“It is not the strongest or the most intelligent who will survive but those who can best manage change.” -- Charles Darwin

In the patent world, today’s change comes at the hands of the America Invents Act (AIA). AIA established post-grant proceedings in the U.S. Patent and Trademark Office (USPTO) that have emerged as a battleground for pharmaceutical patent challenges in addition to the usual district court venue. Those challenges come in the form of inter partes review (IPR) and covered business method (CBM) proceedings. The proceedings have had mixed results thus far. Regardless of the outcomes and trends, innovator companies need to remain vigilant, irrespective of the forum and adversary.

For example, in the first IPR decisions on Orange Book-listed patents, the Patent Trial and Appeal Board (PTAB) sided with branded pharma companies on patents owned by Supernus Pharmaceuticals covering the rosacea drug Oracea® (doxycycline), which is marketed by Galderma Laboratories. In the December 2014 decisions in IPR2013-00368, IPR2013-00371, and IPR2013-00372, the PTAB found that Petitioner Amneal Pharmaceuticals had not shown that the challenged claims of three patents listed in the Orange Book for Oracea® were unpatentable. Amneal’s petitions relied on the same prior art cited to the USPTO during examination of the challenged patents and asserted by Amneal during litigations in the District of Delaware. The decisions focused on the construction of the claim term “delayed release,” which the PTAB construed according to the broadest reasonable interpretation standard. The PTAB declined to import a pH limitation from a preferred embodiment into the claim term and thus determined that Amneal had not shown that the prior art disclosed the “delayed release” claim limitation.

In a January 2015 decision favoring the pharmaceutical patent owner, the PTAB denied multiple requests for covered business method (CBM) review of four Orange Book-listed patents owned by Jazz Pharmaceuticals, Inc. in CBM2014-00151, CBM2014-00149, CBM2014-00150, and CBM2014-00153. Jazz’s patents are listed in the Orange Book as covering XYREM® (sodium oxybate), used for the treatment of narcolepsy to reduce excessive daytime (EDS) sleepiness and sudden weak or paralyzed muscles (cataplexy). The petitions, filed by Amneal Pharmaceuticals, Par Pharmaceutical, and Roxane Laboratories, were the first attempts to use CBM review on pharmaceutical patents. The challenged claims related to computerized methods for controlling the distribution of XYREM® (sodium oxybate), a drug with a high risk of abuse. The PTAB, however, concluded that the petitioners failed to show that Jazz’s patents were “covered business method patents” under the AIA and therefore denied review.

Yet in another set of recent decisions issued in February 2015, the PTAB invalidated patents covering Genzyme Corp.’s enzyme therapy drug Myozyme® (alglucosidase alfa) for the treatment of Pompe disease, a glycogen storage disorder type II. Genzyme’s competitor BioMarin Pharmaceutical Inc. challenged the patents on obviousness grounds in IPR2013-00534, IPR2013-00535, and IPR2013-00537 in August 2013. The PTAB’s decision invalidated all challenged claims in what is considered to be the first IPR final written decision in a biopharmaceutical case.

In addition to challenges from competitors and generic drug manufacturers, non-industry stakeholders, such as hedge fund managers, are targeting pharmaceutical patents. For example, IPR petitions have been filed against patents owned by Acorda Therapeutics, Allergan Sales, LLC, Shire PLC, and Jazz Pharmaceuticals by non-industry stakeholders aiming to shake up the financial markets by invalidating patents covering pharmaceutical drugs. Of note for one of these petitions, the Federal Circuit already affirmed the validity of the branded company’s patent directed to the treatment of glaucoma by administering two drugs in a single composition, in Allergan, Inc. v. Sandoz Inc., No. 11-1619 (Fed. Cir. May 1, 2013). The petitioners apparently aimed to take advantage of the differences between the PTAB’s broadest reasonable interpretation standard for claim construction and the principles of claim constructions used by district courts as set forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). These apparent targeted filings demonstrate the sea-change as a result of the post-grant proceedings.

While it is early to discern certain trends in these post-grant proceedings, patent owners and branded pharma should be prepared for challenges by these unfamiliar foes in addition to the usual adversaries. It also goes without saying that one needs to consider these type of attacks when evaluating a portfolio and prosecuting applications likely to be subject to attack. This goes to the heart of Darwin’s quote. That is, today’s portfolio management and prosecution need to be just as inventive as the technology it seeks to protect. For example, one needs to consider claim scope, continuation practice, the use of information disclosure statements, and other USPTO proceedings (supplemental examination, Track One prioritized examination, etc.) in portfolio management and prosecution. Seeking strong patent protection needs to be just as proactive as those using these post-grant proceedings to challenge pharmaceutical patents.