INTELLIGENT BIO-SYSTEMS, INC. loses its appeal against Illumina at the CAFC

Intelligent Biosystems [IBS} is the appellant in an appeal to the CAFC from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-00517 concerning Illumina's US Patent 7,566,537 .

The unsuccessful argument of IBS


Based on the teachings of
Tsien and Zavgorodny, IBS argued “that an ordinary
artisan, ‘to improve the efficiency, reliability, and robustness
of the sequencing by synthesis method taught in
Tsien, would have been motivated to use other protecting
groups that meet the criteria of Tsien, such as the azidomethyl
group taught by Zavgorodny.’” Id. (citation
omitted). In addition to contending that an ordinary
artisan would be motivated to combine these references,
IBS separately asserted that an ordinary artisan would
have a reasonable expectation of success in meeting the
limitations of the claimed invention by combining Tsien
and Zavgorodny. S



The Board and the CAFC sided with Illumina:



Illumina disagreed with IBS, and argued that an ordinary
artisan would not expect the azidomethyl group of
Zavgorodny to meet the specific criteria of Tsien or Ju. In
particular, Tsien requires “quantitative and rapid removal”
of the protecting group, which it understands “to mean
essentially 100% removal.” Intelligent Bio-Sys., Inc., 2015
WL 996355, at *5. Prior art of record, however, “demonstrates
that an ordinary artisan would have expected
Zavgorodny’s azidomethyl group to be removed at a much
lower efficiency than required by Tsien’s methods.” Id.
That prior art reference is known as Loubinoux. See J.A.
971–87 (Bernard Loubinoux et al., Protection of Phenols
by the Azidomethylene Group Application to the Synthesis
of Unstable Phenols, 44 TETRAHEDRON 6055 (1988)).
Loubinoux reports a 60–80% removal efficiency for azidomethyl
groups from phenols using triphenylphosphine.
Intelligent Bio-Sys., Inc., 2015 WL 996355, at *7, *10, *12;
J.A. 974–75. 60–80% removal is not quantitative removal
within the meaning of Tsien or Ju.
Ultimately, the Board credited Illumina’s argument
that, given Loubinoux, IBS “has not shown, by a preponderance
of the evidence, that an ordinary artisan would
have considered it obvious to use Zavgorodny’s azidomethyl
group as the 3′ hydroxyl protecting group in Tsien’s
processes.” Id. at *5.


The Board cited KSR:


(...) the requirement for a
reasonable expectation of success:
[A] conclusion of obviousness requires a reasonable
expectation of success:
When there is a design need or market
pressure to solve a problem and there are
a finite number of identified, predictable
solutions, a person of ordinary skill has
good reason to pursue the known options
within his or her technical grasp. If this
leads to the anticipated success, it is likely
the product not of innovation but of ordinary
skill and common sense. In that instance
the fact that a combination was
obvious to try might show that it was obvious
under § 103.
[KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421
(2007)] (emphases added).

As the Court of Appeals for the Federal Circuit
has explained, “[a]lthough predictability is a
touchstone of obviousness, the ‘predictable result’
discussed in KSR refers not only to the expectation
that prior art elements are capable of being
physically combined, but also that the combination
would have worked for its intended purpose.”
Depuy Spine, Inc v. Medtronic Sofamor Danek,
Inc., 567 F.3d 1314, 1326 (Fed. Cir. 2009) (citations
omitted).
Id. at *6. T



There were some procedural issues related to the reply brief
of IBS, including:


In this way, the Board found, IBS ran afoul of § 42.6(a)(3) by
improperly incorporating by reference arguments and
evidence from the expert declaration into the reply brief.



The CAFC did not endorse the Board's analysis of
"reasonable expectation of success"-->



The reasonable expectation of success requirement refers
to the likelihood of success in combining references to
meet the limitations of the claimed invention. “[F]ailure
to consider the appropriate scope of the . . . patent’s
claimed invention in evaluating the reasonable expectation
of success . . . constitutes a legal error that [is] review[ed]
without deference.” Allergan, 754 F.3d at 966
(emphasis added). Under the Board’s uncontested construction,
“claim 1 does not require removal of the protecting
group to allow subsequent nucleotide incorporation,”
let alone quantitative removal. Intelligent Bio-Sys., Inc.,
2015 WL 996355, at *4. Accordingly, it is of no moment
that Zavgorodny’s protecting group would not be removed
quantitatively in Tsien or Ju’s sequencing method—
removal is simply not required by the claim of the ’537
patent. The Board seemed to believe that the “reasonable
expectation of success” inquiry looked to whether one
would reasonably expect the prior art references to operate
as those references intended once combined. That is
not the correct inquiry—one must have a motivation to
combine accompanied by a reasonable expectation of
achieving what is claimed in the patent-at-issue. The
Board’s reliance on the absence of a reasonable expectation
of success was, thus, improper. See id. at *5–6 (citing
KSR, 550 U.S. at 421 to support the proposition “that a
conclusion of obviousness requires a reasonable expectation
of success”).



