IP News

Federal Circuit Affirms One Patent But Invalidates Another in Lipitor Case

In Pfizer, Inc. v. Ranbaxy Labs. Ltd., No. 06-1179, 2006 WL 2137244 (Fed. Cir. Aug. 2, 2006), the U.S. Court of Appeals for the Federal Circuit affirmed a lower court's ruling that a patent covering Pfizer's Lipitor' was infringed, but reversed the lower court's decision that a claim from a different patent covering Lipitor was valid.

The patents at issue were U.S. Patents 4,681,893 ('the '893 patent') and 5,273,995 ('the '995 patent'), which relate to an atorvastatin calcium composition. Pfizer brought suit against Ranbaxy after Ranbaxy filed an Abbreviated New Drug Application with the FDA seeking approval to commercially manufacture, use, and sell a composition containing atorvastatin calcium, the active ingredient in Lipitor.

After a bench trial, the U.S. District Court for the District of Delaware found that Pfizer had established that Ranbaxy's ANDA product literally infringes the '893 and '995 patents. The court further found, inter alia, that the '893 patent was not invalid under 35 U.S.C. '112.

The parties' only claim construction dispute with respect to the '893 patent was whether claim 1 is limited to racemates. (A racemate, or racemic mixture, is an equal mixture of two enantiomers ' compounds that have the same atoms and same connection pattern of atoms that are arranged differently in space, such that they are mirror images of each other.) Ran-baxy pointed to the fact that claim 1 depicted an enantiomer and to the fact that the reaction sequences recited in the examples are racemic. The court found, however, that the '893 patent was not limited to racemates because the depiction of an enantiomer does not always specify a racemate and because the patent was not limited to its examples.

The dispute regarding claim construction of the '995 patent was whether claim 6 covers the salt atorvastatin calcium. Ranbaxy argued that claim 6 could not be construed to cover the salt because it depends from claim 2. (Claim 2 narrows the scope of claim 1 from atorvastatin acid or atorvastatin lactone, or pharmaceutically acceptable salts thereof to the single compound, atorvastatin acid.) Although the court found that there was a problem in the drafting of claim 6, the court declined to invalidate the claim, arguing that there were no Federal Circuit precedents on this issue.

On appeal, the Federal Circuit rejected Ranbaxy's argument that claim 1 of the '893 patent was limited to racemates, finding that the specification consistently described the invention as a class of 'trans' compounds. In addition, the court found that the intrinsic evidence did not limit claim 1 to trans-racemates.

With regard to the '995 patent, the Federal Circuit noted that claim 2 does not include 'pharmaceutically acceptable salts of atorvastatin acid.' Ranbaxy argued that claim 6 is invalid because it does not narrow the scope of claim 2, contrary to the requirements of 35 U.S.C. '112, '4. As discussed above, the district court did not invalidate claim 6 because it was unable to locate any Federal Circuit precedent on this issue. The Federal Circuit, however, noted that it had recently suggested that a patent could be invalidated based on a violation of '112, '4. See Curtiss-Wright Flow Control Corp. v. Velan, Inc., 438 F.3d 1374, 1380 (Fed. Cir. 2006). The Federal Circuit therefore invalidated claim 6 because it found 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.

Kazaa Settles with Music Industry

On July 27, 2006, Internet file-sharing network Kazaa entered into a global settlement with the world's four major music companies. Under the terms of the deal, Kazaa's owner, Australia-based Sharman Networks, will pay Universal Music, Sony BMG, EMI, and Warner Music more than $100 million to settle legal proceedings in Australia and the United States. Although it will maintain its distributed peer-to-peer infrastructure, Kazaa also agreed to implement filtering technologies that will screen for copyrighted material.

Kazaa is not the only file-sharing company to have settled with the entertainment industry following the U.S. Supreme Court's decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 125 S. Ct. 2764 (2005). After losing its appeal, Grokster agreed to pay $50 million last year. In May 2006, Free Peers, Inc., the former owner of BearShare, agreed to pay $30 million to the Recording Industry Association of America, Capitol Records, Sony BMG Music Entertainment, Universal Music, and Warner Music. Free Peers also agreed to stop operating online music services as part of the agreement.

Although StreamCast Networks, Inc. (the owner of the software Morpheus) was named as a defendant in Grokster, it has decided not to settle. On April 14, 2006, StreamCast filed opposition to the entertainment industries' motion for summary judgment, arguing that there is a genuine issue of fact as to whether StreamCast communicated an inducing message to consumers.

Eric Agovino is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6858.

