Abstract
Introduction
In Galderma Labs., L.P. v. Tolmar Inc., 737 F.3d 731 (Fed. Cir. 2013), the US Court of Appeals for the Federal Circuit reversed a decision of the US District Court for the District of Delaware upholding patent validity, and held that the asserted claims of US Patent Nos. 7,737,181 (“the ‘181 patent”), 7,834,060 (“the ‘060 patent”), 7,838,558 (“the ‘558 patent”) and 7,868,044 (“the ‘044 patent”) were invalid as obvious. In so doing, the Federal Circuit concluded, in a 2-1 decision, that where a range is disclosed in the prior art and a claimed invention falls within the disclosed range, the “burden of production” falls upon the patentee to show a “teaching away” by the prior art, unexpected results or other indicia of nonobviousness. Id. at 737. Subsequently, the patentee petitioned for panel rehearing and rehearing en banc which was ultimately denied without comment.
The District Court
On September 14, 2009, Tolmar, Inc. (“Tolmar”) filed an Abbreviated New Drug Application (“ANDA”) for a generic version of Differin® (adapalene) gel. Galderma Labs., L.P. v. Tolmar Inc., 891 F. Supp.2d 588, 594 (D. Del. 2012). Tolmar’s ANDA included Paragraph IV certifications, pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV), stating that it was seeking approval to sell its generic product prior to expiry of the patents listed in the Orange Book with respect to Differin® gel because said patents were either invalid or not infringed. In response to Tolmar’s Notice of Paragraph IV certification, Galderma Laboratories, L.P., Galderma S.A., and Galderma Research and Development, S.N.C. (collectively, “Galderma”) sued Tolmar for infringement of the ‘181, ‘060, ‘558 and ‘044 patents. Id. At trial, held from 5–14 March 2012, Tolmar argued that certain of the asserted claims were invalid as anticipated, obvious or for lacking written description, that certain patents were unenforceable due to inequitable conduct and that certain parties lacked standing to file the suit. Id. at 595. Tolmar also contested infringement of certain claims. Id. On the last day of trial, Tolmar’s ANDA received tentative approval. Only a few days before the 30-month stay was set to expire on 10 June 2012 (at which time Tolmar would otherwise have been entitled to receive final approval), the District Court enjoined Tolmar from launching its product until the Court issued its decision. Id. The District Court then rendered its decision on 11 September 2012 and held that the asserted claims were infringed and not proven invalid and that the patents-in-suit were not unenforceable.
Invalidity
Obviousness
The District Court first turned to Tolmar’s obviousness argument. The Court summarized Tolmar’s obviousness argument as follows: … the asserted claims would have been obvious at the time of the invention because: (1) the use of 0.3% adapalene is presumed prima facie obvious since it falls within the 0.01% to 1.0% concentration range previously disclosed in Galderma’s own Shroot patents; and (2) a skilled artisan would have been motivated to triple the concentration of adapalene from 0.1% to 0.3% in view of the various prior art references concluding that adapalene was a well-tolerated compound with a favorable safety profile.
Id. at 637. The Court first noted that Tolmar’s obviousness analysis “substantially relies on a flawed legal framework recently rejected by the Federal Circuit.” Id. The Court further elaborated, stating that Tolmar’s central argument is that “because 0.3% adapalene falls within the 0.01%–1.0% range previously disclosed in Galderma’s Shroot patents, the claimed inventions are prima facie obvious.” Id. However, citing to In re Cyclobenzaprine Hydrochloride Litigation, 676 F.3d 1063, 1078 (Fed. Cir. 2012), the Court noted that the Federal Circuit had stated that the burden-shifting framework on which Tolmar relies – whereby a patentee must “rebut” or “overcome” a prima facie case of obviousness – is appropriate only in the context of patent prosecution. The proper analysis of obviousness under 35 U.S.C. § 103 requires that “all evidence relevant to obviousness or nonobviousness be considered, and be considered collectively,” without resort to presumptions of prima facie obviousness or burden-shifting.
Id. at 638. Thus, the District Court stated that it could not “presume that the selection of 0.3% adapalene would have been prima facie obvious to a skilled artisan” but rather had to analyze the totality of the prior art cited by the parties. Id.
