Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01065/USCOURTS-ca13-14-01065-0/pdf.json

Parties Involved:
Insite Vision Incorporated
Appellee
Inspire Pharmaceuticals, Inc.
Appellee
Pfizer Inc.
Appellee
Sandoz GmbH
Not party
Sandoz Industrial Products S.A.
Not party
Sandoz, Inc.
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

INSITE VISION INCORPORATED, INSPIRE 

PHARMACEUTICALS, INC., PFIZER INC.,

Plaintiffs-Appellees

v.

SANDOZ, INC.,

Defendant-Appellant

SANDOZ GMBH, SANDOZ INDUSTRIAL 

PRODUCTS S.A.,

Defendants

______________________ 

2014-1065

______________________ 

Appeal from the United States District Court for the 

District of New Jersey in No. 3:11-cv-03080-MLC-LHG, 

Judge Mary L. Cooper.

______________________ 

Decided: April 9, 2015

______________________ 

DOMINICK A. CONDE, Fitzpatrick, Cella, Harper & 

Scinto, New York, NY, argued for plaintiffs-appellees. 

Also represented by DAVID E. DE LORENZI, Gibbons P.C., 

Newark, NJ. Plaintiffs-appellees Inspire Pharmaceuticals, Inc., Pfizer Inc. also represented by MARGARET A.

SCOOLIDGE, Fitzpatrick, Cella, Harper & Scinto, New 

York, NY; DENNIS C. AELING, Costa Mesa, CA. 

Case: 14-1065 Document: 76-2 Page: 1 Filed: 04/09/2015
2 INSITE VISION INCORPORATED v. SANDOZ, INC. 

BRIAN ROBERT MATSUI, Morrison & Foerster LLP, 

Washington, DC, argued for defendant-appellant. Also 

represented by DEANNE E. MAYNARD; DAVID CLARENCE 

DOYLE, JAMES WEBB HUSTON, MARK ANDREW 

WOODMANSEE, SAN DIEGO, CA; MATTHEW D'AMORE, NEW 

YORK, NY.

______________________ 

Before PROST, Chief Judge, NEWMAN and LINN, Circuit 

Judges.

LINN, Circuit Judge. 

In this Hatch-Waxman Act litigation, Sandoz, Inc. 

(“Sandoz”) appeals the district court’s decision in Insite 

Vision, Inc. v. Sandoz, Inc, No. 11-3080, 2013 WL 5975015 

(D.N.J. Oct. 4, 2013), which held that Sandoz had not 

shown that the claims of U.S. Patents No. 6,861,411 (the 

“’411 patent”); No. 6,239,113 (the “’113 patent”); No. 

6,569,443 (the “’443 patent”); and No. 7,056,893 (the “’893 

patent”) (collectively “the patents-in-suit”) asserted by 

Insite Vision, Inc. (“Insite”); Inspire Pharm., Inc. (“Inspire”); and Pfizer, Inc. (“Pfizer”) (collectively “plaintiffs”) 

are invalid as obvious. This court agrees that Sandoz 

failed to show that the asserted claims in the patents-insuit would have been obvious to a person of ordinary skill 

in the art and therefore affirms. 

I. BACKGROUND

A. THE PATENTS-IN-SUIT

The ’411 patent issued from U.S. Patent Application 

No. 09/200,199 (the “’119 application”), which was filed on 

November 25, 1998, claiming priority to a provisional 

application filed on December 2, 1997. It is owned by 

Pfizer. Insite owns the ’113, ’443 and ’893 patents (the 

“ISV patents”). The ISV patents claim priority to an 

application filed on March 31, 1999. Inspire is the excluCase: 14-1065 Document: 76-2 Page: 2 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 3

sive sub-licensee of the ’411 patent and the exclusive 

licensee of the ISV patents.

The ’411 patent discloses methods of treating eye infections by the topical administration of azithromycin to 

the eye. ’411 patent col.1 ll.8–10. The patent states that 

prior to the invention, azithromycin was commonly administered orally for the treatment of antibacterial infections, but was not known to be effective when topically 

administered to the eye. Id. at col.1 ll.22–27. Claim 1 of 

the ’411 patent is representative and recites:

1. A method of treating an ocular infection, comprising topically administering to an eye of an animal in need of such treatment an ocular 

infection-treating amount of azithromycin.

