407 F.Supp.3d 462
D. Del.2019Background
- Bayer sued Baxalta (and Nektar) asserting infringement of U.S. Patent No. 9,364,520 (the '520 patent), directed to pegylated (PEG-conjugated) full‑length human factor VIII with PEG attached at the B‑domain. Trial jury found infringement, validity, and awarded $155,190,264 in damages. Court entered JMOL for certain inducement/willfulness issues and Bayer no longer pursued claims against Nektar.
- Accused product: Adynovate, a lysine‑pegylated recombinant full‑length factor VIII approved by FDA in 2015; Baxalta conceded Adynovate retains functional factor VIII activity.
- Claim scope (asserted claims 1–3, 8) requires an “isolated polypeptide conjugate” (conjugation not random), PEG attached at the B‑domain, and sequence SEQ ID NO:4 (full‑length FVIII) or allelic variants.
- Baxalta moved for JMOL/new trial on invalidity (non‑enablement and obviousness), noninfringement, and damages; court held a jury question existed for enablement/obviousness/infringement and denied JMOL and new trial.
- Key factual disputes: whether the patent enabled non‑random lysine pegylation (patent disclosed cysteine‑targeted embodiments but not lysine ones); whether Adynovate is non‑randomly pegylated at the B‑domain and contains full‑length FVIII; and whether the damages award was supported by a reasonable royalty analysis.
Issues
| Issue | Plaintiff's Argument (Bayer) | Defendant's Argument (Baxalta) | Held |
|---|---|---|---|
| Enablement: Does the '520 patent enable the full claim scope (including non‑random lysine pegylation)? | The patent supplies the novel aspect (non‑random B‑domain pegylation) via cysteine embodiments and a POSA could, with routine skill/knowledge, practice lysine pegylation without undue experimentation. | The claims encompass lysine pegylation but the specification lacks lysine embodiments and teaches against random lysine pegylation; thus the claims are not enabled. | Denied JMOL for Baxalta — factual dispute existed; patent enabled the novel aspect and jury could reasonably find no clear‑and‑convincing lack of enablement. |
| Obviousness: Are the claims obvious in view of Bossard and the prior art? | The claimed invention was not obvious; jury found unexpected results as secondary consideration. | Bossard and general knowledge would have motivated and yielded a reasonable expectation of success in pegylating the B‑domain. | Denied JMOL — Baxalta waived a new obviousness theory and, on merits, jury reasonably could find Bossard taught random pegylation not targeted B‑domain pegylation. |
| Infringement: Does Adynovate meet the limitations (non‑random conjugate; SEQ ID NO:4; attachment at B‑domain retaining functional activity)? | Adynovate was shown to be predominantly B‑domain pegylated, contains full‑length FVIII (party admission/label), and retains functional activity as required by claim construction. | Adynovate is result of random lysine pegylation, may not contain full‑length SEQ ID NO:4 post‑pegylation, and retained activity is not necessarily the "substantial" activity required. | Denied JMOL — substantial evidence supports jury’s finding of literal infringement on all asserted limitations. |
| Damages: Is the 17.78% royalty and $155,190,264 award legally supported? | The reasonable royalty fell within expert’s tested range (5.1%–42.4%); expert testimony supported relative bargaining positions and apportionment; marketing admissions and incremental‑value analysis supported the base and rate. | Award speculative, based on newly disclosed opinions, disgorgement of profits, exclusion of costs, and improper apportionment — so only nominal damages or a new trial should be ordered. | Denied JMOL/new trial — jury’s award lies within the evidentiary range; expert testimony was disclosed and admissible; profit‑ceiling argument insufficient; apportionment analysis was admissible and sufficient for jury. |
Key Cases Cited
- Marra v. Phila. Hous. Auth., 497 F.3d 286 (3d Cir. 2007) (standards for JMOL and viewing evidence in light most favorable to nonmovant)
- Pannu v. Iolab Corp., 155 F.3d 1344 (Fed. Cir. 1998) (standard for renewed JMOL post‑verdict)
- Perkin‑Elmer Corp. v. Computervision Corp., 732 F.2d 888 (Fed. Cir. 1984) (definition of substantial evidence)
- In re Wands, 858 F.2d 731 (Fed. Cir. 1988) (Wands factors for enablement/undue experimentation)
- Trustees of Boston Univ. v. Everlight Elecs. Co., 896 F.3d 1357 (Fed. Cir. 2018) (enablement requires teaching full scope without undue experimentation)
- Automotive Techs. Int'l, Inc. v. BMW of N. Am., 501 F.3d 1274 (Fed. Cir. 2007) (specification must enable distinct species encompassed by claim scope)
- KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (framework for obviousness analysis)
- Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221 (Fed. Cir. 2011) (royalty determination not capped by infringer's profit margin)
- PharmaStem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342 (Fed. Cir. 2007) (marketing materials can be evidence but are not per se sufficient for infringement)
- Hughes Tool Co. v. Dresser Indus., Inc., 816 F.2d 1549 (Fed. Cir. 1987) (court vacated royalty tied to erroneous profits figure; not a per se rule that royalty cannot equal infringer profit)