IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`___________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________
`
`COALITION FOR AFFORDABLE DRUGS V LLC,
`Petitioner,
`
`v.
`
`BIOGEN INTERNATIONAL GmbH,
`Patent Owner.
`____________________________________________
`
`Case IPR2015-01086 (Patent 8,759,393 B2)
`Case IPR2015-01136 (Patent 8,399,514 B2)1
`____________________________________________
`
`
`
`REPLY IN SUPPORT OF MOTION FOR DISCOVERY
`
`
`1 The word-for-word identical paper is filed in each proceeding identified in the
`caption.
`
`
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`i
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`IPR2015-01136 (Patent 8,399,514 B2)
`
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`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`___________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________
`
`COALITION FOR AFFORDABLE DRUGS V LLC,
`Petitioner,
`
`v.
`
`BIOGEN INTERNATIONAL GmbH,
`Patent Owner.
`____________________________________________
`
`Case IPR2015-01086 (Patent 8,759,393 B2)
`Case IPR2015-01136 (Patent 8,399,514 B2)1
`____________________________________________
`
`
`
`REPLY IN SUPPORT OF MOTION FOR DISCOVERY
`
`
`1 The word-for-word identical paper is filed in each proceeding identified in the
`caption.
`
`
`
`i
`
`
`
`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`Table of Contents
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`Biogen’s Request Is in the Interest of Justice .................................................. 1
`
`I.
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`A.
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`B.
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`Petitioner Does Not Dispute Garmin Factors Two Through Five ........ 1
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`The Requested Documents Are Useful ................................................. 1
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`1.
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`2.
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`3.
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`Taking Short Positions Is the Primary Purpose of the
`IPRs ............................................................................................. 1
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`It Is Irrelevant Whether Short Positions Are Legal .................... 3
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`Biogen’s Evidence Is Not Speculative ........................................ 3
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`II.
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`Biogen’s Request Is Timely ............................................................................ 4
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`III. The Board Has Authority to Grant Biogen’s Motion for Discovery ............... 5
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`IV. Conclusion ....................................................................................................... 5
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`ii
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`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`Table of Authorities
`
`
`Cases
`Iron Dome LLC v. Chinook Licensing DE LLC,
`IPR2014-00674, Paper 9 (Sept. 10, 2014) ............................................................ 5
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`Page(s)
`
`Lader v. Benkowitz,
`66 N.Y.S.2d 713 (Sup. Ct. 1946) .......................................................................... 3
`
`Federal Regulations
`
`37 C.F.R. § 42.2 ......................................................................................................... 4
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`37 C.F.R. § 42.6 ......................................................................................................... 1
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`37 C.F.R. § 42.12 ................................................................................................... 4, 5
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`37 C.F.R. § 42.24 ....................................................................................................... 1
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`37 C.F.R. § 42.51 ....................................................................................................... 5
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`37 C.F.R. § 42.71 ....................................................................................................... 5
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`Other Authorities
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`Restatement (Second) of Torts § 682 (1977) ......................................................... 2, 3
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`iii
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`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`On July 7, 2015, the Board authorized Biogen to file a reply to Petitioner’s
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`opposition to Biogen’s motion for additional discovery.
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`As an initial matter, the Opposition should be expunged or returned for
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`improperly single spacing footnotes and block-quoted text. 37 C.F.R. § 42.6.
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`Properly formatted, the brief would exceed the 15-page limit. 37 C.F.R. § 42.24.
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`Moreover, Petitioner’s assertions in defense of its short-selling strategy provide no
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`basis to deny production of two readily accessible documents.
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`I.
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`Biogen’s Request Is in the Interest of Justice
`A.
`Petitioner does not dispute that Biogen’s request meets the requirements of
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`Petitioner Does Not Dispute Garmin Factors Two Through Five
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`Garmin factors two through five. Thus, it is undisputed that the request does not
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`seek litigation positions, is clear, is not overly burdensome, and seeks information
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`Biogen cannot obtain by other means. Nor does Petitioner dispute that the
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`requested documents exist and would be easy to obtain. These factors weigh
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`strongly in favor of granting Biogen’s request.
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`B.
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`Taking Short Positions Is the Primary Purpose of the IPRs
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`The Requested Documents Are Useful
`1.
`Petitioner argues
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`that
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`taking short positions against pharmaceutical
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`companies is not a per se abuse of process because it is not the primary purpose of
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`the IPR petitions. (Opp’n at 4-9.) According to Petitioner, because it stands by the
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`merits of the petitions and allegedly will not settle, no abuse of process can occur.
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`1
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`
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`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`But because real parties-in-interest are primarily using the IPR process to seek to
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`depress stock prices and benefit through short sales of that stock, it is immaterial
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`whether a proper secondary purpose exists. Restatement (Second) of Torts § 682
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`(1977) (Ex. 2004). Although Petitioner claims to be concerned about the cost of
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`Tecfidera® and patent quality, the stated primary purpose of the hedge funds
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`financing these petitions is to take short positions against pharmaceutical
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`companies. (Ex. 2001 at 5.) Petitioner, which “admits . . . an economic interest,”
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`does not dispute that taking short positions is a primary purpose of the hedge
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`funds. (Opp’n at 11.) Investors contributing millions of dollars to these funds are
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`doing so to turn a profit, not for any altruistic purposes or the betterment of the
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`patent system. (See Ex. 2001 at 6-7.) Because the hedge funds are financing the
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`IPRs, the petitions must be connected with their primary purpose. (See id. at 5.)
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`Petitioner does not assert otherwise. Petitioner’s stated unwillingness to settle does
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`not show any proper purpose, but is consistent with the hedge funds’ primary
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`purpose of short selling.
