Bayer Healthcare LLC v. Baxalta Inc. ( 2021 )

Case: 19-2418 Document: 67 Page: 1 Filed: 03/01/2021
United States Court of Appeals
for the Federal Circuit
______________________
BAYER HEALTHCARE LLC,
Plaintiff-Cross-Appellant
v.
BAXALTA INC., BAXALTA US INC.,
Defendants-Appellants
NEKTAR THERAPEUTICS,
Defendant-Appellee
______________________
2019-2418, 2020-1017
______________________
Appeals from the United States District Court for the
District of Delaware in No. 1:16-cv-01122-RGA, Judge
Richard G. Andrews.
______________________
Decided: March 1, 2021
______________________
BRADFORD J. BADKE, Sidley Austin LLP, New York,
NY, argued for plaintiff-cross-appellant. Also represented
by SONA DE, CHING-LEE FUKUDA; JOSHUA JOHN FOUGERE,
RYAN C. MORRIS, PAUL ZEGGER, Washington, DC.
EDGAR HAUG, Haug Partners LLP, New York, NY, ar-
gued for defendants-appellants and defendant-appellee.
Also represented by KAITLIN ABRAMS, NICHOLAS F. GIOVE,
JONATHAN HERSTOFF, ERIKA SELLI.
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2 BAYER HEALTHCARE LLC v. BAXALTA INC.
______________________
Before NEWMAN, LINN, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
This patent infringement case presents various issues
of claim scope, infringement, validity, and damages. Bayer
HealthCare LLC sued Baxalta Inc. and Baxalta US Inc.
(collectively, “Baxalta”) and Nektar Therapeutics, alleging
that Baxalta’s biologic product Adynovate® infringes cer-
tain claims of Bayer’s U.S. Patent No. 9,364,520. The jury
found that the asserted claims were enabled and infringed,
and that Bayer was entitled to reasonable-royalty dam-
ages. The district court did not, however, send the question
of willful infringement to the jury, instead holding as a
matter of law that Baxalta’s conduct did not meet the re-
quirements for willfulness. Baxalta now appeals the dis-
trict court’s denial of its motions for judgment as a matter
of law or a new trial on the issues of infringement, enable-
ment, and damages, along with the court’s award of pre-
verdict supplemental damages. Bayer cross-appeals, chal-
lenging the district court’s denial of its motion for a new
trial on willfulness. We affirm.
BACKGROUND
I
The ’520 patent is directed to recombinant forms of hu-
man factor VIII (or FVIII). FVIII is a protein that is pro-
duced, and released into the bloodstream, by the liver.
FVIII comprises 2,332 amino acids and has six different
structural domains: A1-A2-B-A3-C1-C2. Most relevant to
this case is the domain of FVIII known as the “B-domain.”
As “a critical component of the intrinsic pathway of
blood coagulation,” FVIII is useful in the treatment of he-
mophilia A. ’520 patent col. 1 ll. 29–30. Hemophilia A is
the “most common hereditary coagulation disorder” and is
“caused by deficiency or structural defects in” naturally
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BAYER HEALTHCARE LLC v. BAXALTA INC. 3
occurring FVIII. Id. at col. 1 ll. 27–29. Because FVIII has
a “short half-life” of “only about 11 hours,” as a therapeutic
it “must be administered frequently.” Id. at col. 1 ll. 52–55.
The ’520 patent recognizes that “[t]he need for frequent in-
travenous injection creates tremendous barriers to patient
compliance” and, thus, “[i]t would be more convenient for
the patients if a FVIII product could be developed that had
a longer half-life and therefore required less frequent ad-
ministration.” Id. at col. 1 ll. 56–60; see id. at col. 2
ll. 47–49. Moreover, “the cost of treatment could be re-
duced if the half-life were increased because fewer dosages
may then be required.” Id. at col. 1 ll. 60–62.
The patent explains that a process called “PEGylation”
has “been demonstrated to increase the in vivo half-life of
a protein.” Id. at col. 3 ll. 34–35. PEGylation is the conju-
gation (or attachment) of a polymer called polyethylene gly-
col (PEG) to a protein such as FVIII. See id. at col. 3
ll. 35–37; see also id. at col. 9 ll. 12–14. PEG is a type of
polyalkylene oxide. See id. at col. 8 ll. 41–43.
The patent further teaches that “random” modification
of FVIII by PEGylation was known and that certain ran-
domly PEGylated proteins had been approved as therapeu-
tics. The inventors sought, however, “a more specific
method for PEGylating FVIII” because the prior-art “ran-
dom” approach had several drawbacks:
Random modification of FVIII by targeting pri-
mary amines (N-terminus and lysines) with large
polymers such as PEG and dextran has been at-
tempted with varying degree[s] of success . . . .
This random approach . . . is much more problem-
atic for the heterodimeric FVIII. FVIII has hun-
dreds of potential PEGylation sites, including the
158 lysines, the two N-termini, and multiple histi-
dines, serines, threonines, and tyrosines, all of
which could potentially be PEGylated with rea-
gents primarily targeting primary amines.
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4 BAYER HEALTHCARE LLC v. BAXALTA INC.
Id. at col. 3 l. 50–col. 4 l. 1, col. 4 ll. 19–20.
The patent identifies as an “additional drawback to not
controlling the site of PEGylation on FVIII” the “potential
activity reduction if the PEG were to be attached at or near
critical active sites, especially if more than one PEG or a
single large PEG is conjugated to FVIII.” Id. at col. 4
ll. 7–11. Furthermore, “[b]ecause random PEGylation will
invariably produce large amounts of multiply PEGylated
products, purification to obtain only mono-PEGylated
products will drastically lower overall yield.” Id. at col. 4
ll. 11–14. Finally, the patent explains that “the enormous
heterogeneity in product profile will make consistent syn-
thesis and characterization of each lot nearly impossible”
and constitutes “a barrier to commercialization,” since
“good manufacturing requires a consistent, well-character-
ized product.” Id. at col. 4 ll. 14–19; see id. at col. 4 ll. 4–7
(“[H]eterogeneous processing of full length FVIII can lead
to a mixture of starting material that leads to further com-
plexity in the PEGylated products.”).
Thus, the inventors recognized “a need for an improved
FVIII variant that possesses greater duration of action in
vivo . . . while retaining functional activity,” and that is de-
sirably “produced as a homogeneous product in a consistent
manner.” Id. at col. 4 l. 65–col. 5 l. 3. The patent purports
to overcome the drawbacks of “random” PEGylation by us-
ing “site-directed” PEGylation at the B-domain of FVIII:
The present invention is based on the discovery
that polypeptides having FVIII activity can be co-
valently attached at a predefined site to a biocom-
patible polymer that is not at an N-terminal amine,
and that such polypeptides substantially retain
their coagulant activity. Furthermore, these poly-
peptide conjugates have improved circulation time
and reduced antigenicity. The conjugates of the in-
vention are advantageous over the prior art conju-
gates that had random polymer attachments to
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BAYER HEALTHCARE LLC v. BAXALTA INC. 5
FVIII or attachments at an N-terminal. Site-di-
rected attachment allows one to design modifica-
tions that avoid the regions required for biological
activity and thereby to maintain substantial FVIII
activity. . . . Site-directed attachment also allows
for a uniform product rather than the heterogene-
ous conjugates produced in the art by random pol-
ymer coupling.
Id. at col. 8 ll. 15–30; see id. at col. 15 ll. 9–13 (explaining
that the “retained activity” of the claimed conjugates was
“surprising” given “the problems with past polymeric con-
jugates causing nonspecific addition and reduced activity”).
Claim 1 is the only asserted independent claim and re-
cites:
1. An isolated polypeptide conjugate comprising a
functional factor VIII polypeptide and one or more
biocompatible polymers, wherein the functional
factor VIII polypeptide comprises the amino acid
sequence of SEQ ID NO: 4 or an allelic variant
thereof and has a B-domain, and further wherein
the biocompatible polymer comprises polyalkylene
oxide and is covalently attached to the functional
factor VIII polypeptide at the B-domain.
Id. at col. 61 ll. 9–16 (emphases added to the disputed claim
terms).
II
Bayer sued Baxalta and Nektar, Baxalta’s collaborator
on its Adynovate® product, for patent infringement. Ady-
novate® is a recombinant PEGylated FVIII product used to
treat hemophilia A. Adynovate® is made by PEGylating to
amino acids in FVIII that have amine groups, including the
amino acid lysine. We hereafter refer to this process as
“amine/lysine” PEGylation.
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6 BAYER HEALTHCARE LLC v. BAXALTA INC.
The district court construed the claim term “an isolated
polypeptide conjugate” in claim 1 to mean “a polypeptide
conjugate where conjugation was not random.” Bayer
Healthcare LLC v. Baxalta Inc., No. 16-cv-1122, 2018 WL
3212425, at *2 (D. Del. June 29, 2018) (Claim Construction
Op.). The district court determined that, during prosecu-
tion of the ’520 patent, Bayer had “clearly and unmistaka-
bly disclaimed any ‘polypeptide conjugate where
conjugation was random.’” Id. at *4.
