Kaken Pharmaceutical Co., Ltd. v. Iancu

Case: 18-2232 Document: 87 Page: 1 Filed: 03/13/2020

United States Court of Appeals

for the Federal Circuit

______________________

KAKEN PHARMACEUTICAL CO., LTD., BAUSCH

HEALTH COMPANIES INC.,

Appellants

v.

ANDREI IANCU, UNDER SECRETARY OF

COMMERCE FOR INTELLECTUAL PROPERTY

AND DIRECTOR OF THE UNITED STATES

PATENT AND TRADEMARK OFFICE,

Intervenor

______________________

2018-2232

______________________

Appeal from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in Nos. IPR2017-

00190, IPR2017-01429.

______________________

Decided: March 13, 2020

______________________

JOHN D. LIVINGSTONE, Finnegan, Henderson, Farabow,

Garrett & Dunner, LLP, Atlanta, GA, argued for appel-

lants. Also represented by JEFFREY JACOBSTEIN, Boston,

MA; SAMHITHA MEDATIA, ANTHONY A. HARTMANN, CORA

RENAE HOLT, BARBARA RUDOLPH, Washington, DC.

NICHOLAS THEODORE MATICH, IV, Office of the Solicitor,

United States Patent and Trademark Office, Alexandria,

Case: 18-2232 Document: 87 Page: 2 Filed: 03/13/2020

2 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

VA, argued for intervenor. Also represented by THOMAS W.

KRAUSE, WILLIAM LAMARCA, ROBERT J. MCMANUS, BRIAN

RACILLA, FARHEENA YASMEEN RASHEED.

______________________

Before NEWMAN, O’MALLEY, and TARANTO, Circuit Judges.

TARANTO, Circuit Judge.

U.S. Patent No. 7,214,506 describes and claims meth-

ods for topically treating fungal infections in human nails.

The parties here treat Kaken Pharmaceutical Co. and

Bausch Health Companies Inc. (together, Kaken) as the pa-

tent owner. Acrux Limited and Acrux DDS Pty. Ltd. (to-

gether, Acrux), which no longer are parties to this

proceeding, successfully sought an inter partes review of

all claims of the ’506 patent under 35 U.S.C. § 311–319.

The Patent Trial and Appeal Board of the Patent and

Trademark Office ultimately determined that all claims of

the ’506 patent are unpatentable for obviousness. Acrux

DDS Pty. Ltd. v. Kaken Pharm. Co., Ltd., No. IPR2017-

00190, 2018 WL 2761408 (P.T.A.B. June 6, 2018).

Kaken appeals. The Director of the Patent and Trade-

mark Office, who intervened after Acrux withdrew, defends

the Board’s decision. We agree with Kaken on its principal

contention—that the Board erred in its claim construction

of one claim limitation. Because the Board’s obviousness

analysis materially relied on its erroneous claim construc-

tion, we cannot affirm the Board’s unpatentability deter-

mination. We reverse the claim construction, vacate the

Board’s decision, and remand the matter to the Board.

I

A

The ’506 patent, titled “Method For Treating Ony-

chomycosis,” provides a series of interlocking definitions.

The patent states that “[o]nychomycosis” is a class of “su-

perficial mycosis” that affects the “nail of [a] human or an

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 3

animal.” ’506 patent, col. 9, lines 32–35. The umbrella

term, “superficial mycosis,” encompasses infections that at-

tack tissues of the “skin or visible mucosa.” Id., col. 5, lines

20–26. According to the patent, “skin” is “a tissue including

the three layers being epidermis, de[r]mis and subcutane-

ous tissue, accompanied by pilus (hair), nail, [and various

glandulae] as appendages.” Id., col. 4, lines 54–57. In turn,

the “term ‘nail’ includes nail plate, nail bed, nail matrix,

further side nail wall, posterial nail wall, eponychium and

hyponychium which make up a tissue around thereof.” Id.,

col. 4, lines 65–67.

Each of these structures is labeled in the following di-

agram:

J.A. 2435. Although the patent contains its own defini-

tions, including of “nail” and of “skin” (the latter including

“nail”), evidence before the Board explained that common

usage differs from the patent’s definitions. The “nail plate”

is the “horny appendage of the skin that is composed

mainly of keratin” and is “commonly called the nail.” J.A.

