Obviousness Standard: Leveraging Latest PTO and Court...

Obviousness Standard:

Leveraging Latest PTO and Court Guidance Overcoming Challenges of Obviousness and Attacks on Patent Validity

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THURSDAY, JUNE 1, 2017

Presenting a live 90-minute webinar with interactive Q&A

Barry J. Herman, Partner, Womble Carlyle Sandridge & Rice, Baltimore

Jon L. Schuchardt, Ph.D., Partner, Dilworth IP, Trumbull, Conn.

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FOR LIVE EVENT ONLY

Obviousness Standard 2016-2017

A Strafford Publications Webinar

Barry J. Herman

June 1, 2017

Overview

I. Lessons from IPR Decisions on Obviousness

i. Teaching Away

ii. KSR Predictability

iii. Secondary Considerations and Nexus

iv. Common Sense

II. Lessons from District Court Litigation on Obviousness

i. Reasonable Expectation of Success

ii. Reliance on One Prior Art Reference + Common

Knowledge = Enough?

iii. Hindsight

5

6

Inter Partes Review – Lessons for Litigators

6

7 Source: www.uspto.gov, May 9, 2017

Statistics – Monthly AIA Filings

7


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

8

“Teaching Away”: a Thin Reed

Meiresonne v. Google Fed. Cir., March 7, 2017

Inter partes review initiated by Google challenging US 8,156,096

Invention: supplier identification locator system/method

Features a rollover view area that displays more information about an identified website than normally provided by a search engine

Fed. Cir.: affirms

9



10



Meiresonne’s theory:

References “teach away” from the claimed use of a rollover viewing area to display the additional information because both criticize use of descriptive text

Ref H: describes hit results as “gibberish” and recommends visiting the site

Ref F: abandons text in favor of graphical depiction (thumbnails)

Board: No teaching away

Fed. Cir.:

Substantial evidence supports Board; Ref F uses graphics to supplement—not replace—text

Ref H also says that other search results “can prove more useful” and encourages supplementing by visiting the site

11

Takeaways


Reinforces the challenge of winning when the Board only needs to show “substantial evidence”

“Teaching away” confirmed as a presumptively weak argument. If you use it, be sure there is no counter-argument that the reference does not truly teach away

Rely on other better arguments (No motivation to combine?)

12


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

13

KSR Predictability

In re Warsaw Orthopedic Fed. Cir., August 9, 2016

Inter Partes review sought by NuVasive

Invention: method of performing spinal fusion surgery

Perform implant insertion from side

Warsaw argues the implant “extends beyond the endplate portion of the vertebral body to include the apophyseal seal portion”

Board: Obvious from combination of 3 references (B, J, and L)

Fed. Cir.: Affirms almost in full; substantial evidence supports Board findings of adequate motivation to combine teachings with a reasonable expectation of success

14

Figures from US 8,251,997


15

KSR Predictability


Prior Art: Ref J – lateral insertion of implants; Ref B – implants designed to be recessed within the vertebrae

Issue: Did the claims cover implants that extended beyond the endplate portion of the vertebral body?

Warsaw Argues: “full transverse width” includes the apophyseal seal portion (outer ring), not taught by Ref B

Board: W’s disclosure is silent on “apophyseal seal”; W cannot demonstrate its intention to extend the implant length to cover more than the central portion

16

KSR Predictability


Fed. Cir:

Substantial evidence supports the Board’s findings

Law does not require reference to teach the identical thing

Ref B does not “teach away” by suggesting implants that can be rotated or reversed (would not elevate one aspect of Ref B over another)

W argues “obvious to try” only, but Board gave adequate reasons for why skilled person “would” use Ref J’s lateral insertion with Ref B’s implants to get predictable results

One claim deemed allowable where Board did not explain why the instrument should have “elongated portions”

17

Takeaways


Difficult to overcome predictability argument, particularly on appeal

At Federal Circuit, arguing “findings of fact” is dangerous; standard of review is “substantial evidence”

“Teaching away” = tough burden, particularly with conflicting portions within same prior art reference

Substantial evidence standard allows for reasonable minds to differ, particularly when the Board does a reasonably good enough job

Remember to present all arguments to Board if could present good arguments on appeal; appellate court found many arguments waived

18


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

19

Secondary Considerations and Nexus

Novartis v. Torrent Pharms Fed. Cir., April 12, 2017

IPR Petition: Torrent identified 3 grounds for invalidation

1st – Combination of Chiba and Aulton

2nd and 3rd – relied on Sakai

Institution decision: only review of 1st combination – not 2nd or 3rd, so no reliance on Sakai

Board: Found claims invalid over Chiba and Aulton but held that Sakai provided motivation to combine

Appeal: Novartis argued Sakai had been removed from scope of IPR and it didn’t have notice that it would be considered. Federal Circuit disagreed.

