`Patent 7,772,209
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`SANDOZ INC.,
`Petitioner,
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`v.
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`ELI LILLY AND COMPANY,
`Patent Owner.
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`
`
`Case No. IPR2016-00318
`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. IPR2016-00318
`Patent 7,772,209
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`TABLE OF CONTENTS
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`TABLE OF AUTHORITIES .................................................................................... ii
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`I.
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`II.
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`BACKGROUND ............................................................................................. 4
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`THE BOARD SHOULD NOT INSTITUTE TRIAL ...................................... 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 .............................................................................................. 6
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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 and References that Sandoz Raises Here ................. 6
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`The Federal Circuit’s Decision on Appeal Will Virtually
`Certainly Precede Any Decision on the Merits by this
`Board ......................................................................................... 12
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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 ................................................................... 13
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`Sandoz’s Attempt to Distinguish the District Court’s
`Decision Is Without Merit ........................................................ 18
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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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`III.
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`IN THE ALTERNATIVE, TRIAL SHOULD NOT BE INSTITUTED
`AS TO GROUND 1 ....................................................................................... 20
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`A. Ground 1 Should Not Be Instituted Because Sandoz’s Proposed
`Claim Construction of “Patient” Is Wrong ......................................... 21
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`B. Ground 1 Should Not Be Instituted Because It Is Redundant ............ 29
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`CONCLUSION ........................................................................................................ 32
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`i
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`Case No. IPR2016-00318
`Patent 7,772,209
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`TABLE OF AUTHORITIES
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`FEDERAL CASES
`AVX Corp. v. Greatbatch Ltd., Case IPR2015-00710,
`2015 WL 4778529 (PTAB Aug. 12, 2005) .......................................................... 7
`
`Cuozzo Speed Techs., LLC v. Lee, No. 15–446, --- U.S. ---,
`2016 WL 205946 (U.S. Jan. 15, 2015) ......................................................... 22, 24
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`Facebook, Inc. v. Pragmatus AV, LLC, 582 F. App’x 864
`(Fed. Cir. 2014) ................................................................................................... 23
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`Harmonic Inc. v. Avid Tech., Inc., --- F.3d ----, 2016 WL 798192
`(Fed. Cir. Mar. 1, 2016) ...................................................................................... 13
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`In re Cipro Cases I & II, 61 Cal. 4th 116 (Cal. 2015) ............................................. 19
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`In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015),
`cert. granted sub nom., Cuozzo Speed Techs., LLC v. Lee, No. 15–
`446, --- U.S. ---, 2016 WL 205946 (U.S. Jan. 15, 2015) .................................... 24
`
`In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008) ...................................................... 19
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`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co.,
`Case CBM2012-00003, Paper No. 7 (PTAB Oct. 25, 2012) ....................... 21, 30
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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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`Noven Pharm., Inc., et al., v. Novartis AG, et al.,
`Case IPR2014-00549, 2015 WL 5782080 (PTAB Sept. 28, 2015) ................... 18
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`Novo Nordisk A/S v. Eli Lilly & Co., No. 98-643, 1999 WL 1094213
`(D. Del. Nov. 18, 1999) ...................................................................................... 28
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`Ranbaxy Labs. Ltd. v. Vertex Pharms., Inc., Case IPR2013-00024,
`Paper No. 16 (Mar. 5, 2013) ............................................................................... 30
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`Thorner v. Sony Computer Entm’t Am. LLC, 669 F.3d 1362
`(Fed. Cir. 2012) ................................................................................................... 27
`ii
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`Patent 7,772,209
`Trivascular, Inc. v. Samuels, 812 F.3d 1056 (Fed. Cir. 2016) ................................ 24
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`Valeo N. Am., Inc., et al., v. Magna Elecs., Inc., Case IPR2014-01204,
`2015 WL 410626 (PTAB Jan. 28, 2015) ............................................................ 13
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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) ....................................................... 14
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`35 U.S.C. § 315(b) ..................................................................................................... 5
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`Fed. R. App. P. 31(a)(1) ........................................................................................... 13
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`H. R. Rep. No. 112-98, pt. 1 (2011) .................................................................. 15, 16
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`iii
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`Case No. IPR2016-00318
`Patent 7,772,209
`Sandoz’s Petition should be denied. Taken on its own terms, the Petition
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`fails to establish a reasonable likelihood that Sandoz 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 Sandoz raises
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`concerning the validity of the ’209 patent have already been litigated in, and
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`rejected by, a federal district court. This decision involved the same prior art that
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`Sandoz raises in its grounds. Indeed, Sandoz even refers to purported “erroneous
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`legal and factual findings” by the District Court as a reason to institute trial. Pet. at
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`4. But whether the District Court decision was erroneous is now squarely before
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`the Federal Circuit. The appellate court will in all likelihood issue an opinion
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`many months before any decision on the merits here, should trial be instituted. If
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`Sandoz were correct that the District Court’s decision was erroneous, it is for the
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`1 Patent Owner Lilly does not in this Preliminary Response seek to address the
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`merits of Sandoz’s Petition, nor, necessarily, does it provide the evidence that it
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`will rely on that shows that Sandoz’s contentions are without merit. Should trial be
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`instituted, Lilly will address the merits and the nonobviousness of the ’209 patent
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`in its Patent Owner Response.
