CFAD’s Additional Briefing on “Abusive” IPRs

Earlier this month, PTAB asked for additional briefing on whether the two IPRs filed by the Coalition for Affordable Drugs (“Bass Group”, or “CFAD”) against NPS should be dismissed for abuse of process.  In its Brief in Response to the Board’s Request for Additional Briefing, NPS responded to the PTAB’s request for additional briefing, as summarized here.

Last night, CFAD filed its Brief in Response to the Board’s Request for Additional Briefing making the following arguments:

1. The standing requirement for challenging the validity of that patent in an inter partes review under 35 U.S.C. § 311(a):

The language of 35 U.S.C. § 311(a) authorizes any “person who is not the owner of a patent [to] file with the Office a petition to institute an inter partes review of the patent.”  CFAD alleges that the language is clear and unambiguous, and there are no applicable statutes, regulations, or rules limiting IPR standing.

CFAD further contrasts IPR standing to standing under Covered Business Method review, stating that “[t]he different standing requirements of these related sections of the AIA are significant because ‘Congress generally acts intentionally when it uses particular language in one section of a statute but omits it in another.’ ”

2. To what extent, if any, the business objective or intent of the Petitioner should be considered in reaching a determination of abuse of process:

CFAD alleges that NPS’s proposed financial-motivation bar would implicate the motivations of every IPR petitioner, resulting in the exception swallowing the entire IPR process.  CFAD is not engaging in securities fraud, and their business method is irrelevant to reaching a determination on the claim of abuse of process.

3. The intent of Congress to provide an alternative to litigation and to provide a mechanism to increase patent quality by allowing expedited administrative patent challenges:

CFAD states that the clear, unambiguous, language of 35 U.S.C. § 311(a) should be regarded as conclusive, thus legislative history does not need to be evaluated.  Even considering the legislative history, however, CFAD states that it does not show that Congress created IPR exclusively as an alternative to litigation.

4. The resulting social costs/benefits associated with a decision to address the merits of the Petitions versus a decision to dismiss the Petitions for abuse of process without reaching the merits of the Petitions:

CFAD alleges that both the Federal Circuit and the Supreme Court have recognized that there is a significant public policy interest in removing invalid patents from the public arena.  Likewise, Congress implemented administrative challenges to patents, such as IPR, to “ensure that poor-quality patents can be weeded out through administrative review rather than costly litigation.”  Furthermore, few, if any, consumers have the financial wherewithal to challenge poor-quality pharmaceutical patents.  Thus, regardless of CFAD’s business form or motivation for challenging the validity of the ‘886 patent, the challenge serves an important public interest: it opens the door to fair competition through a process that is unaffordable to those who will benefit most.

CFAD additionally imbeds the following arguments into its brief:

  • Dismissing the proceeding as a sanction would be arbitrary and capricious, and violate Due Process.
  • The First Amendment to the United States Constitution demonstrates CFAD’s right to bring this petition.
  • CFAD’s right to file its petition is reinforced by the Supreme Court’s Noerr-Pennington doctrine.

Stay tuned to the Big Molecule Watch for PTAB’s decision on this issue.