throbber
IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
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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
`
`
`
`
`
`
`
`
`
`
`
`Case IPR2015-01117 (Patent 8,642,012)
`
`
`
`
`
`
`REPLY TO PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`PO Box 1450
`Alexandria, Virginia 22313–1450
`
`
`
`
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`
`TABLE OF CONTENTS
`
`INTRODUCTION…………………………………………………………...1
`
`LEGAL STANDARD……………………………………………………….2
`
`I.
`
`II.
`
`III. FACTUAL BACKGROUND……………………………………………….3
`
`IV. THE PETITIONS CORRECTLY IDENTIFY PAR INC. AS THE
`REAL PARTY IN INTEREST……………………………………………...4
`
`
`
`A.
`
`PAR CO. HAS NO TANGIBLE INTEREST IN
`THE PETITIONS……………………………………………..4
`
`THE BOARD FOUND THE TYPE OF EVIDENCE
`HORIZON RELIES ON INSUFFICIENT TO CONFER
`RPI STATUS ON PAR CO.…………………………………...5
`
`
`
`
`
`B.
`
`
`
`CONCLUSION……………………………………………………………...9
`
`i
`
`
`
`
`
`V.
`
`
`
`
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`
`
`LIST OF EXHIBITS
`
`Ex. 1001: U.S. Patent No. 8,642,012 to Scharschmidt (“the ’012 patent), filed
`
`January 7, 2009, issued February 4, 2014.
`
`Ex. 1002: Declaration of Dr. Neal Sondheimer.
`
`Ex. 1003: Curriculum vitae of Dr. Neal Sondheimer.
`
`Ex. 1004: Reserved.
`
`Ex. 1005: Simell, et al., Waste Nitrogen Excretion Via Amino Acid Acylation:
`
`Benzoate and Phenylacetate in Lysinuric Protein Intolerance, 20
`
`Pediatric Research, 1117-1121 (1986) (“Simell”).
`
`Ex. 1006: Reserved.
`
`Ex. 1007: Reserved.
`
`Ex. 1008: Reserved.
`
`Ex. 1009: Reserved.
`
`Ex. 1010: Reserved.
`
`Ex. 1011: Fernandes, Saudubray Berghe (editors), Inborn Metabolic Diseases
`
`Diagnosis and Treatment, 219–220 (3d ed. 2000). (“Fernandes”).
`
`Ex. 1012: Brusilow, Phenylacetylglutamine May Replace Urea as a Vehicle for
`
`Waste Nitrogen Excretion, 29 Pediatric Research, 147–150 (1991).
`
`(“Brusilow ’91”).
`
`
`
`ii
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`Ex. 1013: Reserved.
`
`Ex. 1014: Reserved.
`
`Ex. 1015: Kasumov, et al., New Secondary Metabolites of Phenylbutyrate in
`
`Humans and Rats, 32 Drug Metabolism and Disposition, 10–19
`
`(2004). (“Kasumov”).
`
`Ex. 1016: Sherwin, et al., The Maximum Production of Glutamine by the Human
`
`Body as Measured by the Output of Phenylacetylglutamine, 37 J. Biol.
`
`Chem., 113–119 (1919). (“Sherwin”).
`
`Ex. 1017: Shiple, et al.., Synthesis of Amino Acids in Animal Organisms. I.
`
`Synthesis of Glycocoll and Glutamine in the Human Organism, 44 J.
`
`American Chem. Society, 618–624 (1922). (“Shiple”).
`
`Ex. 1018: U.S. Patent No. 4,284,647 to Brusilow et al., filed March 31, 1980,
`
`issued August 18, 1981 (“the ’647 patent”).
`
`Ex. 1019: Reserved.
`
`Ex. 1020: Reserved.
`
`Ex. 1021: Prosecution History of the ’012 patent.
`
`Ex. 1022:
`
`Joint Claim Construction filed March 13, 2015 in Eastern District of
`
`Texas District Court, Case 2:14-cv-00384.
`
`
`
`iii
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`Ex. 1023: Piscitelli, et al., Disposition of Phenylbutyrate and its Metabolites,
`
`Phenylacetate and Phenylacetylglutamine, 35 J. Clin. Pharmacol.,
`
`368–373 (1995). (“Piscitelli”).