The ISV patents disclose various formulations and 

methods of using topical azithromycin as a gel eyedrop for 

treating eye infections. Claim 1 of the ’113 patent; claim 

16 of the ’443 patent; and claim 1 of the ’893 patent are 

representative and recite: 

1. A process for treating an eye, which comprises:

topically applying an aqueous polymeric suspension of an azalide antibiotic, wherein said suspension comprises water, 0.01% to 1.0% of an azalide 

antibiotic, and 0.1 to 10% of a polymeric suspending agent.

’113 patent claim 1;

16. A topical ophthalmic composition comprising 

an aqueous polymeric suspension comprising water, 0.01% to 1.0% of an azalide antibiotic and 0.1 

to 10% of a polymeric suspending agent, wherein 

said topical ophthalmic composition has an osmotic pressure of from 10 to 400 mOsM and wherein 

said composition does not contain constituents 

that are physiologically or ophthalmically harmful 

to the eye. 

Case: 14-1065 Document: 76-2 Page: 3 Filed: 04/09/2015
4 INSITE VISION INCORPORATED v. SANDOZ, INC. 

’443 patent claim 16;

1. A composition comprising water, a polymeric 

suspending agent and an azalide antibiotic, 

wherein said composition has a pH of about 6.0 to 

6.6.

’893 patent claim 1.

B. HISTORY OF THE DISPUTE

Inspire markets a topical azithromycin solution, 

which is approved by the Food and Drug Administration 

(“FDA”) and is distributed under the name “Azasite®.” 

The FDA’s Approved Drug Products with Therapeutic 

Equivalence Evaluations (commonly known as the “Orange Book”) lists all four of the patents-in-suit for 

Azasite®.

Sandoz filed an Abbreviated New Drug Application 

(“ANDA”) for its generic version of Azasite® seeking 

approval prior to the expiration of the patents-in-suit. 

The ANDA included a certification pursuant to 21 U.S.C. 

§ 355(j)(2)(A)(vii)(IV) (2012) (commonly referred to as a 

“Paragraph IV certification”) stating that the claims of the 

patents-in-suit were invalid and/or not infringed. Pursuant to § 355(j)(2)(B), Sandoz notified plaintiffs of the 

Paragraph IV certification. In response, plaintiffs sued 

Sandoz for infringing dependent claims 3 and 5 of the ’411 

patent, which depend from claims 1 and 2; dependent 

claims 6–9 of the ’113 patent, which depend from claims 

1–3; independent claims 16 and 44 of the ’443 patent; and 

dependent claims 4, 6, 7, 9–12, 30, 36 and 40 of the ’893 

patent, which depend directly or indirectly from claims 1 

or 23 (collectively, the “asserted claims”) under 35 U.S.C. 

§ 271(e). 

After claim construction, Sandoz stipulated to infringement but contested the validity of the asserted 

Case: 14-1065 Document: 76-2 Page: 4 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 5

claims under 35 U.S.C. § 103(a) (2006).1 Insite, 2013 WL 

5975015, at *2. Before trial, Sandoz moved to amend the 

pre-trial order to include as an exhibit the file history of 

the European counterpart of the ’411 patent (the “EPO 

file history”). The district court denied that motion because it concluded that the late proffer was prejudicial. A 

bench trial then ensued. The district court ruled that 

Sandoz had failed to show by clear and convincing evidence that the asserted claims would have been obvious to 

a person of ordinary skill in the art and, therefore, upheld 

the validity of all of the patents-in-suit. Id. at *49. 

Sandoz appeals, contending that the district court “misframed” the obviousness inquiry by adopting plaintiffs’ 

characterization of the problem facing a person of ordinary skill in the art at the time of the invention as the 

development of “improved topical treatments for ocular 

infections,” id. at *20, rather than the narrower problem 

argued by Sandoz of topically administering azithromycin

to treat conjunctivitis. Sandoz also appeals the district 

court’s refusal to admit into evidence the late-proffered 

EPO file history. We have jurisdiction pursuant to 28 

U.S.C. § 1295(a)(1).

II. DISCUSSION

A. STANDARD OF REVIEW

“Following a bench trial on the issue of obviousness, 

we review the court’s ultimate legal conclusions de novo 

and the underlying factual findings for clear error.” Tyco 

Healthcare Grp. LP v. Ethicon Endo-Surgery, Inc., 774

1 Pursuant to § 3(n)(1) of the America Invents Act 

(“AIA”), Pub. L. No. 112–29, amended § 103 applies to 

patent applications with claims having an effective filing 

date on or after March 16, 2013. Because the applications 

for the patents-in-suit were filed before that date, the preAIA version of § 103 applies. 

