Everolimus – USA

Everolimus – USA

On Apr 11, 2019 Delaware court granted Novartis’ motion for estoppel under 35 U.S.C. § 315(e)(2) & prevented Par from pursuing an invalidity defense under§ 103 on claims 1-3 and 8-10.
Background:

Novartis Pharmaceuticals (Plaintiff) filed suit against Par/ Breckenridge (Defendants) for U.S. Patent No. 5,665,772 (03/09/2020 with PED). US’772 patent claims compound & method of use of same. Before trial, Par conceded that their proposed products meet all limitations of the ‘772 patent. At trial, Defendants challenged the validity of claims 1-3, 7, and 10 of the ‘772 patent on obviousness grounds, citing twenty-seven pieces of prior art. While litigation was pending, Par challenged claims 1-3 and 8-10 of the ‘772 patent in an IPR proceeding (IPR2016-00084). The PTAB instituted the IPR on April 29, 2016. On March 28, 2017, Delaware court issued an opinion, determining that the asserted claims of the ‘772 patent were invalid for obviousness-type double patenting. Court did not address Par’s obviousness defenses or counterclaims. On January 11, 2018, while the appeal was pending on the obviousness-type double patenting decision, the PTAB issued a final written decision in IPR upholding the patentability of claims 1-3 and 8-10 of the ‘ 772 patent. The Federal Circuit on Dec 7, 2018 later reversed the obviousness-type double patenting decision. When it remanded case back to the Delaware court, Novartis raised the possibility that 35 U.S.C. § 315(e)(2) would estop Par’s obviousness defenses and counterclaims based upon the final written decision of the IPR. Defendants raised several objections to the application of IPR estoppel. Defendants also raised an objection to the application of IPR estoppel after the district court has held trial.
Analysis:

35 U.S.C. § 315(e)(2) provides:
The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) … may not assert in either a civil action arising in whole or in part under section 1338 of title 28 … that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter parties review.

Court said that the plain language of the statute does not indicate that Congress intended for there to be a time limitation upon the estoppel effect of a final written decision of an IPR. 35 USC 315(e)(2) is directed at claims or defenses that could be raised in a judicial proceeding and not the proceeding itself. Therefore, § 315(e)(2) uses the term “assert,” which does not indicate a time limitation. Thus, the plain language of the statute, along with the previously discussed policy objectives of judicial economy, indicates that IPR estoppel will still apply post-trial where the Court has not entered a final judgment on the relevant ground.

Now the question is whether estoppel should apply to the twenty-seven references put forward by Defendants at trial. Plaintiff argued that the twenty-seven trial references all “could reasonably have been raised” in the IPR proceeding because they were used in the September 2016 trial which occurred before the reply due date in the IPR. Court held that given their use at trial, it is apparent that a diligent search would have revealed these references and therefore they “could have been raised” at the IPR proceeding. Thus, Defendants are precluded from pursuing a § 103 invalidity argument as to the ‘ 772 patent claims 1-3 and 8-10.
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