`Filed on behalf of: Celgene Corporation
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`Filed: December 11, 2018
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________________
`
`DR. REDDY’S LABORATORIES, INC.,
`Petitioner
`
`v.
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`CELGENE CORPORATION,
`Patent Owner
`_______________________
`
`Case IPR2018-01509
`U.S. Patent No. 7,189,740
`_______________________
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`PATENT OWNER PRELIMINARY RESPONSE
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`IPR2018-01509
`U.S. Patent No. 7,189,740
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`TABLE OF CONTENTS
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`B.
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`TABLE OF CONTENTS ........................................................................................ i
`TABLE OF AUTHORITIES ................................................................................ iv
`TABLE OF ABBREVIATIONS ........................................................................ viii
`LIST OF EXHIBITS .............................................................................................. ix
`I.
`INTRODUCTION ........................................................................................ 1
`II.
`THE BOARD SHOULD DENY THE PETITION UNDER 35
`U.S.C. § 314(a) BECAUSE INSTITUTION WOULD RESULT IN
`AN INEFFICIENT USE OF BOARD RESOURCES ............................... 7
`A.
`The Timing of the Petition and the Advanced Nature of the
`Corresponding District Court Litigation Render Institution
`Inefficient ............................................................................................. 7
`Institution Would Upset the Careful Balance Struck by the
`Hatch-Waxman Act .............................................................................. 9
`III. THE BOARD SHOULD DENY THE PETITION UNDER 35
`U.S.C. § 314(a) BECAUSE IT LACKS THE REQUIRED
`SPECIFICITY ............................................................................................. 12
`IV. THE BOARD SHOULD DENY THE PETITION UNDER 35
`U.S.C. § 325(d) BECAUSE IT PRESENTS SUBSTANTIALLY
`THE SAME ART AND ARGUMENTS PREVIOUSLY
`CONSIDERED BY THE OFFICE ........................................................... 15
`A.
`The ’740 Patent Prosecution History ................................................. 17
`B.
`The ’717 Patent Prosecution History ................................................. 19
`C.
`The ’120 Patent Prosecution History ................................................. 21
`D.
`Petitioner Relies on Cumulative Art and Repeats the Same
`Arguments Already Overcome During Prosecution .......................... 22
`SCOPE AND CONTENT OF THE ASSERTED REFERENCES ........ 25
`A.
`List 2001 ............................................................................................. 26
`B.
`Thomas 2000a .................................................................................... 27
`C.
`The ’230 Patent .................................................................................. 29
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`V.
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`i
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`D.
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`2.
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`3.
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`Celgene Press Release 5/8/2001 and Celgene Press Release
`8/28/2001 ............................................................................................ 29
`VI. LEVEL OF ORDINARY SKILL IN THE ART ..................................... 31
`VII. CLAIM CONSTRUCTION ....................................................................... 32
`VIII. STATE OF THE ART ................................................................................ 32
`A.
`TNF-α Was Not a Known or Effective Target for Treating
`MDS ................................................................................................... 33
`1.
`The Art Shows Significant Uncertainty Regarding the
`Pathology of MDS and the Appropriate Target for
`Treatment ................................................................................. 34
`TNF-α Inhibitors Did Not Work in Treating MDS ................. 37
`2.
`Lenalidomide Was Not Known as the “Next Generation”
`Thalidomide ........................................................................................ 38
`1.
`Thalidomide and Lenalidomide are Distinct Compounds
`with Different Structures .......................................................... 39
`The Art Disclosed Different Categories of Thalidomide
`Analogs, Including IMiDs and SelCIDs, and, if
`Anything, Would Have Led a POSA to Use a SelCID to
`Treat MDS ................................................................................ 42
`The Compound Now Known as Lenalidomide Was One
`of the Least Potent TNF-α Inhibitors ....................................... 43
`Even Accepting Petitioner’s Arguments as True, the Art Taught
`Away From the Claimed Inventions Because What Petitioner
`Contends Were Known to Be IMiDs Caused Cytopenias, the
`Primary Symptoms that Manifest in MDS Patients ........................... 45
`1.
