For the Patent Owner
`Backup counsel: Robert W. Hahl, Reg. No. 33,893
`Backup counsel: Robert Mihail, Reg. No. 66,021
`Neifeld IP Law, PC
`
`
`
`Paper No. __
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`
`Coalition For Affordable Drugs V LLC
`Petitioner
`v.
`
`Biogen MA Inc.
`Patent Owner
`____________
`
`Case: IPR2015-01136
`Patent 8,399,514
`Title: TREATMENT FOR MULTIPLE SCLEROSIS
`____________
` 
`
`Petitioner’s Opposition to Patent Owner’s Motion for Additional Discovery
`
`
`
`Mail Stop PATENT BOARD
`U.S. Patent Trial & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-14
`
`

`
`TABLE OF CONTENTS
`
`I. 
`
`Introduction .......................................................................................................... 1 
`
`II. 
`
`Legal Standards ................................................................................................ 3 
`
`III.  PO’s contention that Petitioner’s “taking short positions against
`
`pharmaceutical companies” is an abuse of process and improper use of the inter
`
`partes review proceeding lacks any legal basis ......................................................... 4 
`
`IV.  Knowledge of “taking short positions against pharmaceutical companies” is
`
`already in the PO’s possession and nothing beyond mere speculation supports the
`
`PO’s contention that information about an abuse of process or improper use of this
`
`proceeding exist to be uncovered ............................................................................... 9 
`
`V.  Any person who is not the owner of a patent may file a petition to institute an
`
`inter partes review of a patent ................................................................................. 10 
`
`VI.  PO’s contention of abuse of process and improper use of the proceeding is
`
`not applicable to the preliminary phase of inter partes review proceedings ........... 12 
`
`VII.  Granting the Motion would exceed the scope of the Board’s lawful
`
`authority under the Administrative Procedure Act (“APA”). .................................. 15 
`
`VIII.  Conclusion ................................................................................................... 15 
`
`
`
`
`
`
`
`ii
`
`

`
`TABLE OF AUTHORITIES
`
`Cases 
`
`Dickinson v. Zurko, 527 U.S. 150 (1999) ................................................................ 15
`
`Garmin Int’l Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26, (PTAB)
`
` .............................................................................................................................3, 4
`
`Harrison v. Howard Univ., 846 F. Supp. 1, (D.D.C. 1993) ...................................... 8
`
`Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., IPR2013-00324, Paper 19, . 11
`
`Iron Dome LLC v. Chinook Licensing DE LLC, IPR2014-00674, Paper 9, ........... 12
`
`Lader v. Benkowitz, 188 Misc. 906, 907, 66 N.Y.S.2d 713, (Sup. Ct. 1946) ............ 9
`
`Mobay Chemical Co. v. Hudson Foam Plastics Corp. et al, 277 F. Supp. 413,
`
`(S.D.N.Y. 1967) ...................................................................................................... 6
`
`Morowitz v. Marvel, 423 A.2d 196 (D.C. 1980) ........................................................ 8
`
`Nader v. Democratic Nat'l Comm., 555 F. Supp. 2d 137, (D.D.C. 2008) ................. 8
`
`Palo Alto Networks, Inc. v. Juniper Networks, Inc., IPR2013-00369, Paper 36 (Feb.
`
`5, 2014) ................................................................................................................... 4
`
`Rogers v. Johnson-Norman, 466 F. Supp. 2d 162, (D.D.C. 2006) ............................ 8
`
`Statutes 
`
`35 U.S.C. § 314(a) .............................................................................................. 3, 12
`
`35 U.S.C. § 316(a)(5) ................................................................................................. 4
`
`35 U.S.C. 311 ............................................................................................................. 3
`
`
`
`iii
`
`

`
`35 U.S.C. 311(a) ...................................................................................................... 10
`
`35 U.S.C. 311(b) ........................................................................................................ 5
`
`35 U.S.C. 316(a)(6) .................................................................................................. 13
`
`35 U.S.C. 326(a)(6) ........................................................................................... 13, 14
`
`Other Authorities 
`
`77 Fed. Reg. 48612, August 14, 2012 ..................................................................... 13
`
`77 Fed. Reg. 6879, February 9, 2012 ....................................................................... 12
`
`Rules 
`
`37 C.F.R. § 42.108(b) .............................................................................................. 11
`
`37 C.F.R. § 42.12(a) ............................................................................................ 5, 12
`
`37 C.F.R. § 42.51(b)(2)(i) .......................................................................................... 4
`
`37 C.F.R. 42.12(a)(2) and (3) .................................................................................... 6
`
`37 C.F.R. 42.12(a)(7) ................................................................................................. 6
`
`37 C.F.R. 42.51(b)(2)(i) ............................................................................................. 5
`
`
`
`iv
`
`
`
`
`
`

