Wednesday, April 05, 2017

Novartis AG loses to Noven in appeal of PTAB written decisions


In Novartis v. Noven, the CAFC affirmed PTAB:


The instant appeals concern inter partes reviews of
U.S. Patent Nos. 6,316,023 (“the ’023 patent”) and
6,335,031 (“the ’031 patent”) (together, “the Patents-in-
Suit”). In two separate final written decisions, the U.S.
Patent and Trademark Office’s (“USPTO”) Patent Trial
and Appeal Board (“PTAB”) found that various claims of
the Patents-in-Suit (“the Asserted Claims”)1 would have
been obvious over the prior art. See Noven Pharm., Inc. v.
Novartis AG (Noven I), No. IPR2014-00549, 2015 WL
5782080, at *23 (P.T.A.B. Sept. 28, 2015) (finding the
disputed claims of the ’023 patent unpatentable as obvious);
Noven Pharm., Inc. v. Novartis AG (Noven II), No.
IPR2014-00550, 2015 WL 5782081, at *23 (P.T.A.B. Sept.
28, 2015) (finding the disputed claims of the ’031 patent
unpatentable as obvious). The PTAB maintained its
findings when asked to reconsider them. See Noven
Pharm., Inc. v. Novartis AG (Noven III), No. IPR2014-
00549, 2015 WL 9599194, at *8 (P.T.A.B. Nov. 30, 2015)
(denying request to reconsider Noven I); Noven Pharm.,
Inc. v. Novartis AG (Noven IV), No. IPR2014-00550, 2015
WL 9599195, at *8 (P.T.A.B. Nov. 30, 2015) (denying
request to reconsider Noven II). Appellants Novartis AG
and LTS Lohmann Therapie-Systeme AG (together,
“Novartis”) contest numerous aspects of the Final Written
Decisions, including the PTAB’s conclusion that prior
judicial opinions did not control its inquiry and the
PTAB’s factual findings in support of its obviousness
conclusion. We affirm.





Note what was argued:


Instead of raising arguments on the basis of a specific
claim, patent, or Final Written Decision, Novartis raises
broad legal and factual arguments with application to
both of the Final Written Decisions. See Appellants’ Br. 6
n.1 (stating that the appealed decisions “are substantively
nearly the same” and that it will refer only to Noven II
throughout its brief), 35–65 (presenting arguments); see
also Appellee’s Br. 1 n.1 (agreeing to follow Novartis’s
convention and cite only to Noven II). After providing a
brief description of the Patents-in-Suit, we address Novartis’s
arguments in turn.



Of prior decisions:


Novartis alleges that a fundamental legal error pervades
the PTAB’s Final Written Decisions: the PTAB
unlawfully reached different conclusions than our court
and the U.S. District Court for the District of Delaware
(“Delaware District Court”), which addressed the “same”
arguments and the “same” evidence and found the Asserted
Claims nonobvious in two prior opinions. Appellants’
Br. 29; see id. at 35–39, 46–47, 52–56, 60–62 (discussing
Novartis Pharm. Corp. v. Watson Labs., Inc., 611 F. App’x
988 (Fed. Cir. 2015) and Novartis Pharm. Corp. v. Noven
Pharm., Inc. (Noven D. Del.), 125 F. Supp. 3d 474 (D. Del.
2015)). In support of that position, Novartis relies substantially
on a single sentence from our decision in In re
Baxter International, Inc. See, e.g., id. at 30 (discussing
678 F.3d 1357, 1365 (Fed. Cir. 2012)).

Novartis’s argument fails on factual and legal
grounds. As an initial matter, the record here differed
from that in the prior litigation, meaning that Novartis’s
argument rests on a faulty factual predicate. With respect
to Watson, the PTAB found that it “does not control
here because [Appellee] Noven [Pharmaceuticals Inc.
(‘Noven’)] has presented additional prior art” like Sasaki
“and declaratory evidence that was not before the [c]ourt”
in that case.5 Noven II, 2015 WL 5782081, at *2. Similarly,
as to Noven D. Del., the PTAB found that it did not
control because the parties provided additional evidence
that was not before the Delaware District Court.6 Id.; see
id. at *5 (identifying as new evidence two declarations of
Dr. Agis Kydonieus, two declarations of Dr. Christian
Schöneich, and one declaration of Dr. Alexander M.
Klibanov). Novartis tacitly concedes that the record here
is different. See Appellants’ Reply 7 n.1 (“The USPTO
and Noven argue that the parties submitted expert declarations
and deposition testimony that was not before the
Noven [D. Del.] Court. But neither disputes that these
materials are substantively the same as the experts’
testimony before the Noven [D. Del.] Court.” (emphasis
added) (citations omitted)), 11 (“The [PTAB] sought to
explain its rejection of this [c]ourt’s Watson decision on
grounds that Noven presented art and evidence in the
[inter partes review] that was not before the Watson
[c]ourt[]. While differences in the record could justify a
different outcome overall, under Baxter, they do not support
the [PTAB]’s contrary conclusions on the specific
rivastigmine art and arguments previously adjudicated in
Watson.” (emphasis added) (citation omitted)). It is
unsurprising that different records may lead to different
findings and conclusions.


