Patent Docs

Patenting Repurposed Drugs

By John E. Conour --

Even with billions of dollars of funding and the cumulative knowledge and experience of over a hundred years of experimental pharmacology, de novo discovery of effective and safe therapeutics remains a costly and risky endeavor.  The number of unsuccessful attempts to obtain Food and Drug Administration (FDA) approval of drugs for specific indications is far greater than the number of successes.  As a result, there is an extensive and ever growing list of "failed" drugs, most of which are ultimately abandoned by pharmaceutical companies.

More recently, failed drugs previously considered to be lost causes are being reconsidered as possible therapies for different indications than those for which they had originally been considered.  Such drug "repurposing" provides researchers and clinicians with a cost-effective way to identify potential new therapies without needing to start from scratch.  Many failed drugs have already established their relative safety in Phase I clinical trials, which can simplify and reduce the cost of obtaining FDA approval should a new indication be found.  Drug repurposing is not limited to failed drugs but is also being considered for currently marketed drugs as well as "off patent" generic compounds to expand and extend their usefulness.

But because drug repurposing primarily concerns previously-known drugs, obtaining patent protection can be challenging.  In some cases, a drug to be repurposed is still protected by a patent that can be acquired and/or in-licensed, but often the drug itself is not protected by patent.  Without patent protection, commercialization of a repurposed drug (i.e., maximizing the potential beneficial impact of the drug) is not realistic.  This article discusses certain issues to be considered when trying to obtain new patent protection for repurposed drugs.  It should be expected that each attempt to patent a repurposed drug will have its own factspecific challenges.  Accordingly, the concepts discussed here are generalized and nonexhaustive.

The foundational inquiry for determining whether a repurposed drug can be patented in the United States is to consider whether, under 35 U.S.C. § 101, the drug constitutes patentable subject matter.  Section 101, in relevant part, provides: "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor . . . ."[1]  Repurposed drugs are often non-nature-based compositions of matter (i.e., synthetic compounds that are not naturally occurring) that can be used in useful processes (e.g., methods of treating a disease by administering to a patient in need thereof a therapeutically effective dose of a drug).  Therefore, claims directed to repurposed drugs and methods of their use should not typically run afoul of § 101.  Even repurposed drugs that are nature-based compositions of matter may still be patentable, for example, if recited in a method of treatment claim.  Indeed, method of treatment claims reciting nature-based compositions of matter seem to be on more secure footing under § 101 in light of the recent decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals,[2] at least because the United States Patent and Trademark Office has issued a recent memorandum to the Patent Examining Corps advising that the Patent Office intends to follow the legal reasoning in this case.[3]  Nevertheless, care must be taken when drafting claims to avoid § 101 issues.

Another significant hurdle to overcome with respect to patenting repurposed drugs is 35 U.S.C. § 102.  Section 102, as applied to a repurposed drug, requires that it was not previously patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before a patent application is filed to cover the repurposed drug.  In other words, a claim to the repurposed drug itself must be novel, in that it must recite something not previously publicly known.  Practically speaking, most composition of matter claims reciting only the repurposed drug will be excluded from patentability under § 102, because (almost by definition for a "repurposed" drug) the drug was previously known and thus its earlier public disclosure would be prior art to any subsequent patent filing.  Accordingly, composition claims directed to the repurposed drug itself will likely be anticipated because they are not reciting anything new.  Yet there are ways to overcome § 102 to obtain composition claims on repurposed drugs.

One useful approach for overcoming a § 102 rejection is to incorporate the repurposed drug into a composition that includes one or more other compounds to form a novel combination not previously known.  Importantly, the claimed combination can be any practical combination that is novel for purposes of overcoming § 102.  However, as discussed below, claims to pharmaceutical compositions that recite combinations with more than one key constituent (e.g., a therapeutically effective amount of a repurposed drug and a therapeutically effective amount of a second drug) are more likely to be patentable.  Additional details regarding specific amounts of drugs included in combinations or ratios between the drugs in the combination can add further grounds for finding such claims patentable over what was previously known in the prior art.

A further approach to obtaining claims directed to previously known drugs that are patentable in a § 102 context is to draft claims to novel pharmaceutical dosage forms.  Pharmaceutical dosage forms can be, for example, solids, liquids, delayed or extended release forms, and/or for a specific type of administration (e.g., oral, parenteral, intramuscular, etc.).  Many types of variations are possible with pharmaceutical dosage forms, which lend themselves to drafting novel claims.  For example, desired release characteristics and/or routes of administration may differ for the new use of the repurposed drug compared to its previous use, which would provide the basis of a novel claim.

As a final and particularly important example, a method claim reciting a repurposed drug may more easily overcome § 102 rejections.  Repurposing a drug for a new indication is typically a novel use of the drug.  Therefore, a method-of-use claim that recites a repurposed drug for treating a subject with the new indication should also be novel.  Such method claims are particularly useful because they are difficult for competitors to design around, and they are also available in many foreign jurisdictions (though with potentially different formats).

What is often more challenging for patenting a repurposed drug is overcoming an obviousness rejection.  Obviousness (or lack of inventive step) falls under 35 U.S.C. § 103, which states, in relevant part, that:

A patent for a claimed invention may not be obtained . . . , if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.[4]

Here, the basic calculus is that if a skilled artisan (e.g., a clinician or researcher in the same field of practice or study as the person seeking to repurpose a drug and with the average skill level of such clinicians or researchers) who understands the prior art would have reasonably expected the drug to be useful for the new indication, then a claim to a repurposed drug for the new indication may be obvious.  Obviousness rejections of claims to repurposed drugs can be very complex and can be based on a combination of several prior art references, each teaching one or more aspects of the rejected claims.

Unfortunately, the relatively straightforward strategies for overcoming a § 102 rejection are mostly ineffective for overcoming obviousness rejections.  Simple chemical combinations of repurposed drugs with other drugs that may make a novel composition are arguably obvious if they are nothing more than a routine exercise for a skilled pharmacologist.  Fortunately, there are ways to overcome obviousness rejections, but they can require planning well before filing a patent application, and indeed, experiments to investigate the usefulness of a repurposed drug should be designed with obviousness rejections in mind.  This is because one of the most powerful arguments against an obviousness rejection of claims directed to a repurposed drug is a showing of unexpected results.[5]  In this context, a showing of unexpected results can be a presentation of scientific data (often in the patent application, but data can also be presented after filing) that, for example, show a surprising effect of a drug that would not have been expected based on what was known at the time.  Examples of unexpected results can include that a drug surprisingly works as intended for a new indication, or that a drug works at the dose used (e.g., a surprisingly low dose), or that a combination of drugs demonstrates synergy when used together (their combined effect being greater than each drug acting alone), among others.[6]  Another powerful example of unexpected results is the discovery that the drug acts via a different target or has a different mechanism of action for the new use than for its previous use.  Such examples of unexpected results can overcome obviousness rejections for claims directed to method of use, or pharmaceutical dosage forms, or pharmaceutical compositions comprising a combination of drugs, respectively.  Therefore, care should be given to experimental design and the types of data that are collected in support of such evidence of non-obviousness.

Finally, a patent for a repurposed drug must satisfy 35 U.S.C. § 112, which requires that a patent application include:

[A] written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.[7]

Section 112 also requires an application to have one or more claims "particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention."[8]  Basically, § 112 requires that, at the time of filing, the written description must enable a skilled artisan to replicate the invention (much like a scientific paper should enable a researcher to replicate the experiments and data presented in the paper) and that the claims must be fully supported by the written description.

Careful patent application planning and drafting can avoid or overcome § 112 rejections.  At a minimum, literal support for each claim should be provided, examples of various embodiments of the invention described (e.g., the repurposed drugs and indication, possible drug substitutions and/or derivatives, dosing amounts, dosage forms, excipients, dosing regimens, methods of treatment, etc.), and experimental data establishing drug effectiveness included.  The written description should also be drafted with sufficient detail and distinct variations of the invention to permit claim amendments that can dispose of a prior art rejection (under either § 102 or 103).  Indeed, all important details and variations of the invention envisioned must be included before filing because § 112 prohibits addition of "new matter" after filing.

In conclusion, patent protection is possible for previously known drugs being repurposed for new indications.  The best chances for patenting repurposed drugs occur when care is given to initial experimentation to establish the usefulness of the drugs and for identifying any unexpected properties of the drugs.  By combining robust invention disclosures with thoughtful and detailed application preparation, patent applications directed to repurposed drugs will be better prepared to successfully navigate the rigors of the Patent Office.

[1] 35 U.S.C. § 101.

[2] 887 F.3d 1117 (Fed. Cir. 2018).

[3] See Memorandum from Robert W. Bahr, Deputy Comm'r for Patent Examination Policy, to Patent Examining Corps (Jun. 7, 2018), available at https://www.uspto.gov/sites/default/files /documents/memo-vanda-20180607.PDF.

[4] 35 U.S.C. § 103.

[5] Other important objective evidence of non-obviousness, also known as "secondary considerations," includes evidence of commercial success, long-felt but unsolved needs, and failure of others.  See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17 (1966).

[6] See Manual of Patent Examining Procedure §§ 716.02, 2145.

[7] 35 U.S.C. § 112(a).

[8] Id. § 112(b).

GoPro, Inc. v. Contour IP Holding LLC (Fed. Cir. 2018)

Catalog Distributed at Conference (Not "Open to the Public") Is Publicly Accessible

By Joseph Herndon --

GoPro, Inc. appealed from final written decisions of the Patent Trial and Appeal Board in two inter partes review (IPR) proceedings.  In the proceedings, the Board found that the petitioner, GoPro, did not demonstrate that the challenged claims were unpatentable as obvious, and based this decision on its finding that a certain GoPro catalog was not a prior art printed publication.  The sole issue on appeal is whether the GoPro catalog is prior art.

Contour IP Holding LLC owns U.S. Patent Nos. 8,890,954 and 8,896,694.  The patents share a common specification that generally relates to and describes action sport video cameras or camcorders that are configured for remote image acquisition control and viewing.  According to the patents, the claimed device uses global positioning system (GPS) technology to track its location during recording and a wireless connection protocol, such as Bluetooth, to provide control signals or stream data to the wearable video camera and to access image content stored on or streaming from the wearable video camera.

The patents further describe that when recording video or taking photographs in a sports application, a digital video camera is often mounted in a location that does not permit the user to easily see the camera.  The digital camera includes wireless communication capability to allow another device, such as a smartphone or tablet, to control camera settings in real time, access video stored on the camera, and act as a "viewfinder" to preview what the camera sees.

Both the '954 and '694 patents claim priority to a provisional application filed on September 13, 2010.  Thus, the one-year critical date is September 13, 2009.

GoPro petitioned for inter partes review of the '954 and '694 patents and challenged the patentability of the claims on obviousness grounds, relying on a 2009 GoPro sales catalog as prior art in each petition.  The GoPro Catalog discloses a digital camera linked to a wireless viewfinder/controller that allows for a user to preview before recording.

The Board instituted both IPRs, and in its decisions to institute, the Board found that GoPro made a threshold showing that the GoPro Catalog is prior art.  After the hearing, however, the Board found that the GoPro Catalog did not qualify as a prior art printed publication under 35 U.S.C. § 102(b), and because all the instituted grounds were based on the GoPro Catalog, the Board found that GoPro had not demonstrated that the challenged claims of the '954 and '694 patents were unpatentable under 35 U.S.C. § 103.  GoPro appealed from these final written decisions to the Federal Circuit.

On appeal, neither the claim terms nor the claimed inventions are at issue in this appeal.  The only issue is whether the GoPro Catalog is prior art.  The '954 and '694 patents each have an effective filing date before the effective date of the Leahy-Smith America Invents Act ("AIA").  Thus, the pre-AIA version of 35 U.S.C. § 102 was applied.

Section 102(b) provides that a person shall be entitled to a patent unless the invention was described in a printed publication more than one year prior to the date of application for patent in the United States.  The printed publication rule is based on the principle that once an invention is in the public domain, it can no longer be patented by anyone.  Even relatively obscure documents qualify as prior art so long as the relevant public has a means of accessing them.

The most commonly referenced example is that even a single cataloged thesis in a university library was found to be sufficiently accessible to those interested in the art exercising reasonable diligence.  Accessibility goes to the issue of whether interested members of the relevant public could obtain the information if they wanted to and if accessibility is proved, there is no requirement to show that particular members of the public actually received the information.  Accordingly, a reference will be considered publicly accessible if it was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it.

Critical to its decision, the Board credited a declaration from GoPro employee, Damon Jones, relating to the distribution of the GoPro Catalog.  Mr. Jones worked at GoPro from 2008 to 2016 and participated in various trade organizations relevant to GoPro's business.  This included Tucker Rocky Distributing ("Tucker Rocky"), a trade organization focused on action sports.  In his declaration, Mr. Jones testified that Tucker Rocky holds an annual dealer trade show, which he attended in Fort Worth, Texas, from July 23 through July 27, 2009, on GoPro's behalf.  Mr. Jones also testified that at the 2009 show, there were approximately 150 vendors and more than 1,000 attendees, including actual and potential dealers, retailers, and customers of portable POV video cameras.  Mr. Jones stated that he manned the GoPro booth at the show, where the GoPro Catalog was displayed, and that he personally distributed the GoPro Catalog to attendees.  Attached to Mr. Jones's declaration, GoPro provided the catalog, a vendor list and map of the Tucker Rocky 2009 show, and email records supporting Mr. Jones's statements.  The declaration from Mr. Jones also included testimony that GoPro continued to make the GoPro Catalog available to GoPro's actual and potential customers, dealers, and retailers through its website, direct mail, and other means of distribution.

In its Patent Owner Responses, Contour argued that GoPro had not demonstrated that the GoPro Catalog was a prior art printed publication.  To support its argument, Contour submitted two pieces of evidence—a screenshot from Tucker Rocky's website from 2009 and a Facebook webpage for the 2013 Tucker Rocky Dealer Show.  The 2009 website screenshot explained that Tucker Rocky is a wholesale distributor that does not sell to the public.  The 2013 Facebook page stated that the 2013 Tucker Rocky Dealer Show was open to dealers but not the public.  In its final written decisions, the Board concluded that GoPro had not met its burden to show that the GoPro Catalog was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art and exercising reasonable diligence could have located it.

On Appeal, the parties did not dispute any of the facts or evidence presented by GoPro regarding the distribution of its catalog.  In addition, there is no dispute that the Tucker Rocky Dealer Show occurred before the critical date of the '954 and '694 patents.  The only issue on appeal is whether the GoPro Catalog was sufficiently accessible as contemplated under § 102(b).

The Federal Circuit reversed the Board's decision, and agreed with GoPro in that Mr. Jones's declarations and corroborating evidence were sufficient to meet its burden of establishing that the GoPro Catalog was publicly accessible.  The Federal Circuit noted that the case law regarding accessibility is not as narrow as the Board interpreted it.  The Board focused on only one of several factors that are relevant to determining public accessibility in the context of materials distributed at conferences or meetings—i.e., that the conference was open to the public.

However, the nature of the conference or meeting must be considered.  The Federal Circuit found that if one desires to examine certain new products on the market, attending a trade show involving identical or similar products is a good option.  Mr. Jones testified that Tucker Rocky holds an annual trade show that draws thousands of attendees.  In 2009, GoPro participated in the Tucker Rocky Dealer Show as a vendor and had a demonstration booth at the show.  Mr. Jones testified that there were over 150 vendors, 1,000 attendees, and that GoPro displayed and distributed hundreds of copies of the GoPro Catalog to attendees at the show without restriction.

The Patent Owner did not cross-examine Mr. Jones, and does not point to any reason to doubt the veracity of his testimony.

Although the trade show was only open to dealers, there is no evidence or indication that any of the material disseminated or the products at the show excluded POV action cameras, or information related to such cameras.  Contrary to the Board's conclusion, the attendees attracted to the show were likely more sophisticated and involved in the extreme action vehicle space than an average consumer.  Thus, it is more likely than not that persons ordinarily skilled and interested in POV action cameras were in attendance or at least knew about the trade show and expected to find action sports cameras at the show.

The Board concluded that the GoPro Catalog was not a printed publication because the Tucker Rocky Dealer Show was not open to the general public and GoPro failed to provide evidence that someone ordinarily skilled in the art actually attended the dealer show.  But the Federal Circuit found that the standard for public accessibility is one of reasonable diligence to locate the information by interested members of the relevant public.  A dealer show focused on extreme sports vehicles is an obvious forum for POV action sports cameras.  And although the general public at large may not have been aware of the trade show, dealers of POV cameras would encompass the relevant audience such that a person ordinarily skilled and interested in POV action cameras, exercising reasonable diligence, should have been aware of the show.

Additionally, the GoPro Catalog was disseminated with no restrictions and was intended to reach the general public.  Because the Board refused to accept the GoPro Catalog as a printed publication, it did not consider the merits of GoPro's obviousness claims.  The Federal Circuit thus remanded the case for consideration of the catalog as prior art.

