Claim construction in patent cases, and the propensity for the Federal Circuit to disagree with a district court's conclusions regarding the scope and meaning of claim terms, remains one of the most vexing aspects of patent litigation (yes, even more so than the vaunted "troll" problem; and if you think the Supreme Court will improve the situation in deciding Teva Pharmaceuticals v. Sandoz, you haven't been paying attention). The problems with the current jurisprudential situation regarding claim construction are nicely illustrated by the Court's decision in Shire Development, LLC v. Watson Pharmaceuticals, Inc., which doesn't appear to be anything more than an exercise in exegesis with little seeming relevance to the ultimate question of whether Watson's generic drug does or does not infringe Shire's claims.
The lawsuit involved Watson's ANDA filing seeking approval for a generic version of Shire's controlled-release oral pharmaceutical composition for the treatment of inflammatory bowel disease, Crohn's disease and ulcerative colitis, sold by Shire under the brand name LIALDA®. Shire listed U.S. Patent No. 6,773,720 in the Orange Book having claims for is patented formulations of the active pharmaceutical ingredient mesalamine (5-amino salicylic acid). These formulations were characterized as having high concentrations (85-90% by weight) of the API. The formulations contain an "inner hydrophobic matrix" and an "outer hydrophilic matrix," as used in the following representative claims of the '720 patent:
1. Controlled-release oral pharmaceutical compositions containing as an active ingredient 5- amino-salicylic acid, comprising:
a) an inner lipophilic matrix consisting of sub- stances selected from the group consisting of unsaturated and/or hydrogenated fatty acid, salts, esters or amides thereof, fatty acid mono-, di- or triglycerid[e]s, waxes, ceramides, and cholesterol derivatives with melting points below 90° C., and wherein the active ingredient is dispersed both in said the lipophilic matrix and in the hydrophilic matrix;
b) an outer hydrophilic matrix wherein the lipophilic matrix is dispersed, and said outer hydrophilic matrix consists of compounds selected from the group consisting of polymers or copolymers of acrylic or methacrylic acid, alkylvinyl polymers, hydroxyalkyl celluloses, carboxyalkyl celluloses, polysaccharides, dextrins, pectins, starches and derivatives, alginic acid, and natural or synthetic gums;
c) optionally other excipients;
wherein the active ingredient is present in an amount of 80 to 95% by weight of the total composition, and wherein the active ingredient is dispersed both in the lipophilic matrix and in the hydrophilic matrix.
The claimed formulations provide the "sustained and uniform manner" by which the mesalamine API is released as the drug passes through the gut.
The District Court construed the term ""inner hydrophobic matrix" to mean "a matrix including at least one lipophilic excipient, where the matrix is located within one or more substances," and construed "outer hydrophilic matrix" to mean "a matrix of at least one hydrophilic excipient, where the matrix is located outside the inner lipophilic matrix."
The Federal Circuit disagreed, in an opinion by Judge Hughes joined by Chief Judge Rader and Judge Prost. The Court held that these constructions did not comport with the "ordinary and customary" meanings of the claim terms (which, while each word in each phrase may have such a meaning as used in the claim each phrase would seem to have a particular meaning as defined by the specification) because these constructions were "impermissibly broad." Specifically, the panel held that the District Court had properly construed the term "matrix" in each instance as "a macroscopically homogeneous structure in all its volume." The panel's disagreement with the lower court's construction was prompted by its construction of a "lipophilic matrix" as "a matrix that includes at least one lipophilic excipient." According to the Court, this was error because "[it] erroneously focuses on the lipophilic properties of an excipient in the matrix, rather than the properties of the matrix itself." The intrinsic evidence in the Court's view mandates a construction wherein lipophilicity (or, for that matter the hydrophilicity) is a characteristic of the matrix, not the excipient in the matrix. The opinion finds support for these distinctions in the specification.
The Court also reviewed the District Court's rejection of Watson's contention that the two matrices must be "separate and distinct." At trial, Watson had argued that the claims should be limited to matrices that were separate and distinct due to prosecution disclaimer, i.e., as a consequence of arguments advanced during prosecution to overcome inter alia claim rejections based on certain cited prior art. The grounds for the District Court's decision not to construe Shire's claims to be encumbered by this limitation was that "no where in the prosecution history, claims, or specification does the term 'separate and distinct' appear," and that the nature of patent prosecution limits a conclusion that there was prosecution disclaimer to instances where there is "a clear and unambiguous disavowal" of the disputed claims scope. The Federal Circuit agreed in an interesting display of semantics: according to the opinion, "[d]uring prosecution, Shire carefully characterized the prior art as not having separate matrices but never actually stated that the claimed invention does have separate matrices" (emphasis in opinion). Nevertheless, this same prosecution history, as well as "the structure of the claim itself, the ordinary meaning of the claim terms, including the Markush group limitations, and the patent's description of the invention compel a claim construction which requires that the inner lipophilic matrix is separate from the outer hydrophilic matrix" (and the opinion notes that the "separateness" of the two matrices was admitted by Shire's counsel at oral argument). Apparently wishing there to be no doubt on remand by the District Court on this point, the opinion further notes that a matrix cannot be both "inner" and "outer" nor "lipophilic" and "hydrophilic" and thus the matrices must under a "logical reading" be separate. It is here that a possible basis for the panel's dissatisfaction with the District Court's construction becomes evident, the opinion stating that "a matrix comprised of only one lipophilic substance and several hydrophilic substances -- and thus capable of exhibiting hydrophilic properties -- would meet the District Court's construction of "lipophilic matrix" which would be contrary to the requirement that the matrices be separate.
Accordingly, with these instructions the panel reversed the judgment below of infringement and remanded the case back to the District Court for trial on the merits using the panel's claim construction. There is no evidence in the record whether any of the distinctions drawn by the Federal Circuit in its opinion can be expected to (or even capable of) changing the District Court's determination of infringement on remand.
Shire Development, LLC v. Watson Pharmaceuticals, Inc. (Fed. Cir. 2014)
Panel: Chief Judge Rader and Circuit JudgesProst and Hughes
Opinion by Circuit Judhe Hughes