Tap Pharmaceutical Products (Formerly Known as Tap Holdings) v. Owl Pharmaceuticals, l.l.c. , 419 F.3d 1346 ( 2005 )

United States Court of Appeals for the Federal Circuit
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TAP PHARMACEUTICAL PRODUCTS, INC.
(formerly known as Tap Holdings, Inc.),
and TAKEDA CHEMICAL INDUSTRIES, LTD.
(now known as Takeda Pharmaceutical Company, Ltd.),
Plaintiffs/Counterclaim Defendants-
Cross Appellants,
and
WAKO PURE CHEMICAL INDUSTRIES LTD.,
Plaintiff-Appellee,
and
ABBOTT LABORATORIES,
Counterclaim Defendant,
v.
OWL PHARMACEUTICALS, L.L.C.
and OAKWOOD LABORATORIES, L.L.C.,
Defendants/Counterclaimants-
Appellants.
William F. Cavanaugh, Jr., Patterson, Belknap, Webb & Tyler LLP, of New York,
New York argued for plaintiffs/counterclaim defendants-cross appellants and plaintiff-
appellee. With him on the brief was Stuart E. Pollack. Of counsel on the brief were
Henry J. Renk and Bruce M. Wexler, Fitzpatrick, Cella, Harper & Scinto, of New York,
New York.
Thomas H. Shunk, Baker & Hostetler LLP, of Cleveland, Ohio, argued for
defendants/counterclaimants-appellants. With him on the brief was Kyle B. Fleming. Of
counsel on the brief was Richard A. Sharpe, Pearne & Gordon, L.L.P., of Cleveland,
Ohio.
Appealed from: United States District Court for the Northern District of Ohio
Judge Solomon Oliver, Jr.
United States Court of Appeals for the Federal Circuit
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TAP PHARMACEUTICAL PRODUCTS, INC.
(formerly known as Tap Holdings, Inc.),
and TAKEDA CHEMICAL INDUSTRIES, LTD.
(now known as Takeda Pharmaceutical Company, Ltd.),
Plaintiffs/Counterclaim Defendants-
Cross Appellants,
and
WAKO PURE CHEMICAL INDUSTRIES LTD.,
Plaintiff-Appellee,
and
ABBOTT LABORATORIES,
Counterclaim Defendant,
v.
OWL PHARMACEUTICALS, L.L.C.
and OAKWOOD LABORATORIES, L.L.C.,
Defendants/Counterclaimants-
Appellants.
___________________________
DECIDED: August 18, 2005
___________________________
Before NEWMAN, BRYSON, and GAJARSA, Circuit Judges.
BRYSON, Circuit Judge.
TAP Pharmaceutical Products, Inc., Takeda Chemical Industries, Ltd., and Wako
Pure Chemical Industries, Ltd., (collectively, “TAP”) filed suit against OWL
Pharmaceuticals, L.L.C., and Oakwood Laboratories, L.L.C., (collectively, “OWL”) in the
United States District Court for the Northern District of Ohio. TAP alleged that OWL had
infringed 12 patents owned by TAP. The allegations were based on OWL’s filing of an
Abbreviated New Drug Application seeking approval from the Food and Drug
Administration to market a generic version of the drug leuprolide. TAP markets
leuprolide, a sustained-release formulation for treating prostate cancer, under the trade
name Lupron Depot. OWL counterclaimed, seeking a declaration that the patents were
not infringed, were invalid, and were unenforceable. On a motion for summary
judgment, the district court held that OWL did not infringe the asserted claims of U.S.
Patent Nos. 5,476,663 (“the ’663 patent”), 5,631,020 (“the ’020 patent”), and 5,631,021
(“the ’021 patent”). In a separate summary judgment ruling, the court held that OWL
infringed claim 1 of U.S. Patent No. 4,728,721 (“the ’721 patent”) and claims 1-4 of U.S.
Patent No. 4,849,228 (“the ’228 patent”).
