Roche Palo Alto LLC v. Apotex, Inc.

United States Court of Appeals for the Federal Circuit
2008-1021

ROCHE PALO ALTO LLC (formerly known as Syntex (U.S.A.) LLC)
and ALLERGAN, INC.,

Plaintiffs-Appellees,

v.

APOTEX, INC. and APOTEX CORP.,

Defendants-Appellants.

Alexander L. Brainerd, Heller Ehrman LLP, of San Francisco, California, argued for
plaintiffs-appellees. With him on the brief were Christine Saunders Haskett, Samuel F.
Ernst, and Nathan E. Shafroth. Of counsel was Keith R. Weed.

Manny D. Poktilow, Caesar, Rivise, Bernstein, Cohen & Pokotilow, LTD., of
Philadelphia, Pennsylvania, argued for defendants-appellants. With him on the brief were
Robert S. Silver, Mona Gupta, and William J. Castillo. Of counsel on the brief was
Shashank S. Upadhye, Apotex, Inc., of Toronto, Ontario, Canada.

Appealed from: United States District Court for the Northern District of California

Judge Martin J. Jenkins
 United States Court of Appeals for the Federal Circuit
2008-1021

ROCHE PALO ALTO LLC (formerly known as Syntex (U.S.A.) LLC)
and ALLERGAN, INC.,

Plaintiffs-Appellees,

v.

APOTEX, INC. and APOTEX CORP.,

Defendants-Appellants.

Appeal from the United States District Court for the Northern District of California in
case no. 05-CV-2116, Judge Martin J. Jenkins.

__________________________

DECIDED: July 9, 2008
__________________________

Before MICHEL, Chief Judge, PROST, Circuit Judge, and HOCHBERG, District Judge. ∗

PROST, Circuit Judge.

This is a patent infringement case under the Hatch-Waxman Act. Apotex, Inc.

and Apotex Corp. (collectively “Apotex”) appeal the grant of summary judgment by the

United States District Court for the Northern District of California that the patent held by

Roche Palo Alto LLC and Allergan, Inc. (collectively “Roche”) is valid and infringed by

the formulation covered by Apotex’s abbreviated new drug application (“ANDA”). Roche

Palo Alto, LLC v. Apotex, Inc., 526 F. Supp. 2d 985 (N.D. Cal. 2007). Because we find

∗
Honorable Faith S. Hochberg, District Judge, United States District Court
for the District of New Jersey, sitting by designation.
no error in the court’s holding that the reverse doctrine of equivalents is inapplicable and

that claim preclusion prohibits Apotex from raising other validity challenges, we affirm.

I

A

Roche is the owner of U.S. Patent No. 5,110,493 (“the ’493 patent”), which is

directed to a drug formulation for treatment of eye inflammation, such as that caused by

glaucoma, conjunctivitis, eye surgery, or eye injury. ’493 patent, col. 1, ll. 14-28. The

formulation contains a non-steroidal anti-inflammatory drug (“NSAID”), such as

ketorolac tromethamine (“KT”); a quaternary ammonium preservative, such as

benzalkonium chloride (“BAC”); and the nonionic surfactant, octoxynol 40 (“O40”). Id.,

col. 3, ll. 13-19, col. 4, ll. 20-41. Claim 1 is representative:

An opthalmologically acceptable non-steroidal anti-inflammatory drug
formulation, comprising:
an opthamologically acceptable non-steroidal anti-inflammatory
carboxyl group-containing drug in an effective amount for
ophthalmic treatment between 0.001% and 10.00% wt/vol;
a quaternary ammonium preservative in an antimicrobially effective
amount between 0.001% and 1.0% wt/vol;
an ethoxylated alkyl phenol that conforms generally to the formula:
C8H17C6H4(OCH2-CH2)nOH where n has an average value of 40
[O40] in a stabilizing amount between 0.001% and 1.0% wt/vol; and
an aqueous vehicle q.s. to 100%.

Dependent claim 7 further includes sodium chloride (“NaCl”) at a concentration of

0.79% wt/vol.

The last limitation in claim 1, requiring the presence of O40, was added in

response to the examiner’s obviousness rejection over several prior art references.

