`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
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`SAWAI USA, INC. and SAWAI PHARMACEUTICAL CO., LTD.
`
`Petitioners,
`
`v.
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`BIOGEN MA INC.,
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`Patent Owner.
`
`____________
`
`Case IPR2019-00789
`
`Patent 8,399,514
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
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`
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`
`
`Contents
`
`
`I.
`II.
`
`Introduction ...................................................................................................... 1
`The RPI Requirement and Petitioner’s Inadequate Identification of All
`RPIs .................................................................................................................. 3
`A.
`The Petition Must Identify as RPIs Beneficiaries Having A
`Preexisting, Established Relationship with Petitioner .......................... 3
`The Petition’s Incomplete Identification of RPIs ................................. 5
`B.
`Petitioner’s Generic Product and District Court Litigation .................. 5
`C.
`The Sawai - Sumitomo Strategic Alliance ............................................ 7
`D.
`III. Sawai Has Not Named All Real Parties in Interest ....................................... 12
`A.
`Petitioner Sawai Japan Is Sumitomo’s “Attorney-In-Fact or Its
`Express Or Implied Litigating Agent” For IP Strategy ....................... 12
`Sumitomo Is A Clear Beneficiary Through Its Ownership Stake
`in Sawai America and Upsher-Smith .................................................. 13
`The Hiramatsu Declaration Is Not Competent to Exclude
`Sumitomo as an RPI ............................................................................ 15
`IV. The Board Should Deny Institution Under Its Discretion ............................. 17
`V.
`Conclusion ..................................................................................................... 24
`
`
`
`
`B.
`
`C.
`
`
`
`i
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`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Amazon.com, Inc. v. Appistry, Inc.,
`IPR2015-00480, Paper 18 (PTAB July 13, 2015) ................................................ 4
`Applications in Internet Time, LLC v. RPX Corp.,
`897 F.3d 1336 (Fed. Cir. 2018) ...................................................................passim
`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
`IPR2013-00453, Paper 88 (PTAB Jan. 6, 2015) .................................................. 4
`Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha,
`IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) ................................... 18, 21-23
`NHK Spring Co. v Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ............................................... 23
`Phigenix, Inc. v. Immunogen, Inc.,
`845 F.3d 1168 (Fed. Cir. 2017) .......................................................................... 16
`Power Integrations, Inc. v. Semiconductor Components Indus., LLC,
`No. 2018-1607, Slip Op. (Fed. Cir. June 13, 2019) .............................................. 7
`Toshiba Memory Corp. v. Anza Tech., Inc.,
`IPR2018-01597, Paper 12 (PTAB Mar. 12, 2018) .............................................. 4
`Unified Patents, Inc. v. Personalized Media Commc’ns, LLC,
`IPR2015-00521, Paper 13 (PTAB June 8, 2015) ............................. 17, 19, 20, 23
`Valve Corp. v. Elec. Scripting Prods., Inc.,
`IPR2019-00062, Paper 11 (PTAB Apr. 2, 2019) ................................... 18-21, 23
`ZTE (USA) Inc. v. Fundamental Innovation Sys. Int’l LLC,
`IPR2018-01076, Paper 14 (PTAB Dec. 3, 2018) ............................................... 21
`Federal Statutes
`35 U.S.C. § 312(a)(2) ............................................................................................. 2, 3
`35 U.S.C. § 314(a) ............................................................................................passim
`
`ii
`
`
`
`35 U.S.C. § 315(b) ....................................................................................... 1, 6, 7, 21
`35 U.S.C. § 315(b) ....................................................................................... 1, 6, 7, 21
`35 U.S.C. § 315(c) ................................................................................................... 17
`35 U.S.C. § 315(0) ................................................................................................... 17
`35 U.S.C. § 325(d) ................................................................................... 3, 17, 19, 20
`35 U.S.C. § 325(d) ................................................................................... 3, 17, 19, 20
`Regulations
`Regulations
`37 C.F.R. § 42.108(a) ............................................................................................... 17
`37 C.F.R. § 42.108(a) ............................................................................................... 17
`
`iii
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`iii
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`I.