In addition, the district court construed the claim term
“at the B-domain” in claim 1 to mean “attachment at the
B-domain such that the resulting conjugate retains func-
tional factor VIII activity.” Id. at *8. The district court re-
jected Baxalta’s proposed construction of the term to mean
“at a site that is not any amine or carboxy site in factor VIII
and is in the B-domain,” finding that Bayer did not dis-
claim PEGylation at amine or carboxy sites. Id. at *8–9.
Baxalta moved for summary judgment of noninfringe-
ment and invalidity for lack of enablement. The district
court denied Baxalta’s motions due to genuine factual dis-
putes. See Bayer HealthCare LLC v. Baxalta Inc.,
No. 16-cv-1122, 2018 WL 6727054, at *3–7 (D. Del. Dec. 21,
2018) (Summ. J. Op.). Baxalta also moved in limine re-
questing that the district court clarify the meaning of “ran-
dom” in its construction of “an isolated polypeptide
conjugate.” The district court denied Baxalta’s motion,
“again reject[ing] [Baxalta’s] argument that [Bayer] de-
fined ‘random’ conjugation as ‘any conjugation at amines or
carboxy sites.’” Bayer HealthCare LLC v. Baxalta Inc.,
No. 16-cv-1122, 2019 WL 10890386, at *1 (D. Del. Jan. 3,
2019) (Mot. in Lim. Order).
Prior to trial, Baxalta moved to exclude the testimony
of Bayer’s damages expert, Dr. Addanki, regarding his pro-
posed reasonable-royalty rate. In his expert report, Dr. Ad-
danki opined that Bayer was entitled to a royalty rate of
23.75%—the midpoint of the bargaining range of 5.1% to
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BAYER HEALTHCARE LLC v. BAXALTA INC. 7
42.4%—based on the Nash Bargaining Solution. The dis-
trict court concluded that the expert failed to tie his 50/50
split to the facts of the case, and thus excluded his “opinion
that a reasonable royalty rate is ‘the mid-point of the bar-
gaining range’ . . . , including any subsequent opinions that
rely on that mid-point rate.” Bayer HealthCare LLC v. Bax-
alta Inc., No. 16-cv-1122, 2019 WL 330149, at *8 (D. Del.
Jan. 25, 2019) (Daubert Order). The district court denied,
however, Baxalta’s request to prohibit Dr. Addanki from
testifying as to his proposed bargaining range of 5.1% to
42.4%.
The case then proceeded to a jury trial. The district
court granted Baxalta’s pre-verdict motion for JMOL of no
willful infringement. Thereafter, the jury found that Bax-
alta infringed asserted claims 1–3 and 8 of the ’520 patent,
and that none of those claims were invalid for lack of ena-
blement. J.A. 1889–90, 1892. The jury also found that
Bayer was entitled to $155,190,264 in reasonable-royalty
damages for the time period from June 14, 2016 through
November 30, 2018 based on a 17.78% royalty rate applied
to a $872,836,128 royalty base. J.A. 1893.
Following the verdict, Baxalta moved for JMOL or a
new trial on the issues of infringement, enablement, and
damages. The district court denied Baxalta’s motions. See
generally Bayer Healthcare LLC v. Baxalta Inc.,
407 F. Supp. 3d 462 (D. Del. 2019) (JMOL Op.). For its
part, Bayer moved under Rule 59 of the Federal Rules of
Civil Procedure for an award of pre-verdict supplemental
damages for the time period from December 1, 2018
through February 8, 2019, the date of the district court’s
judgment. The district court granted Bayer’s motion and
awarded Bayer supplemental damages in the amount of
$18,324,562 based on the actual sales data for that period
and the jury’s 17.78% royalty rate. Bayer Healthcare LLC
v. Baxalta Inc., No. 16-cv-1122, 2019 WL 4016235, at *6
(D. Del. Aug. 26, 2019) (Rule 59 Op.); Final Judgment at 2,
Bayer Healthcare LLC v. Baxalta Inc., No. 16-cv-1122
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8 BAYER HEALTHCARE LLC v. BAXALTA INC.
(D. Del. Sept. 10, 2019), ECF No. 507. Bayer also moved
for a new trial under Rule 59(a) on the issue of willfulness,
but the district court denied its motion. Rule 59 Op.,
2019 WL 4016235, at *8–9.
Bayer and Baxalta appeal. We have jurisdiction pur-
suant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
This case presents various issues on appeal and cross-
appeal. We start by addressing Baxalta’s challenges to the
district court’s construction of the claim term “at the B-do-
main” and its interpretation of the word “random” in its
construction of the claim term “an isolated polypeptide con-
jugate.” We then turn to Baxalta’s challenges to the dis-
trict court’s judgments of infringement and enablement,
along with the court’s awards of damages and pre-verdict
supplemental damages. Finally, we address Bayer’s chal-
lenge to the district court’s judgment of no willful infringe-
ment.
I
We first address Baxalta’s challenge to the district
court’s construction of the disputed term “at the B-domain”
in claim 1. Baxalta contends that the district court erred
in failing to construe the term to exclude amine/lysine con-
jugation. Neither the parties nor the district court consid-
ered extrinsic evidence in construing this claim term.
“Claim construction based on the intrinsic evidence is a
question of law that this court reviews de novo.” Hologic,
Inc. v. Minerva Surgical, Inc., 957 F.3d 1256, 1269
(Fed. Cir. 2020) (citing Trs. of Columbia Univ. v. Symantec
Corp., 811 F.3d 1359, 1362 (Fed. Cir. 2016)). “The con-
struction of claim terms based on the claim language, the
specification, and the prosecution history are legal deter-
minations.” Id. (quoting Trs. of Columbia Univ., 811 F.3d
at 1362). Based on our review of the claim language, spec-
ification, and prosecution history, we conclude that the
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BAYER HEALTHCARE LLC v. BAXALTA INC. 9
district court did not err in construing the disputed claim
term.
A
The plain claim language recites “[a]n isolated polypep-
tide conjugate” in which PEG “is covalently attached to the
functional factor VIII polypeptide at the B-domain.” The
plain language of claim 1 does not require PEGylation at
any particular amino acid sites in the B-domain, let alone
exclude from its scope any specific amino acids as attach-
ment sites in the B-domain. Rather, claim 1 more broadly
requires PEGylation at the B-domain as a region.
B
Statements in the specification support this view of the
claims and indicate that site-directed PEGylation target-
ing the B-domain, rather than particular amino acid sites
within it, achieved the desired benefit of retaining coagu-
lation activity. See, e.g., ’520 patent col. 4 ll. 7–9 (“An ad-
ditional drawback to not controlling the site of PEGylation
on FVIII is a potential activity reduction if the PEG were
to be attached at or near critical active sites . . . .”); id.
at col. 8 ll. 23–26 (“Site-directed attachment allows one to
design modifications that avoid the regions required for bi-
ological activity and thereby to maintain substantial FVIII
activity.”). We acknowledge that the specification discloses
embodiments of site-directed PEGylation at cysteine amino
acids within the B-domain. See, e.g., id. at col. 5 ll. 46–57,
col. 20 l. 56–col. 21 l. 5. But the specification does not state
that this is the only embodiment or otherwise indicate that
the invention is limited to site-directed PEGylation at cys-
teine amino acids within the B-domain and, as noted above,
the claim language is not so limited.
On appeal, Baxalta contends that the specification dis-
parages amine/lysine conjugation. In particular, it points
to the “Background of the Invention,” which discloses that
“[r]andom modification of FVIII by targeting primary
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10 BAYER HEALTHCARE LLC v. BAXALTA INC.
amines (N-terminus and lysines) with large polymers such
as PEG” has “been attempted with varying degrees of suc-
cess,” and that “[t]his random approach, however, is much
more problematic” because FVIII has “hundreds of poten-
tial PEGylation sites.” Appellants’ Br. 24 (quoting ’520 pa-
tent col. 3 l. 50–col. 4 l. 1). To support its disparagement
argument, Baxalta cites Indivior Inc. v. Dr. Reddy’s Labor-
atories, S.A., 930 F.3d 1325 (Fed. Cir. 2019), and SciMed
Life Systems, Inc. v. Advanced Cardiovascular Systems,
Inc., 242 F.3d 1337 (Fed. Cir. 2001). Although Baxalta pre-
sents a close question as to disparagement, the facts here
differ from those of cases finding disclaimer based on the
specification.
In Indivior, the asserted patent claimed pharmaceuti-
cal films with uniform distribution of the active ingredient.
930 F.3d at 1331. The claims identified “drying” as a pa-
rameter that contributes to film uniformity. Id. at 1332.
