By Cheryl Beise, J.D.
Horizon also failed to show that competitor Actavis’s ANDA label induced infringement of asserted method claims.
The U.S. Court of Appeals for the Federal Circuit has affirmed a district court’s claim constructions, summary judgment rulings, and trial ruling in Hatch-Waxman litigation filed by HZNP Medicines LLC and Horizon Pharma USA, Inc. against competitor Actavis Laboratories UT, Inc., based on its challenge to Horizon’s patents claiming methods and formulations of the drug diclofenac sodium for topical application to treat osteoarthritis of the knee. The district court did not err in finding that three claim terms in the formulation patents were indefinite and that Actavis’s ANDA label did not induce infringement of the method claims. The court held that the phrase "consisting essentially of" serves as a transition between closed-ended claims using the phrase "consisting of" and open-ended claims using the phrase "comprising" and that the Nautilus definiteness standard applies to both the basic and novel properties of an invention. Finally, the court properly rejected Actavis’s obviousness challenge to one claim admittedly infringed by its generic product (HZNP Medicines LLC v. Actavis Laboratories UT, Inc., October 10, 2019, Reyna, J.).
HZNP Medicines LLC and Horizon Pharma USA, Inc. (collectively, "Horizon") own and exploit several patents (U.S. Patent Nos. 8,217,078; 8,252,838; 8,546,450; 8,563,613; 8,618,164; 8,871,809; 9,066,913; 9,101,591; 9,132,110; 9,168,304; 9,168,305; and 9,220,784) relating to methods and compositions for treating osteoarthritis. Four patents claim methods of use and eight patents claim formulations. Both groups of patents are listed in the U.S. Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations ("Orange Book") for Horizon’s PENNSAID® 2% product. PENNSAID® 2% is a nonsteroidal anti-inflammatory drug (NSAID) and the first FDA-approved twice-daily topical diclofenac sodium formulation for the treatment of pain of osteoarthritis of the knee.
Actavis Laboratories UT, Inc. (formerly known as Watson Laboratories, Inc.) sought to market a generic version of PENNSAID 2% and filed an Abbreviated New Drug Application (ANDA), containing a "Paragraph IV certification" under 21 U.S.C. §355(j)(2)(A)(vii)(IV) stating that the patents-at-issue were invalid or would not be infringed by Actavis’s generic product. Horizon filed suit in the District of New Jersey, alleging infringement of the patents-at-issue under Section 271(e)(2)(A). Following claim construction, the district court found three terms in the asserted claims in the formulation patents to be indefinite. The district court granted summary judgment of noninfringement in Actavis’s favor on the issue of induced infringement, concluding that Horizon had not met its burden to show that Actavis’s label induced infringement of the method-of-use patents. After summary judgment, only one claim—claim 12 of the ’913 patent—remained for trial. Actavis stipulated that its ANDA product infringed claim 12 of the ’913 patent, but argued that the claim was invalid as obvious. The district court found that Actavis failed to show by clear and convincing evidence that claim 12 of the ’913 patent would have been obvious. Both sides appealed to the Federal Circuit.
Indefiniteness. The district court found that a POSITA familiar with pharmacopoeias would not have understood, with reasonable certainty, the scope of the claims reciting (1) "impurity A," (claim 4 of the ’913 patent); (2) a formulation that "degrades at less than 1% over 6 months" (asserted claims of the ’613 patent and claims 10–11 and 19 of the ’591 patent); and (3) a formulation "consisting essentially of" specified ingredients (asserted claims of the ’838, ’304, ’305, and ’784 patents and claims 12–15, 17, 19, and 24–25 of the ’591 patent). It thus held that those claims were indefinite.
The Federal Circuit agreed that all three claims were indefinite. First, contrary to Horizon’s argument, neither the claim language, nor the specification, nor extrinsic evidence made clear that "impurity A" refers to an impurity of diclofenac sodium, an active ingredient, or to USP Compound A or its chemical name. Since "impurity A" is indefinite, it logically followed that another term, such as the "degrades" term, which relies on "impurity A" for its construction, must also be indefinite, the court said.
Regarding the third claim limitation, the Federal Circuit explained that the phrase "consisting essentially of" has a distinct meaning within its jurisprudence. The phrase serves as a middle ground or transition between closed-ended claims using the phrase "consisting of" and open-ended claims using the phrase "comprising," the court explained. The district court considered "consisting essentially of" in accordance with its legal meaning: "consisting of only the specified materials and those that do not materially affect the basic and novel properties of the claimed invention." The district court properly determined that the specification of the formulation patents identified five basic and novel properties: (1) better drying time; (2) higher viscosity; (3) increased transdermal flux; (4) greater pharmacokinetic absorption; and (5) favorable stability.
