United States Court of Appeals 

for the Federal Circuit 

__________________________ 

UNIGENE LABORATORIES, INC. AND 

UPSHER-SMITH LABORATORIES, INC., 

Plaintiffs-Appellees, 

v. 

APOTEX, INC. AND APOTEX CORP., 

Defendants-Appellants. 

__________________________ 

2010-1006 

__________________________ 

Appeal from the United States District Court for the 

Southern District of New York in case no. 06-CV-5571, 

Judge Robert P. Patterson, Jr. 

___________________________ 

Decided: August 25, 2011 

___________________________ 

BRUCE C. HAAS, Fitzpatrick, Cella, Harper & Scinto, of 

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

With him on the brief was STEVEN C. KLINE. 

MANNY D. POKOTILOW, Caesar, Rivise, Bernstein, 

Cohen & Pokotilow, Ltd., of Philadelphia, Pennsylvania, 

argued for defendants-appellants. With him on the brief 

were ROBERT S. SILVER, JAMES J. KOZUCH and MARC B.

BASSLER. Of counsel was WILLIAM JOSEPH CASTILLO. 

__________________________ 
UNIGENE LABS v. APOTEX 2

Before RADER, Chief Judge, MOORE, and O’MALLEY 

Circuit Judges. 

RADER, Chief Judge. 

The United States District Court for the Southern 

District of New York heard a dispute between Apotex, Inc. 

and Apotex Corp. (“Apotex”), the appellants, and Unigene 

Laboratories, Inc. and Upsher-Smith Laboratories, Inc. 

(collectively, “Unigene”), the appellees, over claim 19 of 

U.S. Patent No. RE40,812E (“’812E patent”). On crossmotions for summary judgment, the district court granted 

Unigene’s motion that the patent would not have been 

obvious at the time of invention. Unigene Labs., Inc.,v. 

Apotex, Inc. (“Summary Judgment Opinion”), No. 06-CV5571, Dkt. No. 175, slip op. at 28-29 (S.D.N.Y. Aug. 31, 

2009). The trial court also denied Apotex‘s motion to 

breach the attorney-client privilege under the crime-fraud 

exception. Unigene Labs., Inc.,v. Apotex, Inc. (“CrimeFraud Opinion”), No. 06-CV-5571, Dkt. No. 89, slip op. at 

18 (S.D.N.Y. Feb. 4, 2008). In addition, the district court 

determined that Apotex had waived several counterclaims. Unigene Labs., Inc.,v. Apotex, Inc. (“Counterclaim 

Opinion”), No. 06-CV-5571, 2010 WL 2730471 (S.D.N.Y. 

July 7, 2010). Because the district court correctly decided 

all of these motions, this court affirms. 

I. 

Unigene owns the ’812E patent through assignment 

from inventor Dr. William Stern (“Stern”). The ’812E 

patent is a reissue of U.S. Patent No. 6,440,392 (“’392 

patent”). The reissue occurred on June 30, 2009, while 

this case was before the district court. 

Covered by the ’812E patent, Fortical® is an Food and 

Drug Administration (“FDA”) approved pharmaceutical 

nasal spray with the active ingredient salmon calcitonin 
3 UNIGENE LABS v. APOTEX

(“salmon calcitonin” or “calcitonin”). Unigene filed for 

FDA approval under 21 U.S.C. § 355(b)(2) and now holds 

the New Drug Application (“NDA”) for Fortical®. Unigene’s NDA claims Miacalcin® as its reference drug, 

meaning that for FDA approval, Unigene had to prove 

that Fortical® was a bioequivalent of Miacalcin®. UpsherSmith is the exclusive patent licensee, with rights to 

market and sell Fortical® in the United States. Fortical® 

treats, among other things, postmenopausal osteoporosis. 

Fortical® is a bioequivalent of Novartis International 

AG’s Miacalcin® calcitonin nasal spray. Miacalcin® has 

been marketed since 1995, before the ’812E patent’s 

February 4, 2000 priority date. Unigene developed Fortical® as an alternative to Miacalcin®. 

