In the earlier panel opinion, Entecavir was found obvious under the lead compound analysis over a structurally close compound 2’-CDG, which compound at the time of invention was actually used as a lead compound by scientists, but whose toxicity in mammals was not yet known. (In other words, it was believed, incorrectly, that 2′-CDG was not toxic.) As such, one would have expected at the time of invention that structurally close compounds to 2’-CDG such as Entecavir would be non-toxic likewise to what was believed about 2’-CDG. The later found unexpected results for Entecavir indeed demonstrated improved favorable activities as well as no toxicity. However, by that time it had been shown that 2’-CDG was highly toxic in mammals, and was therefore completely abandoned for use in mammals.
A main issue raised on request for rehearing centered on whether the unexpected results should be evaluated in view of what one of ordinary skill in the art would have expected at the time of invention (even though such is ignorant of the toxicity of the prior art compound 2’-CDG), or should the evidence be considered in view of the later discovered toxicity of 2’-CDG. In the present case, the expectation regarding the toxicity of Entecavir would be completely opposite depending on the timing of the expectation used in the analysis, i.e., at the time of invention or after 2’-CDG’s toxicity in mammals was discovered.
The very brief concurring opinion by Judge Dyk cited KSR for the argument that pertinent knowledge is that possessed at the time of the invention, urging that the decision properly does not allow consideration of post-invention evidence in the circumstances of this case.
The concurring opinion by Judge O’Malley tries to mitigate the potential effect of the decision by stating that this case does not forge new ground or set down immutable principles. Judge O’Malley explicitly points out that case law clearly allows the consideration of later discovered differences between the prior art and the invention. However, in the present case, the case is lost on the facts, where the evidence of non-obviousness was not adequate to overcome the rejection. Judge O’Malley also characterizes the issues raised on rehearing as patentees seeing ghosts that are simply not there, as mischaracterizing the panel opinion and as adopting a sky is falling approach to a case that is simply a fact dependent opinion.
The dissenting opinion by Judge Newman sees the decision as creating several new standards for the determination of obviousness. For example, ignoring the actual unexpected differences among the closest prior art lead compound 2’-CDG, which is highly toxic to humans, and Entecavir, which is non-toxic and a market product for treating hepatitis B, conflicts with the entirety of precedent on the law of obviousness. Comparisons of newly found properties of both the invention and the prior art are routinely presented as evidence in determinations of obviousness. Even though the unexpected differences were not observed until 2’-CDG was tested in mammals, this does not render this unexpected difference irrelevant to patentability as a matter of law or logic. Judge Newman also sees the panel opinion as a flawed generalization regarding the characterization of the data as a mere difference in degree and not a difference in kind, where the court held that a new and effective non-toxic treatment for hepatitis B is merely a difference in degree from a highly toxic and useless treatment for hepatitis B. A difference of a drug being non-toxic to mammals versus toxic to mammals in the field of pharmaceuticals cannot be reasonably viewed as a mere difference in degree.
The dissenting opinion by Judge Taranto characterizes the data as establishing that Entecavir is dramatically different from 2’-CDG in providing practical human benefits: one provides such benefits, the other does not. Judge Taranto holds the view that even if the panel merely rejected the particular post-filing evidence here as insufficient, it is significant (for how the decision will be invoked as precedent) that the panel did not give any case-specific reasons for doing so except timing: the discovery of the prior-art compound’s toxicity post-dating the invention. Teva had to show that a hypothetical skilled artisan would have had a reasonable expectation of acceptable safety of entecavir in humans at the time of invention, which expectation, it appears undisputed, depended entirely on showing such an artisan’s reasonable expectation, at the time, that the lead compound, 2′-CDG, would be acceptably safe in humans. As such, the timing-of-evidence reasoning seems to be at the heart of the obviousness invalidation. Moreover, there is a serious question whether any such expectation was reasonable, given that 2′-CDG had been tested only in in vitro experiments—never even in animals, let alone humans. Thus, a sensible analysis may well depend on precisely what a “reasonable expectation” means.