HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`In the Inter Partes Review (IPR) of
`U.S. Patent No. 8,822,438
`
`DECLARATION OF DEFOREST MCDUFF, Ph.D.
`
`I, DeForest McDuff, Ph.D., declare as follows:
`
`I.
`
`Introduction
`
`A.
`
`Qualifications
`
`1.
`
`I am a Vice President of Intensity Corporation and an expert in
`
`applied business economics, with more than ten years of experience in consulting,
`
`finance, and economic research. I provide expert witness testimony and consulting
`
`in a variety of areas, including lost profits, reasonable royalties, unjust enrichment,
`
`commercial success, finance, statistics, valuation, and business optimization.
`
`2.
`
`My expertise and experience span a variety of topics, including
`
`intellectual property, competition, antitrust, finance, labor, employment, and class
`
`action. My work in intellectual property spans the life sciences (including
`
`pharmaceuticals, biotechnology, diagnostics, and medical devices), electronics
`
`Declaration of DeForest McDuff, Ph.D.
`
`1
`
` In re: USPTO Patent
`Application No. 13/034,340
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`ARGENTUM EX1017
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`Page 1
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`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`In the Inter Partes Review (IPR) of
`U.S. Patent No. 8,822,438
`
`DECLARATION OF DEFOREST MCDUFF, Ph.D.
`
`I, DeForest McDuff, Ph.D., declare as follows:
`
`I.
`
`Introduction
`
`A.
`
`Qualifications
`
`1.
`
`I am a Vice President of Intensity Corporation and an expert in
`
`applied business economics, with more than ten years of experience in consulting,
`
`finance, and economic research. I provide expert witness testimony and consulting
`
`in a variety of areas, including lost profits, reasonable royalties, unjust enrichment,
`
`commercial success, finance, statistics, valuation, and business optimization.
`
`2.
`
`My expertise and experience span a variety of topics, including
`
`intellectual property, competition, antitrust, finance, labor, employment, and class
`
`action. My work in intellectual property spans the life sciences (including
`
`pharmaceuticals, biotechnology, diagnostics, and medical devices), electronics
`
`Declaration of DeForest McDuff, Ph.D.
`
`1
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` In re: USPTO Patent
`Application No. 13/034,340
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`ARGENTUM EX1017
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`Page 1
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`HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
`consumer
`electronics,
`semiconductors,
`computers,
`
`and
`
`(including
`
`telecommunications), and has included projects on a diverse range of other
`
`industries (such as scuba diving equipment, golf clubs, and contact lenses). I
`
`frequently provide expertise and analysis in evaluating commercial success in the
`
`pharmaceutical industry.
`
`3.
`
`I earned my Ph.D. in economics from Princeton University. At
`
`Princeton, I received a National Science Foundation Graduate Research Fellowship
`
`for academic research studying economic and statistical properties of housing
`
`markets and financial derivatives. I have published research in several peer-
`
`reviewed academic journals. I graduated summa cum laude with undergraduate
`
`degrees in economics and mathematics from the University of Maryland.
`
`4.
`
`My curriculum vitae, provided in Attachment A-1, contains more
`
`details on my background, experience, publications, and prior expert testimony.
`
`B.
`
`Scope of Work
`
`5.
`
`Intensity Corporation has been retained by McNeely, Hare & War,
`
`LLP on behalf of Amerigen Pharmaceuticals Limited in connection with my work
`
`in this matter. Intensity Corporation is being compensated at a rate of $700 per
`
`hour for my work and at lower rates for time spent by others on my team. The
`
`Declaration of DeForest McDuff, Ph.D.
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`2
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`HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
`compensation of Intensity Corporation is not dependent on the substance of my
`
`testimony or the outcome of this matter.
`
`6.
`
`For this declaration, I was asked to evaluate aspects of commercial
`
`success, from an economic perspective, as it pertains to Zytiga (abiraterone
`
`acetate) and U.S. Patent No. 8,822,438. This declaration is a statement of my
`
`opinions in this matter and the basis and reasons for those opinions. In forming the
`
`opinions expressed in this declaration, I have relied upon my education,
`
`experience, and knowledge of the subjects discussed. I have also reviewed,
`
`considered, or relied upon documents and other materials, which are cited herein
`
`and/or listed in Attachment A-2.
`
`7.
