In Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc., the Federal Circuit reversed a decision by the U.S. District Court for the District of Delaware holding the claims of U.S. Patent No. 8,808,737 to be ineligible under 35 U.S.C. § 101.  In reversing the District Court, the Federal Circuit determined that the asserted claims of the '737 patent are legally indistinguishable from the claims at issue in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd.

The '737 patent, which is owned by Endo Pharmaceuticals Inc., relates to a method of using oxymorphone to treat pain in patients with impaired kidney function.  As the opinion notes, a patient's pain relief level can be impacted by the way the patient's body processes oxymorphone.  In patients with impaired kidney function (or renal impairment), waste products and drugs that are typically filtered by the kidneys can build up.  The inventor of the '737 patent studied the effect of renal impairment on the metabolism of oxymorphone and discovered that patients with moderately or severely impaired kidney function required less oxymorphone to achieve the same level of pain management achieved in patients without impaired kidney function.  Claim 1 of the '737 patent is representative (with emphasis in the opinion):

1.  A method of treating pain in a renally impaired patient, comprising the steps of:
    a.  providing a solid oral controlled release dosage form, comprising:
        i.  about 5 mg to about 80 mg of oxymorphone or a pharmaceutically acceptable salt thereof as the sole active ingredient; and
        ii.  a controlled release matrix;
    b.  measuring a creatinine clearance rate of the patient and determining it to be
        (a) less than about 30 m[L]/min,
        (b) about 30 mL/min to about 50 mL/min,
        (c) about 51 mL/min to about 80 mL/min, or
        (d) above about 80 mL/min; and
    c.  orally administering to said patient, in dependence on which creatinine clearance rate is found, a lower dosage of the dosage form to provide pain relief;
    wherein after said administration to said patient, the average AUC of oxymorphone over a 12-hour period is less than about 21 ng•hr/mL.

Endo and Mallinckrodt LLC filed suit against Actavis LLC, Actavis South Atlantic LLC, Actavis Pharma, Inc., Actavis Elizabeth LLC, Actavis Holdco U.S., Inc. ("Actavis") and Teva Pharmaceuticals USA, Inc. and Barr Laboratories, Inc. ("Teva") for infringement of claims 1-6 of the '737 patent.  Actavis moved to dismiss Endo's patent infringement claims, arguing that the asserted claims were patent ineligible under § 101.  The Magistrate Judge issued a Report and Recommendation, recommending that the District Court grant Actavis' motion.

In that Report, the Magistrate applied the two-step analysis set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), and reiterated in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014).  With respect to step 1 of the Alice/Mayo test, the Magistrate determined that the claims are directed to the natural law that the bioavailability of oxymorphone is increased in people with severe renal impairment.  With respect to step 2, the Magistrate determined that claim 1 consists of three steps: (1) a "providing" step; (2) a "measuring/determining" step; (3) and an "administering" step.  The Magistrate concluded that the "providing" step is similar to the administering step in Mayo because it "merely identifies the specific drug for administration"; the "measuring/determining" step, as in Mayo, "just directs one to use a well-known method to measure creatinine levels to obtain the necessary information to apply a law of nature"; and the "administering step" is indistinguishable from Mayo because it "simply limits the relevant audience to patients and prescribing physicians, who treat chronic or acute pain with oxymorphone," by "merely instruct[ing] physicians to dispense oxymorphone for the treatment of pain in a well-know[n] manner, while utilizing the natural law to manage the dosage."  The Magistrate concluded that the patent was not directed to a patent-eligible application of a natural law.  Following the Magistrate's recommendation, the District Court granted Defendants' motion to dismiss.  Endo appealed the District Court's decision holding the claims of the '737 patent to be patent ineligible.

The Federal Circuit began by noting that while the Supreme Court has established a two-step framework to determine subject matter eligibility under § 101, "[i]f the claims are not directed to a patent-ineligible concept at step one, [the Court] need not address step two of the inquiry," citing Enfish, LLC v. Microsoft Corp.  The Court determined that this was the case here, explaining that the Court's analysis accordingly "focuse[d] solely on step one."  Citing Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., the opinion notes that "at step one, 'it is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is 'directed to.''"  And in the instant case, the Court concluded that the asserted claims are not directed to patent-ineligible subject matter, but rather "are directed to a patent-eligible method of using oxymorphone or a pharmaceutically acceptable salt thereof to treat pain in a renally impaired patient."

