ASTRAZENECA LP v. Apotex, Inc.

United States Court of Appeals
for the Federal Circuit
__________________________

ASTRAZENECA LP
AND ASTRAZENECA AB,
Plaintiffs-Cross Appellants,
v.
APOTEX, INC.
AND APOTEX CORP.,
Defendants-Appellants.
__________________________

2009-1381, -1424
__________________________

Appeal from the United States District Court for the
District of New Jersey in case no. 09-CV-1518, Judge
Renee Marie Bumb.
__________________________

Decided: November 1, 2010
__________________________

DENISE L. LORING, Ropes & Gray LLP, of New York,
New York, argued for plaintiffs-appellees. With her on
the brief were CHRISTOPHER J. HARNETT, PABLO D.
HENDLER and DEREK M. KATO.

RICHARD J. BASILE, St. Onge Steward Johnston &
Reens LLC, of Stamford, Connecticut, argued for defen-
dants-appellants. With him on the brief were DAVID W.
ALDRICH and ROY D. GROSS. Of counsel on the brief was
ASTRAZENECA LP v. APOTEX 2

SHASHANK UPADHYE, Intellectual Property Law Apotex,
Inc., of Toronto, Ontario, Canada.

WILLIAM A. RAKOCZY, Rackoczy Molino Mazzochi Si-
wik LLP, of Chicago, Illinois, for amicus curiae Breath
Limited. With him on the brief were DEANNE M.
MAZZOCHI and AMY D. BRODY.

RICHARD T. RUZICH, Duane Morris LLP, of Chicago,
Illinois, for amicus curiae Xttrium Laboratories, Inc.
With him on the brief were JOSEPH M. BENNETT-PARIS, of
Atlanta, Georgia; ANTHONY J. FITZPATRICK and
CHRISTOPHER S. KROON, of Boston, Massachusetts;
MATTHEW C. MOUSLEY, of Philadelphia, Pennsylvania;
and KERRY B. MCTIGUE, of Washington, DC.
__________________________

Before RADER, Chief Judge, * BRYSON and LINN, Circuit
Judges.
Opinion for the court filed by Circuit Judge LINN.
Opinion concurring-in-part and dissenting-in-part filed by
Circuit Judge BRYSON.
LINN, Circuit Judge.
Apotex, Inc. and Apotex Corp. (collectively “Apotex”)
appeal from the grant by the United States District Court
for the District of New Jersey of a preliminary injunction
barring Apotex from launching a generic version of a
budesonide drug made and distributed under the ap-
proval of the United States Food and Drug Administra-
tion (“FDA”) by AstraZeneca LP and AstraZeneca AB
(collectively “AstraZeneca”) and covered under method

* Randall R. Rader assumed the position of
Chief Judge on June 1, 2010.
3 ASTRAZENECA LP v. APOTEX

and kit claims in AstraZeneca’s U.S. Patents No.
6,598,603 (“the ’603 Patent”) and No. 6,899,099 (“the ’099
Patent”). AstraZeneca cross-appeals the district court’s
ruling that the asserted kit claims in both patents are
invalid. Because the district court did not abuse its
discretion by granting the preliminary injunction and did
not err in determining that the kit claims are invalid, this
court affirms.
BACKGROUND
I. The Drug Approval Process
In part, this appeal concerns the procedures for ob-
taining permission to sell either a “new” or generic drug
under the Federal Food, Drug, and Cosmetic Act, ch. 675,
52 Stat. 1040 (1938) (codified as amended in scattered
sections of 21 U.S.C.). Under the Act, the FDA must
approve all new drugs before such drugs may be distrib-
uted in interstate commerce. 21 U.S.C. § 355(a). To
obtain approval for a new drug, an applicant may file a
New Drug Application (“NDA”) that includes examples of
the proposed label for the drug and clinical data demon-
strating that the drug is safe and effective for use. Id.
§ 355(b)(1)(A), (b)(1)(F). The NDA must contain the
patent number and expiration date of any patent that
claims either the drug or a method of using the drug if “a
claim of patent infringement could reasonably be as-
serted.” Id. § 355(b)(1). The FDA publishes the names of
approved drugs and their associated patent information
in the Approved Drug Products with Therapeutic Equiva-
lence Evaluations list, commonly referred to as the “Or-
ange Book.”
An applicant seeking approval to market a generic
version of a drug may file either an Abbreviated New
Drug Application (“ANDA”) or a “505(b)(2) application,”
which is also known as a “paper NDA.” Id. § 355(b)(2), (j).
ASTRAZENECA LP v. APOTEX 4

An ANDA allows an applicant to rely on the safety and
efficacy information for the listed drug if the applicant
can show that the generic drug is “bioequivalent” to the
listed drug.
An ANDA has three requirements that are particu-
larly relevant here. First, the applicant must demon-
strate that “the route of administration, the dosage form,
and the strength of the new drug are the same as those of
the listed drug,” unless the FDA has approved a “suitabil-
ity petition” requesting permission to file an ANDA that
differs from the listed drug in one or more of these re-
spects. Id. § 355(j)(2)(A)(iii), (j)(2)(C). Second, subject to
changes required by FDA regulations or a successful
suitability petition, the applicant must also show that
“the labeling proposed for the new drug is the same as the
labeling approved for the listed drug.” Id.
§ 355(j)(2)(A)(v). Third, for each patent listed in the
Orange Book that claims either the listed drug or a use of
the listed drug for which the applicant is requesting
approval, an ANDA must include either one of four certi-
fications or a “section viii statement.”
If an applicant chooses to submit a certification, the
applicant must certify “(I) that . . . patent information has
not been filed, (II) that such patent has expired, (III) . . .
the date on which such patent will expire, or (IV) that
such patent is invalid or will not be infringed by the
manufacture, use, or sale of the new drug.” Id.
§ 355(j)(2)(A)(vii)(I)-(IV). These certifications are referred
to as Paragraph I, II, III, and IV certifications, respec-
tively.
Assuming all regulatory requirements are satisfied,
the FDA may immediately make effective the approval of
an ANDA that includes either a Paragraph I or II certifi-
cation. Id. § 355(j)(5)(B)(i). By contrast, the filing of a
5 ASTRAZENECA LP v. APOTEX

Paragraph III or IV certification may delay the effective
date of an ANDA approval, and, in the case of a Para-
graph IV certification, invite a patent infringement suit.
See 35 U.S.C. § 271(e)(2), 21 U.S.C. § 355(j)(5)(B)(ii)-(iii).
If, however, an applicant is seeking approval for a
method of use not claimed in a “method of use patent”
associated with the listed drug, the applicant must submit
a section viii statement declaring that the patent does not
claim such a use. 21 U.S.C. § 355(j)(2)(A)(viii). The
applicant must also remove or “carve out” any mention of
the patented method of use from the proposed label for
the generic drug. See 21 C.F.R. § 314.92(a)(1); Novo
Nordisk A/S v. Caraco Pharm. Labs., Ltd., 601 F.3d 1359,
1361 (Fed. Cir. 2010) (“Along with the section viii state-
ment, the generic manufacturer must submit a proposed
label to the FDA that does not contain the patented
method of using the listed drug.”). Unlike a Paragraph III
or IV certification, the filing of a section viii statement
will not by itself delay approval of an ANDA.
Finally, in contrast to an ANDA, a paper NDA must
include safety and effectiveness data. 21 U.S.C.
§ 355(b)(2). However, a paper NDA may rely on safety
and effectiveness data not developed by the applicant. Id.
As with an ANDA, a paper NDA requires the applicant to
submit either a patent certification or a statement declar-
ing that the patent does not claim the method of use for
which the applicant is seeking approval. Id.
§ 355(b)(2)(A)-(B).
II. AstraZeneca’s Budesonide Drug and Patents
In 2000, the FDA approved AstraZeneca’s NDA for a
budesonide inhalation suspension that AstraZeneca now
markets under the name “PULMICORT RESPULES®.”
Each “respule” is a plastic vial containing a single dose of
budesonide, an anti-inflammatory corticosteroid, sus-
ASTRAZENECA LP v. APOTEX 6

pended in a sterile liquid. The drug is administered by
squeezing the entire contents of a vial into a jet nebulizer
and inhaling the resulting mist through a mask attached
to the nebulizer.
The Orange Book entry for AstraZeneca’s budesonide
product includes the ’099 Patent and its parent, the ’603
Patent. Both patents are owned by AstraZeneca and have
specifications that are nearly identical in all relevant
respects. The patents explain that “[t]he invention pro-
vides a new method of treating respiratory diseases such
as asthma that involves administering a budesonide
composition with a nebulizer not more than once per day.”
’603 Patent col.1 ll.20-23; ’099 Patent col.1 ll.26-29. “The
invention also features a kit for treating respiratory
diseases, the kit including a budesonide composition in a
sealed container . . . and a label indicating administration
by nebulization in a continuing regimen at a frequency of
not more than once per day.” ’603 Patent col.2 ll.1-6; ’099
Patent col.2 ll.7-12. Both patents include method claims
directed to administering a budesonide composition once
daily and product claims directed to the described kit
containing either a budesonide composition or suspension
and a label indicating once-daily administration by nebu-
lization.
While AstraZeneca’s patents are directed to once-daily
treatment, the label that accompanies AstraZeneca’s
budesonide product indicates that the drug may be ad-
ministered once or twice daily. The label states that the
drug is available in three strengths—0.25 mg, 0.5 mg, and
1.0 mg per 2 mL vial—and provides a table of recom-
mended starting doses based on a patient’s history of
therapy. The label repeatedly warns that patients should
“titrate down” to the lowest effective dose of the medica-
tion to avoid any adverse effects from excessive use of the
medication. For example, in its DOSAGE AND
7 ASTRAZENECA LP v. APOTEX

