Digest of Shire Development, LLC v. Watson Pharms., Inc, No. 2013-1409 (Fed. Cir. June 3, 2015) (precedential). On appeal from S.D. Fla. Before Prost, Chen, and Hughes.

Procedural Posture: The Federal Circuit’s reversal of the District Court’s claim construction in Shire Development, LLC v. Watson Pharmaceuticals, Inc., 746 F.3d 1326 (Fed. Cir. 2014) was vacated and remanded by the Supreme Court in Shire Dev., LLC v. Watson Pharm., Inc., 135 S. Ct. 1174 (2015). CAFC reversed the District Court’s claim construction and subsequent infringement determination and remanded.

  • Standard of Review: Under Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015), when a district court’s claim construction is based only on intrinsic evidence, it is reviewed de novo, but if a district court makes factual findings that underlie its claim construction, those factual findings are reviewed for clear error. Although the district court heard testimony from various expert witnesses during the Markman hearing and at trial, there is no indication that the district court made or relied on any factual findings for its claim constructions. Accordingly, the claim construction is reviewed de novo.
  • Claim Construction: The district court erred in construing “inner lipophilic matrix” as “a matrix including at least one lipophilic excipient, where the matrix is located within one or more other substances” and “outer hydrophilic matrix” as “a matrix of at least one hydrophilic excipient, where the matrix is located outside the inner lipophilic matrix.” The Federal Circuit found that the constructions were overly broad because they focused on the lipophilic or hydrophilic nature of the excipient, and not the matrix itself. Further, the district court’s construction allows for a single matrix with mixed hydrophilic and lipophilic properties, but the intrinsic evidence makes it clear that the “inner lipophilic matrix” and “outer hydrophilic matrix” must be separate.