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Supreme Court vacated Intellectual Property High Court (IPHC) decision 2017 (Gyo-Ke) 10003 because IPHC erred in finding unpredictable surprising effect and remanded for further consideration.

1.  Summary
a.  Background
Petitioner filed a patent application claiming “Topical ophthalmic formulations containing doxepin derivatives for
treating allergic eye diseases” on May 3, 1996 with a priority date of June 6, 1995 (US), granted as JP 3068858 B
(‘858 patent) on May 19, 2000.  Before being brought up to the Supreme Court, the case was appealed and
remanded three times (first to third stages).  In the first stage, respondent filed an invalidation trial with the Japan Patent Office (JPO) which found that the claims lack inventive step (JPO 1st Decision).  Respondent filed an appeal to the Intellectual Property High Court (IPHC).  During the proceedings at IPHC, claims were corrected by way of
correction trial at JPO, which resulted in that IPHC reversed JPO 1st Decision and remanded (IPHC 1st Decision). 
In the second stage, JPO found that the claims were inventive (JPO 2nd Decision).  Then, respondent filed an
appeal to IPHC, which decided that the claims lack inventive step because it would have been obvious to apply
KW-4689 to the use for an ophthalmic stabilizing agent for human conjunctival mast cells and remanded the case
again to JPO (IPHC 2nd Decision).  In the third stage, JPO found that the claims were inventive because it has an
unpredictable surprising effect (JPO 3rd Decision).  Respondent again filed an appeal to IPHC challenging the JPO
3rd Decision.  Regarding the unpredictable surprising effect, IPHC denied the alleged effect and found that the
claims lack inventive step (IPHC 3rd Decision).  Petitioner brought an appeal to the Supreme Court for challenging
IPHC 3rd Decision.

b.  Claims
Claims were corrected several times during the JPO invalidation trial proceedings.  Claims 1 and 5 at issue read
as follows:

Claim 1:  An ophthalmic stabilizing agent for human conjunctival mast cells prepared as a topically administrable
eye drop for treating allergic eye diseases in humans, comprising a therapeutically effective amount of
11-(3-dimethylaminopropylidene)-6,11-dihydrodibenz[b,e]oxepin-2-acetic acid, or a pharmaceutically acceptable
salt thereof.

Claim 5:  An ophthalmic stabilizing agent for human conjunctival mast cells prepared as a topically administrable
eye drop for treating allergic eye diseases in humans, comprising a therapeutically effective amount of
11-(3-dimethylaminopropylidene)-6,11-dihydrodibenz[b,e]oxepin-2-acetic acid, or a pharmaceutically acceptable
salt thereof, wherein the 11-(3-dimethylaminopropylidene)-6,11-dihydrodibenz[b,e]oxepin-2-acetic acid is
(Z)-11-(3-dimentylaminopropylidene)-6,11-dihydrodibenz[b,e]oxepin-2-acetic acid; and the agent is substantially
free of (E)-11-(3-dimentylaminopropylidene)-6,11-dihydrodibenz[b,e]oxepin-2-acetic acid and inhibits histamine
release from human conjunctival mast cells by 66.7% or more.

* Hereinafter, “11-(3-dimethylaminopropylidene)-6,11-dihydrodibenz[b,e]oxepin-2-acetic acid” in Claim 1 is
referred to as “Compound A.”
** Claim 5 was corrected as underlined during the proceedings of the third instance invalidation trial.

c.  Effect of Claimed Invention
The Supreme Court found that those skilled in the art, when reading the specification of ‘858 patent, would
understand the following effect of the invention:
 “compound A (cis-isomer) has recorded inhibition ratios of histamine release from human conjunctival tissue mast cells of 29.6% at 300 μM, 47.5% at 600 μM, 66.7% at 1000 μM, and 92.6% at 2000 μM;
 the inhibition ratio increased along with an increase of concentration within the concentration range from 30 μM
to 2000 μM;
 high histamine release inhibition ratio of 66.7% was exhibited at 1000 μM;
 high ratio of 92.6% was kept even at 2000 μM, which was a twofold concentration of the above”, and
 “in contrast, disodium cromoglycate and nedocromil sodium known as anti-allergic drugs failed to significantly
inhibit histamine release from human conjunctival tissue mast cells within the concentration range up to 2000 μM.”

