United States: Federal Circuit Holds Retroactive Application Of IPR To Pre-AIA Patents Is Not A Taking

Last Updated: August 5 2019
Article by Clyde A. Shuman

The U.S. Court of Appeals for the Federal Circuit has held that the retroactive application of inter partes review (IPR) proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment. In Celgene Corp. v Peter, Appeal Nos. 2018-1167, -1168 and -1169, the Court held that, although difference exist between IPRs and their reexamination predecessors, those differences do not outweigh the similarities of purpose and substance, and thus do not effectuate a taking of Celgene's patents.

By way of background, the Coalition for Affordable Drugs VI LLC ("CFAD") filed IPR petitions challenging the validity of all claims of two patents owned by Celgene: U.S. Patent No. 6,045,501 ("the '501 patent") and U.S. Patent No. 6,315,720 ("the '720 patent"). The Patent Trial and Appeal Board ("Board") determined that all of the claims of the '501 patent and claims 1–9 and 11–32 of the '720 patent were invalid as obvious.

Celgene's '501 patent related to "methods for delivering a drug to a patient while preventing the exposure of a foetus or other contraindicated individual to the drug." Claim 1 narrowed the drug to teratogenic drugs, and claim 2 further narrowed the drug to thalidomide. In the IPR, CFAD argued—and the Board agreed—that all claims were invalid as obvious over a combination of three references.

Celgene's '702 patent related to an "[i]mproved methods for delivering to a patient in need of the drug, while avoiding the occurrence of an adverse side effect known or suspected of being caused by the drug." In the IPR, CFAD argued—and the Board agreed—that all 32 claims of the '720 patent were invalid as obvious over a combination of other references. On rehearing, the Board modified its decision, upholding the validity of claim 10 of the '720 patent.

On appeal, Celgene argued that the Board erred in finding all claims of the '501 patent and claims 1–9 and 11–32 of the '720 patent obvious. More importantly, Celgene also argued that the retroactive application of IPRs to patents filed before September 16, 2012, when the relevant provisions of the Leahy-Smith America Invents Act went into effect ("pre-AIA patents"), constituted an unconstitutional taking.

On the merits, the Court started by using the "broadest reasonable interpretation" standard of the claim language, noting that the PTO had since changed its claim construction standard used in IPR proceedings, but that that standard did not apply to the present IPRs.

The Court rejected Celgene's argument that the claims of the '501 patent required the "computer readable storage medium" to be centralized, finding nothing in the intrinsic evidence supporting this. The Court also rejected Celgene's argument that it would not have been obvious to counsel male patients about the risks of teratogenic drugs, as well as Celgene's argument that the Board improperly disregarded evidence of secondary considerations of non-obviousness.

For the '720 patent, the Court rejected Celgene's argument that there was no motivation to improve existing methods for avoiding birth defects from exposure to potentially hazardous drugs (e.g., thalidomide), noting Celgene's professed commitment to making improvements in its program. The Court also rejected Celgene's argument that a person of ordinary skill in the art would not have been motivated to develop the claimed invention, finding substantial evidence to support the Board's conclusion.

On the "taking" issue, the Court rejected Celgene's constitutional challenge to retroactive application of IPRs to pre-AIA patents, concluding that IPRs do not differ from pre-AIA review mechanisms (e.g., reexaminations) significantly enough, substantively or procedurally, to effectuate a taking. The Court noted that the validity of patents has always been subject to challenge in district court, and that, for the last forty years, patents have also been subject to reconsideration and possible cancellation by the PTO, citing ex parte and inter partes reexamination.

The Court found that Celgene's pre-AIA patents were therefore granted subject to existing judicial and administrative avenues for reconsidering their validity, and that IPRs "are the most recent legislative modification to the PTO's longstanding reconsideration procedures."

Relevant here, the Court rejected Celgene's arguments concerning differences between reexaminations and IPRs, including that IPRs are adjudicative and have discovery, briefing, and an oral hearing.
The Court focused on "the far more significant similarities between IPRs and their reexamination predecessors," including review on the same substantive grounds, use of the same standard of proof, and use of the same standard for claim construction (since changed for IPRs).

The Court also found that IPRs serve essentially the same purpose as their reexamination predecessors, noting that the Supreme Court had described district court challenges, ex parte reexaminations, and IPRs as different forms of the same thing—reexamination. Per the Federal Circuit, all three serve the purpose of correcting prior agency error of issuing patents that should not have issued.

The Court recognized differences between IPRs and pre-AIA predecessors, noting that post grant review procedures were intentionally more robust to provide a "more efficient system for challenging patents." The Court compared this to increasing the budget for or number of examiners in the reexamination unit. "While those changes might result in significantly more requests for reexamination and more claims being canceled, we doubt that anyone would argue that they effectuate a taking."

The Court also rejected Celgene's argument that IPRs are "adjudicatory in nature," saying that procedural differences with pre-AIA mechanisms "do not disrupt the expectation that patent owners have had for nearly four decades—that patents are open to PTO reconsideration and possible cancelation if it is determined...that the patents should not have issued in the first place."

The Court also rejected Celgene's attempt to distinguish IPRs from district court validity challenges, saying these differences serve only to demonstrate that IPRs are similar to reexaminations.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions