`
`
`
`NOTE: This disposition is nonprecedential.
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`ARIUS TWO, INC., BIODELIVERY SCIENCES
`INTERNATIONAL, INC.,
`Plaintiffs-Cross-Appellants
`
`v.
`
`ALVOGEN PB RESEARCH & DEVELOPMENT LLC,
`ALVOGEN MALTA OPERATIONS LTD., ALVOGEN,
`INC., ALVOGEN GROUP, INC.,
`Defendants-Appellants
`______________________
`
`2022-1394, 2022-1449
`______________________
`
`Appeals from the United States District Court for the
`District of Delaware in No. 1:18-cv-01395-CFC-CJB, Chief
`Judge Colm F. Connolly.
`______________________
`
`Decided: December 21, 2022
`______________________
`
`HOWARD W. LEVINE, Dechert LLP, Washington, DC, ar-
`gued for plaintiffs-cross-appellants. Also represented by
`SHYAM SHANKER, New York, NY; JENNIFER SWAN, Palo
`Alto, CA.
`
` JEREMY LOWE, Leydig, Voit & Mayer, Ltd., Chicago, IL,
`argued for defendants-appellants. Also represented by
`
`
`
`Case: 22-1394 Document: 49 Page: 2 Filed: 12/21/2022
`
`2
`
`ARIUS TWO, INC. v.
` ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`DAVID AIRAN, GREGORY BAYS, KEELIN BIELSKI, JAMES
`SANNER, STEVEN H. SKLAR, ASHLEE SZELAG.
` ______________________
`
`Before CHEN, CLEVENGER, and CUNNINGHAM, Circuit
`Judges.
`
`CHEN, Circuit Judge.
`This Hatch-Waxman case involves an appeal and cross-
`appeal of the district court’s decision finding some asserted
`claims of U.S. Pat. Nos. 8,147,866 (’866 patent), 9,655,843
`(’843 patent), and 9,901,539 (’539 patent) invalid for obvi-
`ousness while finding the remaining asserted claims not
`invalid. With respect to the asserted claims found not in-
`valid, defendants-appellants Alvogen PB Research & De-
`velopment LLC, Alvogen Malta Operations Ltd., Alvogen,
`Inc., and Alvogen Group, Inc. (collectively, Alvogen) have
`not shown the district court erred in making certain evi-
`dentiary and procedural findings against Alvogen. Plain-
`tiffs-cross-appellants Arius Two, Inc., and Biodelivery
`Sciences International, Inc. (collectively, BDSI) have
`shown that the district court applied an incorrect burden
`of proof when considering the long-felt need and unex-
`pected results of the asserted claims found invalid for obvi-
`ousness. We therefore affirm-in-part, vacate-in-part, and
`remand.
`
`BACKGROUND
`A
`The asserted claims recite methods and devices for ad-
`ministering buprenorphine, an opioid, using a bi-layer film
`placed inside a patient’s cheek. See, e.g., ’866 patent col. 3
`ll. 6–31. The bi-layer film includes a bioerodable mucoad-
`hesive (BEMA) layer containing buprenorphine and a
`backing layer located between the BEMA layer and the oral
`cavity. Id. at Fig. 4A–4C and col. 3 ll. 25–31. The district
`court found that after placement inside the cheek of a
`
`
`
`Case: 22-1394 Document: 49 Page: 3 Filed: 12/21/2022
`
`ARIUS TWO, INC. v.
`ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`3
`
`patient, the BEMA layer adheres to the cheek’s surface and
`is dissolved by saliva, allowing the buprenorphine to per-
`meate into the cheek’s tissue where it enters the blood. Bi-
`oDelivery Scis. Int’l, Inc. v. Alvogen PB Rsch. & Dev. LLC,
`576 F. Supp. 3d 184, 191-92 (D. Del. 2021) (Opinion). As
`the BEMA layer dissolves, the backing layer prevents the
`buprenorphine from entering the oral cavity and being in-
`gested. Id.
`BDSI sued Alvogen after Alvogen submitted an Abbre-
`viated New Drug Application to FDA for approval to mar-
`ket a generic version of BDSI’s Belbuca® drug product. Id.
