Novo Nordisk v. Caraco: Burden of Persuasion; Unexpected Results in the Prior Art

 Category: 103
 By: John Kirkpatrick, Contributor
TitleNovo Nordisk A/S v. Caraco Pharmaceutical Laboratories Ltd., 2011-1223 (Fed. Cir. June 18, 2013).
[1] Burdens under 103 Analysis
[a] “[Had] the district court misallocated the burden of persuasion […] by forcing Novo to “overcome” Caraco’s “prima facie” case of obviousness with evidence of unexpected results[?]” Novo, at *9 (text added).
[b] “[E]ven if the burdens were properly allocated in this case, [did] Caraco’s evidence insufficiently [support] the court’s ultimate obviousness findings[?]” Novo, at *9 (text added).
[c] “[S]hould [the district court] have deferred to the examiner’s original finding that the Sturis and Moses studies demonstrated unexpected synergy[?]” Novo, at *9 (text added).
[2] Inequitable Conduct“[Had] the district court clearly erred in finding that [the patentee’s] representations and omissions were material and intentional under [Therasense v. Becton, 649 F.3d 1276 (Fed. Cir. 2011) (en banc)?]” Novo, at *20 (text added).
[1] Burdens under 103 Analysis
[a] “[A]s long as the [district] court reserved its ultimate conclusion on validity until after it considered the evidence from both sides, [analysis using terms such as “overcome” and “prima facie”] simply reflects the court’s shift of the burden of production once the court determined that the challenger has established a prima facie case of obviousness.” Novo, at *13 (text added).
[b] It is reasonable that an artisan seeking to combine a known insulin sensitizer (like metformin) with a new insulin secretagogue (like repaglinide) would base his expectations upon prior art sensitizer/secretagogue combinations.” Novo, at *15.
[c] “[W]e treat [a district court challenge to] the issued patent as having a presumption of validity that must be overcome by clear and convincing evidence.” Novo, at *18 (text added).
[2] Inequitable Conduct“[The omission] is nevertheless a non-material omission because it can ‘be rendered irrelevant in light of subsequent argument or explanation by the patentee.’” Novo, at *22 (quoting Therasense, at 1294, text added).

Prosecution History
“The examiner rejected [Novo’s] application, reasoning that it was obvious to try combining repaglinide with metformin, and it was also predictable that the combination would yield, at a minimum, a benefit equal to the drugs taken separately, i.e., an “additive” effect.” Novo, at *4 (footnote removed, text added).
“The examiner withdrew her rejection, explaining that her decision was “[b]ased solely upon the Declaration submitted by Dr. Sturis and reconsideration of the synergistic effects demonstrated in Example 3.” […] [U.S. Patent 6,677,358] issued on January 13, 2004.” Id., (text added). “Claim 4 of the patent, which is the sole claim at issue here, was not amended at any point during prosecution.” Id. at *7.
Procedural History
“[Caraco requested approval] to sell a generic version of repaglinide, […] associated with Novo’s ’358 patent. Caraco certified in the filing that the ’358 patent was invalid or would not be infringed […], and Novo [claimed] that Caraco infringed claim 4 of the ’358 patent. Caraco counterclaimed […] obviousness and unenforceability.” Novo, at *7 (text added).
“[T]he district court [finding instead that Novo’s results were entirely expected in view of the state of the art at that time, Novo, at 9] held that claim 4 of the ’358 patent was invalid because of obviousness and that the patent was not enforceable because of inequitable conduct.” Id. at *8 (text added).    
Legal Reasoning (Newman, Dyk, Prost)
Claim Language“4. A method for treating non-insulin dependent diabetes mellitus (NIDDM) comprising administering to a patient in need of such treatment repaglinide in combination with metformin.” ’358 Patent.
New Prior Art Introduced at Trial“To undermine the examiner’s finding that the [patentee’s] studies had demonstrated synergy, Caraco introduced new prior art and evidence which the examiner had never considered, such as testimony from expert witnesses and Novo scientists.” Novo, at *8 (text added).
[1][a] Burden of Persuasion in District Court Challenge of Patent
Legal Standard on Burden of Persuasion
“It is black-letter law that a patent is presumed valid under 35 U.S.C. § 282, that a party challenging its validity bears the burden of proving the factual elements of invalidity by clear and convincing evidence, and that “because the presumption of validity remains intact . . . throughout the litigation,” the burden of persuasion never shifts to the patentee during the course of a district court obviousness challenge. Pfizer v. Apotex, 480 F.3d 1348, 1359-60 (Fed. Cir. 2007).” Novo, at *9, 10.
“[The patentee] is required to come forward with evidence of nonobviousness only after the challenger has successfully made his prima facie case. […] This benefit relates to the burden of production, which initially lies with the challenger, then shifts to the patentee during the course of the litigation.” Id. (text added). [The patentee] prevails on the issue of validity unless the challenger proves to the decisionmaker by a clear and convincing standard that, after all of the evidence has been placed on the table for consideration, the claim is invalid. […] This benefit relates to the burden of persuasion, […] this burden never shifts during the course of the litigation. Novo, at *12 (text added).
Novo's Position“Novo argues that […] the district court here reached its ultimate obviousness conclusion based solely upon Caraco’s prima facie evidence, then shifted the burden of persuasion onto Novo. […] because the court considered whether Novo had “overcome” Caraco’s evidence by ‘attempt[ing] to prove unexpected results.’” Novoat *11 (text added).
Court Inquiry into Secondary Considerations NOT Shifting of Burden
“The mere fact that the court conducted this analysis [of secondary considerations] using terms such as “overcome” and “prima facie” does not necessarily imply that it shifted the burden of persuasion onto Novo.” Novo, at *12 (text added).
“[A]fter considering the prima facie evidence but “[b]efore reaching the ultimate conclusion on the issue of obviousness,” the court thoroughly evaluated all evidence of unexpected synergy and commercial success [see In re Cyclobenzaprine, 676 F.3d 1063 (Fed. Cir. 2012) describing an opposite outcome].” Id. at *13 (text added).
[1][b] Consideration of Synergistic Results
Standard of Review“On appeal from a bench trial on obviousness, we review de novo the court’s [sic] ultimate legal conclusion of whether a claimed invention would have been obvious, and review the underlying findings of fact for clear error.” Novo, at *14 (text added).
No Clear Error“(1) the closest prior art [to the repaglinide/metformin combination] was combination therapy using metformin and a sulfonylurea; (2) combination therapy using metformin and one of the sulfonylurea class of secretagogues was well known in the art to produce beneficial and even synergistic results in controlling glucose levels in Type II diabetes patients; [and] (3) repaglinide was known as an insulin secretagogue having a similar mechanism of action to the sulfonylurea class of secretagogues. […] We see no clear error in these findings. […] It is reasonable that an artisan seeking to combine a known insulin sensitizer (like metformin) with a new insulin secreta- gogue (like repaglinide) would base his expectations upon prior art sensitizer/secretagogue combinations.” Id. at *15.
[1][c] Deference to the Examiner’s Rejections
Novo's Position“[Novo] asserts that ‘it makes little sense for the district court to apply a deferential standard of review to PTO factual findings that are contradicted by the new evidence.’ Kappos v. Hyatt, 132 S. Ct. 1690, 1696 (2012) arguing], that [all of Caraco’s prior art was merely cumulative of what was already before the examiner] then the district court must defer to the findings of the examiner […] [concluding] that de novo fact-finding was not justified in this case.” Novo, at *18 (text added). 
Distinguishing Kappos v. HyattHyatt has no relevance here. Hyatt concerned 35 U.S.C. § 145, which provides for optional review in the Eastern District of Virginia of decisions from the PTO rejecting patent applications in the first instance. [...] The present case is a district court challenge to an issued patent brought under the Hatch-Waxman Act, not a challenge to a PTO rejection brought under § 145, and Hyatt is therefore irrelevant. […] [I]n cases such as this we do not review the PTO’s decision. […] Rather, we treat the issued patent as having a presumption of validity that must be overcome by clear and convincing evidence.” Novo, at *18 (text added).
[2] Patentee’s Omissions as “But for” Material
Non-material Omission“[T]he district court [analyzing under pre and post Therasense standards, due to the timing of the district court case and Therasense] found that Dr. Sturis had omitted material information from his Declaration […].” Novo, at *20 (text added). “[The omission] is nevertheless a non-material omission because it can ‘be rendered irrelevant in light of subsequent argument or explanation by the patentee.’” Novo, at *22 (text added).
Burdens under 103 Analysis
[a] “We therefore reject Novo’s contention that the district court misallocated the burden of persuasion, and decline to reverse on this basis.” Novo, at *14.
[b] “[…] Caraco proved by clear and convincing evidence that an artisan would have expected the level of synergy Novo found when it combined metformin and repaglinide. We therefore decline to reverse the district court’s obviousness determination on this basis.” Novo, at *17 (text added).
[c] “No decision […] has ever suggested that there is an added burden to overcome PTO findings in district court infringement proceedings […].” Novo, at *18, 19 (text added).
Inequitable Conduct“We reject the district court’s materiality finding as clearly erroneous, because we fail to see how Dr. Sturis’s omissions qualify as “but for” material.” Novo, at *21.
“NEWMAN, Circuit Judge, concurring in part [inequitable conduct], dissenting in part [obviousness].” Novo, Newman, C.J., Op. at *1.
Synergism in Prior Art Combinations is not Predictive“My colleagues reason that because synergism is unpredictable, then if it is found, it is obvious. […] That is not the meaning of ‘obvious to try.’ A new composition is ‘obvious to try’ when it is reasonable to expect that the trial will produce a predictable result.” Novo, Newman Op. at *2, 3. “The existence of synergy in some metformin-sulfonylurea combinations is not predictive of synergy in the combination of metformin with replaginide.” Id. at *3.
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