Case: 13-1409 Document: 47 Page: 1 Filed: 08/26/2013
`
`Appeal No. 2013-1409
`
`
`UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
`_____________________
`
`SHIRE DEVELOPMENT LLC., SHIRE PHARMACEUTICAL
`DEVELOPMENT INC., COSMO TECHNOLOGIES LIMITED,
`and GIULIANI INTERNATIONAL LIMITED,
`
`
`
`Plaintiffs-Appellees,
`
`v.
`
`WATSON PHARMACEUTICALS, INC. (now known as Actavis, Inc.),
`WATSON LABORATORIES, INC. – FLORIDA, WATSON PHARMA, INC.,
`(now known as Actavis Pharma, Inc.), and WATSON LABORATORIES, INC.,
`
`
`
`Defendants-Appellants.
`
`Appeal from the United States District Court for the Southern District of
`Florida in No. 12-CV-60862, Judge Donald M. Middlebrooks.
`
`
`CORRECTED BRIEF OF PLAINTIFFS-APPELLEES
`
`EDGAR H. HAUG
`JASON A. LIEF
`ANDREW S. WASSON
`NICHOLAS F. GIOVE
`ELIZABETH MURPHY
`JONATHAN A. HERSTOFF
`FROMMER LAWRENCE & HAUG LLP
`745 Fifth Avenue
`New York, NY 10151
`
`
`Attorneys for Plaintiffs-Appellees
`
`August 26, 2013
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 2 Filed: 08/26/2013
`
`CERTIFICATE OF INTEREST
`
`As required by Federal Rule of Appellate Procedure 26.1 and Federal Circuit
`
`Rule 47.4, counsel for Plaintiffs-Appellees Shire Development LLC, Shire
`
`Pharmaceutical Development Inc., Cosmo Technologies Limited, and Nogra
`
`Pharma Limited (formerly known as Giuliani International Limited) certify the
`
`following:
`
`1.
`
`The full name of every party represented by me is:
`
`Shire Development LLC
`Shire Pharmaceutical Development Inc.
`Cosmo Technologies Limited
`Nogra Pharma Limited (formerly known as Giuliani International Limited)
`
`2.
`
`The name of the real parties in interest represented by me are:
`
`Shire Development LLC
`Shire Pharmaceutical Development Inc.
`Cosmo Technologies Limited
`Nogra Pharma Limited (formerly known as Giuliani International Limited)
`
`3.
`
`All parent corporations and any publicly held companies that own
`10 percent or more of the stock of the party represented by me
`are:
`
`Shire Development LLC and Shire Pharmaceutical Development Inc. are wholly
`owned subsidiaries of Shire plc.
`
`Cosmo Pharmaceuticals S.p.A. is the parent corporation of and owns 10 percent or
`more of the stock of Cosmo Technologies Limited.
`
`Nogra S.A. is the parent corporation of Nogra Pharma Limited. Nogra Two S.A. is
`the parent corporation of Nogra S.A. MGG Trust and GG Trust are two
`irrevocable discretionary New York trusts that own Nogra Two S.A. Mr. Jay H.
`McDowell serves as trustee for both the MGG Trust and the GG Trust.
`
`
`
`– i –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 3 Filed: 08/26/2013
`
`4.
`
`The names of all law firms and the partners and associates that
`have appeared for the party represented by me in the trial court
`or are expected to appear in this Court are:
`
`Edgar H. Haug
`Jason A. Lief
`Mark P. Walters
`Andrew S. Wasson
`Nicholas F. Giove
`Elizabeth Murphy
`Jonathan A. Herstoff
`FROMMER LAWRENCE & HAUG LLP
`745 Fifth Avenue
`New York, NY 10151
`(212) 588-0800
`
`Eric C. Christu
`Joseph R. Englander
`Daniel J. Barsky
`SHUTTS & BOWEN LLP
`525 Okeechobee Boulevard, Suite 1100
`West Palm Beach, FL 33401
`(561) 650-8556
`
`William Barry Blum
`Martin James Keane, Jr.
