Filed On Behalf Of: Novartis AG
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`
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`Paper No. ____
`Date Filed: December 9, 2016
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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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`
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`PAR PHARMACEUTICAL, INC.,
`
`Petitioner
`
`v.
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`NOVARTIS AG,
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`Patent Owner
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`
`
`Inter Partes Review No. 2016-01059
`
`U.S. Patent 5,665,772
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`
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`PATENT OWNER’S RESPONSE
`TO PETITIONERS’ REQUESTS FOR RECONSIDERATION
`OF THE BOARD’S DECISION DENYING JOINDER OF CLAIM 7
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`Paper No. ____
`Date Filed: December 9, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`PAR PHARMACEUTICAL, INC.,
`
`Petitioner
`
`v.
`
`NOVARTIS AG,
`
`Patent Owner
`
`
`
`Inter Partes Review No. 2016-01059
`
`U.S. Patent 5,665,772
`
`
`
`PATENT OWNER’S RESPONSE
`TO PETITIONERS’ REQUESTS FOR RECONSIDERATION
`OF THE BOARD’S DECISION DENYING JOINDER OF CLAIM 7
`
`
`
`
`
`
`
`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Berk-Tek LLC v. Belden Techs. Inc.,
`IPR2013-00057, Paper 22 (P.T.A.B. May 15, 2013) ............................................. 3
`
`Consol. Bearings Co. v. United States,
`348 F.3d 997 (Fed. Cir. 2003) ................................................................................ 6
`
`Ericsson Inc. v. Intellectual Ventures I LLC,
`IPR2015-01873, Paper 14 (P.T.A.B. Jun. 27, 2016) .............................................. 2
`
`FCC v. Fox Television Stations,
`556 U.S. 502 (2009) ................................................................................................ 6
`
`In re Gartside,
`203 F.3d 1305 (Fed. Cir. 2000) .............................................................................. 6
`
`James V. Hurson Assocs. v. Glickman,
`229 F.3d 277 (D.C. Cir. 2000) ..............................................................................10
`
`Linear Tech. v. In-Depth Test,
`IPR2015-01994, Paper 7 (P.T.A.B. Oct. 20, 2015) ................................................ 2
`
`Micro Motion, Inc. v. Invensys Sys., Inc.,
`IPR2014-01409, Paper 14 (P.T.A.B. Feb. 18, 2015) ..........................................6, 8
`
`Ramaprakash v. FAA,
`346 F.3d 1121 (D.C. Cir. 2003) .............................................................................. 6
`
`Samsung Elecs. Co., Ltd. v. Affinity Labs. of Tex., LLC,
`IPR2015-00820, Paper 12 (P.T.A.B. May 15, 2015) ............................................. 7
`
`Synopsis, Inc. v. Mentor Graphics Corp.,
`814 F.3d 1309 (Fed. Cir. 2016) .............................................................................. 9
`
`Travelocity.com L.P. v. Cronos Techs., LLC,
`CBM2014-00082, Paper 12 (P.T.A.B. Oct. 16, 2014) ........................................... 3
`
`
`
`i
`
`
`
`
`
`Unwired Planet LLC v. Google Inc.,
`No. 2015-1812, 2016 WL 6832978 (Fed. Cir. Nov. 21, 2016) .............................. 5
`
`Statutes
`
`21 U.S.C. § 315(c) ..................................................................................................... 5
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`35 U.S.C. § 315(b) .................................................................................................3, 9
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`Other Authorities
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`157 Cong. Rec. S1376................................................................................................ 5
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`Rules
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`37 C.F.R. § 42.1(b) .................................................................................................... 9
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`37 C.F.R. § 42.122(b) ................................................................................................ 8
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`37 C.F.R. § 42.20(c) ................................................................................................... 8
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`37 C.F.R. § 42.71(d) ..............................................................................................1, 3
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`
`
`ii
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`This brief responds to the November 10, 2016 papers of Petitioners Par,
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`Breckenridge and Roxane (IPR2016-01059, Paper 20; IPR2016-01103, Paper 19;
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`IPR2016-01102, paper served but not filed (“Rox. Br.”)) requesting rehearing of
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`the Board’s October 27, 2016 decisions denying joinder of Petitioners’ challenges
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`to claim 7 of U.S. Patent No. 5,665,772 (IPR2016-01059, Paper 18; IPR2016-
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`01103, Paper 17; IPR2016-01102, Paper 16).1 For the following reasons, rehearing
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`should be denied.
