Issue Date: June 11, 2007
THE ABILITY to patent devices, methods, processes, and compositions of matter is essential to every economic sector in the U.S., including chemical-related areas. After all, the exclusive rights granted by a patent give an individual or company a limited-time monopoly to that invention before others can exploit it.
To obtain such rights, however, inventors must show that their innovations are new, useful, and nonobvious to someone skilled in the field. These criteria have been around for a long time, but a recent Supreme Court decision has called into question how the courts and the Patent & Trademark Office (PTO) determine the latter requirement; that is, what is the appropriate standard to determine if an invention is nonobvious.
The decision in the case of KSR International Co. v. Teleflex, Inc. focuses on whether the U.S. Court of Appeals for the Federal Circuit—the court that hears all patent appeals—applied the correct standard to determine if a patented invention was nonobvious and therefore valid. The case involved a patent that was granted to Teleflex in 2001 for an adjustable gas pedal with an electronic sensor. KSR challenged the patent on the grounds that the work covered was obvious because it simply combined elements from existing patents.
A lower court initially agreed with KSR, finding the patent to be invalid because the invention it covered was obvious enough that someone skilled in the field would realize that the two previously patented elements could be combined. The case was appealed to the Federal Circuit, which reversed the lower court's decision, finding that the prior references did not specifically teach, suggest, or motivate such a combination of elements. This teaching, suggestion, or motivation (TSM) test has been the standard used by the courts and PTO to evaluate obviousness for more than 20 years.
In the unanimous decision issued on April 30, the Supreme Court found that the Federal Circuit court had applied its TSM test too rigidly and narrowly, and it reversed the circuit court's finding. The decision sent a clear message to the courts and to PTO that evaluating obviousness cannot be done with a single standard.
"The obviousness analysis cannot be confined by a formalistic conception of the words 'teaching, suggestion, and motivation,' or by overemphasis on the importance of published articles and the explicit content of issued patents," wrote Justice Anthony Kennedy in the opinion for the Supreme Court. "When a court transforms the general principle into a rigid rule that limits the obviousness inquiry, as the Court of Appeals did here, it errs."
The ruling instructs the courts and PTO to take a broader approach to defining obviousness that can still include its TSM test. For example, the Supreme Court stated that an invention would not be patentable if the combination of elements claimed would be obvious to try by someone skilled in the field or, in other words, that the combination does not need to be explicitly indicated in past work, as required under the TSM test. The court also said that if a person of ordinary skill in the field could combine parts of multiple patents like pieces of a puzzle to get a predictable result, the invention may be considered obvious.
"One of the Supreme Court's purposes in deciding the KSR case was to reinstate the broad standard used in the past for assessing the obviousness of inventions and thereby dethrone the Federal Circuit's own, more recently formulated, and narrower teaching-suggestion-motivation test as the only way to determine it," according to Charles E. Miller, a patent lawyer at Dickstein Shapiro LLP in New York City.
"The Court did not reject the TSM test per se, but only the inflexible use of it prescribed for trial courts by the Federal Circuit," he adds. "The Court reasoned that, while the TSM test adds value to the inquiry, other factors, such as whether it would have been routinely obvious to try a compound to see if it works, must be considered in adjudging obviousness even though the TSM test is not satisfied."
Initial reaction to the KSR decision was mixed. Experts in the intellectual property field were split on what effect this ruling would have on chemically related fields, which, unlike the mechanical invention involved in the KSR case, typically have unpredictable results.
"The emphasis by the Supreme Court justices on predictability led a number of people to say fairly quickly that this decision may be bad news for the mechanical and electronics arts, but it's not going to be so bad for chemical and biotechnology areas because these are historically considered to be unpredictable arts," explains Hans Sauer, associate general council for the Biotechnology Industry Organization. But, Sauer says, in fact there may be a significant impact on certain chemical and biotech areas, such as drug development.
Patent attorney John R. Van Amsterdam, a shareholder at the law firm of Wolf, Greenfield & Sacks in Boston, agrees that the KSR ruling may have impacts that were not initially apparent for chemical-related fields. He notes that the Federal Circuit has issued at least one decision this spring that indicates that drug reformulation patents might face potential problems.
