No New Cause of Action for Reexamined Patent Claims: Federal Circuit | Practical Law

No New Cause of Action for Reexamined Patent Claims: Federal Circuit | Practical Law

In Senju Pharmaceutical Co. v. Apotex Inc., the US Court of Appeals for the Federal Circuit held that Senju's second patent infringement action based on reexamined claims was barred by claim preclusion because the reexamined claims were merely a subset of the claims Senju asserted in its first action.

No New Cause of Action for Reexamined Patent Claims: Federal Circuit

Practical Law Legal Update 4-563-3745 (Approx. 4 pages)

No New Cause of Action for Reexamined Patent Claims: Federal Circuit

by Practical Law Intellectual Property & Technology
Published on 01 Apr 2014 • USA (National/Federal)
In Senju Pharmaceutical Co. v. Apotex Inc., the US Court of Appeals for the Federal Circuit held that Senju's second patent infringement action based on reexamined claims was barred by claim preclusion because the reexamined claims were merely a subset of the claims Senju asserted in its first action.
On March 31, 2014, the US Court of Appeals for the Federal Circuit held that claim preclusion barred Senju's second patent infringement suit based on reexamined claims because, in the absence of a clear showing of a material difference between claims, reexamined claims are assumed to be a subset of the original patent claims (No. 2013-1027, (Fed. Cir. 2014)).

Background

Senju holds US Patent No. 6,333,045 (the '045 patent), which relates to an opthalmic solution for eye drops that contains the drug Gatifloxacin combined with disodium edetate (EDTA). In July 2007, Apotex filed an Abbreviated New Drug Application (ANDA) seeking approval for a generic version of the opthalmic solution covered by the '045 patent and Senju filed a patent infringement suit based on the ANDA filing. Following a bench trial, the district court found that although Apotex's ANDA product infringed claims 1-3, 6, 7 and 9 of the '045 patent, claims 1-3 and 6-9 were invalid as obvious. Senju moved for a new trial and for an amended judgment on the validity of claim 7. Over one year later, in December 2011, the district court again found claim 7 invalid for obviousness and entered final judgment.
In February 2011, while Senju's post-trial motion was pending, Senju filed a request for reexamination of claims 1-3, 6, 8 and 9 of the '045 patent in the USPTO. During the reexamination, Senju amended claim 6 to include new limitations on the amount of Gatifloxacin, the amount of EDTA and the pH. Senju also added new independent claim 12 with similar limitations. In October 2011, the USPTO issued a reexamination certificate cancelling claims 1-3 and 8-11, and certifying amended claim 6, new independent claim 12 and new dependent claims 13-16 as patentable.
On November 28, 2011, Senju filed a new patent infringement action against Apotex, seeking a declaratory judgment that Apotex's ANDA product would infringe reexamined claims 6 and 12-16 of the '045 patent. Apotex filed a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss Senju's second action, arguing that Senju was barred from asserting the reexamined claims of the '045 patent under the doctrine of claim preclusion. The district court granted Apotex's motion to dismiss the second action and Senju appealed the decision to the Federal Circuit.

Outcome

The Federal Circuit affirmed the district court's dismissal of Senju's second action, holding that claim preclusion barred Senju from asserting the reexamined claims of the '045 patent.

Claim Preclusion

The Federal Circuit started its analysis by explaining that it looks to the law of the regional circuit for guidance on the principles of claim preclusion. Under Third Circuit law, claim preclusion bars a second action if:
  • A final judgment on the merits was issued in a previous suit.
  • The same parties were involved in the prior suit.
  • The second suit is based on the same cause of action as the first suit.
Because there was no dispute on the first two requirements, the main issue on appeal was whether Senju's two actions were based on the same cause of action. The Federal Circuit followed the approach in the Restatement (Second) of Judgments, which states that a cause of action is defined by the transactional facts from which it arises, and the extent of the factual overlap. Under that approach, claim preclusion may apply to a patent case if:
  • The product or process accused in the first action is essentially the same as the product or process accused in the second action.
  • The patentee seeks to assert the same patent against the same party and the same subject matter.
There was no dispute over whether the two actions involved the same accused product or process because Senju alleged infringement based on the same ANDA in both of its suits against Apotex. On the question of whether the same patents and patent rights were involved in the two suits, Senju argued that the reexamined claims were different because they included limitations that were not included in the original '045 patent claims.
The Federal Circuit rejected Senju's argument and determined that the reexamined claims do not create a new cause of action because a reexamined patent is just the original patent examined at a different time. The Federal Circuit explained that amendments to the patent during reexaminations are limited in the following ways:
Based on these limitations, the Federal Circuit concluded that a reexamined claim cannot have a larger scope than the original claims. The Federal Circuit did not address whether it is possible that a reexamination could comply with these limitations and still result in new claims that were so materially different from the original claims as to create a new cause of action. The Federal Circuit instead held that, in the absence of a clear showing that a material difference exists between the original claims and the reexamined claims, it is assumed that the reexamined claims are a subset of the original claims and that a reexamination will not create a new cause of action.
The Federal Circuit then concluded that Senju's reexamined claims did not create a new cause of action and affirmed the district court's dismissal based on claim preclusion.

Judge O'Malley's Dissent

Judge O'Malley issued a dissenting opinion arguing that the court should have analyzed whether the reexamination created new patent rights that did not exist in the first action. Judge O'Malley argued that the majority opinion creates a rule where a patentee will be faulted for not asserting new, presumptively valid claims against an alleged infringer even if those claims did not exist in the first action.

Practical Implications

While the Federal Circuit's opinion applies to the narrow set of cases where a patentee seeks to file a second patent infringement suit against the same alleged infringer and accused product based on reexamined claims, the opinion serves as a caution to patentees generally. Specifically, patentees should make sure that they have pursued all available claims, whether in the original prosecution or in further patentability proceedings. Patentees should also be aware that they may not be able to assert reexamined claims against an alleged infringer, even if those claims include additional limitations that were not in the originally asserted claims.