Federal Circuit Holds That Third Party Clinical Trial May Not Constitute Public Use

In Dey, L.P. v. Sunovion Pharmaceuticals, Inc., the Federal Circuit vacated the district court’s grant of summary judgment in favor of Sunovion, and remanded for further consideration of whether Sunovion’s clinical trial constituted a “public use” of the formulation claimed in Dey’s patents. As noted by the court, this case is interesting because most pharmaceutical ”public use” cases involve the patent holder’s own clinical trial, while this one involves that of the alleged infringer.

The Patents at Issue

The patents at issue relate to the treatment of chronic obstructive pulmonary disease (“COPD”) using formoterol. Dey’s patents, which have a priority date of July 10, 2003, include U.S. Patent 7,348,362; U.S. Patent 7,462,645; U.S. Patent 7,65,756; U.S. Patent 7,473,710; and U.S. Patent 7,541,385, directed to specific formulations of formoterol.

Sunovion has its own earlier patent, U.S. Patent No. 6,040,344, directed to a specific solid form of R,R-formoterol L-(+)-tartrate itself. In the course of developing its commercial product (Brovana), Sunovion conducted a clinical trial that began in February 2002. As summarized by the Federal Circuit, the study “tested three different dosages of formoterol,” one of which ( Batch 3501A) was stipulated to be “identical to the formulation that Sunovion ultimately marketed as Brovana.”

When Dey alleged that Sunovion’s Brovana product infringed its patents, Sunovion asserted that its clinical trial constituted a prior public use that invalidated Dey’s patents under 35 USC § 102(b). The district court granted summary judgment in favor of Sunovion, but the Federal Circuit vacated and remanded.

The Clinical Trial

The Federal Circuit noted the following details about the clinical trial:

• the study was double-blind and randomized
• during a 12-week period … participants received treatments to take home and self-administer twice daily
• participants were told that the study concerned “the effects of (R,R)-formoterol, an experimental medication (not yet approved by the . . . FDA) to treat COPD,” and that it would test three particular doses of (R,R)-formoterol (the three batches) as compared to a placebo and another drug.
• participants were not provided any more specific information about the formulation of Batch 3501A
• the specific formulation of Brovana remained “[un]available to the public” and “confidential”
• participants … signed a consent form stating that the medications “must be taken only by the person for whom it was intended” and that subjects would have to keep usage logs and return unused medications
• participants were advised that they “may wish to discuss this study . . . with [their] regular doctor[s]” and were allowed to “request that the person who is in charge of this study speak directly with [their] doctor[s].”
• participants were not prohibited from speaking with others about the study
• test administrators had to sign a formal “Clinical Investigator Confidentiality Agreement” directing them to hold all proprietary information in confidence for five years
• test administrators were forbidden from disclosing the study protocols or dispensing the drug to any person who was not a trial subject, and were held accountable for securely storing the drug and maintaining records of its disposition and use.
• investigators were instructed that unused supplies of the drug were to be returned upon completion or termination of the study
• at least some participants received Batch 3501A prior to July 10, 2002—one year before Dey filed its priority patent application
• thousands of vials containing Batch 3501A were distributed during the trial
• a fraction of one percent of those vials were lost and not returned
• subjects who misplaced the vials were given replacements and were allowed to continue with the test

Principles of Public Use

The Federal Circuit provides this summary of the doctrine of public use:

To decide whether a prior use constitutes an invalidating “public use,” we ask “whether the purported use: (1) was accessible to the public; or (2) was commercially exploited.” …. Our cases have provided considerable guidance as to what it means to be “accessible to the public.” We have explained that the policies underlying the public use bar inform its scope and that one such policy is “discouraging the removal, from the public domain, of inventions that the public reasonably has come to believe are freely available.” …. In addition, we have set forth factors that may be helpful in analyzing the question of public use, including “‘the nature of the activity that occurred in public; the public access to and knowledge of the public use; [and] whether there was any confidentiality obligation imposed on persons who observed the use.’”…. And we have said that a public use may occur when “a completed invention is used in public, without restriction.” …. Such formulations are designed to capture the commonsense notion that whether an invention is “accessible to the public” or “reasonably . . . believe[d] [to be] freely available” depends, at least in part, on the degree of confidentiality surrounding its use: “[A]n agreement of confidentiality, or circumstances creating a similar expectation of secrecy, may negate a ‘public use’ where there is not commercial exploitation.” ….

