Is the label "patent death squad" appropriate for IPRs on pharma patents?
FiercePharma reports:
But how much do pharma companies need to worry about these patent reviews affecting their IP protection?
According to an analysis of past IPR challenges, not a lot, Bernstein analyst Ronny Gal wrote in a Thursday note to clients. In 165 pharma cases so far, only 88 have gone through a decision on whether to institute review proceedings. Of those 88, the U.S. Patent and Trademark Office (PTO) has only chosen to fully institute proceedings 41 times, or in 47% of cases. That rate is "remarkably lower" than the 75%-plus rate across all sectors, which includes tech, he pointed out.
And so far, only 7 cases have come to a final decision following the 12-month review process. All claims were found valid only 5 times, and all patents were invalidated only twice--for Suboxone and Vyvanse.
(...)
His conclusion? It's "not much of an 'IP death squad,'" he wrote. While the comparatively speedy nature of IPR review has some drugmakers--and their investors--worried, the stats so far "suggest 15% of patents challenged via IPR are invalidated," and that's "reasonably similar to patent challenges via the court system."
"In short, it appears the IPR process is doing exactly what it is supposed to do--providing fast, low cost way to eliminate patents which should have never been granted," he wrote.
Of course, the sample size is still small, Gal cautioned; 26 more already-instituted cases are up for final decisions over the course of the next year, and that'll provide a much larger sample set.
IPBiz notes IPRs are about claims identified in the IPR, so the text -- All claims were found valid only 5 times, and all patents were invalidated only twice--for Suboxone and Vyvanse. --
link: http://www.fiercepharma.com/story/pharmas-new-patent-worry-numbers-no-ip-death-squad-here-analyst-says/2015-09-03
****
As to the claim-centric nature of IPR, note this early discussion from http://interpartesreviewblog.com/tag/ptab-statistical-data/ :
As of April 2, 2014, thirty-nine final decisions1 have issued in IPR proceedings. Challenged claims upon which trial was instituted survived in only five final written decisions.2 The petitioners of these thirty-nine IPRs had petitioned for review of a total of 668 claims. IPR trials were instituted for 80.5% of these claims (538 out of 668 claims). It should also be noted that only 36% of the grounds petitioned were actually instituted (137 out of 384 grounds). The most sobering number for patent owners is the percentage of claims found unpatentable in final written decisions: 95% (510 out of 538 claims).
Note that the law firm Harness Dickey provides information on IPRs at the website: IPR-PGR.com.
From the link http://ipr-pgr.com/wp-content/uploads/2015/08/IPR-PGR-Report-Vol.-10.pdf one has the information on patent type challenged in IPR:
--
454 Chemical and Biotech
1826 Electrical and Computer
696 Mechanical and Transportation
13 Design
--
and one has outcome information:
4643 claims cancelled
855 claims confirmed as patentable
As to the rate of cancellation in the final written
decision, grouped by subject matter:
86% Chem/Bio
86% Electrical/Computer
77% Mechanical
This information might seem in conflict with
that discussed in the FiercePharma post, and might suggest
Pharma companies do have something to worry about in IPR.
****
Note also the paper by Brian Love, 81 U Chi L Rev Dialogue 93 , which includes the text
Narrowing our focus further to IPRs with a decision on claim validity, we find that petitioners have also been quite successful before the PTAB on the merits of their challenges. As shown in Table 6, among instituted IPRs with a final decision on the merits, the PTAB eliminated all instituted claims almost 78 percent of the time. Among the same group, the PTAB eliminated all claims challenged in the petition 65 percent of the time, giving petitioners a complete victory almost two-thirds of the time that they pursued their IPRs to a final decision.
Unlike acceptance rates, which are similar for both IPR and inter partes reexamination, the rate at which petitioners have succeeded on the merits of their petitions is markedly different: inter partes reexaminations ended in complete victory for the petitioner just 31 percent of the time, less than half as often as for IPR. In addition, over 60 percent of inter partes reexaminations ended with patentees securing new, amended claims.31 To date, the PTAB has granted just a single motion to amend—one that was both unopposed and filed by the United States itself.
