Ninth Circuit Excludes Inter Partes Review Proceedings from Public Disclosure Bar and Greenlights Relator’s Qui Tam Claims Based on Patent Activity
In a recent decision, United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 2023 WL 4940429 (9th Cir. Aug. 3, 2023) (“Valeant”), the Ninth Circuit ruled that the False Claims Act’s (“FCA”) public disclosure bar does not apply to inter partes review (“IPR”) proceedings—holding that, unlike patent prosecutions, IPRs are not a qualifying channel for disclosures under the bar. The panel also ruled that the qualifying disclosures the Valeant defendants did identify did “not disclose a combination of facts sufficient to permit a reasonable inference of fraud.” The panel’s decision reversed a district court’s conclusion that the bar did apply, greenlighting the relator’s lawsuit to proceed to its merits.
Court Rejects Application of the Public Disclosure Bar Due to DOJ’s Opposition
On January 24, 2023, the United States District Court for the Middle District of Florida denied a motion to dismiss a qui tam suit premised on Anti-Kickback Statute (“AKS”) allegations, explaining that it could not dismiss the case because DOJ and several interested states had filed oppositions to application of the public disclosure bar. See United States ex rel. Marcus v. BioTek Labs, LLC, No. 8:18-cv-2915 (M.D. Fla. Jan. 24, 2023).
Ninth Circuit Construes Post-2010 Public Disclosure Bar to Include Facts Disclosed During a Patent Office Patent Prosecution
In United States ex rel. Silbersher v. Allergan, Inc., 2022 WL 3652967 (9th Cir. Aug. 26, 2022), the Ninth Circuit ruled that the FCA public disclosure bar, as amended in 2010, encompasses information provided to the U.S. Patent & Trademark Office (“PTO”) during a patent prosecution. Accordingly, a qui tam action premised entirely on materials obtained from PTO records is barred.
Massachusetts High Court Adopts Broad Reading of Commonwealth’s Public Disclosure Bar
In a May 2021 decision, the Massachusetts Supreme Judicial Court (“SJC”) affirmed the dismissal of a Massachusetts False Claims Act (“MFCA”) suit on the grounds that it was barred by the MFCA’s public disclosure bar. The suit, brought by relator Johan Rosenberg (“Relator”), alleged that Defendant banks conspired to engage in fraud in connection with resetting interest rates for certain municipal bonds known as “variable rate debt obligations” or VRDOs.
