United States Court of Appeals for the Federal Circuit

03-1367, -1393

NOVARTIS PHARMACEUTICALS CORPORATION,

NOVARTIS AG, NOVARTIS PHARMA AG, and

NOVARTIS INTERNATIONAL PHARMACEUTICAL LTD.,

> Plaintiffs-Appellants,

v\.

ABBOTT LABORATORIES,

> Defendant-Cross Appellant.

[Robert L. Baechtold]{.underline}, Fitzpatrick, Cella, Harper & Scinto,
of New York, New York, argued for plaintiffs-appellants. With him on the
brief were [Nicholas N. Kallas]{.underline}, [Stevan J.
Bosses]{.underline}, and [Diego Scambia]{.underline}.

[Jeffrey I. Weinberger]{.underline}, Munger, Tolles & Olson LLP, of Los
Angeles, California, argued for defendant-cross appellant. With him on
the brief were [Ted G. Dane]{.underline} and [Andrea Weiss
Jeffries]{.underline}.

Appealed from: United States District Court for the District of Delaware

Judge Joseph J. Farnan, Jr.

# United States Court of Appeals for the Federal Circuit

03-1367, -1393

NOVARTIS PHARMACEUTICALS CORPORATION,

NOVARTIS AG, NOVARTIS PHARMA AG, and NOVARTIS INTERNATIONAL
PHARMACEUTICAL LTD.,

Plaintiffs-Appellants,

v\.

ABBOTT LABORATORIES,

Defendant-Cross Appellant.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

> DECIDED: July 8, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Before BRYSON, GAJARSA, and PROST, [Circuit Judges]{.underline}.

Opinion for the court filed by [Circuit Judge]{.underline} PROST.
Dissenting opinion filed by [Circuit Judge]{.underline} BRYSON.

Appellants Novartis Pharmaceuticals Corporation, Novartis AG, Novartis
Pharma AG, and Novartis International Pharmaceutical Ltd. (collectively
"Novartis") appeal the claim construction and entry by the United States
District Court for the District of Delaware of a judgment as a matter of
law ("JMOL") for noninfringement of United States Patent No. 6,007,840
("the '840 patent") in favor of Abbott Laboratories ("Abbott").
[Novartis Pharms. Corp. v. Abbott Labs., Inc.]{.underline}, 294 F. Supp.
2d 557 (D. Del. 2003). While we reverse the claim construction of
"lipophilic component," we perceive no error in the district court's
finding that no reasonable juror could conclude that an equivalent to a
pharmaceutically acceptable non-surfactant lipophilic excipient, which
is capable of dissolving cyclosporin, is present in Abbott's accused
product. Accordingly, we affirm the grant of JMOL for noninfringement.

BACKGROUND

Novartis commenced a lawsuit against Abbott for allegedly infringing
United States Patent No. 5,342,625 ("the '625 patent") and the '840
patent. The '625 and '840 patents relate to pharmaceutical compositions
of the drug cyclosporin, which help prevent organ rejection in
transplant patients. Cyclosporin is highly hydrophobic, and as a
consequence, has been difficult to administer in a convenient form that
provides the desired bioavailability to a patient. '840 patent, col. 3,
l. 32, col. 4, ll. 32-40. The two patents asserted by Novartis are
directed to compositions that facilitate human absorption of cyclosporin
by use of a microemulsion. '625 patent, col. 5, ll. 1-5; '840 patent,
col. 4, l. 64-col. 5, l. 1.

After the district court conducted a [Markman]{.underline} hearing and
construed the disputed terms in the '625 and the '840 patents, Novartis
narrowed its allegation of infringement\
in its complaint to claim 1 of the '625 patent[^1] and claim 81 of the
'840 patent[^2]. Each of the remaining asserted claims calls for a
microemulsion pre-concentrate composition that, upon addition of water,
forms an oil-in-water ("o/w") microemulsion. The parties disputed, among
other things, whether Abbott's product includes a "lipophilic phase
component" in the '625 patent or a "lipophilic component" in the '840
patent. In addition, the parties disputed whether "surfactant," as it is
used in each of the asserted patents, encompasses both hydrophilic and
lipophilic surfactants.

In its claim construction of the phrase "lipophilic phase component,"
the district court held that the term requires:

> at least one excipient meeting the following criteria: (1) a
> pharmaceutically acceptable lipophilic solvent in which cyclosporin is
> soluble, which is (2) immiscible with both water and the hydrophilic
> phase component(s) (in the absence of a surfactant), and which (3)
> lacks the amphiphilic function characteristic of a surfactant (i.e. it
> [must not be a surfactant]{.underline}).

[Novartis]{.underline}, 294 F. Supp. 2d at 561 (emphasis added). The
district court construed "surfactant" to encompass both hydrophilic and
lipophilic surfactants. While Novartis disputes whether the claim
construction of "lipophilic phase component" is correct, the parties
agree that this term bears the same meaning as the term "lipophilic
component," as used in the '840 patent.[^3]

According to Abbott, its accused product, Gengraf, is a cyclosporin
formulation that contains only hydrophilic excipients and surfactants.
The accused product contains an ingredient called Span 80, which Abbott
contends is a surfactant and not a "lipophilic component." After the
parties put on their evidence, the district court permitted Novartis to
submit to the jury the question of whether Abbott infringes either of
the asserted patents under the doctrine of equivalents. The jury
returned a verdict finding that Abbott did not infringe claim 1 of the
'625 patent, but did infringe claim 81 of the '840 patent. Abbott moved
for a judgment as a matter of law ("JMOL") in its favor on claim 81, or
in the alternative, a new trial because the district court had
erroneously excluded relevant evidence and because the '840 verdict is
facially inconsistent with the '625 verdict and against the clear weight
of evidence.

