IP Law Daily, PATENT NEWS—Supreme Court denies Vanda’s request to review Federal Circuit’s obviousness standard, (Apr 23, 2024)

By Linda O’Brien, J.D., LL.M.

The petitioner argued that the Federal Circuit’s test for obviousness could render many advancements in drug development unpatentable and patent-based incentives are crucial for innovators to invest the money required to develop new and successful drug treatments.

The U.S. Supreme Court on April 22 denied a request by drug manufacturer Vanda Pharmaceuticals to review a decision by the Federal Circuit, which affirmed the district court’s finding that Vanda’s patents were invalid as obvious because the claim limitations were taught by combinations of prior art references, including Vanda’s clinical trials, and an ordinarily skilled artisan would have a “reasonable expectation of success” in reaching the resulting invention. The petition for certiorari in Vanda Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc., Dkt. No. 23-768 was filed January 12, 2024.

Biopharmaceutical manufacturer Vanda Pharmaceuticals, Inc. developed Hetlioz, a drug that uses tasimelteon, which was approved by the FDA for treating Non-24, a circadian rhythm disorder that disrupts nighttime and daytime sleep. Tasimelteon synchronizes a person’s circadian rhythm to the 24-hour day. Vanda owns four patents related to using tasimelteon to treat Non-24: U.S. Patents Nos. RE46,604 (the RE’604 patent), 10,149,829 (the ’829 patent), 9,730,910 (the ’910 patent), and 10,376,487 (the ’487 patent).

Teva Pharmaceuticals USA, Inc., Apotex Inc., and Apotex Corp. submitted abbreviated new drug applications (ANDAs) with the FDA seeking approval to manufacture and sell generic tasimelteon, the active ingredient in Hetlioz. Vanda sued the two companies, alleging the ANDA submissions for generic tasimelteon infringed on the claims of the Hetlioz patents. However, the district court ruled against Vanda, invalidating the claims on the grounds of obviousness. In May 2023, the U.S. Court of Appeals for the Federal Circuit affirmed the district court decision that Vanda’s patents for Hetlioz were invalid because the dosage and method of administering the drug were obvious before the patents were issued. Vanda asked the High Court to review the Federal Circuit decision.

According to the petition, the question presented was whether obviousness requires a showing of “predictable” results, as the Supreme Court held in KSR International Co. v. Teleflex, Inc., 550 U.S. 398 (2007), or a mere “reasonable expectation of success,” as the Federal Circuit held?

In reaching its decision on the proper standard for a determination of obviousness, the Federal Circuit used Vanda’s own clinical trials as evidence that a person of ordinary skill in the art would have a “reasonable expectation of success” in the results reached, noting specifically that “obviousness does not require certainty.” Vanda argued in its petition that the “predictable results” standard should have been applied instead as the High Court held in KSR International Co. and, if the Federal Circuit had employed this standard, it could not have concluded that the evidence of clinical trials supported a finding of obviousness. The appellate court used an obvious standard that materially departed from the Court’s longstanding holdings and that different standard has a significant impact on patent law throughout the country, Vanda contended.

The Case is No. 23-768.

Attorneys: Paul Whitfield Hughes (McDermott Will & Emery LLP) for Vanda Pharmaceuticals, Inc. John Christopher Rozendaal (Sterne, Kessler, Goldstein & Fox P.L.L.C.) for Teva Pharmaceuticals USA, Inc.

Companies: Vanda Pharmaceuticals, Inc.; Teva Pharmaceuticals USA, Inc.

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