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`
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`First, Petitioners’ rehearing papers violate 37 C.F.R. § 42.71(d). Under that
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`rule, a rehearing request “must specifically identify all matters the party believes
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`the Board misapprehended or overlooked, and the place where each matter was
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`previously addressed in a motion, an opposition, or a reply.” Petitioners’ papers do
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`not identify where the allegedly misapprehended or overlooked matters were
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`previously addressed in any motion, opposition or reply.
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`
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`Second, Petitioners’ rehearing papers raise impermissible new arguments.
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`Par newly argues that a petitioner seeking joinder need not explain why the
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`1 The Board authorized this brief in a December 2, 2016 email. For the Board’s
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`convenience, Novartis herein responds collectively to all three of Petitioners’
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`November 10, 2016 papers. Also, because the Board’s October 27, 2016 decisions
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`are identical, Novartis herein cites only one of them: IPR2016-01059, Paper 18.
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`
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`1
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`
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`materials sought to be joined were omitted from the original petition (IPR2016-
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`01059, Paper 20 at 3-6); that certain joinder decisions allegedly contradict other
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`decisions disfavoring “second bites at the apple” (id. at 7-8, 13-14); and that
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`scheduling obstacles are not a reason for denying joinder (id. at 8-12).
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`Breckenridge and Roxane newly argue that they should not be prejudiced by Par’s
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`delay in challenging claim 7. IPR2016-01103, Paper 19 at 5-6; Rox. Br. at 2-3.
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`Roxane newly argues that its challenge to claim 7 is not a “second bite at the
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`apple.” Rox. Br. at 3-4. And all three Petitioners newly argue that that they could
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`not have challenged claim 7 earlier than they did.2 IPR2016-01059, Paper 20 at 9;
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`IPR2016-01103, Paper 19 at 5; Rox. Br. at 5.
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`
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`Those arguments could well have been raised in Petitioners’ joinder motions
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`or replies. Because they were not, the Board could not have misapprehended or
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`overlooked them. E.g., Ericsson Inc. v. Intellectual Ventures I LLC, IPR2015-
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`01873, Paper 14 at 5 (P.T.A.B. Jun. 27, 2016) (“Petitioner does not identify where
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`2 No authority barred Petitioners from challenging claim 7 before institution of
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`Par’s IPR. Linear Tech. v. In-Depth Test, IPR2015-01994, Paper 7 (P.T.A.B. Oct.
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`20, 2015) is not such authority. There, the Board denied as premature a motion to
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`join another party’s IPR, but authorized the movant to renew its motion upon
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`institution of the other party’s IPR. Id. at 4-5.
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`2
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`these arguments were presented previously in the Petition. See 37 C.F.R.
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`§ 42.71(d). Thus, we could not have misapprehended or overlooked them. A
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`request for rehearing is not an opportunity for Petitioner to introduce new
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`arguments.”); Travelocity.com L.P. v. Cronos Techs., LLC, CBM2014-00082,
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`Paper 12 at 7-8 (P.T.A.B. Oct. 16, 2014) (same); Berk-Tek LLC v. Belden Techs.
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`Inc., IPR2013-00057, Paper 22 at 3 (P.T.A.B. May 15, 2013) (“Belden has not
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`identified any argument that it previously specifically presented but which has
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`been misapprehended or overlooked by the Board. Mere disagreement with the
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`Board’s analysis or conclusion is not a proper basis for rehearing.”).