d.  Cited Documents
Two prior art documents were cited during the prosecution at the JPO.
i) Cited Document 1: Chiaki Kamei, et al., “Influence of anti-allergic agent on experimental allergic conjunctivitis in
guinea pigs,” Atarashii Ganka (Journal of the eye) Vol. 11, No. 4 (1994), pages 603 to 605
Cited Document 1 reports that KW-4689 (the hydrochloride of the Z body of this matter compound) inhibited guinea pig allergic conjunctivitis.
ii) Cited Document 2: Japanese Unexamined Patent Application Publication No. 1988-10784
Cited Document 2 discloses an antiallergic drug newly containing dibenz [b,e] oxepin derivative as an active
ingredient, and shows that these compounds inhibit the isolation of the bioactive substance including the
histamine from a cell.

e. Disclosures
Neither document 1 nor 2 contains any clear statement regarding whether compound A has a histamine release
inhibitory action from human conjunctival mast cells or regarding the level of the effect in the case where
Compound A has that action.
Other documents published before the priority date of ‘858 patent disclose that a compound other than
compound A was used for 11 or 30 patients with Japanese cedar pollinosis, and ophthalmic challenge tests
with an antigen (allergic reaction challenge tests by instillation of a cedar antigen solution) were conducted. 
The histamine release inhibitory ratio in lacrimal fluid was measured 5 minutes and 10 minutes after instillation of
an eye drop.  The result showed as follows:
(i) For 0.0003% procaterol hydrochloride eye drop, the ratio was 79.0% on average 5 minutes after challenge and
82.5% on average 10 minutes after challenge.  For 0.001% procaterol hydrochloride eye drop, the ratio was 81.6%
on average 5 minutes after challenge and 89.5% 10 minutes after challenge.  For 0.003% procaterol hydrochloride
eye drop, the ratio was 81.7% on average 5 minutes after challenge and 90.7% 10 minutes after challenge.
(ii) For 0.05% ketotifen eye drop, the ratio was 67.5% on average 5 minutes after challenge and 67.2% on average 10 minutes after challenge.
(iii) For 2% disodium cromoglycate eye drop, the ratio was 73.8% on average 5 minutes after challenge and 67.5%
on average 10 minutes after challenge.
(iv) For 0.25% pemirolast potassium eye drop, the ratio was 71.8% on average 5 minutes after challenge and 61.3% on average 10 minutes after challenge.  For 0.1% pemirolast potassium eye drop, the ratio was 69.6% on average 5 minutes after challenge and 69.0% on average 10 minutes after challenge.

2.  JPO 3rd Decision
a.  Binding Effect of the Former Judgment
In the IPHC 2nd decision challenging the JPO 2nd decision, the court found that the claims lack inventive step and
remanded.  On remand, the JPO accepted the binding effect of the IPHC 2nd decision and found that it would have been obvious to apply KW-4689 (the hydrochloride of the Z body of this compound) to the use for an ophthalmic
stabilizing agent for human conjunctival mast cells.  Also, the JPO considered an unpredictability of effect which
was not considered in the IPHC 2nd decision and, as a result, found that the claims are inventive.

b.  Unpredictable Surprising Effect
The JPO 3rd decision said, “Document 1 discloses that KW-4689 (the hydrochloride of the Z body of this compound) does not inhibit histamine release from Guinea pig conjunctiva, that is, it does not have an effect of stabilizing
Guinea pig conjunctival mast cells.”  Further, the JPO 3rd decision found that “The description of this patent
describes that the histamine release inhibition ratio for ‘human conjunctival mast cells’ by compound A increased
until the high concentration (2000uM), and the maximum (92.6% of 2000uM) is extremely high compared to the
maximum (10.6% and 28.2% respectively) of contrast drugs (Cromolyn sodium and Nedocromil sodium).”  Thus,
the JPO decided that, although document 1 discloses that KW-4689 does not inhibit histamine release from Guinea pig conjunctiva, the effect of compound A has such a high histamine release inhibition ratio, which is unpredictably surprising.

3.  IPHC 3rd Decision
a.  Binding Effect
The IPHC 3rd decision stated that, if the court decision stating that the JPO erred by finding that claims are
inventive because those skilled in the art would not have arrived at the invention in light of cited prior arts was
revoked and then became confirmed, this decision binds the subsequent JPO trial proceedings and restricts the
JPO examiners from making a decision saying that claims would not have been obvious over the same documents.
The IPHC 3rd decision further stated that allowing an allegation that the uncorrected claims would not have been
obvious over the same documents 1 and 2 may result in repetition of trips between JPO and IPHC, which is
disadvantageous in terms of judicial economy and is against the Administrative Case Litigation Act, Article 33, 1st
paragraph.
As above, the IPHC 3rd decision found that the binding effect of the judgement extends to the subsequent
proceedings at JPO, which in turn means that the JPO is restricted from making a decision of non-obviousness
which may result in a reversal of the IPHC’s confirmed previous obviousness decision.