Turning to the prior art, the Court noted that the Shroot patents disclosed “a general chemical formulation that ‘could result in hundreds, if not thousands, of different compounds’ to treat a broad range of diseases, in different dosage forms, administered in many different ways to the body, across a broad range of concentrations.” Id. at 603. The Court also found that a prior art study published by Galderma (e.g. “Verschoore (1991)”) suggested that “increasing the concentration of adapalene beyond 0.1% would result in significantly increased irritation.” Id. at 604. The District Court also took note that the Differin® 0.1% Gel Data Sheet – which was prior art to the asserted patents – stated in the Section on OVERDOSAGE as follows: “If the medication is applied excessively, no more rapid or better results will be obtained and marked redness, peeling, or discomfort may occur.” Id. at 607 (emphasis in original).
The Court thus found that “the broad and varied scope and content of the Shroot patents… does not, by itself, support a finding of obviousness. Indeed, when considered in view of the scope and content of the prior art as a whole, the Shroot patents weigh against a finding of obviousness….” Id. at 639. With respect to other prior art cited by Tolmar, the Court noted that “Tolmar overlooks meaningful differences between the [published studies] and the inventions of the asserted claims” (id.) and that other studies “indicate that 0.1% adapalene was selected as the standard or optimal concentration for the treatment of acne.” Id. at 640-41. Thus the Court concluded that the prior art did not provide a motivation to triple the concentration of adapalene from 0.1% to 0.3%. Id. at 638. The Court further noted that Galderma had offered persuasive evidence “demonstrating that the prior art taught away from the selection of 0.3% adapalene for the treatment of acne.” Id. at 641. Specifically, the Court pointed to prior art studies and found that “[t]he increased irritation observed when tripling the concentration of adapalene from 0.03% to 0.1% effectively taught away from again tripling the concentration from 0.1% to 0.3%, given the potential for further increased side effects.” Id. at 641-42. The District Court rejected Tolmar’s argument that the cited references could not, as a matter of law, “teach away” because they failed to “disparage or criticize the claimed invention,” noting that “[w]hile prior art that affirmatively criticizes or disparages the claimed invention can demonstrate teaching away, such evidence is not the absolute requirement Tolmar suggests.” Id. at 641, n.8.
The District Court also noted that “the comparable tolerability of 0.1% and 0.3% adapalene was unexpected in view of the prior art, since a skilled artisan would have expected that tripling the concentration of adapalene would have resulted in a clinically significant increase in side effects.” Id. at 642. Of note, Tolmar argued that “the tolerability profile of 0.3% adapalene cannot establish unexpected results because the profile represents, at most, a difference in degree, rather than a difference in kind.” Id. at 633 (internal citations omitted). The District Court disagreed, stating that “[i]n the Court’s view, the evidence does show a difference in kind rather than just degree. Whereas the prior art suggested a dose-dependent, clinically meaningful increase in side effects would result from increasing the concentration of adapalene from 0.03% to 0.1%, the claimed inventions achieved a difference in kind by discontinuing that trend.” Id.
The District Court also found that the commercial success of Differin® 0.3% gel in the marketplace despite the fact that it was a late entrant on the market and the fact that revenues from sales were not impacted by the introduction of a generic adapalene 0.1% in 2010 indicated that Differin® 0.3% gel is a commercial success. Id. at 616-17. In addition, the Court noted that “[t]he fact that Tolmar is seeking approval for its own generic form of 0.3% adapalene also indicates that Differin® 0.3% gel is a success in the marketplace. Id. at 617. The Court also concluded that the success of Differin® 0.3% gel is due to the patented features and benefits. Id.
Tolmar’s remaining invalidity and inequitable conduct arguments
The District Court quickly addressed Tolmar’s remaining arguments, finding that Tolmar had failed to prove anticipation, improper inventorship or lack of written description. Id. at 644-47. The Court agreed with Tolmar, however, that Galderma Laboratories L.P. lacked standing as a co-plaintiff as it had never obtained exclusive licensing rights to adapalene from Galderma S.A. Id. at 655. Accordingly, the Court dismissed Galderma Laboratories L.P. for lack of subject matter jurisdiction. Id.
With respect to Tolmar’s inequitable conduct argument, the Court found that Tolmar had failed to show either the required but-for materiality or intent to deceive. Accordingly, the Court rejected Tolmar’s inequitable conduct argument. Id. at 647-51.
