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Fresh From the Bench: Recent Patent Cases From the ‎Federal Circuit ‎

August 29, 2014

Overview

Planet Bingo In a non-precedential opinion the Circuit determines that patents directed to computer-aided methods and systems for managing a game of Bingo do not claim patentable subject matter, noting that the case is a straight-forward application of Alice Corp. v. CLS Bank.

Leo Pharmaceutical – Based largely on its conclusion that the claimed combination would not have been "obvious to try," and that the objective indicia of unexpected result, commercial success, and long felt but unsolved need all support a finding of nonobviousness, the panel reverses the Board's determination that a patent to a treatment for psoriasis was invalid under ‎§103.

Planet Bingo LLC v. VKGS LLC, Fed. Cir. Case 2013-1663 (August 26, 2014)

The district court granted summary judgment of invalidity, concluding that the patents do not claim patentable subject matter under 35 U.S.C. § 101. The claims at issue recite computer-aided methods and systems for managing the game of bingo. Generally, the claims recite storing a player's preferred sets of bingo numbers; retrieving one such set upon demand, and playing that set; while simultaneously tracking the player's sets, tracking player payments, and verifying winning numbers.

A patent may be obtained for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. The Supreme Court has "long held that this provision contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable." Alice Corp. v. CLS Bank, 134 S. Ct. 2346, 2354 (2014). But the application of these concepts to new and useful ends remains eligible for patent protection.

The patents claim managing a bingo game while allowing a player to repeatedly play the same sets of numbers in multiple sessions. According to the panel, reviewing the claims de novo, the district court correctly concluded that managing the game of bingo "consists solely of mental steps which can be carried out by a human using pen and paper." Like the claims at issue in Gottschalk v Benson, 409 U.S. 63 (1972) not only can these steps be "carried out in existing computers long in use," but they also can be "done mentally."

The claims here are similar to the claims at issue in Bilski v. Kappos, 130 S. Ct. 3218 (2010), and Alice, which the Supreme Court held were directed to "abstract ideas." For example, the claims here recite methods and systems for "managing a game of Bingo." This is similar to the kind of "organizing human activity" at issue in Alice. And, although the patents are not drawn to the same subject matter at issue in Bilski and Alice, these claims are directed to the abstract idea of "solv[ing a] tampering problem and also minimizing other security risks" during bingo ticket purchases. This is similar to the abstract ideas of "risk hedging" during "consumer transactions" in Bilski, and "mitigating settlement risk" in "financial transactions" in Alice, that the Supreme Court found ineligible. Thus, the panel holds that the subject matter claimed in the patents is directed to an abstract idea.

Abstract ideas may still be patent-eligible if they contain an "‘inventive concept' sufficient to ‘transform' the claimed abstract idea into a patent-eligible application." Alice. Apart from managing a game of bingo, the claims at issue also require "a computer with a central processing unit," "a memory," "an input and output terminal," "a printer," in some cases "a video screen," and "a program . . . enabling" the steps of managing a game of bingo. These elements, in turn, select, store, and retrieve two sets of numbers, assign a player identifier and a control number, and then compare a winning set of bingo numbers with a selected set of bingo numbers. "If a patent's recitation of a computer amounts to a mere instruction to ‘implemen[t]' an abstract idea ‘on . . . a computer,' . . . that addition cannot impart patent eligibility." Alice. In this case, the claims recite a generic computer implementation of the covered abstract idea.

Planet Bingo argues that the patents recite "significantly more" than an abstract idea because the invention includes "complex computer code with three distinct subparts." The panel disagrees, noting that the claims recite a program used for the generic functions of storing, retrieving, and verifying a chosen set of bingo numbers against a winning set of bingo numbers. And, as was the case in Alice, "the function performed by the computer at each step of the process is ‘purely conventional.'" Accordingly, the panel holds that the claims at issue do not have an ‘inventive concept' sufficient to ‘transform' the claimed subject matter into a patent-eligible application.