`
`This declaration summarizes only my current opinions, which are
`
`subject to change depending upon additional information and/or analysis. The
`
`entirety of my declaration, including attachments and referenced materials,
`
`supplies the basis for my analysis and conclusions. The organizational structure of
`
`the declaration is for convenience. To the extent that facts, economic analysis, and
`
`other considerations overlap, I generally discuss such issues only once for the sake
`
`of brevity. Neither the specific order in which each issue is addressed nor the
`
`organization of my declaration or attachments affects the ultimate outcome of my
`
`analysis.
`
`Declaration of DeForest McDuff, Ph.D.
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`3
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`HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
`II. Background
`
` Prostate cancer A.
`
`
`
`8.
`
`Prostate cancer occurs in the male prostate, a small gland that
`
`produces the seminal fluid that nourishes and transports sperm.1 Prostate cancer is
`
`one of the most common types of cancer in men,2 with a one-in-seven lifetime risk
`
`
`1
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
`2
`
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
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`Declaration of DeForest McDuff, Ph.D.
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`4
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`of being diagnosed.3 In recent years, estimates for prostate cancer indicate over
`
`
`
`220,000 new cases and more than 27,000 deaths annually in the US alone.4
`
`9.
`
`Patients diagnosed with prostate cancer may undergo a variety of
`
`treatments options, including: (1) active surveillance (i.e., no action taken until
`
`disease progresses);5 (2) radiation therapy (i.e., using high-powered energy to kill
`
`
`3
`AMERIGEN 1041: Cancer.org (ACS), “What are the key statistics about
`
`prostate cancer?”
`
`http://www.cancer.org/cancer/prostatecancer/detailedguide/prostatecancerke
`
`ystatistics (accessed 8/20/2015).
`
`4
`
`AMERIGEN 1041: Cancer.org (ACS), “What are the key statistics about
`
`prostate cancer?”
`
`http://www.cancer.org/cancer/prostatecancer/detailedguide/prostatecancerke
`
`ystatistics (accessed 8/20/2015).
`
`5
`
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
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`Declaration of DeForest McDuff, Ph.D.
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`cancer cells) and surgical removal of the prostate;6 (3) chemotherapy (i.e., using
`
`
`
`drugs to kill cancer cells);7 (4) hormone therapy (e.g., interrupting production of
`
`testosterone to kill or slow growth of cancer cells);8 and (5) other treatments such
`
`as cryosurgery (e.g., freezing tissue to kill cancer cells) and immunotherapy (e.g.,
`
`genetically engineering immune cells to kill cancer cells).9
`
`
`6
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
`7
`
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
`8
`
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
`9
`
`AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
`
`Declaration of DeForest McDuff, Ph.D.
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`
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`10. Castrate-resistant prostate cancer (“CRPC”) refers to prostate cancer
`
`
`
`that is able to grow despite usage of treatments lowering androgen production.10
`
`Metastatic castrate-resistant prostate cancer (“mCRPC”) refers to CRPC that has
`
`metastasized beyond the prostate into other parts of the body.11 Studies have found
`
`that approximately 10% to 20% of patients with prostate cancer develop CRPC
`
`within 5 years of follow-up.12 Among these patients, at the time of CRPC
`
`
`10 AMERIGEN 1040: Cancer.net (ASCO Patient Website), Treatment of
`
`Metastatic Castration-Resistant Prostate Cancer,
`
`http://www.cancer.net/research-and-advocacy/asco-care-and-treatment-
`
`recommendations-patients/treatment-metastatic-castration-resistant-prostate-
`
`cancer (accessed 7/24/2015).
`
`11 AMERIGEN 1040: Cancer.net (ASCO Patient Website), Treatment of
`
`Metastatic Castration-Resistant Prostate Cancer,
`
`http://www.cancer.net/research-and-advocacy/asco-care-and-treatment-
`
`recommendations-patients/treatment-metastatic-castration-resistant-prostate-
`
`cancer (accessed 7/24/2015).
`
`12 AMERIGEN 1050: Kirby, M., C. Hirst, and E.D. Crawford (2011),
`
`“Characterising the Castration-Resistant Prostate Cancer Population: A
`
`
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`Declaration of DeForest McDuff, Ph.D.
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`diagnosis, at least 84% would already have mCRPC, and of the remaining non-
`
`
`
`metastatic patients at the time of diagnosis, 33% would develop mCRPC within
`
`two years.13
`
`
`B.
