IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`WOCKHARDT BIO AG
`Petitioner,
`
`v.
`
`JANSSEN ONCOLOGY, INC.,
`Patent Owner.
`
`Case No. IPR2016-01582
`U.S. Patent No. 8,822,438 B2
`
`DECLARATION OF
`CHRISTOPHER A. VELLTURO, PH.D.
`IN SUPPORT OF PATENT OWNER RESPONSE
`
`
`
`
`
`
`
`
`
`
`
`
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`PROTECTIVE ORDER MATERIAL
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`JANSSEN EXHIBIT 2115
`Wockhardt v. Janssen IPR2016-01582
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`

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`
`
`Table of Contents
`
`Page(s)
`
`I.
`
`INTRODUCTION AND SUMMARY ........................................................... 1
`
`A. Qualifications and Experience ............................................................. 2
`
`B.
`
`C.
`
`Evidence Considered ............................................................................ 3
`
`Summary of Opinions .......................................................................... 3
`
`II.
`
`BACKGROUND ............................................................................................ 6
`
`A.
`
`B.
`
`C.
`
`D.
`
`Prostate Cancer ..................................................................................... 7
`
`Demand for mCRPC Treatment ........................................................... 8
`
`ZYTIGA® ............................................................................................ 9
`
`The Patent-at-Issue ............................................................................. 10
`
`III. CONSIDERATION OF THE STONER DECLARATION ......................... 10
`
`A. Overview of Dr. Stoner’s Contentions ............................................... 11
`
`B.
`
`The ’213 Patent as a Purported “Blocking Patent” Does Not
`Negate a Commercial Success Assessment ....................................... 14
`
`1.
`
`2.
`
`3.
`
`Overview .................................................................................. 14
`
`Development and License Attempts of Abiraterone
`Acetate...................................................................................... 15
`
`Dr. Stoner’s Contention that the ’213 Patent’s Licensing
`History is “insufficient to show applicability…to nexus”
`Does Not Withstand Scrutiny .................................................. 17
`
`C.
`
`Dr. Stoner’s Assessment of Nexus is Incomplete .............................. 21
`
`D. Dr. Stoner’s Analysis Concerning the Relevance of
`ZYTIGA®’s “Unexpected Commercial Success” Is Misplaced
`and Incorrect ....................................................................................... 23
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`PROTECTIVE ORDER MATERIAL
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`E.
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`Dr. Stoner’s Mischaracterization of ZYTIGA®’s Marketplace
`Performance ........................................................................................ 25
`
`IV. AFFIRMATIVE ASSESSMENT ................................................................. 31
`
`A.
`
`B.
`
`Evaluation of Marketplace Success ................................................... 31
`
`ZYTIGA®’s Commercial Success Is Due in Significant Part to
`the Claims of the ’438 Patent ............................................................. 36
`
`1.
`
`2.
`
`3.
`
`4.
`
`The ’438 Patent Covers the Only FDA-Approved Use of
`ZYTIGA® ................................................................................ 37
`
`Physicians Value ZYTIGA® – The Combination of
`Abiraterone Acetate and Prednisone – for its Therapeutic
`Survival Benefit ....................................................................... 37
`
`ZYTIGA®’s Commercial Success Is Not Attributable to
`Excessive Marketing Spend Levels ......................................... 41
`
`ZYTIGA®’s Commercial Success Is Not Due to
`Aggressively Low Pricing ........................................................ 43
`
`V.
`
`CONCLUSION ............................................................................................. 44
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`PROTECTIVE ORDER MATERIAL
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`I.
`
`I, Christopher A. Vellturo, hereby declare and state as follows:
`
`INTRODUCTION AND SUMMARY
`1.
`
`I have been retained as a consultant on behalf of Janssen Oncology,
`
`Inc. (“Janssen”), the patent owner in the present proceeding. I understand that the
`
`petition names Wockhardt Bio AG (“Wockhardt” or “petitioner”). I have no
`
`financial interest in, or affiliation with, the petitioner or the patent owner.
