In Court, Secondary Considerations Must Be Considered Before Making an Obviousness Determination

In reversing a district court’s finding of obviousness, the U.S. Court of Appeals for the Federal Circuit held that there is no burden-shifting framework for determining obviousness and that a fact-finder must consider secondary considerations before making an obviousness determination. Eurand Inc. v. Mylan Pharmaceuticals Inc. (In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation), Case Nos. 11-1399; -1409 (Fed. Cir., Apr. 16, 2012) (O’Malley, J.).

The plaintiffs are the owner and exclusive licensee of two patents that cover an extended-release formulation of cyclobenzaprine, a muscle relaxing drug marketed as Amrix. The defendants filed Abbreviated New Drug Applications (ANDAs) for generic versions of Amrix, with Paragraph IV certifications alleging that the patents were invalid. In a bench trial, the district court held that the claims were obvious in view of the immediate-release formulation of cyclobenzaprine. In particular, the district court found that the claimed extended-release pharmacokinetic (PK) profile is “bioequivalent” to the immediate-release PK profile. The district court concluded that bioequivalence alone was sufficient to support a finding of obviousness. While the plaintiffs offered objective evidence of secondary considerations, including failure of others and long-felt need, the district court held that it was co-plaintiff Cephalon’s burden to disprove the initial finding of obviousness. The plaintiffs appealed.

The Federal Circuit reversed, noting that the record established that a skilled artisan did not know the pharmacokinetic /pharmacodynamic relationship even for the immediate-release formulation. Thus, the Federal Circuit concluded that there was no way to match the dosage for the extended-release formulation to achieve a known therapeutic effect. Moreover, the Court found that the prior art gave no indication of which parameters were critical nor direction as to which of many possible choices was likely to be successful. The Court concluded there could be no finding of obviousness absent a finding that the prior art would have taught or suggested a therapeutically effective formulation.

Furthermore, the Federal Circuit held that the district court erred by making its finding of obvious before it considered the objective evidence of secondary considerations. The district court adopted a legal framework in which the party challenging the validity of patent first proves a “prima facie” case of obviousness based on the patent and relevant prior art; then the prima facie case is “rebutted” by the patentee based on objective considerations. The Federal Circuit held that such a burden-shifting framework “controverted this court’s precedent requiring that a fact finder consider all evidence relating to obviousness before finding a patent invalid on those grounds,” and improperly shifted the burden of persuasion to the patentee. Instead, a fact finder must withhold judgment on an obviousness challenge until all relevant evidence has been considered collectively. Objective factors should not be characterized as “after-the-fact considerations” or relegated to “secondary status.”

Practice Note: In a footnote, the Federal Circuit explained that “[u]nlike in district court litigation, a burden-shifting framework makes sense in the prosecution context,” because the framework furnishes a “procedural tool of patent examination, allocating the burdens of going forward as between examiner and applicant.” Litigation, however, differs significantly from the examination process, and courts should not apply the burden-shifting framework for invalidity determinations.