Patent Docs

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.

In re Eaton (Fed. Cir. 2013)

By Donald Zuhn --

On November 22, the Federal Circuit reversed a determination by the Patent Trial and Appeal Board affirming the rejection of the claims 1, 8-11, and 14 of U.S. Application No. 11/145,716 as anticipated by DE Patent No. 10053155 A1 ("Jungkeit") and as obvious in view Jungkeit and U.S. Patent No. 6,107,349.  The '716 application is directed to a method of treating psoriasis by administering a multiple vitamin supplement composition, wherein the claims at issue in the appeal recite a vitamin supplement composition of folic acid, vitamin B12, and vitamin B6.  Representative claim 1 recites:

1.  A method of treating psoriasis by administering to a person a vitamin supplement composition comprising at least about 25 micrograms to about 2,200 micrograms of folic acid, at least about 25 micrograms to about 2,500 micrograms of vitamin B12, and at least about 0.5 milligrams to about 20 milligrams of vitamin B6, wherein said composition is essentially free of anti-oxidants.

With respect to the limitation that the composition be "essentially free of anti-oxidants," the '716 application discloses that:

By "essentially free" it is meant that the vitamin composition should not contain an amount of antioxidants which would tend to damage and inactivate some of the vitamin B12 and/or folic acid of the vitamin supplement.  The presence of lower amounts of antioxidants would not render the vitamin composition of the present invention ineffective or of reduced effectiveness.

The '716 application also discloses that "among the antioxidants especially to be avoided is added vitamin C."

The Examiner rejected the claims at issue as anticipated by Jungkeit, which discloses the use of a multivitamin preparation for the treatment of psoriasis, wherein the multivitamin preparation contains vitamin B1, vitamin B2, nicotine amide, dexpanthenol, biotin, folic acid, vitamin B6, vitamin B12, vitamin C, and vitamin E (vitamin C and vitamin E being known antioxidants).  The Examiner also rejected the claims at issue as being obvious in view of Jungkeit and the '349 patent, the latter of which discloses the use of a composition comprising vitamin E, evening primrose oil, and B-complex vitamins to treat psoriasis.  The Board affirmed the Examiner's rejections, finding that the '716 application defines the phrase "essentially free of anti-oxidants" to "allow antioxidants as long as they do not damage or inactivate the B12 or folic acid," adding that the '716 application could be "reasonably interpreted to allow for 200 μg of vitamin C" because "Jungkeit's composition containing 200 μg of vitamin C was effective [at] treat[ing] psoriasis."

In reversing the Board's affirmance of the Examiner's rejections, the Federal Circuit begins by noting that "Jungkeit actually discloses 200 mg of Vitamin C" (emphasis in opinion), and not 200 μg as asserted by the Examiner and repeated by the Board.  Momentarily setting aside this "clear factual error," the opinion indicates that the Board's affirmance, and the Examiner's rejections, turn on the meaning of the claim limitation "essentially free of antioxidants."  While the opinion acknowledges that "the Board correctly determined that 'essentially free' of antioxidants means a composition that 'should not contain an amount of antioxidants which would tend to damage and inactivate some of the vitamin B12 and/or folic acid of the vitamin supplement," and that "[t]he Office appears to agree that the construction further requires that the amount of antioxidant 'would not render the vitamin composition of the present invention ineffective or of reduced effectiveness,'" the panel states that "[a] review of the Board's decision reveals that the Board was not faithful to this construction."  In particular, the opinion indicates that:

To anticipate, it is not enough for the prior art composition to have an amount of antioxidant that merely allows the composition to be "effective."  To anticipate, the prior art compositions must have an amount of antioxidant that does not result in "reduced effectiveness."  Substantial evidence supports the Board's finding that "Jungkeit treated psoriasis with a composition comprising B6, B12, and folic acid in the requisite amounts." . . .  However, substantial evidence does not support the Board's finding that Jungkeit's composition is "essentially free of antioxidants."  The Board and the examiner have not analyzed the prior art for reduced effectiveness.

• • •

In short, the fact that Jungkeit's composition is not "ineffective" does not mean that it reads on the "essentially free of antioxidants" limitation.  To fall within the scope of the claims, the prior art composition must also not have a reduced effectiveness due to the presence of antioxidants.  The Office has not established that the cited references disclose compositions whose effectiveness is not reduced at all due to the presence of the antioxidants.

(emphasis in original).

According to the Court, "[t]he Board's decision is particularly problematic given a clear factual error appearing in both the examiner's and the Board's analysis of Jungkeit."  In particular, the panel notes that "Jungkeit discloses 200 milligrams of vitamin C -- not 200 micrograms, as stated by the examiner," and adopted by the Board.  The opinion points out that "[w]hen the reasoning repeatedly adopts such a misstatement, substantial evidence cannot support a finding that Jungkeit met the 'essentially free of antioxidants' element," adding that "the Board's factual error regarding the amount of antioxidant present in Jungkeit [also] taints its obviousness conclusion."  As a result of this factuial error, and the Office's failure to establish that the amount of antioxidants used in the prior art compositions did not reduce their effectiveness in treating psoriasis, the panel reversed the Board's anticipation and obviousness determinations, and remanded the case.

