Court Opinion

ID: 2620291
Source: CourtListenerOpinion
Date Created: 2013-10-30 15:49:57.243667+00
Date Added: 2024-06-11T08:22:59.023031
License: Public Domain

NOTE: This disposition is nonprecedential.

United States Court of Appeals
    for the Federal Circuit
            ______________________

 ASTRAZENECA LP AND ASTRAZENECA AB,
          Plaintiffs-Appellants,

                       v.

             BREATH LIMITED,
              Defendant-Appellee,

                     AND

    APOTEX, INC. AND APOTEX CORP.,
       Defendants-Cross Appellants,

                     AND

               SANDOZ INC.,
              Defendant-Appellee,

                     AND

     WATSON LABORATORIES, INC.,
           Defendant-Appellee.
         ______________________

               2013-1312, -1352
            ______________________
2                        ASTRAZENECA LP   v. BREATH LIMITED

    Appeals from the United States District Court for the
District of New Jersey in No. 11-CV-3626, Judge Renee
Marie Bumb.
                ______________________

               Decided: October 30, 2013
                ______________________

     CHRISTOPHER N. SIPES, Covington & Burling LLP, of
Washington, DC, argued for plaintiffs-appellants. With
him on the brief were RODERICK R. MCKELVIE and ALI
MOJIBI.    Of counsel on the brief were JEFFREY M.
DAVIDSON and DANIELLE L. GOLDSTEIN, of San Francisco,
California. Of counsel were DANIELLE LUCE GOLDSTEIN,
Covington & Burling LLP, of San Francisco, California;
PABLO D. HENDLER and BRIAN KAO, Ropes & Gray, LLP,
of New York, New York; and RICHARD T. MCCAULLEY, JR.
and JON M. SPANBAUER, Ropes & Gray LLP, Chicago,
Illinois.

        RICHARD J. BASILE, St. Onge Steward Johnston &
Reens, LLC, of Stamford, Connecticut, argued for defend-
ants-cross appellants. With him on the brief were DAVID
W. ALDRICH, BENJAMIN J. LEHBERGER and ALYSON J.
DILENA.

    WILLIAM A. RAKOCZY, Rakoczy, Molino Massochi Siwik
LLP, of Chicago, Illinois, argued for all defendants-
appellees. With him on the brief was AMY D. BRODY for
defendants-appellees Watson Laboratories, Inc. and
Breath Limited. Of counsel on the brief were MEREDITH
MARTIN ADDY, TARAS A. GRACEY and MARK H. REMUS,
Steptoe & Johnson LLP, of Chicago, Illinois for defendant-
appellee Sandoz, Inc.
                 ______________________
ASTRAZENECA LP   v. BREATH LIMITED                         3

    Before RADER, Chief Judge, BRYSON, and LINN, Circuit
                         Judges.

LINN, Circuit Judge.

    AstraZeneca LP and AstraZeneca AB (“AstraZeneca”)
appeal the district court’s judgment following a bench
trial, holding that the asserted claims of AstraZeneca’s
U.S. Patent No. 7,524,834 (“’834 Patent”) were not in-
fringed and that the asserted claims of U.S. Patent No.
6,598,603 (“’603 Patent”) were invalid as anticipated and
obvious, thus ruling in favor of the defendants Breath
Limited (“Breath”); Apotex, Inc. and Apotex Corp. (“Apo-
tex”); Sandoz, Inc. (“Sandoz”); and Watson Laboratories,
Inc. (“Watson”) (collectively “Appellees”). Opinion, Astra-
Zeneca LP v. Breath Ltd., No. 08-1512, 2013 WL 1385224
(D.N.J. Apr. 3, 2013) (“Opinion”) amended, Opinion, No.
08-1512, 2013 WL 2404167 (D.N.J. May 31, 2013)
(“Amendment”). Apotex cross-appeals the district court’s
dismissal of its counterclaim of invalidity of certain claims
of the ’603 Patent, Amendment, and the district court’s
decisions to limit Apotex’s recovery with respect to the
bond amount, Trial Transcript, AstraZeneca LP v. Breath
Ltd., No. 08-1512 (D.N.J. Nov. 8, 2012), in J.A. 37304–16.
This court reverses and remands on the ’834 Patent based
on the district court’s incorrect claim construction. This
court affirms the district court with respect to the finding
of obviousness of the asserted claims of the ’603 Patent,
the dismissal of Apotex’s invalidity counterclaim as to
other claims, and the decisions regarding the bond
amount.
4                        ASTRAZENECA LP   v. BREATH LIMITED

                     I. BACKGROUND

                   A. The ’834 Patent

    The ’834 Patent covers a sterile, pharmaceutically ef-
fective budesonide product, which is used to treat asthma
in children. Claim 1 states:

        1. A pharmaceutically acceptable micronized
    powder composition at least 98.5% by weight of
    which is pure budesonide or an ester, acetal or
    salt thereof, wherein the composition meets the
    criteria of sterility according to the US Pharmaco-
    poeia [sic] 23/NF18, 1995, pages 1686-1690 and
    1963-1975.