`
`Introduction
`Petitioners Sawai USA, Inc. (“Sawai USA”) and Sawai Pharmaceutical Co.,
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`Ltd. (“Sawai Japan”) (collectively “Sawai” or “Petitioner”) waited over a year and
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`a half after being sued for infringement before filing its Petition against Biogen’s
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`U.S. Patent No. 8,399,514 (“the ’514 patent”). Because the one-year deadline
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`under 35 U.S.C. § 315(b) had long passed, Sawai resorted to filing its Petition
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`along with a request to join IPR2018-01403 (“the Mylan IPR”). Patent Owner
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`Biogen opposed joinder for multiple reasons, including the complication, delay,
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`and subsequent prejudice to Biogen that Sawai’s late entrance into the Mylan IPR
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`would cause. Papers 9, 14. Separate and apart from joinder issues, Sawai’s
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`Petition does not warrant institution.
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`First and foremost, the Petition fails to establish a reasonable likelihood that
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`Sawai would prevail with respect to at least one claim, let alone all twenty. 35
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`U.S.C. § 314(a). The challenged claims are patentable and for this reason alone,
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`Sawai’s Petition should be denied outright.1
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`1 While this Preliminary Response does not address the merits of Sawai’s
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`unpatentability arguments, Patent Owner Biogen does not waive or concede any
`
`argument and reserves all rights to argue all substantive issues and to take all
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`
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`1
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`
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`Second, Sawai’s Petition should be rejected because it fails to identify all
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`real parties in interest (“RPI”). Petitioner is required under 35 U.S.C. § 312(a)(2)
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`to identify in the petition all RPIs, including a non-party that “is a clear beneficiary
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`that has a preexisting, established relationship with the petitioner … even without
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`entering into an express or implied agreement with the petitioner to file an IPR
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`petition.” Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1351,
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`1354 (Fed. Cir. 2018) (“AIT”). Contravening this threshold requirement, the
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`Petition omits Sumitomo Corporation and its wholly-owned subsidiary Sumitomo
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`Corporation of Americas (“SCOA”) (collectively “Sumitomo”) as RPIs despite a
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`clear preexisting and established relationship with Petitioner. Indeed, Petitioner
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`and Sumitomo have a strategic alliance wherein Petitioner Sawai Japan is
`
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`necessary discovery, including RPI discovery should the Board institute this
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`proceeding. See Ex. 2006 (“The panel also notes that no right to cross-examination
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`has been waived at this preliminary stage of the proceeding, but that cross-
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`examination during the preliminary stages of a proceeding is not typically
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`available, absent authorization from the Board.”). Biogen respectfully disagrees
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`with and reserves the right to challenge in all respects the Petition’s stated bases
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`for Institution, which are the same as those stated in the Mylan IPR, IPR2018-
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`01403, Paper 12 (PTAB Feb. 6, 2019). See, e.g., Pet. at 3.
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`2
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`
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`responsible for IP strategy for Sumitomo’s direct benefit. Further, Sumitomo and
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`Petitioner Sawai Japan share ownership and management over Upsher-Smith
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`Laboratories, LLC (“Upsher-Smith”), which intends to commercialize the Sawai
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`product accused of infringing the ’514 patent in the pending district court
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`litigation, and is listed as an RPI. Notwithstanding these facts, Petitioner did not
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`identify Sumitomo as an RPI.
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`Finally, Sawai’s attack on Biogen’s ’514 patent warrants a discretionary
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`denial under 35 U.S.C. § 314(a) or § 325(d). This Petition, which was filed long
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`after Sawai had Mylan’s petition and the Board’s institution decision and which
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`will be decided after Sawai’s validity challenges are tried in district court, would
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`be a waste of the Board’s resources.
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`For any of these reasons, Biogen respectfully requests that the Board deny
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`institution of Sawai’s Petition.
`
`II. The RPI Requirement and Petitioner’s Inadequate Identification of All
`RPIs
`A. The Petition Must Identify as RPIs Beneficiaries Having A
`Preexisting, Established Relationship with Petitioner
`The plain language of the governing statute is unambiguous: a “petition filed
`
`under section 311 may be considered only if … the petition identifies all real
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`parties in interest.” 35 U.S.C. § 312(a)(2) (emphasis added). As a result, a petition
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`that fails to identify all RPIs cannot be considered and must be rejected. Petitioner
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`3
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`
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`
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`bears the burden of establishing compliance with this statutory requirement.