Infringement
While Tolmar stipulated to infringement of many of the asserted claims, Tolmar maintained that its proposed ANDA product did not infringe claim 27 of the ‘060 patent under the doctrine of equivalents. Id. at 651-52. (Galderma stipulated that Tolmar’s ANDA products did not literally infringe claim 27 of the ‘060 patent. Id. at 652, n.23.) Claim 27 of the ‘060 patent is directed to a method of treating common acne by administering a composition comprising 0.3% adapalene as its sole active ingredient, carbomer 940, disodium edentate, methyl paraben, poloxamer 124, propylene glycol, sodium hydroxide and purified water. Tolmar’s proposed ANDA product was made with poloxamer 182 and not poloxamer 124. Thus, the parties’ dispute “turns on whether the poloxamer 182 in Tolmar’s proposed product is equivalent to the poloxamer 124 recited in claim 27….” Id. at 652. The Court quickly found that poloxamer 124 and 182 are equivalent in the context of the ‘060 patent because they satisfied all the prongs of the function-way-result test. Id. The Court noted that Tolmar did not seriously dispute that poloxamer 124 and 182 were equivalent under the function and result prongs. “Tolmar’s focus is on whether both poloxamers function in substantially the same way.” Id. However, the Court found that both poloxamer 124 and 182 “act as wetting/dispersion agents in substantially the same way, to ultimately achieve the same result.… While Tolmar highlights certain differences between poloxamer 124 and 182, those differences are insubstantial as they are irrelevant to both poloxamers’ function, way, and results in the context of Tolmar’s proposed ANDA product.” Id.
The Federal Circuit decision
On appeal, Tolmar challenged the District Court’s holding that the asserted patent claims were not proven to be invalid as obvious.
The Federal Circuit began its analysis by describing Tolmar’s obviousness argument as “both straightforward and potent.” Galderma Labs., 737 F.3 d at 736. The Federal Circuit elaborated, stating that “[t]he asserted claims are directed to 0.3% topical adapalene compositions for the treatment of acne, which fall within the concentration range disclosed in the Shroot patents.” Id. The Federal Circuit stated that “the sole dispute between the parties is whether it was obvious to use a 0.3% adapalene composition for the treatment of acne.” Id. at 737.
The Federal Circuit noted “an error in the district court’s obviousness analysis.” Id. Specifically, the Federal Circuit stated that “[t]he district court framed the obviousness inquiry as requiring Tolmar to provide motivation in the prior art to triple the concentration of adapalene from 0.1% to 0.3%. Tolmar carried no such burden.… Nothing in the statute or our case law requires Tolmar to prove obviousness by starting with a prior art commercial embodiment and then providing motivation to alter that commercial embodiment.” Id. (internal citations omitted). Rather, the Federal Circuit noted, that the dispute is whether there was motivation to select the claimed 0.3% adapalene composition in the disclosed range. In these circumstances, where there is a range disclosed in the prior art, and the claimed invention falls within that range, the burden of production falls upon the patentee to come forward with evidence that (1) the prior art taught away from the claimed invention; (2) there were new and unexpected results relative to the prior art; or (3) there are other pertinent secondary considerations.
Id. at 737-38. However, “[t]he ultimate burden of proving obviousness rests with Tolmar.” Id. at 738. While not citing specifically to the Cyclobenzaprine decision, the panel majority appears to have limited the effect of that decision by distinguishing between two different evidentiary burdens: the “burden of proof” and the “burden of production.” The panel majority appears to have adopted the position that the Cyclobenzaprine decision addressed only the “burden of proof” – which always resides with the party challenging validity. However, the panel majority implicitly found that the “burden of production” could be shifted to the patentee, as in the situation where the claimed composition was part of a disclosed range, as described above.
Turning to the first prong of the analysis, teaching away, the Federal Circuit accepted the District Court’s factual findings that the prior art taught that “increasing the dose of adapalene would result in a concomitant increase in side effects and that 0.1% was the optimal concentration of adapalene for the treatment of acne at the time of the invention. However, to the extent the court found that these facts taught away from the claimed invention, it clearly erred.” Id. Thus, the Federal Circuit disagreed with the District Court’s finding that the prior art taught away from the claimed 0.3% adapalene compositions for treatment of acne because “[a] teaching that a composition may be optimal or standard does not criticize, discredit, or otherwise discourage investigation into other compositions.” Id. at 739. That is, the panel majority held that for a reference to teach away from pursuing an avenue of research it must actually discourage one from following its teachings. Merely commenting on what might be better would thus not constitute teaching away.