GoPro, Inc. v. Contour IP Holding LLC (Fed. Cir. 2018)
Panel:  Circuit Judges Reyna, Wallach, and Hughes
Opinion by Circuit Judge Reyna

Supreme Court Grants Certiorari in Helsinn Healthcare v. Teva Pharmaceuticals

By Kevin E. Noonan --

Yesterday, the Supreme Court granted certiorari on Helsinn Healthcare's petition to overturn the Federal Circuit's decision in Helsinn Healthcare v. Teva Pharmaceuticals that its patents were invalid by application of the on-sale bar under 35 U.S.C. 102(b).  The Question Presented in the petition was as follows:

Whether, under the Leahy-Smith America Invents Act, an inventor's sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.

Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc., Docket No. 17-1229.

The issue is specifically related to the question of whether the AIA changed the application of the on-sale bar.  By granting cert., the Court opens up the possibility for a decision that extends further than that (see, for example, AMP v. Myriad Genetics).

To recap, the case arose over ANDA litigation regarding Teva's intention to market a generic version of Helsinn's intravenous formulations of palonosetron used to reduce chemotherapy-induced nausea and vomiting ("CINV").  There were four patents-in-suit:  U.S. Patent Nos. 7,947,724, 7,947,725, 7,960,424, and 8,598,219; only the '219 patent was allowed and granted under the AIA changes in U.S. patent law.

A prior art patent (U.S. Patent No. 5,202,333) taught that palonosetron was useful for treating CINV; the patents-in-suit were directed to novel formulations comprising "unexpectedly low concentrations of palonosetron."  Claim 2 of the '725 patent is representative of the pre-AIA patents-in-suit:

2.  A pharmaceutically stable solution for reducing emesis or reducing the likelihood of emesis comprising:
    a)  0.05 mg/mL palonosetron hydrochloride, based on the weight of the free base, in a sterile injectable aqueous carrier at a pH of from 4.5 to 5.5;
    b)  from 0.005 mg/mL to 1.0 mg/mL EDTA; and
    c)  mannitol in an amount sufficient to tonicify said solution, in a concentration of from about 10 mg/ml to about 80 mg/ml.

Claim 1 is representative of the '219 patent (post-AIA):

1.  A pharmaceutical single-use, unit-dose formulation for intravenous administration to a human to reduce the likelihood of cancer chemotherapy- induced nausea and vomiting, comprising a 5 mL sterile aqueous isotonic solution, said solution comprising:
    palonosetron hydrochloride in an amount of 0.25 mg based on the weight of its free base;
    from 0.005 mg/mL to 1.0 mg/mL EDTA; and
    from 10 mg/mL to about 80 mg/mL mannitol,
    wherein said formulation is stable at 24 months when stored at room temperature.

It is undisputed that each asserted claim covers the 0.25 mg dose of palonosetron.  Helsinn entered into contract for supplying the claimed formulation prior to critical date, but contingent on FDA approval (which was not obtained until after the critical date).

The District Court found a sale or offer for sale prior to the critical date, but that the invention was not ready for patenting with regard to the pre-AIA patents, and that the AIA had changed the on-sale bar to require a public sale or offer for sale.  Although the existence of the agreement and its terms were publicly known, the parties had not disclosed the 0.25 mg palonosetron dose before the critical date.  The District Court thus rejected Teva's invalidity contentions based on the § 102(b) on-sale bar.

The Federal Circuit reversed, in an opinion by Judge Dyk joined by Judges Mayer and Moore.  Using the framework set forth by the Court in Medicines Co. v. Hospira, the panel found that the invention was "on sale" prior to the critical date by applying "the law of contracts as generally understood" and "those activities that would be understood to be commercial sales and offers for sale 'in the commercial community.'"  Under this analysis, the Court had little difficulty deciding that there had been a sale before the critical date.  The contingent nature of FDA approval did not refute this conclusion, the Court saying that commercial practice, exemplified by provisions of the Uniform Commercial Code, contemplate "purported present sale of future goods . . . [which] operates as a contract to sell," UCC § 2– 105(2), and that "[a] contract for sale that includes a condition precedent is a valid and enforceable contract," citing BG Grp., PLC v. Republic of Argentina, 134 S. Ct. 1198, 1207 (2014).  The opinion also cited the Court's own precedent regarding the existence of a sale despite the presence of conditions precedent to commercial transfer of goods, such as Enzo Biochem, Inc. v. Gen-Probe, Inc., 424 F.3d 1276 (Fed. Cir. 2005), and C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340 (Fed. Cir. 1998).

The Court also rejected Helsinn's contention that the AIA changed the on-sale bar calculus to limit its application to public sales.  Noting that confidential sales did not per se prevent application of the on-sale bar prior to enactment of the AIA (citing, inter alia, In re Caveney, 761 F.2d 671, 673–74 (Fed. Cir. 1985)), the opinion rejected arguments by Helsinn and amici (including the U.S. government) that the AIA changed the law, which were based almost exclusively on statements from the Congressional record (which were directed not to on-sale activities but to public use).  It did not help Helsinn's argument in this regard that the panel identified Supreme Court precedent directly contrary to their position, i.e., Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 19 (1829).  Accordingly, the opinion states that "[w]e conclude that, after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale" and thus invalidity of the '219 patent was not properly determined by the District Court.

With regard to the question of whether the invention claimed in the patents in suit was "ready for patenting" prior to the critical date, the panel decided that it was, based on the invention having been reduced to practice before the critical date.  This decision depended, in part, on the parties' stipulation that "they would contest ready for patenting 'only with respect to the limitations and intended uses of "reducing emesis or reducing the likelihood of emesis" and '"to reduce the likelihood of cancer chemotherapy-induced nausea and vomiting" of the asserted claims' and not "'for any other reason.'"  The panel noted that its case law distinguished the standard needed to show reduction to practice with regard to whether a pharmaceutical invention would work for its intended purpose and the standard for FDA approval of a new drug, citing Scott v. Finney, 34 F.3d 1058, 1063–64 (Fed. Cir. 1994).  Specifically, the standard is that the invention "works for its intended purpose 'beyond a probability of failure' but not 'beyond a possibility of failure.'"  The Federal Circuit found the District Court erred by applying the FDA standard rather than the proper patent standard in making its (erroneous) determination that the invention was not "ready for patenting" before the critical date.  This conclusion was supported by Helsinn's own documents (including portions of the patents' prosecution histories), pre-litigation statements and testimony.  And the opinion notes that, if the standard applied by the District Court was correct, Helsinn could not have filed a valid application prior to the critical date, and "[s]uch a standard would preclude the filing of meritorious patent applications in a wide variety of circumstances."

(It is important to note that this case is another example of patentees making statements before the Patent Office aimed at validating priority claims and overcoming prior art that are at odds with positions they need to take in litigation, here to overcome invalidation under the § 102(b) on-sale bar.)

The Court is expected to hear the case during its October 2018 term, with a decision prior to this time next year.

Berkeley Files Opening Brief in CRISPR Appeal

By Kevin E. Noonan --

The University of California/Berkeley filed its opening brief to the Federal Circuit last week, asking that Court to overturn the Patent Trial and Appeal Board's decision that there was no interference-in-fact between Berkeley's application and several U.S. patents and applications assigned to The Broad Institute.  That decision is entitled to review under the substantial evidence standard for the Board's factual determinations, but de novo review for the PTAB's legal determination that Broad's claims-in-interference would not have been obvious in view of the claimed invention in Berkeley's earlier-filed patent application.

To recap, the Board found that there was no interference-in-fact based on these requirements:

In this proceeding, to prevail on its argument that there is no interference, Broad must show that the parties' claims do not meet at least one of the following two conditions:

1) that, if considered to be prior art to UC's claims, Broad's involved claims would not anticipate or render obvious UC's involved claims, or

2) that, if considered to be prior art to Broad's claims, UC's involved claims would not anticipate or render obvious Broad's claims.

Broad will prevail and a determination of no interference-in-fact will be made if a preponderance of the evidence indicates one of these conditions is not met.

In considering the evidence before it, the PTAB gave great weight to contemporaneous, cautious statements in the art in view of Professor Doudna's disclosure of in vitro CRISPR activity regarding whether the system would work in eukaryotic cells.  Specifically, these statements convinced the Board that while the results "suggested the 'exciting possibility'" that CRISPR-Cas9 could be operative in eukaryotic cells, "it was not known whether such a bacterial system would function in eukaryotic cells."  And, "[i]n another report, Doudna was quoted as stating that she had experienced 'many frustrations' getting CRISPR to work in human cells and that she knew that if she succeeded, CRISPR would be 'a profound discovery.'"  UC's assertion of other statements by their inventors that could be interpreted more positively did not convince the Board that there was a reasonable expectation of success in the art for getting the CRISPR-Cas9 system to work in eukaryotic cells, the Board stating that:

Although the statements express an eagerness to learn the results of experiments in eukaryotic cells and the importance of such results, none of them express an expectation that such results would be successful.

The Board swept aside Berkeley's arguments that this reasoning was flawed because the standard is not the inventor's expectations but those of the worker of ordinary skill by stating that "if the inventors themselves were uncertain, it seems that ordinarily skilled artisans would have been even more uncertain."  The Board also quoted Berkeley's expert as having said (contemporaneously with Professor Doudna's report of in vitro CRISPR activity):

There is no guarantee that Cas9 will work effectively on a chromatin target or that the required DNA-RNA hybrid can be stabilized in that context.

The Board concluded that "[w]e fail to see how 'no  guarantee' indicates an expectation of success."

Nor was the Board convinced based on the history of the development of CRISPR technology, which showed that many laboratories independent of the Doudna group quickly applied the new technology to manipulate eukaryotic cell genomic DNA:

Regardless of how many groups achieved success in eukaryotic cells, we are not persuaded that such success indicates there was an expectation of success before the results from these experiments were known.  The unpublished results of research groups are not necessarily an indication of whether ordinarily skilled artisans would have expected the results achieved.  Instead of viewing such work as evidence of an expectation of success, we consider the number of groups who attempted to use CRISPR-Cas9 in eukaryotic cells to be evidence of the motivation to do so, an issue that is not in dispute.  We agree with Broad's argument that a large reward might motivate persons to try an experiment even if the likelihood of success is very low.

On balance, the Board found that this evidence further supported their decision that there was insufficient evidence of a reasonable expectation of success to support Berkeley's allegation that their earlier work and publications would have rendered Broad's invention obvious.  This evidence was that "differences in gene expression, protein folding, cellular compartmentalization, chromatin structure, cellular nucleases, intracellular temperature, intracellular ion concentrations, intracellular pH, and the types of molecules in prokaryotic versus eukaryotic cells, would contribute to this unpredictability [regarding whether the CRISPR-Cas9 system would be operative in eukaryotic cells]."  In response to Berkeley's allegations that these considerations turned out not to be an impediment to CRISPR's activity in eukaryotic cells, the Board said "[t]he relevant question before us is whether those of skill in the art would have expected there to be problems before the experiments were done," not whether it turned out that the experiments were successful once they were tried.

Finally, the Board rejected Berkeley's citation of other prokaryotic genetic modification systems found to work in eukaryotes, generally on the grounds that there was no "commonality" in these methods that would have refuted Broad's evidence that the skilled worker would not have had any reasonable expectation of success.

In its brief, Berkeley found fault with both the Board's factual determinations and its legal conclusions (although wisely focusing the majority of their 64-page brief on their legal arguments).  These arguments begin with Berkeley's allegation that the PTAB applied an incorrect legal standard for obviousness that cannot be reconciled with the Supreme Court's KSR v. Teleflex Int'l precedent as has been further explicated by the Federal Circuit (most notably in In re Kubin).  Specifically, Berkeley's brief characterizes the Board's analysis as requiring "specific instructions" in the prior art regarding adapting CRIPSR as demonstrated in bacterial systems to use in eukaryotic cells.  This application of the obviousness analysis constitutes a standard "even more rigid" than the Federal Circuit's "teaching-suggestion-motivation test" that the Court "rejected" (albeit not entirely) in KSR.  Citing Kubin and In re O'Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988), Berkeley contends that:

This Court has explained how KSR applies in the context of an "unpredictable art" such as biotechnology.  Kubin, 561 F.3d at 1359-60.  In such fields, the obviousness inquiry should not focus exclusively on the degree of ex ante predictive confidence that a potential solution will succeed, because "for many inventions that seem quite obvious, there is no absolute predictability of success until the invention is reduced to practice" through experimentation.  In re O'Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988).  Rather, the focus should be on the extent of the guidance provided by the prior art—and therefore the extent to which a skilled artisan must innovate beyond that guidance to achieve the solution.  Kubin, 561 F.3d at 1359-60 (the question is whether the claimed advance reflects innovation beyond "the predictable use of prior art elements according to their established functions") (quoting KSR, 550 U.S. at 417).

The "key insight" provided by KSR, according to the brief, is that "when the prior art contains sufficient guidance to enable one skilled in the art to draw on well-known conventional techniques to achieve an advance without any genuine innovation, mere ex ante uncertainty about whether such routine efforts will succeed does not elevate a 'product . . . of ordinary skill and common sense' to the status of a patentable invention," citing KSR.  This is a theme that runs throughout the body of the arguments in the brief.  And, according to Berkeley, applying this "more rigid" standard was legal error by the PTAB.

The brief also asserts as another major theme that the Board erred for not considering contemporaneous evidence of "simultaneous invention," providing a tabulation of the scientific publications that appeared in the art just before and just after Broad's first-filed provisional application:

The presence of this art "can be compelling evidence" of obviousness (the inverse of long-felt need and failure of others) as a secondary consideration, and Berkeley argues that the Board committed legal error in failing to properly consider this evidence.  The Board did consider this evidence, of course, but only to support its appreciation that there was express motivation in the art to apply CRISPR to eukaryotic systems, not to support Berkeley's contention that the skilled worker would have had a reasonable expectation of success.

With regard to the question of expectation of success, the brief argues that this evidence of contemporaneous "invention" by several other groups, and the conventionality of the methods used by these groups (and Broad) in using CRISPR in eukaryotes is strong evidence that this accomplishment required no "innovation" and no "invention" independent of Professors Doudna and Charpentier's disclosure of CRISPR in prokaryotes (in the Jinek 2012 paper published prior to Broad's earliest provisional filing date).

The brief asserts that the Board misinterpreted the scientifically cautious statements by Professor Doudna and other Berkeley experts regarding whether CRISPR was "expected" to be operative in eukaryotic cells.  The "fundamental error" in the Board's consideration of these statements was that they were "imbue[d] . . . with significance divorced from the context in which they were made," which was not as an opinion regarding whether there was a reasonable expectation of success that CRISPR would be operative in eukaryotic cells according to the brief.  Taken as a whole, according to the brief, the prior art establishes that the skilled worker would have had a reasonable expectation of success in using CRISPR in eukaryotes.

The brief also faults the Board for not considering a provisional application by Kim (U.S. Provisional Application No. 61/717,324, filed October 23, 2012, and later published as U.S. Application No. 14/685,568) as prior art under 35 U.S.C. §102(e).  (In many ways this is the brief's strongest argument, because this reference is clearly prior art to the earliest-filed Broad provisional, and Berkeley has a strong argument that the Board not considering it was legal error.)

Finally, Berkeley argues that Broad had not shown that it was entitled to the December 12, 2012 filing date of its earlier provisional.  According to the brief, the Board should have considered October 15, 2013 as the relevant "end date" for considering prior art; if it had done so, many of the references not considered by the Board (set forth in the table above) would have made it impossible for Broad to satisfy its burden of proof that its claims were not obvious.  Instead, the brief contends that the Board "assume without analysis" that Broad was entitled to its December 12, 2012 first provisional filing date for its "hundreds of involved claims," a conclusion Berkeley contends was error.

Broad will have the opportunity to make its arguments in favor of the Board's decision in the coming months; oral argument should be scheduled for some time before the end of the year.

In re Apple Inc. (Fed. Cir. 2017)

Acting as Lexicographers Saves Patent from Being Found Invalid

By Joseph Herndon --

In a recent Federal Circuit decision, the Court highlighted an old rule in that the inventors may act as their own lexicographers to create a claim term and define the term accordingly.  Here, a U.S. patent directed to user interface functionality on a touchscreen device was saved due to a claim term "rubberbanding" being well-defined in the specification.

Procedurally, in this case, an unidentified third party filed a request for ex parte reexamination of all claims of Apple's U.S. Patent No. 7,844,915, and the U.S. Patent and Trademark Office granted the request.  Based on its constructions of "scroll or gesture" and "rubberbanding" claim limitations, the Examiner rejected every claim of the '915 patent as anticipated or obvious in view of the prior art, and the Board affirmed.

Apple appealed the Patent Trial and Appeal Board's decision rejecting all claims, contending that the Board erred by construing the claim limitations of "scroll or gesture" and "rubberbanding" too broadly.  The Federal Circuit agreed with Apple on the latter, but not the former.

