Goeddel v. Sugano

United States Court of Appeals
for the Federal Circuit
__________________________

DAVID V. GOEDDEL AND ROBERTO CREA,
Appellants,

v.
HARUO SUGANO, MASAMI MURAMATSU,
AND TADATSUGU TANIGUCHI,
Appellees.
__________________________

2009-1156,-1157
(Interferences No. 105,334 and 105,337)
__________________________

Appeal from the United States Patent and Trademark
Office, Board of Patent Appeals and Interferences.
___________________________

Decided: September 7, 2010
___________________________

THOMAS E. FRIEBEL, Jones Day, of New York, New York,
argued for appellants. With him on the brief was GREGORY
A. CASTANIAS, of Washington, DC. Of counsel on the brief
were GEORGE M. GOULD, WILLIAM H. EPSTEIN, and DAVID E.
DE LORENZI, Gibbons P.C., of Newark, New Jersey.

NOAH A. LEVINE, Wilmer Cutler Pickering Hale and
Dorr LLP, of New York, New York, argued for appellees.
With him on the brief were NELS T. LIPPERT and JANE M.
GOEDDEL v. SUGANO 2

LOVE, of New York, New York; GREGORY H. LANTIER and
ARTHUR W. COVIELLO, of Washington, DC; and WILLIAM W.
KIM, of Palo Alto, California.
__________________________

Before NEWMAN, LOURIE, AND BRYSON, Circuit Judges.
NEWMAN, Circuit Judge.

This consolidated appeal is from two decisions of the
Board of Patent Appeals and Interferences of the United
States Patent and Trademark Office (“the Board”) in two
related patent interference priority contests between the
party Haruo Sugano, Masami Muramatsu, and Tadatsugu
Taniguchi (together “Sugano”) and the party David V.
Goeddel and Roberto Crea (together “Goeddel”). The Board
held that Sugano is entitled to the benefit of the filing date
of its initial Japanese application, and awarded Sugano
priority as to the counts of both interferences. 1 On appel-
late review, we conclude that the Japanese application does
not establish constructive reduction to practice of the sub-
ject matter of the counts. The priority decisions of the
Board are reversed.

BACKGROUND

The focus of both interferences is human fibroblast in-
terferon (“hFIF”), also called interferon beta or β-IF. This
interferon is produced naturally in the human body, in very
small amounts. Its effectiveness in combating pathogens

1 Goeddel v. Sugano, Interf. No. 105,334, Paper No.
109 (B.P.A.I. Sept. 29, 2008) (“Board Opinion”); Goeddel v.
Sugano, Interf. No. 105,337, Paper No. 112 (B.P.A.I. Sept.
29, 2008). The content of the Board’s opinions in both
interferences is the same. For simplicity we only provide
citations to the Board’s opinion in Interference No. 105, 334.
3 GOEDDEL v. SUGANO

and tumors was recognized, and scientists have sought to
produce hFIF in sufficient quantities for therapeutic use.

The scientific premises underlying the interference is-
sues are set forth in the Board decisions, and are briefly
summarized as follows: hFIF is a protein (or polypeptide)
that is produced in the human body by a complex process.
Within the human genome, which exists in almost all cells
of the body, is a naturally occurring gene (that is, a segment
of DNA) that codes for hFIF. The expression of this natu-
rally occurring gene produces a precursor form of hFIF,
consisting of 187 amino acids in a specific sequence. This
precursor protein is not the active form of hFIF. The active
form, called “mature” hFIF, is a protein consisting of 166
amino acids, which is produced inside the human cell upon
cleavage of the first 21 amino acids from the precursor
sequence of 187 amino acids. The cleaved sequence of 21
amino acids is called a “presequence” or “signal peptide.”
The cleavage of the presequence occurs in the endoplasmic
reticulum of the cell, before the protein is secreted from the
cell as mature hFIF.

In the patents and patent applications involved in this
interference, the parties describe and claim a recombinant
DNA process for directly producing mature hFIF. By this
process the naturally occurring gene is modified, and the
modified gene is inserted into a bacterium under conditions
whereby the bacterium produces the desired mature hFIF
without the presequence of the precursor hFIF. The ques-
tion of priority turns on whether Sugano’s initial Japanese
Patent Application No. 33931/80 constitutes a constructive
reduction to practice of the invention set forth in the Inter-
ference Counts, for only Sugano’s initial Japanese Applica-
tion predates Goeddel’s priority date.

