PTAB Can Rely Upon Prior Art Not Cited in an IPR Institution Decision to Establish the State of Art

By Frank Liu
The Federal Circuit affirmed the PTAB’s final determination in Genzyme Therapeutic Products Limited Partnership v. Biomarin Pharmaceutical Inc., Nos. 2015-1720, 2015-1721 (Fed. Cir. June 14, 2016), holding that the PTAB did not violate the Administrative Procedure Act (APA) by relying upon prior art references not identified in the grounds on which the PTAB instituted review.  In particular, the Federal Circuit held that the PTAB properly relied upon those references to establish the state of the art at the time of invention of the claimed invention.

The patents at issue are Genzyme’s U.S. Patent Nos. 7,351,410 (“the ’410 patent”) and 7,655,226 (“the ’226 patent”), which are directed towards the treatment of Pompe disease. Pompe disease is a genetic condition that results in a deficiency or absence of a certain enzyme, acid alpha glucosidase (“GAA”), that is used to break down glycogen.  The inability to break down glycogen in the body causes the glycogen to accumulate in a patient’s heart and skeletal muscles, causing progressive deterioration and ultimate failure of those muscles.  Pompe’s disease can be treated by injecting GAA with mannose-6-phosphate (“M-6-P”) into patients, causing GAA to be taken up in heart and skeletal muscles with M-6-P receptors.

Biomarin filed two IPR petitions challenging the validity of Genzyme’s ’410 and ’226 patents. The PTAB instituted review of the ’410 and ’226 patents on grounds that the claims were invalid as obvious in view of the prior art. In its patent owner responses, Genzyme argued that the claims of the ’410 and ’226 patents were not obvious because each of the prior art references were directed towards in vitro experiments, and that there was no evidence that a person of ordinary skill would have a reasonable expectation of success applying those experiments in a human.  In its reply, Biomarin challenged Genzyme’s non-obviousness argument and identified two references in response – van der Ploeg ’91 and Kikuchi – showing successful in vivo tests administering GAA.  The van der Ploeg ’91 and Kikuchi references were not identified in the instituted grounds for review.

The PTAB found the challenged claims of the ’410 and ’226 invalid as obvious. In particular, the PTAB found that a person of ordinary skill could have arrived at the claimed inventions through “routine optimization” of the prior art.  In reaching this conclusion, the PTAB relied upon the Kikuchi and van der Ploeg ’91 references to establish the state of the art regarding in vivo studies.

Genzyme challenged the PTAB’s final determination, inter alia, on the grounds that the PTAB “relied on ‘facts and legal arguments’ that were not set forth in the institution decisions.” Id. (slip op., at 7).  In particular, Genzyme took issue with the fact that the PTAB’s final determination relied on the Kikuchi and van der Ploeg ’91 references to establish obviousness without providing notice of those specific references in its institution decision.  In Genzyme’s view, the PTAB improperly “change[d] theories in midstream,” thereby depriving Genzyme of notice and an opportunity to be heard as required by the APA. Id. (slip op., at 7-8).

On appeal, the Federal Circuit rejected Genzyme’s argument, holding that Genzyme had actual notice of the Kikuchi and van der Ploeg ’91 references and had an opportunity to be heard with regards to those references. Continue reading “PTAB Can Rely Upon Prior Art Not Cited in an IPR Institution Decision to Establish the State of Art”

Federal Circuit Erases a Rare Patent Owner Victory and Tells PTAB: No Changing Horses (Claim Constructions) Midstream

By Tom Engellenner
In a recent decision on an inter partes review (IPR) appeal, the Federal Circuit erased a rare victory for a patent owner and remanded the case back to the Patent Trial and Appeal Board (PTAB) for rehearing on the sole claim that survived the initial trial.  In SAS Institute, Inc. v. ComplementSoft, LLC, Nos. 2015-1346 & 2015-1347 (Fed. Cir. June 10, 2016), SAS Institute, as petitioner, had challenged claims 1-16 of Patent 7,110,936 owned by ComplementSoft.  The ’936 patent discloses “a language independent software development tool having a graphical user interface.”  The PTAB instituted an IPR trial on claims 1 and 3-10 of the patent and ultimately found all of the instituted claims, except for claim 4, invalid in light of the prior art.  (IPR2013-00226).

At issue in the appeal was whether claim 4 was properly found not invalid. Claim 4 was an independent claim and included (among other things) an element, “graphic representations of data flows,” that the PTAB had construed in its initial determination to be “a diagram that depicts a map of the progression (or path) through the source code.”

However, in its final written decision, the PTAB chose a new definition for this term, namely “a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code.” Based on this new construction, the PTAB concluded that this feature was not taught or suggested by the cited art.

On appeal, the Federal Circuit panel of Judges Newman, Chen and Stoll found error in the PTAB’s adoption of a new construction for a term it had construed differently in its institution decision. The Federal Circuit panel (citing Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015)) held that the Administrative Procedure Act (APA) prevents federal agencies, including the PTAB, from “chang[ing] theories in midstream without giving the respondent reasonable notice of the change and the opportunity to present argument under the new theory.”

Writing for the Fed. Circuit panel, Judge Stoll wrote, “[i]t is difficult to imagine either party anticipating that already-interpreted terms were actually moving targets, and it is thus unreasonable to expect that they would have briefed or argued, in the alternative, hypothetical constructions not asserted by their opponent.”

The decision may be a pyrrhic victory for SAS Institute since Judge Stoll’s opinion also noted: “[W]e we agree with the Board’s ultimate construction of the “graphical representations of data flows” claim term. The Board’s procedure for arriving at this construction, however, gives us pause.”

Interestingly, the Federal Circuit panel had no problem with PTAB construing claim language on the fly – so long as the Board had not previously construed the claim element differently in its initial determination. “What concerns us is not that the Board adopted a construction in its final written decision, as the Board is free to do, but that the Board ‘change[d] theories in midstream,’” cited the Belden case again.