Amarin: Did the court commit a procedural error when invalidating the Vascepa patents?
Zachary Silbersher
In the wake of the Nevada district court’s opinion on March 30, which invalidated Amarin’s patents for the Marine indication, we have received questions regarding whether the court committed a procedural error that may justify a reversal on appeal. I mentioned this issue in a parenthetical in our earlier post, but will address this issue in greater depth in this post.
The alleged procedural error committed by the district court appears to be framed as follows. To determine whether a patent is invalid, district courts are instructed to apply the four factors enunciated in the Supreme Court case, Graham v. John Deere. Those factors include: (1) the scope and content of the prior art; (2) the differences between the prior art and the patent claims; (3) the level of ordinary skill; and (4) secondary considerations.
In the course of invalidating the patents, the Honorable Miranda M. Du appears to have followed the following method: first, the court assessed whether the generics had made out a prima facie case of obviousness based primarily upon the prior art. In other words, Judge Du examined principally the first three Graham factors, and then concluded that a prima facie case of obviousness existed. After that, Judge Du next considered whether any of the objective indicia of non-obviousness, otherwise known as “secondary considerations,” outweighed that prima facie case of obviousness.
According to one argument, this method was legally improper. There is precedential caselaw from the Federal Circuit holding that it is improper for a district court judge to first make a preliminary determination regarding whether a patent is prima facie obvious before consideration of the secondary considerations. For instance, in In re Cyclobenzapine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063 (Fed. Cir. 2012), the Court held that secondary considerations should be “considered before making an obviousness determination and in disregard of where the burdens of proof and persuasion are properly placed in district court litigation.”
In Cyclobenzapine, the Federal Circuit faulted the district court for the manner in which it assessed obviousness. It held that, “[h]ad the district court, instead, considered the objective evidence in its entirety before making an obviousness finding, and considered that evidence in light of the actual burden imposed upon a patentee and a patent challenger, much of that evidence would have encouraged the district court to question the claim that the mere existence of an immediate-release formulation of cyclobenzaprine made an extended-release version that drug obvious.” Because of that, the Federal Circuit reversed the lower court’s holding that Cephlon’s patents were invalid.
So, given this precedent, the burning question is whether Amarin can reverse Judge Du’s decision on appeal simply by citing to Cyclobenzapine and pointing out Judge’ procedural error?
That is possible, but the Cyclobenzapine case has to be considered in a wider context to understand how it will play out before the Federal Circuit. Most importantly, there appears to be disagreement among the Judges at the Federal Circuit over whether it is improper for a district court to first determine that a prima facie case of obviousness exists before assessing secondary considerations.
For instance, in Federal Circuit opinions subsequent to the Cyclobenzapine case, the Court has rejected the methodology outlined in Cyclobenzapine. In Intercontinental Great Brands, LLC v. Kellogg North America Co., 869 F.3d 1336 (Fed. Cir. 2017), the Federal Circuit held that it was not improper for the lower court to first determine that a prima facie case of obviousness existed before considering secondary considerations (much like what happened in Amarin’s case.) The Intercontinental Court found that the district court did not make an “ultimate conclusion regarding obviousness” until after considering the secondary considerations, and the Court further found that this observation was not undermined by the district court’s reference to a “prima facie case” of obviousness before assessing those secondary considerations.
The Inercontintenal Court also cited to, and considered, the Cyclobenzapine opinion from five years earlier. Nevertheless, the Court in Intercontinental concluded that first determining that a prima facie case of obviousness exists before assessing secondary considerations is consistent with directives from the Supreme Court regarding the methodology that district courts must employ to deem a patent invalid as obvious. There are other cases, also subsequent to Cyclobenzapine, that did not find any procedural error in a district’s assessment of secondary considerations only after determining a prima facie case of obviousness exists. See, for instance, Merck Sharp & Dohme Corp. v. Hospira, Inc., 874 F.3d 724 (Fed. Cir. 2017). (We do not suggest that this is an exhaustive list of applicable precedential Federal Circuit cases on this particular issue.)
