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AstraZeneca LP v. Breath Ltd.

United States District Court, D. New Jersey

February 13, 2015


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For Plaintiffs AstraZeneca LP and AstraZeneca AB: John E. Flaherty, Esquire, Ravin R. Patel, Esquire, McCarter & English LLP, Newark, New Jersey; Jay I. Alexander, Esquire, Stephen P. Anthony, Esquire, Christopher Sipes, Esquire, Keith A. Teel, Esquire, Covington & Burling LLP, Washington, DC; Danielle L. Goldstein, Esquire, Covington & Burling LLP, San Francisco, Ca.

For Defendant/Counterclaim Plaintiffs Breath Limited and Watson Laboratories, Inc.: Eleonore Ofosu-Antwi, Esquire, Liza M. Walsh, Esquire, Connell Foley, LLP, Roseland, New Jersey; William A. Rakoczy, Esquire, Amy D. Brody, Esquire, Thomas A. Rammer, II, Esquire, Heinz J. Salmen, Esquire, Natasha White, Esquire, Rakoczy Molino Mazzochi, Siwik LLP, Chicago, Illinois.

For Defendants/Counterclaim Plaintiffs Apotex, Inc. and Apotex Corp.: Eric I. Abraham, Esquire, Christina L. Saveriano, Esquire, Hill Wallack, LLP, Princeton, New Jersey; Richard J. Basile, Esquire, David W. Aldrich, Esquire, St. Onge Steward Johnson & Reens, LLC, Stamford, Connecticut.

For Defendant/Counterclaim Plaintiff Sandoz, Inc.: Sheila R. Wiggins, Esquire, Duane Morris, LLP, Newark, New Jersey; Eric D. Frank, Esquire, Duane Morris LLP, Cherry Hill, New Jersey; Gretchen P. Miller, Esquire, Steptoe & Johnson, Washington, DC; Taras A. Gracey, Esquire, Mark H. Remus, Esquire, Steptoe & Johnson, Chicago, Illinois.

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Table of Contents



A. The Asserted Claims of the '834 Patent

B. Markman Hearing

C. Federal Circuit Decision

D. Remand Proceedings

E. Defendants' Sterilization Processes


A. Asserted Claims on Remand

B. Infringement

C. Invalidity Defenses

1. Reduction to Practice of the Invention

2. Obviousness

a. Motivation

b. Prior Art Sterilization Techniques

i. Sterile filtration/crystallization


a) 1994 FDA Inspection Guide


b) Lachman: The Theory and Practice of

Industrial Pharmacy (1986)

c) Ansel: Pharmaceutical Dosage Forms and Drug

Delivery Systems (1995)


d) Remington: The Science and Pharmacy (1995)


e) Harris: U.S. Patent No. 6,187,765 (1997)


f) Conclusion


ii. Moist Heat Sterilization


a) Sodium Chloride Saturation


b) Surfactant


c) Sonication


d) Milling


e) Rotary Sterilization


f) Conclusion


iii. Ethylene Oxide (EO)


a) Toxic Residues


b) Penetration of the Crystalline Structure


c) Conclusion


iv. Irradiation


v. Dry Heat


c. Secondary Considerations


i. Industry Skepticism


ii. Long-felt, Unmet Need


iii. Failures of AstraZeneca and Others


iv. Commercial Success


v. Conclusion


3. Anticipation


4. Enablement


5. Written Description




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This matter comes before the Court upon remand from the Federal Circuit for further proceedings consistent with the Circuit's new claim construction related to U.S. Patent No. 7,524,834 (the " '834 Patent" ). The '834 Patent is entitled " STERILE POWDERS AND METHODS FOR PRODUCING THE SAME," and is addressed in relevant part to sterile budesonide compositions. Plaintiffs AstraZeneca LP and AstraZeneca AB (collectively, " AstraZeneca" ) bring this consolidated action for patent infringement against the defendants, Breath Limited, Watson Laboratories, Inc. (collectively, " Breath/Watson" ), Sandoz, Inc. (" Sandoz" ), Apotex Corp., and Apotex, Inc. (collectively, " Apotex," and together with Breath/Watson and Sandoz, " Defendants" ), based upon their filings of Abbreviated New Drug Applications (" ANDAs" ). See ANDA Nos. 78-404, 202558 (Breath/Watson), 78-202 (Apotex), 20-1966 (Sandoz).

AstraZeneca originally alleged infringement of U.S. Patent Nos. 6,899,099 and 6,598,603. See AstraZeneca LP v. Apotex, Inc., 623 F.Supp.2d 579 (D.N.J. 2009), aff'd, 633 F.3d 1042 (Fed. Cir. 2010). The Court found no likelihood of success on the merits of claims for infringement of U.S. Patent No. 6,899,099, and claims 29 and 30 of the '603 Patent because the patented claims were likely invalid as a matter of law as they did not functionally alter a known product so as to create a new patentable product. Id. The Federal Circuit agreed.[1] 633 F.3d at 1065. As to the other asserted claims of the '603 Patent, the Court found - and was affirmed on appeal - that those claims were invalid as obvious under the prior art. AstraZeneca, 542 F.App'x at 978-81. The Court further found the claims invalid as anticipated by prior art. 2013 WL 1385224, at *28-32. As such, only the '834 Patent remains at issue in this protracted litigation.

The '834 Patent is also invalid as obvious. Given the Federal Circuit's broad claim construction, the Court finds that Defendants have clearly and convincingly demonstrated that the '834 Patent is invalid as obvious because a POSA, whom the parties agree was motivated to prepare a sterile budesonide composition, would have had a reasonable expectation of successfully doing so using the well-known techniques of sterile filtration/aseptic recrystallization, moist heat sterilization, ethylene oxide sterilization, or irradiation.[2] Accordingly, the Court enters judgment against Plaintiffs and in favor of Defendants. This Opinion constitutes the Court's findings of

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fact and conclusions of law pursuant to Rule 52(a).


