`
`Filed: February 2, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`ACRUX DDS PTY LTD. & ACRUX LIMITED
`Petitioners,
`
`v.
`
`KAKEN PHARMACEUTICAL CO., LTD. and
`VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
`Patent Owner and Licensee
`
`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
`
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
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`
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`TABLE OF CONTENTS
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`Case IPR2017-00190
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`Page(s)
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`I.
`
`II.
`
`INTRODUCTION ........................................................................................... 1
`
`TECHNOLOGY BACKGROUND ................................................................. 7
`
`A. Onychomycosis ..................................................................................... 7
`
`B.
`
`Structure and Composition of Human Nail ........................................... 7
`
`C. Onychomycosis was Difficult to Treat ............................................... 10
`
`D.
`
`E.
`
`F.
`
`G.
`
`Topical Treatments for Onychomycosis Were Ineffective ................. 11
`
`The Invention ...................................................................................... 13
`
`The ’506 Patent ................................................................................... 15
`Jublia® .................................................................................................. 16
`
`III. GROUNDS 1-3 SHOULD BE DENIED BECAUSE THE
`INVENTION WAS REDUCED TO PRACTICE BEFORE OGURA
`WAS ALLEGEDLY PUBLISHED .............................................................. 17
`
`IV. THE PETITION DOES NOT MEET THE REQUIREMENTS FOR
`INSTITUTING INTER PARTES REVIEW .................................................. 20
`
`A. All Grounds of the Petition Should Be Denied Because
`Petitioner Fails to Construe Critical Claim Terms .............................. 20
`
`B.
`
`The Petition Fails to Show a Reasonable Likelihood that the
`Challenged Claims Are Unpatentable Grounds 1-6 ....................... 22
`
`1.
`
`2.
`
`3.
`
`The Level of Skill in the Art ..................................................... 23
`
`Treating Onychomycosis was Highly Unpredictable ............... 24
`
`The Petition Provides Insufficient Evidence to Explain
`Why a POSA Would Have Combined the Kaken
`Abstracts With Any of the Nail Lacquer/Solution
`References Grounds 4-6 ....................................................... 30
`
`i
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`Case IPR2017-00190
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`4.
`
`The Petition Provides Insufficient Evidence to Explain
`Why a POSA Would Have Combined Ogura With Any
`of the Nail Lacquer References Grounds 1-3 ...................... 43
`
`V.
`
`SECONDARY CONSIDERATIONS SUPPORT THE NON-
`OBVIOUSNESS OF THE CLAIMS ............................................................. 48
`
`VI. CONCLUSION .............................................................................................. 49
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`
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`
`ii
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`
`
`TABLE OF AUTHORITIES
`
`Case IPR2017-00190
`
` Page(s)
`
`Cases
`Coal. for Affordable Drugs V LLC v. Hoffman-LaRoche Inc.,
`IPR2015-01792, Paper 14 (P.T.A.B., Mar. 11, 2016) ........................................ 22
`
`Coal. for Affordable Drugs VI LLC v. Celgene Corp.,
`IPR2015-001169, Paper 22 (P.T.A.B., Nov. 16, 2015) ...................................... 39
`
`Cooper v. Goldfarb,
`154 F.3d 1321 (Fed. Cir. 1998) .......................................................................... 18
`
`In re Dow Chem. Co.,
`837 F.2d 469 (Fed. Cir. 1988) ...................................................................... 42, 47
`
`Dr. Reddy’s Labs., Inc. v. Pozen Inc.,
`IPR2015-00802, Paper 28 (P.T.A.B., Oct. 9, 2015) ........................................... 33
`
`Dynamic Drinkware LLC v. Nat’l Graphics, Inc.,
`IPR2013-00131, Paper 42 (P.T.A.B. Sept. 12, 2014) ................................... 17, 19
`
`Endo Pharms, Inc. v. Depomed, Inc.,
`IPR2014-00652, Paper 68 (P.T.A.B., Sept. 16, 2015)........................................ 43
`
`Jiawei Tech. (HK) Ltd. v. Richmond,
`
`IPR2014-00938, Paper 20 (P.T.A.B. Dec. 16, 2014) ......................................... 20
`IPR2014-00938, Paper 27 (P.T.A.B. Jan. 13, 2015) .......................................... 20
`
`KSR International Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ...................................................................................... 29, 48
`
`Loral Fairchild Corp. v. Matushita Elec. Indus. Co., Inc.,
`266 F.3d 1362-63 (Fed. Cir. 2001) ..................................................................... 19
`
`Mahurkar v. C.R. Bard, Inc.,
`79 F.3d 1572 (Fed. Cir. 1996) ...................................................................... 17, 19
`
`Minerva Surgical, Inc. v. Hologic, Inc.,
`IPR2016-00680, Paper 8 (P.T.A.B., Sept. 12, 2016) .......................................... 22
`
`iii
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`
`
`
`Otsuka Pharm. Co., Ltd. v. Sandoz Inc.,
`678 F.3d 1280 (Fed. Cir. 2012) .......................................................................... 46
`
`Case IPR2017-00190
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`SAS Inst., Inc. v. Complement Soft, LLC.,
`825 F.3d 1341 (Fed. Cir. 2016) .......................................................................... 21
`
`Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors
`USA, Inc.,
`617 F.3d 1296 (Fed. Cir. 2010) .......................................................................... 48
`
`Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc.,
`231 F.3d 1339 (Fed. Cir. 2000) .......................................................................... 33
`
`Zetec, Inc. v. Westinghouse Electric Co.,
`IPR2014-00384, Paper 10 (P.T.A.B. July 23, 2014) .......................................... 20
`
`Statutes
`
`35 U.S.C. § 103(a) ................................................................................................... 48
`
`35 U.S.C. § 312(a)(3) ........................................................................................... 4, 20
`
`35 U.S.C. § 313 .......................................................................................................... 1
`
`35 U.S.C. § 314(a) ................................................................................... 4, 20, 21, 24
`
`Other Authorities
`
`37 C.F.R. § 42.65(a) ................................................................................................. 45
`
`37 C.F.R. § 42.100(b) .............................................................................................. 21
`
`37 C.F.R. §§ 42.104(b)(3), (4) ............................................................................. 4, 20
`
`37 C.F.R. § 42.107 ..................................................................................................... 1
`
`
`
`iv
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`
`
`Exhibit
`
`Exhibit 2001
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`Exhibit 2002
`
`Exhibit 2003
`
`Exhibit 2004
`
`Exhibit 2005
`
`Exhibit 2006
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`Exhibit 2007
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`Exhibit 2008
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`Exhibit 2009
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`Exhibit 2010
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`Exhibit 2011
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`Exhibit 2012
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`Case IPR2017-00190
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`PATENT OWNER’S EXHIBIT LIST
`
`Description
`
`Declaration of Yoshiyuki Tatsumi (Japanese)
`
`Research and Development Activity Report, dated May
`28, 1999 (Japanese)
`
`Declaration of Yoshiyuki Tatsumi (English)
`
`Research and Development Activity Report, dated May
`28, 1999 (English)
`
`Certificate of Translation: Declaration of Yoshiyuki
`Tatsumi
`
`Certificate of Translation: Research and Development
`Activity Report
`
`Richard K. Scher & Lisa M. Coppa, Advances in the
`Diagnosis and Treatment of Onychomycosis, 34 HOSP.
`MED. 11 (1998)
`
`Robert Baran et al., ONYCHOMYCOSIS: THE CURRENT
`APPROACH TO DIAGNOSIS AND THERAPY (1999)
`
`Markus Niewerth & Hans C. Korting, Management of
`Onychomycoses, 58 DRUGS 283 (1999)
`
`Boni E. Elewski, Onychomycosis: Pathogenesis,
`Diagnosis, and Management, 11 CLINICAL MICROBIOLOGY
`REVS. 415 (1998)
`
`Bradley D. Castellano, Chapter 23: Tinea Pedis and
`Onychomycosis: Overview of New Systemic Therapies, in
`RECONSTRUCTIVE SURGERY OF THE FOOT AND LEG (Nancy
`S. Vickers, ed., 1997)
`
`Gouri V. Gupchup & Joel L. Zatz, Structural
`Characteristics and Permeability Properties of the Human
`Nail: A Review, 50 J. COSMETIC SCI. 363 (1999)
`
`v
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`
`
`
`
`Exhibit
`
`Exhibit 2013
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`Exhibit 2014
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`Exhibit 2015
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`Exhibit 2016
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`Exhibit 2017
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`Exhibit 2018
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`Exhibit 2019
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`Exhibit 2020
