“In the Celgene case, the panel actively discouraged safety by making it far easier to find virtually any safety-related invention obvious. What company is going to want to invest in R&D related to safety equipment or procedures when resulting inventions are going to be unpatentable or easily vulnerable to obviousness challenges?”
The case of Celgene Corp. v. Peter, Nos. 2018-1167 et al. (Fed. Cir. July 30, 2019) has drawn attention for its decision that inter partes review (IPR) may be applied to invalidate pre-AIA patents without running afoul of the Fifth Amendment’s prohibition of taking property without just compensation.
Matthew Rizzolo and Kathryn Thornton, among others, have addressed the constitutional aspects of the decision. I will address the lesser issues decided by the Federal Circuit panel before it could reach those constitutional aspects.
In particular, the Federal Circuit panel upheld the Patent Trial and Appeal Board’s (PTAB’s) conclusion that the claims in question were obvious. And, perhaps focusing upon the sparkling constitutional issue, the panel first had to address the mundane issues of obviousness; and in disposing of the obviousness issues, the panel set forth an analysis that is unclear at best and is in its present form arguably inconsistent with precedent and public policy.
The Facts of the Case
At the center of the story is the drug thalidomide, notorious for its history as a teratogen (an agent known to disturb the development of an embryo or fetus). Celgene developed a system that it called “S.T.E.P.S.,” short for “System for Thalidomide Education and Prescription Safety.” The purpose of S.T.E.P.S. was to safely distribute thalidomide to patients. Celgene’s ‘501 patent was directed to the “Original S.T.E.P.S.” scheme. Celgene subsequently “overhauled” the Original S.T.E.P.S. program to create what it called an “Enhanced S.T.E.P.S.” program. Celgene’s ‘720 patent was directed to the “Enhanced S.T.E.P.S.” scheme.
A total of four IPRs challenged Celgene’s patents, and the PTAB deemed all claims except one as obvious in view of multiple references.
The panel applied the proper deferential standard of review, upholding the PTAB’s fact-finding when supported by substantial evidence. There was, for example, substantial evidence that “it would have been obvious in light of the prior art to counsel male patients about the risks of fetal exposure to the drug,” even though the prior art in question pertained to risks observed in male rabbits. Moreover, there was substantial evidence that the evidence of obviousness was “strong,” in that it overcame evidence of secondary considerations that would indicate nonobviousness.
One of the secondary considerations raised by Celgene was evidence of “long-felt but unmet need.” Again, applying the deferential standard of review, the panel upheld the PTAB’s decision to give such evidence little weight. Celgene argued that the evidence ought to be given “significant, if not dispositive weight,” but the panel said it would not reweigh the evidence on appeal.
Conflating Long-Felt Unmet Need with Motivation
Celgene tried an intriguing argument, essentially saying that if there was no long-felt unmet need, there was no motivation. Celgene argued that it was inconsistent to say, as the PTAB did: (1) that that there was “no long-felt but unmet need for a better system to distribute potentially hazardous drugs like thalidomide in part because existing systems were available and adequate”; and (2) that “there was a motivation to improve existing distribution systems for potentially hazardous drugs because of the severity of the possible adverse effects.”
Celgene’s tactic immediately courted trouble, for several reasons. For one thing, the argument suggested that precisely the same evidence will necessarily cut in opposite directions, for evidence of motivation indicates obviousness, and evidence of long-felt but unmet need indicates nonobviousness. Also, the argument suggested that a patent owner that chooses to present considerable evidence of long-felt need (favoring nonobviousness) may find the patent owner’s own evidence being used against the patent owner as considerable evidence of motivation (favoring obviousness).
It ought to be clear, as matters of logic and practicality, that evidence of long-felt need cannot be exactly the same as evidence of motivation. There must be some distinction, and these considerations (though involving some similar issues) ought not to be conflated.
The panel did not buy Celgene’s argument that motivation and long-felt but unmet need are intertwined issues. “Contrary to Celgene’s assertion, this tension is not irreconcilable,” wrote the Court. “The fact that there is no long-felt, unmet need does not necessarily mean that there is no motivation to improve a system.”
This declaration is correct: the two issues are distinct and severable. It is also supported by a great deal of case law in which evidence of motivation is present, but evidence of long-felt need is not.
The panel, however, devoted little attention to explaining how the concept of motivation is distinguishable from long-felt need, and how each concept may be proven.
Instead, the panel took an unfortunate turn, saying: “Especially in this context involving safety, we see no conflict between finding a motivation to improve the safety of existing systems even though the existing systems were mostly successful.” Thus, though the existing systems seemed to be safe and there was no demand for this particular safety system (ergo, no long-felt need), there is always a need for safety improvements (ergo, motivation).
Is General Motivation Good Enough?
In order to get to the intriguing constitutional question, the panel found that the purported motivation identified by the PTAB was legally sufficient. The PTAB said: “[O]ne skilled in the art would understand that where significant safety risks exist with a drug, one would continuously search for safer ways to control the distribution of the drug. Put simply, where significant safety concerns exist, one of ordinary skill in the art would not wait until an accident occurred to seek out improvements.” In other words, that motivation basically was this: to improve safety, specifically where the consequences of less safety can be dire.
Celgene challenged the PTAB’s motivation as too “generic.” The panel disagreed. “The desire to decrease the risks of administering a drug with adverse side effects, like thalidomide, is a specific motivation to improve the prior art” (emphasis added).
This is a questionable ruling, for at least four reasons.