The district court granted Abbott's motion for a JMOL. [Id.]{.underline}
at 567. The court noted that under its claim construction, "the
'lipophilic phase component' cannot be a surfactant." [Id.]{.underline}
at 565; [see also]{.underline} [id.]{.underline} at 566 ("Under the
Court's claim construction, Novartis is precluded from claiming that
surfactants are the equivalent of the 'lipophilic phase component.'").
In construing the claims and concluding that surfactants cannot be a
component of the lipophilic phase, the district court relied on a
passage from the '625 specification, which states:

> Suitable components for use as lipophilic phase include any
> pharmaceutically acceptable solvent which is non-miscible with the
> selected hydrophilic phase, e.g. as defined under (1.1.) or (1.2.).
> Such solvents will appropriately be devoid or substantially devoid of
> surfactant function.

'625 patent, col. 8, ll. 58-63. The court effectively read this language
as a disavowal of any lipophilic component having surfactant function.
In addition, the district court noted that the enumeration of three
excipient components in the claim language gave support to viewing each
component as separate and distinct. Lastly, the district court observed
that the patentee had acknowledged during the prosecution of the
application that led to the '840 patent that distinctions exist between
surfactant and lipophilic compounds that differentiate the chemical
entity of each class of compound. According to the district court,
"\[b\]ecause surfactants are expressly excluded from coverage, a
surfactant acting as the 'lipophilic phase component' is inconsistent
with the language of the claim, as construed by the Court."
[Novartis]{.underline}, 294 F. Supp. 2d at 567. Because Span 80 is a
surfactant, the district court reasoned that Novartis could not, as a
matter of law under the specific exclusion principle, establish that the
substance is an equivalent to the "lipophilic component."
[Id.]{.underline} Accordingly, the district court concluded that
Novartis could not demonstrate that Abbott infringes under the doctrine
of equivalents. [Id.]{.underline}

STANDARD OF REVIEW

In a determination of infringement, the claims must be first construed
by the court, and then the properly construed claims must be compared to
the accused product by the fact finder. [Cybor Corp. v. FAS Techs.
Inc.]{.underline}, 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc). If
challenged, we review claim construction de novo. [Golight, Inc. v.
Wal-Mart Stores, Inc.]{.underline}, 355 F.3d 1327, 1330 (Fed. Cir.
2004); [Markman v. Westview Instruments, Inc.]{.underline}, 52 F.3d 967,
970 (Fed. Cir. 1995) (en banc), [aff'd]{.underline}, 517 U.S. 370
(1996). We likewise review the grant of a JMOL for noninfringement de
novo, reapplying the JMOL standard used by the district court.
[Ericsson, Inc. v. Harris Corp.]{.underline}, 352 F.3d 1369, 1373 (Fed.
Cir. 2003); [Markman]{.underline}, 52 F.3d at 975. "To prevail on a
renewed motion for JMOL following a jury trial, a party 'must show that
the jury's findings, presumed or express, are not supported by
substantial evidence or, if they were, that the legal conclusion(s)
implied \[by\] the jury\'s verdict cannot in law be supported by those
findings.'" [Pannu v. Iolab Corp.]{.underline}, 155 F.3d 1344, 1348
(Fed. Cir. 1998) (citing [Perkin-Elmer Corp. v. Computervision
Corp.]{.underline}, 732 F.2d 888, 893 (Fed. Cir. 1984)); Fed. R. Civ. P.
50(b). If the former situation applies, "we must view the evidence in
the light most favorable to the non-moving party, and determine whether
the record contains the 'minimum quantum of evidence from which a jury
might reasonably afford relief.'" [Glenn Distribs. Corp. v. Carlisle
Plastics, Inc.]{.underline}, 297 F.3d 294, 299 (3d Cir. 2002) (quoting
[Parkway Garage, Inc. v. City of Philadelphia]{.underline}, 5 F.3d 685,
691 (3d Cir.1993)).

##### DISCUSSION

I. Collateral Estoppel

As a threshold issue, Abbott asserts that Novartis is barred in this
appeal from challenging the jury verdict on the '625 patent or the JMOL
on the '840 patent. Because the parties agree that the terms "lipophilic
component" and "surfactant" are common to the '625 and '840 patents,
Abbott argues that Novartis' failure to challenge the construction of
these terms in connection with the '625 patent estops Novartis from
challenging their meaning in the related '840 patent. According to
Abbott, "any legal determinations or factual findings necessary to the
jury's verdict as to claim 1 of the '625 patent, the parent of the '840
patent, must be accorded preclusive effect." (Citing [Mycogen Plant
Science, Inc. v. Monsanto Co.]{.underline}, 252 F.3d 1306, 1311 (Fed.
Cir. 2001)).

