Hznp Medicines LLC v. Actavis Laboratories Ut, Inc., 940 F.3d 680

Background

Horizon owns multiple patents covering PENNSAID® 2% (topical diclofenac) divided into method-of-use patents (e.g., claim 10 of the ’450 patent) and formulation patents (e.g., claim 49 of the ’838 patent). PENNSAID® 2% is a twice-daily topical diclofenac formulation; PENNSAID® 1.5% is the prior product with more frequent dosing.
Actavis filed an ANDA with a Paragraph IV certification seeking to market a generic of PENNSAID® 2%, prompting Hatch‑Waxman litigation by Horizon in the District of New Jersey.
At Markman, the district court found three claim elements in the formulation patents indefinite: “impurity A,” a “degrades <1% over 6 months” limitation, and the phrase “consisting essentially of” (because the specification’s identified "basic and novel properties," especially “better drying time,” were not definite).
The district court granted summary judgment that Actavis’s proposed label did not induce infringement of the method‑of‑use patents (label merely permits, not encourages, post‑treatment application such as sunscreen).
At trial only claim 12 of the ’913 patent remained; the court found it not obvious and enjoined Actavis. The Federal Circuit affirmed: indefiniteness rulings and summary judgment for non‑inducement were upheld, and claim 12 was held nonobvious.

Issues

Issue	Plaintiff's Argument (Horizon)	Defendant's Argument (Actavis)	Held
Whether “impurity A” is definite	POSITA would read “impurity A” as a known diclofenac degradation (USP Compound A) using the specification and pharmacopeias	Specification lacks identity and HPLC details; a POSITA would view it as an unknown impurity	“Impurity A” indefinite; specification and extrinsic evidence do not inform identity with reasonable certainty
Whether "degrades <1% over 6 months" is definite	Degradation can be measured as recited (ties to USP Compound A)	Depends on undefined “impurity A,” so term is indefinite	Term indefinite because it relies on the already‑indefinite “impurity A”
Whether claims using “consisting essentially of” are definite	Listing ingredients suffices; basic and novel properties need not be in the claims; POSITA can determine boundaries from spec and art	The phrase permits unlisted ingredients that don’t materially affect basic/novel properties, so those properties must be definite under Nautilus	Court applied Nautilus to the basic/novel‑property inquiry and held “consisting essentially of” indefinite here because the specification’s identified basic/novel property “better drying time” was indefinite
Whether Actavis’s label induces infringement of method‑of‑use claims	Label tracks the claimed method and therefore shows specific intent to induce; warnings (e.g., to wait before applying sunscreen) will lead to infringing uses	Label merely permits/appraises what to do if a patient chooses to apply something later; it does not encourage or direct the infringing step	Summary judgment: no inducement. Label permits noninfringing uses and does not demonstrate specific intent to encourage infringement

Key Cases Cited

Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898 (2014) (definiteness standard: claims must inform POSITA of scope with reasonable certainty)
Interval Licensing LLC v. AOL, Inc., 766 F.3d 1364 (Fed. Cir. 2014) (standard of review and definiteness principles)
PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351 (Fed. Cir. 1998) (meaning and effect of “consisting essentially of” in composition claims)
AK Steel Corp. v. Sollac & Ugine, 344 F.3d 1234 (Fed. Cir. 2003) (specification can supply a threshold for permitted unlisted components)
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002) (patent boundary clarity and public notice policy)
Takeda Pharm. U.S.A., Inc. v. West‑Ward Pharm. Corp., 785 F.3d 625 (Fed. Cir. 2015) (inducement requires active steps encouraging direct infringement; label‑based intent analysis)
AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042 (Fed. Cir. 2010) (label‑based inducement: whether proposed labeling instructs users to perform the patented method)
Media Rights Techs., Inc. v. Capital One Fin. Corp., 800 F.3d 1366 (Fed. Cir. 2015) (indefiniteness when multiple reasonable meanings exist)
Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018) (look first to claim language; when extrinsic evidence informs POSITA understanding, review for clear error)
Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 845 F.3d 1357 (Fed. Cir. 2017) (use of extrinsic evidence to determine what a POSITA would understand from the specification)