Will KSR‘s Effect On Small Molecule Patents Be Limited?

By Photon Rao and George Best

Summary: When the Supreme Court handed down its decision in KSR, many people expected the Court’s apparent endorsement of an “obvious to try” standard for obviousness to greatly change patent law. Indeed, the Federal Circuit broadly applied the KSR decision in the gene patenting context in Kubin, and some expected the Federal Circuit to take a similar approach to small molecule claims. Four recent Federal Circuit decisions, however, suggest that small molecules are special and may be relatively unaffected by KSR. After Procter & Gamble, Sanofi, Eisai, and Takeda, it appears that KSR may not have substantially lowered the bar for finding claims to small molecules, particularly those pharmaceutically active, invalid as obvious. Procter & Gamble is significant because it was decided after Kubin, and in it, the question of obviousness depended on a simple structural difference between the prior art and the patented molecule. Even though the claimed compound, was a simple positional isomer of the prior art, the Federal Circuit found that the difference was not obvious. The Court’s continuing view that small molecule chemistry is inherently unpredictable suggests that KSR may likely have limited effect on pharmaceutically active, small molecule patents. [For more information on the KSR case, see IPW, IP Law, 1 June 2007 and 9 May 2007].

A critical inquiry facing a patentee or a patent applicant is determining how different a new compound must be from prior art compounds to be patentable. Entrepreneurs, investors, and potential licensors also must confront this question in considering the strength of patents granted or sought on compounds of interest. If the difference is not enough, the new compound will be deemed obvious in the United States, and thus unpatentable.¹

The debate over whether or not a claimed invention would have been obvious often is protracted because lines cannot be easily drawn. For this reason, obviousness is the most common issue appealed to the Board of Patent Appeal and Interference (BPAI).² About 90 percent of ex parte BPAI decisions decide an issue of obviousness.³

Despite its importance, the obviousness inquiry comes with no easy or even predictable answer; especially in the uncertain realm of pharmaceutical inventions involving small molecules.⁴ The central difficulty in making these determinations is the absence of a structure-based, bright-line test to determine whether a new compound is, or is not, prima facie obvious in view of a prior art compound.

A recent Federal Circuit ruling exemplifies how structurally similar a new compound can be to its prior art and yet not be prima facie obvious in view of it. In Procter & Gamble Co. v. Teva Pharmaceuticals USA Inc., the court found that a 3-pyridyl isomer was not obvious over the corresponding 2-pyridyl, prior-art isomer.⁵ Furthermore, a review of recent cases suggests that the Federal Circuit is taking a new look at the doctrine of addressing obviousness in the context of chemical patents.

Post-KSR State of Small Molecule Patent Law

Consistent with the statute, courts have considered whether a claimed invention as a whole would have been obvious.⁶ The Federal Circuit had stated that if there was no teaching, suggestion, or motivation (TSM) in the prior art to make a new combination of known elements, then the combination will be unobvious in view of the prior art.⁷ As a corollary to this test, the Federal Circuit went on to say that “obvious to try” an invention was not the same as making the invention obvious.⁸

Recently, the Supreme Court held that the TSM test was too rigid. While the existence of a TSM in the prior art could be a factor in the obviousness determination, the existence of a TSM was not required for a combination of known elements to be obvious.⁹ In particular, the Supreme Court also repudiated as “error” the Deuel restriction on the ability of a skilled artisan to combine elements within the scope of the prior art.¹⁰

It is, however, easier to break than build. While KSR repudiated the TSM test and the Deuel restriction, it did not specify what test should be applied to determine obviousness, particularly in the unpredictable realm of small molecule inventions. This brings us to Procter & Gamble, where, in view of certain other post-KSR Federal Circuit “obviousness” decisions, the Federal Circuit arguably restored the TSM test for determining obviousness of small organic molecules.¹¹

Ring Walking is not Per Se Prima Facie Obvious

Procter and Gamble Co.’s (P&G’s) risedronate is used for treating osteoporosis and abnormal bone formation. It is a billion dollar drug and, therefore, a natural target for generic competition. Teva, a generic drug manufacturer, alleged that risedronate, a 3-pyridyl isomer, was obvious over P&G’s previously disclosed 2-pyridyl positional (or ring walking) isomer. The structural similarity of the two compounds is illustrated below.

