Post-Grant Year in Review

Transcription

1 January 13, 2016 Post-Grant for Practitioners Post-Grant Year in Review Karl Renner Principal, Post-Grant Practice Co-Chair Dorothy Whelan Principal, Post-Grant Practice Co-Chair

2 Agenda I. Overview of Webinar Series II. Statistics III. Developments in IPR Practice in 2015 IV. Post-Grant Resources 2

3 Overview of Webinar Series 3

4 Overview Where? see invitation How often? monthly When? 2 nd Wednesday Topics? Important decisions Developments Practice tips Housekeeping CLE Questions Materials 4

5 Statistics 5

6 FY2015 Statistics *Cumulative since 9/16/2012 Source: PTAB Statistics, FY2015, 6

7 Statistics *Cumulative since 9/16/2012 Source: PTAB Statistics, FY2015, 7

8 FY2015 Statistics Source: PTAB Statistics, FY2015, 8

9 FY2015 Statistics Source: PTAB Statistics, FY2015, 9

10 FY2015 Statistics Source: PTAB Statistics, FY2015, 10

11 FY2015 Statistics Source: PTAB Statistics, FY2015, 11

12 Developments in IPR Practice in

13 Post-Grant for Practitioners Topics AIA Patent Trials: The New Proposed Rules NPEs, Strong Patents Act & the Revised Innovation Act Bass and Bio-Pharma Developments Estoppel, Broadest Reasonable Interpretation The PTAB s Discretion 13

14 AIA Patent Trials: The New Proposed Rules 14

15 Post-Grant for Practitioners Topics Preliminary Response Declarations Rule 11 Certification Word Count BRI Claim Construction Oral Hearing Exhibit Timing No Claim Amendment Rules 15

16 Post-Grant for Practitioners Preliminary Response Declarations 16

17 Post-Grant for Practitioners Preliminary Response Declarations Evidence viewed in Petitioner s favor and possible surreply 37 CFR 108 ***** (c) Sufficient grounds. Inter partes review shall not be instituted for a ground of unpatentability unless the Board decides that the petition supporting the ground would demonstrate that there is a reasonable likelihood that at least one of the claims challenged in the petition is unpatentable. The Board's decision will take into account a patent owner preliminary response where such a response is filed, but supporting evidence concerning disputed material facts will be viewed in the light most favorable to the petitioner for purposes of deciding whether to institute an inter partes review. If the patent owner submits supporting evidence with its preliminary response, the petitioner may seek leave to file a reply to the preliminary response in accordance with 42.24(c). 17

18 Post-Grant for Practitioners Preliminary Response Declarations Will preliminary response declarations be common? Claim construction? How often will surreplies be sought? Granted? Is viewed in the light most favorable to the petitioner significant? What evidence should Patent Owners save for post institution? 18

19 Post-Grant for Practitioners Rule 11 Certification New power for sanctions To further attempt to prevent any misuse of the AIA proceedings, the Office proposes to amend 42.11, which prescribes the duty of candor owed to the Office, to include a Rule 11-type certification for all papers filed with the Board with a provision for sanctions for noncompliance. The Board also may refer possible misconduct in the course of AIA proceedings to the Office of Enrollment and Discipline for investigation and, if warranted, further proceedings under 37 CFR

20 Post-Grant for Practitioners Word Count 37 CFR Word count replaces page limits (mostly does not apply to motions, including motions to amend) 20

21 Post-Grant for Practitioners Word Count Argument in claim charts still a concern? Freedom to compose persuasively Wall of text Good Great 21

22 Post-Grant for Practitioners BRI Claim Construction BRI applies for patents expiring after FWD 37 CFR 100 (a) An inter partes review is a trial subject to the procedures set forth in subpart A of this part. (b) A claim in an unexpired patent that will not expire before a final written decision is issued shall be given its broadest reasonable construction in light of the specification of the patent in which it appears. ***** [same for 37 CFR 200 (PGR) and 37 CFR 300 (CBM)] 22

