Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc.
889 F.3d 1274
| Fed. Cir. | 2018Background
- Altaire manufactured R-phenylephrine HCl ophthalmic solutions and provided testing (HPLC called TMQC-247 and optical rotation) to Paragon during an NDA process; Paragon obtained FDA approval and later obtained U.S. Patent No. 8,859,623 covering compositions/methods requiring ≥95% chiral purity and storage -10 to 10°C.
- Altaire petitioned for post-grant review (PGR) arguing claims 1–13 of the '623 patent were obvious over Altaire production Lots #11578/11581 and submitted Al Sawaya declarations plus TMQC-247 and optical rotation data.
- PTAB instituted PGR but in its Final Written Decision gave no weight to Al Sawaya’s testimony (found him not timely qualified as expert), refused to consider some reply exhibits about TMQC-247, and rejected optical rotation data as unpersuasive under 37 C.F.R. § 42.65(b).
- Altaire appealed, asserting Article III standing (threat of imminent infringement suit if Agreement terminates or is terminated) and that PTAB abused discretion/violated APA by excluding evidence.
- The Federal Circuit majority held Altaire has Article III standing, reversed-in-part and vacated PTAB’s evidentiary rulings, and remanded for PTAB to consider Al Sawaya’s testimony and the TMQC-247 and optical rotation evidence under § 42.65(b).
- Judge Schall dissented, arguing Altaire lacked standing because any infringement risk is speculative while the parties remain bound by a contract expiring in 2021 and litigation outcomes are uncertain.
Issues
| Issue | Plaintiff's Argument (Altaire) | Defendant's Argument (Paragon) | Held |
|---|---|---|---|
| Article III standing to appeal PTAB decision | Altaire faces imminent threat of suit if Agreement ends or is terminated; reputational/operational injury and estoppel risk from § 325(e)(2) | No imminent injury: Altaire not currently infringing; future infringement contingent and speculative; reputational harm not redressable by PGR | Court: Altaire has standing (imminent injury shown by pending termination claim, intent to file ANDA, refusal to stipulate non-suit; estoppel concern supports injury) |
| Admissibility/consideration of Al Sawaya declarations | Declarations and resume show Al Sawaya is qualified; second declaration properly replied to Patent Owner Response and rebutted challenges | PTAB: First declaration insufficient to qualify him as expert; Second declaration is improper reply evidence and untimely | Court: PTAB abused discretion; §42.65(b) does not require expert affidavit; second declaration responded to issues raised—PTAB must consider Al Sawaya testimony on remand |
| TMQC-247 HPLC test data admissibility under §42.65(b) | Altaire submitted TMQC-247 validation and showed Paragon previously relied on these data with FDA; additional detail in reply properly responsive to Patent Owner Response | Paragon argued TMQC-247 did not meet §42.65(b) and challenged reliability; PTAB excluded reply exhibits as untimely | Court: PTAB abused discretion in refusing to consider reply exhibits and must re-evaluate TMQC-247 materiality and compliance with §42.65(b) on remand |
| Optical rotation data reliability | Optical rotation is known in the art to measure chiral purity; Paragon accepted such data in FDA submissions; Altaire provided supporting affidavit/testimony | Paragon challenged accuracy of inferring enantiomeric purity from optical rotation and noted lack of §42.65(b) affidavit | Court: PTAB erred to the extent it rejected optical rotation evidence based on exclusion of Al Sawaya and reply exhibits; must reassess reliability under §42.65(b) on remand |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. 2016) (standing requires concrete and particularized injury)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (three-part standing test and injury-in-fact standard)
- Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168 (Fed. Cir. 2017) (standing burden and showing in appeals from agency final action)
- Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (U.S. 1950) (proof may be through experts or others versed in technology)
- Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064 (Fed. Cir. 2015) (reply evidence that responds to Patent Owner Response may be proper; PBtB discretion on surreplies)
- Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (agency refusal to consider record evidence bearing on issue may be arbitrary and capricious)