1236. By contrast, the “eponychium and hyponychium” are

the “skin structures surrounding the nail.” J.A. 1276.

One specific form of onychomycosis is “tinea unguium,”

which is caused by fungi of the Trichophyton species. ’506

patent, col. 9, lines 40–45. Two types of Trichophyton

fungi, Trichophyton rubrum and Trichophyton men-

tagrophytes, are the most common causes of onychomycosis

in humans. ’506 patent, col. 9, lines 35–38. Accordingly,

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4 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

the patent refers to “onychomycosis” and “tinea unguium”

interchangeably. E.g., id., col. 3, lines 41–45, col. 14, lines

60–63.

Traditionally, onychomycosis was treated with oral

medications. Id., col. 2, lines 25–27. Because those oral

medications required long treatment periods and could

cause gastrointestinal disorders, it was “desired to develop

a topical preparation.” Id., col. 2, lines 27–39. Topical

treatments, however, were largely ineffective—most treat-

ments “could not sufficiently permeate the thick keratin in

[the] nail plate.” Id., col. 2, lines 40–45. It is a stated object

of the patent to provide a topical treatment that is effective

more quickly than oral medications “due to good permea-

bility, good retention capacity and conservation of high ac-

tivity in nail plate as well as . . . potent antifungal activity.”

Id., col. 3, lines 42–47.

The ’506 patent teaches a method of topically treating

onychomycosis with efinaconazole, also referred to as “KP-

103,” which is a specific kind of azole compound. See id.,

col. 3, line 52 through col. 4, line 6; id., col. 8, line 23

through col. 9, line 17. Claim 1, the only independent

claim, recites:

1. A method for treating a subject having onychomyco-

sis wherein the method comprises topically admin-

istering to a nail of said subject having

onychomycosis a therapeutically effective amount

of an antifungal compound represented by the fol-

lowing formula:

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 5

wherein, Ar is a non-substituted phenyl group or a phe-

nyl group substituted with 1 to 3 substituents

selected from a halogen atom and trifluorome-

thyl group,

R1 and R2 are the same or different and are hydrogen

atom, C1-6 alkyl group, a non-substituted aryl

group, an aryl group substituted with 1 to 3 sub-

stituents selected from a halogen atom, trifluo-

romethyl group, nitro group and C1-16 alkyl

group, C2-8 alkenyl group, C2-6 alkynyl group, or

C7-12 aralkyl group,

m is 2 or 3,

n is 1 or 2,

X is nitrogen atom or CH, and

*1 and *2 mean an asymmetric carbon atom.

Id., col. 17, line 33 through col. 18, line 28. The two possi-

bilities covered by the language “X is [a] nitrogen atom or

CH” are, respectively, a triazole or an imidazole. Claim 2,

which depends on claim 1, requires that the “compound

represented by the formula (II)” is KP-103, which is the tri-

azole version. Id., col. 18, lines 29–32; see id., col. 9, lines

15–17. The patent states that the “effectiveness of the KP-

103 used as an antifungal in the present invention for ony-

chomycosis has not been confirmed, but its antifungal ac-

tivity has been already known.” Id., col. 9, lines 22–25.

B

In November 2016, Acrux petitioned for an inter partes

review of claims 1 and 2 of the ’506 patent, relying on two

sets of references. The first set consists of three references:

Japanese Patent Application No. 10-226639 (JP ’639); U.S.

Patent No. 5,391,367; and R.J. Hay et al., Tioconazole nail

solution—an open study of its efficacy in onychomycosis, 10

CLINICAL AND EXPERIMENTAL DERMATOLOGY 111 (1985)

Case: 18-2232 Document: 87 Page: 6 Filed: 03/13/2020

6 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

(Hay). Acrux argued that each of those references inde-

pendently teaches a method of topically treating ony-

chomycosis with various azole compounds. The second set

of references consists of two references: H. Ogura et al.,

Synthesis and Antifungal Activities of (2R,3R)-2-Aryl-1-az-

olyl-3-(substituted amino)-2-butanol Derivatives and Topi-

cal Antifungal Agents, 47 CHEM. PHARM. BULL. 1417 (1999)

(Ogura); and Abstracts F78, F79, and F80, 36

INTERSCIENCE CONFERENCE ON ANTIMICROBIAL AGENTS

AND CHEMOTHERAPY 113 (1996) (Kaken Abstracts). Acrux

argued that both of those references disclose KP-103 as an

effective antifungal agent.