’834 Patent col. 11 ll. 48–52 (emphasis added). Claim 50
is similar, but is directed to a suspension including a
powder:

    50. A pharmaceutically acceptable suspension
    consisting of a micronized powder composition at
    least 98.5% by weight of which is pure budesonide
    or an ester, acetal or salt thereof suspended in an
    aqueous solution, wherein the suspension meets
    the criteria of sterility according to the US Phar-
    macopoeia [sic] 23/NFl8, 1995, pages 1686-1690
    and 1963-1975.

Id. at col. 13 ll. 55–60 (emphasis added). Claims 2 and 51
depend from claims 1 and 50, respectively, and limit the
claimed drug to budesonide.

                   B. The ’603 Patent

    The ’603 Patent is directed to a once-daily treatment
of patients with budesonide administered by nebulizer.
Claim 1 is the only asserted independent claim at issue:
ASTRAZENECA LP   v. BREATH LIMITED                        5

   1. A method of treating a patient suffering from a
   respiratory disease, the method comprising ad-
   ministering to the patient a nebulized dose of a
   budesonide composition in a continuing regimen
   at a frequency of not more than once per day.

’603 Patent col. 10 ll. 18–22. Dependent claims 12, 14,
and 16 respectively limit the age range of the patient to
“one day to fifteen years old,” “one month to eight years
old,” and “six months to five years old.” Id. at col. 10 ll.
44–53. Dependent claims 13, 15 and 17 respectively limit
claims 12, 14, and 16 to budesonide compositions in which
budesonide is the only active ingredient. Id. at col. 10 ll.
46–55. Dependent claims 24–28 add limitations to claim
1 regarding the amount of budesonide in the budesonide
composition. See id. at col. 11 ll. 5 to col. 12 ll. 2.

   AstraZeneca markets its “once-daily nebulized
budesonide suspension used to treat asthma in children”
under the name Pulmicort Respules®. Opinion, at *1.

        C. The Parties and Previous Proceedings

    The Appellees are generic drug manufacturers who
have filed ANDAs seeking authorization to market gener-
ic versions of AstraZeneca’s Pulmicort Respules® drug.
AstraZeneca sued the Appellees for induced infringement,
and the Appellees counterclaimed seeking declaratory
judgments of invalidity and noninfringement.          With
respect to Apotex, AstraZeneca requested, and the district
court on May 22, 2009 granted, a preliminary injunction
predicated on the ’603 Patent, preventing the launch of
Apotex’s generic drug, subject to the posting of a bond by
AstraZeneca.

    During the bench trial, the district court considered a
motion by Apotex to increase the amount of bond associ-
ated with the preliminary injunction. The district court
6                         ASTRAZENECA LP   v. BREATH LIMITED

noted on November 8, 2012 that the bond had not been
modified since June 2, 2009 and that the parties, at the
time the bond amount originally was set, had assumed a
more rapid resolution of the case than actually occurred.
The district court then increased the bond amount to
cover future damages but refused to increase the bond
amount to cover past damages. The district court made
clear that the increased bond amount only applied to
damages going forward from September 1, 2012, the day
after Apotex filed its motion for increase.

    Following the bench trial, the district court found,
based on its construction of the term “micronized powder
composition,” that claims 50 and 51 of the ’834 Patent
were not infringed by Apotex and Sandoz, and that claims
1, 2, 50, and 51 of the ’834 Patent were not infringed by
Breath and Watson.

    The district court also found that Appellees’ labels in-
duce infringement of asserted claims 1–3, 7, 8, 12–17, and
24–28 of the ’603 Patent but that those claims were both
anticipated and obvious based on a number of references
and thus were invalid.

     The district court treated as conceded and, thus,
dismissed with prejudice AstraZeneca’s infringement
contentions with respect to claims 6, 11, 18, and 21–23
(“dismissed claims”) of the ’603 Patent because Astra-
Zeneca presented no evidence at trial that those claims
were infringed. Opinion at *4 n.11. The district court
then declined to exercise jurisdiction over Apotex’s inva-
lidity counterclaims directed to the dismissed claims and
dismissed them without prejudice, concluding that the
noninfringement judgment resolved the case and Apotex
showed no additional benefit to be gained from an invalid-
ity decision. Amendment, at *7.
ASTRAZENECA LP   v. BREATH LIMITED                        7

                      II. DISCUSSION

                  A. Standards of Review

    “We review claim construction de novo.” Thorner v.
Sony Computer Entm’t Am. LLC, 669 F.3d 1362, 1365
(Fed. Cir. 2012). “Obviousness is a question of law, re-
viewed de novo, based upon underlying factual questions
which are reviewed for clear error following a bench trial.”
Alza Corp. v. Mylan Labs., Inc., 464 F.3d 1286, 1289 (Fed.
Cir. 2006). “Under the clear error standard, a reversal is
permitted only when this court is left with a definite and
firm conviction that the district court was in error.” Id.
“Our review of a district court’s decision to decline juris-
diction [under the Declaratory Judgment Act] is reviewed
under a deferential abuse of discretion standard.” Sony
Elecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d
1271, 1288 (Fed. Cir. 2007).