`GENOVESE JOBLOVE & BATTISTA
`100 SE 2nd Street, Suite 4400
`Miami, FL 33131
`(305) 349-2300
`
`
` /s/ Nicholas F. Giove
`Counsel for Appellees
`August 26, 2013
`
`
`
`– ii –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 4 Filed: 08/26/2013
`
`
`TABLE OF AUTHORITIES ................................................................................... vi
`
`TABLE OF CONTENTS
`
`GLOSSARY ............................................................................................................. ix
`
`CLAIM CONSTRUCTION ....................................................................................... x
`
`STATEMENT OF RELATED CASES .................................................................. xii
`
`STATEMENT OF THE ISSUES............................................................................... 1
`STATEMENT OF THE CASE .................................................................................. 2
`STATEMENT OF THE FACTS ............................................................................... 4
`I.
`The Parties, the Disease, and the Drug ............................................................ 4
`
`II.
`
`The ’720 Patent ................................................................................................ 6
`
`III. The Prosecution History of the ’720 Patent .................................................... 9
`
`IV. The Watson Product ...................................................................................... 13
`
`V.
`
`The District Court’s Determination of Infringement .................................... 15
`
`A.
`
`Inner Lipophilic Matrix ....................................................................... 15
`
`B. Outer Hydrophilic Matrix .................................................................... 19
`
`C. Other Limitations ................................................................................ 20
`
`SUMMARY OF THE ARGUMENT ...................................................................... 21
`ARGUMENT ........................................................................................................... 23
`I.
`There Was No Clear and Unmistakable Disavowal of
`Magnesium Stearate or Conventional Lubricants as the “Inner
`Lipophilic Matrix” ......................................................................................... 23
`
`A.
`
`B.
`
`The Plain Meaning of Claim 1(a) Includes Magnesium
`Stearate ................................................................................................ 24
`
`There Was No Disavowal in the Prosecution History of
`the ’720 Patent ..................................................................................... 24
`
`
`
`– iii –
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`
`
`

`

`Case: 13-1409 Document: 47 Page: 5 Filed: 08/26/2013
`
`1.
`
`2.
`
`3.
`
`The Passage Cited by Watson Does Not Constitute
`a Disavowal ............................................................................... 25
`
`The Applicants Were Explaining What the Franco
`Reference Disclosed—Not Disavowing Claim
`Scope ......................................................................................... 27
`
`The Entire Prosecution History and Claim
`Amendments Contradict Watson’s Disavowal
`Argument .................................................................................. 28
`
`C. Watson’s Own Shifting Expressions of What Was
`Disavowed Belie Any Claim of “Clear and
`Unmistakable” Disavowal ................................................................... 29
`
`D.
`
`The Magnesium Stearate in the Granules of the Watson
`Product Is Not Used as a Conventional Lubricant .............................. 30
`
`II.
`
`The District Court Correctly Refused to Read a Non-Existent
`“Separate and Distinct” Limitation into the Claims ...................................... 32
`
`A.
`
`B.
`
`The Phrase “Separate and Distinct” Does Not Exist in the
`Intrinsic Record ................................................................................... 32
`
`The Prosecution History/Prior Art Does Not Impose a
`“Separate and Distinct” Limitation ..................................................... 33
`
`C. Watson’s Construction Is Untenable and Ambiguous ........................ 36
`
`III. The District Court Correctly Determined that the Watson
`Product Contains an “Inner Lipophilic Matrix” ............................................ 37
`
`A. Only the Magnesium Stearate in the Granules Constitutes
`the Inner Lipophilic Matrix ................................................................. 37
`
`B.
`
`The Claims Allow Other Excipients to Inhabit the Same
`Region Inhabited by the Inner and Outer Matrices ............................. 39
`
`1.
`
`2.
`
`Hydrophilic Excipients May Be Present in the
`Granules as “Other Excipients” ................................................ 39
`
`The Applicants Did Not Disavow SSG as an
`“Other Excipient” ...................................................................... 40
`
`
`
`– iv –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 6 Filed: 08/26/2013
`
`3. Watson’s “Other” Claim Construction Does Not
`Change the Outcome ................................................................. 41
`
`C.
