As the patent community anxiously awaits the PTAB’s decision concerning whether the Coalition For Affordable Drugs (CFAD) should be sanctioned for filing an IPR petition against a Celgene patent¹, the PTAB recently denied institution of two IPR petitions² the CFAD filed concerning two Acorda patents that cover Ampyra, a billion-dollar drug for treating multiple sclerosis.  The CFAD is a wholly owned subsidiary of a hedge fund managed by Kyle Bass and, since February 2015, Bass and the CFAD have filed twenty nine IPR petitions against more than twenty patents different patents belonging to at least fifteen different companies.  Not surprisingly, preliminary Patent Owner responses have asserted that the petitions are an abuse of process or otherwise inconsistent with the intent of the AIA.  For commentary on the perceived abuse of the IPR process by non-practicing entities such as CFAD, see “Is the Coalition for Affordable Drugs Abusing the IPR Process?”

In the two Acorda proceedings, the PTAB rejected CFAD’sargument that posters displayed at a scientific conference qualified as prior art.  During prosecution, Acorda disclosed the posters in an Information Disclosure Statements (IDS).  But, the PTAB stated that the IDS submission does not constitute an admission that the posters qualify as prior art:

“[T]he submission of an IDS does not constitute an admission that a cited reference is material prior art . . . Because Petitioner does not indicate that the [] posters were distributed (rather than presented) or indexed, we consider…: ‘[1] the length of time the display was exhibited, [2] the expertise of the target audience, [3] the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and [4] the simplicity or ease with which the material displayed could have been copied.’. . . “

Here, the Petitioner presented insufficient evidence as to how long the posters were presented.  Indeed the PTAB noted that  the “only credible evidence of record indicating that the posters were presented at all is in the form of IDSs stating that the posters were ‘presented’.”  The Petitioner also presented insufficient evidence in relation to “the expertise of the target audience,” and in relation to any reasonable expectation that one could have copied the poster material, or evidence regarding the ease with which the poster material could have been copied.  Overall, evidence of record failed to demonstrate adequately how long the posters were presented to anyone, or to whom exactly, or what conversations anyone might have had with authors about the posters.

Patent Owners in the bio/pharma sectors surely welcomed the PTAB’s decision.  However, it remains to be seen whether the many other CAFD petitions will be decided on their merits or whether the PTAB will find CAFD used the IPR system for an illegitimate purpose.

Having thus considered the above factors, the PTAB was not persuaded that Petitioner made a threshold showing that the posters were sufficiently publicly accessible to qualify as a printed publication under § 102(b).

Patent Owners in the bio/pharma sectors surely welcomed the PTAB’s decision.  However, it remains to be seen whether the many other CFAD petitions will be decided on their merits or whether the PTAB will find CFAD used the IPR system for an illegitimate purpose.

¹ In IPR2015-01092, IPR2015-01096, IPR2015-01102, and IPR2015-01103, the PTAB authorized a motion for sanctions under the existing rules against CAFD.  Celgene filed their motion on July 28, 2015, and  CAFD filed an opposition to the motion for sanctions on August 11th, 2015.  On August 20, 2015, , patent owner filed a reply to the CAFD opposition.

² IPR2015-00720 and IPR2015-00817