Patent Docs

Celsis In Vitro, Inc. v. Cellzdirect, Inc. (Fed. Cir. 2012)

By Kevin E. Noonan --

The effects of the Supreme Court's decision in KSR Int'l Co. v. Teleflex Inc. continue to ripple unpredictably through the Federal Circuit's jurisprudence, promoting inconsistencies in obviousness determinations by the Court that seem contrary to its mandate to harmonize U.S. patent law.  The most recent illustration of this effect is in Celsis In Vitro, Inc. v. Cellzdirect, Inc., where a divided panel affirmed the grant of a preliminary injunction over a dissent based, in part, on a rigid understanding of the implications of the KSR decision.

The suit by Celsis alleged infringement of U.S. Patent No. 7,604,929, specifically a method for providing cryopreserved human hepatocytes:

A method of producing a desired preparation of multi-cryopreserved hepatocytes, said hepatocytes, being capable of being frozen and thawed at least two times, and in which greater than 70% of the hepatocytes of said preparation are viable after the final thaw, said method comprising:
    (A)  subjecting hepatocytes that have been 
frozen and thawed to density gradient fractionation to separate viable hepatocytes from non-viable hepatocytes,
    (B)  recovering the separated viable hepatocytes, and
    (C)  cryopreserving the recovered viable hepatocytes to thereby form said desired preparation of hepatocytes without requiring a density gradient step after thawing the hepatocytes for the second time, wherein the hepatocytes are not plated between the first and second cryopreservations, and wherein greater than 70% of the hepatocytes of said preparation are viable after the final thaw.

Thus, the claim recited three steps:  subjecting frozen and thawed hepatocytes to a density gradient to separate viable from non-viable cells; recovering the viable cells, and freezing the cells again that have >70% viable cells after a second thaw without requiring density gradient step.  Evidence before the District Court established that human hepatocytes are fragile and hard to cryopreserve, being very susceptible to damage when frozen and thawed and that there was an expectation in the art that repetition would make that worse, i.e., there would be even fewer viable cells after several freeze/thaw cycles.  Human hepatocytes were in short supply and there was large demand, with available sources in the art being limited to fresh tissue that is rarely available.  As a consequence, research was disrupted because it was dependent on sporadic availability of these cells.  The opinion in the art was that hepatocytes could not be productively cryopreserved because too many non-viable cells were produced, the Court noting that "experts in this field met initial attempts to freeze hepatocytes with skepticism."  The accused infringing article was a pooled multi-cryopreserved hepatocyte product allegedly produced using the claimed method (although the opinion does not give the details of the accused products "[f]or confidentiality reasons") sold in direct competition with the Celsis product (also a pooled multi-cryopreserved hepatocyte product).  The District Court (Judge Milton Shadur of the Northern District of Illinois) granted the preliminary injunction.

The Federal Circuit affirmed, in an opinion by Chief Judge Rader joined by Judge Prost, with a dissent by Judge Gajarsa.  The majority opinion recited the "four factors" considered with regard to a preliminary injunction:  "(1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships, and (4) public interest."  Defendants challenged the District Court's decision on the first prong based on non-infringement and invalidity (for obviousness).  Regarding infringement, there was a "battle of the experts" won by Celsis, perhaps in part because defendants put forward their marketing director as an expert.  The Celsis expert provided testimony on the meaning of claim term "density gradient fractionation" and then "applied the term to the accused process."  The District Court's decision regarding infringement was also based decision on construction of the term "not requiring" for performing a second density gradient fractionation as being inclusive of methods that actually perform a second density gradient fractionation (provided it is not "required").  The District Court expressly rejected defendants' construction that "not requiring" was equivalent to "prohibited," based on its interpretation that this construction incorporated a limitation from the specification into the claim (which the Court characterized as "hokum").  On this record, the Federal Circuit found no abuse of discretion by the District Court in deciding there was a likelihood that Celsis would succeed in its infringement claim.

The second issue was non-obviousness.  Evidence from both parties included a "vast proliferation of authors and articles dealing with hepatocytes and use of cryopreservation."  The District Court concluded that the claimed method was non-obvious because "not a single one of that astonishingly large body of literature was devoted to the subject of multi-cryopreservation of hepatocytes" (with the District Court noting stress on "multi").  The District Court rejected testimony from defendants' expert that one of his articles disclosed multi-cryopreservation of hepatocytes, finding that the reference was limited to fetal hepatocytes, which were not the same as adult hepatocytes.  Also, since fetal cells were replication-competent, District Court credited testimony from the Celsis expert that it was not possible to determine "whether the same cells were cryopreserved more than once" (which was conceded by defendants' expert).  This reference not the issue on appeal, however; there was another reference that taught whether single-cryopreserved hepatocytes could substitute for fresh hepatocytes (in humans, dogs and monkeys).

In reviewing the District Court's non-obviousness determination, the majority recited the Graham v. John Deere Co. analytical framework of factual inquiries regarding:  "(1) the scope and content of the prior art; (2) the level of ordinary skill in the art; (3) the differences between the claimed invention and the prior art; and (4) objective evidence of nonobviousness," citing Eli Lilly & Co. v. Teva Pharm. USA, Inc., 619 F.3d 1329, 1336 (Fed. Cir. 2010).  On this record, the majority found no abuse of discretion, while noting that defendants would be able to "expand upon the arguments it made at the preliminary injunction stage" at trial.  The majority "does not opine on the final determination, which lays in the realm of the district court in the first instance."  The opinion emphasized the unpredictability in the art, affirming the District Court's finding that "the art was a crowded field for many years and yet there was not one reference to multi-cryopreservation" and "taught away from multiple freezings."  In addition, the opinion noted that the expectation in the art was that a second freezing would result in "greater loss of cells after the second cryopreservation than after the first" and relied upon this understanding as grounds for deciding the art did not render obvious the claimed invention.

In a passage noted in the dissent, the majority specifically found that the second reference relied upon in the appeal did not provide "any teaching, suggestion, or motivation . . . that multiple rounds of freezing would somehow increase rather than decrease cell viability" and criticized defendants' argument as "vague reference[] to 'market need.'"  Rather, the majority said that "without more" this was evidence of the objective criteria of "long felt need" and thus was "supportive of non-obviousness."  And as part of its analysis, the majority found the District Court's decision to be based in art on a (negative) assessment of defendants' witnesses' credibility, something the reviewing court gives "wide discretion" to the district court, citing Conoco, Inc. v. Energy & Envtl. Int'l, L.C., 460 F.3d 1349, 1362-63 (Fed. Cir. 2006), Bristol- Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d 1226, 1236 (Fed. Cir. 2003), Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223, 1231-32 (Fed. Cir. 2007), and Agfa Corp. v. Creo Prods. Inc., 451 F.3d 1366, 1379 (Fed. Cir. 2006).  Rather, the opinion states:

Not one of LTC's experts testified to actually performing the claimed process or documenting their alleged understanding before the time of the invention, despite having the financial, scientific, and professional incentive to do so.  The district court found that LTC's experts did not predict the results of the claimed methods at the time of the invention, nor could they find any reference in the prior art suggesting that any other scientist had.

The Federal Circuit also found no abuse of discretion by the District Court in determining that the other prongs of the test, irreparable harm, balance of the hardships and the public interest, were satisfied.  "Irreparable harm" in this case included "price erosion, damage to ongoing customer relationships, loss of customer goodwill (e.g., when an effort is later made to restore the original price), and loss of business opportunities," all of which the majority found were "valid grounds for finding irreparable harm," citing Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1362 (Fed. Cir. 2008), and Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1382-83 (Fed. Cir. 2006).  The Court based its agreement on the balance of the hardships on the fact that "[defendant's] losses were the result of its own calculated risk in selling a product with knowledge of Celsis' patent," citing Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1383 (Fed. Cir. 2006).  The public interest "favors the enforcement of Celsis' patent rights" in this case because "investment in drug research and development must be encouraged and protected by the exclusionary rights conveyed in valid patents," and does not constitute an abuse of discretion because "[t]hat incentive would be adversely affected by taking market benefits away from the patentee and giving them to the accused infringer in this case."

Judge Gajarsa's dissent illustrates how the Supreme Court's KSR decision has a tendency to tip the balance between an objective assessment of the prior art as understood by one having ordinary skill in the art and its relevance to the claimed invention in favor of a court's subjective determination that an invention is obvious (the "I know it when I see it" standard).  In addition, Judge Gajarsa evinces a belief that a preliminary injunction is "an 'extraordinary and drastic' remedy" that should be denied if a defendant can raise a (presumably unrebutted) "substantial question" on the patent's validity.  Here, he writes that the District Court abused its discretion by committing legal error with regard to obviousness by holding defendants "to a clear and convincing standard of proof" and "reinvigorate[ing] the pre-KSR standard for obviousness, rigidly requiring an explicit teaching, suggestion, or motivation for multi- cryopreserving hepatocytes."

The basis for this opinion is that, in his view, the absence of "two limitations of the claimed invention" (freezing and thawing hepatocytes a second time and making the density gradient fractionation optional after the second thaw)" in the prior art did not defeat defendants' obviousness argument, because "obviousness does not require that each element of the claimed invention must be present in the prior art," citing Tegal Corp. v. Tokyo Electron Am., Inc., 257 F.3d 1331, 1349 (Fed. Cir. 2001).  Indeed, in his view "all of the claimed elements were present in the prior art," including "(1) thawing cryopreserved hepatocytes; (2) using density gradient fractionation to separate viable and non-viable cells; and (3) refreezing and rethawing the hepatocytes."  Taking each limitation individually (rather than considering the invention as a whole according to the plain language of the statute), the dissent notes that "[b]oth cryopreservation and density gradient fractionation were well known in the art at the time of the invention."  In Judge Gajarsa's opinion, the remaining step recited in the claim was "nothing more than measuring the viability of cells thawed for a second time.  If the cells have more than 70% viability, they meet this limitation; if they do not have 70% viability, they do not meet this limitation."  Citing Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 152-153 (1950), the dissent characterizes the invention as a "patent for a combination which only unites old elements with no change in their respective functions [and] obviously withdraws what already is known into the field of its monopoly."  The invention in Judge Gajarsa's view of nothing more than "[r]epeating known steps to obtain a desired result" which is not inventive, citing Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1330-31 (Fed. Cir. 2009).  The dissent also characterizes the majority's recognition that the art was unpredictable, and would have expected the claimed invention to be inoperative, as trying to "have it both ways," citing Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1364 (Fed. Cir. 2007), for the principle that "some degree of unpredictability" cannot render an invention non-obvious "so long as there was a reasonable expectation of success," despite the majority's reliance on evidence that there was no such reasonable expectation of success in this case.

The dissent also finds fault with the majority's citation of defendants' failure to provide evidence of any "teaching, suggestion or motivation" in the art as being contrary to the Supreme Court's KSR precedent, eliding the nuance that the Court corrected the Federal Circuit for rigid application of the test and, in fact, preserved the TSM test as being a useful analytical tool for deciding obviousness provided it was not rigidly applied.

The dissent illustrates the difficulties that arise from the Supreme Court's most quoted passage from KSR:

'When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill in the art has good reason to pursue the known options within his or her technical grasp,' the invention is likely obvious.

The first portion of the sentence conflates the obviousness analysis from Graham v. John Deere with one of the objective indicia of non-obviousness; it is clear that grounds for finding an invention non-obviousness ("long-felt need in the art") cannot also be a basis for finding an invention obvious ("when there is a design need or market pressure to solve a problem").  Rather, it is only when the Supreme Court's statement is taken in its entirety that the two analytical frameworks can be reconciled:  that in response to the need (long-felt or otherwise), and when there exists a "finite number of identified, predictable solutions" and (in a portion of the Supreme Court's teachings not recited in the dissent) "[i]f this leads to the anticipated success," then "it is likely the product not of innovation but of ordinary skill and common sense."  It would appear that the required expectation of success was missing under the facts of this case.

The other basis for Judge Gajarsa's disagreement with the majority relates to the burden placed on defendant in avoiding the preliminary injunction.  According to the dissenting opinion, defendants were required merely to provide evidence that the asserted claims were "vulnerable" and did not need to establish (by clear and convincing evidence) that the claims were invalid.  This amounts to merely raising a "substantial question" regarding the claims' validity according to Judge Gajarsa, citing Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001); Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997), and Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, 431 Fed. Appx. 884, 886-7 (Fed. Cir. 2011).  The District Court (and the majority) improperly shifted the burden to defendants, according to the dissent, and should have "simply decide[d] whether it is more likely than not that the patent will be proven invalid at trial," citing Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1379-80 (Fed. Cir. 2009).

Once again, these diverging standards for deciding questions of obviousness create a certain nostalgia for the wisdom of Judge Learned Hand in considering obviousnses:

The test laid down [in 35 U.S.C. § 103] is indeed misty enough.  It directs us to surmise what was the range of ingenuity of a person "having ordinary skill" in an "art" with which we are totally unfamiliar; and we do not see how such a standard can be applied at all except by recourse to the earlier work in the art, and to the general history of the means available at the time.  To judge on our own that this or that new assemblage of old factors was, or was not, "obvious" is to substitute our ignorance for the acquaintance with the subject of those who were familiar with it.  Reiner v. I. Leon Co., 285 F.2d 501 (2d Cir. 1960)

Courts, made up of laymen as they must be, are likely either to underrate, or to overrate, the difficulties in making new and profitable discoveries in fields with which they cannot be familiar; and so far as it is available, they had best appraise the originality involved by the circumstance which preceded, attended and succeeded the appearance of the invention.  Safety Car Heat & Light Co. v. General Electric Co., 155 F.2d 937 (2d Cir. 1946).

Celsis In Vitro, Inc. v. Cellzdirect, Inc. (Fed. Cir. 2012)
Panel:  Chief Judge Rader and Circuit Judges Gajarsa and Prost
Opinion by Chief Judge Rader; dissenting opinion by Circuit Judge Gajarsa

Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. (Fed. Cir. 2011)

By Kevin E. Noonan --

The Federal Circuit reaffirmed the primacy of the factual disclosures used to establish obviousness, and how deficiencies thereof can defeat an obviousness claim, in reversing an invalidity determination in Star Scientific, Inc. v. R.J. Reynolds Tobacco Co.  It also showed how persistently defendants pursue the tarnish of inequitable conduct even under circumstances where the Federal Circuit has held that no inequitable conduct occurred.

The patents-in-suit, U.S. Patent Nos. 6,202,649 and 6,425,401 (filed as a continuation of the '649 patent), were directed to methods for curing tobacco in a way that reduced the amount of a carcinogen, tobacco-specific nitrosamines (TSNAs), in the cured product used in cigarettes and other tobacco-containing products.  The patents were specifically directed to "indirect" flue curing with gas or propane heaters.  Former methods used "direct" flue curing that mixed the exhaust gasses with the tobacco, but this resulted in an oxygen-free environment that fostered the growth of bacteria on the leaves, leading to production by the bacteria of the carcinogenic TSNAs.  The patented methods can be used with either direct or indirect curing methods by using "controlled conditions" involving humidity, temperature, rate of temperature exchange, carbon monoxide levels, carbon dioxide levels, oxygen levels, and how the tobacco plants are arranged in the curing shed.  The claims specify "controlling conditions" by "determining and selecting" the "appropriate" values for these variables that results in the reduction of TSNA production "at least one").  However, the patents admit that the choice of these conditions are "more art than science," so need to choose the appropriate combination of these variables; however, the important consideration is maintaining an aerobic environment that prevents bacterial growth.

Claims 4 and 12 of the '649 patents are set forth for the Court as being representative (emphasis in the opinion):

4.  A process of substantially preventing the formation of at least one nitrosamine in a harvested tobacco plant, the process comprising:
    drying at least a portion of the plant, while said portion is uncured, yellow, and in a state susceptible to having the formation of nitrosamines arrested, in a controlled environment and for a time sufficient to substantially prevent the formation of said at least one nitrosamine;
    wherein said controlled environment comprises air free of combustion exhaust gases and an airflow sufficient to substantially prevent an anaerobic condition around the vicinity of said plant portion; and
    wherein said controlled environment is provided by controlling at least one of humidity, temperature, and airflow.

12.  The process according to claim 4, wherein the treatment time is from about 48 hours up to about 2 weeks.

The lawsuit arose after R.J. Reynolds (RJR) acquired previous licensee Brown and Williamson and terminated the license.  In addition, RJR has its own patents (referenced in the opinion as the Peele reference), issued as U.S. Patent No. 6,805,134 that specified a "not direct" heat source and curing in the absence of nitrocv oxide gas, which was performed by retrofitting direct cure barns into indirect-cure barns.

As an initial matter, the District Court granted summary judgment that the '649 and '401 patents were not entitled to priority to a provisional application, based on disclosure in the provisional that the claimed methods utilized an air flow of "at least 28,000 cubic feet per meter (CFM)" whereas the common specification of the '649 and '401 patents specified an air flow of "approximately 25,000 CFM."  As a consequence, the District Court was able to consider intervening art to be prior art, and to decide that the patentee did not disclose the best mode (based on development of the commercial embodiment (and acknowledged best mode) in the period between the provisional and non-provisional filing dates.

In an earlier decision, the Federal Circuit reversed a finding that the claims were indefinite for reciting the term "anaerobic condition" and reversed a finding of inequitable conduct for failure to disclose a purported prior art reference (termed the "Burton letter").  Despite this decision, the District Court permitted defendants to display a slide (below) during closing argument showing a shadowy person disclosing information to the PTO examiner but holding the disputed Burton letter reference behind his back, during part of closing argument relating to invalidity rather than inequitable conduct.

The jury delivered a verdict of non-infringement and invalidity based on obviousness, anticipation, indefiniteness, and failure to disclose the best mode.  The obviousness determination was based on a prior art scientific journal review relating to methods for air curing and a published Japanese patent.  In view of the District Court's decision on the priority question, the jury applied the method disclosed in the Peele '134 patent as well as the practice of methods at two farms (Spindletop and the Brown farm) as a public use (the Brown tobacco farm being under contract to RJR).  The indefiniteness determination was directed at the term "controlled environment," which the Court found as a matter of law was incapable of being construed because the disclosed "controlled environment" conditions overlapped with "conventional" curing conditions so that the skilled worker could not understand the difference.  The best mode determination was based squarely on the District Court's priority determination, since it was uncontested that the best mode commercial embodiment was not disclosed and had been developed prior to the non-provisional filing dates.  Finally, the jury found that there was no infringement, based on oxygen levels in RJR's barns alleged to be infringing.  The District Court denied Star's motions for JMOL of these adverse decisions.

The Federal Circuit, in an opinion by Chief Judge Rader, joined by Judge Linn and by Judge Dyk in part, who dissented as to the Court's decision to reverse invalidation for indefiniteness, reversed the District Court's grounds for invalidating the '649 and '401 patents, and affirmed the District Court's denial of JMOL on the jury's non-infringement decision.  The Federal Circuit also reversed the finding that the '649 and '401 patents were not entitled to the provisional filing date, on the basis that the specification satisfied the priority standard:  that the specification disclosed an adequate written description and enabled the patents' claims.

This part of the opinion was supported by an intervening decision by the USPTO in a reexamination of the '649 and '401 patents that these patents were entitled to the priority date (although the PTO found certain of the claims were invalid for obviousness).  The Court based its decision on language in the provisional specification that the recited air flow speed (in CFM) could "vary according to conditions and may be determined on a routine basis," and thus held that the District Court had improperly narrowed the claim scope based on later examples in the non-provisional application.

As a consequence of the Court granting the priority date of the provisional application to the '649 and '401 patents the best mode violation evaporated, since it was equally undisputed that the commercial method was not known at the time the provisional application was filed.  Another consequence, germane to anticipation and obviousness is that the Peele '134 patent was not prior art that could be asserted against the patents in suit.

In reversing the District Court's indefiniteness determination, the majority opinion cites Datamize LLC v. Plumtree Software Inc. for the standard that a claim must be "insolubly ambiguous" or "not amenable to construction" to be found indefinite.  However, the majority cautioned that "[a]bsolute clarity [is] not required" and that the term at issue -- "controlled environment" -- does not require disclosure of exact values for the various parameters because the skilled worker would understand the variable and empirical nature of determining these conditions.  In this the opinion cites language from the Peele '134 patent -- owned by RJR -- consistent with its interpretation of the understanding of the worker skilled in the art.

Regaring obviousness, the Court disagreed with jury verdict that the references render the claims obvious.  The opinion characterized the Japanese patent as being directed at improving fast curing to avoid "nasty odor" (an advantage not related to TSNA production) and found the Wiernik reference to be inconclusive on whether bacteria were involved in TSNA production.  In addition, the opinion notes that neither reference discusses exhaust gases or anaerobic conditions.  Thus, the Court found that there would be no motivation (or in the mantra approved by the KSR Court, "reasoned basis") for the skilled worker to combine these references to arrive at a solution to the problem of TNSA production during tobacco curing.  The Court also found significant evidence of secondary considerations, including:  a recognized, unmet need in the art for reducing TSNA in cured tobacco; unsuccessful attempts (i.e., failure) by others to solve this recognized problem; purported unexpected results (never expressly set forth in the opinion); and commercial success (ironically for RJR, using the lucrative B&W licenses as evidence thereof).

The Court reversed the jury's anticipation finding as to the Peele method because it was no longer prior art in view of the earlier priority date.  The two "public uses" were not prior art, because the Court found that the "Spindletop" use involved tobacco cured before treatment in the drying shed (so that it was not "uncured" tobacco, as required by the claims).  The "Brown farm" use did not anticipate, according to the Court's opinion, because the reported test results were below the detection threshold for TNSAs and thus provided no evidence that this method satisfied the specifically recited range of TSNA reduction required by the claims.

Finally, the Court upheld the non-infringement decision based on the jury's prerogative to believe one (RJR's) expert over another (Star's), and that the evidence did not establish that no reasonable jury could come to such a decision (i.e., the District Court properly denied Star's JMOL motion).

The Court also refused to deny Star's appeal on evidentiary rulings permitting (inter alia) display of the "shadowy figure" slide (although the Court found its use "troubling"), because Star did not show harm resulting from the objectionable evidence.

Judge Dyk dissents in part, arguing that the patents are invalid for indefiniteness -- in his view, the specification did not sufficiently distinguish the "controlled" conditions from "conventional" conditions and thus did not "particularly point out and distinctly claim" the invention so that the skilled worker could not ascertain the metes and bounds of infringing behavior.

Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. (Federal Circuit 2011)
Panel: Chief Judge Rader and Circuit Judges Linn and Dyk
Opinion by Chief Judge Rader; opinion concurring-in-part and dissenting-in-part by Circuit Judge Dyk

Unigene Laboratories, Inc. v. Apotex, Inc. (Fed. Cir. 2011)

By Kevin E. Noonan --

The Federal Circuit today issued its ruling in Unigene Labs., Inc. v. Apotex, Inc., and the decision illustrates the extent of the effects of the Supreme Court's decision in KSR Int'l Co. v. Teleflex Inc. on the Federal Circuit's obviousness jurisprudence.  In addition, the decision provides a contrast between how the Court views chemical obviousness for pharmaceutical formulations today, and the views contained in the Court's opinion in Pfizer, Inc. v. Apotex, Inc.

The case involved litigation over Unigene's drug Fortical®, a nasal formulation of salmon calcitonin for treating post-menopausal osteoporosis.  This drug is an alternative formulation of another salmon calcitonin-based drug, Miacalcin®, sold by Novartis.  The patent-in-suit was Unigene's U.S. Patent No. RE40,812, a reissue of U.S. Patent No. 6,440,392, and specifically asserted claim 19:

A liquid pharmaceutical composition for nasal administration comprising about 2,200 MRC units of salmon calcitonin, about 20 mM citric acid, about 0.2% phenylethyl alcohol, about 0.5% benzyl alcohol, and about 0.1% polyoxyethylene(2) sorbitan monooleate.

The District Court noted that calcitonin was known in the art to be difficult to administer, since it was known to be readily degraded, unstable, and poorly absorbed.  Both Miacalcin® and Fortical® contain 2200 IU salmon calcitonin, but the formulations differ:  the Novartis formulation contains sodium chloride, nitrogen, hydrochloric acid, water, and benzalkonium chloride (to promote absorption), while Unigene's formulation contains 20mM citric acid, polyoxyethylene(2) sorbitan monooleate (also termed "polysorbate 80"), phenylethyl alcohol, and benzyl alcohol.  Unigene received FDA approval of Fortical® under an NDA pursuant to 21 U.S.C. § 355(b)(2) using Miacalcin® as "reference drug."

Litigation ensued after Apotex filed an ANDA containing a Paragraph IV certification.  In its certification, Apotex asserted noninfringement, invalidity, and unenforceability for inequitable conduct.  The District Court found (on summary judgment) that the claims were nonobvious over "forty four prior art references" and that Apotex had not adduced sufficient evidence of an intent to deceive to support the inequitable conduct allegation; in this regard, the Court also refused to breach the attorney-client privilege under the crime-fraud exception.  The key for the District Court's determination of nonobviousness was that the art did not disclose using 20 mM citric acid in the formulation "to achieve 'both shelf stability and enhanced bioavailability' in a nasal salmon calcitonin formulation."  With regard to the other affirmative defenses, the District Court "held that all of Apotex's defenses and counterclaims . . . had been conceded, waived, barred, abandoned, or improperly raised."

The Federal Circuit affirmed in an opinion written by Chief Judge Rader and joined by Judges Moore and O'Malley.  In the opinion, the Court recited several rubrics from KSR that showed the nuances developed by the Federal Circuit in its application of the Supreme Court precedent.  These include:

• "Obviousness requires more than a mere showing that the prior art includes separate references covering each separate limitation in a claim under examination.  KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)."

• "Rather, obviousness requires the additional showing that a person of ordinary skill at the time of the invention would have selected and combined those prior art elements in the normal course of research and development to yield the claimed invention.  Id. at 421"

• "A person of ordinary skill at the time of the invention interprets the prior art using common sense and appropriate perspective.  KSR, 550 U.S. at 421."

The opinion cites the portion of the KSR opinion regarding the relationship between what is "obvious to try" and what is obvious:

When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.  If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill.

The opinion notes that "[a]ccordingly, when design need and market pressure may dictate a commonsensical path using a finite number of identified predictable solutions to one of ordinary skill, deviations from that path are likely products of innovation."  In addition, the opinion notes that the "teaching-suggestion-motivation (TSM)" test provides "one way to identify 'sources of evidence that an ordinary skilled artisan might have found and combined at the time of the invention,'" citing Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358, 1364-65 (Fed. Cir. 2008).

Applying these principles, the Court held that "the patent claims a new composition or formulation to deliver an FDA-approved active ingredient.  Thus, the claimed invention is not obvious if a person of ordinary skill would not select and combine the prior art references to reach the claimed composition or formulation," citing Eli Lilly v. Zenith Goldline Pharm., 471 F.3d 1369, 1380 (Fed. Cir. 2006).  Under the circumstances of this case (a reformulation of a known formulation of a known compound), the opinion states that "[a] prima facie case of obviousness in the chemical arts is often based on a known compound, called a 'lead compound,' which serves as a starting point for a person of ordinary skill developing the claimed invention," citing Eisai Co. Ltd. v. Dr. Reddy's Labs., 533 F.3d 1353, 1357 (Fed. Cir. 2008).  Such a lead compound then provides a basis to show "structural similarities" between the prior art and the claimed lead compound.  But for formulation cases "where the patented formulation was made to mimic a previously FDA-approved formulation," the Court says the term "reference composition" is a better way to frame the issue, since the "functional and pharmaceutical properties" of the composition may be more informative ("appropriate") than the chemical structure of the lead compound.  The Court then looks to the comparison between the Norvartis Miacalcin® product, which the Court finds is the substitution of 20 mM citric acid for BZK.

The Court recognized that the art provided "design need and market demand" for a nasal formulation of calcitonin, identifying the "design need" as the bioequivalent formulation, and the market demand for a composition that treats the same symptoms.  The Court's opinion then focused on the citric acid component -- in part from statements made at oral argument -- and says that "the inclusion of 'about 20 mM citric acid' in the composition provides the strongest case for nonobviousness."

Prior art references considered by the District Court and relevant to the panel opinion include U.S. Patent No. 5,912,014 (which named the inventor of the patent-in-suit as an inventor), which disclosed an oral calcitonin formulation comprising enteric coating and further disclosed experiments on the effects of citric acid on bioavailability and absorption in vivo (albeit showing but minor effects).  With regard to this reference, the opinion states that "this court agrees that no reasonable juror could conclude that the '014 patent would give a person of ordinary skill sufficient reason or motivation to use about 20 mM citric acid in a liquid nasal salmon calcitonin composition."  The Court's reasoning distinguished the formulation claimed in the '812 reissue patent from the oral formulations disclosed in the '014 patent on the difference between an oral dosage form and a liquid formulation, and the "significant" differences in route of administration and formulation.  These facts "would not cause a person of ordinary skill to replace BZK in Miacalcin® with 20 mM of citric acid in the normal course of research and development" in the Court's opinion.  In addition, other prior art referenced -- including U.S. Patent Nos. 5,124,315 and 4,476,116 -- showed only a "vague role" played by citric acid in formulations disclosed in those patents.  The Court cited the '116 patent as teaching from using citric acid as disclosed in the '812 reissue patent, because the '116 patent:

[L]ists over fifty examples, including citric acid, of pharmaceutically acceptable chelating agents to serve as absorption agents . . . .  Both parties agree that the '315 patent reports that the compounds listed in the '116 patent yielded "discouraging" test results, and that "only ammonium tartrate is a satisfactory stabilizing agent for liquid nasal compositions containing polypeptides as active ingredient [sic]."  . . .  One of ordinary skill in the art reading the '315 and '116 patents would have considered about 20 mM citric acid undesirable in a liquid nasal formulation containing salmon calcitonin."

Yet another prior art reference, the Day reference, lists benzyl alcohol and phenylethyl alcohol, two other components of the claimed formulation, as "Excipients used in aqueous nasal products."  The Court characterized this reference as follows:

BZK is one of the nine listed preservatives in Day, along with benzethonium chloride, chlorobutanol, methylparaben, phenylmercuric acetate, propylparaben, and thimerosal.  Citric acid is not included in the list of preservatives, but appears instead as a pH adjuster or buffer.  The Day reference also lists polysorbate 20 and 80 as one of three surfactants used as excipients in aqueous nasal products.  With reference to this prior art, there is no evidence to support the conclusion that a person of ordinary skill would expect a combination of citric acid, benzyl alcohol, phenylethyl alcohol, and polysorbate 80 to contain a buffer, pH adjuster, preservative, and surfactant, but no absorption enhancer or excipient to promote bioavailability.

Finally, the opinion states that the affirmatively recited limitation "about 20.0 mM citric acid" "alone supports" the District Court's nonobvious determination:

When used as an absorption enhancer in the '116 patent, citric acid was one of over fifty options.  See KSR, 550 U.S. at 421.  Further, when the prior art used citric acid at about 20 mM, as in the '315 patent, it was used only as a buffer.  There is no genuine dispute of material fact that a person of ordinary skill attempting to make a liquid composition to deliver salmon calcitonin into a human body through nasal administration, would not have considered using about 20 mM citric acid with the narrowly claimed amounts of benzyl alcohol, phenylethyl alcohol, and polysorbate 80, because the formulation would not be expected to perform properly to meet the specificity of a pharmaceutical use.  Thus, even accepting that there was a design need and market pressure to develop a pharmaceutical formulation that is bioequivalent to Miacalcin®, there is no evidence in the record that claim 19 would be an obvious solution to those motivations.

This outcome is in contrast with the decision in Pfizer v. Apotex, issued in the shadow of the (then) impending KSR decision.  That case involved a novel formulation of a known compound, amlodipine, as a besylate salt, sold under the trademark Norvasc® for treating hypertension and chronic stable and vasospastic angina.  The patent in the Pfizer case, U.S. Patent No. 4,879,303, claimed the besylate salt, while prior art (U.S. Patent No. 4,572,909) disclosed the maleate salt of the active ingredient, 2-[(2-aminoethoxy)methyl]-
4-(2-chlorophenyl)-3-ethoxycarbonyl-5-methoxycarbonyl-6-methyl-1,4-dihydropyridine.  In Pfizer, the Federal Circuit reversed a District Court finding of nonobviousness (determined under the TSM test), relying in part on a reference (Berge) that disclosed 53 FDA-approved anions for making pharmaceutically-acceptable salts, including the anion -- benzene sulphonate -- used to make amlodipine besylate.  There, the choice of salt was considered merely to reflect a design choice and the beneficial and purportedly unexpected properties were discounted by the panel.  In today's opinion, the Court appears to have returned to its prior tendency to understand that the pharmaceutical formulation arts are sufficiently unpredictable that there is a real threat of hindsight reconstruction in the face of successful novel formulations of known compounds.  As Judge Rader stated in his dissent to the Court's refusal to rehear the Pfizer case en banc, "[w]ith unpredictable pharmaceutical inventions, this court more wisely employs a reasonable expectation of success analysis," and since salt selection is unpredictable, there would be no reasonable expectation of success (as three District Court judges had previously found).

Thus, the Federal Circuit appears to have absorbed the thrust of the Supreme Court's KSR opinion, to give more credence to the skilled worker's capacity to recognize beneficial combinations of the prior art, and to consider whether the totality of the teachings of the art support the conclusion that even if it would be obvious to try, a novel formulation is "not obvious if a person of ordinary skill would not select and combine the prior art references to reach the claimed composition or formulation."

Unigene Labs., Inc. v. Apotex, Inc. (Fed. Cir. 2011)
Panel: Cheif Judge Rader and Circuit Judges Moore and O'Malley
Opinion by Chief Judge Rader

Mitsubishi Chemical Corp. v. Barr Laboratories, Inc. (Fed. Cir. 2011)

By Donald Zuhn --

Yesterday, the Federal Circuit affirmed a decision by the District Court for the Southern District of New York finding that Defendants-Appellants Barr Laboratories, Inc. and Pliva-Hrvatska d.o.o. ("Barr") infringed U.S. Patent No. 5,214,052.  The '052 patent, which is assigned to Plaintiff-Appellee Mitsubishi Chemical Corp., relates to argatroban solutions containing ethanol, water, and a saccharide.  Argatroban is an anticoagulant used in the treatment of heparin-induced thrombocytopenia.

The '052 patent discloses that the solubility of argatroban increases dramatically when it is dissolved in ethanol, water, and a saccharide.  At the time the application that issued as the '052 patent was filed, argatroban was known to have low aqueous solubility at neutral pH levels, which presented problems for its use in pharmaceutical compositions.  The '052 patent has four claims:

1.  A method for dissolving an arginineamide, comprising:
    dissolving [argatroban] and/or its salt in a solvent containing ethanol, water and a saccharide.

2.  The method according to claim 1, wherein the saccharide is at least one member selected from the group consisting of sorbitol, glucose, glycerin and sucrose.

3.  A pharmaceutical composition for injection, comprising:
    [argatroban] and/or its salt together with ethanol, water and a saccharide.

4.  The composition according to claim 3, wherein the saccharide is at least one member selected from the group consisting of sorbitol, glucose, glycerin and sucrose.

Seeking approval to market a generic version of Misubishi's Argatroban Injection product, which consists of a high concentration of argatroban dissolved in a solution of ethanol, water, and sorbitol at a pH between 3.2 and 7.5, Barr filed an Abbreviated New Drug Application (ANDA) with the FDA.  In response to Barr's ANDA filing, Mitsubishi brought suit against Barr for infringement of the '052 patent.  The parties stipulated that Barr's ANDA product would infringe all four claims of the '052 patent.  Barr answered by asserting that the claims were invalid as anticipated by an article published by Mitsubishi employee Toshihiro Yamamoto, and rendered obvious by several combinations of nine other references.

At trial, Mitsubishi and Barr battled over the proper translation of a single sentence in the Yamamoto reference that described the preparation of an argatroban solution administered to rats for experimental purposes.  The District Court considered four translations of the sentence, concluding that the translation submitted by Mitsubishi's expert was the only reliable translation.  Mitsuibishi's expert translated the relevant sentence as follows:  "In 7.5% D-sorbitol-4% ethanol, an argipidine solution dissolved under hydrochloric acid acidity (pH 1.5 to 1.7) was intraperitoneally administered at a dosage of 1 ml/kg, 15 minutes before common carotid artery occlusion."  Using this translation, the District Court determined that Yamamoto does not anticipate claims 1 and 2 because a person of ordinary skill in the art would have understood Yamamoto to teach dissolution of argatroban in hydrochloric acid alone, i.e., without ethanol or a saccharide (another Mitsubishi expert, and native Japanese speaker, testified that the disputed sentence from the Yamamoto reference should be understood to mean "in hydrochloric acid the [argatroban] was dissolved and after that it's been put into D-sorbitol and ethanol").  The District Court concluded, therefore, that the phrase "[i]n 7.5% D-sorbitol-4% ethanol" referred to how the argatroban solution was administered and not how it was dissolved.  As for claims 3 and 4, the District Court concluded that Yamamoto's argatroban solution was not "[a] pharmaceutical composition for injection" because a pharmaceutical composition must have a pH above 3 (the District Court based this conclusion on the testimony of a third Mitsubishi expert).

With respect to Barr's obviousness argument, the District Court dismissed four of Barr's nine references as not addressing argatroban solubility or methods of formulating the drug.  The District Court found that while the other five references described solvent systems including ethanol, water, and a saccharide, none of these references directed the skilled artisan to use ethanol, water, and a saccharide to dissolve argatroban.  The District Court therefore determined that the claims of the '052 patent would not have been obvious.

On appeal, Barr first challenged the District Court's selection of the Mitsubishi expert's translation of Yamamoto, arguing that two other translations were not prepared for purposes of this litigation.  The Federal Circuit noted that "[t]he district court's selection of the appropriate translation in this case was based in large part on a credibility determination, and such determinations are 'virtually never' overturned for clear error."  The opinion also discounted Barr's argument that the translation adopted by the District Court should be disregarded because it was prepared for purposes of this litigation, stating that this was "not a sufficient reason to conclude that the district court's choice of the [Mitsubishi expert's] translation was clearly erroneous."

With respect to claims 3 and 4, Barr argued that the phrase "pharmaceutical composition for injection" in the preamble of claim 3 means "a medicinal drug composition that can be administered by injection," and that this claim therefore covers any composition that includes a "medicinal drug" (i.e., argatroban), along with ethanol, water, and a saccharide, regardless of whether it can be injected into a patient with therapeutic effect.  In dismissing Barr's argument, the Court noted that "[t]he problem with Barr's construction is that the word 'pharmaceutical' in claim 3 modifies the entire 'composition' referred to in the claim, not simply the argatroban component of the composition."  The Court pointed out that "Barr's claim construction would allow a 'plainly toxic composition, such as a cleaning fluid or a pesticide,' to meet the limitations of claim 3, even though such a composition would not be medicinal under any definition of that word."  The Court "therefore reject[ed] Barr's attempt to broaden the phrase 'pharmaceutical composition for injection' to cover any composition that includes a medicinal product, regardless of its suitability for injection into humans."  Because the District Court concluded that the pH of the Yamamoto argatroban solution was below 3, and that such a solution would not be acceptable for use as a medicine, the Federal Circuit determined that Barr had failed to show by clear and convincing evidence that Yamamoto disclosed a pharmaceutical composition for injection.

As for Barr's obviousness argument, the Federal Circuit determined that the District Court did not clearly err in determining that the prior art taught away from the use of ethanol to dissolve argatroban.  The Federal Circuit also found no reason to disturb the District Court's determination that a number of Barr's references were not specific to argatroban, despite describing solvent systems including ethanol, water, and a saccharide.

Mitsubishi Chemical Corp. v. Barr Laboratories, Inc. (Fed. Cir. 2011)
Nonprecedential disposition
Panel: Circuit Judges Bryson, Dyk, and Prost
Opinion by Circuit Judge Bryson

Tyco Healthcare Group LP v. Mutual Pharmaceutical Co. (Fed. Cir. 2011)

By Donald Zuhn --

Today, in Tyco Healthcare Group LP v. Mutual Pharmaceutical Co., the Federal Circuit affirmed a decision on summary judgment by the District Court for the District of New Jersey that the claims of U.S. Patent No. 5,211,954 were invalid for obviousness.  Tyco Healthcare Group LP and Mallinckrodt, Inc. ("Tyco") own the '954 patent, which has two independent claims directed to temazepan formulations.  Claim 1 reads:

A hard gelatin capsule containing a temazepam formulation consisting essentially of 6 to 8 milligrams of crystalline temazepam having a surface area of from 0.65 to 1.1 m²/g and 95% of the temazepam having a particle size of less than 65 microns in admixture with a pharmaceutically acceptable carrier therefor.

Claim 2 differs from claim 1 only in that it recites a composition containing 7.5 mg of temazepam.  Temazepam is a hypnotic (or sleep-inducing) drug that has been marketed internationally for the treatment of insomnia since the 1970's, and has been marketed in the U.S. since 1981 (under the name Restoril®).  In 1991, Tyco's predecessor-in-interest began marketing Restoril® in 7.5 mg dosages.

Seeking approval to market a generic version of 7.5 mg temazepam, Mutual Pharmaceutical Co., Inc. filed an Abbreviated New Drug Application (ANDA) with the FDA.  In response to Mutual's ANDA filing, Tyco brought suit against Mutual Pharmaceutical Co., Inc. and United Research Laboratories, Inc. ("Mutual") for infringement of claims 1 and 2 of the '954 patent.  After Mutual received tentative approval for its ANDA, Tyco moved for a preliminary injunction.  The District Court denied Tyco's motion on the basis that Mutual's ANDA disclosed a temazepam formulation in which the crystalline temazepam had a surface area of at least 2.2 m²/g, and therefore, the disclosed formulation could not literally infringe the '954 patent.  Mutual then moved for summary judgment of noninfringement and invalidity, and the District Court granted Mutual's invalidity motion, determining that the '954 claims were obvious.  In support of this determination, the District Court noted that Restoril® capsules had been sold in the U.S. in 15 mg and 30 mg dosages more than a year before the priority date of the '954 patent, the 1983 edition of the British National Formulary ("BNF reference") directed physicians to use temazepam at a dosage of between 5 and 15 mg for the treatment of insomnia in the elderly, and the parties agreed that physicians always seek to prescribe the lowest effective dose of any medication, particularly hypnotics such as temazepam.

In affirming the District Court's determination of obviousness, the Federal Circuit noted that "[t]he only physical feature distinguishing the ’954 claims from the Restoril® 15 mg capsules is the amount of temazepam contained in the capsule."  The Court also noted that in a Supplemental New Drug Application filed for the 7.5 mg dosage, Tyco's predecessor-in-interest stated that for "[t]he formulation and manufacture of Restoril® Capsules, 7.5 mg are similar to that used for the 15 and 30 milligram capsules [and t]he formulation differs only in the reduction of the dose."  "Given that uncontested description," the Court concluded that "the only limitation of the two '954 claims that was not fully disclosed by the prior art Restoril® capsules is the lower dosage of temazepam."  As the Federal Circuit observed, that lower dosage can be found in the BNF reference, which discloses that temazepam can be used to treat insomnia and suggests the use of a dose of "10-30 mg (elderly patients 5-15 mg), increasing in severe insomnia to 60 mg."  Citing Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1322 (Fed. Cir. 2004), the Court noted that "[o]rdinarily, 'where there is a range disclosed in the prior art, and the claimed invention falls within that range, there is a presumption of obviousness.'"

