In an unusual fact situation, Judge Andrews of the U.S. District Court for the District of Delaware held that estoppel stemming from a Final Written Decision of the PTAB could arise even if issued after trial where the court has not yet entered final judgment on the relevant ground. Novartis Pharmaceuticals Corp. v. Par Pharmaceutical Inc., Case No. 14cv1289 (D. Del. April 11, 2019).

Plaintiff Novartis Pharmaceuticals had filed three patent infringement suits against Defendant Par Pharmaceutical and related suits against Defendants Breckenridge and West-Ward. Defendants conceded infringement of U.S. Patent No. 5,665,772, but challenged the validity of claims 1-3, 7, and 10 at trial. During litigation, Par challenged claims 1-3 and 8-10 in an IPR proceeding. Par later sought to challenge claim 7, but the PTAB declined to institute on the later-challenged claim.

In March, 2017, the district court found the asserted claims of the ‘772 patent invalid for obviousness-type double patenting, but did not address Defendants’ other obviousness defenses and counterclaims. Novartis appealed. While the appeal was pending, the PTAB issued its final written decision upholding patentability of claims 1-3 and 8-10. In December, 2018, the Federal Circuit reversed the obviousness-type double patenting decision.

On remand, the district court ordered simultaneous briefing on obviousness and estoppel. Novartis filed a motion for a finding that 35 U.S.C. § 315(e)(2) would estop Defendants from raising their obviousness defenses. Defendant Par (the only remaining defendant at the time of the court’s decision) announced that it “takes no position” on the estoppel issue and did not file any briefing addressing obviousness, relying instead on the underlying record in the case.

As a matter of first impression, Judge Andrews held that IPR estoppel could arise even after the district court has held a trial. Based on the language of the statute, the Court concluded that application of IPR estoppel is not dependent on the order in which certain events occur. Specifically, the Court noted that language of the statute broadly prevents a party from asserting certain claims or defenses, and the term “assert” is used in a manner consistent with merely maintaining a claim that has already been asserted. The district court determined that application of estoppel would also be consistent with the provision’s policy objective to promote judicial economy.

Applying that determination to the facts at issue, the district court agreed with Plaintiff’s unopposed argument that each of the obviousness references presented at trial “could reasonably have been raised” in the IPR proceeding. Thus, Defendants were precluded from making an obviousness argument as to claims 1-3 and 8-10. However, since no IPR was instituted with respect to claim 7, IPR estoppel did not apply to that claim. Plaintiff withdrew its infringement contentions as to claim 7 and offered a covenant not to sue on that claim.

Although this decision extends Federal Circuit precedent on estoppel, it is consistent with recent trends in estoppel cases that prioritize judicial efficiency and disfavor granting an accused infringer multiple opportunities to challenge the validity of a patent.