Court Opinion

ID: 8205664
Source: CourtListenerOpinion
Date Created: 2022-09-12 15:01:49.321087+00
Date Added: 2024-06-11T16:41:10.082637
License: Public Domain

Case: 21-2342    Document: 47     Page: 1   Filed: 08/18/2022

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

   PAR PHARMACEUTICAL, INC., PAR STERILE
  PRODUCTS, LLC, ENDO PAR INNOVATION COM-
                  PANY, LLC,
              Plaintiffs-Appellants

                             v.

         EAGLE PHARMACEUTICALS, INC.,
                Defendant-Appellee
              ______________________

                        2021-2342
                  ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:18-cv-00823-CFC-JLH, Chief
 Judge Colm F. Connolly.
                  ______________________

                 Decided: August 18, 2022
                  ______________________

     MARTIN JAY BLACK, Dechert LLP, Philadelphia, PA, ar-
 gued for plaintiffs-appellants. Also represented by SHARON
 K. GAGLIARDI, BRIAN GOLDBERG, LUKE M. REILLY, ROBERT
 RHOAD, DANIEL ROBERTS; JONATHAN LOEB, Mountain View,
 CA.

    JOHN C. O'QUINN, Kirkland & Ellis LLP, Washington,
 DC, argued for defendant-appellee. Also represented by
 WILLIAM H. BURGESS; BRYAN SCOTT HALES, Chicago, IL;
 BENJAMIN ADAM LASKY, JEANNA WACKER, New York, NY.
Case: 21-2342    Document: 47      Page: 2    Filed: 08/18/2022

 2 PAR PHARMACEUTICAL, INC. v. EAGLE PHARMACEUTICALS, INC.

                  ______________________

  Before MOORE, Chief Judge, PROST and HUGHES, Circuit
                        Judges.
 MOORE, Chief Judge.
     Par Pharmaceutical, Inc., Par Sterile Products, LLC,
 and Endo Par Innovation Company, LLC (collectively, Par)
 appeal a District of Delaware decision finding that Eagle
 Pharmaceuticals, Inc.’s abbreviated new drug application
 (ANDA) does not infringe any claim of U.S. Patent Nos.
 9,744,209 and 9,750,785 under 35 U.S.C. § 271(e)(2). Par
 also appeals the district court’s denial of declaratory judg-
 ment that Eagle’s planned sale of a product produced in
 accordance with its ANDA would infringe under 35 U.S.C.
 § 271(a) and (b). For the following reasons, we affirm.
                        BACKGROUND
      Par manufactures and sells Vasostrict®, a vasopressin
 injection product used to treat patients with critically low
 blood pressure. The FDA approved the Vasostrict® new
 drug application in April 2014, and Par began selling
 Vasostrict® in November 2014. Par Pharm., Inc. v. Eagle
 Pharms. Inc., No. 18-0823, 2021 WL 3886418, at *2, ¶2 (D.
 Del. Aug. 31, 2021) (Decision). Following FDA approval,
 Vasostrict® was added to the Orange Book, which identi-
 fied the ’785 and ’209 patents, each of which is owned by
 Par, as encompassing Vasostrict®. Id. The ’785 patent is
 directed to vasopressin compositions, while the ’209 patent
 is directed to methods of increasing blood pressure using
 those compositions. The claims of both patents require the
 vasopressin composition to have a rounded pH between
 3.7–3.9, i.e., a pH between 3.65–3.94 before rounding. See
 ’785 patent, claim 1; ’209 patent, claim 1; Decision, at *3,
 ¶ 8.
     In 2018, Eagle filed an ANDA to manufacture and sell
 a generic version of Vasostrict® before the ’209 and ’785
Case: 21-2342     Document: 47     Page: 3    Filed: 08/18/2022

