Opinion ID: 4445789
Heading Depth: 4
Heading Rank: 3

Heading: “Consisting Essentially Of”

Text: Several of the claims in the formulation patents recite, either directly (via independent claims) or indirectly (via dependent claims), a formulation “consisting essentially of” 5 The ’613 patent recites “degrades by” while the ’591 patent recites “degrades at.” 6 Claim 24 of the ’613 patent recites a formulation that degrades by less than “0.5% over 6 months.” ’613 patent col. 28 ll. 50–51. HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 21 various ingredients. 7 Claim 49 of the ’838 patent is illustrative. It recites: 49. A topical formulation consisting essentially of: 1–2% w/w diclofenac sodium; 40–50% w/w DMSO; 23–29% w/w ethanol; 10–12% w/w propylene glycol; hydroxypropyl cellulose; and water to make 100% w/w, wherein the top- ical formulation has a viscosity of 500–5000 centipoise. ’838 patent col. 30 ll. 60–67 (emphasis added). The dissent argues that the claimed formulation cannot be indefinite in light of the expressly listed ingredients of the invention. Dissent Op. at 5. The dissent’s position, however, would render the claim meaningless because it would have us read the term “essentially” out of the phrase “consisting essentially of,” resulting in the separate and distinct claim phrase, “consisting of.” This reading would be contrary to the well-established “principle that claim language should not [be] treated as meaningless.” Bicon, Inc. v. Straumann Co., 441 F.3d 945, 951 (Fed. Cir. 2006); Playtex Prods., Inc. v. Procter & Gamble Co., 400 F.3d 901, 908 (Fed. Cir. 2005) (rejecting the district court’s construction of the claim because it “reads out the essence of the claim limitation ‘substantially flattened’ as it 7 The relevant claims of the formulation patents are claims 49–52 and 55–61 of the ’838 patent; claims 12–15, 17, 19, and 24–25 of the ’591 patent; claims 2–5 and 8–11 of the ’304 patent; claims 2–5 and 9–12 of the ’305 patent; and claims 2–5 and 9–12 of the ’784 patent. 22 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. equates ‘flattened’ with ‘flat’”); Application of Sabatino, 480 F.2d 911, 913 (CCPA 1973). Here, the dissent reads out the term “essentially” so as to render the claim term to “consists of” or simply “consists.” The phrase “consisting essentially of” has a distinct meaning within our jurisprudence. It is a transition phrase often used to signal a partially open claim. PPG Indus., 156 F.3d at 1354. The phrase serves as a middle ground between closed-ended claims using the phrase “consisting of” and open-ended claims using the phrase “comprising.” Id.; AK Steel Corp. v. Sollac & Ugine, 344 F.3d 1234, 1239 (Fed. Cir. 2003). Accordingly, a drafter will generally include the phrase “consisting essentially of” before (a) a list of ingredients when dealing with a composition claim, or (b) a series of steps when dealing with a process claim. PPG Indus., 156 F.3d at 1354. By doing so, “the drafter signals that the invention necessarily includes the listed ingredients [but] is open to unlisted ingredients that do not materially affect the basic and novel properties of the invention.” Id. Put differently, “[t]he phrase ‘consisting essentially of’ . . . permit[s] inclusion of components not listed in the claim, provided that they do not ‘materially affect the basic and novel properties of the invention.’” AK Steel, 344 F.3d at 1239. In light of our case law, the district court considered “consisting essentially of” in accordance with its legal meaning: “consisting of only the specified materials and those that do not materially affect the basic and novel properties of the claimed invention.” J.A. 17. The parties do not dispute the legal meaning adopted by the district court about the phrase “consisting essentially of.” Instead, the parties’ dispute focuses on the basic and novel properties of the formulation patents. These properties are implicated by virtue of the phrase “consisting essentially of,” which allows unlisted ingredients to be added to the formulation so long as they do not materially affect the basic and novel properties. HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 23 The district court held that the specification of the formulation patents identified five basic and novel properties: (1) better drying time; (2) higher viscosity; (3) increased transdermal flux; (4) greater pharmacokinetic absorption; and (5) favorable stability. J.A. 23. Although Actavis maintains that the specification does not identify these characteristics as important enough to be considered basic and novel properties, we are unpersuaded. The specification adequately identifies each of these properties by separate subheadings in the section titled “Characteristics of the Gel Formulation.” ’838 patent col. 9 l. 1–col. 10 l. 47. That section includes five subheadings: (a) “Transdermal Flux”; (b) “Viscosity”; (c) “Stability”; (d) “Drying Time”; and (e) “Pharmacokinetics.” Id. Each subheading not only identifies the specific characteristic but also includes relevant discussion about its importance. The specification further highlights these features as advantageous over