Patents in the Unpredictable Arts No Easy IPR Mark

Back in January of last year Kyle Bass introduced himself to the patent community through a series of brash, public pronouncements on a perceived lack of quality in drug patents. His stated intention was to “knee cap” drug companies by leveraging Inter Partes Review at the Patent Trial & Appeal Board (PTAB) to cancel, in his view, improvidently granted patents. My reaction to those pronouncements was to predict that it would be Mr. Bass that would be “knee capped” as invalidating patents in the unpredictable arts is easier said than done. This is because there is already a significant interest in cancelling such patents from a highly sophisticated generics industry.  If defeating such patents were that easy, generics would already be on it. For this reason, the vast majority of patents sucessfully challenged at the PTAB are in the predictable arts (i.e., electrical and/or mechanical).

Since that time, Mr. Bass has seen his first two IPR filings denied by the PTAB on technical grounds. (failure to prove public accessibility of the underlying prior art references). Earlier this week, the Board denied the third Bass filing on the merits. In this filing, Mr. Bass and friends took on a method of treating multiple sclerosis as claimed Biogen’s U.S. patent 8,399,514. In its decision, the PTAB essentially explained to Mr.Bass that an obviousness analysis, in the unpredictable arts, requires far more than an “obvious to try” rationale. (here).

Given his 0-3 record, and the impending sanction orders against Mr. Bass in his remaining IPR proceedings, the outlook is quite negative for this investment vehicle. The Board’s decision in the Biogen IPR is supportable on a variety of bases.  First, prior art in the unpredictable arts must be enabled for the particular use being claimed in the target IPR patent.  MPEP 2121 et seq.  Second, the prior art must provide a reasonable expectation of success in unpredictable arts for achieving the utility in the claimed invention.  MPEP 2143.02.  The “obvious to try” test, as employed in the predictable art arrangement subject to the KSR dispute, is limited to routine experimentation involving a finite number of techniques with predictable results.  Here there was no dispositive testing in the prior art that demonstrated the claimed utility of the lead compound for effective treatment of MS. (for a completely different take, see a spirited discussion from Gene Quinn of IPWatchdog)

In the unpredictable arts, especially drug formulations, tens of millions are spent on researching formulations and potential efficacy for a given research premise.  Early, research premises, are disproven time and time again—hence the high development costs in this industry and the critical importance of patents.  No definitive test results or studies for the subject compound were found by the PTAB in the Biogen petition.

I don’t detect any bias against Mr. Bass at the PTAB. Rather, I simply see the application of the law, as it is recognized in the unpredictable arts.  Demonstrating obviousness in the unpredictable art is just not that easy.  Suspecting that a given compound might have efficacy is far afield from demonstarting such was actually known, let alone then arriving at a therapeutically effective dosage.

Going forward, it is likely that we will see few (if any) decisions on the merits for Mr. Bass’s filings. In my view, the writing is on the wall. His use of agency resources to advance his investment vehicle, is sanctionable, and will result in his complete defeat at the PTAB. for all of these IPR filings.

A tough road lies ahead for Mr. Bass, don’t mind his limp.