Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-13-01409/USCOURTS-ca13-13-01409-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

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United States Court of Appeals 

for the Federal Circuit ______________________ 

SHIRE DEVELOPMENT, LLC,

SHIRE PHARMACEUTICAL DEVELOPMENT, INC.,

COSMO TECHNOLOGIES LIMITED, GIULIANI 

INTERNATIONAL LIMITED,

Plaintiffs-Appellees

v.

WATSON PHARMACEUTICALS, INC., 

nka ACTAVIS, INC., WATSON LABORATORIES, INC. 

FLORIDA, WATSON PHARMA, INC., nka ACTAVIS 

PHARMA, INC., WATSON LABORATORIES, INC.,

Defendants-Appellants

______________________ 

2013-1409

______________________ 

Appeal from the United States District Court for the 

Southern District of Florida in No. 12-CV-60862, Judge 

Donald M. Middlebrooks.

______________________ 

Decided: June 3, 2015

______________________ 

EDGAR HAUG, Frommer Lawrence & Haug LLP, New 

York, NY, for plaintiffs-appellees. Also represented by

NICHOLAS F. GIOVE, JONATHAN HERSTOFF, ELIZABETH 

MURPHY, JOSEPH SAPHIA ̧ ERIN A. LAWRENCE, JASON 

AARON LIEF, CAROLINE BERCIER, ANDREW S. WASSON. 

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2 SHIRE DEVELOPMENT v. WATSON PHARMACEUTICALS

STEVEN ARTHUR MADDOX, Maddox Edwards, PLLC, 

Washington, DC, for defendants-appellants. Also represented by JEREMY J. EDWARDS; NEIL MICHAEL MCCARTHY, 

Knobbe, Martens, Olson & Bear, LLP, Washington, DC.

______________________ 

Before PROST, Chief Judge, CHEN* and HUGHES, Circuit 

Judges.

HUGHES, Circuit Judge. 

This case returns to us on remand from the Supreme 

Court. In Shire Development, LLC v. Watson Pharmaceuticals, Inc., 746 F.3d 1326 (Fed. Cir. 2014), we decided an 

appeal by defendant-appellants (collectively, Watson)

from a decision of the United States District Court for the 

Southern District of Florida. The district court found, 

among other things, that Watson infringed plaintiffsappellees’ (collectively, Shire’s) patent under the district 

court’s constructions of the asserted claims. We reversed 

the district court’s constructions of two claim terms and 

remanded for further proceedings. 

Following our decision in this case, the Supreme 

Court issued Teva Pharmaceuticals USA, Inc. v. Sandoz, 

Inc., 135 S. Ct. 831 (2015), which clarified how this court 

should review a district court’s construction of a claim 

term. The Court also vacated and remanded our Shire

decision for further consideration in light of this new 

standard of review. Shire Dev., LLC v. Watson Pharm., 

Inc., 135 S. Ct. 1174 (2015). Because this case does not 

involve factual findings to which we owe deference under 

* Pursuant to Fed. Cir. Internal Operating Procedure 15 ¶ 2(b)(ii) (Nov. 14, 2008), Circuit Judge Chen was 

designated to replace Randall R. Rader, now retired, on 

this panel.

 

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SHIRE DEVELOPMENT v. WATSON PHARMACEUTICALS 3

Teva, we again reverse the district court’s constructions of 

the disputed claim terms and subsequent findings of 

infringement, and remand for further proceedings.

I 

Shire owns U.S. Patent No. 6,773,720, which claims a 

controlled-release oral pharmaceutical composition for 

treating inflammatory bowel diseases. Shire markets 

these oral pharmaceutical compositions under the brand 

name LIALDA®. After Watson submitted an Abbreviated 

New Drug Application (ANDA) seeking approval to sell 

the bioequivalent of LIALDA®, Shire sued for infringement of the ’720 patent. After construing certain relevant 

claim language, the district court found that Watson’s

product infringed the ’720 patent.

