Paper No. __
`Filed: April 29, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
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`AMNEAL PHARMACEUTICALS LLC and PAR PHARMACEUTICAL, INC.
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`Petitioners,
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`v.
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`JAZZ PHARMACEUTICALS, INC.
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`Patent Owner
`________________
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`Case IPR2015-00547
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`Patent 7,765,107
`________________
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`PATENT OWNER PRELIMINARY RESPONSE
`PURSUANT TO 35 U.S.C. § 313 and 37 C.F.R. § 42.107
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`TABLE OF CONTENTS
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`Page
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`I.
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`INTRODUCTION ........................................................................................... 1
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`II.
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`BACKGROUND ............................................................................................. 2
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`A.
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`The Challenge of Restricting Access To A Dangerous But
`Efficacious Drug .................................................................................... 4
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`B.
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`The ’107 Patent ..................................................................................... 6
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`III. ARGUMENT ................................................................................................... 8
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`A.
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`The Petition Should Be Denied For Failing To Name All Real
`Parties-In-Interest .................................................................................. 8
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`1.
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`2.
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`3.
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`4.
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`5.
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`6.
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`Legal Standard ............................................................................ 9
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`Par’s Corporate Structure .......................................................... 10
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`Par Inc.’s Parent Companies Control Par Inc.’s Business
`Operations ................................................................................. 12
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`Par Inc.’s Parent Companies Could Have Controlled This
`IPR And Therefore Are Real Parties In Interest ....................... 16
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`(a)
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`Par Holdings, Sky I, Sky II And Par Co. Have The
`Legal Right To Exercise Control Over This
`Proceeding ...................................................................... 16
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`(b) At Least Par Holdings And Par Co. Are Exercising
`Control Over This IPR .................................................... 18
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`The Petition’s Filing Date Should Be Vacated In
`Accordance With Prior Decisions ............................................. 20
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`Correction Of The Petition’s Filing Date Would Be
`Futile And The Petition Should Be Dismissed As
`Untimely .................................................................................... 21
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`B. Ground 1 Should Be Denied Because The ACA Is Not Prior Art ...... 22
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`1.
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`2.
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`Petitioners’ Wayback Machine Evidence Does Not
`Establish A Publication Date Prior To The ’107 Patent’s
`Priority Date .............................................................................. 24
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`Petitioners’ Other Arguments Do Not Establish Public
`Accessibility .............................................................................. 30
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`The Instant Petition Should Be Denied Under 35 U.S.C. §§
`314(a) And 325(d) Because It Is Redundant Of An Earlier Filed
`Petition ................................................................................................. 33
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`The Petition Should Be Denied Because Petitioners Have
`Failed To Show There Is A Reasonable Likelihood That Any
`Claim Of The ’107 Patent Is Obvious ................................................. 36
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`1.
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`Petitioners’ Obviousness Arguments Fail Because They
`Rely On A Declaration Entitled To Little Or No Weight ......... 36
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`C.
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`D.
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`(a) Dr. Valuck’s Opinions Are Unsupported, Verbatim
`Recitations Of Petitioners’ Conclusory Arguments ....... 36
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`(b) Dr. Valuck’s Claim Charts Are Improperly
`Incorporated By Reference Into The Petition ................. 37
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`2.
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`Ground 1: The ACA Materials Do Not Render Obvious
`The Claimed Inventions ............................................................ 38
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`(a)
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`(b)
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`“computerized method;” “exclusive central
`pharmacy;” and “central database” ................................ 39
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`“determining with the computer processor current
`and anticipated patterns of potential prescription
`abuse . . . from periodic reports generated only by
`the central database based on prescription request
`data . . . wherein said request data contain
`information identifying the patient, [GHB as] the
`drug prescribed, and credentials of the medical
`doctor” ............................................................................ 42
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`3.
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`Ground 2: TAS In View Of Honigfeld, Elsayed, And
`Lilly Do Not Render Obvious The Claimed Inventions ........... 43
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`(a)
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`Petitioners Have Not Provided A Motivation To
`Combine TAS, Honigfeld, Elsayed, And Lilly .............. 44
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`(b) The Cited References Fail To Disclose, Teach, Or
`Suggest Key Elements Of The Claimed Inventions ....... 46
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`i.
