New Jersey Judge Peter G. Sheridan traced the SCOTUS KSR case in seemingly loving detail, extracting metrics to apply in this case.

Decades ago, the Supreme Court elucidated how obviousness is to be determined. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). The Court stated:

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 non-obviousness 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. As indicia of obviousness or non-obviousness, these inquiries may have relevancy.

Id

About a year ago, the Supreme Court reaffirmed the Graham test and rejected the strict application of formalistic obviousness tests which crept into our jurisprudence over the last forty years. KSR Int'l Co. v. Teleflex, Inc., 127 S. Ct. 1727 (2007). In KSR, Teleflex sued KSR for infringing upon a patent entitled "adjustable pedal assembly with electronic throttle control" (the "Engelgau Patent"). In broad terms, the Engelgau Patent combines an electronic sensor with an adjustable automobile pedal so that a signal is transmitted to a computer that controls the throttle, so the operator may regulate the speed of the vehicle. By way of background, before computers, the accelerator pedal operated via a cable that controlled the throttle which opened and closed valves in order to control speed. In the 1990s, the cables were replaced with electronic sensors that transmitted a signal to a computer-controlled throttle. At the same time, the position of the gas pedal became an issue for "drivers of smaller stature." KSR, 127 S. Ct. at 1735. To remedy this issue, inventors designed an adjustable pedal with integrated sensors. There were several existing patents dealing with various issues regarding adjustable pedals. The Asano Patent adjusts the pedal position but the pivot point (where signal transmission initiates) stays fixed. The Redding Patent utilizes a sliding model where both the pivot point and the pedal adjust. Simultaneously, other inventors were developing modular sensors, i.e. sensors "taken off the shelf" and attached to the pedal. KSR, 127 S. Ct. at 1729. It appears that all the patented solutions were less than perfect, particularly the Redding device, where certain wires had a tendency to fray.

In 1998, Ford hired KSR to supply an adjustable mechanical pedal system for which it obtained a patent (" '976 Patent"). In 2000, General Motors ("GM") contracted with KSR to supply an adjustable pedal for computer-controlled throttles. To make the '976 Patent mechanical pedal work on the computer-controlled throttle GM required, KSR attach a modular "off the shelf" sensor at the pivot point.

Teleflex, the assignee of the Engelgau Patent, believed this infringed upon its patent. The Engelgau Patent claims that it is a "position-adjustable pedal assembly with an electronic pedal position sensor attached to the support system of the pedal assembly. Attaching the sensor to the support member allows the sensor to remain in a fixed position while the driver adjusts the pedal." Id. at 1737.

Teleflex sued, claiming the KSR/GM solution infringed upon its Engelgau Patent. KSR countered that Engelgau Patent was obvious based upon the Asano Patent. The Asano Patent was not disclosed within the prior art references or in the patent prosecution by Engelgau. Id. The trial court, utilizing the Graham test, found "little differences" between the Asano and Engelgau Patents, except for the use of a sensor which was covered by other patents. Id. at 1738. Hence, the District Court concluded that the Engelgau Patent was obvious. Id.

In the interim years, between the Graham decision and the present day, the Federal Circuit adopted the so-called teaching, suggestion, or motivation test ("TSM test") to determine obviousness. Under the TSM test, a patent claim is obvious only if some "motivation or suggestion to combine the prior art teachings can be found in the prior art, the nature of the problem or the knowledge of a person having ordinary skill in the art." Id. at 1734 (internal quotation marks omitted). Applying the TSM test, the Circuit Court in KSR reversed the District Court's decision.

The Circuit Court reasoned that "unless the prior art references addressed the precise problem that the patent was trying to solve, the problem would not motivate an inventor to look at those references." Id. at 1738 (internal quotation marks omitted). The Circuit Court conceded that it may have been obvious to try the combination of the Asano Patent with an off-the-shelf sensor, but this was irrelevant because according to the Circuit Court, "obvious to try has long been held not to constitute obviousness. Id. at 1739 (internal quotation marks omitted).

The Supreme Court granted certiorari because "the Court of Appeals addressed the question of obviousness in a manner contrary to § 103 and [its] precedents." Id. at 1735.

Justice Kennedy, in writing for a unanimous Court, rejected the Circuit Court's "rigid approach." Id. at 1739. The Court reaffirmed Graham's "functional approach," which "set forth a broad inquiry and invited courts, where appropriate, to look at any secondary considerations that would prove instructive." Id. According to Justice Kennedy, the Circuit Court erred for several reasons. First, the Circuit Court had adhered to a "formalistic conception of the words teaching, suggestion and motivation or by overemphasis on the importance of published articles and the explicit content of the issued patents." Id. at 1741. The Court reasoned that "[g]ranting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, in the case of patents combining previously known elements, deprive prior inventions of their value or utility." Id.