    A bond amount is a procedural issue that is not
unique to patent law, and so the law of the regional
circuit applies. Int’l Game Tech. v. WMS Gaming, Inc.,
217 F.3d 850, 850 n.1 (Fed. Cir. 1999). The Third Circuit
treats as “a question of law whether a district court may
retroactively increase a bond amount . . .” subject to
“plenary review.” Sprint Commc’ns Co. L.P. v. CAT
Commc’ns Int’l, Inc., 335 F.3d 235, 239 (3d Cir. 2003).

            B. ’834 Patent Claim Construction

    The district court construed “micronized powder
composition” to mean “heat sterilized finely divided dry
particles.” After reviewing the patent’s specification and
prosecution history, expert testimony, and inventor
testimony, the district court further explained that “heat
sterilized” refers to “particles that have been sterilized
through a process, consistent with heat sterilization, that
allows them to essentially maintain the same pharmaco-
8                        ASTRAZENECA LP   v. BREATH LIMITED

logical activity, physico-chemical properties, chemical
purity, and physical form as the starting material.”
Opinion at *35–36.

    AstraZeneca argues that the district court erred by
importing limitations into the claims because the plain
meaning of “micronized powder composition” has nothing
to do with heat sterilization. For further support, Astra-
Zeneca points to the claim’s other language as well as
language in the patent’s other claims. The Appellees’
disagree, contending that the district court’s construction
is correct and that the plain language and claim differen-
tiation cannot control because the ’834 Patent so limited
the invention throughout the specification and prosecu-
tion history.

    The words of a claim are generally given their or-
    dinary and customary meaning as understood by
    a person of ordinary skill in the art when read in
    the context of the specification and prosecution
    history. There are only two exceptions to this
    general rule: 1) when a patentee sets out a defini-
    tion and acts as his own lexicographer, or 2) when
    the patentee disavows the full scope of a claim
    term either in the specification or during prosecu-
    tion.

Thorner, 669 F.3d at 1365 (citation omitted). “The stand-
ard for disavowal of claim scope is . . . exacting.” Id. at
1366. “The patentee may demonstrate intent to deviate
from the ordinary and accustomed meaning of a claim
term by including in the specification expressions of
manifest exclusion or restriction, representing a clear
disavowal of claim scope.” Id. at 1366 (internal quotation
marks omitted). “To constitute disclaimer, there must be
a clear and unmistakable disclaimer.” Id. at 1366–67.
“Mere criticism of a particular embodiment encompassed
in the plain meaning of a claim term is not sufficient to
ASTRAZENECA LP   v. BREATH LIMITED                       9

rise to the level of clear disavowal.” Id. at 1366. “It is
likewise not enough that the only embodiments, or all of
the embodiments, contain a particular limitation.” Id.

    With respect to the ordinary, plain meaning of the
term “micronized powder composition,” none of the three
words imposes, or even implies, any form of sterilization.
Indeed, Appellees do not argue to the contrary, arguing
instead that the court must look to other evidence to
understand that the term is limited to dry heat steriliza-
tion. Def.-Appellees’ Br. at 36; Apotex Br. at 42.

    Appellees also argue that AstraZeneca waived argu-
ment based on the term’s plain meaning because it was
not argued to the district court, id., but the issue of
whether the term “imputes” a sterilization process into
the claim clearly was raised to the district court. See
Opinion at *36 (“the Court notes that the parties have
disputed whether the term ‘heat sterilized’ imputes a
process limitation into the claims.”).

    Appellees argue that the term’s otherwise plain mean-
ing is limited to heat sterilization because of the patent
specification’s disavowal of any other type of sterilized
micronized powder compositions.         Appellees point to
statements within the patent that refer to “the invention”
as associated with the particular form of dry heat sterili-
zation described in the patent. They also note that the
only acceptable form of sterilization described in the ’834
Patent is heat sterilization. Lastly, they note that the
patent disparages several forms of prior art sterilization.
The flaw in this argument, however, is that the ’834
Patent’s specification discloses three separate concepts: a
process (“a process for sterilization of a powerdered [sic]
form of a glucocortico-steriod”), products (“sterile gluco-
corticosteroids” and “sterile formulations containing
glucocorticosteroids”), and methods of use (“use [of the
products] thereof in the treatment of an allergic and/or
10                         ASTRAZENECA LP   v. BREATH LIMITED

inflammatory condition on the nose or lungs”).           ’834
Patent col. 1 ll. 17–21.

    There is no dispute that the patent refers only to dry
heat sterilization as the preferred method of achieving the
claimed “micronized powder composition” and criticizes,
often sharply, other forms of sterilization. Nonetheless,
“[m]ere criticism of a particular embodiment encompassed
in the plain meaning of a claim term is not sufficient to
rise to the level of clear disavowal.” Thorner, 669 F.3d at
1366. “It is likewise not enough that the only embodi-
ments, or all of the embodiments, contain a particular
limitation.” Id. Moreover, statements with respect to
“the invention” are ambiguous at best, given the three
distinct types of inventions (processes, products, and
methods of use) described in the specification. “To consti-
tute disclaimer, there must be a clear and unmistakable
disclaimer.” Id. at 1366–67. At most, the specification is
confusing with respect to whether it limits only the dis-
closed process to a specific form of sterilization or both the
process and the disclosed product to a specific form of
sterilization. However, that confusion leaves available an
interpretation of the patent that the products, as opposed
to the processes, are not limited to any particular form of
sterilization.    Accordingly, we cannot conclude that
AstraZeneca disclaimed non-heat sterilized micronized
powder compositions based on the specification.