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`“central database” and “exclusive central
`pharmacy” ............................................................ 47
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`ii.
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`“analyz[ing] for potential abuse situations” ......... 48
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`(c)
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`Petitioners Have Failed To Provide Any Reason
`Or Motivation For Their Proposed Modifications
`To The Prior Art ............................................................. 49
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`4.
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`Long-Felt Need Supports The Nonobviousness Of The
`Claimed Inventions ................................................................... 49
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`IV. CONCLUSION .............................................................................................. 50
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`I.
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`INTRODUCTION
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`IPR2015-00547
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`Pursuant to 35 U.S.C. § 313 and 37 C.F.R. § 42.107(a), Patent Owner Jazz
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`Pharmaceuticals, Inc. (“Jazz”) submits this Preliminary Response to Amneal
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`Pharmaceuticals, LLC’s (“Amneal”) and Par Pharmaceutical, Inc.’s (“Par Inc.”)
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`(together, “Petitioners”) Petition for Inter Partes Review (the “Petition”) of U.S.
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`Patent No. 7,765,107 (the “’107 patent”).
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`Petitioners’ request for inter partes review (“IPR”) is both procedurally
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`defective and substantively meritless. Petitioners previously requested covered
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`business method (“CBM”) review of the ’107 patent and other patents in the same
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`family. Those CBM requests were denied and Petitioners filed the present petition
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`to take a second bite at the post-grant review apple. But Ground 1 is based on the
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`same art and arguments as the CBM requests, and Petitioners cannot deny that they
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`were fully aware of all art asserted in Ground 2 at the time they filed the CBM
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`petitions. The Board should exercise its discretion under 35 U.S.C. §§ 314(a) and
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`325(d) and deny the Petition for this reason alone.
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`The Petition should also be denied because the Petitioners have failed to
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`name all real parties in interest (“RPI”)—a threshold requirement for IPR.
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`Specifically omitted from the RPI identification are Par Inc.’s parent companies.
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`Each parent company exercises control over Par Inc.’s business operations in
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`general and could have (and do in fact) exercise control over this proceeding.
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`Indeed, Par’s corporate lines are so blurred that one is unable to determine where
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`one entity ends and another begins. Par Inc.’s parent companies are notably absent
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`from the required RPI identification. Having failed to name all RPI, the petition
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`must be dismissed because the filing date must be vacated and any correction of
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`the filing date would be futile; the Petition is time barred under 35 U.S.C. § 315(b).
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`The Petition should also be denied because it is substantively meritless. As
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`an initial matter, Ground 1 fails to justify review because Petitioners have failed to
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`show that the Advisory Committee (“ACA”) materials constitute prior art to the
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`’107 patent. Further, even if the ACA were prior art, all references asserted by
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`Petitioners in both Grounds 1 and 2 fail to disclose, teach, or suggest key elements
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`of the ’107 patent’s claims. Petitioners’ proposed modifications to the prior art are
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`entirely hindsight driven, and supported only by their declarant’s nearly verbatim
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`recitation of Petitioners’ conclusory arguments.
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`II. BACKGROUND
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`Petitioners are each defendants in Hatch-Waxman lawsuits involving the
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`’107 patent; each is seeking approval of an Abbreviated New Drug Application
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`(“ANDA”) to make a generic version of Xyrem® which is covered by the
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`’107 patent.
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`Xyrem is a unique drug product. It is the only FDA-approved treatment for
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`cataplexy and excessive daytime sleepiness, both debilitating symptoms of
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`narcolepsy. Its active ingredient, however, is a sodium salt of gamma-
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`hydroxybutyric acid (“GHB”), a substance which has been legislatively defined as
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`a “date rape” drug. As a result of Xyrem’s combination of benefits and risks, it is
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`one of the only prescription drugs to be subject to a bifurcated schedule by
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`Congress—in its approved form, Xyrem is a Schedule III drug, but all other forms
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`of GHB are placed on Schedule I (the most stringent DEA schedule, used for drugs
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`such as heroin).