 

Case: 14-1065 Document: 76-2 Page: 5 Filed: 04/09/2015
6 INSITE VISION INCORPORATED v. SANDOZ, INC. 

F.3d 968, 974 (Fed. Cir. 2014) (citing Novo Nordisk A/S v. 

Caraco Pharm. Labs., Ltd., 719 F.3d 1346, 1354 (Fed. Cir.

2013)). “A factual finding is clearly erroneous if, despite 

some supporting evidence, we are left with the definite 

and firm conviction that a mistake has been made.” 

Ferring B.V. v. Watson Labs., Inc.-Fla., 764 F.3d 1401, 

1406 (Fed. Cir. 2014) (citing United States v. U.S. Gypsum 

Co., 333 U.S. 364, 395 (1948) and Alza Corp. v. Mylan 

Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006)).

“In review of an order denying a motion to amend, a 

subject [that] is not unique to patent law, we look to the 

law of the regional circuit court.” Optivus Tech., Inc. v. 

Ion Beam Applications S.A., 469 F.3d 978, 985 (Fed. Cir. 

2006) (quoting Kalman v. Berlyn Corp., 914 F.2d 1473, 

1480 (Fed. Cir. 1990)). In the Third Circuit, a motion to 

amend a pretrial order is reviewed for abuse of discretion. 

Petree v. Victor Fluid Power, Inc., 831 F.2d 1191, 1194 (3d 

Cir. 1987). 

B. OBVIOUSNESS

A patent is invalid “if the differences between the subject matter sought to be patented and the prior art are 

such that the subject matter as a whole would have been 

obvious at the time the invention was made to a person 

having ordinary skill in the art to which said subject 

matter pertains.” 35 U.S.C. § 103(a) (2006). As patents 

are “presumed valid,” § 282, a defendant bears the burden 

of proving invalidity by “clear and convincing evidence,” 

Takeda Pharm. Co. v. Zydus Pharm. USA, Inc., 743 F.3d 

1359, 1366 (Fed. Cir. 2014) (citing Microsoft Corp. v. i4i 

Ltd., 131 S. Ct. 2238, 2242 (2011)). 

Obviousness is a question of law, based on underlying 

factual determinations including: “the scope and content 

of the prior art”; “differences between the prior art and 

the claims at issue”; “the level of ordinary skill in the 

pertinent art”; and “[s]uch secondary considerations as 

commercial success, long felt but unsolved needs, failure 

Case: 14-1065 Document: 76-2 Page: 6 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 7

of others, etc.” Graham v. John Deere Co. of Kan. City, 

383 U.S. 1, 17 (1966). “When there is a design need or 

market pressure to solve a problem and there are a finite 

number of identified, predictable solutions, a person of 

ordinary skill has good reason to pursue the known options within his or her technical grasp.” KSR Int’l Co. v. 

Teleflex Inc., 550 U.S. 398, 421 (2007). 

1. THE ’411 PATENT

a. The Framing of the Obviousness Question

The district court began its obviousness analysis by 

addressing a dispute between the parties regarding the 

proper “framing” of the obviousness question. Insite, 2013 

WL 5975015, at *19. Plaintiffs argued that the proper 

question to be considered by the court was whether it 

would have been obvious to a person of ordinary skill in 

the art at the time of the invention to develop a topical 

ophthalmic formulation containing azithromycin. Sandoz 

argued for a narrower question: whether it would have 

been obvious that topical azithromycin could be used to 

treat conjunctivitis. The district court agreed with the 

plaintiffs and found no reason to limit the question to 

conjunctivitis and to azithromycin. The district court 

found that there were options beyond just azithromycin 

that were available to a formulator when considering 

topical ophthalmic treatments, id. at *22, and that persons of ordinary skill in the art would not have developed 

formulations that only treated conjunctivitis and not 

corneal infections, given concerns about the spread of 

conjunctival infections to the cornea. Id.

On appeal, Sandoz argues that the district court erred 

as a matter of law in its framing of the obviousness inquiry. Sandoz contends that in broadly framing the 

obviousness inquiry, the district court required Sandoz to 

prove the obviousness of topical treatments of all manner 

of eye infections and not merely conjunctivitis with 

azithromycin. Sandoz contends that this amounts to an 

Case: 14-1065 Document: 76-2 Page: 7 Filed: 04/09/2015
8 INSITE VISION INCORPORATED v. SANDOZ, INC. 

error of law contrary to bedrock legal principles that 

“‘[c]laims which are broad enough to read on obvious 

subject matter are unpatentable even though they also 

read on nonobvious subject matter.’” Muniauction, Inc. v. 

