FEDERAL TRADE COMMISSION v. ABBVIE INC et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 9/15/17. 9/15/17 ENTERED AND COPIES EMAILED.(rf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FEDERAL TRADE COMMISSION
ABBVIE INC., et al.
September 15, 2017
The Federal Trade Commission (“FTC”) has filed this
action against defendants AbbVie Inc., Abbott Laboratories, and
Unimed Pharmaceuticals LLC (collectively “AbbVie”), 1 as well as
against Besins Healthcare Inc.
The FTC alleges that the
defendants engaged in monopolistic conduct in violation of
Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.
Section 45(a)(1) states that “[u]nfair methods of
competition in or affecting commerce, and unfair or deceptive
acts or practices in or affecting commerce, are hereby declared
As part of its claim for relief, the FTC asserts that
the defendants filed sham patent infringement lawsuits against
two competitors, Teva Pharmaceuticals USA, Inc. and Perrigo
Company, which were seeking approval from the U.S. Food and Drug
1. AbbVie came into existence in January 2013 when it separated
from Abbott Laboratories. Unimed is a wholly-owned, indirect
subsidiary of AbbVie. Solvay is a wholly-owned subsidiary of
Administration (“FDA”) for generic versions of AndroGel 1%, the
defendants’ brand-name product. 2
AndroGel 1% is a transdermal
testosterone replacement therapy gel.
It has been approved by
the FDA for the treatment of conditions in men associated with a
deficiency or absence of endogenous testosterone and is
protected by U.S. Patent No. 6,503,894 (“the ‘894 patent”).
FTC further alleges that the defendants possessed monopoly power
with respect to AndroGel 1% at the time of the filing of the
The court has before it the motions 3 of the defendants
for summary judgment on Count One of the complaint and the
motion of the plaintiff FTC for partial summary judgment on the
objective baselessness element of the sham litigation prong of
their illegal monopolization claim. 4
2. Those lawsuits were Abbott Products, Inc. v. Teva
Pharmaceuticals USA, Inc., Civil Action No. 11-384 (D. Del.),
and Abbott Products, Inc. v. Perrigo Co., Civil Action
No. 11-6357 (D.N.J.), respectively.
3. The defendants originally moved for summary judgment in
February 2015 before discovery had been conducted in this case.
These motions are now ripe for the court’s review.
4. The court previously dismissed Count Two, which was the only
other claim for relief, wherein the FTC asserted that AbbVie had
entered into an anticompetitive settlement with Teva of their
underlying patent infringement litigation against Teva. See FTC
v. AbbVie Inc., 107 F. Supp. 3d 428, 438 (E.D. Pa. 2015).
Although Teva was named as a defendant in this action, as result
of the dismissal of Count Two, Teva is no longer a party.
We first turn to the undisputed facts from the
prosecution history record of the ‘894 patent, which issued on
January 7, 2003 from U.S. Patent Application Serial No.
09/651,777 (“the ‘777 application”).
The patent application process began in August 2000
when AbbVie and Besins filed an application for a
“pharmaceutical composition comprising testosterone in a gel
formulation, and to methods of using the same.”
Claim 1 of the
‘777 application read:
A pharmaceutical composition useful for the
percutaneous delivery of an active
pharmaceutical ingredient, comprising:
(a) a C1-C4 alcohol;
(b) a penetration enhancer;
(c) the active pharmaceutical
Claim 1 encompassed all penetration enhancers
without limitation. 5
The ‘777 application explained that “[a]
‘penetration enhancer’ is an agent known to accelerate the
delivery of the drug through the skin.”
description in the ‘777 application stated:
5. On page thirty-three of their brief in support of their
motion for summary judgment, the defendants state that there are
at least 30,000,000 penetration enhancers. (Doc. # 241).
Non-limiting examples of penetration
enhancers include C8-C22 fatty acids such as
isostearic acid, octanoic acid, and oleic
acid; C8-C22 fatty alcohols such as oleyl
alcohol and lauryl alcohol; lower alkyl
esters of C8-C22 fatty acids such as ethyl
oleate, isopropyl myristate, butyl stearate,
and methyl laurate; di(lower)alkyl esters of
C6-C8 diacids such as diisopropyl adipate;
monoglycerides of C8-C22 fatty acids such as
glyceryl monolaurate; tetrahydrofurfuryl
alcohol polyethylene glycol ether;
polyethylene glycol, propylene glycol;
2-(2-ethoxyethoxy)ethanol; diethylene glycol
monomethyl ether; alkylaryl ethers of
polyethylene oxide; polyethylene oxide
monomethyl ethers; polyethylene oxide
dimethyl ethers; dimethyl sulfoxide;
glycerol; ethyl acetate; acetoacetic ester;
N-alkylpyrrolidone; and terpenes.
Isopropyl myristate is the penetration
enhancer actually used in AndroGel 1%.
In June 2001, the patent examiner at the U.S. Patent
and Trademark Office (“PTO”) rejected claims 1-9 and 35-36 6 of
the ‘777 application as obvious over prior art references Mak in
view of Allen, among others.
Allen is an international patent
application published in September 1996, which discloses the use
of isopropyl myristate, isopropyl palmitate, and three other
penetration enhancers in a nitroglycerin cream.
