Opposition Brief — Apotex Corp. v. Astrazeneca AB (No. 08-867)

VI y FEB 6 - 2009

OFFICE OF THE CLERK

Supreme Court. US.

FILED

No. 08-867

In the Supreme Court of the Ginited States

APOTEX CorpP., ef al.,

Petitioners,

Le

ASTRAZENECA AB, ef al.,

Respondents.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Federal Circuit

BRIEF IN OPPOSITION

JAY I. ALEXANDER

MILBANK, TWEED,

HADLEY & MCCLoy LLP

1850 K Street, N.W.

Washington, D.C. 20006

(202) 835-7500

ERROL B. TAYLOR

Counsel of Record

FREDRICK M. ZULLOW

JOHN M. GRIEM, JR.

MILBANK, TWEED,

HADLEY & McCCLoy LLP

One Chase Manhattan Plaza

New York, NY 10005

(212) 530-5000

Counsel for Respondents

TABLE OF CONTENTS

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Ce IR PEED skis cencnissiascrinentseensdeouetecersnenenienen 3

REASONS FOR DENYING THE WRIT...........c.scscsscssssersees 5

A. The Court of Appeals’ Precedent is Clear and

I a ciidiicssinns titigialicionstiapinnan emda ea tiaa aa 5

B. The Court of Appeals’ Rule is Consistent With

This Court’s Precedent And Long-Standing

FUR CN iii stssscssceescinicics inncscoeeeaccnsecarnenacaee 9

1. The Court of Appeals’ Rule Follows

Long-Standing Precedent and Policy. ...............00 9

2. Scott Paper Does Not Require a

CE Fis shstsia eastictacanacins Necetinnaaase nia 10

3. Petitioners’ Policy Arguments Are Also

PIE sis tassehsixienciebaldiaienisiaioaenaaanaan 13

C. This Case Does Not Provide a Suitable Vehicle

For Decision in Any Event Because Petitioners

Evidence Was Rejected Below...............ssscccssesesssscsssssseee 16

’

D. The Second Question Presented in the Petition

Turns Solely on Fact-Bound Determinations

Involving No Important Legal Issue. .......0... ee 17

EAT hice ciicstch scinsccoucuevenvasonssstinrcntennepieeaeaaain 21

ll

RULE 29.6 STATEMENT

Pursuant to “ule 29.6, Respondents state that the parent

corporations or publicly held companies holding 10% or

more of the stock of AstraZeneca AB, Aktiebolaget Hassle or

AstraZeneca LP are AstraZeneca PLC and Zeneca

Wilmington, Inc. and that the parent corporation or publicly

held company holding 10% or more of the stock of KBI-E,

Inc. and KBI, Inc. is Merck & Co., Inc.

i]

TABLE OF AUTHORITIES

CASES

American Hoist & Derrick Co. v. Sowa & Sons,

Fa ae Be Oe, GE, TI ikki sided 14,15

Astra Aktiebolag v. Andrx Pharm., Inc.,

222 F.SUO. 20 425 C.D. Y.. 2008) occcssesecsissosassevessssccens 19

Avia Group Int'l, Inc. v. L.A. Gear Calif, Inc.,

BSS Fe ESF F OW Cie, FOB iicecicciccnsscccsssinrepirsriorecenias 15

Baxter Healthcare Corp. v. Spectramed, Inc.,

MD FSG US TS CER, Ci, UD vn vse vvccesvscssensscctesessccesecctsne 5,6

Beckson Marine, Inc. v. NFM, Inc.,

Ie Fe re. Gis HE Bs vis siigccsitsandscassacdioavsannevarsees 10

Belcher v. Stengel,

Ee ee eS iii ilies esha ards 17

Blonder-Tongue Labs., Inc. v. Univ. of lilinois Foundation,

Ae Sr, i dications eens 10

Board of License Comm'rs of Town of Tiverton v. Pastore,

BP i Be NE os Mi iG ere 17

Bristol-Myers Squibb Co. v. Ben Venue Labs., Inc.,

ee Tt ee Cr AG PE ethics 10

Brown v. 3M,

Fe Pe Fe Or Gr. BE Btinvccececctsctsvsaceictesseaaes 10

iv

California v. San Pablo & Tulare R. Co.,

et sas istiti fickicaneacsivinrasieedsisooemascnen 17

Cardinal Chem. Co. v. Morton Int'l, Inc.,

ee eaicek reese ins ideorintcertatncdcioninnes 14

Dow Chem. Co. v. Astro-Valour, Inc.,

BE te 0 Ce. Gh BE vei cscs. cccnanseenecsccavdvcassveses 10

Fiskars, Inc. v. Hunt Mfg. Co.,

FF Pee EF 1 EE le BI sci nc ests gecsnsannshnresedennevancss 7,8

Harris Corp. v. IXYS Corp.,

EOF Bee UF TE. EAE, FOBT) ins esescnvcseoncsacsecersesneseresenpocs 7

In re Omeprazole Patent Litig.,

S6 Fad. Aas. FG CPO, Cit. FITS) 00. svccrnsccsscsscrsesssovesncene 19

Jones v. Hildebrandt,

EO «Ee kosher ei es Rne lan nerereE 17

Kim v. ConAgra Foods, Inc.,

BOS FS F388 Fr Cat Be inv incsieisesevesndsvscasctanesncesenacs 6

Lear Siegler, Inc. v. Aeroquip Corp.,

FFF et Ce, Fi ive vcccesicsnsiseincpsavnecivaticeenseens 15

Lewmar Marine, Inc. v. Barient, Inc.,

B27 F2eb TOGO, Ci, VIG bicesccccvcccccssnescsecscstnicscccrnasines 10

Lisle Corp. v. AJ Mfg. Co.,

BIS © Bd FIG CG, Cie, FS) nevi nsseccvesesicessassvsascesencsens 10

Markman y. Westview Instruments, Inc.,

BEF RF, Bee OE Bi iiettceioniiswasiin 1 & 7, Ft

Vv

Mycogen Plant Science, Inc. v. Monsanto Co.,

243 F.3d 1316 (Fed. Cir. 2001).......... nceeguteetecaeamaune 10

Nazomi Comms., Inc. v. ARM Holdings, Plc.,

EI te FRO POE, Car, FOG Pv cncsiccsnscccccevcccsccssernsetescosses 7

O’Reilly v. Morse,

Se i iniaccsusshackadanadenaes ctcimaniolaianiaaiaaee: 18

Peters v. Active Mfg. Co.,

ti CS WN riick ineiksieanssicseineiieciavsesnanpbees 1,9, 10, 12

Polaroid Corp. v. Eastman Kodak Co.,

FOE Be VASO LPOG. TP. TIGG) onivcsscnccssisscsvesenercecessscseoseses 10

Pope Manufacturing Co. v. Gormully,

A te MR IN ica seri ineatkos sus sissivarpsasevonesanepbopacsipbanés 9

Precision Instrument Mfg. Co. v. Automotive

Maintenance Machinery Co.,

sss s\ ca vaiiics aise ssaoussondicinarsoecdeioeenl 9

Rhine v. Casio, Inc.,

PO Oe CBOE CPOE. CW. TOGG) oii neces ccc csccsccccscncesecsesencs 7

Scott Paper Co. v. Marcalus Mfg. Co.,

Pe I EO aac stan ptececitncisnntesenisvasisignaioved passim

Sinclair & Carroll Co. v. Interchemical Corp.,

MT GN oases csssccccstsacecsisssnesesseinrcscasiarcocecee 14

SmithKline Beecham Corp. v. Apotex Corp.,

Oe Fe CO, SE, BP svinscsninecivicesecasscbnicsbesssesenees 6

Tate Access Floors, Inc. v. Interface

Architectural Res., Inc.,

BOO Pde ESOT POE. CW. 2OOZ) -inciiccnsccsiscctiavsensens 3,6, 7,33

V1

The Monrosa v. Carbon Black Export, Inc.,

Be te) WN as ties sctkncsesskccetesdasccecesesoassnonssonvenanssvcses 17

Warner-Jenkinson Co., Inc. v. Hilton-Davis Chem. Co.,

I gic cnucnabescersenbbierdetshanvasieacchsentcnins err

Westinghouse Co. v. Formica Co.,

PE IIE D ossiasnensenaccacevavaciintesssscenvésvacosvaseasscanevive 1]

STATUTES

i ia ain cin cecliapioanabdadantadenanbenkpeoain’ 10, 14

RULES

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INTRODUCTION

This case is not appropriate for review on either of the

questions presented. On the first question, the petition fails

to meet the criteria for review for at least three reasons:

First, the Court of Appeals has consistently applied a

methodical and rigorous comparison of the patent claim

against the prior art (to determine validity) and the accused

product (to determine infringement). Where the evidence

indeed shows that the accused product and the prior art are

the same, and the patent claims read on the prior art, then the

patent is invalid. In such a case, the accused infringer has a

complete defense to the action for infringement. The Court

of Appeals’ precedent traces back more than a century to the

rule that: “‘[t]hat which infringes, if later, would anticipate, i

earlier.” Peters v. Active Mfg. Co., 129 U.S. 530, 537 (1889).

The decision below follows this long line of precedent, which

necessarily and logically rejects the short-hand “practicing

the prior art” defense in favor of a claim-based analysis of

patent infringement and validity, an approach required not

only by Peters; but also by this Court’s more recent

precedent in Markman v. Westview Instruments, Inc., 517

U.S. 370 (1996).

Second, Petitioners’ assertion that the Court of Appeals’

rejection of a “practicing the prior art” defense is out of step

with this Court’s precedent is wrong. Petitioners’ reliance on

Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249 (1945)

is misplaced. The Court’s statement there that “[t}he

assignor has a complete defense to an action for infringement

where the alleged infringing device is that of an expired

patent,” id. at 258 (emphasis added), is no way inconsistent

with the Court of Appeals’ approach because invalidation of

a patent is just as “complete” a defense to an action for

infringement as is a judgment of non-infringement. Scott

Paper additionally does not bear the weight placed upon it by

2

Petitioners because it was a narrow decision addressing the

breadth of the doctrine of assignor estoppel. The case did not

purport to establish the broad rule that Petitioners now seek

to attribute to it.

