Brown v. Barbacid

• Citation: 61 USPQ2d 1236,276 F.3d 1327
• Parties: (Fed. Cir. 2002) MICHAEL S. BROWN, JOSEPH L. GOLDSTEIN, and YUVAL REISS, Appellants, v. MARIANO BARBACID and VEERASWAMY MANNE, Appellees. 00-1590 (Interference no. 103,586) DECIDED:
• Decision Date: 11 January 2002
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1327

276 F.3d 1327 (Fed. Cir. 2002)

MICHAEL S. BROWN, JOSEPH L. GOLDSTEIN, and YUVAL REISS, Appellants, v. MARIANO BARBACID and VEERASWAMY MANNE, Appellees.

00-1590

United States Court of Appeals for the Federal Circuit (Interference no. 103,586)

DECIDED: January 11, 2002

Appealed from: United States Patent and Trademark Office Board of Patent Appeals and Interferences

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[Copyrighted Material Omitted]

David L. Parker, Fulbright & Jaworski, L.L.P., of Austin, Texas, argued for appellants. With him on the brief was Steven L. Highlander. Of counsel was Marcy Hogan Greer.

Steven W. Parmelee, Townsend and Townsend and Crew, LLP, of San Francisco, California, argued for appellees. With him on the brief was Edward J. Keeling. Of counsel were Mark G. Sandbaken, Townsend and Townsend and Crew, LLP; and Christopher A. Klein, Bristol-Myers Squibb Company, of Princeton, New Jersey.

Before NEWMAN, MICHEL, and RADER, Circuit Judges.

RADER, Circuit Judge.

In an interference over a new assay to identify anti-cancer compounds, the United States Patent and Trademark Office Board of Patent Appeals and Interferences (Board) awarded priority to Mariano Barbacid and Veeraswamy Manne (collectively Barbacid) over Michael Brown, Joseph Goldstein, and Yuval Reiss (collectively Brown). Because the Board did not consider evidence that Brown conceived the invention before Barbacid reduced it to practice and diligently pursued the invention from the time of Barbacid's reduction to practice through Brown's filing date, this court vacates the award of priority to Barbacid and remands.

BACKGROUND

This case involves an interference between U.S. Patent No. 5,185,248 (the Barbacid patent) and U.S. patent application Serial No. 07/937,893 (the Brown application). The Barbacid patent and the Brown application both claim an assay for identifying new anti-cancer compounds that inhibit farnesyl transferase (FT), an enzyme involved in the control of cell growth. FT functions in the cell by adding farnesyl (a branched-chain polyunsaturated hydrocarbon alcohol intermediate of sterol biosynthesis) to a cysteine amino acid near one end of the protein chain, namely the carboxy-terminus. An important protein susceptible to addition of farnesyl is "ras." The farnesylation reaction activates the ras protein (which stimulates cell growth) by moving ras to the vicinity of the cell membrane. Once near the membrane, ras stimulates cell growth. Thus, an FT inhibitor would reduce the amount of ras reaching the membrane and therefore reduce ras-stimulated growth (including "cancerous" growth).

The sole count in the interference provides:

A method for identifying a candidate substrate having the ability to inhibit a farnesyl transferase enzyme, comprising the steps of:

6. obtaining an enzyme composition comprising a farnesyl transferase enzyme that is capable of transferring a farnesyl moiety to a farnesyl acceptor substance;

7. admixing a candidate substrate with the enzyme composition and farnesyl pyrophosphate; and

8. determining the ability of the farnesyl transferase enzyme to transfer a farnesyl moiety to a farnesyl acceptor substrate in the presense of the candidate substance and in the absense of the candidate substance.

OR

An assay for identifying compounds that inhibit ras oncogene activity, comprising:

6. reacting a protein or peptide substrate having a CAAX motif with farnesyl pyrophosphate and farnesyl-protein transferase in the presence of a test substrate, and

7. detecting wither the farnesyl residue is incorporated into the protein or peptide substrate, in which the ability of the test substance to inhibit ras oncogene activity is indicated by a decrease in the incorporation of the farnesyl residue into the protein or peptide substrate as compared to the amount of the farnesyl residue incorporated into the protein or peptide substrate in the absence of the test substrate.

Barbacid & Manne v. Brown, Goldstein & Reiss, Interference No. 103,586, slip op. at 2-3 (Bd. Pat. Appeals & Interferences May 30, 2000) (Board opinion) (emphasis added). In other words, the method of the count uses: (1) farnesyl transferase (FT); (2) farnesyl pyrophosphate, i.e., the source of farnesyl; (3) a "farnesyl acceptor substance" or "protein or peptide substrate having a CAAX motif," i.e., ras or a peptide of ras containing the CAAX motif (which is farnesylated); and (4) a test or candidate substrate, which inhibits FT, and therefore, ras protein activity.

