Bristol-Myers Squibb Co. v. Teva Pharms. United States, Inc.

• Citation: 769 F.3d 1339
• Decision Date: 20 October 2014
• Docket Number: No. 2013–1306.,2013–1306.
• Parties: BRISTOL–MYERS SQUIBB COMPANY, Plaintiff–Appellant, v. TEVA PHARMACEUTICALS USA, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

769 F.3d 1339

BRISTOL–MYERS SQUIBB COMPANY, Plaintiff–Appellant,

v.TEVA PHARMACEUTICALS USA, INC., Defendant–Appellee.

No. 2013–1306.

United States Court of Appeals, Federal Circuit.

Oct. 20, 2014.

William F. Lee, Wilmer Cutler Pickering Hale and Dorr, LLP, of Boston, MA, filed a petition for panel rehearing and rehearing en banc for plaintiff-appellant. With him on the petition were Lauren B. Fletcher and Andrew J. Danford, of Boston, MA, and Amy K. Wigmore and Thomas G. Saunders, of Washington, DC. Of counsel on the petition were Paul H. Berghoff, Alison J. Baldwin, and Joshua Rich, McDonnell Boehnen Hulbert & Berghoff LLP, of Chicago, IL.

George C. Lombardi, Winston & Strawn LLP, of Chicago, IL, filed a response for defendant-appellee. With him on the response were Lynn MacDonald Ulrich, Ivan M. Poullaos, Julia Mano Johnson, and William P. Ferranti.

Jonathan E. Singer, Fish & Richardson P.C., of Minneapolis, MN, for amicus curiae Biotechnology Industry Organization. With him on the brief was Craig E. Countryman, of San Diego, CA.

Howard W. Levine, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, for amicus curiae Bay Area Bioscience Association. With him on the brief was Jennifer S. Swan, of Palo Alto, CA.

Roy F. Waldron, Pfizer Inc., of New York, NY, for amicus curiae Pfizer Inc. With him on the brief were Jeffrey J. Oelke, Leslie Morioka, and Robert E. Counihan, White & Case LLP, of New York, NY.

Steven P. Caltrider, Eli Lilly and Company, of Indianapolis, IN, for amicus curiae Eli Lilly and Company.

Carter G. Phillips, Sidley Austin LLP, of Washington, DC, for amicus curiae Pharmaceutical Research and Manufacturers of America. With him on the brief were Jeffrey P. Kushan, Ryan C. Morris, and James A. High, Jr.

Robert M. Isackson, Orrick, Herrington & Sutcliffe LLP, of New York, NY, for amicus curiae Intellectual Property Owners Association. With him on the brief were Elizabeth A. Howard and T. Vann Pearce. Of counsel on the brief were Philip S. Johnson and Kevin H. Rhodes, Intellectual Property Owners Association, of Washington, DC. Of counsel was Herbert C. Wamsley, Jr.

Nicholas G. Barzoukas, Baker Botts L.L.P., of Houston, TX, for amicus curiae Merck Sharp & Dohme Corp. With him on the brief was Joshua Davis. Of counsel on the brief were William Krovatin and Gerard M. Devlin, Merck Sharp & Dohme Corp., of Rahway, NJ.

Before PROST, Chief Judge, NEWMAN, PLAGER¹, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, and HUGHES, Circuit Judges.

ON PETITION FOR PANEL REHEARING AND REHEARING EN BANC

PER CURIAM.

ORDER

A combined petition for panel rehearing and rehearing en banc was filed by plaintiff-appellant Bristol–Meyers Squibb Company, and a response thereto was invited by the court and filed by defendant-appellee Teva Pharmaceuticals USA, Inc. The petition for rehearing and response were referred to the panel that heard the appeal, and thereafter, the petition for rehearing en banc and response were referred to the circuit judges who are authorized to request a poll of whether to rehear the appeal en banc. A poll was requested, taken, and failed.

Upon consideration thereof,

It Is Ordered That:

(1) The petition for panel rehearing is denied.

(2) The petition for rehearing en banc is denied.

(3) The mandate of the court will issue on October 27, 2014.

DYK, Circuit Judge, with whom WALLACH, Circuit Judge, joins, concurs in the denial of the petition for rehearing en banc.

O'MALLEY, Circuit Judge, concurs in the denial of the petition for rehearing en banc.

NEWMAN, Circuit Judge, with whom LOURIE and REYNA, Circuit Judges, join, dissents from the denial of the petition for rehearing en banc.

TARANTO, Circuit Judge, with whom LOURIE and REYNA, Circuit Judges, join, dissents from the denial of the petition for rehearing en banc.

DYK, Circuit Judge, with whom WALLACH, Circuit Judge, joins, concurring in the denial of the petition for rehearing en banc.