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`1
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`Patent 7,772,209
`appellate court to address. Allowing Sandoz to re-litigate the District Court action
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`here—in a challenge filed well after the appeal proceedings were underway—is not
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`only 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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`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 other generic companies (the “Teva
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`Defendants”) in the Southern District of Indiana, Eli Lilly & Co. v. Teva
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`Parenteral Medicines, Inc., et al., Case No. 1:10-cv-1376 (the “Teva Litigation”).
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`Following trial, the District Court upheld the validity of the asserted claims of the
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`’209 patent. In reaching its decision, the District Court considered—and
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`rejected—the very line of argument Sandoz raises here, based on the same prior art
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`references that Sandoz raises in its grounds. And it was not a close case. The
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`finding of nonobviousness did not turn on the clear-and-convincing evidence
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`burden of proof applicable in district court litigation. Rather, the District Court
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`held that none of the disputed claim elements, let alone any asserted claim as a
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`whole, was obvious over the prior art. In so holding, the District Court decided as
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`a factual matter what the prior art would have taught the person of ordinary skill in
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`the art (“POSA”), and concluded that the POSA would have been motivated not to
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`do what Sandoz posits.
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`2
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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 will be completed in one week. 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 Sandoz’s obviousness contentions on the merits, when
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`that issue for all practical purposes has been decided by the District Court and will
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`be decided by the Federal Circuit well in advance of any final written decision by
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`the Board? The answer is no. The issue has been fully litigated, and the art and
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`arguments in Sandoz’s Petition raise no new issues of patentability. While the
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`Board is not bound to follow the decision of the federal courts, in view of the
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`schedule in the Federal Circuit, the duplicative nature of the allegations and prior
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`art references, and the principles underlying the enactment of the America Invents
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`Act, the Board is fully within its discretion to defer to the federal court proceedings
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`and deny the Petition. Accordingly, Lilly respectfully submits that the Board
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`should not institute trial.
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`Finally, even if the Board were to institute trial, it should not do so on both
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`grounds presented by Sandoz. Sandoz’s Ground 1, a combination involving the
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`3
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`Patent 7,772,209
`Worzalla reference (Ex. 1013), depends on an erroneous claim construction of the
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`term “patient” to mean “mammal” that was correctly rejected by the District Court
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`and should be rejected by the Board. And even under Sandoz’s proposed
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`construction, the two grounds Sandoz presents are wholly redundant and should
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`not both be instituted.
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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. 1051 (ALIMTA® labeling) at 1.
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`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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`Sandoz is a relative late-comer to the series of generic challenges to patents
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`protecting ALIMTA®. See Pet. at 3 (identifying various other actions involving
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`the ’209 patent). The Teva Litigation was initiated in 2010, and the District Court
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`issued its findings of fact and conclusions of law concerning validity in March
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`4
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`2014. Several months after that decision, Sandoz notified Lilly by letter dated
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`October 29, 2014 that it had submitted to the FDA an Abbreviated New Drug
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`Application (“ANDA”) seeking approval to manufacture and sell a generic version
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`of ALIMTA®. In accordance with the provisions of the Hatch-Waxman Act, Lilly
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`sued Sandoz for patent infringement on December 5, 2014. See Pet. at 2. That
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`case has since been consolidated with multiple other Hatch-Waxman actions
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`involving the ’209 patent, and is currently pending in the Southern District of
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`Indiana. Eli Lilly and Co. v. Nang Kuang Pharm. Co., Ltd., et al., Case No. 1:14-
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`cv-1674-TWP-DKL.
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`On the eve of the one-year bar under 35 U.S.C. § 315(b), Sandoz filed its
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`Petition for inter partes review. The Petition was filed more than two months after
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`the Federal Circuit appeal was docketed, Ex. 2008 (Notice of Docketing), more
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`than two years after the trial in the District Court regarding the validity of the ’209
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`patent, and nearly five years after the initiation of Hatch-Waxman litigation
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`involving the ’209 patent.
