UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________
`
`WOCKHARDT BIO AG,
`Petitioner
`v.
`JANSSEN ONCOLOGY, INC.,
`Patent Owner
`____________________________
`
`Case IPR: Unassigned
`U.S. Patent No. 8,822,438
`____________________________
`
`
`
`
`DECLARATION OF ROBERT D. STONER, Ph.D.
`
`
`
`
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`WCK1077
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`

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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`TABLE OF CONTENTS
`
`
`I. 
`
`Introduction ..................................................................................................... 1 
`
`A. 
`
`B. 
`
`Background and Qualifications ............................................................. 1 
`
`Scope of Work ....................................................................................... 2 
`
`II. 
`
`Summary of Opinions ..................................................................................... 7 
`
`III.  Background ................................................................................................... 12 
`
`A. 
`
`B. 
`
`C. 
`
`D. 
`
`E. 
`
`Prostate cancer ..................................................................................... 12 
`
`Zytiga® (abiraterone acetate) .............................................................. 13 
`
`The ’438 Patent ................................................................................... 14 
`
`Prosecution of the ’438 Patent ............................................................ 15 
`
`The ’213 “blocking” Patent ................................................................. 15 
`
`IV.  Analysis of Commercial Success ................................................................. 16 
`
`A. 
`
`B. 
`
`C. 
`
`D. 
`
`Economic relevance and the definitions of commercial
`success and nexus relative to objective indicia of
`nonobviousness ................................................................................... 16 
`
`Lack of nexus between the performance of Zytiga® and the
`’438 Patent claims ............................................................................... 20 
`
`1. 
`
`2. 
`
`J&J’s ’213 Patent serves as a “blocking patent,” and
`undermines the relevance of commercial success at to
`the ’438 patent .......................................................................... 22 
`Any features of the ’438 Patent arguably driving
`Zytiga®’s sales already existed in the prior art and are
`not relevant ............................................................................... 28 
`
`Xtandi® has taken Zytiga®’s market share ........................................ 32 
`
`“Unexpected” commercial success of Zytiga® is neither
`economically nor legally relevant to objective indicia of
`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`nonobviousness of the ’438 Patent, and the performance
`metrics for Zytiga® presented during the prosecution of the
`’438 Patent are misleading and incomplete ........................................ 38 
`
`E. 
`
`Janssen has not shown that Zytiga® is a commercial success ............ 40 
`
`V. 
`
`Conclusion .................................................................................................... 46 
`
`
`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`I, Robert D. Stoner, Ph.D., declare as follows:
`
`I.
`
`Introduction
`A. Background and Qualifications
`1.
`I am over the age of eighteen and otherwise competent to make this
`
`declaration. I have personal knowledge of the facts set forth in this Declaration and
`
`am competent to testify to the same.
`
`2.
`
`I am a Principal at Economists Incorporated, and an expert in
`
`industrial organization, with more than twenty five years of experience in
`
`consulting, antitrust, and economic research. I provide expert witness testimony
`
`and consulting in a variety of areas, including reasonable royalties, commercial
`
`success, damages estimation, and business strategy.
`
`3. My expertise and experience encompass a variety of topics, including
`
`intellectual property, competition, antitrust, utility regulation, international trade,
`
`commercial litigation, and class action. My work in intellectual property spans the
`
`life sciences (with specific industry expertise in pharmaceuticals, medical devices
`
`and drug wholesaling) as well as electronics (including computer memory, digital
`
`music, smart phones, text messaging and telecommunications). I have worked on
`
`projects in a diverse range of other industries (such as pharmaceutical data, electric
`
`utilities, grocery stores, casinos, hospital beds, automobiles and oil refining and
`
`marketing). I frequently provide expertise and analysis in evaluating commercial
`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`success in the pharmaceutical industry.
`
`4.
