Novartis Pharmaceuticals v. Watson Laboratories, Inc. , 611 F. App'x 988 ( 2015 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
NOVARTIS PHARMACEUTICALS CORPORATION,
NOVARTIS AG, NOVARTIS PHARMA AG,
NOVARTIS INTERNATIONAL PHARMACEUTICAL
LTD., LTS LOHMANN THERAPIE-SYSTEME AG,
Plaintiffs-Appellees
v.
WATSON LABORATORIES, INC., WATSON
PHARMA, INC., nka ACTAVIS PHARMA, INC.,
ACTAVIS, INC., fka WATSON PHARMACEUTICALS, INC.,
Defendants-Appellants
______________________
2014-1799, 2014-1800
______________________
Appeals from the United States District Court for the
District of Delaware in Nos. 1:11-cv-01112-RGA, 1:13-cv-
00371-RGA, Judge Richard G. Andrews.
--------------------------------------------------------------------------
NOVARTIS PHARMACEUTICALS CORPORATION,
NOVARTIS AG, NOVARTIS PHARMA AG,
NOVARTIS INTERNATIONAL PHARMACEUTICAL
LTD., LTS LOHMANN THERAPIE-SYSTEME AG,
Plaintiffs-Appellants
v.
2 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
PAR PHARMACEUTICAL INC.,
Defendant-Cross-Appellant
______________________
2015-1061, 2015-1062, 2015-1120, 2015-1121
______________________
Appeals from the United States District Court for the
District of Delaware in Nos. 1:11-cv-01077-RGA, 1:13-cv-
01467-RGA, Judge Richard G. Andrews.
--------------------------------------------------------------------------
PAR PHARMACEUTICAL, INC.,
Plaintiff-Appellee
v.
NOVARTIS PHARMACEUTICALS CORPORATION,
NOVARTIS AG, NOVARTIS PHARMA AG,
NOVARTIS INTERNATIONAL PHARMACEUTICAL
LTD., LTS LOHMANN THERAPIE-SYSTEME AG,
Defendants-Appellants
______________________
2015-1141
______________________
Appeal from the United States District Court for the
District of Delaware in No. 1:14-cv-00843-RGA, Judge
Richard G. Andrews.
_____________________
Decided: May 21, 2015
______________________
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 3
CHARLOTTE JACOBSEN, Fitzpatrick, Cella, Harper &
Scinto, New York, NY, argued for plaintiffs-appellees in
cases 2014-1799, 2014-1800. Also represented by
CHRISTOPHER EARL LOH, NICHOLAS N. KALLAS.
GEORGE C. LOMBARDI, Winston & Strawn, LLP, Chi-
cago, IL, argued for defendants-appellants in cases 2014-
1799, 2014-1800. Also represented by MICHAEL KEENAN
NUTTER; STEFFEN NATHANAEL JOHNSON, EIMERIC REIG-
PLESSIS, Washington, DC.
CHRISTOPHER EARL LOH, Fitzpatrick, Cella, Harper &
Scinto, New York, NY, argued for plaintiffs-appellants in
cases 2015-1061, 2015-1062, 2015-1120, 2015-1121;
defendants-appellants in case 2015-1141. Also represent-
ed by CHARLOTTE JACOBSEN, NICHOLAS N. KALLAS.
DANIEL BROWN, Latham & Watkins LLP, New York,
NY, argued for defendant-cross appellant in cases 2015-
1061, 2015-1062, 2015-1120, 2015-1121; plaintiff-appellee
in case 2015-1141. Also represented by GABRIEL BELL,
ROBERT J. GAJARSA, Washington, DC; ROGER J. CHIN, San
Francisco, CA.
______________________
Before LOURIE, TARANTO, and HUGHES,
Circuit Judges.
LOURIE, Circuit Judge.
Watson Laboratories, Inc., Watson Pharma, Inc., and
Actavis, Inc. (collectively, “Watson”) appeal from the
decision of the United States District Court for the Dis-
trict of Delaware finding the asserted claims of U.S.
Patents 6,316,023 (“the ’023 patent”) and 6,335,031 (“the
’031 patent”) not invalid as obvious. Novartis Pharm.
Corp. v. Par Pharm., Inc., 48 F. Supp. 3d 733 (D. Del.
June 18, 2014) (“Watson Trial Opinion”); 2014-1799,
2014-1800 Joint Appendix (“J.A.1”) 1–4 (final judgment).
4 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
Novartis Pharmaceuticals Corp., Novartis AG, Novar-
tis Pharma AG, Novartis International Pharmaceutical
Ltd., and LTS Lohmann Therapie-Systeme AG (collective-
ly, “Novartis”) appeal from the decision of the United
States District Court for the District of Delaware finding
the ’023 and ’031 patents not infringed by Par Pharma-
ceutical Inc. (“Par”)’s product, which is the subject of its
Abbreviated New Drug Application (“ANDA”). Novartis
Pharm. Corp. v. Par Pharm., Inc., No. 11-cv-1077, 2014
WL 4364674 (D. Del. Aug. 29, 2014) (“Par Trial Opinion”);
2015-1061, 2015-1062, 2015-1120, 2015-1121 Joint Ap-
pendix (“J.A.2”) 1–3, 4–6, 7–8 (final judgments).
In view of the fact that these appeals involve the same
patents, related issues, and the same parties in the sever-
al cases, we decide them together in one opinion. Because
the district court did not err in concluding that the pa-
tents are not invalid, and additionally did not clearly err
in finding the patents not infringed by Par’s ANDA prod-
uct, we affirm the district court’s judgments.
BACKGROUND
Novartis owns the ’023 and ’031 patents, which share
a common specification. The patents are directed to
transdermal pharmaceutical formulations of rivastigmine
for the treatment of dementia related to Alzheimer’s
disease and Parkinson’s disease. In 2007, Novartis re-
ceived approval from the United States Food and Drug
Administration (the “FDA”) to market a transdermal
rivastigmine patch in dosage strengths of 4.6 mg/24 hours
(“4.6 mg dose”) and 9.5 mg/24 hours (“9.5 mg dose”). In
connection with the approved New Drug Application for
its rivastigmine patch, Novartis listed the ’023 and ’031
patents as claiming the drug product in the FDA’s Ap-
proved Drug Products with Therapeutic Equivalence
Evaluations (commonly known as the “Orange Book”) for
each dosage strength.
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 5
In due course, Watson and Par each submitted AN-
DAs, seeking approval from the FDA to market generic
versions of Novartis’s rivastigmine patch (the “ANDA
products”). Because Novartis at the time only had ap-
proval for the 4.6 mg and 9.5 mg doses, Par and Watson
originally sought approval only for those two doses. Both
ANDAs contained certifications that the patents listed in
the Orange Book were invalid or would not be infringed
by the ANDA products. After receiving notices of those
certifications from Watson and Par in late 2011, Novartis
filed suit, alleging infringement of the ’023 and ’031
patents by the 4.6 mg and 9.5 mg doses of Watson’s and
Par’s ANDA products.
In 2012, Novartis received FDA approval for a dosage
strength of 13.3 mg/24 hours (“13.3 mg dose”). After the
Orange Book was updated to list the ’023 and ’031 patents
for Novartis’s newly approved third dosage strength, Par
and Watson amended their ANDAs to seek approval of
that dose as well. Novartis then filed new suits in 2013,
asserting only the ’031 patent against the 13.3 mg dose of
Par’s and Watson’s ANDA products. Par filed suit against
Novartis in 2014, seeking a declaratory judgment that its
13.3 mg dose also does not infringe the ’023 patent.
In its suits against Watson and Par, Novartis asserted
claims 2 and 7 of the ’023 patent, and claims 3, 7, 13, 16,
and 18 of the ’031 patent, which are collectively directed
to rivastigmine pharmaceutical compositions, transder-
mal devices comprising such compositions, and methods
for stabilizing such compositions.
Claim 1 of the ’031 patent, not asserted but included
here because claims 3, 7, and 13 depend from it, reads as
follows:
1. A pharmaceutical composition comprising:
(a) a therapeutically effective amount of
[rivastigmine];
6 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
(b) about 0.01 to about 0.5 percent by weight of an
antioxidant, based on the weight of the compo-
sition, and
(c) a diluent or carrier.
’031 patent col. 8 ll. 14–21 (emphasis added). Claims 3
and 13 are dependent claims that recite additional limita-
tions relating to the antioxidant.
Claim 7 of the ’031 patent was the focus of the district
court in the infringement analysis and reads as follows:
7. A transdermal device comprising a pharmaceu-
tical composition as defined in claim 1, wherein
the pharmaceutical composition is supported by
a substrate.
Id. col. 8 ll. 49–51. Claims 2 and 7 of the ’023 patent
similarly recite a pharmaceutical composition and a
transdermal device, respectively, comprising rivastigmine
and an antioxidant. ’023 patent col. 8 ll. 17–28, 43–50.
Claim 15 of the ’031 patent, also not asserted but in-
cluded here because claims 16 and 18 depend from it,
reads as follows:
15. A method of stabilizing [rivastigmine], where-
in the method comprises forming a composition
by combining [rivastigmine] with an amount of
anti-oxidant effective to stabilize [rivastigmine]
from degradation.
’031 patent col. 9 ll. 10–16 (emphasis added). Claims 16
and 18 are dependent claims that recite additional limita-
tions relating to the antioxidant.
Present in all asserted claims and important to the
resolution of both the validity and the noninfringement
issues is the “antioxidant” claim limitation. The district
court construed the term “antioxidant” to mean an “agent
that reduces oxidative degradation.” J.A.1 48–50. The
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 7
district court then conducted separate bench trials on the
Watson and Par suits.
I
At the Watson trial, the district court found that No-
vartis had proved infringement of the asserted claims by
Watson’s ANDA product and that Watson had not proved
that the asserted claims were invalid.
Watson asserted that the prior art disclosed all of the
limitations of the ’023 and ’031 patents. The district court
agreed that U.K. Patent Application GB 2 203 040 A (“GB
’040”), U.S. Patent 4,948,807 (“the ’807 patent”), and
Esther Elmalem et al., Antagonism of Morphine-Induced
Respiratory Depression by Novel Anticholinesterase
Agents, 30 Neuropharmacology 1059 (1991) (“the Elma-
lem article”) were prior art, and that collectively they
disclosed pharmaceutical compositions comprising ri-
vastigmine and an antioxidant. Watson Trial Opinion, 48
F. Supp. 3d at 753. However, the court found that ri-
vastigmine was not known to be susceptible to oxidative
degradation at the time of the invention, and that the
cited prior art did not teach otherwise. Id. Thus, it held,
it would not have been obvious to add an antioxidant to a
rivastigmine composition in a transdermal device.
Specifically, the district court first found that GB ’040
disclosed all of the limitations of the asserted claims
except the addition of an antioxidant, and therefore it “did
not disclose or otherwise suggest that rivastigmine, in any
formulation, was susceptible to oxidative degradation.”
Id. at 753–54. The court determined that one of skill in
the art “would not have been motivated to include an
antioxidant in any formulation unless there was evidence
of oxidative degradation.” Id. at 754. The court found
that the compatibility of excipients like antioxidants in a
given formulation is unpredictable without experimenta-
tion. Moreover, the court noted, there were many known
types of degradation other than oxidation, and one of skill
8 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
in the art would only have been motivated to address
known degradation problems. The court found that GB
’040, however, was “silent” with respect to rivastigmine’s
instability. Id.
The district court similarly found that the ’807 patent
teaches the addition of an antioxidant to rivastigmine, but
does not teach one of skill in the art that rivastigmine is
susceptible to oxidative degradation. Id. at 754–55. The
court acknowledged that the ’807 patent states that
antioxidants “can be incorporated as required.” Id. at
755; ’807 patent col. 7 ll. 45–53. However, the court
considered the reference as a whole and found that noth-
ing in the ’807 patent suggests that rivastigmine requires
an antioxidant, mentions any observed oxidative degrada-
tion of rivastigmine, or discloses any stability data. The
court also noted that both the ’807 patent and the U.S.
counterpart of GB ’040 were considered by the patent
examiner during prosecution of the ’023 and ’031 patents.
The court therefore found that the ’807 patent “would not
teach [one of skill] that an antioxidant was required to
protect rivastigmine from oxidative degradation.” Id.
The district court further found that the Elmalem ar-
ticle did not teach that rivastigmine is susceptible to
oxidative degradation. Id. at 755–57. The most arguably
relevant passage in the Elmalem article states, “All drugs
were made up in sterile saline, which included an equal
weight of [an antioxidant], to prevent oxidation.” Id.;
J.A.1 1876. Watson argued that this sentence discloses
that rivastigmine was known to be susceptible to oxida-
tive degradation, and that an antioxidant in the same
amount as each test compound was added for the specific
purpose of preventing oxidation of that test compound.
Novartis responded that because it was well-known that
physostigmine required an antioxidant in solution, all of
the formulations being tested included an antioxidant to
eliminate any variability added by the antioxidant.
