SCOTUS Denial of Novartis Petition for Cert Returns Focus Toward ‘Procedural Insanity’ at the Federal Circuit

On April 17, the U.S. Supreme Court denied a petition for writ of certiorari filed by pharmaceutical developer Novartis seeking to overturn a decision on rehearing by the U.S. Court of Appeals for the Federal Circuit that invalidated patent claims covering the blockbuster multiple sclerosis (MS) treatment, Gilenya. The cert denial leaves in place a CAFC decision derided by commentators as “procedural insanity” and increases the focus upon certain machinations at the appellate court bearing the fingerprints of Chief Judge Kimberly Moore.

The first Federal Circuit ruling in this case was entered in January 2022, affirming a previous ruling from the U.S. District of Delaware finding that patent claims asserted by Novartis and covering methods of treating relapsing remitting MS (RRMS) satisfied the written description requirement at 35 U.S.C. § 112. Dissenting from the panel majority was Chief Judge Moore, who contended that the negative claim limitation excluding a loading dose when administering fingolimod to treat RRMS was not supported by the patent’s specification. According to Chief Judge Moore, Novartis’ specification was required to expressly provide a reason for excluding the loading dose to satisfy Section 112, whereas the majority found no clear error in the Delaware district court’s decision to credit Novartis’ expert testimony to support the claimed dosing regimen.

Then, in June 2022, the Federal Circuit reversed course and entered a decision on panel rehearing that invalidated Novartis’ patent claims under Section 112. In the interim between decisions, Judge Kathleen O’Malley had retired from the Federal Circuit and her spot on the original Novartis panel was replaced by Circuit Judge Todd Hughes. This time, Chief Judge Moore wrote the majority opinion, which largely reiterated her stance from that January that “silence cannot support a negative limitation.” Circuit Judge Richard Linn, part of the panel majority originally upholding the validity of Novartis’ patent claims, dissented in the rehearing decision on the grounds that the majority was improperly creating a heightened Section 112 standard for negative claim limitations.

Gene Quinn, President & CEO of IPWatchdog, did not mince words when assessing the import of the Federal Circuit’s reversal on rehearing:

“Without hyperbole, this procedural insanity is literally unprecedented… It only makes rational sense that at least one member of the majority be required to authorize a panel rehearing… If the Federal Circuit does not reverse this monstrosity en banc this dissent-today-majority-tomorrow approach to ‘justice’ will erode any remaining credibility the Federal Circuit clings to presently.”

HEC Pharma: No Circuit Split Exists on Section 46 Procedural Issues

After several amicus briefs filed in late February backed Novartis’ petition for cert at SCOTUS, respondent HEC Pharma filed a brief in opposition on March 3 arguing that Novartis’ “newly minted” procedural question presented on appellate panel requirements under 28 U.S.C. § 46 doesn’t merit Supreme Court review. Not only do the Federal Circuit Rules of Practice provide for the designation of a third judge when one panel judge is unavailable and the other two are not in agreement, HEC Pharma contended, no case precedent or statute identified by Novartis required denial of a petition for rehearing when the two remaining judges on a panel are split.

HEC Pharma’s brief in opposition pushed back on Novartis’ claims that a circuit split existed on practices surrounding the designation of judges to decide a petition for rehearing. The respondent alleged that Novartis had ignored cases from the Second Circuit and Tenth Circuit undermining the petitioner’s claims that uniform practices on designating judges for rehearing decisions existed. Further, HEC Pharma argued that Novartis’ proposed rule would remove discretion from the appellate courts to handle situations in which two judges from the original panel are unavailable, or when a two-judge panel feels that issues before it should be decided with a third judge on the panel.

The respondent’s brief in opposition further lambasted Novartis’ second question presented for review on the Federal Circuit’s heightened Section 112 standard in the decision below. This “fallback question” from Novartis was “not remotely certworthy” according to HEC Pharma, arguing that Novartis’ expert testimony established that the disclosure in the specification could have just as easily included a loading dose as it could have excluded one. The Federal Circuit was correct to reject this testimony, HEC Pharma contended, because of conflicts with the specification and the intrinsic record of the patent. HEC’s brief added:

“Novartis wrongly tries to re-cast this fact specific inquiry—which turns on the intricacies of the expert testimony and the factual evidence presented in this case—as a fight over the legal standard. But the kind of case specific error correction that Novartis seeks does not merit this Court’s attention.”

Reply of Petitioner Novartis: Local Rules Must Comply With Congressional Statute

In a reply filed with the Supreme Court on March 21, Novartis argued that HEC Pharma’s analysis of the procedural issues was flawed, as the local rules of appellate courts must be consistent with acts of Congress. Novartis contended that, under the plain language of Section 46(c), Congress only authorized rehearings to be decided by panels of three judges or the entire court en banc. Instead of granting appellate courts “wide latitude of discretion” as characterized by HEC Pharma, Novartis countered that what the Supreme Court held in cases such as Western Pacific Railroad Corp. vs. Western Pacific Railroad Co. (1952) was that appellate courts’ procedural discretion was limited to en banc review practices.

On the issue of a circuit split, Novartis asserted that HEC Pharma’s own briefing conceded that the D.C., Sixth and Eighth Circuits have each denied rehearing with a panel split 1-1 and without appointing a new judge. Further, Novartis argued that HEC Pharma dismissed orders from the Fourth, Fifth, Seventh and Eleventh Circuits that uniformly denied panel rehearing following the removal of a judge from the majority where the remaining panel was split 1-1. Given that 12 of the Federal Circuit’s 19 judges are eligible for retirement, Novartis told the Supreme Court that this issue was likely to be repeated at the nation’s circuit appellate court for patent cases.

On the Section 112 patentability issue, Novartis contended that the Supreme Court has long viewed the written description requirement as a flexible standard that permits implied descriptions understandable to skilled artisans going back to its 1943 decision in Marconi Wireless Telegraph Co. of America v. United States. While HEC Pharma argued that Novartis’ patent specification could cover either a loading dose or no loading dose, Novartis countered that “[a] description embracing either option necessarily covers both.” Although the new majority in the Federal Circuit’s rehearing decision said that it was not creating a heightened Section 112 standard for negative claim limitations, Judge Linn’s dissent on rehearing showed that a legal disagreement existed, supporting the idea that the CAFC did craft such a new standard, according to Novartis.

CAFC Optics Under Chief Judge Moore Become Even Bleaker

The Supreme Court’s denial of cert in this case shunts even more focus onto Chief Judge Moore, whose leadership at the Federal Circuit has recently come into question with revelations that she is attempting to force Circuit Judge Pauline Newman to leave the Federal Circuit bench. This effort has garnered controversy, as many sources close to Judge Newman and the Federal Circuit indicated that Newman has not exhibited mental unfitness for her work, and some have even suggested that the Biden Administration may be pushing for a Federal Circuit vacancy to fill. In a recent IPWatchdog editorial, Gene Quinn called upon Chief Judge Moore to recuse herself from any investigation that could be instituted into Judge Newman.

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Author: Rangizzz