The Federal Circuit then discussed the District Court’s findings with respect to unexpected results. While it agreed that the comparable tolerability of 0.1% and 0.3% adapalene compositions was unexpected, the Federal Circuit held that “it does not constitute an unexpected result that is probative of obviousness.” Id. The Federal Circuit explained, stating that “[i]n this case, the expected result was an increase, by some percentage, in the prevalence of certain side effects. The failure of that percent increase to materialize, though unexpected, constitutes only a difference in degree from prior art results [and accordingly] does not indicate that the asserted claims are non-obvious.” Id. Thus, the panel majority found that even though the difference between the concentration of adapalene in the two compositions was increased by 300% – a large and significant difference – the unexpected results (the lack of increased adverse side effects) were still viewed as only a difference of degree and not in kind and hence not sufficiently unexpected to be probative of nonobviousness.
With respect to commercial success, the Federal Circuit noted that “[t]he mere fact that generic pharmaceutical companies seek approval to market a generic version of a drug, without more, is not evidence of commercial success that speaks to the non-obviousness of patent claims.” Id. at 740. The Federal Circuit also noted that the sales of Differin® 0.3% gel were also of limited value for the obviousness analysis because “the Shroot patents blocked the market entry of 0.3% adapalene products until their expiration in 2010, long after Galderma invented 0.3% adapalene compositions of the asserted claims. As such, no entity other than Galderma could have successfully brought 0.3% to market prior to 2010.” Id. In other words, the panel noted that when a product is kept off the market by another patent, other than the one at issue, the nexus between the commercial success and the patent at issue is only of “minimal probative value.” Id. at 741. Accordingly, the Federal Circuit found that the District Court had “erred in adjudging this factor as confirming its conclusion of obviousness.” Id.
Accordingly, the Federal Circuit reversed the District Court’s holding that the asserted claims directed to 0.3% adapalene were not invalid as obvious in view of prior art disclosing a range of 0.01% to 1.0% adapalene.
Judge Newman’s dissent
Judge Newman dissented from the majority’s decision. While noting that “the question of obviousness here presented is a close call,” she noted that the panel gave “scant attention to the district court’s analysis, instead making their own findings and applying flawed procedural and substantive law.” Id. Specifically, Judge Newman maintained that “the majority presumes that the prior art establishes invalidity, and places on the patentee the burden of establishing patentability based on ‘secondary considerations.’” Id. That is, the majority did not “require the patent challenger to show any reason in the prior art (or common sense) for selection of [the specific] embodiment with its unexpected properties.” Id.
In her analysis, Judge Newman noted that “for close questions of patentability, the district court’s findings and assessments of credibility and weight of evidence, and the district court’s application of law to found facts, compel appellate attention.… [However, here] the panel majority does not provide clear and convincing evidence of invalidity.” Id. at 742.
Regarding commercial success, Judge Newman noted that My colleagues discount the factor of commercial success, arguing that the entry of 0.3% adapalene products, by Tolmar and others, had previously been blocked by the Shroot patents. However, the evidence in the district court was that the 0.3% product was successful against the 0.1% product and other acne medications. The district court did not err in including evidence of commercial success in its evaluation of the question of obviousness.
Id. at 747 (internal citations omitted). With respect to teaching away and unexpected results, Judge Newman noted that “[c]lear error has not been shown in these findings, all of which are discounted or ignored by the panel majority.” Id. at 748.
Regarding the burden of proof, Judge Newman stated that “[t]he district court, unlike the panel majority, correctly recognized that a prima facie showing is not a presumption of obviousness, and does not change the placement of the burden of proof.” Id. Specifically, Judge Newman articulated that Tolmar was required to provide clear and convincing evidence that the selection of 0.3% from within the broad range in the prior art was obvious in view of the entirety of the evidence. … The experts agreed at trial that the beneficial combination of properties of the 0.3% dose could not have been predicted in advance – indeed the opposite was predicted.
Id. at 749. Judge Newman further maintained that the majority “mentions but does not apply the presumption of validity” and that “[t]his is not just a shift in the burden of production; the majority never requires that Tolmar meet its burden of persuasion” because the majority did not require “that the prior art provide some reason for selection of the patented embodiment.” Id.
