PROTECTIVE ORDER MATERIAL
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________________
`
`SLAYBACK PHARMA LLC,
`Petitioner,
`
`v.
`
`EYE THERAPIES, LLC,
`Patent Owner.
`____________________________
`
`Case No. IPR2022-00142
`U.S. Patent No. 8,293,742
`
`
`
`
`
`EXPERT DECLARATION OF IVAN T. HOFMANN
`IN SUPPORT OF PETITIONER REPLY
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`
`
`
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`
`
`
`
`
`
`
`Slayback Exhibit 1047
`Slayback v. Eye Therapies - IPR2022-00142
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`PROTECTIVE ORDER MATERIAL
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` TABLE OF CONTENTS
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`B.
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`INTRODUCTION ........................................................................................... 1
`I.
`QUALIFICATIONS AND EXPERIENCE ..................................................... 3
`II.
`III. DOCUMENTS REVIEWED .......................................................................... 7
`IV. SUMMARY OF OPINIONS ........................................................................... 8
`V.
`BACKGROUND ............................................................................................. 9
`VI. THE DEFINITIONS OF COMMERCIAL SUCCESS AND NEXUS
`RELATIVE TO OBJECTIVE INDICIA OF NONOBVIOUSNESS ........... 11
`VII. THE MARKETPLACE PERFORMANCE OF LUMIFY® FAILS TO
`PROVIDE OBJECTIVE INDICIA OF NONOBVIOUSNESS OF THE
`CHALLENGED CLAIMS OF THE ’742 PATENT .................................... 12
`A.
`The Marketplace Performance of Lumify® is Driven by Features That
`I Understand Were Known in the Prior Art ........................................ 12
`The Jarosz Declaration Fails to Appropriately Address Marketing and
`Promotion of Lumify®, Which Also Drive the Marketplace
`Performance of Lumify® ..................................................................... 19
`1. DTC Advertising ................................................................................. 22
`2. Detailing and Sampling Efforts ........................................................... 31
`3. Lack of Comparison of Promotional Expenses for Lumify® Relative to
`Other Competing Products .................................................................. 36
`VIII. OTHER CRITIQUES OF THE JAROSZ DECLARATION ........................ 38
`A.
`The Jarosz Declaration Fails to Demonstrate That the Marketplace
`Performance of Lumify® is Related to Claims 4-6 of the ’742 Patent 38
`The Jarosz Declaration’s Claim That the Actions of the Patent Owner
`and Petitioner Related to Lumify® Purportedly Provide Evidence of
`the Marketplace Success of Lumify® is Flawed and Unreliable ......... 40
`The Jarosz Declaration Fails to Address the Profitability (or Lack
`Thereof) of Lumify® ............................................................................ 44
`
`B.
`
`C.
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`I, Ivan T. Hofmann, hereby declare as follows.
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`PROTECTIVE ORDER MATERIAL
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`I.
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`INTRODUCTION
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`1.
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`I am over the age of eighteen and am competent to make this
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`declaration.
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`2.
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`I have been retained as an independent expert on behalf of Petitioner
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`Slayback Pharma, LLC (“Slayback”) to provide economic analysis in the above-
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`captioned IPR.
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`3.
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`I understand that this IPR involves U.S. Patent No. 8,293,742 B2 (the
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`“’742 Patent”). The ’742 Patent is entitled “Preferential Vasoconstriction
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`Compositions and Methods of Use” and issued on October 23, 2012.1 I understand
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`that the ’742 Patent claims priority to a provisional application filed on August 1,
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`2008 and the ’742 Patent expires on July 14, 2030.2 I understand that according to
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`United States Patent and Trademark Office (“USPTO”) records, the ’742 Patent is
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`
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` 1
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` EX 1001 (’742 Patent).
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`2 EX 1001 (’742 Patent); and EX 2079
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`(https://www.accessdata.fda.gov/scripts/cder/ob/index.cfm, accessed November
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`17, 2022).
