Public & Experimental Use: Reduction to Practice Requires Knowledge that Invention Works for Intended Purpose

In re Omeprazole Patent Litigation (Fed. Cir. 2008)

The CAFC has affirmed a lower court trial finding that AstraZeneca's Prilosec (omeprazole with an enteric coating and a subcoating) patents are infringed by the ANDA filings of Apotex, Torpharm, and Impax. (See U.S. Patent Nos. 4,786,505 and 4,853,230). This complex consolidated case has been handled by Judge Jones of the Southern District of New York. The case includes several important procedural issues, but here I focus on public use.

Public Use of a Pharmaceutical Formulation: Under 35 U.S.C. § 102(b), a patent will be considered invalid if the invention was "in public use" more than one year before the filing date. (i.e., before the "critical date"). The use in question was Astra's large clinical trials used to test its omeprazole formulation. The district court ruled for Astra on two separate grounds: First that the clinical trials were an "experimental use" and therefore cannot qualify as public uses and second that the formulation was not yet ready for patenting until after the trials were completed.

Experimental Use and Reduction to Practice: In a series of cases over the past decade, the Federal Circuit has made clear that the experimental use defense "cannot negate a public use" that occurs after the invention is reduced to practice. At the same time, public use now requires proof that an invention is "ready for patenting" which generally requires reduction to practice (or at least being enabled to practice). For the most part, this rather new interpretation of public use subsumes the experimental use defense.

Here, the pills had been manufactured and were being used by clinical subjects. However, there were not "reduced to practice" because RTP requires knowledge "that the invention would work for its intended purpose." On appeal, the Federal Circuit refused to overturn the lower court's factual findings – instead agreeing the formulation was not reduced to practice because the company lacked experience of how it would perform clinically:

[Astra's expert witness] testified that as of May 1983 the Astra scientists did not have enough information to satisfy themselves that the Phase III formulation would work for its intended purpose. Instead, he testified that the Astra scientists thought the Phase III formulation "had a good possibility to be used as a marketing drug" but that the team did not have long-term stability data and had "no experience of how it performed in clinical studies."

….

The Astra scientists had long understood that omeprazole could provide a safe and effective treatment for certain gastrointestinal diseases. The challenge they faced was developing a formulation to deliver omeprazole to the small intestine, a challenge that was made difficult by omeprazole's sensitivity to acidic environments, such as the stomach. Impax has not demonstrated that, without conducting the Phase III clinical tests, the inventors knew that the Phase III formulation would achieve the goals of long-term stability and in vivo stability such that it would be effective as a treatment for gastrointestinal disease.

Because the efficacy of the formulation was not reduced to practice, its use could not be a public use.

Notes:

• Of interest here is the idea that reduction to practice requires knowledge that the invention will work for its "intended purposes." The specification of these patents detail the need for stability, so that purpose is clear. Because "purposes of the invention" have been used to limit claim scope, many modern patent applications don't include such information. In those cases, will the purpose be found in extrinsic evidence?
• The court here focused on reduction to practice to fulfill the "ready for patenting" prong of the public use analysis. Seemingly, the defendants may have had a better shot trying to show ready for patenting based on evidence that "prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention."

Comments

[Lionel Hutz]

While I don't object to the ultimate outcome, isn't this contrary to precedent. I thought the SCOTUS or subsequent CAFC rulings had explicitly (or strongly implicitly) stated that the idea that reduction to practice requires knowledge that the invention will work for its "intended purposes" was NOT a component of ready for patenting.

On the other hand, I think this should qualify as an experimental use.

[Lionel Hutz]

CORRECTION: I meant "ready for patenting" and not "reduction to practice"

[Lionel Hutz]

Trying to cut and paste is confusing. Laziness just creates more work. Here is what I meant to say.

While I don't object to the ultimate outcome, isn't this contrary to precedent. I thought the SCOTUS or subsequent CAFC rulings had explicitly (or strongly implicitly) stated that ready for patenting did NOT require knowledge that the invention would work for its "intended purposes." Once the final design, composition, etc., was complete, the invention was ready for patenting.

On the other hand, I think this should qualify as an experimental use.

