Borrowing from the Board: District Court Obviousness in the Post-IPR Era

In Otsuka Pharmaceutical Co. v. Lupin Ltd., No. 24-2297 (Fed. Cir. May 21, 2026) (nonprecedential), a Federal Circuit panel affirmed Judge Andrews’s bench-trial judgment that Lupin’s tolvaptan ANDA process does not infringe Otsuka’s U.S. Patent Nos. 8,273,735 and 8,501,730, and that the asserted method claims are invalid as obvious over Kondo’s 1999 small-scale synthesis paper.

I want to use this fact-bound affirmance as a vehicle for a broader doctrinal point. With Director Squires having effectively shut down inter partes review for most filers, district courts are now being asked to step up and do the §103 obviousness invalidation work. The PTAB has spent more than a decade building out the operational process of obviousness adjudication, with thousands of final written decisions parsing motivation to combine, motivation to modify, reasonable expectation of success, lead compound and lead reference selection, and the weighing of secondary considerations. That body of decisional law is the most extensive working corpus of patent obviousness doctrine in the United States. For bench trials, where the judge wears the factfinder hat, that corpus should be treated as persuasive authority and cited directly. For jury trials, the same corpus is much harder to deploy because the PTAB did the bulk of its work as a factfinder, and that role belongs to the jury, not the court.

Pre-AIA, defense counsel often steered away from §103 invalidity in district court and were especially wary of putting obviousness to a jury. The presumption of validity and clear-and-convincing burden, and the natural complexity of almost every patent made an obviousness finding seem like a long shot.  But, I believe we are at a different place now. The PTAB has cancelled thousands of claims on obviousness grounds over the past dozen years, demonstrating that many issued patents have §103 vulnerabilities that may also be exploited in district court litigation.

The patents here cover highly pure tolvaptan (approved for Autosomal Dominant Polycystic Kidney Disease) and also methods of producing the compound.  They teach reducing the amount of sodium borohydride hydrogenating agent to 0.25–1 molar equivalents per mole of benzazepine precursor as a way to reduce impurities. Lupin’s process uses at least 1.2 molar equivalents and the district court found no infringement (after some claim construction wrangling).

But, I want to focus more on the obviousness analysis for this post. Judge Andrews found that a skilled artisan would be motivated to select Kondo’s 1999 article (which discloses small-scale tolvaptan synthesis using 1.5 molar equivalents of sodium borohydride) as a starting reference. Second, the artisan would be motivated to select the reduction step within Kondo for modification. Third, the artisan would be motivated to reduce the amount of sodium borohydride in that step. Fourth, there was a reasonable expectation of success. Fifth, secondary considerations did not overcome the prima facie case.  Each of these moves has been litigated hundreds of times at the PTAB.

Before the current administration, the implicit division of labor was that PTAB resolved most validity challenges based on patents and printed publications, while district courts retained the cases involving on-sale bar, public-use, inventorship, written description, and enablement disputes that the Board cannot address under 35 U.S.C. § 311(b). Hatch-Waxman ANDA cases ran on both tracks, with parallel IPRs frequently mooting district-court invalidity issues. Director Squires has now upended that division. Institution numbers have collapsed. Patent challengers who would have filed IPRs are now filing affirmative defenses in district court.

I expect this means district-court obviousness law is going to develop faster than it has in a decade. But, we’re at a new place with obviousness jurisprudence alone because of all those Board opinions.  I would strongly recommend bench judges in patent cases to review and consider this body of work as persuasive authority.

Two caveats need to be in the foreground. First, the burdens of proof differ. The PTAB applies preponderance of the evidence; district courts apply the higher standard of clear and convincing evidence. A PTAB conclusion that the prior art “would have motivated” a skilled artisan is reached on a lower evidentiary footing, so a bench judge cannot simply transplant the conclusion. The methodology travels; the conclusion does not. Second, the standards of review differ. The Federal Circuit reviews PTAB fact-findings for substantial evidence and district court fact-findings for clear error. Both are deferential, but they are not identical, and a panel that defers to a PTAB motivation finding may not have endorsed the underlying reasoning as a matter of law.

The proposal works for bench trials. It works much less well for jury trials because of the structural differences.  Under Graham v. John Deere Co., 383 U.S. 1 (1966), obviousness is a question of law based on four subsidiary factual findings: scope and content of the prior art, differences between the prior art and the claims, level of ordinary skill, and secondary considerations. The Federal Circuit has long treated those subsidiary findings as jury questions in jury trials. And the jury does not read PTAB opinions and generally should not be instructed at that level of detail.

The accumulated body of PTAB obviousness reasoning is largely unavailable to the jury fact-finder in the way it would be available to a bench judge sitting as fact-finder. Pattern jury instructions necessarily generalize the legal framework rather than communicate factual pattern-recognition that a judge might find in PTAB panels. The judge presiding over a jury trial can use PTAB precedent at the margins, but cannot substitute the Board’s reasoning for the jury’s verdict.

The practical consequence is that district court obviousness law will develop on two parallel tracks. Bench trials, concentrated in ANDA litigation in Delaware and New Jersey, will increasingly look like extended PTAB proceedings, with the same lead-reference framework, the same motivation analysis, the same secondary considerations weighting, and the same skepticism of unexpected-results showings that lack a proper comparator. Jury trials, concentrated in the Eastern and Western Districts of Texas and to a lesser degree the Northern District of California, will continue to operate at a higher level of generality, with verdicts driven by jury instructions, expert credibility, and the rhetorical framing of motivation to combine.

Otsuka v. Lupin is on the bench-trial side of that divide, and Judge Andrews’s opinion is in many respects indistinguishable from a careful PTAB final written decision. The Federal Circuit’s modest affirmance here validates the bench-trial pathway as the new center of gravity for §103 invalidation.