The specification taught that using conventional drying
methods, which applied hot air to the top of the film, pro-
duced nonuniform films. Id. The specification also dis-
closed controlled drying methods that differed from
conventional techniques. Id. The district court construed
the drying limitation to mean “dried without solely employ-
ing conventional convection air drying from the top” based
on its conclusion that the patentee disclaimed drying films
using solely conventional top air drying. Id. at 1336. We
agreed with the district court’s construction, concluding
that “the specification repeatedly disparages conventional
top air drying because such drying does not produce uni-
form films, the central object of the claimed invention.” Id.
at 1337. The “specification also provide[d] examples that
demonstrate[d] the failure of conventional drying methods
to achieve uniformity.” Id.
Similarly, we concluded in SciMed that the shared
specification of the patents-in-suit disclaimed an embodi-
ment from the scope of the asserted claims. The patents
were drawn to balloon dilatation catheters containing two
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BAYER HEALTHCARE LLC v. BAXALTA INC. 11
passageways, or lumens. 242 F.3d at 1338–39. Two ar-
rangements of the lumens were practiced in the art: the
dual lumen configuration and the coaxial lumen configura-
tion. Id. at 1339. The district court construed the asserted
claims to be limited to catheters with coaxial lumens, and
not to read on catheters with dual lumens. Id. We agreed
with the district court’s construction because the specifica-
tion unequivocally limited “all embodiments” of the
claimed invention to a coaxial lumen configuration. Id.
at 1340, 1343–44. In particular, the specification repeat-
edly defined “the invention” as catheters having a coaxial
lumen structure and discussed the disadvantages of prior-
art catheters having a dual lumen configuration. Id.at 1342–44.
We likewise determined that the patent owner in Gaus
v. Conair Corp., 363 F.3d 1284 (Fed. Cir. 2004), unequivo-
cally disclaimed a particular embodiment from its claims’
scope and therefore could not rely on the doctrine of equiv-
alents to cover that embodiment. The patent at issue
claimed a device, such as a hairdryer, comprising “an elec-
trical operating unit and a pair of spaced-apart electrically
exposed conductive probe networks.” Id. at 1287. The
specification “made clear that it is essential to [the] inven-
tion that the pair of probe networks be separate from the
voltage-carrying components of the appliance, i.e., the ‘elec-
trical operating system.’” Id. at 1291. By contrast, the
specification “criticized prior art in which the protective de-
vice relied on the fluid coming in contact with the voltage-
carrying portions of the system.” Id. Thus, we concluded
that the patent owner “disavowed coverage of devices in
which the two components are not separate and in which
the protective cut-off mechanism is not triggered until the
water reaches the electrical operating system.” Id.Each of these cases presented a strong case of dis-
claimer of a particular feature from the scope of a claim
because the specification made clear that the invention did
not include that feature. See Indivior, 930 F.3d at 1337;
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12 BAYER HEALTHCARE LLC v. BAXALTA INC.
SciMed, 242 F.3d at 1342–44; Gaus, 363 F.3d at 1291. The
specification of the ’520 patent disparages random PEGyla-
tion of FVIII, including random PEGylation targeting
amines like lysines, but nowhere disparages non-random,
site-directed amine/lysine PEGylation at the B-domain.
Thus, we agree with the district court that Bayer did not
unequivocally disclaim non-random amine/lysine PEGyla-
tion in the specification.
C
We turn next to the prosecution history, which can be
helpful in understanding the proper claim construction.
We are not persuaded that the prosecution history includes
a clear and unmistakable surrender of claims directed to
non-random amine/lysine PEGylation. Nor are we per-
suaded that Bayer’s statements during prosecution other-
wise require a claim construction that would exclude such
conjugates.
During prosecution of the ’520 patent, the Examiner
rejected the pending claims as inherently anticipated by a
patent application filed by Nektar: Bossard. 1 On appeal to
the Patent Trial and Appeal Board, Bayer argued that
Bossard did not teach the claimed conjugates because
Bossard’s “alleged showing of B-domain attachment is ran-
dom PEGylation and does not ensure that attachment oc-
curs at the B-domain.” J.A. 3507. Bayer also argued that
its then-rejected claim 58, which ultimately issued as
claim 1, “excludes compositions of randomly PEGylated
factor VIII in which some conjugates have PEGylation at
the B-domain but a large number do not.” Id. Bayer con-
tinued by stating that:
The Patent Office . . . relies on passages in Bossard
that show random PEGylation at any one of nu-
merous amino acid residues in the 2,332-amino
1 U.S. Patent. Pub. No. 2004/0235734.
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BAYER HEALTHCARE LLC v. BAXALTA INC. 13
acid protein that have the disclosed functionality.
Specifically, the Patent Office asserts that Bossard
et al. “teach many polymer attachment sites such
as ‘lysine, cysteine and/or arginine’, ‘amine groups’
and/or ‘carboxyl groups’ for the site of attachment
to factor VIII, wherein said many polymer attach-
ment sites are presented in the B-domain . . . .”
These types of sites are present in the B-domain,
but they are also present in many other domains of
factor VIII. This description does not ensure that
attachment occurs at the B-domain, and does not
disclose isolated conjugates with attachment at the
B-domain.
J.A. 3507–08 (second ellipsis in original) (citations omitted)
(emphases added). In response to the Examiner’s Answer
and specifically the Examiner’s arguments based on
Bossard, Bayer argued in its reply brief to the Board that:
Much of the Patent Office’s prior arguments relied
upon possible conjugation at amines or carboxy
sites, which are present not only in the B-domain
but in other domains. Any conjugation with these
reactive groups is random and does not ensure that
attachment occurs at the B-domain.
J.A. 4599 (emphases added).
Baxalta’s disclaimer arguments based on Bayer’s state-
ments to the Board have some merit. Ultimately, however,
we agree with the district court’s view as to how a person
of ordinary skill in the art would have understood the pros-
ecution history as a whole. Specifically, we agree with the
district court that when the “entire passage” from Bayer’s
reply brief is “read together, it is clear that ‘[a]ny conjuga-
tion’ refers to the conjugations allegedly disclosed by
Bossard.” Summ. J. Op., 2018 WL 6727054, at *4. Specif-
ically, though Bossard “may have taught conjugations at
various sites on factor VIII, such as amines or carboxy
sites,” Bayer “argued that the conjugations were not
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14 BAYER HEALTHCARE LLC v. BAXALTA INC.
targeted to particular sites” and, thus, “described ‘[a]ny
conjugation’ in Bossard as random.” Id. As the district
court reasoned, it “does not follow” that Bayer “defined all
conjugations with amines or carboxy sites as random.” Id.;
see also Claim Construction Op., 2018 WL 3212425, at *9
(“[Bayer] stated that conjugation at amines and carboxy
sites cannot ensure PEGylation at the B-domain—not that
conjugation cannot occur at amines and carboxy sites.”).
We agree with the district court that Bayer distinguished
the prior art on the ground that it did not teach non-ran-
dom PEGylation at the B-domain, and that Bayer did not
clearly and unmistakably disclaim all PEGylation at
amines and carboxy sites.
Additional sections of the prosecution history support
our conclusion. First, the prosecution history reveals that
Bossard randomly PEGylated at both lysines and cysteines
on FVIII, which undermines Baxalta’s position that Bayer
disclaimed the former but not the latter as sites for
PEGylation. Second, the Board reversed the Examiner’s
anticipation rejection based on a separate prior-art refer-
ence, Rostin. 2 The Examiner argued that Rostin’s PEG at-
tached to the lysine in Rostin’s shortened B-domain, and
thus inherently anticipated Bayer’s claims. The Board dis-
agreed, holding that Rostin’s PEG did not “necessarily at-
tach[] to the single lysine located in the [shortened]
B-domain” because there were many other lysines through-
out FVIII. J.A. 3589–90. These passages suggest that the
Examiner and the Board understood that lysine PEGyla-
tion at the B-domain was within the scope of Bayer’s
claims.
Finally, Baxalta’s reliance on the applicants’ state-
ments during prosecution of the ’520 patent’s European
2 Rostin, J., et al., B-Domain Deleted Recombinant
Coagulation Factor VIII Modified with Monomethoxy Poly-
ethylene Glycol, Bioconjugate Chem., 11:387–96 (2000).
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BAYER HEALTHCARE LLC v. BAXALTA INC. 15
counterpart 3 is misplaced. To overcome an anticipation re-
jection, the applicants argued that the asserted prior-art
reference “teaches random PEGylation at any lysine on the
FVIII molecule and therefore does not anticipate the pres-
ently claimed isolated conjugates in which essentially all
the molecules have a polymer attached at the B-domain.”