The '915 patent claims software that allows a touchscreen device to differentiate between a scroll operation and a gesture operation based on the number of detected input points or finger touches.  The '915 patent teaches that a single input point is interpreted as a scroll, whereas two or more input points are interpreted as a gesture.  Gestures may include zooming in, zooming out, or rotating an image on the screen.  Claim 1 recites a method that invokes the "scroll or gesture" limitation in dispute in this case:

1.  A machine implemented method for scrolling on a touch-sensitive display of a device comprising:
    receiving a user input, the user input is one or more input points applied to the touch-sensitive display that is integrated with the device;
    creating an event object in response to the user input;
    determining whether the event object invokes a scroll or gesture operation by distinguishing between a single input point applied to the touch-sensitive display that is interpreted as the scroll operation and two or more input points applied to the touch-sensitive display that are interpreted as the gesture operation;
    issuing at least one scroll or gesture call based on invoking the scroll or gesture operation;
    responding to at least one scroll call, if issued, by scrolling a window having a view associated with the event object based on an amount of a scroll with the scroll stopped at a predetermined position in relation to the user input; and
    responding to at least one gesture call, if issued, by scaling the view associated with the event object based on receiving the two or more input points in the form of the user input.

The '915 patent also describes an improved scrolling feature called "rubberbanding."  When a user scrolls past the edge of the content on the screen, a predetermined amount of blank space is displayed and then the content slides back to fit on the screen, resembling the motion of a taut rubber band when the tension is released from one end.  For example, if a user scrolls too far such that no content remains in the direction of the scroll -- i.e., a user scrolls down when the screen is already displaying the most recent email at the top -- the phone will show a predetermined amount of blank space above the most recent email and will slide the content back onto the screen at the end of the scroll.

Claim 2 recites rubberbanding:  "The method as in claim 1, further comprising: rubberbanding a scrolling region displayed within the window by a predetermined maximum displacement when the scrolling region exceeds a window edge based on the scroll."

"Scroll or Gesture"

Both of Apple's arguments on appeal are rooted in claim construction.  First, Apple contended that the Board's construction of the phrase "two or more" in the scroll or gesture limitation is unreasonable in light of the claim structure and specification.  According to Apple, the '915 patent articulates a single rule for distinguishing between two categories of operations:  1) a "single" input point that is interpreted as a scroll operation; and 2) "two or more" input points that are interpreted as a gesture operation.  Apple claimed that the "or" in the phrase "two or more" does not create a distinction between two input points and more than two input points.  In other words, the phrase "two or more" must be interpreted as an atomic unit, meaning that two-, three-, four-, and five-input points must all be interpreted as gestures.

In reaching a contrary conclusion, the Board explained that the broadest reasonable interpretation of the phrase "two or more" permits either two input points or more than two input points to be interpreted as a gesture operation.  Stated differently, the Board held that the claim language only requires detection of a scroll operation in response to a single input point and a gesture operation in response to one of the possible multi-input touches.  Thus, this included more than a single rule.  Because the prior art relied on by the Examiner both teach a single-input scroll and a two-input gesture, the Board rejected the claims.

The Federal Circuit agreed with the Board's construction.  The pertinent claim language recites:  "distinguishing between a single input point . . . and two or more input points."  On its face, this language does not limit the invention such that all received user inputs must be categorized as either a scroll or a gesture as Apple contends.  Apple's construction would replace the word "or" with "and," thereby requiring all multi-input touches to be distinguished as gestures.  But this reading is too narrow.  The broadest reasonable interpretation of the word "or" in the phrase "two or more" creates alternatives for the gesture operation:  a gesture operation occurs if either two input points or more than two input points are detected.

The Federal Circuit additionally noted that the claims use the open-ended transitional phrase "comprising" and thus the claims are broad enough to include user inputs that are categorized as something other than a scroll or a gesture, undermining Apple's suggestion that the claims are limited to a single rule.

"Rubberbanding"

Apple next argued that the Examiner's interpretation of "rubberbanding" was erroneous as covering sliding content forward at the end of a scroll (i.e., sliding in the same direction as the scroll).  Based on this construction, the Board rejected claims 2, 9, and 16 -- which include the rubberbanding limitation -- as obvious in view of other prior art of record.  Apple contended the Board erred in its claim construction because rubberbanding requires sliding the content backwards in the opposite direction of the scroll.

The PTO argued on appeal that the broadest reasonable interpretation of rubberbanding is not limited to sliding content in a particular direction, much less requiring that the content must slide backwards, and that the concept of rubberbanding "simply seeks to control the movement of scrolled content."

The Federal Circuit agreed with Apple here in that the Board's analysis rests on an incorrect interpretation of "rubberbanding".  As expressly defined in the specification, the key to the rubberbanding feature is sliding content in the opposite direction of the scroll -- sliding content backwards -- once the scroll has been completed.  Acting as lexicographers, the inventors of the '915 patent expressly defined rubberbanding in the specification as follows:

Rubberbanding a scrolled region according to the method 300 occurs by a predetermined maximum displacement value when the scrolled region exceeds a display edge of a display device based on a scroll.  If a user scrolls content of the display making a region past the edge of the content visible in the display, then the displacement value limits the maximum amount for the region outside the content.  At the end of the scroll, the content slides back making the region outside of the content no longer visible on the display.

The term "rubberbanding," as defined by the inventors, does not cover sliding content forward at the end of the scroll, and the Examiner did not cite any evidence to support the proposition that selecting the direction of the scrolling would be within the level of ordinary skill.  Thus, because the Federal Circuit found that the Board misinterpreted the rubberbanding limitation, the rejection of claims 2, 9, and 16 was vacated and the case was remanded for the Board to reconsider these claims in light of the proper interpretation of rubberbanding.

In re Apple Inc. (Fed. Cir. 2017)
Nonprecedential disposition
Before Chief Judge Prost and Circuit Judges Dyk and Stoll
Opinion by Circuit Judge Stoll

Los Angeles Biomedical Research Institute v. Eli Lilly & Co. (Fed. Cir. 2017); Eli Lilly & Co. v. Los Angeles Biomedical Research Institute (Fed. Cir. 2017)

By Kevin E. Noonan --

The Federal Circuit handed down two related opinions last week, Los Angeles Biomedical Research Institute v. Eli Lilly & Co. and Eli Lilly & Co. v. Los Angeles Biomedical Research Institute, one of which raised the question of whether (and when) it is appropriate for the Court to remand decisions of the Patent Trial and Review Board (PTAB) rendered under the post-grant provisions of the Leahy-Smith America Invents Act (AIA).

The case arose as an inter partes review (IPR) before the PTAB, wherein the Board held all claims of U.S. Patent No. 8,133,903 to be obvious.  The claims were directed to methods for treating ("arresting or regressing") penile fibrosis.  This condition has two forms:  penile tunical fibrosis, where excess collagen builds up in the tunica albuginea (a membrane surrounding the corpora cavernosa, the chambers that fill with blood during an erection), and corporal tunica fibrosis, where excess collagen builds up in the corpora cavernosa itself.  The claimed treatment is daily administration of type 5 phosphodiesterase (PDE5) inhibitors, said treatment being characterized as "long term" in the opinion.  The class of PDE5 inhibitors includes drugs like sildenafil (Viagra^®) and tadalafil (Cialis^®), well-known erectile dysfunction treatments; while penile fibrosis can cause erectile dysfunction, the disease is distinct from other causes of ED.

Claim 1 of the '903 patent is representative:

1.  A method comprising:
    a) administering acyclicguanosine3',5'-monophosphate (cGMP) type 5 phosphodiesterase (PDE5) inhibitor according to a continuous long-term regimen to an individual with at least one of a penile tunical fibrosis and corporal tissue fibrosis; and
    b) arresting or regressing the at least one of the penile tunical fibrosis and corporal tissue fibrosis, wherein the PDE- 5 inhibitor is administered at a dosage up to 1.5 mg/kg/day for not less than 45 days.

Eli Lilly petitioned for an IPR after the Los Angeles Biomedical Research Institute (LAB) sued for infringement over the company's marketing of Cialis^® for the treatment of penile fibrosis.  The Board instituted an IPR on two grounds:  anticipation (reviewed on appeal in a separate decision captioned Eli Lilly & Co. v. Los Angeles Biomedical Research Institute) and obviousness as reviewed in this opinion.  The Board found the claims obvious based on teaching that PDE5 inhibitors can be used for treating ED (which the Board construed as including penile tunical fibrosis and corporal tissue fibrosis); that ED is a disease associated with aging and, inter alia, atherosclerosis (associated in turn according to the Board with corporal fibrosis), and that long term treatment (at least 45 days) with up to 1.5 mg/kg/day (~100 mg for an average-sized adult male) was effective for treating ED caused by "diabetes, atherosclerosis, smoking, hypertension, or a combination of such factors."  The Board rejected LAB's contention that treatment with PDE5 was thought in the art to exacerbate rather than ameliorate penile fibrosis.

The Federal Circuit vacated and remanded, in an opinion by Judge Bryson joined by Judge Moore; Judge Newman concurred in part but dissented from the judgment.  The Court first rejected LAB's claim of priority, based on failure to disclose dosages of up to 1.5 mg/kg/day in its the earliest-filed provisional application.  This portion of the opinion considers whether disclosure regarding administration of PDE5 inhibitors to rats at a specific concentration (100 mg/L) would have been understood by a person having ordinary skill in the art to be equivalent to 1.5 mg/kg/day for an adult human male and the Court's opinion that it would not.  Indeed, any such "knowledge" by a skilled person would have been based on speculation, which cannot satisfy the written description requirement according to the panel, citing Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997) .

The panel then addressed the Board's claim construction, finding that the Board had "read out of the claim" the limitation of "an individual with at least one of penile tunical fibrosis and corporal tissue fibrosis" by interpreting that phrase to mean "an individual hav[ing] symptoms that may be associated with penile fibrosis, such as [erectile dysfunction], but not that the patient be specifically diagnosed as having penile tunical fibrosis or corporal tissue fibrosis."  According to the opinion, the patent specification makes clear that "penile fibrosis may result in erectile dysfunction, but it may not" and "erectile dysfunction has alternative causes and may present without underlying penile fibrosis."  The patent claims are directed to methods for treating penile fibrosis whether or not it results in the symptoms of erectile dysfunction, and thus the Board wrongly construed this term according to the opinion.  The panel found support for its view on the correct claim construction of this term from the Court's decision in Rapoport v. Dement, 254 F.3d 1053 (Fed. Cir. 2001), where, analogously, claims for treating sleep apnea were not directed to treating the symptoms of sleep apnea.  Accordingly, the Federal Circuit found that the Board had not adopted the broadest reasonable interpretation of the claims but rather an overbroad interpretation.

Similarly, the opinion rejected the Board's determination that the limitation "arresting or regressing the at least one of the penile tunical fibrosis and corporal tissue fibrosis" is entitled to no patentable weight, as being merely a statement of intended results of PDE5 inhibitor administration according to the claims.  The opinion based this conclusion on the placement of the limitation in the structure of the claim, not as part of a preamble but as an affirmatively recited element.  In addition, the Court found "[o]ther intrinsic evidence" (and thus appropriately subjected to de novo review) that distinguishes the phrase as it is used in these claims from situations where such limitations are present in preambles or "wherein" clauses; this conclusion is supported by examples of efficacy set forth in the specification.

The Court concluded its review of the Board's claim construction by rejecting LAB's contention that the claim term "continuous long-term regimen" adds an additional limitation regarding steady state plasma concentration or constant dosing level in vivo, because the argument was not supported by the intrinsic evidence from the specification or prosecution history or extrinsic evidence from expert testimony.

Turning to the Board's conclusion that the claims were obvious, the panel vacated the judgment based on its conclusions regarding the Board's improper claim construction.  Specifically, while the Board found that it would have been obvious to combine the teachings of three prior art references to arrive at a method for treating ED, "[w]hat the Board did not do [] was to find that those references taught treating a patient with penile tunical fibrosis or corporal tissue fibrosis" nor that the references would have provided the skilled worker with a reasonable expectation of success for treating these conditions.  The panel also found wanting reliance on references that taught "on-demand" dosing to support obviousness of claims that recited "long-term daily treatment" with PDE5 inhibitors.

The Board also erred in rejecting LAB's evidence that the prior art taught that long-term treatment with PDE5 inhibitors was thought to be detrimental because it would increase fibrosis by stimulating nitric oxide production as understood in the art.

Accordingly, the panel's ruling was that:

The question remains whether a person of skill in the art would have had a reason to combine [the three cited references] to treat penile fibrosis with a long-term regimen of a daily dosage of a PDE5 inhibitor, and would have had a reasonable expectation of success from doing so.  Because the Board's obviousness analysis was based on an erroneous construction of the claim language and an overly broad interpretation of [one of the references], and because the Board did not address the record evidence summarized above, we remand for the Board to make new findings as to whether there was an apparent reason to combine the prior art references and whether that combination would have rendered obvious the long-term administration of PDE5 inhibitors to treat penile fibrosis.

The opinion also mandates that on remand the Board "make the findings necessary to determine whether the references render the 'arresting or regressing' limitation obvious, but affirmed the Board's finding that the dosage limitation ("up to 1.5 mg/kg/day for not less than 45 days") is disclosed in the prior art.

Judge Newman dissented because she believed the Board had established obviousness.  In addition, however, she voiced her belief that remand was inappropriate and contrary to the IPR provisions of the AIA.  In her view:

The America Invents Act was enacted to remedy the lack of expedition and to add predictability in infringement disputes, by assigning to an expert administrative tribunal and presumed expert federal court the resolution of some major patentability issues, with tight procedural rules and deadlines.  It was expected that in the normal course questions of patentability under Section 102 and 103 would be reliably and speedily resolved.  Implementing this policy, when we find analytic lapses by the PTAB, it appears that the statute contemplates that we will make the determination, on the record that was made at the Board.  Indeed, the depth of briefing by the parties suggests that this was their understanding, too.

Remands are contrary to this understanding of the intent of Congress in enacting the IPR provisions of the AIA, and thus while Judge Newman does not believe remands are never appropriate, they should be rare.

In the companion case, the Federal Circuit affirmed the Board's determination that the asserted reference (International Publication No. WO 01/80860) did not anticipate the claims, because it did not disclose the limitation that PDE5 inhibitors be administered "at a dosage up to 1.5 mg/kg/day for not less than 45 days."  While conceding that the reference might "suggest" long-term dosing, the panel held that such suggestion is not enough to satisfy the anticipation standard, citing AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1055 (Fed. Cir. 2010), in support of its interpretation.

Los Angeles Biomedical Research Institute v. Eli Lilly & Co. (Fed. Cir. 2017)
Panel: Circuit Judges Newman, Bryson, and Moore
Opinion by Circuit Bryson; opinion concurring in part, dissenting from the judgment by Circuit Judge Newman

Eli Lilly & Co. v. Los Angeles Biomedical Research Institute (Fed. Cir. 2017)
Panel: Circuit Judges Newman, Bryson, and Moore
Opinion by Circuit Judge Newman

Perfect Surgical Techniques, Inc. v. Olympus America, Inc. (Fed. Cir. 2016)

By Kevin E. Noonan --

Diligence is a patent concept whose applicability was severely restricted under the changes in U.S. patent law created under the Leahy-Smith America Invents Act.  Diligence is important when determining whether an invention was invented prior to an act intervening between invention and patent application filing, in a "first-to-invent" regime.  There is much less for the principle to do when patentability is judged under a first-inventor-to-file rubric (although there may be instances when the process from conception through reduction to practice may be subject to a diligence inquiry even under the revised law).  Nevertheless, because there are millions of patents in force that were obtained under the traditional invention standard, diligence issues have not yet been relegated to the dustbin of history, a circumstance illustrated by the Federal Circuit's decision in Perfect Surgical Techniques, Inc. v. Olympus America, Inc.  Particularly relevant is the differing opinions on the proper diligence standard taken by the majority and by one of the panel judges.

The case arose as an inter partes review of U.S. Patent No. 6,030,384 directed to a surgical instrument; claim 1 illustrates the technology (which is otherwise not particularly relevant to the issues before the Court):

A bipolar surgical instrument comprising:
    a shaft having a proximal end and a distal end;
    a pair of opposed jaws at the distal end of the shaft;
    a first electrode member on one of the jaws;
    a second electrode member on one of the jaws, wherein the first and second electrode members are electrically isolated from each other; and
    an actuating mechanism for moving the jaws between an opened and closed configuration, wherein electrode members lie parallel to and laterally spaced-apart from each other when the jaws are closed, wherein at least one of the electrode members comprises a plurality of tissue penetrating elements which project toward the opposed jaw.

The PTAB invalidated this and other claims in the '384 patent for anticipation or obviousness over Japanese Application Publication No. H10- 33551 A , a prior art reference under 35 U.S.C. § 102(a).  The lynchpin of the Board's decision was diligence -- were the patentees diligent between a time just prior to the publication date of the reference and the date when they reduced their invention to practice?  The PTAB decided they were not, and thus the Japanese patent publication was prior art and the claims were invalid variably for anticipation or obviousness.

The Federal Circuit vacated and remanded, in an opinion by Judge Moore joined by Judge O'Malley and in part by Judge Schall, who also dissented in part.  The panel first dismissed as harmless error a procedural argument under 37 C.F.R. § 42.63(b) raised by the patentee regarding whether the requestor had properly filed a translation of the reference (finding against the patentee).  Turning to the diligence issue, the opinion notes that pre-AIA § 102(g) provided that a patentee could antedate a reference by showing "earlier conception and reasonable diligence in reducing to practice."  (To be precise, diligence in this context is used to show entitlement to earlier conception when the inventor did not "abandon, suppress or conceal" her invention.)  The facts considered by the Board and reviewed by the panel were as follows (and are important in assessing the implications of the panel's decision so are set forth in detail here).  The inventor hired a patent attorney (Mr. Heslin) to draft and file the application that resulted in the '384 patent.  The attorney sent the inventor an initial draft on January 28, 1998, and the application was filed on May 1, 1998 (providing the constructive reduction to practice date).  The critical period began on February 9, 1998 (one day prior to the publication date of the Japanese application).  Thus, a little more than three months (93 days) constitute the time that the Board and the panel considered whether the inventor and attorney's actions were diligent.

The inventor's testimony and evidence regarding his diligence was summarized in the opinion as follows.  The inventor testified that he worked diligently "within the reasonable limits of my busy medical practice and teaching schedule."  That schedule included working "roughly 80 hours per week, during which he would perform approximately four to six surgeries."  As for the dates having evidentiary support, the inventor stated that he "submitted comments on the initial draft application on March 2, received questions from Mr. Heslin on or around March 4 and 12, participated in a conference with Mr. Heslin on March 16, and received second draft application from Mr. Heslin on April 13."  The inventor also testified that he carefully reviewed this draft prior to its filing on May 1st.

The corroborating evidence to this testimony (required to support any inventor's testimony in a priority dispute; Brown v. Barbacid, 436 F.3d 1376, 1380 (Fed. Cir. 2006)) included a declaration from Attorney Heslin, his billing records and letters between inventor and attorney.  Attorney Heslin's testimony was consistent with and corroborated the inventor's statements and diligence timeline.  He also included letters and other exhibits consistent with his testimony.  The Board found no fault or deficiency with this evidence; however, in its view these activities were not sufficient to establish diligence to defeat the Japanese application as an invalidating reference, particularly with regard to three time periods:  from "(1) February 10 to March 1; (2) March 12 to March 15; and (3) April 13 to May 1."

In reviewing this conclusion, the panel noted that whether a patentee can antedate a reference under §102(g) is a question of law based on underlying facts, citing In re Steed, 802 F.3d 1311, 1316–17 (Fed. Cir. 2015).  Insofar as the factual inquiry is concerned, the Federal Circuit reviews the PTAB's determinations for substantial evidence.  Here, the opinion notes that the Board "repeatedly characterized" the diligence burden as being "continuous exercise of reasonable diligence" (emphasis in opinion), citing several instances from the Board's final written decision.  This standard was "too exacting and in conflict with our precedent" according to the majority; indeed, the opinion goes on to expressly repudiate this standard, saying "[a] patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence" (a distinction apparently with a difference, at least for the majority), citing Tyco Healthcare Grp. v. Ethicon Endo-Surgery, Inc., 774 F.3d 968, 975 (Fed. Cir. 2014) (emphasis in the opinion).  The opinion goes on to state that there is no requirement, under the proper standard, that an inventor work every day during the diligence period, and moreover that "periods of inactivity" during the period do not "automatically vanquish" a claim to reasonable diligence.  Rather, it is the totality of the evidence of diligence (as illustrated in Monsanto Co. v. Mycogen Plant Sci., Inc., 261 F.3d 1356, 1362 (Fed. Cir. 2001)) that must show reasonable diligence, evaluated under the "rule of reason," citing Price v. Symsek, 988 F.2d 1187, 1195 (Fed. Cir. 1993).  In the majority's opinion:

Our holdings in these cases are consistent with the purpose of the diligence inquiry.  In determining whether an invention antedates another, the point of the diligence analysis is not to scour the patent owner's corroborating evidence in search of intervals of time where the patent owner has failed to substantiate some sort of activity.  It is to assure that, in light of the evidence as a whole, "the invention was not abandoned or unreasonably delayed.  . . .  That an inventor overseeing a study did not record its progress on a daily, weekly, or even monthly basis does not mean the inventor necessarily abandoned his invention or unreasonably delayed it.  The same logic applies to the preparation of a patent application:  the absence of evidence that an inventor and his attorney revised or discussed the application on a daily basis is alone insufficient to determine that the invention was abandoned or unreasonably delayed.  One must weigh the collection of evidence over the entire critical period to make such a determination.

The opinion distinguishes the facts here (and the standard generally) from those in In re Mulder 716 F.2d 1542, 1542–46 (Fed. Cir. 1983), cited by the Board in support of its decision, on the basis that in Mulder the patentee showed no evidence whatsoever for diligence, even though the critical period was for only two days.

The Board erred, according to the majority, by fixating on those periods of inactivity and chiding the patentee for not providing specific evidence of his activities (regarding the patent or otherwise) that would carry its erroneously enhanced burden of continuous activity to establish diligence.  Moreover, the majority found fault with the Board's summary dismissal of Attorney Heslin's evidence, which the opinion expressly characterizes as error because he was acting as the inventor's agent and his activities should have been attributed to and inured to the benefit of the inventor.

While being sharply critical of the Board's findings regarding the inventor's diligence, the majority vacated and remanded to give the Board the opportunity to review the record using the correct standard (and thus provided the required deference to the Board's fact-finding under Dickenson v. Zurko and other Supreme Court precedent), while specifically mandating the evidence the Board should consider on remand.  The panel also unanimously vacated the Board's claim construction and directed that the art be applied to the claims on remand consistent with the claim construction provided in the opinion.

Judge Schall dissented only to the extent that the majority's views on the diligence issues required vacatur and remand of the Board's invalidity determinations.  He took the view that the Board's determination was supported by substantial evidence; as is frequently the case, the dissent and the majority opinions review (and cite) the same factual evidence and come to completely opposite conclusions.  As the majority notes in a footnote, it is only the first alleged period of lack of diligence -- between February 10 to March 1 -- that convinced Judge Schall that the Board's decision was correct (he states later in his dissent that he finds the Board's handling of the other two periods to be "troubling").  And Judge Schall's view of the Federal Circuit's case law on diligence is that only some of the cases support the majority's standard.  Others, including Griffith v. Kanamaru, 816 F.2d 624, 629 (Fed. Cir. 1987) more expressly require continuous diligence consistent with the Board's view.  But regardless of how various decisions frame the standard, Judge Schall believes that the test is whether a "party seeking priority 'account for the entire period during which diligence is required,'" relying on Gould v. Schawlow, 363 F.2d 908, 916 (C.C.P.A. 1966).  Put simply, "establishing diligence requires that the inventor account for his or her activities during the entire critical period.  Where there are stretches of inactivity, the inventor must provide a reasonable justification for those gaps with corroborating evidence."

The inventor here did not meet that standard according to Judge Schall's dissent, and he would have affirmed the Board's invalidity decision on that basis (although his analysis in the opinion is focused on the "contours of [the Board's] methodology" in arriving at his conclusion).  And he also disagrees with Perfect Surgical's contention that the Board erred in not considering the evidence as a whole, because Judge Schall's understanding of the law is that what a patentee must do is account for each period of inactivity in order to establish diligence.  Ultimately the dissent faults Precision Surgical for not providing the evidence Judge Schall believes was necessary to establish diligence and thus for failing to carry its burden as the party attempting to show prior invention.

This opinion, and particularly the dissent, provides a nice synopsis of Federal Circuit case law and examples of instances where the Court found, or did not, that diligence had been established in various circumstances and periods of delay.  While the sun shining on the value of this law is a setting one, until diligence issues have been permanently extinguished it provides a valuable resource for a rather arcane area of the patent law.

Perfect Surgical Techniques, Inc. v. Olympus America, Inc. (Fed. Cir. 2016)
Panel:  Circuit Judges Moore, Schall, and O'Malley
Opinion by Circuit Judge Moore; opinion concurring in part and dissenting in part by Circuit Judge Schall

The Medicines Company v. Hospira, Inc. (Fed. Cir. 2016) (en banc)

By Kevin E. Noonan --

The past decade or so of U.S. patent law has been characterized by a consistent theme between Federal Circuit decisions and the Supreme Court's invalidation of them (and sometimes can be discerned even in those rare instances when the High Court deemed the Federal Circuit's decision below to have been correct).  This theme is that the Court has had to intervene to prevent the Federal Circuit from establishing "bright-line" rules in patent cases, or in too stringently applying even those rules that would otherwise be capable of being implemented with sufficient flexibility to pass Supreme Court muster.  There have been exceptions, including the Court's two-prong test for determining whether the on-sale bar under 35 U.S.C. § 102(b) would invalidate a patent.  As set forth in Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), the Court commanded that invalidation required that there be a commercial sale or offer for a commercial sale of a patented product, and that the invention embodied in that product be "ready for patenting" at the time of the sale or offer for sale.  The question before the Court in Pfaff was focused on the circumstances that would satisfy the second prong of this test.  Yesterday, in The Medicines Company v. Hospira, Inc., the Federal Circuit considered en banc the requirements for there to be a commercial sale or offer to sell that would satisfy the first prong.

The case arose in the context of ANDA litigation involving Hospira's generic version of TMC's bivalirudin drug (sold as Angiomax®), an anticoagulant used in heart surgery.  The invention claimed in the patents-in-suit, U.S. Patent Nos. 7,582,727 and 7,598,343, can be appreciated by the following representative claims:

Claim 1 of the '727 patent:

Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1: [Phe Pro Arg Pro Gly Gly Gly Gly Asn Gly Asp Phe Glu Glu Ile Pro Glu Glu Tyr Leu]) and a pharmaceutically acceptable carrier for use as an anticoagulant in a subject in need thereof, wherein the batches have a pH adjusted by a base, said pH is about 5-6 when reconstituted in an aqueous solution for injection, and wherein the batches have a maximum impurity level of Asp⁹-bivalirudin that does not exceed about 0.6% as measured by HPLC.

Claim 1 of the '343 patent:

Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1: [Phe Pro Arg Pro Gly Gly Gly Gly Asn Gly Asp Phe Glu Glu Ile Pro Glu Glu Tyr Leu]) and a pharmaceutically acceptable carrier, for use as an anticoagulant in a subject in need thereof, said batches prepared by a compounding process comprising: (i) dissolving bivalirudin in a solvent to form a first solution; (ii) efficiently mixing a pH-adjusting solution with the first solution to form a second solution, wherein the pH-adjusting solution comprises a pH-adjusting solution solvent; and (iii) removing the solvent and pH-adjusting solution solvent from the second solution; wherein the batches have a pH adjusted by a base, said pH is about 5-6 when reconstituted in an aqueous solution for injection, and wherein the batches have a maximum impurity level of Asp⁹-bivalirudin that does not exceed about 0.6% as measured by HPLC.

Bivalirudin is too acidic for direct injection into patients and TMC had attempted to develop formulation methods for overcoming this limitation.  Prior compounding methods produced a degradation product, Asp⁹ bivalirudin (caused by deamination of Asn⁹); in high enough concentrations (>1.5%) Asp⁹ bivalirudin contaminants were unacceptable (per FDA).  Production of bivalirudin batches contaminated with high levels of Asp⁹ bivalirudin prior to the filing date of the patents-in-suit caused TMC to shut down commercial production for more than a year.  The company's attempts to produce formulations of the drug for commercial sale were unsuccessful, and led TMC to hire a consultant to investigate why there were problems making the drug.  These efforts determined that there were certain ways of adjusting the pH that reduced the impurity levels to less than 0.6% and resulted in the '343 and '727 patents.  The resulting patent applications were filed July 27, 2008, making July 27, 2007 the critical date for determining whether the patents were invalid under the on-sale bar.

In the ensuing ANDA litigation, Hospira alleged that the patents were invalid under the on-sale bar of 35 U.S.C. § 102(b), were obvious under § 103 and invalid under § 112 for lack of written description, non-enablement, and indefiniteness.  TMC had a long-standing (1997-2006) relationship with Ben Venue Laboratories to make bivalirudin for commercial sale, and the  evidence established that TMC paid Ben Venue Laboratories $347,500 to manufacture three batches of bivalirudin using the claimed methods, said batches being completed on October 31, 2006, November 21, 2006, and December 14, 2006 (i.e., prior to the critical date).  These batches (which were worth $20 million on the market) were delivered to TMC's authorized and exclusive distributor, Integrated Commercial Solutions (ICS) pending FDA approval per a distribution agreement between TMC and ICS effective February 27, 2007.  None of the batches were released for sale until August 2007, after the critical date.  Hospira urged that bivalirudin produced by Ben Venue prior to the critical date constituted a commercial sale, and delivery of these batches to ICS amounted to an offer for commercial sale.

The District Court disagreed; although the District Court determined that the invention was ready for patenting and thus satisfied the second prong of the Pfaff test, Ben Venue's activities did not constitute a commercial sale nor was transfer of the drug to ICS an offer for sale.  The District Court's reasoning was that the product produced by Ben Venue was produced on TMC's behalf, which always retained title.  Although this by itself was not sufficient, in addition the product was not produced for (immediate) commercial sake but for "validation purposes."  According to District Court, the purpose of the on-sale bar must be considered, which is "to preclude attempts by the inventor or his assignee to profit from commercial use of an invention for more than a year before an application for patent is filed," citing D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147 (Fed. Cir. 1983).  Under these circumstances, according to the District Court, this was not the case here; in addition, the District Court found (sua sponte) that these activities constituted "experimental use" and thus avoided the on-sale bar.  The District Court held that the claims were not invalid for violation of the on-sale bar (or any of the other reasons advanced by Hospira) and also were not infringed.

A merits panel, addressing only the question of whether the on-sale bar invalidated TMC's patents, reversed in an opinion by Judge Hughes, joined by Judges Dyk and Wallach (see "The Medicines Company v. Hospira (Fed. Cir. 2015)").  The panel considered this question de novo (Robotic Vision Sys., Inc. v. View Eng'g, Inc., 249 F.3d 1307 (Fed. Cir. 2001)) and applied the Supreme Court's Pfaff standard for applying the on-sale bar.  This question reduced to whether there was a commercial sale or offer to sell (there being no dispute that the invention was ready for patenting and satisfied the second prong of the Pfaff test).  The panel agreed that Ben Venue "invoiced the sale as manufacturing services and title to the pharmaceutical batches did not change hands," but this was not dispositive.  What determined whether the on-sale bar had been breached in the merits panel's opinion was whether an inventor has commercially exploited the invention before the critical date.  Applying this standard, the merits panel found "no principled distinction between the commercial sale of products prepared by the patented method [] and the commercial sale of services that result in the patented product-by-process" that occurred in this case.  The opinion stated that "the sale of the manufacturing services here provided a commercial benefit to the inventor more than one year before a patent application was filed," thus implicating the policy considerations the panel identified as motivating the on-sale bar.

The Federal Circuit vacated this opinion and reinstituted the appeal en banc, ordering the parties (and amici) to brief these issues:

(a) Do the circumstances presented here constitute a commercial sale under the on-sale bar of 35 U.S.C. § 102(b)?
    (i) Was there a sale for the purposes of § 102(b) despite the absence of a transfer of title?
    (ii) Was the sale commercial in nature for the purposes of § 102(b) or an experimental use?
(b) Should this court overrule or revise the principle in Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353 (Fed. Cir. 2001), that there is no "supplier exception" to the on-sale bar of 35 U.S.C § 102(b)?

Sitting en banc, the Federal Circuit affirmed the District Court's determination that there was no on-sale bar violation, in an opinion for a unanimous court by Judge O'Malley.  The en banc Court held that "to be 'on sale' under § 102(b), a product must be the subject of a commercial sale or offer for sale, and that a commercial sale is one that bears the general hallmarks of a sale pursuant to Section 2-106 of the Uniform Commercial Code."  Under the circumstances here there was no commercial sale and thus the District Court correctly found that the claims were not invalid under § 102(b).

The opinion sets forth the en banc Court's understanding ("a brief overview") of the legal and precedential history of the on-sale bar and the policy reasons behind it over the nearly 200 years U.S. law has recognized this requirement.  While grounded generally in the novelty requirements in the Patent Act of 1793, the Court finds the first clear enunciation of the bar in Pennock v. Dialogue, 27 U.S. (2 Pet.) 1 (1829), and later codified in Section 6 of the Patent Act of 1836 (albeit with a later-added two-year grace period which was reduced to one year in 1939).  The opinion recounts its own "totality of the circumstances" test applied under the 1952 Patent Act prior to the Supreme Court's Pfaff opinion (see, for example, Envirotech Corp. v. Westech Eng'g Inc., 904 F.2d 1571 (Fed. Cir. 1990), and Ferag AG v. Quipp Inc., 45 F.3d 1562 (Fed. Cir. 1995)); the Federal Circuit notes that the Supreme Court in Pfaff found the Federal Circuit's test to be "unnecessarily vague."  The opinion also notes that its earlier opinions had considered a "sale" that satisfied the first prong to be one "in a commercial law sense," citing Trading Technologies International, Inc. v. eSpeed, Inc., 595 F.3d 1340, 1362 (Fed. Cir. 2010).

