Preliminary Response

PROTECTIVE ORDER MATERIAL
Paper No. __
Filed: July 28, 2015
UNITED STATES PATENT AND TRADEMARK OFFICE
________________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
________________
COALITION FOR AFFORDABLE DRUGS VI LLC
Petitioner,
v.
CELGENE CORPORATION
Patent Owner
________________
Case IPR2015-01103
Patent 6,315,720
________________
PATENT OWNER PRELIMINARY RESPONSE

PURSUANT TO 35 U.S.C. 313 AND 37 C.F.R. 42.107
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Patent Owner Preliminary Response
IPR2015-01103
Patent 6,045,501
TABLE OF CONTENTS
Page
I.
INTRODUCTION ........................................................................................... 1
II.
BACKGROUND ............................................................................................. 3
III.
A.
The Challenge of Protecting A Fetus From A Teratogenic

Drug While Allowing A Patient Access to Its Efficacy........................ 5
B.
Previous Attempts to Control

Access to Other Drugs Were Unsuccessful ........................................ 11
C.
The 720 Patent ................................................................................... 13
ARGUMENT ................................................................................................. 19
A.
The Petition Should Be Denied Because

CFAD Has Failed To Show A Reasonable
Likelihood That The Claims Are Obvious .......................................... 20
1.
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CFADs Expert Declaration Is

Entitled To little or no weight ............................................... 20
(a)
Dr. Fudin Is Not A POSA ............................................... 20
(b)
Dr. Fudins Opinions Are

Unsupported, Verbatim Recitations of
CFADs Conclusory Arguments .................................... 21
2.
The Petition Fails To Address The Redundancy

With The 1096, 1102 And 1103 Petitions ................................ 22
3.
Ground 1: The Claimed Inventions

Would Not Have Been Obvious Over
Mitchell, Dishman, and Cunningham ....................................... 24
(a)
CFAD Fails To Address Both the

Claims and the Prior Art As a Whole ......................... 25
(b)
CFAD Has Not Provided A Motivation To

Combine Mitchell With Dishman or Cunningham ........ 26
-i-

(c)
The Ground 1 References Fail To

Disclose, Teach, or Suggest
Key Elements of the Claimed Inventions ....................... 32
i.
ii.
iii.
4.
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Claim 1 Would Not Have Been Obvious

Over Mitchell, Dishman, And Cunningham ........ 32
1)
Element 1(c) ............................................... 32
2)
Element 1(d)............................................... 35
3)
Element 1(e) ............................................... 35
Dependent Claims 227 Would Not Have

Been Obvious Over Mitchell In View Of
Dishman And The Knowledge Of A POSA ........ 38
1)
Claim 5 ....................................................... 39
2)
Claim 6 ....................................................... 40
3)
Claim 9 ....................................................... 41
4)
Claim 10 ..................................................... 42
5)
Claims 13, 14, 23-25 .................................. 42
6)
Claim 17 ..................................................... 44
7)
Claims 18 and 19 ....................................... 44
Independent Claim 28 And Dependent

Claims 2932 Would Not Have Been
Obvious Over Mitchell In View Of Dishman
In Further View Of Cunningham And
Knowledge Of A POSA ....................................... 46
1)
Claim 28 ..................................................... 47
2)
Claims 29-32 .............................................. 47
CFAD Fails To Address The Objective Evidence of

Nonobviousness Regarding the 720 Patent ............................. 49
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IV.
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(a)
Long-felt Need Further Supports The

Nonobviousness Of The Claimed Inventions ................. 49
(b)
Commercial Success Further Supports The

(c)
Third-Party Praise And Awards Further Supports

The Nonobviousness Of The Claimed Inventions ......... 52
(d)
Licensing by Others Further Supports The

(e)
Unexpected Results Further Supports The

B.
The Petition Should Be Denied

Under 35 U.S.C. 314(a) and 316(b) ............................................... 54
C.
The Petition Should Be Denied For

Failing To Name All Real Parties-In-Interest ..................................... 57
CONCLUSION.............................................................................................. 60
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I.
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INTRODUCTION
Pursuant to 35 U.S.C. 313 and 37 C.F.R. 42.107(a), Patent Owner
Celgene Corporation (Celgene) submits this Preliminary Response to Coalition

For Affordable Drugs VI LLCs (CFAD) Petition for Inter Partes Review (the
Petition) of U.S. Patent No. 6,315,720 (the 720 patent).
The 720 patent describes and claims improved methods for delivering a
potentially dangerous drug to a patient (including teratogenic drugs such as
thalidomide) while avoiding the occurrence of adverse side effects (such as birth
defects of the type associated with thalidomide). The inventions were conceived as
part of Celgenes efforts to significantly improve its existing program for
controlling patient access to thalidomide, which was known as the System for
Thalidomide Education and Prescribing Safety, or S.T.E.P.S. The improved
program, which Celgene called Enhanced S.T.E.P.S., is an embodiment of the
720 patent and has been used in connection with thalidomide and other potentially
teratogenic pharmaceutical products since 2001. During that time it has
successfully prevented 100% of drug-related birth defects. In fact, the inventions
of the 720 patent were so successful and innovative that the FDA required other
drug manufacturers to copy Celgenes patented methods if they wanted to keep
their products on the market, resulting in licenses to several of Celgenes patents,
including the 720 patent.
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Notwithstanding Celgenes significant innovation, CFAD has filed the
present Petition as part of a hedge fund investment strategy developed by the real
parties-in-interest (RPI). CFADs Petition, however, has several fatal defects.
First, CFAD relies heavily on an expert declaration that is entitled to little or
no weight because the declarant is not a person of ordinary skill in the art (POSA),
and because the declaration merely reiterates CFADs conclusory arguments.
Second, CFADs Ground 1 obviousness argument fails on the merits because
none of the cited references disclose, teach, or suggest all elements of the
challenged claims. CFADs proposed modifications to, and combinations of, the
alleged prior art are driven entirely by hindsight and supported only by conclusory
assertions by CFADs declarant, who merely parrots the arguments in the Petition.
There is also no rational basis for combining CFADs references, as they are
directed to different endeavors. For example, one of CFADs cited references,
Cunningham, is not related in any way to restricted drug distribution, assessing
risks associated with pharmaceuticals, or preventing the occurrence of adverse
events, let alone to teratogenic side effects. Ground 1 does not warrant an IPR trial
of the 720 patent.
Third, CFADs Petition is an improper use of the IPR proceedings.
Specifically, CFAD and the RPI are abusing and misusing the IPR process in an
attempt to effectuate changes in the stock prices of the targeted innovator
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pharmaceutical companies. The self-serving actions of the RPI create unwarranted
burdens for both patent owners and the Board. The Board should exercise its
discretion under 35 U.S.C. 314(a) and 316(b) and deny the Petition.1
Fourth and finally, the Petition should also be denied because it fails to
name all RPIa threshold requirement for an IPR. Specifically omitted from the
RPI identification are the investors in the Hayman funds responsible for filing the
Petition. Having failed to name all RPI, the Petition cannot be considered.
II.
BACKGROUND
Celgene is a biopharmaceutical company that is committed to improving the
lives of patients through research and development of drug products that treat
cancers and other devastating conditions. Three drug products developed by
Celgene are relevant to this IPR: Thalomid, Revlimid, and Pomalyst.
Thalomid is approved for the treatment of (1) erythema nodosum leprosum
(ENL)an inflammatory condition associated with leprosy; and (2) newly
diagnosed multiple myeloma (MM) (in combination with dexamethasone). Ex.
2001 at 1. The active ingredient in Thalomid is thalidomide, which is well known
for its teratogenicity (or ability to cause severe birth defects). Unfortunately, as
described in more detail below, the devastating effects of thalidomide were felt
1
With the Boards permission, Celgene has separately moved to dismiss the
Petition pursuant to 37 C.F.R. 42.12.
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worldwide during the thalidomide tragedy of the 1950s and 1960s, and continue
today for the surviving victims. See, e.g., Ex. 2002 at 1; Ex. 1001 at 1:40-45.
Revlimid is approved for the treatment of (1) transfusion-dependent anemia
due to low- or intermediate-1-risk myelodysplastic syndromes associated with a
deletion 5q abnormality with or without additional cytogenetic abnormalities;
(2) MM (in combination with dexamethasone); and (3) mantle cell lymphoma in
certain patients whose disease has relapsed or progressed after two prior therapies.
Ex. 2003 at 1. Pomalyst (in combination with dexamethasone) is approved for
the treatment of MM in patients who have received at least two prior therapies and
whose disease has progressed. Ex. 2004 at 1. The active ingredient in Revlimid
is lenalidomide, and the active ingredient in Pomalyst is pomalidomide. Ex. 2003
at 1; Ex. 2004 at 1. According to the FDA-approved package inserts, lenalidomide
and pomalidomide are thalidomide analogue[s], and if these drugs are used
during pregnancy, [they] may cause birth defects or embryo-fetal death. Ex. 2003
at 1, 3, 7, 22-23; Ex. 2004 at 1, 2, 4, 14, 24. As described herein, due in large
measure to the inventions claimed in the 720 patent (and other of Celgenes
patents), Celgenes FDA-approved systems for preventing fetal exposure to the
active ingredients in Thalomid, Revlimid, and Pomalyst have been 100%
successful in preventing drug-related birth defects.
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A.
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The Challenge of Protecting A Fetus From A Teratogenic
Drug While Allowing A Patient Access to Its Efficacy
Beginning in 1958, thalidomide was marketed in Europe as a sedative and a