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`assigned to Eye Therapies, LLC (“Eye Therapies”).3 I understand that claims 1-6 of
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`the ’742 Patent relate to compositions and methods for using ocular drops containing
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`a certain concentration range of brimonidine as the vasoconstrictor compound to
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`reduce eye redness.4
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`4.
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`I have been asked to review and respond to the Declaration of John C.
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`Jarosz, dated August 26, 2022 (the “Jarosz Declaration”) as it relates to purported
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`commercial success and nexus with respect to Lumify® (brimonidine) and the
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`challenged claims of the ’742 Patent.5, 6
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`
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` EX 1001 (’742 Patent) and EX 1067
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` 3
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`(https://assignment.uspto.gov/patent/index.html#/patent/search/resultFilter?searchI
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`nput=8293742, accessed December 2, 2022).
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`4 EX 1003 (Declaration of Paul A. Laskar, Ph.D., dated November 4, 2021 (the
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`“Laskar Declaration”), pars. 30, 44-47, and 51b) and EX 1002 (Declaration of Neal
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`A. Sher, M.D., FACS, dated November 4, 2021 (the “Sher Declaration”), par. 27).
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`5 EX 2024 (Jarosz Declaration), par. 13.
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`6 I understand that Petitioner has challenged claims 1-6 of the ’742 Patent (Paper
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`13 - Decision Granting Institution of Inter Partes Review 35 U.S.C. 314, 37 C.F.R.
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`42.4, pg. 2).
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`5. My company, Gleason IP (“Gleason”), is being compensated for the
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`work performed on this engagement based on the time incurred by me at a rate of
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`$535 per hour. Our compensation is not affected by the outcome of this matter.
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`II. QUALIFICATIONS AND EXPERIENCE
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`6.
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`I am a Vice President and Managing Director at Gleason. Gleason is
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`an economic, accounting, and financial consulting firm. I am the leader of the
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`Intellectual Property Practice. Prior to joining Gleason, I worked for the global firm
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`of Deloitte.
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`7.
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`I graduated magna cum laude from the University of Notre Dame with
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`a Bachelor of Business Administration degree and a double major in Economics and
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`Accounting. I am a Certified Public Accountant (“CPA”). I am also Certified in
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`Financial Forensics (“CFF”). I am a member of the Licensing Executives Society
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`(“LES”) and have received my Certified Licensing Professional (“CLP”)
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`designation, which is granted by the LES to professionals with demonstrated
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`knowledge and experience in the areas of intellectual property and licensing. I am
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`also a member of the American Economic Association. I have attended and
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`instructed numerous continuing education seminars since the completion of my
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`formal education and have been a speaker on numerous occasions on a variety of
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`financial, economic, accounting, and valuation topics. I have presented to various
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`bar associations and organizations on the issues of intellectual property, objective
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`indicia of nonobviousness, financial damages, valuation, financial statement
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`analysis, and other topics.
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`8.
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`I have extensive knowledge and experience in the areas of economic
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`and market analysis. My intellectual property experience includes valuation of
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`intellectual property, analysis of objective indicia of nonobviousness, market
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`analysis involving product performance, the determination of damages associated
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`with patent infringement and other intellectual property (including lost profits,
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`disgorgement, and reasonable royalties, as applicable), consideration of irreparable
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`harm, analysis of Panduit Factors, and analysis of Georgia-Pacific Factors. I have
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`analyzed damages claims in trademark infringement, false advertising, and other
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`cases involving the Lanham Act. I have experience in a broad range of industries
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`including pharmaceutical and life sciences, manufacturing, retail, technology,
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`healthcare, communications, construction, extractive, and other industries.
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`9. My work experience includes litigation support and consulting
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`engagements with a variety of pharmaceutical and biologics companies. In my work
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`in the pharmaceutical and life sciences industry, I have performed financial and
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`economic analysis for hundreds of pharmaceutical and biologic products, including
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`virtually every major therapeutic class of drugs, as well as numerous medical
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`devices. I have been asked to study and analyze objective indicia of nonobviousness
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`(including commercial success and nexus), consider claims of irreparable harm, the
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`balance of equities, and public interest factors (and related issues associated with
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`bonds therewith), determine and quantify damages, and assist with licensing and
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`settlement discussions.