`Thalidomide Did Not Cause Cytopenias ................................. 46
`2.
`CC-5013 Was Known to Cause Cytopenias ............................ 47
`IX. PETITIONER DOES NOT DEMONSTRATE A REASONABLE
`LIKELIHOOD THAT CLAIMS 1–6, 11–12, OR 14–34 WOULD
`HAVE BEEN OBVIOUS IN VIEW OF PETITIONER’S TWO
`ASSERTED GROUNDS ............................................................................ 48
`A.
`Petitioner’s Hindsight-Driven Approach Does Not Fill in the
`Missing Gaps in the Prior Art and Ignores the State of the Art ......... 49
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`B.
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`C.
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`ii
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`B.
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`C.
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`2.
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`3.
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`U.S. Patent No. 7,189,740
`Neither List 2001 Nor Thomas 2000a Teaches or Suggests the
`Treatment of MDS with Lenalidomide .............................................. 50
`Neither the ’230 Patent Nor the Alleged Press Releases Cure
`the Shortfalls of List 2001 or Thomas 2000a ..................................... 51
`D. A POSA Would Not Have Had Any Motivation to Treat MDS
`with the Compound Now Known as Lenalidomide, or Any
`Reasonable Expectation of Success ................................................... 52
`1.
`A POSA Would Not Have Had Any Motivation to
`Combine List 2001 or Thomas 2000a with the Cited
`Secondary References .............................................................. 52
`A POSA Would Have Had No Expectation of Success in
`Treating MDS with What is Now Known as
`Lenalidomide ........................................................................... 54
`The Art Taught Away From the Use of Thalidomide
`Analogs for Treating MDS Because They Caused the
`Main Symptoms of MDS ......................................................... 55
`The Dependent Claims are Patentable Over Grounds 1 and 2 for
`the Same Reasons as Claim 1 ............................................................. 56
`SECONDARY CONSIDERATIONS SUPPORT
`NONOBVIOUSNESS ................................................................................. 56
`A. Unexpected Results ............................................................................ 56
`B.
`Long-Felt But Unresolved Need ........................................................ 58
`XI. CONCLUSION ........................................................................................... 59
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`E.
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`X.
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`iii
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`TABLE OF AUTHORITIES
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`Page
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`CASES
`
`Abbott Labs. v. Young,
`920 F.2d 984 (D.C. Cir. 1990) .............................................................................. 9
`
`Apotex Inc. v. Celgene Corp.,
`IPR2018-00685, Paper 8 (PTAB Sept. 27, 2018) ............................................... 30
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`Applications in Internet Time, LLC v. RPX Corp.,
`897 F.3d 1336 (Fed. Cir. 2018) .......................................................................... 11
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`Ariosa Diagnostics v. Verinata Health, Inc.,
`IPR2013-00276, Paper 43 (PTAB Oct. 23, 2014) .............................................. 13
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`Becton, Dickinson & Co. v. B. Braun Melsungen AG,
`IPR2017-01586, Paper 8 (PTAB Dec. 15, 2017) ......................................... 15, 17
`
`Belden Inc. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) .......................................................................... 52
`
`Boston Sci. Corp. v. Johnson & Johnson,
`647 F.3d 1353 (Fed. Cir. 2011) .................................................................... 40, 53
`
`Coal. for Affordable Drugs VI LLC v. Celgene Corp.,
`IPR2015-01169, Paper 22 (PTAB Nov. 16, 2015) ....................................... 41, 53
`
`Comcast Cable Commc’ns, LLC v. Veveo, Inc.,
`IPR2017-00932, Paper 10 (PTAB Sept. 7, 2017) ............................................... 31
`
`DeSilva v. DiLeonardi,
`181 F.3d 865 (Fed. Cir. 1999) ............................................................................ 13
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`Dynamic Drinkware, LLC v. Nat’l Graphics, Inc.,
`800 F.3d 1375 (Fed. Cir. 2015) .......................................................................... 29
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`iv
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`Eisai Co. Ltd. v. Dr. Reddy’s Labs., Ltd.,
`533 F.3d 1353 (Fed. Cir. 2008) .............................................................. 39, 41, 53
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`Ford Motor Co. v. Versata Dev. Grp.,