Judge Newman concluded her dissent by noting that the majority’s decision places “new obstacles in the path of improvement patents” which is of particular concern “now that the nation has adopted a first-to-file law with its pressures for early filing, possibly before all embodiments have been fully explored.” Id. at 750.
Accordingly, Judge Newman dissented from the majority decision.
Proceedings following the Federal Circuit decision
Galderma’s petition for rehearing and rehearing en banc
Galderma filed a petition for panel rehearing and rehearing en banc. Plaintiffs-Appellees’ Combined Petition for Panel Rehearing and Rehearing En Banc, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3d 731 (Fed. Cir. 2013). In its petition, Galderma argued that rehearing was required because the majority had “reversed a trial judge for following the procedure mandated by this Court’s Cyclobenzaprine decision.” Id. at 2 (emphasis in original). Specifically, Galderma argued that the majority applied “an extra-statutory, intermediate presumption of obviousness to improperly shift to the patentee the burden of proof on the obviousness issue… [in holding that] Tolmar satisfied its burden of demonstrating by clear and convincing evidence the obviousness of an issued patent solely because the claimed invention was encompassed within the broad range of an earlier, 1986-vintage prior-art disclosure.” Id. at 2-3 (emphasis in original). Galderma argued that the panel’s approach “is predicated on the flawed view that information once embodied in a publication remains immutably true for all time regardless of subsequent scientific developments and, as such, conflicts with numerous precedents.” Id. at 9. Indeed, Galderma argued that the majority came to its presumption of obviousness without any consideration of sixteen years of subsequent art (prior to the priority date of the patents at issue) that showed there was no motivation to make the claimed invention or the full scope of the 1986 disclosure itself. Id. at 10.
Galderma further argued that the majority’s holding could not be reconciled with Cyclobenzaprine where the Federal Circuit explained that “the concept of rebutting a presumption of obviousness – while useful during ex parte patent prosecution – is not applicable during a trial where the patent carries a presumption of validity.” Id. at 11 (emphasis in original; internal citations omitted).
Finally, Galderma argued that the majority had substituted its own judgment for the fact-finding of the District Court. For example, Galderma argued that the trial court had found that “the 300% increase in concentration that resulted in no meaningful difference in side effects was a difference in kind and not just degree” but that the majority had “rejected this factual finding without any determination of clear error.” Id. at 14.
Amicus brief of the Washington Legal Foundation
The Washington Legal Foundation (WLF) filed an amicus brief in support of Galderma’s petition. Brief of Washington Legal Foundation as Amicus Curiae in Support of Plaintiffs-Appellees’ Petition for Panel Rehearing and Rehearing En Banc, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3d 731 (Fed. Cir. 2013). In its brief, WLF stated that it was “concerned that the panel majority’s decision in this case singles out improvement patents in the medicinal arts by presuming such patents obvious and shifting the burden to the patentee at trial to prove otherwise…” Id. at 1. WLF stated that it “is concerned that this decision considerably reduces the incentive for innovators to develop improved medicines, and as a result, patients with disease will have fewer treatment options.” Id. Specifically, WLF argued that for improvement patents, “the majority’s decision establishes a presumption of
Furthermore, WLF argued that the panel’s decision conflicts with the Federal Circuit’s decision in Cyclobenzaprine by shifting the burden of persuasion on obviousness to the patentee. “While mentioning the accused infringer’s burden of persuasion, and purporting to merely shift the ‘burden of
WLF emphasized that “[f]rom the viewpoint of the market of physicians and patients, the innovative 0.3% adapalene formulation patented by Galderma meets a clear clinical need – one that might not have been met without the promise of a patent for Galderma’s innovation.” Id. at 7-8. Thus, WLF argued that “[d]epriving the incentive for this research means depriving patients and physicians of safer, more effective, and more convenient treatments.” Id. at 10. Accordingly, WLF urged that Galderma’s petition be granted.
