LG replies. The parties also submit letters in support
of their positions.
Whirlpool
sued LG and General Electric for infringement of two patents. LG and General
Electric filed counterclaims seeking declaratory judgments of
noninfringement of both patents, declaratory judgments of invalidity of
both patents on various grounds, and a declaratory judgment of
unenforceability of one of the patents. The parties filed various motions
for summary judgment, but LG and General Electric did not file motions for
summary judgment concerning all issues underlying the declaratory
judgment
counterclaims.
The district court granted summary judgment of noninfringement of the first
patent and invalidity of the second patent. The district court denied the
other summary judgment motions as moot and entered a
“judgment.” Whirlpool filed an appeal.
Whirlpool
argues that it can appeal, despite the lack of entry of a judgment dismissing
or denying the defendants’ counterclaims, because the district
court’s intent to deny those counterclaims is clear from the
circumstances. We disagree. As LG notes, the defendants’ motions for
summary judgment did not raise all of the issues that are raised by the
counterclaims. Thus, by denying summary judgment only on the issues raised
by motions for summary judgment, the district court did not clearly decide
all of the relief sought by the counterclaimants.
Because
not all claims for relief were disposed of, and no judgment was entered
pursuant to Fed. R. Civ. P. 54(b), there is no final judgment and the
appeal must be dismissed as premature. Nystrom v. Trex Co., Inc., 339 F.3d
1347 (Fed. Cir. 2003); International Elec. Tech. Corp. v. Hughes Aircraft
Co., --- F.3d ---, 2007 WL 189341 (Fed. Cir. Jan. 26, 2007).
Accordingly,
IT IS
ORDERED THAT:
(1) The
motion to dismiss is granted.
(2) Each
side shall bear its own costs.
FOR THE
COURT
_____March
1, 2007_________ /s/ Randall R. Rader_______
Date
Randall R. Rader
Circuit
Judge
2007-1088
- 2 -
cc: David
A. Boehnen, Esq.
Larry S.
Nixon, Esq.
Richard L.
Stroup, Esq.
s8
ISSUED AS
A MANDATE: ______________________
United
States Court of Appeals for the Federal Circuit
2006-1272,
-1488
SHANGHAI
MEIHAO ELECTRIC, INC.,
Plaintiff-Appellee,
v.
LEVITON
MANUFACTURING COMPANY, INC.,
Defendant-Appellant.
- - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LEVITON
MANUFACTURING COMPANY, INC.,
Plaintiff-Appellant,
v.
UNIVERSAL
SECURITY INSTRUMENTS, INC.
and USI
ELECTRIC, INC.,
Defendants.
Gary
Hnath, Bingham McCutchen LLP, of Washington, DC, argued for
plaintiff-appellee. Of counsel was Daniel S. Nooter.
Barry G.
Magidoff, Greenberg Traurig LLP, of New York, New York, argued for
defendant-appellant. With him on the were Paul J. Sutton and Alan
Tenenbaum.
Appealed
from: United States District Court for the District of Maryland
Judge
Andre M. Davis
NOTE: This
disposition is nonprecedential.
United
States Court of Appeals for the Federal Circuit
2006-1272,
-1488
SHANGHAI
MEIHAO ELECTRIC, INC.,
Plaintiff-Appellee,
v.
LEVITON
MANUFACTURING COMPANY, INC.,
Defendant-Appellant.
--------------------------------------------------------------------
LEVITON
MANUFACTURING COMPANY, INC.,
Plaintiff-Appellant,
v.
UNIVERSAL
SECURITY INSTRUMENTS, INC., and
USI
ELECTRIC, INC.,
Defendants.
__________________________
DECIDED:
January 10, 2007
__________________________
Before
NEWMAN, Circuit Judge, CLEVENGER, Senior Circuit Judge, and DYK, Circuit
Judge.
CLEVENGER,
Senior Circuit Judge.
Declaratory
judgment defendant Leviton Manufacturing Co., Inc. ("Leviton")
appeals the February 15, 2006 order of the United States District Court for
the District of Maryland (1) granting plaintiff Shanghai Meihao Electric,
Inc.'s ("Meihao") motion for summary judgment of noninfringement
of U.S. Patent No. 6,040,967 ("the '967 patent"), No. 6,246,558
("the '558 patent"), No. 6,381,112 ("the '112 patent"),
and No. 6,437,953
("the
'953 patent"),1 and (2)
entering a permanent injunction against Leviton. We affirm in part and
reverse in part.