`
`I earned my Ph.D. and M.A. in Economics from Berkeley, University
`
`of California in 1978 and 1976, respectively, and my B.A. in Economics from
`
`Santa Cruz, University of California in 1970. At Santa Cruz, I received both
`
`General Honors and Honors in Economics. I have also published research in
`
`several peer-reviewed academic journals.
`
`5.
`
`I am educated and experienced in economics, as detailed in this
`
`Declaration. My qualifications and credentials are also fully set forth in my
`
`curriculum vitae, provided as WCK1078. I understand that my declaration will be
`
`included in Petitioner's Exhibit List as WCK1077. I have examined and am
`
`familiar with the contents of WCK1048-1080. Each of these Exhibits is publicly
`
`available, or derived from documents that are publicly available, and is a true and
`
`correct copy of the documents cited, including but not limited to the following:
`
`WCK1048, WCK1052, WCK1054, WCK1057, WCK1059, WCK1060,
`
`WCK1061, WCK1063, WCK1065, WCK1067, WCK1068, WCK1069,
`
`WCK1070, WCK1071, WCK1073 and WCK1080.
`
`B.
`6.
`
`Scope of Work
`
`I have been retained on behalf of Wockhardt Bio AG (“Wockhardt” or
`
`“Petitioner”) in connection with the above-captioned inter partes review (“IPR”). I
`
`am being compensated at a rate of $595 per hour for my work. My compensation is
`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`not dependent on the substance of my testimony or the outcome of this matter.
`
`7.
`
`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 (the “’438 Patent” or the “Patent-at-
`
`Issue”).1 (WCK1001.)
`
`8.
`
`I understand that Alan H. Auerbach and Arie S. Belldegrum are the
`
`named inventors and that, according to the United States Patent and Trademark
`
`Office (“USPTO”) records, the ’438 Patent is currently assigned to JANSSEN
`
`ONCOLOGY, INC. (“Janssen” or “Patent Owner”). (WCK1001.)
`
`9.
`
`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
`
`
`1 I understand that the Patent Trial and Appeal Board instituted trial in Amerigen
`
`Pharms. Ltd. v. Janssen Oncology, Inc., IPR2016-00286 on May 31, 2016. I also
`
`understand that in conjunction with the petition, Amerigen filed the declaration of
`
`DeForest McDuff dated December 4, 2015 (the “McDuff Declaration”). I reviewed
`
`the McDuff Declaration. I also reviewed the declaration of Ivan T. Hofmann, filed
`
`in conjunction with Mylan Pharmaceuticals Inc.'s petition for inter partes review
`
`(IPR2016-01332).
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`subjects discussed. I have also reviewed, considered, or relied upon documents and
`
`other materials, which are cited in the table below:
`
`Wockhardt
`Exhibit #
`
`Description
`
`1001
`
`1030
`
`1031
`
`1048
`
`1049
`
`1050
`
`1051
`
`1052
`
`1053
`
`Auerbauch, A. H. & Belldegrum, A. S., U.S. Patent No. 8,822,438
`(filed Feb. 24, 2011; issued Sep. 2, 2014) (“the ’438 patent”)
`Barrie, S. E. et al, U.S. Patent No. 5,604,213 (filed Sep. 30, 1994;
`issued Feb. 18, 1997)
`File History for U.S. Patent No. 8,822,438
`Mayo Clinic Website, Prostate cancer,
`http://www.mayoclinic.org/diseasesconditions/prostate-
`cancer/basics/definition/con-20029597?p=1 (last accessed Aug. 8,
`2016)
`Cancer.org (ACS), “What are the key statistics about prostate
`cancer?”