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`
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`Third, Petitioners have had three opportunities—in their joinder motions,
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`joinder replies, and rehearing requests—to explain why they failed to challenge
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`claim 7 until May 2016, when Novartis told them as early as February 2015 that it
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`was asserting claim 7 against them in the related Delaware litigation.3 IPR2016-
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`01059, Paper 18 at 15-16. Petitioners still have not adequately explained their
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`failure to challenge claim 7 earlier. Par simply repeats that the omission of claim 7
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`3 Petitioners’ 35 U.S.C. § 315(b) deadlines expired between August and October
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`2015, six to eight months after Novartis told Petitioners it was specifically
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`asserting claim 7 against them. IPR2016-01059, Paper 11 at 4; IPR2016-01103,
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`Paper 10 at 4-5; IPR2016-01102, Paper 11 at 5.
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`3
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`
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`from its original petition was a “mistake” (IPR2016-01059, Paper 20 at 2 et seq.),
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`and Breckenridge and Roxane assert that they should not be prejudiced by Par’s
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`“mistake” (IPR2016-01103, Paper 19 at 5-6; Rox. Br. at 2-3). Those assertions,
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`however, are not explanations, and cannot excuse Petitioners’ conduct. Indeed, Par
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`concedes it is “not an excuse” for a petitioner to have failed to exercise reasonable
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`diligence before filing its original petition. IPR2016-01059, Paper 20 at 6. And
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`Breckenridge and Roxane have had—since at least February 2015— the motive
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`and opportunity to challenge claim 7 independently of Par (IPR2016-01103, Paper
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`10 at 5-6; IPR2016-01102, Paper 11 at 5). Breckenridge and Roxane thus are not
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`blameless for the current situation.
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`Fourth, Petitioners offer no credible rebuttal to the fact that their failure to
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`challenge claim 7 earlier would have forced the Board upon joinder either to
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`establish a separate schedule for claim 7, or to stay trial for claims 1-3 and 8-10 for
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`months. IPR2016-01059, Paper 18 at 18. Instead, Par and Roxane assert that
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`those circumstances were “beyond their control” (IPR2016-01059, Paper 20 at 9-
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`10; Rox. Br. at 4-5), and Breckenridge blames the Board—specifically, the timing
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`of the Board’s joinder decision—for those circumstances (IPR2016-01103, Paper
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`19 at 6-8). Petitioners’ assertions are baseless. Regardless of when the Board
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`issued its decision, the Board upon joinder still would have had to establish a
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`separate schedule for claim 7, or stay trial for claims 1-3 and 8-10 for months.
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`4
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`Indeed, Petitioners’ own proposed schedule for claim 7 proceedings set forth
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`separate due dates for all substantive briefing (Due Dates 1-4). See IPR2016-
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`01059, Paper 11 at 13.
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`Fifth, Petitioners overlook the statute expressly granting the Board the
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`discretion to deny joinder—21 U.S.C. § 315(c)—and rely upon the legislative
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`history to assert that joinder is not discretionary, but instead is to be “allowed as of
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`right.” IPR2016-01059, Paper 20 at 9, 12; IPR2016-01103, Paper 19 at 5; Rox. Br.
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`at 6. Petitioners’ reliance upon the legislative history in this regard is unavailing.4
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`See Unwired Planet LLC v. Google Inc., No. 2015-1812, 2016 WL 6832978 at *4
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`(Fed. Cir. Nov. 21, 2016) (legislative history cannot supplant statute). And
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`Petitioners’ other authorities only serve to emphasize the high bar that Petitioners
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`must clear to prove an abuse of the Board’s discretion. FCC v. Fox Television
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`4 Petitioners also misrepresent the legislative history on which they rely. There,
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`the PTO stated that it “anticipates that joinder will be allowed as of right—if an
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`inter partes review is instituted on the basis of a petition, for example, a party that
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`files an identical petition will be joined to that proceeding.” But if a party seeking
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`joinder “presents additional challenges to validity . . . the Office will either join
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`that party and its new arguments to the existing proceeding, or institute a second
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`proceeding for that patent.” 157 Cong. Rec. S1376 (emphasis added).
