On Tuesday, April 26, 2016, the Federal Circuit issued an order denying a petition filed by Merck & Cie for rehearing en banc of an Inter Partes Review (“IPR”) final written decision by the Patent Trial and Appeal Board holding several Merck patents invalid as obvious. Merck & Cie v. Gnosis S.P.A. et al., Case No. 2014-1779 (Fed. Cir., Apr. 26, 2016). While sympathetic to the challenge that a patentee faces in defending patent validity on appeal under the lower “substantial evidence” standard, the Court affirmed its December 2015 ruling in Merck & CIE v. Gnosis S.P.A. et al., Case No. 2014-1779 (Fed. Cir., Dec. 17, 2015) that the “substantial evidence” review standard applies to post-grant review decisions by the Board.
In reaching its decision, the Court found itself bound by its In re Gartside precedent requiring that agency factual findings are to be reviewed for “substantial evidence.” Writing for the Court majority, Judge O’Malley explained that applying the “substantial evidence” standard to Board decisions is dictated by 5 U.S.C. § 706 of the Administrative Procedure Act and the U.S. Supreme Court’s ruling in Dickinson v. Zurko, 527 U.S. 150 (1999) that a more searching review for “clear error” applies only to “court/court” review and not “court/agency” review. Under the “substantial evidence” standard, the Court only inquires whether the agency could have reasonably made its decision as opposed to correctly made the decision given relevant evidence.