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`Paper No. ___
`Filed: December 22, 2017
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`ACRUX DDS PTY LTD., ACRUX LIMITED, and
`ARGENTUM PHARMACEUTICALS LLC,
`Petitioners,
`
`v.
`
`KAKEN PHARMACEUTICAL CO., LTD. and
`VALEANT PHARMACEUTICALS INTERNATIONAL, INC.,
`Patent Owner.
`
`
`
`Case: IPR2017-001901
`U.S. Patent No. 7,214,506
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`
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`PATENT OWNER’S MOTION FOR OBSERVATIONS ON THE
`CROSS-EXAMINATION OF KENNETH A. WALTERS
`
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`1 Case IPR2017-01429 has been joined with the instant proceeding.
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`
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`
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`Patent Owner submits this Motion for Observations on the Cross-
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`Examination of Kenneth A. Walters pursuant to the Scheduling Order (Paper No.
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`13).
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`Observation #1: In Exhibit 2117 at 12:7-13 and 15:18-22, Dr. Walters
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`testified that he does not have a medical practice. See also id. at 94:19-95:8. This
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`testimony is relevant to statements in his declaration, Exhibit 1509 at paragraphs
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`127-32, that he is one of skill in the art in treating onychomycosis. This testimony
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`is relevant as it speaks to the weight and credibility the Board should afford the
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`statements and conclusions in Dr. Walters’s declaration because he may not
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`appreciate the unique challenges of treating onychomycosis, as required by the
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`claims.
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`Observation #2: In Exhibit 2117 at 22:1-17 and 81:15-82:2, Dr. Walters
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`testified that he did not consider whether secondary considerations support the
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`nonobviousness of the ’506 patent. This testimony is relevant to Exhibit 2117 at
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`92:3-9 where Dr. Walters agreed on cross-examination that Jublia represents a
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`significant advancement in improving the efficacy of topical therapy for
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`onychomycosis. This is relevant to Dr. Walters’s conclusions regarding the
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`obviousness of the claimed invention (e.g., Exhibit 1509 at paragraphs 73-83 and
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`115-126). It speaks to the weight and credibility the Board should afford Dr.
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`1
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`Walters’s statements and conclusions about the allegedly known benefits of
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`treatment with efinaconazole and the obviousness of the claimed invention because
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`it raises concerns that Dr. Walters did not take into account relevant evidence and
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`related legal standards.
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`Observation #3: In Exhibit 2117 at 23:2-29:11, 41:16-46:13, and 60:19-65:1,
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`Dr. Walters testified that even though it would be “very important” to this case, he
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`has not identified any prior art besides the Kaken references (e.g., Ex. 1012 and
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`1015) that discloses the desirability of low keratin affinity in a drug used for
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`topical treatment of onychomycosis. This testimony is relevant to Dr. Walters’s
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`discussion of low keratin affinity in Exhibit 1509 at paragraphs 23-26 and 123-26.
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`The testimony speaks to the weight and credibility that the Board should afford to
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`Dr. Walters’s conclusion on whether one of skill in the art would have identified
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`efinaconazole as a promising antifungal because the evidence presented does not
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`show there was such a recognition in the art.
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`Observation #4: In Exhibit 2117 at 29:7-30:12, Dr. Walters testified that
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`Exs. 2036-38 are only extended versions of Exhibit 1015 (Kaken Abstracts). This
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`testimony is relevant to the statement in Exhibit 1509 at paragraph 8 calling Dr.
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`Elewski’s testimony into question because she reviewed Exhibit 1015 but not Exs.
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`2
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`2036-38. The testimony is relevant because it speaks to the credibility of Dr.
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`Walters’s criticism of Dr. Elewski and to the statements in his declaration
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`indicating that the material provided in the abstracts of Exhibits 2036-38 add
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`information beyond what was in the original Kaken Abstracts.
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`Observation #5: In Exhibit 2117 at 43:14-44:8 and 45:15-20, Dr. Walters
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`testifies that he first saw the publications from Kaken (e.g., Exhibits 1012, 1015,
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`1513) during this proceeding. This testimony is relevant to statements in Dr.
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`Walters’s declaration regarding what those in the field would have known about
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`efinaconazole (Exhibit 1509 at paragraphs 23-26 and 123-26). This testimony
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`reflects the weight and credibility the Board should afford to Dr. Walters’s
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`conclusions about whether one of skill in the art would have identified
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`efinaconazole as a potentially useful antifungal for treating onychomycosis.