In re Eaton (Fed. Cir. 2013)
Panel: Chief Judge Rader and Circuit Judges Lourie and Moore
Per curiam opinion

Pronova Biopharma Norge AS v. Teva Pharmaceuticals USA, Inc. (Fed Cir. 2013)

By Kevin E. Noonan --

Last week, the Federal Circuit in a non-precedential opinion, invalidated claims to Orange Book-listed patents on omega-three fatty acid formulations in Pronova Biopharma Norge v. Teva Pharmaceuticals USA.  The grounds for reversing the District Court's finding that the defendant had not established invalidity under the public use statutory bar under 35 U.S.C. § 102(b) was based on the Court's determination that Pronova's predecessor in interest had permitted unrestricted use of formulations falling with the scope of the claims and disregarded Pronova's argument that public use was negated because there was insufficient evidence that the use was for the inventions' intended purpose.

The case concerned U.S. Patents Nos. 5,502,077 and 5,656,667 involved in ANDA litigation between Pronova and, in separate ANDAs, Teva and Par Pharmaceuticals, who propounded Paragraph IV letters contending that these patents were invalid and non-infringed by their generic formulations of the branded drug Lovaza®.  The drug comprised a formulation of certain omega-3 and omega-6 fatty acids derived from fish oils for prevention of heart disease and other cardiovascular ailments specifically, hypertriglyceridemia, based on evidence of native populations with diets high in fish.  The District Court found the patents infringed, not proven invalid by clear and convincing evidence, and not unenforceable for inequitable conduct.

The following claims were at issue for the '667 patent:

20. A pharmaceutical mixed-fatty-acids composition in which
    a) at least 80% by weight of the composition is comprised of a combination of (all-Z omega-3)-5,8,11,14,17-eicosapentaenoic acid (EPA) and (all-Z omega-3)-4,7,10,13,16,19-docosahexaenoic acid (DHA) in a weight ratio of EPA:DHA of from 1:2 to 2:1 and
    b) (all-Z omega-3)-6,9,12,15,18-heneicosapentaenoic acid is present in an amount of at least one percent by weight, [or] wherein at least 85% by weight of the composition is comprised of long chain omega-3 fatty acids, [or] wherein the EPA constitutes 40 to 60% by weight of the composition and the DHA constitutes 25 to 45% by weight of the composition, [or] wherein C 20:4 omega-6 fatty acid constitutes at least one percent by weight of the composition, [or] wherein C 22:5 omega-3 fatty acid constitutes at least one percent by weight of the composition, [or] wherein the (all-Z omega-3) -6,9,12,15,18-heneicosapentaenoic acid is present in an amount of from 1 to 4% by weight, [and] wherein the EPA and DHA are present in an EPA:DHA weight ratio of from 1:1 to 2:1.

44.  A pharmaceutical mixed-fatty-acids composition in which
    a) at least 80% by weight of the composition is comprised of a combination of (all-Z omega-3)-5,8,11,14,17-eicosapentaenoic acid (EPA) and (all-Z omega-3)-4,7,10,13,16,19-docosahexaenoic acid (DHA) in a weight ratio of EPA:DHA of from 1:2 to 2:1 and
    b) at least 3% by weight of the composition is comprised of omega-3 fatty acids other than EPA and DHA that have 20, 21, or 22 carbon atoms, [or] wherein the EPA constitutes 40 to 60% by weight of the composition and the DHA constitutes 25 to 45% by weight of the composition, [or] wherein the EPA and DHA are present in an EPA:DHA weight ratio of from 1:1 to 2:1, and wherein the fatty acids are present in ethyl ester form.

50. A pharmaceutical mixed-fatty-acids composition in which
    a) at least 90% by weight of the composition is comprised of long chain, polyunsaturated, omega-3 fatty acids;
    b) at least 80% by weight of the composition is comprised of a combination of (all-Z omega-3)-5,8,11,14,17-eicosapentaenoic acid (EPA) and (all-Z omega-3)-4,7,10,13,16,19-docosahexaenoic acid (DHA) in a weight ratio of EPA:DHA of from 1:1 to 2:1, with the EPA constituting 40 to 60% by weight of the composition and the DHA constituting 25 to 45% by weight of the composition;
    c) at least 4.5% by weight of the composition is comprised of omega-3 fatty acids other than EPA and DHA that have 20, 21, or 22 carbon atoms;
    d) from 1 to 4% by weight of the composition is comprised of (all-Z omega-3)-6,9,12,15,18-heneicosapentaenoic acid; and
    e) the composition is in oral dosage form and includes an effective amount of a pharmaceutically acceptable antioxidant, wherein the fatty acids are present in ethyl ester form.