`http://www.cancer.org/cancer/prostatecancer/detailedguide/prostate-
`cancer-key-statistics (last accessed Aug. 10, 2016)
`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 Aug. 9, 2016)
`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
`Zytiga Label (Mar. 20, 2015),
`http://www.accessdata.fda.gov/drugsatfda_docs/label/2015/202379s
`018lbl.pdf (accessed Aug. 9, 2016)
`Zytiga Website, How Zytiga® (abiraterone acetate) Works,
`https://www.zytiga.com/print/about-zytiga/how-zytiga-works (last
`accessed Aug. 8, 2016)
`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`
`Wockhardt
`Exhibit #
`
`Description
`
`1054
`
`1055
`
`1056
`
`1057
`
`1058
`
`1059
`
`1060
`
`1061
`
`1062
`
`1063
`
`1064
`
`Mayo Clinic Website, Hormone Therapy for Prostate Cancer,
`http://www.mayoclinic.org/tests-procedures/hormone-therapy-for-
`prostate-cancer/home/ovc-20201738 (last accessed Aug. 8, 2016).
`FDA Website, Drugs@FDA – Zytiga,
`http://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fu
`seaction=Search.DrugDetails (last accessed Aug. 8, 2016)
`FDA News Release, “FDA expands Zytiga’s use for late-stage
`prostate cancer,” 12/10/2012,
`http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/u
`cm331492.htm (last accessed Aug. 8, 2016)
`Wells Fargo Securities, LLC., “Johnson & Johnson,” 6/29/2015.
`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 (last
`accessed Aug. 8, 2016)
`Murphy, William J., John L. Orcutt, and Paul C. Remus (2012),
`Patent Valuation: Improving Decision Making through Analysis,
`Hoboken, NJ: Wiley
`Cowen & Company, “Quick Take – Johnson & Johnson,”
`William Blair, “Biotechnology – Zytiga Fourth-Quarter Sales Imply
`Xtandi Strength,” 1/22/2013
`Zytiga Brochure, Putting Prednisone in Perspective, 3/2015
`Jevtana Website, Dosing and Administration,
`http://www.jevtana.com/hcp/dosing/default.aspx (last accessed Aug.
`8, 2016)
`FDA News Release, “FDA Approves New Treatment for Advanced
`Prostate Cancer,” 06/17/2010,
`http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/u
`cm216143.htm (last accessed Aug. 8, 2016)
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`
`Wockhardt
`Exhibit #
`
`Description
`
`1065
`
`1066
`
`1067
`
`1068
`
`1069
`
`1070
`
`1071
`
`1072
`
`1073
`
`1074
`
`Nasdaq.com, “One Drug To Rule Them All: Medivation’s Xtandi
`To Dominate Prostate Cancer Market,” available at
`http://www.nasdaq.com/article/one-drug-to-rule-them-all-
`medications-xtandi-to-dominate-prostate-cancer-market-cm376782
`(last accessed Aug. 8, 2016)
`Medivation Press Release, “U.S. FDA Approves New Indication for
`the Use of XTANDI® (Enzalutamide) Capsules for Patients With
`Metastatic Castration-Resistant Prostate Cancer,” 9/10/2014,
`http://investors.medivation.com/releasedetail.cfm?ReleaseID=87026
`7 (last accessed Aug. 8, 2016)
`UBS Research, “Medivation – A Look at the Growth and Share in
`Prostate Cancer,” 2/3/2014
`Wedbush Securities, Inc., “Medivation: Zytiga Market Share
`Decline Accelerates From Last Quarter,” 7/14/2015
`RBC Capital Markets (via Barron’s Website), “Xtandi Beats
`Casodex, Set to Top Zytiga,” 4/3/2015,
`http://www.barrons.com/articles/xtandi-beats-casodex-set-to-top-
`zytiga-1428075331 (last accessed Aug. 8, 2016)
`Cowen & Company, “Biotechnology Quarterly,” 7/2/2012.
