Expansion of the Blocking Patent Doctrine: Trading Logic for Gremlins

By Melissa Brand & Hans Sauer
October 12, 2018

Since Merck, blocking patent arguments have arisen in the Federal Circuit primarily in the pharmaceutical patent context, and until now have largely been limited to undermining evidence of commercial success. But just like gremlins fed after midnight, this doctrine inevitably spawned unwanted offspring that are now wreaking havoc.

The blocking patent doctrine appears to have originated in 2005 in Merck & Co. v. Teva Pharmaceuticals USA, Inc., 395 F.3d 1364 (Fed. Cir.). It applies when there are at least two patents in play: a later patent, which claims the invention and is purportedly obvious, and an earlier patent which claims some kind of technology that would have been practiced if someone had pursued the “obvious” solution claimed in the later patent. In Merck, the Federal Circuit discounted the probative value of objective evidence – commercial success evidence – because the patentee possessed the exclusive right to a prior art patent that necessarily would be practiced by one performing the method claims of the patent-in-suit. “Financial success is not significantly probative of that question in this case because others were legally barred from testing the [prior art] ideas.” Id.at 1377. Effectively the Federal Circuit said that an earlier patent “legally” prevented anyone other than Merck from doing the obvious thing – so the fact that only Merck achieved commercial success with its invention couldn’t be counted towards nonobviousness. Since Merck, blocking patent arguments have arisen in the Federal Circuit primarily in the pharmaceutical patent context, and until now have largely been limited to undermining evidence of commercial success. But just like gremlins fed after midnight, this doctrine inevitably spawned unwanted offspring that are now wreaking havoc. Before looking at those particular developments, we first start with some thoughts on the noteworthy recent developments in the application of the blocking patent doctrine to commercial success.

Perhaps one of the most perplexing innovations in Acorda is the creation of a new obstacle for the patentee – a hypothetical commercial researcher who, having an obvious solution in her or his grasp, would have been blocked by an earlier patent from achieving commercial success.  The opinion does not actually use the term “hypothetical commercial researcher” but that is in reality what we now have. Referring to the concept as a “theoretical matter” the majority promulgates numerous “variables” that “appear generally relevant” to what a researcher would choose to do when faced with a blocking patent. According to the Acorda court, if these new “variables are held constant,” i.e., not rebutted through the patentee’s production of evidence, then the earlier blocking patent will discount evidence of commercial success that would ordinarily support the nonobviousness of the later patent. The idea underlying this whole construct is that a hypothetical commercial researcher would have learned of a relevant “blocking patent” and been deterred from relevant research because of fear of infringement liability (recall, this is the same maniac who would have scoured the basement of the SEC looking for medical information in securities filings).

Assuming that no one would ever develop a product that might infringe a patent is inconsistent with numerous Federal Circuit realities. It’s right up there with the Tooth Fairy (sorry, kids). As no one knows better than the Federal Circuit, people infringe patents all the time. Why would a court that constantly sees infringement of all kinds of patents assume that there was this one patent that nobody would have dared infringe? There is nothing especially scary or conspicuous about a “blocking patent,” and nothing distinguishes such a patent from any other: any patent can be a “blocking patent.”  If no one ever dared infringe a patent we wouldn’t have a doctrine of willful infringement and a long history of affirmed findings of patent infringement.

But one of the most curious situations arises when, as in the Acorda case, the earlier “blocking patent” and the later patent are both still in force at the time of the alleged patent infringement. In such instances, the same party that infringed the blocking patent is arguing that nobody would have infringed the blocking patent. Yes, really.

Moreover, there is no justification for the presumed qualities of this hypothetical researcher. We know that in the context of the hypothetical person of skill in the art, parties hotly contest who that person would be, what skills and motivations it would have had, and what it would have done. It is hard to understand how that can be so on the one hand, whereas on the other we now have a hypothetical commercial researcher whose characteristics, motivations, and skill level are presumed, subject only to the patentee’s ability to poke holes in this court-created construct.