`
`The “Other Excipients” Can Be Lipophilic and/or
`Hydrophilic .......................................................................................... 42
`
`D. Watson’s New Argument that the Matrices Must Have a
`Lipophilic or Hydrophilic “Nature” Is Contradicted by
`the Patent ............................................................................................. 43
`
`IV. The ’720 Patent Claims Are Valid and Satisfy 35 U.S.C. § 112 .................. 45
`
`A.
`
`The Written Description Requirement Is Satisfied ............................. 45
`
`1.
`
`2.
`
`The ’720 Specification Supports the Claims ............................ 45
`
`The Specification Describes So-Called “Mixed
`Matrices” ................................................................................... 47
`
`3. Methods of Making the Claimed Compositions
`Are Irrelevant to the Written Description
`Requirement .............................................................................. 49
`
`B.
`
`The Enablement Requirement Is Satisfied .......................................... 50
`
`1.
`
`2.
`
`3.
`
`4.
`
`The Patent Teaches How to Make Compositions of
`Claims 1 and 3 ........................................................................... 50
`
`Compositions Containing So-Called “Mixed
`Matrices” Are Enabled .............................................................. 52
`
`There is No Lack of Enablement with Respect to
`Magnesium Stearate or SSG ..................................................... 53
`
`The Way the Inner Lipophilic Matrix “Is Formed”
`Is Not Relevant to the Enablement of Composition
`Claims ....................................................................................... 54
`
`5. Watson Did Not Establish Undue Experimentation ................. 55
`
`CONCLUSION ........................................................................................................ 57
`PROOF OF SERVICE
`CERTIFICATE OF COMPLIANCE
`
`
`
`– v –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 7 Filed: 08/26/2013
`
`TABLE OF AUTHORITIES
`
`Cases
`Amgen Inc. v. Hoechst Marion Roussel, Inc.,
`314 F.3d 1313 (Fed. Cir. 2003) .....................................................................50
`
`Ariad Pharms., Inc. v. Eli Lilly & Co.,
`598 F.3d 1336 (Fed. Cir. 2010) (en banc) .............................................. 45, 49
`
`Baldwin Graphic Sys., Inc. v. Siebert, Inc.,
`512 F.3d 1338 (Fed. Cir. 2008) .............................................................. 31, 32
`
`Callicrate v. Wadsworth Mfg., Inc.,
`427 F.3d 1361 (Fed. Cir. 2005) .....................................................................52
`
`Canon Computer Sys., Inc. v. Nu-Kote Int’l, Inc.,
`134 F.3d 1085 (Fed. Cir. 1998) .....................................................................50
`
`Capon v. Eshhar,
`418 F.3d 1349 (Fed. Cir. 2005) .....................................................................49
`
`Cephalon, Inc. v. Watson Pharms., Inc.,
`707 F.3d 1330 (Fed. Cir. 2013) .................................................. 45, 50, 55, 56
`
`Colorado v. New Mexico,
`467 U.S. 310 (1984).......................................................................................45
`
`Conoco, Inc. v. Energy & Envtl. Int'l, L.C.,
`460 F.3d 1349 (Fed. Cir. 2006) .....................................................................40
`
`Crown Packaging Tech., Inc. v. Ball Metal Beverage Container
`Corp.,
`635 F.3d 1373 (Fed. Cir. 2011) .....................................................................50
`
`Digital-Vending Servs. v. Univ. of Phoenix,
`672 F.3d 1270 (Fed. Cir. 2012) .............................................................. 40, 43
`
`Hyatt v. Boone,
`146 F.3d 1348 (Fed. Cir. 1998) .....................................................................48
`
`Hybritech Inc. v. Monoclonal Antibodies, Inc.,
`802 F.2d 1367 (Fed. Cir. 1986) .....................................................................52
`
`
`
`– vi –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 8 Filed: 08/26/2013
`
`IMS Tech., Inc. v. Haas Automation, Inc.,
`206 F.3d 1422 (Fed. Cir. 2000) .....................................................................26
`
`In re Crish,
`393 F.3d 1253 (Fed. Cir. 2004) .....................................................................39
`
`In re Wands,
`858 F.2d 731 (Fed. Cir. 1988) .......................................................................56
