Noven Pharmaceuticals, Inc. and MYLAN PHARMACEUTICALS INC.v.Novartis AG and LTS LOHMANN THERAPIE-SYSTEME AG

Patent Trial and Appeal Board

Nov 30, 2015

09291498 (P.T.A.B. Nov. 30, 2015)

Trials@uspto.gov Paper 77
Tel: 571-272-7822 Entered: November 30, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

NOVEN PHARMACEUTICALS, INC.,
and MYLAN PHARMACEUTICALS INC.
Petitioner,

v.

NOVARTIS AG and LTS LOHMANN THERAPIE-SYSTEME AG,
Patent Owner.
____________

Case IPR2014-005501
Patent 6,335,031 B1
_____________

Before FRANCISCO C. PRATS, ERICA A. FRANKLIN, and
CHRISTOPHER G. PAULRAJ, Administrative Patent Judges.

FRANKLIN, Administrative Patent Judge.

DECISION
Denying Patent Owner’s Request for Rehearing
37 C.F.R. § 42.71

1 Case IPR2015-00268 has been joined with this proceeding.
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I. INTRODUCTION
Novartis AG and LTS Lohmann Therapie-Systeme AG (collectively,
“Patent Owner”) request reconsideration of the Final Decision entered on
September 28, 2015, Paper 69 (“Final Decision” or “Final Dec.”). Paper 71
(“Rehearing Request” or “Req. Reh’g”).
In the Final Decision, we addressed the following grounds of
unpatentability for challenged claims 1–3, 7, 15, 16 and 18 of U.S. Patent
No. 6,335,031 B1 (Ex. 1001, “the ’031 patent”):
References Basis ’031 Patent Claims
Enz,2 the Handbook,3 Rosin,4
Elmalem,5 and Ebert6
§ 103(a) 1, 2, 7, 15 and 18
Enz, the Handbook, Rosin, and Ebert § 103(a) 3 and 16
Enz and Sasaki7 § 103(a) 1–3, 7, 15, 16 and 18
Petitioner relied on two declarations of Dr. Agis Kydonieus, Ex. 1010;
Ex. 1031, and two declarations of Dr. Christian Schöneich, Ex. 1011; Ex.
1032. Patent Owner relied on the declaration of Dr. Alexander M. Klibanov,
Ex. 2012.

2 Ex. 1002, UK Patent Application GB 2,203,040 A, published Oct. 12, 1988
(“Enz”).
3 Ex. 1003, HANDBOOK OF PHARMACEUTICAL EXCIPIENTS (A. Wade & P.J.
Weller eds., 2d ed. 1994) (“the Handbook”).
4 Ex. 1008, US 4,948,807, issued Aug. 14, 1990 (“Rosin”).
5 Ex. 1009, Antagonism of Morphine-Induced Respiratory Depression by
Novel Anticholinesterase Agents, 30 NEUROPHARMACOLOGY 1059–64
(1991) (“Elmalem”).
6 Ex. 1006, WO 95/24172, published Sept. 14, 1995 (“Ebert”).
7 Ex. 1005, JP Patent Application 59-184121, published Oct. 19, 1984
(“Sasaki”).
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In the Final Decision, we held that Noven Pharmaceuticals, Inc. and
Mylan Pharmaceuticals Inc. (collectively, Petitioner) had shown by a
preponderance of the evidence that claims 1–3, 7, 15, 16 and 18 of U.S.
Patent No. 6, 335,031 B1 (Ex. 1001, “the ’031 patent”) are unpatentable for
obviousness under 35 U.S.C. § 103(a). Final Dec. 42.
II. ANALYSIS
“When rehearing a decision on petition, a panel will review the
decision for an abuse of discretion.” 37 C.F.R. § 42.71(c). “The burden of
showing a decision should be modified lies with the party challenging the
decision. The request must specifically identify all matters the party
believes the Board misapprehended or overlooked, and the place where each
matter was previously addressed in a motion, an opposition, or a reply.” 37
C.F.R. § 42.71(d). For the reasons discussed below, Petitioner’s Rehearing
Request is denied.
A. Federal Circuit Decision in Watson
Patent Owner asserts that we overlooked the Federal Circuit’s
decision in Novartis Pharms. Corp. v. Watson Labs, Inc., –– F. App’x ––,
Nos. 2014-1799 et al., 2015 WL 2403308 at *5–8 (Fed. Cir. May 21, 2015)
(“Watson”) in two respects. Req. Reh’g 2–7, 9–13. First, according to
Patent Owner, “the Board erred in overlooking the Federal Circuit’s holding
in Watson that Elmalem would not have taught a person of ordinary skill in
the art that rivastigmine is oxidatively unstable or required an antioxidant.”
Id. at 7.8 Second, Patent Owner asserts that the Board overlooked the

