Patent Docs

Takeda Pharmaceutical Co. v. Doll (Fed. Cir. 2009)

Another "Bright-Line" Rule from the Federal Circuit

    By Kevin E. Noonan --

The Supreme Court has had the occasion to overrule the Federal Circuit with prolixity over the past ten years.  And in many of those cases (including KSR Int’l Co. v. Teleflex Inc., eBay Inc. v. MercExchange, LLC, Quanta Computer, Inc. v. LG Electronics, Inc., Microsoft Corp. v. AT&T Corp., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Dickinson v. Zurko, and Medimmune, Inc. v. Genentech, Inc.), at least part of the Court's reasoning has been an attempt to prevent the Federal Circuit from developing and enforcing "bright line" rules where the Court believes a "totality of the circumstances" approach is more flexible and more consistent with the public interest that affects patent rights.  In part, this difference of opinion also stems from the two courts' fundamental disagreement about the Federal Circuit's role:  the appellate court sees its Congressional mandate to include not only harmonizing U.S. patent law nationwide but bringing consistency to patent law interpretation.  In this way, business people will be able to understand the metes and bounds of the patent grant with sufficient clarity that they can both avoid infringing activity and be prompted to further innovation without undue concern about the scope of third party patent rights.  (The Supreme Court, of course, sees the Federal Circuit more as a regional circuit court, subject to the Court's own vision of consistency in how certain legal principles -- such as declaratory judgment actions and injunctions, recently -- are applied.)

The Federal Circuit had the opportunity to make another "bright line" determination in Takeda Pharmaceutical Co. v. Doll, where the issue was whether after-developed technology could be considered when assessing obviousness-type double patenting.  The patents at issue involved cepham antibiotics, having an original U.S. filing date of December 19, 1975 (for the product patent, U.S. Patent No. 4,098,888) and a later filing date of  January 8, 1990 (for the process patent, U.S. Patent No. 5,583,216).  The issue was raised in a re-examination proceeding initiated in 1998 by two anonymous requests.  The Examiner asserted a rejection on obviousness-type double patenting grounds, which rejection was affirmed by the Board.  Takeda appealed to the District Court of the District of Columbia under 35 U.S.C. § 145, and introduced additional evidence with regard to alternative synthetic methods first disclosed in 2002 and 2005.  The parties stipulated that at least one of these methods was in fact a "materially-distinct" method, the District Court granted summary judgment that Takeda was entitled to a reexamination certificate, and the government appealed.

The Federal Circuit reversed and remanded, in part because there were genuine issues of material fact unresolved below.  This was due to the parties wanting the Federal Circuit to address the fundamental point of difference:  whether it was proper for courts and the Patent Office to consider after-developed technology (i.e., alternative, patentably-distinct processes for producing the cepham compounds claimed in the '888 patent) when deciding whether process claims are unpatentable under the judicially-created doctrine of obviousness-type double patenting.  In an opinion by Judge Rader, joined by Judge Moore and joined, in part, by Judge Schall, the Court started the analysis by noting that it had long been the law that the obviousness-type double patenting "doctrine bars an applicant from obtaining separate patents with separate terms for both a product and process for making that product, unless the product and process are 'patentably distinct,'" citing In re Taylor, 360 F.2d 232, 234 (C.C.P.A. 1966) and In re Cady, 77 F.2d 106, 109 (C.C.P.A. 1935).  The question of whether a product and a process for making that product were patentably-distinct was whether "the product as claimed can be made by another materially different process," citing M.P.E.P. § 806.05.  Returning to the Cady decision, the majority noted that "product and process claims are patentably distinct if multiple processes for creating a product exist at the time of the invention," Cady at 109.

But this begs the question:  that is "the time of the invention?"  The Patent Office argued that this was the priority date, or in the alternative no later than the date that the first patent issues; the Office provided no support for these propositions, except by analogy to other requirements for patentability (including §§ 102, 103, and 112).  Takeda, of course, believed that later-developed technology could be used to show that a process was patentably-distinct from the product produced thereby.  Takeda cited several cases in support of this proposition, but according to the Federal Circuit the main case (U.S. Steel Corp. v. Phillips Petroleum Co.) does not address the issue.

The Court decided that the Patent Office rule was too indeterminate, due to difficulties in deciding the "date of invention" (which could include the priority date, the filing date, the date of conception or reduction to practice, etc.); as noted in the dissent, these concerns seem unrealistic, since they are issues the Office and courts address and resolve every day.  The Court also rejected Takeda's position, as giving applicants "the best of both worlds: the applicant can use the filing date as a shield, enjoying the earlier priority date in order to avoid prior art, and rely on later-developed alternative processes as a sword to defeat double patenting challenges."

Instead, the Court considered the purpose of the obviousness-type double patenting doctrine:  preventing the "unjustified extension of the patent term."  From this perspective, the filing date of the second application is what "triggers" obviousness-type double patenting concerns, because, of course, without this filing there would be no "unjustified extension of the patent term."  The Court also considered the filing of the second application (without filing a terminal disclaimer) as constituting an assertion by the applicant that the claims are patentably distinct from the earlier-granted claims. 

While seeming Solomonic, prudence suggests that the logic and effects of this decision should be assessed before hailing its wisdom.  When an application with product claims is filed, the application must disclose a method for making the claimed compounds (to satisfy § 112, first paragraph).  These methods can either be patentable (and thus be the only method known for making the product) or known in the art (and thus irrelevant to the double-patenting analysis).  If the product claims are patentable on the original filing date, this should also be true on the date the later-filed process patent is filed.  In the absence of alternative, patentably-distinct (and presumably non-infringing) methods, granting a separate patent under these circumstances would permit the patentee to effectively extend patent term, since there would be no alternative, non-infringing method for making the product even after the product patent expired.  Thus, determining whether there are alternative, patentably-distinct (and presumably non-infringing) methods on the filing date of the second, process claim containing application as decided by the majority opinion is consistent with the policy goals of the obviousness-type double patenting doctrine.

On the other hand, if the patentee was limited to her filing date, then the only way a process would be independently patentable would be if there were known methods for making a patented compound.  This would be limited to instances where a known method of making was used to make a novel compound, or where known methods of making were modified to make a novel compound.  Otherwise, using the original filing date as espoused by the PTO would prevent independent patenting of compounds and methods per se.

The Court's decision also prevents later "validation" of patentability by alternative methods developed after the filing date of the process patent application.  In addition to the uncertainty of when such methods are evaluated (During prosecution?  In an infringement action?  During a reexamination or interference proceeding?), it would also perhaps encourage development of those methods by patentee, disclosed or not.  But in any event, permitting a patentee to use after-developed technology after the process patent filing date would introduce further uncertainty to the analysis.  This result is inconsistent with the Court's preoccupation with business certainty.

Judge Schall's dissent focused on the other requirements of the statute, which he says are relevant because obviousness-type double patenting is a patentability doctrine (as opposed to an equitable limit on separate patenting to prevent "unjustified extension of the patent term," which is the majority position).  His dissent was hardly scathing:  he characterizes the majority opinion as a "not-unreasonable attempt at compromise."  However, he dissents because there is, in his view, a fundamental logical inconsistency that after-developed processes can make an unpatentable process patentable.  He thinks the majority opinion permits an applicant to "have it both ways," by relying on its priority date to avoid subsequent art while relying on subsequent art to supplement its disclosure and render its process patentable.  "[T]here is no other doctrine or rule that allows unpatentable material to spring back into patentability based on later developments in the field," he writes.  He also has public policy concerns:

I am also concerned that the majority's approach could, in certain cases, result in the upsetting of reasonable expectations as to what is in the public domain.  . . .  Takeda is granted a product patent in year one.  At that time, only one process exists (Process A).  That process is disclosed, but not claimed, in the patent.  In year eighteen, the product patent expires, putting Process A fully into the public domain.  In addition, during the seventeen-year patent term, no other process has been developed, and thus Process A remains unpatentable separately because it is coextensive with the product patent . . .  Then, in year nineteen, a second process, called Process B, is invented for making the patented product.  The initial inventor then files a patent application on Process A (assume proper co-pendency with the product patent), triggering double-patenting concerns.  According to the majority's approach, this second process would cause Process A to become patentable, despite the fact that Process A and the resulting product were in the public domain for one year.  It seems to me such a result runs counter to public expectation and patent law's public notice function.

While Judge Rader characterized these concerns as "a stretch" (footnote 1 in the majority opinion), the real limitation on the effects of this decision is the change in U.S. law, pursuant to adoption of the GATT provisions in 1995, in the length of patent term for a U.S. patent to be 20 years from the earliest priority date instead of 17 years from grant date.  The decision thus can be seen as merely once again illustrating how the Federal Circuit continues to approach these policy decisions from its own unique perspective, something only occasionally in evidence recently.

Takeda Pharmaceutical Co. v. Doll (Fed. Cir. 2009)
Panel:  Circuit Judges Rader, Schall, and Moore
Opinion by Circuit Judge Rader; opinion concurring-in-part and dissenting-in-part by Circuit Judge Schall

Gene Patenting and the Wisdom of Judge Lourie

    By Kevin E. Noonan --

Biotechnology patent law faces the consequences of two decisions handed down last week by the Federal Circuit:  In re Kubin and Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co.  The first of these illustrates the folly of ignoring the wisdom of the In re Deuel decision, in applying established principles of chemical patent practice to avoid the philosophical error of finding a chemical compound obvious because methods for making an unpredictable compound were well known.  The second decision, on the other hand, reflects Judge Lourie's wisdom in recognizing that biotechnology was sufficiently complex that permitting applicants to obtain patents without requiring sufficient disclosure was equal folly, particularly when the technology was developing so rapidly that what an applicant could enable might outstrip what the applicant could describe.  While the Ariad Court reaffirmed this principle, Judge Linn's concurring opinion -- disagreeing that a written description requirement exists independently of the enablement requirement -- suggests that the Court may be forgetting (or choosing to ignore) the wisdom of making sure an applicant's reach does not exceed his or her grasp.

The Kubin decision was based on a misreading of both the Deuel decision and the Supreme Court's decision in KSR International Co. v. Teleflex Inc.  The situation in Deuel is well known but bears repeating.  The claims at issue were directed to specific nucleic acids encoding human (and bovine) heparin–binding growth factors.  The prior art consisted of a reference to certain brain proteins, disclosing partial amino acid sequence, and the Sambrook cloning manual.  The U.S. Patent and Trademark Office Board of Patent Appeals and Interferences affirmed rejection on obviousness grounds.  The Federal Circuit reversed, based on the absence of any structure in the prior art that could be used to support a finding that the claimed cDNAs would have been obvious to one having ordinary skill in the art.  As said clearly in Judge Lourie's opinion:

The PTO's focus on known methods for potentially isolating the claimed DNA molecules is also misplaced because the claims at issue define compounds, not methods.  See In re Bell, 991 F.2d 781, 785, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993).  In Bell, the PTO asserted a rejection based upon the combination of a primary reference disclosing a protein (and its complete amino acid sequence) with a secondary reference describing a general method of gene cloning.  We reversed the rejection, holding in part that "the PTO's focus on Bell's method is misplaced.  Bell does not claim a method.  Bell claims compositions, and the issue is the obviousness of the claimed compositions, not of the method by which they are made."  Id.

We today reaffirm the principle, stated in Bell, that the existence of a general method of isolating cDNA or DNA molecules is essentially irrelevant to the question whether the specific molecules themselves would have been obvious, in the absence of other prior art that suggests the claimed DNAs.  . . .  There must, however, still be prior art that suggests the claimed compound in order for a prima facie case of obviousness to be made out; as we have already indicated, that prior art was lacking here with respect to claims 5 and 7.  Thus, even if, as the examiner stated, the existence of general cloning techniques, coupled with knowledge of a protein's structure, might have provided motivation to prepare a cDNA or made it obvious to prepare a cDNA, that does not necessarily make obvious a particular claimed cDNA.  "Obvious to try" has long been held not to constitute obviousness.  In re O'Farrell, 853 F.2d 894, 903, 7 USPQ2d 1673, 1680-81 (Fed. Cir. 1988).  A general incentive does not make obvious a particular result, nor does the existence of techniques by which those efforts can be carried out.  Thus, Maniatis's teachings, even in combination with Bohlen, fail to suggest the claimed invention.

The Bell reference, mentioned in the Deuel opinion, disclosed a cDNA sequence for proteins (insulin-like growth factors) wherein the prior art disclosed the complete amino acid sequence.  Bell's claims were limited to the exact nucleotide sequence of the human cDNA, and the Federal Circuit's basis for reversing an obviousness rejection by the Board was that this sequence was but one of 10³⁶ possible nucleotide sequences that could encode these human proteins.  The cited routine methods for cloning could not have predicted this sequence, out of the 10³⁶ possible nucleotide sequences, as being the one that encoded the human gene.

The Deuel opinion reaffirmed this principle on structural non-obviousness grounds, and extended it to encompass claims reciting the nucleotide sequence in terms of the amino acid sequence it encoded.  Judge Lourie, noting that these "genus" claims had not been argued separately, raised but did not address the sufficiency of disclosure issue these claims posed:

One further matter requires comment.  Because Deuel's patent application does not describe how to obtain any DNA except the disclosed cDNA molecules, claims 4 and 6 may be considered to be inadequately supported by the disclosure of the application.  See generally Amgen Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 1212-14, 18 USPQ2d 1016, 1026-28 (Fed. Cir.) (generic DNA sequence claims held invalid under 35 U.S.C. § 112, first paragraph), cert. denied, 502 U.S. 856 (1991); In re Fisher, 57 C.C.P.A. 1099, 427 F.2d 833, 839, 166 USPQ 18, 24 (CCPA 1970) (Section 112 "requires that the scope of the claims must bear a reasonable correlation to the scope of enablement provided by the specification to persons of ordinary skill in the art.").  As this issue is not before us, however, we will not address whether claims 4 and 6 satisfy the enablement requirement of § 112, first paragraph, but will leave to the PTO the question whether any further rejection is appropriate.

Although focusing on the enablement requirement in this passage, in the event (Regents of California v. Eli Lilly) Judge Lourie (at left) focused the inquiry on the written description requirement (ably assisted by a cogent District Court decision by Judge S. Hugh Dillin).  The beauty of this line of reasoning was that it was completely consistent with prior Federal Circuit case law on the topic of sufficiency of disclosure for nucleic acid claims.  These include Amgen Inc. v. Chugai Pharmaceutical Co., which first articulated the principle that isolated genes should be considered in patent law like other chemical compounds ("A gene is a chemical compound, albeit a complex one, and it is well established in our law that conception of a chemical compound requires that the inventor be able to define it so as to distinguish it from other materials, and to describe how to obtain it," citing Oka v. Youssefyeh, 849 F.2d 581, 583, 7 U.S.P.Q.2d (BNA) 1169, 1171 (Fed. Cir. 1988)), and Fiers v. Revel ("An adequate written description of a DNA requires more than a mere statement that it is part of the invention and reference to a potential method for isolating it; what is required is a description of the DNA itself.  . . .  A bare reference to a DNA with a statement that it can be obtained by reverse transcription is not a description; it does not indicate that Revel was in possession of the DNA.").

In Eli Lilly, Judge Lourie set forth a bright-line rule of disclosure:

A written description of an invention involving a chemical genus, like a description of a chemical species, "requires a precise definition, such as by structure, formula, [or] chemical name," of the claimed subject matter sufficient to distinguish it from other materials, [citing] Fiers, 984 F.2d at 1171, 25 U.S.P.Q.2d (BNA) at 1606 [and] In re Smythe, 480 F.2d 1376, 1383, 178 U.S.P.Q. (BNA) 279, 284-85 (CCPA 1973) ("In other cases, particularly but not necessarily, chemical cases, where there is unpredictability in performance of certain species or subcombinations other than those specifically enumerated, one skilled in the art may be found not to have been placed in possession of a genus". . . .

In claims involving chemical materials, generic formulae usually indicate with specificity what the generic claims encompass.  One skilled in the art can distinguish such a formula from others and can identify many of the species that the claims encompass.  Accordingly, such a formula is normally an adequate description of the claimed genus.  In claims to genetic material, however, a generic statement such as "vertebrate insulin cDNA" or "mammalian insulin cDNA," without more, is not an adequate written description of the genus because it does not distinguish the claimed genus from others, except by function.  It does not specifically define any of the genes that fall within its definition.  It does not define any structural features commonly possessed by members of the genus that distinguish them from others.  One skilled in the art therefore cannot, as one can do with a fully described genus, visualize or recognize the identity of the members of the genus.  A definition by function, as we have previously indicated, does not suffice to define the genus because it is only an indication of what the gene does, rather than what it is.  See Fiers, 984 F.2d at 1169-71, 24 U.S.P.Q.2d (BNA) at 1605-06 (discussing Amgen).  It is only a definition of a useful result rather than a definition of what achieves that result.  Many such genes may achieve that result.  The description requirement of the patent statute requires a description of an invention, not an indication of a result that one might achieve if one made that invention.  See In re Wilder, 736 F.2d 1516, 1521, 222 U.S.P.Q. (BNA) 369, 372-73 (Fed. Cir. 1984) (affirming rejection because the specification does "little more than outline goals appellants hope the claimed invention achieves and the problems the  invention will hopefully ameliorate.").  Accordingly, naming a type of material generally known to exist, in the absence of knowledge as to what that material consists of, is not a description of that material.

Tempered with the possibility that in the appropriate circumstances something other that a nucleotide sequence would satisfy the requirement:

A description of a genus of cDNAs may be achieved by means of a recitation of a representative number of cDNAs, defined by nucleotide sequence, falling within the scope of the genus or of a recitation of structural features common to the members of the genus, which features constitute a substantial portion of the genus . . . .  This is analogous to enablement of a genus under § 112, P 1, by showing the enablement of a representative number of species within the genus.  . . .  We will not speculate in what other ways a broad genus of genetic material may be properly described.

The benefit of this analysis is that it avoids the question of enablement, since a disclosure of one mammalian species ortholog may enable production of others (indeed, this first isolation may be the Rubicon across which all mammalian orthologs are easily obtained, wherein the art did not describe or enable any species prior to its isolation), but without actually obtaining and disclosing it, an applicant is foreclosed from claiming it.

While occasionally losing its way (as in Enzo v. Genprobe I), the calculus developed by Judge Lourie has produced a fruitful equipoise between obviousness and written description for gene patenting over the past decade and a half.  On the one hand, the Court's application of the written description requirement ensured that applicants claiming a gene or nucleic acid must be in possession of the molecule.  Indeed, the U.S. Patent and Trademark Office has promulgated Written Description Guidelines (on January 6, 2001) and revised Training Materials (on March 25, 2009) specifically addressing the scope of disclosure required to support a nucleic acid claim.  This has restricted the scope of these claims to limit them, for example, to encoding the disclosed amino acid sequence and not to encompass substitutions (even conservative ones), insertions, or deletions while permitting fusion proteins in some instances.  This approach was approved sub silentio in Kubin, where the Court, despite evident interest at oral argument, chose not to rule on how the Office was applying these rules.

On the other hand, Deuel permitted genes that were not disclosed in the art to be patented without obviousness objections.  There is certainly a limit where what is known in the art can, asymptotically, approach obviousness, even in the absence of any known nucleic acid sequence.  This is illustrated by In re Bell, where the art disclosed the complete amino acid sequence and thus the claims were limited to a single disclosed nucleic acid species, based on the lack of disclosure in the art as to which of the 10³⁶ possible molecules actually encoded the human gene species.  And as the art develops, it becomes more and more routine to obtain cDNA species, impacting the scope of the gene claims that are non-obvious.

This disruption of Judge Lourie's careful balance in Kubin (and the threat Judge Linn's Ariad concurrence raises to written description as a separate requirement) raises again issues of disproportionate application of patent law to certain patentable subject matter, i.e., DNA.  It is certainly the case that the progress is not promoted by granting claims of broad scope to disclosures not commensurate therewith.  But biotechnology provides something no other technology can:  the capacity to produce useful quantities of proteins that form, in many instances, biologic drugs or the means to obtain them.  We can, of course, promote a policy where developing these drugs and technologies becomes more difficult and attracts less investment.  The question that immediately comes to mind is, why would we want to do that?

Digene Corp. v. Third Wave Technologies, Inc. (Fed. Cir. 2009)

    By Donald Zuhn --

On April 1st, the Federal Circuit affirmed the judgment of the District Court for the Western District of Wisconsin that Defendant-Cross Appellant Third Wave Technologies, Inc. did not infringe U.S. Patent No. 5,643,715, owned by Plaintiff-Appellant Digene Corp.  The panel also affirmed the District Court's grant of summary judgment dismissing Third Wave's antitrust counterclaims.

The '715 patent relates to the diagnosis of human papillomavirus (HPV) type 52, which is one of several HPV strains known to cause cervical cancer.  The '715 patent describes the differentiation of HPV type 52 from other HPV types using "nucleic acid hybridization probes which are specific for HPV type 52."  Both Digene and Third Wave make HPV testing systems; Third Wave's system utilizes a nucleic acid molecule that includes a sequence that is homologous to HPV type 52 and an additional sequence that serves as "an indicator of the HPV's presence."

In January 2007, Digene brought suit against Third Wave for infringement of claims 8, 10-12, and 18-27 of the '715 patent.  Asserted claims 18 and 21 include all of the limitations that were contested on appeal (contested limitations are underlined):

18.  An HPV 52 hybridization probe comprising a member selected from the group consisting of
    (i)  HPV 52 DNA labelled with a detectable label, and
    (ii)  HPV 52 RNA labelled with a detectable label,
    wherein the length of the HPV 52 DNA or HPV 52 RNA is between approximately 15 and 8000 nucleotide bases,
    wherein the HPV 52 DNA consists of all or a fragment of an HPV DNA, wherein the HPV DNA cross-hybridizes to the HPV portion of clone pCD15 to greater than 50% under moderately stringent conditions,
    wherein the HPV 52 RNA consists of all or a fragment of an HPV RNA, wherein the HPV RNA cross-hybridizes to the HPV portion of clone pCD15 to greater than 50% under moderately stringent conditions, and
    wherein the HPV 52 DNA and HPV 52 RNA do not hybridize to DNA from HPV types 1 through 51 under stringent conditions.

21.  An HPV hybridization probe composition comprising
    (a)  a member selected from the group consisting of
        (i)  HPV 52 DNA labelled with a detectable label and
        (ii)  HPV 52 RNA labelled with a detectable label,
    wherein the length of the HPV 52 DNA or HPV 52 RNA is between approximately 15 and 8000 nucleotide bases,
    wherein the HPV 52 DNA consists of all or a fragment of an HPV DNA, wherein the HPV DNA cross-hybridizes to the HPV portion of clone pCD15 to greater than 50% under moderately stringent conditions,
    wherein the HPV 52 RNA consists of all or a fragment of an HPV RNA, wherein the HPV RNA cross-hybridizes to the HPV portion of clone pCD15 to greater than 50% under moderately stringent conditions, and
    wherein the HPV 52 DNA and HPV 52 RNA do not hybridize to DNA from HPV types 1 through 51 under stringent conditions, and
    (b) DNA or RNA of at least one other HPV type labelled with a detectable label.

