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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`PAR PHARMACEUTICAL, INC.
`Petitioner
`v.
`HORIZON THERAPEUTICS, INC.
`Patent Owner
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`Case IPR2015-01117 (Patent 8,642,012)
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`REPLY TO PATENT OWNER’S PRELIMINARY RESPONSE
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`PO Box 1450
`Alexandria, Virginia 22313–1450
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`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
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`TABLE OF CONTENTS
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`INTRODUCTION…………………………………………………………...1
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`LEGAL STANDARD……………………………………………………….2
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`I.
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`II.
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`III. FACTUAL BACKGROUND……………………………………………….3
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`IV. THE PETITIONS CORRECTLY IDENTIFY PAR INC. AS THE
`REAL PARTY IN INTEREST……………………………………………...4
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`A.
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`PAR CO. HAS NO TANGIBLE INTEREST IN
`THE PETITIONS……………………………………………..4
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`THE BOARD FOUND THE TYPE OF EVIDENCE
`HORIZON RELIES ON INSUFFICIENT TO CONFER
`RPI STATUS ON PAR CO.…………………………………...5
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`B.
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`CONCLUSION……………………………………………………………...9
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`i
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`V.
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`IPR2015-01117 (Patent 8,642,012)
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`LIST OF EXHIBITS
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`Ex. 1001: U.S. Patent No. 8,642,012 to Scharschmidt (“the ’012 patent), filed
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`January 7, 2009, issued February 4, 2014.
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`Ex. 1002: Declaration of Dr. Neal Sondheimer.
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`Ex. 1003: Curriculum vitae of Dr. Neal Sondheimer.
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`Ex. 1004: Reserved.
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`Ex. 1005: Simell, et al., Waste Nitrogen Excretion Via Amino Acid Acylation:
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`Benzoate and Phenylacetate in Lysinuric Protein Intolerance, 20
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`Pediatric Research, 1117-1121 (1986) (“Simell”).
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`Ex. 1006: Reserved.
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`Ex. 1007: Reserved.
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`Ex. 1008: Reserved.
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`Ex. 1009: Reserved.
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`Ex. 1010: Reserved.
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`Ex. 1011: Fernandes, Saudubray Berghe (editors), Inborn Metabolic Diseases
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`Diagnosis and Treatment, 219–220 (3d ed. 2000). (“Fernandes”).
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`Ex. 1012: Brusilow, Phenylacetylglutamine May Replace Urea as a Vehicle for
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`Waste Nitrogen Excretion, 29 Pediatric Research, 147–150 (1991).
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`(“Brusilow ’91”).
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`Ex. 1013: Reserved.
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`Ex. 1014: Reserved.
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`Ex. 1015: Kasumov, et al., New Secondary Metabolites of Phenylbutyrate in
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`Humans and Rats, 32 Drug Metabolism and Disposition, 10–19
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`(2004). (“Kasumov”).
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`Ex. 1016: Sherwin, et al., The Maximum Production of Glutamine by the Human
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`Body as Measured by the Output of Phenylacetylglutamine, 37 J. Biol.
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`Chem., 113–119 (1919). (“Sherwin”).
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`Ex. 1017: Shiple, et al.., Synthesis of Amino Acids in Animal Organisms. I.
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`Synthesis of Glycocoll and Glutamine in the Human Organism, 44 J.
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`American Chem. Society, 618–624 (1922). (“Shiple”).
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`Ex. 1018: U.S. Patent No. 4,284,647 to Brusilow et al., filed March 31, 1980,
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`issued August 18, 1981 (“the ’647 patent”).
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`Ex. 1019: Reserved.
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`Ex. 1020: Reserved.
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`Ex. 1021: Prosecution History of the ’012 patent.
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`Ex. 1022:
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`Joint Claim Construction filed March 13, 2015 in Eastern District of
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`Texas District Court, Case 2:14-cv-00384.
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`Ex. 1023: Piscitelli, et al., Disposition of Phenylbutyrate and its Metabolites,
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`Phenylacetate and Phenylacetylglutamine, 35 J. Clin. Pharmacol.,
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`368–373 (1995). (“Piscitelli”).
