On June 7, 2017, the PTAB issued a final written decision in IPR 2016-00254 canceling claims in a Fresenius Kabi USA, LLC (Fresenius) patent covering Diprivan®. The PTAB instituted the IPR in response to a petition filed by hedge fund manager Kyle Bass and his colleague Erich Spangenberg. Diprivan® is the commercial name for propofol, an intravenous anesthetic agent used during surgery and other medical procedures.

The Fresenius patent claims pharmaceutical formulations of propofol that are stored in containers having nonreactive, inert closures. The Petitioners argued that a person of ordinary skill in the art would have recognized the advantages of siliconizing rubber closures and would have had a reason to siliconize the rubberr closure of Diprivan® with a reasonable expectation of success.

The Patent Owner argued that any purported manufacturing benefits of siliconization would not have motivated a person of ordinary skill in the art to replace the commercially successful Diprivan® rubber stoppers because there was no evidence that Diprivan® stoppers experienced any sticking problems or other manufacturing issues.

The PTAB agreed with the Petitioners, however, noting:

That the prior art does not include explicit reports of manufacturing issues with Diprivan rubber stoppers in particular is not fatal to Petitioner’s argument. We are persuaded by the weight of the evidence that it was understood by a person of ordinary skill in the art that rubber stoppers generally have issues with friction during manufacturing, which is commonly cured by adding silicone oil to the stoppers….Accordingly, we find the weight of the evidence sufficient to support Petitioner’s argument that a person of ordinary skill in the art would have had a reason to use siliconized rubber stoppers with Diprivan to improve the machinability of those stoppers. [Paper No. 47, p. 14-16]

The PTAB was also not persuaded by the Patent Owner’s “teaching away” arguments that any changes to the approved packaging and manufacturing lines risks significant additional regulatory review and that a person of ordinary skill in the art would have been discouraged from using a siliconized stopper because of safety concerns with silicone oil contamination.

The Fresenius case was somewhat unusual in that Bass, the billionaire founder of Hayman Capital Management, and Spangenberg, a self-proclaimed “patent troll,” filed the petition under their own names. Most of their other challenges were brought by a group that they created called the Coalition for Affordable Drugs (CFAD). We previously blogged about the complex web of actual and potential real parties-in-interest concerning Kyle Bass, Erich Spangenberg and the CFAD.