ADMINISTRATION section, the label states that “[i]n all
patients, it is desirable to downward-titrate to the lowest
effective dose once asthma stability is achieved” and
“[o]nce the desired clinical effect is achieved, considera-
tion should be given to tapering to the lowest effective
dose.” The PRECAUTIONS section also warns that
“suppression of HPA function may be associated . . . when
the dose is not titrated to the lowest effective dose” and
“[t]o minimize the systemic effects of orally inhaled corti-
costeroids . . . each patient should be titrated to his/her
lowest effective dose.” It is undisputed that the FDA
requires all manufacturers of inhaled corticosteroids such
as budesonide to include this downward titration lan-
guage in the labels of their inhaled corticosteroid prod-
ucts.
III. Apotex’s ANDA
Apotex submitted an ANDA seeking FDA approval to
manufacture and sell a generic version of budesonide for
twice-daily use, a use not claimed in either the ’603 or
’099 patents. The ANDA included a proposed label for the
generic drug that, with certain exceptions, is identical to
the label included with AstraZeneca’s budesonide product.
Specifically, in its label, Apotex replaced the
“PULMICORT RESPULES®” brand name on Astra-
Zeneca’s product with the generic name “budesonide
inhalation suspension.” Apotex also submitted a section
viii statement asserting that it was not seeking approval
for the once-daily method of use claimed in the ’603 and
’099 patents and that its proposed generic label would
contain no explicit mention of once-daily administration.
However, the proposed label retained the FDA-mandated
downward-titration language found in AstraZeneca’s
PULMICORT RESPULES® product label. Apotex further
represented that the proposed label would indicate that
the generic drug is available in only two strengths: 0.25
ASTRAZENECA LP v. APOTEX 8

mg and 0.5 mg per 2 mL vial. The FDA approved Apo-
tex’s ANDA on March 30, 2009.
IV. Proceedings Before the District Court
On March 31, 2009, the day after Apotex’s ANDA was
approved, AstraZeneca initiated the declaratory judgment
action underlying this appeal and moved for a prelimi-
nary injunction barring Apotex from distributing its
generic budesonide drug. In that action, AstraZeneca
argued that Apotex would directly infringe certain kit
claims in both patents (claims 29 and 30 of the ’603 Pat-
ent and claims 17, 18, 20, 21, and 24-27 of the ’099 Pat-
ent) and would induce infringement of specified method
claims in the ’603 Patent (claims 1-3, 6-8, 11-18, and 21-
28) by including the downward-titration statements in the
proposed label. AstraZeneca asserted that the downward-
titration statements effectively instructed consumers to
use the drug once daily. Claims 1 and 29, respectively,
are representative of the asserted method and kit claims
in the ’603 Patent:
1. A method of treating a patient suffering from a
respiratory disease, the method comprising ad-
ministering to the patient a nebulized dose of a
budesonide composition in a continuing regimen
at a frequency of not more than once per day.

’603 Patent col.10 ll.18-22.

29. A kit for treating respiratory diseases, the kit
comprising (a) a budesonide composition in a
sealed container, the composition containing 0.05
mg to 15 mg budesonide and a solvent, and (b) a
label indicating administration by nebulization in
a continuing regimen at a frequency of not more
than once per day.
9 ASTRAZENECA LP v. APOTEX

Id. col.12 ll.3-8.

Claim 17 is representative of the asserted kit claims in
the ’099 Patent:
17. A kit for treating a respiratory disease, the kit
comprising (a) a budesonide suspension in a
sealed container, the suspension containing 0.05
mg to 15 mg budesonide and a solvent, and (b) a
label indicating administration by nebulization in
a continuing regimen at a frequency of not more
than once per day.

’099 Patent col.11 ll.9-14.

The court held a five-day hearing on AstraZeneca’s
request for a preliminary injunction. At the hearing,
Apotex argued that U.S. Patent No. 5,192,528 (“the ’528
Patent”) anticipates all but three of the asserted method
claims (claims 12, 14, and 16). Apotex also argued that a
1994 advertisement for AstraZeneca’s PULMICORT
RESPULES® drug in the British medical journal Thorax
(“the Thorax advertisement”) anticipates each of the
asserted method claims. Apotex contended that the
asserted kit claims of both patents were invalid because
the claimed budesonide composition and suspension were
known in the prior art and the recited label could not
render a known product patentable.
Apotex further argued that it would not induce in-
fringement of the asserted method claims. Apotex con-
tended that the proposed label would not lead consumers
to directly infringe the claims because the downward-
titration statements included in the label did not instruct
users to take the generic drug once daily. In support of
this argument, Apotex pointed out that the FDA had
previously issued a letter agreeing that the downward-
ASTRAZENECA LP v. APOTEX 10

titration language did not “teach” once-daily usage and
was not protected by the ’603 and ’099 patents. Apotex
also contended that it lacked the requisite specific intent
to induce infringement because it was the FDA that had
required Apotex to include the downward-titration state-
ments in the label. Moreover, because the generic drug
allegedly has substantial noninfringing uses (e.g., twice-
daily administration to treat asthma), Apotex argued that
the district court could not infer that Apotex intended to
induce infringement.
In the first of two opinions, the district court agreed
that Apotex had shown a likelihood of success in its
contention that all of the asserted kit claims were invalid,
concluding that the “addition of the instruction does not
functionally alter the known product so as to create a new
patentable product.” AstraZeneca LP v. Apotex, Inc.
(“Opinion”), 623 F. Supp. 2d 579, 591 (D.N.J. 2009). With
respect to the asserted method claims, the court deter-
mined that under its construction of the term “budesonide
composition” Apotex had not shown the asserted method
claims likely to be anticipated by the ’528 Patent. Id. at
595. The court likewise was not convinced that the Tho-
rax advertisement anticipated these claims, finding
persuasive evidence that one of ordinary skill in the art at
the time of the invention would not have understood the
advertisement to instruct once-daily usage of Astra-
Zeneca’s PULMICORT RESPULES® drug. Id. at 596.
Regarding inducement, the district court concluded
that the downward-titration language would lead many
users to directly infringe the asserted method claims
because titrating down from the recommended starting
doses would necessarily lead to once-daily usage. Id. at
601-02. The court found that the proposed label provided
evidence of Apotex’s affirmative intent to induce in-
fringement and that there was no evidence in the record
11 ASTRAZENECA LP v. APOTEX

that Apotex had attempted to craft a noninfringing label.
Id. at 605, 607.
The district court also found that AstraZeneca would
suffer irreparable harm if the court did not issue a pre-
liminary injunction, as the damage caused by layoffs and
loss of consumer goodwill would be unquantifiable, and a
confidential settlement agreement between AstraZeneca
and Teva Pharmaceuticals (“Teva”) made determining
economic harm speculative. Id. at 611-14. The court
found that the public interest did not favor either party.
Id. at 614. Before deciding whether to issue the requested
preliminary injunction, the court offered Apotex the
opportunity to present additional evidence addressing
whether Apotex had the necessary specific intent to
induce infringement of the asserted method claims.
Apotex accepted and presented testimony regarding
Apotex’s efforts to develop a non-infringing label. After
considering this testimony, the court issued a supplemen-
tal opinion in which it concluded that AstraZeneca had
shown that Apotex had the requisite specific intent to
induce infringement. AstraZeneca LP v. Apotex, Inc.
(“Supplemental Opinion”), 623 F. Supp. 2d 615 (D.N.J.
2009). The district court then issued its preliminary
injunction. Apotex filed a timely appeal and AstraZeneca
timely filed a cross-appeal. This court has jurisdiction
under 28 U.S.C. § 1292(c)(1).
DISCUSSION
I. The Preliminary Injunction
This court reviews a decision to grant a preliminary
injunction for abuse of discretion. Abbott Labs. v. Sandoz,
Inc., 566 F.3d 1282, 1298 (Fed. Cir. 2009) (citing Ama-
zon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343,
1350 (Fed. Cir. 2001)). “An abuse of discretion may be
established by showing that the court made a clear error
ASTRAZENECA LP v. APOTEX 12

of judgment in weighing relevant factors or exercised its
discretion based upon an error of law or clearly erroneous
factual findings.” Amazon.com, 239 F.3d at 1350 (quoting
Novo Nordisk of N. Am., Inc. v. Genetech, Inc., 77 F.3d
1364, 1367 (Fed. Cir. 1996)).
“A plaintiff seeking a preliminary injunction must es-
tablish that [it] is likely to succeed on the merits, that [it]
is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of equities tips in [its]
favor, and that an injunction is in the public interest.”
Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365,
374 (2008); see also Titan Tire Corp. v. Case New Holland,
Inc., 566 F.3d 1372, 1375 (Fed. Cir. 2009). Apotex appeals
only the district court’s findings that AstraZeneca is likely
to succeed on the merits with respect to the asserted
method claims and is likely to suffer irreparable harm in
the absence of a preliminary injunction.
A. Likelihood of Success on the Merits
For a patentee to establish that it is likely to succeed
on the merits, it “must demonstrate that it will likely
prove infringement of one or more claims of the patents-
in-suit, and that at least one of those same allegedly
infringed claims will also likely withstand the validity
challenges presented by the accused infringer.” Ama-
zon.com, 239 F.3d at 1351. When reviewing the grant of a
preliminary injunction, this court “views the matter in
light of the burdens and presumptions that will inhere at
trial.” Titan Tire Corp., 566 F.3d at 1376 (citation omit-
ted). A preliminary injunction should not issue if an
alleged infringer raises a substantial question regarding
either infringement or validity, i.e., the alleged infringer
asserts an infringement or invalidity defense that the
patentee has not shown lacks substantial merit. Genen-
13 ASTRAZENECA LP v. APOTEX

