South Alabama Med. Sci. Fndtn. (“SAM”) v. Gnosis S.P.A. et al.

Docket Nos. 2014-1778, -1780, -1781 (from IPR2013-00116)

December 17, 2015

UPDATE: Petition for rehearing en banc denied April 26, 2016. Judges O’Malley, Wallach and Stoll concurred (“While I understand Merck’s concerns, and those of the dissent, I do not believe we can alter our standard of review for Board decisions, even via en banc consideration. I agree that application of the substantial evidence standard of review is seemingly inconsistent with the purpose and content of the AIA.”) Judge Newman dissented (“My concern relates to the Federal Circuit’s implementation of its appellate role, for the court has adopted a highly deferential standard of review of these PTAB decisions, instead of the full and fair review that is appropriate to the American Invents Act.”)

Brief Summary: Board decision of obviousness affirmed for the same reasons as in Gnosis I. Evidence of licensing was not properly considered by the Board but this error found to be harmless. Judge Newman dissented as in Gnosis I.

Summary: The opinion notes this is a companion case to Merck & Cie v. Gnosis S.p.A., No. 14-1777 (Fed. Cir. Dec. 17, 2015) (Gnosis I)” and that “[a]s Merck argued in that case, [SAM] argues here that the prior art taught away from its claimed use of a reduced folate to treat folate deficiency, and that objective indicia of non-obviousness further demonstrate the validity of its patents” (US 5,997,915; 6,673,381; and 7,172,778). The Board found the disputed claims of these patents invalid as obvious in view of the Serfontein and Marazza references of the Merck & Cie decision. The FC panel agreed with the Board’s decision for the same reasons as in Merck & Cie. The Board also found SAM demonstrate an adequate nexus between its evidence of nonobviousness (licensing) and the “novel features” of the claims. The FC panel agreed with SAM that the Board erred in assessing its licensing evidence by requiring SAM “to show a nexus between the claimed inventions and [Merck’s sublicensee] Panlab’s products”. It explained that “[a]lthough evidence that the licensee ultimately manufactured a product that embodies the claimed invention may be probative of a nexus between the claimed invention and the licensing activity, the patentee is not necessarily required to establish an independent nexus between those products and the claimed invention for the licensing activity to be relevant.” However, the FC panel found this error to be harmless since that evidence “is not enough to overcome the strong evidence of obviousness found in the prior art and the expert testimony relied upon by the Board”. The Board decision was therefore affirmed. Judge Newman’s dissented for the same reasons in Gnosis I (post-grant review improperly allows “the petitioner [to] provide invalidity by no more than a preponderance of the evidence” and “it is incorrect for this court, as the only reviewing tribunal, to review the PTAB decision under the highly deferential ‘substantial evidence’ standard” (“whether the decision could reasonably have been made, not whether it was correctly made”)).

This entry was posted in Inter Parties Review (IPR), IPR, Obviousness. Bookmark the permalink.

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