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Bayer Healthcare LLC v. Baxalta Inc.

United States District Court, D. Delaware

August 23, 2019

BAYER HEALTHCARE LLC, Plaintiff,
v.
BAXALTA INC. and BAXALTA U.S. INC., Defendants.

          Rodger D. Smith II, Michael J. Flynn, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE; Bradford J. Badke, Sona De, Ching-Lee Fukuda, Caroline Bercier, Julie L. Hsia, SIDLEY AUSTIN LLP, New York, NY; Kevin O'Brien, Sue Wang, Saurabh Prabhakar, SIDLEY AUSTIN LLP, San Francisco, CA; Gwen Hochman Stewart, Grace L.W. St. Vincent, SIDLEY AUSTIN LLP, Chicago, IL. Attorneys for Plaintiff.

          Frederick L. Cottrell, III, Kelly E. Farnan, Nicole K. Pedi, RICHARDS, LAYTON & FINGER, PA., Wilmington, DE; Edgar H. Haug, Angus Chen, Porter F. Fleming, Richard F. Kurz, Erika V. Selli, Elizabeth Murphy, HAUG PARTNERS LLP, New York, NY. Attorneys for Defendants.

          MEMORANDUM OPINION

          ANDREWS, U.S. DISTRICT JUDGE

         Presently before the Court is Defendants' motion for judgment as a matter of law and for a new trial concerning invalidity, noninfringement, and damages. (D.I. 434). I have reviewed the parties' briefing. (D.I. 436, 452, 461). I heard oral argument on the issue of nonenablement on August 9, 2019. For the following reasons, Defendants' motion is DENIED.

         I. BACKGROUND

         On December 5, 2016, Plaintiff Bayer Healthcare LLC filed suit against Defendants Baxalta Inc. and Baxalta U.S. Inc. (collectively, "Baxalta") and Nektar Therapeutics for infringement of U.S. Patent No. 9, 364, 520 ("the '520 patent"). (D.I. 1). The '520 patent is directed to forms of human factor VIII, "a protein necessary for normal blood clotting in response to injury." (D.I. 99 at 1). The patent claims factor VIII conjugates not found in nature, made up of recombinant factor VIII and one or more biocompatible polymers chemically bonded to factor VIII at the protein region known as the "B-domain." (Id. at 1, 3). The claimed factor VIII conjugates are formed through a process called pegylation, which is the conjugation of recombinant factor VIII with polyethylene glycol ("PEG"), a biocompatible polymer. (Id. at 5).

         The accused product is Baxalta's Adynovate, a pegylated factor VIII used to treat hemophilia A. (D.I. 28 ¶ 25; D.I. 247 at 1). Hemophilia A is a congenital bleeding disorder caused by deficient or defective factor VIII. '520 patent at 1:25-32. The FDA approved the Adynovate Biologies License Application ("BLA") on November 13, 2015. (D.I. 28 ¶ 25).

         I held a jury trial from January 25 to February 1, 2019.[1] Bayer asserted claims 1-3 and 8 of the '520 patent. (D.I. 398). The jury found that Baxalta infringed all four asserted claims, that none of the claims were invalid for lack of enablement or obviousness, and that Bayer was entitled to $155, 190, 264 in damages, based on a 17.78% royalty rate and $872, 836, 128 royalty base. (Id.). I granted judgment as a matter of law with respect to induced, contributory, and willful infringement by Nektar, and willful infringement by Baxalta. Tr. at 1134:24-1135:3; (D.I. 412 ¶¶ 2-3). Bayer has no remaining claims against Nektar.

         Baxalta now moves for judgment as a matter of law that the '520 patent is invalid, that Adynovate does not infringe, and that the jury's damages award is not supported by substantial evidence. In the alternative, Baxalta moves for a new trial. (D.I. 436).

         II. LEGAL STANDARDS

         A. Judgment as a Matter of Law

         Judgment as a matter of law is appropriate if "the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for [a] party" on an issue. Fed.R.Civ.P. 50(a)(1). "Entry of judgment as a matter of law is a 'sparingly' invoked remedy, 'granted only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability.'" Marra v. Phila. Hous. Autk, 497 F.3d 286, 300 (3d Cir. 2007) (citation omitted).

