7/30/2015
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`What They Are Saying: Close Patent Loopholes That Threaten Innovation for Patients
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`The Catalyst
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`What They Are Saying: Close Patent Loopholes
`That Threaten Innovation for Patients
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`Posted by Robert Zirkelbach on April 29, 2015 at 5:14 PM
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`“When we developed these proceedings, we never thought people would use them this way”
`- Former general counsel of the PTO
`
`New administrative proceedings at the Patent and Trademark Office (PTO) are posing significant threats
`to patent-holders. Previous patent legislation created a new process, called Patent Trial and Appeal Board
`(PTAB) proceedings, or post-grant proceedings, to make it easier for people to challenge patents at the
`PTO rather than in court. The pro-challenger bias exhibited through these proceedings have led to three
`times the number of filings the PTO originally expected and has come to be known as a “death squad” for
`legitimate patents and patent holders.  In fact, some financial investors and hedge fund managers have
`begun shorting the stocks of biopharmaceutical companies and then using the PTAB process to challenge
`those companies’ patents for the sole purpose of profiting off of the resulting change in price. 
`
`Any patent litigation reform legislation must stop these
`abusive practices. Failing to protect patent rights would
`make it increasingly difficult to sustain continued
`investment in research and development for the
`biopharmaceutical industry and other IP-intensive
`sectors, which would impact our ability to develop new
`medicines that treat some of the most devastating
`diseases.
`
`http://catalyst.phrma.org/what­they­are­saying­close­patent­loopholes­that­threaten­innovation­for­patients
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`Search...
`
`Exhibit 2024 Page 001
`
`Pharmacyclics LLC - Ex. 2024
`Coalition for Affordable Drugs IV LLC v. Pharmacyclics LLC
`Case IPR2015-01076
`
`

`

`7/30/2015
`What They Are Saying: Close Patent Loopholes That Threaten Innovation for Patients
`Many stakeholders agree that reform is needed to ensure that medical innovation continues. Here’s what
`they are saying:
`
`“Taking advantage of new rules created by Congress three years ago, hedge funds have increasingly been
`filing challenges to pharmaceutical patents. Some may be angling for payouts to drop their claims, while
`others are shorting the stock, betting that the manufacturers’ shares will plummet… The legislation had
`an unexpected consequence: Hedge funds, which didn’t have the right to challenge patents in court, now
`had a venue to bring such cases.” – Susan Decker and Caroline Chen of Bloomberg, March 20, 2015.
`
`“When we developed these proceedings, we never thought people would use them this way, in an effort to
`move stock or as an investment vehicle.” - Bernard Knight, former general counsel for PTO in Bloomberg,
`March 20, 2015.
`
`“Despite the fact that the statute on its face seems to allow any petitioner to file an IPR, it still feels wrong
`to many in the industry that a wealthy businessman should be able to reap financial rewards for a situation
`he creates…Given the universal agreement that the purpose for creating new post grant challenges was
`to create a low-cost alternative to litigation to determine the validity of patent claims it is difficult to
`understand why the Bass challenge should be allowed to move forward.” – Gene Quinn of IPWatchDog,
`April 8, 2015.
`
`“Bass doesn’t talk about it (I got only an e-mailed copy of his company’s statement on the subject) but
`stock analysts who follow the drug industry believe Hayman Capital attempts to drive the company’s
`stock price down with the patent challenge and profit on that decline. Multiple news accounts report that
`Bass’s strategy is to short a drug company’s stock — betting it will lose value in the future — and then file a
`patent challenge for the world to see.” – Steve Syre of The Boston Globe, April 28, 2015
`
`“In less than three months, Bass’s Coalition for Affordable Drugs has filed petitions to invalidate patents
`on six different drugs, including two on Thursday, owned by Shire Plc and Celgene Corp. His tactics are
`largely made possible by a change in U.S. law that, beginning in 2012, created new procedures to challenge
`patents, including by third parties.” – Susan Decker and Kelly Bit of Bloomberg Business, April 23, 2015.
`
`“Hedge fund managers aren’t in the business of helping suffering Americans, unless there’s good money in
`it.” – Steve Syre of The Boston Globe, April 28, 2015
`
`“In a story that ran after Bass' challenge to a Jazz Pharmaceuticals' ($JAZZ) Xyrem patent, the news
`service cited anonymous sources close to Bass' firm saying that Hayman Capital is betting for and against
`shares of companies involved in the patent challenges.” – Tracy Staton of FiercePharma, April 21, 2015.
`
`“A well-known hedge-fund manager is taking a novel approach to making money: filing and publicizing
`patent challenges against pharmaceutical companies while also betting against their shares…Mr. Bass’s
`strategy taps an administrative process known as Inter Partes Review, or IPR, that allows petitions to
`strike down patents to be heard by a patent office panel. The process was created by Congress in 2011 to
`help companies fight so-called patent trolls, nonoperating companies that extract cash settlements from
`companies they accuse of patent infringement. The panel is a cheaper and faster option than trials in
`federal courts.” – Joseph Walker and Rob Copeland of The Wall Street Journal, April 7, 2015.
`
`“We are going to challenge and invalidate patents through the IPR process ... [and] we are not going to
`settle.” – Kyle Bass of Hayman Capital Management in Financial Times, January 7, 2015.
`
`Topics: Patents, IP, Boston Globe, Wall Street Journal, Bloomberg
`
`http://catalyst.phrma.org/what­they­are­saying­close­patent­loopholes­that­threaten­innovation­for­patients
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`Exhibit 2024 Page 002
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`

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`7/30/2015
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`What They Are Saying: Close Patent Loopholes That Threaten Innovation for Patients
`
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`Exhibit 2024 Page 003
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`7/30/2015
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`What They Are Saying: Close Patent Loopholes That Threaten Innovation for Patients
`
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`What They Are Saying: Close Patent Loopholes That Threaten Innovation for Patients
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