IP News

Advanced RCC is a cancer of the kidneys that, as of Feb. 19, 2001 — the priority date of the '131 patent — carried a poor prognosis and was known to be unpredictable and difficult to treat. Id. at 3. Various chemotherapies, hormonal therapies, and immunotherapies, and clinical trials investigating a wide range of treatment strategies for advanced RCC had failed. Id. By February 2001, the prior art disclosed that: 1) mTOR inhibitors produced effects, such as inhibition of hypoxia-inducible factor 1 (HIF-1), that were hypothesized to inhibit tumor growth; 2) everolimus was an mTOR inhibitor; and 3) temsirolimus, another mTOR inhibitor, had shown responses in RCC patients in phase I clinical trials. Id. at 5. However, there was no data on the efficacy of everolimus to treat any type of cancer, let alone to treat advanced RCC. Id.

West-Ward argued that the '131 patent's claims 1-3 would have been obvious over a temsirolimus publication (either Hidalgo 2000 or Hutchinson) and an everolimus patent (either U.S. Patent No. 5,665,772 or U.S. Patent No. 6,004,973), in view of the general knowledge in the art. Id. at 7. The district court rejected West-Ward's arguments. Id. at 10. It concluded that a person of ordinary skill in the art would have been motivated to pursue everolimus as one of several potential options for treating advanced RCC. Id. Yet, it further concluded that West-Ward failed to prove that a person of ordinary skill in the art would have been motivated to select everolimus among those options and would have reasonably expected everolimus to effectively treat advanced RCC. Id. at 10-11.

On appeal, the Federal Circuit panel held that the district court erred in its analysis of whether there was a motivation to combine. Id. at 13. However, the panel agreed with the district court's ultimate determination that the challenged claims would not have been obvious because a person of ordinary skill in the art would not have reasonably expected success in using everolimus to treat advanced RCC as of February 2001. Id. Regarding motivation to combine, the panel explained that the district court's finding that a person of ordinary skill in the art would have been motivated to pursue everolimus as one of several potential treatment options should have affirmatively answered whether there was a motivation to combine. Id. It was improper, the panel found, for the district court to apply a heightened standard requiring West-Ward to prove that a person of ordinary skill in the art would have been motivated to select everolimus over other potential treatment methods. Id. at 13-14. Regarding the district court's finding of a lack of a reasonable expectation of success, the panel discerned no clear error. Id. at 19. The panel found that in reaching that finding, the district court had properly relied on the prior art and expert testimony to support subsidiary findings that: 1) temsirolimus phase I data had diminished weight; 2) everolimus and temsirolimus had different pharmacological properties; and 3) the molecular biology of advanced RCC was not completely understood. Id. at 17.

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Federal Circuit Rules that Issue Preclusion Bars a Party from Arguing in an Appeal of an Inter Partes Review Decision an Issue Previously Decided in Another Inter Partes Review Proceeding that Was Not Appealed

On May 23, 2019, Federal Circuit Judges Dyk, Taranto, and Chen issued an opinion, authored by Judge Taranto, in Papst Licensing GMBH & Co. KG v. Samsung Electronics America, Inc., Case No. 2018-1777. Central to the appeal was the question of whether issue preclusion bars a party from arguing in an appeal of an inter partes review (IPR) decision an issue that was previously decided in another IPR decision that was not appealed.

Samsung Electronics America, Inc. and Samsung Electronics Co., Ltd. (collectively, Samsung) successfully petitioned the Patent Trial and Appeal Board (PTAB) of the U.S. Patent & Trademark Office to institute an IPR of all claims of U.S. Patent No. 9,189,437 ('437 patent), owned by Papst Licensing GMBH & Co. KG. Slip op. at 2. In its final written decision ('437 patent IPR decision), the Board determined that claims 1-38 and 43-45 are unpatentable as obvious based on a combination of: U.S. Patent No. 5,758,081 to Aytac (Aytac reference), a publication setting forth standards for the Small Computer System Interface-2 (SCSI), and “admitted prior art” (i.e., what the '437 patent specification describes as prior art). Id. Papst appealed. Id.

Six weeks before the Board rendered its decision regarding the patentability of the '437 patent, the Board rendered final written decisions in two other IPRs (requested by Samsung and other petitioners) involving two other Papst-owned patents, U.S. Patent Nos. 8,966,144 ('144 patent) and 8,504,746 ('746 patent). Id. at 8. The '144 and '746 patents share a specification with the '437 patent and contain claim terms related to those involved in the disputes on appeal. Id. In two of the Board's IPR decisions involving the '144 and '746 patents, as in the '437 patent IPR, the Board found unpatentability based on the Aytac reference, SCSI, and the admitted prior art. Id. Papst appealed those decisions, along with the '437 patent IPR decision, and those appeals were fully briefed and set to be orally argued before the Federal Circuit on the same day. Id. Shortly before the argument, however, Papst voluntarily dismissed its appeals from the IPR decisions on the '144 and '746 patents, and therefore those decisions became final. Id. at 8-9.

Quoting Supreme Court precedent, B&B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1303 (2015), the Federal Circuit panel recited the general rule of issue preclusion: subject to certain exceptions, when an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim. Id. at 10. The panel noted that the Supreme Court has made clear that issue-preclusion principles apply in a case even when the first “action” was before an agency if the agency proceeding meets certain standards, and the Federal Circuit has since held that those standards are met by IPR proceedings before the PTAB. Id. at 11. Thus, in an appeal before the Federal Circuit, the issue preclusion doctrine can apply to the PTAB's final decision in an IPR proceeding. Id.

The panel further noted that in certain cases there may be justifications for denying issue preclusion, but that Papst had not advanced any persuasive reason for doing so. Id. at 12-13. For example, Papst had not asserted inadequate representation or an impaired opportunity to litigate in the IPRs involving the '144 patent and the '746 patent. Id. at 13. As another example, Papst had not presented any allegation of a legally significant disparity in incentives between the IPR proceeding for the '437 patent and the two other at-issue IPRs based on the Aytac reference. Id. The panel further noted that Papst could not say the litigation costs in those other two IPRs were not worth incurring given that Papst had litigated those IPRs all the way through to final written decisions at the PTAB and then through the appeal up to the eve of oral argument before the Federal Circuit. Id. Papst also had no basis, the panel found, to argue that it tried unsuccessfully to take efficiency-enhancing steps, such as asking Samsung and the other petitioners to waive reliance on preclusion. Id. The panel made clear that in noting these circumstances, it did not address what if any ultimate legal relevance different circumstances might have in justifying an exception to the important policy of issue preclusion. Id.

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Jeffrey S. Ginsberg is the Assistant Editor of this newsletter and a partner at Patterson Belknap Webb & Tyler LLP. Abhishek Bapna is an associate at Patterson Belknap Webb & Tyler LLP.