Federal Circuit Reaffirmed Lead Compound Analysis for Evaluating Obviousness of a New Chemical Compound

James Jang

In Otsuka Pharmaceutical Co. v. Sandoz, Inc., 678 F.3d 1280 (Fed. Cir. 2012), the Federal Circuit affirmed the decision of the district court that the patent was not obvious based on prior art evidence, nor the asserted claims were invalid for nonstatutory double patenting.

The Defendants are drug manufacturers who submitted ADNA filings to the Food and Drug Administration (FDA) for an approval to manufacture, use, or sale of generic aripiprazole products. Otsuka Pharmaceutical Corporation brought action against the drug manufacturers for infringement of patent on the compound claimed in Patent No. 5,006,528, aripiprazole, an atypical antipsychotic compound approved by the FDA for the treatment of schizophrenia. The Defendants counterclaimed that the patent was invalid for obviousness and nonstatutory double patenting. The Federal Circuit analyzed three ‘lead compounds’ asserted by the Defendants, unsubstituted butoxy compound, 2,3-dichloro propoxy compound, and OPC-4392 compound. A ‘lead compound’ means “a compound in the prior art that would be most promising to modify in order to improve upon its … activity and obtain a compound with better activity.” Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.d 1350, 1357 (Fed. Cir. 2007). The patents which disclosed the lead compounds, unsubstituted butoxy and 2,3-dichloro propoxy, also disclosed numerous examples of agents useful for the central nervous system, including an antischizophrenia agent.

In its ruling, the Federal Circuit reaffirmed the lead compound analysis, employed in Takeda Chemical Industries and Eisai Co. v. Dr. Reddy’s Labs, 533 F.3d 1354 (Fed. Cir. 2008) for evaluating obviousness of a new chemical compound, which were the first two lead compound cases decided post-KSR. The Federal Circuit explained that the lead compound analysis consists of a two-part inquiry:

First, the court determines whether a chemist of ordinary skill would have selected the asserted prior art compounds as lead compounds, or starting points, for further development efforts . . . . The second inquiry in the analysis is whether the prior art would have supplied one of ordinary skill in the art with a reason or motivation to modify a lead compound to make the claimed compound with a reasonable expectation of success.

The Federal Circuit also noted that for the lead compound selection, mere structural similarity between a prior art compound and the claimed compound is not enough, but it should be guided by the compound’s “pertinent properties.”

Applying this approach, the Federal Circuit rejected the Defendant’s argument that the lead compound analysis applied by the district court was a “rigid” obviousness analysis precluded by KSR because the court assumed that only the most obvious choice could serve as a lead. The Federal Circuit found that after evaluating all of the potential choices available to one of ordinary skill the district court correctly determined that the compounds asserted by the Defendants, unsubstituted butoxy, 2,3-dichloro propoxy, and OPC-4392, would not have been selected as lead compounds. Furthermore, focusing on the pertinent property of the new compound, rather than the structural similarity, Federal Circuit found that two other compounds — clozapine and risperidone — were viable lead compounds because these were the only capable antipsychotic compounds at the time of the invention. The Federal Circuit concluded that the Defendants failed to prove that the patent would have been obvious under 35 U.S.C. § 103.

The ruling in Otsuka Pharmaceutical Co. might be seen as the Federal Circuit’s return to the “rigid” motivation rules precluded by KSR.1 However, It appears that the Federal Circuit attempted to avoid this concern by addressing that to keep with the “flexible” nature of the obviousness inquiry, “the reason or motivation for modifying a lead compound may come from any number of sources and need not necessarily be explicit in the prior art.” This is consistent with the rulings in the previous chemical compound cases after KSR, such as Eisai Co. v. Dr. Reddy’s Labs, where Judge Rader found that the decision in KSR for flexibility would not preclude the Federal Circuit from assessing motivation in the case. Thus, the post-KSR chemical compound cases may imply that the flexible motivation test is still viable.2

“Laundry List” of potential effects is not sufficient to prove the obviousness

The Federal Circuit also rejected the Defendants’ argument that the three lead compounds asserted by the Defendants were known to have antipsychotic activity so that the claimed compound, aripiprazole, would have been obvious to one of ordinary skill. The Federal Circuit found that the patents’ “laundry list” of the potential central nervous system controlling effects, would not have informed one of ordinary skill in the art that the three compounds would have antipsychotic activity.

Nonstatutory Double Patenting

The double patenting doctrine is a judicially created doctrine “precluding one person from obtaining more than one valid patent for either (a) the ‘same invention,’ or (b) an ‘obvious’ modification of the same invention.” In re Longi, 759 F.2d 887, 892. The latter is referred to as the obviousness-type double patenting. The Federal Circuit differentiated obviousness-type double patenting from obviousness under § 103 by addressing that when examining the obviousness-type double patenting in chemical compound cases, the earlier-filed application need not qualify as prior art and “the issue is not whether a skilled artisan would have selected the earlier compound as a lead compound.” However, the Federal circuit rejected the Defendants’ argument that the double patenting never requires identifying the motivation to modify the earlier claimed compound. The Federal Circuit noted that the identification of the reason for modification is an essential part of the question whether the two claimed compounds are “patentably distinct” in the obviousness-type double patenting analysis.

In concluding that the asserted claims were not invalid for obviousness-type double patenting, the Federal Circuit also noted that predictability is an important element to consider in the obviousness analysis. The Federal Circuit held that given the high degree of unpredictability in antipsychotic drug discovery at the time of the invention, “the prior art would not have provided a skilled artisan with a reason to make the necessary structural changes.”


1. Mark D. Janisal, Tuning the Obviousness Inquiry After KSR, 7 Wash. J. L. Tech. & Arts 335 at 344-45 (2012), available at http://digital.law.washington.edu/dspace-law/bitstream/handle/1773.1/1125/7WJLTA335.pdf?sequence=4.

2. Id. at 342-44.

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