The Barbacid patent application was filed on May 8, 1990, and issued on February 9, 1993. The Brown application was filed on December 22, 1992, but was accorded the benefit of an earlier related application filed on April 18, 1990. Thus, Brown was the senior party. Barbacid, as the junior party, had the burden to prove priority by a preponderance of the evidence.

The Board found that Barbacid showed an actual reduction to practice no later than March 6, 1990. The Board also found that Brown did not show reduction to practice of the count before March 6, 1990. Specifically, the Board found that Dr. Yuval Reiss' September 20, 1989 FT experiment did not satisfy every limitation of the count because it did not include a test or candidate substance in the assay. The Board also discounted a September 25, 1989 experiment (which may have satisfied the count) because Dr. Reiss could not authenticate his lab notebooks and autoradiographs. Moreover Dr. Patrick Casey could not corroborate Dr. Reiss' testimony and documents relating to the September 25 experiment.

Responding to a request for reconsideration, the Board declined to consider the testimony of Debra Morgan with respect to Brown's earlier conception and reduction to practice. The Board found that Brown's sole reference to Ms. Morgan in their opening brief was in a section of the Statement of Facts entitled "Brown's Case for Diligence and Corroboration Thereof," but not in the Argument section. Thus, the Board denied Brown's request for reconsideration of its holding that Brown had not reduced the invention to practice before March 6, 1990. Accordingly, the Board awarded priority to Barbacid. Brown appealed.

DISCUSSION

Priority and its issues of conception and reduction to practice are questions of law predicated on subsidiary factual findings. Cooper v. Goldfarb, 154 F.3d 1321, 1327, 47 USPQ2d 1896, 1901 (Fed. Cir. 1998). Accordingly, this court reviews without deference the Board's legal conclusions on priority, conception, and reduction to practice, Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376, 231 USPQ 81, 87 (Fed. Cir. 1986), and reviews for substantial evidence the Board's factual findings. Dickinson v. Zurko, 527 U.S. 150 (1999); In re Gartside, 203 F.3d 1305, 1315, 53 USPQ2d 1769, 1775 (Fed. Cir. 2000). Finally this court reviews the Board's application of its permissive interference rules for an abuse of discretion. Abrutyn v. Giovanniello, 15 F.3d 1048, 1050, 29 USPQ2d 1615, 1617 (Fed. Cir. 1994) (citing Gerritsen v. Shirai, 979 F.2d 1524, 1527-28, 24 USPQ2d 1912, 1915-16 (Fed. Cir. 1992)).

I.

In an interference with an application filed after the date of the patent, the junior party must show priority by clear and convincing evidence. 37 C.F.R. 1.657(c) (2001); Price v. Symsek, 988 F.2d 1187, 1190-91, 26 USPQ2d 1031, 1033 (Fed. Cir. 1993). In interferences, such as this case, with an application whose effective filing date antedates the patent issuance, the junior party must show priority by a preponderance of the evidence. 37 C.F.R. 1.657(c); Bosies v. Benedict, 27 F.3d 539, 541-42, 30 USPQ2d 1862, 1864 (Fed. Cir. 1994). Barbacid, as the junior party, has the ultimate burden to prove priority. Id. Brown asserts that the Board inappropriately shifted the burden of proof by requiring Brown to show by a preponderance conception or reduction to practice before March 6, 1990 - the date of Barbacid's actual reduction to practice. Brown argues that the Board should have shifted to Brown the burden of production - the burden of going forward with sufficient evidence - rather than the burden of proof.

This court has not addressed whether a senior party has the burden to show by a preponderance a date of invention before the priority date shown by the junior party. The Board cites to a Board decision, Fisher v. Gardiner, 215 USPQ 620, 625 (Bd. Pat. Interferences Oct. 30, 1981) ("Inasmuch as Fisher et al. [the junior party] have established a reduction to practice of the subject matter in counts 1, 2 and 4 prior to the senior party's filing date, the burden shifts to Aymami [the senior party] to prove by a preponderance of the evidence a priority date for that subject matter earlier than the July 12, 1973 date established by Fisher et al."). Board opinion, slip op. at 12.

To the contrary, 37 C.F.R. 1.657(a) states: "A rebuttable presumption shall exist that, as to each count, the inventors made their invention in the chronological order of their effective filing dates. The burden of proof shall be upon a party who contends otherwise" (emphasis added). Paragraph (b) of the same section explains that the junior party has the burden of establishing priority by a preponderance of evidence. 37 C.F.R. 1.657(b). In other words, the burden of proof by a preponderance of the evidence "shall be on a party" contending they made their invention out of chronological order of the effective filing dates, i.e., the junior party. This burden of proof does not shift.

Irrespective of that burden, however, both parties must be given an opportunity to submit evidence regarding priority in an interference proceeding. Once all evidence has been submitted, the Board must assess, in light of all the evidence presented by both parties, whether the junior party has met its ultimate burden of proving priority by preponderance of the evidence.

In sum, under 37 C.F.R. 1.657(a) and (b), the ultimate burden of proof...