prior art, stating that the inventive formulation “display[s] a better drying time, higher viscosity, increased transdermal flux, and greater pharmacokinetic absorption,” in addition to providing other advantages such as “favorable stability.” Id. col. 4 ll. 21–32. With these particular aspects noted, the specification then states that the inventive formulation “provide[s] superior means for delivery of diclofenac sodium through the skin for the treatment of osteoarthritis.” Id. col. 4 ll. 36–39. The district court thus correctly concluded that the intrinsic record identifies these characteristics as the basic and novel properties. Next, we turn to whether the Nautilus definiteness standard applies to the basic and novel properties of an invention. In Nautilus, the Supreme Court held that “a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” 572 U.S. at 901. The district court evaluated the basic and 24 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. novel properties under this definiteness standard. Horizon maintains that was legal error. Horizon argues that the Nautilus definiteness standard focuses on the claims and therefore does not apply to the basic and novel properties of the invention. This argument, however, is misguided. By using the phrase “consisting essentially of” in the claims, the inventor in this case incorporated into the scope of the claims an evaluation of the basic and novel properties. The use of “consisting essentially of” implicates not only the items listed after the phrase, but also those steps (in a process claim) or ingredients (in a composition claim) that do not materially affect the basic and novel properties of the invention. Having used the phrase “consisting essentially of,” and thereby incorporated unlisted ingredients or steps that do not materially affect the basic and novel properties of the invention, a drafter cannot later escape the definiteness requirement by arguing that the basic and novel properties of the invention are in the specification, not the claims. Indeed, this contravenes the legal meaning associated with the phrase “consisting essentially of.” And a holding to the contrary would promote the innovation-discouraging “zone of uncertainty” that the Supreme Court has warned against. See Nautilus, 572 U.S. at 911 (rejecting the “not amenable to construction or insolubly ambiguous” definiteness standard in favor of one that fosters the public-notice function of the definiteness requirement); United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942) (“The statutory requirement of particularity and distinctness in claims is met only when they . . . clearly circumscribe what is foreclosed from future enterprise. A zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement claims would discourage invention only a little less than unequivocal foreclosure of the field.”). Notably, the phrase “consisting essentially of” is not per se indefinite. Indeed, a patentee can reap the benefit of claiming unnamed ingredients and steps by employing the phrase HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 25 “consisting essentially of” so long as the basic and novel properties of the invention are definite. Horizon attempts to cast the issue about the bounds of the basic and novel properties as one that should not be addressed at the claim construction stage, arguing this court considers those properties solely as factual determinations of validity and infringement. See Appellant Br. 41– 42. But Horizon’s view about the role of the basic and novel properties disregards one of the cornerstones of the definiteness requirement: to afford clear notice of what is being claimed so as to apprise the public of what is still open to them. Nautilus, 572 U.S. at 909. The Supreme Court has repeatedly emphasized why the definiteness requirement demands clear notice of what is being claimed. In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., the Court explained: The patent laws “promote the Progress of Science and useful Arts” by rewarding innovation with a temporary monopoly. U.S. Const., Art. I, § 8, cl. 8. The monopoly is a property right; and like any property right, its boundaries should be clear. This clarity is essential to promote progress, because it enables efficient investment in innovation. A patent holder should know what he owns, and the public should know what he does not. For this rea- son, the patent laws require inventors to describe their work in “full, clear, concise, and exact terms,” 35 U.S.C. § 112, as part of the delicate balance the law attempts to maintain between inventors, who rely on the promise of the law to bring the inven- tion forth, and the public, which should be encouraged to pursue innovations, creations, and new ideas beyond the inventor’s exclusive rights. 