On appeal, Tyco attempted to overcome this presumption of obviousness by showing unexpected results, that the 7.5 mg dosage enjoyed commercial success, and that the prior art teaches away from the claimed dosage range of 6 to 8 mg.  Tyco also contested the District Court's interpretation of the BNF reference, relying on its expert's statement that the reference "nowhere states that a temazepam dose of 5 mg, 6 to 8 mg, or 7.5 mg, is effective in treating insomnia," nor "state[s] that 7.5 mg was effective" (emphasis added).  Citing In re Spada, 911 F.2d 705, 708 (Fed. Cir. 1990), for the proposition that "[t]he discovery of a new property or use of a previously known composition, even when that property and use are unobvious from the prior art, can not impart patentability to the known composition," the Court countered that "[t]he recommendation in the BNF of a range of temazepam dosages that include the dosages claimed in the '954 patent renders obvious the claims to those dosages even in the absence of documentation in the BNF of the effectiveness of such dosages" (emphasis added).

In support of its teaching away argument, Tyco cited three references:  (1) Nicholson 1976, which discloses that subjects given a 10 mg dose of temazepam produced a "marked reduction" in the time it took to fall asleep (i.e., sleep onset latency), but "little or no increase in total sleep time" (the '954 patent, in contrast, shows both reduced sleep onset latency and increased total sleep time); (2) Nicholson 1979, which discloses that subjects given 10, 20, or 30 mg doses of temazepam showed no statistically significant change in total sleep time or sleep onset latency; and (3) Matejcek, which states that "temazepam 5-mg values were excluded from the test procedure, since this dose is known to be of no clinical importance as a hypnotic."  In response, the Federal Circuit observed that "none [of the references] states that a sleeping pill must achieve improvement on both parameters [i.e., total sleep time and sleep onset latency] in order to be considered effective."  In addition, the Court noted that contrary to the cited statement in Matejcek, that reference "did include 5 mg temazepam capsules in its test procedure and displayed results for those capsules in two tables in the article."

With regard to Tyco's argument that secondary considerations support a finding of nonobviousness, the Federal Circuit discounted Tyco's citation of the '954 specification, which describes the experimental results as being "unexpected," stating that "[u]nsupported statements in the specification . . . cannot support a finding of unexpected results."  As for Tyco's argument of commercial success (annual sales of the 7.5 mg capsules averaged more than $30 million over a decade), the Court stated that "[t]he district court acknowledged the product’s commercial success but properly found that the evidence as a whole did not overcome Mutual's strong prima facie case of obviousness."  The Federal Circuit therefore upheld the District Court's determination on summary judgment that the two claims of the ’954 patent were invalid for obviousness.

Tyco Healthcare Group LP v. Mutual Pharmaceutical Co. (Fed. Cir. 2011)
Panel: Circuit Judges Newman, Bryson, and Gajarsa
Opinion by Circuit Judge Bryson

In re Kao (Fed. Cir. 2011)

By Kevin E. Noonan --

The Federal Circuit continued its explication both of the contours of obviousness for pharmaceutical formulations after KSR Int'l Co. v. Teleflex Inc. as well as how it exercises its supervisory powers over the U.S. Patent and Trademark Office after Dickinson v. Zurko, in a decision last Friday, In re Huai-Hunk Kao et al.  The subject matter was controlled-release oxymorphone formulations, assigned to Endo Pharmaceuticals Inc. in three applications:  U.S. Application Nos. 11/680,432 (Kao, Baichwal, McCall and Lee, inventors), 12/167,859 (Kao, Baichwal, McCall and Lee, inventors), and 11/766,740 (Ahdieh, inventor).  All claims at issue were rejected as being obvious.

Controlled-release formulations are important for opioid drugs such as oxymorphone (at left) because these drugs undergo significant "first pass" metabolism by the liver, and repeated administration of immediate release formulations have deleterious side effects.  The three applications rejected by the U.S. Patent and Trademark Office provided controlled-release formulations that overcame these limitations.

All the applications had been filed under the PTO's Accelerated Examination Program, which limited the claims that were argued on appeal.  Claim 1 of the '432 application reads as follows:

1.  An analgesically effective controlled release pharmaceutical composition with a twelve hour dosing interval in the form of a tablet, comprising oxymorphone or a pharmaceutically acceptable salt thereof as the sole active ingredient in the tablet and a controlled release delivery system comprising at least one pharmaceutical excipient, wherein upon placement of the composition in an in vitro dissolution test comprising USP Paddle Method at 50 rpm in 500 ml media having a pH of 1.2 to 6.8 at 37^oC, about 15% to about 50%, by weight, of the oxymorphone or salt thereof is released from the tablet at about 1 hour in the test.

This claim was rejected for being obvious over International Publication No. WO 01/08661 ("the Maloney reference"), alone or in combination with U.S. Patent No. 5,047,248.  According to the Examiner, the Maloney reference discloses every element of the claim except the dissolution rate, and the Examiner required Applicants to demonstrate that the practice of the formulations disclosed by Maloney did not (inherently?) produce that dissolution rate.  In response, Applicants submitted declarations distinguishing the Maloney reference on the grounds that it disclosed oxycodone that showed a "markedly different bioavailability profile" than oxymorphone.  In addition, the method used to demonstrate the dissolution rate in the Maloney reference was different from the method used by Applicants, and the dissolution rates were not comparable.  Finally, Applicants asserted that their claimed formulations showed an unexpected result -- multiple peaks in blood concentration of the drug using the claimed formulation as well as commercial success of Endo's drug product.  The Examiner, affirmed by the Board, rejected these arguments and distinctions, finding that the claims were obvious because the Maloney reference disclosed oxymorphone formulations as "preferred embodiments" and the dissolution rates in the reference overlapped with the range of rates in the '432 application claims.  The Board also rejected Applicants' profferred evidence of secondary considerations because that evidence was not "commensurate in scope" with the claimed invention.

The '859 application claimed methods of relieving pain using controlled release delivery of oxymorphone:

8.  A method for treating pain in a human subject in need of acute or chronic pain relief, comprising the steps of:
    (a)  providing a solid oral dosage form comprising about 5 mg to about 80 mg oxymorphone or a pharmaceutically acceptable salt thereof in a controlled release delivery system with a release rate profile designed to provide an adequate blood plasma level over at least 12 hours to provide sustained pain relief over this same period, the sys- tem comprising a filler and a hydrophilic material, wherein oxymorphone is the sole active ingredient; and,
    (b)  administering the dosage form to the subject, wherein the oxymorphone Cmax is at least about 50% higher when the dosage form is administered to the subject under fed versus fasted conditions.

The Maloney reference was also asserted by the Examiner against the claims of the '859 application in support of an obviousness determination, substantially consistent with the ground asserted against the '432 application claims.  The Examiner, affirmed by the Board also discounted evidence of secondary considerations because that evidence was not commensurate in scope with the '859 application claims.

The claims of the '740 application were also rejected for obviousness:

21.  A method of providing extended pain relief to patients in need thereof, comprising:
    providing information that the average bioavailability of oxymorphone in an oral extended release formulation designed to have a 12 hour dosing cycle is increased by at least about 26% for subjects with renal impairment compared to that for healthy subjects, and
    providing a therapeutically effective amount of such an extended release oral dosage form of oxymorphone or its pharmaceutically acceptable salt thereof.

The obviousness rejection of these claims was based on the Maloney reference, in light of U.S. Patent Application Publication No. 2002/0032581, which disclosed a clinical evaluation kit.  As with the other two applications, evidence regarding secondary considerations was not persuasive in overcoming the obviousness rejections.

The Federal Circuit, in an opinion by Judge Linn, joined by Judge Moore and Chief Judge Rader, vacated and remanded the Board's obviousness rejection of the '432 application claims but affirmed the rejection of the '859 and '740 applications.  The Board's opinion affirming rejection of the '432 application claims on obviousness was vacated as not being supported by substantial evidence.  The PTO had based its obviousness determination on the disclosure in the Maloney reference that the formulation being prepared with oxymorphone as well as the "equivalence" of the two types of dissolution tests used by the art and the Applicants.  The Federal Circuit opinion accepts the Office's contention that it would have been obvious to substitute oxymorphone for oxycodone based on the disclosure of the reference that oxymorphone is a preferred embodiment.  However, where the Office's argument fails according to the opinion is in the determination that the formulation disclosed in the Maloney reference would have the dissolution properties required in the claim.  This is due to the differences in the assay method (the "paddle" method versus the "basket" method) and the failure of the Office to establish this by substantial evidence, particularly in view of the declaration from the Applicant to the contrary.  The deficiency in the Board's decision is that "there is a lack of direct factual support in the record for the view that the claimed range of dissolution rates actually overlaps with the dissolution rate disclosed in [the] Maloney [reference], a premise upon which the Board's reasoning is founded."

The Office tried to use evidence to support the correlation from a declaration submitted by Applicants, but erred according to the opinion because it:

[R]elied on four data points from an exhibit correlating the dissolution rates of Opana® ER, when tested by both methods, and Maloney's Formula 6, tested only by the Basket Method, and concluded, without any reasoning, that because the Basket Method dissolution in the first hour for Opana® ER was 1.3 times faster than the dissolution rate of the Paddle Method for Opana® ER, this correlation would also hold for Maloney's Formula 6.

This conclusion was formed in the face of express statements from the declarant that "there is no general correlation between the Basket and Paddle Methods," a statement supported by scientific literature citations.  The opinion states that the record is devoid of any evidence or reasoning why the declarant's statements are not accurate.  Since "substantial evidence" is "such evidence as a reasonable mind might accept as adequate to support a conclusion" (citing Consol. Edison Co. v. Nat'l Labor Relations Bd., 305 U.S. 197, 229 (1938)), the Office's unsupported conclusion does not meet the standard according to the Federal Circuit.

However, the opinion also states that the importance of the dissolution range in the claim to the obviousness issue (i.e., whether this distinction would be sufficient to render the claims non-obvious) was not before the Court, and the panel directed the Board to consider this question on remand, citing to Ormco Corp. v. Align Technology, Inc., 463 F.3d 1299, 1311 (Fed. Cir. 2006), for the principle that "overlap between [a] claimed range and [the] prior art gives rise to a presumption of obviousness where claimed range and prior art value are insubstantially different."  The panel also cited to one of the Supreme Court's most cogent statements of its obviousness jurisprudence in this regard:

When there is . . . market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill in the art has good reason to pursue the known options within his or her technical grasp.  If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.  KSR Intern. Co. v. Teleflex Inc., 550 U.S. 398, 402-403 (2007).

With regard to secondary considerations, the Board was not persuaded that Applicants' evidence of secondary considerations raised in support of the non-obviousness of any of the claims at issue, on the grounds that the evidence of unexpected results and commercial success were "not commensurate with the scope of the claims."  The panel opinion stated that the Office must consider evidence of secondary considerations when asserted, and that the evidence thereof "must be reasonably commensurate with the scope of the claims," citing In re Tiffin, 448 F.2d 791, 792 (CCPA 1971), and In re Hiniker, 150 F.3d 1362, 1369 (Fed. Cir. 1998).  While this does not require an applicant to "test every embodiment" within the scope of the claim to demonstrate secondary considerations, there must be sufficient evidence presented that would "show a correlation" throughout the scope of the claims according to the Court, citing In re Greenfield, 571 F.2d 1185, 1189 (CCPA 1978), and In re Cescon, 474 F.2d 1331, 1334 (CCPA 1973).

However, the Court characterized as "a more fundamental requirement" that there be a nexus between the evidence asserted and the "merits of the claimed invention."  Wyers v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010) (emphasis in original).  Thus, the opinion states that where the proffered "secondary consideration" is the consequence of something "other than what is both claimed and novel in the claim," a nexus is not established, citing Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358, 1369 (Fed. Cir. 2011), Ormco Corp., and In re Woodruff, 919 F.2d 1575, 1578 (Fed. Cir. 1990).

For the '432 patent, the panel found that there was not substantial evidence (indeed, there was no evidence) supporting the Board's conclusion that the asserted unexpected result (that the formulation caused "multiple peaks of oxymorphone blood concentration") "must be caused by some component of that particular disclosed controlled-release formulation."  This formed another basis for remand to the Board to "determine whether there is a nexus between the unexpected in vivo concentration profile and aspects of the claimed invention not already present in the prior art."  "[F]or the unexpected in vivo concentration profile of the applicant's product to have substantial weight, there must be a nexus to some aspect of the claim not already in the prior art, such as the claimed range of dissolution rates, as against other unclaimed prior-art dissolution rates."

Regarding the evidence of commercial success, the opinion reasserted the principle that not every embodiment of a claimed invention must be sold to demonstrate unexpected results ("'[i]t seems unlikely that a company would sell a product containing multiple, redundant embodiments of the patented invention . . . . Under the [Office's] logic, there would never be commercial success evidence for a claim that covers more than one embodiment," citing In re Glatt Air Techniques, Inc., 630 F.3d. 1026, 1030 (Fed. Cir 2011)), but found that "the record is nearly silent on whether the commercial success was caused by the merits of the invention as distinct from the prior art," forming yet another factual issue to be determined by the Office on remand.

Turning to the '859 and '740 applications, here the Court was not persuaded that the Board had erred in determining that these claims were obvious.  With regard to the '859 application, the panel agreed that the increased efficacy of administering the claimed oxymorphone formulations with food was an inherent property of the drug not limited to the claimed controlled-release formulations, relying on King Pharmaceuticals, Inc. v. Eon Labs, Inc., 616 F.3d 1267, 1275-76 (Fed. Cir. 2010), to support this proposition.  The Court also agreed that the 12-hour effectiveness limitation was disclosed in the Maloney reference.  Finally, the Court agreed with the Board, saying that "[s]ubstantial evidence supports the Board's finding that Maloney teaches a controlled release formulation using both hydrophobic and hydrophilic materials" as required by the claims at issue.

While the Court faulted the Board for failing to give proper weight to the secondary considerations asserted in support of the non-obviousness of the claims of the '859 patent, here the panel affirmed the obviousness rejection because there was "a strong showing of obviousness," consistent with the Court's post-KSR practice of discounting secondary considerations when the evidence supporting an obviousness rejection seems compelling (see "Pharmastem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)"; This is an ironic treatment of the secondary, or "objective" indicia of non-obviousness, which were intended by the Supreme Court under Graham v. John Deere Co. to rebut an obviousness determination under just those circumstances where unavoidable hindsight might lead to an erroneous conclusion.)

Finally, the opinion addresses the obviousness rejection of the '740 application, which was also affirmed.  The Applicant asserted that the "information" regarding an "undiscovered correlation between renal failure and bioavailability" rendered the claims non-obvious.  The panel considered this argument to be the same argument it rejected in King Pharmaceuticals, which also involved increasing oral bioavailability using information unappreciated in the prior art (in King, administering metaxalone with food).  This case is not "meaningfully distinct," the panel states, because "informing someone of the correlation cannot confer patentability absent a functional relationship between the informing and administering steps," citing In re Ngai, 367 F.3d 1336, 1338 (Fed. Cir. 2004), and General Elec. Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 249 (1945).  The opinion states that at least one basis for its decision regarding the obviousness of the '740 application's claim at issue is that "there is no requirement in the claim that the dosage be adjusted in response to the informing step."  In addition, "because there is no indication of who is to be informed or to whom the drug is to be administered, the claim would presumably cover a situation where a doctor informs patient A of the correlation and administers a therapeutically effective dose of controlled release oxymorphone to patient B," i.e., "there is no functional relationship between the two steps in the method."  Since merely administering controlled release oxymorphone is "squarely present in the prior art," the Board properly determined that the claims of the '740 application were obvious.

While the Court believed that the Board had erroneously failed to give proper weight to evidence of secondary considerations with regard to the '740 application claims, this error was harmless because the Applicant failed to establish the required nexus between the claimed invention and the asserted unexpected results or commercial success.

These results, while not inconsistent with prior precedent illustrate nicely how the Court is applying the rubrics set forth by the Supreme Court in KSR and how the outcome has changed due to that decision.  Arguably, for at least the '859 and '740 applications there was no teaching, suggestion or motivation to provide formulations having the specifically claimed components (as claimed in the '859 application) or with the benefit of understanding the correlation between bioavailability and renal failure (as claimed in the '740 application), and these claims might otherwise have issued without the renewed focus on the predictability of the claimed method (or the common sense of the skilled artisan at arriving at these methods).  Even with regard to the '432 application, the panel appears to believe it necessary to remind the Board of KSR's emphasis on predictability in deciding whether a claim is obvious.  This opinion reinforces the appearance that the Federal Circuit has understood the Supreme Court's interpretation of the appellate court's mandate and is doing what it can to comply.

In re Kao (Fed. Cir. 2011)
Panel:  Chief Judge Rader and Circuit Judges Linn and Moore
Opinion by Circuit Judge Linn

Duramed Pharmaceuticals, Inc. v. Watson Laboratories, Inc. (Fed. Cir. 2011)

By Donald Zuhn --

On Friday, in Duramed Pharmaceuticals, Inc. v. Watson Laboratories, Inc., the Federal Circuit reversed a decision by the District Court for the District of Nevada on summary judgment that the asserted claims of U.S. Patent No. 7,320,969 were nonobvious, determining that the District Court erred in its obviousness analysis.  The Federal Circuit also affirmed the District Court's exclusion of expert testimony on prior use, finding that Watson failed to demonstrate that the lower court abused its discretion in excluding the testimony.

Plaintiff-Appellee Duramed Pharmaceuticals owns the '969 patent, which is directed to an extended-cycle combined oral contraceptive ("COC") regimen that Duramed markets as Seasonique®.  In contrast with a traditional 28-day COC, in which estrogen/progestin pills are taken for 21 days and then hormone-free pills are taken for 7 days, under Duramed's extended-cycle COC, estrogen/progestin pills (30 μg ethinyl estradiol and 150 μg of levonorgestrel) are taken for 84 days and then low-dose estrogen (10 μg ethinyl estradiol) are taken for 7 days.  The extended-cycle regimen serves to increase the menstrual cycle's natural length, and the low-dose estrogen helps to postpone estrogen-withdrawal symptoms that may be experienced during the hormone-free period of traditional COC regimens.

Seeking approval to market a generic version of Seasonique®, Defendant-Appellant Watson Laboratories filed an Abbreviated New Drug Application (ANDA) with the FDA.  In response to Watson's ANDA filing, Duramed brought suit against Watson for infringement of claims 1-9, 15, and 17-19 of the '969 patent.  Watson stipulated to infringement but challenged the validity of the asserted claims, asserting that they were obvious in view of several references, including three articles (one by Kovacs and two by Sulak) and U.S. Patent No. 6,027,749.  The Kovacs article describes an extended-cycle COC regimen in which pills containing 30 μg ethinyl estradiol and 150 μg levonorgestrel are taken for 84 days and then hormone-free pills are taken for 7 days, the '749 patent describes COC regimens in which pills containing 15-20 μg ethinyl estradiol and 50-125 μg levonorgestrel are taken for up to 77 days and then pills containing 10-15 μg ethinyl estradiol are taken for 7 days in order to reduce the incidence of premenstrual headaches, and the Sulak articles describe the use of low-dose estrogen during the hormone-free period as a way to alleviate headaches resulting from estrogen withdrawal.  Watson also introduced testimony from an expert who opined that one of skill in the art would have been motivated to combine the above references to arrive at the extended-cycle COC of the '969 patent, and further testified that he had personally prescribed the extended-cycle COC regimen of the '969 patent prior to the patent's priority date.  The District Court granted Duramed's motion for summary judgment of nonobviousness and its motion to exclude the expert's testimony regarding prior use  for lack of corroboration.

On appeal, Watson argued that it had raised genuine issues of material fact regarding whether it would have been obvious to combine the Kovacs COC regimen with low-dose estrogen administration during the traditional hormone-free period to treat estrogen-withdrawal headaches in light of the Sulak articles and the '749 patent.  Watson contended that the District Court, by granting summary judgment of nonobviousness, erred by focusing on individual references instead of considering the teaching of the prior art as a whole, improperly required clear and convincing evidence of invalidity on summary judgment, ignored all but three prior art references as cumulative, erroneously required that the prior art teach a virtual guarantee of success, and failed to make a finding of the level of skill in the art.  In reversing the District Court's grant of summary judgment, the Federal Circuit agreed with Watson that the lower court had erred in assessing the content and scope of the prior art, appeared to have applied an incorrect evidentiary standard on summary judgment, and failed to make any finding on the level of skill in the art.

With respect to the District Court's assessment of the content and scope of the prior art, the Federal Circuit first addressed the lower court's findings with respect to the Sulak references, stating:

Regarding Sulak, the court rejected all consideration of the articles' teaching of the use of unopposed estrogen because that use was mentioned only as a "theoretical," rather than a tested solution to estrogen-withdrawal headaches.  A reference, however, is prior art for all that it discloses, and there is no requirement that a teaching in the prior art be scientifically tested, or even guarantee success, before providing a reason to combine.  Rather, it is sufficient that one of ordinary skill in the art would perceive from the prior art a reasonable likelihood of success.

