Opinion ID: 4159750
Heading Depth: 2
Heading Rank: 1

Heading: APA Due Process

Text: We first turn to Novartis’ argument that the Board violated the requirements of notice and an opportunity to respond found in the APA when it used the Sakai reference as part of its motivation to combine analysis in the Final Written Decision. According to Novartis, the Board ruled Sakai entirely out of the case in the Institution Decision, and on that basis, denied institution of the two proposed grounds based on Sakai. Novartis contends that it relied on that ruling and consequently submitted a “vastly different” record than it would have if it had known Sakai was still a live issue. In a formal adjudication, such as an IPR, the APA imposes certain procedural requirements on the agency. The Patent and Trademark Office, including the Board, must provide the patent owner with timely notice of “the matters of fact and law asserted,” and an opportunity to submit facts and argument. 5 U.S.C. §§ 554(b)–(c), 557(c); Dell Inc. v. Acceleron, LLC, 818 F.3d 1293, 1301 (Fed. Cir. 2016). The notice and opportunity to be heard provisions of the APA have been applied “to mean that ‘an agency may not change theories in midstream without giving respondents reasonable notice of the change’ and ‘the opportunity to present argument under the new theory.’” NOVARTIS AG v. TORRENT PHARMACEUTICALS 13 Belden, 805 F.3d at 1080 (quoting Rodale Press, Inc. v. FTC, 407 F.2d 1252, 1256–57 (D.C. Cir. 1968)). In this case we conclude that the relevant APA provisions were satisfied.
We first disagree with Novartis that the Board ruled Sakai out of the case entirely in the Institution Decision. In the Institution Decision, the Board declined to read Sakai as an anticipatory reference or primary obviousness reference because Sakai does not disclose “mannitol as a ‘conventional excipient’ in solid pharmaceutical compositions, and Sakai’s stated reasons for using mannitol in liquid pharmaceutical compositions are inapplicable to its potential use in connection with solid pharmaceutical compositions.” J.A. 72. In other words, although Sakai discloses the combination of fingolimod and mannitol, it does not expressly disclose the combination in a solid pharmaceutical composition nor does its teaching of a liquid composition necessarily translate to a solid oral composition. This conclusion, however, is not contrary to the Board’s discussion of Sakai in the Final Written Decision that Sakai’s teachings would have nevertheless been relevant to one of skill in the art in deciding which excipients to use in formulating a solid oral dosage form of fingolimod. Having already found that Chiba and Aulton strongly suggest the combination of fingolimod and mannitol in a solid oral composition, the Board found that Sakai merely reinforced its finding that the person of ordinary skill in the art would have expected mannitol to be compatible with fingolimod because Sakai discloses a stable combination of these two ingredients suitable for long-term preservation. The Board’s discussion of Sakai in the Final Written Decision was not inconsistent with its review of Sakai in the Institution Decision. 14 NOVARTIS AG v. TORRENT PHARMACEUTICALS
We also reject as unfounded Novartis’ complaints of “surprise” and contention that, following the Institution Decision, the parties “paid Sakai scant attention in subsequent proceedings.” The parties debated Sakai at length throughout the proceeding and in the same context that it was discussed by the Board in the Final Written Decision. As an initial matter, we note that in addition to asserting Sakai as a primary reference, Torrent’s petition also argued that several references, including Sakai, further support the motivation to combine the teachings of Chiba and Aulton. Specifically, Torrent argued in connection with the combination of Chiba and Aulton that “Sakai (Ex. 1005) reinforced the expectation to the ordinarily-skilled artisan that mannitol would have been compatible with FTY720 [fingolimod] because Sakai discloses pharmaceutical injectable compositions containing FTY720 [fingolimod] and mannitol in solution, as well as lyophilized product meant for long-term preservation in vials containing FTY720 [fingolimod] and mannitol.” J.A. 6832. And in support of their petition, Apotex and Mylan also explained that Sakai would direct the person of ordinary skill in the art to the combined teachings of Chiba with Aulton. It reiterated the argument raised in the Torrent petition that the ordinarily skilled artisan would have naturally considered mannitol because of its known compatibility with fingolimod, again citing Sakai’s disclosure of a stable composition comprised of these two ingredients. Following institution of the Apotex/Mylan proceeding and joinder with the Torrent proceeding, the relevance of Sakai’s compatibility-disclosure to support a motivation to combine Chiba and Aulton was an ongoing, debated issue that Novartis addressed directly, on multiple occasions. In its Patent Owner’s Response, Novartis specifically NOVARTIS AG v. TORRENT PHARMACEUTICALS 15 argued that Petitioners’ reliance