The ’720 patent—entitled “Mesalazine Controlled Release Oral Pharmaceutical Composition”—concerns 

controlled-release oral pharmaceutical compositions for

treating inflammatory bowel diseases, such as Crohn’s 

disease and ulcerative colitis. ’720 patent col. 1 ll. 9–13. 

The active ingredient in these compositions is 5-aminosalicylic acid, which is also known as mesalazine or 

mesalamine (hereinafter, mesalamine). Mesalamine 

treats inflamed areas in the bowel by direct contact with 

the intestinal mucosal tissue. J.A. 9054. Thus, mesalamine must pass through the stomach and small intestine 

without being absorbed into the bloodstream. J.A. 9054. 

And it must be administered throughout the entire length 

of the colon so that the mesalamine contacts all affected 

tissues. J.A. 9054. Given these requirements, the oral 

composition must contain a high percentage, by weight, of 

mesalamine. ’720 patent col. 3 ll. 52–56.

The ’720 patent teaches an inner lipophilic matrix and 

an outer hydrophilic matrix to address the limitations of 

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the prior art systems.1 According to the ’720 patent, the 

combination of a lipophilic and hydrophilic matrix in an 

inner-outer matrix system, respectively, is advantageous

because the inner-outer matrix properties cause the 

mesalamine to be released in a sustained and uniform 

manner. ’720 patent col. 3 ll. 57–59 (“[T]he compositions 

of the invention provide a release profile of [mesalamine] 

more homogenous than the traditional systems.”); see also

id. at col. 3 l. 60–col. 4 l. 5. The ’720 patent also teaches 

the “advantageous characteristic” of a composition with 

up to 95% active ingredient by weight. Id. at col. 3 ll. 52–

56. 

Shire asserts independent claim 1 and dependent 

claim 3. Claim 1 recites:

1. Controlled-release oral pharmaceutical compositions containing as an active ingredient [mesalamine], comprising:

a) an inner lipophilic matrix consisting of substances selected from the group consisting of 

unsaturated and/or hydrogenated fatty acid, 

salts, esters or amides thereof, fatty acid 

mono-, di- or triglycerid[e]s, waxes, ceramides, 

and cholesterol derivatives with melting 

points below 90° C., and 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 

1 Generally, a lipophilic substance has an affinity 

for lipids and a hydrophilic substance has an affinity for 

water. Thus, a lipophilic substance resists dissolving in 

water, but a hydrophilic substance readily dissolves in 

water. See ’720 patent col. 1 ll. 17–26, 32–36.

 

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hydrophilic matrix consists of compounds selected from the group consisting of polymers 

or copolymers of acrylic or methacrylic acid, 

alkylvinyl polymers, hydroxyalkyl celluloses, 

carboxyalkyl celluloses, polysaccharides, dextrins, pectins, starches and derivatives, alginic 

acid, and natural or synthetic gums;

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.

Id. at col. 6 ll. 7–30. Claim 3 depends from claim 1 and 

requires that the composition be in the form of tablets, 

capsules, or minitablets. Id. at col. 6 ll. 35–36.

The ’720 patent teaches a three-step process to arrive 

at the claimed composition. Id. at col. 2 ll. 48–59. First, 

one or more low melting, lipophilic excipients2 are mixed 

with mesalamine during heating. Id. at col. 2 ll. 50–53. 

Second, the mixture is cooled to form the lipophilic matrix 

and then reduced in size into “matrix granules containing 

the active ingredient.” Id. at col. 2 ll. 54–56. Third, the 

lipophilic matrix granules are mixed together with hydrophilic excipients and compressed to form tablets. Id. at

col. 2 ll. 50–53, col. 3 ll. 40–45. 

2 An excipient is an ingredient other than the active 

ingredient, i.e., an ingredient other than mesalamine. See 

Shire Dev. LLC v. Watson Pharm., Inc., No. 12-60862, 

2013 WL 1912208, at *6 (S.D. Fla. May 9, 2013); see also 

J.A. 1425. 

