Complex - Recently, several established principles of patent law have been questioned and reformulated by an active U.S. Supreme Court. The Court has redefined key areas of patent law, including easing the standard for finding patent obviousness and applying more rigorous requirements for enjoining infringing activity. Next term, the Supreme Court is set to address the patentability of method claims. Nor is the Supreme Court the only agent promoting widespread changes in patent law. After several years of hearings, the U.S. Congress seems poised to pass broad "patent reform" legislation and the Patent and Trademark Office has been seeking to impose rules that substantially modify patent prosecution procedure. The pharmaceutical industry has been among those most impacted by this shifting patent landscape.

The Supreme Court applies a "common sense" test for obviousness. A patent claim is invalid if it is "obvious"; i.e. the difference between the subject matter of the claim and the prior art (certain prior patents and publications) would have been obvious to a person of ordinary skill in the field at the time of the invention. Objective evidence, including commercial success and long felt need in the field, may also be considered.
In KSR v. Teleflex (2007), the Supreme Court rejected the prevailing rigid test for obviousness in favor of a more common sense approach; and modified the longstanding prohibition against equating "obvious to try" and obvious. If a person of ordinary skill, motivated by market pressure to solve a problem with a limited number of identifiable solutions, is successful pursuing one of the known alternatives, what was obvious to try will be found to be obvious. The different obviousness analysis has significantly affected the chemical arts, which had before KSR, generally been considered sufficiently "unpredictable" to defeat obvious to try arguments.
Post KSR, obviousness decisions focus on the particular facts of the invention - the motivation, potential solutions, and the expectations of success. Thus, an enantiomer of one compound may be found non-obvious because of the unpredictability of its biologic properties and ability to separate it (Sanofi-Synthelabo v. Apotex (Fed. Cir. 2008)); while another enantiomer may be obvious when motivation is found in the prior art suggesting that the enantiomer would be more potent and conventional separation techniques can be used (Aventis v. Lupin (Fed. Cir. 2007)).
To prove a drug formulation or compound is not "obvious to try", establishing the breadth of potential choices and the uncertainty of success is often key. If the inventor is the person of ordinary skill, the inventor's story on these may be determinative. In Pfizer v. Teva, the patent on a salt of the compound (chosen from 53 possibilities) was found obvious where there was commercial motivation to make a salt and the formulator testified that he expected to find a stable and effective one. In contrast, in Astrazenieca v. Apotex, Fed. Cir. 2008, the Court, relying on the multitude of possible formulations and noting testimony that the scientists tried a particular subcoating in an extended release tablet despite believing that it would not work, found an extended release formulation employing the subcoating non-obvious. Most recently, the Court in Bayer v. Barr, (Fed. Cir. 2009), finding that there were only two possible ways to formulate drospirenone (micronization or enteric coating), held the invention was obvious to try, notwithstanding Bayer's formulator did not try micronization for several years, believing that it would not work.

No Automatic Injunction

Reversing the general rule that infringement of a valid patent causes irreparable injury warranting a permanent injunction, the U.S. Supreme Court in Ebay v. MercExchange (2006) held that courts must consider each of the four standard factors in patent cases:

• 1) Irreparable injury;
• 2) 
Inadequacy of money
damages;
• 3) Balance of hardship; and
• 4) Public interest.

Although permanent injunctions are still routinely issued to the patentee when the parties are competitors, the outcome in pharmaceutical patent litigation is not always preordained. In doing their analysis, Courts weigh the public benefit of the availability of lower cost and/or more effective, albeit infringing, pharmaceuticals.
In a recent case, (Amgen v. Hoffman LaRoche), the District Court, aided by a special master and technical adviser, held a four day evidentiary hearing on the appropriate remedy. Initially, the Court considered entering judgment for ongoing royalties, capping the price of the infringing product, and having an independent agency monitor sales and royalty payments. Ultimately it issued a permanent injunction finding a lack of established superiority of the infringing product, sufficient supply of the patented drug, and uncertainty whether the infringing product would significantly lower costs. The Court did note that the importance of maintaining incentives to patent holders would likely outweigh cost reduction in balancing the equities. See also, Sanofi Synthelabo v. Apotex (SDNY 2007) (court issued permanent injunction against generic Plavix, finding the public interest in reduced price drugs is "in equipoise or slightly" outweighed by encouraging investment in research and development of new drugs). Detailed economic analysis of loss of market share, goodwill, and benefits from future research are important parts of the analysis. Whether public policy considerations about low cost drugs will be determinative remains to be seen.

The Supreme Court's Review of
Business Method Patents

In June, the Supreme Court agreed to review In re Bilski, holding business method patent claims must be tied to a particular machine or apparatus or transforms a particular article into a different state or thing to be patentable subject matter. But its potential scope is much broader. In re Bilski was cited by a decision invalidating claims to a method of immunization in accordance with a schedule that lowers the risk of chronic disorders (Classen Immunotherapies v. Biogen Idec (Fed. Cir. 2008), and claims to informing the patient that the drug is more efficacious when taken with food (King Pharmaceuticals v. Eon Labs (EDNY 2009)). But in Prometheus Labs v. Mayo Collaborative Services (Fed. Cir. 2009), the court found patent claims to methods for calibrating the proper dose of thiopurine drugs met the transformation prong, and reversed the lower court's invalidity decision. The Supreme Court in In re Bilski will likely address two areas of interest in the pharmaceutical area; the patentability of method of treatment claims and claims that are invalid as claiming fundamental principles and natural phenomenon.

Changes Waiting to Be Enacted

The disruption to settled doctrine posed by the Supreme Court decisions discussed above, along with the other decisions from the Court expanding the ability of potential infringers' licensees to challenge patents and the patent exhaustion doctrine, has created uncertainty about the ability to obtain and enforce patents. Adding to this uncertainty are Patent Office rules that would among other things cap the number of independent and dependent claims in a patent application (the subject of a pending litigation challenging the rules now on hold awaiting direction from the new Director of the PTO), and legislation in Congress that addresses many areas including allowing additional patent challenges in the Patent Office after the patent issues. The FTC has begun hearings to generate the next set of proposals for change.