`
`Zytiga (abiraterone acetate)
`
`11. Zytiga (abiraterone acetate) is a CYP17 inhibitor indicated in
`
`combination with prednisone for the treatment of mCRPC.14 Zytiga works by
`
`
`Systematic Review,” International Journal of Clinical Practice 65(11):
`
`1180–1192, at 1180.
`
`13 AMERIGEN 1050: Kirby, M., C. Hirst, and E.D. Crawford (2011),
`
`“Characterising the Castration-Resistant Prostate Cancer Population: A
`
`Systematic Review,” International Journal of Clinical Practice 65(11):
`
`1180–1192, at 1180.
`
`14 AMERIGEN 1065: Zytiga Label, 5/20/2015, at 1.
`
`
`
`AMERIGEN 1066: Zytiga Website, How Zytiga® (abiraterone acetate)
`
`Works, https://www.zytiga.com/print/about-zytiga/how-zytiga-works
`
`(accessed 7/23/2015).
`
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`Declaration of DeForest McDuff, Ph.D.
`
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`interrupting androgen production (including, for example, testosterone) in the
`
`
`
`testes, adrenal glands, and tumor.15 Zytiga is a type of hormone therapy.16
`
`12. Zytiga’s label indicates a recommend dose of 1,000 mg (via four 250
`
`mg tablets) administered orally once daily in combination with prednisone 5 mg
`
`administered orally twice daily.17 FDA initially approved Zytiga in April 2011
`
`with an indication limited to patients whose prostate cancer progressed after
`
`
`15 AMERIGEN 1066: Zytiga Website, How Zytiga® (abiraterone acetate)
`
`Works, https://www.zytiga.com/print/about-zytiga/how-zytiga-works
`
`(accessed 7/23/2015).
`
`16 AMERIGEN 1051: Mayo Clinic Website, Prostate cancer,
`
`http://www.mayoclinic.org/diseases-conditions/prostate-
`
`cancer/basics/definition/con-20029597?p=1 (accessed 7/24/2015).
`
`
`
`AMERIGEN 1066: Zytiga Website, How Zytiga® (abiraterone acetate)
`
`Works, https://www.zytiga.com/print/about-zytiga/how-zytiga-works
`
`(accessed 7/23/2015).
`
`17 AMERIGEN 1065: Zytiga Label, 5/20/2015, at 1.
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`Declaration of DeForest McDuff, Ph.D.
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`treatment with docetaxel, a chemotherapy drug.18 In December 2012, FDA
`
`
`
`approved Zytiga for treatment of patients with or without prior chemotherapy
`
`treatment.19
`
` The ’438 patent
`C.
`
`13. U.S. Patent No. 8,822,438 (“the ’438 patent”), entitled “Methods and
`
`Compositions for Treating Cancer,” was filed on February 24, 2011 and issued on
`
`18 AMERIGEN 1046: FDA Website, Drugs@FDA – Zytiga,
`
`http://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fuseaction
`
`=Search.DrugDetails (accessed 7/23/2015).
`
`
`
`AMERIGEN 1045: FDA News Release, “FDA expands Zytiga’s use for
`
`late-stage prostate cancer,” 12/10/2012,
`
`http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm3314
`
`92.htm.
`
`19 AMERIGEN 1065: Zytiga Label, 5/20/2015, at 1.
`
`AMERIGEN 1045: FDA News Release, “FDA expands Zytiga’s use for
`
`late-stage prostate cancer,” 12/10/2012,
`
`http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm3314
`
`92.htm.
`
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`Declaration of DeForest McDuff, Ph.D.
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`September 2, 2014.20 The ’438 patent lists Alan H. Auerbach and Arie S.
`
`
`
`Belldegrum as inventors and Janssen Oncology, Inc. as assignee.21 The abstract
`
`reads as follows:22
`
`Methods and compositions for treating cancer are described herein.
`More particularly,
`the methods for
`treating cancer comprise
`administering a 17α-hydroxyalse/C17,20-lyase
`inhibitor, such as
`abiraterone acetate
`(i.e., 3β-acetoxy-17-(3-pyridyl)androsa-5,16-
`diene), in combination with at least one additional therapeutic agent
`such as an anti-cancer agent or a steroid. Furthermore, disclosed are
`compositions comprising a 17α-hydroxyalse/C17,20-layse inhibitor, and
`at least one additional therapeutic agent, such as an anti-cancer agent
`or a steroid.
