UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________
`
`
`
`ALTAIRE PHARMACEUTICALS, INC.,
`Petitioner,
`
`v.
`
`PARAGON BIOTECK, INC.,
`Patent Owner.
`____________________
`
`Case PGR 2015-00011
`Patent 8,859,623 B1
`____________________
`
`
`
`
`
`PETITIONER’S REPLY TO
`PATENT OWNER’S RESPONSE
`
`
`__________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________
`
`
`
`ALTAIRE PHARMACEUTICALS, INC.,
`Petitioner,
`
`v.
`
`PARAGON BIOTECK, INC.,
`Patent Owner.
`____________________
`
`Case PGR 2015-00011
`Patent 8,859,623 B1
`____________________
`
`
`
`
`
`PETITIONER’S REPLY TO
`PATENT OWNER’S RESPONSE
`
`
`
`
`
`TABLE OF CONTENTS
`
`Patent Owner Conjecture is Insufficient to Show that Petitioner’s
`
`The Real Party-In-Interest Argument Is An Unauthorized Motion to
`
`INTRODUCTION .............................................................................................. 1
`I.
`II. ASSAD SAWAYA QUALIFIES AS AN EXPERT WITNESS ...................... 2
`III. A PREPONDERANCE OF EVIDENCE ESTABLISHES THAT THE
`CHALLENGED CLAIMS ARE UNPATENTABLE ..................................... 4
`A.
`Patent Owner Waived its Objections to Petitioner’s Evidence ........... 4
`B. HPLC Test ................................................................................................. 7
`C. Optical Rotation Test ............................................................................. 10
`D.
`Products Were Not Stored Between 2° and 8° Celsius ....................... 14
`IV. THE PETITION CORRECTLY IDENTIFES THE REAL PARTY-IN-
`INTEREST ........................................................................................................ 17
`A.
`Terminate ................................................................................................ 17
`B.
`The Sawayas are Not Real Parties-In-Interest .................................... 20
`C.
`Sawaya Aquebogue is Not a Real Party-In-Interest ........................... 21
`V. CONCLUSION ................................................................................................. 26
`
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`i
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`TABLE OF AUTHORITIES
`
`Page(s)
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`CASES
`Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc., IPR2014-01288 ...................... 23, 24
`
`Butamax Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00215 ................................ 20
`
`Daifuku Co., Ltd. v. Murata Machinery, Ltd., Case IPR2015-01539..................... 22, 24
`
`U.S. v. Bestfoods, 524 U.S. 51 (1998) .......................................................................... 22
`
`Zoll Lifecor Corp. v. Philips Elecs. N. Am. Corp., IPR2013-00609 ............................ 24
`
`STATUTES
`
`35 U.S.C. § 103 ............................................................................................................... 1
`
`35 U.S.C. § 315(b) ........................................................................................................ 20
`
`REGULATIONS
`
`37 C.F.R. 42.64(b)(1) ...................................................................................................... 5
`
`37 C.F.R. 42.220(a) ....................................................................................................... 17
`
`37 C.F.R. § 42.65 ............................................................................................................ 5
`
`
`
`ii
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`EXHIBIT LIST
`
`
`
`Exhibit No.
`
`Exhibit Name
`
`Exhibit 1025: Declaration No. 3 of Assad Sawaya (May 4, 2016)
`
`Exhibit 1026: Deposition Transcript of Gojko Lalic, Ph.D. (April 12, 2016)
`
`Exhibit 1027:
`
`TMQC# 247-01 (March 17, 2015)
`
`Exhibit 1028:
`
`TMQC# 247-00 (May 31, 2013)
`
`Exhibit 1029: Declaration of Rashid Zaman (May 5, 2016)
`
`Exhibit 1030:
`
`STU0346 (May 29, 2013)
`
`Exhibit 1031:
`
`Transmittal letter from M. Sawaya to L. McBluett (March 26,
`2014)
`
`Exhibit 1032: Declaration No. 2 of Michael Sawaya (May 4, 2016)
`
`Exhibit 1033:
`
`Email from L. McBluett to M. Sawaya (March 25, 2014)
`
`Exhibit 1034: Deposition Transcript of Sailaja Machiraju (April 29, 2016)
`
`Exhibit 1035: Orange Book listing for U.S. Patent No. 8, 859,623 (Accessed
`May 4, 2016)
`
`Exhibit 1036:
`
`Email from A. Brown to D. Doshi et al. (April 8, 2016)
`
`iii
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`
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`I.
