Executive summary

This bench trial addresses patent validity and enforceability issues different from those considered in the jury trial. Lilly contends that the asserted claims of US 6,410,516 are invalid for including non-statutory subject matter, for being obtained through inequitable conduct, and are unenforceable due to prosecution laches.

Lilly argues, and of course Ariad disputes, that the claims cover unpatentable naturally-occurring phenomena, that Ariad withheld critical documents from the patent examiner not only to get the patent issued, but to avoid the risk of losing 13 years of patent term.

Of these, the patent term argument is the most compelling. In any case, particularly in light of the parallels with the Court of Appeals for the Federal Circuit decision in University of Rochester v. G. D. Searle et al., the likelihood that Ariad’s victory will survive the bench trial and the inevitable appeal(s) is low.

Ariad sued Lilly for infringing US 6,410,516, which is directed to therapeutic interventions to the NF-kB signaling system, and which was licensed to Ariad by Harvard and MIT. Litigation was divided into two portions. In the first, a Massachusetts jury found that Lilly infringed claims 80, 95, 144, and 145 of US 6,410,516, and that those claims were valid and enforceable. In the second, a bench trial in August addressed patent validity and enforceability issues different from those considered by the jury.

In the bench trial Lilly argued that the asserted claims of the ‘516 patent are invalid on one or more of the following grounds:

  • they claim non-statutory subject matter,
  • they were obtained through inequitable conduct (not conforming to the requirement of informing the PTO of information bearing adversely on patentability), and
  • they are unenforceable due to prosecution laches (unreasonable delay in obtaining the patent).

Non-statutory material

Patent statutes specifically proscribe patents drawn to natural phenomena, so a discovery in and of itself is not patentable. Discovery coupled with utility is patentable. So the argument here centers on whether Ariad’s patent claims more than a discovery of how NF-kB works in cells.

Lilly argues that since NF-kB pathway occurs naturally, as does an autoregulatory loop that reduces NF-kB activity, the Ariad claims to methods of reducing NF-kB activity are broad enough to cover a naturally-occurring phenomenon. In essence, Lilly argued that nature has been practicing the invention for eons.

Ariad denies those assertions, and argues that claim scope is a matter for the sections of the patent statutes that were involved in the jury trial but not here. Ariad further attacks the status of the autoregulatory loop as not demonstrated to exist in nature, disputes that it reduces NF-kB activity in any case, and asserts that its operation in nature does not meet the limitations of the claims because the ‘516 patent specifies that “natural” IkB is not to be used in the invention.

Ariad has a point that claim scope is not in and of itself is not relevant to the non-statutory material issue, but Lilly’s argument that the claims are broad enough to include naturally-occurring phenomena seems compelling.

Inequitable Conduct 

Inventors, patent attorneys, and others connected with the filing and prosecution of a patent application have a duty of candor to inform the patent examiner of information bearing adversely on the patentability of their application. Failure to do so constitutes inequitable conduct, and is grounds for rendering a patent unenforceable. Applicants need not disclose information that “is cumulative to” (i.e., repeats) information already before the examiner. Determinations of inequitable conduct require a balancing of materiality with intent, so that the more material the omission, the less intent need be shown (and conversely).

Debate here centers on the following:

  1. Figure 43 of the issued ‘516 patent, for which the specification supplies the caption “FIG. 43 is the nucleotide sequence and the amino acid sequence of IkB-a,” and
  2. Undisclosed references that purport to speak to the issue inherent anticipation. 

Figure 43

Lilly asserted that Figure 43 discloses only an incomplete sequence from a chicken protein called pp40, and lacks 56 amino acids that are necessary for it to bind NF-kB and thereby reduce NF-kB’s activity. Lilly argued that the partial sequence would not have worked in a method of reducing NF-kB activity, and thus the Ariad method as described in the application was inoperative. Lilly further asserted that Ariad knew about this, but did not disclose it to the examiner.

That omission is important because the patent examiner had rejected Ariad’s application for lack of an enabling disclosure and failure to describe the invention in sufficient detail to allow others to practice it, as required. Ariad responded to the examiner’s rejection by pointing out that the application described and enabled use of IkB and DNA encoding it.

Had Ariad disclosed the true nature of Figure 43, Lilly asserted, the examiner would almost certainly have maintained his final rejection of the application and thereby necessitated Ariad’s refiling of it to continue prosecution.

Here is the important part. During prosecution, to conform more closely to international practice, US patent law changed the term of a patent from 17 years from date of issuance to 20 years from date of the original filing. Ariad had been prosecuting this case (and its parent case) for 16 years (!); the case had grandfather status, but only if it were not refiled. The simple act of refiling would cost 13 years of patent term (causing the patent to expire on January 9, 2006, instead of June 25, 2019).

Lilly argued that that potential loss of term provided a strong motivation to Ariad not to disclose any irregularities with Figure 43 that could necessitate such refiling. In the balancing of materiality with intent (the latter being generally inferred from circumstances), such a substantial loss of term goes a long way to showing intent, thereby reducing the hurdle of materiality Lilly needs to show. Lilly further pointed out that Ariad informed the examiner of the Figure 43 situation in two related cases (where Ariad deleted the figure), but not in this one.