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`Ex. 1024: Reserved.
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`Ex. 1025: Comte, et al., Identification of phenylbutyrylglutamine, a new
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`metabolite of phenylbutyrate metabolism in humans, J. Mass.
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`Spectrom. 2002:37:581–90. (“Comte”).
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`Ex. 1026: U.S. Patent No. 5,968,979 to Brusilow, filed Feb. 7, 1995, issued Oct.
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`19, 1999 (“the ’979 patent”).
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`Ex. 1027: Collins et al., Oral Sodium Phenylbutyrate Therapy in Homozygous β
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`Thalassemia: A Clinical Trial, 85 Blood 43 (1995). (“Collins”).
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`Ex. 1028: Declaration of Barry Gilman.
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`IPR2015-01117 (Patent 8,642,012)
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`I.
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`INTRODUCTION
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`Pursuant to the Board’s Order on August 19, 2015 (Paper 10), Petitioner Par
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`Pharmaceutical, Inc. (“Par Inc.”) hereby responds to Horizon Therapeutics, Inc.’s
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`(f/k/a Hyperion Therapeutics, Inc.) (“Horizon’s”) assertion that the above-
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`captioned petition and the petition in IPR2015-01127 (“Petitions”) for inter partes
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`review (“IPR”) are time-barred for failure to name Par Pharmaceutical Companies,
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`Inc. (“Par Co.”) as a real party-in-interest (“RPI”).1
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`The Board should reject Horizon’s argument. Horizon recycles the same
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`argument made by Jazz Pharmaceutical, Inc. (“Jazz”) against Par Inc. in currently
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`pending, but unrelated, IPR proceedings: The Board rejected the argument on July
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`28, 2015. (Ex. 2002.)2 In the Jazz IPR proceedings, Jazz insisted that the RPI
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`should have included not only Par Inc. but also Par Co. (along with several other
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`entities), and the Board held that Par Inc. complied with the statutory requirement
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`without naming Par Co. (“Jazz decision”). (Ex. 2002 at 10–19.) For the same
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`reasons, the Board should reject Horizon’s arguments because Horizon fails to
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`1 Horizon Therapeutics, Inc. acquired Hyperion Therapeutics, Inc. and its patents.
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`2 Those proceedings are IPR2015-00551 and IPR2015-00554 (combined “Jazz
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`IPR proceedings”).
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`establish Par Inc.’s parent holding company, Par Co., has an interest in or control
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`over this proceeding sufficient to render it an RPI.
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`II. LEGAL STANDARD
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`The patent owner challenging a Petitioner’s RPI disclosure must provide
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`sufficient evidence to show the disclosure is inadequate. Intellectual Ventures
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`Mgmt., LLC v. Xilinx, Inc., IPR2012-00018, Paper 12 at 3 (P.T.A.B. Jan. 24, 2013).
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`The RPI is the “party that desires review of the patent”—that is, the party “at
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`whose behest the petition has been filed.” Office Patent Trial Practice Guide, 77
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`Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). Whether a party who is not a named
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`participant is a “real party-in-interest” to that proceeding “is a highly fact-
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`dependent question.” Id. The RPI requirement exists to ensure that a non-party is
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`not “litigating through a proxy.” See Aruze Gaming Macau, Ltd. v. MGT Gaming,
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`Inc., IPR2014-01288, Paper 13, at 12 (P.T.A.B. Feb. 20, 2015). Moreover, the RPI
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`analysis is a narrowly tailored inquiry into the “relationship between a party and a
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`proceeding,” not “the relationship between parties.” Id. at 11. The evidence as a
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`whole must show that the non-party possessed effective control over the IPR
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`proceeding. Zoll Lifecor Corp. v. Philips Elec. N. Am. Corp., Case IPR2013-
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`00609, Paper 15 at 10 (P.T.A.B. Mar. 20, 2014).
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`III. FACTUAL BACKGROUND
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`Par Inc. is a wholly-owned subsidiary of Par Co., which is a wholly-owned
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`subsidiary of Sky Growth Intermediate Holdings II Corporation. (“SGIH II”). (Ex.
