Instituted Grounds Can be Supported with New Evidence Not Present in Petition/Institution Decision

Within the past week, the Court of Appeals for the Federal Circuit (CAFC) has issued two significant opinions on AIA trial practice—both of which explain the critical import of the Administrative Procedure Act (APA). As discussed earlier this week, 5 U.S.C. § 554(b)(3) prevents the Patent Trial & Appeal Board (PTAB) from introducing new claim interpretation theories without notice, or opportunity to respond in SAS Institute Inc., v. ComplemenSoft LLC. On the heels of that decision comes perhaps an even more significant decision in Genzyme Therapeutic Products LP v. BioMarin Pharmaceutical Inc.

In Genzyme, the Court dispelled a widely held belief held by many practitioners and PTAB judges alike.  Namely, that an AIA trial petition must function as a storehouse for all possible evidence and arguments.  In a plainly worded opinion the Federal Circuit found that “[t]he purpose of the trial in an inter partes review proceeding is to give the parties an opportunity to build a record by introducing evidence—not simply to weigh evidence of which the Board is already aware.” (emphasis added) (here)

Simply stated, this decision is an AIA trial practice game changer.

Genzyme appealed a PTAB final written decision in two IPR proceedings in which the Board held claims of two of its patents unpatentable as obvious.  In its Institution Decision, the Board instituted review of one patent on two grounds: a combination of a Duke press release and two references known as Barton and van der Ploeg ’88; and a .combination of a reference known as Reuser with Barton and van der Ploeg ’88.  The Board instituted review of a second patent based on a combination of the Duke press release, Reuser, and a reference known as van Hove. None of these references included data from in vivo tests on live animals.

In its trial responses, Genzyme introduced evidence of in vivo experiments, arguing that, because the Board did not institute review based on any references that included in vivo data, petitioner should not be permitted to use any prior art showing successful in vivo tests to demonstrate obviousness. However, in its trial reply, petitioner noted two in vivo studies, referred to as van der Ploeg ’91 and Kikuchi.  In its finding that the disputed claims were obvious, the Board found that a person of ordinary skill at the relevant priority date would have been motivated to pursue the clinical development of the therapy disclosed in Reuser.  As support for its findings as to the state of the art regarding in vivo studies, relevant to obviousness, the Board referred to the Kikuchi and van der Ploeg ’91 references, concluding that “a person of ordinary skill in the art would have had a reasonable expectation of success at the time the invention was made.”

Genzyme cried foul.

In its CAFC appeal, Genzyme had argued that the Board violated the requirements of notice and an opportunity to respond found in the Administrative Procedure Act (“APA”) because, in finding that the claims at issue were unpatentable, the Board relied on “facts and legal arguments” that were not set forth in the institution decisions–that is, the data on
in vivo test results. Therefore, Genzyme argued, it was denied notice “of the issues to be considered by the Board and an opportunity to address the facts and legal arguments on which the Board’s patentability determination [would] rest.”

However, the Court found that Genzyme did have notice of the specific combinations of references that the Board relied on in finding the claims invalid, which did not change. The final written decisions in the IPRs only cited to additional evidence that reinforced these original trial grounds. That is, the in vivo studies were referenced in the obviousness determination, but only insofar as establishing what a person of ordinary skill would have known.  On Genzyme’s theory that this specific explanation needed to be in the petition from the start, the Court explained that “as long as the opposing party is given notice of the evidence and an opportunity to respond to it, the introduction of such evidence is perfectly permissible under the APA.”

Not stopping there, the Court amplified that there is no requirement for an institution decision to “anticipate and set forth every legal or factual issue that might arise in the course of the trial.” In the adversarial IPR process, evidence will be developed in the course of the trial and the Board complies with the APA if it allows the parties to receive “adequate notice of the issues that would be considered, and ultimately resolved,” at the hearing.  In this IPR, Genzyme–which brought up the subject of in vivo references initially– was not denied notice, or an opportunity to be heard “at a meaningful point.”

While earlier CAFC decisions on AIA trial practice such as Belden Inc., v. Berk-Tek LLC made clear that the Board had considerable discretion in allowing rebuttal evidence from petitioners that served to bolster a trial ground rather than formulate a new one, Genzyme makes clear that additional evidence is, in fact, expected

The practice of preparing the most comprehensive petition possible will still hold given the ability of patentees to present new evidence in their preliminary responses pointing out an evidentiary or legal oversight.  Yet, Genzyme has offered comforting clarity to petitioners, and makes decisions to institute AIA trial proceedings all the more formidable for patentees.