Hedge funds and patents

In 2007, Forbes ran a story titled "Patent Pirates,"  subtitled

Hedge funds and institutional investors are financing the latest wave of IP lawsuits.

The examples provided were mainly about hedge funds investing in patent infringement

lawsuits.  The procedure to make money involved actual litigation, a relatively
expensive proposition.

Enter  the AIA, and hedge  funds have found a cheaper way to make money in the patent realm.


In January 2015, Financial Times discussed plans by Kyle Bass to target the Pharma industry with inter partes review of Pharma patents, a procedure created by the AIA.

In an IPR challenge to US 8,663,685 in February 2015, the real parties in interest were identified as

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Pursuant to 37 C.F.R. § 42.8(b)(1), Petitioner certifies that Coalition For Affordable Drugs (ADROCA) LLC (“CFAD”), Hayman Credes Master Fund, L.P. (“Credes”), Hayman Capital Master Fund, L.P. (“HCMF”), Hayman Capital Management, L.P. (“HCM”), Hayman Offshore Management, Inc. (“HOM”), Hayman Investments, L.L.C. (“HI”), nXn Partners, LLC (“nXnP”), IP Navigation Group, LLC (“IPNav”), J. Kyle Bass, and Erich Spangenberg are the real parties in interest (collectively, “RPI”). The RPI hereby certify the following information: CFAD is a wholly owned subsidiary of Credes. Credes is a limited partnership. HCMF is a limited partnership. HCM is the general partner and investment manager of Credes and HCMF. HOM is the administrative general partner of Credes and HCMF.

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Of Spangenberg, see previous IPBiz post -

CAFC outcome in Taurus/Orion/Spangenberg v. DaimlerChrysler

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 Of relevance to "patent reform," the STRONG bill of Senator Coons would modify the "standing" requirements, so that the IPR of Bass would not be allowed:

Standing: A petition to institute an IPR could not be filed unless the Petitioner had either been sued for infringement or charged with infringement

Separately, one contemplates "how" a successful third party IPR would impact generics filing litigation under the Hatch-Waxman Act.  This comes up in this IPR.
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** Related matters were identified


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Pursuant to 37 C.F.R. § 42.8(b)(2), Petitioner states that the ’685 patent is the subject of several matters that may affect, or may be affected by a decision in this proceeding: Acorda Therapeutics, Inc. v. Mylan Inc (NASDAQ:MYL) Pharms. Inc., No. 1:14-cv-00935 (D. Del; Acorda Therapeutics, Inc. v. Mylan, No. 1:14-cv-00139 (N.D.W.Va.); Acorda Therapeutics, Inc. v. Accord and Intas, No. 1:14-cv-00932 (D. Del.); Acorda Therapeutics, Inc. v. Actavis plc (NYSE:ACT), No. 1:14-cv-00882 (D. Del.); Acorda Therapeutics, Inc. v. Alkem, No. 1:14-cv-00917 (D. Del.); Acorda Therapeutics, Inc. v. Apotex, No. 1:14-cv-00955 (D. Del.); Acorda Therapeutics, Inc. v. Aurobindo, No. 1:14-cv-00909 (D. Del.); Acorda Therapeutics, Inc. v. Roxane, No. 1:14-cv-00922 (D. Del.); Acorda Therapeutics, Inc. v. Teva, No. 1:14-cv-00941 (D. Del.).

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Of the aftermath of the IPR, Dealbook noted:

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Mr. Bass, based in Dallas, has already drawn blood. Acorda Therapeutics stock fell almost 10 percent on news of his challenge on Tuesday. The biotech company, with a $1.5 billion market capitalization, gets nearly all its revenue from Ampyra, a treatment for multiple sclerosis. If cut-price competition emerges sooner than expected, the company would be hurt badly.
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**In a more recent matter, Ferrum Ferro Capital, LLC (“Ferrum”) filed a petition for inter partes review against a single claim of a patent assigned to Allergan Sales, LLC (“Allergan”). Reference IPR2015-00858.

Although  this claim survived litigation challenge in Allergan, Inc. v. Sandoz Inc  , the "hook" for Ferrum is the difference in  claim interpretation standard between that in an IPR ("broadest reasonable interpretation") and that in litigation.  In theory, a claim could be invalid under BRI but not under the district court standard.