8 Patent Owner asserts also that we “overlooked that district court expert
credibility determinations should be accorded great deference ‘because the
court saw the witnesses and heard the testimony.’” Req. Reh’g 6 (quoting
Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 929 (Fed. Cir. 2012)).
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Federal Circuit’s holding in Watson that “‘susceptibility’ to oxidative
degradation would not have motivated a person of ordinary skill in the art to
add an antioxidant to the transdermal formulation in Enz.” Id. at 9–10.
We have carefully reviewed Patent Owner’s arguments presented in
the Request for Rehearing, but do not find them persuasive. In particular,
the Decision squarely addresses the Federal Circuit’s decision in Watson and
explains why that decision does not control in this proceeding. Final Dec.
4–5. Specifically, we stated:
The Federal Circuit’s Watson decision does not control here
because Noven has presented additional prior art and
declaratory evidence that was not before the Court in Watson.
Moreover, in an inter partes review, a petitioner’s burden of
proving unpatentability is by a preponderance of the evidence
rather than by clear and convincing evidence, as required in
district court litigation. Thus, while we have considered the
Federal Circuit’s decision, we have independently analyzed
patentability of the challenged claims based on the evidence
and standards that are applicable to this proceeding.
Id.
Significantly, the Federal Circuit noted that “[t]he district court
admitted that there ‘does not appear to be an objectively ‘correct’ reading [of
Elmalem],” rather both arguments regarding whether Elmalem teaches or
suggests adding an antioxidant to rivastigmine “seem logical and are
supported by highly qualified experts in the field.” Watson at 992 (quoting
Novartis Pharm. Corp. v. Par Pharm., Inc., 48 F. Supp. 3d 733, 757 (D. Del.
2014). Further, the Federal Circuit explained that the district court credited