I
The
patents at issue in this case relate to a reset lockout feature in a
circuit interrupting device, such as a ground fault circuit interrupter
("GFCI"). A GFCI is a safety device used in conjunction with
electric circuitry that "use[s] a trip mechanism to mechanically break
an electrical connection between one or more input and output
conductors" in the event of a ground fault.2 '967 patent col.1 ll.29-30. The
broken electrical connection can subsequently be reset by depressing a
reset button. After a reset under normal circumstances, the GFCI will allow
current to resume flowing until another ground fault occurs, at which point
the trip mechanism will break the connection once again. Occasionally,
however, either an open neutral condition3 will develop in the power lines
feeding the GFCI, or a ground fault will damage the GFCI to such an extent
that it will be unable to detect future ground faults. In either case, it
is desirable to prevent the GFCI from resetting until the problem has been
remedied.
1 This action originally involved two
additional patents—U.S. Patent No. 6,282,070 and No.
6,288,882—which have subsequently dropped out of the case.
2 A ground fault occurs when an
alternate current path is created from the circuit to ground, such as, for
example, when an activated toaster is dropped into a water-filled bathtub.
3 An open neutral condition develops
when the neutral line from the power source separates from the input
terminals of the GFCI. In the prior art, an open neutral condition did not
prevent the GFCI from resetting. Although an appliance plugged into a
receptacle having a reset GFCI will not function so long as the open
neutral condition persists, the reset GFCI may still allow a dangerous path
to ground from a metal surface on the appliance to be created. Appellant's
Br. at 4.
2006-1272,
-1488 2
The
patents in suit all relate in one way or another to providing a reset
lockout feature that prevents the GFCI from resetting unless certain
conditions are met. The relevant portions of the claims at issue are
reproduced below:
1. A
circuit interrupting device comprising:
. . .
a reset
lock-out responsive to the occurrence of said predefined condition such
that said reset lock-out is operable between a lock-out position wherein
said reset lock-out inhibits resetting of said electrical connection
between said input and output conductors and a reset position wherein said
reset lock-out does not inhibit resetting of said electrical connection
between said input and output conductors; and
a reset
mechanism operatively associated with said reset lock-out and said circuit
interrupter such that activation of said reset mechanism activates said
circuit interrupter which facilitates movement of said reset lock-out from
said lock-out position to said reset position by said reset mechanism.
. . .
7. A
ground fault circuit interrupting device comprising:
. . .
a reset
mechanism having a reset lock-out responsive to activation of said circuit
interrupter so as to be movable between a lock-out position wherein said
reset lock-out inhibits resetting of said electrical connection between
said input and output conductors and a reset position wherein said reset
lock-out does not inhibit resetting of said electrical connection between
said input and output conductors, wherein when said reset mechanism is
activated said circuit interrupter is activated to facilitates movement of
said reset lock-out from said lock-out position to said reset position by
said reset mechanism and resets said electrical connection between said
input and output conductors.
. . .
12. A
circuit interrupting device comprising:
. . .
reset
lock-out means responsive to activation of said circuit interrupting means
for inhibiting resetting of said electrical connection between said input
and output conductor means after said circuit interrupting means breaks
said connection between said input and output conductor means; and
2006-1272,
-1488 3
reset
means disposed within said housing means for activating said circuit
interrupting means so that said lock-out means does not inhibit resetting
of said electrical connection between said input and output conductor means
and for resetting said electrical connection between said input and output
conductor means.
'967
patent col.6 l.53–col.8 l.49 (emphasis added).
1. A
circuit interrupting device comprising:
. . .
said
circuit interrupting device further comprising a reset lockout portion that
prevents reestablishing electrical continuity in said phase and neutral
conductive paths if said circuit interrupting portion is non-operational,
if an open neutral condition exists or if a reverse wiring condition
exists, wherein said reset portion comprises:
a reset
button; and
at least
one reset contact which when depressed is capable of contacting at least a
portion of said phase conductive path to cause said predetermined
condition, wherein if said circuit interrupting portion is operational, the
circuit interrupting portion is activated to disable said reset lockout
portion and facilitate reestablishing electrical continuity in said phase
and neutral conductive paths, and wherein if said circuit interrupting
portion is non-operational, said reset lockout portion remains enabled so
that reestablishing electrical continuity in said phase and neutral
conductive paths is prevented.