Mak is an
international patent application published in May 1999, which
discloses a transdermal testosterone gel that uses the
6. Claims 10-34 already had been withdrawn by the applicants by
the time that the PTO issued its June 2001 office action.
penetration enhancer oleic acid.
In rejecting the claims of the
‘777 application, the examiner stated “[s]ince all composition
components herein are known to be useful for the percutaneous
delivery of pharmaceuticals, it is considered prima facie
obvious to combine them into a single composition useful for the
very same purpose.”
In response to the June 2001 office action rejecting
the claim of all penetration enhancers, AbbVie and Besins
submitted their first amendment to their ‘777 application in
Claim 1 of the amended ‘777 application now read:
A pharmaceutical composition useful for the
percutaneous delivery of an active
pharmaceutical ingredient, consisting
(a) at least one penetration enhancer
selected from the group consisting of
isostearic acid, octanoic acid, lauryl
alcohol, ethyl oleate, isopropyl
myristate, butyl stearate, methyl
laurate, diisopropyl adipate, glyceryl
alcohol, polyethylene glycol ether,
polyethylene glycol, propylene glycol,
2-(2-ethoxyethoxy) ethanol, diethylene
glycol monomethyl ether, alkylaryl
ethers of polyethylene oxide,
polyethylene oxide monomethyl ethers,
polyethylene oxide dimethyl ethers,
dimethyl sulfoxide, glycerol, ethyl
acetate, acetoacetic ester,
N-alkylpyrrolidone, terpene, and
combinations of any of the foregoing;
In this amendment, AbbVie and Besins narrowed
their claim from one encompassing all penetration enhancers to a
claim naming only twenty-four penetration enhancers, including
They also added several new claims.
new claim 47, AbbVie and Besins claimed “a penetration enhancer
selected from the group consisting of isopropyl myristate and
In new claims 61 and 62, they identified only
isopropyl myristate as the penetration enhancer.
In support of the October 2001 amendment, the
defendants argued to the examiner that “[a]pplicants’ invention
is not obvious because of secondary considerations recognized by
the courts as indicia of non-obviousness.”
They submitted the
declaration of Jean-Louis Anspach, the chief executive officer
of Unimed Pharmaceuticals, Inc., stating that “Unimed launched
AndroGel® in June 2000, and it has met with substantial
commercial success as shown below.”
The AndroGel product used
only isopropyl myristate as the penetration enhancer.
On December 6, 2001, attorneys for AbbVie and Besins
met with the patent examiner to discuss the October 2001
In her interview summary, the examiner noted that
claims 61 and 62, which identified only isopropyl myristate as
the penetration enhancer, “are seen to be allowable over the
The interview summary also stated that “applicants
argued claim 47 is novel [and] nonobvious over the prior art
because the prior art does not teach the composition with
As previously stated, claim 47
identified isopropyl myristate and lauryl alcohol as penetration
Two weeks later, on December 21, 2001, AbbVie and
Besins submitted a supplemental amendment to their patent
They cancelled the October 2001 amended claim 1 in
its entirety and amended claim 47 to specify only isopropyl
myristate as the penetration enhancer.
As a result, they
reduced the number of penetration enhancers in the ‘777
application from twenty-four to one.
AbbVie and Besins also
modified the concentration ranges for isopropyl myristate in
In support of their amended application, AbbVie and
With entry of the above amendments and in
view of the foregoing remarks, it is
respectfully submitted that claims 47, 48,
51, 52, 54-62, 66-96 are in condition for
allowance. . . . Accordingly,
reconsideration and withdrawal of the
outstanding rejections and allowance of the
present claim is respectfully solicited.
They further asserted that “[t]he prior art does not teach the
claimed combination; therefore, it is patentable.”
AbbVie and Besins submitted additional amendments in
February 2002, July 2002, and August 2002.
The February 2002
amendment narrowed the concentration range for isopropyl
myristate in claims 47 and 61 and cancelled claim 62.
and Besins stated in the February 2002 that they sought
“reconsideration and withdrawal of the outstanding rejections
and allowance of the present claims.”
The July 2002 and
August 2002 amendments contained additional changes not relevant
The patent examiner finally issued a Notice of
Allowability in August 2002 as to claims 47-48, 51-52, 54-57,
61, 78-81, 83, 87-89, and 97-121.
The examiner wrote that
“[t]he claimed pharmaceutical composition consisting essentially
of the particular ingredients herein in the specific amounts, is
not seen to be taught or fairly suggested by the prior art as
The examiner then distinguished the most
recent version of the ‘777 application from the previous
versions of the application and from the prior art references
Mak and Allen, among others, that were the bases for her
rejections in her June 2001 office action.
approved the application because “the prior art [including
Allen] does not teach or fairly suggest the instant claimed
pharmaceutical composition consisting essentially of the
specific ingredients herein in the particular amounts.”
In January 2003, the ‘894 patent issued.
myristate was now the only claimed penetration enhancer.
‘894 patent expires in 2020.
Thereafter, Perrigo and Teva, two competitors of
AbbVie and Besins, developed generic versions of AndroGel 1%.
