Abstract
In Bayer Healthcare Pharmaceuticals, Inc. et al. v. Watson Pharmaceuticals, Inc. et al. 713 F.3d 1369 (Fed. Cir. 2013), the Federal Circuit reversed the District Court's grant of summary judgment and found the asserted patent claims obvious in view of the cited prior art. Neither the Federal Circuit nor the District Court addressed the issue of commercial success despite the fact that the patentee had submitted evidence of commercial success in its opposition to Defendants' motion for summary judgment (but not in support of its own motion for summary judgment). This case report presents the decision of the District Court, the arguments made to the Federal Circuit by the parties and how the Federal Circuit addressed these issues.
Introduction
In Bayer Healthcare Pharmaceuticals, Inc. et al. v. Watson Pharmaceuticals, Inc. et al. 713 F.3d 1369 (Fed. Cir. 2013), the U.S. Court of Appeals for the Federal Circuit invalidated patent claims covering YAZ® (drospirenone (DRSP)/ethinyl estradiol (EE)) tablets thereby paving the way for early introduction of generic versions of this product. Specifically, the Federal Circuit reversed a decision of the U.S. District Court for the District of Nevada which had granted summary judgment in favor of Bayer Healthcare Pharmaceuticals, Inc. and Bayer Schering Pharma AG (collectively “Bayer”) that the asserted claims of U.S. Patent No. RE37,564 (“the ‘564 patent”) were non-obvious in view of prior art raised by Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., Sandoz, Inc., Lupin Ltd. and Lupin Pharmaceuticals, Inc. (collectively “Defendants”). The Federal Circuit also reversed the District Court’s decision denying Defendants’ summary judgment motion for obviousness based on the aforesaid art. Interestingly, the alleged commercial success of YAZ® tablets played no role in the Federal Circuit’s determination of obviousness.
The district court decision
Case history
This case arose out of the Defendants’ filing of Abbreviated New Drug Applications for a generic version of YAZ® tablets that contained a Paragraph IV certification against the ‘564 patent. Id. at 1372. After receiving Defendants’ notices of Paragraph IV certification, Bayer brought suit, alleging infringement of claims 13 and 15 of the ‘564 patent under 35 U.S.C. § 271(e)(2). Id. The asserted claims relate to a combined oral contraceptive (“COC”) comprising (23 or) 24 daily dosage units each containing 20 µg of EE and another hormone, along with four (or five) placebo pills.
While Defendants conceded infringement, they contended that the asserted claims were obvious in view of J. Guillebaud, “The forgotten pill—and the paramount importance of the pill-free week,” 12 Brit. J. Fam. Plan. 35 (1987) (“Guillebaud”), European Patent Application Publication 0 253 607 (“EP ‘607”), Australian Patent Application 55094/90 (“AU ‘094”), and B.G. Molloy et al., “‘Missed Pill’ conception: fact or fiction?,” 290 Brit. Med. J. 1474 (1985) (“Molloy”) as well as B-M. Landgren & E. Diczfalusy, “Hormonal Consequences of Missing the Pill During the First Two Days of Three Consecutive Artificial Cycles,” and N.D. Goldstuck et al., “Use and misuse of oral contraceptives by adolescents attending a free-standing clinic,” 3 Advances in Contraception 335 (1987). Defendants and Bayer both moved for summary judgment that the claims were, respectively, obvious and non-obvious in view of the aforesaid art. Id.
Summary judgment
Background
In considering the underlying technology, the District Court noted that while prior art COCs were administered in a 21/7 regimen (21 days of active pills followed by seven days of placebo pills), the claimed COC employs a 24/4 regimen (24 days of active pills followed by four days of placebo pills). Bayer Schering Pharma AG et al. v. Lupin Ltd. et al., 2012 WL 1080296 at *3 (D.Nev. March 30, 2012). Moreover, the District Court noted that while many prior art COCs contained 30 µg of EE, only two prior art COCs contained 20 µg of EE. Id. at *4.