2. A
circuit interrupting device comprising:
. . .
said circuit
interrupting device further comprising a reset lockout portion that
prevents the making of electrical continuity between said first and second
conductive paths and between said first and third conductive paths, if said
circuit interrupting portion is non-operational;
and
wherein said reset portion comprises:
a reset
button; and
at least
one reset contact which when depressed is capable of contacting at least a
portion of one of said first or second conductive paths to cause said
predetermined condition, wherein if said circuit interrupting portion is
operational, said circuit interrupting portion is activated to disable
said
2006-1272,
-1488 4
reset
lockout portion and facilitate making of electrical continuity between said
first and second conductive paths and between said first and third
conductive paths, and wherein if said circuit interrupting portion is
non-operational, said reset lockout portion remains enabled so that making
of electrical continuity between said first and second conductive paths and
between said first and third conductive paths is prevented.
. . .
4. A
circuit interrupting system comprising:
. . .
said
circuit interrupting device further comprising a reset lockout portion that
prevents reestablishing electrical continuity in said phase and neutral
conductive paths if said circuit interrupting portion is non-operational or
if an open neutral condition exists;
and
wherein said reset portion comprises:
a reset
button; and
at least
one reset contact which when depressed is capable of contacting at least a
portion of said phase conductive path to cause said predetermined
condition, wherein if said circuit interrupting portion is operational,
said circuit interrupting portion is activated to disable said reset
lockout portion and facilitate reestablishing electrical continuity in said
phase and neutral conductive paths, and wherein if said circuit interrupting
portion is non-operational, said reset lockout portion remains enabled so
that reestablishing electrical continuity in said phase and neutral
conductive paths is prevented.
'558
patent col.11 l.62–col.14 l.52 (emphasis added).
1. A
circuit interrupting device comprising:
. . .
a circuit
interrupter disposed within said housing, the circuit interrupter having an
operational state and a non-operational state and configured to break the
continuity between said first and second conductive paths upon the
occurrence of a predetermined condition;
a reset
mechanism configured to make electrical continuity between the first and
second conductive paths after said predetermined condition occurs; and
2006-1272,
-1488 5
a reset
lock-out that prevents the making of electrical continuity between said
first and second conductive paths if said circuit interrupter is in the
non-operational state; and
wherein
activation of the reset mechanism activates the circuit interrupter to be
in the operational state to move the reset lock-out to a reset position.
. . .
5. A
circuit interrupting device comprising:
. . .
a reset
lock-out that prevents reestablishment of electrical continuity between
said first and second conductors if said circuit interrupter is non-operational.
. . .
22. A
circuit interrupting device comprising:
. . .
a circuit
interrupter disposed within said housing, the circuit interrupter having an
operational state and a non-operational state and configured to cause
electrical discontinuity between said first and second conductors upon the
occurrence of a predetermined condition;
a reset
device configured to reestablish electrical continuity between the first
and second conductors after said discontinuity is caused; and
a reset
lock-out device that prevents reestablishment of electrical continuity
between said first and second conductors if said third electrical conductor
is not connected to a neutral line; and
wherein
activation of the reset device activates the circuit interrupter to be in
the operational state to move the reset lock-out device to a reset
position.
'112
patent col.6 l.54–col.10 l.24 (emphasis added).
1. A reset
lockout device comprising:
. . .
a reset
actuator lockout connected to the reset actuator for blocking the enabling
of the switch reset unless the test succeeds.
. . .
14. A
circuit interrupting device for use with an electrical wiring system having
at least one conductor comprising:
2006-1272,
-1488 6
. . .
a reset
lockout portion that prevents reestablishing electrical continuity in said
first conductive path and said second conductive path if said circuit
interrupter is non-operational or if an open neutral condition exists;
wherein
activation of said reset portion first simulates at least one of the
predetermined conditions, wherein if said circuit interrupter is
operational, the circuit interrupter causes said reset lockout portion to
be disabled to facilitate reestablishing electrical continuity in said first
and second conductive paths.
