Print PDF

Safe Harbor of Section 121 Applies to Divisionals Only, Not CIPs

March 07, 2008

Decision icon Decision

Last Month at the Federal Circuit - April 2008

Judges: Michel, Dyk (author), Kennelly (District Judge sitting by designation)

[Appealed from: D.N.J., Judge Lifland]

In Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc., No. 07-1271 (Fed. Cir. Mar. 7, 2008), the Federal Circuit, considering three patents asserted by Pfizer, Inc. et al. (collectively “Pfizer”)—U.S. Patent Nos. 5,760,068 (“the ’068 patent”); 5,466,823 (“the ’823 patent”); and 5,563,165 (“the ’165 patent”)—found the asserted claims of the ’068 patent invalid for obviousness-type double patenting, claim 9 of the ’823 patent and claim 17 of the ’165 patent not invalid in light of the best mode requirement, and all three patents not unenforceable for inequitable conduct.

Pfizer owns the patents-in-suit, which encompass a broad genus of nonsteroidal anti-inflammatory compounds, compositions using those compounds, and methods of using those compositions. The claims of the patents include celecoxib—the active ingredient in Pfizer’s Celebrex, a nonsteroidal anti-inflammatory drug (“NSAID”) for the treatment of osteoarthritis and rheumatoid arthritis. Pfizer filed U.S. Patent Application No. 08/160,594 (“the ’594 application”) with the PTO claiming a broad range of those compounds, compositions including those compounds, and methods of using them, including claims to celecoxib. Celecoxib is a cyclooxygenase-2 (“COX-2”) inhibitor, which selectively targets the COX-2 enzyme to treat pain and inflammation without inhibiting the COX-1 enzyme, a distinct COX enzyme associated with the “good housekeeping functions inside the body,” such as good gastrointestinal physiology.

Responding to a restriction requirement between the compound, composition, and method claims, as well as to a request that it “elect a single disclosed species” from those identified by the examiner, Pfizer elected to prosecute the generic compound claims and, within that genus, the single compound species, celecoxib. Those compound claims were ultimately allowed, when the ’594 application issued as the ’823 patent.

Subsequent to the above actions, but before issuance of the ’823 patent, Pfizer filed several continuation applications claiming priority to the ’594 application and covering its nonelected subject matter, in particular, a divisional application, including the restricted-out composition claims, that issued as the ’165 patent, and a CIP, including the restricted-out method claims, that issued as the ’068 patent.

Teva Pharmaceuticals USA, Inc. (“Teva”), a generic drug manufacturer, filed an ANDA with the FDA addressed to a proposed drug identified as “Celecoxib Capsules.” Because the patents covering celecoxib are listed in the Orange Book, Teva filed a paragraph IV certification challenging the validity of Pfizer’s patents covering celecoxib. In response, Pfizer initiated this litigation by filing a patent infringement action against Teva pursuant to 35 U.S.C. § 271(e). In the district court, Teva did not argue noninfringement; rather, it asserted the affirmative defenses of invalidity and unenforceability. Teva did not counterclaim.

Following an eighteen-day bench trial, the district court rejected Teva’s positions: its obviousness position, which it did not appeal, and its best mode defense. Finally, the district court held that Pfizer had not committed inequitable conduct. Thus, the district court issued a judgment, concluding that Teva infringed each of the patents-in-suit and enjoined Teva from the manufacture, use, offer to sell, sale, or importation into the United States of any product comprising the chemical compound celecoxib. Teva appealed.

The Federal Circuit began by examining 35 U.S.C. § 121 to determine whether the district court had correctly interpreted its safe harbor provision. The third sentence of section 121 provides a safe harbor following a restriction requirement by precluding the use of certain patents and applications as references against a “divisional application . . . if the divisional application is filed before the issuance of the patent on the other application.” 35 U.S.C. § 121 (2000).

The Federal Circuit then addressed Teva’s argument that section 121 applies exclusively to “divisional applications” and not to CIPs, even though the district court found that Teva had raised this issue too late in the proceedings and, therefore, had not considered it. The Federal Circuit noted that it could “properly decide the issue, even if not raised below, since the issue . . . is a predicate legal issue necessary to a resolution of the issues before the court.” Slip op. at 9 n.5. Addressing that question, the Court concluded that the safe harbor of section 121 is limited to divisional applications, excluding CIPs.

First, the applications are themselves different in that a CIP introduces new subject matter not disclosed in the prior application. A divisional, however, is carved out of a pending application and, thus, discloses and claims only subject matter disclosed in the earlier or parent application. Second, section 121 uses the specific term “divisional application” four times, but does not refer to a CIP. Third, the legislative history of section 121 also refers only to “divisional” applications, even though the difference between CIPs and divisionals was known at the time Congress enacted the 1952 Patent Act. In particular, that history reflects that the language of section 121 was changed to prevent the PTO and courts from rejecting an application filed as a result of a requirement for restriction based on the very same application from which the subsequent application was divided. The Court also noted that its interpretation of section 121 was consistent with that of the PTO, which had interpreted section 121 as limited to divisional applications.