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`Observation #6: In Exhibit 2117 at 52:1-53:12, see also id. at 26:3-15,
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`28:12-29:6, 31:6-32:2, 38:16-39:18, 41:20-42:4, 61:13-62:14, Dr. Walters testified
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`that none of Exhibits 1012, 1015, 1513 mentions “nail” or “onychomycosis,” nor
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`did he identify any other art providing a suggestion to apply efinaconazole to nail.
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`This testimony is relevant to Dr. Walters’s statements in paragraphs 46-57 and 61-
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`66 of Exhibit 1509 explaining what the Kaken Abstracts and Ogura would tell the
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`3
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`skilled artisan about efinaconazole’s use to topically treat onychomycosis. This
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`testimony is relevant to the weight and credibility the Board should afford to Dr.
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`Walters’s opinion that there would have been a motivation to combine the cited art
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`with a reasonable expectation of success, because neither the Kaken Abstracts nor
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`Ogura show efinaconazole’s efficacy or penetrability in nail.
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`Observation #7: In Exhibit 2117 at 26:16-28:20, 33:4-9, 42:19-43:3, 52:1-
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`14, and 86:1-6, Dr. Walters testified that the Kaken Abstracts and Ogura show
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`efinaconazole has antifungal activity against some of the microorganisms that
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`cause onychomycosis, as well as tinea pedis and tinea corporis, but reduced
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`efficacy as compared to two other antifungal compounds. This testimony is
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`relevant to the discussion of efinaconazole’s efficacy in Exhibit 1509 at paragraphs
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`23, 27-35, 48, 93, 108, 111, 113, 116, 123-26. It speaks to the weight and
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`credibility the Board should afford to Dr. Walters’s conclusions about whether one
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`of skill in the art would have been motivated to combine the cited art.
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`Observation #8: In Exhibit 2117 at 25:6-26:2, 33:4-37:14, and 106:8-107:18,
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`Dr. Walters testified that the tinea corporis model in Exhibit 1012 is not a nail
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`model for onychomycosis but that it would lead him to consider additional testing
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`in nail. This testimony is relevant to the allegations of efinaconazole’s predictable
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`4
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`efficacy in Exhibit 1509 at paragraphs 23, 27-35, 48, 93, 108, 111, 113, 116, 123-
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`26. It speaks to the weight and credibility that should be afforded to Dr. Walters’s
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`testimony and conclusions because it suggests they lack of a predictable
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`evidentiary basis.
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`Observation #9: In Exhibit 2117 at 84:5-20 and 107:19-108:11, Dr. Walters
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`states that in vitro data does not translate to in vivo data. This testimony is relevant
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`to Exhibit 1509 at paragraphs 23, 27-35, 48, 93, 108, 111, 113, 116, 123-26. It
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`speaks to the weight and credibility that should be afforded to Dr. Walters’s
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`conclusion that one of skill in the art would have been motivated to combine the
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`cited art without having any in vivo data.
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`Observation #10: In Exhibit 2117 at 37:5-38:8, Dr. Walters testified that in
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`developing an active agent, he would want to test permeation on a nail plate. This
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`testimony is relevant to Exhibit 1509 at paragraphs 23, 27-35, 48, 93, 108, 111,
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`113, 116, 123-26 suggesting such testing was not needed. It speaks to the weight
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`and credibility that should be afforded to Dr. Walters’s conclusions about whether
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`one of skill in the art would have been motivated to combine the cited art with an
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`expectation of success without actually testing efinaconazole in nail.
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`5
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`Observation #11: In Exhibit 2117 at 28:1-32:2, 41:2-42:17, and 52:1-10, Dr.
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`Walters testified that the Kaken Abstracts, upon which he relied to argue
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`obviousness, relate to “mycotic models, which include dermatophytosis which
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`includes onychomycosis.” This testimony is relevant to statements in Exhibit 1005
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`at paragraphs 72-79 and Exhibit 2050 at 63:15-66:1 where Dr. Walters indicated
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`that dermatophytosis does not disclose onychomycosis. The testimony is also
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`relevant to Exhibit 2050 at 63:15-66:1 where Dr. Walters stated that Example 5 of
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`the ’506 patent, which describes tinea pedis, does not describe efficacy for
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`onychomycosis. This testimony speaks to the weight and credibility the Board
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`should afford the statements Dr. Walters offered on the guidance provided by
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`general mycosis and dermatophytosis research for developing onychomycosis
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`treatments and his obviousness conclusions based on the Kaken Abstracts.