`
`I.
`
`Introduction
`On June 29, 2015, BIOGEN INTERNATIONAL GmbH (“PO”) filed a
`
`Motion for Additional Discovery (“Motion”) pursuant to the Board’s Orders in
`
`IPR2015-01086 (Paper 8) and in IPR2015-01136 (Paper 14). This Opposition is
`
`due July 3, 2015 and is timely filed on behalf of Petitioner.
`
`The Motion should be denied because it fails to show that the requested
`
`discovery is in the interest of justice. It is not in the interest of justice because: (1)
`
`the PO’s contention that “taking short positions against pharmaceutical companies”
`
`is an abuse of process and improper use of the inter partes review proceeding lacks
`
`any legal basis, (2) knowledge of “taking short positions against pharmaceutical
`
`companies” is already in PO’s possession. Nothing beyond speculation supports
`
`the contention that information about abuse of process or improper use of this
`
`proceeding exists to be uncovered, (3) any person who is not the owner of a patent
`
`may lawfully file a petition for inter partes review of a patent, and thus the act of
`
`filing a petition cannot be an improper use of the proceeding, (4) Petitioner has
`
`used the IPR process to challenge the patentability of US 8,759,393 and US
`
`8,399,514, which is what that process was designed to accomplish, (5) PO’s
`
`allegations of wrongdoing are not pertinent to the preliminary phase of an IPR and
`
`must be considered premature. The PTAB lacks authority to consider an abuse of
`
`process claim at this stage of the proceeding and until a trial is instituted, and (6)
`
`
`
`1
`
`

`
`nothing in the America Invents Act, or Chapters 31-32 and 42 of 37 C.F.R.
`
`concerns a petitioner’s motivation for requesting an IPR. Granting any motion
`
`based on disapproval of a Petitioner’s motivation for filing an IPR would exceed
`
`the Board’s authority under the Administrative Procedure Act (“APA”). No matter
`
`how narrowly tailored, PO’s request for additional discovery must be denied.
`
`PO uses the term “short selling” as if that were evil and evidence of abuse—
`
`which is wrong and unsupported. As noted by the SEC1 and Congressional
`
`testimony by a prominent Yale Professor, short selling is a positive for our
`
`economy, to correct overpricing.2
`
`
`1 “Efficient markets require that prices fully reflect all buy and sell interest. When
`a short seller speculates or hedges against a downward movement in a security, his
`transaction is a mirror image of the person who purchases the security based upon
`speculation that the security’s price will rise or to hedge against such an increase.
`Both the purchaser and the short seller hope to profit, or hedge against loss, by
`buying the security at one price and selling at a higher price. Such short sellers add
`to stock pricing efficiency because their transactions inform the market of their
`evaluation of future stock price performance.” 19 SHO Proposing Release at *15-
`*16; retrieved at http://www.klgates.com/files/tempFiles/901e34d6-b3ee-4ac4-
`bdad-3b6cabd7060b/Alert_SEC_ShortSelling.pdf.
`2 “Short selling, which today is done primarily by hedge funds, is an important
`channel for negative information to get into the market. . . . What happens when
`negative information is suppressed? Stocks can become overpriced because only
`optimistic opinions are reflected in the stock price. . . .Firms don't like it when
`someone shorts their stock, and some firms try to impede short selling using legal
`threats, investigations, lawsuits, and various technical actions. . . . It is quite
`positive for our economy to correct overpricing ….” US Senate Testimony of
`Owen A. Lamont, Professor Yale School of Management (June 28, 2006);
`http://www.judiciary.senate.gov/imo/media/doc/Lamont%20Testimony%2006280
`6.pdf
`
`
`
`2
`
`