At trial, the jury found that the ’721 and ’228 patents were not invalid and that
OWL’s infringement was not willful. Following the trial, the district court addressed
OWL’s claim that the ’721 patent and the ’228 patent were unenforceable due to
inequitable conduct. The court rejected that claim on the ground that OWL failed to
show by clear and convincing evidence that TAP had engaged in inequitable conduct by
failing to cite two prior art references to the Patent and Trademark Office (“PTO”) during
the prosecution of the patents.
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The parties have not appealed the jury’s verdict on either of the issues resolved
by the jury. OWL, however, has appealed from the district court’s summary judgment of
infringement with regard to the ’721 and ’228 patents, and from its decision that the ’721
and ’228 patents are not unenforceable. TAP has cross-appealed from the court’s
summary judgment of noninfringement with regard to the ’663 patent, the ’020 patent,
and the ’021 patent. We affirm the district court’s judgment in all respects.
I
OWL’s appeal is limited to the ’721 and ’228 patents. The ’721 patent is directed
to certain biodegradable high molecular polymers that have good aging stability and are
useful as excipients in pharmaceutical preparations. The ’228 patent is directed to
microcapsules for use in sustained-release drug formulations in which the
biodegradable high molecular polymers disclosed in the ’721 patent are used as
excipients. The two patents describe the use of the polymers and microcapsules in
connection with sustained-release treatments in which leuprolide is delivered to patients
through injection. The use of the microcapsules allows the injected drug to be delivered
to the patient’s system at a constant rate over a long period of time.
In prior art microcapsules, the presence of water-soluble low molecular
compounds in the excipient negatively affected the sustained-release drug delivery
system by causing (1) “high initial burst,” i.e., the initial release of too much drug from
the microcapsule; (2) low drug incorporation during the process of creating the
microcapsules; and (3) poor long-term stability of the polymers used in the
microcapsules. The ’721 and ’228 patents address those problems by reducing the
levels of water-soluble low molecular compounds to a very low concentration.
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A
Claim 1 of the ’721 patent is representative of the claims at issue in both patents
with regard to the limitation in dispute. That claim reads as follows:
A biodegradable high molecular polymer useful as an excipient in
producing a pharmaceutical preparation comprising a copolymer or
homopolymer of about 50-100 mole percent of lactic acid and about 50-0
mole percent of glycolic acid having a weight average molecular weight of
about 2,000 to 50,000 and wherein the content of water-soluble low
molecular compounds, as calculated on the assumption that each of said
compounds is a monobasic acid, is less than 0.01 mole per 100 grams of
said high molecular polymer.
The language in dispute for purposes of OWL’s appeal on claim construction is
“comprising a copolymer . . . of lactic acid and . . . of glycolic acid.” OWL argues that
the reference to copolymers of lactic acid and glycolic acid requires that the copolymers
be made from lactic acid and glycolic acid as starting materials. The district court,
however, construed that language to include “copolymers composed of lactic acid and
glycolic acid mers produced by any method, including the use of lactide and glycolide.”
Under OWL’s construction, the claimed copolymers would have to be made by
direct polymerization from lactic acid or glycolic acid. Under the district court’s
construction, the claims were not limited to copolymers made by direct polymerization.
Instead, under the district court’s construction, the claimed polymers could be made by
a different method such as the “ring-opening” method in which lactic acid and glycolic
acid are first converted into cyclic dimers, known as lactide and glycolide. The rings of
those dimers are then opened by a catalyst, after which they react to form copolymer
chains consisting of repeating units of lactic acid and glycolic acid.
We uphold the district court’s claim construction, which was the product of a
careful analysis of the claim language, the specifications of the two patents, the
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prosecution history, and the extrinsic evidence provided to the court. As the district
court observed, neither the language of the claims nor the specification of either patent
explicitly sets forth the starting materials for making the copolymers, nor do the claims
or the specification require that the copolymers be produced by direct polymerization.
