Case No. IPR2016-00240
`Patent 7,772,209
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`NEPTUNE GENERICS, LLC,
`Petitioner,
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`v.
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`ELI LILLY AND COMPANY,
`Patent Owner.
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`
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`Case No. IPR2016-00240
`Patent No. 7,772,209
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`PATENT OWNER’S PRELIMINARY RESPONSE
`UNDER 35 U.S.C. § 313 AND 37 C.F.R. § 42.107
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`Patent 7,772,209
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`
`
`NEPTUNE GENERICS, LLC,
`Petitioner,
`
`v.
`
`ELI LILLY AND COMPANY,
`Patent Owner.
`
`
`
`Case No. IPR2016-00240
`Patent No. 7,772,209
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`PATENT OWNER’S PRELIMINARY RESPONSE
`UNDER 35 U.S.C. § 313 AND 37 C.F.R. § 42.107
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`Case No. IPR2016-00240
`Patent 7,772,209
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`TABLE OF CONTENTS
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`Page
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`BACKGROUND ............................................................................................. 3
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`I.
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`II. ARGUMENT ................................................................................................... 5
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`A.
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`Trial Should Not be Instituted on Claims 9, 10, 12, 14, 15, 18,
`19, and 21 .............................................................................................. 5
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`1.
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`2.
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`3.
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`4.
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`The District Court Already Rejected the Very Line of
`Arguments that Neptune Raises Here ......................................... 5
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`The Federal Circuit’s Decision on Appeal Will Virtually
`Certainly Precede Any Decision on the Merits by this
`Board ......................................................................................... 11
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`Trial Should Not Be Instituted on the Claims that Were
`Litigated to the District Court and Which the Federal
`Circuit Will Decide ................................................................... 12
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`Neptune’s Attempts to Distinguish the District Court’s
`Decision Are Without Merit ..................................................... 17
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`B.
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`Trial Should Not Be Instituted on Claims 1-8, 11, 13, 16, 17,
`20, and 22 ............................................................................................ 19
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`CONCLUSION ........................................................................................................ 20
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`TABLE OF AUTHORITIES
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`Case No. IPR2016-00240
`Patent 7,772,209
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`CASES
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`Page
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`AVX Corp., et al., v. Greatbatch Ltd., Case IPR2015-00710, 2015 WL
`4778529 (PTAB Aug. 12, 2005) ........................................................................... 7
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`Harmonic Inc. v. Avid Tech., Inc., --- F.3d ----, 2016 WL 798192
`(Fed. Cir. Mar. 1, 2016) ...................................................................................... 12
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`In re Cipro Cases I & II, 61 Cal. 4th 116 (Cal. 2015) ............................................. 18
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`In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008) ...................................................... 18
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`Nelson Prods., Inc. v. Bal Seal Eng’g, Inc., Case IPR2014-00573,
`2014 WL 4925284 (PTAB Sept. 29, 2014) .......................................................... 7
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`Valeo N. Am., Inc., et al., v. Magna Elecs., Inc., Case IPR2014-01204,
`2015 WL 410626 (PTAB Jan. 28, 2015) ............................................................ 12
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`OTHER AUTHORITIES
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`37 C.F.R. § 42.107(c) ................................................................................................. 7
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`157 Cong. Rec. S952 (daily ed. Feb. 28, 2011) ....................................................... 13
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`Fed. R. App. P. 31(a)(1) ........................................................................................... 12
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`H. R. Rep. No. 112-98, pt. 1 (2011) .................................................................. 13, 14
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`ii
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`Neptune’s Petition should be denied. Taken on its own terms, the Petition
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`Case IPR 2016-00240
`Patent 7,772,209
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`fails to establish a reasonable likelihood that Neptune would prevail as to at least
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`one claim of U.S. Patent No. 7,772,209 (the “’209 patent”). That alone is reason
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`enough not to institute trial.1
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`The Board should also decline to institute trial for an independent reason:
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`essentially the same arguments—if not the identical arguments—that Neptune
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`raises concerning the validity of the ’209 patent have already been litigated in—
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`and rejected by—a federal district court. That decision is currently before the
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`Federal Circuit, and the appellate court will in all likelihood issue an opinion many
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`months before any decision on the merits here, should trial be instituted.