In order to be able to market their generic products, Perrigo
and Teva sought approval from the FDA.
Perrigo’s product was
similar to AndroGel 1% in most respects, except that it used
isostearic acid, rather than isopropyl myristate, as the
Teva’s product used isopropyl palmitate
rather than isopropyl myristate as its penetration enhancer.
In April 2011 and October 2011, AbbVie and Besins
filed lawsuits against Teva and Perrigo.
In those lawsuits,
AbbVie and Besins maintained that Teva’s and Perrigo’s generic
products infringed the ‘894 patent under the doctrine of
They did not allege literal infringement.
At the time the lawsuits were filed, Teva and Perrigo
were still in the process of obtaining approval of their generic
products from the FDA.
By filing the lawsuits, AbbVie and
Besins automatically triggered a thirty-month stay of FDA
approval of those generic products.
See 21 U.S.C.
This step delayed entry of the Teva and Perrigo
generic products into the market where they would compete with
Perrigo began selling its generic product in
December 2014 while Teva has not launched its generic product.
In Count One, the only remaining claim in this action,
the FTC asserts that AbbVie and Besins engaged in illegal
monopolization by filing sham patent litigation against Perrigo
and Teva so as to delay entry of their generic products into the
testosterone gel market where those generic products would
compete with the defendants’ AndroGel 1%.
In order to prove a
claim of illegal monopolization, the FTC must establish both:
“(1) the possession of monopoly power [by the defendants] in the
relevant market and (2) the willful acquisition or maintenance
[by the defendants] of that power.” 7
Broadcom Corp. v. Qualcomm,
Inc., 501 F.3d 297, 306-07 (3d Cir. 2007) (quoting United States
v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)).
As noted above, the defendants have filed a motion for
summary judgment, and the FTC has filed a motion for partial
Under Rule 56 of the Federal Rules of Civil
Procedure, summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
7. Although this standard for illegal monopolization comes from
cases interpreting the Sherman Act, 15 U.S.C. § 2, it is
well-settled that § 45(a) of the FTC Act, the relevant statutory
provision here, contemplates a range of conduct that includes,
but is not limited to, conduct that violates the Sherman Act.
See, e.g., FTC v. Ind. Fed’n of Dentists, 476 U.S. 447, 454
Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323
A dispute is genuine if the evidence is such that a
reasonable factfinder could return a verdict for the nonmoving
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
Summary judgment is granted where there is insufficient
record evidence for a reasonable factfinder to find for the
When ruling on a motion for summary judgment,
we view the facts and draw all inferences in favor of the nonmoving
See In re Flat Glass Antitrust Litig., 385 F.3d 350, 357
(3d Cir. 2004).
The FTC seeks partial summary judgment as to only the
willful acquisition or maintenance of monopoly power prong of
the illegal monopolization claim.
In particular, the FTC
alleges that the defendants willfully acquired or maintained
monopoly power by filing sham patent infringement litigation
against Teva and Perrigo.
Although parties generally may not be
held liable for violating the antitrust laws for petitioning the
government for redress, this immunity does not extend to sham
See Prof’l Real Estate Inv’rs, Inc. v. Columbia
Pictures Indus., Inc. (“PRE”), 508 U.S. 49, 57 (1993) (citing
United Workers of Am. v. Pennington, 381 U.S. 657, 670 (1965);
E. R.R. Presidents Conference v. Noerr Motor Freight, Inc.,
365 U.S. 127, 144 (1961)); In re Wellbutrin XL Antitrust Litig.,
___ F.3d ___, 2017 WL 3531069, at *6 (3d Cir. Aug. 9, 2017).
To prove that the infringement actions filed by AbbVie
and Besins against Teva and Perrigo were shams, the FTC must
establish that: (1) those lawsuits were objectively baseless;
and (2) those filing the lawsuits subjectively intended to
interfere directly with a competitor’s business interests using
government process as an anticompetitive weapon.
508 U.S. at 60-61.
The second element concerning the subjective
intent of the defendants is not now before the court.
The defendants argue that they are entitled to summary
judgment because the FTC cannot make out as a matter of law
either the objective baselessness element of the sham litigation
prong or the monopoly power prong of the illegal monopolization
We begin with the objective baselessness element of
the sham litigation prong of the monopolization claim.
Litigation is objectively baseless if “no reasonable litigant
could realistically expect success on the merits.”
508 U.S. at 60.
To demonstrate that litigation is objectively
baseless, “the plaintiff [must] prove that the defendant lacked
probable cause” in filing the underlying lawsuit.
See id. at
Probable cause “requires no more than a ‘reasonabl[e]
belie[f] that there is a chance that [a] claim may be held valid
Id. at 62-63 (quoting Hubbard v. Beatty &
Hyde, Inc., 178 N.E.2d 485, 488 (Ma. 1961)).
In the two underlying lawsuits at issue here, AbbVie
and Besins alleged that Teva’s use of the isopropyl palmitate as
a penetration enhancer and Perrigo’s use of isostearic acid for
that same purpose in their respective generic products infringed
the ‘894 patent under the doctrine of equivalents.
