CAFC: Prior Judicial Opinions Do Not Bind the PTAB

Novartis v. Noven Pharma (Fed. Cir. 2017)

This short opinion by Judge Wallach affirms the PTAB findings that the claims of two Novartis patents are invalid as obvious. See U.S. Patent Nos. 6,316,023 and 6,335,031.  Several prior court decisions (including those involving the petitioner here) had upheld the patent’s validity against parallel obviousness challenges.

The most interesting aspects of the decision are found under the surprising heading: Prior Judicial Opinions Did Not Bind the PTAB.  When taken out-of-context, we can all agree that the statement is silly and wrong. The PTAB is obviously bound by Supreme Court and other precedent.  In my view, the statement is still silly and wrong even when applied in context. 

The context: In Novartis Pharm. Corp. v. Noven Pharm., Inc., 125 F. Supp. 3d 474 (D. Del. 2015)), the district court considered Noven’s obviousness argument and fount it lacking merit. Same story in Novartis Pharm. Corp. v. Par Pharm., Inc., 48 F. Supp. 3d 733 (D. Del. June 18, 2014) and Novartis Pharm. Corp. v. Watson Labs., Inc., 611 F. App’x 988 (Fed. Cir. 2015), albeit with different parties.

In the Inter Partes Review, the USPTO concluded that those prior court decisions regarding obviousness need not be considered since the record was different at the PTAB – albeit admittedly ‘substantively the same.’   [edited] On appeal, the Federal Circuit rejected the PTAB’s reasoning as a trivial likely insufficient distinction, but instead found that the different evidentiary standard was what justified the result:

Nevertheless, even if the record were the same, Novartis’s argument would fail as a matter of law. The PTAB determined that a “petitioner in an inter partes review proves unpatentability by a preponderance of the evidence (see 35 U.S.C. § 316(e)) rather than by clear and convincing evidence[] as required in district court litigation,” meaning that the PTAB properly may reach a different conclusion based on the same evidence.

The idea here is that in litigation, invalidity must be proven with clear and convincing evidence while inter partes review requires only a preponderance of the evidence. As explained by the Supreme Court on Cuozzo, this may lead to different outcomes:

A district court may find a patent claim to be valid, and the [USPTO] may later cancel that claim in its own review. . . . This possibility, however, has long been present in our patent system, which provides different tracks—one in the [USPTO] and one in the courts—for the review and adjudication of patent claims. As we have explained . . . , inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress’[s] regulatory design.

Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2146 (2016) (citation omitted).

My view: As suggested here, we have a failure of system design – a party who challenges a patent’s validity in court and loses should not later be allowed to re-challenge validity. [Cite the 100’s of cases and articles supporting finality of judgments.]  In this situation, the PTAB / Federal Circuit should at least be required to distinguish its factual findings from those of the federal courts.

Obviousness Aside: A quirk of this case not addressed by the court is that it is an obviousness case – and obviousness is a question of law.  The differences in invalidation standards for courts and the PTAB are evidentiary standards and do not apply to questions of law. Rather, questions of law should be decided identically in both fora.

137 thoughts on “CAFC: Prior Judicial Opinions Do Not Bind the PTAB

  1. Senate Republicans just “k*lled the Senate” (their own words) so they could install their gold-plated puppet into a stolen Supreme Court seat. A guy nominated by the same Republican preznit that many of the same Republican Senators openly loathe.

    Oh, this is going to work out wonderfully. It always does, at least if you’re a rich white guy.

    1. For what it’s worth, good riddance to the “old” Senate and the filibuster.

      Also, Dennis, you were pretty accurate on the timing of this.

      Now we just have to figure out what can be saved as the climate and human rights get flushed down the sewer before our eyes.

      1. That one above was responding to the wrong post.

        “For what it’s worth, good riddance to the “old” Senate and the filibuster.”

        The filibuster still lives on, it just can’t be used to block certain nominations. Read the news more carefully.

    2. “A guy nominated by the same Republican preznit that many of the same Republican Senators openly loathe.”

      True, but most of those R sentators lurve the candidate regardless of the person doing the nominating.

      “Oh, this is going to work out wonderfully. It always does, at least if you’re a rich white guy.”

      MM laments Merica being made great, simply because it might benefit rich “white” males.

    3. They read the word “shall” right out of the Constitution. GOP Senators stole power from citizens who voted in 2012. This isn’t about one judge. This is about the willingness of elected representatives to permanently degrade the quality of the government to acquire power not granted by the Constitution.

      1. Payback, HofPB.

        Obama filibustered Alito just to F Bush.

        link to washingtonexaminer.com

        While the Repubs did confirm two O-man appointees, they balked at trying to appoint a replacement for Scalia in a presidential election year, a precedent establish in the 1968 presidential election where Johnson was forced to recall his nomination of Justice Fortas as Chief Justice to replace Earl Warren, a Republican.

        Also recall that Biden argued in 1992 that the Senate should not confirm any Bush nominee to the Supreme Court.

        But the Obama filibuster for political reasons was sufficient, in my view, to give him payback. The O-man was the most partisan president I think we have ever had.

    4. What an embittered old Marxist B@astard you sound like. You are losing old man. Righteousness is gaining. You hear the footsteps of doom.

  2. In other news, the CAFC published ten Rule 36 judgments today and based on the titles it looks like most of them are confirming the ineligibility or non-inventiveness of “do it on a computer” junk. Maybe someone else can confirm? I’ve been too busy the past month manually managing Internet trivia contests to follow the oral arguments.

    Keep your eyes out for that pendulum. I think it’s floating down the river somewhere.

  3. The CAFC really has their heads up their __ on this one. They just said that the PTAB doesn’t have to follow their decisions or SCOTUS.’ How much more unchecked power is the CAFC going to give the PTAB? How much more unpredictable is the CAFC going to make the patent system? How much more worthless is the CAFC going to make patents? Why do we need the CAFC when SCOTUS routinely overturns them? Why should patent applicants spend years and tens of thousands of dollars seeking patents in the U.S. if they’re so easily invalidated? At some point these decisions have to be unconstitutional because IP rights are written into the Constitution. The courts are gradually removing those rights from the Constitution with their anti-patent decisions. They should be writing themselves out of a job just like they’re destroying incentives for innovation in the U.S.

    1. Peter: At some point these decisions have to be unconstitutional because IP rights are written into the Constitution.

      Indeed. Just like it’s unconstitutional to close any post offices because the Constitution gives Congress the power to create them. Also, it’s unconstitutional to pay off debts because Congress only has power to borrow money, not pay it back.

      Or you could read section 8 like any sane person and accept that the power to create something includes the power to take it away. What am I saying, that’s crazy talk…

      1. Fair point, but for the boatload of SCOTUS precedent that says the exact opposite wrt land and IP patents.

        (The ostrich approach to advocacy)

      2. Think eminent domain…

        And then remember that even for government takings, there are strict requirements and protections in place.