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`Accordingly, allowing Neptune to challenge the obviousness of the ’209 patent—a
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`challenge filed well after the appeal proceedings were underway—is not only
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`inconsistent with the principles of judicial economy that underlie the America
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`Invents Act, but is the type of repeated attack on patent validity that Congress
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`1 Patent Owner Lilly does not in this Preliminary Response seek to address the
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`merits of Neptune’s Petition, nor, necessarily, does it provide the evidence that it
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`will rely on that shows that Neptune’s contentions are without merit. Should trial
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`be instituted, Lilly will address the merits and the nonobviousness of the ’209
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`patent in its Patent Owner Response.
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`cautioned against in creating the new post-issuance proceedings.
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`As noted above, the alleged obviousness of claims of the ’209 patent has
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`been litigated by Lilly and various generic companies (the “ANDA filers”) in the
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`Southern District of Indiana, Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., et
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`al., Case No. 1:10-cv-1376. Following trial, the District Court upheld the validity
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`of the asserted claims of the ’209 patent. In reaching its decision, the District
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`Court considered—and rejected—the very line of argument Neptune raises here.
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`And it was not a close case. The finding of nonobviousness did not turn on the
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`clear-and-convincing evidence burden of proof applicable in district court
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`litigation. Rather, the District Court held that none of the disputed claim elements,
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`let alone any asserted claim as a whole, was obvious over the prior art. In so
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`holding, the District Court decided as a factual matter what the prior art would
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`have taught the person of ordinary skill in the art (“POSA”), and concluded that the
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`POSA would have been motivated not to do what Neptune posits.
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`The decision of the District Court is currently on appeal to the Federal
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`Circuit. See Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., et al., No. 2015-
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`2067 (Fed. Cir.). Briefing should be completed in two weeks. Thus, the Federal
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`Circuit appeal is well ahead of this proceeding, and the appeals court will in all
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`likelihood issue its opinion many months in advance of any decision on the merits
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`here.
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`The question, accordingly, is should the Board expend its scarce time and
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`limited resources to analyze Neptune’s obviousness contentions on the merits,
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`when that issue for all practical purposes has been decided by the District Court
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`and will be decided by the Federal Circuit well in advance of any final written
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`decision by the Board? The answer is no. The issue has been fully litigated, and
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`the art and arguments in Neptune’s Petition raise no new issues of patentability.
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`While the Board is not bound to follow the decision of the federal courts, in view
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`of the schedule in the Federal Circuit, the duplicative nature of the allegations, and
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`the principles underlying enactment of the America Invents Act, the Board is fully
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`within its discretion to defer to the federal court proceedings and deny the Petition.
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`Accordingly, Lilly respectfully submits that the Board should not institute trial.
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`I.
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`BACKGROUND
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`Lilly is a global pharmaceutical company with its headquarters in
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`Indianapolis, Indiana. Lilly currently has over 41,000 employees worldwide, more
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`than 8,000 of whom are engaged in research and development. Ex. 2001 (Lilly
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`Form 10-K) at pgs. 16, 19. The patent at issue, the ’209 patent, covers the use of
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`Lilly’s ALIMTA® product, a cancer chemotherapy agent. ALIMTA® is approved
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`in the United States for treatment of the most common kind of lung cancer, and is
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`also the first and only FDA-approved agent for the treatment of mesothelioma, the
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`cancer caused by exposure to asbestos. See Ex. 2002 (ALIMTA® labeling) at 1.
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`Patent 7,772,209
`ALIMTA® is presently one of Lilly’s largest selling pharmaceuticals worldwide,
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`with annual sales in the United States in excess of $1 billion. Ex. 2001 at pg. 21.