Besins did not assert that Teva and Perrigo engaged in literal
infringement since the ‘894 patent disclosed the use of only
isopropyl myristate, a different penetration enhancer.
AbbVie and Besins claimed that isopropyl palmitate and
isostearic acid were the equivalents of isopropyl myristate.
The doctrine of equivalents provides that “[t]he scope
of a patent is not limited to its literal terms but instead
embraces all equivalents to the claims described.”
v. Shoketsu Kinzoku Kogyo Kabushiki Co. (“Festo VIII”), 535 U.S.
722, 732 (2002) 8; see also Warner-Jenkinson Co. v. Hilton Davis
Chem. Co., 520 U.S. 17, 29 (1997).
“The doctrine of equivalents
allows the patentee to claim those insubstantial alterations
8. There were numerous opinions written by the Federal Circuit,
Supreme Court, and other federal courts during the course of
litigation between Festo Corporation and Shoketsu Kinzoku Kogyo
Kabushiki Company. Although this Memorandum does not mention
many of the related cases, we will refer to the cases that are
mentioned by their place in the litigation series, as has been
done by other courts.
that were not captured in drafting the original patent claim but
which could be created through trivial changes.”
535 U.S. at 733.
An element of the alleged infringing product
is equivalent to an element of the patented invention if the
alleged equivalent is insubstantially different.
Equip. Co. v. Ky. Farms, Inc., 140 F.3d 1009, 1015-16 (Fed. Cir.
1998) (citing Warner-Jenkinson Co., 520 U.S. at 40).
The FTC does not dispute that the penetration
enhancers used by Perrigo and Teva are insubstantially different
from the isopropyl myristate penetration enhancer used in
AndroGel 1% and disclosed in the ‘894 patent.
Rather, the FTC
maintains that the lawsuits against Teva and Perrigo were
objectively baseless under the doctrine of prosecution history
This doctrine with certain exceptions precludes a
patentee from claiming equivalents if the patentee surrendered
the equivalents for reasons of patentability during the patent
See Festo VIII, 535 U.S. at 733-34.
FTC argues that the defendants are estopped from claiming that
the isostearic acid used in the Perrigo product or the isopropyl
palmitate used in the Teva product are equivalents of the
isopropyl myristate claimed in the ‘894 patent because, in the
FTC’s view, the defendants clearly and affirmatively surrendered
those penetration enhancers during the patent prosecution.
As the Supreme Court has explained, prosecution
history estoppel balances the rights of patentees with the
interest of the public in understanding the limits of the patent
so that the public may “be encouraged to pursue innovations,
creations, and new ideas beyond the inventor’s exclusive
See id. at 731-32.
It also “ensures that the doctrine
of equivalents remains tied to its underlying purpose” of
acknowledging “language’s inability to capture the essence of
Id. at 734.
When the prosecution history record
demonstrates that the patentee “turned his attention to the
subject matter in question, knew the words for both the broader
and narrower claim, and affirmatively chose the latter,” the
patentee is not entitled to the protections of the doctrine of
equivalents as to that subject matter.
Id. at 734-35.
purpose of applying the estoppel in the first place [is] to hold
the inventor to the representations made during the application
process and to the inferences that may reasonably be drawn from
Id. at 737-38.
For the patentee to prevail
against the defense of prosecution history estoppel, “[t]he
patentee must show that at the time of the amendment one skilled
in the art could not reasonably be expected to have drafted a
claim that would have literally encompassed the alleged
See id. at 741.
The Supreme Court has placed the
burden on the patentee to establish that any amendment is not
for the purpose of patentability.
Id. at 739.
The Federal Circuit has set forth a well-established
three-step inquiry for determining whether prosecution history
estoppel bars the defendants from claiming the doctrine of
First, estoppel applies only if the court
determines that “an amendment filed in the Patent and Trademark
Office (“PTO”) has narrowed the literal scope of a claim.”
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. (“Festo
IX”), 344 F.3d 1359, 1366 (Fed. Cir. 2003) (citing Festo VIII,
535 U.S. at 740; Pioneer Magnetics, Inc. v. Micro Linear Corp.,
330 F.3d 1352, 1356 (Fed Cir. 2003)).
This first step requires us to identify the relevant
amendments in the ‘777 application.
The case law is clear that
we must consider the entire prosecution history in determining
whether estoppel applies.
See Wang Labs., Inc. v. Toshiba
Corp., 993 F.2d 858, 867 (Fed. Cir. 1993); Tex. Instruments,
Inc. v. U.S. Int’l Trade Comm’n, 988 F.2d 1165, 1174 (Fed. Cir.
Yet, with respect to the Teva patent infringement
litigation, the defendants argue that only the October 2001
amendment is relevant.
In the October 2001 amendment, the
defendants narrowed their original claim encompassing all
penetration enhancers to a claim limited to twenty-four
identified penetration enhancers.
This amendment did not name
and thus excluded isopropyl palmitate, the penetration enhancer
in Teva’s generic product.
The amendment, however, specifically
included isostearic acid, the penetration enhancer in Perrigo’s
generic product, among the twenty-four penetration enhancers
that the defendants claimed.
