Why Did the Supreme Court GVR the Shire Lialda Case?

29 January 2015 PharmaPatents Blog

On January 26, 2015, the Supreme Court granted certiorari, vacated, and remanded Shire Development LLC v. Watson Pharmaceuticals, Inc., to the Federal Circuit “for further consideration in light of Teva Pharmaceuticals USA, Inc., v. Sandoz, Inc.” But, if Teva v. Sandoz still calls for de novo review when the claim construction was based only on intrinsic evidence, the Federal Circuit will not have to revise its analysis on remand. 

The Patent at Issue

The patent at issue was Shire’s U.S. Patent 6,773,720, directed to controlled-release oral pharmaceutical compositions for treating inflammatory bowel diseases, related to the Shire Lialda® (mesalazine) product. Claim 1 recites

1. Controlled-release oral pharmaceutical compositions containing as an active ingredient 5-amino-salicylic acid, comprising:
a) an inner lipophilic matrix consisting of substances selected from the group consisting of … wherein the active ingredient is dispersed both in said the lipophilic matrix and in the hydrophilic matrix;
b) an outer hydrophilic matrix wherein the lipophilic matrix is dispersed, and said outer hydrophilic matrix consists of compounds selected from the group consisting of … ;
c) optionally other excipients
wherein the active ingredient is present in an amount of 80 to 95% by weight of the total composition, and wherein the active ingredient is dispersed both in the lipophilic matrix and in the hydrophilic matrix.

The Claim Construction Issues

In its original decision, the Federal Circuit conducted a de novo review of the district court’s claim construction, determined it was incorrect, reversed the district court’s finding of infringement, and remanded for proceedings consistent with its opinion.

The claim construction issues surrounded the terms “inner lipophilic matrix” and “outer lipophilic matrix.” The district court construed “inner lipophilic matrix” as meaning “a matrix including at least one lipophilic excipient where the matrix is located within one or more substances,” and construed “outer hydrophilic matrix” as “a matrix of at least one hydrophilic excipient, where the matrix is located outside the inner lipophilic matrix.” The district court “rejected Watson’s position that the inner matrix and outer matrix must be ‘separate and distinct.’”

The Federal Circuit determined that each matrix as a whole “—not just an excipient within the matrix—” must exhibit the stipulated to lipophilic characteristic, and that the the inner matrix and outer matrix must be separate.

Both the district court’s claim construction and the Federal Circuit’s claim construction were based only on intrinsic evidence. For example, the Federal Circuit stated:

The prosecution history, the structure of the claim itself, the ordinary meaning of the claim terms, including the Markush group limitations, and the patent’s description of the invention compel a claim construction which requires that the inner lipophilic matrix is separate from the outer hydrophilic matrix.

Teva v. Sandoz

In Teva v. Sandoz (which I summarized here), the Supreme Court held that ”the ‘evidentiary underpinnings’ of claim construction … must be reviewed for clear error on appeal.” But, the Court also stated:

As all parties agree, when the district court reviews only evidence intrinsic to the patent (the patent claims and speci­fications, along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo.

Since the claim construction in Shire appears to have been based only on intrinsic evidence, the Federal Circuit’s original analysis was fully consistent with the new guidance provided in Teva v. Sandoz.Thus, the court should not have to revisit its analysis or disturb its previous findings when it rehears the case on remand.

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