The Federal Circuit continued its explication of the circumstances wherein an inter partes review petition is time-barred under 35 U.S.C. § 315(b) in Mayne Pharma Int'l v. Merck Sharp & Dohme Corp., decided earlier this month, and as a bonus, illustrated how including disclosure in a specification for completeness and expanded claim scope can result in an invalidated claim when that scope unnecessarily encompasses the prior art.

The case arose as an appeal from the decision of the Patent Trial and Appeal Board (PTAB) in inter partes review of U.S. Patent No. 6,881,745 that claims 2, 6, and 9-14 are invalid as anticipated or obvious.  The '745 patent claims pharmaceutical formulations of azole antifungal drugs having the distinguishing feature that they are almost insoluble in water.  This limits their therapeutic effectiveness because it results in poor bioavailability inter alia due to low absorption.  The claims of the '745 patent are directed to formulations having improved bioavailability; claim 9 is representative:

A pharmaceutical composition, consisting essentially of:
    about 100 mg of an azole antifungal drug; and
    one or more polymer[s] having acidic functional groups; and
    optionally one or more additional ingredients selected from the group consisting of a disintegrant, a diluent, a filler, an inert solid carrier, an inert solid matrix, a lubricant, a glidant, a colouring agent, a pigment, a flavour, water, ammonia, an alkaline agent, and methylene chloride,
    wherein in vivo the composition provides a mean CMAX of at least 100 ng/ml, after administration in the fasted state.

(where the italicized claim terms are relevant for the issues before the Court).  Claims 6, 12, 13, and 14 further require a mean area under the curve (AUC) value of at least 800 ng-h/ml.  Although the Board instituted on three grounds, Mayne Pharma cancelled claims 1, 3, 5, and 6, rendering one of the grounds moot.  The remaining grounds decided by the PTAB were: 1) that claims 2, 6, 9, 11, 12, and 14 were anticipated by a scientific journal article to Kai, and 2) that these claims and claims 10 and 13 were obvious over the combination of Kai with two additional references (PCT Publication No. WO 98/00113 and European Patent Application No. EP 1027866).  Mayne appealed, arguing: 1) that the PTAB had erred because the IPR was time barred under § 315(b), and 2) by not limiting the claims to non-toxic embodiments of the claimed formulations.

The Federal Circuit affirmed, in an opinion by Judge Lourie, joined by Judges Dyk and O'Malley.  The circumstances surrounding Mayne Pharma's assertion of the § 315(b) time bar were that the real party in interest was Merck & Co. instead of Merck Sharp & Dohme Corp. (relevant because of earlier litigation outside the one-year limit for instituting an IPR after a complaint alleging patent infringement lawsuit has been served).  Mayne Pharma raised this issue throughout the proceedings before the PTAB, starting at the institution phase and throughout the review proceedings.  The Board eventually acquiesced, but refused to change the petition filing date, on the grounds that this would both "promote[] the core functions" from the PTAB Trial Practice Guide as well as "serv[ing] the interests of justice."  Mayne Pharma argued that the PTAB's own rules, specifically 37 C.F.R. § 42.104, permitted amendments to the petition without penalty regarding the filing date only for "clerical or typographical mistakes," which was not the case here.  Merck argued that the issue was beyond the scope of Federal Circuit review under § 314(d) and consistent with the Supreme Court's decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).  In the alternative, Merck argued that the Board ruled within the scope of its discretion in deciding not to alter the petition filing date when adding MCI as the real party in interest.  The issue is sufficiently important to the PTAB that the PTO intervened in the appeal in support of Merck's position.