`at 189. BDSI asserted the following claims against Al-
`vogen at trial:
` Claims 4 and 5 of the ’866 patent (the Pharmacoki-
`netic Claims), which claim pharmacokinetic proper-
`ties;
` Claims 9 and 20 of the ’539 patent (the pH of the
`Backing Layer Claims), which claim both a certain
`pH of the BEMA layer and a certain pH of the back-
`ing layer; and
` Claims 3 and 10 of the ’866 patent; and claims 8, 9,
`and 20 of the ’843 patent (the pH of the BEMA Layer
`Claims), which claim a certain pH of the BEMA
`layer.
`Id. at 189–90.
`
`B
`After a bench trial, the district court found that the
`Pharmacokinetic Claims were not invalid, the pH of the
`Backing Layer Claims were not invalid, and the pH of the
`BEMA Layer Claims were invalid as obvious.
`As part of its obviousness findings, the district court
`determined that a skilled artisan would have known bu-
`prenorphine exhibits a high first-pass effect. Id. at 200.
`This means when buprenorphine is ingested, the liver
`
`
`
`Case: 22-1394 Document: 49 Page: 4 Filed: 12/21/2022
`
`4
`
`ARIUS TWO, INC. v.
` ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`breaks down the compound into less effective chemicals,
`thereby greatly decreasing the drug’s bioavailability be-
`cause less buprenorphine reaches the blood plasma. Id. at
`196. The district court also considered a prior art reference
`teaching an adhesive bi-layer film to administer a variety
`of drugs, including opioids, producing “excellent bioavaila-
`bility, fast onset, and sustained delivery.” Id. at 197–98,
`200 (citing J.A. 60929 at [0131]). The district court also
`found a skilled artisan would have considered both the sol-
`ubility and absorption rate of buprenorphine into the mu-
`cosal membrane in order to maximize bioavailability (as
`measured by the portion of the drug that reaches the blood
`plasma). Id. at 201; see also id. at 196. Specifically, the
`district court found that a skilled artisan would have rec-
`ognized buffering a buprenorphine solution to a pH range
`between about 4 and 6 would likely maximize bioavailabil-
`ity by providing good solubility and absorption. Id. at 201–
`02.
`
`The district court held the Pharmacokinetic Claims not
`invalid because Alvogen failed to show a skilled artisan
`would have been motivated to combine the prior art refer-
`ences and waived its inherency argument by failing to raise
`the argument in the pre-trial order. Id. at 202–03 n.4, 203.
`The district court also held the pH of the Backing Layer
`Claims not invalid because Alvogen failed to show the pH
`of the backing layer was inherently present in the prior art
`and because secondary considerations supported a finding
`of nonobviousness. Id. at 209. However, the district court
`held the pH of the BEMA Layer Claims invalid as obvious
`because a skilled artisan would have been motivated to
`combine certain prior art references with a reasonable ex-
`pectation of success to arrive at the claimed invention. Id.
`at 200–02, 206. With respect to the pH of the BEMA Layer
`Claims, the district court also stated BDSI had not: (1)
`“clearly and convincingly” shown evidence of a long-felt
`need, (2) shown the prior art taught away, or (3) shown un-
`expected results. Id. at 203–05.
`
`
`
`Case: 22-1394 Document: 49 Page: 5 Filed: 12/21/2022
`
`ARIUS TWO, INC. v.
`ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`5
`
`Alvogen timely appealed. We have jurisdiction under
`28 U.S.C. § 1295(a)(1).
`DISCUSSION
`On appeal, Alvogen argues the district court clearly
`erred as to certain findings it made in holding the Pharma-
`cokinetic Claims and the pH of the Backing Layer Claims
`not invalid. On cross-appeal, BDSI argues that the district
`court applied the incorrect legal standard when consider-
`ing secondary considerations of nonobviousness regarding
`the pH of the BEMA Layer Claims.
`Obviousness is a mixed question of law and fact. We
`review the district court’s legal conclusions regarding obvi-
`ousness de novo and any factual findings for clear error.
`Merck Sharp & Dohme Corp. v. Hospira, Inc., 874 F.3d 724,
`728 (Fed. Cir. 2017). Whether a skilled artisan would be
`motivated to combine prior art references to find obvious-
`ness and whether secondary considerations support a find-
`ing of nonobviousness are factual issues. Novartis AG v.
`Torrent Pharms. Ltd., 853 F.3d 1316, 1327 (Fed. Cir. 2017).