    Appellees’ argument with respect to the prosecution
history similarly is flawed. Critically, much of the prose-
cution history relied on by Appellees concerns two differ-
ent categories of claims: product claims (then-pending
claims 65–83) and product-by-process claims (then-
pending claims 84–157). For example, claim 65 recites a
“sterile” powder, while claim 84 recites a “sterilized”
powder. AstraZeneca explained that a powder can be
“sterile” without ever having been “sterilized,” but that a
“sterilized” powder must have undergone a sterilization
ASTRAZENECA LP   v. BREATH LIMITED                      11

process.     AstraZeneca further explained that claims
directed to “sterilized” powders were product-by-process
claims, rather than product claims. The asserted claims
at issue here do not recite a “sterilized” powder. Rather,
the claims recite a “micronized powder composition” that
“meets the criteria of sterility” according to the US Phar-
macopeia. See, e.g., ’834 Patent at Claim 1. Rather than
invoking the “sterilized” product-by-process limitations,
the asserted claims refer merely to a powder that is
sterile, irrespective of how that sterility was achieved.
Nothing in the prosecution history expresses an unmis-
takable disavowal of that scope.

    “Courts must generally take care to avoid reading
process limitations into an apparatus claim . . . because
the process by which a product is made is irrelevant to the
question of whether that product infringes a pure appa-
ratus claim . . . .” Baldwin Graphic Systems, Inc. v.
Siebert, Inc., 512 F.3d 1338, 1344 (Fed. Cir. 2008) (inter-
nal quotations omitted). In general, “[t]he method of
manufacture, even when cited as advantageous, does not
of itself convert product claims into claims limited to a
particular process. . . . A novel product that meets the
criteria of patentability is not limited to the process by
which it was made.” Vanguard Prods. Corp. v. Parker
Hannifin Corp., 234 F.3d 1370, 1372 (Fed. Cir. 2000).
AstraZeneca, during prosecution, was careful to specify
which claims were product-by-process claims, implicating
the method by which the product is made, and which
claims were not so limited.

    The prosecution history is replete with examples of
AstraZeneca noting that prior art sterilization methods
resulted in compounds with a different structure than
that claimed in the then-pending product-by-process
claims 84–157, but these arguments never were made
with respect to then-pending claims 65–83. It is true that
a patent applicant may disclaim products created by other
12                        ASTRAZENECA LP   v. BREATH LIMITED

processes during the prosecution history when the patent
applicant overcomes a rejection against product and
process claims by indicating that the process is necessary
to produce the claimed product and the patent applicant
does not limit the disclaimers to the process claims. See
Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1384–85 (Fed.
Cir. 2005). Here, however, we cannot conclude that this is
the case where arguments were directed specifically only
to the then-pending product-by-process claims 84–157.

    With respect to then-pending claims 65–83, Astra-
Zeneca’s arguments were limited to statements that it
would not have been obvious to achieve the claimed
powder (at the time of the invention) because of certain
flaws in the prior art sterilization techniques. This is
conceptually distinct from disavowing sterile powders
that could be produced by the prior art techniques.

     Appellees further direct the court to aspects of the
prosecution history discussing then-pending claims 3, 8,
10, 11, and 39, which specifically recite elements for
sterilization by heat treatment or require that a dry
powder be sterilized. Neither concept is present in the
asserted claims, which in contrast do not specifically
recite heat treatment and, though sterile, could either 1)
never have been sterilized (if synthesized as sterile in the
first instance, for example) or 2) have been sterilized and
then dried. With these distinctions between the then-
pending claims and the asserted claims, we cannot con-
clude that comments directed to the then-pending claims
disavow scope regarding the asserted claims.

    Concluding that the claim term’s plain meaning does
not impart sterilization to the composition and that
nothing contained in the specification or the prosecution
history limit the term to a specific type of sterilization or
disavow other types of sterilization, we need not reach
ASTRAZENECA LP   v. BREATH LIMITED                       13

AstraZeneca’s arguments concerning claim differentiation
and the other language in the claims.

     For the foregoing reasons, we hold that the district
court erred by adding the “heat sterilized” limitation into
the claims at issue. The term “micronized powder compo-
sition” is construed more accurately as “finely divided dry
particles.”

    Remand is necessary for all Appellees under the new
claim construction. Though Sandoz and Apotex contend
that remand is unnecessary under a new construction, the
court disagrees. While AtraZeneca does not appear to
dispute that the “micronized powder composition” must be
“dry,” remand still is necessary because asserted claim 50
does not claim, as Apotex contends, a sterile powder, but
rather claims a sterile suspension consisting of that
powder composition and an aqueous solution.

             C. ’603 Patent Claim Invalidity

    The district court found the asserted claims of
the ’603 Patent invalid as obvious and as anticipated. As
for obviousness, the district court concluded that the ’603
patent’s “essential teaching” is “once-daily dosing of
nebulized budesonide” and that a person of ordinary skill
in the art would have been motivated to arrive at this
“obvious conclusion.” Opinion at *19.

