Federal Circuit Affirms District Court Obviousness Determination and Routine-Experimentation Rationale

Under 35 U.S.C. § 103, patentability of an invention is not to be negated by the manner in which the invention was made. This provision, according to past Federal Circuit decisions, “was enacted to ensure that routine experimentation does not necessarily preclude patentability.” Honeywell Int’l Inc. v. Mexichem Amanco Holdings S.A. DE C.V., 865 F.3d 1348, 1356 (Fed. Cir. 2017). Nevertheless, in certain cases, the Federal Circuit has considered routine experimentation or testing as a reason to invalidate a patent.  On October 26, 2017, in Merck Sharp & Dohme Corp. v. Hospira, Inc., the Federal Circuit did so again.

In a 2-1 decision, the Federal Circuit in Merck affirmed a district court judgment of obviousness, finding it reasonable for the district court to deduce from the evidence that the patented method “would have been discovered by routine experimentation while implementing known principles.” No. 2017-1115, slip op. at 9 (Fed. Cir. Oct. 26, 2017). The Federal Circuit then went on to find no clear error in the district court’s determination that the patent owner’s objective evidence of commercial success and copying “could not overcome the weight of the evidence that the claimed process was substantially described in the prior art and required only improvement by the use of established variations.” Id. at 10.

The patent claims at issue were directed to a process for preparing a stable formulation of the antibiotic compound ertapenem, which is known to be unstable because of two degradation reactions—hydrolysis of lactam nitrogen and dimertization via pyrrolidine nitrogen. The patent owner’s solution, according to the Federal Circuit, was to “create [a] carbon dioxide solution first, at [a] pH range disclosed in the prior art; then simultaneously add the entrapenem and a base to the solution, in order to maintain the pH range taught by the prior art; maintain a low temperature during the process; and lyophilize the final product to contain less than 10% moisture content.” Merck, slip op. at 9 (emphasis in original). The Federal Circuit acknowledged that the italicized portions—“namely, the order of the steps, the simultaneous addition of base, the specific temperature range, and a final moisture content of less than 10%”—were not expressly disclosed in the prior art. Id. However, it also found that these missing elements were “all experimental details that one of ordinary skill would have utilized via routine experimentation, armed with the principles disclosed in the prior art.” Id. Thus, the Federal Circuit concluded that the district court’s analysis involved no legal error.

As to the patent owner’s objective evidence, the Federal Circuit credited the district court’s findings that there was commercial success linked to the merits of the invention and then criticized the district court for discounting that evidence because of the existence of another patent directed to ertapenem itself, reasoning that “multiple patents do not necessarily detract from evidence of commercial success of a product or process, which speaks to the merits of the invention, not to how many patents are owned by a patentee.” Merck, slip op. at 10. The Federal Circuit also credited the district court’s findings of copying and rejected the accused infringer’s arguments that evidence of copying is not compelling in the context of ANDA cases, explaining that the Hatch-Waxman Act “does not require [generic drug manufacturers] to copy the NDA holder’s process of manufacturing the drug.” Id. at 11 (emphasis in original). Ultimately, however, it was not enough to persuade the Federal Circuit to disturb the district court’s obviousness determination.

According to the Federal Circuit, “[t]he claimed process differs from the disclosure of the [prior art] only in routine details, the implementation of which would have been well within the capabilities of one of ordinary skill in the art.” Merck, slip op. 11-12. Accordingly, it affirmed the district court’s judgment.

Notably, Judge Newman issued a dissenting opinion echoing Judge Reyna’s dissent in Intercontinental Great Brands LLC v. Kellogg North America Co., 869 F.3d 1336 (Fed. Cir. 2017), which was highlighted in our Federal Circuit Weekly blog post on September 12, 2017. Like Judge Reyna, Judge Newman called on the Federal Circuit to prohibit prima facie findings of obviousness prior to consideration of objective indicia of non-obviousness:

It is time to remedy our inconsistent treatment of the procedures and burdens in applying the evidentiary factors of obviousness, despite the clarifying precedent in Graham v. John Deere Co., 383 U.S. 1 (1966). The Court in Graham resolved prior inconsistencies and established what was seen as a wiser standard of obviousness. The Court established the factual premises and fixed the placement of the burdens. It is time to restore this salutory rigor.

Merck, dissent slip. op. at 1. In Judge Newman’s opinion, the Court should have “reestablish[ed] the proper analytic criteria under the four Graham factors” and remanded “to the district court to apply the correct law.” Id. at 6.

As we noted in our September 12 blog post, only time will tell whether and how this continuing split among Federal Circuit judges will be resolved.

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