'953
patent col.11 l.60–col.14 l.28 (emphasis added).
II
Meihao
filed this declaratory judgment action on July 23, 2003, seeking a
declaration that it does not infringe the Leviton patents mentioned above.
On March 3, 2005, the district court held a claim construction hearing, and
subsequently issued a thirty-six page written opinion construing the
disputed claim limitations. Shanghai Meihao Elec., Inc. v. Leviton Mfg.
Co., Inc., No. 03-2137 (D. Md. Apr. 22, 2005) ("Claim Construction
Opinion").
Although
there were many disputed limitations among the several patents in suit, the
district court's summary judgment decisions turned on two groups of
disputed claim terms: the "operational" terms and the "reset
lock-out" terms.4 The
district court construed the terms in each group as follows:
[T]he term
"operational" must be construed to mean "working
properly," and further, that both the sensing circuitry and the trip
mechanism must be working properly. When the circuit interrupter is
"operational," it is able to sense a fault and interrupt
electrical continuity in response to the fault. "Non-operational"
is the opposite of "operational" and must mean that the sensing
circuitry or the trip mechanism, or both, are not working properly,
4 The terms in each of these groups
are emphasized in the claims recited above.
2006-1272,
-1488 7
such that
the circuit interrupter is either not able to detect a fault or not able to
interrupt the electrical continuity when the fault occurs, or both.
Id., slip
op. at 32 (emphasis added).
[A]
"reset lock-out" must be construed as the latching finger of the
latching member working in cooperation with the contact arm, and
equivalents thereof that perform the identical function of inhibiting the
resetting of the electrical connection unless the circuit interrupter is
operational.
Id., slip
op. at 20-21 (emphasis added).
On July
15, 2005, Meihao moved for summary judgment of noninfringement of all
asserted claims, and for a permanent injunction to preclude Leviton from
pursuing suits involving the same patents and the same accused products.
Leviton responded on August 9, 2005, with a cross-motion for summary
judgment of infringement of claims 5 and 22 of the '112 patent. The court
first considered Leviton's motion and concluded that the Meihao GFCIs do
not infringe, either literally or under the doctrine of equivalents,
because they do not test the fault sensing circuitry as required by the
claims before allowing themselves to be reset. The court next considered
Meihao's motion and held that the accused devices do not literally infringe
the claims because they do not have a "reset lock-out" that
prevents resetting if the circuit interrupter is non-operational. The court
further held that there could be no infringement under the doctrine of
equivalents because the function of the "reset lock-out"
limitations is not met by the accused devices.
Accordingly,
the court denied Leviton's motion and granted Meihao's motion. Shanghai
Meihao Elec., Inc. v. Leviton Mfg. Co., Inc., No. 03-2137 (D. Md. Jan. 18,
2006) ("Summary Judgment Opinion"). Pursuant to Meihao's motion,
but without any
2006-1272,
-1488 8
explanation,
the district court also entered a permanent injunction which read in
relevant part:
ORDERED
that [Leviton] is hereby enjoined from in any way suggesting, asserting,
advising, or claiming to third parties, including but not limited to
Meihao's customers and their customers, that Meihao's GFCIs infringe the
Leviton Lockout Patents asserted in this action by Leviton against Meihao's
GFCIs, or suing or threatening a lawsuit for infringement of the Leviton
Lockout Patents against third parties based on their use, sale or offer for
sale of Meihao's GFCIs.
Shanghai
Meihao Elec., Inc. v. Leviton Mfg. Co., Inc., No. 03-2137 (D. Md. Jan. 18,
2006). Shortly after the entry of this injunction, Leviton filed a motion
for an order to show cause why the injunction should not be stricken,
arguing that the injunction did not comply with Federal Rule of Civil
Procedure 65(d) in terms of scope, specificity, or rationale. Leviton
further argued that the injunction was improper because there had been no
finding of "necessity," as required by the Fourth Circuit.
Leviton's motion was at least partially denied:
The motion
for show cause is hereby DENIED.
That said,
I agree with Leviton that the form of order entered in this case lacks the
specificity and precision that it has a right to insist upon. Obviously, I
simply employed the form of order proposed by plaintiff here. Nevertheless,
I see no need for the sort of protracted contentiousness that has
characterized the Leviton cases.
