United States: PTAB Not Always Bound By Previous Court Decisions Regarding Patent Validity

Last Updated: December 4 2017
Article by Katherine L. Neville, Ph.D.

In Novartis AG v. Noven Pharm. Inc., Appeal 2016-1678-1679 (April 2017), Novartis appealed two PTAB decisions holding claims of two patents obvious over cited prior art (IPR2014-00549 and IPR2014-00550), arguing that previous judicial holdings of non-obviousness should control the PTAB's factual findings and that the claims should have been held non-obvious.

The two Novartis patents at issue (U.S. Patent Nos. 6,316,023 and 6,335,031) were from the same patent family and are directed to a pharmaceutical composition comprising rivastigmine (Exelon®) and an antioxidant for the treatment of Alzheimer's disease.  In separate decisions in the Delaware District Court (Novartis Pharm. Corp. v. Noven Pharm., Inc., 125 F. Supp. 3d 474 (D. Del. 2015)) and the Federal Circuit (Novartis Pharm. Corp. v. Watson Labs., Inc., 611 F. App'x 988 (Fed. Cir. 2015)), the courts held that the claims were not obvious in view of a certain combination of prior art cited in the court proceedings.

During the IPRs, the Board found the patents unpatentable in view of a new combination of prior art that disclosed transdermal delivery of rivastigmine and combination of drugs with an antioxidant as a stabilizer.  The Federal Circuit affirmed the Board's holding that the claims were obvious over several different combinations of cited art, and confirmed that the PTAB applied the correct standards in considering previous court decisions related to the patents under review.  In reaching its conclusion, the Federal Circuit noted that additional evidence was presented during the IPRs that was not presented during the prior court proceedings, including different combinations of prior art as well as expert declarations, and that these differences in the record gave rise to different considerations of patentability in the IPR compared to the earlier court decisions.

The PTAB determined that a 'petitioner in an inter partes review proves unpatentability by a preponderance of the evidence (see 35 U.S.C. § 316(e)) rather than by clear and convincing evidence[] as required in district court litigation,' meaning that the PTAB properly may reach a different conclusion based on the same evidence.

The court additionally stated that even if the records were the same, a different result may be appropriate due to the different standards for proving unpatentability between the court and PTAB proceedings:  "The PTAB determined that a 'petitioner in an inter partes review proves unpatentability by a preponderance of the evidence (see 35 U.S.C. § 316(e)) rather than by clear and convincing evidence[] as required in district court litigation,' meaning that the PTAB properly may reach a different conclusion based on the same evidence."  Citing Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2146 (2016), the Court held that the prior court decisions did not bind the PTAB to arrive at the same conclusion.  The Federal Circuit stated that its decision was not inconsistent with In re Baxter International, Inc. 678 F.3d 1357 (Fed. Cir. 2012), in which the Court stated that the USPTO "ideally should not arrive at a different conclusion" if it faces the same evidence and argument as a district court.  The Court stated that the term "ideally" is not a mandate to reach the same holding but is used to connote an "aspiration," and the Court observed that Baxter recognized that reexaminations may result in a different outcome compared to prior judicial proceedings.

This decision confirms that the PTAB may arrive at a different conclusion of patentability than an earlier court decision, given the difference in standards for proving unpatentability.  As always, practitioners should be aware of the different standards when presenting arguments before the PTAB and not rely simply on the outcome in the judicial proceedings to advocate for patentability.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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