treatment for pregnant women with morning sickness. See Ex. 1001 at 1:40-45;
Ex. 2002 at 1. Shortly after entering the European market, it was discovered that
thalidomide caused deformities in children born to mothers who had taken the drug
during pregnancy. Id. As a result, by 1962, thalidomide had been withdrawn from
all markets. Id. By then, the damage had been done. Thalidomide had been
linked to more than 10,000 birth defects in at least 46 countries. Id. The birth
defects were severe. Some children were born with missing or abnormal limbs,
feet, or hands, a condition known as phocomelia (from the Greek for seal
limb). Id. Many other deformities and complications were linked to
thalidomide, including abnormal or absent ears, and heart and kidney problems.
Id. As a result of this tragedy, drug regulatory authorities worldwide, including the
FDA, revised their regulations to ensure that new drugs were screened for safety in
addition to efficacy, and were specifically investigated for their potential to cause
harm to a developing fetus. Id.; Ex. 2005.
Years later, it became clear that despite its teratogenicity, thalidomide had
the power to benefit certain patient populations. Ex. 1001 at 1:46-62.
Accordingly, Celgene believed it would be beneficial if the drug were made
available to those patient populations. Due to its known teratogenicity, however,
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Celgene realized that to market thalidomide, it needed to develop a system that
would allow patients in need of thalidomide to access it while ensuring that no
thalidomide-related birth defects would occur. Ex. 1001 at 1:59-64.
In other words, Celgene was faced with a great challengefind a way to
effectively avoid the teratogenic side effects of thalidomide while still making the
drug available to patients in need. Indeed, Celgene recognized that it would need
to create a system that was so effective at preventing birth defects of the type
associated with teratogenic drugs that it would convince skeptical FDA regulators,
and understandably vocal and concerned thalidomide victims around the world,
that Thalomid could be safely marketed. In other words, the new system would
need to convince the FDA to lift its nearly 40-year ban on thalidomide.
Celgene rose to meet this challenge, first developing the methods claimed in
U.S. Patent No. 6,045,501 (the Elsayed 501 patent) (Ex. 1003) (described in
Celgenes Preliminary Response to IPR2015-01092). Celgene then improved upon
its own work by inventing the methods claimed in the 720 patent (described
below). In other words, Celgenes inventions for controlling access to thalidomide
(and other teratogens) came in two phases. Celgene first developed S.T.E.P.S.,
which is claimed in the Elsayed 501 patent and was first implemented in the
original July 1998 Thalomid package insert (July 1998 Thalomid PI, Ex. 2032).
The initial implementation of S.T.E.P.S. only retrospectively identified patient
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behaviors that posed a risk of fetal exposure to thalidomide. See Ex. 2006 at 328.
While this patented system was 100% successful in preventing birth defects of the
type associated with thalidomide in patients taking Thalomid, Celgene (and the
inventors of the 720 patent) still saw room for significant improvement.
Thus, the 720 patents inventors developed changes that transformed
S.T.E.P.S. from a retrospective program into a prospective program that they
called Enhanced S.T.E.P.S. See id. Specifically, from October 1999 to
September 2001, the inventors focused on implementing changes that were
designed to identify patients exhibiting behaviours providing risk for fetal
exposure and to remedy those behaviours prior to dispensing thalidomide. Id.
(emphasis added).
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As explained in the 720 patent, the inventors

came up with the authorization process of Enhanced S.T.E.P.S. that is
conducted by the registered pharmacy consulting the computer readable
medium to retrieve a prescription approval code. Ex. 1001 at 13:43-45.
Enhanced S.T.E.P.S. was implemented for the first time with the September
2001 Thalomid package insert (September 2001 Thalomid PI), which is not
prior art to the 720 patent. See Ex. 2008. Specifically, the September 2001
Thalomid PI included the significant improvements claimed in the 720 patent.
Those improvements are reflected in the revisions to the Storage and Dispensing
section of the July 1998 Thalomid PI, which CFAD relies upon in IPR2015-01096:
DRUG MUST ONLY BE DISPENSED IN NO MORE THAN A 1
MONTH SUPPLY AND ONLY ON PRESENTATION OF A NEW
PRESCRIPTION WRITTEN WITHIN THE PREVIOUS 7 DAYS.
SPECIFIC INFORMED CONSENT (copy attached as part of this
package insert) AND COMPLIANCE WITH THE MANDATORY
PATIENT REGISTRY AND SURVEY ARE REQUIRED FOR ALL
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PATIENTS (MALE AND FEMALE) PRIOR TO DISPENSING BY
THE PHARMACIST.
BEFORE DISPENSING THALOMID (thalidomide), YOU MUST

ACTIVATE THE AUTHORIZATION NUMBER ON EVERY
PRESCRIPTION BY CALLING THE CELGENE CUSTOMER
CARE CENTER AT 1-888-4-CELGENE (1-888-423-5436) AND
OBTAINING A CONFIRMATION NUMBER. YOU MUST ALSO
WRITE THE CONFIRMATION NUMBER ON THE
PRESCRIPTION. YOU SHOULD ACCEPT A PRESCRIPTION
ONLY IF IT HAS BEEN ISSUED WITHIN THE PREVIOUS 7
DAYS (TELEPHONE PRESCRIPTIONS ARE NOT PERMITTED);
DISPENSE NO MORE THAN A 4-WEEK (28- DAY) SUPPLY,
WITH NO AUTOMATIC REFILLS; DISPENSE BLISTER PACKS
INTACT (CAPSULES CANNOT BE REPACKAGED); DISPENSE
SUBSEQUENT PRESCRIPTIONS ONLY IF FEWER THAN 7
DAYS OF THERAPY REMAIN ON THE PREVIOUS
PRESCRIPTION; AND EDUCATE ALL STAFF PHARMACISTS
ABOUT THE DISPENSING PROCEDURE FOR THALOMID
(thalidomide).
Ex. 2009 at 4; see Ex. 2008 at 20.
Today, Enhanced S.T.E.P.S. is known as the Thalomid REMS, which is an
FDA-approved Risk Evaluation and Mitigation Strategy (REMS). Enhanced
S.T.E.P.S. is claimed in Jepson format in the 720 patent as an improvement over
S.T.E.P.S., which was originally claimed in the 501 patent. Celgenes continued
success in preventing birth defects due to Thalomid, Revlimid, and Pomalyst is
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in large measure due to the inventions of the 720 patent and other Celgene patents
(including the 501 patent). Had Celgene not developed the claimed methods for
preventing fetal exposure to teratogenic (or potentially teratogenic) drugs,
Thalomid, Revlimid, and Pomalyst would not be available to patients today.
The FDA first approved Thalomid for the treatment of ENL in July 1998
subject to 21 CFR 314.520 (Subpart H), which allowed the FDA to approve
drugs that were shown to be effective, but that could only be used safely under
restricted conditions. Ex. 1031 at 0002. Specifically, the approval letter stated that
Thalomid was being approved because Celgene presented adequate information
to demonstrate that the drug would be safe and effective for use when marketed
under S.T.E.P.S., which is an embodiment of the methods described in Celgenes
patents. Id. The FDA subsequently approved Celgenes labeling changes that
incorporated the improvements of Enhanced S.T.E.P.S., which is an embodiment
of the methods described in the 720 patent. See Ex. 2009 at 4; Ex. 2008 at 20.
Then, when Thalomid was approved for the treatment of newly diagnosed MM in
2006, the FDA maintained the same restrictions on distribution of the drug. Ex.
2010 at 1. Similarly, the FDA conditioned its approval of both Revlimid and
Pomalyst (for all indications), on Celgenes use of the same restrictions applied to
Thalomid. Ex. 2011 at 1; Ex. 2012 at 7-10.
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B.
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Previous Attempts to Control Access to

Other Drugs Were Unsuccessful
Others attempted to control access to the drugs Accutane (isotretinoin) and