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`1028 ¶ 2.) SGIH II is a wholly-owned subsidiary of Sky Growth Intermediate
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`Holdings I Corporation (“SGIH I”). (Id.) SGIH I is a wholly-owned subsidiary of
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`Par Pharmaceutical Holdings, Inc. (f/k/a Sky Growth Holdings Corporation) (“Par
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`Holdings”). (Id.) Par Holdings has no parent corporation and no publicly held
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`company owns 10% or more of the stock of Par Holdings. (IPR2015-01117 (U.S.
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`Patent No. 8,642,012 (“’012 patent”), Paper 2, at 7.n4 (P.T.A.B. Apr. 29, 2015).)
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`Par Inc. is engaged in the business of manufacturing, selling, and
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`distributing pharmaceuticals. (Ex. 1028 ¶ 3.) As part of its business, Par Inc.
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`prepares and files Abbreviated New Drug Applications (“ANDAs”) directed
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`towards generic drug products. (Id.) Par Inc. prepared and filed ANDA No. 20-
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`5742 with the United States Food and Drug Administration, which is directed to a
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`glycerol phenylbutyrate oral liquid 1.1 gm/ml (“Par Inc.’s ANDA Product”), and
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`holds all right and title to that ANDA. (Id. ¶ 4; see also Ex. 2001 ¶ 20 (Hyperion
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`admitting).) By contrast, Par Co. does not conduct any such operations. (Ex. 1028
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`¶ 3.)
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`Par Inc.’s ANDA included “Paragraph IV” certifications that the ’012 patent
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`and U.S. Patent No. 8,404,215 (“’215 patent”)––the patents subject to Par Inc.’s
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`Petitions––are invalid or would not be infringed by Par Inc.’s ANDA Product.
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`(Ex. 2001 ¶¶ 31, 39.) Horizon sued Par Inc. for patent infringement of each of
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`these patents, and Horizon named Par Inc. as the sole defendant; Horizon did not
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`name Par Co. (See id.; Hyperion Therapeutics, Inc. v. Par Pharmaceutical, Inc.,
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`2:14-CV-384-JRG-RSP (E.D.TX.) (“the Texas litigation”).)
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`IV. THE PETITIONS CORRECTLY IDENTIFY PAR INC. AS THE REAL
`PARTY IN INTEREST
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`Par Inc. is the only Par entity with a cognizable interest in these Petitions
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`and is the only Par entity that has maintained any control over their preparation and
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`filing. On July 28, 2015, the Board ruled in the Jazz decision that the identification
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`of Par Inc. alone sufficiently identified the RPI in that case. (Ex. 2002 at 10–19.)
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`Similar to Jazz in that proceeding, Horizon fails to offer credible evidence to
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`overcome this decision.
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`Par Co. Has No Tangible Interest in the Petitions
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`A.
`Whether Par Co. is an RPI depends on the relationship between it and these
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`IPR proceedings, not its relationship with Par Inc. Aruze Gaming Macau,
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`IPR2014-01288, Paper 13 at 12. Par Inc. prepared, filed, and owns all right and
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`title to ANDA No. 20-5742. (Ex. 1028 ¶ 4.) Horizon has only sued Par Inc., and
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`not Par Co., for infringement. (Id. ¶ 5; see also Ex. 2001.) Par Inc. is the only Par
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`entity that directed, controlled, and funded the preparation and filing of these
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`Petitions. (Ex. 1028 ¶ 6.) If the Petitions are ultimately successful, Par Inc. will
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`have cleared one obstacle towards approval of its ANDA. Par Co., however, has
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`no interest in seeking review of the ’012 patent or the ’215 patent. (Id. ¶ 8.) Par
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`Co. is a non-operational holding company. (Id. ¶ 3.) It does not generate any
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`revenues itself (outside revenues are generated from its operating subsidiaries,
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`including Par Inc.). (Id.) Par Co. has no legal department of its own. (Id.) Thus,
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`Par Inc. is the sole RPI for these Petitions.
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`B.
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`The Board Found the Type of Evidence Horizon Relies on
`Insufficient to Confer RPI Status on Par Co.