[Zak]

Lionel,

If it true that being "ready for patenting [does] NOT require knowledge that the invention would work for its 'intended purposes,'" then City of Elizabeth v. American Nicholson Pavement Co. 97 US 126 (1877) must be wrong. In that case the inventor basically left his invention (a street) out for testing in plane view for several years before filing a patent applicaiton. Every day during this long testing period the inventor walked on it, poking it with his cane. The SCOTUS held that this was a permissable experimental use, even though it was the tested version that was eventually patented. This is a keystone case that I do not beleive has been overturned yet.

Personally, I think the better argument comes from In re Smith, 714 F2d 1127 (Fed Cir 1983). In that case the Court held that purported experimental test carried out in consumers homes to test operability were not experimental uses but rather patent defeating public uses. To support its holding, the court stated that such "data could have easily been obtained in [the patentees] own facilities." This implies that test done to collect data that could have been collected by the patentee by means other than a public use is not an experimental use. The argument could have been that the data of operability could have been obtained in the patentees own animal lab.

Of course, as this was a clinical test carried out by Doctors the implied confidentiality TB Lab v. Professional Positioners, Inc, 724 F2d 965 (Fed Cir 1984) could have made this a non-public use.

I think the bigger questions is "If my Phase III FDA testing is an experimental use excusing 102(b) public use, then why do I need the term adjustment of the Hatch-Waxman Act?" Instead I could just file after my clinicals are complete.

[Malcolm Mooney]

"Impax has not demonstrated that, without conducting the Phase III clinical tests, the inventors knew that the Phase III formulation would achieve the goals of long-term stability and in vivo stability such that it would be effective as a treatment for gastrointestinal disease."

So if I look at the claims, which I haven't done yet, I will find that they recite elements that limit the invention to ONLY those formulations with long-term stability and in vivo stability. Right? And I'm not talking about a recitation of the *desired* properties. I'm talking about a recitation of the components of the formulation such that it covers ONLY formulations with those properties.

Otherwise we have a problem. A big problem.

[Zak]

Malcolm,

We have big problem regardless of what the claims say are have been interpreted to say. Basically, this a phase 3 clinical trial the court has held to be an experimental use becuase the patentee did not know prior to the trial that the claimed drug would be an "effective as a treatment for gastrointestinal disease".

To get to a phase III clinical trial you have to first file with the FDA an NDA supported by animal data. Then you do a small scale phase 1 trial on healthy volunteers to make sure the drug does not kill anyone. After that you do a small scale Phase 2 trial on patients that have not responded to other therapies to demonstrate efficacy and further demonstrate safety. Then you do a phase III trial on a large scale patient population to further demonstrate safety and efficacy. Basically, I find it impossible to believe that by the time the patentee gets to a phase III clinical trial he still unsure as to whether the drug is "effective as a treatment for gastrointestinal disease" for the purposes of establishing utility under 35 USC 101.

[Malcolm Mooney]

"Basically, I find it impossible to believe that by the time the patentee gets to a phase III clinical trial he still unsure as to whether the drug is "effective as a treatment for gastrointestinal disease" for the purposes of establishing utility under 35 USC 101."

It does seem to contradict the ancient position held by the PTO that clinical trials are not necessary to prove efficacy or utility or enablement. I would imagine that AstraZeneca has recited and relied on the disconnect between the two concepts before the PTO hundreds of times over the years.

But as I said: I'm sure when I look at the claims, all my concerns will disappear ...

[Andrew Dhuey]

Zak, I agree that there is a lot of tension between this efficacy requirement related to "public use" and the utility requirement of Section 101. Empirically speaking, though, it's quite prudent for an inventor to remain cautious about efficacy even after a very successful Phase II trial. I don't have the numbers handy, but I believe that only a small percentage of drugs with a successful Phase II ever cross the finish line to FDA approval.

[Zak]

Andrew,

It is true that a substantial portion of pharmaceuticals, and medical devices for that matter, do not survive FDA testing. However, what I was rather factiously trying to point out is that CAFC’s holding in this case creates a rather substantial gap in time between when I may file a patent application on an invention that treats the human body under In re Brana and when I have to under Pfaff v. Wells Electronics, Inc.

Under Brana, I have satisfied the 101 / 112 utility-enablement requirement for an invention that treats the human body when I have acquired from a “statistically significant test with standard experimental animals” a reason to suspect the invention's claimed utility in humans. This is true “even though it may eventually appear that the [invention] is without value in the treatment of humans.” So basically under Brana, I can file a patent when I have data sufficient to give a reasonable expectation of successful In Vivo use of the invention. Therefore, the “laboratory experiments reveal[ing] … that the water-soluble subcoating increased gastric acid resistance and long-term stability” would have allowed Astrazeneca to file a patent application before the Phase III clinical trials strated.

