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Product-by-Process Claims Are Limited to the Claimed Process

May 18, 2009

Decision icon Decision, en banc

Last Month at the Federal Circuit - June 2009

Judges: Rader (author), Plager, Bryson; Michel, Rader, Bryson, Gajarsa, Linn, Dyk, Prost, Moore (joining-in-part); Newman (author), Mayer, Lourie (dissenting-in-part); Lourie (separately dissenting-in-part)

[Appealed from: N.D. Ill., Judge Andersen, and E.D. Va., Judge Payne]

In Abbott Laboratories v. Sandoz, Inc., No. 07-1400 (Fed. Cir. May 18, 2009) (en banc), and Lupin Ltd. v. Abbott Laboratories, No. 07-1446 (Fed. Cir. May 18, 2009) (en banc), the Federal Circuit decided two appeals involving U.S. Patent No. 4,935,507 (“the ’507 patent”), owned by Astellas Pharma, Inc. and exclusively licensed to Abbott Laboratories (collectively “Abbott”). One appeal was from the U.S. District Court for the Eastern District of Virginia and the other was from the U.S. District Court for the Northern District of Illinois. The Federal Circuit held that the Eastern District of Virginia correctly construed the claims of the ’507 patent and affirmed its partial SJ of noninfringement. The Court also affirmed the Northern District of Illinois’s denial of a motion for a preliminary injunction, which was based on the Eastern District of Virginia’s claim construction.

In the Eastern District of Virginia, Lupin Limited and Lupin Pharmaceuticals, Inc. (collectively “Lupin”) sought a DJ of noninfringement of the ’507 patent against Abbott. Lupin had approval from the FDA to market a generic version of Abbott’s Omnicef. Abbott’s branded product contains the Crystal A form of crystalline cefdinir as claimed by the ’507 patent, whereas Lupin’s generic product contains almost exclusively the Crystal B form. The Virginia court construed the claims and granted-in-part Lupin’s motion for SJ of noninfringement of claims 1-5. The Virginia court also concluded that claims 2-5 were product-by-process claims and, based on the Federal Circuit’s opinion in Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992), limited the process terms indicated by the phrase “obtainable by” to the processes and process steps.

In the Northern District of Illinois, Abbott sued several entities, including, Sandoz, Inc., Sandoz GmbH, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries, Limited (collectively “Sandoz and Teva”) for infringement of the ’507 patent. Abbott sought a preliminary injunction, and the parties agreed to adopt the Eastern District of Virginia’s claim construction for purposes of the motion. The Illinois court denied Abbott’s motion based on the Virginia court’s claim constructions.

Abbott asserted all five claims of the ’507 patent against Lupin, Sandoz, and Teva. Claim 1 of the patent claims “crystalline” cefdinir, defining it by a powder X-ray diffraction (“PXRD”) pattern of seven angles that are specified in the claim. In contrast, claims 2-5 claim crystalline cefdinir, without any peak limitations, but with descriptions of processes used to obtain the crystalline cefdinir.

On appeal from the Eastern District of Virginia’s decision, Abbott challenged only the district court’s construction of the terms “crystalline” and “obtainable by.” The Federal Circuit affirmed the Virginia court’s construction of “crystalline” as meaning “Crystal A” “as outlined in the specification.” Slip op. at 11. Crystal A was the only embodiment described in the specification. The Court stated that the specification’s recitation of Crystal A as the sole embodiment does not alone justify the district court’s construction limiting the claim to the single embodiment. But the Court explained that the rest of the intrinsic evidence, including the prosecution history, evinces a clear intention to limit the ’507 patent to Crystal A as defined by the specification. While the parties agreed that “crystalline” ordinarily means that the compound/substance exhibits “uniformly arranged molecules or atoms,” the intrinsic evidence supported a more specific construction. Given the exclusive focus on Crystal A in the specification and the prosecution history, the Federal Circuit agreed that the term “crystalline” in claims 1-5 of the ’507 patent should be limited to “Crystal A.”

The Federal Circuit next sua sponte considered en banc the proper interpretation of product-by-process claims in determining infringement. Initially, the Court determined that the Eastern District of Virginia correctly categorized the claims as product-by-process claims. Next, the Court resolved a conflict in two of its prior decisions: Atlantic Thermoplastics, 970 F.2d at 846-47 (holding “process terms in product-by-process claims serve as limitations in determining infringement”), and Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991) (“[T]he correct reading of product-by-process claims is that they are not limited to product prepared by the process set forth in the claims.”). In a split decision, the Federal Circuit clarified en banc the scope of product-by-process claims by adopting the rule in Atlantic Thermoplastics. Thus, a product-by-process claim is not infringed by products manufactured by processes other than the one claimed. The Court found support for this interpretation of product-by-process claims in the decisions of the Supreme Court, the U.S. Court of Customs and Patent Appeals, and its sister circuits. In addition, the Court relied on the DOE principle that each element contained in a patent claim is deemed material to defining the scope of the patented invention. The Federal Circuit expressly overruled its decision in Scripps Clinic to the extent it is inconsistent with the Court’s current decision. Thus, the Federal Circuit concluded that the Eastern District of Virginia correctly limited product-by-process claims 2-5 to the claimed process steps in its infringement analysis.