The interference counts
GOEDDEL v. SUGANO 4

The interferences are referred to as the “DNA Interfer-
ence” and the “Protein Interference.” The DNA Interfer-
ence, No. 105,334, is directed to the modified DNA that
codes the 166 amino acid sequence of mature hFIF. The
Protein Interference, No. 105,337, relates to the non-
glycosylated mature hFIF that is thereby obtained.

The DNA Interference was declared between Goeddel’s
U.S. Patent Application No. 07/374,311, and two Sugano
patents, U.S. Patent No. 5,326,859 and its
continuation-in-part No. 5,514,567. Goeddel’s ’311 patent
application claims priority from U.S. Application No.
06/190,799, filed on September 25, 1980. The Board
awarded Sugano priority of invention based on the Japanese
Application, which was filed on March 19, 1980. Goeddel
argues that only a later Sugano application supports the
subject matter of the interference counts, and that Sugano
is not entitled to the Japanese Application priority date.

The sole count of the DNA Interference is:

A DNA encoding a mature human fibroblast inter-
feron having a total of 166 amino acids of the se-
quence

Met Ser Tyr Asn Leu Leu Gly Phe Leu Gln
Arg Ser Ser Asn Phe Gln Cys Gln Lys Leu
Leu Trp Gln Leu Asn Gly Arg Leu Glu Tyr
Cys Leu Lys Asp Arg Met Asn Phe Asp Ile
Pro Glu Glu Ile Lys Gln Leu Gln Gln Phe
Gln Lys Glu Asp Ala Ala Leu Thr Ile Tyr
Glu Met Leu Gln Asn Ile Phe Ala Ile Phe
Arg Gln Asp Ser Ser Ser Thr Gly Trp Asn
Glu Thr Ile Val Glu Asn Leu Leu Ala Asn
Val Tyr His Gln Ile Asn His Leu Lys Thr
Val Leu Glu Glu Lys Leu Glu Lys Glu Asp
5 GOEDDEL v. SUGANO

Phe Thr Arg Gly Lys Leu Met Ser Ser Leu
His Leu Lys Arg Tyr Tyr Gly Arg Ile Leu
His Tyr Leu Lys Ala Lys Glu Tyr Ser His
Cys Ala Trp Thr Ile Val Arg Val Glu Ile Leu
Arg Asn Phe Tyr Phe Ile Asn Arg Leu Thr
Gly Tyr Leu Arg Asn

and unaccompanied by a human fibroblast inter-
feron presequence.

Goeddel stresses that the count is directed to DNA encoding
for direct expression of the 166 amino acid mature hFIF
without the presequence, as opposed to the naturally occur-
ring DNA that expresses only the 187 amino acid precursor
hFIF including the presequence. It is not disputed that
known recombinant techniques were not effective to produce
mature hFIF directly from the naturally occurring gene
because the bacterial cells used in recombinant procedures
could not reliably cleave the 21 amino acid presequence
from the precursor hFIF.

The Protein Interference was declared between Sugano’s
U.S. Application No. 08/463,757, filed June 5, 1995, and
Goeddel’s U.S. Patent No. 5,460,811, which claims priority
from U.S. Application No. 06/190,799 filed on September 25,
1980. The Board awarded Sugano’s ‘757 application the
benefit of the Japanese Application’s March 19, 1980 filing
date. The sole count of the Protein Interference is:

A composition comprising water and a nonglycosy-
lated mature human fibroblast interferon polypep-
tide having a total of 166 amino acids and the
following amino acid sequence
GOEDDEL v. SUGANO 6

Met Ser Tyr Asn Leu Leu Gly Phe Leu Gln
Arg Ser Ser Asn Phe Gln Cys Gln Lys Leu
Leu Trp Gln Leu Asn Gly Arg Leu Glu Tyr
Cys Leu Lys Asp Arg Met Asn Phe Asp Ile
Pro Glu Glu Ile Lys Gln Leu Gln Gln Phe
Gln Lys Glu Asp Ala Ala Leu Thr Ile Tyr
Glu Met Leu Gln Asn Ile Phe Ala Ile Phe
Arg Gln Asp Ser Ser Ser Thr Gly Trp Asn
Glu Thr Ile Val Glu Asn Leu Leu Ala Asn
Val Tyr His Gln Ile Asn His Leu Lys Thr
Val Leu Glu Glu Lys Leu Glu Lys Glu Asp
Phe Thr Arg Gly Lys Leu Met Ser Ser Leu
His Leu Lys Arg Tyr Tyr Gly Arg Ile Leu
His Tyr Leu Lys Ala Lys Glu Tyr Ser His
Cys Ala Trp Thr Ile Val Arg Val Glu Ile Leu
Arg Asn Phe Tyr Phe Ile Asn Arg Leu Thr
Gly Tyr Leu Arg Asn

said composition being free of any glycosylated hu-
man fibroblast interferon.

