CAFC: Proving Utility Is Not Inventive

PharmaStem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)

PharmaStem sued six defendants for infringement of its broadly written patents covering cryopreserved umbilical cord stem cells useful for hematopoietic reconstitution. The defendants offer cryopreservation of umbilical cord blood to serve the donor later in life. A jury found infringement and validity, but the district court set aside the verdict — holding that the patents were not infringed.

Defendant’s Ads Not Specific Enough: The defendants advertised that their product would aid in hematopoietic reconstitution. However, the district court found (and the CAFC agreed) that the ads were insufficient to serve as an admission that the stem cells were “in an amount sufficient to effect hematopoietic reconstitution of a human adult” as required by the claims. This decision stands to reinforce the principle that a patentee must prove infringement of every limitation of every element of any asserted claim.

Infringe the Whole Claim: PharmaStem’s method claims include collecting, preserving, and using the stem cells .  The defendants, however, are only responsible for collecting and preserving the cells. Transplant physicians do the rest.

PharmaStem argued contributory infringement under 271(c) — alleging that the defendants sold or offered to sell a component of a patented method especially adapted for infringement. Of course, the defendants do not sell stem cell blood — rather they are “merely bailees”. Because 271(c) requires sale of a product, there is no infringement here.

Invention is Obvious: When asserting obviousness based on a combination of prior art references, the patent challenger must show that a PHOSITA “[1] would have had reason to attempt to … carry out the claimed process, and [2] would have had a reasonable expectation of success in doing so.”

Reason to attempt:

In view of the prior art references, the first part of that test is plainly satisfied here. The idea of using cryopreserved cord blood to effect hematopoietic reconstitution was not new at the time [of filing]. Two of the prior art references…suggest using cord blood for that purpose. Two others…suggest cryopreservation and storage of the cord blood until needed. Accordingly, this is not a case in which there is any serious question whether there was a suggestion or motivation to devise the patented composition or process.

Expectation of Success: The inventors appear to have conclusively proven that umbilical cord blood is capable of hematopoietic reconstitution.  Unfortunately for them, completing a proof is not necessarily inventive. Rather, prior scientists strong suspicion of the capability creates an expectation of success so strong that “no reasonable jury” could find the patent valid.

While the inventors may have proved conclusively what was strongly suspected before—that umbilical cord blood is capable of hematopoietic reconstitution—and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature. Instead, the inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention.

Holding: Patent is invalid and not infringed.

[More to come on this case]

20 thoughts on “CAFC: Proving Utility Is Not Inventive

  1. Doh Malcolm.
    That should be the epitome of obviousness.
    If you read it, “someone” did say it.
    Me.

    If you want to wrap your brain deeply around this idea, take a look for example at my blog post here:
    link to patentu.blogspot.com
    and imagine you are the one who may potentially die if you guess wrong on the 50-50 probability. “Obvious to try” is no longer merely a game when there are substantial costs attached to guessing wrong.

  2. “Saying that something has a 51% chance of succeeding is pure BS in this area.”

    Did someone say that?

  3. Sub silentio,

    I hear you. I suspect you are EE or ME in your former life. I too was an engineer in a former life. At least in the EE arts we have Maxwell’s laws. Circuit behavior is predicatable and can be simulated on a computer. Not true in some of the biological arts. In some of them there is no analog to Maxwells’ laws and the only way to determine whether something succeeds is by actual experimentation, actual “discovery”. Saying that something has a 51% chance of succeeding is pure BS in this area. It’s like being 51% pregnant versus 49% pregnant. Either the experiment succeeds or it doesn’t. Either you’re pregnant or you’re not. This notion about likelihood of success is gibberish in the unpredictable arts. I don’t think Newman’s colleagues get that. Not all arts are the same. Peace.

  4. @stepback: I’m not going to engage your ad hominem attacks and expansive rhetoric (by the way, I’m a former engineer, not an English major). As for the actual reasoning of the panel majority, you attack it as ignoring the burden of proof. First, “predictability” of the art in some abstract sense is not an element of obviousness. The requirement is a reasonable expectation of success in the suggested method. Second, the challenger put on evidence that any problems with the steps of the suggested method had been adumbrated in the prior art, and PharmaStem did not put in evidence or argument to contradict this point. I haven’t seen from you why you believe that conclusion is wrong or why you believe that conclusion is irrelevant (may the judges just ignore the record evidence and rely on the say-so of esteemed jurists with a technical background?).

