Granting
patent protection to advances that would occur in the ordinary course
without real innovation retards progress. - KSR
All other users having taken licenses, PharmaStem sued the remainder six companies for infringing two patents related to treatment
for compromised blood and immune systems. In yet another 2-1 split decision, a CAFC majority finds obviousness
where none had been found before (CAFC
05-1490) -
The inventors merely used routine research methods to prove what was
already believed to be the case. Scientific confirmation of what was already
believed to be true may be a valuable contribution, but it does not give
rise to a patentable invention.
- while the dissent finds the hindsight demon unleashed by KSR a
vampire, sucking the lifeblood from a deserved patent.
The court’s approach reflects misperception of the scientific process as
well as the patent purpose. Scientific methodology usually starts with a
hypothesis based on what is already known; the record shows that several
scientists mentioned the idea of rebuilding destroyed blood cells. However,
none achieved this long-sought goal, and the record shows the extreme
skepticism concerning even the possibility of this achievement. Nonetheless,
my colleagues deny the value of this long-sought result. Instead, my
colleagues simply reweigh selectively extracted evidence, ignore the actual
peer response and acclaim at the time these inventions were made, reject
the testimony and admissions of the defendants, and use present knowledge of
the inventors’ success to find that it was obvious all along.
Backdrop on the technology, the patents, and the accused infringers -
[5,004,681 and CIP
5,192,553] recite compositions and methods relating
to a medical procedure for treating persons with compromised blood and
immune systems. The treatment is based on the discovery that blood from a
newborn infant’s umbilical cord is a rich source of a type of stem cells
useful for rebuilding an individual’s blood and immune system after that
system has been compromised by disease or a medical treatment such as
chemotherapy.
Stem cells are fundamental (or “immature,” or “primitive”) cells from
which specialized (or “mature”) cells derive. Hematopoietic stem cells are
stem cells that are ultimately responsible for producing the various
specialized cells of the blood and immune (or “hematopoietic”) system.
Hematopoietic stem cells produce progenitor cells and more hematopoietic
stem cells. The progenitor cells, which are less primitive than the stem
cells, in turn give rise to the variety of specialized cells that constitute
the blood and immune system. Although hematopoietic stem cells are present
in various types of human tissue, they are found in unusually high
concentration and potency in umbilical cord blood.
The ’681 and ’553 patents describe a process for collecting a newborn
infant’s umbilical cord blood at the time of birth, testing it for
suitability for later use, preserving it through cryopreservation, and
infusing it into an individual (either the donor or another person,
preferably one with a closely matched blood type) whose hematopoietic stem
cells have been destroyed. The object of such transplantations is to effect
grafting. A successful graft results when the donor’s stem cells migrate
into the recipient’s bone marrow, resulting in the renewed production of
normal, specialized blood cells and ultimately the reconstitution of the
recipient’s entire blood and immune system.
As issued, the ’681 patent contained very broad claims. Claim 1 recited a
composition comprising “a plurality of viable human neonatal or fetal
hematopoietic stem cells derived from the blood [and a] cryopreservative.”
In reexamination, several of the original claims were cancelled. Claim 1 was
amended to read as follows:
A cryopreserved therapeutic composition comprising viable human
neonatal or fetal hematopoietic stem cells derived from the umbilical
cord blood or placental blood of a single human collected at the birth
of said human, in which said cells are present in an amount sufficient
to effect hematopoietic reconstitution of a human adult; and an amount
of cryopreservative sufficient for cryopreservation of said cells.
A cryopreserved therapeutic composition comprising viable human neonatal
or fetal hematopoietic stem cells derived from the umbilical cord blood or
placental blood of a single human collected at the birth of said human, in
which said cells are present in an amount sufficient to effect hematopoietic
reconstitution of a human adult; and an amount of cryopreservative
sufficient for cryopreservation of said cells.
Each of the defendants offers a service to families of newborn infants in
which blood from the infant’s umbilical cord is collected and cryopreserved
for possible later use. The defendants represent in their promotional
literature that the preserved cord blood may be useful for reconstituting
the donor’s hematopoietic system in the event that system is damaged or
destroyed as a result of disease or other causes. Some of the promotional
literature advises that the preserved cord blood may also be useful for
treating closely related members of the infant’s family.