To the contrary, while the common specification of both patents lists examples of
polymerization by using lactic acid and glycolic acid as the starting materials, the
specification explicitly provides that the biodegradable high molecular polymer that
serves as the starting material for performing the method of the invention “may be
produced by any method.” ’721 patent, col. 1, ll. 63-65.
The district court based its claim construction in part on treatises that recognize
that copolymers of lactic acid and glycolic acid can be made either by direct
polymerization or by ring opening. Based on that evidence, the district court concluded
that one of ordinary skill in the art would consider the terms “copolymer of lactic acid
and glycolic acid” to be synonymous with the term “copolymer of lactide and glycolide.”
Indeed, OWL’s expert, Dr. Colin Pitt, testified that at the time the patent application was
filed, a person of ordinary skill in the art would use the terms “lactic acid” and “glycolic
acid” interchangeably with the terms “lactide” and “glycolide” because “the language
was relatively loose at that point in time” with respect to the use of those terms.
As to the prosecution history of the two patents, OWL argues that because the
prosecution files contained statements regarding the preparation of the polymers by
combining lactic acid and glycolic acid, the examiner intended to exclude the use of
other compounds as the appropriate starting materials for the claimed high molecular
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polymer. The prosecution history, however, does not exclude the use of other
compounds, such as lactide or glycolide, to make the copolymer.
Finally, OWL argues that the prosecution history of the European application
corresponding to the ’721 patent excludes copolymers made from lactide and glycolide
because TAP stated to the European examiner that the invention did not include a
polymer made from lactide or glycolide. As the district court explained, however, while
the applicant for the European patent characterized the claims in that manner, the
European patent examiner rejected that characterization, stating that the applicant
“does not appear to be correct in saying that the polymer of the present application is
different from polymerized glycolide and/or lactide.” In light of the European examiner’s
rejection, it is reasonable to conclude that TAP receded from that characterization of its
claims, which it did not repeat in the course of the prosecution of its U.S. patents. It was
therefore proper for the district court to attribute little weight to the statements made to
the European examiner.
OWL does not dispute that under the district court’s claim construction, it literally
infringed TAP’s patents. Because we sustain the district court’s claim construction, we
uphold the court’s determination that OWL infringed the ’721 and ’228 patents.
B
OWL argues that the ’721 patent and the ’228 patent are unenforceable because
of inequitable conduct, based on TAP’s purported suppression of a published European
application, EP 0 052 510 A2 (“the Kent application”). During the prosecution of the
’721 patent, TAP received notice of the Kent application in a European search report,
which was generated in connection with the prosecution of the European counterpart to
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the ’721 patent. The European search report listed the Kent application as relevant as
“technical background.” Shortly thereafter, TAP submitted the European search report
to the examiner who was reviewing the application that became the ’721 patent. The
search report was filed as a supplemental Information Disclosure Statement (“IDS”),
which was submitted after the notice of allowance for the ’721 patent was issued. In
addressing OWL’s argument that the late submission of the Kent application constituted
inequitable conduct that rendered the ’721 and ’228 patents unenforceable, the district
court found that the Kent application was not material to the patentability of the claims of
those patents and that TAP did not intend to deceive the PTO by withholding the
application until after issuance of the notice of allowance for the ’721 patent.
OWL argues that the Kent application was material and that TAP intended to
deceive the PTO by failing to disclose it until the last minute. OWL further contends that
TAP misrepresented the nature of the Kent application when TAP finally disclosed that
reference in the supplemental IDS.
As to materiality, OWL argues that the Kent application discloses a copolymer of
lactic acid and glycolic acid and teaches a method of purifying high molecular polymers.
The purification method is not directly disclosed in the Kent application, but is disclosed
in a reference cited in the Kent application, U.S. Patent No. 3,773,919 (“the Boswell
patent”). The Boswell patent describes a method of purification that involves “pouring
the [target] solution into a large volume of a nonsolvent . . . .” Boswell patent, col. 9, ll.