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`Quantitative Economic Solutions, LLC, a consulting firm of which I am the
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`founder and president, is being compensated for my work at my usual and
`
`customary hourly consulting rate of $850.1 QES’s compensation is not dependent
`
`upon the outcome of, or my testimony in, the present inter partes review or any
`
`litigation proceedings.
`
`2.
`
`I have been asked to evaluate the analyses and conclusions put forth on
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`behalf of the petitioner by Dr. Robert D. Stoner in his declaration (“the Stoner
`
`Declaration”).2 I have also been asked to independently evaluate the commercial
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`success of the combination therapy of abiraterone acetate and prednisone –
`
`
`1 QES is also compensated for the time spent on this matter by persons working at
`
`my direction. Those rates are lower than my hourly rate.
`
`2 Declaration of Robert D. Stoner, Ph.D., August 9, 2016 (Ex. 1077).
`
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`marketed by Janssen as ZYTIGA®3 – and the extent to which ZYTIGA®’s
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`commercial success is causally linked to the patent claims in U.S. Patent No.
`
`8,822,438 B2 (“the ’438 patent” or the “Patent-at-Issue”).
`
`A. Qualifications and Experience
`3. My qualifications and experience relevant to the issues in this
`
`proceeding are summarized below. My curriculum vitae is submitted herewith as
`
`Exhibit 2045.
`
`4.
`
`I am the founder and president of Quantitative Economic Solutions,
`
`LLC, a microeconomic consulting firm. I received a Doctor of Philosophy degree
`
`(Ph.D.) in Economics from the Massachusetts Institute of Technology in
`
`Cambridge, Massachusetts in 1989. My fields of specialization include industrial
`
`organization and econometrics.
`
`5.
`
`I have extensive experience in the valuation of intellectual property
`
`and in the assessment of economic injury/damages sustained as a result of
`
`
`3 As used herein, unless otherwise stated, the term “ZYTIGA®” refers to
`
`ZYTIGA® therapy, i.e., abiraterone acetate in combination with prednisone for the
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`treatment of patients with metastatic castration-resistant prostate cancer. (See Ex.
`
`1052).
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`PROTECTIVE ORDER MATERIAL
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`copyright, trademark, and/or patent infringement. Industries that I have studied in
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`this context include: pharmaceutical products, over-the-counter medications and
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`instruments, medical devices, consumer products, computer hardware and
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`software, and semiconductors. I have also evaluated pharmaceutical patent issues
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`in the context of commercial success and injunctive relief considerations on
`
`numerous occasions. I have been qualified and have testified as an expert in many
`
`Federal Courts throughout the United States as an expert in economics, statistics,
`
`survey design and implementation, as well as an expert specifically in the
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`economics of the pharmaceutical industry.
`
`B.
`6.
`
`Evidence Considered
`
`I have reviewed and relied on the articles and other documents and
`
`data cited in this declaration. The specific documents I have reviewed are listed in
`
`Appendix A of my declaration.
`
`C.
`7.
`
`Summary of Opinions
`
`I have reviewed Dr. Stoner’s assessment of commercial success of
`
`ZYTIGA® as it relates to the ’438 patent. At no point does Dr. Stoner conclude
`
`that ZYTIGA®’s marketplace performance does not constitute a commercial
`
`success – rather Dr. Stoner contends that “Janssen cannot show there is a nexus
`
`between the commercial sales of Zytiga® and the claims at issue of the ’438
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`PROTECTIVE ORDER MATERIAL
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`Patent…[because] other dynamics extrinsic to the ’438 Patent are responsible for
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`those sales” (Ex. 1077 (Stoner Decl.) ¶ 12).