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`II. THE BOARD SHOULD NOT INSTITUTE TRIAL
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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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`5
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`Patent 7,772,209
`specifically address and which therefore the Federal Circuit will not directly pass
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`upon. Accordingly, the Board should deny Sandoz’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 and References that Sandoz Raises Here
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`Sandoz’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, Sandoz argues that Niyikiza (Ex. 1006)2
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`“link[e]d pemetrexed toxicity with elevated baseline homocysteine levels.” Pet. at
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`1. Sandoz then refers to Calvert (Ex. 1007),3 arguing that it teaches that folic acid
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`and vitamin B12 can be used to lower homocysteine levels. Pet. at 1-2. Then,
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`taking Niyikiza and Calvert together with purported “folic acid pretreatment
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`2 Niyikiza was TX 911 in the District Court. Ex. 2006 (Joint Trial Exhibit List) at
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`pg. 17.
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`3 Calvert was TX 401 in the District Court. Ex. 2006 at pg. 15.
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`regimens for pemetrexed of Worzalla [(Ex. 1013)] or Hammond I [(Ex. 1015)],”4
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`Sandoz contends that the POSA would have reasonably expected “the lowering of
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`baseline homocysteine levels with a corresponding reduction in the prevalence
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`and/or severity of pemetrexed toxicity.” Pet. at 2. Sandoz also alleges that any
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`evidence of secondary considerations such as skepticism and unexpected properties
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`would not support nonobviousness. Pet. at 44-48.
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`However, substantially the same if not identical arguments, as well as the
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`same references, were litigated in the District Court. For example, the Teva
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`Defendants argued, citing to the very Niyikiza reference that Sandoz relies upon,
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`that the “POSA would have relied on Dr. Niyikiza’s abstracts teaching that
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`pemetrexed-related toxicities are associated with elevated baseline levels of
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`homocysteine.”5 Ex. 2003 (Teva Defendants’ Post-Trial Brief) at pg. 26 (citing
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`4 Worzalla and Hammond I were, respectively, TX 384 and TX 911 in the District
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`Court. Ex. 2006 at pgs. 14, 17.
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`5 Any testimony contained in the post-trial briefing is not new testimonial evidence
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`within the meaning of 37 C.F.R. § 42.107(c), as it was elicited for purposes of the
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`District Court case years before the Petition was filed. See AVX Corp. v.
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`Greatbatch Ltd., Case IPR2015-00710, 2015 WL 4778529 (PTAB Aug. 12, 2005)
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`at *6, n.4; Nelson Prods., Inc. v. Bal Seal Eng’g, Inc., Case IPR2014-00573, 2014
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`TX 911, which contains the same abstract (609P) as Ex. 1008); see also Ex. 2006
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`at pg. 17. The Teva Defendants also alleged, quoting from the very same Calvert
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`reference that Sandoz relies upon, that the POSA would have known from prior art
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`that “measuring a patient’s pretreatment plasma homocysteine level is a sensitive
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`way of predicting the toxicity of pemetrexed, and that ‘any functional deficiency in
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`either B12 or folate will result in . . . [an] increase in the plasma level of
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`homocysteine.’” Ex. 2003 at pg. 27 (quoting TX 401, which is Ex. 1007). The
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`Teva Defendants then argued that based on “the association between elevated
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`homocysteine and low levels of both folic acid and vitamin B12, a POSA would
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`have been motivated to administer vitamin B12 pretreatment along with folic acid
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`before starting a regimen of pemetrexed therapy.” Ex. 2003 at pgs. 27-28. The
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`Teva Defendants alleged further the POSA would have added vitamin B12
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`pretreatment to the regimens of Worzalla (TX 384) and Hammond I (TX 911). Ex.
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`2003 at pgs. 24-26. Finally, the Teva Defendants asserted that Lilly’s proffered
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`WL 4925284 (PTAB Sept. 29, 2014) at *5, n.2. Moreover, Lilly in this Patent
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`Owner Preliminary Response is relying on these materials for purposes of
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`establishing the extent to which the same issues and prior art references were
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`litigated in the District Court, not for purposes of addressing Sandoz’s arguments
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`on the merits.