Third, even if there were cause to consider the first

question presented, this case is an exceptionally poor vehicle

for doing so. The trial record is devoid of any evidence that

would support Petitioners’ “practicing the prior art” defense.

Thus, the outcome of this case can not be determined by the

Court’s answer to the first question. The district court

expressly rejected Petitioners’ proffered scientific evidence

_ purportedly demonstrating the structure of Petitioners’

accused product and the prior art as not based on proper,

representative samples. (Pet App. at 264a-265a). The Court

of Appeals did not disturb these fact-bound determinations

on appeal. (Pet. App. at 32a-35a). The question presented is

therefore moot in the context of this case.

Perhaps this last point explains why Petitioners did not

see fit to raise the issue in their petition for rehearing or

rehearing en banc at the Court of Appeals. Petitioners’

ambivalence, coupled with the unanimity of the Court of

Appeals in a long line of decisions on this point,

demonstrates further why the question presented is not

appropriate for this Court’s review.

As to the second question presented by Petitioners—i.e.,

whether Petitioners’ product suffered from a chemical

reaction that the patented invention was designed to

prevent—certiorari should be denied because this fact-bound

question was decided on the specific evidence in this case

and affirmed by the Court of Appeals. It presents no legal

question of general significance.

3

COUNTERSTATEMENT

Respondents’ claims of infringement of its '505 and '230

patents against Petitioners (Apotex) and other defendants

(Mylan/Esteve, Lek and Impax) were heard in a bench trial

over 42 days of extensive testimony by scientific experts and

fact witnesses. The district court’s opinion comprises

hundreds of pages of detailed analysis of the scientific

evidence. (Pet. App. at 45a-401a).

The trial court conducted a thorough claim construction

analysis, taking into account the prior art as well as the other

relevant evidence in accordance with well-established

practice. (Pet. App. at 110a-126a). The trial court then

carefully compared each element of the asserted patent

claims against the structure of Petitioners’ product, and

determined that Petitioners’ product literally infringed a

number of asserted claims. (Pet App. 108a-126a; 244a-

280a). The court similarly analyzed each of the other

defendants’ accused products, finding some to infringe and

some not to infringe, depending on whether or not they met

all of the claim elements. (Pet App. at 131la-244a; 280a-

312a).

The trial court further engaged in a detailed analysis of

the validity of the two patents. The court compared each

prior art reference asserted as anticipatcry by Petitioners and

the other defendants against the patent claims, and also

engaged in a detailed review of the prior art asserted tv make

the patent claims obvious.: (Pat App. at 338a-400a). The

court concluded that the defendants had not shown by clear

and convincing evidence that any of Respondents’ asserted

patent claims was invalid. (Pet. App. at 400a).

Petitioners did not raise a “practicing the prior art”

defense as a legal theory separate and apart frem the

4

conventional literal infringement and invalidity theones

adjudicated by the trial court, and the trial court did not

decide any such question. However, Petitioners did attempt

to adduce evidence, through the testimony of their experts

Dr. Signorino and Dr. Cima, consisting of test samples made

specifically for the litigation. Petitioners proffered these

samples to show the characteristics of Petitioners’ accused

product as well as of a product allegedly made according to

one of the prior art references (the EP '495 patent). The trial

court rejected both pieces of evidence. As to the samples

allegedly showing Petitioners’ product, the court found:

“This evidence is of little value, however, because Apotex

did not demonstrate that Dr. Signorino’s Reproduction

Pellets were representative of Apotex’s product.” (Pet App.

at 264a). As to the samples allegedly showing the prior art

product, the court found: “Furthermore, Plaintiffs presented

evidence that Dr. Signorino did not follow the teachings of

the ‘495 Patent, but instead modified certain ingredients and

procedures in creating his reproductions.” (Pet. App. at

265a). The Court of Appeals did not disturb either fact-

bound determination. (Pet. App. at 32a-3Sa).

In its brief on appeal, Petitioners did make mention of

their contention that their accused product “practiced the

prior art,” albeit each time without citation to specific

evidence in the record. However, Petitioners in urging

reversal dedicated the vast majority of their briefing to the

traditional argument that their product did not infringe

because it did not meet all of the elements of the patent

claims as properly construed. Insofar as the Court of

Appeals considered the Petitioners to have raised “‘practicing

the prior art” as a separate legal theory for reversal, the court

stated in two sentences:

Apotex also argues that its manufacturing process

merely practices the prior art, citing European

5

Patent Application No. EP 124,495 A2 (“the '495

European application”). It is well established,

however, that “practicing the prior art” is not a

defense to infringement. Tate Access Floors, Inc. v.

Interface Architectural Res., Inc., 279 F.3d 1357,

1365-69 (Fed. Cir. 2002); Baxter Healthcare Corp.

v. Spectramed, Inc., 49 F.3d 1575, 1583 (Fed. Cir.

1995). (Pe. App. at 32a).

This is the entire extent of the Court of Appeals’

pronouncement on the “practicing the prior art” issue.

