Case Name: Galderma Labs., L.P. v. Tolmar, Inc., No. 2013-1034, 2013 U.S. App. LEXIS 24573 (Fed. Cir. Dec. 11, 2013) (Circuit Judges Newman, Bryson, and Prost presiding; Opinion by Prost; Dissent by Newman) (Appeal from D. Del., Stark, J.) (Because the prior art combination disclosed each and every element of the asserted patents, and the district court’s findings concerning secondary considerations were erroneous, the district court’s finding of non-obviousness was reversed on appeal.)
Drug Product and Patent(s)-in-Suit: Differin® (0.3% adapalene gel); U.S. Patent Nos. 7,579,377 (“the ’377 patent”), 7,737,181 (“the ’181 patent”), 7,834,060 (“the ’060 patent”), 7,838,558 (“the ’558 patent”), and 7,868,044 (“the ’044 patent”)
Nature of the Case and Issue(s) Presented: Plaintiffs are the assignees of the patents-in-suit, which claim compositions and methods of use related to aqueous gel containing 0.3% by weight adapalene used to treat acne. Tolmar filed an ANDA, containing a paragraph IV certification, seeking approval from the FDA to market a generic version of plaintiffs’ branded adapalene gel formulation. In response to Tolmar’s ANDA, plaintiffs filed a complaint alleging infringement of certain claims of the ’377 patent. The complaint was subsequently amended several times to include infringement of the other patents in suit.
After a bench trial, the district court ruled in plaintiffs’ favor. Tolmar appealed to the Federal Circuit challenging the district court’s holding that the asserted patents were nonobvious. The Federal Circuit held that claims 35 and 36 of the ’181 patent, claims 24 and 27 of the ’060 patent, claim 5 of the ’558 patent, and claims 40 and 41 of the ’044 patent were invalid as obvious.
Why Tolmar Prevailed: Tolmar’s invalidity arguments centered on three prior art references: U.S. Patent No. 4,717,720 (“the ’720 patent”), U.S. Reissue No. 34,440 (“the ’440 patent”), and a Differin® 0.1% Gel Data Sheet. The specification of the ’720 patent disclosed a range of adapalene concentrations from 0.01% to 0.1% by weight and described using the compound to treat acne. The ’440 patent, nearly identical to the ’720 patent, included a claim that described a limitation involving a preferred range of 0.01% to 1% for cosmetic compositions as the active ingredient. The data sheet disclosed a 0.1% adapalene gel as a treatment for acne, as well as disclosing all but one of the inactive ingredients listed in the asserted claims. The Federal Circuit also noted that Tolmar identified a number of prior art studies describing the use of 0.3% adapalene solutions in animal clinical studies to treat acne and other conditions.
Tolmar’s obviousness case was both straightforward and potent in that the prior art patents in combination with the data sheet disclosed all of the claimed limitations except for one inactive ingredient of the asserted claim. But the Federal Circuit determined that an equivalent of the inactive ingredient was disclosed in the data sheet. The Federal Circuit disagreed with the district court’s conclusion that Tolmar was required to produce evidence providing motivation to triple the concentration of adapalene from 0.1% to 0.3%. Such a directive was error. Tolmar’s only duty was to show that the differences between the claimed invention and the prior art were such that the claimed invention as a whole 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. The Court re-framed the issue as determining whether there was motivation to select the claimed 0.3% adapalene composition in the disclosed range. In a situation where there is a range disclosed in the prior art, and the claimed invention falls within that range, the burden of production falls upon the patentee to come forward with evidence that (i) the prior art taught away from the claimed invention; (ii) there were new and unexpected results relative to the prior art; or (iii) there were other pertinent secondary considerations.
The district court found that the prior art taught away from the claimed invention because there was evidence that increasing the adapalene concentration would result in increased irritation and side effects. Additionally, the prior art taught that a 0.1% solution was the optimal concentration with respect to potency and side effects. The district court erred in reaching those conclusions. Instead, the Federal Circuit cited studies that addressed increasing concentrations from 0.03% to 0.1% and did not specifically address the claimed 0.3% solution. Additionally, the Federal Circuit noted that although a teaching that a 0.1% composition may be optimal or standard does not imply that other concentrations should be criticized, discredited or otherwise discouraged. Accordingly, the cited references did not teach away from a 0.3% concentration.
The Federal Circuit next addressed secondary considerations of non-obviousness. The district court found that unexpected results and commercial success were persuasive considerations in support of patent non-obviousness. Plaintiffs argued that tripling the concentration of adapalene from 0.1% to 0.3% to achieve greater efficacy was unexpected because a skilled artisan would have expected a proportional increase in side effects and irritation. The Federal Circuit disagreed. The failure of that increase in irritation and side effects to materialize, though unexpected, constituted only a difference in degree from prior art results. Therefore, such an increase in concentration without an increase in irritation was not an indication of non-obviousness. The Federal Circuit also took issue with the district court’s finding that Differin was a commercial success. The district court supported its finding by noting that Differin® 0.3% quickly gained and maintained market share even in the face of an overall declining acne-treatment market and decreasing promotional expenditures while facing competition from 0.1% adapalene generic competitors. The district court also found that Tolmar was seeking to sell its generic version precisely because of plaintiffs’ success. The Federal Circuit held that it was the entire purpose of the generic drug industry to market and sell drugs at a profit. Nearly all Hatch-Waxman litigation (and likely all patent litigation in general) involved a defendant seeking to enter the market because it appeared to be profitable. The Federal Circuit also dismissed the district court’s reliance on Differin’s commercial success in the face of a declining overall market and generic competitors at the 0.1% concentration. The Federal Circuit noted that where market entry by others was precluded (due to blocking patents), the inference of non-obviousness from evidence of commercial success is weak.
In her dissent, Judge Newman took issue with the panel’s discarding of a number of factual determinations that had been made by the district court that should not have been disturbed on appeal. Specifically, she noted that a number of the cited studies as well as expert testimony in the district court trial supported plaintiffs’ argument that increasing the concentration from 0.1% to 0.3% would have led to an expectation of a proportional increase in side effects and irritation. Judge Newman also questioned the panel’s decision to disregard the commercial success of Differin® 0.3% due to the fact that it had steadily gained market share against generic 0.1% concentration competitors, as well as other acne medications. Judge Newman also disagreed with the panel’s conclusion that it was obvious to triple the concentration of adapalene without expecting an increase in side effects and irritation. The prior art showed a clear trend toward increased adverse side effects with increasing concentrations.
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