Blockbuster Restasis Patent Goes Down at Federal Circuit a Victim of Rule 36

A patent to a blockbuster drug like Restasis, which has over $1.4 billion in annual sales in the United States, deserves greater consideration than a once sentence disposition that simply says: “Affirmed.”

Blockbuster Restasis Patent Goes Down a Victim of Rule 36On Wednesday, November 13th, the United States Court of Appeals for the Federal Circuit issued a Rule 36 judgement affirming the judgment of the Eastern District of Texas that patent claims covering Allergan’s Restasis dry eye treatment were invalid under 35 U.S.C. § 103 grounds for obviousness. In issuing the Rule 36 judgment, the Federal Circuit panel of Chief Judge Sharon Prost and Circuit Judges Jimmie Reyna and Todd Hughes upheld without an opinion findings made by Circuit Judge William Bryson, who was sitting by designation in the Eastern Texas. 

Without any explanation, analysis or justification, Chief Judge Prost, and Judges Reyna and Hughes affirmed the decision of colleague Judge Bryson. A patent to a blockbuster drug like Restasis, which has over $1.4 billion in annual sales in the United States, deserves greater consideration than a once sentence disposition that simply says: “Affirmed.”

The interesting thing about Rule 36 summary affirmances is they are only supposed to be used when the decision is of no precedential value. By that the Federal Circuit almost certainly means that a Rule 36 decision is a proper procedural tool to use when there are no genuine issues of law and that a written opinion would not further the cumulative body of law. The growing problem in America — whether the Federal Circuit chooses to acknowledge it or not — is that the fight to preserve a patent as valid and enforceable is never over. The fight to preserve a patent is only over and truly final once the patent is lost. Therefore, the only time a decision has binding, preclusive and precedential value insofar as being a final judgment is when the patent owner has lost.


So why is the Federal Circuit using Rule 36 when patent owners lose? And if Rule 36 affirmances are such a great idea because these cases represent appeals that really should never have been brought, and border on the frivolous to the point of not even needing a written decision, why doesn’t the Federal Circuit adopt a Rule 36.1 and create summary reversals? Are we really to believe that the only time that it would be a waste of judicial resources for the Court to engage in the exercise of writing an opinion is when a patent owner loses? After all, that is where all these Rule 36 affirmance point — to a patent owner loss, whether at the district court or at the Patent Trial and Appeal Board (PTAB).

In this case, the appeal to the Federal Circuit followed findings of fact and conclusions of law filed October 16th, 2017, by Judge Bryson in the Eastern Texas. Judge Bryson found that Allergan’s contentions regarding the surprising efficacy of the Restasis treatment in Phase 2 and Phase 3 clinical trials weren’t supported by the evidence at trial. In Phase 2 trials, a 0.1 percent cyclosporine/1.25 percent castor oil outperformed the 0.05 cyclosporine/0.625 castor oil formulation, which was eventually approved by the U.S. Food and Drug Administration (FDA) in the new drug application (NDA) submitted for Restasis. The efficacy of the 0.05 cyclosporine formulation in Phase 3, outperforming the 0.1 formulation results from Phase 2, was surprising to researchers according to Allergan’s submission of testimony from several of its research employees.

The lead researcher testified at trial that she didn’t want to test the 0.05 cyclosporine formulation in Phase 3 trials because of the increased complications involved in testing multiple formulations, not because the 0.1 cyclosporine formulation clearly outperformed the 0.05 cyclosporine formulation. Nevertheless, Judge Bryson still found that a person of skill reviewing the Phase 2 results published by Allergan wouldn’t conclude that the 0.1 formulation was more effective than the 0.05 formulation at the conclusion of Phase 2 trials. That finding was contradicted by Allergan’s evidence, and 

In Judge Bryson’s fact finding, it was determined that an FDA 2002 medical review of the NDA for Restasis, which included analysis of Phase 3 clinical trial studies for the medication, didn’t support a finding that the Restasis formulation demonstrated unexpected results. The FDA’s medical review of the Phase 3 trials indicated that the 0.05 percent cyclosporine formulation, which is covered by the Restasis patent claims, resulted in statistically significant higher responder rates. Statistically significant didn’t equal unexpected according to Judge Bryson. Apparently a new drug having statistically significant success is expected. After all, once a drug has an NDA filed it is guaranteed to be approved and it is shocking when it isn’t approved by the FDA because success is always expected with pharmaceuticals.

