Par Pharmaceutical – A bench trial determination of invalidity is reversed, with the Circuit ruling that the district court failed to apply a sufficiently high standard in order to rely on inherency. According to the panel, he limitation at issue necessarily must be present, or must be the natural result of the combination of elements explicitly disclosed by the prior art in order for a claimed invention to be rendered obvious.
Ericsson – The Circuit reverses denial of JMOL following a $10 million verdict, and remands based on improper jury instructions relating to application of the entire market value rule to standard essential patents covering a Wi-Fi standard.
Tyco – The panel throws out a $176 million verdict based on the district court's improper decision to exclude § 102(g) prior art in its obviousness determinations, even though that art was found by the district court to apply in its anticipation analysis.
Sandoz – The Circuit affirms dismissal of a declaratory judgment action because the complaint did not allege an injury of sufficient immediacy and reality to create subject matter jurisdiction. The complaint was filed before plaintiff Sandoz filed an application for approval with the FDA. In fact, Sandoz had just begun testing its product that is similar to a drug patented by Hoffman-La Roche and licensed to Amgen.
Par Pharmaceutical, Inc. and Alkermes Pharma Ireland Ltd. v. TWI Pharmaceuticals, Inc. Fed. Cir. Case 2014-1391 (December 3, 2014)
The patent at issue covers methods of use of nanosized formulations of the drug megestrol acetate ("megestrol"), which have been found to be particularly effective in stimulating the appetite of AIDS patients and others facing anorexia and similar maladies, where those patients have not recently eaten a substantial meal. TWi filed an ANDA seeking approval to market a generic form of nanosized megestrol. In response, Par filed a patent infringement suit. The district court concluded in a trial to the bench that the patent was invalid as obvious. While TWi failed to prove that Megace OS had a known food effect in the prior art, it did prove that all elements of the claimed invention were disclosed in the prior art. Importantly, the district court ruled that even though the prior art did not explicitly disclose the food effect differences as claimed, reduced food effect was an inherent result of nanosized megestrol even if it was previously not known in the prior art that a food effect existed."
Essentially all of the substantive limitations in the independent claims were present in the prior art references identified by the district court. The point of contention is whether the specific food effect limitations are also disclosed in the prior art. The district court ruled that these limitations are an inherent property of the formulation disclosed by the obvious combination of prior art elements.
The panel does not find any clear error in the district court's conclusion that TWi failed to prove by clear and convincing evidence that a food effect for micronized megestrol was known in the art. The district court also correctly noted that, if there was a known food effect with megestrol, it would have been illogical to administer megestrol to patients in a fasting state, when the compound would be less effective. Thus, the district court did not clearly err in concluding that there was no known food effect for megestrol in the prior art. However, the panel holds that it erred in its inherency analysis.
The inherent teaching of a prior art reference is a question of fact. In re Napier, 55 F.3d 610, 613 (Fed. Cir. 1995). The use of inherency, a doctrine originally rooted in anticipation, must be carefully circumscribed in the context of obviousness. See, e.g., In re Oelrich, 666 F.2d 578, 581 (C.C.P.A. 1981) ("[M]ere recitation of a newly discovered function or property, inherently possessed by things in the prior art, does not distinguish a claim drawn to those things from the prior art."). In Oelrich, inherency in an obviousness analysis was discussed:
Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient. If, however, the disclosure is sufficient to show that the natural result flowing from the operation as taught would result in the performance of the questioned function, it seems to be well settled that the disclosure should be regarded as sufficient.
Thus, early precedent established that the concept of inherency must be limited when applied to obviousness, and is present only when the limitation at issue is the "natural result" of the combination of prior art elements.