`
`INTRODUCTION
`
`Patent Owner’s Response (Paper 20) fails to provide any evidence that
`
`Petitioner’s products sold prior to the earliest effective filing date were not chirally
`
`pure. Nor does Patent Owner provide any evidence that Lots 11578 and 11581
`
`were not tested after cold storage at 2-8°C. Patent Owner also fails to provide any
`
`rebuttal to Petitioner’s position that the claimed invention would have been
`
`obvious under 35 U.S.C. § 103.
`
`Patent Owner only argues that Petitioner has failed to meet its burden (a
`
`preponderance of the evidence). In support, Patent Owner provides tests to show
`
`that the USP standard HPLC test cannot distinguish R-phenylephrine from S-
`
`phenylephrine. But Petitioner did not rely on the USP standard HPLC test; instead,
`
`Petitioner relied on its proprietary HPLC test that can distinguish between R-
`
`phenylephrine from S-phenylephrine—this is the same proprietary test that Patent
`
`Owner relies on in its dealings with Petitioner, the Food & Drug Administration
`
`(FDA), and its customers.
`
`Patent Owner also attempts to discredit Petitioner’s optical rotation tests
`
`notwithstanding Patent Owner’s reliance on the optical rotation tests in support of
`
`its New Drug Application (NDA) to the FDA. And while it calls into question the
`
`chiral purity of the R-phenylephrine standard used in the optical rotation tests,
`
`Patent Owner fails to provide any evidence to show that the representation of the
`
`
`
`
`
`1
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`
`
`
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`commercial provider – Sigma-Aldrich – that its R-phenylephrine standard has a
`
`chiral purity of ≥99% was unreliable. To the contrary, both of Patent Owner’s
`
`witnesses testified that it is reasonable to rely on a third party vendor’s
`
`representations and warranties of chiral purity.
`
`Finally, Patent Owner has not sought authorization to file a motion to
`
`terminate. Nevertheless, Patent Owner spends nearly two-thirds of its 54-page
`
`Response conflating Altaire and third party Sawaya Aquebogue (among others)
`
`and obfuscating the relationship of the parties with their relationship to this
`
`proceeding with nothing more than attorney argument. While Petitioner
`
`respectfully submits that the issue is not procedurally before the Board, Petitioner
`
`addresses the real party-in-interest in an abundance of caution. If Patent Owner
`
`files a motion to terminate, Petitioner should have an opportunity to properly brief
`
`the issue without the word count limitation imposed on this Reply.
`
`II. ASSAD SAWAYA QUALIFIES AS AN EXPERT WITNESS
`Mr. Assad Sawaya is qualified to testify as an expert witness. Mr. Sawaya is
`
`the president of a pharmaceutical company and possesses extensive experience in
`
`the pharmaceutical arts. Consistent with his role as president of Altaire
`
`Pharmaceuticals, Inc., Mr. Sawaya has personal knowledge in reviewing,
`
`analyzing, interpreting, and opining on testing methodologies and results. See Ex.
`
`1025 at ¶¶ 2 and 8. Mr. Sawaya has over 50 years of experience in the
`
`
`
`
`
`2
`
`
`
`
`
`pharmaceutical industry with extensive experience testing and analyzing results for
`
`a variety of testing methodologies, such as HPLC reports and optical rotation
`
`reports. See id. Ex. 1025 at ¶¶ 2-5 and 8; see also id., Ex. A at 2-3.
`
`As such, Mr. Sawaya is not only qualified as an expert, but also has the
`
`knowledge, skill, experience, and training in the pharmaceutical arts to testify as to
`
`what a person of ordinary skill in the art would have understood as of the filing
`
`date of the ’623 patent.1 See, e.g., Petition at 30.
`
`To the extent the Board finds that Mr. Sawaya is not an expert, “the lack of
`
`expert testimony is not, as Patent Owner argues, fatal to the Petition.” See
`
`Decision at 14. “[W]here the factual inquiries underlying the obviousness
`
`determination are not in material dispute, expert testimony, though it might be
`
`helpful, may not be indispensable.” Id.
