IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`ARGENTUM PHARMACEUTICALS LLC, MYLAN PHARMACEUTICALS
`INC., BRECKENRIDGE PHARMACEUTICAL, INC., AND ALEMBIC
`PHARMACEUTICALS, LTD.,
`Petitioners,
`
`v.
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`RESEARCH CORPORATION TECHNOLOGIES, INC.,
`Patent Owner.
`
`Case No. IPR2016-002041
`Patent No. RE 38,551
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`PATENT OWNER’S MOTION FOR OBSERVATIONS
`REGARDING THE CROSS-EXAMINATION
`TESTIMONY OF DEFOREST MCDUFF, Ph.D.
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`1 Case IPR2016-01101, Case IPR2016-01242, and Case IPR2016-01245 have been
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`joined with this proceeding.
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`
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`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.
`
`Case No. IPR2016-002041
`Patent No. RE 38,551
`
`PATENT OWNER’S MOTION FOR OBSERVATIONS
`REGARDING THE CROSS-EXAMINATION
`TESTIMONY OF DEFOREST MCDUFF, Ph.D.
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`
`
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`1 Case IPR2016-01101, Case IPR2016-01242, and Case IPR2016-01245 have been
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`joined with this proceeding.
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`I.
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`IPR2016-00204
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`Introduction
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`In accordance with: (i) The Trial Practice Guide, Federal Register Vol. 77,
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`No. 157, 48756 at 48767–68 and (ii) the Scheduling Order (Paper No. 20) as
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`modified by the Joint Notice of Stipulation Concerning Schedule (Paper No. 50),
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`Patent Owner hereby submits the instant Motion for Observations Regarding the
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`Cross-Examination Testimony of DeForest McDuff, Ph.D., taken on December 8,
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`2016. The transcript of this testimony has been filed as Exhibit 2193.
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`
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`Patent Owner requests that the Board enter the instant Motion and consider
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`the observations. Observations 1–8 below pertain to the deposition testimony of
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`DeForest McDuff, obtained on December 8, 2016, after Patent Owner filed its last
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`substantive paper. In addition, and in accordance with the Trial Guide, each of
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`observations 1–8 below provides in a single paragraph a concise statement of the
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`relevance of the precisely identified testimony to a precisely identified argument.
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`II. Observations
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`
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`1.
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`In Ex. 2193 at 94:6–95:14, Dr. McDuff testified that “I’ve not sought
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`to cite court opinions on [economic profit as a factor in commercial success], yet it
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`is central to what I understand the purpose of commercial success to be,” and could
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`not identify any court opinion specifically adopting economic profit as he defines it
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`as a factor in commercial success, despite citing to court opinions on other aspects
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`of commercial success. See Ex. 1086 ¶32 (discussing commercial success in the
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`1
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`IPR2016-00204
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`presence of a blocking patent, citing to Ex. 1187 in footnote 33); Ex. 2193 at
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`95:16-96:2 (Dr. McDuff confirming that Ex. 1187 is a court opinion). This
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`testimony is relevant to the Petitioners’ argument that “there’s no evidence of
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`profitability.” Reply (Paper 52) at 25. This testimony is relevant because it calls
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`into question the acceptance by the courts of Dr. McDuff’s “economic profit” as a
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`factor for commercial success, and hence its probative value.
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`
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`2.
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`In Ex. 2193 at 113:19–115:3, Dr. McDuff testified that paragraph 26
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`of his declaration contains a “typographical error,” insofar as it states that “the net
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`present value of Vimpat sales discounted back to product launch in 2009 . . . is less
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`than $1.2 million,” see Ex. 1086 ¶26, when it should read “less than $1.2 billion.”
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`This testimony is relevant because it corrects a thousand-fold error in Dr.
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`McDuff’s declaration.
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`3.
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`In Ex. 2193 at 61:22–63:6, Dr. McDuff testified that Vimpat had
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`accrued $2.4 billion in net sales from its launch in 2009 through the first six
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`months of 2016, and he also testified that “I wouldn’t seek to characterize
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`[Vimpat’s sales] as significant or insignificant.” This testimony is relevant to
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`Petitioners’ claims that “Patent Owner fails to identify any profits from the sale of
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`Vimpat.” Reply at 25. This testimony is relevant because it is inconsistent with the
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`findings of the District Court that “Vimpat has generated significant sales totaling
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`2
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`IPR2016-00204
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`$1.6 billion in the U.S. since its launch in May 2009 through February 2015.” Ex.
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`2193 at 63:8–64:3; see also Ex. 2182 ¶208.
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`
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`4.
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`In Ex. 2193 at 66:21–67:21, Dr. McDuff testified that “I agree that the
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`market is more competitive than it would be if generic competition did not exist,”
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`but he also testified that “I don’t have an opinion” on whether the generic
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`competition in the AED marketplace makes it more “difficult” for Vimpat to earn
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`prescriptions. This testimony is relevant because in previous testimony Dr. McDuff
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`agreed that “the low cost of generic products and generic competition in the AED
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`marketplace creates a more competitive marketplace and makes it more difficult
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`for Vimpat to earn prescriptions.” Ex. 2193 at 68:1–70:9; see also Ex. 2196
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`(McDuff Ex. 2) at 1083:10-14.
