Federal Circuit Summary

Before Wallach, O’Malley, and Schall. Appeal from the Patent Trial and Appeal Board.

Summary: PGR petitioner has standing to appeal PTAB decision, where petitioner intended to file an ANDA for the patented product as soon as possible.

Altaire and Paragon entered an agreement whereby Paragon would pursue FDA approval for a drug developed and manufactured by Altaire. Without approval or participation from Altaire, Paragon filed a drug patent application that eventually issued as the ’623 patent. Altaire sued Paragon for breach of contract and Paragon counterclaimed for, among other things, a declaratory judgment giving Paragon the right to terminate the contract early. Altaire petitioned the PTAB for post-grant review, arguing that the claims were obvious over certain drug lots that Altaire manufactured before the patent’s priority date. The PTAB instituted PGR but determined that Altaire failed to prove obviousness. In reaching this conclusion, the PTAB determined that Altaire failed to timely qualify its declarant as an expert, and the PTAB did not consider the declarations or Altaire’s test data submitted therewith.

On appeal, the Federal Circuit first addressed Altaire’s standing to appeal the PTAB’s decision. Under the parties’ agreement, Altaire cannot manufacture a competing (infringing) product until the agreement is terminated. The Federal Circuit found that because Altaire intends to file an ANDA for the product once the parties’ agreement terminates, and because Paragon is actively seeking a declaratory judgment that it can terminate the agreement early, injury to Altaire is inevitable. Altaire’s injury was compounded by the likelihood that it would be estopped from arguing that the patent was obvious on the same grounds it had argued in the PGR proceeding. The Federal Circuit held that Altaire had Article III standing to appeal the PTAB’s decision. The Federal Circuit then found that the PTAB abused its discretion by failing to consider the declarations and test data submitted by Altaire. Critically, the regulation governing submission of technical test data (37 C.F.R. § 42.65(b)) does not require submission by an expert.

Judge Schall dissented on the standing issue. He stated that standing requires that the appellant allege an injury that is actual and imminent, not conjectural and hypothetical. Because Altaire cannot infringe the patent until the agreement is terminated, the case lacked the requisite immediacy for standing. Judge Schall also stated that estoppel “does not constitute an injury in fact when the appellant is not engaged in any activity that would give rise to a possible infringement suit.”

This case is: ALTAIRE PHARMACEUTICALS, INC. v. PARAGON BIOTECK, INC.