Federal Circuit Weighs in on Propriety of New Evidence Adduced During IPR Trial

cafc1In Genzyme Therapeutics v. Biomarin Pharma., the Federal Circuit considered what sort of notice and opportunity to be heard in an IPR will satisfy the Administrative Procedure Act (“APA,” 5 U.S.C. § 554(b) & (c)). Genzyme owns US 7,351,410 and US 7,655,226, which both concern methods of treating Pompe’s disease. When Biomarin petitioned for IPR of these two patents, Genzyme submitted a patent-owner statement arguing that the in vitro data in Biomarin’s petition were not sufficient to establish a reasonable expectation of success for the claimed methods, and therefore could not show that the challenged claims were more likely than not to be obvious.

The Board instituted IPR on both patents, despite Genzyme’s arguments about the insufficiency of in vitro data. In its petitioner response, Biomarin responded to Genzyme’s arguments about in vitro data by citing additional references that included in vivo data. Instead of arguing that these additional references do not establish a reasonable expectation of success, Genzyme pressed a procedural point, arguing that it was improper for the Board to consider references that were not included in the grounds of institution for each IPR trial. When the Board disagreed with Genzyme’s argument and relied on two of the in vivo references in its final written decision of unpatentability, Genzyme appealed this point to the Federal Circuit.

Judge Bryson wrote for a unanimous panel that also included Judges Moore and Reyna. The court disagreed with Genzyme’s argument in the strongest possible terms. The Federal Circuit noted that IPRs are trials, and that it is expected that additional evidence will come to light during the course of a trial. The Federal Circuit strongly disagreed with the idea that the Board is constrained to consider only those references that are cited in the institution decision. Indeed, the court noted that it had previously reversed the PTAB for refusing to consider a reference on the same grounds that Genzyme was urging here. Ariosa Diagnostics v. Verinata Health, 805 F.3d 1359, 1365 (Fed. Cir. 2015).

Rather, drawing on D.C. Circuit precedents, the court held that the APA is satisfied so long as the patentee has reasonable notice of the argument being advanced for unpatentability, and an adequate chance to respond. Here Genzyme was on notice of Biomarin’s reliance on the in vivo data from at least the point of Biomarin’s response brief. Also, during oral argument the PTAB questioned Genzyme extensively about several of the in vivo references. Genzyme could have moved under 37 C.F.R. § 42.64(c) to exclude the challenged references, but it did not. Therefore, the Federal Circuit held that Genzyme had been afforded adequate notice and opportunity to respond under the APA.

The Federal Circuit affirmed the PTAB’s holding of unpatentability for the challenged claims.

APA Review of IPR Decisions to Institute Proving to be a Dead-end

16515450_sThe recent ruling in Medtronic v. Lee, No. 1-15-cv-946 (E.D. Va. Jan. 21, 2016) clarifies certain important questions about whether APA review is available when a petitioner is dissatisfied with the PTAB institution decision. Perhaps not surprisingly, in view of Federal Circuit jurisprudence on judicial review of PTAB institution decisions, the answer in Medtronic is “no.”

This case involves a disappointed IPR petitioner suing Michelle Lee in her capacity as PTO director in the Eastern District of Virginia. The background to this suit began when Robert Bosch Healthcare Systems (RBHS) sued Cardiocom for patent infringement. Cardiocom responded by petitioning for IPR of RBHS’s patents. The petition was eventually denied, but after it was filed and before it was denied, Medtronic acquired Cardiocom as a wholly owned subsidiary. More than one year after RBHS filed suit, Medtronic filed a second IPR petition in its own name, not naming Cardiocom as a real-party-in-interest. The PTAB granted this petition. RBHS requested reconsideration, however, based on the one-year time bar and Medtronic’s connections to Cardiocom. The PTAB reversed itself on reconsideration and dismissed the Medtronic petition.

It has already been well-established that a party dissatisfied with the PTAB’s refusal to institute cannot seek appellate review in the Federal Circuit. St. Jude Medical v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014). Instead of wasting its time trying to convince the Federal Circuit to go against St. Jude, Medtronic instead sought review in the Eastern District of Virginia under the Administrative Procedures Act (APA), on the grounds that the PTAB’s decision to dismiss was arbitrary and capricious, or otherwise contrary to law. 5 U.S.C. §§ 702 & 704. The question of whether one can use the APA to get review of PTAB institution decisions is still open. GTNX Inc. v. INTTRA Inc., 789 F.3d 1309, 1313 (Fed. Cir. 2015). However, the Medtronic court reads 35 U.S.C. § 314(d) as completely stripping courts of any authority to review institution decisions, even review under the APA. While the Eastern District of Virginia is not necessarily the last word on this subject (especially in view of the recent certiorari for In re Cuozzo Speed Tech.), it does suggest that APA review will be no more availing than any previous efforts to seek review of a PTAB decision to institute or not institute.