A PTAB decision denying a patent owner’s motion for discovery concerning privity illustrates what may be a carefully-structured business transaction that permitted a petitioner to avoid the effect of the one-year time-bar for filing a petition under 35 U.S.C. § 315(b).

As we have previously discussed, generic drug company Teva Pharmaceuticals USA, Inc.’s IPR petitions challenging patents covering Suboxone ® Film were denied by the PTAB because they were filed minutes after expiration of the one-year time limit of 35 U.S.C. § 315(b) for filing a petition after being sued for infringement. The exclusive licensee of patent owner Monosol RX had sued Teva for infringement based on Teva’s filing of ANDAs with the FDA to market generic versions of Suboxone® Film. Only a few weeks after the PTAB decisions denying Teva’s IPR petitions, another generic drug company, Dr. Reddy’s Laboratories, Ltd., filed virtually identical IPR petitions challenging the same patents.

The patent owner filed a motion for discovery to obtain documents that it alleged would demonstrate that Dr. Reddy’s was in privity with Teva at the time the petitions were filed, and thus time-barred under § 315(b). In particular, the patent owner sought discovery of documents relating to communications between Teva and Dr. Reddy’s concerning Dr. Reddy’s acquisition from Teva of ANDAs for Suboxone®. To show that the five Garmin factors for discovery were satisfied and that additional discovery would be in the interests of justice, the patent owner submitted evidence demonstrating that: (a) Teva filed two ANDAs concerning Suboxone®; (b) after Teva’s IPR petitions were denied, Dr. Reddy’s filed petitions that were virtually identical to Teva’s denied petitions; (c) shortly after its petitions were filed, Dr. Reddy’s issued a press release announcing that it had entered into an agreement to acquire a number of ANDAs from Teva; and (d) the patent owner was informed that Dr. Reddy’s will likely be moving to substitute itself for Teva in the related district court patent litigation.

Dr. Reddy’s opposed the motion for discovery, arguing that the patent owner’s evidence in support of the motion established only that it acquired ANDAs from Teva after the petitions were filed, and that the patent owner’s argument that there was privity at the time the petitions were filed was “pure speculation.” The PTAB, applying its “conservative approach to granting additional discovery,” determined that the patent owner had not proffered persuasive evidence that privity existed prior to Dr. Reddy’s filing of the IPR petitions, and therefore denied the motion for additional discovery.

After denying the motion for discovery, if the PTAB proceeds to institute IPRs over the patent owner’s objections that the petitions are time-barred, according to the Federal Circuit such decisions would be unreviewable on appeal. Accordingly, the PTAB’s conservative approach to discovery motions may permit Dr. Reddy’s to avoid the consequences of the one-year time bar for filing petitions.