Elysium Appeals PTAB Decision
Elysium has filed its notice of appeal of the Patent Trial and Appeal Board's (PTAB's) determination that ChromaDex's patent on isolated NR for pharmaceutical uses ('086 Patent claim 2) is valid. You can read Elysium's notice of appeal here:
Elysium challenged both patents before the PTAB via Inter Partes Review. The PTAB rejected Elysium's challenge to the health supplements patent in January 2018, and it rejected Elysium's challenge to the pharmaceutical patent in January 2019.
The PTAB did not entirely reject Elysium's challenge to the pharmaceutical patent. In fact, the PTAB determined that held that four of the five claims that ChromaDex (via Dartmouth) relied upon were unpatentable due to prior art disclosing the invention.
However, the legal effect of that determination was not good enough for Elysium, because it is small consolation to have some of the patent claims invalidated when the PTAB also confirmed that ChromaDex does in fact have a valid, enforceable patent claim that Elysium appears to be infringing. I think of this as Elysium having successfully dodged four out of five bullets -- not good enough.
So Elysium is hoping that the Court of Appeals for the Federal Circuit (CAFC) will overrule the PTAB with respect to the fifth bullet, and find that the prior art also disclosed "isolated" NR, and/or that the PTAB's construction of the term "isolated" was incorrect.
We think Elysium was darn lucky even to have had four of the five claims invalidated, because we think ChromaDex had the stronger arguments that there could be no certainty that the effect of buttermilk in the 1920's on a dog-disease necessarily demonstrated the efficacy of nicotinamide riboside as a health supplement. We don't think that the evidence showed that the NR was necessarily an active ingredient that helped the dogs. But we don't know if ChromaDex intends to cross-appeal the PTAB's determination in favor of Elysium with respect to claims 1, 3, 4, and 5.
One reason Elysium might be appealing is to protect Basis from patent infringement claims based on the '086 patent, even though the PTAB offered it no protection at all from claims based on the '807 patent, which you'd think would be enough by itself to convince Elysium to re-think its business model EVEN IF the '086 patent were invalidated, because Basis is a health supplement, not a pharmaceutical.
But Elysium might be getting another significant benefit from the appeal, regardless of whether the CAFC eventually rules the way Elysium wants.
ChromaDex has filed a patent infringement action in the federal district court for Delaware, and Elysium has asked the Court to put ChromaDex's patent infringement claims on hold until Elysium's challenges to the validity of the patents (before the PTAB) and enforceability of the patents (before the California federal court) are fully resolved. An appeal to the CAFC strengthens Elysium's claim that ChromaDex's patent infringement claims are not yet fully resolved, and so might help convince the Delaware court not to re-start ChromaDex's patent infringement claims.
Or, more simply stated, Elysium might be stalling for time.
I truly do not understand what benefit Elysium might get from stalling for time, since the patent infringement damages, if any, simply grow. It would seem to be in both parties' interest to resolve the IP issues sooner, rather than later.
However, my view is colored by my conviction that Elysium's patent misuse defense in California is fictional and bogus; and because I don't see much likelihood that Elysium is going to successfully get the PTAB overturned -- the PTAB tends to get reversed for being overzealous in invalidating patents, not for being under-aggressive; and because I can't imagine any convincing invalidity or non-infringement defenses that Elysium might be planning to assert in Delaware.
So far, the Delaware court has not ruled on Elysium's stay motion. But every day the Court fails to rule is essentially a new grant of the stay motion for one more day. So whatever benefit Elysium gets from that, this appeal to the CAFC might help generate more of the same.
When we say that the wheels of justice turn slowly, we are specifically talking about Elysium's appeal of the PTAB ruling and the Delaware court's refusal to rule on Elysium's motion to stay the patent infringement case pending the outcome of its appeal to the CAFC. But though they turn slowly, the wheels grind exceedingly fine.