Three issues: Law/Fact Distinction in Obviousness; Envisaging the Invention; and Newman in Dissent

by Dennis Crouch

Incept LLC v. Palette Life Sciences, Inc., No. 21-2063 (Fed. Cir. Aug. 16, 2023) (Majority by Judges Schall and Taranto; Dissent-in-part by Judge Newman)

The most interesting line in the case for appellate attorneys (and legal scholars) is probably the court’s law/fact distinction in the context of obviousness analysis.  The majority wrote: “We see no reversible error … whether viewed as a factual one about the level of [commercial] success or a legal one about the weight of any such success in the overall obviousness analysis.”  The law/fact divide is important because of the evidentiary requirements in the first instance and the standard for review on appeal. Here, the court makes clear that the weight given to any objective indicia of non-obviousness is a question of law rather than a question of fact.  The result then is that its analysis can generally be based upon reason rather than evidence, and that issue is one that will be heard de novo on appeal.

The second issue of importance is as another data point in the forest-trees  anticipation analysis in situations where the prior art discloses thousands of potential embodiments.  The court has repeatedly held that such a reference is only anticipatory if a person of skill would have immediately envisaged the invention now being claimed.  In this case, the court took a relatively broad view of what constitutes anticipation — focusing on the level of specificity in the claims and guideposts such as the purpose of various elements in the claim.  In the end, the patentee lost and the claims were found invalid.

Finally, the case includes another dissent from Judge Newman.

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Incept’s patents cover a method for treating cancer that involves injecting a biodegradable filler gel prior to radiation treatment in order to increase space between the the tissue being treated and the closest body organs.  Afterwards, the gel biodegrades and so does not need to be removed. U.S. Patent Nos. 8,257,723 and 7,744,913.  Palette Life Sciences initiated IPR proceedings and the PTAB eventually found the challenged claims unpatentable as anticipated/obvious.  On appeal, the Federal Circuit has affirmed with Judge Newman offering a partial dissent. The dependent claims include various forms of the filler, such as thixotropic polymer, collagen, a polysaccharide, or hyaluronic acid.

Wallace discloses millions of possible compositions, and the patentee argued that the Board engaged in improper retrospective construction of the invention by picking and choosing various elements from the disclosure.  The idea then is that one skilled in the art could not have “at once envisaged” the various species claimed by Incept.  On appeal, the majority sided with the Board, holding that “Wallace expressly describes compositions that have the claimed characteristics of, and are used for the same displacement purpose as, the compositions referred to in the ’723 patent claims challenged as anticipated.”

Incept cannot use the fact that Wallace describes multiple compositions to evade an anticipation finding where Wallace provides “as complete detail as is contained in the patent claim,” such that a skilled artisan would have understood that Wallace’s compositions had the same generic properties as those in the ’723 patent claims.

In her opinion, Judge Newman took the majority to task for ignoring limitations in narrower dependent claims.

The majority appears to hold that, when the broader claim is anticipated, the dependent claims are automatically anticipated. That is not the law. Each claim must be considered as a whole, including all its limitations. . . . A generic prior disclosure does not anticipate all of its embodiments, including novel specific embodiments, whether or not the facts are such that the generic disclosure may render the embodiment obvious.

The problem with Judge Newman’s arguments here is that the patentee only barely argued the dependent claims, and the majority recognizes this at least to most of the dependent claims – noting that Incept had failed to provide specific arguments directed to those claims.

Other claims were found obvious by the PTAB and the majority again affirmed that holding. The patentee had provided evidence of commercial success — showing that most prostate cancer treatments in the US used an injectable  known as “SpaceOar” exclusively licensed from the patentee.  The Board refused to give any weight to the commercial success because the sales numbers provided included free and replacement versions, without accounting for those numbers.   In addition, the Board found the patentee’s expert testimony not credible and not supported by evidence.

Judge Newman’s dissent noted that “It is undisputed that the Incept product
experienced regular increases in annual commercial sales, and at the time of trial Incept had obtained 55% of the market for comparable products. Palette’s only criticism of Incept’s commercial information was that Incept also gave free samples. The majority now holds that Incept’s commercial sales cannot be considered as a measure of commercial success because some product was provided free of charge.”

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Independent claim 1 of the ’723 patent recites:

1. A method of delivering a therapeutic dose of radiation to a patient comprising

introducing a biocompatible, biodegradable filler between an organ and a nearby tissue to increase a distance between the organ and the tissue, and

treating the tissue with the therapeutic dose of radiation so that the presence of the filler causes the organ to receive less of the dose of radiation compared to the amount of the dose of radiation the organ would receive in the absence of the filler,

wherein the filler is introduced as an injectable material and is a gel in the patient, and

wherein the filler is removable by biodegradation in the patient.