HORIZON PHARMA IRELAND LIMITED et al v. ACTAVIS LABORATORIES, UT, INC.

Filing 188

OPINION. Signed by Judge Noel L. Hillman on 8/17/2016. (tf, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
HORIZON PHARMA IRELAND
LIMITED, et al.,

Civil No. 14-7992 (NLH/AMD)

Plaintiffs,
OPINION
v.
ACTAVIS LABORATORIES, UT,
INC., et al.,
Defendants.

APPEARANCES:
John E. Flaherty
Ravin R. Patel
McCARTER & ENGLISH LLP
Four Gateway Center
100 Mulberry St.
Newark, NJ 07102
Robert F. Green
Christopher T. Griffith
Caryn C. Borg-Breen
Benjamin D. Witte
GREEN, GRIFFITH & BORG-BREEN LLP
NBC Tower, Suite 3100
455 North Cityfront Plaza Drive
Chicago, Illinois 60611
Dennis A. Bennett
GLOBAL PATENT GROUP, LLC
1005 North Warson Road, Suite 404
St. Louis, Missouri 63132
On behalf of Plaintiffs
Liza M. Walsh
Christine I. Gannon
Christopher J. Borchert
WALSH PIZZI O'REILLY FALANGA LLP
One Riverfront Plaza
1037 Raymond Blvd.

6th Floor
Newark, NJ 07102
Ralph J. Gabric
Laura A. Lydigsen
Joshua E. Ney, Ph.D.
Joshua H. James
BRINKS GILSON & LIONE
455 North Cityfront Plaza Drive, Suite 3600
Chicago, Illinois 60611
On behalf of Defendants
HILLMAN, District Judge
Presently before the Court in this Hatch-Waxman Act 1 action
is the dispute over the construction of claims in nine patents
relating to PENNSAID® 2%, which is the first FDA-approved twicedaily topical diclofenac sodium formulation for the treatment of
the pain of osteoarthritis (“OA”) of the knees.

Plaintiff

Horizon (Horizon Pharma Ireland Limited, HZNP Limited and

1

The Third Circuit Court of Appeals recently explained,
With the Drug Price Competition and Patent Term Restoration
Act of 1984, Pub. L. No. 98–417, 98 Stat. 1585, commonly
known as the Hatch–Waxman Act, Congress attempted to
balance the goal of “mak[ing] available more low cost
generic drugs,” H.R. Rep. No. 98–857, pt. 1, at 14–15
(1984), reprinted in 1984 U.S.C.C.A.N. 2647, 2647–48, with
the value of patent monopolies in incentivizing beneficial
pharmaceutical advancement, see H.R.Rep. No. 98–857, pt. 2,
at 30 (1984), reprinted in 1984 U.S.C.C.A.N. 2686, 2714.
The Act seeks to accomplish this purpose, in part, by
encouraging “manufacturers of generic drugs . . . to
challenge weak or invalid patents on brand name drugs so
consumers can enjoy lower drug prices.” S. Rep. No. 107–
167, at 4 (2002).

King Drug Co. of Florence, Inc. v. Smithkline Beecham Corp., 791
F.3d 388, 394 (3d Cir. 2015).
2

Horizon Pharma USA, Inc.) is the current owner and assignee of
the patents-in-issue, and of the PENNSAID® 2% New Drug
Application (“NDA”); all rights therein were acquired from third
parties.

These patents are:

U.S. Patent Nos. 8,252,838 (“the

’838 patent”), 8,563,613 (“the ’613 patent”), 8,871,809 (“the
’809 patent”), 9,066,913 (“the ’913 patent”), 9,101,591 (“the
’591 patent”), 8,546,450 (“the ’450 patent”), 8,217,078 (“the
’078 patent”), 8,618,164 (“the ’164 patent”) and 9,132,110 (“the
’110 patent”).
The patents may be segregated into groups in accordance
with their related specifications.

The first group of Horizon

patents - the ’838, ’613, ’809, ’913 and ’591 patents - share
substantially identical specifications and claim priority to the
same provisional application filed on October 17, 2006.
According to Horizon, the inventors recognized a significant
unmet need for, inter alia, topical OA pain treatments suitable
for chronic use that will deliver the active agent to the
underlying tissue in sufficient concentration.

The second group

of Horizon patents - the ’450, ’078, ’164 and ’110 patents also share substantially identical specifications, and claim
priority to the same provisional application filed on October
31, 2012.

Horizon states that the inventors recognized a need

for, inter alia, improved methods of dosing topical diclofenac
formulations.
3

Horizon has filed several Hatch-Waxman actions alleging
patent infringement against generic companies seeking to market
copies of Horizon’s PENNSAID® 2% formulation prior to the
expiration of Horizon’s patents.

