Anacor Pharmaceuticals, Inc. v. Iancu (Fed. Cir. 2018)

by McDonnell Boehnen Hulbert & Berghoff LLP

On Monday, May 14, 2018, the Federal Circuit affirmed the determination by the U.S. Patent and Trademark Office's Patent Trial and Appeal Board in an inter partes review that claim 6 of U.S. Patent No. 7,582,621 is unpatentable for obviousness.  On appeal, Anacor Pharmaceuticals, Inc., the assignee of the '621 patent, challenged the Board's reasoning in finding claim 6 to be invalid.

The '621 patent is directed to the use of 1,3-dihydro-5-fluoro-1-hydroxy-2, 1-benzoxaborole, also known as tavaborole, as a topical treatment for fungal infections that develop under fingernails and toenails.  In particular, the '621 patent discloses that tavaborole can be used to treat a fungal infection known as onychomycosis, most frequently caused by dermatophytes (in approximately 90% of cases), which is a group of fungi that includes the genus Trichophyton and the species Trichophyton rubrum.  However, onychomycosis can also be caused by another fungus, a yeast known as Candida albicans (in 5% of cases).  The single claim at issue on appeal was claim 6, which depends from claim 4, which depends in turn from claim 1.  Claims 1, 4, and 6 recite:

1.  A method of treating an infection in an animal, said method comprising administering to the animal a therapeutically effective amount of 1,3-dihydro-5-fluoro-1-hydroxy-2,1-benzoxaborole, or a pharmaceutically acceptable salt thereof, sufficient to treat said infection.

4.  The method of claim 1, wherein said infection is onychomycosis.

6.  The method of claim 4, wherein said onychomycosis is tinea unguium.

Tinea unguium is onychomycosis caused by a dermatophyte.

In 2015, the Coalition for Affordable Drugs X LLC filed a petition requesting inter partes review of all twelve claims of the '621 patent, and the Board ultimately determined that the claims would have been obvious in light of the combination of International Application No. PCT/GB95/01206 ("Austin") and U.S. Application No. 10/077,521 ("Brehove").  Austin discloses: (a) the use of oxaboroles -- boron heterocycles that include a five-member ring containing three carbon atoms, one oxygen atom, and one boron atom -- as fungicides; and (b) that tavaborole, an oxaborole, has antifungal activity and is a highly effective agent for inhibiting a variety of fungi, including C. albicans.  Brehove discloses: (a) the use of boron heterocycles in a topical composition to treat onychomycosis; (b) that two dioxaborinanes -- boron heterocycles that include a six-member ring containing three carbon atoms, two oxygen atoms, and one boron atom -- were shown in in vitro testing to have powerful potency against C. albicans; and (c) in in vivo tests on five individuals with onychomycosis, the fungal infection was successfully treated by topical application of the two dioxaborinanes.

In its final written decision, the Board determined that Austin discloses that tavaborole is a known fungicide with particular potency against C. albicans, and that molecular weight was the most important factor in predicting whether a molecule would penetrate the nail plate.  In particular, the Board noted that of the seven tested compounds listed in Table 9 of Austin, tavaborole was the most effective against various fungi, including C. albicans, and of the nine compounds listed in Table 8 of Austin, tavaborole had the lowest molecular weight.  The Board also determined that Brehove disclosed the treatment of onychomycosis with boron heterocycles and that Brehove's compounds were effective against C. albicans.  The Board concluded that one of ordinary skill in the art would have used Austin's tavaborole in Brehove's topical treatment of onychomycosis with a reasonable expectation of success.  While acknowledging that "neither Austin nor Brehove expressly teaches whether the disclosed compounds exhibit any activity against dermatophytes" (with respect to claim 6), the Board determined that "the weight of the evidence favors Petitioner's argument" because the skilled artisan would have expected that tavaborole, which shares functional activity with the compounds of Brehove against C. albicans would also share functional activity against other fungi responsible for onychomycosis, namely dermatophytes.

On appeal, Anacor argued that: (1) the Board violated due process and the procedural requirements of the Administrative Procedure Act by failing to provide Anacor with adequate notice of, and an opportunity to respond to, the grounds of rejection ultimately adopted by the Board; (2) the Board improperly shifted the burden of proof by requiring the patent owner to disprove obviousness; and (3) the Board incorrectly concluded that the compounds of Austin are structurally similar to the compounds of Brehove.  In an opinion authored by Judge Bryson, and joined by Judge Reyna and Judge Stoll, the Federal Circuit rejected Anacor's challenges to the Board's reasoning and upheld the Board's conclusion that claim 6 of the '621 patent is invalid for obviousness.

With respect to Anacor's first argument, based on its assertion that the Petitioner shifted to a new theory of obviousness and that the Board adopted that new theory without giving Anacor proper notice or an opportunity to respond to it, the Federal Circuit rejected such assertion, finding instead that "the Board's final written decision was based on the same combination of references—Austin and Brehove—and the same series of inferences that the petition proposed."  In response to Anacor's related assertion that the Petitioner had impermissibly relied on new evidence, not included in the petition, to satisfy its burden of showing a prima facie case of obviousness, the Federal Circuit noted that:

There is . . . no blanket prohibition against the introduction of new evidence during an inter partes review proceeding.  In fact, "the introduction of new evidence in the course of the trial is to be expected in inter partes review trial proceedings and, as long as the opposing party is given notice of the evidence and an opportunity to respond to it, the introduction of such evidence is perfectly permissible under the APA" [citing Genzyme Therapeutic Prod. Ltd. P'ship v. Biomarin Pharm. Inc., 825 F.3d 1360, 1366 (Fed. Cir. 2016)].

Moreover, the Court also noted that of the three references (in addition to Austin and Brehove) cited by the Board in its final written decision, Anacor discussed two of the references in its patent owner's response and related submissions, one of Anacor's experts admitted to familiarity with the third reference (which related to two earlier installments by the same author that were cited in that expert's declaration), another Anacor expert was questioned about the third reference during his deposition, and Anacor discussed the third reference during the hearing before the Board.  The panel therefore concluded that "Anacor was not denied its procedural rights with respect to the theory of obviousness adopted by the Board or any evidence relied on by the Board."

With respect to Anacor's second argument that the Board improperly shifted the burden of proof by requiring the patent owner to disprove obviousness, Anacor contended that the record provided no basis to conclude that tavaborole's activity against dermatophytes would be expected.  The Federal Circuit, however, noted that:

In light of the fact that approximately 90 percent of all onychomycosis cases are attributable to dermatophytes, and in the absence of any evidence that patients with dermatophyte-based onychomycosis were excluded from the in vivo testing, it is highly likely that at least some of the five cases discussed by Brehove involved dermatophyte infections.

The panel therefore concluded that "substantial evidence supports the Board's findings that a person of ordinary skill in the art would have been motivated to combine the pertinent teachings of Austin and Brehove and would have had a reasonable expectation of success in doing so."

Finally, with respect to Anacor's third argument that the Board incorrectly concluded that the compounds of Austin are structurally similar to the compounds of Brehove, the Federal Circuit determined that "although there is only limited structural similarity between the compounds disclosed in Austin and Brehove, . . . in light of the combination of the structural and functional similarities between the compounds, substantial evidence supports the Board's findings."

Anacor Pharmaceuticals, Inc. v. Iancu (Fed. Cir. 2018)
Panel: Circuit Judges Reyna, Bryson, and Stoll
Opinion by Circuit Judge Bryson

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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