Thomson Corp., 532 F.3d 1318, 1328 n.4 (Fed. Cir. 2008)

(alteration in original) (quoting In re Lintner, 458 F.2d 

1013, 1015 (C.C.P.A. 1972)). Sandoz also relies heavily on 

Alcon Research, Ltd. v. Apotex Inc., in which this court 

held that courts should “look at any motivation [for combining references, even] beyond that articulated by the 

patent.” 687 F.3d 1362, 1368 (Fed. Cir. 2012).

Plaintiffs respond that identifying the problem faced 

by a person of skill in the art is a factual question, on 

which the district court properly ruled. Plaintiffs contend 

that nothing in the district court’s framing of the issue 

precluded Sandoz from proving that topical treatment of 

conjunctivitis would have been obvious, but that Sandoz 

simply failed to carry its burden—a factual issue not a 

legal question. 

The district court did not clearly err in framing the 

obviousness inquiry as it did, based on its understanding 

of the problem facing those skilled in the art at the time 

the invention was made. Moreover, the district court, in 

framing the question, did not foreclose Sandoz from 

attempting to prove that the claims would have been 

obvious based on the treatment of conjunctivitis by the 

topical administration of azithromycin. 

The obviousness inquiry entails consideration of 

whether a person of ordinary skill in the art “would have 

been motivated to combine the teachings of the prior art 

references to achieve the claimed invention, and . . . would 

have had a reasonable expectation of success in doing so.” 

Proctor & Gamble Co. v. Teva Pharm. USA, Inc., 566 F.3d 

989, 994 (Fed. Cir. 2009) (internal quotation mark omitted) (quoting Pfizer, Inc. v. Apotex, Inc., 490 F.3d 1348, 

1361 (Fed. Cir. 2007)); see also Bayer Schering Pharma 

Case: 14-1065 Document: 76-2 Page: 8 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 9

AG v. Barr Labs, Inc., 575 F.3d 1341, 1347 (Fed. Cir. 

2009). “In considering motivation in the obviousness 

analysis, the problem examined is not the specific problem solved by the invention.” In re Kahn, 441 F.3d 977, 

988 (Fed. Cir. 2006). “Defining the problem in terms of its 

solution reveals improper hindsight in the selection of the 

prior art relevant to obviousness.” Monarch Knitting 

Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d 877, 881 

(Fed. Cir. 1998). And, here, the district court recognized 

that an overly narrow “statement of the problem [can] 

represent[] a form of prohibited reliance on hindsight, 

[because] [o]ften the inventive contribution lies in defining the problem in a new revelatory way.” Mintz v. Dietz 

& Watson, Inc., 679 F.3d 1372, 1377 (Fed. Cir. 2012). 

Whether a person of ordinary skill in the art would 

narrow the research focus to lead to the invention depends on the facts. Alcon is not to the contrary. Alcon

merely holds that if the prior art would motivate a person 

of skill in the art to make the claimed invention, even if 

that was not based on “the same motivation that the 

patentee had,” the patent would have been obvious. 687 

F.3d at 1368. But whether the prior art would so motivate a skilled artisan is a question of fact. Cf. PAR 

Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1196 

(Fed. Cir. 2014) (“‘The presence or absence of a motivation 

to combine references in an obviousness determination is 

a pure question of fact.’” (quoting Alza Corp. v. Mylan 

Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006))).

Here, the district court did not clearly err in finding 

that the problem faced by one skilled in the art was 

broader than merely seeking to use azithromycin to treat 

conjunctivitis. The district court found that azithromycin’s characteristics—including that molecules in its class 

were “known to be bacteriostatic, to have a limited spectrum of activity, and to require multiple doses per day to 

penetrate tissue,” Insite, 2013 WL 5975015, at *19—

would make it a poor choice for treating ocular infections. 

Case: 14-1065 Document: 76-2 Page: 9 Filed: 04/09/2015
10 INSITE VISION INCORPORATED v. SANDOZ, INC. 

