United States: PTAB Trial Standard Of Review Requires Affirmance Despite Contrary Evidence

In Merck & Cie v. Gnosis S.p.A., the Federal Circuit affirmed the decision of the USPTO Patent Trial and Appeal Board (PTAB) that held the challenged claims obvious in an Inter Partes Review (IPR) proceeding. Although the court recognized evidence that undermined the obviousness finding and acknowledged objective evidence of nonobviousness, the court determined that the PTAB's factual findings were adequately supported by substantial evidence, such that the decision should be affirmed. In her dissent, Judge Newman questions whether that is the correct standard of review for a PTAB trial decision.

The Patent At Issue

At issue were claims 8, 9, 11, 12, 14, 15, and 19–22 of Merck's U.S. Patent No. 6,011,040, directed to methods of  "preventing or treating disease associated with increased levels of homocysteine . . . comprising administering ... L-5-MTHF."

The PTAB found all of the contested claims obvious in view of three references:

EP 0 595 005 (Serfontein), cited for teaching the use of "folate or a suitable active metabolite of folate," along with vitamins B6 and B12 to treat high levels of homocysteine.

U.S. Patent No. 5,194,611 (Marazza), cited for "identif[ying] L-5-MTHF as a 'natural metabolite' that may be used "as at least one active compound" in a treatment for folate deficiency," and for disclosing a method of obtaining L-5-MTHF from an enantiomeric mixture.

Ubbink et al., Vitamin B-12, Vitamin B-6, and Folate Nutritional Status in Men with Hyperhomocysteinemia, 57 Am. J. Clinical Nutrition, 47, 47–53 (1993) (Ubbink), cited for reporting the association between elevated levels of homocysteine and a number of disease conditions, and treatment using a vitamin supplement containing folic acid.

As summarized by the Federal Circuit:

The Board found that, because of the close similarity of purpose and disclosure between Serfontein and Marazza, a person of ordinary skill in the art would have been motivated to combine the two references to arrive at a method of treating elevated levels of homocysteine with L-5-MTHF .... Further, the Board found a person of skill would have been motivated to use this method in the situation disclosed in Ubbink, in which the elevated homocysteine levels are associated with certain enzyme deficiencies. .... The Board also considered objective indicia of nonobviousness. The Board concluded that Merck failed to demonstrate an adequate nexus between the novel features of the '040 patent and the evidence of commercial success, licensing, copying, and industry praise. It also found that the evidence of long-felt but unmet need, unexpected results, and industry skepticism was unpersuasive.

The Federal Circuit Decision

The Federal Circuit Decision was authored by Judge Hughes and joined by Judge Plager. Judge Newman dissented.

The court's analysis begins with a reminder of the factual findings underlying the question of obviousness:

Obviousness is a question of law based on underlying findings of fact. In re Kubin, 561 F.3d 1351, 1355 (Fed. Cir. 2009). The factual findings include: "(1) the scope and content of the prior art; (2) the differences between the prior art and the claims at issue; (3) the level of ordinary skill in the art at the time the invention was made; and (4) objective evidence of nonobviousness, if any." Id.; see also Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).

With that in mind, the court cites In re Gartside, 203 F.3d 1305, 1313 (Fed. Cir. 2000), for the rule that "In appeals of Board decisions, these factual findings are reviewed for substantial evidence."

Applying that deferential standard of review to the PTAB findings at issue, the court found them all to be supported by substantial evidence. The court acknowledged that Merck had presented some evidence in support of its arguments that "the prior art teaches away from this combination by suggesting: (1) administering 5-MTHF would actually increase levels of homocysteine, (2) 5-MTHF would be too unstable for therapeutic use, and (3) L-5-MTHF is a poor substrate for polyglutamation, a process that facilitates retention and use of L-5- MTHF in the cell. Nevertheless, the court also found substantial evidence to support the PTAB findings to the contrary.

At to point (1), the court stated:

The prior art does not unambiguously teach that administration of 5-MTHF would increase homocysteine levels.

At to point (2), the court stated:

Nor does the prior art compel a finding that a person of ordinary skill would have thought 5-MTHF was too unstable for therapeutic use.