(citations omitted).  As for the '749 patent, the panel noted that:

The district court . . . found that the '749 patent discloses a variety of COC regimens and thus concluded that the patent "does not teach any one specific combination that would establish consistent knowledge in the community."  However, the question is not whether there existed a consistent COC regimen in the art, but rather whether one of ordinary skill in the art would have been motivated to combine the Kovacs regimen with 7 days of low-dose, unopposed estrogen with the reasonable expectation that the addition of low-dose estrogen would successfully reduce the incidence of estrogen-withdrawal headaches during the hormone-free period.

(citation omitted).  The Federal Circuit concluded that:

Based on its errors in assessing the content of these prior art references, the district court improperly analyzed and rejected the teaching of each in isolation, concluding that each alone failed to establish by clear and convincing evidence a motivation to combine.  . . .  Accordingly, the district court failed to properly consider the collective teaching of the prior art in light of the common sense and creativity of the person of ordinary skill in the art.

The Federal Circuit also noted that the District Court appeared to have applied an incorrect evidentiary standard on summary judgment, placing the burden of proof on Watson, the nonmoving party, to show clear and convincing evidence of invalidity.  The panel explained that because Duramed had moved for summary judgment of nonobviousness, "the burden rested with Duramed to show that Watson had failed to come forth with clear and convincing evidence of an essential element of its prima facie case of obviousness."

With respect to findings regarding the level of skill in the art, the Federal Circuit first noted that "[w]hen a finding of the level of skill affects the court's ultimate conclusion under § 103, the failure to make such a finding constitutes reversible error."  In this case, the panel determined that "the district court appears to have simply rejected all of Watson's expert's testimony by finding that [the expert] was not a person of ordinary skill, but extraordinary skill," which the Court found "was error."

While noting that "in reviewing the record de novo on summary judgment and crediting Duramed's lower level of skill in the art, the district court on remand may well conclude that the claimed extended-cycle COC regimen would have been obvious as a matter of law," the Federal Circuit stated that:

[O]n the record before us, there appear to be no genuine issues of material fact that, based on the teaching of Kovacs, the '749 patent, and the Sulak articles, one of ordinary skill would have been motivated to combine the Kovacs regimen and 7 days of 10 μg unopposed ethinyl estradiol with a reasonable expectation that the combination would reduce the incidence of headaches associated with that regimen.

However, because Duramed did not have an opportunity to challenge Watson's prima facie case of obviousness or introduce any secondary considerations of nonobviousness, the Federal Circuit remanded the case to the District Court.

Duramed Pharmaceuticals, Inc. v. Watson Laboratories, Inc. (Fed. Cir. 2011)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Linn, and Dyk
Opinion by Circuit Judge Lourie

Top Stories of 2010: #12 to #9

By Donald Zuhn --

Reflecting upon the events of the past twelve months, Patent Docs presents its fourth annual list of top biotech/pharma patent stories.  For 2010, we identified a dozen stories that were covered on Patent Docs last year that we believe had (or are likely to have) the greatest impact on biotech/pharma patent practitioners and applicants.  Today, we count down stories #12 to #9.  Later this week, we will present stories #8 to #5, and then conclude the series by presenting our top four stories of 2010.  As with our other lists (2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.

#12 -- Patent Reform Movement Stalls (Again)

For a brief moment, it looked like Senate Judiciary Committee Chairman Patrick Leahy (D-VT) was finally going to move a patent reform bill to the Senate floor for a vote.  In February, Chairman Leahy announced during an Executive Business Meeting that the Committee had reached a "tentative agreement in principle" regarding patent reform legislation.  He also mentioned that he had been meeting with members of the House majority and minority leadership to discuss the Senate bill in an effort to prevent the legislation from becoming a "partisan issue."  Only days later, however, House leaders on both sides of the aisle issued a short statement (on the Republicans' separate House Committee on the Judiciary website) saying that Chairman Leahy's patent reform efforts "have thus far proceeded without adequate input from House members."  While Congressional watchers may not have known it at the time, the House leadership's statement essentially signaled an end to the passage of comprehensive patent reform legislation in 2010.

Instead of passing a comprehensive patent reform package, several members of the House turned to stand-alone bills designed to address individual problems with the patent system.  For example, Rep. Darrell Issa (R-CA) introduced a bill in the House (H.R. 4954) in late March that would put an end to qui tam (or whistleblower) suits for false patent marking.  An alternative false patent marking bill (H.R. 6352) was introduced by Rep. Robert Latta (R-OH) in September.  In May, the House nearly brought a bill to the floor for a vote that would provide the U.S. Patent and Trademark Office with fee-setting authority.  Finally, the House sent H.R. 628, which would establish a pilot program in certain U.S. district courts to encourage enhancement of expertise in patent cases among district judges, to the President for his signature in late December.

For information regarding this and other related topics, please see:

• "Legislation to Enhance Patent Case Expertise Among District Judges Awaits President's Signature," December 29, 2010
• "New False Marking Bill Introduced in the House," October 14, 2010
• "IPO Announces Support for Patent Reform Act of 2010," September 20, 2010
• "Senators Seek Vote on Patent Reform Bill," September 15, 2010
• "Journal Examines Effects of Patent Reform on Medical Innovation," July 14, 2010
• "The Phoenix That Is S. 515," July 13, 2010
• "New USPTO Fee-Setting Bill Introduced in House," May 18, 2010
• "House to Vote on Bill That Would Give USPTO Fee-Setting Authority," May 17, 2010
• "Patent Reform News Briefs," May 11, 2010
• "USPTO Administrator Arti Rai Responds to Patent Docs Post on PTO White Paper," April 26, 2010
• "USPTO White Paper Supports Patent Reform Proposals," April 22, 2010
• "False Patent Marking Bill Introduced in the House," March 29, 2010
• "PUBPAT Expresses 'Deep Concern' over Senate False Marking Provision," March 25, 2010
• "Senator Landrieu Introduces Legislation Requiring Study on Effects of First-to-File Provision," March 11, 2010
• "Senate Leadership Unveils Details of Patent Reform Agreement," March 8, 2010
• "Qui Tam Actions in Senate Sights," March 4, 2010
• "House Leadership Says It Lacked 'Adequate Input' on Senate Patent Reform Bill," March 2, 2010
• "Chairman Leahy Announces 'Tentative Agreement in Principle' on Patent Reform Bill," February 25, 2010
• "AIPR Reiterates Opposition to Patent Reform Legislation," January 14, 2010

#11 -- Pay-for-Delay/Reverse Payment Opponents Try to Prohibit Practice

The year began with seven consumer groups sending a letter to Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV), urging the House and Senate to include provisions in their health care reform bills that would prohibit exclusion payments (i.e., pay-for-delay settlements or reverse payments) in pharmaceutical patent settlements.  One month later, in February, the Federal Trade Commission (FTC) released a report about "pay-for-delay" arrangements, in which the FTC's position on the issue was made clear in the title of its report:  "Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions."  However, in a four-part series on "Reverse Payments in Generic Drug Settlements," Patent Docs looked at the decisions by several Courts of Appeals (the Federal Circuit, 11th Circuit, and Second Circuit), which suggest that the FTC may be wrong in pushing for the elimination of pay-for-delay settlements as per se violations of Section 1 of the Sherman Antitrust Act.

On Capitol Hill, the Senate Appropriations Committee passed an appropriations bill (S. 3677) in August that contained a pay-for delay provision that would allow the FTC to "initiate a proceeding . . . against the parties to any agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a drug product," wherein the agreement has "anticompetitive effects."  Only one week earlier, the Senate had voted for a supplemental appropriations bill after stripping the bill of just such a provision.  In July, the House had also squeezed a pay-for-delay provision into its own appropriations legislation (H.R. 4899).  However, the Senate bill did not pass and the House bill passed and was signed into law but without the pay-for-delay provision.

For information regarding this and other related topics, please see:

• "FTC Continues Attempts to Block Reverse Payments," November 23, 2010
• "Second Circuit Denies En Banc Reconsideration in Cipro® Case," September 8, 2010
• "Pay-For-Delay Provision Added to Senate Appropriations Bill," August 5, 2010
• "Senate Removes Pay-For-Delay Provision from Appropriations Bill," July 29, 2010
• "House Slips Pay-For-Delay Provision into Appropriations Bill," July 7, 2010
• "House Passes Health Care Reform Bill -- Biosimilar Regulatory Pathway Makes Cut, Pay-for-Delay Ban Does Not," March 22, 2010
• "Reverse Payments in Generic Drug Settlements - Part IV," March 2, 2010
• "Reverse Payments in Generic Drug Settlements - Part III," February 25, 2010
• "President's Health Care Plan Includes Pay-for-Delay Ban and Biosimilar Regulatory Pathway," February 24, 2010
• "Reverse Payments in Generic Drug Settlements - Part II," February 23, 2010
• "Reverse Payments in Generic Drug Settlements," February 22, 2010
• "FTC Disapproves of 'Pay-for-Delay' Drug Deals,'" February 15, 2010
• "Consumer Groups Ask Congress to Add Pay-for-Delay Provision to Health Care Bill," January 13, 2010

#10 -- USPTO Supplements Obviousness Examination Guidelines

In September, the U.S. Patent and Trademark Office issued an update to its obviousness guidelines, publishing a Federal Register notice that highlights case law developments on obviousness since the Supreme Court's 2007 decision in KSR Int'l Co. v. Teleflex Inc.  The update supplements the Office's 2007 guidelines, in which the Office identified seven rationales gleaned from the KSR decision.  The Office's focus on decisional law in the update is reminiscent of the implementation of the 2007 obviousness examination guidelines by Technology Center 1600 almost three years ago.  Bruce Kisliuk -- at the time a TC 1600 Director -- noted that examiners in the Group were being given "high-level" obviousness training in which they were taught to analyze the issue of obviousness using eleven key cases as tools (see "USPTO's Bruce Kisliuk Addresses ACI Conference").  The Office's recent notice lists two-dozen Federal Circuit cases that "have been selected for their instructional value on the issue of obviousness."  Whether it amounts to a point of pride or a source of frustration (or both), half of the two-dozen cases discussed in the update are biotech/pharma cases.

For information regarding this topic, please see:

• "USPTO Updates Obviousness Examination Guidelines," September 8, 2010

#9 -- Biotech/Pharma Industry Recovers (Slowly) from Great Recession

In 2009, the country suffered through its worst recession since the Great Depression, and in 2010, the biotech/pharma industry (like many other industries) suffered through a very slow recovery from the effects of the recession.  During this slow recovery, the economic news has been mixed.  With regard to venture funding, an improvement in the final quarter of 2009 was followed by a drop in the first quarter of 2010 and then another drop in the third quarter.  While an Ernst & Young report indicated that the biotech industry had finally become profitable, a BIO report showed that the number of publicly traded biotech companies dropped from 394 in the fourth quarter of 2007 to only 294 by the second quarter of 2010 -- a loss of 25% of the sector's publicly traded companies.  Ultimately, the suggestion by Deloitte Touche Tohmatsu (DTT) that the global recession had permanently reshaped the life sciences industry may provide the most accurate picture.  DTT's assessment was backed by a survey in which respondents noted that companies making it past the five-year mark post-recession, would do so by focusing on innovation.  (Unfortunately, 43% of respondents to the DTT survey indicated that their companies had reduced R&D spending and were focusing instead on products providing immediate returns, and almost a third of the respondents (32%) believed that R&D spending would continue to drop in the future.)  If the recession and its slow recovery can be eliminated from next year's Top Stories list altogether, 2011 will be a very good year.

For information regarding this and other related topics, please see:

• "NVCA Reports 31% Drop in Venture Funding for Third Quarter," October 17, 2010
• "One Quarter of Public Biotech Companies Shut Doors Since 4Q 2007," October 11, 2010
• "University Start-ups and Licensing Activity Held Steady During Recession," October 7, 2010
• "WIPO Report Shows Signs of Recovery Following Economic Crisis," September 28, 2010
• "NVCA Reports 34% Increase in Venture Funding for Second Quarter," July 22, 2010
• "Marks & Clerk Survey Predicts Rise in Consolidation as Biotech/Pharma Industry Nears Patent Cliff," May 25, 2010
• "Docs at BIO: Steve Burrill's State of the Biotechnology Industry Report 2010," May 12, 2010
• "Deloitte White Paper Points to Recession as Turning Point for Life Sciences Industry; Indicates That Survival Will Depend on Innovation," May 5, 2010
• "Ernst & Young Report: Biotech Industry Reaches Profitability for the First Time," April 29, 2010
• "NVCA Report Shows First Quarter Drop in Venture Funding," April 20, 2010
• "VentureDeal Report Shows 65% Increase in Fourth Quarter Biotech Venture Funding," March 16, 2010
• "AUTM Survey Shows Drop in Issued Patents," March 9, 2010
• "NVCA Report Shows Slight Drop in 4Q Venture Funding and Sharp Decline for 2009," January 24, 2010
• "Partnerships Between Startup Firms and Big Pharma Fueled 85% Increase in Biotech Funding in 2009," January 13, 2010

Daiichi Sankyo Co. v. Matrix Laboratories, Ltd. (Fed. Cir. 2010)

    By Donald Zuhn --

In Daiichi Sankyo Co. v. Matrix Laboratories, Ltd., decided last Thursday, the Federal Circuit affirmed a determination by the District Court for the District of New Jersey that Matrix Laboratories, Ltd., Mylan Inc., Mylan Laboratories, Inc., and Mylan Pharmaceuticals, Inc. ("Mylan") failed to establish a prima facie case of obviousness with respect to claim 13 of U.S. Patent No. 5,616,599.  Daiichi Sankyo Company, Ltd. and Daiichi Sankyo, Inc. own the '599 patent, which relates to 1-biphenylmethylimidazole compounds and their use as angiotensin receptor blockers (ARBs) for the treatment of high blood pressure.  Claim 13 of the '599 patent encompasses olmesartan medoxomil, an ARB that is marketed by Daiichi as the active ingredient in Benicar®, Benicar HCT®, and Azor®.

The use of ARBs to control blood pressure can be traced back to work done in the 1970s and 1980s by Takeda Pharmaceutical Co. Ltd., which developed a class of compounds comprising an imidazole ring with other chemical moieties bonded to the five positions of the ring.  One such compound, Takeda's S-8307, has the chemical structure:

Using Takeda's compounds as leads, E. I. du Pont de Nemours and Company sought to develop compounds having inreased angiotensin receptor binding, and therefore, better ARB activity.  DuPont modified S-8307 to develop the compound losartan, which has ten-fold higher binding than Takeda's compounds.  DuPont's losartan has the chemical structure:

DuPont disclosed losartan in U.S. Patent No. 5,138,069 along with more than 400 structurally related ARBs, including Example 118, which has the chemical structure:

Based on DuPont's success with losartan, a number of pharmaceutical companies, including Daiichi, initiated efforts to identify even better ARBs.  Daiichi's work led to the synthesis of olmesartan, the active metabolite of olmesartan medoxomil, which differs from losartan in that it has a hydrophilic, hydroxy-isopropyl group at the 4-position of the imidazole ring instead of a lipophilic, chlorine atom (like Example 118 above), and a carboxy group masked by a medoxomil prodrug substituent at the 5-position of the ring instead of a hydroxymethyl group.  Olmesartan medoxomil and olmesartan have the chemical structures:

The closest prior art structure to Daiichi's olmesartan is DuPont's Example 6, disclosed in U.S. Patent No. 5,137,902, which differs from olmesartan in that it lacks a single oxygen atom at the 4-position of the imidazole ring.  DuPont's Example 6 has the chemical structure (wherein the circled hydrogen atom in Example 6 is an -OH in olemsartan):

Seeking approval to market generic olmesartan medoxomil, Mylan filed multiple ANDAs with the FDA.  In response to Mylan's ANDA filings, Daiichi brought suit against Mylan for infringement of claim 13 of the '599 patent.  The parties stipulated to infringement, leaving Mylan's counterclaim that claim 13 would have been obvious in light of:  (1) the ARBs disclosed in DuPont's '902 patent, (2) Example 118 in DuPont's '069 patent, and (3) the well-known use of medoxomil as a prodrug.  In particular, Mylan contended that one of skill in the art would have been motivated to select the ARBs disclosed in DuPont's '902 patent as lead compounds, and then modify the lipophilic alkyl groups at the 4-position of those compounds with olmesartan's hydrophilic hydroxyalkyl group in view of Example 118.

Following a bench trial, the District Court held that claim 13 of the '599 patent was not invalid as obvious, finding that Mylan had failed to show by clear and convincing evidence that a skilled artisan would have chosen the ARBs disclosed in DuPont's '902 patent as lead compounds, that the structure of the '902 patent compounds differed significantly from olmesartan medoxomil, and that Mylan had failed to prove that a skilled artisan would have been motivated to modify the 4- and 5-positions of the '902 patent compounds to obtain olmesartan medoxomil.  In particular, the District Court determined that the '069 patent and its ARBs taught away from the use of a hydrophilic group at the 4-position and from any expectation that the use of a hydrophilic group would generate an ARB with significantly improved biological properties, and further, that converting olmesartan into a prodrug was a disfavored and unpredictable approach and that medoxomil was a disfavored prodrug.  The District Court also found that secondary considerations favored a finding of nonobviousness; specifically that olmesartan medoxomil's enhanced potency constituted evidence of unexpected results and that Daiichi's Benicar® enjoyed commercial success despite being the seventh ARB on the market.

In affirming the District Court's finding of nonobviousness, the Federal Circuit agreed with Daiichi in determining that Mylan failed to show (1) that one of ordinary skill in the art would have been motivated to select the ARBs disclosed in DuPont's '902 patent as lead compounds or (2) that the skilled artisan would have been motivated to modify the '902 patent compounds to synthesize olmesartan medoxomil.  The Court began its analysis by citing Eisai Co. Ltd. v. Dr. Reddy's Labs., Ltd., 533 F.3d 1353 (Fed. Cir. 2008), and Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed. Cir. 2007), for the proposition that:

Proof of obviousness based on structural similarity [between claimed and prior art compounds] requires clear and convincing evidence that a medicinal chemist of ordinary skill would have been motivated to select and then to modify a prior art compound (e.g., a lead compound) to arrive at a claimed compound with a reasonable expectation that the new compound would have similar or improved properties compared with the old.

With respect to the issue of lead compound selection, the panel countered Mylan's argument that because the '902 patent compounds are the closest prior art, this should have been dispositive of the lead compound issue, pointing out that such argument "runs contrary to our case law."  The Court noted that "[i]n Takeda, we upheld a district court's finding that one of skill in the art would not have chosen the structurally closest prior art compound, compound b, as the lead compound in light of other compounds with more favor-able characteristics," adding that the Court's cases "illustrate that it is the possession of promising useful properties in a lead compound that motivates a chemist to make structurally similar compounds."  Citing Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358 (Fed. Cir. 2008), the Court explained that "attribution of a compound as a lead compound after the fact must avoid hindsight bias; it must look at the state of the art at the time the invention was made to find a motivation to select and then modify a lead compound to arrive at the claimed invention" (emphasis in original).  Thus, the selection of a lead compound "depends on more than just structural similarity, but also knowledge in the art of the functional properties and limitations of the prior art compounds," and therefore, "[p]otent and promising activity in the prior art trumps mere structural relationships."

Turning to the issue of motivation to modify, the panel noted that the vast majority of compounds disclosed in the '069 patent contain a lipophilic group at the 4-position of the imidazole ring, and that only four (Examples 342, 329, 118, and 335) have a hydrophilic group like olmesartan medoxomil.  According to the Court, "[t]he few compounds with hydrophilic groups at the 4-position are drowned out by the sea of 4-lipophilic compounds, which are the essence of what the ’069 patent teaches."  In addition, the Court observed that binding affinity analyses comparing the '069 patent compounds that differed only at the 4-position confirm the preference for lipophilicity at that position.  The panel determined that:

Altogether, the '069 patent's [structural-activity relationship] data and the structure of other second-generation ARBs counter any notion that one of skill in the art would have been motivated to modify the '902 compounds' lipophilic alkyl groups to a hydrophilic group.  Such a holding would have been based on hindsight.

The panel therefore affirmed both the District Court's finding that Mylan had failed to establish that a skilled artisan would have selected the '902 patent ARBs as lead compounds and the lower court's finding that a skilled artisan would have modified the '902 patent ARBs at the 4-position of the imidazole ring to obtain olmesartan medoxomil.  As a result, the Federal Circuit affirmed the District Court's determination that claim 13 of the '599 patent was not shown to be invalid as obvious.

Daiichi Sankyo Co. v. Matrix Laboratories, Ltd. (Fed. Cir. 2010)
Panel: Circuit Judges Lourie, Friedman, and Linn
Opinion by Circuit Judge Lourie

USPTO Updates Obviousness Examination Guidelines

By Donald Zuhn --

Last week, the U.S. Patent and Trademark Office issued an update to its obviousness guidelines, publishing a notice in the Federal Register (75 Fed. Reg. 53644) that highlights case law developments on obviousness since the Supreme Court's 2007 decision in KSR Int'l Co. v. Teleflex Inc.  The update supplements the Office's 2007 guidelines, in which the Office identified seven rationales gleaned from the KSR decision (see "Patent Office Issues Examination Guidelines Regarding Obviousness after KSR").