Novartis claims that it preserved its right to challenge the jury
verdict on the '625 patent, and that collateral estoppel does not apply
to preclude its challenge to the JMOL on the '840 patent. As evidence,
Novartis notes that when discussing the construction of the term
"surfactant," it pointed out that the correct construction of this term
is relevant only to the '625 patent. Novartis further observes that it
requested that "if this Court reverses the district court's claim
construction" and "if this Court does not reinstate the jury
\[infringement\] verdict," then "it is requested that . . . the case
\[be\] remanded for further proceedings consistent with the proper
construction of the claim terms." According to Novartis, the "further
proceedings" necessarily include proceedings on claim 1 of the '625
patent as well as claim 81 of the '840 patent. Novartis moreover notes
that Abbott admitted that the Notice of Appeal may be broad enough to
encompass the appeal of the jury verdict on the '625 patent. In sum,
Novartis asserts that (1) its conditional request of this court to
construe a term for the '625 patent, (2) its request to remand "for
further proceedings," and (3) Abbott's concession that the Notice of
Appeal may be sufficiently broad to encompass an appeal of the '625
patent verdict, suffice to show that it preserved its right to challenge
the claim construction, the noninfringement verdict on the '625 patent,
and the JMOL that followed.

We apply the law of the regional circuit to the issue of collateral
estoppel in circumstances such as those presented here. [RF Del., Inc.
v. Pac. Keystone Techs., Inc.]{.underline}, 326 F.3d 1255, 1261 (Fed.
Cir. 2003). The party seeking to invoke collateral estoppel bears the
burden, [Dici v. Pennsylvania]{.underline}, 91 F.3d 542, 548 (3d Cir.
1996), of showing the following four elements are present: "(1) the
previous determination was necessary to the decision; (2) the identical
issue was previously litigated; (3) the issue was actually decided in a
decision that was final, valid, and on the merits; and (4) the party
being precluded from relitigating the issue was adequately represented
in the previous action." [Hawksbill Sea Turtle v. FEMA]{.underline}, 126
F.3d 461, 475 (3d Cir. 1997) (citing [Raytech Corp. v.
White]{.underline}, 54 F.3d 187, 190 (3d Cir. 1995)).

Starting with Novartis' contention that its appeal of the jury verdict
on the '625 patent was preserved, we note that Novartis, from the
beginning, has maintained that "this is an [appeal from entry of
JMOL]{.underline} overturning a jury verdict finding Abbott guilty of
infringement under the doctrine of equivalents." (Emphasis added).
According to Novartis, "\[t\]he element at the core of this appeal (in
that it formed the basis for the district court's [grant of
JMOL]{.underline}) is the 'lipophilic component' element." (Emphasis
added). As a consequence of the district court's allegedly erroneous
claim construction, Novartis urged this court to "overturn the [JMOL
ruling]{.underline}" and reinstate the jury's verdict. (Emphasis added).
Novartis urged that in the alternative, if this court decides against
reinstating the verdict, but rather "orders a retrial, \[this court\]
should construe the term 'surfactant' [to provide guidance]{.underline}"
to the district court. (Emphasis added). The purpose of examining the
term "surfactant," therefore, is not to attack the '625 patent jury
verdict, as Novartis belatedly now contends in response to Abbott's
collateral estoppel argument, but rather to provide guidance to the
district court if we order a retrial of the '840 patent case. In support
of its proposed alternative, Novartis cited [Altiris, Inc. v. Symantec
Corp.]{.underline}, 318 F.3d 1363, 1366 (Fed. Cir. 2003), as a parallel
situation. There, this court consented to construe terms that [did
not]{.underline} form a part of the appealed summary judgment because
they "may be relevant to the remand determination of infringement" and
because they were found to be construed erroneously. [Id.]{.underline}
We find no language in Novartis' opening brief stating that this is also
an appeal from the jury verdict on the '625 patent or arguments
explaining why the allegedly erroneous claim construction compels us to
conclude that the jury's noninfringement verdict on the '625 patent
mandates a reversal. It is our understanding from Novartis' statement of
its position that "this is an appeal from entry of JMOL" and that this
court need not broach the meaning of "surfactant," which itself does not
form a part of the appealed JMOL, unless this court remands the case for
a retrial. For reasons discussed below, we affirm the JMOL, and thus we
find remand unwarranted. Based on our affirmance, our review of the term
"surfactant," as it pertains to the '625 patent, is uncalled for.

As to collateral estoppel, we find it inapplicable to the JMOL on the
'840 patent. Here, the jury determined that Novartis failed to prove by
a preponderance of evidence that Abbott infringed the '625 patent under
the doctrine of equivalents. The verdict form on which the jury
indicated its decision did not require the jury to specify the one or
more limitations in claim 1 that it found Abbott's product did not
contain. Further, there is no record evidence explaining the jury's
rationale for its verdict. Assuming that the district court's claim
construction of "lipophilic component" was the dispositive element that
proved necessary to the jury's noninfringement verdict, as Abbott urges,
it would appear that the jury's infringement verdict on the '840 patent
is quite possibly contradictory. One explanation may be as Novartis
suggests. According to Novartis, the jury may have "include\[d\] all of
the SPAN® 80 and CREMOPHOR® EL ingredients within the 'surfactant'
component of the \['625\] claim, thereby leaving no ingredient to serve
as the lipophilic component." Because claim 81 called more specifically
for a hydrophilic surfactant, the jury could have concluded that
Cremophor EL is the only surfactant that meets the hydrophilic
surfactant element, leaving the jury free to conclude that the
unaccounted for Span 80 was, based on testimony from Novartis' expert,
not acting as a surfactant but rather as a lipophilic component in the
claimed composition. In any event, we cannot conclude from the limited
information available that the district court's construction of
"lipophilic phase component," proved necessary to the jury's
noninfringement decision on the '625 patent. Accordingly, Abbott has not
met its burden to show that the claim construction of that term by the
district court was necessary to the jury's noninfringement decision.
Collateral estoppel therefore should not apply to preclude Novartis from
challenging the claim construction and the JMOL in regards to the '840
patent.

