Novartis AG v. Noven Pharm. Inc.

• Citation: 853 F.3d 1289
• Decision Date: 04 April 2017
• Docket Number: 2016-1679,2016-1678
• Parties: NOVARTIS AG, LTS Lohmann Therapie-Systeme AG, Appellants v. NOVEN PHARMACEUTICALS INC., Appellee
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

853 F.3d 1289

NOVARTIS AG, LTS Lohmann Therapie-Systeme AG, Appellants

v.NOVEN PHARMACEUTICALS INC., Appellee

2016-1678

2016-1679

United States Court of Appeals, Federal Circuit.

Decided: April 4, 2017

Charlotte Jacobsen , Fitzpatrick, Cella, Harper & Scinto, New York, NY, argued for appellants. Also represented by Nicholas N. Kallas , Christopher Earl Loh , Jared Levi Stringham .

Steven J. Lee , Andrews Kurth Kenyon LLP, New York, NY, for appellee. Also represented by Christopher Justin Coulson , Kulsoom Zehra Hasan , Michael K. Levy .

Frances Lynch , Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Michelle K. Lee. Also represented by Nathan K. Kelley , Kakoli Caprihan , Scott Weidenfeller .

Before Prost, Chief Judge, Wallach and Stoll, Circuit Judges.

Wallach, Circuit Judge.

The instant appeals concern inter partes reviews of U.S. Patent Nos. 6,316,023 ("the '023 patent") and 6,335,031 ("the '031 patent") (together, "the Patents-in-Suit"). In two separate final written decisions, the U.S. Patent and Trademark Office's ("USPTO") Patent Trial and Appeal Board ("PTAB") found that various claims of the Patents-in-Suit ("the Asserted Claims")¹ would have been obvious over the prior art. See Noven Pharm., Inc. v. Novartis AG (Noven I ), No. IPR2014-00549, 2015 WL 5782080, at *23 (P.T.A.B. Sept. 28, 2015) (finding the disputed claims of the '023 patent unpatentable as obvious); Noven Pharm., Inc. v. Novartis AG (Noven II ), No. IPR2014-00550, 2015 WL 5782081, at *23 (P.T.A.B. Sept. 28, 2015) (finding the disputed claims of the '031 patent unpatentable as obvious). The PTAB maintained its findings when asked to reconsider them. See Noven Pharm., Inc. v. Novartis AG (Noven III ), No. IPR2014-00549, 2015 WL 9599194, at *8 (P.T.A.B. Nov. 30, 2015) (denying request to reconsider Noven I ); Noven Pharm., Inc. v. Novartis AG (Noven IV ), No. IPR2014-00550, 2015 WL 9599195, at *8 (P.T.A.B. Nov. 30, 2015) (denying request to reconsider Noven II ). Appellants Novartis AG and LTS Lohmann Therapie-Systeme AG (together, "Novartis") contest numerous aspects of the Final Written Decisions, including the PTAB's conclusion that prior judicial opinions did not control its inquiry and the PTAB's factual findings in support of its obviousness conclusion. We affirm.

DISCUSSION

I. Subject Matter Jurisdiction and Standard of Review

We possess subject matter jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). "We review the PTAB's factual findings for substantial evidence and its legal conclusions de novo." Redline Detection, LLC v. Star Envirotech, Inc. , 811 F.3d 435, 449 (Fed. Cir. 2015) (citation omitted). "Substantial evidence is something less than the weight of the evidence but more than a mere scintilla of evidence," meaning that "[i]t is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." In re NuVasive, Inc. , 842 F.3d 1376, 1379–80 (Fed. Cir. 2016) (internal quotation marks and citations omitted).

II. The PTAB Properly Concluded that the Asserted Claims of the Patents-in-Suit Would Have Been Obvious

A patent claim is unpatentable when "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art [ (‘PHOSITA’) ] to which said subject matter pertains." 35 U.S.C. § 103(a) (2006).² Obviousness "is a question of law based on underlying findings of fact." In re Gartside , 203 F.3d 1305, 1316 (Fed. Cir. 2000) (citation omitted). The underlying factual findings include (1) "the scope and content of the prior art," (2) "differences between the prior art and the claims at issue," (3) "the level of ordinary skill in the pertinent art," and (4) the presence of secondary considerations of nonobviousness such "as commercial success, long felt but unsolved needs, failure of others," and unexpected results. Graham v. John Deere Co. of Kan. City , 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) ; see United States v. Adams , 383 U.S. 39, 50–52, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966).

The PTAB found that the Asserted Claims of the Patents-in-Suit would have been obvious over several different combinations of prior art references. See Noven I , 2015 WL 5782080, at *23 ; Noven II , 2015 WL 5782081, at *23. The PTAB found that claims 1–2, 4–5, and 7 of the '023 patent would have been obvious over a combination of two prior art references—United Kingdom Patent Application GB 2,203,040 ("Enz") (J.A. 588–610) and Japanese Patent Application 59-184121 ("Sasaki") (J.A. 634–37)—and that claim 8 would have been obvious over a combination of Enz, Sasaki, and two other references.³ See Noven I , 2015 WL 5782080, at *23. The PTAB also found that claims 1–3, 7, 15–16, and 18 of the '031 patent would have been obvious over Enz and Sasaki. See Noven II , 2015 WL 5782081, at *23.

