The Reason For Bringing a Meritorious Petition for Inter Partes Review is Irrelevant; No Sanctions Against Hedge Fund Front

In Coalition for Affordable Drugs VI, LLC v. Celgene Corp., IPR2015-01092, Paper 19 (Septe,ber 25, 2015), the Board denied the patent owner’s motion for sanctions against Petitioner, who it accused of filing the Petition to manipulate patent owner’s stock price.

The Board first addressed patent owners complaint that petitioner was motivated by profit, noting:

Profit is at the heart of nearly every patent and nearly every inter partes review. As such, an economic motive for challenging a patent claim does not itself raise abuse of process issues. We take no position on the merits of short-selling as an investment strategy other than it is legal, and regulated.

The Board next addressed patent owner’s complaint that petitioner had no competitive interest.  The Board contrasted inter partes review, which be be instituted by any person who is not the owner of the patent, with covered business method review which require a party or privy to have been sued or charged with infringement of the patent, and held that Congress did not limit inter partes reviews to parties having a specific competitive interest in the technology covered by the patents.

The Board then address the purpose of the America Invents Act, rejecting the patent owner’s arguments.  The Board said:

The purpose of the AIA was not limited to just providing a less costly alternative to litigation. Rather, the AIA sought to establish a more efficient and streamlined patent system that improved patent quality, while at the same time limiting unnecessary and counterproductive litigation costs. The AIA was designed to encourage the filing of meritorious patentability challenges, by any person who is not the patent owner, in an effort to further improve patent quality.

Noting that that patent owner did not allege that the Petitioner filed a non-meritorious patentability challenge, the Board denied the motion for sanctions

 

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About Bryan Wheelock

Education
J.D., Washington University in St. Louis
B.S.E. in Mechanical Engineering, Duke University

Bryan Wheelock’s practice includes preparation and prosecution of patent and trademark applications and drafting of intellectual property agreements, including non-compete agreements. He has brought and defended lawsuits in federal and state courts relating to intellectual property and has participated in seizures of counterfeit and infringing goods.

Bryan prepares and prosecutes U.S. and foreign patent applications for medical devices, mechanical and electromechanical devices, manufacturing machinery and processes, metal alloys and other materials. He also does a substantial amount of patentability searching, trademark availability searching and patent and trademark infringement studies.

In addition to his practice at Harness Dickey, Bryan is an Adjunct Professor at Washington University School of Law and Washington University School of Engineering.