Jul 23

Endo Pharma Patent Survives IPR Trial

19179334_sAmneal Pharmaceuticals came up short in its bid to knock out numerous claims of Endo Pharmaceuticals’ US Patent No. 8,329,216 in a Final Written Decision issued on July 22, 2015, Amneal Pharm., LLC v. Endo Pharm. Inc., IPR2014-00360. The ‘216 patent relates to oral controlled release pharmaceutical formulations comprising oxymorphone and related methods for pain relief. A strong lesson learned in this case is that arguments based on inherency can be difficult and it is important to introduce sufficient evidence to demonstrate that a purported “inherent disclosure” necessarily is present in the prior art. Bare expert testimony is often insufficient.

At the outset of its analysis, the PTAB construed “controlled release” and “about” from the claims of the ‘216 patent. The Board adopted Petitioner’s proposed constructions: 1) controlled release = release no more than about 80% of their active pharmaceutical ingredients within 60 minutes (taken from specification); and 2) about = at least the standard statistical error.

Petitioner’s obviousness argument was largely based on the contention that the prior art inherently disclosed a dissolution profile that required “two or three peaks” of blood plasma levels of the active ingredient. The vast majority of the Board’s decision discussed whether Petitioner had sufficiently shown that the prior art necessarily disclosed the claimed dissolution profile. For example, with regard to one of the grounds for unpatentability, Patent Owner attacked this argument by citing to certain clinical studies, including one disclosed to the FDA, that showed that two or three peaks did not necessarily occur. Petitioner sought to rebut this argument by explaining that the data in that clinical study was not tested frequently enough to show multiple peaks, but there was insufficient evidence provided on this point.

The takeaway from this case is that an argument based on inherent disclosure can be fact intensive and requires strong evidence that the limitation necessarily is in the prior art. Often, an expert declaration is not sufficient – certainly not one that merely states conclusorily that the property is inherent. Testing, reference to studies, etc. is required to prove this type of argument.

Jul 21

PTAB Highlights Motion to Amend Decision

iStock_000017878764XSmallAnother day, another key decision from the PTAB. This time, the Board has highlighted a Motion to Amend opinion entered in MasterImage 3D, Inc. v. RealD, Inc., IPR2015-00040, decided by six Administrative Patent Judges.

At threshold, the Board commented that Patent Owner’s request for a telephone conference to discuss its Motion to Amend (a requirement under 37 CFR 42.121) should have been requested earlier. The Board suggested that such conferences should be requested at least 10 business days before the due date for the motion.

Turning to the meat of the opinion, the Board pointed out that its decision was crafted to make three points of clarification relative to the requirement of the ubiquitous Idle Free decision regarding Motions to Amend. More specifically, the decision was directed to what was required for Patent Owner to show patentable distinction over the prior art of record and prior art known to the patent owner.

First, the Board pointed out that “prior art of record” is: a) material art in the prosecution history; b) material art in the current proceeding; and c) material art of record in any other proceeding before the Office involving the patent.

Second, the Board explained that “prior art known to the patent owner” should be understood as the material prior art that Patent Owner makes of record in the current proceeding pursuant to its duty of candor and good faith to the Office. In that light, a Patent Owner should place initial emphasis on the limitation(s) added to the claim in the Motion to Amend. Notably, the Board pointed out that information about the added limitation can be material even if it does not include all of the rest of the claim limitations.

Third, the Board made clear that, once Patent Owner has set forth a prima facie case of patentability for its narrower substitute claims over the prior art, the burden of production shifts to Petitioner. At that point, Petitioner can: a) explain why no prima facie case of patentability has been made, or b) rebut that prima facie case by addressing Patent Owner’s evidence and arguments and/or by identifying and applying additional prior art against the proposed substitute claims. Patent Owner will have, of course, the right to respond in its reply brief. The ultimate burden of persuasion remains with Patent Owner to demonstrate patentability.