II\. Claim Construction

In construing claims, our analysis must begin and remain centered on the
claim language itself. [Interactive Gift Express, Inc. v. Compuserve,
Inc.]{.underline} 256 F.3d 1323, 1331 (Fed. Cir. 2001). We generally
presume that the words of a patent claim have the meaning that a person
of ordinary skill in the relevant art would ordinarily attribute to
them. [Tex. Digital Sys., Inc. v. Telegenix, Inc.]{.underline}, 308 F.3d
1193, 1202 (Fed. Cir. 2002); [Johnson Worldwide Assocs., Inc. v. Zebco
Corp.]{.underline}, 175 F.3d 985, 989 (Fed. Cir. 1999). The presumption
may be rebutted when: (1) the patentee has chosen to be his own
lexicographer, or (2) a claim term lacks such clarity that there is "no
means by which the scope of the claim may be ascertained from the
language used." [Johnson Worldwide]{.underline}, 175 F.3d at 990.

If the disputed claim term "is a term with no previous meaning to those
of ordinary skill in the prior art\[,\] \[i\]ts meaning, then, must be
found \[elsewhere\] in the patent." [J.T. Eaton & Co. v. Atl. Paste &
Glue Co.]{.underline}, 106 F.3d 1563, 1568 (Fed. Cir. 1997). Most often,
the specification "is the single best guide to the meaning of a disputed
term." [Vitronics Corp. v. Conceptronic, Inc.]{.underline}, 90 F.3d
1576, 1582 (Fed. Cir. 1996). Even when guidance is not provided in
explicit definitional format, "the specification may define claim terms
'by implication' such that the meaning may be 'found in or ascertained
by a reading of the patent documents.'" [Bell Atl. Network Servs., Inc.
v. Covad Communications Group, Inc.]{.underline}, 262 F.3d 1258, 1268
(Fed. Cir. 2001) (quoting [Vitronics]{.underline}, 90 F.3d at 1582, 1584
n.6). In addition to the specification, we must examine the prosecution
history to determine whether the patentee relinquished claim coverage by
amendment or through argument to overcome or distinguish a reference.
[Id.]{.underline} Although extrinsic evidence may be used by the court
to help understand the disputed limitation, it may not be used to vary,
contradict, expand, or limit the claim language from how it is defined,
even by implication, in the specification or file history.
[Vitronics]{.underline}, 90 F.3d at 1584-85.

Novartis claims that the district court erred by not giving the term
"lipophilic component" the broadest meaning possible. More specifically,
Novartis asserts the district court unnecessarily added limitations
concerning whether the "lipophilic component" may include surfactants
and whether the constituents of the lipophilic component must be
immiscible.

A.

Novartis begins its analysis by observing that "lipophilic" has a
well-defined meaning to those skilled in the art. As defined by
Novartis' expert, lipophilic means "fat- or oil-loving, or water
hating." Novartis then notes that the specification teaches that:

> The relative proportions will also vary, depending on the particular
> function of ingredients in the composition, for example, in the case
> of a surfactant component of a \"microemulsion pre-concentrate\", on
> whether this is employed as a surfactant only or both a surfactant and
> a co-solvent.

'840 patent, col. 16, ll. 36-41. Further, the specification teaches
that:

> When the surfactant comprises an effective solvent for the cyclosporin
> active ingredient, as in the case e.g. of surfactants or mixtures of
> surfactants under (3.1.1.) to (3.2.7.) above, it may be incorporated
> into compositions as defined under (A), not only as surfactant, but in
> excess as an additional carrier or co-solvent phase, i.e. [as part of
> the]{.underline} hydrophilic or [lipophilic phase]{.underline}.

[Id.]{.underline}, col. 12, ll. 44-49. Novartis claims that these
teachings are inconsistent with the court's construction that a
surfactant can form no part of the "lipophilic component." We agree with
Novartis.

Claim 81 of the '840 patent recites a pharmaceutical composition that
forms a microemulsion upon dilution by water. The composition comprises,
in addition to the active ingredient, three other components. Namely, it
contains (1) a hydrophilic component, (2) a "lipophilic component," and
(3) a hydrophilic surfactant. Neither party cites any persuasive record
evidence that the term "lipophilic component" (or "lipophilic phase
component") had a well-defined meaning to those of ordinary skill in the
art. Accordingly, the claim term requires that we turn to the intrinsic
evidence, and if necessary, the extrinsic evidence, to elucidate the
meaning that one skilled in the art would give the term. [Johnson
Worldwide]{.underline}, 175 F.3d at 990.

