Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC

Case: 19-1924    Document: 56    Page: 1   Filed: 05/08/2020




   United States Court of Appeals
       for the Federal Circuit
                  ______________________

         EAGLE PHARMACEUTICALS INC.,
                Plaintiff-Appellant

                            v.

                SLAYBACK PHARMA LLC,
                    Defendant-Appellee
                  ______________________

                        2019-1924
                  ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:18-cv-01953-CFC, United
 States District Judge Colm F. Connolly.
                   ______________________

                   Decided: May 8, 2020
                  ______________________

    DANIEL BROWN, Latham & Watkins LLP, New York,
 NY, argued for plaintiff-appellant. Also represented by
 KENNETH G. SCHULER, MARC NATHAN ZUBICK, Chicago, IL;
 GREGORY SOBOLSKI, San Francisco, CA; GABRIEL BELL,
 Washington, DC.

    CONSTANCE HUTTNER, Budd Larner, P.C., Short Hills,
 NJ, argued for defendant-appellee. Also represented by
 JAMES BARABAS, BETH C. FINKELSTEIN, ANDREW J. MILLER,
 Windels Marx Lane & Mittendorf LLP, Madison, NJ.
                 ______________________
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 2       EAGLE PHARMACEUTICALS INC.   v. SLAYBACK PHARMA LLC



     Before O’MALLEY, REYNA, and CHEN, Circuit Judges.
 REYNA, Circuit Judge.
      Eagle Pharmaceuticals appeals a district court judg-
 ment of non-infringement on the pleadings. Eagle sued
 Slayback Pharma LLC for infringing four patents covering
 Eagle’s brand name bendamustine pharmaceutical prod-
 uct. Eagle argues that the district court committed two er-
 rors when it concluded that the dedication-disclosure
 doctrine barred Eagle’s claim of infringement under the
 doctrine of equivalents. First, Eagle contends that the dis-
 trict court erred when it concluded that the asserted pa-
 tents disclose, but do not claim, ethanol—and therefore
 dedicated ethanol to the public. Second, Eagle contends
 that the district court improperly applied the dedication-
 disclosure doctrine at the pleadings stage, in the presence
 of factual disputes and without drawing all inferences in
 Eagle’s favor. Because we find no error in the district
 court’s judgment on the pleadings, we affirm.
                         BACKGROUND
     Eagle Pharmaceuticals Inc. (“Eagle”) filed suit in the
 U.S. District Court for the District of Delaware accusing
 Slayback Pharma LLC (“Slayback”) of infringing four pa-
 tents under the doctrine of equivalents. 1 Eagle’s infringe-
 ment claims stem from Slayback’s new drug application
 (“NDA”) for a generic version of Eagle’s branded benda-
 mustine product, BELRAPZO®. J.A. 105. Bendamustine
 is used to treat chronic lymphocytic leukemia and indolent
 B-cell non-Hodgkin lymphoma.
     For purposes of this appeal, Eagle’s four asserted pa-
 tents share essentially the same written description and all
 independent claims recite essentially the same limitations.



     1  Eagle asserted U.S. Patent Nos. 9,265,831;
 9,572,796; 9,572,797; and 10,010,533.
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 EAGLE PHARMACEUTICALS INC.   v. SLAYBACK PHARMA LLC        3



 The parties agree that Claim 1 of 

U.S. Patent No. 9,572,796

 (“the ’796 patent”), shown below in relevant part, is repre-
 sentative. 2
     1. A non-aqueous liquid composition comprising:
         bendamustine, or a pharmaceutically accepta-
            ble salt thereof;
         a pharmaceutically acceptable fluid com-
            prising a mixture of polyethylene glycol and
            propylene glycol, wherein the ratio of poly-
            ethylene glycol to propylene glycol in the
            pharmaceutically acceptable fluid is from
            about 95:5 to about 50:50; and
         a stabilizing amount of an antioxidant;
         ....
 ’796 patent at col. 13 ll. 22–35 (emphasis added).
      Slayback conceded that its generic product literally in-
 fringes all claim limitations except for the “pharmaceuti-
 cally acceptable fluid” limitation. Eagle asserted that
 Slayback’s product infringes the “pharmaceutically ac-
 ceptable fluid” limitation under the doctrine of equivalents.
 Specifically, Eagle asserted that the ethanol in Slayback’s
 product is insubstantially different from the propylene gly-
 col (“PG”) in the claimed composition.
     On January 4, 2019, Slayback moved for a judgment of
 non-infringement on the pleadings under Federal Rule of
 Civil Procedure 12(c). Slayback argued that the disclosure-
 dedication doctrine barred Eagle’s claim of infringement
 under the doctrine of equivalents because the asserted pa-
 tents disclose, but do not claim, ethanol as an alternative
 solvent to PG.