Jul 20

PTAB Designates New “Informative Opinion”

InformativeWhen the PTAB considers one of its own decisions to be “informative,” it is always worth taking note. On Friday, July 17th, the Board designated its opinion in Arris Group, Inc. v. C-Cation Techs., IPR2015-00635 as informative, and we discuss its content below.

The Arris decision was a rare grant of a Motion for Additional Discovery relating to a the issue of privity between Petitioner and a third party who is barred from filing an IPR petition pursuant to 35 USC § 315(b). As a preliminary issue, the Board addressed Petitioner’s argument that the motion for additional discovery, which sought evidence relative to the 1-year bar of § 315(b), was barred because the privity issue had been resolved as part of an adverse judgment in a previous IPR between the parties. The Board disagreed, finding that the PTAB rules do not dictate that decisions in one proceeding have preclusive effect in subsequent proceedings. Order at 4. Further, res judicata did not apply because the previous IPR dealt with different claims than were at issue in the present IPR. Id. 

Turning to the discovery actually requested, the Board found that it was narrowly tailored and in the interest of justice. Specifically, Patent Owner only sought indemnification agreements referencing Petitioner’s ability to control co-pending litigation with the third party who would be barred from bringing an IPR. Given the narrowly-tailored request, the Board found that production of those agreements was in the interests of justice. The Board’s notification regarding the decision indicated that it was informative because of the narrowly-tailored request from Patent Owner. Given that guidance, we also reproduce the granted request below, for reference:

“Agreement(s) between [Petitioner] and [Third Party] under which [Third Party] requested indemnification for the claims brought against [Third Party] in the Texas Litigation that reference (or are contingent on) [Petitioner’s] ability to control the litigation.”

 

Jul 04

Motion for Additional Discovery Seeking Details of Kyle Bass-led Coalition Partially Succeeds

14029319_sWe continue to monitor the various strategies and tactics being employed by pharma companies that have been targeted by the “Coalition for Affordable Drugs” – a group led by hedge fund manager Kyle Bass. In a recent decision, the PTAB granted-in-part a pharma company’s attempts to dig into the background of the Bass-led coalition. Coalition for Affordable Drugs II LLC v. NPS Pharma., Inc., IPR2015-00990.

Motions for Additional Discovery have been difficult to win before the PTAB given the Board’s mandate to ensure that IPR proceedings are quick and cost-effective. To achieve that goal, of course, the discovery allowed much be far less than what is normally allowed in district court litigation.

In the NPS Pharma case, Patent Owner sought broad categories of information (in the form of 7 document requests and 2 interrogatories) relating to the entities that are funding Bass’ coalition. The Board rejected these broad discovery efforts, finding them overly broad and, therefore, not in the interest of justice. Order at 6. The Board did, however, agree that a threshold amount of evidence was presented that made some of the discovery necessary. Specifically, the Board allowed discovery into the agreements in the possession of Petitioner that relate to the control or ability to control any aspect of the IPR proceeding by a party that is not designated as a Petitioner or real party-in-interest in the Petition.

It seems likely that, if any such agreements exist, they will be put under seal in the IPR proceeding. However, we will keep a look out for them to see if we can learn more about this Bass-led group that has shaken the pharma industry.

Jul 02

Board Has Change of Heart On Rehearing

37396761_sA request for rehearing is generally considered the IPR equivalent of an end-of-the-game Hail Mary pass, but just like in football, sometimes it works, as illustrated by the Board’s reversal of its prior decision denying review in Handi Quilter, Inc. & Tacony Corporation v. Bernina International AG, IPR2013-00270.

The Board originally denied review based on its determination that the Petitioner only showed that a person of ordinary skill in the art could have combined the relied-on references, but not why the person of ordinary skill would have done so.  Decision at 2.  Following the Petitioner’s request for a hearing, though, the Board had a change of heart and decided to institute inter partes review.  Under 37 C.F.R. § 42.71(d), “[t]he burden of showing a decision should be modified lies with the party challenging the decision” and the rehearing “request must specifically identify all matters the party believes the Board misapprehended or overlooked.”  Decision at 23.  Petitioners here successfully argued that the Board had previously misapprehended its argument (supported by declaration testimony) that its primary reference (Watabe) itself provided sufficient rationale for why a person of ordinary skill in the art would have looked to the secondary references and combine them with Watabe.  Thus, the Board instituted review.