The legal tale so far -
At the conclusion of the trial, the jury returned verdicts for PharmaStem
on both patents, finding both patents infringed and not invalid. The jury
also rejected the defendants’ counterclaims of inequitable conduct and
violation of the antitrust laws.
Following the jury’s verdict finding infringement of both patents by all
four appellants, the district court granted the defendants’ JMOL motions and
entered a judgment of noninfringement with respect to both patents. The
court agreed with the defendants that, in light of the legal theories
pressed by PharmaStem at trial, the evidence failed to show that any of the
defendants had infringed any of the asserted claims of either patent in
suit.
The court denied the defendants’ JMOL motions with respect to various
asserted grounds of patent invalidity. PharmaStem now appeals from the JMOL
orders on infringement, and the defendants cross-appeal from the court’s
refusal to grant JMOL on invalidity.
PharmaStem asserted contributory infringement. The problem was that the
defendants provided a service, conduct that didn’t amount to a sale, thus not
meeting §271(c); the CAFC majority affirming non-infringement.
Here’s the CAFC taking carte blanche on obviousness determination -
Obviousness is a legal conclusion that we review de novo. The statutory
standard requires us to decide whether the subject matter of the claimed
invention “would have been obvious at the time the invention was made to a
person of ordinary skill in the art to which [the subject matter of the
invention] pertains.” 35 U.S.C. § 103(a); Eli Lilly & Co. v. Zenith Goldline
Pharms., Inc., 471 F.3d 1369, 1377 (Fed. Cir. 2006); DyStar Textilfarben
GmbH & Co. Deutschland KG v. C.H. Patrick Co., 464 F.3d 1356, 1360 (Fed.
Cir. 2006). Underpinning that legal issue are factual questions relating to
the scope and content of the prior art, the differences between the prior
art and the claimed invention, the level of ordinary skill in the art, and
any relevant secondary considerations, such as commercial success, long-felt
need, and the failure of others. See Eli Lilly, 471 F.3d at 1377; DyStar,
464 F.3d at 1360; Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1164 (Fed.
Cir. 2006). Under Third Circuit law, which in this case dictates the
standard for reviewing the denial of the motion for JMOL, we review the
district court’s action “de novo by reapplying the JMOL standard” applied by
the district court. Seachange Int’l, Inc. v. C-COR Inc., 413 F.3d 1361, 1368
(Fed. Cir. 2005). Thus, in reviewing the denial of the JMOL motion on the
issue of obviousness, we examine the evidence in the light most favorable to
the verdict and determine whether a reasonable jury could have found all the
facts necessary to support the verdict of nonobviousness, i.e., whether
substantial evidence supports the verdict. See Caver v. City of Trenton, 420
F.3d 243, 262 (3d Cir. 2005); Connell v. Sears, Roebuck & Co., 722 F.2d
1542, 1546 (Fed. Cir. 1983).
Drinking KSR Kool Aid, a CAFC panel majority of Bryson and Prost applies hindsight delusion -
The defendants contend that the two patents in suit are invalid for
obviousness based on a combination of several prior art references. In such
a case, the burden falls on the patent challenger to show by clear and
convincing evidence that a person of ordinary skill in the art would have
had reason to attempt to make the composition or device, or carry out the
claimed process, and would have had a reasonable expectation of success in
doing so. See Medichem, 437 F.3d at 1164; Noelle v. Lederman, 355 F.3d 1343,
1351–52 (Fed. Cir. 2004); Brown & Williamson Tobacco Co. v. Philip Morris,
Inc., 229 F.3d 1120, 1121 (Fed. Cir. 2000); see also KSR Int’l Co. v.
Teleflex Inc., 127 S. Ct. 1727, 1740 (2007) (a combination of elements “must
do more than yield a predictable result”; combining elements that work
together “in an unexpected and fruitful manner” would not have been
obvious).
In view of the prior art references, the first part of that test is
plainly satisfied here. The idea of using cryopreserved cord blood to effect
hematopoietic reconstitution was not new at the time the inventors filed the
applications that matured into the ’681 and ’553 patents. Two of the prior
art references—articles by Ende and Knudtzon—suggest using cord blood for
that purpose. Two others—an article by Koike and a doctoral dissertation by
Vidal—suggest cryopreservation and storage of the cord blood until needed.
Accordingly, this is not a case in which there is any serious question
whether there was a suggestion or motivation to devise the patented
composition or process.
The more difficult question is whether the prior art would have given
rise to a reasonable expectation of success in creating the process claimed
in the ’553 patent and the composition claimed in the ’681 patent. In
addressing that question, the parties focus on whether the inventors had a
reasonable expectation that cord blood could be successfully used in
transplants for hematopoietic reconstitution.
The defendants argue that the prior art suggested using cryopreserved
cord blood for hematopoietic reconstitution and showed that persons of skill
in the field would have had a reasonable expectation that the use of cord
blood in transplants would be successful. For that reason, according to the
defendants, the asserted claims were obvious as a matter of law.
On the question whether the inventors had a reasonable expectation of
success, the district court relied principally on testimony by PharmaStem’s
expert, Dr. Irwin Bernstein… The problem with Dr. Bernstein’s testimony
about the prior art references is that it cannot be reconciled with
statements made by the inventors in the joint specification and with the
prior art references themselves.
Contrary to Dr. Bernstein’s contention that the prior art did not
disclose the presence of stem cells in cord blood, the inventors cited
several prior art references and stated flatly that “hematopoietic stem
cells have been demonstrated in human umbilical cord blood.” Moreover, the
inventors noted that the prior art references showed that the concentration
of stem cells in cord blood was “at a much higher level than in the adult.”
PharmaStem’s argument that stem cells had not been proved to exist in
cord blood prior to the experiments described in the patents is contrary to
the representation in the specification that the prior art disclosed stem
cells in cord blood. Admissions in the specification regarding the prior art
are binding on the patentee for purposes of a later inquiry into
obviousness. See Constant v. Advanced Micro Devices, Inc., 848 F.2d 1560,
1570 (Fed. Cir. 1988) (“A statement in the patent that something is in the
prior art is binding on the applicant and patentee for determinations of
anticipation and obviousness.”); Sjolund v. Musland, 847 F.2d 1573, 1577–79
(Fed. Cir. 1988) (patent specification admitted that certain matter was
prior art, and thus “the jury was not free to disregard [that matter]” and
“must have accepted [it] as prior art, as a matter of law”); In re Fout, 675
F.2d 297, 300 (CCPA 1982); In re Nomiya, 509 F.2d 566, 571 (CCPA 1975).
[The cited] collection of prior art shows (1) that bone marrow
transplants can result in hematopoietic reconstitution; (2) that cord blood,
like bone marrow but unlike adult blood, contains large numbers of
progenitor cells; and (3) that the high concentration of primitive
progenitor cells in cord blood suggests that in humans, as in mice, the
cells responsible for hematopoiesis migrate at about the time of birth from
fetal organs to the bone marrow. Under those circumstances, it was
reasonable for the inventors of the patent, like the authors of the prior
art references, to infer the presence of high concentrations of stem cells
in cord blood, even though the prior art studies did not offer conclusive
proof of their presence.
The majority conclusion is that the inventors did creditable research
confirming a previous suspicion, as contrasted with inventing something novel.
While the inventors may have proved conclusively what was strongly
suspected before—that umbilical cord blood is capable of hematopoietic
reconstitution—and while their work may have significantly advanced the
state of the science of hematopoietic transplantations by eliminating any
doubt as to the presence of stem cells in cord blood, the mouse experiments
and the conclusions drawn from them were not inventive in nature. Instead,
the inventors merely used routine research methods to prove what was
already believed to be the case. Scientific confirmation of what was already
believed to be true may be a valuable contribution, but it does not give
rise to a patentable invention. See KSR, 127 S. Ct. at 1732 (“Granting
patent protection to advances that would occur in the ordinary course
without real innovation retards progress . . . .”); Pfizer, Inc. v.
Apotex, Inc., 480 F.3d 1348, 1367–69 (Fed. Cir. 2007) (simply because the
formation and properties of a new compound must be verified through testing
does not mean that the compound satisfies the test for patentability “since
the expectation of success need only be reasonable, not absolute”); In re
Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (“Obviousness does not
require absolute predictability.”). Good science and useful contributions do
not necessarily result in patentability.
This court’s decision in In re O’Farrell, 853 F.2d 894, 903 (Fed. Cir.