Of course success with pharmaceuticals is not expected, which is why there is such an enormously high rate of failure, even when drugs appear well on the way to approval. But Judge Bryson concluded that the FDA’s primary objective in its analysis was to determine whether the 0.05 percent cyclosporine formulation was effective against a castor oil-only vehicle and not to determine the efficacy of the 0.05 formulation against an 0.1 formulation, which was also tested in the Phase 3 trials and was covered by patent claims issued prior to the asserted Restasis patent claims. So success in the FDA trials was twisted into being no particularly relevant evidence of unexpected results.

Allergan had also asserted objective indicia of nonobviousness including the secondary considerations of Restasis’ commercial success and the long-felt but unmet need for an effective dry eye and keratoconjunctivitis sicca (KCS) treatment. Judge Bryson found that there was no doubt that Restasis was a commercial success, citing to the medication’s $1.2 billion in net sales during 2015 alone. However, “the problem with Allergan’s evidence of both commercial success and long-felt need is that Allergan’s patents have long blocked others from entering the space in the market that is now occupied by Restasis,” Judge Bryson found. Because Allergan had enjoyed patent protection for the topical administration of cyclosporine to the eye going back to 1993, this effectively blocked off that market for Allergan and undermined that company’s secondary considerations argument. This finding came despite acknowledgments from earlier in Judge Bryson’s findings of fact that prior cyclosporine eye treatments marketed by Allergan, such as Refresh Endura, didn’t bring commercial success and that such success came after the introduction of Restasis in 2003.

While the 135 page-long findings of fact entered by Judge Bryson focused on the evidence in the record, an opinion issued by the judge that same day indicates that Judge Bryson may have been personally rankled by Allergan during the course of the Hatch-Waxman litigation in district court. In that 11-page opinion, Judge Bryson took four pages to excoriate Allergan’s patent arbitrage deal with the St. Regis Mohawk Tribe in an attempt to use the tribe’s sovereign immunity to escape validity challenges in inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). However, that issue wasn’t one which was before the district court in the Hatch-Waxman litigation and, indeed, Judge Bryson ultimately found that “ those issues do not bear on this Court’s power to hear this case.” For the judge to give that much real estate to issues that didn’t bear on the particular case obviously demonstrates that Judge Bryson had an axe to grind. While Judge Bryon is a respected jurist, it would only be human for such a visceral reaction to something irrelevant to have colored his views of Allergan.

Of course, we will never really know what the Federal Circuit thought about Judge Bryson’s analysis in this case since the Court elected not to tell Allergan or the public what they thought and instead simply affirmed the decision without opinion. 

It is one thing to use Rule 36 to dispose of an appeal that should never have been brought relating to an invention of modest or no commercial success. There is still something wrong about striping rights away without the bother of even a non-precedential opinion. But there is something fundamentally arrogant about using Rule 36 to finally strike a fatal blow to a patent covering a blockbuster drug responsible for more than $1.4 billion in annual sales in the United States. And given that the district court judge was Judge Bryson, the lack of an opinion only raises further questions.


Image Source: Deposit Photos.


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Join the Discussion

23 comments so far.

  • [Avatar for Paul Cole]
    Paul Cole
    November 20, 2018 12:25 pm

    @ Night Writer

    I could not agree more, which is why I suggested that an effort be made to obtain and publish the appeal briefs. They are not available on the CAFC website.

    It is possible to listen to the oral argument, but that does not seem inspirational. On the whole, the very short time for legal argument in the Federal Circuit does not leave the attorneys with much time to really develop their cases.

    So on the whole it would be good to see the briefs. But for the present my doubts remain.

  • [Avatar for Night Writer]
    Night Writer
    November 20, 2018 11:09 am

    @19 Paul Cole

    Unless I missed it, you did not say that you read the appeal brief. I do not think it possible to determine whether a Rule 36 is appropriate without reading the appeal brief. That is fundamental to our judicial system.

  • [Avatar for Michael Palmer]
    Michael Palmer
    November 20, 2018 07:34 am

    If possible, Gene should take up Paul Cole’s suggestion to get the briefs and compare the issues raised with the decision. (We could make it a group effort.) Anyone who has worked in the litigation salt mines for a few decades will likely have encountered several decisions that did not address some of the issues raised by one or more parties. The reader unfamiliar with the briefs has no way of knowing that the court left out key facts or ignored issues raised by the litigants. I know this will sound shocking, but at least some judges have agendas. The notion that judges are objectively calling balls and strikes is naive, to say the least.

