Patent Case Summaries March 21, 2014

Federal Circuit Patent Case Summaries for the Week Ending March 21, 2014

The following is a summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit for the week ending March 21, 2014. Chris Kelly and Ross Barton prepared this edition.


Case Summaries

The Patent Application: Specification: Written Description
The Patent Application: Specification: Enablement Requirement
Infringement: Hatch-Waxman Act
Defenses: Invalidity

Alcon Research Ltd. v. Barr Laboratories, Inc., Nos. 12-1340, -1341 (Fed. Cir. (D. Del.) Mar. 18, 2014). Opinion by Lourie, joined by Newman and Bryson.

In affirming the district court’s finding of noninfringement, the Federal Circuit concluded that the compositional differences between a defendant’s generic Abbreviated New Drug Application (“ANDA”) product and products tested in evidence proffered by the plaintiff precluded the reliable inferences necessary to prove infringement.

Barr Laboratories, Inc. (“Barr”) submitted an ANDA to the U.S. Food and Drug Administration (“FDA”) seeking approval of a generic version of Travatan Z®, a glaucoma and ocular hypertension drug marketed and sold by Alcon Research Ltd. (“Alcon”). Barr’s ANDA prompted Alcon to file suit for infringement of U.S. Patent Nos. 5,631,287 (“the ’287 patent”) and 6,011,062 (“the ’062 patent”). Even though neither the ’287 patent nor the ’062 patent was listed in the FDA’s Orange Book, the patents are directed to methods for enhancing the stability of prostaglandin compositions, such as Travatan Z®, and both patents require the step of “adding a chemically-stabilizing amount of polyethoxylated castor oil [(“PECO”)] to the composition.”

At trial, the U.S. District Court for the District of Delaware found that Barr’s ANDA product did not infringe the asserted claims of the ’287 patent or the ’062 patent because Alcon failed to prove that Barr manufactured its generic product by a method including the addition of a chemically-stabilizing amount of PECO. The district court noted that Alcon did not test Barr’s product and, instead, submitted evidence of an accelerated stability study that compared several travoprost compositions with different amounts of PECO. The district court also agreed with Barr that the asserted claims in Alcon’s ’287 patent and ’062 patent were invalid under 35 U.S.C. § 112 for lack of enablement and lack of adequate written description.

On appeal, the Federal Circuit affirmed the district court’s determination that Alcon failed to prove infringement. The Appeals Court emphasized that the parties did not dispute that the composition of Barr’s ANDA product was significantly different from the compositions tested in Alcon’s study and that Alcon admitted that variation of parameters, including pH, preservatives, and buffers, could have a substantial impact on the stability of prostaglandin in ophthalmic formulations. Accordingly, the Federal Circuit concluded that the formulations tested in Alcon’s stability study were meaningfully different and that the study provided no basis from which to draw any reliable inferences regarding whether the PECO in Barr’s composition would chemically stabilize the prostaglandin.

With respect to enablement, the Federal Circuit noted that Barr did not present any evidence that changing the variables encompassed by the claims would render Alcon’s claimed invention inoperable. Summarizing the deficiencies of Barr’s position, the Appeals Court noted that “[a]djusting variables may be relevant to optimizing the stability of a given prostaglandin composition, but Barr proffered no evidence that any experimentation, let alone undue experimentation, with those variables would be necessary to practice the claimed invention.” Without that evidence, the Federal Circuit concluded that there was no foundation for the district court’s nonenablement ruling. Despite Barr’s arguments that the claims encompassed an “endless number of combinations and concentrations,” the Federal Circuit also reversed the district court’s finding of lack of written description, holding that the ’287 patent and the ’062 patent sufficiently demonstrated the inventors’ possession of the claimed invention. The Federal Circuit thus affirmed the finding of noninfringement, and reversed the district court’s finding of invalidity. 

http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1340.Opinion.3-12-2014.1.PDF  
__________________________________________________________________________________

Character of a Patent: Attributes of Ownership: Generally
Remedies: Injunctions: Contempt
Relationship to Other Intellectual Property: Generally

Energy Recovery, Inc. v. Hauge, et al., No. 13-1515 (Fed. Cir. (E.D. Va.) Mar. 20, 2014). Opinion by Wallach, joined by Rader and Reyna.