A. The Asserted Claims of the '834 Patent

Claims 1 and 50 of the '834 Patent, the independent claims at issue, teach a powder and suspension, respectively, comprising a " micronized powder composition." Specifically, claim 1 recites:

A pharmaceutically acceptable, micronized powder composition at least 98.5% by weight of which is pure budesonide or an ester, acetal or salt thereof, wherein the composition meets the criteria of sterility according to the U.S. Pharmacopoeia [sic] 23/NF18, 1995, pages 1686-1690 and 1963-1975.

'834 Patent col.11 11.48-52 (emphasis added). Claim 50 recites:

A pharmaceutically acceptable suspension consisting of a micronized powder composition at least 98.5% by weight of which is pure budesonide or an ester, acetal or salt thereof, suspended in an aqueous solution, wherein the suspension meets the criteria of sterility according to the U.S. Pharmacopoeia [sic] 23/NF18, 1995, pages 1686-1690 and 1963-1975.

'834 Patent col.13 11.54-60 (emphasis added). The dependent claims - claims 2 and 51 - include the additional limitation that 98.5% of the " micronized powder composition" is pure budesonide. '834 Patent col.11 ll.53-54 & col.13 11.61-63.

B. Markman Hearing

After the Markman hearing, this Court construed " micronized powder composition" as a product-by-process claim, to mean " heat-sterilized finely divided dry particles." See AstraZeneca, 2013 WL 1385224, at *43. The trial thus focused on AstraZeneca's heat sterilization process, for which AstraZeneca has another patent that is not at issue in this case.[3] See U.S. Patent No. 6,392,036.

C. Federal Circuit Decision

On appeal, the Federal Circuit reversed this Court's claim construction, construing the disputed term " micronized powder composition" to mean " finely divided dry particles" without requiring any particular process for sterilizing the particles. AstraZeneca, 542 F.App'x at 976-78. In light of the broadened claim construction, much of the remand proceedings centered on what was known in the art regarding the five conventional sterilization techniques. Defendants contend that now that AstraZeneca successfully obtained a broader claim construction not limited to a particular process, the so-construed patent is vulnerable to invalidity challenges based upon a significantly greater selection of prior art. See Sandoz Br., Docket No. 908, at 1, 8 (" AstraZeneca paid a steep price for its victory in the Federal Circuit." ).

D. Remand Proceedings

On remand, the parties argued that additional claim terms required construction. As to these terms, the Court concluded that " pharmaceutically acceptable" means what the parties have always agreed - " acceptable for administration as a pharmaceutical." Docket No. 980 at 22 (citing Joint Claim Construction Chart, Docket No. 93; AstraZeneca's Preliminary Claim Constructions to Breath for the '834 Patent, Declaration of Heinz J. Salmen, Docket No. 975, Ex. 1 at 2 (" 'Pharmaceutically

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acceptable' requires no construction and should be accorded its plain meaning." )). The Court also concluded that, in accordance with the Federal Circuit's decision, " meets the criteria of sterility according to the U.S. Pharmacopoeia [sic] 23/NF18, 1995, pages 1686-1690 and 1963-1975" means " sterile." See Sept. 24, 2014 Tr. 32:12-24 (citing 542 F.App'x at 973, 977).

In addition, Plaintiffs moved for a preliminary injunction on remand. In the interest of judicial efficiency and expediency, the Court consolidated the preliminary injunction hearing with the trial on the merits pursuant to Federal Rule of Civil Procedure 65(a)(2). Docket No. 980 at 43. Subsequently, the Court conducted a 13-day bench trial from October 6 through October 29, and November 17 through November 18, 2014. Upon the conclusion of the trial, the parties submitted voluminous post-trial briefing materials after which the Court held closing arguments.

E. Defendants' Sterilization Processes





A. Asserted Claims on Remand

As the case now stands on remand, the following claim analysis applies to the independent claims:

1. " A pharmaceutically acceptable, [finely divided dry particles] at least 98.5% by weight . . . wherein the composition [is sterile] . . . ."
50. " A pharmaceutically acceptable suspension consisting of [finely divided dry particles] at least 98.5% by weight . . . suspended in an aqueous solution, wherein the suspension [is sterile] . . . ."

'834 Patent col.11 ll.48-52; col.13 ll.54-60. Again, the dependent claims - claims 2 and 51 - include the additional limitation that 98.5% of the " micronized powder composition" is pure budesonide. '834 Patent col.11 ll.53-54 & col.13 ll.61-63.

B. Infringement

AstraZeneca contends Defendants' submissions of their ANDAs for generic versions of Pulmicort Respules® budesonide inhalation suspension were acts of infringement of the '834 Patent. To establish infringement, AstraZeneca bears the burden of proving by a preponderance of the evidence that each element of a claim is found in the accused product. See Allen Eng'g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1345 (Fed. Cir. 2002).

Defendants have not contested that each of the accused products meets each of the elements of the asserted claims: (1) pharmaceutically acceptable, PFOF ¶ ¶ 103, 111, 118; (2) consisting of a micronized powder composition, PFOF ¶ ¶ 99, 104, 112, 119; (3) at least 98.5% of which is pure budesonide or an ester, acetal or salt thereof, PFOF ¶ ¶ 100, 105, 113, 120; and (4) suspended in an aqueous solution, PFOF ¶ ¶ 106, 114, 121. Prior to this Court's construction of the term " meets the criteria of sterility" as " sterile," Defendants had contested infringement because AstraZeneca had not submitted test results establishing that the accused products meet the criteria of sterility set forth in the 1995 USP. However, as each of the Defendants conceded that its accused products were " sterile," this argument is rejected. See Sept. 14, 2014 Tr. 31:02-10, 34:05-07, 34:15-20.

Accordingly, the Court finds that AstraZeneca has demonstrated infringement by a preponderance of the evidence.

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C. invalidity Defenses

As a defense to infringement, Defendants assert the following grounds for invalidity: obviousness, anticipation, lack of written description, and lack of enablement.