Acrux challenged both claims of the ’506 patent as un-

patentable for obviousness, stating six (related) grounds,

each one drawing a reference from the first set and a refer-

ence from the second set. Specifically, Acrux argued obvi-

ousness over JP ’639 in combination with Ogura or the

Kaken Abstracts, obviousness over the ’367 patent in com-

bination with Ogura or the Kaken Abstracts, and obvious-

ness over Hay in combination with Ogura or the Kaken

Abstracts. In its final written decision, the Board held

claims 1 and 2 unpatentable for obviousness over JP ’639,

the ’367 patent, and Hay, each in combination with the Ka-

ken Abstracts. Acrux, 2018 WL 2761408, at *12–26.

During the inter partes review, Kaken proposed that

the phrase “treating a subject having onychomycosis”

means “treating the infection at least where it primarily

resides in the keratinized nail plate and underlying nail

bed.” Id. at *4. The Board rejected Kaken’s construction

as too narrow, concluding that “the express definition of on-

ychomycosis includes superficial mycosis, which in turn is

expressly defined as a disease that lies in the skin or visible

mucosa.” Id. at *5. The Board also found significant that

the express definition of “nail includes the tissue or skin

around the nail plate, nail bed, and nail matrix.” Id. Ac-

cordingly, the Board concluded, “treating onychomycosis”

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 7

includes treating “superficial mycosis that involves disease

of the skin or visible mucosa.” Id. at *6. Applying that

construction, the Board determined that a skilled artisan

would have been motivated to combine the cited references

and that Kaken’s objective indicia of non-obviousness de-

served little weight. Id. at *20–26.

Kaken timely appealed. We have jurisdiction under 28

U.S.C. § 1295(a)(4)(A).

II

Kaken challenges the Board’s construction of “treating

a subject having onychomycosis.” According to Kaken, the

Board’s construction ignores the ’506 patent’s core innova-

tion—a topical treatment that can easily penetrate the

tough keratin in the nail plate. Kaken asks us to reverse

the claim construction and either to reverse the obvious-

ness determination or to vacate it and remand for applica-

tion of the proper construction.

A

We review the Board’s claim construction de novo and

any underlying factual findings for substantial evidence.

Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 135 S. Ct.

831, 840–41 (2015); Wasica Finance GmbH v. Continental

Automotive Systems, Inc., 853 F.3d 1272, 1278 (Fed. Cir.

2017). The parties accept that, in this matter, the claims

must be given their broadest reasonable interpretation.

We hold, in light of the specification and prosecution his-

tory, that the Board’s claim construction is unreasonable.

The broadest reasonable interpretation of “treating a sub-

ject having onychomycosis,” consistent with Kaken’s con-

struction, is penetrating the nail plate to treat a fungal

infection inside the nail plate or in the nail bed under it.

Case: 18-2232 Document: 87 Page: 8 Filed: 03/13/2020

8 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

1

The ’506 patent’s specification characterizes “ony-

chomycosis” in a way that links to three other crucial pas-

sages in the specification—two that provide express

definitions of other terms and one that characterizes an-

other term. Thus, after defining the terms “skin” and

“nail,” and characterizing “superficial mycosis,” the speci-

fication declares that “onychomycosis” is “a kind of the

above-mentioned superficial mycosis, in the other word a

disease which is caused by invading and proliferating in

the nail of human or an animal.” ’506 patent, col. 9, lines

32–35. This assertion about onychomycosis conveys that

the disease covered by the term has two basic features: (1)

it is a disease of the “nail” and (2) it is a kind of superficial

mycosis. Contrary to the Board’s conclusion, however, that

characterization, when coupled with the other three linked

specification passages, does not compel the conclusion that

“onychomycosis” reasonably is understood to involve inva-

sion of any part of what is defined as the “nail,” including

parts other than the nail plate or nail bed, such as skin in

its ordinary sense.