     2   All citations are to 

U.S. Patent No. 9,572,796

.
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 4      EAGLE PHARMACEUTICALS INC.     v. SLAYBACK PHARMA LLC



      The specification expressly and repeatedly identifies
 “ethanol” as an alternative “pharmaceutically acceptable
 fluid” to PG. ’796 patent at col. 1 ll. 60–64, col. 4 ll. 34–42,
 43–48, col. 5 ll. 25–35, 38–50, col. 6 ll. 3–14, 31–65, col. 7
 ll. 1–8. For example, the Summary of the Invention dis-
 closes that:
         In other aspects of the invention, the benda-
         mustine-containing compositions include a) a
         pharmaceutically acceptable fluid which
         contains one or more of propylene glycol, etha-
         nol, polyethylene glycol, benzyl alcohol and
         glycofurol, and b) a stabilizing amount of a
         chloride salt.
 

Id.

 at col. 1 ll. 60–64 (emphasis added). Likewise, the spec-
 ification teaches that:
         Preferred pharmaceutically acceptable
         fluids include PG, PEG or ethanol in this em-
         bodiment of the invention.
 

Id.

 at col. 4 ll. 44–46 (emphasis added).
     Eagle opposed Slayback’s motion, arguing that the as-
 serted patents do not disclose ethanol as an alternative to
 PG for the claimed embodiment that contains an antioxi-
 dant. J.A. 238. Eagle asserted that the specification only
 discloses ethanol when discussing unclaimed embodiments
 that contain chloride salt. 

Id.

 According to Eagle, a skilled
 artisan would thus “not understand the specification to
 teach ethanol as an alternative to propylene glycol in the
 claimed formulations.” J.A. 234.
     In support of its opposition, Eagle submitted an expert
 declaration from Dr. Mansoor Amiji. Dr. Amiji opined that
 a skilled artisan would understand the specification to dis-
 close three distinct categories of formulations that each
 contain different ingredients and work in different ways.
 Dr. Amiji opined that a skilled artisan “would not view the
 specific ethanol-containing formulations including chloride
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 EAGLE PHARMACEUTICALS INC.    v. SLAYBACK PHARMA LLC        5



 salts as a disclosure that ethanol was specifically identified
 as an alternative to the claim limitation at issue in the as-
 serted claims.” J.A. 260 ¶ 45. Slayback did not submit ev-
 idence to rebut Dr. Amiji’s testimony.
     On May 9, 2019, the district court granted Slayback’s
 motion for judgment of non-infringement on the pleadings.
 The court determined that “[t]he parties have not identi-
 fied a claim construction dispute, and the written descrip-
 tion of the asserted patents unambiguously and repeatedly
 identifies [ethanol] as an alternative to propylene glycol.”
 Eagle Pharm., Inc. v. Slayback Pharma LLC, 

382 F. Supp. 3d 341, 346

 (D. Del. 2019). The court rejected Eagle’s at-
 tempt to “manufacture a factual dispute” and declined to
 consider the expert declaration of Dr. Amiji. 

Id. at 346

, 346
 n.2. The court concluded that it had “sufficient context to
 decide a question of law—i.e., that the disclosure-dedica-
 tion doctrine applies to bar Eagle’s claims for infringement
 under the doctrine of equivalents.” 

Id. at 346

.
     Eagle timely appealed.      We have jurisdiction under
 

28 U.S.C. § 1295

(a)(1).
                           ANALYSIS
     We review the district court’s judgment on the plead-
 ings under the law of the regional circuit, which in this case
 is the Third Circuit. Data Engine Techs. LLC v. Google
 LLC, 

906 F.3d 999, 1007

 (Fed. Cir. 2018). The Third Cir-
 cuit reviews the grant of judgment on the pleadings de
 novo, “accept[ing] all of the allegations in the pleadings of
 the party against whom the motion is addressed as true
 and draw[ing] all reasonable inferences in favor of the non-
 moving party.” 

Id.