Accompanying the claim amendment, the applicants submitted the Lidgate Declaration,

which stated that O40 produced unexpected results over other nonionic surfactants,

2008-1021 2
such as O3 and O5. Specifically, the declaration stated that O40 produced a clear

solution while the others did not. The examiner allowed the claims based on the

unexpected results of O40.

Over the years, Apotex filed two different ANDAs on two different generic drug

formulations, each containing a paragraph IV certification that the ’493 patent is invalid,

unenforceable, or will not be infringed by the generic version of the drug. In 2001,

Apotex filed its first ANDA (“ANDA-1”), directed to a generic version of Roche’s

ACULAR®. Subsequently, in 2005, Apotex filed its second ANDA (“ANDA-2”), directed

to a generic version of Roche’s ACULAR®LS. The two formulations differ in their

compositions as follows:

ANDA-1 (ACULAR®) ANDA-2 (ACULAR®LS)

KT 0.5% 0.4%
BAC 0.01% 0.0063%
O40 0.01% 0.004%
NaCl 0.8% 0.8%

Notably, the concentration of O40 is reduced in the ANDA-2 formulation as compared to

the ANDA-1 formulation, but both are within the range claimed in claim 1 of the ’493

patent. The concentration of NaCl is identical in the two formulations and encompassed

by at least claim1 of the patent.

B

On June 6, 2001, Roche’s predecessor, Syntex (U.S.A.) LLC (“Syntex”) sued

Apotex for infringement of the ’493 patent based on the ANDA-1 formulation. The

district court issued a claim construction order. Syntex (U.S.A.) LLC v. Apotex, Inc., No.

01-2214 (N.D. Cal. Nov. 19, 2002). Because claim 1 of the ’493 patent expressly states

a concentration range for O40, the court held that the claim term “stabilizing amount” is

2008-1021 3
merely a statement of intended result and not a claim limitation. Id., slip op. at 9.

Thereafter, the district court granted Syntex’s motion for partial summary judgment that

the ANDA-1 formulation literally infringed the ’493 patent. Syntex (U.S.A.) LLC v.

Apotex, Inc., No. 01-2214, slip op. at 4-5 (N.D. Cal. Mar. 19, 2003). Following a bench

trial on Apotex’s invalidity defenses of lack of utility, lack of enablement, indefiniteness,

and obviousness, and its unenforceablity defense based on inequitable conduct, the

court held that the ’493 patent was both valid and enforceable. Syntex (U.S.A.) LLC v.

Apotex, Inc., No. 01-2214 (N.D. Cal. Dec. 29, 2003) (“Syntex I”).

On May 18, 2005, this court affirmed the district court’s claim construction and

holding of no inequitable conduct, but reversed its holding of validity based on non-

obviousness. Syntex (U.S.A.) LLC v. Apotex, Inc., 407 F.3d 1371 (Fed. Cir. 2005)

(“Syntex II”). Specifically, we found that the district court clearly erred in some of its

factual findings and misapplied certain legal presumptions with respect to its

obviousness analysis. Id. at 1378-83. On remand, the district court again held that the

’493 patent was not invalid for obviousness, Syntex (U.S.A.) LLC v. Apotex, Inc., No.

01-2214, 2006 WL 1530101 (N.D. Cal. June 2, 2006) (“Syntex III”), and we affirmed

without opinion. 221 Fed. Appx. 1002 (Fed. Cir. Apr. 9, 2007).

One day after our mandate issued, the Supreme Court issued its opinion on

obviousness in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007). Apotex

then filed a motion to recall and stay the mandate, and to extend the time to request a

rehearing in view of KSR, but the motion was denied. Apotex also filed a petition for

writ of certiorari, and that petition too was denied. Apotex, Inc. v. Syntex (U.S.A.) LLC,

128 S. Ct. 209 (2007).

2008-1021 4
 C

On May 24, 2005, Roche sued Apotex for infringement of the ’493 patent based

on the ANDA-2 formulation. Apotex asserted the defenses of non-infringement;

invalidity under 35 U.S.C. §§ 101, 103, and 112; and unenforceability due to inequitable

conduct. Thereafter, Roche filed a motion for summary judgment that the ANDA-2

formulation infringes the ’493 patent and that the validity and unenforceability defenses

should be barred based on the earlier Syntex litigation (Syntex I, Syntex II, and Syntex

