Tag Archives: motivation to combine

Obviousness: Analogous Art and Hindsight

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by Dennis Crouch

In an interesting September 2014 decision, the Federal Circuit upheld a USPTO determination of obviousness.  The majority decision (authored by Judge Newman) touches on both (1) analogous-art and (2) motivation to combine references. The problem-focused approach taken by the majority in determining analogous art is fascinatingly similar to parts of the abstract-idea analysis in Alice Corp. — looking generally to the problem-to-be-solved as the overarching focus of the invention.  Writing in dissent, Judge Moore characterized the obviousness determination as “[h]indsight, hindsight, hindsight.”  [Decision]

Scientific Plastic Products (SPP) holds a number of patents relating to cartridges for low pressure liquid chromatography (LPLC) with a resealable screw-on cap. See U.S. Patent Nos. 7,138,061, 7,381,327 and 7,410,571. When SPP sued Biotage for infringement, the defendant responded by filing an inter partes reexamination.  Reexam Nos. 95/000,495, ‘496, and ‘497 (filed in 2009, pre-AIA).  Based upon his consideration of the prior art, the patent examiner rejected all of the claims of each patent — finding them obvious under 35 U.S.C. 103. That decision was affirmed by the PTAB and is the subject of the appeal here.  Meanwhile, the district court case has been stayed pending outcome of the reexamination.  On appeal here, a split panel of the Federal Circuit has affirmed the USPTO rejection – with Judge Newman joined by Judge Wallach writing the majority and Judge Moore in dissent.

The primary obviousness reference in the case apparently discloses all of the elements of the patented LPLC cartridge except for one – a tapered lip of the cartridge that corresponds to a taper in the screw-on cap.  The tapering helps create a better seal and avoid leakage when the cap is on.  It turns out that the tapered lip feature is not new, and the USPTO identified two different patents from the soda-pop bottle industry that disclosed the approach.  See for example, Strassheimer (Patent No. 5,100,013).

Obviousness: Section 103 of the Patent Act provides the basic test for obviousness — whether “differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill in the art to which the claimed invention pertains.”   The two primary interpretations of this decision are Graham v. John Deere Co., 383 U.S. 1 (1966)(outlining test) and KSR Int’l Co. v. Teleflex, Inc, 550 U.S. 398 (2007) (explaining that test should not be rigid but instead apply common sense).

Deere explained that there are four factual prerequisites to consider when determining the legal question of obviousness.

  1. The level of ordinary skill in the art;
  2. The scope and content of the prior art;
  3. The differences between the claimed invention and the prior art;
  4. Any objective indicia of nonobviousness.

Those who know Deere well will notice that I have re-arranged the order of the test by placing the level of ordinary skill in the art as the first step in the analysis. I do that because – as explained below – the scope-and-content of the prior art is impacted by the level of skill in the art.

In many obviousness cases, all of the elements of the invention are found within a limited set of prior art references. The argument then is that it would have been obvious for one skilled in the art to think of combining the elements from those references to create the claimed invention.  In KSR, the Court held that the justification for such a combination can be based upon common sense or other evidence and does not require a particular teaching-suggestion-or-motivation found within the prior art itself.

Scope of the Prior Art: The scope and content of prior art is determined by several factors. First, evidence must fall within the prior art definitions for anticipatory references under 35 U.S. 102.  Second, the prior art must also be seen as “analogous art.”  The analogous art requirement is based upon the idea that someone working in a particular field would be unlikely to search through or know all possible prior art but rather would focus attention on what is known (1) in the same field of endeavor or (2) to be addressing the same problem.  The general question is whether it would have been “reasonable” for a person of ordinary skill in the art to consider the given prior art in order to solve the problem confronting the inventor. In re Clay, 966 F.2d 656 (Fed. Cir. 1992).

Here, the problem identified by the inventor was to prevent leakage on a plastic screw-cap and everyone knows that the soda-pop bottles have solved that problem. From that framework this is an easy case.  However, the patentee here argued that this analysis involves improper hindsight because the leakage problem was one identified by the inventor as part of the invention process and was not previously identified in the prior art.

The Federal Circuit implicitly agreed that it would be improper hindsight to rely upon the problem first identified by the inventor for determining analogous art. However, the court rejected that argument as applied to the facts here.  In particular, the PTAB noted that the primary LPLC reference includes a particular o-ring seal that serves as an implicit recognition leakage could be a problem. On appeal, the Federal Circuit confirmed that the implicit concern was sufficient to avoid  hindsight concerns.  Affirmed.

= = = =

Writing in dissent, Judge Moore argues that majority opinion is hindsight of the worst kind, ‘wherein that which only the invention taught is used against its teacher.’ quoting W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540(Fed. Cir. 1983).

The patents do not indicate that leakage was a problem identified in the prior art or a problem known to those of skill in the art. Rather they indicate that the claimed design will avoid leakage. These inventors identified a design problem, articulated it, and solved it. There is absolutely no evidence of the existence of a known leakage problem that would have motivated skilled artisans to modify Yamada. The Board is taking the ingenuity of these inventors and, without any record basis, attributing that knowledge to all skilled artisans as the motivation to make the inventions at issue. Hindsight, hindsight, hindsight. . . .

I would reverse because I conclude that the Board’s cancellation of the claims at issue was based entirely on hindsight reconstruction—there is no record evidence that one of skill in the art would have been motivated to modify Yamada with soda pop bottle sealing closures.

An implicit suggestion from Judge Moore is that in hotly contested post-issuance cases invalidating evidence should be high quality:

These were inter partes reexamination proceedings between sophisticated parties. Both parties put on expert testimony regarding obviousness. Yet there is no evidence that the chromatography cartridges in Yamada had
a leakage problem that skilled artisans would have been motivated to address.

Judge Moore also challenged the PTAB’s failure to determine the level of ordinary skill in the art.  “An ordinarily skilled chemist would have likely looked to a different body of prior art than an ordinarily skilled mechanical engineer with industrial design experience. . . We cannot answer the analogous art question without knowing who the person of ordinary skill is.”

Proving Non-Obviousness with Ex-Post Experimental Evidence?

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by Dennis Crouch

The Federal Circuit has rejected BMS’s petition for en banc rehearing in its chemical compound obviousness case. However, four additional opinions either concurring or dissenting show that the court does not speak with one-mind on the issue. Obviousness is the central patentability doctrine and thus, even small modifications to the doctrine can have important systemic impacts. En Banc Denial Opinions.  The patent in question – if valid – is worth hundreds of millions of dollars and so we can expect a petition for writ of certiorari to the Supreme Court.

In Bristol-Myers Squibb Company v. Teva Pharmaceuticals USA, Inc., the Federal Circuit panel affirmed a lower court finding that BMS’s patent covering the Hep-B drug entecavir is invalid as obvious. Patent No. 5,206,244. Judge Chen drafted the original opinion that was signed by Chief Judge Prost and Judge Plager.  Prof Rantanen covered the original decision here.

The obviousness approach for newly invented chemical compounds typically involves identifying the closest analog compound (lead compound) and then determining whether it would have been obvious to create that new compound based upon the lead prior art.  Here, the basic holdings of the Federal Circuit were: (1) affirming that “those of ordinary skill in the art would have selected 2′-CDG, a carbocyclic analog, as a lead compound for further development efforts;” (2) affirming that the same PHOSITA would have been motivated to modify the lead compound; and (3) holding that the secondary indicia of non-obviousness were insufficient to transform the obviousness determination.

In its petition for rehearing, BMS presented two primary arguments:

  • That the court improperly refused to consider post-invention discoveries regarding the invention and prior art that showed significant differences between the two.  In particular, the appellate panel found it irrelevant that the lead-prior art compound is highly toxic to humans since – at the time of the invention – the compound was generally regarded as safe.
  • With regard to objective indicia of non-obviousness – that the court improperly separated the analysis on a property-by-property basis (finding each merely difference-in-degree) rather than looking at the alleged dramatic (difference-in-kind) impact of the drug when considered as a whole.

In his opinion discussed below, Judge Taranto sets the stage:

In short, the Bristol-Myers compound, which is a novel molecule, is dramatically different from the prior-art compound in providing practical human benefits: one provides such benefits, the other does not. But that difference was identified only after Bristol-Myers filed for its patent, because the prior-art compound, not having been tested in animals or humans, was not then known to be toxic.

A number of Amici supported the petition, including BIO, Pfizer, Eli Lilly, PhRMA, IPO, and Merck.

The basic issue here is that pharmaceutical companies regularly perform tests to compare their newly-invented drug treatment to the prior art in order to prove that the two are quite different.  However, as a general matter, those tests are performed after the invention and application is already on file.  The companies then have a major concern that this decision will deny the relevancy of those objective but ex post results.

The trouble for the patentee in this case is the statute — that expressly calls for considering what was known by PHOSITA at the time of the invention (pre-AIA; in future we the time is at the effective filing date of the patent application).  Under the statute it seems that post-filing information should only be relevant to showing what PHOSITA would have been thinking back at the critical date.

Although the entire court did not explain its reasons for denying the rehearing, Judges Dyk (joined by Judge Wallach) and Judge O’Malley wrote separate opinions concurring in the denial.

Judge Dyk:

This case presents a question of obviousness, in particular whether evidence postdating the invention can be used to establish unexpected results. The panel holds that it cannot be considered in the circumstances of this case. That position is correct. It is mandated by the statute, which provides that an invention is not patentable if it “would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103 (emphasis added).

The patent applicant’s discovery of unexpected results at the time of the invention can help to establish that the invention would not have been obvious to another skilled person. But hindsight bias must be avoided in determining obviousness. And under longstanding Supreme Court authority, the pertinent knowledge is that possessed at
the time of the invention.

You will note that Judge Dyk cites the new-103 rather than pre-AIA 103(a), but that does not significantly change the point he is making here.

Judge O’Malley:

I write to assuage Bristol-Myers Squibb Co.’s (“BMS”) and the amici’s1 fears that this panel decision has rewritten the test for obviousness for pharmaceutical patents. In my view, the concerns expressed are unjustified and mischaracterize the opinion. This case does not forge new ground or set down immutable principles. It simply decides that, on the record before it, the district court did not err in finding the asserted claim of the ’244 Patent invalid as obvious. . . .

Our case law clearly allows the consideration of later discovered differences between the prior art and the invention. . . . These differences inform the obviousness analysis and thus can be considered when assessing what was understood by one of skill in the art at the time of the invention and what expectations may have been reasonable. . . . Like all evidence of objective indicia, the point of considering later-understood evidence regarding the properties
of the invention is to guard against hindsight bias by assessing claims of a motivation to combine as of the time of invention in light of later surprises or developments.

