`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`LUPIN LTD. AND LUPIN PHARMACEUTICALS INC.,
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`Petitioner
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`v.
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`HORIZON THERAPEUTICS, LLC,
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`Patent Owner
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`Case IPR2017-01159
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`Patent 9,254,278
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`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`TABLE OF CONTENTS
`HORIZON IS NOT COLLATERALLY ESTOPPED FROM ARGUING
`UNPATENTABILITY .................................................................................... 1
`A.
`Lupin Ignores Precedent Requiring Exhaustion of Appeal
`Rights ..................................................................................................... 1
`The Common Law Test for Collateral Estoppel is Not Met ................. 3
`B.
`HORIZON’S NEW EVIDENCE FURTHER SUPPORTS
`PATENTABILITY .......................................................................................... 4
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`I.
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`II.
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`i
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`TABLE OF AUTHORITIES
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`Cases
`ABS Global, Inc. v. XY, LLC,
`IPR2017-02184, Paper 10 (Apr. 13, 2018) ............................................................ 2
`Apple v. Papst Licensing GMBH & Co.,
`IPR2016-01863, Paper 35 (Apr. 13, 2018) ............................................................ 2
`Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found.,
`402 U.S. 313 (1971) ............................................................................................... 3
`Comair Rotron, Inc. v. Nippon Densan Corp.,
`49 F.3d 1535 (Fed. Cir. 1995) ................................................................................ 3
`In re Freeman,
`30 F.3d 1459 (Fed. Cir. 1994) ................................................................................ 3
`Maxlinear, Inc. v. CF CRESPE LCC,
`880 F.3d 1373 (Fed. Cir. 2018) .............................................................................. 2
`Nestle USA, Inc. v. Steuben Foods, Inc.,
`884 F.3d 1350 (Fed. Cir. 2018) .............................................................................. 2
`SDI Technologies, Inc. v. Bose Corp.,
`IPR2014-00343, Paper 32 (June 11, 2015) ........................................................1, 2
`Statutes
`35 U.S.C. § 318(b) ..................................................................................................... 2
`Regulations
`37 C.F.R. § 42.73(d)(3) .............................................................................................. 1
`77 Fed. Reg. 48,612 (Aug. 14, 2012)......................................................................... 2
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`ii
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`I.
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`HORIZON IS NOT COLLATERALLY ESTOPPED FROM
`ARGUING UNPATENTABILITY
`A. Lupin Ignores Precedent Requiring Exhaustion of Appeal
`Rights
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`Lupin argues that Horizon should be collaterally estopped from contesting
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`the unpatentability of U.S. Patent No. 9,254,278 (“the ’278 patent”) in light of the
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`Board’s Final Written Decision (“FWD”) in IPR2016-00829 regarding U.S. Patent
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`9,095,559 (“the ’559 FWD”), now on appeal (see IPR2016-00829, Paper 43), and
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`that certain findings in that FWD are entitled to preclusive effect. But, such
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`argument fails because it ignores applicable precedent requiring the exhaustion of
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`appeal rights before any potential preclusive effect attaches to PTAB findings.
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`37 C.F.R. § 42.73(d)(3) governs patent owner estoppel in an IPR and states,
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`“A patent applicant or owner is precluded from taking action inconsistent with the
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`adverse judgment, including obtaining in any patent: (i) A claim that is not
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`patentably distinct from a finally refused or cancelled claim . . .” However, this
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`rule does not support estopping Horizon here at least because, as Lupin admits, the
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`Board has refused to use it to attach preclusion to FWDs before termination of all
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`appeal rights. (Paper 23 at 3, n.2.) For instance, in SDI Technologies, Inc. v. Bose
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`Corp., the Board refused to bar a patent owner from raising arguments previously
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`rejected in an IPR involving the same patent and art, finding “Rule 42.73(d)(3)
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`does not apply . . . at least because Patent Owner’s appeal rights [in the earlier IPR]
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`1
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`have not been exhausted.” IPR2014-00343, Paper 32 at 7-10 (June 11, 2015) (The
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`rule applies “against a party whose claim has been cancelled and not merely held
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`unpatentable”) (citing 77 Fed. Reg. 48,612, 48,625 (Aug. 14, 2012)); ABS Global,
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`Inc. v. XY, LLC, IPR2017-02184, Paper 10 at 4-5 (Apr. 13, 2018). “[U]nder 35
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`U.S.C. § 318(b), a claim is not cancelled until all appeal rights have terminated.”
