Refusal to institute IPR based on reference does not preclude use of reference for motivation to combine

Federal CircuitNovartis AG v. Torrent Pharms. Ltd., (Fed. Cir. Apr. 12, 2017) (Before Taranto, Chen, and Stoll, J.) (Opinion for the court, Chen, J.).

The Federal Circuit affirmed a Patent Trial and Appeal Board (“Board”) decision finding a patent owned by Novartis AG and Mitsubishi Tanabe Pharma Corp. (collectively “Novartis”) to be unpatentable as obvious.

The Novartis patent “relates to a solid pharmaceutical composition suitable for oral administration.”  The drug comprises a sphingosine-1 phosphate (S1P) receptor agonist and a sugar alcohol, which is useful for certain autoimmune diseases, e.g. multiple sclerosis. A “particularly preferred” S1P receptor agonist is fingolimod and the sugar alcohol “may suitably be mannitol.” The patent has two independent claims: Claim 1 recites a solid oral composition comprising one of a handful of S1P receptor agonists and any sugar alcohol. Claim 19 recites the combination of fingolimod and mannitol in a solid oral composition.

Torrent Pharmaceuticals Ltd. (“Torrent”) filed an IPR petition challenging all claims of the Novartis patent, presenting three grounds involving three prior art references. Torrent alleged that (1) all claims are unpatentable as obvious over Chiba and Aulton, (2) several claims are unpatentable as anticipated by Sakai, and (3) all claims are unpatentable as obvious over Chiba and Sakai. “Chiba teaches a solid oral composition of fingolimod combined with a generic excipient”; “Aulton teaches the use of tablets and capsules to administer drugs orally” and recommends mannitol as a diluent; and “Sakai teaches the specific combination of fingolimod and mannitol for a liquid formulation.” The Board instituted review of the Novartis patent on the combination of Chiba and Aulton but declined review on the second and third grounds, finding (i) Sakai to be an improper prior art reference because it does not describe a suitable solid, oral composition and (ii) Sakai’s stated reasons for using mannitol in liquid compositions are inapplicable to the use of mannitol in solid compositions.

The Board found the combination of Chiba and Aulton to teach every limitation of each claim in the Novartis patent. The Board discussed “‘additional evidence of the reason to combine fingolimod and mannitol,’” citing the Sakai reference, Novartis’ own expert, and “several additional background references.”  The Board distinguished its usage of Sakai, explaining that although it denied instituting the IPR based on Sakai, it offers additional evidence of motivation to combine Chiba with Aulton, as background regarding the state of the art.


The Board rejected Novartis’ claims of objective indicia of nonobviousness. Novartis claimed it achieved unexpected results relating to fingolimod’s low concentration stability when combined with mannitol, but the Board found that independent Claims 1 and 19 are “‘not commensurate in scope’ with the purported unexpected result . . . because the independent claims are ‘not limited to any particular dose or dose range of fingolimod.’” The Board also rejected Novartis’ long-felt but unsolved need, industry praise, and commercial success arguments, finding that all “proffered evidence was directed solely to the fact that Gilenya was a solid oral multiple sclerosis treatment, which was already known in the prior art.” Turning finally to the dependent claims and Novartis’ proposed amended claims, the Board found that the evidenced tended to show “‘that the selection of the relative amounts of the constituents of the claimed formulation is the result of routine optimization.’”

On appeal, Novartis argued that (i) the Board violated the Administrative Procedure Act (“APA”) by relying on Sakai in its decision without providing Novartis proper notice and an opportunity to respond, (ii) the Board erred in its motivation to combine analysis, and (iii) the Board erred in its analysis of the alleged objective indicia of obviousness.

Turning first to Novartis’ APA due process claim, the Court explained that 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 arguments.” The Board “‘may not change theories midstream without giving respondents reasonable notice of the change’ and ‘the opportunity to present arguments under the new theory.’” However, the Board’s reliance on Sakai was permissible and not contrary to its decision not to institute the trial based on Sakai as an anticipatory or obviousness reference. The Court explained, “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 Court reiterated the Board’s explanation that the combination of Chiba and Aulton alone “already strongly suggests” the combination of mannitol with fingolimod, and the Board bolstered its analysis with “additional evidence of the reason to combine fingolimod and mannitol,” including Sakai. Additionally, a substantial portion of the record was dedicated to “discussing Sakai and its applicability to the motivation to combine inquiry” and that “it is quite clear [from the record] 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.”

Motivation to combine and objective indicia of nonobviousness are based on underlying facts, which the Court reviews for substantial evidence. The Court found the Board’s conclusion regarding motivation to combine to be supported by substantial evidence. “The record reflects that the Board considered Novartis’ arguments regarding motivation to combine, weighed them against the competing evidence and argument, and concluded that . . . one of skill in the art would have been motivated to combine fingolimod with mannitol in a solid composition.”

Substantial evidence also supports the Board’s conclusion regarding objective indicia of nonobviousness. With respect to unexpected results, the Court found that Novartis failed to preserve this argument for appeal. Before the Board, “the undeniable focus of Novartis’ arguments throughout the proceeding . . . was the patentability of the combination of fingolimod and mannitol, as broadly recited in claim 19,” whereas on appeal, Novartis claimed that “the Board erred when it grouped several dependent claims with their independent claims when considering Novartis’ unexpected results evidence.” Because the Court found “no evidence that Novartis distinctly argued an unexpected result specific to the dependent claims,” the Court found that Novartis had waived that argument.

Novartis’ final argument contended the Board wrongly discounted evidence showing that Novartis’ drug, Gilenya, enjoyed commercial success, industry praise, and met a long-felt but previously unsolved need. Novartis argued that Gilenya achieved all of these things because it was the first commercially available solid oral treatment for multiple sclerosis and that the Board erred in its rejection of this proffered nexus between the patented invention and the objective indicia. The Court disagreed, explaining that if objective indicia “is due to an element in the prior art, no nexus exists.” Here, the Court agreed that “Novartis’ nexus argument for its objective indicia evidence is based solely on a single premise—Gilenya being the first commercially-available solid oral multiple sclerosis treatment. The treatment of multiple sclerosis with a solid oral composition, however, was indisputably known in the prior art.” That is, that the fact that Gilenya was the first to receive FDA approval for commercial marketing is of no consequence, as the claimed subject matter was known in the prior art.

Refusal by the Board to institute an IPR based on a particular reference does not necessarily preclude the Board from relying on that reference as additional support for a motivation to combine other references. Separate patentability arguments for dependent claims must be clearly argued lest they stand or fall with parent claims. A nexus for non-obviousness due to commercial success must clearly flow from the patented invention and not from subject matter known in the prior art.



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