This particular action

concerns claim construction issues relevant to Actavis
Laboratories UT, Inc. (“Actavis”).

Horizon brought this action

in response to Actavis’ assertion that the generic copy of
PENNSAID® 2% described in Actavis’ Abbreviated New Drug
Application No. 207238 (“ANDA”), if approved by the FDA, would
not infringe any valid and enforceable patent owned by Horizon. 2
A claim construction hearing was held on March 3, 2016.
Following the conclusion of the parties’ arguments, the Court
directed the parties to submit supplemental briefing, and on
June 7, 2016, the Court, having considered the entire record and
additional briefing and argument by counsel, issued an oral
Opinion on the Court’s final construction of the patent claims.
This Opinion formally memorializes the Court’s findings as to
its construction of the patent claims at issue pursuant to
Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996).

2

This Court has jurisdiction over the subject matter of this
action pursuant to 28 U.S.C. §§ 1331, 1338(a), 2201, 2202 and 35
U.S.C. § 271.
4

I.

LAW OF CLAIM CONSTRUCTION
Claim construction is “an issue for the judge, not the

jury.”

Markman v. Westview Instruments, Inc., 517 U.S. 370, 391

(1996); see also Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S.
Ct. 831, 841 (2015) (“This ultimate interpretation is a legal
conclusion.”).

“[T]he words of a claim ‘are generally given

their ordinary and customary meaning.’”

Phillips v. AWH Corp.,

415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (quoting
Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.
Cir. 1996)).

“[T]he ordinary and customary meaning of a claim

term is the meaning that the term would have to a person of
ordinary skill in the art [the “POSA”] in question at the time
of the invention.”

Id. at 1313.

Claim construction begins with

the intrinsic evidence of the patent -- the claims, the
specification, and the prosecution history -- and may require
consultation of extrinsic evidence to understand the state of
the art during the relevant time period.

Teva Pharms., 135 S.

Ct. at 841.
As part of construing claims, the Court can assess whether
a claim term is indefinite, and reach “‘a legal conclusion that
is drawn from the court’s performance of its duty as the
construer of patent claims.’”

In re Aoyama, 656 F.3d 1293, 1299

(Fed. Cir. 2011) (quoting Personalized Media Commc’ns, L.L.C. v.
Int’l Trade Comm’n, 161 F.3d 696, 705 (Fed. Cir. 1998)).
5

For a

claim term to be definite under 35 U.S.C. § 112, ¶ 2 (2012), 3 “a
patent’s claims, viewed in the light of the specification and
prosecution history, [must] inform those skilled in the art
about the scope of the invention with reasonable certainty.”
Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120,
2129 (2014).
It is permissible to read in testing conditions from the
specification without violating the basic canon of construction
not to import limitations from the specification into the
claims, but only where this will “reconcile[ ] the ambiguous
claim language with the inventor’s disclosure.”

Chimie v. PPG

Indus., Inc., 402 F.3d 1371, 1378–79 (Fed. Cir. 2005).

Where,

however, the specification discloses multiple methods for
evaluating a claim limitation without guidance to a person of
ordinary skill in the art about which method to use, the claim
limitation is indefinite.

Dow Chem. Co. v. Nova Chems. Corp.

(Can.), 803 F.3d 620, 634–35 (Fed. Cir. 2015); Teva Pharms. USA,
Inc. v. Sandoz, Inc., 789 F.3d 1335, 1344–45 (Fed. Cir. 2015),
on remand from 135 S. Ct. 831 (2015).

3

The statute has been subsequently amended under the Leahy-Smith
America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284
(2011), such that this provision has been replaced by 35 U.S.C.
§ 112(b). Because the applications predate the AIA, the pre-AIA
version of § 112 applies. Biosig Instruments, Inc. v. Nautilus,
Inc., 783 F.3d 1374, 1377 n.1 (Fed. Cir. 2015), on remand from
134 S. Ct. 2120 (2014).
6

II.

DISPUTED TERMS
As set forth above, there are nine patents asserted in this

matter.

Of these, five patents - U.S. Patent Nos. 8,252,838;

8,563,613; 8,871,809; 9,066,913; and 9,101,591 - are part of the
“’838 Patent Family” and all agreed to have the same
specification.

The other four patents - U.S. Patent Nos.

8,546,450; 8,217,078; 8,618,164; and 9,132,110 - are part of the
“’450 Patent Family” and similarly agreed to have the same
specification.
All of the disputed terms for the Court to construe are
contained within the ’838 Patent Family, thus all references to
the specification will be to the specification of the ’838
Patent.
A.