Second, the Circuit Court's application of the TSM test too narrowly assumes that a person of ordinary skill in the art would only consider references in the prior art which are designed to solve the same problem. Id. at 1472. Justice Kennedy found that "[c]ommon sense teaches . . . that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle." Id.

Third, the Supreme Court faulted the Circuit Court's rejection of the theory that a claim will not be obvious based on a "combination of elements [that are] 'obvious to try.'" Id. The Supreme Court reasoned that where there is a "finite number of identified, predictable solutions, a person of ordinary skill [in the art] has good reason to pursue [them]." Id. This "is likely the product not of innovation but of ordinary skill and common sense." Id. The principles of KSR have been applied in pharmaceutical cases. See, e.g., Takeda Chemical Indus. v. Alphapharm, 492 F.3d 1350 (Fed. Cir. 2007), pet. for cert. filed 75 USLW 3374 (Dec. 20, 2007) (No. 07-838).

Fourth, the Supreme Court found that the Circuit Court erred by applying "[r]igid preventative rules that deny factfinders recourse to common sense." The Supreme Court noted that such rigid rules "are neither necessary under our case law nor consistent with it." KSR, 127 S. Ct. at 1742-43.

Bayer had argued teaching away, but Judge Sheridan didn't swallow that.

It is hornbook law that when evaluating the teaching away doctrine, the Court does not look at the single reference but considers the prior art as a whole. Here, this Court shall follow Adams, where there were a number of references regarding batteries using acid as fluid, and the Court considered them all. Adams, 383 U.S. at 45-48; In Re Gurley, 27 F. 3d at 553. See Takeda Chem. Indus., Ltd. v. Alphapharm Py., Ltd., 492 F. 3d 1350 (Fed. Cir. 2007), pet. for cert. filed 75 U.S.L.W. 3374 (Dec. 20, 2007) (No. 07-838); In Re Gorman, 933 F. 2d 982, 986 (Fed. Cir. 1991); 2-5 Chisum on Patents § 5.04) (wherein it concludes prior art must be viewed in its entirety).

In the finale, the patented combination was "obvious to try":

As noted, in KSR the Supreme Court ruled that a patent claim may be obvious if the combination of elements was "obvious to try." KSR, 127 S. Ct. at 723-24. In this case, the testimony was limited to discussion about whether or not to employ two common formulation techniques - micronization and enteric coating. As in KSR "there are a finite number of identified predictable solutions." Id. at 724. In this case, based on the prior art as a whole, micronizing and immediately releasing drospirenone was obvious to try.

"[A] reasonable expectation of success, not absolute predictability" supports a conclusion of obviousness. In re Longi, 759 F.2d 887, 896 (Fed. Cir.1985).

Barr also took a stab at public use bar under U.S.C. §102(b), but Judge Sheridan demurred, based upon lack of evidence by Barr: a U.S. trial, following European testing, may have been justified "to determine effectiveness in the more diverse U.S. population."

For a use to be invalidating under section 102(b) it must be public. Public use includes "'any [public] use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor.'" Eli Lilly and Co., v. Zenith Goldine Pharm. Inc., 471 F.3d 1369, 1380 (Fed. Cir. 2006) (quoting In re Smith, 714 F.2d 1127, 1134 (Fed. Cir. 1983)). Barr maintains that Bayer failed to establish the necessary confidentiality and restriction requirements for the U.S. clinical trial.

A use may not be experimental if the invention at issue was reduced to practice. For a pharmaceutical composition, a reduction to practice occurs when an inventor "actually prepared the composition and knew that it would work." Estee Lauder, Inc. v. L'Oreal S.A., 129 F.3d 588, 592 (Fed. Cir. 1997). The Estee Lauder court noted that "when testing is necessary to establish utility, there must be recognition and appreciation that the tests were successful for reduction to practice to occur." Id. at 594-95. After this occurs, "further 'experimentation' may constitute a barring public use." RCA Corp. v. Data Gen. Corp., 887 F.2d 1056, 1061 (Fed. Cir. 1989) (finding that public use is not negated by experiments directed to tangential or unclaimed aspects of the invention).

Barr had also flown the inequitable conduct flag, but Judge Sheridan took it down. Still, barring unlikely appeal reversal, '531 is a dead issue. Judge Sheridan's order.

In a separate action, Bayer is suing Watson Laboratories in Nevada for a low-dose version of Yasmin, called Yaz™, following Watson's ANDA. Meanwhile, Barr is suing Watson for infringing freshly minted oral contraceptive patent 7,320,969, seeking to block Watson from selling a generic version until 2024.

Yasmin raked in $488 million in U.S. sales in 2007.

Bayer yelped that, despite Judge Sheridan's ruling, given FDA rules, no generic maker can market a generic version of its patented formulation until March 2009.