The opinion of the court was delivered by: Gerard E. Lynch, District Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In this patent infringement action brought by plaintiffs Eisai Co., Ltd. and Eisai Inc. (collectively, "Eisai") against defendants Dr. Reddy's Laboratories, Ltd., and Dr. Reddy's Laboratories, Inc. (collectively, "Reddy"), and Teva Pharmaceuticals USA, Inc. ("Teva"), defendants maintain that Eisai's patent should not be enforced because Eisai engaged in inequitable conduct before the U.S. Patent and Trademark Office ("PTO") in prosecuting the patent. The case having been tried to the Court without a jury, the Court concludes that defendants have failed to prove inequitable conduct by clear and convincing evidence, and that plaintiffs accordingly have established their claim of patent infringement.
The following constitutes the Court's findings of fact and conclusions of law, in accordance with Rule 52(a), Fed. R. Civ. P. To the extent any finding of fact reflects a legal conclusion, it shall to that extent be deemed a conclusion of law, and vice versa.
1. Eisai Co., Ltd. is a corporation incorporated and existing under the laws of Japan, and has its principal place of business at 4-6-10 Koishikawa, Bunkyo-ku, Tokyo 112-8088, Japan. (Statement of Agreed Facts ¶ 1.)
2. Eisai Inc. is a United States subsidiary of Eisai Co., Ltd., and a corporation incorporated under the laws of the State of Delaware, and has its principal place of business at 100 Tice Boulevard, Woodcliff Lake, NJ 07677. (Id. ¶ 2.)
3. Dr. Reddy's Laboratories, Ltd., is a public limited liability company incorporated and existing under the laws of India and having a principal place of business at 7-1-27, Ameerpet, Hyderabad, 500 016, India. (Id. ¶ 4.)
4. Dr. Reddy's Laboratories, Inc., is a corporation incorporated under the laws of the State of New Jersey, having its principal place of business at 200 Somerset Corporation Blvd., 22 West, Bldg. 2, 7th Floor, Bridgewater, NJ 08807. (Id. ¶ 5.) It is a subsidiary of Dr. Reddy's Laboratories, Ltd., and the exclusive agent in North America for Dr. Reddy's Laboratories, Ltd. (Id. ¶¶ 6-7.)
5. Teva Pharmaceuticals USA, Inc. ("Teva USA"), is a corporation organized under the laws of the State of Delaware, having its corporate headquarters and principal place of business at 1090 Horsham Road, North Wales, Pennsylvania 19454. (Id. ¶ 8.)
6. Teva USA is a wholly-owned subsidiary of Orvet-UK Ltd. Holding, which is a wholly-owned subsidiary of Teva Pharmaceuticals Europe (Holland), which is wholly-owned by Teva Pharmaceutical Industries, Ltd. (Id. ¶ 9.)
II. Jurisdiction and Venue
7. Reddy does business in this District and in other jurisdictions in the United States, and this Court has personal jurisdiction over it. (Id. ¶ 10.)
8. Teva sells products and does business in this district and in other jurisdictions in the United States, and this Court has personal jurisdiction over it. (Id. ¶ 11.)
9. Eisai's action against Reddy and Teva arises under the patent laws of the United States of America, and this Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). Venue is proper in this Court under 28 U.S.C. §§ 1391(c) and 1400(b). (Id. ¶ 12.)
10. Reddy and Teva counterclaim against Eisai for declaratory judgment pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202. The basis for declaratory judgment is an actual controversy arising under the United States patent laws, Title 35 of the United States Code, and the complaint in this action regarding U.S. Patent No. 5,045,552 ("the '552 patent"). This Court has jurisdiction over Reddy and Teva's claims pursuant to 28 U.S.C. §§ 1331 and 1338(a). Venue is proper in this judicial district under 28 U.S.C. §§ 1391(b), (c) and 1400(b) and under the Drug Price and Patent Term Restoration Act ("Hatch-Waxman Act"). (Id. ¶ 13.)
III. Nature of the Action and Procedural History
11. The Hatch-Waxman Act, 21 U.S.C. § 355 and 35 U.S.C. § 271(e) (1994) (codified as amended), permits would-be manufacturers of generic versions of an already approved, patented drug to seek expedited approval from the Food and Drug Administration ("FDA") before expiration of the patent, by means of an Abbreviated New Drug Application ("ANDA"). See Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339, 1342 (Fed. Cir. 2000). The filing of an ANDA for a drug claimed in a patent constitutes a legally cognizable act of infringement for which the owner of the patent may bring suit under 35 U.S.C. § 271(e)(2). Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1344 (Fed. Cir. 2004); see Eisai Co. v. Dr. Reddy's Laboratories ("Eisai I"), 472 F. Supp. 2d 493, 494 (S.D.N.Y. 2006).
12. Eisai Co., Ltd., is a pharmaceutical company and is the owner of the '552 patent, which claims the chemical compound rabeprazole sodium. Eisai Inc. is a pharmaceutical company and is the exclusive licensee of the '552 patent in the United States. (Statement of Agreed Facts, ¶¶ 14-17.)
13. Rabeprazole sodium*fn2 is the active ingredient in Eisai's drug product Aciphex. Aciphex, produced by Eisai, is a proton pump inhibitor that suppresses acid production in the cells of the stomach lining. (Id. ¶¶ 18-19.)
14. In 1999, Aciphex was approved by the FDA for the healing of erosive gastroesophageal reflux disease ("GERD"), maintenance of healed erosive GERD, healing of duodenal ulcers and treatment of pathological hypersecretory conditions, including Zollinger-Ellison syndrome. Aciphex is also approved for treatment of daytime and nighttime heartburn and other symptoms associated with GERD. (Id. ¶ 20.)
15. Aciphex is sold in several countries and has had U.S. sales reported at list price of over $1 billion per year. (Id. ¶ 21.)
16. In August 2003, Reddy filed with the FDA an ANDA containing a paragraph IV certification*fn3 with respect to the '552 patent under 21 U.S.C. § 505(j)(2)(B)(ii) of the Federal Food Drug and Cosmetic Act (21 U.S.C. § 355) seeking approval to market a generic rabeprazole product before the expiration of the '552 patent. (Id. ¶ 22.)
17. In August 2003, Teva filed in the FDA an ANDA containing a paragraph IV certification with respect to the '552 patent under 21 U.S.C. § 505(j)(2)(B)(ii) of the Federal Food Drug and Cosmetic Act (21 U.S.C. § 355) seeking approval to market a generic rabeprazole product before the expiration of the '552 patent. (Id. ¶ 23.)
18. By letter dated October 15, 2003, Reddy sent a notice to Eisai in which Reddy represented that it had filed an ANDA for rabeprazole sodium, including the certification with respect to the '552 patent, and that it sought approval of its ANDA prior to the expiration of that patent. Eisai received notice of the certification. (Id. ¶ 24.)
19. By letter dated October 8, 2003, Teva sent a notice to Eisai in which Teva represented that it had filed an ANDA for rabeprazole sodium, including the certification with respect to the '552 patent, and that it sought approval of its ANDA prior to the expiration of that patent. Eisai received notice of the certification. (Id. ¶ 25.)
20. On November 17, 2003, Eisai filed suit for patent infringement against Reddy, Civil Action No. 03 Civ. 9053.
21. On November 20, 2003, Eisai filed suit for patent infringement against Teva, Civil Action No. 03 Civ. 9223.*fn4
22. In defense of this claim, Reddy and Teva have alleged, among other things, that Eisai's '552 patent is unenforceable because of Eisai's inequitable conduct before the PTO during prosecution of the patent. (Reddy's Fourth Amended Answer and Counterclaims; Teva's Third Amended Answer and Counterclaims.)
23. By Stipulation and Order dated June 23, 2004 (Plaintiff's Trial Exhibit ("PTX") 23), Reddy stipulated that "Claims 1-6 of the ['552 patent] are valid" and that the rabeprazole sodium tablets described in Reddy's ANDA infringe all enforceable claims of the '552 patent.
24. Through its counsel, Teva conceded infringement of Claims 1-6 of the '552 patent on September 3, 2004. (PTX 24.)
25. On November 22, 2005, Eisai filed a motion for summary judgment of patent validity with respect to Teva, which was granted on October 5, 2006. See Eisai Co. v. Teva Pharmaceuticals ("Eisai II"), No. 03 Civ. 9223 (GEL), 2006 WL 2872615 (S.D.N.Y. Oct. 6, 2006).
26. On November 22, 2005, Eisai also filed a motion for summary judgment of no inequitable conduct with respect to both Teva and Reddy. In a separate Opinion and Order also dated October 5, 2006, the Court granted Eisai's motion in part and denied it in part. See Eisai I, 472 F. Supp. 2d 493.