In addressing these arguments, the Court adopts the definition of a person of ordinary skill in the art (" POSA" ) that was set forth in the prior trial and agreed to by the parties:

A person of ordinary skill in the art . . . would have had a medical degree with three years of experience in treating patients, particularly children with asthma, or either a doctorate or degree in pharmaceutics, chemical engineering, or a related field and three to five years of practical experience in one or more aspects of the pertinent arts, or a master's degree in pharmaceutics, chemical engineering, or a related field, and five to seven years of practical experience in one or more aspects of the pertinent arts.

2013 WL 1385224, at *10 (quoting 2012 Trial Tr. 3935:24-3936:13 (Chipps)).

1. Reduction to Practice of the Invention

The parties agree that the " critical date" of the '834 patent is November 11, 1997, one year prior to the earliest U.S. filing date to which the '834 patent can claim priority. Velander v. Garner, 348 F.3d 1359, 1363 (Fed. Cir. 2003). In an attempt to circumvent several prior art references (i.e., Leuschner and Harris), AstraZeneca has put forth evidence that it reduced its invention to practice by at least March 1997, and certainly by July 1997.[4] Heretofore, the Court has not decided this issue and thus it remains ripe for consideration.

" To antedate (or establish priority) of an invention, a party must show either an earlier reduction to practice, or an earlier conception followed by a diligent reduction to practice." See Purdue Pharma L.P. v. Boehringer Ingelheim GmbH, 237 F.3d 1359, 1365 (Fed. Cir. 2001) (citation omitted). " In order to establish an actual reduction to practice, the inventor must prove that: (1) he constructed an embodiment or performed a process that met all the limitations of the interference count; and (2) he determined that the invention would work for its intended purpose. . . . The inventor must also 'contemporaneously appreciate that the embodiment worked and that it met all the limitations of the interference count." Henkel Corp. v. Procter & Gamble Co., 560 F.3d 1286, 1289 (Fed. Cir. 2009) (citation omitted); see also Purdue Pharma, 237 F.3d at 1365-66. The patentee bears the burden of producing evidence supporting an earlier invention date but the burden of proof remains on the defendant " to establish by clear and convincing evidence that the patentee's invention date does not precede the date of

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the ostensible prior art reference." Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 585 F.Supp.2d 568, 575-76 (D. Del. 2008) (citing Spectralytics, 576 F.Supp.2d at 1045).[5] AstraZeneca points to laboratory-reports, dated March 1997, demonstrating inter alia that heating the substance for 60 minutes at 110 ° C would result in more than a 7 log reduction in Bacillus subtilis spores. See PTX 1034 at 1335867; PTX 1527. Redacted versions of these laboratory reports were submitted with AstraZeneca's Rule 131 Declaration. PTX 5A. Dr. George Zhanel, an expert for AstraZeneca, and Dr. Cheryl Larrivee-Elkins, one of the named inventors on the '834 Patent, testified that a six or seven log reduction was the " standard" used to define the goal of a sterilizing process because it indicates a 1/1 million sterility assurance level. See 2012 Trial Tr. 615:2-11; id. at 4213:9-16. Dr. Zhanel further testified that a POSA would understand from the laboratory data that this experiment would result in a sterile product as it demonstrates rapid spore reduction. Id. at 4276:9-4277:16. Although Defendants' expert, Dr. Scott Sutton, testified that this data only demonstrates spore reduction and not a sterilized product, he acknowledged that he was the " wrong person to ask" how the spore reduction translated into sterility. Id. at 2463:14-18, 2465:20-23. However, while the conclusion expressed in the documents was that heating for 60 minutes at 110 ° C " will give" more than a 7 log reduction, PTX 1034 clearly demonstrates that the samples were not actually heated at that time and temperature. PTX 1034 at 1335866-67; cf. Purdue Pharma, 237 F.3d at 1365 ( " To prove actual reduction to practice, 'an inventor must establish that he actually prepared the composition . . . ." (citing Estee Lauder Inc. v. L'Oreal, S.A., 129 F.3d 588, 592 (Fed. Cir. 1997))). Similarly, PTX 1527 provides no information regarding sterility of the heat-treated samples, and the testing conducted was not intended to even address sterility. See PTX 1527 at 1339829.

In fact, Dr. Elkins testified that the March data indicated " we were honing in on something that would be acceptable to the [FDA]," but that they had to " confirm this is real." 2012 Trial Tr. 615:19-616:1. However, their first attempts at doing so

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proved " unsuccessful and concerning." See id. at 617:1-4. Even as of April 23, 1997, Dr. Elkins informed others that the " microbiological validation of the cycle is not going well" and that they had been unable to replicate the earlier results. See PTX 1533 at 1350873.

The evidence suggested that by May 1997 AstraZeneca felt confident that it could produce a sterile product through dry heat sterilization in combination with aseptic processing, and had begun preparing data to update the FDA on its findings. See PTX 523 at 1336448-49; 2012 Trial Tr. 620:3-622:5 (Elkins). Soon thereafter, AstraZeneca contends that batch records show it prepared a batch of Pulmicort Respules(R) on May 10, 1997 that was sterile, pure, micronized, and pharmaceutically acceptable. See PTX 401 at 0321477; AstraZeneca's Proposed Findings of Fact (" PFOF" ), Docket No. 1111, ¶ 83. Defendants argue that AstraZeneca presented no testimonial evidence corroborating this internal documentation, which in any event shows no analysis of the suspension was performed until the end of June.[6] See Defs.' Joint Responses to AstraZeneca's Proposed Findings of Fact (" DRFOF" ), Docket No. 1127, ¶ 83. Defendants' reliance on Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1171-72 (Fed. Cir. 2006), is misplaced. There the Federal Circuit simply held that an inventor's claim to an earlier reduction in practice date must be sufficiently corroborated, not that every piece of evidence must be corroborated, as Defendants suggest here. However, the Court is inclined to agree with Defendants that, while the batch records show a budesonide suspension was manufactured on May 10, 1997, the test results demonstrating the claim limitations of sterility were not recorded until June 24, 1997, at the earliest.[7] PTX 401 at 0321473, 0321477. The analysis of the impurities and degradation products did not occur until July 9, 1997. Id. Thus, the evidence suggests that, until those tests were performed, AstraZeneca was unaware of whether it possessed a budesonide suspension that met all of the limitations of the asserted claims.