`IPR2016-01019, Paper 9 (PTAB Oct. 4, 2016) .................................................. 30
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`Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha,
`IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) ................................................. 9
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`Glastetter v. Novartis Pharm. Corp.,
`252 F.3d 986 (8th Cir. 2001) .............................................................................. 40
`
`Heckler v. Chaney,
`470 U.S. 821 (1985) ............................................................................................ 14
`
`In re Cyclobenzaprine Hydrochloride Extended-Release Capsule
`Patent Litig.,
`676 F.3d 1063 (Fed. Cir. 2012) .......................................................................... 52
`
`In re Magnum Oil Tools Int’l, Ltd.,
`829 F.3d 1364 (Fed. Cir. 2016) .......................................................................... 31
`
`In re Soni,
`54 F.3d 746 (Fed. Cir. 1995) .............................................................................. 57
`
`Kayak Software Corp. v. Int’l Bus. Machs. Corp.,
`CBM2016-00075, Paper 16 (PTAB Dec. 15, 2016) ........................................... 15
`
`Leo Pham. Prods., Ltd. v. Rea,
`726 F.3d 1346 (Fed. Cir. 2013) .................................................................... 56, 58
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`Moses Lake Indus., Inc. v. Enthone, Inc.,
`IPR2014-00243, Paper 6 (PTAB June 18, 2014) ............................................... 41
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`NHK Spring Co. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ............................................. 7, 9
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`
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`v
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`U.S. Patent No. 7,189,740
`Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC,
`138 S. Ct. 1365 (2018) .......................................................................................... 7
`
`Par Pharm., Inc. v. Novartis AG,
`IPR2016-00084, Paper 73 (PTAB Jan. 11, 2018) .............................................. 40
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`Pfizer Inc. v. Teva Pharm. U.S.A., Inc.,
`882 F. Supp. 2d 643 (D. Del. 2012) .............................................................. 40, 53
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`Schumer v. Lab. Comput. Sys., Inc.,
`308 F.3d 1304 (Fed. Cir. 2002) .......................................................................... 14
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`Shire LLC v. Amneal Pharm., LLC,
`802 F.3d 1301 (Fed. Cir. 2015) .................................................................... 49, 52
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`Stampa v. Jackson,
`78 USPQ2d 1567 (BPAI 2005) .......................................................................... 14
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`Zetec, Inc. v. Westinghouse Elec. Co., LLC,
`IPR2014-00384, Paper 10 (PTAB July 23, 2014) .............................................. 14
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`STATUTES
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`35 U.S.C. § 312(a) ................................................................................................... 11
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`35 U.S.C. § 312(a)(3) ............................................................................................... 12
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`35 U.S.C. § 314(a) ......................................................................................... 7, 12, 14
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`35 U.S.C. § 315(b) ..................................................................................................... 8
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`35 U.S.C. § 325(d) ....................................................................................... 15, 17, 25
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`REGULATIONS AND OTHER AUTHORITIES
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`37 C.F.R. § 42.65(a) ........................................................................................... 24, 31
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`37 C.F.R. § 42.104(b)(4) .......................................................................................... 12
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`37 C.F.R. § 42.108(b) .............................................................................................. 14
`vi
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`U.S. Patent No. 7,189,740
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759
`(Aug. 14, 2012) (to be codified at 37 C.F.R. pt. 42) .......................................... 12
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`TABLE OF ABBREVIATIONS
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`Myelodysplastic Syndrome
`MDS
`Multiple Myeloma
`MM
`Patent Owner or Celgene Celgene Corporation
`Petition or Pet.