    2. This seems to go in the face of the B&B Hardware case. There should be issue preclusion where the same issue is decided by a court, even where there may be a different burden of proof. This case feels like easy SCOTUS-bait for them to say “what we said about trademarks also applies to patents” and get a unanimous smackdown of the Federal Circuit.

      1. “The filibuster still lives on, it just can’t be used to block certain nominations. Read the news more carefully.” The Restatement mentioned in B&B Hardware says otherwise.

        The SCOTUS probably would not say that “what we said about trademarks also applies to patent” since there is usually not a “clear and convincing standard ” for trademark invalidity (excepting, e.g., clear and convincing evidence of an intent to decieve.) Even where there is, in B&B the TTAB decision was first, so there would not be a lower burden of proof in the subsequent district court action.

        Here the first of the parallel decisions came in the dictrict court under a clear and convincing standard, then the second in the PTAB under a preponderance of the evidence standard. The Restatement and all of the case law that it is based upon say that this is proper.

        1. Miscopied the quote. “This seems to go in the face of the B&B Hardware case. There should be issue preclusion where the same issue is decided by a court, even where there may be a different burden of proof.”

  4. Isn’t Dennis assuming that the PTO is bound to the district court’s claim construction? Doesn’t the PTO apply a different standard than the court? As far as I am aware, the PTO is not bound by a court’s claim construction.

  5. Apparently, the new filter system locks you out after a single word trips a filter – no matter what else you might be attempting to say – and to whomever else you are attempting to say it to….

  6. Invalidation by a 1,000 IPRs. I recently looked at case and the patent family had been IPR’ed twelve times. And, one set of claims had not had one success for 103, and yet the CAFC invalidated all the claims under 101 saying there was nothing more.

    Think about that. The PTAB said twelve times that it was not more likely than not that the claims were invalid under 103, and yet the CAFC said (with no evidence) that the claims offered nothing more than the phantom claim (directed to) the CAFC conjured up.

    1. “Think about that. The PTAB said twelve times that it was not more likely than not that the claims were invalid under 103 [OVER TWELVE DIFFERENT COMBINATIONS OF ART].”

      You missed a few words. If I’m counsel for a thirteenth party and I’ve got a better thirteenth combination of art, I don’t give a hoot about the first twelve IPRs.

      Res judicata, collateral estoppel, issue preclusion and the like can’t touch me. “Invalidation by 1,000 IPRs” suggests that there’s some threshold at which a patent owner should be able to be bulletproof. Wasn’t true before, isn’t true now, and has no reason to be true in the future.

      1. DRJlaw: “Wasn’t true before.”

        Wrong. Before you had to have standing. Now you don’t. You can file and file. Moreover, I didn’t leave anything off of my original post. The CAFC held the claims invalid because there was nothing more over their phantom claim (directed to) with NO evidence.

        So, appellants at the CAFC spent a fortune at the USPTO trying to get the claims invalidated over and over again with 103, and with NO evidence the CAFC invalidated them, in effect, saying they were obvious (103).

        1. “Before you had to have standing.”

          Before 1981? Nobody can stop you from arguing that the last 45 years have been a giant mistake, but the rest of us have moved on.

          There was never a standing requirement in EPR and IPR. “Any person” means literally any person and “any third-party requester” meant literally any third party.

    2. Which case?

      I don’t see how invalidity under 103 precludes invalidity under 101. Moreover, “nothing more” seems like an issue of claim construction–not a fact issue. Were there underlying fact issues that required evidence to resolve?

      1. NS II: You see no relation then between the “something more” test and 103. OK. Just every fair thinking person in the world that works on patents does see a relation.

        Not a fact issue? Seriously? Determining whether there is “something more” over what is known is not a fact issue. So, you think that a fact finder determining what is known in the prior art is not a fact issue. OK. Again, no other fair thinking person that knows patents would say that. But, OK. I know we live in the world of the anti-patent judicial activists who just deny reality. Welcome back to medieval times.

        1. I’m not denying that there is a relationship between 103 and the current understanding of 101. I just don’t see why these rulings are inconsistent. I can see no reason why a claim couldn’t be obvious AND ineligible.

          As for “something more,” your original comment was regarding the CAFC holding as to what the claims offered–not what was known in the prior art. In many cases, the relevant scope of the prior art will not be in dispute, so the lack of evidence is meaningless. For example, if the something more is “a computer,” it is unlikely that someone will challenge its prior art status. Of course, it is hard to evaluate this in the abstract, which is why I asked for information about the particular case.

  7. Having read the piece and then skimmed the comments thread, I am surprised to find that stuff which for the rest of the world is uncontroversial can be so contentious in the USA.

    A patent is a restraint of trade and free competition. Allowing a bad one to be enforced is a public mischief. There must be effective means by which bad patents can be struck down.

    Filing and prosecuting is a matter between Applicant and Office. Especially where matters of scientific fact are involved (evidence coming from experiments) the finder of fact has to do it with only one side of the story to hand. It is beyond obvious that sound decisions can come only after having heard both sides of the story.

    That said, of course there has to be strict control of those who would otherwise waste the precious time of the finder of fact. It is beyond obvious that effective controls must be in place, to stop a party re-litigating an issue where it has already been given its day in court.

    MM has a thankless task, calling out in these columns the patent maximalist crowd. But I thank him. Patents are an exception to the general rule of free competition to promote the progress of society. Never forget that. But a properly functioning patent system is nevertheless worth it. And so I want patents to receive ever more respect, not ever-diminished respect from the public and its delegates in DC.

    The way to do that is steadfastly and speedily to enforce the good patents, while finding and using effective ways tirelessly and robustly to stamp out any bad ones whose owners have the gall to assert.

    1. Except reality Max. The reality of what has happened in US patent law is that judicial activists (anti-patent) have so twisted the law that it is difficult for anyone to what our laws are now. All of this flows from Benson where the DOJ was attempting to limit patentability of software programs (mainly for big corporations who made their money with hardware at the time.)

      So, rather than having concise laws that are in accordance with reality what we have is twisted logic right out of the medieval times that is perpetuated by anti-patent judicial activists. Most of them are highly unethical, e.g., Mark Lemley, and think nothing of misrepresenting the law, science, and historical facts. For example, Mark Lemley recently was at a seminar where he used the number of patent filings to support his hypothesis that the weakening of the patent enforcement has not slowed applications. But, this is simply a 1ie. Had he normalized the numbers (i.e., removing foreign filing and adjusting for the growth in the economy) he would have a graph that illustrates that patent filings are falling. Highly, highly, unethical conduct.

      That is reality Max. I have no problem with people that advocate for changing the laws on eligibility. But, the unethical anti-patent judicial activists have so twisted our laws that it impossible for anyone to know what our laws are (and predict what they may be in the next year or two) with the latest judicial activisms at the SCOTUS and CAFC.

      Reality Max. Try it.

      1. Night I wholeheartedly agree with you, that:

        “…. it is difficult for anyone to what our laws are now…..”

        We differ though, on who or what should take the blame.