`
`
`1 While Patent Owner has provided an alternative definition of the level of ordinary
`
`skill in the art, its expert admitted he does not rely on the alternative definition for
`
`any part of his analysis. Ex. 1026 34:10-14. Patent Owner’s expert admitted that
`
`the subject matter of the ’623 patent has “nothing to do with what [he’s] been
`
`asked to do.” Id. at 18:14-21. Patent Owner’s expert also admitted that he does
`
`not opine on the validity of the challenged claims. Id. at 17:20-18:1.
`
`
`
`
`
`3
`
`
`
`
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`III. A PREPONDERANCE OF EVIDENCE ESTABLISHES THAT THE
`CHALLENGED CLAIMS ARE UNPATENTABLE
`
`Patent Owner fails to proffer any factual evidence refuting Petitioner’s
`
`evidence that Petitioner’s products meet the limitations of the challenged claims or
`
`otherwise render the challenged claims obvious. Instead, Patent Owner refers to a
`
`different HPLC test than the test used by Petitioner in an attempt to discredit the
`
`evidence supporting the Petition. Results from a HPLC test that cannot distinguish
`
`between the phenylephrine enantiomers cannot be used to undermine results from a
`
`HPLC test that can.
`
`In addition, Patent Owner’s only argument regarding Petitioner’s optical
`
`rotation results is the mere suggestion – without any evidence – that the USP R-
`
`phenylephrine standard used in Petitioner’s optical rotation tests may not have
`
`been chirally pure. Patent Owner, however, ignores the corroborative evidence
`
`that shows that the USP R-phenylephrine standard was indeed essentially pure.
`
`Accordingly, Patent Owner’s arguments that the optical rotation tests are unreliable
`
`– tests that it has previously relied on and continues to rely on – should be given no
`
`weight.
`
`A.
`
`Patent Owner Waived its Objections to Petitioner’s Evidence
`
`Patent Owner argues that Petitioner’s evidence, including the HPLC reports
`
`supporting the Petition, should be given no weight because of alleged issues
`
`relating to the evidentiary basis of the HPLC reports. See, e.g., Response at 30-38
`
`
`
`
`
`4
`
`
`
`
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`(arguing, inter alia, that Petitioner allegedly failed to comply with 37 C.F.R.
`
`§ 42.65). These arguments are untimely. Patent Owner failed to timely object
`
`pursuant to 37 C.F.R. § 42.64(b)(1), and, as a result, waived its objections to
`
`Petitioner’s evidence. Had Patent Owner followed the rules and timely objected
`
`(see § 42.64(b)(1)), Petitioner could have, if deemed necessary, served
`
`supplemental evidence or sought leave to file supplemental information to address
`
`Patent Owner’s concerns. Patent Owner failed to timely object, and therefore it
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`cannot now object on the grounds that certain details are allegedly missing.
`
`Moreover, the information that Patent Owner contends is lacking is and has
`
`been in Patent Owner’s possession. For example, Patent Owner is aware of the
`
`details of Petitioner’s test method <TMQC-247> (Exs. 1027 and 1028; see also Ex.
`
`1029 ¶¶ 11-12) (as validated by Validation Report STU0346 (Ex. 1030 )). Indeed,
`
`Patent Owner received a copy of Validation Report STU0346 on or before March
`
`26, 2014 (see Ex. 1031); see also Ex. 1032 ¶ 4) in response to its request for “all
`
`the work you have on chiral purity.” See Ex. 1033; see also Ex. 1032 ¶¶ 2-3.
`
`Patent Owner requested such data to support its annual reporting requirements to
`
`the FDA regarding its NDA for phenylephrine products. See Ex. 1033 at 1.
`
`Validation Report STU0346 (Ex. 1030) corroborates the testimony of at least Mr.
`
`Sawaya and Exhibits 1015, 1019, and 1020 that Petitioner’s test method <TMQC-
`
`247> can distinguish between R-phenylephrine and S-phenylephrine.
`
`
`
`
`
`5
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`
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`Mr. Sawaya testified that a chromatogram report of a USP reference
`
`standard known to contain R-phenylephrine and S-phenylephrine (Ex. 1015) tested
`
`by Petitioner’s test method <TMQC-247> “shows [an] R-Phenylephrine peak
`
`appearing at a retention time of 7.8 minutes and [an] S-Phenylephrine peak
`
`appearing at a retention time of 9.2 minutes.” Ex. 1003, ¶¶ 21 and 23. Exhibit
`
`1015 (reproduced below in relevant part) shows two peaks – not one – representing
`
`R-phenylephrine and S-phenylephrine separately, as labeled.