Thus, for the patent infringement
litigation against Perrigo, the defendants ask us to look only
to the December 2001 amendment which eliminated isostearic acid
from the scope of the ‘777 application.
While we agree with the defendants that the
prosecution history estoppel inquiry takes into account only the
relevant amendments in the prosecution history, we disagree with
the defendants’ characterization of what is relevant.
examiner, we note, rejected in June 2001 claim 1 which claimed
all penetration enhancers.
In light of this rejection, over the
course of their October 2001, December 2001, and February 2002
amendments, the defendants without question narrowed the claimed
penetration enhancers in the ‘777 application from all
penetration enhancers including those used in the Teva and
Perrigo products to only isopropyl myristate at a particular
We must focus on the above history in its
entirety to obtain an accurate understanding of what occurred.
9. In July 2002 and August 2002, the defendants made additional
amendments to other aspects of the claimed invention that are
not at issue here.
Having determined that the October 2001,
December 2001, and February 2002 amendments narrowed the
relevant claims after the examiner’s rejection in June 2001,
“the second question [for determining prosecution history
estoppel] is whether the reason for that amendment was a
substantial one relating to patentability.”
344 F.3d at 1366-67.
See Festo IX,
Prosecution history estoppel applies to
amendments made for a substantial reason relating to
patentability -- whether to address an earlier rejection or for
some other reason that satisfies a requirement of the Patent
Act, 35 U.S.C. §§ 101, et seq.
Festo VIII, 535 U.S. at 727).
See id. at 1366 (citing
As noted above, the patentee
“bear[s] the burden of showing that the amendment does not
surrender the particular equivalent in question.”
535 U.S. at 740; Festo IX, 344 F.3d at 1368.
In doing so, the
patentee “is restricted to the evidence in the prosecution
Festo IX, 344 F.3d at 1367 (citing
Warner-Jenkinson Co., 520 U.S. at 33)).
Even if the amendment was for purposes of
patentability, the patentee can rebut the presumption of
surrender by demonstrating:
(1) the alleged equivalent was
“unforeseeable at the time of the application;” (2) “the
rationale underlying the amendment [ ] bear[s] no more than a
tangential relation to the equivalent in question;” or (3) there
is “some other reason suggesting that the patentee could not
reasonably be expected to have described the insubstantial
substitute in question.”
See Festo VIII, 535 U.S. at 740-41
In this case, the defendants rely only on the
tangential relation exception.
“The tangential relation
criterion for overcoming the Festo presumption is very narrow.”
Honeywell Int’l, Inc. v. Hamilton Sundstrand Corp., 523 F.3d
1304, 1315 (Fed. Cir. 2008).
It “asks whether the reason for
the narrowing amendment was peripheral, or not directly
relevant, to the alleged equivalent.”
Festo IX, 344 F.3d at
This inquiry “focuses on the patentee’s objectively
apparent reason for the narrowing amendment.”
The question whether the patentee demonstrated a
tangential relation is a matter of law for the court to decide.
The court limits its review to “the prosecution history record
without the introduction of additional evidence, except, when
necessary, testimony from those skilled in the art as to the
interpretation of that record.”
Id. at 1370.
This analysis “is
an objective one that depends on what a competitor would
reasonably conclude from the patent’s prosecution history.”
See Mark I Mktg. Corp. v. R.R. Donnelley & Sons Co., 66 F.3d
285, 291 (Fed. Cir. 1995).
Turning first to the underlying patent infringement
litigation filed by AbbVie and Besins against Teva, the
defendants concede that they excluded isopropyl palmitate, the
penetration enhancer used by Teva, from the scope of the
‘777 application for purposes of patentability.
they argue that it was objectively reasonable to bring that
lawsuit against Teva because the October 2001 amendment
excluding isopropyl palmitate was tangential to isopropyl
Relying on expert testimony, 10 the defendants contend
that the sole purpose of the October 2001 amendment was to
exclude oleic acid, which is the penetration enhancer disclosed
in the Mak prior art reference.
Oleic acid, like isopropyl
palmitate, was not one of the twenty-four penetration enhancers
claimed in the October 2001 amendment.
It is undisputed that the October 2001 amendment did
not simply eliminate oleic acid or its components.
examiner, it must be remembered, had rejected the original
claim 1 encompassing all penetration enhancers in June 2001.
The October 2001 amendment sought to overcome the rejection by
narrowing the original claim 1 for all penetration enhancers to
It thereby excluded not only oleic acid but
10. Testimony from a person skilled in the art is not necessary
to interpret the prosecution history record in this case.
See Festo IX, 344 F.3d at 1370. Yet, even if we were to take
into account the rationale offered by the expert witness for the
October 2001 amendment, the defendants are nevertheless estopped
from asserting the doctrine of equivalents with respect to
isopropyl palmitate for the reasons explained below.
also isopropyl palmitate and countless other penetration
enhancers previously rejected.
If AbbVie and Besins merely
sought to relinquish oleic acid and no other penetration
enhancer in October 2001, they easily could have said so.
defendants’ latter-day explanation for the October 2001
amendment is groundless.
It fails the reasonableness test in
light of the examiner’s June 2001 broad-based rejection to say
that the abandonment of isopropyl palmitate and many other
penetration enhancers was incidental to abandoning only oleic
See Felix v. Am. Honda Motor Co., 562 F.3d 1167, 1184
(Fed. Cir. 2009); Amgen, Inc. v. Hoechst Marion Roussel, Inc.,
457 F.3d 1293, 1314-15 (Fed. Cir. 2006).
In addition, the Mak prior art, which disclosed the
use of oleic acid, was not the only prior art that AbbVie and
Besins had to address to overcome the examiner’s rejection.
June 2001, the examiner had found the ‘777 application obvious
in light of the Allen prior art, among others.
The Allen prior
art listed isopropyl palmitate as one of five penetration
enhancers and used isopropyl palmitate in six of its nine
It cannot be doubted from reading the
prosecution history record that the defendants sought to address
the examiner’s June 2001 obviousness rejection based on the
Allen prior art when they relinquished the isopropyl palmitate
penetration enhancer in filing their October 2001 amendment.
The surrender of isopropyl palmitate in the October 2001
amendment to avoid prior art is “the classic basis for the
application of prosecution history estoppel.” 11
Magnetics, Inc. v. Micro Linear Corp., 330 F.3d 1352, 1357
(Fed Cir. 2003); Festo IX, 344 F.3d at 1369.
The defendants further argue that the October 2001
amendment could not have intended to overcome the Allen prior
art with its disclosure of isopropyl palmitate because Allen
also disclosed isopropyl myristate, which was included in the
The defendants’ argument is without any merit.
The defendants, during the patent prosecution, cited
to evidence of secondary considerations of non-obviousness to
support their inclusion of isopropyl myristate at a particular
Moreover, as the Federal Circuit has explained:
[T]here is no principle of patent law that
the scope of a surrender of subject matter
during prosecution is limited to what is
absolutely necessary to avoid a prior art
reference that was the basis for an
examiner’s rejection. To the contrary, it
frequently happens that patentees surrender
more through amendment than may have been
absolutely necessary to avoid particular
prior art. In such cases, we have held the
patentees to the scope of what they
ultimately claim, and we have not allowed
them to assert that claims should be
interpreted as if they had surrendered only
what they had to.
Norian Corp. v. Stryker Corp., 432 F.3d 1356, 1361-62 (Fed. Cir.
concentration in the October 2001 amendment and to overcome
A patent applicant may rely on secondary considerations
of commercial success, long felt but unmet needs, and the
failure of others, among other factors, to overcome an
See KSR Int’l Co. v. Teleflex, Inc.,
550 U.S. 398, 399 (2007) (citing Graham v. John Deere Co. of
Kansas City, 383 U.S. 1, 17-18 (1966)).
In their remarks in
connection with the October 2001 amendment, the defendants
argued to the examiner that “[a]pplicants’ invention is not
obvious because of secondary considerations recognized by the
courts as indicia of non-obviousness.”
In support of their
position, they submitted the declaration of Jean-Louis Anspach,
the chief executive officer of Unimed Pharmaceuticals, Inc.
Anspach stated that “Unimed launched AndroGel® in June 2000, and
it has met with substantial commercial success as shown below.”
Isopropyl myristate, at a concentration within the range
disclosed in the ‘894 patent, is the sole penetration enhancer
in AndroGel 1%.
The defendants singled out isopropyl myristate
on the ground of its commercial success from the other
penetration enhancers disclosed in Allen.
The defendants made
no effort based on commercial success or otherwise to save
isopropyl palmitate or the other penetration enhancers disclosed
in the Allen prior art and found to be obvious by the examiner
in June 2001.
In sum, the defendants have cited no evidence in the
prosecution history record to rebut the presumption of surrender
of isopropyl palmitate.
As the Supreme Court teaches in
Festo VIII, to avoid prosecution history estoppel, the patentee
must establish that it could not reasonably be expected to have
drafted the October 2001 amendment to include isopropyl
See Festo VIII, 535 U.S. at 741.
There is no way
that the defendants can avoid prosecution history estoppel by
arguing that it was reasonable for them not to include isopropyl
palmitate in the October 2001 amendment.
surrender of isopropyl palmitate in the October 2001 amendment
was not tangential or peripheral to the isopropyl palmitate in
Teva’s generic product.
See Festo IX, 344 F.3d at 1369.
We next turn to the isostearic acid penetration
enhancer at issue in the Perrigo infringement action.
defendants contend that it was objectively reasonable to file
infringement litigation against Perrigo because the
December 2001 amendment excluding isostearic acid was not for
purposes of patentability and was tangential to isostearic acid.
In the December 2001 amendment, the defendants disavowed
twenty-three of the penetration enhancers listed in the
October 2001 amendment, including isostearic acid, when they
narrowed the claimed penetration enhancer to isopropyl
The defendants contend that their exclusion of
isostearic acid in December 2001 was not for a substantial
reason related to patentability because it was not in response
to a rejection by the examiner.
They note that the only office
action rejecting the ‘777 application was issued by the examiner
in June 2001 and that they had since amended the application in
October 2001 to address that office action.
defendants, none of their pending claims stood rejected by the
examiner when they voluntarily submitted another amendment in
The defendants are incorrect.