`
`The vast majority of drug consumers lack the resources to pay the filing fee
`
`for an IPR, much less the hundreds of thousands of dollars it costs to prepare and
`
`prosecute an IPR. The annual cost of Tecfidera for a typical consumer was $63,315
`
`per year in 2013, increasing at 13.8% annually. Ex. 1029, p3. If not Petitioner, who
`
`would PO propose to challenge patents that Petitioner contends should never have
`
`issued? PO implies that having to defend its patents if the Board institutes a trial
`
`would impose an undue financial hardship, but there is no basis in law or fact to
`
`call that an abuse of the IPR process.
`
`II. Legal Standards
`
`35 U.S.C. 311 Inter partes review.
`
`(a) IN GENERAL.—Subject to the provisions of this chapter, a
`person who is not the owner of a patent may file with the Office a
`petition to institute an inter partes review of the patent. …
`(b) SCOPE.—A petitioner in an inter partes review may request to
`cancel as unpatentable 1 or more claims of a patent only on a ground
`that could be raised under section 102 or 103 and only on the basis of
`prior art consisting of patents or printed publications.
`
`35 U.S.C. § 314(a):
`
`THRESHOLD.--The Director may not authorize an inter partes
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 311 and any
`response filed under section 313 shows that there is a reasonable
`likelihood that the petitioner would prevail with respect to at least 1 of
`the claims challenged in the petition.
`
`Discovery in an inter partes review is limited. Garmin Int’l, Inc. v. Cuozzo
`
`
`
`
`
`Speed Techs. LLC, IPR2012-00001, Paper 26, 6–7 (Mar. 5, 2013). The party
`
`
`
`3
`
`

`
`seeking discovery beyond what is expressly permitted by rule must show that such
`
`additional discovery is “necessary in the interest of justice.” 35 U.S.C. § 316(a)(5);
`
`37 C.F.R. § 42.51(b)(2)(i). The "interest of justice" standard requires that a
`
`showing of relevance be made by the party seeking additional discovery before the
`
`request is granted. Due to Congress’s intent, and time deadlines, the Board is
`
`“conservative in granting leave for additional discovery.” Palo Alto Networks, Inc.
`
`v. Juniper Networks, Inc., IPR2013-00369, Paper 36, 2-3 (Feb. 5, 2014)
`
`III. PO’s contention that Petitioner’s “taking short positions against
`pharmaceutical companies” is an abuse of process and improper use of the
`inter partes review proceeding lacks any legal basis
`The first Garmin factor requires more than the “mere possibility of finding
`
`
`
`something useful” or a “mere allegation that something useful will be found.” A
`
`party requesting discovery should already be in possession of evidence tending to
`
`show beyond speculation that in fact something useful will be uncovered.
`
`Garmin Int’l Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26 at 6,
`
`(PTAB). The useful information that the movant seeks to uncover must show
`
`beyond speculation that something favorable to PO’s contention of abuse of
`
`process and improper use of the proceeding will be uncovered. Id. at 7.
`
`
`
`But PO provides here no legal basis for its contention that “taking short
`
`positions against pharmaceutical companies” is per se an abuse of process and an
`
`improper use of the inter partes review proceeding. A contention without legal
`
`
`
`4
`
`

`
`basis cannot support their motion for additional discovery. To hold otherwise
`
`would mean that a moving party could meet its burden under 37 C.F.R.
`
`42.51(b)(2)(i) merely with speculative or conclusory accusations of wrongdoing.
`
`PO’s contention that “taking short positions against pharmaceutical companies”
`
`(despite being perfectly legal under the federal securities laws), is an abuse of
`
`process, is simply wrong.
`
`
`
`PO asserts “that the requested documents will be favorable in substantive
`
`value to a contention of abuse of process and improper use of the proceeding,” and
`
`that “[a]buse of process is the use of a legal process primarily to accomplish a
`
`purpose for which it is not designed.” Motion at 3. PO further asserts that
`
`“Petitioner is taking short positions against pharmaceutical companies and filing
`
`IPRs against those companies, thereby using the IPR process to manipulate the
`
`stock market and benefit financially from the IPRs. Stock price manipulation is
`
`well beyond the intended scope of an IPR proceeding,” citing to 35 U.S.C. 311(b).
`
`Motion at 4, 5. However, PO offers no evidence of any “stock price manipulation”
`
`or “stock market manipulation.” PO is misguidedly equating taking a short
`
`position with manipulating stock markets and stock prices as a matter of personal
`
`opinion, not misconduct as delineated in 37 C.F.R. § 42.12(a).
`
`“Manipulation” in the context of the stock market or stock prices is a term of
`
`art. The SEC defines manipulation as “intentional conduct designed to deceive
`
`
`
`5
`
`