`
`
`
`Similarly, Exhibits 1019 and 1020 both provide tables quantifying the
`
`percentage of R-Phenylephrine and S-Phenylephrine detected. See, generally, Exs.
`
`1019 and 1020. For example, Petitioner’s test method <TMQC-247> detected
`
`0.34% of S-phenylephrine in sample 13142. See Ex. 1019. Further, Petitioner’s
`
`test method <TMQC-247> detected S-phenylephrine in several samples of the drug
`
`substance used in the manufacture of phenylephrine HCl ophthalmic solution. See
`
`Ex. 1020.
`
`
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`
`
`6
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`
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`Validation Report STU0346 (Ex. 1030) corroborates Petitioner’s evidence.
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`For example, on page 35 of Exhibit 1030, Validation Report STU0346 detected
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`nearly identical percentages of R-phenylephrine and S-phenylephrine of a
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`“Phenylephrine HCl-D3 (racemate) (Lot# FN081511-04)” (see Ex. 1030 at 33
`
`(emphasis added)), which is a sample that has equal amounts of R-phenylephrine
`
`and S-phenylephrine (see, e.g., Ex. 2016, ¶ 21).
`
`Patent Owner is in possession of the Validation Report STU0346 (among
`
`other reports) because it relies on Petitioner’s proprietary technology to
`
`demonstrate the chiral purity of the products it purchases from Petitioner and sells
`
`and distributes to its customers, as discussed in more detail below.2 Patent
`
`Owner’s arguments that these same reports that it relies on in its usual course of
`
`business are somehow now unreliable and untrustworthy should be given no
`
`weight.
`
`B. HPLC Test
`
`Patent Owner challenges the Petition’s HPLC results and mischaracterizes
`
`
`2 The fact that Patent Owner has relied on Petitioner’s test method <TMQC-247>
`
`(and Petitioner’s optical rotation tests, discussed below) may explain why Patent
`
`Owner refused to make one of its fact witnesses – who has personal knowledge of
`
`such reliance – available for cross-examination in this proceeding. See Ex. 1036.
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`
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`
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`7
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`
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`Petitioner’s test methods even though Patent Owner relies upon the same testing
`
`method to evaluate Petitioner’s products. Patent Owner claims Petitioner’s HPLC
`
`results were generated using the method detailed in the USP standard HPLC
`
`protocol. See Paper 20 at 38. This is not so.3
`
`Petitioner instead relies on its proprietary HPLC procedure <TMQC-247>
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`(ref.: Validation Report STU0346). See Paper 1 at 20; see also Ex. 1030. This
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`procedure is an in-house developed procedure capable of distinguishing R-
`
`phenylephrine and S-phenylephrine. See Ex. 1030; Ex. 1016; Ex. 1027; Ex. 1028;
`
`Ex. 1029 ¶¶ 14, 22.
`
`Indeed, Mr. Sawaya described Petitioner’s HPLC testing method as
`
`“proprietary.” See Ex. 1003 ¶ 21. Patent Owner’s suggestion that Petitioner
`
`instead relied on the publicly available USP HPLC test method is directly contrary
`
`to Mr. Sawaya’s testimony that a “proprietary” method – i.e., not publicly
`
`available – was used. Therefore, it would be unreasonable for Patent Owner to
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`conclude that the method described by Mr. Sawaya was the publicly available USP
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`HPLC method.
`
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`3 In its Decision, the Board relied on Patent Owner’s representations that Petitioner
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`used the HPLC method published by the USP Guidelines. This is Petitioner’s first
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`opportunity to rebut Patent Owner’s representations.
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`8
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`
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`Mr. Sawaya testified that the method was validated pursuant to USP <1225>
`
`Validation of Compendial Procedures. See Ex. 1003 at n.5. The Validation of
`
`Compendial Procedures monograph (see Ex. 2011) sets forth the requirements for
`
`an analytical method to be validated; it does not set forth a method of conducting
`
`HPLC testing, nor does it require a method to follow the USP published HPLC
`
`method to obtain validation. Compare Ex. 2011 with Ex. 2009. Patent Owner’s
`
`assumption and accompanying testing data are directly contrary to Patent Owner’s
`
`own knowledge of Petitioner’s procedures. See, e.g., Ex. 1031.