Clozaril (clozapine) before Celgene invented S.T.E.P.S., but as described below,
those attempts failed to meet their goals. Both failed to provide a workable
solution for dealing with a drug like thalidomide, where even a single drug-related
birth defect was unacceptable.
Accutane contains isotretinoin, a form of vitamin A (a vitamin A analogue)
that has been used as a treatment for severe cystic acne since 1982. Ex. 1010 at
101. Isotretinoin can and has caused birth defects in children whose mothers are
taking the drug. Id. Because of the teratogenic effects of isotretinoin, and instead
of removing the drug from the market, the manufacturer of isotretinoin
implemented the Pregnancy Prevention Program (PPP).
The PPP, however, was not effective in preventing women who were taking
Accutane from becoming pregnant or preventing birth defects. In fact, the
Mitchell reference that CFAD relies upon (Ex. 1010), discloses that there were
over 400 pregnancies that occurred during isotretinoin treatment, at least six of
which resulted in live born infants with at least minor anomalies, and at least one
with major anomalies. Id. at 103-04. Mitchell further reports that in the first
several months of the PPP, there was incomplete compliance with several parts of
the program, such as failures to ensure negative pregnancy tests before beginning
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treatment, failures to wait until menses begins before treatment, and failures to use
effective birth control before, during, and after treatment. Id. at 104. Compliance
remained incomplete even after the manufacturer changed the medication package
to highlight the most important parts of the PPP. Id.
Publications in prominent scientific journals also disparaged the PPP. For
instance, an article in the New England Journal of Medicine reported that [s]ince
the [PPP] program was implemented in 1989, a substantial number of fetuses have
been exposed to the drug. As many as 30 percent of the women with exposed
fetuses did not use any mode of contraception, even though they were cognizant of
the high fetal risk. Ex. 2013 at 1130.
Clozaril contains clozapine, and is used to treat schizophrenia. Ex. 1007 at
899. Its release into the market was permitted only with certain prescribing and
distribution restrictions implemented by the manufacturer. Id. These restrictions
were put in place because the use of clozapine is associated with a high frequency
of agranulocytosis, a potentially fatal blood disorder. Ex. 2014 at 52. Clozapine is
not a teratogenic drugit does not cause birth defectsand the system employed
to monitor its use was not tailored to restrict or prevent birth defects. Instead, the
manufacturer developed a program called the Clozaril National Registry to
enhance patient safety by facilitating early detection of potentially dangerous
white blood cell suppression. Id. at 52-53. But like the PPP, the clozapine system
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was also a failure. Specifically, during its first five years, 382 patients developed
agranulocytosis, and 12 of those patients died as a result. Id. at 55.
When Celgene invented S.T.E.P.S. and the methods claimed in the 501
patent, the programs in place for both the Accutane and Clozaril were
ineffective. The 501 patent was a significant innovation over those systems and,
as noted above, the 720 patent was a significant improvement over the 501
patent. To date, Celgenes FDA-approved systems for preventing fetal exposure to
the active ingredients in Thalomid, Revlimid, or Pomalystall of which are
covered by the claims of the 720 patenthave been 100% successful in
preventing birth defects of the type associated with thalidomide. Celgenes
patented methods were so successful that, in 2006, it became clear that the PPP
(and later attempts at managing the distribution of isotretinoin) were ineffective by
comparison. Consequently, the FDA required the manufacturers of isotretinoin to
use Celgenes patented methods if they wanted to keep their products on the
market. This resulted in licenses to several of Celgenes patents, including the
720 patent, in connection with the distribution of isotretinoin under a program
known as iPledge. See Ex. 2015 at 4, 8-9; Ex. 2016 at 1; and Ex. 2017 at 1.
C.
The 720 Patent
As discussed above, the 720 patent describes and claims improved methods
for delivering a potentially dangerous drug to a patient (including teratogenic drugs
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such as thalidomide) while avoiding the occurrence of adverse side effects (such as
birth defects). See Ex. 1001 at Abstract; 1:13-16. The claims are set forth in
Jepson format, with a preamble comprising a general description of the known
elements of the claimed invention (which are claimed in the Elsayed 501 patent,
and embodied in S.T.E.P.S. and the July 1998 Thalomid PI), and the novel,
improved elements (which are embodied in Enhanced S.T.E.P.S. and the
September 2001 Thalomid PI) set forth after the improvement comprising
clause. See 37 C.F.R. 1.75(e) (describing the preferred format for claims to
improvements). For example, independent Claim 1 of the 720 patent recites:
In a method for delivering a drug to a patient in need of the drug,
while avoiding the occurrence of an adverse side effect known or
suspected of being caused by said drug, wherein said method is of the
type in which prescriptions for said drug are filled only after a
computer readable storage medium has been consulted to assure that
the prescriber is registered in said medium and qualified to prescribe
said drug, that the pharmacy is registered in said medium and
qualified to fill the prescription for said drug, and the patient is
registered in said medium and approved to receive said drug, the
improvement comprising:
a. defining a plurality of patient risk groups based upon a predefined
set of risk parameters for said drug;
b. defining a set of information to be obtained from said patient,
which information is probative of the risk that said adverse side
effect is likely to occur if said drug is taken by said patient;
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c. in response to said information set, assigning said patient to at least
one of said risk groups and entering said risk group assignment in
said medium;
d. based upon said information and said risk group assignment,
determining whether the risk that said adverse side effect is likely
to occur is acceptable; and
e. upon a determination that said risk is acceptable, generating a
prescription approval code to be retrieved by said pharmacy before
said prescription is filled.
Ex. 1001 at Claim 1. The only other independent claim, Claim 28, includes all of
the elements of Claim 1 and adds the following further limitation: wherein said
adverse side effect is likely to arise in patients who take said drug in combination
with at least one other drug. Id. at Claim 28. The dependent claims further limit
and define the controls to avoid the occurrence of adverse side effects. See id. at
Claims 2-27, 29-32.
During prosecution, the Examiner extensively considered the most
significant prior art, namely the Elsayed 501 patent, and concluded that it did not
disclose, teach, or suggest the 720 patents inventions. Specifically, the Examiner
found that Elsayed et al. teaches a method for delivering a drug to a patient while
preventing the exposure to a fetus or to other individuals with contraindications to
the drug that includes registering prescribers, pharmacists, and patients in a
computer readable storage medium for authorizing and monitoring distribution of
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the drug, but noted that Elsayed does not teach a step of generating of a
prescription number or code, which can be retrieved by a pharmacy before said
prescription is filled. Ex. 1002 at 0091 (emphasis added). In other words, the
Examiner concluded that the Elsayed 501 patent disclosed only what was in the
preamble of the 720 patents Jepson claims, but did not disclose, teach, or suggest
the claimed improvements, which were not implemented or publicly disclosed until
the September 2001 Thalomid PI.
With respect to the approval code limitation, the Examiner originally
rejected the claims over U.S. Patent No. 6,202,923 to Boyer (Ex. 1005), stating
that Boyer et al, teaches a method of an automated pharmacy system (see
abstract) that improves prescription processing, and that it would have been
obvious to use an automated pharmacy arrangement as taught by Boyer et al.
which includes a step for generating a prescription number or code associated with
said prescription by a computer workstation. Ex. 1002 at 0092. The 720 patents
inventors overcame this rejection.
Specifically, the inventors explained that the automated prescription code in
Boyer was a number that was merely associated with every prescription, whereas
the prescription approval code of the 720 patent was based on a risk assessment of
information collected from the patient, and was generated only if and when the risk
was deemed acceptable. The inventors noted that the claims required an
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affirmative decision to be made before the prescription was filled, and Boyer did
not require such an approval code, nor did it require an approval code to be
generated before the prescription may be filled. Id. at 0106-07. In response to this
argument, the Examiner allowed all the claims of the 720 patent.2
Here, CFAD relies on three references in its Petition to argue that Claims 132 are unpatentable under 35. U.S.C. 103: Mitchell (Ex. 1010), Dishman (Ex.
1007) and Cunningham (Ex. 1008). Pet. at 11. Mitchell and Cunningham do not
contain any new material, information, or disclosures that were not previously
considered by the Examiner during prosecution of the 720 patent, and Dishman
does not disclose anything that is relevant to the claimed inventions.
Mitchell is a 1995 article that report[s] the results of an ongoing survey
designed to assess compliance with Accutanes PPP, which was implemented in
an attempt to minimize pregnancies among women exposed to the drug
The Examiners first Office Action also indicated that Claims 28-32 were
allowable if written in independent form because none of the prior art, either
alone or in combination, teaches or suggests a method for delivering a drug to a
patient while preventing exposure to a contraindicated individual that includes
screening for possible interaction between the drug and a second drug that has been
administrated to the subject. Ex. 1002 at 0059.
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isotretinoin. Ex. 1010 at 101. Dr. Allen Mitchell, who designed the survey, was a
physician with the Slone Epidemiology Unit of Boston University. Id.
The examiner did not cite Mitchell during prosecution, but the Background
of the Invention section of the 720 patent states that:
[m]ethods for monitoring and educating patients to whom a drug is
distributed have been developed in connection with Accutane [a]
pregnancy prevention program was developed, and the Slone
Epidemiology Unit of Boston University designed and implemented a
survey to evaluate these efforts [t]he survey identified relatively
low rates of pregnancy during Accutane treatment, which suggests
that such a program can be effective [e]nrollment in the Accutane
survey is voluntary assessing the representativeness of the women
who have been enrolled in the survey has been problematic, and it has
been difficult to determine whether the survey results can be
generalized to all female Accutane users.
Ex. 1001 at 2:13-35. Accordingly, the Examiner considered the relevant
disclosures from Mitchell regarding Accutanes PPP and the Slone survey
evaluating its effectiveness.
With respect to Cunningham, the Examiner considered a divisional of that
patent, U.S. Patent No. 6,055,507 (the 507 patent), which shares the same
specification as Cunningham and is listed on the face of the 720 patent. See Ex.
1001 at References Cited. CFAD does not cite any disclosures from Cunningham
that were not already before the Examiner.
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Moreover, CFAD uses Cunningham to make the same arguments that were
before the Examiner based on Boyer; in other words, that it would have been
obvious to use the approval code disclosed in Boyer (or Cunningham) to arrive at
the claimed inventions. See Pet. at 23-24. CFAD ignores that this Office has
already considered substantially the same art and arguments CFAD presents, and
concluded that the 720 patents inventions are not disclosed, taught, or suggested
by the prior art.
With respect to Dishman, the Examiner would not have found any
disclosures or information to be relevant to the claimed inventions because the
clozapine distribution system, as a whole, taught away from using such a system to
prevent adverse side effects. Specifically, the Examiner would have considered the
disclosures in Dishman to be irrelevant because the clozapine system was
unsuccessful after 382 patients developed agranulocytosis in the first five years,
and 12 of those patients died as a result. Ex. 2014 at 55.
III.
ARGUMENT
The Petition should be denied due to several fatal defects. First, CFAD
relies heavily on an expert declaration that is entitled to little or no weight because

the declarant is not a POSA, and because the declaration merely parrots CFADs
conclusory arguments. Second, CFADs Ground 1 obviousness argument fails to
establish a reasonable likelihood that the challenged claims are unpatentable.
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Third, CFADs Petition is an improper use of the IPR process, and should be
denied under 35 U.S.C. 314 and 316. Fourth, CFADs Petition fails to name all
RPI as required by 35 U.S.C. 312(a)(2).
A.
The Petition Should Be Denied Because CFAD Has Failed To

Show A Reasonable Likelihood That The Claims Are Obvious
1.
CFADs Expert Declaration Is

Entitled To little or no weight
As discussed below, CFADs Petition relies heavily on the declaration of Dr.

Jeffrey Fudin. See generally Pet. (citing Ex. 1027). Dr. Fudins opinions,
however, are entitled to little or no weight, including because: (1) Dr. Fudins
experience does not qualify him as a POSA; and (2) his opinions are unsupported,
verbatim recitations of CFADs conclusory arguments.
(a)
Dr. Fudin Is Not A POSA
Dr. Fudin does not have the knowledge of a POSA or any experience with
the problem that is solved by the 720 patent. CFAD defines a POSA as a
pharmacist. Pet. at 17. In particular, a POSA under CFADs definition would
typically have either a Pharm.D. or a BS in pharmacy with approximately 5-10
years of related experience and a license to practice as a registered pharmacist in
any one or more of the United States. Id. This definition improperly ignores the
true field of the claimed inventions, which is avoidance of adverse events
associated with drug products (i.e., pharmaceutical drug product risk management).
As such, Celgene disagrees with CFADs definition of a POSA, and proposes that
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a POSA would have had at least a bachelors degree and at least 2 years of
experience in risk management relating to pharmaceutical drug products, or a B.S.
or M.S. in pharmaceutical drug product risk management or a related field.
Celgenes definition of a POSA is supported by the claims and specification
of the 720 patent. See generally Ex. 1001. CFADs POSA, on the other hand, is
intentionally shaped to mirror the skills of Dr. Fudin and the alleged prior-art
references on which CFAD relies. While Dr. Fudin work[ed] in close
collaboration with medical staff members in the management of various acute and
chronic pain disease states, and has experience with . . . computerized billing and
patient record systems through his work as a pharmacist (Ex. 1027 at 5, 8), he
does not have the knowledge of a POSA or any experience with the problem that is
solved by the 720 patent. For example, a POSA would have experience in
designing and implementing systems for controlling access to pharmaceutical drug
products that have the potential for life threatening adverse eventsthe subject
matter of the 720 patent. Dr. Fudins opinions regarding patentability of the 720
patent claims are not from the view of a POSA and are thus entitled to no weight.
(b)
Dr. Fudins Opinions Are Unsupported, Verbatim

Recitations of CFADs Conclusory Arguments
Dr. Fudins opinions are also entitled to little or no weight because they are
unsupported and largely verbatim recitations of CFADs conclusory arguments.
See infra. To the extent that Dr. Fudin fails to cite any underlying factual bases for
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his opinions, they are entitled to little or no weight. See 37 C.F.R. 42.65(a);
Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776 F.2d 281, 294 (Fed. Cir.
1985) (stating a lack of factual support for expert opinion may render the
testimony of little probative value in a validity determination).
Indeed, the Board has been clear that it will exercise its well-established
discretion to give little weight to conclusory, unsupported expert testimony, such
as testimony that d[oes] not elaborate on [the Petitioners] position because it
simply repeat[s the Petitioners] conclusory statements verbatim. TRW
Automotive US LLC v. Magna Elecs., Inc., IPR2014-00258, Paper 18 at 10-11
(Aug. 27, 2014); see also Apple Inc. v. Smartflash LLC, CBM2014-00111, Paper 7
at 21 (Sept. 30, 2014) (denying institution where the expert declaration simply
reiterates [the Petitioners] contentions and conclusory reasoning). Celgene
submits that the Board should do the same here.
2.
The Petition Fails To Address The Redundancy

