A new biotech infringement decision as issued this week by the U.S. Court of Appeals for the Federal Circult, which ruled in favor of ViaCell against Pharmastem in PharmaStem Therapeutics, Inc. v. Viacell, Inc. (Fed. Circuit 2007).

The press release issued by ViaCell following the ruling stated as follows:

The Federal Circuit upheld an earlier decision by the U.S. District Court for the District of Delaware that ViaCell, through its marketing of ViaCord®, a product offering through which families can preserve their baby’s umbilical cord blood at the time of birth for possible future medical use, does not infringe PharmaStem’s U.S. Patent No. 5,192,553 (‘553) and U.S. Patent No. 5,004,681 (‘681), which relate to certain aspects of collection, cryopreservation, storage and use of hematopoietic stem cells from umbilical cord blood. The court also found the ‘553 and the ‘681 patents invalid based on prior art.

Peter Zura’s 271 Patent Blog discussed the infringement issues:

One of the sticking points in the litigation was language in the claims that required that the recited composition contained stem cells “in an amount sufficient to effect hematopoietic reconstitution of a human adult.”

Each of the defendants are in the business of servicing families with newborn infants in which blood from the infant’s umbilical cord is collected and cryopreserved for possible later use. The problem was that PharmaStem could not show enough evidence that the defendants’ cord blood contained a “sufficient” supply of stem cells to effect successful reconstitution of an adult. An expert provided testimony based on the defendants’ marketing materials, but did not consider any data regarding the composition of the cord blood units. Accordingly, the expert’s testimony was excluded.

In a more interesting move, the CAFC also determined that the method claims could not be infringed because all the steps were not performed by the same party – the defendants were responsible for collecting and cryopreserving cord blood samples, while transplant physicians unrelated to the defendants thawed the cord blood and used it for transplanting. Also, since the defendants never “owned” the blood, there was no contributory infringement. . .

Patent Docs further addressed the obviousness issues:

In finding there was not substantial evidence, the Federal Circuit stated that the obviousness standard required a “reason” the skilled worker would make the claimed device or carry out the claimed process, and have a reasonable expectation of success in doing so.  The Court found strong evidence in the prior art that the first prong of this test was satisfied.  As to the second prong, the Federal Circuit was not persuaded by evidence that it was unknown in the art that cord blood contained hematopoietic stem cells.  The Court cited portions (as characterized by Judge Newman’s dissent, by “simply reweigh[ing] selectively extracted evidence”) of the art to show that cord blood was known to contain such stem cells.  It appears that the Federal Circuit interpreted the art based on its understanding that the existence of progenitor cells in the blood was evidence for underlying stem cells, although elsewhere in the opinion the Court appears to conflate the two cell types.  The Federal Circuit’s explication of the biological underpinnings suggests that it believed that a production of such progenitor cells was accompanied by persistence (and thus the presence of) stem cells in the blood.  In discounting PharmaStem’s expert testimony, the Court relied upon what it considered contrary statements made by the inventors, and refused to credit the expert’s explanation that the cited art used the term “stem cell” inaccurately.

Patently O described the rationale for the decision:

Invention is Obvious: When asserting obviousness based on a combination of prior art references, the patent challenger must show that a PHOSITA “[1] would have had reason to attempt to … carry out the claimed process, and [2] would have had a reasonable expectation of success in doing so.”

Reason to attempt: In view of the prior art references, the first part of that test is plainly satisfied here. The idea of using cryopreserved cord blood to effect hematopoietic reconstitution was not new at the time [of filing]. Two of the prior art references…suggest using cord blood for that purpose. Two others…suggest cryopreservation and storage of the cord blood until needed. Accordingly, this is not a case in which there is any serious question whether there was a suggestion or motivation to devise the patented composition or process.

Expectation of Success: The inventors appear to have conclusively proven that umbilical cord blood is capable of hematopoietic reconstitution.  Unfortunately for them, completing a proof is not necessarily inventive. Rather, prior scientists strong suspicion of the capability creates an expectation of success so strong that “no reasonable jury” could find the patent valid.

While the inventors may have proved conclusively what was strongly suspected before—that umbilical cord blood is capable of hematopoietic reconstitution—and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature. Instead, the inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention.