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Preliminary Injunction Holdings of Unenforceability and Invalidity Do Not Collaterally Estop Patentee from Asserting the Same Claims Against Another

January 05, 2007

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Last Month at the Federal Circuit - February 2007


Michel, Prost, Ellis (District Judge sitting by designation)

[Appealed from: N.D. Ill., Judge Coar]

In Abbott Laboratories v. Andrx Pharmaceuticals, Inc., No. 06-1101 (Fed. Cir. Jan. 5, 2007), the Federal Circuit affirmed the district court’s grant of a preliminary injunction preventing Andrx Pharmaceuticals, Inc. (“Andrx”) from manufacturing and selling an extended-release formulation of clarithromycin, a generic version of Abbott Laboratories’ (“Abbott”) Biaxin XL®.

Abbott accused several manufacturers of infringing three of its patents relating to extended-release formulations of erythromycin derivatives (U.S. Patent Nos. 6,010,718 (“the ’718 patent”), 6,872,407 (“the ’407 patent”), and 6,551,616 (“the ’616 patent”)). Along with Andrx, Abbott filed suit against Teva Pharmaceuticals USA, Inc. (“Teva”) and Ranbaxy Laboratories (“Ranbaxy”), two other generic drug manufacturers whose ANDAs had also been approved by the FDA. The ’718 patent claimed extended-release formulations comprising erythromycin derivatives combined with a pharmaceutically acceptable polymer. The ’407 patent claimed derivative formulations with specified pharmacokinetic properties, and the ’616 patent claimed a method of reducing adverse side effects using extended-release formulations. All claims asserted against Andrx contained the limitation “a pharmaceutically acceptable polymer.”

Abbott moved to preliminarily enjoin all three defendants, asserting the same claims but presenting infringement contentions specific to each defendant’s product. As such, each defendant presented its own and different defenses of invalidity and/or unenforceability. Andrx asserted invalidity defenses based on certain prior art as well as indefiniteness under 35 U.S.C. § 112. The other two defendants relied on different prior art to establish invalidity and/or on evidence of inequitable conduct to establish unenforceability. The district court accepted these separate arguments and held separate hearings.

The district court was not persuaded by Teva’s invalidity defense with respect to the ’718 patent claims and granted a preliminary injunction based on those claims, although this was later reversed on appeal. The district court, however, did find that Teva raised a substantial question of validity with regard to claim 2 of the ’616 patent and denied a preliminary injunction against Teva based on that patent claim. With respect to Andrx, however, the district court held that Andrx did not raise a substantial question of validity as to claim 2 of the ’616 patent based on arguments different from Teva’s; therefore, the district court granted the request for preliminary injunction against Andrx on that claim. On the other hand, the district court held that Ranbaxy showed a likelihood of success in proving the ’616 and ’407 patents were unenforceable due to inequitable conduct and denied a preliminary injunction against Ranbaxy on those patents. Nonetheless, the district court granted a preliminary injunction against Andrx on the same two patents.

Andrx appealed. First, Andrx argued that Abbott is collaterally estopped from seeking a preliminary injunction based on the holding that the asserted claims are invalid and unenforceable in the preliminary injunction proceedings against Ranbaxy and Teva. Andrx relied on the Supreme Court’s holding in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1971), which permits an accused infringer to plead collateral estoppel when faced with a patent previously declared invalid or unenforceable in a prior proceeding against another defendant. Andrx argued that the Court should apply collateral estoppel to preliminary injunction proceedings because the preliminary findings qualify as final judgments because they finally resolved that substantial questions of invalidity and unenforceability of the ’616 and ’407 patents exist.

The Federal Circuit, however, disagreed, holding that under Seventh Circuit law, a preliminary injunction is not a final judgment for the purposes of collateral estoppel. Under Blonder-Tongue, a defendant may successfully plead collateral estoppel only when the prior case resulted in a final judgment on the merits, addressed identical issues, and fully litigated those issues. The Court further explained that a preliminary finding warrants preclusive effect when the deciding judge clearly intended to firmly and finally resolve the issue by speaking in terms of certainties, not probabilities. Applying that principle, the Court reasoned that the district court only “preliminarily” found the ’616 patent unenforceable and further that the invalidity findings “in no way resolve[] the ultimate question of invalidity.” Slip op. at 17-18 (emphasis in original). Accordingly, the Court rejected Andrx’s collateral estoppel argument and held that the findings made during the preliminary injunction proceedings did not preclude Abbott from asserting the patents against Andrx.

Having determined that collateral estoppel did not apply, the Federal Circuit turned to the second issue on appeal, whether Abbott is likely to succeed on its infringement claims. The Court determined that the district court correctly found that Abbott would likely succeed on the merits of its infringement claims against Andrx. Nonetheless, the Court found two errors in the district court’s construction of the claim term “pharmaceutically acceptable polymer” and adopted a broader meaning. The Court relied on the language of the claims themselves and the doctrine of claim differentiation to determine that “pharmaceutically acceptable polymer” encompassed more than “the hydrophilic water-soluble polymer” and the specific compounds listed in the dependent (unasserted) claims. Turning to the specification, the Court held that the use of Markush group language in the written description does not limit the meaning of the term, unlike when used in a claim. The Court explained that “[a] Markush group is a form of drafting a claim term that is approved by the PTO to serve a particular purpose when used in a claim—to limit the claim to a list of specified alternatives. The term ‘Markush group’ does not have any meaning within the context of a written description of a patent . . . .” Id. at 24 (citations omitted).

Further analyzing the specification, the Federal Circuit found that the word “is” in the phrase “[t]he pharmaceutically acceptable polymer is a water-soluble hydrophilic polymer” likewise did not limit the claim term. While the Court recognized that the word “is” may signify a patentee’s own lexicography, in this case, it did not “unambiguously signify” a definition. Here, such a limiting definition would have been problematic, as it would not cover some water-insoluble polymers listed in the specification. Therefore, the Court concluded the district court erred in finding that the Markush group language and the use of “is” limited the meaning of “pharmaceutically acceptable polymer” to a “water-soluble hydrophilic polymer selected from the group” of polymers listed in the specification.

Turning to infringement, the Federal Circuit noted that the parties already conceded no literal infringement because Andrx’s formulation lacked a polymer. Instead, Abbott asserted infringement under the DOE, contending that the glyceryl monostearate (“GMS”) ingredient in Andrx’s formulation was equivalent to the claimed polymer. Andrx argued that GMS (a hydrophobic nonpolymer) could not be found equivalent without vitiating the polymer limitation. Applying its broader claim construction, the Court concluded that GMS could be found to be equivalent to the pharmaceutically acceptable polymer of the claims without vitiating the polymer requirement. The Court noted that even under the erroneous, narrower construction, the district court had found factual equivalence, i.e., that GMS performed the same function, in the same way, to achieve the same result as the claimed polymer. That factual finding of equivalence was left undisturbed by the Court’s broader construction, and the Court affirmed infringement under DOE.