1-3. OWL also relies on the listing of the Kent application in the European search report
to demonstrate the materiality of the application.
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Information is considered material when there is a substantial likelihood that a
reasonable examiner would have considered the information important in deciding
whether to allow the application to issue as a patent. Molins PLC v. Textron, Inc., 48
F.3d 1172, 1179 (Fed. Cir. 1995), citing In re Jerabek, 789 F.2d 886, 890 (Fed. Cir.
1986). If the withheld information is merely cumulative in light of other references
considered by the examiner, the information is not material. Molins PLC, 48 F.3d at
1179, citing Scripps Clinic & Res. Found. v. Genentech, Inc., 927 F.2d 1565, 1582 (Fed.
Cir. 1991). The district court applied the correct legal standard and, after a detailed
analysis of the materiality issue, found the Kent application not to be material. The
court based its materiality determination on the differences between the Kent
application and the ’721 patent and on its conclusion that the Kent application was
cumulative of other prior art that was before the PTO during the prosecution of the ’721
patent. With respect to the differences between the Kent application and the ’721
patent, the court found that the Kent application and the Boswell patent cited therein “do
not teach that water-soluble low molecular compounds are problematic and do not
teach testing for such compounds. They also do not encourage treatment of polymers
with water.” Instead, the court concluded, Boswell discloses “treating polymers with
organic solvents, which would primarily dissolve and remove compounds other than
water-soluble low molecular compounds.” With respect to whether the Kent application
was cumulative to references already before the examiner, the court relied in particular
on U.S. Patent No. 4,273,920 (“the Nevin patent”), entitled “Polymerization Process and
Product,” and an article by Colin Pitt, entitled “Sustained Delivery Systems” (“the Pitt
article”).
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The district court found that the Kent application and the Nevin patent both
disclose the same relevant polymers, except that the Nevin patent discloses the
polymers in a manner that is even closer to the claims of the ’721 patent, because the
Nevin patent contains additional descriptive material, such as molecular weight ranges
and inherent viscosity limitations. The district court therefore found that TAP’s failure to
disclose the Kent application was not material, given that the Nevin patent was
submitted to the examiner during prosecution and was considered by the examiner.
The examiner found that the only difference between the Nevin patent and the ’721
patent was the limitation requiring that the content of water-soluble low molecular
compounds in the polymer be less than 0.01 mole per 100 grams of the polymer.
Likewise, the district court found that the Pitt article describes a method of
treating polymers that is identical to the method of purification described in the Boswell
patent cited in the Kent application. The court further found that the Pitt article discloses
not only the relevant method of purification, but also a polymer of lactic acid. The court
therefore concluded that the Boswell patent, and hence the Kent application, were
cumulative in light of the Pitt article.
OWL argues that the Kent application is not cumulative because it covers both
the relevant method of purification and the relevant polymer, while each of the other two
references omits either the purification method or the polymer. Specifically, OWL
contends that while the Pitt article teaches only the relevant method of purification, it
fails to disclose the relevant polymer because it discloses a polymer of only one acid,
i.e., a “homopolymer,” as opposed to a polymer consisting of both lactic acid and
glycolic acid, i.e., a “copolymer” of both acids. OWL also contends that while the Nevin
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patent teaches copolymers of lactic acid and glycolic acid, it does not disclose a method
of purifying high molecular polymers.
OWL’s argument relies in large part on the assumption that a homopolymer is not
the same as a copolymer for purposes of determining whether the Kent application is
cumulative. In light of the fact that the claim refers to a “copolymer or homopolymer,”
however, it was not unreasonable for the court to treat both types of polymers similarly.
Therefore, we see no clear error in the district court’s analysis, and we affirm the district
court’s finding that the Kent application is cumulative of the Pitt article.