(where text in italics was recited in independent claims incorporated into the dependent claims) (claim 50 was asserted only against Teva).  Also in the litigation at the District Court was claim 9 of the '077 patent; however, this patent expired n March 2013 and the Federal Circuit thus did not react any issues regarding this patent.

The facts surrounding defendants' arguments for an invalidating public use involved transfer of samples of formulations falling within the scope of the asserted claims by Pronova' predecessor in interest in the patents, all of which occurred prior to the critical date of the '677 patent.  These transfers included samples sent to Dr. Victor Skrinska, with disclosure of the contents of the formulations, with no restrictions, confidentiality requirements, or obligations to report the results of any experiments performed using the formulations.  Dr. Skrinska analyzed the contents of the formulations but did not perform any testing on the clinical use or benefits of the formulations (although he did administer capsules of the formulation "to himself and others").  There were also three other instances of alleged public use:  to Dr. Peterson of General Mills; to Dr. Davis of the University of Colorado; and Dr. Nordoy of the University of Oregon.  The Federal Circuit's opinion states that "the distributions to Peterson and Davis were (1) unrestricted; (2) non-experimental; and (3) for purposes of generating interest in the product" and that Dr. Nordoy actually performed "an experimental bioavailability study" on the formulation.  The District Court held that there was insufficient evidence to rebut Pronova's argument that Dr. Nordoy's use was an exempted experimental use and that there was also insufficient evidence that Drs. Peterson or Davis had used the formulations for their intended purpose and thus did not constitute an invalidating public use.  And the District Court further held that Dr. Skrinska's use was not invalidating, "apparently [because the District Court agreed with Pronova] that an invalidating use of a pharmaceutical compound must be for the purposes identified in the patents-in-suit."  The District Court further "discredited" Dr. Skrinska's testimony in rejecting defendants' public use argument for invalidity.

In an opinion by Judge O'Malley, joined by Judges Dyk and Wallach, the Federal Circuit reversed as to the public use determination, and remanded with instructions that the District Court enter judgment in favor of defendants.  Assessing the Court's public use jurisprudence in light of relevant Supreme Court precedent, the panel agreed with defendants that "[a]n invalidating public use need not be the intended use of the invention disclosed or claimed in the patent as long as the invention is fully disclosed without restriction."  Under this precedent, the Court asserts that "either public accessibility or commercial exploitation" qualifies as public use, citing Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1379 (Fed. Cir. 2005).  The Invitrogen court also held that the Supreme Court's "ready for patenting" test (Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67–68 (1998)) applies to public use as well as the on-sale bar (and here, the Court says there is no question that the invention was ready for patenting at the time of the alleged instances of public use).

According to the panel, the standard for public use is where "a completed invention is used in public, without restriction," citing Dey, L.P. v. Sunovion Pharm., Inc., 715 F.3d 1351, 1355 (Fed. Cir. 2013).  Public use can be negated where there exists disclosure under a confidentiality agreement or "similar expectations of secrecy," Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1379 (Fed. Cir. 2005), or where some but not all aspects of an invention are disclosed, citing W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1549 (Fed. Cir. 1983); Janssen Pharmaceutica, N.V. v. Eon Labs Mfg., Inc., 134 F. App'x 425, 431 (Fed. Cir. 2005) (all aspects of the invention must be disclosed).  The "seminal case" is Egbert v. Lippmann, 104 U.S. 333, 336 (1881) (the corset case), where the Court posed the essential question:  "[w]as the invention's use public in the sense that it was made available to others with no limitation or restriction?"  One measure of the extent to which the disclosure is confidential (as opposed to "public") is "the amount of control which the discloser retains over the invention during the uses in question," citing Lough v. Brunswick Corp., 86 F.3d 1113, 1121 (Fed. Cir. 1996) (insufficient control); Eolas Technologies Inc. v. Microsoft Corp., 399 F.3d 1325 (Fed. Cir. 2005) (unrestricted disclosure to employees); Beachcombers, International, Inc. v. Wildewood Creative Products, Inc., 31 F.3d 1154 (Fed. Cir. 1994) (unrestricted disclosure to party-goers); and Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1265–67 (Fed. Cir. 1986) (inventor retained control of puzzle and information).  Finally, the panel cited the "sophistication of those to whom disclosure was made" as a factor in the extent to which a use is a public use.

