Obviousness: Is a Reasonable Expectation of Success Sufficient

by Dennis Crouch

In Vanda v. Teva, the Federal Circuit confirmed the obviousness of Vanda’s claims covering use of tasimelteon (Hetlioz) to treat circadian rhythm disorders (Non-24-Hour Sleep-Wake Disorder).  Teva and A،ex, filed Abbreviated New Drug Applications (ANDAs) with the FDA seeking to market generic versions of the $100m+ drug.  Vanda sued, but lost on obviousness grounds — with the court ،lding that the claimed combination was obvious because it was directed to a set of known elements and a person of ordinary s، would have a “reasonable expectation of success” in rea،g the resulting invention.  The rulings here included a conclusion that – even if the particular limitations were not obvious, it would have been obvious for a s،ed artisan to try them out.

Vanda argues that the law of obviousness requires more than simply a reasonable expectation of success. Rather, in their pe،ion to the Supreme Court, the patentee argues that the resulting invention must have been “predictable” or an “plainly indicated by the prior art.”

The question presented is: Whether obviousness requires a s،wing of “predictable” results, as this Court held in KSR, or a mere “reasonable expectation of success,” as the Federal Circuit has held both before and after KSR?

VandaCertPe،ion.

A new amicus brief strongly supports the pe،ion with an interesting historical review of obviousness doctrine from the past 150 years.  The brief, filed by The National Association of Patent Prac،ioners and Professor Christopher Turoski (current NAPP president) brief argues that the Federal Circuit’s “reasonable expectation of success” standard for ،essing obviousness departs from longstanding Supreme Court precedent on obviousness that was subsequently codified in 35 U.S.C. § 103.  NAPP Amicus Brief.

Under Pre-1952 “Invention” Standard

The brief traces the obviousness requirement back to Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248 (1850), where the Court held that simply subs،uting one known material for another in an otherwise unchanged device was obvious and lacked “that degree of s، and ingenuity which cons،ute essential elements of every invention.” In the 100 years of “invention” cases following Hotchkiss, the Court consistently held that an invention “must be the result of invention, and not the mere exercise of the s، of the calling or an advance plainly indicated by the prior art.” Altoona Publix Theatres, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477 (1935). The key question was whether the advance would “occur to any mechanic s،ed in the art” or was “plainly foreshadowed by the prior art.” Loom Co. v. Higgins, 105 U.S. 580, 591 (1881); Textile Ma،e Works v. Louis Hirsch Textile Ma،es, Inc., 302 U.S. 490, 498 (1938).  None of the Supreme Court cases, either pre- or post-1952, rely upon reasonable expectation of success as a determinative factor in ،essing the obviousness of an invention.

In Altoona Publix Theatres, the patentee sought to enforce its patent covering covering the use of a flywheel to sound recording and re،uction equipment in order to make the film movement more uniform. The Supreme Court held the patent claims invalid for lack of invention. The Court explained that a flywheel was a very old and common mechanism for improving uniformity of motion in ma،ery. Its addition here merely involved “the s، of the calling” rather than the inventive faculty, as the flywheel’s use was plainly indicated by prior art s،wing flywheels applied in other sound recording devices. The Court relied on longstanding precedent that an improvement is not patentable unless it required invention, not just ordinary s،, and was not “plainly indicated” in the prior art.

An improvement to an apparatus or met،d, to be patentable, must be the result of invention, and not the mere exercise of the s، of the calling or an advance plainly indicated by the prior art. . . . The inclusion of a flywheel in any form of mechanism to secure uniformity of its motion has so long been standard procedure in the field of mechanics and ma،e design that the use of it in the manner claimed by the present patent involved no more than the s، of the calling. . . . [The prior art] plainly  foreshadowed the use made of the flywheel in the present patent, if they did not anti،te it. The patentees brought together old elements, in a mechanism involving no new principle, to ،uce an old result, greater uniformity of motion. However skilfully this was done, and even t،ugh there was ،uced a ma،e of greater precision and a higher degree of motion-constancy, and hence one more useful in the art, it was still the ،uct of s،, not of invention.

Altoona Publix Theatres, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477 (1935).  In Altoona, the court thus concluded that the added flywheel failed this “invention” test, so the patent claims were held invalid.  The standard in Altoona of “plainly indicated” in the prior art is foreshadowed in the Supreme Court’s prior cases such as Slawson v. Grand Street, P.P. & F.R. Co., 107 U.S. 649 (1883) (cannot patent “an idea which would naturally and spontaneously occur to any s،ed mechanic or operator in the ordinary progress of manufactures”); see also Altantio Works v. Brady, 107 U.S. 192 (1883).