23 Post-Grant for Practitioners BRI Claim Construction The Office agrees that the application of a Phillips-type claim construction for claims of a patent that will expire prior to the issuance of a final decision is appropriate. Such patents essentially lack any viable opportunity to amend the claims in an AIA proceeding. Therefore, for patents that will expire prior to issuance of any final written decision by the Office, the Office proposes to apply a Phillipstype standard during the proceeding. Phillips will apply even before expiring, if expected to expire before FWD 23

24 Post-Grant for Practitioners Oral Hearing Exhibit Timing 24

25 Post-Grant for Practitioners No Claim Amendment Rules Rule-making will be by precedential/informative opinions Absent a change in statutory authority, the Office cannot withdraw the opportunity to amend claims in AIA trial proceedings. the Office will continue to make improvements and clarifications via the rule-making process, by updating the Office Patent Trial Practice Guide, and by designating opinions as precedential or informative, as warranted. In addition, the Board notes the following Board decisions on motions to amend as further guidance: MasterImage, slip op. at 1-3); Idle Free Systems, Inc. v. Bergstrom, Inc., Case IPR (PTAB June 11, 2013) (Paper 26) (informative); Int'l Flavors & Fragrances Inc. v. United States of America, Case IPR (PTAB May 20, 2014) (Paper 12) (informative); Corning Optical Comms. RF, LLC v. PPC Broadband, Inc., Case IPR (PTAB Oct. 30, 2014) (Paper 19);Riverbed Tech., Inc. v. Silver Peak Systems, Inc., Case IPR (PTAB Dec. 30, 2014) (Paper 33); Reg Synthetic Fuels LLC v. Neste Oil OYJ, Case IPR (PTAB June 5, 2015) (Paper 48). 25

26 Post-Grant for Practitioners No Claim Amendment Rules Why no rules? Statute prevents eliminating amendments. Liberal amendments are impossible, due to Board s inability to conduct searches and examination (and time constraints) Recent changes (increased page limits, shift of burden to petitioner) may be enough to encourage some amendments How will parties respond 26

27 NPEs, Strong Patents Act & the Revised Innovation Act 27

28 Post-Grant for Practitioners Proposed changes BRC ordinary/customary In Feb. 2015, Sen. Chris Coons (D-Del.) introduced S. 632 the STRONG Patents Act Laments unintended consequences of the comprehensive 2011 reform of patent laws, such as strategic filing of PGR proceedings to depress stock prices and extort settlements. 28

29 Post-Grant for Practitioners Proposed changes BRC ordinary/customary STRONG Patents Act would change claim construction standard from broadest reasonable construction to the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains Would also make it easier to amend or cancel claims during proceeding 29

30 Post-Grant for Practitioners Proposed changes preponderance C&C STRONG Patents Act would also elevate the burden of proof from preponderance of the evidence to clear-and-convincing evidence for previously issued claims Amended claims would still be subject to a preponderance standard 30

31 Post-Grant for Practitioners Proposed changes legislative status Portions introduced into managers amendment of H.R. 9 the Innovation Act Introduced in June in House by Judiciary Cmte. Chairman Bob Goodlatte (R-Va.), passed 24-8 Adopts ordinary & customary meaning provision of Coons bill for IPR and PGR 31

32 Post-Grant for Practitioners Proposed changes legislative status Also restricts hedge funds No institution unless petitioner certifies: (1) that it does not own a financial instrument... designed to hedge or offset any decrease in market value of an equity security of the patent owner or an affiliate after filing; and (2) that it has not demanded payment from the patent owner or an affiliate of the patent owner in exchange for a commitment not to file a petition (unless the petitioner or any real party in interest has been sued for infringement on the patent) 32

33 Post-Grant for Practitioners Proposed changes legislative status Portions introduced into managers amdmt of S. 1137, the PATENT Act Introduced in June in Senate by Judiciary Cmte. Chairman Charles Grassley (R-Iowa), passed 16-4 Adopts ordinary & customary meaning provision of Coons bill for IPR and PGR Vague language regarding presumption of validity Also empowers PTO director to deny institution if it would not serve the interests of justice 33