`
`It is telling that Patent Owner did not conduct its own testing to show that
`
`Petitioner’s products do not meet the limitations of the challenged claims. Instead,
`
`Patent Owner instructed its expert to analyze results from a non-applicable method.
`
`See Paper 20 at 39-40; see also Ex. 1034 at 70:2-7. Patent Owner instructed an
`
`employee to have a lab perform experiments using a method Patent Owner itself
`
`knew Petitioner does not use. See, e.g., Ex. 1031.
`
`Contrary to Patent Owner’s contention that HPLC evidence cannot establish
`
`chiral purity (see Paper 20 at 42), Petitioner’s HPLC data establishes by a
`
`preponderance of the evidence that it can. Indeed, the evidence shows that no S-
`
`phenylephrine hydrochloride was detected in Lots 11578 and 11581, and that the
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`lots sold prior to the filing date were over 95% pure R-phenylephrine. See, e.g., Ex.
`
`1019. And because Patent Owner failed to provide affirmative test results to the
`
`
`
`
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`9
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`
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`contrary, it is more likely than not that Petitioner’s HPLC testing data is reliable
`
`and accurate.
`
`C. Optical Rotation Test
`
`In its attempt to discredit the optical rotation test results, Patent Owner
`
`ignores the corroborative evidence of record through Petitioner’s HPLC testing,
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`which, as discussed above, can and does distinguish between the two
`
`phenylephrine enantiomers. See supra at III.B.
`
`Patent Owner alleges two errors were introduced into the testing: (a) control
`
`sample purity and (b) a created ±6% margin of error both of which are addressed
`
`below.
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`Patent Owner first contends that the purity factor of 1.00, assigned in
`
`Petitioner’s Identification Study, is erroneous. See Ex. 1012 at 3. Patent Owner
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`alleges the optical purity of the control is “unknown” (see Paper 20 at 46) despite
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`its own evidence that Sigma-Aldrich represents that the product is ≥99% pure. See
`
`Ex. 2019.
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`Patent Owner ignores the warranty on the standard’s specification which
`
`states “Sigma-Aldrich warrants, that at the time of the quality release or subsequent
`
`retest date this product conformed to the information contained in this publication.”
`
`Id. Patent Owner instead misleads the Board by insinuating that the remaining
`
`<1% of the composition was S-form phenylephrine hydrochloride, thereby
`
`
`
`
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`10
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`
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`affecting the optical rotation test. Paper 20 at 44-45. Patent Owner fails to provide
`
`any evidence to support this position. Indeed, the only evidence of record – the
`
`corroborative HPLC reports summarized in Exhibit 1019 – shows that the optical
`
`purity of the Sigma-Aldrich product did not include any S-phenylephrine.
`
`Patent Owner’s allegation that Sigma-Aldrich cannot distinguish R-
`
`phenylephrine from S-phenylephrine is unsupported. There is no reason to suspect
`
`that the representations made by Sigma-Aldrich – a company in the business of
`
`selling chemicals to sophisticated consumers – are unreliable; nor does Patent
`
`Owner provide one. In fact, Patent Owner’s own expert testified that it is
`
`acceptable in the industry to presume pharmaceutical chemical companies provide
`
`reliable products. See Ex. 1034 42:19-43:9. Patent Owner’s expert further
`
`testified that he “initially assume[s]” products sold by a company are what the
`
`company represents the products to be. Ex. 1026 at 45:2-8 (“We buy a compound,
`
`we initially assume it’s okay, we run experiments. If something goes wrong, I tell
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`my students go take an NMR of this and make sure that what's in the bottle.”).
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`Thus, consistent with the opinion of Patent Owner’s expert, it is reasonable to
`
`conclude that Sigma-Aldrich is selling what it represents it is selling, and it is
`
`reasonable to thus assign it a purity factor of 1.00. See Ex. 1012 at 3.
`
`In addition, Exhibit 2037, relied on by Patent Owner, includes several
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`phenylephrine products that are distributed by Sigma-Aldrich including (R)-(–)-
`
`
`
`
`
`11
`
`
`
`
`
`Phenylephrine hydrochloride and (±)-Phenylephrine-d3 hydrochloride solution. Ex.