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`Toshiba Memory Corp. v. Anza Tech., Inc., IPR2018-01597, Paper 12 at 7 (PTAB
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`Mar. 12, 2018) (“If a patent owner alleges that the petitioner omitted a real party in
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`interest and produces some evidence to support its argument, the petitioner bears
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`the ultimate burden of persuasion to show patent owner’s allegations are
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`incorrect.”). Indeed, “a petitioner is far more likely to be in possession of, or have
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`access to, evidence relevant to the issue than the patent owner.” Amazon.com, Inc.
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`v. Appistry, Inc., IPR2015-00480, Paper 18 at 3 (PTAB July 13, 2015).
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`The Federal Circuit applies “a flexible approach [to identifying RPIs] that
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`takes into account both equitable and practical considerations, with an eye toward
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`determining whether the non-party is a clear beneficiary that has a preexisting,
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`established relationship with the petitioner.” AIT, 897 F.3d at 1351. Importantly,
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`the RPI provision is to be “appl[ied] broadly” and carry an “expansive
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`formulation.” Id. at 1346, 1350. For instance, a parent-subsidiary relationship alone
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`“weighs heavily in favor of finding [a parent] to be a real party in interest.” Atlanta
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`Gas Light Co. v. Bennett Regulator Guards, Inc., IPR2013-00453, Paper 88 at 11
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`(PTAB Jan. 6, 2015). Equally important is that a “nonparty to an IPR can be a real
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`party in interest even without entering into an express or implied agreement with
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`the petitioner to file an IPR petition.” AIT, 897 F.3d at 1354. The inquiry focuses
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`on whether (1) the unnamed entity has an interest in, and will benefit from, the IPR
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`4
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`
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`or (2) the petitioner, based on a relationship with the unnamed entity, is
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`representing that interest in filing the IPR. Id. at 1353.
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`B.
`The Petition’s Incomplete Identification of RPIs
`The Petition identifies six real parties in interest: Sawai USA, Inc. (Sawai
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`USA), Sawai Pharmaceutical Co., Ltd. (Sawai Japan), Sawai America Holdings
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`Inc., Sawai America, LLC, Upsher-Smith, and Stason Pharmaceuticals, Inc.2
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`Petition at 1. It does not identify Sumitomo Corporation or its wholly-owned
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`subsidiary SCOA which, along with RPI Sawai America Holdings, is a joint owner
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`of RPI Upsher-Smith. Ex. 1060, ¶¶9, 19, 21.
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`C.
`Petitioner’s Generic Product and District Court Litigation
`On March 27, 2017, Petitioner Sawai Japan, through its wholly-owned
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`subsidiary Petitioner Sawai USA, submitted abbreviated new drug application
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`(“ANDA”) No. 210285 to obtain FDA approval for a generic version of Biogen’s
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`Tecfidera® (dimethyl fumarate (“DMF”)) Delayed-Release Capsules. Ex. 2007;
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`Ex. 1060, ¶11. In an effort to obtain FDA approval to commercialize its generic
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`DMF product before the expiration of Biogen’s ’514 patent—listed in the FDA’s
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`“Orange Book” as covering the FDA approved use of Biogen’s Tecfidera®—Sawai
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`2 Stason Pharmaceuticals, Inc. is identified as Sawai USA’s agent in filing its
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`ANDA. Ex. 2007 at 1; Ex. 1060, ¶11.
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`5
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`
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`USA certified to the FDA that, in its opinion, the ’514 patent is invalid and/or not
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`infringed by Sawai’s generic DMF product. Id.; Ex. 1060, ¶12. The FDA’s
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`“ANDA Tentative Approval” letter documents Sawai’s representation and
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`indicates that the ’514 patent remains a bar to final approval of Sawai’s proposed
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`generic DMF product. Ex. 2007 at 2; Ex. 2016.
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`In response to Sawai’s “Notice Letter” to Biogen, Biogen filed a complaint
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`nearly two years ago in the District of Delaware, alleging infringement of the ’514
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`patent based on Sawai’s generic DMF product under ANDA No. 210285. Ex.