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`5
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`Stations, 556 U.S. 502, 517-521 (2009) (policy under which FCC would enforce
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`indecency statute on case-by-case basis was not arbitrary or capricious); In re
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`Gartside, 203 F.3d 1305, 1315-1316 (Fed. Cir. 2000) (Board did not abuse its
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`discretion in interference proceeding); Consol. Bearings Co. v. United States, 348
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`F.3d 997, 1004-1008 (Fed. Cir. 2003) (vacating trial court judgment that
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`Commerce Department acted arbitrarily).
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`Sixth, Petitioners’ authorities are clear that, to prove an abuse of discretion,
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`one must show that the agency in question departed from a prior consistent
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`practice. Consol. Bearings, 348 F.3d at 1007 (“This case requires a determination
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`of whether Commerce had a consistent practice from which it departed.”);
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`Ramaprakash v. FAA, 346 F.3d 1121, 1126 (D.C. Cir. 2003) (“For more than
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`twenty years, the NTSB has explained that a party seeking dismissal of a stale
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`complaint is not required to show prejudice from the delay.”). But Petitioners cite
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`no authority to show that the Board consistently has granted joinder in cases like
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`this. To the contrary, as Novartis explained, the Board consistently has denied
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`joinder where—as here—no changed circumstances justified a petitioner’s failure
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`earlier to challenge a claim. See IPR2016-01059, Paper 11 at 5-7 (citing, inter
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`alia, Micro Motion, Inc. v. Invensys Sys., Inc., IPR2014-01409, Paper 14 at 14
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`(P.T.A.B. Feb. 18, 2015) (“Petitioner neglected to include an analysis of claim 43
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`and offers now the analysis it could have offered then.”) and Samsung Elecs. Co.,
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`
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`6
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`Ltd. v. Affinity Labs. of Tex., LLC, IPR2015-00820, Paper 12 at 4 (P.T.A.B. May
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`15, 2015) (denying joinder in the absence of “changed circumstances—such as
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`new claims being asserted during district court litigation or new threats of
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`infringement”). Thus, the Board here did not abuse its discretion.
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`Seventh, Par (but not Breckenridge or Roxane) argues the straw man that the
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`Board impermissibly set forth new “rules” requiring a petitioner to explain why it
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`omitted the material sought to be joined from its original petition,5 and the Board
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`to issue a joinder decision “before the first proceeding’s POR and without
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`5 Par’s discussion of previously cited cases in connection with this “rule”
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`(IPR2016-01059, Paper 20 at 4-8) is both too late and unavailing. As Novartis
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`explained, and as the Board acknowledged, each of those cases involved an
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`explanation and/or changed circumstances that “provided at least some justification
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`for the delay in raising the grounds.” See IPR2016-01059, Paper 11 at 6-9;
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`IPR2016-01059, Paper 18 at 16. In Samsung and Enzymotec, the later petitions
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`responded to deficiencies identified by the Board; in Ariosa, the later petition
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`addressed claims concerning a new product; in Zhongshan, joinder was sought to
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`cure a procedural defect identified by the patent owner; and in Target, joinder was
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`sought to add art newly asserted in related litigation. Id.
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`7
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`explanation.” IPR2016-01059, Paper 20 at 2, 10. But the Board did not set forth
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`any such “rules.” Rather, the Board stated that its denial of joinder under these
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`facts is consistent with other decisions (including Micro Motion) where no changed
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`circumstances justified a petitioner’s failure earlier to challenge a claim, and with
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`the policies of “encouraging a petitioner to raise in its first petition all grounds and
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`claims that reasonably could have been raised” and of avoiding “lengthy delays in
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`an ongoing review.” IPR2016-01059, Paper 18 at 15-18. Par does not explain
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`how those innocuous statements set forth impermissible new “rules.”
