Court Opinion

ID: 4678831
Source: CourtListenerOpinion
Date Created: 2021-04-20 15:00:59.985472+00
Date Added: 2024-06-11T08:03:46.944662
License: Public Domain

Case: 18-1036     Document: 96           Page: 1       Filed: 04/20/2021

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                   ______________________

        IN RE: SEBELA PATENT LITIGATION

            -------------------------------------------------

             SEBELA IRELAND LIMITED,
                 Plaintiff-Appellant

                                   v.

    PRINSTON PHARMACEUTICAL INC., SOLCO
     HEALTHCARE U.S., LLC, HUAHAI US INC.,
              Defendants-Appellees

   ACTAVIS LABORATORIES FL, INC., ACTAVIS
 PHARMA, INC., ANDRX CORP., N/K/A ANDRX LLC,
                ACTAVIS, INC.,
                   Defendants
             ______________________

                         2018-1036
                   ______________________

     Appeal from the United States District Court for the
 District of New Jersey in Nos. 2:14-cv-06414-CCC-MF,
 2:14-cv-07400-CCC-MF, 2:15-cv-05308-CCC-JBC, 2:15-cv-
 06225-CCC-JBC, Judge Claire C. Cecchi.
                 ______________________

                   Decided: April 20, 2021
                   ______________________
Case: 18-1036    Document: 96      Page: 2    Filed: 04/20/2021

 2              SEBELA IRELAND   v. PRINSTON PHARMACEUTICAL

     MARK CHRISTOPHER FLEMING, Wilmer Cutler Pickering
 Hale and Dorr LLP, Boston, MA, argued for plaintiff-appel-
 lant. Also represented by CHRISTINE DUH, Palo Alto, CA;
 JAYITA GUHANIYOGI, Foley & Lardner LLP, New York, NY;
 RYAN SCHMID, Washington, DC; RAMY HANNA, STEVEN J.
 RIZZI, King & Spalding LLP, New York, NY.

     SCOTT A. CUNNING, II, Parker Poe Adams & Bernstein,
 LLP, Washington, DC, argued for defendants-appellees.
 Also represented by ELIZABETH CROMPTON; KYLE
 MUSGROVE, Charlotte, NC.
                 ______________________

     Before TARANTO, CHEN, and STOLL, Circuit Judges.
 CHEN, Circuit Judge.
     This appeal arises from several patent infringement
 actions filed by Sebela 1 in the United States District Court
 for the District of New Jersey against Prinston 2 and Ac-
 tavis. 3 Sebela accused Prinston and Actavis of infringing
 claims of U.S. Patent Nos. 8,658,663 (’663 patent) and
 8,946,251 (’251 patent), both relating to methods of using
 paroxetine to treat thermoregulatory dysfunction associ-
 ated with menopause. 4 Following a bench trial, the district
 court found claims 1, 2, and 5 of the ’663 patent and claims

     1    Sebela Ireland Limited’s (Sebela) predecessor in in-
 terest initiated these lawsuits.
     2    Prinston Pharmaceutical Inc., Solco Healthcare
 U.S., LLC, and Huahai US Inc. will be collectively referred
 to as Prinston.
     3    Actavis Laboratories FL, Inc., Actavis Pharma,
 Inc., Andrx Corp. (n/k/a Andrx LLC), and Actavis, Inc. will
 be collectively referred to as Actavis.
     4    Sebela also accused Prinston of infringing claims of
 U.S. Patent No. 7,598,271, not at issue in this appeal.
Case: 18-1036     Document: 96     Page: 3    Filed: 04/20/2021