However, according to the CAFC’s holding in this case, data demonstrating a reasonable expectation of successful In Vivo use it not a “determination that the invention [will] work for its intended [In Vivo] purpose.” Such a determination can be the subject of FDA clinical trials. Furthermore, according to the CAFC I need not file a patent application until one year after I have made such a determination from the clinical trials and “constructed an embodiment or performed a process that met all the limitations.” As FDA testing can take years, even for a simple 510K application, this gives me a long gap between when I can and when I must file to preserve US patent rights to an invention.

So basically, what the CAFC is saying in this case is that the experimental data needed to support a patent filing is not necessarily the same data creating a Pfaff ready for patenting, 102(b) triggering public use. This means that I may proceed well into FDA clinical trials before I start the 102(b) clock ticking.

Will this change when I file patent applications? It absolutely will not. As in-house counsel for a Medical Device company, I have to guard against the loss of foreign patent rights. Unfortunately, not all foreign countries are gracious enough to give applicants a one-year grace period following their first public use. Consequently, I have to have something on file in at least one PCT signatory country before I let the company make a public disclosure. As to err on the side of caution, we try to have something on file before we submit our first FDA application. Of course, assuming that this holding applies to medical devices and pharmaceuticals equally, my first filings may become PCT filings instead of US filings. So doing may give the company a longer lasting US monopoly.

[MaxDrei]

Zak, thanks for that. Can I ask for more? 1) If as you say your company files PCT first and USPTO later, are there any adverse consequences for your 102e date? I had always supposed that, for any US med devices company, the US patent was worth more than all the ROW put together, so I had presumed that the earliest possible 102e date has to be a "no compromises" objective. 2) When would you belatedly file in the USA? At the latest, just before the WO publishes, I suppose.

[Lionel Hutz]

Zak wrote "If it true that being "ready for patenting [does] NOT require knowledge that the invention would work for its 'intended purposes,'" then City of Elizabeth v. American Nicholson Pavement Co. 97 US 126 (1877) must be wrong."

That's not true. My point was this should have been an experimental use case, which it apparently was not. The ruling state that it was not a public use because they did not know it would work.

However, upon further consideration, it occurs to me the cases I was thinking of were in terms of sales and not use.

[Lionel Hutz]

Zak, assuming Dennis' summary is correct, the court did not find an experimental use here. I believe they should have.

[fisher ames]

heh...Gonzo got a job. guess what area of law? don't even need to guess do you.

http://www.bloomberg.com/apps/news?pid=20601110&sid=abnQSa5RHZsQ

[John Roethel]

Thanks for the Gonzo update. If McCain wins, Gonzo for PTO commish!

[Zak]

Lionel,

The CAFC did not explicitly find an experimental use. What they did explicitly find was that there was not a reduction to practice because the patentees did not know that the formulation would work In Vivo in humans even though they thought that it “had a good possibility to be used as a marketing drug" based on the available non-human data. The CAFC then found that the clinical trials were an experiment necessary to satisfy the patentees that the formulation would work for humans.

If the CAFC had been following the traditional view that experimental use is an exception to public use, as one may have expected and as the district court apparently had done, they would have first determine if the formulation patented was ready for patenting at the time of the phase III clinical trial and if the phase III clinical trial was a public use. If the CAFC had determined both in the affirmative, then it would have decided whether the Phase III clinical trial was a permissible experimental use excusing an otherwise public use. Instead of following precedent that experiment use is an exception to public use, the CAFC added a knowledge element to the Pfaff “ready for patenting test.”

Here, the CAFC apparently found that such knowledge could only be gained from the Phase III clinical trail. This seems to imply that if an experiment is needed to assure the inventor that the invention to be patented will work, then the invention is not ready for patenting until the invention has conducted the experiment. This makes experimental use no longer an exception to public use but rather a requirement for public use. This is, however, inline with a the CAFC previously holding in Space System / Loral, Inc v. Lockheed Martin, Corp., 271 F.3d 1076 (Fed. Cir. 2001).