****And from AIPLA, one has
To date, almost every major medical device/technology company has been involved in at least one IPR.[14] In addition, generic pharmaceutical companies have been quick to utilize the IPR process to circumvent the traditional lengthy district court proceedings typical in Hatch-Waxman litigation.[15] However, in light of the potential offensive use of the IPR process by NPEs, life sciences companies would be advised to become expert at the IPR process in order to successfully meet this new challenge.
Reference 15: Scott McKeown and Richard Kelly, “Generic Pharma Leverages PTAB” March 20, 2014, found at http://www.patentspostgrant.com/page/2
link: https://aiplafda.wordpress.com/2014/06/16/npes-can-potentially-use-inter-partes-review-to-target-the-life-sciences-industry/
****
***Elsewhere, on the blog patentlyO, in a post about "conflicts of interest", one has a comment
MM, how to you feel about Kyle Bass. He continues his piracy in the name of the public interest according to Greg A.
“Hedge-fund manager Kyle Bass isn’t taking his early losses to the drug industry lightly. The Hayman Capital Management founder claims the Patent and Trademark Office is purposefully denying his challenges to drug patents because it finds him “too disruptive.”
His response: File more cases targeting what he contends are patents of questionable validity that he said are protecting overpriced drugs from competition. “It’s clear they want us to go away,” Bass said Thursday in a telephone interview. “We’re not going away.”
Bass has filed nine petitions challenging patents since Aug. 24, the day the Patent Trial and Appeal Board declined to review two Acorda Therapeutics Inc. cases. Four petitions filed Wednesday again challenge Acorda patents on the multiple sclerosis drug Ampyra.
In all, Bass’s Coalition for Affordable Drugs has filed almost three dozen petitions since February. The Acorda petitions were rejected after the Patent Trial and Appeal Board said the information he provided wasn’t publicly available. A different three-judge panel on Sept. 1 said information of a clinical trial wasn’t evidence that could be used to challenge Biogen Inc.’s MS drug Tecfidera.
“They threw Acorda out on a technicality; they threw Biogen out by ignoring the law,” Bass said. “They’re acting like a kangaroo court, and we are not going to stand for it.” Patrick Ross, a spokesman for the patent office, said the Alexandria, Va.-based agency had no comment.”
“The fact that a hedge fund or others can file endless challenges to the same patents over and over again, forcing small companies like Acorda to divert their time, attention, and limited resources to fighting these improper attacks rather than focusing on bringing new cures to patients, is outrageous and offensive,” the Biotechnology Industry Organization said in a statement. “His abuse of this system highlights the need for reform.”
Ardsley, N.Y.-based Acorda, in a regulatory filing, said it would oppose any effort to institute the review and defend its patents.
Bass accused patent office director Michelle Lee of directing the judges to find ways to not institute any reviews. “What Michelle Lee and the PTAB need to do is call balls and strikes and not try to change the rules of the game that were legislated to them by Congress,” Bass said.
By law, the board’s administrative patent judges are independent of oversight by the director. Their decisions on whether to begin a review or not can’t be appealed.
Bass can ask the panels to reconsider their decisions, but most of those requests are denied, said Lana Gladstein, a patent attorney with the Boston firm of Nutter McClennen & Fish, who’s been involved in other cases before the board.
In both the Acorda and Biogen cases, the drug makers argued that Bass is misusing the system to make money by undermining drug patents. Neither panel addressed that issue. A different three-judge panel has asked Bass and Shire PLC’s NPS Pharmaceuticals to provide legal arguments on whether that should be a consideration. NPS is scheduled to file its arguments next week, with Bass given another seven business days to respond.
The board has allowed third parties to proceed with other petitions. In those instances, it’s been a group like Unified Patents, which collects money from technology companies to challenge patents that are being asserted in specific fields.
Bass said he is motivated both by the desire to make money and an urge to “go after the worst offenders” when it comes to drug pricing and patent quality.
“If not me, then who?” Bass said. “I don’t see anyone else hiring legal teams with purely altruistic motives.”
http://patentlyo.com/hricik/2015/09/appropriate-competitors-inventions.html#comments
But how much do pharma companies need to worry about these patent reviews affecting their IP protection?