`
`8. Dr. Stoner’s declaration reflects a mischaracterization of the evidence
`
`regarding the marketplace success of ZYTIGA®, and a misapplication of
`
`economic principles underlying a nexus consideration with respect to the ’438
`
`patent. Specifically, I find:
`
` Dr. Stoner’s opinion that the prior existence of IP relating to abiraterone acetate
`(specifically, U.S. Patent No. 5,604,213, “the ’213 patent”) represented a
`“blocking patent” issue that would have deterred investment in further
`development efforts by others to discover inventions claimed by the ’438 patent
`is superficial:
`
` Importantly, Dr. Stoner incorrectly states that “Janssen has held exclusive
`rights in the ’213 Patent to commercialize abiraterone acetate for nearly 20
`years since 1997.” This is simply untrue and serves as a false pillar
`underlying Dr. Stoner’s opinions with respect to the ’213 patent;
`
` When fully investigated, Dr. Stoner’s claim can be dismissed by noting that
`licensing rights from the ’213 patent were available for abiraterone acetate
`for substantial periods of time in the relevant period;
`
` Dr. Stoner opines that the “unexpected commercial success” cited during the
`prosecution of the ’438 patent is a form of success that is not relevant to a
`commercial success analysis – the premise for Dr. Stoner’s discussion is
`incomplete and his reasoning is incorrect:
`
` In its final Notice of Allowance, the USPTO does not reference
`“unexpected” commercial success;
`
` Dr. Stoner’s reasoning is flawed and confuses incentives to find a solution to
`substantial physician and patient demand (the relevant incentive of overall
`expected demand for a solution) with the unexpected ability of ZYTIGA® to
`have met this demand;
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`PROTECTIVE ORDER MATERIAL
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` Dr. Stoner does not conclude that ZYTIGA® is not a commercial success,
`though he does mischaracterize the available evidence in an apparent attempt to
`deemphasize the extent of ZYTIGA®’s commercial success:
`
` Dr. Stoner’s attempts to temper the significance of the substantial net sales
`and associated shares of sales of ZYTIGA® – a blockbuster drug – establish
`an untenable standard of commercial success that few drugs would meet;
`
` Dr. Stoner states, without support, that “economic showing of commercial
`success necessitates…a demonstration that the drug has been profitable” – a
`hurdle that I understand is not a legal requirement and, if considered,
`ZYTIGA® would likely meet;
`
` Indeed, ZYTIGA®’s continued commercial success in the face of significant
`new competition from drugs like XTANDI® reinforces the commercial
`significance ZYTIGA® has had and continues to have in treating metastatic
`castration-resistant prostate cancer (“mCRPC”).
`
`9.
`
`I have undertaken an assessment of the degree of commercial success
`
`realized by ZYTIGA® and evaluated the question regarding the nexus between
`
`such success and the inventions covered by the claims of the ’438 patent. Based
`
`on the evidence available to me, I conclude:
`
` ZYTIGA® has been commercially successful:
`
` ZYTIGA® has generated more than $4.5 billion in U.S. net sales from the
`time of its launch through 2016;
`
` In both 2015 and 2016, ZYTIGA®’s U.S. net sales topped $1 billion – a
`level commonly referred to “blockbuster drug” status;
`
` ZYTIGA®’s U.S. net sales have increased each year since its launch despite
`entry of competitor drugs used to treat mCRPC;
`
` Per Janssen’s historical share assessment methodology, the share of all
`mCRPC patients treated with ZYTIGA® stabilized above 25% – a
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`considerable share of a multi-billion-dollar marketplace – in 2015 and 2016;
`per Janssen’s current share assessment methodology, ZYTIGA®’s share is
`even higher – more than 30% in 2015 and 2016.
`
` The commercial success of ZYTIGA® is due in significant part to use of a
`therapeutically effective amount of abiraterone acetate in combination with a
`therapeutically effective amount of prednisone for prostate cancer treatment –
`use that I understand embodies the claims of the ’438 patent:
`
` The only FDA-approved indication of ZYTIGA® calls for use of
`abiraterone acetate in combination with prednisone – use that I understand is
`covered by the claims of the ’438 patent;
`
` The considerable majority of ZYTIGA® use – indeed, use associated with
`between at least 87 and 93 percent of ZYTIGA® patients – is in
`combination with prednisone for the treatment of prostate cancer – use that I
`understand is covered by the claims of the ’438 patent;
`
` Physicians value treatment using the combination of abiraterone acetate and
`prednisone for its anti-tumor benefits related to patients’ increased life
`expectancy (survival);
`
` ZYTIGA®’s commercial success is not due to exceptional levels of
`promotional expenditure nor is it attributable to aggressive or low prices.
