Impact of KSR v. Teleflex on Pharmaceutical Industry

Patent, , ,

For the past 30 years, Cal has been a litigation analyst serving the investment community. He is member of the New York Bar and a graduate of Northwestern law School. www.litigationnotes.com.

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By Cal Crary:

We do not believe that too much guessing is needed to see what the new patent environment will be like, since we already have the benefit of Chief Judge Michel’s March 23, 2007 decision in the Norvasc case, in which he identified the likely changes in the court’s obviousness jurisprudence. . . . A few of the principles reflected in Judge Michel’s opinion are as follows:

  1. routine testing to optimize a single parameter, rather than numerous parameters, is obvious;
  2. an approach that is obvious to try is also obvious where normal trial and error procedures will lead to the result;
  3. unexpected results cannot overcome an obviousness challenge unless the patentee proves what results would have been expected;
  4. a reasonable expectation of success does not have to be a predictable certainty but rather it can be an expectation that can be satisfied by routine experimentation; and
  5. motivation can be found in common knowledge, the prior art as a whole or the nature of the problem itself.

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[T]here are certain types of patents in the pharmaceutical industry that will have to be looked at, or looked at again, in light of the Supreme Court’s opinion. We happen to believe that enantiomer patents are especially vulnerable, at least in cases in which the technology to separate them was available in the public domain at the time the separation was made. However, we do not believe that the courts will permit a massive extermination of drug industry patents or that a meat-axe approach to them will be used. Rather, we think the Supreme Court’s only demand is that common sense be injected into the determination of what a person of ordinary creative skill in the art would do. The primary examples of enantiomer patents that we regard as vulnerable include Forest Labs’ Lexapro, Bristol-Myers’ Plavix, AstraZeneca’s Nexium and Johnson & Johnson’s Levaquin. We think that all four of these drugs are especially vulnerable now, in light of the new, broader scope of obviousness. In the case of Levaquin, Mylan Labs lost at the district court level in a case that it should have won, even under the law as it existed at the time, and then it was affirmed by Judge Pauline Newman, a pro-industry Federal Circuit judge, in a non-precedential decision without opinion. In a new case, if obviousness is in the mix and if Judge Newman is avoided on appeal, then Levaquin will be a generic drug.

Forest Labs’ Lexapro: Forest won this case before Judge Joseph Farnan, a strongly pro-patentee judge in the U.S. District Court in Delaware, and is scheduled to defend the decision in the Federal Circuit on May 9, 2007. Since the lower court gave no meaningful analysis of the obviousness issues, we think that a reversal in light of KSR would be reasonable to expect so as to give the lower court a chance to consider these issues again. We plan a report on the case later this month.

Bristol-Myers’ Plavix: The district court trial is over, post-trial briefs have been submitted and the case is under submission to the district court judge, who will probably be influenced by the Norvasc decision, in which obviousness invalidated the patent where there were a relatively small number of options to try. AstraZeneca’s Nexium: This slow-moving case in New Jersey is in the pre-trial phase, but is subject to the fundamental problem that separation of the enantiomers of omeprazole is likely to be considered obvious.

Procter & Gamble’s Actonel: Trial of this case was completed before Judge Farnan in Delaware last November, and the post-trial briefs were submitted in January of this year. Teva’s fundamental argument is premised on obviousness, and therefore it would have had little chance of winning prior to the KSR and Norvasc decisions. That said, we think that Judge Farnan is unlikely to change his pro-patentee bias, but a Teva win could come out of the Court of Appeals.