`
`Ex. 1024: Reserved.
`
`Ex. 1025: Comte, et al., Identification of phenylbutyrylglutamine, a new
`
`metabolite of phenylbutyrate metabolism in humans, J. Mass.
`
`Spectrom. 2002:37:581–90. (“Comte”).
`
`Ex. 1026: U.S. Patent No. 5,968,979 to Brusilow, filed Feb. 7, 1995, issued Oct.
`
`19, 1999 (“the ’979 patent”).
`
`Ex. 1027: Collins et al., Oral Sodium Phenylbutyrate Therapy in Homozygous β
`
`Thalassemia: A Clinical Trial, 85 Blood 43 (1995). (“Collins”).
`
`Ex. 1028: Declaration of Barry Gilman.
`
`
`
`
`
`iv
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`I.
`
`INTRODUCTION
`
`Pursuant to the Board’s Order on August 19, 2015 (Paper 10), Petitioner Par
`
`Pharmaceutical, Inc. (“Par Inc.”) hereby responds to Horizon Therapeutics, Inc.’s
`
`(f/k/a Hyperion Therapeutics, Inc.) (“Horizon’s”) assertion that the above-
`
`captioned petition and the petition in IPR2015-01127 (“Petitions”) for inter partes
`
`review (“IPR”) are time-barred for failure to name Par Pharmaceutical Companies,
`
`Inc. (“Par Co.”) as a real party-in-interest (“RPI”).1
`
`The Board should reject Horizon’s argument. Horizon recycles the same
`
`argument made by Jazz Pharmaceutical, Inc. (“Jazz”) against Par Inc. in currently
`
`pending, but unrelated, IPR proceedings: The Board rejected the argument on July
`
`28, 2015. (Ex. 2002.)2 In the Jazz IPR proceedings, Jazz insisted that the RPI
`
`should have included not only Par Inc. but also Par Co. (along with several other
`
`entities), and the Board held that Par Inc. complied with the statutory requirement
`
`without naming Par Co. (“Jazz decision”). (Ex. 2002 at 10–19.) For the same
`
`reasons, the Board should reject Horizon’s arguments because Horizon fails to
`
`
`1 Horizon Therapeutics, Inc. acquired Hyperion Therapeutics, Inc. and its patents.
`
`2 Those proceedings are IPR2015-00551 and IPR2015-00554 (combined “Jazz
`
`IPR proceedings”).
`
`
`
`1
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`establish Par Inc.’s parent holding company, Par Co., has an interest in or control
`
`over this proceeding sufficient to render it an RPI.
`
`II. LEGAL STANDARD
`
`The patent owner challenging a Petitioner’s RPI disclosure must provide
`
`sufficient evidence to show the disclosure is inadequate. Intellectual Ventures
`
`Mgmt., LLC v. Xilinx, Inc., IPR2012-00018, Paper 12 at 3 (P.T.A.B. Jan. 24, 2013).
`
`The RPI is the “party that desires review of the patent”—that is, the party “at
`
`whose behest the petition has been filed.” Office Patent Trial Practice Guide, 77
`
`Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). Whether a party who is not a named
`
`participant is a “real party-in-interest” to that proceeding “is a highly fact-
`
`dependent question.” Id. The RPI requirement exists to ensure that a non-party is
`
`not “litigating through a proxy.” See Aruze Gaming Macau, Ltd. v. MGT Gaming,
`
`Inc., IPR2014-01288, Paper 13, at 12 (P.T.A.B. Feb. 20, 2015). Moreover, the RPI
`
`analysis is a narrowly tailored inquiry into the “relationship between a party and a
`
`proceeding,” not “the relationship between parties.” Id. at 11. The evidence as a
`
`whole must show that the non-party possessed effective control over the IPR
`
`proceeding. Zoll Lifecor Corp. v. Philips Elec. N. Am. Corp., Case IPR2013-
`
`00609, Paper 15 at 10 (P.T.A.B. Mar. 20, 2014).
`
`2
`
`
`
`
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`III. FACTUAL BACKGROUND
`
`Par Inc. is a wholly-owned subsidiary of Par Co., which is a wholly-owned
`
`subsidiary of Sky Growth Intermediate Holdings II Corporation. (“SGIH II”). (Ex.
