Source: http://www.klgateshub.com/details/?pub=A-Petitioners-Dilemma-in-Post-Grant-Reviews-06-05-2018
Timestamp: 2019-04-18 18:19:07+00:00

Document:
5 June 2018 Authors: Jackson Ho, Ph.D.
The patent at issue, U.S. Patent No. 8,859,623 (“the ‘623 patent”), is directed to a phenylephrine solution used to dilate a patient’s pupils. Phenylephrine exists in two chiral forms, S- and R-phenylephrine hydrochloride, but only the R-form is useful to dilate pupils.  Altaire had been producing substantially pure R-phenylephrine solutions since as early as 2000 . In 2011, Altaire and Paragon Biotek, Inc. (“Paragon”) entered into an agreement to submit a new drug application (“NDA”) for Altaire’s products . According to the agreement, Paragon was to prepare the documents necessary for the filing and Altaire was to provide the chemistry, manufacturing, and controls to support the NDA filing .
After Paragon submitted the NDA, the Food and Drug Administration recommended that Paragon add a chiral purity test to the drug specification. Altaire ran the purity test and provided a summary of the results to Paragon . Afterwards, Paragon filed a patent application directed to a phenylephrine solution with a certain level of chiral purity, which eventually issued as the ‘623 patent, without assigning any rights to Altaire.
In April 2015, Altaire and Paragon had a dispute over their agreement, which resulted in Altaire suing Paragon in U.S. District Court in New York alleging that Paragon breached the nondisclosure clause in the agreement. Paragon responded by alleging that Altaire materially breached the nondisclosure clause in the agreement and that Paragon had the right to terminate the agreement .
In May 2015, Altaire petitioned for PGR of the ‘623 patent arguing that the ‘623 patent was obvious based on prior existing lots of phenylephrine solution . The Patent Trial and Appeal Board (“PTAB”) instituted review but ultimately found that Altaire failed to show that the ‘623 patent was obvious because Altaire had failed to timely qualify its expert. Altaire appealed to the Federal Circuit .
Article III standing requires that an appellant/petitioner have suffered an “injury in fact.”  In order to establish injury in fact, a litigant must show that they suffered invasion of a legally protected interest that is concrete and particularized, and actual or imminent, not conjectural or hypothetical .
The majority further commented that PGR estoppel compounded Altaire’s injury. It noted that PGR estoppel likely precludes Altaire from arguing that the ‘623 patent is obvious over Altaire’s prior manufactured products because a petitioner in a PGR is estopped from arguing any ground of invalidity in a subsequent court action that could have reasonably been made during the PGR . The court distinguished prior cases Phigenix and Consumer Watchdog  from the Altaire case because Altaire’s injury was imminent .
Regarding the substance of the appeal, the Federal Circuit reversed the PTAB decision, holding that the PTAB abused its discretion in refusing to consider Altaire’s expert’s testimony because of alleged noncompliance with procedural rules .
Judge Schall dissented from the majority opinion that Altaire had standing because Judge Schall believed the harm to Altaire was not imminent. First, Judge Schall argued that being sued for patent infringement in three years’ time, after the agreement between the parties naturally terminates in 2021, cannot support a finding that the harm is imminent . Second, Judge Schall argued that Paragon’s right and ability to terminate the agreement before 2021 is contingent upon Paragon winning its case in District Court and therefore any harm to Altaire before 2021 is speculative because it may not occur if Altaire wins in District Court .
PGRs can only be filed within a nine month window starting from the issuance of the patent . This limited time window coupled with the Federal Circuit’s Article III standing requirements puts certain would-be PGR petitioners in a difficult position. The Altaire case exemplifies the dilemma. Altaire’s only option for challenging the ‘623 patent at the PTAB based on its prior phenylephrine products was to file a PGR since inter partes review can only be based on written prior art, but with a limited nine-month window, Altaire could not wait for an actual injury to materialize. Altaire was thus forced to choose foregoing PGR entirely or filing a PGR and risk losing at the PTAB, being estopped from raising those arguments in later infringement litigation and having no standing to appeal. Altaire chose the latter and fortunately for Altaire, the Federal Circuit held Altaire had standing to appeal.
 Any person who is not the patent owner may file a petition to institute a post-grant review. 35 U.S.C. § 321(a). However, the Constitution confines Article III courts to deciding actual “Cases” or “Controversies.” U.S. Const. art. III, § 2.
 No. 2017-1487, 2018 WL *2167293 (Fed. Cir. May 2, 2018).
 See Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168 (Fed. Cir. 2017).
 Altaire, 2018 WL *2167293 at 4.
 The court declined to address the alleged reputational injury to Altaire.
 Altaire, 2018 WL *2167293 at 5.
 The Federal Circuit may further clarify the significance of a future planned ANDA filing to the standing issue in Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Company (No. 17-1694, filed Feb. 22, 2017, argued Dec. 5, 2017).
 Id. (quoting Prasco LLC v. Medics Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008)).
 Id. (quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016)).
 Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014).

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