Financier’s Short-and-Petition Strategy Targets More Drugs: Nine and Counting

Authored by Maria Luisa Palmese and Eric Paul Greenwald

We recently referenced Coalition for Affordable Drugs LLC’s (“CFAD”) unconventional practice of filing inter partes review petitions seeking to invalidate patents covering approved drug products after obtaining a “short” position on the stock of companies marketing those drugs. CFAD leader Kyle Bass explains that the strategy is designed to increase returns for his investors while lowering drug prices. He does not address the long-term effect of this type of speculation on the pharmaceutical industry and pharmaceutical innovation. In February, we wrote about CFAD’s first IPR filing, which targets patent protection on Acorda Therapeutics’ multiple sclerosis drug Ampyra and reported that Acorda’s shares fell five percent in the two days following the filing . See IPR2015-00720. Last week’s filings bring the total IPR petitions to twelve and drugs targeted to nine, including Celgene Corp.’s multiple myeloma drugs Pomalyst, Thalomid and Revlimid and NPS Pharmaceuticals’ (now part of Shire PLC) short bowel syndrome drug Gattex. See IPR 2015-01096; IPR2015-01102; IPR2015-01103, and IPR2015-01093. The filings and share prices the day before, day of, and day after filing are summarized in the chart below. The chart also indicates whether CFAD challenged all Orange Book patents listed for the target drug. As can be seen, so far Shire PLC’s Lialda is the only drug for which CFAD has challenged all Orange Book patents listed.

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PTAB Rules on Scope of Estoppel Following Final Decision

Authored by Brian S. Mudge

In its first ruling on the scope of estoppel under 35 U.S.C. §315(e)(1) following a final IPR decision, the Board has denied institution of trial in a second IPR involving the same patent. The case, Dell, Inc. v. Electronics & Telecommunications Research Institute, IPR2015-00549 (PTAB March 26, 2015) (paper 10), involved an IPR brought in connection with U.S. patent no. 6,978,346. As a result of a final decision issued in a previously-instituted IPR involving the same patent, the PTAB determined that challenges to claims 1-3 and 5-8 of the ’346 patent were precluded under the estoppel provisions governing IPRs. In its ruling, the Board explained that the legislative history of the estoppel provisions suggests a broad interpretation of the scope of estoppel.

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Opening the Door: Broad Statement Leads to Compelled Discovery

Authored by Michelle Carniaux and Michael E. Sander

In litigation, parties often use broad statements to summarize their themes or attack an opposing party’s position, but in an inter partes review trial, broad statements regarding the state of the art prior to the invention can inadvertently open the door to discovery. In a recent decision, the Board used a patent owner’s broad statement as a reason to compel discovery of documents allegedly inconsistent with that statement. See IPR2014-00727, No. 37 Decision (April 14, 2015).

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Piling It On: Five Inter Partes Reviews Target Three Claims

Authored by Michelle Carniaux and Michael E. Sander

What happens when trials are instituted based on five inter partes review petitions filed by four petitioners, targeting just three claims in a single patent? This situation arose in connection with a patent owned by B.E. Tech., and recently resulted in five Final Written Decisions canceling the challenged claims. See IPR2014-00029 (Sony Mobile); IPR2014-00031 (Google); IPR2014-00033 (Google); IPR2014-00040 (Microsoft); IPR2014-00044 (Samsung).

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PTAB Crashers: A Who’s Who of Non-Practicing IPR Petitioners

Authored by Michelle Carniaux and Michael E. Sander

Although IPR proceedings were intended to provide those accused (or at risk of being accused) of patent infringement a faster and less costly proceeding to challenge the validity of a patent, it has also drawn the attention of outsiders. There are several types of “PTAB crashers,” each having its own motivation for challenging the validity of one or more patents. What they have in common is that each has filed one or more IPR petitions despite having no risk of being charged with infringement of the subject patent(s). To date, PTAB crashers account for 47 IPR petitions.

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