 PAR PHARMACEUTICAL, INC.   v. EAGLE PHARMACEUTICALS, INC. 3

 patents expired. Decision, at *4, ¶ 9. Eagle’s ANDA spec-
 ified the acceptable pH range of Eagle’s proposed product
 during different stages of manufacture and the product’s
 shelf life. Id. at ¶ 12. In particular, Eagle represented in
 its release specification, which defines the properties of the
 product when it is released for distribution, that the pH
 range would be between 3.4–3.6, i.e., 3.35–3.64 before
 rounding. Id.; J.A. 2927. Likewise, in its stability specifi-
 cation, which defines the product’s properties during its
 shelf life, Eagle represented the pH would stay between
 3.4–3.6 (after rounding). Decision, at *4, ¶ 9; J.A. 2926–27,
 2955.
      Eagle’s ANDA also contained a certification under 35
 U.S.C. § 355(j)(2)(A)(vii)(IV) that the ’785 and ’209 patents
 are invalid or will not be infringed by Eagle’s proposed
 product. Decision, at *4, ¶ 11. In response, Par sued Eagle
 in the District of Delaware for infringement of the ’209 and
 ’785 patents under 35 U.S.C. § 271(e)(2). In addition, Par
 sought a declaratory judgment that Eagle’s product would
 infringe under 35 U.S.C. § 271(a) and (b). Before the dis-
 trict court, Eagle stipulated that its proposed product
 would meet all asserted claim limitations except the
 claimed pH range of 3.7–3.9. Decision, at *9.
     While conceding that the nominal pH range of Eagle’s
 proposed product does not overlap with the pH range
 claimed in the ’209 and ’785 patents, Par argued that two
 “undisputed facts compel a finding of infringement.” Deci-
 sion, at *9. First, it contended “real-world” evidence shows
 the pH of Eagle’s product drifts up over time. Id. Second,
 it observed that Eagle had sought authority to release
 products into the marketplace with a pH of 3.64, just 0.01
 beneath the infringing range. Id. According to Par, these
 facts taken together compelled a finding that Eagle’s pro-
 posed product would more likely than not infringe since a
 product released at a pH of 3.64 would inevitably drift into
 Par’s claimed range. Id.
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 4 PAR PHARMACEUTICAL, INC. v. EAGLE PHARMACEUTICALS, INC.

      The district court disagreed. After a three-day bench
 trial, it found these facts “neither undisputed nor correct.”
 Id. Specifically, it found the minor fluctuations in pH value
 identified by Par did not reveal any discernible trend, let
 alone “a steady and inevitable” upward drift. Id. at *7. Re-
 garding the second alleged fact, the court found that while
 the release specification alone required a pH range between
 3.4–3.6 (i.e., up to 3.64 before rounding) only at the time of
 distribution, the stability specification imposed an addi-
 tional constraint that Eagle’s proposed product maintain a
 pH between 3.4–3.6 from the time of its distribution
 through the entirety of its shelf life. Id. at *9. Accordingly,
 the district court found that Par had not established in-
 fringement under § 271(e). Id. at *10–11. Because the dis-
 trict court found Par had not established Eagle’s product
 would infringe, it also denied Par’s request for declaratory
 judgment under § 271(a) and (b). Id. at 11 n.3. Par ap-
 peals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
                          DISCUSSION
      Par challenges the district court’s findings as to in-
 fringement under § 271(e)(2) and § 271(a) and (b). As to
 § 271(e)(2), Par alleges the district court’s finding is clearly
 erroneous because “actual, real-world evidence” shows that
 the pH of products released at the upper end of the pH
 range identified in Eagle’s release specification will inevi-
 tably drift up into infringing territory. As to § 271(a) and
 (b), Par argues the same evidence establishes that a prod-
 uct manufactured and sold in accordance with Eagle’s
 ANDA would infringe, and that Par is therefore entitled to
 declaratory judgment. We do not agree.
                                I
     We review a district court’s conclusions of law de novo
 and its factual findings for clear error. Allergan, Inc. v.
 Sandoz Inc., 796 F.3d 1293, 1303 (Fed. Cir. 2015). Under
 the clear-error standard, we defer to the district court’s
 findings “in the absence of a definite and firm conviction
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 PAR PHARMACEUTICAL, INC.   v. EAGLE PHARMACEUTICALS, INC. 5