With respect to the construction of the term “obtainable by,” the Federal Circuit disagreed with Abbott’s plain language argument that the term introduces an optional process, even if “obtained by” would introduce limiting process steps. The Court noted that claims 2-5 do not furnish any test by which to identify the cefdinir crystals except that they are the result of their respectively claimed processes. Relying on the specification and the prosecution history, the Court concluded that a patentee’s use of the word “obtainable” rather than “obtained by” does not give it the opportunity to escape the limitations of the product-by-process claiming doctrine. The Court stated that claims that include such ambiguous language should be viewed extremely narrowly. Thus, the Court held that the Eastern District of Virginia correctly construed the process limitations beginning with “obtainable by” in claims 2-5 as limiting the asserted claims to products made by those process steps.

The Court then reviewed the Eastern District of Virginia’s grant of SJ of noninfringement of claims 2-5, both literally and under the DOE, and of claim 1 under the DOE. The “bulk” of Lupin’s generic product is Crystal B, not Crystal A. The Federal Circuit affirmed the district court’s grant of SJ as to claims 2-5 because the parties agreed that literal infringement of these claims could not be shown if the product-by-process analysis was performed pursuant to Atlantic Thermoplastics because Abbott did not present any evidence that Lupin practiced the claimed process steps. As for equivalency, the Federal Circuit concluded that because “crystalline” in claims 1-5 is limited to the Crystal A form, the bounds of Crystal A equivalents cannot ignore the patentee’s choice to distinguish Crystal B from the claimed invention. Thus, the Federal Circuit concluded that Crystal B compounds fall outside the scope, both literally and by equivalents, of claims 1-5 of the ’507 patent. In the alternative, the Court noted that because the patentee chose not to claim the Crystal B form even though it was disclosed as an embodiment in the Japanese priority document, the patentee dedicated that embodiment to the public foreclosing any recapture under the DOE.

The Court dismissed Abbott’s argument that Lupin effectively admitted infringement under the DOE when it claimed to the FDA that its generic product was bioequivalent to Abbott’s Omnicef product because, while bioequivalence may be relevant to the function prong of the functionway- result equivalency test, bioequivalence and equivalents under the DOE are different inquiries. The Court concluded that because Crystal B is not an equivalent of Crystal A, the Eastern District of Virginia did not err in granting SJ of noninfringement of claims 1-5.

The Court next turned to the Northern District of Illinois’s denial of Abbott’s preliminary injunction. Sandoz and Teva’s generic Omnicef product, like Lupin, also contained primarily the Crystal B form of cefdinir. Based on the Eastern District of Virginia’s construction, the Federal Circuit determined that the Illinois court did not abuse its discretion in denying the request for a preliminary injunction because, as properly construed, the ’507 patent excludes Crystal B forms of cefdinir. With respect to the alleged presence of small amounts of Crystal A in Sandoz’s and Teva’s generic products, the Court found that the Illinois court did not abuse its discretion in not being persuaded by this evidence. The Court noted that a district court has broad leeway to discern a “likelihood of success” in a preliminary injunction analysis. While the Illinois court may have made some misstatements about the law with respect to the alleged presence of small amounts of Crystal A, the Court found that they were harmless because they merely formed an alternative basis for the Illinois court’s reasonable assessment of the evidence offered in support of the preliminary injunction motion.

Judge Newman, with whom Judges Mayer and Lourie joined, dissented from the en banc portion of the majority’s decision. Specifically, Judge Newman dissented from the majority’s sua sponte procedure for addressing this issue en banc because there was no notice, briefing, or oral argument. In addition, Judge Newman concluded that the majority’s en banc ruling does not comport with product claims for new and unobvious products whose structure is not fully known, and for which process parameters are used to aid in defining the product. Judge Newman then discussed prior case law that she believed contradicted the majority’s en banc ruling, some of which was not mentioned by the majority. Judge Newman also asserted that the majority misinterpreted precedent that contravened the majority’s holding. Judge Newman also disagreed with the panel’s construction of “obtainable by.”

Judge Lourie also wrote a separate dissent from the en banc decision. While Judge Lourie agreed that there is substantial Supreme Court precedent that holds that product-by-process claims require use of the recited process for there to be infringement, he found that many of those cases applied overly broad language to fact situations involving old products or used vague language that made it difficult to determine whether the products were old or new. According to Judge Lourie, when a product is old, a product-by-process claim should not be interpreted as a claim to the product made by any process because the product is already known in the art and unpatentable per se. Judge Lourie stated, however, that a different situation should apply to today’s chemical-biological products than to mechanical products of more than a century ago. In his view, when a product is new and the inventor claims it by a process of preparation, the product-by-process claim should be interpreted as a product claim that can be infringed even when the product is made by means other than the one recited in the claim. In addition, according to Judge Lourie, the results should depend on the exact wording of the claim. For example, the claim language “when made by” might require use of the process in order to infringe, but a claim reading “obtainable by” refers to capability so that it might not require use of the process to infringe. Judge Lourie found that “obtained by,” however, is ambiguous. While speculating that today’s analytical techniques may obviate the need for product-by-process claims, Judge Lourie noted that product-by-process issues still come before the Court. Accordingly, Judge Lourie stated that he would make a distinction between old products and new products in interpreting product-by-process claims.