By Sneha Mascarenhas
In the last 50 years, the number of utility patent applications under which pharmaceutical patents fall has increased from 86,000 to 578,000, while the issuance rate of patents of foreign origin including utility, plant, and design increased from one-quarter to one-half. Other significant changes occurring simultaneously relate to the transition to electronic submissions, with a $400 surcharge being applied to nonelectronic filings delivered by hand or by mail since November 2011. Innovations in telecommunications have resulted in substantial changes in the review of patents before and after issue, some of which are discussed in Merck v. Gnosis.
Raising interesting perspectives about patentability and review in Merck v. Gnosis, Judge Newman, in his dissent, highlights some objectives of the Leahy-Smith America Invents Act, also known as the AIA. Among other things, this law established new procedures, changed the burden of proof standards, and provided a faster finality of review, streamlining and harmonizing patent issue and review procedures. Under Leahy-Smith, a third party can challenge patent validity by a preponderance of the evidence, rendering it invalid with relative ease, as opposed to the clear and convincing evidence standard used by the district court and affirmed by the appeals court in Amgen v. Chugai.
While the intellectual property world largely relies on KSR v. Teleflex for an obviousness determination, the United States Patent and Trademark Office has transcribed this decision and issued what is effectively a substantial evidence standard for its patent examiners. Providing a relatively broad basis for an obviousness rejection by maintaining that the rationale to modify or combine prior art need not be expressly stated, and that the rationale to modify a reference in prior art need not be the same as the applicant, the examiners are still required to explain in detail the reason for rejection in each case. The examiner can only use scientific principles or legal precedents if the facts are sufficiently similar and if there is evidence of the existence of a principle, with its interpretation and boundaries of application. This requirement may be foregone only where the facts can be proven to be common knowledge easily.
In a complex pharmaceutical world of pure and interdisciplinary sciences, where actives and excipients can be detected at micro levels as polymorphs, salts, enantiomers, solvates, analogs, and other species, what is seemingly obvious to one entity may not be to another. Theoretically much is possible, yet Amgen v. Chugai clearly established that mere claims of every possible opportunity are unsatisfactory: that prior to evaluating obviousness, reduction to practice is necessary, automatically reducing patent eligibility from “everything” obvious to try, to the few patents and claims which are actually realized after considerable effort, risk, and capital investment. Thereafter proving that the single innovation specifically patented is “obvious,” while considerably less work under the new preponderance of the evidence standard of the Patent Trial and Appeal Board, may still be evaluated under the substantial evidence review standard imposed by appeal to the Federal Circuit, as done in Merck v. Gnosis.