United States: An Overly Narrow Statement Of The Problem In An Obviousness Challenge Can Represent A Form Of Prohibited Reliance On Hindsight

In Insite Vision Inc. v. Sandoz, Inc., No. 14-1065 (Fed. Cir. Apr. 9, 2015), the Federal Circuit affirmed the district court's decision that Sandoz, Inc. ("Sandoz") had not shown that the claims of the patents-in-suit were invalid as obvious.  The Federal Circuit also affirmed the district court's refusal to admit into evidence the late-proffered file history of the European counterpart of one of the patents-in-suit.

Inspire Pharm., Inc. ("Inspire") markets Azasite®, a topical azithromycin solution approved by the FDA and covered by U.S. Patent Nos. 6,861,411 ("the '411 patent"); 6,239,113 ("the '113 patent"); 6,569,443 ("the '443 patent"); and 7,056,893 ("the '893 patent") (collectively "the patents-in-suit").  After Sandoz filed an ANDA for a generic version of Azasite®, Inspire, Insite Vision, Inc. ("Insite"), and Pfizer, Inc. (collectively "plaintiffs") sued Sandoz for patent infringement.  After claim construction, Sandoz stipulated to infringement but contested the validity of the asserted claims under 35 U.S.C. § 103(a).  Before trial, Sandoz moved to amend the pretrial order to include as an exhibit the file history of the European counterpart ("the EPO file history") of the '411 patent.  The district court denied the motion, concluding that the late proffer was prejudicial.  After a bench trial, the district court upheld the validity of all of the patents-in-suit.  Sandoz appealed the district court's validity ruling, asserting that the inquiry should have been limited to whether it would have been obvious to use topical azithromycin to treat conjunctivitis rather than whether it would have been obvious to develop a topical ophthalmic formulation containing azithromycin.  Sandoz also appealed the district court's refusal to admit the late-proffered EPO file history into evidence.

An "overly narrow 'statement of the problem [can] represent[] a form of prohibited reliance on hindsight, [because] [o]ften the inventive contribution lies in defining the problem in a new revelatory way.'"  Slip op. at 9 (alterations in original) (quoting Mintz v. Dietz & Watson, Inc., 679 F.3d 1372, 1377 (Fed. Cir. 2012)).

The Federal Circuit held that the district court did not clearly err in framing the obviousness inquiry as it did and that such inquiry framing did not foreclose Sandoz from attempting to prove obviousness based on the treatment of conjunctivitis by the topical administration of azithromycin.  The Court emphasized that "an overly narrow 'statement of the problem [can] represent[] a form of prohibited reliance on hindsight, [because] [o]ften the inventive contribution lies in defining the problem in a new revelatory way.'"  Slip op. at 9 (alterations in original) (quoting Mintz v. Dietz & Watson, Inc., 679 F.3d 1372, 1377 (Fed. Cir. 2012)).  The Federal Circuit also stressed that whether a person of ordinary skill in the art would narrow the research focus to lead to the invention depends on the facts.  The Court then explained that azithromycin's characteristics would make it a poor choice for treating ocular infections and that the desirable treatment of conjunctivitis would include penetrating the cornea as well as the conjunctiva.  Accordingly, the Federal Circuit found that these factual aspects supported the district court's framing of the obviousness question.

Turning to the merits of the obviousness determination, the Federal Circuit concluded that the district court did not clearly err in finding that there were "innumerable" options for ophthalmic treatments that were known to be better options than azithromycin.  Id. at 11-12.  The Federal Circuit also found that the district court did not err in its finding that one of skill in the art would have been concerned about azithromycin's ability to penetrate ocular tissue due to its high molecular weight, charge, and insolubility in water.  Moreover, the Federal Circuit found that the district court did not clearly err in acknowledging the different drug delivery mechanisms between oral and topical administration of azithromycin and crediting plaintiffs' expert's testimony of nonobviousness.  The Court further found that the district court also did not clearly err in discounting the relevance of Ilotycin®, given that there was conflicting expert testimony on whether it had fallen out of favor at the time of the invention.  Accordingly, the Federal Circuit concluded that Sandoz had not met its burden to establish clear and convincing evidence of obviousness, and affirmed the validity of the asserted claims of the '411 patent.

Regarding the '113, '443, and '893 patents (collectively "the ISV patents") that essentially call for azithromycin in a polymeric suspending agent for topical ophthalmic use, the Federal Circuit dismissed Sandoz's repeated "framing of the obviousness question" argument.  On the merits, Sandoz relied on Insite's U.S. Patent No. 5,192,535 ("the '535 patent"), which mentioned the possibility that erythromycin could be combined with polycarbophil, and argued that it would have been obvious to replace erythromycin with azithromycin.  The Federal Circuit agreed with the district court that the '535 patent discloses a "laundry list of active ingredients" and does not mention azithromycin.  Id. at 14-15.  The Court also noted that the modification from erythromycin to azithromycin would be even less obvious because azithromycin was considered insoluble and unstable in water.  Further, the Federal Circuit agreed with the district court that the claims of the ISV patents were not obvious even in light of
the '411 patent, given the significant differences between Carbopol disclosed in the '411 patent and the polycarbophil of the ISV patents.  Finally, the Federal Circuit concluded that the district court did not clearly err in finding there were meaningful secondary considerations present, such as unexpected results and a long-felt need.

Sandoz also argued that the district court abused its discretion in precluding it from amending the exhibit list by introducing the EPO file history after the pretrial conference.  The Federal Circuit noted that a court may modify an order issued after a final pretrial conference only to prevent manifest injustice under Fed. R. Civ. P. 16(e).  It also agreed with the district court's assessment of the relevant factors from Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d 894, 904-05 (3d Cir. 1977), in determining whether a district court abused its discretion in excluding evidence as being either neutral or favoring plaintiffs.  Specifically, because plaintiffs would have had to prepare arguments in response to the EPO file history on the eve of trial, the Court found that the first two factors—prejudice and the ability to cure prejudice—favored the plaintiffs.  The Court found the third and the fourth factors—disruption of trial and bad faith—to be neutral.  As for the fifth factor that relates to the importance of the excluded evidence, the Federal Circuit found that the district court was correct to at least question the relevance and probative value of the EPO file history under U.S. law.  Thus, in view of the totality of evidence, the Federal Circuit found no reason to disturb the district court's decision to exclude the EPO file history. 

Accordingly, the Federal Circuit affirmed the district court's determination that the patents-in-suit were not invalid.

Judges: Prost, Newman, Linn (author)

[Appealed from D.N.J., Judge Cooper]

This article previously appeared in Last Month at the Federal Circuit, May, 2015.

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