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`Filing IPRs against pharmaceutical companies and taking short positions
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`against those companies is more than having an “economic interest.” (See Opp’n at
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`7.) It also differs from generic drug companies trying to enter the market with a
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`product. Petitioner has no product to market. Biogen has presented a threshold
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`amount of evidence and reasoning showing that the requested documents will be
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`
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`2
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`
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`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`substantively favorable to an abuse of process contention. (See Mot. at 1-6.) And
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`while the Board has not yet interpreted the full breadth of an improper use of IPR
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`proceedings, using those proceedings to drive down a patent owner’s stock such
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`that a petitioner may profit from taking short positions is certainly not a proper or
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`intended use of the proceedings. Petitioner cites no evidence to the contrary.
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`It Is Irrelevant Whether Short Positions Are Legal
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`2.
`Petitioner stresses the legality and purported benefit of short sales to the
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`economy. (See Opp’n at 2, 8.) But an abuse of process does not require the primary
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`purpose to be illegal, only that it is outside of the legitimate scope of the process.
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`See Restatement § 682 (Ex. 2004). Because the primary purpose of the IPRs is
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`connected to short selling, they are not being used to effect their proper function.
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`Lader v. Benkowitz, 66 N.Y.S.2d 713, 715 (Sup. Ct. 1946) (Ex. 2006).
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`3.
`Biogen’s Evidence Is Not Speculative
`The first Garmin factor only requires Biogen to possess a threshold amount
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`of evidence or reasoning tending to show that something useful will be uncovered.
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`Petitioner has not disputed that the primary purpose of real parties-in-interest
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`Hayman Credes Master Fund, L.P. and Hayman Orange Fund SPC-Portfolio A is
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`to generate superior
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`risk-adjusted
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`returns
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`through short positions with
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`pharmaceutical companies; that the investment mandates are in the requested
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`offering documents; that the funds were created contemporaneously with these IPR
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`
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`3
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`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`petitions; or that the funds are financing the IPR petitions. (See Mot. at 1-6; see
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`also Ex. 2001 at 4-5.) In addition, Petitioner confirms that a short seller is one who
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`speculates on a downward movement in securities, hoping to profit by hedging
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`against a loss. (Opp’n at 2 n.1.) Petitioner does not deny that the offering
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`documents contain more detailed information about the investment mandates and
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`short positions, which could be valuable to support an abuse of process claim.
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`Biogen has therefore presented ample evidence and reasoning showing that
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`the offering documents will have useful information detailing the short positions of
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`the hedge funds and how the IPR petitions financed by these funds are being used
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`in connection with these short positions. Biogen has also established that this
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`information is substantively favorable to an abuse of process claim. Granting this
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`document request is therefore in the interests of justice.
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`II. Biogen’s Request Is Timely
`Petitioner contends that an abuse of process claim does not apply to a
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`preliminary proceeding. (Opp’n at 12-14.) But a discovery request has no such
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`limits, and Petitioner does not contend otherwise. Accordingly, Biogen’s discovery
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`request is timely. Moreover, Petitioner’s argument ignores the plain language of 37
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`C.F.R. § 42.12, which provides that the Board may impose sanctions for, inter alia,
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`failure to comply with an applicable rule or order in the proceeding or any other
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`improper use of the proceeding. A proceeding is defined in 37 C.F.R. § 42.2 as a
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`4
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`IPR2015-01086 (Patent 8,759,393 B2)
`IPR2015-01136 (Patent 8,399,514 B2)
`trial or a preliminary proceeding. Sanctions also include dismissal of the petition.
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`37 C.F.R. § 42.12(b)(8). Section 42.12 is therefore not limited to trial proceedings.
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`Petitioner’s reliance on Iron Dome LLC v. Chinook Licensing DE LLC is
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`misplaced as no misconduct was cited in that case. IPR2014-00674, Paper 9 (Sept.
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`10, 2014). Here, Biogen has shown that the requested discovery is useful to a
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`contention of abuse of process or improper use of the proceeding.
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`III. The Board Has Authority to Grant Biogen’s Motion for Discovery
`Petitioner argues that granting Biogen’s motion would exceed the Board’s
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`authority. (Opp’n at 15.) This is incorrect. Under the rules, the Board has the
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`authority to grant, deny, or dismiss any motion, to enter any appropriate order, to
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`grant motions for discovery, and to specify conditions for additional discovery. 37
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`C.F.R. §§ 42.51(b)(2), 42.71(a). Granting Biogen’s motion for discovery is
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`therefore fully within the Board’s authority.
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`IV. Conclusion
`For these reasons, Biogen respectfully requests that the Board direct
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`Petitioner to produce the two requested documents.
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`Dated: July 9, 2015
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`Respectfully submitted,
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`By: /Michael J. Flibbert/
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`Michael J. Flibbert, Reg. No. 33,234
`Maureen D. Queler, Reg. No. 61,879
`Counsel for Patent Owner
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`5
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`IPR2015—01086 (Patent 8,759,393 B2)
`IPR2015—01136 (Patent 8,399,514 B2)
`
`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing REPLY IN
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`SUPPORT OF MOTION FOR DISCOVERY was served electronically via e-
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`mail on July 9, 2015, in its entirety on the following:
`
`Robert W. Hahl
`
`Neifeld IP Law, PC, 4813—B
`Eisenhower Avenue, Alexandria, VA 22304
`rhah1@neifeld.com
`
`Robert Mihail
`
`Neifeld IP Law, PC, 4813-B
`Eisenhower Avenue, Alexandria, VA 22304
`rrnihail@neifeld.com
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`Petitioner has agreed to electronic service.
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`
`
`By:
` auren K. Yougn
`
`Legal Assistan
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`Dated: July 9, 2015
`
`FINNEGAN, HENDERSON, FARABOW,
`
`GARRETT & DUNNER, LLP
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