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`2016; Ex. 1060, ¶13. Biogen served the complaint on July 5, 2017, and Sawai
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`answered and counterclaimed on October 16, 2017, asserting that “the ’514 patent
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`is invalid and not infringed.” Ex. 2003; Ex. 1060, ¶14. Sawai has not sought a stay
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`of the district court case, which has proceeded toward trial with fact discovery
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`already concluded, expert discovery to be completed by September 13, 2019, and
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`trial set for December 9, 2019. Ex. 2004. Based on service of the complaint,
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`Sawai’s right to seek an independent IPR expired on July 5, 2018. Ex. 2003; 35
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`U.S.C. § 315(b).
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`Sawai’s own information presented in this IPR shows that multiple entities
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`have a direct interest in the Sawai generic DMF product accused of infringing the
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`’514 patent in the district court litigation. Specifically, Sawai filed the declaration
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`of Mr. Hiramatsu with its Response to Biogen’s Opposition to Sawai’s Motion for
`
`6
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`
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`Joinder discussing these interests. Ex. 1060; Paper 10. Mr. Hiramatsu, said to be an
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`employee of RPI Upsher-Smith, declared that Petitioner “Sawai USA intends to
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`engage Upsher-Smith in the future through a license and supply agreement to sell
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`the products approved under Sawai USA’s ANDA No. 210285,” i.e., Sawai’s
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`generic DMF product.3 Ex. 1060, ¶¶10, 21. Mr. Hiramatsu further declared that
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`RPI Upsher-Smith is owned by RPI Sawai America, which is a joint venture of
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`Petitioner Sawai Japan (via RPI Sawai America Holdings) and unnamed RPI
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`Sumitomo Corporation (via unnamed RPI SCOA). Ex. 1060, ¶21.
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`D. The Sawai - Sumitomo Strategic Alliance
`In April 2017, Petitioner Sawai Japan, a Japanese generic pharmaceuticals
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`manufacturer, and RPI Upsher-Smith, a U.S. pharmaceuticals manufacturer,
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`3 Mr. Hiramatsu has provided no testimony as to when Petitioner and RPI Upsher-
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`Smith will enter into its license and supply agreement, which is relevant to the RPI
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`question now. See Power Integrations, Inc. v. Semiconductor Components Indus.,
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`LLC, No. 2018-1607, Slip Op. at 17 (Fed. Cir. June 13, 2019) (“[W]e decline to
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`construe § 315(b) in a way that would have the Board, when deciding whether to
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`institute, ignore the existence of RPIs or privies who would benefit from having an
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`IPR instituted simply because they were not RPIs or privies when the petition was
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`filed.”).
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`7
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`
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`
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`announced that Sawai Japan would purchase Upsher-Smith’s generic
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`pharmaceuticals business. Ex. 2008. Shortly after the acquisition was complete,
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`Sawai Japan sought a partner and ultimately formed a “strategic alliance with
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`[unnamed RPI] Sumitomo Corporation in the U.S. generics market.” Ex. 2001.
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`Under that alliance, Petitioner Sawai Japan would sell a 20% stake in its U.S.
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`subsidiary, RPI Sawai America, to unnamed RPI SCOA, a subsidiary of unnamed
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`RPI Sumitomo Corporation, for $211 million. Id.; Ex. 1060, ¶21.
