By Kevin E. Noonan --
The end of the consolidated omeprazole litigation may have been reached this week, when the Federal Circuit ruled on AstraZeneca's appeal over the validity of U.S. Patent No. 6,013,281. In its decision, the Court majority (Judges Rader and Bryson) upheld the District Court's finding that the '281 patent claims at issue were invalid as being inherently anticipated by a Korean patent publication, over a strong dissent by Judge Newman.
Unlike earlier incarnations of the dispute, which named several defendants, this case named generic pharmaceutical maker Andrx as the sole alleged infringer. The patent claims at issue recited AstraZeneca's formulation method for omeprazole. This formulation contains an alkaline reacting compound (ARC) to protect acid-sensitive omeprazole during transit through the stomach. The Federal Circuit affirmed the District Court's finding that Andrx infringed, but also affirmed the District Court's determination that AstraZeneca's claims were invalid for being either anticipated or obvious.
The claimed process was directed at the formation of a water-soluble separating layer between the acid-sensitive omeprazole core and the enteric coating, wherein the separating layer was formed in situ by a reaction between the ARC in the core and the enteric coating. As the Federal Circuit explained, "the '281 process produces an omeprazole formulation with three distinct layers, but starts with only two of the three layers," wherein the reaction produced a separating layer comprising a salt form of the enteric coating material. Independent claim 1 recited a minimum ARC concentration in the core required to form the separating layer, and dependent claims recited specific ARC compounds. Significant to the Federal Circuit's decision, the '281 specification contained process parameters (including temperature) not recited in the claims.
The prior art the District Court found invalidating was a Korean patent application that was in the art two years before AstraZeneca's earliest priority date. This patent application was not unknown to AstraZeneca, because it had been the basis for a lawsuit in Korea between AstraZeneca and the Korean applicant, Chong Kun Dan (CKD) Corp. over one of AstraZeneca's own Korean omeprazole formulation patents. CKD's patents did not provide any process conditions, which CKD was allowed to keep as trade secrets under Korean patent law. However, AstraZeneca's own testing done with regard to this Korean action supported the conclusion that the CKD formulation indeed contained a separating layer (albeit, according to AstraZeneca, a conventionally-applied layer), and AstraZeneca scientists testified to that effect in the Korean action. CKD's scientists steadfastly maintained throughout that their formulation did not contain a separating layer.
It was undisputed that AstraZeneca's inventors were unaware of the process conditions used by CKD when they conceived the '281 invention. After the AstraZeneca inventors determined the proper conditions for producing a separating layer in situ they became aware of CKD's conditions, which differed from their own and did not produce a separating layer in situ. One important difference was the formulation temperature: 42ºC using AstraZeneca's process and 70ºC using CKD's process.
Despite these differences, the District Court found the CKD patent application to be invalidating. The District Court's basis for finding anticipation was the disclosure in the CKD application of all the limitations of Claim 1 of the '281 patent except the phrase "forming in situ a separating layer." AstraZeneca contended that this phrase implicated the process steps recited in the '281 specification, specifically the 42ºC inlet air temperature, which was not disclosed in CKD's application. The District Court declined to import the temperature limitation into the claim, discerning no basis for doing so. Instead, the District Court determined whether the limitation in the disputed phrase was inherently disclosed in CKD's application not from the reference itself, but using AstraZeneca's assertions made in the Korean infringement action. Specifically, the District Court relied upon expert testimony by AstraZeneca's witnesses in the Korean action, that CKD's formulation contained a separating layer that was inherently produced by its formulation. These admissions were coupled by the District Court with testimony from Andrx's expert that a separating layer would form in CKD's formulation "each and every time," and the absence of contrary experimental evidence from AstraZeneca at trial. Moreover, AstraZeneca's trial expert's contrary testimony was proffered in the absence of his consideration of AstraZeneca's earlier testimony and other evidence from the Korean action, permitting the District Court to discount his testimony.
The Federal Circuit affirmed, applying its clear error standard of review for the factual findings made by the District Court. The presence of a separating layer in the CKD formulation was deemed inherent from the combination of the ingredients specified in CKD's Korean patent application, and thus the absence of any disclosure of the process by which CKD made its formulation was determined to be without any significance. The CAFC also affirmed the District Court's obviousness determination for AstraZeneca's dependent claim 9, which recited different ARC species than were disclosed in the CKD patent application. According to the CAFC, the District Court was correct in holding that there was no patentable difference between the ARC disclosed by CKD (arginine) and the ARC's recited in AstraZeneca's dependent claim 9 (alkaline salts of phosphoric acid, carbonic acid, or silicic acid).
Judge Newman was strenuous in her dissent. For her, the fact that the CKD Korean application does not disclose formulation conditions, much less describe AstraZeneca's conditions, and that it is "undisputed" that the practice of the disclosed CKD formulation does not produce a separating layer, was dispositive. The mere possibility that the cited art could produce the claimed product or that the skilled worker might be able to arrive at the claimed process from the teachings of the reference is not enough. While Judge Newman focused on whether the CKD patent application disclosed the process (which she determined did not), the majority agreed with the District Court that the presence of the recited ingredients was sufficient to produce a separating layer "each and every time" according to unrefuted (or at least insufficiently refuted) trial testimony. Curiously, the affirmative statements by Andrx's expert that formulations made according to CKD's patent specification would inherently produce a separating layer were unverified by experimental evidence, and as Judge Newman points out, were contrary to the conclusions of the Korean tribunal and CKD's own expert. Judge Newman also argued that the CKD application is not enabling, since it does not disclose the conditions necessary for preparing its formulations. Finally, Judge Newman was troubled by the majority's use of "secret information," i.e., the formulation conditions admittedly not disclosed in the CKD patent application.
Judge Newman has the better legal argument, but it is clear that AstraZeneca was defeated by a combination of poor claim drafting, its own prior inconsistent admissions, and the CAFC's standard of review. The fact that AstraZeneca's inventors were "spurred on" in their own developmental work by their belief that CKD inherently produced a separating layer in situ may also have been a consideration. AstraZeneca did not prevail, however, at least in part because the process limitations it relied upon at trial, including the inlet air temperature, were not recited even in a dependent claim. Under these circumstances, the clear lesson is to include process limitations in at least some dependent claims to a process, if a patentee intends to rely upon these limitations to distinguish over the prior art.
In re Omeprazole Patent Litigation (Fed. Cir. 2007)
Panel: Circuit Judges Newman, Rader, and Bryson
Opinion by Circuit Judge Rader
Opinion concurring in part and dissenting in part by Circuit Judge Newman