By Scott A. McKeown
| April 17, 2017

CAFC Emphasizes that Art of Denied Petition Grounds Can Come Back to Haunt Patentees


It is not uncommon for an AIA Trial Proceeding, such as Inter Partes Review (IPR), to be instituted on a subset of unpatentability grounds presented in the petition. For example, IPR is currently granted on a claim-by-claim basis.  That is, petition grounds can be accepted or denied based upon the Patent Trial & Appeal Board's (PTAB) conclusions as to whether a reasonable likelihood of prevailing is shown for a given patent claim.

In the case of partial PTAB trial institutions, Patentees will often employ a strategy to formally object to the aspects of the preliminary record that include reference to prior art of the denied grounds.  The thinking here is that the objection will preserve the right to exclude this seemingly irrelevant art from the record at the close of trial. 37 C.F.R. § 42.64. Yet, art of a denied petition ground can be (and usually is) highly relevant at trial.

The Federal Circuit recently considered the relevance of denied ground prior art in Novartis v. Torrent Pharmaceuticals (here).  In this appeal from multiple IPRs, the Court considered the PTAB's decision to cancel all claims of U.S. Patent 8,324,283, which claimed oral administration of a pharmaceutical compound for treating multiple sclerosis.

The PTAB's Institution Decision in Novartis denied grounds including a prior art reference known as "Sakai."   The PTAB found that while Sakai showed that certain ingredients could be predictably combined in liquid form, it did not teach a solid formulation as claimed.   But, other grounds were accepted for trial that addressed the solid formulation feature.  For these grounds, Sakai was nevertheless relied upon for demonstrating the knowledge in the art as to the predictability of the combination of key ingredients.  In the Final Written Decision (FWD) following the trial, the claims were cancelled, and the Board referenced the rationale of Sakai as supporting its conclusion.

Novartis argued the Board violated the Administrative Procedure Act (APA) when it relied on Sakai in the Final Written Decision without affording Novartis proper notice and a chance to be heard.  In essence, Novartis took the position that Sakai was effectively "ruled out" of the trial when the grounds including it were denied.

The Federal Circuit rejected this argument, explaining:
[T]he Board found that Sakai merely reinforced its finding that the person of ordinary skill in the art would have expected [compatible ingredients] because Sakai discloses a stable combination of these two ingredients suitable for long-term preservation. The Board’s discussion of Sakai in the Final Written Decision was not inconsistent with its review of Sakai in the Institution Decision
Thereafter, the Court pointed out that Sakai was the subject of much of the briefing at trial and there was no "surprise."  It also faulted Novartis for a boilerplate Motion to Exclude in which it might have made its argument more artfully to the PTAB (footnote 2).

Still, even had Novartis's Motion to Exclude been more focused, however, it is unlikely that such would have made a difference.  Independent of whether Sakai was explicitly relied upon in the accepted trial grounds as documentary evidence of motivation/predictability, assuming trial would have gone forward on the accepted grounds without it, its introduction to the trial record would have been a fair rebuttal exhibit under the Court's Belden decision.




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