Leviton's
proposed [alternative] order is as inappropriate for its sparseness as is
the extant order for its clumsiness. The parties are directed to confer and
agree upon an appropriate order and submit same on or before February 10,
2006. The court has no intention to infringe on Leviton's First Amendment
rights to say whatever it chooses to say about anything.
JA at
A3404.
Pursuant
to the direction of the district court, the parties thereafter agreed upon
suitable language:
2006-1272,
-1488 9
ORDERED
that [Meihao's] Motion for Summary Judgment of Non-Infringement is granted
and that the Summary Judgment of Non-Infringement on behalf of Meihao is
hereby entered in accordance with the Court's January 18, 2006 Memorandum
Opinion, and it is further
ORDERED
that this Court having found as a matter of law that Meihao's GFCIs do not
infringe the claims of the Leviton Reset Lockout patents asserted in this
action (U.S. Patent No. 6,040,967, U.S. Patent No. 6,381,112, U.S. Patent
No. 6,437,953, U.S. Patent No. 6,246,558 (only claims 1, 2 and 4), U.S.
Patent No. 6,282,070 and/or U.S. Patent No. 6,288,882), [Leviton] and its
officers, agents, servants, employees and attorneys . . ., and those
persons in active concert or participation with them, are hereby enjoined
from initiating any suit for infringement of the aforesaid claims against
anyone who has or does hereafter buy, sell, offer for sale, import or use a
Meihao GFCI. "Meihao GFCIs" are those ground fault circuit
interrupters which were the subject of the Court's Memorandum Opinion
granting Meihao's Motion for Summary Judgment of Non-Infringement dated
January 18, 2006, specifically, Meihao GFCIs having the structure and
operation as described in the Court's Memorandum Opinion and as sold in the
United States during the years 2003 and 2004, bearing UL File Nos. E220379,
E197052, and E224920 and subsequent Meihao GFCIs substantially identical
thereto as to their structure and operation. Nothing in this Order is
intended to, or shall, prevent Leviton from submitting, or allow Leviton to
submit, pleadings, motions or other documents in litigations that were
ongoing as of January 18, 2006, to the extent those litigations involve
Meihao's GFCIs, or filing a notice of appeal and prosecuting any appeal in
this action from this Judgment, nor from exercising its rights under the
First Amendment to the U.S. Constitution by stating accurately any facts
relating to the judgment, and the effect of a successful appeal, as well as
its opinion as to what the result of such appeal may be, but will not
otherwise assert infringement or threaten suit for infringement with
respect to Meihao GFCIs under the aforesaid claims of the Leviton Reset
Lockout patents.
JA at
A32-A33. The district court also agreed to this language, and entered the
permanent injunction on February 15, 2006. Shanghai Meihao Elec., Inc. v.
Leviton Mfg. Co., Inc., No. 03-2137 (D. Md. Feb. 15, 2006).
This
appeal followed. We have jurisdiction pursuant to 28 U.S.C. §
1295(a).
2006-1272,
-1488 10
III
"We
review the district court's claim construction and the grant of summary
judgment based thereon without deference." Novartis Pharm. Corp. v.
Eon Labs Mfg., 363 F.3d 1306, 1308 (Fed. Cir. 2004).
Where the
question on appeal involving the issuance of an injunction is whether the
District Court complied with the procedural requirements of the Federal
Rules of Civil Procedure, we review that question under the law of the
applicable circuit. See Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d
850, 857 n.10 (Fed. Cir. 1991) (collecting cases); Chemlawn Servs. Corp. v.
GNC Pumps, Inc., 823 F.2d 515, 517 (Fed. Cir. 1987); Digital Equip. Corp.
v. Emulex Corp., 805 F.2d 380, 382 n.3 (Fed. Cir. 1986) (failure to provide
reasons for issuance of injunction reviewed under regional circuit law). In
this case, the law of the Fourth Circuit controls. Applying the law of that
circuit, "[w]e review the grant of a permanent injunction for an abuse
of discretion." Belk v. Charlotte-Mecklenburg Bd. of Educ., 269 F.3d
305, 347 (4th Cir. 2001). "Of course, underlying factual findings are
reviewed for clear error, and legal conclusions are reviewed de novo."