With The 1096, 1102 And 1103 Petitions
As an initial matter, the grounds and references in this Petition are redundant
to those made by Petitioner in IPR2015-01096 and IPR2015-01102. In Ground 2
of IPR2015-01096, CFAD relies on the July 1998 Thalomid PI, in combination
with Cunningham, as a secondary reference with respect to the limitations of
claims 1-32. See IPR2015-01096 Pet. at 11, 51-60. In Ground 1 of IPR201501102, CFAD relies on Powell and Dishman, in combination with Cunningham,
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with respect to the limitations of claims 1-32. See IPR2015-01102 Pet. at 11, 1744. Here, CFAD relies on Mitchell, in combination with Dishman and
Cunningham, with respect to the limitations of claims 1-32. Pet. at 11, 17-45.
While CFAD relies on different primary references, CFADs explanations of the
alleged disclosures of the references in this Petition are substantially the same as
CFADs explanations of the alleged disclosures of the references in Ground 2 of
IPR2015-01096 and in Ground 1 of IPR2015-01102.
The use of redundant references and arguments in multiple IPR petitions
contradicts regulatory and statutory mandates, and the Board has indicated that it
will not consider such grounds. See, e.g., Liberty Mut. Ins. Co. v. Progressive Cas.
Ins. Co., CBM2012-00003, Paper 7 at 1-2 (Oct. 25, 2012). Redundant grounds
impose a significant burden on the Board and the patent owner, and cause
unnecessary delay that jeopardizes completion by the statutory deadline. Id. at 2.
Because [t]he Board seeks to streamline and converge issues at all phases
of the proceeding . . . at [the] time of institution the Board analyzes the petition on
a claim-by-claim, ground-by-ground basis, to eliminate redundant grounds. Idle
Free Sys. v. Bergstrom, Inc., IPR2012-00027, Paper 26 at 4-5 (June 11, 2013).
The redundancy inquiry does not focus on whether the applied prior art
disclosures have differences, for it is rarely the case that the disclosures of different
prior art references, will be literally identical. EMC Corp. v. Personal Web
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Techs., LLC, IPR2013-00087, Paper 25 at 3 (June 5, 2013). Instead, the
redundancy inquiry focuses on whether the petitioner articulated a meaningful
distinction in terms of relative strengths and weaknesses with respect to application
of the prior art disclosures to one or more claim limitations. Id. at 3-4. The
burden is on the petitioner to articulate such a meaningful distinction. ScentAir
Techs., Inc. v. Prolitec, Inc., IPR2013-00180, Paper 18 at 3 (Aug. 26, 2013).
CFAD does not articulate any relative strengths or weaknesses of its
multiple grounds, shed light on how any of the proposed obviousness combinations
improves on any of the other combinations, or explain why one primary reference
is better or worse than another. CFAD has thus failed to identify a meaningful
distinction among the alleged prior art combinations as applied to the claims. See
LaRose Indus., LLC v. Capriola Corp., IPR2013-00120, Paper 20 at 4 (July 22,
2013). Thus, the Board should not consider more than one alleged ground for each
of the challenged claims in the event that a trial is instituted.
3.
Ground 1: The Claimed Inventions Would Not Have Been

Obvious Over Mitchell, Dishman, and Cunningham
CFADs Ground 1 lacks merit because CFAD: (1) fails to address both the
claims and the prior art as a whole; (2) does not identify a colorable motivation to
combine or modify the cited art; and (3) cannot show that the prior art disclosed,
taught, or suggested each and every element of the challenged claims.
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(a)
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CFAD Fails To Address Both the

Claims and the Prior Art As a Whole
CFADs obviousness analysis is improper because it fails to address both the

claims and prior art as a whole. [A] patent composed of several elements is not
proved obvious merely by demonstrating that each of its elements was,
independently, known in the prior art. KSR Intl Co. v. Teleflex Inc., 550 U.S.
398, 418 (2007). Indeed, [i]f identification of each claimed element in the prior
art were sufficient to negate patentability, very few patents would ever issue. In
re Rouffet, 149 F.3d 1350, 1357 (Fed. Cir. 1998). CFAD ignores this well settled
principal of patent law. Rather, with hindsight, CFAD parses each individual
element of the challenged claims for the purpose of identifying corresponding
portions of the prior art that allegedly suggest that element to a POSA. Not once
does CFAD address the combination of claim elements as a whole. For this reason
alone, its obviousness ground should be denied.
The law also requires that CFAD consider the prior art as a whole, including
teachings that point away from the claimed inventions. See Leo Pharm. Prods. v.
Rea, 726 F.3d 1346, 1355 (Fed. Cir. 2013). As described below, CFAD also fails
to conduct this critical analysis. Instead, CFAD picks and chooses only those
portions of the prior art that allegedly support its position. For this additional
reason, CFADs obviousness analysis is legally flawed and should be rejected.
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CFAD Has Not Provided A Motivation To
Combine Mitchell With Dishman or Cunningham
CFADs Petition should also be denied because it does not explain how the
teachings of the references would be arranged or combined by a POSA, or why a
POSA would have made such a combination without the benefit of hindsight. A
Petitioner must show some reason why a [POSA] would have thought to combine
particular available elements of knowledge, as evidenced by the prior art, to reach
the claimed invention. Heart Failure Techs., LLC v. Cardiokinetix, Inc.,
IPR2013-00183, Paper 12 at 9 (July 31, 2013). Indeed, obviousness cannot be
sustained by mere conclusory statements; instead, there must be some articulated
reasoning with some rational underpinning to support the legal conclusion of
obviousness. In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006).
The Board has repeatedly denied institution where a petitioner fails to
demonstrate that it would have been obvious to combine or modify references,
holding that conclusory or general statements regarding the reasons to combine or
modify references are insufficient. See, e.g., TRW Auto. US LLC v. Magna Elecs.
Inc., IPR2014-00293, Paper 19 at 17 (July 1, 2014); Moses Lake Indus. v. Enthone,
Inc., IPR2014-00243, Paper 6 at 20 (June 18, 2014); Biodelivery Sci. Intl, Inc. v.
Monosol Rx, LLC, IPR2015-00167, Paper 6 at 26-27 (May 20, 2015). Absent an
articulated reasoning with a rational underpinning to support the legal conclusion
of obviousness, CFAD fails to establish a prima facie case of obviousness. See
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TRW Auto. US LLC v. Magna Elecs., IPR2014-00257, Paper 16 at 7, 12 (June 26,
2014) (denying petition where Petitioner failed to set forth motivation to combine).
Here, CFAD has not provided any analysis that supports a motivation to
combine Mitchell, Dishman, and Cunningham. Its arguments should be rejected
because they: (1) are rooted in hindsight, using the 720 patents disclosures and
the inventors own path as their basis to combine the references; (2) fail to account
for the fact that the references are directed to entirely different endeavors and also
teach away from the claimed inventions; and (3) ignore that there can be no
motivation to combine because the prior art does not disclose each and every
element of the claimed inventions.
First, CFAD improperly uses the 720 patents disclosures and the
inventors own path as its basis to combine the references. Specifically, CFAD
alleges that a POSA: (a) would look to Mitchell for guidance on an approach
that seeks to keep the drug available while minimizing the . . . hazard, and would
garner from its recommendations for delivering a drug to a patient in need of the
drug, while avoiding the occurrence of an adverse side effect known or suspected
of being caused by said drug (Pet. at 18 (quoting Ex. 1027 at 76)) (emphasis
added); and then (b) once [a]rmed with the disclosure of Mitchell . . . would have
been motivated to look to the system disclosed in Dishman to further implement a
computerized registry for delivering a drug to a patient in need of the drug,
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while avoiding the occurrence of an adverse side effect known or suspected of
being caused by said drug. Pet. at 21 (quoting Ex. 1001 at 18:16-18) (emphasis
added).
CFAD admits, however, that the emphasized language is from the 720
patents preamble. Id.; Ex. 1001 at 18:17-19. Thus, CFAD defin[es] the nature of
the problem to be solved as the specific problem solved by the
invention . . . [CFAD] has relied on impermissible hindsight to supply the reason
to combine. Purdue Pharma L.P. v. Depomed, Inc., IPR2014-00379, Paper 72 at
28 (July 8, 2015); see also Texas Instruments Inc. v. Vantage Point Tech. Inc.,
IPR2014-01105, Paper 8 at 17 (Jan. 5, 2015) (finding it impermissible to use the
challenged patents description of the invention as a roadmap to piece together the
prior art). As such, its argument lacks merit.3
CFADs argument also fails because it relies on the inventors own path.
Specifically, CFAD argues that a POSA did look to the same isotretinoin system
3
Moreover, the only support for CFADs conclusory argument is its experts
recitation of the same conclusory statement without the rational underpinning

required to establish obviousness. See Pet. at 21 (citing Ex. 1027 at 88.) Dr.
Fudins opinion should be given little to no weight because it d[oes] not elaborate
on [CFADs] position because it simply repeat[s CFADs] conclusory statements
verbatim. TRW Auto., IPR2014-00258, Paper 18 at 10.
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described in Mitchell with respect to the 720 Patent based on statements made by
one of the 720 patents inventors. Pet at 21. But CFAD has not presented any
evidence that the 720 patents inventors are a POSA under CFADs definition or
otherwise. In fact, the inventors are not pharmacists and, therefore, would not fall
under CFADs definition of a POSA. Further, it is well settled that the thought
process of the inventor is not evidence of what would have been known or done by
a POSA. See Interconnect Planning Corp. v. Feil, 774 F.2d 1132, 1138 (Fed. Cir.
1985). Thus, CFADs hindsight-driven motivation argument should be rejected.
Second, CFAD fails to account for the fact that the prior-art references are
directed to completely different endeavors and also teach away from the claimed
inventions. Specifically, CFAD ignores that a POSA would not have been
motivated to combine Dishman with Mitchell because Dishman is not directed to
the same endeavor as Mitchella system designed to prevent exposure of a drug
to a fetus and thus, fetal birth abnormalities. Further, a POSA looking to develop a
system for universal use would not find a distribution system isolated to the
Department of Veteran Affairs (as Dishman is) to be particularly instructive. In
that regard, the risks associated with commercial pharmacy distribution of a
teratogenic drug are far more complex, and require different management, than
distribution to a small group of individuals at the Department of Veterans Affairs.
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Furthermore, even if a POSA would look to the system disclosed in
Dishman, they would not ignore the prior art as a whole, which teaches away from
the Clozaril system discussed in Dishman because the system, as a whole, was a
failure. See supra at II.B. As such, a POSA would have been taught away from
combining Dishman with other references, including Mitchell or Cunningham. A
reference that teaches away cannot serve as a basis for obviousness. See In re
Gurley, 27 F.3d 551, 553 (Fed. Cir. 1994). A reference may be said to teach
away when a [POSA], upon reading the reference, would be discouraged from
following the path set out in the reference, or would be led in a direction divergent
from the path that was taken by the applicant. Id. That is exactly what Dishman
does.
A POSA also would understand that Cunningham is directed to a completely
different endeavor than Mitchell and Dishman. Specifically, Cunningham is
directed to reducing monetary costs associated with providing free pharmaceutical
drug samples to patients for marketing purposes, and making sure pharmacies are
credited and replenished when they provide the free samples. Cunningham is not
related in any way to restricted distribution of pharmaceutical drugs, does not
address assessing risks associated with pharmaceuticals, and is not related to
preventing the occurrence of adverse events, let alone teratogenic side effects. A
POSA would have no reason to look to Cunningham.
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Further, patient information is not collected for the system disclosed in
Cunningham, nor is the patient registered in that system. The only reason that
CFAD cites Cunningham is because it uses the same wordsapproval codeas
the claimed inventions. In fact, CFAD concedes that a POSA would only look for
the approval code required by the challenged claims once armed with the
disclosures of the 720 patent. Pet. at 22-23. This is hindsight, and demonstrates
that there would have been absolutely no motivation for a POSA to combine the
cited references. See Texas Instruments, IPR2014-01105, Paper 8 at 17.
Finally, a POSA would have been taught away from combining the
Accutane system described in Mitchell with any other prior art because it too was a
failure. Specifically, Mitchell discloses that compliance with the program was not
complete and, as a result, there were hundreds of pregnancies during isotretinoin
treatment, at least six of which resulted in liveborn infants with fetal birth defects.
See supra at II.B. CFAD ignores these additional reasons that a POSA would not
have been motivated to combine Mitchell, Dishman, and Cunningham.
Third, CFAD ignores that there can be no motivation to combine the
references because the prior art does not disclose each and every element of the
claimed inventions. Specifically, the Federal Circuit has instructed that motivation
to combine is only a consideration if all the elements of an invention are found in
a combination of prior art references. Medichem, S.A. v. Rolabo, S.L., 437 F.3d
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1157, 1164 (Fed. Cir. 2006). As discussed below, the prior art does not disclose all
of the elements of the challenged claims. CFAD has failed to meet its burden of
showing a motivation to combine for this additional reason.
For the foregoing reasons, CFAD has failed to set forth a motivation to
combine the prior art as set forth in Ground 1. Its Petition should be rejected.
(c)
The Ground 1 References Fail To Disclose, Teach, or