20

Secondary Considerations and Nexus


Fed. Cir.:

Also addressed secondary considerations

• Novartis claimed commercial success, industry praise, long-felt need

• Federal Circuit said there must be a causal nexus between patented invention and secondary considerations

• Must stem from “what was not known in the prior art”

Held that success stemmed from being the only FDA – approved drug of this type – not features from patented invention

21

Takeaways


Challengers in IPR proceedings can try to rely on prior art from rejected grounds

Patent owners should distinguish . . . but language from decision is tough

Reference that is found not anticipatory or a primary obviousness reference – still can be relevant to motivation to combine because “not contrary to Board’s” institution decision????

In ANDA cases, generic challengers have potential silver bullet

If drug is only one of its type approved by FDA, argue that is why it is successful

22


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

23

“Common Sense” Caveats

Arendi v. Apple Fed. Cir., August 10, 2016

Inter partes review of US 7,917,843

Invention: embedded program that allows user to conduct a search for information while staying in the first program

E.g., while in program 1, search for name/address in a database, return & display search results for confirmation or selection by user of program 1

PTAB: institutes review, finds claims obvious based on a single prior art reference

24

Claim 1


25



The more you explain it, the more I don’t understand it.

-- Mark Twain

26



Prior Art: Ref P – Program identifies phone # information in a document, then prompts user to call, fax, or “add # to address book”

Arendi: Missing claim element – use of “first” information in a second program to find “second” information – cannot be supplied with “common sense”

PTAB:

“Common sense” dictates that the program in Ref P would search for info other than the phone # before adding the # to address book

Obviousness inquiry requires consideration of common knowledge and common sense 27



Fed. Cir.:

Caveats to “common sense” apply:

• Not used to supply a missing claim element unless the element is simple and not critical

• Is the missing element peripheral or indisputably in the prior art?

• Common sense cannot substitute for reasoned analysis and evidentiary support

Board erred by accepting challengers’ conclusory assertion of common sense unsupported by evidence

“Data is data” argument from challengers fails to meet the required burden

28

Takeaways


As challenger / petitioner, be very wary of relying on 1 prior art reference for obviousness assertion

2 pronged approach – common knowledge (based on expert testimony) AND secondary references

As patent owner, attack!

Missing claim limitation (and not a peripheral one) – do not allow challenger to plug a gap by relying on common sense

“Common sense” impermissibly used as a crutch—must demonstrate reasoned analysis

29

IPR “War Story”

Inline v. GPI PTAB, January 10, 2017

Inline asserted obviousness against 53 claims on GPI’s patent that covers the packaging for Hot Pockets

30

IPR “War Story”

Inline v. GPI PTAB, January 10, 2017

Battle of experts

Importance of depositions – will Board weigh credibility?

Common sense / common knowledge vs. application of secondary references

Secondary considerations

Best way to combat hindsight

Nexus, nexus, nexus!

Factual testimony from GPI employees – Bias???

Board: all claims invalid as obvious

Currently on appeal to Federal Circuit

31


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

32

District Courts – Lessons for Litigators

33


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

34

Reasonable Expectation of Success

Cumberland Pharma v. Mylan Fed. Cir., January 26, 2017

ANDA bench trial on validity only (infringement stipulated to) of patent related to administration of IV for suspected acetaminophen overdoses

Claims required stable composition that is free of chelating agents

Mylan asserted obviousness based on prior-art communications from FDA

District Court (N.D. Ill.): no reasonable expectation that a formulation without any chelating agents would be successful

Prevailing skilled-artisan view that chelating agents were necessary to prevent degradation of the main drug ingredient 35



36



Fed. Cir.: affirmed

Reasonable expectation of success = question of fact (clearly erroneous standard)

Likelihood of success in combining references to meet claim limitations

Battle of experts

Question of “sufficient evidence”

Lesson – for bench trials, you better win the expert battle or chances of success on appeal are small . . .

37


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

38

One Prior Art Reference + Common Knowledge = Enough?

WBIP v. Kohler Fed. Cir., July 19, 2016

2 patents on marine engine exhaust systems for houseboats

District Court (D. Mass.): jury found for patentee; Kohler moved for JMOL on obviousness of asserted claims; district court denied

On appeal – obvious over P reference + standard elements known to ordinary artisan

Evidence of secondary considerations should be discounted – no nexus

Federal Circuit standard:

For “black box” jury verdict – we presume jury resolved underlying factual disputes in favor of verdict winner and leave presumed findings

undisturbed if “supported by substantial evidence” 39



40



Undisputed that Phipps teaches every element of claims except for “B” and “D”

Undisputed that “B” and “D” existed in other prior art – “conventional cooling features”

Dispute centered on whether POSITA would take exhaust controls from automotive engines and apply them in marine environment

Battle of experts on motivation to modify or convert Phipps

Secondary considerations come into play

Federal Circuit affirmed district court

41

Takeaways


Use more than one reference for obviousness assertions!

If a battle of experts occurs, secondary considerations very likely will control

Nexus may be the key – presumption applies where it is shown that objective evidence is tied to specific product and that product is the invention disclosed and claimed

“Claimed invention as a whole”

Jury verdict + secondary considerations = tough to overturn on appeal

42


i. Teaching Away



iv. Common Sense




Knowledge = Enough?

iii. Hindsight

Overview

43

Hindsight

Zoltek v. United States Fed. Cir., February 19, 2016

Court of Federal Claims

Zoltek sought compensation from Air Force and Navy for use of patent

Lawsuit began in 1996 and appealed to Federal Circuit 3 times!

U.S. Reissue Patent No. Re 34,162

Method of manufacturing carbon fiber sheet products whose electrical resistivity is pre-selected and value-controlled

Based on inventor’s discovery of a non-linear relationship among heat treatment conditions, partial carbonization, and surface resistivity

44

Hindsight


45

Hindsight


Unusual assertion of obviousness

4 references – none mention “surface resistivity” or pre-selection

Gov’t expert constructed mathematical methodology for purposes of litigation

Court of Federal Claims found claims invalid

Federal Circuit found no teaching or suggestion in prior art to:

Select data that expert chose

Plug data into mathematical equation that the expert devised

Reversed – “no evidence of obviousness” 46

Hindsight


47

"War Story"

GeoDynamics v. DynaEnergetics E.D. TX March 2017

Patent covers method for using reactive shaped charges to perforate oil and gas wells

Key limitation is negative – “without changing the pressure conditions to a more underbalanced condition”

4 day jury trial

Competing expert testimony

Dyna also had compelling fact testimony

“Black box” verdict for Defendant – all claims invalid

Anticipation, obviousness, and on-sale bar

48

"War Story"


Method for perforating

Loading reactive charge

Positioning the charge carrier in a

wellbore with a pressure condition

Without changing the pressure

condition to a more underbalanced

condition

Detonating

First explosive event creates a

tunnel surrounded by crushed zone

Second explosive event created by

exothermic intermetallic reaction

substantially eliminates the crushed

zone and clears debris from the

perforation tunnel

‘431 Patent – Claim 1

49

"War Story"


The thrill of convincing lay people that patent claims are obvious – and the differences between arguments to a judge and to jurors

50

Disclaimer

These materials are public information and have been

prepared solely for educational (and entertainment) purposes

to contribute to the understanding of U.S. intellectual property

law. These materials reflect only the personal views of the

speaker and are not individualized legal advice and do not

necessarily reflect the views of Womble Carlyle or Strafford

Publications. It is understood that each case is fact-specific,

and that the appropriate solution in any case will vary.

Therefore, these materials may or may not be relevant to any

particular situation. The presentation of these materials does

not establish any form of attorney-client relationship with

Womble Carlyle and the speaker. While every attempt was

made to insure that these materials are accurate, there may

be errors or omissions.

51

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52

Obviousness Standard 2016-2017

A Strafford Publications Webinar

Jonathan L. Schuchardt

June 1, 2017

Disclaimer:

The opinions expressed here are the author’s alone and are not

necessarily shared by Dilworth IP.

Any errors in the presentation are mine alone.

Information contained herein is presented to inform and perhaps

entertain. It is not intended as legal advice.

-- J.L. Schuchardt

54

Procedural posture matters

• Keep in mind how we got to the Fed. Cir.:

– Applicant’s appeal from final rejection affirmed,

then appealed to Fed. Cir.

