One of the many changes introduced into U.S. patent law by the Leahy-Smith America Invents Act were provisions for post-grant review (PGR) and inter partes review (IPR). There have been thousands of these proceedings instituted since their enactment into law, and the contours of how the Patent Trial and Appeal Board (PTAB) have executed these statutory provisions have been the subject of several Supreme Court decisions (see "Thryv, Inc. v. Click-to-Call Technologies, LP (2020)"; "Return Mail, Inc. v. United States Postal Service (2019)"; "Oil States Energy Services, LLC. v. Greene's Energy Group, LLC (2018)"; "SAS Institute Inc. v. Iancu (2018)"; "Cuozzo Speed Technologies LLC v. Lee (2016)"). Remarkably, however, there has never been a Federal Circuit decision addressing the status of either proceeding should the PTAB fail to satisfy the one-year limitation on the Board for issuing a Final Written Decision (FWD) (subject for good cause to a six-month extension), but that changed with the Court's decision in Purdue Pharma L.P. v. Collegium Pharmaceutical, Inc.
The case arose in a post-grant review proceeding over Purdue's U.S. Patent No. 9,693,961, which is directed to opioid formulations modified to "prevent or deter" abuse (a tactic pursued by Purdue in part to expiate any responsibility that could be attributed to the company for the escalating opioid addiction crisis over the past decade or so; see, e.g., Keefe, Empire of Pain: The Secret History of the Sackler Dynasty). The Patent Trial and Appeal Board in its Final Written Decision found all claims (1-17) invalid for lack of an adequate written description and anticipation. Claim 1 is representative:
A method of preparing an abuse deterrent controlled release dosage form comprising:
combining oxycodone or a pharmaceutically acceptable salt thereof as active agent, polyglycolyzed glycerides, a C12 to C40 fatty acid or a mixture thereof, carnauba wax and beeswax, to form a homogenous mixture, wherein the oxycodone or pharmaceutically acceptable salt thereof is the sole active agent in the dosage form;
preparing particles from the homogenous mixture; and containing the particles in a capsule;
the abuse deterrent dosage form providing a therapeutic effect for about 12 hours or longer when orally administered to a human patient, and
the abuse deterrent dosage form being abuse deterrent when subjected to tampering comprising heating at a temperature greater than about 45° C.
The PGR was filed after Purdue filed suit against Collegium in District Court for infringement.
Purdue argued before the PTAB that the '961 patent was not subject to PGR proceedings because it claimed priority to an earlier application having a filing date of August 6, 2001, but the Board rejected this challenge to its statutory authority when it held that the earlier-filed application did not support the priority claim for failure to satisfy the written description requirement of 35 U.S.C. § 112(a) and that the earliest effective filing date was after March 16, 2013 (making the patent subject to PGR scrutiny). Both the PGR and district court litigation were stayed when Purdue filed for bankruptcy on September 24, 2019. These stays were lifted by the bankruptcy court on September 1, 2020. Even though the Chief Patent Judge had found good cause to extend by six months the statutory one-year deadline for the Board to render a Final Written Decision (until April 4, 2020), the Board did not render its FWD until November 19, 2021.
Based on this timeline, Purdue moved the Board to terminate the PGR on the grounds that the Board's statutory authority had lapsed under 35 U.S.C. § 326(a)(11) and 37 C.F.R. § 42.200(c). The Board rejected this motion and issued the FWD, finding all '961 claims invalid. This appeal followed.
The Federal Circuit affirmed the Board's FWD, in an opinion by Judge Dyk joined by Judges Hughes and Stoll. The opinion notes that this is the first instance in which the Board has not issued a FWD by the statutory or extended deadlines, making this a case of first impression for the Court. The opinion cites voluminous Supreme Court opinions, including United States v. James Daniel Good Real Prop., 510 U.S. 43, 63 (1993); Nielsen v. Preap, 139 S. Ct. 954, 967 (2019); Dolan v. United States, 560 U.S. 605, 611 (2010); Barnhart v. Peabody Coal Co., 537 U.S. 149, 159 (2003); Regions Hosp. v. Shalala, 522 U.S. 448, 459 n.3 (1998); and United States v. Montalvo-Murillo, 495 U.S. 711, 717 (1990), for the principle that "if a statute does not specify a consequence for non-compliance with statutory timing provisions, the federal courts will not in the ordinary course impose their own coercive sanction." In particular, the Court cited the Federal Circuit's own precedent that "when a statute does not specify the consequences of non-compliance, courts should not assume that Congress intended that the agency lose its power to act," citing Hitachi Home Elecs. (Am.), Inc. v. United States, 661 F.3d 1343, 1347 (Fed. Cir. 2011) (quoting Liesegang v. Sec'y of Veterans Affs., 312 F.3d 1368, 1376– 77 (Fed. Cir. 2002)) and Transpacific Steel LLC v. United States, 4 F.4th 1306, 1320–21 (Fed. Cir. 2021). Here the Court used this precedent and the absence of statutory direction supporting Purdue to affirm the PTAB's decision that its lack of timeliness was not sufficient basis to remove its power to issue even a tardy FWD.