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`Case IPR2017-00190
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`Description
`
`Antonella Tosti & Bianca M. Piraccini, Chapter 18:
`Biology of Nails, in FITZPATRICK’S DERMATOLOGY IN
`GENERAL MEDICINE (Irwin M. Freedberg et al., eds., 5th
`ed. 1999)
`
`Yoichi Kobayashi et al., Drug Permeation Through the
`Three Layers of the Human Nail Plate, 51 J. PHARMACY &
`PHARMACOLOGY 271 (1999)
`
`Sudaxshina Murdan, Drug Delivery to the Nail Following
`Topical Application, 236 INT’L J. PHARMACEUTICALS 1
`(2002)
`
`Yoshiyuki Tatsumi et al., Therapeutic Efficacy of
`Topically Applied KP-103 Against Experimental Tinea
`Unguium in Guinea Pigs in Comparison with Amorolfine
`and Terbinafine, 46 ANTIMICROBIAL AGENTS &
`CHEMOTHERAPY 3797 (2002)
`
`James Q. Del Rosso, The Role of Topical Antifungal
`Therapy for Onychomycosis and the Emergence of Newer
`Agents, 7 J. CLINICAL & AESTHETIC DERMATOLOGY 10
`(2014)
`
`Brian McCurdy, The Top Ten Innovations in Podiatry, 26
`PODIATRY TODAY 1 (2013),
`http://www.podiatrytoday.com/top-ten-innovations-
`podiatry-1
`
`Kenneth A. Walters et al., Physicochemical
`Characterization of the Human Nail: Solvent Effects on
`the Permeation of Homologous Alcohols, 37 J. OF
`PHARMACY & PHARMACOLOGY 771 (1985)
`
`Kenneth A. Walters et al., Physicochemical
`Characterization of the Human Nail: Permeation Pattern
`for Water and the Homologous Alcohols and Differences
`with Respect to the Stratum Corneum, 35 JOURNAL OF
`PHARMACY & PHARMACOLOGY 28 (1983)
`
`vi
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`
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`Exhibit
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`Exhibit 2021
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`Exhibit 2022
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`Case IPR2017-00190
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`Description
`
`Kenneth A. Walters, Chapter 22: Ungual Formulations:
`Topical Treatment of Nail Diseases, in TREATMENT OF
`DRY SKIN SYNDROME: THE ART AND SCIENCE OF
`MOISTURIZERS (Marie Lodén & Howard I. Maibach, eds.,
`2012)
`
`Acrux Files New Intellectual Property Application for
`Onychomycosis Product, ACRUX (Nov. 2, 2016),
`http://www.asx.com.au/asxpdf/20161102/pdf/43cldkvypcq
`j00.pdf
`
`vii
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`
`
`I.
`
`INTRODUCTION
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`Case IPR2017-00190
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`Patent Owner Kaken Pharmaceutical Co., Ltd. (“Kaken”) submits this
`
`Preliminary Response under 35 U.S.C. § 313 and 37 C.F.R. § 42.107, responding
`
`to Petitioners’ Acrux DDS Pty Ltd. and Acrux Limited (“Petitioner”)’s Petition for
`
`Inter Partes Review (“the Petition”) of claims 1 and 2 of U.S. Patent No.
`
`7,214,506 (“the ’506 patent”). The challenged claims are directed to a novel
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`method for treating fungal infections of the nail (known as “onychomycosis”), by
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`topically administering to the nail a therapeutically effective amount of an
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`antifungal compound known as KP-103 or efinaconazole. Efinaconazole is the
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`active pharmaceutical ingredient in Patent Owner’s FDA-approved product for
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`onychomycosis, Jublia®.
`
`Onychomycosis is a disfiguring and, at times, painful, fungal infection of the
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`nail affecting as many as 25% to 40% of adults over 60. Ex. 2007, 3. At the time
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`of the invention, onychomycosis was “notoriously difficult to treat.” Id.; see also
`
`Ex. 2008, 10. The prior art was replete with experimental antifungal medications
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`that proved, at best, of
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`limited utility, or more often, useless against
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`onychomycosis. See infra §II.D. For instance, antifungal compounds that worked
`
`for skin infections did not work for nail, due at least in part to well-known
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`differences between skin and nail. See infra §§II.B, II.D. Further complicating
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`1
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`
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`matters, the art lacked a reliable method to assess the effectiveness of an antifungal
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`Case IPR2017-00190
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`agent in the nail. See infra §II.E.