  • [Avatar for Paul Cole]
    Paul Cole
    November 20, 2018 06:40 am

    With regard to my posting earlier today I should have explained that the Warner-Lambert decision was a mere 92 pages of single-spaced type.

    More seriously, it would be very helpful if we could see the Grounds of Appeal that were filed. Could Allergen’s attorneys be persuaded to release this document for posting here so that readers could form a more balanced and informed view whether Rule 36 was truly appropriate?

  • [Avatar for Paul Cole]
    Paul Cole
    November 20, 2018 06:00 am

    @ Gene 12

    I have some 40 years of experience writing about patent law, and have learned the art of rapidly scanning judicial opinions to identify issues of law and relevant statements by the judges. Recently I had less than a day to analyse the UK Supreme Court opinion in the Warner-Lambert case for the CIPA Guide. So if there was a significant issue that needed resolution on appeal, I believe that I would have had the experience and skill to pick it up.

    As I have said, the opinion of Judge Bryson was, on the face of the document, very careful and detailed. If there was error, that would have been explained in the briefs to the Federal Circuit and subsequently explored in oral argument. It appears that this process did not persuade the Federal Circuit judges that the opinion below was wrong.

    In these circumstances, it was not foreseeable that any significant new principle of law would have been identified, and it appears from Judge Bryson’s opinion that there were none. A lengthy regurgitation of the facts and inferences of Judge Bryson punctuated with the phrase: “I agree” might have given the appearance of a substantive opinion and would undoubtedly have required considerable effort on behalf of the judicial panel but would have provided no meaningful information either for the parties or for the wider profession.

    On the law of obviousness, I have been writing since at least 1980 and it was my paper KSR and Standards of Inventive Step: A European View, 8 J. MARSHALL REV. INTELL. PROP. L. 14 (2008) that when handed to Dave Kappos at the AIPLA Annual Meeting in 2009 that prompted the issue by the USPTO of the 2010 KSR Guidelines. I read with great interest the en banc decision of the Federal Circuit in Apple v Samsung and discussed it in the CIPA Guide to draw attention of the UK profession to the importance of commercial success and peer acclaim as secondary indicia pointing towards inventive step since these factors have tended to slip somewhat into the background. Given my approval for the Federal Circuit opinion on the “slide to unlock” feature in the Apple case, I read the comments on commercial success with concern, but nevertheless with understanding. The opinion did not seem easy to overturn in the light of the reasons given for disregarding it.

    The relevant conditions under Rule 36 are that an opinion would have no precedential value, the judgment, decision, or order of the trial court appealed from was based on findings that are not clearly erroneous, that it was reached on sufficient evidence and that the first instance judgment or decision was entered without an error of law. Notwithstanding the large sum at stake, it would appear that these conditions were met and the Rule 36 judgment was appropriate and avoided filling the law reports with pointless verbiage which, unfortunately, is characteristic of many judicial opinions not only in the US but also in the UK, at the EPO and elsewhere.

    If any of the commentators had plunged into the mass of detail and identified erroneous findings of fact, erroneous inferences from the facts or erroneous applications of the law, I would agree with the sentiments in this posting. But mere prejudiced whinging based on the success of the drug (also covered by previous patents, so in the second medical use category) and the financial issues at stake is inappropriate and unhelpful. Those who have followed my comments over the years will be aware that I am no blind supporter of the Federal Circuit and do not hesitate to express disapproval when the circumstances warrant.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 19, 2018 10:03 pm


    Were they really asleep, or just in denial? They seemed to be of the belief that none of the bad stuff that was happening relative to patents would or could affect pharma patents. They seemed to convince themselves that their patents were special and would be spared. Rather naive.

  • [Avatar for xtian]
    November 19, 2018 09:53 am

    @Gene – Pharma was asleep. I witnessed it firsthand.

  • [Avatar for Night Writer]
    Night Writer
    November 17, 2018 10:18 am

    @15 concerned

    The courts Scotus and the CAFC are examples for the examiners. When the Scotus just pulls out of their arse “directed to an abstract idea” and invalidates 100’s of thousands of patents, then the examiners feel they can do this too.