 (quoting Allstate Prop. & Cas. Ins. Co.
 v. Squires, 

667 F.3d 388, 390

 (3d Cir. 2012)). In doing so,
 we “disregard rote recitals of the elements of a cause of ac-
 tion, legal conclusions, and mere conclusory statements.”
 James v. City of Wilkes-Barre, 

700 F.3d 675, 679

 (3d Cir.
 2012). Rule 12(c) judgment is appropriate when the mov-
 ing party clearly establishes that there are “no material
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 6      EAGLE PHARMACEUTICALS INC.     v. SLAYBACK PHARMA LLC



 issues of fact, and that he or she is entitled to judgment as
 a matter of law.” DiCarlo v. St. Mary Hospital, 

530 F.3d 255, 259

 (3d Cir. 2008); see FED. R. CIV. P. 12(c).
      Under the doctrine of equivalents, “a product or process
 that does not literally infringe upon the express terms of a
 patent claim may nonetheless be found to infringe if there
 is ‘equivalence’ between the elements of the accused prod-
 uct or process and the claimed elements of the patented in-
 vention.” Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,
 

520 U.S. 17, 21, 29

 (1997). The doctrine of equivalents pre-
 vents “the unscrupulous copyist [from] mak[ing] unim-
 portant and insubstantial changes and substitutions in the
 patent which, though adding nothing, would be enough to
 take the copied matter outside the claim, and hence outside
 the reach of law.” Graver Tank & Mfg. Co. v. Linde Air
 Prods. Co., 

339 U.S. 605, 607

 (1950). The central question
 for infringement under the doctrine of equivalents is
 whether “the accused product or process contain[s] ele-
 ments identical or equivalent to each claimed element of
 the patented invention.” Warner-Jenkinson, 

520 U.S. at 40

.
      The disclosure-dedication doctrine bars application of
 the doctrine of equivalents. Johnson & Johnston Assoc. v.
 R.E. Servs., 

285 F.3d 1046, 1054

 (Fed. Cir. 2002) (en banc).
 It states that “when a patent drafter discloses but declines
 to claim subject matter, . . . this action dedicates the un-
 claimed subject matter to the public.” 

Id.

 By preventing a
 patentee from recapturing unclaimed subject matter, the
 disclosure-dedication doctrine reinforces “the primacy of
 the claims in defining the scope of the patentee’s exclusive
 right.” 

Id.

 To determine whether the disclosure-dedication
 doctrine applies in a given case, we ask whether the speci-
 fication discloses unclaimed subject matter with “such
 specificity that one of ordinary skill in the art could identify
 the subject matter that had been disclosed and not
 claimed.” PSC Comput. Prods., Inc. v. Foxconn Int’l, Inc.,
 

355 F.3d 1353, 1360

 (Fed. Cir. 2004). If the court concludes
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 EAGLE PHARMACEUTICALS INC.    v. SLAYBACK PHARMA LLC        7



 that the inventor dedicated an alleged equivalent to the
 public, the patent owner cannot prevail on its doctrine of
 equivalents infringement claim based on that equivalent.
 Maxwell v. J. Baker, Inc., 

86 F.3d 1098, 1108

 (Fed. Cir.
 1996).
     This appeal centers on Eagle’s challenge to the merits
 and procedural aspects of the district court’s application of
 the disclosure-dedication doctrine.
                              A.
     Eagle first challenges the merits of the district court’s
 determination that the disclosure-dedication doctrine bars
 Eagle’s infringement claims under the doctrine of equiva-
 lents. Eagle contends, as it did below, that the disclosure-
 dedication doctrine does not apply because the asserted pa-
 tents do not disclose ethanol as an alternative to PG for the
 claimed embodiment containing an antioxidant.
      Eagle contends that the asserted patents disclose three
 distinct “categories” of bendamustine formulations:
 (i) chloride salt formulations; (ii) antioxidant formulations;
 and (iii) dimethyl sulfoxide (“DMSO”) formulations. Appel-
 lant Br. 20. According to Eagle, a skilled artisan would
 recognize that the three separate categories “have separate
 ingredients[] and work in different ways.” 

Id.

