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Court Remands for Proper Application of the “Two-Way Test” for Determining Interference

December 23, 2003
Tridico Ph.D., Anthony C.

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Last Month at the Federal Circuit - January 2004

Judges: Gajarsa (author), Clevenger, and Dyk

In Medichem, S.A. v Rolabo, S.L., No. 02- 1461 (Fed. Cir. Dec. 23, 2003), the Federal Circuit vacated a district court’s priority determination and remanded the case for further proceedings because the district court erred in its application of the two-way test for identifying an interference.

Medichem, S.A. (“Medichem”) is the assignee of U.S. Patent No. 6,084,100 (“the ‘100 patent”), which is directed to a process for the preparation of Loratadine, the active ingredient in the allergy medication Claritin®. Rolabo, S.L. (“Rolabo”) is the assignee of U.S. Patent No. 6,093,827 (“the ‘827 patent”), which is also directed to a process for the preparation of Loratadine. The claimed process of the ‘100 patent requires the presence of a tertiary amine that is absent from the ‘827 patent process.

Medichem filed a complaint under 35 U.S.C. § 291, which provides a cause of action to one patent owner against another when the claimed inventions of their respective patents interfere with one another. Under the “two-way test” for determining whether an interference in fact exists, the claimed invention of Party A is presumed to be prior art vis-à-vis Party B and vice versa. The claimed invention of Party A must anticipate or render obvious the claimed invention of Party B and the claimed invention of Party B must anticipate or render obvious the claimed invention of Party A. In applying the two-way test, the district court first treated the ‘100 patent as prior art and concluded that removal of the tertiary amine to obtain the ‘827 patent process would not have been obvious. As a result, there could be no interference-in-fact, and there was no need to apply the second leg of the two-way test.

On appeal, the Federal Circuit first considered the district court’s claim construction of the transition term “comprising” in the ‘827 patent claims. The Federal Circuit found that the district court had erred in assuming that the absence of an affirmative claiming of tertiary amines excluded them from the scope of the claims. While the process described by the ‘827 patent does not require the presence of a tertiary amine, the Court concluded that the claims could not be read to exclude it.

The Federal Circuit then turned to the interference-in-fact analysis. According to the Federal Circuit, the district court was correct in attempting to define whether an interference-in-fact existed by using the twoway test. However, the Federal Circuit reversed the district court’s findings that the first leg of the two-way test was not satisfied since, when the claims are properly construed, claims 1 and 2 of the ‘100 patent plainly anticipate claims 1 and 17 of the ‘827 patent. The Federal Circuit concluded that the ‘100 patent teaches a process that falls within the scope of the claims of the ‘827 patent. As the district court made no findings of fact regarding the second leg of the interference inquiry, the Federal Circuit was unable to undertake any review and the case was remanded back to the district court to make factual determinations of anticipation and obviousness for this portion of the interference inquiry. The Federal Circuit also vacated the district court’s determination that Medichem had established priority of the ‘100 patent, ruling that without first identifying an interference-in-fact under the two-way test, the district court had no jurisdiction to make a priority determination between two patents.

Finally, the Federal Circuit pointed out that since the Board had declared an interferencein- fact between claim 2 of the ‘100 patent, upon which one of the inventors had filed a reissue application, and claim 17 of the ‘827 patent, the district court had the discretion to stay the proceedings pending the outcome of the PTO proceedings.