Kyle Bass Group's Challenge of Cancer Drug Patent Denied

Life Sciences Law & Industry Report connects the dots among the many disciplines that make up the burgeoning life sciences industry, with biweekly updates on current regulatory, legislative,...

By John T. Aquino

Oct. 21 — A hedge fund coalition's citation of a website as justification for declaring a blood cancer drug patent invalid as obvious was insufficient because the website didn't qualify as prior art, the patent board held Oct. 19.

The Patent Trial and Appeal Board didn't rule on Pharmacyclics' argument that the Coalition for Affordable Drugs challenge constituted an improper use of the board's process.

The PTAB, part of the Patent and Trademark Office, instead denied the coalition's petition because the coalition hadn't shown that it was likely to succeed in showing that the claims at issue are unpatentable.

Series of Patent Challenges

The coalition, which was co-founded by hedge fund manager Kyle Bass, had sought to challenge the validity of a Pharmacyclics patent that covers cancer drug Imbruvica. The coalition petitioned for inter partes review (IPR), a process created by the America Invents Act (AIA) that allows third-party challenges to existing patents on the grounds that the claims are either anticipated or rendered obvious by prior art, which is defined as published patents or publications.

The petition was filed in April, a month before AbbVie acquired Pharmacyclics.

Pharmacyclics asked the board to deny the petition on its merits and also because the coalition's alleged purpose in its challenges was to manipulate the stock prices of the pharmaceutical companies for financial advantage, which constituted improper use of the IPR process.

The coalition has more than two dozen drug patent IPR petitions pending. One of its life-sciences-related petitions was granted, and the other five that the PTAB has reviewed were denied. This has led Bass to call the PTAB a “kangaroo court” that came up with excuses not to review his challenges because it finds him “too disruptive.”

But the PTAB also has denied Celgene's motion to sanction the coalition and to consequently deny for improper use its IPR petition challenging Celgene's patents, saying that the coalition's intent was irrelevant under the statute.

The way the coalition and other hedge fund-related entities use the IPR process has prompted calls for Congress to revise the AIA to clarify the proper use.

Web Page Not 'Prior Art.'

The patent at issue, U.S. Patent No. 8,754,090 B2, is titled “Use of inhibitors of bruton's tyrosine kinase (Btk).” In a decision authored by Administrative Patent Judge Tina E. Hulse, the board said that the coalition relied on a document designated as “NCT00849654” for its challenge that the '090 patent is anticipated under 35 U.S.C. §102(b) and/or obvious under 35 U.S.C. §103.

Although the coalition said that NCT00849654 is a “published clinical trial document,” Hulse noted that it was a copy of a Web page from regarding the “Study of the Safety and Tolerability of PCI-32765 in Patients With Recurrent B Cell Lymphoma,” ClinicalTrials Identifier NCT00849654. is a registry and results database of publicly and privately supported clinical studies operated by the National Institutes of Health.

Pharmacyclics argued that NCT00849654 wasn't a “printed publication” that qualifies as available prior art in an IPR review.

No Direct Evidence

Hulse wrote that the board agreed with Pharmacyclics that the coalition hadn't met its initial burden of showing that NCT00849654 is a prior art printed publication.

According to Hulse, the Web page itself didn't provide direct evidence of the substance of the clinical trial or of the date of any discoveries from the trial.

The coalition also didn't offer any evidence of the website's publishing practices, how the website disseminates information to the public or when the website became available to the public, Hulse said.

“We, therefore, determine that Petitioner has not satisfied its initial burden of coming forward with sufficient evidence to make a threshold showing that NCT00849654 is a prior art printed publication,” the board wrote, denying the petition for IPR proceedings. It dismissed Pharmacyclics' motion for sanctions and the coalition's motion to correct a clerical error in its filing as moot.

To contact the reporter on this story: John T. Aquino in Washington at

To contact the editor responsible for this story: Lee Barnes at

The decision is at