J.A. 7702 (emphasis added). A skilled artisan would not
read this statement as a clear and unmistakable exclusion
of non-random lysine PEGylation at the B-domain from the
asserted ’520 patent claims’ scope. Rather, when read in
context of the entire response, this statement appears to
distinguish the process claimed in the European applica-
tion from the process of random PEGylation using lysine in
the prior art. Indeed, the applicants argued that “none of
the references cited by the Examiner anticipate the present
claims, as they disclose only random modification and not
specific conjugation at the B-domain.” J.A. 7701–02. More-
over, the district court correctly noted this court’s admoni-
tion that “varying legal and procedural requirements for
obtaining patent protection in foreign countries might ren-
der consideration of certain types of representations inap-
propriate for consideration in a claim construction analysis
of a United States counterpart.” 4 Claim Construction Op.,
3 Eur. Pat. Appl. No. 11153287.4.
4 We also consider unpersuasive Baxalta’s reliance
on Bayer’s statements during prosecution of U.S. Patent
Application No. 13/748,983, a continuation of the applica-
tion that issued as the ’520 patent. Similar to the ’520 pa-
tent specification, Bayer told the Examiner that “[r]andom
modification of Factor VIII such as by targeting primary
amines with large polymers such as PEG had been at-
tempted,” but that this “random approach, however, re-
sults in a heterogenous product with polymer attachment
possible at many potential sites.” J.A. 9093. The claims of
the continuation application recited polymer attachment to
Case: 19-2418 Document: 67 Page: 16 Filed: 03/01/2021
16 BAYER HEALTHCARE LLC v. BAXALTA INC.
2018 WL 3212425, at *5 (quoting AIA Eng’g Ltd. v. Ma-
gotteaux Int’l S/A, 657 F.3d 1264, 1279 (Fed. Cir. 2011)).
Although Baxalta’s challenge presents close questions,
we conclude that the claim language, specification, and
prosecution history are more aligned with the district
court’s construction.
II
We next consider Baxalta’s challenge to the district
court’s refusal to define the term “random” in its construc-
tion of “an isolated polypeptide conjugate” in claim 1. Bax-
alta contends that the district court’s decision not to
construe “random” improperly delegated to the jury the
task of determining claim scope and warrants a new trial
on infringement. We disagree.
“When the parties present a fundamental dispute re-
garding the scope of a claim term, it is the court’s duty to
resolve it.” O2 Micro Int’l Ltd. v. Beyond Innovation Tech.
Co., 521 F.3d 1351, 1362 (Fed. Cir. 2008). “This duty re-
sides with the court because, of course, ‘the ultimate ques-
tion of construction [is] a legal question.’” Eon Corp. IP
Holdings v. Silver Spring Networks, Inc., 815 F.3d 1314,
1318 (Fed. Cir. 2016) (alteration in original) (quoting Teva
Pharms. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 842
FVIII “at only the heavy chain,” not “at the B-domain.”
J.A. 9091, 9094. Thus, the cited statement is not relevant
to the construction of the ’520 patent’s different claim term.
See Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340,
1349 (Fed. Cir. 2004) (“[T]he prosecution history of one pa-
tent is relevant to an understanding of the scope of a com-
mon term in a second patent stemming from the same
parent application.” (emphasis added)). Even if this state-
ment were relevant, it still demonstrates, at most, a dis-
claimer of random PEGylation.
Case: 19-2418 Document: 67 Page: 17 Filed: 03/01/2021
BAYER HEALTHCARE LLC v. BAXALTA INC. 17
(2015)). We have observed, however, that “a sound claim
construction need not always purge every shred of ambigu-
ity.” Id. (quoting Acumed LLC v. Stryker Corp., 483 F.3d
800, 806 (Fed. Cir. 2007)).
We conclude that the district court did not violate its
duty to interpret the claims in declining to provide a de-
tailed interpretation of the term “random” in its claim con-
struction instructions to the jury. The district court
construed the claim term “an isolated polypeptide conju-
gate” to mean “a polypeptide conjugate where conjugation
was not random.” The district court resolved the parties’
controversies as to the meaning of “random.” Specifically,
the district court addressed and rejected Baxalta’s two ar-
guments: (1) that “random” conjugation means any conju-
gation at amines or carboxy sites; and (2) that “random”
conjugation means all heterogenous conjugation.
In construing the claim term “an isolated polypeptide
conjugate,” the district court rejected Baxalta’s argument
that the specification disclaimed “heterogeneous conju-
gates” by disparaging such conjugates. Claim Construction
Op., 2018 WL 3212425, at *3. The district court observed
that the patent “never distinguishes B-domain pegylated
conjugate products” having “any degree” or “even the
slightest degree” of heterogeneity. Id. The district court
explained that, instead, the specification “disparage[s]
products with a high degree of heterogeneity.” Id.; see id.
at *4 (concluding that the specification disparages random
conjugation in stating that such conjugation is “problem-
atic” for FVIII because it yields “enormous heterogeneity in
its product profile” (quoting ’520 patent col. 8 ll. 28–30)).
The district court reiterated its conclusion when it de-
nied Baxalta’s motion for summary judgment of nonin-
fringement. Specifically, the district court stated that it
had “determined during claim construction that non-ran-
dom conjugation does not require total homogeneity,” and
that it had disagreed with Baxalta that Bayer “disclaimed
Case: 19-2418 Document: 67 Page: 18 Filed: 03/01/2021
18 BAYER HEALTHCARE LLC v. BAXALTA INC.
all heterogeneous conjugation.” Summ. J. Op., 2018 WL
6727054, at *4. The district court made clear that it was
referring to heterogeneity among FVIII conjugates in a
product and heterogeneity within each individual FVIII
conjugate. Id. In other words, according to the district
court, non-random conjugation neither required that each
FVIII protein in a product such as Adynovate® be
PEGylated in the same places (homogeneity among conju-
gates in the product) nor required that every PEG on each
FVIII protein be in the B-domain (homogeneity within each
conjugate). Thus, it rejected Baxalta’s noninfringement po-
sition that “the fact that some pegylation occurs outside the
B-domain is sufficient to show that Adynovate is made by
random conjugation.” Id.The district court further reiterated this conclusion in
its orders denying Baxalta’s pre-trial motions. First, the
district court denied Baxalta’s motion in limine seeking
further construction of “random” to mean “any conjugation
at amines or carboxy sites” or, alternatively, that PEG
“may attach at any available site of reaction throughout
the protein.” J.A. 29244. The district court found it unnec-
essary “to further construe [its] construction by explicitly
defining ‘random,’” given its earlier holdings at claim con-
struction and summary judgment. Mot. in Lim. Order,
2019 WL 10890386, at *1. Furthermore, in denying Bax-
alta’s motion to exclude Bayer’s damages expert, the dis-
trict court reiterated once again that “infringement does
not require complete homogeneity—that is, some PEGs
may attach outside the B-domain.” Daubert Order,
2019 WL 330149, at *9. Having resolved this issue, the
district court then left it to the parties to present evidence
to the jury as to whether or not Adynovate® is the result of
random or non-random conjugation.
That the district court resolved this issue is further
supported by the fact that Baxalta did not ask the district
court to give additional jury instructions on the meaning of
“random.” J.A. 1595–96 (Tr. 1374:18–1375:25). In fact,
Case: 19-2418 Document: 67 Page: 19 Filed: 03/01/2021
BAYER HEALTHCARE LLC v. BAXALTA INC. 19
Baxalta “object[ed] to anything going to the jury about
claim construction other than [the district court’s] claim
construction order.” J.A. 1595 (Tr. 1374:19–21).
Moreover, Baxalta’s argument as to the district court’s
use of “random” is another attempt to arrive at the same
construction Baxalta sought for the claim term “at the
B-domain” because it attempts to equate “random” with
amine/lysine PEGylation. For the reasons discussed above
regarding the district court’s construction of “at the B-do-
main,” we again reject Baxalta’s argument that amine/ly-
sine PEGylation is outside the scope of the asserted claims.
III
We next turn to Baxalta’s challenge to the jury’s in-
fringement finding, which is a question of fact that we re-
view for substantial evidence. Eon Corp., 815 F.3d at 1318.
We hold that substantial evidence supports the jury’s in-
fringement verdict and, therefore, the district court did not
err in denying Baxalta’s motion for JMOL of noninfringe-
ment.
This court reviews the denial of a motion for JMOL un-
der regional circuit law, here, Third Circuit law. Idenix
Pharms. LLC v. Gilead Scis. Inc., 941 F.3d 1149, 1153
(Fed. Cir. 2019) (citing Tr. of Boston Univ. v. Everlight El-
ecs. Co., 896 F.3d 1357, 1361 (Fed. Cir. 2018)). Applying
Third Circuit law, we “exercise plenary review over a dis-
trict court’s rulings on motions for JMOL, applying the
same standard as the district court.” Id. (quoting Agrizap,
Inc. v. Woodstream Corp., 520 F.3d 1337, 1341–42
(Fed. Cir. 2008)); see Gagliardo v. Connaught Labs., Inc.,
311 F.3d 565, 568 (3d Cir. 2002). “A grant of JMOL is ap-
propriate ‘where a party has been fully heard on an issue
during a jury trial and the court finds that a reasonable
jury would not have had a legally sufficient evidentiary ba-
sis to find for the party on that issue.’” Idenix, 941 F.3d
at 1153–54 (quoting Agrizap, 520 F.3d at 1342); see also
Fed. R. Civ. P. 50(a). The court should grant JMOL
Case: 19-2418 Document: 67 Page: 20 Filed: 03/01/2021
20 BAYER HEALTHCARE LLC v. BAXALTA INC.
“sparingly” and “only if, viewing the evidence in the light
most favorable to the nonmovant and giving it the ad-
vantage of every fair and reasonable inference, there is in-
sufficient evidence from which a jury reasonably could find
liability.” Marra v. Phila. Hous. Auth., 497 F.3d 286, 300
(3d Cir. 2007) (citations omitted).