tech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed.
Cir. 1997).
Apotex contends that AstraZeneca has failed on both
validity and infringement. Regarding validity, Apotex
repeats its argument that the ’528 Patent and the Thorax
advertisement anticipate the asserted method claims.
With respect to infringement, Apotex renews its conten-
tion that the distribution of its generic version of Astra-
Zeneca’s budesonide product would not induce
infringement because such distribution fails to show that
Apotex possessed the requisite specific intent to infringe.
These contentions are addressed in turn.
i. The ’528 Patent
The ’528 Patent, entitled “Corticosteroid Inhalation
Treatment Method,” issued in 1993, several years before
the filing of the application that matured into the ’603
Patent. The ’528 Patent discloses a method for treating
lung conditions such as asthma by administering a sus-
pension of budesonide “entrapped” within a liposome (i.e.,
a spherical vesicle) once daily. Col.7 ll.57-63, col.8 ll.4-11.
Before addressing validity, the district court con-
strued the term “budesonide composition” in the asserted
method claims. The court concluded that the term means
“budesonide dispersed in a solvent in the form of a solu-
tion or suspension” and excludes “the involvement of
liposomes as described in the ’528 Patent.” Opinion at
595. In support of this construction, the district court
noted that the ’603 Patent consistently describes the
compositions used in the claimed method as either sus-
pensions or solutions of budesonide dispersed in a solvent.
Id. The court also cited the testimony of Dr. Robert O.
Williams III, an expert witness presented by AstraZeneca.
Dr. Williams testified that the ’603 Patent discloses a
“depot effect” associated with budesonide that enables the
ASTRAZENECA LP v. APOTEX 14

drug to be effective when administered only once per day.
Prelim. Inj. Hr’g Tr. 16-17, May 4, 2009. Dr. Williams
explained that the ’603 Patent teaches dispersing
budesonide in a solvent as either a solution (i.e., budeson-
ide dissolved in the solvent) or as a suspension (i.e.,
budesonide particles floating in the solvent). Id. at 16-19.
According to Dr. Williams, dispersing budesonide in the
solvent in either form places the budesonide in direct
contact with the solvent, which allows the budesonide to
be absorbed by lung cells where the drug binds with fatty
acids and is rendered inactive. Id. at 16-18. This inactive
budesonide acts as a “depot” or reservoir of budesonide
that replaces free budesonide as the free budesonide is
used. Id. at 16-17. He explained that, unlike the lipo-
some-entrapped budesonide disclosed in the ’528 Patent,
“the budesonide is provided . . . in . . . immediate contact
with the solvent[] such that . . . the budesonide molecules
. . . are available to be absorbed by the airway cells . . .
and act as a depot effect.” Id. at 26-27. Dr. Williams
testified that the ’603 Patent “tells one of skill in the art
that it’s important to provide budesonide immediately in
contact with the solvent either dissolved as a solution or
suspended in a suspension” and later opined that provid-
ing budesonide in direct contact with the solvent was
critical to the depot effect. Id. at 17-18. Based on the
testimony of Dr. Williams, the court found that the “‘depot
effect’ is at the heart of AstraZeneca’s revolutionary
method and it could not occur if the liposomes involved in
the ’528 Patent were present.” Opinion at 595. Accord-
ingly, the district court concluded that the ’528 Patent
does not anticipate the asserted method claims because
the patent does not disclose the claimed “budesonide
composition.” Id.
On appeal, Apotex points out that the ’603 Patent dis-
closes budesonide formulations that include liposomes:
15 ASTRAZENECA LP v. APOTEX

“[T]herapeutic suspensions can also contain one or more
excipients. Excipients are well known in the art and
include . . . liposomes . . . . Solutions or suspensions can
be encapsulated in liposomes or biodegradable micro-
spheres.” ’603 Patent col.3 ll.32-39 (emphases added).
Apotex argues that the district court improperly relied on
expert testimony to arrive at a construction of “budeson-
ide composition” that excludes these formulations, violat-
ing this court’s warnings that claims should generally not
be interpreted in a manner that excludes embodiments
disclosed in the specification.
In response, AstraZeneca argues that the district
court correctly construed the “budesonide composition”
term based on the intrinsic evidence and expert testimony
in the record. AstraZeneca contends that the district
court’s reliance on the testimony of Dr. Williams was
entirely proper, as his testimony simply explained the
meaning of the term “budesonide composition” in the
context of the ’603 Patent.
There is no serious dispute that the ’528 Patent would
anticipate the majority of the asserted method claims if
the term “budesonide composition” is interpreted to
include the liposome embodiments disclosed in the ’528
Patent and would not anticipate the method claims if the
district court’s construction was correct. Thus, the ques-
tion before us is whether the district court correctly
construed the term to exclude these embodiments. This
court reviews the district court’s claim construction de
novo. Cybor Corp. v. Fas Techs., Inc., 138 F.3d 1448, 1456
(Fed. Cir. 1998) (en banc).
This court agrees with AstraZeneca and concludes
that the district court was correct in its claim construc-
tion. A claim term is generally given its “ordinary and
customary meaning,” that is, “the meaning that the term
ASTRAZENECA LP v. APOTEX 16

would have to a person of ordinary skill in the art in
question at the time of the invention.” Phillips v. AWH
Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005) (en banc).
“[T]he person of ordinary skill in the art is deemed to read
the claim term not only in the context of the particular
claim in which the disputed term appears, but in the
context of the entire patent, including the specification.”
Id. at 1313. “[T]he specification may reveal a special
definition given to a claim term by the patentee that
differs from the meaning it would otherwise possess. In
such cases, the inventor’s lexicography governs.” Id. at
1316. The specification need not reveal such a definition
explicitly. See Bell Atl. Network Servs., Inc. v. Covad
Commc’ns Group, Inc., 262 F.3d 1258, 1268 (Fed. Cir.
2001) (“[A] claim term may be clearly redefined without
an explicit statement of redefinition.”). “[W]hen a pat-
entee uses a claim term throughout the entire patent
specification, in a manner consistent with only a single
meaning, he has defined that term ‘by implication.’” Id.
at 1271 (quoting Vitronics Corp. v. Conceptronic, Inc., 90
F.3d 1576, 1582 (Fed. Cir. 1996)).
Here, the specification of the ’603 Patent supports the
conclusion that one of ordinary skill in the art would have
understood the term “budesonide composition” to mean
“budesonide dispersed in a solvent in the form of a solu-
tion or suspension” as construed by the district court. The
specification consistently describes the budesonide com-
positions in that way. The SUMMARY OF THE
INVENTION states that “the invention features a method
of treating a patient suffering from a respiratory disease
in which a composition, e.g., a suspension, of budesonide
is administered by nebulization,” ’603 Patent col.1 ll.29-
31, and explains a few sentences later that “[t]he drug can
be provided as an aqueous suspension in which the
budesonide is suspended in a solvent,” id. col.1 ll.37-39.
17 ASTRAZENECA LP v. APOTEX

The SUMMARY OF THE INVENTION notes that “the
invention also features a kit . . . including a budesonide
composition in a sealed container, the composition includ-
ing 0.05 mg to 15 mg budesonide and a solvent.” Id. col.2
ll.1-6. Similarly, the DETAILED DESCRIPTION states
that “[t]he drug can be delivered in a solvent, e.g., in the
form of a solution or a suspension.” Id. col.3 ll.22-23. The
DETAILED DESCRIPTION goes on to note that nebuliz-
able budesonide is packaged in vials containing “mi-
cronized budesonide suspended in a volume, e.g., 2 ml, of
solvent.” Id. col.4 ll.12-14. The EXAMPLES section
describes two clinical studies performed to determine the
safety and efficacy of administering budesonide once
daily. The patent discloses that in each study
“[b]udesonide was administered once per day as a nebu-
lized suspension.” Id. col.4 ll.65-67, col.7 ll.57-60.
As noted above, the specification does mention lipo-
some formulations in two places. Id. col.3 ll.32-39
(“[T]herapeutic suspensions can also contain one or more
excipients. Excipients are well known in the art and
include . . . liposomes . . . . Solutions or suspensions can
be encapsulated in liposomes or biodegradable micro-
spheres.” (emphases added)). Contrary to Apotex’s con-
tention, however, the district court’s construction does not
exclude either of these formulations. The district court’s
construction excludes “the involvement of liposomes as
described in the ’528 Patent.” Neither of the liposome
formulations discussed in the specification use liposomes
in the manner described in the ’528 Patent. The ’528
Patent describes entrapping budesonide in a liposome.
Such entrapment separates the budesonide from the
surrounding solvent. By contrast, the reference in the
specification to placing liposomes in a suspension as an
excipient indicates a formulation where budesonide and
liposomes are in the same suspension, with the liposomes
ASTRAZENECA LP v. APOTEX 18