     The obviousness analysis involves four factual inquir-
ies: (1) “‘the scope and content of the prior art,’” (2) the
“‘differences between the prior art and the claims at
issue,’” (3) “‘the level of ordinary skill in the pertinent
art,’” and (4) “‘secondary considerations’” of nonobvious-
ness. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
(2007) (quoting Graham v. John Deere Co. of Kan. City,
383 U.S. 1, 17–18 (1966)). “One of the ways in which a
patent’s subject matter can be proved obvious is by noting
14                         ASTRAZENECA LP   v. BREATH LIMITED

that there existed at the time of invention a known prob-
lem for which there was an obvious solution encompassed
by the patent’s claims.” Id. at 419–20. “[I]n many cases a
person of ordinary skill will be able to fit the teachings of
multiple patents together like pieces of a puzzle.” Id. at
420. “A person of ordinary skill is also a person of ordi-
nary creativity, not an automaton.” Id. at 421.

     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 ordi-
     nary 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. In that instance the fact that a
     combination was obvious to try might show that it
     was obvious under § 103.

Id. at 421.

    The district court found that the prior art included
numerous studies, which “taught the safety and efficacy of
once-daily inhaled budesonide” (“once-daily studies”),
including once-daily treatment of children. Id. at *12.
Further, the district court found that practitioners were
taught to use a “stepwise” approach to dosing, wherein
the practitioner would attempt to titrate the drug dose
down to the lowest possible dose—a once-a-day dose. Id.
at *22. Relatedly, the district court concluded that it was
a known problem that the dosing frequency of young
children with asthma created “issues of compliance and
convenience.” Id. at *20–21. AstraZeneca notes that none
of the once-daily studies teaches use of a nebulizer to
administer the drug. Id. Instead, the once-daily studies
taught use of two other delivery devices: MDI and PDI.
MDI devices use a canister filled with the drug, which
when pressed by the user, propels the drug into a gaseous
ASTRAZENECA LP   v. BREATH LIMITED                        15

solution inhaled by the patient. Id. MDIs are difficult for
patients to use because proper inhalation of the gaseous
solution requires considerable coordination. Id. DPI
devices are similar, except that the user’s own inhalation
is used to propel the drug, which is a problem for small
children. Id. Nebulizers create, without any effort from
the patient, a fine mist of the drug. Id. The patient
merely breaths and inhales the mist. Nebulizers are
inefficient because much of the drug is lost to the air or
ingested by the patient. Id.

     The district court found that a publication by
Brattsand & Selroos teaches that budesonide can be
delivered via several different mechanisms, including
nebulization, and though mistaken as to the correct
mechanism, teaches that budesonide delivered to the
lungs exhibits a “depot effect” where the drug continues to
have an effect for a significant period after it is adminis-
tered. Id. at *13–15. According to the district court,
references such as Jackson and McCarthy further teach
that the delivery method of budesonide does not impact
its clinical effectiveness. Id. at *15–18. The district court
also observed that the prior art also teaches that nebuliz-
ers were the “most practical delivery device for certain
patients like young children.” Id. at *20. The district
court also made the following findings as to references by
Jackson, McCarthy, and Möller. Though not in connec-
tion with once-daily dosing, Jackson specifically teaches
use of nebulized budesonide on infants and children under
three-years old. Id.        McCarthy and Möller similarly
teach use of inhaled budesonide once daily in the treat-
ment of children of various age ranges, including 5 to 13,
7 to 13, as well as “small children” and “infants.” Id. at
26. We can find no clear error with respect to these
factual findings.

   With respect to the differences between the prior art
and the claimed invention, AstraZeneca contends that
16                       ASTRAZENECA LP   v. BREATH LIMITED

the ’603 Patent fills two gaps existing in the prior art,
neither of which would have been obvious: (1) use of a
once-daily nebulizer budesonide treatment and (2) a once-
daily treatment of children.

    The district court found that the once-daily studies
demonstrate the safety and efficacy generally of once-
daily inhaled budesonide. Opinion at *12, 15–16, 20. The
district court also found that though Brattsand & Selroos
incorrectly identify the location of the budesonide binding
site, and thus incorrectly describe the budesonide depot
mechanism, a person of ordinary skill in the art at the
time of the invention nonetheless would have expected
budesonide to exhibit the depot effect, which is an inher-
ent property of the drug regardless of how it is delivered
to the lung. Opinion at *15. This depot effect makes the
drug attractive to once-daily dosing. Further, the district
court found that Jackson and McCarthy teach that the
delivery method of the budesonide does not impact its
effectiveness. Opinion at *15–18. We agree with these
findings and see no clear error by the district court. We
also agree with the district court that the “compliance and
convenience” factors, as well as the recognized stepwise
approach to dosing suggest that once-daily dosing would
have been preferred, especially with respect to young
children.