535 U.S. 722, 730–31 (2002). Accordingly, “[t]he limits of a patent must be known” because the goal of the definiteness requirement is “to guard against unreasonable advantages 26 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. to the patentee and disadvantages to others arising from uncertainty.” Gen. Elec. Co. v. Wabash Appliance Corp., 304 U.S. 364, 369 (1938). That is why “inventor[s] must inform the public [about] the limits of the monopoly asserted, [i.e., the patented invention,] so that it may be known which features may be safely used or manufactured without a license and which may not.” Id. (internal quotation marks omitted). Having determined that the basic and novel properties of an invention are part of the scope of the claims in this case, it follows that those basic and novel properties, “when read in light of the specification and the prosecution history, must provide objective boundaries for those of skill in the art.” See Interval Licensing, 766 F.3d at 1371; see also Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1350 (Fed. Cir. 2005) (“Some objective standard must be provided in order to allow the public to determine the scope of the claimed invention.”). That the basic and novel properties may not be precise does not automatically render them indefinite. See Seattle Box Co. v. Indus. Crating & Packing, Inc., 731 F.2d 818, 826 (Fed. Cir. 1984). Instead, the basic and novel properties must be sufficiently definite so as to inform, with reasonable certainty, a POSITA of their scope within the context of the invention. Nautilus, 572 U.S. at 901. Two questions arise when claims use the phrase “consisting essentially of.” One question focuses on definiteness: what are the basic and novel properties of the invention? The other question focuses on infringement: does a particular unlisted ingredient materially affect those basic and novel properties? There certainly may be circumstances where it will be up to a fact-finder to determine whether an unlisted ingredient has a material effect on the basic and novel properties of the invention. Our analyses in PPG Industries and AK Steel of patents using the term “consisting essentially of” in the claims is instructive as to this distinction. HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 27 In PPG Industries, we evaluated a patent directed to a green-tinted glass with specific light transmittance characteristics. 156 F.3d at 1352. The patent claimed that the composition of the glass “consist[ed] essentially of” a list of chemical ingredients. Id. Iron sulfide was not listed in the claims and was present in the accused product. Id. at 1354. The alleged infringer defended on that basis. At trial, since the claims used the phrase “consisting essentially of,” the district court instructed the jury that the claimed glass included other ingredients not specifically identified in the claim so long as those unlisted ingredients did not have a material effect on the basic and novel properties of the glass. Id. at 1354. The parties had agreed that the basic and novel properties of the claimed glass were color, composition, and light transmittance. Id. We held that, because “the patent is silent about iron sulfide and about what constitutes a material effect on the properties of the glass,” it was proper for “the jury to determine whether the amounts of iron sulfide in [the accused glass] have a material effect on the basic and novel characteristics of the glass.” Id. at 1357. In AK Steel, we dealt with patents directed to hot-dip aluminum-coated stainless steel. 344 F.3d at 1236. One of the patents at issue used the phrase “consisting essentially of aluminum” in the claims. Id. at 1237. The district court construed the phrase to permit only up to about 0.5% silicon. Id. at 1238. Since the accused product included aluminum and 8.0%–8.5% silicon, the district court granted summary judgment of noninfringement. Id. We affirmed, noting that the patent clearly identified “good wetting” as the goal of the invention and as the distinguishing feature from the prior art. Id. at 1239–40. This was a basic and novel property. The specification also stated that having silicon in excess of 0.5% by weight in an aluminum coating did not achieve the goal of “good wetting.” See id. In other words, 0.5% silicon by weight served as a threshold, and 28 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. anything above it would not achieve the goal of “good wetting.” We held that PPG Industries did not compel the district court to submit the issue of whether more than 0.5% silicon materially alters the basic and novel properties of the invention to the jury. Id. at 1240–41. We explained that the specification in PPG Industries was silent about iron sulfide and what constitutes a material effect on the properties of the glass. Id. at 1240. But, unlike PPG Industries, the specification at issue in AK Steel was far from silent about silicon and its material effect on the properties of the invention, particularly where the specification identified having silicon in excess of 0.5% by weight in aluminum coating as contravening the goal of “good wetting.” Id. The district court was thus correct to construe the claims as not encompassing steel coated with aluminum containing more than about 0.5% silicon, and then grant summary judgment of noninfringement because the accused product contained 8.0%–8.5% silicon. Id. at 1240–41. In relation to this case, the crucial teachings from both PPG Industries and AK Steel is