34 Post-Grant for Practitioners Life sciences exemption BIO/PhRMA In July letter to Congress, the Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America wrote in support of exempting certain biopharmaceutical patents on approved medicines from the inter partes review (IPR) process at the Patent and Trademark Office (PTO) 34

35 Post-Grant for Practitioners Life sciences exemption BIO/PhRMA BIO and PhRMA claimed that postgrant proceedings threaten[] to disrupt the careful balance that Congress achieved over 30 years ago, by increasing business uncertainty for innovative biopharmaceutical companies having to defend their patents in multiple venues and under differing standards and procedures. 35

36 Post-Grant for Practitioners Life sciences exemption Legislative status During June 2015 Judiciary markup of H.R. 9, Rep. Mimi Walters (R- Calif.) introduced amdmt that would have exempted from IPR any patent that claims a drug or biological product, method of use, or method of mfctrg approved under Sec. 505 of Food, Drug and Cosmetic Act, including Orange Book patents 80 House members signed letter supporting exemption But Rep. Walters withdrew her amendment after Goodlatte opposed it 36

37 Bass and Bio-Pharma Developments 37

38 IPR Statistics (as of 9/30/2015) 1063 Trials Not Instituted Petition Denied/Settled/Dismissed 2059 Total Petitions 996 Trials Instituted Disposition of IPR Petitions Completed to Date* 51.6% denial rate 421 Terminated During Trial Settled/Dismissed/Requ est for Adverse Judgment 575 Trials Completed Reached Final Written Decisions 57.7% trials completed 414 Trials All Instituted Claims Unpatentable (20% of Total Petitions, 42% of Trials Instituted, 72% of Final Written Decisions) 85 Trials Some Instituted Claims Unpatentable (4% of Total Petitions, 9% of Trials Instituted, 15% of Final Written Decisions) 76 Trials No Instituted Claims Unpatentable (4% of Total Petitions, 8% of Trials Instituted, 13% of Final Written Decisions) Janet Gongola, Protecting Biopharmaceutical Innovation- Litigation and Patent Office Procedures (2015). 38

39 BioPharma IPR Statistics (as of 9/30/2015) 173 Total Petitions Disposition of IPR Petitions Completed to Date for TC1600* 103 Trials Not Instituted Petition Denied/Settled/Dismissed 70 Trials Instituted 59.5% denial rate 24 Terminated During Trial Settled/Dismissed/Request for Adverse Judgment 46 Trials Completed Reached Final Written Decisions 65.7% trials completed 23 Trials All Instituted Claims Unpatentable (13% of Total Petitions, 33% of Trials Instituted, 50% of Final Written Decisions) 5 Trials Some Instituted Claims Unpatentable (3% of Total Petitions, 7% of Trials Instituted, 11% of Final Written Decisions) 18 Trials No Instituted Claims Unpatentable (10% of Total Petitions, 26% of Trials Instituted, 39% of Final Written Decisions) Janet Gongola, Protecting Biopharmaceutical Innovation- Litigation and Patent Office Procedures (2015). 39

40 BioPharma Statistics (for FY2015 through 10/31/2015) The trend continues in 2015: BioPharma IPR petitions are denied institution more often 40

41 Types of BioPharma Patents Challenged Core patents vs. follow-on patents In an analysis of 200 IPRs of biopharma patents ~ 17% targeted core patents Drug composition claims ~ 13% drugs; ~4% biologics ~ 84% targeted follow-on patents Claims to drug product uses, formulation or manufacturing processes ~ 41% targeted treatment methods ~ 34% targeted product formulations ~ 8% targeted manufacturing or distribution processes 34 Biotechnology Law Report 185(5) Nov. 5,

42 Types of BioPharma Patents Challenged Core patents vs. follow-on patents Challenged core patents 30% institution rate 2% of these IPR settled Final decision has been reached in only one of the analyzed IPRs challenging a core patent Majority of claims were held unpatentable Challenged follow-on patents 48% institution rate 18% of these challenges settled Final decision reached in 23 analyzed follow-on patent IPR challenges In 65%, all or most claims were held unpatentable 34 Biotechnology Law Report 185(5) Nov. 5,

43 Statistics Post Institution (as of 9/30/2015) Janet Gongola, Protecting Biopharmaceutical Innovation-Litigation and Patent Office Procedures (2015). 43

44 BioPharma Stats Post Institution (as of 9/30/2015) 36% of instituted claims invalidated Janet Gongola, Protecting Biopharmaceutical Innovation-Litigation and Patent Office Procedures (2015). 44

45 Post-Grant for Practitioners Hedge Fund Petitioners Kyle Bass and various related entities, including the Coalition for Affordable Drugs, have filed more than 30 IPR petitions to date. The Coalition for Affordable Drugs is a series of companies, each formed for a particular IPR petition Targets include Biogen, Celgene, Pozen, Shire, Acorda, and NPS Pharmaceuticals 45

46 PTAB: Bass May Be Bad, But He s Legal Trials@uspto.gov Paper No Filed: September 25, 2015 Case IPR (Patent 5,635,517) Before TONI R. SCHEINER, MICHAEL P. TIERNEY, MICHAEL W. KIM, JACQUELINE WRIGHT BONILLA, GRACE KARAFFA OBERMANN, and TINA E. HULSE, Administrative Patent Judges. TIERNEY, Administrative Patent Judge. UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD COALITION FOR AFFORDABLE DRUGS VI, LLC, Petitioner, v. CELGENE CORPORATION, Patent Owner. Case IPR (Patent 6,045,501) Case IPR (Patent 6,315,720) Case IPR (Patent 6,315,720) Case IPR (Patent 6,315,720) Case IPR (Patent 5,635,517) 1 Before TONI R. SCHEINER, MICHAEL P. TIERNEY, MICHAEL W. KIM, JACQUELINE WRIGHT BONILLA, GRACE KARAFFA OBERMANN, and TINA E. HULSE, Administrative Patent Judges. TIERNEY, Administrative Patent Judge. DECISION Denying Sanctions Motion 37 C.F.R This Order addresses issues common to all identified cases. We exercise our discretion to issue one Order to be filed in each case. The parties are n authorized to use this style heading. We take no position on the merits of short-selling as an investment strategy other than it is legal, and regulated. DECISION Denying Sanctions Motion 37 C.F.R This Order addresses issues common to all identified cases. We exercise our discretion to issue one Order to be filed in each case. The parties are not authorized to use this style heading. 46

47 Other NPEs filing IPR Petitions Other NPEs filing IPR petitions Ferrum Ferro Capital IPR versus Allergan s 149 patent covering Combigan Institution denied New Bay Capital 4 IPR petitions filed All four settled Mangrove Partners Masters Fund 2 IPR petitions filed and instituted Erich Spangenberg Founder of IPNav Has sued over 1,600 companies for patent infringement Real Party in Interest in Bass filings 47

48 Post-Grant for Practitioners Eric Spangenberg Recently used his blog (spangenblog) to solicit volunteers to fund and file IPR petitions Spangenberg stated his background makes him the wrong person to be the face of this effort, and hopes others, for example, a law school group, charitable organization or a consumer protection group, will take up the cause. On September 29, 2015, Spangenberg posted a 63-page draft IPR petition of the Depomed patent covering Nucynta. 48

49 Post-Grant for Practitioners Factors Putting Patents in Spangenberg s Crosshairs Spangenberg stated ever-greening patents will typically have the following attributes: more than 100 references on the cover page a four (or greater) year gap between the expiration date of the patent and the previous patents listed with the drug in the FDA s Orange Book of approved drugs a convoluted prosecution history typically the patent was prosecuted by some mega law firm that simply wore down the patent examiner multiple uses of the phrase surprising result or unexpected result in the patent specification 49

50 Post-Grant for Practitioners Biologics IPRs A number of biosimilar makers have turned to IPR to challenge innovator patents prior to submitting their biosimilar applications to the FDA Examples include Boehringer Ingelheim IPR , -417, -418 challenging patents covering Rituxan Hospira IPR challenging patents covering dosing regimens for administering erythropoietin (EPO)IPR challenging Eprex (epoetin alfa), a biologic used to treat anemia Amgen, Coherus, Boerhinger Ingelheim IPR , , , , , , challenging patents covering Humira 50

51 Post-Grant for Practitioners Biologics IPRs Biosimilar manufacturers view IPRs as advantageous Provide for a sort of freedom to operate analysis Claims are construed with the broadest reasonable interpretation Generally broader claim construction than district court No presumption of patent validity Invalidity need be proved only by preponderance of the evidence As opposed to clear and convincing evidence Decisions rendered faster Allows for patent certainty when litigation under Biologics Price Competition and Innovation Act of 2009 (BPCIA) is premature 51

52 Estoppel, Broadest Reasonable Interpretation 52

53 Star Envirotech The defendants argued that the machine formed new grounds that could not have been presented in the IPR The plaintiff argued that the defendants had the machine s owner manual and could have submitted that in the IPR The Court found that estoppel did not apply because the physical machine itself discloses features claimed in the [patent] that are not included in the instruction manual, and it is therefore a superior and separate reference. 53

54 Broadest Reasonable Interpretation In re Cuozzo approved the PTO s use of BRI in IPRs Justification for BRI relies on ability to amend 54

55 The PTAB s Discretion 55

56 The PTAB s Discretion PTAB has interpreted the statutes and rules as giving it broad discretion as to whether to institute inter partes review 35 U.S.C. 314(a) provides that the Director may not institute an IPR unless certain conditions are met The Director may not authorize an inter partes review to be instituted unless the Director determines that... there is a reasonable likelihood that the petitioner would prevail 35 U.S.C. 325(d) provides a specific grant of discretion [T]he Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office. 56

57 The PTAB s Discretion Three categories: 1. Prevent a second bite at the apple 2. Require a new challenge 3. Control the number of proceedings 57

58 Post-Grant Resources 58

59 Post-Grant for Practitioners In Fish & Richardson s initial 7-part webinar series titled Challenging Patent Validity in the USPTO, we explored details regarding several of the post grant tools, with 3 sessions dedicated to Inter Partes Review (IPR), and a final session walking through several hypotheticals, to help listeners understand how these apply to common situations. Audio and slides for these webinars are posted online at: If you listen to these webinars, you will be well positioned to engage in a conversation over whether and when to use those tools and how to defend against them. 59

60 Resources Fish web sites: Post-Grant for Practitioners: General: IPR: PGR: Rules governing post-grant: Post-Grant App: USPTO sites: AIA Main: Inter Partes: 60

61 2015 Post-Grant Practice Year in Review Available in late January on fishpostgrant.com A closer look at the key issues from the past year in post-grant practice Insight on trends and practice analysis for your business and patent strategy 61

62 Thank You! Karl Renner Principal, Post-Grant Practice Co-Chair Washington, DC Dorothy Whelan Principal, Post-Grant Practice Co-Chair Twin Cities Additional contributors: Tasha Francis (Associate), Tom Rozylowicz (Principal), Michael Rosen (Principal), Kevin Greene (Principal), and Ron Vogel (Associate) Copyright 2016 Fish & Richardson P.C. These materials may be considered advertising for legal services under the laws and rules of professional conduct of the jurisdictions in which we practice. The material contained in this presentation has been gathered by the lawyers at Fish & Richardson P.C. for informational purposes only, is not intended to be legal advice and does not establish an attorney-client relationship. Legal advice of any nature should be sought from legal counsel. Unsolicited s and information sent to Fish & Richardson P.C. will not be considered confidential and do not create an attorney-client relationship with Fish & Richardson P.C. or any of our attorneys. Furthermore, these communications and materials may be disclosed to others and may not receive a response. If you are not already a client of Fish & Richardson P.C., do not include any confidential information in this message. For more information about Fish & Richardson P.C. and our practices, please visit 62