 that a mistake has been made.” Scanner Techs. Corp. v.
 ICOS Vision Sys. Corp. N.V., 528 F.3d 1365, 1374 (Fed. Cir.
 2008) (cleaned up). Infringement is a question of fact that,
 after a bench trial, we review for clear error. Alzo Corp. v.
 Mylan Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006).
     Under § 271(e)(2), it is an act of infringement to submit
 an ANDA seeking FDA approval to make and sell a pa-
 tented drug. 35 U.S.C. § 271(e)(2); Warner-Lambert Co. v.
 Apotex Corp., 316 F.3d 1348, 1358 (Fed. Cir. 2003). Be-
 cause the characteristics of a proposed ANDA product may
 not be established until the ANDA is approved, to deter-
 mine infringement under § 271(e)(2), courts must conduct
 an inquiry to determine whether the probable ANDA prod-
 uct would infringe once it is made, used, or sold. Glaxo,
 Inc. v. Novopharm, Ltd., 110 F.3d 1562, 1569 (Fed. Cir.
 1997). This inquiry is controlled by the ANDA specification
 itself. Because “drug manufactures are bound by strict
 statutory provisions to sell only those products that com-
 port with the ANDA[],” if the ANDA “defin[es] a proposed
 generic drug in a manner that directly addresses the issue
 of infringement, [it] control[s] the infringement inquiry.”
 Abbott Labs. v. TorPharm, Inc., 300 F.3d 1367, 1373 (Fed.
 Cir. 2002). The ANDA “directly resolves the infringement
 question” if “it defines a proposed generic product in a man-
 ner that either meets the limitations of an asserted patent
 claim or is outside the scope of such a claim.” Ferring B.V.
 v. Watson Labs., Inc.-Fla., 764 F.3d 1401, 1409–10 (Fed.
 Cir. 2014). If the ANDA specification does not speak
 clearly and directly to the question of infringement, courts
 may look to other relevant evidence, such as data or sam-
 ples the ANDA filer has submitted to the FDA, to assess
 whether a proposed product will infringe. Id. at 1409;
 Glaxo, 110 F.3d at 1568.
      Here, the inquiry begins and ends with Eagle’s ANDA
 specification. Both the release and stability specification
 directly and unambiguously address the pH range of Ea-
 gle’s proposed product and thus speak directly to
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 6 PAR PHARMACEUTICAL, INC. v. EAGLE PHARMACEUTICALS, INC.

 infringement. Together, these specifications restrict the
 pH of the proposed product to a pH range between 3.4–3.6
 at release and throughout the products’ shelf life—outside
 the infringing range. J.A. 2927. Indeed, Par concedes that
 the range listed in Eagle’s release and stability specifica-
 tions does not overlap with its claimed range. Oral Arg. at
 0:37–1:04. 1 Par attempts to avoid the implications of this
 concession by effectively ignoring the role of the stability
 specification in the § 271(e)(2) analysis, arguing that be-
 cause the FDA cannot ensure that every product Eagle
 sells will comply with the stability specification it is irrele-
 vant. Appellant’s Br. at 45–48. Yet Par cites no evidence
 that Eagle would not comply with its stability specification.
 And Eagle acknowledges it is bound by its representations
 to the FDA and that its ANDA product must therefore have
 a pH between 3.4–3.6 throughout its shelf life, not just at
 release. Oral Arg. at 15:35–59, 21:53–23:42. Par’s unsup-
 ported conjecture that Eagle will not abide by its represen-
 tations is inadequate to establish infringement. See In re
 Brimonidine Patent Litig., 643 F.3d 1366, 1378 (Fed. Cir.
 2011) (“We cannot assume that [an ANDA filer] will not act
 in full compliance with its representations to the FDA.”).
 The district court did not clearly err in finding that Eagle’s
 ANDA defines a product outside the scope of Par’s claims.
 Accordingly, we affirm its finding of no infringement under
 § 271(e)(2).
                                II
     To facilitate certainty of obligations and efficient reso-
 lutions of potential disputes, a patentee may seek a declar-
 atory judgment that a person will infringe in the future.
 Glaxo, 110 F.3d at 1570. To establish entitlement to de-
 claratory relief, the patentee must show: (1) the alleged fu-
 ture infringer is engaged in activity directed toward an