that courts evaluating claims that use the phrase “consisting essentially of” may ascertain the basic and novel properties of the invention at the claim construction stage, and then consider if the intrinsic evidence establishes what constitutes a material alteration of those properties. The definiteness inquiry focuses on whether a POSITA is reasonably certain about the scope of the invention. Indeed, if a POSITA cannot ascertain the bounds of the basic and novel properties of the invention, then there is no basis upon which to ground the analysis of whether an unlisted ingredient has a material effect on the basic and novel properties. To determine if an unlisted ingredient materially alters the basic and novel properties of an invention, the Nautilus definiteness standard requires that the basic and novel properties be known and definite. Accordingly, in this case, the district court did not err in considering the definiteness of the basic and novel properties during claim construction. HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 29 Lastly, we address whether the district court erred in determining that the basic and novel property of “better drying time” was indefinite. We conclude that it did not. The section of the specification listing the basic and novel properties of the invention includes a subheading for “Drying Time.” ’838 patent col. 10 l. 5. Under that subheading, the specification explains that the compositions of the invention “dry quicker” than previously disclosed compositions. Id. col. 10 ll. 6–10. In support, the specification discloses results from two tests: an in vivo test and an in vitro test. As to the in vivo test, the specification states that “[t]he drying time difference is evident when equal amounts of the two products are tested on opposite limbs. Within thirty (30) minutes the compositions of the invention are almost completely dry whereas a significant amount of the previously described liquid formulation remains.” Id. col. 10 ll. 15–21. No other data is provided about the test. As to the in vitro test, the specification notes that “drying times” were compared “more quantitatively” by conducting side-by-side comparisons. Id. col. 10 ll. 22–23. To do so, the inventors “measured the residual weight of formulations by placing equal amounts (100 mg) of a prior art formulation and compositions of the invention in weighing dishes . . . and weighing the amount remaining over time.” Id. col. 10 ll. 23–27. According to the specification, under this methodology “a difference is immediately noticeable, and becomes dramatically different by 4 hours.” Id. col. 10 ll. 27–29. The in vitro test corresponds with Example 5, and Table 12 reflects the data from the test. Example 5, entitled “Comparison of Drying Time/Residual Weight of a Comparative Liquid Formulation Solution Versus the Corresponding Gel,” reveals that the prior art formulation was compared to three gel compositions which are embodiments of the invention. See id. col. 21 l. 38–col. 22 l. 49. 30 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. Table 12 provides information about the percentage of the remaining weight as follows: Id. col. 23 ll. 17–27. The district court found that the two different methods for evaluating “better drying time” do not provide consistent results at consistent times. J.A. 26. On the one hand, the in vivo test noted that after thirty minutes the compositions of the invention are “almost completely dry” while a “significant amount” of the prior art formulation remained. J.A. 24–27. But on the other hand, when the results of the in vitro test are reviewed at the thirty-minute mark, only two of the formulations exhibit “better drying time.” Id. As reflected in Table 12, at thirty minutes the prior art liquid comparative showed 95.6% of its weight remaining, whereas the “F971” inventive formulation showed 100% of its weight remaining. J.A. 25–26. After highlighting these inconsistencies, the district court noted that the prosecution history failed to inform as to the appropriate time frame under which to evaluate the drying rate. J.A. 27. The district court also found persuasive the testimony of Actavis’s expert that a POSITA would not know under what standard to evaluate the drying rate. Id. Accordingly, the district court concluded that the basic and HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 31 novel property of “better drying rate” was indefinite, and consequently, that the term “consisting essentially of” was likewise indefinite. Id. On appeal, Horizon argues that the district court improperly conflated “drying rate” with “better drying time.” According to Horizon, “drying rate” refers to “how quickly [a formulation] dries” while “drying time” refers to “how long [a formulation] takes to dry.” Appellant Br. 49. In light of this distinction, Horizon maintains that the specification’s descriptions of the results of the in vivo test and in vitro test are not in conflict. Horizon asserts that a POSITA would understand that the time points earlier than 4 hours in the in vitro test do not reflect drying time, and instead, they reflect drying rates that can change over