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SIGMA-TAU INDUSTRIE FARMACEUTICHE RIUNITE v. LONZA

July 28, 1999

SIGMA-TAU INDUSTRIE FARMACEUTICHE RIUNITE, S.P.A. AND BIOSINT, S.P.A., PLAINTIFFS,
v.
LONZA, LTD., DEFENDANT.



The opinion of the court was delivered by: Joyce Hens Green, District Judge.

  MEMORANDUM OPINION AND ORDER

Plaintiffs, Sigma-Tau Industrie Farmaceutiche Riunite, S.p.A. and its subsidiary Biosint, S.p.A. (collectively "Sigma-Tau"), commenced this action against defendant, Lonza, Ltd. ("Lonza"), for a declaratory judgment of non-infringement and invalidity of United States Patent No. 5,073,376 ("'376 patent" or "Lonza patent"). Currently pending are: (1) plaintiffs' motion for summary judgment on the ground that the '376 patent is unenforceable for inequitable conduct; (2) plaintiffs' motion for summary judgment on the ground that the '376 patent is invalid for failure to disclose the best mode; and (3) plaintiffs' consolidated motion for summary judgment on the grounds that the '376 patent is invalid under 35 U.S.C. § 102(b) and (e).*fn1 Upon consideration of the entire record in this matter, and for the reasons discussed below, all of the summary judgment motions are denied.*fn2

I. Introduction

On December 17, 1991 the United States Patent and Trademark Office ("PTO") granted the '376 patent to Willibald Kohl and Thomas Scholl. Defendant Lonza is the named assignee. The '376 patent involves a preparation for oral application of a compound known as L-carnitine L-tartrate ("LCLT"). LCLT is "the salt of L-carnitine with L-tartaric acid in the molar ratio of 2:1." Lonza patent at col. 1, lines 51-52. L-carnitine is generally used as a food supplement by athletes for energy and muscle development and as a therapeutic medicine for treatment of metabolic diseases. However, L-carnitine is highly hygroscopic,*fn3 and products containing L-carnitine normally have to be "produced with the exclusion of moisture and must be packaged hermetically and individually, since they would begin to liquefy in a short time even with the normal moisture in the air." Lonza patent at col. 1, lines 35-39. LCLT, on the other hand, is less hygroscopic than L-carnitine and, "at normal air moisture (≤ 60 percent relative humidity) is stable in storage and can be processed without special precautions." Lonza patent at col. 1, lines 54-57.

II. Inequitable Conduct Motion

Sigma-Tau has filed a motion for summary judgment on the ground that the '376 patent is unenforceable because of inequitable conduct committed by individuals involved in the prosecution of the patent (collectively "applicants"). Specifically, Sigma-Tau alleges the applicants misled the PTO by withholding contradictory test data, by failing to disclose that crystal size affects hygroscopicity, and by failing to disclose test results showing that other known salts of L-carnitine were less hygroscopic than LCLT.

A. Background

The application for the '376 patent was filed on March 27, 1990. On July 3, 1990, the PTO denied the application, stating the invention was obvious in light of Murakami's prior art which combined L-carnitine with other salts for use in powder, tablets and capsules. See Mot. for Summ.J. Exh. B-5.*fn4 The applicants responded to the PTO by stating that Murakami's prior art is a hygroscopic form of L-carnitine that must be "hermetically and individually" packaged, while LCLT, on the contrary, is a "non-hygroscopic and odorless form of L-carnitine, which contains no physiologically unsafe additives . . . [and] which can be easily processed." See id. The applicants further emphasized it was surprising and unexpected that LCLT lacked the hygroscopic property found in L-carnitine. See id.

Included with the applicants' response to the PTO was a declaration from Willibald Kohl, a co-inventor ("Kohl"). Kohl advised the PTO that testing of LCLT revealed no water absorption in a 24-hour period in 32% humidity (L-carnitine revealed 12.3% water absorption under the same conditions), and 0.1% water absorption at 66% humidity (L-carnitine absorbed 67.7%). See id. at Exh. B-8. Kohl further noted that orange-flavored LCLT tablets containing fructose*fn5 did not absorb any water after ten days at 56% relative humidity, and peppermint-flavored LCLT tablets containing mannitol*fn6 "yielded stable tablets capable of being stored."*fn7 See id.