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`2037 at 1. Patent Owner’s arguments run counter to its own evidence that shows
`
`Sigma-Aldrich specifically sells both the R-phenylephrine and a mixture of R and
`
`S phenylephrine. In light of the evidence presented by Patent Owner, it is
`
`unreasonable to argue that Sigma-Aldrich is distributing products of “unknown”
`
`chiral purity; indeed, the only reasonable conclusion that can be reached is that
`
`Sigma-Aldrich must be able to distinguish R and S phenylephrine to sell the two
`
`different products.
`
`Furthermore, Patent Owner itself relied upon the optical rotation results,
`
`including the purity factor, in its submission to the FDA. Ex. 1003 ¶ 13. If Patent
`
`Owner believed the purity factor was unreliable, its submission to the FDA for the
`
`NDA is problematic. But more likely Patent Owner understood that the purity
`
`factor 1.00 was accurate and reliable. Indeed, the ’623 patent itself states:
`
`There are several chiral compound purification and
`analysis methods available besides chiral column
`chromatography. For example, it is known in the art
`chiral purity can be determined by optical rotation. In
`some embodiments, the chiral purity of R-phenylephrine
`hydrochloride in the stabilized compositions and methods
`thereof can be determined by comparison of optical
`rotation of pure R-phenylephrine hydrochloride.
`
`Ex. 1001 at 4:31-38 (emphasis added).
`
`12
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`
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`Despite the ’623 patent’s express acceptance of optical rotation tests as a
`
`method for determining chiral purity, Patent Owner’s expert alleges that the optical
`
`rotation test is incapable of determining a chiral purity greater than 95% because
`
`the method is only accurate to within ±6%. Paper 20 at 46. Patent Owner’s expert
`
`appears to contradict the intrinsic evidence of the ’623 patent. Further, Patent
`
`Owner’s expert’s error calculation finds no support in either the USP monograph
`
`or Petitioner’s Identification Study. Instead, the range of -42º to -47.5º was
`
`established by the USP, within which the phenylephrine HCl substance is found to
`
`be approximately 100% of the R form enantiomer. See, e.g., Ex. 1012 at 3 of 9.
`
`Patent Owner’s “error calculation” is not supported by any evidence. Patent
`
`Owner’s expert even admitted that “[he] is not an expert in that.” Ex. 1026 at
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`59:14-20. The HPLC data, moreover, demonstrates that the more likely scenario is
`
`that the samples tested and supporting the Petition were, as Mr. Sawaya testified,
`
`essentially 100%. See Ex. 1003 ¶ 37; see also Ex. 1003 ¶¶ 10, 11, 25, 28, Tables
`
`2-4.4
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`Further, as Mr. Sawaya testified, “[o]ne of ordinary skill in the art would
`
`
`4 Even applying the margin of error, which is unsupported and inapplicable, a
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`purity of 101.5%, would still meet the chirality limitation of greater than 95%
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`because 101.5%-6% is 95.5%.
`
`
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`
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`13
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`
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`
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`have been motivated to obtain an ophthalmic solution for pupil dilation from raw
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`material . . . comprising an essentially pure R-[phenylephrine].” See Response at
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`54 (citing Ex. 1003 at ¶ 47). In support of that statement, Mr. Sawaya testified that
`
`“[i]t had been known for decades that the R enantiomer of phenylephrine
`
`hydrochloride was active while the S enantiomer . . . was not.” See Ex. 1003 at ¶
`
`29 (citing U.S. Patent 3,966,749). Patent Owner fails to provide any factual
`
`evidence to rebut these statements; it simply states that Mr. Sawaya is not an expert.
`
`But as provided above, Mr. Sawaya is qualified as an expert. And, as noted by the
`
`Board, the absence of expert testimony is not fatal to an obviousness determination.
`
`Paper 14 at 14.
`
`In summary, Patent Owner has failed to show that Petitioner’s results
`
`supporting the Petition – including the optical rotation reports and HPLC reports –
`
`are unreliable. Patent Owner has also failed to address the obviousness of the
`
`challenged claims. The evidence therefore establishes, by at least a preponderance,
`
`that Petitioner’s products meet the chiral purity limitations of the challenged claims
`
`of the ’623 patent.
`
`D.
`
`Patent Owner Conjecture is Insufficient to Show that Petitioner’s
`Products Were Not Stored Between 2° and 8° Celsius
`
`In an attempt to repudiate Petitioner’s evidence that it stored samples of Lots
`
`11578 and 11581 for over 6 months at 2° C - 8° C, Patent Owner provides only
`
`attorney argument and hypothetical conjecture as to the storage conditions. Patent
`
`
`
`
`
`14
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`
`
`
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`Owner argues that alleged inconsistencies in certain statements render storage
`
`conditions “unknown.” This is not true.
