Senju Pharma. v. Apotex: Applicability of Res Judicata (Claim Preclusion) for Second Suit of Patent Amended in Reexam

Category: Civil Procedure 
 By: Jesus Hernandez, Blog Editor/Contributor 
TitleSenju Pharma. Co. v. Apotex Inc., No. 2013-1027 (Fed. Cir. March 31, 2014).
IssueThis is a patent case calling on us to consider the application of claim preclusion doctrine (res judicata) to a second suit on the same patent based on amended claims resulting from a reexamination of the patent.
Senju Pharma. Co. at *2.
HoldingWe 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. This applies whether the judgment in the original suit was based on invalidity of the claims or simply on non-infringement. We conclude […] that the claims in this case that emerged from reexamination do not create a new cause of action that did not exist before.
Id. at *15.
Procedural HistoryPlaintiffs- Appellants Senju Pharmaceutical Co., Ltd., Kyorin Phar- maceutical Co., Ltd., and Allergan, Inc. (collectively referred to as “Senju”) filed suit in the United States District Court for the District of Delaware against De- fendants-Appellees Apotex Inc. and Apotex Corp. (“Apo- tex”). Plaintiffs alleged infringement of certain claims of Senju’s reexamined U.S. Patent No. 6,333,045 (the ’045 patent). In response, Apotex filed a motion to dismiss Senju’s lawsuit. Apotex argued that Senju had asserted the same ’045 patent against Apotex in a previous infringement action (the “first action”) prior to the ’045 patent’s reex- amination, and therefore Senju’s subsequent action for infringement of the reexamined ’045 patent (the “second action”) was barred by the doctrine of claim preclusion. The district court agreed and granted Apotex’s motion to dismiss. Senju now appeals.
Senju Pharma. Co. at *2.
Legal Reasoning (Plager, Newman)
Legal Standard: Claim PreclusionSenju’s appeal requires us to decide whether Senju’s second action is barred by the judicial doctrine now gen- erally known as claim preclusion, earlier known as res judicata and still referred to by that name. “[U]nder the doctrine of res judicata, a judgment ‘on the merits’ in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action.” Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 326 (1955).
Senju Pharma. Co. at *5.
Inquiries under Third CircuitUnder Third Circuit law, the home circuit of the district court in this case, claim preclusion principles require: “(1) a final judgment on the merits in a prior suit involving[ ] (2) the same parties or their [privies]; and (3) a subsequent suit based on the same cause of action.” CoreStates Bank, N.A. v. Huls Am., Inc., 176 F.3d 187, 194 (3d Cir. 1999). In this case, both parties agree that Senju meets the first two of the three requirements for claim preclusion—that is, Senju’s first action resulted in a final judgment on the merits, and both the first and second actions involved the same parties. The parties disagree, however, regarding the third requirement—whether Senju’s first and second actions were based on the same cause of action. That is the central issue of this appeal.
Id. at *6.
[1] Cause of Action Analysis: Same Product Litigated in both cases
Legal Standard One of the areas of factual overlap that we consider in a patent case involving claim preclusion is the overlap of the product or process accused in the instant action with the product or process accused in the prior action. If the products or processes are essentially the same, then claim preclusion may apply. Acumed, 525 F.3d at 1324 (stating that “claim preclusion does not apply unless the accused device in the action before the court is ‘essentially the same’ as the accused device in a prior action between the parties that was resolved by a judgment on the mer its”) (quoting Foster v. Hallco Mfg. Co., 947 F.2d 469, 479– 80 (Fed. Cir. 1991)).
Senju Pharma. Co. at *7-8.
ANDA as ProductIn a case such as this, the ‘product’ is the drug de- scribed in the ANDA. […] The drug described in an ANDA can be viewed as the ‘product’ for claim preclusion purposes even though the accused infringer has not yet made, used, or sold the drug. This legal fiction—the fiction of a ‘product’ that may never have been made, used, or sold in the United States by the alleged infringer—exists because the filing of an ANDA creates a statutory act of infringement. […]
Id. at *8-9 (internal citations omitted).
Same ProductSenju alleged infringement based on Apotex’s ANDA No. 79-084 and its described Gatifloxacin ophthalmic solution. […] In its second suit, this case, Senju requested a declaratory judgment of infringement based on Apotex’s submission of the same ANDA (No. 79-084). […] Thus, both actions involve the same Gatifloxacin ophthalmic solution described in ANDA No. 79-084. Because the product in the second action completely overlaps with the product in the first action, there is on that basis no new cause of action.
