Otonomy, Inc. v. Auris Medical, AG (Fed. Cir. 2018)

by McDonnell Boehnen Hulbert & Berghoff LLP

Last week, in Otonomy, Inc. v. Auris Medical, AG, the Federal Circuit reversed the decision by the U.S. Patent and Trademark Office's Patent Trial and Appeal Board according to Auris Medical, AG the benefit of priority to its earlier-filed International application.  The Federal Circuit also affirmed the Board's determination that certain claims of Otonomy Inc.'s application are not anticipated by the publication of Auris Medical's International application.

The dispute between the parties concerns an interference between Auris Medical's U.S. Patent No. 9,066,865 ("the '865 patent") and Otonomy's U.S. Patent Application No. 13/848,636 ("the '636 application").  The '865 patent issued to Auris on June 30, 2015 from U.S. Patent Application 14/317,319 ("the '319 application"), which was filed on June 27, 2014; the '319 application is a continuation of U.S. Patent Application No. 11/992,632 ("the '632 application"), which is a national stage application of International Application No. PCT/EP2005/010478 ("the '478 PCT"), which was filed on September 28, 2005, and which was published as International Publication No. WO 2007/038949 ("the WO '949") on April 12, 2007.  On the same day that Auris filed the '319 application, it also filed a preliminary amendment adding claims directed to therapeutic compositions containing various claimed active ingredients, including fluoroquinolones, for use in the claimed methods.  Otonomy's '636 application was filed on March 21, 2013.

The commonly claimed invention involved in the interference is a method of using a suspended-fluoroquinolone composition to treat middle and inner ear disorders.  The Board designated claim 1 of the '865 patent as the sole count of the interference, indicating that all nine of the claims of the '865 patent and claims 38, 43, and 46-50 of the '636 application correspond to the count.  Claim 1 of the '865 patent recites:

1.  A method of treating a middle or inner ear disease comprising intratympanically administering to a patient in need thereof a controlled release composition comprising a pharmaceutically active agent and a thermosetting polymer; wherein the pharmaceutically active agent is selected from antibiotics and is suspended in the composition, and the thermosetting polymer has a gelation temperature of at least about 15° C.,
    wherein the thermosetting polymer is poloxamer 407 and is present at a concentration of about 20% (w/w), and
    wherein the antibiotic is fluoroquinolone.

In the interference, the Board authorized the following motions:

• Auris Motion 1: requesting that the Board accord benefit to the '632 application and the '478 PCT;
• Auris Motion 2: seeking judgment that Otonomy's involved claims are anticipated under 35 U.S.C. § 102(b) by the WO '949;
• Otonomy Motions 1 and 2: seeking judgment that the claims of the '865 patent are unpatentable based on the written description and enablement requirements of 35 U.S.C. § 112; and
• Otonomy Motion 6: requesting that the Board accord benefit to a chain of previously filed applications and provisional applications.

In its decision on these motions, the Board denied Auris Motion 2, finding that there "is no discernable single embodiment which teaches all of the claim elements as arranged," and explaining that there was "too much picking and choosing among embodiments for one of ordinary skill in the art to envision the claimed invention."  With respect to Otonomy Motions 1 and 2, the Board denied Otonomy's written description challenge to the claims of the '865 patent (Motion 1), relying on the preliminary amendment Auris filed with the '319 application to provide the necessary disclosure, and determined that only claim 9 of the '865 patent was enabled (Motion 2).  The Board granted Auris Motion 1, according the '319 application the benefit of the '632 application and the '478 PCT.  Finally, with respect to Otonomy Motion 6, the Board found that the '636 application is entitled to the benefit of its parent nonprovisional applications, and therefore had an effective filing date of May 14, 2009.  As a result of its decisions on the above motions, the Board accorded Auris the benefit of a filing date (September 28, 2005 of the '478 PCT) before Otonomy's earliest alleged priority date (May 14, 2009), and therefore entered judgment against Otonomy on count 1.