Bayer presented documentary evidence and expert wit-
ness testimony demonstrating that Adynovate® meets the
limitations of claim 1 of the ’520 patent as construed by the
district court. Bayer’s biochemistry and protein chemistry
expert, Dr. Ploegh, testified about Baxalta’s letter to the
U.S. Food and Drug Administration seeking support for
Orphan Drug designation for its recombinant FVIII prod-
uct BAX 855, which it later named Adynovate®.
J.A. 654–55 (Tr. 433:9–434:25). In its submission, Baxalta
represented to the FDA that “BAX 855 is a modified recom-
binant FVIII protein created by the pre-translational inclu-
sion of the B-domain, and controlled, targeted chemical
addition of 20 [kilodalton] PEG conjugates to this FVIII
B-domain.” J.A. 36942 (emphases added). Baxalta’s sub-
mission also stated that “evidence suggests that the B-do-
main is more surface-exposed than the other domains, and
becomes accessible to the PEG-reagent under the specific
reaction conditions utilized for the controlled chemical
PEGylation of the FVIII molecule.” J.A. 36944 (emphasis
added). Dr. Ploegh explained that Baxalta’s statements
show that it “exert[s] control [over] how [it] chemically
modif[ies] this protein and the net result is the attachment
of 20 kilodalton preferable to the B-domain of Factor VIII,”
J.A. 655 (Tr. 434:7–11), and that Baxalta made specific re-
action condition choices to “allow[] [it] to target the
PEGylation reaction to the B-domain” of FVIII, id.(Tr. 434:20–25). Dr. Ploegh also walked the jury through
the reaction condition choices Baxalta made to achieve con-
trolled PEGylation at the B-domain. J.A. 656–61
(Tr. 435:1–440:25); J.A. 670 (Tr. 449:13–22).
Case: 19-2418 Document: 67 Page: 21 Filed: 03/01/2021
BAYER HEALTHCARE LLC v. BAXALTA INC. 21
Bayer’s expert, Dr. Ravetch, a professor of molecular
genetics and immunology and expert on protein structure,
function, and modification, also testified about Baxalta’s
letter to the FDA. In his view, Baxalta’s representations
showed that “the reaction was controlled in such a way to
result in the targeted addition of th[e] PEG to the B-do-
main and that is a nonrandom process.” J.A. 756
(Tr. 535:2–4). Dr. Ravetch opined that random PEGyla-
tions are neither “controlled” nor “targeted,” and that
based on its representations to the FDA, “Baxalta use[d]
conjugation that was not random.” Id. (Tr. 535:6–12).
Dr. Ravetch testified that based on the FDA documents,
testimony from Baxalta and Nektar scientists, and
Dr. Ploegh’s testimony, in his opinion Adynovate® met the
“isolated polypeptide conjugation element” because Bax-
alta “uses a non-random conjugation method to generate
Adynovate.” J.A. 760 (Tr. 539:7–11).
Dr. Ravetch further opined that Adynovate® contains
PEG attached at the B-domain based on test results re-
ported in Baxalta’s Biologics License Application for Ady-
novate®, which indicated to him that “there’s a consistent
PEGylation in a particular region predominantly on B-do-
main” and “B-domain PEGylation was observed as a pre-
dominant aspect of the product.” J.A. 774–75 (Tr. 553:4–
554:3); see also J.A. 38063 (“[T]he consistency of the region-
specific PEGylation predominantly on the B-domain was
confirmed.”). Dr. Ravetch also discussed additional FDA
submissions in which Baxalta provided the FDA with data
showing that 40 out of 55 (or 73%) of the PEG attachment
sites are in the B-domain, which supported his opinion that
Adynovate® is formed by a non-random process in which
PEGylation is region specific and predominant at the B-do-
main. J.A. 775–76 (Tr. 554:12–555:13 (discussing
J.A. 37097)). In one such submission, a technical report
identifying the PEGylation sites of BAX 855, Baxalta
stated: “PEGylation sites are distributed over the whole
rFVIII molecule but clustered on the B-domain. . . . The
Case: 19-2418 Document: 67 Page: 22 Filed: 03/01/2021
22 BAYER HEALTHCARE LLC v. BAXALTA INC.
basis for preferential PEGylation of the B-domain is the
higher density of lysine residues in the B-domain and in
addition the higher flexibility and surface exposure. By
preferential PEGylation the B-domain carries now a new
function in BAX 855 – the prolongation of action of rFVIII.”
J.A. 37077 (emphases added).
We conclude that this is substantial evidence to sup-
port the jury’s finding that Adynovate® meets the claim
limitations. Baxalta’s expert, Dr. Zalipsky, provided con-
trary testimony to Drs. Ploegh and Ravetch, but the jury
was in the best position to determine whether it found
Dr. Zalipsky or Bayer’s experts more persuasive. See Mo-
bileMedia Ideas LLC v. Apple Inc., 780 F.3d 1159, 1168
(Fed. Cir. 2015) (“[W]hen there is conflicting testimony at
trial, and the evidence overall does not make only one find-
ing on the point reasonable, the jury is permitted to make
credibility determinations and believe the witness it con-
siders more trustworthy.”). We discern no error in the dis-
trict court’s conclusion that substantial evidence supported
the jury’s infringement verdict.
IV
We turn next to Baxalta’s argument that no reasonable
jury could find that the ’520 patent enables the full scope
of the claims because it does not enable non-random lysine
PEGylation. “Whether a claim satisfies the enablement re-
quirement is a question of law that we review de
novo. However, ‘in the context of a jury trial, we review the
factual underpinnings of enablement for substantial evi-
dence.’” Idenix, 941 F.3d at 1154 (quoting Everlight,
896 F.3d at 1361)). On the record before us, we conclude
that substantial evidence supports the jury’s verdict that
Baxalta failed to prove by clear and convincing evidence
that the asserted claims are invalid for lack of enablement.
“Enablement requires that ‘the specification teach
those in the art to make and use the invention without un-
due experimentation.’” Id. (quoting In re Wands, 858 F.2d
Case: 19-2418 Document: 67 Page: 23 Filed: 03/01/2021
BAYER HEALTHCARE LLC v. BAXALTA INC. 23
731, 737 (Fed. Cir. 1988)). “A claim is not enabled when,
‘at the effective filing date of the patent, one of ordinary
skill in the art could not practice their full scope without
undue experimentation.’” Id. (quoting Wyeth & Cordis
Corp. v. Abbott Labs., 720 F.3d 1380, 1384 (Fed. Cir. 2013)).
Factors for assessing whether a disclosure would require
undue experimentation include: “(1) the quantity of exper-
imentation necessary, (2) the amount of direction or guid-
ance presented, (3) the presence or absence of working
examples, (4) the nature of the invention, (5) the state of
the prior art, (6) the relative skill of those in the art, (7) the
predictability or unpredictability of the art, and (8) the
breadth of the claims.” Wands, 858 F.2d at 737.
The specification of the ’520 patent includes detailed
instructions as to the reaction conditions required to prac-
tice the claimed invention using cysteine PEGylation, and
includes a working example for non-random cysteine
PEGylation at the B-domain. See ’520 patent col. 20
l. 56–col. 21 l. 5. Additionally, Bayer presented evidence to
the jury bridging the gap between the patent’s disclosures
about cysteine PEGylation on the one hand and non-ran-
dom PEGylation, including non-random lysine PEGyla-
tion, on the other. For example, ’520 patent inventor
Dr. Murphy testified that at the time of the invention, he
did not believe that cysteine conjugation would be the only
way to achieve the claimed B-domain PEGylation of FVIII.
J.A. 574 (Tr. 353:5–8).
In addition, multiple witnesses testified that random
lysine PEGylation was known at the time of the invention.
E.g., J.A. 1248 (Tr. 1027:8–16) (’520 patent inventor
Dr. Pan testifying that nonspecific “lysine PEGylation has
been around for 20, 30 years” and was a “very old technol-
ogy”); J.A. 1563 (Tr. 1342:20–22) (Dr. Ravetch testifying
that lysine PEGylation had been known in the art “20,
30 years prior to these patents[,] [s]o a long time”);
J.A. 1456 (Tr. 1235:21–25) (Dr. Zalipsky testifying that
random lysine PEGylation had been performed by 2005).
