Federal Circuit Declines to Take Up Winning-Petitioner Estoppel

The Federal Circuit recently declined to consider whether a successful IPR petitioner is estopped from making its winning invalidity arguments in district court. If a winning petitioner does face estoppel, its arguments may be limited to those which could not have been brought through IPR when parallel litigation on the same patent proceeds pending rehearing or appeal of the IPR decision. This view of estoppel would shake up the carefully choreographed interplay between district court litigation and FDA approval of a generic manufacturer’s ANDA envisioned by the Hatch-Waxman Act. However, in BTG International Ltd. v. Amneal Pharmaceuticals LLC, the court found the issue moot after upholding the PTAB’s decision finding the challenged claims obvious.

BTG and Janssen filed Hatch-Waxman cases against various drug makers who were seeking to launch generic versions of the prostate cancer drug Zytiga. This prompted the generic defendants to file IPR petitions against the asserted patent, which resulted in final written decisions finding all claims obvious. While rehearing requests were pending, the district court proceeded to a consolidated trial. The court found the patent invalid on the same grounds raised in the IPRs, over the plaintiffs’ objection that the defendants were estopped from making the same obviousness arguments under 35 U.S.C. § 315(e)(2). The Board subsequently denied rehearing, and the Federal Circuit heard a consolidated appeal of the IPRs and district court decision. 

While the outcome of the case makes intuitive sense in that both the PTO and district court found the brand’s patent invalid, BTG argued to the Federal Circuit that the IPR estoppel provision should apply to winning petitioners as well as those who have lost. The PTO also supported this interpretation of the estoppel provision in an amicus brief. The provision bars a petitioner from asserting invalidity arguments in district court on grounds it “raised or reasonably could have raised” during IPR.

Increasingly, courts have been adopting a broad reading of the estoppel provision, finding that it bars not only grounds actually included in a petition, but any ground that could have been included—i.e., any anticipation or obviousness argument based on patents or printed publications. Thus, a winning petitioner would find its invalidity defenses in district court litigation limited to those arguments that are statutorily prohibited from being included in an IPR petition (pending rehearing or appeal of the IPR decision). Not only could this result in a district court being prohibited from hearing a defendant’s best arguments in the general context, but it also has further ripple effects in the context of ANDA litigation where a district court’s decision affects the FDA’s approval of the generic’s ANDA.

Enforcing the estoppel provision on generic defendants in Hatch-Waxman litigation could result in delayed generic approval. Upon a finding of infringement, the district court would order the FDA to delay the effective date of ANDA approval until the expiration of the patent. But if a generic that had a successful IPR is estopped from raising the same winning invalidity defenses in district court, the district court may be forced to make a finding of infringement on a potentially invalid patent and enjoin the FDA from approving the ANDA. The injunction would therefore be based on incomplete information because the district court was prohibited from hearing the generic’s best invalidity arguments. Such injunctions would then continue to be in force at least until the winning IPR is upheld at the Federal Circuit.

Enforcing the estoppel provision on generics winning at IPR would also shift the incentives that flow from the carefully choreographed 30-month stay. Currently, when a brand company sues a generic under the Hatch-Waxman Act, the FDA’s approval of the generic’s ANDA is stayed for 30 months to allow for the completion of the litigation through Federal Circuit appeal. But if generics that win in IPR are estopped from bringing their winning arguments to trial at the district court, they have a strong incentive to seek to stay the district court litigation to avoid any potential inconsistency with the outcome of the IPR process.

This stay, however, would in almost all circumstances extend the timeline of district court litigation and ensuing appeal well past the 30-month mark, allowing the FDA to approve the generic’s ANDA before the patent litigation is completed. This would allow the generic to launch at-risk if it so chose. While the patent owner may seek to extend the 30-month stay, a court’s ability to do so in these circumstances is far from clear. Enforcing the estoppel provisions against generics winning their IPRs thus creates less certainty in the carefully choreographed timeline between district court litigation and FDA approval. 


The Federal Circuit ultimately held the patent at issue in this case invalid, but left the estoppel issue for another day. Until the court provides clarity on whether estoppel applies to petitioners who win in IPR, petitioners should consider moving to stay parallel litigation. In Hatch-Waxman cases, to minimize the possibility of an at-risk launch, the patent owner should oppose the litigation stay so that the 30-month stay of ANDA approval does not expire during appeal of the IPR decision. The patent owner should also request that, should the court nevertheless stay the litigation, it also extend the 30-month stay.