“the topical formulation produces less than 0.1%
impurity A after 6 months at 25°C and 60% humidity”

Horizon’s Proposed
Construction
Less than 0.1% of Impurity A
(USP Diclofenac Related
Compound A RS) present in a
formulation sample after the
sample was maintained at 25°C
and 60% humidity for 6 months

Court’s construction:
“impurity A”

Defendants’ Proposed
Construction
This term is indefinite
because it does not inform a
person of ordinary skill with
reasonable certainty of what
is claimed. If impurity A is
construed to mean USP
Diclofenac Related Compound A
RS, then the remainder of the
term should be given its plain
and ordinary meaning.

indefinite as to the identity of

7

Horizon’s construction seeks to equate the claim term
“impurity A” with USP Diclofenac Related Compound A RS (“USP
Compound A”). 4

Horizon acknowledges that no reference to USP

Compound A exists in the intrinsic evidence, but relies on the
fact that a POSA would know that “impurity A” would refer to USP
Compound A.

Actavis submits that the language of the

specification and absence of testing information within the
specification make the identity of “impurity A” impossible to
know.

Actavis also argues that even if “impurity A” is

knowable, the verb “produces” mandates an assessment of the
amount of “impurity A” before storage to determine a baseline
amount to compare against the amount of “impurity A” after the
six month storage period to calculate what was “produced” during
the storage period, as opposed to what was present as a result
of the synthesis of diclofenac sodium.
Looking to the specification, as mentioned, USP Compound A
is never mentioned.

Horizon’s position is that because the

relevant pharmacopoeias at the time -- the U.S. Pharmacopoeia
(“USP”), the European Pharmacopoeia (“Ph. Eur.”), and the

4

The chemical name for this compound is either N-(2,6dichlorophenyl)indolin-2-one (see USP (26th ed. 2003) at 1975
(Pl.’s Ex. 16); USP (24th ed. 2000) at 1786 (Pl.’s Ex. 17)) or
1-(2,6-dichlorophenyl)-1,3-dihydro-2H-indol-2-one (see Ph. Eur.
(5th ed. 2004) at 1420 (Pl.’s Ex. 18); Ph. Eur. (6th ed. 2005)
at 1687 (Pl.’s Ex. 19)). The literature references referred to
by both experts refer to USP Compound A by both names.
8

British Pharmacopoeia (“BP”) -- identify five degradants for
sodium diclofenac by letters (e.g., A, B, C), a POSA would know
that “impurity A” meant the first impurity for sodium
diclofenac, which is disclosed in the USP as USP Compound A.
Actavis does not appear to disagree that this is a possibility,
but it argues that without any further identifying information
given about “impurity A,” it would be impossible for a POSA to
know what “impurity A” is.
The only identity information provided for “impurity A” in
the specification are retention times derived from a high
performance liquid chromatography (“HPLC”) characterization.
However, the specification merely says “the samples were tested
for impurities by high performance liquid chromatography
(HPLC).”

’838 Patent at 23:50–52.

The specification provides

no additional information about the conditions under which the
HPLC experiment were undertaken -- most notably, details
regarding the column, the mobile phase, and the flow rate are
not given.

(See Marvin C. McMaster, HPLC:

A Practical User’s

Guide 53–56 (2d ed. 2007).)
Actavis’ expert explains that the disclosure is
insufficient for a POSA to replicate and understand the HPLC
results to identify “impurity A.”
54.)

(Michniak-Kohn Decl. ¶¶ 52–

Dr. Kohn also explains that the specification fails to

inform a POSA whether “impurity A” is produced as a result of
9

the diclofenac, or as a result of any of the other excipients in
the formulation.

(Id. ¶ 51.)

Horizon’s expert responds that

the literature available at the time would demonstrate that
“impurity A” was USP Compound A.

(Walters Resp. Decl. ¶ 16–20.)

Dr. Walters assumes that the HPLC experiment was carried
out using a pharmacopoeia chromatographic system (see Walters
Resp. Decl. ¶ 16), but the specification does not support this
position.

The word “pharmacopoeia” appears nowhere in the ’838

Patent, and Dr. Walters has not explained why a POSA would know
that the HPLC tests described in the ’838 Patent were undertaken
using a pharmacopoeia chromatographic system.

Looking to the

pharmacopoeia excerpts submitting by Horizon, they do not
comport with the HPLC characterization data disclosed in the
specification.

Both editions of the Ph. Eur. and the USP

provide detailed descriptions of a reference solution, the
mobile phase, the flow rate, and details about the column.