`IPR2018-01509 Petition for Inter Partes Review
`Petitioner
`Dr. Reddy’s Laboratories, Inc.
`POSA
`Person of Ordinary Skill in the Art
`TDA
`Transfusion Dependent Anemia
`TGF-β
`Transforming Growth Factor-Beta
`TNF-α
`Tumor Necrosis Factor-Alpha
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`viii
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`IPR2018—01509
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`US. Patent No. 7,189,740
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`LIST OF EXHIBITS
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`_ 2
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`Hematology 2001: American Society of Hematology Education Program
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`001
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`2002
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`2003
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`2004
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`2005
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`2006
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`2007
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`2008
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`2009
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`2010
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`2011
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`2012
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`2013
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`2014
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`Book, December 7—1 1, 2001, containin_ List 2001.
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`Excerpt from File History of US. Patent No. 7,189,740 (Declaration by
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`Jerome B. Zeldis, M.D., Ph.D., Under 37 CPR. § 1.131 dated June 22,
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`2006 .
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`Excerpt from File History of US. Patent No. 7,189,740 (IDS showing the
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`’230 atent disclosed and considered .
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`Excerpt from File History ofUS. Patent No. 7,189,740 (Office Action dated
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`11/3/2005 .
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`WO 01/87307 “Zeldis” .
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`
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`Pellegrino Musto et al., “Thalidomide Abolishes Transfusion-Dependence
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`in Selected Patients with Myelodysplastic Syndromes,” Haematologica
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`2002 87 8 :884—886 “Pelle y ino” .
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`Excerpt from File History ofUS. Patent No. 8,404,717 (Office Action dated
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`5/9/2012 .
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`Excerpt from File History of US. Patent No. 8,404,717 (Patent Owner’s
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`Res onse to Office Action dated 9/10/2012 .
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`Excerpt from File History of US. Patent No. 8,404,717 (Notice of
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`Allowance dated 1/ 17/2013 .
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`Excerpt from File History ofUS. Patent No. 9,056,120 (Office Action dated
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`4/29/2014 .
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`Excerpt from File History of US. Patent No. 9,056,120 (Response to Office
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`Action dated 10/28/2014 .
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`Raza, A., “Anti-TNF Therapies in Rheumatoid Arthritis, Crohn’s Diseases,
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`Sepsis, and Myelodysplastic Syndromes,” Microscopy Research and
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`Techni a ue 2002 50:229—235.
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`ix
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`IPR2018—01509
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`US. Patent No. 7,189,740
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`_ 2
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`015 Gupta, P. et al., “Fas Ligand Expression in the Bone Marrow in
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`Myelodysplastic Syndromes Correlates with FAB Subtype and Anemia, and
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`Predicts Survival,” Leukemia 1999 13:44—53.
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`2016 Bincoletto, C. et al., “Autonomous Proliferation and bcl-2 Expression
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`Involving Hematopoietic Cells
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`in Patients with Myelodysplastic
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`S
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`drome,” British Journal 0 Cancer 1998 78 5 :621—624.
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`2017 Cortelezzi, A. et al., “Non-Transferrin—Bound Iron in Myelodysplastic
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`Syndromes: A Marker of Ineffective Erythropoiesis?,” Hematology Journal
`2000 1:153—158.
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`2018
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`Zang, D.Y. et al., “Expression of Tumor Necrosis Factor-Related
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`Apoptosis-Inducing Ligand, Ap02L, and its Receptors in Myelodysplastic
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`Syndrome: Effects on In Vitro Hemopoiesis,” Blood (2001) 98(10):3058—
`3065.
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`2019 Rosenfeld, C. & List, A-, “A Hypothesis for
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`the Pathogenesis of
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`Myelodysplastic Syndromes:
`2000 14:2 8
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`Implications for New Therapies,” Leukemia
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`2020
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`Excerpt from File History ofUS. Patent No. 7,189,740 (Office Action dated
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`3/30/2006 .