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`Despite
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`the continued desire
`
`for a
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`topical
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`treatment option
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`for
`
`onychomycosis, topical agents in particular had met “little success.” Ex. 2008, 10;
`
`see also Ex. 2009, 4 (discussing “reasons for the failure of topical treatment”). In
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`fact, while “most skin infections” were treatable with topical antifungal agents, it
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`was believed that “the treatment of onychomycosis require[d] systemic therapy.”
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`Ex. 2011, 6 (emphasis added). At the time of invention, the only FDA-approved
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`medications for onychomycosis were oral, systemic treatments associated with
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`undesirable and even severe side effects. See, e.g., Ex. 2010, 10-14; Ex. 2008, 10,
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`20. These systemic treatments were often combined with surgical approaches,
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`chemical abrasion, or removal of the nail plate. See, e.g., 2010, 15; see also Ex.
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`2008, 13-18; Ex. 2011, 1, 4-5. Nail abrasion or removal was not only
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`uncomfortable and unsightly, but also of limited utility in resolving the infection.
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`See Ex. 2010, 15; see also Ex. 2008, 13-18. With these treatments, the cure rate
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`was low, and the relapse rate was high. See, e.g., Ex. 2009, 8-9.
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`Against this backdrop, the inventors, identified a new model to more
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`accurately assess therapeutic efficacy. Using this model, they discovered that KP-
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`103 was a viable candidate to topically treat onychomycosis, which led to the
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`FDA-approved product Jublia®. Jublia® launched in June 2014 and is considered
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`2
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`
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`“the most effective and leading topically applied treatment on the market for
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`Case IPR2017-00190
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`onychomycosis.” Ex. 2022, 1; Ex. 1043, 1. There are 3.5 million annual
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`prescriptions of Jublia®, and it enjoys tremendous success in the marketplace. See
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`Ex. 2022, 1.
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`Ignoring the failures and skepticism in the prior art, the unpredictability in
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`treating onychomycosis, and the marked success of Jublia®, Petitioner contends
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`that the challenged claims would have been rendered obvious by the combination
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`of Ogura (Grounds 1-3) or the Kaken Abstracts (Grounds 4-6) with one of three
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`references (either JP ’639, the ’367 patent, or Hay) directed to so-called “nail
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`lacquer” formulations containing different antifungal agents. All of these grounds
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`should be denied.
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`The Ogura-based grounds (Grounds 1-3) should be summarily denied
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`because objective evidence demonstrates that Kaken reduced the claimed invention
`
`to practice months before Ogura was allegedly published. An internal Kaken
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`report, dated May 28, 1999, records results from testing that met all of the claim
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`limitations and includes the recognition that KP-103 would work for the intended
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`3
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`
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`purpose of treating onychomycosis. This document establishes an actual reduction
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`Case IPR2017-00190
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`to practice prior to October 1999, 1 and therefore antedates Ogura.
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`In addition, all grounds (Grounds 1-6) should be denied because Petitioner
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`failed
`
`to construe several claim
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`terms as required by 37 C.F.R. §§
`
`42.104(b)(3), (4), and therefore cannot satisfy the statutory requirement under 35
`
`U.S.C. § 312(a)(3) to identify the challenge to each claim with particularity or
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`show a reasonable likelihood to prevail under 35 U.S.C. § 314(a). More
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`specifically, the Petition fails to address the proper construction of the terms “nail,”
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`“onychomycosis,” and “therapeutically effective amount.” Petitioner’s failure to
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`construe the terms “nail” and “onychomycosis” is particularly problematic because
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`each alleged ground of unpatentability relies on interpreting “nail” as including
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`what it characterizes as “skin structures” surrounding the nail, and thus implicitly
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`and incorrectly broadens the meaning of onychomycosis to include infections that
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`may not involve the nail. Petitioner provides no evidence to support its
`
`interpretation, and no analysis to explain why it is reasonable under the broadest
`
`reasonable interpretation (“BRI”) standard. Furthermore, Petitioner fails to
`
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`1 Although Petitioner did not establish a date by which Ogura was actually
`
`available to the public, Patent Owner has not challenged the publication date of
`
`October of 1999, solely for purposes of this Preliminary Response.
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`4
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`
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`construe and, in fact, completely ignores the claim term “therapeutically effective
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`Case IPR2017-00190
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`amount.”
