Did the CAFC err in footnote 4 of the Sanofi case, sinking the Schooner Peggy?

At issue in Sanofi v. Mylan:


Sanofi challenges the Board’s finding of a motivation to
combine the prior-art references to arrive at the claimed
glargine formulation with certain surfactants. Sanofi argues that
(1) KSR International Co. v. Teleflex Inc., 550
U.S. 398 (2007), required the Board to find that the prior
art disclosed an aggregation problem for glargine specifically (not just insulins in general);
(2) the Board improperly
relied on each patent’s own (shared) specification in finding
a motivation to combine; and
(3) substantial evidence does
not support the Board’s finding because key evidence cited
by the Board concerned insulins in general rather than
glargine specifically. The first two contentions assert legal
errors, the third evidentiary insufficiency. We address the
contentions in turn. We find each one unpersuasive.



Of interest is the Board's use of information in the
"background of invention" section:


Sanofi challenges the Board’s reliance on this material
as legally improper, invoking our longstanding recognition
that a tribunal should not “look[] to knowledge taught by
the inventor . . . and then use[] that knowledge against its
teacher.” Panduit Corp. v. Dennison Mfg. Co., 774 F.2d
1082, 1092 (Fed. Cir. 1985), vacated on other grounds, 475
U.S. 809 (1986); see also InTouch Techs., Inc. v. VGO
Commc’ns, Inc., 751 F.3d 1327, 1351 (Fed. Cir. 2014). But
the Board did not violate that principle, because it did not
use the specification for its teachings about the inventor’s
discovery. Rather, it used the specification for its teachings
about prior-art knowledge, and that use of a specification
is not just common, given patent drafters’ standard practice of reciting prior art
in setting out the background of
the invention, but permissible. E.g., Smith & Nephew, Inc.
v. Rea, 721 F.3d 1371, 1378–79 (Fed. Cir. 2013); PharmaStem Therapeutics,
Inc. v. ViaCell, Inc., 491 F.3d 1342,
1362 (Fed. Cir. 2007); cf. WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308,
1329–30 (Fed. Cir. 2018) (specification confirmed Board’s understanding of prior art in
anticipation context).



Of motivation to combine:


We further conclude that the Board’s finding of a motivation to combine
is supported by substantial evidence.
While the Board must provide “a reasoned basis” for its actions, “‘we will
uphold a decision of less than ideal clarity if
the agency’s path may reasonably be discerned.’” In re
NuVasive, Inc., 842 F.3d 1376, 1383 (Fed. Cir. 2016) (quoting Bowman Transp., Inc. v. Ark.–Best Freight System,
Inc., 419 U.S. 281, 285, 286 (1974)). The Board “must articulate a reason why a [relevant artisan] would combine
the prior art references.” Id. at 1382. And the finding of
such a reason must be supported by substantial evidence,
which is “such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Id. at
1380 (citation and internal quotation marks omitted); see
also Intelligent Bio-Systems, Inc. v. Illumina Cambridge
Ltd., 821 F.3d 1359, 1366 (Fed. Cir. 2016) (explaining that
review for substantial evidence “requires examination of
the record as a whole, taking into account evidence that
both justifies and detracts from an agency’s decision”) (citation and internal quotation marks omitted).
The Board’s findings with respect to the motivation to
combine are detailed and well supported. The Board found
that insulins “had a known tendency to aggregate in the
presence of hydrophobic surfaces” and at air-water interfaces and that a relevant artisan would have expected
glargine to behave similarly to other insulins when in contact with hydrophobic surfaces and at air-water interfaces.
Decision at *14. The Board also found that nonionic surfactants, including the claimed ones, were well known and
had been used successfully to stabilize insulin formulations, and so would have been looked to by a relevant artisan concerned about aggregation in glargine. Id. at *11–
12, *17. The record contains substantial evidence to support those findings.



Note footnote 4:


On November 5, 2019, Sanofi filed a letter with the
court asking the court to vacate the Board’s decision and
remand for reconsideration by a different Board panel under this court’s decision regarding the Appointments
Clause in Arthrex, Inc. v. Smith & Nephew, Inc., No. 2018-
2140, ––– F.3d –––, 2019 WL 5616010 (Fed. Cir. Oct. 31,
2019). We reject the request. Sanofi did not raise an Appointments Clause issue in its opening brief in this court
(or its reply brief). Our precedent holds that failure to raise
the Arthrex Appointments Clause issue in the opening brief
forfeits the challenge. Customedia Technologies, LLC v.
Dish Network Corp., Nos. 2018-2239, -2240, -2310, 2019-
1000, -1002, -1003, -1027, -1029, ––– F.3d –––, 2019 WL
5677703 (Fed. Cir. Nov. 1, 2019); Customedia Technologies,
LLC v. Dish Network Corp., No. 2019-1001, ––– F.3d –––,
2019 WL 5677704 (Fed. Cir. Nov. 1, 2019).



Judge Newman dissented, and discussed the use, by the Board,
of the patent specification:


The court holds that “The Board’s use of the patent
specification, we conclude, did not rest on legal error.” Maj.
Op. at 10. This is incorrect. The court’s ratification of reliance on
the inventor’s specification to invalidate the invention disclosed therein, is plain error. A patent
specification may be edifying and must be descriptive and
enabling, but it is not prior art. See Graham v. John Deere
Co., 383 U.S. 1, 36 (1966) (avoid the “temptation to read
into the prior art the teachings of the invention at issue.”).



Before even reading Judge Newman's dissent, IPBiz found "footnote 4" to be
problematic. Judge Newman cited Schooner Peggy, which case was covered
at UChicagoLaw:


My colleagues deny the motion, ruling that our recent
Customedia rulings establish that the Arthrex ruling cannot be applied to pending appeals, unless the appellant had
raised an Appointments Clause challenge in its principal
brief on appeal. Maj. Op. at 20 n.4. However, at the time
these appeals were filed, there was no holding of illegality
of appointments of the PTAB’s Administrative Patent
Judges. It is well established that when the law changes
while a case is on appeal, the changed law applies. Thorpe
v. Hous. Auth. of Durham, 393 U.S. 268, 282 (1969). “[I]n
great national concerns . . . the court must decide according to existing laws, and if it be necessary to set aside a
judgment, rightful when rendered, but which cannot be affirmed but in violation of law, the judgment must be set
aside.” United States v. Schooner Peggy, 1 Cranch 103, 110
(1801).



Judge Newman wrote:


Thus, Sanofi is entitled to the same benefit of the Arthrex decision as are the Arthrex parties. The foundation
of a nation ruled by law is that the same rules, as well as
the same law, will be applied in the same way to parties in
pending litigation.



[Footnote 4 was later corrected so that "decision" became "decisions."]