UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`COALITION FOR AFFORDABLE DRUGS II LLC
`Petitioner
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`v.
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`NPS PHARMACEUTICALS, INC.
`Patent Owner
`____________
`
`Case IPR2015-01093
`Patent 7,056,886
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`
`____________
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`PATENT OWNER’S COMBINED MOTION TO SEAL AND MOTION FOR
`ENTRY OF PROTECTIVE ORDER
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`27867644v1
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`COALITION FOR AFFORDABLE DRUGS II LLC
`Petitioner
`
`v.
`
`NPS PHARMACEUTICALS, INC.
`Patent Owner
`____________
`
`Case IPR2015-01093
`Patent 7,056,886
`
`
`____________
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`PATENT OWNER’S COMBINED MOTION TO SEAL AND MOTION FOR
`ENTRY OF PROTECTIVE ORDER
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`IPR2015-01093
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`Pursuant to 37 C.F.R. § 42.54, Patent Owner NPS Pharmaceuticals, Inc.
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`(“NPS”) moves to file certain Exhibits filed with its Patent Owner’s Response
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`under seal. As detailed below, these Exhibits contain highly confidential and
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`extremely sensitive information related to financial matters pertaining to Patent
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`Owner’s core business. Further, as set forth below, Patent Owner also requests
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`entry of the Protective Order filed with this Motion as Ex. 2050.
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`Counsel for Patent Owner contacted Counsel for Petitioner and requested
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`Petitioner’s consent to file certain Exhibits under seal and for consent to enter a
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`modified Protective Order. The parties have been unable to reach an agreement
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`with respect to the modified Protective Order, and Patent Owner understands that
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`Petitioner opposes this motion. Specifically, Petitioner seems to object to the two-
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`tiered format of the Modified Protective Order proposed by Patent Owner that
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`includes an “Attorneys’ Eyes Only” provision. However, due to the granular and
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`highly confidential nature of the Attorneys’ Eyes Only information contained in
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`the relevant Exhibits, Patent Owner requests that that the attached Modified
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`Protective Order, which differs from the Model Protective Order only in that it
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`contains a second tier of confidentiality be entered so that the two identified
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`exhibits may be designated “Attorneys’ Eyes Only.” Further, Patent Owner seeks
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`to have two Confidential (but not Attorneys’ Eyes Only) exhibits sealed from
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`public view under paragraph 2 of the Modified Protective Order, which mirrors the
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`provisions for Confidential material in the Default Protective Order.
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`I.
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`GOOD CAUSE EXISTS FOR SEALING CONFIDENTIAL
`INFORMATION
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`The Office Patent Trial Practice Guide provides that “the rules aim to strike
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`a balance between the public’s interest in maintaining a complete and
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`understandable file history and the parties’ interest in protecting truly sensitive
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`information.” 77 Fed. Reg. 48756, 48760 (Aug. 14, 2012). Further, those rules
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`“identify confidential information in a manner consistent with Federal Rule of
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`Civil Procedure 26(c)(1)(G), which provides for protective orders for trade secret
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`or other confidential research, development, or commercial information.” Id.
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`(citing 37 C.F.R. § 42.54).
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`As summarized in Table 1 below and detailed below, Patent Owner is
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`submitting two categories of information to support arguments presented in Patent
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`Owner’s Response. The first category of Confidential information includes two
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`expert declarations that summarize sensitive competitive information relating to
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`R&D and testing and marketing research, all of which that falls under paragraph
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`2 of the Modified Protective Order.1 Patent Owner does not believe there is any
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`1 As noted, this information would also be considered confidential information
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`under the Default Protective Order.
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`dispute that this “Category 1” information would be considered Confidential even
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`under the Default Protective Order, and thus should be sealed under the
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`“standard” confidentiality provisions. Based on the arguments presented in the
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`Patent Owner Response, Patent Owner believes that the Board will need to rely
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`only on this summary information in making its determinations. Similarly, Patent
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`Owner believes that the Petitioner will need to rely only on this summary
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`information in formulating its arguments in response to the Patent Owner
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`Response.
