Federal Circuit Certifies AbbVie’s Constitutional Challenge in Consolidated Adalimumab IPR Appeals to U.S. Attorney General

As we previously reported, currently pending before the Federal Circuit are consolidated appeals from five final written decisions of the Patent Trial and Appeal Board (Board) in inter partes review (IPR) proceedings finding the claims of AbbVie’s U.S. Patent Nos. 8,889,135, 9,017,680, and 9,073,987 unpatentable for obviousness in view of the prior art.  In its appellate briefs, AbbVie challenges the Board’s rulings on the merits, as well as on constitutionality grounds.

Although the consolidated appeals have been fully briefed for nearly six months, the Federal Circuit still has not scheduled the case for oral argument.  Rather, today, the Federal Circuit issued a sua sponte order staying the appeal and certifying AbbVie’s constitutional challenge to the U.S. Attorney General, with the instruction to inform the Court within 30 days whether the United States intends to intervene in the appeals.  The Court’s order does not express any views on the merits of AbbVie’s constitutional challenge and explains that the Court was required by law to certify the challenge to the Attorney General in response to receiving formal notice from AbbVie of its constitutional challenge.  Below is a summary of these pending appeals.

The IPR Petitions:  In late 2015, Coherus filed an IPR petition against each of the ’135, ’680 and ’987 patents, and Boehringer Ingelheim (BI) filed two IPR petitions against the ’135 patent.

AbbVie’s three challenged patents are generally directed to methods for treating rheumatoid arthritis (RA) by subcutaneous (SC) administration of the antibody D2E7 (i.e., adalimumab) in a total body dose of 40 mg once every 13-15 days (biweekly).  Certain claims of the ’135 patent recite an administration period of at least 24 weeks. The claims of the ’680 patent additionally recite the administration in combination with methotrexate.

In mid-2016, the Board instituted each of these five IPRs: IPR2016-00172 (Coherus re: ’135 patent), IPR2016-00188 (Coherus re: ’680 patent), IPR2016-00189 (Coherus re: ’987 patent), IPR2016-00408 (BI re: ’135 patent), IPR2016-00409 (BI re: ’135 patent).

The Board’s Ruling:  In mid-2017, after the oral hearings of these IPRs, the Board ruled in favor of the petitioners in each of the five proceedings, finding all claims of the ’135 patent, ’680 patent and ’987 patent unpatentable based on obviousness over the prior art.  The Board found that a person of ordinary skill in the art would have been motivated to develop and administer D2E7 according to the claimed regimen, including for a period of at least 24 weeks and in combination with methotrexate, with a reasonable expectation that it would successfully treat RA.  The Board reasoned that the prior art reported clinical trials showing that biweekly 40 mg intravenous (IV) doses of D2E7 were effective in treating RA, that weekly 20, 40 and 80 mg SC doses were effective in treating RA, and that SC administration was comparable to IV administration.  AbbVie tried to defend the patentability of the claims by arguing, among other things, that the prior art taught away from using a 40 mg SC dose, particularly for a period of at least 24 weeks, and that the commercial success of Humira® (adalimumab) constituted a compelling objective indicium of non-obviousness.  The Board, however, found that the prior art did not teach away from the claimed invention and that AbbVie failed to establish a nexus between the alleged commercial success and the claimed dosing regimen.

AbbVie’s Appeal:  In July 2017, AbbVie appealed to the Federal Circuit from the Board’s five unfavorable final written decisions. The five appeals were consolidated later that year, with Federal Circuit Case No. 17-2304 constituting the lead case.

On December 13, 2017, AbbVie filed its opening appellate brief, addressing all of the IPR decisions.  AbbVie contended that the Board’s obviousness determinations were based on legal error because, among other things, the Board (i) relied on hindsight analysis, (ii) improperly shifted the burden of persuasion from the petitioners to AbbVie, (iii) failed to consider the claims as a whole, (iv) applied the wrong legal standard for one obviousness combination, and (v) unconstitutionally subjected the challenged patents to IPR proceedings.

