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PTAB allows Celgene to file for sanctions against Coalition for Affordable Drugs

The Patent Trial and Appeal Board has authorised Celgene to file motions for sanctions in response to four inter partes review petitions filed by the Coalition for Affordable Drugs, the entity Kyle Bass and Erich Spangenberg are using to challenge pharmaceutical patents

Celgene requested authorisation to move for dismissal of the petitions as a sanction for abuse of process by petitioner or its real parties-in-interest.

In its rare order granting authorisation to file a motion for sanctions on June 9, the Board said the motion shall be filed on the same day as the preliminary response, if the patent owner elects to file a preliminary response. If the patent owner waives filing of a preliminary response, the motion for sanctions shall be filed no later than the due date for filing the preliminary response in each proceeding. The petitioner will have 10 business days to respond and the patent owner then has five days to file a reply.

The four IPRs were filed on April 23. Patent owners are given three months to file a preliminary response after the filing of a petition, meaning Celgene has until July 22 to file the motion for sanctions.

The Board said: “Our decision was based on a determination that briefing will facilitate development of a complete record and, thereby, will promote the just resolution of the issues raised by patent owner. We emphasised that our grant of authorisation to file a motion for sanctions is not a decision on the merits of patent owner’s allegation of abuse of process.”

The IPRs are four of 16 petitions the Coalition for Affordable Drugs has filed since February.

Bass, who managed hedge fund Hayman Capital, has attracted a lot of attention with his filings, which have prompted accusations that he is merely trying to short sell stock. It is not clear whether the USPTO can intervene to block the petitions. Anyone has standing to file IPRs, but the USPTO can prescribe sanctions for “improper use of the proceeding”.

For an in-depth analysis of The Coalition for Affordable Drugs’ IPR petitions, their chance of success and an interview with Bass, read our "The fine line between abuse and fair use at the PTAB" feature here (subscribers and triallists only).

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