Judge Newman dissented from the denial with an opinion joined by Judges Lourie and Reyna.  Judge Newman, inter alia, walks through the lengthy list of cases that where ex post evidence was relied upon to prove non-obviousness and sees the panel decision here as a major departure.

Judge Taranto’s dissent basically argues that the panel decision was sloppy and, because it can be read in the extreme way suggested by the petitioner, that it should be modified.

Court Finds Patent Invalid; Then Orders Defendant to Stop Infringing

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By Dennis Crouch

Following the Supreme Court’s equitable relief decision in eBay, many patentees have found it difficult to obtain injunctive relief to stop ongoing infringement – even after final judgment that the patent is both valid and infringed.

In a recent decision, the District Court Judge Blake (D.Md.) seemingly flipped eBay on its head by enjoining TWi Pharma from making or selling a generic version of Par’s patented Megace ES formulary. The upside-down element of the decision is that the order granting the injunction issued only after the court found the patent claims invalid as obvious. Par Pharma v. TWi Pharma, 1-11-cv-02466 (MDD August 12, 2014, Order). To be clear, the order here is not for permanent relief, but only relates to injunction pending appeal.

The doctrine involving the grant of equitable relief pending appeal is a bit squirrelly – especially at the district court level because the general setup involves the court deciding that its decisions are likely wrong. Recognizing that, the law does not require the moving party to show that its case is a likely winner but only a substantial likelihood that the requested equitable relief will be entered as a result of the appeal. Applying this standard, the district court writes:

Par claims that it will succeed on the merits because this court erred in its application of the law with respect to motivations to combine the prior art and inherency. Although the court stands by its judgment, it recognizes that the case presents a close call. Further, the Federal Circuit will conduct a de novo review of whether the ‘576 patent is obvious, including whether this court properly interpreted the law regarding motivation and inherency. . . . The court is not persuaded Par has demonstrated a “strong” likelihood of success on appeal—especially given that most of its dispute with this court’s earlier decision is only rehashing the legal arguments it has already made. Par has, however, made a showing of a substantial case.

The district court joined this “substantial case” on appeal with strong evidence of irreparable harm absent relief in its decision to grant the injunction pendente lite.

Regarding the ‘public interest’ element of equitable relief, the court found that element neutral.

The court recognizes that the public is served by the availability of low-cost generic medications, especially where an invalid patent has previously barred their entry into the market. On the other hand, the public also has an interest in the protection of valid patents because it promotes innovation. This factor, therefore, is neutral.

An interesting and problematic element of the court’s decision here is that the doctrinal approach makes it easier for a patentee to obtain temporary relief following an adverse final judgment (of invalidity) than prior to such a judgment. The doctrinal difference highlighted by the court between preliminary injunctive relief pending final judgment and post-decision relief pending appeal is simply that the proof of likelihood-of-success is reduced for relief pending appeal. This is obviously problematic because in the second case, the court will have already reached a final judgment that the patentee loses.

In making its decision, the district court applied Federal Circuit precedent regarding relief pending appeal. However, those cases relate generally to the asymmetrical situation of staying-injunctive relief pending appeal rather than, as here, granting injunctive relief pending appeal.

There is a better approach that still recognizes the potential need for injunctive relief pending appeal and that is simply requiring a greater showing of need for relief (irreparable harm; balance of hardships; public interest) when the likelihood-of-success element is reduced.

Institut Pasteur: Federal Circuit Takes Hard Look at USPTO Board Factual Conclusions

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By Dennis Crouch

Institut Pasteur v. Focarino and Precision BioSciences, Reexam No. 95,000,443 (Fed. Cir. 2013)

The French non-profit Institut Pasteur holds several patents covering site-directed insertion of genes into eukaryotic chromosomes. See U.S. Patent Nos. 7,309,605, 6,610,545, and 6,833,252. Basically, Pasteur discovered that a set of naturally occurring enzymes that could cleave chromosomal DNA at particular recognition sites and also discovered that cells will naturally repair the cleavage through homologous recombination even when an additional gene sequence is added, so long as a proper recombinatory DNA template is also added. It turns out that this sequence of events occurs in mitochondrial DNA but Pasteur was able to make it work on chromosomal DNA as well. The patents all relate to creating the enzymes and method of using those enzymes to insert DNA.

This is old stuff and all happened in the early 1990’s The three patents all expired in 2012 while the case was pending appeal to the Federal Circuit, but companies may still be on the hook for past damages for what has become a basic tool of genetic engineering.

In 2009, Precision BioSciences filed for inter partes reexamination of the three patents. The examiner found the claimed invention obvious and that decision was affirmed by the USPTO’s administrative patent appeal board. On appeal, the Federal Circuit has come-out with three interesting rulings:

Hard Deadline on Amendments: First, for the ‘605 patent, the claims were amended during the reexamination (and prior to the patent expiration date). For those claims, the court dismissed Pasteur’s appeal as moot because “[substantially] amended claims cannot be entered now that the patent has expired.” This result is obviously important for gamesmanship because it rewards delay tactics on the part of would-be infringers and also encourages patentees to work toward concluding any post-grant reviews.

No Substantial Evidence: Second, the Federal Circuit determined that the Board lacked Substantial Evidence for its factual conclusions that led to its obviousness decision of the challenged claims of the ‘545 patent. The question of obviousness is a matter of law predicated upon a set of factual conclusions. A factual conclusion must itself be based upon evidence presented to the Court. Here, after reviewing the two key prior art references (the evidence), the USPTO Board concluded that the prior art showed that the claimed enzyme “cleaved yeast chromosomal DNA when expressed in yeast cells.” On appeal, the Federal Circuit rejected that factual conclusion after failing to find such a disclosure in either reference. One factor making the Federal Circuit’s decision easier was that the Board based its conclusion upon the text of the prior art references rather than relying upon factual or expert testimony that could have offered stronger conclusory evidence.

Motivation to Combine: Finally, with regard to the ‘252 patent, the Federal Circuit found that the Board had failed to identify the “motivation, if any, a skilled artisan at the relevant time would have had to pursue the claimed invention.”

Opinion by Judge Taranto

Federal Circuit to PTO: Apply KSRs Broad Basic Mandate

Patent,

Randall MFG v. Rea (Fed. Cir. 2013) (Inter Partes Reexamination No. 95/000,326)

FG Products owns U.S. patent No. 7,214,017 that is directed to a moveable bulkhead for partitioning cargo space in a shipping container. Back in 2007, Randall requested inter partes reexamination of the '017 patent. The reexamination examiner found the claims as obvious based upon a combination of three prior art references. However, in a 2012 decision, the USPTO's Board reversed – finding that someone of skill in the art "would not reasonably have appreciated" that the prior art could be combined in the manner suggested. Now on appeal, the Federal Circuit has vacated the Board Decision – finding that the Board's approach failed because it narrowly focused on the four cited prior art references while ignoring other factual evidence presented. In essence, the Federal Circuit is demanding that the flexible analysis of KSR be applied by the USPTO.

In KSR, the Supreme Court criticized a rigid approach to determining obviousness based on the disclosures of individual prior-art references, with little recourse to the knowledge, creativity, and common sense that an ordinarily skilled artisan would have brought to bear when considering combinations or modifications. Rejecting a blinkered focus on individual documents, the Court required an analysis that reads the prior art in context, taking account of "demands known to the design community," "the background knowledge possessed by a person having ordinary skill in the art," and "the inferences and creative steps that a person of ordinary skill in the art would employ." KSR. . . .

The Board's analysis in this case ran afoul of that basic mandate. By narrowly focusing on the four prior-art references cited by the Examiner and ignoring the additional record evidence Randall cited to demonstrate the knowledge and perspective of one of ordinary skill in the art, the Board failed to account for critical background information that could easily explain why an ordinarily skilled artisan would have been motivated to combine or modify the cited references to arrive at the claimed inventions. As KSR established, the knowledge of such an artisan is part of the store of public knowledge that must be consulted when considering whether a claimed invention would have been obvious. . . .

The Board's failure to consider that evidence—its failure to consider the knowledge of one of skill in the art appropriately—was plainly prejudicial. Once it is established that a prevalent, perhaps even predominant, method of stowing a bulkhead panel was to raise it to the ceiling, it is hard to see why one of skill in the art would not have thought to modify Aquino to include this feature—doing so would allow the designer to achieve the other advantages of the Aquino assembly while using a stowage strategy that was very familiar in the industry. Moreover, although FG claims that, as depicted, the panels of Aquino may have been impeded by the rails from being raised all the way to the ceiling, there is no dispute that it would have been well within the capabilities of an ordinary bulkhead designer to adjust the geometry ( e.g., drop the hinge axis down a few inches) so that the panels could be freely raised to the ceiling. There are no apparent functional concerns that would have discouraged a bulkhead designer of ordinary skill from attempting the combination.

Particularly when viewed in the context of the background references Randall provided, the evidence strongly supports the notion that the bulkhead design FG claimed was nothing more than the "combination of familiar elements according to known methods,"" 'each performing the same function it had been known to perform,' " "yield[ing] predictable results." KSR (quoting Sakraida v. Ag Pro, Inc., 425 U.S. 273, (1976)). In addition, neither FG nor the Board points to any objective indicia of non-obviousness. On this record, the Board's finding of lack of motivation to combine is infected by prejudicial error. We accordingly vacate the Board's reversal of the Examiner's rejection.

Based upon Judge Taranto's writing here, it is unclear why he chose to vacate the Board holding rather than reverse as the Supreme Court did in KSR. Joining Judge Taranto on the panel were Judges Dyk and Rader.

In the context of the hallmark obviousness case of Graham v. John Deere, 383 U.S. 1 (1966), this case should probably be seen as placing focus on "the level of ordinary skill in the pertinent art" and a mechanism for evidencing the type of creativity

One interesting issue that I'll write on more later is that the Federal Circuit did not address the issue of standing – i.e., whether there is a sufficiently ripe case-or-controversy between the parties to comply with that Constitutional requirement.

Judge Rader’s Obviousness Tutorial: Including the Conclusion that Older Prior Art is Less Credible and a Restatement that Objective Indicia of Nonobviousness Play a Critical Role

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By Dennis Crouch

Leo Pharmaceutical Products, Ltd. v. Rea, 2013 WL 4054937 (Fed. Cir. 2013)

In a pre-AIA filing, Galderma challenged Leo’s U.S. Patent No. 6,753,013 in an inter partes reexamination before the USPTO’s now renamed Board of Patent Appeals. The patent claims a “storage stable and non-aqueous” pharmaceutical composition used to treat skin conditions such as psoriasis. Prior to the invention, it was well known that a combination of Vitamin-D along with a corticosteroid could form the basis of an effective treatment. However, no one had been able to manufacture a storage stable form of the combination. This was especially challenging because the stable forms of the active ingredients prefer different pH levels. To achieve the storage stable results, Leo added a solvent to the mixture. The claim identifies the solvent in a markush group that likely includes thousands of potential compounds. During the reexamination, Leo also added the particular limitation that “said pharmaceutical composition is storage stable and non-aqueous.”