Suggest Key Elements of the Claimed Inventions
CFAD relies on Mitchell, Dishman, and Cunningham as teaching the

elements of the 720 patent. None of these references, however, disclose, teach, or
suggest all of the elements of the claimed subject matter, and certain elements are
missing from every reference. CFAD relies only on attorney argument, its experts
unsupported and conclusory statements, and impermissible hindsight to attempt to
correct the deficiencies in the prior art. CFAD falls far short of showing a
reasonable likelihood that the challenged claims are obvious.
i.
Claim 1 Would Not Have Been Obvious

Over Mitchell, Dishman, And Cunningham
1)
Element 1(c)
CFAD incorrectly argues that Mitchell and Dishman disclose in response to

said information set, assigning said patient to at least one of said risk groups and
entering said risk group assignment in said medium. See Pet. at 19-22.
First, CFAD argues that Mitchell teaches a patient-qualification checklist
for assigning patients to [] risk groups . . . includ[ing], for example, women of
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childbearing age and women who were at high risk of becoming pregnant. Pet.
at 19-20. Not so. Mitchell merely references the PPPs patient-qualification
checklist, without elaborating on what it entailed. See Ex. 1010 at 101. Further,
while Mitchell teaches that the PPP included women of child bearing age and who
were at a high risk of becoming pregnant, it does not teach that these women were
assigned to risk groups in order to conduct a prospective risk analysis as required
by claim 1. In fact, Mitchell admits that this prospective risk analysis did not occur
and that there were high levels of noncompliance and many pregnancies in the
voluntary PPP. See, e.g. Ex. 1010 at 104. Thus, CFADs and Dr. Fudins
conclusory argument that a POSA would understand that a prescriber would
assign a patient to [Mitchells] various risk groups, as in the first portion of Claim
1(c) (Pet. at 20; Ex. 1027 at 82-83), is unsupported, and entitled to little or no
weight. See TRW Auto., IPR2014-00258, Paper 18 at 10.; 37 C.F.R. 42.65(a).
Second, CFAD admits that Mitchell does not disclose entering said risk
group assignment in said [computer readable storage] medium. See Pet. at 20.
Yet it argues that because Mitchell published the aggregated patient risk group
information collected, it would have been obvious to [a POSA] that Mitchell
inherently entered the risk group information in a computer readable storage
medium. Id. (quoting Ex. 1027 at 86). As an initial matter, the only alleged
support for CFADs conclusory inheren[cy] argument is its experts
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unsupported, nearly verbatim opinion. CFADs argument is entitled to little to no
weight for this reason alone. See TRW Auto., IPR2014-00258, Paper 18 at 10; 37
C.F.R. 42.65(a). Further, as explained above, Mitchell does not disclose any
risk group assignment[s]. And, as CFAD correctly notes, Mitchells records
were kept for a survey to determine the effectiveness of the PPP. These records
had nothing to do with assigning risk groups to conduct a prospective risk analysis
with the computer readable storage medium as set forth in claim 1. CFADs
argument is based on impermissible hindsight.
Third, CFAD argues that Dishman discloses storage of the patients
clinical and demographic information on a computer readable storage medium
and that a POSA would have understood . . . that this computerized system must
include a patients risk group assignment data in order to determine which
prescriptions should be locked out. Pet. at 22 (quoting Ex. 1027 at 91).
Again, the only support asserted for CFADs conclusory argument is its experts
verbatim, unsupported opinion. CFADs argument is entitled to little to no weight
for this reason alone. See TRW Auto., IPR2014-00258, Paper 18 at 10; 37 C.F.R.
42.65(a). Moreover, Dishman does not disclose, teach, or suggest any risk
groups, let alone lock[ing] out prescriptions based on risk groups. Instead,
the lock out system in Dishman is designed to monitor if there are three
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consecutive drops in the WBC count. Ex. 1007 at 900. This has nothing to do
with risk group assignments. CFADs argument is entirely hindsight driven.
Accordingly, for the foregoing reasons, CFAD has failed to show that its
cited references disclose, teach, or suggest Element 1(c).
2)
Element 1(d)
CFAD argues that Mitchell discloses Element 1(d): based upon said
information and said risk group assignment, determining whether the risk that said
adverse side effect is likely to occur is acceptable. Pet. at 19. CFADs argument,
however, is based on the assertion that Mitchell teaches a patient-qualification
checklist for assigning patients to [] risk groups (see Pet. at 19-20 (citing Ex.
1027 at 79,94), which as explained above, is incorrect.
Moreover, even if Mitchell did disclose risk group assignments (it does not),
CFADs argument does not provide any discussion or explanation as to how
Mitchells risk groups disclose, teach, or suggest the affirmative step of
determining whether the risk that said adverse effect is likely to occur is
acceptable. CFADs argument fails for this additional reason. CFAD has failed
to show that its cited references disclose, teach, or suggest Element 1(d).
3)
Element 1(e)
CFAD makes three arguments regarding why Dishman and Cunningham

allegedly teach Element 1(e): upon a determination that said risk is acceptable,
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generating a prescription approval code to be retrieved by said pharmacy before
said prescription is filled. See Pet. at 22-25. Each argument fails.
First, CFAD argues that Dishmans disclosure of clozapine dispensing only
upon the pharmacists verification that a patients white blood cell count is within
an acceptable limit would have rendered the concept of an approval code
obvious. Id. at 22-23. Not so. Dishman does not disclose, teach, or suggest a
pharmacy retrieving an approval code to prospectively control the risk of an
unacceptable side effect. CFAD does not provide any support for its conclusory
assertion, and its reliance on Dr. Fudins declaration (id. (citing Ex. 1027 at 9596)) is entitled to little or no weight because Dr. Fudin simply repeats CFADs
conclusory argument. See TRW Auto., IPR2014-00258, Paper 18 at 10.
Second, CFAD argues that the 720 patents disclosure that [s]uitable
computer readable storage media . . . will be apparent to one of ordinary skill in the
art, once armed with the teachings of the present application, would have made
it obvious to a POSA to use an approval code to implement Dishmans lockout
system. Pet. at 23 (citing Ex. 1027 at 97). CFADs argument here is backwards;
it is using the 720 patents disclosure to argue that Dishmans lockout system is
obvious. Whether or not a POSA would be motivated to use the 720 patents
approval code to implement Dishman is irrelevant to whether or not the 720
patents approval code to prospectively control the risk of an adverse side effect is
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obvious in light of Dishmans lockout system. The 720 patents approval code
was not known before the 720 patents priority date, and CFADs reliance on the
720 patents disclosure is impermissible hindsight. See InTouch Techs., Inc. v.
VGo Commcns, Inc., 751 F.3d 1327, 1351-52 (Fed. Cir. 2014). Moreover, CFAD
has not identified any design need or market pressure, or a finite number of
identified, predictable solutions, to support its argument that a POSA would have
been motivated to use the 720 patents approval code to implement Dishmans
lockout system. See Pet. at 23 (citing Ex. 1027 at 92 and Bayer Schering Pharma
AG v. Barr Labs., Inc., 575 F.3d 1341, 1347 (Fed. Cir. 2009)).
Third, recognizing that Dishman does not disclose the claimed approval
code, CFAD turns to Cunningham. Specifically, CFAD argues that it would have
been obvious to utilize the claim 1(e) approval code to implement Dishmans
lockout system in light of Cunninghams disclosure. Pet. 23-24. Again, CFAD
makes the irrelevant argument that the 720 patents approval code renders
Dishman obvious. This does not render Element 1(e) obvious.
Moreover, as discussed above, Cunningham is directed to reducing costs
associated with providing free pharmaceutical samples, and Cunninghams
approval code is in no way tied to a prospective determination that the risk of
adverse events is acceptable, as required by claim 1. Specifically, Cunningham
does not consider any patient information, nor has CFAD even attempted to
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explain how patient information could be incorporated into Cunninghams system.
Cunninghams process is unrelated to the claimed method.
Further, CFAD ignores that the Examiner of the 720 patent considered a
divisional application with the same specification as Cunningham, and similar
approval code arguments based on Boyer (Ex. 1005), and found they did not
disclose, teach, or suggest Element 1(e). See generally Ex. 1002; see supra at II.C.
CFAD presents no basis to make a contrary finding here.
For the foregoing reasons, CFAD has failed to show that there is a
reasonable likelihood that claim 1 is obvious.
ii.
Dependent Claims 227 Would Not Have Been