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`10. My work experience also includes assisting clients with product
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`pipeline consulting. Specifically, I analyze markets and assess the impact that a
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`launch of a product may have on a relevant market. In providing product pipeline
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`consulting, I use my extensive experience in financial modeling for pharmaceutical
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`and life science products that have not yet launched. More precisely, I develop
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`assumptions for financial models in order to project market formation, market
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`penetration, market share, and pricing on a regular basis. Global pharmaceutical and
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`life sciences companies often retain me and my firm to perform these analyses and
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`make decisions based on the accuracy and reliability of the financial modeling that
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`I perform.
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`11.
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`In the course of my work in providing consulting and expert services, I
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`regularly analyze and review data for the pharmaceutical and life sciences industry,
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`including data from IQVIA, Inc. (“IQVIA”), Information Resources, Inc. (“IRI”),
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`Symphony Health Solutions (“Symphony”), Truven Health Analytics (“Truven”),
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`IntrinsiQ Specialty Solutions, Inc. (“IntrinsiQ”), and other service providers. I am
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`knowledgeable regarding the role of pharmaceutical databases such as First
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`Databank, Medispan, Gold Standard, and other information sources in the
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`fulfillment of prescriptions. I am also knowledgeable regarding the process of
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`prescription writing, fulfillment, and product substitution in the pharmaceutical and
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`life sciences industry. I have analyzed data and information and testified as an expert
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`witness numerous times in matters involving the pharmaceutical and life sciences
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`industry and the role of brand versus generic competition. I have been qualified as
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`an expert witness in pharmaceutical economics on numerous occasions by various
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`federal courts and institutions.
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`12.
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`I have been engaged by the USPTO and Office of the Solicitor as an
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`expert to analyze and testify on economic issues involving intellectual property in
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`proceedings for the Honorable David Kappos, while Under Secretary of Commerce
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`for Intellectual Property and Director of the USPTO; the Honorable Michelle Lee,
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`while Under Secretary of Commerce for Intellectual Property and Director of the
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`USPTO; the Honorable Joseph Matal, while performing the functions and duties of
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`Under Secretary of Commerce for Intellectual Property and Director of the USPTO;
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`the Honorable Andrei Iancu, while Under Secretary of Commerce for Intellectual
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`Property and Director of the USPTO; and the Honorable Katherine Vidal, Under
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`Secretary of Commerce for Intellectual Property and Director of the USPTO.
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`13.
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`I also have extensive experience in analyzing, calculating, and
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`determining damages and other financial and economic issues in various dispute
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`settings. I have been designated as a testifying expert in federal and state courts,
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`Chancery Court, the United States International Trade Commission, the Patent Trial
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`and Appeal Board (“PTAB”), and on matters before the Supreme Court of the United
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`States and various domestic and international arbitration panels. I have analyzed
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`damages involving intellectual property disputes, breach of contract claims,
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`shareholder disputes, insurance recovery, class actions, and others. I also have
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`experience assessing claims of irreparable harm, the balance of equities, and public
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`interest factors in connection with temporary restraining order hearings, preliminary
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`injunction hearings, and other injunctive relief and determining whether financial
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`damages are calculable, including issues associated with related bonds.
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`14. My curriculum vitae and list of testimony in the past four years is
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`included as EX 1068.
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`III. DOCUMENTS REVIEWED
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`15. The bases for my opinions herein are: (i) the materials and independent
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`research identified throughout this declaration; (ii) the Exhibits set forth in this
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`declaration; (iii) the exhibits attached to the Jarosz Declaration; (iv) the ’742 Patent;
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`and (v) my knowledge, education, and experience. The materials and exhibits that I
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`have cited and that are included in Appendix 1 to this declaration are among the
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`types of information reasonably relied upon by experts in my field for the purposes
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`of forming opinions or inferences on the matters that are the subject of my work in
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`this case. Throughout this declaration, I cite portions of these documents. These
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`citations are intended only as examples, however, and I reserve the right to rely on
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`all portions of the documents cited herein.
