Exclusive Licensee Can Pursue Appeal

Schwarz Pharma, Inc. v. Paddock Laboratories. Inc., [2007-1074] (October 12, 2007)[Lourie, Michel, Moore] The Federal Circuit affirmed summary judgment of non-infringement of U.S. Patent No. 4,743,450, in favor of Paddock, because prosecution history bars resort to the Doctrine of Equivalents.
SIGNIFICANCE: 1. The exclusive licensee can pursue an appeal without the patent owner; 2. Any narrowing amendment presumptively bars equivalents, and the burden remains on the patent owner to show why estopple does not apply
BRIEF: Paddock filed an ANDA certifying the claims of the '450 patent were invalid, and the owner Warner, and its exclusive licensee Schwarz, sued for infringement. The district court determined as a matter of law that arguments made by the inventors and amendments to each of the independent clams in response to an obviousness rejection by the examiner during the prosecution of the application leading to the ’450 patent did not result in argument-based estoppel, but did result in amendment-based estoppel. Paddock challenged Schwarz's standing to appeal without Warner, but the Federal Circuit held that when a patentee joins an exclusive licensee in bringing a patent infringement suit in a district court, the licensee does not lose standing to appeal even though the patentee does not join in the appeal.
Schwarz argued that it never claimed compositions and processes involving MgO, and thus there could be no surrender when the claims were amended. As the Supreme Court said in Festo: A patentee’s decision to narrow his claims through amendment may be presumed to be a general disclaimer of the territory between the original claim and the amended claim. There are some cases, however, where the amendment cannot reasonably be viewed as surrendering a particular equivalent. The equivalent may have been unforeseeable at the time of the application; the rationale underlying the amendment may bear no more than a tangential relation to the equivalent in question; or there may be some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question. In those cases the patentee can overcome the presumption that prosecution history estoppel bars a finding of equivalence. The Federal Circuit held that the original claims did recite a metal containing stabilizer, in claim 1, and an alkaline earth metal salt, in claim 16. Warner-Lambert thus presumptively surrendered subject matter encompassed by those terms when it amended those claims and deleted those broader terms. The Federal Circuit concluded that, because MgO was known as a stabilizer in the field of pharmaceutical compositions, Schwarz has failed to rebut the presumption of surrender by demonstrating that MgO was not a foreseeable equivalent.