Both Miacalcin® and Fortical® use salmon calcitonin 

at a concentration of 2,200 I.U./mL as their active ingredient. Salmon calcitonin is a natural polypeptide hormone. Calcitonins help regulate calcium ions in the blood 

and therefore address calcium-related conditions like 

osteoporosis. To be effective, polypeptides, like salmon 

calcitonin, must reach the bloodstream. Delivery to the 

bloodstream, however, is not easy because calcitonins are 

readily degraded by bodily fluids, are relatively unstable 

in pharmaceutical compositions, and are poorly absorbed 

through tissues. Miacalcin® and Fortical® are both nasal 

sprays. 

Fortical® and Miacalcin® have different formulations. 

For instance, Miacalcin® also contains 8.5 mg of sodium 

chloride, which acts as a tonicity agent; nitrogen, which 

acts as a sparging agent; hydrochloric acid, which acts as 

a pH adjuster; and purified water, which acts as a carrier. 

Of particular importance to this appeal, Miacalcin® 

contains 0.10 mg of benzalkonium chloride (“BZK”) which 

functions as a preservative, absorption enhancer, and 
UNIGENE LABS v. APOTEX 4

surfactant. In contrast, Fortical® contains 20 mM of 

citric acid, which functions as an absorption enhancer and 

stabilizer/buffer; polyoxyethylene(2) sorbitan monooleate 

(“polysorbate 80”), which acts as a surfactant; and 

phenylethyl alcohol and benzyl alcohol, which serve as 

preservatives. 

Apotex, a Canadian pharmaceutical company, filed 

Abbreviated New Drug Application (“ANDA”) No. 078200 

with the FDA on June 1, 2006. Apotex’s ANDA certified 

under 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (“paragraph IV 

certification”) intends to make, use, offer to sell, sell, 

and/or import a generic version of Unigene’s Fortical® 

product before the expiration of the ’812E patent. Because a paragraph IV certification is an act of infringement under 35 U.S.C. § 271(e)(2), see also Glaxo Group 

Ltd. v. Apotex, Inc., 376 F.3d 1339, 1351 (Fed. Cir. 2004), 

Unigene lodged a Complaint for infringement in the 

district court. The only asserted claim in the litigation is 

claim 19. Claim 19 reads: 

A liquid pharmaceutical composition for 

nasal administration comprising about 

2,200 MRC units of salmon calcitonin, 

about 20 mM citric acid, about 0.2% 

phenylethyl alcohol, about 0.5% benzyl alcohol, and about 0.1% polyoxyethylene(2) 

sorbitan monooleate 

’812E patent col.18 ll.1-5. 

Apotex’s original Answer of September 20, 2006 contained numerous affirmative defenses. In addition to 

allegations of invalidity under 35 U.S.C. §§ 101, 102, 103, 

and 112, Apotex alleged noninfringement and inequitable 

conduct. The inequitable conduct assertions cited the 

failure to disclose an allegedly material piece of prior art 

and making allegedly misleading statements during 
5 UNIGENE LABS v. APOTEX

patent prosecution. Apotex filed an Amended Answer on 

May 8, 2007 with two more inequitable conduct allegations, one based on an error in Table 3 of the ’392 patent 

and another based on the failure to disclose a piece of 

prior art. 

In September 2007, during fact discovery, Apotex 

moved to breach Unigene’s attorney-client privilege under 

the crime-fraud exception. In support of these allegations, Apotex referred to Unigene’s alleged failure to 

disclose U.S. Patent No. 5,912,014 (“’014 patent”) to the 

U.S. Patent and Trademark Office (“Patent Office”) and to 

errors in Table 3 of the ’392 patent, the same conduct 

upon which Apotex premised some of its inequitable 

conduct claims at issue in this appeal. 

The prior art ’014 patent, with Dr. Stern as a coinventor, carries the title “Oral Salmon Calcitonin Pharmaceutical Products.” The ’014 patent claims entericcoated solid pharmaceutical formulations of salmon 

calcitonin, administered orally. The ’014 patent discloses 

a solid oral tablet that the specification touts as a more 

convenient and comfortable dosage method for patients. 