1988), provides useful guidance for determining whether the expectation of
success from a particular line of inquiry is great enough to render a
resulting invention obvious. The court noted that obviousness “does not
require absolute predictability of success. Indeed, for many inventions that
seem quite obvious, there is no absolute predictability of success until the
invention is reduced to practice.” 853 F.2d at 903. On the other hand, the
court explained, an invention would not be invalid for obviousness if the
inventor would have been motivated “to vary all parameters or try each of
numerous possible choices until one possibly arrived at a successful result,
where the prior art gave either no indication of which parameters were
critical or no direction as to which of many possible choices is likely to
be successful.” Id. Likewise, an invention would not be deemed obvious if
all that was suggested “was to explore a new technology or general approach
that seemed to be a promising field of experimentation, where the prior art
gave only general guidance as to the particular form of the claimed
invention or how to achieve it.” Id.; see also Medichem, S.A. v. Rolabo, S.L.,
437 F.3d 1157, 1166–67 (Fed. Cir. 2006).
This case is not one in which “the prior art gave either no indication of
which parameters were critical or no direction as to which of many possible
choices is likely to be successful,” nor is it one in which the prior art
“gave only general guidance as to the particular form of the invention or
how to achieve it.” O’Farrell, 853 F.2d at 903. The prior art suggested
cryopreserving cord blood from a single infant and transplanting that blood
into a patient to achieve hematopoietic reconstitution… [T]he joint
specification indicates that each step of the cryopreservation and
transplantation procedure had been spelled out in the prior art.
PharmaStem focuses entirely on the purported novelty of its proof that
stem cells are present in fetal blood, a demonstration that Dr. Bernstein
testified was necessary to give transplant physicians sufficient confidence
in the use of cord blood for hematopoietic reconstitution to try the
procedure on humans. As we have explained, however, providing proof
sufficient to justify conducting in vivo procedures on humans, while useful,
is not a test of patentability. The evidence at trial demonstrated that the
patentees did not invent a new procedure or a new composition; instead, they
simply provided experimental proof that the cord blood could be used to
effect hematopoietic reconstitution of mice and, by extrapolation, could be
expected to work in humans as well.
The majority’s bottom line -
We affirm the district court’s judgment as to the infringement issues.
With respect to the counterclaim of invalidity for obviousness, however, we
reverse the judgment and direct the entry of judgment for the defendants.
Judge Newman bares her fangs in dissent.
After a three week trial the jury sustained the validity of these
patents, the district court in a thorough opinion upheld the verdicts of
validity, and validity was confirmed in three reexaminations by the Patent
and Trademark Office. Today my colleagues on this panel hold that the
inventions in the ‘681 patent and its continuation-in-part the ‘553 patent
are obvious to them, and not infringed.
The undisputed evidence at trial was that these long-sought life-saving
inventions were achieved amid general scientific skepticism, despite the
extensive research that was being conducted by many scientists in this
field, as set forth in the patents in suit. The discoveries of these
inventors were met with universal acclaim and widespread utilization,
including the founding of many commercial enterprises, all of which are
reported to have licensed the patents except for these defendants.
Unimpressed by these considerations, my colleagues on this panel now
reconstruct these inventions by selection and inference, with perfect
hindsight of the discoveries. The evidence at trial was that this
achievement eluded persons working in the field, despite speculation
concerning its potential and recognition of its value if it could actually
be achieved; despite the powerful interest in such a life-saving advance.
Instead, my colleagues simply reweigh selectively extracted evidence, ignore
the actual peer response and acclaim at the time these inventions were made,
and decide that this long-sought advance would have been obvious to this
court.
Although my colleagues manage to reconstruct this extensive scientific
effort as simple routine that is obvious to judges, the processes of
discovery in complex science make it particularly necessary to view the
achievement in the context of the knowledge at the time the invention was
made, and to judge it as it was judged by scientific peers at that time,
with the assistance of the hard fact of commercial success in a field in
which the need was great and success had long been eluded. See Graham v.
John Deere Co., 383 U.S. 1, 17-18 (1966) (”Such secondary considerations as
commercial success, long felt but unsolved needs, failure of others, etc.,
might be utilized to give light to the circumstances surrounding the origin
of the subject matter sought to be patented.”) (quoted in KSR International
Co. v. Teleflex Inc., 127 S. Ct. 1727, 1734 (2007)).