More specifically, the Board relied on the ’506 patent’s

definition of “nail”: the “term ‘nail’ includes nail plate, nail

bed, nail matrix, further side nail wall, posterial nail wall,

eponychium and hyponychium which make up a tissue

around thereof.” Id., col. 4, lines 65–67; see Acrux, 2018

WL 2761408, at *5. That definition includes skin struc-

tures surrounding the nail plate. But the Board drew an

unwarranted inference from that broad definition. As a

matter of ordinary meaning, a statement that a particular

disease invades the body would not imply that it can invade

any part of the body. So too, when the specification says

that “onychomycosis” is a disease involving invasion of the

“nail,” it does not compel the conclusion that the disease

can invade any part of the defined “nail.” A disease that

invades the nail plate or bed only is still a disease that

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 9

invades the “nail” as defined. Thus, this language alone

does not support the Board’s conclusion that an infection of

any individual structure of the nail constitutes onychomy-

cosis.

The Board also relied on the specification’s characteri-

zation of “superficial mycosis.” The specification says that

superficial mycosis is a kind of mycosis in which “[a] seat

of the disease lie[s] in the skin or visible mucosa,” id., col.

5, lines 23–24, in contrast to deep mycosis, which lies “in

viscus, central nervous system, subcutaneous tissue, mus-

cle, [h]orn or articulation,” id., col. 5, lines 24–26. The

Board concluded that, because onychomycosis is stated to

be a type of superficial mycosis, “which in turn is expressly

defined as a disease that lies in the skin or

visible mucosa,” onychomycosis “includes infections of skin

contrary to [Kaken’s] interpretation of this term to require

infection of the nail plate and nail bed.” Acrux, 2018 WL

2761408, at *5. 1

The “superficial mycosis” characterization is no more

decisive in supporting the Board’s conclusion than is the

“nail” definition. Specifically, the Board’s inference runs

counter to the specification’s capacious definition of “skin”

as including “nail”: “a tissue including the three layers be-

ing epidermis, de[r]mis and subcutaneous tissue, accompa-

nied by pilus (hair), nail, [and certain glandulae] as

appendages.” ’506 patent, col. 4, lines 54–57 (emphasis

added). Because of that definition, the assertion that ony-

chomycosis is a type of disease that lies in the “skin” in no

way excludes onychomycosis from being limited to the

1 We understand the Board’s statement that “the ex-

press definition of onychomycosis includes superficial my-

cosis,” Acrux, 2018 WL 2761408, at *5, to mean simply that

the specification characterizes onychomycosis as a type of

superficial mycosis.

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10 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

“nail.” The characterization of “superficial mycosis” allows

that possibility and does not mean that every type of su-

perficial mycosis affects every type of “skin” structure.

The Board did not draw any inference specifically from

the contrast with “deep mycosis.” The specification de-

scribes deep mycosis as affecting “subcutaneous tissue,”

but the patent also defines “skin” as including “subcutane-

ous tissue.” Compare id., col. 5, lines 23–26 with id., col. 4,

lines 54–57. The overlap reinforces the general lesson that

the specification passages on which the Board relied do not

provide clarity about the reasonable bounds of the class of

structures that must be infected for a disease to constitute

“onychomycosis.”

Other parts of the specification, which explain that an

effective topical treatment would need to penetrate the nail

plate, support Kaken’s construction. A patent’s statement

of the described invention’s purpose informs the proper

construction of claim terms, including when the task is to

identify the broadest reasonable interpretation. See In re

Power Integrations, Inc., 884 F.3d 1370, 1376–77 (Fed. Cir.

2018) (the patent at issue “strives to eliminate unnecessary

components,” so it would be unreasonable to construe a

claim term to include a “bulky [component]”). The ’506 pa-

tent briefly describes topical treatments known in the prior

art. It notes that those treatments were largely ineffective

because they “could not sufficiently permeate the thick ker-

atin in [the] nail plate.” ’506 patent, col. 2, lines 40–44.