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`Xyrem would never have been approved without an adequate method of
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`restricting access to the drug that the FDA considered capable of ensuring that the
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`benefit of Xyrem would outweigh the risks to patients and third parties. Finding a
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`way to restrict access yet make the drug available to patients was a challenge. The
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`inventors of the ’107 patent came up with an innovative solution to this challenge,
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`which is claimed in the ’107 patent and other related patents in the same family.
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`Had Jazz’s predecessor Orphan Medical, Inc. (hereinafter “Jazz”) not developed
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`the claimed methods for preventing the abuse, misuse, and diversion of GHB,
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`Xyrem would not be available to narcolepsy patients today.
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`A. The Challenge of Restricting Access
`To A Dangerous But Efficacious Drug
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`IPR2015-00547
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`The FDA first recognized the dangers of GHB in the early 1990s when it
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`banned all domestic sales and importation of GHB. (See Ex. 2001; Ex. 2002.)
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`Despite this ban, throughout the following years, the Drug Enforcement
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`Administration, Centers for Disease Control, National Institute on Drug Abuse,
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`Office of National Drug Control Policy, the Substance Abuse and Mental Health
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`Services Administration, and the National Drug Intelligence Center reported
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`increasing problems with GHB, specifically noting its use in committing drug-
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`facilitated sexual assaults. (See Ex. 2003; Ex. 2004 at 1-3; Ex. 2005; Ex. 2006 at
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`1-5, 8-9; Ex. 2007; Ex. 2008 at 1-5.)
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`At the same time that concern about GHB’s illicit use was mounting,
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`however, there was a recognition that GHB had promise as a potential treatment
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`for narcolepsy, an orphan condition—in other words, a debilitating but rare
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`disease. At the FDA’s request, Jazz began developing GHB as a treatment for
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`narcolepsy in the mid-1990s. When the DEA urged Congress to categorize GHB
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`as a Schedule I-controlled substance, meaning that it would not have any FDA-
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`recognized legitimate medical use, advocacy groups for patients with sleep
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`disorders and the FDA itself opposed this plan. (See Ex. 2009 at 67-71; Ex. 2010
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`at 97-103.)
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`In 2000, Congress resolved the matter in favor of the FDA’s
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`recommendation, declaring GHB to be “an imminent hazard to public safety,” but
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`recognizing its potential as a treatment for narcolepsy and cataplexy. (See
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`generally Ex. 2011.) Notably, this legislative compromise, designed to
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`accommodate the concerns of advocates for development of GHB as a treatment
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`for narcolepsy on the one hand, and the concern over misuse of GHB on the other,
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`was premised on assuring that GHB-containing therapeutic products could not be
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`diverted from legitimate channels. As the legislative history makes clear, Congress
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`intended that the availability of GHB would “be strictly controlled to ensure that
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`only patients in need of [the] drug would have access.” (See Ex. 2012 at 4.)
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`Jazz developed the methods claimed in the ’107 patent (described below) to
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`implement Congress’s initiative and to protect the public from abuse, misuse, and
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`diversion of a drug containing GHB, that would otherwise be banned. When the
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`FDA approved Xyrem for treatment of cataplexy in July 2002, the approval letter
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`stated that Xyrem was being approved under a special regulation,
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`21 CFR § 314.520 (“Subpart H”), which allowed the FDA to approve drugs that
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`were shown to be effective but that could only be used safely under restricted
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`conditions. (Ex. 2013 at 1.) Specifically, the approval letter stated that Xyrem was
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`being approved for use under the Risk Management Program developed by Jazz.
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`(Id.) When Xyrem was approved for treatment of excessive daytime sleepiness in
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`narcolepsy in 2005, the FDA again maintained essentially the same restrictions on
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`access to the drug. These core requirements, reflected in the Xyrem label and the
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`’107 patent’s claims, include various safety checks and controls that are applied to
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`ensure that there is no abuse, misuse, or diversion of GHB, and that only patients
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`to whom the drug is prescribed have access to the drug. (See generally AMN1001;
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`Ex. 2014.)
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`B.