`
`1028 ¶ 2.) SGIH II is a wholly-owned subsidiary of Sky Growth Intermediate
`
`Holdings I Corporation (“SGIH I”). (Id.) SGIH I is a wholly-owned subsidiary of
`
`Par Pharmaceutical Holdings, Inc. (f/k/a Sky Growth Holdings Corporation) (“Par
`
`Holdings”). (Id.) Par Holdings has no parent corporation and no publicly held
`
`company owns 10% or more of the stock of Par Holdings. (IPR2015-01117 (U.S.
`
`Patent No. 8,642,012 (“’012 patent”), Paper 2, at 7.n4 (P.T.A.B. Apr. 29, 2015).)
`
`Par Inc. is engaged in the business of manufacturing, selling, and
`
`distributing pharmaceuticals. (Ex. 1028 ¶ 3.) As part of its business, Par Inc.
`
`prepares and files Abbreviated New Drug Applications (“ANDAs”) directed
`
`towards generic drug products. (Id.) Par Inc. prepared and filed ANDA No. 20-
`
`5742 with the United States Food and Drug Administration, which is directed to a
`
`glycerol phenylbutyrate oral liquid 1.1 gm/ml (“Par Inc.’s ANDA Product”), and
`
`holds all right and title to that ANDA. (Id. ¶ 4; see also Ex. 2001 ¶ 20 (Hyperion
`
`admitting).) By contrast, Par Co. does not conduct any such operations. (Ex. 1028
`
`¶ 3.)
`
`Par Inc.’s ANDA included “Paragraph IV” certifications that the ’012 patent
`
`and U.S. Patent No. 8,404,215 (“’215 patent”)––the patents subject to Par Inc.’s
`
`
`
`3
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`Petitions––are invalid or would not be infringed by Par Inc.’s ANDA Product.
`
`(Ex. 2001 ¶¶ 31, 39.) Horizon sued Par Inc. for patent infringement of each of
`
`these patents, and Horizon named Par Inc. as the sole defendant; Horizon did not
`
`name Par Co. (See id.; Hyperion Therapeutics, Inc. v. Par Pharmaceutical, Inc.,
`
`2:14-CV-384-JRG-RSP (E.D.TX.) (“the Texas litigation”).)
`
`IV. THE PETITIONS CORRECTLY IDENTIFY PAR INC. AS THE REAL
`PARTY IN INTEREST
`
`Par Inc. is the only Par entity with a cognizable interest in these Petitions
`
`and is the only Par entity that has maintained any control over their preparation and
`
`filing. On July 28, 2015, the Board ruled in the Jazz decision that the identification
`
`of Par Inc. alone sufficiently identified the RPI in that case. (Ex. 2002 at 10–19.)
`
`Similar to Jazz in that proceeding, Horizon fails to offer credible evidence to
`
`overcome this decision.
`
`Par Co. Has No Tangible Interest in the Petitions
`
`A.
`Whether Par Co. is an RPI depends on the relationship between it and these
`
`IPR proceedings, not its relationship with Par Inc. Aruze Gaming Macau,
`
`IPR2014-01288, Paper 13 at 12. Par Inc. prepared, filed, and owns all right and
`
`title to ANDA No. 20-5742. (Ex. 1028 ¶ 4.) Horizon has only sued Par Inc., and
`
`not Par Co., for infringement. (Id. ¶ 5; see also Ex. 2001.) Par Inc. is the only Par
`
`entity that directed, controlled, and funded the preparation and filing of these
`
`
`
`4
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`Petitions. (Ex. 1028 ¶ 6.) If the Petitions are ultimately successful, Par Inc. will
`
`have cleared one obstacle towards approval of its ANDA. Par Co., however, has
`
`no interest in seeking review of the ’012 patent or the ’215 patent. (Id. ¶ 8.) Par
`
`Co. is a non-operational holding company. (Id. ¶ 3.) It does not generate any
`
`revenues itself (outside revenues are generated from its operating subsidiaries,
`
`including Par Inc.). (Id.) Par Co. has no legal department of its own. (Id.) Thus,
`
`Par Inc. is the sole RPI for these Petitions.
`
`B.
`
`The Board Found the Type of Evidence Horizon Relies on
`Insufficient to Confer RPI Status on Par Co.