 Eagle as-
 serts that the specification only discloses ethanol as an al-
 ternative to PG when discussing the unclaimed chloride
 salt formulations; it never discloses ethanol as an alterna-
 tive to PG when discussing the claimed antioxidant formu-
 lations. Id. at 4. As a result, Eagle concludes, a “skilled
 artisan would not understand that ethanol . . . is an alter-
 native to PG in the separate, claimed ‘PEG/PG/antioxidant’
 category of formulations.” Id. at 20. We disagree.
     The disclosure-dedication doctrine does not require the
 specification to disclose the allegedly dedicated subject
 matter in an embodiment that exactly matches the claimed
 embodiment. Johnson, 

285 F.3d at 1052

. In Johnson, we
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 8      EAGLE PHARMACEUTICALS INC.      v. SLAYBACK PHARMA LLC



 rejected this embodiment-level approach to the disclosure-
 dedication doctrine and denied the patentee’s attempt to
 avoid dedication by claiming that the disclosure occurred
 in an “alternative [embodiment] distinct from the claimed
 invention.” 

Id.

 Instead, we have held that the disclosure-
 dedication doctrine requires only that the specification dis-
 close the unclaimed matter “as an alternative to the rele-
 vant claim limitation.” Pfizer, Inc. v. Teva Pharm. USA,
 Inc., 

429 F.3d 1364, 1378

 (Fed. Cir. 2005).
      We conclude that the asserted patents disclose ethanol
 as an alternative to PG in the “pharmaceutically accepta-
 ble fluid” claim limitation. The specification repeatedly
 identifies—without qualification—ethanol as an alterna-
 tive pharmaceutically acceptable fluid. ’796 patent at col. 1
 ll. 60–64, col. 4 ll. 34–42, 43–48, col. 5 ll. 25–35, 38–50, col.
 6 ll. 3–14, 31–65, col. 7 ll. 1–8. Aside from the description
 of certain exemplary embodiments, nothing in the specifi-
 cation suggests that these repeated disclosures of ethanol
 are limited to certain formulations, or that they do not ex-
 tend to the claimed formulation.
     Eagle asserts that, in Pfizer, we declined to apply the
 dedication-disclosure doctrine because the alleged alterna-
 tive disclosed in the specification (microcrystalline cellu-
 lose) did not serve the same purpose (preventing
 hydrolysis) as the claimed “saccharide.” 

429 F.3d at 1379

 (concluding that the disclosed microcrystalline cellulose
 “does not appear to relate to the claimed invention”). Eagle
 contends that the chloride salt category of formulations in
 the present case likewise “work[] by a different mecha-
 nism” than the claimed antioxidant formulations, and thus
 a skilled artisan would understand that ethanol does not
 relate to the claimed invention. Appellant Br. 30. We are
 not persuaded.
     In Pfizer, the claim limitation-at-issue recited a specific
 purpose: “a suitable amount of a saccharide to inhibit hy-
 drolysis.” 

429 F.3d at 1373, 1378

 (emphasis added). The
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 EAGLE PHARMACEUTICALS INC.    v. SLAYBACK PHARMA LLC        9



 asserted alternative, microcrystalline cellulose, was dis-
 closed in the specification without any relation to hydroly-
 sis. 

Id.

 As a result, we were “not convinced that one of
 ordinary skill in the art would come to the conclusion that
 the inventors have identified microcrystalline cellulose in
 that formulation as an alternative to a ‘saccharide’ that
 prevents hydrolysis.” 

Id.

     In this case, the claim limitation-at-issue has only one
 stated purpose: that the fluid be “pharmaceutically ac-
 ceptable.” Unlike in Pfizer, the specification here repeat-
 edly discloses ethanol as serving that purpose, i.e., the
 specification expressly discloses ethanol as a “pharmaceu-
 tically acceptable fluid.” E.g., ’796 patent at col. 1 ll. 60–
 64, col. ll. 34–42, 43–48. We therefore hold that the as-
 serted patents dedicated ethanol to the public by disclos-
 ing, but not claiming, ethanol as an alternative to PG in
 the “pharmaceutically acceptable solvent” claim limitation.
 As a result, we affirm the district court on this point.
                              B.
      Eagle also challenges the district court’s judgment on
 procedural grounds. Eagle asserts that, at the time the dis-
 trict court entered judgment of non-infringement on the
 pleadings, a factual dispute existed: whether a skilled ar-
 tisan would understand the specification to disclose etha-
 nol as an alternative to PG in the claimed invention. Eagle
 argues that the district court erred by resolving that fac-
 tual dispute at the pleadings stage without drawing all rea-
 sonable inferences in Eagle’s favor. Appellant Br. 46
 (citing Nalco Co. v. Chem-Mod, LLC, 

