Texas hedge fund manager and founder of Hayman Capital Management, J. Kyle Bass, has riled up the pharmaceutical industry. Bass formed the Coalition for Affordable Drugs, an organization that is the lead petitioner in several challenges to Orange Book-listed patents—a list of approved drug products with therapeutic equivalence evaluations (i.e. generic drugs)— which he believes have little value other than to drive up the prices of prescription drugs. Bass and the Coalition filed 36 Inter Partes Review (IPR) petitions by challenging patents and betting against the company’s stocks. The patent reviews were created by the 2011 America Invents Act as a quick and easy way for anyone to challenge certain patents outside of the federal court system. As expected, this has drawn complaints from pharmaceutical companies, some calling Bass a “patent troll.” As a result, Celgene, a pharmaceutical giant, filed for sanctions claiming Bass is led by economic motives and using the process as a form of extortion. If allowed to move forward, the pharmaceutical companies argued, for-profit groups like Bass’ would use patent reviews as an investment strategy or demand payment in return for dropping challenges.
This post was originally published on the Cardozo Arts & Entertainment Law Journal website on October 6, 2015. The original post can be accessed via the Archived Link button above.
Cardozo Arts & Entertainment Law Journal, "Inter Partes Reviews the New Investment Strategy?" (2015). AELJ Blog. 82.