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Federal Circuit Looks for a Different Kind of Unexpected Results in BMS v. Teva




by:
Courtenay C. Brinckerhoff
Foley & Lardner LLP - Washington Office

 
July 9, 2014

Previously published on July 2, 2014

In Bristol-Myers Squibb Co. v. Teva Pharmaceuticals USA, Inc., the Federal Circuit affirmed the district court’s finding that BMS’s Baraclude® patent is invalid as obvious. In so doing, the court gave little weight to unexpected results characterized as reflecting a difference in “degree” rather than a difference in “kind.” This decision joins other recent Federal Circuit decisions that have found unexpected results to be not unexpected enough to prevail against a strong showing of prima facie obviousness.

The Patent at Issue

The patent at issue was BMS’s U.S. 5,206,244. The Federal Circuit decision focuses on claim 8, which recites the following compound:

[1S-(1a,3 a,4ß)]-2-amino-1,9-dihydro-9-[4-hydroxy-3-(hydroxymethyl)-2-methylene-cyclopentyl]-6H-purin-6-one.

The ANDA Litigation

BMS markets the claimed compound as the hepatitis B drug Baraclude® (entecavir) for the treatment of hepatitis B. Teva filed an Abbreviated New Drug Application (ANDA) seeking to market a generic version of entecavir. In the ensuing Hatch-Waxman litigation, Teva asserted that the ‘244 patent was invalid as obvious and unenforceable due to inequitable conduct.

After a bench trial, the district court found that the patent was invalid as obvious. The court conducted a “lead compound” analysis, determined that 2’-CDG was a lead compound for the development of antiviral drugs at the filing date of the ‘244 patent, and found that the modification required to arrive at entecavir would have been obvious. Although the court found that BMS had presented objective evidence of nonobviousness (commercial success, long-felt need, and unexpected results), it “ultimately concluded that Teva proved by clear and convincing evidence that claim 8 would have been obvious.”

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Chen and joined by Chief Judge Prost and Judge Plager.

Much of the Federal Circuit opinion focuses on the “lead compound” analysis. Because that analysis is so fact-specific, I will not review it here. The section of the Federal Circuit decision that I find more interesting—and more troubling—is its treatment of BMS’s evidence of unexpected results. In particular, the opinion seems to set a high hurdle for establishing nonobviousness based on unexpected results unless the kind of results were unexpected.

The Federal Circuit transitions to this issue with this paragraph:

BMS also argues that a new chemical entity, as a matter of law, cannot be obvious when the claimed invention possesses unexpected properties... We have already rejected this argument en banc in [In re Dillon, 919 F.2d 688 (Fed. Cir. 1990)], explaining that an unexpected result or property does not by itself support a finding of nonobviousness.

The Federal Circuit cites Dillon for the principle that “additional unexpected properties ... [do] not [necessarily] upset an already established motivation to modify a prior art compound based on the expected properties of the resulting compound.” The Federal Circuit explains:

Unexpected properties ... do not necessarily guarantee that a new compound is nonobvious. While a “marked superiority” in an expected property may be enough in some circumstances to render a compound patentable, a “mere difference in degree” is insufficient... And “differences in degree” of a known and expected property are not as persuasive in rebutting obviousness as differences in “kind”—i.e., a new property dissimilar to the known property. When assessing unexpected properties, therefore, we must evaluate the significance and “kind” of expected results along with the unexpected results...

The Federal Circuit considered the three kinds of unexpected results cited by BMS, “(1) high potency against hepatitis B, (2) a larger than expected therapeutic window, and (3) a high genetic barrier to resistance,” and determined that record supported the district court’s finding that the first two properties were “not entirely unexpected” based on what already was known about 2’-CDG. The Federal Circuit did not disturb the district court’s finding that the third kind of result was unexpected, such that there was “some support to BMS’s argument as to nonobviousness.” Still, the Federal Circuit did not disturb the district court’s ultimate finding of obviousness:

We agree with the factual findings on secondary considerations and find no clear error. As stated previously, we also agree with the district court’s finding that the record demonstrates strong evidence of obviousness. After considering all of the findings for and against obviousness, as well as Teva’s burden of proof, we see no basis to disturb the district court’s ultimate legal conclusion, and we affirm the judgment that claim 8 of the ’244 patent is invalid as obvious.

A Different Kind of Unexpected Results?

The principle that results that are different in kind from those of the prior art are more “unexpected” than results that are different in degree is not new, but this decision still concerns me because entecavir was found to exhibit an unexpected property, as well as exhibiting greater anti-viral activity and having a broad therapeutic window. As a patent attorney and potential patient, I am concerned that too many new drugs will be found obvious in hindsight, eventually discouraging the tremendous investment required to discover and develop improved therapies.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Courtenay C. Brinckerhoff
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Intellectual Property
 
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