shutterstock_533480197On May 9, 2016, the U.S. Court of Appeals for the Federal Circuit upheld the U.S. Patent and Trademark Office (PTO) Patent Trial and Appeal Board (PTAB) inter partes review determination that claims 1-6 and 8 of U.S Patent Number 7,566,537 (the ‘537 patent) were not invalid for obviousness under 35 U.S.C. § 103.1

Intelligent Bio-Systems (IBS) filed a revised petition requesting inter partes of review of some of the claims of the ‘537 patent, owned by Illumina Cambridge Ltd. (Illumina) on August 30, 2013, alleging the claims were invalid as obvious under section 103 in view of certain prior art.2 The ‘537 patent relates to the sequencing by synthesis (SBS) method of labelling nucleotide bases. Claim 1, the only independent claim under review, states:

1. A method of labeling a nucleic acid molecule, the method comprising incorporating into the nucleic acid molecule a nucleotide or nucleoside molecule, wherein the nucleotide or nucleoside molecule has a base that is linked to a detectable label via a cleavable linker and the nucleotide or nucleoside molecule has a ribose or deoxyribose sugar moiety, wherein the ribose or deoxyribose sugar moiety comprises a protecting group attached via the 2′ or 3′ oxygen atom, and said protecting group can be modified or removed to expose a 3′ OH group and the protecting group comprises an azido group.3

There were three prior art references at issue, Ju and Tsien, which PTAB determined “describe[] a process of labeling, and ultimately sequencing, a nucleic acid molecule,” by a polymerase, but did not “disclose protecting a protecting group that comprises an azido group.”4 Zavgorodny, however, taught “that an azidomethyl moiety is a suitable protecting group for … precisely the position requiring protecting in Ju’s [or Tsien’s] process.”5

Before PTAB, Illumina argued that “an ordinary artisan would not expect the azidomethyl group of Zavgorodny to meet the specific criteria or Tsien or Ju,” in particular, the “quantitative and rapid removal [essentially 100% removal]” required by Tsien.6 The Board agreed, deciding that IBS failed to prove the claims were obvious under the prior art.7 IBS challenged the Board’s decision.8

Before the Federal Circuit, IBS argued that the Board erred by imposing a quantitative cleavage requirement into the claims “through the reasonable expectation of success analysis.”9

The Federal Circuit stated:

The reasonable expectation of success requirement refers to the likelihood of success in combining references to meet the limitations of the claimed invention.

The Board seemed to believe that the “reasonable expectation of success” inquiry looked to whether one would reasonably expect the prior art references to operate as those references intended once combined. That is not the correct inquiry—one must have a motivation to combine accompanied by a reasonable expectation of achieving what is claimed in the patent-at-issue. The Board’s reliance on the absence of a reasonable expectation of success was, thus, improper.10

However, the Federal Circuit agreed with the Board’s ultimate decision of nonobviousness.11

[W]hile the Board conflated two different legal concepts—reasonable expectation of success and motivation to combine—it nevertheless made sufficient factual findings to support its judgment that the claims at issue are not invalid. It was IBS’s burden to demonstrate both “that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so.

Despite the loose language employed by the Board, its factual findings support its conclusion that the claims are not invalid.12

Secondarily, because IBS presented a new argument in its reply brief, the Board refused to consider the brief and accompanying expert declaration “because it found that IBS’s reply was improper under two regulations: first under 37 C.F.R. § 42.23(b), which provides that a ‘reply may only respond to arguments raided in the corresponding opposition or patent owner response,’ and then under 37 C.F.R. § 42.6(a)(3), which states that ‘[a]rguments must not be incorporated by reference from one document into another document.’”13

The Federal Circuit found that the “reply brief and accompanying declaration exceeded the scope of the reply under § 42.23(b), and therefore, that the Board did not abuse its discretion in excluding those documents.”14 Thus, the court found that it did not need to reach a determination as to whether the brief complied with § 42.6(a)(3).15

The Federal Circuit emphasized that:

Unlike district court litigation—where parties have greater freedom to revise and develop their arguments over time and in response to newly discovered material—the expedited nature of IPRs bring with it an obligation for petitioners to make their case in their petition to institute. While the Board’s requirements are strict ones, they are requirements of which petitioners are aware when they seek to institute an IPR.16

1 Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., No. 15-1693, slip op. at 2 (Fed. Cir. May 9, 2016).
2 Id.
3 Id. at 4. emphases in original
4 Id. at 5.
5 Id.
6 Id. at 7.
7 Id.
8 Id. at 10.
9 Id. at 12.
10 Id.
11 Id. at 12.
12 Id. at 13.
13 Id. at 10.
14 Id. at 17.
15 Id.
16 Id. at 16.