(See

Ph. Eur. (6th ed. 2005) at 1686–87; Ph. Eur. (5th ed. 2004) at
1421; USP (26th ed. 2003) at 595–96; USP (24th ed. 2000) at
546.)

Further, even assuming that the HPLC experiment in the

’838 Patent was undertaken using pharmacopoeia chromatographic
systems, the relative retention times disclosed in the
specification only comport with the characterization of
diclofenac given in the USP (0.6 for USP Compound A and 1.0 for

10

diclofenac), 5 and do not comport with the information given in
the Ph. Eur. (0.48 for USP Compound A and 1.0 for diclofenac). 6
The specification provides no guidance as to which of the
proposed pharmacopoeia chromatographic systems a POSA could use
to evaluate the identity of “impurity A.”
Further, in neither of the literature references relied
upon by Dr. Walters that he asserts use pharmacopoeia
chromatographic systems does the reference omit the details of
the HPLC experiment (see Roy (2001) at ACT-PENN0014822
(explicitly relying on the BP for the HPLC conditions while
still explaining in detail the conditions used); Hajkova (2002)
at HZNPENN_00071424 (explicitly relying on the USP for baseline
HPLC conditions while also disclosing conditions for a newly
described HPLC experimental setup)) or identify USP Compound A
by anything other than its actual chemical formula and/or
structure (see Roy (2001) at ACT-PENN0014821 (“a stable
intermediate, 1-(2,6-dichlorophenyl)indolin-2-one, which is
commonly known as the indolinone derivative”); Hajkova (2002) at

5

This corresponds to 6.6 minutes for “impurity A” and 11 minutes
for diclofenac as disclosed in the specification.
6

This would correspond to either an elution of “impurity A” at
5.28 minutes if diclofenac eluted at 11 minutes as disclosed, or
an elution of diclofenac at 13.75 minutes if “impurity A” eluted
at 6.6 minutes as disclosed.
11

HZNPENN_00071423 (“The main impurity, 1-(2,6dichorophenyl)indolin-2-one (DPI, Fig. 1) . . . .”)).
The identity of “impurity A” as claimed in claim 4 of the
’913 Patent is unknowable to a reasonable certainty to a POSA.
Accordingly, “impurity A” is indefinite.

The Court need not

reach the issue of whether “produces” requires an assessment of
the amount if “impurity A” before storage to provide a baseline
to compare against the amount of “impurity A” after the six
month storage period.
B.

“the formulation degrades by less than 1% over 6
months”

Horizon’s Proposed
Construction
Less than 1% of Impurity A
(USP Diclofenac Related
Compound A RS) present in a
formulation sample after the
sample was maintained at 25°C
and 60% humidity for 6 months

Court’s construction:

Defendants’ Proposed
Construction
This term is indefinite
because it does not inform a
person of ordinary skill with
reasonable certainty of what
is claimed. If construed, the
term should be given its plain
and ordinary meaning.

indefinite

Horizon seeks to do two things in their construction:
(1) explain storage conditions by relying on Example 6 of the
specification; and (2) explain what it means if something
“degrades” by using “impurity A” from Example 6.

Actavis

responds that this is improper importation of limitations from
the specification into the claims, and that even if this were
permissible, the specification provides multiple methods of

12

storage without specifying when one is proper, making the terms
indefinite.
Having already concluded that the identity of “impurity A”
is indefinite, this term must also be indefinite.

No other

explanation for how to identify the means of degradation is
provided.

Even if the Court were to try to identify another way

to evaluate degradation, the specification does not provide
guidance.

The specification refers to stability and degradation

as two sides of the same coin, a point which Horizon also made
during the hearing.

(See Hr’g Tr. at 45:22–46:1.)

However,

stability is referred to as a catch all for a number of things,
especially in Example 3 when the gels “remain stable for at
least six months demonstrating:

no phase separation, negligible

shift in pH, and low amounts of degradation products (<0.04%).”
’838 Patent at 16:39–41; see also id. at 12:56–58 (referring to
discoloration and phase separation in the context of stability),
20:37–64 (referring to appearance for stability), 23:30–24:32
(referring to production of “impurity A” for stability).

For

purposes of claim construction, it is presumed that claim terms
are used consistently throughout a patent.
at 1314.

Phillips, 415 F.3d

Thus, it is unclear when “stability” and therefore

“degradation” is referring to production of “impurity A,” or
something else, such as appearance, phase separation, and/or pH
shift.
13

Thus, no matter how the Court tries to interpret the term,
the result is indefiniteness.

Either degradation is equated

with “impurity A”, which has already been deemed indefinite, or
the Court is presented with multiple methods for how to evaluate
stability -- and accordingly how to evaluate degradation -without further guidance, rendering the term indefinite.
The Court need not reach the issue of whether Horizon’s
proposed construction would impermissibly import limitations
from the specification with respect to storage conditions.
C.

