Enactment of the Leahy-Smith America Invents Act in 2011 focused the patenting community on the changes of U.S. patent law from "first to invent" under the 1952 Patent Act to "first inventor to file" under the AIA as the basis for deciding priority and defining the scope of prior art to a claimed invention. Nevertheless, the provisions of the 1952 Act remain in force for any application filed prior to March 16, 2013, and the Federal Circuit's recent decision in Dey, L.P. v. Sunovion Pharmaceuticals, Inc., illustrates that there remain issues in the "old" law that will continue to be explicated and addressed.
The issue in the Dey case is the patentability bar under 35 U.S.C. § 102(b) that arises from "public use" of an invention more than one year prior to an applicant's filing date. The circumstances surrounding the assertion of invalidity under this provision of the statute were somewhat unusual, as recognized by the Court: typically it is the accused infringer who asserts a patentee's own prior public use as invalidating, but here defendant Sunovion asserted its own prior clinical trial as a public use of Dey's claimed invention. Specifically, both Sunovion and Dey developed pharmaceutical formulations of a known drug, formoterol, as a nebulized formulation for treating chronic obstructive pulmonary disorders (COPS) such as emphysema. Both companies owned patents on their formulations: No. 6,040,344 to Sunovion (filed in 1998 and issued in March 2000); and Nos. 7,348,362; 7,462,645; 7,465,756; 7,473,710; and 7,541,385 to Dey (all claiming priority to July 10, 2003). Sunovion was the first to market in 2007 with its Brovana product, after what the Court terms a "long" path to obtaining regulatory approval. Sunovion's clinical trials began in 1998, and of interest in the decision is a particular Phase III clinical trial, Study 50, that began in February 2002, wherein one of the formulations tested was identical to the Brovana formulation.
Just prior to launch, Dey sued Sunovion for infringement of its patents, and Sunovion filed a motion for summary judgment, based on its own clinical trials. Under Sunovion's legal theory, the Phase III clinical trial identified as Study 50 included a formulation (given to 124 clinical trial participants) that was within the scope of Dey's patent claims and the conditions of the clinical trial constituted a prior public use that occurred more than one year before Dey's earliest filing date of July 10, 2003. The conditions Sunovion cited in support of the prior art status of its clinical trial were:
• Patients were told that they were being given a formulation of formoterol
• Patients enrolled in the trial were told they could (and indeed should) inform their personal physicians about the trial
• Patients enrolled in the study were under no conditions of confidentiality
• At least some of the vials ("a fraction of one percent") of the formulated drug were unaccounted for during and after the clinical trial
The District Court granted summary judgment against Dey, finding that Sunovion had established by clear and convincing evidence that the asserted claims of Dey's patents in suit were invalid as being anticipated under the "public use" prong of § 102(b).
The Federal Circuit reversed, in an opinion by Judge Bryson, joined by Judge O'Malley over a dissent by Judge Newman. The panel noted that the purpose of the bar was to "discourage[e] the removal, from the public domain, of inventions that the public reasonably has come to believe are freely available," citing Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192, 1198 (Fed. Cir. 1994). The test for deciding whether a prior use was a "public use" under the statute has two elements: "'whether the purported use: (1) was accessible to the public; or (2) was commercially exploited,'" citing Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380 (Fed. Cir. 2005). Factual issues to be considered when determining whether a prior use constitutes a "public use" include "'the nature of the activity that occurred in public; the public access to and knowledge of the public use; [and] whether there was any confidentiality obligation imposed on persons who observed the use'" according to the opinion, citing Bernhardt, L.L.C. v. Collezione Europa USA, Inc., 386 F.3d 1371, 1379 (Fed. Cir. 2004). In the absence of commercial exploitation a confidentiality agreement could "negate" the status of a prior use as a public use. Invitrogen at 1382.
The status of a prior use as a public use is not dependent on the public use being an applicant's use; activities of third parties (such as Sunovion here) can constitute an invalidating prior public use. Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1334 (Fed. Cir. 2005). But such a third party use must be a public not a private use (i.e., the fact that there was a prior use by another does not by itself constitute a public use) according to the Court, citing Woodland Trust v. Flower- tree Nursery, Inc., 148 F.3d 1368, 1371 (Fed. Cir. 1998), and W.L. Gore & Assocs. v. Gar- lock, Inc., 721 F.2d 1540, 1549-50 (Fed. Cir. 1983). The opinion notes that, as with all question under § 102 this is a question of fact depending on the circumstances, such as a situation where there is no confidentiality agreement: there, "the skill and knowledge of those observing an invention can shed light on the degree to which it was kept confidential" and even "limited disclosure" may suffice if it is to "those who are skilled enough to know, understand, and 'easily demonstrate the invention to others,'" citing Netscape Commc'ns Corp. v. Konrad, 295 F.3d 1315, 1321 (Fed. Cir. 2002).