The District Court further observed that the named inventors had conducted a clinical trial, referred to as Study AA51, to compare a COC containing 20 µg of EE in a 21/7 regimen with the same COC in a 23/5 regimen (23 days of active pills followed by five days of placebo pills). Id. The study established that that “subjects in the 23-day group had significantly less ovarian activity than those in the 21-day group” thereby showing the superiority of the 23-day preparation. Id. at *5. More specifically, “[t]he inventors concluded that ‘the superiority of the 23-day regimen in comparison to the 21-day regimen with regard to the suppression of ovarian activity was shown in this study.’” Id. The District Court concluded that this result was “completely unforeseeable from the teaching of the prior art.” Id.
The prior art
In addressing obviousness, the District Court focused primarily on Guillebaud, EP ‘607, AU ‘094 and Molloy.
Guillebaud: Guillebaud explained that when the seven-day pill free interval (in the 21/7 dosing regimen) is lengthened due to missed pills at the beginning or end of a woman’s monthly cycle, the efficacy of the regimen is put at risk in women who have specific conditions. Id. at *7. Guillebaud concluded that for this subgroup, seven pill-free days “might be the maximum number of days that can elapse before ovulation might occur.” Id. Guillebaud further taught that the pill-free interval should be shortened to 4–5 days for those women who should take a pill containing higher doses of estrogen, starting at 50 µg EE, than contained in the normal COC. Id. at *8. The District Court thus concluded that the “Guillebaud article as a whole unmistakably teaches away from Bayer’s claimed invention” because, among other things, it states that the 21/7 regimen is the preferred COC regimen and that when a 24/4 regimen is employed it should only be used with a higher dose of estrogen (i.e., starting at 50 µg EE), in contrast to the claimed invention which uses only low doses of estrogen (i.e., 20 µg EE). Id. at *7-*8.
EP ‘607 and AU ‘094: EP ‘607 disclosed “a method of providing both hormone replacement therapy (HRT) and contraception for women in ‘pre-menopause.’” Id. at *8. That is, “the invention disclosed in the EP ‘607 application is for older women who need hormone replacement therapy to treat pre-menopausal symptoms.” Id. EP ‘607 proposed a COC containing a low-dose estrogen which was assumed to be effective for contraception. Id. at *9. EP ‘607 taught that the COC is to be “administered for 23–26 days followed by a corresponding 2–5 day hormone-free-interval, for a total of 28 days in the administration cycle” which includes a 24/4 regimen. Id.
Like EP ‘607, AU ‘094 “is primarily directed to premenopausal women and the unique hormonal needs of such women.” Id. AU ‘094 disclosed “the use of drospirenone (DRSP) in a broad range of doses” and that the skilled person could use DRSP analogously to the methods in EP ‘607. The District Court noted that [t]he AU ‘094 application statement that DRSP can be used ‘analogously’ with the EP ‘607 method only teaches the skilled person that DRSP can replace the non-DRSP progestins listed in EP ‘607 for premenopausal women in need of hormone replacement therapy (“HRT”).
Accordingly, the District Court noted that there is no teaching or even suggestion to skilled persons in either AU ‘094 or EP ‘607 that they should deviate from over three decades of the 21/7 regimen when developing a general purpose COC that is not intended for premenopausal women who need simultaneous HRT. Id.
Molloy: Molloy reported the results of a small study measuring ovarian follicular growth in 19 women taking various oral contraceptives. Id. The subjects were all taking pills containing between 30 and 40 µg of estrogen, administered in a 21/7 regimen. Id. Based on observed small ovarian follicle growth, Molloy “concluded with the suggestion of a 23/5 or 21/7 regimen of COCs containing 30 to 40 µg EE … [but] did not report any efficacy data for a 23-day regimen, nor suggest use of very low-dose pills. … ” Id. The District Court noted that “[b]ased on small follicle size alone Molloy made the unsupported suggestion that women taking a COC containing 30 to 40 µg EE could use a 23/5 regimen to reduce the risk of missed-pill conception.” Id. at *11.
