Docket No. 2014-1469, -1504
DYK, WALLACH, HUGHES
February 6, 2018
Brief summary: DC’s decision that distribution agreement was not an offer for sale reversed as the agreement “make[s] clear that [MedCo] and ICS entered into an agreement to sell and purchase the [patented] product”. DC decision of no infringement affirmed since Hopsira “does not perform ‘efficient mixing’”.
Summary: MedCo appealed DC findings of no infringement and Hospira appealed the “finding that a distribution agreement did not constitute an invalidating ‘offer for sale’ under” § 102(b). The dispute relates to Medicine’s Angiomax product and its US 7,582,727 and 7,598,343. This case is on remand from the 2016 FC’s en banc Hospira decision. Regarding infringement, the FC panel here pointed to its 2017 Mylan decision in which an FC panel determined the ‘727 and ‘343 claims require “efficient mixing”, thereby requiring infringing batches to “be compounded using a process that employs the efficient mixing conditions of Example 5” of the ‘727 patent. In this decision, the FC panel found that “Hospira clearly does not infringe the patent method because it does not perform ‘efficient mixing’” but instead “adds the pH-adjusting solution in three portions rather than at a controlled rate” and “uses a single paddle mixer at 560 rpm” while “the claimed method requires using a paddle mixer in conjunction with a homogenizer.” The FC panel therefore affirmed the DC’s decision of no infringement.
In its 2016 en banc Hospira decision (Medicines I), the FC concluded that “a product produced pursuant to the claims of a product-by-process pursuant to the claims of a product-by-process patent is ‘on sale’ under 35 U.S.C. § 102(b)…must be the subject of a commercial sale or offer for sale…that bears the general hallmarks of a sale pursuant to” the UCC (“would be understood to be commercial sales and offers for sale ‘in the commercial community’” while the alleged sales between MedCo and its contractor Ben Venue were only “contract manufacturing services in which title always resided with MedCo”. Here, the DC concluded that a Feb. 27, 2007 (more than one year before the ‘727 and ‘343 July 27, 2008 filing dates) Distribution Agreement between MedCo and Integrated Commercialization Solutions, Inc. (ICS) “was only an agreement for ICS to be the U.S. distributor of Angiomax and was not an offer for sale of Angiomax.” This FC panel disagreed, however, finding the agreement “make[s] clear that [MedCo] and ICS entered into an agreement to sell and purchase the product” since it includes “a statement that The Medicines Company ‘now desire[d] to sell the Product’ to ICS and ISC ‘desire[d] to purchase and distribute the Product”, “the purchase schedule”, “and the passage of title from [MedCo] to ICS”. MedCo unsuccessfully argued the agreement is not an offer for sale because it permits MedCo “to reject all purchase orders submitted by ICS” (e.g., Group One (FC 2001) and Linear Tech. (FC 2001) “are not analogous to this case” since “[i]n both cases, the patent owner marketed the product but never reached any sale agreement” (there was no sale) and MedCo was “required…to use ‘commercially reasonable efforts’ to fill the purchase orders” (UCC § 2-306(2))). The FC panel analogized this case to Helsinn (FC 2017) in which the agreement “obligated Helsinn to meet the purchase orders” “[e]ven though the orders were subject to written acceptance and confirmation” and Enzo (FC 2005) in which “a contractual provision concerning the supply ‘of worldwide requirements at reasonable times and prices…constitutes an offer to sell that has been accepted” without “dictat[ing] the amount of product to be sold” (as here which included, e.g., “the purchase price, a weekly purchase schedule, and a requirement that [MedCo] fill ICS’s orders unless commercially unfeasible” (also referring to Medicines I in which “Ben Venue sold contract manufacturing services-not the patented invention”; In re Caveney, FC 1985 (“the on-sale bar does not exempt commercial agreements between a patentee and its supplier or distributor”)). While the FC panel also agreed with the DC’s conclusion that “the invention was ready for patenting before the critical date”, it reversed the DC’s decision that the distribution agreement was not an offer for sale.