III) under the doctrines of issue preclusion and claim preclusion. Apotex countered by

arguing that the ANDA-2 formulation escapes infringement under the reverse doctrine of

equivalents. Apotex further averred that the doctrines of issue preclusion and claim

preclusion were inapplicable because the ANDA-2 formulation and the ANDA-1

formulation were distinct, and the change in law exception, in view of KSR, prevented

application of those doctrines.

On September 11, 2007, the district court granted Roche’s motion for summary

judgment. Roche Palo Alto LLC v. Apotex, Inc., 526 F. Supp. 2d 985 (N.D. Cal. 2007).

First, the court found that Apotex had failed to properly establish the “principle” of the

’493 invention under the first prong of the reverse doctrine of equivalents analysis. Id.

at 992-93. Although Apotex contended that the “principle” of the invention was to use

O40 to provide robust stability to the formulations by forming micelles to prevent

interaction between KT and BAC, the court noted that Apotex did not support this

“principle” by reference to the claim language, specification, prosecution history, and/or

prior art, which are the proper sources to determine the equitable scope of the claims.

2008-1021 5
Id. Therefore, the court held that Apotex did not meet its burden of establishing a prima

facie case of noninfringment under the reverse doctrine of equivalents. Id.

The district court also held that Apotex’s invalidity and unenforceablity

arguments, with the exception of obviousness, were prevented by issue preclusion

because the invalidity of the ’493 patent had already been asserted against Roche in

the ANDA-1 litigation. Id. at 994-95. Following Ninth Circuit precedent, the court held

that issue preclusion barred Apotex from challenging validity on any ground, even

grounds that had not been raised in the first litigation. Id. at 995. With respect to the

validity challenge on obviousness grounds, the court did not reach whether the

Supreme Court decision in KSR constituted a change in law necessitating an exception

to issue preclusion because it held that such a challenge was prevented by claim

preclusion. Id. at 997.

With respect to claim preclusion, the district court held that the two accused

products, ANDA-1 and ANDA-2, are “essentially the same,” and thus each of the

invalidity claims in the ANDA-2 litigation was prevented by claim preclusion. Id. at 997-

99. The court further held that there is no “change of law” or fairness exception to claim

preclusion to prevent its application despite the intervening KSR decision. Id. at 999-

1000. Hence, the court held that Apotex’s invalidity and unenforceability affirmative

defenses were barred by claim preclusion. Id. at 1000.

Apotex appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

II

We review a grant of summary judgment of non-infringement de novo, reapplying

the standard used by the district court. Innogenetics, N.V. v. Abbott Labs., 512 F.3d

2008-1021 6
1363, 1378 (Fed. Cir. 2008). Summary judgment is appropriate where, drawing all

reasonable inferences in favor of the non-movant, there is no genuine issue as to any

material fact and no reasonable jury could return a verdict for the non-movant.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 255 (1986).

The determination of infringement is a two-step process, wherein the court first

construes the claims and then determines whether every claim limitation, or its

equivalent, is found in the accused device. In re Gabapentin Patent Litig., 503 F.3d

1254, 1259 (Fed. Cir. 2007). While claim construction is a question of law that we

review de novo, Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998)

(en banc), non-infringement under the reverse doctrine of equivalents is a question of

fact. SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1124 (Fed. Cir. 1985).

We review the district court’s application of the doctrine of claim preclusion de

novo. Acumed LLC v. Stryker Corp., No. 2007-1115, 2008 WL 2020534, at *2 (Fed. Cir.

May 13, 2008); Maldonado v. Harris, 370 F.3d 945, 949 (9th Cir. 2004); Littlejohn v.

United States, 321 F.3d 915, 919 (9th Cir. 2003).

III

Apotex does not dispute that the ANDA-2 formulation falls within the literal scope

of claim 1 of the ’493 patent. Instead, Apotex argues that the district court erred in

failing to find non-infringement by the ANDA-2 formulation under the reverse doctrine of

equivalents.