`
`Inverness Med. Switz. GmbH v. Warner Lambert Co.,
`309 F.3d 1373 (Fed. Cir. 2002) .....................................................................28
`
`Invitrogen Corp. v. Clontech Labs., Inc.,
`429 F.3d 1052 (Fed. Cir. 2005). ....................................................... 51, 52, 54
`
`Liquid Dynamics Corp. v. Vaughan Co.,
`355 F.3d 1361 (Fed. Cir. 2004) .....................................................................37
`
`LizardTech., Inc. v. Earth Res. Mapping, Inc.,
`424 F.3d 1336 (Fed. Cir. 2005) .....................................................................45
`
`Mannesmann Demag Corp. v. Engineered Metal Prods. Co.,
`793 F.2d 1279 (Fed. Cir. 1986) .................................................................7, 38
`
`Microsoft Corp. v. i4i Ltd. P’ship,
`131 S. Ct. 2238 (2011) ...................................................................................45
`
`Norian Corp. v. Stryker Corp.,
`363 F.3d 1321 (Fed. Cir. 2004) .....................................................................38
`
`Northern Telecom Ltd. v. Samsung Elecs. Co.,
`215 F.3d 1281 (Fed. Cir. 2000) .............................................................. 26, 27
`
`Omega Eng’g., Inc. v. Raytek Corp.,
`334 F.3d 1314 (Fed. Cir. 2003) .....................................................................24
`
`Orthokinetics, Inc. v. Safety Travel Chairs, Inc.,
`806 F.2d 1565 (Fed. Cir. 1986) .....................................................................50
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) ........................................................ 24, 33, 39
`
`
`
`– vii –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 9 Filed: 08/26/2013
`
`Pozen Inc. v. Par Pharm., Inc.,
`696 F.3d 1151 (Fed. Cir. 2012) .....................................................................45
`
`PPG Indus., Inc. v. Guardian Indus., Corp.,
`75 F.3d 1558 (Fed.Cir.1996) .........................................................................55
`
`Research Corp. Techs., Inc. v. Microsoft Corp.,
`627 F.3d 859 (Fed. Cir. 2010) .......................................................................50
`
`Sandisk Corp. v. Memorex Prods., Inc.,
`415 F.3d 1278 (Fed. Cir. 2005) .............................................................. 25, 28
`
`Streck, Inc. v. Research & Diagnostics Sys., Inc.,
`665 F.3d 1269 (Fed. Cir. 2012) .....................................................................49
`
`Teleflex, Inc. v. Ficosa N. Am. Corp.,
`299 F.3d 1313 (Fed. Cir 2002) ......................................................................33
`
`United States v. Teletronics, Inc.,
`857 F.2d 778 (Fed. Cir. 1988) .......................................................................53
`
`Vitronics Corp. v. Conceptronic, Inc.,
`90 F.3d 1576 (Fed. Cir. 1996) .......................................................................43
`
`Statutes
`35 U.S.C. § 102 .......................................................................................................... 2
`
`35 U.S.C. § 103 .......................................................................................................... 2
`
`35 U.S.C. § 112 ....................................................................................... 2, 45, 48, 52
`
`35 U.S.C. § 282 ........................................................................................................45
`
`
`
`
`
`– viii –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 10 Filed: 08/26/2013
`
`GLOSSARY
`
`General
`
`’720 patent
`
`U.S. Patent No. 6,773,720, the patent-in-suit
`
`ANDA
`
`Br.
`
`FDA
`
`mesalamine
`
`NDA
`
`Orange Book
`
`SEM-EDX
`
`Shire
`
`SSG
`
`Watson
`
`Watson Product
`
`Abbreviated New Drug Application
`
`Watson’s Opening Appeal Brief
`
`U.S. Food and Drug Administration
`
`The active ingredient in the Watson Product, also known
`as 5-amino-salicylic acid or mesalazine
`
`New Drug Application, and in this case specifically
`New Drug Application No. 22-000
`
`FDA’s publication, “Approved Drug Products with
`Therapeutic Equivalence Evaluations”
`
`Scanning Electron Microscopy-Energy Dispersive X-
`Ray
`
`Plaintiffs-Appellees Shire Development LLC, Shire
`Pharmaceutical Development Inc., Cosmo Technologies
`Limited, and Nogra Pharma Limited (formerly known as
`Giuliani International Limited)
`
`sodium starch glycolate
`
`Defendant-Appellant Watson Pharmaceuticals, Inc.