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`To Lilly’s knowledge, Petitioner Neptune Generics has not applied to the
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`FDA to make a generic version of ALIMTA® or any other pharmaceutical
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`product. Unlike the challengers in the District Court litigation, it has not notified
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`Lilly that it is using the Hatch-Waxman regulatory scheme to seek approval for
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`such a product prior to the expiration of the ’209 patent. Rather, Neptune appears
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`to be an agent of Gerchen Keller Capital, a litigation investment firm that has a
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`history of challenging pharmaceutical patents. See Pet. at 1-2 (identifying Gerchen
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`Keller as a real party-in-interest); see also Neptune Generics, LLC v. Auspex
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`Pharms., Inc., Case IPR2015-01313, Paper No. 1 (May 29, 2015) at 5-6 (Gerchen
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`Keller Capital identified as a real party-in-interest); Neptune Generics, LLC v.
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`AstraZeneca PLC, Case IPR2016-00049, Paper No. 1 (Oct. 15, 2015) at 1-2
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`(same).
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`When Neptune first raised its allegations regarding the ’209 patent with
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`Lilly, it indicated a willingness to forget all about them and not challenge the ’209
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`patent if Lilly provided Neptune with some sort of consideration in return. Lilly
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`refused to submit to such a shakedown, and so here we are.
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`Patent 7,772,209
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`II. ARGUMENT
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`The trial in the District Court directly addressed the nonobviousness of
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`claims 9, 10, 12, 14, 15, 18, 19, and 21 (“the Asserted Claims”). The reasoning
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`that the Court employed, however, equally mandates the rejection of obviousness
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`challenges to all of the claims of the ’209 patent, even those that the Court did not
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`specifically address and which therefore the Federal Circuit will not directly pass
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`upon. Accordingly, the Board should deny Neptune’s Petition in its entirety.
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`A. Trial Should Not be Instituted on Claims 9, 10, 12, 14, 15, 18, 19,
`and 21
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`1.
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`The District Court Already Rejected the Very Line of
`Arguments that Neptune Raises Here
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`Neptune’s obviousness arguments boil down to the following: the POSA
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`would have understood that there was a correlation between elevated homocysteine
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`levels and pemetrexed toxicity, and therefore would have pretreated a patient
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`receiving pemetrexed with folic acid and vitamin B12 in order to reduce
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`pemetrexed toxicity. For example, with respect to claim 12, Neptune argues that
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`Rusthoven (Ex. 1011)2 teaches that “dietary supplementation with folic acid may
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`improve the therapeutic index [of pemetrexed] by reducing toxicity in mice.” Pet.
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`2 Rusthoven was TX 78 in the District Court. Ex. 2006 (Joint Trial Exhibit List) at
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`pg. 8.
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`Patent 7,772,209
`at 30. Neptune also asserts that the prior art, including EP ’005 (Ex. 1010), 3
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`teaches that (a) both cancer and the use of another antifolate (methotrexate) can
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`elevate homocysteine levels, (b) elevated homocysteine levels can be harmful, and
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`(c) administration of folic acid and vitamin B12 can normalize homocysteine
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`levels. Id. at 31. Accordingly, Neptune argues, the POSA would have been
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`motivated to pretreat a patient receiving pemetrexed with folic acid and vitamin
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`B12 in order to reduce pemetrexed toxicity. Id. at 31, 34-35. Neptune raises
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`similar arguments with respect to claims 9, 10, 14, 15, 18, 19, and 21. Id. at 38-48.
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`Neptune also alleges that evidence of unexpected properties, failure of others, and
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`skepticism presented to the District Court do not support nonobviousness. Id. at
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`50-55 & n.5.