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`16. This declaration is based on information known to me as of the date I
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`signed this declaration and I reserve the right to amend or supplement this
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`declaration in response to any additional information that becomes available. The
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`work on this engagement was performed by me and others at Gleason working under
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`my direct supervision.
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`IV. SUMMARY OF OPINIONS
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`17. The marketplace performance of Lumify® does not provide objective
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`evidence of nonobviousness of the challenged claims of the ’742 Patent for at least
`
`the following reasons:
`
`a. The marketplace performance of Lumify® is driven by features that I
`
`understand were known in the prior art.
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`b. The discussion of marketing efforts in the Jarosz Declaration is incomplete
`
`and misleading and the Jarosz Declaration fails to appropriately address
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`that the marketing and promotional efforts by Bausch for Lumify® also
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`drive the marketplace performance of Lumify®.
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`V. BACKGROUND
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`PROTECTIVE ORDER MATERIAL
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`18. Bausch & Lomb, Inc. (“Bausch & Lomb”) acquired an exclusive global
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`license to the ’742 Patent from Eye Therapies in January 2013.7 The United States
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`
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` EX 2124 (https://www.prnewswire.com/news-releases/bausch--lomb-licenses-
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` 7
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`new-technology-with-potential-to-treat-millions-affected-by-ocular-redness-
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`185856742.html, accessed November 17, 2022). I understand that Bausch &
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`Lomb is (and has been) an indirect wholly-owned subsidiary of Bausch Health
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`Companies, Inc. (“Bausch Health”) during the period that Bausch & Lomb has
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`marketed and sold Lumify®. I further understand that Bausch & Lomb is in the
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`process of separating from Bausch Health into an independent publicly traded
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`entity. Throughout this declaration, I refer to the companies marketing and selling
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`Lumify® as “Bausch.” See EX 1069 (Bausch SEC Form 10-Q, for the period
`
`ended June 30, 2022, pg. 2, available at
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`https://otp.tools.investis.com/clients/us/bausch_health_companies/SEC/sec-
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`show.aspx?FilingId=16064281&Cik=0000885590&Type=PDF&hasPdf=1,
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`accessed November 17, 2022). Exhibit 1069 is a true and accurate copy of the
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`Bausch SEC Form 10-Q Statement that I accessed at the aforementioned website.
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`Such SEC filings are regularly and reasonably relied upon by experts in my field
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`Food and Drug Administration (“FDA”) approved Bausch’s New Drug Application
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`(“NDA”) No. 208144 for Lumify® on December 22, 2017 and Bausch launched
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`Lumify® on May 7, 2018.8 Lumify® (brimonidine) is an over-the-counter (“OTC”)
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`eye drop indicated for relief of redness of the eye due to minor eye irritations.9
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`19.
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`I understand that Slayback filed Abbreviated New Drug Application
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`(“ANDA”) No. 216361 with FDA seeking approval for a generic version of Lumify®
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`(brimonidine tartrate ophthalmic solution, 0.025%). In July 2022, Dr. Reddy’s
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`for the purposes of forming opinions or inferences on the matters that are the
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`
`
`subject of my work in this case.
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`8 EX 2065 (Lumify® NDA Approval, December 22, 2017) and EX 2103
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`(https://ir.bauschhealth.com/news-releases/2018/05-07-2018-130249958, accessed
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`November 17, 2022).
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`9 EX 2191 (Lumify® Label, December 2017, available at
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`https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/208144Orig1s000lbl.p
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`df, accessed November 17, 2022).