As to point (3), the court noted conflicting views in the scientific literature, and also noted scientific literature indicating that "5-MTHF would nonetheless be effective for lowering homocysteine levels."

Merck also challenged the PTAB decision for failing to make "an express finding that a person of ordinary skill would have a reasonable expectation of success" in combining the cited references, but the court was willing to overlook that omission because "the Board addressed Merck's arguments against a reasonable expectation of success in the context of its teaching away arguments."

Turning to the issues surrounding the objective indicia of nonobviousness, the court found substantial evidence to support the PTAB's findings that "the nexus between the merits of the invention and the evidence of commercial success, licensing, copying, and industry praise was weak."

In this regard, the court noted that one group of commercial products was combination products that included other active ingredients (e.g., B vitamins).  Even though some claims at issue recite such combinations, the court noted that "[t]hese products go further and contain a specific combination of specific forms of B-vitamins and other active ingredients" and that "Merck failed to establish that the commercial success of these products was due to the claimed method—using L-5-MTHF and 'at least one B-vitamin'—as opposed to the specific formulations in the mixed products."

Don't all commercial products necessarily contain "specific combination of specific forms of [ingredients]"?

With regard to the single-ingredient products, which were approved "for use as a supplemental treatment of major depressive disorder and schizophrenia," the court found substantial evidence supported the PTAB's finding that the use of 5-MTHF for treating major depressive disorder and schizophrenia was known in the prior art, and therefore Merck "could not show a sufficient nexus between the commercial success of the Deplin® products and the novel features in the asserted claims."

But the Deplin® products include L-5-MTHF, as specified in the claims.

With regard to Merck's evidence of licensing, the court noted that the cited licensing agreement "also covered several other patents, including one that "claims the stable form of L-5-MTHF used in Pamlab's products more precisely than the '040 patent." Thus, "[i]t is therefore difficult to determine the extent to which the licensing agreement was a result of the novel features in the '040 patent, as opposed to the other patents involved."

Does this mean that a license encompassing a portfolio of patents only can support non-obviousness of the patent that most specifically claims the commercial product(s)?

Thus, although the court acknowledged that "another factfinder may have reasonably evaluated Merck's evidence of objective indicia of nonobviousness differently in the first instance," the PTAB's findings were "supported by substantial evidence."

Judge Newman's Dissent

In her dissent, Judge Newman questions the court's application of the "substantial evidence" standard of review to PTAB trial decisions.

Judge Newman states that Congress's purpose in creating PTAB trials was "to restore an effective and balanced system of patents, whereby valid patents may reliably be confirmed and invalid patents efficiently invalidated." Because the American Invents Act (AIA) "does not permit subsequent review of the PTAB's validity/invalidity decision in any other tribunal, whether by appeal or direct review or as a defense or offense in litigation," Judge Newman believes that the court's focus should be on reaching the correct result, not affording deference to an agency decision.

Judge Newman points out the irony in affording deferential review to PTAB decision when the purpose of PTAB trials is to provide an efficient mechanism for correcting USPTO mistakes:

The substantial evidence standard originated with appeals of jury verdicts, in recognition of the role of credibility at trial. .... "Substantial evidence" was incorporated into the Administrative Procedure Act in recognition of the expertise of specialized agencies. .... Here, however, a new system was created to respond to the belief that the agency was making mistakes. .... This new system is directed at correcting mistakes. Deferential review by the Federal Circuit falls short of the legislative purpose of providing optimum determination of patent validity.

According to Judge Newman,

[T]he court's role in an appeal of a PTAB trial decision] is to determine whether the PTAB ruling is correct in law and supported by a preponderance of the evidence. The panel majority errs in importing into these proceedings the Administrative Procedure Act standard that applies to initial patent examination decisions.

Turning to the case at hand, Judge Newman reviews Merck's arguments and supporting evidence in detail, and explains why, in her view, the PTAB decision was not supported by a preponderance of the evidence, but rather was lacking evidence on many points.

It will be interesting to see if Merck–or another party receiving an unfavorable decision in a PTAB trial–pursues the standard of review issue to the Supreme Court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions