In re Kao, ___ F.3d ___ (Fed. Cir. 2011)
In an important decision for patent prosecutors, the Court of Appeals for the Federal Circuit has partially overturned a PTO obviousness decision. The question on appeal for all three related patent applications was whether the Board of Patent Appeals & Interferences (BPAI) had properly held the pending claims obvious.
Background: Endo Pharmaceuticals has three pending patent applications that were all rejected on obviousness grounds and those rejections were affirmed by the BPAI. The applications relate to controlled-release oxymorphone tablets and were all found obvious as compared to Patent Cooperation Treaty (PCT) Pub. No. WO 01/08661 (“Maloney”).
Obviousness: The Section 103(a) of the patent act states that a claimed invention is unpatentable “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art.” In Graham v. John Deere, the Supreme Court outlined a set of factual inquiries that should serve as the basis for the ultimate legal question of obviousness. When a BPAI decision is appealed directly to the Federal Circuit, the appellate court affirms factual findings so long as they are supported by “substantial evidence,” but reviews ultimate obviousness conclusion de novo. Theh substantial evidence requirement offers substantial deference to the BPAI and will be accepted so long “as a reasonable mind might accept [the evidence as] adequate to support [the] conclusion [being drawn].” Quoting In re Kumar, 418 F.3d 1361 (Fed. Cir. 2005).
BPAI Factual Findings Lack Substantial Evidence for the ’432 application: The parties all recognized that controlled-release oxycodone was within the Maloney prior art. The Board made the further factual conclusion that the claimed invention, including a claimed dissolution rate, would be realized by taking a chemical formula provided by Maloney and replacing the known oxycodone with the claimed oxymorphone. On appeal, the Federal Circuit held that this factual finding was not supported by substantial evidence.
Accepting that it would be obvious to substitute oxymorphone in Maloney’s Formula 6, the Board’s reasoning nonetheless does not pass the substantial evidence threshold as to whether such a substitution would indeed fall within the dissolution profile of pending claim 1.
The problem was that the dissolution rate reported in Maloney was measured in a different way than that claimed by Endo, and the USPTO provided no “direct factual support in the record for the view that the claimed range of dissolution rates actually over-laps with the dissolution rate disclosed in Maloney.” In this case, testimony before the board (from Endo’s expert) was that “there is no general correlation” between the two measurement methods. The expert also “cited prior art literature that supported this conclusion.” On remand, the claim may still be held obvious, but the USPTO will need to do a better job linking the prior art to the patent as claimed. However, the Federal Circuit was clear that: “the Board should neither rely upon conclusory reasoning nor its own conjecture in assessing the weight of evidence.”
Secondary Considerations Nexus: The court also held that, when presented, the BPAI must consider secondary considerations of nonobviousness. The doctrine requires a nexus between the claim scope and the secondary consideration. The nexus requirement has seemingly been more and more strictly applied over the years. In the recent Tokai decision, the court held that “if commercial success is due to an element in the prior art, no nexus exists.” In this case, the court wrote “Where the offered secondary consideration actually results from something other than what is both claimed and novel in the claim, there is no nexus to the merits of the claimed invention.” (emphasis added) (I would inquire what the court means by “novel in the claim.”)
The nexus requirement is a two-way requirement in the secondary consideration will be rejected if either (1) overbroad so as to be a result of prior art aspects of the claim or (2) overly narrow so that only small number of potential embodiments exhibit the asserted secondary benefits. However, the court here (and elsewhere) have held that the applicant need not provide hard evidence that every embodiment covered by the claim has that nexus.
[A]n applicant ‘need not sell every conceivable embodiment of the claims in order to rely upon evidence of commercial success, so long as what was sold was within the scope of the claims.’
Quoting In re DBC, 545 F.3d 1373 (Fed. Cir. 2008).
Obviousness and its Interplay with Patentable Subject Matter of Section 101: Endo’s ’740 application claimed a method of treatment that included the step of “providing information” about a correlation between renal failure and bioavailablity of oxymorphone. Citing King Pharma, the Federal Circuit held that, even if novel, the informing step “cannot confer patentability absent a functional relationship between the informing and administering steps.” Here, the court distinguished from “transformative” and therefore patentable information delivery – such as a method of adjusting dosage based upon the informing step.
Waiving Rights to Appeal Particular Claim Issue: In its BPAI brief, Endo had grouped together all twenty claims of one of the pending applications under representative claim 1. On appeal, the Federal Circuit held that Endo had therefore waived its right to separately argue any of the other claims.