Obvious Over Mitchell In View Of Dishman
And The Knowledge Of a POSA
Because CFAD has failed to show that there is a reasonable likelihood that
claim 1 is obvious, it also has failed to show that there is a reasonable likelihood
that any of claims 2-27, which depend from claim 1, are obvious. See In re Fine,
837 F.2d 1071, 1076 (Fed. Cir. 1988) (holding that a dependent claim that depends
from a non-obvious independent claim is also nonobvious). CFAD has also failed
to show that there is a reasonable likelihood that claims 5, 6, 9, 10, 13, 14, 17-19,
and 23-25 are obvious for further reasons.
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1)
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Claim 5
CFAD argues that Mitchell and Dishman teach claim 5s additional

limitation that said risk group assignment and informed consent is verified by said
prescriber at the time that said patient is registered in said computer readable
storage medium. Its arguments lack merit.
First, CFAD argues that because Mitchell discloses the screening of
enrollment forms, it would have been obvious that a doctor would have verified
a patients informed consent and risk group assignment when registering the
patient in the database. Pet. at 27. This argument makes no sense. The
enrollment forms disclosed in Mitchell related to patient enrollment into the
voluntary survey designed to assess compliance with [Accutanes distribution]
program, which is the subject of Mitchell, not the enrollment forms for the
distribution program itself. See Ex. 1010 at 101. Mitchell does not disclose, teach,
or suggest risk group assignments, registering a patient in a computer readable
storage medium, or a prescriber verifying the risk group assignment and informed
consent at the time of registration. CFADs bare assertion that a doctor should
verify the requirements for treatment when registering the patient because the
enrollment forms were screened on receipt to exclude enrollments that were
apparently fraudulent, men, and previously enrolled women (see Pet. at 27, citing
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nearly verbatim the Fudin Decl., Ex. 1027 at 107-08), is conclusory and
incorrect.
Second, CFAD argues that Dishmans disclosure of patient screening
teaches claim 5s additional limitation. As an initial matter, CFAD provides no
explanation for why patient screening equates to verifying a patients informed
consent and risk group assignment. Regardless, Dishman does not disclose, teach,
or suggest risk group assignments or a prescriber verifying the risk group
assignment at the time of registration. And even if screening patients did equate
to verifying the risk group assignment and informed consent, Dishman teaches
that the pharmacist, not the prescriber, screens the patient to specifically ensure[]
that the physician does not waste time evaluating patients. See Pet. at 27 (quoting
Ex. 1007 at 900). As such, it would teach away from the claimed invention.
CFAD cannot meet its burden on claim 5 for these additional reasons.
2)
Claim 6
CFAD argues that claim 6s additional limitation that the said risk group
assignment and said informed consent is transmitted to said computer readable
storage medium by facsimile and interpreted by optical character recognition
software is obvious based on: (1) Dishmans teaching of faxing patient
evaluations to the NCCC; and (2) a POSAs knowledge to transfer paper data into
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a computer database by fax, which is then interpreted by optical character
recognition [OCR] software. Pet. at 28 (quoting Ex. 1027 at 114).
The only support for CFADs conclusory argument is its experts
unsupported, nearly verbatim opinion. See id. CFADs argument is entitled to
little or no weight (see 37 C.F.R. 42.65(a)), and cannot establish obviousness,
especially here, where the claimed elements are clearly not found in the prior art.
3)
Claim 9
CFAD argues that claim 9s additional limitation that diagnostic testing is

probative of the concentration of said drug in a tissue of said patient is obvious
based on the extensive diagnostic testing taught by Mitchell and Dishman. Pet.
at 29. Mitchell and Dishman, however, do not disclose, teach, or suggest such
testing. See generally Ex. 1007; Ex. 1010; see also Pet. at 29 (describing testing).
Recognizing this deficiency, CFAD next argues, relying on only the Fudin
Declaration, that: (1) it is obvious to conduct testing of a patients tissue to
determine the concentration of a drug in any patient who received that drug; and
(2) because many drugs are preferably absorbed in tissue, as opposed to uniformly
in blood or serum, a POSA would understand the importance of performing testing
of the concentration of such a non-uniformly distributed drug in the drugs target
tissues. Pet. at 30 (citing Ex. 1027 at 122-123). Dr. Fudins opinions are
entirely unsupported and entitled to little or no weight. See 37 C.F.R. 42.65.
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CFADs argument is based on nothing more than its attorneys and experts
say-so, and should be rejected. The additional limitation of claim 9 is not

disclosed in the prior art, and CFAD therefore cannot prove obviousness. See 37
C.F.R. 42.104(b)(4); see also Toshiba Corp. v. Optical Devices, LLC, IPR201401446, Paper 7 at 16 (Mar. 10, 2015) (finding that Petitioner failed to show a
reasonable likelihood of proving a challenged claim obvious when it failed to
supply a prior art reference demonstrating a claimed feature).
4)
Claim 10
Similar to claim 9, CFAD fails to demonstrate where Dishman or Mitchell

disclose, teach, or suggest the additional limitation of claim 10 that said
diagnostic testing comprises genetic testing. Instead, CFAD once again merely
cites to Dr. Fudins conclusions that it would have been obvious to a POSA to
include genetic testing. See Pet. at 30. Mitchell and Dishman do not disclose,
teach, or suggest genetic testing, and Dr. Fudins unsupported opinions are entitled
to little or no weight. See 37 C.F.R. 42.65(a). The additional limitation of claim
10 is not disclosed in the prior art, and CFAD cannot prove obviousness. See 37
C.F.R. 42.104(b)(4); Toshiba , IPR2014-01446, Paper 7 at 16.
5)
Claims 13, 14, 23-25
Each of claim 13, 14, and 23-25 claims avoiding a side effect arising in a
recipient, or a fetus carried by a recipient, of the bodily fluid of the drug-receiving
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patient. CFAD does not argue that any of its cited references disclose, teach, or
suggest such a situation. Instead, CFAD improperly relies on two external
references (Exs. 1018-1019) to argue that it was obvious that thalidomide was
likely to cause side effects either in a sexual partner of a male being treated with
the drug as in Claims 14, 24, and 25, or in the fetus of this sexual partner as in
Claims 13 and 23. Pet. at 33.
As an initial matter, Exs. 1018-1019 are not asserted in CFADs ground of
unpatentability and its argument based on these references should be rejected for
this reason alone. See Boehringer Ingelheim Intl v. Biogen, Inc., IPR2015-00418,
Paper 14 at 17 (July 13, 2015) (citing 37 C.F.R. 42.104(b)(2)). In addition,
CFAD has failed to articulate any reason to look to these two additional references
or any motivation to combine these references with the references asserted in
Ground 1. CFADs arguments fail for this additional reason. See Norman Intl,
Inc. v. Hunter Douglas Inc., IPR2014-00276, Paper 11 at 20 (June 20, 2014)
(denying institution and stating that the motivation to combine analysis should be
made explicit).
Moreover, CFAD ignores that Powell (which CFAD relies on in IPR201501102) teaches away from controlling side effects of a drug that arise in a
recipient, or a fetus carried by a recipient, of the bodily fluid of the drug-receiving
patient. Specifically, contrary to Exs. 1018 and 1019, Powell teaches that, with
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respect to thalidomide, [n]o effects on male sperm are recognized. Ex. 1006 at
903. This disclosure teaches away from claims 13, 14, and 23-25.
6)
Claim 17
Claim 17 requires that the survey regarding a patients behavior and

compliance with the risk avoidance measures is conducted telephonically using an
integrated voice response system. CFAD does not argue that any of its Ground 1
references disclose, teach, or suggest claim 17s additional limitation. Instead,
CFAD cites, but does not discuss, the Mundt reference (see Pet. at 38 (citing Ex.
1017)) to argue that conducting surveys by telephone was well known to a POSA.
This is improper (see Boehringer, IPR2015-00418, Paper 14 at 17; 37 C.F.R.
42.104(b)(2); 37 C.F.R. 42.6(a)(3)), and does not correct the deficiencies in the
prior art. CFAD does not provide any explanation for why a POSA would have
looked to Mundt or combined Mundt with Mitchell and Dishman, or why using an
integrated voice response system would have otherwise been obvious over Mundt
or any other prior art reference. CFAD cannot meet its burden on claim 17 for
these additional reasons.
7)
Claims 18 and 19
Claims 18 depends from claim 15 and requires that the second set of
information, to be collected and entered on a periodic basis before the patient is
approved to receive the drug, comprises the results of a pregnancy test. Claim
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19 requires that the periodic basis is about 28 days. CFAD asserts Mitchell and
Dishman against these claims, but admits that neither reference teaches requiring
periodic pregnancy tests before prescribing the next cycle of drugs. Pet. at 40.
Notwithstanding this deficiency in the prior art, CFAD argues that it would have
been obvious to a POSA to apply Mitchells requirement for excluding pregnancy
to Dishmans weekly WBC tests to arrive at the claimed invention. Id. Each of
CFADs specific arguments is flawed.
CFAD first contends that Mitchell teaches obtaining periodic pregnancy
test results because the the survey covered the treatment period and the
subsequent six months, and the authors asked about the occurrence of pregnancy
during or after treatment. Pet. at 39. CFAD is incorrect for several reasons.
First, collecting data on the occurrence of pregnancy during or after treatment is
not the same as obtaining periodic pregnancy test results while a patient is in
treatment. Second, the survey in Mitchell did not require periodic pregnancy test
results to be obtained from patients. Third, the PPP described in Mitchell did not
require periodic pregnancy testing. Mitchell does not support CFADs argument.
CFAD next cites Dishmans disclosure that contraindications to clozapine
therapy include pregnancy sin support of its allegation that it would have been
obvious to a POSA to also require a mid-treatment pregnancy test for Dishmans
clozapine patients upon a missed period. Pet. at 39-40 (citing the nearly verbatim
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Fudin Decl., Ex. 1027 at 167). However, CFAD and its expert do not provide
any reason or support for this argument. Thus, CFADs experts statement is
entitled to little or no weight (see 37 C.F.R. 42.65(a); Ashland Oil, Inc., 776 F.2d
at 294), and CFADs related argument should be rejected.
Further, CFAD ignores that a POSA would not be motivated to combine
Dishman and Mitchell because a pregnancy test and WBC count are completely
different tests given with different frequency. Likewise, measuring WBC counts is
completely unrelated to attempting to prevent teratogenic side effects or birth
defects. Further, the prescription in Dishman can still be filled unless the computer
notices three consecutive drops in WBC count, and any subsequent lockout can be
overridden. Ex. 1007 at 900. This teaches away from the invention claimed in the
720 patent, which seeks to prevent even one exposure that could lead to lifethreatening adverse effects and birth defects. CFAD cannot meet its burden on
claims 18 and 19 for these additional reasons.
iii.
Independent Claim 28 And Dependent Claims

