Pharmacia & Upjohn Company v. Mylan Pharmaceuticals, Inc.
Docket: 98-1360
Court: Court of Appeals for the Federal Circuit; March 17, 1999; Federal Appellate Court
Pharmacia Upjohn Company (Upjohn) appealed a summary judgment decision by the United States District Court for the Northern District of West Virginia, which favored Mylan Pharmaceuticals, Inc. (Mylan). The district court ruled that Mylan did not infringe Upjohn's U.S. Patent 4,916,163 under the doctrine of equivalents due to prosecution history estoppel. Additionally, Upjohn was collaterally estopped from asserting its infringement claim because of a prior ruling declaring the patent invalid and unenforceable.
The patent concerns formulations of the anti-diabetic drug glyburide, specifically emphasizing the use of spray-dried lactose as a principal excipient in compositions. The independent claim of the patent specifies that spray-dried lactose must constitute at least 70% by weight of the final composition. Mylan, a generic manufacturer, developed its own glyburide formulations using anhydrous lactose instead of spray-dried lactose and submitted an Abbreviated New Drug Application (ANDA) to the FDA for approval of various tablet dosages, asserting non-infringement of Upjohn's patent. Mylan notified Upjohn of its ANDA submissions, explaining its position on patent non-infringement. The appellate court affirmed the district court's conclusions, finding no error in its judgment.
Upjohn filed a lawsuit against Mylan in district court, claiming that Mylan's Abbreviated New Drug Application (ANDA) for micronized glyburide compositions infringed claims 1 through 4 of the '163 patent under 35 U.S.C. § 271(e)(2). Upjohn conceded it could not prove literal infringement but argued infringement under the doctrine of equivalents, asserting that "anhydrous lactose" was equivalent to "spray-dried lactose." Mylan sought summary judgment, contending that prosecution history estoppel barred Upjohn's claims and that Upjohn was collaterally estopped due to a prior judgment in Upjohn Co. v. Mova Pharmaceutical Corp., which found the '163 patent invalid and unenforceable.
The district court noted that Upjohn had emphasized the necessity of spray-dried lactose during the patent's prosecution, arguing its criticality for realizing the invention's advantages. The court concluded that a reasonable competitor would interpret Upjohn's assertions as relinquishing any claims covering compositions using nonspray-dried lactose, thus applying prosecution history estoppel. Additionally, the court ruled that collateral estoppel applied due to the prior invalidity and unenforceability judgment in Mova. Upjohn appealed the rulings on both estoppel grounds.
The appellate court has jurisdiction under 28 U.S.C. § 1295(a)(1) and reviews the grant of summary judgment de novo, determining if there are genuine issues of material fact while favoring the non-moving party. It also reviews de novo the application of prosecution history and collateral estoppel.
Upjohn contends that the court misinterpreted the prosecution history by focusing on selected statements and erroneously concluded that Upjohn had relinquished all micronized glyburide formulations with lactose types other than spray-dried lactose. It asserts that not every statement made to differentiate from prior art creates estoppel and that the prosecution history must be assessed in its entirety. Upjohn claims that "nonspray-dried" lactose referred specifically to ordinary, hydrous lactose, suggesting that only formulations with micronized glyburide and hydrous lactose were forfeited. It emphasizes that there were no definitive assertions of surrender regarding anhydrous lactose, nor were there any claim amendments to that effect. The declarations from inventor Dr. Philip Ni highlighted distinctions only between hydrous and spray-dried lactose formulations. Upjohn also argues that any ambiguity regarding "nonspray-dried lactose" would not invoke estoppel.
Mylan counters that the district court appropriately considered the full context of the statements and maintains that clear assertions in the prosecution history demonstrate Upjohn's relinquishment of formulations lacking spray-dried lactose as a primary excipient. The court agrees with Mylan, concluding that Upjohn is barred under the doctrine of equivalents from claiming Mylan's formulations with micronized glyburide and anhydrous lactose fall within the '163 patent's scope. Prosecution history estoppel prevents a patentee from claiming coverage for subject matter conceded during patent application prosecution. Various actions during prosecution, such as arguments made for claim allowance, can lead to this estoppel, provided they show a clear and unmistakable surrender of subject matter. An objective test is applied to determine what has been relinquished, assessing whether a competitor would reasonably conclude that the applicant had surrendered the relevant subject matter.
The district court's conclusion was based on two critical aspects of the prosecution history: the attorney's response to the first office action and the Board's opinion reversing the examiner's rejection of the claims under 35 U.S.C. 103. In the first office action, the examiner rejected four patent claims as obvious based on various prior patents. In response, Upjohn's attorney argued that the use of spray-dried lactose is a critical feature, asserting that formulations lacking this component are not manufacturable. The court interpreted this as a "clear and unmistakable surrender" of micronized glyburide formulations without spray-dried lactose. Upjohn contended that this should be read in the context of a subsequent paragraph referencing inventor Ni's declaration, which distinguished between formulations with spray-dried lactose and those with conventional lactose. However, the court found Upjohn’s distinction unpersuasive, interpreting the first paragraph as a broad disclaimer of formulations lacking spray-dried lactose, while the second paragraph provided a specific comparison. The court also noted that Ni's statements reinforced the significance of spray-dried lactose, stating that its absence negates the advantages of the invention. Upjohn’s claims that the terms "ordinary" and "nonspray-dried lactose" were synonymous were similarly rejected as unconvincing by the court.