They would have
the court ignore a significant event in the prosecution history,
that is the examiner’s rejection of all penetration enhancers
including isostearic acid in June 2001.
This we will not do.
Moreover, in the interview summary from the December
6, 2001 interview, the examiner stated that claim 61, which
included only isopropyl myristate as the penetration enhancer,
is “seen to be allowable over the prior art.”
earlier rejection in June 2001 and her position at the
December 6, 2001 interview constituted a telling signal to any
reasonable person that patentability required the narrowing of
any claim so that it disclosed isopropyl myristate at a
particular concentration as the sole penetration enhancer.
The December 2001 amendment also explicitly aimed to
overcome the prior art cited by the examiner in her June 2001
The defendants argued in their December 2001
amendment that “reconsideration and withdrawal of the
outstanding rejections and allowance of the present claims is
They also asserted that “[t]he prior
art does not teach the claimed combination; therefore, it is
The defendants’ statements in their various briefs are
On page three of their brief in opposition to the
motion of the FTC for partial summary judgment (Doc. # 256), the
defendants state that the December 2001 amendment “simplified
the pending claims to accord with subject matter that the
examiner already indicated was allowable over the prior art at a
time when the objective public facts showed that prompt issuance
of at least some claims was of pressing concern.”
defendants admit at page thirty-nine of their brief filed in
support of their summary judgment motion (Doc. # 241) that they
dropped their claim to isostearic acid and the other penetration
enhancers “immediately follow[ing] an interview in which the
examiner stated that a claim reciting isopropyl myristate would
Thus, as the defendants argued in the
prosecution history record and reiterated in their summary
judgment briefs, their December 2001 amendment specifically
aimed to address in pursuit of patentability the examiner’s
prior art objections in the June 2001 office action.
The defendants’ reliance on a so-called voluntary
claim-amendment theory is spurious.
A voluntary claim amendment
is one that the patent examiner does not require or that is not
made based on a specific rejection by the examiner.
amendment does not preclude prosecution history estoppel.
Festo IX, 344 F.3d at 1364, 1366; Pioneer Magnetics, Inc.,
330 F.3d at 1357.
Otherwise a patent applicant could simply
release its claims to subject matter that it believes the
examiner is unlikely to approve before the examiner has issued
an office action and then recapture that material under the
doctrine of equivalents after the patent issues.
defendants are correct, they could recapture the twenty-three
penetration enhancers that they surrendered in December 2001 or
potentially the more than 30,000,000 penetration enhancers that
were encompassed in the original claim 1 and relinquished in
The defendants further contend that by filing the
December 2001 amendment they simply sought to expedite their
patent application in anticipation of the end of the three-year
FDA marketing exclusivity period for AndroGel 1% in
An amendment narrowing the scope of the patent
application in order to expedite the patent prosecution process
is necessarily for the purpose of patentability unless it falls
in a narrow exception.
See Regents of the Univ. of Cal. v.
Dakocytomation Cal., Inc., 517 F.3d 1364, 1378 (Fed. Cir. 2008);
Biogen, Inc. v. Berlex Labs., Inc., 318 F.3d 1132, 1142
(Fed. Cir. 2003).
Furthermore, the defendants’ extrinsic
reasons for seeking expedited approval of their application are
not contained in the prosecution history record and therefore
are not relevant to vitiate prosecution history estoppel.
See Festo IX, 344 F.3d at 1367 (citing Pioneer Magnetics,
330 F.3d at 1356); Tex. Instruments, Inc., 988 F.2d at 1174;
Wang Labs., Inc., 993 F.2d at 867.
As with the isopropyl palmitate in the Teva product,
the defendants have no credible argument to rebut the
presumption of disavowal of isostearic acid in the Perrigo
The December 2001 amendment surrendering isostearic
acid was not peripheral or tangential to isostearic acid.
See Festo IX, 344 F.3d at 1369.
Again, the defendants cannot
overcome prosecution history estoppel because they cannot
establish that it was reasonable for them not to have been
expected to draft the December 2001 amendment to include
The clear language of the Supreme Court in
Festo VIII is decisive.
See Festo VIII, 535 U.S. at 741.
Finally, “the third question in a prosecution history
estoppel analysis addresses the scope of the subject matter
surrendered by the narrowing amendment.”
Festo IX, 344 F.3d
“A patentee’s decision to narrow his claims through
amendment may be presumed to be a general disclaimer of the
territory between the original claim and the amended claim.”
Festo VIII, 535 U.S. at 740.
The Supreme Court explained that
when a patentee narrows “a prior application describing the
precise element at issue . . . . the prosecution history has
established that the inventor turned his attention to the
subject matter in question, knew the words for both the broader
and narrower claim, and affirmatively chose the latter.”
See id. at 734-35.
Consequently, there is a presumption that
the patentee has “surrendered all subject matter between the
broader and the narrower language.”
See id. at 740; Pioneer
Magnetics, Inc., 330 F.3d at 1356 (citing Warner-Jenkinson,
520 U.S. at 33).
Again, the defendants originally claimed all
penetration enhancers in claim 1.
claim as obvious.
