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Time to Rethink “Consisting Essentially of” as a Claim Limitation

For decades, courts have construed the transitional phrase “consisting essentially of” to mean that the scope of a claim is limited to the specified materials or steps “and those that do not materially affect the basic and novel characteristic(s)” of the claimed invention. In re Herz, 537 F.2d 549, 551-52, 190 USPQ 461, 463 (CCPA 1976) (emphasis in original). The Federal Circuit has explained that “[a] ‘consisting essentially of’ claim occupies a middle ground between closed claims that are written in a ‘consisting of’ format and fully open claims that are drafted in a ‘comprising’ format.” PPG Industries v. Guardian Industries, 156 F.3d 1351, 1354, 48 USPQ2d 1351, 1353-54 (Fed. Cir. 1998). On October 10, 2019, the Federal Circuit created a minefield in that middle ground in HZNP Medicines LLC v. Actavis Laboratories UT, Inc. The panel consisted of Judges Reyna, Prost, and Newman, with Judge Newman dissenting as to the majority’s finding that ambiguities as to the “basic and novel properties” of the claimed invention or what constitutes a material alteration of those properties rendered claims reciting “consisting essentially of” indefinite.

The majority explained that two questions arise when claims use the phrase “consisting essentially of”:

  1. What are the basic and novel properties of the invention?
  2. Does a particular unlisted ingredient materially affect those basic and novel properties?

The panel explained that there certainly may be circumstances where it will be up to a fact-finder to determine whether an unlisted ingredient has a material effect on the basic and novel properties of the invention.

In its Markman order, the District court found the term “consisting essentially of” to be indefinite as used in the formulation patent. While the district court found that the specification sufficiently identified five basic and novel properties of the claimed invention — i.e., (1) better drying time; (2) higher viscosity; (3) increased transdermal flux; (4) greater pharmacokinetic absorption; and (5) favorable stability — it concluded that a person of ordinary skill in the art would not be able to have reasonable certainty about the scope of these properties. The district court found that because the basic and novel properties of an invention are part of the construction of a claim containing the phrase “consisting essentially of,” the Nautilus standard applies to the assessment of an invention’s basic and novel properties.  Finding the “drying time” in the specification to be inconsistent among different methods, the district court held that a person of ordinary skill would not have had “reasonable certainty” as to the scope of the basic and novel properties.

The Federal Circuit affirmed the indefiniteness determination of the district court. In evaluating the district court’s determination, the majority analyzed three issues.

First, the majority considered whether the “basic and novel properties” as defined by the district court is within the scope of the claims.  Based on the information disclosed in the specification, the majority found the district court’s identification of the five properties disclosed in the specification as constituting the “basic and novel” properties of the invention to be proper.

Second, the majority determined that the application of the Nautilus definiteness standard on the “basic and novel properties” of invention is appropriate.  The majority explained that the basic and novel properties of an invention are part of the scope of claims reciting “consisting essentially of” and that it follows that those basic and novel properties, when read in light of the specification and the prosecution history, must provide objective boundaries for those of skill in the art. That majority explained that the analysis is fact-specific, i.e., the fact that the basic and novel properties may not be precise does not automatically render them indefinite. Rather, the basic and novel properties must be sufficiently definite so as to inform, with reasonable certainty, a person of ordinary skill of their scope within the context of the invention.

Third, the majority determined whether the district court’s determination of indefiniteness of basic and novel property of “better drying time” was proper. Agreeing with the district court in that the results of “better drying time” in the specification are inconsistent, the majority held that the district court did not err in determining that a person of ordinary skill would not know under what standard to evaluate the drying rate, thus rendering the basic and novel property of “better drying rate” indefinite.

In dissent, Judge Newman argued that usage of “consisting essentially of” should not be a ground of invalidity.  Judge Newman disagreed with the majority’s use of “consisting essentially of” in the claims as opening the claims for evaluation of the “basic and novel properties” as part of the claim construction.  Judge Newman noted that both parties agreed that there were no unlisted ingredients in the allegedly infringing formulations, but the majority focused on the specification and examples and found that two measures of drying time were in Example 5 that provided different results. In Judge Newman’s view, “[d]efiniteness of claiming requires that the subject matter for which patent protection is sought is clearly stated in the claim [; therefore, it] is hard to imagine a clearer statement than a list of the ingredients that the claimed formulation ‘consist essentially of’.” The majority responded to this contention by disagreeing and noting that a clearer statement would be a list of ingredients that the claimed formulation “consists of,” which is a “closed claim” confined to the listed ingredients or steps in a claim.  The majority explained that because the patentee chose to use the distinct and separate phrase, “consisting essentially of,” the patentee can assert its claim against products containing ingredients nowhere listed in the patent claim, but the underlying basic and novel properties of that invention must be sufficiently definite in scope in order to afford clear notice of the claim’s bound.