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 9
The district court admitted that there “does not ap-
pear to be an objectively ‘correct’ reading; rather both
arguments seem logical and are supported by highly
qualified experts in the field.” Id. at 757. Because the
court credited Novartis’s expert testimony as being more
credible than Watson’s and more consistent with the
court’s reading of the article, the court consequently
interpreted the addition of the antioxidant to the other
test formulations as a measure to reduce variability
rather than a teaching that rivastigmine is susceptible to
oxidative degradation. Id. at 756–57. The court deter-
mined that Watson failed to provide clear and convincing
evidence that the Elmalem article should be understood
otherwise. Despite the fact that the Elmalem article thus
discloses a formulation with rivastigmine and an antioxi-
dant, the court decided that the article “would not have
motivated [one of skill in the art] to combine an antioxi-
dant with the transdermal rivastigmine device disclosed
by GB ’040.” Id. at 756.
Because the prior art did not teach that oxidative deg-
radation of rivastigmine was a known problem, the dis-
trict court thus found that it would not have been obvious
to one of skill in the art to combine rivastigmine with an
antioxidant, especially in a transdermal formulation. The
court therefore held that Watson failed to prove obvious-
ness by clear and convincing evidence.
II
At the Par trial, the district court found that Novartis
did not prove that Par’s ANDA product infringes claim 7
of the ’031 patent. Novartis contended that the acetalde-
hyde impurities found in the adhesive used in Par’s
ANDA product met the claimed antioxidant limitation,
but the court found that Novartis failed to put forth
sufficient evidence to show that acetaldehyde is an antiox-
idant.
10 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
Although the district court agreed that some reducing
agents can act as antioxidants by undergoing sacrificial
oxidation, and that acetaldehyde is a reducing agent and
therefore may be an antioxidant, the court credited Par’s
expert testimony that one of skill in the art would not
have considered acetaldehyde to be an antioxidant, but
that acetaldehyde could instead contribute to oxidative
degradation. Par Trial Opinion, 2014 WL 4364674 at *3–
4. The one piece of prior art that Novartis could point to
as describing acetaldehyde as an antioxidant was a Chi-
nese patent that Novartis produced shortly before trial,
but the court excluded that because it found that allowing
that into evidence would cause incurable prejudice to Par
and would unnecessarily delay the trial.
The district court also discounted the evidence from
testing conducted by Novartis’s expert. Id. at *4–6.
Novartis asserted that the test data showed that a test
rivastigmine composition (not the transdermal formula-
tion proposed in Par’s ANDA) with acetaldehyde experi-
enced less oxidative degradation than the composition
without acetaldehyde. However, Par’s expert detailed,
and the court accepted, various concerns with the testing
protocol and results that rendered the results unreliable.
For example, Par’s expert criticized the test for not
properly modeling the conditions of a transdermal patch,
much less simulating Par’s ANDA product. As a result,
the district court rejected that testing as too flawed to
provide “usable evidence.” Id. at *7.
Novartis’s expert also presented calculations using
three different analytical methods to support the statisti-
cal significance of the test results. However, another of
Par’s experts found fault with those methods. She pro-
vided a statistical analysis using a fourth method, which
produced a lower confidence interval range that indicated
that the differences shown in Novartis’s data were not
statistically significant. The district court accordingly
found that Novartis failed to provide sufficient expert
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 11
testimony as to the statistical significance of its test
results; as a result, the district court either could not rely
on the test or would favor Par’s expert testimony that the
test results were inconclusive. Id. at *5.
The district court therefore found that Novartis failed
to prove by a preponderance of the evidence that acetal-
dehyde is an antioxidant, and consequently failed to prove
that Par’s ANDA product contains an antioxidant.
In the declaratory judgment action, Par filed a motion
for summary judgment of noninfringement of the ’023
patent by the 13.3 mg dose of its ANDA product, based on
collateral estoppel. The district court granted that mo-
tion.
The court accordingly entered final judgment in all of
the cases, finding that the asserted claims are not invalid
as obvious, and that Par’s ANDA product does not in-
fringe the ’023 and ’031 patents. Watson and Novartis
timely appealed to this court. We have jurisdiction pur-
suant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
Following a bench trial, we review a district court’s
conclusions of law de novo and its findings of fact for clear
error. Golden Blount, Inc. v. Robert H. Peterson Co., 365
F.3d 1054, 1058 (Fed. Cir. 2004). A factual finding is only
clearly erroneous if, despite some supporting evidence, we
are left with the definite and firm conviction that a mis-
take has been made. United States v. U.S. Gypsum Co.,
333 U.S. 364, 395 (1948); Alza Corp. v. Mylan Labs., Inc.,
464 F.3d 1286, 1289 (Fed. Cir. 2006); see also Polaroid
Corp. v. Eastman Kodak Co., 789 F.2d 1556, 1559 (Fed.
