By Tom Engellenner
The 2011 America Invents Act (AIA) provided a variety of new ways to administratively challenge patents, including the now widely used inter partes review (“IPR”) procedure. In two recent appeals of IPR decisions, Genentech has challenged the constitutionality of IPR proceedings when applied to patents that were already issued as of the date that the AIA was enacted.
Genentech has filed two appeals to the Court of Appeals for the Federal Circuit (“Federal Circuit”) involving decisions by the U. S. Patent Office’s Patent Trial and Appeal Board (“PTAB”) invalidating certain patent rights issued to Genentech on immunotherapy biologics. (Federal Circuit Docket Nos. 18-1933 and 18-1959.) These patents have been asserted against a number of competitors seeking to market biosimilar products to Genentech’s Avastin® and Herceptin® antibody therapeutics.
The appeals stem from two IPR Petitions filed by Hospira, IPR2016-01771 and IPR2016-01837, that challenged claims of U.S. Patent Nos. 7,622,115 and 7,807,799, respectively. The ’115 Patent issued in November 2009 and the ’799 Patent issued in October, 2010 – both issuance dates being well before the 2011 enactment of the AIA. The PTAB initiated trials on both patents and ultimately found all of the challenged claims to be invalid over the prior art presented by Hospira.
Genentech’s briefs assert “the retroactive application of inter partes review to a patent issued before that procedure existed is unconstitutional, a taking without just compensation and a denial of due process,” in violation of the Constitution’s Fifth Amendment.
The Federal Circuit has now certified Genentech’s constitutional challenges to the U.S. Attorney General, who has been directed to inform the Court whether the United States intends to intervene in the appeals within 30 days.
Genentech’s position may seem like a “Hail Mary pass” effort to save its patents, especially in light of the U.S. Supreme Court’s decision earlier this year in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, 138 S. Ct. 1365 (2018) (“Oil States”), where the Court rejected the patent owner’s argument that revoking patent claims as a result of an IPR proceeding is unconstitutional under Article III and the Seventh Amendment.
In the Oil States case, the Court held that the decision to grant a patent is a matter involving public rights and, hence, a challenge to a patent’s validity need not be heard exclusively in an Article III federal court and does not require a jury trial. (For our detailed analysis of the Oil States decision, click here.)
However, Genentech’s arguments are based on the Fifth Amendment’s prohibition on taking private property for public use without just compensation by a process that did not exist when the property rights were granted. The author of the Oil States decision, Justice Clarence Thomas, emphasized the narrowness of the holding in the Oil States case and made it clear that the case addresses “only the precise constitutional challenges . . . raised here.” Oil States at 1369.
In his Oil States opinion, Justice Thomas expressly reserved the question that Genentech now raises, i.e., “challeng[ing] the retroactive application of inter partes review” to patents that issued prior to the AIA’s enactment:
Oil States does not challenge the retroactive application of inter partes review, even though that procedure was not in place when its patent issued. Nor has Oil States raised a due process challenge. Finally, our decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.
Whether the U.S. Attorney General’s Office will weigh in on this issue remains to be seen. The Federal Circuit’s orders require responses by next week (September 24 and 27, 2018) on whether the U.S. government will intervene in the Genentech appeals.