Addressing issues of procedural due process and obviousness, the US Court of Appeals for the Federal Circuit affirmed a Patent Trial and Appeal Board (PTAB) decision to invalidate a patent in an inter partes review (IPR), despite the PTAB’s reliance on a reference that was not part of the institution decision. Novartis AG v. Torrent Pharm. Ltd., Case No. 16-1352 (Fed. Cir., Apr. 12, 2017) (Chen, J).

Novartis owns a patent related to a solid oral pharmaceutical composition comprising fingolimod and mannitol. Torrent filed an IPR challenging the claims in Novartis’ patent as obvious or anticipated. In its institution decision, the PTAB granted Torrent’s petition in part, instituting the IPR on obviousness grounds over the combination of prior art by Chiba and Aulton, and declining to institute on the proposed ground of anticipation by other prior art, Sakai, or obviousness over the combination of Chiba and Sakai. 

In its final written decision (FWD) finding the patent invalid, the PTAB concluded that Chiba and Aulton disclose a solid oral form of fingolimod and mannitol as an excipient, respectively. The PTAB bolstered its findings with additional references, and relied on the Sakai reference as teaching a reason to combine fingolimod and mannitol. Novartis appealed. 

Novartis argued that the FWD violated its due process by relying on Sakai. Citing Medichem, S.A. v. Rolabo (IP Update, Vol. 9, No. 2), Novartis also argued that the PTAB’s analysis of the motivation to combine was legally flawed because it did not expressly discuss mannitol’s disadvantages as a solid composition excipient. 

The Federal Circuit dismissed Novartis’ due process argument. As the Court explained, the PTAB’s discussion of Sakai in the FWD was not inconsistent with its review of Sakai in the institution phase. Specifically, the PTAB declined to read Sakai as an anticipatory reference or as a main obviousness reference, because Sakai teaches a liquid formulation comprising fingolimod and mannitol, teachings not applicable to solid formulations. In the FWD, the PTAB merely used Sakai to support its conclusion that a skilled artisan would have expected mannitol to be compatible with fingolimod. Moreover, as the Court pointed out, the parties discussed the teachings of Sakai throughout the IPR proceedings, and in the same context as the PTAB in the FWD. Finally, the Court found that Novartis’ characterization of Sakai as the “missing link” in the PTAB obviousness findings was unjustified because other prior art of record also provides reinforcing reasons to combine Chiba and Aulton.

Additionally, the Federal Circuit found no error in the PTAB’s analysis of the motivation to combine. First, the Court noted that the record indicated that the PTAB did in fact consider mannitol’s negative properties, including discussing mannitol’s disadvantages and citing the relevant portions when rejecting Novartis’ teaching-away arguments. In addition, the Court noted that the PTAB’s treatment of mannitol’s negative properties was at least commensurate with Novartis’ perfunctory presentation of the issues to the PTAB. In addition, the Court clarified that Medichem does not require the PTAB to expressly discuss every negative and positive piece of evidence to evaluate a cursory argument, and that failure to explicitly discuss every piece of evidence does not by itself establish that the PTAB did not consider it.