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`Laboratories, Ltd. announced that it entered into a license agreement with Slayback
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`for the rights to Slayback’s ANDA for a generic equivalent of Lumify®.10
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`VI. THE DEFINITIONS OF COMMERCIAL SUCCESS AND NEXUS
`RELATIVE TO OBJECTIVE INDICIA OF NONOBVIOUSNESS
`
`20.
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`It is my understanding that “commercial success” is a legal construct
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`that has been established through case law. Analysis of commercial success is
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`premised on the concept that if a product is economically successful, that the
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`economic success may provide objective evidence of nonobviousness.
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`21.
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`I further understand that the commercial success of the product must be
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`attributable to the allegedly novel features of the claimed invention. I understand
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`this to mean that, to support a finding of nonobviousness, commercial success must
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`be driven by and attributable to the purported merits of the patented invention. In
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`other words, there must be a causal correlation, or “nexus,” between the unique merit
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`of the claimed invention and the success of the product. I also understand that if
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`purported commercial success is due to an element in the prior art, no nexus exists.
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`10 EX 2097 (https://www.businesswire.com/news/home/20220729005454/en/Dr.-
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`
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`Reddys-Laboratories-enters-into-a-licensing-agreement-with-Slayback-Pharma-to-
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`%E2%80%A61/3, accessed November 17, 2022).
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`In essence, I understand that if the feature that creates the purported success was
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`known in the prior art, such success is not pertinent to nonobviousness.
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`22.
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`I apply this understanding to my economic analysis of the issues in this
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`matter regarding the ’742 Patent.
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`VII. THE MARKETPLACE PERFORMANCE OF LUMIFY® FAILS TO
`PROVIDE OBJECTIVE INDICIA OF NONOBVIOUSNESS OF THE
`CHALLENGED CLAIMS OF THE ’742 PATENT
`
`23. The Jarosz Declaration alleges that Lumify® has been a marketplace
`
`success and that there is a purported nexus between such claimed success and the
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`challenged claims of the ’742 Patent.11 I disagree. Based upon my analysis, the
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`marketplace performance of Lumify® is driven by features that I understand were
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`known in the prior art and by the marketing and promotional efforts of Bausch for
`
`Lumify®. Therefore, the marketplace performance of Lumify® fails to provide
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`objective indicia of nonobviousness of the challenged claims of the ’742 Patent.
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`A.
`
`The Marketplace Performance of Lumify® is Driven by Features
`That I Understand Were Known in the Prior Art
`
`
`24. The Jarosz Declaration alleges that there is a nexus between the
`
`marketplace performance of Lumify® and the challenged claims of the ’742 Patent
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`11 EX 2024 (Jarosz Declaration, par. 13).
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`without addressing whether the features that drive the marketplace performance of
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`Lumify® were known in the prior art. As previously discussed, I understand that if
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`purported commercial success is due to an element in the prior art, then no nexus
`
`exists. In essence, if the feature or features that create the purported success were
`
`known in the prior art, such success is not pertinent to non-obviousness.
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`25.
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` Furthermore, the Jarosz Declaration alleges that such features are
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`directly related to the use of low-dose brimonidine tartrate and Lumify®’s unique
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`mechanism of action.13 However, the Jarosz Declaration fails to address the alleged
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`benefits of the challenged claims of the ’742 Patent compared to what was known in
`
`the prior art. This causes the discussion in the Jarosz Declaration to be incomplete
`
`and unreliable.
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`12 EX 2024 (Jarosz Declaration, pars. 104-105).
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`13 EX 2024 (Jarosz Declaration, par. 105).
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`26. The Jarosz Declaration claims that the efficacy of Lumify® is directly
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`related to the challenged claims of the ’742 Patent.14 However, I understand from
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`the Laskar Declaration and the Sher Declaration (the “Petitioner’s Technical
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`Experts”) that the prior art to the challenged claims of the ’742 Patent includes 0.03
`
`percent weight by volume brimonidine in Example 1 of U.S. Patent No. 6,294,553
`
`(the “’553 Patent”) and 0.02 percent weight by volume brimonidine in Walters
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`1991.15 I also understand that Petitioner’s Technical Experts have stated that it was
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`known in the prior art to the challenged claims of the ’742 Patent that the use of
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`brimonidine was “effective in reducing neurogenic responses” such as “redness” and
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`reducing eye redness caused by ocular inflammation, in conjunction with refractive
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`surgery, and in LASIK patients.16
`
`27.