Accordingly, the ’506 patent explains, an effective topical

treatment must have “good permeability, good retention

capacity and conservation of high activity in [the] nail

plate.” Id., col. 3, lines 40–48. That discussion, in stating

the “object of [the] present invention” relevant to the claims

at issue, id., col. 3, lines 40–41, supports Kaken’s construc-

tion. Treating an infection of the skin surrounding the nail

plate alone would not require all those properties,

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 11

including “high activity in [the] nail plate.” Id., col. 3, lines

40–48 (emphasis added).

The Board discounted that evidence based on a flawed

understanding of the relationship between onychomycosis

and tinea unguium. The Board reasoned that the patent’s

description of an effective topical treatment is unhelpful

because it is preceded by the phrase “a therapeutic agent

for onychomycosis which exhibits the effect on tinea un-

guium by topical application” and tinea unguium “is in-

cluded in the definition of onychomycosis, but is not co-

extensive with it.” Acrux, 2018 WL 2761408, at *6 (citing

’506 patent, col. 3, lines 41–45). Although the Board is cor-

rect that onychomycosis is broader than tinea unguium, it

is not broader in a way that is significant for this analysis.

The patent explains that tinea unguium is onychomycosis

“caused by [the] Trichophyton species” of fungus and con-

trasts tinea unguium with “[o]nychocandidadis caused by

[the] Candida species or onychomychosis (sensu stricto)

caused by the other fungus.” ’506 patent, col. 9, lines 40–

44. That onychomycosis can be caused by fungi other than

the Trichophyton species does not decrease the probative

value, for determining the location of the infection, of the

patent’s description of an effective topical treatment for

tinea unguium.

2

The prosecution history—which includes, specifically,

statements made by Kaken to overcome a rejection and the

examiner’s statements explaining withdrawal of the rejec-

tion based on those statements—provides decisive support

for limiting the claim phrase at issue to a plate-penetrating

treatment of an infection inside or under the nail plate. A

patent’s prosecution history can “inform the meaning of the

claim language by demonstrating how the inventor under-

stood the invention and whether the inventor limited the

invention in the course of prosecution, making the claim

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12 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

scope narrower than it would otherwise be.” Phillips v.

AWH Corp., 415 F.3d 1303, 1317 (Fed. Cir. 2005); see also

Hynix Semiconductor Inc. v. Rambus Inc., 645 F.3d 1336,

1350 (Fed. Cir. 2011) (prosecution history is strong evi-

dence of what a skilled artisan “would have understood dis-

puted claim language to mean”). Particularly useful are

“express representations made by or on behalf of the appli-

cant to the examiner to induce a patent grant,” which in-

clude “arguments made to convince the examiner that the

claimed invention meets the statutory requirements of nov-

elty, utility, and nonobviousness.” Standard Oil Co. v.

American Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir.

1985). Prosecution history plays this role in applying the

broadest-reasonable-interpretation standard. See Mi-

crosoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1298

(Fed. Cir. 2015), overruled on other grounds by Aqua

Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017)

(en banc). In this case, Kaken’s statements during prose-

cution, followed by the examiner’s statements, make clear

the limits on a reasonable understanding of what Kaken

was claiming.

The ’506 patent issued from a divisional application of

U.S. Patent Application No. 10/031,929, which originally

had seventeen claims. Divisional dated Oct. 14, 2003, at

35–39, in Appl. No. 10/685,266. When Kaken submitted its

divisional application (the ’266 application), it included a

preliminary amendment that reduced the number of claims

to four: claims 2–17 were cancelled and claims 18–20 were

added. Preliminary Amendment dated Oct. 14, 2003, at 3–

4, in Appl. No. 10/685,266. Independent claim 18 described

a “method for treating [a] subject having onychomycosis”

using a compound having “formula (I).” Preliminary

Amendment dated Oct. 14, 2003, at 3; see ’506 patent, col.

3, lines 54–63. Claim 19, which depended on claim 18, re-

quired a compound having “formula (II).” Preliminary

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 13

Amendment dated Oct. 14, 2003, at 3; see ’506 patent, col.

8, lines 28–39.

The examiner, believing that claims 18–20 were di-

rected to a method of treating general mycosis, initially re-

jected Kaken’s application for obviousness-type double

patenting over claims 9–12 of U.S. Patent No. 5,620,994.