b.  Unpredictable Surprising Effect
Regarding the effect of the invention, the IPHC 3rd decision indicated that “those skilled in the art, when reading
documents 1 and 2, would have reached without difficulty the idea that the compound in document 1 is used as
human conjunctival mast cell stabilizer, so that it cannot be said that the fact that the compound of this invention
inhibits histamine release from human conjunctival mast cells is unpredictable and surprising to those skilled in the art” under the circumstance that there already exists a compound, other than compound A, that has a significant
effect to inhibit histamine release from human conjunctival mast cells.
The IPHC 3rd decision also indicated that “it cannot be said that the effect of ophthalmic stabilizing agent inhibiting histamine release from human conjunctival mast cells is unpredictable and surprising to those skilled in the art
in light of the technical standard at the priority date.”
Based upon those understandings, the IPHC 3rd decision reversed the JPO 3rd decision finding the unpredictable
surprising effect of the invention.

4.  Supreme Court Decision
a.  Unpredictable Surprising Effect
The Supreme Court stated that “although each compound known in the art before the priority date of this patent
has the same effect of inhibiting histamine release as compound A, it has a structure that is different from that of
compound A and does not have any relevance to those disclosed in document 1 or 2.”
Also, the Supreme Court stated that “each of documents 1 and 2 fails to disclose that compound A has an effect to
inhibit histamine release or the extent of the effect on inhibiting histamine release if indeed it does have such
effect.”
Further, the Supreme Court stated that, based on these circumstances, “the fact that there had been known other
compounds having effects similar to that of compound A at the priority date does not directly lead to a conclusion
that those skilled in the art would have predicted the effect of the present invention.  Also, considering that the
effect derived from the invention relates to the medical use of the component, only the fact that there existed
components having effects similar to that of component A but having structures different from that of component A is not sufficient to reject the arguments that the effect of the invention is so surprising that it would exceed the
expectation of those skilled in the art.”

b. Illegal Points in IPHC 3rd Decision
The Supreme Court said that “The IPHC’s third decision did not identify what conditions should be considered,
other than the fact that there had been known other components at the time of priority date, and did not consider
any circumstances in which, for example, the effect derived from component A can be seen from those of other
components.”
Then, the Supreme Court said that the IPHC’s third decision did not closely consider whether the effect of the
invention, in particular the degree of the effect, was unpredictable by those skilled in the art from the subject
matter of the invention at the priority date and/or beyond those predictable by those skilled in the art from the
subject matter of the invention.  Also, the IPHC found in the third decision that, assuming that it would have been
obvious to those skilled in the art to apply compound A in the usage of the invention, the JPO’s third decision
should be reversed by rejecting the unpredictable surprising of the invention based only on the fact that there had
been known other components having effects similar to that of component A of the invention, before the priority
date.
In conclusion, the Supreme Court found that the IPHC 3rd decision erred in finding the unpredictable surprising
effect of the invention and, therefore, is illegal in the interpretation and application of law.

5.  Comments
The Supreme Court discussed “the predictability of the effect” and found that IPHC erred in finding unpredictable
surprising effect of the invention.  In this decision, the Supreme Court indicated that unexpected effect can not
necessarily be denied simply by the fact that it was known at the time of filing that other components having
different structures have an effect similar to that of the invention.  This means that, when challenging the invalidity of claims, it is important to carefully examine the “predictability of effect” derived from the compound at issue. 
An enhancement of the foreseeability relating to the “predictability of effect” needs an accumulation of precedents.
There exist two doctrines -“independent” and “dependent” doctrines, in connection with “obviousness” and
“predictability of effect.”  The independent doctrine is to consider “obviousness” and “predictability of effect”
independently and the dependent doctrine is to consider the “predictability of effect” as a dependent factor in
determining the inventive step of the invention.  The Supreme Court did not comment on this point, but the fact
that its decision on inventive step weighed the unpredictability of effect more heavily than the obviousness indicates that the Supreme Court seems to have employed the independent doctrine, rather than the dependent doctrine,
in this decision.
Therefore, you may have to respond in considering the effectiveness of the independent doctrine in alleging the
inventive step of the invention.  For example, in responding to an Office Action rejecting the inventive step of the
invention, it is important to show the unpredictable effect of the invention.
An accumulation of decisions is highly expected in order to see the significance of unpredictable effect in
determining the inventive step.

https://www.courts.go.jp/app/files/hanrei_jp/888/088888_hanrei.pdf