Risedronate (Claimed Compound)                                     Prior Art Compound

Such modifications may be accidental, but they are usually (and more problematic legally) found as part of a planned structure-activity modification study.¹² Often, the prior art “dud” has at least some beneficial properties, but has other properties that keep it from being a viable candidate for therapeutic use. The need to improve upon these insufficiencies makes it obvious to try to make some structurally-related new compound. Some have read the Supreme Court’s decision in KSR as mandating a determination that these structurally-related compounds would have been obvious, even without any TSM suggesting that they be made.¹³

In Procter & Gamble, the Federal Circuit determined that the bone reforming properties of the pyridyl compounds were unpredictable. Then, the court reasoned that, under such unpredictable conditions, and absent any TSM, one would not choose the 2-pyridyl isomer, modify it by routine experimentation, and arrive at risedronate. Overall, the court decided that risedronate was not prima facie obvious in view of the prior art compound.

Other Decisions: KSR has a Limited Effect in Chemical Cases

Under Procter & Gamble, it is possible that a simple positional isomer of a prior art compound is unobvious without demonstrating unexpected properties or secondary effects.¹⁴ The Federal Circuit previously held, in the post-KSR case Takeda Chemical Industries, Ltd. v. Alphapharm Pty., Ltd., that a new compound containing positional isomerism (where substituents moved from 6- to 5-position of pyridine) and homologation (methyl to ethyl) relative to the prior art compound, was unobvious over the prior art compound.¹⁵ And after the Takeda decision, in Eisai Co. v. Dr. Reddy’s Laboratories, Ltd., the Federal Circuit similarly ruled that a new compound containing a methoxyethyl group in place of a trifluoroethyl group was unobvious and patentable.¹⁶

Is the Federal Circuit out on a Limb?

In fact, some might say that the Federal Circuit’s boldest pronouncement of an obviousness analysis different from KSR, for small molecules, in unpredictable arts, came, not in Procter & Gamble, but in Sanofi-Synthelabo v. Apotex.¹⁷ In Procter & Gamble, at least nonobviousness of a positional isomer in view of another positional isomer was in question. In Sanofi, the question of nonobviousness pitched the claimed compound (an enantiomer, as the bisulfate salt) against a prior art mixture (a racemate, disclosed as the hydrochloride salt but where usefulness of other pharmaceutically useful salts was disclosed¹⁸). The prior art mixture included that very claimed compound and another compound (the other enantiomer) which has the exact same chemical bonding as the claimed compound, but the disposition in space of whose constituents differ such that it is the mirror image of the claimed compound.¹⁹

KSR had stated that “combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.”²⁰ Apotex argued that Sanofi did no more than separate the enantiomers and determine their properties, and that the properties were predictably those of the racemate’s, allocated between the enantiomers.²¹ However, deciding against Apotex, the Federal Circuit went on to say “[t]he evidence at trial well supported the finding that the result of this separation of enantiomers was unpredictable. We discern no error in the district court’s implicit recognition that the principles of KSR do not affect the conclusion herein [emphasis added].”²² It is interesting to note that the USPTO may disagree with this analysis, as it has agreed to reexamine Sanofi’s patent,²³ Reexamination requests are granted only if there is a substantial new question of patentablility.²⁴

Therefore, even if a structural alteration or even a structure-based separation was obvious to try due to the underlying simplicity of the alteration, in the unpredictable field of pharmaceutically active small molecules, that did not translate to obviousness.²⁵ Takeda, Eisai, Apotex, and Procter & Gamble seem, at least for the time being, to have settled the applicable obviousness law for small molecules and suggest that KSR will have limited effect on small molecule patenting.

Small molecule obviousness analysis, however, remains extremely fact sensitive. In a case decided a day after Procter & Gamble, the Federal Circuit refused to grant a preliminary injunction for the patentee’s compound, pantoprazole. The pantoprazole molecule contained a methoxy group in place of the prior art compound’s methyl group, and could thus be obvious over the prior art “methyl” compound.²⁶²⁷ Collected below are the structures of each compound whose patentability was disputed (“Claimed Compound”), the corresponding leads (“Prior Art Compound”), and the outcome of the obviousness inquiry according to the Federal Circuit.