Jul 01

Board Disqualifies Reference As Not Meeting Requirements of 102(e)

iStock_000011114669SmallWe are reminded once again, by the Board’s decision denying review in Cisco Systems, Inc. v. Constellation Techs., LLC, IPR2014-00914, that 102(b) art is better than 102(e) art.  In Cisco, Petitioner relied on a reference (Riley) it asserted to be 102(e) prior art.  In making that argument, Petitioner had the burden of convincing the Board that the Riley reference was support by the two provisional applications to which it claimed priority.  Petitioner tried to meet that burden through expert declaration testimony.

The Board was not persuaded by the proffered testimony, which the Board found to be conclusory and thus entitled to little, if any, weight.  Decision at 23.  As a result, the earliest available priority date of the reference was after the priority date of the challenged patent.  Thus, the Board denied review as to the grounds which included the Riley reference.

The lesson here, as is the case with many aspects of IPR practice, is that if you need to prove a point, be sure to include specific, detailed analysis.

Jun 30

Lessons From the Rare Grant of an IPR Motion to Amend

19377657_sAlthough many Patent Owners have complained about the high hurdles for amending claims in an IPR, the Board’s decision in Riverbed Technology, Inc. v. Silver Peak Systems, Inc. IPR2013-00403 shows that the requirements are not impossible to meet.  In Riverbed, the Patent Owner filed a motion to amend which cancelled all existing claims, and proposed six amended claims. The Board found the Idle Free factors to be met as to two of the six proposed amended claims.  This case also illustrates the value in presenting well-grounded arguments (which the Petitioner is unable or unwilling to challenge), as opposed to arguments that stretch the facts.

(1)  No Broadening of Claim Scope.  The Board noted that Patent Owner’s substitute claims contained all limitations of an original claim and only added further limitations, meaning that the claim scope was not enlarged.  (In fact, the amendments were substantial, taking nearly a page of the Board’s decision to reproduce.).  Notably, the Petitioner did not dispute this point.  Decision at 12.

(2)  Provide Written Description Support. Patent Owner identified support in the original application (referring to paragraphs in the application, not column/line numbers in the issued patent) as to each added limitation of the substitute claims.  Here again, Petition did not dispute that the limitations had written description support.  The Board found that Patent Owner met Idle Free’s written description requirement.  Id. at 12-13.

(3)  Provide Claim Interpretation of New Claim Terms.  Patent Owner provided a table showing three new claim terms, and corresponding broad constructions based on description and figures in the ‘583 specification.  Patent Challenger did not argue that the proposed constructions were incorrect.  The Board agreed with Patent Owner’s proposed constructions, and further adopted the same construction for previously-interpreted claim terms.  Id. at 13-15.

(4) Demonstration of Patentability.   Patent Owner gave a detailed account of known processes (known to the Patent Owner, not just art of record) in the art similar to the substitute claimed process, and even pointed to Patent Challenger’s declaration and references relied upon as examples of the “old” process.  Patent Owner then identified how the new limitations of the substitute claims distinguished over the known process.  Id. at 16-19.  In fact, Patent Owner’s arguments as to claims 28 and 30 were essentially unrebutted by Petitioner.  Id. at 25.  Finally, Patent Owner addressed the knowledge of the ordinary artisan.  Patent Owner pointed again to the new limitations of the substitute claims, and explained how even the strongest art-of-record brought forth by Patent Challenger did not suggest that the specific process defined by the substitute claims was within knowledge of the ordinary artisan at the time of invention.  Id. at 20-22.  Further, Patent Owner provided explanation of how its substitute claimed process solved a problem in the art and was superior to the known process in arguing for nonobviousness.  Id. at 22-24.  The Board thus granted two of the proposed amended claims.

