Galderma v. Tolmar & the Future of Selection Inventions
In the recent case of Galderma Labs v. Tolmar Inc., the Federal Circuit announced an important new rule for evaluating obviousness of selection inventions. The court also gave important guidance as to what constitutes “unexpected results” and “commercial success” when assessing objective evidence of non-obviousness.
Galderma manufactures Differin® Gel 0.3%, an anti-acne cream containing 0.3 wt% adapalene. Even before Galderma began selling 0.3 wt% adapalene cream, Galderma was selling a 0.1 wt% adapalene cream, also under the Differin® brand name. Although the 0.1 wt% formulation is now off-patent, the FDA’s Orange Book lists ﬁve patents covering Galderma’s 0.3 wt% formulation.
Tolmar, which manufactures a generic version of the 0.1 wt% adapalene cream, ﬁled an abbreviated new drug application (ANDA) requesting permission to manufacture a 0.3 wt% formulation. Galderma sued Tolmar for infringement, asserting claims covering both the pharmaceutical composition and methods of treating acne. A representative composition claim in U.S. 7,838,558 claims “[a] topically applicable pharmaceutical composition comprising 0.3% by weight of [adapalene]… formulated into a topically applicable… aqueous gel comprising at least one carbomer gelling agent…” Tolmar defended on the grounds that the asserted claims were invalid for obviousness. The district court held for Galderma on all counts, concluding that the asserted claims were both valid and infringed.
On appeal, Tolmar pressed its argument for obviousness, basing its case on three references: (1) U.S. 4,717,720 (‘720); (2) U.S. Re. 34,440 (‘440); and the data sheet for Differin® 0.1% Gel (data sheet). ‘720 and ‘440 are patents belonging to Galderma that previously covered the 0.1 wt% adapalene formulations. ‘720 reports that compositions containing adapalene “preferably between 0.01 and 1 weight percent, based on the total weight of the composition,” (col. 5, ll. 63 & 64) are useful for treating acne (col. 4, ll. 53–59). ‘440 claims compositions comprising a family of active ingredients of which adapalene is a member, wherein the “active ingredient is present in an amount ranging from 0.01 to 1 weight percent based on the total weight of said composition.” Both ‘720 and ‘440, prior to their expiration, were listed in the Orange Book as covering Differin® Gel 0.3%. The data sheet was cited simply to show that the carbomer gelling agents speciﬁed in the some of Galderma’s asserted claims were known in the art.
Galderma’s asserted claims require 0.3 wt% adapalene, which is a value lying within the 0.01–1 wt% range. This range was taught and claimed in the ‘720 and ‘440 patents. In other words, Galderma had made a “selection invention.” That is to say, Galderma had identiﬁed an optimal value within a broad range known in the art.
The Federal Circuit used this case to announce (slip op. at 9) a rather startling new rule governing the obviousness of selection inventions:
In these circumstances, where there is a range disclosed in the prior art, and the claimed invention falls within that range, the burden of production falls upon the patentee to come forward with evidence that (1) the prior art taught away from the claimed invention; (2) there were new and unexpected results relative to the prior art; or (3) there are other pertinent secondary considerations. [emphasis added]
As Judge Newman noted in dissent (slip op. at 3 & 4), this rule seems at odds with the 35 U.S.C. §282’s presumption of validity for issued patents, and the Supreme Court’s requirement that the burden lies with the one challenging the patent to prove invalidity by clear and convincing evidence. Cardinal Chem. v. Morton Int’l., 508 U.S. 83, 93 n.15 (1993).
Galderma made three arguments for the non-obviousness of its claims: (1) teaching away in the art; (2) unexpected results; and (3) commercial success. The panel majority made clear, however, that it will not be easy to satisfy any of the three means listed for patentee to meet its burden. For example, regarding the ﬁrst of these three options—viz. teaching away—Galderma argued that reports in the peer-reviewed literature had noted that 0.1 wt% adapalene was much more irritating to the skin than was 0.03 wt% adapalene. Therefore, one of ordinary skill would expect that 0.3 wt% adapalene would be even more irritating. Moreover, 0.1 wt% had been well recognized in the published literature as the “optimal” dose of adapalene. Galderma argued that these published reports would discourage one of ordinary skill from experimenting with a 0.3 wt% formulation. The Federal Circuit, however, turned this reasoning inside-out. The panel majority concluded (slip op. at 11) that if 0.1 wt% was regarded as “optimal” despite the fact that it was more irritating to the skin than 0.03 wt%, then, one of skill in the art would have no reason not to try to keep going, and increase the concentration beyond 0.1 wt%.
Galderma had also argued that it was unexpected that although the 0.3 wt% formulation is three times as potent as 0.1 wt% formulation, the 0.3 wt% formulation showed no additional skin irritation beyond that seen with the 0.1% wt% formulation. The panel majority was unimpressed with this discovery, characterizing it (slip op. at 12) as “a difference in degree, not kind.” This was not enough to constitute the sort of unexpected results that can overcome a conclusion of prima facie obviousness.
This seems a very harsh approach to evaluating unexpected results, because, as Judge Newman’s dissent notes (slip op. at 19), “[t]he holding that since skilled artisans were capable of adjusting the percentage, the product containing 300% more active ingredient, although unexpected in properties… is unpatentable… places new obstacles in the path of improvement patents…” (emphasis in original, internal quotations omitted). Judge Newman notes (Id.) that this “change of law… is particularly pernicious in the arts where small differences may have large consequences or beneﬁts,” such as pharmaceuticals, especially because “[a] skilled artisan will nearly always be ‘capable’ of adjusting a percentage of an ingredient; [but] this fact does not render unexpected results not probative of unobviousness.”
Finally, Galderma argued that the commercial success of its Differin® Gel 0.3% was objective evidence of non-obviousness. This seems a very plausible argument on its face. After all, 0.1 wt% adapalene was already off-patent, so the fact that the 0.3 wt% gel was able to gain market share in the face of generic competition from the prior art indicates that the 0.3 wt% formulation must possess especially beneﬁcial properties as compared to 0.1 wt% formulation. Such beneﬁcial properties have historically been the touchstone of non-obviousness.
The panel majority, however, was not convinced by this argument. They concluded that Galderma has not established the requisite nexus between the properties of the claimed composition and the commercial success. Speciﬁcally, the panel majority noted (slip. op. at 14) that Merck & Co. v. Teva Pharm., 395 F.3d 1364, 1377 (Fed. Cir. 2005) provides that where “market entry by others was precluded [due to blocking patents], the inference of non-obviousness of [the asserted claims], from evidence of commercial success, is weak.” The panel majority reasoned (slip op. at 14 & 15) that ‘720 and ‘440 “blocked the market entry of 0.3% adapalene products until their expiration in 2010, long after Galderma invented 0.3% adapalene compositions of the asserted claims,” and that therefore “no entity other than Galderma could have successfully brought to [sic] 0.3% to market prior to 2010.” Therefore, the panel majority concluded (slip op. at 14) that Galderma’s evidence of commercial success “is of limited value in determining whether… the presently asserted claims are obvious.”
The take away from this opinion is that the standards for evaluating the obviousness of selection inventions can be much harsher than for other inventions. As Judge Newman’s dissent notes, the rules articulated in this case are hard to reconcile with statute and applicable Supreme Court precedent. It is, therefore, uncertain whether this case will stand. It remains to be seen whether Galderma will seek reconsideration en banc or apply for a writ of certiorari.