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`The Sumitomo and Sawai Japan “strategic alliance” (Ex. 2001) divides
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`responsibility for Upsher-Smith’s business of making and selling generic drugs in
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`the U.S. between unnamed RPI Sumitomo and Petitioner Sawai Japan. For
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`example, according to the Sumitomo Integrated Report (Ex. 2011), Sumitomo
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`focuses on “Global operations (Expertise, human resources, etc.)” and “Global
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`network (Active pharmaceutical ingredients, product launches, etc.)” while Sawai
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`Japan (identified as “Sawai Pharmaceutical”) focuses on “Intellectual property
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`strategy” and “Pharmaceutical technological capabilities.” Id. at 79. Relying on
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`Sumitomo and Sawai Japan, Upsher-Smith in turn provides marketing, sales, and
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`production facilities. Id. This coordinated arrangement provides “Value for
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`Sumitomo Corporation,” including “Enhanced presence in the pharmaceutical
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`business”:
`
`8
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`
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`Value-creatlng Business Model
`
`
`
`USL
`
`hielcclualo'opcnvsualcgy
`Suwal
`3mm Globaluperalionsfixpemsuhunanesouws,elc)
`Wm” Glabalnewmrklfimve nhamiateutlcalImredlents.uroductlaumhesctcj m'm' PharmaceuucalIerhnoloucalcanahllmes
`Mavkcnng and sales nctwmk
`nuduuiuu [sum es Brand puwev
`
`Veh- lorMum OW
`
`Elana] "mu 'II Infill-Insulin! lulu“
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`Id. As a part of its intellectual property strategy, Sawai Japan and Sawai USA filed
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`the Petition in this IPR, which inures to the direct benefit of named RPI Upsher—
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`Smith and unnamed RPI Sumitomo. See id; EX- 1060, 111115-16-
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`Petitioner provided (Paper 10 at 3) the chart below that purportedly reflects
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`the relevant combined holdings of Sawai Japan and Sumitomo:4
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`Petitioner Sawai Japan
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`100%
`
`100% m
`100%
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`PetituonerSawaI USA
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`Sawai Americas Holding
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`SCOA/
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`80%
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`20%
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`100%
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`4 “Sumitomo” in the Petitioner’s chart references Sumitomo Corporation. Paper 10
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`at 3.
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`
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`
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`This demonstrates Sumitomo’s financial interest in Upsher-Smith, which in turn
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`has a financial interest in Sawai’s generic DMF product accused of infringing the
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`’514 patent. Ex. 1060, ¶21.
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`Unnamed RPI Sumitomo is also an active partner in the operations of RPI
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`Upsher-Smith. Since Sumitomo’s acquisition of a 20% share of Upsher-Smith,
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`Sawai Japan and Sumitomo have worked together to jointly control Upsher-Smith.
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`For example, Board members and senior executives of Sawai Japan and Sumitomo
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`sit on the board of Upsher-Smith:
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` Kenzo Sawai is listed on the Boards of Sawai Japan, Sawai America,
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`and Upsher-Smith. Ex. 2010 at 32.
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` Masahiro Sasaki is an officer of Sawai Japan in charge of “Overseas
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`Operations, Corporate Strategy Department” and a member of the
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`Boards of Sawai America and Upsher-Smith. Id. at 33.
`
` Shoji Yokota, Ph.D. is an officer of Sawai Japan, specifically “Vice
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`President of Research & Development Division,” and also “Executive
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`R&D of the Board of Upsher-Smith.” Id.
`
` Katsuya Okuyama of Sumitomo (via SCOA, wholly-owned by
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`Sumitomo Corporation), is also a member of the Upsher-Smith Board.
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`Ex. 2011 at 79.
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`10
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`
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`
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`Coordination and control by Sawai Japan and Sumitomo in the operations of
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`Upsher-Smith is not limited to Board members. To advance the Upsher-Smith
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`business, “seven Sawai team members and two from Sumitomo Corporation have
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`moved to Minnesota [(where Upsher-Smith is located)] with the aim of
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`harmonizing the areas of operations, finance, corporate development and corporate
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`strategy.” Ex. 2010 at 18.
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`Both Sawai Japan and Sumitomo have publicly addressed the importance of
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`the partnership between the companies. According to Sumitomo, Sawai Japan is its
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`“important partner” in the U.S. generic market. Ex. 2012 at 2. Mitsuo Sawai,
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`President of Sawai Japan, further described the collaboration in a press release (Ex.
`
`2001), including Sumitomo’s “management participation in Upsher-Smith”:
`
`Sumitomo’s investment in our US subsidiary and its
`management participation in Upsher-Smith will allow us
`to benefit from its experience, knowledge and network in
`the global business arena in areas such as sourcing of
`active pharmaceutical ingredients (APIs) and product
`introduction[.]
`. . .
`By leveraging the unique strengths of the three
`companies, namely Sawai, Upsher-Smith and Sumitomo
`Corporation, we will continue to enhance our global
`presence, including the US business, to accelerate growth
`
`11
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`
`
`
`
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`with the goal of becoming ‘a Globally Recognized
`Generics Company’.
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`Although Sumitomo participates in the management and operation of
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`Upsher-Smith and Upsher-Smith’s business inures to the benefit of Sumitomo via a
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`direct financial interest and other business value, Petitioner did not name
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`Sumitomo as an RPI. Petition at 1.