  5. Sub silentio,

    You are blastingly silent about the fundamental flaw in the majority’s analysis. The “burden of proof” is not on the patent owner to prove the nonobviousness of his already-examined, already-issued patent. Rather it is the challenger (Defendant) who must bring clear and convincing evidence of obviousness to the jury. The defendant did not demonstrate predictability in this case. It is not part of the record evidence presented to the jury. It is something the majority surreptitiously fabricated out of thin air. That is what Newman was trying to point out to her esteemed colleagues in her dissent. Basically: Wait a minute fellas, this case has been before many a technically astute examiners and each of them found this to be part of the unpredictable arts. Now you English majors walk in here, sweep all the science off the table and down under the rug and make up your own laws of science. What’s next? A law that says that everything that will eventually be “discovered” or invented anyway is per se obvious?

  6. @stepback: I’m glad to see you stepping back from your previous assertions and now focusing on the reasonable expectation of success of certain steps of the suggested method.

    The problem with your and Judge Newman’s argument about unpredictible cryopreservation is that PharmaStem didn’t make it. The majority opinion gives that exact flaw in its opinion. Again, if the majority was wrong, Judge Newman could have easily cited the part of PharmaStem’s briefing where it made the argument, but she didn’t. I just looked over PharmaStem’s brief on appeal on Westlaw, and PharmaStem relies there on Dr. Bernstein’s testimony, not evidence of cryopreservation uncertainty.

    I’m not sure why PharmaStem didn’t argue uncertainty about successful cryopreservation, but one possible reason is that it didn’t have any evidence on the point, or that it didn’t put any such evidence into the record. Regardless, the point is that Judge Newman’s opinion (once again) doesn’t pay attention to the points the panel majority makes, nor does it attempt to explain the majority’s error with citations to the record. (For another example, see the end of the Festo thread.)

    Also, it is well for her to cite an examiner’s statement as evidence to support the argument she invents for PharmaStem, but for obvious reasons (lack of cross-examination, etc.), that can’t be record evidence for the jury to rely on.

  7. Mooney,
    I’m glad that it took just a few “inconvenient facts” to rattle your nerves.

    Here is another inconvenient fact: Nowhere in the PharmaStem opinion is there a showing that this technology falls into the “predicatble” part of the biotech arts.

    On the other side of the coin, there is a showing (aka substantial evidence) in Newman’s dissent that this technology falls into the “unpredicatble” part of the biotech arts.

    Newman writes:
    “The examiner discussed the state of the science, the content of the prior art, the known sensitivity of fetal liver and thymus stem cells to freezing, and the unpredictability of this field, and concluded:
    This disclosure combined with the acknowledged sensitivity of hematopoietic stem cells from fetal liver and thymus to cryopreservation and the fact that DMSO is toxic to fetal liver progenitor cells at concentrations nontoxic to bone marrow cells provides an unpredictability in the art of cryopreservation of stem cells from different sources that renders the suggestions of the prior art references as to the therapeutic uses of umbilical cord blood (whether cryopreserved or not) as a course of hematopoietic stem cells a situation of “obvious to try,” which fails to provide a prima facie finding of obviousness . . . .
    Id. at 4.”

  8. stepback

    “This was the first time that the facts, rather than mere speculation, were un-covered (a.k.a. dis-covered).”

    I’ll just riff on s.s.s.’s excellent comment.

    The criticality of this “first time” business hinges on pushing the allegedly “unpredictable” nature of the “field” of biotechnology to its limits. In its simplest form, the argument goes like this, “Biotechnology is an unpredictable art, so there is no way that one could have predicted the result before the inventors actually achieved it. Wishing for something and expecting it are two different things.”

    At one point in time, that strategy was successful (indeed: the patents asserted in this case were granted, I’m sure, based on such arguments). Those times are gone, my friends. Kiss them goodbye. Forever. The door started closing years ago and now it’s open just a crack. Many of us saw it coming. For some of us, it was a time to warn clients: you may not be able to get a very broad claim out of this, do you really want to file? For others, it was a time to urge clients: file now!!! (so they have some cases to push around before the clients figure out that these applications are going nowhere).

    Anyway, back to stepback’s analysis in quotes above: if you really subscribe to that argument, then every non-anticipated biotechnological invention is also non-obvious. We know that is not the case.

  9. @step back:

    Thank you for your comments. I think I understand your point, and what I am saying is that “routine” in the sense you use it is irrelevant. What is relevant is that the record evidence had no indication to contradict the challenger’s evidence that it was straightforward to do the steps of the suggested method. That is what the majority means by saying “routine,” as I think the opinion makes clear.

    Take this example: Suppose you have two prior art references. The first says, “To make a great baby food do the following: cut up one banana, cut up one peach, and blend them in a blender for five seconds.” The second says, “If you want to store baby food for later use, put it in an ice tray, store the tray in a freezer, and then thaw the frozen baby food at room temperature before serving.” Let’s also assume that the nature of a problem (making and storing a great baby food) would motivate one to combine those two references.