Furthermore, the district court found “the unique balance 

of log P, molecular weight, solubility, and charge,” also 

made it “not a good candidate.” Id. The district court also 

credited the testimony of plaintiffs’ expert, Dr. Asbell, 

that, desirably, effective treatment of conjunctivitis would 

include penetration of the cornea as well as the conjunctiva because of the potential that a conjunctival infection 

could spread to the cornea. Id. at *7–8. These factual 

findings provide sufficient support for the district court’s 

framing of the relevant question.

And the district court’s framing of the question did 

not prevent Sandoz from attempting to invalidate the 

asserted claims, which were not limited to the cure of 

conjunctivitis, by proving that it would have been obvious 

to use azithromycin in a topical treatment to cure that 

one infection. The problem for Sandoz, as we will next 

address, is that its proofs simply failed to carry the day in 

satisfying its clear and convincing burden.

b. The Merits of the Obviousness Determination

Sandoz claims that the ’411 patent is an obvious modification of Ilotycin®—a topical formulation of erythromycin (an active ingredient similar to azithromycin)—and 

Zithromax®, an oral azithromycin formulation used to 

treat conjunctivitis. Sandoz argues that in light of the 

teachings of the prior art, it would have been obvious to 

try azithromycin as a topical treatment of bacterial conjunctivitis, with a reasonable expectation of success. It 

relies on the testimony of Dr. Reed that azithromycin was 

the “newer iteration” of erythromycin, with remarkably

effective properties and contends that it would have been 

common sense to substitute a new and improved antibiotic for the antibiotic present in Ilotycin®. Id. at *14 

(quoting the trial testimony of Dr. Reed).

Sandoz also contends that persons of ordinary skill in 

the art would have been motivated to use azithromycin in 

a topical treatment given that it was well known, accordCase: 14-1065 Document: 76-2 Page: 10 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 11

ing to Sandoz’s expert, Dr. Goren, that topical treatments 

are generally more effective than oral treatments. It also 

asserts that while oral use of azithromycin worked 

through a unique process called phagocytosis, that process 

was not the only process at work in delivering the drug to 

infected tissue and persons of ordinary skill in the art 

would not have been deterred from investigating the 

topical administration of azithromycin. Finally, Sandoz 

relies on proposals for the topical use of azithromycin in 

the treatment of trachoma allegedly made at a 1997 

World Health Organization meeting that occurred in 

Geneva (the “Geneva meeting”) and contends that the 

district court was wrong to disregard and discount this 

evidence. 

Plaintiffs counter by arguing that the district court’s 

factual findings were well-supported and not clearly 

erroneous. They argue that the district court considered 

all of the potential drug options and correctly concluded 

that those options would have directed persons of ordinary skill in the art away from the topical administration 

of azithromycin. They also assert that there is no correlation between oral and topical ophthalmic drug penetration. Finally, they point to Sandoz’s expert’s 

contemporaneous failure to use azithromycin topically 

prior to the ’411 invention as evidence of non-obviousness.

The district court concluded that it would not have 

been obvious to a person of ordinary skill in the art to 

formulate a topical azithromycin formulation for ophthalmic treatment of any infection as recited in the asserted claims of the ’411 patent. The district court 

thoroughly and properly considered all of the evidence 

presented and the various arguments raised by the parties in ruling the asserted claims to be not invalid. We 

agree. 

First, the district court did not clearly err in finding 

that there were “innumerable” options for ophthalmic 

Case: 14-1065 Document: 76-2 Page: 11 Filed: 04/09/2015
12 INSITE VISION INCORPORATED v. SANDOZ, INC. 

treatments, including fluoroquinolones. Id. at *22. 

Fluoroquinolones “were known to be a better option than 

azithromycin,” because they “were bactericidal[,] could act 

on a broad range of bacteria [and] were known to penetrate ocular tissue.” Id. at *21, *22. Furthermore, the 

district court did not clearly err in determining that those 

of skill in the art would have been concerned that 

azithromycin might not penetrate ocular tissue based on 

its high molecular weight, charge and insolubility in 

water. Id. at *22. Even Sandoz’s expert, Dr. Reed, admitted that compounds with high molecular weights and 

charged compounds might not penetrate ocular tissue. 

See id. at *13. 

The district court also did not clearly err in crediting 

Dr. Asbell’s testimony that a person of ordinary skill in 

the art “would not assume that delivering high concentrations of a drug to the eye topically would ensure that the 

drug would penetrate the ocular tissue simply because the 

drug was successful when administered systemically.” Id.

at *8. Dr. Asbell’s testimony is supported by the fact that 

oral azithromycin was delivered to the eye at least in part 

through phagocytosis—a bloodstream dependent process—which would not occur when azithromycin was 

administered topically. See id. at *11, *21. 