`
`10. This declaration and the opinions expressed herein are based on my
`
`analysis of the information I have considered to date. I may supplement, refine, or
`
`revise my analysis as appropriate if additional testimony, documents or other
`
`discovery materials become available.
`
`II. BACKGROUND
`11. To provide an economic perspective for this action, I first provide
`
`background on the condition that ZYTIGA® is used to treat – namely prostate
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`PROTECTIVE ORDER MATERIAL
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`cancer. I then discuss factors affecting demand and supply for drugs used to treat
`
`prostate cancer. Finally, I discuss the Patent-at-Issue and my understanding of the
`
`inventions it covers.
`
`A.
`Prostate Cancer
`12. Prostate cancer is a form of cancer that develops in the prostate gland,
`
`a male organ that produces the seminal fluid that nourishes and transports sperm in
`
`the human body. (See Ex. 2098.) Its cells rely on testosterone, a male androgen or
`
`hormone, to grow. Prostate cancer is the most common non-skin cancer to occur
`
`in American males. (See Ex. 2100.)
`
`13. Castration-resistant prostate cancer (“CRPC”) refers to the disease
`
`state in which prostate cancer continues to grow, despite use of drugs to lower
`
`male androgen levels. (See Ex. 2099). CRPC is evidenced by either a continuous
`
`rise in prostate-specific antigen (“PSA”) levels, pre-existing disease progression,
`
`and/or the appearance of new metastases.4 (See Ex. 2109 at S72.) Metastatic
`
`castration-resistant prostate cancer (“mCRPC”) refers to CRPC that has then
`
`metastasized (i.e., spread) to other parts of the body. (See Ex. 2099.) mCRPC
`
`
`4 “Metastases” refers to the process by which cancer cells spread into normal tissue
`
`in other parts of the body. (See, e.g., Ex. 2105).
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`PROTECTIVE ORDER MATERIAL
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`patients’ cancer has progressed and spread beyond the prostate gland, despite
`
`previous treatment to lower testosterone levels. (See Ex. 1048 at 2).
`
`B. Demand for mCRPC Treatment
`14. The major participants in prescribing decisions for prostate cancer,
`
`including CRPC and mCRPC, are healthcare professionals and their patients. The
`
`primary treating physicians for patients with prostate cancer are typically either
`
`urologists or oncologists. Physicians classify individuals with prostate cancer as
`
`either pre-chemotherapy (chemo-naïve) patients or chemo-refractory patients. Pre-
`
`chemotherapy patients have not yet undergone a chemotherapy treatment for
`
`prostate cancer.
`
` Chemo-refractory patients have received chemotherapy
`
`treatment(s) for prostate cancer that were either partially or fully ineffective. (See
`
`Ex. 2103).
`
`15.
`
`In general, the effective treatment of a given condition or disorder is a
`
`fundamental factor affecting prescribing decisions. I understand from Patent
`
`Owner’s expert, Dr. Matthew Rettig, that in the case of mCRPC, both treating
`
`physicians and patients evaluate anti-tumor effects as the key treatment attribute to
`
`consider. Further, in the realm of mCRPC drug development, the primary
`
`emphasis is the improvement in the patient’s life expectancy (i.e., survival), which
`
`is a goal of clinicians, researchers, and patients. Physicians and patients evaluate
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`efficacy of mCRPC treatments based upon survival; while a patient’s level of
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`prostate-specific antigen (“PSA”) and radiographic responses are important, the
`
`ultimate objective is to improve survival with treatment. (See Ex. 2038 (Rettig
`
`Decl.) ¶¶ 68, 257).
