While reversing a Patent Trial and Appeal Board (PTAB) decision that confirmed the validity of a patent, the US Court of Appeals for the Federal Circuit ruled that a post-grant review (PGR) petitioner has Article III standing to appeal a PTAB decision where the petitioner demonstrates an intent to file an abbreviated new drug application (ANDA) for the patented product at some point in the future. Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., Case No. 17-1487 (Fed. Cir., May 2, 2018) (Wallach, J). The Federal Circuit also ruled that the PTAB abused its discretion by failing to assign proper weight to witness testimony corroborating technical data while determining obviousness for validity purposes.
In 2011, Altaire Pharmaceuticals and Paragon Bioteck entered into an agreement to pursue US Food and Drug Administration approval for Altaire's products. According to the agreement, Paragon was responsible for preparing and submitting the new drug applications in support of the products, and Altaire would provide and bear the costs for the chemistry manufacturing and controls in support of the filing. Without participation or approval from Altaire, Paragon filed and received a patent related to ophthalmic use of a composition including phenylephrine of "chiral purity" greater than or equal to 95 percent. Altaire petitioned the PTAB for PGR, arguing that the patent's claims were obvious under products Altaire already manufactured. The PTAB instituted PGR, but found that Altaire failed to prove obviousness because Altaire did not timely qualify its witness as an expert, and thus the PTAB did not consider the declarations of the witness or Altaire's submitted test data as corresponding with the declarations. Altaire appealed.
On appeal, the Federal Circuit first addressed Altaire's standing to appeal the PTAB's decision. The Federal Circuit emphasized that in order to have standing, an appellant "must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged [action], and (3) that is likely to be redressed by a favorable judicial decision." The suffered injury must be concrete and particular. The Federal Circuit found that Altaire carried its burden to show a concrete, particularized injury when Altaire confirmed it would file an ANDA in the near future and therefore be subject to patent infringement suit filed by Paragon. Even though Altaire and Paragon were operating under an agreement, the Federal Circuit found that such injury was inevitable because the existence of the patent was an obstacle to Altaire's commercial plans and estoppel would attach from Altaire's participation in the PGR.
The Federal Circuit next addressed the PTAB's finding of non-obviousness. The Court found that the PTAB abused its discretion by failing to assign weight to Altaire's witness testimony concerning the chirality of certain products manufactured by Altaire and given to Paragon prior to Paragon's filing date. The Court emphasized that the PTAB rule governing the use of technical test and data in PTAB proceedings does not require declarations from experts to corroborate technical data. Thus, the Court remanded the case to the PTAB to reconsider its conclusion that certain tests submitted by Altaire were insufficient to show that Paragon's patents were obvious in light of Altaire's manufactured products.
Petitioner Has Standing When Injury Is Imminent
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