In reviewing the case, the Board first construed these new terms “storage stable” and “non-aqueous” and then found the patent invalid as obvious over the prior art. On appeal, the Federal Circuit has reversed.

Claim Construction: The Federal Circuit continues, for the time being, to give no deference to PTO claim construction decisions. Here, the term “storage stable” was difficult to construe because it was never used during prosecution of the original patent application and only added during reexamination. However, the patent does discuss the composition’s “ability to resist degradation” according to test results presented in the specification and the PTO accepted that definition as proper. Noting that one of ordinary skill “would have reasonably looked to the described stability test as defining what was meant by ‘storage stable.'” On appeal, the Federal Circuit rejected that definition as impermissibly narrow and that instead allowed a broader definition. Although not elucidated by the opinion, the patentee is walking a fine line with this amendment between (1) having a sufficiently broad patent and (2) improperly adding new matter to the claims in violation of the written description requirement.

Obviousness: This decision may become a somewhat important obviousness case for patentees. The Board found the patent claims obvious in light of a combination of three prior art references. The Board basically found that it would have been obvious for someone of skill in the art to take the prior art combination of Vitamin-D and corticosteroids and add in the claimed solvent in order to achieve storage stability.

On appeal, the Federal Circuit faulted the Board for failing to give credence to the patentee’s identification of the problem (that a stable form should be designed). The prior art did not particularly recognize the problem but rather “either discouraged combining vitamin D analogs and corticosteroids … or attempted the combination without recognizing or solving the storage stability problems.” Leo also presented evidence that, at the time of the invention, researchers were being “warned that vitamin D should not be combined with other drugs requiring a low pH ( e.g., corticosteroids).”

[T]he record shows no reason for one of ordinary skill in the art to attempt to improve upon either Dikstein or Serup using Turi. The ordinary artisan would first have needed to recognize the problem, i.e., that the formulations disclosed in Dikstein and Serup were not storage stable. To discover this problem, the ordinary artisan would have needed to spend several months running storage stability tests Only after recognizing the existence of the problem would an artisan then turn to the prior art and attempt to develop a new formulation for storage stability. If these discoveries and advances were routine and relatively easy, the record would undoubtedly have shown that some ordinary artisan would have achieved this invention within months of Dikstein or Serup. Instead this invention does not appear for more than a decade.

Now, the Federal Circuit’s language here obviously includes some amount of doublespeak or could perhaps be described as slicing the bologna awfully thin since according to the court, researchers (1) recognized that vitamin D could not be stably combined with low pH drugs such as corticosteroids but (2) did not recognize that vitamin-D could not be stably combined with corticosteroids.

Old Prior Art: In the discussion, Judge Rader uses an interesting between-the-lines or perhaps behind-the-scenes analysis of the prior art:

First, the Board found motivation to combine Dikstein or Serup with Turi because one of ordinary skill would have used vitamin D to solve the well-known side effects of steroid treatment. However, combining Turi and vitamin D to address the side effects of a steroid treatment is only straightforward in hindsight. Turi was publicly available in the prior art for twenty-two years before the ′013 patent was filed, yet there is no evidence that anyone sought to improve Turi with vitamin D. According to the record, even when Serup published the well-known side effects of steroid-induced atrophy in 1994, no one—including Serup—sought to improve Turi by adding vitamin D to Turi’s corticosteroid composition. Serup even targeted the precise side effects that the Board believed would have motivated the addition of a vitamin D analog to Turi’s corticosteroid composition, yet Serup did not seek to improve Turi by adding vitamin D. . . .

The elapsed time between the prior art and the ′013 patent’s filing date evinces that the ′013 patent’s claimed invention was not obvious to try. Indeed this considerable time lapse suggests instead that the Board only traverses the obstacles to this inventive enterprise with a resort to hindsight. It took over a decade—after Dikstein’s disclosure of the benefits of combining vitamin D and corticosteroid treatments into one formulation—for Dikstein’s formulations to be tested for storage stability. And, until the advancement made by the inventors of the ′013 patent, no one had proposed a new formulation that would be storage stable. The problem was not known, the possible approaches to solving the problem were not known or finite, and the solution was not predictable. Therefore, the claimed invention would not have been obvious to try to one of ordinary skill in the art. Indeed ordinary artisans would not have thought to try at all because they would not have recognized the problem.

Under Judge Rader’s point of view here, older prior art should be seen as less credible in the obviousness analysis. The logic obvious improvements would have happened quickly and the long time span between improvements suggest that the improvement was not an obvious one. This logic is bolstered in cases such as this where research is ongoing in the area and a market has already developed.

Although the patentee claimed a wide variety of solvents, the Federal Circuit also found that there were many more potential solvents available to try and the PTO did not offer specific reasons why the ones selected would have been particularly obvious to try.

In addition, the Board found that a person of ordinary skill in the art would have been capable of selecting the correct formulation from available alternatives. Specifically, the Board found more than eight different classes of additives ( e.g., diluents, buffers, thickeners, lubricants). The Board also found more than ten different categories of composition forms ( e.g., liniments, lotions, applicants, oil-in-water or water-in-oil emulsions such as creams, ointments, pastes, or gels). “Based on these broad and general disclosures,” the Board reasoned that an artisan would have been able to “mak[e] choices about what ingredients to include, and which to exclude” in formulating a composition with a vitamin D analog and steroid. To the contrary, the breadth of these choices and the numerous combinations indicate that these disclosures would not have rendered the claimed invention obvious to try. See Rolls–Royce PLC v. United Techs. Corp., 603 F.3d 1325, 1339 (Fed.Cir.2010) (claimed invention was not obvious to try because the prior art disclosed a “broad selection of choices for further investigation”). . . . .

This court and obviousness law in general recognizes an important distinction between combining known options into “a finite number of identified, predictable solutions,” KSR, and ” ‘merely throwing metaphorical darts at a board’ in hopes of arriving at a successful result,” Cyclobenzaprine, quoting Kubin. While the record shows that, as early as 1995, the prior art indicated that both vitamin D analogs and corticosteroids were effective treatments for psoriasis, that same prior art gave no direction as to which of the many possible combination choices were likely to be successful. Instead, the prior art consistently taught away from combining vitamin D analogs and corticosteroids.

One important feature of PTO decision making is that Board conclusions of fact only require substantial evidence to be affirmed on appeal. Here, the Federal Circuit avoided that issue by indicating that all of its decisions were based upon the Board failure to properly apply the law to those facts. “In this case, however, with no material factual disputes, this court cannot share the Board’s analysis and application of the law to those facts.”

Objective Indicia of Non-Obviousness: Judge Rader writes:

The court now turns to the Board’s analysis of the objective indicia of nonobviousness. The Board reasoned that “the strong case of obviousness outweighs the experimental evidence and testimony about the advantages of the claimed composition.” Contrary to the Board’s conclusion, this court finds the objective indicia, in concert with the entire obviousness analysis, present a compelling case of nonobviousness. In fact, the objective indicia of nonobviousness highlight that the Board’s analysis regarding the combination of Serup or Dikstein with Turi was colored by hindsight.

Whether before the Board or a court, this court has emphasized that consideration of the objective indicia is part of the whole obviousness analysis, not just an afterthought. … When an applicant appeals an examiner’s objection to the patentability of an application’s claims for obviousness, the PTO necessarily has the burden to establish a prima facie case of obviousness which the applicant then rebuts. However, during inter partes reexamination, the Board is reviewing evidence of obviousness—including objective indicia—submitted by two adversarial parties for the claims of an issued patent. Thus, the Board should give the objective indicia its proper weight and place in the obviousness analysis, and not treat objective indicia of nonobviousness as an afterthought.

Objective indicia of nonobviousness play a critical role in the obviousness analysis. They are “not just a cumulative or confirmatory part of the obviousness calculus but constitute[ ] independent evidence of nonobviousness.” Ortho–McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358, 1365 (Fed.Cir.2008). This case illustrates a good reason for considering objective indicia as a critical piece of the obviousness analysis: Objective indicia “can be the most probative evidence of nonobviousness in the record, and enables the court to avert the trap of hindsight.” Crocs, Inc. v. Int’l Trade Comm’n, 598 F.3d 1294, 1310 (Fed.Cir.2010) (internal quotation marks omitted). Here, the objective indicia of nonobviousness are crucial in avoiding the trap of hindsight when reviewing, what otherwise seems like, a combination of known elements.

Unexpected results are useful to show the “improved properties provided by the claimed compositions are much greater than would have been predicted.” See In re Soni, 54 F.3d 746, 751 (Fed.Cir.1995) (internal quotation marks omitted). This record shows “extensive experimental evidence” of unexpected results that contradict the Board’s obviousness finding. J.A. 14. The Board concluded that the “unexpected results” claimed by Leo Pharmaceuticals were not surprising or unexpected. J.A. 19. However, substantial evidence does not support the Board’s conclusion.

During reexamination, the inventors of the ′013 patent submitted test results that analyzed the Dikstein and Serup formulations. The inventors found that the formulations disclosed by Dikstein and Serup result in significant degradation of the vitamin D analog and corticosteroid. See J.A. 1041–46 (testing formulations in Serup); J.A. 1625–27, 2152–2154 (testing formulations in Dikstein). The inventors also tested an improvement of Serup using Turi, by replacing Serup’s solvent with POP–15–SE, and still found significant degradation of the corticosteroid component. See J.A. 1045–46. These test results are a strong indication that the ′013 patent’s combination of known elements yields more than just predictable results.

In addition to evidence of unexpected results, Leo Pharmaceuticals provided other objective indicia of non-obviousness. For example, the commercial success of Leo Pharmaceutical’s Taclonex® ointment is a testament to the improved properties of the ′013 patent’s claimed invention. Taclonex® is the first FDA-approved drug to combine vitamin D and corticosteroids into a single formulation for topical application. While FDA approval is not determinative of nonobviousness, it can be relevant in evaluating the objective indicia of nonobviousness. See Knoll Pharm. Co., Inc. v. Teva. Pharm. USA, Inc., 367 F.3d 1381, 1385 (Fed.Cir.2004). Here, FDA approval highlights that Leo Pharmaceutical’s formulation is truly storage stable, something that the prior art formulations did not achieve.