    The reality is that we have moved to a system where the judges are like kings and queens. They hold all the cards and the Scotus has their back.

  • [Avatar for concerned]
    November 17, 2018 02:41 am

    Someone told me that my examiner only approved 2 out of 114 applications the last 12 months. Frankly, were the 2 approvals just for the appearance of legitimacy? Are the patent attorneys across the nation really that incompetent or is the process that pre-determined?

    In my prosecution, truth, facts and evidence were not in play. The examiner clearly made statements that were not factual on the surface. I got the drill…”Routine, conventional and well-understood.” By whom on earth or any other planet? The preceding challenge to find someone who did my claims is open to anyone, anybody.

    So I posed the question. What is worst: Rule 36 where nothing is said or an explanation from your examiner that is clearly not the truth on any planet?

    And if savings equals sales, move over Restasis. You do not have to take my word for it. Just ask two of the previous State Medicaid Directors in Ohio or the two universities that did the studies.

    So yes Mr. Morgan @10, the public will save money from ripping inventors off. That is, this generations of inventors. However, regarding the next generation of inventors (those folks that thought of someone no one else did), will they just say here is my idea, come and rip me off with silence or statements that are not truthful?

  • [Avatar for Night Writer]
    Night Writer
    November 16, 2018 04:39 pm

    @6 Paul Morgan >”Paul Cole should be hit in the head with a nail.” I tend to agree.

    Fairly vacuous post. Without read the brief it is hard to say whether there were any issues of law or fact that should have been addressed by the CAFC. The fact that the opinion is long does not indicate that it is unlikely that there are issues of law not addressed. Moreover, the CAFC regularly reverses based on facts that they conjure up.

    The fact is that without an opinion and only a Rule 36 it is very difficult to have closure or to believe that the judges read your brief and understood your arguments.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 16, 2018 02:11 pm


    Where was big Pharma? An excellent question!

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 16, 2018 02:11 pm


    We are going to have to agree to disagree for many reasons.

    First, at the Federal Circuit whenever they want to disregard a district court judge they just turn the issue into a question of law rather than one of fact. So you reap what you sow if you are the Federal Circuit.

    Second, the question of whether something is obvious is full of legal conclusions based on findings of fact. So even if there is no dispute as to the actual facts there very easily can be disputes as to the legal significance and ultimate legal conclusion.

    Third, the cavalier way in which the Federal Circuit says affirmed and erases an asset worth many billions of dollars should alarm everyone. There is no pretending any more — patents are not property. There was not even the hint or charade of due process in this appeal. Just one word — “Affirmed.” We are agreeing with our colleague who has already looked at this and we aren’t about to overrule him.

    The Federal Circuit is striking at the fabric of its own credibility when judgments against patent owners are affirmed with a rubber stamp but somehow they never seem to see decisions where the patent owner should win. The game sure feels rigged. Whether it is or not, I’m tired of trying to justify the actions of this Court to lay people. The actions look bad and they are so myopic they don’t have a clue.

  • [Avatar for xtian]
    November 16, 2018 01:53 pm

    @ Paul x2

    Agreed – it is not the proper function of the appellate court to re-try the facts. However, I would want the Fed Cir to clarify ambiguously conclusions drawn from facts that supported the lower courts decision. The fed Cir should be a check on whether the proper inferences were drawn from those relevant facts.

    In this case, the decision makes a dubious inference from a set of facts – that commercial success was not because of the patented invention in the product, but because prior patents effectively blocked the entire eye market paving the was for Restatsis. The article points out that those prior patents covering prior eye medicines were not as commercially successful as Restasis. So here we have disjointed facts leading to a questionable inference – that secondary indicia of nonobviousness, e.g., commercial success, to rebut a finding of obviousness is not persuasive when the commercial success of the current product, Restasis, is because of a prior, monopolized eye market, where patented eye products were less commercially successful than Restasis.


  • [Avatar for Paul Morgan]
    Paul Morgan
    November 16, 2018 10:30 am

    Paul Cole hits the nail on the head. It is not the proper function of an appellate court to re-try or re-litigate a Fact issue decided in the trial court below, unless they are shown that there was clearly inadequate evidence to support it [no matter how much money their attorneys spent].
    If you want to know why a party won or lost, you can read the (affirmed) trial court decision.
    The $1.4 billion in annual sales [for a correspondingly high profit by the patent owner] is one side. That will be gradually reduced by FDA approved generic competition. That will save the public corresponding amounts in their drug costs and insurance premiums, the other side here.

  • [Avatar for Patent Investor]
    Patent Investor
    November 16, 2018 09:15 am

    Mr Cole,

    “appellate courts are often reluctant to differ from a trial judge on issues of fact because the appellate judges do not directly hear the witnesses and have the opportunity to observe their demeanour under cross-examination”.

    Have you read almost anything produced by this same CAFC in the last 10 years?? The Vringo decision comes to mind first but there are copious amounts of other fine examples counter to your statement, with Bryson being one of the worst culprits.

  • [Avatar for Bemused]
    November 16, 2018 08:17 am

    Paul [email protected]: The fact that you would make such a statement after you “briefly scanned” this 135-page opinion speaks volumes about your remarkable conclusion that this Rule 36 was justified and correct.

    Remember the old saying ‘better to keep your mouth shut and let people think you’re stupid than to speak and remove all doubt’? That applies with equal force when posting commentary.

  • [Avatar for Bemused]
    November 16, 2018 08:11 am

    Remember the old adage ‘absolute power corrupts absolutely’? This is what we have with Rule 36: An inept (at best) or corrupt (at worst) CAFC which uses Rule 36 when it wants to arrive at a preordained outcome against a particular patent or specific patent holder with absolute impunity.

    Prost and Reyna are an embarrassment to the federal judiciary (I haven’t had the pleasure of getting screwed by Hughes yet so I leave him out – for now). Those two shouldn’t be allowed to judge cases in civil small claims courts; much less cases in a federal appellate court with oversight over multi-billion dollar patent appeals.

    In my last comment on IPW I wrote that SCOTUS should be stripped of appellate jurisdiction over patent cases. I hadn’t gone far enough. I should have said SCOTUS and the CAFC.

  • [Avatar for Paul Cole]
    Paul Cole
    November 16, 2018 07:11 am

    The remarkable care in the first instance judgment by Judge Bryson is shown by the length and detail of the 135-page opinion which I have briefly scanned. It does not appear that any new issue of law could arise on appeal, merely issues of fact and the proper inferences to be drawn from those relevant facts. The judges of the Federal Circuit have a sufficient workload without merely repeating facts found by the trial judge. Despite the value of the drug and background considerations relating to the development of new pharmaceuticals, appellate courts are often reluctant to differ from a trial judge on issues of fact because the appellate judges do not directly hear the witnesses and have the opportunity to observe their demeanour under cross-examination. A Rule 36 judgment was therefore not inappropriate notwithstanding the practical importance of the case to the parties.

  • [Avatar for Michael Palmer]
    Michael Palmer
    November 16, 2018 07:04 am

    There is something fundamentally unsound about a judicial system that repeatedly issues decisions that impartial observers view as influenced or controlled by arbitrary cognitive processes. The patent review branch of the American judicial system provides particularly egregious examples of this problem, but it is not alone. Most litigants resolve their disputes voluntarily (often after spending enormous sums on lawyers and other expenses), not because the judicial outcome is predictable, but because it isn’t. We need basic reform across the board.

  • [Avatar for Mark]
    November 15, 2018 09:17 pm

    Where was big pharma back in 2012 when Congress was taking money from Google to destroy the patent system? And why isn’t big pharma lobbying now to restore the patent laws? They have what they deserve.

  • [Avatar for Mark]
    November 15, 2018 09:14 pm

    Where was big pharma back in 2012 when Congress was taking money from Google to destroy the patent system? And why isn’t big pharma lobbying now to restore the patent laws?

  • [Avatar for Unjust]
    November 15, 2018 09:02 pm

    How do we get rid of unconstitutional judges? There are so many now.

  • [Avatar for Patent Investor]
    Patent Investor
    November 15, 2018 01:40 pm

    This may be the first time I’ve ever felt sorry for Big Pharma (even Kyle Bass made me laugh…at first). Bryson may be a respected jurist, but I’ve long thought him a vendetta wielding hack and this opinion/report further cements my belief. Prost being involved surprises me not a bit.

    God help us if the CAFC has seen enough of the PTAB’s shenanigans that they’ve decided they should be a kngaroo court as well. Truly sad.