Comment:

Planet Bingo is only the second post- Alice case in which the Circuit has considered the patentable subject matter issue. In the first case, Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., Fed. Cir. ‎Case ‎‎2013-1600-18, (July 11, 2014), the panel found patent-ineligible a claim reciting a process of taking two data sets and combining them into a single data set, the ‎device profile. According to the ‎panel, the claim recited an ineligible abstract process of gathering and ‎combining data that does not require ‎input from a physical device. Without additional limitations, a ‎process that employs mathematical algorithms to ‎manipulate existing information to generate additional ‎information is not patent eligible. ‎ ‎

Leo Pharmaceutical Products, Ltd. v. Teresa Stanek Rea, Fed. Cir. Case 2012-1520 (August 12, 2014)

This appeal arises from an inter partes reexamination ‎of a ‎patent owned by Leo concerning pharmaceutical compositions for ‎the topical treatment of certain skin conditions such as psoriasis. The '013 patent teaches that simultaneous treatment ‎with vitamin D and corticosteroids can heal psoriasis faster ‎and more effectively. However, a storage stable combination ‎of vitamin D and corticosteroids in a single formulation ‎did not exist in the prior art. After recognizing the storage stability problem, Leo ‎began testing formulations that combined vitamin D analogs and corticosteroids, and discovered that a new set of solvents, including polyoxypropylene 15 stearyl ether (POP-‎‎15-SE), solved the storage stability problem by allowing the vitamin D analog and the corticosteroid to coexist in a ‎single pharmaceutical product.‎

Construction of "storage stable"

Under its ‎accepted and customary meaning, "storage stable" would ‎include a composition that maintains its stability during ‎its shelf life for its intended use as an approved ‎pharmaceutical product for sale and home use by ordinary ‎customers. The Board erred by narrowing the definition of "storage stable" to something far short of its broadest reasonable meaning. The plain meaning of "storage stable" is ‎broader than the disclosure in example two.‎ Accordingly, the panel vacates the Board's construction. Because it is unnecessary for this court to adopt a ‎specific alternative construction to resolve this appeal, ‎this court declines to do so, leaving that question to a ‎later forum where the issue is determinative.‎

Obviousness‎

During reexamination, Leo presented several medical research articles published as early as ‎1995 discouraging the combination of a vitamin D analog with a corticosteroid because of the stability problems of ‎vitamin D analogs at lower pHs. ‎These articles taught away from mixing topical vitamin D ‎formulations with other drugs. Even though studies in the prior art compared the effectiveness of treating psoriasis with vitamin D versus corticosteroid, ‎those studies did not describe combining the two into one formulation. These ‎researchers recognized possible advantages from combining a vitamin D treatment with topical corticosteroids,‎ but nevertheless they recommended a two-drug regimen ‎where patients applied the drugs at different times of a ‎day or on alternating days.

Although Dikstein and Serup attempt the combination of a vitamin D analog with a corticosteroid, neither ‎discloses or addresses the stability problems of combining ‎vitamin D analogs and corticosteroids into one pharmaceutical formulation. Leo presented experimental evidence to the Board that each of these ingredients harmed ‎the storage stability of the vitamin D analog and corticosteroid combination. Moreover, because neither Dikstein nor Serup recognized or disclosed the stability problem, the record shows ‎no reason for one of ordinary skill in the art to attempt to ‎improve upon either Dikstein or Serup using Turi. The ‎ordinary artisan would first have needed to recognize the ‎problem, i.e., that the formulations disclosed in Dikstein ‎and Serup were not storage stable. Only after recognizing the existence of the problem ‎would an artisan then turn to the prior art and attempt to ‎develop a new formulation for storage stability. If these discoveries and advances were routine and relatively easy, the record would undoubtedly have shown that some ‎ordinary artisan would have achieved this invention within months of Dikstein or Serup. Instead this invention does not appear for more than a decade.‎

Thus, in the face of such divergent compositions with ‎express disclaimers of the other's contents, the record ‎showing that Turi, Serup, and Dikstein describe compositions for the same therapeutic purpose does not rise to the ‎level of a motivation to combine. Without more, and ‎especially in the face of such strong objective indicia of ‎nonobviousness discussed infra, the Board erred by using ‎hindsight to determine that the addition of Serup's or ‎Dikstein's vitamin D analog to Turi's formulation would ‎have been obvious.‎

The '013 patent's claimed combination would not have ‎been obvious to try. "Where the prior art, at best gives ‎only general guidance as to the particular form of the ‎claimed invention or how to achieve it, relying on an ‎obvious-to-try theory to support an obviousness finding is ‎impermissible." Further, " KSR did not create a ‎presumption that all experimentation in fields where ‎there is already a background of useful knowledge is ‎‘obvious to try,' without considering the nature of the ‎science or technology."

