Holding:

In Cornell Research Foundation, Inc. v. Vidal, No. 2020-2334, 2022 WL 1634223 (Fed. Cir. May 24, 2022) (non-precedential), the Court of Appeals for the Federal Circuit affirmed the final written decision of the Patent Trial and Appeal Board’s decision finding the challenged claims in six inter partes review proceedings unpatentable as anticipated or obvious.[1],[2]The Federal Circuit held that substantial evidence supported the Board’s determination that the claims were obvious.

Background:

The patents at issue are related to phytase enzymes, which are incorporated into livestock feed and aid animals in absorbing phosphates. Phytase enzymes are typically produced by taking a phytase gene from one organism and incorporating the gene into a host cell that expresses the phytase protein. U.S. Patent No. 8,993,300 (“the ’300 patent”) claims a heterologous method of producing phytase. Id. at *2–*3. The ’300 patent uses a phytase gene derived from the Escherichia coli bacteria species and a fungal host. Claim 1 and dependent claims 10–12 of the ’300 patent were representative for the purposes of this appeal.

1. A method of producing a phytase in fungal cells, the method comprising:

providing a polynucleotide encoding an Escherichia coli phytase;

expressing the polynucleotide in the fungal cells; and

isolating the expressed Escherichia coli phytase wherein the Escherichia coli phytase catalyzes the release of phosphate from phytate.

10. The method of claim 1 wherein the Escherichia coli phytase has an optimum activity at a temperature range of 57 degrees C. to 65 degrees C.

11. The method of claim 1 wherein the Escherichia coli phytase retains at least 40% of its activity after heating the phytase for 15 minutes at 80 degrees C.

12. The method of claim 1 wherein the Escherichia coli phytase retains at least 60% of its activity after heating the phytase for 15 minutes at 60 degrees C.

Claim 1 recited a heterologous method of producing phytase, and dependent claims 10–12 added “thermostability limitations” to the phytases produced by the heterologous method described in independent claim 1. Id. at *3.

Associated British Foods PLC (“ABF”) challenged Cornell’s claims based on two categories of prior-art combinations—one involving U.S. Patent No. 5,876,996 (“Kretz”), and the other not involving Kretz. The Kretz-based challenges applied only to the ’300 patent; however, the parties agreed that the Board’s six IPR decisions “stand and fall” with the Board’s obviousness analysis of the ’300 patent. Id. at *4. Thus, the Federal Circuit focused its discussion on the Board’s Final Written Decision of the ’300 patent.

On the Kretz grounds, the Board concluded that (1) Cornell failed to antedate Kretz, (2) Kretz anticipated some claims, and (3) the remaining claims were obvious in light of the other references. Id.

On the non-Kretz grounds, the Board concluded there was a motivation to combine the cited references and a reasonable expectation of success in arriving at the claimed method, and the thermostability dependent claims of the ’300 patent were obvious due to inherency. Id.

Federal Circuit:

The Federal Circuit affirmed the Board’s finding that there was a motivation to combine and a reasonable expectation of success for the non-Kretz combinations. ABF’s expert testified that P. pastoris yeast, a type of fungus, produced a high yield of heterologous protein that reduced industrial cost—an important factor when producing livestock feed for large scale productions. Id. The Board found this expert testimony persuasive in finding a motivation-to-combine the E. coli phytase gene in a fungal cell. Id. Cornell argued the Board’s motivation-to-combine conclusion was contrary to ABF’s expert testimony that one of the references taught away from using bacterial phytase in animal feed. Id. at *7. Cornell further argued the prior art suggested it would be more advantageous to pair bacterial phytase with a bacterial host rather than with a fungal host. However, the Federal Circuit ultimately concluded that a motivation to combine does not need to be “the best option, only that it be a suitable option.” Id. (citing Final Written Decision, at 81–82).

Regarding the Board’s reasonable-expectation-of-success finding, Cornell presented expert testimony that a skilled artisan would have “had no reason to expect ‘that expressing the E. coli phytase in a fungal host would have produced an active enzyme’ due to increased glycosylation.” Id. (citing Appellant’s Br. 33 (quoting J.A. 4084–89)). However, ABF’s expert provided numerous examples of systems that produced bacterial enzymes in yeast hosts. Id. at *7–*8. Thus, the Federal Circuit held that “Board was free to weigh ABF’s expert testimony more heavily [than Cornell’s expert testimony], and that’s what it did.” Id. at *7.

The Federal Circuit also found substantial evidence supported the Board’s finding that the thermostability limitations of the ’300 patent’s dependent claims were inherent results of the combined teachings of the cited references. Id. at *8. The Board cited to both parties’ expert testimony, the ’300 patent, and the prosecution history to support this conclusion. Id. Even Cornell’s expert testified that “express[ing] the same enzyme in the same host under the same conditions” produces “inherent results,” like thermostability characteristics. Id. Cornell asserted it was impermissible for the Board to cite no data outside of the ’300 patent to support its inherency finding. However, the Federal Circuit held the ’300 patent’s disclosure provided data consistent with the thermostability limitations of claims 10–12 and Cornell did not argue that the conditions of the cited references differed from those described in the ’300 patent. Id. at *9.

Thus, the Federal Circuit affirmed the Board’s findings that all challenged claims of Cornell’s patents were unpatentable as anticipated or obvious.

Take-aways:

The Federal Circuit made it clear in this case that when examining a motivation-to-combine, the best option is not always needed or even necessary to come out on top. Instead, a “suitable option” is enough to create a winning case.

Further, the Federal Circuit emphasized that while each side may have an expert that presents evidence to support its case, the Board has the discretion to weigh one expert’s testimony more heavily than another when making its decision. If, when exercising its discretion, the Board is reasonable in weighing one expert’s testimony over another expert’s testimony, that is enough to constitute substantial evidence to support the Board’s determination.

Finally, this case offers a reminder for patent owners when facing inherency arguments. Overcoming inherency requires showing that the prior art does not “inevitably” or “invariably” result in the claimed invention. Glaxo Inc. v. Novopharm Ltd., 52 F.3d 1043 (Fed. Cir. 1995). This burden rests on the patent owner and may require careful and detailed analysis and arguments.