2932 Would Not Have Been Obvious Over
Mitchell In View Of Dishman In Further View
Of Cunningham And Knowledge Of a POSA
Claim 28 is identical to claim 1 but for the additional limitation: wherein

said adverse side effect is likely to arise in patients who take said drug in
combination with at least one other drug. Accordingly, for the reasons set forth
above with regard to claim 1, CFAD has failed to show there is a reasonable
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likelihood that claims 28 and 29-32 are obvious. CFAD has further failed to meet
its burden on these claims for the reasons discussed below.
1)
Claim 28
CFADs sole argument with regard to claim 28 is the conclusory assertion

that it would have been obvious to a POSA that the adverse effects described in
Mitchell and Dishman would also arise in patients taking medications in
combination with isotretinoin or clozapine. Pet. at 42 (citing Ex. 1027 at 175).
Neither CFAD nor Dr. Fudin provides any explanation or objective support for this
statement, and neither Mitchell nor Dishman mention the use of other drugs.
CFADs argument is entirely baseless, rooted in hindsight, and should be rejected
for this additional reason.
2)
Claims 29-32
Claims 29-32 depend from claim 28 and are thus not obvious for the reasons
set forth above regarding claims 1 and 28. Moreover, neither Mitchell nor
Dishman mention the use of other drugs in combination with isotretinoin or
clozapine, or the use of diagnostic testing for evidence of drug use. Thus, claim
29, which requires that the set of information is probative of the likelihood that a
patient may take the drug and another drug in combination, and claim 31, which
requires diagnostic testing for the use of other drugs, are not obvious over Mitchell
and Dishman for this additional reason.
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Attempting to fill in the holes, CFAD improperly relies on seven external
references that discuss drug-drug interactions (Exs. 1020-1022), or that relate to

substance abuse in general or among schizophrenics (Exs. 1023-1026). Pet. at 4244. These references are not asserted in CFADs ground of unpatentability and
they should not be considered. See Boehringer, IPR2015-00418, Paper 14 at 17;
37 C.F.R. 42.104(b)(2). In addition, CFAD has failed to articulate any reason to
look to these references or any alleged motivation to combine these references with
the references asserted in Ground 1. CFADs obviousness arguments regarding
these dependent claims fail for this additional reason. See Norman, IPR201400276, Paper 11 at 20.
Moreover, CFADs attempt to use substance abuse in the schizophrenic
population as a reason why it would have been obvious to test for the regimens
contraindicated substance abuse by screening for the presence of alcohol and other
drugs (Pet. at 44) fails for at least two reasons.
First, the contraindications disclosed in Dishman do not include the use of
other drugs; the NCCC only recommends that clozapine not be used in patients
who, because of substance abuse, cannot be relied upon to keep follow-up
appointments. Ex. 1007 at 900. Second, despite the fact that Dishman recognized
the potential for substance abuse in the schizophrenic population, Dishman did not
disclose, teach, or suggest the use of diagnostic testing for evidence of other drugs.
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The additional limitations of claims 29-32 are not disclosed in the prior art, and
CFAD cannot prove obviousness. See 37 C.F.R. 42.104(b)(4); Toshiba ,
IPR2014-01446, Paper 7 at 16.
For the foregoing reasons, CFAD has failed to show that there is a
reasonable likelihood that claims 28-32 are obvious.
4.
CFAD Fails To Address The Objective Evidence of

Nonobviousness Regarding the 720 Patent
Objective indicia of nonobvious are not just a cumulative or confirmatory

part of the obviousness calculus but constitute[] independent evidence of
nonobviousness. Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358,
1365 (Fed. Cir. 2008). In fact, the Federal Circuit has observed that objective
indicia can be the most probative evidence of nonobviousness in the record, and
enable[] the . . . court to avert the trap of hindsight. Crocs, Inc. v. Intl Trade
Commn, 598 F.3d 1294, 1310 (Fed. Cir. 2010). Here, CFAD does not address or
challenge the merits of Patent Owners secondary consideration evidence, and
thus its petition fails for this additional reason. Omron Oilfield & Marine, Inc. v.
MD/Totco, IPR2013-00265, Paper 11 at 16 (Oct. 31, 2013).
(a)
Long-felt Need Further Supports The

Nonobviousness Of The Claimed Inventions
The existence of a long-felt and unsolved need for the patented inventions
supports a finding of nonobviousness. See Georgia-Pacific Corp. v. U.S. Gypsum,
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195 F.3d 1322, 1330 (Fed. Cir. 1999). Prior to the development of the patented
inventions, there was a need for a prospective system that controlled the risk of
adverse side effects (such as birth defects of the type associated with thalidomide)
before the patient received the drug. Celgene developed Enhanced S.T.E.P.S.,
which is covered by the methods claimed in the 720 patent, to address that need.
Without the inventions of the 720 patent, Thalomid, Revlimid, and Pomalyst
would not be subject to strict patient access controls before the patient receives the
drug. This prospective risk analysis improves upon Celgenes earlier inventions
(described in the 501 patent), which only retrospectively checked for risks
associated with harmful drugs like thalidomide. Accordingly, the inventions
claimed in the 720 patent provided a way for patients in need to receive valuable,
life-altering treatments, including cancer treatments.
The need for the therapies provided by Thalomid, Revlimid, and
Pomalyst is evidenced by the fact that the FDA granted Orphan Drug Exclusivity
to each product for meeting an unmet need felt by relatively small, untreated
patient populations. Ex. 2018; Ex. 2019; Ex. 2020. Moreover, all three drugs were
approved under accelerated approval regulations during the FDA approval process
so that they could reach patients in need faster. See, e.g., Ex. 2010 at 1-2; Ex. 2011
at 1; Ex. 2012 at 1.
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Of course, as noted above, none of these approvals would have been
possible without the inventions claimed in the 720 patent, which ultimately were
required as conditions for approval by the FDA. See Ex. 1031 at 0002; Ex. 2010 at
1; Ex. 2011 at 1; Ex. 2012 at 7-10 (discussing the drugs approvals subject to
Subpart H). The problems associated with safe access to teratogenic drugs
addressed by the claimed inventions were not solved by the prior-art Clozaril and
Accutane systems. Instead, those problems were solved by Celgenes invention of
S.T.E.P.S. (described in the 501 patent), and the improvements provided by
Enhanced S.T.E.P.S. (described in the 720 patent) further safeguarded the
publics access to teratogenic drugs. The FDAs grant of ODE and accelerated
approval for these drugs, which contain actual or potential teratogens, also
demonstrates the faith that the FDA placed in the inventions claimed in the 720
patent, which represent the gold standards in pharmaceutical risk management.
(b)
Commercial Success Further Supports The

Commercial success is usually shown by significant sales in a relevant

market. J.T. Eaton & Co. v. Atl. Paste & Glue Co., 106 F.3d 1563, 1571 (Fed.
Cir. 1997); see also Neupak, Inc. v. Ideal Mfg. & Sales Corp., 41 F. Appx 435,
440 (Fed. Cir. 2002) ([S]ales figures alone can provide satisfactory evidence of
commercial success.).
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Here, commercial success of the patented inventions is evidenced by the
sales of Thalomid, Revlimid, and Pomalyst, which together have annual U.S.
revenues of billions of dollars. See Ex. 2021 at 62. Each sale of these drugs is
made pursuant to, and is only possible as a result of, a restricted distribution or
REMS program that is covered by one or more claims of the 720 patent. See Ex.
1031 at 0002; Ex. 2010 at 1; Ex. 2011 at 1; Ex. 2012 at 7-10 (discussing the drugs
approvals subject to Subpart H). In other words, nexus is present because, but for
the methods claimed in the 720 patent, no sales of Thalomid, Revlimid, and
Pomalyst would have occurred.
(c)
Third-Party Praise And Awards Further Supports

The Nonobviousness Of The Claimed Inventions
Praise in the industry tends to indicate that the invention [is] not obvious.
Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1370 (Fed. Cir.
2012). Here, industry recognition for the patented inventions also supports a
finding of nonobviousness. Ex. 2006 at 329 (The S.T.E.P.S. programme has
been successful in preventing fetal exposure to thalidomide.)
(d)
Licensing by Others Further Supports The

Objective evidence of nonobviousness may also include licenses showing

industry respect. WMS Gaming, Inc. v. Int'l Game Tech., 184 F.3d 1339, 1359
(Fed. Cir. 1999). Here, licensing by others is evidenced by the fact that third
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parties have licensed the 720 patent. For example, at the FDAs urging, several
manufacturers of isotretinoin (the active ingredient in Accutane) licensed several
patents, including the 720 patent, in connection with the restricted-distribution
program known as iPledge after it became clear that the PPP (and later attempts at
managing the distribution of isotretinoin) were ineffective. See Ex. 2015 at 4, 8-9;
Ex. 2016 at 1; and Ex. 2017 at 1.
(e)
Unexpected Results Further Supports The

Unexpected results are important indicia of nonobviousness. See United

States v. Adams, 383 U.S. 39, 51-52 (1966). [T]hat which would have been
surprising to a person of ordinary skill in a particular art would not have been
obvious. In re Soni, 54 F.3d 746, 750 (Fed. Cir. 1995).
Here, unexpected results are demonstrated by the fact that the inventions
claimed in the 720 patent have enabled the unexpected benefit of safely
administering teratogenic and potentially teratogenic drugs to patients who might
not otherwise have had access to them. Unexpected results are also demonstrated
by the fact that Enhanced S.T.E.P.S.which is covered by the claims of the 720
patenthas been 100% successful in preventing birth defects of the type
associated with thalidomide. This stands in stark contrast to the birth defects
associated with the PPP and deaths associated with the Clozaril National Registry.
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Celgenes results are especially unexpected in the face of skepticism
regarding the alleged impossibility of zero risk of drug-related birth defects before
the patented inventions were marketed. See, e.g., Ex. 2022 at 235 (We know that
when this drug is used by women of childbearing potential, the risk for causing
serious birth defects can never be lowered to zero.); id. at 241 (Unfortunately,
even with a stronger program for thalidomide, some affected infants will also be
born.); Ex. 2023 at 28 (Its important to remember that a zero risk is not
achievable. There is no system that will prevent the single birth of a child with
phocomelia.); Ex. 2024 at 33 ([N]o matter how exemplary the conduct of the
manufacturers is, no matter how good a job of warning the physicians and the
pharmacists do, there will be children born with birth defects as a result of
thalidomide. Its a fact. There will be.); Ex. 2025 at 2 (It is the view of the
Thalidomide Victims Association of Canada that babies will be born disabled. No
system is foolproof.). These unexpected results further support a finding of
nonobviousness.
For the foregoing reasons, CFAD has failed to show a reasonable likelihood
that any claims of the 720 patent would have been obvious.
B.
The Petition Should Be Denied Under

