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Takeda Pharmaceutical Co., Ltd. v. Zydus Pharmaceutical USA, Inc.

United States Court of Appeals, Federal Circuit

February 20, 2014

TAKEDA PHARMACEUTICAL COMPANY LIMITED, TAKEDA PHARMACEUTICALS NORTH AMERICA, INC., TAKEDA PHARMACEUTICALS, LLC, TAKEDA PHARMACEUTICALS AMERICA, INC., AND ETHYPHARM, S.A., Plaintiffs-Appellees,
v.
ZYDUS PHARMACEUTICALS USA, INC. AND CADILA HEALTHCARE LIMITED, Defendants-Appellants

Page 1360

Appeal from the United States District Court for the District of New Jersey in No. 10-CV-1723, Judge Joel A. Pisano.

ARLENE L. CHOW, Hogan Lovells U.S. LLP, of New York, New York, argued for plaintiffs-appellees. With her on the brief were ERIC J. LOBENFELD of New York, New York; CATHERINE E. STETSON and FREDERICK LIU, of Washington, DC. Of counsel was PHILIPPE YOLAND RIESEN, of Tokyo, Japan.

STEVEN J. MOORE, Kelley Drye & Warren, LLP, of Stamford, Connecticut, argued for defendants-appellants. With him on the brief was JAMES E. NEALON.

Before PROST, PLAGER, and CHEN, Circuit Judges.

OPINION

Page 1361

Prost, Circuit Judge.

Zydus Pharmaceuticals USA, Inc. and Cadila Healthcare Limited (" appellants" or " Zydus" ) appeal from a final judgment of the U.S. District Court for the District of New Jersey finding that appellants had infringed claim 1 of U.S. Patent No. 6,328,994 (" '994 patent" ) and had failed to establish that it was invalid. For the reasons stated below, we reverse the district court's finding of infringement, but affirm its ruling on invalidity.

Background

Takeda Pharmaceutical Company Limited, Takeda Pharmaceuticals North America, Inc., Takeda Pharmaceuticals, LLC, Takeda Pharmaceuticals America, Inc., and Ethypharm, S.A. (" appellees" or " Takeda" ) own patents that claim the formulation for the brand-name drug Prevacid® SoluTabTM. Prevacid® SoluTabTM contains the active ingredient lansoprazole, which is a proton pump inhibitor used to treat gastroesophageal reflux disease, or acid reflux. It is the only proton pump inhibitor available as an orally disintegrable tablet. A patient taking Prevacid® SoluTabTM simply allows the tablet to disintegrate in his or her mouth, leaving

Page 1362

behind thousands of granules which the patient then swallows. The stated objective of the '994 patent is that the formulation contains granules small enough to avoid a feeling of roughness in the patient's mouth upon disintegration.

In 2010, Zydus filed an abbreviated new drug application (" ANDA" ) with the Food and Drug Administration, seeking to manufacture a generic version of Prevacid® SoluTabTM. Takeda then filed suit, alleging that Zydus's ANDA product infringed multiple claims of several patents. Only claim 1 of the '994 patent remains at issue. Zydus counterclaimed, alleging that claim 1 was invalid for failure to comply with the requirements of 35 U.S.C. § 112.

Claim 1 recites:

An orally disintegrable tablet which comprises (i) fine granules having an average particle diameter of 400 µ m or less, which fine granules comprise a composition coated by an enteric coating layer comprising a first component which is an enteric coating agent and a second component which is a sustained-release agent, said composition having 10 weight % or more of an acid-labile physiologically active substrate that is lansoprazole and (ii) an additive wherein said tablet having a hardness strength of about 1 to about 20 kg, is orally disintegrable.

'994 patent col. 37 ll. 43-53. The district court held a claim construction hearing, at which it construed the claim term " fine granules having an average particle diameter of 400 µ m or less." Takeda argued that the term should be construed to include a deviation of ± 10%, because it is " universally accepted" that there is a 10% standard of error for particle size measurements. J.A. 154. Zydus, on the other hand, argued that the term should be construed as " precisely 400 µ m." J.A. 496. The district court agreed with Takeda, and construed the term to mean " fine granules up to and including the enteric coating layer having an average particle diameter of 400 µ m (± 10%) or less." Takeda Pharm. Co. v. Zydus Pharms. USA, Inc., No. 10-1723, 2011 WL 4736306, at *3-4 (D.N.J. Oct. 5, 2011).

The issue of infringement turned on how particle size was measured. During the manufacturing process, individual cores of lansoprazole are enteric coated using a fluid-bed coating process. Inevitably, that process results in a certain portion of the coated cores becoming fused together. These fused multi-cored granules are known as " hard agglomerates."

Takeda argued that the average particle diameter should be determined by measuring each individual core, regardless of whether they had fused together into a hard agglomerate. Taking that measurement requires " virtual dissection" of hard agglomerates, meaning drawing an artificial line between the two fused cores such that the software will treat them separately for measurement purposes. Obviously, artificially dividing large hard agglomerates into several smaller granules for measurement purposes lowers the average particle size of a sample, making it more likely to infringe claim 1 of the '994 patent. Zydus argued that, to the contrary, because the specification describes measuring particle size after the coating process and says nothing about deagglomeration, it by definition includes hard agglomerates in the measurement of average particle diameter. In support of its position, Zydus pointed out that the actual size of the fused particles is what is relevant to how the granules feel in the patient's mouth,

Page 1363

regardless of the size of the smaller fused cores that make up a hard agglomerate. Under the district court's claim construction, where the maximum average particle size is 440 µ m, Zydus's ANDA product would infringe claim 1 of the '994 patent if hard agglomerates were virtually dissected prior to measurement, but would not infringe if hard agglomerates were included in the measurement.

After a bench trial, the district court agreed with Takeda and found that the '994 patent requires measuring the average diameter of each core, regardless of how many cores are in a given hard agglomerate. Takeda Pharm. Co., Ltd. v. Zydus Pharms. USA Inc., No. 10-1723, slip op. at 12-13 (D.N.J. May 7, 2013) (" Opinion " ). Based on that finding, the district court determined that Zydus's ANDA product infringed claim 1 of the '994 patent. Id. at 19-21. The district court further concluded that Zydus had failed to establish by clear and convincing evidence that claim 1 was invalid. Id. at 25-42. The court then entered an injunction preventing Zydus from manufacturing or selling its ANDA product until the expiration of the '994 patent. Id. at 43-46. Zydus appealed all of the district court's rulings.

We have jurisdiction under 28 U.S.C. § 1295(a)(1).

Analysis

I. Claim Construction


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