More recent Circuit analysis does not diminish this conclusion. A party must meet a high standard in order to rely on inherency to establish the existence of a claim limitation in the prior art in an obviousness analysis—the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art. The district court, however, did not require that TWi present evidence sufficient to prove inherency under this standard. For example, the district court's analysis ignores claim limitations; for example, claim 1 requires "no substantial difference in C max ," between the fed and fasted states. Claim 4 requires that the "difference in C max ," between the fed and fasted states be within an enumerated percentage difference. The district court's broad dictates regarding the effect of particle size on bioavailability and food effect are not commensurate with the actual limitations at issue. While it may be true that a reduction in particle size naturally results in some improvement in the food effect, the district court failed to conclude that the reduction in particle size naturally results in "no substantial difference" in the food effect.
Although the district court applied the incorrect standard for inherency in its obviousness analysis, the panel noted that it cannot, on the record before it, conclude that TWi failed to present evidence sufficient to demonstrate that the claimed food effect limitations necessarily are present in the prior art combinations. There are simply no findings of fact addressing that question, and the panel declines to make such findings in the first instance. The district court's inherency analysis is therefore vacated and the case is remanded for the court to determine if TWi has presented clear and convincing evidence that demonstrates the food effect as claimed is necessarily present in the prior art combination.
Despite its ruling that the district court erred in its inherency analysis, the panel agreed with the court on its analysis of the motivation to combine, reasonable expectation of success, and its teaching away analysis, as well as the objective evidence of nonobviousness. For example, Par contended that the district court turned to the objective indicia only after concluding that TWi proved a prima facie case of obviousness. However, the panel noted that it is clear that the district court did consider the objective indicia before reaching its ultimate obviousness conclusion, which is what Circuit precedent counsels. As to the specific objective indicia, the panel affirms the court's holdings on unexpected results and long-felt need.
Ericsson, Inc . v. D-Link Systems, Inc., Netgear, Inc., Acer, Inc., Acer America Corporation, Gateway, Inc., Dell, Inc., Toshiba America Information Systems, Inc., Intel Corporation, and Belkin International, Inc. , Fed. Cir. Case Nos. 2013-1625, 1631, 1632, 1633 (December 4, 2014)
Interoperability is an essential requirement for many electronic devices. For example, if a user brings her laptop to a local coffee shop, she expects that her laptop will charge when she plugs it in and that she will be able to access the Internet when she connects to the coffee shop's wireless network. Because of the multitude of devices, device designers, and manufacturers, there must be an established standard mode of operation to ensure compatibility among all of these different devices.
"Standards development organizations" or SDOs publish standards, which are lists of technical requirements. Relevant to this case, the IEEE publishes 802.11, commonly known as Wi-Fi, standards that require compliant devices to operate in a certain way to ensure that every device can communicate with other compliant devices. Sometimes that technology is covered by patents. Because the standard requires that devices utilize specific technology, compliant devices necessarily infringe certain claims in patents that cover technology incorporated into the standard. These patents are called "standard essential patents" or SEPs. To help alleviate concerns regarding royalties being due on various patents owned by multiple parties, SDOs often seek assurances from owners of SEPs before publishing the standard that they will grant licenses to an unrestricted number of applicants on "reasonable, and nondiscriminatory" or RAND terms.
Ericsson filed suit in the E. D. of Texas accusing defendants (collectively "D-Link") of infringing patents that, according to Ericsson, were essential to the 802.11 wireless standard. Intel, the chip supplier for the accused products, intervened. Shortly before trial the judge denied D-Link's motion to exclude the testimony of Ericsson's damages expert, over D-Link's argument that the testimony violated the entire market value rule or EMVR. The jury found that D-Link infringed the asserted claims in three of Ericsson's patents, rejected the validity challenge as to one of the patents, and awarded Ericsson $10 million.