Case: 19-2418 Document: 67 Page: 24 Filed: 03/01/2021
24 BAYER HEALTHCARE LLC v. BAXALTA INC.
Moreover, Dr. Russell, Bayer’s expert in protein modifica-
tion, including PEGylation, testified that lysine PEGyla-
tion can be either random or non-random, and that skilled
artisans would have known that various factors, including
reaction conditions and process steps, can be manipulated
to achieve either random or non-random PEGylation. 5 See
J.A. 1527–28 (Tr. 1306:23–1307:10). Consistent with this,
the jury was also entitled to rely on Dr. Ravetch’s testi-
mony that, at the time of the invention, “protein chemistry
[wa]s a well-defined field” going back 150 years and that
the “sophistication and knowledge” in this field regarding
proteins and amino acids had “accumulated over time.”
J.A. 1564 (Tr. 1343:4–18). Similarly, in response to
Dr. Zalipsky’s testimony that ordinarily skilled artisans
would not have known from reading the specification how
to non-randomly PEGylate FVIII with any amino acid
other than cysteine, Dr. Ravetch opined that skilled arti-
sans would have understood that “some amino acids are
more amenable than other amino acids for modification”
based on the amino acids’ known reactivities under differ-
ent conditions. J.A. 1564–65 (Tr. 1343:4–1344:1). In short,
Dr. Ravetch explained to the jury that the advanced
knowledge concerning amino acids—along with the fact
that only a certain subset could be used for PEGylation—
would have aided skilled artisans in applying the teachings
in the patent to prepare a non-random lysine PEGylated
conjugate without undue experimentation. Baxalta, in
5 Though Dr. Russell referenced Baxalta’s Ady-
novate® product in his discussion of random and non-ran-
dom lysine PEGylation, his testimony, when read in
context, more generally concerned what was known in the
art at the time of the invention based on his experience in
protein modification. See J.A. 1528 (Tr. 1307:3–10) (re-
sponding to the question: “what determines whether you
have random PEGylation as opposed to non-random
PEGylation?”).
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BAYER HEALTHCARE LLC v. BAXALTA INC. 25
turn, chose not to cross-examine Dr. Ravetch. J.A. 1565
(Tr. 1344:21).
Based on the record before us, we conclude that sub-
stantial evidence supports the jury’s verdict, and the jury
was not obliged to credit Baxalta’s expert Dr. Zalipsky over
Bayer’s contrary evidence. Bayer presented substantial ev-
idence from which a reasonable juror could find that the
specification’s disclosure of instructions as to the reaction
conditions required to practice the claimed invention using
cysteine PEGylation were sufficient to enable not only non-
random cysteine PEGylation at the B-domain, but also
non-random lysine PEGylation at the B-domain.
Baxalta contends that the district court legally erred in
resorting to the knowledge of a person of ordinary skill as
a “substitute for the specification’s lack of a basic enabling
disclosure.” Appellants’ Br. 59. Baxalta focuses on the ab-
sence of working examples of lysine PEGylation in the
specification. As the district court correctly recognized,
however, that the “novel aspect” of the asserted claims is
non-random PEGylation at the B-domain “does not mean
the specification must disclose an embodiment for non-ran-
dom pegylation at each amino acid in the B-domain.”
JMOL Op., 407 F. Supp. 3d at 472. As this court has re-
peatedly made clear, the specification need not include a
working example of every possible embodiment to enable
the full scope of the claims. See Alcon Rsch. Ltd. v. Barr
Labs., Inc., 745 F.3d 1180, 1189–90 (Fed. Cir. 2014);
Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313,
1336–37 (Fed. Cir. 2003). We are thus not persuaded that
the district court erred in considering the knowledge of an
ordinarily skilled artisan to determine whether undue ex-
perimentation would have been required to practice the in-
vention with lysine. Indeed, whether a patent is enabled—
or requires undue experimentation—are questions that
must be viewed “from the perspective of one of ordinary
skill in the art.” Falko-Gunter Falkner v. Inglis, 448 F.3d
1357, 1365 (Fed. Cir. 2006) (concluding that the Board of
Case: 19-2418 Document: 67 Page: 26 Filed: 03/01/2021
26 BAYER HEALTHCARE LLC v. BAXALTA INC.
Patent Appeals and Interferences did not err in concluding
that claims directed to a poxvirus-based vaccine were ena-
bled by the specification’s detailed teachings of a herpesvi-
rus-based vaccine and the knowledge of a skilled artisan
regarding the two viruses); see also McRO, Inc. v. Bandai
Namco Games Am. Inc., 959 F.3d 1091, 1102 (Fed. Cir.
2020) (“An ‘artisan’s knowledge of the prior art and routine
experimentation can often fill gaps, interpolate between
embodiments, and perhaps even extrapolate beyond the
disclosed embodiments, depending upon the predictability
of the art,’ and a ‘patent need not teach, and preferably
omits, what is well known in the art.’” (first quoting AK
Steel Corp. v. Sollac & Ugine, 344 F.3d 1234, 1244
(Fed. Cir. 2003); and then quoting Spectra-Physics, Inc.
v. Coherent, Inc., 827 F.2d 1524, 1534 (Fed. Cir. 1987))).
Baxalta also contends that it was legal error for the dis-
trict court to rely on testimony by Bayer’s experts concern-
ing post-priority lysine PEGylation used in Baxalta’s
Adynovate®’s manufacture. See Appellants’ Br. 62–63. We
agree that post-priority knowledge about the “reaction con-
ditions” for the accused product cannot support the jury
verdict of enablement. But any error was harmless be-
cause the district court also cited other testimony, includ-
ing Dr. Ravetch’s testimony regarding the depth of
knowledge in the art about protein chemistry and PEGyla-
tion at the time of the invention, J.A. 1563–65
(Tr. 1342:3–1344:1), and Dr. Russell’s testimony concern-
ing the knowledge regarding reaction conditions and pro-
cess steps, among other factors, that determine whether
PEGylation is random or non-random, J.A. 1527–28
(Tr. 1306:23–1307:10). Furthermore, contrary to Baxalta’s
assertion, the specification’s purported “teaching away”
from random PEGylation at amines such as lysines does
not render the asserted claims non-enabled as to non-ran-
dom lysine PEGylation.
For all these reasons, we conclude that the district
court did not err in its legal analysis. In addition, we
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BAYER HEALTHCARE LLC v. BAXALTA INC. 27
cannot say that a reasonable jury could not find the claims
enabled. Accordingly, the district court correctly denied
Baxalta’s motion for JMOL of invalidity for lack of enable-
ment.
V
We next turn to the issue of damages. Baxalta con-
tends that the district court correctly held that Bayer’s
damages expert’s (Dr. Addanki’s) 50-50 split royalty rate
was not properly tied to the facts of the case. According to
Baxalta, however, the district court thereafter committed
several errors. We address each argument in turn.
First, Baxalta argues that the district court errone-
ously permitted Bayer to rely on a flawed and speculative
methodology—namely, asking the jury to pick a rate be-
tween the range of feasible rates presented by Dr. Addanki
as the reasonable rate. We review a district court’s deci-
sion to admit expert testimony for abuse of discretion.
Amgen Inc. v. Hospira, Inc., 944 F.3d 1327, 1341 (Fed. Cir.
2019) (citing Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146
(1997)); see also SmithKline Diagnostics, Inc. v. Helena
Labs. Corp., 926 F.2d 1161, 1164 (Fed. Cir. 1991) (noting
that “subsidiary decisions underlying a damage[s] theory,”
such as “the methodology for arriving at a reasonable roy-
alty,” are reviewed for abuse of discretion (citations omit-
ted)).
The district court properly exercised its discretion in
allowing Bayer to ask the jury to select a rate between the
range presented. While an expert must use reliable meth-
odology for determining the range of possible hypothetical
negotiation royalty rates, we are aware of no precedent
that requires an expert to provide a single proposed royalty
rate. As an initial matter, a jury is “entitled to choose a
damages award within the amounts advocated by the op-
posing parties” and is “not bound to accept a rate proffered
by one party’s expert but rather may choose an intermedi-
ate royalty rate.” Powell v. Home Depot U.S.A., Inc.,
Case: 19-2418 Document: 67 Page: 28 Filed: 03/01/2021
28 BAYER HEALTHCARE LLC v. BAXALTA INC.
663 F.3d 1221, 1241 (Fed. Cir. 2011) (quoting Spectralytics,
Inc. v. Cordis Corp., 649 F.3d 1336, 1347 (Fed. Cir. 2011)).