Objective evidence of non-obviousness
In addressing secondary considerations of non-obviousness, the District Court observed that Study AA51 “showed a statistically significant difference in suppressed ovarian activity between the claimed regimen and the 21-day regimen” and that the results were “unexpected and surprising.” Id. at *11. The court also pointed out that the results of the AA51 Study were “published in a peer-reviewed journal that experts cited repeatedly for 14 years.” Id. The District Court also noted that later studies reported the “surprising real-world efficacy and safety of Bayer’s claimed invention. … ” Id. at *12. The District Court further noted that Bayer’s invention was initially met with skepticism from the FDA but was eventually widely praised by experts in the field. Id. at *12-*13. In addition, the District Court noted that various generic manufacturers had copied Bayer’s product as further evidence of non-obviousness. Id. at *13. The District Court did not mention commercial success as evidence of non-obviousness.
Obviousness analysis
Having reviewed the relevant art, the District Court concluded that “rather than establishing obviousness by clear and convincing evidence, the prior art clearly teaches away from the [‘564] Patent’s 23/5 or 24/4 dosing regimen, except in very specific circumstances.” Id. at *14. The District Court specifically noted that Guillebaud taught away from the claimed invention, for the reasons set forth above, and further noted with respect to Molloy, that three separate letters were written by scientists skilled in the art of oral contraception criticizing Molloy’s data and suggestions to shorten the PFI [“Pill Free Interval”]. Primarily, the responses criticized Molloy for increasing exposure to artificial steroids. Included in those criticizing Molloy was Guillebaud. Id. at *15.
The District Court further found that the “prior art related to 21/7 COCs containing 20 [µg] of EE further establishes that the prior art as a whole taught the skilled person that there was no need to develop a new regimen for low-dose COCs.” Id. Specifically, the District Court noted that the person of ordinary skill in 1993 “knew that there were two low-dose COCs on the market using the 21/7 monthly regimen” which were both safe and effective. Id. “This widespread knowledge … taught away from the claimed invention and removed motivation to develop a different regimen for COCs containing 20 µg of EE.” Id. The District Court further stated that “[w]hile the cited references … provide a hindsight roadmap to finding obviousness, structuring the prior art in order to modify and reconstruct the invention is impermissible.” Id. at *16. Thus, the District Court found that Defendants’ reliance on the select portions of the prior art “impermissibly pick and choose from the prior art references without examining the prior art as a whole.” Id.
The District Court also found that the results of Study AA51 were “unexpected and surprising,” further supporting a finding of non-obviousness. Id. at *19. The District Court further pointed to expert skepticism, industry praise and copying as evidence of non-obviousness. Of note, the District Court did not mention commercial success even though Bayer had raised commercial success in opposing Defendants’ motion for summary judgment of obviousness; Bayer did not, however, raise commercial success in support of its motion for non-obviousness, presumably because it did not want to introduce a factor which could become a genuine dispute as to material fact which would preclude summary judgment in its favor. See Combined Petition for Panel Rehearing and Rehearing En Banc at 4, Bayer Healthcare Pharmaceuticals, Inc. et al. v. Watson Pharmaceuticals, Inc. et al. 713 F.3d 1369 (Fed. Cir. 2013).
For the foregoing reasons, the District Court denied Defendants’ motion for summary judgment of obviousness and granted Bayer’s motion for summary judgment of non-obviousness in view of the art raised by Defendants. Id. at *21.
The Federal Circuit
After losing below, Defendants appealed both of the District Court’s summary judgment decisions – its grant of Bayer’s motion for summary judgment of non-obviousness and its denial of Defendants’ motion for summary judgment of obviousness – to the Federal Circuit. Bayer did not raise commercial success in its appellate brief responding to Defendants’ opening brief.
