Shire Development, LLC v. Watson Pharms., Inc.

Case Name:  Shire Development, LLC v. Watson Pharms., Inc., No. 2016-1785, 848 F.3d 981 (Fed. Cir. Feb. 10, 2017) (Circuit Judges Prost, Taranto, and Hughes presiding; Opinion by Hughes, J.) (appeal from S.D. Fla., Middlebrooks, J.)  

Drug Product and Patent(s)-in-Suit: Lialda® (mesalamine); U.S. Patent No. 6,773,720 (“the ’720 patent”)

Nature of the Case and Issue(s) Presented:  The ’720 patent claimed a controlled-release oral pharmaceutical composition of mesalamine used to treat certain inflammatory bowel diseases. That composition included the mesalamine active ingredient, an inner, lipophilic matrix, an outer, hydrophilic matrix, and other optional excipients. When the matrix was hydrophilic, it had an affinity for water and readily dissolved in it. When a matrix was lipophilic, it had an affinity for lipids and therefore resisted dissolving in water. Following a bench trial, the district court rejected Watson's invalidity arguments that the ’720 patent lacked written description and enablement, and held that Watson infringed claims 1 and 3. On appeal, and again after remand from the Supreme Court, the Federal Circuit held that the ’720 patent matrices were “defined by mutually exclusive spatial characteristics—one inner, one outer—and mutually exclusive compositional characteristics—one hydrophilic, one lipophilic.” The Federal Circuit further explained that the matrix compositions were limited by the Markush groups added during prosecution to overcome the examiner’s rejection of the claims as obvious.

On remand, the district court concluded that Watson’s ANDA product infringed. The district court determined that Watson’s ANDA product satisfied the Markush limitations because the excipients falling outside the respective Markush groups were “unrelated” to the invention since they did not drive the water-affinity property of their respective matrices. Watson appealed and the Federal Circuit reversed.

Why Watson Prevailed:  The Watson ANDA product’s extragranular space—which the district court recognized was the outer hydrophilic matrix—contained magnesium stearate, which was not within the claimed Markush group. So that limitation was not literally infringed. Nonetheless, the district court had found that Watson infringed because that component was unrelated to the invention. The Federal Circuit disagreed. The invention of the ’720 patent was a multi-matrix system that relied on the hydrophilic and lipophilic characteristics of the matrices to release mesalamine in the colon in a sustained and uniform manner. Given the district court’s finding that magnesium stearate was so strongly lipophilic that it could impart lipophilic characteristics to a composition even in low concentrations, the Federal Circuit found that no one had suggested that magnesium stearate, when in the outer matrix, was neither lipophilic nor hydrophilic. Thus, the magnesium stearate retained its lipophilic character in the extragranular space, thereby structurally and functionally relating to the invention.