Amicus brief of the Pharmaceutical Research and Manufacturers of America
The Pharmaceutical Research and Manufacturers of America (“PhRMA”) also filed an amicus brief in support of Galderma’s petition. Brief of Pharmaceutical Research and Manufacturers of America (PhRMA) as Amicus Curiae in Support of Galderma’s Combined Petition for Panel Rehearing and Rehearing En Banc, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3 d 731 (Fed. Cir. 2013). In its brief, PhRMA argued that by shifting the burden of production onto the patentee after the accused infringer had demonstrated the existence of a broad prior art range encompassing the claimed invention, the panel had acted contrary to the presumption of validity for issued patents. Id. at 4. PhRMA noted that unless corrected, this “improper burden-shifting approach will have sweeping consequences.” Id. Specifically, PhRMA argued that the majority’s analysis “effectively reverses the statutory presumption of validity in a broad swath of cases [and] substantially diminishes the incentive for researchers to pursue improvement inventions, which have greatly enhanced patient care for a variety of diseases.” Id. at 5. PhRMA also noted that The panel majority’s description of the patentee’s obligation as a “burden of production” does not avoid this problem. The burden of production is part of the overall burden of proof, and a party that fails to meet a burden of production will suffer the same consequences as if it had failed to meet any other part of the burden of proof.
Id. at 6, n.4.
PhRMA further argued that the majority “also applied an unprecedented and overly stringent standard to the evidence of nonobviousness that the patentee offered.” Id. at 7. Specifically, PhRMA argued that while the Federal Circuit had occasionally distinguished between differences in kind and differences in degree when evaluating unexpected results, “those cases stand for the unremarkable proposition that properties that follow a skilled artisan’s expectations are not actually unexpected.” Id. at 8-9. However, PhRMA continued, The standard applied by the panel majority is an unprecedented departure from those cases because it dismisses admittedly unexpected results simply because they deviate by some “percentage difference” from the expected result – even where that difference runs contrary to expectations. … The panel majority’s statement that modifying the prior art by a percentage is a matter of degree because it “is within the capabilities of one skilled in the art at the time,” says nothing about how those results compare with a skilled artisan’s expectations.
Id. at 9 (internal citations omitted). Moreover, PhRMA noted that “[i]n the pharmaceutical arts, where a percentage difference is often what separates toxic compounds from life-saving drugs, that rule would have a devastating effect – potentially depriving patients of many beneficial inventions.” Id. at 10.
Accordingly, PhRMA urged the Federal Circuit to grant Galderma’s petition.
Tolmar’s response to Galderma’s petition
After reviewing Galderma’s petition, the Federal Circuit invited Tolmar to file a response.
In its response, Tolmar argued that “[t]he panel’s decision is a straightforward application of the established framework for assessing obviousness to this case’s particular facts,” that it is consistent with the Federal Circuit’s Cyclobenzaprine decision, and that “Galderma and its amici fundamentally mischaracterize the panel’s decision.” Defendant-Appellant’s Response to Plaintiffs-Appellees’ Combined Petition for Panel Rehearing and Rehearing En Banc, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3d 731 (Fed. Cir. 2013) at 1. Tolmar initially noted that the panel’s decision “expressly does not shift the burden of proof to the patentee.” Id. (emphasis in original). Rather, “[t]he panel correctly concluded that Galderma is not entitled to 20 more years of patent coverage based on nothing more than the selection of a concentration of this same drug from within the previously patented range to treat the same disease.” Id. at 2 (emphasis in original).
Tolmar argued that the Federal Circuit did not dispute the District Court’s factual finding that “the post-Shroot prior art showed that increasing the concentration of adapalene from 0.03% to 0.1% resulted in increased side effects.” Id. at 4 (internal citations omitted). However, the Federal Circuit “disagreed with the district court’s legal conclusion regarding side effects.” Id. (emphasis added). Similarly, Tolmar argued that prior art establishing 0.1% adapalene as “optimal or standard” could not constitute a “teaching away” from the claimed 0.3% concentration because said art did not “criticize, discredit, or otherwise discourage investigation into other compositions.” Id. at 5 (internal citations omitted).
Tolmar further argued that contrary to the assertions of Galderma and its amici, the panel decision did not shift the burden of proof on the obviousness issue to the patentee. Id. at 6. Rather, the decision “expressly left the burden of persuasion always on the challenger, carefully noting that only ‘the burden of production falls upon the patentee to come forward with evidence’ of teaching away or secondary considerations of nonobviousness.” Id. (emphasis in original; internal citations omitted). Tolmar maintained that this is entirely consistent with the Federal Circuit’s decision in Cyclobenzaprine, as that decision “did not reject the notion that the burden of production falls to the patentee with regard to secondary considerations.” Id. at 7.
