By Kevin E. Noonan –

The Patent Trial and Appeal Board of the U.S. Patent and Trademark Office recently issued a Final Written Decision in an inter partes review styled Mylan Pharm. v. AstraZeneca AB affirming the patentability of all challenged claims.  In its opinion, the Board provided a detailed example of how the Office is applying the law of chemical obviousness ten years after the Supreme Court's latest pronouncement on obviousness in KSR Int'l.  v. Teleflex, Inc. (2007).

The challenged patent was RE44,186, a reissue of U.S. Patent No. 6,395,767.  The patent was reissued to add narrower claims specifically directed to saxagliptin, sold by AstraZeneca as Onglyza and Kombiglyze XR (the drug was originally developed by Bristol-Myers Squibb and then sold to AstraZeneca).  The challenged claims (claims 1, 2, 4, 6–22, 25–30, 32–37, and 39–42) were directed to a specific class of "cyclopropyl-fused pyrrolidine-based inhibitors of dipeptidyl peptidase IV (DP-4)" as well as methods for treating diabetes.  This biological effect stems from inhibiting glucagon, which stimulates insulin secretion as well as increasing satiety and slowing gastric emptying.  Saxagliptin is recited in claim 25, which is representative, and has the following structure:

and the chemical name (1S,3S,5S)-2-[(2S)-2-amino-2-(3-hydroxy-1-adamantyl) acetyl]-2-azabicyclo[3.1.0]hexane-3-carbonitrile.

Mylan Pharmaceuticals filed the initial petition and was later joined by Wockhardt Bio AG, Teva Pharmaceuticals USA, Inc., Aurobindo Pharma USA Inc., and jointly by Sun Pharmaceuticals Industries, Ltd., Sun Pharma Global FZE, and Amneal Pharmaceuticals LLC.  The Board initially refused to institute the petition, but upon Mylan's petition for rehearing, the Board reversed itself and instituted the IPR on obviousness grounds.  Concurrent, consolidated ANDA litigations ended in judgment for AstraZeneca:

AstraZeneca AB v. Mylan Pharmaceuticals Inc., 14-cv-00696 (D. Del. 2014);
AstraZeneca AB v. Mylan Pharmaceuticals Inc., 14-cv-00094 (D.W. Va. 2014);
AstraZeneca AB v. Aurobindo Pharma Ltd. et al., 14-cv-01469 (D. Del 2014);
AstraZeneca AB v. Aurobindo Pharma Ltd. et al., 14-cv-00664 (D. Del 2014);
AstraZeneca AB v. Actavis Laboratories FL, Inc., 14-cv-01356 (D. Del. 2014);
AstraZeneca AB v. Sun Pharma Global FZE et al., 14-cv-00694 (D. Del. 2014);
AstraZeneca AB v. Amneal Pharmaceuticals LLC., 14-cv-00697 (D. Del. 2014);
AstraZeneca AB v. Wockhardt Bio AG et al., 14-cv-00696 (D. Del. 2014); and
AstraZeneca AB v. Watson Laboratories, Inc., 14-cv-00666 (D. Del. 2014)

The Board held an oral hearing on January 25, 2017 and delivered its opinion slightly longer than one year from the institution decision (May 2, 2016).

Petitioners asserted seven references in support of their obviousness contentions; one reference (Ashworth I) discloses a compound that the Board considered as the "lead compound" in the prior art for their obviousness analysis under § 103(a).

The claims were construed according to their ordinary and accepted meaning in the art under the broadest reasonable interpretation standard; there was no specific construction urged by the parties.  There was also no disagreement as to the level of ordinary skill in the art, nor was there any challenge to the parties' experts on this basis,

The Board noted that it gave more weight to the Patent Owner's expert (Dr. Ann E. Weber), because she had more experience at the relevant time (when the application was filed in 2000), whereas Petitioners' expert's (Dr. David P. Rotella) experience arose during his employment at BMS during the development of saxagliptin (i.e., after that compound had been chosen for further development).  In addition, the Board considered Dr. Weber's experience in developing DP4 inhibitors for Merck, where she developed the first DP4 inhibitor for diabetes (sitagliptin) on the market.  This experience was relevant to the Board inter alia because Dr. Weber had chosen a different lead compound to develop than the Ashworth I compound Petitioners relied upon for their obviousness arguments.

