The issue of IPRs has received a lot of media coverage recently, with Bloomberg News, BioWorld, and Law360, among others reporting on the drug-patent challenges brought by hedge fund manager Kyle Bass. Nutter partner Lana Gladstein, who has extensive experience with the inter partes review (IPR) process, has been tapped as an expert source on the topic by several reporters for these and other stories. Bass has initiated nearly three dozen drug-patent challenges. In recent weeks The Patent Trial and Appeal Board (PTAB) denied trial institution of two petitions filed by Bass against two patents held by Acorda Therapeutics on its multiple sclerosis drug Ampyra and also denied institution on one of the two petitions filed by Bass against Biogen’s multiple sclerosis drug Tecfidera. In the Biogen and Acorda cases, the companies argued that Bass is misusing the system to make money by undermining drug patents, however, neither panel addressed that issue.
The pharmaceutical industry has taken its concerns over the role of hedge funds in the IPR process to Congress and pushed for legislation to thwart these kinds of patent challenges. A pending bill in the U.S. House of Representatives, the Innovation Act, aims to bar AIA reviews from being filed by hedge funds looking to manipulate stock prices by challenging patents.
Gladstein tells Law360, “The fact that an entity that has no stake in the pharmaceutical business can go out and challenge patents is a pretty touchy issue for the companies that build products around the technology that they end up patenting. Biotech and pharmaceutical companies appear to be active in trying to get some legislative amendments out to rectify third parties’ pursuit of pharmaceutical patents, but [getting the legislation passed] won’t be easy because there are so many different interest groups out there,” she added.
The question is whether someone who has a motive for profit fits with the goal of the United States Patent and Trademark Office to take a second look at its work. “At the end of the day, a challenge to a possibly invalid patent is in the public’s best interest,” said Gladstein, pointing out the other side of the argument.
October promises to be a very busy month for PTAB, with nine decisions expected to issue. PTAB has until September 22 to decide whether to accept a petition filed by another third party against an Allergan patent covering Combigan.