Teva Pharma. Indus. Ltd. v. AstraZeneca Pharma. LP

Case Name: Teva Pharma. Indus. Ltd. v. AstraZeneca Pharma. LP, 2011-1091, 2011 U.S. App. LEXIS 23874 (Fed. Cir. Dec. 1, 2011) (Circuit Judges Rader, Linn, and Dyk presiding; Opinion by Linn) (Appeal from E.D. Pa., Yohn, Jr., J.)

Drug Product and Patent(s)-in-Suit: Crestor^® (rosuvastatin calcium); U.S. Pat. No. RE39,502

Nature of the Case and Issue(s) Presented: The issue on appeal concerns invalidity under § 102(g)(2).  Teva's ‘502 patent claims a pharmaceutical product comprising an active ingredient and a stabilizer.  Its priority date is Dec. 1, 1999.  Teva sued AstraZeneca (AZ) based on AZ's manufacture and sale of Crestor.  Crestor contains crospovidone as a disintegrant.  Crospovidone also acts as a stabilizer, but that effect was unknown to AZ at the time it formulated the drug in mid-1999 and when it disclosed its formulation by the late summer of 1999.  On the basis of those facts, the district court found that AZ arrived at its accused product formulations before Teva conceived of and reduced to practice the subject matter of the ‘502 patent. Teva appealed.

On appeal, Teva argued that the district court misapplied Section 102(g)(2) in failing to require AZ to prove that it appreciated the stabilizing effect of crospovidone in its drug formulation.  According to Teva, the district court implicitly construed the claims to encompass particular stabilizers, irrespective of whether those particular stabilizers acted as the sole stabilizer.  This effectively relieved AZ of its burden of proving that it created the claimed subject matter and appreciated that it had done so.  AZ responded that Teva's claim construction argument is irrelevant because AZ's limited concession of infringement established that AZ's drug falls within the scope of Teva's asserted claims.  AZ further argued that 102(g)(2) did not require it to understand its own invention in the same terms in which Teva later claimed it, but only to understand the fact of what it made.

The Federal Circuit affirmed on the basis that the district court correctly concluded that AZ's earlier development of the accused Crestor drug formulation satisfied the requirements for prior invention under Section 102(g)(2).  The only issue the Federal Circuit decided was whether AZ had to understand that crospovidone stabilized its drug in order to win priority under § 102(g)(2). It did not.

Why AZ Prevailed:  (Inventor need not understand precisely why his invention works in order to achieve an actual reduction to practice).  Section 102(g)(2) requires consideration of the respective dates of conception and reduction to practice coupled with diligence.  Relying on case law, the Court found that an inventor need not understand precisely why his invention works in order to achieve an actual reduction to practice.  "To establish prior invention, the party asserting it must prove that it appreciated what it had made.  The prior inventor does not need to know everything about how or why its invention worked.  Nor must it conceive of its invention using the same words as the patentee would later use to claim it."

Teva argued that AZ needed to understand its invention in the same terms used in the asserted claims as one concerning "claim construction."  But the district court had not construed any of the claims; put another way, this was not an appeal of a Markman decision.  Because the district court's decision "did not resolve any dispute about the scope of the asserted claims," it was easy for the Federal Circuit to find that such a "claim construction" argument was "without merit."  Moreover, AZ's limited concession of infringement obviated the need to resolve any issues of fact concerning AZ's prior art falling within the scope of the claims of the ‘502 patent.  This, too, allowed the Federal Circuit to arrive at its decision.