The Federal Circuit has held that it was reversible error for a district court to render a patent invalid on a basis not advanced by any party during litigation. Astellas Pharma Inc. v. Sandoz Inc., No. 23-2032, __ F.4th __ (Fed. Cir. Sept. 18, 2024). 

The asserted claims of U.S. Patent 10,842,780 (“the '780 patent”) were directed to a sustained-release pharmaceutical composition comprising mirabegron for the treatment of overactive bladder (“OAB”). The patentee had discovered that immediate-release formulations of mirabegron exhibited an undesirable “food effect,” in that when patients took the drug with a meal, the levels of mirabegron absorbed into the blood were too low to impart any therapeutic benefit. But when taken on an empty stomach, mirabegron was absorbed too rapidly, reaching potentially toxic concentrations in the blood. To solve this problem, the patentee developed sustained-release formulations of mirabegron, which abated this undesirable food effect. And those formulations were covered by the claims of the '780 patent.

The defendant in this case did not pursue an invalidity defense under 35 U.S.C. § 101 during the discovery phase of the litigation, and later stipluated to limit its invalidity defenses to only those arising under § 112. During the five-day bench trial on infringement and validity, there was no discussion or argument from the parties as to the patent eligibility of the asserted claims. Nor did that issue arise in the parties' post-trial briefing.

Nonetheless, the district court later determined, sua sponte, that the asserted patent claims were invalid under 35 U.S.C. § 101 as directed to an ineligible natural law, relying on a statement in the plaintiff's post-trial briefing, that, in the context of enablement under § 112, the “inventive concept of the '780 Patent was discovering the dissolution rate that would address the food effect and achieving it using previously known formulation technology,” which the district court construed as conceding “that the '780 patent is enabled because it claims invalid subject matter: a natural law applied via routine, conventional, and well-known methods.”

The Federal Circuit, however, noted that in our adversarily legal system, the principle of "party presentation" means that the parties frame the issues for decision while the courts are assigned "the role of neutral arbiter of matters the parties present." 

     Here, the district court appears to have misapprehended its role in adjudicating the issue of patentability. It interpreted Astellas's “zealous defense” on issues of § 112 as “conced[ing] that the '780 patent is enabled because it claims invalid subject matter: a natural law applied via routine, conventional, and well-known methods.” Decision at *1. It then used that “concession” to hold the patent invalid on a ground never advanced by Sandoz. That was an abuse of discretion. Curiously, the district court did appear to appreciate that the issue of patent eligibility was not asserted by Sandoz. In its denial of Sandoz's Rule 52(b) motion, the court acknowledged Sandoz's “worry [that] the parties inadequately raised the matter of subject-matter eligibility at trial or in briefing.” Rule 52(b) Decision, J.A. 8512. But it deemed that worry unwarranted because of the “fundamental flaw” it sensed “in the [parties'] assertion that patent litigants may, in essence, consent around the bounds of patent eligibility.” Id. And therein lies the problem. It is for the parties—not the court—to chart the course of the litigation. See Lannom Mfg. Co. v. U.S. Int'l Trade Comm'n, 799 F.2d 1572, 1579 (Fed. Cir. 1986) (“It is beyond cavil that a district court does not have authority to invalidate a patent at its own initiative if validity is not challenged by a party.”).

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It appears that the district court believed patent eligibility under 35 U.S.C. § 101 to be a threshold inquiry that it had a duty to address—even in the silence of the parties—akin to, for example, subject-matter jurisdiction. But the presumption of validity afforded to patents under § 282 applies equally to all grounds of validity, including the eligibility of the claimed subject-matter.... Accordingly, to the extent the district court believed that validity under § 101 is treated any differently than validity under §§ 102, 103, and 112 for purposes of the party presentation principle, that was error.

The Federal Circuit held that the district court had abused its discretion, and remanded the case for adjudication of the issues properly raised and adequately supported by the record which "are limited to infringement and validity under 35 U.S.C. § 112."