Federal Circuit Negative on Best-mode Defense

The basic two-part analysis for determining compliance with the best-mode requirement has remained largely unchanged. The first part is a subjective inquiry that asks whether the inventor contemplated a best mode for practicing the claimed invention at the time the patent application was filed. The second part is objective, inquiring as to whether the inventor's disclosure is sufficient to enable one of skill in the art to practice that mode.

The nature of the disclosure required to satisfy the best-mode requirement is governed by the scope of the invention as defined by the claims of the patent and the level of skill in the art. What has changed is the manner in which the Federal Circuit approaches the best-mode analysis: What was traditionally a fact-based inquiry is becoming a quasi-legal analysis centered on the claimed invention. For example, in Northern Telecom Ltd. v. Samsung Elecs. Co., 215 F.3d 1281 (Fed. Cir. 2000), the court stated that the best-mode analysis is a factual one, but emphasized the central role of defining the claimed invention, which is a legal inquiry.

In Bayer, the Federal Circuit noted that only after the trial court defines the 'claimed invention' can the best-mode analysis proceed. The Federal Circuit wrote: 'Because the scope of the invention obviously impacts what it means to carry out the invention, in Northern Telecom we held that the first step in a best-mode inquiry, before application of the familiar two-part best-mode test, must be to define the invention by construing the claims.'

Once the analysis does proceed, the Federal Circuit rigidly compares the scope of the invention it has defined with the subject matter that allegedly should have been disclosed to determine whether a best-mode violation has occurred. In Eli Lilly, the court unequivocally stated that 'the extent of information that an inventor must disclose depends on the scope of the claimed invention.'

This emphasis on the 'scope of the claimed invention rule' has converted the best-mode analysis into a mechanical exercise in which failure to disclose subject matter outside of the claimed invention (as defined by the court) rarely results in a best-mode violation. In Bayer, the Federal Circuit cited only four cases in which patent claims were invalidated for failure to disclose subject matter outside of the claimed invention.

The significance of the Federal Circuit's transformation of the best-mode inquiry into a quasi-legal, claim-focused analysis cannot be understated, because the definition of the claimed invention is typically outcome determinative. Indeed, in Markman v. Westview Instruments Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), Chief Judge H. Robert Mayer noted in his concurrence that in the context of infringement, 'to decide what the claims mean is nearly always to decide the case.' This transformation of the best-mode inquiry has thus enabled the Federal Circuit to minimize both the reach and the effects of this particular defense.

This is particularly true in the case of pharmaceutical inventions that have been claimed as new compounds. The best mode of 'carrying out' the compound is necessarily complex when the compound must be made through an elaborate, multistep preparation using a variety of solvents, starting materials and reactions. The Federal Circuit, however, has greatly simplified the best-mode analysis in this context by focusing on little other than the claimed pharmaceutical compounds.

One example of the Federal Circuit's quasi-legal, claim-focused best-mode analysis is the Eli Lilly case. There, the claimed inventions pertained to fluoxetine HCl (Prozac) and a method of blocking serotonin uptake using that compound. Barr Labs sought to invalidate the asserted claims for two alleged best-mode violations: failure to disclose a preferred method of synthesizing p-trifluoromethylphenol (one of the starting materials used to make fluoxetine HCl), and failure to disclose the recrystallization solvent used to purify fluoxetine HCl. The Federal Circuit rejected both arguments.

As for the method of synthesizing p-trifluoromethylphenol, the court steadfastly adhered to the invention defined by the claims, reasoning as follows: 'Neither patent … claims p-trifluoromethylphenol itself or a method for synthesizing it. Thus, while the best mode for developing fluoxetine hydrochloride involves use of p-trifluoromethylphenol, the claimed inventions do not cover p-trifluoromethylphenol and the patents do not accord Lilly the right to exclude others from practicing Molloy's method for synthesizing p-trifluoromethylphenol. As a result, the best mode requirement does not compel disclosure of Molloy's unclaimed method for synthesizing p-trifluoromethylphenol.'