“consisting essentially of”

Horizon’s Proposed
Construction
Legal issue – no construction
needed in Markman phase; also,
meaning cannot be ascertained
in the absence of proper
context

Court’s construction:

Defendants’ Proposed
Construction
Comprising; if interpreted
otherwise, the claims are
invalid as indefinite and/or
lacking adequate written
description under 35 U.S.C.
§ 112

indefinite due to indefiniteness of the

basic and novel properties of the invention
1.

“Consisting Essentially Of” and the “Basic and
Novel Properties” Require Construction

“Consisting essentially of” is a transitional phrase that
has a well-established legal meaning in Federal Circuit case
law.

“By using the term ‘consisting essentially of,’ the

drafter signals that the invention necessarily includes the
listed ingredients and is open to unlisted ingredients that do
not materially affect the basic and novel properties of the
14

invention.”

PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351,

1354 (Fed. Cir. 1998).

This presents a middle ground between

the open-ended “comprising” that does not exclude any unrecited
claim elements and the closed “consisting of” that excludes any
elements not explicitly recited in the claim.

AK Steel Corp. v.

Sollac & Ugine, 344 F.3d 1234, 1239 (Fed. Cir. 2003).
When asked to construe this term, courts have generally
declined to construe the term, or declined to provide any
further construction beyond the well-established legal meaning
of the term.

See, e.g., Depomed, Inc. v. Sun Pharma Global FZE,

Civ. No. 11-3553 (JAP), 2012 WL 3201692, at *13 (D.N.J. Aug. 3,
2012); Biovail Labs. Int’l SRL v. Abrika, LLLP, No. 04-61704,
2006 WL 6111777, at * 18 (S.D. Fla. Aug. 24, 2006); Classified
Cosmetics, Inc. v. Del Labs., Inc., No. 03-4818, 2004 WL
5645578, at *5 (C.D. Cal. June 14, 2004).
When, however, the “basic and novel properties” themselves
are in dispute, courts have construed the term in order to
define the “basic and novel properties” to delineate what must
be shown for the purposes of infringement or invalidity.

See,

e.g., AK Steel, 344 F.3d at 1239–40 (determining the basic and
novel property of the invention by referring to the
specification); L’Oreal S.A. v. Johnson & Johnson Consumer Cos.,
Inc., No. 12-98-GMS, Docket Item 183, slip op. at 1 n.2 (D. Del.
Nov. 5, 2014) (“As with claim construction, the court determines
15

the basic and novel properties of an invention as a matter of
law, while resorting to the same sources of evidence used for
claim construction.”); Trs. of Boston Univ. v. Everlight Elecs.
Co., Ltd., 23 F. Supp. 3d 50, 63–65 (D. Mass. 2014) (noting that
“[t]he caselaw is somewhat unclear as to how to determine the
‘basic and novel properties’ of an invention” and that “[t]his
is a turgid, difficult nook of patent law”); Momentus Golf, Inc.
v. Swingrite Golf Corp., 312 F. Supp. 2d 1134, 1144 (S.D. Iowa
2004) (identifying “[t]he novel property” of the claimed
invention in construing “consisting essentially of”), rev’d, 187
F. App’x 981 (Fed. Cir. 2006) (reversing judgment of
noninfringement for misconstruing what would materially alter
the basic and novel property); Kim v. Conagra Foods, Inc., No.
01-2467, 2003 WL 2122266, at *8 (N.D. Ill. May 23, 2003)
(identifying “the novel property of the claimed invention” in
discussing claim construction); General Elec. Co. v. Hoechst
Celanese Corp., 698 F. Supp. 1181, 1187 (D. Del. 1988) (holding
that “the determination of the basic and novel characteristic of
[the asserted patent] is part of determining the scope of the
claim” and then declining to do so due to a disputed issue of
fact under pre-Markman case law).

It further appears that where

the parties can agree on the basic and novel properties, then
the issue of what materially affects those properties is not
raised until the infringement and invalidity analyses.
16

See,

e.g., PPG Indus., 156 F.3d at 1354 (“[The parties] agreed that
the basic and novel characteristics of the glass are color,
composition, and light transmittance.”).
Based on the weight of authority, the Court will construe
“consisting essentially of” in accordance with the wellestablished legal meaning, “consisting of only the specified
materials and those that do not materially affect the basic and
novel properties of the claimed invention.”

Because the parties

dispute what those basic and novel properties or characteristics
are, the Court will go on to identify them. 7

2.