The ’014 patent teaches an oral formulation that resists 

degradation during the digestion process to keep the 

salmon calcitonin active. The ’014 patent discloses experiments measuring the effects of citric acid on buffer 

pH, bioavailability of salmon calcitonin, and absorption of 

salmon calcitonin in the presence of enhancers. These 

experiments injected 0.5 mL of liquid formulation containing citric acid, taurodeoxycholic acid, mannitol, and 

calcitonin into the exposed duodenum of anesthetized 

rats. The experiments showed an increase in calcitonin’s 

bioavailability when the amount of citric acid was increased and noted that bioavailabilty was “minor” in the 

presence of enhancers when compared to citric acid alone. 
UNIGENE LABS v. APOTEX 6

Table 3 of the ’392 patent, reproduced below, shows 

the effect of citric acid concentration on the stability of 

salmon calcitonin stored at 50°C. Table 3 shows the 

percentage of calcitonin in formulations with different 

amounts of citric acid over fifteen days. As published ’392 

patent, Table 3 had two errors, indicated by the strikethrough lines: 

J.A. at 31. The error on the top axis, characterized as 

clearly typographical in nature by the district court, 

labels a column “20 mM” instead of “25 mM.” Second, the 

point of Apotex’s allegations, a data point on the table 

reads 20 percent instead of the 52 percent actually measured. The column containing the second error shows that 

a salmon calcitonin solution with 100 mM of citric acid 

degrades over time, as the percentages of recovered 

calcitonin decrease from 100 percent to 52 percent over 

time. Whether the 15 day measurement is 20 percent or 

52 percent, the recovery is still below the 66 percent 

recovered after 9 days. 

The record indicates that Dr. Stern immediately informed the Patent Office when he became aware of the 

errors in Table 3. Specifically, Dr. Stern submitted a 

declaration on September 7, 2007, explaining an “inadvertent error during automated data analysis.” He explained 
7 UNIGENE LABS v. APOTEX

further that the error did not affect the trend of salmon 

calcitonin reduction. 

The district court declined to find that these errors or 

non-disclosures were sufficient to pierce the attorneyclient privilege. The district court found the ’014 patent 

to be either immaterial to the ’392 patent or cumulative to 

the other cited references. Crime-Fraud Opinion, at 11. 

While both the ’014 patent and ’392 patent related to 

pharmaceutical formulations of salmon calcitonin, the 

district court found that the ’392 patent’s formulations 

were “considerably different” than formulations in the 

’014 patent and were, therefore, immaterial. CrimeFraud Opinion, at 11. The district court also found that 

Apotex’s proffered evidence of fraudulent intent regarding 

the ’014 patent was insufficient to establish a prima facie 

case of fraud. Id. at 12. 

The district court also found that the errors in Table 3 

of the ’392 patent were immaterial. Id. at 14-15. The 

district court found the corrected version of the table 

consistent with Unigene’s assertions at the Patent Office. 

Id. at 16. The district court concluded that the errors 

were not material with respect to patentability or common 

law fraud. Id. The district court also determined that 

evidence of Stern’s submission of a second declaration to 

clarify errors in Table 3 lacked deceptive intent, making 

that conduct insufficient to support an assertion of common law fraud. Id. at 17-18. 

Unigene and Apotex cross-moved for summary judgment on obviousness. The Patent Office granted reissue 

of the ’392 patent on June 30, 2009, at which point the 

district court granted Unigene’s motion to amend the 

Complaint to replace all references to the ’392 patent with 

the reissued ’812E patent. Apotex filed an Answer to 

Unigene’s Amended Complaint on July 20, 2009 that 
UNIGENE LABS v. APOTEX 8

included several additional counts of inequitable conduct. 

Without addressing these new claims, the district court 

granted Unigene summary judgment of nonobviousness 

and entered judgment. 

The district court found that the ’812E patent would 

not have been obvious at the time of invention as a matter 

of law. Summary Judgment Opinion at 29. In considering forty-plus pieces of prior art submitted by Apotex (also 

considered by the Patent Office during prosecution of the 

’812E patent), the district court found that no prior art 

teaches using 20 mM citric acid to achieve “both shelf 

stability and enhanced bioavailability” in a nasal salmon 

calcitonin formulation. Summary Judgment Opinion at 

15. 

The district court also found that it would not have 

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

modify Miacalcin® to reach the formulation of claim 19. 