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`The ’107 Patent
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`The ’107 patent describes and claims methods of preventing the abuse,
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`misuse, and diversion of a potentially dangerous prescription drug (particularly a
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`drug containing sodium GHB). The claims all require various controls that restrict
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`access to the drug in order to ensure safe methods of treatment. (See AMN1001 at
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`8:35-10:62; see also id. at Abstract, 1:44-58.) More specifically, the independent
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`claims of the ’107 patent claim methods of controlling abuse of a prescription drug
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`comprising:
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`•
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`•
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`(i) controlling, via an exclusive central pharmacy, the prescription
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`drug with a computer processor/central database that tracks and
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`processes all prescriptions of the prescription drug, and analyzes for
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`potential abuse situations;
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`(ii) determining with the computer processor current and anticipated
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`patterns of potential prescription abuse of the prescription drug from
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`periodic reports generated by the central database based on
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`information identifying the patient, prescriber and the prescription
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`drug; and
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`•
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`(iii) selecting with the computer processor multiple controls, from a
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`list of greater than 20 controls, for preventing abuse of the
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`prescription drug.
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`(See id. at Claims 1 and 4.)
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`The dependent claims further limit the multiple controls to prevent abuse,
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`misuse, and diversion. (See id. at Claims 2, 3, 5, and 6.)
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`No prior art disclosed, taught, or suggested using an central database,
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`controlled by an exclusive central pharmacy, to prevent the abuse, misuse, and
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`diversion of a potentially illicit drug such as GHB. Indeed, the ’107 patent issued
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`over several references cited by Petitioners, including: (a) an excerpt from the
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`Advisory Committee Transcript; (b) Talk about Sleep (“TAS”); (c) Elsayed; and
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`(d) Lilly. (See AMN1001 at “References Cited”; see also AMN1002 at 79-80).
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`And, in the Notice of Allowance, the Examiner correctly recognized:
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`[T]he closest prior art of record does not teach or fairly suggest
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`receiving in the computer processor all prescription requests, for any
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`and all patients being prescribed the prescription drug, only at the
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`exclusive central pharmacy, from any and all medical doctors allowed
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`to prescribe the prescription drug and processing with the computer
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`processor all prescriptions for the prescription drug only by the
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`exclusive central pharmacy using only the central database.
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`(AMN1002 at 79-80.)
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`Notably, the Examiner concluded that Lilly, among other references, were
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`the “closest prior art.” (Id.) Petitioners do not address why Lilly or any of the
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`other references thoroughly considered by the Examiner warrants reconsideration
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`by this Office now. As discussed below, the ’107 patent’s inventions are not
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`taught or suggested by the prior art.
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`III. ARGUMENT
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`A. The Petition Should Be Denied For Failing
`To Name All Real Parties-In-Interest
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`The Petition incorrectly identifies Amneal Pharmaceuticals, LLC
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`(“Amneal”) and Par Pharmaceutical, Inc. (“Par Inc.”) as the only real parties in
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`interest (“RPI”). (Pet. at 58). RPI that also should have been identified are
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`Par Inc.’s parent companies: Par Pharmaceutical Companies, Inc. (“Par Co.”),
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`Par Pharmaceutical Holdings, Inc. (“Par Holdings”),1 Sky Growth Intermediate
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`Holdings I Corporation (“Sky I”) and Sky Growth Intermediate Holdings II
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`Corporation (“Sky II”). Par Inc.’s parent companies exercise control over
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`1 Par Holdings was formed in 2012 as Sky Growth Holdings Corporation, but
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`changed its name to Par Holdings on March 4, 2015. (Ex. 2015 at 13.)
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`Par Inc.’s business, including control over this IPR proceeding. The failure to
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`identify Par Inc.’s parent companies as RPI is fatal to the Petition. The Petition’s
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`filing date should be vacated and the Petition dismissed as untimely.
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`1.
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`Legal Standard
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`A petition for IPR “may be considered only if … the petition identifies all
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`real parties in interest.” 35 U.S.C. § 312(a)(2); see also 37 C.F.R. § 42.8(b)(1).
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`The purpose of the RPI requirement is “to assist members of the Board in
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`identifying potential conflicts, and to assure proper application of the statutory
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`estoppel provisions.” 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). The estoppel
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`provisions, and RPI identification, help ensure that related companies do not
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`launch successive attacks on the same patent in an effort to harass the patent
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`owner. See id.