Defendants also argue that, even if sufficient to demonstrate reduction in practice of the suspension, the evidence presented fails to demonstrate reduction in practice of the powder composition prior to the '834 Patent's critical date. Although the Court acknowledges the limited evidence directly confirming AstraZeneca's possession of the powder, the Court finds that Defendants have failed to demonstrate by clear and convincing evidence that AstraZeneca had not reduced its invention to practice (powder and suspension) prior to the challenged prior art references.[8]

As such, the Court finds that AstraZeneca has submitted sufficient evidence demonstrating that it reduced its invention to practice at least by July 9, 1997. See, e.g., Streck, Inc. v. Research & Diagnostic Systems, Inc., 659 F.3d 1186, 1193 (Fed. Cir. 2011) (" When testing is needed to establish

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that an invention worked for its intended purpose, the inventor must have recognized that the tests were successful." (citing Estee Lauder, 129 F.3d at 594-95)), cert. den'd by 132 S.Ct. 2442, 182 L.Ed.2d 1064.

2. Obviousness

Although patents are presumed valid, an accused infringer can rebut this presumption with clear and convincing evidence of invalidity. Sciele Pharma Inc. v. Lupin Ltd., 684 F.3d 1253, 1260 (Fed. Cir. 2012) (citing 35 U.S.C. § 282; Microsoft Corp. v. i4i Ltd. P'ship, ___ U.S. ___, 131 S.Ct. 2238, 2245, 180 L.Ed.2d 131 (2011)). To be clear, the burden of establishing invalidity by clear and convincing evidence remains on the party asserting invalidity. In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1078 (Fed. Cir. 2012). A patent is invalid as obvious if the differences between the claimed invention and prior art are such that the invention as a whole would have been obvious to a person of ordinary skill in the art at the time the invention was made. Sciele Pharma, 684 F.3d at 1259 (quoting 35 U.S.C. § 103(a)). Whether a patent claim is obvious is a question of law based on four underlying facts: 1) the scope and content of the prior art; (2) the level of ordinary skill in the pertinent art; (3) the differences between the prior art and the claims at issue; and (4) such secondary considerations as commercial success, long-felt but unsolved need, and the failure of others. Id. (quoting Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966)); see also KSR Int'l. Co. v. Teleflex, Inc., 550 U.S. 398, 406, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007).

Generally, this inquiry considers whether a person skilled in the art would have had (1) a reason to combine the teachings of the prior art references to achieve the claimed invention, and (2) a reasonable expectation of success in doing so. In re Cyclobenzaprine, 676 F.3d at 1068-69 (internal citations omitted). " [O]bviousness does not require absolute predictability of success. . . . For obviousness under § 103, all that is required is a reasonable expectation of success." In re O'Farrell, 853 F.2d 894, 903-04 (Fed. Cir. 1988); see also Bayer Schering Pharma AG v. Barr Labs., Inc., 575 F.3d 1341, 1350 (Fed. Cir. 2009); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1364 (Fed. Cir. 2007).[9]

In KSR, the Supreme Court cautioned that this inquiry must be " expansive and flexible" and must account for the fact that a person of ordinary skill in the art is also " a person of ordinary creativity, not an automaton." Id. at 415, 421. There need not be " precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ." Id. at 418.

Importantly, " if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill." Id. at 417. Relevant to this analysis is whether there was a reason or motivation to combine the known elements in the manner claimed by the patent. Id. at 418. Indeed, " [o]ne of the ways in which a patent's subject matter can be proved obvious

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is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent's claims." Id. at 419-20. " [I]n many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle." Id. at 420.

Finally, an invention is " obvious-to-try" and therefore invalid under 35 U.S.C. § 103 if it results from a skilled artisan merely pursuing " known options" from " a finite number of identified, predictable solutions." In re Cyclobenzaprine, 676 F.3d at 1070 (quoting KSR, 550 U.S. at 421) (internal quotations omitted).

Defendants contend that the asserted claims are obvious in light of prior art setting forth five conventional sterilization techniques, each of which Defendants assert could have been used by a POSA with a reasonable expectation of successfully obtaining the claimed products. The Court will address the prior art concerning each technique in turn. First, however, it will address whether a POSA in 1997 would have been motivated to prepare the sterilized budesonide compositions that are the subject of the asserted claims.

a. Motivation

By 19 97, AstraZeneca was marketing and selling a pharmaceutically acceptable, aqueous suspension consisting of highly pure, micronized budesonide powder in Europe under the name PULMICORT® . See PULMICORT RESPULES adver., 49 Thorax: J. of British Thoracic Soc'y (April 1994), DTX 1026. It is undisputed that European Pulmicort discloses a pharmaceutically acceptable, aqueous suspension consisting of a highly pure, micronized budesonide powder composition and thus encompasses all of the elements of asserted claims 50 and 51, except for sterility. See Trial Tr. 421:11-13 (Plaintiffs stipulating that European Pulmicort meets all claim limitations of claims 50 and 51 except sterility); DFOF ¶ 31. In addition, by 1997, AstraZeneca was marketing and selling Pulmicort® Turbuhaler®, a dry powder inhaler dispensing budesonide inhalation powder. DTX 694 at 0299768. Pulmicort® Turbuhaler® discloses a pharmaceutically acceptable, micronized powder composition of highly pure budesonide. PRFOF ¶ 62. Thus, the Pulmicort® Turbuhaler® discloses every element of asserted claims 1 and 2, except for sterility. Because these prior arts disclosed all limitations of the asserted claims except for sterility, the question before the Court is whether it would have been obvious to a POSA to create a sterilized budesonide composition.[10]

Defendants argue - and AstraZeneca agrees - that, by 1991, a POSA would have been motivated to prepare the sterile budesonide powder and suspension that are the subject of the asserted claims because of FDA and industry expectations, as well as sterility requirements applicable to other pharmaceutical products on the market. See Trial Tr. 795:12-19.

