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Latest Federal Court Cases, 2/14/22

February 14, 2022

Overview

Adapt Pharma Operations Limited v. Teva Pharmaceuticals USA, Inc., Appeal No. 2020-2106 (Fed. Cir. Feb. 10, 2022)

In our Case of the Week, the Court of Appeals for the Federal Circuit, in both the majority opinion and dissent, provided an extended discussion of obviousness analyses. This discussion comes in the context of the Federal Circuit affirming the U.S. District Court for the District of New Jersey’s finding, namely, that U.S. Patent Nos. 9,468,747; 9,561,177; 9,629,965; and 9,775,838 were obvious over prior art.

The patents-in-suit claim methods of treating opioid overdose by intranasal administration of a naloxone formulation, as well as devices for intranasal administration. Naloxone blocks opioids from reaching opioid receptors, thus helping reverse the effects of opioid overdose. Plaintiffs sell the FDA-approved nasal spray NARCAN, which includes naloxone as an active ingredient.

Teva asserted two prior art combinations. In a nearly 100-page opinion, issued after a two-week bench trial, the lower court determined that Teva had shown, by clear and convincing evidence, the patents-in-suit to be obvious in light of Teva’s prior art.

On appeal, Adapt challenged the lower court’s findings: (1) that a skilled artisan would have been motivated to combine the prior art references to arrive at the claimed invention; (2) that the prior art, as a whole, does not teach away from the claimed invention; and (3) related to Adapt’s proffered objective indicia of non-obviousness.

Regarding the skilled artisan’s motivation to combine the prior art, the Federal Circuit found there was ample evidence to support the lower court’s finding that this motivation existed. First, the lower court found that a skilled artisan would be motivated to improve on well-known short-comings in existing intranasal naloxone products, evidenced by a call by the FDA in 2012 for companies to develop an FDA-approvable intranasal naloxone product. The FDA’s 2012 call “identified a need or problem known in the [industry] . . . at the time of the invention,” providing the requisite motivation. Prior art also identified drawbacks of naloxone injections, supporting the conclusion that skilled artisans would be motivated to improve on the existing art. Second, the record supported that skilled artisans would have background knowledge suggesting they combine ingredients in an intranasal naloxone formulation—a combination that was also suggested by prior art. Third, a 2012 FDA statement that it was “curious about the bioavailability of an intranasal naloxone product as compared to existing intravenous or intramuscular products” and prior art suggesting 3mg-4mg intranasal would be equivalent to 1mg injectable, supported the finding that a skilled artisan would be motivated to use the 4mg dosage claimed in the patents-in-suit. And finally, the Federal Circuit held that the “interrelated teachings” of the prior art would give the skilled artisan motivation to combine them.

Turning to whether prior art taught away from the claimed invention, the Federal Circuit rejected Adapt’s arguments that the lower court failed to cite the “teach away” standard in its analysis and that a piece of prior art called Wyse, not found in Teva’s prior art, taught away from using BZK as an ingredient. First, the Federal Circuit noted that FRCP 52(a) only requires the lower court to find the facts and state its conclusions of law separately, and does not require the lower court to articulate the legal standard; furthermore, the Federal Circuit noted that the lower court did in fact cite to precedents for the “teach away” standard. Second, the Federal Circuit noted that there is no rule that a single reference teaching away will mandate a non-obvious finding and that the lower court appropriately considered Wyse in the context of all other prior art.

The Federal Circuit then turned to Adapt’s procedural and substantive arguments with the lower court’s treatment of objective indicia. Procedurally, Adapt argued that the lower court improperly looked to objective indicia only after discussing the prima facie case of obviousness. The Federal Circuit rejected this argument, holding that while courts must consider all evidence relating to obviousness, including objective indicia, courts did not need to include their analysis of objective indicia in their analysis of the prima facie case, and could complete their analysis of the prima facie case and then consider objective indicia. The lower court devoted 20 pages to analyzing objective indicia, and the fact that this analysis only came after the analysis of the prima facie case was complete did not discount the lower court’s thorough review of objective indicia.