– Ex parte reexamination: patentee challenges

obviousness ruling or challenger contests

patentability confirmation

– Inter partes reexamination: loser challenges

– Loser at district court appeals

– Inter partes review (“IPR”); loser challenges

55

• Substantial evidence hurdle

• The thin reed of “teaching away”

• Physical combinability not needed

• KSR predictability

• Unexpected results

• Problem and solution

• Motivation to combine and the need to explain

56

Themes 2017

High hurdle of substantial evidence

• Board’s obviousness decision reviewed de novo, but its

factual determinations need only be supported by

“substantial evidence”

• “Less than the weight of the evidence but more than a mere

scintilla” (Consol. Edison v. NLRB, 305 U.S. at 229-230)

• “Reasonable mind might accept as adequate”

• Agency may favor one reasonable conclusion over another

from two different, inconsistent ones

57

58

Substantial Evidence

Kennametal v. Ingersoll Cutting Tool Fed. Cir., March 25, 2015

• Inter partes reexamination of US 7,244,519

• Invention: cutting tools containing Co/Ru binder coated by

physical vapor deposition (PVD)

– Co/Ru binders known, but not with PVD

• Reexamination unit finds all claims obvious

• Board affirms, finding some claims anticipated, the rest obvious

• Fed. Cir. affirms

59

• Kennametal’s theory:

1. Skilled person would not have used Co/Ru and PVD because

coatings applied by PVD are too thin and do not adhere well to

binders that produce Co capping

2. Unexpected results: prolonged tool lifetime

• Ingersoll’s response:

• Any unexpected results were inherent in known compositions of

prior art

• No nexus between the prolonged tool lifetime and the claimed

novel features


Kennametal v. Ingersoll Cutting Tool

60


Kennametal v. Ingersoll Cutting Tool

• Fed. Cir.:

– Substantial evidence supports the Board’s determination

– Skilled person had a reasonable expectation of success in

combining Ru/Co binders in a PVD process

– Ref. L taught production of cutting tools with 9 metals, including

Ru, and taught that inserts could be coated using PVD.

– Ref. G disclosed all elements, taught 15 combinations, one of

which anticipated some claims. “Actual performance” of the

claimed combo wasn’t necessary.

– Because G taught the “precise combination” of Ru/Co and PVD,

any unexpected lifetime improvement came from something other

than the claimed novel feature

61

Kennametal -- Take-aways

• High hurdle to challenge obviousness determination when

Board’s decision only needs to be supported by substantial

evidence

• The skilled person can “envisage” the invention (even if the

reference examples show different combinations) when there

are relatively few ways to combine the elements

• Unexpected results need to be linked to both what is claimed

and what is novel in the claim.

62

“Teaching Away”: a Thin Fiber

In re Urbanski

• Ex parte appeal

• Invention: enzymatic hydrolysis of

soy fiber

– Limit reaction time to 1-2 hours, use

acidic pH to give a product having

limited water-holding capacity and

free simple sugar content < 1%

• Examiner: claims obvious from refs

G and W

• Board: affirms

• Fed. Cir.: affirms

Fed. Cir., January 8, 2016

“Magic Circle” John William Waterhouse

1886

63

Urbanski claim 43

64

“Teaching Away”

In re Urbanski • Prior art:

– Ref G: 5-72 hour reaction time to give stable dispersion of

soluble fiber

– Ref W: 1-2 hours for high-fiber product with good mouthfeel

• Examiner: Degree of hydrolysis = “result-effective variable”

• Urbanski argues:

1. G “teaches away” from partial hydrolysis; the claimed method

does not produce a stable dispersion

2. Different benefits of the references were mutually exclusive

• PTAB: Fiber properties are altered in a predictable manner

by degree of hydrolysis. Irrelevant that G and W had different

objectives

65

In re Urbanski

Fed. Cir.:

• “Substantial evidence” supports Board’s finding of motivation to

modify G’s teachings with W to use a shorter reaction time

• Motivation = favorable dietary properties

• Result-effective variable applies to predictable result

• Nothing in the references suggests that the claimed method would be

undesirable, thus no “teaching away”

• References must discredit or criticize the shorter reaction time;

teaching a longer time is not enough to “teach away”

66

In re Urbanski -- Take-aways

• Holding further illustrates the “high hurdle” of winning

when the Board only needs to show “substantial

evidence”

• “Result-effective variable” is a four-letter word; can

you show an element of unpredictability?

• “Teaching away” is narrowly interpreted and rarely

adopted as a viable argument by the court

67

Physical Combinability, cont.

ClassCo v. Apple Fed. Cir., September 22, 2016

• Inter partes reexamination of US

6,970,695

• Invention: identification of incoming

phone calls with alert to called party

about caller identity

– Announcing circuit uses identity info

to produce audio using a speaker at

the called station

• Reexam unit: claims are obvious

from combining refs F and G

• Board: affirms


Alexander Graham Bell places the first New York to Chicago telephone call (1892)

68

ClassCo’s claim 1

69

The minute you read something and you can't understand it you can almost be sure that it was drawn up by a lawyer.

