Tag Archives: obviousness

In my view, Obviousness is the most fundamental of patent law doctrines, and certainly much of the work of patent attorneys is to convince patent examiners that the claims are not obvious.

Inconsistency Between Views of Two PTO Examiners Found Relevant to Obviousness Determination During Litigation

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PatentlyOImage043Syntex v. Apotex (Fed. Cir. 2005).

Apotex filed an ANDA to begin marketing a generic version of ACULAR, an ophthalmic NSAID protected by a patent owned by Syntex.  Based on the Section IV filing, Syntex filed suit against Apotex for patent infringement.

After a bench trial, the district court determined that the proposed generic infringed the claims of the ACULAR patent and that the patent was not invalid.

Regarding invalidity, the district court concluded that Syntex had overcome obviousness issues by showing that the prior art taught away from the use of the drug/surfactant for opthalmic uses and that such a use created “unexpected results.” In its decision, district court noted that because the prior art at issue had been before the examiner during prosecution, the burden of proving the challenged claims obvious “is particularly high” — and that Apotex had failed to meet this heightened burden. 

On appeal, the CAFC reversed — finding “clear error by the district court in several of the grounds that led it to conclude that the invention claimed by the claims in suit would not have been obvious.” 

Of the several grounds for reversal, the issues of examiner discrepancy, expert testimony, and commercial success may be the most interesting:

Examiner Discrepancies:

Two different PTO examiners worked on various portions of the asserted application and its parent applications and had seemingly inconsistent views regarding patentability of the application.  The CAFC found this relevant to the obviousness determination.

This statement contradicted the express finding of the initial PTO examiner that Syntex’s earlier data failed to show unexpected results. Whether the second examiner was aware of the earlier rejection of Syntex’s claims is unknown. But the relevance of the inconsistency between the views of two examiners is not insignificant.

Although we conclude . . . that Syntex did not commit inequitable conduct . . . we think the unvarnished view of the prosecution history shows some weakness in the conclusion that the patentee established unexpected results for the claimed surfactant.

Expert Testimony:

The Appellate Panel found that the district court erred by failing to examine Apotex’s expert testimony on the question of motivation to combine and unexpected results.

Commercial Success:

The district court relied heavily on the commercial success of ACULAR in its nonobviousness decision.  However, the CAFC requested that the lower court revisit this issue in light of the recent case of Merck v. Teva.

In Merck, the court found that commercial success of an FDA restricted product “has minimal probative value on the issue of obviousness. . . . Financial success is not significantly probative . . . because others were legally barred from commercially testing the [] ideas.”

Concurrence:

In a concurring opinion, Judge Prost disagreed with a portion of the majority opinion that made note of “inconsistency between the views of two examiners” who examined the asserted application and a parent application.

In general, I fail to see how the conduct of a patent applicant is relevant to an obviousness determination. Alleged misconduct at the PTO, in terms of either mischaracterizations or omissions, goes to the heart of an inequitable conduct inquiry but is simply irrelevant to an obviousness inquiry.

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Supreme Court: Patent Professors Support Tighter Obviousness Standard

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PatentlyOImage025_smallKSR International v. Teleflex (On Petition for Certiorari)

In January 2005, the CAFC decided Teleflex v. KSR — holding that there must be a suggestion or motivation to combining two or more references in an obviousness finding.  This “teaching-suggestion-motivation test” has been a stalwart of Federal BrauneisCircuit obviousness jurisprudence for twenty years.  During that time, the Supreme Court has not heard a single obviousness case.

KSR has petitioned the Supreme Court for a writ of Strandburgcertiorari — arguing that the Federal Circuit’s obviousness standard is too low.  In its petition, the KSR argues that the CAFC’s jurisprudence is inconsistent with the Supreme Court’s most recent obviousness decisions of Anderson’s-Black Rock (1969) Duffyand Sakraida (1976).  In Sakraida, the High Court held that a combination which only unites old elements with no change in their respective functions is precluded from patentability under 103(a).  Under the Sakraida standard, the Teleflex patent is arguably Kimpictureobvious.  Although patent cases are rarely heard by other circuit appellate courts, a circuit split remains between the CAFC and several other circuits on this issue.

ArchTwo amicus curiae briefs have been filed in support of the petition for certiorari. An element of both briefs is that written proof of obviousness should not be required to prove basic knowledge or common sense.