Cir. 1986) (“The burden of overcoming the district court's
factual findings is, as it should be, a heavy one.”). A
district court also has broad discretion in determining
witness credibility, and we give great deference to those
determinations. Energy Capital Corp. v. United States,
12 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
302 F.3d 1314, 1329 (Fed. Cir. 2002); Ecolochem, Inc. v. S.
Cal. Edison Co., 227 F.3d 1361, 1378–79 (Fed. Cir. 2000)
(citing Anderson v. City of Bessemer City, 470 U.S. 564,
575–76 (1985)).
This appeal raises questions of validity and infringe-
ment, but, unlike most such appeals, does not challenge
the district court’s claim construction. As we find no
reason to disturb the district court’s claim construction in
these cases, we will proceed directly to the issues raised.
I
We first address Watson’s argument that the district
court erred by failing to hold the asserted claims of the
’023 and ’031 patents invalid as obvious under § 103.
A patent claim is invalid for obviousness if an alleged
infringer proves that the differences between the claimed
subject matter and the prior art are such that “the subject
matter as a whole would have been obvious at the time
the invention was made to a person having ordinary skill
in the art.” 35 U.S.C. § 103(a) (2006). * Patents are pre-
sumed to be valid, and overcoming that presumption
requires clear and convincing evidence. 35 U.S.C. § 282;
Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. __, 131 S. Ct.
2238, 2242 (2011).
Obviousness is ultimately a conclusion of law prem-
ised on underlying findings of fact, including the scope
and content of the prior art, the differences between the
claimed invention and the prior art, and the level of
ordinary skill in the pertinent art. KSR Int’l Co. v. Tele-
* Because the ’023 and ’031 patents were filed be-
fore the effective date of the America Invents Act, the
earlier, pre-Act version of § 103(a) applies. See Leahy–
Smith America Invents Act, Pub. L. No. 112-29, 125 Stat.
284, 293 (2011).
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 13
flex Inc., 550 U.S. 398, 427 (2007); Graham v. John Deere
Co., 383 U.S. 1, 17–18 (1966); Alcon Research, Ltd. v.
Apotex Inc., 687 F.3d 1362, 1365 (Fed. Cir. 2012). “The
presence or absence of a motivation to combine references
in an obviousness determination is a pure question of
fact.” Alza, 464 F.3d at 1289.
In addition to common knowledge or teachings in the
prior art itself, a “design need or market pressure or other
motivation” may provide a suggestion or motivation for
one of ordinary skill to combine prior art elements in the
manner claimed. Rolls Royce, PLC v. United Techs. Corp.,
603 F.3d 1325, 1339 (Fed. Cir. 2010); KSR, 550 U.S. at
420. Even an obvious solution, however, does not render
an invention obvious if the problem solved was previously
unknown. Mintz v. Dietz & Watson, Inc., 679 F.3d 1372,
1377 (Fed. Cir. 2012) (“Often the inventive contribution
lies in defining the problem in a new revelatory way.”);
Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346, 1356–57
(Fed. Cir. 2013) (finding that the claimed invention would
not have been obvious to try to persons of ordinary skill in
the art “because they would not have recognized the
problem”). These principles are relevant here.
Watson argues that the combination of rivastigmine
with an antioxidant was disclosed by or suggested in both
the ’807 patent and the Elmalem article, and that the
district court erred by requiring that an explicit motiva-
tion to combine be found in the prior art. More specifical-
ly, Watson contends that the district court incorrectly
required specific examples of oxidative degradation asso-
ciated with rivastigmine, even though the ’807 patent
illuminates the problem and proposes the solution.
Watson also asserts that the Elmalem article expressly
provides that motivation by teaching that oxidative
degradation was a known problem for rivastigmine and
that an antioxidant was the solution to that problem.
Watson further argues that Novartis’s interpretation of
the Elmalem article renders the described experiment
14 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
unreproducible, and criticizes the district court’s decision
to rely on an expert’s credibility instead of on scientific
explanation to determine the appropriate interpretation
of the prior art’s teachings.
Novartis responds that there were no disclosures in
the prior art that taught or reasonably suggested that
rivastigmine was susceptible to oxidative degradation.