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`The question of whether an entity is an RPI is a “highly fact-dependent
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`question.” Id. (citing Taylor v. Sturgell, 553 U.S. 880 (2008)). “A common
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`consideration is whether the non-party exercised or could have exercised control
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`over a party’s participation in a proceeding.” Id. “Factors for determining actual
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`control or the opportunity to control” the IPR include: “existence of a financially
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`controlling interest in the petitioner[;] . . . the non-party’s relationship with the
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`petitioner; the non-party’s relationship with the petition itself, including the nature
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`and/or degree of involvement in the filing; and the nature of the entity filing the
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`petition.” Zoll Life Corp. v. Philips Elecs. N.A. Corp., IPR2013-00606, 2014 WL
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`1253105, at *5 (P.T.A.B. Mar. 20, 2014).
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`Evidence to establish a non-party is an RPI can be direct or circumstantial.
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`Id. at *6. When sufficient evidence is raised to “reasonably bring[] into question
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`the accuracy of a petitioner’s identification of real parties-in-interest,” the burden
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`is on Petitioner to establish it has complied with the statute. Zerto, Inc. v. EMC
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`Corp., IPR2014-01254, 2015 WL 981664, at *3 (P.T.A.B. Mar. 3, 2015).
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`2.
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`Par’s2 Corporate Structure
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`The named RPI Par, Inc. and its unnamed parent companies have a highly
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`unified corporate structure. Specifically, Par Inc.’s parent “[Par Co.] operates
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`primarily through its wholly owned subsidiary, [Par Inc.] . . . in two business
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`segments.” (Ex. 2016 at 8 (emphasis added).) The first segment is a generic
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`pharmaceutical division, Par Pharmaceutical. (Id.) The second segment is a
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`branded pharmaceutical division, Strativa. (Id.) These two segments are wholly-
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`owned subsidiaries of Par Inc.
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`On September 28, 2012, the above four Par companies each became a
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`wholly owned subsidiary of Par Holdings. (Id.; see also Ex. 2015 at 66.) That
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`2 “Par” or “Par entities” as used herein, refers collectively to Par, Inc. and its
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`parent companies.
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`merger also involved Par Holdings’ wholly owned subsidiaries—Sky I and Sky II.
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`(Ex. 2016 at 9; Ex. 2015 at 13.) Just like Par Co., Par Inc.’s parent Par Holdings
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`also operates through its wholly owned subsidiary, Par Inc. (Ex. 2015 at 51
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`(“[B]usiness operations are conducted primarily out of our indirect operating
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`subsidiary, Par Pharmaceutical, Inc. and its subsidiaries.”).)
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`As of the day Par Inc. filed the Petition, it had four parent companies; Par’s
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`complete corporate structure, both when it filed the Petition and today, is:
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`Par Holdings
`(formerly, Sky Holdings)
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`100%
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`100%
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`100%
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`100%
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`Sky I
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`Sky II
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`Par Co.
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`Par Inc.
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`100%
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`Par Specialty Pharmaceuticals
`(formerly Strativa)
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`100%
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`Par Pharmaceutical
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`(Ex. 2015 at 113; see also Ex. 2016 at 8.)
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`As set forth below, Par Inc. and its parent companies do not maintain well-
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`defined corporate boundaries. Instead, their businesses are so intertwined that it is
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`impossible to determine where one ends and another begins. Par Inc. and its parent
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`companies each have the ability to control the present IPR.
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`3.
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`Par Inc.’s Parent Companies Control
`Par Inc.’s Business Operations
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`The named RPI Par Inc. does not operate in an independent business area
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`controlled by independent decision makers. Instead, Par Inc. and its parent
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`companies: (1) hold themselves out as a single unit; (2) act as a single unit; and (3)
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`are controlled by a single master.
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`First, public financial documents from Par Co. and Par Holdings describe
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`how Par Inc. and its parent companies collectively operate as a single unit. For
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`example, Par Co.’s Form 10-Q does not differentiate between Par Co. and Par Inc.
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`in terms of its business operations or financial revenue. Instead, Par Co. refers to
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`itself and Par Inc. collectively as ‘the Company,’ ‘we,’ ‘our,’ or ‘us.’” (Ex. 2016
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`at 8 (emphasis added)), and discusses the two entities’ joint operation of, and
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`revenue derived from, their generic and branded pharmaceutical operating arms.