The opinion specifically addresses Purdue's arguments to the contrary, for example the express use of the term "shall" in the relevant timing statutes. This argument is contrary to the Supreme Court's decision in Brock v. Pierce Cnty., 476 U.S. 253, 266 (1986), however which was sufficient to uphold the Board's invalidity arguments. Similarly, the panel rejected Purdue's reliance on the use of "negative words" such as "not later than" and "by not more than" under other Supreme Court precedent (specifically, French v. Edwards, 80 U.S. 506 (1871)) because that case did not involve a statutory deadline and later Supreme Court cases did not support the principle. Another unsuccessful argument advanced by Purdue was based on the purported express tying of the statutory time limitation with the Board's statutory authority under Section 6, the interpretation of which the Federal Circuit held could be upheld under Supreme Court precedent only when Congress had clearly stated that "procedural rules, including time bars, cabin a court's power," citing United States v. Wong, 575 U.S. 402, 409 (2015) (quoting Sebelius v. Auburn Reg'l Med. Ctr., 568 U.S. 145, 153 (2013)). The panel also rejected Purdue's argument that limitations in the statute relating to "good cause" and "joinder" circumstances evinced the required Congressional intent, particularly in view of the Court's Barnhart decision, wherein "enunciation of two exceptions does not imply an exclusion of a third." Finally, portions of the Leahy-Smith America Invents Act which do bar the Office from acting after a time period expires use "quite different language" including Section 315(b) (that an IPR "may not be instituted" after the 1-year time bar); and Section 321(c) (wherein a PGR petition "may only be filed" not later than 9 months after patent grant). According to the panel, these instances established that "[h]ad Congress meant to deprive the agency of power in section 326(a)(11), it knew how to do it" and had not.
Likewise the Federal Circuit did not find any support in the legislative history of the AIA to support Purdue's assertion that the Board lost its authority to issue a FWD after the statutory time period had expired. The panel understood the purposes for the amendments to the statute to substitute PGRs and IPRs for inter partes reexamination was to make the post-grant review process more efficient, and stripping the PTAB of the capacity to render a FWD after undertaking the proceedings merely due to missing the statutory time proscriptions was not consistent with increasing efficiency of post-grant reviews. And the Court further rejected Purdue's arguments that its decision would leave post-grant review proceedings just as open-ended as the inter partes reexaminations Congress intended that they replace; this is inaccurate according to the opinion because the Board "cannot ignore statutory deadlines," and the proper remedy under the circumstances faced by Purdue was mandamus, citing Norton v. Southern Utah Wilderness All., 542 U.S. 55, 65 (2004); Telecommunications Rsch. & Action Ctr. v. F.C.C., 750 F.2d 70, 76 (D.C. Cir. 1984); and Mylan Lab'ys Ltd. v. Janssen Pharmaceutica, N.V., 989 F.3d 1375, 1380–81 (Fed. Cir. 2021) (quoting Int'l Union, United Mine Workers of Am. v. U.S. Dep’t of Lab., 358 F.3d 40, 43 (D.C. Cir. 2004)). Accordingly, the Court asserted that:
Here, Purdue had an available mandamus remedy and simply chose not to seek to compel an earlier decision from the Board. Failure to seek relief by mandamus does not, however, mean a loss of the Board's authority to act.
(Albeit merely in a footnote, the opinion asserts that the panel did not "reach the question of whether the bankruptcy automatic stay applies to PGRs" because "[t]his would require interpretation of the Bankruptcy Code" and the relevant provisions thereof seem not applicable to IPR or PGR proceedings.)
Turning to the merits of the PTAB's FWD, the court upheld the Board's determination that the claims lacked adequate written description support. Specifically the panel held that "the specification makes clear that the claims require 'inclusion of at least one aversive agent' and the parties agree that the claims require the use of an aversive agent," and provides "long lists" of such agents ("a bittering agent, an irritant, a gelling agent, or combinations thereof"). Applying the syllogism that "some surfactants can be gelling agents and that gelling agents can satisfy the aversive agent requirement, [but that] not all surfactants [such as the claimed polyglycolyzed glycerides] are gelling agents," the specification's written description failure was that it did not disclose which of the claimed polyglycolyzed glycerides are gelling agents. Indeed, the opinion states that polyglycolyzed glycerides are described in the specification as surfactants, not gelling agents and that "surfactants can be used completely separate from and in addition to the gelling agent." Thus, according to the opinion "[t]he disclosure of the application [both the '961 patent and the earlier-filed provisional application] does not reasonably convey to those skilled in the art that the inventor had possession of the claimed drug formula containing PGGs as a gelling agent (aversive agent)" as properly determined by the PTAB in invalidating all claims of the '961 patent.
Purdue Pharma L.P. v. Collegium Pharmaceutical, Inc. (Fed. Cir. 2023)
Panel: Circuit Judges Dyk, Hughes, and Stoll
Opinion by Circuit Judge Dyk
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