`A factual finding is clearly erroneous only if “despite some
`supporting evidence, we are left with the definite and firm
`conviction that a mistake has been made.” Merck, 874 F.3d
`at 728.
`
`I. Pharmacokinetic Claims
`Alvogen argues the district court clearly erred in find-
`ing that a skilled artisan would not have been motivated to
`combine three references1 with a reasonable expectation of
`
`
`1 R.E.S. Bullingham, et al., Sublingual Buprenor-
`phine Used Postoperatively: Clinical Observation and Pre-
`liminary Pharmacokinetic Analysis, 12 British J. Clinical
`Pharmacology 117 (1981) (Bullingham I); U.S. Pat. App.
`Pub. No. 2005/0147658 (Tapolsky); and European Pat.
`App. Pub. No. 0069600 (Todd).
`
`
`
`Case: 22-1394 Document: 49 Page: 6 Filed: 12/21/2022
`
`6
`
`ARIUS TWO, INC. v.
` ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`success to arrive at the Pharmacokinetic Claims. See, e.g.,
`Appellants’ Br. 37. Alvogen concedes, however, that it did
`not clearly articulate in its post-trial briefing that a skilled
`artisan would have been motivated to combine the refer-
`ences to arrive at the Pharmacokinetic Claims. Oral Arg.
`39:51–41:18. Based on the record before us, we do not dis-
`cern any clear error made by the district court in finding
`no motivation to combine the asserted prior art references
`to arrive at the Pharmacokinetic Claims. See Stryker Corp.
`v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1415 (Fed.
`Cir. 1996).
`Alvogen also argues the Pharmacokinetic Claims
`would have been obvious because they simply state an in-
`herent property of the otherwise obvious BEMA Layer
`Claims. Appellants’ Br. 45–46. The district court found
`Alvogen waived this argument by failing to raise it before
`trial. Opinion at 202–03 n.4; Order Granting Motion to
`Strike, BioDelivery Scis. Int’l, Inc. v. Alvogen PB Rsch. &
`Dev. LLC, No. 1:18-cv-01395, ECF No. 281 (D. Del. Sept.
`21, 2021) (granting BDSI’s motion to strike certain inher-
`ency arguments from Alvogen’s post-trial briefing). Al-
`vogen argues here, as it did at the district court, that its
`citation of cases generally discussing inherency in its pre-
`trial order avoids waiver. Appellants’ Reply Br. 49–50.
`However, Alvogen has not shown where in the pre-trial or-
`der it actually raises any argument with respect to the in-
`herency of the Pharmacokinetic Claims. Accordingly, the
`district court did not err in finding Alvogen’s inherency ar-
`gument waived.2
`
`
`2 Contrary to Alvogen’s argument that the district
`court’s footnote 4 suggests Alvogen did not waive all possi-
`ble inherency arguments (Appellants’ Reply Br. 49), foot-
`note 4, when read in light of the district court’s order
`granting BDSI’s motion to strike Alvogen’s inherency
`
`
`
`
`Case: 22-1394 Document: 49 Page: 7 Filed: 12/21/2022
`
`ARIUS TWO, INC. v.
`ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`7
`
`We affirm the district court’s conclusion that the Phar-
`macokinetic Claims are not invalid.
`II. pH of the Backing Layer Claims
`Alvogen argues that the district court erred in finding
`the pH of the Backing Layer Claims not invalid because
`Alvogen showed that the claimed backing layer pH was in-
`herent in the prior art. See, e.g., Appellants’ Br. 54. Al-
`vogen explains its expert testified, and BDSI did not
`dispute, that the pH of the backing layer of Belbuca® was
`between 4.5 and 4.7. Alvogen’s expert further testified that
`Belbuca® and the prior art formulation have “identical in-
`gredients present in materially identical amounts,” and be-
`cause the formulations are nearly the same, one would
`expect both formulations to have the same pH, i.e., a pH
`between 4.5 and 4.7. Appellants’ Br. 58–60. Thus, Alvogen
`argues the prior art inherently includes the claimed pH
`range of the backing layer in the ’539 patent (between
`about 4.0 and about 4.8). Id.
`In response, BDSI highlights an inventor declaration
`submitted during the prosecution of the ’539 patent recit-
`ing results showing—on average—the pH of the backing
`layer of the prior art was 5.61, which is outside the ’539
`patent’s claimed range. Cross-Appellants’ Br. 52 (citing
`J.A. 69125).