`
`I also understand that the prior art, including at least Example 4 of the
`
`’553 Patent, disclosed the topical application of brimonidine for treating ocular pain
`
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`14 EX 2024 (Jarosz Declaration, pars. 104-105).
`
`
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`15 EX 1003 (Laskar Declaration, par. 105) and EX 1002 (Sher Declaration, pars. 43
`
`and 69).
`
`16 EX 1002 (Sher Declaration, pars. 86, 91, 93, and 112) and EX 1003 (Laskar
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`Declaration, par. 90).
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`and neurogenic inflammation, including redness.17 Therefore, I understand that it
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`was known in the prior art that the administration of brimonidine in low
`
`concentrations was effective to reduce eye redness. I further understand that in
`
`Example 1 of the ’553 Patent, the concentration of brimonidine is administered as a
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`0.03 percent weight by volume ophthalmic solution.18 I understand that the
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`concentration of 0.03 percent weight by volume is between about 0.001 percent
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`weight by volume and about 0.05 percent weight by volume, as stated in claim 1 of
`
`the ’742 Patent.19 Furthermore, I understand that other challenged claims of the ’742
`
`Patent include a concentration of brimonidine between about 0.001 percent weight
`
`by volume and about 0.025 percent weight by volume.20 However, I understand that
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`“about 0.025” percent weight by volume of brimonidine includes 0.03 percent
`
`weight by volume (as included in the ’553 Patent) and accomplishes the purpose of
`
`the claimed invention of the ’742 Patent.21
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`17 EX 1002 (Sher Declaration, pars. 87 and 89).
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`
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`18 EX 1003 (Laskar Declaration, pars. 76-79).
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`19 EX 1003 (Laskar Declaration, par. 80).
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`20 EX 1001 (’742 Patent, 22:22-32).
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`21 EX 1003 (Laskar Declaration, pars. 57 and 63-64).
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`In addition to the ’553 Patent, I understand that Walters 1991 supports
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`28.
`
`that the efficacy of brimonidine (including the administration of brimonidine in low
`
`concentrations) was known in the prior art to reduce eye redness.22 More
`
`specifically, I understand that Walters 1991 discloses twice daily administration of
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`brimonidine in concentrations of 0.02 percent weight by volume and 0.08 percent
`
`weight by volume to patients with open-angle glaucoma or ocular hypertension.23
`
`The Laskar Declaration states that “[t]he 0.02 [percent weight by volume
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`brimonidine] in Walters 1991 falls within the ‘about 0.01 [percent weight by
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`volume] to about 0.05 [percent weight by volume]’ range recited in the ’742 patent
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`as a ‘preferred’ brimonidine concentration range for ‘scleral whitening’ and within
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`the ‘about 0.015 [percent weight by volume] to about 0.02 [percent weight by
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`volume]’ range which is recited as ‘even more’ preferable.”24 Therefore, I
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`22 EX 1002 (Sher Declaration, pars. 71-73) and EX 1003 (Laskar Declaration, par.
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`
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`89).
`
`23 EX 1003 (Laskar Declaration, pars. 83-84) and EX 1002 (Sher Declaration, pars.
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`71-72).
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`24 EX 1003 (Laskar Declaration, par. 89).
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`understand that the claimed efficacy of Lumify® was known in the prior art and is
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`not novel to the challenged claims of the ’742 Patent.
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`29. With respect to safety and tolerability, I understand that it was known
`
`in the prior art that brimonidine was safe and well-tolerated, with a low rate of
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`allergic response and that “all known side effects of brimonidine are generally minor
`
`and transient.”25 Indeed, brimonidine was approved and used in the product
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`Alphagan® for lowering intraocular pressure in patients with open-angle glaucoma
`
`or ocular hypertension, as early as 1998.26 Therefore, I understand that the claimed
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`safety and tolerability of Lumify® were known in the prior art and are not novel to
`
`the challenged claims of the ’742 Patent.