As in the Federal Circuit's recent decision in Natural Alternatives International, Inc. v. Creative Compounds, LLC, the Endo Court noted that the Federal Circuit held similar claims to be patent-eligible in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., explaining that:

The claims at issue here are legally indistinguishable from the representative claim in Vanda.  Both claims recite a method for treating a patient.  The Vanda patent claims recite the steps of carrying out a dosage regimen based on the results of genetic testing.  . . .  Here, the claims similarly recite the steps of carrying out a dosage regimen, though the steps are based on the results of kidney function testing.  Additionally, the claims in both cases require specific treatment steps.  . . .  [And therefore, l]ike the claims in Vanda, the claims here "are directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome."  See Vanda, 887 F.3d at 1136.

The panel also noted that "like the claims in Vanda, the claims here differ from those in Mayo in material respects," pointing out that "[a]lthough the representative claim in Mayo recited administering a thiopurine drug to a patient, the claim as a whole was not directed to the application of a drug to treat a particular disease."  (In a footnote, the Court also acknowledged that when the District Court held the asserted claims of the '737 patent to be ineligible, it did not have the benefit of considering the Federal Circuit's decisions in Vanda or Natural Alternatives).

The panel next turned to Actavis' arguments that the Endo claims were similar to those at issue in Mayo and could be distinguished from the claims found to be patent eligible in Vanda.  With respect to Actavis' argument that unlike the claims in Vanda, the method steps in the Endo claims offer no "practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself," the Court disagreed, stating that "the '737 patent claims are very similar to those in Vanda and any differences in specificity are not of a sufficient degree to convince us to conclude that the claims here should be ineligible as compared to the claims in Vanda."  As for Actavis' argument that unlike the Vanda claims, the Endo claims do not require that a biological sample be obtained or assayed in any particular way to determine a patient's creatinine-clearance rate, the Court declared that "this is a distinction without a difference," since "[t]he court in Vanda reasoned that the claim was directed to 'specific patients,' without explicitly emphasizing the precise methods used to identify those specific patients."  The Court also disagreed with Actavis' argument that unlike the Vanda claims, the Endo claims "do not specify an amount or frequency of oxymorphone to be administered after patients are categorized by creatinine-clearance rate," noting that "the combination of the administering step and wherein clause claim language, taken together, . . . make the claims-at-issue as specific as those in Vanda such that the patent claims do not 'tie up the doctor’s subsequent treatment decision,'" citing Vanda, 887 F.3d at 1135 (quoting Mayo, 566 U.S. at 86).  The Court therefore concluded that:

[T]he '737 patent claims are like those in Vanda.  They are eligible because they are "directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome."  . . .  Our precedent leaves no room for a different outcome.

The opinion found further support for its decision in Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., stating that:

We explained that "[t]he end result of the . . . claims is not simply an observation or detection of the ability of hepatocytes to survive multiple freeze-thaw cycles.  Rather, the claims [were] directed to a new and useful method of preserving hepatocyte cells."  We further emphasized that "the natural ability of the subject matter to undergo the process does not make the claim 'directed to' that natural ability."  Otherwise, claims directed to actually "treating cancer with chemotherapy" or "treating headaches with aspirin" would be patent ineligible.  Just like the claims in CellzDirect, the result of the claims here is not simply an observation or detection [citations omitted].

The Court concludes  the opinion by noting that neither Ariosa Diagnostics, Inc. v. Sequenom, Inc. nor Athena Diagnostics, Inc. v. Mayo Collaborative Servs., compel a different outcome, pointing out that "the claims here are directed to a treatment method, not a detection method," and adding that "[t]he '737 patent does not 'start[] and end[] with a naturally occurring phenomenon.'"  Thus, the Court determined that the '737 patent claims are not directed to patent-ineligible subject matter, and therefore reversed the District Court's decision finding the claims to be patent-ineligible.

Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2019)
Panel:  Circuit Judges Wallach, Clevenger, and Stoll
Opinion by Circuit Judge Stoll