`Credit Suisse, “Prostate Cancer – Implications of Zytiga’s Pre-
`Chemo Approval,” 12/11/2012
`UBS Investment Research, “Johnson & Johnson – Zytiga Label
`Extended,” 12/10/2012
`William Blair, “Medivation, Inc. – Looking into Recent
`Weaknesses,” 7/15/2015
`Bloomberg.com, “Tesaro Rises on $85 Million J&J Cancer Drug
`Licensing Deal,” available at
`www.bloomberg.com/news/articles/2016-04-06/j-j-to-pay-85-
`million-to-license-tesaro-cancer-drug-rights (last accessed Aug. 9,
`2016)
`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`
`Wockhardt
`Exhibit #
`
`Description
`
`1075
`
`1076
`
`1078
`
`1080
`
`Scherer, F.M., et al., (Eds.). (1990). Industrial Market Structure and
`Economic Performance, Third Ed. Boston, MA: Houghton Mifflin
`Company.
`Investor Words, “hurdle rate,” accessed at
`http://www.investorwords.com/2362/hurdle_rate.html (last accessed
`Aug. 8, 2016)
`Dr. Robert D. Stoner’s Curriculum Vitae
`IMS Health Data, 2012–2015 (submitted in Amerigen Pharms. Ltd.
`v. Janssen Oncology, Inc., IPR2016-00286, Ex. 1067)
`
`10. This declaration summarizes only my current opinions, which are
`
`subject to change depending upon additional information, and related analysis, that
`
`comes to light as this or related proceedings progresses. 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.
`
`II.
`
`Summary of Opinions
`11.
`
`I provide this declaration in support of Wockhardt’s IPR petition
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`concerning objective indicia of non-obviousness.2 Specifically, I have been asked
`
`to evaluate the “commercial success” of Zytiga®, including an inquiry as to
`
`whether any substantial level of sales can be attributed to the formulations and
`
`methods claimed in the ’438 Patent, as opposed to other drivers such as feature of
`
`the claims that already existed in the prior art, other patent or market exclusivities,
`
`or other commercial drivers such as marketing and promotion.3
`
`
`2 I understand that objective indicia of non-obviousness are sometimes called
`
`secondary considerations of non-obviousness, and hence these terms will be used
`
`interchangeably in my report.
`
`3 It is my understanding that “commercial success” is a legal term of art that is used
`
`as a secondary indicia of non-obviousness of patent(s) being contested. I further
`
`understand that in order for “commercial success” to indicate non-obviousness of
`
`the contested patent(s), it must be shown both that: (a) the product allegedly
`
`embodying the patent(s) achieved financial success; and (b) there is a nexus
`
`between that success and the patent(s) in suit. Such a nexus would not exist if, for
`
`example, the financial success of the product were due to: (i) elements of the prior
`
`art that would have predicted the success; (ii) blocking patents or other external
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`factors that would interfere with the economic incentive of a third party to develop
`
`the patented invention; and/or (iii) evidence that the financial success was a
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`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`12. Based on the information available to me and my analysis to date, I
`
`have reached the following conclusions:
`
` First, even assuming that Janssen can establish that Zytiga®’s sales
`
`were considered substantial or “commercially successful” for
`
`purposes of objective indicia, Janssen cannot show there is a nexus
`
`between commercial sales of Zytiga® and the claims at issue of the
`
`’438 Patent. Rather, the record evidence demonstrates that other
`
`dynamics extrinsic to the ’438 Patent are responsible for those sales.
`
` Such extrinsic factors include the existence of the ’213 patent, which
`
`serves as a classic “blocking patent” in this case, which allowed
`
`Janssen to exclude others from the market and served to limit the
`
`economic incentives of third parties to develop a competing regimen
`
`to that claimed in the ’438 Patent at issue here. Likewise, I understand
`
`that upon its approval on April 28, 2011, Zytiga® was awarded a 5-
`
`year period of statutory exclusivity where no third party could even
`
`apply for FDA-approval for a competing product. That exclusivity,
`
`coupled with the ’213 patent, in my opinion created a significant
`
`function of marketing/promotion of the product rather than intrinsic qualities that
`
`were the embodiment of the patent.