The record shows that a person of ordinary skill was an 

individual with a masters degree in chemistry, pharmaceutical chemistry, biochemistry, or a similar field with at 

least eight years of practical experience in pharmaceutical 

liquid dosage form development, or an individual with a 

Ph.D. in the same fields with at least four years of practical experience in pharmaceutical liquid dosage form 

development. Specifically, the district court determined 

first that BZK serves as an absorption enhancer, a preservative, and a surfactant in Miacalcin®. Then, the 

court relied on expert testimony to conclude that a person 

of ordinary skill would have been motivated to find other 

FDA-approved compounds that serve as both absorption 

enhancers and preservatives of calcitonin. Further, the 

district court found that the prior art taught alternative 

methods of improving bioavailability and absorption of 

calcitonin. 
9 UNIGENE LABS v. APOTEX

In response to the court’s summary judgment rulings, 

Apotex moved for reconsideration in light of its counterclaims of inequitable conduct. The district court granted 

Apotex’s motion to consider its counterclaims. Nonetheless the district court re-entered judgment for Unigene. 

The district court held that all of Apotex’s defenses and 

counterclaims, those asserted in 2006-07 and those Apotex sought to add in 2009, had been conceded, waived, 

barred, abandoned, or improperly raised. Apotex appeals 

the district court’s rejection of the three added inequitable 

conduct counterclaims (“Count XII, Count XIII, and Count 

XIV”). This court has jurisdiction under 35 U.S.C. § 

1295(a)(1). 

II. 

This court applies its own law to review a district 

court’s application of the crime-fraud exception to the 

attorney-client privilege. In re Spalding Sports Worldwide, Inc., 203 F.3d 800 (Fed. Cir. 2000). This court 

reviews a district court’s determination of material protected by the attorney-client privilege for an abuse of 

discretion. Apotex Corp. v. Merck & Co., 507 F.3d 1357, 

1362 (Fed. Cir. 2007). 

A party must establish Walker-Process fraud, also 

known as common law fraud, to successfully pierce the 

attorney-client privilege under the crime-fraud exception. 

See Walker-Process Equip., Inc. v. Food Mach. & Chem. 

Corp., 382 U.S. 172, 177 (1965). A finding of common law 

fraud in the patent context “must be based on independent and clear evidence of deceptive intent together with a 

clear showing of reliance.” Spalding, 203 F.3d at 803; see 

Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 

1059, 1070 (Fed. Cir. 1998) (holding that both fraudulent 

misrepresentations and omissions can support a finding of 

common law fraud). Such independent and clear evidence 
UNIGENE LABS v. APOTEX 10

must establish a prima facie case of fraud, which is “generally held not to exist” unless the accusing party can 

show: 

(1) a representation of material fact, (2) 

the falsity of that representation, (3) the 

intent to deceive or, at least, a state of 

mind so reckless as to the consequences 

that it is held to the equivalent of intent 

(scienter), (4) a justifiable reliance upon 

the misrepresentation by the party deceived which induces him to act thereon, 

and (5) injury to the party deceived as a 

result of his reliance on the misrepresentation 

Spalding Sports, 203 F.3d at 807 (citing Nobelpharma, 

141 F.3d at 1069-70). This court need only examine 

Apotex’s proffered evidence of intent to uphold the district 

court’s refusal to invoke the crime-fraud exception. 

The record does not show clear evidence of intent for 

either of the alleged fraudulent acts by Unigene. As noted 

by the district court, the record contains only an essentially “unsupported allegation” that Dr. Stern intentionally left the ’014 patent off of the initial information 

disclosure statement of the ’392 patent. Crime-Fraud 

Opinion, at 12. The second allegation of fraud rests on a 

similarly flimsy foundation. 

In the first place, the typographical error in Table 3 of 

the ’392 patent, corrected on reissue, does not call for the 

extreme remedy of piercing the attorney-client privilege. 

The district court found the “evidence tend[ed] to prove 

that this error was an honest mistake, though perhaps a 

careless one.” Id. at 16. Indeed, Dr. Stern submitted a 

declaration during the reissue proceedings to explain the 

error in Table 3. Further, as the trial court found, the 
11 UNIGENE LABS v. APOTEX

error itself did not alter the arguments made by Unigene 

to the PTO. Accordingly, the district court concluded that 

the record did not show any evidence of intent to deceive 

the Patent Office. Id. at 18. 

The district court did not abuse its discretion in these 

findings on the crime-fraud exception to the attorneyclient privilege. This court need not reach the district 

court’s materiality determinations because the record is 

devoid of sufficient intent evidence. 

