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Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc

Case Name:  Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc., 769 F.3d 1339 (Fed. Cir. Oct. 20, 2014) (Chief Judge Prost, Circuit Judges Newman, Plager, Lourie, Dyk, Moore, O’Malley, Reyna, Wallach, Taranto, Chen, and Hughes presiding; per curiam opinion) (Appeal from D. Del., Burke, M.J.) (Denial of request for en banc hearing of the issue regarding use of evidence related to unexpected results in the obviousness analysis.)

Drug Product and Patent(s)-in-Suit: Baraclude (entecavir); U.S. Pat. No. 5,206,244 (“the ’244 patent”)

Nature of the Case and Issue(s) Presented:  The issue here concerns whether the Federal Circuit should conduct an en banc hearing regarding the issue of whether evidence that post-dates the effective filing date of the patent may be used to demonstrate unexpected results to defeat an obviousness challenge. Baraclude tablets are used to treat chronic hepatitis B. Entecavir is a reverse transcriptase that inhibits the viral DNA replication upon infection. The challenged claim of the ’244 patent was directed at the pharmaceutical compound of entecavir.

At the district court, Teva proved by clear and convincing evidence that the challenged claim was invalid under 35 U.S.C. § 103. In particular, Teva demonstrated that one of skill in the art would use the lead compound of 2’-deoxyguanosine and make minor modifications to reach the claimed compound. The district court rejected BMS’ argument that evidence created after the effective filing date of the ’244 patent that 2’-deoxyguanosine was toxic in humans demonstrated the unexpected results of the claimed compound, which was not toxic. On appeal, a panel of the Federal Circuit affirmed the obviousness decision of the district court.

BMS requested an en banc hearing on the issue of whether evidence that post-dates the effective filing date of the patent may be used to demonstrate unexpected results to defeat an obviousness challenge. BMS asserted that the panel’s opinion created a new standard for obviousness for pharmaceutical patents and shifted the burden of proving obviousness to the patent holder. The Federal Circuit denied the request.

Why Teva Prevailed:  The judges that dissented from denial of the request for en banc hearing raised at least four issues that exist in light of the panel’s decision. These four issues include (i) treatment of post-invention evidence regarding the differences between the prior art and the invention, specifically when determining if a skilled artisan would have been motivated to make the claimed compound with a reasonable expectation of success for its therapeutic use; (ii) description of what constitutes an unexpected result in the pharmaceutical context; (iii) the party upon whom it placed the burden of proof at certain stages of its obviousness inquiry; and (iv) the weight evidence of objective indicia of non-obviousness should be given.

One of the issues that received significant consideration in the opinion and other amicus briefs is whether post-effective filing date evidence can be used to demonstrate unexpected results of the patented invention. The judges who denied the petition for en banc hearing indicated that the panel was correct in finding that such post-effective filing date evidence may be used to demonstrate unknown or unappreciated features of the claimed invention. Moreover, Judge O’Malley opined that what BMS really was arguing was that the district court did not give this post-effective filing date evidence the proper weight, which did not warrant en banc review.

Judge O’Malley stated that the panel’s statement of difference in kind or difference in degree did not create a new standard for pharmaceutical patents. Rather, the panel correctly applied case law precedent that when determining unexpected results, the analysis requires the comparison of degree and kind of results expected in the art with the unexpected results of the claimed invention. Judge O’Malley noted that the statement in the panel’s opinion regarding mere differences in degree could be taken out of context. But an appropriate review of the entire opinion would demonstrate that the statement regarding difference in kind and difference in degree was nothing more than an example of how a court may determine the differences between the prior art and the unexpected results of the claimed invention.

As to the issue of burden shifting, Judge O’Malley rejected such contention because the panel and the district court both said they were applying a holistic approach to the obviousness analysis. Thus, the burden was not shifted to the patent owner and did not warrant en banc review.

Judge O’Malley rejected the notion that the panel’s opinion created some new process of comparing some secondary considerations of non-obviousness, which may cancel each other out. Rather, Judge O’Malley stated that the case was won or lost on the record, which contained testimony from BMS’ expert that one of skill would use 2’-deoxyguanosine as a lead compound at the time of the effective filing date, such that the evidence from Teva and BMS supported Teva’s position that the challenged claim was obvious. Thus, the panel’s decision did not create some new process of comparing evidence when all of the evidence was in favor of Teva’s position.

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