The District Court construed the contested limitations as follows:

• "HPV 52 hybridization probe" (claim 18) means a "nucleic acid molecule that is specific for HPV 52 DNA and that differentiates HPV 52 DNA from DNA of all other types";

• "HPV 52 DNA labelled with a detectable label" (claims 18 and 21) means "HPV 52 DNA that has a detectable label that is not DNA" (since, given the Court's other constructions, the label could not be DNA);

• "between approximately 15 and 8000 nucleotide bases" (claims 18 and 21) means "between 15 and approximately 8000 nucleotide bases" (since the applicant disavowed fewer than 15 bases during prosecution);

• "HPV hybridization probe" (claim 21) means a "nucleic acid molecule that is specific for the DNA of any one type of HPV and differentiates the DNA of that type from DNA of all other HPV types"; and

• "HPV 52 DNA consists of all or a fragment of an HPV DNA" (claim 21):  "HPV 52 DNA" means "a DNA molecule that is only type 52 HPV" (since the applicant disclaimed a molecule including fragments of later-discovered HPV types by stating during prosecution that "the claimed HPV 52 DNA must be derived from only type 52 HPV DNA") and "consists of all or a fragment of an HPV DNA" means "consists of all or a fragment of one HPV DNA that does not contain any other DNA" (since "an" means "one and only one" when following the transitional phrase "consists of").

On appeal, Digene argued that the District Court misconstrued the phrase "HPV 52 DNA consists of all or a fragment of an HPV DNA" by disregarding the inventor's definition of "HPV 52 DNA" in the prosecution history and claims themselves.  In particular, Digene argued that in the context of the '715 patent, "HPV 52 DNA" is defined by length (approximately 15 and 8000 nucleotides), cross-hybridization with a deposited clone under moderately stringent conditions, and failure to cross-hybridize with HPV types 1-51 under stringent conditions (as opposed to being defined by nucleotide sequence).  In other words, Digene contended that HPV 52 sequences in which "certain" nucleotides had been replaced were still HPV 52 DNA sequences.  As for the statement made during prosecution (i.e., "the claimed HPV 52 DNA must be derived from only type 52 HPV DNA"), Digene argued that it referred to the origin of the DNA and not its specific structure.

Digene also argued that the District Court erroneously limited the term "an HPV DNA" in the contested claim 21 limitation "HPV 52 DNA consists of all or a fragment of an HPV DNA" to "one HPV DNA that does not contain any other DNA."  With respect to this claim term, Digene contended that the overall transitional phrase in the claim was "comprising," and therefore, the term "an" in "an HPV DNA" should have been construed as "one or more."  Digene also argued that the District Court's construction would result in the exclusion of mutations, subtypes, and synthesized DNA.

Third Wave, not surprisingly, took an opposite position with respect to each of Digene's arguments.  In addition, Third Wave asserted that because claim 21 recites both "HPV 52 DNA" and "DNA . . . of at least one other HPV type," the term "HPV 52 DNA" must be limited to DNA of only type 52 and not include DNA of another HPV type.

Siding with Third Wave, the Federal Circuit found that the District Court reasonably construed the phrase "HPV 52 DNA consists of all or a fragment of an HPV DNA."  In particular, the panel agreed that by reciting both "HPV 52 DNA" and "DNA . . . of at least one other HPV type" in claim 21, Digene distinguished HPV 52 DNA from the DNA of other HPV types, thereby supporting Third Wave's position that "HPV 52 DNA" means "a DNA molecule that is only type 52 HPV."  The Court also found that applicant's statement that "the claimed HPV 52 DNA must be derived from only type 52 HPV DNA" indicated that applicant had disclaimed a meaning of "HPV 52 DNA" that was derived from anything but HPV 52 DNA.  In addition, the panel noted that the District Court had been correct in construing "an" after the transitional phrase "consisting of" as meaning "one," stating that "[i]f the term 'consists of' appears in the body of a claim, it does not limit the entire claim as such, but it does limit the clause for which it acts as a transition to only those elements found in that particular clause."  Finally, the Court agreed with Third Wave that the District Court's construction did not exclude possible mutations or subtypes.  With respect to the other claim terms, the panel noted that because "Digene candidly conceded that it could not prove infringement under the district court's claim constructions of 'HPV 52 DNA consists of all or a fragment of an HPV DNA'" at oral argument, the panel did not need to address the remaining terms in light of Digene's concession."

Digene Corp. v. Third Wave Technologies, Inc. (Fed. Cir. 2009)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Rader, and Prost
Opinion by Circuit Judge Lourie

For additional information regarding this case, please see:
• "Digene Files Infringement Suit against Third Wave Technologies," January 17, 2007

Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. (Fed. Cir. 2009)

    By Andrew Williams --

On Friday, the Federal Circuit issued its decision in Ariad Pharmaceuticals, Inc. v. Eli Lilly & Co., reversing the U.S. District Court for the District of Massachusetts's denial of Lilly's motion for JMOL in view of a jury verdict of infringement and validity of the asserted claims, and affirming the District Court's ruling that Lilly failed to establish the affirmative defense of inequitable conduct.

The Ariad case involved the technology of gene regulation, and specifically the transcription factor NF-κB.  NF-κB was first identified as playing a role in the expression of genes involved in the immune system, specifically in the regulation of the expression of the gene encoding the kappa immunoglobulin gene in B cells, which are specialized immune cells.  It was eventually discovered in the labs of Dr. David Baltimore and his collaborators that NF-κB did much more than regulate a single immune protein, playing a crucial role in the precise control of the expression of various genes and their protein products that are responsible for the response of cells to various and disparate stimuli, including bacterial lipopolysaccharides, certain cytokines, and even sunlight.  NF-κB is now known to be involved in expression of proteins that are associated with many different processes, including the inflammatory response and regulation of the immune system.  As can be imagined, NF-κB activity is tightly controlled in the cell.  When present in the cytoplasm, NF-κB is in an inactive state, bound to another protein, IκB, the natural inhibitor.  NF-κB is then activated when various stimuli external to the cell cause the NF-κB-IκB complex to dissociate, allowing the transcription factor to travel into the nucleus and bind NF-κB recognition sites found in various promoters.  This binding results in the production of many different proteins.  Then, when the stimulus is removed, the cell returns to a state in which NF-κB is inactive.  When this natural cycle of NF-κB control is disrupted, however, NF-κB can continue producing protein, often to the detriment of the cell, and can result in various diseases and conditions, ranging from sepsis, cancer, and AIDS.

In the mid-1980s, Drs. Baltimore, Philip Sharp, Thomas Maniatis, and ten other scientists at the Massachusetts Institute of Technology, the Whitehead Institute for Biomedical Research, and Harvard University, filed several patent applications related to their work identifying and characterizing NF-κB.  These separate applications, with Dr. Baltimore (at right) as the only common thread, were combined in a single application filed on November 13, 1991.  Eventually, on June 5, 1995, the application that gave rise to the patent-at-issue was filed, claiming priority to this previous application and containing essentially an identical specification.  The applicants, in this June 1995 application, sought claims for artificially reducing NF-κB activity in cells in order to prevent the problems when NF-κB activity runs amok.  In the end, after a lengthy prosecution, U.S. Patent No. 6,410,516 issued with 203 claims -- 197 of which contain the same single step of either "reducing" or "altering" NF-κB activity in cells (the remaining 6 claims were not asserted in this litigation).  However, none of these 197 claims, including claims 80, 95, 144, and 145 at issue in this case, indicated how NF-κB was to be reduced or altered.

The history of the present litigation dates back to June 25, 2002, when Ariad filed its complaint on the same day that the '516 patent issued, alleging that certain claims were infringed by two of Lilly's drugs, Evista®, used for the prevention and treatment of post-menopausal osteoporosis, and Xigris®, used for the treatment of adult patients with severe sepsis who are at high risk of death.  After a fourteen-day trial in April 2006, a Massachusetts jury determined that the asserted claims were not anticipated by prior art or public use, that the specification enabled and adequately described the claims, and that the use of Evista® and Xigris® infringed the asserted claims.  The jury also determined that the effective filing date of the '516 patent was April 12, 1989.  Lilly subsequently moved for judgment as a matter of law, which the District Court denied.  After a four-day bench trial in August 2006, the District Court ruled that the asserted claims were directed to patentable subject matter and that the '516 patent was not unenforceable due to inequitable conduct or prosecution latches.  Lilly appealed all of these rulings except the ruling on prosecution latches.  In the Ariad decision, however, the Federal Circuit limited its invalidity holding to the issue of written description, and as a result did not comment on all of the other validity issues.  It can be noted, however, that in a current reexamination proceeding of the '516 patent, the Patent Office has finally rejected certain claims, including the asserted claims, based on inherent anticipation -- a decision from which the patentees have filed a Notice of Appeal to the Board.  Also, the Federal Circuit's affirmation of the lack of inequitable conduct will be addressed in a subsequent post.

On appeal, the Federal Circuit had the opportunity to further expand its written description jurisprudence, potentially extending the rules as established in cases such as Univ. of Rocherster v. G.D. Searle & Co., 358 F.3d 916 (Fed. Cir. 2004) and Carnegie Mellon Univ. v. Hoffmann La Roche Inc., 541 F.3d 1115 (Fed. Cir. 2008).  However, the Ariad decision predominantly turned on the lack of evidence to support a finding that the inventors were in possession of the claimed invention on April 21, 1989, the effective filing date of the patent as determined by the jury, mainly because Ariad's evidence was directed to demonstrating possession as of November 13, 1991.  As the Court pointed out, "evidence of what one of ordinary skill in the art knew in 1990 or 1991 cannot provide substantial evidence" that the claims were adequately described in 1989.  Another important factor mentioned in determining possession is the context of claimed invention, but because Ariad had touted the fact that the subject matter of the patent "required years of hard work, great skill, and extraordinary creativity," the Court easily found that this patent was "in a new and unpredictable field where the existing knowledge and prior art was scant."  The Court concluded that because there was insufficient evidence that the '516 patent described any method for reducing NF-κB activity as of April 21, 1989, including a description of the molecules that are necessary to perform these methods, the asserted claims were invalid for failing the written description requirement.

Turning to what the Federal Circuit did determine to be disclosed in the '516 application family as of April 21, 1989, there were three, and only three, hypothetical classes of molecules that were disclosed as potentially being capable of reducing NF-κB activity:

• Specific inhibitors -- molecules that are able to block NF-κB binding to DNA in the nucleus.  The Court noted that there was only one example of a specific inhibitor provided in the specification, the naturally occurring IκB.  The Court also found that almost of the evidence provided regarding the disclosure of IκB relied on a particular drawing in the application, figure 43.  However, figure 43 was not present in the 1989 application, and was not added until the 1991.  Further, the only other testimony by Ariad's expert was his opinion that one of ordinary skill could have isolated natural IκB through experimentation.  The Court held that such a vague functional description and an invitation for additional research cannot constitute written disclosure of a specific inhibitor, much less written disclosure of a method for reducing NF-κB activity by using IκB.

• Dominantly interfering molecules -- truncated forms of the NF-κB molecule that would retain the DNA binding domain, but lack the RNA polymerase activating domain, resulting in a binding event that would be unproductive, and blocking the natural form of the protein from inducing expression.  The Court noted that there were no examples of this class of molecules.  In fact, the '516 specification merely states that dominantly interfering molecules could be theoretically possible, but only if the two domains are spatially distinct on the molecule.  If the patentees of the '516 patent didn't know whether the two domains were distinct, the Court surmised, what hope was there for one of ordinary skill.  The Court also found it irrelevant that others were practicing dominantly interfering molecules of NF-κB shortly after the 1989 application, because the description of this class of molecules in the application as of the effective filing date was merely a wish, or arguably a plan, for future research.

• Decoy molecules -- molecules designed to mimic the NF-κB-binding site on genes whose expression would normally be induced by NF-κB, thereby competing for binding of the transcription factor, and preventing NF-κB from binding to its natural target.  The Court did find that the specification adequately described actual decoy molecules, albeit hypothetically, in a table providing the NF-κB binding sites for various genes.  However, the Court felt that this disclosure did not describe a method of using those molecules to reduce NF-κB activity, and therefore the application contained nothing more than a mere mention of a desired outcome.

It is worth noting that even if the effective priority date had been November 1991, the outcome would likely have been the same.  The Court noted that the '516 patent contains "no working or even prophetic examples of methods that reduce NF-κB activity, and no completed syntheses of any of the molecules prophesized to be capable of reducing NF-κB activity."  And, because the state of the art was primitive and uncertain, Ariad could not rely on "prior art knowledge to fill the gaping holes in its disclosure."  Even with the finding that decoy molecules were provided for in the specification, there was no accompanying description that they could be used to reduce NF-κB activity.  Of course, had Ariad argued for the later effective priority date, then it is possible that they would have had a different set of problems, such as the anticipation rejection(s) found in the Reexamination proceeding where the Patent Office assigned the November 1991 priority date to the asserted claims.  This fact was not mentioned by the Court.

The Court also quickly dispensed with Ariad's attempt to distinguish this case from the prior cases of Rochester, Fiers, and Eli Lilly by arguing that the asserted claims of the '516 were claiming methods for reducing NF-κB, and not specific molecules.  As such, Ariad posited, they were not required to describe the compositions required to carry out the claimed methods.  Ariad pointed out that each of the previous cases explicitly required the non-described compositions in the claims, whereas the '516 patent claims do not.  The Court pointed out, however, that even if a composition is not part of a claim, the specification must demonstrate that Ariad possessed the claimed method by sufficiently disclosing molecules capable of reducing NF-κB activity to demonstrate the patentee was in possession of the invention that is claimed.

Interestingly, the Federal Circuit commented on how broad the claims were, and appeared to take Ariad to task for maintaining such breath through claim construction and into trial.  However, the Court appeared to ignore the fact that Ariad was forced to seek such a broad claim construction in order to maintain infringement suits against such diverse pharmaceuticals as Evista, a small molecule, and Xigris, a recombinant human protein.

Judge Linn joined the opinion of the Court, but provided a separate concurrence.  He reiterated his belief that he expressed dissenting in the denials of rehearing en banc of the Rochester case and Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956 (Fed. Cir. 2002), that the engrafting of a separate written description requirement is misguided.  According to Judge Linn, § 112, first paragraph, should require no more than the specification enable a person skilled in the art to make and use the claimed invention and set forth the best mode for carrying out the invention.  Moreover, Judge Linn noted that because the Court decided the validity issue solely on written description, the majority failed to consider the important enablement issue raised by Lilly.  Thus, the issue of whether claims that are broad enough to cover any method to achieve a particular result can ever be valid, since the specification cannot enable unknown methods, was left unresolved -- an outcome that would not have occurred, Judge Linn noted, if there was not a separate written description requirement.

Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. (Fed. Cir. 2009)
Panel:  Circuit Judges Linn, Prost, and Moore
Opinion by Circuit Judge Moore; concurring opinion by Circuit Judge Linn

Additional Disclaimer:  MBHB represented Eli Lilly and Co. at trial in the U.S. District Court for the District of Massachusetts.  To the extent that this case summary contains any opinions, the opinions would be of Dr. Williams and not Eli Lilly and Co. or MBHB.

In re Kubin (Fed. Cir. 2009)

    By Kevin E. Noonan --

The sky isn't falling.  But it's becoming increasingly clear that when the Supreme Court sneezes, the Federal Circuit gets a cold (if not pneumonia).  And the questions continue about whether the Federal Circuit as currently constituted has the institutional fortitude to exercise its Congressional mandate to harmonize patent law in this country.

The case, of course, raising these issues anew is In re Kubin, decided on Friday.  In its decision, the Federal Circuit not only affirmed the finding by the Board of Patent Appeals and Interferences that Kubin's invention was obvious, but in the process decided that the Supreme Court had overturned the Federal Circuit's In re Deuel decision.  This outcome is sufficiently disappointing in itself; the reasoning is all the more so.  But there are lessons to be learned, and some glimmer of hope that this decision has come just too late to make much difference (i.e., harm innovation) for biotechnology patents.

As Patent Docs readers will remember, this case involves a rejection on obviousness grounds for claims to cDNA encoding human NAIL protein, in which the U.S. Patent and Trademark Office asserted two relevant prior art documents:  a reference disclosing the existence of a protein, p38, later found to be encoded by the NAIL cDNA invented by Kubin; and Sambrook et al. (aka: the Maniatis cloning manual), that old standby of what was routine in the art.  (There was another reference to Matthew regarding cloning of the mouse gene homolog, but while this reference certainly informed the Office's thinking -- and, it appears, Judge Rader's -- it was not cited in support of the obviousness determination.)  In making its obviousness determination, the Patent Office raised a host of factual distinctions between the technology extant when In re Deuel was decided and the technology available today.  Of course, the Office is well aware that its best chances for affirmance lay in these factual questions, because the Federal Circuit is bound to give deference to the Office's determination on fact issues (Dickinson v. Zurko; In re Gartside) while it reviews obviousness and other questions of law de novo.

The Office's reliance on these factual issues was prescient, since in many ways the Federal Circuit's decision was based on its misunderstanding of the crucial factual distinctions between the cited art (and even more importantly, the Matthew reference) and Kubin's invention.  The Court's opinion, written by Judge Rader in which Judges Linn and Friedman joined, set out the "factual" bases upon which the Board, and the Court, relied in deciding Kubin's claimed cDNA was obvious.  The opinion notes that:

This emphasis on similarities or differences in methods of deriving the NAIL DNA misses the main point of this obviousness question.  Of note, the record nowhere suggests that the technique in Valiante's Example 12 for isolating NAIL (p38) DNA, even if slightly different than the technique disclosed in the claimed invention, would not yield the same polynucleotide claimed in claim 73.  Stated directly, the record shows repeatedly that Valiante's Example 12 produces for any person of ordinary skill in this art the claimed polynucleotide.

This was the Court's first mistake, evidencing that they were not listening (or did not understand, or were too focused on the outcome to be deterred by inconvenient facts) when Kubin's counsel brought up that critical distinction:

Judge Rader (at right):  No, it tells one of skill in the art how to produce those libraries, and when you [have] the probe it's not so hard to do.

Rudolph:  It does not tell one with skill in the art how to produce a NK cell library, and if you look at the methodology that's recited in the specification, what they [Kubin] used was a specific mixture of resting cells, resting NK cells and NK cells stimulated with a very specific cocktail of activators.  That's not disclosed in Sambrook.  That's not disclosed in Valiante.  That's not disclosed anywhere[.]

The Court then turns the rationale of In re Deuel on it head:

More to the point, however, any putative difference in Valiante's/Sambrook's and appellants' processes does not directly address the obviousness of representative claim 73, which claims a genus of polynucleotides.  The difference between Valiante's and the application's techniques might be directly relevant to obviousness in this case if Kubin and Goodwin had claimed a method of DNA cloning or isolation.  But they did not.  Appellants claim a gene sequence.  Accordingly, the obviousness inquiry requires this court to review the Board's decision that the claimed sequence, not appellants' unclaimed cloning technique, is obvious in light of the abundant prior art.

This statement misses, or simply ignores, the evidence that performing the methods of the prior art would not have resulted in production of the claimed genus of polynucleotides.

The point, eloquently made in Deuel (and recognized by Judge Rader in oral argument as the Court's emphasis on "structure, structure, structure" for chemical obviousness) has always been:

The PTO's focus on known methods for potentially isolating the claimed DNA molecules is also misplaced because the claims at issue define compounds, not methods.  See In re Bell, 991 F.2d 781, 785, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993).  In Bell, the PTO asserted a rejection based upon the combination of a primary reference disclosing a protein (and its complete amino acid sequence) with a secondary reference describing a general method of gene cloning.  We reversed the rejection, holding in part that "the PTO's focus on Bell's method is misplaced.  Bell does not claim a method.  Bell claims compositions, and the issue is the obviousness of the claimed compositions, not of the method by which they are made."  Id.

We today reaffirm the principle, stated in Bell, that the existence of a general method of isolating cDNA or DNA molecules is essentially irrelevant to the question whether the specific molecules themselves would have been obvious, in the absence of other prior art that suggests the claimed DNAs.  . . .  There must, however, still be prior art that suggests the claimed compound in order for a prima facie case of obviousness to be made out; as we have already indicated, that prior art was lacking here with respect to claims 5 and 7.  Thus, even if, as the examiner stated, the existence of general cloning techniques, coupled with knowledge of a protein's structure, might have provided motivation to prepare a cDNA or made it obvious to prepare a cDNA, that does not necessarily make obvious a particular claimed cDNA.  "Obvious to try" has long been held not to constitute obviousness.  In re O'Farrell, 853 F.2d 894, 903, 7 USPQ2d 1673, 1680-81 (Fed. Cir. 1988).  A general incentive does not make obvious a particular result, nor does the existence of techniques by which those efforts can be carried out.  Thus, Maniatis's teachings, even in combination with Bohlen, fail to suggest the claimed invention.

Unfortunately, the panel was able to extract disclosure that supported their hindsight reconstructions of the inventive event:

In particular, appellants' arguments that Valiante and Sambrook are deficient because they do not provide "any guidance for the preparation of cell culture that will serve as a useful source of mRNA for the preparation of a cDNA library," Appellants' Br. 34, are diminished by appellants' own disclosure:

A "nucleotide sequence" refers to a polynucleotide molecule in the form of a separate fragment or as a component of a larger nucleic acid construct.  The nucleic acid molecule has been derived from DNA or RNA isolated at least once in substantially pure form and in a quantity or concentration enabling identification, manipulation, and recovery of its component nucleotide sequences by standard biochemical methods (such as those outlined in Sambrook et al., Molecular Cloning: A Laboratory Manual, 2nd ed., Cold Spring Harbor Laboratory, Cold Spring Harbor, NY (1989)).

'859 Application at 16-17 (emphasis added).  Thus, Kubin and Goodwin cannot represent to the public that their claimed gene sequence can be derived and isolated by "standard biochemical methods" discussed in a well-known manual on cloning techniques, while at the same time discounting the relevance of that very manual to the obviousness of their claims.

From this, it became a simple matter for the Court to have the question devolve into a factual one, so that the Court can defer to the Board's determination on the facts instead of deciding the issue (as it should) as a matter of law:

For this reason as well, substantial evidence supports the Board's factual finding that "[a]ppellants employed conventional methods, 'such as those outlined in Sambrook,' to isolate a cDNA encoding NAIL and determine the cDNA's full nucleotide sequence (SEQ NOS: 1 & 3)."  Board Decision at 5.

In its consideration of the Matthew reference, which the Court characterizes as showing "the relative ease of deriving the claimed sequence following the teachings of the prior art," the Court follows the Board's lead in focusing on whether the reference taught that there would be a human homolog for the 2B4 (mouse) gene.  The evidence of Matthew could have strongly supported the Court's reasoning, except for the fact that the gene identified in the Matthew reference was recognized as being the mouse homolog for human NAIL only after Kubin's filing date (which is why the Board found it to be cumulative -- it wasn't properly prior art at all).  If the evidence established that Kubin had done nothing more that rote recapitulation of Matthew's methods, then the Court's conclusions might have some logical merit.  In fact, the evidence was that Kubin (and the worker of ordinary skill in the art) would have been unsuccessful had they merely performed what Matthew (and Valiente and Sambrook) informed them to do.  The Court did not seem to appreciate this distinction.

One distinction raised in oral argument that was unavailing was Kubin's emphasis on CD48 binding and the portion of human NAIL involved in this binding.  While agreeing that the prior art was silent on these aspects of NAIL biology, it was "a distinction without a difference" to the panel -- "the Kubin-Goodwin application itself instructs that CD48 binding is not an additional requirement imposed by the claims on the NAIL protein, but rather a property necessarily present in NAIL."  Finding that there was substantial evidence that Valiante's p38 was identical to the NAIL protein encoded by Kubin's disclosed cDNA, the Court found substantial evidence that the CD48 binding properties were inherent (citing, appropriately, the Supreme Court's decision in General Electric Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 249 (1945), that "It is not invention to perceive that the product which others had discovered had qualities they failed to detect").

Turning to In re Deuel, the Court focused on its reliance on when "obvious to try" can rise to the level of obviousness; as a starting point, the Court cited this portion of the Deuel decision:

[T]he existence of a general method of isolating cDNA or DNA molecules is essentially irrelevant to the question whether the specific molecules themselves would have been obvious, in the absence of other prior art that suggests the claimed DNAs.  . . .  "Obvious to try" has long been held not to constitute obviousness.  A general incentive does not make obvious a particular result, nor does the existence of techniques by which those efforts can be carried out.

In doing so, the Court expressly followed the Board's lead:  in its Ex parte Kubin decision, the Board said:

To the extent Deuel is considered relevant to this case, we note the Supreme Court recently cast doubt on the viability of Deuel to the extent the Federal Circuit rejected an '"obvious to try" test.  See KSR Int'l Co. v. Teleflex Inc., 127 S. Ct. 1727, __, 82 U.S.P.Q. 2d 1385, 1394, 1396 (2007) (citing Deuel, 51, F.3d at 1559).  Under KSR, it's now apparent "obvious to try" may be an appropriate test in more situations than we previously contemplated.  Board Decision at 8.

Ironically, the Patent Office capitulated during oral argument regarding their long-expressed desire for the Court to overturn Deuel.  Rather, Janet Gongola, arguing for the Office, distinguished Deuel, citing that portion of the decision that stated "[a] prior art disclosure of the process reciting a particular compound is another matter raising issues of anticipation and obviousness" and saying "[w]e are that other matter."  In its decision, however, the Court went much further than the Board, or the Supreme Court, had gone:

Insofar as Deuel implies the obviousness inquiry cannot consider that the combination of the claim's constituent elements was "obvious to try," the Supreme Court in KSR unambiguously discredited that holding.

The key, of course, is in the "insofar":  while the Deuel opinion can fairly be interpreted as overstating the principle, that decision did not (and could not) overturn the holding in In re O'Farrell that while sometimes what is obvious to try is also obvious, it is not the case that just because something is obvious to try that it must be obvious (which in fairness was the Patent Office's position in Deuel).

The Court arrived at its misinterpretation of Deuel by equally overestimating the Supreme Court's sneeze in its direction:

In fact, the Supreme Court expressly invoked Deuel as a source of the discredited "obvious to try" doctrine.  The KSR Court reviewed this court's rejection, based on Deuel, of evidence showing that a particular combination of prior art elements was obvious because it would have been obvious to one of ordinary skill in the art to attempt such a combination:

The only declaration offered by KSR -- a declaration by its Vice President of Design Engineering, Larry Willemsen -- did not go to the ultimate issue of motivation to combine prior art, i.e. whether one of ordinary skill in the art would have been motivated to attach an electronic control to the support bracket of the assembly disclosed by Asano.  Mr. Willemsen did state that an electronic control "could have been" mounted on the support bracket of a pedal assembly.  (Willemsen Decl. at P33, 36, 39.)  Such testimony is not sufficient to support a finding of obviousness, however.  See, e.g., In re Deuel, 51 F.3d 1552, 1559 (Fed. Cir. 1995) ("'Obvious to try' has long been held not to constitute obviousness.").

Ironically, the Supreme Court illuminated the proper analysis for distinguishing when something is obvious to try is also obvious by restating the standards enunciated (in slightly different form) in O'Farrell:

When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.  If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.  In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.

i.e., sometimes, but not all the time, something that is obvious to try is also obvious.  Whatever effects the Supreme Court's KSR decision has had on patent law, this statement does not represent a major change.

But it certainly had an effect on this panel's judgment.  While recognizing the consonance between O'Farrell's teachings on the obvious to try standard and that set forth in KSR, the panel focused on the following statement of the proper analysis under O'Farrell:

Specifically, this court observed that an obviousness finding was appropriate where the prior art "contained detailed enabling methodology for practicing the claimed invention, a suggestion to modify the prior art to practice the claimed invention, and evidence suggesting that it would be successful."  853 F.2d at 902 (emphasis added).  Responding to concerns about uncertainty in the prior art influencing the purported success of the claimed combination, this court stated:  "[o]bviousness does not require absolute predictability of success . . . all that is required is a reasonable expectation of success."  Id. at 903-04 (emphasis added).  The Supreme Court in KSR reinvigorated this perceptive analysis.

The panel then found that Kubin's claims fell within this class of situations when something that is obvious to try is also obvious.  The Court enumerated the factual predicates for applying this O'Farrell standard to Kubin's claim 73:

[T]he Valiante reference discloses the very protein of appellants' interest -- "p38" as per Valiante.  Board Decision at 4.  Valiante discloses a monoclonal antibody mAb C1.7 that is specific for p38/NAIL, and further teaches a five-step protocol for cloning nucleic acid molecules encoding p38/NAIL using mAb C1.7.  Id.  In fact, while stating that "[t]he DNA and protein sequences for the receptor p38 may be obtained by resort to conventional methodologies known to one of skill in the art," '690 Patent at col.7 ll.49-51, Valiante cites to the very same cloning manual, Sambrook, cited by Kubin and Goodwin for their proposition that the gene sequence is identified and recovered "by standard biochemical methods."  '859 Application at 16.  Moreover, the record strongly reinforces (and appellants apparently find no room to dispute) the Board's factual finding that one of ordinary skill would have been motivated to isolate NAIL cDNA, given Valiante's teaching that p38 is "expressed by virtually all human NK cells and thus plays a role in the immune response."  Board Decision at 6.  The record shows that the prior art teaches a protein of interest, a motivation to isolate the gene coding for that protein, and illustrative instructions to use a monoclonal antibody specific to the protein for cloning this gene.  Therefore, the claimed invention is "the product not of innovation but of ordinary skill and common sense."  KSR, 550 U.S. at 421.  Or stated in the familiar terms of this court's longstanding case law, the record shows that a skilled artisan would have had a resoundingly "reasonable expectation of success" in deriving the claimed invention in light of the teachings of the prior art.  See O'Farrell, 853 F.2d at 904.

Stated this way, and disregarding the factual distinctions to the contrary, it is not hard to see how the panel arrived at its conclusion.  And in some ways, this is actually good news for biotechnology inventions:  the bases for the Court's decision was not a generic "DNA is obvious" position that the Patent Office has long sought.  Instead, the Court set forth a plethora of factual grounds unlikely to be identically (or even substantially) encountered for other genes.

Elsewhere in the opinion is evidence that biotechnology has become the victim of its own success.  In discussing whether the skilled worker would have had a reasonable expectation of success in cloning Kubin's cDNA in view of the cited art, the Court opined:

In fact, this record shows that one of skill in this advanced art would find these claimed "results" profoundly "predictable."  The record shows the well-known and reliable nature of the cloning and sequencing techniques in the prior art, not to mention the readily knowable and obtainable structure of an identified protein.  Therefore this court cannot deem irrelevant the ease and predictability of cloning the gene that codes for that protein.  . . .

The record in this case shows that Valiante did not explicitly supply an amino acid sequence for NAIL or a polynucleotide sequence for the NAIL gene.  In that sense, Kubin and Goodwin's disclosure represents some minor advance in the art.

The Court may be right, but it would take an attitude studiously ignorant of history not to consider that the promise of biotechnology and its fulfillment was precisely in providing genes that made it possible to produce useful quantities of erythropoietin, tissue plasminogen activator, human insulin, interferon, blood clotting factor VIII, and several other otherwise unavailable proteins.  But today, in this panel's perspective, this is but "some minor advance in the art."  In the Court's view, this is the equivalent of an electronic accelerator pedal or children's game.

Because the panel was able to affirm the Board's decision of unpatentability on obviousness, it declined to address the rejection based on written description.  While consistent with the principle that the Court need not address secondary grounds for invalidity or unpatentability when it has reason to affirm others, the Court also sidestepped an important question on how the Office is applying the Court's rather convoluted written description jurisprudence (wherein certain members of the Court think the time ripe to consider the question en banc).  It is particularly puzzling because the panel mentioned its suspicions about how the Office had changed its policies in view of Kubin (see "Kubin Panel Questions Motivation behind Reversal in New Written Description Training Materials"):

Court:  I'm quoting almost out of PTO's manual on written description -- verbatim -- when I give my example there, am I not?  The variations plus the activity Y -- protein having activity Y -- isn't that exactly the PTO's manual on written description?

Gongola:  Are you referring to the training materials?

Court:  Yes, I am.

Gongola:  That language may be found in the training materials, but it is not -- it's guidance.  It's -- each case of written description has to be decided on its own facts.

Court:  The Patent Office is guiding applicants on how to do things wrong?

Gongola:  No, your Honor, but guidance provided in a training document cannot be taken and applied to each case.  Each case has to be decided on its own facts.

Court:  So it's just guidance to examiners on how to do it wrong?

Gongola:  No, your Honor -- respectfully -- it is guidance to the public as well, but . . .

Court:  But if we take that guidance, we don't get to your result, do we?

Gongola:  No, your Honor, I respectfully disagree; we do.  In Carnegie Mellon, this Court has explained that when there's substantial variation within a genus, an applicant has to describe a sufficient number of species to reflect the variation.  Kubin has not done that here.  Kubin hasn't described any variation.  If we want to look at the training materials, the Board only . . .

Court:  It's interesting that this was revised immediately after Kubin -- the Kubin result -- wasn't it?

Gongola:  That . . .

Court:  Which is kind of an admission that the example did track Kubin and was detrimental to your position, wasn't it?

Gongola:  No, your Honor.

Court:  So, despite your smiling defense, the facts tend to give us a different conclusion.

Gongola:  No, your Honor, that's not correct.  The training materials were not revised post-Kubin to somehow capture Kubin.  The revisions have been in the works for a very long time.

Court:  I see, okay.

Gongola:  So it's just coincidence that Example 11 may seem to look like the Kubin fact pattern. . . .

The Court's decision in In re Kubin reinforces the impression that, after KSR, what will be dispositive is evidence, not argument.  KSR increases the tendency and risk of subjective hindsight reconstruction of an invention, based on a "totality of the circumstances" approach ("I may not know how to define what's obvious but I know it when I see it," to paraphrase Justice Potter Stewart in another context).  This "gut reaction" obviousness can be defeated only by evidence refuting the construction that hindsight informs.  While there was some such evidence here, the Court did not give it sufficient credence or weight, or simply chose to ignore it altogether.  But the outcome here illustrates the importance of pressing these kinds of factual distinctions.

Another reason the sky will not be falling on biotechnology patenting arises from the time in the history of biotechnology in which the decision was handed down.  Many (if not most) of the "known" genes in the art have been cloned and patented (or not) over the past 30 years of gene patenting, and many of these patents have expired or are nearing the ends of their terms.  In addition, many of these genes were isolated at a time when the technology was much less well developed and when there are sound factual bases for concluding that there was not a reasonable expectation of successfully cloning a cognate gene even for proteins that were well known and well characterized.  Turning to the present day, many (if not most) of the genes patented or that have been attempted to be patented were not known prior to their discovery (usually through homology comparisons) as a result of the Human Genome Project (HGP).  A fundamental pillar of the Court's decision in Kubin was that p38 was known; that will not be the case for most of the genes identified since the late 1990's.

This leaves a class of genes and gene patents "in the middle" -- granted since (and perhaps because of) the Court's decision in Deuel but prior to identification during the HGP effort.  Some of these, no doubt, have been made more open to an obviousness challenge since the Court's decision in this case.  However, many (if not most) of these genes will be lacking some if not several of the factual underpinnings of the Kubin decision:  the existence of the protein encoded therein was not known, or there was not a commercially-available monoclonal antibody specific for the protein, or expression cloning was ineffective or unpredictable for that gene, or there was no express description in the art on how to isolate the gene, or there did not exist a cell or tissue source reliably expressing the protein.  In these and perhaps other ways, the Kubin decision is sufficiently narrow that it should not provoke a sea change in the fortunes of such gene claims.  Insofar as it has a tendency to have this effect in the Patent Office, factual challenges, particularly supported by expert declarations, should have the greatest persuasive punch.

As for what this decision says about the current state of the institutional integrity and fortitude at the Federal Circuit, the Court (or at least this panel) clearly believes that the Supreme Court has spoken clearly that their jurisprudence has gone severely awry.  There are, no doubt, instances where the Court has struggled (no more mightily than the Supreme Court) in applying patent law principles to ever-changing subject matter.  In this, the Court has (as it was intended to have) a unique position in the American federal judicial framework.  That makes it all the more important that the Court make its decisions based on direction from the Supreme Court filtered through its own expertise.  Indeed, even the Supreme Court, in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., recognized that the Federal Circuit was the best place for the consistent development of patent law in the first instance (subject, of course, to Supreme Court correction).  But an uncritical application of Supreme Court precedent, particularly where the Court has not mandated a change (as it did, for example, in eBay Inc. v. MercExchange, L.L.C.) fails to fulfill the Federal Circuit's Congressional mandate and its responsibility to harmonize patent law in this country.  In Kubin, once again, the Federal Circuit appears to have reacted to Supreme Court guidance more with what it perceived as strict compliance than with flexibility in applying the Supreme Court's broad principles to particular cases.  And in doing so, it took the occasion to unnecessarily overturn a decision that has been the basis for countless decisions made by applicants, investors, and the companies that have developed biotechnology from the laboratory bench to an industry in which America is competitive throughout the world.  It is not the Federal Circuit's brief to make decisions based on these considerations, of course.  But it would be consistent with their harmonization mandate (as much as it is inconsistent with some of their current jurisprudence, see, e.g., In re Bilski) if the Federal Circuit would keep such considerations in mind.

In re Kubin (Fed. Cir. 2009)
Panel: Circuit Judges Rader, Friedman, and Linn
Opinion by Circuit Judge Rader

Federal Circuit Issues Significant Biotech Decisions

    By Donald Zuhn --

This morning, the Federal Circuit issued decisions in both In re Kubin and Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co.  In Kubin, the Federal Circuit, with Circuit Judge Rader writing for Circuit Judges Friedman and Linn, affirmed the Board's decision that Kubin's claims were obvious.  In Ariad Pharmaceuticals, the Federal Circuit, with Circuit Judge Moore writing for Circuit Judge Linn and Circuit Judge Linn writing a concurring opinion, reversed-in-part, holding the asserted claims of Ariad's U.S. Patent No. 6,410,516 invalid for lack of written description, and affirmed-in-part, holding that the asserted patent was not unenforceable due to inequitable conduct.  Patent Docs will provide comprehensive commentary regarding these two decisions in subsequent posts.

In re Gleave (Fed. Cir. 2009)

    By Kevin E. Noonan --

The duality of nucleic acids has long posed a challenge to patent law.  A gene is, in one way of looking at it, "but a chemical compound, albeit a complex one," and this view of the gene's nature has informed the emphasis on "structure, structure, structure" taken by the Federal Circuit from Amgen Inc. v. Chugai Pharmaceutical Co. to Judge Rader's comment in the oral argument for In re Kubin.  On the other hand, a gene also contains, and is defined by, the information it embodies, encoding an amino acid sequence corresponding to a structurally entirely different molecule, a protein.  This aspect of a gene's nature, and the unpredictable variability of it, underlies both the increased stringency with which the written description requirement is applied to nucleic acid claims, as well as the Office's resistance to apply Judge Rader's "structure, structure, structure" rule in determining whether a novel nucleic acid sequence, identified using established methods, is non-obvious.

The latest example of this phenomenon is the Federal Circuit's decision last week to affirm rejection on 102/103 grounds of unpatentability in In re Greave.  The claims at issue include this generic claim:

[a] bispecific antisense oligodeoxynucleotide, wherein substantially all of the oligodeoxynucleotide is complementary to a portion of a gene encoding human IGFBP-2 and substantially all of the oligodeoxynucleotide is also complementary to a gene encoding human IGFBP-5, and wherein the oligodeoxynucleotide is of sufficient length to act as an antisense inhibitor of human IGFBP-2 and human IGFBP-5

(where IGFBP-2 and -5 stand for two different species of insulin growth factor binding protein).  Also among the rejected claims were claims directed to particular species as set forth in applicants' specification.  The prior art asserted in support of the rejection was a PCT Publication to Wraight (WO 00/78431), which disclosed a list of all 15-mer oligonucleotides that could be made from the (publicly-available) full-length IGFBP-2 sequence, as well as disclosure in the Wraight reference that antisense oligonucleotides could comprise any oligonucleotide that specifically could bind to (i.e., hybridize with) any of the disclosed 15-mer sense oligonucleotides, and the existence in the Wraight disclosure of several 15-mer sense oligonucleotides with sequence complimentarity overlap to the specific oligonucleotides disclosed and claimed by Gleave.

The Federal Circuit affirmed the rejection, in a decision by Judge Prost joined by Chief Judge Michel and Judge Moore.  The Court based this decision on its view that anticipation required merely that the oligonucleotide sequence was in the prior art, not that its usefulness was previously disclosed.  Gleave argued that the art disclosed a mere list comprising "ink," not disclosure of any functional antisense oligonucleotide (indeed, the cited art contained no disclosure of an antisense oligonucleotide at all), but such disclosure was unnecessary, according to the Court.  All that is necessary for a prior art reference to anticipate, said the Court, is that it enable the skilled artisan to make the claimed invention, not use it, citing Impax Lab., Inc. v. Aventis Pharm. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008); and In re LeGrice, 301 F.2d 929, 940–44 (C.C.P.A. 1962).  The prior art disclosure need not show actual reduction to practice (Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1380–81 (Fed. Cir. 2003); In re Donohue, 766 F.2d 531, 533 (Fed. Cir. 1985)), and the description provided in the putatively anticipating reference "might not otherwise entitle its author to a patent," citing Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1562 (Fed. Cir. 1991).

Cases that could be interpreted to the contrary, such as Bristol-Myers Squibb Co. v. Ben Venue Lab., Inc., 246 F.3d 1368, 1374 (Fed. Cir. 2001) ("[t]o anticipate, the reference must also enable one of skill in the art to make and use the claimed invention") are "[t]aken out of context," according to the Court, insofar as they are interpreted to impose an operability or utility disclosure requirement for an anticipating reference.  A "thorough" reading of the Court's caselaw (including Novo Nordisk Pharm., Inc. v. Bio-Technology General Corp., 424 F.3d 1347, 1355 (Fed. Cir. 2005); Rasmusson v. SmithKline Beecham Corp., 413 F.3d 1318, 1326 (Fed. Cir. 2005); and In re Hafner, 410 F.2d 1403, 1405 (C.C.P.A. 1969)) imposes no such requirement, the Court concluded.  And the Court also noted that Gleave's claims themselves contained no limitation restricting their scope to functional antisense oligonucleotides.

The crux of the distinction the Court made, regarding the use of a list of sense oligonucleotides in the cited art and the traditional proscription against using a mere recitation of all possible compounds as anticipating claims to particular species, is found in the Court's consideration of the application of In re Wiggins, 488 F.2d 538, 543 (C.C.P.A. 1973) to the facts before it.  In Wiggins, the Court of Customs and Patent Appeals stated:

In our view, [the alleged anticipatory reference's] listing of the compounds by name constituted nothing more than speculation about their potential or theoretical existence.  The mere naming of a compound in a reference, without more, cannot constitute a description of the compound, particularly when, as in this case, the evidence of record suggests that a method suitable for its preparation was not developed until a date later than that of the reference.

If we were to hold otherwise, lists of thousands of theoretically possible compounds could be generated and published which, assuming it would be within the level of skill in the art to make them, would bar a patent to the actual discoverer of a named compound no matter how beneficial to mankind it might be.

488 F.2d at 543 (emphases added).

The Court noted that the CCPA in Wiggins stated that "'[t]he mere naming of a compound in a reference, without more, cannot constitute a description of the compound.'" 488 F.2d at 543.  But the distinction with this case, according to the Court's opinion, is that Wiggins involved the "mere naming of a theoretical compound, without more," and that was not anticipating.  Indeed, the Court emphasized that "'[w]ithout more' is the key phrase," because what is "more" is the capacity for the person of ordinary skill in the art to be able to make the claimed compound.  Here, these were not "potential or theoretical" compounds, but a class of compounds that fell within so limited a genus that the skilled artisan could "'at once envision each member of this limited class,'" citing Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 471 F.3d 1369, 1376 (Fed. Cir. 2006).  "In that limited circumstance, a reference describing the genus anticipates every species within the genus.  See Perricone [v. Medicis Pharm. Corp., 432 F.3d 1368, 1377 (Fed. Cir. 2005)]."

What was not anticipated by the cited art are methods of using these oligonucleotides, and the Court suggested that Gleave might be entitled to such claims.  As for the appealed composition of matter claims, the Court found that these sequences "are simply not new," and affirmed.  And here is where the duality of nucleic acids becomes important.  It was undisputed that the Wraight reference did not disclose a single antisense oligonucleotide -- it merely disclosed all 15-mer sense oligonucleotides, coupled with generic disclosure that antisense oligonucleotides would specifically hybridize to the disclosed sense oligonucleotides, and the knowledge in the art that such oligonucleotides could be made without undue experimentation.  Regardless of operability (although Gleave's arguments might have had additional force had they contained a functional limitation regarding operability as antisense oligonucleotides), the Court's decision suggests that nucleic acids can be anticipated by the mere recitation of any sequence, or its complement, in the prior art regardless of any disclosure as to operability.  This raises the question of whether an unidentified open reading frame, published in a publicly-available database, might not be enough to anticipate claims directed to an isolated nucleic acid encoding a novel protein.  Like the antisense oligonucleotides at issue in Gleave, the existence of the sequence in the prior art could be combined with the knowledge of the skilled worker that proteins are encoded by open reading frames to anticipate the sequence.  Known operability is not required, according to this panel opinion, raising the question of whether the availability of the published but unrecognized sequence would be enough.  There are certainly distinctions:  here, the oligonucleotides comprised a known protein, for example.  And there would be an In re Hall question about whether an unannotated open reading frame would be sufficiently accessible to qualify as prior art.  But the Federal Circuit's decision in Gleave amounts to yet another instance of differential application of the law to biotechnology claims, whose effects remain to be fully appreciated.

In re Greave (Fed. Cir. 2009)
Panel: Chief Judge Michel and Circuit Judges Prost and Moore
Opinion by Circuit Judge Prost

Tafas v. Doll (Fed. Cir. 2009)

    By Donald Zuhn --

On Friday, the Federal Circuit issued its decision in Tafas v. Doll (formerly Tafas v. Dudas).  The Tafas appeal concerns the validity of four rules in the continuation and claims rules package promulgated by the U.S. Patent and Trademark Office on August 21, 2007.  The four rules at issue are:  Rule 75, which requires applicants submitting more than five independent or 25 total claims to file an Examination Support Document (ESD); Rule 78, which limits applicants to two continuation applications per application family absent a petition and showing; Rule 114, which limits applicants to one RCE per application family absent a petition and showing; and Rule 265, which establishes the requirements for an ESD.

In an opinion authored by Judge Prost and joined by Judge Bryson, a split panel determined that Rules 75, 78, 114, and 265 are procedural, but that Rule 78 is inconsistent with 35 U.S.C. § 120.  Judge Rader dissented in part, contending that all four of the rules at issue are substantive.

Judge Prost (at left) begins her discussion by rejecting the USPTO's argument that the District Court erred for failing to give the Office's interpretation of its rulemaking authority under 35 U.S.C. § 2(b)(2) proper deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984).  However, with respect to the USPTO's argument that the District Court also failed to accord the Office Chevron deference with respect to its interpretations of various sections of the Patent Act, and its belief that the continuation and claims rules were consistent with such interpretations, Judge Prost finds that "the USPTO's interpretations of statutes that pertain to the USPTO's delegated authority are entitled to Chevron deference."  Thus, for rules that are within the scope of the Office's delegated authority (i.e., procedural rules promulgated under 35 U.S.C. §§ 2(b)(2) and 132(b)), the Court must "give Chevron deference to the USPTO's interpretation of statutory provisions that relate to the exercise of delegated authority."

Having decided that the USPTO is to be afforded Chevron deference with respect to procedural rules, Judge Prost next turns to the issue of whether the continuation and claims rules at issue are substantive or procedural.  Noting that the parties "vigorously disagree . . . as to how the boundary between 'substantive' and 'procedural' rules should be defined," Judge Prost disagrees with the District Court's "broad and absolute" reading of Chrysler Corp. v. Brown (1979) as defining as substantive "any rule that 'affect[s] individual rights and obligations.'"  Instead, she finds the D.C. Circuit's approach in JEM Broad. Co. v. FCC (D.C. Cir. 1994) to be more persuasive.  (In view of Judge Prost's use of JEM, it's interesting, but perhaps not surprising, that she cites Professor Mark Lemley and fellow Circuit Judge Kimberly Moore's article on "Ending Abuse of Patent Continuations" in a footnote on page two of the opinion.)

In JEM, the Federal Communications Commission adopted "hard look" rules in response to a significant number of "carelessly prepared and speculative applications" for broadcasting licenses.  Under the FCC's rules, applications that failed to include necessary information or contained incorrect or inconsistent information were dismissed with no opportunity to cure the defect.  Noting that the D.C. Circuit had "recognized that the rules could result in the loss of substantive rights, but found that they were nonetheless procedural because they did not 'foreclose effective opportunity to make one's case on the merits,'" Judge Prost concludes that the continuation and claims rules are procedural because "[i]n essence, they govern the timing of and materials that must be submitted with patent applications," adding that while the rules "may 'alter the manner in which the parties present . . . their viewpoints' to the USPTO, . . . they do not, on their face, 'foreclose effective opportunity' to present patent applications for examination."

With respect to Rules 78 and 114, Judge Prost states that:

Applicants who include in each continuation application all amendments, arguments, and evidence available at the time of filing will not be limited by Final Rule 78.  Similarly, applicants who diligently present all of their amendments, arguments, and evidence as soon as possible during prosecution will be granted as many RCEs as they require.  Thus, applications that are submitted in compliance with these timing requirements will be fully examined and given all of the benefits provided by the Patent Act.

As a result, Judge Prost finds these rules to be procedural under a JEM analysis.  While acknowledging that the Office's responses during the notice and comment period suggested that the USPTO would "deny additional applications in almost all circumstances" such that Rules 78 and 114 would create "hard limits" on continuation and RCE filings, the majority states that "we decline to rely on these responses, which are not binding on the USPTO," adding that courts "will be free to entertain challenges to the USPTO's application of the Final Rules, including its view of when amendments, arguments, and evidence could not have been submitted earlier."

With respect to Rules 75 and 265, Judge Prost states that:

Once a satisfactory ESD is submitted, examination will proceed in precisely the same manner as it would have in the absence of the rule.  It is important to note that an examiner is not permitted to substantively reject claims on grounds that the ESD did not prove that the claims are patentable.

As a result, Judge Prost finds these rules to also be procedural under a JEM analysis.  However, because she states that the search requirement of Rule 265 "does not necessarily require a visit to every library in every corner of the world," but rather only requires "[a] reasonable, cost-effective search," the implementation of Rules 75 and 265 would also lead to an inevitable increase in the number of lawsuits filed by applicants against the USPTO.  While Judge Prost is "mindful of the possibility that the USPTO may in some cases attempt to apply the rules in a way that makes compliance [with Rules 75 and 265] essentially impossible and substantively deprives applicants of their rights," she notes that in such circumstances, "judicial review will be available."  Judge Prost also dismisses the concern that "even the most diligently prepared ESD will inevitably open the applicant to inequitable conduct allegations that will entail costly litigation and a possible finding of unenforceability," as being "too speculative to void the rules."  As with the Office's interpretation of the new rules, the majority states that:

We recognize that the drafting of an ESD will entail browsing many references, that mistakes and omissions will inevitably occur, and that the courts will be asked to determine if there was inequitable conduct.  However, doubt about the judiciary's ability to apply its own doctrine in a way that yields fair results and discourages frivolous allegations should not preclude the USPTO from promulgating rules that are within its statutory authority.

Finding that the four rules at issue are procedural, Judge Prost turns to the question of whether the four rules are consistent with the Patent Act.  Judge Prost begins with Rule 78, which, like the District Court, she determines to be inconsistent with 35 U.S.C. § 120, albeit on "narrower grounds."  In particular, Judge Prost notes that while "Section 120 unambiguously states that an application that meets four requirements 'shall have the same effect, as to such invention, as though filed on the date of the prior application,'" new Rule 78 "attempts to add an additional requirement -- that the application not contain amendments, arguments, or evidence that could have been submitted earlier -- that is foreclosed by the statute."  With respect to In re Henriksen (C.C.P.A. 1968) and In re Bogese (Fed. Cir. 2002), Judge Prost dismisses these cases as being unhelpful to the USPTO's cause, the former concerning the permissible length of a chain of serial continuations, rather than the total number of continuations that may be filed, and the latter concerning prosecution history laches (Judge Prost notes that Rule 78 "simply captures too many applications that would not be even remotely susceptible to a prosecution history laches challenge").

As for Rules 114, 75, and 265, Judge Prost finds none of these rules to be inconsistent with the Patent Act.  First, she finds the application of an RCE limit to application families rather than individual applications to be not inconsistent with 35 U.S.C. § 132 because that section does not "unambiguously dictate[] that its provisions be applied on a per application basis."  In addition, with respect to the argument that Congress intended RCEs to be subject only to the applicant's discretion, Judge Prost states "[i]t is plausible that, as the USPTO suggests, § 132(b) simply directs the USPTO to 'prescribe regulations' to govern the applicant's ability to request continued examination which must, in some circumstances, be granted" (emphasis added).  As for the possibility that Rules 75 and 265 create a hard limit on the number of claims that an applicant can file, the majority states that:

[W]e need not decide whether the USPTO may impose a limit on the number of claims an applicant can pursue because we do not find that the ESD requirement creates any such limit.  Rather, it simply requires that an ESD be submitted if more than five independent or twenty-five total claims are included in certain sets of copending applications.

In response to the argument that Rule 265 creates a duty to conduct a prior art search, the majority states that "[w]e agree with the USPTO that [the cases cited by the District Court] do not speak to whether the USPTO may impose such a duty by regulation," and therefore, "[o]n this record, we see no persuasive reason to prohibit the USPTO from requesting the information required by Final Rule 265, even if the applicant must take action to acquire that information."  Reiterating her procedural analysis, Judge Prost also dismisses the argument that Rules 75 and 265 improperly transfer examination burdens from the Office to applicants, stating that these rules "do not require an applicant to make a prima facie case of patentability," adding that "[a]n examiner cannot reject an application because he believes that the applicant failed to find the most material references or if he is otherwise not persuaded by the applicant's view of the prior art."

After concluding that Rules 75, 78, 115, and 265 are procedural, and further, that Rule 78 is inconsistent with the Patent Act, Judge Prost notes that:

Because of the complexity of this case and the numerous arguments presented on appeal and before the district court, we think it is important to expressly summarize what we believe remains for the district court on remand.  This opinion does not decide any of the following issues:  whether any of the Final Rules, either on their face or as applied in any specific circumstances, are arbitrary and capricious; whether any of the Final Rules conflict with the Patent Act in ways not specifically addressed in this opinion; whether all USPTO rulemaking is subject to notice and comment rulemaking under 5 U.S.C. § 553; whether any of the Final Rules are impermissibly vague; and whether the Final Rules are impermissibly retroactive.

In his concurring opinion, Judge Bryson helpfully provides the USPTO with a roadmap for modifying Rule 78 to render it consistent with 35 U.S.C. § 120 -- at least as far as he is concerned.  Stating that "the most difficult question in this case . . . is whether Final Rule 78 is a valid regulation in light of 35 U.S.C. § 120," Judge Bryson notes that while he agrees that the rule is invalid, he thinks "it is important to emphasize the narrow scope of the court's decision."  Stating that "a rule limiting the number of continuances co-pending with the first-filed application is necessarily contrary to the statute and invalid," Judge Bryson argues that this "does not answer the question whether the rule is invalid as applied to serial continuances."  While he acknowledges that "[f]or the last 40 years, . . . section 120 has been understood to confer upon patent applicants the right to file any number of successive continuation applications after the first application has been abandoned or issued as a patent," he contends that "[i]t would not be unreasonable, however, to construe the phrase 'an application similarly entitled' [in § 120] to mean an application that satisfies all the preceding requirements set forth in section 120, including the requirement of co-pendency with the initial application."  Judge Bryson notes that while the majority properly struck down Rule 78, that does not mean "a revised rule that addressed only serial continuances and limited such continuances to only two -- the first co-pending with the original application and the second co-pending with the first -- would be struck down as reflecting an impermissible interpretation of section 120."  Thus, in view of Judge Bryson's analysis, the USPTO could impose a two-continuation limitation -- or whatever limit the Office deemed necessary to resolve its backlog -- on any continuation that was not filed while the original application was still pending.  In other words, for applicants wishing to file continuations serially, the 2+1 rule (two continuations + one RCE) would merely become the 3+1 rule.

Judge Rader (at right), writing in dissent with respect to all but the majority's finding that Rule 78 is inconsistent with the Patent Act, states that "in my view, the Final Rules are substantive, not procedural."  Noting that "[t]he distinction between substantive or non-substantive rules requires a difficult judgment," Judge Rader admonishes that he "would not so casually discard, as this court does today, this court's precedent for identifying a 'substantive' rule."  In particular, Judge Rader states that:

The Supreme Court provided valuable guidance on the substantive/non-substantive inquiry in Chrysler Corp. v. Brown, 441 U.S. 281 (1979).  In Chrysler, the Court defined an inherent characteristic of a "substantive" or "legislative-type" rule, namely, such rules "affect[] individual rights and obligations."  Id. at 302.  Contrary to this court's analysis today, the Chrysler Court's reasoning was in no way limited to defining the boundary between interpretative and substantive rules.  The Court sought to draw a broad distinction between substantive and non-substantive rules -- the same inquiry presented in this case.  Id.

* * *

Both this court and the Court of Appeals for the District of Columbia Circuit have relied on Chrysler in building a body of jurisprudence germane to the substantive/non-substantive inquiry.  Central to this jurisprudence is the recognition that classifying a rule as substantive or non-substantive is a case-by-case exercise, poorly suited for bright-line rules.

With respect to the majority's reliance on JEM, Judge Rader argues that "as JEM illustrates, the test for substantive, ultra vires rules is a case-by-case inquiry, not a rigid application of a sentence out of context in JEM."  Noting that the public participation during the notice and comment period was "overwhelming (itself an indication of the substantive impact of the rules?)," Judge Rader adds that "[m]any of the comments shared a common concern:  that the Final Rules 'had a significant effect on private interests, and marked a change in existing law or policy,'" and states that he "share[s] that concerned view."

Judge Rader concludes his dissent by outlining how each of the four rules at issue would have "sufficiently grave" effects.  His analysis regarding the probable impact of Rule 75 is of particular interest:

[L]imiting an applicant to five independent claims ignores the varying scopes and methods of claiming inventions across different technologies.  For example, in a pharmaceutical application, an applicant may claim not only the genus compound, but also a number of species, intermediates, methods of making, and methods of use.  Asking an inventor to limit her application to five independent claims disproportionately affects technologies with greater complexity and greater public interest in disclosure.

Judge Rader also explains that:

[Rule 75] has a similar effect to imposing a five-page limit on applications.  Although that notion is obviously too simplistic and problematic, this court's rationale would apparently make that hypothetical rule possible as a procedural rule that merely "[alters] the manner in which the parties present themselves or their viewpoints to the agency."  JEM, 22 F.3d at 326.  To my eyes, much more is at stake.

Tafas v. Doll (Fed. Cir. 2009)
Panel: Circuit Judges Rader, Bryson, and Prost
Opinion by Circuit Judge Prost, concurring opinion by Circuit Judge Bryson, opinion concurring in part and dissenting in part by Circuit Judge Rader

Anyone Remember What These "New Rules" Are All About?

    By Kevin E. Noonan --

It has been quite some time since most in the patent community have given much thought to the ill-advised "claims and continuation" rules promulgated by the Patent and Trademark Office on August 21, 2007 that were preliminarily enjoined on Halloween, 2007 (one day before they were to go into effect) and permanently enjoyed on April Fool's Day, 2008.  But with the Federal Circuit's decision last Friday overturning the bases for enjoining three of the four rules at issue, it is a good time to be reminded of what was (and now once again is) at stake.  A few caveats, however, are in order.

First, the injunction was imposed on summary judgment, so District Court Judge Cacheris has not heard the merits of the parties' arguments.  Second, Judge Cacheris based his ruling on only one of the grounds asserted by Dr. Tafas and GlaxoSmithKline, leaving several others that the Court never ruled upon.  Third, as pointed out on Patent Docs last week, Judge Prost, writing for the fractured majority, set forth a roadmap of issues for the District Court to consider, any one of which could be further grounds for invalidating and enjoining anew the "new rules."  Fourth, the delay in President Obama's appointment of a Commerce Secretary has also delayed the appointment of a new Director for the Patent Office, and there is no indication of who that individual might be or what that person's views on changing any of these rules might be.  Finally, the rules package was an interconnected whole, intended to block any "loopholes" that would permit an applicant (albeit at increased cost) from filing additional claims and continuations.  Thus, even if the Federal Circuit's determination that one of the proposed new rules (Rule 78) is contrary to statute (35 U.S.C. § 120) and thus outside the scope of the Office's rulemaking authority under 35 U.S.C. § 2(b)(2)(A) is the only aspect of the decision that survives the expected impending continued litigation, failure to implement this aspect of the rule might doom the entire endeavor.

The Federal Circuit considered four of the "new rules" in the continuation and claims package:  Rules 75, 78, 114, and 265.  Prior posts in this space have reviewed the metes and bounds of these rules extensively in the past, and this post is meant merely as a refresher; in-depth treatment can be found in those prior posts.

Rule 75(b):

The prior (and still current) version of Rule 75(b) merely requires that claims "differ substantially from each other and are not unduly multiplied."  The proposed changes to Rule 75(b), which increased the rule by 522 words and added 5 new subparts, embodied the limitation to 5 independent claims and 25 total claims in any application (Rule 75(b)(1)), unless the applicant supplied an examination support document (ESD) pursuant to proposed new Rule 265 (see below).  Rule 75(b)(2)(A) defined as an independent claim any claim that referenced another claim but did not incorporate by reference all the limitations of the referenced claim, or that was directed to a different statutory class ("a method of using the subject matter of claim x" would thus not be considered a dependent claim).  Proposed rule 75(b)(3) provided a notice provision to permit an applicant to amend an application to be in compliance with the rule (and thus bypass the need to submit an ESD).

Proposed Rule 75(b)(4) prohibited an applicant from avoiding the strictures of the claims limitations by filing more than one application; the rule provided that the Office would consider together the claims in commonly-owned applications that contained "patentably-indistinct" claims, and would then add together all the claims of the two applications to determine whether the applications were in compliance with the claims limitations.  The intent was explicit in the Final Rule Notice, where the Office stated that Rule 75(b)(4) is intended "to preclude an applicant from submitting multiple applications to the same subject matter (with claims that are patentably indistinct), each with five or fewer independent claims or twenty-five or fewer total claims, for the purpose of avoiding the requirement to submit an examination support document."

Rule 78:

This rule, which the Federal Circuit held was inconsistent with 35 U.S.C. § 120, embodies the limitations on continuation applications, and was even more expressly directed towards preventing applicants from avoiding the effects of the rules package.  It was also the most extensive of the rules, having the following relevant provisions:

Rule 78(d):  there are several subparts to this portion of the proposed rules, but the most important provision precludes an applicant from filing more than two continuation applications in any application family (wherein the definition of an "application family" includes continuation and continuation-in-part applications but excludes divisional applications). 

Rule 78(f) required an applicant prosecuting an application to identify all other commonly-owned applications having (a) a common inventor and (b) a filing or priority date within 2 months of the filing or priority date of the application in question.  This section of the proposed rule also created a rebuttable presumption that such commonly-owned applications sharing a common inventor and "substantial overlapping disclosure" contained at least one patentably-indistinct claim.  The Office under these circumstances could then require that the patentably-indistinct claims be cancelled in all but one of the related applications.

Rule 114:

This proposed rule would permit an applicant to file only a single request for continued examination (RCE) without a petition and showing, and this limitation would apply to an entire application family (i.e., an application and all continuation and continuation-in-part applications claiming priority thereto).  While divisional applications are not part of an application "family" for the purposes of this proposed rule, each such divisional application is also entitled to a single RCE.  This was the "+1" part of the "2+1" rule imposed in combination with proposed Rule 78.  The petition required for filing a second RCE would require a showing that an amendment, argument, or evidence sought to be entered with the RCE could not have been submitted earlier in prosecution.  Importantly, the requirement for a showing would not be satisfied by submitting an IDS containing art not known to anyone with Rule 56 duty prior to 3 months before the RCE is requested (including art identified, inter alia, by a foreign patent office in a counterpart application).

Rule 265:

This proposed rule describes the examination support document (ESD) required when an applicant files more than 5 independent claims and 25 total claims in an application.  The provisions are simple, and in view of the inequitable conduct implications, frightening; an ESD must contain:

• A preexamination search statement;
• Listing of references deemed most closely related to the subject matter of each claim;
• Identification of claim limitations disclosed by each reference;
• Detailed explanation of patentability; and
• Showing of support under 35 U.S.C. § 112, ¶ 1.

The preexamination search statement must contain:

• A statement that a preexamination search in compliance with 37 C.F.R. § 1.265(b) was conducted.
• An identification of:

• The field of search by U.S. class and subclass, the date of the search; and
• For database searches, the search logic or chemical structure or sequence used as a query, the name of the file(s) searched and the database service, and the date of the search (in the manner set forth in M.P.E.P. § 719.05).

Unlike current Information Disclosure Statements, an ESD requires that the content of the references be disclosed with particularity, especially with regard to the relevance of each reference to the claimed invention.  "The ESD must include a detailed explanation that particularly points out how each of the independent claims is patentable over the references cited in the listing of references," as well as explaining why the claims are novel and non-obvious with regard to the references, as well as evidence of support in the specification in compliance with 35 U.S.C. § 112, ¶ 1.

These are, in brief, the "new rules" given new life by the Federal Circuit's decision.  There is no reason to believe that the current Office administration does not remain committed to them.  Although that administration has indicated that the rules would not be imposed retroactively to pending applications (this was one of the grounds for GSK's opposition to the rules), any failure to impose any version of these "new rules" will do precisely what the Office was trying to avoid:  provoke a deluge of new filings intended to avoid the effects of the rules.  This is what happened immediately before the changes occasioned by implementation of the GATT provisions on June 7, 1995, and before the publication rules of the American Inventor Protection Act (AIPA) on November 28, 2000.  Two years ago we would have assumed that exacerbating the examination backlog was an important Office goal.  Today, in view of falling allowance rates (and maintenance fees) and falling application rates (down 5% in absolute terms and 10% less than Office expectations), these considerations may be less pressing for the Office.  They are no less important, however, for American innovation, especially because the Office has also stopped hiring new examiners due to budget shortfalls.  It would be ironic indeed if the Office eventually imposed some version of these rules in an effort to increase revenues by making worse the problem that provided the ostensible motivation for the rules in the first place.

Federal Circuit Issues Decision in Tafas v. Doll

    By Donald Zuhn --

In a 55-page opinion issued earlier today, the Federal Circuit determined that the four rules at issue in Tafas v. Dudas are procedural, but that Rule 78 is inconsistent with 35 U.S.C. § 120 (i.e., that portion of the rule which limits the number of continuation applications), and therefore, affirmed-in-part, vacated-in-part, and remanded.  Judge Prost authored the opinion for the panel, with Judge Bryson filing a concurring opinion and Judge Rader filing an opinion concurring in part and dissenting in part.  Judge Prost concluded that:

[T]he Final Rules 75, 78, 114, and 265 are procedural rules that are within the scope of the USPTO’s rulemaking authority.  However, we find that Final Rule 78 conflicts with 35 U.S.C. § 120 and is thus invalid.  Accordingly, we affirm the district court's grant of summary judgment that Final Rule 78 is invalid, vacate its grant of summary judgment with respect to Final Rules 75, 114, and 265, and remand for further proceedings consistent with this opinion.