This is true even though the FDA proposed rule at the time dealt only with solutions. Specifically, around the time of the '834 Patent, in September 1997, the FDA had issued a proposed rule (the " Proposed Rule" ) requiring " that all [aqueous-based] inhalation solutions for nebulization be manufactured as sterile." DTX 872 at 018500.[11]

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 AstraZeneca hones in on the fact that the Proposed Rule explicitly refers only to " solutions" - and not suspensions, which are the focus of the '834 Patent. However, several experts testified that POSAs understood the Proposed Rule to apply to all aqueous-based inhalation products, whether solutions or suspensions. See Trial Tr. 194:13-195:9 (Moldenhauer); 2012 Trial Tr. 2935:22-2937:25 (Miller). Moreover, Defendants introduced the testimony of Dr. Kenneth H. Muhvich, who assisted with drafting the Proposed Rule beginning in 1994. Trial Tr. 1044:1-8; 2012 Trial Tr. 2742:12-2743:14. According to Dr. Muhvich, the FDA began drafting the Proposed Rule in Spring 1994 in response to a recent case of contaminated inhalation solution products involving Copley Pharmaceuticals. 2012 Trial Tr. 2743:7-14. Dr. Muhvich testified, however, that while he used the term " solutions" in the Proposed Rule, he intended for the term to broadly cover " all aqueous-based products for nebulization, including suspensions." Trial Tr. 1044:5-15. The reason for this is that the health risks from contaminated aqueous-based inhalation products are virtually the same, regardless of whether they are solutions or suspensions. See id. at 1045:18-23, 1046:10-17.

In the FDA's Final Rule, published on May 26, 2000, the FDA required " all . . . aqueous-based drug products for oral inhalation be manufactured sterile" (the " Final Rule" ). DTX 915 at 024785. Thus, the Final Rule clearly covered solutions and suspensions. During the original trial, the Court questioned Dr. Muhvich about a statement in the Final Rule in which the FDA noted " [o]ne comment [to the Proposed Rules] suggested that the rule cover inhalation suspension products, stating that they contain more nutrients that contaminating microorganisms can metabolize than do inhalation solutions, and suggested that the title of the rule be modified to reflect this change." DTX 915 at 024786. Dr. Muhvich agreed that whoever was the commentator was not well-versed, was not paying attention, or was generally confused about whether or not the rule covered suspensions. See 2012 Trial Tr. 2772:15-24. Subsequently, during this trial, AstraZeneca submitted adequate evidence that the comment referenced in the Final Rules and discussed during Dr. Muhvich's testimony was, in fact, a letter signed by Dr. Muhvich. Accordingly, AstraZeneca contends that, in light of this discovery, Dr. Muhvich's prior testimony regarding the broad scope of the Proposed Rule has been " call[ed] into serious question" and AstraZeneca urges the Court to accord less weight to that testimony when it considers industry skepticism, see infra. The Court declines to do so.

AstraZeneca admittedly possessed the comment letter as of July 2014, but made the calculated decision not to question Dr. Muhvich about it during Dr. Muhvich's deposition in September 2014, shortly before the remand trial. When questioned as to why, AstraZeneca's counsel stated they " didn't trust the answers we would get." [12] See Trial Tr. 2845:2-4, 2851:5-10. Instead, AstraZeneca asks this Court to conclude, based upon a single line of inquiry from Dr. Muhvich's 2012 testimony, that he is not a credible witness. AstraZeneca's

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failure to seek an explanation from Dr. Muhvich when it had an opportunity to do so precludes this Court from making such conclusion. It is clear to this Court that in 2012 when the Court questioned him, Dr. Muhvich forgot that he had authored the comment. Indeed, when questioned, he did not have before him the comment letter purportedly reflecting his signature.

In any event, the comment letter is not necessarily inconsistent with Dr. Muhvich's testimony. Dr. Muhvich has steadfastly maintained that when he drafted the FDA Proposed Rule he intended for it to cover all aqueous-based products, both solutions and suspensions, because of the contamination risks associated with such products. See 2012 Trial Tr. 2749:23-2750:9. The comment does not contradict this testimony, but instead could be viewed as an attempt merely to make this intention absolutely clear to the industry. This interpretation is borne out by the statement in the Final Rule that the agency " agrees that further clarification of products covered by the rule is warranted." DTX 915 at 024786 (emphasis added).[13] See further discussion infra.

Regardless, both parties' experts agree that a POSA would understand at the time of the invention that the trend in the industry was moving toward the requirement that all aqueous-based inhalation products be manufactured as sterile. See, e.g., Trial Tr. 2492:20-2495:6 (Akers); [14] id. at 432:3-10 (Myrdal); 2012 Trial Tr. 2443:21-2444:5 (Sutton); id. at 2935:4-2936:16, 2937:8-25 (Miller). This understanding is consistent with Dr. Muhvich's testimony that the FDA was publicly advising the industry by Fall 1994 that it expected all aqueous-based inhalation products, suspensions or solutions, to be sterile. 2012 Trial Tr. 2750:21-2752:13. In fact, Dr. Poochikian of the FDA instructed AstraZeneca during a pre-NDA meeting held on November 20, 1996 that " the Division expects sterile products for both solutions and suspension for inhalation . . . ." DTX 760 at 1335702. AstraZeneca's witness, Dr. Zhanel, does not contradict this testimony. See Trial Tr. 1752:11-23 (" Q. And you heard from Ms. Moldenhauer, Doctor Miller and Mr. Zaccheo that people of ordinary skill in the art in 1997 were being told by FDA, you're going to make a suspension, you better make it sterile, you were here for that, right? A. I heard them use those words. Q. And you have no basis to disagree with that testimony, do you? A. That's what they said. My understanding is that the FDA was telling AstraZeneca, try to make this sterile. Q. Just like they were telling everybody else of ordinary skill in the art, right, about suspensions? A. I don't know what FDA was telling everybody about - I don't know what the FDA was telling everybody." ).