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`The second category of information the Highly Confidential – Attorneys’
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`Eyes Only – R&D and testing and marketing research at a competitively
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`significant level. There are only two documents that would qualify as “Category 2”
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`information, each identified in the chart below. This information serves as the
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`underlying foundation for the declarations provided as “Category 1” material.
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`Patent Owner presents this level of detail only to provide the Board and Petitioner
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`with its basis for the arguments and conclusions presented in the expert
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`declarations associated with the Patent Owner Response.
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`The disclosure of this information, however, would significantly harm Patent
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`Owner’s competitive position as it would allow a hedge fund entity, or at least an
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`entity owned and controlled by Hedge Funds (see generally Pet., 3-5; Paper 9), to
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`have direct access to some of the most sensitive R&D and marketing information
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`there is. Patent Owner also submits that it is necessary to designate preclude
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`Petitioner’s in-house counsel from accessing certain information because it is
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`believed that they are substantively involved in the decision-making of Petitioner
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`(and other RPI’s to this proceeding). Allowing Petitioner access to Patent Owner’s
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`this highly sensitive information in this proceeding would be both unnecessary and
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`dangerous.
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`The public interest will not be harmed by the entry of this attached Modified
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`Protective Order, filing of the Category 1 exhibits under seal as Confidential
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`information, or filing the Category 2 exhibits under seal as Attorney’s Eyes Only.
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`In particular, there should be no reason for the Board to rely on Category 2
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`material in any decision regarding patentability. Thus, the Category 2 materials
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`should not be implicated. Further, to the extent that any sealed Confidential
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`materials are relied on by the Board in any decision regarding patentability, they
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`may ultimately become part of the public record regardless of the outcome of the
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`instant motion.
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`As mentioned above, Petitioner’s ability to raise its claims or defenses will
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`not be impacted by filing the identified exhibits under seal. In particular, Petitioner
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`(both in-house and outside counsel) will have access to the core information that
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`supports Petitioner’s Patent Owner Response. Additionally, to the extent
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`Petitioner’s outside counsel needs access to the underlying Attorneys’ Eyes Only
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`information in order to explore the basis for the high-level summary financial
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`information, such access will still be available even under the Modified Protective
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`Order. There is simply no reason why Petitioner’s in-house counsel needs access to
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`the two particular documents that include such competitively sensitive information.
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`TABLE 1 – Proposed Sealed Papers and Exhibits
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`CATEGORY 1 MATERIALS
`To be Sealed as “Confidential” under Paragraph 2 of the Modified Protective Order
`Paper/Exhibit
`Summary of Contents
`Good Cause for Sealing Exhibit
`No.
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`Contains Confidential Development
`Information—This document
`contains non-public information
`relating to development and testing of
`Gattex®.
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`Redactions at ¶ 73 (chart)
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`Contains Confidential Development
`and Financial information—This
`document contains non-public
`information relating to development,
`testing, and summary financial
`information.
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`Redactions at ¶¶ 19, 21, 22, 25, 36,
`and 47 and Figures 1, 2, and 3
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`Exhibit No. 2151 Declaration of John F.
`Carpenter, Ph.D.
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`Exhibit No. 2041 Declaration of Donald
`Rausser, Ph.D.
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`CATEGORY 2 MATERIALS
`To be Sealed as “Attorney’s Eyes Only” under Paragraph 3 of the Modified
`Protective Order
`Summary of Contents
`Good Cause for Sealing Exhibit
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`Paper/Exhibit
`No.
`Exhibit No. 2056 Process Validation
`and/or Evaluation
`for Gattex
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`Exhibit No. 2075
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`Gattex Physician
`Report
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`
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`Contains Highly Confidential R&D
`and Testing Information—This
`document contains non-public
`information relating to the development
`and testing of Gattex.