    Moreover, the evidence established a reasonable ex-
pectation of success for once-daily treatment of children.
The district court found testimony of Appellees’ expert,
Dr. Barnes, credible with respect to the fact that “that a
person of ordinary skill in the art would not have any
concerns about using nebulized budesonide once daily in
children under the age of five, because the principles for
treating this patient group and for treating older children
and adults are the same.” Opinion at *26. We can find no
clear error in this finding, particularly in light of the
numerous studies—such as Jackson, Möller, and McCar-
ASTRAZENECA LP   v. BREATH LIMITED                       17

thy—each teaching treatment of children (from infants to
age 13) with inhaled budesonide. Id. 1

     Furthermore, the district court found, and the parties
agreed, that a known problem existed at the time of the
invention: “significant difficulty in the treatment of
young children, including infants, who suffer from respir-
atory disease.” Opinion at *12. Because children lack
coordination and the ability to take strong breaths, which
are required for MDI and PDI delivery but not for nebu-
lizers, nebulizers would have been an obvious way to
overcome the problem of finding an effective delivery
mechanism to treat young patients. Moreover, the dis-
trict court’s factual findings establish a reasonable expec-
tation of success for that treatment. The once-daily
studies demonstrated the effectiveness of once-daily
treatment with budesonide, including the treatment of
young children.         Use of nebulizers to administer
budesonide was known, and based on the teachings of
Jackson and McCarthy, those of skill in the art would not
have expected differences in the budesonide delivery
method to impact efficacy.

    With respect to secondary considerations, AstraZene-
ca first points to alleged industry skepticism, noting
inventor testimony that AstraZeneca did not believe once-
daily dosing would be effective, as evidenced by Astra-
Zeneca’s decision to add not one, but two clinical studies

   1    The rebuttal evidence cited by AstraZeneca mere-
ly established that for young children asthma is particu-
larly dangerous and difficult to diagnose. The evidence
does not show that a person of skill in the art would
believe that the principles making once-daily budesonide
treatment safe and effective for adults differ from those
for young children.
18                        ASTRAZENECA LP   v. BREATH LIMITED

with respect to once-daily dosing. In addition to a study
concerning twice-daily dosing, AstraZeneca added studies
for once-daily dosing and a study looking both at once-
daily and twice-daily dosing. The district court found,
and we agree, that this simply is evidence of corporate
prudence based on AstraZeneca’s own misgivings rather
than industry skepticism.

    AstraZeneca also argues long-felt, unmet need for
once-daily dosing of budesonide via a nebulizer, noting
that Pulmicort Respules® had been available for twice-
daily dosing since 1990, but the efficacy of once-daily
dosing of nebulized budesonide was not investigated prior
to 1997. See Opinion at *11–12. That fact, alone, is
inconclusive and insufficient in the circumstances of this
case to support the argument of non-obviousness.

    This court identifies no clear error in any underlying
factual determinations of the district court, and finds that
those facts establish by clear and convincing evidence that
the asserted claims of the ’603 Patent are obvious. This
court, therefore, affirms the district court’s obviousness
finding. Given this court’s conclusion on obviousness, we
need not reach the issue of anticipation.

                D. The Dismissed Claims

    Apotex appeals the district court’s decision to decline
jurisdiction over Apotex’s invalidity counterclaim with
respect to the dismissed claims. AstraZeneca abandoned
these claims at trial, and following trial the district court
dismissed them with prejudice, “effectively represent[ing]
a final judgment of non-infringement in favor of all of the
defendants.” Amendment at *6 (emphasis in the original).
The district court then declined to exercise its jurisdiction
over Apotex’s declaratory judgment counterclaim of
invalidity with respect to those claims. Apotex contends
that in so doing, the district court abused its discretion
ASTRAZENECA LP   v. BREATH LIMITED                       19

because that discretion is not absolute, arguing that there
must be reasons for declining jurisdiction.

    “If a district court’s decision is consistent with the
purposes of the Declaratory Judgment Act and considera-
tions of wise judicial administration, it may exercise its
discretion to dismiss (or stay) the case.” Sony, 497 F.3d at
1288. On the other hand,

   [t]here must be well-founded reasons for declining
   to entertain a declaratory judgment action. Ab-
   sent such reasons, precedent establishes that
   when there has been a direct charge of infringe-
   ment by the patentee, and an actual controversy
   exists due to ongoing activity that has been ac-
   cused of infringement, the accused infringer has
   the right to resolve the dispute.

Capo, Inc. v. Dioptics Med. Prods., Inc., 387 F.3d 1352,
1355 (Fed. Cir. 2004) (citation omitted).

     Apotex argues that it should not be deprived of a final
resolution as to all claims for which AstraZeneca asserted
infringement, and that AstraZeneca’s failure to submit
proof of infringement should not foreclose Apotex from
challenging validity. Apotex notes that the counterclaim
was fully tried, that the district court already performed
an analysis, and that the district court declared narrower
claims than the dismissed claims invalid. Nonetheless,
this court has indicated that a district court can dismiss
an invalidity counterclaim when it finds noninfringement
or dismisses an infringement claim with prejudice. See
Liquid Dynamics Corp. v. Vaughan Co., Inc., 355 F.3d
1361, 1371 (Fed. Cir. 2004) (“A district court judge faced
with an invalidity counterclaim challenging a patent that
it concludes was not infringed may either hear the claim
or dismiss it without prejudice, subject to review only for
abuse of discretion.”); Nystrom v. TREX Co., Inc., 339 F.3d
20                       ASTRAZENECA LP   v. BREATH LIMITED

1347, 1351 & n.* (Fed. Cir. 2003) (“[T]he district court
could have dismissed the counterclaim without prejudice
(either with or without a finding that the counterclaim
was moot) following the grant of summary judgment of
non-infringement.”); Phonometrics, Inc. v. N. Telecom Inc.,
133 F.3d 1459, 1468 (Fed. Cir. 1998) (“We have previously
held that a district court has discretion to dismiss a
counterclaim alleging that a patent is invalid as moot
where it finds no infringement.”).

