Squires Nixes PTAB Decision for Petitioner Due to Failure to Explain Inconsistencies with ITC

The U.S. Patent and Trademark Office (USPTO) Director yesterday vacated a Patent Trial and Appeal Board (PTAB) final written decision (FWD) due to its inconsistency with an International Trade Commission (ITC) determination involving the same claims, the same prior art and substantially the same evidence.

The PTAB held in IPR2024-01312 that claims 1, 2, 4–6, 16, 17, and 19–21 of Sun Pharmaceuticals’ U.S. Patent No. 11,697,028 were unpatentable. However, in an ITC proceeding involving the same claims, prior art and obviousness grounds, the Commission held that the claims were not invalid. The Board justified its determination because the ITC’s decision was not final at the time, because new evidence, such as expert testimony, was before the PTAB that was not before the ITC, and because of the different burdens of proof in the two forums. Sun Pharmaceuticals requested Director Review in March 2026.

Biofrontera Sciences, which had petitioned for inter partes review (IPR) of the ‘028 patent, argued along with the Board that the ITC’s “initial determination” was still under review and not final at the time the Board issued its FWD. “But an initial determination at the ITC may still favor terminating a co-pending IPR proceeding,” wrote USPTO Director John Squires yesterday. Squires pointed to Sinclair Pharma Ltd. v. Hydrafacial LLC, IPR2025-00145, Paper 41 (Director Feb. 12, 2026) for support of this view.

The decision added that “the purpose of AIA reviews is ‘to provide a quick and cost-effective alternative’ to litigating validity in other forums, not to provide a party with another forum for simultaneously litigating the identical dispute.”

Squires also noted that the ITC’s determination is no longer initial, as, on May 6, 2026, the Commission upheld the ALJ’s initial determination that the claims of the challenged patent had not been shown to be invalid as obvious.

Furthermore, Squires pointed to inconsistencies in the technical findings of the Board compared with the ITC, “with inadequate explanation from the Board for the inconsistencies.” For example, the ITC found that the petitioners had failed to show that the combination of two prior art references taught a particular limitation of the claims, and that “Petitioners’ ‘analysis fails to sufficiently show that it is free of improper hindsight.’”  The PTAB, however, held that the same limitation was disclosed by just one of the prior art references under the preponderance of the evidence standard. “The difference in the ITC’s and Board’s standards of proof does not, without more, explain this discrepancy in the findings between the two forums,” wrote Squires.

Biofrontera included testimony in its Supplemental Declaration that it said showed how the prior art combination involved in the ITC proceeding would meet the limitation, but Squires rejected this explanation as having come too late. “If the evidence was ‘critical,’ Petitioners should have included it in the Petition,” the decision said. “Instead, the record suggests that Petitioners used the Reply declaration to backfill gaps in the Petition and indirectly address the shortcomings that came to light, and that the ALJ eventually pointed out, in Petitioners’ same theory of obviousness before the ITC.”

The Director therefore vacated the PTAB’s decision and dismissed the IPR petition.

Desmarais LLP represented Sun Pharmaceuticals and Polsinelli represented Biofrontera.