The record also shows evidence of long felt but unsolved need, i.e., the need for a single formulation to treat psoriasis. The length of the intervening time between the publication dates of the prior art and the claimed invention can also qualify as an objective indicator of nonobviousness. See Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1376–77 (Fed.Cir.2000). Here, the researchers were aware of the benefits of using both vitamin D and corticosteroids in the treatment of psoriasis as early as 1986. See, e.g., Dikstein col. 1, ll. 9–16. And Turi, upon which the Board relied to make its case, issued in 1978. Yet, it was not until the ′013 patent’s filing in 2000— twenty-two years after Turi and fourteen years after Dikstein-that the solution to the long felt but unsolved need for a combined treatment of vitamin D and corticosteroid was created. The intervening time between the prior art’s teaching of the components and the eventual preparation of a successful composition speaks volumes to the nonobviousness of the ′013 patent.

Here, the objective indicia—taken in sum—are the most “probative evidence of nonobviousness … enabl[ing] the court to avert the trap of hindsight.” Crocs, Inc., 598 F.3d at 1310. Viewed through the lens of the objective indicia, as opposed to the hindsight lens used by the Board, the ′013 patent would not have been not obvious over Turi in combination with Dikstein or Serup. Therefore, this court reverses the Board’s obviousness determination.

Impact of Restriction/Election on Claim Scope and Integrating Objective Indicia Into the Obviousness Analysis

Obviousness, Patent,

By Dennis Crouch

Plantronics is an important case for patent prosecutors both for its discussion of proper restriction/election technique and for its language requiring the consideration of objective indicia of nonobviousness prior to reaching a conclusion of obviousness.

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Plantronics, Inc. v. Aiph, Inc. (Fed. Cir. 2013)

On summary judgment, district court Judge Bernard Zimmerman found Plantronics’ concha-style headset patent (5,712,453) to be both invalid (obvious) and not infringed. On appeal, the Federal Circuit has rejected that decision on several grounds.

Impact of Election on Claim Scope: Early in prosecution, the PTO issued a restriction requirement – noting that the original application improperly included multiple inventions. Plantronics elected to limit the claim scope to claim species of “Figures 1a and 1b.” Those figures both show the headset stabilizer support as an elongated member while other non-elected figure-species were structurally different (arguably without the elongated member). The district court relied upon that the restriction/election to construe “stabilizer support” as an elongated member that is longer than it is wide. On appeal, the Federal Circuit rejected that claim scope narrowing because the reason for the restriction requirement was not necessarily the elongated structural difference. Judge Wallach writes:

The PTO’s restriction requirement did not suggest that the different inventions it found were based on differences in structure (i.e., “elongated” versus an “arch”). Indeed, the PTO found four patentably distinct inventions in the figures of the ‘453 patent without providing any reasons why in its view the application presented differing inventions. Likewise, other figures of the ‘453 patent depicting other unelected species of the invention also reveal a “stabilizer support” that appears “elongated,” which refutes Aliph’s contention that the restriction requirement was based on that structural difference. The election of an invention in response to an ambiguous restriction requirement in turn cannot be said to provide any guidance forming a basis for narrowing a broadly drafted claim. … Neither the PTO nor Plantronics made any particular remarks regarding the differences (e.g., in structure) of what the PTO found to be different inventions, and while Plantronics elected without traverse the invention of Figures 1A and 1B, Plantronics did disagree with the PTO’s comments on claim 11 when it responded that claim 11 is a generic claim that read on all the embodiments illustrated in the application. This exchange with the PTO thus does not amount to anything clear or unambiguous to disclaim claim scope otherwise encompassed by the broadly drafted claims.

The court thus indicates that restriction/response do have the potential of limiting claim scope, but not in this case.

Further, the court went on to note the standard rule that structure found in the patent drawings should not be seen as limiting to the claim scope – unless the structure is written into the claims. Further, because the drawings do not provide particular dimensions, they “may not be relied upon to show particular sizes” or proportions. See MPEP 2125.

Because the district court had unduly limited the claim scope, the Federal Circuit vacated the non-infringement finding and remanded for additional review.

Obviousness: The district court also found the claims invalid as obvious. On appeal, the Federal Circuit vacated – finding that the record was not sufficiently clear for such a ruling as a matter of law. Rather, on remand, the issue of obviousness will go to trial.

In its analysis, the district court missed two key points: (1) identifying the motivation for combining prior art references and (2) fully considering objective indicia that may negate obviousness.

Motivation to Combine: It is often the case that combination inventions are deemed nonobvious (and thus patentable) even when all of the claim elements are individually found in the prior art. In KSR v. Teleflex, the Supreme Court noted that there must also be some reasoning as to why someone of skill in the art would seek to combine the reference in the manner claimed. That motivation to combine may be found explicitly or implicitly in market forces; design incentives; as well as by considering the background knowledge, creativity, and common sense of the person of ordinary skill in the art.

Although KSR added flexibility to the process, the motivation to must still be based upon evidence. Here, the district court indicated that “common sense” serves as the motivation. On appeal, the Federal Circuit found that explanation insufficient without more extensive reasoning with evidentiary support. As the court wrote in Mintz, “the mere recitation of the words ‘common sense’ without any support adds nothing to the obviousness equation.”

Objective Indicia of Nonobviousness: The appellate court linked the above discussion of “common sense” with an analysis of objective indicia of nonobviousness – noting that these considerations (such as commercial success, copying, or prior failures) could weigh against a KSR-style finding of common-sense motivation to combine.

Here, the district court did consider the patentee’s evidence regarding copying and commercial success however, the appellate panel found that the district court’s decision provided insufficient written analysis of the patentee’s evidence. In addition the appellate panel found that the lower court had mis-ordered its analysis by first finding a prima facie case of obviousness and then considering whether the objective factors negate that original conclusion. Rather, according to the panel here, the objective indicia of nonobviousness must be considered prior to reaching an obviousness conclusion.

Here, the district court concluded that the ‘453 patent was invalid as obvious before considering objective indicia of nonobviousness. . . . The district court addressed Plantronics’ objective evidence of nonbviousness—including copying and commercial success—only after reaching this conclusion. It stated: “Even accepting as true Plantronics’ assertions on these secondary considerations, they do not save Plantronics from summary judgment here since such secondary considerations simply cannot overcome a strong prima facie case of obviousness.” To the extent the district court conducted a post hoc analysis of objective considerations, it was improper.

This court has consistently pronounced that all evidence pertaining to the objective indicia of nonobviousness must be considered before reaching an obviousness conclusion. See, e.g., In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1076 (Fed. Cir. 2012). The significance of this fourth Graham factor cannot be overlooked or be relegated to “secondary status.”

When done properly, this ordering could be irrelevant. However, the court argues that including the secondary factors as an integrated element of the analysis helps “guard against the dangers of hindsight bias.” The court writes:

Failure to give proper consideration to such evidence, as in this case, can be fatal because “common sense” may not be so apparent in view of objective evidence of nonobviousness (e.g., commercial success and copying), particularly when all reasonable inferences are drawn in favor of the patentee.

In the end, the court sided with the patentee – finding that the evidence presented raise a genuine issue of material fact – sufficient to overcome the summary judgment motion and proceed to trial.

The commercial success of Aliph’s alleged copied product and the failure of attempts to combine the prior art elements before the ‘453 patent provide a genuine issue of material fact as to whether it would be “common sense” to combine the elements in the prior art to arrive at the claimed invention. Because evidence pertaining to objective considerations raises genuine issues of material fact, the district court’s decision is reversed as to all the asserted claims in this case.

End.

Allergan v. Sandoz: The Thin Line of Nonobviousness

Obviousness, Patent, , , ,

By Jason Rantanen

Allergan, Inc. v. Sandoz Inc. (Fed. Cir. 2013) Download Allergan v Sandoz
Panel: Dyk (dissenting-in-part), Prost (author), O'Malley

Allergan illustrates how thin the line between obvious and nonobvious can sometimes be.  Allergan owns several patents relating to its COMBIGAN combination ophthalmic drug treatment: Patent Nos. 7,323,463, 7,642,258, 7,320,976, and 7,030,149.  Representative claim 1 of the '463 patent states:

1. A composition comprising about 0.2% timolol by weight and about 0.5% brimonidine by weight as the sole active agents, in a single composition.

Sandoz sought to market a generic version of COMBIGAN, triggering Allergan to file suit under 35 U.S.C. § 271(e)(2)(A) alleging infringement of its four patents.  Sandoz stipulated to infringement of most of the asserted claims following claim construction and the district court subsequently found that all of the remaining asserted claims were not invalid after a bench trial.  Sandoz's appeal focused primarily on the district court's nonobviousness ruling. For purposes of the appeal, the asserted claims of the '463, 258, and '976 patents were treated as a single group (I'll refer to these collectively as the '463 claims, since that's how the court refers to them) with claim 4 of the '149 patent treated separately.

The '463 claims – obvious: On appeal, the court unanimously reversed the district court's determination that the claims of the '463 patent were nonobvious.  Both timolol (a beta blocker) and brimodine (an alpha2-agonist) were commercially available in their claimed concentrations at the time of the invention and were used to treat opthalmic conditions.  The primary prior art reference, DeSantis, expressly taught serially administering both a beta blocker, such as timolol, with a brimodine in a fixed combination.  It also provided "an express motivation to combine alpha2-agonists and beta blockers in order to increase patient compliance."  Slip Op. at 8.

So where did the district court go wrong?  First, the Federal Circuit held that it committed clear error by finding that "“while patient compliance may have created a need for fixed combination products, it did not motivate a person of skill in the art to develop fixed combinations with a reasonable expectation of success, because the FDA did not consider improving patient compliance as a factor in its approval decision.” Id. at 9, quoting district court.  While FDA approval may be relevant to the motivation inquiry:

There is no requirement in patent law that the person of ordinary skill be motivated to develop the claimed invention based on a rationale that forms the basis for FDA approval. Motivation to combine may be found in many different places and forms; it cannot be limited to those reasons the FDA sees fit to consider in approving drug applications.

The CAFC also concluded that the district court erred by over-relying on the recognized unpredictability in the formulation carts.  While unpredictablity is also relevant to the obviousness inquiry, it can be overcome simply by establishing that there was a reasonable probability of success.  Furthermore, Allergan's challenges in developing its commercial COMBIGAN product were not particularly probative of the obviousness inquiry because the relevant inquiry is whether a person of ordinary skill in the art would have a reasonable expectation of success in developing the claimed invention, not COMBIGAN (which contains many elements in addition to those embodied in the claims). 

In addition, the Federal Circuit concluded that the district court's factual findings on teaching away were insufficient to overcome the motivation provided by DeSantis and that the secondary considerations of nonobviousness did not weigh heavily in this analysis. 

