In Dey, L.P. v. Sunovion Pharmaceuticals, Inc., No. 12-1428 (Fed. Cir. May 20, 2013), the Federal Circuit reversed the district court's grant of SJ of invalidity based on prior public use and remanded the case for further proceedings.

Dey, L.P., Dey, Inc., and Mylan, Inc. (collectively "Dey") and Sunovion Pharmaceuticals, Inc. ("Sunovion") own patents and sell products concerning the treatment of chronic obstructive pulmonary disease ("COPD") by the compound formoterol.  Shortly before Sunovion was to launch its commercial formoterol product, Brovana, Dey brought suit against Sunovion for infringement of patents in two of its patent families.

Sunovion moved for partial SJ of invalidity, arguing that a Sunovion clinical trial constituted a prior public use of Dey's inventions within the meaning of 35 U.S.C. § 102(b).  During the Sunovion clinical trial, participants took home and self-administered one of three batches of formoterol medication.  The participants in the trial were given the identity of the active ingredient, and signed consent forms stating that only the intended person would take the medication and that the study could be discussed with the participant's regular doctor.  The participants were not prohibited from speaking with others about the study.  The parties stipulated that one of the batches was identical to the Bronava formulation ("Batch 3501A"), and Sunovion conceded for purposes of the motion that the Batch 3501A composition fell within Dey's asserted claims.  One percent of the Batch 3501A vials were lost and not returned.  The district court granted SJ, agreeing with Sunovion that the clinical trial constituted a prior public use.  Dey appealed.

On appeal, the Federal Circuit disagreed with the district court, holding that Sunovion's clinical trial did not constitute clear and convincing evidence of a prior public use, and that a reasonable jury could return a verdict for Dey.  The Court stated it viewed the record differently than the district court on two fact-bound issues.
First, the Court did not agree that the use of Batch 3501A by the study participants was "indisputably open and free."  Slip op. at 8-9.  The Court explained that the loss of a tiny fraction of the thousands of Batch 3501A vials without penalty and the self-administration of the medication at home did not preclude a reasonable jury from concluding that the use of Batch 3501A was sufficiently controlled and restricted, rather than unfettered and public.

"Because a finder of fact could conclude that the study was conducted with a reasonable expectation of confidentiality as to the nature of the formulations being tested, summary judgment on the public use issue was inappropriate."
Slip op. at 11.

Second, the Court did not agree that the confidentiality obligations imposed in the study were "so loose" that SJ of invalidity was justified.  Id. at 10.  The Court noted that the participants were not in a position to reveal the composition of the medication even to their doctors, because the participants were given incomplete descriptions of the treatment formulation.  The Court explained that "the fact that no formal obligation of secrecy was imposed on the study subjects does not automatically transform Sunovion's clinical trial into a public use."  Id. at 11.  Instead, the question is "whether there were 'circumstances creating a similar expectation of secrecy.'"  Id. (quoting Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1382 (Fed. Cir. 2005)).  The Court held that "[b]ecause a finder of fact could conclude that the study was conducted with a reasonable expectation of confidentiality as to the nature of the formulations being tested, summary judgment on the public use issue was inappropriate."  Id.  The Court noted that the confidentiality controls in the study were not unique, and that courts had routinely rejected the argument that an arrangement like the one in the Sunovion study necessarily stripped the clinical trial of confidentiality protection or rendered it accessible to the public.

The Federal Circuit also concluded that the district court's decision was premised on several misconceptions about the reach of § 102(b).  First, the Court stated that the district court should not have looked to Dey's control of the clinical studies, because in third-party use cases, the third party is the one in control of the allegedly invalidating prior use.  The Court explained that "[b]ecause a secret third-party use is not invalidating, our task is to assess whether the third party's use was sufficiently 'public' to impose the section 102 bar."  Id. at 13.  Second, the Court stated that the district court should have taken into consideration whether the study participants knew or understood the contours of the prior art, because "a reasonable jury could conclude that if members of the public are not informed of, and cannot readily discern, the claimed features of the invention in the allegedly invalidating prior art, the public has not been put in possession of those features."  Id. at 15.  Third, the Court stated that the district court's statement that Sunovion was operating within the patent and regulatory system "may have resonated in a priority contest, but they ring hollow here."  Id.  The Court explained that "[t]he issue for purposes of this appeal is not whether Sunovion pursued the proper administrative channels in order to patent and develop its invention," but rather "whether Sunovion kept its use of Dey's inventions confidential."  Id.  at 15-16.  The Court concluded that "the only allegedly public use of Dey's invention occurred in the context of a closely monitored clinical trial, not in [the] filing of [Sunovion's] patent." Id. at 16.  Accordingly, the Court reversed and remanded the district court's grant of SJ of invalidity.

Judge Newman dissented from the Court's decision to remand the case, stating that she would reverse the district court's SJ and hold that the clinical trial did not constitute an invalidating public use of Dey's invention.  Judge Newman stated that "[n]o sound reason appears for remanding for findings or trial, when the matter is readily resolved on undisputed facts," and further that there was no reason "for casting judicial doubt on the standard confidentiality procedures of clinical trials, at this late date of decades of established practice."  Newman Dissent at 1.

Judges: Newman (dissenting), Bryson (author), O'Malley
[Appealed from S.D.N.Y., Judge Koeltl]

This article previously appeared in Last Month at the Federal Circuit, June 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.