Regarding the Nevin patent, we agree with OWL that the district court did not
explicitly address whether the Nevin patent contains a purification method and that it
focused instead on the issue of the patent’s disclosure of the polymer. Nevertheless,
OWL fails to demonstrate how the district court erred in its determination, particularly in
view of the Nevin patent’s disclosure of a method of purifying high molecular polymers
by using organic solvents. Nevin patent, col. 3, ll. 47-68. In any event, to the extent
that the district court erred in finding that the Kent application is cumulative of the Nevin
patent, that error is harmless in light of the court’s finding that the Kent application was
cumulative of the Pitt article and therefore not material.
We also uphold, as not clearly erroneous, the district court’s conclusion that there
was not clear and convincing evidence that TAP intended to mislead the PTO by
withholding the Kent application until it submitted its supplemental IDS. OWL argues
that TAP intentionally postponed the disclosure of the Kent application until it was too
late, as a practical matter, for the examiner to review it. OWL further argues that TAP
made a false statement to the PTO at that time because its patent attorney stated with
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respect to the Kent application that “[n]o technique is disclosed in this reference for
purifying polymers.” The attorney’s statement is misleading, according to OWL,
because the Kent application disclosed a technique for purifying polymers through its
incorporation by reference of the Boswell patent, which taught such a technique.
The district court based its finding that TAP did not intend to deceive the PTO on
several factors. First, the court noted that the European search report indicated that the
European Patent Office did not believe the Kent application was material, because it
characterized the Kent application as merely technological background and thus not
material to patentability. Moreover, the court observed that TAP submitted the
European search report to the examiner within a month after receiving it. Finally, the
court concluded that TAP introduced “significant evidence demonstrating that the ’721
applicants did not believe the [Kent application] to be material,” including “credible
evidence that [the inventor] did not believe that [the Kent application] incorporates
Boswell to the extent it disclosed any purification techniques.” Credibility findings are
highly factual determinations that are almost invariably left to the trial court. Syntex LLC
v. Apotex, Inc., 407 F.3d 1371, 1384 (Fed. Cir. 2005). We are not persuaded that the
district court’s credibility determination was insupportable or that there is any other
reason to find that the court committed clear error in finding that TAP did not act with an
intent to deceive the PTO. Accordingly, we affirm the district court’s ruling that the ’721
and ’228 patents are not unenforceable for inequitable conduct.
II
TAP’s cross-appeal involves the ’663 patent, the ’021 patent, and the ’020
patent. Those three patents are directed to extending the period during which certain
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microcapsules can be stored by interspersing molecules of sugars among the
microcapsules. Claim 1 of the ’663 patent is representative of the asserted claims. It
provides:
A prolonged release microcapsule for injection, which comprises particles
containing a water-soluble drug, the particles being dispersed in a
spherical microcapsule matrix composed of a copolymer of lactic acid and
glycolic acid having a comonomer ratio within the range of about 100/0 to
50/50 and an average molecular weight within the range of about 5,000 to
200,000, the spherical microcapsule matrix having an average diameter of
2 to 200 µm and an excipient selected from the group consisting of
mannitol, sorbitol, lactose and glucose, which particles are produced by in-
water drying.
TAP disputes the district court’s construction of the claim term “particles containing a
water-soluble drug, the particles being dispersed in a spherical microcapsule matrix.”
Relying on language from the specification and testimony by OWL’s expert, Dr. Pitt, the
district court construed the term “particles” in that limitation to contain both a drug and a
drug-retaining substance.
We agree with the district court’s construction. While nothing in the claim
specifically refers to a “drug-retaining substance,” the specification makes clear that the
phrase “particles containing a water-soluble drug” must be interpreted as requiring both
a drug and some substance in which to retain the drug. As the district court noted, not
only do all of the 31 examples in the specification describe the use of particles
containing a drug and a drug-retaining substance, but the specification provides that a
drug-retaining substance “must be used in sufficient amount to ensure that the initial
viscosity of the inner aqueous layer in the water-in-oil emulsion described hereinafter
will not be lower than about 5000 centipoises . . . .” ’663 patent, col. 4, ll. 49-52
(emphasis added). The specification further describes the drug-retaining substance as
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a benefit of the invention, stating that “[s]ince a drug retaining substance is employed,
the water-soluble drug can be incorporated in the microcapsule more easily and
efficiently than by the conventional drying in solvent technique.” Id., col. 10, ll. 11-14.