Because of the complexity of this case and the numerous arguments presented on appeal and before the district court, we think it is important to expressly summarize what we believe remains for the district court on remand.  This opinion does not decide any of the following issues:  whether any of the Final Rules, either on their face or as applied in any specific circumstances, are arbitrary and capricious; whether any of the Final Rules conflict with the Patent Act in ways not specifically addressed in this opinion; whether all USPTO rulemaking is subject to notice and comment rulemaking under 5 U.S.C. § 553; whether any of the Final Rules are impermissibly vague; and whether the Final Rules are impermissibly retroactive.

Patent Docs will provide a more comprehensive analysis of the decision in a subsequent post.

What Good is the Federal Circuit?

    By Kevin E. Noonan --

The Court of Appeals for the Federal Circuit occupies a unique place in the Federal appellate system.  Like the D.C. Circuit and unlike the other circuits, it is not regional and its jurisdiction is not limited to Federal District Courts in a particular geographical area.  Instead, its subject matter jurisdiction is limited to patent infringement decisions from district courts, appeals from the Board of Patent Appeals and Interferences, the Trademark Trial and Appeal Board, the Merit Systems Protection Board, the Court of International Trade, the International Trade Commission, the Court of Appeals for Veterans Claims, the Court of Federal Claims, the Boards of Contract Appeals, the U.S. Government Accountability Office, and arbitrator's decisions in employment disputes for various federal departments and agencies.  But despite this variety, the Court's purpose is not as a catch-all for appellate review but rather is defined by its mandate to harmonize U.S. patent law.  As described on the Federal Judicial Center page regarding the Act establishing the Court (Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96 Stat. 25):

In an effort to promote greater uniformity in certain areas of federal jurisdiction and relieve the pressure on the dockets of the Supreme Court and the courts of appeals for the regional circuits, the Congress in 1982 established what is now the only U.S. court of appeals defined exclusively by its jurisdiction rather than geographical boundaries.  The U.S. Court of Appeals for the Federal Circuit assumed the jurisdiction of the U.S. Court of Customs and Patent Appeals and the appellate jurisdiction of the U.S. Court of Claims.  The new court was authorized to hear appeals from several federal administrative boards as well.  Congress abolished the Court of Customs and Patent Appeals and the Court of Claims, reassigning those courts' 12 judges to serve on the Federal Circuit court.

These considerations of the Court's origins make even more curious the colloquy, contained almost entirely in footnotes, to be found between Judges Mayer and Gajarsa, writing for the majority, and Judge Newman, writing in a curious concurrence reading more like a dissent, on the proper role in federal patent policy for the Court.  The case is In re Ferguson, the latest (perhaps deserved) victim to the Court's In re Bilski decision, and would be otherwise thoroughly not notable absent the judges sub rosa institutional debate.

The case involved rejection by the U.S. Patent and Trademark Office's Board of Patent Appeals and Interferences of the claims in U.S. Serial No. 09/387,823, filed September 1, 1999 by Lewis Ferguson, Darryl Costin, and Scott C. Harris (a patent attorney who argued before the Court).  The claims are almost prima facie patent ineligible under Bilski, claiming a "process" as well as a "paradigm":

A method of marketing a product, comprising:
    developing a shared marketing force, said shared marketing force including at least marketing channels, which enable marketing a number of related products;
    using said shared marketing force to market a plurality of different products that are made by a plurality of different autonomous producing company, so that different autonomous companies, having different ownerships, respectively produce said related products;
    obtaining a share of total profits from each of said plurality of different autonomous producing companies in return for said using; and
    obtaining an exclusive right to market each of said plurality of products in return for said using.

And:

A paradigm for marketing software, comprising:
    a marketing company that markets software from a plurality of different independent and autonomous software companies, and carries out and pays for operations associated with marketing of software for all of said different independent and autonomous software companies, in return for a contingent share of a total income stream from marketing of the software from all of said software companies, while allowing all of said software companies to retain their autonomy.

Procedurally, the Examiner rejected the claims based on 35 U.S.C. §§ 102, 103, and 112; these grounds of rejection were not upheld by the Board.  Instead, the Board sua sponte entered a new ground of rejection based on 35 U.S.C. § 101, saying (in a decision rendered in 2004) that "[o]ur interpretation of these claims is that they do not expressly or implicitly require performance of any of the steps by a machine, such as a general purpose digital computer."  On rehearing (in a decision rendered in 2006), the Board entered a new ground of rejection under 35 U.S.C. § 101, in view of the intervening Interim Guidelines for Examination of Patent Applications for Subject Matter Eligibility.  The Board held that the method claims were not patent eligible for being directed to an abstract idea, and that the "paradigm" claims were not within the statutory categories because a "marketing company" was not a machine, manufacture or composition of matter.

The Federal Circuit majority made short work (albeit not as short as the panel in Classen Immunotherapeutics) of the substantive issue of patentability.  Applying the Bilski "machine-or-transformation" test, the Court held that while reciting a patent-eligible category of invention, the method claims were clearly neither tied to a particular machine (citing In re Nuitjen for the required degree of tangibility to qualify as a machine) nor effected a transformation of any article into a different state or thing.  Citing Bilski, practice of the claims at issue did not qualify as a "transformation" because "'[p]urported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.'"

The majority was also crystal clear about its unwillingness (absent Supreme Court command) to consider any other test, calling the Bilski test the "'sole,' 'definitive,' 'applicable,' 'governing,' and 'proper' test for a process claim under § 101 . . . ."  And with regard to the applicability of the Court's State Street decision (which this panel agrees was not overturned by Bilski), the Court reminded appellants, and us, that the claims in State Street were directed to a machine, and that "[t]he claim at issue in State Street was thus drawn to a patent-eligible machine implementation of what may have otherwise been a non–patent-eligible abstract idea" (emphasis added).

As for the paradigm claims, the opinion cites both the Nuitjen and Bilski cases for the proposition that inclusion in one of the categories enumerated in the statute is a necessary prerequisite for patent eligibility.  Here, appellants' paradigm claims did not fit into a category, and hence were patent-ineligible.

Judge Newman (at left) continues to evince her displeasure with the substance of the Bilski decision in her concurrence, where she concurs with the majority's decision but little else.  She begins by reminding everyone that, as she reads it, the Supreme Court's Gottschalk v. Benson opinion does not support the reading of it adopted by the en banc Bilski majority.  Citing footnote 3 of the majority opinion:

Contrary to the concurrence's assertion, we do not contend that this court has overturned State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1373 (1998), but merely note that the "useful, concrete and tangible result test" "is insufficient to determine whether a claim is patent-eligible under § 101," Bilski, 545 F.3d at 959, and "is inadequate," id. at 960 (reaffirming that "the machine-or-transformation test outlined by the Supreme Court is the proper test to apply" (emphasis added)), and that "those portions of our opinions in State Street and AT&T [Corp. v. Excel Commc'ns, Inc., 172 F.3d 1352 (Fed. Cir. 1999),] relying on a 'useful, concrete and tangible result' analysis should not longer be relied on," id. at 960 n.19.

She asserts that the majority suggests that the Bilski decision overturned not only State Street but other precedent (including the Freeman-Walter-Abele test, the "technological arts" test and the "physical steps" test), constituting a "sweeping rejection of precedent [that] simply enlarges the taint on the thousands of patents that were granted in application of these tests."  She also disagrees with the scope of the majority's rationale for deciding the method claims at issue constitute an "abstract idea":

[T]he court disposes of the Ferguson method on the ground that it is an "abstract idea," although it is definite and concrete and limited, and not at all abstract.  The court resolves this dilemma by defining "abstract idea" as anything that does not meet the Bilski machine-or-transformation test.  However, the Ferguson marketing method is not an abstraction, even in Bilski terms.  The Ferguson method "does not pre-empt all uses of a fundamental principle in any field but is limited to a particular use, a specific application.  Therefore, it is not drawn to the principle in the abstract".  Bilski, 545 F.3d at 957.

The court's circular definition of "abstraction" as anything that is not patent-eligible under Bilski can impact the many new methods flowing from the new information technologies.  These methods have enhanced human capabilities, blurring the traditional line between machine and human; their patentability warrants at least consideration in appropriate cases, not disposition in dictum.

At base, Judge Newman is concerned about the consequences of extending Bilski as far as the majority of the Court seem to desire:

Until we are confident in understanding the consequences of our rulings, let us not forget that today's "knowledge economy" arose and thrived under the past law of patent eligibility.  Although I agree that new thinking is warranted, this court's broadside assault on patent-eligible subject matter is unsupported by any stated policy or benefit to either society or commerce.  We are ignorant of whether competitive activity, creative energies, and entrepreneurial initiatives, will founder or be facilitated by this court's dramatic change in the legal framework.  I take note that scholarship is starting to appear, as economists recognize "the new economy."  See, e.g., Richard G. Anderson, The New Economy: How the United States is Adapting to the Knowledge-Based Economy of the Twenty-First Century, Southern Illinois Economic Development Conference 21 (Sept. 21, 2006) (discussing intellectual property rights and the creation of knowledge).  But much more needs to be understood, as this court undertakes to change the legal framework of this economy.

Today's new capabilities of acquiring and using knowledge are producing myriad creative advances.  This court has offered no explanation of the interests and policy that we intend to serve by removing such advances from the legal framework of the patent system.  See, e.g., Milton Katz, The Role of the Legal System in Technological Innovation and Economic Growth, The Positive Sum Strategy 169 (1986) (explaining that the legal system plays a part in facilitating and promoting "business enterprise, technological innovation, and economic thought").

This court's retreat into the methods of the past is unworthy of our responsibility to support innovation in the future.  Major adjustment in established law should be based on changing industrial or intellectual or equitable needs -- of which no evidence is before this court.  The only need of which I am aware is that of the current harsh economic times, when the need is of enhanced incentives to innovation and investment in new things and new industries, not reduction in the existing incentives.

At the end of this passage, Judge Newman drops a footnote in response to a footnote in the majority opinion; a comparison of these notes illustrates the most interesting philosophical question raised in this case:

Majority note 7:

The essence of the concurrence is an argument premised on policy and philosophical grounds.  We disagree with this approach, as it is not the role of courts to make such arguments but rather the responsibility of Congress to consider amending the patent laws as necessary to recognize and allow for innovation in the future.

Judge Newman note 1:

I take note of the panel majority's criticism of my views as "policy" related.  Indeed, the major concern with my colleagues' aggressive elimination of patent access in areas of modern commerce is their failure to consider the policy effects.  The success of the common law derives from its relation to the policy that it implements.  As Justice Holmes stated:

The very considerations which judges most rarely mention, and always with an apology, are the secret root from which the law draws all the justices of life.  I mean, of course, considerations of what is expedient for the community concerned.  Every important principle which is developed by litigation is in fact and at bottom the result of more or less definitely understood views of public policy; most generally, to be sure, under our practice and traditions, the unconscious result of instinctive preferences and inarticulate convictions, but nonetheless traceable to views of public policy in the last analysis.

It is stunning, in a way, that Judges Gajarsa and Mayer question the Court's role in considering patent policy in making their decisions.  The majority's footnote 7 properly recognizes Congress as the ultimate arbiter of how it will exercise its Article I power to grant patents (provided, of course, that the Supreme Court does not conclude that its Acts are outside Constitutional boundaries).  But the Federal Circuit's role, as the only specialized appellate court in the federal judicial system, has always been to consider the policy implications of its decisions; even the Supreme Court has recognized the Federal Circuit's "special expertise" in this area.  Congress created the Court expressly with the aim of harmonizing U.S. patent law, a goal made difficult if not impossible without some consideration of the policy implications of its decisions.  Now it seems that at least two members of the Court believe this is not their role and eschew any suggestion that "policy" is a valid factor for their deliberations.  If the Federal Circuit is not to be involved in patent policy, then it can fairly be asked:  "What good is the Federal Circuit?"

Eli Lilly & Co. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2009)

    By Donald Zuhn --

The Federal Circuit today affirmed a decision by the District Court for the Southern District of Indiana to extend the statutory 30-month stay under 21 U.S.C. § 355(j)(5)(B)(iii), thereby preventing the U.S. Food and Drug Administration from approving the Abbreviated New Drug Application (ANDA) filed by Defendant-Appellant Teva Pharmaceuticals USA, Inc.

Seeking approval to manufacture and market a generic version of Plaintiff-Appellee Eli Lilly and Company's raloxifene hydrochloride formulation, which Lilly markets as Evista® for the treatment and prevention of postmenopausal osteoporosis, Teva filed an ANDA with the FDA in 2006.  In response, Lilly filed an infringement suit against Teva on June 29, 2006, alleging that Teva's ANDA filing infringed four Lilly patents (U.S. Patent Nos. RE38,968; RE39,049; RE39,050; and 6,906,086; directed to methods of preventing and treating postmenopausal osteoporosis using raloxifene).  The FDA followed by staying approval of Teva's ANDA for 30 months from the date Lilly received Teva's Paragraph IV notifications, with the stay set to expire on November 16, 2008.

In February 2007, Lilly amended its complaint to allege infringement of three additional patents (U.S. Patent Nos. 6,458,811; 6,797,719; and 6,894,064; directed to raloxifene particle size and formulation).  On July 8, 2008, Teva amended its ANDA to include a new particle-size measuring methodology for its raloxifene tablets, and notified Lilly of the amendment two days later.  In addition, Teva provided batch samples of its raloxifene tablets to Lilly on July 28, August 19, and September 17, 2008, and produced 27,000 pages of documentation related to the new particle-size measuring methodology on September 5, 2008.

In response, Lilly moved for an extension of the 30-month stay under 21 U.S.C. § 355(j)(5)(B)(iii), which allows a District Court to shorten or extend the statutory 30-month stay if "either party to the action fail[s] to reasonably cooperate in expediting the action."  In its motion, Lilly alleged that Teva "fail[ed] to 'reasonably cooperate in expediting the action' . . . as evidenced by Teva's last-minute alteration of its proposed drug product and its 'multiple delays in producing critical discovery . . . [which have] adversely affected Lilly's infringement case and trial preparation.'"  The District Court granted Lilly's motion for a stay, extending the 30-month stay until March 9, 2009, the date on which the trial was scheduled to begin.

In an opinion by Circuit Judge Rader, who was joined by Chief Judge Michel, a panel majority determined that the record contained sufficient evidence upon which the District Court could base its decision to extend the 30-month stay.  In particular, the majority noted that evidence in the record indicated that Teva had altered its particle size manufacturing specification and the method of measuring particle size, and "then delivered its changed samples to Lilly past the court's August 18, 2008, discovery deadline" (as the majority notes elsewhere in the opinion, one set of batch samples was delivered to Lilly prior to the discovery deadline).

In affirming the District Court's decision to extend the stay in this case, the majority distinguished the instant appeal from its decision in Andrx Pharmaceuticals, Inc. v. Biovail Corp., 276 F.3d 1368 (Fed. Cir. 2002), where the Federal Circuit vacated a district court decision to shorten the 30-month stay.  In Andrx, the CAFC held that the district court had erred by basing its decision to shorten the stay on Biovail's actions before the FDA (Biovail submitted a second patent on its NDA and, in a practice that is no longer permitted, secured a second 30-month stay after filing suit against Andrx on that patent).  According to the majority, "[u]nlike Andrx, in this case, the district court extended the statutory thirty-month stay based on its findings of Teva's lack of cooperation in expediting the patent litigation in its court," rather than on Teva's filing with the FDA.

Circuit Judge Prost, in dissent, argued that while "[t]he thirty-month stay described in 21 U.S.C. § 355(j)(5)(B)(iii) may be extended for one reason and one reason only:  'because either party to the action failed to reasonably cooperate in expediting the action,' . . . the district court never made any finding related to the statutory standard, i.e., whether Teva reasonably cooperated in expediting the action."  According to the dissent, the District Court provided only two justifications for extending the stay -- giving Lilly sufficient opportunity to identify the nature and composition of Teva's raloxifene product and providing Lilly with a reasonable amount of time to test Teva's altered raloxifene samples before trial -- and "[n]either of these reasons remotely resembles the statutorily required finding."  Noting that the Federal Circuit had examined the issue before it only once before (in Andrx), the dissent concluded that "[t]o affirm in this case is to effectively eliminate the statutorily required finding, and to prematurely terminate the development of appropriate standards governing modification under 21 U.S.C. § 355(j)(5)(B)(iii)."

Eli Lilly & Co. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2009)
Panel: Chief Judge Michel and Circuit Judges Rader and Prost
Opinion by Circuit Judge Rader

In re Kubin: The Obviousness of DNA

    By Kevin E. Noonan --

The Federal Circuit heard oral argument for In re Kubin last week, and a very hot bench (Judge Rader presiding, joined by Judges Linn and Friedman) sharply challenged the positions of both Kubin and the Patent Office.  While it is foolish to attempt to read the tea leaves of judicial intention when listening to oral argument, the questions from the bench point out once again that obviousness remains a legal issue intimately dependent on the underlying facts (and misapprehension of those facts).

Judge Rader immediately raised the "obvious to try" issue with Barbara Rudolph, representing Kubin.  After letting Ms. Rudolph get about 80 words into her presentation, Judge Rader asked her "If I use the O'Farrell standard of a reasonable expectation of success, don't I come out with the office?" which, he reminded her, preceded In re Deuel and thus would be controlling precedent.  She reminded the Court that the O'Farrell standard for "obvious to try" sets forth two situations where what is obvious to try is not obvious.  One of these is when all possible parameters are varied with no direction from the art on which parameter to vary or how.  That was the situation here, according to Ms. Rudolph. 

Judge Friedman then gave counsel the opportunity to take a breath and set forth some background information, asking for a brief synopsis of what the patent applicants were trying to do.  She responded by explaining the underlying immunology of natural killer (NK) cells.  In response to renewed questioning from Judge Rader, that the prior art Valiante reference "taught p38 which is NAIL" (the subject matter of the Kubin application was a cDNA encoding human NAIL), she reminded the Court that what Valiante disclosed was "a band on a gel," i.e., that the Valiante patent disclosed an antibody immunologically reactive to p38, and therefore, that Valiante did not disclose purified p38, but merely its detection on a Western blot (where it would be expected to be in the presence of a multiplicity of other proteins).

At this point the Court went off the factual rails a bit.  Judge Rader asked:

You're talking process to me, and frankly the only difference with the Valiante process and the Kubin process is the difference between a liquid immunoabsorption technique and a solid immunoabsorption technique, but we are not talking processes anyway.

From which Judge Rader came to the conclusion that:

We're talking p38 is NAIL isn't it.  . . .  So the prior art teaches what is claimed here, and you're trying to say:  "But they got there a different way."

Frankly, no.  Ms. Rudolph reminded the Court that Kubin was claiming a cDNA and the prior art taught the p38 protein, and that Kubin's claim was not to the entirety of the NAIL sequence but just to a fragment of it.  This led the Court to what seemed to be a greater misunderstanding of the underlying facts:

Judge Rader:  You're right, they actually claimed the probe that binds to NAIL, but once you [have] the probe that binds to NAIL, and the methods for producing the sequence, why hasn't the prior art shown a reasonable expectation they get to everything you claimed very quickly?

Rudolph:  Well, what they claim was the gene fragment encoding NAIL, but not all of NAIL, just a particular . . .

Judge Rader:  Yeah, they claimed that, but remember what they taught:  p38, which is NAIL.  They were smart; they claimed the probe.  The probe is what is of value anyway, so that's what you claim.  But they taught p38, which is NAIL.

Rudolph:  They taught only . . . they did not teach p38 in the sense of giving its . . . any information to identify . . .

Judge Rader:  No, they didn't give its sequence.  But again, that's where you can use the commonly used methods [that] anyone with skill in the art knows to get the sequence, and the only difference between the way they got the sequence and [the way] you got the sequence is the difference between the liquid and the solid immunoabsorption technique.

This colloquy seems to indicate that the Court is at least receptive to the Patent Office position that the cloning methods were "routine."  But this ignores, of course, the critical factual distinctions between the prophetic example from the prior art Valiante patent and what Kubin actually did.  Ms. Rudolph tried to get the Court back on track:

Rudolph:  No, because there is no reasonable expectation of success, because there are things that are missing in Valiante.  First is the NK cell library.  Valiante does not disclose the starting material, and what does Matthews teach us?  Mathew teaches us when you use a conventional method [to] isolate this gene, it does not work.  And what they used was a NK cell library with total RNA from NK cells, and that did not work.

Judge Rader seemed to continue to miss Ms. Rudolph's point that what was deficient in the art were not cloning methods, but a source for preparing a cDNA library:

Judge Rader:  We get the library out of Sambrook.  That is why they cite that part.  Matthew is kind of a reinforcing reference that shows [that] they did do everything you said they haven't done in the murine context, which shows again [that] it's easy for one of skill in the art to do it.  They can do it in mice.  They can do it in humans.  [They’re] closely related genomes.

As anyone familiar with the underlying science will recognize, you don't "get the library out of Sambrook."  You get generic cloning methods from Sambrook, but the predicate for using these methods is having a biological source, a cell or tissue, that expressed the protein encoded by a cDNA of interest, from which source Sambrook can be used to prepare a library.  It is ironic that one of the classic scientific limitations of gene cloning was ignorance of the source of such important cDNAs like blood clotting Factor VIII.

Judge Linn commented that, on the one hand, the Matthew reference "troubled" him as a teaching away, but also said he thought that example 12 of the Valiante reference was "of consequence" to the obviousness question.  In response to Judge Linn's question about the significance of Example 12 being a prophetic example, Ms. Rudolph responded that while its prophetic nature "didn't matter," looking at the evidence as a whole showed there was no reasonable expectation of success that practicing Example 12 would result in Kubin's invention.

Judge Rader continued to emphasize the existence of the antibody probe, combined with using "the Sambrook libraries," and then (voila!) "you find the sequence."  Ms. Rudolph responded succinctly:  "Probe it in what?  . . .  [Y]ou need a starting material from which to probe.  And if you have a NK cell library, that's not going to produce p38 or sufficient amounts [of it]."  Judge Rader then asserted that "Valiante had already produced p38," to which Ms. Rudolph reminded the Court that had been done for the protein and not for the cDNA.  Specifically, she correctly asserted that "you need a starting cell library that will have a sufficient amount of that particular gene that will produce that particular protein."  Unfazed, Judge Rader responded:

Well that is the kind of thing you assign to your lab assistant -- you assign your lab assistant to do it.  And yes, it's trial and error; and yes, you make lots of mistakes.  But remember, we have dealt with that in our case law:  Atlantic, Atlas Powder for instance.  You can have lots of mistakes and still produce it, and fully enable your invention.

Ms. Rudolph made one more attempt to clarify the issue:

Rudolph:  But the Board hasn't identified -- jumping to a different aspect of the claim -- the Board has not identified any basis for identifying a specific binding region -- what the structure of that binding region is -- and it hasn't identified any basis for finding CD48-binding obvious. And those are claim limitations that the Board would consistently like to ignore, or the PTO would like to consistently ignore.  And those are important limitations that could not have been predicted from Valiante, or any of the cited references, or Sambrook.  Which is really . . . Sambrook does not contain a recitation of NK cell library, Sambrook is just a general cloning . . .