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`However, substantially the same if not the identical arguments were litigated
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`in the District Court. For example, the ANDA filers argued that a reference by
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`Worzalla (TX 384, also Ex. 1005)—a reference which, unlike the passing
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`reference in Rusthoven, provides data concerning folic acid supplementation in
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`mice—suggested that folic acid supplementation in mice treated with pemetrexed
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`3 EP ’005 was identified as TX 10 and as TX 1312 in the District Court, although it
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`was not admitted into evidence at trial. Ex. 2005 (ANDA filers’ Trial Brief) at pg.
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`9; Ex. 2006 at pg. 21.
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`was able to provide for “greater therapeutic effects.” Ex. 2003 (ANDA filers’
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`Post-Trial Brief) at pg. 20.4 The ANDA filers further alleged that the POSA would
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`have understood that there was a relationship between elevated homocysteine
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`levels and pemetrexed-induced toxicity. Id. at pg. 22. Accordingly, the ANDA
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`filers asserted that based on “the association between elevated homocysteine and
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`low levels of both folic acid and vitamin B12, a POSA would have been motivated
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`to administer vitamin B12 pretreatment along with folic acid before starting a
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`regimen of pemetrexed therapy.” Id. at pgs. 27-28; see also id. at pg. 27
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`(proposing that “any functional deficiency in either B12 or folate will result in . . .
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`4 Any testimony contained in Lilly’s or the ANDA filers’ post-trial briefs, or in
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`trial transcripts cited below, is not new testimonial evidence within the meaning of
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`37 C.F.R. § 42.107(c), as it was elicited for purposes of the District Court case
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`years before the Petition was filed. See AVX Corp., et al., v. Greatbatch Ltd., Case
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`IPR2015-00710, 2015 WL 4778529 (PTAB Aug. 12, 2005) at *6, n.4; Nelson
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`Prods., Inc. v. Bal Seal Eng’g, Inc., Case IPR2014-00573, 2014 WL 4925284
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`(PTAB Sept. 29, 2014) at *5, n.2. Moreover, Lilly in this Patent Owner
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`Preliminary Response is relying on these materials for purposes of establishing the
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`extent to which the same issues were litigated in the District Court, not for
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`purposes of addressing Neptune’s arguments on the merits.
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`[an] increase in the plasma level of homocysteine”). Finally, the ANDA filers
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`asserted that Lilly’s proffered evidence of secondary considerations did not support
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`patentability. Id. at pgs. 50-57.
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`The District Court thoroughly rejected these arguments and upheld the
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`validity of the Asserted Claims. Citing the Worzalla reference, as well as
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`references which disclosed a correlation between pemetrexed-induced toxicity and
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`elevated homocysteine levels (the Niyikiza abstracts), the District Court concluded
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`that neither folic acid pretreatment nor vitamin B12 pretreatment would have been
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`obvious to the POSA. Ex. 1027 at 10-14, 16-19. In fact, the District Court
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`specifically acknowledged that the ANDA filers had asserted, just as Neptune does
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`here, that the prior art “would have motivated a POSA to add folic acid
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`pretreatment to pemetrexed in order to reduce toxicity” and that “the association
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`between elevated homocysteine and low levels of both folic acid and vitamin B12
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`would have motivated a POSA to administer B12 pretreatment along with folic
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`acid before starting pemetrexed therapy.” Id. at 10-11, 16. The Court, however,
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`concluded that the prior art did not suggest the invention claimed in the Asserted
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`Claims, and upheld the validity of the ’209 patent. Id. at 9-24.