    The decision whether to accept jurisdiction of a De-
claratory Judgment counterclaim is quintessentially left
to the discretion of the district court. Here, the district
court stated that “the non-infringement judgment firmly
and clearly resolves the case, and Apotex has not shown
how a judgment of invalidity would provide any addition-
al benefit.” Amendment at *7. Consistent with this
court’s precedent, this is a sufficient reason to decline
jurisdiction. Apotex raises an argument in its briefing
with respect to how a judgment of invalidity might pro-
vide an additional benefit to it over and above the non-
infringement judgment. However, AstraZeneca contends,
and Apotex does not dispute, that this argument was not
raised to the district court. Accordingly, we will not
consider it here. See Golden Bridge Tech., Inc. v. Nokia,
Inc., 527 F.3d 1318, 1323 (Fed. Cir. 2008) (declining to
consider a new argument the party could have raised
before the district court).

    We decline to say that the district court abused its
discretion in dismissing without prejudice Apotex’s inva-
ASTRAZENECA LP   v. BREATH LIMITED                        21

lidity counterclaims as to claims 6, 11, 18, and 21–23 of
the ’603 Patent. 2

                     E. Bond Amount

     Apotex contends that the amount of the bond required
when the preliminary injunction was granted is no longer
sufficient, given the greater than anticipated time that
transpired between the date of the injunction and trial.
The district court issued the preliminary injunction on
May 22, 2009 against Apotex predicated on the ’603
patent. More than three years later, on August 31, 2012,
Apotex filed a motion to increase the amount of bond
posted by AstraZeneca. Apotex sought an increase in the
amount of the bond both going forward and to cover the
period between issuance and the time the motion was
filed. The district court granted the motion with respect
to the amount going forward but denied it with respect to
the amount before the motion was filed. Apotex contends
that this is reversible error.

   Apotex concedes that, in the Third Circuit, there is a
general prohibition on retroactive increases in the bond

    2   Notwithstanding the fact that this court concludes
that the district court did not abuse its discretion in
declining jurisdiction, this court observes that broader
claims are necessarily invalid where narrower claims
have been found to be obvious. See Ormco Corp. v. Align
Tech., Inc., 498 F.3d 1307, 1319 (Fed. Cir. 2007) (“Because
claims 10 and 17 were found to have been obvious, the
broader claims 1 and 11 must also have been obvious.”).
Here, it is self-evident that each of the dismissed claims is
broader than a claim the district court has already invali-
dated. Compare ’603 Patent claims 6 to 7, 11 to 8, 18 and
22 to 24, and 21 and 23 to 25.
22                        ASTRAZENECA LP   v. BREATH LIMITED

amount, see Sprint Commc’n Co. v. Cat Commc’n Int’l, 335
F.3d 235, 240–42 (3d Cir. 2003), but argues that this
prohibition applies only after an injunction has been
dissolved. The parties do not cite a Third Circuit decision
directly addressing the present issue of whether a bond
may be retroactively increased when it is still in effect.
“Where the regional circuit court has not spoken, we need
to predict how that regional circuit would have decided
the issue in light of the decisions of that circuit’s various
district courts, public policy, etc.” Panduit Corp. v. All
States Plastic Mfg. Co., Inc., 744 F.2d 1564, 1575 (Fed.
Cir. 1984) disapproved of on other grounds by Richardson-
Merrell, Inc. v. Koller, 472 U.S. 424 (1985).

    Apotex does direct this court’s attention to Daiichi
Pharma. Co., Ltd. v. Apotex, Inc., Civ. No. 03-937(WGB)
(D.N.J. June 7, 2006), an unpublished decision in which a
district court, during the pendency of a preliminary
injunction, appears to have agreed to increase a bond
amount to cover higher-than-expected losses by the ac-
cused infringer. The amount of the bond increase appears
to apply to the period that already had passed. The
district court in that case concluded that Sprint was
distinguishable because, as argued by Apotex, the accused
infringer had an opportunity to decide whether to accept
the injunction, at least going forward. Daiichi, however,
is a singular district court case, and the reasoning in
Sprint and public policy caution against following it.

    Based on Sprint, this court believes that the Third
Circuit would consider improper an increase to cover past
damages even in the present circumstances. “[T]he bond
generally limits the liability of the applicant and informs
the applicant of the price it can expect to pay if the in-
junction was wrongfully issued.” Sprint, 335 F.3d at 240
(internal quotation marks and alteration marks omitted).
ASTRAZENECA LP   v. BREATH LIMITED                         23

    When a court grants an applicant’s request for a
    preliminary injunction, it will generally condition
    this grant on the applicant’s posting a bond. The
    applicant then decides whether to accept the pre-
    liminary relief by posting the bond or to withdraw
    its request. The applicant may base its decision
    on whether it wants to expose itself to liability up
    to the bond amount.