`
`30. The Jarosz Declaration also alleges that the lack of rebound hyperemia
`
`or tachyphylaxis even after repeated use over time of Lumify® is directly related to
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`the challenged claims of the ’742 Patent.27 I understand that the claim of a lack of
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`rebound hyperemia or tachyphylaxis after repeated use over time is attributable to
`
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`25 EX 1002 (Sher Declaration, pars. 35 and 100).
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`
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`26 EX 1002 (Sher Declaration, pars. 96-97).
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`27 EX 2024 (Jarosz Declaration, pars. 104-105).
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`the administration of brimonidine in low concentrations.28 As previously discussed,
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`I understand that the administration of brimonidine in low concentrations (that is,
`
`within the concentration ranges disclosed in the challenged claims of the ’742
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`Patent) was known in the prior art and is not novel to the challenged claims of the
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`’742 Patent.29 Furthermore, I understand that lack of rebound hyperemia or
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`tachyphylaxis after repeated use over time are not listed in the challenged claims of
`
`the ’742 Patent, which the Jarosz Declaration fails to appropriately address.30
`
`31. The Jarosz Declaration fails to appropriately address that the alleged
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`features of tolerability, safety, efficacy, and lack of tachyphylaxis even after repeated
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`use over time of Lumify® are features that I understand were known in the prior art
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`to the challenged claims of the ’742 Patent, and therefore, I understand are not novel
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`to the challenged claims of the ’742 Patent. To the extent that the Jarosz Declaration
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`is claiming that such features drive the marketplace performance of Lumify®, I
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`28 EX 1049 (Declaration of Neal A. Sher, M.D. in Support of Petitioner’s Reply,
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`
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`dated December 16, 2022 (the “Sher Reply Declaration”), par. 111).
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`29 EX 1002 (Sher Declaration, pars. 71-73, 87, and 89) and EX 1003 (Laskar
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`Declaration, pars. 83-84).
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`30 EX 1049 (Sher Reply Declaration, par. 112).
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`understand that there is no nexus between such features and the challenged claims
`
`of the ’742 Patent.
`
`B.
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`The Jarosz Declaration Fails to Appropriately Address Marketing
`and Promotion of Lumify®, Which Also Drive the Marketplace
`Performance of Lumify®
`
`32. The Jarosz Declaration acknowledges that “[t]he marketing of
`
`
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`Lumify[®] matters.”31 However, the Jarosz Declaration claims that the marketing of
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`Lumify® “is not the primary driver, to the exclusion of the benefits attributable to
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`the claimed inventions, of the marketplace success experienced by Lumify[®].”32 I
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`disagree. The Jarosz Declaration fails to appropriately address the marketing and
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`promotional efforts for Lumify®, rendering the discussion in the Jarosz Declaration
`
`incomplete and unreliable.
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`33. Generally, the pharmaceutical industry dedicates a significant amount
`
`of financial and human resources to marketing and promotion. Companies such as
`
`Bausch are profit maximizing entities. Profit maximizing entities would not expend
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`substantial resources on marketing and promotion if they expected no benefit from
`
`such expenditures.
`
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`
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`31 EX 2024 (Jarosz Declaration, par. 128).
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`
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`32 EX 2024 (Jarosz Declaration, par. 128).
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` Bausch has devoted significant promotional efforts since
`
`launch and has recognized the importance and impact of such marketing efforts for
`
`Lumify®, as shown in the following examples from Bausch’s earnings call
`
`transcripts:
`
`• We are back with TV advertising [for Lumify®]…[w]e think that's an
`important part of it, but we also think the other part of it is the
`integrated eye care approach we have allows our teams in
`ophthalmologist offices and optometry offices to drop off samples and
`that's the reason we are getting great referrals [for Lumify®] and why
`we're the #1 referral product for the treatment of redness relief from
`ophthalmologists and optometry.34
`
`
`33 For example, EX 2156 (Lumify® ECP A&U Report 2020, pgs. 18 and 30) and
`
`
`
`EX 2075 (Bausch 2021 FY Presentation, slide 22).
