In a recent opinion, the District Court of New Jersey held that a decision in a parallel proceeding at the Patent and Trademark Appeal Board (PTAB) does not give rise to collateral estoppel in the court proceeding.

The case concerns Sanofi Aventis’s (“Sanofi”) LANTUS® injectable insulin drug, indicated for the treatment of diabetes mellitus.

After filing an ANDA for insulin glargine, Sanofi sued Mylan in the District of New Jersey for infringement of two formulation patents listed in the FDA’s Orange Book in 2017.  Mylan submitted IPR petitions against these two patents later that year, arguing that the claimed formulations were obvious based on the original label for LANTUS®, dating from 2000 when it was first approved, and the knowledge of one of ordinary skill.  The PTAB issued Final Written Decisions in December 2018 that all the claims in each patent were obvious.

Mylan took this result to the District Court in New Jersey, moving for summary judgement of invalidity.  Its main argument was that the PTAB decisions collaterally estopped Sanofi from relitigating the obviousness of the two patents in the court proceeding.

Judge Chesler disagreed.  The doctrine of collateral estoppel holds that: “when an issue of fact or law is actually litigated and determined by a valid and final judgement, and the determination is essential to the judgement, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.”  The judge agreed with Sanofi’s argument that collateral estoppel did not apply because the burden of proof in the IPR, preponderance of the evidence, was different from that in the litigation, clear and convincing evidence.  He cited to the U.S. Supreme Court, stating “issues are not identical if the second action involves application of a different legal standard, even though the factual setting of both suits may be the same.”

Thus, the fact that a defendant is successful in an IPR challenge does not ensure that defendant will secure summary judgement of invalidity in court.  If the IPR result has not been successfully defended at the Federal Circuit, the defendant will still have to invalidate the patent in court using the clear and convincing standard, unless perhaps the defendant could convince the Court to stay the district court proceedings pending appellate review of the IPR decision.