Judges: Lourie, Bryson (author), Gajarsa

[Appealed from S.D.N.Y., Judge Jones]

In In re Omeprazole Patent Litigation, Nos. 07-1414, -1416, -1458, -1459 (Fed. Cir. Aug. 20, 2008), the Federal Circuit affi rmed the district court’s fi ndings of infringement by Apotex Corp., Apotex, Inc., and Torpharm, Inc. (collectively “Apotex”) and Impax Laboratories, Inc. (“Impax”) of patents held by Astrazeneca AB, Aktiebolaget Hassle, KBI-E, Inc., KBI, Inc., and Astrazeneca LP (collectively “Astra”).

The patents-at-issue are U.S. Patent Nos. 4,786,505 (“the ’505 patent”) and 4,853,230 (“the ’230 patent”), relating to pharmaceutical preparations containing omeprazole, the active ingredient in Prilosec, which inhibits gastric acid secretion. To protect omeprazole from gastric acid in the stomach, a pharmaceutical dose may include an enteric coating surrounding the core. To counter the acidity of enteric coatings, alkaline reacting compounds (“ARCs”) may be added to the drug core, but ARCs may, in turn, compromise the enteric coating by increasing its permeability to water in the stomach. The ’505 and the ’230 patents addressed these problems by creating an inert subcoating that increases storage stability, protects against degradation by stomach acid, and dissolves readily in the small intestine.

Impax sought approval from the FDA to sell generic versions of Prilosec. Astra sued for infringement of the ’505 and ’230 patents under 35 U.S.C. § 271(e)(2)(A). The district court denied Impax’s demand for a jury trial and consolidated the § 271(e) claims against Impax with the claims against the other defendants. After the bench trial, but before the court issued its decision, both patents expired. In response, Impax moved to dismiss Astra’s claims as moot. The district court denied the motion, however, on grounds that the FDA had granted Astra a six-month period of market exclusivity following expiration of the ’505 and ’230 patents. The district court held Astra’s patents were valid, enforceable, and infringed by Impax.

On appeal, Impax argued that the district court lost jurisdiction over the case after the ‘505 and ‘230 patents expired. The Federal Circuit upheld the district court’s dismissal of Impax’s motion and the holding that Astra was entitled to an additional six months of exclusivity under § 271(e)(4)(A) as a postexpiration remedy to infringement under § 271(e)(2). Usually, the effective date set by the district court will be the patent expiration date, including any patent term extensions. In this case, however, Astra was entitled to an additional six months of market exclusivity under 21 U.S.C. § 355a to perform pediatric studies. Impax argued that once the ‘505 and ‘230 patents expired, the district court lacked authority under § 271(e)(4)(A) to change the effective date of Impax’s ANDA, because their expiration rendered the infringement claims moot. The Court rejected this argument outright, stating that Impax provided no reason to suggest that § 271(e)(4)(A) provides no remedy after patent expiration.

The Court also rejected Impax’s allegations that there was insuffi cient evidence that Impax’s formulation infringed. Claim 1 of the ’505 patent requires an “effective amount” of omeprazole plus an ARC. The district court previously construed “effective amount” to apply to the amount of ARC. The construction also required that an “alkaline reacting compound” stabilize the omeprazole. Impax asserted that Astra’s evidence did not prove the ARC stabilized the omeprazole in its drug formulation. The Court rejected Impax’s argument, holding that Astra’s pH data proved the presence of an “effective amount” of an ARC in Impax’s formulation. The Court also rejected Impax’s arguments regarding the ’230 patent limitation requiring “enhanced stability.” The Court upheld the district court’s conclusion that Astra’s evidence was suffi cient to prove this requirement, as it was supported by the specifi cations of the patents-in-suit. Regarding the “inert subcoating” limitation of both patents, Impax argued that Astra’s evidence was insuffi cient to establish infringement. The Court held that the district court correctly rejected Impax’s arguments because the record supports the determination that Impax’s formulation infringes.

Impax also challenged the validity of both patents in view of the public-use bar of 35 U.S.C. § 102(b). Before the critical date for both patents-in-suit, Astra commissioned Phase III clinical studies to determine the safety and effi cacy of its formulation to obtain FDA approval. Impax argued that these studies involved the public use of Astra’s claimed formulation. At trial, Impax had to prove by clear and convincing evidence that the Phase III formulation had been reduced to practice before the testing began.