D-Link presented many challenges to the trial court's handling of the case. In a 60 page opinion the majority of the panel affirmed the determination of infringement as to two of Ericsson's patents but Judge Taranto dissented as to the construction of the claims of one of those patents and therefore disagrees as to the finding of infringement. The panel reverses the denial of JMOL as to infringement of a third Ericsson patent. The panel also affirms a determination that Dell did not have a license to practice the patents pursuant to an agreement with Ericsson since the correct Ericsson entity was not signatory to that agreement. But the most interesting discussion in the opinion is the panel's decision to vacate the damage award and remand the case due to faulty jury instructions as to what were reasonable and nondiscriminatory or RAND terms. This summary will focus on the panel's analysis of that issue.
Admissibility of Evidence of Prior Licenses
The panel concludes that the court properly admitted evidence of the licenses to which D-Link objects. While a number of Circuit cases have referred to the concept of an entire market value "rule," the legal standard actually has two parts, which are different in character. There is one substantive legal rule, and there is a separate evidentiary principle; the latter assisting in reliably implementing the rule when—in a case involving a per unit royalty—the jury is asked to choose a royalty base as the starting point for calculating a reasonable royalty award.
As we explained recently in VirnetX, Inc. v. Cisco Systems, Inc., 767 F.3d 1308 (Fed. Cir. 2014), where multicomponent products are involved, the governing rule is that the ultimate combination of royalty base and royalty rate must reflect the value attributable to the infringing features of the product, and no more. What is taken from the owner of a utility patent for purposes of assessing damages under § 284 is only the patented technology, and so the value to be measured is only the value of the infringing features of an accused product.
The Cirucit has recognized that licenses may be presented to the jury to help the jury decide an appropriate royalty award. Prior licenses, however, are almost never perfectly analogous to the infringement action. For example, allegedly comparable licenses may cover more patents than are at issue in the action, include cross-licensing terms, cover foreign intellectual property rights, or, as here, be calculated as some percentage of the value of a multi-component product. Testimony relying on licenses must account for such distinguishing facts when invoking them to value the patented invention. Recognizing that constraint, however, the fact that a license is not perfectly analogous generally goes to the weight of the evidence, not its admissibility. In each case, district courts must assess the extent to which the proffered testimony, evidence, and arguments would skew unfairly the jury's ability to apportion the damages to account only for the value attributable to the infringing features.
In short, where expert testimony explains to the jury the need to discount reliance on a given license to account only for the value attributed to the licensed technology, as it did here, the mere fact that licenses predicated on the value of a multi-component product are referenced in that analysis—and the district court exercises its discretion not to exclude such evidence—is not reversible error.
The District Court's RAND Jury Instruction
The panel notes that this is an issue of first impression for the Circuit, and to its knowledge, only three other courts have considered the issue of appropriate RAND royalty rates—all district courts.
a. The district court's use of the Georgia-Pacific factors
Although the Circuit has never described the Georgia-Pacific factors as a talisman for royalty rate calculations, district courts regularly turn to this 15-factor list when fashioning jury instructions. Courts often parrot all 15 factors to the jury, even if some of those factors clearly are not relevant. In this case the court included all 15 Georgia-Pacific factors in its damages instruction—over objection—without considering their relevance to the record created at trial. The panel notes that it is unwise to create a new set of GeorgiaPacific-like factors for all cases involving RAND-encumbered patents, but cautions that courts must consider the facts of record when instructing the jury and should avoid rote reference to any particular damages formula.
b. Apportionment analysis for SEPs
As with all patents, the royalty rate for SEPs must be apportioned to the value of the patented invention. When dealing with SEPs, there are two special apportionment issues that arise. First, the patented feature must be apportioned from all of the unpatented features reflected in the standard. Second, the patentee's royalty must be premised on the value of the patented feature, not any value added by the standard's adoption of the patented technology. Just like modern electronic devices, technological standards include multiple technologies. We know that patents often claim only small portions of multicomponent products and we have precedent which covers apportionment of damages in those situations. Similarly, SEPs can, and, often do, claim only limited aspects of the overall standard.