Judge Rader:  No, it tells one of skill in the art how to produce those libraries, and when you [have] the probe it's not so hard to do.

Rudolph:  It does not tell one with skill in the art how to produce a NK cell library, and if you look at the methodology that's recited in the specification, what they used was a specific mixture of resting cells, resting NK cells and NK cells stimulated with a very specific cocktail of activators.  That's not disclosed in Sambrook.  That's not disclosed in Valiante.  That's not disclosed anywhere, and nor is any of the CD48-binding aspects of this claim disclosed anywhere.  And this is really getting down to the problem that we see with the Board's analysis -- [the Board] is looking at the methodology and that's not the proper way.  It's easy to say, sure . . . could someone have used a hammer and a nail to get there?  Could someone have used conventional tools to get there?  That's a different question from:  Is this claimed subject matter as a whole obvious than what came in the prior art?  And looking at this invention, as is should be looked at -- the genetic basis for the binding region for an very important interaction between NAIL and CD48 -- when that interaction was not known in the prior art and has significant biological consequences.

Janet Gongola, Associate Solicitor for the Office of the Solicitor, argued for the Patent Office.  Judge Rader started her off with Deuel, asking her the converse of his O'Farrell question to Kubin's counsel.  She distinguished Deuel based on the statement in Deuel that:

Identification of a structurally similar molecule in the prior art is normally where you would start to make a chemical obviousness finding.  Normally -- that word is key because it is descriptive of one way you can establish chemical obviousness.  It's not prescripted  . . . so you always have to do it that way.

A unique argument to anyone with a memory of the In re Bell / In re Deuel dyad of cases and the Federal Circuit's clear holding (followed de facto by the Patent Office ever since) overruling the same arguments the Office now makes against Kubin's claims.  Judge Rader persisted, asking Ms. Gongola to "distinguish the rule of Deuel, which says general methodologies are irrelevant.  [And if so,] you lose Sambrook, and if you don't have Sambrook, you can't have the libraries [and] you can't use example 12 to get to Kubin."  Her response:

Gongola:  Respectfully, your Honor, I disagree with that Deuel goes on to general methodologies for making an undefined cDNA molecule.  The Court there said that it was irrelevant to whether a specific molecule would have been obvious.  In the very next sentence, the Board explained what to do -- I'm sorry, the Court -- explains what to do with this specific method, and the Court said:  "A prior art disclosure of the process reciting a particular compound is another matter raising issues of anticipation and obviousness."  We are that other matter, and what the Board did here is [it] looked at the teaching of Valiante.  Valiante identified p38 cDNA, [which] gave [the skilled artisan] motivation to make it, and then provided a methodology of doing so.  So Deuel envisions the situation we have here, and says the result would be different.  We have a specific method, teaching how to make a specific DNA molecule, falling within the scope of the genus.

Judge Linn then asked her about the statements by Kubin's counsel that Valiante did not show a library.  Ms. Gongola responded:

If you listen to what exactly Ms. Rudolph said, she explained to you that Example 12 did identify starting materials -- a specific kind of NK cell library that a person of skill of the art would have known to use.  This kind of goes to the question of reasonable expectation of success -- Matthews [sic] provides that reasonable expectation of success.  Matthews followed the method of Valiante identically except [for] using mouse NK cells instead of human [cells] as a starting material, and instead of using a probe specific for human p38 cDNA.  Matthews used [a probe] for 2B4 cDNA.  But Matthews successfully followed the method otherwise, and obtained 2B4 cDNA, the mouse counterpart to human NAIL.

So, the Board made specific findings in this regard on page A9 of its decision.  It explained that Matthews is cumulative to Valiante and provides the reasonable expectation of success.  Kubin itself, before the Board -- and the Board made this finding at Finding of Fact 13, admits that conventional cloning methodologies were known in the art.  People knew how to clone.  The Board capitalized on this, found that Valiante taught a prior art species, that [this] species was obvious in light of the method used to make it, and then in turn said that the prior art disclosure of an obvious species under the line of Lilly renders the claimed genus obvious.

There are, of course, two errors of fact and one of law in this argument.  The first is that neither the Matthew reference nor the Valiante reference taught that mouse 2B4 was the murine homolog of human NAIL.  That understanding was evident only when Kubin succeeded in cloning NAIL cDNA and compared it to the mouse 2B4 reference.  Second, the reason that Matthew could use substantially the same method that Valiante prophetically taught for cloning the murine p38-encoding gene is that mouse NK cells make sufficient 2B4 mRNA that a conventional murine cDNA library will be capable of producing cDNA clones encoding the sought-after gene.  Kubin (and Matthew) show that this isn't the case for human NK cells.  Ms. Gongola, and the Board, continue to base their obviousness argument on the obviousness of the cloning methods -- "People knew how to clone" -- but as Judge Lourie realized in Deuel, that isn't the standard:

The PTO's focus on known methods for potentially isolating the claimed DNA molecules is also misplaced because the claims at issue define compounds, not methods.  See In re Bell, 991 F.2d 781, 785, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993).  In Bell, the PTO asserted a rejection based upon the combination of a primary reference disclosing a protein (and its complete amino acid sequence) with a secondary reference describing a general method of gene cloning.  We reversed the rejection, holding in part that "the PTO's focus on Bell's method is misplaced.  Bell does not claim a method.  Bell claims compositions, and the issue is the obviousness of the claimed compositions, not of the method by which they are made."  Id.

And KSR does nothing to change that.

Interestingly, in view of the professed desire of the Office to have the Federal Circuit overturn Deuel, Ms. Gongola did not assert any deficiencies in Deuel per se occasioned by the Supreme Court's KSR decision:

Judge Rader:  Deuel, is it consistent with KSR?

Gongola:  Yes, your Honor, except for one small feature of KSR.  Deuel . . .

Judge Rader:  You don't seem -- the Board doesn't seem to agree with you.

Gongola:  I would disagree with that characterization.  The Board explained -- if we look at page A8 of their decision -- they don't say that KSR overturns Deuel or anything along those lines.  The Board pointed out that KSR may cast doubt on Deuel to the extent that the Federal Circuit has rejected an obvious to try test.  In KSR, the Supreme Court said that in certain circumstances, obvious to try may be the standard for obviousness.  And that's what the Board is saying here, that to the extent people are citing Deuel for the proposition [that] obvious to try can't be the standard, well . . . KSR cast doubt on that.  But otherwise, Deuel remains good law.

Judge Rader:  Well, KSR said rather persuasively on page 12 here [that] it might have been obvious to try the combination of Asano, and the big mistake, of course, was rejecting Asano, because obvious to try . . . and they cite Deuel for the mistaken methodology of not trying the combination of Asano.  Doesn't that cast a little doubt on Deuel?

Gongola:  Only to the extent that Deuel says obvious to try can't be the standard.  I think the Supreme Court went on to clarify that when there is a design need or a market identifies a problem, and there's a finite number of identified solutions, and those solutions are predictable, then obvious to try can be the standard.  And the Board here applied that principle in an alternate fashion, so we've got the obvious species grounds and separate obvious to try grounds for finding [that] Kubin's claimed invention would have been obvious.  Here the Board said that the problem was to identify or isolate NAIL cDNA, there were a limited number of methodologies to do so, and a person of skill in the art would have followed those methodologies and met with success.  The Board was correct.  Valeinte teaches one and one only one method for isolating p38 cDNA.  Matthews comes along and provides the reasonable expectation of success, showing, hey, they followed that same method, and they obtained 2B4 cDNA.

She also asserted, in response to Judge Linn's comment that KSR involved simple mechanical technology, that the Supreme Court in KSR envisioned that its principles would be applicable across other technologies.  Ms. Gongola based this assessment on dicta in KSR that the application of such principles to other technologies might not be as easy as it had been for the Court in KSR.  She also cited the Federal Circuit's Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd. decision as one "that helps us in this case," again asserting the "facts" before the Court in Kubin.  The Federal Circuit's decision in finding Takeda's claims non-obvious was based on the "hundreds of [related] compounds" in the prior art and the failure of the art to teach "compound b" as a desirable compound.  Here, according to Ms. Gongola:

Our facts stand in direct contrast to those facts in Takeda.  Here we have a limited number of methodologies -- we have one method being taught by Valiante's Example 12.  And Matthews evidences the expectation of success.  So, this is a classic case to apply obvious to try in a unpredictable art, and to demonstrate it will work.  That's what the Board meant at pages A8 and A9 of its decision when it applied obvious to try to these facts.

Both Kubin and amici had the opportunity to argue in their briefs the factual distinctions and misapplication of the facts in the Board's obviousness analysis.  However, unless one of the judges or their clerks digs down far enough to understand the limitations of the art, and the hindsight recognition that mouse 2B4 and NAIL are homologs, the Court may need to defer to the Office's factual findings under Dickinson v. Zurko.  And Ms. Gongola's protestations that the Office does not seek to overturn Deuel should preclude a sea change in Patent Office examination even if the court upholds the Kubin rejection. 

A decision is expected (but not guaranteed) within 90 days.

For information regarding this and other related topics, please see:
• "Kubin Panel Questions Motivation behind Reversal in New Written Description Training Materials," January 8, 2009
• "In re Kubin to Be Argued before the Federal Circuit on Thursday," January 7, 2009
• "Docs at BIO: Panel Discusses IP Strategies after KSR," June 26, 2008
• "Docs at BIO: 'Gotcha' Games Continue at USPTO," June 25, 2008
• "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S.," June 22, 2008
• "Briefs for In re Kubin filed by Amgen and BIO," June 12, 2008
• "USPTO's Bruce Kisliuk Addresses ACI Conference," March 3, 2008
• "DNA Non-obviousness under Ex parte Kubin (It Gets Worse)," October 18, 2007
• "Ex parte Kubin (B.P.A.I. 2007)," July 18, 2007

Kubin Panel Questions Motivation behind Reversal in New Written Description Training Materials

    By Donald Zuhn --

As we reported yesterday, the Federal Circuit heard oral argument today in In re Kubin (see "In re Kubin to Be Argued before the Federal Circuit on Thursday").  Kevin Noonan will be providing a complete analysis of the oral argument in this case in a subsequent post.  One interesting aside, however, involved an exchange between the Court (specifically Circuit Judge Rader) and USPTO Associate Solicitor Janet Gongola regarding Example 11 of the new Written Description Training Materials.

Last March, the Patent Office announced that it had updated the training materials to be used by examiners in the examination of patent applications for compliance with the written description requirement.  The revised training materials replaced the previous set of training materials issued by the Office in 1999.  Perhaps the most interesting of the seventeen examples in the new training materials is Example 11, which concerns claims that are directed to a polynucleotide or polypeptide sequence that shares percent identity with another sequence  (see "An Analysis of the New Written Description Training Materials - DNA Hybridization & Percent Identity").

Example 11 is divided into two sections, one in which there is no art-recognized structure-function correlation for the claimed sequence (Example 11A), and one in which there is an art-recognized structure-function correlation for the claimed sequence (Example 11B).  Both subparts present identical exemplary claims reciting an isolated nucleic acid that encodes a polypeptide with at least 85% amino acid sequence identity to SEQ ID NO: 2, and nearly identical exemplary claims reciting an isolated nucleic acid that encodes a polypeptide with at least 85% amino acid sequence identity to SEQ ID NO: 2; wherein the polypeptide has a recited activity.  The only difference between the hypothetical specification of Example 11A and the hypothetical specification of Example 11B is that the latter identifies two domains -- a binding domain and a catalytic domain -- that are critical to the recited activity.  The training materials specify that the first exemplary claim in each subpart satisfies the written description requirement.  The training materials also state that while the second exemplary claim in Example 11B satisfies the written description requirement, the second exemplary claim in Example 11A does not.

Last June, during a presentation at BIO 2008, Group 1600 Director Dr. George Elliott acknowledged that Example 11 represented a reversal in the Office's position (see "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S.").  In particular, Dr. Elliott noted that the Office's position had previously been that claims lacking functional language (such as the first exemplary claim in Examples 11A and 11B) failed to comply with the written description requirement and that claims possessing such language (such as the second exemplary claim in Examples 11A and 11B) complied with the requirement.  Dr. Elliott contended that claims with functional language (where the specification lacks any teaching regarding the amino acid residues that are tolerable to change) do not satisfy the written description requirement because "the minute you add function, you've limited the claim to a subset of species, and you don't know which species are in the subset and which species aren't."  In other words, absent any teaching of structure/function relationships, the Patent Office's position is that one cannot determine the species that share at least 85% sequence identity with the recited sequence and also possess the recited function.  For a more thorough discussion of the rationale behind the USPTO's reversal on functional limitations, Dr. Elliott recommended that attendees read Ex parte Porro, which involved an application filed in June of 2003 (for a discussion of the Porro decision, see "The Written Description Training Materials and Ex parte Porro").

With respect to today's oral argument in Kubin, the Court speculated that the Patent Office may have reversed its position on the fact pattern set forth in Example 11 in order to support its argument that Kubin lacked an adequate written description despite the recitation in claim 73 of an activity limitation (i.e., binding CD48).  A transcript of the exchange between the Court and Associate Solicitor Gongola follows:

Gongola:  I'd like to move now -- if the Court has no more questions on obviousness -- into the written description area.  This Court found that written description was not satisfied under the only two tests that Kubin ever raised before the Board:  the representative number of species test and the structure-function correlation test.  Now, the Board found, at Finding of Fact 20 and 21, that the specification only taught how to make cDNA molecules that encode NAIL identically.  That's one subgenus.  The Board found, at Finding of Fact 22, that the specification did not teach anything about any variants.

Court:  What about the conservative substitutions set forth at page 63?

Gongola:  The language on conservative substitution, using the Board's own findings, does not demonstrate -- Finding of Fact 23 -- which 20% of the amino acid residues should be changed to maintain function.  So that discussion of conservative substitution may teach how to make the variants, but it doesn't teach what those variants are.  It doesn't describe them so that a person of skill in the art would understand that Kubin possessed the variants.  There -- the Board Finding of Fact 25 says that there are a very large number of modifications that can be made.  One in five amino acids can vary.  We have no idea which of the 21 to 220 -- 22 to 221 portion of NAIL to change and maintain binding -- which amino acids have to remain and which can be substituted.  But more than that, even if this Court would accept the discussion that the conservative substitution could somehow provide written description support for variants, it wouldn't still do so for the full scope of the genus.  That discussion would only apply to variants made by substitution.  Applicant -- Kubin has defined a variant to be made by a substitution, an insertion, or a deletion.  Conservative substitution dialog doesn't speak to anything about variants made by insertions, or variants made by deletions.  So therefore, Applicant Alonso still has -- I'm sorry, Kubin . . .

Court:  Yes, but the description of the variations is also linked to a protein having activity Y.  Therefore, this satisfies the function-structure alternative test for written description, doesn't it?

Gongola:  No, your Honor.  The function-structure test requires an identification of a structure common to all members of the genus.  We do not have that identification of a common structure.  Twenty percent . . .

Court:  I'm quoting almost out of PTO's manual on written description -- verbatim -- when I give my example there, am I not?  The variations plus the activity Y -- protein having activity Y -- isn't that exactly the PTO's manual on written description?

Gongola:  Are you referring to the training materials?

Court:  Yes, I am.

Gongola:  That language may be found in the training materials, but it is not -- it's guidance.  It's -- each case of written description has to be decided on its own facts.

Court:  The Patent Office is guiding applicants on how to do things wrong?

Gongola:  No, your Honor, but guidance provided in a training document cannot be taken and applied to each case.  Each case has to be decided on its own facts.

Court:  So it's just guidance to examiners on how to do it wrong?

Gongola:  No, your Honor -- respectfully -- it is guidance to the public as well, but . . .

Court:  But if we take that guidance, we don't get to your result, do we?

Gongola:  No, your Honor, I respectfully disagree; we do.  In Carnegie Mellon, this Court has explained that when there's substantial variation within a genus, an applicant has to describe a sufficient number of species to reflect the variation.  Kubin has not done that here.  Kubin hasn't described any variation.  If we want to look at the training materials, the Board only . . .

Court:  It's interesting that this was revised immediately after Kubin -- the Kubin result -- wasn't it?

Gongola:  That . . .

Court:  Which is kind of an admission that the example did track Kubin and was detrimental to your position, wasn't it?

Gongola:  No, your Honor.

Court:  So, despite your smiling defense, the facts tend to give us a different conclusion.

Gongola:  No, your Honor, that's not correct.  The training materials were not revised post-Kubin to somehow capture Kubin.  The revisions have been in the works for a very long time.

Court:  I see, okay.

Gongola:  So it's just coincidence that Example 11 may seem to look like the Kubin fact pattern.  But if we actually look at Example 11, it is distinguishable from the facts here.  Example 11 goes to a nucleic acid that encodes a polypeptide that has certain homology -- 85% homology -- and a certain activity.  Now here's where -- that sounds a lot like Kubin's claim.  I agree with that.  But here's where the difference resides:  the specification in Example 11 disclosed two specific domains that were responsible for the activity.  Kubin's specification here doesn't contain any similar disclosure.  So the fact pattern here is different from the fact pattern in the revised training materials.  But I also want you to know -- these materials, as you point out, were not even in existence when the Board rendered its decision.  So it really isn't proper to be considering them right now, since the Board didn't have a chance to consider them in the first instance.  And on top of that, they're only guidance.  They're not a rigid rule.

In re Kubin to Be Argued before the Federal Circuit on Thursday

    By Kevin E. Noonan --

The Federal Circuit will hear oral argument on Thursday for In re Kubin, a case having great significance for biotechnology patenting.  At issue is the question of whether the existence in the prior art of a purified protein, combined with "routine" cloning methods, renders obvious a claim to a nucleic acid encoding the protein.  This was the Patent Office position twelve years ago, which was rejected by the Federal Circuit in the In re Bell and In re Deuel decisions.  But the Supreme Court's KSR Int'l Co. v. Teleflex Inc. decision emboldened the Patent Office to challenge the Federal Circuit on this issue.  As a bonus, the Court will also be asked to opine on how the Office has interpreted its frequently-conflicting written description jurisprudence.

To recap, the case involved an application claiming an isolated cDNA encoding Natural Killer Cell Activation Inducing Ligand (abbreviated as NAIL).  The Board determined that all the claims would stand or fall together, since they were not argued separately; accordingly, its analysis was confined to claim 73:

73.  An isolated nucleic acid molecule comprising a polynucleotide encoding a polypeptide at least 80% identical to amino acids 22-221 of SEQ ID NO:2, wherein the polypeptide binds CD48.

The Board cited three prior art references, including (1) Valiante, which identified the existence of a protein, p38, present on the cell surface of natural killer cells and a monoclonal antibody specific for p38; and (2) Sambrook et al., a standard reference work describing gene cloning techniques (otherwise known as the "Maniatis manual").  The Valiante reference contained a prophetic example to the effect that the gene encoding the p38 protein could be isolated using methods such as those disclosed in Sambrook et al.  The Board considered but did not rely upon a reference to Matthews, which disclosed a mouse protein, 2B4, expressed on the cell surface of natural killer cells (2B4 is the mouse ortholog of human p38 although that was not disclosed in the art).  The Board stated that it found Matthews "cumulative" of the teachings of Valiante and Sambrook et al.; nevertheless, it used this reference as an "illustration" of how a gene could be isolated.  The evidence from the applicants' specification was that their NAIL cDNA clones were produced using an expression library screened with a commercially-available monoclonal antibody against human p38.

The Board based its factual determinations on the notion that the art had progressed since the time Deuel was decided.  These differences included:

1.  In Kubin, a cell "unambiguously" (see below) expressing the gene was known; in Deuel, the cloned gene was isolated from a cDNA library prepared from placenta, even though the protein encoded thereby was expressed specifically in brain.

2.  In Kubin, the art provided an isolated preparation of the cognate protein and a monoclonal antibody that binds to the protein; in Deuel, the art disclosed isolated preparations of three different brain-specific proteins but no antibodies.

3.  In Kubin, the art provided a monoclonal antibody specific for the gene product of the desired cDNA and thus providing a specific probe; in Deuel, the probes were a plurality of degenerate oligonucleotides prepared from the partial amino-terminal amino acid sequences.

4.  In Kubin, the art has developed expression cloning technology and provided an antibody probe specific for the gene product of the desired clone; in Deuel, the absence of a specific antibody precluded use of expression cloning technology.

Even if the Board was correct in considering these factual distinctions, the Board's decision demonstrated that it did not learn the fundamental lesson from the Federal Circuit's decision in Deuel:  that the obviousness of a method for producing a cloned nucleic acid is not sufficient to render obvious the cDNA itself.  Rather, the Board attempted to apply the Supreme Court's statements from KSR regarding the obviousness of what is "obvious to try."  Expressly citing the Supreme Court's language:

When there is motivation to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.  If this leads to anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.  In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.  KSR Int'l Co. v. Teleflex Inc., 127 S. Ct. 1727, ___, 82 USPQ2d 1385, 1397 (2007).

the Board opined, "[t]his reasoning is applicable here."  The Board then went on to state:

The "problem" facing those in the art was to isolate NAIL cDNA, and there were a limited number of methodologies available to do so.  The skilled artisan would have had reason to try these methodologies with the reasonable expectation that at least one would be successful.  Thus, isolating NAIL cDNA was "the product not of innovation but of ordinary skill and common sense," leading us to conclude NAIL cDNA is not patentable as it would have been obvious to isolate it.

Using this reasoning as its basis, the Board showed its willingness to continue to conflate whether the method for making a cDNA such as the NAIL cDNA would be obvious with the obviousness of the cDNA itself.  This is consistent with the reasoning, and the mistakes, made by the Board in Deuel:

The PTO's focus on known methods for potentially isolating the claimed DNA molecules is also misplaced because the claims at issue define compounds, not methods.  See In re Bell, 991 F.2d 781, 785, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993).  In Bell, the PTO asserted a rejection based upon the combination of a primary reference disclosing a protein (and its complete amino acid sequence) with a secondary reference describing a general method of gene cloning.  We reversed the rejection, holding in part that "the PTO's focus on Bell's method is misplaced.  Bell does not claim a method.  Bell claims compositions, and the issue is the obviousness of the claimed compositions, not of the method by which they are made."  Id.

We today reaffirm the principle, stated in Bell, that the existence of a general method of isolating cDNA or DNA molecules is essentially irrelevant to the question whether the specific molecules themselves would have been obvious, in the absence of other prior art that suggests the claimed DNAs.  . . .  There must, however, still be prior art that suggests the claimed compound in order for a prima facie case of obviousness to be made out; as we have already indicated, that prior art was lacking here with respect to claims 5 and 7.  Thus, even if, as the examiner stated, the existence of general cloning techniques, coupled with knowledge of a protein's structure, might have provided motivation to prepare a cDNA or made it obvious to prepare a cDNA, that does not necessarily make obvious a particular claimed cDNA.  "Obvious to try" has long been held not to constitute obviousness.  In re O'Farrell, 853 F.2d 894, 903, 7 USPQ2d 1673, 1680-81 (Fed. Cir. 1988).  A general incentive does not make obvious a particular result, nor does the existence of techniques by which those efforts can be carried out.  Thus, Maniatis's teachings, even in combination with Bohlen, fail to suggest the claimed invention.