27. Following the Court's summary judgment ruling, Teva and Reddy advised the Court by letter dated November 22, 2006, that they would not pursue certain previously-alleged inequitable conduct allegations arising out of comparisons of rabeprazole to omeprazole made during the prosecution of the '552 application. By order dated November 29, 2006, the Court dismissed with prejudice Teva's and Reddy's inequitable conduct allegations relating to comparisons of rabeprazole with omeprazole.
28. As a result of the various admissions by defendants and the Court's prior summary judgment rulings, only defendants' affirmative defense of inequitable conduct remains in the case. With regard to this defense, three allegations remained for trial:
(a) Whether Eisai committed inequitable conduct in the failure to disclose the existence of, and/or certain developments relating to, a later-filed, later-issuing co-pending patent application;
(b) Whether Eisai committed inequitable conduct in failing to disclose the patent reference, Byk Gulden WO 8602646;
(c) Whether Eisai committed inequitable conduct in selecting the data it included in a Rule 132 Declaration filed in the prosecution of the '552 application data.
29. From March 5, 2007, through March 14, 2007, trial was held regarding these remaining allegations. The agreed record of the trial consists of the trial transcript, the direct testimony affidavits of those witnesses who presented testimony in this fashion (as modified by occasional Court rulings striking portions of such testimony), a volume of deposition excerpts identifying those portions of deposition testimony admitted by stipulation as trial evidence (Court Exhibit ("CX") 1), and those documents received in evidence (identified on a list stipulated by the parties, CX 2).
IV. Background on Certain Proton Pump-Inhibiting Compounds
30. In the late 1980s it was believed that peptic ulcers -- i.e., localized erosions of the mucous membrane of the duodenum or stomach -- were caused by an imbalance between "offensive" factors such as gastric acid or pepsin, and "defensive" factors such as resistance of the mucous membrane, mucilage secretion, bloodstream or control of the duodenum. (PTX 1, '552 patent, col. 1, lines 15-24.)
31. In the late 1970s and early 1980s, it was discovered that the stomach's parietal cell contained an enzyme, called "H⯠ጽ," which was responsible for the production of acid in the stomach. (Statement of Agreed Facts ¶ 26.)
32. The H⯠ጽ enzyme became known as the "proton pump," referring to the fact that it pumped protons (H ions) into the stomach which would combine with chloride ions (Cl-) to form hydrochloric acid (HCl), otherwise known as gastric acid. (Id. ¶ 27.)
33. A "proton pump inhibitor" ("PPI") inhibits the activity of this enzyme. (Id. ¶ 28; Forte Aff. ¶¶ 11-12.) PPIs are useful in treating peptic ulcers and related symptoms by inhibiting secretion of gastric acid in the stomach. (Forte Aff. ¶¶ 11-12.) At the time Eisai scientists were working on the development of rabeprazole, the precise chemical mechanisms by which PPI's operated to inhibit the activity of H⯠ཌྷ, and indeed the precise chemical structure of the enzyme, were poorly understood. (DTX 87T at ECL 120499; 3/14/07 Tr. 982:17-988:3.)
34. In 1985, A. Brändström, P. Lindberg, and U. Junggren, scientists working for the Swedish company AB Hässle ("Hässle" or "Astra") -- later known as Astra AB and today known as AstraZeneca AB -- published an article describing a class of compounds that act as inhibitors of gastric acid secretion, "Structure Activity Relationships of Substituted Benzimidazoles," 20 (Supp. 108) Scandinavian J. of Gastroenterology, pp. 15-22 (1985) (the "Brändström article"). (DTX 1022; LaVoie Aff. ¶ 21; Cooperman Aff. ¶ 10.)
35. The Brändström article disclosed a class of compounds that are chemically-named "benzimidazole-sulfinylmethyl-pyridine" and have the following skeletal structure (the "Brändström core structure") (DTX 1022; LaVoie Aff. ¶ 21; Cooperman Aff. ¶ 11). The Brändström article characterized the Brändström core structure as the "[t]he simplest structural fragment necessary for activity." (Id.).
36. By convention, each atom of the pyridine ring in this basic core structure is numbered, as indicated in the diagram above (DTX 1022; LaVoie Aff. ¶ 21; Cooperman Aff. ¶ 12). Each of carbon atoms 3, 4, 5 and 6 on the pyridine ring can be bonded to a hydrogen (which is often omitted from the structure drawing) or a non-hydrogen substituent. (Id.)
