On August 9, 2002, a three-judge panel of the United States Court of Appeals for the Federal Circuit issued its opinion in
Bayer AG v. Schein Pharms., Inc., 301 F.3d 1306 (Fed. Cir. 2002), a patent infringement case involving the drug known as CIPRO. The Court found that the parent
application to the Bayer patent at issue satisfied the best mode requirement, and that Bayer was therefore entitled to the
filing date of the parent application in overcoming a section 102(d) validity challenge. Despite its uniform conclusion, the
Court split in its approach to the analysis of the best mode requirement, with the majority stating that the best mode of
making or using an invention must be disclosed if it "materially affects" the properties of the claimed invention.
Background
Bayer AG and Bayer Corporation (collectively, "Bayer") are the assignees of U.S. Patent No. 4,670,444, which is based on a
continuation of Application No. 292,560. Bayer filed the '560 application prior to filing related foreign patent applications.
Bayer, however, filed the continuation application that issued as the '444 patent more than twelve months after the foreign
patent applications were filed, and after several of the foreign patents had issued. Thus, the '444 patent relied on the benefit
of the '560 application date in order to avoid invalidity under 35 U.S.C. §102(d).
The '444 patent is directed to a class of chemical compounds that includes ciprofloxacin, a broad-spectrum antibiotic sold
by Bayer under the brand name CIPRO. The '444 patent is based on the work of Dr. Grohe, a scientist at Bayer, who developed
a standard synthetic methodology to construct certain antibiotics. Dr. Grohe used his method to successfully make numerous
compounds similar in structure to ciprofloxacin. However, his standard method failed when he attempted to make ciprofloxacin
because he could not make the starting material he needed for the first step in his methodology (a compound known as 6-FQA).
He therefore enlisted the help of one of his colleagues at Bayer, Dr. Klauke, who synthesized the precursor (the "Klauke compound")
needed to make the 6-FQA compound. Once obtaining the Klauke compound, Dr. Grohe performed his general synthetic method to
make ciprofloxacin. Among other patents, Bayer obtained patents on the Klauke compound (U.S. Patent No. 4,439,620) and the
class of compounds derived from Dr. Grohe's method (the '444 patent).
Bayer later sued Schein Pharmaceuticals and others, alleging infringement of the '444 patent. Defendants raised an affirmative
defense of invalidity under 35 U.S.C. §102(d), arguing that Bayer's foreign patents invalidated the '444 patent as prior art.
Defendants further argued that the '444 patent could not claim the benefit of the '560 application date, because the '560
application failed to meet the best mode requirement of 35 U.S.C. §112.
The district court held that the best mode requirement does not compel disclosure of unclaimed material. Although Dr. Grohe
did have a preference for using the class of compounds that includes the Klauke compound, the preference pertained to unclaimed
subject matter, and was not subject to the best mode requirement. Thus, the '444 patent was entitled to the filing date of
the '560 application, and was not invalid under section 102(d). The defendants appealed to the Federal Circuit.
The Federal Circuit
The Federal Circuit affirmed the district court's decision. Defendants argued before the Federal Circuit, as they did before
the district court, that the '560 application did not comply with the best mode requirement because it did not set forth the
best mode contemplated by Dr. Grohe for making ciprofloxacin.
The defendants conceded that both the Klauke compound and 6-FQA are intermediates not claimed in the '444 patent. Further,
defendants did not dispute that the '560 application's disclosure was sufficient to enable one skilled in the art to obtain
6-FQA. Nevertheless, defendants asserted that, because the Klauke compound and the synthesis of 6-FQA via the Klauke compound
were novel, disclosure of Dr. Grohe's preferred method of making 6-FQA was necessary to describe the best mode of the invention.
In other words, defendants argued that to meet the best mode requirement the '560 specification needed to provide the actual
synthetic route that Dr. Grohe preferred to make ciprofloxacin.
The Federal Circuit articulated the two-prong legal test for compliance with the best mode requirement. The first prong is
subjective, focusing on the inventor's state of mind at the time he filed the application; i.e., whether, at the time of filing,
the inventor considered a particular mode of practicing the invention to be the best mode. Bayer, 301 F.3d at 1320. The second prong is objective, asking whether the inventor's disclosure was adequate to enable one of
ordinary skill in the art to practice the best mode of the invention. Id.
The Federal Circuit emphasized that the best mode disclosure requirement only refers to the invention defined by the claims.
