The year was slow for biologics¹ at the PTAB. In 2020, only two IPR petitions and one PGR petition were filed against patents covering biologic drugs. This number is down from 14 biologic IPR petitions filed in 2019 and 20 biologic IPR petitions filed in 2018. The first IPR petition concerned a transgenic mouse patent held by Kymab for producing antibodies, which was denied under § 325(d). The second IPR petition, still pending as of the date of publication, was filed against an Amgen biologics method patent not clearly related to any specific product. The single PGR petition, also still pending as of the date of publication, concerned a patent held by SeaGen covering Enhertu® (trastuzumab deruxtecan). Several explanations have been offered for this precipitous decline in filings, including a general slowdown in biologic activity, the effects of the COVID-19 pandemic, and uncertainty surrounding IPR since Arthrex v. Smith & Nephew, No. 18-2140 (Fed. Cir. Oct. 31, 2019).
¹We define “biologics” as antibodies and the like used in humans. We exclude small peptide drugs (<40aa), animal vaccines, and animal therapeutics.
On November 5, 2020, Fish Senior Principal John Dragseth and Principal Nitika Gupta Fiorella hosted the Post-Grant for Practitioners webinar “Post-Grant Appeals.” In it, they discussed the latest post-grant decisions from the Court of Appeals for the Federal Circuit. If you missed that webinar, you can find a summary of many of the cases they covered below, as well as a few additional cases from the past year.
Legality of PTAB Judges
In Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), a Federal Circuit panel held that Patent Trial and Appeal Board (PTAB) judges were unconstitutionally appointed because they were “principal,” not “inferior,” officers and thus needed nomination and Senate confirmation. But the panel had a fix to avoid obliterating post-grant review altogether: it made the judges terminable at will, to make them “inferior” officers. The Supreme Court accepted review on the following issues: (1) whether the judges were initially invalid, and if so, (2) whether the Federal Circuit’s fix was legitimate. United States v. Arthrex, Inc., Docket No. 19-1434 (cert. granted Oct. 13, 2020). Oral argument will be in early 2021, and we can expect a decision by June or earlier.
Although widely seen as one of the most noteworthy cases this year, the practical effect of Arthrex might not be game-changing outside certain cases. If the Supreme Court affirms, a number of cases that were decided soon after Arthrex will get a rehearing at the U.S. Patent and Trademark Office (PTO). On the other hand, the Court could decide that the Federal Circuit’s fix is invalid, and there is no judicial fix. Even then, Congress could still work with the PTO to try to fix things. However, it remains uncertain as to how disruptive that would be. Notably, in Ciena Corp. v. Oyster Optics, LLC, 958 F.3d 1157 (Fed. Cir. 2020) (Order), the Federal Circuit said that only patentees can challenge the constitutionality of the APJs, because petitioners chose the IPR option in the first place—so this will cut down on who can complain, even if the Supreme Court rules IPR judges invalid. Bottom line: continue to preserve objections on this ground.
Reviewability
In Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367, 206 L. Ed. 2d 554 (2020), the Supreme Court held that a patentee could not challenge the PTAB’s decision to institute a petition that the patentee argued was time-barred. The looming question then is, what PTAB decisions made at institution can the courts review? The Supreme Court’s opinion seems to say that no one—neither patentees nor petitioners—can complain about institution or non-institution, but that has enormous ramifications, particularly on the non-institution side. That is because the PTAB has been declining institution of petitions that it identifies as meritorious for a host of policy-driven reasons, including for efficiency where a patent is involved in a parallel fast-track litigation. So far, no petitions for mandamus have inspired review of such rulings, e.g., Cisco Systems Inc. v. Iancu, No. 20-148, 2020 WL 6373016 (Fed. Cir. Oct. 30, 2020). Pending review, however, is an APA suit filed by several technology companies in the Northern District of California that challenges similar actions by the PTO, Cisco Sys., Inc. et al. v. Iancu, No. 5:20-cv-6128 (N.D. Cal., filed Aug. 31, 2020).
Standing
Congress gave any “person” who is not the patent owner standing to bring an IPR, but Article III of the Constitution limits judicial review of an IPR to cases in which there is a live “case or controversy.” In other words to establish Article III standing for appeal, the losing petitioner must be able to show a concrete and imminent risk of being sued for patent infringement. Since the AIA’s inception, the Federal Circuit has continued to clarify the law on what constitutes “imminent risk” for standing, and 2020 was no different.