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`Contains Highly Confidential
`Financial Information—This
`document contains
`specific non-public Highly
`Confidential marketing information
`relating to corporate strategy for
`Gattex. Summaries of the relevant
`financial information contained in
`this Exhibit are provided in Ex.
`2041as Category 1 information.
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`In Ex. 2151 and Ex. 2041 (expert declarations) identified above, Patent
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`Owner has redacted only the specific information that it considers Confidential
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`(Category 1) information, leaving the large majority of its analysis unredacted and
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`available to the public. Accordingly, employees such as in-house counsel for
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`Petitioner will have access to the summary information, arguments and expert
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`analysis presented by Patent Owner. The two documents that serve as the
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`underlying information for the Category 1 summaries are provided as Attorneys
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`Eyes Only material. As noted above, this information is the factual foundation for
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`the Category 1 summary information. Petitioner’s Outside Counsel will have
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`access to this information to verify the summaries and will be afforded a full
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`opportunity to present Petitioner’s full defense.
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`The Board has agreed to enter a protective order virtually identical to the one
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`proposed here on at least two occasions. For example, in Greene’s Energy Group,
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`LLC, Inc. v. Oil States Energy Services, LLC, the patent owner sought entry of a
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`protective order that added a provision for “Attorney’s Eyes Only” just as the
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`proposed protective order here and to protect substantially similar information to
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`that asked to be protected here. IPR2014-00216, Paper 27. The Board agreed to
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`that protective order and the patent owner’s designations under the protective order
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`because: (1) “the information in question was relied upon by Patent Owner only to
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`the extent it provides the factual basis for some of the conclusions reached by [an
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`expert];” (2) “[u]nder the proposed protective order, Petitioner would be able to
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`conduct cross-examination of [the expert] with outside counsel;” and (3) the
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`petitioner “would be able to retain an expert who would also have access to the
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`information in [the exhibits marked “Attorney’s Eyes Only”].” Id. at 6-7; see also
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`Athena Automation Ltd. v. Husky Injection Molding Systems Ltd., IPR2013-00167,
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`Paper 32, 3-4 (approving entry of a disputed modified Protective Order which
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`created an Attorneys’ Eyes Only category for “competitively sensitive confidential
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`information”). These same reasons apply to this proceeding.
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`Additionally, Patent Owner could suffer great prejudice if the modified
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`Protective Order is not entered. The Highly Confidential – Attorneys’ Eyes Only –
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`materials submitted will only be relevant if a cascading series of events unfolds.
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`That is, only if the claims of the ’886 Patent are found unpatentable over the prior
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`art, and then only if the secondary considerations of non-obviousness are evaluated
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`and then only if the financial information (e.g., related to commercial success) is
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`deemed material to the determination, and then only if the underlying granular
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`information in Ex. 2056 and Ex. 2075 is somehow also deemed relevant, would the
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`Attorneys’ Eyes Only documents potentially become relevant. Without entry of the
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`modified Protective Order and sealing of the materials, there is a high probability
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`that Patent Owner’s highly confidential financial information will have been
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`disclosed to in-house counsel of an entity that has already shown its desire and
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`ability to financially affect Patent Owner – when that level of detailed information
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`was not even considered in the final decision. See, e.g., Paper 22, 1-3 (Petitioner
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`and RPI’s are using the IPR process to manipulate stock price.).
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`While Patent Owner understands and accepts that its confidential Category 1
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`financial information may become public if it is relied upon by the Board in its
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`final decision, the conditions of it becoming public are narrow and contingent. And
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`this contingency should not apply to the Category 2 Highly Confidential –
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`Attorneys’ Eyes Only – material that serves only as the foundational support for
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`the summary information relied on by Patent Owner. While these conditions are
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`possible, the prejudice to Patent Owner for the disclosure of its confidential
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`financial information to a competitor absent these conditions would be high.