The Court began its analysis of the case at bar by stating three points it thinks the opinion clarifies.  First, "the mere sale of manufacturing services by a contract manufacturer to an inventor to create embodiments of a patented product for the inventor does not constitute a "commercial sale' of the invention."  Second, "'stockpiling' by the purchaser of manufacturing services is not improper commercialization under § 102(b)."  Finally, "commercial benefit—even to both parties in a transaction—is not enough to trigger the on-sale bar of § 102(b); the transaction must be one in which the product is 'on sale' in the sense that it is 'commercially marketed.'"  These conclusions are supported in this case by three factors:

(1) only manufacturing services were sold to the inventor—the invention was not; (2) the inventor maintained control of the invention, as shown by the retention of title to the embodiments and the absence of any authorization to Ben Venue to sell the product to others; and (3) "stockpiling," standing alone, does not trigger the on-sale bar.

With regard to the question of whether there was a sale, the Court based its conclusions on what was claimed -- pharmaceutical batches -- and the activities of the parties, which was practice of the disclosed processes by Ben Venue to produce batches of the bivalirudin formulation for TMC.  In evaluating whether product-by-process claims were practiced, the panel cites SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312 (Fed. Cir. 2006), for the proposition that such claims are directed to the product, not the process.  Hospira asserted that Ben Venue practiced the unclaimed method, according to the Court, and while sale of tangible objects can fall within the scope of the UCC "'[a] process, however, is a different kind of invention . . . [and] thus [is] not sold in the same sense as is a tangible item.'"  In this regard the Court reiterated its use of the UCC standards for determining what constitutes a sale.  Sale of Ben Venue's services in preparing bivalirudin was not a sale of the patented pharmaceutical batches under the Court's reasoning, and Ben Venue's actions are analogous to acting as 'a pair of 'laboratory hands'" for TMC.  Under these circumstances there was no "sale" of the invention according to the Court, a conclusion supported by the confidentiality of the transaction, the lack of transfer of title and the small amount paid by TMC to Ben Venue relative to the value of the commercial product.  The Court agreed with Hospira that the UCC should not and does not have "talismanic significance" in deciding whether there was a sale, and stated that it is not drawing a bright line rule on the question.  No one factor or even set of factors is dispositive in the en banc Court's view; rather, the Court apparently considered the totality of the circumstances surrounding the parties' activities in arriving at its conclusion that there was no invalidating commercial sale.

Turning to the question of whether "stockpiling" implicates the on-sale bar, the Court held that it does not, because "commercial benefit generally is not what triggers § 102(b); there must be a commercial sale or offer for sale."  Under Pfaff, the Federal Circuit says the Supreme Court has directed that "we are not to look to broad policy rationales in assessing whether the on-sale bar applies; we are to apply a straightforward two-step process—one which permits an inventor to 'both understand and control the first commercial marketing of his invention.'"  Accordingly:

[T]he mere stockpiling of a patented invention by the purchaser of manufacturing services does not constitute a "commercial sale" under § 102(b).  Stockpiling—or building inventory—is, when not accompanied by an actual sale or offer for sale of the invention, mere pre-commercial activity in preparation for future sale.  This is true regardless of how the stockpiled material is packaged [here, so that the product was ready for commercial marketing].  The on-sale bar is triggered by actual commercial marketing of the invention, not preparation for potential or eventual marketing.  [N]ot every activity that inures some commercial benefit to the inventor can be considered a commercial sale.  Instead, stockpiling by an inventor with the assistance of a contract manufacturer is no more improper than is stockpiling by an inventor in-house.

The opinion characterized TMC's payment to Ben Venue for batches of formulated Angiomax® as "a pre-commercial investment" that should be treated no differently than "a company with in-house manufacturing capabilities" and hence not a violation of the on-sale bar.

Finally, the Court addressed Hospira's allegations that finding no on-sale bar in this case would be inconsistent with several earlier panel decisions, for example, in Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 182 F.3d 888 (Fed. Cir. 1999); Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353 (Fed. Cir. 2001); and Hamilton Beach Brands, Inc. v. Sunbeam Products, 726 F.3d 1370 (Fed. Cir. 2013).  The en banc Court provides several grounds for distinguishing these cases from its opinion here.  But the Court concludes that "to the extent language in those cases might be viewed as dictating a different result here, they are overruled" with the important caveat that the Court is not creating "a blanket 'supplier exception'"; that relationship may be "an important indicator that the transaction is not a commercial sale," but it is not determinative on its own.  For example, "[w]here the supplier has title to the patented product or process, the supplier receives blanket authority to market the product or disclose the process for manufacturing the product to others, or the transaction is a sale of product at full market value, even a transfer of product to the inventor may constitute a commercial sale under § 102(b)."  it is not the identities of the participants but rather the "commercial character of the transaction" that determines whether there has been an offer for a commercial sale according to the Court -- in short, the totality of the circumstances considered in a commercial context.  The Court returned the appeal to the merits panel for its consideration of the other issues raised by the parties.

Any en banc decision by the Federal Circuit is significant, if only because it gives the patent community (and even the Supreme Court) the benefit of the Federal Circuit's special and particular expertise in patent law.  More than a dozen years of being reversed and sometimes chastised by the Supreme Court for its (mis)understanding of the law may have created, at the Court and elsewhere, the false impression that the Federal Circuit has lost this expertise; even respected jurists like Judge Diane Wood of the 7th Circuit has opined that other circuits could make as many mistakes as the Federal Circuit has, as an argument that the Federal Circuit should lose exclusive appellate jurisdiction over patent law.  Recent decisions have hinted that the Federal Circuit may be making an attempt to reassert its earlier patent law preeminence (at least at anything less than the 30,000 foot level commanded by the Supreme Court).  It cannot be anything but good if the Federal Circuit seizes every opportunity it gets to get its patent law mojo back.

The Medicines Company v. Hospira, Inc. (Fed. Cir. 2016) (en banc)
Panel: Chief Judge Prost and Circuit Judges Newman, Lourie, Dyk, Moore, O'Malley, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll
Opinion by Circuit Judge O'Malley

Cubist Pharmaceuticals, Inc. v. Hospira Inc. (Fed. Cir. 2015)

By Kevin E. Noonan --

Mistakes happen; there is even a book, entitled Human Error, that discusses how and why they happen.  The Federal Circuit addressed the consequences of human error (or perhaps more accurately, instances where there was a less-than-perfect understanding of the chemical structure of a claimed invention) in a surprisingly lenient fashion in Cubist Pharmaceuticals, Inc. v. Hospira Inc.  And the reasoning behind that answer harkens back to the time when the technology for determining structure was not as robust as it is now, and when biological molecules comprising chains of amino acids were not routinely defined (and disclosed) by their sequence but rather by how they were isolated or otherwise produced.

The decision arose from ANDA litigation involving daptomycin (sold by Cubist as Cubicin), an antibacterial agent originally developed by Eli Lilly & Co. where the patent on the molecule per se had expired long ago (2002).  There were five patents in suit:  one patent relating to formulations, compositions, and methods of treating bacterial infections (U.S. Patent No. 5,912,226, now U.S. Reissue Patent No. RE39,071); two patents directed to dosage regimens (U.S. Patent Nos. 6,852,689 and 6,468,967); and two patents directed to purification methods for daptomycin compositions (U.S. Patent Nos. 8,058,238 and 8,129,342).

The District Court held all of the claims in four of the patents to be invalid for obviousness (and a smaller subset invalid for anticipation), but found Hospira's proposed generic daptomycin product to infringe claims 18 (directed to a combination of certain forms of the molecule) and 26 (directed to pharmaceutical compositions of the combinations claimed in claim 18) of the '071 reissue patent and that these claims were not invalid.  The claimed combination comprises two daptomycin-related compounds (anhydrodaptomycin and the beta isomer of daptomycin) and a third being daptomycin itself.

The Federal Circuit affirmed in an opinion by Judge Bryson, joined by Judges Wallach and Hughes.  Hospira advanced three arguments on appeal related to its invalidity contentions.  The first was that the U.S. Patent and Trademark Office erred when it issued a certificate of correction concerning the chemical structure of the daptomycin molecule:

The asserted error was in the structure of the L-Asn (L-asparagine) residue on the amino terminal stem as shown in the diagram.  The original specification contained three descriptions of daptomycin as recited in these combinations.  The first was "an A-21978C cyclic peptide," identifying the compound as being prepared from "a group of closely related, acidic peptide antibiotics" that are described in U.S. Patent No. 4,208,403"; these peptides are disclosed as being produced by fermentation of Streptomyces roseosporus.  The second mode of describing daptomycin in the specification was by a code name assigned by Lilly that was known in the art as being specific for daptomycin.  The third way was by the structure shown above, wherein the R^N group at the amino terminus was n-decanoyl.

"As it turns out," as stated in the opinion, this structure is incorrect:  daptomycin comprises D-Asn, not L-Asn.  However, "[a]t the time the application for the '226 patent was filed, and until well after that patent was issued, it was universally believed that the asparagine amino acid in daptomycin was the L-isomer of asparagine, as set forth in the structural diagram," and it was only years afterwards (after the '226 patent was granted and after the '071 reissue patent was filed) that the true stereochemistry of the molecule was discovered.  With regard to the patent, Cubist filed and was granted a Certificate of Correction under 35 U.S.C. § 255.  That provision of the patent statute permits changes "of minor character" that do not broaden the scope of the claims, and Hospira challenged this characterization of the correction.  Hospira supported this argument with expert testimony, to the effect that the molecule comprised of D-Asn was "an entirely different compound" than daptomycin comprising L-Asn (albeit without any reference to the teachings in the '071 patent specification).  Accordingly Hospira argued that the District Court should have construed claims 18 and 26 of the '071 patent as being limited to the L-Asn-containing forms of daptomycin (which their proposed generic formulations would not infringe).  The District Court disagreed, saying that the change was merely to the formula (i.e., the depiction of the compound's structure) and not any change in the compound itself.  The Federal Circuit agreed, citing Regents of Univ. of N.M. v. Knight, 321 F.3d 1111, 1122 (Fed. Cir. 2003), for the proposition that "a chemical structure is 'simply a means of describing a compound; it is not the invention itself'" and further that "the specification as a whole must be considered" not the chemical structure alone.  The crux of this reasoning is set forth in this portion of the opinion:

By reference to a co-pending application (later issued as U.S. Patent No. 4,885,243), the specification teaches that daptomycin is obtained through fermentation of Streptomyces roseosporus.  That fermentation process necessarily results in daptomycin, not the variant with the L-isomer of asparagine.  The evidence at trial established that the L-isomer variant cannot be produced by fermentation and can only be produced synthetically.

The panel also considered the consistent disclosure in the specification identifying daptomycin by its Lilly identification number, and recognized that "it was universally believed that the asparagine amino acid in daptomycin was the L-isomer of asparagine, not the D-isomer" at the time the application was originally filed.  In reaching this conclusion the panel distinguished earlier precedent, including Bayer v. Dow Agrosciences LLC, 728 F.3d 1324 (Fed. Cir. 2013).  The distinction is that here the description in the specification was consistent with the understanding in the art, whereas in Bayer the proposed claim construction was "inconsistent with the 'strong accepted scientific meaning' of the claim language."

Hospira's second argument was that the specification of the '071 patent did not satisfy the written description requirement due to the error in misidentifying the daptomycin structure.  The District Court found that the specification "reasonably conveyed to those skilled in the art that the inventors had possession of the claimed subject matter as of the filing date" as required by the statute under Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc) and the Federal Circuit agreed.  Despite the error in the disclosed structure, "one skilled in the art would have understood that the inventors possessed and were working with the naturally occurring fermentation product, i.e., the daptomycin molecule containing D-asparagine."  The correspondence between the other ways daptomycin was identified in the specification (the Lilly identification code and as being a ""A21978C cyclic peptide") with the product of S. roseosporus fermentation established for the Federal Circuit panel that the skilled worker would have understood the inventors to have been in possession of daptomycin despite the error in chemical structure, citing Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052, 1072 (Fed. Cir. 2005).  And the Court rejected Hospira's assertion that their position was supported by the Court's earlier decision in In re Wallach, 378 F.3d 1330 (Fed. Cir. 2004).  In that case, the inventors were in possession of only 5% of the amino acid sequence of a particular protein (although they were in possession of an isolate of the protein itself) and attempted to use that disclosure to support claims to all nucleic acids encoding the entire protein.  The panel quotes the distinction made in Wallach (and relevant to the broader issues discussed here) that "whether the applicants 'were in possession of the protein says nothing about whether they were in possession of the protein's amino acid sequence'" because there was no evidence that "the full amino acid sequence of a protein can be deduced from a partial sequence and the limited additional physical characteristics" identified and disclosed in the Wallach specification.

Hospira's last argument was that Cubist had violated the "recapture rule" of reissue patents, that a patentee cannot reclaim through reissue what had been relinquished during prosecution in order to obtain an allowance.  Application of the recapture rule requires that the reissued claims were broader than the claims as originally granted (a position the District Court and Federal Circuit rejected with regard to the certificate of correction issue) and that the broadened subject matter had been surrendered during prosecution of the original application.  While this doctrine applies if the reissue claims have been broadened in any way, it does not apply if the claims are narrowed.  Here, the Federal Circuit agreed with the District Court that claims 18 and 26 were narrower than those claims as originally granted and thus that the recapture rule was not violated by these claims.  (In addition, the decision discussed the course of prosecution to the effect that the subject matter in the reissue claims had not been surrendered during prosecution, because any surrender was related to overcoming an indefiniteness rejection and not due to any asserted prior art.)

The Federal Circuit also affirmed the District Court's determination that all of the asserted claims of the other four patents in suit were invalid for obviousness, based in large part on its factual determinations regarding the state of the prior art and on Cubist's failure to provide sufficient evidence of secondary considerations to overcome Hospira's prima facie case.

The Federal Circuit's decision in this case is reminiscent of the days before the biotechnology revolution provided purified proteins as the result of recombinant genetic methods wherein the amino acid sequence of the produced proteins were predicted from the cloned nucleic acids encoding them.  Prior to that, purified proteins were isolated from natural sources (for example, insulin from animal pancreata obtained inter alia from slaughterhouses).  Patent law recognized it to be sufficient for an applicant to disclose a reliable source of the desired protein and methods for isolating it in useful quantities.  (The reader will be spared any discussion here of whether such claims would be patent eligible.)  But a consequence of this regime, mandated by the technology available, was that any "purified" preparation of a protein from a natural source was likely not to be homogeneous.  It is well known that animals in an outbred population will have a plurality of alleles of a gene for almost any protein that have small variances in amino acid sequence.  This population heterogeneity was recognized but not considered relevant to providing a disclosure that supported claims to the isolated protein preparation.  In contrast, producing proteins by recombinant genetic technology imposed a homogeneity on the produced protein product that may by itself be sufficient to distinguish such preparations from preparations made from natural sources.  But it also changed (some would contend, raised) the quanta of disclosure needed to satisfy the written description requirement so that undisclosed sequence differences became relevant to claim validity.

In this decision the Federal Circuit eschewed such sequence-dependent reasoning and relied instead on the totality of what the specification disclosed.  The decision was based in large part on the identity of what S. roseosporus fermentation produced, and the irrelevance (for the panel) of the erroneous structure contained in the specification (and claims).  This isn't a right-or-wrong approach; rather, it relies (as many patents granted in the decades prior to biotechnology did) on identifying a reliable source of a natural product and an assessment of what the specification provided.  Which, even in the biotechnology era, seems a refreshing application of sound patent law.

Cubist Pharmaceuticals, Inc. v. Hospira Inc. (Fed. Cir. 2015)
Panel: Circuit Judges Wallach, Bryson, and Hughes
Opinion by Circuit Judge Bryson

PTAB Update -- PTAB Claim Amendment Practice at the Federal Circuit

Prolitec Inc. v. Scentair Technologies, Inc. (Fed. Cir. 2015)

By Andrew Williams --

In another unsurprising turn, the Federal Circuit affirmed the motion-to-amend practice adopted by the PTAB in IPR proceedings.  The majority opinion in Prolitec Inc. v. Scentair Technologies, Inc., authored by Chief Judge Prost, concluded (among other things) that the Board's approach of shifting the burden to the patentee to show the patentability of claim amendments was reasonable.  Judge Newman, however, was not so approving.  In another scathing dissent, she took the panel majority to task for acquiescing to the Board regarding this burden shift.  "[T]he purpose of [the] post-grant review [system] is not to stack the deck against the patentee, but to achieve a correct and reliable result–for innovative enterprise is founded on the support of a system of patents," she emphasized.  Nevertheless, the PTAB decision in this case to deny the motion to amend and render the claims unpatentable was affirmed.

This case arose from an IPR filed against U.S. Patent 7,712,683 ("the '683 patent") related to cartridges for use with "diffusion devices" -- you know, air freshener dispensers.  The goal of the invention disclosed in the '683 patent was to have the finer mist particles exit the cartridge, while trapping the larger mist particles, turning them into liquid to flow back into the reservoir.  The Board found the two claims of the patent anticipated by WO 2004/0806042 ("Benalikhoudja") and obvious over Benalikhoudja in view of U.S. Patent No. 7,131,603 ("Sakaida"), in large part because of the adopted claim construction.  The patentee appealed.