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`Patent 7,772,209
`evidence of secondary considerations did not support patentability. Ex. 2003 at
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`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 Niyikiza, the District Court concluded that
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`neither folic acid pretreatment nor vitamin B12 pretreatment would have been
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`obvious to the POSA. See, e.g., Ex. 1003 (District Court Findings of Fact and
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`Conclusions of Law) at 16-17 (citing TX 911, the Niyikiza abstract relied upon by
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`Sandoz). In fact, the District Court specifically acknowledged that the Teva
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`Defendants had asserted, just as Sandoz does here, that the prior art “including the
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`Niyikiza abstracts, taught that nutritional issues contributed to pemetrexed
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`toxicities, and that general knowledge in the art of the association between elevated
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`homocysteine and low levels of both folic acid and vitamin B12 would have
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`motivated a POSA to administer B12 pretreatment along with folic acid before
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`starting pemetrexed therapy.” Ex. 1003 at 16. The District Court further
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`acknowledged that the Teva Defendants relied on Worzalla and Hammond I to
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`argue that the POSA would have used folic acid and vitamin B12 pretreatment
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`with pemetrexed. Id. at 10-20.6 The Court, however, concluded that the prior art
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`6 The District Court analyzed both Hammond abstracts (Hammond I and
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`Hammond II, TX 911 and 912) in this discussion. See Ex. 1003 at 10, 13-14.
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`9
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`did not suggest the invention claimed in the Asserted Claims, and upheld the
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`validity of the ’209 patent. Id. at 9-24.
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`Sandoz does not take issue with the notion that Niyikiza, Worzalla, and
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`Hammond I were all addressed by the District Court. However, in an attempt to
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`distinguish its arguments, Sandoz contends that the District Court did not “analyze
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`Calvert in its opinion.” Pet. at 23. It is true that the opinion does not specifically
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`refer to this particular Calvert reference. But that does not mean the District Court
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`did not analyze it. To the contrary, the District Court referred to Calvert more
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`generally when addressing references raised by the Teva Defendants. For
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`example, citing Calvert (among other references) the Teva Defendants argued that
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`the POSA would be motivated to use vitamin B12 together with folic acid
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`pretreatment because “Lilly’s publications taught that nutritional issues were
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`contributing to pemetrexed toxicities, some of which specifically identified low
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`vitamin B12 levels as a possible culprit.” Ex. 2003 at pg. 26 (emphasis added)
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`(citing, inter alia, TX 401, which is Calvert). The District Court, in turn, observed
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`that “Defendants assert that the prior art published by Lilly, including the Niyikiza
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`abstracts, taught that nutritional issues contributed to pemetrexed toxicities, and
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`that general knowledge in the art of the association between elevated homocysteine
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`and low levels of both folic acid and vitamin B12 would have motivated a POSA
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`to administer B12 pretreatment along with folic acid before starting pemetrexed
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`10
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`therapy.” Ex. 1003 at 16. Calvert was one of those prior art publications referred
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`to by the District Court. In other words, although the District Court did not refer to
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`Calvert by name, it plainly analyzed it as part of its findings of fact and
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`conclusions of law. That is not surprising, as there was extensive testimony about
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`Calvert at trial, and the parties referred to it on multiple occasions in their post-trial
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`briefs. See, e.g., Ex. 2003 at 14, 18, 22, 26, 27, 32; Ex. 2004 (Lilly’s Post-Trial
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`Brief) at 46, 52 n.11; Ex. 2013 (Teva Defendants’ Post-Trial Reply) at pgs. 14, 19.
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`Thus, issues presented by Calvert were squarely before the District Court when it
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`rendered its decision. Sandoz’s suggestion to the contrary—and its suggestion that
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`Calvert represents something new—is simply incorrect.
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`It is also worth noting that the framework in which Sandoz presents its
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`obviousness arguments is substantially the same as the one employed in the
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`District Court. Sandoz relies on June 1999 date for its obviousness analysis, Pet. at
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`1, the same date employed by the District Court, Ex. 1003 at 6, 13-15, 17, 19-20,
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`23-24, 27-28. On the issue of claim construction, with the exception of term
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`“patient” (discussed further below, see pp. 21-29, infra), Sandoz proposes
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`constructions that were jointly proposed by the parties and employed by the
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`District Court. Compare Pet. at 21-23 with Ex. 1035 at 1-2 (the parties’ joint
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`proposed constructions of “methylmalonic acid lowering agent”; “an effective
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`amount of pemetrexed disodium”; and “an effective amount of folic acid and a
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`11
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`methylmalonic acid lowering agent”). And as for “patient,” Sandoz itself posits
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`that its proposed construction does not affect its obviousness arguments. See Pet.
