The Federal Circuit’s decision today in PharmaStem Therapeutics, Inc. v. Viacell, Inc., Nos. 05-1490, -1551, slip op., 2007 WL 1964863 (Fed. Cir. July 9, 2007), overturns a jury’s “not invalid for obviousness” verdict to strike down claims from two different patents … a group of claims to a “cryopreserved therapeutic composition comprising viable human neonatal or fetal hematopoietic stem cells derived from the umbilical cord blood or placental blood of a single human being,” and a group of claims to a “[m]ethod for hematopoietic or immune reconstitution of a human.” Judge Bryson wrote for himself and Judge Prost. Judge Newman dissented.

The opinion offers an interesting look at contributory infringement of a process claim under section 271(c). But I’m more interested, today, in excerpting the majority’s analysis of the obviousness question. Again, the majority concludes that the only conclusion a jury could reasonably reach is that the claimed product and process inventions would have been obvious at the time the claimed inventions were made.

First, the majority slips back into a near-pre-KSR take on the suggestion test. Specifically, the majority says the following:

The defendants contend that the two patents in suit are invalid for obviousness based on a combination of several prior art references. In such a case, the burden falls on the patent challenger to show by clear and convincing evidence that a person of ordinary skill in the art would have had reason to attempt to make the composition or device, or carry out the claimed process, and would have had a reasonable expectation of success in doing so. See Medichem, 437 F.3d at 1164; Noelle v. Lederman, 355 F.3d 1343, 1351–52 (Fed. Cir. 2004); Brown & Williamson Tobacco Co. v. Philip Morris, Inc., 229 F.3d 1120, 1121 (Fed. Cir. 2000); see also KSR Int’l Co. v. Teleflex Inc., 127 S. Ct. 1727, 1740 (2007) (a combination of elements “must do more than yield a predictable result”; combining elements that work together “in an unexpected and fruitful manner” would not have been obvious).

Slip op. at 28-29. Two steps – a reason to attempt, and a reasonable expectation of success.

This case turns on the second step, the first having been easily met. See id. at 29 (”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”).

Patentee PharmaStem fails in part because its expert is contradicted by the text of the patents themselves: “PharmaStem’s argument that stem cells had not been proved to exist in cord blood prior to the experiments described in the patents is contrary to the representation in the specification that the prior art disclosed stem cells in cord blood. Admissions in the specification regarding the prior art are binding on the patentee for purposes of a later inquiry into obviousness.” Slip op. at 33.

Quite apart from the contradictions, the fact that the inventors moved the knowledge needle from “strongly suspected” to “empirically verified” is not enough to justify a conclusion of nonobviousness:

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. See KSR, 127 S. Ct. at 1732 (”Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress … .”); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1367-69 (Fed. Cir. 2007) (simply because the formation and properties of a new compound must be verified through testing does not mean that the compound satisfies the test for patentability “since the expectation of success need only be reasonable, not absolute”); In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (”Obviousness does not require absolute predictability.”). Good science and useful contributions do not necessarily result in patentability.

Slip op. at 36. After reviewing O’Farrell, the famed “obvious to try” case, the panel concludes that “providing proof sufficient to justify conducting in vivo procedures on humans, while useful, is not a test of patentability. The evidence at trial demonstrated that the patentees did not invent a new procedure or a new composition; instead, they simply provided experimental proof that the cord blood could be used to effect hematopoietic reconstitution of mice and, by extrapolation, could be expected to work in humans as well.” Id. at 38.

Something tells me that Big Pharma won’t be too happy about this …