Federal Circuit Affirms The PTAB's Decision Finding The Patent Claims Unpatentable As Obvious Where The Patent Owner Did Not Demonstrate That The Board Violated The Administrative Procedure Act Requirements Of Notice And An Opportunity To Respond

NOVARTIS AG, MITSUBISHI PHARMA CORP., v. TORRENT PHARM. LTD.: April 12, 2017. Before Taranto, Chen, and Stoll. (precedential).

Takeaways:

The Patent Trial and Appeal Board did not violate the requirements of notice and an opportunity to respond found in the Administrative Procedure Act when it relied on a prior art reference in the final written decision because the discussion of the reference in the final written decision was not inconsistent with its review of the reference in the institution decision. In order for objective indicia evidence to be accorded substantial weight by the PTAB, a nexus must exist between the evidence and the merits of the claimed invention. If commercial success is due to an element in the prior art, there is no nexus. If the feature that creates the commercial success was known in the prior art, the success of the claimed invention is not probative. Procedural Posture:

Novartis AG appealed the Final Written Decision of the Patent Trial and Appeal Board in two consolidated inter partes review proceedings finding all of the patent claims unpatentable as obvious. CAFC affirmed.

Synopsis:

APA Due Process: The Administrative Procedure Act imposes certain procedural requirements on agencies, including that in an inter partes review proceeding, the PTAB must provide the patent owner with timely notice of "the matters of fact and law asserted," and an opportunity to submit facts and argument. Novartis argued that the Board violated these requirements of notice and an opportunity to respond when the Board used the Sakai reference as part of its motivation to combine analysis in the Final Written Decision. Novartis argued that the Board ruled Sakai entirely out of the case in the Institution Decision and that Novartis consequently relied on that ruling and submitted a "vastly different" record than it would have if it had known Sakai was still a live issue. The CAFC disagreed with Novartis that the Board ruled Sakai out of the case in the Institution Decision, finding instead that the Board did not find that Sakai anticipated, but did find it relevant to one of skill in the art in deciding which excipients to use in formulating a solid oral dosage form of fingolimod. The CAFC found that the Board's discussion of Sakai in the Final Written Decision was not inconsistent with its review of Sakai in the Institution Decision. In addition, the CAFC found that the petitioners repeatedly referenced Sakai as evidence that the...