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`
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`2021
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`Zorat, F. et al., “The Clinical and Biological Effects of Thalidomide in
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`Patients with Myelodysplastic Syndromes,” British Journal ofHaematology
`2001 115:881—894 “Zorat” .
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`2022
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`Excerpt from File History of US. Patent No. 7,189,740 (Response to Office
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`Action dated 6/23/2006 .
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`2023
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`Singhal, S. et al., “Antitumor Activity of Thalidomide in Refractory
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`Multiple Myeloma,” The New England Journal of Medicine (1999)
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`341 21 :1565—1571.
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`2024 Dimopoulos, MA. et al., “Thalidomide and Dexamethasone Combination
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`for Refractory Multiple Myeloma,” Annals ofOncology (2001) 12:991—995.
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`2025 Rosenfeld, C .S. et al., “Pilot Study of Recombinant Human Soluble Tumor
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`Necrosis Factor Receptor
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`(TNFR:Fc)
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`in Patients with Low Risk
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`M elod slastic S
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`drome,” Leukemia Research 2002 26:721—724.
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`2026 US. Patent No. 5,635,517 “the ’517oatent” .
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`2027 Merriam—Webster’s Medical Desk Dictiona
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`459 1993 .
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`_ 2
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`List, A. et a]. , “Erythropoietic Remitting Activity of the Immunomodulatory
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`028
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`2029
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`2030
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`2031
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`2032
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`2033
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`Thalidomide Analog CC5013 (RevimidTM) in Patients with Myelodysplastic
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`Syndrome (MDS): Results of a Phase I/II Trial,” Cancer Investigation:
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`Chemotherapy Foundation Symposium 2% (2004) 22(Supp.1):15—16,
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`Abstract #9.
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`
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`List, A. et al., “Efficacy of Lenalidomide in Myelodysplastic Syndromes,”
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`The New Enland Journal 0 Medicine 2005 352 6 : 549—557.
`
`S. 974, 115th Con. 2018
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`“The Hatch-Waxman Inte i Act of 2018” .
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`Stedman’s Medical Dictiona
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`73—74, 455, 1215, 1831 27th ed. 2000 .
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`Barlogie, B- et a]. , “Thalidomide in the Management ofMultiple Myeloma,”
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`Seminars in Hematolo
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`2001 38 3 :250—259-
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`Oxford Dictionary of Biochemistry and Molecular Biology (Revised ed-
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`2000 definition of ICso .
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`I.
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`INTRODUCTION
`The Petition submitted by Petitioner1 seeking inter partes review (“IPR”) of
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`claims 1–6, 11–12, and 14–34 of Celgene’s U.S. Patent No. 7,189,740 (“the ’740
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`patent”) should be denied. Petitioner engages in a tortured, hindsight-driven attempt
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`to cobble together a multitude of references to form an obviousness challenge using
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`the ’740 patent claims as a roadmap. For that reason alone, institution should be
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`denied. The Petition, however, also presents multiple procedural and threshold flaws,
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`each of which independently warrants denial, and collectively all the more so.
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`First, the Petition should be denied because institution would be an inefficient
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`use of Board resources. Petitioner waited to file its petition until the eve of its one-
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`year statutory deadline. Although the America Invents Act (“AIA”) permits parties
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`to petition for IPR challenging the validity of patent claims up to one year after being
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`served with a civil action, where, as here, the civil action has substantially
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`progressed, the Board is within its discretion in denying the Petition. Because the
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`civil action is likely to proceed to trial by the time this proceeding would conclude
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`1 The petition identifies both Dr. Reddy’s Laboratories, Inc. and Dr. Reddy’s
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`Laboratories, Ltd. as real parties-in-interest. (Pet. at 62.)
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`if instituted, instituting trial here does not foster efficiency, a principal consideration
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`in IPRs.
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`Moreover, Petitioner’s dual efforts to challenge the ’740 patent claims here
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`and in district court are contrary to another aspect of the patent system, the Hatch-
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`Waxman Act. That Act, with its carefully-crafted provisions for civil actions that
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`balance innovation and competition, does not contemplate proceedings such as IPR.
