1. NewYorkBio Conference May 5, 2015 Large Molecules, Small Proceedings: The Intersection of Biologics and IPRs

2. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 1 The Panel Larry Coury  Director of Dispute Resolution, Regeneron Pharmaceuticals, Inc. Peter Waibel  Vice President, Head of Patent Litigation, Novartis Pharmaceuticals Brian Walsh  Senior Corporate Counsel and Head of the Immunology Patent Group at Bristol-Myers Squibb Justin Oliver  Partner and Chair of the PTO Contested Proceedings Practice Group at Fitzpatrick Cella Harper & Scinto Alicia Russo - Moderator  Partner at Fitzpatrick Cella Harper & Scinto

3. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 2 Mechanics of IPRs (35 U.S.C. § 311 et al.)  Replaced Inter Partes Reexaminations  Grounds for request –§§102 and 103 –Patents and printed publications only  When can it be requested –Patent filing date on or before March 16, 2013 – any time –Patent filing date after March 16, 2013 – after the later of:  Nine months after date of issue, or  Termination of a post-grant review, if instituted

4. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 3 Mechanics of IPRs  Timeline – a final decision is rendered within about 18 months from the filing date of the petition  Estoppel – applies to petitioner, real party in interest, and privy of petitioner –Cannot assert invalidity on any ground that was raised or reasonably could have been raised in an IPR that reached a final decision  Standing –No requirement for a proof of injury or other interest  If petitioner does not succeed before the PTAB, it will need standing to appeal to the Federal Circuit

5. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 4 Mechanics of IPRs  Claim Amendments –Claim amendments are allowed, but the burden is on Patent Owner to prove patentability over all prior art and written description support –Previous grant rate of motion was about 5% –Via motion to amend  15 page limit – now changed to 25 pages  New rule - appendix for the amended claims permitted

6. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 5 Mechanics of IPRs IPRPGR WhenAfter nine months of grantWithin nine months of grant Threshold showingReasonable likelihood of success More likely than not or novel legal question Grounds102, 103101, 102, 103, 112 EstoppelIssues raised or reasonably could have been raised AppealBoth parties may appeal to Federal Circuit (assuming standing)

7. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 6 Mechanics of IPRs  Miscellaneous –Redundancy –Conclusory basis for reason to combine –Statistics  IPR – 73% rate of cancelation/unpatentability for cases reaching final decision 16% of analyzed claims were canceled by Patent Owner 59% of those cases were computer/electrical/data processing 3% were pharma http://www.postgranthq.com/statistics/

8. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 7 Different Standards at the PTAB v. District Court  Threshold for institution –PTAB  “reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition” (§ 314 (a)) –District Court  No requirement

9. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 8 Different Standards at the PTAB v. District Court  Presumption of validity –PTAB  No presumption of validity  Petitioner has the burden to prove invalidity Except for amended claim –District Court  Patent is presumed valid  Burden is on the party asserting invalidity to overcome the presumption of validity (35 U.S.C. § 282(a))

10. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 9 Different Standards at the PTAB v. District Court  Burden of proof –PTAB  Preponderance of evidence –District Court  Clear and convincing evidence

11. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 10 Different Standards at the PTAB v. District Court  Claim Construction –PTAB  “Broadest reasonable interpretation” (In re Cuozzo Speed Technologies, LLC., Fed. Cir. Feb. 4, 2015)  No Markman hearing –District Court  Federal Circuit – “the meaning that [a] term would have to a person of ordinary skill in the art in question at the time of the invention.” (Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005))  Markman hearing to decide claim construction

12. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 11 Different Standards at the PTAB v. District Court  Practical effects –Success rate of § 102 challenge IPR  PTAB – 37.5%  District Court – 31.1% –Success rate of § 103 challenge IPR  PTAB – 57.5%  District Court – 27.8% http://www.postgranthq.com/statistics/

13. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 12 Biologics IPR Decisions  BioMarin Pharmaceutical Inc. v. Genzyme Therapeutic Products Ltd. (IPR2013-00534, IPR2013-00537)  BioMarin Pharmaceutical Inc. v. Duke University (IPR2013-00535) –Genzyme’s Myozyme product is used for the treatment of Pompe disease –Representative Claim - A method of treating a human patient with Pompe's disease, comprising intravenously administering biweekly to the patient a therapeutically effective amount of human acid alpha glucosidase, whereby the concentration of accumulated glycogen in the patient is reduced and/or further accumulation of glycogen is arrested.  The PTAB determined that all of the challenged claims of the patents were obvious in view of various combinations of several references  BioMarin is currently conducting clinical trials on a competing product for the treatment of Pompe disease

14. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 13 Biologics IPR Decisions  Biologics decisions since BioMarin –Baxter/Apatech v. Millenium Biologix (IPR2013-00590; IPR2013- 00582)  On March 18, 2015, PTAB determined that Petitioner has shown by a preponderance of evidence that the challenged claims were obvious –Aker Biomarine/Enzymotec v. Neptune/Bioressources (IPR2014- 00003)  On March 23, 2015, PTAB determined that the Petitioner has established by preponderance of evidence that all but two of the challenged claims are unpatentable under both 102 and 103 grounds

15. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 14 Biologics IPR Decisions  Often, Patent Owner cancels challenged claims or reaches settlement –CroFab – Laboratories Silanes v. BTG Int’l (IPR2014-01269)  Laboratories Silanes filed petition in August 2014  BTG announced settlement, IPR terminated in December 2014 –Eprex – Hospira v. Janssen (IPR2013-00365)  Hospira filed IPR but Janssen disclaimed all challenged claims  Pending –Herceptin – Phigenix v. Immunogen/Genentech (IPR2014-00676)  Decision to institute reached in October 2014

16. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 15 Biologics IPR Decisions  Effects of IPR decisions on Biologics/Pharma products –The BioMarin decisions mark one of the first times that the PTAB has invalidated a biologics patent in the context of an IPR –In light of the recent decisions, IPR proceedings warrant the attention of Patent Owners and would-be Petitioners alike  103 ground for invalidation should be considered in light of the recent decisions from the PTAB  “Preponderance of evidence” standard may be easier to meet  “Broadest reasonable interpretation” of claim scope potentially increases the prior art available for anticipation and obviousness arguments

17. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 16 Rule Changes/Proposed New Rules – Impact on IPRs  USPTO Rule Changes/Proposed New Rules (1st Quick Fix) –Petitioner’s Reply Brief and PO’s Motion to Amend  Old Rule: 15-Page limit  New Proposed Rule: Increase page limit to 25 pages http://www.uspto.gov/blog/director/entry/ptab_s_quick_fixes_for

18. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 17 Rule Changes/Proposed New Rules – Impact on IPRs  USPTO Rule Changes/Proposed New Rules (2 nd Rule Package) –Motion to Amend  Old Rule: Patent Owner required to prove patentability over all prior art  New Proposed Rule: Patent Owner will be required to prove patentability of the amended claims over the art of record before the Office http://www.uspto.gov/blog/director/entry/ptab_s_quick_fixes_for

19. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 18 Rule Changes/Proposed New Rules – Impact on IPRs  USPTO Rule Changes/Proposed New Rules (2 nd Rule Package) –Patent Owner’s Preliminary Response  Old Rule: No new testimonial evidence allowed  New Proposed Rule: Supporting evidence will be allowed –Establishing the real party-in-interest (RPI)  Old rule: limited discovery by Patent Owner to establish RPI  New Rule: ample discovery to determine RPI http://www.uspto.gov/blog/director/entry/ptab_s_quick_fixes_for

20. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 19 Rule Changes/Proposed New Rules – Impact on IPRs  USPTO Rule Changes/Proposed New Rules (3 rd Pilot Program) –PTAB Panel  Old Rule: Judges participating in a decision to institute a trial also part of the panel deciding the case on its merits  New Proposed Rule: A pilot program where a single judge would make the decision on whether to institute a trial and two new judges would be added to the panel only when and if a trial is instituted

21. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 20 Proposed Legislation – STRONG Patents Act  STRONG Patents Act - Spearheaded by Senator Christopher Coons (DEL) and introduced 03/03/2015  Proposed changes (http://patentlyo.com/patent/2015/03/strong-patent- senator.html) –Claim Construction standard will:  Be “ordinary and customary meaning”  No longer use “broadest reasonable interpretation” –Claim amendments to be allowed if “reasonable” –Presumption of validity – burden of proof is “clear and convincing evidence” –Patent Owner’s Preliminary Response – supporting evidence will be allowed

22. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 21 Proposed Legislation – STRONG Patents  STRONG Patents Act - Proposed changes (cont’d) –Block anonymous petitions – will allow Patent Owner to discover the RPI associated with the petition –Standing to file a petition will be limited to only entities charged with infringement  Entities such as the Coalition for Affordable Drugs, a wholly owned subsidiary of Hayman Credes Master Fund, LP, will no longer be permitted to file IPR petitions the founder of Hayman Capital, publicly announced his intention to go “activist” against the U.S. pharmaceutical industry and its patents, calling it a “short activist strategy”

23. FITZPATRICK, CELLA, HARPER & SCINTO © 2015 | www.fitzpatrickcella.com 22 Proposed Legislation – Innovation Act  Bill passed the House in 2013 as H.R. 3309 – introduced by Rep. Goodlatte  Bill was re-introduced as H.R. 9 on February 5, 2015, and is the same as H.R. 3309  Proposed changes –PGR: remove “reasonably could have raised” from the estoppel provisions of § 325(e)(2) –IPR and PGR: mandate the use of a district court-style claim construction in IPR and PGR proceedings  But Federal Circuit has upheld the USPTO’s use of the “broadest reasonable interpretation” of the claims

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