Trials@uspto.gov Paper No. 24 571.272.7822 Filed: February 23, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE

_____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD

____________

COALITION FOR AFFORDABLE DRUGS X LLC,

Petitioner,

v.

ANACOR PHARMACEUTICALS, INC.,

Patent Owner.

Case IPR2015-01785 Patent 7,767,657 B2

Before MICHAEL P. TIERNEY, GRACE KARAFFA OBERMANN, and TINAE. HULSE, Administrative Patent Judges. TIERNEY, Administrative Patent Judge.

DECISION Institution of Inter Partes Review

37 C.F.R. § 42.108

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I. INTRODUCTION

Coalition for Affordable Drugs X, LLC (“Petitioner”), filed a Petition

requesting an inter partes review of claims 1–24 of U.S. Patent 7,767,657

(Ex. 1001, “the ’657 patent”). Paper 1 (“Pet.”). Patent Owner, Anacor

Pharmaceuticals Inc. and Sandoz Inc., (“Patent Owner”) filed a Preliminary

Response. Papers 7 and 17 (“Prelim. Resp.”).

We have jurisdiction under 35 U.S.C. § 314. The standard for

instituting an inter partes review is set forth in 35 U.S.C. § 314(a), which

provides:

THRESHOLD.—The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.

Upon consideration of the Petition and Preliminary Response, we

conclude that the information presented in the Petition demonstrates that

there is a reasonable likelihood that Petitioner would prevail in challenging

claims 1–24 as unpatentable. Pursuant to 35 U.S.C. § 314, we hereby

authorize an inter partes review to be instituted as to claims 1–24 of the ’657

patent.

A. Related Proceeding

The claims of the ’657 patent have been challenged in related inter

partes review proceeding IPR2015-01780. Additionally, the ’657 patent

claims to be a continuation-in-part of U.S. Patent 7,582,62, which is

involved in inter partes review IPR2015-01776. Pet. 4.

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B. The ’657 Patent

The ’657 patent is titled “Boron-Containing Small Molecules.” Ex.

1001. The ’657 specification describes compounds useful for treating fungal

infections, in particular, topical treatment of onychomycosis and/or

cutaneous fungal infections. Id. at abstract. The compounds are said to have

physiochemical properties that help facilitate the penetration of the nail

plate. Id.

The ’657 patent describes pharmaceutical formulations that includes a

pharmaceutically acceptable excipient and a compound of said invention.

Id. at 139:35–37. According to the ’657 patent “Summary of the Invention,”

said invention provides a structure that is described as having the following

formula:

in which R1 and R2 are members independently selected from H, substituted or unsubstituted alkyl, substituted or unsubstituted heteroalkyl, substituted or unsubstituted cycloalkyl, substituted or unsubstituted heterocycloalkyl, substituted or unsubstituted aryl, and substituted or unsubstituted heteroaryl. R1 and R2, together with the atoms to which they are attached, can be optionally joined to form a 4- to 7-membered ring. Z1 is a member selected from

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R3a and R4a are members independently selected from H, cyano, substituted or unsubstituted alkyl, substituted or unsubstituted heteroalkyl, substituted or unsubstituted cycloalkyl, substituted or unsubstituted heterocycloalkyl, substituted or unsubstituted aryl, and substituted or unsubstituted heteroaryl. R5 is a member selected from halogen and OR8. R8 is a member selected from H, substituted or unsubstituted alkyl, substituted or unsubstituted heteroalkyl, substituted or unsubstituted cycloalkyl, substituted or unsubstituted heterocycloalkyl, substituted or unsubstituted aryl, and substituted or unsubstituted heteroaryl. A is a member selected from CR9a and N. D is a member selected from CR10a and N. E is a member selected from CR11a and N. G is a member selected from CR12a and N. R9a, R10a, R11a and R12a are members independently selected from H, OR*, NR*R**, SR*, —S(O)R*, —S(O)2R*, —S(O)2NR*R**, nitro, halogen, cyano, substituted or unsubstituted alkyl, substituted or unsubstituted heteroalkyl, substituted or unsubstituted cycloalkyl, substituted or unsubstituted heterocycloalkyl, substituted or unsubstituted aryl, and substituted or unsubstituted heteroaryl. Each R* and R** are members independently selected from H, substituted or unsubstituted alkyl, substituted or unsubstituted heteroalkyl, substituted or unsubstituted cycloalkyl, substituted or unsubstituted heterocycloalkyl, substituted or unsubstituted aryl, and substituted or unsubstituted heteroaryl. R9a and R10a, along with the atoms to which they are attached, are optionally joined to form a ring. R10a and R11a, along with the atoms to which they are attached, are optionally joined to form a ring. R11a and R12a, along with the atoms to which they are attached, are optionally joined to form a ring. The combination of nitrogens (A+D+E+G) is an integer selected from 0 to 3.