37. Persons of ordinary skill in the art would have been led by the Brändström article to focus on the substituents to the pyridine ring, because the article concluded that "pyridine substitution is essential to the [pharmacological] effect" of the compound.*fn5 (DTX 1022 at 22; LaVoie Aff. ¶ 21). In the figure above, medical chemists would understand that a hydrogen atom (H) is attached at each of positions 3, 4, 5, and 6 on the pyridine ring and at each of positions 4, 5, 6, and 7 on the benzimidazole ring, even though they are not shown. (LaVoie Aff. ¶ 21; Cooperman Aff. ¶ 12.) Positions where only hydrogen atoms are attached are considered "unsubstituted." Any non-hydrogen chemical group attached to any of the positions would be considered a "substituent." Position 2 on the pyridine ring cannot have any substituent as it is already connected to the CH2 group of the bridge which connects the pyridine ring to the rest of the compound. (LaVoie Aff. ¶ 21.)
38. The '552 patent notes that a "wide variety of compounds having a benzimidazole structure have been proposed," and that one of them in particular -- called "omeprazole" -- was under active development and was then the most promising. (Statement of Agreed Facts ¶ 29.)
39. The compounds discussed in this litigation are substituted at the 4- position of the pyridine ring with "alkoxy" or "alkoxyalkoxy" substituents. Alkoxy substituents are more specifically named according to the number of carbons present in the chain. (LaVoie Aff. ¶ 47; Cooperman Aff. ¶ 13.)
40. For example, an alkoxy substituent with only one carbon in the chain is referred to as a "methoxy" substituent, an alkoxy with two carbons is an "ethoxy" substituent, and one with three carbons in the chain is referred to as a "propoxy" substituent. (Id.)
41. An "alkoxyalkoxy" substituent is one in which two alkoxy groups are connected in sequence. (Id.)
42. Alkoxyalkoxy substituents are named according to the specific alkoxy segments of which they are comprised.
Nomenclature # carbons Chemical structure Methoxy 1 -OCH3 Ethoxy 2 -OCH2CH3 Propoxy 3 -OCH2CH2CH3 Methoxyethoxy 1,2 -OCH2CH2-OCH3 Methoxypropoxy 1,3 -OCH2CH2CH2-OCH3 (Cooperman Aff. ¶13.)
43. A compound with a substituent at the 4-position of the pyridine ring and with either (a) non-hydrogen substitution at both the 3- and 5-positions of the pyridine ring or (b) hydrogen substitution at both the 3- and 5-positions of the pyridine ring has been referred to in this litigation as "symmetrically substituted," because there is symmetry of substitution around the 4-position. In contrast, a compound with a non-hydrogen substituent either at the 3- or 5-position (but not at both) has been referred to in this litigation as "asymmetrically substituted." (LaVoie Aff. ¶¶ 23-25.)
44. Omeprazole, which was created by Hässle, was the first compound commercially marketed to inhibit acid secretion by the mechanism of inhibiting the H⯠ጽ enzyme. (Statement of Agreed Facts ¶ 30.)
45. Hässle obtained U.S. Patent No. 4,255,431 ("the Junggren '431 patent," or, collectively with two other Hässle patents, "Junggren") in 1981,*fn6 claiming a genus of compounds having the Brändstöm core structure depicted above. (Id. ¶ 31; DTX 101 at DRLRAB 274-75.)
46. Omeprazole is identified as Example 23 in Table 1 of the Junggren '431 patent. Omeprazole has the following structure, which is depicted in the '552 patent at column 1, lines 50-55.
(Statement of Agreed Facts ¶¶ 32-33.)
47. The Junggren '431 patent claimed compounds in which the alkoxy or alkoxyalkoxy substituent on the 4-position of the pyridine ring substituent could be a methoxy, ethoxy, methoxyethoxy or ethoxyethoxy. (DTX 101 at DRLRAB 284, col. 14:25-48.)
48. The Junggren '431 patent does not cover rabeprazole or any other compound with a methoxypropoxy substituent at the 4-position of the pyridine ring. The Junggren '431 patent specifically discloses an example of a symmetric compound having methoxyethoxy at the 4-position of the pyridine ring. This compound is example 27 of Table 1 in the Junggren '431 patent ("Example 27 "). (Id. at DRLRAB 282, col. 9).