”

Petitioners did not raise a “practicing the prior art

argument in their petition for rehearing or rehearing en banc

before the Court of Appeals. The question is squarely

presented, only for the first time now, in the current petition

for certiorari.

REASONS FOR DENYING THE WRIT

The Court of Appeals’ precedent is uniform and

consistent, and comports completely with this Court’s

precedent and the broad policy goals of the Patent Statute.

No confusion or lack of clarity exists as to the legal and

evidentiary requirements for a showing of patent

infringement. Because the petition points to no important,

unsettled legal issue, certiorari should be denied.

A. The Court of Appeals’ Precedent is Clear and

Uniform.

The Court of Appeals has consistently resisted calls by

litigants to create the same short-hand “practicing the pnor

art” defense to literal patent infringement urged by

Petitioners here. The Court of Appeals’ precedent is clear

and consistent and soundly grounded in precedent and policy.

6

The court first addressed the issue expressly in Baxter

Healthcare Corp. v. Spectramed, Inc., 49 ¥.3d 1575, 1583

(Fed. Cir. 1995). In rejecting a “practicing the prior art”

defense, the Court of Appeals explained that “{[}}itera)

infringement exists if each of the limitations of the asserted

claim(s) read on, that is, are found in the accused device.

Questions of obviousness in light of the prior art go to

validity of the claims, not to whether the accused device

infringes.”

In Tate Access Floors, Inc. v. Interface Arch. Res., Inc.,

279 F.3d 1357, 1365-69 (Fed. Cir. 2002), the court

elaborated on its Baxter decision and the rubric for

determining patent infringement under a “literal

infringement” theory——-which is ordinarily the primary theory

on which infringement is determined in patent actions. First,

the claims of the patent are construed and then the claims, as

construed, are compared to the accused device. /d. at 1366.

This is precisely the long-standing approach that this Court

re-affirmed most recently in Markman, 517 U.S. at 374

(“Victory in an infringement suit requires a finding that the

patent claim covers the alleged infringer’s product or

process, which in turn necessitates a determination of what

the words in the claim mean.”’) (internal quotations omitted).

Indeed, claim construction is the first step in the

determination of both infringement and validity and the

Court of Appeals has been careful to warm that the same

claim construction must be used for both purposes. See, e.g.,

Kim v. ConAgra Foods, Inc., 465 F.3d 1312, 1324 (Fed. Cir.

2006) (‘The same claim construction governs for validity

determinations as for infringement determinations.’’);

SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312,

1316 (Fed. Cir. 2006) (“claims must be construed the same

way for validity and for infringement’’).

7

Evidence of the prior art is sometimes useful in the claim

construction analysis because where the claim language is

ambiguous, the court should generally adopt a more narrow

construction that preserves the validity of the claim over the

prior art. /d. at 1367; see, e.g., Harris Corp. v. IXYS Corp.,

114 F.3d 1149, 1153 (Fed. Cir. 1997) (“claims should be

read in a way that avoids ensnaring the prior art if it is

possible to do so”). However, where no genuine ambiguity

exists, and the claim language clearly reads on the prior art,

the claim is invalid. /d. at 1367; Rhine v. Casio, Inc., 183

F.3d 1342, 1345 (Fed. Cir. 1999) (“if the only claim

construction that is consistent with the claim’s language and

the written description renders the claim invalid, then the

axiom {that claims should be construed ‘if possible’ to

sustain their validity] does not apply and the claim is simply

invalid”); Nazomi Comms., Inc. v. ARM Holdings, Ple., 403

F.3d 1364, 1368 (Fed. Cir. 2005) (same). As the Court of

Appeals summarized it in Tate Access: ‘Fairness and the

public notice function of the patent law require the courts to

afford patentees the full breadth of clear claim language, and

bind them to it as well.” 279 F.3d at 1367; Cf Markman,

517 U.S. at 390 (describing the importance to the public of

“certainty” and “uniformity” in the constrection of patent

claims).

Contrary to what is stated in the petition (Pet. at 14-15),

the Court of Appeals did not deviate from this approach in

Fiskars, Inc. v. Hunt Mfg. Co., 221 F.3d 1318 (Fed. Cir.

2000). Fiskars—like the precedent on which it relied-—was

an infringement case decided under the doctrine of

equivalents, rather than under a literal infringement theory.

See Warner-Jenkinson Co., Inc. v. Hilton-Davis Chem. Co.,

520 U.S. 17 (1997) (explaining nature and application of the

patent law doctrine of equivalents). The Court of Appeals in

Tate Access explained why Fiskars is inapposite in a literal

infringement case:

8

With respect to literal infringement, these cases

[including Fiskars] are inapposite. The doctrine of

equivalents expands the reach of claims beyond

their literal language. That this expansion is guided

and constrained by the prior art is no surprise, for

the doctrine of equivalents is an equitable doctrine

and it would not be equitable to allow a patentee to

claim a scope of equivalents encompassing material

that had been previously disclosed by someone else,

or that would have been obvious in light of others’

earlier disclosures. But this limit on the equitable

extension of literal language provides no warrant for

constricting literal language when it is clearly

claimed.