Id. at 4:6–5:2. Example 4.2.j of the ’657 patent identifies the

compound 1,3-dihydro-5-fluoro-1-hydroxy-2,1-benzoxaborole as

“C10”, which has the following structure:

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Id. at 180:20–27. The ’657 patent provides several examples

describing the antifungal activity of compound C10 and its ability to

penetrate human nails. Id. at 189:15–196:46.

The ’657 patent states that preferred compounds will have

desirable pharmacological properties, including oral bioavailability,

low toxicity, low serum binding and desirable in vitro and in vivo

half-lives. Id. at 165:66–166:2. According to the ’657 patent,

“[a]ssays may be used to predict these desirable pharmacological

properties.” Id. at 166:6–7. For example, “[t]oxicity to cultured

hepatocyctes may be used to predict compound toxicity.” Id. at

166:9–10.

C. Illustrative Claim

The ’657 patent contains twenty-four claims, all of which are

challenged by Petitioner. All twenty-four claims are directed to a

pharmaceutical formulation. Claim 1 is the sole independent claim.

Claim 1 is illustrative of the challenged claims and is reproduced

below:

1. A pharmaceutical formulation, comprising: (a) 1,3-dihydro-5-fluoro-1-hydroxy-2,1-benzoxaborole, or a salt thereof; and (b) a pharmaceutically acceptable excipient wherein said pharmaceutical formulation is for topical administration to an animal suffering from an infection by a microorganism.

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D. Prior Art Relied Upon

Petitioner relies upon the following prior art:

U.S. 6,143,794 Chaudhuri Nov. 4, 2000 (Ex. 1004)

U.S. 6,224,887 Samour May 1, 2001 (Ex. 1005)

U.S. 7,074,392 Friedman Jul. 11, 2006 (Ex. 1006)

U.S. 5,498,407 Atlas Mar. 12, 1996 (Ex. 1007)

U.S. 3,816,472 Shapiro June 11, 1974 (Ex. 1008)

WO 95/33754 Austin Dec. 14, 1995 (Ex. 1002)

WO 03/009689 Freeman Feb 6, 2003 (Ex. 1003)

Petitioner contends that the challenged claims are unpatentable under

35 U.S.C. § 103 based on the following specific grounds (Pet. 21–60):

References Basis Claims challenged

Austin and Freeman § 103 1–2, 4–5, 10–16 and 18–24

Austin, Freeman, and Chaudhuri § 103 6 Austin, Freeman, and Samour § 103 3, 7 Austin, Freeman, Friedman, and Atlas § 103 8 Austin, Freeman, Friedman, and Samour § 103 9 Austin, Freeman, and Shapiro § 103 17

E. Level of Ordinary Skill in the Art

Petitioner’s declarants, Dr. Stephen Kahl (Ex. 1009) and Dr. S.

Narasimha Murthy (Ex. 1011), testify that, based on their experience

in pharmacology, a person of ordinary skill in the art at the time of the

invention had an advanced degree, Master’s or Ph.D. or equivalent

experience in chemistry, pharmacology or biochemistry and at least

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two years of experience with the research, development, or production

of pharmaceuticals. Ex. 1009, ¶ 21 and Ex. 1011, ¶ 36. Patent Owner

goes further than Petitioner and states that a person of ordinary skill in

the art would also possess knowledge and experience in medicinal

chemistry and development of potential drugs candidates suitable for

treating onychomycosis and ungula and other infections. Prelim.

Resp. 15–16. We need not decide at this time whether one skilled in

the art would have possessed the additional knowledge identified by

Patent Owner for purposes of this Decision. Moreover, Patent Owner

acknowledges that Petitioner’s declarants purport to have experience

in the additional fields, and the prior art itself is sufficient to

demonstrate the level of skill in the art at the time of the invention.

See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001) (the

prior art itself can reflect the appropriate level of ordinary skill in the

art).

II. ANALYSIS

A. Claim Interpretation

In an inter partes review, the Board interprets claim terms in an

unexpired patent according to the broadest reasonable construction in light

of the specification of the patent in which they appear. 37 C.F.R. § 100(b);

In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1278–79 (Fed. Cir. 2015),

cert. granted sub nom. Cuozzo Speed Techs., LLC v. Lee, 84 U.S.L.W. 3218

(U.S. Jan. 15, 2016) (No. 15-446). Under that standard, and absent any

special definitions, we give claim terms their ordinary and customary

meaning, as would be understood by one of ordinary skill in the art at the

time of the invention. See In re Translogic Tech., Inc., 504 F.3d 1249, 1257

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(Fed. Cir. 2007). Any special definitions for claim terms must be set forth

with reasonable clarity, deliberateness, and precision. See In re Paulsen,

30 F.3d 1475, 1480 (Fed. Cir. 1994).

Petitioner identifies several claim terms in the challenged claims and

provides definitions for those terms. Pet. 10–15. Patent Owner states that,

where the specification does not already state the meaning of the identified

claim terms, Petitioner has failed to provide sufficient reason why the

ordinary and customary meanings of the claim terms should not be adopted.

