Yesterday the PTAB issued its first decision involving two of Kyle Bass’ IPR petitions targeting pharmaceutical companies, denying institution in both cases.  Specifically, the PTAB denied institution of IPR2015-00720 and IPR2015-00817, the first two IPR petitions filed by Bass, which targeted Acorda patents 8,663,685 and 8,007,826 covering AMPYRA.  In reaching these decisions, the PTAB concluded Bass had not established there was a reasonable likelihood that it would prevail with respect to at least one of the 8 claims challenged in IPR2015-00720 or one of the 39 claims challenged in IPR2015-00817.  Notably the PTAB did not address Bass’ alleged short-selling strategies in reaching its decisions.

In both petitions, Bass advanced grounds of unpatentability under 35 U.S.C § 103(a) based on two posters presented at conferences.  Despite the fact that posters were listed on the Information Disclosure Statements (IDS) filed during prosecution of the challenged patents and Acorda acknowledged they had been presented, the Board was not persuaded they constituted prior art.  In reaching its opinion, the PTAB first stated the submission of an IDS does not constitute an admission that a cited reference is material prior art.  Secondly, the PTAB stated the “determination of whether a references is a ‘printed publication’ under 35 U.S.C. § 102(b) involves a case-by-case inquiry into the facts and circumstances surrounding the reference’s disclosure to members of the public.” (IPR2015-00720, Paper 12 at 4).  Citing In re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004), the PTAB considered: “[1] the length of time the display was exhibited, [2] the expertise of the target audience, [3] the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and [4] the simplicity or ease with which the material displayed could have been copied.”  The PTAB found that Bass presented insufficient evidence as to how long the posters were presented and the level of expertise of the target audience.  Bass also provided insufficient evidence in relation to any reasonable expectation that the material could have been copied.  Concluding Bass did not make “a threshold showing that the posters were sufficiently publicly available to qualify as a ‘printed publication’ under § 102(b)” the petitions were denied.

Decisions on institution are final and non-appealable.  In re Cuozzo Speed Techs., LLC, No. 2014-1301, 2015 WL 4097949, at *3 (Fed. Cir. July 8, 2015) (Fed. Cir. concluding that § 314(d) prohibits review of the decision to institute IPR even after a final decision.)  In a sign that Bass was not yet finished with his filings, Bass filed petition numbers 24-26 yesterday, against Insys Pharma’s SUBSYS breakthrough pain medication for cancer patients.  The three newly targeted patents are U.S. Patent Nos. 8,835,459, 8,835,460, and 8,486,972.  The next institution decisions on Bass petitions are expected in October.  Yesterday’s decisions are not necessarily predictive of the fate of the other petitions.  We will continue to monitor these proceedings and provide updates.