The panel majority scours the prior art for clues that could fit the
eventual achievement, and then rules that the achievement was obvious, no
matter that it eluded the others whose work is now compiled by this court so
as to invalidate these patents. The “prior art” selected by my colleagues
spans many years of scientific interest and effort, yet the ultimate
discovery of the presence of stem cells along with or instead of progenitor
cells, the successful preservation of these cells, the extensive
experimentation with transplantation into animal models and ultimately into
humans, and the successful hematopoietic reconstitution of blood that has
been destroyed by disease or radiation, was not achieved in the prior art.
The judicial determination of “obviousness” should be made in the context of
the state of knowledge at the time these inventions were made. Nor should
the courts lose sight of the powerful policy that underlies the patent law,
whereby recognition and protection of technological and scientific advance
is legally established in order to serve the public interest in having the
benefit of such advance through economic enterprise.
My colleagues ignore not only the scientific experts who testified at the
trial, but also the PTO examiners who conducted the three reexaminations. In
Dickinson v. Zurko, 527 U.S. 150 (1999) this court was reminded of its
obligation to give appropriate deference to agency expertise, including that
of the PTO. The references that are analyzed by the panel majority, in its
sua sponte finding of obviousness, were before the PTO for examination and
multiple reexaminations. My colleagues do not explain where the PTO went
wrong; instead, they rearrange the past, criticize the acclaim heaped on
these inventors, and propose that if the people in this field knew what this
court knows, they would not have been so impressed. To the contrary: the
acclaim sounded by even these defendants is a powerful testament to how this
invention was viewed.
The ultimate solution of a previously intractable problem can indeed
appear to become apparent in hindsight after the final successful step is
taken. Yet that final step in this case was not taken by those who came
before, and was clearly not “obvious” to contemporaries, who acclaimed the
achievement. Even the defendants’ expert witness acknowledged that before
the work of these inventors “stem cells could not be conclusively proved to
be present in cord blood.” Maj. op. at 42. Nonetheless this court rejects
the testimony and admissions of the defendants, and uses present knowledge
of the inventors’ success to find that it was obvious all along.
The significance of the inventors’ work was in evidence… Such evidence
assists in replacing judicial hindsight with objective determination as of
the time of the invention. See Vandenberg v. Dairy Equip. Co., 740 F.2d
1560, 1567 (Fed. Cir. 1984) (in “determining the question of obviousness,
inquiry should always be made into whatever objective evidence of
nonobviousness there may be”). In Graham v. John Deere Co, 383 U.S. 1,
17-18, 36 (1966) the Court counseled that “Such secondary considerations as
commercial success, long felt but unsolved needs, failure of others, etc.,
“serve to guard against slipping into use of hindsight and to resist the
temptation to read into the prior art the teachings of the invention in
issue,” cited in KSR v. Teleflex, 127 S. Ct. at 1734.
It is often far easier to recognize the problem than to find and
demonstrate the solution. The patent law recognizes that advances of great
power may be based as much on persistent and skilled investigation as on the
flash of creative genius, for both serve to transcend that which was
previously achieved. See 35 U.S.C. ‘103 (”Patentability shall not be
negatived by the manner in which the invention was made.”) My colleagues go
too far in limiting the patent system to the serendipitous and the
unexpected. Maj. op. at 35 (”while their work may have significantly
advanced the state of the science of hematopoietic transplantations by
eliminating any doubt as to the presence of stem cells in cord blood,” they
“merely used routine research methods to prove what was already believed to
be the case”). Further, these scientists not only established the presence
of stem cells, but also enabled their development for preservation and
hematopoietic reconstitution.
The court’s approach reflects misperception of the scientific process as
well as the patent purpose. Scientific methodology usually starts with a
hypothesis based on what is already known; the record shows that several
scientists mentioned the idea of rebuilding destroyed blood cells. However,
none achieved this long-sought goal, and the record shows the extreme
skepticism concerning even the possibility of this achievement. The district
court found that there was “tremendous skepticism in the transplant field
regarding the use of cord blood as a transplant tissue,” and that the jury
could have found that “prior to the inventions of the Patents-in-suit, those
in the field of hematopoietic reconstitution would not have expected cord
blood to be a successful transplant tissue.” Nonetheless, my colleagues deny
the value of this long-sought result.