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`III. Sawai Has Not Named All Real Parties in Interest
`Evidenced by, inter alia, the declaration of RPI Upsher-Smith employee Mr.
`
`Hiramatsu, unnamed RPI Sumitomo is a clear beneficiary of Sawai’s IPR in view
`
`of its relevant preexisting, established relationship with Petitioner Sawai Japan.
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`AIT, 897 F.3d at 1351. Sawai’s failure to identify Sumitomo as an RPI precludes
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`consideration of this Petition.
`
`A.
`
`Petitioner Sawai Japan Is Sumitomo’s “Attorney-In-Fact or Its
`Express Or Implied Litigating Agent” For IP Strategy
`In AIT, the Federal Circuit reversed the Board because it failed to “consider
`
`AIT’s contention that [unnamed] Salesforce is a real party in interest because
`
`[petitioner] RPX acted as its attorney-in-fact or its express or implied litigating
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`agent.” 897 F.3d at 1357. Similarly, Sumitomo’s own public statements
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`demonstrate that Sawai Japan is Sumitomo’s attorney-in-fact or its express or
`
`implied litigating agent for IP strategies. Ex. 2011 at 79; supra §II.D.
`
`12
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`
`
`
`
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`Indeed, Sumitomo, Sawai, and Upsher-Smith’s interconnected and strategic
`
`alliance formed a “Value-creating Business Model” to their mutual benefit. Ex.
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`2011 at 79. As part of their alliance, Sumitomo reported that Petitioner Sawai was
`
`responsible for the parties’ “Intellectual property strategy,” which ultimately
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`benefits Sumitomo Corporation. Id. (“Sawai Pharmaceutical[:] Intellectual
`
`property strategy…—>…Value for Sumitomo Corporation”). As a result, like
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`Salesforce in AIT, Sumitomo should have been named as an RPI. AIT, 897 F.3d at
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`1354, 1357 (“Depending on the nature of the parties’ relationship, an entity can
`
`serve as an agent to a principal and file an IPR on the principal’s behalf even
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`without the two formally agreeing that the agent will do so.”).
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`B.
`
`Sumitomo Is A Clear Beneficiary Through Its Ownership Stake in
`Sawai America and Upsher-Smith
`Unnamed RPI Sumitomo is a clear beneficiary of this IPR through its
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`ownership-stake in RPI Sawai America and its wholly-owned subsidiary RPI
`
`Upsher-Smith.
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`First, Sawai does not dispute that Sumitomo will directly benefit from
`
`Upsher-Smith’s intended sales of the product accused of infringing Biogen’s ’514
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`patent. Supra §II.D; Ex. 1060, ¶9. Indeed, Sumitomo purchased a 20% stake in RPI
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`Sawai America for $211 million, of which RPI Upsher-Smith is a wholly owned
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`subsidiary. Supra §II.D; Ex. 2014; Ex. 1060, ¶21. At least because of its substantial
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`ownership-stake in Upsher-Smith, which intends to market the accused product,
`
`13
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`
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`Sumitomo “will benefit from having [the ’514 patent] claims canceled or
`
`invalidated” and should have been named as an RPI. AIT, 897 F.3d at 1348.
`
`Second, Petitioner named entities similarly situated to Sumitomo as RPIs,
`
`but offers no legitimate justification for omitting Sumitomo. Petitioner’s
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`organization chart shows that every party with an interest in RPI Upsher-Smith and
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`the accused infringing product was named as an RPI except Sumitomo.
`
`
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`Paper 10 at 3 (annotation added). Notably, as mentioned, Petitioner Sawai Japan
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`and unnamed RPI Sumitomo collaborate in the management of RPI Upsher-Smith.
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`Ex. 2010 at 18; supra §II.D. As Sumitomo explained, they are “work[ing] to
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`increase the corporate value of USL [(Upsher-Smith)], using the global network
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`and expertise of the Sumitomo Corporation Group to assist it with raw material
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`supply and new product launches” and “act[ing] through Sawai Pharmaceutical to
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`support the business management of USL.” Ex. 2011 at 79.
