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Celgene Corp. v. Peter

Fifth Amendment Does Not Preclude IPR for Pre-AIA Patents

Celgene Corp. v. Peter, __ F.3d __, 2019 WL 3418549 (Fed. Cir. July 30, 2019) (PROST, Bryson, Reyna) (PTAB) (5 of 5 stars)

Fed Cir affirms IPR cancellation of claims as obvious. Celgene’s patents related to the therapeutic use of thalidomide while avoiding the adverse side effects (as seen in the late ’50s and early ’60s) of fetal exposure to the drug. The PTAB did not err in finding Celgene’s claims obvious, and the opinion describes how the record supported the Board’s claim construction and its treatment of the evidence. Inter alia, it rejects Celgene’s argument that there was a tension between the Board’s rejection of Celgene’s arguments for long-felt need and its determination that a person of skill would have had a reason to combine references to as to arrive at the claimed invention. “The fact that there is no long-felt, unmet need does not necessarily mean that there is no motivation to improve a system.” Op. at 16.

Celgene also challenged the decision as unconstitutional because it cancels claims filed before the AIA’s effective date. The Fed Cir exercises its discretion to hear this challenge notwithstanding that Celgene had not raised it to the PTAB. The opinion describes how departure from the general rule of waiver for arguments not raised below is warranted so as to address “an issue not directly resolved by Oil States[, 138 S. Ct. 1365 (2018)].” Op. at 23. It also questions what, if anything, the Board might have done had Celgene raised the issue below.

On the merits, the retroactive application of IPRs to pre-AIA patents is not unconstitutional. The opinion describes how “IPRs do not differ significantly enough from preexisting PTO mechanisms for reevaluating the validity of issued patents to constitute a Fifth Amendment taking.” Op. at 28. It rejects Celgene’s argument that procedural differences between IPR and pre-AIA proceedings justify a different outcome, quoting Denver & Rio Grande W. R.R. Co., 387 U.S. 556 (1967) (“No one has a vested right in any given mode of procedure.”). And differences between IPR and district court proceedings “only serve to demonstrate that IPRs are similar to reexaminations.” Op. at 35.

KEYWORDS: INTER PARTES REVIEW; FIFTH AMENDMENT; OBVIOUSNESS