The mere perception of filling for inter partes review collapses stock prices of pharma companies.

Inter partes and post-grant reviews were created for a worthy purpose: to decrease the cost and time involved in litigating against baseless patent trolls. Specifically, legislative history indicates that the intent was to prevent these baseless cases primarily in the technology sector. Whatever the original intent, it seems that the greatest harm from IPRs is being felt in the biopharmaceutical industry.

The extent of IPR abuse has become so prevalent it was covered in the Wall Street Journal 76 and is largely attributable to one company in particular.7 7 The technique of shorting a company's stock and then filing an IPR is completely legal and available because of the lack of a standing requirement for an IPR; "a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent."78 In addition, the requirement to get an IPR instituted is a very low bar: a petitioner need only demonstrate a "reasonable likelihood" that it will prevail in showing at least one challenged claim to be unpatentable.7 9 This has been construed to be low enough that the likelihood could be even less than a 50% chance of a claim being unpatentable.so

Even without an IPR invalidating a patent, the mere filing of an IPR has been shown to have dramatic consequences. For example, when the Coalition for Affordable Drugs (CFAD) first filed an IPR against Acorda Therapeutics looking to invalidate its patent on Ampyra, a drug that allowed multiple sclerosis patients greater mobility, the company's stock prices dropped 9.7%. 8 When the IPR was later instituted, the stock dropped an additional 7.8%.82 This stock drop was not due to a final decision or invalidation of a claim but simply from the PTAB instituting the hearing and looking into the allegations. Although no claims were invalidated, Acorda's investors lost over $150 million in response to the IPR."