independent of and apart from the budesonide, which
remains in contact with the solvent. The statement that
“[s]olutions or suspensions can be encapsulated in lipo-
somes or biodegradable microspheres” indicates that
budesonide either dissolved or floating in a solvent may be
placed within a liposome, not that the term “budesonide
composition” includes budesonide separated from a sol-
vent by a liposome as described in the ’528 Patent.
The specification and the claims are not the only
sources that a court may consider when determining the
meaning of a claim term. A court may look to “those
sources available to the public that show what a person of
skill in the art would have understood disputed claim
language to mean,” which, in addition to the claims and
the rest of the specification, may include “the prosecution
history[] and extrinsic evidence concerning relevant
scientific principles, the meaning of technical terms, and
the state of the art.” Phillips, 415 F.3d at 1314 (quoting
Innova/Pure Water, Inc. v. Safari Water Filtration Sys.,
Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). Extrinsic
evidence “consists of all evidence external to the patent
and prosecution history, including expert and inventor
testimony, dictionaries, and learned treatises.” Id. at
1317 (quoting Markman v. Westview Instruments, Inc., 52
F.3d 967, 980 (Fed. Cir. 1995)).
Here, the record includes the testimony of Astra-
Zeneca’s expert, Dr. Williams. This court generally views
expert testimony “as less reliable than the patent and its
prosecution history in determining how to read claim
terms.” Id. at 1318. However, expert testimony can be
useful “for a variety of purposes, such as to provide back-
ground on the technology at issue, to explain how an
invention works, [or] to ensure that the court's under-
standing of the technical aspects of the patent is consis-
tent with that of a person of skill in the art . . . .” Id. at
19 ASTRAZENECA LP v. APOTEX

1318. In this case, the district court properly relied on the
testimony of Dr. Williams to understand how the claimed
invention works and construed the disputed term in a
manner consistent with that understanding. As described
above, Dr. Williams explained that the ’603 Patent dis-
closes that the depot effect permits budesonide to be
effective when administered once daily and opined that
for the depot effect to occur budesonide must be in direct
contact with the solvent. He also testified that one of skill
in the art would have understood the ’603 Patent to
disclose budesonide in immediate contact with the solvent
as either a solution or suspension. This would exclude the
liposome-entrapped embodiments disclosed in the ’528
Patent. Although Apotex takes issue with the district
court’s reliance on Dr. Williams’s testimony, Apotex does
not seriously dispute his explanation of how the claimed
invention works and provided no testimony to the con-
trary at the preliminary injunction hearing. This court
sees no error in relying on uncontested expert testimony
to explain how the invention described in the intrinsic
record functions. See Netword, LLC v. Centraal Corp.,
242 F.3d 1347, 1356 (Fed. Cir. 2001) (“[A] district court
can not be faulted for relying on the only expert explana-
tion of the technology that was presented.”).
Considered together, the intrinsic evidence and expert
testimony support the conclusion that a person skilled in
the art would have understood the term “budesonide
composition” to mean “budesonide dispersed in a solvent
in the form of a solution or suspension” and excludes “the
involvement of liposomes as described in the ’528 Pat-
ent.” 1 Accordingly, this court concludes that, based on the

1 The dissent notes that after discussing the
depot effect, the ’603 Patent states that “[t]his proposed
mechanism of action is exemplary; the invention is not
limited by any particular mechanism of action,” ’603
ASTRAZENECA LP v. APOTEX 20

evidence of record at this point, the district court correctly
construed this term, and thus correctly found that the
asserted method claims are likely to withstand the valid-
ity challenge posed by the ’528 Patent.
ii. The Thorax Advertisement
As discussed above, a British medical journal pub-
lished the Thorax advertisement in 1994, more than one
year before the filing of the application that issued as the
’603 Patent. The advertisement touts AstraZeneca’s
PULMICORT RESPULES® drug as “[a] high-dose nebu-
lised steroid that’s low on side effects” and notes that the
drug can be used to treat bronchial asthma in children.
The advertisement indicates that the drug was available
in 2 mL single dose vials, each vial containing either 0.25
mg/mL or 0.5 mg/mL of budesonide. The advertisement
includes the following statement regarding dosing:

Patent col.3 ll.11-12, and concludes that the testimony of
Dr. Williams regarding the necessity of the depot effect is
therefore contrary to the specification. But no other
“mechanism of action” is disclosed in the patent, and the
undisputed testimony of Dr. Williams—the only expert
testimony provided to the court on this issue—is that
after reading the ’603 Patent a person of skill in the art
would have understood that the claimed invention simply
would not work without the depot effect. Therefore this
court sees no error in the district court’s construction, as
the evidence of record leaves no doubt that the claimed
invention would be inoperable if the claims are construed
in the manner suggested by Apotex. See Talbert Fuel Sys.
Patents Co. v. Unocal Corp., 275 F.3d 1371, 1376 (Fed.
Cir. 2002), vacated and remanded on other grounds, 537
U.S. 802 (2002) (“[A] construction that renders the
claimed invention inoperable should be viewed with
extreme skepticism.” (citation omitted)).
21 ASTRAZENECA LP v. APOTEX

Initially . . . the recommended dose in adults . . . is
usually 1-2 mg twice daily. . . . Children . . . 0.5-1
mg twice daily. The maintenance dose should be
the lowest dose which keeps the patient symptom-
free. Recommended doses are Adults . . . 0.5-1 mg
twice daily. Children . . . 0.25-0.5 mg twice daily.

When the advertisement was published, AstraZeneca’s
budesonide product was not approved for any use in the
United States and was approved for only twice-daily use
in Europe.
Because it is undisputed that the asserted method
claims cover the use of budesonide solution, the only
question before the district court was whether the adver-
tisement disclosed administering that solution “in a
continuing regimen at a frequency of not more than once
per day” as recited in the claims. The district court found
that the advertisement does not anticipate the asserted
method claims, finding persuasive the explanation of
AstraZeneca’s expert, Dr. Bradley Chipps, that the adver-
tisement does not explicitly or inherently disclose once-
daily dosing because the advertisement was published
“before we had any information or historical perspective
that once a day therapy worked for anyone.” Opinion at
596. The district court reached that conclusion with the
understanding of Dr. Chipps, who also testified that, if
made today, the statement “[t]he maintenance dose
should be the lowest dose which keeps the patient symp-
tom-free” would be equivalent to the downward-titration
language included in the proposed label that AstraZeneca
claimed would induce infringement of the asserted
method claims. Prelim. Inj. Hr’g Tr. 186, May 4, 2009.
On appeal, Apotex asserts that if the language in the
Thorax advertisement would today suggest to those in the
art the possibility of administering the drug once daily, it
ASTRAZENECA LP v. APOTEX 22

would also have suggested this possibility when the
advertisement was published, regardless of whether
anyone had proven that the drug could be effective when
administered once per day. Apotex argues that in con-
cluding otherwise the district court improperly imposed a
temporal limitation on the anticipation inquiry, violating
the oft-repeated axiom “that which would literally in-
fringe if later in time anticipates if earlier.” AstraZeneca
responds that because the drug was only approved for
twice-daily use and was not known to be safe or effective
when administered once daily, there is nothing to show
that one of skill in the art at the time the patent applica-
tion was filed would have understood the advertisement
to disclose once-daily dosing. AstraZeneca thus argues
that the Thorax advertisement was not enabling and for
that reason cannot be considered anticipatory. In any
event, AstraZeneca argues that the reference simply does
not disclose once-daily dosing.
Anticipation is a question of fact, Sanofi-Synthelabo v.
Apotex, Inc., 550 F.3d 1075, 1082 (Fed. Cir. 2008) (citation
omitted), that must be established at trial by clear and
convincing evidence, Purdue Pharma L.P. v. Boehringer
Ingelheim GmbH, 237 F.3d 1359, 1365 (Fed. Cir. 2001).
This court reviews for clear error the district court’s
determination that AstraZeneca has demonstrated that
the asserted method claims will likely survive the validity
challenge posed by the Thorax advertisement. See Ama-
zon.com, 239 F.3d at 1350.
While the question is close, this court agrees with As-
traZeneca that the district court correctly determined that
AstraZeneca has demonstrated that the asserted method
claims will likely withstand the validity challenge pre-
sented by the Thorax advertisement. In the context of
anticipation, the question is not whether a prior art
reference “suggests” the claimed subject matter as posited
23 ASTRAZENECA LP v. APOTEX