Applying these principles, the panel held that the disclosure (by transfer of samples of the formulation) constituted an invalidating public use.  Factors supporting this determination were that the transfer contained no evidence of confidentiality restrictions and the fact that Pronova conceded there was no experimental use involved in this transfer.  The panel concluded that the transfer was "with no secrecy obligation or limitation for [Dr. Skrinska's] unfettered use" and that the shipment of the formulations "made public all aspects of the claimed inventions, since it included a certificate of analysis revealing the composition of the supplied products."  It was also undisputed that Dr. Skrinska was "one highly skilled in the art, with the full ability to know, understand, and fully disclose the invention to others" (and that there was evidence at trial that Dr. Skrinska had disclosed the information he had on the formulations with colleagues and "other members of the medical community" without restriction.  In sum (particularly with regard to Pronova's argument that Dr. Skrinska had not used the formulation for its intended use):

Where, as here . . . a compound is provided without restriction to one highly skilled in the art, that compound's formulation is disclosed in detail, and the formulation is subject to confirmatory testing, no other activity is needed to render that use an invalidating one.  Once the formulation was disclosed in full to Skrinska, without any restriction on its use, it had been released into the "public domain" for purposes of § 102(b).

Pronova Biopharma Norge AS v. Teva Pharmaceuticals USA, Inc. (Fed Cir. 2013)
Nonprecedential disposition
Panel: Circuit Judges Dyk, O'Malley, and Wallach
Opinion by Circuit Judge O'Malley

Research Foundation of State University of New York v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2013)

By Andrew Williams --

When assessing the validity of a patent, you cannot ignore the dependent claims.  That was the main takeaway from the recent Federal Circuit case, Research Foundation of State University of New York v. Mylan Pharmaceuticals Inc.  In that case, the lower court had invalidated all of the asserted claims of two particular patents as inherently anticipated in view of several prior art references.  However, three of these claims were dependent claims, and they all had the same additional limitation -- "wherein the tetracycline compound has substantially no anti-microbial activity in said mammal system."  The lower court did not address this limitation, so the Federal Circuit vacated the finding of invalidity of these three claims and remanded for a determination whether the identified prior art references also contained this limitation.  The Court did not, however, fault the lower court for overlooking this limitation, but instead placed the blame squarely on the patent-asserting parties for failing to highlight this issue in the post-trial papers.  The result was somewhat academic, in part because the Plaintiffs also asserted a later-expiring patent that had been found by the lower court to be valid and infringed by Mylan.  The Federal Circuit affirmed the remainder of the lower court's findings, with the result being that the FDA will not be able to approve Mylan's ANDA until the expiration of the infringed patent, which currently will occur on December 19, 2027.

The Federal Circuit opinion did not contain much more detail than the above paragraph.  In fact, without that one issue, this case most likely would have been a Rule 36 affirmance.  Therefore, for the benefit of the readers of this blog, we will provide some context for this case.  The drug at issue is doxycycline, which is sold by Galderma Laboratories, L.P. under the brand name Oracea® for the treatment of acne rosacea.  There were five patents that cover Oracea® that were asserted in this case:  the "Ashley Patents," U.S. Patent Nos. 7,211,267 and 7,232,572; the "Amin Patents," U.S. Patent Nos. 5,789,395 and 5,919,775; and the "Chang Patent," U.S. Patent No. 7,749,532.

In October 2008, Mylan submitted ANDA No. 90-855 to market a generic version of this drug.  Because doxycycline was an old antibiotic, it was not entitled to most of the benefits of the Hatch-Waxman scheme at the time of this ANDA filing.  However, Congress subsequently revised the statute, paving the way for the Orange Book listing of the Ashley and Amin patents.  Nevertheless, the FDA made a determination that these "later-listed" antibiotic patents were not entitled to a 30-month stay.  Because the stay was not available, Galderma requested a preliminary injunction, which the United States District Court for the District of Delaware granted on June 28, 2010.  The FDA then approved Mylan's product on July 1, and the Chang patent issued on July 6, 2010.  In an effort to invalidate the Chang patent, Mylan filed a declaratory judgment action, and the two cases were subsequently combined.

After a trial on the merits, the lower court found that the Ashley patents were not infringed by Mylan because Galderma failed to prove that Mylan's ANDA product contained an amount of doxycycline that does not significantly inhibit the growth of microorganisms.  This outcome was based in part on the construction of two claim terms:  "a sub-antibacterial amount," which was held to mean "an amount that does not significantly inhibit the growth of microorganisms, e.g., bacteria," and "an amount that . . . has substantially no antibiotic activity," which was held to mean "an amount that is effective to treat the papules and pustules of rosacea but does not significantly inhibit the growth of microorganisms, e.g., bacteria."  The District Court also determined that the word "amount" applies to all parts of the human body.  Therefore, the Court concluded, because there are approximately 100,000,00,000,000 bacterial cells in the human body, it would be almost impossible for Galderma to prove infringement of a claim that required no significant inhibition of any of these microorganisms.  Moreover, Mylan had introduced in vivo studies that showed that the administration of its ANDA product significantly inhibited the growth of the bacteria in the oral cavity.  As a result, the District Court held that the claims of the Ashley patents were not infringed.  Mylan did not, however, prove that these same claims were invalid.