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`at 21. Moreover, Sandoz’s proposed definition of the POSA is similar to the one
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`adopted by the District Court. Compare Pet. at 17-18 with Ex. 2014 (District Court
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`Claim Construction Decision) at pgs. 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 Sandoz
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`filed its Petition. Ex. 2008. Briefing is expected to be completed by March 25,
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`2016, i.e., in one week. Ex. 2015 (Docket for Appeal No. 15-2067) at 8, entry 38.7
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`If normal Federal Circuit practice is followed, oral argument will occur in roughly
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`June or July. See Ex. 2010 (Fed. Cir. Internal Operating Procedures (Nov. 14,
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`2008)) IOP # 3, ¶ 1, at pg. 11 (scheduling argument 6 weeks after the appendix is
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`7 This deadline has been moved by one week—i.e., from March 18, 2016 to March
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`25, 2016—since the time Lilly submitted its Patent Owner Preliminary Responses
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`in the inter partes review proceedings initiated by Neptune Generics, LLC, Case
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`IPR2016-00237 and Case IPR2016-00240.
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`12
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`filed); Fed. R. App. P. 31(a)(1) (appendix is due 7 days after filing reply brief). To
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`Lilly’s understanding, the Federal Circuit’s goal is to issue opinions within a few
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`months of oral argument. An opinion could therefore reasonably be expected by
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`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 approximately June 2016. If trial were
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`instituted, a decision on the merits would issue approximately one year later, i.e.,
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`mid-2017. Thus, any decision on the merits would be expected to occur at least
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`several months after an expected opinion from the Federal Circuit on the validity
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`of the 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
`
`
`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) (“[T]he
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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 Sandoz has raised with respect to the Asserted Claims, based on the same prior
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`art that Sandoz has raised in its grounds. That decision is on appeal to the Federal
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`Circuit. Given the factual posture, the decision of the Federal Circuit—either
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`affirming the District Court’s nonobviousness conclusion or reversing it—will
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`almost certainly be dispositive of the substance of the validity arguments raised by
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`Sandoz.
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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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`Case No. IPR2016-00318
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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 Sandoz’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
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`that the new proceedings could be abused in a manner that would undermine
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`investment in research and development, and directed the Patent Office to take
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`measures to prevent such abuse:
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`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
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`Case No. IPR2016-00318
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`its expanded procedural authority.
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`Id. (emphasis added). In light of these policy considerations, Sandoz should not be
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`permitted—at this late date—to rely on duplicative arguments and prior art
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`references, and open up yet another front in the long-running dispute concerning
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`the validity of the ’209 patent.
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`Indeed, Congress’ concern that inter partes review proceedings could create
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`the potential for “abuse” has been validated by what has happened here. After
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`Lilly and the Teva Defendants spent years litigating the validity of the ’209 patent,
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`after a federal district court upheld the nonobviousness of the patent following a
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`two-week trial, and after the Federal Circuit appeal was well underway, Sandoz at
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`the eleventh-hour filed a Petition that raises essentially the same if not the identical
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`arguments, relies on the same prior art references for its grounds, and would force
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`Lilly to do essentially the same exercise all over again. But Congress specifically
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`recognized “the importance of quiet title to patent owners to ensure continued
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`investment resources,” and allowing such a late-filed challenge to proceed is
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`inconsistent with that principle. See H. R. Rep. No. 112-98, pt. 1, at 48 (2011).
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`Lilly of course recognizes that there are different standards for invalidation
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`of claims in the federal courts and before the Board. A patent enjoys a
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`presumption of validity in the district courts, but not before the Board. There are
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`also different standards for claim construction in the two forums. But these
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`varying standards do not make a difference here. The District Court litigation was
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`not a close case. The Court’s decision was not premised on the standard of review,
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`i.e., it is not as if the District Court believed that the Teva Defendants proved
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`invalidity by a preponderance of the evidence, but failed to meet the clear and
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`convincing standard. Instead, the District Court’s opinion reflects an outright and
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`thorough rejection of the Teva Defendants’ obviousness arguments, based on the
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`conclusion that the POSA would have viewed the prior art very differently. It
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`concluded that folic acid pretreatment was nonobvious. Ex. 1003 at 10-16. It
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`concluded that vitamin B12 pretreatment was nonobvious. Id. at 16-20. It
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`concluded that the doses and schedules were nonobvious. Id. at 20-24. Thus, even
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`if the Board were to reach a different conclusion on one of these issues, it would
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`not lead to a finding of obviousness. Moreover, given Sandoz’s proposed claim
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`constructions (including its acknowledgement that its proposed construction of
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`“patient” does not make a difference to its obviousness arguments), Sandoz’s
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`proposed date for its obviousness analysis, and Sandoz’s proposed definition of the
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`POSA, it is clear that Sandoz’s Petition will not turn on any differences in claim
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`c