In its analysis, the Board applied the "lead compound" approach in assessing obviousness.  This constitutes a two-pronged inquiry: first, determining whether the prior art would have led the skilled worker to one or more lead compounds for further development; and then whether there was sufficient reason for the skilled worker to have modified that lead compound to the claimed compound with a reasonable expectation of success that the compound would have the desired properties (here, for the treatment of diabetes), citing Otsuka Pharm. Co., Ltd., v. Sandoz, Inc., 678 F.3d 1280, 1291–92 (Fed. Cir. 2012).  Merely identifying each feature of the claimed compound in the prior art isn't enough, according to the opinion, because the assessment is on the prior art as a whole, citing Eli Lilly and Co. v. Zenith Goldline Pharm., Inc., 471 F.3d 1369, 1379 (Fed. Cir. 2006).  Prior art that provides only general guidance isn't sufficient to satisfy this standard, under In re Cyclobenzaprine Hydrochloride Extended–Release Capsule Patent Litigation, 676 F.3d 1063, 1073 (Fed. Cir. 2012).

For saxagliptin the features of the molecule considered in this analysis (per the Patent Owner) were the following:

The Ashworth I compound to which these features were compared had the structure:

This compound was characterized as being "a glycyl moiety having a primary amine (NH₂), a cyclohexyl group on the β-carbon (2-position) of the glycyl moiety, and a pyrrolidine ring having a cyano (nitrile) group, designated here as CN."  Accordingly, the Board characterized the differences between this compound and saxagliptin stating "the structure of saxagliptin (claim 25) differs from [the Ashworth I] compound [] in having 3-hydroxyl adamantyl in place of the cyclohexyl group and a cyclopropyl fusion of the pyrrolidine ring."

The first question addressed by the Board was whether the Ashworth I compound would have been used as the lead compound by the skilled worker.  The Board determined that Petitioners did not establish by a preponderance of the evidence that Ashworth I would be chosen as a lead compound.  The basis for this decision was that Ashworth I did not provide in vivo evidence and the in vitro results reported in the reference were carried out at room temperature (not tested in humans).  Further, the Ashworth I reference itself stated that further work needed to be done and there were known stability and potential toxicity problems with the compound.  In addition, further work by Ashworth showed that those researchers developed other compounds instead, including ones having a sulfur atom substitution at the 4 position of the proline ring.

The Board noted that the only prior art DP4 inhibitors that had advanced to clinical trials in humans were:

(where P32/98 was the compound identified by Patent Owner's expert as a lead compound).  A comparison of these compounds led the Board to distinguish "N-linked" compounds (as in NVP-DPP728, where the alkyl group is directly attached to the amine) and "C-linked" compounds (as in P32/98), where the alkyl group is linked to the carbon atom adjacent to the amine.  Both these compounds did not have the stability issues known for the Ashworth I compound.  In addition, while both these compounds were recognized in the prior art as being less potent than the Ashworth I compound they, and not it, were advanced to human clinical trials.

Not only did these facts support Patent Owner's expert that the Ashworth I compound would not have been chosen as a lead compound by the skilled worker, but the Board credited her testimony based on her contemporaneous experience in not choosing the Ashworth I compound for further derivation when she was at Merck.

Even if the Board accepted the Ashworth I compound as the lead compound the Board found that Petitioners had not established by a preponderance of the evidence that the skilled worker had sufficient reason to modify that compound to produce saxagliptin.  There were three modifications recognized by the Board as asserted by Petitioners:

1. adding a cyclopropyl ring to the pyrrolidine portion of thee Ashworth I compound in the 4S,5S configuration;
2. replacing the 6-carbon cyclohexyl group at the P2 position with a 10-carbon adamantyl moiety; and
3. hydroxylating the adamantyl moiety.

