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“The petition’s fundamental premise – that the majority affirmance is based on an ‘erroneous approach to appellate review’ – is simply incorrect.” – Norwich’s Brief in Opposition
A brief filed with the U.S. Supreme Court yesterday urged the Justices to deny a petition to the Court contending the U.S. Court of Appeals for the Federal Circuit (CAFC) has made a habit of making factual findings of its own rather than merely discussing and analyzing the district court’s findings, as it is required.
The petition was filed on September 11, 2024, by Salix Pharmaceuticals and stems from an April 2024 precedential decision of the Federal Circuit affirming a district court’s final judgment that certain claims of several patents owned by Salix for a drug used to treat irritable bowel syndrome (IBS) and other ailments were invalid as obvious. Judge Tiffany Cunningham dissented from the majority’s opinion as to the invalidity of the patents, in part because she said the majority made findings of fact in the first instance as to prior art references that were not relied upon by the district court for its reasonable expectation of success analysis.
The questions presented by the petition are:
“1. When a district court’s findings of fact are unsupported by the evidence the district court relied on, may a court of appeals affirm based on other evidence in the record, particularly when the relevance of that evidence depends on unresolved factual disputes.
2. When a district court’s findings of fact rely on impermissible evidence, what standard applies to determine whether the error is harmless.”
The United States District Court for the District of Delaware held several claims of Salix’s patents invalid as obvious. It also concluded that Norwich had failed to prove certain other claims invalid and found that Norwich infringed. Three of the patents are directed to treating hepatic encephalopathy (HE) while two are directed to treating IBS with diarrhea (IBS-D) and two others are polymorph patents. For a full analysis of the underlying case, see our coverage here.
On appeal, Salix argued that the district court reached its decision that the IBS-D and polymorph patents were invalid as obvious in error. Norwich had asserted two key pieces of prior art referred to as “the Protocol” and “Pimentel”. But the CAFC ultimately said there was no clear error in the district court’s finding that “a skilled artisan would have had a reasonable expectation of success in administering the claimed 1,650 mg/day regimen for the treatment of IBS-D” (which Salix argued is 40% higher than the 1,200mg/day dosage contemplated in the prior art); and that Grunenthal GMBH v. Alkem Laboratories Ltd., 919 F.3d 1333 (Fed. Cir. 2019) and Pharmacyclics LLC v. Alvogen, Inc., No. 2021-2270, 2022 WL 16943006 (Fed. Cir. Nov. 15, 2022) do “not rule out the possibility that polymorph patents could be found obvious.”
The CAFC said the Pharmacyclics case was not binding precedent on the district court and it was the district court’s prerogative to disagree with the Pharmacyclis ruling, even in light of the subsequently-issued CAFC ruling that affirmed the district court’s view in that case, since it wasn’t precedential.
Salix focused primarily in its Supreme Court petition on the Federal Circuit’s reliance on evidence Salix said was “never credited by the district court.” Specifically, the CAFC majority focused on a statement from Pimentel 2006 that said, “Recent data suggest that the optimal dosage of rifaximin may, in fact, be higher than that used in our study.”
But Salix pointed to Judge Cunningham’s dissent, which noted that “the district court only relied on this sentence in its motivation to combine analysis and did not rely on this sentence in its reasonable expectation of success analysis.” This error then led to the majority relying on “an impermissible piece of evidence,” said Salix—namely, a press release asserted by Norwich as prior art that Salix argued was not properly established as being “by others” under pre-America Invents Act rules. Salix said the CAFC determined any such error was harmless because other evidence established obviousness.
The petition urges the Supreme Court to hear the case in order to “realign the Federal Circuit’s appellate procedure with that of the other circuits and ensure that the same procedures—and same rules of appellate review—apply in patent appeals as in all other civil cases”; and to “provide helpful clarity regarding review of bench trials, both as to evidence unmentioned by the district court and improper evidence relied upon by the district court.”
However, Norwich’s brief in opposition, filed November 12, said the Federal Circuit’s decision was “not premised on new fact-finding” and “did not apply the harmless-error standard the petition contends is improper.”
“The petition’s fundamental premise – that the majority affirmance is based on an ‘erroneous approach to appellate review’ – is simply incorrect,” said the brief.
Furthermore, said Norwich, the cases relied upon in the petition to establish a pattern of “persistent fact-finding” are unconvincing. Two of the cases are nearly 40 years old, and an additional piece of evidence in the form of a quote from a speech given by CAFC Judge Lourie 2 4 years ago “is at best anecdotal evidence of judicial practice,” said the brief. The relevant excerpt from that speech is:
“[W]hile in a particular case, one might consider that a remand rather than a reversal is in order, we hesitate to send a case back to the district court when it is plain to us what the result will be. I believe most district judges would rather have the case decided by us rather than for us to be too finicky about reversing and send the case back for another trial.”
Salix argued this demonstrates “a particular temptation to overstep the ordinary limits of appellate review and decide patent appeals to reach what it views as the correct result,” but Norwich said that “the full speech conveys a practice of deference to trial courts’ fact-finding.”
Finally, said Norwich, the obviousness determination was simply correct and does not warrant further review.
Image Source: Deposit Photos
Author: iofoto
Image ID: 9522064