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`14
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`
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`Third, RPI Upsher-Smith’s intended sales of the accused generic product
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`benefits Sumitomo as part of what it describes as a “Value-creating Business
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`Model” linking together the operations of unnamed RPI Sumitomo, Petitioner
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`Sawai Japan, and RPI Upsher-Smith. Ex. 2011 at 79. Sumitomo’s website
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`identifies further concrete benefit to Sumitomo, i.e., Sumitomo “will capitalize on
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`its strengths as an integrated trading company to support USL’s [(Upsher-Smith’s)]
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`business management by supplying materials for drugs and helping USL put new
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`products on the market.” Ex. 2015 at 5 (emphasis added). Sumitomo’s direct
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`financial compensation from supplying to Upsher-Smith pharmaceutical materials
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`like the active pharmaceutical ingredients (APIs) (Ex. 2001) as well as Sumitomo’s
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`direct benefit of Sumitomo’s “[e]nhanced presence in the pharmaceutical business”
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`via RPI Upsher-Smith sales in the U.S. (Ex. 2011 at 79) further demonstrate that
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`unnamed RPI Sumitomo “will benefit from having [the ’514 patent] claims
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`canceled or invalidated.” AIT, 897 F.3d at 1348.
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`Accordingly, Sumitomo is an RPI as it clearly has an interest in and will
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`benefit from this IPR. AIT, 897 F.3d at 1353.
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`C. The Hiramatsu Declaration Is Not Competent to Exclude
`Sumitomo as an RPI
`Mr. Hiramatsu’s declaration is not inconsistent with the parties’ public
`
`statements about their preexisting and complementary business relationship that
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`15
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`support inclusion of Sumitomo as an RPI. Moreover, it fails to show that Mr.
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`Hiramatsu has personal knowledge of the purported facts about which he testifies.
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`Specifically, Mr. Hiramatsu does not appear to have a basis for personal
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`knowledge of Sumitomo’s involvement in the district court litigation or this IPR
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`(Ex. 1060, ¶¶14-25) and cannot, therefore, establish that Sumitomo is not an RPI.
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`Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1174 (Fed. Cir. 2017) (a
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`declaration used to support a motion must be made on personal knowledge and
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`show that the declarant is competent to testify on the matters stated). For example,
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`although apparently not a current employee of either Petitioner Sawai Japan or
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`Petitioner Sawai USA (the district court defendants and the Petitioners), or of
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`unnamed RPI Sumitomo, Mr. Hiramatsu purports to address which entities have
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`exercised control over and funded the litigation and IPR. Ex. 1060, ¶¶18, 22-23,
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`25. Reflecting the absence of any current personal (or even corporate) knowledge
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`regarding the litigation and IPR, however, Mr. Hiramatsu says that his employer
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`RPI Upsher-Smith is not involved in either. Ex. 1060, ¶21. If, however, his
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`employer RPI Upsher-Smith is not involved as he says, then he appears to have no
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`basis to address Sumitomo’s current involvement. Moreover, Mr. Hiramatsu
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`identifies no other foundation for personal knowledge concerning the litigation or
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`IPR. Only declarants from Sumitomo, Sawai USA, and Sawai Japan—which
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`16
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`Sawai has not yet presented—would even be potentially qualified to provide
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`evidence.
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`Furthermore, even if Mr. Hiramatsu had personal knowledge of all parties’
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`involvement in the district court litigation and IPR, which he has not established,
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`his testimony does not address Sumitomo’s preexisting beneficial relationship and
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`strategic alliance relating to the subject matter of the IPR. See AIT, 897 F.3d at
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`1353; supra §II.C. Mr. Hiramatsu does not dispute, for example, that unnamed RPI
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`Sumitomo, Petitioner Sawai Japan, and RPI Upsher-Smith have designated
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`Petitioner Sawai Japan as responsible for IP strategy, such as the present IPR, on
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`behalf of all three companies. Supra §II.D.
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`For all of these reasons, Petitioner has not demonstrated that it listed all
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`RPIs. As a result, under the statute, the Board cannot even consider this Petition,
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`and it should be denied. AIT, 897 F.3d at 1351; see also Unified Patents, Inc. v.
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`Personalized Media Commc’ns, LLC, IPR2015-00521, Paper 13 at 7-8 (PTAB
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`June 8, 2015) (exercising discretion and denying institution where copycat petition
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`raised distinct RPI issues).
