Score another win for pharma against investment funds-turned-IPR petitioners. On September 21, 2015, the PTAB denied institution of Ferrum Ferro Capital, LLC’s (“FFC”) petition for IPR of an Allergan patent claim related to its Combigan^® eye-drop product for treating glaucoma. This dispute has attracted publicity for having bled into the courts, where Allergan has sued FFC for extortion, unfair competition, and malicious prosecution. The PTAB’s non-appealable denial of FFC’s petition is obviously a significant victory for Allergan, and follows the PTAB’s recent denials of two IPR petitions filed by the Coalition For Affordable Drugs.  It also reflects decisions made by FFC, including challenging an already battle-tested patent claim, based on much of the same prior art unsuccessfully asserted by others and reviewed by the Federal Circuit, and arguing that claim language is not limiting under the BRI standard.

FFC aimed its petition at a single patent claim: claim 4 of U.S. Patent No. 7,030,149, which is directed to a method of treating glaucoma or ocular hypertension by topically administering two daily doses of brimondine—“without loss of efficacy” compared to three daily doses—where 0.2% brimonidine is administered in a single composition with 0.5% timolol.

This claim, however, has already survived a validity challenge, including in a Federal Circuit decision in Allergan, Inc. v. Sandoz Inc., 726 F.3d 1286 (Fed. Cir. 2013) (“Sandoz”). There, the Federal Circuit affirmed, in pertinent part, a district-court decision in which multiple generic pharmaceutical companies tried but failed to prove the claim was obvious by clear and convincing evidence.

Despite the generics’ failure (albeit under the higher standard), FFC petitioned for IPR of the claim, relying on two of the three references asserted in the earlier litigation and addressed by the Federal Circuit. FFC argued that the express claim language “without loss of efficacy” should be not be treated as a claim limitation under the BRI standard, arguing that such a construction is “reasonable,” based on expert testimony that a person of ordinary skill in the art would understand the term as an intended result, not as a required step, and based on case law regarding how recited intended results of process steps should not be given patentable weight.

Allergan responded that the Federal Circuit construed claim 4 as requiring no loss of efficacy, and that FFC’s petition improperly read the corresponding language out of the claim. In so doing, Allergan added, FFC offered no evidence to prove that the recited result was the necessary result of the remaining claim limitations. Allergan further argued that FFC is abusing the IPR process because it is not a legitimate patent challenger and has used its petition to threaten Allergan, resulting in the lawsuit Allergan has brought against FFC. Allergan added FFC has no principal place of business, and instead maintains a mail drop box at a location in Wilmington, Delaware, for which Allergan was happy to provide a Google Maps street view (“The Neighborhood Mailbox”).

With the PTAB’s authorization, FFC filed a reply, but devoted most of it to responding to Allergan’s allegations of abuse of process, rather than addressing the merits of the petition.

The PTAB made short work of all of this in its decision. Sticking strictly to the patent issues, the PTAB decided that “without loss of efficacy” is a limitation, even under the BRI standard. In reaching that result, the PTAB discussed the Sandoz decision, and acknowledged case law discussed in the dissenting opinion of Sandoz, holding claim limitations that merely recite a newly-discovered result of a known process do not distinguish the claims over the prior art. But the PTAB concluded that neither that case law nor the Sandoz decision indicate that a recited result should not be treated as a claim limitation.

The PTAB then addressed the asserted obviousness of claim 4. Following the Federal Circuit’s evaluation in Sandoz, the PTAB determined that the record evidence did not establish that “without loss of efficacy” (for dose reduction from three to two times per day) is a necessary result of administration of the recited composition. The PTAB considered the asserted reference not at issue in Sandoz, but concluded that the reference had the same deficiencies as the art addressed in Sandoz. Namely, even if the new reference disclosed that the required dose reduction of 0.2% brimonidine resulted in “no difference in intraocular pressure effects,” as FFC and its expert contended, that did not sufficiently establish that the required dose reduction of a composition comprising 0.2% brimonidine and 0.5% timolol necessarily resulted in no loss of efficacy in the treatment of glaucoma or ocular hypertension. The PTAB accordingly decided FFC had not shown a reasonable likelihood of prevailing in its obviousness assertion.

The PTAB did not indicate giving any weight to the parties’ arguments regarding FFC’s alleged abuse of the IPR process.

[The PTAB’s denial] reflects decisions made by FFC, including challenging an already battle-tested patent claim, based on much of the same prior art unsuccessfully asserted by others and reviewed by the Federal Circuit, and arguing that claim language is not limiting under the BRI standard.

In summary, the PTAB’s denial of FFC’s petition is a significant victory for Allergan, especially given the recent wave of petitions that investment funds have filed against pharma companies. It also reflects decisions made by FFC, including challenging a patent claim on grounds that the Federal Circuit had mostly already reviewed and rejected, and arguing that claim language should be read out of a claim under the BRI standard.