With respect to the Amin patents, which were the two patents that were the subject of the Federal Circuit opinion, the Court also found that Galderma failed to prove that the asserted claims were infringed.  Galderma had failed to prove that Mylan's ANDA product would inhibit the production of endogenously produced Nitric Oxide ("NO"), or inhibit the expression of inducible Nitric Oxide synthase ("iNOS").  In addition to the non-infringement finding, the lower court found that the asserted claims were inherently anticipated by several prior art references.  Claim 1 of the '395 patent was representative:

1.  A method for inhibiting nitric oxide production in a mammal system, comprising providing to the mammalian system an amount of a tetracycline compound sufficient to cause a decrease in the amount of nitric oxide produced endogenously by the mammalian-system.

The cited art did not expressly teach that the prior art use of doxycycline inhibited NO production or iNOS expression, but the District Court found these to be inherent properties of these references.  Half of these references taught the use of lower dosages of doxycycline, but the lower court only reviewed the higher dosage references to conclude that they all inherently anticipate all of the claimed methods.  However, as indicated above, because the dependent limitation, which required that the compound also have no anti-microbial activity, was not addressed, the validity finding of these dependent claims was in error.  The Federal Circuit stopped short of reversing this finding, but instead remanded for a determination of not only the teaching of the lower-dosage references, but an analysis of whether any of the references inherently disclosed the lack of anti-microbial activity.

Finally, the lower court did find that the later issued Chang patent was valid and infringed.  However, because the Chang patent was not Orange Book listed, the District Court held a separate hearing regarding remedies on February 17, 2012.  The Court subsequently granted a permanent injunction pursuant to 35 U.S.C. § 283 for many of the same reasons that it had previously granted the preliminary injunction.  It also held that Galderma was entitled to relief under 35 U.S.C. § 271(e)(4)(A), which prevents the FDA from approving an ANDA product prior to the expiration of the patent at issue.  Mylan had questioned whether such a remedy under this section was appropriate because the patent was not listed in the Orange Book.  The District Court pointed out, however, that the Federal Circuit recently addressed the issue whether Section 271(e)(2) was available to non-Orange Book listed patents that cover an ANDA product, concluding that it is the filing of an ANDA that infringes a patent that provides jurisdiction, regardless of whether that patent is listed in the Orange Book.  See AstraZeneca Pharmacetuticals LP v. Apotex Corp., 669 F.3d 1370 (Fed. Cir. 2012).  By extension, the lower court held that the Hatch-Waxman remedy of Section 271(e)(4) is also be available to a patent holder, regardless of whether the patent at issue is Orange Book listed.

The final matter addressed by the lower court was the disposition of the bond that Galderma posted upon entry of the preliminary injunction.  Mylan pointed out that the FDA approved its ANDA product on July 1, 2010, but the Chang patent did not issue until July 6, 2010.  Therefore, Mylan contended, because the District Court found that Mylan's ANDA product did not infringe either the Ashley or Amin patents, it was entitled to be compensated for the time between these few days.  The lower court disagreed, in part because Mylan had not presented its "winning" argument regarding the in vivo data until trial, and therefore to a certain extent was to blame for the harm it suffered.

In the end, the remand to determine the validity of the Amin patents was somewhat academic, in part because Mylan was found not to infringe the Amin patents anyway.  However, Galderma and its co-plaintiffs have filed suit against several other ANDA filers seeking to market generic versions of this drug.  Therefore, because it is possible that one or more of these ANDA products will be found to infringe the Amin patents, the validity of the dependent claim may turn out to be relevant after all.

Research Foundation of State University of New York v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2013)
Nonprecedential disposition
Panel: Circuit Judges Newman, Reyna, and Taranto
Per curiam opinion

Dey, L.P. v. Sunovion Pharmaceuticals, Inc. (Fed. Cir. 2013)

By Kevin E. Noonan --

Enactment of the Leahy-Smith America Invents Act in 2011 focused the patenting community on the changes of U.S. patent law from "first to invent" under the 1952 Patent Act to "first inventor to file" under the AIA as the basis for deciding priority and defining the scope of prior art to a claimed invention.  Nevertheless, the provisions of the 1952 Act remain in force for any application filed prior to March 16, 2013, and the Federal Circuit's recent decision in Dey, L.P. v. Sunovion Pharmaceuticals, Inc., illustrates that there remain issues in the "old" law that will continue to be explicated and addressed.

