Clarifying the standards and burdens associated with an obviousness analysis, the U.S. Court of Appeals for the Federal Circuit found that the presumption of validity and burden of proving obviousness do not change regardless of the facts of a particular case.  Sciele Pharma Inc. v. Lupin Ltd., Case No. 12-1228 (Fed. Cir., July 2, 2012) (Moore, J.) (Newman, J., dissenting). 

The patent in suit was obtained after a series of errors by the U.S. Patent and Trademark Office (USPTO). The examiner issued claims that had been previously rejected as obvious over a foreign patent application to Cheng.  The patentee informed the examiner of the errors, but nonetheless the patent issued with the previously rejected claims.

The patent was eventually listed in the Orange Book for Fortamet, an extended-release tablet of metaformin hydrochloride.  Lupin submitted an Abbreviated New Drug Application (ANDA) seeking approval for a generic version of Fortamet, and Sciele sued Lupin asserting infringement of Sciele’s patent.

After the statutory 30-month stay expired, Lupin made an “at risk” launch of its ANDA product.    Sciele sought a preliminary injunction, which was initially granted by the district court.  Later, the injunction was vacated and remanded by the Federal Circuit because the lower court failed to address Lupin’s obviousness arguments that the patent claims were invalid in view of Cheng and a foreign patent application to Timmins.  On remand, the district court again found for Sciele, and issued a preliminary injunction.  The district court concluded that KSR was inapplicable to Lupin’s obviousness argument because Cheng and Timmins were before the UPSTO during prosecution and that, given the Patent Office was “a qualified government agency,” the court must apply a heightened burden of proving obviousness, and that statements regarding enablement during prosecution could not be used as proof of obviousness. 

The Federal Circuit vacated the preliminary injunction and remanded for further proceedings, finding that, because the lower court incorrectly concluded that Lupin failed to raise a substantial question of validity regarding the asserted patent claims, the court had abused its discretion by issuing the preliminary injunction.  The Court found that the lower court had erred by applying a heightened standard of validity because Cheng and Timmins were before the USPTO.  The Federal Circuit stated that the burden of proving invalidity is “clear and convincing evidence,” regardless of whether (or not) the references at-issue were before the Patent Office during prosecution.  The Court stated that it may consider information in the prosecution history in examining whether the accused infringer has met his burden of clear and convincing evidence.  The Federal Circuit also found KSR applied regardless of whether the references at-issue were before the Patent Office. 

On that basis, the Federal Circuit found that Lupin had raised a substantial question of patentability.  The Court found that Cheng combined with Timmins disclosed all of the claimed limitations and that a person of ordinary skill in the art would be motivated to combine the references because Timmins taught benefits over other extended-release metformin, like that in the Cheng reference.  The Federal Circuit also found that an enablement argument made during prosecution that one of ordinary skill could use prior art methods and formulations to achieve the claimed pharmacokinetic limitations of the invention was held to be admissions of “predictability” and skill in the art.  Therefore, the Court vacated the preliminary injunction and remanded for further proceedings.