The decision noted by Van Amsterdam involves a drug patent held by Pfizer. In this case, Pfizer filed suit on July 30, 2003, against Canadian pharmaceutical company Apotex for taking steps to sell a generic version of Pfizer's hypertension and angina drug, Norvasc, which was still under patent. Apotex countered that the patent for Norvasc should be invalidated because it was obvious on the basis of a prior patent.
THE DEVELOPMENT of Norvasc, like that of many drugs, took years and various formulations. In the patent for the active ingredient of the drug, amlodipine, Pfizer claimed "certain dihydropyrine compounds and their pharmaceutically acceptable acid addition salts," the preferred salt being maleate. After several years of development of amlodipine maleate, Pfizer's scientists found that this formulation was chemically unstable and sticky, a property that affects its processibility.
To improve the drug, the scientists decided to change the formulation by using a different salt. They tested several salts and switched to amlodipine besylate for commercial development. The company then patented the revised formulation.
In reviewing the case, the Federal Circuit court ruled that Pfizer's Norvasc patent was obvious in that, although the earlier patent did not specifically disclose the besylate salt of amlodipine, a skilled person would have been motivated to make a besylate form because this approach had been used with other drugs—albeit only rarely. The court also noted that the besylate salt was one of only 50 pharmaceutically acceptable salts, and that it would have been expected to have the desired properties.
"The Federal Circuit concluded that substituting one salt for another would reasonably have been expected to work by a person of ordinary skill in the art," Van Amsterdam explains.
"Our industry can spend 10 years and a lot of development dollars turning a fundamental discovery into a real-life product," Sauer points out. The fact that step-by-step improvements to experimental products would be obvious and therefore not patentable is something that greatly concerns the biotech community, he says.
According to Sauer, companies often tweak a drug formulation during clinical trials to get a more effective product. "But because drugs are regulated by the Food & Drug Administration, you'd be ill-advised to use a salt form that's never been tried. Patent examiners love it when you get really creative and pull something like a completely new salt out of thin air. But FDA's drug reviewers get really worried when you do that," he says.
This difference of opinion between FDA's idea that predictable components like known salts make a drug approvable and the Supreme Court's latest ruling that says predictability makes a drug obvious and unpatentable could cause big problems in the area of incremental drug development, Sauer explains. He notes that a lot of existing patents protect incremental inventive activities that took place during drug development, and it's unclear how they will be affected.
Another example of technology that might be affected by the KSR decision is the area of purification science, says Ben M. Davidson, a partner at the Howrey law firm in Los Angeles. "If someone is trying to patent a way to efficiently separate particular proteins" that are not new, there may be patentability problems under KSR, he notes.
Intellectual property practitioners like Davidson will not only be keeping a close eye on the how the courts apply the KSR decision, but they will also be paying attention to how PTO incorporates the decision into its patent examination process. Initially, many in the intellectual property community worried that the decision would drastically change the way patent applications will be evaluated.
BUT JUST DAYS after the KSR decision was announced, PTO issued an internal memo to its examiners telling them that a rejection based on obviousness must still "identify the reason why a person of ordinary skill would have combined the prior art elements in the manner claimed." A spokeswoman for the office tells C&EN that a final guidance on the KSR decision is expected within the next six weeks.
On the basis of this preliminary memo, Davidson says, it is not clear whether the KSR decision will drastically change how PTO examiners do their job. He adds that PTO has been using the TSM test for more than two decades, and under KSR it continues to be relevant and provide useful guidance, so completely abandoning that guidance in determining patentability is unlikely.
"I think the PTO officials didn't want to cause chaos," Davidson says. "They also didn't want examiners to start making obviousness rejections that just didn't have any logic to them."
Sauer agrees. "The PTO leadership responded quickly by putting out a memo that said examiners should keep doing what they are doing" until a final guidance is developed. "The office has an enormous backlog of patent applications, so they are acting very responsibly and rationally in the wake of a decision that really had people running in circles," he says.
The full impact of the KSR decision, however, will only become apparent over time. "The truth of it is that we can make certain rough predictions about how things will transpire in PTO and in the courts, but really we're going to have to wait and see on a case-by-case basis what the effect of KSR is on patents for specific technologies," Van Amsterdam says. "After all," he adds, "obviousness determinations are, by their nature, highly fact-specific."
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