The issue in the Dey case is the patentability bar under 35 U.S.C. § 102(b) that arises from "public use" of an invention more than one year prior to an applicant's filing date.  The circumstances surrounding the assertion of invalidity under this provision of the statute were somewhat unusual, as recognized by the Court:  typically it is the accused infringer who asserts a patentee's own prior public use as invalidating, but here defendant Sunovion asserted its own prior clinical trial as a public use of Dey's claimed invention.  Specifically, both Sunovion and Dey developed pharmaceutical formulations of a known drug, formoterol, as a nebulized formulation for treating chronic obstructive pulmonary disorders (COPS) such as emphysema.  Both companies owned patents on their formulations:  No. 6,040,344 to Sunovion (filed in 1998 and issued in March 2000); and Nos. 7,348,362; 7,462,645; 7,465,756; 7,473,710; and 7,541,385 to Dey (all claiming priority to July 10, 2003).  Sunovion was the first to market in 2007 with its Brovana product, after what the Court terms a "long" path to obtaining regulatory approval.  Sunovion's clinical trials began in 1998, and of interest in the decision is a particular Phase III clinical trial, Study 50, that began in February 2002, wherein one of the formulations tested was identical to the Brovana formulation.

Just prior to launch, Dey sued Sunovion for infringement of its patents, and Sunovion filed a motion for summary judgment of invalidity for prior public use under § 102(b), based on its own clinical trials.  Under Sunovion's legal theory, the Phase III clinical trial identified as Study 50 included a formulation (given to 124 clinical trial participants) that was within the scope of Dey's patent claims and the conditions of the clinical trial constituted a prior public use that occurred more than one year before Dey's earliest filing date of July 10, 2003.  The conditions Sunovion cited in support of the prior art status of its clinical trial were:

• Patients were told that they were being given a formulation of formoterol
• Patients enrolled in the trial were told they could (and indeed should) inform their personal physicians about the trial
• Patients enrolled in the study were under no conditions of confidentiality
• At least some of the vials ("a fraction of one percent") of the formulated drug were unaccounted for during and after the clinical trial

The District Court granted summary judgment against Dey, finding that Sunovion had established by clear and convincing evidence that the asserted claims of Dey's patents in suit were invalid as being anticipated under the "public use" prong of § 102(b).

The Federal Circuit reversed, in an opinion by Judge Bryson, joined by Judge O'Malley over a dissent by Judge Newman.  The panel noted that the purpose of the bar was to "discourage[e] the removal, from the public domain, of inventions that the public reasonably has come to believe are freely available," citing Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192, 1198 (Fed. Cir. 1994).  The test for deciding whether a prior use was a "public use" under the statute has two elements:  "'whether the purported use:  (1) was accessible to the public; or (2) was commercially exploited,'" citing Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380 (Fed. Cir. 2005).  Factual issues to be considered when determining whether a prior use constitutes a "public use" include "'the nature of the activity that occurred in public; the public access to and knowledge of the public use; [and] whether there was any confidentiality obligation imposed on persons who observed the use'" according to the opinion, citing Bernhardt, L.L.C. v. Collezione Europa USA, Inc., 386 F.3d 1371, 1379 (Fed. Cir. 2004).  In the absence of commercial exploitation a confidentiality agreement could "negate" the status of a prior use as a public use.  Invitrogen at 1382.

The status of a prior use as a public use is not dependent on the public use being an applicant's use; activities of third parties (such as Sunovion here) can constitute an invalidating prior public use.  Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1334 (Fed. Cir. 2005).  But such a third party use must be a public not a private use (i.e., the fact that there was a prior use by another does not by itself constitute a public use) according to the Court, citing Woodland Trust v. Flower- tree Nursery, Inc., 148 F.3d 1368, 1371 (Fed. Cir. 1998), and W.L. Gore & Assocs. v. Gar- lock, Inc., 721 F.2d 1540, 1549-50 (Fed. Cir. 1983).  The opinion notes that, as with all question under § 102 this is a question of fact depending on the circumstances, such as a situation where there is no confidentiality agreement:  there, "the skill and knowledge of those observing an invention can shed light on the degree to which it was kept confidential" and even "limited disclosure" may suffice if it is to "those who are skilled enough to know, understand, and 'easily demonstrate the invention to others,'" citing Netscape Commc'ns Corp. v. Konrad, 295 F.3d 1315, 1321 (Fed. Cir. 2002).

The Federal Circuit reversed the District Court's summary judgment because it found disputed issues of material fact that made summary judgment inappropriate.  However the majority opinion went on to set forth the considerations important for making the determination and the places where in the majority's opinion the District Court went astray.  The majority identified two issues important to the District Court's decision that warranted comment.  The first was the lower court's determination that the use of the particular "infringing" formulation during the clinical trial was "open and free," a determination with which the Court disagreed.  The basis for this disagreement revolved around the incapacity of the clinical trial participants to "reverse engineer" the formoterol formulation even knowing the identity of the drug.  In addition, the panel majority disagreed that the study participants were provided with a "personal supply" of the formulations that they could use "however they saw fit" and that provided them with an "unfettered use of the composition for weeks at a time."  The panel agreed with Dey that the use by the study participants was anything but "unfettered," citing the restrictions contained in agreements between the clinical trial administrators and participants, including requirements that the participants be the only individuals taking the medication and that they keep "accurate usage logs"; the Court also noted that despite the extremely low level of the formulation that was unaccounted for the participants and administrators in the trials were required to return all unused portions of the drug and to account for all administered and inventory supplies of the formulated drug.  Specifically the opinion states:

The fact that a tiny fraction of the thousands of vials were lost without penalizing the responsible test subject(s), or that the practicalities of the study required self-administration at home rather than physician administration in a closed facility, does not preclude a reasonable jury from concluding that the use of Batch 3501A was sufficiently controlled and restricted, rather than unfettered and public.