by Apotex. Rather, “the dispositive question regarding
anticipation [is] whether one skilled in the art would
reasonably understand or infer from a [prior art refer-
ence]” that every claim element is disclosed in that refer-
ence. In re Baxter Travenol Labs, 952 F.2d 388, 390 (Fed.
Cir. 1991). And although a reference must be enabling to
be anticipatory, see Sanofi-Synthelabo, 550 F.3d at 1082,
unlike enablement under § 112, a reference need not, as
AstraZeneca suggests, demonstrate utility or efficacy to
be enabling in the context of § 102, see In re Gleave, 560
F.3d 1331, 1335-36 (Fed. Cir. 2009) (“[A] reference need
disclose no independent use or utility to anticipate a claim
under § 102.”); Bristol-Myers Squibb Co. v. Ben Venue
Labs., Inc., 246 F.3d 1368, 1379 (Fed. Cir. 2001). As
explained in Rasmusson v. SmithKline Beecham Corp.,
413 F.3d 1318, 1325 (Fed. Cir. 2005), the reason for this
distinction “is that [§] 112 ‘provides that the specification
must enable one skilled in the art to ‘use’ the invention
whereas [§] 102 makes no such requirement as to an
anticipatory disclosure.’" Id. (quoting In re Hafner, 410
F.2d 1403, 1405 (CCPA 1969 )).
Apotex’s argument that the Thorax advertisement is
anticipatory because the advertisement and the proposed
label are essentially the same ignores a key difference
between the advertisement and the proposed label. As
discussed in greater detail in the next section, depending
on a patient’s previous therapy, the proposed label rec-
ommends initially administering 0.25 mg of budesonide
twice daily. The district court concluded that the pro-
posed label would induce infringement because, absent
instructions to the contrary, titrating down to the lowest
effective dose from the recommended starting dose of 0.25
mg of budesonide twice daily would necessarily lead some
users to take 0.25 mg of budesonide once daily as a main-
tenance dose, as there would be no way to properly ad-
ASTRAZENECA LP v. APOTEX 24

minister less than 0.25 mg of the drug. By contrast, the
Thorax advertisement explicitly discloses that such main-
tenance doses should be administered twice daily. Imme-
diately after the advertisement warns that “[t]he
maintenance dose should be the lowest dose which keeps
the patient symptom-free,” the advertisement sets out
recommended doses for adults and children: 0.5-1 mg
twice daily for adults, and 0.25-0.5 mg twice daily for
children. The most natural reading of this passage is that
the recommended doses are recommended maintenance
doses, which the advertisement explicitly states should be
administered twice daily. Thus, although Dr. Chipps
testified that the statement “[t]he maintenance dose
should be the lowest dose which keeps the patient symp-
tom-free” would, if made today, be equivalent to the
downward-titration language included in the proposed
label, the advertisement—unlike the proposed label—
clearly states how often a maintenance dose should be
given: twice per day.
Dr. Chipps confirmed that one of ordinary skill in the
art would have understood the advertisement to disclose
administering budesonide twice-daily, not once per day as
argued by Apotex. He testified that “there’s nothing in
[the Thorax advertisement] that talks about or alludes to
once a day dosage,” and noted that the advertisement
instructs that the recommended starting and mainte-
nance doses are to be administered twice daily. Prelim.
Inj. Hr’g Tr. 144, May 4, 2009. Dr. Chipps opined that
when the Thorax advertisement was published in 1994 a
physician reading the dosing recommendations set forth
in the advertisement would not have understood the
dosing recommendations to teach once-daily dosing. Id.
at 144. He explained that until AstraZeneca conducted
clinical studies on its budesonide product in 1997 there
was no evidence that administering budesonide once-daily
25 ASTRAZENECA LP v. APOTEX

would be safe and effective. Indeed, he noted that prior to
1997, the lowest dose of budesonide known to be effective
was 0.25 mg taken twice a day. Id. at 147-48. Apotex
presented no testimony or evidence to the contrary.
After considering the reference and appreciating how
that reference would have been understood by persons of
ordinary skill in the art at that time, this court is not left
with a definite and firm conviction that the district court
clearly erred by concluding that at trial Apotex will likely
not be able to demonstrate by clear and convincing evi-
dence that the Thorax advertisement anticipates the
asserted method claims. 2 Accordingly, the district court’s
determination is affirmed.
iii. Inducement
“Whoever actively induces infringement of a patent
shall be liable as an infringer.” 35 U.S.C. § 271(b).
“[I]nducement requires that the alleged infringer know-
ingly induced infringement and possessed specific intent
to encourage another’s infringement.” DSU Med. Corp. v.
JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc in

2 By rearranging the language of the Thorax
advertisement, the dissent makes it appear that the
advertisement and the proposed label both recommend
administering a starting dose of 0.25 to 0.5 mg twice daily
followed by eventual reduction to the lowest effective
dose. But the facts do not support that suggestion. The
Thorax advertisement actually specifies higher levels of
initial recommended twice daily dosing and then goes on
to state that “[t]he maintenance dose should be the lowest
dose which keeps the patient symptom-free. Recom-
mended doses are: . . . 0.25-0.5 mg twice daily.” The
Thorax advertisement thus recommends reducing a
higher dose to the twice daily dose of 0.25-0.5 mg, not first
administering 0.25-0.5 mg twice daily and then reducing
the dosage to either once daily or twice daily doses as
suggested by the dissent.
ASTRAZENECA LP v. APOTEX 26

relevant part) (citation omitted) (internal quotation
marks omitted). “Infringement is a question of fact re-
viewed for clear error.” Golden Blount, Inc. v. Robert H.
Peterson, Co., 438 F.3d 1354, 1361 (Fed. Cir. 2006) (cita-
tion omitted). “A factual finding is clearly erroneous
when, despite some supporting evidence, the reviewing
court is left with the definite and firm conviction that a
mistake has been made.” Id. at 1361 (citation omitted).
Before the district court, AstraZeneca contended that
Apotex’s proposed label would induce consumers to in-
fringe the asserted method claims because the label
implicitly instructed users to administer the generic drug
once daily. As in AstraZeneca’s PULMICORT
RESPULES ® drug label, the DOSAGE AND
ADMINISTRATION section of the proposed generic label
explains that “[i]n all patients, it is desirable to down-
ward-titrate to the lowest effective dose once asthma
stability is achieved.” The section also includes the fol-
lowing table of recommended starting doses and highest
recommended doses, which differs from AstraZeneca’s
label in the removal of all mention of once-daily dosing:
27 ASTRAZENECA LP v. APOTEX

Highest
Previous Recommended
Recommended
Therapy Starting Dose
Dose
0.5 mg total daily
Bronchodilators dose administered 0.5 mg total
alone twice daily in di- daily dose
vided doses

0.5 mg total daily
Inhaled dose administered 1 mg total daily
Corticosteroids twice daily in di- dose
vided doses

1 mg total daily dose
Oral 1 mg total daily
administered as 0.5
Corticosteroids dose
mg twice daily

In the paragraph following the table, the label again
warns that “[o]nce the desired clinical effect is achieved,
consideration should be given to tapering to the lowest
effective dose.”
The district court agreed with AstraZeneca that the
proposed label would cause some users to infringe the
asserted method claims. The proposed label indicates
that the generic drug will be available in only two
strengths: 0.25 mg and 0.5 mg per 2 mL vial. The court
noted that, once opened, each vial of the generic drug
must immediately be administered in its entirety because
dividing the contents of a vial for use at different times
would compromise the drug’s sterility. Opinion at 600
n.17. Because the recommended starting dose for pa-
tients in the first two rows of the dosing table is “0.5 mg
ASTRAZENECA LP v. APOTEX 28

total daily dose administered twice daily in divided doses”
(i.e., 0.25 mg administered twice a day), the court rea-
soned that the first step in titrating down from this dose
would have to be 0.25 mg once daily, as there was no way
of decreasing the amount of each dose below 0.25 mg. Id.
at 602. Accordingly, the court concluded that, for patients
whose previous treatments fell within the first two rows
of the dosage table, the downward-titration language
would necessarily lead patients to use a 0.25 mg vial of
the drug once-daily.
The district court found that a letter issued by the
FDA supported this conclusion. In 2008, AstraZeneca
filed a citizen petition with the FDA concerning an ANDA
submitted by IVAX Pharmaceuticals, Inc. (“IVAX”) that is
virtually identical to the ANDA submitted by Apotex. In
the petition, AstraZeneca asked the FDA to determine
that labeling for a generic budesonide inhalation suspen-
sion must include once-daily dosing language. Astra-
Zeneca also questioned the propriety of including
downward-titration language in a proposed label for a
generic budesonide inhalation suspension. In response,
the FDA issued a letter explaining that the labeling for a
generic budesonide inhalation suspension could omit
references to once-daily dosing “[b]ecause the weight of
the evidence is stronger in support of efficacy for twice-
daily dosing as opposed to once-daily dosing . . . omission
of once-daily dosing in the generic BIS labeling would not
render the generic drug less safe or effective than
PULMICORT RESPULES®.” Letter from the FDA to
AstraZeneca 16 (Nov. 18, 2008). The letter also stated
that the FDA found it appropriate to include the down-
ward-titration language in proposed labeling for generic
budesonide inhalation suspensions because the FDA
believed that the language did not “teach” once-daily
dosing:
29 ASTRAZENECA LP v. APOTEX

Titration to the lowest effective dose may involve,
for example, a twice-daily regimen, once-daily dos-
ing, or even alternate day dosing . . . . The label-
ing does not state the lowest effective dose is 0.25
mg once daily. As such, contrary to your asser-
tion, the downward titration statement does not
“teach” once-daily dosing.

....

. . . . The downward titration statement does not
specify or instruct that the dosing frequency must
be once daily and need not be carved out as pro-
tected by the 6,598,603 and 6,899,099 patents.