However, the deference a district court receives for expert credibility
determinations is accorded by the Federal Circuit reviewing an appeal from
the district court, not by the Board in an inter partes trial proceeding.
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Novartis’ expert testimony as being more credible than Watson’s expert. Id.
at 993. Based upon that credibility assessment, the district court found that
Elmalem’s use of an antioxidant was to reduce variability among samples
tested, and not a teaching or suggestion that rivastigmine is susceptible to
oxidative degradation so as to motivate one of skill in the art to combine an
antioxidant with it. Id. (citing Novartis Pharm. Corp. v. Par Pharm., Inc.,
48 F. Supp. 3d 733 at 756–57).
While acknowledging that “the plain language of the Elmalem article
appears to present a close[] question,” on appeal, the Federal Circuit gave
“great deference” to the credibility determination of the district court. Id. at
996. Based upon that deference, the Federal Circuit affirmed the district
court’s holding that Watson failed to prove by clear and convincing evidence
that the asserted claims of the ’031 patent would have been obvious. Id. at
997.
In this proceeding, the Petitioners Noven and Mylan presented
different evidence than what Watson presented in district court regarding
what Elmalem would have taught a person of ordinary skill in the art.
Specifically, the Petitioners relied upon the declaration testimony of Dr.
Kydonieus and Dr. Schöneich. Patent Owner has not shown that the same
declaratory evidence was presented in the district court case reviewed by the
Federal Circuit. In the Decision, we explain our finding that Elmalem’s
disclosure suggests adding an antioxidant to rivastigmine to prevent
oxidation was based upon our consideration of the evidence and arguments
presented to us. Final Dec. 32. In particular, upon considering and
comparing the testimony of Patent Owner’s expert, Dr. Klibanov, with that
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of Petitioner’s experts, Drs. Kydonieus and Schöneich, we afforded greater
persuasive weight to the testimony of Petitioner’s experts. See id. at 31–35.
Thus, to the extent that Patent Owner asserts that the Board
overlooked its burden under In re Baxter International, Inc., 678 F.3d 1357,
1365 (Fed. Cir. 2012)(“Baxter”) to not arrive at a different conclusion than
the Federal Circuit, Req. Reh’g 1, the argument is misplaced as the evidence
and arguments presented in this proceeding differed from that considered by
the court system in that litigation. See Baxter at 1365–66 (acknowledging
burden of proof and record evidence considered by the Board was different
than in court system and affirming the Board’s different result, i.e., that the
challenged claims were not patentable). As in Baxter, our expert credibility
determination is not comparable to that of the district court, as we only
considered the persuasive testimony of two experts “that had not been raised
in the prior district court proceeding.” id. at 1365. Thus, the Federal
Circuit’s deference to and affirmance of the credibility determinations of the
district court do not control the outcome in this proceeding.
Regarding Patent Owner’s assertion that, in Watson, the Federal
Circuit “held that ‘susceptibility’ to oxidative degradation would not have
motivated a person of ordinary skill in the art to add an antioxidant to the
transdermal formulation in Enz,” Req. Reh’g 9–10, we disagree with that
characterization. To the contrary, the Federal Circuit stated, “here Watson
failed to prove that a rivastigmine formulation was known to be susceptible
to oxidative degradation.” Watson at 996 (emphasis added). Additionally,
the Federal Circuit explained that it gave considerable deference to the
district court’s finding that the prior art did not teach or suggest that
rivastigmine was known to be susceptible to oxidative degradation, and that
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“without an appreciation for rivastigmine’s susceptibility to oxidative
degradation, one of skill in the art would not have been motivated … to add
an antioxidant to a rivastigmine formulation.” Id. at 997. Moreover, we are
not persuaded by Patent Owner’s argument that we overlooked the Federal
Circuit’s affirmance of the district court’s finding that the evidence did not
teach or suggest rivastigmine’s susceptibility to oxidative degradation
because, as discussed above, the courts did not consider the same declaratory
evidence presented in this proceeding.
Further, to the extent that Patent Owner asserts that we overlooked the