Because the Court’s interpretation of section 121 permitted the ’165 patent to be used as a reference against the ’068 patent, the Court then proceeded to address the merits of Teva’s obviousness-type double patenting argument, reiterating the two-step analysis: (1) construing the claims in both the earlier and later patent, and determining the differences; and (2) determining whether those differences render the claims patentably distinct. In particular, the Court reiterated that it has found a claim to a method of using a composition not patentably distinct from an earlier claim to the composition in a patent disclosing the identical use. The Court noted that the district court had held that if section 121 did not block the use of the ’165 patent, it would have found the relevant claims of the two patents not patentably distinct. The Federal Circuit agreed, finding that the relevant ’068 patent claims recite methods of administering a “therapeutically-effective amount” of the compositions found in claim 5 of the ’165 patent. That same term is also found in claim 1 of the ’165 patent, and the parties stipulated that it means the same thing in both patents. Thus, the Court agreed with the district court that the ’068 patent merely claims a particular use described in the ’165 patent and is therefore not patentably distinct over the claims of the ’165 patent. Thus, because the safe harbor of section 121 did not apply, the Court held the ’165 patent invalid for obviousness-type double patenting.

Turning to Teva’s best mode defense, the Court first addressed Teva’s challenge to the generic claims of the compound and composition of the ’823 and ’165 patents. Teva argued that the generic claims of the ’823 and ’165 patents do not teach one of skill in the art how to arrive at the preferred embodiment because they do not reveal Pfizer’s preference for compounds that demonstrate COX-2 selectivity. Teva asserted that, without the knowledge of the preference for COX-2 selectivity, one of ordinary skill in the art would not be able to identify a preferred embodiment (compound or composition) in the generic claims and that selectivity was relevant to using the claimed invention.

Although it was undisputed that Pfizer preferred COX-2 selectivity, the Federal Circuit declined to address Teva’s contentions as to the generic claims because they raised “a difficult issue that . . . need not [be] resolve[d] to decide this case.” Id. at 20. Because the best mode inquiry is undertaken on a “claim by claim basis,” the Court focused solely on the celecoxib-specific claims.

In so doing, the Federal Circuit avoided Teva’s argument that Pfizer failed to disclose its preference for COX-2 selective compounds because those specific claims were directed to just one compound, which was COX-2 selective. Teva’s remaining argument was that Pfizer failed to disclose the criteria for selecting the correct dosage, which somehow requires knowledge of Pfizer’s preference for COX-2 selectivity. The Court agreed with Teva that dosage range could be a preferred method of use that materially affects the properties of the invention under Bayer AG v. Schein Pharmaceuticals, Inc., 301 F.3d 1306 (Fed. Cir. 2002). However, it was undisputed that dosages were disclosed in the specification, and there was no evidence that the inventors preferred any other dosage.

Further, contrary to Teva’s assertion that COX-2 selectivity could affect dosage, there was no evidence that at the time of filing the inventors planned to use the COX-2 selectivity criterion to arrive at a preferred dosage (in contrast to their intent to use COX-2 selectivity to arrive at the right compounds). Thus, there was no evidence that they concealed a preferred method of determining the right dosage.

The Court thus agreed that the celecoxib-specific claims in the ’823 and ’165 patents did not violate the best mode requirement. Having found these claims valid, the Court did not address the generic claims because Teva had not counterclaimed for invalidity. Under Cardinal Chemical Co. v. Morton International, Inc., 508 U.S. 83 (1993), the Court was not required to address the validity of those claims, and a finding that the other claims were invalid would not change the practical effect of the district court’s judgment since that court’s order is directed to the use of celecoxib. In other words, there was no practical difference whether Teva’s ANDA filing infringes other claims in the ’823 and ’165 patents.

Finally, the Federal Circuit addressed Teva’s argument of unenforceability due to inequitable conduct. Before the district court, Teva had argued that Pfizer committed inequitable conduct by failing to disclose two Merck publications during the prosecution of the applications that led to the patents-in-suit. The district court found that neither reference was material and that Teva had failed to meet the threshold showing of intent.

On appeal, Teva argued that the materiality of the references standing alone, in the absence of a credible explanation for withholding them, was sufficient to establish intent. The district court, however, had found that Pfizer had offered a good-faith explanation for failing to disclose the Merck references based on the testimony of a Pfizer witness who was one of the inventors of celecoxib. The inventor testified that Pfizer had studied the Merck references and concluded that none of the compounds disclosed in the Merck references were similar to the compounds disclosed in Pfizer’s own patent applications. This is because the compounds disclosed in the Merck references had a different heterocyclic core than the compounds of the Pfizer applications and that this was a significant distinction. Pfizer noted both that the PTO recognizes that such differences are significant, and that it presented evidence below of its own highly consistent pattern of disclosing references having the same heterocyclic core in the prosecution of hundreds of its other patent applications. Specifically, Pfizer established that, in connection with the prosecution of a separate patent application that had the same heterocyclic core, it did in fact disclose the reference withheld here.

The district court credited this “highly consistent pattern” as strong evidence supporting Pfizer’s good-faith explanation for not disclosing the Merck references. The Federal Circuit agreed, finding that it had no basis for overturning that finding and, given the existence of a credible reason for withholding those references, the materiality of the references standing alone was not sufficient to establish intent. Thus, the district court did not clearly err in finding that Teva failed to prove by clear and convincing evidence that Pfizer intended to deceive the PTO by not disclosing the Merck references.