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`(See, e.g., id. (“Our generic product division, Par Pharmaceutical[,] develops …
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`manufactures and distributes generic pharmaceuticals in the United States. Our
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`branded products division, Strativa Pharmaceuticals (“Strativa”), acquires,
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`manufactures and distributes branded pharmaceuticals in the United States.”); see
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`also, e.g., id. at 38 (“We operate in two reportable business segments: generic
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`pharmaceuticals … and branded pharmaceuticals.”); id. at 39-40 (revenue Par Co.
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`and Par Inc. derived from their two business segments).)
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`Likewise, Par Holdings’ Form S-1 refers to “Par Pharmaceutical Holdings,
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`Inc. and its subsidiaries, including Par Pharmaceutical Companies, Inc.”
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`collectively as “‘we, ‘us,’ ‘our,’[or] ‘Company.’” (Ex. 2015 at 5.) Like Par Co.,
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`Par Holdings states, “We are a leading U.S. pharmaceutical company specializing
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`in developing, licensing, manufacturing, marketing and distributing generic drugs”
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`(id.), and repeatedly refers to “our branded products.” (See, e.g., id. at 22, 32.) It
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`also discusses how Par Holdings’ revenue is also generated from the same two
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`sources (Par Pharmaceutical and Strativa3) as Par Inc. and Par Co. (See, e.g., id. at
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`255.) In sum, Par Inc. and its parent companies hold themselves out as one single
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`entity in terms of their business activities.
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`Second, the evidence demonstrates that Par Inc. and its parent companies act
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`as one single entity. Par Inc. and its parent companies take actions collectively.
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`For example, acquisitions undertaken by Par Holdings were also undertaken by Par
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`Co. and Par Inc. (Compare, e.g., Ex. 2015 at 207, 209 (Par Holdings explaining
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`that “the company completed its acquisition of JHP Group Holdings” and that
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`3 Strativa is now known as Par Specialty.
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`“through Par Pharmaceutical, Inc., our wholly-owned subsidiary, we completed
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`our acquisition of privately-held Edict Pharmaceuticals. . . .”) with Ex. 2016 at 9,
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`12 (Par Co. explaining the same).) Likewise, loan agreements for Par Holdings
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`were also entered into by Par Co., Par Inc. and Sky II. (See, e.g., Ex. 2015 at 224
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`(“[T]he Company, Par Pharmaceutical, Inc., as co-borrower, [Sky II], the
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`subsidiary guarantor party thereto . . . enter[ed] into Amendment 1 . . . to the Credit
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`Agreement.”).)
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`Further, Par Inc. and its parent companies operate from a single website
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`(www.parpharma.com). This website does not differentiate Par Inc. from any of
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`its parent companies—only the two subsidiary business segments through which
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`Par Inc. and its parent companies operate (which are irrelevant to this RPI
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`determination) are differentiated. For example, the website’s careers’ page lists
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`jobs without distinguishing between Par Inc. and any of its parent companies.
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`(See Ex. 2017; Ex. 2018.) And the website markets all products from the single
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`homepage bearing the trademark of Par Co. (See Ex. 2019.) Indeed, Par
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`Holdings’ self-described position as a “leading U.S. pharmaceutical company”
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`(Ex. 2015 at 5), can only be accomplished by controlling Par Inc.; Par Holdings
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`admits: “We are a holding company, and as such have no independent operations
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`or material assets other than our ownership of equity interest in our subsidiaries.”
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`(Ex. 2015 at 45.) In sum, Par Inc. and its parent companies act as one in every
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`aspect of their business operations.
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`Third, Par Inc. and its parent companies are all controlled by a single master.
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`Specifically, Par Inc. and its parent companies share the same corporate officers
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`who control the decision making for all of the Par companies as a whole. (See Ex.
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`2020 (identifying Par Co. officers: Paul V. Campanelli (CEO), Thomas J.
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`Haughey (G.C. and CAO); and Michael A. Tropiano (Executive V.P. and CFO));
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`Ex. 2015 at 133 (identifying Par Holdings officers: Paul V. Campanelli (CEO),
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`Thomas J. Haughey (G.C. and CAO); and Michael A. Tropiano (Executive V.P.
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`and CFO)); id. at 143, 154-55 (Par Holdings stating that the employment
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`agreements with its officers were negotiated and entered into by both Par Holdings
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`and Par Inc.); Ex. 2021 at 28 (Form 8-K reporting Loan Agreement signed by
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`Michael A. Tropiano as Executive V.P. and CFO of Sky II, Par Co. and Par Inc.).)
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`Par Holdings and Par Inc. also share the same principal place of business: One
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`Ram Ridge Road, Spring Valley, Chestnut Ridge, New York 10977. (See Ex.
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`2015 at 13; Paper 3, Par Power of Attorney at 24.) Par Inc. and its parent
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`4 The Power of Attorney lists Par Inc.’s principal place of business as “One Ram
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`Ridge Road, Spring Valley, New York, 10977.” Despite the different town names,
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`the addresses are the same. Spring Valley is a village within Chestnut Ridge.
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`companies are controlled by a single set of decision makers and, thus, the unity of
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`the entities and their joint actions are not surprising.
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`The facts establish that Par Inc. and its parent companies blur the lines of
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`corporate separation, such that the entities operate as a single unit. Each has the
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`ability to control (and does control) this IPR.
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`4.
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`Par Inc.’s Parent Companies Could Have Controlled This
`IPR And Therefore Are Real Parties In Interest
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`The Board has consistently determined whether a non-party to the IPR is an
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`RPI by analyzing whether that non-party “could have exercised control over a
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`party’s participation in a proceeding.” 77 Fed. Reg. at 48,759; see also, e.g., Zerto,
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`2015 WL 981664, at *4; Zoll, 2014 WL 1253105, at *5. Here, Par Inc.’s parent
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`companies could have and do exercise control over this IPR. First, as parents to its
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`wholly owned subsidiary, Par Holdings, Sky I, Sky II and Par Co. have the legal
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`right to exercise control over this proceeding. Second, documentary evidence
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`proves that at least Par Holdings and Par Co. are exercising control over this IPR.
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`(a) Par Holdings, Sky I, Sky II And Par Co.
`Have The Legal Right To Exercise
`Control Over This Proceeding
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`The legal right of a parent company to control its wholly owned subsidiary
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`flows from the parties’ relationship and common interests. The Supreme Court has
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`explained:
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`A parent and its wholly owned subsidiary have a complete unity of
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`interest. Their objectives are common, not disparate; their general
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`corporate actions are guided or determined not by two separate
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`corporate consciousnesses, but one . . . They share a common purpose
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`whether or not the parent keeps a tight rein over the subsidiary; the
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`parent may assert full control at any moment if the subsidiary fails to
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`act in the parent’s best interests.
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`Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771-72 (1984).
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`The Federal Circuit has also recognized the legal right of a parent company
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`to control administrative proceedings on the behalf of its subsidiaries:
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`A parent company has standing to file an opposition on behalf of its
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`wholly-owned subsidiary because it can reasonably believe that
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`damage to the subsidiary will naturally lead to financial injury to
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`itself.
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`Dalton v. Honda Motor Co., 425 Fed. App’x 886, 890 (Fed. Cir. 2011) (internal
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`quotes omitted); see also Universal Oil Prods. Co. v. Rexall Drug & Chem. Co.,
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`463 F.2d 1122, 1124 (C.C.P.A. 1972) (holding that a parent company has a “real
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`interest” in a TTAB proceeding, and thus “standing to institute and maintain it”).
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`The Petition seeks to cancel the claims of the ’107 patent so that Par can
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`make a generic version of Xyrem. See supra at p. 2. A loss here would mean
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`financial injury to not only Par Inc., but also its parent companies. Likewise, a
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`favorable outcome would directly benefit both Par Inc. and its parent companies.
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`Par’s generic division (which would include its generic version of Xyrem)
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`accounted for 95% of Par’s net product revenue in 2014. (See Ex. 2015 at 70-71
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`(Par Holdings noting the generic and branded net product revenues were
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`$1.24 billion and $67.5 million, respectively); Ex. 2016 at 39 (Par Co. showing