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`IPR2014-00343, Paper 32 at 9. Lupin does not even address this governing IPR
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`rule and instead improperly focuses only on common-law collateral estoppel.
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`Moreover, other applicable Federal Circuit precedent shows that estoppel is
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`improper here, where the ’559 FWD remains on appeal. The sole case cited by
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`Lupin in support of applying collateral estoppel in administrative contexts is easily
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`distinguished from the instant facts, as it finds estoppel attached to the reversal of
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`the PTAB’s claim construction on appeal, not to the PTAB’s unreviewed decision
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`itself. Nestle USA, Inc. v. Steuben Foods, Inc., 884 F.3d 1350, 1351-52 (Fed. Cir.
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`2018) (applying estoppel to reverse the same construction made in a subsequent
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`IPR, noting the patent owner “had a full and fair opportunity to litigate the issue of
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`claim construction during the prior appeal.”); Maxlinear, Inc. v. CF CRESPE LCC,
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`880 F.3d 1373, 1375-1377 (Fed. Cir. 2018) (“[T]hose prior decisions, having been
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`affirmed by our court, are binding in this proceeding, as a matter of collateral
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`estoppel …”) (emphasis added); Apple v. Papst Licensing GMBH & Co., IPR2016-
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`01863, Paper 35 at 46 (Apr. 13, 2018). Faced with this problem, Lupin asserts the
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`2
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`irrelevant point that “the established rule in the federal courts” is that a pending
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`appeal does not defeat finality for estoppel purposes. But, Lupin cites no precedent
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`where the PTAB has given preclusive effect to a FWD on appeal.
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`The Common Law Test for Collateral Estoppel is Not Met
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`B.
`Regardless of the above precedent, Lupin has not met its burden to show that
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`the four factors of the common-law estoppel test – requiring identity of the issues,
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`that the issues were actually litigated and necessary to the judgment, and the “full
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`and fair opportunity to litigate” – are met. In re Freeman, 30 F.3d 1459, 1465
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`(Fed. Cir. 1994); Comair Rotron, Inc. v. Nippon Densan Corp., 49 F.3d 1535, 1537
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`(Fed. Cir. 1995).
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`To have a “full and fair opportunity to litigate,” a party “must be permitted
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`to demonstrate, if he can, that he did not have a fair opportunity procedurally,
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`substantively and evidentially to pursue his claim the first time.” Blonder-Tongue
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`Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 333 (1971). Similarly, because
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`collateral estoppel is premised on fairness, some courts have evaluated as a fifth
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`factor whether the “controlling facts and applicable legal rules were the same in
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`both actions.” Comair, 49 F.3d at 1537. Thus, contrary to Lupin’s assertion that
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`new evidence can never deter preclusion, estoppel should not apply when “without
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`fault of his own the patentee was deprived of crucial evidence or witnesses in the
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`first litigation.” Blonder-Tongue, 402 U.S. at 333; (Paper 23 at 3-4.)
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`3
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`Here, Horizon cites new, previously unavailable evidence supporting
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`patentability, including a declaration from Lupin’s expert Dr. Vaux in IPR2018-
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`00459, which conflicts with certain of his positions here and further undermines
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`the credibility of his unsupported testimony. (Ex. 2052.) Such evidence, which
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`did not exist during IPR2016-00829, is especially significant as the Board relied
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`upon Dr. Vaux’s testimony in the ’559 FWD to supply the critical claim limitation
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`of increasing drug dosage for patients with normal plasma ammonia levels. (Ex.