According to an analysis of past IPR challenges, not a lot, Bernstein analyst Ronny Gal wrote in a Thursday note to clients. In 165 pharma cases so far, only 88 have gone through a decision on whether to institute review proceedings. Of those 88, the U.S. Patent and Trademark Office (PTO) has only chosen to fully institute proceedings 41 times, or in 47% of cases. That rate is "remarkably lower" than the 75%-plus rate across all sectors, which includes tech, he pointed out.
And so far, only 7 cases have come to a final decision following the 12-month review process. All claims were found valid only 5 times, and all patents were invalidated only twice--for Suboxone and Vyvanse.
(...)
His conclusion? It's "not much of an 'IP death squad,'" he wrote. While the comparatively speedy nature of IPR review has some drugmakers--and their investors--worried, the stats so far "suggest 15% of patents challenged via IPR are invalidated," and that's "reasonably similar to patent challenges via the court system."
"In short, it appears the IPR process is doing exactly what it is supposed to do--providing fast, low cost way to eliminate patents which should have never been granted," he wrote.
Of course, the sample size is still small, Gal cautioned; 26 more already-instituted cases are up for final decisions over the course of the next year, and that'll provide a much larger sample set.
IPBiz notes IPRs are about claims identified in the IPR, so the text -- All claims were found valid only 5 times, and all patents were invalidated only twice--for Suboxone and Vyvanse. --
link: http://www.fiercepharma.com/story/pharmas-new-patent-worry-numbers-no-ip-death-squad-here-analyst-says/2015-09-03
****
As to the claim-centric nature of IPR, note this early discussion from http://interpartesreviewblog.com/tag/ptab-statistical-data/ :
As of April 2, 2014, thirty-nine final decisions1 have issued in IPR proceedings. Challenged claims upon which trial was instituted survived in only five final written decisions.2 The petitioners of these thirty-nine IPRs had petitioned for review of a total of 668 claims. IPR trials were instituted for 80.5% of these claims (538 out of 668 claims). It should also be noted that only 36% of the grounds petitioned were actually instituted (137 out of 384 grounds). The most sobering number for patent owners is the percentage of claims found unpatentable in final written decisions: 95% (510 out of 538 claims).
Note that the law firm Harness Dickey provides information on IPRs at the website: IPR-PGR.com.
From the link http://ipr-pgr.com/wp-content/uploads/2015/08/IPR-PGR-Report-Vol.-10.pdf one has the information on patent type challenged in IPR:
--
454 Chemical and Biotech
1826 Electrical and Computer
696 Mechanical and Transportation
13 Design
--
and one has outcome information:
4643 claims cancelled
855 claims confirmed as patentable
As to the rate of cancellation in the final written
decision, grouped by subject matter:
86% Chem/Bio
86% Electrical/Computer
77% Mechanical
This information might seem in conflict with
that discussed in the FiercePharma post, and might suggest
Pharma companies do have something to worry about in IPR.
****
Note also the paper by Brian Love, 81 U Chi L Rev Dialogue 93 , which includes the text
Narrowing our focus further to IPRs with a decision on claim validity, we find that petitioners have also been quite successful before the PTAB on the merits of their challenges. As shown in Table 6, among instituted IPRs with a final decision on the merits, the PTAB eliminated all instituted claims almost 78 percent of the time. Among the same group, the PTAB eliminated all claims challenged in the petition 65 percent of the time, giving petitioners a complete victory almost two-thirds of the time that they pursued their IPRs to a final decision.
Unlike acceptance rates, which are similar for both IPR and inter partes reexamination, the rate at which petitioners have succeeded on the merits of their petitions is markedly different: inter partes reexaminations ended in complete victory for the petitioner just 31 percent of the time, less than half as often as for IPR. In addition, over 60 percent of inter partes reexaminations ended with patentees securing new, amended claims.31 To date, the PTAB has granted just a single motion to amend—one that was both unopposed and filed by the United States itself.