The court then dismissed the 'amalgam of evidence' in support of the alleged best-mode violation as mere 'production details' falling outside the ambit of the best-mode requirement.

The Federal Circuit also rejected Barr Labs' argument regarding the recrystallization solvent, characterizing that unclaimed subject matter as a 'routine detail' that also need not have been disclosed. The court again emphasized that the undisclosed information fell outside the scope of the claimed invention, holding that 'failure to disclose a preferred solvent does not equate to a best-mode violation because the patents simply do not claim a recrystallization process or a recrystallization solvent.'

Other recent Federal Circuit decisions involving the engineering arts have also followed the 'scope of the claimed invention' rule in rejecting best-mode defenses, with these decisions making a special point of cataloging a multitude of cases to support that approach. In Teleflex Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313 (Fed. Cir. 2002), the court determined that there was no best-mode violation stemming from a failure to disclose production details for a 'clip core coupling' when these details were governed by customer requirements and did not fall within the scope of the claims. Similarly, in Northern Telecom, the court held that there was no best-mode violation arising from a failure to disclose the use of aluminum silicon alloy to achieve fine line etching when '[f]ine line etching is simply not part of the claimed invention.'

While Eli Lilly, Teleflex, Northern Telecom and other recent Federal Circuit decisions have clung tightly to the 'scope of the claimed invention' approach, one recent case, Bayer A.G. v. Schein Pharmaceuticals Inc., appears to have created a somewhat broader rule that takes into account circumstances, albeit very limited ones, in which unclaimed subject matter must be disclosed to avoid a best-mode violation.

In Bayer, the claims at issue were directed to the class of compounds related to, and including, the anti-bacterial compound ciprofloxacin (Cipro) and methods of administering such compounds. The Federal Circuit rejected Schein's argument that failure to disclose a preferred way of synthesizing an unclaimed chemical precursor to ciprofloxacin violated the best-mode requirement because 'that preference does not materially affect carrying out the invention, ciprofloxacin.'

In doing so, the Federal Circuit articulated a rule that, according to the concurrence in Bayer, expands the 'scope of the claimed invention' analysis: 'Preferences that are reflected in a preferred embodiment or that relate to making or using the invention and have a material effect on the properties of the claimed invention must be disclosed.' In response to this rule, Judge Randall R. Rader noted in his concurrence that 'inexplicably and without support in the statute or case law, this Bayer opinion widens its best-mode net [beyond the scope of the claimed invention rule] to capture the properties of the claimed invention and further sweeps in any material effect or impact on those properties.' As Rader pointed out, the court does not, however, define what constitutes a 'material effect.'

Although Rader is correct that the majority's analysis may represent something of an expansion of the scope of the claimed invention rule, the substance of the majority opinion suggests that his concerns may be unwarranted. The majority opinion emphasizes the central role of the claimed invention in the best-mode analysis and catalogs numerous cases to that effect. Indeed, Bayer is nearly indistinguishable in this regard from Teleflex and Northern Telecom, which likewise cited legions of scope of the claimed invention rule cases ' but, unlike Bayer, actually applied the rule.

Thus, while the court in Bayer may have been articulating a new approach, the reality is that the scope of the claimed invention rule still governs the best-mode analysis. Indeed, that court noted, 'Our cases examining the scope of the best-mode requirement demonstrate that the best-mode disclosure requirement only refers to the invention defined by the claims.'

Moreover, it is clear that the majority's 'material effects' rule in Bayer is not meant to establish a new, more punitive rule that may serve to trap unsuspecting patentees. Rather, by emphasizing the well-established scope of the claimed invention rule and by noting that a mere seven cases in the history of the Federal Circuit and its predecessor courts have ever invalidated a patent claim for failure to satisfy the best-mode requirement, it is clear that the majority was creating a narrow, albeit reformulated, rule.

