Verifying what was already suspected to be the case “does not give rise to a patentable invention”July 10, 2007 The Federal Circuit yesterday issued a split opinion dealing with contributory infringement and post-KSR obviousness. The case involved two patents regarding hematopoietic stem cells collected from blood in the umbilical cord after the birth of a child. Such cells have shown promise in the treatment of blood-related disorders. The Federal Circuit held that the patents were obvious because the inventor's research just confirmed the opinions of the scientific community. This, according to the majority, while valuable to science, is not patentable. Judge Newman dissented for the second time in less than a week, asserting that the majority did not give sufficient weight to secondary indicia of nonobviousness, such as long-felt need, commercial success, failure of others, and unexpected results, and using hindsight to reconstruct the patented invention. More detail of Pharmastem Therapeutics, Inc. v. Viacell, Inc. after the jump. Pharmastem sued several defendants for infringement of two patents relating to cord blood hematopoietic stem cells. The defendants alleged both noninfringement and invalidity due to obviousness, anticipation, and indefiniteness. The case was originally decided by a jury, which determined by special verdict that there was infringement by the defendant and that the patents in question were valid. The district court, however, granted judgment as a matter of law (JMOL) in favor of the defendants, finding that the defendants did not infringe as a matter of law, but did not disturb the finding of no invalidity. The plaintiff appealed the JMOL, the defendant cross-appealed the denial of JMOL regarding invalidity of the patents. The Federal Circuit affirmed the finding of noninfringement, and reversed the finding of no invalidity, holding the patents obvious. Regarding infringement, the court found that liability under 35 U.S.C. § 271(c) requires that a defendant actually sell some product or good that contributes to the infringement. As stated by the court: Under the plain language of the statute, a person who provides a service that assists another in committing patent infringement may be subject to liability under section 271(b) for active inducement of infringement, but not under section 271(c) for contributory infringement. Because there was no such sale here, and because the plaintiff did not pursue a § 271(b) theory of inducing infringement before the district court, the finding of noninfringement was affirmed. The defendants also claimed that the invention was obvious. According to the majority, in order for a defendant to meet its burden to show a patent obvious, the defendant must show clear and convincing evidence that a person of ordinary skill in the art would have had reason to attempt to make the composition or device, or carry out the claimed process, and would have had a reasonable expectation of success in doing so. The majority had no trouble finding all elements of the invention in the prior art as well as a reason to combine them. "The more difficult question" was whether there would be a reasonable expectation of success. At trial, the plaintiff offered expert testimony that it was unknown in the prior art that stem cells were present in cord blood, and as a result it took "a leap of thinking that cord blood would [produce different results than adult human blood transplantations]." The majority found this testimony contradicted by the patent's specification, which stated that prior research had demonstrated the existence of stem cells. Because statements made in the specification are binding on the patentee when the validity of a patent is challenged, the majority discounted Pharmastem's expert testimony. Citing KSR, the majority found the invention to be obvious because "the inventors merely used routine research methods to prove what was already believed to be the case," as stated in the specification, and while "[s]cientific confirmation of what was already believed to be true may be a valuable contribution, . . . it does not give rise to a patentable invention." The court also rejected the contention that the jury's verdict of no invalidity could be supported by secondary indicia of nonobviousness. The court stated that the problem with the evidence of praise by the scientific community was "that there was no indication that the praise for the inventors' work was based on any inventive contribution they made, as opposed to their proof, through laboratory work, that fetal blood contains large numbers of stem cells." As a result, secondary indicia of nonobviousness also could not save the patents. Judge Newman, in dissent, disagreed on both infringement and invalidity, however her focus was on the majority's obviousness decision. Specifically, Judge Newman took issue with the lack of weight afforded to secondary indicia of nonobviousness, such the response of the scientific community and commercial success following the invention. Judge Newman argued that her "colleagues simply reweigh selectively extracted evidence, ignore the actual peer response and acclaim at the time these inventions were made, and decide that this long-sought advance would have been obvious to this court." While she did not contest the majority's finding that cord blood was known to contain the requisite cells, Judge Newman noted that, despite the knowledge in the field and considerable effort toward achieving successful transplant, success was not achieved until the work of the patentee. Citing to a section of KSR quoting Graham v. John Deere, she argued that the invention was not obvious, stating that: the processes of discovery in complex science make it particularly necessary to view the achievement in the context of the knowledge at the time the invention was made, and to judge it as it was judged by scientific peers at that time, with the assistance of the hard fact of commercial success in a field in which the need was great and success had long been eluded. Interestingly, Judge Newman also mentioned the Administrative Procedure Act and Dickinson v. Zurko, arguing that the prior art considered by the majority to render the inventions obvious was also considered by the USPTO during reexamination of the patents. As a result, she asserts, the majority did not give the required deference to "agency expertise" as required by Zurko. This ruling shows a new "gray" area regarding obviousness in post-KSR jurisprudence. The majority opinion expands the circle of obviousness to be inclusive of more inventions by placing great weight on an invention being the combination of known elements and lesser weight on the secondary indicia of nonobviousness from Graham. The dissent instead draws the circle of obviousness much closer, focusing more on the secondary indicia.. Until the case law further develops, inventors in this "gray zone" will be dealing with uncertainty as to the obviousness of their inventions. To read the full decision in Pharmastem Therapeutics, Inc. v. Viacell, Inc., click here. ← Return to Filewrapper