`
`Mr. Sawaya testified that in 2013 Petitioner performed a study to assess the
`
`chiral purity of its products after low temperature (2° C to 8° C) storage (see Ex.
`
`1003 ¶ 5), and that Exhibit 1016 reflected a separate study to assess chiral purity of
`
`its products after room temperature storage (see id. at ¶ 24). These two facts are
`
`not inconsistent with each other. Petitioner’s products are made in batches,
`
`identified as lots. See Ex. 1003 ¶ 4. Lots are routinely subdivided into smaller
`
`samples for storage, testing, sale, etc. See, e.g., Ex. 1013 (showing order for
`
`26,568 vials of phenylephrine hydrochloride ophthalmic solution, USP 2.5% - 15
`
`mL). Far from “inconceivable,” Petitioner tested samples of the same lot after two
`
`separate storage conditions. Compare Ex. 1019 (summary of HPLC reports of
`
`“refrigerated” samples) with Ex. 1016 (summary of HPLC reports of room
`
`temperature samples); see also 1003 ¶¶ 38, 24. Indeed, comparing samples in this
`
`manner would provide for a control when comparing storage conditions. See, e.g.,
`
`Ex. 1003 ¶¶ 27, 28.
`
`Mr. Sawaya provided direct testimony concerning the storage limitations
`
`recited in the challenged claims. Patent Owner indicated that it doubted whether
`
`Mr. Sawaya’s testimony on that subject was reliable. See Paper 14 at 14-15. It is
`
`surprising therefore that Patent Owner chose not to ask any questions regarding the
`
`
`
`
`
`15
`
`
`
`
`
`storage conditions during cross-examination of Mr. Sawaya. See Ex. 2034. Indeed,
`
`the Board advised Patent Owner to engage in such questioning if it wished to
`
`challenge the facts of Mr. Sawaya’s testimony regarding storage conditions. See
`
`Paper 14 at 15. As such, Mr. Sawaya’s testimony stands unchallenged as
`
`establishing that Petitioner stored the product between 2° C and 8° C for at least
`
`six months. See Ex. 1003 ¶ 10.
`
`Furthermore, it would have been obvious to store Petitioner’s products
`
`between 2° C and 8° C; the label itself on the product instructs one to do exactly
`
`that. See Petition at 8; see also Exs. 1006 at 3 and 1008 at 3. It is not as though
`
`the label instructs one to store between 2° - 8° C after opening; it simply reads
`
`“[s]tore in a refrigerator at 2°-8° C.” See, e.g., Ex. 1008 at 3; see also Ex. 2015 at
`
`19 (alleging that Altaire notified Paragon that Altaire did not have refrigeration
`
`space for storage of phenylephrine). This evidence corroborates Mr. Sawaya’s
`
`testimony that the compositions were stored at the same temperature directed by
`
`the labels.
`
`Thus, Patent Owner has failed to provide any evidence to doubt the
`
`credibility of Mr. Sawaya’s testimony. Nor has Patent Owner attempted to
`
`challenge the obviousness of storing the material at the instructed temperature.
`
`
`
`
`
`16
`
`
`
`
`
`IV. THE PETITION CORRECTLY IDENTIFES THE REAL PARTY-IN-
`INTEREST
`
`A.
`
`The Real Party-In-Interest Argument Is An Unauthorized Motion
`to Terminate
`
`The real party-in-interest issue is not procedurally before the Board. Patent
`
`Owner has not requested, nor has the Board authorized, leave to file a motion to
`
`terminate this proceeding. Furthermore, the real party-in-interest issue is beyond
`
`the scope of a proper Response. A patent owner’s response is limited to
`
`“addressing any ground for unpatentability not already denied.” 37 C.F.R. §
`
`42.220(a). Obviously, the real party-in-issue does not relate in any manner to any
`
`ground for unpatentability. For this reason alone, the argument should be ignored.
