Genentech v. Hospira – Recap of July 11 Oral Argument

On the morning of July 11, Chief Judge Prost, Judge Linn, and Judge Hughes heard oral argument in Genentech v. Hospira, Case No. 18-1959. Genentech appealed from a final written decision by the Patent Trial and Appeal Board (PTAB) on IPR2016-01771 that invalidated U.S. Patent No. 7,622,115 (the ’115 patent) as being obvious over two pieces of prior art. Genentech raised several issues on appeal, including arguments on the merits of the PTAB’s claim construction and patentability analysis as well as the constitutionality of instituting inter partes review (IPR) on a patent that issued prior to passage of the America Invents Act (AIA). Earlier this week, we summarized the briefing by Genentech, Hospira, and the government on the constitutionality issue.

At oral argument, neither Genentech nor Hospira addressed the constitutionality issue. Instead their arguments focused on the claim construction, obviousness, and secondary considerations issues raised in the briefing. The judges questioned Genentech as to the material differences between the PTAB’s claim construction and Genentech’s proposed construction, discussed the PTAB’s requirements for addressing a party’s arguments under the Administrative Procedures Act, and questioned Genentech’s characterization of the PTAB’s treatment of their evidence of secondary considerations of non-obviousness.

Several minutes of Hospira’s time was reserved for the government, which did address the constitutionality issue. The panel began the argument by asking counsel for the government if there were any timing peculiarities as to the patents in this case. The government agreed that this was a straight-forward question of retroactive application of the AIA.

Judge Hughes questioned the government about the uniqueness of the argument in the context of the takings clause. More specifically, Judge Hughes stated that he found this to be an “odd” takings claim because it requested striking down legislation rather than monetary compensation in response to an alleged taking of property. He commented that under the Fifth Amendment, the government may take property so long as the owner is justly compensated. Counsel for the government agreed that this was not an average takings claim and that she was unaware of any case where a statute was found unconstitutional because it causes the deprivation of property. The government restated its position that there was no takings claim here because Genentech had no valid property interest in a patent cancelled by the PTAB where the cancellation was affirmed by the Federal Circuit, as such a patent was erroneously granted in the first place. Additionally, the government argued that to the extent there was a taking, the value of the compensation for the cancelled patent would be $0.

Genentech, Hospira, and the government briefed the same constitutionality issue in Case No. 18-1933, a similar appeal from a PTAB final written decision invalidating a Genentech patent. This similar case is scheduled for oral argument on August 3.

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