Claim Construction and Validity

The Board construed three claim terms using its "Broadest Reasonable Construction" standard -- "mounted," "fixed in position," and "second/secondary chamber."  The term "mounted" was used in claims in the following context:  "a diffusion head mounted to the reservoir."  The Board did not construe this term to mean "permanently joined," as Prolitec wanted.  Instead, it concluded that the term meant something less permanent, because the specification apparently stated that the invention could cover reusable cartridges.  Interestingly, both the majority and Judge Newman in dissent cited the passage that "head assembly 604 and reservoir 602 may be jointed to each other by heat or ultrasonic welding spin welding, or by use of an adhesive."  The majority reached the conclusion that because the word "may" was used, the two items could be attached by other means, including those less permanent, while Judge Newman pointed out this sentence only highlighted the permanence of the attachment.  The other two terms were similarly construed contrary to the assertions of the patentee.

After the claims were construed, the anticipation and obviousness of the claims were a forgone conclusion.  For example, Prolitec had argued that Benalikhoudja's fastening of its liquid reservoir using a tamper-proof ring did not satisfy this element because it was not "permanently joined."  But because the claim term was more broadly construed, Benalikhoudja's ring satisfied this claim limitation.  A similar result flowed from the other two construed claim terms.

Judge Newman criticized this outcome.  In a section labeled "The PTAB's claim construction requires judicial review for correctness as a matter of law, not deferential review as a question of fact," she pointed out that "anticipation requires that the same invention was previously known and described, not that a claim can be construed so broadly and incorrectly as to embrace a prior art device."  For example, Judge Newman pointed out that the '683 patent improved on Prolitec's own device, which required a messy procedure to open the reservoir for refilling, resulting in leakage, inconsistent scent concentration, and cross-contamination.  It did not make sense, according to her, to construe the claim terms so broadly that they would read on (for example) a device which was not permanently sealed.  But, because BRI was used, all of the enlarged claim terms in turn could be found in prior art.  Judge Newman disagreed:  "Anticipation requires that the same invention was previously known; it is apparent from the specification that the PTAB's analysis is not correct."

Motions to Amend

As suggested above, Judge Newman's biggest complaint about the Court's ruling in this case was the approval of the Motion-to-Amend practice of the Board.  The majority simply followed, and indeed felt compelled to follow, the Microsoft Corp. v. Proxyconn, Inc. case in which the practice was already approved (see "Microsoft Corporation v. Proxyconn, Inc. (Fed. Cir. 2015)").  In fact, the Court noted that the Board had issued a "representative" decision after the Proxyconn case.  In MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040 (PTAB July 15, 2015), the Board apparently relaxed the burden on the patentee in Motions to Amend.  Instead of requiring the patentee to identify how its claim amendments are patentable over all prior art, it only had to show patentability over the "prior art of record," which could include "any material art in the prosecution history of the patent."

In the present case, Prolitec sought to amend the term "mounted" to "permanently joined."  The resulting denial of the motion exemplifies why the PTO's use of the BRI standard might not make sense -- one of the main justifications for using the standard is that the Patent Owner has the ability to amend the claims to narrow the scope.  However, as this case demonstrates, in IPRs the Patent Owner doesn't necessarily have that right.  The Board denied the motion in view of the Allred reference.  Allred apparently taught a device that was permanently joined, although the other claim limitations were missing.  Nevertheless, the Board found that Allred (cited during prosecution) could be combined with Benalikhoudja (the main IPR reference), and both references were already of record in this case.  The Federal Circuit affirmed the denial because Prolitec did not adequately support its assertion of patentability over Allred and Benalikhoudja.

Judge Newman made at least four points regarding this denial.  First, she thought the PTO erred in refusing to enter the substitute claim.  The America Invents Act limits the reasons that a motion can be denied, according to her understanding of the statute.  These include when the amendment does not respond to a ground of unpatentability involved in the trial and when the amendment enlarges the scope of the claims.  Neither of these existed in this case.  According to Judge Newman "[w]hen a proposed amendment would resolve a dispositive aspect of claim breadth, refusal to enter the amendment is contrary to both the purpose and the text of the America Invents Act."

Second, Judge Newman complained that the placement of burden of proof for claim amendments on the patentee is contrary to the statute.  This criticism stems from the fact that the PTAB proceedings were intended to be a surrogate for a district court.  The obvious flaw with this argument is that claims cannot be amended in district court.

Third, Judge Newman stated that "[t]he preponderance of the evidence is the statutory standard for PTAB validity decision," and the Federal Circuit should review cases to determine whether this standard has been applied correctly.  The Court has been using the "substantial evidence" standard to conduct these reviews.  Judge Newman believes that this standard is insufficient to review whether the PTAB's decisions meet its "preponderance of the evidence" standard.

Finally, Judge Newman complained that Prolitec should have been entitled to the benefit of PTO interpretations and changes in practice.  It appears that since the time the Board handed down the Final Written Decision in this case, the rules of practice have changed.  This includes a "quick fix" that was implemented back in March, and the MasterImage 3D case referenced above.  The majority pointed out that the changes were irrelevant in this case because the two reference cited in denial were prior art of record in the case.  Judge Newman wasn't having it, though, pointing out in a footnote that the MasterImage 3D decision was only designated "representative," and even Idle Free was only designated "informative" and therefore not binding on all PTAB panels.  This error or uncertainty was sufficient for her to call for remand for reconsideration of the denial.

Prolitec Inc. v. Scentair Technologies, Inc. (Fed. Cir. 2015)
Panel: Chief Judge Prost and Circuit Judges Newman and Taranto
Opinion by Chief Judge Prost; dissenting opinion by Curcuit Judge Newman

Trustees of Columbia University v. Illumina, Inc. (Fed Cir. 2015)

By Andrew Williams --

One of the first IPR petitions ever filed, IPR2012-0006, was related to biotechnology -- specifically DNA sequencing.  Illumina, Inc. filed that petition, and two others, IPR2012-00007 and IPR2013-00011, against patents owned by The Trustees of Columbia University in the City of New York ("Columbia").  The PTAB issued its Final Written Decisions in early 2014, canceling all of the challenged claims, which we reported at the time (see "IPR Update -- The First Biotech IPR Decisions").  The Federal Circuit just recently concluded its review of these cases, affirming the decision of the Board.  The clear take away message from this decision is that anyone wanting to challenge a PTAB decision is likely going to face an uphill battle.  Even though the Court did write an opinion in this case, albeit non-precedential, the expectation is that the majority of IPR reviews appealed to the Federal Circuit will end in Rule 36 affirmances.  It is possible that the extreme deference that the Court appears to be showing the Patent Office could be a direct result of the deluge of cases that are anticipated for the next couple of years (if not longer).  Perhaps by signaling the uphill nature of these appeals, the Court may be attempting to discourage a perfunctory appeal in every case. Or, they may be setting the stage to make the Rule 36 judgements easier to issue.  Of course, there is another possible explanation.  It is conceivable that the first few petitions filed were really strong and/or were filed against low-hanging fruit.  As stronger patents get challenged, the PTAB may find themselves faced with closer cases, which may result in an increase in reversals or remands issued by the Federal Circuit.  Only time will tell.

In our previous review of the PTAB decisions, we provided a detailed explanation of the technology in this case.  Briefly, nucleotide analogues for use in sequencing by synthesis were at issue, which is a technique of sequencing by which every added nucleotide is determined using a label, such as a fluorescently detectable label.  Basically, this technology involves incorporating a labeled nucleotide analogue into a primer strand using DNA polymerase, in a manner comparable to that used when a DNA strand is synthesized.  Normally, when a DNA strand is synthesized, the 5' position of the sugar in a new incoming nucleotide is linked to the 3'-OH group of the sugar of a preexisting nucleotide in the strand under synthesis.  The difference in this sequencing technique, though, is that the newly incorporated nucleotide analogues have cleavable chemical groups capping the 3'-OH to prevent the incorporation of any successive nucleotides before the identity of the nucleotide analogue is determined. This nucleotide is identified with a detectable label attached to the nucleotide, with a unique label used for each base (A, C, G, or T).  In order to sequence an entire region of DNA, the 3'-OH cap is cleaved and the process repeated step-wise until the entire sequence is deduced.

Columbia scientists purported to invent particular nucleotide analogues utilized by this technique.  Specifically, the analogues have the detectable label attached to the base instead of the 3'-OH group, they have a cleavable chemical group capping the 3'-OH group, and at least some of the claims require the use of a deaza-substituted base, such as 7-deazapurine (a deazabase is one in which a natural nitrogen atom in the base ring is substituted with a carbon atom).  The opinion included an example of such a nucleotide analogue from Colombia's briefing:

Representative claims of the patents-at-issue, with the emphasis as added by the Federal Circuit noted, include:  Patent No. 7,713,698, claims 1 and 11:

1.  A method of determining the identity of a nucleotide analogue incorporated into a nucleic acid primer extension strand, comprising:
    a) contacting a nucleic acid template attached to a solid surface with a nucleic acid primer which hybridizes to the template;
    b) simultaneously contacting the product of step a) with a polymerase and four nucleotide analogues which are either (i) aA, aC, aG, and aT, or (ii) aA, aC, aG, and aU, so as to incorporate one of the nucleotide analogues onto the nucleic acid primer and form a nucleic acid primer extension strand, wherein each nucleotide analogue within (i) or (ii) comprises a base labeled with a unique label and contains a removable chemical moiety capping the 3'-OH group of the sugar of the nucleotide analogue, and wherein at least one of the four nucleotide analogues within (i) or (ii) is deaza-substituted; and
    c) detecting the unique label of the incorporated nucleotide analogue, so as to thereby determine the identity of the nucleotide analogue incorporated into the nucleic acid primer extension strand.

11.  A plurality of nucleic acid templates immobilized on a solid surface, wherein a nucleic acid primer is hybridized to such nucleic acid templates each such nucleic acid primer comprising a labeled incorporated nucleotide analogue, at least one of which is deaza-substituted, wherein each labeled nucleotide analogue comprises a base labeled with a unique label and contains a removable chemical moiety capping the 3'-OH group of the sugar of the nucleotide analogue.

Patent No. 7,790,869, claims 12 and 15:

12.  A nucleotide having a base that is attached to a detectable label through a cleavable linker, wherein the nucleotide has a deoxyribose comprising a cleavable chemical group capping the 3' OH group, wherein the cleavable linker is cleaved by a means selected from the group consisting of one or more of a physical means, a chemical means, a physical chemical means, heat, and light, and wherein the cleavable chemical group capping the 3' OH group is cleaved by a means selected from the group consisting of one or more of a physical means, a chemical means, a physical chemical means, heat, and light.

15.  The nucleotide of claim 12, wherein the base is a deazapurine.

And Patent No. 8,088,575, claims 1 and 6:

1.  A method of determining the identity of a nucleotide analogue incorporated into a nucleic acid primer extension strand, comprising: a) contacting a nucleic acid template attached to a solid surface with a nucleic acid primer which hybridizes to the template; b) simultaneously contacting the product of step a) with a polymerase and four nucleotide analogues which are either (i) aA, aC, aG, and aT, or (ii) aA, aC, aG, and aU, so as to incorporate one of the nucleotide analogues onto the nucleic acid primer and form a nucleic acid primer extension strand, wherein each nucleotide analogue within (i) or (ii) comprises a base labeled with a unique label and contains a small removable chemical moiety capping the 3'-OH group of the sugar of the nucleotide analogue, wherein said small cleavable chemical group does not interfere with the recognition of the nucleotide analogue by polymerase as a substrate; and c) detecting the unique label of the incorporated nucleotide analogue, so as to thereby determine the identity of the nucleotide analogue incorporated into the nucleic acid primer extension strand.

6.  The method of claim 1, wherein said base of at least one of said nucleotide analogues is a deazapurine.

The PTAB's Failure to Resolve PHOSITA's Qualifications

The first allegation by Columbia addressed by the Federal Circuit was whether the PTAB erred because it did not resolve what the qualifications would be of a person having ordinary skill in the art.  Columbia's expert asserted that a PHOSITA would have been skilled in "both biology and synthetic nucleotide chemistry," while Illumina's expert's definition did not include any mention of chemistry.  The challenge was that Illumina's expert did not possess the qualifications of a PHOSITA, and therefore was unqualified to opine.

The Court explained that failure to make explicit finding regarding the level of skill in the art is not necessarily reversible error.  Moreover, it is normally easier to establish obviousness with a higher level of skill.  Thus, because the PTAB found the claim obvious regardless of whether a PHOSITA was skilled in chemistry, it follows that someone with that additional skill would have found the claims at least as obvious (if not more so).  And, because the PTAB found Illumina's expert's qualifications sufficient, its credibility determination was not reversible error.

Prior Art Disclosures

The Court next considered whether the prior art contained all of the limitations of challenged claims: (1) a labeled base, (2) a removable 3'-OH cap, and (3) a deaza-substituted base.  The cited art was detailed in our previous post, as mentioned above.  The primary reference, WO 91/06678 ("Tsien"), purportedly described the DNS sequencing by synthesis method, and therefore was a starting point for many of the rejections of the relevant claims.  Tsien disclosed unique labels attached to a base, and a removable 3'-OH chemical moiety (capping group).  Columbia argued that even though a cleavable label attached to a base might have been disclosed, it did not teach such a label with a cleavable tether.  The Board, however, found that because Tsien disclosed these two concepts in adjacent paragraphs, one skilled in the art would have recognized the utility of such a tether.  The Board also cited two additional references, Dower and Stemple, as disclosing base-labeled nucleotides that contain 3'-OH moieties.  The Federal Circuit found there was substantial evidence for the finding that the prior art disclosed "nucleotides with a label on the nucleotide base with a removable 3'-OH group," and "a cleavable tether to release the label" from the base.

Motivation to Combine

Columbia also argued that the PTAB erred in concluding that a person of skill in the art would have combined the above-referenced teachings with a 7-deazapurine nucleotide.  Tsien did reference another article, Prober.  And, Prober did disclose the labeling of purines.  However, Columbia asserted that Tsien only cited Prober for the proposition that purines could be labeled.  As such, the argument went, there was no motivation to combine.

The PTAB had found an express teaching of incorporating a 3'-blocked dNTP having a fluorescent label in the Prober reference.  Moreover, the Federal Circuit pointed out, the motivation to combine can be found even in the absence of an explicit mention of the one reference in the other.  This case was even stronger because Tsien pointed directly to Prober, even if not the specific section of Prober.  The Court found that the PTAB's finding was supported by substantial evidence.

Reasonable Expectation of Success

Columbia also argued that the chemistry for creating the claimed nucleotide analogues was complex, and that therefore there would not be a reasonable expectation of success.  However, even Columbia's expert admitted that the synthetic process would have been easily understood by one skilled in the art.  Therefore, the Federal Circuit found substantial evidence supporting the PTAB's finding regarding the expectation.

Secondary Considerations

The Court next considered the Board's analysis of the secondary considerations of non-obviousness.

• Simultaneous Invention weighs modestly in favor of obviousness

Not quite a consideration of non-obviousness, the near simultaneous invention by two other companies, Solexa (a predecessor of Illumina) and Amersham counseled that the invention was obvious.  Columbia argued that these "inventions" were not prior art, but the Court pointed out that they do not need to be for this consideration.  In fact, if they were, they would have been considered under §§ 102 and 103.

• Copying does not favor nonobviousness

Columbia asserted that Manteia, a company whose intellectual property was acquired by Solexa, copied the invention.  However, the Board did not make a specific factual finding regarding whether the invention was copied.  Nevertheless, the Court did find that simultaneous invention can weigh in favor of obviousness, but only does so modestly in this case.

• Attempted Licensing weights modestly in favor of nonobviousness.

Columbia also points to Illumina's attempts to license the technology.  However, the Court found that none of the correspondence specifically mentioned the patents at issue.  Therefore, at best, this was only modest evidence of nonobviousness.

• Commercial Success does not favor nonobviousness

Columbia alleged that Illumina had significant sales of technology covered by the patents at issue.  However, Illumina pointed out, and the Court agreed, that all of the features proclaimed by Columbia to be responsible for the success of the products could be found in the prior art Tsien reference.  Moreover, the fact that Columbia was relying on Illumina's sales complicated the matter, because the Court could not separate out potential simultaneous invention or copying.

• Unexpected Results do not favor nonobviousness

Finally, Columbia asserted that the claimed nucleotides were "unexpectedly" better than pyrosequencing.  The PTAB dismissed this argument because pyrosequencing was not the closet prior art, and therefore was not probative to the determination of nonobviousness.  The Federal Circuit agreed.

Anticipation

The Board has also found that certain claims were anticipated by Tsien, and other references independently.  Columbia argued that these references were non-enabling, and did not disclose all of the elements.  Tsien was described as teaching a genus, but not the specific claimed species.  However, the Court pointed out that when a genus is small enough, such that all members can be envisaged, a genus anticipates every species within the genus.  Also, the Court noted that the patents at issue also do not disclose the chemistry required to practice the invention, which suggests that the chemistry required was not novel or nonobvious.  Finally, the Court held that the PTAB did not abuse its discretion in denying Columbia's motion to amend.

Trustees of Columbia University v. Illumina, Inc. (Fed Cir. 2015)
Panel: Chief Judge Prost and Circuit Judges Schall and Wallach
Opinion by Circuit Judge Wallach

PTAB Decides Inter Partes Review of Patent at Issue in Ariosa v. Sequenom

By Kevin E. Noonan --

On September 2nd, the Patent Trial and Appeals Board (PTAB) entered judgment in an inter partes review styled Ariosa Diagnostics v. Isis Innovation Ltd. (IPR 2012-00022).  The Board found that Ariosa demonstrated, by a preponderance of the evidence of record, that claims 1, 2, 4, 5, 8, 19, 20, 24, and 25 of U.S. Patent No. 6,258,540 are unpatentable under 35 U.S.C. § 102(b).  But the Board found that Ariosa did not carry its burden of showing by a preponderance of the evidence that claims 3, 12, 13, 15, 18, 21, and 22 of the '540 patent were unpatentable under 35 US.C. § 103(a).

The claims under inter partes review are as follows:

1.  A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
    amplifying a paternally inherited nucleic acid from the serum or plasma sample and
    detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

2. The method according to claim 1, wherein the foetal nucleic acid is amplified by the polymerase chain reaction.

3. The method according to claim 2, wherein at least one foetal sequence specific oligonucleotide primer is used in the amplification.

4. The method according to claim 1, wherein the foetal nucleic acid is detected by means of a sequence specific probe.

5. The method according to claim 1, wherein the presence of a foetal nucleic acid sequence from the Y chromosome is detected.

8. The method according to claim 1, wherein the presence of a foetal nucleic acid from a paternally-inherited non-Y chromosome is detected.

12. The method according to claim 5, for determining the sex of the foetus.

13. The method according to claim 5, which comprises determining the concentration of the foetal nucleic acid sequence in the maternal serum or plasma.

15. The method according to claim 13, for the detection of a maternal or foetal condition in which the level of foetal DNA in the maternal serum or plasma is higher or lower than normal.

18. The method according to claim 13, for detection of a foetal chromosomal aneuploidy.

19. The method according to claim 1, wherein the sample contains foetal DNA at a fractional concentration of total DNA of at least about 0.14%, without subjecting it to a foetal DNA enrichment step.

20. The method according to claim 19, wherein the fractional concentration of foetal DNA is at least about 0.39%.

21. A method of performing a prenatal diagnosis, which method comprises the steps of:
    (i) providing a maternal blood sample;
    (ii) separating the sample into a cellular and a non-cellular fraction;
    (iii) detecting the presence of a nucleic acid of foetal origin in the non-cellular fraction according to the method of claim 1;
    (iv) providing a diagnosis based on the presence and/or quantity and/or sequence of the foetal nucleic acid.

22. The method according to claim 21, wherein the non-cellular fraction as used in step (iii) is a plasma fraction.

24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:
    removing all or substantially all nucleated and anucleated cell populations from the blood sample,
    amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the Paternally inherited fetal nucleic acid.

25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises
    obtaining a non-cellular fraction of the blood sample
    amplifying a paternally inherited nucleic acid from the non-cellular fraction
    and performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

(Italics indicating claims found unpatentable by the PTAB.)

The decision provided the following synopsis of the asserted grounds of unpatentability:

wherein the cited references are:

• Lo et al., Presence of Fetal DNA in Maternal Plasma and Serum, 350 LANCET 485–487 (1997).

• Simpson et al., Isolating Fetal Cells in Maternal Circulation for Prenatal Diagnosis, 14 PRENATAL DIAGNOSIS 1229–1242 (1994).

• Kazakov et al., Extracellular DNA in the Blood of Pregnant Women, 37(3) CYTOLOGY (TSITOLOGIA) 232–236 (1995).

• Bianchi et al., Fetal Cells in Maternal Blood: Determination of Purity and Yield by Quantitative Polymerase Chain Reaction, 171 AM. J. OBST.GYNECOL. 922–26 (1994).

• Schallhammer et al., Phenotypic Comparison of Natural Killer Cells from Peripheral Blood and from Early Pregnancy Decidua, 3 EARLYPREGNANCY: BIOLOGY AND MEDICINE 15–22 (1997).

The decision noted that Ariosa abandoned at oral argument its first two grounds of unpatentability set forth above.

Arriving at its bases for deciding the questions before it, the Board reiterated its decision (as set forth in its Decision on Petition) rejecting Isis's arguments that Ariosa lacked standing under § 315 to petition for inter partes review based on the litigation between the parties.  Specifically, the Board addressed Isis's contention that "it 'is of no moment'" that Ariosa raised its validity challenge as an affirmative defense (in the face of Isis's infringement allegations prompted by Ariosa's declaratory judgment action for judgment of non-infringement).  Isis also argued unsuccessfully that the exception under § 315(a)(3) does not apply because Isis (and its licensee, Sequenom) did not initiate the civil action.  Finally, Isis argued (again unsuccessfully) that granting Ariosa's petition for inter partes review would "thwart the intent of Congress," inter alia, by permitting "patent owner harassment."  For clarity, the Board set forth the precise question decided in granting Ariosa's petition:

[W]hether filing a Declaratory Judgment of non-infringement in District Court bars Ariosa from later filing a petition for Inter Partes Review under 35 U.S.C. § 315(a), and whether the express mention of a counterclaim of invalidity in 35 U.S.C. § 315(a)(3) mandates interpreting the statute such that raising an affirmative defense of invalidity in response to a compulsory counterclaim of infringement deprives Ariosa of standing to file for inter partes review.

The Board's decision to grant Ariosa's petition was based on its determination that the plain meaning of the statute, as interpreted by the definitions of "filing" and "a civil action" provided by the Federal Rules of Civil Procedure, is that the bar arises when a petitioner has filed a complaint prior to filing the inter partes review petition.  The Board also distinguished between raising an affirmative defense and filing a counterclaim, based on its understanding of the differences defined by the Supreme Court in Altvater v. Freeman, 319 U.S. 359 (1943).  In that case, the Court decided that a counterclaim is "justiciable" even in the face of a determination of non-infringement, while an affirmative defense of invalidity under similar circumstances would be to "decide a hypothetical case."  Citing Cardinal Chem. Co. v. Morton Int'l, Inc., 508 U.S. 83 (1993), the Board decided that "it is clear []that there is a fundamental difference between an affirmative defense of invalidity and a counterclaim of invalidity," and thus that the declaratory judgment of non-infringement by Ariosa in this case did not fall within the activities the statute provides would bar the grant of the inter partes review petition.

The Board also rejected Isis's contention that § 315(b) barred grant of the petition because Isis had filed its infringement lawsuit more than a year before filing the inter partes review petition, because the infringement complaint had been dismissed without prejudice, citing the Board's prior decision to this effect in Macauto U.S.A. v. BOS GmbH & KG, Case IPR2012-00004 (PTAB January 24, 2013).

In the last of the procedural issues discussed in the decision, the Board rejected Isis's contention that granting Ariosa's Motion for Joinder (of two separate inter partes actions against different combinations of claims) was improper (despite the statutory language being limited to joinder of parties; § 315(c)) based on its practice in prior proceedings permitting such joinder, including Microsoft Corp. v. Proxycann, Inc., Case IPR2013-00109 (PTAB February 25, 2013), and Samsung Elecs. Co., Ltd. v. Virginia Innovation Scis., Inc., Case IPR2014-00557 (PTAB June 13,2014).  The Board found no prohibition of issue joinder in either the statutory language or the legislative history, and relied on its rules (37 CFR § 42.1(b)) implementing § 316, specifying that "[t]he rules are to be construed so as to ensure the just, speedy, and inexpensive resolution of a proceeding."

Turning to the merits of Ariosa's invalidity contentions, the Board construed the claim term "detecting."  In doing so, the Board made the following claim construction determination applying the "broadest reasonable interpretation" standard under 37 C.F.R. § 42.100(b):

"detecting" means that the amplified DNA was detected, but not that such DNA be identified as being of paternal or fetal origin.

This construction, according to the Board, is consistent with the construction used by Isis's expert at trial, and further that in the context of the claims Isis could have limited what was detected to paternal and fetal DNA by stating that "only" this DNA was detected (but, says the Board, "they chose not to do so," implying a decision point that there is no evidence Isis ever encountered).  While the Board relies on claim construction canons (such as not reading limitations from the specification into the claims), it is incongruous that the Board rendered this construction decision (which is dispositive; see below) in interpreting the scope and meaning of claims specifically directed towards detecting paternal or fetal DNA in pregnant female blood.

With this construction established, the decision turned to the cited references.  Regarding the Kazkov reference, asserted against claims 1, 2, 4, 5, 8, 19, 20, 24 and 25, the Board found that the practice of the methods disclosed in the reference inherently anticipated these claims, because amplification of DNA from maternal blood would necessarily detect "paternally inherited nucleic acid of fetal origin."  Specifically, the Board found that the reference taught that:  1) extracellular DNA is present in human blood; 2) the amount of this DNA increases with pregnancy; 3) this DNA was detected using PCR; 4) the amplified DNA was detected (using gel electrophoresis); and 5) the primers Kazakov used would have detected paternal DNA (insofar as the primers amplified sequences present (albeit not exclusively) on the Y chromosome).

Under the Board's construction, "Kazakov discloses the same method of claim 1."  The Board stated that "all that is required by the amplification step of claim 1 is a step of amplifying nucleic acid from a serum or plasma sample from a pregnant female, such as by PCR, as such amplified nucleic acid would necessarily include fetal nucleic acid, and the fetal nucleic acid necessarily includes paternally inherited nucleic acid," so long as "the detecting step does not require that the detected nucleic acid specifically be identified as being inherited from the father or even as being from the fetus, only that it be identified as containing some level of nucleic acid, which would include, necessarily, nucleic acid from the fetus that was inherited from the father."  The Board further reasoned that:

[I]f the ordinary artisan were to follow the teachings of Kazakov, and perform PCR on the serum obtained from the blood obtained from a pregnant female, that blood would inherently contain paternally inherited fetal nucleic acid.  That nucleic acid would be amplified and detected by the experiments of Kazakov as such a result is necessarily inherent.  That is, the amplification and detection of paternally inherited fetal nucleic acid would be a new benefit of a known process.

The Board further "credited" the testimony of Ariosa's expert, that the methods disclosed in Kazakov were all "conventional," although there is no discussion on the significance of these findings to the Board's decision.  And Isis's arguments that the possibility that fetal or paternal DNA would not be detected received no traction with the Board in refuting its inherent anticipation determination (which is not surprising, because the Board's error was in claim construction not the application of the facts to the incorrectly construed claims).

Having made this determination regarding claim 1, the Board did not find (and in some cases Isis did not provide) any basis for the same reasoning not to be applied to claims 2, 4, 5, 8, 19, 20, 24, and 25, and thus found these claims to also be inherently anticipated by the Kazakov reference.

Regarding obviousness, the Board held that Ariosa had not borne its burden of establishing invalidity by a preponderance of the evidence.  Limiting its considerations to the combination of the Kazakov and Simpson references, the Board found that the Simpson reference taught detection of fetal cells, not fetal cell-derived DNA in maternal whole blood, and that the art taught that detecting fetal cells in maternal blood was "a rare occurrence."  Under these circumstances, the Board found that:

[T]he ordinary artisan would not have used the serum sample of Kazakov, which is a cell-free sample, for the whole blood sample of Simpson, which contains the cellular fraction, for the analysis of fetal DNA as taught by Simpson.  The ordinary artisan would not have had a reasonable expectation that the fetal DNA would have been present in maternal serum in sufficient quantities for detection using amplification methods such as PCR given the understanding in the art that fetal cells were a rare occurrence in maternal blood.  Moreover, Kazakov's lack of teaching that the increase in extracellular DNA in the serum of pregnant females is due to the presence of cell-free fetal DNA in the serum further supports that conclusion.

Ironically, the Board's decision on obviousness relies on the failure of the art to recognize that fetal or paternal DNA could be detected in maternal blood, a distinction that the Board did not credit in its claim construction leading to its contrary decision regarding (inherent) anticipation by the Kazakov reference.

The Board also rejected Ariosa's obviousness contentions based in the combination of the Kazakov, Simpson, Schallhammer (earlier determined by the Board to be cumulative over the teachings of the Simpson reference) and Bianchi references (wherein Bianchi taught Y-chromosome specific primers), based on the same lack of expectation that fetal cells (or their DNA) would be expected by the skilled artisan to be present in maternal blood.

The Board also denied Isis's motion to amend its claims, once again rendering a decision that contradicts the rationale for construing claims according to the broadest reasonable interpretation of its terms (i.e., that when before the PTO the patentee can amend her claims).  The proposed amended claims are as follows, and were proposed to overcome the Board's broad construction of the term "detected" in the patented claims:

28.  A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
    amplifying a paternally inherited nucleic acid from the serum or plasma sample, and
    detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample by determining that the paternally inherited fetal nucleic acid contains a sequence not possessed by the pregnant female.

31.  A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
    amplifying a paternally inherited nucleic acid from the serum or plasma sample, [and]
    detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample by determining that the paternally inherited nucleic acid of fetal origin contains a sequence not possessed by the pregnant female,
and
determining fetal sex, fetal chromosomal aneuploidy, fetal mutation, fetal RhD status, or fetal paternally-inherited DNA polymorphism.

In a Kafka-esque fashion, the Board denied the motion because the patentee is under a burden of showing she is "entitled" to the "relief" of amending claims, and the burden imposed is to establish that the claims are patentable under all sections of the Patent Act.  Even though inter partes review is limited to the issues of anticipation and obviousness based on prior art, the Board permits a challenge on the patentability of amended claims on all the statutory sections.  Here, citing the District Court's decision (and in the face of the pending Federal Circuit appeal), the Board determined that Isis had failed to carry its burden of showing that the proposed amended claims are patent-eligible under § 101.

PTAB recognized that claims 1, 2, 4, 5, 8, 19–22, 24, and 25 of the '540 patent were declared invalid in Ariosa Diagnostics v. Sequenom.  With the exception of claim 21, this outcome suggests that Ariosa could have invalidated the claims in the district court under § 102(b) and done much less violence to the patent system in doing so.  It also raises the possibility that Sequenom may move the Federal Circuit to vacate the District Court's judgment based on § 101 in view of the Office's determination that the claims are invalid under § 102(b).

The Board's decision provides Isis with another opportunity to appeal to the Federal Circuit, this time on the PTAB's decision invalidating these claims.  Assuming that the Court reverses the District Court on the patent eligibility issue, the Board has provided for review by the Court with issues of claim construction as well as procedural questions decided by the Board in instituting the petition in the first place.

Allergan, Inc. v. Apotex, Inc. (Fed. Cir. 2014)

By Michael Greenfield --

In a not particularly well-written opinion that breaks no new ground, the Federal Circuit considered a consolidated appeal of two patents directed to methods of promoting hair growth, including, in particular, eyelash hair growth using compounds and analogs that were previously known for their utility in treating glaucoma.

Allergan had asserted its 7,351,404 patent (the '404 patent) and Duke asserted its 7,388,029 patent (the '029 patent) after Apotex filed an ANDA for a generic version of Allergan's Latisse®, an ophthalmic solution comprising bimatoprost (a prostaglandin F-2-alpha ("PGF") analog) as the active ingredient.  The District Court had held the asserted patents were not invalid and were infringed, but in an opinion issued June 10, 2014, a split panel vacated and reversed.  The appeal included an issue of claim construction, the Court once again delving the depths of the meaning of the word "and," as well as issues of anticipation and obviousness.

The two patents claimed uses of PGF analogs for promoting hair growth, generally, and eyelashes, in particular.  The work that led to Duke's '029 patent arose from research into the effects of a wide range of prostaglandins on mice.  The inventors discovered that PGF analogs specific for the FP receptor promoted growth of longer and thicker hair, and they filed the application directed to a method of treating hair loss.

The subject matter of the '404 patent arose from clinical studies of the glaucoma drug Lumigan® (identical to Allergan's Latisse®).  The inventors observed that glaucoma patients treated with Lumigan® spontaneously grew longer and thicker eyelash hair.  They filed their patent application directed to treatment of eyelash hair loss through topical administration of the PGF analog bimatoprost.

Claim construction

The claim construction issue involved the meaning of the '029 patent's claims to methods of "treating hair loss."  The parties agreed that the term was to be construed as expressly defined in the specification:  "'Treating hair loss' includes arresting hair loss or reversing hair loss, or both, and promoting hair growth."  Apotex contended that the use of the conjunction "and" in the definition of "treating hair loss" required both (a) arresting or reversing hair loss and (b) promoting hair growth, whereas Allergan contended that term required only (a) arresting or reversing hair loss or (b) promoting hair growth.  Under Apotex's construction, its generic version of Latisse® would not infringe the claims because Latisse® lengthened, thickened, and darkened existing healthy hair (which they contended meant only promoting hair growth) but did not arrest or reverse hair loss.

By contrast, Allergan contended, and the District Court agreed, that by use of the word "includes" in the definition of "treating hair loss," the patentee plainly meant to encompass any one or more of preventing hair loss, arresting hair loss, and promoting hair growth but not necessarily all simultaneously.  This interpretation was further bolstered by examples in the specification demonstrating several aspects of hair growth promotion without accompanying arresting or preventing hair loss.  The panel affirmed the District Court's decision.