III. 

This court reviews a district court’s denial of a party’s 

motion to amend its pleadings under the law of the regional circuit. Panduit Corp. v. All States Plastic Mfg. 

Co., 744 F.2d 1564, 1575 (Fed. Cir. 1984). The United 

States Court of Appeals for the Second Circuit reviews a 

district court’s denial of a request to amend pleadings for 

an abuse of discretion. Parker v. Columbia Pictures 

Indus., 204 F.3d 326, 339-40 (2d Cir. 2000). Apotex 

appeals the court’s refusal to add Counts XII, XIII, and 

XIV to its Answer to Unigene’s Amended Complaint. 

Apotex does not challenge the district court’s rulings with 

respect to the allegations of inequitable conduct asserted 

in its Original and First Amended Answers. The district 

court’s decision was based on its determination that 

Unigene’s Amended Complaint did not change the scope 

of the original Complaint and therefore did not provide an 

opportunity for Apotex to expand the breadth of its affirmative defenses or counterclaims. 

The record shows that the district court acted well 

within its discretion in finding that Apotex’s added counterclaims were not “colorable grounds for relief.” 

Blaskiewicz v. Cnty. of Suffolk, 29 F. Supp. 2d 134, 138 

(E.D.N.Y. 1998) (citation omitted). The trial court is 

especially well positioned to assess whether the Amended 
UNIGENE LABS v. APOTEX 12

Complaint it authorized materially changed the scope of 

the original Complaint. Counts XII, XIII, and XIV all 

relate to inequitable conduct. The district court found 

that the filing of an Amended Complaint, which merely 

renamed the patent in suit post-reexamination, did not so 

materially alter the proceedings as to authorize previously unasserted counterclaims. The district court found 

Count XII improper because, inter alia, the new claim 

provided inadequate notice to Unigene. The district court 

barred Counts XIII and XIV, which mirror Apotex’s crimefraud allegations, based on the same fatal absence of 

materiality and intent already addressed in the CrimeFraud Opinion. This court agrees that the record shows 

insufficient evidence of fraudulent intent and erects an 

insurmountable obstacle to Apotex’s new counterclaims. 

Accordingly, the district court did not abuse its discretion 

by denying Claims XII, XIII, and XIV. 

IV. 

This court reviews the district court’s grant of summary judgment without deference. Eisai Co. Ltd. v. Dr. 

Reddy’s Labs., 533 F.3d 1353, 1356 (Fed. Cir. 2008). 

Summary judgment is appropriate if the movant can show 

both the absence of genuine issues of material fact and 

entitlement to judgment as a matter of law. Fed. R. Civ. 

P. 56(c). This court reviews the evidence in the light most 

favorable to the party opposing the motion, with all 

doubts resolved in favor of the nonmovant. Ortho-McNeil 

Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358, 1360-61 

(Fed. Cir. 2008). 

Obviousness under 35 U.S.C. § 103(a) is a legal question based on underlying factual determinations. Eisai, 

533 F.3d at 1356 (citing Richardson-Vicks Inc. v. Upjohn 

Co., 122 F.3d 1478, 1479 (Fed. Cir. 1997)). An obviousness analysis measures the difference between the 
13 UNIGENE LABS v. APOTEX

claimed invention and the prior art to determine whether 

“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. Alza Corp. v. Mylan Labs., Inc., 

464 F.3d 1286, 1289 (Fed. Cir. 2006) (citing In re Kahn, 

441 F.3d 977, 985 (Fed. Cir. 2006)). The factual underpinnings, often referred to as the Graham factors, include 

1) the scope and content of the prior art; 2) the level of 

ordinary skill in the art; 3) the differences between the 

claimed invention and the prior art; and 4) evidence of 

secondary factors, also known as objective indicia of nonobviousness. Graham v. John Deere Co., 383 U.S. 1, 17-18 

(1966). 

Obviousness requires more than a mere showing that 

the prior art includes separate references covering each 

separate limitation in a claim under examination. KSR 

Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007). Rather, 

obviousness requires the additional showing that a person 

of ordinary skill at the time of the invention would have 

selected and combined those prior art elements in the 

normal course of research and development to yield the 

claimed invention. Id. at 421 (describing that a person of 

ordinary skill possesses “ordinary creativity, [and is] not 

an automaton”); see also Bayer Schering Pharm. AG v. 