In response, Judge Newman cites to Conoco, Inc. v. Energy & Envtl. Int’l, L.C., 460 F. 3d 1349 (Fed. Cir. 2006), where the Federal Circuit held that even the term “‘consisting of’ permits ‘aspects unrelated to the invention’.” In her dissent, Judge Newman expressed concern about this decision sowing uncertainty and confusion among countless of composition patents.

There are two major takeaways from the holding of HZNP Medicines LLC, Horizon Pharma USA, Inc., v. Actavis Laboratories UT, Inc.

  1. By using the term “consisting essentially of” in the claims, the Nautilus definiteness standard extends to the “basic and novel properties” identifiable in the specification; and
  2. In order for the “basic and novel properties” to be definite, results relating to the “basic and novel properties” have to be consistent.

It is important to note that the determination held by the Federal Circuit in this case is fact-specific. In fact, the majority emphasized that its determinations are specific to the case at hand.

To be clear, we do not hold today that so long as there is any ambiguity in the patent’s description of the basic and novel properties of its invention, no matter how marginal, the phrase “consisting essentially of” would be considered indefinite. Nor are we requiring that the patent owner draft claims to an untenable level of specificity. We conclude only that, on these particular facts, the district court did not err in determining that the phrase “consisting essentially of” was indefinite in light of the indefinite scope of the invention’s basic and novel property of a “better drying time.”

Despite the majority’s emphasis on the limitation of its holding, the implications of this decision are wide and unsettling.  In the past 20 years, over 32,000 U.S. patents have been granted that recite “consisting essentially of” or a permutation thereof in their claims.  Further, as of November 4, 2019, there are more than 9,000 U.S. patents and published applications with a priority date on or after March 16, 2013, i.e., subject to post grant review, reciting claims containing the transitional phrase “consisting essentially of” or permutations thereof. Significant portions of these patents and applications are drawn to biologics. In fact, A61K 38/00, a classification for peptides, is the second most common Cooperative Patent Classification (“CPC”) among patents and applications reciting claims containing the transitional phrase “consisting essentially of” or permutations thereof. A61K 2039/505, a classification for antibodies, is right behind as the 13th most common classification.

To comply with the majority’s holding in HZNP, in order for such claims to meet the Nautilus definiteness standard, the “basic and novel properties” disclosed in the specification must inform, with reasonable certainty, a person of ordinary skill in the art of their scope within the context of the invention.  The basic and novel characteristics of the claimed invention will now become a major point of contention during the claim construction phase and beyond.  If the specification lacks requisite clarity with regard to the basic and novel properties of the invention, it may be advantageous to obtain a “consisting of” claim rather than the now indefiniteness-susceptible “consisting essentially of” phrase.

Going forward, patent drafters must carefully consider, describe, and support any asserted basic and novel properties in patent specifications to withstand such heightened scrutiny.  Potential ambiguities in testing or measurement techniques must be identified and dealt with at the draft phase.

For patent applicants and owners, any pending applications or granted patents reciting “consisting essentially of” claims should be carefully reviewed and reconsidered. The “basic and novel properties” of these patents should be identified in the specification and analyzed for potential ambiguities.  In the relevant case, the “basic and novel properties” were easily identified by the disclosure in the specification detailing the five advantageous properties the invention had over the prior art as well as the having the five properties in the separate sub-headings. In most patents, the identification of the “basic and novel properties” of claimed inventions are not as easily discernable and will require careful reading of the specification, examples, and its descriptions of the prior art. Furthermore, once the “basic and novel properties” are identified, the data provided in the specification in support of the “basic and novel properties” should be assessed so as to ascertain whether there are any inconsistencies among the data. If any inconsistencies are identified, the applicant or patentee may need to consider filing claim amendments in a pending application or a reissue application for granted patents in order to rehabilitate “consisting essentially of” claims that may not meet the Nautilus definiteness standards for the “basic and novel properties” of the claimed invention.

For potential patent challengers, there are now a large number of granted and pending claims that are susceptible to invalidity challenges for indefiniteness because they recite “consisting essentially of.”  Thousands of such claims have been granted since March 16, 2013 and are therefore eligible for post-grant review based on indefiniteness.  In district court, arguments and evidence for ambiguities in the “basic and novel properties” of claims should be presented early, e.g., at the Markman and summary judgment phases.