The recent decisions of the USPTO Patent Trial and Appeal Board (PTAB) granting Celgene’s requests for rehearing in parallel Inter Partes Review proceedings brought by Kyle Bass’s Coalition for Affordable Drugs (CFAD) are notable in several respects. First, the fact that the PTAB granted rehearing and partially reversed its original rulings is a rare success for a patent owner. Second, the fact that Celgene was able to uphold one of the challenged claims highlights the potential value of obtaining a variety of claims and defending them on an individual basis.

The Celgene Patent At Issue

The decisions at issue were rendered in three parallel IPRs: Affordable Drugs VI, LLC, v. Celgene Corporation (IPR2015-01098, IPR2015-01102, and IPR2015-01103).  The patent at issue in all three proceedings was Celgene’s U.S. 6,315,720, which is directed to methods of “delivering” (distributing) teratogenic drugs (such as Thalidomide) in a way that restricts access to patients that have an acceptable risk profile.  Independent claim 1 recites:

1. In a method for delivering a drug to a patient in need of the drug, while avoiding the occurrence of an adverse side effect known or suspected of being caused by said drug, wherein said method is of the type in which prescriptions for said drug are filled only after a computer readable storage medium has been consulted to assure that the prescriber is registered in said medium and qualified to prescribe said drug, that the pharmacy is registered in said medium and qualified to fill the prescription for said drug, and the patient is registered in said medium and approved to receive said drug, the improvement comprising:
defining a plurality of patient risk groups based upon a predefined set of risk parameters for said drug;
defining a set of information to be obtained from said patient, which information is probative of the risk that said adverse side effect is likely to occur if said drug is taken by said patient;
in response to said information set, assigning said patient to at least one of said risk groups and entering said risk group assignment in said medium;
based upon said information and said risk group assignment, determining whether the risk that said adverse side effect is likely to occur is acceptable; and
upon a determination that said risk is acceptable, generating a prescription approval code to be retrieved by said pharmacy before said prescription is filled.

Claim 10, which is the only claim for which Celgene requested rehearing recites that the information set upon which a determination is made includes genetic testing results.

The Final Written Decisions

The final written decisions held all claims invalid as obvious over certain THALOMID™ prescribing information in view of Cunningham (U.S. 5,832,449) and further in view of the knowledge of one of ordinary skill in the art.  The PTAB additionally relied on the testimony of CFAD’s expert, Dr. Fudin, and his interpretation of FDA meeting minutes that discussed genetic counseling for pregnant women.  Based on the combined references and the other evidence of record,  the PTAB held with respect to claim 10 “that the genetic testing of dependent claim 10 represents a combination of known elements for their known use to achieve a predictable result.”

The PTAB Request For Rehearing Decision

Celgene requested rehearing, asserting the PTAB erred in finding claim 10 obvious.  Specifically, Celgene alleged that CFAD had not provided sufficient evidence to prove that genetic testing for the claimed purpose was “common,” as CFAD’s alleged, and that the PTAB impermissibly shifted the burden onto Celgene to show that genetic testing was not known in the art for the claimed purpose.

In a rare move, the PTAB granted Celgene’s requests for rehearing, and admitted its error:

We agree that the proper focus is not whether Patent Owner disputed that fact, but whether Petitioner came forward with evidence sufficient to demonstrate that genetic testing was known and would have been used in the combination required by claim 10. We also agree that the lack of disclosure in the prior art of record—coupled with the record’s disclosure of other types of tests—cuts against a finding “that genetic testing would be used, let alone that it would have been common.”

Perhaps the PTAB had seen the Federal Circuit decision in Honeywell, which reversed the Board for improperly shifting the burden to the patent holder on a different issue.

Thus, the PTAB ultimately held that CFAD did not demonstrate that claim 10 was unpatentable, and the final written decision for each of the IPRs was modified to hold that only claims 1-9 and 11-32 are unpatentable.

Requests For Rehearing Rarely Reap Reward

It is no secret that the odds of succeeding on a PTAB request for rehearing are extremely long. Hundreds of requests for rehearing have been filed since the AIA took effect, and only a handful have been granted.  However, cases like this show that if a party is able to articulate a clear error in legal analysis–rather than simply a disagreement with the way in which the evidence was weighed–the PTAB may acknowledge its mistake and reverse an earlier holding. In order to identify errors that may provide a solid basis for a request for rehearing, parties may want to take careful note of the PTAB’s articulated rationales in both its institution decisions and its final written decisions. While requests for rehearing may rarely reap reward, when they do, the reward can be great.

As noted above, this case also highlights the potential value of obtaining a variety of claims. The patent at issue included two independent claims, with 26 claims dependent from claim 1 and four claims dependent from claim 28. While preserving 1 claim out of 32 might not sound like a good result, if that one claim encompasses relevant products, it could have significant commercial value.