Invalid Lead Compound: Additional Ammunition Against Obviousness Allegations

The obviousness analysis of a new compound begins with identifying at least one prior art compound, also called a lead compound.²⁸ The lead compound is the hypothetical (or actual) starting point for experimentation to arrive at the new compound. Typically, prima facie obviousness based on a lead compound is challenged by demonstrating that it was not obvious to modify the lead compound and arrive at the new compound. However, another line of attack can be directed to demonstrate that the lead compound chosen, by the USPTO during examination or the opposing party in a patent suit, is not a valid starting point for obviousness analysis. The lower court in Procter & Gamble reached the decision that the alleged prior art compound, the 2-pyridyl compound, was unsuitable to be chosen as a lead compound in the obviousness analysis.²⁹

In other words, given what was known about the compound, one would not have identified the lead compound as a starting point for making other compounds with improved properties. Simply because a plaintiff or the patent office alleges that a certain compound with structural features the nearest to a new compound is the lead compound, it does not have to be so. If the art is unpredictable, even a close structural analogue may not be chosen as a lead compound to arrive at the new compound.

Ways to Refute Obviousness: Facts, Facts, and Facts

The obviousness determination is very fact-specific. The relevant facts include the structure and properties of the prior art and the new compound. Because many important inventive compounds seem obvious in hindsight, the framing of the obviousness inquiry often determines the answer that follows. Moreover, even if a new compound is prima facie obvious, such obviousness can be refuted by demonstrating unexpected properties or various secondary factors. However, gathering such information is time consuming and may not be available during the time of filing a patent application.

Therefore, whenever appropriate, patentees should provide facts during prosecution via properly drafted declarations. Such declarations are useful beyond simply getting a patent. It is also important to remember that on appeal, the court of appeals reviews questions of facts with at least substantial deference (if the trial judge was the decision maker), or with extreme deference (if the jury was the decision maker). Therefore, facts supporting the patentee’s position are reviewed with little to no discretion at the appellate level.

The patentee often wonders what type of facts can be used to support unobviousness of a compound. In Procter & Gamble, to demonstrate unpredictability in the art, it was enough to show that while risedronate, the 3-pyridyl isomer, was active in inhibiting bone resorption, the corresponding 4-pyridyl isomer was not. Regarding unexpected results sufficient to refute prima facie obviousness, the following safety data was found to be adequate by the Federal Circuit in Procter & Gamble. While risedronate showed no observable toxicity at a dose equivalent to 0.75 mg P/kg/day,³⁰ the 2-pyridyl derivative was safe only at a lower dose equivalent to up to 0.25 mg P/kg/day. Under in vivo test conditions, 2-pyridyl derivative was lethal at a dose of 1 mg P/kg/day, while risedronate was not.

The More Things Change, the More They Stay the Same

In four post-KSR decisions about obviousness of small molecule pharmaceuticals, the Federal Circuit continues to stick to the TSM formulation. At the same time, in the not-so-distant area of DNA patenting, the same court has found, based on a contra-Deuel, obvious-to-try rationale, claims to gene products obvious, in spite of the absence of any TSM by the prior art references.³¹ Even after the post-KSR redrawing of the obviousness boundaries, determination of obviousness in pharmaceuticals and particularly small molecule pharmaceuticals continues to be guided by the TSM test.

Dr. Rao is an IP associate with Foley & Lardner LLP in the firm’s Silicon Valley, California office and is a member of the firm’s Chemical and Pharmaceutical Practice.

Dr. Best is an IP Partner with Foley & Lardner LLP in the firm’s Silicon Valley, California office and is a member of the firm’s IP Litigation and Appellate Practices. Dr. Best has been involved in all aspects of numerous patent, trade secret and business tort cases. He has argued at the U.S. Court of Appeals for the Federal Circuit. In U.S. District Courts, Dr. Best has conducted direct and cross-examinations of witnesses in bench and jury trials. He also has argued portions of several claim construction and summary judgment hearings. Dr. Best also has extensive experience in expert discovery, document discovery, depositions and motions practice.

The views expressed here are the authors’ own and do not reflect the view of Foley & Lardner or its clients.