What’s more is that the Court’s new hypothetical researcher presumably resides exclusively in the United States and is unmoved by the safe harbor embodied in 35 U.S.C. § 271(e) and Bolar exemptions. These are apparently the “general realities in the area at issue” although no evidence was cited to support that notion. In reality, we know that this is just not true. The drug development safe harbor under § 271(e) shields research and commercial development of pharmaceuticals from infringement liability, and is commonly used for R&D activities for which there is no freedom-to-commercialize, with no sign that “blocking patents” are chilling commercial expenditures. And more generally, there are other countries that have researchers and engineers, and whose citizens might be equally motivated to pursue obvious, lucrative solutions to technical or commercial problems. United States patents do not have international power to “block,” and obtaining patent protection globally can be prohibitively expensive. This is especially true for smaller innovative entities who may be most likely to discover new therapeutically active substances. So is the presumption that innovation occurs only in the United States? And with what sort of evidence does the Court expect patentees to come forward? Does a patentee now have to prove that there were countries in which no blocking patent existed and there were qualified researchers in each such country? And if so, how many countries and how many researchers is enough?

So far, we have only discussed the application of the blocking patents doctrine to discount “commercial success” evidence of nonobviousness. Another innovation of the Acorda case is the extension of this doctrine to long-felt need and failure of others. Sometimes, you see, there is evidence that people in the field were discussing a longstanding unsolved problem, or expressed frustration with existing products, but were unable to propose a better solution until one was provided by the inventor. Or maybe others tried different possible approaches but came up with only inferior solutions or failed altogether. Such information normally tends to show that the supposedly obvious invention couldn’t have been quite so obvious. But just as with evidence of commercial success, the blocking patents doctrine now says that an earlier patent would have prevented others from proposing an obvious solution to a long-felt problem – even if just on paper. In the same vein, others who actually tried and failed to solve the problem are presumed (without proof) to have failed only because the existence of a patent prevented them from trying the obvious solution, forcing them to go down blind alleys instead.

In such ways, the Acorda opinion opens the door to a form of super-hindsight that first arose in Merck. By endorsing the blocking patent theory as relevant to these objective indicia, the Court necessarily presumes that others in the art would have wanted to solve the problem in the exact same “obvious” way in which the patentee later claimed its solution. The failure of others to propose or provide a workable answer to the problem, and their failed attempts using alternative approaches – formerly important to show unpredictability in the field – now become merely a sign that there was probably some blocking patent that prevented these others from pursuing the one obvious solution. It is hard to square that approach with the long-standing pronouncement that defining a problem in terms of the later-claimed solution is improper. See, e.g., Monarch Knitting Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d 877 (Fed. Cir. 1996); Mintz v. Dietz & Watson, Inc., 679 F.3d 1372 (Fed. Cir. 2012). Moreover, this approach does not jive with reality. There is often more than one solution to a problem – see, for example, the many stimulant and non-stimulant ADHD drugs approved in the U.S. There is no good reason to assume that a long-felt need could only be solved using e.g. the compound claimed in a “blocking patent” or that the only relevant failures of others are those using the same patented compound. The same principle underlies the reason that we have a so-called lead compound analysis used in chemical obviousness cases: it is improper to undercut the inventiveness of the innovator who out of all of the possible substances that could be imagined selected one that through much skill and effort eventually could be manipulated into a successful treatment.

The broader policy implications of these developments are bleak. Most every invention builds on earlier technology that itself may have been patented. We are told that the patent system enables and encourages tinkering with existing inventions, to improve them, or find new ways to use them, or design around them, and sometimes just to see if they work. People engage in such activities every day, and sometimes make new, independently patentable inventions in the process. The significance of their commercial successes, providing solutions to long-recognized problems when others tried and failed, and similar events, shouldn’t be second-guessed lightly on unrealistic assumptions that are impossible to disprove.

