No En Banc Consideration of Questions Related to "Unexpected Results" and the Definition of "Reasonable Expectation of Success"

Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc., 769 F.3d 1339 (Fed. Cir. Oct. 20, 2014) (en banc)

Federal Circuit denies rehearing en banc of a panel decision affirming an obviousness finding on a patent to a novel compound for treating hepatitis. The panel had relied on a prior art "lead compound" that was thought to be effective and safe at the time of invention based on in vitro testing but that, shortly after the invention, turned out to be toxic in animals and humans. The panel also dismissed other unexpected results as insufficient "mere differences in degree" rather than in kind.

Concurrence (Dyk, J., joined by Wallach, J.): These judges believed the panel correctly held that post-invention discovery of the prior art's toxicity could not be used to establish unexpected results because the text of section 103 confines the inquiry to the time of invention (or filing).

Concurrence (O'Malley, J.): Judge O'Malley believed the panel did not preclude consideration of later-discovered unexpected results in future cases. "The line of the [panel] opinion to which BMS and the amici refer simply notes that the inquiry into what one of skill in the art understood and reasonably expected must be fixed as of the time of the invention. It does not say only properties of the invention known at the time of the invention can be considered for purposes of informing that inquiry." Concur at 5. Moreover, although taking the panel's statement that a "mere difference in degree is insufficient" out of context "could lead to some confusion," its overall discussion showed one must consider and weigh all unexpected results. The bottom line was that the patentee's expert made too many damaging admissions to find non-obviousness: "Ultimately, a case is won or lost on the record." Id. at 10. Judge O'Malley agreed with the dissenters on the law but disagreed that the panel opinion was sufficiently at odds with it to warrant rehearing.

Dissent (Newman, J., joined by Lourie and Reyna, JJ.): Judge Newman objected to the panel's treatment of both post-invention evidence and differences in degree. "Precedent is clear that the information and comparative data presented as evidence of nonobviousness need not have existed before the patent application was filed." Dissent at 4. The panel's contrary rule creates a problem for applicants under the AIA's first-to-file regime because they must now decide between filing early to prevent losing priority or waiting so they can perform comparative testing to establish unexpected results. She also rejected a bright-line distinction between unexpected differences in degree and kind: "The stage at which an obvious difference in degree becomes an unobvious difference in kind if based on the particular subject matter." Id. at 12. Here, the difference between the toxic prior art and non-toxic invention was not a "mere difference n degree."

Dissent (Taranto, J., joined by Lourie and Reyna, JJ.): Judge Taranto believed the case worthy of en banc consideration to permit a fuller analysis, including "information that may bear on assessing the real-world consequences" in a way that a panel's fact-specific inquiry does not. Dissent at 4. He did not understand the panel to foreclose the propositions that: (1) unexpected results alone can support a finding of non-obviousness and (2) the "reasonable expectation of success" must be for "success in what motivated the investment in the research—an acceptable safety/efficacy profile for therapeutic use." Id. at 7. On the latter point, there was a "serious question" whether there was such an expectation here because the prior art included only in vitro experiments and amici cited data suggesting only a small percentage of such compounds ever make it to market. But BMS had not raised it, so "the panel decision cannot be taken to have resolved the issue." Id. at 9. In addition, the panel's decision "seems in tension with this Court's precedents" permitting reliance on post-invention evidence to show non-obviousness. Id. at 10. The language of section 103 does not prohibit reliance on such evidence—it establishes a hypothetical inquiry for the courts to elaborate on based the provision's history, purpose, and workability. Post-invention evidence may bear on whether there is a "reasonable expectation of success" depending upon how one defines both what is "reasonable" and the skilled artisan's hypothetical "expectations." Although the definitions of these terms are unclear, both KSR and the statutory policy suggest setting "a higher rather than lower standard for 'reasonable expectation.'" Id. at 14.