The '029 patent

Anticipation

Apotex contended that two prior art publications anticipated the '029 patent:

(1) Johnstone PCT/US98/02289 application ("Johnstone")

Johnstone disclosed methods of stimulating hair growth using analogs of PGF,

in which the α-chain was of the form

The '029 patent claims expressly disclaimed the Johnstone compounds, but Apotex asserted that Johnstone anticipated nevertheless because Johnstone stated that α-chain could be unsaturated (as shown above) or saturated (i.e., wherein the double bond shown above is a single bond).  So, Apotex argued that because the '029 patent claims also encompassed the use of PGF analogs in which the α-chain was saturated (the saturated compounds not having been disclaimed), Johnstone anticipated.

But the District Court agreed with Duke that Johnstone was insufficiently specific with respect to PGF analogs with saturated α-chains.  The District Court held that in view of the state of the art, the ordinary artisan would not have read Johnstone as disclosing the single-bonded structures because the evidence showed that such structures would not have been thought to have a therapeutic effect because they would selectively bind the FP receptor.  The District Court further noted the examiner's statement that Johnstone "lacks motivation to modify the prostaglandins taught therein in order to obtain the presently claimed prostaglandins."

Another argument (that wasn't made) might have been that Johnstone failed to expressly teach any particular compound that anticipated the asserted claims but, instead, taught a genus of compounds in which the members of the genus were not so few that the ordinary artisan could have immediately envisioned them.  Indeed, the dissent, which agreed with the majority on this issue, noted that Jonstone's teachings amounted to a laundry list comprising thousands or even millions of variations.

Following its reasoning, the Federal Circuit panel held that the District Court's reasoning was not clearly erroneous.

(2) The '819 patent

The '819 patent (an Allergan patent) taught a method of treating glaucoma comprising administering selective PGF analogs (including bimatoprost).  Although the '819 patent was silent with respect to any sort of hair growth, hair loss, or topical administration, the issue was whether the '819 patent nevertheless anticipated the claims as inherently teaching the treatment of hair loss.

To cut to the chase, the District Court held that the evidence demonstrated that although it was possible that administration of eye drops according to the '819 patent could have resulted in transfer of some liquid to the adjacent eyelid skin, such transfer would not necessarily occur.  Therefore, because an inherent limitation must necessarily be present to anticipate, the '819 did not anticipate the '029 claims.

Obviousness

The District Court held that the '029 claims were not invalid as obvious over the combination of Johnstone and the '819 patent because, the Court reasoned, the ordinary artisan wouldn't have combined the teachings of the two.  Although the compounds of the two patents shared the unsaturated α-chain and the were effective in treating glaucoma, the compounds of the '819 patent comprised terminal amide groups on the α-chain (e.g., bimatoprost, which has a terminal ethyl amide moiety) whereas Johnstone's compounds comprised an ester or carboxylic acid at that position.  And, furthermore, the '819 compounds were thought to bind to a receptor other than the FP receptor.

The majority disagreed, noting that the '029 patent claims were not limited to compounds having an α-chain amide moiety but included compounds having a variety of moieties at the terminal position of the α-chain, including esters and carboxylic acids.  The majority found this problematic because for patentability purposes inventors had relied on the fact that the amide-containing PGF analogs bind to a variant of the FP receptor.  But ester- and carboxylic acid-containing PGF analogs within the scope of the claims do not, and the majority faulted the District Court for not considering the issue of obviousness with respect to the full scope of the claims.  Similarly, the majority faulted the District Court for not considering the secondary indicia of obviousness (unexpected results) for the full scope of the claims.

And the majority further criticized the District Court for overlooking teachings in Johnstone, which was "replete" with references to the advantages of PGF compounds (including those with carboxylic acid and ester moieties) failing within the scope of the '029 patent claims, including specific guidance as to the parameters that would lead to a reasonable expectation of success.

The majority concluded that Johnstone provided adequate teachings in conjunction with the '819 patent to guide the ordinary artisan to the claimed methods with a reasonable expectation of success.  Therefore, the District Court's finding that the '029 patent claims were non-obvious was vacated and reversed.

The '404 patent

One issue that arose with respect to the '404 was the date of invention, important for determining whether certain Brandt publications were prior art.  In brief, the Federal Circuit reversed the lower court's finding with respect to the date of invention because the panel found that none of the documentary evidence was directed to the claimed invention, i.e., topical application of bimatoprost.  Rather, the only evidence of conception was the oral testimony of a co-inventor, which the panel essentially dismissed outright.

Allergan further argued that even neglecting the date of invention, the Brandt publications were not "by another" because it represented the inventors' own work.  In particular, Allergan argued that one of the co-inventors directed the clinical trials whose results were reported in the Brandt publications and, therefore, the Brandt publications represented the inventors' work.

Although the issue may have not been timely presented, the panel nevertheless held that Allergan's argument was unavailing.  The panel noted that the co-inventor at issue was an author of one Brandt paper but not another.  Furthermore, there was insufficient evidence presented to establish that the co-inventor was responsible for directing production of the contents of the Brandt publications.  Accordingly, the panel held that the Brandt publications were prior art to the '404 patent.

Noting that the Brandt publications disclosed a substantial rate of eyelash hair growth as a side effect of using bimatoprost in eyedrops, and coupled with Johnstone's teaching that eye drops containing latanoprost (another PGF analog) promote eyelash hair growth when making topical contact with the eyelid, the panel held that the ordinary artisan would have had substantial motivation to follow Johnstone and use topical application of bimatoprost to grow eyelash hair and the Brandt publications provided a reasonable expectation of success.  Accordingly, the panel held that the claims were obvious.

The Dissent

The dissent joined the majority in all respects except for obviousness of the '029 patent, agreeing with the District Court and Examiner that Johnstone's teachings were too vague and equivocal.  In particular, the dissent thought Johnstone's teaching concerning the saturated α-chain of the PGF analogs was merely one item "serve[d] up [in] a menu of seemingly unlimited possibilities" that would cover "almost any conceivable prostaglandin," failing to provide sufficient "blaze marks" to the claimed invention.  The dissent asserted that Johnstone's teachings regarding a saturated α-chain, rather than directing the ordinary artisan to a finite number of identified, predictable solutions, "proposes hundreds of thousands, or even millions, of variations on the alpha chain."

And the dissent further believed that the majority erred in minimizing the undisputed evidence that the field of hair growth was "unpredictable and mysterious."

Allergan, Inc. v. Apotex, Inc. (Fed. Cir. 2014)
Panel: Chief Judge Prost and Circuit Judges Reyna and Chen
Opinion by Chief Judge Prost; dissenting opinion by Circuit Judge Chen

IPR Update -- The First Biotech IPR Decisions

By Andrew Williams --

Earlier this month, on March 6, 2014, the Patent Trial and Appeal Board ("Board") issued three related inter partes review opinions, marking the first set of opinions related to either the Biotech or Pharmaceutical industry.  The cases were IPR2012-00006, IPR2012-00007, and IPR2013-00011, and the parties were Illumina, Inc. (Petitioner) and The Trustees of Columbia University in the City of New York ("Columbia") (Patent Owner).  The technology at issue related to nucleotide analogues for use in sequencing by synthesis, a technique of sequencing by which every added nucleotide is determined using a label, such as a fluorescently detectable label.  As should not be surprising at this point, the Board cancelled all of the reviewed claims as either being anticipated or rendered obvious by the prior art.  The Board also either denied Columbia's motion to amend the claims, or dismissed them as moot.  The claim amendments were found to either be of the same scope as those that were the subject of the review, or were separately unpatentable.  Here also, there was no surprise, as the Board has yet to grant a motion to amend claims.  Finally, the Board dismissed motions from both parties to exclude evidence as being moot.

The Technology

The technology at issue in this IPR generally related to sequencing by synthesis.  Simply put, this technology involves incorporating a labeled nucleotide analogue into a primer strand using DNA polymerase, in a manner comparable to that used when a DNA strand is synthesized.  Normally, when a DNA strand is synthesized, the 5' position of the sugar in a new incoming nucleotide is linked to the 3'-OH group of the sugar of a preexisting nucleotide in the strand under synthesis.  The difference in this sequencing technique, though, is that the newly incorporated nucleotide analogues have cleavable chemical groups capping the 3'-OH to prevent the incorporation of any successive nucleotides before the identity of the nucleotide analogue is determined.  In essence, the strand is terminated with the addition of the new nucleotide.  This nucleotide is identified with a detectable label attached to the nucleotide, such as a fluorescent tag.  Each base (A, C, G, or T) has a unique label, thereby allowing its identification.  In order to sequence an entire region of DNA, the 3'-OH cap is cleaved and the process repeated step-wise until the entire sequence is deduced.

Columbia scientists did not invent sequencing by synthesis, and indeed, the method was fairly well established when the applications in question were filed.  Instead, Columbia asserted that the novelty of the three reviewed patents was the particular nucleotide analogues utilized.  Specifically, the analogues have the detectable label attached to the base (as opposed to the 3'-OH group), they have a cleavable chemical group capping the 3'-OH group, and at least some of the claims require the use of a deaza-substituted base, such as 7-deazapurine (a deazabase is one in which a natural nitrogen atom in the base ring is substituted with a carbon atom).

Representative claims of the patents-at-issue include:  Patent No. 7,713,698, claims 1 and 11:

1.  A method of determining the identity of a nucleotide analogue incorporated into a nucleic acid primer extension strand, comprising:
    a)  contacting a nucleic acid template attached to a solid surface with a nucleic acid primer which hybridizes to the template;
    b)  simultaneously contacting the product of step a) with a polymerase and four nucleotide analogues which are either (i) aA, aC, aG, and aT, or (ii) aA, aC, aG, and aU, so as to incorporate one of the nucleotide analogues onto the nucleic acid primer and form a nucleic acid primer extension strand, wherein each nucleotide analogue within (i) or (ii) comprises a base labeled with a unique label and contains a removable chemical moiety capping the 3'-OH group of the sugar of the nucleotide analogue, and wherein at least one of the four nucleotide analogues within (i) or (ii) is deaza-substituted; and
    c)  detecting the unique label of the incorporated nucleotide analogue, so as to thereby determine the identity of the nucleotide analogue incorporated into the nucleic acid primer extension strand

11.  A plurality of nucleic acid templates immobilized on a solid surface, wherein a nucleic acid primer is hybridized to such nucleic acid templates each such nucleic acid primer comprising a labeled incorporated nucleotide analogue, at least one of which is deaza-substituted, wherein each labeled nucleotide analogue comprises a base labeled with a unique label and contains a removable chemical moiety capping the 3'-OH group of the sugar of the nucleotide analogue.

Patent No. 7,790,869, claims 12 and 15:

12.  A nucleotide having a base that is attached to a detectable label through a cleavable linker, wherein the nucleotide has a deoxyribose comprising a cleavable chemical group capping the 3' OH group, wherein the cleavable linker is cleaved by a means selected from the group consisting of one or more of a physical means, a chemical means, a physical chemical means, heat, and light, and wherein the cleavable chemical group capping the 3' OH group is cleaved by a means selected from the group consisting of one or more of a physical means, a chemical means, a physical chemical means, heat, and light.

15.  The nucleotide of claim 12, wherein the base is a deazapurine.

And Patent No. 8,088,575, claims 1 and 6:

1.  A method of determining the identity of a nucleotide analogue incorporated into a nucleic acid primer extension strand, comprising: a) contacting a nucleic acid template attached to a solid surface with a nucleic acid primer which hybridizes to the template; b) simultaneously contacting the product of step a) with a polymerase and four nucleotide analogues which are either (i) aA, aC, aG, and aT, or (ii) aA, aC, aG, and aU, so as to incorporate one of the nucleotide analogues onto the nucleic acid primer and form a nucleic acid primer extension strand, wherein each nucleotide analogue within (i) or (ii) comprises a base labeled with a unique label and contains a small removable chemical moiety capping the 3'-OH group of the sugar of the nucleotide analogue, wherein said small cleavable chemical group does not interfere with the recognition of the nucleotide analogue by polymerase as a substrate; and c) detecting the unique label of the incorporated nucleotide analogue, so as to thereby determine the identity of the nucleotide analogue incorporated into the nucleic acid primer extension strand

6.  The method of claim 1, wherein said base of at least one of said nucleotide analogues is a deazapurine.

The Cited Art

The following references were cited in one or more the final written decisions of these three IPRs.  Even though each review had its individual nuances pertinent to the particular patent involved, we will address the various rejections below as a group.

Tsien

WO 91/06678 ("Tsien") purportedly described the DNS sequencing by synthesis method, and therefore was a starting point for many of the rejections of the relevant claims.  Tsien disclosed unique labels attached to a base, and a removable 3'-OH chemical moiety (capping group).  For the claims requiring no more than these limitations, the Board found Tsien to be an anticipatory reference.  Columbia argued that this was impermissible, because there was no express statement in Tsien to use a cleavable linker to attach the fluorescent label to the base.  However, the Board found that one of ordinary skill would have envisaged such a configuration based on a reading of the Tsien disclosure.  The Board explained that "specific examples are not necessary to establish anticipation when there is a small genus disclosed and each member can be at once envisaged."  IPR2012-00007 Final Written Decision, pg. 10.

Tsien and Prober I

Even though Tsien disclosed unique labels and a removable 3'-OH capping group, it lacked an explicit disclosure of a deaza-substituted base.  However, it did explicitly reference the Prober I reference.  Prober I (James M. Prober et al.,  A System for Rapid DNA Sequencing with Fluorescent Chain-Terminating Dideoxynucleotides, 238 Science 336-41 (1987) disclosed a nucleotide comprising a deazapurine base to which a label has been attached.  The Board found it significant that Tsien referenced Prober I, and did not otherwise "disparage[] these alternative nucleotide analogues."  Moreover, Columbia was unable to identify why one of ordinary skill in the art would conclude that the deazapurine base was unsuitable for the sequencing by synthesis method.  In other words, the Board made it the patent holder's burden to provide evidence against the obviousness of the claims when the primary reference itself specifically mentions the combined reference, even if the combination is not specifically called out.

Stemple

U.S. Patent No. 7,270,951 ("Stemple") purportedly describes DNA sequencing by synthesis.  Specifically, it described "chain terminating nucleotides that include a blocking group at the 3'-OH of the ribose . . . and a fluorescent label attached to the nucleotide base."  The Board found that at least one claim as anticipated by Stemple, which Columbia did not contest.  Instead, Columbia attempted to cancel that claim, a request which was ultimately denied.

Stemple and Anazawa

Even though Stemple described sequencing by synthesis, it did not disclose a deazabase.  Anazawa (WO 98/33939) was an application published Japanese that taught a deazapurine base coupled to a detectable label.  Stemple did reference Anazawa as describing a particular base to which a fluorochrome-photolabile linker conjugate can attach.  However, the Board also found that even absent this disclosure, it would have been obvious for one of skill in the art to use Anazawa's deazapurine labeled nucleotide

Dower

U.S. Patent No. 5,547,839 ("Dower") purportedly describes methods for sequencing DNA.  The Board found that Dower was anticipatory of the claims not requiring the deazapurine base.  With regard to those other claims, Illumina had contended that Prober I was incorporated by reference.  It had pointed out that Dower describes Prober I as teaching deazapurine bases, even though such teaching only had an irreversible 3'-OH blocking group.  However, the Board disagreed, because it did not believe that Dower had any teaching of using Prober I to modify Dower's nucleotides with a reversible 3'-OH capping group.  "Illumina has not pointed to anything convincing in Dower that teaches replacing Dower's dideoxy terminated nucleotide with a removable 3'-OH cap or vice-versa."  IPR2013-00011 Final Written Decision, pg. 16.  Therefore, Dower combined with Prober I was not found to render obvious the claims that recited deazapurine bases.

Secondary Considerations

As the Board explained, secondary considerations must always be considered as part of the evidence, not just when the decision maker has doubts after reviewing the art.  These considerations can often be the most probative and cogent evidence, and helps the court avert the hindsight trap.  In this case, Columbia alleged that its inventions were not obvious because they provided "unexpectedly improved properties," commercial success for Illumina in its sequencing by synthesis products, evidence of attempted licensing, and praise and skepticism.  As for the first two factors, Columbia alleged that its inventions had unexpected properties over pyrosequencing, and that Illumina experienced commercial success practicing the inventions in comparision to pyrosequencing.  The Board rejected these arguments, because pyrosequencing was not the closest art – "[t]o establish unexpected results, the claimed subject matter must be compared with the closest prior art."  IPR2012-00006 Final Written Decision, pg. 33.  The Board pointed out that Tsien was the closest art, and therefore must be the one that is used for comparison.  As such, these secondary considerations were not sufficiently demonstrated by Columbia.  The Board also considered the fact that Illumina had attempted to license Columbia's technology, because licensing can be evidence that a licensor recognizes the merits of the invention.  Nevertheless, even though Illumina did inquire about licensing, there was no evidence it did so because it believed that the patents had independent merit.  Instead, the invention that had merit was that disclosed in Tsien.  The Board found that it was possible Illumina was simply trying to license these patents because they potentially covered its own product, and there was insufficient evidence to establish that this was not the case.  Finally, the Board considered the praise and skepticism surrounding the inventions, but found this information to be of insufficient weight and relevance to be persuasive.

In total, the Board cancelled all reviewed claims of these three patents that were the subject of these three IPRs.  It will be interesting to observe whether the trend toward cancellation of all claims continues when other biotech or pharmaceutical-related patents are reviewed.  We will continue to monitor these cases and provide periodic updates.