Id. at 18. The district court concluded that the letter
supported the court’s finding of direct infringement be-
cause the letter explicitly stated (and therefore put Apo-
tex on notice) that downward titration may involve once-
daily dosing. Opinion at 601.
Regarding specific intent to induce infringement, the
district court found that AstraZeneca had submitted
evidence of Apotex’s affirmative intent that consumers
use the generic drug in an infringing manner: Apotex’s
inclusion of the downward-titration language in the
proposed label. Id. at 605. The court also noted that
Apotex had presented no evidence that the company had
attempted to draft a non-infringing label. Id. at 606-07.
Because the question of Apotex’s efforts to draft a non-
infringing label had arisen late in the proceedings, the
court offered Apotex the opportunity to continue the
hearing and present evidence on this issue.
Apotex accepted the court’s offer and presented Ber-
nice Tau, the Director of Regulatory Affairs at Apotex, to
ASTRAZENECA LP v. APOTEX 30

testify at the hearing. Tau testified that, in addition to
removing all explicit references to once-daily dosing, at
the advice of counsel, Apotex had also inserted the phrase
“by administration twice-daily” in sections of the proposed
label that Apotex included with its ANDA. Prelim. Inj.
Hr’g Tr. 19, 21-22, May 20, 2009. She explained that the
FDA responded by instructing Apotex to delete this
phrase and sending Apotex a template containing the
language Apotex was to include in the proposed label. Id.
at 22-23.
Tau stated that Apotex never intended to instruct or
encourage either physicians or patients to use its generic
drug once-daily. Id. at 32. She also testified that it never
occurred to Apotex that the downward-titration state-
ments in the proposed label would suggest once-daily use
of Apotex’s generic version of the drug. Id. at 27. She
explained that she became aware that the language was
problematic after Apotex obtained approval of its ANDA,
when Apotex’s counsel notified her that AstraZeneca was
objecting to use of the language. Id. at 27, 37. She stated
that after learning of the issue, she made two calls to the
FDA to address AstraZeneca’s concerns and proposed the
following three amendments to the label: (1) adding the
words “twice daily” to the downward-titration language;
(2) adding language stating the drug is not approved for
less than twice-daily use; and (3) removing the downward-
titration language Id. at 27-31. She testified that she did
so despite believing, based on her experience with the
FDA, that the FDA would not allow Apotex to alter the
label. Id. at 27-28. She stated that during these calls the
FDA informed her of the letter it issued in response to
AstraZeneca’s petition. Id. at 37-38. As she expected, the
FDA did not permit Apotex to make any of the suggested
changes. She explained that Apotex did not submit a
formal labeling amendment because, based on her conver-
31 ASTRAZENECA LP v. APOTEX

sations with the FDA, she believed doing so would have
been futile. Id. at 33-34.
Tau acknowledged that she knew that FDA decisions
could be appealed, but stated that she was not familiar
with the process, as she had never had to appeal an FDA
decision regarding an ANDA. Id. at 37, 40. Tau also
admitted that had Apotex wanted to seek approval to
distribute a different strength of the generic drug, Apotex
could have submitted a suitability petition, but she ex-
plained that she thought this was unnecessary because
Apotex’s ANDA satisfied all of the applicable require-
ments. Id. at 11-12, 52-53.
Based on the evidence presented on the hearing, the
district court found that Apotex “was aware of and cer-
tainly concerned about the potential infringement prob-
lem posed by its label,” but nevertheless decided to
proceed with the label. Opinion at 618. The district court
noted that Apotex had other options at its disposal that it
chose not to pursue. The court pointed out that Apotex
could have formally appealed the FDA’s decision. Id. The
court also noted that Apotex could have filed a suitability
petition or a paper NDA that sought approval to produce
the generic drug at a strength of 0.125 mg per 2 mL. At
that strength, AstraZeneca conceded that the downward-
titration language would not teach an infringing use. Id.
at 619 & n.3. The court found that this conduct showed
that Apotex had the requisite specific intent to induce
infringement and granted AstraZeneca’s request for a
preliminary injunction. Id. at 618-19.
Apotex, joined by two amici, mounts multiple chal-
lenges to the district court’s finding that Apotex had the
necessary specific intent to induce infringement. Apotex
first contends that the district court inferred specific
intent to induce infringement from Apotex’s planned
ASTRAZENECA LP v. APOTEX 32

distribution of the generic drug. Apotex argues that
drawing such an inference is improper where the product
in question has substantial non-infringing uses. Astra-
Zeneca responds that the district court based its specific
intent finding not on an improper inference but rather on
the circumstances surrounding Apotex’s decision to pro-
ceed with its planned distribution of the generic drug and
the affirmative evidence of intent provided by the pro-
posed label.
This court agrees with AstraZeneca. Apotex is correct
that “where a product has substantial noninfringing uses,
intent to induce infringement cannot be inferred even
when the [alleged inducer] has actual knowledge that
some users of its product may be infringing the patent.”
Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365
(Fed. Cir. 2003). However, “liability for active induce-
ment may be found ‘where evidence goes beyond a prod-
uct’s characteristics or the knowledge that it may be put
to infringing uses, and shows statements or actions di-
rected to promoting infringement.’” Ricoh Co. v. Quanta
Computer Inc., 550 F.3d 1325, 1341 (Fed. Cir. 2008)
(quoting Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
Ltd. (“Grokster”), 545 U.S. 913, 935 (2005)). As the Su-
preme Court explained in Grokster in the context of
infringement under the copyright laws, “[e]vidence of
active steps . . . taken to encourage direct infringement,
such as advertising an infringing use or instructing how
to engage in an infringing use, show an affirmative intent
that the product be used to infringe.” 545 U.S. at 936
(internal quotation marks and citations omitted).
The district court correctly concluded that such evi-
dence exists here. As an initial matter, the district court
suggested that there was insufficient evidence to establish
that any noninfringing use of the generic drug was sub-
stantial, calling into question the applicability of the
33 ASTRAZENECA LP v. APOTEX

“substantial non-infringing use” doctrine in this case.
Opinion at 605 n.25. Be that as it may, the district court
found that Apotex had the requisite specific intent to
induce infringement because Apotex included instructions
in its proposed label that will cause at least some users to
infringe the asserted method claims. Id. at 605. The
district court also found that, despite being aware of the
infringement problem presented by the proposed label,
Apotex nonetheless proceeded with its plans to distribute
its generic drug product. Supplemental Opinion at 618.
This conduct, not merely the planned distribution of the
generic drug, formed the basis of the district court’s
specific intent finding. See id. at 618-19. To the extent
that Apotex contends that such circumstantial evidence
cannot support a finding of specific intent, this court has
explicitly stated otherwise. Water Techs. Corp. v. Calco,
Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988) (“While proof of
intent is necessary, direct evidence is not required; rather,
circumstantial evidence may suffice.” (citation omitted)).
Apotex next contends that the proposed label is not
evidence of specific intent because warnings on drug
labels do not influence how a drug is used. Apotex further
argues that even if labels did affect how drugs are used,
the district court erroneously determined that the down-
ward-titration language would lead the generic drug to be
used in an infringing manner. Apotex asserts that the
label does not instruct users to titrate down from a spe-
cific starting dose; instead, the label contains a general
recommendation that is applicable to any dosing regimen.
This court disagrees. In the context of specific intent,
it is irrelevant that some users may ignore the warnings
in the proposed label. The pertinent question is whether
the proposed label instructs users to perform the patented
method. If so, the proposed label may provide evidence of
Apotex’s affirmative intent to induce infringement. See
ASTRAZENECA LP v. APOTEX 34

Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1329
n.2 (Fed. Cir. 2009) (“The question is not . . . whether a
user following the instructions may end up using the
device in an infringing way. Rather, it is whether [the]
instructions teach an infringing use of the device such
that we are willing to infer from those instructions an
affirmative intent to infringe the patent.”). Even if Apo-
tex were correct that the downward-titration language
may be applied to other dosing regimens, the language is
still applicable to the recommended starting doses and, as
correctly determined by the district court, would inevita-
bly lead some consumers to practice the claimed method.
Apotex and the amici also argue that the proposed la-
bel alone is not sufficient evidence of specific intent be-
cause the FDA required Apotex to include the downward-
titration language in the label and stated that the lan-
guage does not teach the patented method. Apotex as-
serts that it agrees with the FDA and has never believed
that the downward-titration language teaches the claimed
once-daily method of administration. In response, Astra-
Zeneca contends that Apotex’s compliance with FDA
requirements and agreement with the FDA’s opinion
regarding the downward-titration is immaterial. Astra-
Zeneca argues that if Apotex could not create a nonin-
fringing label, Apotex should have waited for the ’603
Patent to expire before attempting to market its generic
drug.
This court again agrees with AstraZeneca. As ex-
plained above, the district court’s specific intent finding
was not based solely on the proposed label, but also on
Apotex’s decision to proceed with its plan to distribute the
drug despite being aware that the label presented in-
fringement problems. Apotex and the amici make much
of the Hobson’s choice they contend that Apotex faced:
either comply with FDA requirements and risk a patent
35 ASTRAZENECA LP v. APOTEX

infringement suit or remove the downward-titration
language and ensure that the ANDA would not be ap-
proved. This court sees no such dilemma. Apotex was
free to submit a Paragraph III certification and wait until
the patents expired before distributing its generic drug or
file a Paragraph IV certification and challenge infringe-
ment and validity of the asserted claims. Or, as observed
by the district court, Apotex could have formally appealed
the FDA’s denial of Apotex’s proposed labeling amend-
ments or filed either a suitability petition or a paper NDA
seeking approval for a 0.125 mg per 2 mL strength of the
drug.
Apotex’s reliance on the FDA’s statements that the
downward-titration language does not “teach” once-daily
dosing and is not protected by the ’603 and ’099 patents is
misplaced. As acknowledged by both the parties and the
district court, the FDA is not the arbiter of patent in-
fringement issues. See Applications for FDA Approval To
Market a New Drug: Patent Submission and Listing
Requirements and Application of 30-Month Stays on
Approval of Abbreviated New Drug Applications Certify-
ing That a Patent Claiming a Drug Is Invalid or Will Not
Be Infringed, Fed. Reg. 36,676, 36,683 (June 18, 2003)
(“[W]e lack expertise in patent matters. An administra-
tive process for reviewing patents, assessing patent
challenges, and de-listing patents would involve patent
law issues that are outside both our expertise and our
authority.”).
In light of the evidence presented to the district court,
this court is not left with a definite and firm conviction
that a mistake has been made. Thus, this court affirms
the district court’s finding that AstraZeneca will likely
prove induced infringement at trial.
ASTRAZENECA LP v. APOTEX 36