 

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During prosecution of the ’720 patent, the examiner 

initially rejected the applicants’ claims as obvious in view 

of GB 2 245 492 A (Franco); obvious and anticipated in 

view of U.S. Patent No. 5,593,690 (Akiyama); and obvious 

in view of the combination of U.S. Patent No. 5,851,555 

(Sanghvi) and U.S. Patent No. 6,395,300 (Straub). 

J.A. 15469–71. The examiner explained that Franco 

taught a pharmaceutical composition with an active core, 

a lipophilic coating, and a hydrophilic film. J.A. 15469. 

In response, the applicants stated that Franco disclosed a reservoir system where “the active ingredient is 

confined within a core which acts as a reservoir from 

which the active ingredient is released via the erosion of 

the outer coating. However, as to the present invention, 

the active ingredient is dispersed in a lipophilic matrix, 

not in an isolated core.” J.A. 15480–81. 

The applicants then distinguished Akiyama based on 

the claimed invention’s two matrices and high active 

ingredient concentration. The applicants argued that 

Akiyama “fail[s] to disclose or suggest the two matrices 

and the arrangement of the matrices as set forth in the 

claimed invention. The arrangement of the matrices in 

the present invention aid[s] in the combined release of an 

active ingredient via diffusion from a lipophilic matrix.” 

J.A. 15479. The applicants also argued that Akiyama’s 

composition contained the “active ingredient . . . in an 

amount much lower than that according to the claimed 

invention”—Akiyama taught an active ingredient in 

granules in an amount ranging from 0.005–75% by 

weight, but the applicants’ amended claim taught 80–

95%. J.A. 15478–79.

To distinguish Sanghvi and Straub, the applicants 

again focused on a lack of two separate matrices: Sanghvi 

“fails to disclose a system containing two separate matrices. [It] merely discloses formulations obtained by mixing 

together hydrophilic and lipophilic substances into a 

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single matrix.” J.A. 15481. When discussing the combination of Sanghvi and Straub, the applicants explained 

that “[w]hile the publications might teach the advantageous results of using a lipophilic matrix, the publications 

fail to disclose or suggest a composition comprising a 

combination of two separate matrices. In fact, there is no 

mention or suggestion of a composition utilizing different 

control mechanisms.” J.A. 15482.

The examiner maintained her rejection of the pending 

claims as obvious in view of Franco. The examiner also 

rejected the claims because “the feature upon which 

applicant relies (i.e., the active ingredient is dispersed in 

a lipophilic matrix) is not recited in the rejected claims.” 

J.A. 15489. Further, the examiner explained that the 

limitation-at-the-time—“active ingredient is at least 

partly inglobated”—“does not limit the claim to ‘active 

ingredient is dispersed in a lipophilic matrix’ as alleged by 

the applicant.” J.A. 15489. 

In response, the applicants maintained that Franco

taught a reservoir system, but that the claimed invention 

“relates to a ‘multimatrix system’ and not to a reservoir 

system.” J.A. 15492; see also J.A. 15492 (“FRANCO et al. 

do[es] not teach an inner lipophilic matrix or an outer 

hydrophilic matrix . . . . The composition taught by 

FRANCO et al. is not based on an actual matrix.”). The 

applicants also amended their claims to state that the 

active ingredient is dispersed in the lipophilic matrix and 

added a Markush group3 for both the inner lipophilic 

3 “A Markush group lists specified alternatives in a 

patent claim, typically in the form: a member selected 

from the group consisting of A, B, and C.” Gillette Co. v. 

Energizer Holdings, Inc., 405 F.3d 1367, 1372 (Fed. Cir. 

2005) (citing to Manual of Patent Examining Procedure

§ 803.2 (2004)).

 

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matrix and the outer hydrophilic matrix. J.A. 15491–92, 

15496, 15499. Following an interview with the examiner, 

the claims were amended to require the mesalamine to be 

dispersed in the outer hydrophilic matrix and not just the 

lipophilic matrix. J.A. 15546–50. The claims were then 

allowed and the ’720 patent issued.