The Board held that Sugano’s Japanese Application con-
stituted constructive reduction to practice of the subject
matter of the counts of both interferences, and awarded
priority to Sugano. Goeddel argues that the Japanese
Application does not meet the written description and
enablement requirements of 35 U.S.C. §112 with respect to
the interference counts, and therefore is not a constructive
reduction to practice of the counts. Goeddel points out that
the Japanese Application “is devoid of any disclosure of a
method of making the claimed subject matter,” Board
Opinion at 40, and that the plasmids described in the Japa-
nese Application “would not function to express mature
hFIF,” as Sugano conceded. Board Opinion at 38. Sugano
responds that persons experienced in this field would have
known how to modify the precursor hFIF gene so that it
7 GOEDDEL v. SUGANO

would express mature hFIF, using the teachings in the
Japanese Application, and that judicial deference is owed to
the Board’s findings and priority decisions.

DISCUSSION

In accordance with the criteria of the Administrative
Procedure Act, 5 U.S.C. §706, the Board’s legal conclusions
receive plenary review, and factual findings are reviewed to
determine whether they are supported by substantial evi-
dence. These standards apply to an appeal of patent inter-
ference rulings. See Capon v. Eshhar, 418 F.3d 1349, 1351
(Fed. Cir. 2005).

Interference priority is awarded to the first applicant to
conceive the invention, provided that the invention is duly
reduced to practice, actually or constructively. See Hyatt v.
Boone, 146 F.3d 1348, 1351 (Fed. Cir. 1998); see generally
Charles L. Gholz, Interference Practice, in 6 Patent Practice,
24-1, 24-6 (Irving Kayton and Karyl S. Kayton eds., 4th ed.
1989). Reduction to practice of the subject of the interfer-
ence count may be established by evidence of its actual
performance, see Cooper v. Goldfarb, 154 F.3d 1321, 1327
(Fed. Cir. 1998), or constructively by filing a patent applica-
tion that describes and enables its practice in accordance
with 35 U.S.C. §112, see Hyatt, 146 F.3d at 1352. An inven-
tion for which the priority of a foreign patent application is
available in accordance with treaty and statute may rely on
the content of the foreign application for constructive reduc-
tion to practice, provided that the requirements of §112 are
met. See Gholz, supra, at 24-8.

The Sugano Japanese Application describes the inven-
tion therein as: “a novel recombinant plasmid, having a gene
which encompasses at least the entire coding region of the
human fibroblast interferon messenger RNA . . . .” J.A.
GOEDDEL v. SUGANO 8

306436 (English Translation of Japanese Translation)
[hereinafter “JP 931 Transl.”]. The application states: “The
‘entire coding region’ means the part specifying the whole
amino acid sequence of the protein of the human fibroblast
interferon in the human fibroblast interferon messenger
RNA sequence. JP 931 Transl. Table 5 of the Japanese
Application lists the entire 187 amino acid sequence, with-
out indication of either the presequence or the mature hFIF
sequence JP 931 Transl. The Board found that the gene
described in the Japanese Application encodes the 187
amino acid precursor hFIF. Board Opinion at 38. The
Board also found that “[t]he sequences of mature hFIF DNA
or polypeptide are not explicitly disclosed.” Board Opinion
at 44.

However, in awarding priority to Sugano the Board
found that mature hFIF would be “readily apparent” to a
person skilled in this field, in view of the Japanese Applica-
tion’s description of the precursor hFIF and a scientific
article by Knight that is referenced in the Japanese Applica-
tion as follows:

It is important that in the sequence there exist
without any errors the base sequence [three base
pairs] corresponding to the amino acid sequence
from the amino-terminal to 13th amino acid of the
human fibroblast interferon reported by Knight, et
al. [Science vol. 207, p. 525-526, (1980)]. The fact
proves that # 319-13 plasmid has the human fibro-
blast interferon mRNA sequence. Further, it is ap-
parent from the data of the primary sequence that
the plasmid encompasses the entire coding region of
the protein of the above mRNA and probably the
coding region of the signal peptide.
9 GOEDDEL v. SUGANO