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`Eighth, Par (but not Breckenridge or Roxane) wrongly presumes that the
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`Board, in granting or denying joinder, must provide a petitioner with a “reasoned
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`explanation” distinguishing all contrary decisions. IPR2016-01059, Paper 20 at 2-
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`3, 8-11. Par’s presumption, if credited, not only would rob the Board of its
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`discretion to grant or deny joinder, but also would impermissibly shift the burden
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`of proof as to joinder from the movant to the Board. See 37 C.F.R. §§ 42.122(b)
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`(joinder must be sought by motion); 42.20(c) (movant bears the burden of proving
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`that it is entitled to the relief sought); Micro Motion, IPR2014-01409, Paper 14 at
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`14 (“Petitioner as the moving party, carries the burden of proof.”). Indeed, Par’s
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`presumption, if credited, would establish precisely the sort of impermissible new
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`“rule” that Par accuses the Board of having made.
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`8
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`Ninth, Par (but not Breckenridge or Roxane) suggests that an expanded
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`panel is warranted because the Board’s prior decisions on joinder are “conflicting.”
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`IPR2016-01059, Paper 20 at 14-15. Par is wrong. As explained above, the
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`Board’s denial of joinder here is entirely consistent with its prior decisions
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`involving similar facts.
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`Tenth, Petitioners’ “public interest” arguments are meritless. Petitioners had
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`a full and fair opportunity to challenge claim 7 in the pending related Delaware
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`litigation, and, as Novartis explained, Petitioners—by failing to challenge claim 7
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`before the expiration of their 35 U.S.C. § 315(b) deadlines—have only themselves
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`to blame for the current situation. IPR2016-01059, Paper 11 at 11; IPR2016-
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`01103, Paper 10 at 9. Further, Petitioners ignore that the public interest requires
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`IPRs to be resolved in a manner that is “just, speedy and inexpensive.” 37 C.F.R.
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`§ 42.1(b). Granting joinder here would not serve that interest.6
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`6 Contrary to Par’s assertion (IPR2016-01059, Paper 20 at 12-13) there is no public
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`policy in favor of “fully resolv[ing]” all patent disputes between parties. E.g.,
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`Synopsis, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1315-17 (Fed. Cir. 2016)
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`(Board need not institute IPR against every claim in a petition). Par’s cited
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`authority on this point—James V. Hurson Assocs. v. Glickman, 229 F.3d 277, 284
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`9
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`Dated: December 9, 2016
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`For the foregoing reasons, rehearing should be denied.
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`Respectfully submitted,
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`
`/Nicholas N. Kallas/
`Nicholas N. Kallas
`Registration No. 31,530
`Lead Counsel for Patent Owner
`FITZPATRICK, CELLA, HARPER
`& SCINTO
`1290 Avenue of the Americas
`New York, NY 10104-3800
`Tel. 212-218-2100
`
`
`(D.C. Cir. 2000) (permitting appellant to add to its pleading a claim against the
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`Department of Agriculture)—is irrelevant.
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`
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`10
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`CERTIFICATE OF SERVICE
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`I certify that a copy of the foregoing Patent Owner’s Response To
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`Petitioners’ Requests For Reconsideration Of The Board’s Decision Denying
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`Joinder Of Claim 7 was served on December 9, 2016 by causing it to be sent by
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`email to counsel for Petitioners at the following email addresses:
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`Daniel G. Brown (daniel.brown@lw.com)
`
`Robert Steinberg (bob.steinberg@lw.com)
`
`Brenda L. Danek (brenda.danek@lw.com)
`
`Jonathan M. Strang (jonathan.strang@lw.com)
`
`Dated: December 9, 2016
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`
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`
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`
`
`
`
`/Nicholas N. Kallas/
`Nicholas N. Kallas
`Registration No. 31,530
`Lead Counsel for Patent Owner
`FITZPATRICK, CELLA, HARPER
`& SCINTO
`1290 Avenue of the Americas
`New York, NY 10104-3800
`Tel. 212-218-2100
`
`
`
`
`
`11
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