Abbott Laboratories v. Geneva Pharmaceuticals, Inc., and Novopharm Limited, and Invamed, Inc.

Citation: 182 F.3d 1315Docket: 98-1593

Court: Court of Appeals for the Federal Circuit; August 5, 1999; Federal Appellate Court

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Abbott Laboratories filed an appeal against a summary judgment from the United States District Court for the Northern District of Illinois, which declared claim 4 of its U.S. Patent 5,504,207 invalid due to the on-sale provision under 35 U.S.C. § 102(b). The Federal Circuit Court affirmed the district court's decision. The patent pertains to terazosin hydrochloride, a drug marketed by Abbott under the name Hytrin since 1987, specifically claiming the anhydrous Form IV of the compound. Abbott sued Geneva Pharmaceuticals, Novopharm Limited, and Invamed, Inc. for patent infringement after these companies submitted Abbreviated New Drug Applications (ANDAs) to produce a generic version of Hytrin. The defendants contended that Form IV was anticipated and thus invalid, as it had been sold in the U.S. more than one year prior to the patent’s filing date of October 18, 1994.

Byron Chemical Company, Inc. made three sales of Form IV terazosin hydrochloride anhydrate in the U.S. prior to the critical patent filing date of October 18, 1994. The sales occurred between 1989 and 1992 to defendants Geneva and Warner Chilcott Laboratories, with Byron sourcing the compound from foreign manufacturers. The specific crystalline form was unknown to the parties at the time of sale, and the identity of Form IV was only established post-transaction through testing by Abbott and Geneva.

The district court granted summary judgment in favor of the defendants, concluding that the sales invalidated claim 4 under the on-sale bar, reasoning that Form IV had entered the public domain, regardless of the parties' lack of awareness regarding the crystalline form at the time of sale. Abbott appealed, asserting that the invention was not on sale since the parties did not "conceive" the nature of the product involved. The defendants countered that the Supreme Court's two-part test from Pfaff v. Wells Electronics, Inc. applied, which does not require the parties' knowledge of the specific crystalline form for the on-sale bar to be effective. The court's review of summary judgment is de novo, focusing on whether any genuine issue of material fact exists or if the moving party is entitled to judgment as a matter of law. The burden of proof lies with the defendants to establish the on-sale bar's applicability by clear and convincing evidence.

Claim 4 is deemed invalid, with the parties' lack of awareness regarding Form IV being irrelevant. The Supreme Court's two-part test for the on-sale bar requires that before the critical date, an invention must be both commercially sold or offered for sale and "ready for patenting." The invention in question satisfies this test, as Form IV was sold commercially in the U.S. prior to the critical date, and two foreign manufacturers had reduced it to practice. Reduction to practice occurs when a composition of matter is fully composed. The on-sale bar applies regardless of whether sales were made by third parties, rendering Abbott's involvement irrelevant.

Abbott argues that proof of conception is necessary for the on-sale bar to apply, claiming that the lack of knowledge about the crystalline nature of the sold material negates conception. However, it is established that the sale of a useful material implies reduction to practice, negating the need for conception proof in this context. Abbott also references cases where unintended production did not constitute anticipation, but these are not applicable here, as the sold material was useful and acknowledged, unlike the unappreciated results in those precedents.

Abbott contends that the claimed invention was not on sale because the sellers lacked knowledge of all its characteristics. This argument is rejected based on established legal principles indicating that a sales offer does not need to specify every characteristic of the invention, nor must the parties recognize all its attributes at the time of sale. If a product inherently includes all limitations of the claims, it is considered "on sale," regardless of the parties' awareness. In this case, Form IV is confirmed to fall within the scope of claim 4, making the parties' ignorance about it irrelevant.

The on-sale bar aims to prevent the retraction of inventions that have entered the public domain through commercialization. Significant quantities of Form IV terazosin anhydrate were sold publicly in the U.S. between 1989 and 1991, before Abbott's application in October 1994. Accepting Abbott's position could allow for patent claims on compounds whose properties were not fully known at the time of sale, contradicting the principle that the discovery of new properties does not make previously known compounds patentable.

The district court's judgment declaring claim 4 of the '207 patent invalid under 35 U.S.C. § 102(b) is affirmed. The court correctly granted summary judgment, supporting the conclusion that the on-sale bar applies due to the prior public sales. Additionally, it is noted that filing an Abbreviated New Drug Application (ANDA) under specific circumstances constitutes patent infringement, and both Abbott and Geneva conducted analyses confirming the characteristics of Form IV. Defendants Geneva and Novopharm, along with Invamed, sought summary judgment for the invalidity of claim 4 based on the on-sale bar.