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`Horizon relies on a superficial collection of observations regarding the
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`corporate ownership of Par Inc., just as Jazz did in the Jazz IPR proceedings.
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`Although Horizon acknowledges the Board’s decision in the Jazz IPR proceedings,
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`Horizon points to no substantive new evidence not considered by the Board in the
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`Jazz Decision.
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`First, Horizon relies on broad statements in unrelated documents that Par Co.
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`is a “pharmaceutical company engaged in developing, manufacturing, and
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`distributing, inter alia, generic pharmaceutical products. . . . .” (IPR2015-01117,
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`Paper 8 at 8; IPR2015-01127, Paper 8 at 43.) The fact that Par Co. is an actual
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`company says nothing about the relationship between Par Co. and Par Inc.
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`Furthermore, it has nothing to do with the question of whether Par Co. possessed
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`effective control over the IPR proceeding. Zoll Lifecor Corp., IPR2013-00609,
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`Paper 15 at 10.
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`Second, Horizon relies on a completely unrelated plea agreement between
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`Par Co. and the Department of Justice (“DOJ”) to support its argument that Par Co.
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`is a RPI. (IPR2015-01117, Paper 8 at 10; IPR2015-01127, Paper 8 at 45–46.) Any
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`association between Par Co. and Par Inc. in an endeavor unrelated to these
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`Petitions is legally insufficient: “A party does not become a ‘real party-in-interest’
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`merely through association with another party in an endeavor unrelated to the AIA
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`proceeding.” (Ex. 2002 at 14 (citing 77 Fed. Reg. 48,760 (Aug. 14, 2012) (Trial
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`Practice Guide)).)
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`Third, Horizon relies on SEC filings unrelated to Par Inc.’s Petitions, which
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`are also insufficient. See 77 Fed. Reg. 48,760. The Board has previously rejected
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`attempts to base RPI status on “generic references to the existence of a
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`parent/subsidiary relationship in SEC documents.” TRW Automotive U.S. LLC v.
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`Magna Elec. Inc., IPR2014-01499, Paper 7, at 11 (P.T.A.B. Mar. 19, 2015).
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`Horizon nonetheless contends that the use of the pronoun “we” in a SEC filing
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`refers to Par Co. and Par Inc. collectively and was deliberately used to show that
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`Par Co. controls these IPR Petitions. (IPR2015-01117, Paper 8 at 11–14;
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`IPR2015-01127, Paper 8 at 46–49.) For example, Horizon points to a statement
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`that “we filed Inter Partes Review petitions” in connection with the present
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`proceedings as proof that Par Co. funds, directs, or controls these IPR Petitions.
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`(IPR2015-01117, Paper 8 at 11–12; IPR2015-01127, Paper 8 at 46–47.) This is
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`untrue.
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`As stated in Barry Gilman’s Declaration, Par Inc. was the sole party
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`responsible for directing, controlling, and funding the preparation and filing of
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`these Petitions. (Ex. 1028 ¶ 6.) The use of the words “we” and “us” in the SEC
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`filings must be read in context. For example, the SEC filing states that “Hyperion
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`Therapeutics filed a lawsuit against us in the U.S. District Court for the Eastern
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`District of Texas,” (Ex. 2004 at 36 (emphasis added)), although Horizon only sued
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`Par Inc. in Texas. (Ex. 2001.) In this context, “us” refers only to Par Inc. (Ex.
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`1028 ¶ 7.) The statement “we filed Inter Partes Review petitions” likewise must be
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`read in context, and means that Par Inc. filed these Petitions. (Id. ¶ 7.)
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`In the Jazz IPR proceedings, Jazz made the same argument about generic
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`references in financial statements: “Patent Owner points to financial disclosure
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`documents indicating that Par Inc. and its parents refer to themselves and act
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`collectively as ‘we’. . . .” (Ex. 2002 at 11.) In finding that none of Par Inc.’s
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`parent companies (including Par Co.) were RPIs, the Board held that “the evidence
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`as a whole must show that the non-party possessed effective control over the inter
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`partes review (“IPR”) proceeding.” (Ex. 2002 at 14 (citing Zoll Lifecor Corp.,
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`IPR2013-00609, Paper 15 at 10).) A “RPI does not describe the relationship
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`between parties” but instead the “relationship between a party and a proceeding.”