883 F.3d 1337, 1349

 (Fed. Cir. 2018)). Specifically, Eagle argues that the dis-
 trict court was required to infer that a “skilled artisan
 would not have understood that ethanol was an alternative
 to PG in the claimed ‘PEG/PG/Antioxidant’ category of for-
 mulations.” Id. at 44. Eagle explains that the district court
 erred by improperly ignoring Dr. Amiji’s declaration, which
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 10     EAGLE PHARMACEUTICALS INC.     v. SLAYBACK PHARMA LLC



 was “the best (and only) evidence of a skilled artisan’s un-
 derstanding of [the] disclosure.” Id. at 45.
      As a preliminary matter, when ruling on a Rule 12(c)
 motion, district courts have discretion to consider evidence
 outside the complaint for purposes of deciding whether to
 accept that evidence and convert the motion into one for
 summary judgment. Kulwicki v. Dawson, 

969 F.2d 1454, 1462

 (3d Cir. 1992); see also 5C WRIGHT & MILLER, FED.
 PRAC. & PROC. CIV. § 1371 (3d ed.) (“As is true of practice
 under Rule 12(b)(6), it is well-settled that it is within the
 district court’s discretion whether to accept extra-pleading
 matter on a motion for judgment on the pleadings and treat
 it as one for summary judgment or to reject it and maintain
 the character of the motion as one under Rule 12(c).”). We
 conclude that the district court did not abuse its discretion
 when it set aside Dr. Amiji’s declaration. The district court
 reviewed Dr. Amiji’s declaration and determined that it
 was merely an “attempt[] to manufacture a factual dis-
 pute.” Eagle, 

382 F. Supp. 3d at 346

. The district court
 also found that the patents themselves provided “sufficient
 context to decide” the legal issue at hand. 

Id.

 Eagle has
 not persuaded us otherwise. In opposing Slayback’s motion
 to dismiss, Eagle conceded that the district court’s “reliance
 on expert testimony would be improper at this preliminary
 [pleadings] stage.” J.A. 233.
     We find no error in the district court’s decision to grant
 judgment of non-infringement on the pleadings. The appli-
 cation of the disclosure-dedication doctrine is a question of
 law. Pfizer, 

429 F.3d at 1378

. Here the district court con-
 cluded that the patents themselves provided “sufficient
 context to decide a question of law, i.e., that the disclosure-
 dedication doctrine applies to bar Eagle’s claims for in-
 fringement under the doctrine of equivalents.” Eagle, 

382 F. Supp. 3d at 346

.
     Expert testimony is not always required for a district
 court to determine how a skilled artisan would understand
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 EAGLE PHARMACEUTICALS INC.   v. SLAYBACK PHARMA LLC       11



 a patent’s disclosure and claimed invention. Union Car-
 bide Corp. v. Am. Can Co., 

724 F.2d 1567, 1573

 (Fed. Cir.
 1984) (stating that a patent’s disclosure may be “easily un-
 derstandable without the need for expert explanatory tes-
 timony”).    For example, in Amgen Inc. v. Coherus
 BioSciences Inc., we held that expert testimony was not
 necessary to understand whether a patent owner “clearly
 and unmistakably surrendered unclaimed [disclosure] dur-
 ing prosecution.” 

931 F.3d 1154, 1160

 (Fed. Cir. 2019) (af-
 firming judgment of non-infringement on the pleadings
 because prosecution history precluded Amgen’s infringe-
 ment allegations based on the doctrine of equivalents). We
 explained that “Amgen’s statements during prosecution,”
 on their face, showed that “a competitor would reasonably
 believe that Amgen surrendered unclaimed salt combina-
 tions” as a matter of law. 

Id.

 (internal quotations omitted).
      Here, we conclude that the only reasonable inference
 that can be made from the patent disclosures is that a
 skilled artisan would understand the patents to disclose
 ethanol as an alternative to the claimed PG. Nothing in
 the record permits us to infer that a skilled artisan “would
 have understood that the patent specification describes dis-
 tinct categories of formulations that contain different in-
 gredients and work in different ways.” Appellant Br. 44.
 As a result, even when viewing the pleadings in the light
 most favorable to Eagle, we conclude there is no material
 issue of fact to resolve and Slayback is entitled to judgment
 in its favor as a matter of law.
                        CONCLUSION
    We have considered Eagle’s other arguments and find
 them unpersuasive. We affirm the district court’s judg-
 ment of non-infringement on the pleadings.
                        AFFIRMED
                            COSTS
     No costs.