`
`16. Certain therapies used to treat mCRPC – including ZYTIGA® – are
`
`indicated for use in combination with prednisone. (See Ex. 1052.) Prednisone is in
`
`the class of drugs known as glucocorticoids, which work to mimic the effects of
`
`naturally-produced hormones in the human body. (See Ex. 2102.)
`
`C. ZYTIGA®
`17.
`I understand from Dr. Rettig that in the 2004 – 2010 time period,
`
`chemotherapy treatment, commonly using the drug docetaxel (which is marketed
`
`as Taxotere), was the only mCRPC treatment that was associated with modest
`
`improvements in survival rates of mCRPC patients.5
`
`18. Abiraterone acetate was approved by the FDA on April 28, 2011, and
`
`is marketed by Janssen in combination with prednisone, as per its FDA-approved
`
`use, as ZYTIGA®. (See Ex. 1058.) ZYTIGA® was initially indicated for the
`
`treatment of patients with mCRPC who have received prior chemotherapy
`
`
`5 Conversation with Dr. Matthew Rettig, September 28, 2016; see also Ex. 2104.
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`containing docetaxel. (See Ex. 2168.) On December 10, 2012, ZYTIGA®’s
`
`indication was modified to include treatment of patients with mCRPC regardless of
`
`prior docetaxel treatment. Every FDA-approved use for ZYTIGA® calls for its
`
`use in combination with prednisone. It is available as an oral tablet at a
`
`recommended dose of 1,000 mg (taken in four 250 mg tablets) administered orally
`
`once daily; it is to be taken in combination with prednisone (5 mg), administered
`
`twice daily. (See Ex. 1052.)
`
`D. The Patent-at-Issue
`19.
`I understand the Patent-at-Issue is U.S. Patent No. 8,822,438 (“the
`
`’438 patent”), which issued on September 2, 2014. (Ex. 1001.) I further
`
`understand based on my conversation with Dr. Matthew Rettig that the ’438 patent
`
`covers a method for treating prostate cancer by the administration of a
`
`therapeutically effective amount of abiraterone acetate (or a pharmaceutically
`
`acceptable salt thereof) and a therapeutically effective amount of prednisone. I
`
`understand that when used as directed on its label, ZYTIGA®’s use practices the
`
`’438 patent.
`
`III. CONSIDERATION OF THE STONER DECLARATION
`20.
`In this section, I review the commercial success analysis set forward by
`
`Dr. Robert Stoner in his declaration. First, I summarize Dr. Stoner’s principal
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`contentions. I then assess his discussion of certain elements that he asserts
`
`preclude ZYTIGA®’s performance from providing “objective
`
`indicia of
`
`nonobviousness of the ’438 patent” in the current matter and his characterization of
`
`ZYTIGA®’s marketplace success. I note Dr. Stoner does not conclude that
`
`ZYTIGA® has not been a marketplace success and that his attempts to temper
`
`ZYTIGA®’s impressive marketplace performance fail to undermine ZYTIGA®’s
`
`clear marketplace success. I further find his attempts to call into question the
`
`economic relevance of ZYTIGA®’s marketplace success and the nexus of such
`
`success to the claims of the ’438 patent fail to withstand economic scrutiny.
`
`A. Overview of Dr. Stoner’s Contentions
`21. Dr. Stoner begins by laying out his standard for “economic relevance
`
`and the definitions of commercial success and nexus.” (Ex. 1077 (Stoner Decl.) ¶¶
`
`24-28.) He notes that “evidence of commercial success is only relevant if there is a
`
`link or ‘nexus’ between the alleged commercial success and the patentable features
`
`of the asserted claims” and adds that commercial success must be “attributable to
`
`the alleged novel parts of a patent claim, and not on extrinsic factors…that are
`
`unrelated or were already known in the prior art.” (Id. at ¶ 27.)