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`Despite Neptune’s suggestion to the contrary, see Pet. at 48, Rusthoven was
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`the subject of significant testimony and briefing before the District Court. Lilly’s
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`expert medical oncologist discussed Rusthoven on multiple occasions during his
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`testimony. See, e.g., Ex. 2007 (Trial Transcript Day 6) at 1029:3-1034:17
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`(discussing TX 78); Ex. 2011 (Trial Transcript Day 7) at 1225:7-1231:16, 1327:7-
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`1329:12, 1347:10-1348:4. Indeed, Lilly’s expert even testified regarding the
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`statement in Rusthoven concerning folic acid supplementation in mice, i.e., the
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`very statement that Neptune relies on in its Petition. Pet. at 30; see also Ex. 2011
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`at 1230:6-1231:13, 1328:21-1329:12. Rusthoven was also discussed in both
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`Lilly’s and the ANDA filers’ post-trial briefs. Ex. 2004 (Lilly’s Post-Trial Brief)
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`at pgs. 12, 24, 25; Ex. 2003 at pgs. 17, 20, 21, 31, 35. Rusthoven was even cited in
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`the District Court’s opinion, albeit in the context of Section 112 issues. Ex. 1027
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`at 32. Thus, Rusthoven does not present anything new over the arguments that
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`were litigated in the District Court.
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`EP ’005 was not cited in the District Court’s opinion. However, the
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`argument that Neptune seeks to glean from EP ’005—that the POSA would use
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`folic acid and vitamin B12 pretreatment to lower homocysteine levels—was
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`clearly before the District Court. Indeed, the ANDA filers specifically argued in
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`their Post-Trial Brief—citing to the testimony of multiple witnesses, and referring
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`to multiple references—that “[t]he prior art teaches lowering elevated
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`homocysteine specifically through the administration of folic acid with vitamin
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`B12.” Ex. 2003 at pg. 27. Moreover, the ANDA filers had cited to EP ’005 to
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`support their obviousness allegations, but ended up abandoning their reliance on
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`Patent 7,772,209
`the reference. The ANDA filers referred to EP ’005 in their Trial Brief, see Ex.
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`2005 at pgs. 9, 32, and the reference was included on the Joint Trial Exhibit List,
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`Ex. 2006 at pg. 21 (TX 1312). Lilly is not privy to exactly why the ANDA filers—
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`who had every incentive to make the best arguments they could to try to invalidate
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`a patent protecting a product with billions of dollars in sales—did not offer EP
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`’005 into evidence at trial. Given that they clearly knew about it and had already
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`cited it to the District Court, it is certainly reasonable to infer that the ANDA filers
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`believed there was stronger evidence than EP ’005 to support their obviousness
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`allegations. But the fact that EP ’005 was not cited in the District Court’s opinion
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`does not mean that it was some heretofore unknown reference which is being
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`raised for the first time in this proceeding. It is nothing new.
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`It is also worth noting that the framework in which Neptune presents its
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`obviousness arguments is substantially the same as the one employed in the
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`District Court. On the issue of claim construction, Neptune proposes constructions
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`that, in its own words, are either the “same” as or “similar” to constructions that
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`were employed by the District Court. Compare Pet. at 13-14 with Ex. 1026 at 1-2
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`(the parties’ (i.e., including Teva’s) joint proposed constructions of
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`“methylmalonic acid lowering agent”; “an effective amount of pemetrexed
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`disodium”; and “an effective amount of folic acid and a methylmalonic acid
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`lowering agent”) and Ex. 1025 at 21 (construing patient to mean “a human
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`Patent 7,772,209
`undergoing medical treatment).5 Likewise, Neptune’s proposed definition of the
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`POSA is similar to the one adopted by the District Court. Compare Pet. at 23-24
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`with Ex. 1025 at 7-8.
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`2.
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`The Federal Circuit’s Decision on Appeal Will Virtually
`Certainly Precede Any Decision on the Merits by this Board
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`The decision of the District Court regarding the validity of the Asserted
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`Claims of the ’209 patent is currently on appeal to the Federal Circuit. See Eli
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`Lilly & Co. v. Teva Parenteral Medicines, Inc., et al., No. 2015-2067 (Fed. Cir.).
