UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_____________________________
`
`ARGENTUM PHARMACEUTICALS LLC, MYLAN PHARMACEUTICALS
`INC., BRECKENRIDGE PHARMACEUTICAL, INC., AND ALEMBIC
`PHARMACEUTICALS, LTD.,
`Petitioners,
`
`v.
`
`RESEARCH CORPORATION TECHNOLOGIES, INC.,
`Patent Owner.
`
`_____________________________
`
`IPR2016-002041
`Patent RE 38,551
`_____________________________
`
`
`
`PETITIONERS’ RESPONSE TO MOTION FOR OBSERVATIONS
`REGARDING THE CROSS-EXAMINATION OF DEFOREST MCDUFF
`
`
`
`1 Case IPR2016-01101, Case IPR2016-01242, and Case IPR2016-01245 have been
`
`joined with this proceeding.
`
`
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_____________________________
`
`ARGENTUM PHARMACEUTICALS LLC, MYLAN PHARMACEUTICALS
`INC., BRECKENRIDGE PHARMACEUTICAL, INC., AND ALEMBIC
`PHARMACEUTICALS, LTD.,
`Petitioners,
`
`v.
`
`RESEARCH CORPORATION TECHNOLOGIES, INC.,
`Patent Owner.
`
`_____________________________
`
`IPR2016-002041
`Patent RE 38,551
`_____________________________
`
`
`
`PETITIONERS’ RESPONSE TO MOTION FOR OBSERVATIONS
`REGARDING THE CROSS-EXAMINATION OF DEFOREST MCDUFF
`
`
`
`1 Case IPR2016-01101, Case IPR2016-01242, and Case IPR2016-01245 have been
`
`joined with this proceeding.
`
`
`
`Petitioners file this Response to Patent Owner’s Motion for Observations on
`
`Cross-examination of DeForest McDuff (Paper 68) in accordance with Due Date 5
`
`(Papers 20, 50). Petitioners respectfully disagree that Patent Owner’s Observations
`
`are relevant or demonstrate inconsistency for the reasons asserted by Patent Owner.
`
`Furthermore, several of Patent Owner’s Observations are argumentative.
`
`Petitioners respectfully reserve their right to present such argument during the oral
`
`hearing.
`
`Observation #1: In Exhibit 2193 at 94:6-18, Dr. McDuff testified: “I’m not
`
`an attorney and I’ve not sought to cite court opinions on that topic, yet it is central
`
`to what I understand the purpose of commercial success to be. The purpose of
`
`commercial success is about economic incentives to bring a product to market
`
`sooner. And as an economist, I relate that notion to economic profit and a profit
`
`opportunity or commercial opportunity.” In Exhibit 2193 at 94:20-95:14, Dr.
`
`McDuff also testified: “[T]he purpose of commercial success, as the courts have
`
`articulated that purpose, as I understand it, having read cases and working in this
`
`area and having discussions with counsel, my interpretation of that as an economist
`
`is that they are discussing the notion of economic profit and economic incentives
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`for development.” In Ex.2193 at 113:10-18, Dr. McDuff testified: “Dr. Vellturo
`
`did not analyze [actual operating profit margin for Vimpat] and UCB did not
`
`provide it. I think it’s unfortunate and I think it’s a significant flaw in Dr.
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`-1-
`
`
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`Vellturo’s work to not consider the costs and profits of Vimpat.” (emphasis
`
`added).
`
`Observation #2: In Ex.2193, Dr. McDuff testified that Attachment B-3
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`“clarified” the single-character typo (114:2-4) in the text of the declaration, agreed
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`that the “corrected value to $1.2 billion correlates on Attachment B-3” (114:12-
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`16), and agreed that his conclusion regarding the lack of commercial success was
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`based on “the $1.2 billion number” (117:6-10).
`
`Observation #3: In Ex.2193 at 61:22-63:6, Dr. McDuff testified: “I
`
`wouldn't seek to characterize [$2.4 billion in net sales] as significant or
`
`insignificant. I think it naturally raises the question relative to what. So without
`
`that context, I think it's hard to provide a characterization of that one way or the
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`other.” In Ex.2193 at 65:3-9, Dr. McDuff testified that significance of sales
`
`depends on the relevant comparator, as one must ask, “Significant relative to
`
`what?” In Ex.2193 at 71:3-5, Dr. McDuff testified: “I would not describe
`
`Vimpat’s market share growth as substantial.” In Ex.1086, ¶22, Dr. McDuff
`
`testified: “Dr. Vellturo tabulates sales and prescriptions and declares them to be a
`
`“success” in some abstract, unexplained sense. However, the Vellturo Declaration
`
`fails to provide appropriate context to determine whether those sales are, in fact,
`
`successful or large enough to demonstrate a commercial profit opportunity.” In
`
`Ex.1086, ¶¶20-21, Dr. McDuff testified: “[A] number of AEDs are prescribed
`
`-2-
`
`
`
`significantly more often than Vimpat.” In Ex.1086, ¶¶23-27, Dr. McDuff listed
`
`several AEDs with commercial sales in a single year approximately the same or
`
`even larger than cumulative commercial sales of Vimpat from 2009 into 2016, and
`
`he testified that “the Vellturo Declaration[‘s] fail[ure] to consider profits of any
`
`sort” for Vimpat is “a significant shortcoming of his analysis and calls into
`
`question any conclusion of commercial success.”
`
`Observation #4: In Ex.2193 at 66:21-67:21, Dr. McDuff testified: “I agree
`
`that the market is more competitive than it would be if generic competition did not
`
`exist. I would need to think about ‘difficult.’ I don't have an opinion on that one
`
`way or the other sitting here.”
`
`Observation #5: Contrary to Patent Owner’s assertion, Ex.2193 at 75:16-
`
`76:11 does not include any question by Counsel for Patent Owner about the time
`
`period from FDA approval for which Dr. McDuff reported sales for Lamictal, and
`
`Lamictal is not mentioned in Dr. McDuff’s answers to Counsel’s questioning in the
`
`transcript. Patent Owner’s argument (Paper 68, ¶5) that cumulative Vimpat sales
`
`from 2009 into 2016 approach the single-year sales figures for Lamictal, Keppra,
`
`Neurontin, and Topamax (achieved after as little as eight years of marketing) does
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`not undermine Petitioners’ argument (Paper 52 at 25) that “Even the raw sales
`
`figures fall short of other branded AEDs since 1990.”
`
`-3-
`
`
`
`Observation #6: Patent Owner mischaracterizes Dr. McDuff’s testimony by
`
`suggesting that the potential 10-year wait from invention date to FDA approval
`
`date and the first commercial sales applies to Dr. McDuff’s testimony that the
`
`“numerics” of “cumulative present value” calculation depend on timing to some
`
`degree. Paper 68, ¶6. To the contrary, in Ex.2193 at 121:9-122:14, Dr. McDuff
`
`testified: “[H]ere I'm referring to the future relative to the time of the claimed
`
`invention. So if one is contemplating whether there are incentives to pursue a
`
`particular invention, one contemplates the fact that one will have to undergo
`
`significant development costs in bringing a product to market and then many years
`
`into the future, it could be 10 years [from the invention date] before you earn a
`
`single revenue or a single profit.” (emphases added). Dr. McDuff did not testify
`
`that the present value of cumulative net sales should be calculated only after 10
`
`years have passed since FDA approval, or any similar such implication. To the
`
`contrary, in Ex.2193 at 116:19-117:21, Dr. McDuff agreed that his calculations
`
`evaluated Vimpat’s sales “to date.” In Ex.2193 at 117:22-118:10, Dr. McDuff
`
`testified that he calculated net sales of Vimpat through June 2016 and was not
`
`aware of Dr. Vellturo providing sales data for sales that occurred after that date.
`
`Observation #7: In Ex.2193 at 116:19-117:21, Dr. McDuff agreed that his
`
`calculations evaluated Vimpat’s sales “to date.” In Ex.2193 at 117:22-118:10, Dr.
`
`McDuff testified that he calculated net sales of Vimpat through June 2016 and was
`
`-4-
`
`
`
`not aware of Dr. Vellturo providing sales data for sales that occurred after that
`
`date. In Ex.2193 at 119:15-120:1, Dr. McDuff testified with respect to “future”
`
`sales: “Well, those sales have not occurred yet. We don't know if they will occur. I
`
`don't know if costs of commercialization will ever be recouped. It's certainly not
`
`clear that they will be based on this analysis.” In Ex.2193 at 120:3-16, Dr.
`
`McDuff testified that his calculation of the cumulative present value of net Vimpat
`
`sales “does evaluate sales through the lifecycle of the product to date. We don't
`
`know how long the lifecycle of the product will be.…We don't know when generic
`
`entry will be allowed. So in the future, it's unclear when and to what extent Vimpat
`
`sales will continue.”
`
`Observation #8: In Ex.2193 at 130:14-131:12, Dr. McDuff testified that he
`
`could not independently confirm certain assertions regarding Ex.2182, ¶219.
`
`
`
`
`
`Date: January 6, 2017
`
`
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`Respectfully,
`
`
`
`
`
`/ Matthew J. Dowd/
`Matthew J. Dowd
`Reg. No. 47,534
`Dowd PLLC
`1717 Pennsylvania Avenue, NW
`Suite 1025
`Washington, D.C. 20006
`mjdowd@dowdpllc.com
`
`William G. Jenks
`Reg. No. 48,818
`Jenks IP Law
`1050 17th ST NW
`Suite 800
`
`-5-
`
`
`
`Washington, D.C. 20036
`Phone: (202) 412-7964
`wjenks@jenksiplaw.com
`
`Counsel for Argentum
`
`
`
`
`
`
`
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`-6-
`
`
`
`CERTIFICATE OF SERVICE
`37 CFR §42.6(e)
`
`I certify that, on January 6, 2016, this PETITIONERS’ RESPONSE TO
`MOTION FOR OBSERVATIONS REGARDING THE CROSS-EXAMINATION
`OF DEFOREST MCDUFF was served on Research Corporation Technologies at
`the following service electronic addresses:
`
`
`
`Andrea G. Reister
`
` areister@cov.com
`
`Jennifer L. Robbins
`
` jrobbins@cov.com
`
`Enrique D. Longton
`
`elongton@cov.com
`
`
`Dated: 6 January 2017
`
`
`
`
`
`/ Matthew J. Dowd /
`Matthew J. Dowd, Reg. No. 47,534
`
`
`
`-7-
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