SCOTUS Scraps Vanda’s Bid for Guidance on Obviousness Standard

The U.S. Supreme Court today denied a petition for certiorari seeking clarification from the Court on the proper standard for a showing of obviousness.

Vanda Pharmaceuticals filed the petition following the U.S. Court of Appeals for the Federal Circuit’s (CAFC’s) May 2023 decision invalidating Vanda’s patent on a method of using the drug tasimelteon to treat Non-24-Hour Sleep-Wake Disorder. The CAFC came to its decision in part because the court said the disclosure of clinical trials was evidence that a person of ordinary skill in the art “would have had a reasonable expectation of success.” Vanda argued in its Supreme Court petition that a “predictable results” standard should be applied instead and maintained that the High Court said as much in KSR v. Teleflex.

The CAFC in part affirmed a district court’s finding that Vanda’s ongoing clinical trial, which was mentioned in a prior art reference, served as “one piece of evidence, combined with other prior art references, to support an obviousness determination.” The CAFC said that the district court did not find the clinical trial “would have given a POSA an expectation of success in using tasimelteon to treat Non-24 in and of itself,” but instead that  the prior art’s disclosure of Vanda’s Phase III trial “would also have contributed to a skilled artisan’s expectation of success.”

Vanda told the Supreme Court that its petition should be granted because the CAFC’s “reasonable expectation of success” standard “is materially lower than that long established by this Court and codified into Section 103.” The petition argued that the Federal Circuit has refused to give up its “rigid” obviousness standards and in particular has applied its reasonable expectation of success standard “in a way that ‘limits the obviousness inquiry’ by producing stark over-invalidation of patents not contemplated by the statute or this Court’s precedents.”

Salix Pharmaceuticals filed an amicus brief supporting Vanda and argued that this is a critical issue for the pharmaceutical industry. Salix just lost its own fight with the CAFC when the court issued a precedential decision on April 11 invalidating its claims for a drug used to treat irritable bowel syndrome (IBS) and other ailments.

The American Council of the Blind, the Blinded Veterans Association and PRISMS also filed a brief in support of Vanda, characterizing the Federal Circuit’s decision as having “dangerous life-altering consequences” for their members. “Petitioner Vanda Pharmaceuticals Inc. navigated the practical and economic hurdles of serving these modest populations to develop Hetlioz®, the most effective treatment yet available for Non-24 and SMS-related sleep disorders,” said the brief, adding that the decision undermines incentives for future companies to follow in Vanda’s footsteps.

Vanda’s now-denied petition concluded:

“Continued application of the reasonable-expectation-of-success test will mean the existence of a clinical trial or federal guidance generally recommending certain experiments will render the results of those experiments obvious, no matter how innovative or unpredictable.”

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