JP 931 Transl. The Knight article is entitled “Human
Fibroblast Interferon: Amino Acid Sequence Analysis and
Amino Terminal Amino Acid Sequence,” and identifies the
first 13 amino acids of secreted (mature) hFIF. Sugano
argues that the partial Knight sequence “demarcated the
line between the DNA encoding the hFIF signal peptide and
the DNA encoding mature hFIF.” Sugano Br. at 30. Goed-
del argues that the reference to the Knight article was for
the purpose of verifying that Sugano had obtained “the
entire coding region,” but not to identify the separation
between the presequence and the mature hFIF sequence.
Goeddel stresses that the Japanese Application, including
the Knight sequence, does not describe a modified gene that
encodes only mature hFIF, does not describe mature hFIF
as directly expressed, and does not suggest such products or
the production of such products. Thus Goeddel argues that
the Japanese Application does not meet either the written
description or the enablement requirements.

The Board held that the Japanese Application satisfies
the requirements of constructive reduction to practice
because Knight’s partial sequence of the first 13 amino acids
of mature hFIF would allow a person skilled in the field of
the invention to determine where in the 187 amino acid
precursor the presequence ends and the mature sequence
begins. The Board stated that Goeddel’s expert, Dr. Rik
Derynck, admitted that a person skilled in this field would
have known how to trim the nucleotide sequence of the
precursor to create a recombinant plasmid for use in bacte-
ria to directly express mature hFIF, citing a declaration
submitted by Dr. Derynck in a European Patent Office
proceeding (concerning erythropoietin) in which he had
stated that once the complete DNA sequence encoding a
protein is known, it requires “no new technology” to express
the protein using bacterial expression cells. The Board held
that one skilled in this field “should have been able to
GOEDDEL v. SUGANO 10

envision” the DNA molecule that would encode mature hFIF
unaccompanied by its presequence, on the following reason-
ing:

(1) Table 5 [of the Japanese Application]
disclosed the precursor sequence,

(2) Knight is discussed in the ’931 JP appli-
cation as disclosing the first 13 amino acids
of mature hFIF, and

(3) Table 5 discloses the end point of hFIF.

Board Opinion at 44-45. Referring to the high level of skill
in this field, the Board held that although not explicitly
described in the Japanese Application, “the amino acid of,
and DNA sequence encoding, mature hFIF would be readily
apparent.” Board Opinion at 44-45. Accordingly, the Board
held that a person of skill in the field of the invention,
reading the Japanese Application, would conclude that
Sugano was in possession of the invention of the interfer-
ence counts.

Goeddel argues that the Board erred in finding con-
structive reduction to practice, for the Japanese Application
describes only the expression of precursor hFIF. Sugano
conceded before the Board that the Japanese Application
does not describe plasmids that express mature hFIF di-
rectly. Board Opinion at 38. Sugano’s expert, Dr. Thomas
Roberts, testified that the Japanese Application does not
state where the presequence ends and where the mature
hFIF sequence begins:

Page 15 of the Japanese application lists the nucleo-
tide sequence of the human fibroblast interferon
сDNA and encoded amino acids. The amino acid se-
quence contains the leader or presequence of inter-
11 GOEDDEL v. SUGANO

feron as well as the mature protein sequence, but
does not explicitly demarcate where the prese-
quence ends and where the mature protein sequence
begins.

J.A. 306518-19 at ¶44 n.1 (Roberts Declaration). Although
Dr. Roberts’s opinion was that “in view of the Knight disclo-
sures, one of ordinary skill would have immediately under-
stood that the presequence consists of the first 21 amino
acids because the Knight disclosures teach that the mature
sequence begins with the amino acid sequence Met-Ser-Tyr-
Asn-Leu-Leu-Gly-Phe-Leu-GIn-Arg-Ser-Ser,” id., construc-
tive reduction to practice “is ‘not a question of whether one
skilled in the art might be able to construct the patentee’s
device from the teachings of the disclosure. . . . Rather, it is
a question whether the application necessarily discloses
that particular device.’” Purdue Pharma L.P. v. Faulding
Inc., 230 F.3d 1320, 1326-27 (Fed. Cir. 2000) (quoting Jep-
son v. Coleman, 314 F.2d 533, 536 (CCPA 1963)).

Dr. Derynck agreed that the Japanese Application iden-
tified the DNA coding for precursor hFIF, and recognized
the Japanese Application’s statement that the sequence
disclosed therein “probably [includes] the coding region of
the signal peptide,” but testified that the Japanese Applica-
tion “does not identify the reported 187-amino acid sequence
as a precursor protein, nor does this application identify
either the 166-amino acid mature form of human fibroblast
[interferon] nor the 21-amino acid signal peptide.”
J.A.301544 at ¶157 (Derynck Declaration).

