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Mylan, Janssen Face Flurry of Questions on Patent Review Appeals

Feb. 12, 2021, 6:28 PM

A three-judge Federal Circuit panel seemed skeptical during oral argument in a case over Mylan Laboratories Ltd.‘s desire to market a generic version of Janssen Pharmaceutical N.V.‘s schizophrenia drug of never being able to vet Patent Trial and Appeal Board decisions on whether to review patents.

Judges Pauline Newman, Kimberly A. Moore, and Kara F. Stoll all suggested that PTAB institution decisions should be appealable—if there’s a true constitutional violation—during argument on Janssen’s motion to dismiss an appeal. But they questioned whether Mylan’s argument rose to that level.

Mylan appealed a board decision applying its NHK-Fintiv rule in refusing to review Janssen’s patent because of a looming district court trial in a case against another would-be generic maker, Teva Pharmaceuticals USA Inc.

The rare oral argument on a motion to dismiss gives the court an opportunity to decide whether the bar on appealing PTAB institution decisions means it doesn’t have jurisdiction to review the board’s use of the rule. The NHK-Fintiv rule concerns when the board should deny inter partes review if parallel litigation is pending.

Due Process Problem?

“When the PTAB is considering a third-party litigation, whereby I have no rights, no control whatsoever over, and that litigation is the primary driving force for why the current IPR was denied, that is a due process violation,” Deepro Mukerjee of Katten Muchin Rosenman LLP in New York argued for Mylan.

“I’m having a hard time seeing it as a colorable due process claim,” Stoll said. “What exactly is the property right that you’re being denied?”

“I’m not sure that a due process violation necessarily must mandate an actual deprivation of property,” Mukerjee answered.

“Did you just answer Judge Stoll’s question by saying you don’t believe you have to have any sort of property right to have a due process violation, and if so, what line of cases are you relying on?” Moore asked.

“I am happy to get back to you on that, but I do feel like this is in some ways a case of first impression,” Mukerjee said.

Safety Valve

Janssen’s attorney, Pratik Shah of Akin Gump Strauss Hauer & Feld LLP in Washington, argued Mylan was “dressing up its claim in constitutional garb” as a way to save the appeal, when institution decisions are never reviewable.

“What if the PTO clearly made a constitutional violation in its non-institution decision—wouldn’t there have to be some place that the petitioner could go to seek help from the court?” Stoll asked.

“If there was a situation of a clear flagrant constitutional violation, say racial animus or something, in an institution decision, I think mandamus would provide that safety valve,” Shah said. But Mylan’s due process claim doesn’t rise to that level because Mylan has nothing at stake, he said.

Justice Department attorney Melissa Patterson, arguing for the U.S. Patent and Trademark Office, gave the example of the agency denying an IPR because the patent was owned by a woman, based on a policy of promoting female patent ownership.

Moore said that was an apt example, given the all-female make-up of the Federal Circuit panel and that Patterson is also a woman.

Although Mylan hadn’t asked for the court to consider its appeal as a request for mandamus, Moore told Patterson that, “assuming the Mylan attorney isn’t a complete fool,” he’ll ask for it in the next 15 minutes.

When Mukerjee didn’t asked for mandamus outright, Moore said, “We’re so many minutes into your argument. Out of curiosity, are you intending to request mandamus relief?”

Mukerjee said it wasn’t necessary, and Moore asked, “Did you listen to the rest of the arguments?” He finally answered that Mylan was in fact asking for mandamus relief.

The court’s decision will turn only on whether it has jurisdiction to consider the case. If it does, a different panel will hear argument on the merits.

The case is Mylan Labs. Ltd. v. Janssen Pharm., N.V., Fed. Cir., No. 21-1071, argued 2/12/21.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Keith Perine at kperine@bloomberglaw.com