For example, in Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corp., 956 F.3d 1374, 1377 (Fed. Cir. 2020), Argentum appealed a holding that it failed to establish the unpatentability of Novartis’ patent claims to a particular drug. Argentum tried to show risk of suit by pointing to its marketing partner’s plans to file an Abbreviated New Drug Application (ANDA), but the court said that was not enough because (1) Argentum’s marketing partner had not filed the ANDA yet, and (2) if Novartis sued anyone, it would be Argentum’s marketing partner, not Argentum.
On the other hand, the court found standing in Adidas AG v. Nike, Inc., 963 F.3d 1355, 1357 (Fed. Cir. 2020), where the patentee had (1) previously sued the petitioner on a different patent; (2) refused to grant the petitioner a covenant not to sue for similar, ongoing conduct; and (3) sued a third party with a similar product to the petitioner’s on the patent in the IPR. Similarly, in Grit Energy Solutions, LLC v. Oren Technologies, LLC, 957 F.3d 1309, 1319 (Fed. Cir. 2020), the court said a petitioner that had previously been sued on the patent had standing where the previous action had been dismissed without prejudice. These cases stand for the principle that injury-in-fact in patent cases require the petitioner-appellant to show more than a generalized fear of infringement; rather, there must be something in the past dealings with the patentee or the nature of the petitioner’s actions that suggest suit is imminent.
Estoppel
Like standing, estoppel is another legal issue that continues to dominate the Federal Circuit’s PTAB appeals docket. The court issued a number of cases this year touching on estoppel that arises between different IPRs and estoppel from IPRs into litigation.
In Papst Licensing GmbH v. Samsung Electronics America, Inc., 924 F.3d 1243 (Fed. Cir. 2019), the court looked at the classic collateral estoppel effect from prior IPRs. In that case, the court found the patentee estopped from challenging the PTAB’s obviousness findings that were common with other IPRs, the appeals of which the patentee had voluntarily dismissed. But in Power Integrations, Inc. v. Semiconductor Components Industries, LLC, 926 F.3d 1306, 1313 (Fed. Cir. 2019), the court found no estoppel even where the patentee had already litigated and lost an issue in another IPR, which it chose not to appeal. Unlike Papst, in Power Integrations, the court found the prior patent was not in real dispute between the parties at the time of the decision and, thus, that the patentee had no incentive to fully litigate it.
The court also took on cases involving the more common type of estoppel—where a petitioner is prevented from presenting in litigation prior art that it could have brought in an IPR. See 35 U.S.C. § 315(e)(2). In Network-1 Techs., Inc. v. Hewlett-Packard Co., 976 F.3d 1301, 1312 (Fed. Cir. 2020), for example, the court found a party that joined an IPR after institution was not estopped from raising invalidity challenges in district court based on prior art that could have been, but was not, raised in the IPR. One unanswered question is what happens with estoppels in district court when a petitioner wins an IPR. The court was presented with this issue in BTG Int’l Ltd. v. Amneal Pharms. LLC, where the PTO advocated that a petitioner should be estopped from raising grounds in litigation that it advanced and won in the IPR; the court did not reach the issue but instead decided the case on other grounds. 923 F.3d 1063, 1066 (Fed. Cir. 2019).
Indefiniteness at the PTAB
The Board has long had a policy of not reviewing, in IPR proceedings, claims that are indefinite. In Samsung Electronics America, Inc. v. Prisua Engineering Corp., 948 F.3d 1342 (Fed. Cir. 2020), the Federal Circuit held that the Board cannot invalidate claims for Section 112 issues in IPR, but that a supposed indefiniteness problem (here, claims that fail under IPXL) would not prevent the Board from applying the prior art, as long as the indefiniteness problem did not interfere with such prior art application. So there is space for petitioners to get IPR review of certain indefinite claims. But the Board still can refuse to look at claims whose indefiniteness issues get in the way. For example, in Cochlear Bone Anchored Solutions AB v. Oticon Medical AB, 958 F.3d 1348 (Fed. Cir. 2020), the court found no error in the Board’s refusal to address certain means-plus-function limitations that had no corresponding structure, but faulted the Board on one limitation because the claim recited a physical structure “and/or” the means-plus-function element, so the means-plus-function element was not required.
Constitutionality of IPR for Pre-AIA Patents
The constitutionality of IPR for pre-AIA patents was also at play this year. In Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019), the Federal Circuit held that IPR challenges to pre-AIA patents are not unconstitutional (i.e., they are not a taking of an issued patent or a violation of due process). The Supreme Court has since denied certiorari on this and several other cases that raised the same issue. And in Personal Audio, LLC v. CBS Corp., 946 F.3d 1348 (Fed. Cir. 2020), the Federal Circuit held that a district court cannot consider arguments that various aspects of IPR are illegal, since a patentee can, and must, make those arguments in IPR.
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