Kyle Bass IPRs end up with 57% institution success rate

The Patent Trial and Appeal Board (PTAB) has issued institution decisions on all the inter partes review (IPR) petitions that involve hedge fund manager Kyle Bass. 

Bass (right) and Erich Spangenberg – as well as entities they are involved in such as Hayman Capital, nXn Partners and IP Navigation – jointly filed 35 petitions targeting pharmaceutical patents between February 10 and November 25 last year.

The PTAB instituted trial on 20 of the petitions, giving a 57% institution success rate.

Thirty-three of the petitions were filed through the Coalition for Affordable Drugs. Bass and Spangenberg did not use the coalition for their last two petitions, filed on November 24 and 25. Eighteen of the Coalition for Affordable Drugs petitions were instituted, giving a 55% success rate.

This compares with an overall institution rate of 61% for all biotechnology/pharma petitions, with 167 of 275 petitions granted as of the end of April.

The final institution decision came on June 8, with the Board granting institution of an IPR targeting a patent for Fresenius’ anesthetic agent Diprivan.

The Board in its decision addressed the fact that the Coalition for Affordable Drugs was not involved in the final two petitions filed by Bass and Spangenberg. Fresenius had asserted that the Board should deny the petition because it failed to name all the real parties-in-interest.

“In particular, patent owner argues that because Messrs. Bass and Spangenberg have filed petitions for inter partes review through a variety of corporate entities, including several 'Coalition for Affordable Drugs' entities, the failure to identify those organizations here ‘strongly suggests that Petitioners have failed to meet its burden to properly name the real parties-in-interest to this case’,” said the PTAB. “We are not persuaded. Patent owner’s assertion that the other entities ‘could have an interest using the results of this proceeding as part of its investment strategy’ … is speculative and does not support dismissing the petition under 37 CFR § 42.106(b).”

Marshall Gerstein’s PTAB Watch blog noted the interesting change of tack for the last two petitions filed by Bass and Spangenberg.

"The fact that Bass and Spangenberg were at pains to deny financial interest in both Citius and Alpex signals their sensitivity to attacks directed to issues of real party in interest (RPI),” noted the PTAB Watch blog after the PTAB granted institution on an IPR petition challenging a patent owned by Alpex Pharma. “Indeed, Alpex did not raise any RPI concerns in their reply, nor did the PTAB discuss RPI in their institution decision.  It will be interesting to see whether Bass, the billionaire founder of Hayman Capital Management, and Spangenberg, a self-proclaimed ‘patent troll’, file future IPR petitions in their own names and how the RPIs listed in their future petitions are influenced by the targeted patent owner.”

The Board instituted trial for all of the last nine petitions filed by Bass, including four petitions targeting patents covering Acorda’s Ampyra treatment for multiple sclerosis.

This was the second round of petitions the coalition filed against Ampyra patents. The first round of petitions – which were the first two petitions filed by Bass and Spangenberg – were denied because they did not establish that the cited posters qualified as prior art “printed publications”. Acorda argued that the second round of petitions should be denied because the same prior art was asserted in the first set of petitions. But the PTAB said that different issues were raised in the second round of petitions.

Estopppel provisions only apply if an IPR petition results in a final decision on the merits. As Courtenay Brinckerhoff, partner at Foley & Lardner, noted on the PharmaPatents blog: “Thus, a petition that does not result in institution does not give rise to estoppel. That means that as long as a petitioner can come up with sufficiently different grounds for invalidity to avoid § 315(d), it can keep trying to challenge the same patent until an IPR proceeding is instituted and decided.”

It is widely assumed Bass was filing IPRs to take advantage of stock market fluctuations of the pharmaceutical companies whose patents were being challenged.

At Managing IP’s PTAB Forum 2016 last month, Esther Hong of Stifel gave an overview of investor perspectives of bio/pharma IPRs. She noted that the first IPR filed by the Coalition for Affordable Drugs in February last year caused a 9.7% drop in Acorda’s share price and when it was instituted a 7.8% drop. In contrast, an IPR filed in September last year caused a 3.0% rise in Jazz’s share price and when it was instituted excluding key claims the share price rose 5.5%.

Hong concluded: “Investors are reading the petitions and filings and have a better grasp of what is substantive. Investors have become savvier with IPRs and are no longer overreacting. Investors are paying attention.”

In September last year, Spangenberg urged crowdsourcing of IPRs against pharma companies.Spangenberg also filed a separate IPR petition in March this year challenging a Nissan Chemical Industries patent.