With regard to the first modification, Petitioners relied on a reference to Hannesian that fusing cyclopropane to the proline ring "flattens" the ring and increases stability.  Petitioners argued that the instability of the Ashworth I compound was known to involve intramolecular cyclization that would be reduced by this modification.  The Board found that Petitioners' position was not supported by the art (citing many examples wherein this portion of the molecule was sensitive to changes, i.e., had reduced potency when altered), and that Petitioners had not shown that the skilled worker would have had a reasonable expectation for success in producing a stabilized derivative of the Ashworth I compound by fusing a cyclopropane group to the proline ring as in saxagliptin.  Indeed, Petitioners' expert admitted that "that there wasn't anything in the literature prior to the invention of saxagliptin that actually suggested that cyclopropanation of an Ashworth I type DPP4 inhibitor would improve its stability."  He additionally testified to the unknown effects in making this modification, and that such modifications were in the nature of "exploring" what their effects might be, inconsistent with a finding of reasonable expectation of success as urged by Petitioners.  (The Board considered this equivalent to the proscription in In re O'Farrell, 853 F.2d 894 (Fed. Cir. 1988), regarding teachings to experiment in a field being not sufficient to support obviousness even when an invention might have been obvious to try.)  Similar considerations led the Board to conclude that there was no reasonable expectation of increased potency by making this modification.  These conclusions were supported by Patent Owner's expert's testimony regarding the unpredictability of these modifications (the Board cited testimony that this expert was "surprised" when she became aware of the modification and also surprised that it worked).

The second modification, replacing the cyclohexyl group for an adamantyl group, was also not supported by the cited art in the Board's opinion.  Compounds with similar properties in the art had lower potencies, and the art did not teach more generally the use of "bulky" substituents to increase stability (by reducing cyclization).  In particular, the cited art related to N-linked not C-linked substituents:

The differences in shape of the resulting molecules supported the Board's disregard for the relevance of these prior art teachings, as well as its appreciation that the secondary amine disclosed in the prior art would be expect to be less available for cyclization and thus more stable.

Regarding the final alteration, hydroxylating the adamantyl moiety, Petitioners argued that this modification would be expected to increase stability and bioavailability because, inter alia, this version was a "metabolite" of the adamantyl moiety.  The Board opined that Petitioners' proposed basis for the modification did not have the requisite reasonable expectation that such a modification would improve stability or bioavailability of the molecule, based in part on Petitioners' arguments being made with regard to adamantane rather than the adamantyl group in saxagliptin.

Finally, the Board considered whether the evidence supported a determination that the skilled worker would have been motivated to make all these modifications together and have a reasonable expectation of successfully producing a DP-4 inhibitor having increased stability and potency as an anti-diabetic agent.  In part, this determination was based on there being insufficient evidence of the skilled worker's expectation making one modification after another on each intermediate modified product.  "In other words, Petitioners do not show that a skilled artisan would have reasonably expected that the combined modifications would have been successful based on the predictability of the individual modifications," as the Board stated in its opinion.

Finally, the Board looked at the objective indicia or secondary considerations of non-obviousness.  Patent Owner asserted the following: 1) failure of others; 2) saxagliptin's properties were unexpected and unpredictable; 3) saxagliptin met a long-felt need; and 4) saxagliptin is commercially successful.

Regarding failure of others, the Board found that failure of other DP-4 inhibitor compounds to obtain FDA approval (given the number of them) supported non-obviousness for saxagliptin.

As for unexpected results Patent Owner asserted:

1) extended, slow, tight binding; 2) improved chemical stability under physiologic conditions; 3) an active metabolite that extends in vivo efficacy; 4) an extended pharmacodynamic profile; 5) formation of favorable binding interactions with DPP-4; and 6) the ability to use a low once-daily dosing regimen to safely and effectively treat patients with type-2 diabetes.

These arguments were persuasive to the Board.

Regarding long-felt need, the Board found this factor also supported non-obviousness, despite there being other DP-4 inhibitor compounds in the art.

Finally, the Board was not convinced that the commercial success factor was satisfied, based on alternative bases for this success as advocated by Petitioners (discounts, market share analysis).