When Watson submitted its ANDA seeking FDA approval to sell the bioequivalent of LIALDA®, Shire sued 

Watson for infringement of the ’720 patent. In January 

2013, the district court construed several disputed terms, 

including “inner lipophilic matrix” and “outer hydrophilic

matrix.” See Shire Dev. LLC v. Watson Pharm., Inc., No. 

12-60862, 2013 WL 174843 (S.D. Fla. Jan. 17, 2013).

The district court held a bench trial in April 2013 and

issued its opinion a month later, finding that Watson’s 

ANDA product infringed claims 1 and 3 of the ’720 patent;

that the claims were not invalid under 35 U.S.C. § 112, 

¶ 1 (2006); and that Shire was entitled to injunctive relief. 

Shire Dev. LLC v. Watson Pharm., Inc., No. 12-60862, 

2013 WL 1912208, at *16 (S.D. Fla. May 9, 2013). Specifically, the district court determined that Watson’s ANDA 

product met the limitations of the claims at issue. In 

considering the disputed limitations, the district court 

found that the mesalamine in Watson’s product was 

dispersed in both the lipophilic and hydrophilic matrices 

because the mesalamine was present in both the granules 

and the spaces outside the granules. Shire, 2013 WL 

1912208, at *7–13. The district court also determined 

that Watson failed to prove by clear and convincing 

evidence that the patent was invalid under 35 U.S.C. 

§ 112 for lack of written description or enablement. Id., at 

*14–16. Watson appeals. We have jurisdiction under 28 

U.S.C. § 1295(a)(1).

II

We review the district court’s ultimate interpretation 

of the patent claims de novo. Teva, 135 S. Ct. at 839, 

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841–42. “[W]hen 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 [we] will review that construction de 

novo.” Id. at 841. If, on the other hand, a district court 

resolves factual disputes over evidence extrinsic to the 

patent, we “review for clear error those factual findings

that underlie a district court’s claim construction.” Id. at 

842. In this case, we review the district court’s constructions de novo, as the intrinsic evidence fully determines 

the proper constructions. See id. at 840–42; see also In re 

Papst Licensing Digital Camera Patent Litig., 778 F.3d 

1255, 1261 (Fed. Cir. 2015) (citing Teva, 135 S. Ct. at 

840–42). 

When construing asserted claims, claim terms are 

given “their ordinary and accustomed meaning as understood by one of ordinary skill in the art.” Dow Chem. Co. 

v. Sumitomo Chem. Co., 257 F.3d 1364, 1372 (Fed. Cir. 

2001); Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 

(Fed. Cir. 2005) (en banc). 

Intrinsic evidence, such as “the specification, . . . may 

shed contextual light” on the ordinary and customary 

meaning of a claim term. Aventis Pharm. Inc. v. Amino 

Chems. Ltd., 715 F.3d 1363, 1373 (Fed. Cir. 2013). “The 

construction that stays true to the claim language and 

most naturally aligns with the patent’s description of the 

invention will be, in the end, the correct construction.” 

Phillips, 415 F.3d at 1316. 

In addition to the specification, this court looks to the 

prosecution history. For example, “where the patentee 

has unequivocally disavowed a certain meaning to obtain 

his patent, the doctrine of prosecution disclaimer attaches 

and narrows the ordinary meaning of the claim congruent 

with the scope of the surrender.” Omega Eng’g, Inc. v. 

Raytek Corp., 334 F.3d 1314, 1324 (Fed. Cir. 2003); see 

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Ekchian v. Home Depot, Inc., 104 F.3d 1299, 1304 (Fed. 

Cir. 1997) (“since, by distinguishing the claimed invention 

over the prior art, an applicant is indicating what the 

claims do not cover, he is by implication surrendering 

such protection”). “However, while the prosecution history can inform whether the inventor limited the claim 

scope in the course of prosecution, it often produces ambiguities created by ongoing negotiations between the 

inventor and the PTO. Therefore, the doctrine of prosecution disclaimer only applies to unambiguous disavowals.” 