        If nobody knows when a claim is patentable, invalid, or infringed, well then that is a vexatious mischief, exploitable by greedy lawyers and their unscrupulous clients, against the interest that society has in a strong and well-functioning patent system. Can we agree on that, perhaps?

        1. a strong and well-functioning patent system.

          Methinks that your “understanding” of what that means is clearly deficient.

        2. We can agree on that Max. Now please go re-read Benson and Chisum’s analysis of Benson and analyze what Lemley did at the recent seminar. Then report back to me as to who is to blame.

          1. If I understand you aright, Night, the US patent system is dysfunctional because Lemley has influence, and you don’t.

            I remain to be convinced.

            I think it’s because (inter alia) 35USC101 is badly drafted and SCOTUS is derelict in its duty to tell us what it means (what is encompassed in today’s world by the “useful arts”).

    2. MM has a thankless task, calling out in these columns the patent maximalist crowd. But I thank him

      No real surprise there.

      Another “friend” with whom, who needs enemies?

        1. Nah bro, you have to believe that they are literally mind controlled into a different view of the universe than you have. It’s literally a neoliberal view, that is sympathetic to leftism (for fairness, social justice etc. against liberty, property etc.).

    3. Max, There must be effective means by which bad patents can be struck down.

      What is a “bad” patent?

      Second, regarding “struck down,” by whom?

      Do you understand legal rights, the rule of law and due process?

      The less of these we have the more “effective” are means of striking down, not so?

      1. A bad patent is one that should not have been granted. When the PTO does not know all the relevant facts, but only a selection of them, it can happen that there are bad patents amongst the issuing stream.

        By strike down, I mean revoke. The petitioner for revocation should carry the burden of proof. The burden should be the ordinary civil law “more likely than not” standard. So it is, everywhere in the world except the USA.

        What do you mean, Ned, by “less” and “effective”? That’s the bit I don’t understand.

        1. Maybe MaxDrei you might want to focus first on answering the question of:

          Do you understand legal rights, the rule of law and due process?

          For all of your “the rest of the world” spiel, the answer to that question is pretty important.

          And then, please, remember to respect the sovereignty as this nation has long treated certain aspects of patent law differently (and to the betterment of innovation here, mind you).

        2. Okay Max, a bad patent is one that should not have been granted. But only a patent that covers existing products and services or processes withdraws from the public things already in the public domain. A patent that covers an invention, but too broadly, may be bad in a sense, but the inventor still contributed.

          Regarding revocation, what we have seen in the United States in the case of in the case of IPRs is gang tackling, unfair procedures in an administrative agency, and other denials of due process that are virtually wrecking the United States patent system. Prior to this “patent death squad” procedure, every accused infringer had a right to his day in court where he could defend on the basis that the patent was invalid. Even if the patent owner prevailed in one action, validity could be raised in every other action. Thus, and in point of fact, truly bad patents could not be enforced in United States prior to IPRs. What has changed with IPRs is that small fry inventors and startup firms are being stripped of their patents simply because of IPRs.

          Regarding your point about “efficient,” the point I was making is that the less due process you give a patent owner the more efficient the process comes from the viewpoint of stripping an owner of his patent. One can imagine the procedure that would allow a patent owner exactly 5 hours to come to Washington to provide a defense on the filing of a petition. Now that would be efficient from the point of view of a revocation procedure. But it would not be fair whatsoever. This imagined procedure kind of reminds one of the due process that a certain person of interest had to endure two thousand years ago when he was detained at midnight, tried at three, convicted at six, scourged at nine, crucified at noon, and died at three. Now is that the kind of efficiency you advocate when we want to get rid of a “bad” patent.

          1. The curious thing, Ned, is that at the EPO filing an opposition is a sign that the patent is important. Losing the opposition leaves the patent owner in a position stronger than it was before. In Europe, oppose at your peril. You might very well live to regret it.

            I put it to you that it’s not the concept of a post-grant review of validity that is so wrong but, rather, the way the USA has implemented that concept and adapted to it in infringement proceedings. In a well-functioning patent system, there is a correct balance between the legitimate needs of the patent owner (for speedy injunctive relief) and the competitor (for the bad patent to be struck down quickly).

            1. Max, your Euro-Uber-Allis system does recognize that after the opposition period is over, there is an extremely strong presumption of validity such that the courts do not even address validity before they issue the injunction.

              I would not be opposed to getting rid of reexaminations and all forms of PGR in favor such an opposition system, but with the caveat that the period of time an opposition is pending be added to term. Long ago, when Hal Wegner an I were on the AIPLA’s opposition committee together, this essentially was his position as well. Once the opposition period was over, the presumption of validity should be extremely strong such that preliminary injunctions should routinely be granted.

              1. Ned your comments remind me of the way pharma patent owners assert their patents against the generics folk, as the patent nears the end of its term.

                Recently, the court in England found an innovative way to control abuse, do justice, and find a balance between the legitimate assertions of generics and those of patent-owning pharma. I wonder if this balance meets the requirements of due process.

                The court gave Mr Generic the declaration it sought, namely that the act accused of infringement was an act obvious at the priority date of the asserted patent.

                The consequence was to render ineffective not only the patent asserted but also all of the divisionals in the pipeline at the EPO, regardless what claims might be in them when they go to issue.

                Ned I don’t understand your notion of adding to patent term all the years of pending opposition. If ever a law were open to abuse, that would be it, no?

                In Europe one routinely asserts the patent the day it issues. The court could enjoin the accused infringer straightaway, long before any validity issues still live reach the court of appeal for judgement.

                Here a Link.

                link to ipkitten.blogspot.de

          2. Ned, you will find that the [rare] IPR “gang tackling” you and others refer to due to patent owners that have “gang tackled” numerous different companies with infringement suits on the same patents.
            If you were representing a patent suit defendant for a change would you want them denied any IPR defense opportunity because a different defendant had filed one, even if they did a bad job of it?
            Also, IPRs can be and have been denied by the PTAB where the prior art assertions are duplicative of prior filed IPRs.

            1. Paul, not sure of your definition of rare, but if you were a patent holder would you want an efficient infringer to challenge your patents even though the one year time bar set by statute was long gone? Then have a newly created LLC owned by a newly created LLC file IPRs against your patents? Then have RPX, which had a relationship with the efficient infringer, file IPRs? Then, after the evidence was so clear cut even a death squad couldn’t ignore it and dismissed RPX’s IPRs have a hedge fund with a relationship to RPX file IPRs that were granted and are now set to go before the CAFC. All the while the efficient infringer files IPRs against 15 of your patents that are not involved in the suit. Did I mention the patents in suit have been through three different invalidation attempts at the district court level by three major multinational infringers and none could invalidate them. It may be “rare” but it sure doesn’t make things any better when it happens.

              >>>Also, IPRs can be and have been denied by the PTAB where the prior art assertions are duplicative of prior filed IPRs<<<

              Yes, but there are still filing fees for your defense, attorney fees, and expert opinions as well, not going to break the bank individually, but when you have more than 70 IPRs filed against 19 total patents (when only four are asserted against the efficient infringer) everything gets expensive by repetition.