The panel hearing this IPR comprised Vice Chief Administrative Patent Judge Michael Tierney and APJs Rama Elluru and Christopher Paulraj.  The opinion was written by Judge Elluru with a concurring opinion by Judge Tierney.

Telecommunication Call Processing System Held to Be Eligible for Covered Business Method (CBM) Patent Review

By Joseph Herndon —

On August 3, 2017, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB) issued a decision instituting a Covered Business Method (CBM) patent review of U.S. Patent No. 7,783,021.  In this case, Securus Technologies, Inc. ("Petitioner") filed a Petition requesting a CBM review of the patent, owned by Global Tel*Link Corp. ("Patent Owner").

Under the statute 35 U.S.C. § 324, a CBM patent review may not be instituted unless the information presented in the Petition demonstrates "that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable."  For the present case, the PTAB determined that the information presented in the Petition established that the '021 Patent qualifies as a CBM patent that is eligible for review, and that it is more likely than not that the challenged claims are unpatentable under 35 U.S.C. § 103.  Here, we review the decision of whether the patent is in fact a CBM patent eligible for review.  (The determination of whether the patent is more likely than not unpatentable under 35 U.S.C. § 103 was made by comparing to five asserted prior art references, and is not addressed here).

The '021 Patent

The '021 Patent generally relates to telephone communication systems in penal institutions or similar facilities, specifically directed to systems with the capacity to allow the institutions to control, record, monitor, and report usage and access to a telephone network.  In one disclosed embodiment, the system allows an investigator to covertly monitor an inmate's conversation for suspicious activity.

The '021 Patent describes that a platform may include a site server, which serves as the main database for the telephone management system.  It has the ability to log and record details of all telephone calls placed through the system and store them.  The site server also digitizes all information and may include a recorder for recording the telephone calls and storing them in one or more databases.  User identification and authentication means described by the '021 Patent provide access to the telephone management system using PIN verification and biometric data verification.  For example, biometric data may include voiceprints, facial architecture, signature architecture, fingerprints, retinal prints, hand geometry, and the infrared pattern of the face.

In the Background of the Invention section of the '021 Patent, several prior art issues are addressed, such as to prevent such institutions from incurring unaccountable telephone costs, the institutions must either restrict access to outbound telephone lines or employ a telephone monitoring system to charge the responsible party for making the outbound communication, and in order for a system to be cost effective the system must critically monitor and record the activities of each individual user to properly charge each individual caller for his or her outgoing calls.

Of the claims challenged, claims 1, 7, 16, and 20 are independent claims.  Independent claim 1 is illustrative of the challenged claims and is reproduced below:

1.  An inmate telecommunication call processing system comprising:
    a plurality of trunk lines of a Public Switched Telephone Network (PSTN);
    at least one telephone terminal for making a telephone call, wherein said telephone terminal is located onsite at an institution;
    a central platform coupled to said plurality of trunk lines and coupled to said at least one telephone terminal for said telephone call, wherein said central platform is located offsite from said institution, and further wherein said central platform comprises one or more apparatuses for processing said telephone call;
    an administrative workstation for connecting to a said telephone terminal to monitor conversations between said institution without detection by said user; and
    at least one routing means coupled to said telephone terminal and said central platform;
    wherein said one or more apparatuses controls telephonic communication between said at least one telephone terminal and said plurality of trunk lines,
    wherein said one or more apparatuses records said conversations in said telephone call between a user associated with said at least one telephone terminal and an external party, and
    further wherein said one or more apparatuses digitizes audio and stores said audio for caller identification at said institution, and
    further wherein said one or more apparatuses communicates with an administrative workstation for billing regarding said telephone call originating from said institution.

CBM Standing

Section 18 of the AIA governs CBM patent reviews and limits such reviews to persons, or their privies, that have been sued or charged with infringement of a CBM patent.

The '021 Patent is the subject of a patent infringement suit brought by Patent Owner vs. Petitioner, and thus, a first prong for CBM standing is met.

For the second prong, a "covered business method patent" is a patent that "claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions."  AIA § 18(d)(1).

