CAFC 2012 on the Obviousness of Chemical Innovations, Part II
|Written by Barry Herman & Jim Lennon
Posted: January 24, 2013 @ 8:30 am
Last year marked the fifth anniversary of the Supreme Court landmark decision in KSR v. Teleflex (April 30, 2007), when the United States Supreme Court addressed the obviousness of patents under 35 U.S.C. § 103 for the first time since Graham v. John Deere in 1966.
A few trends in the law of obviousness as pertaining to chemical innovations were readily apparent in 2012. Pharmaceutical patent holders in litigation fared well at the Federal Circuit, while patent holders appealing decisions from the Board of Patent Appeals and Interferences fared poorly, and a third more subtle trend suggests chemical patents in district court litigation may be less susceptible to invalidation for obviousness post-KSR.
In Part I of this article we explored the trends in pharmaceutical litigation during 2012. In this second and final segment we focus on PTO Board decisions and appeals from non-pharmaceutical litigation relating to chemical patents.
In contrast to the Federal Circuit’s 2012 decisions in the context of pharmaceutical litigation, its decisions with respect to appeals from the Board were much less favorable to those seeking patent protection. This is likely the result of the different standard applied to Board decisions – while the question of obviousness is one of law and reviewed de novo, it is based on factual findings, and the appellant must do more than simply demonstrate that the Board’s decision was wrong. Instead, the appellant will prevail only if he/she can show that the decision was not based on “substantial evidence.” Moreover, unlike in district court litigation, the Patent Office is not required to establish obviousness by a “clear and convincing” standard.
In an inter partes reexamination, the Federal Circuit confirmed the Board’s conclusion that the claimed invention, relating to cryogenic processes for separating multi-component gaseous hydrocarbon streams, was not obvious. Fluor Tec v. Kappos, 2012-1295, 2012 U.S. App. LEXIS 25250 (Fed. Cir. Dec. 11, 2012). It concluded that it would not have been obvious to add an expander to the prior art’s low-pressure configuration since that is not a design choice that one would employ. It relied upon DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009) for the proposition that an inference of nonobviousness is particularly strong where the prior art undermines the proffered reason for combining the prior art elements. It also relied upon a 1992 case, In re Gal, 980 F.2d 717 (Fed. Cir. 1992), which held that “different structure to achieve [a] different purpose was not an obvious design choice.” Last, the court cited to KSR for the requirement that there “must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.”
Other patent applicants were not as fortunate as Fluor Tec. In an original prosecution case, the Federal Circuit upheld the Board’s decision in which it affirmed the examiner’s rejection of all claims in two patents directed to non-lethal projectiles containing chemicals used to assist in riot control or subdue a suspected criminal. In re PepperBall Techs., Inc., 2011-1137, 469 Fed. Appx. 878 (Fed. Cir. 2012). It found that there was substantial evidence to support the Board’s finding that a person skilled in the art would have been motivated to substitute a well-known pepper-based irritant for the tear gas irritant disclosed in the PepperBall patent application. The Federal Circuit also rejected PepperBall’s “teaching away” assertion. With respect to one claim of one of the two patents, however (related to “differing fill levels”), the panel conceded that it may have not reached the same conclusion as the Board “in the first instance,” but found there was substantial evidence to support the obviousness finding because those skilled in the art would have tried the claimed range during “routine experimentation.”
In re Droge, 695 F.3d 1334 (Fed. Cir. 2012), was notable in that the Federal Circuit did not cite to KSR in affirming the Board’s holding that the claims of the recombinant DNA patent were obvious. It rejected the patent applicant’s argument that there would be no reasonable expectation of success if the two asserted prior art references were combined, even though it admitted that all of the limitations of the claimed method were taught by the two references. The Federal Circuit relied upon its decision in In re Kubin, 561 F.3d 1351 (Fed. Cir. 2009) that a finding of obviousness “does not require absolute predictability of success” but, rather, just a “reasonable expectation.”
The Court also affirmed the Board’s finding of obviousness, in which it had agreed with the examiner’s rejections in four separate ex parte reexaminations of patent claims related to polishing pads for chemical mechanical polishing (“CMP”), in In re Applied Materials, 692 F.3d 1289 (Fed. Cir. 2012). The most interesting part of the decision was Judge Newman’s dissent where she inferred that her colleagues on the panel had simply “rubber-stamp[ed]” the Board’s factfinding.
Judge Newman also disagreed with her other two panel members in In re Hyon, 679 F.3d 1363 (Fed. Cir. 2012). Judge Bryson wrote the majority opinion finding that the Board properly rejected all claims of a reissue application directed toward Ultra High Molecular Weight Polyethylene (“UHMWPE”) for use in artificial joints. The Board and the Federal Circuit rejected Hyon’s argument that there was no motivation to combine the two prior art references because, even though they are directed to different products (one to artificial joints, the other to films or sheets), both references are directed to UHMWPE.
In her dissent, Judge Newman stated that “[w]hen the technologic field is mature, apparently small changes that produce unexpected results or improved properties are of heightened significance.” She took issue with the finding that the claims were obvious because she found that the Board, and her colleagues on the panel, used the Hyon patent application as a roadmap to combine the two prior art references.