In addition, we have previously held that a jury’s damages
award that fell within the range suggested by the pa-
tentee’s damages expert was supported by substantial evi-
dence. See Rembrandt Wireless Techs., LP v. Samsung
Elecs. Co., 853 F.3d 1370, 1382 (Fed. Cir. 2017). In grant-
ing-in-part Baxalta’s Daubert motion, the district court de-
termined that Dr. Addanki’s expert report included
“substantial analyses to determine ‘end points of the bar-
gaining range for the hypothetical negotiation,’” including
“deriv[ing] a maximum royalty rate from the incremental
profits Baxalta would expect to earn from Adynovate, and
a minimum royalty rate from the profits Bayer would ex-
pect to lose by granting a license to Baxalta.” Daubert Or-
der, 2019 WL 330149, at *7. Dr. Addanki’s testimony
further demonstrates that he considered and discussed the
appropriate Georgia-Pacific factors at length in determin-
ing the range of reasonable royalties, see J.A. 962–1020,
and Bayer in its closing statement explained to the jury
that its damages award should fall within that range,
J.A. 1728 (Tr. 1507:16–25). Moreover, the district court
permitted Baxalta to cross-examine Dr. Addanki on his end
points and range and to present the testimony of its own
damages expert. Under these circumstances, we conclude
that the district court did not err in allowing the jury to
hear Dr. Addanki’s testimony regarding a range of possible
hypothetical reasonable royalty rates instead of a single
proposed royalty rate.
Second, Baxalta argues that the district court should
have excluded Dr. Addanki’s testimony that the entire
range of rates was reasonable because such a conclusion
was not in his expert report. The district court rejected
Baxalta’s argument that Dr. Addanki presented new opin-
ions at trial in violation of Rules 26(a)(2)(B) and 37(c) of the
Federal Rules of Civil Procedure. Such evidentiary rulings
are also reviewed for an abuse of discretion. See Siemens
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BAYER HEALTHCARE LLC v. BAXALTA INC. 29
Med. Sols. USA, Inc. v. Saint-Gobain Ceramics & Plastics,
Inc., 637 F.3d 1269, 1286–87 (Fed. Cir. 2011). We agree
with the district court that Dr. Addanki’s opinions in his
expert reports are consistent with his trial testimony about
a range of royalty rates and were not limited to the single
rate that the district court had excluded. For instance,
Dr. Addanki had opined in his reply expert report that “as
a matter of economics, any of these royalty rates [between
5.1% and 42.4%] would be a feasible outcome to the negoti-
ation” and the “reasonable royalty is the likely outcome
within that range.” J.A. 21887 (emphasis added). The dis-
trict court exercised its sound discretion in permitting
Dr. Addanki’s testimony. J.A. 233 (Tr. 12:6–10).
Third, Baxalta appears to challenge the jury’s determi-
nation of the amount of damages, which is an issue of fact
that we review for substantial evidence. Amgen, 944 F.3d
at 1341 (citing Lucent Techs., Inc. v. Gateway, Inc.,
580 F.3d 1301, 1310 (Fed. Cir. 2009)). “A jury’s damages
award ‘must be upheld unless the amount is grossly exces-
sive or monstrous, clearly not supported by the evidence,
or based only on speculation or guesswork.’” Id. (quoting
Lucent, 580 F.3d at 1310). We agree with the district court
that substantial evidence supports the jury’s 17.78% roy-
alty rate, which was “within the range encompassed by the
record as a whole.” JMOL Op., 407 F. Supp. 3d at 480
(quoting Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512,
519 (Fed. Cir. 1995)). Dr. Addanki provided ample guid-
ance to the jury to help it determine the royalty rate. E.g.,
J.A. 962–67 (explaining the Georgia-Pacific factors, the
concept of the hypothetical negotiation, and determining
maximum and minimum points in a range), J.A. 967–68,
970–1005, 1008–13 (explaining how he applied the hypo-
thetical negotiation analysis and determined the specific
end points of 5.1% and 42.4% in this case), J.A. 1014–20
(discussing each of the Georgia-Pacific factors and explain-
ing whether and how each one applied in his analysis).
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30 BAYER HEALTHCARE LLC v. BAXALTA INC.
Finally, we note that Baxalta’s criticisms about the
jury’s royalty rate are more appropriate for cross-examina-
tion of the expert. Indeed, Baxalta cross-examined Dr. Ad-
danki about his methodology and presented testimony of
its own damages expert, Dr. Rausser, who opined that a
reasonable-royalty rate would be 1%. J.A. 1485–93
(Tr. 1264:22–1272:14). While Baxalta complains that it
could not cross-examine Dr. Addanki on his prior selection
of a single, mid-point rate, Baxalta still could have—and in
fact did—cross-examine Dr. Addanki on why the upper end
of his proposed range would not result in an absurd rate in
an effort to undermine Dr. Addanki’s credibility. A party
need not present expert testimony on damages or, as a cor-
ollary, on every aspect of damages, such as a single royalty
rate. See Dow Chem. Co. v. Mee Indus., Inc., 341 F.3d 1370,
1382 (Fed. Cir. 2003) (“[S]ection 284 is clear that expert
testimony is not necessary to the award of damages, but
rather ‘may [be] receive[d] . . . as an aid.’” (annotations in
original) (quoting 35 U.S.C. § 284)). A party runs the risk,
however, of loss to its expert’s credibility on cross-examina-
tion if the expert does not identify a single royalty rate. But
“[w]here the methodology is sound and the evidence relied
upon is sufficiently related to the case, disputes over the
expert’s credibility or over the accuracy of the underlying
facts are for the jury.” Summit 6, LLC v. Samsung Elecs.
Co., 802 F.3d 1283, 1299 (Fed. Cir. 2015) (citing i4i Ltd.
P’ship v. Microsoft Corp., 598 F.3d 831, 852 (Fed. Cir.
2010)). Here, Baxalta cross-examined Dr. Addanki and, ul-
timately, the jury evaluated his opinions and adopted a
rate within his proposed range. The district court did not
err in denying Baxalta’s motion for JMOL or a new trial on
damages.
VI
We turn to the final issue raised in Baxalta’s appeal—
whether the district court violated Baxalta’s Seventh
Amendment right to a jury trial by amending its judgment
under Rule 59 to award Bayer pre-verdict supplemental
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BAYER HEALTHCARE LLC v. BAXALTA INC. 31
damages. We disagree with Baxalta that the Seventh
Amendment right to a jury trial attaches to the award of
pre-verdict supplemental damages in this case. We also
conclude that the district court acted within its discretion
in awarding supplemental damages.
This court reviews “the constitutional question of
whether a party is entitled to a jury trial” de novo. TCL
Commc’n Tech. Holdings Ltd. v. Telefonaktiebolaget LM
Ericsson, 943 F.3d 1360, 1371 (Fed. Cir. 2019) (quoting Te-
gal Corp. v. Tokyo Electron Am., Inc., 257 F.3d 1331, 1339
(Fed. Cir. 2001)). The Seventh Amendment provides that,
“[i]n Suits at common law, where the value in controversy
shall exceed twenty dollars, the right of trial by jury shall
be preserved . . . .” U.S. CONST. amend. VII. Under the
Patent Act, “[u]pon finding for the claimant the court shall
award the claimant damages adequate to compensate for
the infringement,” and “[w]hen the damages are not found
by a jury, the court shall assess them.” 35 U.S.C. § 284.
“The methodology of assessing and computing damages un-
der 35 U.S.C. § 284 is within the sound discretion of the
district court.” TWM Mfg. Co. v. Dura Corp., 789 F.2d 895,
898 (Fed. Cir. 1986) (citations omitted).
The jury was asked to calculate the royalty rate, roy-
alty base, and total damages for the time period between
June 14, 2016 through November 30, 2018. The jury ren-
dered its verdict on February 4, 2019, and the district court
entered judgment on February 8, 2019. Bayer thereafter
sought pre-verdict supplemental damages for the period
from December 1, 2018 through February 8, 2019. The dis-
trict court granted Bayer’s motion and determined that
supplemental damages should be based on the actual sales
data for that period—which Baxalta had produced after
trial—and the jury’s 17.78% royalty rate. Rule 59 Op.,
2019 WL 4016235, at *6. The district court rejected Bax-
alta’s contentions that Bayer should have used the pro-
jected sales data Baxalta had produced before trial and
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32 BAYER HEALTHCARE LLC v. BAXALTA INC.
that awarding supplemental damages would violate Bax-
alta’s Seventh Amendment right to a jury trial.
We have on occasion reviewed decisions by district
courts awarding pre-verdict supplemental damages with-
out directly addressing the constitutionality of such
awards. See, e.g., Finjan, Inc. v. Secure Computing Corp.,
626 F.3d 1197 (Fed. Cir. 2010) (addressing a challenge to
the district court’s refusal to award additional supple-
mental damages for post-verdict sales up until the date of
its injunction while noting that pre-verdict supplemental
damages had been awarded); Godo Kaisha IP Bridge 1
v. TCL Commc’n Tech. Holdings Ltd., 967 F.3d 1380, 1382
(Fed. Cir. 2020) (affirming the district court’s grant of pa-
tent owner’s request for “supplemental damages and an ac-
counting of infringing sales of all adjudicated products
through the date of the verdict”). Here, Baxalta contends
that the district court’s award of pre-verdict supplemental
damages “constitutes an impermissible additur.” Appel-
lants’ Br. 82. Baxalta cites Dimick v. Schiedt, 293 U.S. 474(1935), for the proposition that “a court has no power to
consider new facts to award additional damages that are
not part of the verdict, as it would invade the constitutional
right to a trial by jury.” Appellants’ Br. 81–82. In Dimick,
the plaintiff moved the district court for a new trial, argu-
ing that the jury’s damages award was inadequate.