I. Brief of Twenty-Four Law Professors:

BagleyAn impressive group of law professors have banded together in support of KSR.  The professors argue that the CAFC has essentially ignored the idea of a person having ordinary skill in the Dabnejamart (PHOSITA) and simply consults the scope and content of the prior art references.  At best, the appellate court has relegated the PHOSITA to the role of a “reference librarian, assisting in locating appropriate prior art references but apparently incapable of applying them in light of his or her knowledge or skill.”  Dreyfussr

The brief notes that this case is a good one for cert: simple technologies, procedurally clean, and experienced counsel for both sides.

Farley_christineThe twenty-four professors include Robert Brauneis, Katherine Strandburg, Margo Bagley, James Bessen, Michael A. Carrier, Rochelle Cooper Dreyfuss, Christine Haight Farley, Cynthia M. Ho, Timothy R. Holbrook, Peter Jaszi, Jay P. Kesan, Mark A. GlunneyLemley, Glynn S. Lunney, Jr., Ronald J. Mann, Robert P. Merges, Kimberly A. Moore, Janice M. Mueller, Joseph Scott Miller, Craig A. Nard, Malla Pollack, Arti K. Rai, Pamela Samuelson, Joshua HoSarnoff, and John R. Thomas. Of course, John F. Duffy would be twenty-five, but he already signed on to the original KSR petition.

Holbrook_timothy_135w72dDownload the Professor’s Brief: KSR Amicus 24 Professors.pdf (276 KB).

II. Brief of the Progress & Freedom Foundation:

Jimdelong2004PFF’s brief focuses on the “growing unease about patent quality” as a justification for tightening the standards for obviousness.  According to the brief, a loose obviousness standard undermines the basic justification for the patent Jaszi_petersystem and encourages people to hamstring the system.

Download the PFF Brief: ProgressFreedomFoundation.pdf (206 KB)

MergesIII. FILES:

IV. Links:

  • Patently-O Prior Discussion of the CAFC decision.
  • European Attorney Axel Horns hopes that this case may spark a similar debate in Europe over the could/would approach of the EPO.[Article].
  • Ernest Miller has thrown his hat in support of the petition — although he just wants a nice precedential opinion. [Blink].

Nard_smPatentlyOImage041JoemillerKesanPatentlyOImage042SamuelsonSarnoffSolveigsingleton2004Mcarrier

V. Misc:

One question that I asked Professor Brauneis is whether increasing the obviousness standard would disproportionately affect small businesses and individual inventors who may be more likely to invent through by combining well known items in a novel fashion. In reply, Brauneis noted that while corporate researchers may have more resources to invent from whole-cloth, corporate law departments also have more resources to file dubious patent applications for strategic purposes. For Brauneis and the 24–professors, the bottom line is that “if the claim in the patent application describes something that would be obvious to a person having ordinary skill in the art, it’s bad policy to grant the patent.

For those interested in this issue, there is still time to file with the Court.

Online Inventor’s Forum

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The Patent Office has been hosting a regular on-line chat session between inventors and PTO expert examiners.  These sessions have been a great success, and the most recent session appears to have answered a number of interesting and fundamental questions.  The following are a few excerpts from the forum:

Q:What happens to a Provisional Patent Application after it has been abandoned?

A: The files are disposed of after one year from the filing date.

Q: Are there any restrictions from trademarking a product name that contains Spanish words?

A: The same laws and rules apply to marks in languages other than English. Other than those requirements, a non-English mark would have to be translated for the record.

Q: How long does a patent last?

A: Utility patent protection is approximately 20 years from the filing date of the application. Design patent protection is 14 years from the issue date.

Q: How do I know that my invention isn’t going to be stolen during the application process for a patent? Can I trust an attorney? Can I apply for a patent without an attorney? What are the risks when I do that?

A: All patent applications that have not been published are kept in confidence by USPTO personnel. An attorney in your employ must keep your confidences and secrets. You can apply for an application without an attorney, however, patents are legal documents and the use of a registered patent attorney/agent is strongly encouraged.

Q: Can I apply for a design and utility patent for the same product or is this overkill?

A: Yes, you can apply for both patents. A utility patent protects a new, useful, nonobvious and adequately discussed machine, manufacture, composition of matter, process, or improvement thereof. On the other hand, a design patent protects only the appearance of an article of manufacture, not the way the article functions or the materials of its manufacture. A better mousetrap could function (work) exactly like the mousetrap of old, but have a different appearance; it would then be appropriate for a design application. If, however, it had a new function in a way it trapped mice, it could also be appropriate for a utility application.

