By Jason Rantanen
The past two weeks have seen a substantial number of nonobviousness opinions emerge from the Federal Circuit. These decisions are particularly interesting because they contain pairs of opinions with opposite outcomes. Judge Lourie, the second longest-tenured active judge on the court, wrote two of them while Judge Chen, the second-newest member of the court, wrote a third and a dissent in the fourth. Each found (or would have found) the patents in question to be obvious in one opinion and nonobvious in the other. For those interested in the jurisprudential views of Judge Chen, especially, the pairing may provide some useful insights.
Allergan, Inc. v. Apotex Inc. (Fed. Cir. 2014) Download Allergan v. Apotex
Panel: Prost (author), Reyna, and Chen (dissenting in part)
Allergan and Duke University hold a pair of patents relating to an ophthalmic solution used as a treatment for eyebrow hair loss. Allergan sells LATISSE a 0.03% bimatoprost ophthalmic solution as a topical treatment for eyebrow hair loss. After Apotex and other manufacturers submitted Abbreviated New Drug Applications to the FDA seeking to market generic versions of LATISSE, Allergan and Duke sued for infringement. Following a bench trial, the district court rejected the generic manufacturers’ invalidity arguments, found infringement, and entered an injunction. The manufacturers appealed.
On appeal, the Federal Circuit addressed claim construction, anticipation and obviousness, affirming the district court’s contested claim construction of “treating hair loss” and its determination that the patents were not anticipated, but reversing the finding of nonobviousness. I could write a lengthy post on the majority opinion alone, but this passage particularly caught my eye since it relates specifically to the issue of what subjects the Federal Circuit considers to be issues of law versus fact in the nonobviousness inquiry:
In sum, even if the district court did not commit clear error in its findings of fact, failure to consider the appropriate scope of the ’029 patent’s claimed invention in evaluating the reasonable expectation of success and secondary considerations constitutes a legal error that we review without deference.
Slip Op. at 23 (emphasis added). The substantial breadth of the asserted claims of the ’029 patent was particularly troubling to the majority, both in assessing the Graham factors and the nexus for secondary considerations.
Writing in dissent, Judge Chen would have found the ’029 patent to be nonobvious. In reaching this conclusion, he placed much more weight on the determination of the examiner during prosecution:
To begin with, issued patents enjoy a presumption of validity, which can only be rebutted by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2245–46 (2011). A party challenging a patent’s validity must do so with “evidence which produces in the mind of the trier of fact an abiding conviction that the truth of [the] factual contentions are highly probable.” Buildex Inc. v. Kason Indus., Inc., 849 F.2d 1461, 1463 (Fed. Cir. 1988) (citing Colorado v. New Mexico, 467 U.S. 310, 316 (1984)). This is not a burden that is easily satisfied.
Dissent at 2. Particularly persuasive to Judge Chen was the fact that examiner considered the key reference during examination and allowed the claims over it following an amendment by the patentee:
In light of the particularly heavy burden to show obviousness over a reference disclosed during prosecution and discussed by the examiner, Appellants have
not shown that Johnstone now somehow teaches or suggests the very structural feature that the patentee claimed to distinguish the Johnstone compounds.
Id. at 4. On his part, Judge Chen found the disclosure Johnstone reference to be meaninglessly broad and generic:
This is not a situation in which there are a finite number of identified, predictable solutions. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007). Rather, the
single sentence in Johnstone actually proposes hundreds of thousands, or even millions, of variations on the alpha chain.  The compound in Johnstone
could have a saturated bond at any position on the alpha chain, an unsaturated bond at any position, a triple bond at any position, or even a combination of any of these bonds. As a result, a person of ordinary skill in the art was not faced with a “small or easily traversed” number of options based on Johnstone.  In this instance, covering everything effectively tells us nothing.
Id. at 5-6 (internal citations omitted).
Bristol-Myers Squibb Company v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2014) Download BMS v Teva
Panel: Prost, Plager, Chen (author)
Bristol-Myers Squibb (BMS) owns Patent No. 5,206,244, which relates to certain antiviral compounds. At issue was claim 8, which covers entecavir, a treatment for hepatitis B that BMS markets under the name BARACLUDE. Teva submitted an ANDA seeking to market a generic version of entecavir; BMS sued for infringement. After trial, the district court held claim 8 to be obvious based on the selection of 2′CDG as a lead compound from the prior and a finding that a skilled artisan would have been motivated to make the necessary modification with a reasonable expectation of success at creating a compound with beneficial antiviral properties. BMS appealed.
Unlike the Allergan case, the analytic framework presented by the parties for the question of obviousness was the lead-compound approach. BMS contended that the district court had erred in selecting 2′-CDG as a lead compound, a particular legal framework that is frequently used in chemical compound cases. The Federal Circuit disagreed, agreeing with the district judge’s conclusion that “those of ordinary skill in the art would have selected 2′-CDG, a carbocyclic analog, as a lead compound for
further development efforts before BMS applied for the 244 patent in October 1990.” Slip Op. at 10-11. The appellate court also rejected BMS’s argument on motivation to modify the lead compound to make the patented compound, pointing to detailed evidence and testimony on why the modification would have been obvious.
Nor was the presence of unexpected results sufficient to establish nonobviousness on their own.
Contrary to BMS’s argument, unexpected results do not per se defeat, or prevent, the finding that a modification to a lead compound will yield expected, beneficial
properties. Rather, as secondary considerations of nonobviousness, they come into play in determining “the ultimate question of patentability.”
Secondary considerations of nonobviousness “must always when present be considered,” and can serve as an important check against hindsight bias. See Cyclobenzaprine, 676 F.3d at 1075-76, 1079 (quoting Stratoflex, Inc. v. Aeroquip Corp, 713 F.2d 1530, 1538-39 (Fed. Cir. 1983)). While secondary considerations must be taken into account, they do not necessarily control the obviousness
Slip Op. at 15-16. Here, the district court did not commit error in its factual findings that the unexpected properties did not compel a finding of nonobviousness, and the two legal errors that it committed (“(1) comparing entecavir to another hepatitis B drug on the market instead of the closest prior art, 2′-CDG; and (2) inappropriately look[ing] to what the inventor knew at the time of the invention—instead of one of ordinary skill in the art—to determine what was expected.” Slip Op. at 18) were harmless.
First Impressions: My reading of Judge Chen’s majority opinion is that it reflects a careful, thorough review of the district court’s opinion (which itself is helpfully quite detailed and Magistrate Judge Burke should be commended for his own thoughtful analysis). Conclusions are supported by detailed discussions and even if one disagrees with the overall conclusion of obviousness here, that disagreement seems less likely due to the carefulness of his approach and more likely due to some of the core difficulties inherent in pharmaceutical innovation such as the challenge of ascertaining marketable in vivo efficacy and the high value our society places on large-scale data-driven safety and efficacy determinations, determinations that can be quite costly yet have little if any direct role in substantive patent law questions.
Another possible reading of these two opinions is that they reflect a fair amount of deference to the decision making of others more familiar withe the specific facts. In Allergan, in addition expressly referencing the examiner’s decision to allow the patent, Judge Chen’s view would also have affirmed the district court’s ruling of nonobviousness. And in BMS, Judge Chen drew heavily on the district court’s findings. (That said, one reason why these opinions aren’t in as much tension as they might be is because the district court’s analysis of obviousness in Allergan was at least an order of magnitude thinner than that of the judge in BMS). At this point, this is merely an observation, and we’ll have to wait for future opinions from Judge Chen.