The passages of the specification quoted above indicate that a
surfactant or a mixture of surfactants, provided it is an "effective
solvent for the cyclosporin," may form, contrary to the district court's
construction, a [part]{.underline} of the lipophilic phase that
dissolves the cyclosporin. Furthermore, the '840 patent discloses that
if a surfactant forms a part of the lipophilic phase, it does so as a
[co-solvent]{.underline}. Col. 12, ll. 43-49, col. 16, ll. 36-41. A
co-solvent is a "solvent that in conjunction with [another
solvent]{.underline} can dissolve a solute." [Webster's Third New
International Dictionary]{.underline} ("[Webster's]{.underline}") 514
(1993) (emphasis added). Novartis' expert opines that the
specification's disclosure indicates that a surfactant "could function
[alone]{.underline}" as the solvent in the lipophilic phase. (Emphasis
added). By definition, however, a co-solvent operates with "another
solvent" to dissolve a solute, such as cyclosporin. Novartis' expert
testimony therefore directly contradicts the express teaching of the
specification, and may not be used to give us appropriate guidance to
reach the correct claim construction.

At oral argument, Novartis attempted to make a similar argument,
asserting that the description of surfactants as making up only a "part"
of the lipophilic phase, [see]{.underline} '840 patent, col. 12, ll.
48-49, indicates that surfactants could constitute the whole lipophilic
phase. "Part," however, means "something less than a whole."
[Webster's]{.underline} at 1645. Because Novartis supplies insufficient
record evidence to validate its unconventional interpretations of
"co-solvent" and "part," as those words are used in the specification,
Novartis' reading of the specification must be rejected.

In an attempt to further support its view that surfactants may
constitute the entire lipophilic phase, Novartis notes that Example 4.1
in the '840 patent describes a "regular emulsion pre-concentrate" in
which only a surfactant is used to dissolve the cyclosporin. The
composition defined by claim 81 is not a regular emulsion
pre-concentrate, however, but rather a microemulsion pre-concentrate,
and therefore the example does nothing to advance our understanding of
what composes the "lipophilic component" in the claimed composition.[^4]

Because the specification teaches that "[mixtures]{.underline} of
surfactants," if used to dissolve the cyclosporin, form only a "part" of
the lipophilic phase, '840 patent, col. 12, ll. 43-49 (emphasis added),
the other solvent forming the rest of the lipophilic phase must not be
another surfactant. Rather, according to the specification, the
remainder of the solvent constituting the lipophilic phase is a
pharmaceutically acceptable non-surfactant lipophilic excipient that is
capable of dissolving cyclosporin, such as those described under section
(2) of the specification. [Id.]{.underline}, col. 8, ll. 66-67; col. 9,
ll. 5-46; col. 12, ll. 43-49. Accordingly, while we agree with Novartis
that surfactants may form a part of the lipophilic component, the
intrinsic record shows that this component cannot be composed entirely
of surfactants, as urged by Novartis. Although Abbott initially argued
in its opposition brief that the '840 patent "requires the lipophilic
(phase) component to be comprised of an excipient other than a
surfactant," Abbott later admitted in its cross-appeal brief and at oral
argument that "a surfactant \[may\] contribute\[\] to the lipophilic
phase so long as the lipophilic phase [also]{.underline} contained at
least one non-surfactant excipient." In view of the intrinsic evidence,
the claimed "lipophilic component" must contain, at minimum, a
pharmaceutically acceptable lipophilic substance capable of dissolving
cyclosporin, and that is a non-surfactant excipient.

B.

Novartis also challenges the district court's inclusion of the
requirement that the lipophilic component must be immiscible with the
hydrophilic phase in the absence of surfactants. The specification
states that "suitable [components]{.underline}" for use in the
lipophilic phase may include any pharmaceutically acceptable solvent
that is non-miscible with the selected hydrophilic phase. '840 patent,
col. 9, ll. 1-3 (emphasis added). The specification, contrary to the
district court's reading, does not teach that the entire lipophilic
phase must be immiscible with the hydrophilic phase, but rather only
components, [e.g.]{.underline}, parts, of the phase, in one embodiment,
should be immiscible. We find nothing within the intrinsic record that
compels reading the immiscibility limitation into the "lipophilic
component" term.

###### III. Jury Verdict

Novartis asserts that even if we uphold the district court's
construction of "lipophilic component," the jury's verdict on the '840
patent should be allowed to stand because there was substantial evidence
for the jury to conclude that Abbott's cyclosporin composition infringed
under the doctrine of equivalents. In granting JMOL, Novartis argues
that the district court compounded the error of its claim construction
by erroneously applying the specific exclusion principle and the
all-elements rule. Moreover, Novartis suggests that even if we allow the
claim construction to stand, the latter errors mandate a reversal of the
JMOL.

