In a recent appeal from a PTAB final written decision, the Federal Circuit determined that a patentee was not denied notice or an opportunity to respond to references cited in the final written decision as representing the state of the art, but that were not the basis for a grounds for institution. (Genzyme Therapeutic Prods. Ltd. v BioMarin Pharm. Inc., Appeal Nos. 2015-1720, -1721 (Fed. Circ., June 14, 2016)). The court concluded that there is no requirement, either in the PTAB’s regulations, in the Administrative Procedure Act (APA), or as a matter of due process, for the institution decision to anticipate and set forth every legal or factual issue that might arise during the trial, and that the PTAB acted properly in citing the additional references.

Genzyme owns U.S. Patents 7,351,410 and 7,655,226, which are directed to the use of recombinant acid alpha glucosidase (GAA) to treat Pompe’s disease. BioMarin filed IPR petitions asserting the patent claims are invalid as obvious in view of several prior art publications. The PTAB instituted the IPRs on two grounds of obviousness over alternative combinations of three or four publications.

The PTAB based its final written decision on the same publications cited in its Institution Decisions, as well as referencing other publications (available before the priority date) that explain the state of the art. On appeal, Genzyme argued that the PTAB violated the APA because the PTAB did not provide Genzyme with notice that it may rely on these publications as representing the state of the art, nor did the PTAB offer Genzyme an opportunity to respond to the PTAB’s reliance on these publications.

The Federal Circuit rejected Genzyme’s arguments . The court explained that the “notice and opportunity to be heard provisions of the APA” exist to prevent an agency from “chang[ing] theories midstream without giving respondents reasonable notice of the change and the opportunity to present argument under the new theory.” Bellden v. Berk-Tek LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015) (citations and internal quotes omitted). The court determined that the PTAB’s final written decision was based on the same publications that were identified in the grounds of institution and, therefore, the PTAB did not change course midstream.

The court explained that the introduction of new evidence during trial is perfectly permissible, and further explained the role of the PTAB’s institution decision in the context of the trial:

“[T]he introduction of new evidence in the course of the trial is to be expected in inter partes review trial proceedings and, as long as the opposing party is given notice of the evidence and an opportunity to respond to it, the introduction of such evidence is perfectly permissible under the APA.

“[T]he introduction of new evidence in the course of the trial is to be expected in inter partes review trial proceedings and, as long as the opposing party is given notice of the evidence and an opportunity to respond to it, the introduction of such evidence is perfectly permissible under the APA.

Genzyme’s argument that the institution decision must refer to every bit of evidence that is relied on by the Board in its final written decision reflects a misunderstanding of the role of the institution decision in inter partes review proceedings before the Board. There is no requirement, either in the Board’s regulations, in the APA, or as a matter of due process, for the institution decision to anticipate and set forth every legal or factual issue that might arise in the course of the trial. Because the institution decision comes at the outset of the proceedings and the patentee is not obligated to respond before the Board makes its institution decision, it is hardly surprising that the Board cannot predict all the legal or factual questions that the parties may raise during the litigation.

The development of evidence in the course of the trial is in keeping with the oppositional nature of an inter partes review proceeding. ‘The parties present their evidence up front, the patent owner offers any amendments, and the PTO simply decides whether the challenger has met his burden of proving invalidity.’ The purpose of the trial in an inter partes review proceeding is to give the parties an opportunity to build a record by introducing evidence—not simply to weigh evidence of which the Board is already aware.”

Slip Op. at 9–10 (citations omitted).

Following that explanation, the court concluded that Genzyme had adequate notice of the publications and the potential that the PTAB would rely on them in issuing its final written decision. During the IPR and the trial, Genzyme argued the publications were insufficient to prove obviousness because they were only directed to in vitro uses. In rebuttal, the Petitioner then discussed several publications that described in vivo use of the GAA enzyme prior to the patents’ priority date, attempting to establish what was then-known in the art. Genzyme argued in its patent owner response to the PTAB’s institution decision and during oral proceedings that the PTAB should not rely on these in vivo state-of-the-art publications because the publications were not used in the grounds for institution. Genzyme further argued that these publications in particular could not be applied, but that the prior art as a whole could be used to figure out what is common knowledge in the field.

The court concluded that the IPR trial record makes clear the Genzyme had actual notice of the publications and took the opportunity to comment on the publications during the course of the IPR. The court also noted that Genzyme made no effort or motion to exclude the publications nor file leave to provide further comment on the publications, thereby not taking advantage of its procedural options to exclude the evidence from consideration.

“The court has made clear that the Board may consider a prior art reference to show the state of the art at the time of the invention regardless of whether that reference was cited in the Board’s institution decision” (citing to Ariosa v Verinata Health, 805 F3d 1359, Fed. Circ., 2015). This decision provides further support to the PTAB’s use of publications to establish the state of the art, and that such publications need not be cited in the PTAB’s institution decision.