Ariad did not address the issue of patent term, but argued that it had informed the examiner of the Figure 43 situation in the related cases, and that doing so in this would therefore have been cumulative. Ariad maintained that the examiner had all of the relevant information to determine whether Figure 43 in fact disclosed IkB-a or not, and that in any case pp40 has subsequently been recognized as a member of the IkB-a family. Ariad further contended that any error was unintentional; even Lilly’s expert witness failed to notice the problem.

Ariad also asserted that, under the law as it existed at the time, a reasonable examiner would not have considered the references Lilly cites as material, and points to the jury verdict as validation for this view.

Disclosure of inherent anticipation references

Inherent anticipation means that others had practiced the invention, even though they hadn’t known it at the time, because through their actions they, of necessity, had to have practiced it. (For example, a method of obtaining a tan by exposure to the sun would be inherently anticipated by those working outdoors.)

The subtlety here is that Lilly could not simply argue that the asserted claims are inherently anticipated, because that issue has already been dealt with in the jury trial. (Whether the jury verdict stands up to appeal, however, is another question.)  Lilly instead argued that of whether the claims are in fact inherently anticipated, Ariad’s failure to disclose references that bear on that issue constituted inequitable conduct that invalidate the asserted patent.

According to Lilly, during prosecution, the family of applications to which the ‘516 patent belongs received numerous rejections from the PTO for inherent anticipation. Lilly contended that, during the pendency of the Ariad application, one of the co-inventors published papers reporting that various compounds – including one found in red wine – that had been used in the prior art inhibit NF-kB activity, and that the failure to disclose that information to the PTO constitutes inequitable conduct, which would render the entire patent unenforceable.

To support its assertion of the materiality of those references, Lilly points to the re-examination of the ‘516 patent, in which the PTO rejected the asserted claims on the grounds of inherent anticipation based in part on those references.

Ariad asserted that, during the ‘516 prosecution, the Manual of Patent Examination Procedure instructed examiners that inherency required “contemporaneous recognition” (i.e., that the missing descriptive matter is not only necessarily present, but also that it would be recognized by those of ordinary skill). Ariad argued that there was no contemporaneous recognition here, that no one recognized that any of the various compounds cited reduced NF-kB activity.

The inherent anticipation argument is complicated because two separate lines of cases conflict on the issue of “contemporaneous recognition,” with each side citing cases that favor its interpretation.

Overall, Lilly’s argument regarding the patent term is deadly.

With regard to the sufficiency of its disclosures to the PTO, Ariad seems to take conflicting positions. On one hand, Ariad argues that the examiner had the information available to determine the compare the sequences of Figure 43 and IkB and could have identified the differences, but on the other they argue that the difference was obscure enough that even Lilly’s expert failed to notice it. Surely they didn’t expect a busy examiner to check sequences for accuracy (anymore than one would expect analysts to check the addition on financial reports). That argument seems disingenuous, at best.

Prosecution Laches 

This is by far the weakest argument Lilly makes. Ariad appears to have been following a “submarine” patent strategy, i.e., temporize on patent prosecution to let industrial practice adopt the patented technology. In the course of the lengthy patent prosecution, however, the patent statutes were changed, vitiating that strategy. In any case, it is hard to imagine a court invalidating the patent on the grounds of prosecution laches.

This argument, while not without foundation, is unlikely to work.

Comparison with Court of Appeals for the Federal Circuit 2003 decision in University of Rochester v. G. D. Searle et al.

The University of Rochester asserted US 6,048,850 against Searle et al. in a case with many parallels to this one. If anything, claims in the ‘850 patent had more substance than those asserted here, since at least the ‘850 patent specified use of a class of compounds in its method of reducing a biological activity. Nevertheless, the Court of Appeals for the Federal Circuit affirmed the district court’s summary judgment holding the ‘850 invalid for failing to comply with the written description requirement of 35 USC 112 because it did not

provide any guidance that would steer the skilled practitioner toward compounds that can be used to carry out the claimed methods – an essential element of every claim of that patent – and has not provided evidence that any such compounds were otherwise within the knowledge of a person of ordinary skill in the art at the relevant time…

Ariad will be lucky indeed to have the ‘516 patent avoid a similar fate.

Today’s post comes from Guest Barista Stephen R. Cooper, Ph.D., an experienced registered patent agent at Patenting Strategy, LLC, a consultancy based in Carlsbad, CA.

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  1. How much longer does this judge have to come out with a decision?

    Is there some sort of timeline required in which the judge HAS to make a decision? This seems awfully long.

  2. I’m afraid that the judge can do whatever s/he wants — although a judge can get reprimanded if cases get out of hand.

  3. […] issues where Lilly contends that the asserted claims of US 6,410,516 are invalid for including non-statutory subject matter, for being obtained through inequitable conduct, and are unenforceable due to prosecution laches.  […]