PTAB Reverses Course Mid-Torrent: Use of “Inapplicable” Prior Art During IPR

By: Rusty Rogers


This is a cautionary tale about the ability of the U.S. Patent Trial and Appeals Board’s (PTAB) to rely on additional prior art references in a decision on inter partes review (IPR) – even prior art initially deemed “inapplicable.”  In its recent decision in Novartis AG v. Torrent Pharmaceuticals (April 12, 2017), the Court of Appeals of The Federal Circuit (CAFC) approved the PTAB’s use of prior art cited in an initial petition, but originally dismissed as inapplicable for obviousness purposes.

With the introduction of the America Invents Act, IPRs have become a popular avenue for third parties to challenge granted patents as an alternative to filing suit in federal courts. IPRs are conducted before the PTAB to review the patentability of one or more claims in a patent only on grounds that could be raised under 35 U.S.C. §§ 102 or 103, and only on the basis of prior art consisting of patents or printed publications.  Beginning with a petition by a third party, an IPR may commence upon a showing that there is a reasonable likelihood that the petitioner would prevail with respect to at least one claim challenged.

Patent claims may be invalidated by showing that each element of the claim is anticipated by a single piece of prior art in contravention of § 102.  Even where a patent claim is not anticipated, § 103 also requires that patents only be granted for inventions determined to be “nonobvious” or more than just predictable use of aggregated prior art elements according to their established functions as set forth in the landmark decision KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). Establishing a prima facie case of obviousness requires establishing that each claim limitation is present in the prior art and presenting “articulated reasoning” to support the legal conclusion that the person skilled in the art could modify one or more prior art references to reach the claims at issue, and would also “see the benefits of doing so.”   Once a prima facie case of obviousness has been established, the burden then shifts to the patent owner to rebut the underlying factual findings or provide secondary considerations that are sufficient to overcome any showing of obviousness.  Secondary considerations are discussed in Graham v. John Deere Co., 383 U.S. 1 (1966), and may include evidence of unexpectedly good results, exceptional market performance of the invention, industry praise relating to claimed features, etc.

The Novartis case stems from an IPR petition filed by Torrent against Novartis’ U.S. Patent 8,324,283 (“the ‘283 Patent”).  The technology at issue in the ‘283 Patent relates to a solid pharmaceutical composition, comprising a sphingosine-1 phosphate (S1P) receptor agonist and a sugar alcohol, which the patent explains is useful for the treatment of autoimmune diseases such as multiple sclerosis.  Much of the decision rests on the narrower composition of claim 19, which is directed to a combination of fingolimod and sugar alcohol mannitol. While the patent specification indicated that solid formulation was more difficult, it also taught that solid formulations were advantageous over liquid formulations, and that sugar alcohols such as mannitol were useful as excipients (filler materials) in solid formulations.

Torrent’s IPR petition initially suggested three grounds for invalidity: (1) obviousness in view of U.S. Patent No. 6,004,565 (Chiba) and Pharmaceutics: The Science of Dosage Form Design (Aulton); (2) anticipation by U.S. Patent No. 6,277,888 (Sakai); and (3) obviousness in view of Chiba and Sakai.  The PTAB granted the petition in part for the first ground, and dismissed grounds two and three, finding that the Sakai reference was not anticipatory because it failed to disclose a solid formulation as claimed, and was insufficient for obviousness purposes because the reference “did not identify mannitol as a ‘conventional excipient’ in solid pharmaceutical compositions” and the reasons for using mannitol “were inapplicable to its potential use in connection with solid pharmaceutical compositions.”

At the conclusion of the IPR proceeding, the PTAB found all claims of the ‘283 Patent to be invalid as obvious over the prior art. In formulating the obviousness rejection, the PTAB found that Chiba disclosed the use of immunosuppressive compounds such as fingolimod; while Aulton taught the use of solid formulations to administer drugs orally, and taught excipient mannitol was “expensive” albeit commonly used.  However, lacking a reference that explicitly suggested the combination of fingolimod and mannitol, the PTAB relied on the Sakai reference that was originally deemed inapplicable.  The PTAB reintroduced Sakai as a “background reference” that showed “additional evidence of a reason to combine” fingolimod and mannitol and was relevant to establish the level of skill in the art when selecting excipients.

Novartis challenged the use of the Sakai reference on appeal as failing to comply with notice requirements under the Administrative Procedure Act. Novartis asserted that the PTAB had changed the underlying theory of obviousness midstream, which did not provide Novartis with time to respond accordingly.  The PTAB justified its position on the basis that Novartis had knowledge of the publication and had discussed it at length during the initial petition stages.  Further, Novartis expert Stephen Byrn, who testified as to the content of the prior art references, had also authored a publication that noted liquid formulations could provide information relevant to the performance of solid formulations.  Thus, despite being “inapplicable” as directed to liquid formulations, the Sakai reference later became relevant again with the disclosure of the Byrn publication.  While seemingly dubious maneuvering on behalf of the PTAB, the CAFC found no reversible error and contended that Novartis had ample notice and had a chance to weigh in on the reference, despite the initially negative characterization of the reference by the PTAB upon grant of the IPR petition.  The CAFC also affirmed the PTAB’s dismissal of Novartis’ argument that Aulton “taught away” from using mannitol as an excipient because of its expense in manufacturing and formulation, noting that nonetheless the reference taught that the use of mannitol was commonplace.

Turning to the secondary considerations proffered by Novartis, the CAFC again affirmed the PTAB’s findings that the evidence was insufficient to show nonobviousness of the claims at issue.  Novartis had attempted to provide secondary considerations in the form of (1) unexpected results of fingolimod at low dosages, (2) long-felt, but unsolved needs; (3) industry praise; and (4) commercial success.  With regard to unexpected results, the CAFC agreed with the PTAB’s findings that, even if the even if the stability of the mannitol/fingolimod combination at low doses was unexpected, it was insufficient to support a legally significant finding of unexpected results because the claims were not limited to any particular dose range.  With regard to the remaining considerations, the PTAB held that the commercially relevant evidence was only owed to the fact that the claimed compositions were solid formulations used to treat multiple sclerosis, which was already well known in the prior art.

From a practitioner perspective, the main takeaway from Novartis appears to be expect the unexpected; if a piece of prior art is in the record, it may appear again later even if not explicitly cited as a basis for grant of the IPR petition.  Novartis also illustrates the frequently-encountered difficulty of tying secondary consideration arguments sufficiently to the claim language.