The majority also disagreed that the details of the clinical trial were not required to be kept confidential by trial participants.  The issue for the Court was what information was kept confidential and here the panel noted that "the particulars of its invention -- embodied in the formulation and stability characteristics of Batch 3501A -- were kept sufficiently confidential to avoid a finding of 'public use.'"  Also important for the panel's decision were the confidentiality obligations imposed on the clinical investigators (clearly more knowledgeable than the patients), who were required to sign confidentiality agreements.  The panel majority found that the individuals most likely to have sufficient disclosure for the clinical trial to be a public use were under an obligation not to disclose (thereby negating the clinical trial as a public use as to those individuals), and that the individuals (the patients) not under  any confidentiality obligations had insufficient information to constitute prior disclosure of the invention.

The panel majority noted that the circumstances surrounding the clinical trial were common and that prior precedent "routinely rejected the argument that such an arrangement necessarily strips the trial of confidentiality protection or renders it accessible to the public," citing Bayer Schering Pharma AG v. Barr Labs., Inc., No. 05- CV-2308 (PGS), 2008 WL 628592, at *11-12, *38-42 (D.N.J. Mar. 3, 2008); Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 364 F. Supp. 2d 820, 873-75, 912-13 (S.D. Ind. 2005), aff'd, 471 F.3d 1369, 1380-81 (Fed. Cir. 2006); Janssen Pharmaceutica N.V. v. Eon Labs Mfg., Inc., 374 F. Supp. 2d 263, 276 (E.D.N.Y. 2004), aff'd, 134 F. App'x 425, 430-31 (Fed. Cir. 2005); and In re Omeprazole Patent Litig., 490 F. Supp. 2d 381, 508 (S.D.N.Y. 2007), aff'd on other grounds, 536 F.3d 1361 (Fed. Cir. 2008).  Circumstances in common in such cases and the case at bar noted by the Court is that study participants were informed as to the identity of the administered drug, that such patients were entrusted to administer doses themselves not under the control or supervision of a study administrator or doctor and that these prior participants were permitted to discuss the trial with their personal physicians.

Finally, the panel majority identified several other "misconceptions" underlying the District Court's decision.  These included that lack of any confidentiality obligations to Dey by Sunovion's clinical trial participants, which the panel recognized would require any third party prior use (even a secret use) to be a patent-invalidating public use.  And the panel rejected Sunovion's attempt, in their view, to stretch precedent related to "experimental use," such as New Railhead Mfg., L.L.C. v. Vermeer Mfg. Co., 298 F.3d 1290, 1299 (Fed. Cir. 2002), and City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 136 (1877), to apply in this situation.  In those cases the invention was "public" but was not appreciated by the public under circumstances where the use was necessary to demonstrate reduction to practice of the invention ("During experimentation, the public might have knowledge of an invention (because they see it), but may not be using the invention within the meaning of the statute (because the inventor is experimenting)").  Accordingly, the Court remanded the case to the District Court for reconsideration on the merits.

Judge Newman's dissent was not based on her disagreement with the outcome but rather because she would prefer the Court remand with instructions to deny the motion on the grounds that the Sunovion clinical trials did not constitute a "public use."  "No sound reason appears for remanding for findings or trial, when the matter is readily resolved on undisputed facts.  Nor is there any reason for casting judicial doubt on the standard confidentiality procedures of clinical trials, at this late date of decades of established practice," in Judge Newman's view.

Dey, L.P. v. Sunovion Pharmaceuticals, Inc. (Fed. Cir. 2013)
Panel: Circuit Judges Newman, Bryson, and O'Malley
Opinion by Circuit Judge Bryson; dissenting opinion by Circuit Judge Newman

In re Ditto (Fed. Cir. 2012)

Cats and the Federal Circuit

By Kevin E. Noonan --

Unlike dog breeds that tend to be of ancient vintage (Labra-doodles and Yorkie-poos to the contrary), many cat breeds are of relatively recent parentage.  While there are many naturally occurring breeds (such as Maine Coons and Norwegian Forest Cats), a surprising number of cat breeds were developed in the last 50 years or so.  The most recent (and perhaps most extreme) are Savannahs, that are the result of breeding between a domestic short-haired cat and a serval, a wild, undomesticated African cat.  The Federal Circuit had the opportunity to opine on whether another (relatively) recent cat breed, the Pixie-Bob (at right), was patent-eligible subject matter or novel in an appeal from rejection on both these grounds before the Patent Office.  While the Court avoided the statutory subject matter question, it affirmed rejection for lack of novelty for the remarkably named applicant, Frank Robert Ditto.

