United States: Claim Preclusion Barred Subsequent Infringement Action Despite Intervening Reexamination

In Senju Pharmaceutical Co. v. Apotex Inc., No. 13-1027 (Fed. Cir. Mar. 31, 2014), the Federal Circuit affirmed the district court's dismissal of a second patent infringement action as barred by claim preclusion, holding that the intervening reexamination proceeding did not create a new cause of action.

U.S. Patent No. 6,333,045 ("the '045 patent") is directed to an ophthalmic, pharmaceutical solution containing the antimicrobial drug Gatifloxacin in combination with disodium edetate.  Apotex Inc. and Apotex Corp. (collectively "Apotex") filed an ANDA with the FDA, seeking to market a generic version of the ophthalmic solution, and Senju Pharmaceutical Co., Ltd., Kyorin Pharmaceutical Co., Ltd., and Allergan, Inc. (collectively "Senju") sued Apotex for patent infringement.  In this first suit, the district court concluded that Apotex infringed claims 1-3, 6, 7, and 9 of the '045 patent, and that claims 1-3 and 6-9 were invalid as obvious.

Before final judgment was entered in the first suit, Senju requested reexamination of claims 1-3, 6, 8, and 9 of the '045 patent, and the PTO granted the request.  During reexamination, Senju amended claim 6 and added new independent claim 12 and new dependent claims 13-16.  The PTO canceled claims 1-3 and 8-11, and certified amended claim 6 and new claims 12-16 as patentable.  Still pending final judgment in the first suit, Senju filed a second suit against Apotex, seeking DJ of infringement of claims 6 (as amended) and 12-16.  The district court subsequently issued a final judgment in the first suit, and Apotex filed a Rule 12(b)(6) motion to dismiss the second suit based on claim preclusion.  The district court granted the motion, and Senju appealed.

On appeal, the Federal Circuit looked to the Third Circuit's three-prong test for claim preclusion.  The Court noted that the parties agreed that the first suit resulted in a final judgment on the merits and involved the same parties, but disagreed over whether the suits were based on the same cause of action.  The Federal Circuit applied its own law to this question, looking first to whether the products were "essentially the same" and second to whether the patents were the same.  Regarding the first question, the Court concluded that the product for claim preclusion purposes was the drug described in the ANDA, and that both suits were thus based on the same product.

"[C]laims that emerge from reexamination do not in and of themselves create a new cause of action that did not exist before."  Slip op. at 13.

The Court next considered "[t]he more difficult question [of] whether the same patent, or more precisely the same patent rights, were involved in both suits."  Slip op. at 9.  Senju argued that the reexamination created a new cause of action because the reexamined patent claims were substantially different from the original patent claims.  Apotex argued that in accordance with 35 U.S.C. § 305, the scope of the reexamined claims had to be the same as or narrower than that of the original claims.  Apotex argued that the reexamined patent thus did not give Senju any additional rights against Apotex's product that Senju did not already possess in the first suit.

The Court agreed with Apotex, noting that the Court had already essentially rejected Senju's argument in Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335 (Fed. Cir. 2012).  The Court stated that "[i]n this case [it] reach[ed] the same conclusion that the Aspex court did—claims that emerge from reexamination do not in and of themselves create a new cause of action that did not exist before."  Slip op. at 13.  The Court reasoned that reexamination does not involve the filing of a new application or the issuance of a new patent, and thus a reexamined patent is the original patent.  The Court noted that while the reexamination process permits some amendments, "such changes are strictly circumscribed by the original patent's disclosure and claim scope."  Id. at 14.

The Court stated that it was not addressing "[w]hether it is possible that a reexamination could ever result in the issuance of new patent claims that were so materially different from the original patent claims as to create a new cause of action, but at the same time were sufficiently narrow so as not to violate the rule against reexamined claims being broader than the original claims."  Id. at 15.  Instead, the Court stated, "We hold that, in the absence of a clear showing that such a material difference in fact exists in a disputed patentable reexamination claim, it can be assumed that the reexamined claims will be a subset of the original claims and that no new cause of action will be created."  Id.  The Court thus concluded that the reexamination of the '045 patent did not create a new cause of action, and affirmed the district court's dismissal of the suit for claim preclusion.

Judge O'Malley dissented, stating that the focus should be "on whether new rights were obtained through reexamination."  O'Malley Dissent at 1-2.  According to Judge O'Malley, "[a]lthough reexamined claims cannot be broader in scope than original claims, they sometimes grant broader rights."  Id. at 2.

Judge O'Malley believed that determining whether the reexamined '045 patent claims provided Senju with new rights required the district court to compare the reexamined claims to the original claims to determine if they were substantially the same.  Because the district court failed to do so, Judge O'Malley would vacate the judgment and remand for further analysis.

This article previously appeared in Last Month at the Federal Circuit, April 2014.

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