Id. at 1315-20. After examining a number of cases concerning the best mode requirement, the Court articulated that it has "held
a patent invalid for failure to satisfy the best mode requirement in two situations. First, [it has] invalidated patents when
they do not adequately disclose a preferred embodiment of the invention. . . . Second, [it has] invalidated patents when the
patentee failed to disclose aspects of making or using the claimed invention and the undisclosed matter materially affected the properties of the claimed invention." Id. at 1319 (emphasis added).
Having articulated the legal standard, the Court turned to applying the standard to the facts of the case. The Court noted
that it was undisputed that Dr. Grohe's subject preference was to make his invention by manipulating 6-FQA. Id. at 1321. However, the Court disagreed with defendants' position that Dr. Grohe needed to have disclosed his preferred route
to 6-FQA. Id. The Court looked to whether Dr. Grohe's method of making 6-FQA had a material effect on the properties of ciprofloxacin.
Id. at 1321-22. As defendants conceded, it did not. Id. Accordingly, the Court distinguished this case from others where it found a best mode violation, "where an undisclosed preference
clearly had a material affect on the properties of the claimed invention." Id. (emphasis added). Further, the Court specifically rejected defendants' argument that based on Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955 (Fed. Cir. 2001), cert. denied, 122 S. Ct. 913 (2002), Dr. Grohe's preferred route to 6-FQA was necessary because 6-FQA is novel. Bayer, 301 F.3d at 1322-23. Stating that the defendants misinterpreted Eli Lilly, the Court explained that Eli Lilly "merely acknowledged that when a novel compound is necessary to practice the best mode, one of skill in the art must be able
to obtain that compound. . . . the best mode [must] be enabled." Id. at 1322. Here, defendants conceded that the '560 application contained an enabling disclosure of 6-FQA.
Concurring Opinion
In a concurring opinion, Judge Rader commented that the alleged best mode in this case, the intermediate compound, falls outside
the scope of the claims. Accordingly, following the "scope of the claimed invention rule" governing the identification of
best modes, Bayer satisfied the best mode requirement. On that basis, he concurred with the district court's decision.
Judge Rader went on to criticize the majority's approach. Referring to the Court's apparent new "material effect" test for
best mode, he wrote that the "court purports to use this easy case to erect a new best mode test. Fortunately, both this court's
failure to find a best mode in this case and the wealth of prior case law render this Bayer case mostly dicta." Id. at 1328.
Implications
While the majority opinion is mostly dicta, it suggests widening the best mode requirement, beyond the scope of the claims,
to include "the properties of the claimed invention and . . . any material effect or impact on those properties." Id. at 1324. Application of the "material effect" test may create greater uncertainty, as district courts will be faced with
a number of difficult questions. For example, courts will need to determine the "properties" of the claimed invention, as
well as define a "material effect."How 'material' is 'material?'" Id. at 1328.
Additionally, should the material effect test be applied, it could lead to changes in patent drafting and place a significant
burden on inventors. As recognized by the Bayer majority, the best mode requirement is, in most cases, self-enforcing because failure to disclose critical material within
the best mode requirement can put the entire invention at risk. As such, "[i]nformed patent applicants will always either
disclose the best mode in the original patent's specification (often as a dependent claim) or, if the trade secret is not
part of the claimed invention . . . file a separate patent application on the separate [invention]." Id. at 1325. Application of the material effect test could force inventors to include all related inventions in one patent application,
for fear that any omission could be considered material.
If extended beyond the scope of the claimed invention, the best mode requirement may become a "minefield for wary and unwary
alike." Id. at 1326. As Judge Rader noted, applying the material effect test will create conflicts with many cases in which the Federal
Circuit found no best mode violation. One striking example is Teleflex v. Ficosa N. Am. Corp., 299 F.3d 1313 (Fed. Cir. 2002), which concerned a patent for a clip in an automobile shift cable. The Teleflex court stated that the claims did not mention any particular material, hardness, or thickness of the clip and, thus, such
information alleged to be part of the best mode and alleged to be missing from the disclosure was unclaimed subject matter.
Id. at 1327. In contrast, under the test suggested by Bayer, the properties of the clip (e.g., hardness, thickness) could be considered to materially affect the use and properties of
the clip and, consequently, trigger a best mode violation. Such conflicts between the material effect test and the case law
are likely to create further uncertainty. Indeed, this conflict appears directly counter to the Federal Circuit's aim of promulgating
a uniform body of patent law for inventors and patent practitioners to follow.