1.  Financial Product or Service

The Federal Circuit has recognized that as a matter of statutory construction, the definition of CBM patent is not limited to products and services of only the financial industry, or to patents owned by or directly affecting activities of financial institutions.  But the statutory definition of a CBM patent requires that the patent have a claim that contains, however phrased, a financial activity element.

The claims specificly recite billing functions, and thus, the burden was on the Patent Owner to show that the claims are somehow not directed to a "financial service".  The Patent Owner contended that billing here was merely an incidental or a complementary activity for receipt of telecommunication services.

But the PTAB disagreed.  Specifically, claim 1 recites, in part, "wherein said one or more apparatuses communicates with an administrative workstation for billing regarding said telephone call originating from said institution."  The PTAB found that specifically billing users is a financial service, and that nothing in the record indicates the system of the '021 Patent would or should be implemented without billing.  Thus, the billing activity is not incidental or complementary to other services.  As a result, the claims were found to satisfy the "financial product or service" component of the definition for a CBM patent set forth in § 18(d)(1) of the AIA.

2.  Technological Invention

The definition of a CBM patent in § 18(d)(1) of the AIA does not include patents for "technological inventions."  When determining whether a patent is for a technological invention, the PTAB considers:  "whether the claimed subject matter as a whole [(1)] recites a technological feature that is novel and unobvious over the prior art; and [(2)] solves a technical problem using a technical solution."  37 C.F.R. § 42.301(b).

For the technological invention exception to apply, both prongs (1) and (2) of the inquiry must be met affirmatively, meaning that a negative answer under either prong renders inapplicable the technological invention exception.

In this case, the PTAB found that neither prong of the technological invention inquiry was met.

Petitioner argued that the '021 Patent claims do not recite any technological feature that is novel or unobvious over the prior art, or that solves a technical problem using a technical solution.  Pet. 19–20 (citing Ex. 1002 ¶¶ 100–13).  Petitioner contended that the claims recite known technologies, such as telephone and computer networks, with no technical innovation over the prior art, such that the claims can be carried out using conventional software and hardware components.  Id. at 19–25.

Patent Owner pointed out that each claim recites "an administrative workstation" that monitors conversation or connects a call "without detection."  Patent Owner continued that the inventive software provides a means for patching into a call using circuitry without alerting the user or called party to the operator's presence.  Additionally, Patent Owner argued that the technical problem of the need to monitor, control, record and provide detailed records of the usage of a telephone system in a controlled institutional environment, is solved using an inventive combination of hardware and novel software.

But the PTAB found that the challenged claims only generically recite an "inmate telecommunication call processing system," which is not specific or unconventional.  Merely reciting known technologies and their use to accomplish an otherwise non-technological method does not render the challenged claims a technological invention.

The PTAB also found that the challenged claims do not involve a technical solution to a technical problem.  The challenged claims seek to solve the problems of monitoring of inmate calls, but the '021 Patent, however, does not describe specifically any technical issues presenting a technical problem to be solved.  The PTAB stated that the claimed solution –– to monitor conversations between said institutions without detection by said user –– is recited more as a fait accompli than a technical solution.

Thus, the claims were found to satisfy the definition for a CBM, and the technological invention exception did not apply.  Accordingly, the '021 Patent was found to be eligible for review under the transitional program for covered business method patents, and a CBM review as to all the challenged claims was instituted.

The result is not surprising, given that the claim specifically recites "billing" as a function to be performed.  It is curious to consider, however, whether the term "billing" was/is needed in the claim.  Billing is really referring to invoicing, or more generally, record-keeping so as to enable invoicing.  Thus, could the claim element have been phrased "wherein said one or more apparatuses communicates with an administrative workstation for billing keeping records regarding said telephone call originating from said institution"?

In addition, the term "administrative" workstation has somewhat of a financial institution feel to it, and that term "administrative" is likely unnecessary as well.  It does not provide any further structural or functional connotation to the "workstation".  Generally then, it would seem this claim may have been able to be drafted to avoid CBM jurisdiction while still covering the technical features of the invention.

Before Administrative Patent Judges Kevin F. Turner, Barbara A. Benoit, and Georgianna W. Braden
Decision by Administrative Patent Judge Turner