This is Part 3 of a series. See Part 1 here and Part 2 here.
Share enough thoughts publicly on the internet and you’re bound to get something wrong. Like Aladdin who rubs a lamp to magically materialize a genie, a wrong idea on the internet magically materializes an expert in the comments section who is a little too keen to point out your mistakes.
Why does it take someone being wrong on the internet to coax this kind of person out of their lair and into the conversation? I know one thing from experience, and it motivates me to write this blog. It feels psychologically safer to correct someone when they are wrong than it does to expose yourself to humiliation by expressing an original thought. This XKCD comic captures this phenomenon perfectly.
With that in mind, I’m going to expose myself to humiliation, comments section be damned.
This week, Liquidia ($LQDA) received a favorable decision from the Precedential Opinion Panel (POP) of the Patent Trial and Appeal Board (PTAB) (which Liquidia press-released here. At the time I hit publish on this post, United Therapeutics has made no statement on the matter, which should give some indication as to who benefits from the POP’s decision).
The POP’s mission is to decide issues of exceptional importance to the PTAB. United Therapeutics ($UTHR) made the argument that the PTAB erred in their Final Written Decision (FWD) on the 793 Patent (the last patent preventing Liquidia from launching their flagship drug. See my original post for more context). The POP refused to hear UTHR’s case. Instead, the POP instructed the PTAB judges that issued the FWD to (1) clarify one issue and (2) make a rehearing decision on the original case. It is point number one that I would like to address in this post.
Recall the PTAB’s FWD invalidated the 793 patent on the basis of three pieces of prior art: a separate patent and two publicly-available research publications. The separate patent is not at issue here. Regarding the two research publications, Liquidia made three arguments that demonstrate why they qualify as prior art: (1) the publications were presented at major medical conferences, (2) the publications were publicly accessible at public libraries, and (3) the publications were referenced in other articles in large medical journals, which served as research aids.
Armed with the patent and publicly available research publications, a person of ordinary skill in the art (also known as a “POSA” … think a PhD-level chemist) would be able to create the drug formulation that UTHR patented under the 793 patent. And because a POSA could succeed in this manner, the PTAB invalidated the 793 patent. You can’t “invent” (and subsequently patent) something that already exists in the public domain.
Now in order for United Therapeutics to request a rehearing decision, they have to argue that the PTAB got something wrong in the original hearing. Here’s what they came up with. UTHR claims the research publications are not actually prior art because the date they were referenced in large medical journals is too late to qualify. In other words, UTHR contests point (3) above, but concedes points (1) and (2).
And it is on point (3) that the POP has asked for clarification from the PTAB. For the sake of argument, let’s assume the PTAB got it wrong on point (3), and that UTHR is correct, i.e. point (3) does not qualify the relevant publications as prior art. Then what? Here’s why I think Liquidia still comes out ahead.
It is my assertion that points (1) and (2) are sufficient to qualify the publications as prior art, and even if United Therapeutics wins on point (3), it is irrelevant to the outcome. Why? Part of it has to do with common sense. United Therapeutics is claiming the publications weren’t publicly accessible despite them being publicly accessible. UTHR’s argument is nonsensical.
Another reason why I think Liquidia will prevail has to do with evidentiary standards. In the proceeding with the PTAB, Liquidia has to prevail by a preponderance of the evidence. This means that >50% of the evidence has to weigh in favor of Liquidia. Of the three points in question, by default Liquidia will prevail on 67% of them (two out of three) since only one of the points is contested by UTHR. Is this sufficient to qualify as a preponderance of the evidence? From a legal standpoint, I don’t know. But from a common sense standpoint, two out of three ain’t bad.
In conclusion, I think Liquidia is still highly likely to prevail on the 793 patent. Here’s what Roger Jeffs, CEO Liquidia had to say in response to the POP’s decision:
“Yesterday’s decision clears the way for the PTAB to make a final decision with respect to UTC’s rehearing request. We believe that the requested clarification of the PTAB’s original decision will help to make the PTAB’s decision even stronger. We remain confident that the rehearing request will be denied and that the PTAB’s favorable decision will be affirmed on appeal, thereby unlocking the path to potential approval of YUTREPIA by mid-2024, if not earlier.”
If you think I have this wrong (or right!), make like a genie and find your way to the comments section.
This is another great write-up. Thank you. Your posts on LQDA are super informative and I've enjoyed them and encourage you to please keep us posted with more updates. I am a lawyer, but not a patent lawyer. Without knowing the law, I would take issue with your objective mathematical analysis that winning on issues (1) and (2) means that LQDA has won on 66% of the issues and has therefore satisfied the 51% preponderance of the evidence standard. These sorts of analyses tend to be more subjective. For example, LQDA could win on just issue (1) but if the medical journal was so widely known in the medical community that would seem to me to be sufficient. Again, I am not a patent attorney so I could be wrong. I also imagine in reality that (1) and (2) are closely linked. Regardless, your analysis is otherwise spot on as far as I can tell and I don't think LQDA loses on this issue. Seems a formality. Would love to know how you are getting access to the underlying PTAB filings? Please feel free to reach out to me if you want to discuss. (matthew@dstlegal.com) And thanks again. Your writing is thoughtful and appreciated.
Great post!