Next, the Federal Circuit turned to Adapt’s argument that objective indicia in the form of unexpected results, copying, skepticism, long-felt need, and failure of others mandated a finding of non-obviousness. Regarding unexpected results, the Federal Circuit found ample evidence supported that a skilled artisan would have expected the difference between the results achieved by the claimed invention and those achieved by prior art. Regarding alleged third party copying of the 4mg dose claimed in the patents-in-suit, the lower court found that evidence of two competitors changing to a 4mg dose was unconvincing, and evidence that Teva itself had changed to a 4mg dose was not probative because Teva’s change was mandated as part of the FDA’s approval process for Teva’s generic NARCAN competitor. The Federal Circuit found no issues with these findings. Regarding whether industry skepticism warranted a finding of non-obviousness, the Federal Circuit found that the lower court appropriately weighted industry skepticism within the larger body of evidence and did not, as Adapt argued, “g[i]ve this evidence no weight.” Regarding unmet need, the Federal Circuit agreed that the lower court clearly erred in concluding there was no long-felt unmet need for a needle-free and easy-to-use intranasal naloxone product, but found this to be harmless error as it did not overcome the strong case for obviousness as a matter of law. The Federal Circuit considered the unmet need filled by the claimed invention was most strongly evidenced by the FDA’s 2012 statements. Those statements, just three years before the priority date of the patents, could not demonstrate enough unmet need to overcome the evidence of obviousness. Finally, regarding the failure of others, the lower court gave the appropriate weight to three companies who had tried and failed to receive FDA approval for similar products.

The Federal Circuit concluded by noting this was a close case, but that it is a court of review, not of first report. In its limited role of reviewing factual findings—factual findings made in this case after a two-week bench trial—the Federal Circuit found no basis to disturb the lower court’s legal conclusion that the patents-in-suit were obvious.

Judge Newman dissented on the grounds there was no evidence of a motivation for a skilled artisan to combine the prior art into the claimed invention. Judge Newman criticized the majority for “allowing the challenger to use the challenged patent as a roadmap to reconstruct the claimed invention using disparate elements from the prior art—i.e., the impermissible ex post reasoning and hindsight bias that KSR warned against.” According to Judge Newman, the general motivation stemming from a known need for a better product was not sufficient to explain why a skilled artisan would assemble the component pieces found in the prior art into the claimed invention. Turning to the majority’s discussion of objective criteria, Judge Newman argued that objective criteria are properly evaluated as part of the prima facie case, not after it. Consideration of objective indicia provides a bulwark against what Judge Newman considered to be the flaw in the lower court’s analysis of the prima facie case, namely, “the trap of hindsight when reviewing, what otherwise seems like, a combination of known elements.”

The opinion can be found here.

By Tyler Hall

ALSO THIS WEEK

Intuitive Surgical, Inc. v. Ethicon LLC, Appeal No. 2020-1481 (Fed. Cir. Feb. 11, 2022)

For the second time in two weeks, the Federal Circuit issued a decision that substantially broadens the scope of IPR (inter partes review) estoppel. Last week, we covered the Court’s decision in California Institute of Technology v. Broadcom Limited, Appeal Nos. 2020-2222, 2021-1527 (Fed. Cir. Feb. 4, 2022), holding that IPR estoppel is limited to grounds that reasonably could have been raised in the petition. See that write-up here. This week, the Court put guardrails around the concept of what a petitioner “reasonably could have raised” in an IPR, foreclosing arguments based on the page limits.

In June 2018, Intuitive filed three simultaneous IPR petitions challenging the same claim of an Ethicon patent relating to robotic surgery, with each petition challenging the patent on different prior art grounds. However, one of the IPRs was accorded a later filing date than the other two, and those IPRs terminated in final written decisions in January 2020 while the third remained pending.

Upon issuance of the earlier decisions, the Board found that Intuitive was estopped under 35 U.S.C. § 315(e)(1) from maintaining the remaining pending action, as Intuitive could not “request or maintain a proceeding before the Office with respect to [the challenged] claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” The Board issued its decision terminating Intuitive as a party simultaneously with a final written decision on the third IPR in February 2020, and Intuitive appealed both the estoppel finding and the decision on the merits.

The Federal Circuit agreed with the Board, rejecting Intuitive’s argument that the 14,000-word limit for IPR petitions meant that it could not have “reasonably raised” all of its prior art grounds in the earlier-decided petitions. The Court maintained that Intuitive could simply have phrased its arguments more precisely, or alternatively could have moved for consolidation of the three IPRs to proceed on the same schedule for hearing and final written decision. Because it was undisputed that Intuitive actually knew of the asserted prior art grounds that were not included in petitions filed on the same day, the Court held that § 315(e)(1) was clear that Intuitive could not maintain an action challenging the same claims as IPRs that had been resolved in final written decisions. Because 35 U.S.C. §§ 141(c) and 319 limit the statutory right of appeal in IPR decisions to “parties” to the action, and because Intuitive was not a “party” to the third IPR when the final written decision issued, the Court held that Intuitive had no standing to pursue an appeal and thus had no jurisdiction to review the merits of the Board’s decision on patentability, and dismissed the appeal.