Specifically, AbbVie argued that despite the wide range of possible approaches to treating RA with D2E7 presented by the prior art, the Board arbitrarily focused only on doses at the lowest end of what was disclosed, to the exclusion of other possibilities, “push[ing] beyond the boundaries of anything discussed in the prior art.” According to AbbVie, “[t]he Board improperly relied on hindsight to steer its way through these choices, ignoring more promising alternatives and improperly examining the motivation to achieve the specific combination that AbbVie made rather than a contemporaneous motivation to produce an improved treatment regimen.”

AbbVie also contended that the Board wrongly shifted the burden from the petitioners to AbbVie by discounting evidence that, according to AbbVie, demonstrated a lack of information and uncertainty in the prior art that supported non-obviousness. For example, AbbVie asserted that the Board misinterpreted a prior art reference that purportedly indicated that all RA patients on a 0.5 mg/kg IV dosing regimen (approximately equivalent to a total dose of 40 mg) were either withdrawn or up-dosed during a clinical study, such “that none of the 24 patients receiving 0.5 mg/kg continued that treatment beyond 12 weeks.”  According to AbbVie, these data in the prior art taught away from using the claimed 40 mg dosing regimen, especially for 24 weeks, and the Board was wrong to discount the reference simply because the reference lacked a specific statement that all patients were up-dosed due to ineffectiveness of the regimen as opposed to some other reason.  “Counting that silence against AbbVie was improper,” it argued.  Furthermore, regardless of whether the reference definitively “taught away,” AbbVie argued that the Board erred in its obviousness analysis because it did not “consider the effect that the same uncertainty would have had on a skilled artisan’s motivation to combine and reasonable expectation of success.”

In addition, AbbVie argued that the Board improperly shifted burdens in its analysis of the commercial success of Humira®. AbbVie argued that it was entitled to “a presumption of a nexus between the commercial success of HUMIRA® and the patented invention[,]” and the Board “failed to hold Petitioners to its ‘burden of disproving’ the nexus[,]” instead finding “that the Petitioners had rebutted the presumption merely by injecting uncertainty” into the analysis.

AbbVie additionally contended that the Board failed to view the claims as an integrated whole. According to AbbVie, the Board instead combined references that differed across many parameters, including: treatment interval, method of administration, dose size, and fixed versus patient-specific weight-based dose.

AbbVie further argued that the Board erroneously applied the institution-stage standard (i.e., “a reasonable likelihood of prevailing at trial”) to an alternative prior art combination proffered in one of BI’s IPR petitions, rather than concluding that BI had proved unpatentability at trial based on this combination of references.

Finally, AbbVie argued that reversal was warranted because the Board’s decisions violated Article III of the U.S. Constitution and the Seventh Amendment “because the inter partes review process authorizes an executive branch agency, rather than an Article III court with a jury, to extinguish the private property right in a previously issued patent without the consent of the patent owner.” AbbVie, however, acknowledged that this argument was “foreclosed by circuit precedent,”  but clarified that AbbVie was “preserv[ing] this argument in light of the Supreme Court’s impending decision in Oil States Energy Services LLC v. Greene’s Energy Group, LLC, No. 16-712 (U.S).”  (As discussed below, the Supreme Court issued its decision in Oil States four months later.)

Coherus’ and BI’s Responses:  On March 23, 2018, Coherus and BI each filed responsive appellate briefs.  In their respective briefs, they argued that the Board applied the correct legal analysis and that the Board’s decisions were supported by substantial evidence.

First, Coherus and BI argued that the Board conducted its analysis free from hindsight, correctly applying the burden of proof, and properly accounting for the claims as a whole. For example, they argued that when Board determined that AbbVie failed to show that the prior art taught away or that commercial success did rebut the obviousness of the claims, the Board “simply reject[ed] AbbVie’s own characterization of the art as teaching away,” and did not improperly shift the burden of proof onto AbbVie.

Second, Coherus and BI contended that the Board’s decisions were supported by substantial evidence. Among other things, Coherus and BI argued that the Board was entitled to consider and reject AbbVie’s factual allegations that up-dosing taught away from using the claimed dosing regimen.  In response to AbbVie’s contention that RA patients on the 40 mg dosing regimen were either up-dosed or withdrawn in a prior art clinical trial because it was an ineffective dose, Coherus and BI asserted that multiple prior art references reported the 40 mg regimen as effective, and that mere up-dosing alone did not evidence a lack of efficacy.  Similarly, Coherus and BI argued that substantial evidence supported the Board’s discounting of AbbVie’s evidence of objective indicia of non-obviousness, such as commercial success, for lack of a nexus to the claimed invention.