              1. PI, this is solely in response to your “would you want an efficient infringer to challenge your patents even though the one year time bar set by statute was long gone?”
                Responses: What I would want is irrelevant. But what should logically be the right answers are: no if it is the same infringer, but yes if it is a different infringer sued later so that the one year time bar does not apply to that infringer. If a patent owner sues different infringers at different times they created that situation. It also makes it more difficult for the PTAB to treat them together.

                1. If a patent owner sues different infringers at different times they created that situation

                  What about the fact that the AIA forces this type of non-joinder? (in certain situations)

                2. Is there anything in the USA comparable to a “Certificate of Contested Validity” which the English courts will issue to a patent owner if it asks nicely, after it has seen off the validity attacks.

                  Subsequently, any party choosing to put validity in issue faces a very serious financial risk, if it fails to get the patent found invalid.

                3. Paul, the question started with, “if you were a patent holder would you want…”, so what you would want is the only relevant thing. Feel free to decline to answer if it doesn’t fit your narrative. And, honestly, I would think that a man of your intellect would follow that I provided all that information as a backdrop to the question for you to know it was only one well known, oft infringing, efficient infringer.

                  Also, how would YOU feel if you were that patent holder and the same three PTAB judges who had to toss out RPX’s petitions for not disclosing RPIs wouldn’t even allow you discovery on RPIs for two IPRs when YOU were alleging that the petitioner was a beard for RPX who was a beard for the major efficient infringer????

  8. Dennis, bingo. You have very nearly identified the elephant in the room. The Oil States petition for writ of certiorari will get you the rest of the way.

    1. Or, for those less concerned with all that Constitution stuff, Blonder-Tongue offers a comprehensive approach. Collateral estoppel must be applied on a case by case basis.

    2. Why not wait to see if this latest Hail Mary Constitutional cert pass actually finds a receiver, since the four or five such prior attempts have not, instead of Trumpeting it [pun intended] on every blog here as some kind of certitude?

  9. So does this mean that if there is a jury verdict holding a patent valid, that the PTO can, post-verdict, invalidate claims in an IPR?

      1. Juries do not hold patents valid, they (or judges in a bench trial) hold that a patent has not been proven invalid under a particular burden of proof. The issue can be relitigated (assuming that statutory time limits are satisfied) under a significantly lesser burden of proof.

        Read Senator Whitehouse’s legislative comments linked to below in 9.2.2.1.1.1.

        1. Okay, let’s say you are correct. In the situation where there is a jury verdict (but no final judgment entered by a district court) holding the patent is NOT invalid, and then later the PTO invalidates claims in an IPR, that PTO action should not disrupt the jury verdict. Going forward you may not have a patent or an unenforceable patent with actions filed after the IPR decision, but the Judge in the jury case should not be able to come back say that the post-verdict IPR now disrupts the pre-IPR decision jury verdict.

          Even if the issue can be relitigated under a lesser burden of proof in an admin law proceeding, that shouldn’t have any effect on a jury verdict that came well before the IPR decision.

          1. “the Judge in the jury case should not be able to come back say that the post-verdict IPR now disrupts the pre-IPR decision jury verdict.”

            Federal Rule of Civil Procedure 60(b) says otherwise. Again, read Senator Whitehouse’s legislative comments linked to below in 9.2.2.1.1.1. The judge is able to, but not required to. It is an exercise in judicial discretion.

            FRCP 60(b)
            “[T]he court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:

            (1) mistake, inadvertence, surprise, or excusable neglect;

            (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

            (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

            (4) the judgment is void;

            (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

            (6) any other reason that justifies relief.”

      2. LOL, I do mean the Federal Circuit. I think there’s a case that had oral argument in the Fed Cir in August that had just that situation–jury verdict holding the patent valid, then months later, IPR decision invalidating claims–but no ruling yet.

        Today’s ruling would suggest that said case is not going to get any special treatment as a result of the prior jury verdict.

          1. Absolutely. And patent owners are entitled to a jury trial — In re Lockwood. But the Feds ignore Lockwood. MCM Portfolio v. HP.

            Helen Nies and two other Federal Circut judges recognized that Lockwood overruled Patlex. But, when might makes right, the Federal Circuit has the might — until that is, its Boss intervenes and gives it a well deserved tongue lashing.

    1. a jury verdict holding a patent valid

      Oh my. Did you just say that a jury “held” that your patent on a method of dynamically storing medical database passwords on a remote server was valid?

      That’s very impressive. I’m incredibly excited for you and your family. Cash the check before it bounces!

      As a third party with far better arguments and art than those presented by the “copyist” you decided to sue, I could really care less what some jury in Texas “held” about the “validity” of your patent. And the PTAB shouldn’t give two hoots about it either. Once again: that’s a feature, not a bug.

  10. @Dennis

    “[edited] On appeal, the Federal Circuit rejected the PTAB’s reasoning as a trivial likely insufficient distinction…”

    No, it did not. You’re misreading the opinion due to a nasty parenthetical reporting Novartis’ argument. Let’s break apart the paragraph bridging pp. 6-7:

    [Introduction]
    Novartis’s argument fails on factual and legal
    grounds.

    [Factual grounds]
    As an initial matter, the record here differed
    from that in the prior litigation, meaning that Novartis’s
    argument rests on a faulty factual predicate. With respect
    to Watson, the PTAB found that it “does not control
    here because [Appellee] Noven [Pharmaceuticals Inc.
    (‘Noven’)] has presented additional prior art” like Sasaki
    “and declaratory evidence that was not before the [c]ourt”
    in that case.5 Noven II, 2015 WL 5782081, at *2. Similarly,
    as to Noven D. Del., the PTAB found that it did not
    control because the parties provided additional evidence
    that was not before the Delaware District Court.6 Id.; see
    Dr. Agis Kydonieus, two declarations of Dr. Christian
    Schöneich, and one declaration of Dr. Alexander M.
    Klibanov).

    [inserted break]
    Novartis tacitly concedes that the record here
    is different.
    [citation and parenthetical reporting basis for prior sentence]
    See Appellants’ Reply 7 n.1 (“The USPTO
    and Noven argue that the parties submitted expert declarations
    and deposition testimony that was not before the
    Noven [D. Del.] Court. But neither disputes that these
    materials are substantively the same as the experts’
    testimony before the Noven [D. Del.] Court.” (emphasis
    added) (citations omitted)), 11 (“The [PTAB] sought to
    explain its rejection of this [c]ourt’s Watson decision on
    grounds that Noven presented art and evidence in the
    [inter partes review] that was not before the Watson
    [c]ourt[]. While differences in the record could justify a
    different outcome overall, under Baxter, they do not support
    the [PTAB]’s contrary conclusions on the specific
    rivastigmine art and arguments previously adjudicated in
    Watson.” (emphasis added) (citation omitted)).
    [end of citation and parenthetical]

    [Fed. Cir. conclusion for factual grounds]
    It is unsurprising that different records may lead to different
    findings and conclusions.

    Then the opinion shifts to an alternative analysis of legal grounds:

    Nevertheless, even if the record were the same, Novartis’s
    argument would fail as a matter of law.

    Nothing in the quoted paragraph suggests that the Federal Circuit has characterized the PTAB’s distinction of the factual case as trivial, likely insufficient, or otherwise incorrect. That is material reported from Novartis’ argument, and it is unequivocally rejected by the introduction and conclusion of the paragraph.

    1. Yup, was going to post that exact part:

      >Novartis’s argument fails on factual and legal grounds. As an initial matter, the record here differed from that in the prior litigation, meaning that Novartis’s argument rests on a faulty factual predicate. With respect to Watson, the PTAB found that it “does not control here because [Appellee] Noven [Pharmaceuticals Inc. (‘Noven’)] has presented additional prior art” like Sasaki “and declaratory evidence that was not before the [c]ourt” in that case.

      But if you need to quote a hypothetical to get your daily dose of self-made outrage, more power to you.

      >As suggested here, we have a failure of system design – a party who challenges a patent’s validity in court and loses should not later be allowed to re-challenge validity.

      I would tend to agree that you shouldn’t be able to re-challenge validity using the same arguments presented beforehand. Thankfully:

      >[Because the CAFC affirms] the PTAB’s conclusions that the Asserted Claims would have been unpatentable as obvious on the grounds discussed, we need not address the alternative grounds of unpatentability.

  11. This is quite possibly among the least compelling posts of Dennis’ career (but only if we set aside all the posts where he suggests that some logic should be eligible for patenting without suggesting any framework for deciding which logic falls into that magical category).

    But, hey, everybody has an off day.

    As DRJLaw wrote downthread: You may disagree with Congressional policy, but this was not a failure of system design. It was a wise use of an express feature that allows those charged with infringement to challenge the validity of the patent in the most technically competent venue available to them.

    Yup. The ability to get rid of a junk patent via an IPR using a preponderance standard (as opposed to a clear and convincing standard) is a well-conceived feature of the AIA. Congress knew exactly what it was doing, and why. And guess what? Nobody is complaining except for the same tired bunch of “freedom fighters” who complain about every aspect of patent law that inhibits their ability to quickly obtain and monetize “patent rights.”

    And a friendly reminder: “patent rights” are defined by Congress. There is nothing inherently “private” about them and it’s endlessly amusing to watch these hypocritical fake libertarians (LOLOL) pretend otherwise.

    1. I kind of understand the sentiment there MM, but it seems a very odd procedural mechanism and substantial gubmit tomfoolery to permit this sort of absurdity to occur. Have one gubmit branch (the one supposedly fundamentally and pretty much only there to resolve disputes between parties) decide an issue one way, then have another gubmit branch decide the same issue another way.

      Seems antithetical to the whole system of gubmit that is setup.

      1. Especially when the second gubmint branch is the same gubmint branch that granted the right in the first place.

        (1) USPTO issues valid patent. (2) Court upholds valid, issued patent. USPTO determines patent not to be valid after (1) and (2) are found to be true.

      2. With patent “friends” like Malcolm, who needs enemies?

        (realizing that his “logic” is simply not constrained by his feelings regarding software)

          1. 6,

            P has long historical roots – all the way back (at least) to the ancient Greeks.

            That being said, the notion of “of age” draws a clear line between other alternative s e x modes and the P mode, and it is not merely “just another” mode.

            What you, perhaps inadvertently, hit upon though is the slippery slope of relativISM.

      3. This result is not due to Congress. This is due to Separation of Powers. Congress could not (or did not want to risk Constitutional peril) of ordering District Courts to stay an action pending the outcome of an IPR. Congress encouraged courts to do so by (1) making the IPR process quick (as compared to IPX) by statute so that a plaintiff’s action would not be tied up too long in the IPR process and (2) adding that the decisions of an IPR would carry estoppel effect. The courts came up with their own rubric and some have been more amenable to a stay and others have not. Multi-defendant litigation complicates it as well.

        Congress can take jurisdiction from the district courts altogether, but the issue is doing so when the litigation has already begun.

    2. I beg to differ. In our post-modern world, Congress hardly ever “knows exactly what its is doing” when it comes to the patent system. Instead, it does what it is told it should be doing, by the so-called “stakeholders.” (There’s a term straight out of the pit of the “HOT PLACE”).

      SCOTUS is supposed to check congressional aberrations that affront the Constitution, like IPRs, which can, in effect, reverse an Article III court’s findings as to patent validity. This is absolute craziness. When will SCOTUS “man up” and stop this?

      And while they are at it, they should mandate a uniform standard of claim construction for issued patent claims. The current schism is unbearably wrong.

  12. “Sometimes two different tribunals are asked to decide the same issue. When that happens, the decision of the first tribunal usually must be followed by the second, at least if the issue is really the same. Allowing the same issue to be decided more than once wastes litigants’ resources and adjudicators’ time, and it 1299*1299 encourages parties who lose before one tribunal to shop around for another. The doctrine of collateral estoppel or issue preclusion is designed to prevent this from occurring.

    Both this Court’s cases and the Restatement make clear that issue preclusion is not limited to those situations in which the same issue is before two courts. Rather, where a single issue is before a court and an administrative agency, preclusion also often applies. Indeed, this Court has explained that because the principle of issue preclusion was so “well established” at common law, in those situations in which Congress has authorized agencies to resolve disputes, “courts may take it as given that Congress has legislated with the expectation that the principle [of issue preclusion] will apply except when a statutory purpose to the contrary is evident.”

    B & B HARDWARE v. Hargis Industries, 135 S. Ct. 1293, 575 U.S., 191 L. Ed. 2d 222 (2015).

    The Federal Circuit relies on Cuozzo which talks about different standards of proof between district courts and the patent office but did not discuss the situation were the parties were the same. Thus B&B Hardware seems directly on point and controlling.

    This seems like another case where the Federal Circuit is defying controlling Supreme Court precedent, mainly by ignoring it.

    The Federal Circuit must take this case en banc to reverse it or it will now have another case at the Supreme Court where it will be unanimously reversed.

    1. APA should be repealed, root and branch and a court procedure similar to an IPR (i.e. early in a case, open to outside parties, cost-limiting rules in place) should be handled by Article III courts.

    2. “courts may take it as given that Congress has legislated with the expectation that the principle [of issue preclusion] will apply except when a statutory purpose to the contrary is evident.”

      Pretty certain that that exception applies here considering 35 USC 315(b) is rather explicit about the ability to file an IPR after a patent owner’s complaint.

        1. In other words, the correct reasoning.

          You also appear to have missed a significant portion of the Restatement upon which B&B relies:

          “Exceptions to the general rule of issue preclusion

          Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances:

          * * *

          (4) The party against whom preclusion is sought had a significantly heavier burden of persuasion with respect to the issue in the initial action than in the subsequent action….”

