Authored by Michelle Carniaux and Michael E. Sander
In what now seems to be part of a trend, two new petitions for inter partes review were recently filed by what appear to be hedge funds and financiers targeting patents owned by large pharmaceutical companies. Last week, Ferrum Ferro Capital, LLC (“Ferrum”) filed a petition for inter partes review against a single claim of a patent owned by Allergan Sales, LLC (“Allergan”). See IPR2015-00858, No. 1 Petition (P.T.A.B. Mar. 9, 2015). The claim at issue relates to the treatment of glaucoma by administering two known active ingredients, timolol and brimonidine, in a single composition. The claim previously survived a lengthy litigation against generic drug manufacturer, Sandoz, Inc. Eventually, the Federal Circuit agreed with the district court that Sandoz had not proven that the claim was invalid as obvious. See Allergan, Inc. v. Sandoz Inc., 11-1619 (Fed. Cir. May. 1, 2013).
Fast forward nearly two years later, and the same claim is being challenged again, this time by Ferrum in the PTAB. Ferrum describes itself as “a privately-held venture focused upon innovation, the strategic deployment of capital towards socially beneficial ends, and related investment strategies.” Petition at 2. The IPR petition relies on what appears to be substantially the same prior art as the prior art already considered in the case against Sandoz.
So why would Ferrum expect to succeed in the PTAB when validity of the same claim had already been upheld by the Federal Circuit? Ferrum essentially relies on the alleged differences between the “broadest reasonable interpretation” standard for claim construction, as used by the PTAB, and the principles of claim constructions as set forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005), as used by courts to interpret claims in a litigation. IPR2015-00858, No. 1 Petition at 16 (P.T.A.B. Mar. 9, 2015). According to Ferrum, although the corresponding composition claims were found to be invalid, the claim survived only because two of the three judges of a Federal Circuit panel found certain claim language to be a limitation. The third judge disagreed. Ferrum essentially argues that the third judge’s claim construction (the particular claim language does not limit the scope of the claim) is the broadest reasonable interpretation; thus, the claim is invalid for substantially the same reasons that the composition claims were found to be invalid.
Ferrum is not the first investment company attacking pharmaceutical patents. We previously wrote about the Coalition for Affordable Drugs, and their “activist” leader Kyle Bass’s alleged strategy to short pharmaceutical companies and invalidate their patents. It appears that Mr. Bass has fired another salvo against Acorda, on a patent relating to a treatment for multiple sclerosis. See IPR2015-00817.
Given that three of these unconventional inter partes reviews have been filed in less than a month, we will be watching closely whether this trend continues.