SDNY Takes on KSR - And Finds Patent Obvious

McNeil-PPC, inc. v. Perrigo, Co., 05 Civ. 1321 (SDNY, June 5, 2007)

Since KSR, there have only been 3 published district court decisions that addressed the new standard of obviousness:

• Technology Licensing Corp. v. Gennum Corp., No. 01-04204, 2007 WL 1319528, at *18 n.38 (N.D. Cal. May 4, 2007)


• Smith & Nephew, Inc. v. Arthrex, Inc., No. 04-29, 2007 WL 1467228 (D. Or. May 17, 2007)


• Abbott Labs. v. Sandoz, Inc., No. 05-5373, 2007 WL 1549498 (N.D. Ill. May 24, 2007)

This week, the SDNY published a 4th and sweeping decision that invalidated J&J/Merc's U.S. Patent 5,817,340 which was related to the antacid "Pepcid Complete." An exemplary claim recites:

5. A method for manufacturing a solid oral dosage form comprising:

a) forming granules containing famotidine for the treatment of gastric disorder;

b) coating the granules with a coating impermeable to aluminum hydroxide or magnesium hydroxide to form impermeably coated famotidine granules;

c) mixing a therapeutically effective amount of aluminum hydroxide or magnesium hydroxide with a therapeutically effective amount of impermeably coated famotidine granules and pharmaceutically acceptable excipients to form a compression mixture; then

d) pressing the compression mixture to form a solid oral dosage form.

The evidence established that all of the limitations in the '340 patent were found in four different prior art documents. The patentee argued that it was improper to combine the teachings related to famotidine and antacids (which reduced the bitter taste). Alternately, the patentee argued that the prior art did not provide an apparent reason to combine an impermeable coating with antacid, since other alternatives existed at the time that were less expensive than an impermeable coating.

The district court disagreed, relying in part on statements the patentee made earlier to the FDA. With regard to the famotidine, the district court noted:

Plaintiffs contend that the composition at issue is the combination of famotidine and antacid, not famotidine alone, and that Perrigo has failed to show that the combination product has a bitter taste. Yet the NDA Plaintiffs submitted to the FDA for Pepcid Complete states: "Taste masking of famotidine is necessary in [the combination famotidine-antacid product] due to the bitterness of the drug substance." . . . Internal McNeil memoranda also indicate Plaintiffs' belief that famotidine has a bitter taste in the combination product . . . The record evidence therefore establishes that a skilled formulator would have reason to mask the bitter taste of famotidine even with the addition of antacid.

Regarding the impermeable coating, the court stated the following:

In the alternative, Plaintiffs contend that other modes of taste-masking are preferable to impermeable coating. Coated granules are "much more" expensive "than simply using flavorants and sweeteners." . . . Plaintiffs assert that because of this cost disparity, a skilled formulator would resort to coating only if a bitter taste remained after the addition of flavorants and sweeteners . . . Plaintiffs assert that in light of the alternatives, a person of ordinary skill would not have been motivated to use impermeable coating for taste-masking purposes.

This Court disagrees. Under KSR, "[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results." . . . The '340 patent does no more than combine the predictable results of Davis and Wolfe with the predictable results of the '072 and '1 14 patents. Of course, obviousness is not established "merely by demonstrating that each of [an invention's] elements was . . . known in the prior art," because "it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does." . . . But pre-KSR precedent refutes Plaintiffs' theory of non-obviousness, which is that the costs of the coating process would have dissuaded a skilled formulator from combining the references. "[T]he fact that the [prior art] would not be combined by businessmen for economic reasons is not the same as saying that it could not be done because skilled persons in the art felt that there was some technological incompatibility that prevented their combination. Only the latter fact is telling on the issue of nonobviousness." Orthopedic Equip. Co. v. United States, 702 F.2d 1005, 1013 (Fed. Cir. 1983).

KSR casts doubt on the continuing validity of Federal Circuit precedent on the issue of obviousness. The Supreme Court did suggest, however, that some Federal Circuit caselaw may have appropriately applied the broad conception of the teaching, suggestion or motivation test that the Supreme Court has endorsed . . . This Court perceives no conflict between KSR and the portion of Orthopedic Equipment cited above.

Interestingly, the patentee argued that an inventor's comments outside the four corners of the patent should be ignored, because, under KSR, "[t]he question is not whether the combination was obvious to the patentee but whether the combination was obvious to a person with ordinary skill in the art." The district court dismissed this argument as well:

The notion that contemporaneous admissions by the skilled inventor of the patent in suit must be ignored finds no support in any of the cited precedents, let alone KSR. "Common sense" dictates that if these admissions raise an inference of obviousness, then the patent is invalid under § 103.

Read/view the decision here (link).