Fish Obtains First PGR Reversal at Federal Circuit in Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc.

Fish & Richardson has obtained the first appellate reversal of a Post-Grant Review (PGR) proceeding at the United States Court of Appeals for the Federal Circuit since the proceedings were first implemented in 2012.

Fish's client, Altaire Pharmaceuticals, appealed a decision of the Patent Trial and Appeal Board (PTAB) in a PGR proceeding confirming the claims of a patent owned by Paragon after the PTAB excluded much of Altaire's evidence of obviousness. The two parties initially entered into an agreement wherein Paragon would seek FDA approval for pharmaceutical eye drops formulated and manufactured by Altaire. However, tension arose between the parties after Altaire alleged that Paragon took confidential information Altaire had been using in its products for years and obtained a patent on it. Although the parties have a contract to sell the product together until 2021, Paragon's patent does not expire until several years later, leading Altaire to become concerned that Paragon would pursue an infringement action against it once the contract expires.

Altaire instituted PGR proceedings at the USPTO against Paragon, asserting that the claims of the patent were obvious over Altaire's own prior products. A key issue in the case was whether Altaire's prior products met certain "chiral purity" limitations in the patented claims, which involved several different methods of testing the products. The PTAB ruled against Altaire, holding that it had not proven obviousness because it failed to submit sufficient information as to how it conducted its testing. After Fish took over the matter from another firm, the Federal Circuit reversed on appeal. Fish convinced the court that Altaire could not have expected that it should have submitted additional information about the testing because Paragon itself had relied on the same testing in obtaining FDA approval for its product, and thus could not have been expected to challenge its reliability at the PTAB. Fish also convinced the court that Altaire had standing to maintain the appeal, despite that issue being hotly contested by Paragon.

Altaire is the first Federal Circuit reversal of a PTAB judgment in a PGR case since the proceedings were authorized by the America Invents Act in 2012. Although this case was challenging because the Federal Circuit applied a highly deferential "abuse of discretion" standard to the PTAB's decision, Fish overcame the challenge by presenting the court with the entire history of the parties' relationship and dispute. Besides being the first Federal Circuit reversal of a PGR decision, the case is also significant because it sets a new precedent for standing in post-grant proceedings. The court found that Altaire had standing even though it was not infringing the patent at issue at the time of the suit, establishing that future injury may be sufficient to satisfy injury in fact if the threat is real and imminent. Thus, Altaire likely will have broad applicability to other appeals currently before the Federal Circuit.