Blocking Patents May Minimize Probative Value of Blockbuster Sales in Obviousness Analysis

Last week, Federal Circuit Judge William Bryson, sitting by designation in the Eastern District of Texas, held that the claims of four of the six Orange Book-listed patents for Restasis® were invalid.  In reaching this decision, Judge Bryson discounted the extensive sales revenues of Restasis® offered by Allergan to demonstrate commercial success.  Allergan, et al. v. Teva, et al., C.A. No. 2:15-1455 (E.D. Tex. Oct. 16, 2017).

Restasis® is an ophthalmic emulsion that treats dry eyes.  The active ingredient, cyclosporin, is dissolved in castor oil to form an emulsion.  The claims of the asserted patents cover topical ophthalmic emulsions and their methods of use, and each asserted claim includes the formulation for Restasis®.

In addition to the Orange Book patents for Restasis®, Allergan has owned patents covering cyclosporin/castor oil emulsions for ophthalmic indications since the early 1990s.  These earlier Allergan patents disclosed cyclosporin compositions comprising each ingredient of the Restasis® formulation in concentration ranges encompassing or overlapping the concentrations claimed in the Orange Book patents.  The Court found the claims at issue obvious over these earlier cyclosporin patents, and declined to credit Allergan’s purported unexpected results associated with the precise claimed concentrations of cyclosporin and castor oil.

As to Allergan’s alleged secondary considerations of non-obviousness, the Court found it undisputed that Restasis® is a commercial success that satisfied a long-felt need.  Nonetheless, the Court concluded that these secondary considerations did not support a finding of non-obviousness due to the presence of Allergan’s “blocking patents” that “suppressed any competition in cyclosporin/glyceride emulsion formulations.”  As the Court explained, “[t]he 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.  Allergan has enjoyed patent protection for the topical administration of cyclosporin to the eye since obtaining rights under [the earlier Allergan patents].”  While Restasis® has been a commercial success, “that success is attributable mainly to the patent protection Allergan has enjoyed for cyclosporin/castor oil emulsions over the past quarter century.”

Judge Bryson’s opinion follows Galderma v. Tolmar (737 F.3d 731 (Fed. Cir. 2013)) and Merck v. Teva, 395 F.3d 1364 (Fed. Cir. 2005), where the Federal Circuit also declined to credit evidence of commercial success because market entry by others was precluded by blocking patents.  This ruling offers a judicial check on the evergreening of blockbuster drug franchises.