On October 24, 1990, the PTO again rejected the '376 patent application on the basis that the applicants "failed to show the criticality of the [LCLT] formulation with regard to nonhygroscopicity in comparison with other L-carnitine salts." Mot. for Summ.J. Exh. B-10. The rejection was based on the Cavazza patent '449, which claims the parenteral*fn8 or oral use of L-carnitine "or a pharmaceutically acceptable salt thereof" to increase the level of high density lipoprotein for vascular development. See Kohl Decl. Exh. 11. The Cavazza patent does not name any particular "pharmaceutically acceptable salts" and does not propose a non-hygroscopic version of L-carnitine. The PTO also noted that no data was provided by the applicants demonstrating that other L-carnitine salts did not possess non-hygroscopic properties similar to LCLT. See Mot. for Summ.J. Exh. B-10.

The applicants, in response to this second rejection by the PTO, submitted an amendment to the patent application. The applicants first noted that the Cavazza '449 patent does not teach a non-hygroscopic form of L-carnitine. The applicants next pointed to Cavazza patent '039, which discusses the "surprising and unexpected" finding that L-carnitine combined with certain L-carnitine acid salts were non-hygroscopic. See Mot. for Summ.J. Exh. B-14 at 8. The applicants noted that Cavazza patent '039 teaches it is not obvious to one ordinarily skilled in the art that any form of L-carnitine would be non-hygroscopic. Thus, the applicants argued, it is equally surprising and unexpected that LCLT would be non-hygroscopic. See id. 8-10. The applicants further pointed out that the Cavazza '039 patent "is limited to L-carnitine acid salts (and alkanoyl L-carnitine acid salts)" and that LCLT "is not an acid salt, having 2 moles of L-carnitine per mole of L-tartaric acid." See id. at 9. As a result, "different properties would be expected." See id. at 10. And, while LCLT is acceptable for use in "health food or sport nutrition," the properties in the Cavazza '039 patent are not so acceptable in light of their toxicity and harmfulness. See id. at 11.

Nonetheless, the patent applicants, "in order to further evaluate Patent '039," attempted to compare the hygroscopicity of LCLT with that of citric and lactic acid (two salts mentioned in the Cavazza patent), which are the two closest "relatives" of the tartaric acid used in LCLT. See id. at 12. These tests were inconclusive because it was impossible to obtain the materials in solid form to test hygroscopicity. See id.

After several additional amendments not at issue here, the patent for LCLT was ultimately granted by the PTO on December 17, 1991. Sigma-Tau argues the patent should be invalidated on the basis that the applicants misled the PTO by failing to give the PTO information tending to contradict the hygroscopicity findings of LCLT, by failing to advise the PTO that crystal size affects hygroscopicity, and by failing to provide data comparing the hygroscopicity of LCLT to that of other L-carnitine products.

B. Legal Standard

"Inequitable conduct includes affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive." Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed.Cir. 1995). "Information is material when there is a substantial likelihood that a reasonable patent examiner would have considered the information important in deciding whether to allow the application to issue as a patent." Id. at 1179. The elements of materiality and intent to deceive must be established by clear and convincing evidence. See ATD Corp. v. Lydall, Inc., 159 F.3d 534, 546 (Fed.Cir. 1998); LaBounty Mfg., Inc. v. United States Int'l Trade Com'n, 958 F.2d 1066, 1070 (Fed.Cir. 1992). The Court must look to all the surrounding facts and circumstances to decide "whether the [patent] applicant's conduct is so culpable that the patent should not be enforced." Molins, 48 F.3d at 1178; see also LaBounty, 958 F.2d at 1070.

Because a finding of inequitable conduct requires the Court to determine if the patent applicants had an intent to deceive, summary judgment, while available, is often not appropriate. See ATD Corp., 159 F.3d at 547 ("Although the premises of inequitable conduct require findings based on all the evidence, a procedure that may preclude summary determination, a motion for summary judgment may be granted when, drawing all reasonable factual inferences in favor of the non-movant, the evidence is such that the non-movant can not prevail.") (citations omitted); Paragon Podiatry Lab., Inc. v. KLM Laboratories, 984 F.2d 1182, 1190 (Fed.Cir. 1993) ("While our precedent urges caution in the grant of summary judgment respecting a defense of inequitable conduct, summary judgment is not foreclosed."); KangaROOS U.S.A., Inc. v. Caldor, Inc., 778 F.2d 1571, 1577 (Fed.Cir. 1985) (a finding of intent in equitable conduct cases requires the "fact finder to evaluate all the facts and circumstances in each case" and, as such, is "rarely enabled in summary proceedings").

In deciding whether to grant or deny summary judgment, the Court

  must decide whether the evidence respecting culpable
  intent makes the fact reasonably inferable either
  way, or whether the evidence is so one-sided that the
  factual issue of intent may be decided as a matter of
  law. And, in looking to the record for evidence of a
  genuine issue respecting intent to deceive the PTO,
  all of the circumstances, including those indicative
  of good faith, must be considered. However, merely
  conclusory statements or completely insupportable,
  specious, or conflicting explanations or excuses will
  not suffice to raise a genuine issue of fact.

