Patent Watch: Sciele Pharma Inc. v. Lupin Ltd.

Alerts / July 5, 2012

[I]t could be reasonable to give more weight to new arguments or references that were not explicitly considered by the (Patent and Trademark Office) PTO when determining whether a defendant met its burden of providing clear and convincing evidence of invalidity.

On July 2, 2012, in Sciele Pharma Inc. v. Lupin Ltd., the U.S. Court of Appeals for the Federal Circuit (Lourie, Prost, Moore*) vacated and remanded the district court's preliminary injunction enjoining Lupin against infringing U.S. Patent No. 6,866,866, which related to controlled release metformin compositions sold by Shionogi as Fortamet. The Federal Circuit stated:

In deciding whether to grant a preliminary injunction, a district court assesses four factors: "(1) a reasonable likelihood of success on the merits; (2) irreparable harm if an injunction is not granted; (3) a balance of hardships tipping in its favor; and (4) the injunction's favorable impact on the public interest." To demonstrate a likelihood of success on the merits, a patentee must show that, in light of the presumptions and burdens that will inhere at trial on the merits: (1) the patentee will likely prove that the accused infringer infringes the asserted patent; and, (2) the patentee's infringement claim will likely withstand the accused infringer's challenges to the validity and enforceability of the patent.

A patent is obvious "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." . . . Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. The obviousness analysis entails "an expansive and flexible approach." "If a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability." Ultimately, "a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions." There need not be "precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ."

The presumption of validity attaches to all issued patents and the clear and convincing evidence burden applies to all issued patents. Under 35 U.S.C. § 282, an issued patent "shall be presumed valid," but this presumption can be rebutted. The presumption of validity found in § 282 is reflected in the standard of proof required to prove invalidity, clear and convincing evidence. [T]he party challenging a patent in court "bears the added burden of overcoming the deference that is due to a qualified government agency presumed to have done its job." That high burden is reflected in the clear and convincing evidence burden for proving invalidity. Whether a reference was previously considered by the PTO, the burden of proof is the same: clear and convincing evidence of invalidity. [T]here is no heightened burden of proof when a reference was previously considered by the PTO, and no lowered burden of proof if a defendant raises a new reference or argument during litigation. The burden does not suddenly change to something higher-"extremely clear and convincing evidence" or "crystal clear and convincing evidence"-simply because the prior art references were considered by the PTO. In short, there is no heightened or added burden that applies to invalidity defenses that are based upon references that were before the Patent Office. The burden is always the same, clear and convincing evidence.

While the ultimate burden of proof does not change, new evidence not considered by the PTO "may 'carry more weight' . . . than evidence previously considered by the PTO," and may "'go further toward sustaining the attacker's unchanging burden.'" "[I]f the PTO did not have all material facts before it, its considered judgment may lose significant force" and the burden to persuade the finder of fact by clear and convincing evidence may, therefore, "be easier to sustain." Instead, the fact that references were previously before the PTO goes to the weight the court or jury might assign to the proffered evidence. For example, it could be reasonable to give more weight to new arguments or references that were not explicitly considered by the PTO when determining whether a defendant met its burden of providing clear and convincing evidence of invalidity. Conversely, it may be harder to meet the clear and convincing burden when the invalidity contention is based upon the same argument on the same reference that the PTO already considered. Importantly, whether a reference was before the PTO goes to the weight of the evidence, and the parties are of course free to, and generally do, make these arguments to the fact finder. But the presumption of validity and accompanying burden of proof, clear and convincing evidence, are not altered.

Shionogi argues that the Tmax range of the asserted claims is missing from Cheng, but does not dispute that Cheng discloses the other limitations of the asserted claims. Its primary distinction with respect to Timmins is that Timmins discloses a median Tmax and not the claimed mean Tmax. Shionogi further argues that, regardless of the Tmax disclosed in Timmins, there is no motivation to combine Cheng with Timmins. We agree with Lupin that it has raised a substantial question of validity with respect to the '866 patent. We conclude that the district court's obviousness analysis was flawed.

We also conclude that the district court clearly erred in its conclusion that there was no motivation to combine Cheng and Timmins. . . . Shionogi fails to effectively rebut Lupin's argument that Timmins itself supplies a motivation to modify Cheng to lower the Tmax of a controlled release formulation to match that of an immediate release formulation. Likewise, Shionogi does not establish that Lupin's arguments regarding the advantages of the lower Tmax disclosed in Timmins are unsound. We therefore believe the combination of Cheng and Timmins raises a substantial question as to the validity of the '866 patent.

If you have questions about the material presented above, please contact Dr. Lawrence M. Sung ( or 202.861.1537) or any member of our Intellectual Property Team.

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