The reverse doctrine of equivalents is an equitable doctrine designed “to prevent

unwarranted extension of the claims beyond a fair scope of the patentee’s invention.”

Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1581 (Fed. Cir.

2008-1021 7
1991). According to the Supreme Court:

[W]here a device is so far changed in principle from a patented article that
it performs the same or similar function in a substantially different way, but
nevertheless falls within the literal words of the claim, the [reverse]
doctrine of equivalents may be used to restrict the claim and defeat the
patentee’s action for infringement.

Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608-609 (1950)

(emphases added). While the patentee bears the burden of proving infringement, if the

patentee establishes literal infringement, the burden shifts to the accused infringer to set

forth a prima facie case of non-infringement under the reverse doctrine of equivalents.

SRI Int’l, 775 F.2d at 1123-24. If the accused infringer is successful in making a prima

facie case, the patentee must then rebut that prima facie case. Id. at 1124. The

reverse doctrine of equivalents is rarely applied, and this court has never affirmed a

finding of non-infringement under the reverse doctrine of equivalents. Tate Access

Floors, Inc. v. Interface Architectural Res., Inc., 279 F.3d 1357, 1368 (Fed. Cir. 2002).

Apotex, relying on the declaration of its scientific expert, Dr. Mitra, argues that a

person of ordinary skill in the art would recognize that the “principle” of the ’493 patent is

the use of O40 in an amount sufficient to cause the formation of micelles and thereby

provide robust stability to the formulation by preventing interactions between KT and

BAC. Apotex contends that such a principle is supported by the prosecution history of

the ’493 patent application in that the examiner ultimately allowed the claims based on

the Lidgate Declaration, demonstrating the unexpected results of formulations

containing O40. According to Apotex, it is of no consequence that the claims,

specification, and prosecution history do not mention “micelles” and that the district

court construed “stabilizing amount” to be an intended result, not a claim limitation,

2008-1021 8
since a person of ordinary skill in the art knows that O40 stabilizes the formulation by

forming micelles. In contrast to the patented invention, Apotex asserts, the

concentration of O40 in the ANDA-2 formulation is far below the concentration required

to form micelles. Instead, in the ANDA-2 formulation, NaCl acts to ionically shield KT

and BAC, preventing them from interacting. Thus, Apotex asserts, the ANDA-2

formulation is stabilized by a completely different ingredient and mechanism, and

functions in a “substantially different way” from the formulation claimed in the ’493

patent.

Apotex contends that because it has succeeded in making a prima facie showing

of non-infringement under the reserve doctrine of equivalents, it is incumbent upon

Roche to rebut that prima facie case. According to Apotex, Roche has presented only

attorney arguments, not scientific evidence or expert testimony, to rebut Apotex’s

evidence. Even if the attorney arguments are accepted as contrary evidence, Apotex

contends that there is at least a genuine issue of material fact in dispute not amenable

to resolution on summary judgment. Thus, Apotex asserts, the district court erred by

not drawing all inferences in favor of Apotex and not finding a genuine issue of material

fact.

We agree with the district court that Apotex has failed to set forth a prima facie

case of non-infringement under the reverse doctrine of equivalents because it does not

properly establish the principle of the ’493 patent. The “principle” or “equitable scope of

the claims” of the patented invention is determined in light of the specification,

prosecution history, and the prior art. Scripps Clinic, 927 F.2d at 1581. Here, however,

Apotex relies exclusively on the declaration of its expert, Dr. Mitra.

2008-1021 9
 As the district court noted, there is no mention of “micelle” in the claims,

specification, or prosecution history of the ’493 patent. Further, we previously held that

there was no error in the district court’s construction of claim 1 of the ’493 patent to

regard “stabilizing amount” not as a claim limitation, but as an intended result, given that

the claim expressly sets forth a concentration range for O40. Syntex II, 407 F.3d at

1378. Thus, there is no support in the claims or specification for micelle formation or for

robust stabilization of the formulation by prevention of KT/BAC interactions. The

prosecution history is not in evidence in this case and was not relied on by Apotex

before the district court in establishing the principle of the invention. Nonetheless, there

is no indication that the examiner, in allowing the claims, attributed the unexpected

results of O40 to its superiority in forming micelles. The intrinsic evidence is therefore

inconsistent with Apotex’s proffered “principle” of the ’493 invention.

