Federal Circuit hands PTAB win to Kyle Bass

The US Court of Appeals for the Federal Circuit has affirmed a Patent Trial and Appeal Board (PTAB) decision to invalidate a patent after a coalition formed by Kyle Bass requested a review.

Yesterday, the Federal Circuit backed an inter partes review (IPR) which found that US patent number 7,582,621, called “Boron-containing small molecules”, was unpatentable for obviousness.

The patent is directed to the use of tavaborole, which is used treat a fungal infection known as onychomycosis, a disease of the nail that is responsible for approximately half of all nail disorders in humans.

Anacor Pharmaceuticals, a biopharma company acquired by Pfizer, is the owner of the patent.

In 2015, the Coalition for Affordable Drugs (which was founded by Bass) requester an IPR of all 12 claims of the ‘621 patent.

The PTAB found that the claims would have been obvious in light of the combination of international patent application number PCT/GB95/01206 (Austin) and US patent application number 10/077,521 (Brehove).

Both Austin and Brehove teach the “use of boron heterocycles as antifungal agents that inhibit C. albicans, among other fungi”. Boron heterocycles are organic compounds that contain both boron and carbon in a ring structure.

In its appeal against the decision, Anacor argued that the PTAB had violated due process and the procedural requirements of the Administrative Procedure Act (APA) by failing to provide it with adequate notice of, and an opportunity to respond to, the grounds of rejection adopted by the board.

Anacor claimed that Bass’s organisation had abandoned Brehove in its reply and shifted to a new theory of invalidity (relying on Austin in light of a study and an article) and that the PTAB had adopted a new theory of invalidity without giving Anacor an opportunity to respond.

“We reject Anacor’s argument that the board violated the APA or due process by adopting a new theory of obviousness not presented in the petition,” said Circuit Judge William Bryson, on behalf of the Federal Circuit.

He added: “Unlike in In re NuVasive (2016), on which Anacor relies, the board’s final written decision was based on the same combination of references—Austin and Brehove—and the same series of inferences that the petition proposed.”

The Federal Circuit rejected Anacor’s contention that the PTAB had improperly relied on the new evidence which was not cited in the petition.

Bryson explained: “There is, however, no blanket prohibition against the introduction of new evidence during an IPR proceeding.”

The Federal Circuit also rejected Anacor’s challenge against what it claims was the board’s “conclusion that the compounds of Austin are ‘structurally similar’ to the compounds of Brehove”.

The Pfizer subsidiary claimed that the compounds are structurally dissimilar, and that a person of ordinary skill in the art would have “expected that even small structural differences between tavaborole and the Brehove compounds would result in significant differences in their chemical and biological properties”.

According to the Federal Circuit, Anacor’s argument was premised on the “misapprehension” that the PTAB viewed structural similarity as a binary factor.

Bryson concluded that the PTAB did not disregard the structural differences or “attribute undue significance” to their structural similarities.

The Federal Circuit rejected Anacor’s challenges to the PTAB’s reasoning and upheld the conclusion that claim 6 of the patent was invalid for obviousness.

A spokesperson for Pfizer said: “We are disappointed that the Federal Circuit has affirmed the PTAB decision invalidating the ‘621 patent. We are reviewing the decision and considering our options.”

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