The rate at which the Board denies inter partes review petitions has been climbing in recent months, and will be helped along by the Board’s denial of review in Neptune Generics v. Auspex Pharm., IPR2015-01313. Neptune Generics filed a challenge to Auspex Pharmaceuticals’ patent no. 7,456,317, which covers a “deuterated form of venlafaxine, an inhibitor of monoamine neurotransmitters.” The Board found the prior art did not teach the patented substitution of deuterium for hydrogen, nor that such a substitution would have been obvious to try, and thus denied review of all challenged claims.
The patent taught that the deuterated form is more stable (and thus has better pharmacokinetics and toxicity profiles) than normal venlafaxine. Petitioner asserted that it would have been obvious to substitute deuterium (an isotope of hydrogen) for the hydrogen in venlafaxine. Petitioner relied on two pieces of prior art: Fogelman, showing the transformation of venlafaxine into its two major metabolites; and Miwa, showing a carbon-deuterium bond is stronger than a carbon-hydrogen. Petitioner argued, with a supporting expert declaration, that a person of ordinary skill would have used Miwa’s teaching (not directed to venlafaxine) to modify venlafaxine because cleavage of hydrogen (via a hydroxyl group) is part of venlafaxine’s metabolism. The Board found the record did not establish that a person of ordinary skill in the art would have been motivated to modify venlafaxine to change its metabolism, and, further, that the effect of the substitution explained by Miwa is unpredictable and varies depending on what compound it is applied to, and there was no specific teaching to modify venlafaxine in that way (or a reasonable expectation of success). Further, Petitioner failed to show that switching deuterium for hydrogen would have been obvious to try, because there are over 124 million possible deuterated forms of venlafaxine, and no prior art teaching as to which should be used.
In the pharma space, “obvious to try” challenges are common. It is interesting to see the Board’s treatment of the issue here, and another IPR bullet dodged by a pharma patent owner.
The Wall Street Journal has taken note of recent IPR filings by hedge fund manager Kyle Bass against certain pharmaceutical patent portfolios. Our Matt Cutler was quoted in one of the articles. The other can be found HERE.
Mr. Bass seems to be an early pioneer in realizing the power of inter partes review, and has opened the eyes of investors in the pharma industry. While Mr. Bass suggests that his actions are intended to open up the pharma industry to more competition by eliminating bad patents, today’s WSJ article quotes sources that believe his motives are more dubious – creating negative news for certain pharma companies that help with short sale bets against those companies.
Whether his bets are long or short, however, Mr. Bass has hit on a strategy that recognizes the strong, negative impact IPR has had to date on pharmaceutical patents. Our data shows that 87% of pharma patent claims that are subject to an IPR trial are ultimately deemed unpatentable. This is among the highest claim kill rates for any technology area.
As a result, we expect pharma-related IPR filings to continue to grow, and not just from hedge fund managers looking to make a quick buck.
Momentum is growing in the filing of inter partes petitions by drug companies seeking to invalidated Orange Book patents. We will be keeping a close eye on some of the issues that are unique to these pharmaceutical IPR proceedings, including Noven Pharm., Inc. v. Novartis AG and LTS Lohmann Therapie-Systeme AG, IPR2014-00550, involving US Pat. No. 6,335,031. In this case, the PTAB considered whether the filing of a Paragraph IV certification constitutes a “civil action” for inter partes review purposes, barring the filing of an IPR petition.
In its preliminary response, Patent Owner argued that the petition-at-issue was barred pursuant to 35 U.S.C. § 315(a) because Petitioner filed a Paragraph IV certification with the FDA prior to filing the IPR petition. § 315(a) states that an IPR shall not be instituted if petitioner filed a “civil action,” challenging validity of the patent, prior to filing the IPR petition. Petitioner argued that, because of the Paragraph IV certification stated that the ‘031 patent was invalid, Patent Owner was forced to bring a civil action to defend the ‘031 patent. Decision at 6. Thus, even though it was Patent Owner that actually filed the civil action, Petitioner’s action in filing the Paragraph IV certification should be considered the filing of a civil action. Id. at 7.
The Board disagreed, determining that, when § 315(a) refers to a “civil action,” it means the filing a complaint with a court. Though Petitioner’s filing of a Paragraph IV certification with the FDA was a form of challenge to the ‘031 validity, it was not a filing of complaint with a court. Therefore, the Petition is not barred. Id. at 7.