Filed: June 15, 2015
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`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.
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`Petitioner
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`v.
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`NPS PHARMACEUTICALS, INC.
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`Patent Owner
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`____________
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`Cases IPR2015-00990 and IPR2015-010931
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`Patent 7,056,886
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`____________
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`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
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`1 Per the Board’s Order authorizing NPS’s motion (see, e.g., IPR2015-00990,
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`Paper 8, fn 1), the word-for-word identical paper is filed in each proceeding
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`identified in the heading.
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`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`COALITION FOR AFFORDABLE DRUGS II LLC.
`
`Petitioner
`
`v.
`
`NPS PHARMACEUTICALS, INC.
`
`Patent Owner
`
`____________
`
`Cases IPR2015-00990 and IPR2015-010931
`
`Patent 7,056,886
`
`____________
`
`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
`
`
`1 Per the Board’s Order authorizing NPS’s motion (see, e.g., IPR2015-00990,
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`Paper 8, fn 1), the word-for-word identical paper is filed in each proceeding
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`identified in the heading.
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`
`
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`IPR2015-00990 and IPR2015-01093
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`NPS replies to Petitioner’s opposition to NPS’s request for discovery.
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`I. NPS’s Evidence is not Merely Speculative
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`Petitioner incorrectly argues that that NPS did not meet
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`Garmin factor 1
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`(i.e., evidence beyond speculation that something favorable to NPS’s RPI
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`contention will be uncovered). Even though this Board has held that “[t]he
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`discovery-seeking party only needs to set forth a threshold amount of evidence
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`tending to show that the discovery it seeks factually supports its contention,”
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`(Wavemarket Inc. v. Locationet Systems Ltd ., IPR2104-00199, Paper 34, 4 (Aug.
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`11, 2014)), Petitioner wants conclusive evidence and ignores NPS’s evidence.
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`First, Petitioner argues that: “Patent Owner provides no evidence that any
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`‘Unnamed Funders’ have any relationship with
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`this proceeding ,” and only
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`speculative generalities (Paper 11, 8 (original emphasis)); “Patent Owner has not
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`shown that it has any information that ties any unnamed entity or person to control
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`of this proceeding” which Petitioner paradoxically says is essential now because,
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`after discovery, it will be “important to determine whether a non-party exercises,
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`or could have exercised, control over a party’s participation in the proceeding” ( id.
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`at 5); and that “Patent Owner’s requests for production (Ex. 2001) request
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`documents regarding the relationships between the parties, not any relationship to
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`this proceeding” ( id. at 6). 2 However, NPS followed the actual, not speculative,
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`2 Petitioner’s reliance on Wavemarket is misplaced. Paper 11, 5. The Board refused
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`1
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`
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`IPR2015-00990 and IPR2015-01093
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`money/control trail which shows that Unnamed RPIs are funding or controlling the
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`Petition and one another through closely held hedge funds – a clear relationship
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`with this proceeding. See Paper 9, 5-8; Ex. 2005 “Complete control or funding of
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`the proceeding is not required for a party to be considered an RPI; the exact degree
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`of control or funding that suffices ‘requires consideration of the pertinent facts.’”
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`Azure Gaming Macau, Ltd. v. MGT Gaming, Inc.
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`, IPR2014-01288, Paper 13, 11
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`(Feb. 20, 2015) (quoting 77 Fed. Reg. at 48-9). NPS has shown that the Named and
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`Unnamed RPIs have a common offices and interrelated ownership/management.
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`See Paper 9, 5-9. For example, HCMF, Credes Onshore, Credes Offshore, HCP,
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`discovery there because the only evidence was common counsel, indemnification
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`obligations, and joint defense/common interest agreements. Here, NPS has shown
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`that Unnamed RPIs of are funding, directing, and controlling this proceeding. The
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`Wavefront Board also denied discovery as overly broad and burdensome because,
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`unlike here, it was too late (
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`i.e., 3 months after review was instituted).
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`Wavemarket, IPR2014-00199, Paper 34, 8. Similarly, Unified and TRW are not
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`pertinent. Paper 11, 3-4. The Unified requests were to establish that Petitioner’s
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`only activity was bringing IPRs (which was irrelevant there) and to determine how
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`the Petitioner spent its money, not from where it came. Here, NPS is seeking
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`discovery of the sources of funding and control. The issue in
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`TRW was not
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`discovery; it was whether failure to name RPIs was ultimately proven.
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`2
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`IPR2015-00990 and IPR2015-01093
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`HCOP, HOF, HOM, HCM, HD, JMOMF share the same office. Although Bass
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`and Spangenberg are Named RPIs, others with similar positions in Named and
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`Unnamed RPIs are not. For example, Bass, with Unnamed RPIs Keyes,
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`Kirkpatrick, Morgan, and Sung, direct Named RPIs HCM, HCMF, and HOM and
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`Unnamed RPI HCOP, and Bass, with Unnamed RPIs Lamoy, Knowlton,
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`Kirkpatrick, Lee, Flat Calm Revocable Trust, the Bass Descendants Trusts, and
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`Named RPI HI own or run Named RPI HCM. Additionally, NPS Spangenberg, an
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`nXnP principal and IPNav founder has been instrumental, at least, in soliciting
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`funds from Unnamed RPIs.