`
`Moreover, Patent Owner’s real party-in-interest arguments seek to prevent
`
`the Board from controlling this proceeding. While the Institution Decision
`
`permitted Patent Owner to cross-examine Mr. Sawaya regarding his real party-in-
`
`interest declaration (see Paper 14 at n.3), it did not grant leave to file a motion to
`
`terminate or to address the argument in its response. Nor does the Scheduling
`
`Order. See Paper 15. Procedurally, Patent Owner should have sought leave from
`
`the Board to file a motion to terminate, allowing the Board to determine whether
`
`the issue should be briefed, and setting forth a briefing schedule and page
`
`
`
`
`
`17
`
`
`
`
`
`allocation.5
`
`Patent Owner should not be permitted to wrest control of this proceeding,
`
`and prejudice Petitioner by forcing it to address the issue in the already limited
`
`space of a Reply. For these reasons, Patent Owner’s real party-in-interest
`
`arguments should be ignored.
`
`In addition, to support its arguments, Patent Owner mischaracterizes the
`
`dispute between the parties to fit its narrative that the “Sawayas” and Sawaya
`
`Aquebogue are allegedly real parties-in-interest. However, the facts – not attorney
`
`argument – show that the concurrent litigation was filed by Petitioner (Altaire)
`
`against Patent Owner (Paragon). See Ex. 2015. Petitioner’s complaint alleges a
`
`breach of confidentiality against Patent Owner for disclosing Petitioner’s
`
`confidential formulation (see, e.g., Example 1 of the ’623 patent) after Petitioner
`
`explicitly refused Patent Owner’s request to disclose the formulation in support of
`
`a patent application (eventually leading to the ’623 patent). See Ex. 2015 at 7 et
`
`seq.
`
`According to Patent Owner, the ’623 patent covers its products (see Ex.
`
`2015 at 16-17; see also Ex. 1035), which are supplied by Petitioner – not Sawaya
`
`
`5 Patent Owner has, in effect, given itself permission to provide a 30-page motion
`
`to terminate without the Board’s consent.
`
`
`
`
`
`18
`
`
`
`
`
`Aquebogue. See Ex. 2001. Patent Owner, therefore, will likely contend that
`
`Petitioner’s products – the very products that were sold and distributed prior to the
`
`effective filing date – are covered by the ’623 patent. Once the agreement expires
`
`in 2021 (see Ex. 2001, Ex. A, Page 1), Petitioner – not Sawaya Aquebogue – will
`
`be under threat of an infringement action by Patent Owner.
`
`Moreover, as a direct result of Patent Owner’s listing the ’623 patent in the
`
`FDA’s Orange Book, any ANDA application filed by Petitioner – not Sawaya
`
`Aquebogue – may lead to an infringement action and a possible 30-month stay of
`
`Petitioner’s ability to sell its products. See Ex. 2015 at 16. Unlike Petitioner,
`
`Sawaya Aquebogue is a holding company – it is not in the business of
`
`pharmaceutical research, development, manufacturing, supply and distribution like
`
`Petitioner. See Paper 10 at 5. Indeed, the Agreement between Petitioner and
`
`Patent Owner states that it was “by and between ALTAIRE PHAMACEUTICALS,
`
`INC. … and PARAGON BIOTECK, INC.”; Sawaya Aquebogue is not listed as a
`
`party to the Agreement. See Ex. 2001 at Ex. A, p. 1. The Agreement is clear, but
`
`Patent Owner now tries to muddy the water, without any evidence, by essentially
`
`alleging that Patent Owner itself entered into an Agreement with both Petitioner
`
`and Sawaya Aquebogue contrary to the direct language of the Agreement and the
`
`positions it has previously taken. See, e.g., Ex. 1023 (conceding that Sawaya
`
`Aquebogue was a third party beneficiary to the Agreement). Out of an abundance
`
`
`
`
`
`19
`
`
`
`
`
`of caution Petitioner responds to Patent Owner’s allegations, even though there is
`
`no motion to terminate.
`
`
`
`B.
`
`The Sawayas are Not Real Parties-In-Interest
`
`Petitioner respectfully submits that the Petition correctly identified the real
`
`party-in-interest and complied with 35 U.S.C. § 315(b). The Sawayas as
`
`individuals are not real parties-in-interest to this proceeding.
`
`Patent Owner has not demonstrated that the Sawayas—two different people,
`
`in their individual capacities, have an interest in or an ability to control this post
`
`grant review. Indeed, as Mr. Sawaya previously testified, “Altaire alone funded
`
`and sought review of the ’623 patent. Altaire alone intends to solely control the
`
`review proceeding without input from Saw[aya] Aque[bogu
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