1. In Europe, similarly, a compound is unpatentable for lacking an inventive step. [^]
2. The BPAI reviews appeals by the patent applicant when claims in a US patent application are rejected by the US Patent and Trademark Office (USPTO) examiners. [^]
3. Dennis Crouch, Understanding the Role of the Board of Patent Appeals: Ex Parte Rejection Rates on Appeal, Patently-O, (June 22, 2009). [^]
4. Broadly, “unpredictable” refers to the unpredictability of a property of a compound by extrapolation from properties of compounds with very similar structures. The therapeutic properties of pharmaceutical compounds used for in vivo administration, tend, often, to be unpredictable due to competing toxic and therapeutic effects in vivo. [^]
5. Procter & Gamble Co. v. Teva Pharms. USA Inc., 566 F.3d 989 (Fed. Cir. 2009). [^]
6. 35 U.S.C. § 103(a). [^]
7. Al-Site Corp. v. VSI Int’l, Inc., 174 F. 3d 1308 (Fed. Cir.1999). [^]
8. In re Deuel, 51 F. 3d 1552, 1559 (Fed. Cir. 1995). [^]
9. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). [^]
10. KSR, 550 U.S. at 421. [^]
11. Procter & Gamble, 566 F.3d at 989. [^]
12. KSR, 550 U.S. at page 401 (When a work is available in one field, design incentives and other market forces can prompt variations of it, [] in the same field . . . . If a person of ordinary skill in the art can implement a predictable variation, and would see the benefit of doing so, § 103 likely bars its patentability. Moreover, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond that person’s skill. A court must ask whether the improvement is more than the predictable use of prior-art elements according to their established functions.). [^]
13. Based, in part, on the KSR court’s assertion that, “simple substitution of one known element for another or the mere application of a known technique to a piece of prior art ready for the improvement” lead to a development that was obvious. KSR, 550 US at 401. [^]
14. Even if a compound is structurally prima facie obvious in view of the prior art, unexpected properties or other such secondary effects is useful to overcome the prima facie obviousness. [^]
15. Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350, 1357 (Fed. Cir. 2007) (“Accordingly, under KSR, ‘it remains necessary to identify some reason that would have led a chemist to modify a known compound in a particular manner to establish prima facie obviousness of a new claimed compound.’”) [^]
16. Eisai Co. Ltd. v. Dr. Reddy’s Labs., Ltd., 533 F.3d 1353 (Fed. Cir. 2008). [^]
17. Sanofi-Synthelabo v. Apotex, 550 F.3d 1075 (Fed. Cir. 2008); cert. petition filed, .78 USLW 3065 (Jul 24, 2009). [^]
18. The district court observed that the scientific literature listed eighty acids as candidates for forming salts with basic drug compounds, fifty-three of which acids had been used in FDA-approved drugs. Id. at 1088. The experts of both parties agreed that whether a pharmaceutically suitable crystalline salt will form from a particular acid-base combination is unpredictable. Id. at 1089. [^]
19. In other words, enantiomers are like left and right hands. [^]
20. KSR, 550 US at 401. [^]
21. Sanofi-Synthelabo, 550 F.3d at 1090. [^]
22. Id. [^]
23. “U.S. Patent Office Orders Re-Examination of Plavix Patent,” Wall Street Journal, (August 18, 2009). [^]
24. 35 U.S.C. § 303. [^]
25. Procter & Gamble, 566 F.3d at 997 (quoting In re O’Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988) ); In re Kubin, 561 F.3d 1351 (Fed. Cir. 2009). [^]
26. Altana Pharma AG v. Teva Pharms. USA, Inc., 566 F.3d 999 (Fed. Cir. 2009). [^]
27. Due to the nature of the legal inquiry, the facts necessary to demonstrate obviousness for this compound was much lower compared to the four other compounds discussed, and tabulated below. [^]
28. Takeda, 492 F.3d at 1359; see also Eisai Co. Ltd., 533 F.3d 1353. [^]
29. Procter & Gamble, 566 F.3d at 995. [^]
30. Refers to 0.75 g of phosphorous/kg/day. [^]
31. In re Kubin, 561 F.3d at 1361. [^]