The problem with the Board's analysis is that KSR requires a "finite number of identified, predictable solutions" (something that does not apply to nucleic acids and which was the basis for the Federal Circuit's decisions in In re Deuel and In re Bell).  Such a "finite number" of "identified, predictable" solutions were not known in the prior art cited by the Board.

An important factor discounted by the Board comes from the disclosure of the Matthews reference, relating to the isolation of the mouse ortholog of the human NAIL cDNA.  This reference was not considered by the Board, which seemed to recognize that the art did not teach that p38 was the mouse ortholog of NAIL.  Moreover, the Matthews reference contained Northern blot experiments (for detecting mRNA expression of NAIL) from human cells and tissues indicating that NAIL expression could not be detected in the immune cell types that applicants used for cloning the human NAIL cDNA.  The Board thus ignored evidence in the art that reduced the likelihood that the human NAIL cDNA could be isolated using the methods disclosed in the Sambrook et al. reference, since the art taught that human cells that actually expressed the NAIL cDNA did not do so.  This is an important distinction with Deuel:  in that case the gene was isolated from a tissue where its expression was not expected, while in Kubin the art taught affirmatively that the gene was not expressed in the tissue source of the cDNA used by applicants.

The other issue to be decided by the Federal Circuit involves the Board's decision to affirm the Examiner's determination that the application failed to satisfy the written description requirement for claims reciting nucleic acids encoding proteins at least 80% identical to the disclosed amino acid sequence of the claimed human NAIL protein.  The Board held that Kubin was not entitled to a claim to an isolated nucleic acid encoding a protein having 80% identity to the disclosed amino acid sequence and that bound to CD48.  Kubin's specification disclosed the amino acid sequence of the protein encoded by the NAIL gene, as well as domains of the protein (signal peptide, extracellular domain, transmembrane domain, and cytoplasmic domain), including the portion of the protein that bound to CD48 (amino acids 22-221).  The specification also disclosed conservative substitutions of these sequences, in addition to deletions, insertions, and fusions.  These teachings were generic, however, and no specific amino acid sequence variants were disclosed.  The Board held that the absence of any specifically-disclosed variants was a failure to satisfy the written description requirement and upheld rejection on these grounds.

The Federal Circuit's decision on the written description issue may be at least as important as its determination of what is non-obvious, since it presents a question not yet squarely put to the Federal Circuit.  The Federal Circuit has developed its written description jurisprudence (in Regents of the University of California v. Eli Lilly & Co., Enzo Biochem, Inc. v. Gen-Probe Inc., and University of Rochester v. G.D. Searle & Co.) generally in the context of patent infringement litigation and, except for dicta in its second Enzo decision, has not had the opportunity to provide guidance to the Office on how (or whether) its Guidelines are properly applying the Court's case law.  The Patent Office has applied its Guidelines to effectively preclude an applicant from claiming "conservative substitutions," on the basis that there was no disclosure of a "representative number of species."  (Of the 8,367 issued U.S. patents reciting "isolated" and "nucleic acid" in the claims, only 20 contain the term "conservative substitution.")  It has become clear that the Office's use of the Guidelines would prevent an applicant from ever disclosing a sufficient number of substitutions that the Office would consider "representative" based on the type of generic disclosure set forth in Kubin's specification, and that it was impractical if not impossible to comply with the Office's requirements.  The Office appears to have extended the Federal Circuit's requirement that structural domains important for biological activity be identified, to require that an applicant identify which amino acid residues can be modified and which cannot.  This is a clear extension of the analysis set forth in Eli Lilly that has no support in any Federal Circuit decision.  Yet, the Office routinely refuses to allow claims containing "conservative substitutions" within their scope.  In re Kubin puts the question squarely before the Federal Circuit for the first time.

Patent Docs will provide a synopsis of the argument in a subsequent post.

For information regarding this and other related topics, please see:
• "Docs at BIO: Panel Discusses IP Strategies after KSR," June 26, 2008
• "Docs at BIO: 'Gotcha' Games Continue at USPTO," June 25, 2008
• "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S.," June 22, 2008
• "Briefs for In re Kubin filed by Amgen and BIO," June 12, 2008
• "USPTO's Bruce Kisliuk Addresses ACI Conference," March 3, 2008
• "DNA Non-obviousness under Ex parte Kubin (It Gets Worse)," October 18, 2007
• "Ex parte Kubin (B.P.A.I. 2007)," July 18, 2007

Top Stories of 2008: #5 to #1

    By Donald Zuhn --

Yesterday, we counted down stories #9 to #6 of the top stories covered at Patent Docs in 2008 (see "Top Stories of 2008: #9 to #6"), and on New Year's Day, we listed stories #13 to #10 (see "Top Stories of 2008: #13 to #10").  Today, we conclude our second annual list of top stories by counting down the top five stories of 2008.  In case you missed the articles the first time around or wish to go back and review them, we have also provided links to our coverage of these stories (as well as a few links to articles on related topics).  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with our rankings, please let us know.


#5 -- Examination of Obviousness in Group 1600

Obviousness-related stories took the #5 (obviousness guidelines) and #4 (Supreme Court KSR decision) spots on our 2007 list of top stories.  With respect to the USPTO's issuance of guidelines for making obviousness determinations, we "predicted" that it would take some time for patent practitioners to discover the extent to which the new obviousness guidelines might impact patent prosecution.  For practitioners in the biotech and pharma arts, it didn't take too long.  As we reported in March, Bruce Kisliuk, a former Director with USPTO Technology Center 1600, informed attendees at an American Conference Institute (ACI) conference that most of the rationales set forth in the new obviousness guidelines applied to "classical mechanical situations" rather than biotech and pharma applications.  As a result, TC 1600 examiners were being taught to analyze obviousness using eleven key cases (consisting of seven CAFC, three district court, and one board decision).  One of these cases, the board decision in Ex parte Kubin, is scheduled for oral argument before the Federal Circuit on Thursday.

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

• "Docs at BIO: Panel Discusses IP Strategies after KSR," June 26, 2008
• "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S.," June 22, 2008
• "Briefs for In re Kubin filed by Amgen and BIO," June 12, 2008
• "USPTO's Bruce Kisliuk Addresses ACI Conference," March 3, 2008

#4 -- New Written Description Guidelines Issued

Obviousness was not the only requirement for patentability that garnered special attention at the Patent Office last year.  At the end of March, the USPTO released revised training materials for use in the examination of patent applications for compliance with the written description requirement.  The new training materials, which replace the training materials issued by the Office in 1999, provide seventeen examples, of which fourteen are specifically related to biotech inventions.  While many of the examples should be of interest to biotech/pharma practitioners (as shown below, analyses of the majority of these examples were provided on Patent Docs), the most interesting example may be Example 11, which concerns claims reciting a polynucleotide or polypeptide sequence that shares percent identity with another sequence.  The new training materials give the impression that claims reciting both percent identity and functional limitations can create more of a written description problem than claims reciting just a percent identity limitation (while the training materials note that the latter class of claims could present an enablement problem, this advice comes by way of a separate practice note).  During a BIO 2008 presentation, TC 1600 Director Dr. George Elliott explained that the rationale behind Example 11 could be found in Ex parte Porro.  Unfortunately, with respect to Example 11, the training materials appear to neglect case law that allows for the recitation of a genus containing some inoperative species.

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

• "In re Alonso (Fed. Cir. 2008)," November 3, 2008
• "The Written Description Training Materials and Ex parte Porro," July 8, 2008
• "Docs at BIO: 'Gotcha' Games Continue at USPTO," June 25, 2008
• "An Analysis of the New Written Description Training Materials – Protein Variants," June 24, 2008
• "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S.," June 22, 2008
• "An Analysis of the New Written Description Training Materials – Antisense," May 13, 2008
• "An Analysis of the New Written Description Training Materials – Antibodies to a Single Protein & Antibodies to a Genus of Proteins," May 12, 2008
• "An Analysis of the New Written Description Training Materials - ESTs & Partial Protein Structures," May 8, 2008
• "An Analysis of the New Written Description Training Materials - DNA Hybridization & Percent Identity," May 6, 2008

#3 -- Patent Reform Stalls in the Senate

No story on this year's list received more coverage on Patent Docs -- as evidenced by the list below -- than the story that moved from #6 on last year's list to #3 on this year's list:  patent reform.  But for the fact that the Senate patent reform bill never reached the floor for a vote (the bill was removed from the Senate calendar last spring), this story might have reached #2 on our list.  The year started out with the release of a draft of the Senate Judiciary Committee's report on the Patent Reform Act of 2007 (S. 1145), saw a better-late-than-never movement by biotech and pharma companies and organizations against biotech/pharma-unfriendly provisions of the bill, and ended with the announcement by Senator Jon Kyl (D-AZ) of a (possibly) more biotech/pharma-friendly patent reform bill to compete with Senator Patrick Leahy's (D-VT) bill.  Both bills are expected to be re-introduced when the 111th Congress gets down to business this month.  As with follow-on biologics legislation, however, whether the new Congress will be able to devote much attention to patent reform in view of the current economic crisis remains to be seen.

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

• "BIO Praises Senator Kyl's Patent Reform Bill," September 26, 2008
• "Senator Kyl’s Patent Reform Bill Introduced Today," September 25, 2008
• "BIO Discusses Legislative Accomplishments," September 3, 2008
• "Senate Patent Reform Legislation -- One Old Bill and One New Bill," August 11, 2008
• "Patent Reform Critic Says Legislation Would Be Costly and Counterproductive," July 30, 2008
• "Wall Street Journal: Current Patent System Suppresses Innovation," July 14, 2008
• "Evolution of Inequitable Conduct," May 27, 2008
• "Patent Hypocrisy," May 22, 2008
• "Bush Administration Continues Attempt to Destroy U.S. Patent System," May 18, 2008
• "Senate Patent Reform Bill: R.I.P.?" May 5, 2008
• "New York Times to Innovation: Drop Dead," April 30, 2008
• "No End to Fee Diversion?" April 21, 2008
• "BIO Commends Senator Specter for Patent Reform Stance," April 10, 2008
• "Commerce Secretary 'Entirely Wrong' on Inequitable Conduct Reform," April 8, 2008
• "Last Call to Voice Your Opposition to AQS Provision," April 4, 2008
• "Department of Commerce Sends Senators Second Letter on Patent Reform Bill," April 3, 2008
• "IPO Distributes 'Urgent' Legislative Alert on Applicant Quality Submissions," March 30, 2008
• "Amendments to S. 1145," March 17, 2008
• "Harry Manbeck on Inequitable Conduct," March 13, 2008
• "It's Getting to Be Crunch Time for S. 1145," March 13, 2008
• "U.S Patent 'Reform' Bill Worries Israelis," February 22, 2008
• "Judge Michel Doesn't Think Much of Senate Bill S. 1145, Either," February 20, 2008
• "The (Un)Intended Consequences of the Law," February 18, 2008
• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part I," February 14, 2008
• "BIO Report Indicts 'Patent Reform' Proponents," February 13, 2008
• "Patent Reform and Infringement Damages: Some Economic Reasoning," February 5, 2008
• "Department of Commerce Sends Letter on Patent Reform to Senator Leahy," February 4, 2008
• "Biotech and Pharma Opposition to Senate Patent Reform Bill," February 3, 2008
• "The Letters Keep Coming Over the Senate Transom," January 30, 2008
• "Draft Report on Senate Patent Reform Bill: Interlocutory Decisions & Venue," January 29, 2008
• "Draft Report on Senate Patent Reform Bill: Damages," January 28, 2008
• "Draft Report on Senate Patent Reform Bill: Applicant Quality Submissions & Micro-Entities," January 25, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill: An Update," January 23, 2008
• "Draft Report on Senate Patent Reform Bill: Post-Grant Procedures," January 22, 2008
• "Draft Report on Senate Patent Reform Bill: Inequitable Conduct Provisions," January 21, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill," January 18, 2008
• "Draft Report on Senate Patent Reform Bill: First Inventor to File Provisions," January 17, 2008
• "Draft Report on Senate Patent Reform Bill: Assignee Filings, Mandatory Publication, and Third Party Submissions," January 16, 2008
• "Draft Report on Senate Patent Reform Bill: Late Patent Filings," January 15, 2008
• "Draft Report on Senate Patent Reform Bill Circulated," January 14, 2008

#2 -- The Rise and Fall of Other USPTO Rules Packages

The USPTO spent most of 2008 defending four major rules packages:  the claims and continuations, IDS, Markush, and appeal rules.  The enjoinment of the claims and continuations rules is currently at issue in the Tafas v. Dudas appeal.  The other three rules packages, however, have been (at least for now) tabled by the USPTO.  A significant amount of the credit for forcing the USPTO to postpone (perhaps indefinitely) the implementation of these rules packages must go to David Boundy, the Vice President of Intellectual Property for Cantor Fitzgerald L.P., and Dr. Richard Belzer, a former civil service staff economist in the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB).  Mr. Boundy and Dr. Belzer regularly reminded (and encouraged patent practitioners and applicants to remind) the OMB that the Patent Office was not playing by the rules in trying to secure approval for each of the rules packages.  Whether the Obama Administration picks up the rules packages where the Bush Administration left off remains to be seen (as we have noted before, Obama advisor and Duke University School of Law Professor Arti Rai, co-signed one of only two amicus briefs in support of the USPTO in the Tafas v. Dudas appeal).

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

• "Patent Office Announces Delay for New Appeals Rules," December 10, 2008
• "Patent Office to Publish Notice Delaying New Appeals Rules," December 9, 2008
• "Patent Office Issues Appeals Rules Clarification," November 21, 2008
• "PTO Announces No IDS or Markush Rules During Bush Administration," October 27, 2008
• "More on Ex parte Appeal Rule," October 10, 2008
• "Unhappy with the Ex parte Appeal Rule? Read This Now -- Updated," October 8, 2008
• "Patent Office Posts Comments on New Appeals Rules," September 11, 2008
• "More on USPTO Rulemaking Practices," July 21, 2008
• "USPTO Rulemaking Practices Being Called into Question (Again)," July 20, 2008
• "Docs at BIO: Panel Discusses Impact of USPTO Rules Changes and Patent Reform Legislation on Biotech Patenting," June 23, 2008
• "New Appeals Rules Published," June 10, 2008
• "Patent Office to Publish New Appeals Rules on Tuesday," June 9, 2008
• "USPTO Posts Comments on New Rules for Alternative Claiming," April 23, 2008
• "Cantor Fitzgerald VP Comments on Markush Rules," April 10, 2008
• "You Can't Fight the USPTO -- or Can You?" March 11, 2008
• "Patent Office Publishes Notice Regarding Impact of Proposed Markush Claims Rules on Small Entities," March 10, 2008
• "Federal Register Notice Regarding Markush Claims to Publish on Monday March 10, 2008," March 7, 2008
• "OMB Receives Additional Submission Regarding PTO Rules Packages," February 21, 2008

#1 -- Continuation and Claims Rules Enjoined in GSK/Tafas v. Dudas; USPTO Appeals Injunction

Stories related to the new claims and continuations rules took the #3 (promulgation of new rules), #2 (USPTO clarification of new rules), and #1 (new rules preliminarily enjoined) spots on our 2007 list of top stories.  Not surprisingly, the Tafas case once again takes the top spot on this year's list of top stories.  On April 1st, Judge James C. Cacheris of the District Court for the Eastern District of Virginia granted Dr. Tafas' and GSK's motions for summary judgment and voided the claims and continuation rules as "otherwise not in accordance with law" and "in excess of statutory jurisdiction [and] authority," and thus, in contravention of the Administrative Procedure Act (APA).  The Patent Office responded by appealing the District Court's decision in May, and the Federal Circuit held oral argument on the appeal on December 5th.  In view of the panel's questioning of USPTO General Counsel James Toupin (and the quantity of amicus briefs supporting Dr. Tafas and GSK -- thirteen of the fifteen amicus briefs supported the appellees), one might guess that the Federal Circuit will affirm the District Court's decision.  However, stranger things have happened (and if the CAFC does lift the injunction, the Tafas case will almost certainly take the top spot again next year).  

For information regarding this topic, please see:

• "Federal Circuit Hears Oral Argument on Tafas Appeal," December 8, 2008
• "Law Professors Back USPTO in Tafas v. Dudas Appeal," October 23, 2008
• "PTO Files Reply Brief in Tafas v. Dudas Appeal," October 15, 2008
• "Dr. Tafas Files Brief in New Rules Appeal," September 20, 2008
• "GSK Files Brief in Tafas v. Dudas Appeal," September 25, 2008
• "Tafas v. Dudas Update," September 2, 2008
• "Enjoined Rule Will Not Be Applied Retroactively . . . If PTO Prevails in Tafas v. Dudas," August 7, 2008
• "Public Interest Groups Back USPTO in Tafas v. Dudas Appeal," August 5, 2008
• "USPTO Files Opening Brief in Tafas v. Dudas Appeal," July 22, 2008
• "Save the Date -- Initial Scheduling of the Tafas/GSK v. Dudas Appeal," May 21, 2008
• "USPTO to Appeal Tafas/GSK v. Dudas," May 7, 2008
• "BIO Responds to Events of the Day," April 1, 2008
• "No April Fool's Joke -- Tafas and GSK Win on Summary Judgment," April 1, 2008
• "PLI's John White Discusses Tafas/GSK v. Dudas," February 11, 2008
• "Judge Cacheris Takes GSK Case under Advisement," February 8, 2008
• "GSK Summary Judgment Hearing Set for Friday Morning," February 7, 2008

Acumed LLC v. Stryker Corp. (Fed. Cir. 2008)

    By Kevin E. Noonan --

There are the inklings of a stratagem taking shape in certain of the Federal Circuit's decisions since the spate of Supreme Court rejections of large portions of its jurisprudence.  That stratagem involves refusing to overturn district court decisions based on applying an abuse of discretion standard, as evidenced in the Federal Circuit's decision to affirm grant of a permanent injunction in Acumed LLC v. Stryker Corp.

The case involved a patent to an orthopedic nail used to reconstruct and stabilize a broken humerus.  The CAFC previously vacated a permanent injunction granted prior to the Supreme Court's decision in eBay Inc. v. MercExchange, L.L.C., which mandated that the traditional "four factor" test for granting injunctions was to be applied in patent cases.  This mandate overruled the Federal Circuit's "general rule [in patent cases] that an injunction will issue, once infringement and validity have been adjudged . . . unless there are some exceptional circumstances that justify denying injunctive relief."  Thus, the District Court revisited the issue based on a proper application of the law and arrived at the same conclusion.

In making its determination that a permanent injunction was permissible in this case, the District Court considered together the four-factor test prongs of whether there was irreparable harm to patentee Acumed and whether the remedy at law (money damages) was adequate compensation as a remedy.  Stryker presented evidence that Acumed previously had granted licenses for the patent-in-suit (U.S. Patent No. 5,472,444) to two other competitors, Smith & Nephew and Zimmer.  The District Court distinguished this behavior on the grounds that, first, Acumed had granted the Smith & Nephew license to settle litigation, and second, that Zimmer was not direct competitor when Acumed granted it a license.

The Federal Circuit, in a unanimous opinion written by Judge Lourie and joined by Judges Mayer and Gajarsa, found none of this to be an abuse of discretion.  The Court asserted that eBay itself stated that a patentee's willingness to license patents to others was not sufficient by itself to preclude a determination that a patentee would be irreparably harmed or that money damages would be an insufficient remedy.  The Court asserted that prior licenses were but one factor a court could consider in deciding whether the evidence favored vel non grant of a permanent injunction.  "Adding a new competitor to the market may create an irreparable harm that the prior licenses did not," according to the Court.  In a footnote, the Court noted that it did not consider whether an injunction would be appropriate in other circumstances where a patentee had granted licenses to third parties, thus avoiding creation of any per se rules in this regard.

Regarding the balance of the hardships, the District Court was persuaded by Acumed's evidence that Stryker had available a non-infringing alternative (a straight rather than a curved humeral nail), and that Stryker was the world's largest orthopedic implant company (so sales of its infringing humeral nail were only a small portion of its sales, whereas the Acumed nail was its flagship product).  The District Court rejected Stryker's argument that a permanent injunction would cause harm to itself, its customers and patients, as well as Stryker's argument that Acumed would benefit from receiving a royalty, since it would gain access to Stryker's "otherwise inaccessible" customers.  The Federal Circuit found none of the District Court's reasoning to be error or an abuse of discretion.  Stryker's evidence of the expense incurred in designing and marketing were irrelevant to the hardships determination, according to the CAFC, because "[o]ne who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected," citing Windsurfing Int'l. Inc. v. AMF, Inc., 782 F.2d 995, 1003 n.12 (Fed. Cir. 1986).  The Federal Circuit also found no abuse of discretion in the District Court's determination that Stryker's failure to introduce into the U.S. a straight-nail embodiment of its humeral nail was a business decision that did not tip the balance of hardships in Stryker's favor. 

For the fourth factor, the public interest, the District Court found that this factor did not mitigate against the permanent injunction.  Stryker argued that its infringing humeral nail was "demonstrably safer and superior" to Acumed's product, citing trial testimony from five expert witnesses.  Stryker also contended that Acumed's product had specific deficiencies compared with its infringing product.  The District Court found that Stryker had not established "sufficient objective evidence of any public health issue" that would turn the public interest prong of the four-factor test in its favor.  The lower court also noted that "there was 'considerable dispute at trial' whether Stryker's evidence was the product of biased experts."  Finally, the District Court found that there were non-infringing alternatives to Acumed's product (ironically, the Zimmer and Smith & Nephew licensed products) available to satisfy any portion of the market Acumed was incapable of serving, so that patients would not be harmed by the injunction.  The Federal Circuit credited all these decisions as being within the sound discretion of the trial court, and found none of them to be an abuse of discretion.

Perhaps it is the proper role of an appellate court to defer so assiduously to the decisions made by a district court that rely heavily of factual determinations depending on the demeanor and believability of witnesses, live testimony, and trial advocacy relating thereto.  And perhaps it has been the tendency of the Federal Circuit in many areas, most notably claim construction, to refuse to so defer, or to provide reasoning supporting its lack of deference (such as its Congressionally-mandated role of providing consistency and harmony to patent law) that makes it appear unusual that the Federal Circuit is so compliant with regard to the district court's assessment and balancing of the evidence in granting the injunction.  An inescapable consequence of this compliance, however, is that Federal Circuit also avoids any substantive decision-making in affirming the injunction, based on an abuse of discretion standard it defines as "a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings."  Using this standard makes it less likely that there will be any readily-reviewable basis for the Supreme Court to grant certiorari in a case like this.  Avoiding another opportunity for its jurisprudence to be overruled may be all the justification the CAFC needs to be deferential for a while.

