Federal Circuit Finds No Possibility for Preclusion in Drug Patent Appeal by Sebela

The Federal Circuit on Tuesday agreed with the District of New Jersey’s decision to dismiss Sebela Ireland Ltd.’s patent infringement case against competing pharmaceutical companies for lack of constitutional standing.

Sebela, the plaintiff-appellant, originally filed suit against Prinston Pharmaceutical Inc. and Actavis Inc. and both companies’ affiliates over allegations that the defendants infringed claims of U.S. Patent Nos. 8,658,663 and 8,946,251, relating to methods of treating dysfunction of body temperature regulation often connected to menopause.

The district court found that the challenged claims — 1, 2, and 5 of the first patent and 1, 2, 4, 9, and 10 of the second — were “invalid as obvious,” the court explained. A patent is considered obvious if there is a similar registered patent and if people with “ordinary skill in the art” do not see the patent’s invention as novel, pursuant to 35 U.S. Code § 103.

On appeal, Sebela did not dispute the district court’s judgment on the patents’ validity; “it actually asks us to summarily affirm that decision,” the circuit court said. What Sebela asked of the Federal Circuit was for it to examine “adverse alternative rulings” by the district court over the patent claims’ utility and written descriptions in the hopes that the district left open the possibility for alternative rulings that preclude the district court’s finding of obviousness.

“In effect, Sebela’s theory for standing to bring this appeal rests on its view that any alternative invalidity holding based on written description or utility grounds has a substantial chance, under Third Circuit 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,” the court explained.

Prinston and its subsidiaries, the only appellees in the case, argued for dismissal, contending that a question of preclusion is not an adequate grounds to appeal. The court said it does not need to examine whether potential preclusion provides a sufficient basis for appealing “because it rests on an erroneous premise—that the district court made alternative invalidity holdings based on written description and utility grounds.”

The circuit court reasoned that the discussion on the written description and utility of the patents-in-suit was structured by the district court as “contingent, and not alternative,” meaning that even if the court would have found the patent claims to be nonobvious, the description and utility claims still would be invalid. Sebela had suggested the alternative on appeal — that the district structured its ruling in an alternative manner, leaving open the possibility of a different judgment if not for the obviousness finding.

“We read the district court’s opinion, however, as reaching only a single holding for invalidating the patent: obviousness,” the court said, reasoning this by the dearth of discussion over the written description and utility of the patent claims and emphasis on the invalidity by obviousness.

Wilmer Cutler Pickering Hale and Dorr LLP, Foley & Lardner LLP, and King & Spalding LLP represent Sebela. Parker Poe Adams & Bernstein LLP represent the defendants.