Grober v. Mako Prods., Inc., 686 F.3d 1335, 1341 (Fed. 

Cir. 2012) (citing Abbott Labs. v. Sandoz, Inc., 566 F.3d 

1282, 1289 (Fed. Cir. 2009)). We review the application of 

prosecution disclaimer de novo. Ecolab, Inc. v. FMC 

Corp., 569 F.3d 1335, 1342 (Fed. Cir. 2009). 

We have also held that a court may look to extrinsic 

evidence, such as dictionaries and expert testimony, to 

“shed useful light on the relevant art” and for a variety of 

other purposes. Phillips, 415 F.3d at 1317–18 (quoting

C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858, 862 

(Fed. Cir. 2004)). But “a court should discount any expert 

testimony ‘that is clearly at odds with the claim construction mandated by the claims themselves, the written 

description, and the prosecution history, in other words, 

with the written record of the patent.’” Id. at 1318 (quoting Key Pharm. v. Hercon Labs. Corp., 161 F.3d 709, 716 

(Fed. Cir. 1998)).

III

The district court construed “inner lipophilic matrix” 

to mean “a matrix including at least one lipophilic excipient, where the matrix is located within one or more other 

substances.” Shire, 2013 WL 174843, at *5. Similarly, 

the district court construed “outer hydrophilic matrix” as 

“a matrix of at least one hydrophilic excipient, where the 

matrix is located outside the inner lipophilic matrix.” Id. 

These constructions do not reflect the ordinary and cusCase: 13-1409 Document: 110-2 Page: 10 Filed: 06/03/2015
SHIRE DEVELOPMENT v. WATSON PHARMACEUTICALS 11

tomary meaning of the claim terms in light of the intrinsic

evidence and are impermissibly broad. 

A 

When construing the disputed terms, the district 

court relied on the specification to first construe “matrix” 

to mean “a macroscopically homogeneous structure in all 

its volume.” Id. at *4 (quoting ’720 patent col. 3 ll. 42–45). 

That construction is correct. But the district court erred 

by construing “‘lipophilic matrix’ [as] a matrix that includes at least one lipophilic excipient.” Id. That construction erroneously focuses on the lipophilic properties 

of an excipient in the matrix, rather than the properties of 

the matrix itself. 

A review of the intrinsic evidence as a whole reveals 

that the district court’s construction of “inner lipophilic 

matrix”—and thus, “outer hydrophilic matrix”—is overly 

broad. Looking first to the language of the claims, “lipophilic” is an adjective that modifies matrix. The parties 

stipulated that “lipophilic” means “poor affinity towards 

aqueous fluids.” J.A. 216. Thus, the matrix—not just an 

excipient within the matrix—must exhibit the stipulatedto lipophilic characteristic. 

This conclusion is bolstered by the specification. The 

Background of the Invention explains that a lipophilic 

matrix is one “in which the main component of the matrix 

structure” exhibits certain lipophilic properties. ’720 

patent col. 1 ll. 17–20. And the specification teaches that 

a lipophilic matrix “generally entail[s] non-linear, but 

esponential [sic] release of the active ingredient.” ’720 

patent col. 1 ll. 32–33. Thus, a “lipophilic matrix” is more 

than just a matrix with at least one lipophilic excipient—

the matrix itself must exhibit lipophilic characteristics. 

The ’720 patent teaches that this occurs when “the main 

component of the matrix structure” is lipophilic. ’720 

patent col. 1 ll. 17–18.

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B 

In construing the matrix terms, the district court rejected Watson’s position that the inner matrix and outer 

matrix must be “separate and distinct.” Shire, 2013 WL 

174843, at *5. Watson based its arguments on alleged 

disclaimers by the applicants during the prosecution. See 

Appellants’ Br. 37–38. The district court acknowledged 

that the applicants described their matrices as “separate” 

to distinguish over the prior art references, but found that 

“no where in the prosecution history, claims, or specification does the term ‘separate and distinct’ appear.” Shire, 

2013 WL 174843, at *5. Explaining that the prosecution 

history is an ongoing negotiation and that there must be 

clear and unambiguous disavowal, the district court could 

not “say that the claim was clearly limited or disclaimed 

during the prosecution.” Id. 