`
`22. Next, Dr. Stoner discusses U.S. Patent No. 5,604,213 (“the ’213
`
`patent”) – a patent which I understand covers a class of compounds including
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`abiraterone acetate. (Ex. 1077 (Stoner Decl.) § IV.B.1.) He contends that the ’213
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`patent effectively served as a “blocking patent” for abiraterone acetate, which
`
`prevented others from “making, using, selling, offering to sell, or importing any
`
`abiraterone composition,” (Id. at ¶ 37) and thus its existence “would have limited
`
`economic incentives to develop the invention claimed in the ’438 patent.” (Id. at ¶
`
`39.)
`
`23. Dr. Stoner contends that the following additional factors “indicate a
`
`lack of nexus between the alleged invention and sales of Zytiga.” (Id. at ¶ 33):
`
` Dr. Stoner states that he understands from Dr. Godley that methods for treating
`patients with combinations of drugs are common in the marketplace for cancer
`treatment, including combinations encompassing a glucocorticoid (Id. at ¶ 46);
`
` Dr. Stoner states that he understands from Dr. Godley “that prednisone was
`previously known to have some degree of additive anti-cancer activity” and
`therefore “accompanies several types of prostate cancer therapies” (Id. at ¶¶ 48
`– 49), though he proceeds to state his understanding that “the addition of
`prednisone is unlikely to add more than nominal enhancement of anti-cancer
`effects” (Id. at ¶ 53);
`
` Dr. Stoner states that he understands that in its correspondence with the
`USPTO, Janssen has provided “no credible evidence” to demonstrate that the
`coadministration of abiraterone and prednisone provides an anti-cancer benefit
`that was “unexpected” (Id. ¶ 50) and that the addition of prednisone to the
`administration of abiraterone “has not been shown to have any unexpected
`synergistic benefit” (Id. ¶ 53).
`
`24. Finally, Dr. Stoner makes the following characterizations regarding
`
`ZYTIGA®’s marketplace performance:
`
` ZYTIGA® faces competition from XTANDI®:
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` ZYTIGA®’s share of the mCRPC marketplace has declined with
`“concurrent growth in Xtandi’s® share” (Id. ¶ 56);
`
` “Xtandi® earns premium pricing relative to Zytiga®” (Id. ¶ 57);
`
` Several Wall Street analyst coverage reports the “market perception that
`Xtandi® is superior to Zytiga®” and the expectation that Xtandi® will
`become the “premier treatment” (Id. ¶ 58);
`
` J&J is currently investing in new drug formulations “to compete with
`Xtandi®” (Id. ¶¶ 55, 58).
`
` “Unexpected” commercial success is “not particularly relevant to determining
`nonobviousness,” and Janssen has not provided the USPTO with evidence of
`expectations of ZYTIGA® sales that existed prior to launch (Id. ¶¶ 59 – 61);
`
` Janssen has not demonstrated ZYTIGA®’s profitability and return on
`investment (Id. at ¶ 65); and
`
` ZYTIGA®’s sales share as of April 2013 among all mCRPC patients was 29%,
`and its share among all prostate cancer patients was approximately 3 to 6% (Id.
`at ¶ 69).
`
`25. As noted above, Dr. Stoner neither concludes nor disputes that
`
`ZYTIGA® has constituted a marketplace success, though he does apparently
`
`attempt to deemphasize that success. He also raises certain points that he contends
`
`undermine the “relevance” of ZYTIGA®’s marketplace success. In this section, I
`
`assess Dr. Stoner’s affirmative contentions regarding ZYTIGA®’s marketplace
`
`success and its economic relevance in this matter. I conclude that nothing in Dr.
`
`Stoner’s discussion calls into dispute the overwhelming marketplace success of
`
`ZYTIGA®. I further conclude that the economic relevance of ZYTIGA®’s
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`marketplace success is not materially limited by the factors raised by Dr. Stoner,
`
`nor do these factors temper the nexus between such success and the claims of the
`
`’438 patent.
`
`B.
`
`26.
`
`The ’213 Patent as a Purported “Blocking Patent” Does Not
`Negate a Commercial Success Assessment
`1. Overview
`I understand the ’213 patent covers the abiraterone acetate compound.