293 U.S. at 475. The district court entered a “conditional
order” for a new trial whereby it would grant the plaintiff’s
request “unless [the defendant] would consent to an in-
crease of the damages to the sum of $1,500.” Id. at 475–76.
The Supreme Court held that this practice of additur vio-
lates the Seventh Amendment. Id. at 486–87.
Calculating pre-verdict supplemental damages in this
case merely required applying the jury’s royalty rate to the
undisputed actual infringing sales base. That royalty rate
was based on a hypothetical negotiation as of the date of
first infringement (June 14, 2016), and was applied by the
jury to the actual infringing sales base from the date of first
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BAYER HEALTHCARE LLC v. BAXALTA INC. 33
infringement through November 30, 2018. Under these
circumstances, we are not persuaded that the district
court’s award constitutes an impermissible additur or an
otherwise “bald addition of something which in no sense
can be said to be included in the verdict.” Id. at 486. Nor
are we convinced that our conclusion conflicts with
WEGCO, Inc. v. Griffin Services, Inc., 19 F. App’x 68, 73–74
(4th Cir. 2001), where the district court’s erroneous supple-
mental damages award was based on its “own findings re-
garding what monies were owed” to the plaintiff and was
“not based on any findings made by the jury.” Similarly
inapposite is Ohio-Sealy Mattress Manufacturing Co.
v. Sealy, Inc., 669 F.2d 490 (7th Cir. 1982), which con-
cerned a plaintiff’s ability to obtain future damages in an
antitrust context, and which was silent as to the Seventh
Amendment.
Moreover, the district court acted within its discretion
in awarding supplemental damages. In the district court’s
view, “it was reasonable for Bayer to limit its damages at
trial to the period for which it had actual sales data.”
Rule 59 Op., 2019 WL 4016235, at *6. The district court
also observed that the “projected sales were substantially
higher than the actual sales” and, thus, Baxalta would
have faced higher damages if Bayer had used projected
sales. Id. Baxalta cites TransPerfect Global, Inc. v. Mo-
tionPoint Corp., No. 10-cv-2590, 2014 WL 6068384(N.D. Cal. Nov. 13, 2014), to support its argument that
“fail[ing] to present the jury with extrapolated damages de-
spite having the opportunity to do so” warrants denying
pre-verdict supplemental damages. Appellants’ Br. 83. In
TransPerfect, the district court denied the patentee’s mo-
tion to amend the judgment to award pre-verdict supple-
mental damages, noting that the patentee “could have
sought to ask the jury to extrapolate post-2012 damages
from the pre-2012 financial records and analysis.”
2014 WL 6068384, at *4. Unlike this case, it was “not even
clear” to the district court “that the jury did not award
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34 BAYER HEALTHCARE LLC v. BAXALTA INC.
damages for the full [pre-verdict] period,” and unlike
Bayer, the patentee had not sought updated financial in-
formation during discovery. Id. Based on the facts of this
case, we conclude that the district court did not abuse its
discretion in awarding pre-verdict supplemental damages.
VII
Lastly, we address Bayer’s challenge in its cross-appeal
of the district court’s judgment as a matter of law that Bax-
alta did not willfully infringe the asserted claims. In
Bayer’s view, it presented sufficient evidence of willfulness
at trial to send the question to the jury. We disagree.
Willful infringement is a question of fact. Polara Eng’g
Inc. v. Campbell Co., 894 F.3d 1339, 1353 (Fed. Cir. 2018).
To establish willfulness, the patentee must show the ac-
cused infringer had a specific intent to infringe at the time
of the challenged conduct. See Halo Elecs., Inc. v. Pulse
Elecs., Inc., 136 S. Ct. 1923, 1933 (2016). As the Supreme
Court stated in Halo, “[t]he sort of conduct warranting en-
hanced damages has been variously described in our cases
as willful, wanton, malicious, bad-faith, deliberate, con-
sciously wrongful, flagrant, or—indeed—characteristic of a
pirate.” Id. at 1932. A patentee needs to show by a pre-
ponderance of the evidence the facts that support a finding
of willfulness. Id. at 1934.
In granting Baxalta’s motion for JMOL of no willful in-
fringement, the district court concluded that Bayer failed
to present sufficient evidence of the “state of mind” neces-
sary for a finding of willfulness. J.A. 1355–56
(Tr. 1134:24–1135:3). According to the district court, there
was no dispute that Baxalta was “aware of the ’520 patent,”
and that Bayer merely “assume[d] that [Baxalta] knew
Adynovate infringed because it involved pegylation at the
B-domain of factor VIII.” Rule 59 Op., 2019 WL 4016235,
at *9. The district court concluded that this was not
“enough for a reasonable jury to find that infringement was
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BAYER HEALTHCARE LLC v. BAXALTA INC. 35
‘either known or so obvious it should have been known.’”
Id. (quoting Halo, 136 S. Ct. at 1930).
On appeal, Bayer identifies evidence that purportedly
satisfies the state of mind requirement for willfulness.
Specifically, Bayer presented testimony of Baxalta and
Nektar witnesses concerning their awareness of the patent
application that issued as the ’520 patent. J.A. 634–38.
Additionally, Bayer presented evidence of Baxalta’s repre-
sentations to the FDA that Adynovate®’s activity was due
to controlled, targeted PEGylation at the B-domain.
J.A. 654–55 (Tr. 433:9–434:25); J.A. 718–20 (Tr. 497:7–
499:5); J.A. 755–60 (Tr. 534:1–539:11); J.A. 774–77
(Tr. 553:12–556:18); J.A. 897–98 (Tr. 676:14–677:17).
Bayer further contends that the jury heard evidence show-
ing that Baxalta’s internal documents described Ady-
novate®’s PEGylation process as controlled and consistent.
J.A. 1238–43 (Tr. 1017:9–1022:21); J.A. 38368–90. Bayer
also presented testimony by Baxalta and Nektar witnesses
that the companies’ initial approach with FVIII conjugates
was random PEGylation, and that they switched to tar-
geted, B-domain PEGylation. J.A. 713–16 (Tr. 492:8–
495:19); J.A. 722–23 (Tr. 501:1–502:13); J.A. 1121–23
(Tr. 900:12–902:19). In Bayer’s view, this evidence shows
that “Baxalta knew from prior dealings that random
pegylation had failed, found out about Bayer’s B-domain
pegylation work that underpins the ’520 patent, and con-
sciously redirected its own research to B-domain pegyla-
tion after learning about Bayer’s invention.” 6 Cross-
Appellant’s Reply 4.
6 As additional support for its willfulness case, Bayer
identifies a poster regarding FVIII PEGylation that Bayer
had purportedly presented to a conference attended by
Baxalta scientists in 2007 and that Baxalta subsequently
circulated internally. The district court initially excluded
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36 BAYER HEALTHCARE LLC v. BAXALTA INC.
Even when accepting Bayer’s evidence as true and
weighing all inferences in Bayer’s favor, we conclude that
the record is insufficient to establish that Baxalta’s “con-
duct rose to the level of wanton, malicious, and bad-faith
behavior required for willful infringement.” SRI Int’l, Inc.
v. Cisco Sys., Inc., 930 F.3d 1295, 1309 (Fed. Cir. 2019).
The evidence adduced at trial merely demonstrates Bax-
alta’s knowledge of the ’520 patent and Baxalta’s direct in-
fringement of the asserted claims. Knowledge of the
asserted patent and evidence of infringement is necessary,
but not sufficient, for a finding of willfulness. Rather, will-
fulness requires deliberate or intentional infringement.
Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc.,
946 F.3d 1367, 1378 (Fed. Cir. 2020).
Accordingly, we conclude that the district court did not
err in granting Baxalta’s motion for JMOL of no willfulness
or denying Bayer’s motion for a new trial.
CONCLUSION
We have considered the parties’ other arguments, but
we do not find them persuasive. For the foregoing reasons,
we affirm the district court’s judgments of infringement,
enablement, damages, pre-verdict supplemental damages,
and no willfulness.
AFFIRMED
this poster on relevance grounds. The district court then
stated that it was “going to keep th[e poster] out for now,”
and that Bayer could “bring it up again in a day or two if
things have changed.” J.A. 536 (Tr. 315:21–23). Bayer did
not, however, raise the issue of the poster’s admissibility
again. On appeal, Bayer does not argue that the district
court abused its discretion in excluding the poster. We do
not consider the poster here.
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BAYER HEALTHCARE LLC v. BAXALTA INC. 37
COSTS
No costs.