Sugano does not dispute that the Japanese Application
does not explicitly show a DNA encoding mature hFIF or
suggest using such DNA to encode mature hFIF without the
presequence. Instead, Sugano argues that it is unnecessary
for the Japanese Application to describe explicitly the amino
GOEDDEL v. SUGANO 12

acid sequence of mature hFIF or suggest obtaining mature
hFIF. Sugano argues that patent applications are “written
for a person of skill in the art, and such a person comes to
the patent with the knowledge of what has come before,”
and thus “it is unnecessary to spell out every detail of the
invention in the specification.” Lizard Tech, Inc. v. Earth
Res. Mapping, Inc., 424 F.3d 1336, 1345 (Fed. Cir. 2005).
Thus Sugano argues that it sufficed that the Japanese
Application referred to the Knight article, for with that
article the Japanese Application “conveyed” mature hFIF
with “reasonable clarity” to a person of skill in the art, citing
Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563-64 (Fed.
Cir. 1991) for its “reasonable clarity” standard. Sugano
states that Goeddel conceded, as the Board found, that “[a]s
of March 19, 1980, one of ordinary skill recognized that a
DNA encoding the hFIF precursor would not be itself useful
for expressing mature hFIF in E. coli,” Board Opinion at 19,
thereby indicating that one of ordinary skill would read the
Japanese Application with particular attention to any
information related to identifying DNA coding for mature
hFIF.

Goeddel responds that the problem of obtaining mature
hFIF was indeed recognized, but that Sugano did not solve
it. Although the experts for both sides agreed that a skilled
person “could” identify the boundary between the prese-
quence and the mature hFIF based on the Knight article,
the Japanese Application does not describe the subject
matter of the interference counts. The Japanese Application
does not describe mature hFIF and does not describe the
DNA coding for mature hFIF unaccompanied by the prese-
quence. Sugano described its invention, in the initial Japa-
nese Application, as the recombinant production of the 187
amino acid precursor, using a gene that encompasses “at
least the entire coding region.” Section 112, in the context
of interference priority, requires that the subject matter of
13 GOEDDEL v. SUGANO

the counts be described sufficiently to show that the appli-
cant was in possession of the invention. That a modified
gene encoding the 166 amino acid protein could have been
“envisioned” does not establish constructive reduction to
practice of the modified gene. The question is not whether
one skilled in this field of science might have been able to
produce mature hFIF by building upon the teachings of the
Japanese Application, but rather whether that application
“convey[ed] to those skilled in the art that the inventor had
possession of the claimed subject matter as of the filing
date.” Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336,
1351 (Fed. Cir. 2010) (en banc); see also Lockwood v. Ameri-
can Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997) (in
claiming priority under §120, “[a] description which renders
obvious the invention for which an earlier filing date is
sought is not sufficient”); Bradford Co. v. Conteyor North
Am., Inc., 603 F.3d 1262, 1269 (Fed. Cir. 2010) (same). The
Japanese application does not describe a bacterial expres-
sion vector that directly produces the mature hFIF, nor does
it suggest producing a modified gene to directly encode the
166 amino acid mature hFIF.

The Board erred in ruling that priority is established if
a person of skill in the art could “envision” the invention of
the counts. Sugano argues that this ruling is supported by
Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956, 968
(Fed. Cir. 2002) and University of Rochester v. G.D. Searle &
Co., 358 F.3d 916, 923 (Fed. Cir. 2004), but these cases do
not hold that envisioning an invention not yet made is a
constructive reduction to practice of that invention. In Enzo
Biochem the court confirmed that depositing an actual
sample may meet the written description requirement when
science is not capable of a complete written description.
Enzo Biochem, 323 F.3d at 970. In University of Rochester
the court held that the description of the COX-2 enzyme did
not also serve to describe all unknown compounds capable of
GOEDDEL v. SUGANO 14

inhibiting the enzyme. University of Rochester, 358 F.3d at
926-27. Precedent in evolving science is attuned to the state
of the science, but remains bound by the requirement of
showing “that the inventor actually invented the invention
claimed.” Bradford, 603 F.3d at 1269; see Fiers v. Revel, 984
F.2d 1164, 1170 (Fed. Cir. 1993).

The Board’s decision that the Japanese Application con-
stitutes constructive reduction to practice of the subject
matter of these interferences is not in accordance with law,
for the Japanese Application does not meet the criteria of
§112, first paragraph, as to this subject matter. The award
of priority to Sugano is reversed. The cases are remanded
for appropriate further proceedings.

REVERSED AND REMANDED