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Noninfringement Finding in ANDA Suit Does Not Estop Later Suit Against Commercial Product

01-1329
February 07, 2002

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Last Month at the Federal Circuit - March 2002

Judges: Rader (author), Michel, and Friedman

In Bayer AG v. Biovail Corp., No. 01-1329 (Fed. Cir. Feb. 7, 2002), the Federal Circuit vacated and remanded a district court’s grant of SJ dismissing two separate suits brought against the Defendants on the grounds of collateral estoppel.

Bayer AG (“Bayer”) brought two separate infringement suits against several Defendants (collectively “Elan”), charging them with infringement of Bayer’s U.S. Patent No. 5,264,446 (“the ‘446 patent”). The ‘446 patent claims a pharmaceutical composition sold by Bayer that comprises an active ingredient having crystals with a specific range of surface areas.

In the first suit, Bayer alleged that Elan’s filing of an Abbreviated New Drug Application (“ANDA”) with the Food and Drug Administration seeking approval to market a generic 60 mg version of Bayer’s drug infringed the ‘446 patent under 35 U.S.C. § 271(e)(2)(A) (“the 60 mg ANDA case”). In the second suit, Bayer charged Elan with infringement of the ‘446 patent by Elan’s commercial marketing of a generic 30 mg version of Bayer’s drug (“the 30 mg commercial case”). The district court granted SJ dismissing both cases.

The district court held that Bayer was collaterally estopped by an earlier court’s decision regarding Elan’s filing of an ANDA to sell a generic 30 mg version of Bayer’s drug (“the 30 mg ANDA case”). According to the district court, in the 30 mg ANDA case, the court had construed the ‘446 patent to claim compositions in which the starting material, as opposed to the finished product, comprised crystals of a specific surface area. Based on that construction, the district court had held that the proposed 30 mg product described in Elan’s ANDA would not infringe the ‘446 patent because that ANDA explicitly excluded using as a starting material crystals with the claimed surface areas.

According to the district court in this case, the earlier holding estopped Bayer from pursuing its later suits. It held that because the 60 mg ANDA, like the earlier 30 mg ANDA, explicitly excluded using as a starting material crystals with the claimed surface areas, Bayer could not pursue that claim. With respect to the 30 mg commercial case, the district court held that because it had construed the claims of the ‘446 patent to be limited to starting materials, the surface area of the crystals in the finished product was not at issue. Moreover, the district court noted that Bayer had failed to offer any evidence in the 30 mg ANDA case that the crystals in the finished product infringed even when the crystals in the starting material did not.

The Federal Circuit vacated and remanded. According to the Court, in the 30 mg ANDA case, neither party had offered any evidence regarding the surface areas of crystals in Elan’s finished product. Thus, based solely on Elan’s evidence that the surface areas of the crystals in the starting material did not infringe, SJ was properly granted. The Federal Circuit held, however, that it had not affirmed the district court’searlier “inherent” claim construction limiting the claims of the ‘446 patent to only crystals of specific surface area in the starting material. Accordingly, Bayer’s submission of previously unavailable evidence that the crystals in the finished product infringed the ‘446 patent created a genuine issue of material fact if the claims were construed to encompass crystals in both the starting material and the finished product. The Federal Circuit thus vacated and remanded the case for the district court to construe the claims.

The Federal Circuit similarly vacated and remanded the district court’s grant of SJ in the 30 mg commercial case. Moreover, according to the Federal Circuit, the 30 mg ANDA case was limited solely to the “hypothetical inquiry” of whether, based on the limited description in Elan’s ANDA, the product that Elan would likely market would infringe the ‘446 patent. Because Elan had begun commercializing its product, however, Bayer then had access to Elan’s actual product and could prove “actual” infringement as opposed to “hypothetical” infringement. Accordingly, Bayer had not had an opportunity to litigate the issue of actual infringement in the 30 mg ANDA case, and that case could not estop Bayer from pursuing the 30 mg commercial case.