Acumed LLC v. Stryker Corp. (Fed. Cir. 2008)
Panel: Circuit Judges Mayer, Lourie, and Gajarsa
Opinion by Circuit Judge Lourie

Classen Immunotherapies, Inc. v. Biogen Idec (Fed. Cir. 2008)

    By Kevin E. Noonan --

The Federal Circuit engaged in judicial parsimony last week, in affirming the decision below that the asserted claims of U.S. Patent No. 5,723,283 are invalid for failure to encompass statutory subject matter.  The opinion, written by Judge Moore and joined by Judge Newman and District Court Judge Joseph Farnan of the District of Delaware, sitting by designation, reads in its entirety as follows:

In light of our decision in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), we affirm the district court's grant of summary judgment that these claims are invalid under 35 U.S.C. § 101.  Dr. Classen's claims are neither "tied to a particular machine or apparatus" nor do they "transform[] a particular article into a different state or thing."  Bilski, 545 F.3d at 954.  Therefore we affirm.

The opinion is 69 words.  At 89 words, the claim at issue is longer:

A method of determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder in a treatment group of mammals, relative to a control group of mammals, which comprises immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens, according to said immunization schedule, and comparing the incidence, prevalence, frequency or severity of said chronic immune-mediated disorder or the level of a marker of such a disorder, in the treatment group, with that in the control group.

The result is also anomalous because the Classen case was widely viewed as foreshadowing how the Federal Circuit will address the issues raised by Laboratory Corp. v. Metabolite Labs., Inc. (LabCorp), and Justice Breyer's criticism of the scope of that claim under a patentability analysis.

The following is the claim at issue in the Labcorp case:

13.  A method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of:  assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.

There are parallels between the structure of this claim and the Classen claim.  Each recites a preamble directed to identifying a biological phenomenon (a vitamin deficiency in Labcorp, a chronic immune-related disorder related to a acute immunization schedule in Classen), comprising an unambiguous diagnostic/tangible step (assaying a bodily fluid to detect elevated homocysteine levels in Labcorp, immunizing mammals with one or more doses of one or more immunogens, according to an immunization schedule in Classen), followed by an interpreting step (correlating elevated homocysteine with the vitamin deficiency in Labcorp, comparing the incidence, prevalence, frequency or severity of chronic immune-mediated disorders in mammals immunized according to the immunization schedule in Classen).

Now it cannot be the case that all diagnostic claims are per se invalid, suggesting that the claims in both Labcorp and Classen are particularly deficient, in reciting limitations to "correlate" or "compare" results of assays or actions clearly falling within the scope of 35 U.S.C. § 101 as statutory subject matter.  It may be (although it is not clear from the reasoning in Bilski) that the Federal Circuit would consider the claim to be patent-eligible if the comparing or correlating steps were "tied to a particular machine or apparatus" (such as a clinical diagnostic computer); it is clear that such claims would be significantly more narrow and less valuable.

What these claims have in common is that they use the results of a tangible step (assaying or immunizing) to provide the raw material, information, used in the second part of each claim.  This is the relevance of Bilski, and the only apparent rationale for the court's decision in Classen:  what is at issue is whether methods for using, interpreting, or manipulating information, from financial markets or clinical results, can be patented.  The informational component bedevils the analysis, because it removes claims like the claims in Labcorp and Classen from the comfort of typical chemical/pharma claims.

But the Federal Circuit's rote application of Bilski to the Classen claims raises the question of whether diagnostic claims should be patentable.  That the diagnostic methods in Labcorp and Classen are biological/medical methods should not be dispositive, under the Federal Circuit's "technology-neutral" approach to patent law and the Supreme Court's decision in Diamond v. Chakrabarty.  It is thus interesting to speculate on whether the court would come to the same conclusion with regard to claim 1 of U.S. Patent No. 7,464,002:

A diagnosis method for boiler degradation, comprising:  calculating a first thermal transmission rate from a difference in thermal quantity of gas or steam between an entrance and exit of a heat exchanger with respect to at least one heat exchanger constituting the boiler; calculating a second thermal transmission rate based upon a thermal conductivity rate of pipes and thermal conductivity transfer rate of steam and gas of the heat exchanger; comparing the first and second thermal transmission rates; and carrying out diagnosis of the progress of degradation, wherein the diagnosis is displayed on a display device, wherein the boiler is a heat recovery boiler for recovering heat from a gas turbine.

While we are at a far remove from Sadie Carnot and Lord Rumsford, could it not be said that this claim has the very same problems as the Labcorp and Classen claims, provided the relationships between the thermal transmission rates and thermal conductivity are fundamental properties of thermodynamics?  And is this claim, from U.S. Patent No. 7,435,551, patentable under Classen?

A method for diagnosing type II diabetes, which comprises measuring a level of adiponectin (GBP28) having a trimer structure of GBP28 and/or a structure of aggregated GBP28 trimers in its natural state in a sample wherein a level of monomeric GBP28 is not measured, and correlating the level of GBP28 having a trimer structure and/or a structure of aggregated GBP28 trimers to diagnose type II diabetes and wherein a decrease in the level of said GBP28 is indicative of type II diabetes.

The answer to these questions await further developments.  The decision is non-precedential, and so the judicial impact is minimal.  But as of last week, the Court seems to have decided to address patentable subject matter questions using a mechanical application of the Bilski test, pending eventual Supreme Court review.

Classen Immunotherapies, Inc. v. Biogen Idec (Fed. Cir. 2008)
Nonprecedential disposition
Panel: Circuit Judges Newman and Moore and District Judge Farnan
Opinion by Circuit Judge Moore

Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc. (Fed. Cir. 2008)

    By Donald Zuhn --

Last week, the Federal Circuit affirmed a finding of exceptionality and award of $16.8 million in attorneys fees by the District Court for the Southern District of New York in a case involving two Hatch-Waxman challenges to U.S. Patent No. 4,687,777.

The challenges to the '777 patent had been initiated by Defendants-Appellants Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., and UDL Laboratories, Inc. (Mylan) on the one hand, and Defendants-Appellants Alphapharm Pty., Inc. and Genpharm, Inc. (Alphapharm) on the other.  Seeking approval to market a generic version of the antidiabetic agent, 5-{4-[2-(5-ethyl-2-pyridyl)ethoxy]benzyl}-2,4-thiazolidinedione, commonly referred to as pioglitazone, both Mylan and Mylan filed Abbreviated New Drug Applications (ANDAs) with the FDA.

Plaintiffs-Appellees Takeda Chemical Industries, Ltd. and Takeda Pharmaceuticals North America, Inc. (Takeda) market pioglitazone, which is covered by Takeda's '777 patent, under the trademark Actos®.  In response to the ANDAs filed by Mylan and Alphapharm, Takeda filed suit against the Defendants-Appellants, alleging that they had infringed claims 1, 2, and 5 of the '777 patent.

As discussed in a previous Patent Docs post, asserted claim 1 of the '777 patent recites a compound of the formula:

The critical portion of this formula is the ethyl-substituted pyridyl ring (circled), which encompasses four possible compounds in which the ethyl substituent (C2H5) is located at one of four available positions on the pyridyl ring, generating 3-, 4-, 5-, and 6-ethyl compounds.  Asserted claim 2 covers pioglitazone, which is referred to as a 5-ethyl compound because the ethyl substituent is attached to the 5-position of the pyridyl ring:

When Mylan and Alphapharm filed their ANDAs, they made certifications pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV) -- known as Paragraph IV certifications -- that the '777 patent was invalid for obviousness.  At trial, Alphapharm argued that the claimed compounds would have been obvious at the time of their invention in view of a prior art compound known as "compound b," which was disclosed in Takeda's U.S. Patent No. 4,287,200 and in Sohda et al., 1982, Chem. Phar. Bull. 30: 3580.  Compound b possesses a pyridyl ring in which a methyl (CH3) group is attached to the 6-position:

 

Mylan, on the other hand, argued that Takeda had committed inequitable conduct in procuring the '777 patent (Mylan also presented a revised obviousness argument).  The District Court, however, determined that Mylan and Alphapharm had failed to meet their burden of proving invalidity or inequitable conduct by clear and convincing evidence.  In separate appeals, the Federal Circuit affirmed the District Court's judgment of validity and enforceability (see "Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd. (Fed. Cir. 2007)" for a discussion of Alphapharm's appeal).

Contending that Mylan and Alphapharm had lacked a good faith basis to make their Paragraph IV certifications, and had engaged in litigation misconduct, Takeda moved against Mylan and Alphapharm for an award of attorneys fees.  The District Court granted Takeda's motion, awarding Takeda $11.4 million from Mylan and $5.4 million from Alphapharm, with interest.  Explaining its finding of exceptionality and award of attorneys fees, the District Court stated that Alphapharm's certification letter was "so devoid of merit and so completely fail[ed] to establish a prima facie case of invalidity that it must be described as 'baseless.'"  In particular, the Court noted that while Alphapharm focused on compound b at trial, its certification letter had focused on two other compounds and contained scientific errors.  In addition, the Court pointed to Alphapharm's "utter failure" to explain why a skilled artisan would even select compound b as a lead compound.  The Court similarly noted that Mylan's focus also changed at trial, with Mylan revising its certification argument of obviousness and emphasizing a new inequitable conduct claim, an argument the Court found to be unsupported and frivolous (the Court noted that Mylan's certification letter also contained scientific errors).

Despite support from the Generic Pharmaceutical Association, which filed an amicus brief arguing that the failure to reverse the District Court's finding of exceptionality would have a chilling effect on future ANDA patent challenges, the Federal Circuit affirmed the District Court's determination that the case was exceptional and its award of attorneys fees.

With respect to Alphapharm, the Federal Circuit determined that "[g]iven the district court's familiarity with the parties and the issues and its thorough discussion of Alphapharm's certification letter and litigation strategy, we cannot say that the court committed clear error in finding that this was an exceptional case due in part to the misconduct of Alphapharm."

With respect to Mylan, the Federal Circuit determined that:

Mylan's invalidity argument in its certification letter appears even more baseless than Alphapharm's.  Mylan certified that pioglitazone was rendered obvious because Takeda had already disclosed compound 14, which had high efficacy, and simply replaced its benzene ring with a pyridine ring, which it described as a bioisostere, to create pioglitazone.  But Mylan’s Rule 30(b)(6) designee testified that no reason existed to choose compound 14 as the lead compound; Takeda's expert emphatically disagreed with the assertion that benzene and pyridine rings are bioisosteres; and Alphapharm's expert testified that the properties of compound 14 taught nothing with respect to pyridines.

The CAFC also agreed with the District Court regarding the merits of Mylan's inequitable conduct claim, noting that Mylan had failed to present any evidence that Takeda hid or misrepresented any information to the Patent Office.  Thus, the Federal Circuit concluded that:

We do not find persuasive Mylan's argument that the district court took issue with the mere fact that Mylan changed its theory of invalidity and then lost.  Rather, the court determined that Mylan's initial certification letter was completely baseless and that the claims Mylan offered as substitutes were similarly frivolous.  In short, the district court, which was in the best position to evaluate the entire strategy pursued by Mylan, did not commit clear error in finding litigation misconduct.

Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc. (Fed. Cir. 2008)
Panel: Circuit Judges Lourie, Rader, and Bryson
Opinion by Circuit Judge Lourie; opinion concurring in part and concurring in the result in part by Circuit Judge Bryson

Sanofi-Synthelabo v. Apotex, Inc. (Fed. Cir. 2008)

    By Kevin E. Noonan --

Denial of an ANDA validity challenge by generic pharmaceutical company Apotex of Sanofi-Synthelabo's Orange Book-listed patent for Plavix® was affirmed by the Federal Circuit last week.  The decision, by Judge Newman, joined by Judges Lourie and Bryson, was unremarkable and should remain so, unless the Supreme Court were to grant certiorari and work more of its particular brand of mischief on U.S. patent law.

Sanofi-Synthelabo, Sanofi-Synthelabo, Inc., and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership (collectively, Sanofi) brought suit under 35 U.S.C. § 271(e)(4) in response to a Paragraph IV certification submitted to the Food and Drug Administration by Apotex, Inc. and Apotex Corp., alleging that Sanofi's U.S. Patent No. 4,847,265 was invalid for anticipation and obviousness over Sanofi's U.S. Patent No. 4,529,596 and Canadian Patent No. 1,194,875.  The active pharmaceutical agent of Plavix®, clopidogrel bisulfite, is recited in claim 3 of the '265 patent:

3.  Hydrogen sulfate of the dextro-rotatory isomer of methyl alpha-5(4,5,6,7-tetrahydro(3,2-c)thienopyridyl)(2-chlorophenyl)-acetate substantially separated from the levo-rotatory isomer.

At trial, the District Court heard evidence that Sanofi synthesized many hundreds of derivatives of the basic structure of clopidogrel, thienopyridines, and that the first compound approved for use in humans, ticlopidine, was associated with serious side effects.  The unsatisfactory nature of this first thienopyridine drug led to Sanofi producing a second series of compounds, which were the basis for the prior art U.S. and Canadian patents asserted by Apotex as anticipating and/or rendering obvious the claims of the '265 patent.  These patents disclosed 21 specific examples, including a racemic mixture of clopidogrel termed PCR 4099, or by an acronym for its chemical name MATTPCA.  In addition, the evidence indicated that the hydrochloride salt of these compounds was similarly unsuitable for use in humans, due to severe side effects.  Finally, the Court heard testimony from both Sanofi and Apotex that separating enantiomers was both difficult and unpredictable, both in terms of whether the enantiomers could be separated and the properties of each of the enantiomers if they were successfully separated; indeed, the Federal Circuit opinion characterized the way actually used to separate the Plavix® enantiomer from the racemic mixture to be a "lucky combination" of chemical reagents.  For chiral thienopyridines other than PCR 4099 that had been separated into their component enantiomers, there was no evidence of any advantage over the original racemic mixture:  although one enantiomer was more biologically active, it was also more neurotoxic, a common side effect of these drugs.

Evidence heard by the District Court established that the Plavix® enantiomer displayed absolute stereoselectivity, i.e., all of the desired biological activity was found in the Plavix® enantiomer, while all of the neurotoxic side effects were found in its enantiomeric twin.  The Court characterized this distribution of properties to be rare, unexpected, and unpredictable.

In considering Apotex's anticipation defense, the District Court parsed claim 3 of the '265 patent into the following 4 elements:  1) the bisulfate salt; of 2) the "d" enantiomer; of the compound 3) methyl alpha-5-(4,5,6,7-tetrahydro(3,2-c)thienopyridyl)-(2-chlorophenyl) acetate (MATTPCA); that was 4) "substantially" separated from the "l" enantiomer.  Apotex argued that Sanofi's prior patents disclosed not only the racemic mixture, but that the separated enantiomers were encompassed by the invention.  Apotex argued that disclosure of the racemate, plus the knowledge of the skilled worker of methods for separating enantiomers, anticipated claim 3 of the '265 patent.

The District Court, and the Federal Circuit, disagreed, on the grounds that an anticipating reference must be enabling.  Moreover, according to Judge Newman's opinion, an anticipating reference requires "the specific description as well as enablement of the subject matter at issue," and that the art must disclose the elements "arranged as in the claim," citing the Federal Circuit's recent decision in Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1369 (Fed. Cir. 2008).  As stated in In re Arkley, 455 F.2d 586, 587 (C.C.P.A. 1972), cited in Net MoneyIN:

[The] reference must clearly and unequivocally disclose the claimed [invention] or direct those skilled in the art to the [invention] without any need for picking, choosing, and combining various disclosures not directly related to each other by the teachings of the cited reference.

Apotex cited In re Petering, 301 F.2d 676 (C.C.P.A. 1962), and In re Schaumann, 572 F.2d 312 (C.C.P.A. 1978) in support of its argument, but the Federal Circuit found that these cases required an enabling reference disclosing a genus to disclose "specific preferences" not disclosed by the art cited here.  Judge Newman asserted to the contrary In re May, 574 F.2d 1082, 1090 (C.C.P.A. 1978), which is explicit (according to the CAFC) that "the novelty of an optical isomer is not negated by the prior art disclosure of its racemate."

The Federal Circuit expressly held that knowledge that enantiomers may be separated is not anticipation of a specific enantiomer that has not been separated, identified, and characterized in the cited prior art.  The Federal Circuit agreed with the District Court that separation of these enantiomers was not enabled because such separation would constitute undue experimentation.  Judge Newman cited Forest Laboratories, Inc. v. Ivax Pharmaceuticals, Inc., 501 F.3d 1263, 1268-69 (Fed. Cir. 2007), that "this court recognized the known difficulty of separating enantiomers and the unpredictability of their properties, and held that a reference that stated that a compound has enantiomers did not enable the separation of those enantiomers, where the reference did not teach how to obtain the enantiomer."  The Federal Circuit rejected Apotex's argument that the cited '596 patent should be presumed to be enabled, under the Court's Amgen Inc. v. Hoechst Marion Roussel, Inc. decision, stating that the presumption could, and here was, overcome by the particular facts and circumstances of this case.

Turning to Apotex's obviousness defense, Judge Newman assessed how the District Court applied the Graham v. John Deere Co. factors in view of the Supreme Court's recent decision in KSR Int'l Co. v. Teleflex Inc.  Initially, the opinion defined the basis for doing this analysis for a chemical compound on the principle that a chemical compound and its properties are inseparable when assessing obviousness, citing In re Sullivan and In re Papesch.  The District Court had assumed that Apotex had made out a prima facie case of obviousness, but found that "the unpredictable and unusual properties of the dextrorotatory enantiomer and the therapeutic advantages thereby provided, weighed in favor of nonobviousness, and that Apotex had not met its burden of establishing otherwise."  The bases for this determination were, inter alia, the absolute stereospecificity of the Plavix®  enantiomer, which experts for both Sanofi and Apotex testified were both unpredictable and rare, and that it was even more rare that all of the biological activity would be in one enantiomer and all the neurotoxicity would be in the other.

Apotex's argument was substantially that the recognition in the art that enantiomers exist, and known methods for isolating them, were sufficient to overcome Sanofi's argument of unexpected results of the claimed enantiomer.  In this regard, the argument echoes the Patent Office position in Ex parte Kubin (as well as In re Deuel) that the obviousness of a method for isolating a nucleic acid sequence can make the nucleic acid itself obvious.  Here, the Federal Circuit rejected this argument:

Apotex argues that the district court applied an incorrect inquiry, and that the correct inquiry is not whether the results obtained with the separated enantiomer were unexpected, but whether it would have been obvious to separate and test the enantiomers, based on the general knowledge that enantiomers can exhibit different properties.

A more intriguing argument by Apotex was that recognition in the art that enantiomers existed provided sufficient motivation to separate them, using known methods, and that routine methods could be used to identify the properties of the separated enantiomers.  In this calculus, the very properties relied upon by Sanofi and the Court to establish that the Plavix® enantiomer is non-obvious can be considered inherent, albeit unrecognized, properties that (under Papesch) are inseparable from their chemical structure (which was recognized in the art).  Especially considering that obviousness references do not have the same enablement requirements as anticipatory references do, there is some (but here insufficient) force to this argument.

For both the District Court and the Federal Circuit, testimony from Sanofi's expert that enantiomeric separation was difficult and unpredictable was persuasive.  The District Court described the separation as a "paradigm of trial and error," and found that:

neither the chemists at Sanofi nor a person of ordinary skill in the art could have reasonably expected that the separate enantiomers of PCR 4099 could be obtained at the time that Sanofi was contemplating whether to investigate them and, if obtained, they could not have predicted by what method and configuration.

Judge Newman's opinion expressly contrasted the Forest Labs case and Aventis Pharma Deutschland GmbH v. Lupin, Ltd., 499 F.3d 1293 (Fed. Cir. 2007), noting that in Forest Labs "the (+) enantiomer of citalopram would not have been obvious in light of the known racemate, when it was shown that the therapeutic properties of the (+) enantiomer were unexpected."  In the Lupin case, on the other hand, "this court held that the ramipril isomer's potency was 'precisely what one would expect, as compared to a mixture containing other, inert or near-inert stereoisomers.'"  Although Apotex argued that the CAFC should come to the same decision it came to in the Lupin case, Judge Newman opined that "the evidence was directly contrary to that position.  The district court entered extensive findings in this case on the unexpected and unpredictable properties of clopidogrel, and there was no contrary evidence suggesting, based on the prior art, that the stereoselective properties were 'precisely what one would expect,'" as required for the Lupin case to be controlling.

In addition to the issue of the non-obviousness of the Plavix® enantiomer per se, the Federal Circuit also addressed the non-obviousness of the bisulfite salt as recited in claim 3 of the '265 patent.  The Court noted that the cited U.S. and Canadian prior art patents disclosed the HCl salt, and that there were 80 possible alternative candidate candidates, with 53 of these being FDA approved.  The Court noted that it was unpredictable whether a particular salt with a particular drug would form a "pharmaceutically-suitable crystalline salt."  Moreover:

The district court distinguished the facts of this case from those of Pfizer v. Apotex (480 F.3d 1348), where there was evidence that based on the prior art a person of ordinary skill would have narrowed the possible salts to only a few including the claimed besylate, whereas here Sanofi presented evidence that the prior art taught away from the use of sulfuric acid with an enantiomer, for strong acids could encourage re-racemization.

The Federal Circuit's decision in this case is both unremarkable and entirely consistent with its own and Supreme Court precedent.  Particularly with regard to chemical obviousness of separated enantiomers in view of the KSR decision, here the Federal Circuit has consistently relied on evidence of unexpected results of the separated enantiomer coupled with difficulties in achieving enantiomeric separation.  The Federal Circuit has avoided per se rules or mechanical or rigid application of any rubrics other than the Graham factors, based on a case-by-case determination of the facts disclosed in the prior art and underlying the claimed invention.

Nevertheless, Plavix® is a "blockbuster" drug, garnering $3 billion in revenue in 2007, and moreover is an example of a pharmaceutical company obtaining a "later-filed" patent to increase patent protection specifically directed to its commercial product.  These factors increase the political pressures surrounding this case, from a diverse cross-section of the public that opposes "high" drug prices and "lengthened" terms of patent protection for human drugs.  Plavix® has already been the target of efforts in countries like Thailand to exercise national preogatives granted under the Doha Declaration to void drug patent rights (see "EU trade Commissioner Sends Warning Letter to Thailand").  The next and final step for Apotex to challenge Sanofi's patent protection for Plavix® would be for the Supreme Court to grant certiorari.  If the legal issues were paramount, this might be considered unlikely.  But in view of the serious political pressures around this patent and this drug, and the Supreme Court's recent sensitivity to political considerations in patent law, there is a real possibility that the Supreme Court will decide to review this Federal Circuit decision.

Sanofi-Synthelabo v. Apotex, Inc. (Fed. Cir. 2008)
Panel:  Circuit Judges Newman, Lourie, and Bryson
Opinion by Circuit Judge Newman