What I find interesting is that the non-human data the patentees had acquired prior to the phase III clinical trial lead them to believe that the formulation “had a good possibility to be used as a marketing drug.” Under In re Brana, this would have been sufficient to satisfy the 112 enablement requirement. The CAFC has previously held that an invention is ready for patenting when the inventor can prepare an enabling disclosure as required under 112. See Robotic Visions System Inc v. View Engineering Inc, 249 F3d 1307 (Fed Cir 2001). So, the formulation should have been ready for patenting prior to the phase III clinical trial. As such, the Phase III clinical trial should have been found to be a public use that may or may not have been an excusable experimental use.

So basically, this is a long-winded way of say that I agree with you, Lionel. This should have been an experimental use case. However, I do not agree that the court should have found the Phase III clinical trial to be an experimental use.

[Zak]

MaxDrei,

As long as the PCT application and the later filed US applications have the same inventive entity, then there should not be a 102(e) problem. Remember, 102(e) only comes into play when the application is “by another.” Furthermore, if the PCT application does not designate the US, then it is not 102(e) prior art.

You’re right that generally the US market is the most valuable market. This is why I would like my 20 year US market monopoly to start as close to the marketing date as possible.

If I were to follow the hypothetical strategy I briefly alluded to, I would file the US application one year after the WIPO publishes. The WIPO publication would be 102(b) prior art, because it would have the same inventive entity as the US application. There is a one year grace period under 102(b). So, I would not have to file until one year after the WIPO published. The WIPO publishes at 18 months from the date of filing, so I would not have to file the US application until 30 months from the date of filing. IF I file the PCT the day my company submits its first PMA or 510K, the countdown on my monopoly wound not begin until 30 month into clinical testing. After 30 months all testing may be completed and FDA approval granted.

I only propose this as a possible strategy. I am in no way commenting on whether you should or should not use this strategy. Furthermore, under this holding once you have knowledge of in vivo operability you have public use on your hands. So you would have to file 1 year after you have become aware of in vivo operability during the FDA approval process. Determining a data mental awareness (aka Knowledge of operability) could be difficullt. Furthermore, the date you set may not be the date the court sets.

Generally, we submit our first US application on the day of or slightly before we file our first FDA application.

[MaxDrei]

Thanks Zak, not least for treating an evidently non-US patent attorney with such patience and respect. Under your scheme, the standard 20 year patent lifetime would run for 18 months longer in the USA than in the ROW. That extra 18 months in the USA is just as available to non-US innovative pharma as it is for domestic US pharma, I suppose.

[Phillip Huggan]

An area suitable for patent reform is discontinued drugs. Often, companies will discontinue drugs because the market isn't big enough to justify a given profit margin. What happens now, is that health administrators will "negotiate" with the company to produce what is needed, or health care providers will make do inferior drugs or nothing. If the company isn't planning to ever manufacture the drug again, wouldn't it be better for everyone if the company were forced to have their patent expired and given from federal/state revenues some sort of fair market compensation, maybe indexed to the drug's R+D cost or whatever they were previously charging for it?
I'm assuming in most cases the company doesn't wind up manufacturing the drug later on, after canning it.
Patents weren't designed to allow a medical company to prevent the manufacture of a product it itself isn't producing.

[left coast]

I wonder if those "discontinued drugs" compete with any of that company's new drugs?

[left coast]

I wonder if those "discontinued drugs" compete with any of the company's new drugs?

[Paul F. Morgan]

For a detailed discussion of whether or not an "actual reduction to practice" [ARP] means the same thing in interference priority determinations as it does for on-sale bar cases like this one, see the Chico Gholz article in the Journal of the Patent and Trademark Office Society, volume 78 (1996), pages 195-200. Chico also wrote me that:
"The In re Omeprazole Patent Litigation opinion is further evidence that there really is a difference between an investive actual reduction to practice [to obtain a patent] and a divestive actual reduction to practice [in avoiding a statutory bar]. While nothing is certain in litigation, if I had been relying on Astrazenica's pre-critical date work as constituting an ARP in an interference, I would have been quite confident of success. Also note that there is nothing in the quoted claims to suggest that the preparations recited in those claims had to meet the kind of standards that the court relied on to say that Astrazenica's work did NOT constitute an ARP."

[Malcolm Mooney]

"Also note that there is nothing in the quoted claims to suggest that the preparations recited in those claims had to meet the kind of standards that the court relied on to say that Astrazenica's work did NOT constitute an ARP"

What a surprise. I wonder: did the defendants fail to bring this critical issue sufficiently close to the judges' noses?

Lesson number one: IT'S ALL ABOUT THE CLAIMS.

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