That description is supported by the comparative data found in Table 3 and the
accompanying explanation, which show that the drug is more easily incorporated in the
microcapsule due to the addition of a drug retaining substance such as gelatin. See id.,col. 12, ll. 48-53 (“when the in water drying technique . . . is carried out without
gelatin . . . , the takeup ratio are as low as 1.9 to 6.7% whereas the takeup ratio for the
microcapsules according to this invention are as high as 44.0% to 71.5%”). Finally, in
describing how the microcapsules are made, the specification provides that “[t]he
prolonged release microcapsule of the present invention is made by preparing a water-
in-oil emulsion comprising an inner aqueous layer containing said water-soluble drug
and a drug retaining substance . . . .” Id., col. 1, ll. 33-34.
TAP contends that the claims do not require inclusion of a “drug-retaining
substance,” for two principal reasons. First, TAP argues that the district court’s
construction is too narrow because the claim employs the word “containing,” which TAP
asserts has a well-established meaning identical to “comprising.” TAP argues that the
meaning of “containing” is “having at least the named component” and therefore that
“particles containing a water-soluble drug” means that the particles must be composed
“either (1) wholly of water-soluble drug or (2) partially of water-soluble drug plus
additional ingredients.” The word “containing,” however, has two possible meanings as
applied to the claims at issue in this case: (1) the one TAP suggests, and (2) the one
adopted by the district court, i.e., one substance encompassed within another. In light
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of the two different possible meanings for the term “containing,” it was entirely
reasonable for the district court to look to the specification as well as extrinsic evidence
to determine the manner in which the term was used in the three patents at issue. Intel
Corp. v. VIA Techs., Inc., 319 F.3d 1357, 1367 (Fed. Cir. 2003).
TAP’s second argument is that the district court improperly relied on the
testimony of OWL’s expert, Dr. Pitt, in finding that the claimed particles require a drug-
retaining substance because the word “containing” is not a technical term and the court
therefore should not have resorted to extrinsic evidence to determine the meaning of
the term as used in the patents. TAP, however, relies too heavily on the
characterization of the word “containing” as a non-technical term. As the district court
correctly pointed out, a word describing patented technology takes its definition from the
context in which it was used by the inventor. See Anderson v. Int’l Eng’g & Mfg., Inc.,
160 F.3d 1345, 1348-49 (Fed. Cir. 1998). While the term “containing” is not a technical
term, the term is essential in helping to describe the patented technology. As a result,
the term cannot be defined by some ordinary meaning isolated from the proper context,
and it was appropriate for the district court not only to consider the intrinsic evidence,
but also to consider Dr. Pitt’s interpretation of that evidence, both in context and from
the perspective of a person of ordinary skill in the art. See Phillips v. AWH Corp., No.
03-1269, slip op. 18-19 (Fed. Cir. July 12, 2005) (en banc).
We therefore uphold the district court’s interpretation of the phrase “particles
containing a water-soluble drug” to require the presence of a drug-retaining substance
along with the drug. TAP does not dispute that, under the district court’s claim
construction, summary judgment of no literal infringement is proper. Moreover, we
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agree with the district court that a finding of infringement under the doctrine of
equivalents would vitiate an essential limitation of the claim, i.e., the presence of the
drug-retaining substance. Because OWL’s product does not infringe the ’663 patent,
the ’021 patent, or the ’020 patent, either literally or under the doctrine of equivalents,
this court affirms the district court’s grant of summary judgment of noninfringement as to
those patents.
Each party shall bear its own costs for this appeal.
AFFIRMED.
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