Eli Lilly And Company v. American Cyanamid Company

82 F.3d 1568 (1996)

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Nature of the Case

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Facts

Cefaclor is a member of the class of cephalosporin antibiotics, all of which are based on the cephem nucleus. There are many different cephem compounds, but only a few have utility as antibiotic drugs. Each of the known commercial methods for producing cefaclor requires the production of an intermediate cephem compound known as an enol. Once the desired enol cephem intermediate is obtained, it is then subjected to several processing steps in order to produce cefaclor. P developed cefaclor and patented it in 1975. P obtained several patents covering different aspects of the manufacture of cefaclor, including processes for producing enol cephem intermediates. Many of those patents have now expired. In 1995, P purchased the '085 patent, which defines a method of producing enol cephem compounds, including what is called 'compound 6,' an enol cephem similar to the one P uses in its process for manufacturing cefaclor. The '085 patent will expire on July 3, 1996. Compound 6 differs from cefaclor because it has a hydroxy group at the 3-position on the cephem nucleus, a para-nitrobenzyl carboxylate ester at the 4-position, and a phenylacetyl group at the 7-position. Cefaclor has a chlorine atom at the 3-position, a free carboxyl group at the 4-position, and a phenylglycyl group at the 7-position. To go from compound 6 to cefaclor requires four distinct steps. On April 27, 1995, Ds obtained permission from the FDA to distribute cefaclor in this country. Ds have obtained large quantities of cefaclor that were manufactured in Italy by Biochimica Opos, S.p.A. (Opos) who is also a defendant. On April 27, 1995, Ds obtained permission from the FDA to distribute cefaclor in this country. Ds have obtained large quantities of cefaclor that were manufactured in Italy by Biochimica Opos, S.p.A. (Opos) who is also a defendant. That same day, P obtained the rights to the '085 patent and filed suit against Ds. P also requested a preliminary injunction. The court denied the motion. The Process Patent Amendments Act makes it an act of infringement to import, sell, offer to sell, or use in this country a product that was made abroad by a process protected by a U.S. patent. §271(g). The Act does not apply if the product made by the patented process is 'materially changed by subsequent processes' before it is imported. §271(g)(1). The district court found that because the processing steps necessary to convert compound 6 to cefaclor ''change the physical or chemical properties of the product in a manner which changes the basic utility of the product,'' P was not likely to succeed on its claims that Ds infringed P's rights under claim 5. P appealed.