Tolmar also noted that this case was different from those cited by PhRMA in its amicus brief, as the cited cases involved the selection of a new species of chemical compound from a previously disclosed genus of compounds. Here, the adapalene compound was specifically disclosed and claimed in Galderma’s prior art patents. The “invention” simply involved the selection of a concentration within the range that Galderma’s patents had already taught was preferred for treating acne. Such “inventions” have long been held unpatentable.
Id. at 8 (internal citations omitted).
Tolmar further noted that the panel had left undisturbed the District Court’s factual findings regarding the unexpected comparable tolerability of the 0.1% and 0.3% adapalene concentrations. Id. at 12. However, the panel found that “undisturbed finding could not support nonobviousness as a matter of law because, as the panel explained, this sort of percentage variation amounted to a difference in degree, not in kind – and only the latter are probative of nonobviousness.” Id. (internal citations omitted).
Finally, Tolmar argued that “[n]o policy considerations support further review in this case” and that this case does not even implicate improvement patents, as argued by Judge Newman. Id. at 13. Rather, Tolmar argued that “[t]he panel correctly held that Galderma is not entitled to another 20 years of patent protection on the 0.3% concentration, simply by selecting a concentration of the same drug from within the range disclosed and claimed in its own Shroot patents to treat the same disease.” Id. at 14. Accordingly, Tolmar asked that Galderma’s petition be denied.
Tolmar’s motion for partial stay of the District Court’s injunction
On February 26, 2014, Tolmar filed a motion with the Federal Circuit asking that the District Court’s injunction be partially stayed. Defendant-Appellant’s Motion for a Partial Stay of the District Court’s Injunction and Expedited Briefing, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3 d 731 (Fed. Cir. 2013). Specifically, Tolmar asked that it be permitted to “engage in pre-launch manufacturing of its generic adapalene 0.3% product, but not to use, sell or offer for sale its product at this juncture.” Id. at 1. Tolmar argued that the limited stay would allow it to enter the market as soon as practicable. However, “[a]bsent a stay, Galderma’s unjustified monopoly for adapalene 0.3% will continue not only now, but well after the mandate issues [because it would take time for Tolmar to manufacture commercial quantities of its product for sale].” Id. at 2. Tolmar also requested expedited briefing on its motion. Id. at 3.
In its argument, Tolmar maintained that it had easily shown a strong likelihood of success on the merits as it had “already succeeded on the merits, and that success is unlikely to be undone.” Id. at 6. Furthermore, Tolmar argued that while it would be harmed by a ban on manufacture, “Galderma will suffer no harm for such a partial stay of the injunction.… And should the en banc court overrule the panel and hold Galderma’[s] patents not invalid, Tolmar will destroy any product produced.” Id. at 7 (emphasis in original).
Accordingly, Tolmar argued for a partial stay of the District Court’s injunction.
Galderma’s opposition to Tolmar’s motion
On March 11, 2014, Galderma filed an opposition to Tolmar’s motion. Plaintiff-Appellee’s Opposition to Defendant-Appellant’s Motion for a Partial Stay of the District Court’s Injunction and Expedited Briefing, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3d 731 (Fed. Cir. 2013). Galderma argued that “there is no indication that Galderma’s petition will be summarily denied… [and]… it simply does not make sense for this Court to prematurely judge the merits of Galderma’s petition under the guise of a motion to partially lift an injunction.” Id. at 3. Furthermore, Galderma argued that since it is Tolmar that wants to upset – not preserve – the status quo by gaining the ability to manufacture and stockpile quantities of generic adapalene 0.3% gel and thus commit actual infringements of the patents in suit under 35 U.S.C. § 271(a), it is Tolmar that must show that Galderma’s petition does not raise a substantial question on the merits.
Id. at 4-5 (emphasis in original). Galderma further argued that “Tolmar has completely failed to provide any evidentiary support for its assertions that it will be somehow harmed by waiting until the mandate issues in this case” and that its assertions were “belied by the manner in which it has proceeded during the appeal” since it “never moved to expedite briefing of the merits appeal or acted with any sense of urgency.” Id. at 6 (emphasis in original). Galderma further noted that while Tolmar alleges that it will destroy its manufactured product if Galderma were to ultimately prevail in this appeal, there is no corporate undertaking, guarantee, or court order mandating such an action. Tolmar’s attorney’s naked promise is hardly comforting to Galderma, given the enormous potential for damage that could be occasioned by a launch of a generic product.