BUT, the Board's legal error did NOT merit reversal:



Yet this court “sit[s] to review judgments, not opinions.”
Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530,
1540 (Fed. Cir. 1983). And while the Board conflated two
different legal concepts—reasonable expectation of success
and motivation to combine—it nevertheless made
sufficient factual findings to support its judgment that the
claims at issue are not invalid. It was IBS’s burden to
demonstrate both “that a skilled artisan would have been
motivated to combine the teachings of the prior art references
to achieve the claimed invention, and that the
skilled artisan would have had a reasonable expectation
of success in doing so.” Kinetic Concepts, Inc. v. Smith &
Nephew, Inc. 688 F.3d 1342, 1360 (Fed. Cir. 2012) (quoting
Procter & Gamble Co. v. Teva Pharm. USA, Inc., 566
F.3d 989, 994 (Fed. Cir. 2009) (internal quotation marks
omitted)); In re Cyclobenzaprine Hydrochloride Extended–
Release Capsule Patent Litig., 676 F.3d 1063, 1068–69
(Fed. Cir. 2012). Despite the loose language employed by
the Board, its factual findings support its conclusion that
the claims are not invalid.



The end-result was accepted:


The Board, therefore, was justified in finding that,
“despite having acknowledged the quantitative deblocking
requirement in Tsien (Pet. 37), the Petition did not provide
a specific or credible explanation why an ordinary
artisan would have expected Zavgorodny’s azidomethyl
protecting group to meet Tsien’s quantitative deblocking
requirement under conditions suitable for use in Tsien’s
sequencing methods.” Intelligent Bio-Sys., Inc., 2015 WL
996355, at *8. While this shortcoming is irrelevant to a
finding that there was no reasonable expectation of success
in meeting the claims of the ’537 patent, which do not
require quantitative deblocking at all, it is central to a
finding of no motivation to combine. This is because the
petitioner’s sole argument for why one of skill in the art
would be motivated to combine Zavgorodny’s azidomethyl
group with Tsien’s SBS method was because it would
meet Tsien’s quantitative deblocking requirement. “When
an obviousness determination relies on the combination of
two or more references, there must be some suggestion or
motivation to combine the references.” WMS Gaming,
Inc. v. Int’l Game Tech., 184 F.3d 1339, 1355 (Fed. Cir.
1999); see also Dome Patent L.P. v. Lee, 799 F.3d 1372,
1380 (Fed. Cir. 2015) (“If all elements of a claim are found
in the prior art, as is the case here, the factfinder must
further consider the factual questions of whether a person
of ordinary skill in the art would be motivated to combine
those references, and whether in making that combination,
a person of ordinary skill would have had a reasonable
expectation of success.”).



The substantial evidence sandard was relevant:


There is, moreover, substantial evidence to support a
finding that a person of ordinary skill would not have had
reason to combine Tsien or Ju with Zavgorodny to achieve
the claimed invention.

(...)

These references support a
conclusion that the claimed efficiency that allegedly
motivated the combination would not be achieved and
that a person of ordinary skill in this field would not have
been motivated to use the azidomethyl group of Zavgorodny
as a “protecting group [that] can be modified or
removed to expose a 3′ [hydroxyl] group” of a nucleic acid
molecule, as the claim requires. This is so because the
azidomethyl group would have been expected to perform
inefficiently in that role.
IBS submitted an initial petition that articulated a set
of rationales for why the challenged claims were invalid,
including why a person of ordinary skill would be motivated
to combine the prior art references at issue. IBS
made a clear argument as to why a person of ordinary
skill would be motivated to combine the prior art references
at issue and Illumina demonstrated the error in
that argument, which the Board credited. This factual
finding by the Board is supported by substantial evidence.
The Board did not err in finding that the grounds of
invalidity described in IBS’s petition were not established.


Of the issues with the reply brief:


It is of the utmost importance that petitioners in the
IPR proceedings adhere to the requirement that the
initial petition identify “with particularity” the “evidence
that supports the grounds for the challenge to each
claim.” 35 U.S.C. § 312(a)(3). “All arguments for the
relief requested in a motion must be made in the motion.
A reply may only respond to arguments raised in the
corresponding opposition or patent owner response.” 37
C.F.R. § 42.23(b). Once the Board identifies new issues
presented for the first time in reply, neither this court nor
the Board must parse the reply brief to determine which,
if any, parts of that brief are responsive and which are
improper. As the Board noted, “it will not attempt to sort
proper from improper portions of the reply.” Office Patent
Trial Practice Guide, 77 Fed. Reg. 48,756, 48,767 (Aug.
14, 2012).



A worthwhile practice tip:


Unlike district court litigation—where
parties have greater freedom to revise and develop their
arguments over time and in response to newly discovered
material—the expedited nature of IPRs bring with it an
obligation for petitioners to make their case in their
petition to institute. While the Board’s requirements are
strict ones, they are requirements of which petitioners are
aware when they seek to institute an IPR.



And


In these circumstances, we
find that the Board did not err in refusing the reply brief
as improper under 37 C.F.R. § 42.23(b) because IBS relied
on an entirely new rationale to explain why one of skill in
the art would have been motivated to combine Tsien or Ju
with a modification of Zavgorodny.
Because we conclude that the reply brief and accompanying
declaration exceeded the scope of the reply under
§ 42.23(b), and, therefore, that the Board did not abuse its
discretion in excluding those documents, we need not
resolve whether the reply brief complied with 37 C.F.R.
§ 42.6(a)(3), which states that “[a]rguments must not be
incorporated by reference from one document into another
document.” See Intelligent Bio-Sys., Inc., 2015 WL
996355, at *9. Nor do we review the Board’s conclusion
that, even if proper, the arguments contained in the reply
brief are unpersuasive for the same reason it found the
arguments in the petition unpersuasive. Id. at *10.



link: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1693.Opinion.5-5-2016.1.PDF