Mimesis Law
21 September 2019

Bass & Co. Break The IPR Ice Against Shire

Oct. 9, 2015 (Mimesis Law) — Kyle Bass has claimed his first Big Pharma scalp, with the IPR filed by his Coalition for Affordable Drugs against Shire’s ‘720 patent instituted yesterday – in a generally busy day for IPR decisions of interest to investors. ‎The headline though, belonged to Bass as the patent he challenged protects the exclusivity through 2020 of a key revenue producing for Shire – Lialda. Interestingly, that same patent is currently involved in traditional Hatch-Waxman litigation that Shire is pursuing against some generic ANDA-filers. What makes IPR’s a game-changer of course is the fact that those co-pending cases carry no weight in the PTAB’s handling of an IPR filed by a third-party like Bass.

Shire investors, with this institution decision, now face the possibility that this critical patent will be invalidated by the PTAB in one year from now, irrespective of any developments in the cases pending in the District Court. At this point, it is worth a reminder about institution decisions generally. For one, Shire can ask for rehearing in the PTAB, typically an uphill battle. Second, under current law -though a pending Supreme Court petition asks for that to change – Shire can’t appeal this institution decision. At this point, the PTAB has decided that Bass & Co. have demonstrated that the ‘720 patent is likely invalid, and that the IPR should proceed to the one year trial phase. That process will unfold over the next year, and if Bass’ professed aversion to settlement holds, we will likely know more about the ultimate fate of the ‘720 patent, and Shire’s ability to wield it to protect against generic competition in about a year from now.

Another important aspect of this decision on a macro level is the fact that it lays to rest any argument that the PTAB is somehow biased against Bass. What is clear, and admirable, is that the PTAB has done it’s best to strive for consistency with respect to its procedural rulings, while staying as true as possible to its statutory mandate — and most importantly deciding petitions on the merits, regardless of the filer or target. ‎Whether they meet those high standards in every IPR will continue to be debatable, but they have shown for now that they will institute Bass’ IPR’s when they feel his petitions warrant that result. That was not the result that Shire wanted in this case, and not the one that Big Pharma wanted either. But there are plenty more IPR’s filed by Bass awaiting decision, and it’s clear that he will be a force to be reckoned with, at least for Shire, and possibly other drug makers.

SHPG

Disclosures and Disclaimers:

Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material. Questions or comments can be directed to me at gaston@markmanadvisors.com. All suggestions are welcome.

 

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