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`Next, Petitioner complains that NPS says “mere financial contribution to a
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`business” justifies discovery. Paper 11, 10. NPS does not suggest a per se rule that
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`investors/management must always be RPIs (
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`see id. at 8-11) or that corporate
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`distinctions should be disregarded (s ee id. at 7). Here, Named and Unnamed RPIs
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`are related businesses with nearly identical management and identical
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`headquarters. See Paper 9, 5-9. It has been publicly admitted that Credes, the
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`Coalition, and HCMF together execute/support a short activist strategy through
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`IPRs. Id. at 4. These facts show beyond speculation that the officers and beneficial
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`owners (including funding and controlling limited partners and investors) of
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`Named RPIs are also RPIs.
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`Petitioner also argues that “Patent Owner’s allegations imply that corporate
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`3
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`IPR2015-00990 and IPR2015-01093
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`distinctions should be disregarded.” Paper 11, 7-8. However, hedge funds, unlike
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`other businesses, are created for precisely targeted purposes, investors’ control and
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`capital commitments are individually negotiated, management is not according to a
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`mandated structure, and the details of this are kept from the public. Here, Unnamed
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`RPIs have intentionally funded a Petition through interrelated hedge funds, the
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`Coalition was formed as a nominal proxy for Unnamed RPIs (including investors)
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`who have an interest in bringing this IPR, the Named and Unnamed RPIs have
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`purposely disregarded corporate distinctions, and all profit handsomely from their
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`collective short activist IPR strategy. See Paper 9, 5; Ex. 2005.
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`Finally, Petitioner alleges that “each of Patent Owner’s arguments focuses
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`on the relationship between parties – an issue of privity – rather than the
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`relationship between an alleged unnamed party to this proceeding.” Paper 11, 6-7.
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`But Petitioner is confusing privity with the RPI inquiry.
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`See id. at 5-6. NPS has
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`shown Unnamed RPI relationships to funding, direction, and control of this
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`proceeding. Paper 9, 5-9; Ex. 2005. Unnamed RPIs have intentionally invested in
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`Petition-funding entities and have aided in establishing another entity (
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`i.e., the
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`Coalition), a proxy with no substantial interest apart from those of the Named and
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`Unnamed RPIs. See Taylor v. Sturgell
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`, 553 U.S. 880, 893-95 (2008);
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`Azure,
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`IPR2014-01288, Paper 13, 11. A RPI is a party who desires review of the patent.
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`Azure, IPR2014-01288, Paper 13, 100. Clearly, the Unnamed RPIs “desire review
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`4
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`IPR2015-00990 and IPR2015-01093
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`of the patent.”
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`II. The Requested Discovery Is not Available Elsewhere
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`NPS is not seeking public information, information it has, or the name of
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`each Named Funder. See Paper 11, 11; Ex. 2001, 4 (RFP No. 1). Rather, the
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`information sought, including documents that control funding of, and authority for
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`directing, this IPR, is only found in private governing/organizational records.
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`III. The Requested Discovery’s Instructions Are from Garmin
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` NPS’s instructions are easily understandable.
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`See Paper 11, 11-12. They
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`follow those used in discovery in Garmin, IPR2012-00001, Paper 26, 14. The
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`definitions use plain English and are clear as well. See Paper 11, 12.
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`IV. The Requested Discovery Is Timely
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` Petitioner’s objection to the timing of the requests is unfounded.
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`See Paper
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`11, 13. Here, the request is early – prior to the Board’s decision on the Petition.
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`V. The Requested Discovery Is not Burdensome or Unduly Broad
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` The breadth of the requests is of Petitioner’s own doing.
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`See Paper 11, 13-
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`14. Petitioner has involved many persons in the short activist strategy. The
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`documents sought (i.e., organization, governance, income/revenue, investors, and
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`offering documents) are of the most ordinary type that are typically used daily by a
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`business. Synopsis is inapposite. There, the movant sought “all communications”
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`“regarding or relating.” NPS’s requests are more circumscribed than that.
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`5
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`IPR2015-00990 and IPR2015-01093
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` Respectfully submitted,
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`
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`Dated June 15, 2015 /Joseph R. Robinson/
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` Joseph R. Robinson, PTO Reg. No. 33,448
` Heather M. Ettinger, PTO Reg. No. 51,658
` Dustin B. Weeks, PTO Reg. No. 67,466
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`Attorneys for Patent Owner
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`6
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`IPR2015-00990 and IPR2015-01093
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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 Reply to Petitioner’s Opposition to Patent Owner’s Motion for Additional
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`Discovery was served via electronic mail on June 15, 2015 on attorney for
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`Petitioner:
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`
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`Jeffrey D. Blake, Esq.
`jblake@merchantgould.com
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` Respectfully submitted,
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`Dated: June 15, 2015 /Dustin B. Weeks/
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` Dustin B. Weeks, PTO Reg. No. 67,466
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