Ni's statements indicate that spray-dried lactose is essential to the claimed formulations, a point Upjohn fails to adequately rebut. The third sentence, interpreted as affirming the importance of spray-dried lactose, suggests that Upjohn's formulations using this ingredient are superior. The Board's opinion, which reversed the examiner's decision, supports this interpretation, affirming that spray-dried lactose is critical and that Upjohn waived rights to formulations using nonspray-dried lactose. Consequently, the district court correctly determined that Upjohn cannot claim infringement by Mylan’s formulations with anhydrous lactose under the doctrine of equivalents.
Regarding collateral estoppel, Upjohn argues the district court erred by applying the Mova judgment, claiming the jury misunderstood the technical issues and that it lacked a fair opportunity to litigate. Upjohn also suggests the court should have stayed its proceedings pending the resolution of its motion for judgment as a matter of law (JMOL) in Mova. Mylan counters that Upjohn had a fair chance to litigate and simply disagrees with the outcome, asserting the jury understood the technology involved. Mylan also refutes Upjohn’s claims of uncertainty regarding the Mova judgment's applicability and argues against consolidating the appeals. The court found Upjohn's arguments unconvincing, affirming that the district court did not err in applying collateral estoppel, which prevents relitigation of issues fully and fairly resolved in a prior case.
In patent infringement cases, the Supreme Court established in Blonder-Tongue that if a patent is deemed invalid in a suit against one alleged infringer, an unrelated party sued for infringement can benefit from that invalidity ruling through collateral estoppel. This principle also applies to determinations of unenforceability. However, a patentee can challenge the collateral estoppel effect if they can prove they lacked a full and fair opportunity to litigate in the prior case. Factors influencing this assessment include whether the initial case adhered to the standards set in Graham v. John Deere Co. and whether the patentee was deprived of key evidence or witnesses.
Upjohn contended it did not receive a fair opportunity to litigate, arguing that the jury in the previous case must have misunderstood the subject matter to arrive at its verdicts of invalidity and unenforceability. The court rejected Upjohn's argument, emphasizing that its review was limited to the district court's application of collateral estoppel, not the jury's verdict correctness. The Mova court's detailed opinion confirmed that Upjohn was afforded a full and fair opportunity to litigate, providing thorough analyses of both obviousness and inequitable conduct in its decision-making process.
Proper articulation of the law by the court supports the conclusion that the patentee, Upjohn, had a full and fair opportunity to litigate, as referenced in Blonder-Tongue. The Mova court's thorough analysis, which included a nearly month-long trial, indicates that the jury understood the straightforward pharmaceutical technology at issue. Upjohn has not provided evidence that the jury failed to comprehend the complexities of the case, as losing a case does not imply a lack of understanding. Upjohn contends that the district court should have stayed proceedings while its motion for judgment as a matter of law (JMOL) or new trial in Mova was pending, and argues for consolidation of appeals. However, the court disagrees, asserting that Upjohn's arguments challenge the finality of the Mova judgment, which has full collateral estoppel effect. Case law supports the notion that a final judgment retains its res judicata consequences regardless of pending appeals, as seen in the Fourth Circuit's stance and other circuit precedents. The district court was correct in applying collateral estoppel to the Mova judgment despite Upjohn's pending motions, as the presence of such motions does not affect a judgment's finality or its preclusive effect.
Finality for claim preclusion purposes should attach at the entry of judgment, treating post-trial motions similarly to appeals. While it may be advantageous for a district court to allow time for resolving post-trial motions before applying collateral estoppel, it is generally wiser to delay subsequent proceedings only briefly. The Fourth Circuit is expected to align with this view.
In this case, the Mova judgment was entered on December 2, 1997, and the district court granted collateral estoppel effect to it on March 31, 1998. Given Mylan's delays due to litigation with Upjohn, the district court acted appropriately by not awaiting the resolution of Upjohn's motion for judgment as a matter of law or a new trial, which could have prolonged the proceedings unnecessarily.
Consequently, the district court correctly applied collateral estoppel based on the Mova judgment despite pending motions and potential appeals. Upjohn’s request to consolidate appeals was denied, with the option for them to seek modifications later if the Mova jury verdicts are reversed.
The district court's summary judgment ruling that Mylan does not infringe the '163 patent under the doctrine of equivalents, due to prosecution history estoppel, was affirmed. The court clarified its holding and order in light of some inconsistencies in its prior reasoning. The standards for determining claim meaning and the scope relinquished during prosecution are viewed from the perspectives of both a reasonable competitor and a person skilled in the art, which are not necessarily at odds.
The reasonable competitor standard, as outlined in Cybor, applies in this case. Upjohn's patent description explicitly states that spray-dried lactose is essential for the efficacy of micronized glyburide formulations. The successful formulation must primarily consist of spray-dried lactose by weight. The application of Blonder-Tongue, a patent law issue, falls under this court's exclusive jurisdiction, whereas the application of general collateral estoppel principles, such as judgment finality, must adhere to the law of the Fourth Circuit, where the district court is located. Post-trial motions are typically resolved shortly after a judgment, making cases like this uncommon. In this instance, the court addressed Upjohn's motion for judgment as a matter of law (JMOL) or new trial nearly nine months after the initial judgment. The district court determined that the Mova verdict rendered Upjohn's '163 patent unenforceable, granting judgment for Mylan on non-infringement and invalidity. However, the district court's analysis indicates that Upjohn is only collaterally estopped from asserting infringement claims based on the Mova judgment, not that the patent itself is invalid or unenforceable. Therefore, the judgment should reflect that Mylan does not infringe U.S. Patent 4,916,163 under the doctrine of equivalents, and Upjohn is collaterally estopped from making infringement claims based on Mova's invalidity ruling.