The court noted that the same principles apply “when an unaffiliated third party is responsible for the allegedly public use.”

[E]ven in the case of third-party uses, being “accessible to the public” still requires public availability; secret or confidential third-party uses do not invalidate later-filed patents.

The Federal Circuit noted that “[t]he degree of confidentiality necessary to avoid a finding of public use naturally depends on the circumstances.”

For example, if there is no confidentiality agreement in place, the skill and knowledge of those observing an invention can shed light on the degree to which it was kept confidential. Even limited disclosure to those who are skilled enough to know, understand, and “easily demonstrate the invention to others,” may mean that there was no reasonable expectation of secrecy and that the invention was therefore in public use. …. By contrast, when disclosure is limited to a small number of uninformed observers there may be no reason to believe “that a viewer . . . could thereby learn anything of [the later-patented invention]” and disclose the invention to others. …. In such cases, a finder of fact might reasonably conclude that the third party’s use remained confidential and that the invention was not “accessible to the public.”

The Sunovion Clinical Trial

Turning to the case before it, the Federal Circuit found that the record did not support summary judgment in favor of Sunovion.

First, we do not share the court’s belief that the use of Batch 3501A by Study 50 participants was indisputably open and free. …. The fact that a tiny fraction of the thousands of vials were lost without penalizing the responsible test subject(s), or that the practicalities of the study required self-administration at home rather than physician administration in a closed facility, does not preclude a reasonable jury from concluding that the use of Batch 3501A was sufficiently controlled and restricted, rather than unfettered and public.

Nor do we agree with the district court’s conclusion that the confidentiality obligations imposed in Study 50 were so loose that summary judgment of invalidity was justified. …. This case does not involve undisputed evidence of a complete lack of confidentiality protections, as there was in prior cases basing invalidity on third-party public use. …. And the fact that no formal obligation of secrecy was imposed on the study subjects does not automatically transform Sunovion’s clinical trial into a public use. …. Because a finder of fact could conclude that the study was conducted with a reasonable expectation of confidentiality as to the nature of the formulations being tested, summary judgment on the public use issue was inappropriate.

With regard to the specific context of pharmaceutical clinical trials, the court noted:

[C]linical trial subjects “typically do[] not sign a confidentiality agreement,” as “patients must be free at least to provide information to their other healthcare providers and family members.” …. Many cases concern studies in which investigators sign strict confidentiality agreements but patients do not, and courts have routinely rejected the argument that such an arrangement necessarily strips the trial of confidentiality protection or renders it accessible to the public. …. It is not uncommon for patients in these studies to know the active ingredient of the drug being studied. …. And, in at least one of those cases, patients also self administered the drug at home and did not return all unused test products—an occurrence that the testimony established is “‘very common’” in comparable trials.

With regard to the specific context of a third party use, the court noted:

 [W]e measure the adequacy of the confidentiality guarantees by looking to the party in control of the allegedly invalidating prior use. In third-party use cases, that is the third party.

With regard to the difference between public knowledge and public use, the court noted:

[A]lthough Sunovion is correct that we do not ask for an “‘enablement-type inquiry’” under section 102(b), a court still must decide whether the “claimed features of the patents [were placed] in the public’s possession.” …. And here, a reasonable jury could conclude that if members of the public are not informed of, and cannot readily discern, the claimed features of the invention in the allegedly invalidating prior art, the public has not been put in possession of those features.

The Federal Circuit concluded:

By allowing publicly accessible prior uses to block a later-filed patent, the public use bar seeks to prevent assigning a monopoly to “inventions that the public reasonably has come to believe are freely available.” …. Study 50, with all of its restrictions on the use of the drugs and information concerning the formulations, does not indisputably fall within that description. Accordingly, we decline to hold, on summary judgment, that Sunovion’s clinical trials of its own product represent clear and convincing evidence that Dey’s inventions were accessible to the public more than a year before Dey sought to patent them.

Judge Newman’s Dissent

Judge Newman dissenting from the majority opinion (which was authored by Judge Bryson and joined by Judge O’Malley), to explain why she would have reversed the district court decision and held that Sunovion’s clinical trial did not constitute a public use.