279 F.3d at 1367 (emphasis in original).

The case at bar was decided under a literal infringement

theory and not under the doctrine of equivalents. Thus,

Petitioners’ claim that the Court of Appeals in the case at bar

has “repudiated” a defense it had previously “affirmed” in

Fiskars is simply incorrect. (Pet at 15). The Court of

Appeals has never endorsed a “practicing the prior art”

defense in a literal infringement case. Rather, the court

requires a methodical analysis in which the claims are first

construed and then compared separately to the accused

device (to determine infringement) and the prior art (to

determine validity). That was the approach employed by the

lower courts in this case.

9

B. The Court of Appeals’ Rule is Consistent With

This Court’s Precedent And Long-Standing

Policy Determinations.

1. The Court of Appeals’ Rule Follows

Long-Standing Precedent and

Policy.

The Court of Appeals’ approach has roots that go back at

least to the 1889 Peters decision, a case ignored in the

petition. In Peters, the Court endorsed the view that:

Had the complainant’s invention been first in time

and patented, the Binghamton sheath would have

been an infringement; and, conversely, had the

Binghamton sheath been patented, the com-

plainant’s would have been an infringement. That

which infringes, if later, would anticipate, if earlier.

Peters, 129 U.S. at 537. It has thus long been clear that

where there is unity among what is patented (i.e., the

invention defined by the patent claims as_ properly

coinstrued), the accused infringing device and the prior art,

the result is that the patent is invalid. This result well serves

long-standing policies that encourage elimination of patents

that block the use of public domain technology See, e.g.,

Pope Manufacturing Co. v. Gormully, 144 U.S. 224, 234

(1892) (“It is as important to the public that competition

should not be repressed by worthless patents, as that the

patentee of a really valuable invention should be protected in

his monopoly ... .”) (internal quotations omitted); Precision

Instrument Mfg. Co. v. Automotive Maintenance Machinery

Co., 324 U.S. 806, 816 (1945) (“A patent by its very nature is

affected with a public interest. ... [It] is an exception to the

general rule against imonopolies and to the nght to access to a

free and open market.”); Blonder-Tongue Labs., Inc. v. Univ.

10

of Illinois Foundation, 402 U.S. 313, 342-346 (1971)

(examining the detrimental impact on the public from

multiple patent infringement suits if the patentee is allowed

to re-litigate validity of a patent once declared invalid).'

The Court of Appeals has consistently recognized the

applicability of the Peters rule in cases of asserted

similarities between the accused device and a prior art

device, but in each case has applied a rigorous and

methodical analysis in which the patent claims are first

construed and then compared separately to both the accused

infringement and the prior art. See, e.g., Polaroid Corp. v.

Eastman Kodak Co., 789 F.2d 1556, 1573 (Fed. Cir. 1986);

ewmar Marine, Inc. v. Barient, Inc., 827 F.2d 744, 747

(Fed. Cir. 1987); Mycogen Plant Science, Inc. v. Monsanto

Co., 243 F.3d 1316, 1324 (Fed. Cir. 2001); Bristol-Myers

Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368, 1378

(Fed. Cir. 2001); Brown v. 3M, 265 F.3d 1349, 1352-53 (Fed.

Cir. 2001); Dow Chem. Co. v. Astro-Valour, Inc., 267 F.3d

1334, 1339-40 (Fed. Cir. 2001); Beckson Marine, Inc. vy.

NFM, Inc., 292 F.3d 718, 726 (Fed. Cir. 2002); Lisle Corp. v.

AJ Mfg. Co., 398 F.3d 1306, 1315 (Fed. Cir. 2005). These

cases, in addition to those mentioned ante, uniformly

recognize the principle that if the patent claims cover the

prior art, they are invalid because one cannot claim patent

protection for what was already in the prior art.

2 Scott Paper Does Not Require a

Contrary Result.

Petitioners’ argue that this Court’s 1945 decision in Scott

Paper requires that the Court now establish a new defense to

literal patent infringement separate and apart from the

' Of course, a challenge to patent validity must be undertaken and

decided in light of the statutory presumption of validity in 35

U.S.C. §282, as discussed infra.

1]

traditional claim-based analysis. As mentioned, that

traditional analysis, which requires construction of the patent

claims as its first step, was most recently sanctioned in

Markman in 1996, a case that dealt extensively with the

proper methodology for construing patent claims.

In Scott Paper, the patentee acquired by assignment a

patent from the respondent and later asserted that the

respondent infringed the patent. The respondent defended on

the ground that its machine was a copy of what was

described in a different, expired, prior art patent. 326 US. at

251. The narrow question presented was whether the

assignor of the patent (the respondent) was “estopped by

virtue of his assignment to defend a suit for infringement of

the assigned patent on the ground that the alleged infringing

device is that of a prior art, expired patent.” /d. at 250. The

reference to estoppel was a reference to the rule established

in Westinghouse Co. v. Formica Co., 266 U.S. 342, 349

(1924) that ‘“‘an assignor of a patent rent is estopped to attack

the utility, novelty or validity of a patented invention which

he has assigned or granted as against any one claiming the

right under his assignment or grant. As to the rest of the

world, the patent may have no efficacy and create no right of

monopoly; but the assignor can not be heard to question the

right of his assignee to exclude him from its use.” (internal

citations omitted).