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`IV. The Board Should Deny Institution Under Its Discretion
`Institution is discretionary. 35 U.S.C. §§ 314(a), 315(c), 325(d); 37 C.F.R.
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`§ 42.108(a). For multiple reasons, the Board should exercise its discretion under
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`17
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`§314(a) and deny Sawai’s follow-on petition under the General Plastic factors,
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`which include:
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` “whether at the time of filing of the first petition the petitioner
`knew of the prior art asserted in the second petition or should have
`known of it” (factor 2);
` “whether at the time of filing of the second petition the petitioner
`already received the patent owner’s preliminary response to the
`first petition or received the Board’s decision on whether to
`institute review in the first petition” (factor 3);
` “the length of time that elapsed between the time the petitioner
`learned of the prior art asserted in the second petition and the filing
`of the second petition” (factor 4);
` “whether the petitioner provides adequate explanation for the time
`elapsed between the filings of multiple petitions directed to the
`same claims of the same patent” (factor 5);
` “the finite resources of the Board” (factor 6); and
` “the requirement … to issue a final determination not later than 1
`year after the date on which the Director notices institution of
`review.” (factor 7).
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`Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19
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`(PTAB Sept. 6, 2017) (precedential); 35 U.S.C. § 314(a). Each of these factors
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`favors denial of institution even where Sawai had not previously filed a petition
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`against Biogen’s ’514 patent. Valve Corp. v. Elec. Scripting Prods., Inc.,
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`IPR2019-00062, Paper 11 at 2 (PTAB Apr. 2, 2019) (precedential) (application of
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`General Plastic factors is not limited solely to instances when multiple petitions
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`are filed by the same petitioner). The Board should likewise deny institution under
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`§ 325(d), as the grounds on which Sawai relies are fully addressed in the Mylan
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`IPR. See Unified Patents, IPR2015-00521, Paper 13 at 7-8.
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`First, Sawai knew of or could have found with reasonable diligence all of the
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`references cited in its Petition long before it filed this proceeding on March 5,
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`2019, and certainly at the time that Mylan filed its Petition on July 13, 2018 (factor
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`2). Valve, IPR2019-00062, Paper 11 at 10-11. By then, Biogen’s patent had
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`already been challenged three other times before the Board and once in view of the
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`very same references on which Sawai relies. Coalition for Affordable Drugs V
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`LLC v. Biogen MA Inc., IPR2015-01136; Coalition for Affordable Drugs V LLC v.
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`Biogen MA Inc., IPR2015-01993; Mylan Pharm. Inc. v. Biogen MA Inc., IPR2018-
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`01403; see also Biogen MA Inc. v. Forward Pharma A/S, Intf. No. 106,023, aff’d,
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`No. 2017-2109 (Fed. Cir. Oct. 24, 2018). Given these earlier cases, and with
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`reasonable diligence, Sawai could have readily identified the references raised in
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`those proceedings, which are asserted again here. Moreover, Sawai
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`counterclaimed for invalidity of the ’514 patent in its district court litigation on
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`October 16, 2017—over a year and four months before it filed this Petition and
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`eight months before Mylan filed its Petition. Ex. 1060, ¶14. Sawai needed to
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`support that counterclaim and could have found with reasonable diligence the
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`19
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`references asserted in the earlier Coalition IPR (although Biogen maintains that the
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`claims of the ’514 patent are not obvious over these references). Moreover, Sawai
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`has not asserted that it was unaware of the asserted references before filing its
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`petition. Just as the Board concluded in Valve, this factor thus weighs against
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`institution. Valve, IPR2019-00062, Paper 11 at 10-11.
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`Second, Sawai had the benefit of not only Mylan’s Petition that it is
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`attempting to join, but also it has the benefit of three prior unsuccessful Board
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`proceedings against the ’514 patent, as well as the Board’s Institution Decision in
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`the Mylan IPR (factor 3). As a result, Sawai clearly has had the “benefit from
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`receiving and having the opportunity to study” each of these proceedings,
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`prejudicing Biogen. Valve, IPR2019-00062, Paper 11 at 12. As the Board has
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`recognized, this ability to react to and strategize in view of prior proceedings
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`“raise[s] the potential for abuse.” Id. Sawai could have filed its Petition—but did
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`not—long ago. Choosing to wait and complicate this proceeding
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