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17 June 2015Americas

BIO 2015: IPR not petitioner friendly, USPTO judge claims

Jacqueline Wright Bonilla, an administrative judge at the US Patent and Trademark Office (USPTO), has told the BIO International Convention that despite inter partes review (IPR) proceedings appearing to favour petitioners, the USPTO is not pro-petitioner, patent owner or even IPR.

In what appeared to be the most attended intellectual property session so far at  this year’s conference, yesterday, June 16 a panel discussed the impact of IPR proceedings on the life sciences sector.

While IPRs have their benefits, offering companies a cheaper and quicker way of challenging patents, Joseph Kenny, chief patent counsel at Massachusetts-based biotechnology company ImmunoGen, said that the two IPRs filed against his company have created a “big drain” on its budget as it prepares to defend itself.

The proceedings have recently been in the news, as hedge fund manager Kyle Bass, on behalf of his Coalition for Affordable Drugs, has been using them to challenge what he deems to be weak patents.

Since he started his campaign this year, no fewer than 15 pharmaceutical companies have received petitions from Bass.

Published figures on the rates of invalidation suggest the process is petitioner-friendly, and former chief judge at the US Court of Appeals for the Federal Circuit Randall Rader called the IPR a “death squad” for patents.

A slide at the conference showed that in the 323 final written decisions issued as of June, 82.5% of patent claims were cancelled.

Gary Margolis, principal and general counsel for healthcare investment company DRI Capital, said that “scary stats” like these are what cause stocks to drop when patent claims are invalidated.

However, Wright Bonilla said the figures reflect the very first patents to be tested by the proceedings—the “low-hanging fruit” patents that petitioners knew to be weak. A total of 65% of challenged patent claims go to trial, she added.

The panel also considered the fairness of IPR proceedings. A show of hands revealed that many of the audience thought they favour petitioners rather than patent owners. One member of the audience said that while he doesn’t believe IPRs to be unfair, the problem is that they appear to be unfair.

Another audience member accused the IPR of “burden shifting” where the patent owner must prove that its patent is valid. Wright Bonilla countered, maintaining that the burden is with the petitioner to prove that the targeted patent is invalid.

So what will become of Kyle Bass’s IPR petitions? None of his petitions has been instituted so far, said Margolis, who added that by August we’ll know which, if any, will be.

He added that even if Bass’s challenges are successful, it wouldn’t mean that generic drugs would enter the market.

The  2015 BIO International Convention is taking place in Philadelphia from June 15 to 18.

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