`(now known as Actavis, Inc.), Watson Laboratories, Inc.
`- Florida, Watson Pharma, Inc. (now known as Actavis
`Pharma, Inc.), and Watson Laboratories, Inc.
`
`the generic mesalamine delayed-release tablets
`containing 1.2 g of mesalamine as the active ingredient
`that are the subject of Watson’s ANDA No. 203817
`
`
`
`
`– ix –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 11 Filed: 08/26/2013
`
`CLAIM CONSTRUCTION
`After extensive briefing and a Markman hearing on the merits (including
`
`testimony from Watson’s expert), the Court construed the disputed claim terms as
`
`follows:
`
`Disputed Claim Term
`“matrix”
`
`“inner lipophilic matrix”
`
`“outer hydrophilic matrix”
`
`“dispersed”
`
`“wherein the active ingredient
`is dispersed both in [said]
`lipophilic matrix and in the
`hydrophilic matrix”
`“consisting of substances
`selected from the group
`consisting of unsaturated
`and/or hydrogenated fatty acid,
`salts, esters or amides thereof,
`fatty acid mono-, di-, or
`triglycerids, waxes, ceramides,
`and cholesterol derivatives with
`melting points below 90º C”
`
`“selected from the group
`consisting of”
`
`“melting points”
`
`Construction
`a macroscopically homogeneous structure in all
`its volume
`a matrix including at least one lipophilic
`excipient, where the matrix is located within one
`or more other substances
`a matrix of at least one hydrophilic excipient,
`where the matrix is located outside the inner
`lipophilic matrix
`sufficiently mixed to incorporate one substance
`with another
`wherein mesalamine is sufficiently mixed to
`incorporate it within both the lipophilic matrix
`and the hydrophilic matrix
`
`containing one or more of the following
`substances, each having melting points below 90º
`C: unsaturated fatty acid, salt of an unsaturated
`fatty acid, ester of an unsaturated fatty acid,
`amide of an unsaturated fatty acid, hydrogenated
`fatty acid, salt of a hydrogenated fatty acid, ester
`of a hydrogenated fatty acid, amide of a
`hydrogenated fatty acid, fatty acid monoglycerid,
`fatty acid diglycerid, fatty acid triglycerid, wax,
`ceramide, cholesterol derivative
`an exclusionary term specifying that an element
`contains only what is expressly set forth in a
`recited list, but does not exclude substances
`unrelated to, or outside of the context of said
`element
`the range of temperatures at which a solid begins
`to change from solid to liquid
`
`
`
`– x –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 12 Filed: 08/26/2013
`
`JA7-8. Additional claim terms were agreed upon:
`
`Agreed Upon Claim Term
`“hydrophilic”
`“lipophilic”
`“controlled-release oral
`pharmaceutical compositions”
`
`JA8.
`
`Construction
`having an affinity to water
`poor affinity towards aqueous fluids
`an oral pharmaceutical composition whereby the
`dissolution of active ingredient is not immediate
`
`
`
`– xi –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 13 Filed: 08/26/2013
`
`STATEMENT OF RELATED CASES
`
`Under Federal Circuit Rules 28(a)(4) and 47.5, counsel for plaintiffs-
`
`appellees state: (a) no other appeal in or from the same civil action in the trial court
`
`was previously before this or any other appellate court; and (b) the title and
`
`number of any case known to counsel to be pending in this or any other court that
`
`will directly affect or be directly affected by this Court’s decision in this appeal
`
`are:
`
`1.
`
`2.
`
`3.
`
`Shire Development LLC, et al. v. Cadila Healthcare Ltd. (d/b/a Zydus
`Cadila), et al., No. 1:10-cv-00581-KAJ (D. Del.).
`
`Shire Development LLC, et al. v. Osmotica Kereskedelmi És Szolgáltató Kft
`et al., No. 1:12-cv-00904-AT (N.D. Ga.).
