In 2001, AstraZeneca filed suit in the US against against several pharmaceutical companies that were seeking permission from the Food and Drug Administration (FDA) to market generic versions of Prilosec, Astra’s gastric acid inhibiting drug, for infringement of a patent directed to a process for making an omeprazole formulation.

Andrx filed counterclaims of non-infringement, invalidity and unenforceability for inequitable conduct during prosecution of the ‘281 patent. Andrx also asserted that the process patent as well as two formulation patents, U.S. Patent Nos. 4,786,505 (the ’505 patent) and 4,853,230 (the ’230 patent), were unenforceable for alleged litigation misconduct by AstraZeneca.

The matter was tried in the U.S. District Court for the Southern District of New York along with the consolidated claims of three other ANDA applicants. In October 2002, the District Court entered an order and an opinion finding that Astra’s ‘505 and ‘230 patents are valid and that the generic versions of Prilosec developed by Andrx infringe those patents. On December 11, 2003, the Federal Circuit Court of Appeals affirmed the lower court’s opinion that Astra’s patents are valid and infringed by the Andrx product. (Omeprazole II).

This appeal involves Phases II and IV of the same litigation. In Re Omeprazole Patent Litigation, United States Court of Appeals for the Federal Circuit, Nos. 04-1562, -1563, -1589.

In May 2004, the District Court ruled that claims 1, 2, 3, 7, 9, 16, and 20-21 of Astra Aktiebolag’s United States Patent No. 6,013,281 (the ’281 patent) were literally infringed, but also ruled that the ‘281 patent was invalid due to prior art and obviousness.. The court dismissed Andrx’s litigation misconduct and other counterclaims and affirmative defences, leaving intact the court’s October 2002 decision finding the ‘230 and ‘505 patents not invalid and infringed by Andrx. The October 2002 decision was affirmed in all respects on appeal in December 2003. The court entered final judgement regarding the ‘281 patent in July 2004. Unlike the patents that claimed a formulation in Phases I and III, the ’281 patent claims only a process.

Omeprazole is the generic name for Prilosec®. Omeprazole inhibits the production of gastric acid when, after absorption, Omeprazole transforms into its active species in the parietal cells (acid-producing cells in the stomach lining) and inhibits acid production. However, omeprazole degrades in acidic and neutral environments. Therefore, it must be protected from contact with gastric juices while traveling to the parietal cells. Thus, an omeprazole formulation needs a protective enteric coating around the core containing the active alkaline reacting compound (ARC) and a separating layer between that core and the coating.

The ’281 patent recites a method for making this pharmaceutical formulation. The pharmaceutical formulation is composed of a core that contains a proton pump inhibitor like omeprazole to decrease gastric acid secretion, a water soluble separating layer, and an enteric coating layer. Specifically, the ’281 patent recites:

1. A process for preparing an oral pharmaceutical formulation comprising the steps of: forming a core material comprising a proton pump inhibitor and at least one alkaline reacting compound [ARC], wherein the concentration of the alkaline reacting compound is about 0.1 mmol/g dry ingredients in the alkaline containing part of the core material, and applying an enteric coating polymer layer so as to surround the core material thereby forming in situ a separating layer as a water soluble salt product between the alkaline compound and the enteric coating polymer.

The district court found that Andrx literally infringed Astra’s ’281 patent. Omeprazole III, slip op. at 14-18. Indeed, Andrx admitted that its process met all but one portion of claim 1 of the ’281 patent — the portion requiring in situ formation of a separating layer but disagreed with the district court’s construction of “a water soluble salt” in claim 1.

Andrx argued that the district court erred in finding that its product infringes the ’281 patent because it does not have a water soluble separating layer, but instead a layer composed of “almost 50% talc.” According to Andrx, its separating layer with talc is not water soluble, but only disintegrates in water. Andrx claimed that disintegration is not soluble.

The district court found that a Korean patent application anticipated claims 1, 2, 3, 7, 16, and 20-21 of the ’281 patent since the Korean patent application disclosed the exact proportions of the principal ingredients in the ’281 patent’s example 1 and the only ’281 “limitation” missing from the Korean application is the language “thereby forming in situ a separating layer.”

Anticipation requires disclosure of each and every claim limitation in a single prior art reference, either explicitly or inherently and the Korean patent application does not explicitly recite this feature. Therefore, anticipation turns on whether the Korean application inherently disclosed “in situ” formation.

Finding the claim limitation inherent in the earlier disclosure, Judge Rader stated that:

As noted, a prior art reference without express reference to a claim limitation may nonetheless anticipate by inherency. See In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 2002). Moreover, “[i]nherency is not necessarily coterminous with knowledge of those of ordinary skill in the art. Artisans of ordinary skill may not recognize the inherent characteristics or functioning of the prior art.” Id.; Schering Corp. v. Geneva Pharms., 339 F.3d 1373, 1377 (Fed. Cir. 2003) (rejecting the contention that inherent anticipation requires recognition in the prior art). Though Drs. Lövgren and Lundberg may not have recognized that a characteristic of CKD’s Method A ingredients, disclosed in the CKD Patent Application, resulted in an in situ formation of a separating layer, the in situ formation was inherent.

The record shows formation of the in situ separating layer in the prior art even though that process was not recognized at the time. The new realization alone does not render that necessary prior art patentable. … Thus, the trial court correctly found inherent anticipation.

Judge Newman, concurring in part, dissenting in part stated that”

Anticipation requires that “each element of the claim at issue is found, either expressly described or under the principles of inherency, in a single prior art reference or that the claimed invention was previously known or embodied in a single prior art device or practice.” Kalman v. Kimberly-Clark Corp., 713 F.2d 760, 771 (Fed. Cir. 1983).

The principle of “inherency,” in the law of anticipation, requires that any information missing from the reference would nonetheless be known to be present in the subject matter of the reference, when viewed by persons experienced in the field of the invention. However, “anticipation by inherent disclosure is appropriate only when the reference discloses prior art that must necessarily include the unstated limitation, [or the reference] cannot inherently anticipate the claims.” Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d 1364, 1373 (Fed. Cir. 2002) (emphasis in original); Hitzeman v. Rutter, 243 F.3d 1345, 1355 (Fed. Cir. 2001) (“consistent with the law of anticipation, an inherent property must necessarily be present in the invention described by the count, and it must be so recognized by persons of ordinary skill in the art”); In re Robertson, 169 F.3d 743, 745 (Fed. Cir. 1999) (that a feature in the prior art reference “could” operate as claimed does not establish inherency).

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