Just as we apportion damages for a patent that covers a small part of a device, we must also apportion damages for SEPs that cover only a small part of a standard. In other words, a royalty award for a SEP must be apportioned to the value of the patented invention (or at least to the approximate value thereof), not the value of the standard as a whole. A jury must be instructed accordingly. Our decision does not suggest that all SEPs make up only a small part of the technology in the standard. Indeed, if a patentee can show that his invention makes up "the entire value of the" standard, an apportionment instruction probably would not be appropriate.
This is particularly true for SEPs. When a technology is incorporated into a standard, it is typically chosen from among different options. Once incorporated and widely adopted, that technology is not always used because it is the best or the only option; it is used because its use is necessary to comply with the standard. In other words, widespread adoption of standard essential technology is not entirely indicative of the added usefulness of an innovation over the prior art. This is not meant to imply that SEPs never claim valuable technological contributions. We merely hold that the royalty for SEPs should reflect the approximate value of that technological contribution, not the value of its widespread adoption due to standardization.
Because SEP holders should only be compensated for the added benefit of their inventions, the jury must be told to differentiate the added benefit from any value the innovation gains because it has become standard essential. Although the jury, as the fact finder, should determine the appropriate value for that added benefit and may do so with some level of imprecision, the panel concludes that they must be told to consider the difference between the added value of the technological invention and the added value of that invention's standardization. The panel concluded that that was not done here.
Tyco Healthcare Group LP and United States Surgical Corp. v. Ethicon Endo-Surgery, Inc. , Fed. Cir. Case No. 2013-1324, 1381 (December 4, 2014)
The asserted patents disclose a surgical device that employs ultrasonic energy to cut and coagulate tissue in surgery. The device includes a stationary and movable handle at one end and a shaft with a tube within a tube construction at the other. A clamp and a curved blade sit at the distal end of the shaft. The clamp opens and shuts like a jaw against the blade via a dual cam mechanism.
The Davison Patent and the Ethicon Prototype
In 1993, Ultracision, Inc. commercialized an ultrasonic surgical device similar to the claimed invention. The device includes a shaft capable of fitting through a trocar with a ten millimeter diameter. In 1994, Ultracision obtained the Davison patent covering that invention. The Davison patent describes and depicts both straight and curved blade clamp configurations, and discloses that a benefit of using a curved blade is that it facilitates treatment of tissue at awkward angles of approach. Ultracision then worked to modify the patented device so that it could fit through a trocar with a five millimeter diameter. By November 1995, Ultracision had a prototype using this design that could cut and coagulate tissue.
After Ethicon acquired Ultracision at the end of 1995, Ethicon worked to perfect the modified design for commercialization. Ethicon completed this design by November 1996. This so-called Ethicon Prototype employed a single pin and slot design and could successfully cut and coagulate tissue by December 1996. Ethicon nevertheless sought to increase the size of the blade so that the device could cut and seal larger blood vessels, and modified the clamp to use two pins and slots to accommodate the larger blade. From August to December 1997, the Ethicon Prototype was used to cut and seal large vessels, and Ethicon launched products based on the prototype in August 1998. Ethicon also filed patent applications covering the Ethicon Prototype in October 1997. These applications resulted in the Ethicon patents.
The '662 Patent
The '662 patent, filed in 1992, discloses an "approximating apparatus for jaw structure in surgical instrumentation." The device employs a pair of camming members and slots to open and close the jaw. The '662 patent further discloses that the jaw structure can be used for many surgical purposes including "grippers, graspers, dissectors, cutters, measurers, staplers, etc."
District Court Proceedings
The court ruled after a bench trial that the Ethicon Prototype anticipated twenty-six of the asserted claims under § 102(g). The court found that Ethicon conceived of the prototype before Tyco's January 1997 conception date, worked diligently to constructively reduce it to practice when it filed the patent applications covering it in October 1997, and did not abandon, suppress, or conceal it thereafter. Having concluded that the Ethicon Prototype constitutes prior art under § 102(g), the court nonetheless held that the prototype could not serve as prior art under § 103 because Ethicon did not establish reduction to practice before Tyco reduced its invention to practice, and because the prototype was not known in the art at the time of Tyco's invention.