The panel decided that there was no need to address the appealability issue because the § 314(d) bar is not a jurisdictional issue.  And in any event, the panel opined that the Board "committed no reversible error" and thus appealability is not an issue.  On the merits, the Federal Circuit made reference to the Trial Practice Guide for the purpose of identifying the real party in interest, which is to "identify[] conflicts and assure[] proper application of statutory estoppel."  The Board properly found (according to the panel opinion) that there was no evidence of "bad faith, or prejudice to a patent owner caused by the delay," or "intentional concealment, . . . bad faith on MSD's part, [an] attempt to circumvent the estoppel rules, or any other material benefit to it in its delay," permitting amendment to the identify of the real party in interest was "in the interest of justice under § 42.5(c)(3)."  After citing the provisions of the Leahy-Smith America Invents Act granting the PTO the discretion to promulgate rules to effectuate Congressional intent regarding inter partes review, and the principles regarding proper judicial deference to administrative agency rulemaking pursuant to Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the panel affirmed the Board's decision based on the "interests of justice."  These interests would not be promoted, in the Court's opinion, by "unwinding the proceedings" and reversing the Board's decision.  And the Court further found that the primacy of § 42.104(c) purported by Mayne Pharma in support of reversing the Board was inconsistent with the Board having expressly determined that a petitioner could change the real party in interest without changing the petition filing date in Elekta Inc. v. Varian Med. Sys., Inc., No. IPR 2015-01401, 2015 WL 9898990, at *5 (P.T.A.B. Dec. 31, 2015), and Lumentum Holdings, Inc. v. Capella Photonics, Inc., No. IPR2015-00739, 2016 WL 2736005, at *3 (P.T.A.B. Mar. 4, 2016), as well as the Court's own precedent, citing Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018).

Turning to the merits of the Board's invalidation decision, the panel noted that the Board had given the claims their broadest reasonable interpretation regarding the term "pharmaceutical composition."  Specifically, under this construction the Board considered both toxic and substantially non-toxic embodiments of azole antifungal drugs.  Mayne argued that their proffered construction was consistent with the parameters for the claimed formulations set forth in the "wherein" clauses of the challenged claims (referring to the pharmacokinetic characteristics of the claimed formulations in humans).  The Board had based its construction on the presence in the specification of toxic azole antifungal drugs such as saperconazole as well as (relatively) non-toxic azole antifungal drugs such as itraconazole.  And the "wherein" clauses were not limiting because their effect on claim scope was to limit the claims to "in vivo" applications, which could encompass administration to animals as well as human beings.

Applying this construction to Merck's anticipation and obviousness contentions, the Board found that Kai disclosed all the elements of the claimed formulation as administered to beagle dogs.  Regarding the obviousness case, the Board found sufficient motivation to combine the cited references, and a reasonable expectation of success.  Finally, the Board considered and rejected secondary considerations of non-obviousness asserted by Mayne Pharma.

The Federal Circuit also affirmed this portion of the Board's decision, applying the substantial evidence standard to the factual portions of the decision and reviewing claim construction de novo.  The panel agreed that the claims were not limited to non-toxic azole antifungal formulations, despite the modifier in the claims that these were "pharmaceutical" compositions based on (in hindsight, ill-advised) language in the specification.  In view of this language, and the panel's understanding that "few pharmaceuticals are free of toxic effects in some circumstances and dosages," the Federal Circuit found no basis to import a limitation of non-toxicity into the claim.  The opinion also credits the Board's understanding that extrinsic evidence supports the Board's construction.  Similarly, the panel affirmed the Board's construction not to be limited to administration to humans, in the face of a rather creative argument by Mayne Pharma that "in vivo" applies to plants as well as animals, and the pharmacokinetic properties recited in the claims are "irrelevant" to plants.  The Board's construction was consistent with the broadest reasonable interpretation of these claims, according to the opinion, based again on the express language in the specification.  The correctness of the Board's claim construction being the only bases for error asserted by Mayne Pharma, the Federal Circuit affirmed the Board's invalidation of the claims of the '745 patent.

Mayne Pharma Int'l v. Merck Sharp & Dohme Corp. (Fed. Cir. 2019)
Panel: Circuit Judges Lourie, Dyk, and O'Malley
Opinion by Circuit Judge Lourie