The claims and the specification clearly encompass formulations comprising a

broad concentration range of O40, from 0.001% to 10% wt/vol. 1 Example 3 discloses a

formulation containing O40 at a concentration of 0.004% wt/vol, the same concentration

as in the ANDA-2 formulation.

For these reasons, we agree with the district court that Apotex did not properly

support its alleged “principle” of the patented invention and consequently failed to make

out a prima facie case of non-infringement under the reverse doctrine of equivalents.

1
Apotex asserts that, if the ’493 claims are construed to cover the entire
claimed O40 concentration range, then the claims are invalid under 35 U.S.C. § 112, first
paragraph, because they are not enabled throughout their full scope. Alternatively,
Apotex argues that, if the claims are so construed, they are invalid as obvious under 35
U.S.C. § 103, because not all concentrations form micelles and thus produce
unexpected results. Such arguments go to the validity of the claims of the ’493 patent.

2008-1021 10
Roche, therefore, was not required to rebut the prima facie case. Accordingly, we find

no error by the district court in rejecting Apotex’s defense under the reverse doctrine of

equivalents and in granting summary judgment of literal infringement of the claims of the

’493 patent by the ANDA-2 formulation.

IV

Apotex next asserts that the district court erred in holding that its validity

challenges to the ’493 patent were barred by claim preclusion. Under Ninth Circuit law,

claim preclusion applies where: “(1) the same parties, or their privies, were involved in

the prior litigation, (2) the prior litigation involved the same claim or cause of action as

the later suit, and (3) the prior litigation was terminated by a final judgment on the

merits.” Cent. Delta Water Agency v. United States, 306 F.3d 938, 952 (9th Cir. 2002)

(citing Blonder-Tongue Labs. v. Univ. of Ill. Found., 402 U.S. 313, 323-24 (1971));

Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 985, 987 (9th Cir. 2005).

Apotex does not dispute that the Syntex litigation (Syntex I, Syntex II, and Syntex

III) ended in a final judgment and that it involved the same parties or their privies.

Rather, Apotex contests only the district court’s holding that the instant litigation,

pertaining to its ANDA-2 formulation, and the Syntex litigation, pertaining to its ANDA-1

formulation, involved the same claim or cause of action. Whether two claims for

infringement constitute the “same claim” is an issue particular to patent law and thus

Federal Circuit law applies. Acumed LLC v. Stryker Corp., No. 2007-1115, 2008 WL

2020534, at *2 (Fed. Cir. May 13, 2008); Hallco Mfg. Co. v. Foster, 256 F.3d 1290, 1294

(Fed. Cir. 2001). Under the law of the Federal Circuit, an infringement claim in a

For the reasons discussed below, we agree with the district court that such validity

2008-1021 11
second suit is the “same claim” as in an earlier infringement suit if the accused products

in the two suits are “essentially the same.” Acumed, 2008 WL 2020534, at *3; Foster v.

Hallco Mfg. Co., 947 F.2d 469, 479-80 (Fed. Cir. 1991). Accused products “are

‘essentially the same’ where the differences between them are merely ‘colorable’ or

‘unrelated to the limitations in the claim of the patent.’” Acumed, 2008 WL 2020534, at

*3 (citations omitted); Foster, 947 F.2d at 480. The party asserting claim preclusion has

the burden of showing that the accused products are essentially the same. Acumed,

2008 WL 2020534, at *3; Foster, 947 F.2d at 480.

Apotex avers that Roche had the burden of establishing that the ANDA-2

formulation at issue in the instant litigation and the ANDA-1 formulation at issue in the

Syntex litigation were “essentially the same,” yet Roche did not present any expert

testimony or other evidence to that effect. In contrast, Apotex provided the Mitra