Novartis asserts that one of skill in the art would not
have expected that an antioxidant was required, either
based on rivastigmine’s chemical structure or without
months of testing. Moreover, Novartis explains, both
rivastigmine and the addition of an antioxidant were
intended as solutions for the known degradation problems
with physostigmine. Because oxidative degradation was
not a known problem for rivastigmine, Novartis contends
that the district court did not clearly err in finding that no
motivation existed for adding an antioxidant. Novartis
further asserts that Watson failed to show a motivation to
combine an antioxidant with rivastigmine in a transder-
mal patch.
We agree with Novartis that the district court did not
err in concluding that Watson failed to prove that the
asserted claims are invalid as obvious. The district court
also did not clearly err in finding that the prior art does
not unambiguously identify oxidative degradation to be a
known problem with rivastigmine, and that therefore one
of skill would not have had a reason to add an antioxidant
to the GB ’040 transdermal formulation.
Although the addition of an antioxidant would have
been an obvious solution for a formulation with known
oxidation problems, here Watson failed to prove that a
rivastigmine formulation was known to be susceptible to
oxidative degradation. See Leo Pharm., 726 F.3d at 1356–
57 (finding that the invention was not obvious where
stability problem not recognized or known). Without the
knowledge of a problem, one of skill in the art would not
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 15
have been motivated to modify GB ’040 with antioxidants
as purportedly disclosed in the ’807 patent or the Elma-
lem article.
The references upon which Watson primarily relies
disclose rivastigmine formulations, but only with an
antioxidant added either conditionally (’807 patent) or
indiscriminately across the board (Elmalem), and, moreo-
ver, not in a transdermal patch. Merely finding each of
the claimed elements in the prior art does not prove a
composite invention obvious, however, because “claimed
discoveries almost of necessity will be combinations of
what, in some sense, is already known.” KSR, 550 U.S. at
418–19.
The ’807 patent specifically states that physostigmine
is “chemically unstable” and “must be prepared in solu-
tion with an antioxidant,” and thus one of that patent’s
objectives was to address a need for compounds with
“greater chemical stability” than physostigmine. ’807
patent col. 1 ll. 30–35, col. 3 ll. 37–39. Rivastigmine (as
the racemate) is disclosed by the ’807 patent as an alter-
native to physostigmine, with increased activity that may
be due to greater chemical stability. Id. col. 11 ll. 23–29
(noting the racemate of rivastigmine, RA7). As the dis-
trict court noted, the ’807 patent nowhere discloses evi-
dence of oxidative degradation of rivastigmine. In the
portion that Watson points to, the specification describes
various types of formulations, such as tablets for oral
administration and sterile solutions for parenteral admin-
istration. Id. col. 7 ll. 15–53. More specifically, the addi-
tion of buffers, preservatives, antioxidants, etc. is noted in
the paragraph relating to sterile compositions for injec-
tion. Id. col. 7 ll. 45–50. Without prior knowledge as to
whether a compound is susceptible to oxidative degrada-
tion, the statement that excipients like antioxidants can
be incorporated “as required” is a mere generic qualifica-
tion. The district court also credited evidence that one of
skill in the art would not have been motivated to risk
16 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
incompatibility by including an antioxidant in a formula-
tion without evidence of its necessity. We thus discern no
clear error in the district court’s finding that the ’807
patent does not teach one of skill in the art that rivastig-
mine is susceptible to oxidative degradation, especially in
a transdermal formulation.
The plain language of the Elmalem article appears to
present a closer question. The district court, however,
relied on the opinions of expert witnesses to provide
analysis by persons of skill in the art, from whose per-
spective a court must view the prior art. Although the
district court heard from highly qualified individuals in
the relevant field who provided reasonable support for
both parties’ seemingly logical arguments, it found Novar-
tis’s expert’s testimony more credible; we give great
deference to such credibility determinations. Ecolochem,
227 F.3d at 1378–79.
Like the ’807 patent, the Elmalem article contrasts
the “low chemical stability” of physostigmine with the
“greater chemical stability” of the test compounds, includ-
ing rivastigmine. J.A.1 1875. Because oxidative degrada-
tion was a well-known problem with physostigmine in
solution, we agree that the experimental procedure in the
Elmalem article could reasonably be understood to add an
antioxidant to the other test formulations for the purpose
of negating an additional variable in the experiment. The
district court thus did not clearly err in finding that the
Elmalem article does not disclose that oxidative degrada-
tion was a known problem with rivastigmine.
The district court considered the parties’ arguments
and evidence, particularly their conflicting expert testi-
mony as to how one of ordinary skill would have under-
stood the prior art at the time of the invention. It made
factual findings about the scope and content of the prior
art, specifically, that rivastigmine was not known to be
susceptible to oxidative degradation, and that the ’807
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 17
patent and the Elmalem article do not teach otherwise.