In sum, with respect to the Board’s obviousness decisions on chemical innovations, the Federal Circuit in 2012 affirmed the Board in each instance. One decision favored the patentee (in an inter partes reexamination proceeding); the other four did not.
Other chemistry-related cases
In ArcelorMittal France v. AK Steel Corp., 700 F.3d 1314 (Fed. Cir. 2012), the Federal Circuit affirmed-in-part, reversed-in-part, vacated-in-part and remanded the district court’s judgment entered upon a jury verdict of invalidity and non-infringement based on a patent directed to a boron steel sheet and coating. The Federal Circuit reversed the jury’s obviousness finding based on a claim construction error, and emphasized that secondary considerations of non-obviousness needed to be considered upon remand. Specifically, the court noted that its prior precedent “make[s] clear that the commercial success of [an] embodiment with additional unclaimed features is to be considered when evaluating the obviousness of the claim, provided that embodiment’s success has a sufficient nexus to the claimed and novel features of the invention.”
In January 2012, the Federal Circuit issued its decision in Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922 (Fed. Cir. 2012), affirming the district court’s grant of a preliminary injunction in a patent case related to multi-cryopreserved hepatocytes (a type of liver cell). Regarding CellzDirect’s obviousness assertion, the panel (majority decision was written by Chief Judge Rader) noted that the art was well-known for being unpredictable; that the art was a crowded one but there was not one reference to multi-cryopreservation; and that the prior art taught away from multiple freezings. In dissent, Judge Gajarsa wrote that the majority’s obviousness analysis was “directly contrary to the Supreme Court’s opinion in KSR” and that it “reinvigorates the pre-KSR standard for obviousness, rigidly requiring an explicit teaching, suggestion, or motivation for multi-cryopreserving hepatocytes.”
In WM. Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356 (Fed. Cir. 2012), the Federal Circuit affirmed the unpatentability of chewing gum that provides a cooling sensation when chewed. Wrigley argued that the combination of a coolant (WS-23) and menthol resulted in “unexpected cooling, beyond what would have been predicted by one of ordinary skill in the art.” While the Federal Circuit agreed that a “combination of known components resulting in an effect greater than the predicted additive effect can support a finding of nonobviousness,” it found that the prior art revealed that the synergistic effect of combining coolants had already been discovered in the prior art. It discounted Wrigley’s commercial success argument, finding that there was not a sufficient nexus between the invention and the success in the marketplace of the chewing gum products that practiced the claim-at-issue (a point of strong disagreement in Judge Newman’s dissent). The Federal Circuit panel concluded by noting that the combination of elements were all known in the prior art; there were only a finite number of predictable solutions to the problem of finding the physiological cooling agents for chewing gum; and that the combination claimed by Wrigley to be non-obvious was, in fact, “the product not of innovation but of ordinary skill and common sense” (citing to KSR).
Overall, our review of the chemical cases decided by the Federal Circuit in 2012 demonstrates a strong likelihood that the decision below regarding obviousness, whether by the PTO Board or a district court, will be affirmed by the Federal Circuit. No doubt this is a reflection of the high burden on the appellant to reverse a finding on the issue of obviousness (and is not unique to chemical patents). The other trend noted above, that litigated pharmaceutical patents fared comparatively well under obviousness scrutiny in 2012, largely mirrors the broader trend of nonobviousness for patents challenged through district court litigation, where the burden to prove invalidity is considerably higher than in an administrative procedure before the PTO.
The more subtle trend, but one that lends support to the theory that chemical patents are less likely to be found obvious, is evidenced by the three out of four reversals issued by the Federal Circuit in 2012 regarding the question of obviousness of a chemical patent (ArcelorMittal, Eurand,and Santarus, as opposed to Alcon, although the latter two were only reversed in part). These cases suggest that the unpredictability associated with manipulations in the chemical arts, and similar secondary considerations (e.g., unexpected results), may allow more chemical patents to survive obviousness challenges as compared to the more “predictable arts.”
 Again, in the interest of full disclosure, one of the authors (Barry Herman) was counsel for ArcelorMittal in the district court litigation.
About the Authors
Barry Herman is an intellectual property litigation partner at Womble Carlyle Sandridge & Rice, LLP. Barry holds a Bachelor of Science degree in chemical engineering from Lehigh University, and a Juris Doctor from the University of Maryland School of Law. Barry represents both domestic and foreign clients in a wide range of intellectual property matters, with an emphasis on patent litigation in district courts and before the International Trade Commission. He can be contacted by email at email@example.com or by phone (410) 545-5830.
Jim Lennon is a registered patent attorney and litigator at Womble Carlyle Sandridge & Rice, LLP. Jim holds a Bachelor of Science degree in Geology from the University of Delaware, and a Juris Doctor from the University of North Carolina School of Law. Jim is an advocate for enforcers and challengers of patent rights in all patent disputes venues, working all levers of the patent system to his clients’ advantage. Jim can be contacted by email at JLennon@wcsr.com or by phone at (302) 252-4326.
NOTE: The views herein expressed are solely those of the authors and are not necessarily the views of Womble Carlyle or its clients.