time. Horizon argues that the district court failed to comprehend the differences between the two tests. In response, Actavis contends that the patent uses the concepts of “drying time” and “drying rate” interchangeably, with both terms apparently intended to refer to the residual weight of the formulation left as time progresses. But Horizon challenges that assertion, stating that the “specification differentiates these two concepts, referencing ‘drying time’ as a characteristic of the inventive formulations, and then separately discussing drying rate in relation to the speed (‘more rapid,’ ‘quicker,’ or ‘faster’) of drying.” Appellant Reply Br. 61. We find Horizon’s proposed distinction unpersuasive in light of the specification. Example 5, the in vitro test, compared “drying time” in relation to the residual weight of a given formulation. Its stated purpose was to “evaluate . . . drying time.” ’838 patent col. 21 l. 45. Throughout Example 5, the specification tethers a “dryness” evaluation to the residual weight of a formulation in order to show the improved characteristic over the prior art. See id. col. 22 ll. 7–10 (stating that “one would have expected the liquid formulation to lose weight 32 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. more quickly, and thus have a shorter drying time”). Beyond that, the basic point raised by the district court remains: the results are inconsistent. Referring to the results in Example 5, the specification states that “even within the first five minutes, the three gel formulations displayed more rapid drying than the liquid formulation.” Id. col. 21 ll. 63–65 (emphasis added). Regardless of the distinction Horizon attempts to draw, this statement stands for the proposition that, at the five-minute mark, the three inventive formulations are drier than the prior art formulation. So, it follows that according to the specification’s clear language, the inventive formulations displayed better drying time when compared at five minutes. But, as the district court pointed out, the data is inconsistent with the specification’s statement about better drying at five minutes (as stated in the in vitro test) or at thirty minutes (as compared to the in vivo test). At both of those marks, Table 12 reflects that inventive gel “F971” retained a larger percentage weight than the prior art. Only at the four-hour mark does the inventive gel “F971” reflect a lower percentage than the prior art comparator. “[A] claim is indefinite if its language might mean several different things and no informed and confident choice is available among the contending definitions.” Media Rights Techs., Inc. v. Capital One Fin. Corp., 800 F.3d 1366, 1371 (Fed. Cir. 2015) (internal quotations marks omitted). Here, an evaluation of the specification reveals inconsistencies about the basic and novel property of “better drying time.” Two tests are disclosed, but those tests do not provide consistent results upon which a POSITA would be able to evaluate “better drying time.” Consequently, we conclude that the district court did not err in its determination that a POSITA would not know under what standard to evaluate the drying rate of the invention, thus rendering the basic and novel property of “better drying rate” indefinite. HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC. 33 In sum, we hold that the district court did not err in: (a) defining the basic and novel properties of the formulation patents; (b) applying the Nautilus definiteness standard to the basic and novel properties of the formulation patents; and (c) concluding that the phrase “consisting essentially of” was indefinite based on its finding that the basic and novel property of “better drying time” was indefinite on this record. To be clear, we do not hold today that so long as there is any ambiguity in the patent’s description of the basic and novel properties of its invention, no matter how marginal, the phrase “consisting essentially of” would be considered indefinite. Nor are we requiring that the patent owner draft claims to an untenable level of specificity. We conclude only that, on these particular facts, the district court did not err in determining that the phrase “consisting essentially of” was indefinite in light of the indefinite scope of the invention’s basic and novel property of a “better drying time.” 8 8 The dissent states that “[i]t is hard to imagine a clearer statement than a list of the ingredients that the claimed formulation ‘consists essentially of.’” Dissent Op. at 5. It is not. A clearer statement would be a list of ingredients that the claimed formulation “consists of,” which, as we previously noted, is a “closed claim” confined to the listed ingredients or steps in a claim. PPG Indus., 156 F.3d at 1354. Here, the patentee, however, chose to use the distinct and separate phrase, “consisting essentially of.” In so choosing, the patentee can now assert its claim against products containing ingredients nowhere listed in the patent claim, an option foreclosed under the phrase “consisting of.” See, e.g., AK Steel, 344 F.3d at 1239 (“consisting 34 HZNP MEDICINES LLC v. ACTAVIS LABORATORIES UT, INC.