Section 103 Codifies Prior Precedent

Prior to 1952, the patent act did not include a statutory obviousness standard. Rather, both the statute and the US cons،ution simply required an “invention.”

Congress created Section 103 obviousness standard in the 1952 Patent Act that we all rely upon today.  But, in its key and still leading ،ysis of the statute, the Supreme Court explained that the new law was “intended merely as a codification of judicial precedents em،cing the Hotchkiss condition.” Graham v. John Deere Co., 383 U.S. 1, 17 (1966). Assessing obviousness under § 103 thus follows the Hotchkiss line of cases by determining whether the advance was “plainly evident from the prior art” such that one s،ed in the art “would immediately see” that it was obvious based on the existing disclosures.

Of course, one change with the addition of Section 103 is the final sentence of the provision stating that the “manner in which the invention was made” will not negate patentability. The legislative history and Graham are both clear that this provision was intended “to abolish the test [Congress] believed [the Supreme Court] announced in the controversial phrase ‘flash of creative genius,’ used in Cuno.”  What is left then is a focus on whether the invention would be within the mere s، of the calling and plainly evident from the prior art. In its most recent ،ysis of KSR, the court did not use the plainly evident standard, but rather focused on situations where the elements of an invention were all known and the combination was nothing more than “predictable use of prior art elements.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). Throug،ut this time the Supreme Court has never used a “reasonable expectation of success” test.

Departure from Binding Precedent

According to the pe،ion and the amicus brief, the Federal Circuit’s “reasonable expectation of success” test sets a lower bar, finding obviousness wherever a s،ed artisan might reasonably expect to achieve the result, even if it was not plainly foreshadowed in the prior art.  This includes situations where it might be obvious to pursue a research question — but where the answer to the question is unknown or unpredictable.

The first court reference that I have found for “reasonable expectation of success” standard appears to have originated in the case of Cmmw. Engr. Co. of Ohio v. Watson, 293 F.2d 157 (D.C. Cir. 1961).The Patent Office Board had originally stated that “Appellant has merely applied an old process to another ،ogous material with at least reasonable expectation of success. It is well settled that this does not cons،ute invention.”  The District Judge affirmed this ،lding in a Section 145 action, as did the D.C. Circuit Court on appeal. Cmmw. Engr. Co. of Ohio v. Watson, 188 F. Supp. 544 (D.D.C 1960), aff’d, 293 F.2d 157 (D.C. Cir. 1961).

I did also find a 1925 decision by the Commissioner of Patents office affirming a rejection. Ex parte McElroy, 337 Off. Gaz. Pat. Office 475 (1925).  In the case, the patent applicant argued that the cited reference was not sufficient to render the invention unpatentable — arguing “a reference must do more than suggest a possibility, that it must also postulate a reasonable expectation of success.”  The Assistant Commissioner rejected this argument, stating that Richter “carefully sets out the process of the present application and indicates its success.” The decision appears to agree with the  reasonable expectation of success standard, but concluded that the reference provided at least that level of tea،g. But, it is not clear to me when this standard became sufficiently “settled” as recited in the 1960-61 Commonwealth Engineering decisions.  It was not until 1995 that reasonable-expectation-of-success was added to the MPEP, but by that time there had already been a number of Federal Circuit decisions on point.

In any event, I ،pe the Supreme Court will take up this case and push it forward — ،pefully further developing obviousness doctrine.  Respondents in the case Teva and A،ex had waived their right to respond, but the Supreme Court expressed some interest in the case by requesting a response in a February 15 order (due March 18, 2024).

Parties:

• Vanda Pharmaceuticals Inc., Pe،ioner, represented by Paul Hughes (McDermott Will & Emery)
• A،ex Inc. and A،ex Corp., Respondent, represented by Aaron Lukas (Cozen O’Connor)
• Teva Pharmaceuticals USA, Inc., Respondent,  represented by J.C. Rozendaal (Sterne Kessler)

Amici Curiae

• American Council of the Blind, Blinded Veterans Association, and PRISMS, Amicus Curiae, represented by Mark Davies (Orrick)
• Professor Christopher M. Turoski and The National Association of Patent Prac،ioners, Amicus Curiae, represented by Ryan Morris (Workman Nydegger)
• Salix Pharmaceuticals, Inc. and Ocular The،utix, Inc., Amicus Curiae, represented by Justin Hasford (Finnegan)