USPTO rejects Celgene bid for Bass sanctions

The US Patent and Trademark Office (USPTO) has rejected a request by biopharmaceutical company Celgene to sanction hedge fund manager Kyle Bass and his organisation the Coalition for Affordable Drugs.

Celgene filed a motion at the USPTO’s Patent Trial and Appeal Board (PTAB) in July in which it called for Bass to face sanctions and for the dismissal of two inter partes reviews (IPR) that the coalition had filed against the company.

Bass had argued that two patents should be declared invalid. The patents—US numbers 6,315,720 and 6,045,501—were targeted in April and May this year respectively.

The ‘720 patent covers a method for helping a patient avoid the adverse side effects of drugs used to treat teratogens. The ‘501 patent is called “Methods for delivering a drug to a patient while preventing the exposure of a foetus or other contraindicated individual to the drug”.

But in a decision handed down on Friday, September 25, the PTAB refused to sanction Bass on the grounds raised by Celgene. The company had said that Bass and the coalition, which has filed several IPR petitions against life sciences companies, lacked any “legitimate competitive interest” in the validity of the patents, unlike generic drug companies.

In response, the PTAB said that petitioners are not limited to competitors.

Celgene had added in its motion that after the stock price of a company drops following an IPR petition, Bass would “bet against, or short, the shares of companies ... and wager on rivals that could benefit”.

But the PTAB said that profit is “at the heart of nearly every patent and nearly every inter partes review.”

Celgene had also argued that the coalition’s IPRs were contrary to the purpose of the America Invents Act (AIA), which it said was set up to reduce abusive litigation tactics.

But in its decision, the PTAB said: “The purpose of the AIA was not limited to just providing a less costly alternative to litigation. Rather, the AIA sought to establish a more efficient and streamlined patent system that improved patent quality, while at the same time limiting unnecessary and counterproductive litigation costs.”