`
`14.
`
`Independent claim 1, the only independent claim, reads as follows: “A
`
`method for the treatment of prostate cancer in a human comprising administering
`
`
`20 AMERIGEN 1001: Methods and Compositions for Treating Cancer, U.S.
`
`Patent No. 8,822,438 (filed 2/24/2011, issued 9/2/2014).
`
`21 AMERIGEN 1001: Methods and Compositions for Treating Cancer, U.S.
`
`Patent No. 8,822,438 (filed 2/24/2011, issued 9/2/2014).
`
`22 AMERIGEN 1001: Methods and Compositions for Treating Cancer, U.S.
`
`Patent No. 8,822,438 (filed 2/24/2011, issued 9/2/2014).
`
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`Declaration of DeForest McDuff, Ph.D.
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`to said human a therapeutically effective amount of abiraterone acetate or a
`
`
`
`pharmaceutically acceptable salt thereof and a therapeutically effective amount of
`
`prednisone.”23
`
`
`D.
`
`Prosecution of the ’438 patent
`
`15.
`
`I understand that the ’438 patent was filed in February 2011 and
`
`issued in September 2014.24 During that period, I understand that Johnson &
`
`Johnson (“J&J”) and related parties corresponded with the USPTO regarding the
`
`patentability of the presented claims.25 In particular, I understand that the USPTO
`
`rejected the presented claims several times due to obviousness and double
`
`patenting, but ultimately allowed 20 claims based on “unexpected commercial
`
`
`23 AMERIGEN 1001: Methods and Compositions for Treating Cancer, U.S.
`
`Patent No. 8,822,438 (filed 2/24/2011, issued 9/2/2014).
`
`24 AMERIGEN 1001: Methods and Compositions for Treating Cancer, U.S.
`
`Patent No. 8,822,438 (filed 2/24/2011, issued 9/2/2014).
`
`25
`
`For brevity, I refer to these entities collectively as Johnson & Johnson or
`
`J&J throughout, as appropriate.
`
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`Declaration of DeForest McDuff, Ph.D.
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`success of the launch of the drug” and withdrawal of a co-pending patent
`
`
`
`application.26 See Attachment B-1 for an overview of the prosecution timeline.
`
`III. Analysis of Commercial Success
` Economic relevance of commercial success
`A.
`
`16. Commercial success is a secondary consideration that a patent owner
`
`may use to argue that its patent is not obvious based on the alleged commercial
`
`success of an invention embodying that patent. I understand that commercial
`
`success is relevant to the determination of a patent’s obviousness since the law
`
`presumes that an idea would have been brought to market sooner in response to
`
`market forces had it been obvious to persons skilled in the art. I further understand
`
`that evidence of commercial success is only relevant if there is a nexus between the
`
`alleged commercial success and the patentable features of the asserted claims. In
`
`other words, the patent owner must show that the commercial success is
`
`
`26 AMERIGEN 1013: ’438 Patent Prosecution Documents, USPTO Action,
`
`7/3/2013, at “Detailed Action,” pp. 2–3.
`
`
`
`AMERIGEN 1039: ’438 Patent Prosecution Documents, USPTO Action,
`
`9/11/2012, at pp. 1–6.
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`attributable to the novel parts of a patent claim, and not on factors that are
`
`
`
`unrelated or were already known.
`
`17. From an economic perspective, commercial success presumes that if
`
`an idea were obvious to market participants, then others would have brought that
`
`idea to market sooner had there been material economic incentives to do so. A
`
`finding of commercial success can, in some circumstances, support the notion that
`
`a patent was not obvious to those skilled in the art if those incentives for
`
`development existed. Accordingly, analysis of commercial success frequently
`
`includes evaluation of sales, profits, market shares, prices, and other metrics to
`
`draw inferences on economic incentives for development. Importantly, since
`
`analysis of commercial success provides potential indirect inferences relating to
`
`obviousness, its informative value depends on the case-specific circumstances and
`
`whether
`
`those circumstances provided material economic
`
`incentives
`
`for
`
`development at the time of the alleged invention.
`
`
`B.
`
`J&J’s ’213 patent limits the economic relevance of commercial
`
`success
`
`18.
`
`J&J’s U.S. Patent No. 5,604,213 (“the ’213 patent”) is a blocking
`
`patent covering Zytiga and thus limits the relevance of analysis of commercial
`
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`Declaration of DeForest McDuff, Ph.D.
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`success for the ’438 patent. A blocking patent is one that effectively blocks others
`
`
`
`from making, selling, or using a product without use of that patent.27 From an
`
`economic perspective, the existence of a blocking patent that prevented others
`
`from making, selling, or using abiraterone would have limited economic incentives
`
`to develop the invention claimed in the ’438 patent.
`
`19. The ’213 patent, entitled “17-Substituted Steroids Useful in Cancer
`
`Treatment,” describes the abiraterone compound and methods for treating an
`
`androgen-dependent or estrogen-dependent disorder using that compound.28
`
`According the FDA’s Orange Book, a publication where companies list patents
`
`
`27
`See, for example: AMERIGEN 1054: Murphy et al. (2012), Patent
`
`Valuation: Improving Decision Making through Analysis, Wiley, at 102.
`
`(“A blocking patent is a patent that blocks a rights holder on a different
`
`patent from exploiting the different patented invention without a license to
`
`the blocking patent.”).
`
`28 AMERIGEN 1005: 17-Substituted Steroids Useful in Cancer Treatment,
`
`U.S. Patent No. 5,604,213 (filed 9/30/1994, issued 2/18/1997).
`
`
`
`AMERIGEN 1036: ’438 Patent Prosecution Documents, Initial Application,
`
`2/24/2011, at pp. 7, 10.
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`Declaration of DeForest McDuff, Ph.D.
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`that are asserted to cover pharmaceutical products, the ’213 patent has been alleged
`
`
`
`to cover the Zytiga product.29 The ’213 patent was filed in 1994 and issued in
`
`1997, long before the’438 patent appears to have priority back to its provisional
`
`patent application in 2006.30 According to FDA, the ’213 patent is expected to
`
`expire in December 2016.31
`
`20. From an economic perspective, the existence of the ’213 patent would
`
`have significantly reduced economic incentives for development of the technology
`
`claimed in the ’438 patent. Because Johnson & Johnson could have effectively
`
`prevented market participants from supplying an abiraterone product, typical
`
`incentives associated with drug development would not have existed. Courts have
`
`
`29 AMERIGEN 1047: FDA Website, Orange Book, Zytiga (NDA 202379),
`
`http://www.accessdata.fda.gov/scripts/cder/ob/docs/patexclnew.cfm?Appl_
`
`No=202379&Product_No=001&table1=OB_Rx (accessed 7/24/2015).
`
`30 AMERIGEN 1001: Methods and Compositions for Treating Cancer, U.S.
`
`Patent No. 8,822,438 (filed 2/24/2011, issued 9/2/2014).
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`31 AMERIGEN 1047: FDA Website, Orange Book, Zytiga (NDA 202379),
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`http://www.accessdata.fda.gov/scripts/cder/ob/docs/patexclnew.cfm?Appl_
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`No=202379&Product_No=001&table1=OB_Rx (accessed 7/24/2015).
`
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`Declaration of DeForest McDuff, Ph.D.
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`16
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`found that, in the presence of blocking rights, existence of commercial success
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`
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`provides little probative value on whether a claimed technology is obvious.32
`
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`32 AMERIGEN 1053: Merck & Co., Inc. v. Teva Pharmaceuticals USA, Inc.,
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`395 F.3d 1364, 1376–77 (Fed. Cir. 2005) (“Commercial success is relevant
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`because the law presumes an idea would successfully have been brought to
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`market sooner, in response to market forces, had the idea been obvious to
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`persons skilled in the art… In this case Merck had a right to exclude others
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`from practicing the weekly-dosing of alendronate specified in claims 23 and
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`37, given (1) another patent covering the administration of alendronate
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`sodium to treat osteoporosis, U.S. Pat. No. 4,621,077 (issued Nov. 4, 1986);
`
`and (2) its exclusive statutory right, in conjunction with FDA marketing
`
`approvals, to offer Fosamax at any dosage for the next five years. Because
`
`market entry by others was precluded on those bases, the inference of non-
`
`obviousness of weekly-dosing, from evidence of commercial success, is
`
`weak.”).