    If nobody had ever actually made the banana/peach blended baby food and then frozen and thawed it in an ice tray, I take it you would say that the procedure was not “routine” because it had never been performed before. Maybe you’re right under a dictionary definition. But that’s not the point. The point is that the steps of the procedure are “routine” in the sense that people know how to do them and that there is little reason to doubt that one can perform the steps sequentially as part of one process. That’s what the majority means by “routine” here.

    That example closely mimics this case. The prior art suggested restoring the hematopoetic system with stem cells through extracting cord blood, cryopreserving it, thawing it, and then inserting the blood into a patient. The prior art suggested that this would work well because stem cells are present in high concentration in cord blood (see the spec, and also the prior art). And there was no evidence contradicting the proof that the steps of this method are “routine,” i.e., that there was nothing inventive required to carry out the steps. People had extracted cord blood successfully before. People had cryopreseved blood successfully before. And people had reinserted blood successfully before.

  10. Just for the record, Pharmastem never requested a re-examination of any of its 5 patents. By the way, the re-examination certificate of one of the patents in suit, the ‘681, issued on June 27, 2007
    Nicholas Didier
    PharmaStem Therapeutics

  11. sub silentio writes:
    “It seems to me like this was a close case given the standards of review but that the majority got it right.”

    My gripe with the majority in PharmaStem has nothing to do with whether the majority got it right as to noninfringement. However, the majority went out of their way to de novo find the patents to be “obvious” based on the following logic:

    “[T]he question before us is whether a reasonable jury could nonetheless have found the invention nonobvious. We conclude a reasonable jury could not have done so.
    While the inventors may have proved conclusively what was strongly suspected before—that umbilical cord blood is capable of hematopoietic reconstitution—and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature.
    ***Instead, the inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention.***
    See KSR, 127 S. Ct. at 1732 (“Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress . . . .”); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1367–69 (Fed. Cir. 2007) (simply because the formation and properties of a new compound must be verified through testing does not mean that the compound satisfies the test for patentability “since the expectation of success need only be reasonable, not absolute”); In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (“Obviousness does not require absolute predictability.”). Good science and useful contributions do not necessarily result in patentability.” [emphasis added]

    What I’m saying is that, logically, the experiments could not have been “routine” because there is no showing that they were regularly performed beforehand. Instead the evidence appears to suggest that this was the first time these experiments were performed. This was the first time that the facts, rather than mere speculation, were un-covered (a.k.a. dis-covered).

  12. Can somebody explain to this non-US person why in the US a patentees’s characterizations of the prior art are regarded as conclusive and uncontravertible?

    In other common-law jusrisdictions, that are merely another bit of evidence to be weighed along the road in the enquiry to obviousness (see for example the latest Australian High Court patent pronouncement in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] [2007] HCA 21 (23 May 2007) at paragraph 105 and subsequent, discussing this issue in Australia, the UK, etc.).

    It seems to me that ALWAYS estopping a person to an honestly-held opinion they gave out in ignorance of the true facts (e.g., here, the true state of the prior art), that is clearly wrong as revealed later, runs grave risks of creating instances of injustice. So what is the rationale?

    Regards, Luke

  13. I would think the PTO couldn’t do that until the court’s mandate issued (i.e., after a petition for rehearing, etc.), and maybe not until the time for filing cert. expired (or cert. was denied). But that’s just a wild guess. Anyone know of PTO procedures?

  14. Wouldn’t the PTO just deny the reexam, stating that the patent has been held invalid by the CAFC and that it cannot overrule that holding?

  15. The July 10th USPTO Official Gazette has this entry. Pharmastem had filed for reexamination of the patent at issue about 6 weeks ago.

    5,192,553, Reexam. C.N. 90/008,618, Requested Date: May 31, 2007, Cl. 424/529, Title: ISOLATION AND PRESERVATION OF FETAL AND NEONATAL HEMATOPOIETIC STEM AND PROGENITOR CELLS OF THE BLOOD AND METHODS OF THERAPEUTIC USE, Inventor: Edward A. Boyse, et. al., Owners of Record: Pharmastem Therapeutics, Inc., Wayne, PA, Attorney or Agent: Jones Day, New York, NY, Ex. Gp.: 3991, Requester: Philip H. Coelho, Rancho Cordova, CA

  16. A commenter asks:

    “KSR instructs that a known problem may be used to prove obviousness. Where is the line of distinction drawn between a long felt need and a known problem?”

    Anti-gravity device = long felt need.

    Cyropreserved umbilical cord stem cells = not a long felt need

    Hope that helps.