Then if you give it to another lawyer to read and he don't know just what it means, why then you can be sure it was drawn up by a lawyer.

If it's in a few words and is plain and understandable only one way, it was written by a non-lawyer. --Will Rogers

70

• Prior art:

– Ref F: Disclosed all claim elements except use of phone’s

internal speaker to announce the caller identity

– Ref G: Missing element taught in a hands-free phone

• ClassCo argues:

1. KSR v. Teleflex requires combinations of known elements with

“no change in their respective functions”

2. Secondary considerations were ignored: industry praise,

commercial success, licensees

Physical Combinability

ClassCo v. Apple

71

Physical Combinability

ClassCo v. Apple • Fed. Cir.:

– No need for references to be physically combinable

– Skilled person is not a robot but uses “ordinary creativity”

and would have used a single speaker to deliver sound

from multiple kinds of data captured in a phone system

– Obviousness does not require “perfectly fitting puzzle

pieces”

– Board error not to consider the secondary considerations,

but on balance, strong prima facie case outweighs

evidence offered by ClassCo

– See also: Allied Erecting v. Genesis Attachments, decided

6-15-16 (multiple tool attachment system having “quick

change” feature obvious from references describing similar

individual features)

72

Post-KSR Obviousness:

Adds “Predictability” tests to TSM test

• Combine prior art elements with known methods for predictable results

• Simple substitution of known elements for predictable results

• Known technique to improve similar device, method, product in the same way

• Design need or market pressure leading to predictable variations

• Finite number of identified predictable solutions with reasonable expectation of success (obvious to try)

• Teaching, suggestion, motivation to modify art to arrive at claimed invention (“TSM” test)

See: MPEP 2143

73

You’ve Been KSR’d!

ABT Systems v. Emerson Electric Fed. Cir., August 19, 2015

• ABT owns US 5,547,017, with claims drawn to an HVAC

thermostat with recycle control for periodic operation when no

heating or cooling is needed

• Emerson’s “Big Blue” thermostat copies the feature; ABT sues

and wins in MO E.D. JMOL motion denied.

– Damages awarded: $300K based on sales of about 140,000

infringing thermostats

• Fed. Cir. reverses; patent invalid under § 103 based on

combined teachings of 4 references

74

ABT Systems v. Emerson

75


• Cited art:

– Ref C: a circulating fan, intermittent start/stop, but not tied to fan H/C

deactivation

– Ref Y: periodic operation of fan without H/C and not tied to H/C

deactivation

– Ref P: single-shot fan operation to drain the coil

– Ref N: single-shot fan operation to drain coil or improve comfort

• D. Ct.: Jury could reasonably conclude that prior art did not

suggest periodic fan operation dependent upon deactivation of

the heating/cooling function. Evidence of long-felt need found.

76


Fed. Cir.:

• KSR requires more than predictable results from substitution of

known elements

• “Recognizing that nonobviousness was determined by a jury, we

assign due deference to the jury’s verdict”

– Few if any relevant facts are in dispute. Ref. N also discussed

periodic fan operation, not just one-shot operation to drain the coil.

• Dismisses ABT’s argument that the refs were non-enabling and

taught away from the claimed invention

• Grant of licenses failed to demonstrate commercial success

“without a clear showing of nexus to the claimed invention.”

77

• KSR v. Teleflex raised the bar for many electro-mechanical

inventions, where unpredictability is more difficult to establish

• Fed. Cir. will give “due deference” to jury verdicts when it

suits the panel

• “Teaching away” is a thin reed

• “Secondary” considerations were just that

• Fed. Cir. dismissed the clear evidence of copying and grant of

licenses that—given the single key feature of the improved

thermostat—proved the value of the claimed invention to

competitors.

• Compare Cadence Pharm. v. Exela (evidence of licensing program considered persuasive).

ABT Systems – Take-aways

78

“Unexpected Results”

In re Efthymiopoulos Fed. Cir., October 18, 2016

• Ex parte appeal

• Invention: method of administering influenza

drug by oral inhalation alone

– Relenza® = zanamivir, normally taught for use by

nasal inhalation

• Examiner: obvious from art teaching nasal

inhalation; only two ways to inhale

• Board: Affirms

• Fed. Cir. (2:1): Affirms; “substantial

evidence” supports Board findings of

adequate motivation to use oral inhalation

• Dissent: (Newman): Obvious only to the

court

Inhaler, John Mudge (1778)

79

• Examiner: V1 teaches to use zanamivir and nasal inhalation;

