August 05, 2015
Authored and Edited by James D. Stein; Cortney S. Alexander
In Coalition for Affordable Drugs VI, LLC. v. Celgene Corp., IPR2015-01092, -01096, -01102, and -01103, patent owner Celgene asked the PTAB to authorize a motion for sanctions against Coalition for Affordable Drugs VI (“Coalition”). Celgene asserts that Coalition filed the IPR petitions against Celgene’s patents “as part of [a] strategy to profit from affecting stock prices.” IPR2015-01092, Paper 11 at 1. Celgene contends this was an abuse of process. Id.
The PTAB, acting through an expanded panel, authorized Celgene’s motion and asked the parties to brief three issues: (1) the elements required to establish “abuse of process” or “improper use of the [IPR] proceeding” under 37 C.F.R. § 42.12(a)(6)-(7); (2) the applicable standard of proof; and (3) any evidence of Coalition’s intent to abuse the IPR process.
Regarding the elements required for abuse of process, Celgene argues that a party abuses IPR “when it uses it to achieve a goal for which the process was not designed,” a standard Celgene asserts other courts and agencies have adopted in other contexts. Id. at 10. Regarding the standard of proof, Celgene urges the PTAB to adopt a “reasonable likelihood” standard. Id. at 10, n. 3.
Regarding evidence of intent to abuse the IPR process, Celgene relies largely on its characterizations of Coalition’s motive in filing its petitions. While Coalition states that its IPRs support generic drug entry and lower prices, id. at 6, Celgene asserts that Coalition is a shell company formed to profit its founders, including patent-monetization specialist IPNav and investment firms controlled by hedge-fund manager J. Kyle Bass. Id. at 4-5.
Celgene contends that the following allegations establish intent to abuse IPR:
Given the expanded panel, the PTAB may address a framework for showing abuse of post-grant review proceedings.
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