          Thus even following B&B an IPR conducted under a preponderance of the evidence standard is not precluded.

          1. When and why does this change occur?

            Hint: at the initiation decision point.

            That is when sticks in the bundle of property rights of a granted patent suffer a taking.

            It is not as if the government is entirely foreclosed from actions that are takings (think eminent domain).

            But make no mistake – even valid takings must comport with certain safeguards.

            The right questions are STILL not being asked if the Court.

      1. I generally agree with this premise. Because it is a public right, the express language of the statute controls (outside of outlandish due process violations). The discussion more or less ends there, and Dennis’s cite to judicial finality cases misses the mark.

        Of course, statutes change, and Article III participation (yes, this means you too CAFC) occurs for only as long as Congress allows it.

        If, however, patent validity is redesignated a private right, then it belongs the core of the judicial power, the “house of cards” topples and the administrative mechanism is relegated to what should be its rightful place: that of an advisory adjunct to the Article III district courts.

        1. Anony, come on now.

          315 (a)(1)
          INTER PARTES REVIEW BARRED BY CIVIL ACTION.—An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.

          Now consider all the estoppel provisions.

          It is manifest that Congress gave the petitioner only one bite. DRLaw is nothing but a shill for the efficient infringer crowd, as is the Federal Circuit and the USPTO.

          1. Ok, fair enough. Let me try again.

            Because it is a public right, the statute controls the interrelationship between the judicial bodies. The discuss begins and ends with what the statute says.

            As to whether the statute(s) supports DRJs position, I have no opinion.

              1. DRJLaw, that section of the AIA is more cr@p and you know it. It extensively relies only on Federal Circuit law, particularly, Patlex, which was overruled by Lockwood, ‘cept that the Feds refuse to give Lockwood credit.

                1. “DRJLaw, that section of the AIA is more cr@p and you know it. It extensively relies only on Federal Circuit law, particularly, Patlex, which was overruled by Lockwood, ‘cept that the Feds refuse to give Lockwood credit.”

                  B&B Hardware does not provide an exception to the statutory purpose exception “because Ned Heller thinks that Congress’ reasons are cr@p.”

                  The statutory purpose is clear. The PTAB can issue its own decision even after a district court ruling. From the next page, 685:
                  “providing a more robust reexamination procedure does not create a second bite at
                  the apple. By their nature, patents are continuously subject to challenge, whether in court or before the PTO. As noted above, patents are initially issued after an entirely ex parte process in which no one else is allowed to participate. To the extent a patent‘s validity has been challenged in court, the challenge is only reviewed for clear and convincing evidence that the PTO erred in granting the patent. That does not answer the question of whether or not the PTO made a mistake – only reexamination provides a vehicle for answering that question. To the extent this is a second bite, it is at a different apple.”

                  BTW: I’ve been misattributing the material. The pp. 683-85 material was introduced by Senator Kyle, reading in a letter from former 10th Circuit Court of Appeals judge Michael McConnell.

                2. If patent validity is redeosgnated as a private right, McConnell, Lemley, perhaps others, go down with the ship.

                3. @anony

                  That’s a different issue and a hypothetical change to the current state of the law. If some things become different, other things may become different.

                4. Yes, it is hypothetical, but also directly material to everything that has been discussed in this thread. Further, the response brief from Trump’s USPTO is due is several weeks, and however hypothetical it is now, it may not stay that way for long.

                  As for future changes, a private right is a private right and the other branches can only tamper with the judicial power so much. The days of the PTAB circumventing Article III res jusicata will be over, no matter how the issue is statutorily sliced.

                  It’s now up to the SCOTUS to do what it was created to do: protect the separation of powers.

              2. DRJlaw,

                That’s an excellent collection – but one must be aware that it is not the final word on anything.

                The caveat comes from the Editor – and early – *Editor’s notes on page II.

                Anything “edited” AND “abridged” may be edited too much or too selectively.

                Also, reaching back into more than one session of Congress is typically considered a “no-no” when looking at Congressional intent of any single piece of legislation. Bills do not survive from one session to another for reasons that (most likely) will not make it into such a “treatise” as the one you depend upon.

                But over all – a good additional resource – so Thanks!

          2. Wrong subsection, Ned. You also cur off the heading for subsection (a), which is “(a) Infringer’s Civil Action.—” Now try the proper subsection:

            (b)Patent Owner’s Action.—
            An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

            1. Ned’s applying his favorite definition of “shill” again :

              shill, noun, a person who you disagree with, but are too lazy to rebut using relevant arguments and evidence.

            2. DRJLaw, the issue is not whether Congress authorized parallel proceedings when infringement was also at issue, but whether Congress intended to bar IPRs if the petitioner first filed in court, which it did, and whether the result of the IPR is binding on the petitioner in non final court case, it is.

              The idea that Congress endorsed the US of IPRs after the petitioners has actually lost in court defies the statutory framework.

              The Federal Circuit is now once again in defiance of both Congress and the Supreme Court. Moreover, their defiance is so utterly predictable, because the interests they serve are the USPTO, the AIPLA, the IPO and the ABA IP section, all of which are solidly behind the efficient infringement constituency, the very largest companies in the world.

              The major organizations that have influence who are not in that group are Pharma and Bio, who represent companies that need strong patents.

              1. @Ned Heller

                “DRJLaw, the issue is not whether Congress authorized parallel proceedings when infringement was also at issue, but whether Congress intended to bar IPRs if the petitioner first filed in court, which it did, and whether the result of the IPR is binding on the petitioner in non final court case, it is.”

                The petitioner did NOT first file in court. Novartis filed a complaint on April 3, 2013 (link to courtlistener.com). Noven filed an IPR petition on April 2, 2014, as permitted by 35 USC 315(b) (link to docketalarm.com and link to docketalarm.com).

                If you can point to where Noven filed a civil action prior to filing the IPR petitions, please do so.

                1. DRLaw, the issue is not whether there can be parallel proceedings. When infringement is involved, the petitioner can always defend with invalidity in court except if he has lost an IPR. He can also defend in the PTO if the petition is filed within 1 year.

                  But, if the petitioner files for invalidity, he cannot file an IPR. Now why the F did Congress say that if it fully intended that the petitioner have T W O fricken, 2!, bites at the apple. No it would not have said that at all, now would it. It would have said that the petitioner could file at any GD time it wanted to filed because the whole point is too harass the patent owner with multiple proceedings and to guarantee the petitioner a proceeding with no due process for the patent owner.

                  Your shilling for the infringer bar is beyond the pale, DRJLaw. Congress was as clear as it could be that IPRs were to be only available as an alternative to court litigation of validity, and not available at all if there was court litigation.

                  The Federal Circuit in this case has truly jumped the shark. Truly. It has shown its stripes as in no other case. It is not worthy of respect, w*ring as it does for the infringer bar, and for the USPTO.