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` Yet delivering a
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`therapeutically effective amount
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`to combat
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`onychomycosis via topical administration was exactly the need in the prior art and
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`the solution attained by the inventors of the challenged claims.
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`Finally, all grounds (Grounds 1-6) of the Petition should be denied because
`
`Petitioner provides insufficient evidence to explain how or why a person of skill in
`
`the art (“POSA”) would have been motivated to select KP-103 for topical
`
`administration to an infected nail with a reasonable expectation of success.
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`Specifically, Petitioner ignores the unpredictability associated with achieving a
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`therapeutic effect in nail. This unpredictability existed in attempts to translate
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`results from skin to nail, and in attempts to translate in vivo nail results to
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`therapeutic efficacy.
`
` Indeed, as explained by Petitioner’s own expert,
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`“physicochemical criteria governing the selection of therapeutic candidates to
`
`treat nail disorders would seem to be very different from the established criteria
`
`used for drug selection for skin.” Ex. 2020, 5 (emphasis added). Moreover,
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`“[t]he fact that therapeutic molecules can penetrate into and permeate across nails
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`in vivo does not necessarily indicate that they will have a therapeutic effect.” Ex.
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`2021, 17 (emphasis added). Petitioner’s expert’s contemporary admissions
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`demonstrate the unpredictability in this field and foreclose any finding of a
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`reasonable expectation of success.
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`5
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`Case IPR2017-00190
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`With respect to KP-103, Petitioner fails to show a basis in the prior art to
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`single this compound out of the myriad of antifungal agents which existed as of the
`
`date of the invention, with any expectation of success in achieving the goal of an
`
`effective, topical onychomycosis treatment. Indeed, the Kaken Abstracts report
`
`that KP-103 was no better than other prior art antifungal agents, none of which
`
`were known to topically treat onychomycosis. Moreover, the Kaken Abstracts and
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`Ogura disclose testing KP-103 in the context of skin infection models, not nail.
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`Yet, at the time of the invention, it was known that treatments for skin do not
`
`translate to nail: “[w]hile tinea pedis [skin infection of the foot] is often treated
`
`successfully with topical agents, [the author] has never successfully cleared a
`
`single case of onychomycosis with any of the topical antifungal agents promoted
`
`as treatment for [onychomycosis].” Ex. 2011, 1 (emphasis added); see also Ex.
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`2020, 5. Petitioner fails to explain how a POSA would have extrapolated results
`
`from skin to nail given the prior art teachings to the contrary and, ignores the
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`unpredictability associated with doing so.
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`For at least these reasons, Petitioner has not shown a reasonable likelihood
`
`of prevailing and its Petition for inter partes review should be denied.
`
`6
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`
`
`II. TECHNOLOGY BACKGROUND
`A. Onychomycosis
`Onychomycosis is a fungal infection of the nail, usually caused by the
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`Case IPR2017-00190
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`strains Trichophyton rubrum or Trichophyton mentagrophytes. Ex. 2010, 4-5; Ex.
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`2008, 31; see also Ex. 1033, S21. It is the most common disease of the nail, and its
`
`incidence is on the rise. Ex. 2009, 2; Ex. 2010, 4. Onychomycosis causes
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`progressive nail destruction and deformity, including discoloration, turbidity,
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`thickening, or collapse of the nail. Ex. 2012, 3-4; Figure 1. It can be painful,
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`embarrassing, and debilitating. Ex. 2007, 3-4. While onychomycosis may occur in
`
`either fingernail or toenail, the incidence is five times greater in toenails. Ex.
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`2009, 2; see also Ex. 1033, S21.
`
`Figure 1: Onychomycosis (infection of the nail)
`
`
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`Structure and Composition of Human Nail
`
`B.
`Human nails are highly specialized, complex structures. The nail includes
`
`the nail plate, nail bed, nail matrix, nail wall (including the side nail wall and
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`7
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`
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`posterial nail wall), eponychium, and hyponychium. Ex. 1001, col. 4, ll. 65-67;
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`Case IPR2017-00190
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`Figure 2; see also Ex. 2012, 5; Ex. 2013, 8-12.
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`
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`Figure 2: Structure of human nail
`
`
`
`
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`The hard and translucent nail plate is the most recognizable part of the nail.
`
`
`
`
`See Figure 2, above. It is composed of three layers. Ex. 2012, 4; Ex. 2013, 8-9.