The district court correctly found no prosecution disclaimer because the statements in the prosecution history 

were not “unambiguous disavowals.” Grober, 686 F.3d at

1341. During prosecution, Shire carefully characterized 

the prior art as not having separate matrices but never 

actually stated that the claimed invention does have 

separate matrices. See, e.g., J.A. 15482 (“While the publications might teach the advantageous results of using a 

lipophilic matrix, the publications fail to disclose or suggest a composition comprising a combination of two 

separate matrices.” (emphasis added)). Although the 

prosecution history statements do not rise to the level of 

unmistakable disavowal, they do inform the claim construction.

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 

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the outer hydrophilic matrix. See Phillips, 415 F.3d at 

1316. 

Looking to the claim structure itself, the claims require the inner lipophilic matrix to be separate, if not 

distinct, from the outer hydrophilic matrix. Element (a) 

of claim 1 recites “an inner lipophilic matrix.” Element 

(b) of claim 1 separately recites “an outer hydrophobic 

matrix.” The separation of these elements within the 

claims indicates that the claim requires two separate 

matrices. 

Shire even admits that the structure of the claim language requires two separate matrices. Oral Argument at 

17:23–17:50, Shire Dev., LLC v. Watson Pharms., Inc., No. 

2013-1409 (Fed. Cir. Dec. 2, 2013), available at 

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

13-1409.mp3 (Q: “It sounds like then, even though you 

opposed having the separate and distinct, that you agree 

that there has to be two different matrices? A: Correct, 

separate, yes. . . . They’re separate because by the claim, 

itself, it says an inner and an outer, so we’re talking about 

two different matrices. For sure, one is lipophilic, one is 

hydrophilic. They’re separate. No question.”); Appellees’ 

Br. 34 (“[T]o the extent there is a ‘separation’ of matrices, 

the claim language addresses that by defining two matrices as opposed to one.”). 

Moreover, the logical reading of the claim requires 

separation between the matrices because the matrices are 

defined by mutually exclusive spatial characteristics—one 

inner, one outer—and mutually exclusive compositional 

characteristics—one hydrophilic, one lipophilic. According to the ordinary and customary meanings of these 

characteristics, one matrix cannot be both inner and outer 

in relation to a second matrix. Nor can one matrix be 

both hydrophilic and lipophilic. Thus, considering “matrix” is properly construed as “a macroscopically homogenous structure in all its volume,” the construction of 

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“inner lipophilic matrix” requires the inner volume to be 

separate from the outer volume. See Phillips, 415 F.3d at 

1314 (“In some cases, the ordinary meaning of claim

language as understood by a person of skill in the art may 

be readily apparent even to lay judges, and claim construction in such cases involves little more than the 

application of the widely accepted meaning of commonly 

understood words.”). 

The compositions of the inner volume and outer volume, i.e., inner matrix and outer matrix, respectively, are 

further limited by the Markush groups. During prosecution, the applicants added Markush groups to claim 1 to 

overcome the examiner’s rejection of the claims as obvious 

over Franco. J.A. 15491–92. For example, the inner 

lipophilic matrix is limited by a Markush group “consisting of unsaturated and/or hydrogenated fatty acid, salts, 

esters or amides thereof, fatty acid mono-, di- or triglycerid[e]s, waxes, ceramides, and cholesterol derivatives with 

melting points below 90° C.” ’720 patent col. 6 ll. 11–14. 

The outer hydrophilic matrix is similarly limited by a 

Markush group consisting of hydrophilic components. See

’720 patent col. 6 ll. 20–25. The lack of overlap of the 

components of the two Markush groups supports the 

requirement that the volumes be separate. Accordingly, 

the correct construction requires that the inner volume 

contain substances from the group described for the inner 

lipophilic matrix (which are all lipophilic substances), and 

that the outer volume separately contain substances from 

the group described for the outer hydrophilic matrix 

(which are all hydrophilic). 