V2 generically teaches inhalation of a similar drug. Only 2

ways to inhale, therefore obvious

• Applicant: Prior art believed nasal inhalation was needed to

treat influenza

• PTAB: affirms

• CAFC (2:1): Substantial evidence supports Board

– Oral administration only is obvious; inhalers taught by V1, V2

– Reasonable expectation of success from reference combo; nothing

unexpected about this drug working by oral inhalation

– Kaiser study criticized: related to prevention, not treatment

“Unexpected Results”

In re Efthymiopoulos

80

In re Efthymiopoulos

Newman, dissenting:

• No art or expert suggests oral inhalation only;

obvious only to the tribunal

• Effectiveness of oral-only administration was

unexpected

• Kaiser study: nasal + oral administration worked

much better than nasal only

• Board’s argument is “obvious to try”

• V2 mentioned many ways to administer the drug,

but oral inhalation was not listed, so it can’t be

obvious as an “identified, predictable” solution

81

In re Efthymiopoulos -- Take-aways

• PTO, Board will continue to hammer on KSR predictability

when the claims relate to a process that can only be practiced

a limited number of ways

• Applicant victimized by Board’s need to show only “substantial

evidence”

• The devil is often in the details: the dissent’s willingness to

investigate specifics reveals distinctions that the “high level”

views of the Board and majority overlook

82

Unexpected Results—Where’s the Beef?

Prometheus Labs v. Roxane Labs Fed. Cir., November 10, 2015

• Prometheus owns ‘770 patent on use of alosetron to treat

females with non-constipating irritable bowel syndrome (“IBS-D”)

• Roxane files ANDA; Prometheus sues

• NJ D. Ct. holds ‘770 patent invalid over P’s own expired ‘800

patent on use of alosetron to treat IBS

– “Insubstantial differences” between ‘770 claims and prior art

– No unexpected results or other helpful secondary considerations


83

Prometheus v. Roxane

Claims of the ‘770 patent (after ex parte reexam by P):

84

Fed. Cir.:

• ‘770 claims are an obvious species of ‘800 patent

– 75-80% of IBS-D patients are women, moderate pain is a

known common symptom, and 6+ months of symptoms provide

confidence in the diagnosis

• D. Ct. correctly evaluated/resolved secondary considerations

in Roxane’s favor

– Not unexpected for alosetron to exhibit greater efficacy in IBS-D

patients

– Known elements combined in a known way to achieve expected

results

– Obvious to treat this subset of patients in this way

Prometheus v. Roxane

85

Prometheus – Take-aways

• When a later-expiring patent is an obvious variation of

an invention disclosed in a reference, the later-expiring

patent is invalid

• Easy case for the Fed. Cir. absent the “beef” of

unexpected benefits from treating this subset of the

original target group

86

Problem and Solution

Purdue Pharma v. Epic Pharma Fed. Cir., February 1, 2016

• A complex case, history related to

OxyContin® opiod pain reliever

– Need to reduce levels of toxic 14-

hydroxycodeinone impurity from 1500 to

< 10 ppm

• Generic producers file ANDAs, Purdue

sues.

• District court (NY, S.D.): Patents are

invalid; recognizing where the 14-

hydroxy isomer came from doesn’t

matter if the way to eliminate it is obvious


oxycodone

14-hydroxy “ABUK”

87

Problem: an oxidation side product survives the initial hydrogenation, then dehydrates to generate more unsaturated ketone

Purdue Pharma

88

US 7,683,072

Purdue Pharma

89

Purdue Pharma

Purdue’s theory:

• No one understood the origin of the ABUK impurity, so

identifying the source of the problem results in an invention

Fed. Cir.:

• District court correctly concluded that the solution to the

problem--another hydrogenation step to convert the

unsaturated ketone to the desired product--was obvious

• Eibel Process (261 U.S. 45, 68 (1923)) is distinguishable

(process for making wrinkle-free paper at high speed required adjustment of machine parameters; held not obvious)

• Solving the problem only required adding another

hydrogenation step; it did not require the source of the

impurity to be identified

90

Purdue Pharma – Take-aways

• Identification of the problem may not impart patentability if the

solution to the problem is obvious

• Fed. Cir. will be alert to pharma companies seeking to extend

patent lifetime based on a relatively minor improvement

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The Burden to Explain, Part 1