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`The appeal was docketed on September 25, 2015, about two months before
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`Neptune filed its Petition. Ex. 2008 (Notice of Docketing). Briefing is expected to
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`be completed by March 18, 2016, i.e., in two weeks. Ex. 2009 (Order Modifying
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`Briefing Schedule) at 2. If normal Federal Circuit practice is followed, oral
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`argument will occur in roughly June or July. See Ex. 2010 (Fed. Cir. Internal
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`Operating Procedures (Nov. 14, 2008)) IOP # 3, ¶ 1, at 11 (scheduling argument 6
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`5 Neptune incorrectly states that Teva proposed this construction for patient, Pet. at
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`13, when in reality it was Lilly who proposed it, Ex. 1025 at 9. In addition,
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`although Neptune proposes claim constructions for “Toxicity,” “Antifolate,” and
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`“antifolate drug,” Pet. at 14, those terms do not actually appear in the ’209 patent
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`claims.
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`weeks after the appendix is filed); Fed. R. App. P. 31(a)(1) (appendix is due 7 days
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`after filing reply brief). To Lilly’s understanding, the Federal Circuit’s goal is to
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`issue opinions within a few months of oral argument. An opinion could therefore
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`reasonably be expected by Fall 2016, and certainly before the end of this year.
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`By comparison, if the Board’s typical practice is followed, a decision
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`regarding institution would be issued in May or June 2016. If trial were instituted,
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`a decision on the merits would issue approximately one year later, i.e., mid-2017.
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`Thus, any decision on the merits would be expected to occur at least several
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`months after an expected opinion from the Federal Circuit on the validity of the
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`Asserted Claims of the ’209 patent. Indeed, even were the Federal Circuit
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`proceedings to take abnormally long, the Court of Appeals’ ruling would virtually
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`certainly precede any ruling by the Board.
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`3.
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`Trial Should Not Be Instituted on the Claims that Were
`Litigated to the District Court and Which the Federal
`Circuit Will Decide
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`Institution of trial in an inter partes review is a matter of discretion for the
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`Board. See Valeo N. Am., Inc., et al., v. Magna Elecs., Inc., Case IPR2014-01204,
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`2015 WL 410626, at *18 (PTAB Jan. 28, 2015) (35 U.S.C. § 314(a) “authoriz[es]
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`institution of inter partes review under particular circumstances, but [does] not
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`require[e] institution under any circumstances”); see also Harmonic Inc. v. Avid
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`Tech., Inc., --- F.3d ----, 2016 WL 798192, at *8 (Fed. Cir. Mar. 1, 2016) (“the
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`PTO is permitted, but never compelled, to institute an IPR proceeding”). And on
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`the present facts, the Board should deny institution of trial. The District Court has
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`already rejected essentially the same arguments—if not the identical arguments—
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`that Neptune has raised with respect to the Asserted Claims. That decision is on
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`appeal to the Federal Circuit. Given the factual posture, the decision of the Federal
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`Circuit—either affirming the District Court’s nonobviousness conclusion or
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`reversing it—will almost certainly be dispositive of the substance of the validity
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`arguments raised by Neptune.
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`A determination not to institute trial here is consistent with the principles of
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`judicial economy that underlie the America Invents Act. The legislative history of
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`the AIA indicates that one purpose of the new inter partes proceedings is to allow
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`for faster, streamlined proceedings to assess patent validity. See, e.g., H. Rep. No.
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`112-98, pt. 1, at 48 (2011) (“purpose” is to “provid[e] quick and cost effective
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`alternatives to litigation”); 157 Cong. Rec. S952 (daily ed. Feb. 28, 2011) (inter
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`partes review was intended to provide a “faster, less costly alternative[] to civil
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`litigation to challenge patents”) (statement of Sen. Chuck Grassley). That
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`understanding has led a number of district courts to grant requests to stay district
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`court actions once trial has been instituted in a co-pending inter partes review
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`proceeding. The other side of that same coin, however, is that when this Board’s
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`decision will substantially lag behind a definitive ruling on essentially the same
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`issues by the Court of Appeals, it is appropriate for this Board to preserve its
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`scarce resources and decline to institute trial.
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`Denying institution is further warranted by Neptune’s unilateral decision to
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`wait until the eleventh hour to file its Petition, after the Federal Circuit appeal was
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`underway. The legislative history of the AIA acknowledged that the creation of
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`these new administrative proceedings in the Patent Office was not intended to
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`permit “repeated litigation and administrative attacks on the validity of a patent.”
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`H. R. Rep. No. 112-98, pt. 1, at 48 (2011). To the contrary, Congress recognized
`
`that the new proceedings could be abused in a manner that would undermine
`
`investment in research and development, and directed the Patent Office to take
`
`measures to prevent such abuse:
`
`The Committee recognizes the importance of quiet title to patent
`owners to ensure continued investment resources. While this
`amendment is intended to remove current disincentives to current
`administrative processes, the changes made by it are not to be used as
`tools for harassment or a means to prevent market entry through
`repeated litigation and administrative attacks on the validity of a
`patent. Doing so would frustrate the purpose of the section as
`providing quick and cost effective alternatives to litigation. Further,
`such activity would divert resources from the research and
`development of inventions. As such, the Committee intends for the
`USPTO to address potential abuses and current inefficiencies under
`its expanded procedural authority.
`
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`14
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`Case No. IPR2016-00240
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`Id. (emphasis added). In light of these policy considerations, Neptune
`
`should not be permitted—at this late date—to rely on duplicative arguments
`
`and open up yet another front in the long-running dispute concerning the
`
`validity of the ’209 patent.
`
`Indeed, Congress’ concern that inter partes review proceedings could
`
`create the potential for “abuse” has been validated by what has happened
`
`here. After Lilly and the ANDA filers spent years litigating the validity of
`
`the ’209 patent, after a federal district court upheld the nonobviousness of
`
`the patent following a two-week trial, and after the Federal Circuit appeal
`
`was well underway, Neptune at the eleventh-hour filed a Petition that raises
`
`essentially the same if not the identical arguments, and would force Lilly to
`
`do essentially the same exercise all over again. But Congress specifically
`
`recognized “the importance of quiet title to patent owners to ensure
`
`continued investment resources,” and allowing such a late-filed challenge to
`
`proceed is inconsistent with that principle. See H. R. Rep. No. 112-98, pt. 1,
`
`at 48 (2011).
`
`Moreover, Neptune’s Petition is not just an attempt to re-litigate the
`
`issues on appeal to the Federal Circuit—Neptune filed the Petition to
`
`leverage something out of Lilly by threatening a patent that protects one of
`
`Lilly’s top selling products. As noted above, see p. 4, supra, Neptune
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`
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`15
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`Case No. IPR2016-00240
`Patent 7,772,209
`contacted Lilly out of the blue in May 2015, asserting that it was preparing
`
`an IPR petition challenging the ’209 patent and threatening to file it unless,
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`within eight days, Lilly engaged in “settlement” discussions—i.e., unless
`
`Lilly provided Neptune with some form of consideration. Lilly refused, and
`
`Neptune carried through on its threat. That is precisely the sort of
`
`harassment of patent owners that Congress feared, and the Patent Office—
`
`who Congress charged to serve as the gatekeeper to protect the integrity of
`
`the patent system from abusive and harassing conduct—should not
`
`encourage or incentivize Neptune’s behavior by allowing it to succeed. The
`
`merits and circumstances justify denying the Petition.