The Court held in Scott Paper that the doctrine of

assignor estoppel established in Westinghouse did not apply

“So as to penalize the use of the invention of an expired

patent.” 326 U.S. at 254. The Court concluded that “the

patent laws preclude the patentee of an expired patent and all

others including petitioner from recapturing any part of the

former patent munopoly; for those laws dedicate to all the

public the ideas and inventions embodied in an expired

patent.” /d. at 256. The Court went on: “It follows that the

12

patent laws preclude the petitioner assignee from invoking

the doctrine of estoppel, as a means of continuing as against

respondent, his assignor, the benefit of an expired monopoly,

and they preclude the assignor from estopping himself from

enjoying rights which it is the policy of the patent laws to

free from all restrictions.” Jd.

It is clear from the Court’s reasoning that it viewed the

patent laws as preventing one from validly patenting subject

matter that had been dedicated to the public in an expired

prior art patent, and that this rule trumped the assignor

estoppel! doctrine. This holding is in no way inconsistent

with the Court of Appeals decision below. The result of such

an attempt to claim prior art subject matter—under Peters,

Scott Paper or the Court of Appeals’ precedent—is that the

patent claim, if it is indeed correctly construed to encompass

prior art, is invalid. In this way, “[{t]he assignor has a

complete defense to an action for infringement where the

alleged infringing device is that of an expired patent.” Jd. at

258 (emphasis added).

Petitioners place heavy reliance on this last quotation (see

Pet. at 3, 13) and attempt to interpret the words as if the

Court had made a refinement to how a court must evaluate a

theory of infringement. This ignores the emphasized words

‘an action for infringement.” Read in context, it is clear

from this sentence that the Court was simply speaking of the

end result of the action, i.e., that the patentee cannot prevail.

Logically, of course, it is just as much a “complete defense to

an action for infringement” if the patent claims are invalid

than if the claims are not infringed. The rest of the opinion,

as explained above, makes clear that the reason the patentee

does not prevail is that his patent, if claiming prior art, is

invalid.

13

The Court of Appeals was presented with the same

argument based on Scott Paper in Tate Acces: and came to

the same conclusion. 279 F.3d at 1368-69. There, the Court

of Appeals recognized that “the Scott Paper rationale was

based on the premise that the assigned patent would be

invalid due to anticipation were it coextensive with the

expired prior art patent.” /d. at 1369. The Court of Appeals

went on to note that “(t]he statement [in Scott Paper] that, in

such circumstances, the assignor has a ‘complete defense to

an action for infringement’ must be understood in context.”

Id. (emphasis in original). It is telling that the court went on

to analyze infringement and validity the traditional way, by

construing the claims and comparing them to the accused

infringing device and the prior art. /d. at 1370-72. The

lower courts did no differently in the case at bar.

a Petitioners’ Policy Arguments Are

Also Flawed.

Petitioners’ argument ior the creation of a new patent law

“practicing the prior art” defense is thus ungrounded in

precedent. Petitioners’ policy-based arguments are equally

baseless. Petitioners urge that creating such a defense would

make it “unnecessary” for an accused infringer to prove

invalidity of the patent. According to Petitioners, this would

make for a more “balanced and fair’ process in which the

accused infringer can avoid having to carry its burden of

proof of invalidity by clear and convincing evidence, despite

the contrary requirement of the Patent Statute and precedent,

and also allow the patent owner to avoid an invalidity

challenge. (Pet. at 18-23). Petitioners’ argument suffers

from a number of flaws.’

* Petitioners even go so far as to state that “(t]he Federal Circuit

has effectively eliminated an accused infringer’s ability to prove

non-infringement of a valid patent.” (Pet. at 19). This is clearly

14

As discussed above, important policy considerations

dictate that the validity of patent rights should be adjudicated,

when called into question. See pp. 9-10, ante. Indeed, this

Court has stated that “‘of the two questions [validity and

infringement], validity has the greater public importance.’”

Cardinal Chem. Co. v. Morton Int'l, Inc., 508 U.S. 83, 100

(1993) (quoting Sinclair & Carroll Co. v. Interchemical

Corp., 325 U.S. 327, 330 (1945)) and has “emphasized the

importance to the public at large of resolving questions of

patent validity.” /d. However, in making this determination,

the Patent Statute requires that:

‘‘A patent shall be presumed valid. Each claim of a

patent ... shall be presumed valid independently of

the validity of other claims .... The burden of

establishing invalidity of a patent or any claim

thereof shall rest on the party asserting such

validity.

35 U.S.C. §282. The Court of Appeals has explained that the

presumption arises in part due to the deference owed to

patent examiners, who are employees of an administrative

agency (the U.S. Patent & Trademark Office) presumed to

have some expertise in the pertinent art and presumed to have

properly done their job in examining the patent. American

Hoist & Derrick Co. v. Sowa & Sons, 725 F.2d 1350, 1359

(Fed. Cir. 1984).

The court has further explained that the presumption

opcratcs only as a “procedural device”’ that “‘placcs on a party

asserting invalidity the initial burden of going forward to

wrong, as indicated by the plethora of Court of Appeals’ decisions

cited ante, all of which carefully evaluate validity and

infringement separately according to established norms under

which the patent claims are first cunstrued and then compared

separately to the accused and prior art devices.