What this illustrates is that there appears to be a disagreement among the Judges at the Federal Circuit over whether a prima facie case of obviousness can be determined first before assessing secondary considerations, or whether all four Graham factors – including secondary considerations – must be considered collectively before any determinations are made. The Judges that have ruled in favor of the Cyclobenzapine approach appear to include Judges Newman, O’Malley and Reyna. Yet, in the Intercontinental decision, Judges Prost and Taranto made up the majority, whereas Judge Reyna dissented based on the reasoning articulated in the Cyclobenzapine decision. Thus, the brief outlines of a split within the Circuit have taken shape.
To put this into a different light, what appears to be happening here is that a small faction of Federal Circuit Judges believe that the methodology of obviousness has lost its way. They are calling for a return to a certain formalism within the method of assessing the disparate types of evidence that inform the obviousness determination. In response to that, a different faction of Judges have instead suggested that the method has not lost its way and this return to formalism is perhaps much ado about nothing. Notably, the Federal Circuit has to date resisted petitions to resolve this issue en banc. Until that happens, or until this issue reaches the Supreme Court, the split is likely to persist.
So what does this mean for Amarin? It means a few things. First, Amarin will most likely argue on appeal that Judge Du’s analysis was procedurally improper for the reasons articulated in Cyclobenzapine. Yet, given what appears to be a brewing split among the Judges over the methodology of assessing obviousness, Amarin’s chances of prevailing on this issue may boil down to the particular Judges that make up the panel presiding over its appeal. For better or worse, that is not something over which any of the parties to this case can control. (In a normal Federal Circuit appeal, the parties do not learn the make-up of the panel until they show up for oral argument, which is typically months after all briefs have been filed.)
Yet, there is another wrinkle to this issue. Even if Amarin were to theoretically score the best panel possible, namely the one sympathetic to the idea that it is improper for a district court to consider secondary considerations as rebuttal evidence to a prima facie case, that does not necessarily mean that Judge Du’s decision will be reversed, that the patents will be deemed valid and that Amarin wins.
For one thing, if the Federal Circuit holds there was a procedural error in the manner in which Judge Du assessed the evidence of obviousness, the Court may decide that that warrants remanding the case back to the district court to re-evaluate the evidence under the appropriate method. Given that Judge Du did, in fact, do a thorough examination of the secondary considerations, it is far from guaranteed that Judge Du would arrive at a different conclusion. Assessing a meaningful handicap on that outcome would likely require how this issue shakes out in the Federal Circuit’s remand decision.
Second, based on how the district court drafted its opinion, it is not necessarily clear that the Judge Du did not weigh the evidence of secondary considerations collectively with the first three Graham factors. Judge Du concluded the court’s opinion by stating that, “[f]or all the reasons discussed above, in view of all four Graham factors (including alleged secondary considerations), Defendants have proven by clear and convincing evidence that all Asserted Claims are invalid as obvious under 35 U.S.C.§ 103.” (Bench Order at 69). In addition, a close reading of Judge Du’s analysis of whether a prima facie case exists shows that the court did consider certain unexpected benefits (namely, no increase of LDL-C) in that prima facie analysis. (See Bench Order at 59-60). Put another way, the generics are likely to argue that, regardless of the correct method that applies, Judge Du satisfied it.
The Judges of the Cyclobenzapine decision reasoned that making a preliminary determination of prima facie obviousness before consideration of secondary considerations is improper because it treats secondary considerations as “rebuttal” evidence, and wrongly places the burden of proving patentability back onto the patentee (in this case, Amarin.) Yet, under the law of obviousness, the indisputable burden of “persuasion”—namely, the burden of convincing the court that the patents are obvious—should always remain with the challenger (in this case, the generics.)
Thus, to really succeed on this point, Amarin will likely have to demonstrate before the Federal Circuit that the manner in which Judge Du assessed the secondary considerations implicitly placed the burden on Amarin to show those secondary considerations proved patentability—when the real burden of persuasion, to prove invalidity, should have remained throughout on the generics. Exactly how Amarin will do that may require some artful lawyering because the face of the district court’s opinion does not necessarily smack of this error. (This is not, in any way, a critique or comment on Amarin’s counsel, nor a suggestion that they are not up to the task. Only that to harness the holding of Cyclobenzapine and marshal that law in Amarin’s favor may be a challenge given Judge Du’s lengthy opinion.)
All told, the Cyclobenzapine issue is likely to rear its head during the parties’ briefing to the Federal Circuit. It may indeed move the needle on Amarin’s success on appeal. However, that still requires several pieces falling into place. Some are within Amarin’s control; some are not.