Indeed, while the concurrence characterizes the majority's rule as 'new,' it may be better characterized as an attempt to harmonize the scope of the claimed invention rule with existing precedent in which failure to disclose unclaimed subject matter resulted in the invalidation of patent claims.

It is clear that best-mode decisions such as Eli Lilly and Bayer have consistently emphasized the legal aspects of the best-mode inquiry and focused on the scope of the claimed invention. Although the Bayer decision might be viewed as creating a new approach that looks beyond the claims to certain unclaimed subject matter, the reality is that the reasoning in Bayer does not differ appreciably from that of Eli Lilly and other recent best-mode cases.

Bayer adopts nearly all the reasoning of the recent scope of the claimed invention rule decisions, possibly extends the scope of the inquiry to a very limited type of unclaimed subject matter and otherwise harmonizes best-mode precedent. As such, the claim-focused reasoning of Bayer, Eli Lilly and other recent Federal Circuit decisions leads one to conclude that the best-mode defense is, in many cases, of limited value in defending allegations of patent infringement, particularly with respect to pharmaceutical patents.

The U.S. Court of Appeals for the Federal Circuit has taken an increasingly dim view of an accused infringer's attempt to invalidate the claims of a patent-in-suit by alleging that the patentee failed to satisfy the best-mode requirement.

Recent Federal Circuit decisions, such as Eli Lilly & Co. v. Barr Labs. Inc. , 251 F.3d 955 (Fed. Cir. 2001), and Bayer A.G. v. Schein Pharms. Inc. , 301 F.3d 1306 (Fed. Cir. 2002), have, with near uniformity, converted the best-mode analysis into a narrow, quasi-legal inquiry that focuses on the scope of the claimed invention, with careful attention to just what is claimed. The specification of all patents, including those claiming pharmaceutical inventions, must 'set forth the best mode contemplated by the inventor of carrying out his invention.' 35 U.S.C. 112, 1. As the Eli Lilly court stated, this best-mode requirement embodies a quid pro quo whereby a 'patentee must not receive the right to exclude others unless at the time of filing he has provided an adequate disclosure of the best mode.' The penalty for failure to satisfy this requirement is harsh: The patent claims covering the subject matter for which the best mode was not disclosed are rendered invalid. See Amgen Inc. v. Chugai Pharm. Co. , 927 F.2d 1200, 1209 n.5 (Fed. Cir. 1991).

The claim-focused reasoning of Bayer, Eli Lilly and other recent cases suggests that the best-mode defense is, in many cases, of limited utility in countering allegations of patent infringement, particularly in the context of pharmaceutical patents.

The basic two-part analysis for determining compliance with the best-mode requirement has remained largely unchanged. The first part is a subjective inquiry that asks whether the inventor contemplated a best mode for practicing the claimed invention at the time the patent application was filed. The second part is objective, inquiring as to whether the inventor's disclosure is sufficient to enable one of skill in the art to practice that mode.

The nature of the disclosure required to satisfy the best-mode requirement is governed by the scope of the invention as defined by the claims of the patent and the level of skill in the art. What has changed is the manner in which the Federal Circuit approaches the best-mode analysis: What was traditionally a fact-based inquiry is becoming a quasi-legal analysis centered on the claimed invention. For example, in Northern Telecom Ltd. v. Samsung Elecs. Co. , 215 F.3d 1281 (Fed. Cir. 2000), the court stated that the best-mode analysis is a factual one, but emphasized the central role of defining the claimed invention, which is a legal inquiry.

In Bayer, the Federal Circuit noted that only after the trial court defines the 'claimed invention' can the best-mode analysis proceed. The Federal Circuit wrote: 'Because the scope of the invention obviously impacts what it means to carry out the invention, in Northern Telecom we held that the first step in a best-mode inquiry, before application of the familiar two-part best-mode test, must be to define the invention by construing the claims.'

