Bayer Schering Pharma AG v. Barr Laboratories, Inc. (D. N.J. 2008)

    By Kevin E. Noonan --

On Monday, the U.S. District Court for the District of New Jersey (Judge Peter G. Sheridan, presiding) found after a bench trial on all issues that Bayer's U.S. Patent 6,787,531 was invalid for obviousness.  In doing so, the Court's decision illustrated anew the uncertainties that the U.S. Supreme Court's KSR Int'l Co. v. Teleflex, Inc. decision has (re)introduced into patent law, and the folly of the Supreme Court's simple-minded "common sense" approach to the issue.

Bayer's patent claims a pharmaceutical composition of an oral contraceptive marketed as Yasmin® in the U.S., comprising a combination of drospirenone and ethinylestradiol.  Claim 1 of the '531 patent is representative of the claimed formulation:

1.  A pharmaceutical composition comprising from about 2 mg to about 4 mg of micronized drospirenone particles, about 0.01 mg to about 0.05 mg of 17-alpha-ethinylestradiol, and one or more pharmaceutically acceptable carriers, the composition being in an oral dose form exposed to the gastric environment upon dissolution, and the composition being effective for oral contraception in a human female.

This combination as an oral contraceptive was not new; the formulation was.  Bayer found that, despite the fact that drospirenone was known to be acid labile and to isomerize into an inactive form, the combination could be advantageously formulated using micronized drospirenone (which increased absorbsion of the drug but was expected to also increase the rate of isomerization) and by not coating the drospirenone with an enteric coating.  Since this was an oral formulation, an enteric coating would be expected in the art to protect the drug from isomerization in the acidic environment of the stomach.

The action was initiated pursuant to the provisions of the Hatch-Waxman Act in response to Barr having filed an Abbreviated New Drug Application (ANDA) with the Food and Drug Administration.  Barr's position was that the use of micronization to improve drug absorbsion and enteric coatings to protect acid-labile drugs was "routinely considered" by drug formulators in making drugs for oral administration, and that Bayer's claims were thus obvious.

The prior art considered by the Court included a common formulation text not particularly directed to oral contraceptives (Aulton, 1988, Pharmaceutics: The Science of Dosage Form Design) and a number of scientific journal articles relating to acid-lability of not drospirenone but a related compound, spirenone, both in vitro and in vivo.  Also considered were prior art patents for various combinations of oral contraceptives formulated for different administration schedules.

Bayer also introduced testimony relating to how the invention was made, specifically relating to the surprising findings that formulating the drug in ways that should have increased isomerization (micronizing the acid-labile drospirenone and dispensing with the enteric coating) in fact had the opposite effect.  According to this testimony, the reason for this paradoxical result is that the micronized drug was absorbed more rapidly than it isomerized in vivo, and enteric coatings made the effectiveness of the drug more variable; it was uncontested that the drug had to be 99% effective to be useful as a contraceptive.  This testimony and other evidence established that Bayer scientists had originally prepared formulations that were unmicronized and enterically-coated, and that they were successful only when they changed direction and prepared the formulation that was the subject of the '531 patent.

Judge Sheridan disregarded this evidence, on the grounds that it was not reasonable to him that Bayer's scientists would have changed direction as abruptly as they purportedly did in their formulation work.  Moreover, the Court believed that the Aulton treatise and other scientific journal references, as well as Barr's expert, taught that acid lability studies in vitro would never be sufficient to establish whether a drug was truly acid labile without complementary in vivo studies, and that had Bayer performed the in vivo studies they would have known that the absorbsion rate was sufficiently fast that enteric coatings were unnecessary and micronization was desirable.  In addition, the Court cited three studies (including both in vitro and in vivo arms) with the related drug spirenone that purported to show the absence of spirenone isomers in blood samples from experimental animals or human volunteers administered tableted spirenone.  In vitro studies on drospirenone, on the other hand, showed that 80% of the drug had isomerized in a 0.1N HCl solution at room temperature.  The Court found that spirenone and drospirenone were related "as close[ly] as fraternal twins" and thus imputed the behavior of spirenone to drospirenone.

