“Obvious to Try” Rationale Insufficient to Institute IPR Trial Directed to Venlafaxine

5541491_sThe 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.

Pharmaceutical Filings on the Upswing as Power of IPR Becomes More Well-Known

11012665_s (1)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.