Regarding AbbVie’s contention that the Board erroneously applied the institution-stage standard to BI’s alternative obviousness combination of references, BI countered that the Board’s recitation of the standard for institution “at one place in its decision” was at worst a “misstatement [that] does not warrant reversal.”  According to BI, the Board recited “the proper standards … throughout the Board’s opinion” and correctly applied those standards in conducting its obviousness analysis, which was “supported by substantial evidence.”

In response to AbbVie’s constitutionality challenge, Coherus and BI noted that even AbbVie had acknowledged that its challenge was foreclosed under then-current circuit precedent, unless it were to be reversed by the Supreme Court in its impending Oil States decision.

The Supreme Court issued its decision in Oil States a few weeks later, on April 24, 2018, holding that IPR proceedings do not violate Article III or the Seventh Amendment of the United States Constitution.  The Court noted, however, that its holding was limited to the precise issues before it and was not foreclosing the possibility of future constitutional challenges.

AbbVie’s Reply:  On May 4, 2018, AbbVie filed a reply brief. AbbVie reiterated, among other things, that up-dosing in prior art clinical trials taught away from using the claimed dosing regimen.  AbbVie further reiterated that the PTAB improperly applied the standard for instituting an IPR.  In response to BI’s assertion that the mistake should be overlooked as a mere typographical error or misstatement, AbbVie contended that the Board could clarify this issue on remand.

With regard to its constitutional challenge, AbbVie noted that while the Supreme Court’s decision in Oil States a couple weeks earlier “rejected a facial challenge to inter partes review under Article III and the Seventh Amendment,” the Supreme Court “went out of its way” to “emphasize the narrowness of its holding” and “le[ave] the door open to challenge the retroactive application of inter partes review.”  Based on that alleged opening, AbbVie argued that it was unconstitutional to subject the three challenged patents to IPR proceedings because they issued from patent applications that were filed before the America Invents Act (AIA) was enacted and established the IPR system.  According to AbbVie, “An inventor pays the price for patent protection when it discloses its invention. The public cannot subsequently change the terms of the bargain, at least not when it comes to something as fundamental as eliminating the traditional role of an Article III court or eroding the safeguards provided by the presumption of validity.” AbbVie concluded that “where a patent is retroactively subject to IPR, the balance shifts and both Article III and due process prohibit such a fundamental change.”

Certification of AbbVie’s Constitutionality Challenge:  On October 17, 2018, AbbVie filed a Notice of Constitutional Challenge pursuant to Federal Rule of Appellate 44(a), which requires a party who questions the constitutionality of a Federal statute on appeal to give written notice to the clerk of court, who must then certify that fact to the U.S. Attorney General.  Although AbbVie alleged that it raised its constitutional challenge in its notice of appeal, docketing statement and briefs to the Court, AbbVie explained that it was filing the separate Notice in light of the Court’s September 26, 2018 proposed new practice note that, if adopted, will require any party making a constitutional challenge in a motion or brief to the Court to provide a separate notice of that challenge before the clerk of court will certify the matter to the Attorney General.

Today, October 31, 2018, the Court responded to AbbVie’s Notice by issuing an order staying the appeals and certifying the fact of AbbVie’s constitutional challenge to the Attorney General.  The Court’s order directs the Attorney General to inform the Court within 30 days (i.e., by November 30, 2018) whether the United States intends to intervene.  The order states that if the United States declines to intervene, the stay will be lifted and the appeals will proceed in the ordinary course (e.g., be scheduled for oral argument).  If, however, the United States elects to intervene, as it did recently in other pending appeals concerning similar constitutionality challenges, the Court’s order provides that the stay will be lifted but AbbVie’s reply brief will be stricken and the United States will have 40 days from such election to file a response brief; AbbVie’s replacement reply brief will then be due no later than 14 days after service of the United States’s response brief.  In short, today’s order has the potential to delay scheduling of oral argument and eventual resolution of the appeals by at least another month and potentially several more months, depending on whether the United States elects to intervene.

Stay tuned to Big Molecule Watch for further developments.

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