Arthrex loses at CAFC

Of note:


Arthrex first contends that the Board impermissibly
relied on a new theory of motivation to combine in its final
written decision. As we have often explained, IPR proceedings are
formal administrative adjudications subject to the
procedural requirements of the APA. See, e.g., Dell Inc. v.
Acceleron, LLC, 818 F.3d 1293, 1298 (Fed. Cir.
2016); Belden, 805 F.3d at 1080. One of these requirements is that
“‘an agency may not change theories in midstream without giving respondents reasonable notice of the
change’ and ‘the opportunity to present argument under
the new theory.’” Belden, 805 F.3d at 1080 (quoting Rodale
Press, Inc. v. FTC, 407 F.2d 1252, 1256–57 (D.C. Cir.
1968)); see also 5 U.S.C. § 554(b)(3). Nor may the Board
craft new grounds of unpatentability not advanced by the
petitioner. See In re NuVasive, Inc., 841 F.3d 966, 971–72
(Fed. Cir. 2016); In re Magnum Oil Tools Int’l, Ltd.,
829 F.3d 1364, 1381 (Fed. Cir. 2016).

(...)

In any event, even if Arthrex’s patent had issued prior
to the passage of the AIA, our court recently rejected arguments similar to Arthrex’s in Celgene Corp. v. Peter.
No. 18-1167, 2019 WL 3418549, at *12–16 (Fed. Cir.
July 30, 2019). As we explained, pre-AIA patents issued
subject to both district court and Patent Office validity proceedings. Though IPR differs from these existing proceedings, we held that the differences between IPRs and the
district court and Patent Office proceedings that existed
prior to the AIA are not so significant as to “create a constitutional issue” when IPR is applied to pre-AIA patents.
Id. at *15; see also id. at *12 & n.13 (affirming that our
prior decisions ruling that retroactive application of reexamination does not violate the Fifth Amendment, the Seventh Amendment, or Article III “control the outcome” of
similar challenges to IPR).