Why Obviousness Matters
As I’ve mentioned before, the bane of almost every patent attorney’s existence is understanding what obviousness means. If something is an obvious modification or improvement over what already exists, then you can’t get a patent on it.
So, the question is: What does obviousness mean? I’ve talked about obviousness in Episodes 3, 47, 48, 49, and 143. Since I’ve discussed it so much, you can tell how important it is.
It’s so important that I’m dedicating another episode to it because of a case that happened last year, which the Supreme Court decided not to hear. What this means is that there was a case at the Federal Circuit that one side lost. The losing side then filed a petition for what is called a writ of certiorari, which means they wanted the Supreme Court to review the case. However, the Supreme Court doesn’t take up most cases.
In fact, the Supreme Court denies about 97% of the cases presented to it without any discussion whatsoever. So, it’s not unusual for the Supreme Court to decline to answer a patent-related question, even if it’s an important one. When that happens, whatever the Federal Circuit held becomes the law going forward.
The Federal Circuit: The Patent Court
I’ve talked about the Federal Circuit before. It’s a special court where most of the cases are patent cases. It’s almost like the Supreme Court for patents—except when the actual Supreme Court decides to take on a case.
The Vanda Pharmaceuticals v. Teva Pharmaceuticals Case
So, what’s the question about obviousness that the parties wanted clarity on?
This case was Vanda Pharmaceuticals vs. Teva Pharmaceuticals. Vanda made a drug called Hetlioz for sleeping disorders, and it sued Teva for patent infringement of that drug. Teva countered by arguing that Vanda never should have been granted a patent for Hetlioz because, based on existing knowledge, Hetlioz was obvious.
Obviousness in biotech and drug development is tricky. The basic core structures of many drugs are already known because different drug classes share common chemical structures. Developing new drugs often involves modifying an existing structure by adding molecules or groups of molecules to create something different.
Pharmaceutical companies are constantly testing new variations of drugs—some work, and some don’t. So, if you know the basic structure of a drug class, is modifying that structure to create a new and better drug obvious? And what is the standard for determining obviousness?
The Competing Legal Standards
That was the key issue in this case. There were two possible tests:
1. Reasonable Expectation of Success – This is the standard that the Federal Circuit applied. It is a lower threshold for obviousness.
2. Predictable Results – This is a higher threshold, making it harder to prove something is obvious.
Let’s pause for a moment: “Reasonable expectation of success” vs. “Predictable results.”
Under which test will more things be found obvious? The answer is “reasonable expectation of success” because it sets a lower bar.
In biotech, extensive experimentation is required, and outcomes are often unpredictable. Researchers test hundreds or thousands of chemical variations, and they don’t always know in advance what will work. So, the results of a specific drug formulation might not be predictable, but there might still be a reasonable expectation of success based on existing knowledge and techniques.
In practical terms, this means that under the reasonable expectation of success standard, fewer biotech and pharmaceutical patents will be granted than if the predictable results standard were used.
Teva’s Argument
In this case, Teva argued (I've paraphrased below, in simple language):
Hey, based on all the existing knowledge and how pharmaceutical companies develop new drugs, there was a reasonable expectation of success for Hetlioz, so it should not have been patentable—it’s obvious.
Vanda’s Argument
Vanda countered (I've paraphrased below, in simple language):
That’s not the correct standard! Maybe there was a reasonable expectation of success, but the real question is whether the result was predictable. Since it wasn’t, we should be able to get a patent.
Federal Circuit’s Decision
The Federal Circuit sided with Teva and ruled that the standard for biotech is reasonable expectation of success. As a result, Vanda’s patent for Hetlioz was invalidated. The court reasoned that, while the outcome might not have been predictable, it was reasonable to expect success based on prior knowledge and methods. That was enough to make the drug obvious under patent law.
Supreme Court Declines to Review
Naturally, Vanda wasn’t happy with this decision.
Vanda wanted the Supreme Court to step in. If the Court had ruled that the proper standard was predictable results, then Vanda would have had a better chance of keeping its patent under the stricter obviousness standard. However, in April 2024, the Supreme Court declined to hear the case, meaning the Federal Circuit’s decision against Vanda remained the law.
What This Means for Biotech Patents
So, at least for biotech—where a lot of experimentation is involved—the reasonable expectation of success standard now applies when determining obviousness.
Of course, lawyers will continue to debate what “reasonable,” “expectation,” and “success” actually mean. That’s their job. But the fundamental legal test itself isn’t likely to change unless a new case persuades the Supreme Court to reconsider.
This is just one part of the obviousness analysis, so check out my other episodes if you want to learn more about this or any other patent topic.
Until next time, I’m Adam Diament. Keep on inventing!