Roche Palo Alto LLC v. Apotex, Inc.

Citations: 531 F.3d 1372; 87 U.S.P.Q. 2d (BNA) 1308; 2008 U.S. App. LEXIS 14317; 2008 WL 2669287Docket: 2008-1021

Court: Court of Appeals for the Federal Circuit; July 9, 2008; Federal Appellate Court

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Roche Palo Alto LLC and Allergan, Inc. hold U.S. Patent No. 5,110,493, pertaining to a drug formulation for treating eye inflammation, which includes a non-steroidal anti-inflammatory drug (NSAID), a quaternary ammonium preservative, and a nonionic surfactant. The Federal Circuit affirmed the District Court's summary judgment that the patent is valid and has been infringed by Apotex, which filed two abbreviated new drug applications (ANDAs) claiming the patent is invalid or not infringed. The court found that the reverse doctrine of equivalents did not apply and that claim preclusion barred Apotex from asserting further validity challenges. The patent's validity was bolstered by the inclusion of the nonionic surfactant octoxynol 40 (O40), which was shown to produce unexpected results compared to other surfactants, leading to the allowance of the claims after an amendment and supporting declaration.

In 2001, Apotex submitted its first Abbreviated New Drug Application (ANDA-1) for a generic version of Roche’s ACULAR, followed by a second submission (ANDA-2) in 2005 for a generic version of ACULAR®LS. The formulations of both ANDAs differ in the concentration of O40, which is lower in ANDA-2, while the NaCl concentration remains unchanged and is covered by claim 1 of the ’493 patent. Roche's predecessor, Syntex, initiated litigation against Apotex for infringement related to ANDA-1, resulting in a district court ruling that the term "stabilizing amount" in claim 1 was not a limitation on the claim. The court subsequently found ANDA-1 to literally infringe the patent and upheld the patent's validity against various defenses raised by Apotex, including non-obviousness. The Federal Circuit affirmed some aspects of the district court's ruling but reversed its non-obviousness finding. Upon remand, the district court confirmed the patent's validity, which was again upheld by the Federal Circuit.

In 2005, Roche sued Apotex regarding ANDA-2, where Apotex asserted defenses including non-infringement and invalidity based on previous litigation outcomes. Roche sought summary judgment, arguing that the defenses were barred by issue and claim preclusion from prior cases. Apotex contended that ANDA-2 was distinct from ANDA-1 and that the change in law after the KSR case warranted reconsideration of preclusion doctrines. On September 11, 2007, the district court granted Roche's motion for summary judgment, affirming the infringement claim.

Apotex failed to establish the "principle" of the ’493 invention under the reverse doctrine of equivalents, as it did not adequately support its claim regarding the use of O40 for stability in formulations with reference to the relevant claim language, specification, prosecution history, or prior art. Consequently, the court ruled that Apotex did not meet its burden for a prima facie case of non-infringement. Furthermore, Apotex's arguments for invalidity and unenforceability were largely barred by issue preclusion due to the prior assertion of the patent's invalidity against Roche in a separate litigation. The court determined that issue preclusion applied even to grounds not raised in the initial case, following Ninth Circuit precedent. Regarding the obviousness claim, the court did not address whether the Supreme Court's KSR decision warranted an exception to issue preclusion, as it found that claim preclusion applied. The court deemed ANDA-1 and ANDA-2 products "essentially the same," preventing invalidity claims in the ANDA-2 case. The court also ruled that no fairness or change of law exception to claim preclusion existed post-KSR. Therefore, Apotex’s defenses of invalidity and unenforceability were barred, leading to its appeal. The court's summary judgment on non-infringement was reviewed de novo, adhering to established legal standards for claim construction and the reverse doctrine of equivalents, which is a factual determination. Apotex conceded that the ANDA-2 formulation literally fell within the scope of claim 1 of the ’493 patent but contested the non-infringement finding under the reverse doctrine of equivalents, intended to prevent unwarranted claims extension.

The Supreme Court established that if a device significantly changes from a patented invention but still falls within the literal claim, the reverse doctrine of equivalents can limit the claim and counter an infringement action. The burden of proof initially lies with the patentee, but if they prove literal infringement, the accused infringer must then present a prima facie case for non-infringement under this doctrine. The reverse doctrine of equivalents is infrequently applied, with no affirmations of non-infringement under it by the court to date. 

