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18 December 2015Big Pharma

CAFC’s affirmation of PTAB Merck patent ruling raises questions

The US Court of Appeals for the Federal Circuit’s affirmation of the Patent Trial and Appeal Board’s (PTAB) decision to invalidate a Merck patent used to reduce homocysteine in the human body faced criticism from a dissenting judge, who claimed the court showed too much deference to the body’s decision.

Yesterday, December 17, Judges Todd Hughes and Sheldon Plager affirmed the PTAB’s decision that patent 6,011,040 was invalid, following a challenge from pharmaceutical company Gnosis that it was obvious.

The patent covers the use of folates to reduce homocysteine, an amino acid, in the human body; an excessive amount of the acid can be the source of neurological and cardiovascular problems for an individual.

Arriving at their conclusion, Hughes, writing the majority opinion, said Gnosis had shown there was “substantial evidence” that the patented method is obvious.

“The PTAB found persuasive evidence that the claimed method of treating elevated levels of homocysteine would have been obvious to a person of skill in light of the prior art ... These findings were supported by substantial evidence and, on balance, provide strong evidence of obviousness,” Hughes concluded.

Judge Pauline Newman, however, disagreed, arguing that the federal circuit showed too much deference to the PTAB’s decision in applying the “substantial evidence review”.

The America Invents Act “established the standard of proof of invalidity to be applied by the PTAB, requiring that invalidity is proved by a preponderance of the evidence, and eliminating any deference to the prior examination and grant of the patent. As an important act of the legislation, the AIA did not adopt the judicial standard of requiring clear and convincing evidence to establish invalidity”.

The preponderance of evidence standard contrasts with the clear and convincing evidence standard applied by district courts when determining whether a patent is obvious. The disparity in the standards in displaying a burden of proof, Newman argued, has created a “powerful incentive to challenge patent validity in the PTAB instead of the district court”.

And for Newman, Congress has required the federal circuit to assess whether the PTAB is correctly applying the preponderance of evidence standard and not apply the substantial evidence review.

“The substantial evidence standard determines whether the decision could reasonably have been made, not whether it was correctly made.

“The PTAB is not an examining body, but an adjudicatory body, an objective arbiter between opposing parties ... My colleagues err in applying deferential review, instead of assuring that the PTAB’s factual findings are supported by the preponderance of the evidence, as the statute requires,” she concluded.

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