On appeal, Otonomy argued that the Board erred in denying Otonomy Motion 1, and in particular, that the Board erred by relying on a theory neither party advanced -- "that the ['319] application supported the present claims on the basis of the preliminary amendment (rather than the body of the specification itself)."  In the alternative, Otonomy sought reversal of the Board's decision on claim 9 of the '865 patent, arguing that the Board erred in granting Auris Motion 1 and in according benefit to Auris Medical.  The Board agreed with Otonomy's alternative argument, reversing the Board's decision on Auris Motion 1, and concluding that the '319 application was not entitled to the benefit of the '478 PCT.

The Federal Circuit began by noting that accorded benefit is defined in 37 C.F.R. § 41.201 as "Board recognition that a patent application provides a proper constructive reduction to practice under 35 U.S.C. § 102(g)(1)," and citing Hunt v. Treppschuh, 523 F.2d 1386, 1389 (CCPA 1975), for the proposition that "[t]o establish a constructive reduction to practice and thereby the right to benefit of an earlier-filed application for priority purposes, the movant need only show that the earlier-filed application discloses a single embodiment within the scope of the interference count that complies with 35 U.S.C. § 112."  In arguing that the '478 PCT demonstrated that Auris Medical possessed at least a single embodiment within the scope of the interference count, Auris specifically pointed to Example 2 of the '478 PCT, which includes 20% poloxamer 407 and ketamine, and a separate teaching in the '478 PCT that an antibiotic such as fluoroquinolone could be used as an additional ingredient.  Otonomy countered that the '478 PCT did not teach that fluoroquinolone was "suspended in the composition," as required by the count.  The Board had sided with Auris Medical, concluding that because "there is an example of ketamine suspended in poloxamer" together with a "clear teaching of an additional embodiment with an additional ingredient, including fluoroquinolones," the '478 PCT described an embodiment that satisfied the count.  In reversing the Board, the Federal Circuit stated, however, that "[i]t is undisputed that the '478 PCT lacks any explicit disclosure of a single embodiment of a suspended-fluoroquinolone composition or its use."

Returning to Otonomy Motion 1, the Federal Circuit determined that "[s]ubstantial evidence supports the Board's decision that the original specification of the '319 application does not provide sufficient written description support for the claimed suspended-fluoroquinolone composition."  In the interference, the Board had explained that it was relying exclusively on the preliminary amendment filed with the '319 application in deciding Otonomy Motion 1.  The significance of the Board's explanation is that since the specifications of the '319 application and '478 PCT are substantially identical, and the Board relied exclusively on the preliminary amendment filed with the '319 application to deny Otonomy's written description challenge, the '478 PCT could not provide written description of the subject matter of the count.  The Federal Circuit therefore concluded that '865 patent was not entitled to the benefit of the '478 PCT filing date, and could not claim priority any earlier than June 27, 2014 when the preliminary amendment was filed with the '319 application.  As a result, the Court determined that the Board erred in awarding priority to Auris Medical, reversed the judgment of priority against Otonomy, and remanded for entry of judgment on priority against Auris.

With respect to Auris Medical's cross-appeal that the Board erred in concluding that the WO '949 does not anticipate Otonomy's claims, the Federal Circuit concluded that substantial evidence supported the Board's determination that nothing in the WO '949 would have led a person of ordinary skill in the art to pick and choose among the elements of the disclosure to arrive at a suspended-fluoroquinolone composition as claimed.  Auris Medical argued that the Board's anticipation analysis "improperly focused on the relatively large number of theoretical combinations disclosed" in the WO '949 and failed to consider key teachings that would allow a person of skill in the art "to immediately narrow down or look past these theoretical combinations and recognize a single disclosed embodiment that anticipates Otonomy's broad claims."  The Federal Circuit, however, stated that "[w]hile Auris points to multiple, distinct teachings within the WO '949, it does not identify guidance in the disclosure to link them together."  The Federal Circuit therefore affirmed the Board's determination that the WO '949 does not anticipate Otonomy claim 38.

Otonomy, Inc. v. Auris Medical, AG (Fed. Cir. 2018)
Nonpredecential dispostion
Panel: Circuit Judges Moore, O'Malley, and Wallach
Opinion by Circuit Judge O'Malley

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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