The district court did not clearly err in discounting 

the relevance of Ilotycin®, given that there was conflicting 

expert testimony on whether it had fallen out of favor by 

1996. See id. at *9–10. The district court also did not 

clearly err in discounting Dr. Reed’s testimony that 

erythromycin formulations would make azithromycin 

formulations obvious, given that Dr. Reed’s own 1994 

patent for topical ophthalmic treatments listed 24 potential antibiotics, including erythromycin, but did not list 

azithromycin. See id. at *18. 

For all of the above reasons, this court concludes that 

Sandoz has not met its clear and convincing burden and 

Case: 14-1065 Document: 76-2 Page: 12 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 13

therefore affirms the district court’s determination that 

the asserted claims of the ’411 patent are not invalid. 

2. THE ISV PATENTS

The ISV patents disclose various formulations and 

methods of using topical azithromycin as a gel eyedrop for 

treating eye infections. The claims essentially call for 

azalide (azithromycin) in a polymeric suspending agent

for topical ophthalmic use. The district court concluded 

that none of the asserted claims of the ISV patents would 

have been obvious based on its finding that persons of 

ordinary skill in the art would not have been motivated to 

use the water-based polymeric solutions of the prior art in 

an azithromycin formulation because azithromycin was 

considered insoluble and unstable in water. See id. at 

*47. In addition, it found that were one to make a topical, 

water-based azithromycin formulation, one of skill in the 

art would not use polycarbophil, a gelling polymer, but 

would instead use a colloidal system. See id. The district 

court also found that many of the other limitations present in the claims were separately not obvious. See id. at 

*48. Finally, the district court found that the secondary 

considerations of unexpected results and long-felt need 

favored plaintiffs. Id. at *49.

On appeal, Sandoz repeats its “framing of the obviousness question” argument and contends that it would 

have been obvious to use azithromycin to treat conjunctivitis and to formulate that treatment using DuraSite®, a 

commercial embodiment of Insite’s U.S. Patent No. 

5,192,535 (the “’535 patent”), which lists a number of 

active ingredients, including erythromycin. According to 

Sandoz, it would have been obvious to replace erythromycin with azithromycin. It also contends that the ’411 

patent itself is prior art to the ISV patents and that 

Case: 14-1065 Document: 76-2 Page: 13 Filed: 04/09/2015
14 INSITE VISION INCORPORATED v. SANDOZ, INC. 

Example 5 of the ’411 patent2 discloses a water-based 

azithromycin formulation that renders the asserted 

claims obvious.

Plaintiffs repeat their argument regarding the framing of the obviousness question and contend that the 

district properly determined that the ISV patents were 

not obvious. They argue that the ’535 patent is too general and lacked sufficient data to motivate a person of 

skill in the art to combine azithromycin with polycarbophil. They further contend that the expert testimony 

presented at trial supports the district court’s conclusion 

that the prior art taught away from the use of an aqueous 

polymer with azithromycin as recited in the asserted 

claims of the ISV patents. Plaintiffs also argue that

Sandoz failed to show that a person of ordinary skill in 

the art would have been motivated to select a polymeric 

solution from among the number of choices available or 

would have had a reasonable expectation of success in 

making such a selection. Finally, Plaintiffs argue that the 

district court correctly held the asserted claims of the ISV 

patents are not invalidated by the ’411 patent.

We have already addressed the framing of the obviousness question in connection with our treatment of 

the ’411 patent, supra at 7–10. On the merits, we agree 

with the district court that Sandoz has not clearly and 

convincingly shown that the asserted claims of the ISV 

patents would have been obvious. Sandoz relies on 

the ’535 patent, which mentions the possibility that 

erythromycin could be combined with polycarbophil. The 

district court found, however, that the ’535 patent discloses a “laundry list of active ingredients” and credited the 

testimony of Dr. Lee that a researcher would focus on the 

2 The heading for Example 5 is missing in the specification of the ’411 patent. Example 5 is described from 

column 3 line 57 to column 4 line 2.

 

Case: 14-1065 Document: 76-2 Page: 14 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 15

patent’s examples, none of which mention erythromycin. 