1. It Is Inconsistent with Precedent.
Prior to the Celgene case, precedent established that any rationale to combine elements from the prior art must be supported by evidence, and that the rationale must clearly and particularly point to the invention as claimed. See, e.g., Ruiz v. A.B. Chance Co., 234 F.3d 654, 660 (Fed. Cir. 2000) (appellate court instructs district court that the motivation must “clearly and particularly” lead one of ordinary skill in the art to make a combination). A specific suggestion to achieve the claimed invention must be shown; a general motivation does not suffice. See Amerigen Pharm. Ltd. v. UCB Pharma GMBH, 913 F.3d 1076, 1087-89 (Fed. Cir. 2019).
A general notion of “to improve safety” (or “to reduce risk”) does not meet the “clearly and particularly point to the invention as claimed” test, because it would not clearly direct one skilled in the art to the particular safety features or systems that are said to have been invented. The fact that the consequences of lesser safety or greater risk may be undesirable in the extreme—such as death or serious bodily injury—does not impart a motivation to improve safety in any particular way.
It is plainly not proper to say, “One skilled in the art would have had motivation to combine the elements the way the applicant did in order to get the benefit of the combination.” This is nothing more than tautology, and if this were a proper motivation, then virtually every claimed invention would be obvious. Similarly, it is not ordinarily permitted to say that “to make it better” is a sufficient motivation. This too would make virtually every claimed invention obvious. So, should “to make it safer” be sufficient? It should not, for it would make virtually every invention involving safety obvious.
2. Cited Authority Does Not Support It.
The panel cited case authority in support of its conclusion that safety “is a specific motivation to improve the prior art.” Neither cited case supports that proposition, however.
In Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358 (Fed. Cir. 2011), the Court observed that “a need in the prior art for safer utility lighters is not disputed.” That uncontested observation, however, did not resolve the issue at hand. Rather, the Court went on to discuss whether the solution and result were “predictable” in light of the modifications or adaptations required to put the prior art elements together.
The other case cited in support, Hologic, Inc. v. Minerva Surgical, Inc., 764 F. App’x 873 (Fed. Cir. 2019) does not stand for the cited proposition, either. In Hologic, the Court spent considerable effort describing the motivation, which involved considerations pertaining to the particular devices in question and which involved concerns in addition to safety. Like Tokai, Hologic did not hold that safety in and of itself is a sufficient specific motivation. It is also notable that Hologic is a nonprecedential case, and consequently ought not to have been cited in these circumstances. Exmark Mfg. Co. v. Briggs & Stratton Power Prod. Group, LLC, 879 F.3d 1332, 1346 (Fed. Cir. 2018) (a nonprecedential decision is not binding and should be read as limited to the particular claim and specification at issue in that case).
It is true that safety may be a proper consideration when evaluating motivation, and the cited authorities do so indicate. It does not follow, however, that the laudable goal of improving safety (without more) is legally sufficient to establish motivation to create a particular combination of elements.
3. It Creates a Disincentive to Safety.
The public policy favoring safety finds expression in many places in the law, but perhaps none as succinct as the Advisory Committee Notes to Federal Rule of Evidence 407. An “impressive” ground for exclusion of evidence of subsequent remedial measures “rests on a social policy of encouraging people to take, or at least not discouraging them from taking, steps in furtherance of added safety.”
In the Celgene case, the panel actively discouraged safety, by making it far easier to find virtually any safety-related invention obvious.
Safety is often a consideration for inventions in a number of technical fields, and safety often involves significant investments in research and development. Many inventions are specifically directed to issues of safety, and others involve safety tangentially or as a noteworthy benefit. Further, countless safety measures involve risks of serious personal injury or death, for that is in the nature of many safety measures.
If, as was the case in Celgene, the elements of the claimed invention are known, then a safety-related invention may be deemed obvious even in the absence of a motivation to arrange the elements in the way the claimed invention did. The panel, and the PTAB, ruled that the seriousness of the attendant risks (death or serious injury) would have been enough motivation.
Consequently, the Celgene case may effectively make many safety systems unpatentable. All that need be shown is that the elements were previously known, and that the invention is safety-related. If many safety systems are indeed unpatentable, then a major legal incentive to promote safety is vitiated, if not eliminated.
In the Celgene case, the panel created an additional disincentive to safety. “In fact,” said the panel, “Celgene stated that it was ‘committed to making the S.T.E.P.S. program succeed and will make any modifications to the program that are necessary to ensure its effectiveness.’” In other words, the panel specifically used the company’s own stated commitment to safety against the company.
It ought to be fair to ask: What company is going to want to invest in R&D related to safety equipment or procedures when resulting inventions are going to be unpatentable or will be easily vulnerable to obviousness challenges? What company will take a stand to promote general safety if its own statements will put its patent portfolio at risk? Such questions seemed to have escaped the attention of the panel.
4. It Is Unclear.
It is quite possible that the Federal Circuit, if pressed on the issues, would say: we overturned no precedent (or at least, we did not intend to do so); general safety does not always represent a sufficient motivation to combine elements from disparate references in a particular way; we did not intend to discourage safety advancements; and we do not approve using a patent owner’s stated devotion to safety against the patent owner.
If that is the case, then the opinion’s analysis of the issues ought to have been made much clearer.
The Constitutional Issue Should Have Been Avoided
Based upon the facts as outlined in the opinion, the outcome ought to have been different, with a nonconstitutional issue being dispositive. The panel should have ruled that, as a matter of law “to improve safety” (without more) is not a specific motivation that would have directed one skilled in the art to the particular safety features or systems that are said to have been invented. This would mean that there was insufficient motivation, and therefore, as a matter of law, obviousness was not established, and the PTAB’s decision ought to have been reversed.
Of course, that would mean that the constitutional issue would have to be reserved for another day, and perhaps for another panel.