Paragon Podiatry Lab., 984 F.2d at 1190 (citations omitted).

C. Inconsistent Test Results

Applicable Facts

Relying on a report prepared for Lonza on June 14, 1989 by D. Putzas ("Putzas report"), Sigma-Tau argues the patent applicants failed to advise the PTO of contradictory test results concerning the hygroscopicity of LCLT that the applicants knew existed prior to applying for the patent. Specifically, Sigma-Tau claims two tests in the Putzas report directly contradict Lonza's findings concerning water absorption. The first test revealed that LCLT combined with fructose maintained 6.87% water absorption after one day at 56% humidity and 21.49% water absorption after one day at 66% humidity. See id. at Mot. for Summ.J. Exh. C at 009664. The second test revealed that LCLT combined with mannitol maintained 0.42% water absorption after ten days at 56% humidity and 13.22% water absorption after ten days at 66% humidity. See id.

Lonza claims these test results are not contradictory and, even if they were, there remains a factual dispute as to whether non-disclosure to the PTO rises to the level of materiality and intent necessary to invalidate a patent for inequitable conduct. Lonza stresses the PTO only considered whether LCLT, not LCLT combined with sugars, was non-hygroscopic. See Marsh Decl. at ¶ 9. Thus, Lonza contends it was not necessary for the applicants to disclose the information concerning the fructose and mannitol results. Moreover, Lonza argues that after accounting for the confusion in the fructose and mannitol charts, the results of the Putzas report are consistent with the information contained in the patent application.*fn9

Kohl advised the PTO in his declaration submitted with the patent application, which information is also contained in the Lonza patent itself (assuming the correction for the fructose/mannitol error), that LCLT mixed with mannitol "did not take any water even after ten days" when stored "at a relative humidity of 56%." See Mot. for Summ.J.Exh. B-8 at 4. Kohl further stated that LCLT mixed with fructose (again assuming a correction for the fructose/mannitol error) "yielded stable tablets capable of being stored, while tablets on the basis of L-carnitine, after storage for one week, formed a sticky mass because of water absorption." See id. at 5.

The Putzas report concludes that at 56% humidity, all the tablets containing pure L-carnitine absorbed identical quantities of moisture regardless of whether they contained fructose or mannitol. See Mot. for Summ.J.Exh. C at 009658. The tablets containing LCLT and mannitol absorbed almost no water at 56% humidity. See id. at 009659. The tablets containing LCLT and fructose absorbed almost no water at 32% humidity, absorbed some water at 44% humidity, and "at 56% relative humidity, the water absorption of the tablets containing L-carnitine L-tartrate and fructose is almost equal to that of the tablets containing L-carnitine." See id. (emphasis added). And, at 66% humidity, "it practically no longer matters whether L-carnitine or [LCLT] is present" in the fructose mixture. See id. The report concludes that at "up to 56% relative humidity, [LCLT with fructose] is still much less hygroscopic than untreated carnitine." See id. at 009660.

Discussion

The parties dispute whether a reasonable patent examiner would have considered the information contained in the Putzas report material to the investigation of the '376 patent. The abstract of the '376 patent states its purpose as producing a form of L-carnitine that is suitable for oral administration, is non-hygroscopic, and has better storage capacity. The object of the patented invention "is to make available a nonhygroscopic and odorless form of L-carnitine, which contains no physiologically unsafe additives and which is preferably suitable in particular for producing tablets or capsules." See Lonza patent at col. 1, lines 45-48. The applicants disclose as examples "explaining the execution of the invention," the results of the mannitol and fructose tests. See id. at col. 2, lines 24-25. According to Kohl, both of the disclosed test results came from the Putzas Report. See Kohl Decl. at ¶ 14. Both of these tests support the proposition that LCLT when combined with either mannitol or fructose can be stored without special precautions at normal air moisture of 60% humidity or less. See id. at col. 1, lines 54-55; col. 2, lines 15-20; col. 3, lines 40-44.

The Putzas report is not necessarily inconsistent with the information provided by the applicants. With respect to the mannitol test, the Putzas report confirms, at least with respect to the 56% humidity level, the patent's claim that LCLT with mannitol is non-hygroscopic. With respect to the fructose test, the Putzas report confirms that LCLT with fructose is less hygroscopic than L-carnitine at levels of 56% humidity and under. The Putzas report says nothing about the patent's claim that LCLT with fructose is capable of being stored without special precautions.