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`Having taken advantage of the Hatch-Waxman Act, Petitioner should not be heard
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`to invoke this separate proceeding, too. That reason for denial is all the more
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`appropriate given Petitioner’s apparent coordination with another Hatch-Waxman
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`defendant, with whom Petitioner has divided its challenges (on otherwise time-
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`barred petitions)—another aspect that is contrary to congressional intent.
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`Second, the Petition should be denied because it does not provide the required
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`specificity, under both the AIA and the Board’s Rules, for its alleged invalidity
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`grounds. Instead of providing an element-by-element (or even claim-by-claim)
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`mapping of the alleged prior art to the challenged claims, Petitioner takes a shotgun,
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`scattershot approach that leaves it up to Patent Owner and the Board to guess which
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`references Petitioner is relying upon for which elements. That is plainly contrary to
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`the rules.
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`Third, institution should be denied because the Petition merely retreads
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`grounds that have already been examined and rejected by the Patent Office.
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`Petitioner relies on art that is cumulative of art already considered by the Examiner
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`during the prosecution of the ’740 patent family. Petitioner likewise relies on the
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`same (rejected) arguments and (rejected) alleged motivations to combine. Petitioner
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`does not (and cannot) offer any explanation as to why the Examiner erred in allowing
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`the claims or how the arguments in the Petition differ from those already asserted
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`and then withdrawn by the Examiner.
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`Fourth, the Petition should be denied because several of the references
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`(List 2001, Celgene Press Release 5/8/2001, and Celgene Press Release 8/28/2001)
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`in the only two asserted grounds are not prior art. Notably, List 2001 is a primary
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`reference in Petitioner’s first ground, and the other two references (Celgene Press
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`Release 5/8/2001 and Celgene Press Release 8/28/2001 (together, “Alleged Press
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`Releases”)) are asserted in both grounds. Despite Petitioner’s allegation, List 2001
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`is not prior art. As discussed below, List 2001 was not published on January 1, 2001
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`as Petitioner contends, and the claimed inventions pre-date List 2001. As for the
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`Alleged Press Releases, Petitioner has not offered any evidence whatsoever to
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`establish that they were publicly available.
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`Finally, the Petition’s lack of merit is further reason to deny institution.
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`Petitioner’s alleged grounds of invalidity result from classic hindsight bias and
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`ignorance of teachings away.
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`IPR2018-01509
`U.S. Patent No. 7,189,740
`The ’740 patent claims a method of treating MDS through the administration
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`of a compound now known as lenalidomide. 2 MDS is a diverse group of
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`hematopoietic stem cell disorders that manifest in various cytopenias (a condition in
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`which a patient has a reduced level of blood cells).3
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`
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`2 The ’740 patent has one independent claim, claim 1. (Ex. 1001 at 20.) The text of
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`claim 1 is as follows:
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`1. A method of treating a myelodysplastic syndrome, which comprises
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`administering to a patient in need thereof about 5 to about 50 mg per
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`day of 3-(4-amino-1-oxo-1,3-dihydro-isoindol-2-yl)-piperidine-2,6-
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`dione having the formula:
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`
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`or a pharmaceutically acceptable salt, solvate or stereoisomer thereof.
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`3 Several types of cytopenias exist, with each type determined by what type of blood
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`cells is low or decreased. Anemia occurs when red blood cells are low; leukopenia
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`or neutropenia is a low level of white blood cells; and thrombocytopenia is a
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`deficiency of platelets. (Ex. 2031 at 3–4, 7–9 (dictionary definitions of anemia,
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`cytopenia, neutropenia, and thrombocytopenia).)
