Friday, March 25, 2011

Duramed vs. Watson: summary judgment of nonobviousness reversed

Duramed is the owner of U.S. Patent 7,320,969, and won
summary judgment as to nonobviousness before the district court.
This decision was reversed by the CAFC, so that Watson
gets another chance to prove obviousness.

The CAFC noted:

We agree with Watson that the district court erred in
its obviousness analysis and, as a result, incorrectly
granted summary judgment of nonobviousness. Specifi-
cally, the district court erred in assessing the content and
scope of the prior art, leading it to incorrectly analyze
each prior art reference in isolation without considering
the prior arts’ teaching as a whole in light of the creativity
and common sense of a person of ordinary skill. The court
also appears to have applied an incorrect evidentiary
standard on summary judgment. Finally, the court failed
to make any finding on the level of skill in the art.

A reference is prior art for all that it discloses:

A reference, however, is prior art for all that it
discloses, and there is no requirement that a teaching in
the prior art be scientifically tested, see PharmaStem
Therapeutics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1363-64
(Fed. Cir. 2007), or even guarantee success, see Alza Corp.
v. Mylan Labs., Inc., 464 F.3d 1286, 1295 (Fed. Cir. 2006),
before providing a reason to combine. Rather, it is suffi-
cient that one of ordinary skill in the art would perceive
from the prior art a reasonable likelihood of success. Id.

On motivation:

However, the question is not whether there existed a
consistent COC regimen in the art, but rather whether
one of ordinary skill in the art would have been motivated
to combine the Kovacs regimen with 7 days of low-dose,
unopposed estrogen with the reasonable expectation that
the addition of low-dose estrogen would successfully
reduce the incidence of estrogen-withdrawal headaches
during the hormone-free period.

KSR and common sense played a key role:

Accordingly, the district court failed to prop-
erly consider the collective teaching of the prior art in
light of the common sense and creativity of the person of
ordinary skill in the art. See KSR, 550 U.S. at 419-21.

Burden of proof was discussed:

The district court also appears to have applied an in-
correct evidentiary standard on summary judgment,
incorrectly placing the burden of proof on the nonmoving
party, Watson, to show clear and convincing evidence of
invalidity as a matter of law. In this case, Duramed
moved for summary judgment of nonobviousness, and
thus the burden rested with Duramed to show that Wat-
son had failed to come forth with clear and convincing
evidence of an essential element of its prima facie case of
obviousness. See Eli Lilly, 251 F.3d at 962. Although the
ultimate evidentiary burden of showing clear and convinc-
ing evidence does not change on summary judgment,
Watson could defeat summary judgment by showing a
genuine issue of material fact, which, if believed by the
finder of fact, could provide clear and convincing evidence
of a motivation to combine the prior art references. See
Freedman Seating, 420 F.3d at 1364; see also Monarch
Knitting Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d
877, 881 (Fed. Cir. 1998) (“If facts remain in dispute, this
court weighs the materiality of the dispute, i.e., whether
resolution of the dispute one way or the other makes a
difference to the final determination of obviousness.”).
That is the standard the district court should have made
clear it was applying on summary judgment.

Level of skill in the art:

A determination of obviousness requires a factual
finding of the level of ordinary skill in the pertinent art,
35 U.S.C. § 103(a); Graham, 383 U.S. at 17, which the
district court failed to make in this case.
When a finding
of the level of skill affects the court’s ultimate conclusion
under § 103, the failure to make such a finding consti-
tutes reversible error
. See Kloster Speedsteel AB v. Cruci-
ble Inc., 793 F.2d 1565, 1574 (Fed. Cir. 1986), overruled
on other grounds by Knoff-Bremse Systeme v. Dana Corp.,
383 F.3d 1337 (Fed. Cir. 2004). The district court granted
summary judgment of nonobviousness based on an un-
specified level of skill, but a finding of a higher level of
skill could have altered this ruling because, in general, an
invention may be more obvious to one of higher skill than
it might have been to one of lower skill. See Union Car-
bide Corp. v. Am. Can Co., 724 F.2d 1567, 1573 (Fed. Cir.

As to an expert:

Since a deter-
mination of obviousness is made from the vantage point of
a legal construct, a hypothetical person having ordinary
skill in the pertinent art, In re Rouffet, 149 F.3d 1350,
1357 (Fed. Cir. 1998), a person of extraordinary skill may
opine on the knowledge of this hypothetical person, see
Moore v. Wesbar Corp., 701 F.2d 1247, 1253 (7th Cir.
1983) (holding that an expert of “more than the ‘ordinary
skill’ required by the statute” was “well suited to assist
the court in deciding what would be obvious to such a
person”). Accordingly, Thomas’s credentials as a tenured
professor who actively participates in endocrinology
research do not disqualify him from opining on what an
ordinary person of lesser skill, whether a medical doctor
with less research experience or a nurse practitioner,
would have understood from the prior art.

On conclusory testimony:

Finally, contrary to Duramed’s claim, Thomas’s expert
testimony was not merely conclusory. He connected each
claim limitation with disclosures in the prior art, and his
opinion on a motivation to combine rests on factual sup-
port in the record. J.A. 823-26, 836-38; cf. Perfect Web
Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1331 (Fed.
Cir. 2009) (holding expert testimony insufficient to raise a
genuine issue of fact when it relied on irrelevant prior art
and failed entirely to address one claim limitation).
Accordingly, this testimony should not have been disre-
garded on summary judgment. See KSR, 550 U.S. at 427
(“In considering summary judgment on th[e] question [of
obviousness] the district court can and should take into
account expert testimony, which may resolve or keep open
certain questions of fact.”).

The Juicy Whip case is cited:

A decision to exclude evidence raises an issue not
unique to patent law, and thus we apply the law of the
regional circuit in which the district court sits, in this
case, the Ninth Circuit. Juicy Whip, Inc. v. Orange Bang,
Inc., 382 F.3d 1367, 1370 (Fed. Cir. 2004).

And, of the testimony:

The district court excluded Thomas’s testimony re-
garding his prior use of the claimed invention as uncor-
roborated in light of the “general rule” that “corroboration
of oral testimony regarding prior invention or use is
required before the evidence is admissible.” Duramed,
701 F. Supp. 2d at 1166-67 (citing Texas Digital Sys., Inc.
v. Telegenix, Inc., 308 F.3d 1193, 1217 (Fed. Cir. 2002),
and Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d
1368, 1371 (Fed. Cir. 1998)). Watson does not argue that
the testimony on prior use was in fact corroborated, but
rather argues that because Thomas’s testimony was not
the sole evidence of obviousness, it should not have been
excluded. Watson claims that although uncorroborated
oral testimony alone is insufficient to meet the clear and
convincing standard for invalidity, it may contribute to
the clear and convincing evidence standard when not the
sole evidence of invalidity.

Yet, Watson acknowledged that it was not relying on
this testimony to support either its opposition to summary
judgment or its prima facie case of obviousness. Oral Arg.
at 22:25-23:35. We therefore decline to decide to what
degree such evidence may or may not contribute to a
determination of obviousness by clear and convincing
evidence, concluding instead that Watson failed to meet
its “particularly high hurdle” to demonstrate that the
district court abused its discretion in excluding testimony
on prior use. Texas Digital, 308 F.3d at 1218.


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