The Office indicates that the update to the obviousness examination guidelines is intended to remind Office personnel of the principles of obviousness explained by the Supreme Court in KSR, as well as provide additional guidance on obviousness in view of several post-KSR Federal Circuit decsions.  The Office's focus on decisional law in the update is reminiscent of the implementation of the 2007 obviousness examination guidelines by Technology Center 1600 almost three years ago (see "USPTO's Bruce Kisliuk Addresses ACI Conference").  Bruce Kisliuk -- at the time a TC 1600 Director -- noted that examiners in the Group were being given "high-level" obviousness training in which they were taught to analyze the issue of obviousness using eleven key cases as tools.  Seven of these cases were Federal Circuit decisions:

• Pharmastem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007) -- Patent Docs summary
•  Pfizer, Inc. v. Apotex, Inc. (Fed. Cir. 2007) -- Patent Docs summary
• Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd. (Fed. Cir. 2007) -- Patent Docs summary
• In re Sullivan (Fed. Cir. 2007) -- Patent Docs summary
• Daiichi Sankyo Co. v. Apotex, Inc. (Fed. Cir. 2007) -- Patent Docs summary
• Aventis Pharma Deutschland GmbH v. Lupin, Ltd. (Fed. Cir. 2007) -- Patent Docs summary
• Forest Labs., Inc. v. Ivax Pharm., Inc. (Fed. Cir. 2007) -- Patent Docs summary

Mr. Kisliuk stated that Group 1600 examiners were being asked to focus on the facts of the eleven cases since the issue of obviousness is very fact specific.  In the update to the obviousness examination guidelines, the Office echoes Mr. Kisliuk's comments concerning the instructional value of obviousness case law, stating that "[t]he impact of the Supreme Court's decision in KSR can be more readily understood in the context of factual scenarios."  While the notice emphasizes that "every question of obviousness must be decided on its own facts," the Office explains that case law can help "clarify the contours of the obviousness inquiry after KSR."

To that end, the notice lists two-dozen Federal Circuit cases that "have been selected for their instructional value on the issue of obviousness."  For each of these cases, the update provides a "teaching point," which may be used to quickly determine the relevance of each discussed case, but which the Office explains should not be used as a substitute for reading the remainder of the update's discussion of the case.  The notice divides the 24 cases into four groups, the first three groups corresponding to three of the rationales identified in the 2007 guidelines -- combining prior art elements (cases 4.1 to 4.6), substituting one known element for another (cases 4.7 to 4.13), and obvious to try (cases 4.14 to 4.20) -- and the fourth group focusing on issues concerning the consideration of evidence during prosecution (cases 5.1 to 5.4).

Whether it amounts to a point of pride or a source of frustration (or both), half of the cases discussed in the update are biotech/pharma cases.  Of the twelve biotech/pharma cases, four (Pharmastem Therapeutics, Inc., Takeda Chem. Indus., Ltd., In re Sullivan, and Aventis Pharma Deutschland GmbH) were part of Group 1600's seven CAFC decisions (Ex parte Kubin and the Southern District of New York's decision in In re Omeprazole Patent Litigation -- neither of which had reached the Federal Circuit in the Fall of 2007 -- were included on Group 1600's list, and their CAFC counterparts are included in the update).  The biotech/pharma cases discussed in the update (with links to the Federal Circuit opinion, Patent Docs summary of the case, and the "teaching point" provided in the notice) are:

• Example 4.1.  In re Omeprazole Patent Litigation, 536 F.3d 1361 (Fed. Cir. 2008) -- Patent Docs summary
Teaching point:  Even where a general method that could have been applied to make the claimed product was known and within the level of skill of the ordinary artisan, the claim may nevertheless be nonobvious if the problem which had suggested use of the method had been previously unknown.

• Example 4.10.  Aventis Pharma Deutschland v. Lupin Ltd., 499 F.3d 1293 (Fed. Cir. 2007) -- Patent Docs summary
Teaching point:  A chemical compound would have been obvious over a mixture containing that compound as well as other compounds where it was known or the skilled artisan had reason to believe that some desirable property of the mixture was derived in whole or in part from the claimed compound, and separating the claimed compound from the mixture was routine in the art.

• Example 4.11.  Eisai Co. Ltd. v. Dr. Reddy’s Labs., Ltd., 533 F.3d 1353 (Fed. Cir. 2008) -- Patent Docs summary
Teaching point:  A claimed compound would not have been obvious where there was no reason to modify the closest prior art lead compound to obtain the claimed compound and the prior art taught that modifying the lead compound would destroy its advantageous property.  Any known compound may serve as a lead compound when there is some reason for starting with that lead compound and modifying it to obtain the claimed compound.

• Example 4.12.  Procter & Gamble Co. v. Teva Pharmaceuticals USA, Inc., 566 F.3d 989 (Fed. Cir. 2009) -- Patent Docs summary
Teaching point:  It is not necessary to select a single compound as a "lead compound" in order to support an obviousness rejection.  However, where there was reason to select and modify the lead compound to obtain the claimed compound, but no reasonable expectation of success, the claimed compound would not have been obvious.

• Example 4.13.  Altana Pharma AG v. Teva Pharmaceuticals USA, Inc., 566 F.3d 999 (Fed. Cir. 2009) -- Patent Docs summary
Teaching point:  Obviousness of a chemical compound in view of its structural similarity to a prior art compound may be shown by identifying some line of reasoning that would have led one of ordinary skill in the art to select and modify a prior art lead compound in a particular way to produce the claimed compound.  It is not necessary for the reasoning to be explicitly found in the prior art of record, nor is it necessary for the prior art to point to only a single lead compound.

• Example 4.14.  In re Kubin, 561 F.3d 1351 (Fed. Cir. 2009) -- Patent Docs summary
Teaching point:  A claimed polynucleotide would have been obvious over the known protein that it encodes where the skilled artisan would have had a reasonable expectation of success in deriving the claimed polynucleotide using standard biochemical techniques, and the skilled artisan would have had a reason to try to isolate the claimed polynucleotide.  KSR applies to all technologies, rather than just the "predictable" arts.

• Example 4.15.  Takeda Chemical Industries, Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed. Cir. 2007) -- Patent Docs summary
Teaching point:  A claimed compound would not have been obvious where it was not obvious to try to obtain it from a broad range of compounds, any one of which could have been selected as the lead compound for further investigation, and the prior art taught away from using a particular lead compound, and there was no predictability or reasonable expectation of success in making the particular modifications necessary to transform the lead compound into the claimed compound.

• Example 4.16.  Ortho-McNeil Pharmaceutical, Inc. v. Mylan Labs, Inc., 520 F.3d 1358 (Fed. Cir. 2008) -- Patent Docs summary
Teaching point:  Where the claimed anticonvulsant drug had been discovered somewhat serendipitously in the course of research aimed at finding a new antidiabetic drug, it would not have been obvious to try to obtain a claimed compound where the prior art did not present a finite and easily traversed number of potential starting compounds, and there was no apparent reason for selecting a particular starting compound from among a number of unpredictable alternatives.

• Example 4.17.  Bayer Schering Pharma A.G. v. Barr Labs., Inc., 575 F.3d 1341 (Fed. Cir. 2009) -- Patent Docs summary
Teaching point:  A claimed compound would have been obvious where it was obvious to try to obtain it from a finite and easily traversed number of options that was narrowed down from a larger set of possibilities by the prior art, and the outcome of obtaining the claimed compound was reasonably predictable.

• Example 4.18.  Sanofi-Synthelabo v. Apotex, Inc., 550 F.3d 1075 (Fed. Cir. 2008) -- Patent Docs summary
Teaching point:  A claimed isolated stereoisomer would not have been obvious where the claimed stereoisomer exhibits unexpectedly strong therapeutic advantages over the prior art racemic mixture without the correspondingly expected toxicity, and the resulting properties of the enantiomers separated from the racemic mixture were unpredictable.

• Example 5.1.  PharmaStem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342 (Fed. Cir. 2007) -- Patent Docs summary
Teaching point:  Even though all evidence must be considered in an obviousness analysis, evidence of nonobviousness may be outweighed by contradictory evidence in the record or by what is in the specification. Although a reasonable expectation of success is needed to support a case of obviousness, absolute predictability is not required.

• Example 5.2.  In re Sullivan, 498 F.3d 1345 (Fed. Cir. 2007) -- Patent Docs summary
Teaching point:  All evidence, including evidence rebutting a prima facie case of obviousness, must be considered when properly presented.

The remaining cases discussed in the update (with links to the Federal Circuit opinion) are:

• Example 4.2.  Crocs, Inc. v. U.S. International Trade Commission, 598 F.3d 1294 (Fed. Cir. 2010).

• Example 4.3.  Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356 (Fed. Cir. 2008).

• Example 4.4.  Ecolab, Inc. v. FMC Corp., 569 F.3d 1335 (Fed Cir. 2009).

• Example 4.5.  Wyers v. Master Lock Co., No. 2009–1412, —F.3d—, 2010 WL2901839 (Fed. Cir. July 22, 2010).

• Example 4.6.  DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009).

• Example 4.7.  In re ICON Health & Fitness, Inc., 496 F.3d 1374 (Fed. Cir. 2007).

• Example 4.8.  Agrizap, Inc. v. Woodstream Corp., 520 F.3d 1337 (Fed. Cir. 2008).

• Example 4.9.  Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008).

• Example 4.19.  Rolls-Royce, PLC v. United Technologies Corp., 603 F.3d 1325 (Fed. Cir. 2010).

• Example 4.20.  Perfect Web Technologies, Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1328–29 (Fed. Cir. 2009).

• Example 5.3.  Hearing Components, Inc. v. Shure Inc., 600 F.3d 1357 (Fed. Cir. 2010).

• Example 5.4.  Asyst Techs., Inc. v. Emtrak, Inc., 544 F.3d 1310 (Fed. Cir. 2008).

The notice also points out that technology-specific obviousness examples can be found on the PTO website.  Included among the materials is a PowerPoint presentation entitled "Obviousness in view of KSR:  TC1600-Specific Examples."

The Office is seeking public comment regarding the update to the guidelines, and is particularly interested in receiving suggestions regarding recent decisions concerning obviousness that would have value as teaching tools.  Comments may be submitted by e-mail to KSR_Guidance@uspto.gov or by regular mail: Mail Stop Comments -- Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313–1450.

Eli Lilly & Co. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2010)

By Kevin E. Noonan --

The old proverb "success has many fathers, while failure is an orphan" comes to mind when considering the Federal Circuit's decision in Eli Lilly & Co. v. Teva Pharmaceuticals USA, Inc.  In the Court's decision, repeated failures, even by Lilly scientists in developing its osteoporosis drug Evista® (raloxifene hydrochloride), were sufficient to defeat Teva's counterclaim that patent claims related to methods of use were obvious.

The action arose following Teva's ANDA filing containing a Paragraph IV certification that the patents-in-suit were invalid (there was no discussion in the opinion of any inequitable conduct allegations below).  The patents fell within three broad categories, and included the Bone Loss patents (U.S. Patent No. 6,906,086 and Reissue Patents Nos. RE39,049; and RE38,968), the Low Dose patent (Reissue Patent No. RE39,050) and the Particle Size patents (U.S. Patents Nos. 6,458,811 and 6,894,064).  Specific claims representative of the patents-in-suit include the following:

Claim 1 of the '086 patent (Bone Loss patent):

A method of inhibiting post-menopausal bone loss in a post-menopausal woman in need of treatment to prevent or treat post-menopausal osteoporosis comprising administering a single daily oral dose to said woman of an effective amount of [raloxifene] hydrochloride.

Claim 14 of the '050 reissue patent (Low Dose patent):

A method of preventing post-menopausal osteoporosis in a post-menopausal woman in need of treatment to prevent post-menopausal osteoporosis comprising administering to said woman a hydrochloride salt of . . . [raloxifene] in an amount of 60 mg/day.

Claim 1 of the '811 patent (Particle Size patent; emphasis added):

A compound of formula I . . . [raloxifene] and pharmaceutically acceptable salts and solvates thereof, characterized in that the compound is in particulate form, said particles having a mean particle size of less than about 25 microns, at least about 90% of said particles have a size of less than about 50 microns.

The District Court (Judge Sarah Evans Parker) found the Bone Loss and Low Dose patents not invalid under §§ 103 and 112, 1st paragraph (enablement), but that the Particle patents were invalid for failing to satisfy the written description requirement under 112, 1st paragraph, and granted a permanent injunction keeping generic raloxifene hydrochloride off the market until Lilly's patents expire.

Relevant to the Federal Circuit's analysis was the developmental history of raloxifene.  Originally pursued as an "antiestrogen" breast cancer treatment (similar in mode of action to tamoxifen), clinical experience with the drug showed low bioavailability in humans (despite significant bioavailability in experimental animals).  This result appeared to be related to the presence of free hydroxyl groups in raloxifene that were modified by conjugation with glucaronide as part of the detoxification and elimination pathways in humans.  The Court cited several prior art references disclosing low bioavailability and that raloxifene underwent "rapid metabolic conversion."  These included the Buzdar reference (1988) that disclosed results showing that raloxifene elicited no complete or partial responses for breast cancer patients resistant to tamoxifen (although the reference did not directly attribute these results to low bioavailability).  These bioavailability concerns regarding raloxifene were an express ground for the District Court to find that Lilly's claims for its Bone Loss and Low Dose patents were non-obvious, since the known low bioavailability for raloxifene would have precluded the skilled worker from having a reasonable expectation that the drug would be clinically useful for treating osteoporosis.

In its opinion, written by Chief Judge Rader joined by Judge Linn and Judge Prost, the Court affirmed the District Court's determination that Teva had not provided clear and convincing evidence that the claims of the Bone Loss or Low Dose patents were obvious.  On appeal, Teva argued three prior art references in support of its obviousness arguments.  U.S. Patent No. 5,075,321 (Schreiber patent) disclosed the use of raloxifene for treating autoimmune disorders (and according to the opinion was the basis for Lilly reissuing three of the patents-in-suit).  The Court found that this reference did not provide clear and convincing evidence of obviousness, because osteoporosis is not an autoimmune disease, and the evidence suggested different mechanisms of action.  "Without a closer relationship, Teva cannot show that an ordinarily skilled artisan would have expected Dr. Schrieber's article to have relevance for the treatment of postmenopausal osteoporosis," the Court said.  The opinion also rejected Teva's argument that the reference is relevant for showing clinically-significant bioavailability for raloxifene, based on the different uses (osteoporosis versus autoimmune disorders) as well as the fact that what was prior art in the Schrieber reference was based on animal studies that did not address the bioavailability issue in humans.

The second reference, a scientific journal article by Jordan, disclosed rat studies on the effects of tamoxifen and raloxifene on bone density.  According to the Court's opinion, "Dr. Jordan concluded that these results 'may have important implications for the clinical [human] applications of antiestrogens'" and that "'[i]t is possible . . . that in the future, tamoxifen could be considered to be used as a substitute for estrogen [for the prevention of osteoporosis in postmenopausal women]'" (emphasis added).  The reference also contained an assertion calling for clinical investigation of the use of tamoxifen for treating osteoporosis.  Unfortunately for Teva's argument, the Federal Circuit did not consider these teachings relevant for the use of raloxifene, because the reference suggested that tamoxifen, not raloxifene, be explored for use as an osteoporosis treatment.  In addition, not only was the reference silent as to the bioavailability issue, but the opinion cited the District Court's reasoning that the Jordan reference "exemplified" the bioavailability concerns with raloxifene and that the skilled worker "'would not have had a reasonable expectation of success in using raloxifene to treat human postmenopausal osteoporosis.'"  The Federal Circuit particularly faulted the portion of Teva's arguments relying on how Lilly scientists interpreted the Jordan results in support of its case for obviousness, since these inventors have greater than ordinary skill.  In addition, the Lilly scientists possessed internal information relating to the capacity for conjugation of raloxifene to be reversed in vivo (resulting in improved bioavailability), but this knowledge was also unavailing in support of Teva's arguments the court held, relying on KSR Int'l. Co. v. Teleflex Inc. ("The question is not whether the combination was obvious to the patentee but whether the combination was obvious to a person of ordinary skill in the art.")  Not expressly stated in the Court's opinion was the extent to which its determination was affected by Lilly scientists possessing information not within the knowledge of the worker of ordinary skill.

Finally, with regard to the Jones patent (which disclosed raloxifene), the opinion relied on this patent having been filed before any of the bioavailability results were obtained or concerns were raised, and that "[t]he record does not contain any reason that a person of ordinary skill would have ignored those later publications."  The Court also said that further evidence, specifically the results of the "failed" Buzdar study, would have precluded the skilled worker from having a reasonable expectation of success using raloxifene.  The Court rejected Teva's arguments that the Buzdar reference did not attribute its results to bioavailability issues, saying the skilled worker could draw that inference.

The Court came to the same conclusions and affirmed the lower court's non-obviousness determination for the claims of the Low Dose patent.  On appeal, Teva also argued that these claims were invalid under the doctrine of obviousness-type double patenting, based in part on the District Court's finding that the nature of the experiments to determine a clinically-effective low dose were routine (in its analysis addressing Teva's enablement challenge to these claims).  The Federal Circuit noted that this challenge was not raised below, and that the "record is insufficiently clear for it to conclude that the proper resolution is beyond any doubt."  Possibly significant (in view of the several recent instances of claims being invalidated for obviousness-type double patenting), the Court expressly stated that the policy rationales raised by Teva (that these patents extended Lilly's exclusivity term for Evista®) were not great enough to overcome the procedural deficiencies.

Teva also challenged the Bone Loss and Low Dose patents in the District Court on enablement grounds, and the Federal Circuit also affirmed the District Court's determination that the claims of these patents were enabled.  Teva's enablement challenge sounded in operability under 35 U.S.C. § 112, 1st paragraph (which the Court has held has its own utility requirement distinct from the utility requirement under § 101; In re Brana).  Here, the opinion cites the Manual of Patent Examining Procedure for its provisions relating to the effect of human clinical trials on the question of operability raised under 35 U.S.C. § 112, 1st paragraph (i.e., that having an on-going clinical trial is evidence that the invention is sufficiently operable for patenting purposes):

Before a drug can enter human clinical trials, the sponsor, often the applicant, must provide a convincing rationale to those especially skilled in the art (e.g., the Food and Drug Administration) that the investigation may be successful.  Such a rational would provide a basis for the sponsor's expectation that the investigation may be successful.  In order to determine a protocol for phase I testing, the first phase of the clinical investigation, some credible rationale of how the drug might be effective or could be effective would be necessary.  Thus, as a general rule, if an applicant has initiated human clinical trials for a therapeutic product or process, Office personnel should presume that the applicant has established that the subject matter of that trial is reasonably predictive of having the asserted therapeutic utility.  MPEP (2008) § 2107.03 at IV (emphasis added).

The Court's opinion recognized that Teva's arguments relate to an inherent "Catch 22" regarding the relationship between the enablement requirement and the lack of a reasonable expectation of success in an obviousness determination:

To the extent that Teva revisits this [obviousness] argument in the enablement context, it appears to contend that Lilly's actions provide circumstantial evidence that an ordinarily skilled artisan would not have found helpful the facts on which the district court relied to hold that the patents are enabled.  This court rejects that argument as well, and for essentially the same reason:  it conflates the expertise of Lilly scientists with the knowledge of one of ordinary skill in the art.  . . .  Indeed, Lilly appears to have had many advantages that a person of ordinary skill would not have had, not the least of which was the FDA's prior approval of Lilly's IND application.  Lilly's reliance on those advantages rather than its knowledge of Black's conjugate studies [relating to greater than expected bioavailability] to proceed with human trials does not create clear and convincing evidence that a person of ordinary skill would fail to find comfort in the latter.

The Federal Circuit also affirmed the District Court's finding that the asserted claims of the Particle Size patents were invalid for failure to satisfy the written description requirement of 35 U.S.C. § 112, 1st paragraph.  These patents disclosed a range of particle sizes that increased bioavailability, wherein "within the claimed particle size range, the raloxifene particles provide 'surprisingly consistent in vivo absorption/bioavailability characteristics.'"  The District Court construed the relevant claim language, "in particulate form," to include the size of the particles either in the pure active pharmaceutical ingredient (API) or in the tablet after formulation (which construction benefited Lilly's contention that the API had been prepared with easily-dissociated particles so that the API, but not the formulated tablet, would fall outside the scope of the Particle Size patent claims).  Unfortunately for Lilly, however, the District Court found that the patent specifications did not disclose or describe determining particle size in the formulated tablet, and the Federal Circuit agreed:

[A]fter reading the patent, a person of ordinary skill in the art would not understand how to extract raloxifene particles from a formulation in order to determine whether they fall within the claimed particle size range and, in fact, would have no indication that size measurements on anything other than unformulated raloxifene would bear any relevance to the invention.

The Court affirmed, because since satisfaction of the written description requirement is a question of fact, it could not find that the District Court's decision was clearly erroneous, in particular due to admissions by Lilly's own expert regarding whether these embodiments were disclosed.

Since the Federal Circuit affirmed the District Court's decision that neither the Bone Loss nor the Low Dose patents are invalid, the injunction preventing Teva from providing generic raloxifene hydrochloride stands until expiration of the last expiring of these patents (March 2, 2014).

Eli Lilly & Co. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2010)
Panel:  Chief Judge Rader and Circuit Judges Linn and Prost
Opinion by Chief Judge Rader

King Pharmaceuticals, Inc. v. Eon Labs, Inc. (Fed. Cir. 2010)

Inherent Anticipation and Inherent Obviousness?