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`Prior to the inventions claimed in the ’740 patent, little was known about MDS,
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`its etiology, or effective targets for treatment. Celgene had previously invented (and
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`later patented) lenalidomide as part of an innovative medicinal chemistry program it
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`launched in the mid-1990s to develop and study compounds for possible therapeutic
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`effects. Celgene later discovered that, despite teachings in the art directing a POSA
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`away from the use of the compound now known as lenalidomide to treat MDS, it
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`was unexpectedly successful. This presented new hope for MDS patients.
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`In disputing this, Petitioner relies heavily on the premise that a POSA would
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`have known of a link between tumor necrosis factor-alpha (“TNF-”) inhibition and
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`MDS. Not so. The etiology of MDS was unknown as of the relevant date, and there
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`was no link between TNF- inhibition and MDS (and, in fact, there was evidence
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`suggesting there was no such link). Moreover, Petitioner’s obviousness allegations
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`rest on the premise that the art taught a POSA that the compound later known as
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`lenalidomide “demonstrat[ed] the most potent anti-TNF activity.” (Pet. at 20.)
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`Again, not so. The art taught that the compound now known as lenalidomide was
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`one of the least potent of several other compounds at inhibiting TNF- production.
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`Petitioner’s contention to the contrary is based upon its (and its expert’s)
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`misunderstanding of published data. Specifically, Petitioner (and its expert)
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`contends that the compound now known as lenalidomide was the “most potent”
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`IPR2018-01509
`U.S. Patent No. 7,189,740
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`compound because its TNF- IC50 value was higher than that of other compounds.
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`But the opposite is true: the higher the TNF- IC50 value, the less potent the
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`compound at inhibiting TNF- production. Petitioner’s (and its expert’s)
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`fundamental misunderstanding of this data undermines its entire argument.
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`That said, even accepting all of Petitioner’s arguments as true, Petitioner
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`ignores that the art taught away from using the compound now known as
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`lenalidomide for the treatment of MDS.4 It was known at the time of the inventions
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`that cytopenias are the main symptoms that manifest in MDS patients. The art,
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`however, taught that the compound that Petitioner contends would have been known
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`to be lenalidomide caused cytopenias. A POSA would not have been motivated to
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`treat a patient with a compound that would cause and exacerbate the very symptoms
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`being treated.
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`Because Petitioner cannot demonstrate a reasonable likelihood that any of the
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`4 As noted herein, the compound now known as “lenalidomide” was not known by
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`that name until many years after the issuance of U.S. Patent No. 5,635,517
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`(“the ’517 patent”) to Patent Owner. Petitioner relies on different codenames in the
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`prior art without establishing that a POSA would have known that they referred to
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`the compound later known as lenalidomide.
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`IPR2018-01509
`U.S. Patent No. 7,189,740
`challenged claims is unpatentable, and because additional procedural and threshold
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`grounds support denial, the Board should decline to institute trial.
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`II. THE BOARD SHOULD DENY THE PETITION UNDER 35 U.S.C.
`§ 314(a) BECAUSE INSTITUTION WOULD RESULT IN AN
`INEFFICIENT USE OF BOARD RESOURCES
`“The decision whether to institute inter partes review is committed to the
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`Director’s discretion.” Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC,
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`138 S. Ct. 1365, 1371 (2018). The August 2018 Update to the Office Patent Trial
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`Practice Guide “invites parties to address additional factors that may bear on the
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`Board’s discretionary decision to institute or not institute under §§ 314(a) and
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`325(d).” NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8, at 20
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`n.4 (PTAB Sept. 12, 2018). Here, two such factors counsel against institution.
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`A. The Timing of the Petition and the Advanced Nature of the
`Corresponding District Court Litigation Render Institution
`Inefficient
`The ’740 patent is the subject of a currently-pending Hatch-Waxman litigation
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`between Patent Owner and Petitioner. That litigation has substantially advanced,
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`rendering institution of trial here inefficient.5
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`5 The ’740 patent is also the subject of a separate case filed by Patent Owner against
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`Lotus Pharmaceutical Co., Ltd. and Alvogen Pine Brook, LLC (collectively
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`IPR2018-01509
`U.S. Patent No. 7,189,740
`The litigation against Petitioner—Case No. 17-5314, D.N.J. (“DRL
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`Litigation”)—was filed by Patent Owner on July 20, 2017. Petitioner served
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`invalidity contentions in the DRL Litigation regarding the ’740 patent—which
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`included the same art cited by Petitioner in the instant proceeding—on January 19,
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`2018. Further, fact discovery has been open for nearly a year and closes in May 2019,
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`claim construction exchanges have occurred, and the case is progressing toward a
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`Markman hearing in March/April 2019.