     1   Available at https://oralarguments.cafc.uscourts.
 gov/default.aspx?fl=21-2342_07072022.mp3.
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 PAR PHARMACEUTICAL, INC.   v. EAGLE PHARMACEUTICALS, INC. 7

 infringing activity or is making meaningful preparation for
 such activity; and (2) has indicated a refusal to change its
 course of action in the face of acts by the patentee sufficient
 to create reasonable apprehension that a suit is forthcom-
 ing. Id. at 1571. We review a district court’s decision to
 grant or deny declaratory relief for abuse of discretion. Id.
 at 1570; Minn. Min. and Mfg. Co. v. Norton Co., 929 F.2d
 670, 672–73 (Fed. Cir. 1991). Under an abuse-of-discretion
 standard, we review the district court’s factual findings for
 clear error. Minn. Min, 929 F.2d at 673.
     The district court denied Par’s request for declaratory
 judgment under § 271(a) and (b) because Par failed to es-
 tablish by a preponderance of the evidence that Eagle’s
 product would infringe, and that Eagle was therefore not
 engaged in an activity directed toward an infringing activ-
 ity. Decision, at *11 n.3. It based that conclusion on its
 § 271(e)(2) analysis of the ANDA specification and the post-
 release pH data Par alleged to show an upward drift. Par
 argues the district court erred by finding no discernable
 upward drift in pH and rejecting the relevance of even mi-
 nor pH fluctuations. Appellant’s Br. at 35–38. We do not
 agree.
     The district court’s finding that there was no upward
 pH drift in Eagle’s post-release pH data was not clear error.
 The court thoroughly considered the post-release pH data
 Par cites, along with Eagle’s expert testimony assessing
 that data, and found that, while the pH measurements
 fluctuated over time, there was no discernable trend—and
 certainly not an inevitable upward trend—in the fluctua-
 tions. Id. at *7, ¶ 29. Contrary to Par’s assertions, Eagle’s
 expert does not concede a clear upward pH drift. Eagle’s
 expert testified only that there were fluctuations—both up-
 ward and downward—in the pH, which is entirely con-
 sistent with the district court's finding. J.A. 15450:7–
 61:25. We see no clear error in this finding.
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 8 PAR PHARMACEUTICAL, INC. v. EAGLE PHARMACEUTICALS, INC.

     Par further alleges that the district court erroneously
 focused on pH measurements of products made according
 to Eagle’s optimized manufacturing processes (post-optimi-
 zation data), which reduced the magnitude of pH fluctua-
 tions in Eagle’s products. Appellant’s Br. at 37–38 (citing
 Decision, at *7, ¶ 29). Par does not contest that products
 manufactured using the optimized process did not drift into
 the infringing range. Instead, it asserts the post-optimiza-
 tion data is less probative than the evidence of pH fluctua-
 tions in pre-optimized products because there was less
 testing on the post-optimization products. Par is simply
 challenging the district court’s weighing of the evidence.
 Absent a clear conviction the district court erred, it is not
 our role to set aside the district court’s factual findings.
 Teva Pharms. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335,
 1339 (Fed. Cir. 2015). The district court’s reliance on post-
 optimization data was not clear error.
      Par also argues the district court overlooked the evi-
 dence of pH fluctuations because it ignored Eagle’s release
 specification. Appellant’s Br. at 37–38. According to Par,
 if the district court had not ignored the release specifica-
 tion, it would have found that if Eagle released a product
 at pH 3.64, any minor upward pH fluctuation would result
 in infringement. Par continues to erroneously view the re-
 lease specification in isolation. Eagle’s ANDA is not con-
 strained by its release specification only—it is also limited
 by the stability specification and the manufacturing pro-
 cess. Oral Arg. at 15:35–59, 27:30–50. As noted above, Ea-
 gle is bound by its representations to the FDA that it will
 manufacture its products in accordance with the optimized
 process and that the pH of its products will remain between
 3.4–3.6.
      The district court did not clearly err in finding that Par
 failed to establish that Eagle was engaged in, or making
 meaningful preparation for, infringing activity. As there is
 no clear error in the district court’s findings, the district
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 PAR PHARMACEUTICAL, INC.   v. EAGLE PHARMACEUTICALS, INC. 9

 court did not abuse its discretion in denying Par’s request
 for declaratory relief.
                         CONCLUSION
     Because we conclude that Eagle’s ANDA specification
 controls and defines a non-infringing product under
 § 271(e)(2), and that the district court did not abuse its dis-
 cretion in denying Par’s request for declaratory judgment
 under § 271(a) and (b), we affirm.
                         AFFIRMED
                             COSTS
 Costs to Eagle.