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Spangenberg Finds Partner to Target Nucynta® Patent

Written by Tasha Francis

About a year ago, certain hedge-fund petitioners made headlines by filing IPR petitions targeting various biopharma patents. Most notably, Kyle Bass, founder of Dallas-based hedge fund Hayman Capital Management, and his various real parties in interest, which include Erich Spangenberg (current CEO of nXn Partners) and the Coalitions for Affordable Drugs, filed 35 IPRs in the span of twelve months targeting 16 companies including Acorda Therapeutics, Pozen, Biogen, Celgene, Insys Pharma, and Fresenius. To date a decision on institution has been issued in 15 of the 35 cases, with IPR being instituted in 7 of these cases.

Although Bass publically stated his intent in filing IPRs is to invalidate biopharma patents to clear the way for lower-priced generic entry, many criticized Bass and Spangenberg's motivations, suggesting their use of the IPR process was to bet against, or "short," the shares of companies whose patents are targeted for IPR review.

Spangenberg used his blog to respond to allegations that their motives were not altruistic and to solicit additional volunteers to challenge the validity of patents.

The blog stated: "[a]s a public service we are making draft IPRs available for certain drugs where we have found the manufacturer to be engaging in 'evergreening,' the practice of artificially extending the patent protection for a drug (and protection for the legal monopoly prices that go with it) by using patents of dubious innovative value."

Spangenberg stated his background makes him "the wrong person to be the face of this effort," and therefore he had hoped others, for example, a law school group, charitable organization or a consumer protection group, would take up the cause.

Spangenberg then posted a "Draft IPR" petition targeting Depomed Inc.'s painkiller Nucynta®. The draft petition challenged claims 1-4 and 24-27 of U.S. Patent No. 7,994,364 alleging European Patent No. EP 0 693 475 A1 ("EP 475") and International Patent App. No. WO 03/035053 A1 ("Bartholomaeus") anticipated the claims under 35 U.S.C. 102(b). The draft petition even included placeholders for testimony from "Dr. Expert" and "Dr. Expert2."

By January, Spangenberg had found a partner to take up his cause. On January 15, 2016, Rosellini Scientific, LLC along with nXn Partners, LLC filed IPR2016-00471 challenging the validity of claims 1-4 and 24-27 of the '364 patent, alleging EP 475 and Bartholomaeus anticipated these claims. Rosellini Scientific, LLC, based in Dallas, Texas, is a biomedical engineering firm that invests "both expertise and capital" in the development, management, and distribution of medical technology. The filed petition is highly similar to the draft petition posted on Spangenberg's website. Minor differences include, for example, the addition of Rosellini Scientific, LLC as a real party-in-interest, and identifying William Edward Mayo as "Dr. Expert" and Ron Bihovsky, Ph.D. as "Dr. Expert2."

A decision on institution is expected within six months.