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`Observation #12: In Exhibit 2117 at 13:21-14:4, Dr. Walters states that he
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`has never used the term “onychomycosis” to describe a fungal infection of only the
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`eponychium or hyponychium. This testimony is relevant to Exhibit 1509 at
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`paragraphs 9, 17-20, 22, 55, 88-89 addressing the nail structures and their
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`involvement in onychomycosis. This testimony is also relevant to Exhibit 2050 at
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`64:12-65:13, where Dr. Walters distinguished onychomycosis in Example 4 of the
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`’506 patent from tinea pedis in Example 5 based on the location in the nail unit.
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`6
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`This testimony speaks to the weight and credibility that the Board should afford to
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`Dr. Walters’s scientific opinions regarding onychomycosis.
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`Observation #13: In Exhibit 2117 at 44:15-45:14, Dr. Walters testified that
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`formulations for treating paronychia would be designed for delivery to the specific
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`skin structures of that disease. This testimony is relevant to Exhibit 1509 at
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`paragraphs 9, 17-20, 22, 55, 88-89, 113 about the suitability of combining
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`formulations from the cited art with the references teaching efinaconazole to arrive
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`at an effective treatment for onychomycosis. It speaks to the weight and credibility
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`that should be afforded to Dr. Walters’s conclusions about the extrapolation
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`between treatments for skin and nail structures because it suggests speculation.
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`Observation #14: In Exhibit 2117 at 45:15-49:19, 52:15-56:4, and 109:19-
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`112:3, Dr. Walters testified that Exhibit 1513 suggested butenafine would not be
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`useful for treating onychomycosis because it was deactivated by keratin, but he
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`also agreed the Exhibit suggested that retention at the sight of the fungal infection
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`was a beneficial property for a topical antifungal. This is relevant to Exhibit 1509
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`at paragraph 48 where Dr. Walters states that butenafine was a suitable drug for
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`treating onychomycosis. The testimony speaks to the weight and credibility that
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`7
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`the Board should afford to Dr. Walters’s conclusions regarding butenafine and the
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`impact of keratin binding on the efficacy of a treatment for onychomycosis.
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`Observation #15: In Exhibit 2117 at 53:19-54:18, Dr. Walters testified that
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`he understands Exhibit 1513 to be describing keratin in skin rather than nail. This
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`testimony is relevant to Exhibit 1509 at paragraph 23 where Dr. Walters suggests
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`that Dr. Elewski was wrong to distinguish keratin in the nail plate from keratin in
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`hair and skin. This testimony speaks to the weight and credibility the Board should
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`afford Dr. Walters’s criticism of Dr. Elewski and his conclusions regarding the
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`similarity—or lack thereof—between nail keratin and skin keratin.
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`Observation #16: In Exhibit 2117 at 81:15-82:12, Dr. Walters states that he
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`agrees with Exhibit 2085 that Jublia® has significantly improved cure rates over
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`topical ciclopirox and that efinaconazole does not require additional nail
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`debridement. This testimony is relevant to the comparison Dr. Walters makes in
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`Exhibit 1509 at paragraph 121 between Jublia® and ciclopirox. This testimony
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`speaks to the weight and credibility the Board should afford the statements and
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`conclusions in Dr. Walters’s declaration regarding the unexpected results and
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`superior clinical efficacy of Jublia®.
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`8
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`Observation #17: In Exhibit 2117 at 97:22-98:15, Dr. Walters agrees with
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`the statement in Exhibit 1030 that successful local treatment of onychomycosis is
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`dependent on choosing an appropriate antifungal compound coupled with
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`maximizing the method of delivery. This testimony is relevant to Exhibit 1509 at
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`paragraphs 74-75 where Dr. Walters describes effective topical formulations
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`regardless of a compound’s efficacy in nail. This testimony speaks to the weight
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`and credibility the Board should afford to Dr. Walters’s opinions emphasizing
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`formulation and disregarding the need to start from an antifungal compound that
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`itself exhibits good efficacy in treating onychomycosis.
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`Observation #18: In Exhibit 2117 at 65:2-66:8, 93:1-22, and 108:12-109:4,
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`Dr. Walters admits that Exhibits 2016, 2049, 2055, 2058, 2070, and 2084 are not
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`prior art and that the discussions of efinaconazole’s efficacy disclosed therein are
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`only retrospective. This testimony is relevant to the discussion in paragraphs 57,
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`66, 102 of Exhibit 1509 regarding the implications of these articles for what was
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`known as of the ’506 patent’s priority date. This testimony speaks to weight and
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`credibility the Board should afford the statements and conclusions in Dr. Walters’s
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`declaration that the low keratin affinity of efinaconazole and its relationship to nail
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`were understood in the art at the time of invention.
