(First mention on Twitter) Wed 07/29/2015 06:00 AMCelgene responds to 2 of 4 Kyle Bass' IPRs: Under New Jersey law (where Celgene is headquartered), this conduct amounts to extortion.

Relevant Documents:

720 Preliminary Response501 Preliminary ResponseMotion For SanctionsExtortion EmailCelgene has filed Preliminary Responses, and Motions For Sanctions in which the company details the evolution of the Hayman IPR strategy against it. Specifically, Celgenes Preliminary Responses collectively allege (i) that the Petitioner, Coalition For Affordable Drugs (CFAD), relies heavily on an expert declaration that is entitled to little or no weight because the declarant is not a person of ordinary skill in the art (POSA), and because the declaration merely reiterates CFADs conclusory arguments, (ii) that CFAD failed to show that its references constitute prior art, (iii) that CFADs obviousness arguments fail on the merits because none of the cited references disclose, teach, or suggest all elements of the challenged claims, (iv) that CFADs petition is an improper use of the IPR proceedings creating unwarranted burdens for both patent owners and the [PTAB], and (v) that the Petition should be denied because it fails to name all real-parties-in-interest (RPI), which is a threshold requirement for an IPR. Celgenes Motion For Sanctions detail the evolution of CFADs IPR strategy against it. According to Celgene, in January of 2014 notorious patent troll Erich Spangenberg sent a cryptic email withattached draft IPRs (and supporting expert declarations) against the two Celgene patents in the instant IPR petitions. The email was sent to Celgenes counsel who is known for using IPRs to invalidate weak patents, and is also a signatory on the Motion. The email is presented below:

Celgenes Motion then alleges in a footnote:

Under New Jerseylaw (where Celgeneis headquartered), thisconduct amounts to extortion. See N.J. Stat. 2C:20-5(g); State v. Roth, 289 N.J. Super 152 (1996)(finding extortion where defendants threat was solely calculated to harm victim, and the only benefit to defendant was payment tomake him go away).

Celgene ignored the threat in January 2014, but received another threat that it ignored in July 2104 from an attorney representing the Initiative for Responsibility in Drug Pricing (IRDP), with nearly the same draftpetitions and expert declarations as in January. Shortly thereafter, Erich Spangenberg met and partnered with Kyle Bass where they formed fifteen shell companies one including CFAD for the sole purpose of filing and publicizing [IPR] patent challenges against pharmaceutical companies while alsobetting against their shares. Soon, Kyle Bass was pitching wealthy individuals and institutions to invest in a dedicated fund that would bet against, orshort, the shares of [target] companies .. . andwager onrivals thatcould benefit. Concurrently, Bass claimed publicly that his IPRs are designed to support genericdrug entry and lower drug prices for consumers. Then, earlier this year IPRs of very similar subject matter as the draft petitions and expert declarations from the two recent threats were filed against Celgene. Celgenes Motion warned that [i]f the Board permitsthis strategy to continue, it will be inundated with similar petitions, and no public company that relies on patents toprotect its innovations will be safe from threats orunnecessary petitions from for-profit organizations misusingIPRs as investmentstrategies.

The Motion also asserts that [t]he post-grant procedure [was]designed to allow parties to challenge a granted patent through a[n] expeditious and less costly alternative to litigation.

The American Invents Act (AIA)didnot introduce IPRs to provide hedge funds (who have no litigable patent claim) with a vehicle to profit by affecting a public companys stock price by taking advantage of the stigma associated with IPRs.

Lastly, the Motion asserts that the PTAB should dismiss the IPRs for their abuse and improper use of these proceedings. To this end, among other arguments, the Motion notes, [i]ndeed, if altruism meant anything to theRPI, then they would have filed their threatened IPRs in 2014 instead of demanding payment, and, [t]ellingly, the RPI have only filed IPRs against patents owned by public companies [against whom they could short].

/Celgene will file Preliminary Responses and Motion For Sanctions for the remaining two IPRs on Thursday July 30th. CFAD has 10 business days to respond. The PTAB will make a decision on the Motion For Sanctions, and whether or not to institute the four proceedings within three months (September or October 2015) of the optional Preliminary Response due date (late July 2015).

Note: There are several other Bass targeted patents from other companies early in the IPR process. Any changes to those proceedings may impact and provide at least a moderate harbinger to the instant IPRs.More Relevant Documents (Proceedings):

IPR2015-01092 (Patent 6,045,501)

IPR2015-01103 (Patent 6,315,720)

Petes software can monitor these proceedings docket updates as frequently as desired at:

https://ptabtrials.uspto.gov/prweb/PRServlet/HcI5xOSeX_yQRYZAnTXXCg%5B%5B*/!STANDARD?