15

establish a prima facie case” and “establishes that the burden

of persuasion on the issue of invalidity also rests throughout

the litigation on the party asserting invalidity.” Lear Siegler,

Inc. v. Aeroquip Corp., 733 F.2d 881, 885 (Fed. Cir. 1984).

“The presumption is one of law, not fact, and does not

constitute ‘evidence’ to be weighed against a challenger’s

evidence.” Avia Group Int'l, Inc. v. L.A. Gear Calif., Inc.,

853 F.2d 1557, 1562 (Fed. Cir. 1988). “In the end, the

question is whether a// of the evidence establishes that the

validity challenger so carried his burden as to have persuaded

the decisionmaker that the patent can no longer be accepted

as valid.” Lear Siegler, 733 F.2d at 885 (emr::csis in

original). As the Court of Appeals summarized it in

American Hoist:

To summarize on this point, §282 creates a

presumption that a patent is valid and imposes the

burden of proving invalidity on the attacker. That

burden is constant and never changes and is to

convince the court of invalidity by clear evidence.

Deference is due the Patent and Trademark Office

decision to issue the patent with respect to evidence

bearing on validity which it considered but no such

deference is due with respect to evidence it did not

consider. All evidence bearing on the validity issue,

whether considered by the PTO or not, is to be taken

into account by the tribunal in which validity is

attacked.

725 F.2d at 1360.

Petitioners offer no cogent argument for deviating from

established law and policy under which questions regarding a

patent’s validity should not be avoided, but adjudication of

validity should occur against the backdrop of the statutory

presumption of validity. Nothing is ‘unfair’ or “unbalanced”’

16

in requiring the courts and litigants to be mindful of the

procedural burdens imposed by the Patent Statute in the

course of adjudicating patent validity. But this procedural

device creates no difficulties that would justify a wholesale

abandonment of the Court of Appeals’ approach in favor of a

short-hand “practicing the prior art” defense. That approach

would, contrary to this Court’s precedent, avoid important

determinations of patent validity in cases where an accused

infringer asserts that the patentee is claiming prior art subject

matter that should be free for public use.

C. This Case Does Not Provide a Suitable Vehicle

For Decision in Any Event Because Petitioners’

Evidence Was Rejected Below.

Even if it were inclined to announce a new “practicing

the prior art” defense to infringement, the Court should not

do so in this case because a decision favorable to Petitioners

on that legal question cannot affect the outcome. The record

is devoid of any evidence, accepted by the courts below, that

would demonstrate that Petitioners actually were practicing a

process, or manufacturing a product, identical to the prior art.

It is telling that Petitioners never attempt to cite any finding

by the lower courts that would support their legal contention,

and indeed, no such finding exists.

In fact, the district court flatly rejected the Petitioners’

proffered evidence purportedly showing the physical

characteristics of its accused product and a product allegedly

made according to the prior art. Specifically, the district

court found that test samples allegedly showing Petitioners’

product had “little value” because Petitioners did not

demonstrate that the samples were representative of

Petitioners’ product. (Pet App. at 264a). The district court

also found that test samples allegedly representing the prior

art did not actually follow the teachings of the prior art. (Pet.

17

App. at 265a). The Court of Appeals did not disturb either

fact-bound determination. (Pet. App. at 32a-35a).

“The court is not empowered to decide moot questions or

abstract propositions, or to declare ... principles or rules of

law which cannot affect the result as to the thing in issue in

the case before it.” California v. San Pablo & Tulare R. Co.,

149 U.S. 308, 314 (1893). Where it is apparent from the

factual record that a decision on the question presented could

not affect concrete rights of the litigants before the Court, the

Court has routinely declined to exercise its certiorari

jurisdiction. See, e.g., Board of License Comm'rs of Town of

Tiverton v. Pastore, 469 U.S. 238, 239-40 (1985); Jones v.

Hildebrandt, 432 U.S. 183, 187 (1977); Belcher v. Stengel,

429 U.S. 118, 119-20 (1976); The Monrosa v. Carbon Black

Export, Inc., 359 U.S. 180, 183-84 (1959),

Given the state of this record, even were the Court to

grant the petition and announce a new defense to patent

infringement based on “practicing the prior art” as Petitioners

have requested, it could not possibly benefit Petitioners,

whose evidence on this point has already been found fatally

deficient. No ruling by this Court could remedy this defect.

The Court should not therefore use this case as a vehicle to

take up the moot question as to whether to create a new

defense to patent infringement.

D. The Second Question Presented in the Petition

Turns Solely on Fact-Bound Determinations

Involving No Important Legal Issue.

Petitioners’ second question—“[w]jhether an accused

infringer can be liable if the invention involves a feature

designed to prevent a naturally occurring chemical reaction

when the accused product contains that feature only as a

result of the natural chemical reaction the invention is

18

designed to prevent”—1s so highly dependent on the specific

facts of a given case as to present no important legal question

of general consequence. Resolution of the issue in a given

case would require factual findings as to the intended

purpose of the invention, the scope of the patent disclosure,

and the physical and chemical processes occurring in

connection with the accused product, among other fact-bound

questions. To those facts as found, a court would have to

apply the legal construction of the claims of the particular

patent-in-suit to determine infringement and validity. It is

not apparent how any legal rule of general application could

be fashioned that would both advance the patent system and

lead to a just result in all cases.

