Pfizer learned the hard way not to take dependent claim form for granted. The Court of Appeals for the Federal Circuit, in Pfizer et al. v. Ranbaxy Laboratories (06-1179), held that a violation of § 112, ¶ 4 renders a patent invalid even if it would have been merely objected to (and not rejected) by the U.S. Patent Office.

Earlier, a Delaware District Court ruled that Pfizer can exclusively sell Lipitor until 2011 after finding that Ranbaxy Laboratories Ltd.’s generic version of Lipitor (atorvastatin) infringes on two Pfizer patents. Ranbaxy failed to prove Pfizer’s patents were invalid or unenforceable so Pfizer’s patents would remain in force until 2010 and 2011. Pfizer owns U.S. Patent Nos. 4,681,893 (‘893 patent) and 5,273,995 (‘995 patent) which cover Lipitor. Ranbaxy notified Pfizer that it had filed an abbreviated new drug application seeking to sell a generic version of the drug, and a paragraph IV certification, asserting that its proposed generic product would not infringe either the ‘893 patent or the ‘995 patent. Pfizer then filed a patent infringement suit against Ranbaxy in the Delaware federal court.

Ranbaxy appealed the rulings by the district court: (1) that claim 1 of the ‘893 patent was infringed; (2) that the ‘893 patent term extension was not proven invalid; (3) that claim 6 of the ‘995 patent was infringed; (4) that claim 6 was not proven invalid for failure to comply with § 112, ¶ 4; as anticipated or obvious; or for non-statutory double patenting; and (5) that the ‘995 patent was not proven unenforceable due to inequitable conduct.

The Federal Circuit agreed with the district court’s claim construction of claim 1 of the ‘893 patent, we affirm the finding of infringement and also affirmed the ruling that the ‘893 patent term extension was not invalid. However, with respect to the ‘995 patent, the court reversed on the question of invalidity under § 112, ¶ 4.

As for the ‘995 patent, Pfizer only asserted dependent claim 6. The relevant claims are:

1. Recites the following compounds: (1) atorvastatin acid; or (2) atorvastatin lactone; or (3) pharmaceutically acceptable salts thereof.

2. A compound of claim 1 which is atorvastatin acid.

6. The hemicalcium salt of the compound of claim 2.

With respect to the ‘995 patent, the court focused on the question of validity under 35 U.S.C. § 112, ¶ 4, which provides:

Subject to the following paragraph [concerning multiple dependent claims], a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.

However, Pfizer only asserted dependent claim 6 of the ‘995 patent. Ranbaxy asserted that the district court erred in refusing to invalidate claim 6, even though it does not incorporate by reference all the limitations of the claim to which it refers and then specify a further limitation of the subject matter, as required by § 112, ¶ 4. In other words, claim 6 does not narrow the scope of claim 2; instead, the two claims deal with non-overlapping subject matter.

The district court explicitly recognized that “there may be a technical problem in the drafting of claim 6.” Yet, it declined to find that this drafting problem is sufficient to render the claim invalid if the claim is read consistently with its meaning to those skilled in the art because it was unable to find any Federal Circuit precedent applying § 112, ¶ 4 to invalidate a patent.

The district court understood § 112, ¶ 4 “to be limited to matters of form, rather than matters of substance,” noting that the PTO treats a claim that fails to comply with this provision “as a matter to be addressed through an objection” rather than rejected as unpatentable. While the district court found that claim 6 was unambiguous to the extent that the patentee intended to claim the hemicalcium salt of atorvastatin acid, the court recognized that “[a]s a matter of standard chemical nomenclature, chemists typically refer to a salt of an acid, even though they are aware that the complete acid is technically no longer present in the salt form.”

Unfortunately, the Court of Appeals pointed to Curtiss-Wright Flow Control Corp., which suggests that a violation of § 112, ¶ 4 renders a patent invalid just as violations of other paragraphs of § 112 would in holding that “reading an additional limitation from a dependent claim into an independent claim would not only make that additional limitation superfluous, it might render the dependent claim invalid” for failing to add a limitation to those recited in the independent claim, as required by 35 U.S.C. § 112, ¶ 4. Since claim 6 could have been properly drafted either as dependent from claim 1 or as an independent claim – i.e., “the hemicalcium salt of atorvastatin acid” the Federal Circuit said it “should not rewrite claims to preserve validity.”

The court then noted that claim 6 fails to “specify a further limitation of the subject matter” of the claim to which it refers because it is completely outside the scope of claim 2. The court held that it must reverse the district court and hold claim 6 invalid for failure to comply with § 112, ¶ 4. The Federal Circuit then affirmed-in-part, reversed-in-part and remanded so the district court can modify the permanent injunction in a manner consistent with this opinion.

This means that Pfizer has patent protection on the main Lipitor drug until March of 2010 but the loss of the second Pfizer patent, which would have protected the drug until June of 2011, eliminates 15 months of patent protection for a drug with sales of $12.2 billion in 2005. If Pfizer can’t find a way to reverse the decision, it stands to lose billions of dollars in potential sales.

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