Barr Labs., Inc., 575 F.3d 1341, 1350 (Fed. Cir. 2009) 

(Newman, J., dissenting) (“The statutory criterion is 

whether the invention would have been obvious to persons of ordinary skill at the time of the invention, not 

whether it is sufficiently simple to appear obvious to 

judges after the discovery is finally made . . . .”). 

A person of ordinary skill at the time of the invention 

interprets the prior art using common sense and appropriate perspective. KSR, 550 U.S. at 421. In KSR the 

Supreme Court observed: 
UNIGENE LABS v. APOTEX 14

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. If this 

leads to the anticipated success, it is likely 

the product not of innovation but of ordinary skill and common sense. 

Id. Accordingly, when design need and market pressure 

may dictate a commonsensical path using a finite number 

of identified predictable solutions to one of ordinary skill, 

deviations from that path are likely products of innovation. 

This court has observed that teachings from prior art, 

suggestions beyond the literal teachings of those art 

references, or even motivations from the store of common 

knowledge of one of ordinary skill in the art field 

(“TSM”)—flexibly viewed and applied—provide the 

sources of evidence that an ordinary skilled artisan might 

have found and combined at the time of the invention. 

Ortho-McNeil, 520 F.3d at 1364-65 (“[A] flexible TSM test 

remains the primary guarantor against a non-statutory 

hindsight analysis . . . .”); see also KSR, 550 U.S. at 419 

(“The obviousness analysis cannot be confined by a formalistic conception of the words, teachings, suggestion, 

and motivation, or by overemphasis on the importance of 

published articles and the explicit content of issued 

patents.”). 

In this case, the patent claims a new composition or 

formulation to deliver an FDA-approved active ingredient. 

Thus, the claimed invention is not obvious if a person of 

ordinary skill would not select and combine the prior art 

references to reach the claimed composition or formula-
15 UNIGENE LABS v. APOTEX

tion. Eli Lilly v. Zenith Goldline Pharm., 471 F.3d 1369, 

1380 (Fed. Cir. 2006) (“to establish a prima facie case of 

obviousness based on a combination of elements in the 

prior art, the law requires a motivation to select the 

references and to combine them in the particular claimed 

manner to reach the claimed invention”). 

To render a claim obvious, prior art cannot be “vague” 

and must collectively, although not explicitly, guide an 

artisan of ordinary skill towards a particular solution. 

Bayer Schering., 575 F.3d at 1347. Indeed, “most inventions that are obvious were also obvious to try,” id., and a 

combination is only obvious to try if a person of ordinary 

skill has “a good reason to pursue the known options.” 

KSR, 550 U.S. at 421. When a field is “unreduced by 

direction of the prior art,” and when prior art gives “no 

indication of which parameters were critical or no direction as to which of many possible choices is likely to be 

successful,” an invention is not obvious to try. Bayer 

Schering, 575 F.3d at 1347 (citing O’Farrell, 853 F.2d at 

903); see also Ortho-McNeil, 520 F.3d at 1364 (stating the 

number of options must be “small or easily traversed”). 

A prima facie case of obviousness in the chemical arts 

is often based on a known compound, called a “lead compound,” which serves as a starting point for a person of 

ordinary skill developing the claimed invention. See 

Eisai, 533 F.3d at 1357. Where the patent at issue claims 

a chemical compound, a lead compound is often used to 

show structural similarities between the claimed compound and prior art. Id. (citing Eli Lilly, 471 F.3d at 

1377). In the context of a composition or formulation 

patent where the patented formulation was made to 

mimic a previously FDA-approved formulation, the functional and pharmaceutical properties of the “lead compound” can be more relevant than the actual chemical 

structure (though not always mutually exclusive). Thus, 
UNIGENE LABS v. APOTEX 16

the term “reference composition” is more appropriate than 

“lead compound” when considering obviousness for a 

chemical composition that the infringer deliberately 

imitates. In this case, Miacalcin® serves as the “reference 

composition” for Dr. Stern’s development of the claimed 

composition. In Miacalcin®, BZK acts as a preservative, 

absorption enhancer, and surfactant. Claim 19 of the 

’812E patent is the result of Dr. Stern’s effort to design 

around Miacalcin®. It is undisputed that “about 20 mM 

citric acid” in claim 19 functions as an absorption enhancer and surfactant in Fortical®. 