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`9
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`Observation #19: In Exhibit 2117 at 66:9-73:7, 80:19-81:3, 94:1-9, 117:15-
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`119:4, Dr. Walters testified that Exhibit 2085 is “Valeant sponsored” because
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`Exhibit 2084, which was published after Exhibit 2085, identifies Dr. Gupta as a
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`clinical trial investigator and consultant for Valeant, among other companies he
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`worked for. This testimony is relevant to Exhibit 1509 at paragraphs 26, 57, 66,
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`69, and 102 where Dr. Walters states that Patent Owner and Valeant sponsored
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`several articles. This speaks to the weight and credibility the Board should afford
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`the statements and conclusions in Dr. Walters’s declaration that call into question
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`peer-reviewed publications.
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`Observation #20: In Exhibit 2117 at 56:13-60:14, Dr. Walters states that
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`retention of the antifungal compound is a factor in formulating topical treatments
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`for onychomycosis. This testimony is relevant to the discussion of whether keratin
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`affinity and retention of active agent were considered important properties in
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`Exhibit 1509 at paragraph 98. It speaks to the weight and credibility the Board
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`should afford the statements and conclusions in Dr. Walters’s declaration that, at
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`the time of invention, high keratin affinity was not seen as a beneficial property in
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`topical treatments.
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`10
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`Observation #21: In Exhibit 2117 at 103:7-106:7, Dr. Walters testifies that
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`JP ’639 (Ex. 1011) does not provide any efficacy data for topically treating
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`onychomycosis. This testimony is relevant to the extrapolation across
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`formulations and testing in other dermatophyte models in Ex. 1509 at paragraphs
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`27-31, 82, 118, and 124. This testimony speaks to the weight and credibility of Dr.
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`Walters’s opinions about why the skilled artisan would have a reasonable
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`expectation of success replacing the active agents discussed in JP ’639 with
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`efinaconazole when the reference does not provide efficacy data for the listed
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`active agents.
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`Observation #22: In Exhibit 2117 at 96:17-97:14, Dr. Walters testified that,
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`at the critical date of the ’506 patent, there was only one FDA-treatment approved
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`topical treatment for onychomycosis. This testimony is relevant to Exhibit 1509 at
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`paragraph 73 stating that there were multiple FDA-approved topical formulations
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`for treating onychomycosis. This testimony speaks to the weight and credibility of
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`Dr. Walters’s opinions and his level of familiarity with the state of the art as of the
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`patent’s priority date.
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`Observation #23: In Exhibit 2117 at 73:21-79:12, Dr. Walters states that he
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`does not know whether four of the topical treatments listed in Table 1 of Exhibit
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`11
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
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`2009 were actually clinically available anywhere for topical treatment, that
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`amorolfine was not FDA-approved for topical treatment of onychomycosis, and
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`that neither efinaconazole nor any other triazoles were among the listed treatments
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`in Table 1. This testimony is relevant to Dr. Walters’s discussion of other
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`available treatments in Exhibit 1509 at paragraphs 40-41. This testimony speaks to
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`the weight the Board should afford to Dr. Walters’s opinions that other topical
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`treatments were available by 1999 because they lack evidentiary support.
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`Respectfully submitted,
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`Dated: December 22, 2017
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`By: /John D. Livingstone/
`John D. Livingstone, Reg. No. 59, 613
`FINNEGAN, HENDERSON, FARABOW,
`
`GARRETT & DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 408-4000
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`Counsel for Patent Owner in
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`IPR2017-00190
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`12
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`
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`Case: IPR2017-00190
`U.S. Patent No. 7,214,506
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that a copy of the foregoing Patent Owner’s
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`Motion for Observations on the Cross-Examination of Kenneth A. Walters
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`was served electronically via email on December 22, 2017, in its entirety on the
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`following:
`
`E. Anthony Figg
`Aydin H. Harston
`Lisa N. Phillips
`Rothwell, Figg, Ernst & Manbeck, P.C.
`607 14th Street, N.W., Suite 800
`Washington, DC 20005
`efigg@rothwellfigg.com
`aharston@rothwellfigg.com
`lphillips@rothwellfigg.com
`litigationparalegals@rothwellfigg.com
`
`Teresa Stanek Rea
`Shannon M. Lentz
`Crowell & Moring LLP
`Intellectual Property Group
`1001 Pennsylvania Ave., NW
`Washington, DC 20004-2595
`trea@crowell.com
`slentz@crowell.com
`
`Tyler C. Liu
`Argentum Pharmaceuticals, LLC
`tliu@agpharm.com
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`
`
`
`
`By: /John D. Livingstone/
`John D. Livingstone
`Reg. No. 59,613
`
`
`
`
`
`
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