Federal Circuit Affirms One Patent But Invalidates Another in Lipitor Case

In Pfizer, Inc. v. Ranbaxy Labs. Ltd., No. 06-1179, 2006 WL 2137244 (Fed. Cir. Aug. 2, 2006), the U.S. Court of Appeals for the Federal Circuit affirmed a lower court's ruling that a patent covering Pfizer's Lipitor' was infringed, but reversed the lower court's decision that a claim from a different patent covering Lipitor was valid.

The patents at issue were U.S. Patents 4,681,893 ('the '893 patent') and 5,273,995 ('the '995 patent'), which relate to an atorvastatin calcium composition. Pfizer brought suit against Ranbaxy after Ranbaxy filed an Abbreviated New Drug Application with the FDA seeking approval to commercially manufacture, use, and sell a composition containing atorvastatin calcium, the active ingredient in Lipitor.

After a bench trial, the U.S. District Court for the District of Delaware found that Pfizer had established that Ranbaxy's ANDA product literally infringes the '893 and '995 patents. The court further found, inter alia, that the '893 patent was not invalid under 35 U.S.C. '112.

The parties' only claim construction dispute with respect to the '893 patent was whether claim 1 is limited to racemates. (A racemate, or racemic mixture, is an equal mixture of two enantiomers ' compounds that have the same atoms and same connection pattern of atoms that are arranged differently in space, such that they are mirror images of each other.) Ran-baxy pointed to the fact that claim 1 depicted an enantiomer and to the fact that the reaction sequences recited in the examples are racemic. The court found, however, that the '893 patent was not limited to racemates because the depiction of an enantiomer does not always specify a racemate and because the patent was not limited to its examples.

The dispute regarding claim construction of the '995 patent was whether claim 6 covers the salt atorvastatin calcium. Ranbaxy argued that claim 6 could not be construed to cover the salt because it depends from claim 2. (Claim 2 narrows the scope of claim 1 from atorvastatin acid or atorvastatin lactone, or pharmaceutically acceptable salts thereof to the single compound, atorvastatin acid.) Although the court found that there was a problem in the drafting of claim 6, the court declined to invalidate the claim, arguing that there were no Federal Circuit precedents on this issue.

On appeal, the Federal Circuit rejected Ranbaxy's argument that claim 1 of the '893 patent was limited to racemates, finding that the specification consistently described the invention as a class of 'trans' compounds. In addition, the court found that the intrinsic evidence did not limit claim 1 to trans-racemates.

With regard to the '995 patent, the Federal Circuit noted that claim 2 does not include 'pharmaceutically acceptable salts of atorvastatin acid.' Ranbaxy argued that claim 6 is invalid because it does not narrow the scope of claim 2, contrary to the requirements of 35 U.S.C. '112, '4. As discussed above, the district court did not invalidate claim 6 because it was unable to locate any Federal Circuit precedent on this issue. The Federal Circuit, however, noted that it had recently suggested that a patent could be invalidated based on a violation of '112, '4. See Curtiss-Wright Flow Control Corp. v. Velan, Inc. , 438 F.3d 1374, 1380 (Fed. Cir. 2006). The Federal Circuit therefore invalidated claim 6 because it found 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.

Kazaa Settles with Music Industry

On July 27, 2006, Internet file-sharing network Kazaa entered into a global settlement with the world's four major music companies. Under the terms of the deal, Kazaa's owner, Australia-based Sharman Networks, will pay Universal Music, Sony BMG, EMI, and Warner Music more than $100 million to settle legal proceedings in Australia and the United States. Although it will maintain its distributed peer-to-peer infrastructure, Kazaa also agreed to implement filtering technologies that will screen for copyrighted material.

Kazaa is not the only file-sharing company to have settled with the entertainment industry following the U.S. Supreme Court's decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. , 125 S. Ct. 2764 (2005). After losing its appeal, Grokster agreed to pay $50 million last year. In May 2006, Free Peers, Inc., the former owner of BearShare, agreed to pay $30 million to the Recording Industry Association of America, Capitol Records, Sony BMG Music Entertainment, Universal Music, and Warner Music. Free Peers also agreed to stop operating online music services as part of the agreement.

Although StreamCast Networks, Inc. (the owner of the software Morpheus) was named as a defendant in Grokster, it has decided not to settle. On April 14, 2006, StreamCast filed opposition to the entertainment industries' motion for summary judgment, arguing that there is a genuine issue of fact as to whether StreamCast communicated an inducing message to consumers.

Eric Agovino is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6858.