And, even if it was obvious to experiment with these ‎options, "there is nothing to indicate that a skilled artisan ‎would have had a reasonable expectation that such an ‎experiment would succeed in being therapeutically effective." Without a ‎reasonable expectation of success or clues pointing to the ‎most promising combinations, an artisan could have ‎spent years experimenting without success.‎

The Circuit recognizes ‎an important distinction between combining known options ‎into "a finite number of identified, predictable solutions," ‎ KSR, and "‘merely throwing ‎metaphorical darts at a board' in hopes of arriving at a ‎successful result," Cyclobenzaprine. While the record ‎shows that, as early as 1995, the prior art indicated that ‎both vitamin D analogs and corticosteroids were effective ‎treatments for psoriasis, that same prior ‎art gave no direction as to which of the many possible ‎combination choices were likely to be successful. Instead, ‎the prior art consistently taught away from combining ‎vitamin D analogs and corticosteroids.‎

Objective Evidence of Nonobviousness

This court has ‎emphasized that consideration of the objective indicia is ‎ part of the whole obviousness analysis, not just an after-‎thought. When an applicant ‎appeals an examiner's objection to the patentability of an ‎ application's claims for obviousness, the PTO necessarily ‎has the burden to establish a prima facie case of ‎obviousness which the applicant then rebuts. However, during inter partes ‎reexamination, the Board is reviewing evidence of obviousness—including objective indicia—submitted by two ‎adversarial parties for the claims of an issued patent. Thus, ‎the Board should give the objective indicia its proper weight and place in the obviousness analysis, and ‎not treat objective indicia of nonobviousness as an afterthought.‎

Unexpected results are useful to show the "improved ‎properties provided by the claimed compositions are much ‎greater than would have been predicted." This record shows "extensive experimental evidence" of unexpected results that contradict the ‎Board's obviousness finding. The Board concluded that the "unexpected results" claimed by Leo were not surprising or unexpected. ‎However, substantial evidence does not support the Board's ‎conclusion.‎

During reexamination, the inventors of the '013 patent submitted test results that analyzed the Dikstein ‎and Serup formulations. The inventors found that the ‎formulations disclosed by Dikstein and Serup result in ‎significant degradation of the vitamin D analog and ‎corticosteroid. The inventors also tested an improvement of ‎Serup using Turi, by replacing Serup's solvent with POP-‎‎15-SE, and still found significant degradation of the ‎corticosteroid component. These test ‎results are a strong indication that the '013 patent's ‎combination of known elements yields more than just ‎predictable results.‎

In addition to evidence of unexpected results, Leo ‎provided other objective indicia of non-‎obviousness. For example, the commercial success of Leo ‎Pharmaceutical's Taclonex® ointment is a testament to ‎the improved properties of the '013 patent's claimed ‎invention. Taclonex® is the first FDA-approved drug to ‎combine vitamin D and corticosteroids into a single formulation for topical application. While FDA approval is ‎not determinative of nonobviousness, it can be relevant in ‎evaluating the objective indicia of nonobviousness. Here, FDA approval ‎highlights that Leo Pharmaceutical's formulation is truly ‎storage stable, something that the prior art formulations ‎did not achieve.‎

The record also shows evidence of long felt but unsolved need, i.e., the need for a single formulation to treat ‎psoriasis. The length of the intervening time between the ‎publication dates of the prior art and the claimed invention can also qualify as an objective indicator of nonobvi‎ousness. Here, the researchers were aware of the benefits of using both vitamin D ‎and corticosteroids in the treatment of psoriasis as early ‎as 1986. And Turi, ‎upon which the Board relied to make its case, issued in ‎1978. Yet, it was not until the '013 patent's filing in ‎2000— twenty-two years after Turi and fourteen years after Dikstein—that the solution to the long felt but unsolved ‎need for a combined treatment of vitamin D and corticosteroid was created.

Here, the objective indicia—taken in sum—are the ‎most "probative evidence of nonobviousness . . .enabling ‎the court to avert the trap of hindsight." Therefore, the panel reverses the Board's obviousness determination.

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