Addressing issues of motivation to combine and whether the Patent Trial and Appeal Board (PTAB) is bound by district court decisions of obviousness, the US Court of Appeals for the Federal Circuit found that the PTAB is not so bound, affirming the PTAB's finding of obviousness. Novartis AG, et al. v. Noven Pharmaceuticals Inc., Case Nos. 16-1678; -1679 (Fed. Cir., Apr. 4, 2017) (Wallach J).
Novartis AG owns two patents for a transdermal drug patch containing rivastigmine. The patents were challenged in inter partes review (IPR), where the PTAB found the challenged claims unpatentable as obvious under § 103. By contrast, in a concurrent litigation, a district court analyzed the same arguments and prior art, and found the patents to be valid. Novartis appealed to the Federal Circuit, arguing that under Federal Circuit precedent, prior judicial decisions control the PTAB's findings, and that the PTAB failed to show any motivation to combine the prior art.
Regarding Novartis's argument that the PTAB should have been bound by the prior district court decision, the Federal Circuit disagreed on both factual and legal grounds. Factually, while the previous case may have been "substantively the same," the presence of an additional piece of prior art and new declaratory evidence undercut Novartis' argument that the facts were entirely the same. As the Court explained, different records may lead to different findings and conclusions. Legally, even had the records been exactly the same, the PTAB reviews patentability issues using a preponderance of evidence standard, while district courts require clear and convincing evidence to invalidate a patent. While the same evidence and argument will ideally result in the same findings, under the lower standard there is no mandate that the PTAB reach the same conclusion as a district court.
Novartis also argued that the PTAB erred by concluding that adding antioxidants to an acrylic polymer drug patch to prevent the degradation of the drug rivastigmine would have been obvious. Novartis argued that without any evidence of rivastigmine's oxidative degradation, a person having ordinary skill in the art (PHOSITA) would not have been motivated to include an antioxidant to stabilize the rivastigmine in a transdermal patch. While the prior art taught that antioxidants can forestall the breakdown that occurs when drugs are exposed to acrylic polymers, such as those in a patch, there was no express teaching that rivastigmine breaks down. But the Court pointed out that prior art does not have to explicitly disclose a motivation to combine. Furthermore, the PTAB had reasonably concluded a PHOSITA's level of skill would include organic chemistry training for analyzing and recognizing compound characteristics. That training would have allowed a PHOSITA to understand that rivastigmine had the potential to oxidatively degrade because of its chemical structure. That knowledge would motivate the PHOSITA to add antioxidants. Although Novartis argued that its expert's testimony countered this argument, the Court would not give the expert evidence more weight than the PTAB already had.
District Court Ruling on Obviousness Does Not Bind PTAB
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