See Insite, 2013 WL 5975015, at *37. We see no clear 

error in the district court’s findings. See ’535 patent col.8 

l.64–col.9 l.25 (listing numerous potential active ingredients). 

Sandoz argues that the district court’s treatment of 

the ’535 patent is inconsistent with Merck & Co., Inc. v. 

Biocraft Labs., Inc., which held that just because a “patent discloses a multitude of effective combinations does 

not render any particular formulation less obvious.” 874 

F.2d 804, 807 (Fed. Cir. 1989). Sandoz overreads Merck. 

In Merck, one reference expressly taught the combination

of the compounds claimed in the patent. Id. Here, by 

contrast, selecting from the laundry list of potential active 

ingredients listed in the ’535 patent at best teaches that 

polycarbophil can be combined with erythromycin. 

The ’535 patent does not mention azithromycin. Thus, 

the skilled artisan would still need to modify that combination by changing erythromycin to azithromycin. Moreover, as noted above, those of skill in the art would have 

been concerned about azithromycin’s solubility and stability in water, so the modification from erythromycin to 

azithromycin would be even less obvious.

As for the admissibility of the ’411 patent as a reference against the ISV patents, we note that the ’119 application (which issued as the ’411 patent) was filed in 1998, 

before the earliest priority date of the ISV patents. 

The ’411 patent is assigned to Pfizer, while the ISV patents are assigned to Insite. The patents are not commonly owned or subject to a duty to assign to a common 

owner. Accordingly, the ’411 patent qualifies as prior art 

to the ISV patents under 35 U.S.C. §§ 102(e) and 103(c) 

(2006). The significance of the fact that these patents are 

not commonly owned, despite their being licensed to 

Inspire and listed in the Orange Book, may not have been 

fully appreciated by Sandoz’s expert, Dr. Reed, who said 

he was not basing his opinions on any post-1996 referCase: 14-1065 Document: 76-2 Page: 15 Filed: 04/09/2015
16 INSITE VISION INCORPORATED v. SANDOZ, INC. 

ences. Insite, 2013 WL 5975015, at *24. Be that as it 

may, the district court’s ruling that Dr. Reed was precluded from relying on the ’411 patent should not preclude 

Sandoz from relying on the ’411 patent itself as a reference, as it was listed by Sandoz in its pre-trial submission. And the district court, anticipating the possibility of 

appeal, took the precaution of analyzing whether the ISV 

patents were obvious over the ’411 patent. Id. It found 

that even in light of the ’411 patent, the claims of the ISV 

patents were not obvious. Id. at *46. We agree. The 

district court found the water-based examples of the ’411 

patent to fall far short of satisfying Sandoz’s burden and 

found persuasive the testimony of Drs. Lee and Ahmed 

that the examples disclosing azithromycin and waterbased polymers raised concerns as to stability. The 

district court also found persuasive the testimony of Drs. 

Reed and Lee that there were significant differences 

between Carbopol disclosed in the ’411 patent and the 

polycarbophil of the ISV patents. We find no clear error 

in the district court’s fact-finding or the legal conclusion it 

drew therefrom on the obviousness question.

Finally, we cannot say that the district court clearly 

erred in finding that there were meaningful secondary 

considerations. The district court found that a 60-fold 

increase in the concentration of azithromycin when dosed 

topically as opposed to orally was unexpected and also 

found that Azasite® met a long-felt need. Insite, 2013 WL 

5975015, at *49, *50. Sandoz argues that some increase 

in concentration was to be expected. See Appellant’s Br. 

at 50. Even if true, Sandoz has not shown that a 60-fold 

increase was expected. Sandoz also offers nothing to 

rebut the district court’s finding that Azasite® met a longfelt need.

In sum, we find that Sandoz has failed to clearly and 

convincingly show that the claims of the ISV patents 

would have been obvious. 

Case: 14-1065 Document: 76-2 Page: 16 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 17

3. The Exclusion of the EPO File History

Sandoz sought to introduce into evidence the EPO file 

history, which allegedly chronicled some of the discussions held at the Geneva meeting. Sandoz did not list this 

document in its original exhibit list. It only sought to 

amend the exhibit list after the pretrial conference and 

after briefing and supplemental briefing on the various 

motions in limine were complete.

In an oral order, the district court refused to allow 

Sandoz to introduce the EPO file history into evidence. 