 SEBELA IRELAND   v. PRINSTON PHARMACEUTICAL                 3

 1, 2, 4, 9, and 10 of the ’251 patent invalid as obvious. See
 In re Sebela Pat. Litig., No. 2:14-cv-06414-CCC-MF, 2017
 WL 3449054 (D.N.J. Aug. 11, 2017) (Opinion); J.A. 69–72
 (Final Judgment).
      Sebela’s appeal is unusual in that it does not challenge
 the district court’s invalidity holding based on obviousness
 grounds; it actually asks us to summarily affirm that deci-
 sion. Instead, Sebela’s objective is to ensure that any ad-
 verse alternative rulings made by the district court for
 those same patent claims as to utility and written descrip-
 tion carry no preclusive effect. Specifically, Sebela asks us
 to summarily affirm the district court’s unchallenged obvi-
 ousness ruling while at the same time making clear that
 we do not reach the district court’s findings as to written
 description and utility. In effect, Sebela’s theory for stand-
 ing to bring this appeal rests on its view that any alterna-
 tive invalidity holding based on written description or
 utility grounds has a substantial chance, under Third Cir-
 cuit law, of being given preclusive effect against Sebela’s
 related patent claims it has asserted in a separate patent
 infringement action regarding U.S. Patent No. 9,393,237
 (’237 patent). Prinston, for its part, has not declared that
 it will forgo any invocation of preclusion as to any written
 description and utility determinations by the district court
 here. Rather, it contends that Sebela lacks standing in this
 appeal because Sebela has not sought to overturn the dis-
 trict court’s judgment that the asserted claims are invalid
 (for obviousness) and issue preclusion concerns are an in-
 sufficient basis for standing to appeal.
     We need not address the correctness of Sebela’s stand-
 ing theory because it rests on an erroneous premise—that
 the district court made alternative invalidity holdings
 based on written description and utility grounds. While
 the district court briefly discussed those two potential in-
 validity grounds, it did so in an inconclusive, contingent
 manner that did not result in additional, alternative hold-
 ings to the obviousness ground for invalidity. Because
Case: 18-1036     Document: 96     Page: 4    Filed: 04/20/2021

 4              SEBELA IRELAND   v. PRINSTON PHARMACEUTICAL

 Sebela’s only identified injury it seeks to undo in this ap-
 peal is based on a misreading of the district court’s deci-
 sion, we conclude Sebela lacks constitutional standing to
 bring this appeal. Accordingly, we dismiss.
                         DISCUSSION
      “Because the Constitution limits its grant of the judi-
 cial power to Cases or Controversies, U.S. Const., art. III,
 § 2, any party that appeals to this court must have stand-
 ing under Article III before we can consider the merits of
 the case. . . . For a party to have standing, it must show (1)
 an injury in fact, (2) a causal connection between the injury
 and the conduct complained of, and (3) a likelihood that the
 injury will be redressed by a favorable decision.” See AVX
 Corp. v. Presidio Components, Inc., 923 F.3d 1357, 1361
 (Fed. Cir. 2019) (citing Lujan v. Defs. of Wildlife, 504 U.S.
 555, 560–61 (1992) (internal quotation marks omitted)).
 Critical to Sebela’s sole theory for appellate standing—its
 injury in fact—is its interpretation of the district court’s
 decision as having made alternative holdings of invalidity
 for the asserted claims: (1) obviousness; (2) lack of written
 description; and (3) lack of utility. That premise plays a
 crucial role in the understanding of preclusion law that un-
 dergirds Sebela’s assertion of a concrete interest in secur-
 ing the affirmance it seeks.
     On matters of preclusion law, we would follow Third
 Circuit law (or, of course, superseding Supreme Court pro-
 nouncements). Intellectual Ventures I LLC v. Capital One
 Fin. Corp., 937 F.3d 1359, 1370 (Fed. Cir. 2019), reh’g de-
 nied, 943 F.3d 1383 (Fed. Cir. 2019). Alternative holdings
 of a district court may have preclusive effect in the Third
 Circuit, which follows the Restatement (First) of Judg-
 ments § 68 cmt. n (1942). Jean Alexander Cosms., Inc. v.
 L’Oreal USA, Inc., 458 F.3d 244, 251, 253, 255 (3d Cir.
 2006) (“[W]e will follow the traditional view that inde-
 pendently sufficient alternative findings should be given
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 SEBELA IRELAND   v. PRINSTON PHARMACEUTICAL                5