Nevertheless, even if the record were the same, Novartis’s
argument would fail as a matter of law.
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. Noven
II, 2015 WL 5782081, at *2 (italics omitted). That position
comports with recent Supreme Court precedent,
which held that
[a] district court may find a patent claim to be valid,
and the [USPTO] may later cancel that claim
in its own review. . . . This possibility, however,
has long been present in our patent system, which
provides different tracks—one in the [USPTO]
and one in the courts—for the review and adjudication
of patent claims. As we have explained
. . . , inter partes review imposes a
different burden of proof on the challenger. These
different evidentiary burdens mean that the possibility
of inconsistent results is inherent to Congress’[
s] regulatory design.
Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2146
(2016) (citation omitted). Thus, the prior decisions in
Watson and Noven D. Del. did not bind the PTAB.




In passing, one notes that the four Acorda/Ampyra multiple
sclerosis patents, found "not invalid" by PTAB under the more
lenient standard, were found invalid by D. Delaware under the more exacting
standard imposed on the patent challenger in federal district court. HOWEVER, note that the facts
and art were different in the two proceedings. HOWEVER, note the different
treatment of "unexpected results" in the two proceedings.

Of motivation to combine


Turning to its motivation to combine arguments, Novartis
argues that the record contains no evidence that a
PHOSITA “would have been motivated to add an antioxidant”
to rivastigmine “absent evidence of oxidative degradation.”
Id. at 40. First, Novartis avers that the record
shows a PHOSITA “would only have added an antioxidant
when required to address a known oxidative degradation
problem” detected during testing. Id. Novartis ignores
the PTAB’s findings as to the PHOSITA’s skill in the art.
The PTAB found that a PHOSITA would have, inter alia,
“had knowledge of organic chemistry and been able to
analyze and recognize certain characteristics of a compound
based on its chemical structure.” Noven II, 2015
WL 5782081, at *7. The PTAB further found that “the
ability to predict reactivity based on functional group
properties is a foundation of organic chemistry, and a
[PHOSITA] would have understood that the presence of
particular functional groups in a molecule has consequences,”
such as degradation. Id. (citations omitted).
Ample record evidence from scholarly sources supports
the PTAB’s findings. See Robert T. Morrison & Robert N.
Boyd, Organic Chemistry 167 (6th ed. 1992) (J.A. 2892)
(providing that “[t]he atom or group of atoms that defines
the structure of a particular family of organic compounds
and, at the same time, determines their properties is
called the functional group” (italics and bold omitted)); see
also J. Guillory & R. Poust, Chemical Kinetics and Drug
Stability, in Modern Pharmaceutics 181 (Gilbert S. Banker
& Christopher T. Rhodes eds., 3d ed. 1996) (J.A. 1846)
(providing that “it is possible to anticipate the potential
mode(s) of degradation that drug molecules will likely
undergo” through “the application of functional group
chemistry”). The expert testimony of Dr. Schöneich
corroborates the content of these sources. See J.A. 1350–
52. Thus, substantial evidence supports the PTAB’s
finding that a PHOSITA would not have waited to add an
antioxidant until discovering degradation during testing,
but would have assessed a compound’s structure in advance
of testing to determine whether an antioxidant
should be added.

(...)

First, Novartis predicates
its argument on the belief that the prior art must expressly
disclose a motivation to combine; however, a “motivation
to combine the relevant prior art teachings does not
have to be found explicitly in the prior art.” In re Kahn,
441 F.3d 977, 987 (Fed. Cir. 2006) (citation omitted).
Second, the PTAB addressed Dr. Klibanov’s testimony
and found that it was not relevant because it did not
address transdermal devices with acrylic polymer. See
Noven II, 2015 WL 5782081, at *11. Novartis’s argument
asks us to reweigh the evidence and give greater weight
to Dr. Klibanov’s testimony than did the PTAB, which we
may not do. See, e.g., Warsaw, 832 F.3d at 1333 (explaining
that the court “may not reweigh . . . evidence on
appeal” (citation omitted)).



The bottom line


The PTAB found the Asserted Claims unpatentable as
obvious for additional reasons not discussed above. See
Noven I, 2015 WL 5782080, at *23; Noven II, 2015 WL
5782081, at *23. However, because we affirm the PTAB’s
conclusions that the Asserted Claims would have been
unpatentable as obvious on the grounds discussed, we
need not address the alternative grounds of unpatentability.
See In re Gleave, 560 F.3d 1331, 1338 (Fed. Cir. 2009)
(declining to address alternative grounds of unpatentability
when the court upholds one such ground). Therefore,
for the foregoing reasons, the Final Written Decisions of
the U.S. Patent and Trademark Office’s Patent Trial and
Appeal Board are
AFFIRMED

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