In Galderma Laboratories, LP et al v. Amneal Pharmaceuticals LLC et al, 1-16-cv-00207 (DED August 31, 2018, Order) (Stark, USDJ), Judge Stark of the District of Delaware recently found that a plaintiff was collaterally estopped from pursuing claims for patent infringement of two drug patents under a doctrine of equivalents theory based on a finding of no literal infringement in a prior case even though a doctrine of equivalents theory was not asserted in that case.

This case was originally filed in March 2016 by Galderma against Amneal Pharmaceuticals under the HatchWaxman Act, 35 U.S.C. § 271(e).  Amneal sought to bring to market a generic version of Plaintiffs’ Oracea® Capsules, a once-daily 40 milligram (“mg”) administration of doxycycline for the treatment of the papules and pustules of acne rosacea.  Galderma alleged infringement of numerous patents, some of which are generally directed to lowdose doxycycline formulations for the treatment of the papules and pustules of acne rosacea.  In February 2018, the Court held a five-day bench trial, and issued a written order thereafter. 

One of the issues Judge Stark considered in the order is whether Galderma is collaterally estopped from asserting a group of patents referred to as the Ashley I patents.  Each of the asserted claims of the Ashley I patents requires administration of a “subantibacterial amount” of doxycycline or an amount that causes “substantially no antibiotic activity” (the “sub-antibiotic” limitations).   Amneal contended that Galderma was collaterally estopped from asserting the Ashley I patents based on a finding in a prior case (the “Mylan” case) that 40 mg doxycycline administered once-daily does not meet the “sub-antibacterial amount” limitation of the Ashley I patents. Galderma disagreed, arguing that the instant case does not present the “identical” issue as Mylan.  Galderma argued that the issue of doctrine of equivalents infringement was never litigated in Mylan and should be considered separate from literal infringement for purposes of collateral estoppel.

In considering the issue, the Court first noted a party asserting collateral estoppel must prove: (1) the previous determination was necessary to the decision, (2) the identical issue was previously litigated, (3) the issue was actually decided on the merits and the decision was final and valid, and (4) the party being precluded from re-litigating the issue was adequately represented in the previous action.  The Court then reasoned that three of the four elements are not in dispute in this case.  Galderma does not argue that the Court’s previous finding of non-infringement of the Ashley I patents was not necessary to the decision in Mylan, which Galderma concedes was final and valid.  Nor does Galderma argue that it was not adequately represented in Mylan, where it was represented by the same counsel as it is in this case.

Instead, the disagreement was over whether Galderma’s doctrine of equivalents infringement theory presented the “identical issue” that was previously litigated and decided on the merits in Mylan.  Judge Stark concluded that it does.  In Mylan, the Court decided that a 40 mg once-daily administration of doxycycline does significantly inhibit the growth of microorganisms and, therefore, fails to meet the subantibacterial limitation of the Ashley I patents.  Here, Amneal’s ANDA product undisputedly involves once-daily administration of 40 mg doxycycline.  Thus, “in order to prevail against Amneal on its claim for infringement of the Ashley patents, Galderma would have to prevail on the ‘identical issue’ it previously litigated – and lost – in the Mylan Action.”

Galderma’s argument in response was that, for purposes of collateral estoppel, the “issue” of doctrine of equivalents infringement, which Galderma did not raise at trial in Mylan, is a separate “issue” from literal infringement.  The Court disagreed.  Doctrine of equivalents infringement is one theory of infringement, the Court reasoned, not a distinct issue itself.

The Court analogized this reasoning with the view that invalidity, too, is a single issue for purposes of collateral estoppel, regardless of how many different theories are presented as a basis for invalidating a patent.  The Court further reasoned that having decided to pursue only one theory of infringement in Mylan, Galderma is bound by the consequences of that choice.  Namely, that collateral estoppel bars litigants from raising separate arguments in support of the same issue in a later case, where the other prerequisites for application of collateral estoppel are met.

The Court next found that the clarified construction in this case does not provide a basis for Galderma to avoid the estoppel effects of the finding of non-infringement of the Ashley I patents in Mylan.  The Court reasoned that collateral estoppel applies even if Galderma here presented new evidence that was not before the Court in Mylan.  The issue of infringement was decided in Mylan following a trial at which Galderma had a full and fair opportunity to present any evidence of infringement it wished.  Any new evidence Galderma offers now in support of its doctrine of equivalents infringement theory was neither controlling nor otherwise essential to the Court’s finding of noninfringement in Mylan.

The Court did note that it is mindful of Galderma’s warning that considering infringement to be a single issue will inevitably lead to the waste of judicial resources.  The Court’s ruling arguably incentivizes patentees to raise both literal and doctrine of equivalents infringement in all cases, so as to avoid losing on one and later being estopped from pressing the other.  However, the Court reasoned the approach Galderma urges risks incentivizing parties to withhold infringement theories in order to ensure a “second-bite at the infringement apple” in the event of a finding of non-infringement.  Galderma’s approach upends the finality of judgements that collateral estoppel aims to preserve and would require parties to relitigate infringement of the same products covered by the same patents when the issue of infringement has already been decided – a decidedly wasteful use of judicial resources.

Thus, the Court found Galderma is collaterally estopped from asserting infringement of the Ashley I patents, both literally and under the doctrine of equivalents.  This case is a strong reminder to not “withhold” any arguments, theories, or claims during litigation for fear that those arguments may later be considered waived or subject to a collateral estoppel claim.