Tragedy Turns to Comedy: Thorne Sues ChromaDex
What a time to be a legal blogger!
I'm going to classify Thorne's PTAB petition as "nuisance litigation," at this point, like the Novex lawsuit that settled in Utah, and the ADA complaint against Elysium's website, which also settled, until we see some reason to believe that Thorne can get past the "reasonable likelihood of success" barrier to instituting review, which is going to be an even greater barrier when the request is to review a claim that has already been reviewed by the PTAB, and then by the federal Court of Appeals.
But first, some background.
More than three years ago, in the summer of 2017, Elysium Health asked the US Patent Office's Trial and Appeal Board (PTAB) to initiate an Inter Partes Review (IPR) proceeding that could lead to the cancellation of Dartmouth's '807 and '086 patents.
Inter Partes Review was created as a relatively quick, non-judicial way to cancel improvidently granted patents that were being used by patent trolls (ahem, "non-practicing entities") to extort settlements from companies that were using technologies covered by patents that should not have been granted. Lucrative settlements were possible because the cost of settling was less than the cost of invalidating the patent in court.
According to the Wall Street Journal, "The intent [of the IPR system] was to prevent 'patent trolls' from gaming the patent system, especially in high tech. But a host of unintended consequences soon became clear. Most notably, the IPR process is stacked against biopharmaceutical patents, providing deep disincentives for innovation.
The new IPR process made it (relatively) cheap and easy to invalidate patents without having to go to court. The new PTAB understood its mission, though, and became a slaughterhouse for patents, despite some commenters' suggestion that "it was neither Congress's intent nor that of of most of the America Invents Act's supporters to create an unfair IPR patent 'killing field,'" which caused the U.S. Patent system to sink to 10th-ranked in the world, largely due "to the challenges, additional cost and uncertainty of IPR proceedings..."
The blood pouring out of the USPTO attracted a new kind of vermin -- the Reverse Patent Troll, which could threaten to challenge perfectly good patents before the PTAB's indiscriminate blades.
The whole mess wound up at the SCOTUS a couple years ago to test whether the IPR process itself was unconstitutionally destroying property, and is now back again now to determine whether PTAB judges can legally exist.
Cutting to the chase, patents are only valuable if they are enforceable. If Congress creates a system whereby anyone with enough money, lawyers, and time can invalidate a patent, then the only patents that will be enforceable will be patents that aren't valuable enough to attack, and therefore do not need to be enforced. In other words, there won't be a patent system any more, and patents will become valueless. You can read more about that in this thoughtful article that analyzes why big companies benefit from weakened patent protections, and why small companies need the patent system to actually work.
Into this bloody mess Elysium boldly strode in July of 2017.
The first step in an IPR is a request to institute proceedings. Patents don't get reviewed by the PTAB just because you want. The PTAB first gets to look at the patent and decide whether there is a reasonable likelihood that it should be invalidated. If the patent looks okay, then the PTAB will decline to institute an IPR, and that's the end of the petition.
That is exactly what happened to Elysium's challenge to Dartmouth's '807 patent -- the PTAB denied the request to institute an IPR.
But then the PTAB was willing to consider the '086 patent and instituted an IPR.
The end result of that IPR proceeding was a finding in January 2019 that Claim 2 of the '086 patent was valid. Elysium promptly appealed that ruling to the federal Court of Appeals which, with laughter and not much comment, affirmed the PTAB's determination that Claim 2 was valid.
So now less than a year later, Thorne announces that it, too, is attacking Claim 2 of the '807 patent, and that "Thorne Research's petition for inter partes review uses a different legal strategy to challenge Claim 2, and Thorne is confident in the strength of the legal arguments presented in its petition."
Well they would need a different legal strategy, because otherwise it's not clear how they get past the first hurdle of reasonable likelihood of success. The prior PTAB decision upholding Claim 2, affirmed by the Court of Appeals, would seem to counsel the exact opposite.
On the other hand, if Thorne has thought up a great new legal strategy that's better than the one Elysium used, why didn't Elysium's attorneys think of it? Elysium was represented by Foley Hoag, a significant firm. Thorne is represented by Wilson Sonsini -- an even more significant firm. But is the difference as great as all that?
We'll have to read Thorne's petition to know:
Thorne's argument seems to be that Elysium challenged claim 2 as anticipated by Goldberger; whereas Thorne is going to argue that "isolating" NR was not just anticipated, but also "obvious."
Thorne spends a fair amount of time asking the PTAB not to deny institution just because this is the same thing all over again. It's a slightly different thing all over again, but the PTAB has the authority to protect its own resources and not look at the same patent over and over.
We await ChromaDex's responsive petition, which will explain why the PTAB should refrain from initiating an IPR.