`
`Each layer has a unique composition. The dorsal or top layer of the nail plate,
`
`though only a few cell layers thick, is composed of hard protein and a high lipid
`
`content. Ex. 2014, 3-4. These lipids prevent compounds with low solubility from
`
`diffusing through it and, consequently, the dorsal layer is a significant barrier that
`
`prevents drugs from freely permeating the nail plate. Ex. 2012, 4-6, 11; Ex. 2014,
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`8. The intermediate or middle layer is the thickest layer of the nail plate. Ex.
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`2012, 4-6. The ventral or bottom layer is the thinnest layer, serving the primary
`
`purpose of connecting the nail plate to the nail bed. Id.
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`
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`Other structures include the nail matrix, which is responsible for the
`
`formation and growth of the nail plate, and the nail bed, which provides support,
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`8
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`
`
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`blood, and oxygen to the nail matrix, the eponychium and hyponychium. Id., 4, 6;
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`Case IPR2017-00190
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`Ex. 2010, 5.
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`Human nails are primarily composed of keratin. The term “keratin” refers to
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`a class of fibrous structural proteins characterized by their toughness and resulting
`
`ability to protect cells from damage or stress. See Ex. 2012, 4-7. The type of
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`keratin in human nails is called α-keratin, which contains many disulfide bonds
`
`that bind together in a double coil, imparting significant strength to the nail. Id.
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`While keratin is found in other tissues such as skin’s “stratum corneum” layer (or
`
`the “horny cell layer”), cornea, and hair, keratin and other cell components vary
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`widely between tissue type and result in markedly different properties, because the
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`actual amino acid composition and properties of each type of keratin are unique.
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`Id., 6-7; Ex. 1028, 278 (“Although derived from a common cell type, [various
`
`keratinized tissues] can exhibit fundamental differences in their fully differentiated
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`form.”).
`
`Particularly relevant here, the keratin composition in nail differs from that of
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`both hair and skin. Ex. 2012, 6-7; Ex. 1028, 278. For instance, the keratinous cells
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`of the nail plate retain prominent cell borders while hair cells do not. Ex. 2012, 4.
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`Unlike hair, the keratin filaments in nail are aligned perpendicular to the direction
`
`of nail growth, which is believed to contribute nail hardness. Id., 4, 6. Further, the
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`lipid concentration of the nail plate differs from that of both skin and hair, altering
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`9
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`
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`the ability of the nail plate to hold a poorly soluble drug. See Ex. 2014, 3-4, 10.
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`Case IPR2017-00190
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`These properties, among others, set the nail apart from other keratin-containing
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`tissues.
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`C. Onychomycosis was Difficult to Treat
`Because of the physiochemical properties of nail, onychomycosis was one of
`
`the most difficult forms of fungal infections to treat. See, e.g., Ex. 2010, 3; Ex.
`
`2011, 1; Ex. 2008, 10; Ex. 2009, 4; Ex. 2007, 3. Treatment options at the time of
`
`the invention were limited to systemic oral antifungals and surgical or chemical
`
`removal, often requiring a combination of both approaches. See, e.g., Ex. 2010,
`
`15; see also Ex. 2008, 13-18; Ex. 2011, 1, 4-5. Surgical or chemical options
`
`included cutting away at diseased parts of the nail and complete nail plate removal.
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`These procedures were often painful and disfiguring and provided only temporary
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`disease management. Ex. 2010, 15; Ex. 2009, 5; Ex. 2008, 15-16.
`
`At the time of invention, researchers were focused on systemic, oral
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`antifungals, including griseofulvin, ketoconazole, fluconazole, itraconazole, and
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`terbinabine. Ex. 2010, 10-15; Ex. 2009, 5-7; Ex. 2011, 1. These agents act by
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`absorbing into the systemic circulation, and diffusing from the blood vessels into
`
`the nail plate via the nail bed. Ex. 2015, 6. Any benefit was accompanied by
`
`“inherent disadvantages such as adverse events and drug interactions.” Id.; see
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`also Ex. 2011, 5; Ex. 2010, 411-13; Ex. 2009, 4. Further, the disadvantages of oral
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`10
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`
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`treatment are exaggerated with the long-term, systemic use that is almost always
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`Case IPR2017-00190
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`required to treat onychomycosis. Ex. 2011, 5-6; see also Ex. 2016, 1. Even as of
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`2002, researchers noted that “a significant numberaround 20% of the
`
`patientsdo not respond to [oral] treatment.” Ex. 2015, 6. Furthermore, relapse
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`was common. Ex. 2016, 1.
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`D. Topical Treatments for Onychomycosis Were Ineffective
`Topical treatments for onychomycosis had long been desired, but had not
`
`been effective. Ex. 2012, 4 (“topical therapy [of onychomycosis] is the most
`
`desirable, but it has met with limited success to date”); see also, e.g., Ex. 2010, 10;
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`Ex. 2011, 4-6; Ex. 2009, 4. A number of challenges made topical treatment
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`difficult, including the intractable nature of the fungus infection itself, the length of
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`time it takes for a new, healthy nail to grow, the length of continuous treatment
`
`required to eradicate the infection, the inaccessibility of the infection, the inability
`
`of antifungal agents to permeate through the thick layers of the nail, and the
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`chemical properties of antifungals which make them less likely to adequately
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`penetrate the nail to attain a therapeutic effect. See Ex. 2012, 9-11; Ex. 2015, 10.
`
`These challenges existed across various classes of antifungals (imidazoles,
`
`triazoles, allyamines, etc.). These “classes” distinguish antifungal agents based on
`
`their mechanism of action and not based on their suitability as an antifungal agent
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`for treatment. See Ex. 2008, 33-34, Ex. 1033, S22-26; see also Ex. 1023, 868-71
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`11
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`
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`(describing trends in antifungals, which are not defined by class); Ex. 1029, 2
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`Case IPR2017-00190
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`(noting that the mechanism of azole antifungals appears to be “idiosyncratic and
`
`unpredictable”).
`
`While topical treatments were largely effective for fungal infections of the
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`skin like tinea pedis (commonly called athlete’s foot), those same agents were
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`unsuccessful against nail infections. Ex. 2011, 4, 139; Ex. 2010, 422; Ex. 2009, 4.
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`Prior to the invention, the prevailing view was that “[m]ost skin infections are
`
`probably best
`
`treated with
`
`topical agents.
`
` However
`
`the
`
`treatment of
`
`onychomycosis require[d] systemic therapy.” Ex. 2011, 139 (emphasis added);
`
`see also Ex. 2008, 44 (stating that regrettably “topical nail therapy has met with
`
`little success, due in part to the absence of effective topical products”) (emphasis
`
`added). The absence of effective topical products to treat onychomycosis was a
`
`direct reflection of over at least a decade of many failed attempts. E.g., Ex. 2017,
`
`12; Ex. 2018, 1; Ex. 2012, 9, 376, 382; Ex. 2015, 4, 22-23; Ex. 2016, 1; Ex. 2010,
`
`422; Ex. 2009, 4-87.
`
`Faced with this road block, researchers turned attention toward finding new
`
`formulations, vehicles, or novel chemical enhancers. See Ex. 2012, 6-8; Ex. 2009,
`
`289. Nail lacquer formulations were one approach believed to be suitable for
`
`topical treatment because they allowed “sufficient adherence of the formulation to
`
`the nail plate.” Ex. 2012, 6; see also Ex. 2009, 289; Ex. 1030, 517. Although nail
`
`12
`
`
`
`
`lacquers underscored the desire for topical treatments, they did not achieve the goal
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`Case IPR2017-00190
`
`of effectively treating antifungal infections. For example, as of June, 2014, only
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`one nail lacquer, ciclopirox, 2 was FDA approved and available in the United States
`
`for treatment of onychomycosis. But its efficacy was disappointing: “There have
`
`been a number of failed topical therapies in development over the last 10 to 15
`
`years. … Efficacy has been disappointing, resulting in topical ciclopirox usually
`
`being used for the mildest cases; only for palliative benefit at best; or when oral
`
`therapy cannot be tolerated, is best avoided, or contraindicated.” See Ex. 2017, 3.
`
`As of the date of invention, none of the experimental formulation approaches had
`
`yielded a viable treatment recognized by the FDA as both safe and effective.
`
`The Invention
`
`E.
`In the early 1990’s, Kaken discovered the compound KP-103 as an
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`antifungal agent against the skin infection tinea pedis. KP-103 entered Phase I
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`clinical trials for tinea pedis, but those initial trials were stopped, and the
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`compound was put on the shelf. Ex. 2003 (Tatsumi Decl.), ¶7.3 Years later,
`
`
`2 Ciclopirox is in a different chemical class than KP-103. See Ex. 2008, 67-68.
