Schwarz Pharma and Warner Lambert v. Paddock Labs (Fed. Cir. 2007)
Schwarz sued after Paddock filed an ANDA for FDA approval to sell generic forms of Schwarz’s Univasc ACE inhibitor. Under 35 USC 271(e), the act of filing an ANDA is a form of patent infringement. Paddock won on summary judgment of non-infringement.
Standing: Schwarz is the exclusive licensee. Warner-Lambert actually owns the patent. On numerous occasions, the CAFC has held that the patent owner must be a named plaintiff in any patent infringement action. (An exclusive-licensee does not have sufficient standing on its own). The question on appeal is whether the patent owner must be part of an appeal as well.
Without any statutory or precedential guidance, the CAFC was forced to create its own rule — holding that – unlike district court standing – appeals to the CAFC do not necessarily need to include the patent holder.
The district court standing requirement is explained as a method of avoiding the potential of a defendant facing separate actions from a patent holder and its exclusive licensee. Because there is ‘no such danger’ for appeals, the CAFC found that the ‘prudential’ standing requirement is not necessary.
Prosecution History Estoppel: As a reminder not to rely on the doctrine of equivalents (DOE), the appellate panel held that DOE coverage was excluded based on the patentee’s narrowing amendment during prosecution. In its attempted end-run, Schwarz argued the amendment should not exclude DOE coverage for the accused product containing MgO because MgO was not covered by the originally filed claim. The CAFC rejected that argument — Somehow the court could not wrap its head around Schwarz’s argument that MgO was not an “alkali or alkaline earth metal salt” as originally claimed.
Notes: Interestingly, the court appears to have only applied a shorthand analysis for construing the original scope of the claims.
Bleeker is absolutely right. The Federal Circuit divides exclusive licensees into two categories: (1) those with “all substantial rights” under the patents and (2) those without.
The difference is the scope of the license grant. If the licensee’s rights are really tantamount to ownership of the patent, then it is treated as an assignee for standing purposes. (I.e., can bring suit by itself.)
If the rights are less extensive, so that it only has certain exclusive rights (e.g., exclusive rights in one geographical region, or in a particular field), then it is a true exclusive licensee. It has standing under Article III to bring a lawsuit, but has to join the owner as a prudential matter so court has all of the interested parties before it.
The Federal Circuit isn’t always a model of clarity. It sometimes uses the term “exclusive licensees” imprecisely to refer to those in the second category. It clarifies here that this licensee did not have all substantial rights… i.e., was a “true” exclusive licensee.
“An exclusive-licensee does not have sufficient standing on its own”
I thought an exclusive licensee could sue as along as the EL had been assigned the substantial rights of the patent? Am I needing to pay better attention in Patent Licensing class?
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