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`obstacle to competition, both of which have nothing to do with the
`
`’438 patent, that are responsible for Zytiga®’s sales and market
`
`position.
`
` Second, to the extent that the ’438 Patent has any relevance to
`
`Zytiga®’s commercial sales, it is my understanding that the features
`
`of the claims that contribute to sales, if any, already existed in the
`
`prior art, are not novel or nonobvious, and therefore are not relevant to
`
`the question of commercial success as an objective indicia of non-
`
`obviousness. I understand that both abiraterone and prednisone were
`
`previously known to have anti-cancer effects, and their combination
`
`had predictable (non-synergistic) effects that drove the sales of
`
`Zytiga®. Thus, even assuming Zytiga® had substantial sales,
`
`revenues, market share, profits, and return on investment, Janssen
`
`cannot demonstrate that the commercial sales of Zytiga® are a direct
`
`result of any arguably novel features of the ’438 Patent claims at
`
`issue.
`
` Third, while Zytiga has enjoyed substantial sales, the evidence I have
`
`seen indicates that competition from Xtandi® (enzalutamide) has
`
`resulted in Zytiga® losing share of both pre- and post-chemo
`
`metastatic castrate-resistant prostate cancer (“mCRPC”) sales.
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`Zytiga® is priced below Xtandi®, with the likelihood that Xtandi®
`
`will become the premier treatment option. It is also my understanding
`
`that Zytiga®’s share of the larger pre-chemo mCRPC patient
`
`population (where it was approved later) is significantly smaller than
`
`in the post-chemo population. Based on the record that I have seen,
`
`this reflects a drawback that Zytiga® must be used in combination
`
`with prednisone, while more recent pre-chemo mCRPC drugs, such as
`
`Xtandi®, while equally or more efficacious, can be used alone, i.e., as
`
`a monotherapy. As such, not only does the combination of Zytiga®
`
`with prednisone not have synergistic effects, but the combination also
`
`has weaknesses relative to more recent mCRPC drugs.
`
` Third, any “unexpected” commercial success, if it occurred at all, is
`
`not relevant for an evaluation of commercial success as an indicia of
`
`nonobviousness.
`
` And fourth, Janssen has not made a showing in this matter that
`
`Zytiga®’s sales, though appearing significant on the surface,
`
`constitute a commercial success in the economic sense of high
`
`profitability and rate of return above benchmark J&J levels. I am not
`
`aware of any complete data produced by Janssen on profits or return
`
`on investment for Zytiga®, both of which are relevant to an economic
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`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`showing of commercial success.
`
`III. Background
`A.
`Prostate cancer
`13. Prostate cancer occurs in the male prostate, a small “gland that
`
`produces the seminal fluid that nourishes and transports sperm.” (WCK1048.)
`
`“Prostate cancer is one of the most common types of cancer in men,”(WCK1048)
`
`with a one-in-seven lifetime risk of being diagnosed.(WCK1049.) In recent years,
`
`estimates for prostate cancer suggest over 220,000 new cases and more than
`
`27,000 deaths annually in the US alone.(Id.)
`
`14. Patients diagnosed with prostate cancer may undergo a variety of
`
`treatments options, including: (1) active surveillance (i.e., no action taken until
`
`disease progresses) (WCK1048); (2) radiation therapy (i.e., using high-powered
`
`energy to kill cancer cells) and surgical removal of the prostate (id.); (3)
`
`chemotherapy (i.e., using drugs to kill cancer cells) (id.); (4) hormone therapy (e.g.,
`
`interrupting production of testosterone to kill or slow growth of cancer cells) (id.);
`
`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) (id.).
