Inter Partes Review Decision on Pharma Patents May Open Floodgates

By Joshua Fruchter, Esq
The America Invents Act introduced a procedure called inter partes review (IPR) that provides accused patent infringers with a mechanism to use prior art consisting of patents and printed publications to challenge the validity of patent claims before the Patent Trial and Appeal Board (PTAB). Accused infringers must petition for review by the PTAB within one year of being served with an infringement complaint.

As per a chart provided by the USPTO, IPR has steadily gained in popularity since becoming available on September 16, 2012. Driving this trend are important advantages of IPR over district court litigation, including broader claim construction standards, lower burden to prove invalidity, speedy resolution, and lower costs.

Until recently, the overwhelming majority of IPR petitions had been filed against electronic and mechanical patents. However, according to commentators, that may change as a result of the four Gnosis decisions handed down by the PTAB on June 20, 2014, resolving challenges to certain pharmaceutical-related patents on “obviousness” grounds.

The relevant IPR petitions were filed by Gnosis, a biotech manufacturer that had been sued in 2012 by Merck & Cie (Merck), South Alabama Medical Science Foundation (SAMSF) and Parmlab for allegedly infringing four patents owned by Merck and SAMSF related to certain natural folate compounds suitable for use in vitamin supplements to prevent or treat conditions caused by folate deficiency.

The four decisions effectively invalidated all 58 of the challenged patent claims spread across the four patents. Commentators believe the resounding victory achieved by Gnosis may lead to a substantial increase in IPR petitions directed at pharma patents as the generic drug industry digests the advantages of IPR as a tool to challenge such patents.

An overview of one of the four Gnosis decisions is instructive in terms of the PTAB’s analysis and approach. SAMSF’s patent 7,172,778 (‘778 Patent) was titled “Food and Vitamin Preparations Containing the Natural Isomer of Reduced Folates.” Gnosis argued that the ‘778 Patent was rendered unpatentable as “obvious” in light of three prior art references: a European patent application (by Serfontein), a U.S. patent (by Marazza), and a published scientific research paper (by Ueland). In support, Gnosis relied on the declaration of a single expert, Dr. Joshua W. Miller (Miller). In opposition, SAMSF submitted declarations from multiple experts. Each side deposed the other’s experts.

In a nutshell, Gnosis argued that based on the teachings of Serfontein, Marazza, and Ueland, it was obvious that the natural folate compounds referenced in the ‘778 Patent were suitable and available for use in vitamin supplements to treat folate deficiency.

Citing the declarations of its experts, SAMSF argued that the general acceptance of folic acid as the “gold standard” for folate supplementation in food and vitamins would have discouraged one skilled in the relevant arts from considering other forms of folate for this purpose. The PTAB disagreed, observing that “it does not follow that a person of ordinary skill would have avoided alternatives to [folic acid] simply because a standard is known to be suitable and to work well.”

SAMSF further argued that individuals skilled in the relevant arts would have been dissuaded from using the relevant natural folate compounds to treat folate deficiency due to inferiority of such compounds to folic acid in several properties, including bioavailability, substrate activity, disruption of folate metabolism, stability and commercial availability.

Dissecting the declarations of each side’s experts, the PTAB rejected all of these arguments. Concerning bioavailability, the PTAB ruled that SAMSF had failed to prove that the bioavailability of the relevant folate compounds was considered to be so low as to discourage their use for dietary supplementation purposes. Similarly, the PTAB found no evidence that concerns about substrate activity, disruption of folate metabolism, and stability existed with respect to the relevant folate compounds at the time the ‘778 Patent was filed. Finally, the PTAB held that SAMSF had failed to establish that making or acquiring the relevant folate compounds in adequate commercial quantities was so problematic as to discourage their use for the proposed purpose.

The PTAB rejected additional arguments by SAMSF that the prior art itself discouraged use of the relevant natural folate compounds, or alternatively, was so vague as to render use of the relevant natural folate compounds nonobvious. Commercial evidence of nonobviousness provided by SAMSF, including the commercial success, and widespread praise of products incorporating the natural folate compounds referenced in the ‘778 Patent, was deemed to lack a nexus to key elements of such patent. That is, the PTAB concluded that “prior art” elements, and not any novel elements of the ‘778 Patent, accounted for the objective evidence of nonobviousness identified by SAMSF.

In sum, the PTAB found that the opinions of Gnosis’ expert were far more persuasive and credible than the opinions advanced by SAMSF’s experts. As a result, the PTAB concluded that Gnosis had demonstrated the unpatentability of the key claim comprising the ‘778 Patent by a preponderance of the evidence. See 2014 WL 2875387.

Were you surprised at the outcome in the Gnosis decisions? Do you agree that these decisions will open the “floodgates” to future IPR challenges to other pharma patents?

Joshua Fruchter, Esq

An NYU School of Law graduate, Joshua has been practicing as a litigator for over twenty five years. Joshua has published regularly on legal marketing topics in numerous law-related periodicals, and presented on legal marketing technologies to various bar and legal marketing associations.   Mr. Fruchter is a recognized voice in litigation commentary, who has discussed issues ranging from Daubert analyses and inventor testimony in patent litigation, to predictive coding in document reviews.

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