The ’720 patent specification also teaches “separate” 

matrices. The specification describes five examples of 

forming discrete lipophilic matrix granules and compressing those granules together with the hydrophilic matrix. 

See, e.g., ’720 patent col. 3 ll. 31–45. The specification 

explains that a lipophilic matrix “opposes some resistance 

to the penetration of the solvent due to the poor affinity 

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SHIRE DEVELOPMENT v. WATSON PHARMACEUTICALS 15

towards aqueous fluids.” ’720 patent col. 1 ll. 17–20. And 

under the stipulated meaning of “lipophilic,” the lipophilic 

matrix must have a “poor affinity towards aqueous fluids.” J.A. 216. Thus, the matrix that is deemed the 

“lipophilic” matrix cannot have hydrophilic properties. 

But, a matrix comprised of only one lipophilic substance

and several hydrophilic substances—and thus capable of

exhibiting hydrophilic properties—would meet the district 

court’s construction of “lipophilic matrix.” Such a result 

contradicts the customary and ordinary meaning of “lipophilic” and “hydrophilic.”

Furthermore, under the district court’s construction, a 

single mixed matrix with both hydrophilic and lipophilic 

components—such as the one disclosed in the Sanghvi

reference, which the applicants described as “mixing 

together hydrophilic and lipophilic substances into a 

single matrix”—could contain both an “inner lipophilic 

matrix” and an “outer hydrophilic matrix.” J.A. 15481. 

Indeed, any arbitrarily selected volume in a single mixed 

matrix would satisfy the district court’s construction of

“inner lipophilic matrix” because that volume would 

necessarily contain “at least one lipophilic excipient” and 

it would be “inside” the surrounding volume. Similarly, 

under the district court’s construction, that same arbitrarily selected volume would constitute an “outer hydrophilic 

matrix” because it would contain “at least one hydrophilic 

excipient” and would be “outside” the inner lipophilic 

matrix. The claims, however, require two matrices with a 

defined spatial relationship.

Shire argues that the intrinsic evidence does not describe any particular degree of separation and thus, such 

a construction would create ambiguity. Shire’s argument 

misses the point. A court must identify “[t]he construction that stays true to the claim language and most 

naturally aligns with the patent’s description of the 

invention.” Phillips, 415 F.3d at 1316. Whether or not a 

composition infringes when there is a trace of hydrophilic

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16 SHIRE DEVELOPMENT v. WATSON PHARMACEUTICALS

molecules in the inner volume because of the mixing step 

inherent in the manufacturing process, for example, is a 

question for the fact finder. That this question may need 

to be resolved does not compel a claim construction that 

departs from the customary and ordinary meaning of the 

claims, i.e., that the matrices must be “separate” such 

that they retain their claimed properties and are consistent with their respective Markush group limitations. 

C 

On remand from the Supreme Court, Shire argues 

that because the district court “heard” testimony from 

various expert witnesses during a Markman hearing and 

at trial, we must defer to the district court’s constructions 

of the appealed terms. See, e.g., Appellees’ Suppl. Br. 1. 

The Supreme Court held that we “should review for 

clear error those factual findings that underlie a district 

court’s claim construction.” Teva, 135 S. Ct. at 842. The

Court did not hold that a deferential standard of review is 

triggered any time a district court hears or receives 

extrinsic evidence. See id. Here, there is no indication 

that the district court made any factual findings that 

underlie its constructions of “inner lipophilic matrix” and 

“outer hydrophilic matrix.” See J.A. 4566–67.

IV

Accordingly, we reverse the district court’s constructions of “inner lipophilic matrix” and “outer hydrophilic 

matrix,” and its subsequent infringement determination, 

and we remand for proceedings consistent with this 

opinion. 

REVERSED AND REMANDED

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