B. Irreparable Harm
The district court found that AstraZeneca would suf-
fer three types of irreparable harm if the court did not
grant the requested preliminary injunction. First, the
court determined that a confidential settlement agree-
ment between AstraZeneca and Teva would make calcu-
lating the economic harm from a premature launch of
Apotex’s generic budesonide impossible. Second, the court
concluded that AstraZeneca would incur unquantifiable
damage to its reputation and goodwill if Apotex were
allowed to launch its generic drug and was subsequently
forced to remove the drug from the market. Third, the
court found that the damage caused by layoffs stemming
from entry of the generic drug into the market would also
be significant and unquantifiable. Apotex challenges each
of these findings, and each finding is considered in turn.
i. The Settlement Agreement
On November 18, 2008, Teva received FDA approval
to distribute a generic version of AstraZeneca’s budeson-
ide drug and immediately began its distribution. Later
that day, AstraZeneca initiated a patent infringement
suit in the district court against Teva and successfully
moved the court for a temporary restraining order enjoin-
ing Teva from selling the generic drug. AstraZeneca and
Teva subsequently entered into a settlement agreement
that granted Teva an exclusive license to sell its generic
drug beginning December 15, 2009, with Teva agreeing to
pay AstraZeneca a significant royalty. The agreement
also included a “step down” provision that reduced the
amount Teva was obligated to pay AstraZeneca if unli-
censed drug manufacturers launched generic versions of
the drug and certain conditions were met. In addition,
Teva agreed to pay AstraZeneca a specified amount for
37 ASTRAZENECA LP v. APOTEX

damages caused by Teva’s unauthorized launch of its
generic drug.
The district court observed that under the settlement
agreement AstraZeneca would continue to have market
exclusivity until December 15, 2009, and that after that
date AstraZeneca and Teva would share the market.
Based on expert testimony, the court concluded that to
reliably calculate the economic harm AstraZeneca would
suffer after December 15, 2009, the court would need data
reflecting a market including only AstraZeneca and Teva.
Because Apotex’s planned launch would prevent a market
with only AstraZeneca and Teva from ever occurring, the
district court determined that it would be “complete
speculation to put a number on what this market would
have been worth to AstraZeneca.” Opinion at 611. The
court dismissed Apotex’s argument that “the parties
expectations when they entered into the licensing agree-
ment” would be sufficient to calculate damages, explain-
ing that “there is a distinction between what the parties
expect and what actually would have occurred” and
concluding that it would be impossible to calculate with
reasonable certainty the economic damage that Astra-
Zeneca would suffer under the settlement agreement if
Apotex began distributing its generic drug. Id.
Apotex argues on appeal that testimony during the
hearing established that during the settlement negotia-
tions AstraZeneca and Teva had estimated the required
market data. Because this information would be subject
to discovery, Apotex contends that that district court
clearly erred when the court concluded that the damages
AstraZeneca would suffer would be incalculable.
In response, AstraZeneca suggests that the data gen-
erated during the settlement negotiations was influenced
by the relative bargaining power of the parties and is not
ASTRAZENECA LP v. APOTEX 38

an accurate reflection of a market with only AstraZeneca
and Teva. AstraZeneca argues that without the benefit of
actual data from such a market, any damages calculation
would be based on speculation.
This court agrees with AstraZeneca. Both Astra-
Zeneca and Apotex rely on the testimony of Richard
Fante, the president of AstraZeneca. Fante admitted that
AstraZeneca and Teva did forecast certain market data
during the settlement negotiation, but characterized the
negotiation as a “gun-to-head moment” and explained
that the companies relied mostly on “the experience we’d
had as executives” when generating the forecast. Prelim.
Inj. Hr’g Tr. 63-64, Apr. 30, 2009. Given the lack of
reliable data regarding a market with only AstraZeneca
and Teva, this court is not left with a definite and firm
conviction that the district court erred by concluding that
the damages AstraZeneca would incur under the settle-
ment agreement would be incalculable.
ii. Goodwill
The district court found that if Apotex began distrib-
uting its generic drug and was subsequently forced to
remove the drug from the market, the resulting confusion
among physicians and patients, as well as price changes,
would cause unquantifiable harm to AstraZeneca’s good-
will. Apotex asserts that this finding is speculative, as
certain provisions of the settlement agreement would
mitigate, if not eliminate, any adverse effects of Apotex
launching and then removing its generic drug from the
market. Although this court agrees with Apotex that
there has not been a particularly strong showing regard-
ing this finding, after reviewing the record, this court
concludes that the district court did not clearly err by
determining that AstraZeneca will suffer incalculable
harm to its goodwill.
39 ASTRAZENECA LP v. APOTEX

iii. Layoffs
Based on the testimony of Fante, the district court
concluded that AstraZeneca would have to lay off some of
its employees if Apotex launched its generic drug and the
resulting noneconomic loss would be significant and
unquantifiable. Opinion at 612. The parties’ dispute
regarding this finding largely concerns whether Fante
testified that he would have to lay off employees if Apotex
launched its generic drug or merely testified that layoffs
might occur in that situation. Apotex points out that
when asked whether Apotex’s entry would force him to lay
off employees at AstraZeneca’s manufacturing facility,
Fante responded, “It could.” Prelim. Inj. Hr’g Tr. 100,
Apr. 30, 2009. However, as noted by AstraZeneca, Fante
later clarified that if Apotex and Teva were both in the
market that “in that scenario we would have to have a
layoff [in the manufacturing facility].” Id. Moreover,
when asked what effect Apotex’s launch would have on
AstraZeneca employees, Fante explained that
“[u]ndoubtedly . . . I would have to have a further reduc-
tion in the size of the U.S. workforce.” Id. at 47. Simi-
larly, when asked whether this reduction would occur if
Apotex launched its product after December 15, he stated,
“Absolutely.” Id. Given this undisputed testimony, this
court discerns no clear error in the district court’s finding.
This court has reviewed the other arguments raised by
Apotex concerning this finding and conclude that they too
lack merit.
****
Because Apotex has not demonstrated that that any of
the district court’s findings regarding irreparable harm
are clearly erroneous, this court sees no reason to disturb
the district court’s determination that AstraZeneca would
suffer irreparable harm.
ASTRAZENECA LP v. APOTEX 40

II. The Kit Claims
The asserted kit claims recite two elements: (1) a
budesonide composition or suspension in a sealed con-
tainer containing 0.05 mg to 15 mg budesonide and a
solvent, and (2) a label indicating administration by
nebulization in a continuing regimen at a frequency of not
more than once per day. See, e g., ’603 Patent col.12 ll.3-8;
’099 Patent col.11 ll.9-14. The district court concluded
that the kit claims are invalid, finding the claimed
budesonide composition and suspension were known in
the prior art and that the instructions in the claimed label
are non-statutory subject matter and therefore not enti-
tled to patentable weight. Opinion at 589-92. Regarding
the instructions in the label, the district court explained
that under Federal Circuit precedent “[w]here . . . printed
matter is not functionally related to the substrate, the
printed matter will not distinguish the invention from the
prior art in terms of patentability.” Id. at 590 (citation
omitted). This court noted that here the parties disputed
what constitutes the substrate, with Apotex contending
that the label is the substrate and AstraZeneca asserting
that the substrate is the drug. Id. at 592. After consider-
ing our precedent, the district court concluded that this
dispute was immaterial because regardless of how the
substrate was defined, “the instructions simply explain
how to use the known product. This type of relationship
does not qualify as a functional one . . . .” Id. at 591.
AstraZeneca argues that a drug label and its associ-
ated drug are “inextricably interrelated,” as a drug cannot
be approved unless and until the FDA approves its label.
AstraZeneca notes that FDA regulations require the label
for a drug to include information needed for proper use of
the drug and argues that without the label a physician
would be unable to safely and effectively treat patients.
In light of this, AstraZeneca contends that a drug label is
41 ASTRAZENECA LP v. APOTEX

essential to physicians when prescribing a drug and,
therefore, is functionally related to the drug.
Apotex counters that, for the purposes of determining
whether the claimed label is entitled to patentable
weight, the relationship between the drug and the label is
irrelevant. According to Apotex, the proper inquiry is
whether there is a functional relationship between the
printed matter and its substrate, i.e., the object the
printed matter is printed on. Apotex contends that here
the printed matter is the instruction for once-daily use
and the substrate is the paper label. Citing In re Ngai,
367 F.3d 1336 (Fed. Cir. 2004), Apotex argues that the
instructions are not functionally related to the label on
which they are printed because they do not function
together in any way.
There is no dispute that the budesonide suspension
recited in the claims is known in the prior art. The ques-
tion before us is whether the district court correctly
determined that the recitation in the claims of a label
instructing not more than once-a-day dosing is of no
patentable consequence. This court reviews de novo the
district court’s determination that the asserted claims
recite non-statutory subject matter. See In re Comiskey,
554 F.3d 967, 975 (Fed. Cir. 2009) (explaining that
“whether the asserted claims . . . are invalid for failure to
claim statutory subject matter under 35 U.S.C. § 101[] is
a question of law which we review without deference.”
(quoting AT&T Corp. v. Excel Commc’ns, Inc., 172 F.3d
1352, 1355 (Fed. Cir. 1999))).
The categories of patentable subject matter are set
forth in 35 U.S.C. § 101:
Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of
matter, or any new and useful improvement
ASTRAZENECA LP v. APOTEX 42

thereof, may obtain a patent therefor, subject to
the conditions and requirements of this title.