35 U.S.C. 314(a) and 316(b)
As explained above, CFADs petition should be denied because it fails on

the merits. The Petition should also be denied because it is being used for an
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improper purpose. Specifically, the RPI are non-practicing entities who are
abusing and misusing the IPR process as part of an investment strategy aimed at
causing changes in the stock prices of targeted innovator pharmaceutical
companies. The law gives the Board discretion over which petitions to accept, and
permits the Board to reject petitions that hinder the ability of the Office to timely
complete [IPR] proceedings. 35 U.S.C. 314(a) and 316(b). The Board should
use its discretion and deny this Petition.
The Petitioner, CFAD, is one of fifteen Coalition For Affordable Drugs
companies set up by one or more of the RPI. Ex. 2026; Ex. 2027 at 1-2. Each
CFAD entity is a wholly-owned subsidiary of Hayman Credes Master Fund, L.P.,
which, through a series of other Hayman investment firms, is controlled by RPI
J. Kyle Bass. Pet. at 1-2. RPI Erich Spangenberg and his notorious non-practicing
entity, IPNav, are paid consultants to the Hayman investment firms. Pet. at 1-2.
The RPI and CFAD are not pharmaceutical companies that seek to compete in the
space covered by the 720 patent. In fact, neither the RPI nor CFAD have any
legitimate business interest in the targeted patent or the products it covers.4
4
Consequently, were the Board to deny CFADs petition, it would not invade any
legal right conferred upon CFAD. See Consumer Watchdog v. Wis. Alumni
Research Found., 753 F.3d 1258, 1262 (Fed. Cir. 2014) (holding that because
Consumer Watchdog did not have any connection to the challenged patent, the
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Instead, CFAD exists for the sole purpose of filing and publicizing [IPR]
patent challenges against pharmaceutical companies while also betting against their
shares. Ex. 2028 at 1. Indeed, Mr. Bass has publicly trumpeted his investment
strategy of attacking patents in the pharmaceutical industry in what he termed a
short activist strategy. Ex. 2029 at 1. Unsurprisingly, two of the RPI admittedly
exist for the primary purpose of . . . generat[ing] superior risk-adjusted returns
through long or short positions with regard to selected companies, primarily in the
pharmaceuticals sector. Ex. 2030 at 5. In fact, the RPI, through seven different
CFAD entities, have filed a combined sixteen IPRs against ten innovators,
including five against Celgene. See IPR2015-00720, -817, -988, -990, -1018, 1076, -1086, -1092, -1093, -1096, -1102, -1103, -1136, -1169, -1241, -1344.
If the RPI are permitted to file IPRs for the sole purpose of profiting by
causing changes in public companies stock prices, then the Board will be overburdened with similar petitions. In fact, two other hedge funds have also recently
filed IPRs, following the RPIs model. See IPR2015-00858, -1046, -1047. Such
improper petitions will divert the Boards resources from other, properly filed
Boards denial of Consumer Watchdogs [inter partes reexamination] request did

not invade any legal right conferred upon Consumer Watchdog).
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5
petitions. Celgene respectfully submits that the Board should use its discretion
under 314(a) and 316(b) to ensure that proper proceedings (those used as less
costly alternatives to litigation) are timely resolved; it should not be overburdened
by abusive petitions filed solely for the purpose of executing hedge fund
investment strategies. For this additional reason, the Petition should be denied.
C.
The Petition Should Be Denied For Failing

To Name All Real Parties-In-Interest
The Petition should further be denied because it is procedurally defective.

An IPR petition may be considered only if . . . the petition identifies all real
parties in interest. 35 U.S.C. 312(a)(2). Here, the Petition fails to meet that
threshold requirement. Specifically, the Petition fails to name each investor in the
Hayman funds responsible for filing the Petition. The unnamed investors are RPI
not only because they fund the Petition, but also because CFAD is merely a proxy
for the unnamed investors who stand to gain or lose financially from the Petition.
As Senator Kyl explained, Congresss decision to provide the PTO with the
authority to govern the procedure before it under 35 U.S.C. 316 reflects a

legislative judgment that it is better that the [PTO] turn away some petitions . . .
than it is to allow the [PTO] to develop a backlog of instituted reviews that
precludes the [PTO] from timely completing all proceedings. 157 Cong. Rec.
S1377 (daily ed. Mar. 8, 2011).
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[T]he real party-in-interest is the party that desires review of the patent.
Thus, the real party-in-interest may be the Petitioner itself, and/or it may be the
real party or parties at whose behest the petition has been filed. Zoll Life Corp. v.
Philips Elecs. N.A., IPR2013-00606, Paper 13 at 9 (Mar. 20, 2014). A party who
funds a petition is likely to be an RPI. 77 Fed. Reg. at 48760. A petition fails to
name all RPI when it is filed by a proxy who is at most, a nominal plaintiff with
no substantial interest in the[] IPR challenge[] apart from those of its client[s].
RPX Corp. v. VirnetX, Inc., IPR2014-00171, Paper 52 at 7-10 (June 23, 2014).
As explained above, Mr. Bass went on a public relations campaign, pitching
wealthy investors to contribute to his hedge fund to file the present IPR. Ex. 2028
at 4. The fund require[d] a minimum $1 million investment. Id. The RPIs plan
was to file petitions on a big-selling drug [to] rattle investors, anticipating that
the filing of petitions would cause a change in public companies stock prices. Ex.
2031 at 2. Eighty percent of the profits resulting from the investments would be
returned to the unnamed investors. See Ex. 2028 at 4 (Mr. Basss firm will keep
20% of all profits earned.). The unnamed investors funded the petition.
Specifically, Hayman investment materials evidence that investors will generally
bear costs associated with their investments, including outside professional fees
and expenses, including those of attorneys, and litigation expenses. Ex. 2030 at
8. As such, the unnamed investors are RPI.
04841.00006/7042666.1
- 58 -

IPR2015-01103
Patent 6,045,501
The unnamed investors are also RPI because CFAD is nothing more than a
proxy for the unnamed investors to execute their investment strategy. In fact,
CFAD has no substantial interest in the[] IPR challenge[] apart from those of its
client[s]the unnamed investors. See RPX, IPR2014-00171, Paper 52 at 7-10.
As such, the Petition should be denied due to their omission.
As noted above, CFAD is a wholly owned subsidiary of Hayman Credes
Master Fund, L.P. (Credes). Pet. at 1-2. Credes is funded by a network of other
hedge funds, several of which are not named as RPI here, even though they invest
substantially all of their assets in, and conduct substantially all of their activities
through, one or more of the RPI. See, e.g., CFAD II LLC v. NPS Pharms., Inc.,
IPR2015-00990, Paper 19 at 30-41 (Jul. 24, 2015). The Petition also fails to name
any of the beneficial owners of any of the RPI funds. See id. at 34-35.
Additionally, general partners, managers, trustees, and directors have some control
and decision-making authority over the finances and activities of an organization,
especially hedge funds, but the Petition does not identify any partners, managers,
trustees, or directors of any of the RPI funds, other than Mr. Bass. See id. at 34-36.
The Petition should be denied due to the omission of the additional hedge funds,
beneficial owners, and partners, managers, trustees, and directors, all of whom are
RPI.
04841.00006/7042666.1
- 59 -

IV.
IPR2015-01103
Patent 6,045,501
CONCLUSION
For the foregoing reasons, the Board should deny institution of the Petition.
Date: July 28, 2015
Respectfully submitted,
By: /F. Dominic Cerrito (Reg. No. 38,100)/
F. Dominic Cerrito (Reg. No. 38,100)
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010
Tel: (212) 849-7000
Fax: (212) 849-7100
nickcerrito@quinnemanuel.com
Anthony M. Insogna (Reg. No. 35,203)
JONES DAY
12265 El Camino Real
Suite 200
San Diego, CA 92130
Tel: (858) 314-1200
Fax: (858) 314-1150
aminsogna@jonesday.com
Attorneys for Celgene Corporation
04841.00006/7042666.1
- 60 -
UNITED STATES PATENT AND TRADEMARK OFFICE

________________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
________________
COALITION FOR AFFORDABLE DRUGS VI LLC
Petitioner,
v.
CELGENE CORPORATION
Patent Owner
________________
Case IPR2015-01103
Patent 6,315,720
________________
CERTIFICATE OF SERVICE
04841.00006/7042666.1
CERTIFICATE OF SERVICE
Pursuant to 37 C.F.R. 42.6(e), the undersigned hereby certify that
PATENT OWNER PRELIMINARY RESPONSE PURSUANT TO 35 U.S.C.
313 AND 37 C.F.R. 42.107 and accompany exhibits (Exs. 2001-2032) were
served on July 28, 2015 by filing these documents through the Patent Review
Processing System, as well as e-mailing copies to
sarah.spires@skiermontpuckett.com, parvathi.kota@skiermontpuckett.com, and
paul.skiermont@skiermontpuckett.com.
Date: July 28, 2015
Respectfully submitted,
By: /F. Dominic Cerrito (Reg. No. 38,100)/
F. Dominic Cerrito (Reg. No. 38,100)
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010
Tel: (212) 849-7000
Fax: (212) 849-7100
nickcerrito@quinnemanuel.com
Anthony M. Insogna (Reg. No. 35,203)
JONES DAY
12265 El Camino Real
Suite 200
San Diego, CA 92130
Tel: (858) 314-1200
Fax: (858) 314-1150
aminsogna@jonesday.com
Attorneys for Celgene Corporation
04841.00006/7042666.1

Preliminary Response

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PROTECTIVE ORDER MATERIAL

PATENT OWNER PRELIMINARY RESPONSE

PROTECTIVE ORDER MATERIAL

The Challenge of Protecting A Fetus From A Teratogenic

Previous Attempts to Control

The 720 Patent ................................................................................... 13

The Petition Should Be Denied Because

CFADs Expert Declaration Is

Dr. Fudin Is Not A POSA ............................................... 20

Dr. Fudins Opinions Are

The Petition Fails To Address The Redundancy

Ground 1: The Claimed Inventions

CFAD Fails To Address Both the

CFAD Has Not Provided A Motivation To

PROTECTIVE ORDER MATERIAL

The Ground 1 References Fail To

Claim 1 Would Not Have Been Obvious

Element 1(c) ............................................... 32

Element 1(e) ............................................... 35

Dependent Claims 227 Would Not Have

Claims 13, 14, 23-25 .................................. 42

Claims 18 and 19 ....................................... 44

Independent Claim 28 And Dependent

Claims 29-32 .............................................. 47

CFAD Fails To Address The Objective Evidence of

PROTECTIVE ORDER MATERIAL

Long-felt Need Further Supports The

Commercial Success Further Supports The

Third-Party Praise And Awards Further Supports

Licensing by Others Further Supports The

Unexpected Results Further Supports The

The Petition Should Be Denied

The Petition Should Be Denied For

PROTECTIVE ORDER MATERIAL

Celgene Corporation (Celgene) submits this Preliminary Response to Coalition

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

Petition pursuant to 37 C.F.R. 42.12.

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

Beginning in 1958, thalidomide was marketed in Europe as a sedative and a

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

As explained in the 720 patent, the inventors

PROTECTIVE ORDER MATERIAL

BEFORE DISPENSING THALOMID (thalidomide), YOU MUST

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

Previous Attempts to Control Access to

Others attempted to control access to the drugs Accutane (isotretinoin) and

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

The 720 Patent

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

PROTECTIVE ORDER MATERIAL

relies heavily on an expert declaration that is entitled to little or no weight because

PROTECTIVE ORDER MATERIAL

The Petition Should Be Denied Because CFAD Has Failed To

CFADs Expert Declaration Is