****And from AIPLA, one has
To date, almost every major medical device/technology company has been involved in at least one IPR.[14] In addition, generic pharmaceutical companies have been quick to utilize the IPR process to circumvent the traditional lengthy district court proceedings typical in Hatch-Waxman litigation.[15] However, in light of the potential offensive use of the IPR process by NPEs, life sciences companies would be advised to become expert at the IPR process in order to successfully meet this new challenge.
Reference 15: Scott McKeown and Richard Kelly, “Generic Pharma Leverages PTAB” March 20, 2014, found at http://www.patentspostgrant.com/page/2
link: https://aiplafda.wordpress.com/2014/06/16/npes-can-potentially-use-inter-partes-review-to-target-the-life-sciences-industry/
****
***Elsewhere, on the blog patentlyO, in a post about "conflicts of interest", one has a comment
MM, how to you feel about Kyle Bass. He continues his piracy in the name of the public interest according to Greg A.
“Hedge-fund manager Kyle Bass isn’t taking his early losses to the drug industry lightly. The Hayman Capital Management founder claims the Patent and Trademark Office is purposefully denying his challenges to drug patents because it finds him “too disruptive.”
His response: File more cases targeting what he contends are patents of questionable validity that he said are protecting overpriced drugs from competition. “It’s clear they want us to go away,” Bass said Thursday in a telephone interview. “We’re not going away.”
Bass has filed nine petitions challenging patents since Aug. 24, the day the Patent Trial and Appeal Board declined to review two Acorda Therapeutics Inc. cases. Four petitions filed Wednesday again challenge Acorda patents on the multiple sclerosis drug Ampyra.
In all, Bass’s Coalition for Affordable Drugs has filed almost three dozen petitions since February. The Acorda petitions were rejected after the Patent Trial and Appeal Board said the information he provided wasn’t publicly available. A different three-judge panel on Sept. 1 said information of a clinical trial wasn’t evidence that could be used to challenge Biogen Inc.’s MS drug Tecfidera.
“They threw Acorda out on a technicality; they threw Biogen out by ignoring the law,” Bass said. “They’re acting like a kangaroo court, and we are not going to stand for it.” Patrick Ross, a spokesman for the patent office, said the Alexandria, Va.-based agency had no comment.”
“The fact that a hedge fund or others can file endless challenges to the same patents over and over again, forcing small companies like Acorda to divert their time, attention, and limited resources to fighting these improper attacks rather than focusing on bringing new cures to patients, is outrageous and offensive,” the Biotechnology Industry Organization said in a statement. “His abuse of this system highlights the need for reform.”
Ardsley, N.Y.-based Acorda, in a regulatory filing, said it would oppose any effort to institute the review and defend its patents.
Bass accused patent office director Michelle Lee of directing the judges to find ways to not institute any reviews. “What Michelle Lee and the PTAB need to do is call balls and strikes and not try to change the rules of the game that were legislated to them by Congress,” Bass said.
By law, the board’s administrative patent judges are independent of oversight by the director. Their decisions on whether to begin a review or not can’t be appealed.
Bass can ask the panels to reconsider their decisions, but most of those requests are denied, said Lana Gladstein, a patent attorney with the Boston firm of Nutter McClennen & Fish, who’s been involved in other cases before the board.
In both the Acorda and Biogen cases, the drug makers argued that Bass is misusing the system to make money by undermining drug patents. Neither panel addressed that issue. A different three-judge panel has asked Bass and Shire PLC’s NPS Pharmaceuticals to provide legal arguments on whether that should be a consideration. NPS is scheduled to file its arguments next week, with Bass given another seven business days to respond.
The board has allowed third parties to proceed with other petitions. In those instances, it’s been a group like Unified Patents, which collects money from technology companies to challenge patents that are being asserted in specific fields.
Bass said he is motivated both by the desire to make money and an urge to “go after the worst offenders” when it comes to drug pricing and patent quality.
“If not me, then who?” Bass said. “I don’t see anyone else hiring legal teams with purely altruistic motives.”
http://patentlyo.com/hricik/2015/09/appropriate-competitors-inventions.html#comments
posted by Lawrence B. Ebert at 11:58 AM
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