49. The German pharmaceutical company Byk Gulden was also involved in research and development regarding compounds having the Brändström core structure. On May 9, 1986, Byk Gulden's international patent application No. PCT/EP85/00575 was published in German as WO 86/02646 ("Byk Gulden '646," or simply, "Byk Gulden"). (DTX 1035.) The English counterpart of Byk Gulden issued on August 11, 1987. (DTX 1037.)
50. Byk Gulden generically describes a massive number of possible compounds. It depicts a chemical structure with 10 sites of potential substitution and describes a genus encompassing over 30 billion possible combinations of substituents. Despite the vast possibilities for variation, the claims of Byk Gulden require the presence of fluorinated alkoxy substituents on the benzamidazole ring. Every working example described in the patent, and each of the more than 80 compounds specifically disclosed, has certain fluorine substituents on the benzamidazole ring. The only pharmacology data provided in Byk Gulden relates to compounds having fluorinated alkoxy substituents on the benzimidazole ring. A review of Byk Gulden reveals that these fluorinated alkoxy substituents on the benzimidazole ring are not a minor feature, but rather a critical teaching of the reference. (See DTX 1035; Hopfinger Aff. ¶ 48, 75.)
51. Among Byk Gulden's approximately 80 specifically disclosed compounds with fluorinated alkoxy substituents on the benzimidazole ring, four also feature asymmetrical substitution at the pyridine ring, with a 3-position methyl, a 4-position methoxyethoxy, and no substitution at the 5-position. (DTX 1035 at DRLRAB 4135, lns. 1-2, DRLRAB 4136, lns. 29-30, DRLRAB 4137, lns. 8-9, DRLRAB 4138, lns. 36-37; seealsoDTX 103, '013 application, at DRLRAB 2631.)
52. Defendants contend that Byk Gulden specifically teaches compounds with methoxypropoxy substituents at the 4-position of the pyridine ring. (LaVoie Aff. ¶ 29, 48-52.) Plaintiff's expert, Hopfinger, far more credibly explained that Byk Gulden does not contain such a teaching. Although the Byk Gulden patent at one point specifically identifies methoxypropoxy as an example of an alkoxyalkoxy substituent that could be selected as a 4-position pyridine ring substituent (DTX 1035 at DRLRAB 4117, 4119), it does so in the course of broadly describing a genus encompassing a possible 30 billion compounds. (Hopfinger Aff. ¶¶ 61-75.) This calculation is not challenged by defendants. There is no mention or appearance of a methoxypropoxy substituent anywhere on the molecule of any of the specifically disclosed compounds listed in Byk Gulden, in any of the working examples, or among any of the compounds for which the patent provides pharmacological data. The Court agrees with Hopfinger that the one mention of methoxypropoxy in Byk Gulden appears in a "genus . . . so enormous, [that] it is not a teaching of the structure of any particular compound. In fact the genus is so broad, it provides absolutely no information to a practicing medical chemist." Byk Gulden does not teach any compound having a methoxypropoxy substituent at the 4-position of the pyridine ring. (Id.)
V. The Invention of the Compound Claimed in the '552 Patent
53. In the 1980s, anticipating that the PPI market would become increasingly lucrative, Eisai undertook a research project, known internally and in this litigation as the "SHKA" project, to discover a compound that would have a strong ability to inhibit acid secretion and would allow for a fast recovery of acid production once treatment had stopped. The former criterion determines the efficacy of the product. The latter was important because long-lasting acid inhibition was feared to cause undesired side effects. Using omeprazole as a "control" compound and with the above goals in mind, Eisai scientists worked in teams synthesizing and testing many different compounds for their ability to inhibit acid secretion. A compound that combined acid inhibition comparably effective to omeprazole but with significantly faster recovery was expected to be a commercially valuable competitor to omeprazole. (DTX 87T at ECL 120417, 120588; Murakami Dep. 9:24-10:4, 10:7-24, 12:17-22, 34:19-23, 34:25-35:114; Ueda Dep. 11:21-23, 54:3-57:10, 238:17-25, 239:2-239:3.)
54. Eisai synthesized and tested a number of compounds as part of the SHKA project. One such compound, referred to internally as SHKA 661, was synthesized in late September 1986. (DTX 1123, Response to RFA 98; DTX 50T at ECL 140766; Fujisaki Dep. 226:13-17).
55. Also as part of its SHKA project, Eisai synthesized rabeprazole, known internally as SHKA 692, in October ...