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Moreover, the testimony at trial demonstrates that there were sterile parenteral and ophthalmic products already on the market. The FDA required these products to be sterile because the manner in which they are administered, like inhaled products, permits them to " bypass the body's natural defense mechanisms" and thus contaminated versions of these products carry increased risks. See, e.g., Trial Tr. 339:4-16 (Zaccheo). As Kenneth Avis explained in " Sterile Products," a chapter contained within The Theory of Practice and Industrial Pharmacy (Lachman et al. eds., 3d ed. 1986),

[P]arenteral products are unique among dosage forms of drugs because they are injected through the skin or mucous membranes into internal body compartments. Thus, because they have circumvented the highly efficient first line of body defense, the skin and mucous membranes, they must be free from microbial contamination and from toxic components as well as possess an exceptionally high level of purity. All components and processes involved in the preparation of these products must be selected and designed to eliminate, as much as possible, contamination of all types, whether of physical, chemical, or microbiologic origin.
Preparations for the eye, though not introduced into internal body cavities are placed in contact with tissues that are very sensitive to contamination. Therefore, similar standards are required for ophthalmic preparations.

DTX 960 at 025799. Mr. Mike Zaccheo, Defendants' expert, credibly testified that because a POSA would appreciate that suspensions and solutions inhaled directly into the lungs similarly bypass the body's defenses, a POSA would understand the benefits of making these products sterile. Trial Tr. 341:12-342:2. Thus, the Court concludes that the Proposed Rule, as well as the FDA's contemporaneous communications to AstraZeneca and other industry participants, provided POSAs with a strong motivation to prepare a sterilized budesonide composition.

b. Prior Art Sterilization Techniques

Under the current claim construction, the asserted claims are not limited to any particular sterilization method and, thus, as long as it was obvious to make the claimed product using any sterilization process, the claims are invalid as obvious. The parties agree that at the time of the '834 Patent, there were five well-known, conventional sterilization techniques for sterilizing steroids such as budesonide: (1) sterile filtration followed by aseptic crystallization; (2) moist heat; (3) dry heat; (4) ethylene oxide (" EO" ); and (5) irradiation. PRFOF S[ 8. In other words, faced with the motivation to prepare a sterilized suspension or solution, a POSA had five " tools" in her " toolbox." Trial Tr. 3407:2-4. As set forth below, each of these sterilization methods had well- known disadvantages. Yet, a POSA had within her toolbox several methods to address them.

The Court now turns to each of these known sterilization techniques. In doing so, the Court recognizes that before it can make a determination that the asserted claims are invalid as obvious, the Court must consider all of the evidence, including evidence of secondary considerations. See, e.g., In re Cyclobenzaprine, 676 F.3d at 1078. Thus, while the Court has chosen to include its discussion of the secondary considerations after its discussion of each sterilization process for organizational purposes only, the Court has in fact considered the secondary considerations along with its consideration of the prior art as to each process.

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i. Sterile filtration/crystallization

Defendants first argue that a POSA would have had a reasonable expectation of success in creating the claimed sterilized budesonide compositions using conventional sterile filtration/crystallization in combination with standard aseptic processing. Defendants contend that the asserted claims are invalid as obvious over any one of (a) the IPPL, European Pulmicort®, or Pulmicort® Turbuhaler® and (b) the 1994 FDA Inspection Guide, Lachman, Ansel, or Remington 1995 (and optionally Steckel or Harris).

a) 1994 FDA Inspection Guide

In July 1994, the FDA issued guidelines for use by its inspectors when examining manufacturers of bulk drug substances. DTX 1000. Entitled " Guides to Inspections of Sterile Drug Substance Manufacturers", the guide set forth:

In the preparation for a sterile bulk drug substance inspection, a flow chart with the major processing steps should be obtained. Generally, the manufacture of a sterile bulk substance usually includes the following steps:
1. Conversion of the non-sterile drug substance to the sterile form by dissolving in a solvent, sterilization of the solution by filtration and collection in a sterilized reactor (crystallizer).
2. Aseptic precipitation or crystallization of the sterile drug substance in the sterile reactor.
3. Aseptic isolation of the sterile substance by centrifugation or filtration.
4. Aseptic drying, milling and blending of the sterile substance.
5. Aseptic sampling and packaging the drug substance.
These operations should be performed in closed systems, with minimal operator handling. Any aseptic operations performed by an operators[] [sic] other than in a closed system should be identified and carefully reviewed.

DTX 1000 at 029003. As written, the FDA Inspection Guide described the " usual" steps for sterile filtration/crystallization: (1) dissolving a nonsterile substance in an appropriate solvent to create a solution and filter-sterilizing the solution; (2) aseptic precipitation or crystallization; (3) aseptic isolation of the sterile substance by centrifugation or filtration; (4) aseptic drying, milling and blending; and (5) aseptic sampling and packing. DFOF ¶ 11. Moreover, the FDA Guide explicitly recognized that sterile filtration in combination with aseptic processing was routinely used to produce sterile products by 1997.

Defendants introduced evidence that a POSA would have had a reasonable expectation of successfully preparing the claimed sterilized budesonide compositions in the asserted claims by following each of the " usual" steps set forth in the 1994 FDA Inspection Guide (and other prior arts discussed herein). Defendants presented considerable and convincing testimony that, by 1997, a POSA who wanted to make sterile budesonide would know to start with highly pure, pharmaceutically acceptable budesonide. DFOF ¶ 19. In fact, highly pure budesonide of pharmaceutical grade - and therefore acceptable for administration as a pharmaceutical - was commercially available by 1997. DFOF ¶ 20.