Va. Soc'y for Human Life, Inc. v. FEC, 263 F.3d 379, 392 (4th Cir. 2001).5
5 To be sure, this court applies its
own law in cases where the question presented, although procedural in
nature, "bears an essential relationship to matters committed to our
exclusive control by statute." Biodex, 946 F.2d at 858-59. Here,
although Leviton's appeal of the injunction entered below does not appear
to have "an essential relationship" to our jurisdiction, we need
not decide whether to apply our law instead of Fourth Circuit law because
we also review the grant of a permanent injunction for abuse of discretion.
Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293,
1301-02 (Fed. Cir 2005).
2006-1272,
-1488 11
IV
The crux
of this appeal is the district court's construction of the
"operational" terms and the "reset lock-out" terms. We
address each of these, and then we turn to the permanent injunction.
A
With
respect to "operational," Leviton focuses on the use of that term
in claims 5 and 22 of the '112 patent by arguing that the district court
improperly imported limitations from a preferred embodiment into the
claims. Leviton's most coherent argument in this regard relates to claim
22, which reads in relevant part:
22. A
circuit interrupting device comprising:
. . .
a circuit
interrupter disposed within said housing, the circuit interrupter having an
operational state and a non-operational state and configured to cause
electrical discontinuity between said first and second conductors upon the
occurrence of a predetermined condition;
. . .
a reset
lock-out device that prevents reestablishment of electrical continuity
between said first and second conductors if said third electrical conductor
is not connected to a neutral line; and
wherein
activation of the reset device activates the circuit interrupter to be in
the operational state to move the reset lock-out device to a reset
position.
'112
patent col.9 l.17–col.10 l.24 (emphasis added).
According
to Leviton, the plain language of the second limitation reproduced above
("a reset lock-out device . . .") demonstrates that claim 22 only
prevents reestablishment of electrical continuity if there is an open
neutral condition, i.e., the third wire "is not connected to a neutral
line." As such, the "operational state" of the circuit
interrupter referenced in the "wherein" clause is satisfied so
long as the circuit interrupter is able "to move the reset lock-out
device to a reset position."
2006-1272,
-1488 12
Although
we agree that activation of the circuit interrupter to be in the
operational state is necessary to move the reset lock-out position, the
remainder of Leviton's argument is unpersuasive because it ignores the
first limitation reproduced above ("a circuit interrupter disposed . .
."), which plainly ties the "operational state" of the
circuit interrupter to the ability of the circuit interrupter to
"cause electrical discontinuity . . . upon the occurrence of a
predetermined condition."6
The ability of the circuit interrupter to cause discontinuity
requires, as Leviton admits, both the sensing circuitry and the trip
mechanism to be working properly. Appellant's Br. at 3-4. Accordingly,
"activat[ing] the circuit interrupter to be in the operational
state" must also require both the sensing circuitry and the trip
mechanism to be working properly. This requirement is not inconsistent
with, and does nothing to eliminate, the additional requirement of claim 22
that the reset lock-out device must prevent reestablishment of electrical
continuity in the event of an open neutral condition.
Leviton
attempts to draw an even finer linguistic distinction with respect to claim
5 of the '112 patent:
Claim 5
does not discuss a device in terms of "operational," it recites a
device which will not allow itself to be reset if any one of its circuit
interrupter components is "non-operational." Accordingly, there
was no basis to limit the claim to a device that will allow reestablishment
of electrical continuity only after a complete test of the system to show
that it is fully operational.
6 Such "predetermined
conditions" include ground faults, arc faults, appliance leakage
faults, immersion faults, and test cycles. '112 patent col.2 ll.27-28.
However, an open neutral condition is not a "predetermined
condition" because an open neutral condition cuts off power to the
trip mechanism of the circuit interrupter. See id. col.3 ll.45-54. And it
is axiomatic that if the trip mechanism—which is
"electro-mechanical," id. col.3 ll.8-9—has no power, it
cannot cause electrical discontinuity. Thus, if an open neutral condition
could be one of the "predetermined conditions," the circuit
interrupter could not fulfill its stated purpose because it could not be
configured to cause discontinuity in response to such a condition.
2006-1272,
-1488 13
Appellant's
Br. at 25 (emphasis in original).
