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Reverse doctrine of equivalents still a losing argument at the Federal Circuit
July 11, 2008
In a decision Wednesday, the Federal Circuit affirmed a district court's finding of patent validity and patent infringement. The Federal Circuit found no error in the district court's holding that the reverse doctrine of equivalents was inapplicable and that claim preclusion prohibited the defendant from raising other validity challenges. Specifically, the defendant did not establish a prima facie case of noninfringement under the reverse doctrine of equivalents because it relied exclusively on the declaration of its expert witness to determine the principle of the invention instead of properly determining the principle from the specification, prosecution history, and prior art. The Federal Circuit added that the reverse doctrine of equivalents is rarely applied (and that it has never affirmed a finding of non-infringement under the doctrine).The Federal Circuit further agreed with the district court that the defendant's other claims were precluded by earlier litigation. The accused products in both the first and second litigations were encompassed by the claims of the patent, so they constituted the "same claim" for purposes of claim preclusion. The defendant also argued that because of KSR, there should be a "change of law" or fairness exception to claim preclusion. The Federal Circuit disagreed, stating that although there may be rare exceptions in cases involving "momentous changes in important, fundamental constitutional rights," KSR involved no such right.More detail of Roche Palo Alto LLC v. Apotex, Inc. after the jump.The plaintiff, Roche, owns a patent directed to a drug formulation for treatment of eye inflammation. 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). Claim 1 is representative:
An ophthalmologically acceptable non-steroidal anti-inflammatory drug formulation, comprising:
an ophthalmologically acceptable non-steroidal anti-inflammatory carboxyl
group-containing drug in an effective amount for ophthalmic treatment between 0.001% and 10.0% 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%.

The limitation requiring the presence of O40 was added in response to the examiner's obviousness rejection over several prior art references. The applicant submitted a declaration stating that O40 produced unexpected results over other nonionic surfactants, specifically a clear solution. The examiner allowed the claims based on the unexpected results of O40.The defendant, Apotex, had filed two different abbreviated new drug applications (ANDAs) on two different generic drug formulations. In 2001, Apotex filed the first ANDA (ANDA-1) directed towards a generic version of Roche's ACULAR®. In 2005, Apotex filed the second ANDA (ANDA-2) directed towards a generic version of Roche's ACULAR®LS. The compositions of the two formulations and the relevant scope of claim 1 of the patent are below:

ANDA 1 ANDA 2 Patent
KT 0.01% 0.0063% 0.001%-10.0%
O40 0.01% 0.004% 0.001%-1.0%
NaCl 0.8% 0.8% ----------------

The concentration of O40 in the ANDA-2 formulation is reduced by 60% from the ANDA-1 formulation, but both are within the range of the patent. In 2001, Roche's predecessor sued Apotex for infringement of the patent based on the ANDA-1 formulation. The district court granted a motion for partial summary judgment that the ANDA-1 formulation literally infringed, and at a bench trial held the patent valid and enforceable. After a reversal of claim construction by the Federal Circuit, the district court again held the patent not invalid for obviousness and the Federal Circuit affirmed without opinion. One day later, the Supreme Court decided KSR International Co. v. Teleflex Inc. Apotex then filed a motion to recall and stay the mandate, and to extend the time to request a rehearing in view of KSR, as well as a petition for writ of certiorari. All were denied.In 2005, Roche sued Apotex for infringement based on the ANDA-2 formulation. Apotex once again asserted defenses of non-infringement, invalidity, and unenforceability due to inequitable conduct. Roche filed a motion for summary judgment that the ANDA-2 formulation infringed and that the validity and unenforceability defenses should be barred based on the earlier litigation under the doctrines of issue and claim preclusion. Apotex responded by arguing that the ANDA-2 formulation did not infringe under the reverse doctrine of equivalents and that the doctrines of issue and claim preclusion were inapplicable because the ANDA-2 formulation and the ANDA-1 formulation were distinct, and that the change in law exception, in view of KSR, prevented application of those doctrines. The district court granted Roche's motion for summary judgment finding that Apotex had failed to properly establish the principle of the patent under the first prong of the reverse doctrine of equivalents analysis, specifically that Apotex did not support its asserted principle by reference to the proper sources to determine the equitable scope of claim language, such as the claim language, specification, prosecution history, or prior art, and so failed to establish a case under the reverse doctrine of equivalents. The district court further held that Apotex's invalidity and unenforceability arguments, with the exception of obviousness, were prevented by issue preclusion because the invalidity of the patent had already been asserted against Roche in the previous litigation. The court did not reach whether KSR constituted a change in law necessitating an exception to issue preclusion, because it held that such a challenge was barred by claim preclusion.The Federal Circuit affirmed. The court first addressed the reversed doctrine of equivalents, and observed that the doctrine is rarely applied. In fact, the Federal Circuit has never affirmed a finding of noninfringement under the reverse doctrine of equivalents. In order to succeed on a reverse doctrine of equivalents defense to infringement, the accused infringer must show that the accused product "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."Apotex relied on the declaration of its scientific expert who argued that a person of ordinary skill in the art would recognize that the "principle" of the patent is the use of O40 in an amount sufficient to cause the formation of micelles that prevent interactions between KT and BAC, and thereby provide robust stability to the formation. Apotex argued that the concentration of O40 in the ANDA-2 formulation was far below the concentration required to form micelles and that the ANDA-2 formulation relied on NaCl to ionically shield KT and BAC to prevent them from interacting. Therefore, Apotex argued, the ANDA-2 formulation was stabilized by a completely different ingredient and mechanism, and functions in a substantially different way from the formulation claimed in the patent.The Federal Circuit was unpersuaded, and held Apotex failed to set forth a prima facie case of noninfringement under the reverse doctrine of equivalents because it did not properly establish the principle of the patent. The court stated that the principle, or equitable scope of the claims, of the patented invention must be determined from the specification, prosecution history, and/or prior art. In this case, Apotex relied exclusively on the declaration of its expert, Dr. Mitra. There was no mention of micelles in the claims, specification or prosecution history of the patent (in fact the prosecution history was not even in evidence), and as a result there was no support for the position that micelle formation was the principle of the invention. As a result, the court affirmed the district court's summary judgment that the reverse doctrine of equivalents did not apply.Turning to preclusion, the court, applying Ninth Circuit law, noted 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." Apotex only contested the second requirement. Under Federal Circuit law, two claims for infringement constitute the "same claim" if the differences between the accused products in the two suits are merely "colorable" or "unrelated to the limitations in the claim of the patent." Here, it was undisputed that both formulations were encompassed by the claims of the patent, so the court had little trouble finding the "same claim" requirement of claim preclusion satisfied.The Federal Circuit also rejected Apotex's argument that the 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. There is no "change of law" or fairness exception to prevent application of claim preclusion. While the court acknowledged that there may be rare exceptions in cases involving "momentous changes in important, fundamental constitutional rights," no such right was involved here. As a result, Apotex was properly precluded from raising its invalidity and unenforceability defenses in the second suit.To read the full decision in Roche Palo Alto LLC v. Apotex, Inc., click here.
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