The Court upheld the district court’s fi nding that there was insuffi cient evidence to show that Astra had reduced to practice the claimed invention before the Phase III clinical trials. Impax did not demonstrate that, without conducting the Phase III clinical trials, the inventors knew that the Phase III formulation would achieve the goals of long-term stability and in vivo stability such that it would be effective as a treatment for gastrointestinal disease. Accordingly, the Court found no clear error in the district court’s fi ndings on this issue.

Finally, the Court rejected Impax’s argument that the district court violated its right to a jury trial, noting that it had rejected Impax’s argument previously and that Impax did not provide extraordinary circumstances in this case to justify revisiting its prior decision.

Turning to Apotex’s appeal, Apotex challenged the district court’s ruling that the patents-in-suit were infringed and valid. Apotex’s formulation contains a pellet core containing omeprazole, to which it applies an enteric coating. Based on Astra’s expert’s testimony, the district court concluded that Apotex’s pellets have a subcoating that is formed in situ. Apotex challenged the suffi ciency of this evidence on several grounds. The Court rejected each of them, fi nding no error in the district court’s reliance on Astra’s expert’s testimony.

The Court also rejected Apotex’s assertion that the claims of the ’230 patent were anticipated by U.S. Patent No. 2,991,226 (“the ’226 patent”), U.S. Patent No. 4,470,980 (“the ’980 patent”), and European Patent Application No. EP 122,815 A1 (“the ’815 application”). The district court found that the three references did not disclose an “acid labile pharmaceutically active substance.” In addition, the district court found that the ’226 and ’980 patents did not disclose formulations that use an “alkaline salt.”

The Court rejected Apotex’s claim construction argument regarding “alkaline salt,” noting Apotex’s construction drew no support from the ’230 patent specifi cation and was inconsistent with other claims of the patent. Because Apotex did not challenge the district court’s fi ndings under the court’s construction, the Federal Circuit affi rmed the district court’s holding that the ’226 and ’980 patents do not anticipate the ’230 patent.

Regarding the ’815 application, the Court also rejected Apotex’s argument that the district court’s ruling erroneously imported an additional limitation into its construction of “acid labile pharmaceutically active substance.” The Court held that the district court’s ruling was not based on the additional limitation cited by Apotex, and therefore affi rmed the holding that the ’815 application did not anticipate the claims.

Apotex further argued that the ’230 and ’505 patent claims were obvious in light of European Patent Application No. EP 124,495 A2 (“the ’495 application”) in combination with several other references. The ’495 application described a tablet containing omeprazole magnesium salt with a cellulose acetate phthalate enteric coating. The district court found the ’495 application did not disclose tablets with a subcoating or containing an ARC. The district court further observed that the ’495 application did not disclose a negative interaction between the drug core and the enteric coating. According to the Federal Circuit, none of the references relied upon by Apotex undermines the district court’s conclusion that the claims of the patents-in-suit were not obvious.

To overcome this shortcoming, Apotex alleged that a person of ordinary skill would understand that cellulose phthalate could interact with the omeprazole magnesium salt, which is acid-labile. The Court noted, however, that ample evidence supported the opposite conclusion and the district court’s holding. The Court also upheld the district court’s fi nding that even if a person of ordinary skill perceived the problem of interaction between the enteric coating and the drug core, it would not have been obvious to try applying a water-soluble subcoating as a means of solving that problem. Agreeing with the district court, the Court noted that multiple different options were available should a person of ordinary skill recognize this problem, and a person of ordinary skill likely would have tried a different approach than the one taken by Astra.

Apotex also asserted that the district court’s analysis confl icted with KSR International Co. v. Telefl ex, Inc., 127 S. Ct. 1727 (2007), because the district court insisted on absolute predictability and failed to recognize that adding a subcoating would be “obvious to try.” The Court held that Apotex mischaracterized the district court’s decision, which found that a person of skill in the art would not have seen a reason to use a subcoating in combination with the formulation disclosed in the ’495 application.

Finally, like Impax, Apotex also alleged that the district court erred in resetting the effective date of its ANDA to refl ect the six-month period of market exclusivity. Rejecting this argument, the Court cited its holding with respect to Impax and noted that Apotex’s challenge would be moot, because Astra’s period of exclusivity had lapsed.