Last year, in a lengthy split decision, a Fed. Cir. panel affirmed the district court’s ruling that four “add-on” patents that Acorda owned were invalid as obviousness in view of a number of prior art references (Acorda Ther., Inc. v. Roxanne Labs., Inc., Appeal No. 2017-2078, 2017-2134 (Fed. Cir., Sept. 10, 2018). An earlier Elan patent licensed to Acorda was held to be valid and infringed, but it expired on July 30, 2018 (U.S. Pat. No. 5,540,938). This patent broadly claimed the use of a sustained release dosage form or 4-aminopyridine (4-MP) to treat multiple sclerosis (MS). On April 4th, surely encouraged by Judge Newman’s dissent, Acorda petitioned the Supreme Court for a writ of cert.
Acorda’s patents comprised “regimen- type claims” that specified that 4-MP should be administered (a) in a 10 mg dose twice a day (2) at that stable dose for the entire treatment period of at least 2 weeks (3) to achieve 4-MP serum levels of 15-35 ng/ml and (4) to improve walking by MS patients. Acorda received FDA approval to market 4-MP as Ampyra(c) and the four patents, e.g., U.S. Pat. No. 8,007,826 were listed in the Orange Book.
Hatch-Waxman litigation ensued, and Judges Dyk and Taranto wrote a 56-page opinion that affirmed the obviousness ruling by the district court. Judge Newman wrote a 24-page dissent. What makes this case particularly interesting – apart from the Fed. Cir.’s general hostility to add-on patents — is the attention given to the role of the “blocking patent doctrine” in a s. 103 analysis. Briefly, the Fed. Cir. agreed with the district court’s analysis that objective indicia of nonobviousness, such as failure of others, long-felt need and commercial success should be given little or no weight in resolving the obviousness question, when the patentee controls a patent with claims broad enough to discourage activity by other companies to enter the marketplace, due to liability for infringement.
Acorda argued that the district court had applied “a categorical rule that a blocking patent defeats the significance of such objective indicia to the obviousness determination.” The majority of the panel disagreed, and stated that the district court’s opinion:
“is best read not as invoking a categorical rule, but as drawing conclusions on the limited factual record created in this case bearing on the effect of [the Elan] blocking patent. In any event, the court did not err in concluding that the defendants proved obviousness, [even after?] considering the evidence on objective indicia…If the later invention is eventually patented by an owner or licensee of the blocking patents, that potential deterrent effect is relevant to understanding why others had not made, developed, or marketed that ‘blocked’ invention and, hence to evaluating objective indicia of the obviousness of the later patent.”
The majority of the panel cited Merck v. Teva, 395 F.3d 1364 (Fed. Cir. 2005) and Galderma v. Tolmar, 737 F.3d 731 (Fed. Cir. 2013) as cases in which the evidence of commercial success was “weak” or “minimal” when the plaintiff’s earlier patents:
“depressed incentives for others to invent the [claimed regimen]….a blocking patent diminishes possible rewards from a non-owner’s or non-licensee’s investment activity aimed at an invention whose commercial exploitation would be infringing, therefore reducing incentives for innovations in the blocked space…Acorda did not supply evidence to make unreasonable the implicit finding that securing freedom from blocking patents in advance is likely important to pharmaceutical research investments.”
The majority’s hostility to the use of “product line extensions” to avoid the “patent cliff” of losing a company’s monopoly on a brand name drug due to patent expiration is the subject of a lengthy footnote that does not cite any case law, but rather cites a number of articles and news releases about the use of such add-on patents.
Judge Newman’s dissent begins with a description of the prior art cited by the majority as evidence of obviousness, that she believes evidences continual failures by Elan, Acorda and others to develop a useful regimen for 4-AP. She argues that the Elan patent did not discourage further attempts to find an effective treatment regimen for the drug. She would find that the Acorda patents are unobvious “patents of selection” from the parameters of the prior art studies on 4-MP:
“Commercial success is measured against the products available for the same purpose, not against infringing copies of the patented product. Defendants do not contend that they are precluded from providing or developing other treatments for [MS]. The Acorda product met a long-felt need, for which the failure of others, despite decades of experimenting with the neurological properties of 4-AP, is evidence of the unobviousness of the Acorda treatment. Such evidence is an important aid to a court that is attempting to divine whether the patentee’s discovery was obvious.”
On April 4, 2019, Acorda petitioned the Supreme Court for a cert., posing the question presented as:
“[W]hether objective indicia of nonobviousness may be partially or entirely discounted where the development of an invention was allegedly ‘blocked’ by the existence of a prior patent, and, if so, whether an ‘implicit finding’ that an invention was ‘blocked’, without a finding of actual blocking, is sufficient to conclude that an infringer has met its burden of proof.”
Acorda argues the flip side of the Fed. Cir.’s position that Acorda did not rebut the district court’s “implicit” finding that securing freedom from blocking patents in advance of beginning a research program “is likely important to pharmaceutical research investments”:
“By dramatically lowering the bar for successful obviousness challenges, the blocking-patent doctrine will inevitably deter pharmaceutical companies from undertaking the costly, high risk, and time-consuming research required to produce innovative drugs, like Ampyra©, that can immeasurably improve the quality of patients’ lives.”
Acorda also urges the Court to consider that the Fed. Cir. decision conflicts with Microsoft Corp. v. i4i, 564 U.S. 91 (2011) which held that a party challenging a patent as obvious bears the burden of proving invalidity by clear and convincing evidence, since patent are presumed to be valid. (Interestingly, Acorda is arguing, in effect, that the Elan patent, which the district court held was valid, lacks utility or fails to teach how to “use” 4-AP. Would Acorda have been in a better position if the district court had invalidated the “blocking patent.” Could the defendants reasonably have argued both that the Elan patent was a blocking patent and invalid? See page 4, para. 1 of the Petition.)
Acorda argues that, despite the dominant Elan patent, no evidence of failed attempts by others to license it, no evidence of the economic effect of practicing or experimenting with the invention abroad, and no evidence of the effect of the presence of the safe harbor of s. 271(e)(1) was presented by the defendants. In other words, there was no evidence presented that anyone was in fact “blocked” from developing treatment regimens based on 4-AP.
A minor quibble with the Petition is that Acorda conflates the motivation and investment needed to obtain improvement patents – e.g., new uses of known compounds, new dosing regimens and dosage forms – with the investment needed to discover and patent a new drug. Ampyra® is described as a new “drug” rather than as a new treatment regimen with a known active agent in a number of places; sometimes both terms are used together: “Rather than being reward for its innovative efforts, however, Acorda has now been stripped of its patent protection, despite …evidence that it discovered a drug that had eluded the efforts of others who had tried for years to develop [a treatment for MS].” This may be an attempt to strengthen the argument that Acorda simply created a “patent thicket” of “improvement patents” when it discovered a workable treatment regimen.