PTO Denies Hedge Fund Challenge of Allergan Glaucoma Patent

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By John T. Aquino

Sept. 28 — A hedge fund company didn't convince the patent board that its challenge of a glaucoma treatment claim would succeed if the challenge went to trial, the board concluded Sept. 21 in an order denying the fund's petition.

Ferrum Ferro Capital LLC had filed a petition for inter partes review (IPR) with the Patent Trial and Appeal Board, alleging that a claim of Allergan's patent was invalid as obvious.

The IPR was created by the America Invents Act and allows third-party challenges of the validity of patent claims, but only on the grounds that the claims aren't novel or that they're obvious.

Decision Made on Merits

The Biotechnology Industry Organization and members of Congress have accused Ferrum Ferro and other hedge-fund related entities of using the IPR process to enable them to sell stocks short for a profit. Allergan filed litigation that's still pending in the U.S. District Court for the Central District of California against Ferrum Ferro alleging that the petition constituted attempted extortion, malicious prosecution and unfair competition.

Three days after the board's decision in Allergan, the PTAB concluded that hedge fund manager Kyle Bass's Coalition for Affordable Drugs' challenge of Celgene's blood cancer treatment patent hadn't constituted an abuse of process. But the board in Allergan didn't address the issue of Ferrum Ferro's motive.

The board concluded that the U.S. Court of Appeals for the Federal Circuit had already rejected the argument Ferrum Ferro presented that the claim of Allergan's patent was invalid as obvious because of a prior patent and that a publication that predated Allergan's patent that the Federal Circuit hadn't considered also didn't establish that the claim was obvious.

Phrase Given Patentable Weight

At issue is claim 4 of U.S. Patent No. 7,030,149, for a method of reducing the number of daily topical ophthalmic doses of brimonidine administered to treat glaucoma or ocular hypertension to two times a day from three with the same effectiveness. Each dose would be a concentration of brimonidine of 0.2 percent by weight and 0.5 percent timolol by weight.

The Federal Circuit in Allergan, Inc. v. Sandoz, Inc. upheld 2 to 1 the validity of claim 4 of the '149 patent. In its IPR petition, Ferrum Ferro argued that the claim should be found invalid because of the different legal standard used in a PTAB proceeding as opposed to that of a federal court and extensively quoted the Sandoz dissent, which would have found claim 4 invalid.

Ferrum Ferro contended that the phrase “without the loss of efficacy” wasn't a claim limitation but instead recited an intended result and therefore shouldn't be given patentable weight.

In an order by Administrative Patent Judge (APJ) Jacqueline Wright Bonilla, the PTAB said, “Neither [other Federal Circuit] case law, nor the dissent in Allergan v. Sandoz, indicates that we should consider a recited result not to be a limitation in a method claim simply because it recites a result.”

Not Obvious Under Prior Art

Regarding whether claim 4 would have been obvious as a result of prior publications or patents, the board restated the Federal Circuit's conclusion that claim 4 wasn't obvious as a result of U.S. Patent No. 5,502,052.

In response to Ferrum Ferro's new allegation that claim 4 was obvious as a result of a 2000 journal article, the board said that this argument “suffers the same failures” discussed in the majority opinion in Sandoz: Reducing the dosage of 0.2 percent brimonidine from three times to twice daily, as discussed in the article, wouldn't establish that similarly reducing the number of doses of a single composition of 0.2 percent brimonidine and 0.5 percent timolol from three to two times daily would have resulted in no loss of effectiveness in treating glaucoma or ocular hypertension.

Having decided that Ferrum Ferro hadn't shown a reasonable likelihood of prevailing in asserting that claim 4 was obvious as a result of a prior patent and a prior publication, the board denied its petition for an IPR.

Series of PTAB Petition Denials

The order follows other denials of hedge fund-related IPR petitions. The PTAB Aug. 24 denied the Coalition for Affordable Drugs' IPR petitions seeking to invalidate Acorda Therapeutics' patents covering its multiple sclerosis drug Ampyra. and on Sept. 2 rejected its petition for an IPR to challenge Biogen Inc.'s MS drug Tecfidera.

The Ferrum Ferro case was argued before APJs Bonilla, Sheridan K. Snedden and Susan L.C. Mitchell.

Ferrum Ferro was represented by Amir Naini and Jeffrey Liao of Russ August & Kabat, Los Angeles. Allergan was represented by Dorothy P. Whelan and Michael Kane of Fish & Richardson P.C., Minneapolis.

To contact the reporter on this story: John T. Aquino in Washington at jaquino@bna.com

To contact the editor responsible for this story: Lee Barnes at lbarnes@bna.com

The order is at http://op.bna.com/hl.nsf/r?Open=jaqo-a2shpb.