Thursday, December 17, 2015

Judge Newman questions use of "substantial evidence" standard in CAFC review of PTAB decisions in Merck/Gnosis case

The CAFC finds that negating "teaching away" arguments can amount to
a showing of "reasonable expectation of success":

In a final challenge to the Board’s decision, Merck
complains that the Board never made an express finding
that a person of ordinary skill would have a reasonable
expectation of success in combining Serfontein and
Marazza, or in further combining Serfontein, Marazza,
and Ubbink. Under KSR International Co. v. Teleflex
Inc., 550 U.S. 398, 418, (2007), a factfinder’s analysis of a
reason to combine known elements in the art “should be
made explicit.” But KSR does not require an explicit
statement of a reasonable expectation of success in every
case. Cf. id. at 419 (cautioning against confining the
obviousness analysis using formalistic rules). Here, the
Board addressed Merck’s arguments against a reasonable
expectation of success in the context of its teaching away
arguments. By rejecting Merck’s argument that the prior
art taught away from combining Serfontein, Marazza, and
Ubbink, the Board impliedly found a reasonable expectation
of success. We decline to overturn the Board’s decision
for failure to state expressly that a person of ordinary
skill would have had a reasonable expectation of success.

One asks, is a negation of an argument that prior art "taught away" the same thing
as saying the prior art suggested a "reasonable expectation of success"?

Is negating a thought that something is bad the same as saying that the thing is

Judge Newman dissented in the case.

Her dissent began with a review of the AIA, including the text

It was believed that the PTO was granting patents too
easily, and that the courts were not consistently deciding
patentability issues. To attempt to remedy these deficiencies,
the America Invents Act created a new adjudicative
tribunal (the Patent Trial and Appeal Board or
PTAB) within the Patent and Trademark Office, and
established new procedures including changes in the
burdens of proof, limiting the path of judicial review, and
providing for finality and strict time limits. The purpose
is to restore an effective and balanced system of patents,
whereby valid patents may reliably be confirmed and
invalid patents efficiently invalidated.

An issue was the majority's use of the substantial
evidence standard:

Thus it is incorrect for this court, as the only reviewing
tribunal, to review the PTAB decision under the
highly deferential “substantial evidence” standard. Our
obligation is to assure that the legislative purpose is met,
through application of the statute in accordance with its
purpose. See Calvert Cliffs’ Coordinating Comm., Inc. v.
U. S. Atomic Energy Comm’n, 449 F.2d 1109, 1111 (D.C.
Cir. 1971) (“Our duty, in short, is to see that important
legislative purposes, heralded in the halls of Congress, are
not lost or misdirected in the vast hallways of the federal
bureaucracy.”). This court’s resort to deferential “substantial
evidence” review is at odds with the benefits that
Congress intended.

Judge Newman addresses the reasonable likelihood of success issue:

Marazza does not teach that L-5-MTHF is suitable to
treat elevated homocysteine, but only that it is an “active”
folate for treating folate deficiency. Amid the uncertain
predictability of biological response, this background does
not provide a reasonable likelihood of successful treatment
with any selected stereoisomer. Only hindsight
provides such prophesy.
The evidence of record does not support the PTAB’s
apparent assumption that any folate would be effective
against elevated homocysteine. No reference teaches that
L-5-MTHF has this activity. A prima facie case cannot be
based on the inventor’s successful investigations.


My colleagues find that “the PTAB impliedly found a
reasonable expectation of success,” observing that the
PTAB did not accept Merck’s argument that the references
“taught away” from Merck’s use. It is undisputed
that no reference taught Merck’s use. There was evidence
of instability and failures using the L-5-MTHF isomer in
folate treatments. No reference contains a suggestion to
use L-5-MTHF or expectation of success. Even Marazza
states only that there was “an increasing interest” in L-5-
MTHF. ’611 Patent, col.1, l.25.
The Court in KSR International Co. v. Teleflex Inc.,
550 U.S. 398, 421 (2007), in discussing the “obvious to try”
standard of obviousness, cautioned that something would
be “obvious to try” if “there are a finite number of identified,
predictable solutions” with “anticipated success.”
“The obviousness inquiry entails consideration of whether
a person of ordinary skill in the art ‘would have been
motivated to combine the teachings of the prior art references
to achieve the claimed invention, and . . . would
have had a reasonable expectation of success in doing so.’”
Insite Vision Inc. v. Sandoz, Inc., 783 F.3d 853, 859 (Fed.
Cir. 2015) (quoting Procter & Gamble Co. v. Teva Pharms.
USA, Inc., 566 F.3d 989, 994 (Fed. Cir. 2009)) (elisions in
original). Here, the purported “reasonable expectation of
success” came from the hindsight knowledge of these
inventors’ success.


In contrast, Gnosis provided references suggesting
that lower concentrations of reduced folates could produce
the same intracellular concentrations as folic acid. PTAB
Op. at 20-21. Whether or not these inconsistent teachings
are viewed as “teaching away” they do not teach toward a
reasonable likelihood of success.
The panel majority errs
in law, in stating that “the PTAB impliedly found a reasonable
expectation of success” based on the PTAB’s
finding of no “teaching away.” Such “implication” resides
only in the backward-looking eye of the beholder.

Newman notes:

The panel majority acknowledges that “although another
factfinder may have reasonably evaluated Merck’s
evidence of objective indicia of non-obviousness differently
in the first instance, the Board’s conclusion . . . is supported
by substantial evidence.” Maj. Op. at 17. This is
another illustration of the flaw in this court’s using the
substantial evidence standard, for the question before us
is whether the preponderance of the evidence supports the
PTAB’s decision.



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