Once the analysis does proceed, the Federal Circuit rigidly compares the scope of the invention it has defined with the subject matter that allegedly should have been disclosed to determine whether a best-mode violation has occurred. In Eli Lilly, the court unequivocally stated that 'the extent of information that an inventor must disclose depends on the scope of the claimed invention.'

This emphasis on the 'scope of the claimed invention rule' has converted the best-mode analysis into a mechanical exercise in which failure to disclose subject matter outside of the claimed invention (as defined by the court) rarely results in a best-mode violation. In Bayer, the Federal Circuit cited only four cases in which patent claims were invalidated for failure to disclose subject matter outside of the claimed invention.

The significance of the Federal Circuit's transformation of the best-mode inquiry into a quasi-legal, claim-focused analysis cannot be understated, because the definition of the claimed invention is typically outcome determinative. Indeed, in Markman v. Westview Instruments Inc. , 52 F.3d 967 (Fed. Cir. 1995) (en banc), Chief Judge H. Robert Mayer noted in his concurrence that in the context of infringement, 'to decide what the claims mean is nearly always to decide the case.' This transformation of the best-mode inquiry has thus enabled the Federal Circuit to minimize both the reach and the effects of this particular defense.

This is particularly true in the case of pharmaceutical inventions that have been claimed as new compounds. The best mode of 'carrying out' the compound is necessarily complex when the compound must be made through an elaborate, multistep preparation using a variety of solvents, starting materials and reactions. The Federal Circuit, however, has greatly simplified the best-mode analysis in this context by focusing on little other than the claimed pharmaceutical compounds.

One example of the Federal Circuit's quasi-legal, claim-focused best-mode analysis is the Eli Lilly case. There, the claimed inventions pertained to fluoxetine HCl (Prozac) and a method of blocking serotonin uptake using that compound. Barr Labs sought to invalidate the asserted claims for two alleged best-mode violations: failure to disclose a preferred method of synthesizing p-trifluoromethylphenol (one of the starting materials used to make fluoxetine HCl), and failure to disclose the recrystallization solvent used to purify fluoxetine HCl. The Federal Circuit rejected both arguments.

As for the method of synthesizing p-trifluoromethylphenol, the court steadfastly adhered to the invention defined by the claims, reasoning as follows: 'Neither patent … claims p-trifluoromethylphenol itself or a method for synthesizing it. Thus, while the best mode for developing fluoxetine hydrochloride involves use of p-trifluoromethylphenol, the claimed inventions do not cover p-trifluoromethylphenol and the patents do not accord Lilly the right to exclude others from practicing Molloy's method for synthesizing p-trifluoromethylphenol. As a result, the best mode requirement does not compel disclosure of Molloy's unclaimed method for synthesizing p-trifluoromethylphenol.'

The court then dismissed the 'amalgam of evidence' in support of the alleged best-mode violation as mere 'production details' falling outside the ambit of the best-mode requirement.

The Federal Circuit also rejected Barr Labs' argument regarding the recrystallization solvent, characterizing that unclaimed subject matter as a 'routine detail' that also need not have been disclosed. The court again emphasized that the undisclosed information fell outside the scope of the claimed invention, holding that 'failure to disclose a preferred solvent does not equate to a best-mode violation because the patents simply do not claim a recrystallization process or a recrystallization solvent.'

Other recent Federal Circuit decisions involving the engineering arts have also followed the 'scope of the claimed invention' rule in rejecting best-mode defenses, with these decisions making a special point of cataloging a multitude of cases to support that approach. In Teleflex Inc. v. Ficosa N. Am. Corp. , 299 F.3d 1313 (Fed. Cir. 2002), the court determined that there was no best-mode violation stemming from a failure to disclose production details for a 'clip core coupling' when these details were governed by customer requirements and did not fall within the scope of the claims. Similarly, in Northern Telecom, the court held that there was no best-mode violation arising from a failure to disclose the use of aluminum silicon alloy to achieve fine line etching when '[f]ine line etching is simply not part of the claimed invention.'