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`Because counsel for Petitioner can present a complete and full defense even
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`if Patent Owner’s highly sensitive confidential financial information is deemed
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`“Attorneys’ Eyes Only,” and because the confidential financial information may
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`only end up being contingently relied upon by the Board, good cause exits for
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`entry of the Modified Protective Order. Entry of its Modified Protective Order
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`would help achieve “a balance between the public’s interest in maintaining a
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`complete and understandable file history and the parties’ interest in protecting truly
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`sensitive information.”
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`II. CERTIFICATION OF NON-PUBLICATION
`On behalf of Patent Owner, undersigned counsel certifies the information
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`identified in the exhibits and sought to be sealed has not, to their knowledge, been
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`published or otherwise made public.
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`III. CERTIFICATION OF CONFERENCE WITH OPPOSING PARTY
`PURSUANT TO 37 C.F.R. § 42.54
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`Patent Owner has in good faith conferred with Petitioner but has been unable
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`to reach an agreement with Petitioner regarding the modified Protective Order.
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`Petitioner does not agree with the scope and content of the Protective Order and
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`has represented that it opposes this motion for a Protective Order.
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`IV. PROPOSED PROTECTIVE ORDER
`Pursuant to the Board’s authorization, Patent Owner respectfully requests
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`entry of the attached Protective Order in place of the Default Protective Order. A
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`clean copy of Patent Owner’s proposed protective order is attached as Exhibit
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`2050.
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`Patent Owner’s proposed Modified Protective Order is substantially similar
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`to the Default Protective Order. In particular, there are only two substantive
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`changes from the Default Protective Order. First, paragraph two has been amended
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`to specify that confidential information is to be marked “PROTECTIVE ORDER
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`MATERIAL.” Good cause exists for this amendment because it provides necessary
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`clarity regarding who may receive confidential material as a part of this
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`proceeding.
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`Second, paragraph three has been added to allow for certain highly sensitive
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`confidential information to be marked “PROTECTIVE ORDER MATERIAL –
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`ATTORNEYS’ EYES ONLY.” Information with this designation may only be
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`disclosed to outside counsel, retained experts, the Office and Support Personnel.
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`Good cause exists for this amendment because it will allow for extremely sensitive
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`confidential information to be submitted to the Board without harming either a
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`party’s competitive position or the ability for any party to raise a claim or defense.
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`Upon entry of the Protective Order, Patent Owner designates Ex. 2151, and
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`2041 “PROTECTIVE ORDER MATERIAL.” Upon entry of the Protective Order,
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`Patent Owner designates Ex. 2056 and Ex. 2075 “PROTECTIVE ORDER
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`MATERIAL – ATTORNEYS’ EYES ONLY.”
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`V. CONCLUSION
`Accordingly, Patent Owner requests that the Protective Order attached as
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`Ex. 2050 be entered in this case and the Category 1 Materials identified above be
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`sealed pursuant to paragraph 2 of the Protective Order and the Category 2
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`Materials identified above be sealed as Attorneys’ Eyes Only.
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`Dated: January 20, 2016
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`Respectfully submitted,
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`/Joseph R. Robinson/
`Joseph R. Robinson, PTO Reg. No. 33,448
`Heather M. Ettinger, PTO Reg. No. 51,658
`Dustin B. Weeks, PTO Reg. No. 67,466
`Attorneys for Patent Owner
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing Patent
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`Owner’s Response, Patent Owner’s Combined Motion to Seal and Motion for
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`Entry of Protective Order, and associated exhibits were served via electronic mail
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`on January 20, 2015 on attorney for Petitioner:
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`Jeffrey D. Blake, Esq.
`jblake@merchantgould.com
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`Respectfully submitted,
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`/Dustin B. Weeks/
`Dustin B. Weeks, PTO Reg. No. 67,466
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`Dated: January 20, 2015
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`27867644v1
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