District of Delaware Applies IPR Estoppel Even Though the Final Written Decision Did Not Issue Until After Trial

The District of Delaware recently weighed in on the scope of IPR estoppel in Novartis Pharmaceuticals Corp. v. Par Pharmaceutical, Inc., 14-cv-01289 (D. Del. Apr. 11, 2019).  Describing the issue before it as a matter of first impression, the Court held that “IPR estoppel will still apply post-trial where the Court has not entered a final judgment.”

Novartis sued a number of generic drug manufacturers on U.S. Patent No. 5,665,772.  After being sued, the defendants filed IPR petitions, and succeeded in getting them instituted.  Before the USPTO issued a final written decision on the IPRs, however, the parties tried validity to the district court. The court issued an order finding the asserted claims invalid for obviousness-type double patenting, and chose not to address defendants’ obviousness defenses.  During appeal of the court’s decision, the PTAB issued a final written decision upholding the patentability of relevant asserted claims.  The Federal Circuit subsequently reversed the trial Court’s finding of obviousness-type double patenting and remanded.

In light of this history, on remand plaintiff argued that defendants were estopped from arguing its obviousness defenses and counterclaims based on the PTAB’s final written decision.  The Court agreed, noting that that one of the policy objectives of IPR proceedings was to conserve judicial resources.  The Court also analyzed 35 U.S.C. § 315(e)(2) and found no time limitations on the estoppel effect of an IPR final written decision.  The Court thus concluded IPR estoppel can apply post-trial when the court has not yet entered a final judgment.

This case is yet another example of the potential consequences of simultaneously litigating a patent in district court and at the PTAB.  While there undoubtedly can be advantages to pursuing such a strategy, litigants must thoroughly consider the potential impact of IPR proceedings, even if successful, on litigation in federal court.