It is possible that a reasonable patent examiner would find the additional information from the Putzas report to be simply cumulative of that already contained in the Lonza patent and the declarations submitted by Kohl. See Baxter Int'l v. McGaw, Inc., 149 F.3d 1321, 1328 (Fed. Cir. 1998) ("A patentee need not cite an otherwise material reference to the PTO if that reference is merely cumulative or is less material than other references already before the examiner."); Molins, 48 F.3d at 1179 ("If the information allegedly withheld is not as pertinent as that considered by the examiner, or is merely cumulative to that considered by the examiner, such information is not material."). As Lonza argues,

  Neither Lonza nor the Examiner considered the
  unexpected relative non-hygroscopicity of [LCLT]
  mixed with sugars (mannitol or fructose) to be the
  novelty of the '376 patent. Thus, the likelihood is
  that a reasonable examiner would not have considered
  the omitted hygroscopicity data . . . to be important
  in deciding

  whether to allow the . . . application to issue as a
  patent.

Opp. to Mot. for Summ.J. at 18.

As a result, summary judgment is inappropriate because a reasonable fact finder could find for the non-moving party on the issue of whether a reasonable patent examiner would have considered the Putzas report material in deciding whether to allow the '376 patent. See Anderson v. Liberty Lobby, 477 U.S. 242, 247-248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

And, even if the Putzas report was material, summary judgment would be inappropriate on the issue of intent. As noted above, the information contained in the Putzas report is not necessarily contradictory and, in some cases, may even be cumulative. Sigma-Tau makes no specific argument concerning intent, stating only that the applicants knew of the existence of the Putzas report and failed to disclose it. However, it does appear from the record that portions of the Putzas Report, or at least information extracted from the Putzas Report, were made known to the PTO. It is essential in a case such as this, where intent is a necessary element of the claim, for the fact finder to have the opportunity to evaluate the credibility of the parties in connection with the evidence provided in order to meet the clear and convincing evidence standard.

D. Crystal Size

Sigma-Tau claims the patent applicants misled the PTO when they failed to notify the PTO that the hygroscopicity of LCLT is affected by the size of its crystal. Lonza argues this fact is immaterial because it is commonly known that crystal size affects hygroscopicity and, in any event, the difference is negligible. According to Lonza, a reasonable patent examiner would not have considered crystal size important because crystal size has no effect on the "problem the '376 patent was seeking to solve, i.e., the problem that L-carnitine is highly hygroscopic and unsuitable for processing into dosage forms for enteral applications." See Kohl Dec. at ¶ 8-9.

In his declaration to the PTO, Kohl advised that "LCLT forms a crystalline powder which can be easily processed and is particularly suitable for processing with rapidly running machines, since it does not tend to stick together or become lumpy." Mot. for Summ.J.Exh. B-8. In his deposition, Kohl advised that he first became aware crystal size could have an impact on hygroscopicity in 1988. However, Kohl did not state the extent to which crystal size affects hygroscopicity or whether it was relevant to the '376 patent. Kohl now states the effect of crystal size on the patent is "negligible." Kohl Decl. at ¶ 9.*fn10 There remains a factual dispute as to whether these findings are indeed negligible, and whether the crystal size would have an impact on the '376 patent.

There is also some dispute as to whether the applicants made the unqualified assertion that LCLT is non-hygroscopic. According to Sigma-Tau, the unqualified assertion would necessarily encompass crystal size. In other words, if Lonza claimed that LCLT is completely non-hygroscopic, failure to disclose that some LCLT (depending on crystal size) may be hygroscopic was material and misleading. There is some question, however, as to whether Lonza did in fact make that unqualified assertion and whether the PTO believed it to be unqualified. For example, in one document, the PTO noted that the experimental data provided by Kohl shows that LCLT "displays less water absorption than the L-carnitine free base." Mot. for Summ.J. at Exh. B-10. It is possible that the PTO did not understand the patent as being completely non-hygroscopic, just less hygroscopic. Thus, there remains a factual issue as to whether the patent applicants intended to show that LCLT was completely non-hygroscopic, without qualification, or that it was less hygroscopic than L-carnitine and capable of being packaged for its intended oral use. As a result, it is unclear to what extent, if any, the crystal size affects the Lonza patent's claims and, as a consequence, whether a reasonable patent examiner would have found crystal size material.

Moreover, Sigma-Tau fails to provide specific evidence of intent to deceive. While Kohl acknowledged being aware in 1988 that crystal size affects hygroscopicity, this in and of itself does not necessarily prove either that crystal size was material or that information concerning crystal size was intentionally withheld from the PTO.

E. Hygroscopicity in Comparison to Other ...


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