`
`Horizon relies on a superficial collection of observations regarding the
`
`corporate ownership of Par Inc., just as Jazz did in the Jazz IPR proceedings.
`
`Although Horizon acknowledges the Board’s decision in the Jazz IPR proceedings,
`
`Horizon points to no substantive new evidence not considered by the Board in the
`
`Jazz Decision.
`
`First, Horizon relies on broad statements in unrelated documents that Par Co.
`
`is a “pharmaceutical company engaged in developing, manufacturing, and
`
`distributing, inter alia, generic pharmaceutical products. . . . .” (IPR2015-01117,
`
`Paper 8 at 8; IPR2015-01127, Paper 8 at 43.) The fact that Par Co. is an actual
`
`company says nothing about the relationship between Par Co. and Par Inc.
`
`Furthermore, it has nothing to do with the question of whether Par Co. possessed
`
`
`
`5
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`effective control over the IPR proceeding. Zoll Lifecor Corp., IPR2013-00609,
`
`Paper 15 at 10.
`
`Second, Horizon relies on a completely unrelated plea agreement between
`
`Par Co. and the Department of Justice (“DOJ”) to support its argument that Par Co.
`
`is a RPI. (IPR2015-01117, Paper 8 at 10; IPR2015-01127, Paper 8 at 45–46.) Any
`
`association between Par Co. and Par Inc. in an endeavor unrelated to these
`
`Petitions is legally insufficient: “A party does not become a ‘real party-in-interest’
`
`merely through association with another party in an endeavor unrelated to the AIA
`
`proceeding.” (Ex. 2002 at 14 (citing 77 Fed. Reg. 48,760 (Aug. 14, 2012) (Trial
`
`Practice Guide)).)
`
`Third, Horizon relies on SEC filings unrelated to Par Inc.’s Petitions, which
`
`are also insufficient. See 77 Fed. Reg. 48,760. The Board has previously rejected
`
`attempts to base RPI status on “generic references to the existence of a
`
`parent/subsidiary relationship in SEC documents.” TRW Automotive U.S. LLC v.
`
`Magna Elec. Inc., IPR2014-01499, Paper 7, at 11 (P.T.A.B. Mar. 19, 2015).
`
`Horizon nonetheless contends that the use of the pronoun “we” in a SEC filing
`
`refers to Par Co. and Par Inc. collectively and was deliberately used to show that
`
`Par Co. controls these IPR Petitions. (IPR2015-01117, Paper 8 at 11–14;
`
`IPR2015-01127, Paper 8 at 46–49.) For example, Horizon points to a statement
`
`that “we filed Inter Partes Review petitions” in connection with the present
`
`
`
`6
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`proceedings as proof that Par Co. funds, directs, or controls these IPR Petitions.
`
`(IPR2015-01117, Paper 8 at 11–12; IPR2015-01127, Paper 8 at 46–47.) This is
`
`untrue.
`
`As stated in Barry Gilman’s Declaration, Par Inc. was the sole party
`
`responsible for directing, controlling, and funding the preparation and filing of
`
`these Petitions. (Ex. 1028 ¶ 6.) The use of the words “we” and “us” in the SEC
`
`filings must be read in context. For example, the SEC filing states that “Hyperion
`
`Therapeutics filed a lawsuit against us in the U.S. District Court for the Eastern
`
`District of Texas,” (Ex. 2004 at 36 (emphasis added)), although Horizon only sued
`
`Par Inc. in Texas. (Ex. 2001.) In this context, “us” refers only to Par Inc. (Ex.
`
`1028 ¶ 7.) The statement “we filed Inter Partes Review petitions” likewise must be
`
`read in context, and means that Par Inc. filed these Petitions. (Id. ¶ 7.)
`
`In the Jazz IPR proceedings, Jazz made the same argument about generic
`
`references in financial statements: “Patent Owner points to financial disclosure
`
`documents indicating that Par Inc. and its parents refer to themselves and act
`
`collectively as ‘we’. . . .” (Ex. 2002 at 11.) In finding that none of Par Inc.’s
`
`parent companies (including Par Co.) were RPIs, the Board held that “the evidence
`
`as a whole must show that the non-party possessed effective control over the inter
`
`partes review (“IPR”) proceeding.” (Ex. 2002 at 14 (citing Zoll Lifecor Corp.,
`
`IPR2013-00609, Paper 15 at 10).) A “RPI does not describe the relationship
`
`
`
`7
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`between parties” but instead the “relationship between a party and a proceeding.”