Id. at 7. Accordingly, Galderma asked that Tolmar’s motion be denied.
Federal Circuit actions
On the same day that Galderma filed its opposition to Tolmar’s motion for a partial stay of the District Court’s injunction, the Federal Circuit denied Tolmar’s motion without comment. Subsequently, the Federal Circuit denied Galderma’s petition for rehearing and rehearing en banc and stated that the mandate would issue on 3 April 2014. Although the Federal Circuit did not elaborate on why it denied Tolmar’s motion for a partial stay of the District Court’s injunction, given the timing of events (where the denial of the petition for rehearing en banc issued less than three weeks after the denial of Tolmar’s motion), it is likely that the Federal Circuit realized that the mandate would issue shortly in any event and that there was therefore no need to lift the District Court’s injunction.
Motion to stay issuance of the mandate
On 31 March 2014, Galderma filed a motion with the Federal Circuit to stay issuance of the mandate. Plaintiff-Appellee’s Non-Confidential Motion to Stay the Mandate, Galderma Labs., L.P. v. Tolmar Inc., 737 F.3d 731 (Fed. Cir. 2013). In its motion, Galderma asked that the issuance of the mandate be stayed pending Galderma’s application to the Supreme Court for a writ of certiorari. Id. at 1. Galderma argued that its petition would raise a substantial question as to the correct allocation of the burden of proof in an obviousness analysis where a broad disclosure in the prior art encompasses the claimed subject matter. Id. at 3-5. If the mandate were not stayed, Galderma argued that it would be subject to “harm for which it could not be adequately compensated were Galderma to ultimately prevail at the Supreme Court.” Id. at 6.
Accordingly, Galderma asked that the issuance of the mandate be stayed.
On 2 April 2014, the Federal Circuit denied Gladerma’s motion. Judge Newman, however, indicated that she would have granted Galderma’s motion to stay the mandate. On 28 April 2014, Sandoz announced the launch of its generic version of Differin® (adapalene) gel, through its collaboration with Tolmar. See http://www.sandoz.com/media_center/press_releases_news/global_news/2014_04_28_differin.shtml
Petition for Writ of Certiorari
On May 7, 2014, Galderma filed a Petition for Writ of Certiorari with the Supreme Court. Petition for Writ of Certiorari, Galderma Labs., L.P. v. Tolmar Inc., 13-1350 (7 May 2014). In its petition, Galderma requested that the Supreme Court “address the direct conflict in precedent created by the instant case concerning the burden of proof in demonstrating obviousness under 35 U.S.C. § 103.” Id. at 1. Galderma further argued that instead of considering all the evidence in the record, “the panel’s majority held that the district court should have found that Tolmar satisfied its burden of establishing obviousness solely because 0.3% adapalene fell within the broad ranges of the 1986 vintage Shroot application.” Id. at 10 (emphasis in original). In doing so, the “panel’s majority thus held irrelevant the extensive evidence in the record showing that as of the filing date of the patents-in-suit, one of ordinary skill would simply not have tripled the dosage of adapalene and administered it to sensitive adolescent acne patients.” Id. (emphasis in original). In addition, Galderma argued that the District Court had applied the Federal Circuit’s holding in Cyclobenzaprine and had now been reversed. Thus, Galderma argued that “[g]uidance from this Court is sorely needed to avoid such disruptive uncertainty and resolve this conflict in the law.” Id. at 24.
On 9 June 2014, the Supreme Court denied Galderma’s Petition without comment.
Conclusion
The Federal Circuit decision in Galderma Labs., L.P. v. Tolmar Inc., 737 F.3 d 731 (Fed. Cir. 2013) found Galderma’s asserted claims obvious in view of a broad disclosure in the prior art that encompassed the subject matter of those claims. In so doing, the Federal Circuit found that the results presented by the patentee comparing the claimed 0.3% adapalene formulations with the prior art 0.1% formulations, while unexpected, were merely a difference in degree rather than in kind. Accordingly, a mere difference in degree (although unexpected) between a claimed concentration and another concentration – when both concentrations fall within a prior art range – might not be enough to defeat an obviousness challenge.