Takeaway: The PTAB and district courts are not bound by each other’s contrary decisions. Even if presented with the same evidence, because PTAB’s proof of invalidity is the “preponderance of the evidence standard” rather than the district courts’ “clear and convincing evidence” standard, they may reach different conclusions.
In Delaware District Court, plaintiff Novartis’ patents, U.S. Pat. Nos. 6316023 and 6335031, were found to be nonobvious, but defendant Noven did not appeal this loss to the Federal Circuit. Novartis AG v. Noven Pharm. Inc., 2017 WL 1229742 at *2 (Fed. Cir. April 4, 2017).
While in a parallel proceeding, defendant Noven filed for inter partes review (IPR) where the Patent Trial and Appeals Board (“PTAB”) found the asserted claims as obvious and Novartis appealed to the Federal Circuit and argued that the PTAB “unlawfully reached different conclusions than … the U.S. District Court for the District of Delaware, which addressed the ‘same’ argument and the ‘same’ evidence and found the Asserted Claims nonobvious.”
More specifically, Novartis’ argued that the PTAB improperly ignored the Delaware court’s conclusion that there was no motivation to combine prior art references Enz and Sasaki at the time of the invention.
The Federal Circuit started by noting that the PTAB requires proof of invalidity using the “preponderance of the evidence” standard, rather than by clear and convincing evidence as required in the district court litigation “meaning that the PTAB properly may reach a different conclusion based on the same evidence.” The Fed. Cir. quoted from Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), that a “district court may find a patent claim to be valid, and the USPTO may later cancel that claim in its own review…the possibility of inconsistent results is inherent to Congress’[s] regulatory design.”
Likewise, in Acorda Therapeutics, Inc. v. Roxane Labs., Inc., the U.S. District Court for the District of Delaware held that the claims of Acorda’s patents were invalid as being obvious despite facing a higher burden of proof than at the PTAB, which previously held that the claims were valid. 2017 WL 1199767 at *40 (D. Del. Mar. 31, 2017) The district court recognized the PTAB’s opposing conclusion, but indicated that “two of the three references the PTAB considered are not part of the trial record here.” Id. at *41, n. 1.
Therefore, based on Novartis and Acorda, litigants should not expect the PTAB and the district courts to be bound by each other’s validity determinations.