Case Name: Allergan, Inc. v. Sandoz, Inc., Nos. 2016-1085, -1160, 2017 U.S. App. LEXIS 4733 (Fed. Cir. Mar. 17, 2017) (Circuit Judges Reyna, Wallach, and Chen presiding; Opinion by Wallach, J.) (Appeal from M.D.N.C., Eagles, J.)
Drug Product and Patent(s)-in-Suit: Latisse® (bimatoprost); U.S. Patents Nos. 7,388,029 (“the ’029 patent”), 7,351,404 (“the ’404 patent”), 8,263,054 (“the ’054 patent”), 8,038,988 (“the ’988 patent”), 8,101,161 (“the ’161 patent”), and 8,926,953 (“the ’953 patent”)
Nature of the Case and Issue(s) Presented: All of the patents claimed a topical solution to treat hair loss or reduction using bimatoprost. Allergan sued Sandoz for infringement of the ’029 and ’404 patents, and Sandoz countered that those patents were invalid. The District Court found in favor of Allergan. Sandoz appealed and the Federal Circuit reversed finding the two patents obvious. While Allergan I was pending, Allergan filed a second suit alleging infringement of the ’054, ’988, and the ’161 patents. That case was stayed pending the appeal and resolution of Allergan I. Following Allergan I, Apotex, the primary defendant in the second case, filed a motion for judgment on the pleadings, which the District Court granted.
During the pendency of the two suits, the ’953 patent application was pending before the USPTO. After the ’404 patent had been invalidated as obvious by the Federal Circuit, Allergan submitted ex parte declarations to the USPTO related to two prior-art references used to invalidate the ’404 patent. Those declarations were intended to show that one of the inventors of both the ’404 patent and the then-pending ’953 patent application, Dr. VanDenburgh, was an author of the prior-art references, such that the references were no longer Section 102(a) prior art. The ’953 patent issued and Allergan filed two complaints asserting the ’953 patent against various defendants, including Sandoz. Sandoz filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief could be granted, based on collateral estoppel, which the District Court granted. The District Court did not consider the ex parte testimony that Allergan had submitted to the USPTO during the ’953 patent prosecution. Allergan appealed, and the Federal Circuit reversed-in-part and affirmed-in-part.
Why Sandoz Prevailed (in-part): Applying Fourth Circuit law, the Federal Circuit analyzed whether collateral estoppel applied based on the following five-part test: (i) the issue sought to be precluded is identical to one previously litigated; (ii) the issue was actually determined in the prior proceeding; (iii) the issue’s determination was a critical and necessary part of the decision in the prior proceeding; (iv) the prior judgment is final and valid; and (v) the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the previous forum.
The Federal Circuit agreed that the asserted claims were substantially similar to the invalidated claims of the ’404, ’054, ’161, and ’988 patents, and that any differences between the claims did not materially alter the question of invalidity. The eyelash-darkness limitation in the ’953 patent was also disputed in all three prior litigations as one of many attributes flowing from the use of the claimed bimatoprost solution. In fact, the parties’ original claim construction dispute included darkness. Moreover, the previously litigated patents included several additional statements that demonstrated that increasing eyelash darkness was one attribute of their inventions. Thus, both the current litigation and prior litigation concerned eyelash darkness as well as broader qualities associated with hair growth.
Allergan argued that the parties never briefed “darkness,” and the District Court’s opinion never discussed it. But the Federal Circuit found evidence in the record sufficient to hold that the issue was actually determined in Allergan I and Allergan II. Again, the issue of darkness was discussed in the claim-construction proceedings for the ’404 patent. Moreover, those claims, as construed to include the language covering increased pigmentation, were litigated by the parties at a bench trial.
Next, Allergan alleged that it did not have the opportunity to present its ex parte declarations in Allergan I or Allergan II because the Federal Circuit had changed the legal standard under § 102(a) to prove that one’s own work was not prior art. The Federal Circuit disagreed. Allergan offered no explanation for why such additional evidence could not have been submitted to the District Court in the prior cases. Second, the standard of proof that Allergan relied on did not change in the way that Allergan argued it had. Therefore, Allergan had had a full and fair opportunity to litigate its position, and all elements of the test for collateral estoppel had been met.
Notwithstanding collateral estoppel, Allergan argued that the District Court “erroneously invalidated unasserted claims of the ’953 patent” in its final judgment with respect to Sandoz. Because Allergan narrowed its assertion of infringement in its Second Amended Complaint to the three asserted claims, it argued that the District Court had no subject matter jurisdiction over any of the other claims of the ’953 patent and had no power to invalidate them, and the Federal Circuit agreed. Sandoz had not shown a continuing case or controversy with respect to the withdrawn claims. Moreover, Sandoz had not presented evidence or argument of how the prior patents suggested the additional limitations present in the unasserted claims.