Claim 4 of the '149 patent – nonobvious: While the full panel agreed on the obviousness of the '463 claims, it split over claim 4 of the '149 patent. Claim 4 states:

4. A method of reducing the number of daily topical ophthalmic doses of brimondine administered topically to an eye of a person in need thereof for the treatment of glaucoma or ocular hypertension from 3 to 2 times a day without loss of efficacy, wherein the concentration of brimonidine is 0.2% by weight, said method comprising administering said 0.2% brimonidine by weight and 0.5% timolol by weight in a single composition.

The underlined language is essentially the same as claim 1 of the '463 patent.  Central to the majority's conclusions was thus its treatment of the italicised language as a claim limitation: even though the creation of a single composition of 0.2% brimonidine by weight and 0.5% timolol by weight was obvious, administering it twice a day instead of three times a day without loss of efficacy was not.

The majority reached this because it was understood at the time of the invention that when brimonidine is dosed twice per day as opposed three times per day there is a loss of efficacy in the afternoon (the "afternoon trough") and Sandoz did not identify any "evidence in the prior art that would allow us to conclude that the addition of timolol to brimonidine dosed twice per day would eliminate the afternoon trough issue."   Slip Op. at 13.  Furthermore, even though it was "true that the prior art shows concomitant administration of brimonidine and timolol was dosed twice per day," that was insufficient to establish the obviousness of claim 4 because "this art does not show that there was no loss of efficacy associated with that treatment, let alone an elimination of the afternoon trough."  Id. at 14.

Judge Dyk's dissent:   Writing in dissent, Judge Dyk would have found Claim 4 invalid.  Judge Dyk's disagreement highlights the issue of whether a claim can nonobvious if it is drawn to an unknown – but inherent – property of an obvious invention.  "While a new and nonobvious method of using an existing (or obvious) composition may itself be patentable, [] a newly-discovered result or property of an existing (or obvious) method of use is not patentable."  Slip Op. at 18 (internal citations omitted).

In Judge Dyk's view, claim 4 includes only a single limitation (in this case, a step): "applying a fixed combination of 0.2% brimonidine and 0.5% timolol twice a day."  Given the prior art, [t]he method of applying a fixed combination of 0.2% brimonidine and 0.5% timolol twice a day would therefore have been obvious over the prior art." Id. at 19. 

This did not end the nonobviousness inquiry for the majority, however.  "The majority’s outcome appears to rest, therefore, on the notion that claim 4 was not obvious because it claims the result of twice-a-day dosing—avoiding “a loss of efficacy in the afternoon.”  Id., quoting Maj. Op. 13.  This is not a limitation: "[a]voiding a “loss of efficacy” is not a separate step, but rather a result of the claimed method. []. We should recognize in this case, as we did in Bristol-Myers Squibb, that '[n]ewly discovered results of known processes directed to the same purpose are not patentable.' Bristol-Myers Squibb, 246 F.3d at 1376."  Slip Op. at 19 (internal citations omitted).  

Consequences: It's worth noting that even though it prevailed in establishing the obviousness of the asserted claims of the '463 patent, Sandoz still cannot market its generic version of COMBIGAN: "The ’258, ’976, and ’149 patents each expire on April 19, 2022. Because we concludd that claim 4 of the ’149 patent is not invalid, the Appellants will be unable to enter the market until that date. Accordingly, we find it unnecessary to address the claims of the ’258 and ’976 patents."  Slip Op. at 15.

The Federal Circuit’s New Obviousness Jurisprudence: An Empirical Study

Obviousness, Patent,

By Jason Rantanen

[Download the draft article]

Obviousness remains one of the primary issues raised in patent cases.  A few weeks ago, Dennis noted that "the vast majority of BPAI/PTAB decisions focus on the question of obviousness,"  and 5 of the 11 opinions involving utility patents issued by the Federal Circuit this past month addressed obviousness.  Many of these cases revolve around application of the Supreme Court's decision in KSR v. Teleflex, and reflect disagreements over the interpretation of the Court's opinion.   

This article presents the results of an empirical examination of the Federal Circuit's obviousness jurisprudence over a period of fifteen years, asking whether the Federal Circuit really changed its behavior as a result of KSR.  In systematically examining the court's opinions, I found the following:

  • Following KSR the Federal Circuit has become substantially less favorable to patentees on the issue of obviousness. 
  • The Federal Circuit’s ubiquitous pre-KSR requirement that patent challengers identify a “teaching, suggestion, or motivation” (“TSM”) to combine or modify the prior art has largely disappeared, at least in formal terms.
  • Although the concept underlying TSM has endured, in the form of a “reason to combine” requirement, the post-KSR form of that requirement differs substantially from its pre-KSR incarnation.
  • The Federal Circuit now routinely relies on language from KSR that “[a] court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions”  and the use of “common sense” to find combinations and modifications of the prior art to be obvious.
Although there may be some disagreement within the court, taken as a whole this study provides strong evidence that the Federal Circuit has both changed what it says and does when reviewing appeals involving the issue of obviousness. The magnitude of some of my findings was particularly surprising: for example, in the five years after KSR the Federal Circuit affirmed the PTO on the issue of obviousness 91% of the time (94 out of 103 times).
 
Over the next few weeks I'll be posting some of my findings that didn't make it into the article. 

How [Not] to Fight PTAB Obviousness Decisions

Obviousness, Patent, , ,

By Dennis Crouch

In re Chevalier (Fed. Cir. 2013) (nonprecedential) (Patent Application Ser. No. 11/407,778)

In a non-precedential but instructive opinion, the Federal Circuit has affirmed the USPTO's obviousness rejection of L'Air Liquide's application covering devices used to form gas-liquid dispersions. The Board rejected claim 1 as obvious, over a combination two prior art references – finding that it "would have been obvious to one skilled in the art to modify the Kwak device in view of the teachings of Howk."

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The difficulty with appealing PTAB decisions is that conclusions of fact made by the USPTO's appellate board are reviewed for substantial evidence. In order to win an appeal on a factual question, the patent applicant must go quite a bit further than simply proving that the PTAB's decision was wrong. Rather, the PTAB decision will only be overturned if not based on "more than a mere scintilla" of evidence. Restated, the question is whether the factual conclusion is based upon "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." "[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607 (1966).

This case represent the most frequent form of PTAB decision – that the applied-for patent claim is unpatentable as obvious over a combination of references. The ultimate question of obviousness is a question of law (reviewed de novo on appeal). However, that ultimate conclusion is based upon a set of factual underpinnings as explained by Graham v. Deere. The Federal Circuit has also held that "[t]he presence or absence of a motivation to combine references in an obviousness determination is a pure question of fact." In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000).

= = = = =

Chevalier challenged the combination of references – arguing that the combination of Kwak and Howk would be inoperable. Apparently Chevalier took the drawings from Kwak and Howk and unsuccessfully tried to jam them together. The Federal Circuit saw that process as "misapprehend[ing] the nature of the obviousness inquiry."

The obviousness inquiry does not ask "whether the references could be physically combined but whether the claimed inventions are rendered obvious by the teachings of the prior art as a whole." In re Etter, 756 F.2d 852 (Fed. Cir. 1985) (en banc); see also In re Keller, 642 F.2d 413 (CCPA 1981) (stating "[t]he test for obviousness is not whether the features of a secondary reference may be bodily incorporated into the structure of the primary reference"). Rather, in a case such as this where each of the elements of the claim are known to the art, the obviousness inquiry requires a finding that the combination of known elements was obvious to a person with ordinary skill in the art.

Here, each of the elements of the claim is taught by Kwak with the exception that the Kwak deflector is not attached to the drive shaft. This deficiency in Kwak is supplemented by Howk, which teaches a deflector attached to the drive shaft. The examiner found, and the Board affirmed, that one of ordinary skill would be motivated to modify Kwak in view of Howk because the modification "would facilitate a more rapid and more complete conversion from axial flow to radial flow of the liquid exiting from the bottom of the device." Ex Parte Gilbert Chevalier, 2011 WL 6747404 (B.P.A.I. Dec. 21, 2011). Chevalier does not challenge this finding. Accordingly, we find no error in the Board's determination that Kwak and Howk could be combined to achieve the claimed invention, nor do we find any error in the Board's determination that one of ordinary skill would be motivated to combine these references to achieve an aeration device that more rapidly and more completely converts axial flow to radial flow in the gas-liquid mixture.

The appellate panel then moved to KSR v. Teleflex to bolster its decision:

Our conclusion is strengthened by Chevalier's admission that the deflectors of Kwak and Howk are "recognized equivalents performing the same function of converting axial flow to radial flow." Appellant's Br. 9. The Supreme Court stated in KSR that "when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result." KSR. Here, the claimed invention merely substitutes the deflector of Howk, which is attached to the drive shaft, for the deflector of Kwak, which is attached to the floor of the basin. This substitution achieved only the predictable result of converting the axial flow of the gas-liquid mixture to radial flow.

Rejection affirmed

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The problem with the appeal here is that the appellate arguments are essentially a repeat of the lawyerly discussion of facts made to the examiner and PTAB. When those do not work at the PTO, they are highly unlikely to work on appeal to the Federal Circuit. (No factual affidavits were submitted in the case at the PTO). If Air Liquide had wanted to win the case, they would have been better served to hire expert witnesses to provide testimony either as affidavits to the PTAB or else bring forth that evidence in a civil action. Of course, that approach is likely more expensive and raises a greater potential of inequitable conduct charges down the line – especially in cases like these where other members of the patent family have already issued.

Transocean v. Maersk, Part II: Secondary Indicia of Nonobviousness Outweigh Prima Facie Case of Obviousness

Obviousness, Patent, , , , , ,

Guest post by Professor Lucas Osborn, Campbell University School of Law.  Before joining the academy in 2009, Professor Osborn worked on the Transocean case while at Fulbright & Jaworski, which represented Transocean.

Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc. (Fed. Cir. 2012)

Panel: Prost, Wallach, Moore (author)

This is the second Federal Circuit opinion in this litigation.  Jason Rantanen wrote about the first opinion in 2010.  The patented technology involves offshore deepwater drilling vessels have "dual activity" capability, which is roughly a vessel with two advancing stations that can cooperate together to drill and finish a single oil well at the ocean floor.  The technology decreases the time it takes to drill and complete an oil well compared to the prior art.  Since offshore drilling rigs rent for around $500,000 a day, every time savings counts.  In Transocean I, the Federal Circuit overturned the district court's summary judgment finding of obviousness, noting that although Maersk provided prior art that made a prima facie case of obviousness, the summary judgment was improper in view of Transocean's significant secondary indicia of nonobviousness.  On remand, the trial jury found Transocean's patents were not obvious and awarded Transocean $15,000,000 in damages.  The district court granted Maersk's motion for JMOL notwithstanding the jury's verdict.