In light of its exclusion of surfactants from the lipophilic component,
the district court found that the specific exclusion principle precluded
it, as a matter of law, from treating the surfactant as an element
forming the lipophilic component. [Novartis]{.underline}, 294 F. Supp.
2d at 567. Left with no identifiable compound in the accused product
corresponding to the lipophilic component, the district court held,
under the all-elements rule, that no reasonable fact finder could
conclude that Abbott infringes under the doctrine of equivalents.
[Id.]{.underline}

As reviewed above in connection with claim construction, the
specification informs us that the lipophilic component encompasses
compositions that may include one or more surfactants, so long as the
lipophilic component [also]{.underline} contains at least one
non-surfactant lipophilic excipient, which is capable of dissolving
cyclosporin. Novartis argued that Span 80, which is a surfactant and an
ingredient of the accused product, meets the lipophilic component
limitation under the doctrine of equivalents. Novartis cites the
testimony of its expert who opined at trial that Span 80 "[does
not]{.underline} exhibit the amphiphilic [function]{.underline} of a
surfactant" nor does it "[function]{.underline} as a surfactant . . .
but, rather, that it [functions]{.underline} as the lipophilic
component." (Emphases added). The fact that Span 80 may "function" as a
co-solvent to cyclosporin does not answer, however, whether a suitable
non-surfactant excipient is also present in the accused composition,
thereby bringing the alleged co-solvent mixture within the scope of the
term "lipophilic component," either literally or under the doctrine of
equivalents.

In light of the specification's implicit teaching that surfactants do
not compose the entire portion of the lipophilic component, Novartis is
foreclosed from arguing that Span 80, which the specification expressly
acknowledges is a surfactant, '840 patent, col. 9, ll. 49-50; col. 11,
ll. 58-62, is an equivalent to a pharmaceutically acceptable
[non-surfactant]{.underline} lipophilic excipient, as required by the
lipophilic phase under our claim construction. [See]{.underline} [SciMed
Life Sys., Inc. v. Advanced Cardiovascular]{.underline}, 242 F.3d 1337,
1347 (Fed. Cir. 2001) ("\[I\]f a patent states that the claimed device
must be 'non-metallic,' the patentee cannot assert the patent against a
metallic device on the ground that a metallic device is equivalent to a
non-metallic device."); [Durel Corp. v. Osram Sylvania
Inc.]{.underline}, 256 F.3d 1298, 1305 (Fed. Cir. 2001) ("A finding of
equivalence \[with Sylvania\'s AlO(OH) and Al(OH)~3~ coatings\] would
vitiate the limitation 'oxide coating,' which we have concluded is
defined to primarily consist of a binary compound."); [see]{.underline}
[also]{.underline} [Athletic Alternatives, Inc. v. Prince Mfg.
Inc.]{.underline}, 73 F.3d 1573, 1582 (Fed. Cir. 1996) ("As a corollary
to the 'all limitations' rule . . ., we have held that 'the concept of
equivalency cannot embrace a structure that is specifically excluded
from the scope of the claims.'" (citation omitted)).

Novartis claims that the district court's holding that Span 80 may not,
as a matter of law, be regarded as an equivalent to a non-surfactant
excipient under the asserted patents is contrary to the Supreme Court's
decision in [Graver Tank & Manufacturing Co. v. Linde Air Products
Co.]{.underline}, 339 U.S. 605 (1950), and this court's decision in
[Wright Medical Technology, Inc. v. Osteonics Corp.]{.underline}, 122
F.3d 1440 (Fed. Cir. 1997). We disagree. In [Graver Tank]{.underline},
the patentees asserted four claims directed to welding flux made of
alkaline earth metal silicates. 339 U.S. at 607. Except for the type of
metal silicate present, the accused product was alike in all respects to
the claimed welding flux. [Id.]{.underline} at 610. The parties disputed
whether silicates made of manganese metal in the accused product could
be treated as an equivalent to silicates made of alkaline earth metal.
[Id.]{.underline} The Court found that the difference between the metal
silicates was insubstantial, and they therefore could be considered
equivalents. [Id.]{.underline} Notably, there was no dispute that the
metal silicate element was present in the accused product. Rather, the
dispute focused on a limitation of the metal silicate element.

Similarly, in [Wright Medical]{.underline}, there was no dispute that
the accused product employed intramedullary rod elements, just as in the
claimed invention. 122 F.3d at 1445. The asserted independent claim
defined a femoral surface shaping guide comprising "an intramedullary
rod portion adapted to [closely fit in]{.underline} and [extend
through]{.underline} the narrowest portion of the human femur."
[Id.]{.underline} at 1442 (emphases added). The district court construed
"closely fit" to mean "a tight or snug fit between the rod and the
isthmus of the femur" and "extend through" to require that the "rod pass
through the entire length of isthmus." [Id.]{.underline} at 1444. Under
this claim construction, the parties agreed that the intramedullary rods
of the accused product did not fit tightly against or extend through the
isthmus of the femur, and thus the product did not literally infringe
the asserted patent. [Id.]{.underline} The parties disputed, however,
whether the rods in the accused product were insubstantially different
from that claimed, and thus, whether the accused product infringed under
the doctrine of equivalents. [Id.]{.underline} at 1445. The district
court granted summary judgment to the accused infringer, rejecting the
patentee's theory for infringement by equivalence because the theory
"attempt\[ed\] to ignore claim limitations on which the public is
entitled to rely." [Id.]{.underline} We found that summary judgment for
the accused infringement was improper, and held that the fact finder
must be given the opportunity to determine whether the intramedullary
rod in the accused product is equivalent to that used in the claimed
invention. [Id.]{.underline} at 1446.

In both [Graver Tank]{.underline} and [Wright Medical]{.underline}, the
fact that certain claimed limitations in the element at issue were
missing in the accused product did not change the fact that the element,
albeit different from that expressly claimed, was indeed present in the
accused product. In [Graver Tank]{.underline}, for instance, although
the accused product used manganese metal instead of an alkaline earth
metal, that substitution did not transform the disputed element, i.e.,
metal silicate, into something that was not a metal silicate. Similarly,
in [Wright Medical]{.underline}, although the intramedullary rod in the
accused product did not tightly fit and extend through the isthmus of
the femur, as required by the literal claim language, the absence of
those claimed limitations did not vitiate the fact that the accused
product possessed an "intramedullary rod."