                2. @Ned Heller

                  “DRLaw, the issue is not whether there can be parallel proceedings. When infringement is involved, the petitioner can always defend with invalidity in court except if he has lost an IPR. He can also defend in the PTO if the petition is filed within 1 year.”

                  So we’re agreed. If the patent owner filed a complaint, the accused infringer can always defend with invalidity in court, and can ALSO defend in the PTO if the petition is filed within 1 year of the filing of the complaint. Which is exactly what happened here.

                  “But, if the petitioner files for invalidity, he cannot file an IPR.”

                  I’m sorry, but what does “files for invalidity” mean? If the petitioner’s answer asserts invalidity? Where does the statute say that? 35 USC 315(b) certainly does not.

                  “Now why the F did Congress say that if it fully intended that the petitioner have T W O fricken, 2!, bites at the apple.”

                  Read the legislative history. It intended to permit the petitioner to have its BEST bite at the apple in the USPTO if the petitioner so desired and for the district court to HOLD ITS FIRE. It gave the petitioner one year to file, the patent owner a right to respond (35 USC 313), the PTAB 3 months to decide to institute (35 US 314), and the PTAB one year for the post-institution proceeding (35 USC 316). Which again is essentially what happened here. What it did NOT do is give the district court the ability to race the PTAB and force termination of the IPR by issuing a trial opinion when the IPR was nearly complete (35 USC 315(e) and 317(a), final sentence). You have not pointed to anything in the statute or the legislative history that deprives the PTAB of jurisdiction to invalidate a patent subject to the IPR over facts proven by a preponderance of the evidence, especially when a district court issues a parallel judgment that invalidity has not been proven by a substantially higher burden of proof (clear and convincing evidence).

                  Again, any other party could file the same IPR and obtain a PTAB decision invaliding the patent. It makes no sense to divest the public of the fruit of the IPR proceeding, require an identical submission by such an other party, and require another 18 months of delay versus permitting the PTAB to issue a decision that binds the patent owner as to all other parties but NOT to accused infringer (9.2.2.1.1.1 link, pp. 684-85 bridging paragraph). 35 USC 317(a) expressly states that “[i]f no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a).”

                  Your failure to have read the legislative history and to understand the full parameters of the Noven situation does not transform me into a shill. Grow up and use legal resources to support your argument as I have.

                3. @Ned Heller

                  “I’m sorry, DRJlaw, but are you truly unfamiliar with a DJ action for invalidity?”

                  I’m quite aware of DJAs for invalidity. Yet I’m not interested in 315(a) because Noven did not file a DJA, and because 315(e)(2) specifically answers what happens in the event that a DJA and IPR are filed on the same day.

                  In 9 you wrote:
                  “This seems like another case where the Federal Circuit is defying controlling Supreme Court precedent, mainly by ignoring it.

                  The Federal Circuit must take this case en banc to reverse it or it will now have another case at the Supreme Court where it will be unanimously reversed.”

                  So why don’t you discuss this situation in this case rather than ignoring it? 315(a) does not apply because Noven did not file any DJA. 315(b) applies because Novartis filed a complaint and Noven filed IPRs within one year of that date.

                  When you offer the courtesy of sticking with the topic that you yourself chose in comment 9, then I’ll consider battling over 315(a)(2)(B), which you also conveniently ignore.

          3. Ned, here also you have left out the part of the statute – 315 USC(a) here – that applies, namely: “(3) TREATMENT OF COUNTERCLAIM- A counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of this subsection.”

            I.e., the part you cited only applies to invalidity DJAs not normal infringment suits.

            1. Paul, “the part you cited only applies to invalidity DJAs”

              Precisely.

              Take infringement entirely out of the equation. Look at this only from the point of view of the petitioner as the protagonist. If he or she files in court — no IPR. If he or she files and IPR, a later court DJ can be stayed. 315(a)(2).

              In either case, only one, exactly one, bite at the apple.

              Congress did not intend collateral attacks on patent validity, plain and simple, and purely as a matter of statutory construction if not collateral estoppel.

              1. Ned et al, in the present real world more than 80% of all IPRs are filed in response to having been sued for infringement. Filing a DJA for invalidity almost always triggers a prompt compulsory counterclaim for infringement. With a DJA being far more expensive and less effective than an IPR, a DJA for invalidity is now even more rarely wisely advised, unless there is a really strong forum selection reason.

                1. No doubt Paul. Congress had to let the infringement action proceed if the patent owner presses the issue. In effect, the patent owner was waiving his right to have the validity issue tried only in the courts or in the USPTO.

                  But that does not affect the apparent policy choice Congress laid down. One one bite, not two.

                2. Paul,

                  You will not convince Ned that such a scenario exists. Neither 315(a)(3), 315(b), nor the Federal Circuit will convince him that it is possible to be sued for infringement and, in response, to raise invalidity in both the infringement suit and an IPR.

                  “Take infringement entirely out of the equation.” “Congress did not intend collateral attacks on patent validity.” Except that infringement is in the equation, Noven did not file any DJA, and for whatever reason the district court did not stay the trial or trial opinion despite a clear legislative intent that it do so.

                  The Noven IPR decisions are still useful because, although they may not mandate a reversal of the district court’s final judgment of infringement and damages, they essentially mandate an end to any injunction that may have been put into place (after a denial of cert.).

                3. DRJLaw, I think you are very skilled in missing my point.

                  I KNOW that there can be parallel IPRs and infringement suits, and the reason is that the patent owner has the right to sue or counterclaim for infringement so that the infringer has to have a right to defend himself by asserting invalidity.

                  But the statutory framework is otherwise clear: absent a complaint or counterclaim for infringement, the petitioner has only one bite at the apple. That policy choice must be respected, and it should be respected by dismissing the IPR if the Court rules for the patent owner, and by collaterally estopping the petitioner if the PTAB rules for the patent owner. Any ruling by either in favor of the petitioner kills the patent.

                4. Ned,

                  Even if you were to see a judicial ruling attempting to end this multiple bites of the apple, the efficient infringers would simply employ beards at a much earlier stage and much faster clip. Apple is already quite well versed in this tactic after already having their hand caught in the cookie jar.

                5. Patent Investor, agreed. IPRs are prone to abuse. There are no safeguards. What can be abused, will be abused; and the people abusing IPRs are doing so without shame.

                  The get away with their abuse of the power great wealth brings them by vilifying the small inventor or university as a Troll, someone that needs to be beat to a pulp and made an example of to the cheers of their brethren efficient infringers.

      2. filing an IPR after a patent owner’s complaint is a different ball of wax then filing an IPR after an adjudication of the merits.

        I see nothing in in 315 that suggests that Congress empowered the agency to overrule findings by the judicial branch.

    3. @Ned Heller
      “This seems like another case where the Federal Circuit is defying controlling Supreme Court precedent, mainly by ignoring it.

      The Federal Circuit must take this case en banc to reverse it or it will now have another case at the Supreme Court where it will be unanimously reversed.”

