Intellectual Property Law Knowledge Center

Denying IPR Based on Third Party Litigation Not a Due Process Violation

March 16th, 2021

By Stephen E. Murray

A decision from the Federal Circuit published March 12, 2021 upheld a Patent Trial and Appeal Board (PTAB) order denying institution of an inter partes review (IPR) because a district court case not involving the petitioner was imminently headed to trial.  The case (Mylan Labs. Ltd. v. Janssen Pharmaceutica, N.V., Appeal No. 2021-1071) is another in a long line of challenges to the PTAB’s practice of “discretionary denials” – non-merit based institution denials, such as in circumstances where a co-pending district court litigation may end before a final written decision at the PTAB.

Here, the PTAB denied institution of Mylan’s petition against Janssen’s patent in part because, under the PTAB’s Fintive factors, a case between Janssen and another party, Teva Pharmaceuticals USA, Inc., had overlapping validity issues and was shortly heading to trial.  The Federal Circuit has previously held that decisions denying institution are not appealable, per 35 U.S.C. ¶ 314.  But Mylan argued for mandamus alleging, among other things, the PTAB’s denial in this instance violated Mylan’s due process rights – Mylan is not a party to the Teva litigation but was deprived of its IPR opportunity nevertheless.

The Federal Circuit disagreed, finding Mylan has not been deprived of life, liberty, or property.  The Court noted that Mylan is not bound by the Teva trial result; Mylan has its own co-pending district court litigation and is free to pursue its validity contentions there.  The Court further held that Mylan has “no right to an IPR.”  Slip op. at 13.  Under the statutory framework, the PTAB “is permitted, but never compelled, to institute an IPR.”  Slip op. at 11; see also 35 U.S.C. § 314(a).  As such, the PTAB had discretion to consider the Teva litigation in deciding whether or not to institute Mylan’s petition.

This decision further highlights the importance of filing an IPR early on in any patent dispute.  Not only could a petitioner’s own court case be held against it under the PTAB’s Fintiv factors, but an unrelated third party’s could as well.  The Federal Circuit has shown little interest in disturbing the Fintiv framework, and the recent notice and comment period on the U.S. Patent & Trademark Office’s proposal to codify Fintiv showed the debate is hardly one-sided.  We have yet to see whether the new administration and new Director take a different stance, but for the time being, Fintiv is here to stay and petitioners must take care in avoiding unnecessary delay in filing.

If you have questions about inter partes review or other post-grant proceedings, please contact me or another one of the IP attorneys at Panitch Schwarze at 888.291.5676

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