By Andrew Williams --

Last week, in King Pharmaceuticals, Inc. v. Eon Labs, Inc., the Federal Circuit affirmed a grant of summary judgment of invalidity of U.S. Patent Nos. 6,407,128 (the "'128 patent") and 6,683,102 (the "'102 patent"), although not necessarily for the same reasons articulated by the U.S. District Court for the Eastern District of New York.  King initiated the litigation after Eon filed an ANDA to market and sell a generic 800 mg metaxalone tablet for the treatment of "discomforts associated with acute, painful musculoskeletal conditions."  Metaxalone was first discovered in the 1960s, and had been sold under the brand name Skelaxin since 1962 -- first by A.H. Robins Co., then by Elan Pharma, Inc ("Elan"), and finally by King.  The '128 and '102 patents issued on June 18, 2002 and January 27, 2004, respectively, and claimed methods for increasing the bioavailability of metaxalone, and methods of using metaxalone in the treatment of musculoskeletal conditions.  The inventors of these two patents discovered and claimed that the oral bioavailability of metaxalone increases when it is administered with food.  The Federal Circuit determined, however, that all of the claims could be found inherently in the prior art.

Inherent Anticipation of Claims 1-3, 8-11, and 15-17 of the '128 Patent

Claim 1 of the '128 patent recites:

A method of increasing the oral bioavailability of metaxalone to a patient receiving metaxalone therapy comprising administering to the patient a therapeutically effective amount of metaxalone in a pharmaceutical composition with food.

The Federal Circuit agreed with the District Court that three references -- Fathie, Musculoskeletal Disorders and Their Management with a New Relaxant, Clinical Medicine 678 (April 1965) ("Fathie II"); Joseph A. Albanese, Nurses' Drug Reference 427 (2nd ed. 1982) ("Albanese"); and Anne C. Abrams, Clinical Drug Therapy 145 (1995) ("Abrams") -- each inherently anticipated this claim, because they each taught taking metaxalone with food.  Specifically, Fathie II taught that nausea associated with metaxalone treatment can be alleviated if taken with food, Albanese taught that administration of metaxalone with meals can help reduce gastric upset, and Abrams instructed nurses to give metaxalone with "milk or food" to decrease gastrointestinal distress.  Therefore, the only potential point of novelty was the preamble requiring the increase of oral bioavailability of the drug.  Nevertheless, the District Court held that an increase in metaxalone bioavailability was an inherent property of taking metaxalone with food as taught by all three of these references.

King argued that the District Court erred because Eon did not provide any evidence that these references would necessarily result in the claimed invention, as required for a finding of inherent anticipation.  King noted that the '128 patent specification provides precise conditions for food consumption that can accomplish the stated goal of the claim, while the prior art references only provide vague conditions.  The Federal Circuit found this position untenable.  Even though the specification provided examples with specific conditions, the disclosure did not indicate that these conditions were essential, and the Federal Circuit pointed out that the claim terms cannot be limited by specific conditions found within the specification.  In other words, the patentees erred by broadly claiming "with food," and perhaps they would have been better served by narrowing the claim scope to specific conditions required to achieve the stated goal of increasing oral bioavailability.  Of course, this is conditional on whether there were, in fact, specific conditions.  Moreover, the Federal Circuit pointed out the general rule that discovering a new benefit of an old process cannot render the process patentable again.  To inherently anticipate, the prior art need only meet the limitation to the extent the patented method does.  And because the claimed methods require no more than taking metaxalone with food, the prior art references that teach the same thing inherently anticipate.  The Federal Circuit also found that because claims 2-3, 8-11, and 15-17 had the same or similar preamble, they were also inherently anticipated.

Inherent Anticipation of Claims 4-6, 12-14, and 18-20 of the '128 Patent

The '128 patent also contained dependant claims that limit the time-frame in which the food must be ingested.  These ranged from "30 minutes prior to 3 hours after consumption," to "substantially at the same time," to "immediately after the consumption of food up to 1 hour after."  Even though none of the prior art references recited specific time requirements, King's own experts explained that "with food," as taught in the prior art, could mean "1 hour prior to up to about 2 hours after eating."  Because every claim included at least part of this range, the Federal Circuit had no difficulty finding that claims 4-6, 12-14, and 18-20 of the '128 patent were also inherently anticipated.

Claim 21 of the '128 Patent is Patent Eligible, but Nonetheless is Inherently Anticipated

Claim 21 depended from claim 1 (shown above), but included the limitation "informing the patient that administration of a therapeutically effective amount of metaxalone in a pharmaceutical composition with food results in an increase in the maximal plasma concentration (Cmax) and extent of absorption (AUC(last)) of metaxalone compared to administration without food."  The District Court invalidated this claim as patent ineligible pursuant to 35 U.S.C. § 101, because the act of informing was not transformative, as required by In re Bilski.  The Federal Circuit disagreed, pointing out that the District Court focused on the "informing" limitation, and not the claim as a whole.  Instead, the Court noted that Claim 21 as a whole is a method of treatment claim, and as such is always transformative, citing Prometheus Labs., Inc. v. Mayo Collaborative Serv., 581 F.3d 1336, 1346 (Fed. Cir. 2009).

Nevertheless, the Federal Circuit also found this claim invalid, not as patent ineligible, but as inherently anticipated.  As claim 1 was already found anticipated, the only potential source of novelty was the "informing" limitation.  The Court considered whether an inherently anticipated claim could be rendered novel by requiring that the patient be told about the existence of the inherent property.  Answering its own question, the Federal Circuit analogized the case to "printed matter" cases, such as In re Gulack, 703 F.2d 1381, 1385 (Fed. Cir. 1983), which hold that if claimed printed matter is not functionally related to a claimed product, it cannot be used to distinguish the invention from the prior art.  And because informing the patient about the benefits of a drug do not transform the process of taking the drug (even if it increased the likelihood that the patient will take the drug), claim 21 was inherently anticipated.

Claim 22 of the '128 Patent is Also Inherently Anticipated

Claim 22 also depends from claim 1, but includes the further limitation that the container have a printed label advising that administration with food results in an increase in the maximal plasma concentration (Cmax) and extent of absorption (AUC(last)) of metaxalone compared to administration without food.  This, of course, brings the case squarely within the "printed matter" cases as described above.  King tried to distinguish on the bases that this claim was a method claim, and the previous "printed matter" cases involved product claims.  However, the Federal Circuit found this to be a distinction without a difference and invalidated the claims based on inherent anticipation.

The Claims of the '102 Patent Are Inherently Anticipated or Inherently Obvious?

Claim 1 of the '102 recited:

A method of using metaxalone in the treatment of musculoskeletal conditions comprising:
providing the patient with a therapeutically effective amount of metaxalone; and
informing the patient that the administration of metaxalone with food results in an increase in at least one of C(max) and AUC(last) of metaxalone compared to administration without food.

Again, the District Court invalidated this claim as patent ineligible, but the Federal Circuit affirmed on alternate grounds, specifically that the claim was inherently anticipated.

Of more interest, the District Court also found claim 5 invalid, but as inherently obvious.  Claim 5 depends from claim 1, and limits metaxalone to a "unit dosage form."  The District Court found this claim obvious over Albanese in view of 18 R.W. Dent Jr. and Dorthey K. Ervin, A Study of Metaxalone (Skelaxin) vs. Placebo in Acute Musculoskeletal Disorders: A Cooperative Study, Current Therapeutic Research (1975) ("Dent").  King's apparently only new challenge to this holding was that the District Court did not consider the secondary considerations of non-obviousness.  Specifically, King alleged that the District Court failed to consider sales of Skelaxin from 1998 to 2003.  However, the Federal Circuit noted that sales of the drug actually began to increase before the discovery that ingesting metaxalone with food increased bioavailability.  Moreover, King apparently did not show any nexus between the alleged commercial success and the claimed invention.  As such, the District Court correctly did not give much weight to commercial success.

The Federal Circuit affirmed the obviousness of this claim because it found that "it would be obvious to a person of ordinary skill in the art to combine Dent's teaching of taking a tablet dosage of metaxalone four times a day with Albanese's teaching of administrating metaxalone with food."  However, no mention was made as to why one of skill in the art would have combined these references.  If Albanese had explicitly anticipated the other claims of these two patents, than obviousness would have probably been clear.  However, Albanese inherently anticipated the prior claims, because the newly claimed property was inherently present.  In other words, it was not known prior to the determination by the patentees.  The obviousness determination needs to take into account why one of skill in the art would have combined these two references, especially when the person of ordinary skill would have been unaware of this inherent property.  It is possible that such a reason existed, for example, it is possible that the use of the unit dosage form would have caused increased nausea and/or gastrointestinal distress (thereby leading one to take it with food).  However, no such reason was articulated in the Federal Circuit's opinion, and without articulating such a reason, it would appear that one of skill in the art would have only combined these references by mere happenstance.  As obviousness determination requires more.  The Court did point out that the person of ordinary skill is also a person of ordinary creativity, and not an automaton.  Nevertheless, such a hypothetically person needs to have a reason to be creative, and the Federal Circuit did not even address this fact.  As such, it is not clear that claim 5 of the '102 patent should have been invalidated.

Jurisdiction of Elan, the Prior Patent Holder

The Federal Circuit also addressed the issue whether the District Court had jurisdiction over Elan, because the lower court had entered the order against both King and Elan.  Elan had previously owned the '128 patent, and the application that led to the '102 patent.  However, before the filing of the present suit, Elan sold the patent and application to King, recording the assignment with the Patent and Trademark office.  Nevertheless, Eon filed declaratory counterclaims against Elan.  Elan even provided a letter to the District Court that stated that it waived any rights to pursue any damages or relief from Eon based on Elan's past ownership of the '128 patent.  The District Court did not address whether it had jurisdiction over Elan.  The Federal Circuit said was a mistake, and found that Eon had not met its burden of demonstrating that an actual case or controversy existed between it and Elan.  The broad and unrestricted covenants not sue were determinative.  Consequently, the Court vacated the order of invalidity as entered against Elan.

King Pharmaceuticals, Inc. v. Eon Labs, Inc. (Fed. Cir. 2010)
Panel: Circuit Judges Bryson, Gajarsa, and Prost
Opinion by Circuit Judge Gajarsa

Re-examination Ordered on "Expired" Harvard Oncomouse Patent

    By Kevin E. Noonan --

On Monday, the U.S. Patent and Trademark Office granted an ex parte reexamination request for U.S. Patent No. 5,925,803, the latest-filed and last-granted member of the Harvard Oncomouse patent family.  Remarkable about the petition is that the third party requester (TPR), Ellen Gonzales of Gonzales Patent Services, contends that the '803 patent has expired by operation of a terminal disclaimer filed in an earlier-filed application, but maintains that despite the putative expiration, the Office retains jurisdiction to consider the re-examination request.

There are three claims in the '803 patent, all directed to methods for testing a compound suspected to be a carcinogen:

1.  A method of testing a material suspected of being a carcinogen, comprising exposing a transgenic mouse to said material and detecting neoplasms as an indication of carcinogenicity, wherein the germ cells and somatic cells of said mouse contain an activated oncogene sequence introduced into said mouse, or an ancestor of said mouse, at an embryonic stage.

2.  A method of testing a material suspected of conferring protection against the development of neoplasms, said method comprising
    (1) providing a first and a second transgenic mouse, the germ cells and somatic cells of which contain an activated oncogene sequence introduced into said mice, or an ancestor of said mice, at an embryonic stage,
    (2) treating said first mouse with said material, and
    (3) detecting, as an indication of said protection, a reduced incidence of development of neoplasms in said first mouse, compared to the incidence in said second mouse, which is not so treated.

3.  The method of claim 1, further comprising exposing said first and second mice to a carcinogen prior to, after, or simultaneously with treating said first mouse with said material.

The TPR asserted six substantial new questions (SNQ) of patentability against these claims:

• SNQ1:  Claim 1 of the '803 Subject Patent is obvious in view of Claims 1, 11, and 12 of [grandparent U.S. Patent No. 4,736,866] in view of Ward et al. or Schach et al. under the doctrine of judicially-created obviousness-type double patenting.

• SNQ2:  Claims 1-3 of the '803 Subject Patent are unpatentable in view of the Claims 1-12 of the '866 Grandparent Patent under the doctrine of judicially-created obviousness-type double patenting.

• SNQ3:  Claims 2-3 of the '803 Subject Patent are obvious in view of the claims of the '866 Grandparent Patent in view of the Proctor Patent, under the doctrine of judicially-created obviousness-type double patenting.

• SNQ4:  Claims 1-3 of the '803 Subject Patent are obvious under 35 U.S.C. 103(a) in view of Schwab et al.

• SNQ5:  Claims 2-3 of the '803 Subject Patent are obvious under 35 U.S.C. 103(a) over Jaenisch et al. in view of the Proctor patent.

• SNQ6:  Claim 1 of the '803 Subject Patent is obvious under 35 U.S.C. 103(a) over Jaenisch et al. in view of the either Ward et al. or Schach et al.

TPR contends that the following describes the priority chain and the relationship between the grandparent '866 patent, parent U.S. Patent No. 5,087,571, and the '803 patent.  The '866 patent, according to the TPR, contained claims 1-12 directed to the Harvard oncomouse; claims 13-19 directed to methods for testing a compound suspected of being a carcinogen; and claims 20-22 directed to plasmid constructs; claim 1 is representative:

1.  A transgenic non-human mammal all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage.

The TPR contends in her request that the applicant cancelled the claims to the testing methods and let claims to the Harvard Oncomouse proceed to grant as the '866 patent.

The application that gave rise to the parent '571 patent, the TPR contends, was improperly designated as a "divisional application," despite the fact that no restriction requirement was raised against any of the claims of the '866 patent and that the patentee voluntarily cancelled the testing method claims in the '866 patent as part of their patenting strategy.  This application was filed initially with original claims 13-24 that had been cancelled during prosecution of the '866 patent.  Prosecution of the '571 patent resulted in two granted claims:

1.  A method of providing a cell culture comprising
    (1) providing a transgenic non-human mammal, all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage; and
    (2) culturing one or more of said somatic cells.

2.  A cell derived from a somatic cell obtained from a transgenic non-human mammal, all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage which cell contains said recombinant activated oncogene sequence.

Significantly, applicants filed a terminal disclaimer over the claims of the '866 patent in order to overcome an obviousness-type double patenting rejection raised against these claims.  The following language in the terminal disclaimer is important for the arguments successfully raised in the request (with emphasis added):

Your petitioner, President and Fellows of Harvard College, hereby disclaims any portion of an patent granted on the above-identified application or on any application which is entitled to the benefit of the filing date of this application under 35 U.S.C. 120 not extending the term of any patent granted on that application beyond the term of issued U.S. Patent No. 4,736,866 issued April 12, 1988.

The TPR contended that this language was not required in a terminal disclaimer and the patentees were bound by it (i.e., that it cannot be rescinded by certificate of correction, reissue, or reexamination, even if it was filed in error).  As in the '866 patent, patentees cancelled the testing method claims in the application that granted as the '571 patent.

The application that granted as the '803 patent was the first member of the priority chain having a restriction requirement, which was filed with claims 1-13 and 15-24 of the grandparent application.  This restriction requirement identified three groups:  claims 1-12 and 15-17, directed to a transgenic animal and methods for producing such an animal; claims 13, 18 and 19, drawn to suspected carcinogen testing methods; and claims 20-24 being drawn to plasmids; applicants elected to prosecute the testing method claims.  During prosecution the applicants overcame an obviousness rejection based on the '866 patent and the Ward and Schah references on the grounds that 35 U.S.C. § 121 "prohibits the USPTO from rejecting a later divisional application 'where (as here) the divisional application is filed as the result of a restriction requirement in the original case.'"  The TPR contended that this statement is inaccurate, insofar as there was no restriction requirement issued during prosecution of either the grandparent '866 patent or the '571 patent.

The TPR argued in the request that the '803 patent expired by operation of the terminal disclaimer filed in the '571 patent on July 12, 2005, the expiration date of the '866 patent.  Reexamination is still proper, she contended, because a reexamination "may be declared for an expired patent at any time during the enforceability of the patent" (emphasis in original), which will run until July 12, 2011 (i.e., six years after the patents expiration date; M.P.E.P. § 2211).  Moreover, a question arising as a result of obviousness-type double patenting is appropriate for raising a substantial new question of patentability in a reexamination (M.P.E.P. § 2217).  Finally, the TPR argued that public policy concerns supported the Office granting her request for reexamination:

TPR respectfully requests that a Reexamination nonetheless be declared to serve the public notice function of Reexaminations (i.e., to make it clear on the record that the '803 Subject Patent is only avoiding the double-patenting rejections because of the terminal disclaimer in the '571 Parent Patent, which likewise informs the public that the patent expired on July 12, 2005).  In such a case, even if a Reexamination is not declared, to serve the public notice function, TPR respectfully requests that the Patent Office indicate in writing that the terminal disclaimer in the '571 Parent Patent application insulates the '803 Subject Patent from obviousness type double patenting rejections, and further, affirmatively state that the '803 Subject Patent therefore expired on July 12, 2005.  This public notice function is particularly important in this case as the Patentee is publicly advertising that the '803 Subject Patent does not expire until July of 2016, which is 11 years past the actual expiration date.

The Office agreed.  As set forth under Reexamination Control No. 90/010,955, the Office granted the reexamination based on all six substantial new questions of patentability.  Although the paper granting the request cited revisions to the reexamination statute (35 U.S.C. § 301 et seq.) enacted by Congress in 2002 in response to the Federal Circuit's decision in the In re Portola Packaging case, which permit a reexamination request to be granted on art considered by the Office during ex parte prosecution provided that a substantial new question of patentability is raised, the paper also notes that all of the art cited by the TPR (except for the Ward reference) had not been considered by the examiner during prosecution of the '803 patent.  Moreover, the Office did not separately address the standing issue raised by the TPR, apparently agreeing that a reexamination is properly granted on an expired patent during the period where the patent right can be enforced.

The reexamination will be considered by Primary Examiners Brenda Brumback, Padmashri Ponnaluri, and SPE Deborah Jones.

Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc. (Fed. Cir. 2010)

Further Adventures in Obviousness and Inequitable Conduct

    By Kevin E. Noonan --

In Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc., the Federal Circuit exercised its prerogative to illustrate its fractured jurisprudence on two issues, obviousness and inequitable conduct, in a (fortunately) nonprecedential decision.  Contrary to its Congressional mandate to bring jurisprudential consistency to U.S. patent law, on these matters at least the outcome is highly dependent on the constitution of the panel rather than a consistent application of the law.  In view of the fact-intensive nature of the issues involved it is perhaps inevitable, but that does little to help the patent community understand what behavior does (and does not) fit within the statutory standard.

This case arose after Par filed an ANDA for Purdue Pharma's Ultran ER® product, a sustained release formulation of the opiate analgesic tramadol, with a Paragraph IV certification that Purdue Pharma's Orange Book-listed, U.S. Patent Nos. 6,254,887 and 7,074,430 were invalid and/or unenforceable.  The District Court held that Par's generic tramadol formulation infringed claims 3, 13, 27, and 29 of the '887 patent and claims 5, 7, and 11 of the '430 patent.  However, the Court also found that these claims were invalid for obviousness over the disclosure of U.S. Patent No. 5,580,578 ("the Oshlack patent") but that the patents were not unenforceable for inequitable conduct.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges Linn and Dyk.  The panel's grounds for affirming the obviousness determination was that the Oshlack patent disclosed tramadol as one of 14 opiate drugs that could be formulated in an extended-release formulation, dosing to encompass a bioavailability profile of from 10 to 33 hours, and a "controlled release coating" comprising water-insoluble polymethacrylate and polyvinylpyrrolidone.  Purdue's patents disclosed alternative, water-insoluble coatings.  The Court held that the Oshlack patent selected tramadol as one of 14 opiate drugs (out of the "myriad other possible active ingredients" that could have been used to prepare an extended-release formulation), and that this disclosure rendered Purdue's claimed formulations obvious "regardless of whether or not the patent lists tramadol as a preferred embodiment."  (The Court helpfully cited another case, Perricone v. Medicis Pharm. Corp., that "reject[ed] the notion that one of [14 listed] ingredients cannot anticipate because it appears without special emphasis in a longer list," relying it seems on the maxim that "anticipation is the epitome of obviousness," In re Kalm, 378 F.2d 959, 962 (CCPA 1967).)  The Court also found that the Oshlack reference expressly taught "once-daily" tramadol formulations albeit without necessarily enabling production thereof (citing Symbol Technologies Inc. v. Opticon, Inc., 935 F.2d 1569, 1578 (Fed. Cir. 1991)).  The panel held that Purdue had waived arguments relating to the non-obviousness of formulations having bioavailability profiles disclosed and claimed in the '887 and '430 patents, as well as (and perhaps more importantly) the argument that the Oshlack patent was not prior art under 35 U.S.C. § 102(e), because these arguments were not raised before the District Court.  A review of Patent Office records indicates that the Oshlack patent was assigned to Purdue in December 1997, suggesting that Purdue's argument was that this patent was not available as prior art under § 102(e) pursuant to the provisions of 35 U.S.C. § 103(c).  This argument, properly made, should have been enough to overcome Par's obviousness defense.  Finally, the Court continued its recent pattern of disregarding the "secondary considerations" of non-obviousness under the Supreme Court's Graham v. John Deere precedent, agreeing with the District Court that evidence of copying was irrelevant in an ANDA context (an argument of apparently first enunciation), and that Purdue had not provided sufficient context (or perhaps sufficient "nexus") for its commercial success evidence to rebut the District Court's legal conclusion of obviousness.

Turning to inequitable conduct, the panel agreed with the District Court that Purdue had withheld material information from the Office in the form of experimental data, and indeed had submitted a "misleading" affidavit during prosecution:  the declaration contained "more favorable" experimental data than the data that Purdue withheld.  Par reasonably contended that this constituted inequitable conduct, since Purdue could provide "no credible explanation" for these actions.  In finding no inequitable conduct, the District Court found insufficient evidence of deceptive intent.  For example, the Court characterized the declaration as being "an overly aggressive attempt to put a positive spin on the data."  Par also contended that the District Court erred in relying on "evidence" of good faith, which included that the declarant failed to recall why the less-favorable data was not submitted to the Office, "that the formulators did not recognize the data's import to patentability when the evidence showed that they did," and that patentees had later submitted "similar" (presumptively negative) data to the Office.