Federal Circuit decision in Watson regarding the ground based upon the
combined teachings of Enz and Sasaki, Req. Reh’g 14–15, we remain
unpersuaded as the district court case reviewed by the Federal Circuit
decision in Watson did not consider the combination of Enz and Sasaki.
See Final Dec. 4–5 (explaining, among other differences, that in this
proceeding “Noven presented additional prior art that was not before the
Court in Watson”).
B. Chemical Stability of Rivastigmine
Patent Owner asserts that the Board overlooked Patent Owner’s
evidence “that the Elmalem authors did not believe or reasonably expect
rivastigmine to be oxidatively unstable or require an antioxidant.” Req.
Reh’g 7. In the Patent Owner Response, Patent Owner asserted that a person
of ordinary skill in the art reading Elmalem would not have reasonably
expected that rivastigmine would oxidatively degrade under
pharmaceutically relevant conditions or require an antioxidant in any
pharmaceutical formulation because two journal articles, Enz 1991 and
Weinstock 1994, describing rivastigmine as showing “greater chemical
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stability” than physostigmine, did not describe adding an antioxidant to
rivastigmine. PO Resp. 36 (citing Ex. 2026 and Ex. 2027). In the rehearing
request, Patent Owner asserts that because Weinstock 1994 was written by
two of the Elmalem authors and they did not add an antioxidant to
rivastigmine, it is apparent that they did not believe or reasonably expect
rivastigmine to be oxidatively unstable or require an antioxidant. Req.
Reh’g 7–8.
As indicated in the Decision, we considered each of Patent Owner’s
arguments, including those asserting an interpretation of Elmalem based
upon the alleged teachings of Enz 1991 and Weinstock 1994. See
Final Dec. 26 (referring to Patent Owner’s Response at pages including
those addressing Enz 1991 and Weinstock 1994). To the extent we might
not have explained specifically why Patent Owner’s arguments based upon
Enz 1991 and Weinstock 1994 are not persuasive, we do so here.
As we discussed with respect to Rosin and Elmalem, a description that
a compound shows “greater chemical stability” than another compound, is
not necessarily a teaching that either compound is oxidatively stable. See
Fin. Dec. 31–32. Indeed, as with Rosin and Elmalem, Enz 1991and
Weinstock 1994 do not address oxidative stability. Dr. Kydonieus’
explanation regarding the “greater chemical stability” description in Rosin is
applicable here also, i.e., that to a person of ordinary skill in the art, the
comparative statement “at best means that RA7 is more stable than an
unstable compound.” Fin. Dec. 32 (quoting Ex. 1031 ¶ 48).
Moreover, Dr. Kydonieus addressed Enz 1991 and Weinstock 1994,
explaining how Patent Owner’s declarant, Dr. Klibanov, mischaracterized
those publications as suggesting that rivastigmine is oxidatively stable. Ex.
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1031 ¶¶ 68–70. In particular, Dr. Kydonieus noted that Enz 1991 described
rivastigmine by stating the “drug appears to have greater chemical stability
and longer duration of action than does physostigmine” based upon
administration to human volunteers, suggesting that Enz 1991 is referring to
the duration of action of rivastigmine in the body. Id. at 68–69 (quoting Ex.
2026, 272). Similarly, Dr. Kydonieus noted that Weinstock 1994 states, “In
animals and human subjects [rivastigmine] showed superior chemical
stability, oral bioavailability and a longer duration of action than
physostigmine,” suggesting that Weinstock 1994 is referring to in vivo
activity of rivastigmine rather than oxidative stability in a pharmaceutical
formulation. Id. at 70 (quoting Ex. 2027, 219).
Therefore, for reasons similar to those provided in the Final Decision
regarding the relative chemical stability of rivastigmine disclosed by Rosin
and Elmalem, we were not persuaded by Patent Owner’s arguments
regarding similar statements in Enz 1991 and Weinstock 1994. Thus, Patent
Owner has not established that we overlooked its argument.
C. Other Compounds Not Reported To Include an Antioxidant
Patent Owner asserts that “the Board overlooked Patent Owner’s
evidence of multiple compounds with the same structural features as
rivastigmine that were not reported in the prior art to be oxidatively unstable
or to contain an antioxidant in their commercial formulations.” Req. Reh’g
8 (citing PO Resp. 18; Ex 2012 ¶¶ 133–137). According to Patent Owner,
we neither mentioned those exemplary compounds in our Final Decision,
nor offered any reason why a person of ordinary skill in the art would ignore
them. Id.