We
disagree. There is simply no way for the device to know in advance which of
its circuit interrupter components, if any, are not working properly.
Therefore, the device must, as the district court held, be capable of
testing both the sensing circuitry and the trip mechanism in order to
determine whether the circuit interrupter is operational. To be sure, a
situation may arise in which the first of those two components is found to
be malfunctioning, thereby rendering a test of the second component unnecessary.
That does not mean, however, that both components need not be tested before
electrical continuity is reestablished.
Leviton
further argues with respect to claim 5 that the doctrine of claim
differentiation precludes the district court's construction of
"non-operational" because dependent claims 12 and 13 respectively
describe preventing the reestablishment of electrical continuity "if
said trip mechanism is non-operational," and "if said sensing
circuitry is non-operational." '112 patent col.7 l.66 – col.8
l.6. Thus, according to Leviton, independent claim 5 is actually narrower
than dependent claims 12 and 13 under the district court's claim
construction. See Appellant's Reply Br. at 9-11. "As this court has
frequently stated, the presence of a dependent claim that adds a particular
limitation raises a presumption that the limitation in question is not
found in the independent claim." Liebel-Flarsheim Co. v. Medrad, Inc.,
358 F.3d 898, 910 (Fed. Cir. 2004). However, "that presumption can be
overcome if the circumstances suggest a different explanation, or if the
evidence favoring a different claim construction is strong." Id. Here,
the presumption is clearly overcome because, as explained in the preceding
paragraph, the device must be capable of testing both the sensing circuitry
and the trip
2006-1272,
-1488 14
mechanism
in order to determine whether the circuit interrupter is operational. If,
as Leviton suggests, electrical continuity could be reestablished when only
the trip mechanism is operational, or when only the sensing circuitry is
operational, the circuit interrupter would remain non-operational and the
device would not function properly, i.e., it would not cause electrical
discontinuity upon the occurrence of a predetermined condition. Therefore,
claim differentiation does not apply in this case.
Because we
are not persuaded by Leviton's arguments, we see no need to disturb the
district court's construction of "operational."
B
The thrust
of Leviton's "reset lock-out" argument is that the district court
improperly held that the function of the reset lock-out is to inhibit the
reestablishment of electrical continuity unless the circuit interrupter is
operational. Leviton points out that the reset lock-out can also inhibit
the reestablishment of electrical continuity if there is an open neutral
condition or if the circuit interrupting device is reverse wired. For
example, the "reset lock-out" limitation in claim 1 of the '558
patent reads:
said
circuit interrupting device further comprising a reset lockout portion that
prevents reestablishing electrical continuity in said phase and neutral
conductive paths if said circuit interrupting portion is non-operational,
if an open neutral condition exists or if a reverse wiring condition
exists[;]
'558
patent col.12 ll.20-25 (emphasis added). Thus, according to Leviton,
electrical continuity can be reestablished in some embodiments even if the
circuit interrupter is non-operational.
We are not
persuaded. Leviton's argument is essentially that the district court's
construction requires "or" to be replaced with "and."
However, the conditional statement in the excerpt above (i.e., "a
reset lockout portion that prevents reestablishing electrical
2006-1272,
-1488 15
not ,
continuity . . . if said circuit interrupting portion is non-operational,
if an open neutral condition exists or if a reverse wiring condition
exists") is exactly the same as the following conditional statement:
"a reset lockout portion that permits reestablishing electrical continuity
. . . only if said circuit interrupting portion is operational, an open
neutral condition does existand a reverse wiring condition does not
exist." It is therefore clear that, even in those claims where
additional features are incorporated through "or if" statements,
the circuit interrupter must be operational in order to reestablish
electrical continuity. As such, Leviton has not demonstrated a need to
reverse the district court's construction. Because Leviton provides us with
no alternative basis on which to disturb the summary judgment of
noninfringement entered below, we affirm that portion of the district
court's order on appeal.
C
In
granting permanent injunctions, district courts are bound by the
requirements set forth in Federal Rule of Civil Procedure 56, which
provides in relevant part:
Form and
Scope of Injunction or Restraining Order. (d) Every order granting an
injunction and every restraining order shall set forth the reasons for its
issuance; shall be specific in terms; shall describe in reasonable detail,
and not by reference to the complaint or other document, the act or acts
sought to be restrained; and is binding only upon the parties to the
action, their officers, agents, servants, employees, and attorneys, and
upon those persons in active concert or participation with them who receive
actual notice of the order by personal service or otherwise.