The Federal Circuit decision
In its decision, the Federal Circuit began its analysis by noting that it agreed with Defendants that the district court erred in holding the claims not invalid … [because] the cited prior art references set forth every limitation required by the asserted claims and provide express motivation to combine those teachings to derive the claimed COC products. Bayer 713 F.3d at 1374.
More specifically, the Federal Circuit noted that [w]ith every limitation of the asserted claims thus disclosed in the cited references, the question, as the district court recognized, becomes whether a person of ordinary skill in the art would have been motivated to combine those teachings to derive the claimed subject matter with a reasonable expectation of success. … The prior art before us provides that motivation. Id. at 1375.
With respect to the teachings of EP ‘607 and AU ‘094 and Bayer’s contention that their disclosure was “primarily directed to older women who have reached premenopause and are in need of hormone replacement therapy” the court noted that “those references plainly disclose preparations with hormone replacement and contraceptive applications, and the product claims at issue do not distinguish between target patient populations, whether by age or otherwise.” Id. at 1376. The Federal Circuit further noted that several of the cited references [including Molloy and Guillebaud] highlight evidence that the unregulated ovarian activity that occurs during a seven-day pill-free interval can achieve significant follicular development, and those references also express concern that inadvertently extending the traditional pill-free interval via one or more missed pills could lead to escape ovulation and unintended pregnancy. Id. at 1375.
With respect to Bayer’s argument that the cited prior art taught away from the claimed invention, the Federal Circuit noted that any such statements “do not overcome the express teachings of multiple references, including Guillebaud, that a shorter pill-free interval would improve COC efficacy. Furthermore, Guillebaud may have suggested condensing the pill-free interval while concurrently increasing the hormone dose for at-risk patients, but those two measures are never described as mutually dependent, and each could be expected to reduce missed-pill ovulation risks with or without the other.” Id. at 1376.
The Federal Circuit found that evidence of secondary indicia of non-obviousness “including alleged unexpected results, expert skepticism, industry praise, and copying by others, is legally insufficient.” Id. at 1377. The Federal Circuit further noted that Bayer’s data showing that “the 23/5 administration results in reduced follicular activity compared to 21/7 dosing … merely confirm that administering additional active pills results in additional follicular suppression, which would have been a matter of ‘common sense,’ as even Bayer’s expert agreed.” Id. The Federal Circuit similarly dismissed Bayer’s argument that the claimed invention was widely praised, noting that “bare journal citations and self-referential commendation fall well short of demonstrating true industry praise.” Id. Finally, the Federal Circuit quickly dismissed the alleged evidence of copying, stating that “[s]uch evidence of copying is not probative of non-obviousness because a showing of bioequivalence is required for FDA approval.” Id. In concluding its analysis, the Federal Circuit noted that it had “considered Bayer’s remaining arguments and find them unpersuasive.” Id. Accordingly, the Federal Circuit reversed the District Court’s decision and found the claims of the ‘564 patent obvious in view of the cited art. Id.
Bayer’s combined petition for panel rehearing and rehearing en banc
Bayer filed a combined petition for panel rehearing and rehearing en banc. In its petition, Bayer argued that the District Court had failed to consider its evidence of commercial success. Combined Petition for Panel Rehearing and Rehearing En Banc at 4, Bayer Healthcare Pharmaceuticals, Inc. et al. v. Watson Pharmaceuticals, Inc. et al. 713 F.3d 1369 (Fed. Cir. 2013). Specifically, Bayer argued that the district court did not mention or rely upon Bayer’s evidence of commercial success [and] when the Panel reversed and rendered judgment of invalidity, it did so without mention or discussion of Bayer’s evidence of commercial success. At a minimum, that evidence created a genuine issue of material fact precluding entry of summary judgment for the generics. Id. at 4–5.