This case presents a question of obviousness, in particular whether evidence postdatingthe invention can be used to establish unexpected results. The panel holds that it cannot be considered in the circumstances of this case. That position is correct. It is mandated by the statute, which provides that an invention is not patentable if it “would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103 (emphasis added).

The patent applicant's discovery of unexpected results at the time of the invention can help to establish that the invention would not have been obvious to another skilled person. But hindsight bias must be avoided in determining obviousness. And under longstanding Supreme Court authority, the pertinent knowledge is that possessed at the time of the invention. See KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 416, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) (focusing on “[w]hen Adams designed his battery” and noting that “[t]he fact that the elements worked together in an unexpected and fruitful manner supported the conclusion that Adams' design was not obvious to those skilled in the art.”) (citing United States v. Adams, 383 U.S. 39, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966)); Ball & Socket Fastener Co. v. Kraetzer, 150 U.S. 111, 116–17, 14 S.Ct. 48, 37 L.Ed. 1019 (1893) (discounting an advantage of a patented invention that “was not originally within the contemplation of the patentee, but is an afterthought”); see also Genetics Inst., LLC v. Novartis Vaccines and Diagnostics, Inc., 655 F.3d 1291, 1315 (Fed.Cir.2011) (Dyk, J., dissenting). This decision properly does not allow consideration of post-invention evidence in the circumstances of this case. There is no basis for rehearing en banc.

O'MALLEY, Circuit Judge, concurring in the denial of the petition for rehearing en banc.

I concur in the court's denial of the petition for rehearing en banc. I write to assuage Bristol–Myers Squibb Co.'s (“BMS”) and the amici's ¹ fears that this panel decision has rewritten the test for obviousness for pharmaceutical patents. In my view, the concerns expressed are unjustified and mischaracterize the opinion. This case does not forge new ground or set down immutable principles. It simply decides that, on the record before it, the district court did not err in finding the asserted claim of the ' 244 Patent invalid as obvious.

As the panel opinion explains, an invention is unpatentable when “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.” 35 U.S.C. § 103(a) (2006).² Obviousness is a question of law based on the following underlying factual findings: (1) the level of ordinary skill in the art; (2) the scope and content of the prior art; (3) the differences between the claims and the prior art; and (4) objective indicia of nonobviousness, such as commercial success, long-felt but unmet needs, failure of others, and unexpected results. KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398, 406, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007); Graham v. John Deere Co., 383 U.S. 1, 17–18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966).

In this case, the panel affirmed the district court's conclusion that entecavir, BMS's antiviral compound used to treat hepatitis B, was invalid as obvious.³ The panel found the record supported the selection of 2'–CDG as a lead compound and the conclusion that one of ordinary skill in the art would have been motivated to modify 2'–CDG in such a way to arrive at the patented compound, entecavir. Bristol–Myers Squibb Co. v. Teva Pharm. USA, Inc., 752 F.3d 967, 975 (Fed.Cir.2014). The panel then agreed with the district court that, despite some evidence of objective indicia demonstrating non-obviousness, the totality of the evidence supported the conclusion that entecavir was obvious. Id. at 979.

In the petition for rehearing en banc and the supporting amicus briefs, BMS and the amici claim that, in reaching its judgment, the panel dramatically altered the jurisprudential landscape governing obviousness claims in pharmaceutical cases. And they predict that dire consequences will flow therefrom. They express concern about (1) the panel's treatment of post-invention evidence regarding the differences between the prior art and the invention, specifically when determining if a skilled artisan would have been motivated to make the claimed compound with a reasonable expectation of success for its therapeutic use; (2) the panel's description of what constitutes an unexpected result in the pharmaceutical context; (3) the party upon whom it placed the burden of proof at certain stages of its obviousness inquiry; and (4) the way in which the panel weighed the evidence of objective indicia of non-obviousness.

BMS and the amici first contend that the panel improperly limits consideration of evidence regarding the properties of the invention and the prior art to those known at the time of the invention. Specifically, BMS and the amici argue the panel forecloses the possibility of reviewing later-discovered differences between the prior art and the claimed invention by requiring these differences to be unexpected “by one of ordinary skill in the art at the time of the invention.” Id. at 977 (emphasis added). BMS and the amici allege that the panel erred by not considering later-discovered unexpected results, and now closes the door to all reference to such evidence. I disagree.

Our case law clearly allows the consideration of later–discovered differences between the prior art and the invention. See Sanofi–Aventis Deutschland GmbH v. Glenmark Pharm., Inc., 748 F.3d 1354, 1360 (Fed.Cir.2014) (“Glenmark also argues that later-discovered benefits cannot be considered in an obviousness analysis.... That is incorrect;...