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`AMERIGEN 1057: Syntex (U.S.A.) LLC and Allergan v. Apotex, Inc. et al.,
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`407 F.3d 1371, 1383 (Fed. Cir. 2005) (““[A] high degree of commercial
`
`success permits the inference that other have tried and failed to reach a
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`Declaration of DeForest McDuff, Ph.D.
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`Thus, in the case of abiraterone, analysis of commercial success is of limited value
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`for whether material economic incentives would have been in place for
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`development of the technology claimed in the ’438 patent.
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`solution. In Merck, we held that evidence of commercial success resulted in
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`a particularly weak inference because prior art patents prevented others from
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`competing to reach the solution embodied in the claims at issue.”).
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`AMERIGEN 1048: Galderma Laboratories, L.P. et al. v. Tolmar, Inc., 737
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`F.3d 731, 740–41 (Fed. Cir. 2013) (“Where ‘market entry by others was
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`precluded [due to blocking patents], the inference of non-obviousness of [the
`
`asserted claims], from evidence of commercial success, is weak.’ This
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`principle applies forcefully to the present case. The now expired Shroot
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`patents blocked the market entry of 0.3% adapalene products until their
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`expiration in 2010, long after Galderma invented 0.3% adapalene
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`compositions of the asserted claims. As such, no entity other than Galderma
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`could have successfully brought to 0.3% to market prior to 2010. Like the
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`commercial success described in Merck & Co., the commercial success of
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`Differin® Gel, 0.3% is of ‘minimal probative value.’”).
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`Declaration of DeForest McDuff, Ph.D.
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` Unexpected commercial success is not economically relevant C.
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`21.
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`In granting the ’438 patent, the USPTO referenced the “unexpected
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`commercial success” of Zytiga as the primary factor reversing earlier rejections of
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`the patent due to obviousness.33 However, “unexpected” commercial success, if
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`any, is not relevant for an evaluation of whether material economic incentives for
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`development existed at the time of the alleged invention, as any unexpected
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`success would not have provided market participants with incentives for
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`development. I am not aware of J&J providing the USPTO with any expectations
`
`or perceptions of expected commercial success of Zytiga by the broader market
`
`prior to launch. Instead, J&J relied exclusively on measures of actual Zytiga sales,
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`including arguments based on early sales as of 2012 that were rejected by the
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`USPTO34 and arguments based on sales to date through June 2013.35
`
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`33 AMERIGEN 1013: ’438 Patent Prosecution Documents, USPTO Action,
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`7/3/2013, at “Detailed Action,” pp. 2–3.
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`
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`AMERIGEN 1039: ’438 Patent Prosecution Documents, USPTO Action,
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`9/11/2012, at pp. 1–6.
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`34 AMERIGEN 1008: ’438 Patent Prosecution Documents, Applicant
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`Response, 7/3/2012, at pp. 1–4.
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`Declaration of DeForest McDuff, Ph.D.
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`22. From an economic perspective, sales that were unexpected are not
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`
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`relevant for
`
`the secondary consideration of commercial success because
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`unexpected sales would not have incentivized market participants to develop the
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`claimed technology at the time of the alleged invention. Rather, whether market
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`participants would have had incentives to develop the claimed technology depends
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`on market incentives existing prior to drug launch. Thus, the notion of
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`“unexpected” success is not economically relevant for an evaluation of commercial
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`success.
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` Zytiga sales are more modest in appropriate context
`D.
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`23.
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`In its correspondence with the USPTO, J&J provided selected patient
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`share information for Zytiga for pre- and post-chemo patients, notably focusing on
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`Zytiga’s “almost 70% market share”, Zytiga’s “market lead[ing]” position for post-
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`
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`AMERIGEN 1039: ’438 Patent Prosecution Documents, USPTO Action,
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`9/11/2012, at pp. 1–6.
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`35 AMERIGEN 1012: ’438 Patent Prosecution Documents, Applicant
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`Response, 6/4/2013, at pp. 6–9 of 9.
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`Declaration of DeForest McDuff, Ph.D.
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`chemo patients,36 and Zytiga being “the most successful oral oncology launch in
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`
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`history.”37 However, these claims are misleading and unrepresentative of Zytiga’s
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`actual performance due to: (1) Zytiga’s lower share of the overall relevant markets,
`
`(2) J&J’s exclusive focus on patient shares instead of market shares, and (3) other
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`cancer drugs outperforming Zytiga.
