Court Questions Applicability of Function Way Result Test In Chemical Cases

by Foley & Lardner LLP
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In Mylan Institutional LLC v. Aurobindo Pharma Ltd., the Federal Circuit reviewed a preliminary injunction based in part on a finding of likelihood of success in establishing infringement under the doctrine of equivalents. Although the district court had applied the “function-way-result” test, the Federal Circuit suggested that the “insubstantial differences” test might be more appropriate for chemical cases. Does the court favor that test because it is more likely to lead to a finding of non-infringement?

The Patents At Issue

The patents raising this issue were Apicore’s U.S. Patent Nos. 7,622,992 and 8,969,616, which are exclusively licensed to Mylan Institutional LLC. The patents relate to processes for making a dye used to map lymph nodes, marketed by Mylan as a generic Lymphazurin® product. The court cited claim 1 of the ‘616 patent as representative:

  1. A process of preparing N-[4-[[4-(diethylamino)phenyl] (2,5-disulfophenyl)methylene]-2,5- cyclohexadien-1-ylidene]-N-ethylethanaminium, sodium salt comprising combining a suspension of isoleuco acid of the formula [X] in a polar solvent with silver oxide, recovering isosulfan blue acid, and treating the isosulfan blue acid with a sodium solution.

The accused method–used to make Aurobindo’s generic Lymphazurin® product–used magnesium oxide instead of silver oxide as an oxidizing agent in the process.

The District Court’s Function Way Result Analysis

In evaluating Mylan’s motion for a preliminary injunction, the district court determined that the use of magnesium oxide instead of silver oxide was likely to infringe under the doctrine of equivalents. According to the Federal Circuit decision, the district court applied the function-way-result test and found that both magnesium oxide and silver oxide function as oxidizing agents and achieve the same result, such that the function-way-result test was satisfied.

On appeal, Aurobindo argued that “manganese dioxide oxidizes isoleuco acid in a different way than silver oxide in that manganese dioxide is a strong oxidizing agent, whereas silver oxide is a weak oxidizing agent,” and emphasized that “manganese dioxide oxidation requires the use of an acid and the patents specifically report the use of silver oxide as not requiring an acid.”

The Federal Circuit Favors The Insubstantial Differences Test

The Federal Circuit decision was authored by Judge Lourie and joined by Judges Moore and Reyna.

The opinion starts with a review of “two frameworks for evaluating equivalence” outlined in the Supreme Court’s Graver Tank decision:

  1. The function-way-result test: “whether the accused product performs ‘substantially the same function in substantially the same way to obtain the same result'”
  2. The insubstantial differences test: “whether the accused product or process is substantially different from what is patented.”

Although the Supreme Court left “to the lower courts in future cases the choice of which to apply,” the Federal Circuit decision here favors the insubstantial differences test for chemical and biotechnological cases:

The Supreme Court was surely correct in stating that non-mechanical cases may not be well-suited to consideration under the FWR test. That seems to be particularly true in the chemical arts.
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How a particular component of a composition, or substituent of a compound, functions in a human or animal body, or in what way, may not be known or even knowable (although, as technology evolves, that may change). And precedent requires that, for infringement under the doctrine of equivalents, each limitation must satisfy an equivalence test. …. The “result” of using a claimed compound may be more easily evaluated, as the structure and uses of one compound may be directly compared with those of another. But, as indicated above, that is not how infringement under FWR is determined.

Turning to the dispute at hand, the Federal Circuit found the district court either had not addressed the “way” prong or had “performed a ‘way’ analysis without considering critical factors under that prong”:

Manganese dioxide and silver oxide may have the same function, but the question is whether they operate in the same way. Critical facts that might be considered in an equivalents analysis include the relative oxidation strengths of the two oxidizing agents, as argued by Aurobindo, and the fact that manganese dioxide requires the use of an acid for oxidation, but silver dioxide does not, and results in a different yield. All of this in fact may at trial indicate a different “way.”

Despite providing this guidance on application of the function-way-result-test, the Federal Circuit encouraged the district court to consider applying the insubstantial differences test on remand, and noted substantial differences between the two oxidizing agents:

For example, manganese and silver are in different groups of the Periodic Table. In oxide form, manganese has an oxidation state of +4, while silver is +1. Those differences may well be relevant to equivalence at trial.

Is The Correct Test The One That Supports Non-Infringement?

The Federal Circuit’s rationale for advocating use of the insubstantial differences test in chemical cases seems to be that the insubstantial differences test may lead to a finding of non-infringement when the function-way-result-test might not. But is that a good reason for choosing which test to apply? Might the context of the invention rather than its chemical nature be relevant to the decision of which test to apply?

The Federal Circuit opinion discusses aspirin and ibuprofen as two chemical compounds that might be found to perform the same function in the same way to achieve the same result, but likely would not be found equivalent under the insubstantial differences test because of significant differences in their chemical structures. Judge Lourie (who has a Ph. D. in chemistry) assumes this analogy shows that “[t]he substantial differences test may be more suitable … for determining equivalence in the chemical arts,” but if the particular analgesic compound being used is not germane to the invention, might not the function-way-result test be more appropriate?

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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