Instead of raising arguments on the basis of a specific claim, patent, or Final Written Decision, Novartis raises broad legal and factual arguments with application to both of the Final Written Decisions. See Appellants' Br. 6 n.1 (stating that the appealed decisions "are substantively nearly the same" and that it will refer only to Noven II throughout its brief), 35–65 (presenting arguments); see also Appellee's Br. 1 n.1 (agreeing to follow Novartis's convention and cite only to Noven II ). After providing a brief description of the Patents-in-Suit, we address Novartis's arguments in turn.

A. The Patents-in-Suit

The Patents-in-Suit belong to the same patent family, with the '023 patent having issued from a continuation of the application that led to the '031 patent.⁴ Entitled "TTS Containing an Antioxidant," the Patents-in-Suit generally disclose a "[p]harmaceutical composition comprising" a compound commonly known as rivastigmine

"in free base or acid addition salt form and an antioxidant." '023 patent, Abstract; '031 patent, Abstract. The rivastigmine in the Patents-in-Suit "is useful ... for the treatment of Alzheimer's disease." '023 patent col. 1 ll. 15–17; '031 patent col. 1. ll. 14–16.

B. Prior Judicial Opinions Did Not Bind the PTAB

Novartis alleges that a fundamental legal error pervades the PTAB's Final Written Decisions: the PTAB unlawfully reached different conclusions than our court and the U.S. District Court for the District of Delaware ("Delaware District Court"), which addressed the "same" arguments and the "same" evidence and found the Asserted Claims nonobvious in two prior opinions. Appellants' Br. 29; see id. at 35–39, 46–47, 52–56, 60–62 (discussing Novartis Pharm. Corp. v. Watson Labs., Inc. , 611 Fed.Appx. 988 (Fed. Cir. 2015) and Novartis Pharm. Corp. v. Noven Pharm., Inc. (Noven D. Del. ), 125 F.Supp.3d 474 (D. Del. 2015) ). In support of that position, Novartis relies substantially on a single sentence from our decision in In re Baxter International, Inc. See, e.g., id. at 30 (discussing 678 F.3d 1357, 1365 (Fed. Cir. 2012) ).

Novartis's argument fails on factual and legal grounds. As an initial matter, the record here differed from that in the prior litigation, meaning that Novartis's argument rests on a faulty factual predicate. With respect to Watson , the PTAB found that it "does not control here because [Appellee] Noven [Pharmaceuticals Inc. (‘Noven’) ] has presented additional prior art" like Sasaki "and declaratory evidence that was not before the [c]ourt" in that case.⁵ Noven II , 2015 WL 5782081, at *2. Similarly, as to Noven D. Del. , the PTAB found that it did not control because the parties provided additional evidence that was not before the Delaware District Court.⁶ Id. ; see id. at *5 (identifying as new evidence two declarations of Dr. Agis Kydonieus, two declarations of Dr. Christian Schöneich, and one declaration of Dr. Alexander M. Klibanov). Novartis tacitly concedes that the record here is different. See Appellants' Reply 7 n.1 ("The USPTO and Noven argue that the parties submitted expert declarations and deposition testimony that was not before the Noven [D. Del. ] Court. But neither disputes that these materials are substantively the same as the experts' testimony before the Noven [D. Del. ] Court." (emphasis added) (citations omitted)), 11 ("The [PTAB] sought to explain its rejection of this [c]ourt's Watson decision on grounds that Noven presented art and evidence in the [inter partes review] that was not before the Watson [c]ourt[ ]. While differences in the record could justify a different outcome overall , under Baxter , they do not support the [PTAB]'s contrary conclusions on the specific rivastigmine art and arguments previously adjudicated in Watson ." (emphasis added) (citation omitted)). It is unsurprising that different records may lead to different findings and conclusions.

Nevertheless, even if the record were the same, Novartis's argument would fail as a matter of law. The PTAB determined that a "petitioner in an inter partes review proves unpatentability by a preponderance of the evidence (see 35 U.S.C. § 316(e) ) rather than by clear and convincing evidence[ ] as required in district court litigation," meaning that the PTAB properly may reach a different conclusion based on the same evidence. Noven II , 2015 WL 5782081, at *2 (italics omitted). That position comports with recent Supreme Court precedent, which held that

[a] district court may find a patent claim to be valid, and the [USPTO] may later cancel that claim in its own review.... This possibility, however, has long been present in our patent system, which provides different tracks—one in the [USPTO] and one in the courts—for the review and adjudication of patent claims. As we have explained ..., inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress'[s] regulatory

...