Process or Product? Recent Product-by-Process Case May Pose Problems for Innovators

The U.S. Court of Appeals for the Federal Circuit recently ended much of the controversy surrounding product-by-process claims in Abbott Laboratories v. Sandoz, Inc., but arguably created a new debate in the intellectual property world.  The court overruled an earlier panel decision from Scripps Clinic & Research Foundation v. Genetech, Inc., instead following the precedent set by Atlantic Thermoplastics Co. v. Faytex Corp. Atlantic Thermoplastics states that product-by-process claims are only infringed if the specific process steps that are in the original patent are used by the accused patent infringer. It is not infringement to produce the final product by any method that does not include the process steps outlined in the patent.

The suit concerned a patent held by Abbott Laboratories over a crystalline cefdinir (a broad-spectrum antibiotic) marketed under the name “Omnicef.” Abbott Laboratories argued that claims 2 through 5 of its patent (US Patent No. 4,935,507) should not have characterized the product-by-process claims as requiring performance of all of the process steps in order to find infringement of the patent. Claims 2 through 5 are as follows:

2.  Crystalline 7-[2-(2-aminothiazol-4-yl)-2-hydroxyiminoacetamido]-3-vinyl-3-cephem-4-carboxylic acid (syn isomer) which is obtainable by acidifying a solution containing 7-[2-(2-aminothiazol-4-yl)-2-hydroxyiminoacetamido]-3-vinyl-3-cephem-4-carboxylic acid (syn isomer) at room temperature or under warming.

3.  Crystalline substance of claim 2, wherein a solution containing 7-[2-(2-aminothiazol-4-yl)-2-hydroxyiminoacetamido]-3-vinyl-3-cephem-4-carboxylic acid (syn isomer) is an aqueous solution of an alkali metal salt of said compound.

4.  Crystalline substance of claim 3, wherein the acidifying of the solution is carried out at the temperature from room temperature to 40°C. at the pH from 1 to 4.

5.  Crystalline 7-[2-(2-aminothiazol-4-yl)-2-hydroxyiminoacetamido]-3-vinyl-3-cephem-4-carboxylic acid (syn isomer) which is obtainable by dissolving 7-[2-(2-aminothiazol-4-yl)-2-hydroxyiminoacetamido]-3-vinyl-3-cephem-4-carboxylic acid (syn isomer) in an alcohol, continuing to stir the solution slowly under warming, then cooling the solution to room temperature and allowing the solution to stand.

Essentially, Abbott argued that the above “process” claims should not have been interpreted to mean that these chemical steps need to be performed for infringement to occur, but rather the fact that the compound possesses these chemical properties – that is, the ability of the compound to crystallize out of the specifically named acidified solution, for example – is evidence of infringement. The court cited different courts of appeal in the United States, including the 3rd Circuit in the case Paeco, Inc. v. Applied Moldings, Inc., “A patent granted on a product claim described one process grants no monopoly as to identical products manufactured by a different process.Cochrane v. Badische Anilin & Soda Fabrik was also cited: “Unless it is shown that the process of [the patent] was followed to produce the defendant’s article, or unless it is shown that the article could not be produced by any other process, the defendant’s article cannot be identified as the product of the process of [the patent].” The court expressly overruled Scripps Clinic and concluded:

In sum, it is both unnecessary and logically unsound to create a rule that the process limitations of a product-by-process claim should not be enforced in some exceptional instance when the structure of the claimed product is unknown and the product can be defined only by reference to a process by which it can be made. Such a rule would expand the protection of the patent beyond the subject matter that the inventor has particularly point[ed] out and distinctly claim[ed].

The dissent by Judge Newman, who was in the majority for the Scripps decision, stated that Abbott Laboratories violated the well-accepted notion that patent claims are to be interpreted the same way for both validity and infringement cases. Abbott Laboratories essentially states that patent validity cases must prove both the process and product, whereas infringement cases now only have to prove the process was violated. Judge Newman states, “According to the majority, a patentee can continue to obtain a product claim using process descriptors, but such product claims are treated as process claims for infringement.”

The majority does not seem concerned with this apparent contradiction: “For this reason, even though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself.” This idea is referenced in the Manual of Patent Examining Procedure (MPEP), which states that “Product-by-process claims are not limited to the manipulations of the recited steps, only the structure implied by the steps,” which seems to coincide with Abbott’s argument regarding claims 2 through 5. However, as Judge Newman pointed out, the fact that the majority did not find infringement in this case clearly shows that there are different standards for patent applications and for infringement.

The distinction that Abbott Laboratories creates between validity and infringement may not pose a problem for many patent infringement cases, but it may create problems for manufacturers of complex chemicals and pharmaceuticals which can only be described through product-by-process claims. If a patent applicant cannot describe an innovation under the rules for “pure” product claims, should the applicant suffer the (potential) consequences?  One of the problems with describing many chemical mixtures such as in the case at hand by their “properties” is that the properties in actuality are products-by-process.