Obviousness – Secondary Considerations and Weighing the Strength of the Prima Facie Case

In Transocean I, the Federal Circuit found Maersk had made a prima facie case of obviousness based on two prior art references, and thus the remand was focused on secondary indicia of nonovbiousness.  On remand, the parties fought over whether the jury could consider the two prior art references in addition to the secondary indicia evidence.  Transocean, apparently believing the prima facie case was weak, wanted the jury to consider the two prior art references for two purposes: (1) to determine whether the references taught each limitation of the claims and provided a motivation to combine, and (2) to consider the strength of the prima facie case.  Maersk opposed both, insisting that the only issue was the secondary indicia of non-obviousness.  The district court allowed the jury to review the prior art references for both purposes.  The Transocean II panel said it was error to allow the jury to reconsider whether the references taught each limitation of the claims and provided a motivation to combine: because that issue was decided in Transocean I, it was the "law of the case."  On the other hand, the court held it was not error to allow the jury to weigh the strength of the prima facie case together with the objective evidence of nonobviousness.

This presents a nice strategy for patentees to (essentially) re-litigate the prima facie obviousness determination.  While the jury technically does not get to decide whether a prima facie case of obviousness exists, it might be difficult for jurors to avoid forming their own opinion about the prima facie obviousness issue if it is allowed to learn about the prior art in detail. 

On the ultimate issue of nonobviousness, the court reinstated the jury verdict as supported by substantial evidence.  The evidence of nonobviousness included evidence of commercial success (including customers willing to pay a premium or even requiring rigs with the patented features), industry praise and unexpected results, copying (including by Maersk itself), industry skepticism, licensing, and long-felt but unsolved need.  The court concluded that "Few cases present such extensive objective evidence of nonobviousness, and thus we have rarely held that objective evidence is sufficient to overcome a prima facie case of obviousness. . . . This, however, is precisely the sort of case where the objective evidence establishes that an invention appearing to have been obvious in light of the prior art was not."

The panel also held that substantial evidence supported the jury's finding of enablement. 

Infringement and Damages – Option to Modify to Avoid Infringement

The court also reiterated its Transocean I holding that Maersk may have infringed even though its original contract for "sale" of the rig contained an option to modify the rig before delivery if any patent infringement was likely.  The jury found that Maersk committed infringement when it "offered to sell" and "sold" its rig to Statoil.  The contract evidencing the sale/offer expressly indicated that Maersk could modify the final rig design based on the outcome of then-pending district court litigation between Transocean and a third party based on the same patents.  Before actually delivering the rig, Maersk modified it to avoid infringement.  But the Federal Circuit reiterated that the option to modify and subsequent modification could not save Maersk.  The jury found that the specifications of the rig offered and sold met all the claim limitations.  Post-offer/sale modifications did not matter even though they occurred before actual delivery.

Moving to damages, the panel reinstated the jury's award, but it was sympathetic to Maersk's apparent good intentions to avoid infringement.  The court stated, "We are sympathetic to Maersk's arguments. It offered drilling services which would use an infringing drill, but expressly reserved the right to modify the drill to avoid infringement. It did then modify the drill prior to delivery to avoid infringement – hence never actually using an infringing dual-activity drill."  Nevertheless, the court held that the $15,000,000 reasonable royalty verdict was supported by substantial evidence. 

What can defendants take away from this?  A contract with an option to modify the product will not avoid infringement.  It would seem defendants in situations like Maersk's (i.e., watching a patent to see if it issues or is held valid) should contract not for an "option" to modify, but for a mandatory modification to avoid infringement upon the triggering event (patent issuance or litigation upholding the patent's validity).

The Ignored Issue – When is a "Lease" a "Sale" Under Section 271?

As in Transocean I, the court did not reach a potentially dispositive issue that the parties strongly contested at times in the litigation.  Section 271(a) provides that "sales" and "offers to sell" can be acts of infringement.  Here, however, Maersk did not offer to sell or sell its drilling rig.  Rather, it "leased" and offered to "lease" its rig to a third party.  While previous cases have found that some leases can be tantamount to a sale (and thus infringe under 271), those cases primarily involved the transfer of property indefinitely or for its entire useful life (think of your typically software "license").  See Minton v. Nat'I Ass'n. of Secs. Dealers, Inc., 336 F.3d 1373, 1378 (Fed. Cir. 2003).  This case presented a closer issue:  Here, Maersk argued that it (1) the lease did not last for the entire useful life of the drilling rig, and (2) the contract was for the provision of drilling services and at all time Maersk maintained possession of the rig.  The court ignored this issue and, as it did in Transocean I, referred to the transaction as a "sale" without comment.   

From an economic perspective, "sales" and "leases" would seem to present the same harm to the patentee.  On the other hand, the statute only mentions sales, not leases.  For whatever reason, the Federal Circuit didn't want to touch this issue.  Maybe we will have to wait for Transocean III to know the answer?

Who Decides Obviousness: Judge or Jury?

Obviousness, Patent, , ,

By Dennis Crouch

Kinetic Concepts and Wake Forest University v. Smith & Nephew (Fed. Cir. 2012)

Wake Forest’s asserted patents cover a medical technique that uses suction to close a gaping wound.  In certain situations, the suction method – also called Negative Pressure Wound Therapy – is apparently better than stitches or – my personal favorite – super glue.  Smith & Nephew’s product has become popular – thus the lawsuit. My wife is an MD, so my usual wound therapy involves me saying “go see your momma.”

The issue in the Kinetic appeal involves the question of obviousness and whether the ultimate question of obviousness should be decided by a judge or by the jury.  The Supreme Court has repeatedly stated that obviousness is a question of law based upon a set of underlying facts.  However, most district court judges allow the jury to decide the legal question of obvious. Further, few judges pose interrogatory questions to the jury regarding the factual underpinnings of their legal determination.

Here, S&N proposed that the jury only be asked to resolve the disputed questions of fact outlined in the Supreme Court’s landmark 1966 decision Graham v. John Deere — questions such as the level of skill in the art and the scope and content of the prior art.  Under S&N’s proposal, the judge would then take those answers and form a conclusion on the ultimate legal question of obviousness.  The patentees responsive brief identified this process as “one of the worst suggestions of all time.” Here, the district court took a somewhat middle ground – deciding to give the legal issue to the jury, but also ask the jury to identify the underlying factual Graham factors.  In addition, the district court indicated that it would see the jury’s obviousness conclusion “as advisory.”  

The court wanted some factual guidance from the jury, but was also wary of asking the jury to write its response in narrative form. (Why?) In the end, the jury was asked several yes/no questions about the scope of the prior art; the differences between the prior art and the claimed invention; and whether secondary indicia of non-obviousness existed. After eight days of deliberation, the jury returned its verdict. Samples from the verdict form are shown below.

 

In its verdict, the jury concluded that the defendant had failed to prove the asserted claims to be obvious.

On JMOL, the district court rejected the jury verdict and held instead that the differences between the prior art and the claimed invention were so minimal as to be obvious to anyone of skill in the art. This holding thus left the asserted claims invalid. On appeal, the Federal Circuit has reinstated the jury verdict upholding the patent and held that the “district court committed error by failing to defer to the jury’s factual findings and granting JMOL on obviousness.” Professor Jason Rantanen wrote on this earlier:

Wake Forest, the patent holder, appealed a district court grant of JMOL of invalidity for obviousness of a claimed invention for treating difficult-to-heal wounds by applying suction (negative pressure). The CAFC reversed, holding that (1) the jury’s “advisory” opinion on the ultimate issue obviousness gave rise to implied findings of facts that the district court was required to accept provided that they were supported by substantial evidence, despite the presence of special interrogatories on the verdict form; (2) the jury’s implied findings of facts on the Graham factors were supported by substantial evidence; and (3) the ultimate conclusion of obviousness was that the claims were not obvious.

In arriving at the ultimate (legal) conclusion of nonobvious, the Federal Circuit focused its discussion on the lack of a reason to combine the prior art references (itself a factual finding), referencing concerns about hindsight reconstruction. In a statement suggesting a technology-based limitation on the use of common sense, the court held that “although expert testimony regarding motivation to combine is not always required, the technology at issue here is not the type of technology where common sense would provide the motivation to combine these references.”

The court’s usual approach to jury obviousness decisions typically begins with the jury’s ultimate conclusion of obviousness/nonobviousness and then works back to the factual determinations necessary to reach that conclusion. In the absence of a special verdict spelling out the factual determinations, the court presumes that the jury made those necessary factual determinations and will affirm the jury verdict so long as those facts were supported by substantial evidence at the trial. In Kinetic, there was a special verdict where the jury particularly identified some of its factual conclusions. However, even here, there were a number of factual determinations necessary to reach the nonobviousness verdict – and those are typically implied into the jury verdict. The basic conclusion of the Federal Circuit in this case was that Smith & Nephew’s obviousness argument was – at base – an attempt to challenge those underlying assumed factual determinations and, that challenge must fail because those determinations were supported by substantial evidence presented at trial.

Smith & Nephew challenged this working-back approach as wrong on (at least) two levels. First, since obviousness is a conclusion of law, the adjudged infringer argued that it couldn’t be the basis for presuming particular factual conclusions that were not expressly decided by the jury. This is even further bolstered by the fact that the district court judge identified the jury’s conclusion on obviousness as ‘advisory.’ The appellate court rejected those arguments by relying on its own precedent supporting the working-back approach and by determining that the district court’s reference to the ‘advisory’ nature of the jury verdict had no meaning.

The court went on to specifically indicate that it is proper to submit legal arguments to a jury:

[I]t is neither error nor dangerous to justice to submit legal issues to juries, the submission being accompanied by appropriate instructions on the law from the trial judge. The rules relating to interrogatories, jury instructions, motions for directed verdict, JNOV, and new trial, and the rules governing appeals following jury trials, are fully adequate to provide for interposition of the judge as guardian of the law at the proper point and when necessary. There is no question that the judge must remain the ultimate arbiter on the question of obviousness. He or she exercises that role first in exercising the judge’s duty of giving proper instructions on the law to the jury before it considers its verdict. The judge exercises control on the question again when presented with a motion for JNOV or new trial. In no sense need the judge abdicate the guardianship role.

R.R. Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506 (Fed. Cir. 1984).

En Banc Rehearing: Now, Smith & Nephew is preparing to ask the Court of Appeals for the Federal Circuit to rehear the case en banc asking the Federal Circuit to give meaning to the legal nature of an obviousness conclusion and ensure that an accused infringer has a right to an independent determination by a judge on the ultimate question of obviousness.

