United States: Federal Circuit Reverses "Inherency" Obviousness Ruling In Hatch-Waxman Lawsuit

In a July 17, 2017, precedential opinion, Millennium Pharmaceuticals, Inc. v. Sandoz Inc., the U.S. Court of Appeals for the Federal Circuit reversed and remanded an invalidity decision by the Delaware District Court.1 Millennium is the exclusive licensee of the '446 patent, which claims a lyophilized compound that is a boronate ester of bortezomib, a drug product that may be administered for the treatment of certain cancers. Numerous defendants, including Sandoz, filed ANDAs seeking FDA approval for generic versions of the drug, alleging that the patent's claims were invalid based on obviousness. While bortezomib and its efficacy against various cancers were known, drug products using bortezomib had never achieved FDA marketing approval because of problems with the compound's instability, rapid degradation, and insolubility. The district court decided that the patent's claims were obvious "because they were the inherent result of an allegedly obvious process, viz., lyophilizing bortezomib in the presence of the bulking agent mannitol." But in reversing the district court, the Federal Circuit reasoned that, among other things, the prior art did not teach or suggest "making the claimed new compound," that the "compound would be formed," or that the "compound would have the properties of stability, solubility, and dissociability that it exhibited." Further, the Federal Circuit found that secondary considerations, such as unexpected results and the existence of a long-felt but unmet need, constituted objective evidence of nonobviousness.

The '446 patent describes a compound that is a boronate ester of bortezomib (a boronic acid) and D-mannitol (a hydroxyl compound). The patent claims the lyophilized (freeze-dried) compound, the compound as a lyophilized cake, the method of preparing the compound, and its reconstitution with a pharmaceutically acceptable carrier. Bortezomib was known in the prior art as a proteasome inhibitor that was effective at treating various cancers; however, compounds of bortezomib never achieved FDA approval due to their instability and insolubility. Mannitol was also known in the prior art, but as a bulking agent used with other active ingredients. The inventors of the '446 patent purportedly discovered that by lyophilizing bortezomib with mannitol, the resulting ester acts as a prodrug, i.e., a stable compound that converts to or releases the active ingredient upon administration to a patient. The bortezomib ester compound was developed into the FDA-approved drug product Velcade®.

The district court invalidated the asserted claims of '446 patent based on obviousness. First, the district court found that the process of lyophilization was well-known in the field of pharmaceutical formulation, and that lyophilization was "considered as an obvious alternative" when liquid formulations were unsuccessful. Second, the district court decided "that the claims were obvious because they were an inherent result" of the lyophilization process. Finally, the district court decided that Millennium failed to establish secondary considerations of nonobviousness because: (1) "Millennium did not establish unexpected results because it did not compare the claimed invention to a glycerol ester of bortezomib" and (2) "'the lyophilized mannitol ester of bortezomib did not solve any problem having persisted over a long period of time without resolution by the prior art.'"2

The Federal Circuit rejected each of the district court's findings. First, the Federal Circuit determined that the prior art contained no teaching or suggestion of the compound described by the '446 patent, or that the compound would solve any of the insolubility and instability issues that the prior art associated with bortezomib. Furthermore, the Federal Circuit found that "[n]o reference shows or suggests ester formation at freeze-drying conditions." Under the circumstances here, the Federal Circuit agreed with Sandoz's characterization that "lyophilization was generally known in formulating pharmaceutical products" and that "bulking agents were known for use in lyophilization, and that mannitol was a known bulking agent." However, the Federal Circuit explained that for the compound to be obvious, the prior art must "teach or suggest that lyophilization of bortezomib in the presence of mannitol" would "form a new chemical compound," "provide a reason to make this new chemical compound," or demonstrate that this compound would "solve the previously intractable problems of bortezomib formulation."3 The Federal Circuit found that Sandoz did not persuasively meet its burden to show these facts. Indeed, the Federal Circuit stated that "[a]lthough mannitol was a known bulking agent, and lyophilization was a known method of drug formulation, nothing on the record teaches or suggests that a person of ordinary skill should have used mannitol as part of a synthetic reaction to make an ester through lyophilization."4 Accordingly, the Federal Circuit decided that "[t]he district court clearly erred in its obviousness analysis."