As to Step 1 of the FDA Inspection Guide, both parties' experts agreed that a POSA would know that budesonide was " readily soluble in a variety of organic solvents" under conditions that were well-known to a POSA by 1997. Trial Tr. 1678:3-11 (Zhanel); id. at 371:12-22 (Zaccheo); see also PRFOF ¶ 16. For example, U.S. Patent No. 5,556,964, entitled

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" Process for the Manufacture of Budesonide," was issued September 17, 1996 to Robert G. Hofstraat et al. (" Hofstraat" ), and describes a process in which crude budesonide is dissolved in methanol at about 60° C and then filtered through a closed filter. DTX 892 at col.2 11.28-30. The experts also agreed that a POSA would know to pass the nonsterile budesonide solution through a 0.2 micron sterilizing filter, which would exclude all microorganisms, dead or alive, as well as any matter larger than the 0.2 pore size. See, e.g., Trial Tr. 334:13-335:3 (Zaccheo); id. at 1680:5-16, 1673:22-1674:15 (Zhanel); see also PRFOF ¶ 17. Indeed, as Dr. Zhanel testified, a POSA in 1997 would have known that solutions could be readily filter-sterilized. Trial Tr. 1673:14-21.

Regarding Step 2 of the FDA Inspection Guide process, Hofstraat further discloses that a POSA could recrystallize the budesonide out of the solution and obtain pure budesonide with an isomer ratio of 1:1. DTX 892 at col.2 11.45-51; see also Trial Tr. 1679:19-1680:16 (Zhanel). Hofstraat explained this could be done by adding an antisolvent, water, for injection through the same sterilization filter. See DTX 892 at col.2 11.45-51; Trial Tr. 373:6-12 (Zaccheo). These reactions could take place as part of a closed system in a sterile reactor, which provides aseptic conditions, as suggested by the FDA Guide.[15] DTX 1000 at 029003; see also Trial Tr. 375:4-10 (Zaccheo) (testifying that a POSA would know to carry out steps under aseptic conditions). In addition, a June 13, 1997 article, entitled " Micronizing of steroids for pulmonary delivery by supercritical carbon dioxide," written by H. Steckel[16] et al. (" Steckel" ), and published in the International Journal of Pharmaceutics, taught that budesonide could be dissolved in an organic solvent and crystallized into finely-divided dry particles without affecting the purity and morphology of the budesonide. DTX 871 at 018486, 018496; PRFOF ¶ 68.

AstraZeneca disputes that Steckel discloses pharmaceutically acceptable, micronized budesonide with purity greater than 99%. See PRFOF ¶ 40. This is unfounded. Indeed, Dr. Zhanel, AstraZeneca's witness, conceded his understanding of Steckel to be " using pharmaceutical grade budesonide of over 99 percent purity."

Q. So what Steckel found or what Steckel informed the skilled person is that when he took his steroids of Budesonide, dissolved them in organic solvent like methanol, treated them with supercritical carbon dioxide and micronized them and then recrystallized them back out, he found no decomposition in purity, correct?
And I'm referring to the conclusions on page 11 of 14 of DTX 871.
A. Correct.

Trial Tr. 1667:2-10. Other AstraZeneca witnesses agreed with Dr. Zhanel. See Trial Tr. 2319:10-23 (Akers) (" Q. And the budesonide they were working with was pharmaceutical grade 99 percent pure, correct? A. Correct." ); 2012 Trial Tr.

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3792:6-15 (Williams) (" Q. Now look at Page BREATH(Bud) 18492 [of DTX 871], the right column, under materials. What does this portion of Steckel say with respect to the purity of the corticosteroids? A. So here, this is Steckel describing what they used, and it says the steroids listed in Table 2 were used for the experiments. All of them were of pharmaceutical grade with a content of active ingredient greater than 99 percent. So that [] would be understood by a skilled person to mean that the materials that Steckel started with, that they ordered and got in, had a 99 percent or greater purity." ). Moreover, Dr. Robert 0. Williams, III, agreed that Steckel teaches methods for micronization, or reducing particle size, of steroids. See Trial Tr. 2819:23-2820:10 (Williams) (" Q. Can we refer to this as the Steckel reference? A. I'll understand that. Q. The methods for reducing particle size by supercritical carbon dioxide that are described in Steckel, are those consistent with the methods that you're familiar with? A. I'm familiar with this method. Q. Okay. Any reason to believe that the authors of Steckel were unable to achieve the particle size, the micronized particle size that they claimed to achieve in this publication? A. No, I accept what -- I know Bern Muller who's the senior - he's the professor in Germany. I accept these results." ); see also 2012 Trial Tr. 3791:16-19 (Williams).[17]

The evidence also demonstrated that Step 3 of the FDA Inspection Guide, aseptic isolation of the sterile substance, and Step 4, aseptic drying, milling,[18] and blending, were " routine" processes used by POSAs at the time of the '834 Patent. See, e.g., Trial Tr. 378:2-9 (Zaccheo); DFOF ¶ ¶ 170-71. Even AstraZeneca's expert, Dr. James Akers, acknowledged that a POSA would know how to dry, mill, and blend budesonide to form a finely-divided, dry budesonide powder. See Trial Tr. 22 62:17-21. And, other prior art references explained how this could be done aseptically. See DFOF ¶ 171. For example, Dr. Michael J. Akers[19] et al. disclosed in a 1997 publication that the dried sterile drug substance is aseptically discharged into suitable bulk containers or to the milling unit. DTX 986 at 028822. Dr. Michael Akers further disclosed the necessity of designing the overall sterilization process to account for aseptic filling to minimize product exposure and thus contamination risks. See id.; see also DTX 988 at col.22 11.38-39 (describing sterile micronization of sterile drug crystals); Trial Tr. 380:15-18.

As for sterile suspensions, the parties agree that as of 1997, " it was a matter of routine for a POSA to create a sterile, pharmaceutically acceptable, suspension of micronized budesonide when starting with sterile, micronized budesonide powder." PFOF ¶ 84; see also DFOF ¶ 25.[20]

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Based upon the above evidence, Mr. Zaccheo credibly opined that, by following the typical sterilization steps laid out in the 1994 FDA Inspection Guide, a POSA would have a reasonable expectation of successfully preparing a sterile budesonide composition (powder and suspension). Trial Tr. 381:3-6.

b) Lachman: The Theory and Practice of Industrial Pharmacy (1986)

Mr. Zaccheo also opined that it would have been obvious to a POSA in 1997 how to prepare the sterile compositions in the asserted claims (both powder and suspension) based upon the teachings of Lachman. Published in 1986, Lachman taught that sterile filtration was the " method of choice" for heat-labile, or heat sensitive, substances and is often " an ideal technique." Specifically, Lachman stated:

Filtration is frequently the method of choice for sterilization of solutions that are chemically or physically unstable under heating conditions. In many applications, sterile filtration is an ideal technique. Sterile filtration of liquids and gases is commonly used in the pharmaceutical industry. Final product solutions or vehicles for suspensions are sterile-filtered prior to an aseptic filling process. Sterile filtration of bulk drug solution prior to an aseptic crystallization process eliminates the possibility of organisms being occluded within crystals.

DTX 960 at 025756.

Lachman went on to explain that aseptic processing was routine after sterile filtration.

In 1997, there were two methods of manufacturing sterile products: terminal sterilization or aseptic processing from sterilized components. Trial Tr. 336:20-337:5 (Zaccheo). Terminal sterilization refers to a process by which a pharmaceutical product is prepared under clean conditions and sealed in its final container, which is then subjected to a sterilization process. Trial Tr. 335:4-14 (Zaccheo); DTX 2105 at 5000006. It is " terminal" because there are no further steps that need to be undertaken. Trial Tr. 335:4-14 (Zaccheo). Aseptic processing, on the other hand, " involves the filling or assembly of presterilized drug products under aseptic conditions into presterilized containers." DTX 2105 at 500005. Aseptic conditions refers to " the absence of living organisms." Trial Tr. 336:5 (Zaccheo). Because sterile filtration can only be conducted on solutions, it cannot be a terminal sterilization process for a suspension; in other words, there are subsequent steps that must be conducted under aseptic conditions to achieve a sterile suspension. Id. at 335:4-14 (Zaccheo). As Lachman explained:

Aseptic Processing. Sterilization of a solution by filtration provides an extremely clean solution, removing dirt particles as well as microorganisms in the micron size range. After sterilization, however, the filtrate must be transferred from the receiver and subdivided into the individual final containers. The objective of this process, known as aseptic processing, is to exclude every microorganism from all steps of the process subsequent to filtration. Accomplishing this requires a rigidly controlled aseptic environment and technique. The difficulty of maintaining such an aseptic condition is the greatest problem associated with sterilization by filtration; however, for solutions

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that are adversely affected by heat, this may be the only way in which sterilization can be accomplished.
Aseptic processing is technically not a sterilization process, but is mentioned here because of its close involvement with sterilization by filtration. It is used for products that cannot be terminally sterilized, that is, sterilized after they have been sealed in the final container.

DTX 960 at 025793-94 (emphasis added); see also Trial Tr. 350:1-4 (Zaccheo).

Motivated to produce a sterilized budesonide product - powder, solution or suspension - a POSA also understood from Lachman (and other " Bibles in sterility" )[21] that routine optimization of a sterilization process would be necessary-depending upon the specific characteristics of the substance or product to be sterilized. Lachman (and others) taught " to arrive at a safe process for any particular material it becomes a compromise between the ideal process and the practical process" and that within each process there would be a range of operating parameters that can be used . . . ." Trial Tr. 345:19-25 (Zaccheo). As Mr. Zaccheo testified, the process of determining what constitutes " an optimized process" is just " simple routine process optimization with the characteristics of the product in view." Id. at 346:2-3.

Mr. Zaccheo credibly testified that, while Lachman recognized the difficulty of maintaining a completely aseptic environment, a POSA would not have been discouraged from using sterile filtration as a sterilization technique for budesonide. This is so, Mr. Zaccheo explained, because POSAs were aware of the availability at that time of facilities and equipment that could be used to create an aseptic environment. See id. at 350:16-351:5. Indeed, the 1994 FDA Guide discussed above illustrates Mr. Zaccheo's point. The Guide described such facilities and equipment and advised its inspectors how to identify problem areas during an inspection to eliminate risks associated with contamination. See, e.g., DTX 1000 at 029004-06. For example, the FDA Guide advised that if any processes occurred outside of a " closed system" then they must be identified and carefully reviewed. Id. at 029003. Therefore, as Mr. Zaccheo testified, POSAs would have realized that closed systems for use in aseptic processing were available at least as of the time when the FDA was advocating their use in sterilization processes in 1994. See Trial Tr. 377:11-15.

Moreover, Lachman recognized that the use of aseptic processing in conjunction with other sterilization techniques may be the only viable means of producing certain pharmaceutical products. DTX 960 at 025794. If it was well-known that certain pharmaceutical products could only be sterilized in this fashion, then the equipment and facilities necessary to accomplish it must have been available at that time. See also Trial Tr. 375:16-25 (Zaccheo).

c) Ansel: Pharmaceutical Dosage Forms and Drug Delivery Systems (1995)

Defendants also rely upon Ansel, a 1995 publication that reinforced the advantages of sterile filtration for heat-sensitive compounds like budesonide. See Trial Tr. 353:20-354:14. Ansel stated:

Sterilization by filtration, which depends upon the physical removal of microorganisms by absorption on the filter medium or by a sieving mechanism, is used

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for the sterilization of heat-sensitive solutions. . . .
Commercially available filters are produced with a variety of pore-size specifications. . . .
The major advantages of bacterial filtration include its speed in the filtration of small quantities of solution, its ability to sterilize effectively thermobile materials, the relatively inexpensive equipment required, and the complete removal of living and dead microorganisms as well as other particulate matter from the solution. One serious disadvantage to the use of bacterial filters is the possibility of a flaw in the construction of the filter and thus some uncertainty of sterility, a circumstance not true of methods involving dry- or moist-heat sterilization in which the procedures are just about guaranteed to give effective sterilization. Also, filtration of large volumes of liquids would require more time, ...

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