The ’994 patent describes a “fungicide” containing the same

compound described by formula (II) of the ’506 patent. ’994

patent, Abstract; see ’506 patent, col. 8, lines 28–39. While

independent claim 1 of the ’994 patent claims that com-

pound, ’994 patent, col. 17, line 51, through col. 18, line 19,

claim 9 of the ’994 patent claims a “process for treating my-

cosis” using the compound of claim 1, id., col. 18, lines 46–

48. The examiner first explained that the “formula pre-

sented in instantly claimed Claim 19 [of the ’266 applica-

tion] is exactly the same as that in Claim [1] of [the ’994]

patent.” Non-Final Rejection dated June 14, 2006, at 4, in

Appl. No. 10/685,266; J.A. 1571. The examiner added that

claims 18–20 were not “patentably distinct” from claims 9–

12 of the ’994 patent because “[c]laims 9–12 . . . claim a pro-

cess to treat mycosis which again is a generic terminology

for ‘onychomycosis’ via administering the compound of for-

mula in Claim 1.” Non-Final Rejection dated June 14,

2006, at 4; J.A. 1571.

Kaken responded by submitting an amendment that

cancelled claim 1, clarified the wording of claim 18, and as-

serted the important difference between mycosis and ony-

chomycosis. Noting that the “[t]reatment of onychomycosis

significantly differs from the general treatment of mycoses

claimed in ’994,” Kaken explained that “[o]nychomycosis is

a condition that specifically affects the nail plate.” Amend-

ment filed Sept. 14, 2006, at 10, in Appl. No. 10/685,266

(emphasis added); J.A. 1589. Kaken further argued that

the “present invention shows the unexpected ability of an

azolylamine derivate to penetrate nail and be retained by

the nail.” Amendment filed Sept. 14, 2006, at 10 (emphasis

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14 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

added); J.A. 1589. Accordingly, Kaken concluded, the re-

jection should be withdrawn.

The examiner credited Kaken’s explanation and with-

drew the rejection. In allowing the claims, the examiner

stated, under the heading “Examiner’s Reasons for Allow-

ance,” that “unexpectedly and in contrast to previously

evaluated compositions/methods, the instantly claimed

method cures the onychomycosis because the medicament

upon direct administration to the nail, penetrates through

the nail plate and eradicates the infection at the site.” No-

tice of Allowability dated Dec. 26, 2006, at 5, in Appl. No.

10/685,266 (emphasis added); J.A. 1608. The examiner

also suggested that Kaken cancel claim 18 and make claim

19 independent, which Kaken did, and the resulting claims

19 and 20 became claims 1 and 2 of the issued ’506 patent.

Compare Notice of Allowability dated Dec. 26, 2006, at 3–4

with ’506 patent, col. 17, line 34 through col. 18, line 32.

This exchange would leave a skilled artisan with no

reasonable uncertainty about the scope of the claim lan-

guage in the respect at issue here. Kaken is bound by its

arguments made to convince the examiner that claims 1

and 2 are patentable. See Standard Oil, 774 F.2d at 452.

Thus, Kaken’s unambiguous statement that onychomyco-

sis affects the nail plate, and the examiner’s concomitant

action based on this statement, make clear that “treating

onychomycosis” requires penetrating the nail plate to treat

an infection inside the nail plate or in the nail bed under

it. 2

2 The intrinsic evidence in this case is decisive, mak-

ing it unnecessary to review the expert evidence. See

SIPCO, LLC v. Emerson Electric Co., 939 F.3d 1301, 1307

(Fed. Cir. 2019) (“To the extent the Board considered ex-

trinsic evidence when construing the claims, we need not

consider the Board’s findings on the evidence because the

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KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 15

Accordingly, we reverse the Board’s claim construction.