Bayer further noted that the Defendants had conceded that YAZ® tablets are embodiments of the claimed invention and are commercially successful. Id. at 5. Bayer also noted that “[e]ven if the generics had made out their prima facie case on obviousness, the only proper course was for the panel to remand.” Id. at 6. Bayer conceded that it had “made the strategic decision not to include evidence of commercial success in its own motion for summary judgment before the district court.” Id. However, Bayer did offer evidence of commercial success in response to Defendants’ motion for summary judgment of obviousness. Id. at 1. Bayer thus argued, “if the Court renders judgment without having considered Bayer’s evidence of commercial success, patentees must now include any and all arguments in support of their own motions for summary judgment. Id. at 6. According to Bayer, remand was the only option so that obviousness could be considered in the context of the alleged commercial success of YAZ® tablets. Id. at 7.
Furthermore, Bayer argued that the panel did not appreciate Bayer’s evidence of unexpected results. “What was unexpected was the extraordinary
In addition, Bayer argued that in its obviousness analysis, the Panel did not analyze three categories of key evidence including: the prior art teachings
Finally, Bayer argued that the Panel had applied an incorrect standard for summary judgment by not viewing “Bayer’s evidence in the light most favorable to Bayer, nor resolve all inferences in Bayer’s favor.” Id. Accordingly Bayer requested that its petition be granted. Id. at 15. In determining how to proceed, the Federal Circuit invited Defendants to respond to Bayer’s petition.
Defendants’ response to Bayer’s petition
In their response, Defendants noted first and foremost that with respect to the issue of commercial success, “Bayer itself had made the strategic decision not to present any such evidence in this appeal and, thus, there was no evidence for the Panel to consider.” Defendants’-Appellants’ Response to Plaintiffs-Appellees’ Combined Petition for Panel Rehearing and Rehearing En Banc at 1, Bayer Healthcare Pharmaceuticals, Inc. et al. v. Watson Pharmaceuticals, Inc. et al. 713 F.3d 1369 (Fed. Cir. 2013). Defendants noted that “Bayer has only itself to blame” and that “Bayer’s failure results in a waiver of this argument on appeal.” Id. More specifically, Defendants noted that Bayer’s decision to selectively present evidence of commercial success “was clever by half” and that “Bayer’s strategic decision not to present evidence of alleged commercial success in this appeal results in a waiver of that argument and cannot justify its request for Panel rehearing.” Id. at 4.
Defendants further argued that the Panel had correctly concluded that Bayer’s alleged unexpected results were in fact, expected, and that the Panel had correctly found the claims obvious in view of the prior art, applying the correct summary judgment standard. Id. at 1–2. With respect to unexpected results, Defendants argued that [t]he Panel’s holding is perfectly consistent with Federal Circuit precedent that, in order to demonstrate unexpected results, there must be ‘a new and unexpected result which is different in kind and not merely different in degree from the results of the prior art.’
Accordingly, Defendants requested that Bayer’s petition be denied. Id. at 15.
On 12 August 2013, the Federal Circuit denied Bayer’s petition without opinion.
Conclusion
In Bayer Healthcare Pharmaceuticals, Inc. et al. v. Watson Pharmaceuticals, Inc. et al. 713 F.3d 1369 (Fed. Cir. 2013), the Federal Circuit reversed the District Court and found the asserted claims of the ‘564 patent obvious – without any discussion of commercial success. Whether or not consideration of commercial success would have changed the court’s decision is a matter of speculation. However, the Federal Circuit’s decision implies that by not specifically presenting issues of commercial success on appeal – even though such evidence had been presented before the District Court in opposing Defendants’ motion for summary judgment, but not in support of its own motion for summary judgment – Bayer had foregone an opportunity to have commercial success considered as part of the obviousness analysis. The Federal Circuit’s decision should give a patentee pause before deciding to selectively proffer evidence of alleged commercial success if such evidence exists.