Declaration, which shows that the concentration of O40 in the ANDA-2 formulation is

insufficient to form micelles and thus the ANDA-2 formulation is materially different from

the ANDA-1 formulation. Apotex further contends that the ANDA-2 formulation is not

“essentially the same” as the ANDA-1 formulation because the two formulations are

stabilized by completely different ingredients and mechanisms. Whereas micelle

formation by O40 stabilizes the ANDA-1 formulation, ionic shielding by NaCl stabilizes

the ANDA-2 formulation. According to Apotex, the fact that it had to file a separate

ANDA for the ANDA-2 formulation is additional evidence that the ANDA-2 formulation is

materially different from the ANDA-1 formulation. Thus, Apotex asserts that there is at

challenges are barred by claim preclusion.

2008-1021 12
least a genuine issue of material fact as to whether the two ANDA formulations are

“essentially the same.”

We find no error in the district court’s analysis. The court determined that the

ANDA-1 formulation and the ANDA-2 formulation are “essentially the same” because

any differences between them are unrelated to the claims of the ’493 patent. Though

the court recognized that there are differences in the concentrations of the ingredients in

the ANDA-1 and ANDA-2 formulations, it also realized that all of the concentrations are

well within the ranges claimed in the ’493 patent. The fact that they are stabilized by

different mechanisms, even if true, is irrelevant because both formulations are

encompassed by the claims of the ’493 patent. Thus, any difference in composition

between the two formulations is merely colorable and the two formulations are

“essentially the same.”

In the alternative, Apotex asserts that principles of fairness should prevent

application of claim preclusion given the change in the law of obviousness following the

Supreme Court’s opinion in KSR. In essence, Apotex argues that claim preclusion is

not absolute and that this is a case where an exception to the finality rule should apply.

The district court, however, correctly recognized that there is no “change of law”

or fairness exception to prevent application of claim preclusion. Federated Dep’t

Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981); see also Clifton v. Att’y Gen. of Cal.,

997 F.2d 660, 663 (9th Cir. 1993) (“For us to conclude, under the facts of this case, that

the district court’s order has become an ‘instrument of wrong’ merely because it rests on

a since repudiated rationale would be to nullify the doctrine of res judicata.”); Wilson v.

Lynaugh, 878 F.2d 846, 850-51 (5th Cir. 1989); Precision Air Parts, Inc. v. Avco Corp.,

2008-1021 13
736 F.2d 1499, 1503 (11th Cir. 1984) (“The general rule . . . throughout the nation, is

that changes in the law after a final judgment do not prevent the application of res

judicata and collateral estoppel, even though the grounds on which the decision was

based are subsequently overruled.”); Hardison v. Alexander, 655 F.2d 1281, 1288-89

(D.C. Cir. 1981). Although there may be a rare exception in cases involving “momentus

changes in important, fundamental constitutional rights,” Precision Air Parts, 736 F.2d at

1504, no such right is involved here.

As the Supreme Court explained:

Nor are the res judicata consequences of a final, unappealed judgment on
the merits altered by the fact that the judgment may have been wrong or
rested on a legal principle subsequently overruled in another case. . . .
We have observed that “[t]he indulgence of a contrary view would result in
creating elements of uncertainty and confusion and in undermining the
conclusive character of judgments, consequences which it was the very
purpose of the doctrine of res judicata to avert.”

Federated Dep’t Stores, 452 U.S. at 398-99 (citations and internal quotations omitted).

Thus, the KSR decision does not prevent application of claim preclusion.

Accordingly, the district court did not err in concluding that Apotex’s validity

challenges to the ’493 patent were barred by the doctrine of claim preclusion. 2

2
Because we hold that the district court properly determined that Apotex’s
validity challenges were barred by claim preclusion, we need not reach whether the
district court lawfully applied the doctrine of issue preclusion to bar the same validity
challenges.

2008-1021 14
 V

For the foregoing reasons, we affirm the district court’s grant of Roche’s motion

for summary judgment that the ANDA-2 formulation literally infringes the claims of the

’493 patent and that Apotex’s invalidity and unenforceability challenges to the ’493

patent are barred by claim preclusion.

AFFIRMED

2008-1021 15