`As a preliminary matter, Alvogen contends the district
`court abused its discretion by considering the inventor dec-
`laration as evidence because it is hearsay. Appellants’ Re-
`ply Br. 2–4, 61. BDSI responds that the district court
`properly considered the declaration because Alvogen en-
`tered it into evidence as an admission of a party opponent
`without limiting the purpose for which the declaration
`could be used and questioned its own expert regarding the
`
`argument, is properly understood as finding Alvogen’s in-
`herency argument waived.
`
`
`
`Case: 22-1394 Document: 49 Page: 8 Filed: 12/21/2022
`
`8
`
`ARIUS TWO, INC. v.
` ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`declaration’s content. Cross-Appellants’ Br. 53–54. Be-
`cause the inventor declaration was introduced by Alvogen
`without any limitation on its use, we find that the district
`court did not err by considering the inventor declaration for
`all that it discloses. See Ohler v. United States, 529 U.S.
`753, 755 (2000) (explaining that “a party introducing evi-
`dence cannot complain on appeal that the evidence was er-
`roneously admitted”).
`Regarding the district court’s finding that Alvogen did
`not show the pH of the backing layer to be inherent in the
`prior art, we find no clear error in the district court’s rea-
`soning. The district court weighed Alvogen’s expert’s tes-
`timony with BDSI’s inventor declaration and found that
`“the incompatible representations in the record” indicated
`Alvogen had not proven with clear and convincing evidence
`that the prior art taught a backing layer with the claimed
`pH. Opinion, 576 F. Supp. 3d at 208–09. The district court
`also found the only evidence offered by Alvogen to rebut the
`credibility of the inventor declaration was testimony from
`Alvogen’s expert stating the pH measured in the declara-
`tion “didn’t make sense.” Id. at 209 n.7. The district court
`also found changing the backing layer pH unexpectedly af-
`fected the bioavailability of buprenorphine—a lower back-
`ing layer pH resulted in increased bioavailability. Id. at
`209. We find no clear error in the district court’s findings
`and therefore affirm the district court’s decision holding
`the pH of the Backing Layer Claims not invalid.
`III. pH of the BEMA Layer Claims
`BDSI, on cross-appeal, argues the district court
`wrongly applied the clear and convincing standard when
`analyzing certain secondary considerations of nonobvious-
`ness—i.e., the long-felt need and unexpected results of the
`
`
`
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`ARIUS TWO, INC. v.
`ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`9
`
`pH of the BEMA Layer Claims.3 Alvogen contends the dis-
`trict court applied the correct standard and that any lan-
`guage
`in
`the Opinion
`indicating otherwise was
`inadvertent.
`
`A
`The Opinion correctly states that the patent challenger
`must prove obviousness by clear and convincing evidence,
`id. at 194, and that a fact finder must consider secondary
`considerations of nonobviousness before reaching an obvi-
`ousness conclusion, id. at 193–94 (citing In re Cycloben-
`zaprine Hydrochloride Extended-Release Capsule Pat.
`Litig., 676 F.3d 1063, 1079 (Fed. Cir. 2012)). Secondary
`considerations must be established by a preponderance of
`the evidence. See Apple Inc. v. Samsung Elecs. Co., 839
`F.3d 1034, 1053 (Fed. Cir. 2016) (en banc).
`The Opinion does not explicitly identify a burden of
`proof by which the patent owner must prove secondary con-
`siderations. The Opinion did find, however, that BDSI
`failed “to show clearly and convincingly that Belbuca® an-
`swered a long felt, but unresolved need in medicine.” Opin-
`ion, 576 F. Supp. 3d at 203 (emphasis added). BDSI argues
`this statement shows the district court applied the wrong
`
`
`3 BDSI also argues on appeal that the district court
`erred in its motivation to combine with a reasonable expec-
`tation of success analysis because even if a skilled artisan
`would have expected some increase in bioavailability after
`decreasing the pH of the BEMA layer, a skilled artisan
`would not have expected an increase to the degree ob-
`tained. Cross-Appellants’ Br. 69. We do not find this ar-
`gument in BDSI’s post-trial briefing and therefore do not
`consider it on appeal. See MeadWestVaco Corp. v. Rexam
`Beauty & Closures, Inc., 731 F.3d 1258, 1271 (Fed. Cir.
