The Supreme Court doesn't take too many patent cases, but when they rule on one, it's news. This week they handed down a decision in KSR v. Teleflex, and most pharma/biotech readers can be forgiven if their immediate reaction is "Who they?"
But you'll hear about them, all right. This case turned on the definition of obviousness, which is Section 103(a) for lovers of patent law. The standard, ever since the Graham decision many years ago, has been that a patent claim can't be rejected on obviousness grounds unless there's some "TSM" (teaching, suggestion, or motivation) in the prior art, something that would have lead a person of ordinary skill in the art to take that step. (Update - not quite. I've conflated the original Graham stuff with later decisions - see below). That's the sort of thinking behind this earlier post, for example, and it's the way we've all thought about drug patents.
You see where this is headed. The Supreme Court has (by a 9-0 vote) redefined this criterion. (Interested fanatics can get the full decision here). Here's a key section that gets across the spirit of the thing:
". . .Helpful insights, however, need not become rigid and mandatory formulas. If it is so applied, the TSM test is incompatible with this Court’s precedents. The diversity of inventive pursuits and of modern technology counsels against confining the obviousness analysis by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasizing the importance of published articles and the explicit content of issued patents. In many fields there may be little discussion of obvious techniques or combinations, and market demand, rather than scientific literature, may often drive design trends. Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, for patents combining previously known elements, deprive prior inventions of their value or utility."
In other words, the Graham tests are history. (Update - not so fast! TSM was a construct of the CAFC, the Court of Appeals for the Federal Circuit, in an attempt to come up with an mechanism to apply the Graham decision). What replaces them? There's language in the ruling about "predictable" combinations of the prior art as opposed to "real innovation", but in the end, this is going to have to be thrashed out by years of lawsuits. If this had been a legislative act instead of a judicial ruling, it would be called the "Intellectual Property Lawyer's Perpetual Employment Act of 2007". Here's a post on the ruling from PatentBaristas (who also have an excellent roundup of other takes here).
What will this mean for pharma? Eventually (and this will take a while), it looks to me like it's going to be harder to do the sort of patent-extending moves with formulations, enantiomers, and such that we've seen so much of. Some of these are surely going to end up on the wrong side of the new obviousness line, when it gets drawn. That's going to be the biggest effect, I'd say, and overall, I'm not going to be sorry to see some of that stuff go.
I know that this ruling is going to be seen as a blow to the drug companies, and financially, that's what it's going to be. But in the long run, I think we're better off without incentives to dink and tweak existing drugs to extend their patent lives. It's profitable, and given our success rate in the clinic, we could use the money. But without the temptation to do this kind of thing, which is basically a moral hazard, we'll be forced to work on more substantial things. If some of these modifications really are an advance, then presumably they'll fall on the protected side of the patentability line, so we won't miss out on the really good stuff. The now-with-the-great-taste-of-fish innovations, though, I think we're better off without. It's not going to be easy to give them up, but hey, it's not an easy industry.