Link: Forum Transcript

Full Panel Denies Rehearing in Fosamax Patent Case

Patent, Patent Cases 2005,

Merck & Co. v. Teva Pharmaceuticals (Fed. Cir. 2005) (on petition for rehearing).

Merck & Co. owns the patent on the best-selling drug Fosamax.  Teva, a generic manufacturer lost an infringement case at the district court after the court found the patent valid and infringed.  In January 2005, the Court of Appeals for the Federal Circuit reversed the district court — vacating the lower court’s finding of validity and infringement. 

Merck, with the amicus support of PhRMA, subsequently filed a petition for rehearing en banc.  The CAFC has denied that the request, thus maintaining the panel decision. 

DISSENT: In a two-page dissent, Judge Lourie, supported by Chief Judge Michel and Judge Newman, argued that the panel decision erroneously concluded that commercial success was not probative to obviousness in this case and by linking commercial success with the failure of others.

Commercial success is a fact question, and, once it is established, as found here by the trial court, the only other question is whether the success is attributable to the claimed invention (“nexus”), rather than to other factors such as market power, advertising, demand for all products of a given type, a rising economy that “lifts all boats,” etc. It is not negatived by any inability of others to test various formulations because of the existence of another patent. Success is success. The panel’s rule is especially unsound in the context of an improvement patent, as here, because it holds in effect that commercial success for an improvement is irrelevant when a prior patent dominates the basic invention.

Commercial success is also independent of any “failure of others,” as that is another, separate secondary consideration.

Respectfully, the full court should have reheard the appeal to eliminate the confusion in the law that the panel opinion creates.

Interestingly, Judge Rader dissented in the three-judge panel opinion, but now agrees with the majority that the case should not be reheard.

The case will be remanded to the district court on April 28, 2005.

A REUTERS article indicates that Merck & Co. plans to petition the Supreme Court to hear an appeal from the CAFC decision.

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Case Questions CAFC’s Obviousness Jurisprudence

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PatentlyOImage025

KSR International v. Teleflex (On Petition for Certiorari)

In January 2005, the CAFC decided Teleflex v. KSR — holding that when combining two or more references in an obviousness finding, there must be a suggestion or motivation to combine the teachings.  This “teaching-suggestion-motivation test” has been a stalwart of Federal Circuit obviousness jurisprudence for twenty years.  During that time, the Supreme Court has not heard a single obviousness case.

Now, KSR has petitioned the Supreme Court for a writ of certiorari.  In its petition, the company makes a couple of interesting points that may push the High Court to accept the case:

  • In Anderson’s-Black Rock (1969) and Sakraida (1976), the Supreme Court held that “a combination which only unites old elements with no change in their respective functions” is precluded from patentability under 103(a).  Under the Sakraida standard, which remains law, the Teleflex patent is arguably obvious.
  • With the emergence of Holmes Group, circuit splits will become more of a possibility in patent law.  On this issue, the Federal Circuit has acknowledged the existence of a circuit split between itself and the Fifth Circuit.  KSR points out that the split extends to other circuits as well.  The other circuits have followed the Sakraisa standard while the CAFC sticks to its requirement of an explicit motivation to combine.

A consortium of five major corporations, including Microsoft, Cisco, and Hallmark have filed as amicus supporting the petition.  Their brief argues that the current structured test for obviousness is too easy a hurdle for patentees and that the formalities of the test undermines courts ability to truly determine whether an invention is obvious to one skilled in the art.

In addition, Teleflex has filed its opposition to the petition — arguing that (1) obviousness is well settled law and need not be revisited; (2) the CAFC’s test is consistent with Graham; and perhaps most importantly (3) this case does not hinge on the obviousness issue.

(more…)

Eli Lilly wins patent ruling on Zyprexa

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PatentlyOImage024Eli Lilly v. Zenith Goldline (N.D. Ill. 2005).

In a much anticipated decision, Judge Richard Young of the Southern District of Indiana has ruled that Eli Lilly’s patent covering the drug Zyprexa is valid, enforceable and infringed.  The patent is not scheduled to expire until 2011.