Id. at *9.
[2] Cause of Action Analysis: Same Product Litigated in both cases
Legal StandardWe also consider whether the same patents are involved in both suits. Ordinarily, “[e]ach patent asserted raises an independent and distinct cause of action.” Kearns v. Gen. Motors Corp., 94 F.3d 1553, 1555 (Fed. Cir. 1996). Claim preclusion will generally apply when a patentee seeks to assert the same patent against the same party and the same subject matter. Id. at 1557 (concluding that five patents already asserted against the same party in a previous action were properly dismissed on res judicata grounds) […].
Senju Pharma. Co. at *8 (some internal citations omitted).
Distinguishing Reexam and ReissueIn this case we reach 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. We reach this conclusion because a so-called “reexamined patent” is the original patent; it has just been examined another time as indicated in its reexamination certificate. [...] Reexamination does not involve the filing of a new patent application nor the issuance of a new patent.
Id. at *13.
Amendments During Reexam are non-broadeningThe reexamination process does permit some amendment of the patent and its claims, but any amendment that occurs during reexamination is statutorily constrained. For example, amendments to the disclosure cannot introduce new matter. […] Any change to the original patent is further constrained by 35 U.S.C. § 305, which states that “[n]o proposed amended or new claim enlarging the scope of a claim of the patent will be permitted in a reexamination proceeding under this chapter.” We have strictly interpreted § 305 to prohibit any broadening amendments. The reexamined claim cannot be broader in any respect, even if it is narrowed in other respects. […] Therefore, while reexamination can make certain changes in the patent, such changes are strictly circumscribed by the original patent’s disclosure and claim scope. product or process which would not have infringed the original claims. Id. Put another way, because the patent right is a right to exclude whose outer boundary is defined by the scope of the patent’s claims, as explained in Aspex, reexamination does not provide larger claim scope to a patentee than the patentee had under the original patent claims.
Id. at *14 (internal citations omitted).
Reexamined App. with Amendments May Not Raise new Cause of ActionAs a result, a reexamined patent claim cannot contain within its scope any product or process which would not have infringed the original claims. Id. Put another way, because the patent right is a right to exclude whose outer boundary is defined by the scope of the patent’s claims, as explained in Aspex, reexamination does not provide larger claim scope to a patentee than the patentee had under the original patent claims.
Id. at *14.
 The judgment of the district court is affirmed.
Senju Pharma. Co. at *16.
O’MALLEY, Circuit Judge, dissenting. Senju Pharma., O’Malley Op., at *1.
Grounds for Dissent, generallyDetermining whether the ’045 patent’s reexamined claims actually provided Senju new rights requires comparing the reexamined claims with the patent’s original claims. Only if the reexamined claims are substantially the same as Senju’s original claims can we conclude that the reexamined claims cover rights that could have been asserted in the first action against Apotex.1 Because the district court failed to conduct this necessary comparison, I would vacate its judgment and remand for further analysis. Accordingly, I respectfully dissent.
Senju Pharma., O’Malley Op., at *2-3.
Validity Analysis In first Case Should Be Treated Different from an Infringement AnalysisThe majority, however, does not consider how issues of validity affect the preclusion analysis. With respect to infringement, a product that does not infringe a broad original claim will, in every instance, not infringe a narrower reexamined claim (or a reexamined claim of identical scope to an original claim). But, the same analysis does not apply to validity determinations. Here, Senju’s original claims were invalidated, meaning that they provided Senju with no patent rights. […] This does not mean that Senju necessarily had no patent rights under its reexamined claims solely because they could not be broader in scope than Senju’s original claims. During reexamination of the ’045 patent, the United States Patent and Trademark Office (“PTO”) considered the prior art and arguments that led the district court to invalidate Senju’s original asserted claims, as well as the district court’s opinion holding those claims invalid. […] The PTO agreed with the district court that the original claims were obvious. […] Senju, however, narrowed the scope of its claims during reexamination, and the PTO ultimately determined that these narrowed claims were patentable. […] The reexamined claims that issued were presumptively valid and, unlike the invalid original claims, may have provided Senju with actionable patent rights (i.e., a new cause of action).
Id. at *4-5 (internal citations omitted).
Image Attribution Statement: Jesus Hernandez, “Edits,” available with permission of author for purposes of the blog.
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