`
`Aruze Gaming Macau, IPR2014-01288, Paper 13 at 11. The generic descriptors in
`
`the SEC filing should be given no weight, and the Board should ignore Horizon’s
`
`attempts to selectively choose statements in the SEC filing that support its position.
`
`TRW Automotive U.S. LLC, IPR2014-01499, Paper 7, at 9, 11.
`
`Fourth, Horizon contends that because Thomas J. Haughey is an officer of
`
`both Par Inc. and Par Co., the companies have “unified and overlapping
`
`management.” (IPR2015-01117, Paper 8 at 14–16; IPR2015-01127, Paper 8 at
`
`50–51.)3 The fact that Mr. Haughey serves as the General Counsel and Chief
`
`Administrative Officer of both Par Inc. and its parent holding company, Par Co.,
`
`does not imply that Par Co. is an “involved and controlling parent corporation.”
`
`(Ex. 1028 ¶ 6.) Par Co. has no legal department (Id. ¶ 3), and the individuals
`
`primarily responsible for the decision to file the content of the instant Petitions are
`
`employed by Par Inc. (Id. ¶ 6.) Jazz made the same argument in the Jazz IPR
`
`proceedings: “Patent Owner also cites evidence indicating that Par Inc. and its
`
`
`3 Horizon asserts that Thomas J. Haughey is the General Counsel and Chief
`
`Administrative Officer of both Par Co. and Par Inc., as well as the President of
`
`Par Inc. (IPR 2015-01117, Paper 8 at 14–16; IPR2015-01127, Paper 8 at 50‒
`
`51.) Mr. Haughey is not the President of Par Inc. at this time.
`
`
`
`8
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`parent companies share the same corporate officers. . . .” (Ex. 2002 at 12.)
`
`Nonetheless, the Board found “we are persuaded that the evidence of record
`
`sufficiently establishes that none of the Par parent companies have had the ability
`
`to exert control over Par Inc. in relation to this IPR, notwithstanding the ‘parent’
`
`status of those companies.” (Id. at 19.)
`
`V. CONCLUSION
`
`The evidence shows that Par Inc. alone is the proper RPI. Horizon’s claims
`
`amount to nothing more than generic references to a traditional parent-subsidiary
`
`relationship and reliance on insufficient evidence. Par Inc. by itself, and not Par
`
`Co., has funded, directed, or controlled these IPR petitions. Therefore, Par Inc. has
`
`fully satisfied the requirements of § 312(a), and the Board should maintain the
`
`current Petition filing dates and institute review of the Petitions.
`
`Respectfully submitted by
`K&L Gates LLP,
`
`
`
`
`
`/Michael J. Freno/
`Michael J. Freno
`Reg. No. 57,163
`Customer No. 24573
`Lead Attorney for Petitioner
`
`
`
`By:
`
`
`
`Date: September 2, 2015
`
`
`
`michael.freno@klgates.com (email)
`206.370.7947 (phone)
`206.623.7022 (fax)
`925 Fourth Avenue, Suite 2900
`Seattle, WA 98104
`
`
`
`9
`
`

`
`IPR2015-01117 (Patent 8,642,012)
`Reply to Patent Owner’s Preliminary Response
`
`
`
`
`Certification of Service Under 37 C.F.R. § 42.6(e)(4)
`
`
`
`A copy of this Reply to Patent Owner’s Preliminary Response and
`
`supporting materials has been served upon the following counsel for the Patent
`
`Owner via electronic mail, as agreed to by counsel, on this second day of
`
`September 2015:
`
`Lauren Stevens:
`
`
`
`lstevens@globalpatentgroup.com
`
`Matthew C. Phillips:
`
`matthew.phillips@renaissanceiplaw.com
`
`Dennis Bennett:
`
`
`
`dennisbennett@globalpatentgroup.com
`
` By:
`
`
`/Michael J. Freno
`
`Michael J. Freno
`
`
`Reg. No. 57,163
`
`
`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
`
`
`10

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