The district court based its decision on several grounds, 

remarking that Sandoz’s attempt to introduce the evidence was “an eleventh hour proffer”; that it would take 

plaintiffs “quite a bit of preparation” to deal with these 

documents; that it was “told” but did not know that European patent law would regard oral presentations and 

accompanying documentation, even if not widely available, as prior art; and that the file contained attorney 

arguments and not factual statements. The district court 

acknowledged that, as parties to the original proceedings, 

plaintiffs were aware of these documents and that “[s]ome 

courts might consider th[e] [European proceedings] to be 

pretty powerful evidence.”

Sandoz argues that the district court abused its discretion in precluding it from amending the exhibit list. 

According to Sandoz, the EPO file history contains factual 

admissions about the date and content of the Geneva 

meeting relevant to its obviousness case. Sandoz further 

contends that there was no finding of bad faith or improper tactics in the filing of its motion to amend and that the 

prejudice to plaintiffs of allowing this evidence would 

have been minimal. Plaintiffs counter that the district 

court’s basis for excluding this document was sufficient

and did not amount to an abuse of discretion.

Federal Rule of Civil Procedure 16(e) states that a 

“court may modify the order issued after a final pretrial 

Case: 14-1065 Document: 76-2 Page: 17 Filed: 04/09/2015
18 INSITE VISION INCORPORATED v. SANDOZ, INC. 

conference only to prevent manifest injustice.” The Third 

Circuit considers five Pennypack factors in determining 

whether a district court abused its discretion in excluding 

evidence: 

(1) “the prejudice or surprise in fact of the party 

against whom the excluded witnesses would have 

testified” or the excluded evidence would have 

been offered; (2) “the ability of that party to cure 

the prejudice”; (3) the extent to which allowing 

such witnesses or evidence would “disrupt the orderly and efficient trial of the case or of other cases in the court”; (4) any “bad faith or willfulness in 

failing to comply with the court’s order”; and (5) 

the importance of the excluded evidence. 

ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 298 (3d 

Cir. 2012) (quoting Pennypack Woods Home Ownership 

Ass’n, 559 F.2d 894, 904–05 (3d Cir. 1977)). “The importance of the evidence is often the most significant 

factor.” Id. (citing Sowell v. Butcher & Singer, Inc., 926 

F.2d 289, 302 (3d Cir. 1991) and Pennypack, 559 F.2d at 

904). A decision to exclude testimony should be disturbed 

only if there is “‘a definite and firm conviction that the 

court below committed a clear error of judgment.’” Id. at 

293 (quoting In re TMI Litig., 193 F.3d 613, 666 (3d Cir.

1999)).

Here, we do not have such a definite and firm conviction for several reasons. We agree with the district court’s 

assessment of the relevant Pennypack factors as being 

either neutral or favoring plaintiffs. The district court 

had ample basis to find prejudice to the plaintiffs as 

plaintiffs, on the eve of trial, would have had to prepare 

arguments explaining the differences between European 

and United States’ patent law and the significance of the 

statements in the prior proceedings. There is also no 

indication of how plaintiffs would have been able to cure 

that prejudice. Thus, the first two factors favor plaintiffs.

Case: 14-1065 Document: 76-2 Page: 18 Filed: 04/09/2015
INSITE VISION INCORPORATED v. SANDOZ, INC. 19

The third factor, disruption of trial, is neutral at best. 

Likewise, the fourth factor, bad faith, is neutral, given the 

fact that the district court made no finding either way on 

the question of bad faith. “Making no finding on the 

question of bad faith (which is what the district court did) 

is quite different from finding that there was no bad 

faith.” Konstantopoulos v. Westvaco Corp., 112 F.3d 710, 

720 n.7 (3d Cir. 1997). As for the fifth factor, relating to 

the importance of the excluded evidence, the district court 

was correct to at least question the relevance and probative value of the EPO file history under United States 

law. The situation here is thus notably different from the 

facts of ZF Meritor, where the exclusion of testimony 

“clear[ly]” foreclosed plaintiffs’ suit, despite the fact that 

they had won at the liability stage. 696 F.3d at 299. This 

factor, like the others, does not favor Sandoz. 

In view of the totality of evidence, we do not have a 

definite and firm conviction that the district court abused 

its discretion and have no reason to disturb the district 

court’s decision to exclude the EPO file history.

III. CONCLUSION

For the foregoing reasons, we affirm the district 

court’s determination that the asserted claims have not 

been shown to be invalid.

AFFIRMED

Case: 14-1065 Document: 76-2 Page: 19 Filed: 04/09/2015