Reexamined patent claims are assumed to be subset of original patent claims unless proven otherwise, for application of res judicata (claim preclusion).

Le-Nhung McLeland | April 24, 2014

Senju Pharmaceutical Co., Ltd., Kyorin Pharmaceutical Co., Ltd., and Allergan, Inc. v. Apotex Inc. and Apotex Corp.

March 31, 2014

Panel: Newman, Plager (author) and O’Malley (dissent).

Background: Appeal from U.S. District Court for the District of Delaware.

Senju Pharmaceutical Co., Ltd. and Kyorin Pharmaceutical Co., Ltd. (collectively referred to as “Senju”) jointly own U.S. Patent No. 6,333,045 for aqueous pharmaceutical formulations of the antibiotic Gatifloxacin. Allergan is the exclusive licensee under this patent for ophthalmic uses, and produces under license eye drops for treating the “pink eye” infection. The eye drop formulation contains disodium edetate (EDTA) which improves passage of the antibiotic through the cornea of the eye.

Apotex Inc. is a Canadian generic drug manufacturer which plans to formulate an ophthalmic solution containing the antibiotic, to be marketed by Apotex Corp. which is based in the U.S. Following the procedure enacted under the Hatch-Waxman Act, Apotex (referring collectively to Apotex, Inc. and Apotex, Corp.) filed with the FDA in July 2007 an Abbreviated New Drug Application (ANDA) for a generic version of the ophthalmic drug containing the antibiotic. Also under this procedure, Apotex filed a patent certification with the FDA and notified Senju about the certification. [This notice is required when the ANDA applicant certifies that a patent named in the New Drug Application (NDA) for the original drug is “invalid, unenforceable, or will not be infringed by the manufacture, use, or sale” of the generic drug. After receiving the notice, the NDA holder may sue the ANDA applicant for patent infringement under the provisions of 35 USC §271(e)(2)(A).] As would be expected, Senju filed suit against Apotex, alleging infringement of claims 1-3 and 6-9 of the patent.

The district court conducted a bench trial and held in June 2010 that, although the ANDA product infringed claims 1-3, 6, 7, and 9 of the patent, all of the asserted claims were invalid for obviousness. Senju filed a motion for a new trial or to amend the district court’s judgment and findings. The district court issued its final judgment in December 2011, and this judgment was eventually affirmed by the CAFC.

Before the final judgment was entered by the district court, Senju filed a request for reexamination of claims 1-3, 6, 8 and 9 of the patent. During reexamination Senju amended claim 6 to include new limitations, notably reciting the amount of the antibiotic, the amount of EDTA, and the pH of the solution. Senju also added new independent claim 12 which has similar limitations, and new dependent claims 13-16. In October 2011 the PTO issued a certificate of reexamination cancelling claims 1-3 and 8-11, and certifying amended claim 6, new independent claim 12 and new dependent claims 13-16 as patentable.

In November 2011, before the district court issued its final judgment in the first suit, Senju filed a second suit against Apotex for infringement of the claims in the reexamination certificate. After final judgment was entered in the first suit, Apotex moved for dismissal of the second suit under the doctrine of “claim preclusion” (previously known as res judicata.) The district court agreed that Senju had asserted the same cause of action in the second suit as in the first suit. The district court granted Apotex’s motion and entered final judgment for Apotex. Senju appeals the dismissal of this second suit.

Discussion:

The CAFC looks to the law of the Third Circuit (the home circuit of the district court in this case) for the principles of claim preclusion. However, the CAFC applies its own law to the question of whether a cause of action in a patent case is the same as or different from another cause of action in a patent case.

Under Third Circuit law, claim preclusion requires the following elements: (1) there has been a final judgment on the merits in a prior suit involving (2) the same parties or their privies, and (3) a subsequent suit is based on the same cause of action. If all three conditions are met, the second suit is barred by the doctrine of claim preclusion. The parties disagree only on the third point, i.e., whether the two suits were based on the same cause of action.

In determining whether a cause of action is the same as in a previous suit, the CAFC looks at the “factual overlap” between the two cases, namely:

(1)   whether there is any overlap in the accused products (or accused processes) in the two suits; and

(2)   whether the same patent is involved in both suits.

In the first leg of the inquiry, there is complete overlap in the accused products in this case. The two suits involve the same product, i.e., the same solution, described in the same ANDA.

In the second leg of the inquiry, the CAFC looks at the patent rights involved in the two suits. Those patent rights are represented by the original patent claims and the “reexamination” patent claims. Citing the statutory prohibition against claim amendments during reexamination which would enlarge the scope of a claim, the CAFC points out that “a reexamined patent claim cannot contain within its scope any product or process which would not have infringed the original claims.” The holding in the majority opinion explains that no new cause of action is created because it can be assumed that the reexamined claims are a subset of the original claims:

“We hold that, in the absence of a clear showing that such a material difference in fact exists in a disputed patentable reexamination claim, it can be assumed (emphasis added) that the reexamined claims will be a subset of the original claims and that no new cause of action will be created. This applies whether the judgment in the original suit was based on invalidity of the claims or simply on non-infringement.”

The judgment of the district court (that the second suit is barred on the principles of claim preclusion) is affirmed.

Dissent: Judge O’Malley distinguishes between the “scope” of a claim and the “rights” conveyed by a claim. She faults the majority opinion for failing to consider how issues of validity affect the preclusion analysis. She agrees with the majority that “a product that does not infringe a broad original claim will, in every instance, not infringe a narrower reexamined claim”. Judge O’Malley asserts, however, that the same analysis does not apply to validity determinations. In her view, Senju had no patent rights when the original patent claims were invalidated. She would vacate the judgment of the district court and remand for a determination of whether the reexamined claims are “substantially the same” as the original claims, as requested by Apotex.

Takeaway: In view of the presumption articulated in the majority opinion, a patent owner who seeks to enforce a reexamined patent had better place great emphasis during trial on presenting evidence to show that the reexamined claims are materially different from the original claims, as opposed to being merely a subset of the original claims.

Full Opinion

U.S. Patent No. 6,333,045

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