The Court conducted its obviousness analysis based on these facts expressly using the rubrics of Graham v. John Deere, citing KSR as the impetus for this analysis.  In comparing the differences between the prior art and Bayer's claimed invention, the Court found this critical factor that informed its analysis:

There is one other principle that is clearly established in the prior art which defeats both claims.  The prior art states the in vitro studies are unreliable unless they are correlated to in vivo testing (Aulton, McGilveray).  Unlike Nickisch, a person of ordinary skill in the art would conduct such testing.  Decisions about drug dose form are then made based upon the in vitro/in vivo testing.  That is, the decision whether to micronize and/or enteric coat comes second.  In this case, Bayer argues that the person of ordinary skill in the art would reverse this process ("put the cart before the horse").  This does not make sense.  Justice Kennedy in KSR observed that in analyzing an obviousness defense, the court must use its common sense.  KSR, 127 S. Ct. at 1732.  In this instance, Bayer's alleged exception to the in vitro/in vivo correlation rule (that it does not apply to acid sensitive drugs) does not ring true.  A person of ordinary skill in the art must precisely know and verify the characteristics and chemical reactions of a drug in order to evaluate its therapeutic value in humans.  To follow McGinity's alleged exception for acid-sensitive drugs can only lead to sketchy, imprecise formulation results and an increased risk of injury to users.

Judge Sheridan's Opinion (emphasis added).  Using "its common sense," the Court found Bayer's formulation claims obvious.

It is an everyday occurrence to note that "common sense" is anything but common, even among the most mundane of human activities.  Most would agree that pharmaceutical formulation is hardly a mundane activity, and is fraught with uncertainties exacerbated by the unpredictability of patient response to a particular formulation; indeed, a great deal of the regulatory apparatus for approving new drugs is based on establishing that the vast majority of patients will be helped and, more importantly, not be harmed by a formulation.  The evidence presented to Judge Sheridan established just this sort of unpredictable result, where an acid-labile drug is provided in a better formulation when it is treated in ways expected to increase isomerization and drug inactivation in the acidic environment of the stomach.

And yet Judge Sheridan, harkening to the admonitions of the Supreme Court that he should employ "common sense," disregards the extensive evidence of these uncertainties and decides that, to him, Bayer's activities "put the cart before the horse."  Never mind the Supreme Court's equal admonitions against the insidious effects of hindsight, or how "obvious" the result may be once it is found that the drug, surprisingly, is absorbed faster than it can isomerize.  No, Judge Sheridan is comfortable substituting his "common sense" interpretation of what is the cart and what is the horse, and the order they should go in, to decide that Bayer's formulation would be obvious.

This is madness.  It cannot be the Supreme Court's intention to unleash the generally uninformed "common sense" of the generalist judiciary to trump testimony by the individuals -- the inventors -- who actually perform the experiments and produce the inventions whose disclosure fulfills the Constitutional mandate to "promote the progress of the useful arts."  But that is precisely the effect that the KSR decision, and most of the rest of the Supreme Court's obviousness jurisprudence will have (and is having) on U.S. patent law.  It is not enough that the Court mistakes the proper emphasis of the correct Constitutional analysis by putting the cart of restricting monopolies before the horse of promoting disclosure of new inventions.  In KSR and the rest of the Supreme Court's "totality of the circumstances," "we know an obvious invention when we see one" jurisprudence, it substitutes judicial common sense for scientific common sense.  Folly, pure and simple.

Barr made two other allegations against the claims of the '531 patent.  First, that the clinical trials performed in the U.S. were a public use, because earlier clinical trials in Europe had established that the formulation was safe and effective and because the study participants were not bound by confidentiality to withhold from their personal physicians the identity of the drugs they were administered.  The Court found that Bayer's proffered reason for performing clinical testing in the U.S. -- the greater ethnic diversity of the U.S. versus the European population -- constituted experimental use, not public use, and that Bayer had established the appropriate confidentiality conditions for the physicians and other healthcare and scientific workers involved with the clinical trials.  (It was also persuasive that there were ethical prohibitions against keeping the identity of the administered drugs from trial participants' physicians.)  Second, the Court found that while the evidence of the European clinical trials was material to patentability on the public use question, Bayer declarants showed no intent to deceive the U.S. Patent and Trademark Office by only partially and obliquely referring to these trials (and the data obtained from them) during prosecution of the '531 patent.

Additional information regarding this case can be found at the Orange Book Blog.

Comments

[Sean]

Perhaps Judge Sheridan is taking a side-wise swipe at the absurdity of it all. Maybe he wrote this opinion in the hopes that the CAFC would reverse him. Who knows....

In reality, it's not so much the KSR decision that was wrong (because it didn't really change the law, by itself) but rather the Pfizer v. Apotex decision that shows judges how to brush off secondary considerations in order to find obviousness.