`2013) (explaining that a theory not ultimately raised at a
`bench trial is waived).
`
`
`
`Case: 22-1394 Document: 49 Page: 10 Filed: 12/21/2022
`
`10
`
`ARIUS TWO, INC. v.
` ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`standard in assessing long-felt need. Cross-Appellants’ Br.
`65–66. Alvogen argues that the district court’s word choice
`was inadvertent error, and regardless of the exact lan-
`guage used, the district court’s extensive analysis of the ev-
`idence presented and
`recognition
`that
`secondary
`considerations must be considered show the district court
`applied the correct standard. Appellants’ Reply Br. 21.
`Based on our review, the fairest reading of the Opinion
`is that it incorrectly required BDSI to prove long-felt need
`by clear and convincing evidence. We cannot say this is
`harmless error. While it is true the district court never ex-
`plicitly stated it applied the heightened “clear and convinc-
`ing”
`standard
`to BDSI’s evidence of
`secondary
`considerations, the district court did not state the proper
`standard either. Nor could we identify the correct standard
`being clearly stated for the district court in the parties’ pre-
`trial order. Furthermore, the Opinion’s analysis used the
`language of the heightened “clear[] and convincing[]”
`standard, and Alvogen has not persuasively shown that
`this was inadvertent. Although the district court thor-
`oughly analyzed the evidence presented at trial, the dis-
`trict court’s thorough analysis and recognition that
`secondary considerations must be considered do not indi-
`cate that it would have reached the same conclusion re-
`garding BDSI’s long-felt need evidence based on a more
`lenient standard. Therefore, we find the district court ap-
`plied an incorrect standard in considering the long-felt
`need of the pH of the BEMA Layer Claims.
`B
`BDSI also argues the district court applied the same
`incorrect heightened evidentiary standard to its analysis of
`unexpected results, and under the correct standard, the
`district court should have found evidence of unexpected re-
`sults. Cross-Appellants’ Br. 66–69. Instead of arguing that
`the district court did not apply a heightened standard, Al-
`vogen responds
`to BDSI’s substantive arguments
`
`
`
`Case: 22-1394 Document: 49 Page: 11 Filed: 12/21/2022
`
`ARIUS TWO, INC. v.
`ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`11
`
`regarding the district court’s findings of unexpected re-
`sults. Appellants’ Reply Br. 25–30. Alvogen’s arguments
`here are no more persuasive than its arguments with re-
`spect to long-felt need. For the same reasons as discussed
`above, we find the district court did not apply the proper
`standard in considering the unexpected results of the in-
`ventions covered by the pH of the BEMA Layer Claims.
`****
`Because the district court should have considered the
`secondary considerations evidence presented to it under
`the preponderance of the evidence standard, we vacate the
`district court’s judgment regarding obviousness of the pH
`of the BEMA Layer Claims and remand.4
` CONCLUSION
`We have considered both Alvogen and BDSI’s remain-
`ing arguments and do not find them persuasive. For the
`foregoing reasons:
` We affirm the district court’s finding that the Phar-
`macokinetic Claims (claims 4 and 5 of the ’866 pa-
`tent) and the pH of the Backing Layer Claims
`(claims 9 and 20 of the ’539 patent) are not invalid;
`and
` We vacate the district court’s judgment that the pH
`of the BEMA Layer Claims (claims 3 and 10 of the
`’866 patent; and claims 8, 9, and 20 of the ’843 Pa-
`tent) are invalid as obvious and remand for the sole
`
`4 Our decision to remand is not an invitation for ei-
`ther party to introduce additional evidence into the record.
`We only ask the district court to re-evaluate the evidence
`already presented at trial to determine whether the evi-
`dence—although not sufficient to meet the clear and con-
`vincing standard—is sufficient to meet the preponderance
`of the evidence standard.
`
`
`
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`
`12
`
`ARIUS TWO, INC. v.
` ALVOGEN PB RESEARCH & DEVELOPMENT LLC
`
`purpose of reconsidering the evidence already pre-
`sented at trial regarding long-felt need and unex-
`pected results under the correct evidentiary
`standard.
`AFFIRMED IN PART, VACATED IN PART, AND
`REMANDED
`COSTS
`
`No costs.
`
`