`
`Shire Development LLC, et al. v. Mylan Pharmaceuticals Inc., et al., No.
`8:12-cv-01190-JSM-AEP (M.D. Fla.).
`
`In addition, there is pending before this Court for en banc review Appeal No.
`
`2012-1014, Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., on appeal
`
`from the Northern District of Texas. While the parties and the patent at issue are
`
`not related, the current appeal may be affected by the outcome of the Lighting
`
`Ballast case to the extent the de novo standard for reviewing claim construction is
`
`changed.
`
`
`
`
`
`– xii –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 14 Filed: 08/26/2013
`
`STATEMENT OF THE ISSUES
`
`Was the district court correct in determining that:
`
`(1)
`
`given the vague prosecution history language used to characterize the
`
`prior art, there was no “clear and unmistakable” disavowal of
`
`magnesium stearate (or any lubricant) as an “inner lipophilic matrix;”
`
`(2)
`
`it would be improper to import a “separate and distinct” limitation
`
`into the claims, as regards the two matrices, where no such limitation
`
`exists anywhere in the intrinsic record;
`
`(3)
`
`the claims permit “other excipients” (including lipophilic and
`
`hydrophilic excipients) to inhabit the same region that the matrices
`
`inhabit, where the claims begin with a “comprising” transition and
`
`explicitly call for “optionally other excipients;” and
`
`(4) Watson failed in its burden to prove by clear and convincing evidence
`
`that the claims were invalid for lack of written description and/or
`
`enablement, where even Watson’s expert conceded that every element
`
`of the claims could be found in the specification and the specification
`
`enables the claims.
`
`
`
`– 1 –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 15 Filed: 08/26/2013
`
`
`
`STATEMENT OF THE CASE
`
`This is a patent litigation brought pursuant to the “Hatch-Waxman Act.”
`
`The ’720 patent is titled, “Mesalazine Controlled Release Oral Pharmaceutical
`
`Compositions,” and is listed in the Orange Book for Lialda®. Lialda® is used in the
`
`treatment of ulcerative colitis, an illness of the digestive tract. Plaintiffs,
`
`collectively, hold the rights to the ’720 patent and market Lialda®.
`
` Watson infringed the ’720 patent by filing an ANDA with the FDA seeking
`
`to market a generic version of Lialda® before the expiration of that patent.
`
`Shire sued Watson seeking a judgment of infringement and injunctive relief.
`
`JA100-119; JA162-181. Watson’s defenses and counterclaims sought a
`
`declaratory judgment of noninfringement and invalidity under 35 U.S.C. § 112.
`
`JA120-137; JA188-207. Watson has not asserted any claim of invalidity based
`
`upon the prior art, under either 35 U.S.C. § 102 or § 103.
`
`Both parties filed simultaneous opening claim construction briefs followed
`
`by responsive briefs. Judge Donald M. Middlebrooks subsequently held a
`
`Markman hearing, during which counsel for Shire and Watson presented argument
`
`for the better part of one day. JA1401-1576. Watson additionally offered the
`
`testimony of its expert, Dr. Arthur Kibbe, who was then cross-examined by Shire’s
`
`counsel. JA1474-1552. The district court issued a claim construction Order on
`
`
`
`– 2 –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 16 Filed: 08/26/2013
`
`January 17, 2013, rejecting the arguments that Watson now raises on appeal.
`
`JA4559-4574.
`
`Following the Markman hearing but before the district court’s claim
`
`construction Order, Watson moved for summary judgment of noninfringement,
`
`reiterating its claim construction arguments. Shire moved for summary judgment
`
`of no invalidity. Both motions were denied in a written opinion dated March 21,
`
`2013. JA6631-6647.
`
`The district court held a five-day bench trial beginning on April 8, 2013.
`
`Shire presented five live witnesses as well as deposition testimony from Watson’s
`
`own scientists. This evidence, and Shire’s extensive experimental test results
`
`regarding the Watson Product, proved infringement of the ’720 patent. Following
`
`post-trial briefing, the district court heard closing arguments. JA10002-10103.