The Federal Circuit affirmed the District Court's finding of no inequitable conduct based on several factors that are consistent with the deference that the "abuse of discretion" standard is intended to produce, as well as others that are less reasonably related to the conclusion.  These include witness credibility, but also include that the declaration was "prepared" to overcome a rejection on inherent anticipation before the European Patent Office (but if it wasn't submitted to the USPTO it could not have been used to support an inequitable conduct defense).  The panel also seemed to sanction as a factor related to deceptive intent the later submission of "more pertinent experimental results," which the Court noted had been "generated for a foreign litigation."  Also impliedly sanctioned was the "credible excuse" proffered by Purdue, that "[t]he omitted data did not reproduce conditions from the prior art and revealed dissolution rates outside those claimed in the asserted patents."  The panel stated that "[e]ven assuming that the applicants withheld material data and submitted a materially misleading declaration, as the district court found" in affirming the District Court's decision, a statement that seems to stretch to the breaking point the principle that intent to deceive cannot be inferred from materiality alone.  And the fact that Purdue later disclosed "similar" experimental data seems equally inadequate to overcome the behavior the District Court found, and the panel agreed, was exhibited by Purdue in not only withholding material information but filing a misleading affidavit (compare, for example, different panel holdings in Aventis Pharma S.A. v. Amphastar Pharma, Inc. and Ferring B.V. v. Barr Laboratories, Inc.).  In making this determination, the panel seems to distinguish an earlier panel's decision in Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed. Cir. 2007) on the grounds that in Cargill, the patentees consistently submitted misleading information to the Office.  And the panel found that "the reasonableness of inferring that any omission or misleading statement in the preparation of the declaration was made with the specific intent of deceiving the PTO" was diminished because the declaration was prepared for an EPO proceeding (ignoring the fact that the issue was the intent in submitting the declaration to the USPTO during prosecution of the '887 and '430 patents).  For this panel, at least, the District Court's decision of no inequitable conduct was affirmed "[b]ecause intent to deceive is not the single most reasonable inference that can be drawn from the evidence."

Perhaps the en banc court's decision in Therasense v. Becton, Dickenson & Co. will bring some consistency to the Court's inequitable conduct jurisprudence.

Purdue Pharma Products L.P. v. Par Pharmaceutical, Inc. (Fed. Cir. 2010)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Linn, and Dyk
Opinion by Circuit Judge Lourie

In re Arora (Fed. Cir. 2010)

    By Donald Zuhn --

Earlier this month, the Federal Circuit, in In re Arora, affirmed a decision of the Board of Patent Appeals and Interferences affirming the rejection of claims 11-16 of Appellant Arun Arora's application as being obvious in view of U.S. Patent Nos. 6,978,286 and 5,934,273.  Claims 11-16 of Dr. Arora's application relate to a method for converting drug dosages to prevent overdose.  Representative claim 11 recites:

11.  A method for converting drug dosages to prevent overdose, comprising the steps of:
    defining a common medication reference range;
    assigning dosages of first and second drugs to respective values within the common medication reference range;
    prescribing a particular dosage of the first drug;
    identifying a value within the common medication reference range for the particular dosage; and
    permitting prescription fulfillment with a dosage of the second drug which corresponds [to] the dosage of the first drug using the common medication reference range.

On appeal, Dr. Arora argued that the '286 and '273 patents fail to disclose or suggest the steps of "assigning dosages of first and second drugs to respective values within the common medication reference range" or "permitting prescription fulfillment with a dosage of the second drug which corresponds [to] the dosage of the first drug using the common medication reference range."

In an opinion issued per curiam, the panel disagreed, stating that "substantial evidence supports the Board's finding that the references teach those two limitations."  In response to Dr. Arora's argument that '286 patent "does not teach 'assigning dosages' of two different drugs to values in the same reference range, i.e., the claimed 'common medication reference range,'" the panel states that "[e]ven if [the '286 patent] does not explicitly disclose conversion to a common reference range, . . . the Board found that a person of ordinary skill in the art would appreciate that dosages should be assigned to respective values in a common reference range based on [the '273 patent's] teaching that equipotent doses of different medications should be directly compared."  In response to Dr. Arora's argument that the '273 patent "should be understood as limited to the narrow teaching that a smaller amount of a drug is needed when delivered via [the '273 patent's] inventive dry powder inhaler instead of a metered dose inhaler," the panel states that "[i]t is well-settled . . . that a prior art reference must be considered for all that it teaches to those of ordinary skill in the art, not just the embodiments disclosed therein," and that the '273 patent "teaches the broad principle that different drugs are equipotent at different dosages."  The panel therefore concluded that "[s]ubstantial evidence supports the Board's findings regarding the teachings of [the '273 patent], and the Board did not err in concluding that a person of ordinary skill in the art would apply those teachings to [the '286 patent] to convert dosages of two different drugs into a 'common medication reference range,'" and affirmed the Board's decision affirming the rejection of the claims.

In re Arora (Fed. Cir. 2010)
Nonprecedential disposition
Panel: Circuit Judges Gajarsa, Plager, and Dyk
Per curiam opinion

Applera Corp. v. Illumina, Inc. (Fed. Cir. 2010)

    By Kevin E. Noonan --

The Federal Circuit waded into the question of patent ownership in a dispute between a patent attorney and Applera-Applied Biosystems over patents involving nucleic acid sequencing technology in Applera Corp. v. Illumina, Inc.  The case is unusual in at least three respects:  the inventor is a lawyer, not a scientist; the patents are substantially prophetic in a technology that is heavily dependent on experimental results; and the dispute was resolved not on the basis of a patent law issue but with the Federal Circuit interpreting the provisions of California employment law.  The result, while nonprecedential, does shed some light on how these issues are intimately dependent on the underlying facts of the inventor's employment as well as the provisions of state law (which, in view of its variability, prevents there being any definite rubrics from this decision for resolving these issues).

The patents at issue were U.S. Patent Nos. 5,750,341; 5,969,119; and 6,306,597 (all three patents are related).  All three name Stephen Macevicz, Ph.D. as inventor.  While employed as a patent attorney for Applera, Dr. Macevicz developed a method for nucleic acid sequencing based on "repeated rounds of ligation and cleavage of oligonucleotide probes."  Claim 1 of the '597 patent is illustrative of these methods:

1.  A method for identifying a sequence of nucleotides in a polynucleotide, the method comprising the steps of:
    (a)  extending an initializing oligonucleotide along the polynucleotide by ligating an oligonucleotide probe thereto to form an extended duplex;
    (b)  identifying one or more nucleotides of the polynucleotide; and
    (c)  repeating steps (a) and (b) until the sequence of nucleotides is determined.

It is undisputed that Dr. Macevicz did not inform Applera of these applications while they employed him.  It is also undisputed that these patents stemmed from related but distinct technology developed by Sydney Brenner, a Nobel Prize-winning biologist for whom Dr. Macevicz had prepared and prosecuted patents for the technology.  (Curiously, he performed this patent prosecution work for Dr. Brenner while being employed by Applera, who apparently had a policy of allowing their patent professionals to take on "outside work.")  Finally, it is undisputed that Applera was given the opportunity to license Dr. Brenner's patents but declined based on its determination that the technology was "'far too expensive' and 'complex and thus not a 'viable commercial product' for Applera."  Thereafter, Applera acquired Agencourt Personal Genomics, which had developed its own "ligation-and-cleavage" sequencing technology and formed the basis of Applera's "SOLiD™ System DNA sequencing technology."  Dr. Macevicz had moved on to Solexa by this time, which licensed both Dr. Brenner's patents as well as Dr. Macevicz's.  The instant lawsuit resulted from Applera filing a declaratory judgment action claiming ownership of Dr. Macevicz's patents, as well as non-infringement and invalidity.

Solexa won jury verdicts in its favor on the ownership issues and that claim 1 of the '119 patent was not invalid, but the jury also determined that this claim was not infringed by Applera.  The District Court denied the parties' motions for JMOL.

The Federal Circuit, in an opinion by Judge Moore joined by Judges Lourie and Gajarsa, considered three contested issues:  patent ownership, non-obviousness of claim 1 of the '119 patent, and claim construction of claim 1 of the '597 patent (which the parties stipulated was not infringed under the District Court's interpretation).  On the ownership issue, the Federal Circuit construed the provisions of Dr. Macevicz's employment agreement with Applera, which provided that Dr. Macevicz was obligated to assign any inventions he developed while employed by Applera unless:

(1)  the invention was developed entirely on his own time;
(2)  "no equipment, supplies, facility, or trade secret of the Company was used in its development"; and
(3)  "(i) it does not relate to the business or actual or demonstrably anticipated research or development of the Company, or (ii) it does not result from any work performed by [him] for the Company."

The jury by special verdict found that Dr. Macevicz satisfied all three of these provisions.  According to the opinion, the first provision was not in dispute.  Dr. Macevicz's satisfaction of the second provision stemmed from the singular nature of his invention -- it was purely prophetic and there was no experimental verification in the specification -- as well as from Dr. Macevicz's sagacity in "detail[ing] his inventions in a laboratory notebook he purchased himself."  There was a secondary issue of whether Dr. Macevicz had utilized any of Applera's trade secrets, specifically the work of an Applera scientist (Dr. Fung), but there was substantial evidence that Dr. Fung's work was unrelated to conception of Dr. Macevicz's invention.

The question to be decided by the panel was whether the jury's determination that the third criterion was satisfied was supported by substantial evidence.  The parties disagreed on whether Dr. Macevicz needed to satisfy only one (Solexa) or both (Applera) provisions of this criterion, i.e., whether Dr. Macevicz's invention did not "relate to the business or actual or demonstrably anticipated research or development of the Company," or did not "result from any work performed by [him] for the Company."  This question came down to a matter of contract interpretation, which the Federal Circuit said was a state law question, subject to the Court's de novo review.  In analyzing this issue, the Court cited a California Court of Appeals case, Cubic Corp. v. Marty, and how that court construed the provisions of a "similar provision" (§ 2870) of the California Labor Code, which reads as follows:

Any provision in an employment agreement which provides that an employee shall assign or offer to assign any of his or her rights in an invention to his or her employer shall not apply to an invention for which no equipment, supplies, facility, or trade secret information of the employer was used and which was developed entirely on the employee's own time, and
    (a)  which does not relate
        (1)  to the business of the employer or
        (2)  to the employer's actual or demonstrably anticipated research or development, or
    (b)  which does not result from any work performed by the employee for the employer.
    Any provision, which purports to apply to such an invention, is to that extent against the public policy of this state and is to that extent void and unenforceable.  Cal. Lab. Code § 2870 (West 1979).

In the Cubic case, the California court held that unless both conditions (a) and (b) were met, the contract was enforceable under California law.  Here, the Federal Circuit distinguished Cubic, deciding that the better view (and one that the panel was not convinced the California Supreme Court would dispute) was to construe the language of the employment agreement according to the plain meaning of its terms.  Thus, the CAFC held that the provisions of the third criterion were in the alternative, i.e., disjunctive not conjunctive, and that if Dr. Macevicz satisfied either provision, then there was substantial evidence to support the jury's determination that he was not obligated to assign his rights to Applera.  The panel found that there was substantial evidence that Dr. Macevicz's inventions did not result from any work he performed for Applera.  This conclusion was supported by the existence of another patent on nucleic acid sequencing Dr. Macevicz obtained before he began working for Applera, refuting Applera's contention that his work for them was the basis for conception of the inventions disclosed and claimed in the patents-in-suit.

The non-obviousness question regarded claim 1 of the '119 patent:

1.  An oligonucleotide probe of the formula:

HO—(3')(B)j(5')—OP(=O)(O—)NH—(B)k-Bt*

wherein:
B is a nucleotide or an analog thereof;
j is in the range of from 1 to 12;
k is in the range of from 1 to 12, such that the sum of j and k is less than or equal to 12;
Bt* is a labeled, nonextendable chain terminating moiety.

It was not disputed that the prior art disclosed every aspect of the oligonucleotide recited in this claim except that the chain-terminating moiety, Bt, comprised a label.  Also undisputed was that labeled oligonucleotides were known in the prior art.  The question of whether the skilled worker would have been motivated to combine these references (or, in the language of KSR v. Teleflex, whether there would have been a reasoned basis to do so) was presented to the jury as a factual question, with each parties' contentions supported by expert testimony.  According to the Federal Circuit, "[t]he jury apparently found the testimony of Solexa's expert more credible.  We will not disturb its verdict."

Finally, regarding construction of claim 1 of the '597 patent (set forth above), the issue before the Court was the meaning of the following terms:

• "extending an initializing oligonucleotide along the polynucleotide by ligating an oligonucleotide probe thereto to form an extended duplex" in step (a);
• "identifying" in step (b) and
• "repeating steps (a) and (b) until the sequence of nucleotides is determined" in step (c).

Solexa argued that the first term must be interpreted to mean that "each oligonucleotide probe must be ligated to an initializing nucleotide during repetition of the cycle" rather than that "the oligonucleotide probe can be ligated to an extended duplex (an initializing probe that has already been extended by an oligonucleotide probe)."  The District Court disagreed, interpreting the claim to require that "step (a) includes an extension process, whereby, with each repetition, an additional probe is added to what is already there, so that the chain gets longer and longer."  In construing the claim in agreement with the District Court, the Federal Circuit referenced the specification, "which repeatedly describes regenerating an extendable end on the extended duplex to allow for successive cycles of ligation."

Regarding the meaning of the term "identifying" in step (b) of the claimed method, the District Court construed the term to mean that "at least one nucleotide [is] identified during step (b), that is, its identity as an A, G, C or T must be determined."  The Court also construed step (c) as requiring such identification to occur during each cycle of repeating steps (a), (b) and (c).  Solexa argued that the use of the word "comprising" meant that the method could be practiced in such a way that the identifying step was "skipped" in some iterations of the method, and then multiple nucleotides identified by the end of the process.

The Federal Circuit disagreed with Solexa's interpretation, citing Dippin' Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed. Cir. 2007) that "'[c]omprising' is not a weasel work with which to abrogate claim limitations."  Again consulting the specification, the panel held that the invention was described as comprising repeated cycles of the steps (a), (b) and (c), and that "in order to repeat steps (a) and (b)" (as required in step (c)), "one must actually perform step (b)."  Moreover, the Court cited the prosecution history of the '597 patent to reject Solexa's construction of step (c), affirming the District Court's construction giving the words of claim step (c ) their ordinary and customary meaning.

Applera Corp. v. Illumina, Inc. (Fed. Cir. 2010)
Nonprecedential diposition
Panel: Circuit Judges Lourie, Gajarsa, and Moore
Opinion by Circuit Judge Moore

In re Chapman (Fed. Cir. 2010)

The Standard of Reviewing Obviousness Determinations from the USPTO

    By Kevin E. Noonan --

The Federal Circuit vacated and remanded a Board of Patent Appeals and Interferences determination that the claims in U.S. Application No. 09/719,045 were obvious on Thursday, in deciding In re Chapman.  The CAFC's decision addressed not only the proper obviousness standard that the Board must apply, but also revisited the proper standard of review the Federal Circuit applies regarding factual determinations by the Office according to the Supreme Court's instructions in Dickinson v. Zurko.

The Chapman application is a U.S. national phase of an International Application first filed in Great Britain.  The following claim is representative:

1.  A divalent antibody fragment comprising
    (a)  two antibody heavy chains and
    (b)  at least one polymer molecule effective for increasing the circulating half-life of said fragment in covalent linkage,
    (c)  each heavy chain being covalently linked to the other by at least one non-disulphide interchain bridge linking the sulphur atom of a cysteine residue in one chain to the sulphur atom of a cysteine residue in the other chain, said cysteine residues being located outside of the variable region domain of each chain, characterized in that the at least one non-disulphide interchain bridge contains the at least one covalently linked polymer molecule.

As the CAFC explained, the invention was directed towards making a derivative of an antibody comprising two heavy chains linked to one another using a polymer attached at each end to a sulfur atom comprising a cysteine residue in each of the different heavy chain molecules, and that the cysteine residues in each heavy chain came from outside the variable region domain (i.e., where the specificity of antibody binding is structurally determined).

Importantly for the Court's understanding of the underlying technology, the government explained that there was a need in the art for antibody fragments, since antibodies were frequently too large and had extended half-lives that could be deleterious to a patient.  Advantages of antibody fragments, according to the Court, were that they had better serum clearance rates and more rapid distribution throughout the body.  The Court noted that enzymatic digestion was known to produce antibody fragments effectively.  The Court also noted that one species (F(ab')2) produced by digestion (with pepsin) was "dumbbell shaped" and that it was divalent (having two antigen binding sites) as required by the claims.

With regard to the teachings of the specification supporting the Chapman claims, the Court said that Chapman's specification taught combining two separate Fab' fragments (having removed the light claims) "using an interchain bridge that contains at least one covalently linked polymer."  Thus, the linkage between two heavy chain molecules is mediated by the polymer rather than the disulfide bridges used in the native molecule.  One of the advantages of using a polymer rather than a disulfide bridge is that it increases the circulating half-life of the antibody fragment, according to the Court, to a half-life "that is intermediate between that of an individual fragment and a whole antibody."

The prior art asserted by the Office included U.S. Patent No. 6,025,158 (the Gonzales reference), which the Court said "describes linking antibody fragments to a polymer to increase an antibody's circulating half-life for therapeutic purposes."  One polymer known in the art, polyethylene glycol (PEG), when attached to the sulfur atom in the cysteine residue in the hinge region of the molecule "reduced clearance compared to the parental Fab' molecule"; the reference also describes dumbbell-shaped embodiments "made up of two antibody fragments linked by a polymer and the preparation of such conjugates," including Fab, Fab', Fab'-SH, F(ab')2, scFv, and Fv as choice for the antibody portion of the conjugate and PEG as the polymer linking them.  Included in the description of the '158 patent were methods for linking antibody fragments and the polymer without using a disulphilde bond in some embodiments (albeit using sulfur atoms in cysteine residues as the point of PEG attachment, specifically cysteine residues in the hinge region).

The Examiner applied the Gonzales reference for anticipation under 35 U.S.C. § 102(e), or in the alternative, combined Gonzales with U.S. Patent No. 5,436,154 to Barbanti (teaching antibody therapy) in rejecting the claims under 35 U.S.C. § 103.  The Board affirmed as to the obviousness rejection, reversing the anticipation rejection on the ground that "too much in the way of mental gymnastics would have been necessary for persons of ordinary skill to have 'at once envisage[d]' the claimed antibody structure among the different structures described in the Gonzalez patent.  . . .  [P]icking and choosing would have been necessary to have arrived at the antibody structure of claim 1."  The Federal Circuit noted several findings of fact made by the Board in affirming the Examiner's rejections.  These included:

• Antibody fragments disclosed in the Gonzales reference include monovalent Fab fragments, monovalent Fab' fragments having one or more cysteine residues in the constant region, or F(ab')2 fragments having a disulfide bond between cysteine residues in the hinge region.

• The Gonzales reference disclosed conjugates wherein the F(ab')2 fragment is conjugated to the polymer at a cysteine that would otherwise comprise the disulfide bond between the two fragments.  However, Gonzales describes the polymer as being linked to a cysteine in the light chain or the heavy chain, and that the cysteine in the other chain that would otherwise for a disulfide bond with the cysteine bonded to the polymer is changed to prevent a disulfide bond from forming.

• Gonzales in other embodiments describes a polymer that links two antibody fragments in a "dumbbell-shaped structure," using a polymer having multiple functional groups "permitting the direct attachment . . . of two or more antibody fragments to the polymer backbone."

The Board agreed with the examiner that the Gonzales reference had disclosed "linking two antibody fragments with a polymer to form a 'dumbbell-shaped' structure," and had expressly taught "a Fab molecule with a PEG linked to the hinge cysteine of the heavy chain."  "The only issue," according to the Board, was "whether persons of skill in the art would have had reason to join the [Fab'] fragments together using a polymer linked to the hinge cysteine residue."  The Board concluded that the preference disclosed in the Gonzales reference for linking the polymer to the hinge region would have "led the skilled artisan to utilize the claimed hinge cysteine," based in part on the advantages disclosed in the Gonzales reference regarding such linkages (i.e., producing "reduced clearance" from the bloodstream).  Especially important for the Board's decision was that, in its view, the Gonzales reference taught "a complete working example" of attaching a polymer to a hinge region cysteine residue.  The combination of this teaching, and the "dumbbell" structure disclosed in the Gonzales reference, "would have suggested to the ordinary skilled person that such Fab' fragments could be readily linked polymer to polymer using a bifunctional linker, as explicitly stated by Gonzalez when characterizing the dumbbell-shaped antibody structure."

In the Federal Circuit opinion, by Judge Dyk joined by Judges Gajarsa and Clevenger, the Court began with the standard of review:  no deference for legal conclusions, and substantial evidence for factual findings.  The opinion notes that both parties agree that whether the obviousness rejection was correctly maintained depends on whether the Office had correctly interpreted the teachings of the Gonzales reference.  In this regard, the Court refused to reverse the Board's determination as a matter of law, instead remanding to the Board "to correct certain errors in the Board's decision."  The Court rejected applicants' argument that the Gonzales reference teaches away from the claimed invention, based on the multiplicity of positions for polymer attachment, in view of the express preference for attachment at the hinge region.  The Court also noted that the reference was directed towards solving the same problem as the claimed invention -- increasing the half-life of the antibody in circulation.

Applicants' most persuasive argument was directed to three of the Board's factual findings, which both applicants and the government agreed were erroneous.  The difference in the parties position was that the Office argued that the errors were harmless, and the opinion hinged on the Court's assessment of the harm caused by these errors, applying the same "harmless error" rule that it applies to factual determinations from district courts, citing In re Watts, 354 F.3d 1362 (Fed. Cir. 2004) (citing In re McDaniel, 293 F.3d 1379 (Fed. Cir. 2002) and Gechter v. Davidson, 116 F.3d 1454 (Fed. Cir. 1997)), an approach the opinion asserted was affirmed by the Supreme Court in Shinseki v. Sanders, 129 S. Ct. 1696, 1706 (2009).

Specifically, the Board erred in finding that:

• Gonzales taught a "dumbbell-shaped" structure comprising two monovalent Fab' fragments lined via a polymer.  The government agreed that the Board "conflated" two correct statements on the record from the Examiner to arrive at an incorrect conclusion.  The Court found that this error was harmless, because the Board did not rely on "any such explicit disclosure" in the Gonzales reference

• "Gonzalez describes a divalent antibody in which the polymer is linked between light and heavy chains and only one cysteine residue is present."  The Examiner stated that "Gonzalez describes conjugates containing an 'F(ab')2 antibody fragment in which the polymer is attached between the disulphide bridge that would ordinarily link the light and heavy chains.'"  The government conceded at oral argument that applicants were correct, that the Gonzales reference in fact disclosed that:

[T]he conjugate contains a F(ab')2 antibody fragment attached to no more than about 2 polymer molecules, wherein every polymer molecule is attached to a cysteine residue in the light or heavy chain of the antibody fragment that would ordinarily form the disulfide bridge linking the light and heavy chains, wherein the disulfide bridge is avoided by substituting another amino acid, such a serine, for the corresponding cysteine residue in the opposite chain.

• Finally, applicants argued (and the government agreed) that Gonzales taught that there were up to six antibody fragments that could be conjugated to a polymer (F(ab), F(ab'), F(ab')-SH, F(ab')2, scFv, and Fv) and not just Fab, Fab' or F(ab')2 fragments.

The Court found that both of the latter references were not harmless because "they increased the likelihood that [applicants were] denied a patent on grounds of obviousness."  The Board's obviousness finding being based on "a misunderstanding" of the Gonzales reference "called into question" its legal determination of obviousness, according to the Federal Circuit.  Specifically, if the Board misinterpreted the Gonzales reference regarding whether it contained a teaching of using a polymer to link the light and heavy chains in an F(ab')2 fragment, then applicants' invention of using a polymer to link two F(ab')2 fragments together "may be less obvious" in the Court's opinion.  Similarly, with regard to the number of possible fragments that could be conjugated, "if the Board did not appreciate the full scope of antibody fragments disclosed in Gonzalez, we cannot be confident about its ultimate conclusion that the selection of one of them to form Chapman's molecule is obvious, as it appears that there are more possibilities from which to choose."  Thus, "[b]ecause we cannot say with confidence that the Board would have reached the same conclusion in the absence of these errors, we are persuaded they are indeed harmful."

Interestingly, despite the Court's clear understanding that the Board had made several prejudicial errors in making its obviousness determination, rather than reversing the Board outright the Court remanded to permit the Board to "revisit" its obviousness assessment, in view of a correct understanding of the Gonzales reference.  "The Board is in no way precluded from, and indeed may be correct in, finding the claims to be obvious, particularly in the light of Gonzalez's disclosure of joining two antibody fragments together with a polymer to make a dumbbell-shaped structure," wherein the Court thus exhibited a high level of deference to how the Board makes its factual findings.

In re Chapman (Fed. Cir. 2010)
Panel: Circuit Judges Gajarsa, Clevenger, and Dyk
Opinion by Circuit Judge Dyk

Top Stories of 2009: #10, #9, and #8

    By Donald Zuhn --

Reflecting upon the events of the past twelve months, Patent Docs presents its third annual list of top biotech/pharma stories.  For 2009, we identified ten top stories that we covered on Patent Docs last year.  Today, we count down stories #10, #9, and #8.  On Sunday, we will present stories #7, #6, and #5, and on Monday, we will count down the top four stories of 2009.  As with the 2008 list and 2007 list, links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with our rankings, please let us know.

#10 -- President Obama Ushers in Change

On January 20, 2009, Barack Hussein Obama was sworn in as the 44th President of the United States.  The election of President Obama came in at #8 on our list of top stories for 2008 ("#8 -- Impact of Presidential Election on U.S. Patent Practice"), and at the time, we speculated that the direction the new Administration would take with the USPTO would likely be a top story for 2009.  President Obama's greatest impact on U.S. patent practice came via his nominations for Secretary of Commerce (Washington Governor Gary Locke) and Undersecretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (IBM Vice President and Assistant General Counsel of Intellectual Property Law David Kappos). The new Administration also took an active role in both the patent reform and follow-on biologics debates.

One day after being sworn in, President Obama acted swiftly to stall implementation of any rulemaking by the outgoing Bush Administration, and in March, asked the Director of the Office of Management and Budget (OMB) to produce a set of recommendations for a new Executive Order on Federal regulatory review.  President Obama also satisfied one of his campaign pledges in March when he reversed limits imposed by the Bush Administration on embryonic stem cell research.  As the economy rebounds from the Great Recession, the President's impact on U.S. patent practice could be even greater in 2010.

For information regarding this and other related topics, please see:

• "NIH Releases New Stem Cell Rules," July 7, 2009
• "Gary Locke Confirmed as New Secretary of Commerce," March 26, 2009
• "President Obama Reaffirms Faith in Science," March 11, 2009
• "President Obama to Lift Stem Cell Limits on Monday," March 8, 2009
• "White House Seeks Comments on Rulemaking and Rule Enforcement Policy," March 5, 2009
• "Center for American Progress Report a Mixed Bag of Recommendations to Obama Administration," February 11, 2009
• "BIO CEO Outlines Challenges for Obama Administration," January 22, 2009
• "Obama Acts to Limit New Federal Rules," January 21, 2009

#9 -- After Much Debate, Patent Reform Takes Backseat to Economic Crisis

The current patent reform debate has been ongoing since 2005, and but for the worst economic crisis since the Great Depression, Congress may well have passed patent reform legislation during 2009.  As late as November, patent reform's biggest proponent, Senate Judiciary Chairman Patrick Leahy (D-VT), wrote that patent reform's "time is now."  In October, the Republican General Counsel of the Senate Judiciary Committee, Joseph Matal, told attendees at the BIO IP Counsels Committee Conference that there was a 70-80% chance the Senate would pass a bill in 2009.

Congress got off to a quick start on patent reform in 2009, with both the Senate and House introducing bills on March 3rd.  Shortly thereafter, the Senate Judiciary Committee heard testimony regarding its efforts to reform U.S. patent law from Steven Appleton, Chairman and CEO of Micron Technology, Inc.; Philip Johnson, Chief Intellectual Property Counsel for Johnson & Johnson; David Kappos, Vice President and Assistant General Counsel of Intellectual Property Law and Strategy for International Business Machines Corp.; Taraneh Maghamé, Vice President of Tessera, Inc.; Herbert Wamsley, Executive Director for the Intellectual Property Owners Association; and Mark Lemley, the William H. Neukom Professor of Law at Stanford Law School.

In April, the Senate patent reform bill (S. 515) was voted out of the Judiciary Committee after Senators Leahy, Arlen Specter (R-PA), and Dianne Feinstein (D-CA) were able to reach an agreement on a damages provision that would provide for a gatekeeper approach, in which a court would determine the Georgia-Pacific factors to be considered by the jury in determining damages.  Later that month, the House held its own hearing on patent reform, receiving testimony from David Simon, Chief Patent Counsel for Intel, Inc.; Philip Johnson, Chief Intellectual Property Counsel for Johnson & Johnson; John Thomas, Professor at Georgetown University Law School; Jack Lasersohn, Partner with the Vertical Group; Dean Kamen, DEKA Research and Development Inc.; Mark Chandler, Senior Vice President for Cisco; and Bernard Cassidy, Senior Vice President and General Counsel for Tessera Inc.  Last year, patent reform came in at #3 on our top stories list ("#3 -- Patent Reform Stalls in the Senate"), and this year, we could have simply reused the heading from 2008.  However, in the Senate's defense, there should be little dispute that other more pressing matters required the body's focus in 2009.

For information regarding this and other related topics, please see:

• "Patent Reform Efforts Opposed by Small Business Group," December 16, 2009
• "Senator Leahy: 'Time Is Now' for Patent Reform," December 2, 2009
• "Patent 'Reform' May Happen This Year, After All," October 27, 2009
• "Commerce Department Brass Weighs in on Patent Reform," October 14, 2009
• "Obama Administration Weighs in Supporting Patent 'Reform,'" October 6, 2009
• "Tech Companies Send Letter on Patent Reform to Secretary Locke," September 17, 2009
• "A Response to Mr. Brill, and a Modest Proposal Regarding Inequitable Conduct," June 3, 2009
• "Former House Economist Sets Sights on Inequitable Conduct 'Reform,'" June 2, 2009
• "Docs at BIO: Patent Reform Super Session," May 26, 2009
• "More on House Patent Reform Hearing," May 12, 2009
• "BIO IP Policy Briefing," May 11, 2009
• "House Judiciary Committee Holds Hearing on Patent Reform," April 30, 2009
• "House Judiciary Committee (Finally) Releases Witness List for Patent Reform Hearing," April 29, 2009
• "CHI CEO on Patent Reform and Follow-on Biologics Legislation," April 28, 2009
• "Dickinson and Figg on Patent Reform," April 16, 2009
• "Not Everyone Thinks 'Patent Reform' is a Great Idea," April 7, 2009
• "Senate 'Patent Reform' Bill (S. 515) Voted out of Judiciary Committee," April 2, 2009
• "Some (But Not All) Amendments Introduced in 'Patent Reform' Bill," April 1, 2009
• "'Progress' on Senate 'Patent Reform' Bill," March 31, 2009
• "Senate Judiciary Committee Discusses S. 515 at Executive Business Meeting; Adopts "Technical" Amendment GRA09350," March 26, 2009
• "IPO Board Opposes USTPO Fee Increases and Willful Infringement Provision of Reform Bill," March 26, 2009
• "ABA IP Section Seeks Inequitable Conduct Reform," March 23, 2009
• "Senator Kyl Introduces Alternative to Leahy Patent Reform Bill," March 19, 2009
• "MAPP Economist Advises Congress on Damages Provision," March 17, 2009
• "Senate Judiciary Committee Places Patent Reform Bill on Agenda," March 15, 2009
• "More Response to New Patent Reform Legislation," March 12, 2009
• "Senate Judiciary Committee Holds Hearing on Patent Reform," March 10, 2009
• "Senator Specter Seeks Resolution of Issues before Vote on Patent Reform Bill," March 5, 2009
• "Senate Judiciary Committee Releases Witness List for Patent Reform Hearing," March 4, 2009
• "Senate and House Introduce New Patent Reform Legislation," March 3, 2009
• "BIO Meets the Press," February 26, 2009
• "Patent Reform Bill to Be Introduced on Monday . . . Maybe," February 25, 2009
• "Manufacturing Alliance Sends Letter on Patent Reform to President Obama," February 10, 2009
• "Science Progress Tackles Patent Reform," January 21, 2009
• "Heritage Foundation Offers Patent Reform Proposals to the New President," January 20, 2009
• "Manufacturing Alliance on Patent Policy: Apportionment of Damages Provision Will Have Adverse Effects," January 15, 2009
• "BIO Gives President-elect Obama Its Ideas on Patent Reform," January 6, 2009

#8 -- Federal Circuit Decides In re Kubin

The Federal Circuit began the year by hearing oral argument in In re Kubin, and less than three months later issued its decision.  In summarizing the CAFC's decision, Patent Docs author Kevin Noonan wrote that:

[T]he Federal Circuit not only affirmed the finding by the Board of Patent Appeals and Interferences that Kubin's invention was obvious, but in the process decided that the Supreme Court had overturned the Federal Circuit's In re Deuel decision.  This outcome is sufficiently disappointing in itself; the reasoning is all the more so.

One interesting aspect of the Kubin oral argument involved an exchange between Judge Rader and USPTO Associate Solicitor Janet Gongola regarding the Office's motivation for revising Example 11 of the new Written Description Training Materials (which were issued in March 2008).  Judge Rader essentially accused the USPTO of revising Example 11 so that it would no longer be detrimental to the Office's position in Kubin.

For information regarding this and other related topics, please see:

• "Is Everything Obvious?" April 26, 2009
• "The Non-obviousness of DNA," April 13, 2009
• "In re Kubin (Fed. Cir. 2009)," April 5, 2009
• "In re Kubin: The Obviousness of DNA," January 14, 2009
• "Kubin Panel Questions Motivation behind Reversal in New Written Description Training Materials," January 8, 2009
• "In re Kubin to Be Argued before the Federal Circuit on Thursday," January 7, 2009

KSR: Additional Guidance Forthcoming from the USPTO

    By Christopher P. Singer --

As widely publicized, U.S. Patent and Trademark Office Director David Kappos launched a blog earlier this month that is intended to engage the public and provide updates regarding USPTO news (see "Director Kappos Joins Blogger Ranks").  In an article posted on November 24, 2009, Director Kappos announced that the public has been requesting additional guidance concerning the determination of non-obviousness in light of the Supreme Court's decision in KSR International Co. v. Teleflex Inc.  While the Office did publish examination guidelines (72 Fed. Reg. 57526) that are currently used by the examining corps to determine non-obviousness of a claim, Director Kappos noted that the public has expressed concern regarding the manner in which the Office is applying KSR in practice.  The public has been heard.

Noting that a number of court decisions regarding obviousness have been rendered in the two years since the KSR decision, Mr. Kappos stated that:  "[o]ffice personnel are presently reviewing court decisions with an eye toward identifying factual scenarios to illustrate the developing law of obviousness."  A good amount of effort will evidently be directed to cases that have analyzed the "obvious-to-try" rationale, implying that this basis has been particularly troublesome for applicants.

The Director also noted that applicants and practitioners need to be keenly aware of how KSR has changed the law of obviousness, stating that:

[I]t may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution.  By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.

Understandably, Mr. Kappos did not specify a particular timeline for the completion of the review and publication of further guidelines.  Nevertheless, he did state his commitment to providing ongoing education for examiners and managers in an effort to ensure that KSR is clearly and properly applied, and his intention to keep an open dialog with applicants and practitioners regarding the "contours and boundaries" of KSR.

Ortho-McNeil Pharmaceutical, Inc. v. Teva Pharmaceuticals Industries, Ltd. (Fed. Cir. 2009)

    By Donald Zuhn --

The Federal Circuit today vacated-in-part and affirmed-in-part an order by the District Court for the District of New Jersey granting summary judgment of invalidity of U.S. Reissued Patent No. 39,221 based on anticipation and obviousness.

Plaintiff-Appellant Ortho-McNeil Pharmaceutical, Inc. owns the '221 patent, which relates to a tramadol and acetaminophen composition for use in prescription pain relief.  Ortho first claimed this composition in U.S. Patent No. 5,336,691, and after receiving FDA approval, began marketing a tramadol/acetaminophen tablet under the brand name Ultracet®.

Seeking approval to market a generic version of Ortho's tramadol/acetaminophen tablet, a number of generic companies filed Abbreviated New Drug Applications (ANDAs) with the FDA.  In response to these ANDA filings, Ortho filed multiple lawsuits for infringement of the '691 patent.  The generic companies argued that the '691 patent was invalid for anticipation and obviousness in view of U.S. Patent No. 3,652,589, which relates to tramadol, and which discloses a tramadol, p-acetamino-phenol, pentobarbital sodium, and ethoxy benzamide composition.  During the course of this litigation, Ortho learned that p-acetamino-phenol was an archaic name for acetaminophen.  Because the '589 patent discloses a 1:10 ratio of tramadol to p-acetamino-phenol (i.e., acetaminophen) in its four-compound composition, and this ratio falls within the scope of several claims in the '691 patent, Ortho sought to reissue the '691 patent.

During reissue proceedings, Ortho redrafted all but one of the asserted claims of the '691 patent to narrow them, and amended the lone remaining claim to independent form.  The redrafted claims and amended claim (claim 6 of the '221 patent) were allowed to reissue.  Following reissue, Ortho amended its complaints against the generic companies to assert the reissue claims.  Ortho's cases against Defendants-Appellees Teva Pharmaceuticals Industries, Ltd., Teva Pharmaceuticals USA, Inc., Watson Laboratories, Inc. ("Teva"), and Caraco Pharmaceutical Laboratories, Ltd. ("Caraco") were then consolidated.

Teva and Caraco filed summary judgment motions of invalidity, asserting that the '221 patent was anticipated and rendered obvious by the '589 patent and a series of German publications that were cited during the reissue proceedings (and which disclose a method of managing cancer pain by customizing a co-administration of pain relievers and dosing regimens for particular patients).  Ortho disputed Teva's and Caraco's interpretations of the references and submitted expert testimony explaining why the references did not anticipate or render obvious the asserted claims.  The District Court, however, granted summary judgment invalidating claim 6 as anticipated and obvious over the prior art, and invalidating the other asserted claims as obvious over the prior art.

In vacating the District Court's summary judgment invalidating the asserted claims other than claim 6, the Federal Circuit determined that these claims recite a pharmaceutical composition of tramadol and acetaminophen in a ratio of about 1:5 to about 1:19, and that "[a] single tablet containing only tramadol and acetaminophen in a fixed dose ratio within the claimed range is not disclosed in the cited prior art."  The majority also determined that the '589 patent discloses a four-compound composition and "does not suggest that the pentobarbital sodium and ethoxy benzamide are merely optional for the combination to work as desired."  The Court also took note of Ortho's expert testimony that "one of ordinary skill in the art would not find it obvious to try to remove two of the four active ingredients disclosed in [the four-compound composition of the '589 patent] to arrive at the claimed composition."  As for the series of German references, the majority noted that Ortho's expert explained that these references "actually teach away from the claimed composition because they emphasize the importance of flexibility in choosing combinations and doses of medications based on individual needs," and also disparage the claimed fixed-dosage combination tablet.  The majority concluded that Ortho's reading of the prior art, and expert testimony regarding the understanding of one skilled in the art, raised material questions of fact as to whether a skilled artisan would have found the claimed tramadol/acetaminophen composition obvious, and therefore vacated the District Court's grant of summary judgment as to the asserted claims other than claim 6.

Claim 6 of the '221 patent recites a pharmaceutical composition comprising a tramadol material and acetaminophen, wherein the ratio of the tramadol material to acetaminophen is a weight ratio of about 1:5.  With respect to this claim, the Federal Circuit first determined that while the '589 patent discloses a composition comprising tramadol and acetaminophen, the parties were at odds as to whether the '589 patent discloses the recited weight ratio.  Stating that "[t]he district court improperly resolved disputed questions of fact" in agreeing with Teva's and Caraco's interpretation of the '589 patent, the majority vacated the District Court's summary judgment that claim 6 is invalid for anticipation.

The majority, however, affirmed as to the District Court's summary judgment that claim 6 is invalid as obvious.  The Federal Circuit stated that the ratio of tramadol and acetaminophen disclosed for the four-compound composition of the '589 patent (i.e., 1:10) is so close to the Court's prior construction of "about 1:5" (see Patent Docs report on the prior appeal) that the '589 patent "creates a prima facie case of obviousness with regard to claim 6."  The majority concluded that Ortho failed to rebut the prima facie case by "show[ing] that the prior art teaches away from the claimed range, or the claimed range produces new and unexpected results over the prior art range."

Judge Mayer, in his dissent, begins by declaring that:

The claimed invention does nothing more than combine two well-known pain relievers -- acetaminophen and tramadol -- in a single tablet.  Since the prior art clearly and unequivocally taught that these two analgesics could be combined for effective pain relief, the claimed invention is the epitome of obviousness.

With respect to the disclosure of a four-compound composition in the '589 patent, Judge Mayer states that:

The only alleged difference between the tablet disclosed in the asserted claims of the RE221 patent and the tablet disclosed in [the '589 patent] is that the latter also contains two additional ingredients, pentobarbital sodium and ethoxy benzamide.  Given that ethoxy benzamide was a known carcinogen and pentobarbital sodium was known to have antagonistic interactions with analgesics, it would have been obvious to remove these two drugs from [the '589 patent's] formulation.

Observing that "[n]owhere does [the '589 patent] state that pentobarbital sodium and ethoxy benzamide are required components in a tramadol/acetaminophen tablet," Judge Mayer concludes that the removal of these two compounds would have been "a predictable and simple variation" on the formulation disclosed in the '589 patent.  Moreover, in Judge Mayer's view, when the German publications (which disclose combining tramadol with acetominophen to provide pain relief) are read in the light of the '589 patent (which discloses a fixed-dose tablet), "they clearly suggest combining tramadol and acetaminophen in a single fixed-dose tablet."  Thus, in Judge Mayer's eyes "there is nothing even arguably new about what Ortho claims to have invented."

Ortho-McNeil Pharmaceutical, Inc. v. Teva Pharmaceuticals Industries, Ltd. (Fed. Cir. 2009)
Nonprecedential disposition
Panel: Circuit Judges Mayer, Prost, and Moore
Opinion by Circuit Judge Prost; dissenting opinion by Circuit Judge Mayer