Mr. Ditto claimed a breed of cats produced by mating a bobcat, lynx or bobcat-lynx mix with a domestic cat.  The sole independent claim is directed to "[a] domestic cat breed produced by breeding a purebred cat produced by mating a Bobcat, Lynx, or Bobcat Lynx species with a domestic cat," with dependent claims reciting various phenotypic characteristics of the cats (in most part relating to the cats' propensity to vocalize).  As explained in the specification, the breed has a unique combination of domesticated behaviors and "the spirit and disposition of the wild" cat as well as other specific traits (including "a variety of colors, have hind legs that are larger than their front legs, may have spotted fur or a stump tail, and have 'sturdy muscular bodies.'"

The Board affirmed the Examiner's rejection of §§ 101 and 102 grounds.  The basis for the § 101 rejection was that the breed was a "product of nature" that resulted from breedings that occurred in the wild.  The Board affirmed this rejection insofar as the claims did not require any particular degree of interbreeding and that naturally occurring cats could satisfy the limitations recited in claim 1.  With regard to the § 102 rejections, the Examiner cited two prior art references:  a 1994 Seattle Times article by Green relating to a Pixie-Bob produced by mating of a wild bobcat and a domestic cat (in a family barn without human intervention); and a 1995 Bellingham Herald article by Porter describing the Pixie-Bob breed and its introduction to The International Cat Association (TICA) as an "official" cat breed.  These references also satisfied the limitations recited in claim 1 on similar grounds, i.e., that there was no limitation as to the degree of breeding required and that "there was no evidence . . . suggest[ing] any difference between the Pixie-Bob cat [described in the cited prior art] and the claimed cats."

The Federal Circuit affirmed in a per curiam opinion before Judges Dyk, Prost, and Reyna.  Their opinion did not address the § 101 rejection, finding sufficient evidence that the claims were anticipated under § 102.  According to the panel, the term "purebred" was properly given its "broadest reasonable interpretation," particularly in view of the lack of any particular definition in Inventor Ditto's specification.  And the panel apparently relied on a dictionary definition of "breed" as meaning "a distinctive group of domestic animals differentiated from the wild type under the influence of man and usu[ally] incapable of maintaining its distinctive qualities in nature," citing Webster's Third New International Dictionary of the English Language 274 (1993).  Like the Board, the panel rejected Inventor Ditto's argument that the Green and Porter references did not describe a breeding that had achieved the desired level of domesticity (particularly with reference to the TICA "SBT" breeding standards).  Tellingly, Inventor Ditto's filing date (March 25, 1999) was after the date (May 1, 1998) when TICA accepted the Pixie-Bob as a recognized breed.  According to the panel, both the Green and Porter references disclosed characteristics and features of the Pixie-Bob cats that are distinctive and comprise the "desired effects" recited as a limitation in Inventor Ditto's claims.

The panel's decision finishes the patenting process for Inventor Ditto.  However, the "product of nature" rejection before the Office remains unscrutinized and intriguing (and, truthfully and in full compliance with the Supreme Court's analytical protocol, is based in part on the prior existence -- i.e., on § 102 grounds -- of the breeding in nature).  But the question can be presented more starkly with the Savannah cat mentioned above.  This cat is bred solely with human intervention (there is no evidence that the African serval ever mated in the wild with a domestic cat and certainly not with an American domestic cat).  In addition, males in the F1 generation are sterile; indeed, it is not until the F4 generation that fertile males are produced.  This required backcrossing into the domesticated cat stock in order to produce cats that breed "true," i.e., that have both parents of the Savannah breed.  All of these aspects evince the "hand of man" and represent something that is the "product of human ingenuity 'having a distinctive name, character [and] use,'" Chakrabarty at 310, citing Hartranft v. Wiegmann, 121 U. S. 609, 121 U. S. 615 (1887).  Thus it is clear under prevailing precedent that the Savannah cat should comprise patent-eligible subject matter.  Although this question is beyond the scope of the question presented to the Supreme Court in the Myriad case or in Mayo v. Prometheus, the question remains whether this Court would find these "routine" and "conventional" breeding methods to provide "enough" for the Savannah cat to be "more than" a product of nature and become a patent-eligible product of man.

In re Ditto (Fed. Cir. 2012)
Panel: Circuit Judges Dyk, Prost, and Reyna
Opinion per curiam

Image of Pixie-bobs (above) by Angie 1900, from the Wikipedia Commons under the Creative Commons Attribution 3.0 Unported license.