The court then determined that the remaining claims, the Curved Blade Claims and Dual Cam Claims, would not have been obvious in view of the Davison patent and the '662 patent, noting that the Davison patent taught away from using a curved blade because its preferred embodiment discloses a straight blade. Because the district court found that neither the Curved Blade Claims nor the Dual Cam Claims are invalid, it awarded Tyco damages for Ethicon's infringement in the amount of $176 million.
The district court properly held that the Ethicon Prototype anticipates twenty-six of the asserted claims because Ethicon conceived of the prototype before Tyco's January 1997 conception date and diligently reduced it to practice without abandoning, suppressing, or concealing it thereafter. Under § 102(g), Ethicon can establish that its Prototype was prior art by proving "either that it reduced its invention to practice first or that it conceived of the invention first and was diligent in reducing it to practice."
Tyco argues on cross-appeal that because Ethicon made changes to design features of the prototype, such as replacing the single cam with a dual cam mechanism, Ethicon did not establish prior conception. As the district court properly found, however, the Ethicon Prototype existed in the form of detailed drawings and physical embodiments in 1996, before Tyco's conception date of January 1997. Based on this evidence and corroborating testimony, there was a "definite and permanent idea" of an ultrasonic surgical device that could cut and coagulate and fit down a five millimeter trocar. This idea persisted despite Ethicon's limited design changes to only the cam mechanism and blade size, which is not a feature that the twenty-six anticipated claims recite.
The district court improperly held that the Ethicon Prototype could not be considered prior art under § 103, and erred in finding that the Curved Blade Claims and Dual Claims would not have been obvious.
A. Section 102(g) Prior Art as Section 103 Prior Art
The district court erred when it inconsistently applied § 102(g) to the Ethicon Prototype by not requiring prior reduction to practice for anticipation purposes but requiring it for the obviousness analysis. The clear language of § 102(g) does not require prior reduction to practice so long as the inventor can prove that he or she conceived of the invention first and was diligent in later reducing it to practice.
The district court also erred when it ruled that § 102(g) prior art cannot be prior art under § 103 if it was unknown to both the applicant and the art at the time the applicant makes his invention, contending that doing so would establish a standard for patentability in which an applicant's contribution would be measured against secret prior art. The clear language of § 102(g) and § 103 contains no requirement that a prior invention under § 102(g) be "known to the art" or the patentee at the time of invention to constitute prior art under § 103. To the extent that the Circuit's predecessor court inserted such a requirement into § 102(g) in In re Clemens, 622 F.2d 1029, 1039-40 (CCPA 1980), the Circuit discontinued that requirement as dictum in E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1437 (Fed. Cir. 1988). We are cognizant of the concern in In re Clemens that an applicant's contribution should not be measured against "secret" prior art, as this could be detrimental to the "innovative spirit the patent laws are intended to kindle." As we recognized in du Pont, however, the requirement in § 102(g) that the prior invention not be abandoned, suppressed, or concealed after reduction to practice "does mollify somewhat the 'secret' nature of § 102(g) prior art."
The provisions of § 103 themselves provide further support for this conclusion. For instance, § 103(c) creates an exception (though inapplicable here) for when § 102(g) prior art may not qualify as prior art for obviousness purposes. The presence of this exception strongly indicates that the statute itself contemplates that § 102(g) prior art may constitute prior art under § 103.
B. Curved Blade Claims
Claims would have been obvious if they are nothing more than a combination of familiar elements that yield predictable results. KSR, Intl. Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007). The district court should have concluded that the Curved Blade Claims would have been obvious in view of the Ethicon Prototype and the Davison patent.