This court has generally found printed matter to fall
outside the scope of § 101. See In re Chatfield, 545 F.2d
152, 157 (CCPA 1976) (“Some inventions, however meri-
torious, do not constitute patentable subject matter, e.g.,
printed matter . . . .” (citation omitted)). However, as
observed by the district court, this court has long recog-
nized an exception to this general rule: If there is a “func-
tional relationship” between the printed matter and its
substrate, the printed matter may serve to distinguish the
invention from the prior art. See In re Miller, 418 F.2d
1392, 1396 (CCPA 1969); In re Gulack, 703 F.2d 1381,
1385-87 (Fed. Cir. 1983).
This court considered the printed matter exception in
Ngai, a case similar to the one now before us. In Ngai,
the Board affirmed the rejection of a claim reciting a kit
comprising instructions to amplify ribonucleic acids. The
Board found that the only difference between the claimed
kit and the prior art was the content of the claimed in-
structions. Concluding that this content was not func-
tionally related to the kit, the Board found that the claim
was anticipated by the prior art. This court affirmed,
rejecting the argument that the addition of new printed
matter to a known product makes the product patentable.
This court reasoned that “the printed matter in no way
depends on the kit, and the kit does not depend on the
printed matter. All that the printed matter does is teach
a new use for an existing product.” Ngai, 367 F.3d at
1339.
This court agrees with Apotex that as in Ngai the
claimed instructions here are not entitled to patentable
weight. The instructions in no way function with the drug
to create a new, unobvious product. Removing the in-
43 ASTRAZENECA LP v. APOTEX

structions from the claimed kit does not change the ability
of the drug to treat respiratory diseases. Although Astra-
Zeneca is correct that FDA regulations require a label
containing information needed for the safe and effective
use of any drug, this is a requirement for FDA approval,
not patentability.
This court also agrees with the district court that the
dispute over whether the “substrate” is the label or the
drug is immaterial, for in both cases the instructions do
nothing more than explain how to use the known drug.
Our decision in Ngai foreclosed the argument that simply
adding new instructions to a known product creates the
functional relationship necessary to distinguish the
product from the prior art. As explained in Ngai, if this
court concluded otherwise “anyone could continue patent-
ing a product indefinitely provided that they add a new
instruction sheet to the product.” 367 F.3d at 1339.
Neither the Patent Act nor our precedent countenances
such an outcome. The district court’s determination that
the kit claims are invalid is affirmed.
CONCLUSION
For the foregoing reasons, this court concludes that
the district court did not abuse its discretion by granting
the preliminary injunction and did not err in determining
that the kit claims are invalid.
AFFIRMED
 United States Court of Appeals
for the Federal Circuit
__________________________

ASTRAZENECA LP
AND ASTRAZENECA AB,
Plaintiffs-Cross Appellants,

v.
APOTEX, INC.
AND APOTEX CORP.,
Defendants-Appellants.
__________________________

2009-1381, -1424
__________________________

Appeal from the United States District Court for the
District of New Jersey in case No. 09-CV-1518, Judge
Renee Marie Bumb.
__________________________

BRYSON, Circuit Judge, concurring in part and dissenting
in part.

I concur in the portion of the court’s opinion sustain-
ing the district court’s ruling that the “kit” claims of
AstraZeneca’s ’603 and ’099 patents are invalid. Because
I believe Apotex has raised a substantial question of
invalidity as to the other claims of the ’603 patent, see
Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d
1343, 1359 (Fed. Cir. 2001), I would reverse the district
court’s grant of a preliminary injunction.
ASTRAZENECA LP v. APOTEX 2

Apotex has asserted that two prior art references an-
ticipate the claims in dispute, the ’528 patent and the
Thorax advertisement.

1. The district court’s ruling that the ’528 patent does
not anticipate the ’603 claims was predicated on an un-
duly narrow claim construction of the term “budesonide
composition” in the ’603 claims. The court’s construction
required the budesonide to be “dispersed in a solvent in
the form of a solution or a suspension,” and it excluded
“the involvement of liposomes as described in the ’528
[reference.]” The claims of the ’603 patent, however, are
broader than that.

Claim 1, the only independent method claim of the
’603 patent, recites the administration of a “nebulized
dose of a budesonide composition in a continuing regimen
at a frequency of not more than once per day.” Even
assuming that the reference to a “nebulized” dose requires
dispersion in a solvent, nothing in the patent mandates a
particular manner in which the budesonide and the
solvent are to be combined.

More specifically, contrary to the testimony of Astra-
Zeneca’s expert Dr. Williams, the ’603 patent does not
require that the budesonide of the “budesonide composi-
tion” be directly suspended or dissolved in a solvent, free
from encapsulation or entrapment within liposomes. In
fact, the language of the patent undercuts Dr. Williams’s
rationale for that interpretation. While Dr. Williams
assumed that use of the “depot effect,” with which lipo-
some involvement may interfere, is a critical aspect of the
invention of the ’603 patent, the specification explicitly
disavows any need for the depot effect to occur. Thus,
after describing the depot effect, the specification states:
“This proposed mechanism of action is exemplary; the
3 ASTRAZENECA LP v. APOTEX

invention is not limited by any particular mechanism of
action.” ’603 patent, col. 3, ll. 12-13. That language
indicates that the patentees did not consider the depot
effect to be essential to the effectiveness of once-daily-or-
less dosing, as Dr. Williams claimed. Because the pat-
ented method of treatment encompasses mechanisms of
action other than the depot effect, the term “budesonide
composition” need not consist of budesonide directly
dispersed in solvent, and it need not exclude the involve-
ment of liposomes as described in the ’528 reference. The
’528 reference therefore appears to anticipate (or render
obvious) the asserted claims under the proper construc-
tion of the term “budesonide composition.”

2. With respect to the 1994 advertisement for Pulmi-
cort Respules® in the journal Thorax, AstraZeneca con-
cedes that the advertisement discloses every limitation of
the asserted method claims except for the frequency of
drug administration: “not more than once per day.” On
that issue, the district court stated:

[a]lthough the Thorax advertisement states that
“[t]he maintenance dose should be the lowest dose
which keeps the patient symptom-free[,]” Dr.
Chipps testified that this statement does not in-
struct once-daily dosing because the ad was pub-
lished “back in 1994 . . . before we had any
information or historical perspective that once a
day therapy worked for anybody.” The Court
finds this answer persuasive.

AstraZeneca LP v. Apotex, Inc., 623 F. Supp. 2d 579, 596
(D.N.J. 2009). The district court concluded that at the
time of its publication the Thorax advertisement did not
enable once-daily dosing, because a person of skill in the
art in 1994 would not have believed that once-daily ad-
ASTRAZENECA LP v. APOTEX 4

ministration of Pulmicort Respules® would be effective.
As the majority acknowledges, however, a prior art refer-
ence need not demonstrate utility in order to serve as an
anticipating reference under section 102. Rasmusson v.
SmithKline Beecham Corp., 413 F.3d 1318, 1326 (Fed.
Cir. 2005).

The Thorax advertisement contains a list of recom-
mended dosing regimens as low as “0.25-0.5 mg twice
daily”; it also suggests that “the maintenance dosage
should be the lowest dosage which keeps the patient
symptom-free.” The Apotex label similarly recommends
dosages of 0.25 mg to 0.5 mg administered twice daily and
states that “[o]nce the desired clinical effect is achieved,
consideration should be given to tapering to the lowest
effective dose.” The district court concluded that Apotex’s
label induced infringement by suggesting the administra-
tion of the drug once a day. There is no reason to treat
the similar recitation in the Thorax advertisement differ-
ently. The district court’s rationale for distinguishing
between the Apotex label and the Thorax advertisement—
that in 1994 the scientific community had yet to confirm
that once-daily dosing was effective in large patient
populations—does not undermine the effect of the adver-
tisement in suggesting a reduction in dosage for particu-
lar patients, which would necessarily be achieved either
by reducing the amount administered on each occasion or
the frequency of administration.

Because Apotex has presented a substantial question
concerning the validity of the ’603 patent’s method claims,
I would vacate the preliminary injunction.