The examiner rejected the
Over the course of the patent application
process, they narrowed their claim to isopropyl myristate at a
In so doing, the defendants
relinquished their claims to isopropyl palmitate and isostearic
The defendants cannot now “avoid the PTO’s gatekeeping
role and seek to recapture in an infringement action the very
subject matter surrendered as a condition of receiving the
See Festo VIII, 535 U.S. at 740.
estoppel without question prevents the defendants from claiming
that the doctrine of equivalents encompasses the penetration
enhancers that they abandoned during the application process,
including isopropyl palmitate and isostearic acid.
The defendants clearly surrendered broader language for
See id. at 740.
There is no plausible
argument to overcome the presumption in favor of the application
of prosecution history estoppel.
In sum, the law with respect to sham litigation, the
doctrine of equivalents, and prosecution history estoppel was
well-settled at the time that defendants filed their lawsuits
against Teva and Perrigo in 2011. 12
See PRE, 508 U.S. at 60-61;
Festo VIII, 535 U.S. at 739; Festo IX, 344 F.3d at 1369.
final analysis, it must not be forgotten that the purpose of
prosecution history estoppel is to protect the patentees’
competitors from patent infringement litigation based on the
doctrine of equivalents if the prosecution history demonstrates
that an equivalent not specifically disclosed in the patent has
been purposefully and not tangentially excluded from its scope.
The patentee has the burden to overcome the presumption of
Here, any reasonable person who reads the
12. The Supreme Court has “made it clear that the doctrine of
equivalents and the rule of prosecution history estoppel are
settled law. The responsibility for changing them rests with
Congress.” See Festo VIII, 535 U.S. at 739 (citing
Warner-Jenkinson Co., 520 U.S. at 28).
prosecution history of the ‘894 patent can reach no other
conclusion than that the defendants have purposefully and not
tangentially excluded isopropyl palmitate and isostearic acid as
penetration enhancers equivalent to isopropyl myristate.
The patent lawsuits against Teva and Perrigo were
without question objectively baseless.
AbbVie and Besins could
not realistically have expected success on the merits of this
issue or have had a reasonable belief that they had a chance to
See PRE, 508 U.S. at 60, 62—63.
The FTC is entitled
to partial summary judgment on the objective baselessness
element of the sham litigation prong of their illegal
monopolization claim. 13
To the extent that the defendants move
for summary judgment on objective baselessness, their motion
will be denied.
The defendants also seek summary judgment on the
monopoly power prong of the FTC’s illegal monopolization claim
under Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which, as
previously noted, provides that “[u]nfair methods of competition
in or affecting commerce, and unfair or deceptive acts or
13. The defendants raise a number of other arguments in
opposition to the FTC’s motion for partial summary judgment and
in support of their own motion for summary judgment on the issue
of objective baselessness. Those arguments are without merit
and do not warrant further discussion.
practices in or affecting commerce, are hereby declared
In order to commit illegal monopolization, the
defendants must have had “monopoly power in the relevant
Mylan Pharm., Inc. v. Warner Chilcott Pub. Ltd. Co.,
838 F.3d 421, 433 (3d Cir. 2016).
“[M]onopoly power is ‘the
ability to control prices and exclude competition in a given
Id. at 434 (quoting Broadcom Corp., 501 F.3d at 307).
This is a fact-intensive inquiry.
See Eastman Kodak Co. v.
Image Tech. Servs., Inc., 504 U.S. 451, 482 (1992).
plaintiff has the burden of proof with respect to these
questions of fact.
See Mylan Pharm., Inc., 838 F.3d at 435.
A plaintiff may prove “[t]he existence of monopoly
power . . . through direct evidence of supracompetitive prices
and restricted output.”
See Mylan Pharm., Inc., 838 F.3d at 434
(quoting Broadcom Corp., 501 F.3d at 307).
monopoly power by direct evidence, “a plaintiff must often
provide an analysis of the defendant’s costs, showing both that
the defendant had an ‘abnormally high price-cost margin’ and
that the defendant ‘restricted output.’”
In addition, a plaintiff may prove monopoly power by
“To support a claim of monopoly power
through indirect evidence, [the plaintiff] must show that
(1) Defendants had market power in the relevant market and
(2) that there were barriers to entry into the market.”
Id. at 435.
Products are in the same market if there is
reasonable interchangeability of use and cross-elasticity of
Cross-elasticity of demand is “[a]
relationship between two products, usually substitutes for each
other, in which a price change for one product affects the price
of the other.”
Id. at 435-36 (quoting Black’s Law Dictionary
458 (10th ed. 2014)).
Here, there are genuine disputes of material fact
concerning defendants’ monopoly power.
At this stage, the
defendants are not entitled to judgment as a matter of law as to
the monopoly power prong of the illegal monopolization claim.
See Fed. R. Civ. P. 56(a).
This complex issue will have to
await a trial.
Accordingly, we will grant the motion of the plaintiff
Federal Trade Commission for partial summary judgment on the
objective baselessness element of the sham litigation prong of
its monopolization claim and deny the motions of defendants
AbbVie Inc., Abbott Laboratories, Unimed Pharmaceuticals LLC,
and Besins Healthcare Inc. for summary judgment.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?