In finding that the Curved Blade Claims would not have been obvious, the district court not only ignored the Ethicon Prototype as prior art, but also improperly distinguished the Davison patent. When a claimed invention involves a combination of elements, any need or problem known in the relevant field of endeavor at the time of invention can provide a reason to combine. The Davison patent's disclosure of the benefit of a curved blade as facilitating "treatment at awkward angles of approach" would have provided a person of ordinary skill in the art with sufficient motivation to use a curved blade.
The district court also held that Davison "teaches away" because its preferred embodiment includes a straight blade, and that only two of the fifteen blade designs show curved blades. Yet simply because the curved blade configurations are not preferred embodiments does not result in the Davison patent teaching away from use of a curved blade, absent clear discouragement of that combination.
C. Dual Cam Claims
The district court also ruled that switching from a single cam to a dual cam mechanism in an ultrasonic device would not have been an obvious design decision. But Tyco's own expert agreed that the single and dual cam mechanism operate in the same way, which suggests that the switch from a single cam to a dual cam was more trivial than Tyco alleges.
And, even if the Ethicon Prototype alone may not be dispositive of the issue, the Dual Cam Claims are certainly obvious in view of the Ethicon Prototype and the '662 patent combined. While the '662 patent does not disclose an ultrasonic surgical device, and therefore does not share the same field of endeavor, the '662 patent is nevertheless analogous art because it is "reasonably pertinent to the particular problem with which the inventor is involved." The '662 patent explicitly discloses that a wide variety of surgical devices can use the jaw structure for not only gripping and grasping, but also for cutting and dissecting. As Ethicon's expert testified, the issue of mechanical opening and shutting of jaws is a common design issue that is not unique to ultrasonic instruments.
Sandoz Inc. v. Amgen Inc. and Hoffmann-La Roche Inc. , Fed. Cir. Case No. 2014-1693 (December 5, 2014)
Amgen markets Enbrel® as a therapy for rheumatoid arthritis. The active ingredient in Enbrel® is the protein etanercept. Amgen's predecessor, Immunex, received an FDA Biologics License for Enbrel® in 1998. Sandoz began developing its own etanercept product in 2004. The two patents in suit were issued in late 2011 and early 2012. Amgen has identified those patents as being directed to etanercept.
Sandoz needs FDA approval to enter the market with its own etanercept drug, and in 2010 Sandoz began a series of meetings with the FDA to plan for an application based on biosimilarity to Enbrel®. That year, Congress enacted the BPCIA, borrowing from the Hatch-Waxman Act's process for use of an Abbreviated New Drug Application (ANDA), rather than a full New Drug Application, to obtain approval of generic versions of previously approved drugs. The BPCIA establishes an FDA regulatory-approval process more abbreviated than the full Biologics License Application process—for biological products that are shown to be "biosimilar" to a "reference product" already approved by the FDA. In June of 2013, after consultation with the FDA, Sandoz announced a large-scale human (Phase III) trial for its contemplated etanercept product. Phase III trials usually include from several hundred to several thousand subjects. This trial, expected to run into 2015, was to be completed before Sandoz filed any application for FDA approval.
The same day that it began its Phase III trial, Sandoz filed its DJ complaint, based on noninfringement and invalidity, against defendants (collectively "Amgen"). Sandoz had not—and still has not—filed an application for FDA approval to market an etanercept product.
Amgen moved to dismiss the complaint, arguing that the court lacked jurisdiction because no immediate, real controversy between the parties yet existed. The motion was granted. The district court also relied on a separate ground for dismissal—that the BPCIA prohibited Sandoz's suit. Among its provisions, the BPCIA establishes procedures for the narrowing and resolution of patent disputes between biosimilarity applicants and reference-product sponsors. The court concluded that Sandoz could not obtain a DJ before filing an FDA biosimilarity application. The court reasoned that, because Sandoz planned to enter the market by the biosimilarity route, it had to follow the BPCIA's patent-related procedures applicable to biosimilarity applicants—which it had not done.