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`
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`5.
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`In Ex. 2193 at 75:16–76:11, Dr. McDuff testified that the time period
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`from approval until the generation of the branded AED sales reported in ¶23 of his
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`declaration for Neurontin “appears to be 10 or 11 years,” for Lamictal [sic] and
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`Keppra is “eight years,” and for Topamax is “twelve years.” This testimony is
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`relevant to Petitioners’ argument that “the raw sales figures fall short of other
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`branded AEDs since 1990.” Reply at 25. This testimony is relevant because the
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`VIMPAT® drug product, a commercial embodiment of the invention claimed in the
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`’551 patent (Patent Owner Response (Paper 35) at 1), was first launched for sale in
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`3
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`IPR2016-00204
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`the United Sates in 2009 (Ex. 1086 ¶11), and has not yet been in the marketplace
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`for eight years, much less 10 to 12 years.
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`
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`6.
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`In Ex. 2193 at 117:14-21, Dr. McDuff testified that his calculation of
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`present value would be different numerically if he had done it through the end of
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`2014 or if he had done it through the end of 2015. At 122:2-22, Dr. McDuff
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`testified that “it could be 10 years before you earn a single revenue or a single
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`profit” and that “the numerics do depend on timing to some degree.” This
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`testimony is relevant to the arguments in Petitioners’ Reply that “[t]otal Vimpat
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`sales may not even exceed costs incurred to date; thus, there may be no profit.” See
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`Reply at 25. This testimony is relevant because it undermines the probative value
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`of Dr. McDuff’s calculations, see Ex. 1186 B-3, and his “economic profit”
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`approach to commercial success.
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`7.
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`In Ex. 2193 at 119:6-13 and 120:18–121:7, Dr. McDuff testified that
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`despite having “considered projections of pharmaceutical products in the past,” he
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`did not “do any projection of sales based upon the net sales data [he] already
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`[had].” This testimony is relevant to the arguments in Petitioners’ Reply that
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`“[t]otal Vimpat sales may not even exceed costs incurred to date; thus, there may
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`be no profit.” See Reply at 25. This testimony is relevant because it undermines the
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`probative value of Dr. McDuff’s calculations, see Ex. 1158 B-3, and his “economic
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`profit” approach to commercial success.
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`4
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`IPR2016—00204
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`8.
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`In Ex. 2193 at
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`l30:l4—-l3l:12, Dr. McDuff testified that he has no
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`reason to disagree with the Court’s finding (Ex. 2182 11219) that there are millions
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`of compounds covered by the claims of the ’30l and ’729 patents and no
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`compounds covered by those patents other than lacosamide has achieved any
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`success as an approved pharmaceutical. This testimony is relevant to Petitioners’
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`argument that “[a]ny presumed success lies with the ‘30l/’729 patents.” Reply at
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`23. This testimony is relevant because the successful compound is lacosamide, the
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`one that is explicitly claimed in the ’55l patent.
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`
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`Date: December 22 2016 Respectfully submitted,
`
` drea G. Reister
`
`Registration No.: 36,253
`
`Jennifer L. Robbins
`
`Registration No.: 61,163
`
`Enrique D. Longton
`
`Registration No.: 47,304
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`COVINGTON & BURLING LLP
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`One CityCenter, 850 Tenth Street, NW
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`Washington, DC 20001
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`(202) 662-6000
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`Attorney for Patent Owner
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`
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6,
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`I hereby certify that on this 22nd day of
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`December 2016,
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`the foregoing Patent Owner’s Motion for Observations
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`Regarding the Cross-Examination Testimony of DeForest McDuff, Ph.D. was
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`served by electronic mail, by agreement of the parties, on the following counsel of
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`record for Petitioners.
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`PETITIONER (IPR2016—00204)
`Matthew J. Dowd (mj dowd@dowdpl1c.com)
`DOWD PLLC
`
`William G. Jenks (wjenks@jenksiplaw.com)
`IENKS IP LAW
`
`PETITIONER (IPR2016—01 101)
`Steven W. Parmelee (sparmelee@wsgr.com)
`Michael T. Rosato (mrosato@wsgr.com)
`Jad A. Mills (jrnills@wsgr.com)
`WILSON SONSIN1 GOODRICH & ROSATI
`
`PETITIONER (IPR2016-01242)
`Matthew L. F edowitz (rnfedowitz@merchantgould.com)
`Daniel R. Evans (devans@merchantgould.com)
`MERCHANT & GOULD P.C.
`
`PETITIONER (IPR2016—01245)
`Gary J . Speier (gspeier@carlsoncaspers.com)
`Jeffer Ali (jali@.carlsoncaspers.com)
`CARLSON, CASPERS, VANDENBURGH, LINDQUIST & SCHUMAN, P.A.
`
`Date: December 22 2016
`
`
`
`enni er L. Robbins, Esq.
`Reg. No.: 61,163
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