`
`15. Castrate-resistant prostate cancer (“CRPC”) refers to prostate cancer
`
`that is able to grow despite usage of treatments lowering androgen
`
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`production.(WCK1050.) Metastatic castrate-resistant prostate cancer (“mCRPC”)
`
`refers to CRPC that has metastasized beyond the prostate into other parts of the
`
`body.(Id.) Studies have found that approximately 10% to 20% of patients with
`
`prostate cancer develop CRPC within 5 years of follow-up.(WCK1051, 1180.)
`
`Among these patients, at the time of CRPC 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. (Id.)
`
`B.
`Zytiga® (abiraterone acetate)
`16. Zytiga® (abiraterone acetate) is a CYP17 inhibitor indicated in
`
`combination with prednisone for the treatment of mCRPC.(WCK1052, 1;
`
`WCK1053.) Zytiga® works by interrupting androgen production (including, for
`
`example, testosterone) in the testes, adrenal glands, and tumor. (WCK1053.)
`
`Zytiga® is a type of hormone therapy (WCK1048), usually when prostate cancer
`
`persists or recurs despite previous hormone therapy. (WCK1054.)
`
`17. Zytiga®’s label indicates a recommended dose of “1,000 mg ([via]
`
`four 250 mg tablets) administered orally once daily in combination with
`
`prednisone 5 mg administered orally twice daily.” (WCK1052, 1.) The FDA
`
`initially approved Zytiga® in April 2011 with a label indication of use limited to
`
`patients whose prostate cancer progressed after treatment with docetaxel, a
`
`chemotherapy drug. (WCK1055; WCK1056.) In December 2012, the FDA
`
`13
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`WCK1077
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`approved Zytiga® for treatment of patients with or without prior chemotherapy
`
`treatment. (WCK1052, 1; WCK1056.) And in March 2015, Zytiga®’s label was
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`enhanced to reflect that “Zytiga plus prednisone provides a statistically significant
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`[overall survival] benefit vs. prednisone alone.” (WCK1057, 1-2.) Nonetheless, it
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`is my understanding that “the label enhancement does not appear to be having a
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`meaningful impact in driving Zytiga share or demand volume.” (Id., 2.)
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`C. The ’438 Patent
`18. 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
`
`September 2, 2014. (WCK1001.) I understand a provisional application was filed
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`on August 25, 2006.
`
`19. The ’438 patent abstract reads as follows (id.):
`
`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.
`20.
`Independent claim 1, the only independent claim, reads as follows: “A
`
`method for the treatment of prostate cancer in a human comprising administering
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`to said human a therapeutically effective amount of abiraterone acetate or a
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`pharmaceutically acceptable salt thereof and a therapeutically effective amount of
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`prednisone.” (Id.)
`
`D.
`21.
`
`Prosecution of the ’438 Patent
`
`I understand that the ’438 Patent was filed in February 2011 (with a
`
`prior provisional filing in August 2006) and issued in September 2014. (Id.) During
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`the period between filing and issuance, I understand that Johnson & Johnson
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`(“J&J”) and related parties corresponded with the USPTO regarding the
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`patentability of the presented claims.4
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`22.
`
`In particular, I understand that the USPTO rejected the presented
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`claims several times due to obviousness and double patenting, and at least twice
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`for lack of evidence of commercial success, but ultimately allowed 20 claims based
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`on “unexpected commercial success of the launch of the drug” and withdrawal of a
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`co-pending patent application. (WCK1031, 206.) See Attachment B-1 for an
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`overview of the prosecution timeline.
`
`E.
`The ’213 “blocking” Patent
`23. U.S. Patent No. 5,604,213 (“the ’213 Patent”), entitled “17-
`
`
`4 For brevity, I refer to these entities collectively as Johnson & Johnson or J&J
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`throughout, as appropriate.