The district court also found that without an appreciation
for rivastigmine’s susceptibility to oxidative degradation,
one of skill in the art would not have been motivated to
patch together the prior art to add an antioxidant to a
rivastigmine formulation, much less to a transdermal
rivastigmine formulation. We owe those findings consid-
erable deference on appeal, and we see no clear error
based on the record before us.
In view of the foregoing, we therefore affirm the dis-
trict court’s holding that Watson failed to prove by clear
and convincing evidence that the asserted claims of
Novartis’s ’023 and ’031 patents are invalid as obvious.
II
We next address the district court’s holding that Par’s
ANDA product does not infringe claim 7 of the ’031 pa-
tent.
After a bench trial, infringement is a question of fact
that we review for clear error. Alza, 464 F.3d at 1289.
Under the Hatch–Waxman framework, the filing of an
ANDA constitutes an “artificial” act of infringement for
purposes of creating case or controversy jurisdiction. 35
U.S.C. § 271(e)(2)(A); Eli Lilly & Co. v. Medtronic, Inc.,
496 U.S. 661, 676 (1990); Glaxo, Inc. v. Novopharm, Ltd.,
110 F.3d 1562, 1569 (Fed. Cir. 1997). Once jurisdiction is
established, the ultimate infringement inquiry focuses on
a comparison of the asserted patent claims against the
ANDA product that is likely to be sold following FDA
approval, under a traditional patent law analysis. Warn-
er-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365–66
(Fed. Cir. 2003) (citing Glaxo, 110 F.3d at 1567–68). The
burden of proving infringement by a preponderance of the
evidence remains on the patentee, and we have rejected
shifting that burden to the accused infringer. Id.
18 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
Additionally, we apply the law on evidentiary rulings
and the general collateral estoppel principles of the re-
gional circuit in which a district court sits. Chimie v. PPG
Indus., Inc., 402 F.3d 1371, 1376 (Fed. Cir. 2005); AbbVie
Deutschland GmbH & Co., KG v. Janssen Biotech, Inc.,
759 F.3d 1285, 1295 (Fed. Cir. 2014) (citing Pharmacia &
Upjohn Co. v. Mylan Pharm., Inc., 170 F.3d 1373, 1381
n.4 (Fed. Cir. 1999)). The Third Circuit reviews a district
court’s decision to exclude evidence for abuse of discretion,
considering the prejudice to the other party, ability to
cure that prejudice, extent of disruption to the trial, and
bad faith of the proffering party. Glass v. Phila. Elec. Co.,
34 F.3d 188, 191 (3d Cir. 1994); Meyers v. Pennypack
Woods Home Ownership Assoc., 559 F.2d 894, 904–905
(3d Cir. 1977). Collateral estoppel applies when an iden-
tical issue was previously adjudicated, the issue was
actually litigated, the previous determination was neces-
sary to the decision, and the party precluded from reliti-
gating the issue was fully represented. Jean Alexander
Cosmetics, Inc. v. L’Oreal USA, Inc., 458 F.3d 244, 249 (3d
Cir. 2006); see also United States v. 5 Unlabeled Boxes,
More or Less, 572 F.3d 169, 173–74 (3d Cir. 2009) (distin-
guishing between res judicata and collateral estoppel).
Novartis argues that the district court clearly erred in
not finding infringement because the acetaldehyde pre-
sent in Par’s ANDA product is an antioxidant. Novartis
asserts that the district court erred in treating facts as
opinions, and therefore subject to credibility determina-
tions, rather than as objective scientific findings. Novar-
tis emphasizes that the district court’s construction does
not define an antioxidant according to whether it is listed
in pharmaceutical references or recognized by experts as
one. The court abused its discretion in excluding the
Chinese patent, Novartis argues, because the evidence
was directly relevant to the issue of infringement and
thus its probative value outweighed any prejudice, and
allowing the evidence would not have been unduly disrup-
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 19
tive to trial because it supported an existing argument.
Novartis also contends that the district court misunder-
stood how a reducing agent acts as an antioxidant, and
wrongly accepted Par’s expert testimony speculating,
without any evidentiary basis, that acetaldehyde would
increase oxidative degradation. Novartis explains that
stress tests like the one conducted by its expert are com-
monly used to measure oxidative degradation, and argues
that such a test can therefore be used to determine
whether a compound reduces oxidative degradation.
Novartis maintains that its testing data and statistical
analyses prove that acetaldehyde reduces oxidative deg-
radation of rivastigmine in oxidizing conditions and thus
should suffice to meet its burden of proof.