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`Yet Petitioner chose to wait nearly seven months after serving its invalidity
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`contentions to file its Petition. The timing of that filing—on the eve of the expiration
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`of Petitioner’s one-year statutory bar under 35 U.S.C. § 315(b)—appears calculated
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`to exploit the system to Petitioner’s advantage. Petitioner knew its invalidity
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`theories at least as early as January 2018, but chose to wait for the district court case
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`to further develop before filing the Petition at the last possible minute.
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`In view of the progression of the district court litigation, institution of IPR
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`would be inefficient. The Board has exercised its discretion to deny institution
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`where the advanced state of a corresponding district court litigation would render
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`
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`“Lotus”), Case No. 17-6842, D.N.J. That case has also substantially advanced at
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`this time.
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`IPR2018-01509
`U.S. Patent No. 7,189,740
`IPR an inefficient use of Board resources. NHK Spring, IPR2018-00752, Paper 8,
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`at 19–21. Here, a proceeding before the Board on the current Petition would not
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`conclude until February 2020. Meanwhile, in the DRL Litigation, fact discovery
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`will have been closed for nine months, expert discovery will likely be closed, and
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`the case will likely be close to, if not on the eve of, trial. Thus, institution, like in
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`NHK Spring, “would not be consistent with ‘an objective of the AIA . . . to provide
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`an effective and efficient alternative to district court litigation’” and, therefore,
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`should be denied. Id. at 20 (quoting Gen. Plastic Indus. Co. v. Canon Kabushiki
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`Kaisha, IPR2016-01357, Paper 19, at 16–17 (PTAB Sept. 6, 2017)).
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`B.
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`Institution Would Upset the Careful Balance Struck by the
`Hatch-Waxman Act
`Institution should also be denied because instituting IPR on an Orange Book-
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`listed patent, such as the ’740 patent, would disrupt the careful balance between
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`innovation and competition reflected in the Hatch-Waxman Act. It has long been
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`recognized that the Hatch-Waxman Act—and in particular, its procedure for
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`litigating patent disputes between innovator and generic manufacturers—was the
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`product of compromise
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`intended
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`to balance
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`the objectives of
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`inducing
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`pharmaceutical companies to invest in the research and development necessary to
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`make new products while promoting competitors to bring cheaper, generic copies of
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`those products to market. Abbott Labs. v. Young, 920 F.2d 984, 991 (D.C. Cir. 1990)
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`IPR2018-01509
`U.S. Patent No. 7,189,740
`(Edwards, J., dissenting). That balance is disrupted by allowing generic companies
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`to take advantage of the benefits of the Hatch-Waxman Act (i.e., to file an
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`Abbreviated New Drug Application relying on the innovator’s data) and thereafter
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`challenge the same patents through the entirely separate IPR proceeding, attendant
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`by different burdens, standards, and procedures than in Hatch-Waxman litigation.
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`Sen. Orrin Hatch, one of the framers of the Act, recognized this disruption to
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`the carefully-crafted balance and introduced the “Hatch-Waxman Integrity Act of
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`2018” earlier this year. Sen. Hatch’s proposal would require a generic company to
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`choose between two options: (i) availing itself of the benefits of the Act, including
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`by resolving patent disputes in district court pursuant to the framework established
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`under the Act or (ii) petitioning for IPR. But not both. (Ex. 2030, S. 974, 115th
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`Cong. (2018).) The proposal seeks to restore the Act’s balance by prohibiting