The legal application of construed patent claims to facts

involving the patented invention and accused product by the

lower courts in the case sub judice is in no way inconsistent

with the holding of O'Reilly v. Morse, 56 U.S. 62 (1853), the

authority on which Petitioners rely. In O'Reilly, the Court

rejected as invalid the attempt to claim “the use of the motive

power of the electric or galvanic current, which | call electro-

magnetism, however developed, for making or printing

intelligible characters, letters, or signs, at any distances”

because to sustain such a claim would foreclose al! possible

improvements in telecommunications technology and thus

the claim was deemed “too broad, and not warranted by law.”

Id. at 113. However, the Court allowed the patentee to

validly claim his invention tn more concrete terms in seven

other claims. /d. at 85-86, 112. As is readily apparent in this

case, Respondent’s claims are to a concrete and specific

pharmaceutical product having certain coating layers and

specific ingredients. These claims are not so broadly drawn

that it can plausibly be argued that they encompass a law of

nature or natural phenomenon. (See -Pet. App. at 4a-Sa

(quoting claims of '505 and '230 patents)). No inconsistency

19

therefore exists between this case and the precedent on which

Petitioners rely.

Petitioners’ real quarrel is with the district court’s

construction of the specific claim element “inert subcoating

... disposed on said core region” which the district court

identified as the issue on which Petitioners’ infringement

depended. (Pet. App. at 250a). In making this

determination, the district court adopted its previous

construction of this claim element (which appears in both the

'505 and '230 patents) that did not require that the inert

subcoating be formed in any particular manner. (Pet. App.

at 25la). The district court had first made this claim

construction during litigation involving the First Wave

defendants. Astra Aktiebolag v. Andrx Pharm., Inc., 222

F.Supp.2d 423, 464, 468-75 (S.D.N.Y. 2002). The Court of

Appeals had affirmed. /mn re Omeprazole Patent Litig., 84

Fed.Appx. 76 (Fed. Cir. 2003). After construing this claim

element, the district court conducted a detailed review of the

scientific evidence to determine whether Petitioners’ accused

product contained an inert subcoating and whether such a

coating met the claim element. (Pet. App. at 251a-275a).

Whether or not a discrepancy exists between what

Petitioners allege was the “purpose” of the invention as

stated in the written description of the patents-in-suit and the

district court’s construction of the “inert subcoating” claim

element was fully explored at the Court of Appeals. That

court explained:

We rejected that argument in the appeal from the

district court’s first wave trial based on our

conclusion that the phrase ‘“‘|djisposed on’ does not

specify any method or structure involved in

application of the subcoating.”” 84 Fed. Appx. 76,

20

80 (Fed. Cir. 2003). We reject that argument in this

appeal for the same reason.

(Pet App. at 31a).

Put simply, both the district court and the Court of

Appeals have construed the specific patent claims at issue in

this case in light of all the relevant evidence and concluded

that the factual question as to how the subcoating is formed ts

legally irrelevant to the question of whether the claim

element is met for purposes of infringement. Whether or not

the accused product contains a naturally occurring

subcoating, as urged by Petitioners, is not germane to the

infringement of these two particular patents.

The issue raised in the second question is thus

inextricably intertwined with the particular claim language

and disclosure of the '505 and '230 patents-in-suit in this

case. The Court of Appeals’ decision establishes no general

rule of law that would govern the interpretation or

application of patent claims in any other case not involving

these patents. The court’s decision in no way establishes any

rule of law that allows patenting of “a law of nature or a

natural phenomenon” as alleged in the petition. (Pet. at 11).

The Court of Appeals, like the district court, did nothing

more than analyze the written description and claim language

of these two patents and reached the conclusion that the

claim language does not limit the invention to the method by

which the subcoating is formed.

Rule 10 states: “A petition for a writ of certiorari is

rarcly granted when the asserted error consists of erroneous

factual findings or the misapplication of a properly stated

rule of law.” Sup. Ct. R. 10. Petitioners’ second question

presents nothing more than an assertion that the claim

construction reached by the district court and the Court of

21

Appeals was wrong, as was the application of that claim

construction to the particular products in issue in this case.

This is not the type of question that the rules contemplate as

suitable for review on certiorari.

CONCLUSION

For the foregoing reasons, the petition should be denied.

Respectfully submitted,

ERROL B. TAYLOR

Counsel of Record

FREDRICK M. ZULLOW

JOHN M. GRIEM, JR.

MILBANK, TWEED,

HADLEY & MCCLoy LLP

One Chase Manhattan Plaza

New York, NY 10005

(212) 530-5000

JAY I. ALEXANDER

MILBANK, TWEED,

HADLEY & McCCLoy LLP

1850 K Street, N.W.

Washington, D.C. 20006

(202) 835-7500

Counsel for Respondents