Although claim 19 does not assign any particular 

functionality or property to its list of components, a 

person of ordinary skill, someone in the field of pharmaceutical liquid dosage form development, would have had 

reasons—specifically, design need and market demand—

to create an FDA-approved liquid nasal composition that 

delivers salmon calcitonin. See KSR, 550 U.S. at 421. In 

this case, the design need is to achieve a bioequivalent 

composition. The market demand is to achieve a composition that treats the same symptoms as the reference 

formulation. Specifically, on February 4, 2000, someone 

developing a pharmaceutical nasal liquid dosage form 

with the active ingredient of salmon calcitonin would 

have known that a bioequivalent of Miacalcin®, largely 

determined by equivalent bioavailability of salmon calcitonin, would have the best chance to gain FDA approval 

quickly. See 21 § C.F.R. 320.23(b) (“Two drug products 

will be considered bioequivalent drug products if they are 

pharmaceutical equivalents or pharmaceutical alternatives whose rate and extent of absorption do not show a 

significant difference when administered at the same 

molar dose of the active moiety under similar experimental conditions . . . .”); id. (“Bioavailability means the rate 

and extent to which the active ingredient or active moiety 
17 UNIGENE LABS v. APOTEX

is absorbed from a drug product and becomes available at 

the site of action.”). Creating a bioequivalent of 

Miacalin® would allow approval of the new pharmaceutical liquid dosage form as an ANDA under 21 U.S.C. 

§ 355(j)(2)(A)(vii) or an NDA under 21 U.S.C. § 505(b)(2)—

both enjoying the additional advantage of using the 

clinical data or literature submitted in support of Miacalcin®. Alternatively, a composition requiring full clinical 

trials to demonstrate safety and effectiveness would 

require approval as an NDA under 35 U.S.C. § 505(b)(1), 

a significantly longer process. This court appreciates that 

the Hatch-Waxman Act encourages and rewards replication of protected compounds in some circumstances—an 

activity that rarely, but can, lead to innovative products. 

While claim 19 contains several excipients in addition 

to salmon calcitonin, at oral argument, Unigene acknowledged that “citric acid is a very important part” of claim 

19’s case for inventiveness and nonobviousness. Oral 

Argument at 21:48-22:00, available at 

http://www.cafc.uscourts.gov/oral-argumentrecordings/2010-1006/all. While the district court found 

other elements in combination were also nonobvious, this 

court agrees that the inclusion of “about 20 mM citric 

acid” in the composition provides the strongest case for 

nonobviousness. 

Apotex asserted for the first time at oral argument 

that claim 19 is obvious in light of three pieces of prior 

art: Miacalcin®, the Day reference, and the ’014 patent. 

Id. at 4:50. As discussed above, Miacalcin® serves as the 

reference composition. 

On the basis of the record before this court, this court 

agrees that no reasonable juror could conclude that the 

’014 patent would give a person of ordinary skill sufficient 

reason or motivation to use about 20 mM citric acid in a 
UNIGENE LABS v. APOTEX 18

liquid nasal salmon calcitonin composition. See KSR, 550 

U.S. at 421. The ’014 patent claims a solid oral dosage of 

salmon calcitonin, not a liquid formulation. While the 

experiments discussed in the ’014 patent found that “the 

bioavailability of salmon calcitonin increased nearly 10 

fold when the amount of citric acid in the formulation was 

increased only 5 fold,” ’014 patent col.11 ll.33-35, a person 

of ordinary skill (not Dr. Stern, a co-inventor of the ’014 

patent) would not glean from the ’014 results a reason to 

use about 20 mM citric acid in a nasal calcitonin formulation. The ’014 patent itself describes a solid oral formulation of salmon calcitonin. Although the ‘014 patent 

mentions citric acid, that discussion refers to concentrations of citric acid much higher than those in claim 19. 

Moreover, the ’014 patent examined citric acid for 

bioavailability in the context of a liquid injection into a 

rat duodenum, not a human use in a liquid pharmaceutical formulation. These significant differences would not 

cause a person of ordinary skill to replace BZK in Miacalcin® with 20 mM of citric acid in the normal course of 

research and development. 