         "To prevail on a renewed motion for JMOL following a jury trial, a party must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusions) implied [by] the jury's verdict cannot in law be supported by those findings." Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed. Cir. 1998). "'Substantial' evidence is such relevant evidence from the record taken as a whole as might be accepted by a reasonable mind as adequate to support the finding under review." Perkin-Elmer Corp. v. Computer-vision Corp., 732 F.2d 888, 893 (Fed. Cir. 1984).

         In assessing the sufficiency of the evidence, the Court must give the non-moving party, "as [the] verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in the evidence in his favor and, in general, view the record in the light most favorable to him." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1348 (3d Cir. 1991). The Court may "not determine the credibility of the witnesses [nor] substitute its choice for that of the jury between conflicting elements in the evidence." Perkin-Elmer, 732 F.2d at 893. Rather, the Court must determine whether the evidence supports the jury's verdict. See Dawn Equip. Co. v. Ky Farms Inc., 140 F.3d 1009, 1014 (Fed. Cir. 1998); Gomez v. Allegheny Health Servs. Inc., 71 F.3d 1079, 1083 (3d Cir. 1995) (describing standard as "whether there is evidence upon which a reasonable jury could properly have found its verdict"); 9B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2524 (3d ed. 2008) ("The question is not whether there is literally no evidence supporting the party against whom the motion is directed but whether there is evidence upon which the jury might reasonably find a verdict for that party.").

         Where the moving party bears the burden of proof, the Third Circuit applies a different standard. This standard "requires the judge to test the body of evidence not for its insufficiency to support a finding, but rather for its overwhelming effect." Fireman's Fund Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1177 (3d Cir. 1976) (quoting Mihalchak v. Am. Dredging Co., 266 F.2d 875, 877 (3d Cir. 1959)). The Court '"must be able to say not only that there is sufficient evidence to support the finding, even though other evidence could support as well a contrary finding, but additionally that there is insufficient evidence for permitting any different finding.'" Id. at 1177 (quoting Mihalchak, 266 F.2d at 877).

         B. New Trial

         Federal Rule of Civil Procedure 59(a)(1)(A) provides, in pertinent part: "The court may, on motion, grant a new trial on all or some of the issues-and to any party- . . . after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court.. .." The decision to grant or deny a new trial is committed to the sound discretion of the district court. See Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980); Olefins Trading, Inc. v. Han Yang Chem. Corp., 9 F.3d 282, 289 (3d Cir. 1993) (reviewing district court's grant or denial of new trial motion under the "abuse of discretion" standard). Although the standard for granting a new trial is less rigorous than the standard for granting judgment as a matter of law- in that the Court need not view the evidence in the light most favorable to the verdict winner-a new trial should only be granted where "a miscarriage of justice would result if the verdict were to stand," the verdict "cries out to be overturned," or where the verdict "shocks [the] conscience." Williamson, 926 F.2d at 1352-53.

         III. ASSERTED CLAIMS

         Bayer asserted claims 1-3 and 8 of the '520 patent. The claims provide:

1. An isolated polypeptide conjugate comprising a functional factor VIII polypeptide and one or more biocompatible polymers, wherein the functional factor VIII polypeptide comprises the amino acid sequence of SEQ ID NO: 4 or an allelic variant thereof and has a B-domain, and further wherein the biocompatible polymer comprises polyalkylene oxide and is covalently attached to the functional factor VIII polypeptide at the B-domain.
2. The isolated polypeptide conjugate of claim 1, wherein the biocompatible polymer comprises polyethylene glycol.
3. The isolated polypeptide of claim 2, wherein the polyethylene glycol comprises methoxypolyethylene glycol.
8. A pharmaceutical composition comprising a therapeutically effective amount of the isolated polypeptide conjugate of claim 1 and a pharmaceutically acceptable adjuvant.

'520 patent at 61:8-20, 62:13-14.

         IV. INVALIDITY

         Baxalta bears the burden of proof by clear and convincing evidence on invalidity. Therefore, to prevail on JMOL, Baxalta must show "not only that there is sufficient evidence to support the finding, even though other evidence could support as well a contrary finding, but additionally that there is insufficient evidence for permitting any different finding." Fireman's Fund, 540 F.2d at 1177. Baxalta moves for judgment of invalidity based on insufficient evidence for the jury to find that Baxalta failed to prove both nonenablement and obviousness. (D.I. 436 at 3-10, 21-24). For the following reasons, Baxalta's motion is DENIED.

         A. Nonenablement

         A patent specification "shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains ... to make and use the same . . . ." 35 U.S.C. § 112, ¶ 1 (2006).[2] "[T]o be enabling, the specification of a patent must teach those skilled in the art how to make and use the full scope of the claimed invention without undue experimentation." Trustees of Bos. Univ. v. Everlight Elecs. Co., 896 F.3d 1357, 1362 (Fed. Cir. 2018) (internal citations and quotation marks omitted). Factors for assessing whether a disclosure would require undue experimentation include:

(1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the claims.

In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988).

         Each of the asserted '520 patent claims requires "an isolated polypeptide conjugate," which I have construed to mean "a polypeptide conjugate where conjugation was not random." (D.I. 200). Specifically, the PEG is conjugated to the B-domain of a functional factor VIII polypeptide. '520 patent at 61:8-l5. The claims are not limited by conjugation to particular amino acids such as cysteine or lysine. Baxalta agrees that the '520 patent teaches non-random conjugation through pegylation at cysteine. (D.I. 436 at 5). However, Baxalta asserts that since the claims are not limited to particular amino acids, the full scope of the claims includes non-random pegylation at lysine, which the '520 patent fails to enable. (D.I. 436 at 3-10; D.I. 461 at 1-6).

         1. The '520 Patent Must Enable Non-Random Lysine Pegylation at the B-Domain

         It is well established that the specification must enable the full scope of the claimed invention. Everlight, 896 F.3d at 1364. That means if "the asserted claims are broad enough to cover [both cysteine and lysine pegylation], the ['520 patent] must enable both embodiments." Sitrick v. Dreamworks, LLC, 516 F.3d 993, 1000 (Fed. Cir. 2008) (internal citation omitted) (addressing an invention for use in both video games and movies); see also Everlight, 896 F.3d at 1364 (finding enablement of "five out of the six referenced permutations" in the patent insufficient); Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371, 1378-79 (Fed. Cir. 2007) (where the full scope of the claims included injectors with and without a pressure jacket, finding the claims invalid because the patent only enabled injectors with a pressure jacket). It is undisputed that non-random lysine pegylation is within the scope of the asserted claims as I have construed them. (D.I. 452 at 9-14).[3]

         Bayer argues that Baxalta mischaracterizes the novel aspect of the invention to improperly broaden the scope of the claims. (D.I. 452 at 9). According to Bayer, "the key insight of the '520 patent claims was the discovery that PEGylating at the B-domain resulted in the retention of functional activity." (Id. (internal citations omitted)). Therefore, the question for enablement is "whether, with the benefit of the '520 patent, a person of ordinary skill could attach PEG at the B-domain of full-length Factor VIII using a conjugation process that is 'not random.'" (Id.).

         Bayer's "novel aspect" theory stems from the Federal Circuit's decision in Automotive Technologies. There, the court found the scope of the claims included both mechanical and electronic side impact sensors. 501 F.3d at 1285. Use of the claimed "velocity-type" side impact sensors was the "novel aspect" of the invention. Id. at 1283. The court found that the electronic sensor was "not just another known species of a genus consisting of sensors," but "a distinctly different sensor compared with the [mechanical sensor]." Id. at 1285. Thus, the court held that the specification had to enable both the electronic and mechanical sensors. Id. Because the court determined that the specification failed to enable the electronic sensor, it affirmed the district court's judgment of invalidity for nonenablement. Id.

         Bayer relies on my opinion in Delaware Display Grp. LLC v. VIZIO, Inc., 2017 WL 784988 (D. Del. Mar. 1, 2017), which distinguished Automotive Technologies. The asserted claims covered lighting displays, which included a "light source" limitation. Id. at *3. The light source was applicable to displays of all sizes. Id. at *4. I granted summary judgment of enablement despite the fact that, at the time of the invention, one skilled in the art could not have made a light source for certain larger displays. Id. at *5. In contrast to Automotive Technologies, I found that the light source was a "tangential limitation" and not the novel aspect of the asserted claims. Id. I explained:

To hold otherwise would drastically alter the law of enablement. Suppose I had a product claim that claimed a camera where the novel aspect was a design that allows it to take improved pictures. As an additional limitation, I require a battery for the camera. The only role the battery plays is to supply the power to the camera. The battery plays no other meaningful role. It is clear that the battery is not the focus of the invention. My specification allows one skilled in the art to make the battery technology of the time and implement my novel design. Years later, novel battery technology is developed. It would be very harsh for enablement law to render my product claim invalid for lack of enablement ...

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