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`24. First, J&J improperly focused on the significantly smaller post-chemo
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`patient population rather than providing Zytiga’s share of the broader relevant
`
`markets. Because the pre-chemo patient population is roughly three times the post-
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`chemo population,38 J&J’s references to each patient population individuals masks
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`Zytiga’s overall patient share among all mCRPC patients. Based on the ratio of
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`post-chemo to pre-chemo patients, J&J’s reported shares of 57% within post-
`
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`36 AMERIGEN 1012: ’438 Patent Prosecution Documents, Applicant
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`Response, 6/4/2013, at pp. 7–8 of 9.
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`37 AMERIGEN 1012: ’438 Patent Prosecution Documents, Applicant
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`Response, 6/4/2013, at pp. 7–8 of 9.
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`38 AMERIGEN 1036: ’438 Patent Prosecution Documents, Initial Application,
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`2/24/2011, at “Zytiga®: Most Successful Oral Oncology Launch in
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`History,” in Pharmaceuticals Commercial Overview PowerPoint, pp. 11.
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`Declaration of DeForest McDuff, Ph.D.
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`chemo and 20% within pre-chemo as of April 201339 provide an overall patient
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`
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`share of 29% within all mCRPC patients.40 Furthermore, since only about 10% to
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`20% of all prostate cancer patients develop CRPC (and many of these patients will
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`have or will develop mCRPC),41 a reasonable estimate of Zytiga’s share amongst
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`prostate cancer patients is approximately 3% to 6%.42 In other words, putting
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`Zytiga use within the broader context indicates a significantly lower patient share
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`than the ones proffered by J&J to the USPTO.
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`39 AMERIGEN 1012: ’438 Patent Prosecution Documents, Applicant
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`Response, 6/4/2013, at pp. 7–8 of 9.
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`40
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`57% × (1/4) + 20% × (3/4) = 29.25%.
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`41 AMERIGEN 1050: Kirby, M., C. Hirst, and E.D. Crawford (2011),
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`“Characterising the Castration-Resistant Prostate Cancer Population: A
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`Systematic Review,” International Journal of Clinical Practice 65(11):
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`42
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`1180-1192, at 1180.
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`29% × 10% = 2.9% and 29% × 20% = 5.8%.
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`Additionally, Zytiga’s share could be reasonably lower because not all
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`CRPC patients have or will develop mCRPC.
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`Declaration of DeForest McDuff, Ph.D.
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`25. Second, J&J’s evidence exclusively consists of patient shares that do
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`not sum to 100% rather than typical market shares considered in commercial
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`success. In cancer treatment, patient shares (i.e., the share of patients taking a
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`certain medication) overstate market shares (i.e., the share of revenues for any
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`particular treatment), since patients often take more than one medication.43
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`Accordingly, J&J’s patient shares are overstated and misleading relative to market
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`shares more commonly evaluated in commercial success.
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`26. Third, J&J’s claim that Zytiga is the “the most successful oral
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`oncology launch in history” is misleading in light of non-oral cancer drugs with
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`even greater sales. For example, there are at least nine non-oral cancer drugs with
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`annual sales substantially exceeding Zytiga (abiraterone, $2.2 billion), such as
`
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`43 AMERIGEN 1036: ’438 Patent Prosecution Documents, Initial Application,
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`2/24/2011, at “Overall US Patient Share Continues to Grow,” in
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`Pharmaceuticals Commercial Overview PowerPoint, pp. 12.
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`
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`For example, the chemo refractory chart shows Zytiga, Jevtana, and Xtandi
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`representing approximately nearly 100% of patient shares in April 2013, but
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`only about 85% in July 2012.
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`Declaration of DeForest McDuff, Ph.D.
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`Rituxan (rituximab, $7.4 billion), Avastin (bevacizumab, $6.8 billion), and
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`
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`Herceptin (trastuzumab, $6.7 billion). See Attachment B-2.
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`E.
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`Zytiga has been losing market share due to competition from
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`Xtandi
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`27.
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`In addition to more modest shares than those reported by J&J,
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`competition from Xtandi (enzalutamide) has resulted in: (1) Zytiga losing market
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`share, (2) lower pricing of Zytiga relative to Xtandi, and (3) industry expectations
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`of Xtandi becoming the premier treatment option.
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`28. First, recent data demonstrate a decline in Zytiga’s market share and
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`concurrent growth in Xtandi. In August 2012, FDA initially approved Xtandi for
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`mCRPC pa
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