What’s the risk

One Technology Drive, Tolland, CT 06084-3900 USA | +1.860.872.7000 | info@nerac.com | www.nerac.com Eisai v. Dr. Reddy
The first application of the new KSR obviousness standard in a pharmaceutical
context

By Michael Fuller, J.D., Reg. Patent Atty.
Nerac Analyst

Patent practitioners anxiously awaited the Supreme Court’s ruling in KSR International Co.
v. Teleflex Inc. to see how the rules for determining the obviousness of a patent might
change. Having had time to digest that ruling, the next question was, how would the Court
of Appeals for the Federal Circuit apply the new KSR obviousness standard in distinct
contexts, such as pharmaceutical or chemical? In Eisai v. Dr. Reddy the appeals court considered an allegation of obviousness against an Eisai patent that Dr. Reddy wished to market—a little too early, perhaps—as a generic. The appeals court in Eisai also tackled another provocative topic for patent practitioners: inequitable conduct in the course of prosecuting a patent. Ultimately, the Federal Circuit affirmed the trial court’s decision for Eisai, allowing Eisai to delay the production of a
generic version of its patented drug a bit longer.
Background
Eisai owns U.S. Patent 5045552 (the ‘552 patent) on rabeprazole and its salts. Rabeprazole
is also known as Aciphex, Esai’s billion-dollar heartburn and ulcer drug. In anticipation of the ‘552 patent’s expiration in 2008, Dr. Reddy and Teva, two well-known generic manufacturers, filed what are known as ANDA’s, or Abbreviated New Drug Applications, in fall 2003. The applications, permissible under the Hatch-Waxman Act, would allow them to begin manufacturing rabeprazole in anticipation of the patent expiration date. Because U.S. patent law allows a patent holder to exclude others from making or using, i.e. infringing, what is described in the patent, an ANDA allows a generic manufacturer to engage in “artificial, but legally cognizable” patent infringement so it can begin selling its version as soon as the brand-name drug’s patent expires. When Eisai sued Dr. Reddy and others for patent infringement, Dr. Reddy and Teva both conceded that infringement had occurred; however, both defendants countered that the ‘552 patent was invalid due to Eisai’s inequitable conduct. Dr. Reddy acknowledged that the patent and its claims were valid, but Teva asserted at trial and on appeal that the ‘552 patent claims were invalid for reasons of obviousness. The trial court granted Eisai summary judgment, upholding first the validity of the patent (in October 2006) and then the enforceability of the patent (in May 2007). On appeal Dr. Reddy and Teva both questioned the enforceability of the patent.
Proving obviousness
Teva asserted that a combination of three prior art references rendered the ‘552 patent obvious and thus invalid: two patents on structurally related proton pump inhibitors (including the patent covering Prilosec, the first commercial proton pump inhibitor), and a technical article about substituted benzimidizoles (the general structural class to which these proton pump inhibitors belong). In determining obviousness, the appeals court focused on whether the facts supported a prima facie case of obviousness based on the Bio-Pharma Marketplace Review | October 2008
Eisai V. Dr. Reddy
“reasoned identification of a lead compound.” Teva argued that the compounds described or suggested by the three prior art references would have served as equally reasonable lead compounds for Eisai over rabeprazole based on supposed advantages in efficacy that the different structures provided, thereby proving the obviousness of the rabeprazole patent. In the appeals court’s estimation, Teva was unable to support its argument that these were obvious alternatives to rabeprazole. The KSR analysis of obviousness focused on whether “a design need or market pressure to solve a problem” along with a “finite number of predictable solutions” rendered an invention obvious. This design need does not need to be explicit in the art; rather, it can come from a variety of sources “in keeping with the flexible nature of the obviousness inquiry (post-KSR).” Because of the general unpredictability of the chemical arts, Teva needed to provide some reason for Eisai to modify lansoprazole by removing a fluorine substituent (essentially resulting in rabeprazole) that one reference suggested would improve its lipophilicity, thereby improving its bioavailability, a highly desirable trait for any drug. However, Teva was unable to provide for the record—even through its own expert witnesses—any reason why a skilled artisan would have made this modification.
Allegations of Inequitable Conduct
Both Dr. Reddy and Teva asserted that Eisai engaged in inequitable conduct during the prosecution of its ‘552 patent. They listed five separate incidents of supposed inequitable conduct ranging from concealment of relevant prior art to submitting a misleading disclosure to the examiner. Inequitable conduct requires two elements to be present: a false or misleading communication (or lack of communication) coupled with clear and convincing evidence of the applicant’s intent to deceive. Gross negligence, which comprises the first half of the inequitable disclosure analysis, is not enough to prove a charge as serious as inequitable conduct. Judge Randall Rader characterized the proving of intent to deceive or inequitable conduct as a high bar. Unfortunately for Dr. Reddy and Teva, they did not provide evidence of sufficient quality to reach this bar. While they were able to provide ample proof of various references and co-pending applications that would have been “prudent” to disclose (albeit probably not to the level of materiality), there was nothing in the record to suggest an intent to deceive.
Conclusion
While Eisai shed no light on what is required for proving inequitable disclosure (and was probably a last-ditch effort to invalidate the ‘552 patent in recognition of the unlikelihood of proving obviousness), it is useful to see how the appeals court will apply the KSR obviousness standards in a pharmaceutical context. With respect to chemical patents, the court will examine the differences in chemical structure between the claimed invention and the prior art (one of the Graham factors for obviousness). In the pharmaceutical context, the court will look for any motivation to take a lead compound and alter its structure to arrive at a new structure that is novel enough to be patented. This motivation can come from any number of prior art sources, and there need Bio-Pharma Marketplace Review | October 2008
Eisai V. Dr. Reddy
only be an “‘expectation’, in light of the totality of the prior art, that the new compound will have ‘similar properties’ to the old.” If this motivation to change a compound found in the prior art to the one described in a patent can be discerned, a case of obviousness can be readily made. If, as was the case in Eisai, the party asserting obviousness cannot provide a motivation for a particular structural change, the odds of invalidating the offending patent through obviousness will be much higher. Two additional, important lessons can be learned from Eisai: • Choose your expert witnesses wisely. In addressing the obviousness argument against Eisai’s patent, Teva’s expert refused to discuss the relevance of lansoprazole to the patentability of rabeprazole. Dr. Reddy’s expert stated, “I thought [lansoprazole] had nothing to do with this trial.” Both experts failed to offer evidence as skilled artisans as to why Eisai would have removed the fluorinated substituent from lansoprazole. If a good reason exists to decrease the lipophilicity of a compound, which can be an extremely advantageous feature for any drug, it would have gone a long way to supporting their claims of obviousness. • Think hard before accusing your opponent of inequitable disclosure. Given the quantity of documents associated with a patent application (and therefore the greater likelihood that one or more will be unintentionally forgotten), one would be better off looking for signs of deceptive intent first before sifting through the documents that arguably should have been submitted with the application in the first Copyright 2008 Nerac, Inc. All rights reserved.

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