`
`investors by controlling or artificially affecting the market for a security” and
`
`further states that “[t]hose who engage in manipulation are subject to various civil
`
`and criminal sanctions.” Ex. 1028. PO is essentially claiming that the Petitioner is
`
`engaging in criminal activity, a gross misrepresentation of the facts and a frivolous
`
`argument at best. Given the public nature of these cases, PO’s unsupported
`
`accusations seem designed to harass Petitioner and score points in the court of
`
`public opinion. PO rests its Motion on the contention that, depending upon who
`
`does it, the filing of a petition may itself “accomplish a purpose for which [the IPR
`
`process] is not designed.” Yet the Rules of Practice for Trials Before the Patent
`
`Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board
`
`Decisions Final Rule, 77 Fed. Reg. 48,612, 48,622, 48,637 (Aug. 14, 2012) states
`
`that “the purpose of the AIA and this final rule is to establish a more efficient and
`
`streamlined patent system that will improve patent quality and limit unnecessary
`
`and counterproductive litigation costs.” FR at 48612. It is beyond dispute that if the
`
`Board actually decides to institute a trial based on Petitioner’s evidence, then those
`
`Petitions will have improved patent quality regardless of the motivations for doing
`
`so. In any event, “[i]t is beyond dispute that the public interest is a prime interest
`
`in any patent proceeding.” Mobay Chemical Co. v. Hudson Foam Plastics Corp. et
`
`al, 277 F. Supp. 413, 419 (S.D.N.Y. 1967) (citing Precision Instrument Mfg. Co. v.
`
`Auto. Maint. Mach. Co., 324 U.S. 806, 816 (U.S. 1945)).
`
`
`
`6
`
`

`
`Petitioner has challenged the validity of US 8,399,514 and of US 8,759,393
`
`in accordance with law. Its petitions will improve patent quality by eliminating
`
`unpatentable claims. PO would have the Board believe that using inter partes
`
`review while having an economic interest in the outcome is shameful, a misuse of
`
`the process, and not the purpose for which this proceeding was designed. There is
`
`no legal basis for that contention. It is nothing but propaganda, by a company
`
`which fears that business as usual—where generic drug companies settle with the
`
`brands—no longer applies because PO knows that Petitioner is not interested in,
`
`nor will it accept, any settlement short of a final ruling by the PTAB on the merits.
`
`
`
`PO asserts, “Petitioner had an ulterior purpose or motive in filing the
`
`petitions” and “the IPRs are being used in an attempt to secure some collateral
`
`advantage not properly included in IPR proceedings.” Motion at 4. PO's vague
`
`speculation about an attempt to secure “some” collateral advantage not properly
`
`included in IPR proceedings actually makes Petitioner’s point. It shows that no
`
`other “use” of the IPR process has been made in this proceeding, because if there
`
`had been, the PO could at least identify it.
`
`Unable to cite any fact, statute, rule, or case which supports PO’s contention
`
`of abuse of process, PO has instead quoted sources that are irrelevant and at times
`
`misleading. PO quotes the Restatement (Second) of Torts (Ex. 2004) that “Abuse
`
`of process is the use of a legal process primarily to accomplish a purpose for
`
`
`
`7
`
`

`
`which it is not designed,” (emphasis added) without acknowledging the next page
`
`in the same exhibit which explains the term “primarily” means “there is no action
`
`for abuse of process when the process is used for the purpose for which it is
`
`intended, but there is…an ulterior purpose of benefit to the defendant.” Ex. 2004,
`
`page 4. Petitioner stands by the merits of its petitions. As the district court for the
`
`District of Columbia explained with respect to abuse of process claims: “Filing a
`
`lawsuit with the incidental motive to inflict harm on the plaintiff does not arise to
`
`abuse of process." See, e.g., Rogers v. Johnson-Norman, 466 F. Supp. 2d 162, 175
`
`(D.D.C. 2006) (holding that "incidental motive of spite or an ulterior purpose of
`
`benefit to the defendant" does not give rise to abuse-of-process claim); Harrison v.
`
`Howard Univ., 846 F. Supp. 1, 3 (D.D.C. 1993) (dismissing abuse-of-process
`
`claim that merely alleged ulterior motive); Morowitz v. Marvel, 423 A.2d 196,
`
`198-199 (D.C. 1980) holding that "[w]ithout more, appellants' proffer that appellee
`
`filed the counterclaim with the ulterior motive of coercing settlement, is
`
`deficient").” Nader v. Democratic Nat'l Comm., 555 F. Supp. 2d 137, 160 (D.D.C.
`
`2008). No abuse attributable to lawful short selling is evident under this standard.
`
`The Petitioner has filed Petitions challenging the patentability of US 8,759,393 and
`
`US 8,399,514, and is seeking a merit-based review of these patents. This is exactly
`
`what the IPR process "was designed to accomplish."
`
`
`
`8
`
`