`
`Finally, Lilly of course recognizes that there are different standards for
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`invalidation of claims in the federal courts and before the Board. A patent enjoys a
`
`presumption of validity in the district courts, but not before the Board. There are
`
`also different standards for claim construction in the two forums. But these
`
`varying standards do not make a difference here. The District Court litigation was
`
`not a close case. The Court’s decision was not premised on the standard of review,
`
`i.e., it is not as if the District Court believed that the ANDA filers proved invalidity
`
`by a preponderance of the evidence, but failed to meet the clear and convincing
`
`standard. Instead, the District Court’s opinion reflects an outright and thorough
`
`rejection of the ANDA filers’ obviousness arguments, based on the conclusion that
`
`
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`16
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`Case No. IPR2016-00240
`Patent 7,772,209
`the POSA would have viewed the prior art very differently. It concluded that folic
`
`acid pretreatment was nonobvious. Ex. 1027 at 10-16. It concluded that vitamin
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`B12 pretreatment was nonobvious. Id. at 16-20. It concluded that the doses and
`
`schedules were nonobvious. Id. at 20-24. Thus, even if the Board were to reach a
`
`different conclusion on one of these issues, it would not lead to a finding of
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`obviousness. Moreover, given Neptune’s proposed claim constructions and
`
`definition of the POSA, it is clear that Neptune’s Petition will not turn on any
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`differences in claim construction standards. See pp. 10-11, supra. Accordingly,
`
`however the Federal Circuit rules on the obviousness issue, it should effectively
`
`dispose of Neptune’s challenge as well.6
`
`4.
`
`Neptune’s Attempts to Distinguish the District Court’s
`Decision Are Without Merit
`
`
`In apparent recognition that the District Court’s opinion creates a problem
`
`for its challenge, Neptune specifically attempts to distinguish it as irrelevant. Pet.
`
`at 48-49. Neptune’s arguments are without merit.
`
`
`
`6 The validity of the European and Japanese counterparts to the ’209 patent was
`
`affirmed by the Opposition Division of the European Patent Office (the appeal was
`
`unilaterally withdrawn by the opponent) and the Japanese Patent Office (appeal
`
`pending at the Japanese IP High Court), respectively.
`
`
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`17
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`Case No. IPR2016-00240
`Patent 7,772,209
`A. Neptune cites a series of decisions for the proposition that a finding in
`
`one case that a patent is valid does not preclude a later finding that the patent is
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`invalid. Pet. at 48-49. For example, Neptune quotes In re Swanson, 540 F.3d
`
`1368, 1377 (Fed. Cir. 2008) as holding that “[a] future challenger with new or
`
`better information may subsequently raise, and succeed on . . . invalidity.” Pet. at
`
`48. (For clarity, Neptune misquotes Swanson; the quote actually comes from In re
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`Cipro Cases I & II, 61 Cal. 4th 116, 143 (Cal. 2015).) Neptune is correct that a
`
`Federal Circuit decision affirming nonobviousness will not formally preclude it
`
`from seeking to invalidate the ’209 patent. But that does not mean that trial should
`
`be instituted. This is not a scenario where “new or better information” is being
`
`raised in a validity challenge. See Pet. at 48. To the contrary, as discussed above,
`
`the arguments raised by Neptune with respect to the Asserted Claims are
`
`substantially similar if not identical to the ones raised by the ANDA filers.
`
`B. Neptune argues that the District Court decision is “not relevant” to
`
`this proceeding because the District Court “did not address Rusthoven or EP 005.”
`
`Pet. at 48-49. However, as discussed above, Rusthoven was the subject of
`
`extensive analysis, both at trial and in the post-trial briefs. See pp. 8-9, supra. It
`
`was clearly part of the evidence considered by the District Court, and hardly
`
`constitutes “new or better information.” Likewise, not only was EP ’005 cited to
`
`the District Court in the ANDA filer’s Trial Brief, but the same substantive
`
`
`
`18
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`Case No. IPR2016-00240
`Patent 7,772,209
`arguments were presented during trial in the form of other evidence. See pp. 9-10,
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`supra. Thus, the fact that EP ’005 was not discussed in the District Court’s
`
`opinion is immaterial, as the substantive point that Neptune seeks to extract from it
`
`squarely was.
`
`C.
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`Finally, Neptune contends that the District Court’s decision is
`
`irrelevant because it “assumed a priority date of June 1999,” and thus “did not
`
`consider the Carrasco evidence.” Pet. at 49. Carrasco, however, is not part of
`
`Neptune’s ground for unpatentability, making the import of Neptune’s argument,
`
`at best, difficult to discern. It certainly cannot be that
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