Par responds that its ANDA product simply lacks an
antioxidant, and that Novartis failed to prove that acetal-
dehyde is an antioxidant. Although Par’s expert did not
conduct his own testing, Par contends that the expert’s
testimony on how acetaldehyde could instead promote
oxidative degradation was based on published material as
well as his own expertise in chemistry, and thus had
sound scientific footing. Par explains that reducing
agents are not necessarily antioxidants, and Novartis
failed to show that acetaldehyde actually acts as an
antioxidant. Furthermore, Par criticizes Novartis’s
testing as lacking credibility and reliability, primarily
because such a test had not been used before in such a
manner and the expert failed to validate the test with
compounds having known antioxidant characteristics.
Par dismisses Novartis’s later statistical analyses as post-
hoc attempts to make the data fit a desired result. Par
additionally asserts that, with respect to the 13.3 mg dose
of Par’s ANDA product, Novartis is collaterally estopped
by the decisions on the lower dose products from relitigat-
ing whether acetaldehyde is an antioxidant.
We agree with Par that the district court did not
clearly err in finding that Novartis failed to prove that
20 NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES
Par’s ANDA product contains an antioxidant as required
by the asserted claims. It appears that claim 7 of the ’031
patent was the only claim addressed in the opinion, see,
e.g., Par Trial Opinion, 2014 WL 4364674 at *2, but the
antioxidant limitation is present in all of the originally
asserted claims of the ’023 and ’031 patents. The in-
fringement evaluation of all the asserted claims is there-
fore properly focused on the presence or absence of an
antioxidant in Par’s ANDA product.
Under the district court’s claim construction, which
we do not disturb, it does not matter how a compound
reduces oxidative degradation, but rather that it does.
Experts for both parties agreed that not all reducing
agents are antioxidants; simply because a reducing agent
can reduce oxidative degradation by undergoing sacrificial
oxidation does not necessarily mean that it actually does
reduce oxidative degradation. Regardless whether acet-
aldehyde undergoes sacrificial oxidation or acts in other
ways, the district court found that Novartis failed to prove
that acetaldehyde reduces oxidative degradation. The
court furthermore did not abuse its discretion in exclud-
ing the Chinese patent, as Novartis failed to show that
not considering the reference was prejudicial error.
Novartis bore the burden of proving that acetaldehyde
actually reduces oxidative degradation. Both parties
proffered expert witnesses that testified on the basis of
both scientific knowledge and experimental evidence, and
the district court made factual findings based on the
credibility of those witnesses. It was well within the
district court’s province to evaluate the validity of the
data and the credibility of the corresponding testimony.
The court made specific findings on the scientific sound-
ness of Novartis’s tests and concluded that the test results
were unpersuasive. Additionally, the court determined
which method to use for a statistical analysis based on the
evidence presented at trial, and found that, even assum-
ing that the test methodology were valid, the test results
NOVARTIS PHARMACEUTICALS v. WATSON LABORATORIES 21
were not statistically significant. These are all determi-
nations of credibility, reliability, and weight, which are
fully within the district court’s purview. Because the
district court found Novartis’s expert’s testing to be
unreliable, Novartis provided no basis from which to draw
any reliable inferences as to whether acetaldehyde acts as
an antioxidant, regardless of the amount present.
Accordingly, the district court did not clearly err in
finding that Par’s ANDA product was not shown to in-
fringe any asserted claim containing the antioxidant
limitation. We find that, because the same key determi-
nation, dispositive of noninfringement, is at issue in the
declaratory judgment action, the same conclusion must be
arrived at there. See Jean Alexander Cosmetics, 458 F.3d
at 249. Thus, the ruling on collateral estoppel was cor-
rect. The district court therefore did not err in granting
final judgments of noninfringement in favor of Par for all
three doses of its ANDA product. J.A.2 1–3, 4–6, 7–8.
CONCLUSION
We have considered the remaining arguments and
conclude that they are without merit. For the foregoing
reasons, we conclude that the district court did not err in
holding that Watson failed to prove by clear and convinc-
ing evidence that the asserted claims of the ’023 and ’031
patents are invalid as obvious under 35 U.S.C. § 103, and
we therefore affirm that judgment. We further conclude
that the district court did not clearly err in finding that
Novartis failed to prove by a preponderance of the evi-
dence that Par’s ANDA product infringes the ’023 or ’031
patents, and we also affirm those judgments.
AFFIRMED
COSTS
No costs.