The appeals court next found that the district court correctly held that the Nautilus definiteness standard applies to both the basic and novel properties of an invention. In Nautilus, Inc. v. Biosig Instruments, Inc., the Supreme Court held that "a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention." 572 U.S. at 901. Therefore, the basic and novel properties must be "sufficiently definite so as to inform, with reasonable certainty, a POSITA of their scope within the context of the invention." Further, under Federal Circuit precedent, the district court did not err in considering the definiteness of the basic and novel properties during claim construction.
Finally, the appeals court found that the district court did not err in determining that the basic and novel property of "better drying time" was indefinite, and consequently, that the term "consisting essentially of" was likewise indefinite. An evaluation of the specification reveals inconsistencies about the basic and novel property of "better drying time," the court said. Two tests are disclosed, but those tests do not provide consistent results upon which a POSITA would be able to evaluate "better drying time."
In sum, Federal Circuit held that the district court did not err in: (a) in defining the basic and novel properties of the formulation patents; (b) applying the Nautilus definiteness standard to the basic and novel properties of the formulation patents; and (c) concluding that the phrase "consisting essentially of" was indefinite based on its finding that the basic and novel property of "better drying time" was indefinite on this record.
Induced infringement. The district court granted summary judgment in relation to the asserted claims of the method-of-use patents on the basis that Horizon failed to show that Actavis’s label induces a use of its ANDA product that directly infringes those claims. It was undisputed that Actavis’s label was substantially similar to Horizon’s; the primary difference between the two labels was that Horizon’s label refers to "PENNSAID" instead of "diclofenac sodium topical solution" or "diclofenac sodium."
On appeal, Horizon argued that the district court erred in finding that Actavis’s labeling did not induce infringement of the method-of-use patents. Horizon maintained that Actavis’s labeling tracked closely with the asserted claims, thereby reflecting Actavis’s specific intent to induce infringement. Actavis argued that its proposed label does not induce infringement because, unlike the method-of-use patents, its label did not promote the application of a second topical agent after application of the diclofenac sodium gel. The Actavis label does not affirmatively instructs the patient to apply anything after the diclofenac sodium gel; the label merely permits applying a second topical agent after the patient waits for the diclofenac sodium to dry. The district court did not err in finding that the label merely provided guidance to patients about what to do if the patent desired to have anything come into contact with the knee after application of the medication. "Horizon’s evidence, viewed in the light most favorable to it, establishes that some users might infringe. The evidence, however, does not establish that the ‘proposed label instructs users to perform the patented method,’" the Federal Circuit said.
Obviousness. After a seven-day bench trial, the district court held that Actavis did not show, by clear and convincing evidence, that claim 12 of the ’913 patent is invalid for obviousness. Actavis’s cross-appeal focused on the district court’s statement that claim 12 of the ’913 patent "was not a result of routine optimization of PENNSAID® 1.5% … because general principles and ranges of permissible concentrations would not have predicted the exact formulation and dosing frequency that resulted in PENNSAID® 2%." Actavis argued that the district court erred by requiring that the prior art predict the exact formulation of the asserted claim. The Federal Circuit found that the district court did not clearly err in its factual findings about the lack of predictability in relation to the changes made to PENNSAID® 1.5% and the teachings from the prior art. The appeals court affirmed the district court’s nonobviousness conclusion and its determination that PENNSAID® 2% was not the result of routine experimentation such that a POSITA would have reasonably predicted the changes made to PENNSAID® 1.5%.
Concurring-in-part, dissenting-in-part opinion. Circuit Judge Pauline Newman filed a separate concurring-in-part and dissenting-in-part opinion. According to Judge Newman, when the properties of a composition are described in the specification, the usage "consisting essentially of" the ingredients of the composition does not invalidate the claims when the properties are not repeated in the claims. Judge Newman disagreed that the basic and novel properties are required to be included in claims to compositions that are described in "consisting essentially of" form. She was not persuaded that persons of ordinary skill in the field of this invention would not understand the components of the composition claims with reasonable certainty. Judge Newman also disagreed that Actavis’s ANDA label did not induce infringement. "To be sure, patients may not always comply with instructions. However, this does not insulate the provider from infringement liability," Judge Newman said.
Attorneys: Caryn Borg-Breen (Green, Griffith & Borg-Breen LLP) for HZNP Medicines LLC and Horizon Pharma USA, Inc. Michael E. Joffre (Sterne Kessler Goldstein & Fox, PLLC) for Actavis Laboratories UT, Inc.
Companies: HZNP Medicines LLC; Horizon Pharma USA, Inc.; Actavis Laboratories UT, Inc.
MainStory: TopStory Patent FedCirNews
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