Kyle Bass Loses Round 1 Of IPR Attack Against Pharma/Biotech Patents

On August 24, 2015, the Patent Trial and Appeal Board (PTAB) declined institution of two petitions filed by Coalition For Affordable Drugs for Inter Partes Reviews (IPRs) of Acorda's patents (U.S. Patent Nos: 8,007,826, 8,663,685) covering Ampyra, a billion-dollar drug for treating multiple sclerosis.

Coalition For Affordable Drugs - Petitioner

The Petitioner, Coalition For Affordable Drugs, is a wholly owned subsidiary of a hedge fund managed by Kyle Bass, which appears to have little to do with the life science and drug industry other than filing IPR petitions against patents owned by pharmaceutical and biotechnology companies.

Kyle Bass, A Hedge Fund Manager

The original petition was filed against Acorda on February 10, 2015. The day after the filing, a New York Times article commented on Kyle Bass and his new investment strategy using IPR as a tool, stating that "Kyle Bass, a hedge fund manager who bet successfully on a housing market crash in the United States, is aiming at pharmaceutical companies worth of a combined $450 billion in market capitalization." The New York Times further commented that "Mr. Bass, based in Dallas, has already drawn blood. Acorda Therapeutics stock fell almost 10 percent on news of his challenge on Tuesday. The biotech company, with a $1.5 billion market capitalization, gets nearly all its revenue from Ampyra, a treatment for multiple sclerosis. If cut-price competition emerges sooner than expected, the company would be hurt badly."

Kyle Bass' Publicized IPR Strategy

During a speech at a conference, Kyle Bass candidly discussed his new IPR strategy of challenging some of the biggest drug makers in the country. Bass bluntly stated that his IPR strategy served to grow his hedge funds by shorting the stock of the targeted pharmaceutical and biotechnology companies, which would also open the door for generic companies to introduce comparable drugs at a lower and more affordable price to the public. To date, entities associated with Kyle Bass, such as Coalition For Affordable Drugs, have filed at least 15 petitions for IPRs against patents owned by at least 8 publicly treated pharmaceutical and biotechnology companies (for a full listing, see "Will New PTAB Rules Impact IPRs Filed By Kyle Bass Hedge Fund?").

PTAB Decision Based On Public Accessibility

The PTAB's decisions to deny the institution of IPRs against Acorda's patents may come as a surprise to many because they were based on the lack of evidence...