Apotex claims that the principle of the ’493 patent involves using O40 to form micelles that stabilize the formulation, supported by prosecution history and expert testimony. They argue that the claims do not explicitly mention micelles and that the court’s interpretation of “stabilizing amount” as an intended result does not negate their argument. Apotex further asserts that their ANDA-2 formulation stabilizes differently, using NaCl instead of O40, which operates through a different mechanism.

Consequently, Apotex believes it has demonstrated a prima facie case of non-infringement, shifting the burden to Roche to counter with scientific evidence, which they claim Roche failed to provide. Apotex contends that the district court erred by not recognizing a genuine issue of material fact. However, the court determined that Apotex did not establish a prima facie case, as it failed to adequately define the principle of the ’493 patent in relation to the specification, prosecution history, and prior art, relying solely on expert testimony.

The district court found that the term “micelle” is not referenced in the claims, specification, or prosecution history of the ’493 patent. It upheld the construction of claim 1, stating that “stabilizing amount” is not a limitation but an intended result, since a concentration range for O40 is explicitly defined. There is no evidence supporting micelle formation or effective stabilization through KT/BAC interaction prevention. The prosecution history was not presented by Apotex in the district court to support its claim, and there is no indication that the examiner credited O40's unexpected results to micelle formation. The claims encompass O40 concentrations ranging from 0.001% to 10% wt/vol, with Example 3 detailing a formulation with 0.004% wt/vol, identical to the ANDA-2 formulation. Consequently, the district court determined that Apotex failed to substantiate its claimed principle of the invention, leading to a lack of a prima facie case for non-infringement under the reverse doctrine of equivalents. Apotex contended that if the ’493 claims cover the entire O40 concentration range, they are invalid for lack of enablement under 35 U.S.C. 112 and for obviousness under 35 U.S.C. 103, as not all concentrations yield micelles. These arguments pertain to the validity of the claims, thus Roche was not obligated to counter the prima facie case. The district court’s rejection of Apotex’s reverse doctrine of equivalents defense and its summary judgment of literal infringement by the ANDA-2 formulation were upheld. Apotex also argued that its validity challenges were barred by claim preclusion, which requires the same parties and cause of action, along with final judgment in prior litigation. Apotex acknowledged the finality of the Syntex litigation and the involvement of the same parties but disputed that the current ANDA-2 formulation litigation involved the same claim as the earlier ANDA-1 formulation litigation. The determination of whether two infringement claims constitute the same claim falls under Federal Circuit law.

An infringement claim in a subsequent lawsuit is deemed the "same claim" as in a prior suit if the accused products are "essentially the same," defined as having differences that are merely "colorable" or unrelated to the patent claims. The burden of proof lies with the party asserting claim preclusion. Apotex argues that Roche failed to demonstrate that the ANDA-2 formulation is essentially the same as the ANDA-1 formulation, as Roche did not provide expert testimony or evidence. Apotex's evidence, the Mitra Declaration, indicates that the ANDA-2 formulation lacks sufficient O40 concentration to form micelles, making it materially different. Apotex highlights that the formulations are stabilized by different mechanisms—micelle formation for ANDA-1 and ionic shielding for ANDA-2—and that a separate ANDA filing supports their differences. The district court concluded that the two formulations are essentially the same since their differences are unrelated to the ’493 patent claims, with all ingredient concentrations falling within claimed ranges. The court found the stabilization mechanisms irrelevant, deeming any differences colorable. Apotex also argues for an exception to claim preclusion due to changes in the law of obviousness post-KSR, asserting that fairness should apply. However, the district court correctly maintained that no change of law or fairness exception exists to prevent claim preclusion, adhering to the principle that alterations in law after a final judgment do not negate res judicata, except in rare cases involving fundamental constitutional rights, which is not applicable here.

The Supreme Court stated that the res judicata effects of a final, unappealed judgment on the merits are not altered by the possibility of the judgment being incorrect or based on subsequently overruled legal principles. Allowing a different interpretation would lead to uncertainty and confusion, undermining the intended conclusive nature of judgments, which the res judicata doctrine seeks to preserve. Consequently, the KSR decision does not impede the application of claim preclusion. The district court correctly concluded that Apotex’s validity challenges to the ’493 patent were barred by claim preclusion. As the determination of claim preclusion suffices, the court did not address the potential application of issue preclusion regarding the same challenges. Thus, the district court’s summary judgment in favor of Roche, affirming that the ANDA-2 formulation infringes the ’493 patent and that Apotex's challenges are barred, is upheld.