Merck Sharp & Dohme Corp. v. Hospira, Inc., No. 2017-1115, (Fed. Cir. Oct. 26, 2017) (Before Newman, Lourie, and Hughes, J.) (Opinion for the court, Lourie, J.) (Dissenting opinion, Newman, J.).
The District of Delaware found that one of two patents asserted by Merck was not invalid and infringed, and the other patent, while infringed, was invalid as obvious. Merck appealed the conclusion of invalidity. The Federal Circuit affirmed.
The relevant patent was directed to a process for preparing a stable formulation of an antibiotic compound by reducing degradation pathways for two unstable portions of the antibiotic compound. The patent accomplished this reduction by minimizing both dimerization and hydrolysis at the two unstable portions. Prior art taught that the same antibiotic compound could be stabilized using dimerization.
The Court agreed with the district court that while three steps of the patent were not “individually taught by the prior art, the ‘recipe’ for the final formulation was disclosed” when the prior art taught dimerization by “reacting the pyrrolidine nitrogen with carbon dioxide to form a ‘carbon dioxide adduct.’” The “order of the steps, the simultaneous addition of the base, the specific temperature range, and a final moisture content of less than 10%,” were seen as “nothing more than conventional manufacturing steps” and artisans “would have utilized [these steps] via routine experimentation, armed with the principles disclosed in the prior art.”
The Court next looked at Merck’s objective evidence of nonobviousness. The Court found no error in the district court’s conclusion that while there was evidence of commercial success and copying, the evidence was insufficient to outweigh the “strong prima facie case of obviousness.” The Court pointed to blocking patents as weakening the inference of nonobviousness from commercial success. “[w] where market entry was precluded by another patent and by exclusive statutory rights…the inference of nonobviousness…from evidence of commercial success is weak.” The Court also found that evidence of copying may be relevant, even though Hatch-Waxman ANDA cases typically require copying, but agreed with the district court that “in any event…the evidence of copying could not overcome the weight of the competing evidence of obviousness.”
Judge Newman dissented, lamenting the “inconsistent treatment of the procedures and burdens in applying the evidentiary factors of obviousness.” Judge Newman’s view is that the obviousness “question is whether the entirety of the evidence relating to the [patent], including the evidence of [objective indications of nonobviousness], establish obviousness.” The district court thus incorrectly used “a shortcut … convert[ing] three of the four Graham factors into a self-standing ‘prima facie’ case, whereby the objective considerations must achieve rebuttal weight.” Judge Newman would have remanded the case to apply the “correct law.”
If the strongest evidence of nonobviousness are objective indicia, it is critical for the patentee to persuade the finder of fact that all four Graham factors need to be evaluated contemporaneously in making an obviousness determination.