Nautilus Applies to the “Basic and Novel
Properties”

A major dispute between the parties is whether the Nautilus
standard applies to the determination of the “basic and novel
properties.”

The parties agree that no court has yet to apply

the Nautilus standard for indefiniteness to this issue, and the
Court has been unable to identify any.
issue of first impression.

Accordingly, this is an

Horizon submits that because

Nautilus applies only to the bounds of claims that it should not
be read so broadly as to apply to the basic and novel properties
in construing “consisting essentially of.”

Actavis counters

that because the basic and novel properties are part of defining

7

The Court will not address the timing issues variously raised
by the parties about the basic and novel properties.
17

the scope of the claim, Nautilus should apply to them as well.
The Court agrees with Actavis that the basic and novel
properties are part of the scope of the claim, and as such are
part and parcel of the claims.
As a primary matter, the Federal Circuit has found that the
definiteness requirement of 35 U.S.C. § 112, ¶ 2 applies to a
“consisting essentially of” claim.
1354–55.

See PPG Indus., 156 F.3d at

For example, in PPG Industries, PPG held a patent for

tinted glass used in automobiles, and filed an infringement
action against Guardian, claiming that Guardian’s glass product
infringed PPG’s patent.

At the Markman phase, the district

court was tasked with construing the following claim term:

“A

green tinted, ultraviolet absorbing glass having a base glass
composition consisting essentially of: [various specific
ingredients] and a colorant portion consisting essentially of:
[various specific ingredients].”

Id. at 1352.

The parties

agreed that that the basic and novel characteristics of PPG’s
glass were color, composition, and light transmittance.
1354.

Id. at

Guardian argued that its glass contained iron sulfide, an

ingredient not listed in PPG’s patent, as a colorant, and it
therefore did not infringe.

Id. at 1353.

PPG argued that the district court was required to
determine as a part of claim construction whether iron sulfide
could have a material effect on the basic and novel
18

characteristics of the claimed glass.

Id. at 1354.

If iron

sulfide did not materially affect PPG’s patented glass product,
then Guardian’s glass could be found to be infringing.

The

Federal Circuit affirmed the district court, which left the
material-effect determination for the jury.

The Federal Circuit

explained,
Claims are often drafted using terminology that is not as
precise or specific as it might be. As long as the result
complies with the statutory requirement to “particularly
point[ ] out and distinctly claim[ ] the subject matter
which the applicant regards as his invention,” 35 U.S.C. §
112, para. 2, that practice is permissible. That does not
mean, however, that a court, under the rubric of claim
construction, may give a claim whatever additional
precision or specificity is necessary to facilitate a
comparison between the claim and the accused product.
Rather, after the court has defined the claim with whatever
specificity and precision is warranted by the language of
the claim and the evidence bearing on the proper
construction, the task of determining whether the construed
claim reads on the accused product is for the finder of
fact.
Id. at 1355.

The Federal Circuit emphasized that PPG’s patent

“contained some inherent imprecision resulting from the use of
the term ‘consisting essentially of.’”

Id.

It also emphasized

that “PPG was entitled to provide its own definition for the
terms used in its patent claim, including the transition phrase
‘consisting essentially of,’” and that “PPG could have defined
the scope of the phrase ‘consisting essentially of’ for purposes
of its patent by making clear in its specification what it
regarded as constituting a material change in the basic and

19

novel characteristics of the invention.”

Id.

The Federal

Circuit found that because PPG failed to do so at the claim
construction phase, whether the iron sulfide present in
Guardian’s glass materially affected the basic and novel
properties of PPG’s glass was for a jury to decide.

Id.

The PPG Industries case affirms that claims containing the
phrase “consisting essentially of” must meet the definiteness
requirement of 35 U.S.C. § 112, ¶ 2, but the case also
recognizes that the phrase itself is imprecise.

In order to

assess the definiteness of a patent claim that contains an
imprecise phrase, the construction of the term “consisting
essentially of” can be separated into two categories: (1) the
specific listed ingredients or steps, and (2) the unlisted
ingredients or steps that do not materially affect the basic and
novel properties of the invention.

At the claim construction

phase, a court may construe the second category of a “consisting
essentially of” claim term as long as the patent holder shows,
through the specification and prosecution history, that a person
skilled in the art would know that a particular unlisted
ingredient could materially affect the basic and novel
properties of the patent.

If the patent holder fails to do so,

a jury must determine whether an unlisted ingredient or step
materially affects the basic and novel properties of the
invention.
20

The lesson to be applied to this case, therefore, is that a
court’s assessment of the basic and novel properties may be
performed at the claim construction phase because under certain
circumstances the basic and novel properties of an invention are
part of the construction of a claim containing the phrase
“consisting essentially of.”
The Supreme Court’s decision in Nautilus simply reaffirms
the long-established requirement that a patent’s claims must be
definite.