`
`It claims a priority date of March 31, 1992, was issued on February 18, 1997, and
`
`was originally assigned to British Technology Group, Ltd. (“BTG”). (Ex. 1030.)
`
`The ’438 patent claims a priority date of August 25, 2006 and was issued on
`
`September 2, 2014 and assigned to Janssen. (Ex. 1001.)
`
`27.
`
`In the present matter, Dr. Stoner has argued that the ’213 patent would
`
`have significantly limited economic incentives for those in the industry without
`
`access to the ’213 patent to find and develop the technology covered by the ’438
`
`patent. Dr. Stoner has further argued that the licensing activity surrounding the
`
`’213 patent is “insufficient to show applicability of commercial success and nexus”
`
`because such activity comprised a product license rather than a patent license, that
`
`the license acted as an exclusive license, and that Boehringer failed to
`
`commercialize abiraterone (Ex. 1077 (Stoner Decl.) ¶¶ 41 – 44).
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`28.
`
`In this context, I consider the historical development of abiraterone
`
`acetate and the economic incentives that were in place for developers to search for
`
`the ’438 patented invention in the years leading up to the 2006 priority date and
`
`2014 issuance of the ’438 patent. When the salient facts are properly considered,6
`
`the ’213 patent did not serve as a disincentive to the industry to discover the
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`invention claimed in the ’438 patent, as numerous opportunities arose that
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`provided access to the ’213 patent.
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`2.
`Development and License Attempts of Abiraterone Acetate
`29. Early development work of the inventions underlying the ’213 patent
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`was conducted in the 1990s by scientists at the U.K.-based Institute of Cancer
`
`Research (“ICR”), which assigned rights for abiraterone acetate’s development to
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`BTG. (See Ex. 1030; Ex. 1035 at 1.) I understand that Boehringer Ingelheim
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`partnered with ICR and BTG in the 1996 – 1999 period, during which time the
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`’213 patent issued and the parties conducted Phase I clinical trials of abiraterone
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`acetate in humans for the first time. (Ex. 2028 (Judson Decl.) ¶¶ 3, 5-6.)
`
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`6 Dr. Stoner’s summary and analysis of the ’213 patent incorrectly attributes
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`exclusive rights for the patent since 1997 to Janssen. (Ex. 1077 (Stoner Decl.) ¶
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`42; Ex. 2160 (Stoner Tr.) 77:24 – 85:12.)
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`30.
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`I further understand that following these trials and the submission of a
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`final report in 1999, Boehringer Ingelheim suspended its involvement in the
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`development of abiraterone acetate (Id. at ¶ 7) and that ICR/Royal Marsden
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`undertook a search for an alternative commercial partner, during which “a number
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`of major multinational pharmaceutical companies were approached.” (Id.)
`
`31. The search for licensees in the ensuing years fell squarely within the
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`bounds of BTG’s central business strategy. As explained in BTG’s annual reports
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`from this period:
`
` BTG stated that it was a “leader in technology commercialisation” with a
`“central strategy…to create a … business by acquiring, developing, and
`commercialising important life and physical science technologies…” (Ex. 2137
`at 4-5);
`
` Further, BTG’s “two most common commercial routes [were] licensing the
`technology … and creating a venture …” (Ex. 2137 at 5);
`
` BTG explained that its licensing route for technology commercialization
`entailed “licensing [the technology] to a corporation that will complete
`development and market the resulting product, in return for a combination of a
`downpayment, milestone payments and a royalty on product sales” (Ex. 2138 at
`3).
`
`32. BTG documented its application of this general business strategy to
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`abiraterone on a BTG webpage in 2002, explaining that it owned the rights to
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`abiraterone acetate, noting abiraterone’s patent protection which included coverage
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`under the ’213 patent, and stating that BTG was seeking licensees. (Ex. 2155
`
`(Butler Affidavit).)
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`33.
