May 19, 2017

Function/Way/Result Test Causes Headaches in Chemical Cases; Substitute Insubstantial Differences Test

In Mylan Institutional LLC v. Aurobindo Pharma Ltd., [2017-1645] (May 19, 2017), the Federal Circuit affirmed the grant of a preliminary injunction against the infringement of U.S. Patent 9,353,050 on a triarylmethane dye used to map lymph nodes.

The district court found that Aurobindo did not raise a substantial question of validity of the ’050 patent based on its arguments that the process patent is invalid under §112, §102, and §103.  Regarding the §112 challenge, the Federal Circuit agreed that “by HPLC” was a common and well-understood way of designating or determining purity, as seen in “numerous sources,” including other patents and the scientific literature.  Regarding the §103 challenge, the Federal Circuit agreed that it did not raise a substantial question regarding motivation to combine the references or a reasonable expectation of success. Regarding the §102 challenge, the Federal Circuit agreed that the conflicting evidence did not raise a substantial question as to the patent’s validity.

On the likelihood of success, the Federal Circuit noted the unusual nature of a preliminary injunction issuing in the case of infringement under the doctrine of equivalents.  The Federal Circuit said that the law on the doctrine of equivalents as applied to chemical materials is not clear, and its misapplication can lead to unsound results.  In particular the Federal Circuit noted that while the function/way/result test may be suitable for analyzing mechanical devices, it often provides a poor framework for analyzing other products or processes — particularly in the chemical arts.

In reviewing the district court’s equivalence analysis, the Federal Circuit found that either the court did not address the “way” prong of the function/way/result test, or it did so incorrectly.  While the district court correctly found that manganese dioxide and silver oxide performed the same function, there is room for sufficient doubt as to whether silver oxide and manganese dioxide oxidize isoleuco acid in the same way so as to satisfy the “way” prong of the function/was/result test.

The Federal Circuit explained the headaches that can be caused using the function/way/result test (as opposed to insubstantial differences test) in chemical cases:

consider the well-known compounds aspirin and ibuprofen, which chemists would not usually consider to be structural equivalents under the insubstantial differences test.  Chemical compounds are characterized by their structures, and these two compounds differ substantially in structure (see appendix).  However, the two compounds would seem to be substantial equivalents under the FWR test.  They each provide analgesia and anti-inflammatory activity (“function”) by inhibiting prostaglandin synthesis (“way”) in order to alleviate pain, reduce fevers, and lessen inflammation (“result”).

The Federal Circuit observed that a compound may appear to be equivalent under the function/way/result, but not under the substantiality of the differences test, and concluded that the substantial differences test may be more suitable than function/way/result for determining equivalence in the chemical arts.

Thus the Federal Circuit modified the preliminary injunction to eliminate the process patents as the basis for the preliminary injunction, but left the injunction intact as to the ‘050 product patent.  The Federal Circuit found no error in the district court’s courts conclusion that there was no substantial question about the validity of the patent, and agreed with the district court’s finding of irreparable harm.