The Supreme Court issued such a decision to make

clear that centuries-old precedent applying the definiteness
requirement of 35 U.S.C. § 112, ¶ 2, is still the standard
today.

See Nautilus, 134 S. Ct. at 2124, 2130 (finding that the

current terminology “can leave the courts and the patent bar at
sea without a reliable compass”).

The Supreme Court directed,

“In place of the ‘insolubly ambiguous’ standard, we hold that a
patent is invalid for indefiniteness if its claims, read in
light of the specification delineating the patent, and the
prosecution history, fail to inform, with reasonable certainty,
those skilled in the art about the scope of the invention.”

Id.

Through this direction, the Supreme Court recognized the
delicate balance between the inherent limitations of language
and the need for language precise enough to afford clear notice
of what is claimed in order to avoid a zone of uncertainty for
inventors.

Id. at 2129.

Indeed, the Supreme Court observed
21

that “absent a meaningful definiteness check . . . patent
applicants face powerful incentives to inject ambiguity into
their claims,” and that “[e]liminating that temptation is in
order.”

Id. (citations omitted).

The Supreme Court noted that

the “patent drafter is in the best position to resolve the
ambiguity in patent claims.”

Id. (citation omitted).

After setting forth the redefined standard for assessing
definiteness under 35 U.S.C. § 112, ¶ 2, the Supreme Court
remanded the case to the Federal Circuit so that it could apply
the standard to the claim at issue:

a heart rate monitor that

“‘comprise[s],’ among other elements, an ‘elongate member’
(cylindrical bar) with a display device; ‘electronic circuitry
including a difference amplifier’; and, on each half of the
cylindrical bar, a live electrode and a common electrode
‘mounted ... in spaced relationship with each other.’

Id. at

2126 (noting that parties presented differing views on the
definiteness of the term “spaced relationship”).
The Nautilus decision replaced the Federal Circuit’s
amorphous standard for assessing whether a claim is indefinite
with a standard that will allow only claims that meet the
statutory definiteness requirement to stand.

Because the basic

and novel properties of an invention are part of the
construction of a claim containing the phrase “consisting
essentially of,” the Nautilus standard applies to the assessment
22

of an invention’s basic and novel properties.

Accordingly, the

construction of the basic and novel properties is governed by 35
U.S.C. § 112, ¶ 2 and the accompanying analysis from Nautilus.

3.

The Basic and Novel Properties of the Claimed
Invention Are Indefinite

Horizon has identified five basic and novel properties for
the claimed invention, relying on the specification of the ’828
Patent:

(1) better drying time; (2) higher viscosity; (3)

increased transdermal flux; (4) greater pharmacokinetic
absorption; and (5) favorable stability.
35, 9:1–10:47.

’838 Patent at 4:24–

Actavis argues that these are not identified as

the basic and novel properties in the specification, and that
these comparative terms do not provide the “reasonable
certainty” required by Nautilus.
Relying on the canons of claim construction, the Court
agrees with Horizon that the specification does identify these
five properties as the “Characteristics of the Gel Formulation.”
’838 Patent at 9:1–10:47.

Further, these characteristics are

identified early on in the summary of the invention as being the
characteristics that demonstrate improvement over the prior art.
’838 Patent at 4:23–35.

This is sufficient to identify these as

the basic and novel properties of the claimed invention.

23

See

L’Oreal, slip op. at 1 n.2 (identifying basic and novel
properties even when not clearly titled as such). 8
The focus now shifts to Actavis’ position that the
identified basic and novel properties are indefinite under 35
U.S.C. § 112, ¶ 2.

Actavis argues that these generic

comparative terms are too imprecise to be definite.

As an

exemplar of their argument, Actavis points to the first
identified basic and novel property -- better drying time. 9
In the section of the specification that identifies the
basic and novel properties, under the subheading for “Drying
Time,” the specification explains that “[r]elative to previously
disclosed [liquid] compositions . . . the compositions of the
invention dry quicker . . . . The drying time difference is
evident when equal amounts of the two products are tested on
opposite limbs.

Within thirty (30) minutes the compositions of

the invention are almost completely dry whereas a significant
amount of the previously described liquid formulation remains.”

8

Even if the Court were to accept Actavis’ invitation to
extrapolate out the requirements of means-plus-function claiming
under 35 U.S.C. § 112, ¶ 6 to require a clear identification,
which it does not do so, the ’838 Patent would accomplish this.
9

The parties briefed the definiteness of the claim term “a
greater drying rate” in their opening Markman briefs and
submitted expert declarations on the issue. Subsequently,
Horizon dropped claims including this term, and the issue was
not briefed again in responsive Markman briefs or in responsive
expert declarations.
24

’838 Patent at 10:5–21.