Intelligent Bio-Systems v. Illumina Cambridge

Fed. Cir., May 9, 2016

• Illumina owns US 7,566,537 to a method of labeling

nucleosides in a DNA strand

• IBS petitions for inter partes review, alleging obviousness

from combined teachings of T or J plus Z

• Board: Claims are patentable; no reasonable expectation of

success from prior art combination

• Fed. Cir.: Affirms the judgment but criticizes the Board’s

rationale: the motivation to combine was missing

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Illumina’s Claim 1 Refs T and J: Both teach “sequencing by synthesis” approach used by Illumina. Protection of the 3’ OH group is desirable; other protecting groups described Ref Z: Azidomethyl group for protection of hydroxyl groups IBS’s theory: Obvious to use a different

protecting group, including azido group

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IBS’s theory: Obvious to use a different protecting group, including azido group taught by Z, in combination with the SBS method taught by T and J because the protecting group is known

Illumina’s response: T and J teach that protection/deprotection must be near quantitative and rapid removal, and Ref L shows low efficiency with this protecting group (60-80%)

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The Burden to Explain

Intelligent Bio-Systems, cont.

Board:

– Challenger did not show a reasonable expectation of

success from prior art in quantitative removal of the

azido protecting group

Fed Cir:

– Substantial evidence supports Board decision, but . . .

– Board “conflates” motivation to combine and

reasonable expectation of success requirements

– Absent a way to satisfy the requirement of quantitative

deprotection from the combination of references, there

can be no “motivation to combine”

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The Burden to Explain

Intelligent Bio-Systems, cont.

Judge O’Malley: Accordingly, it is of no moment that Zavgorodny’s protecting group would not be removed quantitatively in Tsien or Ju’s sequencing method—removal is simply not required by the claim of the ‘537 patent. The Board seemed to believe that the “reasonable expectation of success” inquiry looked to whether one would reasonably expect the prior art references to operate as those references intended once combined. That is not the correct inquiry—one must have a motivation to combine accompanied by a reasonable expectation of achieving what is claimed in the patent-at issue. The Board’s reliance on the absence of a reasonable expectation of success was, thus, improper.

Intelligent Bio-Systems – Take-aways

• Examiners routinely summarize many facts from

references and then skimp on reasons for “motivation to

combine”

• Typical argument for motivation is a single sentence or

phrase

• Don’t settle for “conflation”: Insist on a thorough

explanation of why there is both motivation to combine

and a reasonable expectation of success

• Little said re the azido protecting group in application as

filed; just one among many other possibilities

• See also: Cutsforth v. Motivepower (22-Jan-2016) and

Black & Decker v. Positec USA (18-May-2016), both

non-precedential (insufficient reasoning from Board)

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Burden to Explain, part 2

In re NuVasive, Inc.

• NuVasive owns US 8,361,156, covering a spinal fusion implant

having “radiopaque markers” extended into sidewalls near the

middle of the implant

• Medtronic challenges with IPR proceeding

• Board: obvious from Refs T and Ref B

• Fed. Cir.: reverses; Board failed to adequately support its

obviousness conclusion

Fed. Cir., December 7, 2016

NuVasive’s claim 1


In re NuVasive, Inc.

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Implant with “radiopaque markers” US 8,361,156

99

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Fed. Cir.:

• NuVasive was correct that Board failed to explain why a skilled

person was motivated to combine references and place

radiopaque markers on the medial plane

• “Thorough and searching” factual inquiries required with “need for

specificity”

• Reviewing court can’t do its job without understanding basis for

Board decisions

• Motivation to combine analysis must be explicit

• Rejects Board’s adoption of expert’s “common sense” argument


In re NuVasive, cont.

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In re NuVasive – Take-aways

• Has the PTO provided “adequate evidentiary basis” for

arguments that there is motivation to combine reference

teachings?

• Reliance on conclusory statements instead of “reasoned

explanation”?

• “The Board knows how to do its job”

– Referring to Allied Erecting v. Genesis Attachments

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Need to Explain, part 3

In re Van Os Fed. Cir., January 3, 2017

• Ex parte appeal

• Invention: touchscreen interface that

allows users to rearrange icons

– First touch to open; longer touch to

enter interface reconfiguration mode

– Examiner: Obvious from

combination of Ref H (“edit faves”

button on menu) and Ref G

(computer touch pad with

rearrangeable icons)

• Board: We agree, the longer touch

feature is “intuitive”

• Fed. Cir.: Vacates/remands

In re Van Os

Fed. Cir.:

• We consider “common sense,” but KSR still requires explicit,

reasoned analysis of whether motivation to combine exists

• To conclude “it’s intuitive” or “common sense,” without more, is

conclusory—like saying “it’s obvious”

• Neither Examiner nor Board provided reasoning for why the

skilled person would have combined the teachings, so we punt it

back to the Board

Dissent-in-part (Newman):

• Proper remedy is reversal. PTO failed to meet its burden to show

why applicant was not “entitled to a patent.” (see also: Icon

Health and Fitness v. Strava, Judge O’Malley’s similar dissent-in-part)

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In re Van Os

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In re Van Os – Take-aways

• More of the same: Board is often too comfortable in simply

ratifying an Examiner’s conclusory viewpoint

– To err is human, to provide reasoned analysis is divine . . . ?