To answer the underlying case-or-controversy question, the Circuit asks "whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." The inquiry, focused on the combination of immediacy and reality, involves no bright line test. The required distinction is between a suit involving a real and substantial dispute that admits of specific relief through a decree of a conclusive character and a suit that calls for an opinion advising what the law would be upon a hypothetical state of facts.
The Circuit has frequently applied Medlmmune's "all the circumstances" standard to determine, in the patent context, whether a declaratory-judgment plaintiff has presented a case of sufficient "immediacy and reality." Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007).We have assessed "immediacy" by considering how far in the future the potential infringement is, whether the passage of time might eliminate or change any dispute, and how much if any harm the potential infringer is experiencing, at the time of suit, that an adjudication might redress. We have assessed "reality" by examining any uncertainties about whether the plaintiff will take an action that will expose it to potential infringement liability and, if so, exactly what action. In short, we have focused on related questions of timing and contingency regarding the existence and content of any needed patent adjudication, as well as current concrete harms to the declaratory-judgment plaintiff from delaying an adjudication.
The Supreme Court has not had occasion to address the justiciability requirements in the context presented by Sandoz's complaint. In Medlmmune and, more recently, in Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843 (2014), there was no dispute that the challenger was ready to engage in commercial activities immediately and with a specific, fixed product, without any suggestion that regulatory hurdles still had to be cleared for the activities to begin. Sandoz's position is quite different. Amgen has not suggested that anything Sandoz is currently doing exposes it to infringement liability, and there is no dispute that Sandoz cannot engage in the only liability-exposing conduct at issue without FDA approval of an application precisely defining the products it may market. Sandoz has not even filed such an application.
Without adopting a categorical rule, we conclude that the present case does not meet the requirements of immediacy and reality. We begin with the immediacy requirement, noting again that contingency plays a role in applying this requirement as it does in applying the reality requirement. When Sandoz filed its suit, it was conducting a Phase III trial of a drug it hopes to make the subject of an FDA application. It told the NIH that its trial would last until April 2015. Even that date, let alone any FDA approval, was several years away when Sandoz brought this suit. And if the Phase III trial uncovers material problems, Sandoz may, at a minimum, need to delay any FDA application considerably longer.
Any dispute about patent infringement is at present subject to significant uncertainties—concerning whether it will actually arise and if so what specific issues will require decision. Sandoz's Phase III trial may fail in material ways. If so, perhaps Sandoz will not file for approval, thereby eliminating altogether the patent dispute it has asked the district court to adjudicate. Perhaps, if the trial materially fails, i.e., uncovers significant problems, Sandoz will instead modify its proposed product and ultimately file for FDA approval of the modified product. At a minimum, that scenario could alter the content of any patent dispute: notably, infringement of the specific claims of the specific patents—which cover, e.g., particular proteins, pharmaceutical compositions, polynucleotides, and methods—could present different questions depending on the precise product.
Our conclusion is consistent with our cases under the Hatch-Waxman Act. As noted above, we have found no justiciability where a declaratory-judgment plaintiff had not filed an application for the FDA approval required to engage in the arguably infringing activity. On the other hand, where we have found a case or controversy in the Hatch-Waxman setting, we have focused on the presence of an application for the required FDA approval.
The Supreme Court and this court have indicated that Congress may act to "articulate chains of causation that will give rise to a case or controversy where none existed before"—thus, in some circumstances, effectively creating justiciability that attenuation concerns would otherwise preclude. S ee Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014). But Sandoz, in its current posture, cannot invoke any statutory relaxation of otherwise-applicable immediacy and reality requirements. Congress has not specifically provided for suits where the potential infringer has not filed an FDA application for the approval required before it can undertake the activity that might expose it to liability.
Our resolution of this case makes it unnecessary for us to address the district court's BPCIA rationale. We also do not decide whether, once an application is filed under the BPCIA, that statute forecloses a declaratory judgment action concerning whether the ultimate marketing of the application-defined product would infringe under 35 U.S.C. § 271(a).