HZNP Medicines LLC, Horizon Pharma USA, Inc. v. Actavis Laboratories UT, Inc.

Before Prost, Newman, and Reyna. Appeal from the District Court for the District of New Jersey.

Summary: Claims using “consisting essentially of” to define an open-ended list of ingredients are indefinite, where the basic and novel property of the invention introduces an improper zone of uncertainty.

HZNP and Horizon (“Horizon”) owned several patents related to treatment of osteoarthritis with diclofenac. Actavis filed an ANDA for a generic version of Horizon’s PENNSAID 2% product. Horizon sued for infringement. The district court invalidated many claims based on indefiniteness of several terms. The Court also found Actavis’s labelling did not induce infringement of method claims that required: (1) applying the claimed product, (2) waiting for it to dry, and (3) applying a second product. Only one asserted claim remained for trial, and Actavis stipulated to infringement if the claim was found nonobvious. The district court found that Actavis did not carry its burden to prove obviousness, and enjoined Actavis until patent expiration. Horizon appealed the indefiniteness and noninfringement determinations, while Actavis cross-appealed the finding of nonobviousness.

The Federal Circuit affirmed that claims reciting formulations “consisting essentially of” various ingredients were indefinite. Although the language “consisting essentially of” requires listed components, it also permits inclusion of additional non-listed components that do not materially affect the basic and novel properties of the invention. The court held that when the patentee chooses to use “consisting essentially of,” the underlying basic and novel properties of that invention must be sufficiently definite.

The Federal Circuit also affirmed that the basic and novel property of “better drying time,” recited in the specification, was indefinite. This language did not appear in any claim. But by using the claim term “consisting essentially of,” the inventor incorporated into the claim scope an evaluation of “better drying time.” The Court held that because a POSITA would not know under what standard to evaluate drying times, the basic and novel property of “better drying time” was indefinite.

The Federal Circuit further affirmed that Actavis’s ANDA product labelling did not induce infringement. Actavis’s labelling merely instructed users to wait until the product was dry before doing anything like applying sunscreen, insect repellant, or covering with clothing. But the labelling did not instruct, promote, or require that users apply a second product.

Finally, the Federal Circuit rejected Actavis’s cross-appeal that challenged the district court’s holding that the claims were not obvious. The pharmaceutical components in this case interacted in unpredictable and unexpected ways, precluding a conclusion that the PENNSAID 2% formulation was created through routine optimization of the prior art.

Judge Newman dissented only on the holdings of indefiniteness and noninfringement. She explained that reciting “consisting essentially of” does not incorporate into the claim scope an evaluation of the basic and novel properties of an invention. She believed that where the properties of a composition are sufficiently described in the specification, claiming a compound “consisting essentially of” certain ingredients does not render the claim indefinite. She also explained her view that Actavis’s label instructs users to perform the patented method.

Editor: Paul Stewart

Written by: Eric R. Malmgren & Mark Kachner

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