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`1028 at 14, 24.) And, neither the claims nor all asserted grounds in the respective
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`IPRs are identical. (Ex. 1001 at 24:21-26:21; Ex. 1030 at 24:20-26:21; Ex. 1026 at
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`18; Ex. 1028 at 6.) At the least, Ground 1 (citing the ’859 Publication) was never
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`addressed by the ’559 FWD, which relies on Simell and Blau to teach the use of
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`fasting ammonia levels. Thus, Lupin’s conclusory assertion that the claims “are
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`substantially similar” and “obvious for the same reasons” cannot justify estopping
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`Horizon from defending its separate patent in light of newly available evidence.
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`II. HORIZON’S NEW EVIDENCE FURTHER SUPPORTS
`PATENTABILITY
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`Horizon’s new evidence not only forecloses Lupin’s argument for estoppel,
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`but also warrants deviating from the ’559 FWD. First, Horizon’s expert Dr. Enns
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`has presented new testimony strengthening its positions and combating new
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`argument from Lupin. (Ex. 1029 at 40:8-60:24; Ex. 2006 at ¶¶ 73, 106-07, 112,
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`4
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`115, 121-123 (citing new Ex. 2035), 133-140.) Second, Dr. Vaux’s IPR2018-
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`00459 Declaration and his deposition transcript in this case both include testimony
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`that conflicts with certain of his positions here, including that the prior art reflected
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`concern over potential adverse effects from increased dosages of nitrogen
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`scavenging drugs. (Paper 19 at 5-6, 20-21, 28-31; Ex. 2052 at ¶¶ 35-38, 64-66, 79;
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`Ex. 2051 at 26:12-31:1, 31:10-33:16.) This testimony is in direct tension with Dr.
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`Vaux and Lupin’s argument that a person of ordinary skill in the art (“POSA”)
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`would have been motivated to perform the instant claims because RAVICTI® was
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`known to be well-tolerated. (Paper 3 at 17, 19-20, 43; Ex. 1002 at ¶¶ 29, 47, 63-
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`64, 100; Paper 23 at 8.) Dr. Vaux’s new testimony also dismisses the value of
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`certain teachings of the ’859 Publication, Lupin’s primary reference. (Paper 19 at
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`5-6, 52, 54, 57-58; Ex. 2052 at ¶ 79; Ex. 2051 at 12:2-18:10, 18:24-20:3, 38:19-
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`41:18, 47:11-19, 51:14-52:9.) Horizon’s new evidence is especially relevant
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`because, as discussed above, several of the ’559 FWD findings that Lupin argues
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`should be preclusive were made relying solely or in part on Dr. Vaux’s testimony.
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`(See, e.g., Paper 23 at 6, 11-12; Ex. 1028 at 14, 23-24, 29-30.)
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`Horizon’s new evidence demands that the Board give little, if any, weight to
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`Dr. Vaux’s conclusory and self-contradictory testimony regarding the state of the
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`art and motivations of a POSA and reject Lupin’s obviousness argument as
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`unsupported and in tension with positions it has adopted in IPR2018-00459.
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`5
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`Date: June 8, 2018
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`Respectfully submitted,
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`By: / M.C. Phillips /
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`Matthew C. Phillips, Reg. No. 43,403
`Backup Counsel for Patent Owner
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`Case No. IPR2017-01159
`U.S. Patent No. 9,254,278
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`CERTIFICATE OF SERVICE
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`I hereby certify that on June 8, 2018, copies of the foregoing PATENT
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`OWNER’S SUR-REPLY and all documents filed with it were served via electronic
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`mail, as agreed to by counsel, upon the following counsel for the Petitioners:
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`Elizabeth J. Holland: eholland@goodwinlaw.com
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`Cynthia Lambert Hardman: chardman@goodwinlaw.com
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`/ M.C. Phillips /
`Matthew C. Phillips
`Registration No. 43,403
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