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We disagree. As indicated in the Final Decision, we considered
Patent Owner’s argument. See Final Dec. 12 (referring to Patent Owner’s
Response at pages including those addressing exemplary compounds sharing
structural features with rivastigmine). To begin, we note that Patent Owner
did not mention by name any of the “multiple exemplary compounds” in the
Patent Owner’s Response. See PO Resp. 18 (referring to examples of
compounds having features similar to rivastigmine, without identifying those
examples). Instead, Patent Owner referred to the sections of Dr. Klibanov’s
declaration that address those examples. Id. (citing Ex. 2012 ¶¶ 133–137).
Patent Owner relies on those same sections of Dr. Klibanov’s declaration
elsewhere in the Patent Owner’s Response also. See., e.g., PO Resp. 42.
In the Final Decision, we address specifically each of the examples
Dr. Kydonieus described in those sections of his declaration. See Final Dec.
19–20. Significantly, we explained that merely identifying examples of
drugs having structural similarities to rivastigmine that were “not reported to
contain antioxidants in their commercial transdermal formulations,” Ex.
2012 ¶ 133, was insufficient to establish that the compounds were not
susceptible to oxidative degradation in pharmaceutically relevant conditions.
Final Dec. 20–21. We explained further that neither Patent Owner nor Dr.
Klibanov identified any statement in the Physician’s Desk Reference upon
which Dr. Klibanov relied in support of his assertions, or elsewhere,
describing the oxidative stability or shelf-life of any of the asserted
exemplary compounds. Id. at 19–20.
We also explained that it was problematic that Dr. Klibanov did not
discuss in his declaration whether the commercial formulations comprising
those exemplary compounds addressed drug stability by some means other
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than adding an antioxidant. Id. at 20. As we stated in the Final Decision,
Indeed, in his deposition testimony, Dr. Klibanov
acknowledged that conclusions regarding a drug’s susceptibility
to oxidation cannot be made based upon its formulation being
reported not to include an antioxidant, because other means of
preventing oxidation may have been employed. Ex. 1026,
247:9–249:6; Pet. Reply 9; Ex. 1032 ¶ 42.
Final Dec. 20. Thus, Patent Owner has not established that we overlooked
its argument.
D. The European Agency Guidelines
Patent Owner asserts that we overlooked its evidence that a person of
ordinary skill in the art would not add an antioxidant unless one was needed.
Req. Reh’g 13. In particular, Patent Owner refers to a publication by The
European Agency for the Evaluation of Medicinal Products providing
guidance on the inclusion of antioxidants and antimicrobial preservatives in
medicinal products (“EMEA guidelines”). Id. (citing Ex. 2019, 3).
As indicated in the Final Decision, we considered this argument by
Patent Owner. See Final Dec. 12 (referring to Patent Owner’s Response at
pages including those addressing the EMEA guidelines). To the extent we
might not have explained specifically why the argument was unpersuasive,
we do so here. In the Patent Owner Response, Patent Owner asserted that
the art expressly taught that antioxidants “should only be used once it has
been shown that their use cannot be avoided.” PO Resp. 10. In support of
that contention, Patent Owner relied on the declaration of Dr. Klibanov and
the EMEA guidelines. Id. at 9-10. According to Dr. Klibanov, the EMEA is
the European equivalent of the United States Food and Drug Administration.
Ex. 2012 ¶ 40. Dr. Klibanov did not provide testimony that the EMEA
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“guidelines” represent anything more than just that. In other words, Patent
Owner did not establish that the EMEA guidelines represented a restriction,
rule or regulation for drug formulation in Europe, or that an approach that
differed from those set forth in the guidance would not be approved by the
agency, if, in fact, the agency is responsible for approving drugs.
Moreover, as Dr. Kydonieus explained, the EMEA guidelines are
directed toward justifying the use of an antioxidant. Ex. 1031 ¶ 93. The
EMEA guideline states, “Antioxidants should not be used to disguise poorly
formulated products or inadequate packaging. The need to include an
antioxidant should be explained and fully justified.” Ex. 2019, 2. Thus, we
understand the guidance as a whole to be directed to avoiding the use of an
antioxidant to cure inadequate formulation or packaging techniques, rather
than categorically avoiding the addition of an antioxidant to prevent
oxidative degradation in compounds with known susceptibility to such
degradation.
As discussed in the Final Decision, based on our consideration of the
record as a whole, we found that Petitioner established that a person of
ordinary skill in the art would have predicted that the transdermal
formulation disclosed by Enz was susceptible to oxidative degradation and
would have been motivated to add an antioxidant with a reasonable
expectation of successfully avoiding that predicted degradation. See, e.g., 17
(addressing the combination of Enz and Sasaki) and 38 (addressing the
combination of Enz, the Handbook, Rosin, Elmalem, and Ebert).
Thus, Patent Owner has not established that we overlooked its
argument or evidence.
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III. CONCLUSION
We have considered Patent Owner’s request, but find no point of law
or fact which we overlooked or misapprehended in arriving at our Final
Decision.
ORDER
In consideration of the foregoing, it is hereby:
ORDERED that the Patent Owner’s request for rehearing is denied.

PETITIONER:

Steven J. Lee
Michael K. Levy
Christopher J. Couslon
KENYON & KENYON LLP
slee@kenyon.com
mlevy@kenyon.com
ccoulsson@kenyon.com

Joseph Reisman
Jay Deshmukh
William R. Zimmerman
KNOBBE, MARTENS, OLSON & BEAR, LLP
2jmr@knobbe.com
2jrd@knobbe.com

PATENT OWNER:

Raymond R. Mandra
Nicholas N. Kallas
FITZPATRICK, CELLA, HARPER & SCINTO
rmandra@fchs.com
ExelonPatchIPR@fchs.com