Stipulating to infringement after a contrary claim construction is a conventional stratagem for a losing party to have a final judgment that can be challenged before the Federal Circuit.  The risk of course, is that if the Court finds the district court's construction to be correct, the stipulation precludes appellate challenge of the infringement judgment.  Defendant Maia Pharmaceuticals suffered those consequences recently in Bracco Diagnostics Inc. v. Maia Pharmaceuticals, Inc.

The case arose as ANDA litigation over Maia's generic sincalide product, that Bracco asserted infringed Orange Book-listed U.S. Patent No. 6,803,046 concerning its Kinevac® product.  This product is a synthetic peptide hormone used to stimulate gallbladder contraction, pancreatic secretion, and "accelerate the transit of a barium meal through the small bowel."  The '046 claims encompass drug formulations "purer than prior art formulations, and have fewer degradants and more consistent potency" than prior art forms, achieved according to the specification "through addition of excipients such as buffers, surfactants/solubilizers, and surfactants."  Claim 1 is representative of the asserted claims:

1.  A stabilized, physiologically acceptable formulation of sincalide comprising:
    (a) an effective amount of sincalide,
    (b) at least one stabilizer,
    (c) a surfactant/solubilizer,
    (d) a chelator,
    (e) a bulking agent/tonicity adjuster, and
    (f) a buffer.

[Wherein the italicized limitations were relevant to the District Court's claim construction and this appeal.]

Maia's products contain amino acids in addition to the synthetic peptide hormone, which Bracco contended satisfy the "buffer," "surfactant" and/or "solubilizer" limitations recited in the claims.  The issue thus resolved as whether these claim limitations encompassed amino acids.  One aspect of the District Court's construction was that dependent claims recited Markush groups for these limitations that contained amino acids for each.  Another aspect was that the specification recited particular definitions of these terms that encompassed amino acids within their scope.  These characteristics of the specification formed the basis for the District Court's construction of the terms "buffer," "surfactant," and "solubilizer" to include amino acids (among in each instance many other species).  Following claim construction, Maia stipulated infringement of certain claims and dismissal of all other claims and defenses without prejudice, and the District Court entered judgment against defendant; this appeal followed.

The Federal Circuit affirmed in an opinion by Judge Lourie, joined by Judges Clevenger and Chen.  The issue for the panel was whether the District Court erred in including amino acids within the generically claimed limitations for buffers, solubilizer, and surfactants, concluding that it had not.  (The panel also reviewed and affirmed how the District Court construed "the backslash between surfactant/solubilizer to mean "and" or "or," and erroneously included "may" in its definition of surfactant.)

The Court started, consistent with Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), with the language of the claims.  The opinion notes that the use of Markush language in the dependent claims removes the responsibility (or the option) for construction by the Court, due to the closed nature of this claim form (a cautionary tale with regard to using Markush claims).  With regard to the term "buffer" in the independent claims, the Court rejected Maia's contention that the claim should be construed with regard to its function in the claimed formulation, and that the District Court had improperly imported limitations from the specification into the claims (a perennial problem in claim construction (see "Claim Construction at the Federal Circuit: A District Court Judge's View").  Maia supported this argument, ultimately to no avail, on the grounds that many amino acids have no buffering capacity, and that to the extent an amino acid comprising its sincalide formulation is not a buffer its infringement stipulation should not preclude its ability to litigate infringement (i.e., it should not be construed as an admission).  The Federal Circuit agreed that the District Court's construction was technically in error regarding the difference in various amino acids in buffering capacity, but also agreed with Bracco that the error was harmless.  And with regard to whether the stipulation should be given effect as an admission of infringement, the panel was clear:

The key language of its stipulation reads as follows: "Under the Court's construction of the disputed claim terms of the '046 patent, . . . Maia's 505(b)(2) NDA Product would literally infringe the 36 claims. ". . . That stipulation forecloses the argument for noninfringement.

To rule otherwise, according to the opinion, would be to "reinterpret the [district] court's construction to mean" what Maia now contends it should have meant (which of course the Federal Circuit refused to do).  The panel similarly refused Maia's other arguments (claim inoperability for inoperativeness), and affirmed without recourse to remand, citing SUFI Network Servs., inc. v. United States, 755 F.3d 1305, 1312 (Fed. Cir. 2014), and Shinyei Corp. of Am. v. United States, 524 F.3d 1274, 1284 n.3 (Fed. Cir. 2008).

Maia made substantially the same arguments with regard to the surfactant/solubilizer limitation(s), with the same effect on the Federal Circuit.  Once again, the panel considered the District Court erred in its claim construction, but held that the error was harmless because "inclusion of the list of exemplary surfactant/solubilizer agents, while technically incorrect, is essentially correct in its functional definition." And once again:

When Maia stipulated to infringement under the court's claim construction, it stipulated to infringing every limitation of the claims, not just to having amino acids. Having entered into a stipulation, Maia is bound by it [emphasis in opinion].

Regarding the District Court's consideration of the "/" between surfactant and solubilizer to mean "and" or "or" rather than that surfactants falling within the scope of the claims were also solubilizers, the panel agreed with Bracco's argument that this was an attempt to improperly read a limitation from the specification into the claims.  (To be fair, the patentee's repeated use of "/" in the specification for species having both surfactant and solubilizer properties could just as readily been seen to be construing the claims in light of the specification and how this convention was used by the patentee.)  But to the panel the use of "/" in the specification was "ambiguous" and other claim language could be construed to describe sincalide formulations not to have surfactants at all.

Regarding construction of the term "surfactant," Maia argued error for including "an excipient that may reduce the interfacial tension" (emphasis in opinion), and argued that the District Court should have used the plain and ordinary meaning of the term, wherein the compound "must" reduce interfacial tension.  Maia also cited portions of the specification supporting (in its view) this construction.  The panel expressly rejected Maia's argument that "may" rendered the term ambiguous, saying "'may,' standing alone, presents some ambiguity.  However, the plain and ordinary meaning of "may" within the context of this specification is properly understood as indicating an inherent measure of likelihood or possibility.  It is not used by a person of skill to describe an event that has no likelihood of occurring."  In addition, the Federal Circuit expressly rejected Maia's argument that the specification requires that a surfactant "must" reduce interfacial tension, saying "none of Maia's references indicates that the patentee intended to limit the claim scope in the manner that it asserts" and "[w]e have repeatedly 'cautioned against limiting the claimed invention to preferred embodiments or specific examples in the specification,' where, like here, the patentee has not made a clear disavowal of the claim scope," citing Imaginal Systematic, LLC v. Leggett & Platt, Inc., 805 F.3d 1102, 1109–10 (Fed. Cir. 2015).  Finally, the opinion states that the District Court's construction was supported by extrinsic evidence (expert testimony), which can properly be used to support a construction consistent with the intrinsic evidence.

Bracco Diagnostics Inc. v. Maia Pharmaceuticals, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Clevenger, and Chen
Opinion by Circuit Judge Lourie