The Federal Circuit reversed the District Court's summary judgment because it found disputed issues of material fact that made summary judgment inappropriate. However the majority opinion went on to set forth the considerations important for making the determination and the places where in the majority's opinion the District Court went astray. The majority identified two issues important to the District Court's decision that warranted comment. The first was the lower court's determination that the use of the particular "infringing" formulation during the clinical trial was "open and free," a determination with which the Court disagreed. The basis for this disagreement revolved around the incapacity of the clinical trial participants to "reverse engineer" the formoterol formulation even knowing the identity of the drug. In addition, the panel majority disagreed that the study participants were provided with a "personal supply" of the formulations that they could use "however they saw fit" and that provided them with an "unfettered use of the composition for weeks at a time." The panel agreed with Dey that the use by the study participants was anything but "unfettered," citing the restrictions contained in agreements between the clinical trial administrators and participants, including requirements that the participants be the only individuals taking the medication and that they keep "accurate usage logs"; the Court also noted that despite the extremely low level of the formulation that was unaccounted for the participants and administrators in the trials were required to return all unused portions of the drug and to account for all administered and inventory supplies of the formulated drug. Specifically the opinion states:
The fact that a tiny fraction of the thousands of vials were lost without penalizing the responsible test subject(s), or that the practicalities of the study required self-administration at home rather than physician administration in a closed facility, does not preclude a reasonable jury from concluding that the use of Batch 3501A was sufficiently controlled and restricted, rather than unfettered and public.
The majority also disagreed that the details of the clinical trial were not required to be kept confidential by trial participants. The issue for the Court was what information was kept confidential and here the panel noted that "the particulars of its invention -- embodied in the formulation and stability characteristics of Batch 3501A -- were kept sufficiently confidential to avoid a finding of 'public use.'" Also important for the panel's decision were the confidentiality obligations imposed on the clinical investigators (clearly more knowledgeable than the patients), who were required to sign confidentiality agreements. The panel majority found that the individuals most likely to have sufficient disclosure for the clinical trial to be a public use were under an obligation not to disclose (thereby negating the clinical trial as a public use as to those individuals), and that the individuals (the patients) not under any confidentiality obligations had insufficient information to constitute prior disclosure of the invention.
The panel majority noted that the circumstances surrounding the clinical trial were common and that prior precedent "routinely rejected the argument that such an arrangement necessarily strips the trial of confidentiality protection or renders it accessible to the public," citing Bayer Schering Pharma AG v. Barr Labs., Inc., No. 05- CV-2308 (PGS), 2008 WL 628592, at *11-12, *38-42 (D.N.J. Mar. 3, 2008); Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 364 F. Supp. 2d 820, 873-75, 912-13 (S.D. Ind. 2005), aff'd, 471 F.3d 1369, 1380-81 (Fed. Cir. 2006); Janssen Pharmaceutica N.V. v. Eon Labs Mfg., Inc., 374 F. Supp. 2d 263, 276 (E.D.N.Y. 2004), aff'd, 134 F. App'x 425, 430-31 (Fed. Cir. 2005); and In re Omeprazole Patent Litig., 490 F. Supp. 2d 381, 508 (S.D.N.Y. 2007), aff'd on other grounds, 536 F.3d 1361 (Fed. Cir. 2008). Circumstances in common in such cases and the case at bar noted by the Court is that study participants were informed as to the identity of the administered drug, that such patients were entrusted to administer doses themselves not under the control or supervision of a study administrator or doctor and that these prior participants were permitted to discuss the trial with their personal physicians.
Finally, the panel majority identified several other "misconceptions" underlying the District Court's decision. These included that lack of any confidentiality obligations to Dey by Sunovion's clinical trial participants, which the panel recognized would require any third party prior use (even a secret use) to be a patent-invalidating public use. And the panel rejected Sunovion's attempt, in their view, to stretch precedent related to "experimental use," such as New Railhead Mfg., L.L.C. v. Vermeer Mfg. Co., 298 F.3d 1290, 1299 (Fed. Cir. 2002), and City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 136 (1877), to apply in this situation. In those cases the invention was "public" but was not appreciated by the public under circumstances where the use was necessary to demonstrate reduction to practice of the invention ("During experimentation, the public might have knowledge of an invention (because they see it), but may not be using the invention within the meaning of the statute (because the inventor is experimenting)"). Accordingly, the Court remanded the case to the District Court for reconsideration on the merits.
Judge Newman's dissent was not based on her disagreement with the outcome but rather because she would prefer the Court remand with instructions to deny the motion on the grounds that the Sunovion clinical trials did not constitute a "public use"). "No sound reason appears for remanding for findings or trial, when the matter is readily resolved on undisputed facts. Nor is there any reason for casting judicial doubt on the standard confidentiality procedures of clinical trials, at this late date of decades of established practice in Judge Newman's view.
Dey, L.P. v. Sunovion Pharmaceuticals, Inc. (Fed. Cir. 2013)
Panel: Circuit Judges Newman, Bryson, and O'Malley
Opinion by Circuit Judge Bryson; dissenting opinion by Circuit Judge Newman