`
`3 Citations are to the English translation (Ex. 2003) of Dr. Tatsumi’s Declaration,
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`which was translated from Japanese (Ex. 2001), and is accompanied by a
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`certificate of translation (Ex. 2005).
`
`13
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`
`
`
`inventor Dr. Tatsumi, wanted to test KP-103 in comparison with existing topical
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`Case IPR2017-00190
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`antifungal drugs for tinea pedis and for effectiveness against onychomycosis. Id.
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`However, the conventional methods for evaluating the effects of treatment were
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`not reliable. Id., ¶8; Ex. 1001, col. 2, ll. 14-17.
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`When samples were evaluated, it was difficult to remove the drug from the
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`sample, and therefore the drug would continue to have an effect after removal. Ex.
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`2003 (Tatsumi Decl.), ¶8; Ex. 1001, col. 2, ll. 14-17. In other words, the drug’s
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`effect could appear greater than it actually was in vivo. This methodological
`
`problem also helped explain the problem of relapse. Once the drug was mostly
`
`removed from the nail, the latent infection not eradicated by the drug could
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`resurge. See Ex. 1001, col. 1, l. 50-col. 2, l. 17. Kaken’s new method removed the
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`antimicrobial agent from the infected sample, allowing a more accurate evaluation
`
`of the drug’s effect on onychomycosis. Ex. 2003 (Tatsumi Decl.), ¶8; Ex. 1001,
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`col. 2, l. 55-col. 3, l. 6.
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`Specifically, the protocol involved topically administering the compounds to
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`the toenails of guinea pigs infected with a solution of T. mentagrophytes SM-110
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`and dilating the drug out of toenails to address whether a lasting therapeutic effect
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`had been achieved. Ex. 2003 (Tatsumi Decl.), ¶9; Ex. 1001, col. 14, ll. 24-39.
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`Kaken scientists determined that topical application of KP-103 in their guinea pig
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`model was therapeutically effective and significantly reduced the average number
`
`14
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`
`
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`of fungi in nails compared to base control. Ex. 2003 (Tatsumi Decl.), ¶10. By
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`Case IPR2017-00190
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`comparison, significant fungus reduction was not confirmed with existing topical
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`antifungal drugs for tinea pedis, lanoconazole or terbinafine. Id. Based on these
`
`results, the Kaken scientists “knew that topical (or ‘local’) administration of KP-
`
`103 was effective against onychomycosis,” and reported these results in a Research
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`and Development Activity Report, dated May 28, 1999 (“the May 1999 Report”). 4
`
`Ex. 2004, 1; Ex. 2003 (Tatsumi Decl.), ¶11;
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`The ’506 Patent
`
`F.
`The ’506 patent discloses methods of treating onychomycosis by topical
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`administration of a class of triazole compounds that includes KP-103. Ex. 1001,
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`col. 9, ll. 11-14. The ’506 patent issued with two claims on May 8, 2007 and
`
`
`4 Citations are to the English translation (Ex. 2004) of the May 1999 Report, which
`
`was translated from Japanese (Ex. 2002), and is accompanied by a certificate of
`
`translation (Ex. 2006).
`
`15
`
`
`
`
`claims priority to JP 11/214369.5
`
`Claim 1 recites:
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`Case IPR2017-00190
`
`“A method for treating a subject having onychomycosis
`wherein the method comprises topically administering to
`a nail of said subject having onychomycosis a
`therapeutically effective amount of an antifungal
`compound represented by the following formula . . . [that
`includes KP-103].” Ex. 1001, col. 17, l. 33-col. 18, l. 28.
`
`Claim 2 depends from claim 1 and recites the chemical formula for KP-103,
`
`which is (2R, 3R)-2-(2,4-difluorophenyl)-3-(4-methylen piperidine-1-yl)-1-(1H-
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`1,2,4-triazole-1-yl)butane-2-ol. Ex. 1001, col. 18, ll. 29-32; see also Ex. 1043, 2.
`
`G.
`Jublia®
`KP-103 proved to be clinically useful for the topical treatment of
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`onychomycosis. In 2013, it was named a Top Ten Innovation in Podiatry. Ex.
`
`
`5 Petitioner challenges the ’506 patent’s priority claim to JP 11/214369. Patent
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`Owner disagrees with Petitioner’s assertions and reser
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