When the substitution of one feature, however, for another into an
element of the accused product places it outside the scope of the
recited claim element, the doctrine of equivalents may not be applied.
[Sage Prods., Inc. v. Devon Indus., Inc.]{.underline}, 126 F.3d 1420,
1423 (Fed. Cir. 1997); [see, e.g.]{.underline}, [Durel
Corp.]{.underline}, 256 F.3d at 1305 (finding that the addition of
hydroxyl groups to the alleged oxide coating in the accused product made
it no longer an "oxide coating" as properly construed under the asserted
patent, and thus placing the accused product outside the reach of the
doctrine of equivalents). Permitting such an element in the accused
product to come within the bounds of the claimed element would
impermissibly extend the scope of the claim language beyond what the
patentee actually claimed.

Here, the "lipophilic component" element requires at least a
pharmaceutically acceptable non-surfactant lipophilic excipient capable
of dissolving cyclosporin. Under Novartis' theory of infringement by
equivalence, Span 80, admittedly a surfactant according to the '840
patent, [see]{.underline} col. 9, ll. 47-50, col. 11, ll. 58-59, is an
equivalent to the [non-surfactant]{.underline} excipient required by the
claimed "lipophilic component." Including a chemical composition made
entirely of surfactants within the scope of "lipophilic component" would
be inconsistent with the claim construction of that term. We must reject
Novartis' theory of infringement by equivalence. Because Novartis failed
to adduce evidence from which a reasonable juror could conclude,
consistent with this court's claim construction, that there is a
"lipophilic component" in Abbott's accused product, we find no basis to
reverse the JMOL for noninfringement of the '840 patent.

IV\. Cross-Appeal

In Abbott's conditional cross-appeal, it claims that in the event we
reverse the JMOL, we should not reinstate the jury verdict. Rather,
Abbott urges this court to grant it a new trial on the '840 patent,
because the jury verdict of infringement of the '840 patent is
irreconcilably inconsistent with the jury verdict of noninfringement as
to the '625 patent. In addition to the inconsistency, Abbott contends
that it is entitled to a new trial on the '840 patent because the jury's
verdict is contrary to the clear weight of the evidence and because the
district court erroneously excluded evidence that Abbott holds its own
patents for its accused product.

The district court granted Abbott's motion for JMOL for noninfringement
and denied Abbott's alternative motion for a new trial as moot.
[Novartis]{.underline}, 294 F. Supp. 2d at 560. "\[A\] party who
prevails on noninfringement has no right to file a 'conditional'
cross-appeal to introduce new argument or challenge a claim
construction, but may simply assert alternative grounds in the record
for affirming the judgment." [Phillips v. AWH Corp.]{.underline}, 363
F.3d 1207, 1216 (Fed. Cir. 2004). "It is only necessary and appropriate
to file a cross-appeal when a party seeks to enlarge its own rights
under the judgment or to lessen the rights of its adversary under the
judgment." [Bailey v. Dart Container Corp. of Mich.]{.underline}, 292
F.3d 1360, 1362 (Fed. Cir. 2002). The conditional cross-appeal is
dismissed as improper because the district court entered a judgment of
noninfringement in Abbott's favor. [See]{.underline}
[Phillips]{.underline}, 363 F.3d at 1216.

CONCLUSION

Although the district court's claim construction was erroneous, we find,
under our amended claim construction, no error in the district court's
grant of the JMOL. We reverse the claim construction but affirm the
grant of JMOL for noninfringement on claim 81 of the '840 patent.

[AFFIRMED]{.underline}

## United States Court of Appeals for the Federal Circuit

03-1367,-1393

NOVARTIS PHARMACEUTICALS CORPORATION,

NOVARTIS AG, NOVARTIS PHARMA AG, and NOVARTIS INTERNATIONAL

PHARMACEUTICAL LTD.,

> Plaintiffs-Appellants,

v\.

ABBOTT LABORATORIES,

Defendant-Cross Appellant.

BRYSON, [Circuit Judge]{.underline}, dissenting.

Claim 81 of the '840 patent recites a composition comprising four
components: cyclosporin A; a propylene glycol hydrophilic component; a
hydrophilic surfactant; and a lipophilic component. The lipophilic
component is described in the patent as an oil-loving substance that
dissolves the cyclosporin so that when water is added to the composition
an oil-in-water microemulsion is created.

It is not disputed that the accused Abbott composition contains the
first three of the claimed components; only the presence of a lipophilic
component is in dispute. Novartis argues that the Abbott composition has
a lipophilic component in the form of Span 80, a lipophilic surfactant.
Abbott argues that although Span 80 is lipophilic, it cannot serve as
the lipophilic component of claim 81. The court today agrees with
Abbott, based on statements in the specification of the '840 patent.
Although the court acknowledges that a lipophilic surfactant such as
Span 80 can serve as [part]{.underline} of the claimed lipophilic
component, it holds that the specification does not allow for a
surfactant to serve as the [entire]{.underline} lipophilic component.
Accordingly, the court holds that because Span 80 is the only lipophilic
component in Abbott's composition, the Abbott composition does not
infringe, either literally or under the doctrine of equivalents.