The opinion can be found here.

By Jason A. Wrubleski

GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., Appeal No. 2018-1976, -2023 (Fed. Cir. Feb. 11, 2022)

As the latest chapter in a long ongoing saga, the Federal Circuit denied en banc review of the panel’s August 2021 decision in this case, which we covered as our Case of the Week here. That decision was a rehearing of an October 2020 decision, which we covered as our Case of the Week here. The case involves the use of “skinny labels” on generic drugs that are created to avoid assertions of induced infringement. Judges Newman, O’Malley, Taranto, Chen, and Stoll joined an eight-page opinion by Chief Judge Moore concurring in the denial of rehearing en banc. Judges Prost, Dyk, and Reyna issued a combined 16 pages of opinions dissenting from rehearing en banc.

The opinion can be found here.

By Nika Aldrich

Junker v. Medical Components, Inc., Appeal No. 2021-1649 (Fed. Cir. Feb. 10, 2022)

In an appeal from a district court final judgment finding infringement and awarding damages, the Federal Circuit reversed, finding the patent at issue invalid. The case centered on a design patent for a “Handle for Introducer Sheath”—a medical device. Mr. Junker had been working on designs for an introducer sheath since the mid-1980s. By the 1990s, he was working with companies to manufacture his idea. On January 8, 1999, more than a year before the patent application date, a company that Mr. Junker had been working with sent a letter to Boston Scientific with bulk pricing information. The district court had found that the letter did not constitute an offer for sale and found the patent not-invalid. The Federal Circuit reversed, finding the letter did constitute an offer for sale and holding the patent invalid pursuant to the on-sale bar.

The opinion can be found here.

By Nika Aldrich

Uniloc USA, Inc. v. Apple Inc., Appeal Nos. 2021-1568, -1569, -1570, -1571, -1573 (Fed. Cir. Feb. 9, 2022)

In a second appeal from a district court’s decisions denying Uniloc’s motion to seal, the Federal Circuit vacated and remanded for a second time. Notably, Apple did not oppose Uniloc’s motion. Rather, the Electronic Frontier Foundation intervened, arguing in favor of unsealing. On the first appeal, the Court remanded with instructions for the district court to make a particularized determination as to whether “confidential licensing information of certain third-party licensees of Uniloc’s patents should be sealed.” Specifically, the Court gave remand instructions for the district court to “make particularized determinations as to whether and, if so, to what extent, the materials of each of these parties should be made public.” Ruling on the present appeal, the Court concluded that the district court failed to follow these remand instructions and held that such failure was an abuse of discretion. In addition, the Court held that the district court “made an error of law in making a blanket ruling that the public has a broad right to licensing information relating to patents.” The Court clarified that while the public does have an interest in patents, such interest is “in ensuring that patents are not procured by fraud, or other improper means.” The Court further emphasized that “no rule of law or binding precedent says that the public is generally entitled to know what consideration a patentee receives for licensing its patent.” The Court vacated and remanded a second time, instructing the district court to carry out the examination and make particularized determinations as previously instructed. Circuit Judge Mayer dissented “[b]ecause the third-party licensees failed to supply compelling reasons for overriding the strong presumption in favor of public access.”

The opinion can be found here.

By Annie White

Nippon Shinyaku Co. v. Sarepta Therapeutics, Inc., Appeal No. 2021-2369 (Fed. Cir. Feb. 8, 2022)

In an appeal from the district court’s decision denying Nippon Shinyaku Co., Ltd.’s motion for preliminary injunction, the Federal Circuit reversed and remanded for entry of preliminary injunction. The main issue on appeal was one of contractual interpretation. Interpreting the mutual confidentiality agreement (the “MCA”) at issue, the Federal Circuit held that, as a matter of law, the forum selection clause in the MCA precluded the filing of IPR petitions during the two-year period following the expiration of the covenant not to sue. Because Sarepta Therapeutics, Inc. filed IPR petitions during that time in violation of the forum selection clause, Nippon Shinyaku was likely to succeed on the merits of its claim for breach of contract. In so holding, the Federal Circuit reemphasized the general principle that parties are entitled to bargain away their rights to file IPR petitions, including through the use of forum selection clauses. The Federal Circuit found that the remainder of the preliminary injunction factors rose and fell with the arguments regarding likelihood of success on the merits and found these factors also favored granting the preliminary injunction.

The opinion can be found here.

By Mario E. Delegato

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