on Sakai’s stabilitydisclosure in connection with the motivation to combine inquiry lacked merit because Sakai is relevant only to liquid compositions. Petitioners continued to press the issue in their Reply, contending that Sakai “would have provided a [person of skill in the art] with a reasonable expectation that mannitol is compatible with fingolimod.” J.A. 7782. Furthermore, both Petitioners’ expert and Novartis’ expert went into significant detail in their post-institution declarations discussing Sakai and its applicability to the motivation to combine inquiry. Novartis’ counsel then questioned Petitioners’ expert at length about Sakai. And Novartis’ submitted Observations on Cross Examination repeatedly explained why Sakai did not support Petitioners’ motivation to combine argument. At the hearing, both parties submitted demonstrative slides dedicated to Sakai and spent considerable attention discussing Sakai’s relevance as a background reference supporting the motivation to utilize mannitol with fingolimod in an oral formulation. Based on this record, it is quite clear that Novartis had more than sufficient notice and opportunity to be heard on Sakai’s potential relevance, and in fact actively and repeatedly attempted to distinguish Sakai to defeat the very argument relied on by the Board in the Final Written Decision. In sum, we reject Novartis’ contention to this court that it believed Sakai was not at issue in the proceeding. 2 For this reason we reject Novartis’ APA challenge. 2 Indeed, had Novartis believed the Board eliminated Sakai from the proceeding, it had various procedural mechanisms at its disposal to respond to any perceived impropriety with Petitioners’ continued reliance on the reference. In particular, Novartis could have moved to 16 NOVARTIS AG v. TORRENT PHARMACEUTICALS
Finding no APA violation for the reasons discussed above, we nevertheless also reject Novartis’ characterization of Sakai as the “missing link” in the Board’s obviousness analysis. Contrary to Novartis’ contention, Sakai was discussed by the Board as one of several independent grounds supporting the motivation to combine fingolimod and mannitol in a solid oral composition. In finding a motivation to combine, the Board explained that the teachings of Chiba and Aulton alone “already strongly exclude the Sakai reference. See Genzyme Therapeutic Prods. v. Biomarin Pharm. Inc., 825 F.3d 1360, 1368 (Fed. Cir. 2016). We find meritless Novartis’ argument that it did in fact move to exclude Sakai from the proceeding. See Oral Arg. at 53:30–53:51: available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20 16-1352.mp3. Although not provided in the Joint Appendix, Novartis’ counsel invited the court to review its motion to exclude. That invitation, unfortunately, led the court on a road to nowhere. In its motion, Novartis moved to exclude over fifty exhibits, including Sakai, all identified by exhibit number only and listed in one long string cite, based on one conclusory sentence: “Petitioners rely on numerous exhibits that are incomplete and/or irrelevant to the sole issue for review identified by the Board – i.e., (non)obviousness of the ’283 Patent in light of Chiba over Aulton).” Patent Owner’s Motion to Exclude at 20, Paper No. 73. This superficial treatment amounts to little more than a request that the Board peruse the cited evidence and piece together a coherent argument on Novartis’ behalf. It is far from sufficient to raise a meaningful challenge to any of the several dozen exhibits, let alone to sensitize the Board to the complained-of use of Sakai in particular. NOVARTIS AG v. TORRENT PHARMACEUTICALS 17 suggests that mannitol likely would have been a target of investigation for a person of ordinary skill in the art interested in finding an excipient compatible with fingolimod.” Final Written Decision, 2015 WL 5719630, at . Nevertheless, the Board continued to bolster its analysis with “additional evidence of the reason to combine fingolimod and mannitol.” Id. And Sakai’s teaching to combine fingolimod and mannitol was just one of those additional reasons. The Board further explained that “[i]n addition to the direct teaching in Sakai that mannitol and fingolimod should be combined, several documents that would have been known to a person of ordinary skill in the art teach that mannitol provides advantages when used as a diluent in tableting.” Id. at . The Board went on to explain that these references—all unchallenged on appeal—describe known advantages of using mannitol as an excipient in solid oral compositions that “provide a strong reason to combine Chiba’s teaching of a solid oral dosage form of fingolimod and Aulton’s teaching of mannitol as an excipient for making solid oral dosage forms.” Id. These additional references are also substantial evidence supporting the Board’s motivation to combine conclusion, independent of Sakai. This is not a case where Sakai provided the linchpin of the Board’s analysis, as Novartis contends. For all these reasons, we find no violation of the APA with respect to the Board’s discussion of Sakai in the Final Written Decision.