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`Substituted Steroids Useful in Cancer Treatment,” describes the abiraterone
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`compound and methods for treating an androgen-dependent or estrogen-dependent
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`disorder (such as prostate cancer) using that compound. (WCK1030.) According to
`
`the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations
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`(i.e., “Orange Book,” an electronic database listing all approved prescription drugs
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`along with a listing of patents relevant to those drugs, the ’213 Patent is listed in
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`connection with Zytiga®. (WCK1058.) The ’213 Patent was filed in 1994 and
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`issued in 1997. (WCK1001.) According to the FDA, the ’213 Patent is expected to
`
`expire in December 2016. (WCK1058.)
`
`IV. Analysis of Commercial Success
`A. Economic relevance and the definitions of commercial success and
`nexus relative to objective indicia of nonobviousness
`
`24.
`
`I understand that an obviousness analysis involves comparing a patent
`
`claim to the prior art to determine whether the claimed invention would have been
`
`obvious to a person of ordinary skill in the art in view of the prior art, and in light
`
`of the general knowledge in the art. I also understand that, if it is determined that a
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`person of ordinary skill in the art would have reached the claimed invention
`
`through routine experimentation, the invention may be deemed obvious. I also
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`understand that obviousness can be established by a person of ordinary skill in the
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`art combining or modifying the teachings of the prior art to achieve the claimed
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`invention.
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`I further understand that, when determining the obviousness of an
`
`25.
`
`invention, one should also consider whether there are any objective indicia that
`
`support the non-obviousness of the invention.
`
`26.
`
`I understand that one of the objective indicia that may be considered
`
`when determining the obviousness of an invention is the commercial success of a
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`product allegedly embodying the patented claims. It is also my understanding that
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`“commercial success” is a legal construct that has been established through case
`
`law. Analysis of commercial success is premised on the concept that if a product is
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`economically successful and that success has a legal nexus to the patent claims in
`
`question, it may provide objective evidence of nonobviousness.
`
`27.
`
`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 (by third parties) in response to market forces had it been
`
`obvious to persons skilled in the art. I further understand that evidence of
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`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. In
`
`other words, the patent owner must show that the commercial success is
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`attributable to the alleged novel parts of a patent claim, and not on extrinsic factors
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`(e.g., regulatory/other patent exclusivities or strong marketing/advertising efforts)
`
`that are unrelated or were already known in the prior art. I also understand that if
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`purported commercial success is due to an element in the prior art, no nexus exists.
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`In essence, I understand that if the feature that drives the purported commercial
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`success was known in the prior art, or wasn’t novel to the patent claims, such
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`success is not pertinent. I also understand that if economic success arises from an
`
`unpatented feature of the product, the success is not relevant for the purposes of a
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`“commercial success” analysis. 
`
`28. Finally, I understand that an applicant asserting commercial success to
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`overcome an obviousness rejection must come forward with evidence to establish
`
`both that the product was economically successful as well that there is a nexus
`
`between the claimed invention and any purported economic success.
`
`29. From an economic perspective, a “commercial success” analysis
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`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 (i.e., the likelihood of economic profits) to do so. A finding of
`
`“commercial success,” in some circumstances, supports the notion that a patent
`
`was not obvious to those skilled in the art. Accordingly, analysis of “commercial
`
`success” frequently includes evaluation of sales, market shares, prices, profits,
`
`return on investment, 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
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Declaration of Robert D. Stoner, Ph.D. (Exhibit 1077)
`on the case-specific circumstances and whether those circumstances provided
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`material economic incentives for development at the time of the alleged invention.
`
`30.
`
`I also understand that courts have found that commercial success may
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`not provide objective indicia of nonobviousness for asserted claims of patents
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`where the underlying product (or in the case of pharmaceuticals, the underlying
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`compound) is protected by a patent and/or regulatory exclusivity that prevents
`
`competition in the market. That is because the existence of blocking patents
`
`disincentivizes third parties from pursuing a solution to a market demand if the
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`solution would infringe a blocking patent. In this respect, I understand that a
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`blocking patent is one that effectively blocks others from making, selling, or using
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`a product without use of that patent.5 Finally, I understand that if