B

The Board relied on its erroneous claim construction

throughout its consideration of facts that were part of its

obviousness analysis. For example, in determining that a

skilled artisan would have been motivated to combine JP

’639, the ’367 patent, or Hay with the Kaken Abstracts, the

Board rejected Kaken’s primary argument as inconsistent

with the Board’s claim construction. Before the Board, Ka-

ken argued that because the Kaken Abstracts document

experiments testing KP-103 in vitro and in skin (in the or-

dinary, not patent-defined sense), a skilled artisan would

not have been motivated to use KP-103 to treat onychomy-

cosis. See Acrux, 2018 WL 2761408, at *20. The Board

concluded that this argument “relies upon an improperly

narrow interpretation of the claim terms ‘nail’ and ‘ony-

chomycosis’” and “hinge[s] on a requirement that is not in

the challenged claims, treatment of onychomycosis in the

nail plate or nail bed.” Id. Accordingly, the Board dis-

missed Kaken’s arguments as “misdirected.” Id.

Similarly, the Board rejected Kaken’s objective indicia

of non-obviousness because it concluded, relying on the

claim construction we have concluded is erroneous, that

there is no nexus between the objective indicia and the

challenged claims. In its Patent Owner’s response, Kaken

intrinsic record is clear.”); Eidos Display, LLC v. AU Op-

tronics Corp., 779 F.3d 1360, 1365 (Fed. Cir. 2015). With

one possible exception, the evidence on both sides is uni-

form about the nail-penetrating character of onychomyco-

sis addressed by the patent. The one possible exception

involves an entirely superficial, on-the-nail fungus that

commonly can be just scraped off. See Acrux, 2018 WL

2761408, at *5. The intrinsic evidence is inconsistent with

including treatment of that fungus within the claim scope.

Case: 18-2232 Document: 87 Page: 16 Filed: 03/13/2020

16 KAKEN PHARMACEUTICAL CO., LTD. v. IANCU

identified KP-103 as the “active pharmaceutical ingredient

in Jublia®, the first FDA-approved monotherapy for the

topical treatment of onychomycosis.” J.A. 1121. Kaken

made several objective-indicia arguments based on

Jublia®: that Jublia® produced unexpected results; that

Jublia® has had significant commercial success; that

Jublia® received industry praise; and that Jublia® fulfilled

a long-felt, but unmet need. See Acrux, 2018 WL 2761408,

at *22–26. But before considering any of those arguments,

the Board pointed to evidence that the FDA approved

Jublia® as a “topical treatment of onychomycosis of the toe-

nails,” and Jublia®’s label directs the user to “apply Jublia®

to affected toenails once daily.” J.A. 1809; see Acrux, 2018

WL 2761408, at *23. Because “Jublia®[] is directed to

treatment of specific fungal infections in toenails, and not

to a ‘nail’ or to treat ‘onychomycosis,’” the Board explained,

the “method for Jublia®’s use is not reasonably commensu-

rate with the [scope] of the challenged claims.” Acrux, 2018

WL 2761408, at *23. Thus, the Board concluded, the objec-

tive indicia presented by Kaken “do not weigh in favor of a

finding that the subject matter of the claims would not

have been obvious.” Id. at *24.

The foregoing determinations are infected by the erro-

neous claim construction. In this court, the Director has

sought to support the Board’s factual findings with little or

no reliance on the claim construction we have held to be

erroneous. But that effort is more a reconstruction of the

Board’s analysis than a description of the Board’s actual

reasoning. We conclude that the appropriate course in this

case, as in so many others involving a reversal of a Board

claim construction, is to vacate the Board’s decision and re-

mand the matter. See, e.g., Arista Networks, Inc. v. Cisco

Sys., Inc., 908 F.3d 792, 798 (Fed. Cir. 2018); Dell Inc. v.

Acceleron, LLC, 818 F.3d 1293, 1300 (Fed. Cir. 2016). We

do not prejudge whether the correct claim construction per-

mits the same factual findings or obviousness conclusion,

Case: 18-2232 Document: 87 Page: 17 Filed: 03/13/2020

KAKEN PHARMACEUTICAL CO., LTD. v. IANCU 17

let alone what factual findings should be made on the evi-

dence when the correct claim construction is used. Nor do

we prejudge what effect the withdrawal of Acrux has on

how the Board should proceed on remand.

III

For the foregoing reasons, we reverse the Board’s claim

construction, vacate the Board’s final written decision, and

remand the matter to the Board.

Costs awarded to appellants.

REVERSED IN PART, VACATED, AND REMANDED