Fed. R.
Civ. P. 56(d) (emphasis added). Moreover, "[b]efore a court grants a
permanent injunction, the court must first find necessity – a danger
of future violations." Belk, 269 F.3d at 347.
2006-1272,
-1488 16
On its
face, the injunction entered by the district court, while specific and
reasonably detailed, plainly fails to "set forth the reasons for its
issuance." The only arguable reason for the injunction was enunciated
in the district court's order denying Leviton's motion to show cause:
"I see no need for the sort of protracted contentiousness that has
characterized the Leviton cases." Such a reason is insufficient as a
matter of law. Patent litigation is often both protracted and contentious.
Were that the appropriate standard, every losing litigant would be a
permanent-injunction candidate.
We also
discern no "necessity" for a permanent injunction. The present
case is unlike Kessler v. Eldred, 206 U.S. 285 (1907). There, Kessler and
Eldred were competitors in the business of selling electric cigar lighters.
Eldred owned a patent for an electric lamp lighter and sued Kessler for
patent infringement in the District of Indiana. Kessler prevailed, and a
judgment of noninfringement was entered in his favor. Eldred then sued
Breitwieser, a user of the very Kessler lighters previously held to be
noninfringing, in the Western District of New York. Kessler assumed
Breitwieser's defense, and, in light of the previous judgment of
noninfringement, sought to enjoin Eldred from pursuing any further lawsuits
against users of Kessler's lighters.
Under
these facts, the Supreme Court concluded that such an injunction was
necessary:
The effect
which may reasonably be anticipated of harassing the purchasers of
Kessler's manufactures by claims for damages on account of the use of them,
would be to diminish Kessler's opportunities for sale. No one wishes to buy
anything, if with it he must buy a law suit. That the effect to be
anticipated was the actual effect of the Breitwieser suit is shown by the
statement of facts. Kessler's customers ceased to send orders for lighters,
and even refused to pay for those which had already been delivered. Any
action which has such results is manifestly in
2006-1272,
-1488 17
violation
of the obligation of Eldred, and the corresponding right of Kessler,
established by the judgment. Leaving entirely out of view any rights which
Kessler's customers have or may have, it is Kessler's right that those
customers should, in respect of the articles before the court in the
previous judgment, be let alone by Eldred, and it is Eldred's duty to let
them alone. The judgment in the previous case fails of the full effect
which the law attaches to it if this is not so. If rights between litigants
are once established by the final judgment of a court of competent
jurisdiction those rights must be recognized in every way, and wherever the
judgment is entitled to respect, by those who are bound by it. Having then
by virtue of the judgment the right to sell his wares freely without
hindrance from Eldred, must Kessler stand by the see that right violated,
and then bring an action at law for the resulting damage, or may he prevent
the infliction of the unlawful injury by proceedings in personam in equity?
If Eldred succeeds in his suit against one of Kessler's customers, he will
naturally bring suits against others. He may bring suits against others,
whether he succeeds in one suit or not. There may be and there is likely to
be a multiplicity of suits. It is certain that such suits if unsuccessful
would at the same time tend to diminish Kessler's sales and to impose upon
him the expense of defending many suits in order to maintain the right
which by a judgment has already been declared to exist. If the suits are
successful the result will be practically to destroy Kessler's judgment
right.
Id. at
289-90.
Here, by
contrast, there is no evidence that Leviton has exhibited, or intends to
exhibit, the same cavalier attitude toward the judgment entered against it
as Eldred exhibited toward the judgment entered against him. Leviton, as
the owner of several issued patents, none of which have been declared
invalid, is well within its rights to enforce those patents. And until
recently, Leviton had not lost a case against Meihao's GFCIs. In the
absence of frivolity, such enforcement actions do not establish a
"necessity" for a permanent injunction of the type entered
against it below. Therefore, we reverse the district court's order to the
extent it permanently enjoins Leviton.
2006-1272,
-1488 18
V
In sum, we
affirm the district court's entry of summary judgment in favor of Meihao
and we reverse the district court's entry of a permanent injunction against
Leviton.
COSTS
No costs.
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