• Invocation of “common sense” by the PTO should set off

alarm bells

• Yet another case where the Fed. Cir. corrects the Board for

not articulating why there was motivation to combine

references

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Personal Web Technologies v. Apple Fed. Cir., February 14, 2017

• PWT owns US 7,802,310

– Invention: method of tagging files with a “true name” based on file

contents to control access to files

– Got flowcharts?

• Apple’s IPR petition asserts obviousness based on 2 refs

• PTAB: Claims are obvious

• Fed. Cir.: Vacates/remands: PTAB failed to support its findings

that all elements were in the prior art and that there was motivation to combine with a reasonable expectation of success

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US 7,802,310 claim 1

108

• Prior Art:

– Ref W: System for backing up/restoring data with content-

based identifiers

– Ref S: System for managing rights to access data. Control

access to digital works stored in a repository; ticket holder paid

for access

• Board:

– Mostly adopts Apple’s arguments

– Incomplete, inaccurate analysis criticized by Fed. Cir.


Personal Web Technologies

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Personal Web Technologies

Fed. Cir.:

• PTAB decision inadequate for failure to find all claim elements

and provide reasoned explanation for why a skilled person had

motivation to combine them

• Complex/obscure technologies may require more than a brief

explanation

• Agency’s duty to provide a record of evidence upon which it

relies to allow for judicial review

• “Would have allowed for” = “could,” not the same as “would”

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Personal Web Technologies –

Take-aways

• Yet another example of the Fed. Cir.’s apparent new-found

willingness to “get into the weeds” to dissect faulty reasoning

from the PTAB (or examiner as adopted by PTAB)

• “Could combine” is not the standard

• Is there a “missing element” in the claim not found in the cited

art?

• Thorough, reasoned explanations are needed for motivation to

combine reference teachings and reasonable expectation of

success, especially when the technology is not “self-explanatory”

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Icon Health & Fitness v. Strava Fed. Cir., February 27, 2017

• Inter partes reexam of US 7,789,800

sought by Strava

• Invention: method/system for

controlling exercise equipment using

a USB-compatible, portable remote

device

• Examiner finds some claims obvious

• Icon appeals, PTAB affirms

• On appeal, Fed. Cir. vacates-in-part,

remands

• Dissent (O’Malley): proper remedy is

reversal


Icon Health & Fitness

• Icon’s theory: No substantial evidence to support PTAB findings

where the Board adopted legal conclusions of challenger’s expert

and failed to supply its own reasoning

Fed. Cir.:

• For some claims, finds PTAB’s explanation “sparse but adequate”

• For others, the multi-layered incorporation-by-reference of

arguments was insufficient

• PTAB may adopt examiner position as its own when the reasoning

is thorough and well explained, but PTAB must explain why it

accepts an argument

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Icon Health & Fitness

– Take-aways

• Court analysis of multiple claims demonstrates that it is

watching the PTAB closely

• Watch for inadequate explanations by examiners

• Watch for Board’s “rubber stamping” of examiner

positions without adequate explanation

• Add another one to the pile of helpful cases to cite

• No end in sight?

– Rovalma v. Bohler-Edelstahl GmbH, decided May 11, 2017

(Court vacated/remanded when Board failed to set forth

sufficient reasoning to allow court to determine what inferences

it drew from patent challenger’s submission)

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Final thoughts

• Convincing the court that the Board’s decision was not based

on “substantial evidence” is a challenge, but the hurdle may be

eroding

• Forget “teaching away” unless it is really there

• Arguing physical non-combinability is difficult

• Can you make the case for “unexpected” results?

• Patrol your Office actions and Board decisions for the

“reasoned explanation” of both motivation to combine/modify

and reasonable expectation of success

• Is this a mere rash of bad PTAB decisions, or is it a revolution

in the making?

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The obscure we see eventually. The completely obvious, it seems, takes longer.

--Ed Murrow

Thanks for your attention!

Jonathan L. Schuchardt, Ph.D. Partner Dilworth IP Intellectual Property Law 2 Corporate Dr., Suite 206 Trumbull, CT 06611 (203) 220-8496 [email protected]

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