In Novartis AG v. Noven Pharmaceuticals Inc., Nos. 16-1678, -1679 (Fed. Cir. Apr. 4, 2017), the Federal Circuit affirmed the PTAB’s decisions finding obvious certain patents that were previously found nonobvious in district court.
Noven filed IPR petitions relating to patents directed to a pharmaceutical composition for the treatment of Alzheimer’s disease. Although prior district court decisions found certain claims of those patents nonobvious, the PTAB held that those claims would have been obvious. Novartis appealed, alleging that the PTAB improperly reached a different conclusion than the district court and Federal Circuit in prior litigations.
On appeal, the Federal Circuit noted that the record before the PTAB in this matter differed from that in the prior litigations, explaining that “[t]t is unsurprising that different records may lead to different findings and conclusions.” The Court further explained that the different burdens of proof—“preponderance of the evidence” at the PTAB and “clear and convincing” at the district court—allowed in this case for different conclusions by the PTAB and district court. Although the Federal Circuit stated in a prior decision that the USPTO “ideally should not arrive at a different conclusion” if it faces the same evidence and argument as a district court, the Court explained in this case that this is an aspiration—not a mandate—as Congress authorized a separate review mechanism before the USPTO with its own standard. Accordingly, the Court affirmed the PTAB’s findings of obviousness.
Finally, the Court upheld the district court’s assessment of prejudgment interest based on the entire royalty award predicated on a hypothetical negotiation in 2006. While only one patent had issued by 2006, both parties’ experts agreed that any damages should be a lump sum royalty running from the earliest hypothetical negotiation and would have included the issuance of any later patent, effectively treating the three patents as a “unitary licensing property.”