On May 20, 2016, the PTAB granted Kyle Bass and Erich Spangenberg’s petition for IPR (IPR2016-00245) against a patent owned by Alpex Pharma SA (Alpex).  The petition sought cancellation of claims 1-9 of U.S. Patent No. 8,440,170, asserting that the claims were obvious in view of numerous references.  The claims of the ‘170 patent are generally directed to orally disintegrating tablets with a speckled appearance.  According to the ‘170 patent, the speckled appearance can be achieved by using colored granules of a water-soluble sugar, and provides easy identification by doctors and patients.  Bass and Spangenberg argue in the petition that the patent is invalid as obvious because speckles comprising colored granules of a water-soluble sugar were well-known in the art at the time of the invention.

The PTAB was persuaded that Bass and Spangenberg’s petition established a reasonable likelihood that they would succeed in showing that claims 1–3, 5, 6, 8 and 9 of the ‘170’ are invalid as obvious over a combination of prior art that included the drug label for Prevacid® delayed release capsules and a US patent that describes a speckled sugarless chewing-gum.

It will be interesting to see whether Bass, the billionaire founder of Hayman Capital Management, and Spangenberg, a self-proclaimed “patent troll,” file future IPR petitions in their own names and how the RPIs listed in their future petitions are influenced by the targeted patent owner.

Perhaps more interesting than the substance of the petition and institution decision is the fact that this latest challenge by Bass and Spangenberg makes no mention of the Coalition for Affordable Drugs (CFAD), a group made up of Bass, Spangenberg and their respective companies.  To date, CFAD has challenged nearly three dozen patents, allegedly as part of an investment strategy aimed at driving down the stock price of the drug companies being targeted.  Indeed, this blog has highlighted many of the IPR’s associated with the CFAD.

• “PTAB Denies Institution of Two IPR Petitions Filed by Hedge Fund”
• “Is the Coalition for Affordable Drugs Abusing the IPR Process?”
• “PTAB Requests Further Briefing on Petition for Sanctions Against Hedge Fund Coalition”
• “Pharma Patent Owner Attacks Bass IPR Petitions by Requesting Discovery of Real Parties-In-Interest”
• “A Second Bite at the Apple? Kyle Bass’s CFAD is Awarded IPR Institution of Follow-on Petitions”

The petition takes aim at Citius Pharmaceuticals Inc.’s obesity drug Suprenza®, purportedly covered by the ‘170 patent.  The petition states that Bass and Spangenberg are the sole real parties in interest and that they have no “financial interest in any securities” in either Citius or Alpex.  Indeed, none of the aforementioned companies appear to be listed on any major stock market index.

We have previously blogged about the complex web of actual and potential real parties-in-interest (RPI) concerning Kyle Bass, Erich Spangenberg and the CFAD.   The fact that Bass and Spangenberg were at pains to deny financial interest in both Citius and Alpex signals their sensitivity to attacks directed to issues of real party in interest (RPI).  Indeed, Alpex did not raise any RPI concerns in their reply, nor did the PTAB discuss RPI in their institution decision.  It will be interesting to see whether Bass, the billionaire founder of Hayman Capital Management, and Spangenberg, a self-proclaimed “patent troll,” file future IPR petitions in their own names and how the RPIs listed in their future petitions are influenced by the targeted patent owner.