The well-written 224 page opinion reads like a biography of Patent No. 5,229,382, the Zyprexa patent.  In particular, the court details the prosecution history of the patent and provides a full analysis of the prior art references that the generic manufacturers cited against the patent.  In the end, court determined that the generics could not prove invalidity or unenforceability:  

Defendants have failed to prove by clear and convincing evidence that claims 1, 2, 3, 7, 8, and 15 of the ’382 patent are invalid as anticipated under 35 U.S.C. § 102, as obvious under 35 U.S.C. § 103, under the double patenting doctrine, or as barred by prior public use under 35 U.S.C. § 102. Defendants have further failed to prove by clear and convincing evidence that the ’382 patent is unenforceable for inequitable conduct.

The defendant generic manufacturers had stipulated that if the ’382 patent is valid and enforceable, then their actions constitute infringement. Thus, the court found that their ANDA submissions constituted an act of infringement. 

Antitrust: Court Should Not Consider Potential Patent Validity in Sherman Act Analysis

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PatentlyOImage013In re Ciprofloxacin Hydrochloride Antitrust Litigation (E.D.N.Y. March 31, 2005)

Bayer produces Cipro® (ciprofloxacin hydrochloride) and is assignee of U.S. Patent No. 4,670,444, which claims the active ingredient and its generic equivalents.

Hoping to produce a generic version, Barr Labs filed an ANDA requesting permission to produce the drug before the expiration of the patent — arguing that the patent was invalid and unenforceable. (Paragraph IV certification). Bayer then sued Barr for infringement.  The two companies eventually settled.  Under the settlement agreement Bayer paid Barr $398 million and Barr agreed to amend its ANDA to a Paragraph III certification, which would permit it to market the drug only after the patent expires.  The settlement agreement included an “out” for Barr in the case that the patent was subsequently declared invalid or unenforceable.

In the wake of the settlement, a class of buyers sued Bayer and Barr for antitrust violations under the Sherman Act, arguing that the exclusion-payment scheme is a form of anti-competitive conduct falling under Section 1 of the Act using a rule of reason analysis.  The district court, however, sided with Bayer, finding that there was no impermissible anticompetitive effect because the agreement did not extend beyond the “zone of exclusion” of the patent. 

Here, plaintiffs have failed to demonstrate anticompetitive effects in the market for ciprofloxacin because, although the Agreements undoubtedly restrained competition, they did not do so beyond the scope of the claims of the ‘444 Patent. The ‘444 Patent allows a zone of exclusion within the bounds of its claims.

Further, the court held that the “potential invalidity of the claims” could not be used to diminish the protection that the patent offers against Sherman Act claims.

This result is compelled by the presumption of validity Congress accorded patents and the destabilizing effect on patent law that a contrary decision would work. Any readjustment of the competing interests affected by exclusion payments is a matter better addressed by Congress than the courts.

Because the plaintiffs were unable to prove the first element in the rule of reason analysis (anticompetitive effect), defendants cannot be liable for the alleged antitrust violations.

Calvert Crary, a litigation analyst who writes the highly informative LitigationNotes sees this decision as falling in line with the March 8, 2005 11th Circuit decision in Schering-Plough v. FTC, but predicts that these decisions may result in a complete undermining of Hatch-Waxman.

[T]hese decisions, if broadly adopted, will decimate the statutory mechanisms of the Hatch-Waxman Act that remove barriers to price competition arising from invalid or inapplicable drug patents. (From Crary’s report on Kos Pharma v. Barr Labs).

< ?xml:namespace prefix ="" o />Mark Lemley is a law professor at Stanford, but he has also been quite involved with a number of patent appeals over the past several years.  In an e-mail, Professor Lemley argues that the Cipro court is “entirely wrong-headed” in this case.  In his view, this decision essentially creates a rule that allows obvious cartels regardless of the strength of the patent.

[The court] cites the 6th Circuit and [Schering-Plough v. FTC] for the proposition that we don’t want to enquire into patent validity in an antitrust case.  That’s true enough.  But those courts found the exclusion payment illegal without having to inquire into patent validity.  By rejecting the per se approach, and also rejecting any inquiry into the merits, the court has essentially created a rule of per se legality for a pretty obvious cartel.  No matter how weak the patent claim is, or how obviously the payment is a means of artificially maintaining a monopoly, under the court’s reasoning it will be permissible.  This is an abdication of antitrust responsibility.

In a recent paper, Lemley, along with Professors Herbert Hovenkamp and Mark Janis argue that “exclusion payments that exceed litigation costs should be deemed illegal per se.”  According to their analysis, there is “no legitimate reason for such payments, and the most likely reason . . . is anticompetitive.”  The three professors book, entitled IP and Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law is available at Amazon.com.

 

 

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