Vanda Pharmaceuticals recently filed a petition for writ of certiorari, asking the Supreme Court to review a May 2023 decision by the Federal Circuit that invalidated claims from four Vanda patents covering methods of treating Non-24-Hour Sleep-Wake Disorder (“Non-24”) using the drug tasimelteon (Hetlioz). Vanda Pharmaceuticals Inc., v. Teva Pharmaceuticals USA, Inc., 23-768 (Supreme Court). The district court held that all the asserted claims were invalid as obvious, and the Court of Appeals for the Federal Circuit affirmed this decision. Vanda.cert.petition
The main question now before the Supreme Court is whether obviousness requires a showing of “predictable” results, as suggested in KSR International Co. v. Teleflex, Inc., or if a “reasonable expectation of success” is sufficient. Although these two tests are close to one another, they have meaningful differences. Importantly, the court’s obvious-to-try approach would invalidate truly innovative and unpredictable results so long as the pathway to get there was reasonable. The patentee here argues that the courts should not find any solutions solutions obvious unless those solutions were themselves reasonably predictable from the prior art. With this background, the patentee raised the following question to the Court:
Whether obviousness requires a showing of “predictable” results, as this Court held in KSR, or a mere “reasonable expectation of success,” as the Federal Circuit has held both before and after KSR?
The Supreme Court addressed the obviousness standard most recently in KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007). In KSR, the Court explained that “a combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.” Id. KSR‘s language is built on longstanding precedent that an invention cannot be considered obvious if, at the time it was made, it would not have been “perfectly plain” or “immediately recognizable” to one skilled in the art.
- Dow Chemical Co. v. Halliburton Oil Well Cementing Co., 324 U.S. 320 (1945) (not obvious if not “perfectly plain to an expert”).
- De Forest Radio Co. v. General Electric Co., 283 U.S. 664 (1931) (not obvious unless results would have been “immediately recognized” by one skilled in the art).
- Textile Machine Works v. Louis Hirsch Textile Machines Inc., 302 US 490 (1938) (obvious only when “plainly indicated” or “plainly foreshadowed” by the prior art).
According to Vanda, the Federal Circuit’s “reasonable expectation of success” test improperly renders innovations obvious that, while representing advancements in pharmaceutical science, were still unpredictable breakthroughs at the time achieved. Vanda criticizes the Federal Circuit for clinging to its own expectation-of-success obviousness test as a “subsidiary requirement” that it treats as effectively overriding the controlling Supreme Court precedents.
In Vanda’s view, reasonable expectation of success sets a lower obviousness standard than predictability. This comes to a key point particularly in the ‘unpredictable arts’ of pharmaceutical and biotech research where extensive experimentation is almost always required to determine whether a particular idea will succeed. Because experimentation is necessary for any true discovery, the fact that some folks are conducting similar experiments provides us with information about whether the result is obvious-to-try, but the question here is what it says about the ultimate results. Although in a different context, the issues presented here are similar in nature the Supreme Court’s discussion in Amgen, where a “research assignment” was insufficient disclosure to teach the full scope of the resulting invention.
The inventions here involved fairly narrow differences, and the Federal Circuit concluded that a PHOSITA would have seen a reasonable expectation of success. But, as you can see, the court’s key with all of this is reliance on KSR‘s flexible approach and expanded use of the reasonable expectation of success standard. Lets look for a moment at the particular obviousness contentions:
- Administering without food: Some of the claims required administering the drug without food. Although it was not obvious whether this drug would work better with or without food, the Federal Circuit concluded that there was a motivation to try and a reasonable expectation of success here since FDA guidance recommended food studies, and there are just two potential options (with or without food). There result here is close to a per-se obviousness ruling while the patentee argues that the fact that particular result was unknown and unpredictable at the time.
- 20 mg dose to “entrain patients”: An ongoing clinical trial was testing the 20 mg dose, but had not yet shown it to be effective to entrain patients as required by the claims. The court saw the ongoing clinical trial as evidence supporting a reasonable expectation of success as to the result of the trial, while the patentee argued that it offered only hope, not a predictable solution. See OSI Pharms v. Apotex (Fed. Cir. 2019) (clinical trial provides only hope, not expectation of success).
- Avoiding Co-administration with CYP enzyme inhibitors: A similar drug (ramelton) had shown problems with co-administration with these CYP enzyme inhibitors, creating a reasonable expectation that tasimelteon would also show similar results. On this point, the testimony was that PHOSITA would not have “ruled out an interaction.” Here, the patentee argued that the weak evidence here would fail under a predictability test.
The Supreme Court has not addressed obviousness standards since its 2007 decision in KSR. If the Court grants review, this case offers an opportunity to resolve both new and longstanding divergence in Federal Circuit obviousness decisions.
Although obviousness has long been the central feature of patent prosecution, it has seen a tremendous resurgence in US patent law over the past decade. This is primarily driven by the AIA trials (mainly inter partes review) that rely upon the lower standard offered by KSR. PTAB decisions and the frequency of Federal Circuit obviousness decisions appear to be bleeding over into other arenas — especially Hatch-Waxman infringement litigation that is generally decided by a judge rather than a jury.
Vanda is represented in the Supreme Court petition Paul Hughes team at McDermott Will & Emery that includes Sarah Hogarth, Christopher Bruno, April Weisbruch, and Grace Wallach. Teva’s opposition brief is due in mid-February. Although Teva has not yet filed an appearance at the Supreme Court, I expect that JC Rozendaal from Sterne Kessler will represent Teva before the court along with his team that includes Byron Pickard, Deirdre Wells, William Milliken, and Sasha Rao. At the rehearing stage, Teva argued repeatedly that Vanda was mischaracterizing the Federal Circuit’s decision; not engaging with the panel’s actual analysis; and attempting to re-argue the facts. Welcome to election season.