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`34 EX 1070 (Bausch Fourth Quarter 2018 Earnings Call Transcript, dated February
`
`20, 2019, pg. 12, available at https://seekingalpha.com/article/4242568-bausch-
`
`health-companies-inc-bhc-ceo-joseph-papa-on-q4-2018-results-earnings-call-
`
`transcript, accessed November 17, 2022). Exhibits 1070-1073 are true and
`
`accurate copies of the earnings call transcripts that I accessed at the Seeking Alpha
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`website. Earnings call transcripts are regularly and reasonably relied upon by
`
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`• Adjusted selling, advertising and promotion expense increased $20
`million on a reported basis, with the biggest drivers being the addition
`of the 100 sales reps and associated promotional spend in connection
`with the TRULANCE acquisition in the Salix segment and increased
`spend in [Bausch & Lomb]/International to support growth products,
`including LUMIFY.35
`
`• The mostly used example there is DTC advertising. I hope everybody
`on this call constantly [sees] our advertisements for our eye vitamins
`and for LUMIFY.36
`
`• Our team was able to drive education and awareness for [Lumify®] by
`collaborating with eye care professionals while driving awareness
`
`
`
`
`
`
`experts in my field for the purposes of forming opinions or inferences on the
`
`
`
`matters that are the subject of my work in this case.
`
`35 EX 1071 (Bausch Second Quarter 2019 Earnings Call Transcript, dated August
`
`6, 2019, pg. 3, available at https://seekingalpha.com/article/4282236-bausch-
`
`health-companies-inc-bhc-ceo-joseph-papa-on-q2-2019-results-earnings-call-
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`transcript, accessed November 17, 2022).
`
`36 EX 1072 (Bausch Fourth Quarter 2020 Earnings Call Transcript, dated February
`
`24, 2021, pg. 14, available at https://seekingalpha.com/article/4408646-bausch-
`
`health-companies-inc-bhc-ceo-joe-papa-on-q4-2020-results-earnings-call-
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`transcript, accessed November 17, 2022).
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`among beauty enthusiasts with a strong television, public relations and
`social media presence.37
`
`
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`• We are then able to leverage the 400-plus person Bausch & Lomb sales
`force for detailing and distribution directly to optometrists and
`ophthalmologists and achieved the distinction of being the number 1
`physician recommended product in the redness reliever category.38
`
`
`34. As shown in the above examples, Bausch has repeatedly acknowledged
`
`the importance and impact of its selling, advertising, and promotional efforts for
`
`Lumify® to drive the marketplace performance of Lumify®.
`
`1.
`
`DTC Advertising
`
`
`35. Bausch used various marketing techniques to promote Lumify®,
`
`including DTC advertising. DTC advertising is consumer focused and can impact a
`
`
`37 EX 1073 (Bausch Fourth Quarter 2021 Earnings Call Transcript, dated February
`
`
`
`23, 2022, pg. 8, available at https://seekingalpha.com/article/4489552-bausch-
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`health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-
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`transcript, accessed November 17, 2022).
`
`38 EX 1073 (Bausch Fourth Quarter 2021 Earnings Call Transcript, dated February
`
`23, 2022, pg. 8, available at https://seekingalpha.com/article/4489552-bausch-
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`health-companies-inc-bhc-ceo-joseph-papa-on-q4-2021-results-earnings-call-
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`transcript, accessed November 17, 2022).
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`patient’s preference for a particular product. The goal of DTC advertising is to
`
`inform patients about certain products and have patients ask healthcare professionals
`
`if that product is appropriate for their treatment, or in the case of OTC products,
`
`encourage the