      Elsewhere you argue repeatedly that, e.g., “the issue is not whether Congress authorized parallel proceedings when infringement was also at issue.” Well, you began your jeremiad with this case, and this is a case where there were parallel proceedings with infringement also at issue.

      “the issue is… whether Congress intended to bar IPRs if the petitioner first filed in court, which it did, and the result of the IPR is binding on the petitioner in non final court case, it is.”

      I’ve asked before, and I’ll ask again, link to the filing or docket where “the petitioner first filed in court, WHICH IT DID” (emphasis added).

      The only interesting part of your post otherwise is its neglect of 315(a)(2)(B). But that is neither “this case” nor an issue that could addressed by an en banc reversal of this case.

  13. @Dennis

    “As suggested here, we have a failure of system design – a party who challenges a patent’s validity in court and loses should not later be allowed to re-challenge validity. [Cite the 100’s of cases and articles supporting finality of judgments.]”

    This statement is simply wrong, both in the sense that Noven used an express feature of the AIA, not some loophole, and in the fact that Noven did not “later” re-challenge validity but instead challenged validity well before trial.

    First, the IPR was filed within the time period allowed by 35 USC 315(b). Novartis filed a complaint on April 3, 2013, and Noven filed an IPR petition on April 2, 2014. You may disagree with Congressional policy, but this was not a failure of system design. It was a wise use of an express feature that allows those charged with infringement to challenge the validity of the patent in the most technically competent venue available to them.

    Second, “a party who challenges a patent’s validity in court and loses should not later be allowed to re-challenge validity” does not remotely describe the timing of events here. I won’t pretend to know who wanted what timing and why, but the decision to institute an IPR by the PTAB (October 14, 2014) was issued before trial (December 1-3, 2014). Also, all of the IPR papers were filed and hearings held well before the trial court issued the trial opinion on August 31, 2015. When the PTAB issued its decisions less than one month later, on September 28, 2015, that was fully consistent with the AIA IPR provisions, which do not provide for any sort of reverse-estoppel. Also, once the IPR is instituted

    “[Cite the 100’s of cases and articles supporting finality of judgments.]”

    Cite 35 USC 317(a) and Apple Inc. v. Smartflash LLC, CBM2015-00015, Paper 49 (PTAB Nov. 4, 2015) (there is “a public interest in resolving issues raised by these challenges because the record is fully developed.”). Substituting any other party for Noven would permit the PTAB to issue a decision. Abandoning a nearly-completed proceeding merely because the district court has issued a trial decision is directly counter to the public interest.

    “In this situation, the PTAB / Federal Circuit should at least be required to distinguish its factual findings from those of the federal courts.”

    It did. You simply did not like it:

    “With respect
    to Watson, the PTAB found that it “does not control
    here because [Appellee] Noven [Pharmaceuticals Inc.
    (‘Noven’)] has presented additional prior art” like Sasaki
    “and declaratory evidence that was not before the [c]ourt”
    in that case.5 Noven II, 2015 WL 5782081, at *2. Similarly,
    as to Noven D. Del., the PTAB found that it did not
    control because the parties provided additional evidence
    that was not before the Delaware District Court.6 Id.; see
    id. at *5 (identifying as new evidence two declarations of
    Dr. Agis Kydonieus, two declarations of Dr. Christian
    Schöneich, and one declaration of Dr. Alexander M.
    Klibanov). NOVATIS TACITLY CONCEDED THAT THE
    RECORD HERE IS DIFFERENT.” (emphasis added)

    Others have pointed out that “the USPTO concluded that those prior court decisions regarding obviousness need not be considered since the record was different – albeit ‘substantively the same'” parrots Novartis’ argument, not the USPTO’s position.

    “The differences in invalidation standards for courts and the PTAB are evidentiary standards and do not apply to questions of law. Rather, questions of law should be decided identically in both fora.”

    If the factual case for obviousness is proven by a preponderance of the evidence, but not by clear and convincing evidence, then the question of law will be decided differently. You know this: “The Supreme Court has repeatedly stated that obviousness is a question of law based upon a set of underlying facts.” (link to patentlyo.com).

    1. “It was a wise use of an express feature that allows those charged with infringement to challenge the validity of the patent in the most technically competent venue available to them.”

      Good one. A real sidesplitter.

  14. A patent can be challenged in court by two different parties based on the same or similar to prior art. What is the difference here that warrants a different outcome? If the first challenger screwed up, why should other challengers be prevented from using the same prior art?

    1. I think the question of how and when collateral estoppel might apply between the Article III courts is different from the issue of whether an Article I agency has the constitutional and statutory authority to usurp the role of Article III district courts.

  15. You state that “obviousness is a question of law.” But it’s a question of law based on underlying conclusions of fact: namely, what is taught by the references in question, what the level of ordinary skill is, etc. Isn’t it conceivable then that the same record could support different conclusions of fact (under different evidentiary standards) that fundamentally alter the conclusion of law?

    I don’t disagree with your post’s thesis, but I think this jab is misplaced.

      1. Thanks Dennis. For what it’s worth, it was taken as an aside. I do think that it leaves a potential landmine for a court. If the decision is not carefully worded, it seems plausible that a decision could imply a different outcome of law based on the same findings of fact (which I agree would be legally incorrect).

    1. Somebody once said something like “If the facts change, I change my assessment. What do you do?”

      He might well ask the same question here, no?

  16. Dennis, what’s your basis for saying re: the difference in the record that “the Federal Circuit rejected that reasoning as a trivial distinction”? The Court says: “Novartis’s argument fails on factual and legal grounds. As an initial matter, the record here differed from that in the prior litigation, meaning that Novartis’s argument rests on a faulty factual predicate. . . . It is unsurprising that different records may lead to different findings and conclusions.”

    The “substantively the same” characterization you cite is from a quote of Novartis’s brief, not the CAFC’s words.

    1. But del, everyone here needs to get their daily dose of self-manufactured outrage! Don’t take this away from them!

  17. When the SCOTUS finally clarifies that patent validity is a private right all of these structural issues will go away.

    1. I will also say – as an aside – in general terms, the IPR backers are reading way too much into Cuozzo.

  18. The extremely broad statement that the result would be the same even with identical records is dicta, because the actual decision holds they were not:
    “Novartis’s argument fails on factual and legal grounds. As an initial matter, the record here differed from that in the prior litigation, meaning that Novartis’s
    argument rests on a faulty factual predicate. With respect to Watson, the PTAB found that it “does not control here because [Appellee] Noven [Pharmaceuticals Inc. (‘Noven’)] has presented additional prior art” like Sasaki “and declaratory evidence that was not before the [c]ourt” in that case… Similarly, as to Noven D. Del., the PTAB found that it did not control because the parties provided additional evidence that was not before the Delaware District Court.”

  19. Fortunately, this has rarely ever happened. Why in this case was there a full expensive D.C. trial on this patent before the IPR decision? The whole point of the short IPR time deadline and potential stay is to preclude that, and it almost always does. Was it really a final decision in a suit between the same parties?

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