No data is ever provided in the

specification for this on-limb testing.

This section of the

specification then discusses how to test for drying time more
quantitatively and refers to data from an example later in the
specification.

See ’838 Patent at 10:22–30. 10

Turning to Example 5 and Table 12 which discuss drying
time, there is an apparent problem in the assertion from earlier
in the specification that the claimed invention would be drier
within thirty minutes.

Example 5 is conducted using the “more

quantitative[ ]” method, wherein the formulations are spread on
a plate and weighed at various time intervals, with “dryness”
being determined by the percentage of weight remaining on the
plate.

See ’838 Patent at 21:38–22:49.

Example 5 discusses

three different gel compositions, all of which are embodiments
of the claimed invention of the ’838 Patent.

See id.

Of the

three gel compositions, only two of the described compositions
are “drier” than the prior art liquid comparative at thirty

10

The specification refers to Table 11 and Figure 10. ’838
Patent at 10:29–30. However, these contain transdermal flux
data and not weight and drying time, whereas Table 12 and Figure
11 contain the weight and drying time data. Accordingly, the
Court finds this is a typographical error and one a POSA
reviewing the ’838 Patent would readily understand to look to
Table 12 and Figure 11 rather than Table 11 and Figure 10. Cf.
Lucent Techs., Inc. v. Gateway, Inc., 525 F.3d 1200, 1215 & n.8
(Fed. Cir. 2008) (permitting courts to redraft claim language
“when there is an obvious administrative or typographical error
not subject to reasonable debate”) (citing Hoffer v. Microsoft
Corp., 405 F.3d 1326, 1331 (Fed. Cir. 2005)).
25

minutes.

’838 Patent at Table 12.

The third formulation shows

100% of the weight remaining at thirty minutes as compared to
the prior art liquid comparative which shows 95.6% of its weight
remaining.

Id.

Only at four hours does the third formulation

begin to show that it is drier than the prior art liquid
comparative (86.8% vs. 93%).

Id.

The contradictions specifically within Example 5 are even
more problematic.

Example 5 claims that “even within the first

five minutes, the three gel formulations displayed more rapid
drying than the liquid formulation.”

’838 Patent at 21:63–65.

This is simply not supported by the data, which shows that at
five minutes the third formulation had 100.3% of its weight
present as compared to 98.1% of the prior art liquid
comparative.

’838 Patent at Table 12.

In short, the specification describes two different methods
for evaluating “better drying time,” and the two methods do not
provide consistent results at consistent times.

Further, the

claimed results are not seen across all formulations of the
claimed invention, and when “dryness” is evaluated at any time
shorter than four hours, not all formulations of the claimed
invention actually exhibit “better drying time.”

Horizon’s

expert urges the Court to only evaluate the drying rate at the
twenty-four hour mark.

(See Walters Opening Decl. ¶¶ 89–96.)

However, Dr. Walters’ reasoning does not comport with the plain
26

language of the specification, as explained.

Even considering

his references to the prosecution history, these still do not
provide any clarity on the appropriate time frame under which to
evaluate the drying rate.

(See id. ¶ 92; Walters Ex. P.)

More

persuasive is Dr. Kohn’s reasoning that a POSA would not know
under what standard to evaluate the drying rate of the claimed
invention.

(See Michniak-Kohn Decl. ¶¶ 23–31.)

The result is that the “better drying rate” basic and novel
property is indefinite.

If a POSA reading the patent would

understand the five principles identified by Horizon to be the
basic and novel properties of the claimed invention, then once
one of them is indefinite, they all become problematic.

As

stated, the purpose of the requirement of 35 U.S.C. § 112, ¶ 2
is to “inform those skilled in the art about the scope of the
invention with reasonable certainty.”
2129.

Nautilus, 134 S. Ct. at

Once one property does not have “reasonable certainty,”

it follows that the group of properties itself does not have the
requisite “reasonable certainty.”

Consequently, the term

“consisting essentially of” must be construed as indefinite due
to the inability for a POSA to have “reasonable certainty” about
what the basic and novel properties of the invention are, and
thus the POSA would lack “reasonable certainty” about whether an
additional ingredient would materially alter the basic and novel
properties of the claimed invention.
27

III. CONCLUSION
For the foregoing reasons, the disputed terms are all held
to be indefinite under 35 U.S.C. § 112, ¶ 2.

Date:
August 17, 2016
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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