Notes

Amkor v. ITC

Patent, , , ,

By Jason Rantanen

Amkor Technology, Inc. v. International Trade Commission (Fed. Cir. 2012) Download 10-1550
Panel: Newman, Plager, and Linn (author)

Although soon to be eliminated as prior art for new patents, 35 U.S.C. § 102(g) will continue to be a potentially important category of prior art for the near future as pre-AIA patents will remain the prevailing type of patent in infringement suits for at least the next decade.  In Amkor, the Federal Circuit answered an important question about 102(g): whether an oral disclosure of an invention to the United States is sufficient to constitute prior art.  It answered in the affirmative, with a key caveat.

The version of 102(g) involved in this appeal states that:

A person shall be entitled to a patent unless:

…

(g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes . . . that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. . . .

35 U.S.C. § 102(g) (2006) (emphasis added). The appeal turned on the interpretation of "made in this country": specifically, whether it encompassed an oral disclosure to a person in the United States of an invention conceived of abroad.

In concluding that an oral communication was sufficient, the CAFC issued several notable holdings.  First, it extended the holding in Scott v. Koyama, 281 F.3d 1243 (Fed. Cir. 2001), that interpreted a previous version of 102(g) to allow the inventor of an invention of foreign origin to "rely on the date that the invention was disclosed in the United States as a conception date for priority purposes" to apply to the current version of 102(g)(2).

Second, the CAFC held that an oral communication could be a sufficient disclosure for 102(g) purposes.  "While this court’s limited precedent on this issue establishes that writings can satisfy the full domestic disclosure requirement, the cases do not establish any per se requirement that such disclosure must be in writing."  Slip Op. at 12.  However, the "content of the domestic disclosure must be specific enough to encompass the "complete and operative invention…and an inventor's oral testimony to this extent is a question of proof."  Slip Op. at 13 (emphasis in original). Thus, corroboration of the testimony is necessary. 

The CAFC did not reach the issue of corroboration of the specificity of the disclosure, instead rejecting the accused infringer's argument based on the burden of persuasion and evidence necessary to invalidate an issued patent.  The accused infringer could only show a range of dates of possible U.S. disclosure that overlapped with the patent holder's possible conception dates.  "Such a showing, at best, establishes that the ASAT inventor might have conceived of the invention first. Evidence establishing that there might have been a prior conception is not sufficient to meet the clear and convincing burden needed to invalidate a patent."  Slip Op. at 16 (emphasis in original).

Obviousness: The court also affirmed the Commission's claim constructions and rejected anticipation and obviousness arguments based on another prior art reference.  In reaching this conclusion, the court pointed to a lack of any evidence of a motivation to combine or reason to modify the prior art:

Because the fused lead attached to the die pad in JP-456 prevents the lip from extending “fully around the circumference of a die pad” or “fully around the die pad” as required by the claims, Carsem was required to present evidence that one of ordinary skill in the art at the time of the invention would have been motivated or found reason to remove the fused lead from the JP-456 reference, or that common sense would have led one of skill in the art to remove the fused lead based on a known problem, design need, or market pressure. KSR Int’l v. Teleflex, 550 U.S. 398, 418-20 (2007).

Slip Op. at 21.  While this language could be interpreted as limiting "common sense" to the three specific scenarios identified in KSR v. Teleflex, a better interpretation in my view is that Carsem simply failed to provide any explanation as to why a person of ordinary skill in the art would have modified the prior art, including the three specified examples.  Anything more rigid would be inconsistent with the flexible approach to obviousness mandated by KSR.

Recent Federal Circuit Nonobviousness Opinions: Kinetic Concepts

Obviousness, Patent, ,

By Jason Rantanen

Kinetic Concepts, Inc. v. Smith & Nephew, Inc. (Fed. Cir. 2012)  Panel: Bryson, Dyk (concurring in the result), O'Malley (author) Download 11-1105

Dennis will be writing about the advisory jury issue in Kinetic Concepts in more detail, so I'll provide only a brief summary here.  Wake Forest, the patent holder, appealed a district court grant of JMOL of invalidity for obviousness of a claimed invention for treating difficult-to-heal wounds by applying suction (negative pressure).  The CAFC reversed, holding that (1) the jury's "advisory" opinion on the ultimate issue obviousness gave rise to implied findings of facts that the district court was required to accept provided that they were supported by substantial evidence, despite the presence of special interrogatories on the verdict form; (2) the jury's implied findings of facts on the Graham factors were supported by substantial evidence; and (3) the ultimate conclusion of obviousness was that the claims were not obvious. 

In arriving at the ultimate (legal) conclusion of nonobvious, the Federal Circuit focused its discussion on the lack of a reason to combine the prior art references (itself a factual finding), referencing concerns about hindsight reconstruction.  In a statement suggesting a technology-based limitation on the use of common sense, the court held that "although expert testimony regarding motivation to combine is not always required, the technology at issue here is not the type of technology where common sense would provide the motivation to combine these references."  Slip Op. at 45.

Sciele v. Lupin: The Presumption of Validity Does Not Change

Patent,

By Jason Rantanen

Sciele Pharma Inc. v. Andrx Corporation (Fed. Cir. 2012) Download 12-1228
Panel: Moore (author), Lourie, Prost

Lupin sought permission to market a generic version of Fortamet, an extended-release tablet of metaformin hydrochloride.  In response, Shionogi filed a lawsuit asserting infringement of Patent No. 6,866,866, thus triggering a 30-month stay of FDA approval.  The stay expired while the litigation was still ongoing and Lupin attempted an at risk launch of its generic product.  Shionogi obtained a preliminary injunction to prevent Lupin from selling its product that Lupin appealed.

This opinion is noteworthy largely for its discussion of the presumption of validity.  Lupin argued that the presumption of validity should not apply because of errors committed by the patent office during prosecution: the patent office erroneously issued the patent with claims that had been both rejected by the examiner and cancelled by the applicant.  Shionogi argued that there should be a heightened presumption of validity because the prior art references relied on by Lupin were before the PTO during prosecution. 

The Federal Circuit rejected both arguments, although it acknowledged that the specific circumstances could carry some weight in the overall determination.  "Whether a reference was previously considered by the PTO, the burden of proof is the same: clear and convincing evidence of invalidity…The burden does not suddenly change to some-thing higher–“extremely clear and convincing evidence” or “crystal clear and convincing evidence”–simply because the prior art references were considered by the PTO."  Slip Op. at 10-11.  However, the fact that references were previously before the PTO could impact the weight the court or jury assigns to the evidence: "For example, it could be reasonable to give more weight to new arguments or references that were not explicitly considered by the PTO when determining whether a defendant met its burden of providing clear and convincing evidence of invalidity."  Id.

Likewise, while the court rejected the argument that the presumption of validity did not apply because of the PTO's errors during prosecution, it allowed those errors to be considered: "We can take it all into account, including both the fact that the Cheng and Timmins references were before the Patent Office and the bizarre circumstances surrounding the issuance of the claims in this patent."  Id. at 12.

Against this backdrop, the CAFC concluded that the district court's obviousness analysis was flawed because it overstated the fact that the references were not before the PTO in KSR and incorrectly rejected Lupin's substantive arguments on disclosure and motivation to combine.

Although the standard for determining whether the patentholder has demonstrated a likelihood of success on the merits is a significant issue in some preliminary injunction appeals, this does not appear to be one where the outcome would have turned out differently if the CAFC had applied a standard other than whether the applicant raised a substantial question as to validity.'  The Federal Circuit judges were clearly persuaded that there was a strong obviousness challenge to the patent. 

Substantial Evidence on Appeal

Patent,

by Dennis Crouch

In re Hyon (Fed Cir. 2012)

Hyon’s patent covers a method for producing a high molecular weight polyethylene to be used as a prosthesis.  In a broadening reissue application, Hyon added several claims.  Those claims were rejected as obvious by the examiner and the Board of Patent Appeals (BPAI). In a split opinion, the Federal Circuit has now affirmed those rejections. 

The question on appeal was whether the PTO properly combined the two identified prior art references in forming an obviousness rejection.  Because this issue is considered a factual question, the PTO decision making is given deference and only overturned if the decision lacks substantial evidentiary support.  This "substantial evidence" standard is quite low and requires the Federal Circuit to affirm even when the panel might have reached a different conclusion in a de novo review.

The “existence of a reason for a person of ordinary skill to combine references” is a question of fact that we review for substantial evidence. Because the Board’s findings concerning motivation to combine are supported by substantial evidence, we affirm.

The dissent by Judge Newman argues that the one skilled in the art would not have been motivated to combine the two references as suggested by the PTO. Interestingly, Judge Newman does not mention the substantial evidence standard while the Bryson majority repeats the standard six times in the ten page opinion.

Appellate attorneys understand the importance of the standard of review.  This case highlights this reality and suggests that applicants may be better served to include arguments directed to the ultimate question of obviousness (de novo review) rather than merely challenging the PTO's factual findings.  Although perhaps cost prohibitive, challenging PTO factual findings are best pursued in a civil action.

Celsis: Federal Circuit Upholds Preliminary Injunction over Dissent

Patent, , ,

by Dennis Crouch

Celsis In Vitro v. CellzDirect and Invitrogen (Fed. Cir. 2012)

This case is important because it provides an important incremental analysis of when a validity challenge is sufficiently substantial to lead a court to reject a motion for preliminary injunctive relief.

Majority opinion by Chief Judge Rader (author) and Judge Prost. Dissent by Senior Judge Gajarsa.

Celsis owns Patent No. 7,604,929 — claiming as its invention a method and system of freezing and preserving human liver cells using multi-cryopreservation.  In a split opinion, the Federal Circuit affirmed the lower court's preliminary injunction order stopping the defendants from practicing the invention. 

When appealed, a preliminary injunction is reviewed for abuse of discretion that requires clear error, either in “judgment in weighing relevant factors” or in the exercise of “discretion based upon an error of law.”  A decision on preliminary relief is immediately appealable. 

Dissent on Substantial Question of Obviousness: Writing in dissent, Judge Gajarsa argued that this case is not amenable to the “extraordinary and drastic remedy of a preliminary injunction” because the defendants “raised a substantial question as to the validity” of the asserted patent.  Focusing on the burden of proof, Judge Gajarsa noted that a preponderance of the evidence is sufficient to prove the “substantial question” and that “it is unnecessary to prove a substantial question of invalidity by clear and convincing evidence.”

The the key dispute between the majority and dissent was on the issue of obviousness.  Judge Gajarsa wrote:

In my judgment, the district court abused its discretion in finding that Celsis had demonstrated a likelihood of success on the merits because the claimed invention is nothing more than a repetition of steps already known in the art.  Moreover, the majority perpetuates this error, and in so doing applies the wrong standard for obviousness and rationalizes the issuance of the preliminary injunction because it would prevent competition with a patented process which may be proven to be invalid. 

