Stay On Target: Despite District Court’s Indefiniteness Ruling, PTAB Maintains IPR Proceeding
Addressing the interplay between a district court’s indefiniteness determination and a pending inter partes review (IPR) proceeding, the Patent Trial and Appeal Board (PTAB) denied a patent owner’s motion to terminate the pending IPR. The PTAB found that the district court’s indefiniteness inquiry required determination of the full scope of the claims, whereas the PTAB’s inquiry turned on whether a patent claim was anticipated or obvious. Mylan Pharms. v. Horizon Pharma USA, Case Nos. IPR2017-01995, IPR2018-00272, IPR2018-01341 (PTAB Mar. 28, 2019) (Dennett, APJ).
Horizon Pharma sued Mylan in the District of New Jersey. While the lawsuit was pending, Mylan filed IPR petitions against the asserted patents. In the district court, Mylan argued that the term “target” was indefinite because the scope of the claims could not be determined with reasonable certainty. The district court agreed, first construing the term “target” to mean “set as a goal” and then, under this construction, determining that the claims were indefinite under § 112 because they failed to inform the public of how to act to avoid infringement.
At the PTAB, Mylan did not argue indefiniteness, and the PTAB instituted review. In particular, the PTAB did not conclude that the term “target” was unclear or incapable of delineating the scope of the challenged claims in view of the prior art. Instead, the PTAB construed the term “target” under the broadest reasonable interpretation, applied this construction to the references outlined in the petition, and determined a reasonable likelihood of success.
Horizon argued that because the PTAB is limited in an IPR to determining invalidity under § 102 and/or § 103, the PTAB could not maintain this proceeding where the district court had already found—at the urging of Mylan—the claims indefinite under § 112. Horizon also argued that termination would save judicial resources, because the district court already determined the claims to be invalid.
The PTAB disagreed. Acknowledging its inability reach patentability under § 112, the PTAB nevertheless concluded that the district court’s § 112 determination did not preclude it from assessing the patentability of the claims over the prior art. In particular, this was not a case where an ambiguous term had two different meanings, making it impossible to determine which meaning to apply to the prior art. The PTAB reasoned that the district court’s review is from the perspective of infringement—an exercise that requires the district court to determine the full scope of the claims. By contrast, the PTAB’s focus is on patentability based on the prior art references presented in the petition. From this perspective, the PTAB need not determine the “outer boundaries” of a claim to determine whether the prior art renders a claim anticipated or obvious. Because the PTAB is not required to make the same determinations as the district court, the PTAB denied Horizon’s motion to terminate.
The PTAB also rejected Horizon’s argument that termination would result in judicial efficiency. The PTAB reasoned that termination would be wasteful in view of the significant resources already spent at the PTAB. Even though Horizon appealed the district court’s interpretation of “target” to the US Court of Appeals for the Federal Circuit, the PTAB’s final determination would issue before the Federal Circuit’s decision.
Practice Note: This IPR is pending under the prior rules, allowing the PTAB to use a different claim construction standard, the broadest reasonable interpretation, as compared to the district court’s Phillips standard. With the PTAB now applying the Phillips standard, this decision may have limited applicability to newly filed IPRs.