The Coalition for Affordable Drugs' IPR petitions*
IPR number	Date filed	Law firm used by the Coalition	Patent number	Patent owner	Drug used in	Instituted?
IPR2015-00720	February 10	Skiermont Puckett	8,663,685	Acorda Therapeutics	Ampyra	NO
IPR2015-00817	February 27	Skiermont Puckett	8,007,826	Acorda Therapeutics	Ampyra	NO
IPR2015-00988	April 1	Skiermont Puckett	6,773,720	Cosmo/Nogra Pharma/Shire	Lialda	YES
IPR2015-00990	April 1	Merchant & Gould	7,056,886	NPS/Shire	Gattex	YES
IPR2015-01018	April 6	Merchant & Gould	7,895,059	Jazz Pharmaceuticals	Xyrem	NO
IPR2015-01076	April 20	Merchant & Gould	8,754,090	Pharmacyclics	Imbruvica	NO
IPR2015-01086	April 22	Neifeld IP Law	8,759,393	Biogen International	Tecfidera	NO
IPR2015-01102	April 23	Skiermont Puckett	6,315,720	Celgene Corporation	Revlimid	YES
IPR2015-01096	April 23	Skiermont Puckett	6,315,720	Celgene Corporation	Revlimid	YES (for obviousness but not for anticipation)
IPR2015-01103	April 23	Skiermont Puckett	6,315,720	Celgene Corporation	Revlimid	YES
IPR2015-01092	April 23	Skiermont Puckett	6,045,501	Celgene Corporation	Pomalyst, Revlimid and Thalomid	YES
IPR2015-01093	April 23	Merchant & Gould	7,056,886	NPS/Shire	Gattex	YES (for some claims)
IPR2015-01136	May 1	Neifeld IP Law	8,399,514	Biogen MA	Tecfidera	NO
IPR2015-01169	May 7	Merchant & Gould	5,635,517	Celgene Corporation	Pomalys	NO
IPR2015-01241	May 21	Conley Rose	6,926,907	Pozen (Horizon Pharma bought the rights to the drug in November 2013)	Vimovo	NO
IPR2015-01344	June 5	Conley Rose	8,858,996	Horizon Pharma/Pozen	Vimovo	NO
IPR2015-01680	August 7	Conley Rose	8,852,636	Pozen (Horizon Pharma bought the rights to the drug in November 2013)	Vimovo	NO
IPR2015-01718	August 12	Conley Rose	8,945,621	Horizon Pharma/Pozen	Vimovo	YES
IPR2015-01723	August 13	Cunningham Swaim/Winstead	6,967,208	Bristol Myers Squibb Pharma	Eliquis	NO
IPR2015-01776	August 20	Merchant & Gould	7,582,621	Anacor/Sandoz	Kerydin	YES
IPR2015-01785	August 20	Merchant & Gould	7,767,657	Anacor/Sandoz	Kerydin	YES
IPR2015-01780	August 20	Merchant & Gould	7,767,657	Anacor/Sandoz	Kerydin	YES
IPR2015-01792	August 22	Neifeld IP Law	8,163,522	Amgen/Hoffmann-La Roche/Immunex	Enbrel	NO
IPR2015-01799	August 24	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	8,835,460	Insys Pharma	Subsys	NO
IPR2015-01797	August 24	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	8,835,459	Insys Pharma	Subsys	NO
IPR2015-01800	August 24	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	8,486,972	Insys Pharma	Subsys	NO
IPR2015-01835	August 28	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	8,618,135	Aegerion Pharmaceuticals/Trustees of The University of Pennsylvania	Juxtapid	YES
IPR2015-01836	August 28	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	7,932,268	Aegerion Pharmaceuticals/Trustees of The University of Pennsylvania	Juxtapid	YES
IPR2015-01850	September 2	Skiermont Puckett	8,440,703	Acorda Therapeutics	Ampyra	YES
IPR2015-01853	September 2	Skiermont Puckett	8,007,826	Acorda Therapeutics	Ampyra	YES
IPR2015-01858	September 3	Skiermont Puckett	8,354,437	Acorda Therapeutics	Ampyra	YES
IPR2015-01857	September 3	Skiermont Puckett	8,663,685	Acorda Therapeutics	Ampyra	YES
IPR2015-01993	September 28	Neifeld IP Law	8,399,514	Biogen MA	Tecfidera	YES
All of the IPRs list the petitioners as the Coalition for Affordable Drugs, J Kyle Bass, Erich Spangenberg, Hayman Capital Management, various Hayman funds, IP Navigation Group, and nXn Partners
Source: Docket Navigator

IPR petitions filed listing only Kyle Bass and Erich Spangenberg
IPR number	Date filed	Law firm used by the Coalition	Patent number	Patent owner	Drug used in	Instituted?
IPR2016-00245	November 24	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	8,440,170	Alpex Pharma	Suprenza	YES (for some claims)
IPR2016-00254	November 25	Law Offices of Gregory J Gonsalves/McNeeley Hare & War	8,476,010	Fresenius Kabi	Diprivan	YES
Source: Docket Navigator

IPR petitions filed by Erich Spangenberg without Bass
IPR number	Date filed	Law firm used by the Coalition	Patent number	Patent owner
IPR2016-00694	March 1 2016	Skiermont Derby	8,796,464	Nissan Chemical Industries
Filed by Erich Spangenberg, IP Navigation Group, nXn Partners
Source: Docket Navigator