Because it is undisputed that Span 80 is lipophilic and that cyclosporin
dissolves in Span 80, Span 80 appears to qualify as a "lipophilic
component" as that term is used in the '840 patent. Thus, Abbott can
prevail on this claim construction issue only if the specification is
read as requiring that the "lipophilic component" limitation be
construed more narrowly. The court today concludes that the
specification has that effect, but I do not agree.

In reaching its conclusion as to the proper construction of the term
"lipophilic component," the court relies on a passage from the
specification stating that a surfactant may be incorporated in a
microemulsion composition of the invention not only as the surfactant,
"but in excess as an additional carrier or co-solvent phase, i.e. as
part of the hydrophilic or lipophilic phase." '840 patent, col. 12, ll.
47-49. [See also]{.underline} [id.]{.underline}, col. 14, ll. 40-42
(referring to a lipophilic surfactant serving "as a surfactant or as a
co-solvent"); [id.]{.underline}, col. 16, ll. 39-41 (referring to a
surfactant that is "employed as a surfactant only or both a surfactant
and a co-solvent"). The court interprets that language, which recognizes
that a surfactant can serve as part of the hydrophilic or lipophilic
components of the claimed composition, as meaning that a surfactant may
be a part of the lipophilic component but may not serve as the
lipophilic component by itself.

I do not draw the same conclusion from the quoted language. The
statement on which the court relies refers to the role performed by
excess amounts of the substance that serves the role of the surfactant
in the claimed composition. The quoted language indicates that the
composition of the invention must have at least three components in
addition to the cyclosporin, as required by claim 81. In addition, it
contemplates that the substance that serves as the surfactant may also
serve as part of either the hydrophilic or the lipophilic component. The
quoted language therefore makes clear that the composition may not
consist of only two components in addition to the cyclosporin, as would
be the case if one ingredient served as both the surfactant and the
lipophilic component in the composition. However, the quoted language
does not address the case presented by Abbott's composition, which
contains three components in addition to the cyclosporin, and in which a
hydrophilic surfactant serves as the surfactant, while Span 80 serves
the function of the lipophilic component (dissolving and carrying the
cyclosporin). Thus, because in Abbott's composition Span 80 does not
serve as the surfactant referred to in claim 81, the quoted language
from the specification does not apply to Abbott's composition. For that
reason, I agree with Novartis that, where another substance serves as
the hydrophilic surfactant, the specification does not disclaim the use
of a lipophilic surfactant such as Span 80 as the sole component of the
lipophilic component of the claimed invention. I therefore do not find a
disclaimer of subject matter in the specification. [A
fortiori]{.underline}, I do not find a specific exclusion of subject
matter for purposes of the doctrine of equivalents.

I respectfully dissent.

[^1]: Claim 1 reads as follows:

    > A pharmaceutical composition comprising a cyclosporin as active
    > ingredient,
    >
    > 1\) a hydrophilic phase component comprising
    >
    > 1.1) a pharmaceutically acceptable di- or partial-ether of the
    > formula
    >
    > R~1~ \--\[O\--(CH~2~)~2~\]~x~ \--OR~2~
    >
    > wherein R~1~ is C~1-5~ alkyl or tetrahydrofurfuryl, R~2~ is
    > hydrogen, C~1-5~ alkyl or tetrahydrofurfuryl, and X is an integer
    > from 1 to 6, or
    >
    > 1.2) 1,2-propylene glycol;
    >
    > 2\) a lipophilic phase component; and
    >
    > 3\) a surfactant;
    >
    > wherein said composition is a microemulsion pre-concentrate, which
    > upon dilution with water to a ratio of 1:1 parts by weight
    > pre-concentrate to water or more of said water, is capable of
    > providing an oil-in-water microemulsion having average particle
    > size of less than about 1,000 Å.

[^2]: Claim 81 reads as follows:

    > An oral pharmaceutical composition comprising
    >
    > about 5 to about 25% by weight of cyclosporin A,
    >
    > about 0.5 to about 90% by weight of a propylene glycol hydrophilic
    > component,
    >
    > about 0.5 to about 90% by weight of a lipophilic component and
    >
    > about 0.5 to about 90% by weight of a hydrophilic surfactant,
    >
    > all weight percents being based on the total weight of the
    > composition, the relative proportion of said cyclosporin A,
    > hydrophilic component, lipophilic component and hydrophilic
    > surfactant being such that upon dilution of said composition with
    > adequate water, an oil-in-water microemulsion having an average
    > particle size of less than about 1,500 Å is spontaneously formed.

[^3]: For convenience, we will use the terms "lipophilic phase
    component" and "lipophilic component" interchangeably.

[^4]: For the same reason, we must reject the assertion by Novartis'
    expert that the written description in the '840 patent at column 14,
    lines 39-44 provides further evidence that surfactants may form a
    part of the lipophilic component. The compositions as defined under
    (C) of the specification provide emulsion pre-concentrates and are
    directed to compositions "other than those as defined under (A) and
    (B)," (both of which are microemulsion pre-concentrates) to form
    "for example, solutions, suspensions, dispersion\[,\] regular
    emulsions and the like." '840 patent, col. 14, ll. 45-54.