Sanctioning the “Spider”: Big Pharma Fights Back Against Kyle Bass’ IPR Campaigns

Authored by Michelle Carniaux and Michael E. Sander

Kyle Bass and his hedge fund Hayman Capital have become infamous for challenging the validity of patents owned by large biopharmaceutical companies, but now, “big pharma” is fighting back. On June 9, 2015, Celgene Corp. moved a step closer to ending Bass’ IPR reign of terror. In a set of IPRs challenging two patents owned by Celgene Corp. (IPR2015-01092,01096,1102,1103), the PTAB authorized briefing on a Motion for Sanctions over whether Bass and his related companies were, as alleged, “abus[ing] the IPR process for private financial gain.” IPR2015-01102, No. 7 at 6 (P.T.A.B. Jun. 9, 2015). Celgene argued that Bass intends to use the IPR process for the purpose of affecting the stock price of publicly traded companies, which is “not the purpose for which the IPR process was designed.” Id. Celgene also alleged that “one or more of the identified RPI previously threatened to file IPRs against the challenged patents unless Celgene met their demands.” Id. Celgene requested the Board to dismiss the petitions as a sanction for abuse of process and misuse of the IPR proceedings. Id.

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UPDATE – Back From the Dead: Misidentification of RPI Does Not Necessarily Lead to End of IPR

Authored by Michelle Carniaux and Michael E. Sander

In a previous blog post, we discussed challenges to IPR petitions filed by Valeo based on the failure to list all real parties in interest in their petitions:

In the petitions, the petitioners identified a number of real parties in interest, including “Valeo, Inc.” However, more than seven months prior to the petitions were filed, “Valeo, Inc.” ceased to exist as a result of corporate restructuring (a merger and name change). Valeo Inc.’s successor in interest, “Valeo North America, Inc.” was not named as a real party in interest in the petitions.

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Privy and Real Party in Interest – Joint Defense Groups and Trade Associations

Authored by Michelle Carniaux and Michael E. Sander

In addition to substantively attacking invalidity grounds raised in petitions for inter partes review (“IPR”), patent owners have attempted to prevent the initiation of IPRs based on procedural grounds. One such tactic is to take advantage of the bar against instituting an IPR of a patent if the petition requesting the IPR is filed more than 1 year after the IPR petitioner is served with a complaint alleging infringement of the patent. See 35 U.S.C. § 315(b). The one year bar applies not only to situations in which the petitioner was served with a complaint more than 1 year before filing the petition, but also to situations where the “real party in interest, or privy of the petitioner” was served with a complaint. Id. Thus, in some preliminary responses to petitions for IPR, patent owners have argued that an IPR should not be instituted since a real party interest, or privy to the petitioner (a party not named as a participant in the proceeding) was served with a complaint alleging infringement of the patent in issue more than 1 year before the IPR petition was filed.

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