The Patent Trial and Appeals Board (PTAB) previously authorized Celgene Corporation (“Celgene”) to move for sanctions against the Coalition for Affordable Drugs (“Coalition”), an entity affiliated with a Kyle Bass hedge fund that had filed several inter partes review (IPR) petitions against Celgene and other biotech companies. As expected, Celgene’s recently filed motion focuses on the Coalition’s underlying goal of “profit[ing] by affecting stock prices.”

The thrust of Celgene’s motion is that the Coalition’s IPR petitions are “an unwarranted burden on the [PTAB] . . . and on innovators like patent owner Celgene Corporation . . . and its shareholders.” Celgene argues that the Coalition’s abuse of process began years ago. In 2014, Erich Spangenberg, a so-called “patent troll,” allegedly threatened to file IPRs against the two Celgene patents presently at issue. When Celgene refused to pay Mr. Spangenberg, however, he did not file the IPR petitions. Instead, Mr. Spangenberg and his company became consultants to Mr. Bass and his hedge funds, which formed the Coalition and other companies. Celgene maintains that the “primary purpose” of the Coalition and Mr. Bass’s other companies is to generate returns through short sales of pharmaceutical stocks after filing IPR petitions, as it did against Celgene’s patents in 2014.