We as a society have chosen to incentivize incremental innovation through patent protection because it benefits us a whole. This is true for all areas of technology, including biopharmaceuticals. For example, once we know that a substance is safe from a toxicological perspective, doesn’t it only make sense to encourage innovators to find new conditions that can be treated with the drug rather than starting back at square one? By elevating compound patents as “blocking patents” that cripple a patentee’s ability to later defend the validity of a patent on say the use of the compound to treat a new indication, surely we are likewise crippling the incentives for innovators to undertake this difficult and valuable follow-on research.

The Author

Melissa Brand

Melissa Brand is Associate Counsel and Director of Intellectual Property Policy at the Biotechnology Innovation Organization (BIO), a major trade association with over 1,000 members in the biotechnology industry. In her role at BIO, Ms. Brand advocates on domestic and international intellectual property matters, with a particular emphasis on patent law and policy. Prior to joining BIO, Ms. Brand worked as a patent litigator at Latham & Watkins and Wilson Sonsini Goodrich & Rosati. Ms. Brand also served as a law clerk to the Honorable Kimberly A. Moore at the United States Court of Appeals for the Federal Circuit. She graduated magna cum laude from the University of San Diego School of Law where she was a member of the Order of the Coif and served as a Comments Editor for the San Diego Law Review. She graduated cum laude with a degree in Biomedical Engineering from Vanderbilt University.

Melissa Brand

Hans Sauer is Deputy General Counsel and Vice President for Intellectual Property for the Biotechnology Innovation Organization (BIO), a major trade association representing more than 1,000 biotechnology companies from the medical, agricultural, environmental, and industrial sectors. At BIO, he advises the organization’s board of directors, amicus committee, and various staff committees on patent and other intellectual-property-related matters. Before taking his current position at BIO in 2006, he was chief patent counsel for MGI Pharma Inc. in Bloomington, MN, and senior patent counsel for Guilford Pharmaceuticals Inc. in Baltimore, MD. Mr. Sauer holds a M.S. degree in biology from the University of Ulm in his native Germany, a Ph.D. in neuroscience from the University of Lund, Sweden, and a J.D. degree from Georgetown University Law Center, where he serves as adjunct professor.

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There are currently 4 Comments comments. Join the discussion.

  1. Night Writer October 13, 2018 8:19 am

    The reality is that many of judges on the CAFC are nothing more than shills for the anti-patent movement. They seem to have been selected for their poor character and ignorance of science. The best thing Trump could do is dissolve the CAFC and reform it with ethical people that want to apply our laws.

  2. Concerned II October 13, 2018 10:31 am

    Many excellent points made in this article. The problem highlighted here is endemic to federal patent jurisprudence in general. Jurists (whether at the trial or appellate level), who are trying to do the right thing, continue to be duped by flawed arguments that have a superficial appeal, but which can be exposed by this sort of probing analysis to be deleterious on basic patent policy grounds.
    Whatever the reason, courts too often fail to discern or are not shown the folly of adopting these arguments, which then end up raising the noise level and skewing patent jurisprudence away from its proper ends.
    The hysteria spawned by the so-called “NPE” and “patent troll” nonsense are further examples of this. Since when was enforcement of a US patent ever predicated on whether the patentee itself (or any licensee) practiced the invention claimed in the patent?
    There is no easy solution to these sorts of problems. But a start would be to push for more federal jurists (especially on the CAFC) with patent law backgrounds who are better equipped to weed out fallacious arguments like the “blocking patent” rationale espoused in Merck and Acorda.

  3. Pro Say October 13, 2018 9:23 pm

    The true bad blocking — the type which should never have reared its ugly head and should now have its legs cut out from under it — is the unconstitutional patent-blocking — and patent-and innovation-killing — that’s been going on at least since eBay.

    Nothing could be more un-American.

    Nothing.

    Our country’s founders would spin in their graves if they knew what’s been done to American protected-innovation.

  4. Herb October 14, 2018 8:56 pm

    Night Writer @ 1. Hasn’t that already been done? It’s called the PTAB. Government just can’t manage to hire ethical people that want to apply our laws, without somehow destroying that very quality in them.

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