Munsingwear Mootness in Sumitomo Pharma v. Vidal

by Dennis Crouch

Although non-precedential, the Federal Circuit’s new decision in Sumitomo Pharma v. Vidal offers the important conclusion that a patentee has no standing to appeal an invalidity holding once the patent expires, absent some showing of likely infringement during the prior six years.  Sumitomo Pharma Co. v. Vidal, No. 22-2276 (Fed. Cir. April 5, 2024).  The case is not so bad for the patentee because the court also vacated the IPR decision under Munsingwear.

Under Article III of the Constitution, federal courts are limited to deciding actual “Cases” and “Controversies.” A case becomes moot, and thus no longer a live case or controversy, “when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.”[1] There some some limited exceptions, such as for cases that are “capable of repetition, yet evading review,” but that only applies when “(1) the challenged action is in its duration too short to be fully litigated prior to cessation or expiration, and (2) there is a reasonable expectation that the same complaining party will be subject to the same action again.”[2]

On March 7, 2024, the U.S. Court of Appeals for the Federal Circuit heard oral arguments in Sumitomo Pharma Co. v. Vidal, with the pharmaceutical company challenging a PTAB IPR decision invalidating its patent. However, as revealed during the oral argument, the patent at issue had expired on February 20, 2024, just weeks before. Ultimately this development led the court to determine that the case was moot and that the PTAB decision cancelling the claims should be vacated.

During oral argument, Judge Taranto probed whether Sumitomo Pharma still had a concrete stake in the outcome given the patent expiration. Counsel for Sumitomo Pharma, Thomas Saunders, acknowledged the recent expiration but argued there was still a live controversy due to the six-year statute of limitations for past damages that might later be discovered:

There’s a difficult question I’ve been thinking about. There is still a look back period for damages. Obviously, in candor to the court, it is a highly regulated entry. . . . So what would be at stake here is whether there has been unauthorized use. I can’t stand before you and presently say we are aware that it’s happened in the last six years, but the possibl[ility exists].[3]

There has been some generic entry, but Thomas indicated those were licensed entrants subject to a settlement agreement and so not infringing the patent.

When a case becomes moot on appeal, the appellate court needs to consider whether to simply dismiss the case as moot, or to also vacate the lower tribunal decision under the Munsingwear vacatur doctrine. Under the doctrine, named after the Supreme Court’s 1950 decision in United States v. Munsingwear, Inc.,[4] when a case becomes moot while on appeal, the appellate court should vacate the judgment below and remand with instructions to dismiss in order to “clear[] the path for future relitigation of the issues between the parties.”[5] This prevents a decision rendered unreviewable due to mootness from having preclusive effect. The doctrine aims to avoid entrenching a decision that has become moot through no fault of the party seeking appellate review.

In response to Judge Taranto’s suggestion of Munsingwear vacatur, Saunders acknowledged the difficulty of the mootness question in this context:

I struggle with this, Your Honor, because I think it is a genuinely difficult question. It’s not traditionally in the context of someone who owns property, which has been vacated, abrogated by the government. … But this is also the unusual circumstance where there shouldn’t have been any entrance. So what I hesitate is we just don’t know [whether there has been infringement], and the law gives us the entitlement to discover within the next six years that there was somebody who jumped the gun in what they were supposed to be doing, or there was a compounding pharmacy, or there was some illegal use.[6]

Ultimately, Saunders indicated that Sumitomo Pharma’s “most important interest” was “having [the PTAB’s invalidity] reasoning abrogated, because it’s incorrect,” and that if the court was sufficiently concerned about jurisdiction, “at the very least, there should be a Munsingwear vacat[ur].”  Although this particular patent has expired, the Orange Book listing for Lurasidone Hydrochloride Tablets shows eight other listed patents that have not yet expired.  I expect that the obviousness conclusions made by the Board in this case could potentially carry over.

Although Saunders did not get his highest wish (reversal), he did receive the backup (Munsingwear vacatur).  The result then is that the IPR final written decision is vacated.  It will be interesting to me to see whether the PTAB picks up the case again — remember here that the case is moot before the Appellate Court because the constitution requires a case-or-controversy. As an Article I court, the PTAB operates without concerning itself with such standing issues and thus could go ahead and re-decide the case.

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The invention involves a method for treating psychosis, specifically schizophrenia and manic depressive psychosis, in a patient by administering an oral dosage of lurasidone (or a pharmaceutically acceptable salt thereof) in a range of 20 to 120 mg/day such that the patient does not experience a clinically significant weight gain. U.S. Patent No. 9,815,827.  Prior antipsychotic drugs have been associated with significant weight gain.

The PTAB found the claims invalid as obvious and the substance of Sumitomo’s  appeals related to motivation-to-combine, inherency, and claim interpretation. Sumitomo argued that the PTAB improperly used the concept of inherency to shortcut its analysis and bypass significant evidence of nonobviousness. In particular, they contended that their evidence, which pointed to the unpredictability in the field of antipsychotic drugs, especially regarding weight gain as a side effect, should have been considered upfront when asking whether a skilled artisan would have been motivated to pursue the claimed invention with a reasonable expectation of success.

Further, Sumitomo challenged the PTAB’s application and interpretation of their patent claims, particularly regarding the “no weight gain” limitation. They criticized the PTAB’s rationale that this limitation could be met if any single person among a large group did not gain weight upon administration of lurasidone. This interpretation, according to Sumitomo, essentially nullified the limitation, contradicting the explicit claims of their patent and its prosecution history which underscored the importance of the “no weight gain” aspect.  But, the PTAB had read the claim literally which is “A method for treating schizophrenia in a patient.”  In other words, the claims do this for a single patient. This outcome is similar to the Federal Circuit’s recent ruling in Janssen Pharms., Inc. v. Teva Pharms. USA, Inc., No. 2022-1258 (Fed. Cir. Apr. 1, 2024).  In Janssen, the claim recited treating ““a psychiatric patient” in need of schizophrenia treatment. The Federal Circuit noted that “[n]othing in the claims requires that the regimen be used for—let alone be ideal for—the patient population generally or a certain percentage of the patient population.” The Federal Circuit instructed that on remand, the factfinding must focus on obviousness of single patient administration, not some “unarticulated percentage of patients in general.”

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[1] Murphy v. Hunt, 455 U.S. 478, 481 (1982).

[2] Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 170 (2016).

[3] Oral Arg. at 00:21–00:54, Sumitomo Pharma Co. v. Vidal, No. 22-2276 (Fed. Cir. argued Mar. 8, 2023).

[4] 340 U.S. 36 (1950).

[5] Id.

[6] Oral Arg. at 40:33–41:27, Sumitomo Pharma Co. v. Vidal, No. 22-2276 (Fed. Cir. argued Mar. 8, 2023).