Markman Note: Is Bass Going To Eat FWP’s Lunch?
May 17 , 2015 (Mimesis Law) — Forward Pharma’s (FWP) story is an interesting one. A recent IPO, Forward’s main assets are intellectual property and development prospects surrounding treatments for multiple sclerosis. In fact, one of the reasons the company exists is to monetize a patent portfolio acquired from a company called Aditech relating to MS treatments using an old compound called DMF. Forward’s investors are enthused about the fact that Biogen is currently selling a DMF-based drug called Tecfidera; one of the biggest blockbuster drugs of the past year.
Part of Forward’s game plan was to target a key patent (Biogen’s ‘514 Patent) that protects 8 years or so of exclusivity (thru 2028) for Biogen’s Tecfidera’s revenues. Forward’s trump card is a pending patent application that directly mirrors the ‘514 Patent, and Forward’s investors celebrated when the USPTO declared an interference between the pending FWP application and the ‘514 Patent. The interference will play out over the next year or two, but FWP’s investors were heartened by the USPTO’s declaration that FWP was the “senior party” — more likely to have invented the disputed technology first. The idea for Forward would be to capture the ‘514 Patent rights in the interference and then seek royalties from Biogen for the sales of Tecfidera.
But Forward is not the only company with an eye on the ‘514 Patent. Recently, Bass and his IPR crew (covered extensively in earlier editions of the Note) filed a petition seeking to invalidate the ‘514 Patent. In our view, this filing creates a serious risk for Forward’s investors, who now need to monitor both the interference and Bass’ IPR in the hopes of keeping the dreams of Tecfidera royalties alive. Its a complex situation, and definitely one to watch as it unfolds.
Recent Patent Litigation-Influenced Moves
Unwired Planet (UPIP)
Unwired Planet is heading to trial against Apple (AAPL). The company has been on a bit of a downward slide since announcing a $100M license/acquisition deal with Lenovo some time ago. Unsurprisingly, there have been some management changes, with the company recently announcing a new CEO, who comes aboard with patent licensing experience. The new chief happens to have been formerly employed at Apple — one of UPIP’s biggest licensing and litigation targets. Coincidentally, perhaps the company’s best chance for a turnaround is the upcoming trial between UPIP and Apple on 6/1 in California; but since nothing is easy for patent enforcement companies nowadays, the company will need to survive pending summary judgment motions first. Those decisions could come any day, and there is no doubt that UPIP needs some return from this case against Apple.
It is also interesting that UPIP’s new CEO has some experience at Apple — the potential impact on his involvement in settlement discussions remains to be seen. Ultimately, his brief will be a simple one — win some cases on the OpenWave patents and leverage the Ericsson portfolio for more Lenovo-ish mega deals.
Once one of the patent enforcement entities that captured the investing public’s imagination, VRNG has been facing fourth-and-long ever since the Federal Circuit invalidated as obvious the patents VRNG had used to obtain a patent infringement jury verdict against Google. Their final pass is now in the air, with David Boies as the quarterback, flinging the ball towards the Supreme Court in a last attempt to get back ahead of Google in their long-running patent battle. in their petition, VRNG makes two legal arguments in an attempt to beat the long odds and have the Supreme Court review the Federal Circuit’s decision: 1) that the Federal Circuit has blurred the line between the legal and actual underpinnings of an obviousness determination, and as such misapplied the standard of review by refusing to give the jury verdict of validity any deference, and 2) that even if the Supreme Court declines to “clean up” the question of proper review of obviousness factual findings, that it should remand VRNG’s case back to the Federal Circuit in light of the recent Teva decision that found that factual findings in patent cases (in that case related to claim construction) should be accorded some deference.
In short, VRNG is asking that the Supreme Court use this case to do for obviousness what it has already done for claim construction in Teva. As usual with Supreme Court questions, this one is complex, but investors will be watching any and all proceedings closely — particularly because if VRNG gets any traction before the Court, there should be renewed interest in the company’s prospects (and shares).
The Week(s) Ahead — Expected Events
- Acorda (ACOR) Response in IPR’s filed by Bass in early February
- UPIP Trial v. Apple Mentioned Above
- Marathon (MARA) upcoming Del. trial involving Schrader and Bridgestone – 6/1
And that’s it! Thanks for reading the eighth issue of the Markman Note, where we take a look at how the market reacts to patent litigation events, and try to anticipate what the next catalysts will be. Hopefully you have had a chance to catch our video “Markman Minutes” (available at www.mimesiswebtv.com/intellectual-property) on what we consider the biggest current patent stories of interest to investors. Finally, we want your feedback and suggestions, so feel free to send any along to firstname.lastname@example.org or to @markmanadvisors on Twitter. You can also visit our website at www.markmanadvisors.com. Questions from the readership are always welcome as well; we will try to get you answers in future issues of the Markman Note.
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 email@example.com. All suggestions are welcome.