In vacating the district court’s grant of an injunction, the Federal Circuit concluded that the manufacture of pressure exchanger machines did not violate a prior settlement agreement and district court order requiring the transfer of all “intellectual property and other rights relating to pressure exchanger technology.” Noting that relief under patent laws or state trade secret laws may nevertheless be available, the Federal Circuit determined that the manufacture of the machines themselves did not amount to a failure to transfer ownership of any intellectual property or other rights relating to the technology.

In 2001, Energy Recovery, Inc. (“ERI”) and Mr. Leif J. Hauge entered into a settlement agreement resolving a dispute over the ownership of intellectual property rights relating to pressure exchangers used for energy recovery during reverse osmosis. Adopting the settlement agreement, the U.S. District Court for the Eastern District of Virginia issued an order stating that ERI was to be the sole owner of certain patents listing Mr. Hauge as their sole inventor, as well as a pending application that later issued as a patent. In addition, the agreement and district court order obligated Mr. Hauge to transfer ownership of “all other intellectual property and other rights relating to pressure exchanger technology” pre-dating the agreement and the order.

In 2004, Mr. Hauge filed a new provisional application directed to a pressure exchanger, which was then followed by a nonprovisional application that would issue as U.S. Patent No. 7,306,437 (“the ’437 patent”). After ERI declined to get involved with the new technology, Mr. Hauge formed a new company—Isobaric Strategies, Inc. (“Isobarix”)—which in 2009 began selling a pressure exchanger called “XPR” based on the concepts in the ’437 patent. In 2012, ERI filed a motion for order to show cause alleging that Mr. Hauge’s use of ERI’s proprietary technology in the manufacture of the XPR machine was in violation of the district court’s 2001 Order.

Agreeing with ERI, the district court entered a contempt order in 2013 finding that allowing Mr. Hauge to “develop new products using the very technology he assigned to ERI solely because those new inventions post-date the Agreement would render the Settlement Agreement and its assignment of ownership rights useless.” Concluding that Mr. Hauge had “violated the letter and spirit of the . . . Agreement,” the district court found Mr. Hauge to be in violation of the 2001 Order and enjoined him and Isobarix from manufacturing or selling pressure exchangers.

Reviewing the district court’s decision for abuse of discretion, the Federal Circuit reversed the court’s finding of contempt and vacated the injunction. As the disputed portion of the agreement “only required Mr. Hauge to transfer ownership of the pre-Agreement pressure exchanger intellectual property rights,” the Federal Circuit held that “[n]othing in the 2001 Order expressly preclude[d] Mr. Hauge from using any manufacturing process.” Emphasizing that Mr. Hauge was not claiming ownership of ERI’s patents, trade secrets, or any other intellectual property, the court noted that “if in fact Mr. Hauge is using ERI’s manufacturing processes, he may be in violation of the patent laws or state trade secret laws, but he is not in violation of any ‘unequivocal command’ in the 2001 Order.” The Federal Circuit thus reversed the district court’s finding of contempt and vacated the resulting injunction. 

http://www.cafc.uscourts.gov/images/stories/opinions-orders/13-1515.Opinion.3-18-2014.1.PDF

________________________________________

Additional Notices
Alston & Bird's Federal Circuit Patent Case Summaries are intended to be informational and do not constitute legal advice or opinions regarding any specific situation. The material may also be considered advertising under certain rules of professional conduct or other law. This publication may be reprinted without the express permission of Alston & Bird as long as it is reprinted in its entirety including the copyright notice, ©2014.

Media Contact
Alex Wolfe
Communications Director
Phone: 212.210.9442

This website uses cookies to improve functionality and performance. For more information, see our Privacy Statement. Additional details for California consumers can be found here.