`
`
`
`The PO’s cite to Lader v. Benkowitz, 188 Misc. 906, 907, 66 N.Y.S.2d 713,
`
`715 (Sup. Ct. 1946) (Ex. 2006) is not availing. This NY State case concerns a
`
`cause of action for abuse of process in an arrest on disorderly conduct charges. As
`
`such it is not applicable or even helpful to PO’s assertion that “In addition, the
`
`documents will provide more particular information supporting Biogen’s
`
`contention that the IPRs are being used in an attempt to secure some collateral
`
`advantage not properly included in IPR proceedings.” Motion at 4.
`
`
`
`In conclusion, PO’s contention in the context of the first Garmin factor, that
`
`Petitioner is “taking short positions against pharmaceutical companies” indicates
`
`abuse of process and improper use of the IPR proceeding lacks any legal basis.
`
`IV. Knowledge of “taking short positions against pharmaceutical
`
`companies” is already in the PO’s possession and nothing beyond mere
`
`speculation supports the PO’s contention that information about an abuse of
`
`process or improper use of this proceeding exist to be uncovered
`
`
`
`PO admits that it is already has information showing “the primary purpose
`
`of the Hayman Credes Master Fund, L.P. is to generate superior risk-adjusted
`
`returns through long or short positions with regard to selected companies,
`
`primarily in the pharmaceuticals sector.” Motion at 2, 3. PO also admits that the
`
`useful information it seeks to uncover is simply “more detailed information about
`
`[the Petitioner’s real parties in interest] purpose, which is to take short positions on
`
`
`
`9
`
`

`
`companies in the pharmaceutical sector, such as Biogen” (Motion at 4), without
`
`citing any legal support for asserting “the offering documents will be useful in
`
`establishing the first prong of an abuse of process claim.” Id. Seeking “more
`
`detailed information” about the Petitioner’s motivations, while knowing that its
`
`purpose is “to take short positions on companies in the pharmaceutical sector, such
`
`as Biogen” amounts to a mere speculation that something useful will be found.
`
`Petitioner fails to show how “more detailed” information about “tak[ing] short
`
`positions on companies in the pharmaceutical sector, such as Biogen” is useful or
`
`favorable in substantive value to its contention of abuse of process and improper
`
`use of this proceeding. PO conflates a petitioner’s motivation for filing, which is
`
`not relevant under any legal standard, with “some” future hypothetical activity
`
`after a trial is instituted.
`
`V. Any person who is not the owner of a patent may file a petition to
`
`institute an inter partes review of a patent
`
`
`
`35 U.S.C. 311(a) grants standing to this Petitioner because “[s]ubject to the
`
`provisions of this chapter, a person who is not the owner of a patent may file with
`
`the Office a petition to institute an inter partes review of the patent.” This should
`
`
`
`10
`
`

`
`be the end of the inquiry.3 The Petitioner’s underlying motivations for filing are
`
`simply not relevant. Nothing PO cites or could cite even hints that filing
`
`motivations are relevant. PO’s notion that it is improper for Petitioner to have an
`
`economic interest in the outcome is disingenuous. PO would have the Board
`
`believe that when companies in the technology, biologics and pharmaceutical
`
`industries file IPRs there are motivations other than an economic interest in the
`
`outcome, as if generic drug companies only file IPR petitions to promote social
`
`welfare. Petitioner admits that it does have an economic interest in filing and
`
`pursuing these petitions to final decisions. The issue is whether its petitions have
`
`merit under 35 USC 314(a).
`
`PO cites to Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., IPR2013-
`
`00324, Paper 19 at 4, for the proposition that “as IPR institution is discretionary,
`
`not mandatory, facts supporting an abuse of process or other improper use of the
`
`proceedings would be relevant to the Board’s discretionary decision of whether or
`
`not to institute IPRs.” Motion at 5. However, the IPR2013-00324 decision that PO
`
`cites to is a decision “Denying Institution of Inter Partes Review” that is based on
`
`35 USC §§ 314(a), 325(d), and 37 C.F.R. § 42.108(b), not an abuse of process or
`
`other improper use of the proceedings. Intelligent Bio-Sys., Inc., Paper 19 at 7.
`
`
`3 This “any person” standard is consistent with US proceedings that pre-date the
`America Invents Act. Compare CBM (standing requirement) with IPR (no standing
`requirement).
`
`
`
`11
`
`

