Eli Lilly & Co. v. Zenith Goldline Pharm., Inc. (Fed. Cir. 2006)

    By Kevin Noonan --

With the Supreme Court's decision in KSR Int'l Co. v. Teleflex Inc. on the horizon, the Federal Circuit continues to tiptoe around the standards for obviousness.  The most recent example can be found in it opinion affirming a decision of no invalidity in Eli Lilly & Co. v. Zenith Goldline Pharmaceuticals, Inc.

The case involved an ANDA filing by Zenith (now IVAX Pharmaceuticals, Inc.), Teva Pharmaceuticals, and Dr. Reddy's Laboratories for a generic version of Lilly's Zyprexa® antischizophrenia drug.  Having stipulated to infringement by filing the ANDA, the issues before the trial court were invalidity for anticipation or obviousness, and inequitable conduct.  The trial court found in Lilly's favor on both validity and no inequitable conduct (in an opinion whose 221 page length was noted by the Federal Circuit), and the Federal Circuit affirmed.

The interesting aspect of this case was the way the Federal Circuit set forth its de novo review of the district court's application of the legal standard for obviousness.  The Court was careful to first explicate the Supreme Court's rubrics from Graham v. John Deere (being careful to cite its compliance with this standard in Panduit Corp. v. Dennison Mfg.):

The factual underpinnings are: (1) the scope and content of the prior art, (2) the differences between the prior art and the claimed invention at the time of invention, (3) the level of ordinary skill in the art, and (4) the objective indicia of nonobviousness.  See Graham v. John Deere Co., 383 U.S. 1, 17 (1966); Panduit Corp. v. Dennison Mfg., 810 F.2d 1561, 1566-67 (Fed. Cir. 1987).

The Court next cited In re Dillon for the applying this standard to a chemical compound:

For a chemical compound, a prima facie case of obviousness requires "structural similarity between claimed and prior art subject matter . . . where the prior art gives reason or motivation to make the claimed compositions.  In re Dillon, 919 F.2d 688, 692 (Fed. Cir. 1990) (en banc).

Finally, the Court made mention of the (putatively) non-controversial potion of its TSM jurisprudence:  "'[A] reasonable expectation of success, not absolute predictability' supports a conclusion of obviousness. In re Longi, 759 F.2d 887, 896 (Fed. Cir. 1985)."

The Federal Circuit's TSM test did make a cameo appearance, where the Court cited In re Rouffet, 149 F.3d 1350, 1355 (Fed. Cir. 1998), for the proposition that "to establish a prima facie case of obviousness based on a combination of elements in the prior art, the law requires a motivation to select the references and to combine them in the particular claimed manner to reach the claimed invention."

However, the Court did not rely on this analysis for affirming the district court's judgment of non-obviousness.  Rather, the Court turned to the "objective indicia" (otherwise known as the "secondary considerations") of long-felt need, industry acceptance, failure of others and unexpected results, by which it said Lilly had rebutted "any prima facie case" of obviousness based on the cited art.

The Federal Circuit nicely sidestepped the critical issue of KSR, namely how to apply the Supreme Court's generic rubrics on obviousness to individual cases while at the same time avoiding contaminating the analysis with hindsight.  The Court's TSM test has been a reliable (if inexact) standard for fulfilling the Court's Congressional mandate of bringing uniformity to U.S. patent law regarding the obviousness question.  No matter how the Supreme Court rules in the coming months, it will be the Federal Circuit's responsibility to craft from that decision workable rules for making an obviousness determination, whether in litigation or before the Patent Office.  This case provides a potentially fruitful route around the doctrinal issues surrounding obviousness, so long as the facts in a particular case fit within one of the objective indicia.

Eli Lilly & Co. v. Zenith Goldline Pharm., Inc. (Fed. Cir. 2006)
Panel: Circuit Judges Rader, Schall, and Gajarsa
Opinion by Circuit Judge Rader

For a discussion of the Federal Circuit's decision on the issue of anticipation, readers are encouraged to turn to Donald Zuhn's article on the Lilly case.

Comments

[Daniel Haszard]

Eli Lilly makes billions on diabetes treatment and also gets $4.2 billion a year in sales of their biggest cash cow Zyprexa which has been scandalized as *causing* diabetes as a major side effect.
Not fair~Daniel Haszard