981 F.3d 1030
Fed. Cir.2020Background
- Vectura sued GSK for infringing U.S. Patent No. 8,303,991, which claims "composite active particles" for pulmonary delivery; claim 3 requires magnesium stearate as the additive.
- The accused products were GSK’s Ellipta inhalers (Breo, Anoro, Incruse) whose blistered formulations contain lactose excipient and, in many blisters, magnesium stearate; GSK mixes magnesium stearate with lactose first, then adds active drug.
- The patent specification describes high-energy milling to fuse additive particles onto active particles, but the claims recite the composite particles (not the milling method); the district court construed "composite active particles" without a process limitation and defined the "promotes the dispersion" limitation comparatively (coated active v. unmodified active).
- A jury found validity, direct and willful infringement of claim 3, and awarded a 3% royalty on ~$2.99 billion in sales (about $89.7M for the infringement period). GSK moved for JMOL/new trial and appealed.
- GSK’s appeal raised four issues: (1) insufficient evidence that the additive "promotes dispersion," (2) improper refusal to import a high-energy milling process into the claim, (3) flaws in Vectura’s damages theory (use of a 2010 license and total-sales royalty base, omission of a royalty cap), and (4) prejudicial emphasis on GSK’s multi-billion dollar sales and a "pennies on the dollar" argument.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for "promotes the dispersion" | Vectura relied on Study 2 plus other tests, expert testimony, and GSK documents showing coating active with Mg stearate improves dispersion | GSK said Study 2 was a flawed control, not representative of commercial mixes, and did not support umeclidinium; thus insufficient evidence | Affirmed: substantial evidence supported the jury (Study 2 plus other testing, expert testimony, and GSK documents showed coating active ingredient improves dispersion) |
| Claim construction: import high-energy milling into "composite active particles" | Vectura: term is structural; specification’s milling is a preferred method, not required; prosecution distinguished prior art based on particle structure | GSK: specification and prosecution disavowed non-milling processes; applicants distinguished Bosch by asserting an "aggressive milling" requirement | Affirmed: court refused to import a process limitation—specification shows preference not requirement; prosecution distinguished structure, not invention-by-milling |
| Damages methodology: use of 2010 license and total-sales base (no cap) | Vectura: 2010 license was a sufficiently comparable license with built-in apportionment; adopting its 3% rate and total-sales base was proper and jury could discard the cap given changed circumstances | GSK: needed apportionment to avoid entire-market-value rule; 2010 license included many patents and a royalty cap that should be retained | Affirmed: district court did not abuse discretion—2010 license was comparable, built-in apportionment justified total-sales base, jury reasonably rejected the cap |
| Prejudicial emphasis on GSK sales and "pennies on the dollar" argument | Vectura used sales figures to explain damages analysis and comparability and briefly compared the 3% royalty to GSK’s profits | GSK: references to multi-billion dollar sales and framing damages as "pennies" were inflammatory and prejudicial, warranting new trial | Affirmed: some statements were improper, but court found no prejudice sufficient for a new trial; references to sales were partly admissible and necessary for the damages theory |
Key Cases Cited
- Continental Circuits LLC v. Intel Corp., 915 F.3d 788 (Fed. Cir. 2019) (declined to import a process limitation into a product claim when specification shows process is preferred)
- Andersen Corp. v. Fiber Composites, LLC, 474 F.3d 1361 (Fed. Cir. 2007) (imported a process limitation where specification and prosecution made the process an essential requirement)
- Teva Pharm. USA, Inc. v. Sandoz, Inc., 574 U.S. 318 (U.S. 2015) (standard of review for claim construction with subsidiary factual findings)
- Commonwealth Sci. & Indus. Rsch. Org. v. Cisco Sys., Inc., 809 F.3d 1295 (Fed. Cir. 2015) (comparable-license evidence can supply built-in apportionment)
- Bio-Rad Labs., Inc. v. 10X Genomics Inc., 967 F.3d 1353 (Fed. Cir. 2020) (discussing use of comparable licenses in reasonable-royalty calculations)
- Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970) (Georgia-Pacific factors for reasonable royalty calculation)