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`Aruze Gaming Macau, IPR2014-01288, Paper 13 at 11. The generic descriptors in
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`the SEC filing should be given no weight, and the Board should ignore Horizon’s
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`attempts to selectively choose statements in the SEC filing that support its position.
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`TRW Automotive U.S. LLC, IPR2014-01499, Paper 7, at 9, 11.
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`Fourth, Horizon contends that because Thomas J. Haughey is an officer of
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`both Par Inc. and Par Co., the companies have “unified and overlapping
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`management.” (IPR2015-01117, Paper 8 at 14–16; IPR2015-01127, Paper 8 at
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`50–51.)3 The fact that Mr. Haughey serves as the General Counsel and Chief
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`Administrative Officer of both Par Inc. and its parent holding company, Par Co.,
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`does not imply that Par Co. is an “involved and controlling parent corporation.”
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`(Ex. 1028 ¶ 6.) Par Co. has no legal department (Id. ¶ 3), and the individuals
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`primarily responsible for the decision to file the content of the instant Petitions are
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`employed by Par Inc. (Id. ¶ 6.) Jazz made the same argument in the Jazz IPR
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`proceedings: “Patent Owner also cites evidence indicating that Par Inc. and its
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`3 Horizon asserts that Thomas J. Haughey is the General Counsel and Chief
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`Administrative Officer of both Par Co. and Par Inc., as well as the President of
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`Par Inc. (IPR 2015-01117, Paper 8 at 14–16; IPR2015-01127, Paper 8 at 50‒
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`51.) Mr. Haughey is not the President of Par Inc. at this time.
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`parent companies share the same corporate officers. . . .” (Ex. 2002 at 12.)
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`Nonetheless, the Board found “we are persuaded that the evidence of record
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`sufficiently establishes that none of the Par parent companies have had the ability
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`to exert control over Par Inc. in relation to this IPR, notwithstanding the ‘parent’
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`status of those companies.” (Id. at 19.)
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`V. CONCLUSION
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`The evidence shows that Par Inc. alone is the proper RPI. Horizon’s claims
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`amount to nothing more than generic references to a traditional parent-subsidiary
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`relationship and reliance on insufficient evidence. Par Inc. by itself, and not Par
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`Co., has funded, directed, or controlled these IPR petitions. Therefore, Par Inc. has
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`fully satisfied the requirements of § 312(a), and the Board should maintain the
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`current Petition filing dates and institute review of the Petitions.
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`Respectfully submitted by
`K&L Gates LLP,
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`
`
`/Michael J. Freno/
`Michael J. Freno
`Reg. No. 57,163
`Customer No. 24573
`Lead Attorney for Petitioner
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`By:
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`Date: September 2, 2015
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`
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`michael.freno@klgates.com (email)
`206.370.7947 (phone)
`206.623.7022 (fax)
`925 Fourth Avenue, Suite 2900
`Seattle, WA 98104
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`IPR2015-01117 (Patent 8,642,012)
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`Certification of Service Under 37 C.F.R. § 42.6(e)(4)
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`A copy of this Reply to Patent Owner’s Preliminary Response and
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`supporting materials has been served upon the following counsel for the Patent
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`Owner via electronic mail, as agreed to by counsel, on this second day of
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`September 2015:
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`Lauren Stevens:
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`lstevens@globalpatentgroup.com
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`Matthew C. Phillips:
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`matthew.phillips@renaissanceiplaw.com
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`Dennis Bennett:
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`dennisbennett@globalpatentgroup.com
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` By:
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`/Michael J. Freno
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`Michael J. Freno
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`
`Reg. No. 57,163
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`
`Customer No. 24573
`Date: September 2, 2015
`michael.freno@klgates.com (email)
`206.370.7947 (phone)
`206.623.7022 (fax)
`K&L Gates LLP
`925 Fourth Avenue, Suite 2900
`Seattle, WA 98104
`
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`10