 preclusive effect.”). But there is good reason to think that,
 where alternative holdings are challenged on appeal and
 the appellate court does not reach them, preclusive effect
 would not be given to those holdings. One reason for that
 conclusion is Supreme Court authority. Jennings v. Ste-
 phens, 574 U.S. 271, 278 (2015) (“Whenever an appellee
 successfully defends a judgment on an alternative ground,
 he changes what would otherwise be the judgment’s issue-
 preclusive effects. Thereafter, issue preclusion no longer
 attaches to the ground on which the trial court decided the
 case, and instead attaches to the alternative ground on
 which the appellate court affirmed the judgment. Restate-
 ment (Second) of Judgments § 27 (1982).”). Another is that
 the First Restatement itself so provides. See First Restate-
 ment § 69, cmt. b; see also Hicks v. Quaker Oats Co., 662
 F.2d 1158, 1169 (5th Cir. 1981). Sebela asks us to affirm
 on obviousness, without our reaching Sebela’s challenges
 on appeal regarding written description and utility,
 thereby eliminating any preclusive effect of any alternative
 holdings on those issues.
     We read the district court’s opinion, however, as reach-
 ing only a single holding for invalidating the patent: obvi-
 ousness. Several aspects of the language and character of
 the Opinion channel us to this conclusion. First, unlike its
 highly detailed discussion of obviousness, Opinion, 2017
 WL 3449054 at *20–26, the district court only briefly dis-
 cussed utility and written description, id. at *26–29. Sec-
 ond, the district court’s final conclusion refers only to
 obviousness: “Prinston and Actavis have met their burden
 of proving clear and convincing evidence that the ’663 and
 ’251 patents are invalid as obvious,” id. at *29 (emphasis
 added).
     Significant to our understanding of the district court’s
 decision is the way in which its brief utility and written
 description discussions are written and structured in a con-
 tingent, and not alternative, manner. When discussing
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 6               SEBELA IRELAND   v. PRINSTON PHARMACEUTICAL

 utility, the district court noted: (1) “if [it] had found the
 method of treatment patents nonobvious, [it] would have
 concluded that the asserted claims are invalid for lack of
 credible utility,” id. at *27; (2) “were [it] to find the claimed
 methods are [nonobvious], it would instead find the patents
 invalid for lack of credible utility,” id. at *28; and (3) “while
 [it] has found the claimed methods are obvious, had it not,
 it would instead find the patents invalid for lack of credible
 utility,” id. Likewise, for written description, the district
 court stated that “[w]ere [it] to conclude that the patents
 are nonobvious, it would also conclude that the specifica-
 tion as it was filed does not reasonably convey to those
 skilled in the art that the inventor had possession of the
 claimed subject matter at that time,” id. at *29. This con-
 tingent and inconclusive language is distinct from the lan-
 guage typically used to signal an alternative holding
 because it depends on the district court finding the claims
 nonobvious. See, e.g., United States v. Wallace, 964 F.3d
 386, 390 (5th Cir. 2020), cert. denied, 141 S. Ct. 910, 208 L.
 Ed. 2d 460 (2020) (noting that alternative holdings are of-
 ten introduced with language such as “even if the em-
 ployee had produced evidence of an oral contract” or “even
 were there error that was plain” (emphases added)). As
 Prinston acknowledges, Oral Arg. at 27:33–27:45, a contin-
 gent finding does not amount to an alternative holding, and
 therefore could not have preclusive effect, see Jean Alexan-
 der, 458 F.3d at 255.
     The record also supports our understanding that the
 district court reached only a single ground of invalidity.
 When discussing the Opinion at the preliminary injunction
 hearing in the ’237 patent infringement suit, the district
 court asked the following: “But given the Court’s ruling
 which was on obviousness, on the basis of obviousness, can
 you respond in terms of your focus at this point on utility
 and written description?” J.A. 3574. This statement fur-
 ther confirms that the district court based its invalidity
 conclusion in the Opinion on obviousness alone and made
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 SEBELA IRELAND   v. PRINSTON PHARMACEUTICAL                7

 only contingent findings, not alternative holdings, for util-
 ity and written description.
      Because we conclude that the Opinion provides only a
 35 U.S.C. § 103 holding of invalidity, which Sebela does not
 challenge on appeal, we must therefore dismiss this appeal
 for lack of constitutional standing.
                        CONCLUSION
      For the foregoing reasons, we conclude that Sebela
 lacks standing to appeal. The district court provided only
 a § 103 holding of invalidity, which Sebela does not contest.
 Therefore, we dismiss.
                        DISMISSED