As to the other four proposed claims, though, the Board found Petitioner’s analysis lacking insofar as it failed to show a patentable distinction over the parent claims (the two granted amended claims) or for failure to propose a claim construction for means-plus-function limitations.  The Idle Free test remaining an exacting one.

Jun 25

Board Rejects Attempt to Add Testimony to Preliminary Response

33646123_sAs we have discussed, the proposed PATENT Act contains provisions that alter many facets of IPR proceedings. One of those potential changes is a new ability to include affidavits or declarations of supporting evidence and opinions to Patent Owner Preliminary Responses. A recent decision by the Board makes clear, however, that the Board is not going to jump the gun on this change. Masterimage 3D, Inc. v. Reald Inc., IPR2015-00876.

In Masterimage, Patent Owner sought to introduce deposition testimony from Petitioner’s expert that was given in related IPR proceedings. Patent Owner believed the testimony was helpful to the Preliminary Response, though it did not contradict any of the testimony provided in his declaration in this proceeding.

The Board declined to allow the introduction of the testimony at the Preliminary Response stage. Pursuant to the existing IPR regulations, new testimony may be permitted only where a party demonstrates it is in the interests of justice (i.e., where the evidence demonstrates that the trial may not be instituted). Because there was no allegation that the proffered testimony contradicted existing testimony, Patent Owner had not shown that presenting the evidence was in the interests of justice.

Jun 24

PTAB vs. Federal Circuit Update

cafc1To date, the Federal Circuit has weighed in on 15 PTAB decisions from inter partes review proceedings. In 3 of the 15 decisions, the Federal Circuit has issued a substantive opinion:

1) In re Cuozzo Speed Technologies – Affirming the Broadest Reasonable Interpretation claim construction standard;

2) Belden Inc. v. Berk-Tek LLC – Non-precedential decision; and

3) Microsoft Corp. v. Proxyconn, Inc. – First reversal of a PTAB decision, generally because the Board’s claim construction rulings were not reasonable because they did not follow general claim construction principles.

In 12 of those 15 decisions, the Federal Circuit has simply rubber-stamped the Board’s decision via a one sentence Rule 36 Judgment. This is, apparently, the manner in which the Federal Circuit is going to manage its anticipated spike in work due to appeals from decisions of the PTAB. This is a frustrating practice, however, as the growth of the law is stunted by the Federal Circuit’s refusal to address the issues raised in these appeals in any substantive way:

4) SoftView LLC v. Kyocera Corp. – Rule 36 Judgment

5) Clearlamp, LLC v. LKQ Corp. – Rule 36 Judgment

6) Board of Trustees v. Micron Technology, Inc. – Rule 36 Judgment

7) In re: Zillow, Inc. – Rule 36 Judgment

8) Helferich Patent Licensing v. CBS Interactive – Rule 36 Judgment

9) Luv N’Care Ltd. v. Munchkin, Inc. – Rule 36 Judgment

10) Emcore Corp. v. Nichia Corp. – Rule 36 Judgment

11) Mobile Scanning Technologies v. Motorola Solutions, Inc. – Rule 36 Judgment

12) In re Continental Automotive Systems – Rule 36 Judgment

13) Prolitec, Inc. v. Scentair Technologies, Inc. – Rule 36 Judgment

14) Neste Oil Oyj v. Reg Synthetic Fuels, LLC – Rule 36 Judgment

15) Bernina Int’l v. Handi Quilter – Rule 36 Judgment

We will keep this list updated over time.

 

Jun 16

Federal Circuit Reverses PTAB on IPR Decision For First Time

37860400_sThe Federal Circuit reversed the Patent Trial and Appeal Board for the first time today in an appeal from an inter partes review proceeding. Specifically, the Board’s decision that 8 claims were unpatentable was reversed and the case was remanded to the Board. Harness Dickey was lead counsel for Patent Owner in this successful appeal, so we will not comment on the merits, but attach the decision for your review.

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