To a person of ordinary skill in the art, citric acid, 

even at about 20 mM concentrations, would not be an 

obvious substitute for BZK’s functions as an absorption 

enhancer and as a surfactant because citric acid has a 

vague role in even the closest prior art. See Eli Lilly, 471 

F.3d at 1380. U.S. Patent No. 5,124,315 (“’315 patent”) 

describes liquid pharmaceutical compositions for nasal 

administration containing a polypeptide as an active 

ingredient. Example 5 of the ’315 patent uses 20.5 mM of 

citric acid in a liquid nasal formulation containing salmon 

calcitonin as its active ingredient. ’315 patent col.3 l.43. 

The ’315 patent makes clear however that “citric acid was 

not used as an absorption enhancing agent, but it is 
19 UNIGENE LABS v. APOTEX

merely the acidic component of the buffer.” Id. at col.4 

ll.18-23. 

In fact, the ’315 patent teaches away from using about 

20 mM citric acid as an absorption enhancing agent or 

stabilizing agent in a liquid formulation with a salmon 

calcitonin active ingredient. The ’315 patent discusses 

U.S. Patent No. 4,476,116 (“’116 patent”), directed toward 

nasal compositions having enhanced peptide absorption. 

The ’116 patent lists over fifty examples, including citric 

acid, of pharmaceutically acceptable chelating agents to 

serve as absorption agents. ’116 patent col.11 l.1. Both 

parties agree that the ’315 patent reports that the compounds listed in the ’116 patent yielded “discouraging” 

test results, and that “only ammonium tartrate is a 

satisfactory stabilizing agent for liquid nasal compositions 

containing polypeptides as active ingredient [sic].” ’315 

patent col.2 ll.13-16, 19-21. One of ordinary skill in the 

art reading the ’315 and ’116 patents would have considered about 20 mM citric acid undesirable in a liquid nasal 

formulation containing salmon calcitonin. 

The Day reference, a publication about pharmaceutical preformulation and formulation, lists benzyl alcohol 

and phenylethyl alcohol as two of nine listed preservatives on a table of “Excipients used in aqueous nasal 

products.” J.A. at 11397. BZK is one of the nine listed 

preservatives in Day, along with benzethonium chloride, 

chlorobutanol, methylparaben, phenylmercuric acetate, 

propylparaben, and thimerosal. Citric acid is not included 

in the list of preservatives, but appears instead as a pH 

adjuster or buffer. The Day reference also lists polysorbate 20 and 80 as one of three surfactants used as excipients in aqueous nasal products. With reference to this 

prior art, there is no evidence to support the conclusion 

that a person of ordinary skill would expect a combination 

of citric acid, benzyl alcohol, phenylethyl alcohol, and 
UNIGENE LABS v. APOTEX 20

polysorbate 80 to contain a buffer, pH adjuster, preservative, and surfactant, but no absorption enhancer or excipient to promote bioavailability. 

Thus, the “about 20.0 mM citric acid” limitation alone 

supports the district court’s grant of summary judgment 

of nonobviousness. When used as an absorption enhancer 

in the ’116 patent, citric acid was one of over fifty options. 

See KSR, 550 U.S. at 421. Further, when the prior art 

used citric acid at about 20 mM, as in the ’315 patent, it 

was used only as a buffer. There is no genuine dispute of 

material fact that a person of ordinary skill attempting to 

make a liquid composition to deliver salmon calcitonin 

into a human body through nasal administration, would 

not have considered using about 20 mM citric acid with 

the narrowly claimed amounts of benzyl alcohol, 

phenylethyl alcohol, and polysorbate 80, because the 

formulation would not be expected to perform properly to 

meet the specificity of a pharmaceutical use. Thus, even 

accepting that there was a design need and market pressure to develop a pharmaceutical formulation that is 

bioequivalent to Miacalcin®, there is no evidence in the 

record that claim 19 would be an obvious solution to those 

motivations. 

V. 

Accordingly, this court affirms the district court’s 

grant of summary judgment of nonobviousness in favor of 

Unigene, affirms the district court’s denial of summary 

judgment of obviousness, affirms the district court’s 

denial of Apotex’s crime-fraud motion, and affirms the 

district court’s dismissal of Apotex’s new claims and 

defenses. 

AFFIRMED 

Each party shall bear its own costs.