  17. The comments by “step back” have this fabulous false precision to them: “Don’t you see Federal Circuit? Just look up the words in the dictionary and all is solved.” A question to you: Your comments seem to reflect an intense desire for order and structure; have you ever thought that the application of law to facts might not be that easy? That is the position taken by the en banc court in Phillips in the analogous context of claim construction — are you so sure your dictionary method gives us meaningful precision and that all the judges in Phillips got it wrong?

    Judge Newman seems to think the purpose of the Federal Circuit is to uphold patents and not patent law. The majority at least acknowledged this was a close case. In contrast to Judge Newman’s 10,000 foot picture of the zeitgeist in this case, the panel majority at least pointed to the record evidence and explained why the record evidence reasonably led only to the conclusion that the suggested process was of a routine nature (obviously what the Federal Circuit meant) and that the secondary-factor proof was logically flawed (e.g., arguing widespread surprise among scientists despite those scientists being unfamiliar with the relevant prior art, or at least without any evidence on that point).

    Could the patentees have won on obviousness? Probably so. They could have introduced proof that it is not relatively straightforward to extract umbilical cord blood, cryopreserve it, and reinsert it. The patentees didn’t do so here, and thus the jury had no basis for doubting the proof of a reasonable expectation of success in the suggested method.

    Or the patentees could have drafted their claims to cover whatever solutions they came up with to the questions you assume would have been encountered in the apparently pioneering transplant procedure. The patentees didn’t do so (perhaps because there were no such major questions); they chose to claim a much broader right to exclude.

    Or the patentees could have shored up their secondary factor evidence, creating at least substantial evidence in support of the jury verdict. (Of course, perhaps they could not have truthfully done so.)

    It seems to me like this was a close case given the standards of review but that the majority got it right.

  18. I think the Supreme Court is confused over the obviousness issue. Graham held that “long felt but unsolved needs” might be utilized as secondary evidence of nonobviousness. KSR instructs that a known problem may be used to prove obviousness. Where is the line of distinction drawn between a long felt need and a known problem? Is this splitting hairs, or am I missing something here? I don’t see how adding “for which there was an ‘obvious’ solution encompassed by the patent’s claims” facilitates answering the obviousness inquiry – it is just gobbledygook.

  19. Most amazing of all is how routinely, repeatedly and often the dictionary worshipers at the Fed. Cir. fail to pop open a dictionary and look up the word “routine”. If they had, they might have seen that an experiment that is being performed for the first time cannot rationally be a “routine” one.

    routine: 1. A prescribed, detailed course of action to be followed regularly; a standard procedure. 2. A set of customary and often mechanically performed procedures or activities… 3. an unvarying or habitual method of procedure.

    The next challenge word for them to look up in a dictionary is “obvious” as from the Latin roots, “ob” and “via”.

    It is the routine procedure of some Fed. Cir. judges to resort to hindsight and bombastic arrogance regarding science and scientists. This is what makes the court look like a comedy routine. I’d be laughing if only the tears didn’t get in the way. When Newman J. is gone, the age of reason and enlightenment will be over.

    Excerpt from Newman’s dissent:
    “A reasonable jury could have found that these inventors were not simply conducting a *routine* optimization, as my colleagues *now* rule on what they describe as the “more difficult question [of] whether the prior art would have given rise to a reasonable expectation of success in creating the [claimed inventions].” My colleagues state that *they* are “plainly satisfied” that “a person of ordinary skill in the art would have had reason to attempt to make [the claimed inventions].” I agree that there was reason to seek a cure for destroyed blood cells, and that scientists have been seeking such a cure for a long time, including those scientists whose work is the cited prior art. There has been much hopeful *speculation* about the potential of stem cells, although this remedy eluded those who came before.
    It is often far easier to recognize the problem than to find and demonstrate the solution. The patent law recognizes that advances of great power may be based as much on *persistent and skilled investigation* as on the flash of creative genius, for both serve to transcend that which was previously achieved. See 35 U.S.C. ‘103 (“Patentability shall not be negatived by the manner in which the invention was made.”) My colleagues go too far in limiting the patent system to the serendipitous and the unexpected. Maj. op. at 35 (“while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood,” they “merely used *routine* research methods to prove what was already believed to be the case”). Further, these *scientists* not only established the presence of [viable] stem cells, but also enabled their development for preservation and hematopoietic reconstitution.” [emphasis added]

  20. Re: invalidity – evidently the fact that the inventors succeed where many others had failed was deemed immaterial to the determination of non-obviousness. Not clear to me how that squares with Graham v John Deere. It is clear to me how the invalidity holding in this case could create disincentives for for private sector (i.e. for-profit) investment in certain types of research.

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