The Federal Circuit also found that "[n]o reference supports the district court's conclusion that 'skilled formulators would be motivated to create a mannitol ester to improve bortezomib's stability and solubility'" because there was nothing in the prior art that "suggest[ed] producing this ester for this purpose."5 The Federal Circuit took specific note of an expert's testimony that "Millennium could not have predicted that bortezomib would be stabilized by forming the mannitol ester." Sandoz had argued that since "mannitol is one of a relatively small number of bulking agents used in lyophilization," a person of ordinary skill was sufficiently motivated to arrive at the claimed invention. But the Federal Circuit found that "Sandoz provides no reason why a person of ordinary skill who is seeking to make esters of bortezomib would look to lyophilization bulking agents" because "there was no expectation that "the bulking agent [would] react with the bortezomib to form a new compound." Thus, the Federal Circuit concluded that "neither the requisite motivation nor expectation of success is found in the prior art."6

Further, the Federal Circuit stated that "[t]he district court clearly erred in its determination that lyophilizing bortezomib with mannitol to form an ester was a 'suitable option from which the prior art did not teach away.'"7 In particular, the Federal Circuit decided that "Millennium offered persuasive evidence that the chemical modification of bortezomib would have been unattractive to a person of ordinary skill for fear of disturbing the chemical properties whereby bortezomib functions effectively as an anti-cancer agent; in particular, a person of ordinary skill would have noted that the ester blocks a portion of the bortezomib molecule." Accordingly, "[w]ithout the knowledge that the D-mannitol bortezomib ester dissociates in the bloodstream at a rate of pharmaceutical efficacy, a person of ordinary skill would not have been led to create the ester." Thus, "a person of ordinary skill would have avoided creating an ester with mannitol because several different esters, each with different chemical and possibly biological properties, could have formed."

The Federal Circuit also explained that the district court erred in its consideration of inherency. Sandoz argued "that although lyophilization in the presence of mannitol produced an unexpected result, the result was 'inevitable' and thus 'inherent,' and thus not 'inventive.'" Rejecting this contention, the Federal Circuit stated that "invention is not a matter of what the inventor intended when the experiment was performed; obviousness is measured objectively in light of the prior art, as viewed by a person of ordinary skill in the field of the invention."8 Therefore, the invention was nonobvious because "[n]o expert testified that they foresaw, or expected, or would have intended, the reaction between bortezomib and mannitol, or that the resulting ester would have the long-sought properties and advantages."9

Finally, the Federal Circuit found that the district court erred in its examination of secondary considerations of nonobviousness, which included arguments concerning unexpected results, long-felt but unsolved need, and commercial success.

Regarding unexpected results, the district court compared the dissolution, stability, and solubility of the claimed mannitol ester of bortezomib to what it determined to be the closest prior art—a glycerol bortezomib ester. The district court erroneously determined that "bortezomib itself was not the closest prior art, and declined to consider the advantages and benefits of the Velcade® product." The Federal Circuit found that this "error" stemmed from the district court's determination that "Millennium should have compared the glycerol bortezomib ester" because a prior art reference "included glycerol as one of ten preferred dihydroxy compounds for boronate esters."10 However, the Federal Circuit found the district court's comparison misplaced because the "glycerol bortezomib ester was not specifically disclosed, prepared, or tested" in the prior art reference. Additionally the prior art reference did not "disclose the stability or solubility of any ester compound." The Federal Circuit explained that "[u]nexpected results are shown in comparison to what was known, not what was unknown." Properly comparing the claimed mannitol ester of bortezomib to the next closest prior art, i.e., bortezomib itself, the Federal Circuit found that the claimed compound "exhibited unexpected results," including "unexpectedly superior stability, solubility, and dissolution."11

The Federal Circuit also stated that "[t]he district court's conclusion that the lyophilized mannitol ester of bortezomib did not meet a long-felt need was both perfunctory and clearly erroneous." The Federal Circuit explained that "[e]vidence of long-felt need is particularly probative of obviousness when it demonstrates both that a demand existed for the patented invention, and that others tried but failed to satisfy that demand."12 Here, the Federal Circuit found that there was "no dispute that there was a long-felt need for a product to treat multiple myeloma," and that while "it is agreed that bortezomib is the effective product in the body, bortezomib alone is not an available product."

Furthermore, the Federal Circuit stated that the district court "clearly erred in attributing Velcade®'s commercial success to bortezomib alone, as bortezomib is not a viable commercial product and had been denied FDA approval because of its instability." Instead, the Federal Circuit explained that "[t]he D-mannitol ester was responsible for Velcade®'s successful results, for the D-mannitol ester is necessary to provide the required solubility and stability."

Thus, "[o]n the entirety of the record," the Federal Circuit concluded "that the district court clearly erred in finding that a person of ordinary skill would obviously make the D-mannitol ester in order to solve the problem of providing an effective form of bortezomib. The unexpected properties of an unexpectedly produced new compound, and the ensuing pharmaceutical efficacy and benefit, negate the district court's ruling of obviousness."13 Accordingly, the Federal Circuit reversed the district court's invalidity determination.


1Millennium Pharm., Inc. v. Sandoz Inc., No. 15-2066, slip op. at 4 (Fed. Cir. July 17, 2017).
2Id. at 8 (citation omitted).
3Id. at 11.
5Id. at 14
6Id. at 13.
7Id. at 14-15 (citations omitted).
8Id. at 16.
9Id. at 17.
10Id. at 18 (quotation omitted).
11Id. at 19.
12Id. at 19 (quotation omitted).
13Id. at 21.

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