`
`The district court issued its Opinion and Order on May 9, 2013, finding
`
`infringement and no invalidity and granting injunctive relief. JA3-33. A final
`
`judgment issued on May 9, 2013. JA1-2.
`
`Watson appeals a subset of the issues that were litigated. Significantly,
`
`Watson does not appeal any of the factual bases underlying the district court’s
`
`judgments of infringement and validity.
`
`
`
`– 3 –
`
`
`
`

`

`Case: 13-1409 Document: 47 Page: 17 Filed: 08/26/2013
`
`STATEMENT OF THE FACTS
`
`I.
`
`The Parties, the Disease, and the Drug
`
` Plaintiffs Shire Development LLC and Shire Pharmaceutical Development
`
`Inc. are specialty pharmaceutical companies that market innovative medicines for
`
`the treatment of life-altering illnesses. JA9049 (50:24-25). Shire Development
`
`LLC owns the NDA that covers the manufacture and sale of mesalamine delayed-
`
`release tablets, 1.2 g (sold under the trade name Lialda®). JA11005-11007. The
`
`’720 patent is assigned to Cosmo Technologies Ltd., and Giuliani International
`
`Ltd. (now Nogra Pharma Ltd.) holds an exclusive license to the ’720 patent. Shire
`
`Pharmaceutical Development Inc., in turn, holds an exclusive sublicense. JA34;
`
`JA162-181; JA11000.
`
`Lialda® is indicated for: (1) the induction of remission in adults with active,
`
`mild to moderate ulcerative colitis; and (2) the maintenance of remission of
`
`ulcerative colitis. JA11005-11007; JA11008-11012. Ulcerative colitis is a serious
`
`and potentially debilitating illness where the patient’s own immune system attacks
`
`and inflames the colonic mucosa (the lining of the colon). JA9052 (53:17-20).
`
`The condition ranges from mild to severe and may result in pain, bleeding ulcers
`
`within the colon, uncontrolled and/or repeated bowel movements, and sloughing
`
`off of bowel tissue. JA9052-9053 (53:21-54:12); JA9054-9056 (55:21-57:10).
`
`The disease is also associated with an increased risk of colon cancer. JA9053
`
`
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`– 4 –
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`Case: 13-1409 Document: 47 Page: 18 Filed: 08/26/2013
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`(54:6-12). Inflammation may occur anywhere throughout the entire length of the
`
`colon. JA09054 (55:6-7).
`
`Mesalamine is the active ingredient in Lialda®. JA9054 (55:10-20);
`
`JA9057-9058 (58:22-59:23). Mesalamine works through direct contact with the
`
`inflamed areas and not by systemic absorption throughout the bloodstream.
`
`JA9057 (58:17-24). In other words, it is “locally acting.”
`
`Delivering an effective amount of mesalamine to its site of action presents
`
`several formulation hurdles. Mesalamine must pass through the stomach and small
`
`intestine without being absorbed into the bloodstream.1
`
` JA9054 (55:15-20);
`
`JA9535 (194:10-23); JA9884 (29:12-15). In addition, it must be administered
`
`throughout the entire length of the colon. JA9054 (55:6-9); JA9535-9536 (194:24-
`
`195:6). Further complicating matters, a significant amount of mesalamine is
`
`required for therapeutic effectiveness. JA9057-9058 (58:25-59:16). With such a
`
`high percentage of the composition devoted to mesalamine, sustained release
`
`throughout the entire colon must be accomplished by a small quantity of
`
`excipients. The formulations claimed by the ’720 patent meet these challenges.
`
`
`1 Mesalamine absorbed systemically into the bloodstream serves no therapeutic
`purpose for ulcerative colitis. Any mesalamine absorbed in the stomach or small
`intestine will not reach the site of action in the colon. JA9057 (58:17-24).
`
`
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`– 5 –
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`Case: 13-1409 Document: 47 Page: 19 Filed: 08/26/2013
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`II. The ’720 Patent
`The ’720 patent issued on August 10, 2004. It contains four claims, with
`
`one independent claim. JA34-37; JA11001-11004.2 The claimed invention of the
`
`’720 patent is a pharmaceutical composition.3
`
`
`
`Claim 1 of the ’720 patent recites:
`
`1. Controlled-release oral pharmaceutical compositions
`containing as an active ingredient 5-amino-salicylic acid,
`comprising:
`
`a) an inner lipophilic matrix consisting of substances
`selected from the group consisting of unsaturated
`and/or hydrogenated fatty acid, salts, esters or
`amides
`thereof,
`fatty acid mono-, di- or
`triglycerids, waxes, ceramides, and cholesterol
`derivatives with melting points below 90° C., and
`wherein the active ingredient is dispersed both in
`said the lipophilic matrix and in the hydrophilic
`matrix;
`
`b) an outer hydrophilic matrix wherein the lipophilic
`matrix is dispersed, and said outer hydrophilic
`matrix consists of compounds selected from the
`group consisting of polymers or copolymers of
`acrylic or methacrylic acid, alkylvinyl polymers,
`hydroxyalkyl celluloses, carboxyalkyl celluloses,
`polysaccharides, dextrins, pectins, starches and
`derivatives, alginic acid, and natural or synthetic
`gums;
`
`c) optionally other excipients;
`
`wherein the active ingredient is present in an amount
`of 80 to 95% by weight of the total composition,
`
`2 Shire asserts only claims 1 and 3 in the present action.
`3 JA37 (col.6:6-43); JA11004; see also JA35 (col.2:36-44); JA11002.
`
`
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`– 6 –
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`Case: 13-1409 Document: 47 Page: 20 Filed: 08/26/2013
`
`and wherein the active ingredient is dispersed both
`in the lipophilic matrix and in the hydrophilic
`matrix.
`
`JA37 (col.6:7-43); JA11004. Claim 3 depends from claim 1 and recites
`
`compositions in the form of, inter alia, tablets and capsules. JA37 (col.6:35-36);
`
`JA11004.
`
`Claim 1 is structured as a “comprising” claim that has “consisting of”
`
`language nested therein. It is generally directed to controlled-release oral
`
`pharmaceutical compositions comprising: (a) an inner lipophilic matrix; (b) an
`
`outer hydrophilic matrix; and (c) optionally other excipients. The “consisting of”
`
`language specifically relates only to the respective matrices.4 Neither the
`
`specification nor claims restrict the types of “optional[] other excipients” or their
`
`location within the formulation.5
`
`
`
`The term “matrix” is described by the specification as “a macroscopically
`
`homogeneous structure in all its volume,” and was so construed by the district
`
`court.
`
`6
`
` Watson does not challenge this construction.
`
`An “inner lipophilic matrix” is a matrix (a macroscopically homogeneous
`
`structure in all its volume) including at least one lipophilic excipient, which is
`
`
`4 See Mannesmann Demag Corp. v. Engineered Metal Prods. Co., 793 F.2d 1279,
`1282 (Fed. Cir. 1986) (where “consisting of” appears in a claim clause—as
`opposed to the preamble—“[it] limits only the element set forth in [that] clause”).
`5 JA34 (Abstract); JA11001; JA35 (col.2:44); JA11002; JA37 (col.6:27); JA11004.
`6 JA36 (col.3:40-45); JA11003; JA4559-4574, esp. JA4564-4565.
`
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`Case: 13-1409 Document: 47 Page: 21 Filed: 08/26/2013
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`“inner” (the matrix is located within one or more other substances). JA4566-4567.
`
`The specification explains that the “inner lipophilic matrix”:
`
`consists of substances selected from unsaturated and/or
`hydrogenated fatty acids, salts, esters or amides thereof,
`fatty acids mono-, di- or triglycerids, waxes, ceramides,
`cholesterol derivatives or mixtures thereof having
`melting point within the range of 40 to 90° C.
`
`JA36 (col.3:1-5); JA11003. Illustrative Examples of such inner lipophilic matrices
`
`are provided.7
`
`
`
`Significantly, stearic acid (used in the Examples of the patent) and
`
`magnesium stearate (used in the Watson Product) are “chemical cousins,” and both
`
`are lubricants also known to slow drug release.
`
`8
`
`
`
`The “outer hydrophilic matrix” is a matrix including at least one hydrophilic
`
`excipient, which is “outer