`
`PO’s inquiries into the Petitioner’s motivation for filing IPR’s and its
`
`business model are irrelevant to the standard for instituting an inter partes review
`
`as set forth in 35 U.S.C. § 314(a): “THRESHOLD.--The Director may not
`
`authorize an inter partes review to be instituted unless the Director determines that
`
`the information presented in the petition filed under section 311 and any response
`
`filed under section 313 shows that there is a reasonable likelihood that the
`
`petitioner would prevail with respect to at least 1 of the claims challenged in the
`
`petition.”
`
`
`
`In IPR2014-00674, the patent owner sought to file a motion for sanctions,
`
`arguing that the purpose of the Petitioner’s business model was to circumvent the
`
`statutory bar created by 35 U.S.C § 315(b). Iron Dome LLC v. Chinook Licensing
`
`DE LLC, IPR2014-00674, Paper 9 at 1. The Board denied this request because the
`
`patent owner had failed to cite any conduct by Petitioner that constituted
`
`misconduct as delineated in 37 C.F.R. § 42.12(a). Id.
`
`VI. PO’s contention of abuse of process and improper use of the proceeding
`is not applicable to the preliminary phase of inter partes review proceedings  
`In the Director’s February 9, 2012 Notice of Proposed Rule-Making (77 Fed.
`
`
`
`Reg. 6879, 6882, February 9, 2012) the following definitions (among others) for
`
`Board proceedings under the AIA are proposed for Section 42.2: “The proposed
`
`definition of preliminary proceeding would provide that a preliminary proceeding
`
`begins with the filing of a petition for instituting a trial and ends with a written
`12
`
`
`
`

`
`decision as to whether a trial will be instituted. The proposed definition of
`
`proceeding would provide that a proceeding means a trial or preliminary
`
`proceeding. This proposed definition would encompass both the portion of the
`
`proceeding that occurs prior to institution of a trial and the trial itself. […] The
`
`proposed definition of trial would provide that a trial is a contested case instituted
`
`by the Board based upon a petition.”  
`
`In the proposed section on sanctions (42.12), the Director’s proposed
`
`rulemaking states at 6884: “Section 42.12: Proposed §42.12 would provide rules
`
`for sanctions in trial proceedings before the Board. 35 U.S.C. 316(a)(6), as
`
`amended, and 35 U.S.C. 326(a)(6) require that the Director prescribe sanctions for
`
`abuse of discovery, abuse of process, and any other improper use of the proceeding
`
`in inter partes review, post-grant review, and covered business method patent
`
`review proceedings.” 
`
`
`
`The August 14, 2012 Final Rules (77 Fed. Reg. 48612, 48616, August 14,
`
`2012) have the exact same language without the word proposed. “The definition of
`
`preliminary proceeding provides that a preliminary proceeding begins with the
`
`filing of a petition for instituting a trial and ends with a written decision as to
`
`whether a trial will be instituted.” “The definition of proceeding provides that a
`
`proceeding means a trial or preliminary proceeding. This proposed definition
`
`would encompass both the portion of the proceeding that occurs prior to institution
`
`
`
`13
`
`

`
`of a trial and the trial itself.” […] The definition of trial provides that a trial is a
`
`contested case instituted by the Board based upon a petition.” In the section on
`
`sanctions (42.12), the USPTO’s final rules state at 48618: “Section 42.12: Section
`
`42.12 provides for sanctions in trial proceedings before the Board. 35 U.S.C.
`
`316(a)(6), as amended, and 35 U.S.C. 326(a)(6) require that the Director prescribe
`
`sanctions for abuse of discovery, abuse of process, and any other improper use of
`
`the proceeding in inter partes review, post-grant review, and covered business
`
`method patent review proceedings.” Furthermore, in response to a public comment,
`
`the Director confirmed at 48627 that a trial is the part of the proceeding that starts
`
`after institution: “Comment 5: One comment suggested that the word ‘‘trial’’
`
`should be replaced with the word ‘‘proceeding.” Response: This comment is not
`
`adopted. The definitions of ‘‘trial’’ and ‘‘proceeding’’ as set forth in §42.2 are
`
`consistent with the AIA. As stated previously, a proceeding starts when a petitioner
`
`files a petition for instituting a trial. A trial is a part of the proceeding that starts
`
`when the Board issues a written decision to institute a review.”  
`
`
`
`In sum, the proposed and the adopted final rules indicate that the Director
`
`intended for the 42.12 sanctions to apply to the trial part of the inter partes review
`
`proceeding. Therefore, Patent Owner’s contentions about abuse of process and
`
`improper use of the proceeding are not applicable to the preliminary phase of inter
`
`partes review proceedings.  
`
`
`
`14
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`

`
`VII. Granting the Motion would exceed the scope of the Board’s lawful
`authority under the Administrative Procedure Act (“APA”).
`The USPTO is governed by the Administrative Procedure Act (“APA”), and
`
`
`
`its decisions are reviewed under the APA standard. Dickinson v. Zurko, 527 U.S.
`
`150, 152 (1999). The standard of review for abuse of discretion was explained in
`
`In re Sang-Su Lee, 277 F.3d 1338, 1342-43 (Fed. Cir. 2002). The CAFC stated,
`
`“Not only must an agency's decreed result be within the scope of its lawful
`
`authority, but the process by which it reaches that result must be logical and
`
`rational.” Granting the instant Motion would exceed the scope of the Board’s
`
`lawful authority because PO’s contentions of abuse of process and improper use of
`
`the proceeding have no legal basis.
`
`VIII.
`Conclusion
`Petitioner respectfully submits that the Board should deny the instant Motion.
`
`/RobertHahl#33,893/
`Robert W. Hahl, Reg. No. 33,893
`Lead Counsel for the Petitioner
`Tel: 1-703-415-0012 Ext. 103
`Email: rhahl@neifeld.com
`Backup Counsel for Petitioner
`Robert Mihail, Reg. No. 66,021
`Tel: 1-703-415-0012 Ext. 107
`Email: rmihail@neifeld.com
`
`
`
`
`
`
`
`15
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`

`
`42.6(e) CERTIFICATE OF SERVICE
`
`Agreements on Service: “Under 37 C.F.R. § 42.6(e), Patent Owner consents to
`electronic service by email at michael.flibbert@finnegan.com and
`maureen.queler@finnegan.com.” Patent Owner’s Mandatory Notice of 5/22/2015.
`
`
`I certify that this document was served or simultaneously is being served on each
`opposing party with the filing of this document. I certify that the following
`exhibits being filed along with this document, if any, have been or simultaneously
`are being served on each opposing party:
`
`
`Exhibit
`Number
`1028
`1029
`
`Description
`
`SEC definition of “Manipulation”
`“The cost of multiple sclerosis drugs in the
`US and the pharmaceutical industry”, American Academy of
`Neurology, 2015
`
`
`
`42.6(e)(4) (iii)(A) The date and manner of service:
`
`Date of Service: 7/3/2015
` 
`Manner of service: Email to: michael.flibbert@finnegan.com;
`maureen.queler@finnegan.com
`
`42.6(e)(4)(iii)(B) The name and address of every person served are:
`Lead Counsel for patent owner, telephone and email: Michael J. Flibbert (Reg.
`No. 33,234); Tel: 202.408.4493
`Backup Counsel for patent owner, telephone and email: Maureen D. Queler
`(Reg. No. 61,879); Tel: 202.408.4294
`Postal Address for lead and backup counsel for patent owner: Finnegan,
`Henderson, Farabow, Garrett & Dunner, LLP, 901 New York Avenue, NW,
`Washington, DC 20001.
`Fax Address for lead and backup counsel for patent owner: 202-408-4000
` 
`
`
`
`16
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`

`
`/RobertMihail/
`Robert Mihail, Reg. No. 66,021
`Back-up Counsel for the Petitioner
`Neifeld IP Law, PC
`4813-B Eisenhower Avenue
`Alexandria, VA 22304
`Tel: 1-703-415-0012 Ext. 107
`Fax: 1-703-415-0013
`Email: rmihail@neifeld.com
`
`
`
`17