While Eli Lilly, Teleflex, Northern Telecom and other recent Federal Circuit decisions have clung tightly to the 'scope of the claimed invention' approach, one recent case, Bayer A.G. v. Schein Pharmaceuticals Inc., appears to have created a somewhat broader rule that takes into account circumstances, albeit very limited ones, in which unclaimed subject matter must be disclosed to avoid a best-mode violation.

In Bayer, the claims at issue were directed to the class of compounds related to, and including, the anti-bacterial compound ciprofloxacin (Cipro) and methods of administering such compounds. The Federal Circuit rejected Schein's argument that failure to disclose a preferred way of synthesizing an unclaimed chemical precursor to ciprofloxacin violated the best-mode requirement because 'that preference does not materially affect carrying out the invention, ciprofloxacin.'

In doing so, the Federal Circuit articulated a rule that, according to the concurrence in Bayer, expands the 'scope of the claimed invention' analysis: 'Preferences that are reflected in a preferred embodiment or that relate to making or using the invention and have a material effect on the properties of the claimed invention must be disclosed.' In response to this rule, Judge Randall R. Rader noted in his concurrence that 'inexplicably and without support in the statute or case law, this Bayer opinion widens its best-mode net [beyond the scope of the claimed invention rule] to capture the properties of the claimed invention and further sweeps in any material effect or impact on those properties.' As Rader pointed out, the court does not, however, define what constitutes a 'material effect.'

Although Rader is correct that the majority's analysis may represent something of an expansion of the scope of the claimed invention rule, the substance of the majority opinion suggests that his concerns may be unwarranted. The majority opinion emphasizes the central role of the claimed invention in the best-mode analysis and catalogs numerous cases to that effect. Indeed, Bayer is nearly indistinguishable in this regard from Teleflex and Northern Telecom, which likewise cited legions of scope of the claimed invention rule cases ' but, unlike Bayer, actually applied the rule.

Thus, while the court in Bayer may have been articulating a new approach, the reality is that the scope of the claimed invention rule still governs the best-mode analysis. Indeed, that court noted, 'Our cases examining the scope of the best-mode requirement demonstrate that the best-mode disclosure requirement only refers to the invention defined by the claims.'

Moreover, it is clear that the majority's 'material effects' rule in Bayer is not meant to establish a new, more punitive rule that may serve to trap unsuspecting patentees. Rather, by emphasizing the well-established scope of the claimed invention rule and by noting that a mere seven cases in the history of the Federal Circuit and its predecessor courts have ever invalidated a patent claim for failure to satisfy the best-mode requirement, it is clear that the majority was creating a narrow, albeit reformulated, rule.

Indeed, while the concurrence characterizes the majority's rule as 'new,' it may be better characterized as an attempt to harmonize the scope of the claimed invention rule with existing precedent in which failure to disclose unclaimed subject matter resulted in the invalidation of patent claims.

It is clear that best-mode decisions such as Eli Lilly and Bayer have consistently emphasized the legal aspects of the best-mode inquiry and focused on the scope of the claimed invention. Although the Bayer decision might be viewed as creating a new approach that looks beyond the claims to certain unclaimed subject matter, the reality is that the reasoning in Bayer does not differ appreciably from that of Eli Lilly and other recent best-mode cases.

Bayer adopts nearly all the reasoning of the recent scope of the claimed invention rule decisions, possibly extends the scope of the inquiry to a very limited type of unclaimed subject matter and otherwise harmonizes best-mode precedent. As such, the claim-focused reasoning of Bayer, Eli Lilly and other recent Federal Circuit decisions leads one to conclude that the best-mode defense is, in many cases, of limited value in defending allegations of patent infringement, particularly with respect to pharmaceutical patents.