Also, we must accept that the last sentence of Sec. 103(a) has been judicially re-written. It now effectively reads "Obviousness shall not be negatived by the manner in which the PHOSITA perceives the invention."

[Fowler]

I agree with Judge Sheridan. The ultimate question was whether the intuitive trial and error performed by Bayer amounted to an "invention" that deserved separate patent protection--which clearly it did not. Spirenone and drospirenone are close enough to warrant that call.

[Kevin E. Noonan]

Dear Fowler:

The point isn't whether you (or I) agree with Judge Sheridan in this case - it's having a lay judge using her "common sense" to make the decision.

Thanks for the comment

[Dan Feigelson]

Kevin, I've felt for a few years now that many of the judges on the CAFC are on the march against second-generation pharma patents, though heaven forfend that they would admit it. KSR, which I view as a response to business method and software patents in the wake of State Street, simply gave them additional weapons to attack second-generation pharma patents. The Norvasc decision last year was merely the most egregious example where the court invalidated a patent that objectively met the Graham tests of non-obviousness. Judge Sheridan, it seems, took his cue from the CAFC and some of the English-major imprecise prose in KSR.

While I have my doubts about the non-obviousness of many formulation patents I've encountered, this case seems like one where objectively the invention wasn't obvious. I hope this decision is overturned on appeal, but I'm also realistic: it will be entirely panel dependent, and looking at the trend, I think down the road we're going to see more, not fewer, decisions like Judge Sheridan's, and more such decisions being upheld rather than overturned.

[Jud]

Did any of you note the cite that the court used to support "its" common sense reading? Here it is: 127 S.Ct. 1732.

And here's the relevant preamble to that cite:
"The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader." See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.

[Kevin E. Noonan]

Dear Jud:

You may be correct, but it's likely to be the result of a less-than-diligent clerk citing a mis-citation in another case (some of the Docs have suggested PharmaStem may be the culprit).

But the issue is the Supreme Court's admonition regarding "common sense" - if that common sense is not grounded in the person of skill in the art, you get cases like this one.

The problem with having judges make this determination is that they are likely to misunderstand the way science and technology advances - not necessarily in a logical fashion, but in fits and starts. The skilled worker would be more capable of understanding (and giving credence to) the patentee's explanation of how the invention was actually achieved - the long section of the opinion on the developmental background. Judge Sheridan expressly refused to give anything more than "little weight" to this evidence, and thus was comfortable applying his version of "common sense" to something he had no basis for having any "common sense" about.

Which doesn't mean it will be overturned on appeal. It is possible that the CAFC will decide that Judge Sheridan was equally less-than-diligent about expressly stating that his decision was grounded in the testimony of Barr's experts but that he was entitled under KSR to make these factual determinations.

The other issue is whether the Judge's application of "common sense" runs afoul of the statutory proscription that "[p]atentability shall not be negatived by how an invention is made."

Thanks for the comment.

[Kevin E. Noonan]

Dear Dan:

I think that what's happening is another paradigm shift (here, with regard to how 103 is applied to pharma patents). And, as with other such changes (how the written description requirement of 112 has changed over time), patentees suffer the consequences.

In the Norvasc case, I think the problem was how the invention was claimed. If it had been claimed as a method for producing Norvasc, it might have fared better, since the "advantage" of using the besylate was in manufacuring the product. Viewed from this angle, it is a patentable invention.

Viewed from the "just another pharmacetically-acceptable salt" perspective, however, the Court found it easier to ignore the manufacturing advantages over the "obviousness" of the formulation per se. Ironically, the method claim might have been just as effective, even against foreign competition, since it is unlikely that the besylate could be "swapped out" after production.

Having said that, I agree that the Court's reasoning was outcome-driven at best, but I also agree that second-level patent protection for pharma will be a battleground for a while.

Thanks for the comment.

[Jud]

Kevin,
I agree that the citation was probably sloppy, but that's a symptom, not the problem. The reason I think the CAFC could (and should) reverse this is because the "common sense" to which the mis-citation refers (when it is referenced correctly) is that of one of skill in the art.

"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 and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under §103."

A correct citation would lead to use of the correct standard, and the mis-citation is thus easily challenged as:
a) a non-binding reading of the law (because it is a non-precedential citation), and
b) an incorrect reading of the law.

[Kevin E. Noonan]

Jud:

Agreed. Let's hope Bayer's lawyers read PatentDocs.

Thanks for rhe comment.