Id. at 240. “If a retroactive increase is permissible, the
injunction bond is no longer cabined; the bond no longer
fixes exposure nor caps liability. A retroactive increase
subjects the successful applicant to an unexpected and
unanticipated liability.” Id. at 241.

     Apotex argues that when, as here, the injunction is
still in effect, the applicant for an injunction has notice
and the opportunity to decline the additional bond
amount or decline the continuation of the injunction.
However, the Third Circuit focused in Sprint on the
function of the bond in informing the applicant of its
liability. AstraZeneca expected that its liability would be
limited to the bond amount before Apotex’s motion.
AstraZeneca cannot be fairly informed after it obtained
the benefit of the injunction that it must later pay more
for the benefit it already obtained in order to obtain the
benefit of a continued injunction. The bond would no
longer serve to cabin or fix liability, and that would result
in an unexpected liability, which Sprint sought to prohib-
it. It is immaterial whether the injunction has been
dissolved, as in Sprint, or continues, as it does here.
Either way: the party securing the injunction decided to
accept the preliminary relief by posting the bond required
at the time. Later requiring that party to post a higher
bond for a period that already has passed results in a
situation where that bond no longer fixes exposure or caps
liability. The party no longer simply could withdraw its
24                         ASTRAZENECA LP   v. BREATH LIMITED

request for an injunction over that period because that
period already would have passed.

    Apotex also argues that an exception to Sprint’s gen-
eral prohibition on retroactive increases exists where the
injunction holder always will choose to accept the injunc-
tion and pay a bond based on the accused infringer’s
damages. Apotex contends that here, because of the price
structure of the drugs at issue, AstraZeneca always would
stand to benefit from the injunction because its profits (in
a market from which Apotex is excluded) will always
exceed the damages to Apotex caused by a wrongful
injunction. At the district court, Apotex did not raise this
argument but instead argued that AstraZeneca would not
be prejudiced by an increase to the bond because of its
large profits. Because the argument was not raised at the
district court, we decline to address it in the first in-
stance. Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d
1420, 1426 (Fed. Cir. 1997) (“[A]ppellate courts do not
consider a party’s new theories, lodged first on ap-
peal . . . . In short, this court does not ‘review’ that which
was not presented to the district court.”).

    Apotex also argues that it should be able to seek dam-
ages from AstraZeneca in excess of the bond amount
because it would be inequitable to limit Apotex’s recovery
to that amount. Apotex points out that the Third Circuit
has recognized that there are “rare exceptions” to the rule
that “a defendant wrongfully enjoined has recourse only
against the bond.” Instant Air Freight Co. v. C.F. Air
Freight, Inc., 882 F.2d 797, 804 (3d Cir. 1989). However,
Apotex does not argue that it fits into an exception previ-
ously recognized by the Third Circuit. Apotex cites only a
case involving a finding of fraud. See Hartford-Empire
Co. v. Shawkee Mfg. Co., 163 F.2d 474, 477 (3d Cir. 1947).

   Rather than alleging fraud, Apotex instead merely ar-
gues that it would be unjust to limit its recovery to the
ASTRAZENECA LP   v. BREATH LIMITED                        25

bond because it will have suffered significantly more
damages. However, Apotex identifies no circumstances
that could have impeded it from moving well before
August 31, 2012 to increase the amount of the bond.
Though it appears undisputed that the trial occurred
approximately two years after the parties anticipated it
would occur, Apotex certainly was aware of the delay as it
was happening. If this situation were considered an
exception, the exception would swallow the rule. Any
party that delays moving to increase a bond amount could
move years later to recover damages in excess of the bond,
defeating the intended purpose of the bond in the first
instance. We decline to hold that the Third Circuit would
invite such a result.

    Lastly, Apotex argues that it should be able to use
damages incurred from the earlier time period (i.e., dam-
ages from the time between May 22, 2009 and August 31,
2012) to prove up the additional bond amount that Astra-
Zeneca posted in response to Apotex’s August 31, 2012
motion. This is essentially the same issue discussed
above in connection with Sprint. AstraZeneca agreed to
post the original bond amount, understanding that—
absent “rare exceptions”—its liability during that time
period would be limited to that amount. Allowing Apotex
to use damages incurred during an earlier period to prove
up to the bond amount in a later period still violates
Sprint’s general prohibition against retroactive increases.

    Accordingly, this court affirms the district court’s con-
clusion on the bond amount.

                     III. CONCLUSION

     For the forgoing reasons, this court affirms the dis-
trict court’s finding of obviousness for certain claims of
the ’603 Patent, dismissal of Apotex’s invalidity counter-
claims as to the dismissed claims, and decisions with
26                        ASTRAZENECA LP    v. BREATH LIMITED

respect to the bond amount. This court, however, reverses
the district court’s noninfringement finding on the ’834
Patent and remands for further proceedings.

 AFFIRMED-IN-PART, REVERSED-IN-PART, AND
               REMANDED

                         IV. COSTS

     Each party shall bear its own costs.