In particular, Judge Gajarsa argued that the district court and majority improperly rejected the obviousness argument by seeking some teaching or suggestion (TSM) in the prior art that would lead someone to attempt to combine the known elements of the claimed invention.

In particular, the majority wrote that the key prior art does not disclose “micro-cryopreservation” as claimed nor does it suggest this step as a solution to problems known in the art.  Chief Judge Rader wrote “This court has not seen [the Defendants] identify any teaching, suggestion, or motivation in the [prior art] that multiple rounds of freezing would somehow increase rather than decrease cell viability.”  The majority agreed with the lower court that the obviousness argument lacked credibility because "not a single one of that astonishingly large body of literature was devoted to the subject of multi-cryopreservation of hepatocytes."  Judge Gajarsa felt this fact was inconsequential because multi-cryopreservation simply involved repeating steps that were already known.  

DDC Comment: The TSM test for combining prior art was eliminated by the Supreme Court KSR v Teleflex in much the same way that the MOT test for patentable subject matter was eliminated in Bilski. In both cases, the strict tests remain probative, if inconclusive, tools.  However, in the context of a preliminary injunction a defendant's failure to provide a motivation to combine prior art may well be sufficient find a patent “likely nonobvious.” 

Although identified as a “factor”, the likelihood of success factor turns out to be a necessary element of a successful motion for preliminary relief.  In other words, if the plaintiff is unable to prove that it has a sufficient likelihood of success on the merits of the case then the district court will deny the preliminary injunction motion.  This case provides some assistance in determining when that threshold has been met.

Motivation versus Long Felt Need:  Chief Judge Rader is known for playing logical games with the secondary indicators of nonobviousness. Here, the accused infringers provided evidence of a “market need” for the solution and argued that those market forces would prompt the variation found in the patent.  That argument follows the statement in KSR that “market forces can prompt variations” of known design elements.  Judge Rader flipped the argument and instead noted that such market need is when “properly linked to the claimed invention, is actually probative of long felt need under objective criteria analysis and supportive of non-obviousness.”

Preliminary Injunction Standards: A preliminary injunction is decided on a four-factor test that is almost identical to the test outlined for permanent injunctions in eBay v. MercExchange.  Namely, a court must consider (1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships, and (4) public interest.  In the context of permanent relief, the likelihood of success on the merits is no longer a factor because permanent relief is only determined after the patentee wins on the merits. In eBay, the Supreme Court included an additional factor –  that monetary damages are insufficient.  However, that factor is likely wholly subsumed by the “irreparable harm” factor.

Here irreparable harm was shown by expert testimony and evidence of "price erosion, damage to ongoing customer relationships, loss of customer goodwill (e.g., when an effort is later made to restore the original price), and loss of business opportunities." And, the public interest factor is normally presumed to be met in patent cases because the public interest favors enforcement of valid patents.

Obviousness Decisions at the BPAI

Patent,

Everyone understands that KSR v. Teleflex changed the way that obviousness is treated at the US Patent Office. In that case, the Supreme Court encouraged examiners to rely upon common sense when determining whether a claimed invention is obvious and also eliminated some of the rules against combining various elements of the prior art to into a composite that renders the claimed invention obvious.

I wanted to take a look at how the BPAI is using the KSR decision in its obviousness cases. Using my set of 10,000 recent ex parte BPAI decisions (2009–2011), I looked at the set of decisions involving the question of obviousness and compared the decisions that cited KSR with those that did not cite the case. The results are not surprising. Decisions that cite to KSR are much more likely to affirm examiner rejections as compared with those that do not cite KSR. Namely, in obviousness cases that cite KSR, the examiner rejections are reversed only 15% of cases. In obviousness cases that do not cite KSR, the examiner rejections are reversed in 39% of cases.

 

Appeal Outcome 
 

Affirmed 

Affirmed in Part 

Reversed 

KSR Cite 

67% 

18% 

15% 

No KSR Cite 

47% 

13% 

39% 

The 10,000 case sample size makes these results easily statistically significant.

My take is that the BPAI is not selectively citing KSR but rather that applicants are less likely to win obviousness issues that relate to KSR issues. Thus, in Ex parte Ramchandani the BPAI cited KSR in rejecting the applicant’s argument “that the Examiner has not established a proper motivation to combine” the two cited references. And, in Ex parte Pickering the BPAI felt no need to cite KSR as it agreed with the applicant that the sintered silicon carbide found in the prior art was different from Pickering’s claimed chemical vapor deposited silicon carbide.

 

Wyers v. Master Lock

Obviousness, Patent, Patent Cases 2010, Prior Art, , ,

Is "obviousness" a question of law or fact?  The rote answer is that it's both: it's a question of law based on underlying findings of fact.  Drawing that line, however, can be tricky, especially when the jury issues a general verdict.  In addition to addressing this issue, the case discussed below is also noteworthy due to its commentary on KSR on the subject of  motivation to combine. 

Wyers v. Master Lock Co. (Fed. Cir. July 22, 2010)
Wyers involved three patents relating to trailer hitch locks.  Trailer hitch locks are mechanisms used to secure trailers to towing vehicles.  It was undisputed that the prior art disclosed the use of dumbbell-shaped locks for this purpose, so the case turned on the the patentee's modifications to these types of locks.  The following images illustrate the prior art:

Wyers 1 Wyers 2

Wyers' patents claimed dumbbell-shaped locks with two additional elements: a series of sleeves that could be placed over the center section (the "shank") in order to increase its diameter, and an external seal designed to keep dirt out of the locking mechanism.  The only issue before the jury was whether it was obvious to add these two elements to the prior art locks.

The jury concluded that it was not, and issued a general verdict of nonobviousness. After the district court denied Master Lock's motion for Judgment as a Matter of Law, Master Lock appealed. 

Opinion of the Court
Drawing heavily on KSR, the Federal Circuit concluded that the patents were obvious as a matter of law.  The court considered each of the factual questions before it: whether the art was analogous, whether there was sufficient motivation to combine the reference, and the secondary considerations of nonobvious, and concluded that none favored the patentee.

In reaching this conclusion, the Federal Circuit gave no deference to the jury.  On each issue of fact, the panel found that no evidence supported nonobviousness.  For example, when addressing the issue of whether the prior art was analogous, the court reasoned that it was "clearly within the same field of endeavor as the sleeve patents," and was pertinent as a matter of law.

Particularly interesting, however, were the panel's views on motivation to combine.  While recognizing this as an important aspect of the obviousness inquiry, the panel applied the "common sense" approach outlined in KSR:

"We conclude that it was a matter of common sense to combine the Down patent with the prior art barbell locks in order to arrive at the invention claimed in the ’115 and ’426 patents, and that one of ordinary skill in the art would have had a reasonable expectation of success in doing so."

Slip Op. at 23. Furthermore, "where all the limitations of the patent were present in the prior art references, and the invention was addressed to a 'known problem,' 'KSR … compels the grant of summary judgment ofobviousness.'"  Id. at 17.  Such an approach is particularly appropriate when the technology is "easily understandable." 

Finally, on the issue of secondary considerations, the court concluded that, even if Wyers had established the requisite nexus, it would have been insufficient:

Moreover, secondary considerations of nonobviousness—considered here by the district court—simply cannot overcome a strong prima facie case of obviousness.

Slip Op. at 28

Concurrence
Judge Linn concurred with the opinion, but wrote separately to warn parties of the dangers of general verdicts.  He noted that although the law permits general verdicts, verdicts involving special interrogatories are encouraged in the obviousness context due to the mixed question of law and fact.  He further noted that, while the court must presume that the jury resolved the underlying factual disputes in favor of the verdict winner when there are no special interrogatories,

"[b]ecause there is no way to determine from a general verdict on obviousness the specific findings of fact made by a jury on the factual questions underlying its verdict, the court in examining the first part of the obviousness question is left to infer whether substantial evidence existed from which the jury could have made the factual findings necessary to support the verdict. Here, the majority examined the record and after considering the factual inferences concluded that support was lacking and that the claims at issue would have been obvious as a matter of law."

Slip op., concurrence at 4-5.  In other words, when a general verdict is give, the Federal Circuit has to attempt to reconstruct the underlying findings of fact.  Here, it could not discern anything that might reasonably have been in dispute, and thus judgment as a matter of law was appropriate. 

Federal Circuit Affirms (Not) “Obvious to Try” Jury Instructions

Patent, , ,

Rentrop v. Spectranetics Corp. (Fed. Cir. 2008)

Dr. Rentrop is the chief of research at St. Vincent’s Hospital in NYC. For several years Rentrop used Spectranetics optical catheters to deliver LASER treatment. The Spectranetics catheters came in various tip diameters ranging from 1.4 mm to 2 mm. Finding those diameters too inflexible, Rentrop had the idea of using a 0.9 mm tip. Rentrop told Spectranetics of his idea and help them to create a prototype. Eventually Spectranetics obtained FDA approval and began marketing. In the meantime, the parties began to dispute over financial issues. Rentrop wanted a cut of the profits and so he filed for patent protection and eventually sued Spectranetics for infringement. The jury awarded $500,000 in damages.

On appeal, the Federal Circuit quickly affirmed. The most interesting legal issue of the case involves the pre-KSR jury instructions. The first part focused on the teaching-suggestion-motiviation test:

“In evaluating the scope and content of the prior art, you should keep in mind that there must have been some suggestion for a person skilled in the art to make the combination covered by the claims of the patent in issue in order for the claims to have been obvious. In other words, a claim in a patent is not obvious and invalid, simply because the claim combines elements that can all be found among the prior art references. It must have been a motivation or a suggestion to combine the limits in a manner disclosed by the patent.”

The Federal Circuit found this instruction proper – in context – because the instructions defined motivation as potentially arising “from common knowledge, or common sense of the person of ordinary skill in the art, without any specific hint or suggestion in a particular reference.”

Obvious to Try: The jury instruction on obviousness also included the statement that a “the test for obviousness is not whether or not it would have been obvious to try to make the invention.” The defendant argued that the instruction violates KSR. In KSR, the Supreme Court held that the Federal Circuit was in error to hold that a “patent claim cannot be proved obvious merely by showing that the combination of elements was obvious to try.” The Federal Circuit, however, was able to logically reconcile the two statements – noting that the jury instruction “does not imply that a showing that the specific combination of elements was obvious to try is insufficient to find obviousness.”

Notes:

  • Northern District of California Chief Judge Vaughn Walker authored the opinion while sitting by designation on the Federal Circuit.
  • Spectranetics recently filed for ex parte reexamination of two of Rentrop’s patents. [LINK]