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`Initially, none of the approached parties elected to support taking
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`abiraterone acetate into further trials. (Ex. 2028 (Judson Decl.) ¶ 7.) Rights under
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`the ’213 patent went unclaimed for almost five years, until April 2004 when
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`Cougar Biotechnology Inc. (“Cougar”) executed a license for the rights to
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`“develop and commercialize” abiraterone acetate. (Id. at ¶ 9.) Johnson & Johnson
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`(Janssen’s parent company) acquired Cougar in 2009. (See Ex. 2101.) An
`
`examination of the above history of the rights to the ’213 patent reveals an
`
`important dynamic. In the several years leading up to the 2006 priority date of the
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`’438 patent (i.e., approximately 1999-2004), licensing rights to abiraterone acetate
`
`were available and indeed actively shopped by the ’213 patent owner. Thus, for
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`significant periods of time immediately preceding the priority date for the ’438
`
`patent, the incentives relevant to the commercial success inquiry were broadly
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`available.
`
`3.
`
`Dr. Stoner’s Contention that the ’213 Patent’s Licensing
`History is “insufficient to show applicability…to nexus”
`Does Not Withstand Scrutiny
`34. Dr. Stoner disregards the relevance of the above licensing history of
`
`the ’213 patent, citing three purported bases. First, Dr. Stoner states that since
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`“Janssen asserts that only the drug—and not the ’213 Patent—was licensed…there
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`still may have been little incentive to develop the product claimed in the ’438
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`Patent owing to the risk of patent infringement,” (Ex. 1077 (Stoner Decl.) ¶ 41).
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`As a matter of economics, a relevant consideration in this case is the extent to
`
`which the owner of the purported “blocking patent” may have refused to make
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`rights to the “blocking patent” available to others and any potential resulting
`
`effects on third parties’ incentives to have searched for the newly patented
`
`invention. As mentioned above, the owner of the purported “blocking patent” was
`
`BTG – a company in the express business of commercializing technologies via
`
`joint ventures and licensing, not via unilateral development, manufacture, and sale
`
`of these technologies. Thus, presently there was no incentive on the part of the
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`purported “blocking patent” owner to withhold rights from third parties who could
`
`contribute to the technology’s development. Thus, proper consideration of this
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`history in fact demonstrates the existence of the very economic incentives to
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`search for the ’438 patented invention that Dr. Stoner claims were precluded or
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`dampened by the existence of the ’213 patent.
`
`35. Second, Dr. Stoner contends that the lack of information regarding the
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`historical ’213 patent license’s exclusivity and field-of-use elements precludes him
`
`from “determining the ability of other pharmaceutical companies to commercialize
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`an abiraterone-containing product,” noting that if a license to the purported
`
`blocking patent were exclusive, third parties would not be able to develop the
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`invention covered by the ’438 patent. (Ex. 1077 (Stoner Decl.) ¶ 42.) This claim
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`fails as a matter of logic, since, as established above, such licensing rights were
`
`widely available for the 1999-2004 time frame, and thus third parties were not
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`“blocked” by others’ refusal to license their exclusive rights to the ’213 patent. Of
`
`course, ultimately the developer of the newly patented invention in the present case
`
`(Cougar/Janssen) was a third party who did so having acquired rights to the
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`purported “blocking patent” via licensing. Thus, Dr. Stoner’s speculative
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`hypothetical is contradicted by the actual history of abiraterone’s development.
`
`36. Further to this point, Dr. Stoner mistakenly claims that “Janssen has
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`held exclusive rights in the ’213 Patent to commercialize abiraterone acetate for
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`nearly 20 years (since 1997),” ostensibly implying that Janssen could have
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`excluded all other parties from commercializing the ’438 patented invention at any
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`point from 1997
`
`through 2016 (Id.).
`
` When asked about
`
`this factual
`
`misunderstanding at his deposition, Dr. Stoner appears to retract his statement,
`
`noting that “I don’t think that there’s any misunderstanding. I think it was a
`
`mistake” (Ex. 2160 (Stoner Tr.) at 82:21-22) an