Prelim. Resp. 16–20.

At this stage of the proceeding, except for the term 1,3-dihydro-5-

fluoro-1-hydroxy-2,1-benzoxaborole, we determine that it is unnecessary to

construe explicitly the claim terms for purposes of this Decision. See

Wellman, Inc. v. Eastman Chem. Co., 642 F.3d 1355, 1361 (Fed. Cir. 2011)

(“[C]laim terms need only be construed ‘to the extent necessary to resolve

the controversy.’”) (quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc.,

200 F.3d 795, 803 (Fed. Cir. 1999)).

1. “1,3-dihydro-5-fluoro-1-hydroxy-2,1-benzoxaborole”

Independent claim 1 recites the compound 1,3-dihydro-5-fluoro-1-

hydroxy-2,1-benzoxaborole. 1,3-dihydro-5-fluoro-1-hydroxy-2,1-

benzoxaborole has the following structure:

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The parties agree that the claimed compound may also be referred to as “5-

fluoro-1,3-dihydro-1-hydroxy-2,1-benzoxaborole.” Pet. 10–11; Prelim.

Resp. 17–18. Patent Owner further notes that the claimed compound is also

known as “tavaborole.” Id.

We determine that the broadest reasonable interpretation of 1,3-

dihydro-5-fluoro-1-hydroxy-2,1-benzoxaborole includes “5-fluoro-1,3-

dihydro-1-hydroxy-2,1-benzoxaborole” and “tavaborole.” Accordingly, for

ease of reference, we refer to the claimed compound as “tavaborole” in this

Decision.

D. Section 103 Obviousness Challenge

Petitioner raises six (6) challenges based on 35 U.S.C. § 103.

Generally, Petitioner contends that the challenged claims represent a

combination of known prior art elements (tavaborole and topical

formulations), used for their known purpose (antifungal treatment and

topical delivery formulation) to achieve a predictable result (treat or inhibit

the growth of fungus in an animal). Pet. 21–60. Patent Owner opposes

Petitioner’s assertions. Prelim. Resp. 20–60. Based on the current record,

we determine that Petitioner has established a reasonable likelihood that it

would prevail in showing claims 1–24 are unpatentable as obvious over the

cited art.

1. Background on Obviousness

An invention is not patentable under 35 U.S.C. § 103 if it is obvious.

KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 427 (2007). Under § 103:

the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to

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be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined.

Graham v. John Deere Co., 383 U.S. 1, 17 (1966). In addressing the

findings of fact, “[t]he combination of familiar elements according to known

methods is likely to be obvious when it does no more than yield predictable

results.” KSR, 550 U.S. at 416. As explained in KSR:

If a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.

Id. at 417. Accordingly, a central question in analyzing obviousness is

“whether the improvement is more than the predictable use of prior art

elements according to their established functions.” Id.

2. Austin and Freeman: Claims 1–2, 4–5, 10–16 and 18–24

Austin relates to the use of oxaboroles as industrial biocides, and

especially as fungicides for the protection of plastic materials. Ex. 1002,

Abstract. The Abstract further states that “[p]referred compounds are 5- and

6-fluoro or bromo-1,3-dihydro-1-hydroxy-2,1-benzoxaborole including O-

esters thereof.” Id. Austin notes that it has been found that compounds

containing an oxaborole ring are “particularly effective against micro-

organisms such as bacteria, algae, yeasts and particularly fungi, especially

fungi which cause degradation of plastics materials.” Id. at 1:35–38.

Austin tested three compounds falling within the scope of its preferred

5- and 6-fluoro or bromo-1,3-dihydro-1-hydroxy-2,1-benzoxaboroles,

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including tavaborole. Specifically, Austin discloses tavaborole as Example

64, along with the results of a study showing tavaborole has effective

antifungal activity against five different fungi: Aspergillus niger,

Aureobasidium pullulans, Candida albicans, Gliocladium roseum, and

Penicillium pinophylum. Id. at 37 (Table 9). Of the three preferred

compounds tested, tavaborole demonstrated the lowest Minimum Inhibitory

Concentration (“MIC”) values against several pathogens, including Candida

albicans. Id. In other words, tavaborole inhibited the visible growth of

Candida albicans at the lowest level of concentration of the three preferred

compounds tested. Ex. 1009, ¶ 35.

Austin teaches that its compounds may be used with water-miscible

organic solvents such as ethanol or glycols, including propylene glycol. Ex.

1002 at 6:34–37. According to Austin, the concentration of the oxaborale in

its biocide composition may range from 10 to 20% by weight relative to the

total weight of the biocide composition, which for tavaborole an ethanol

solution would be 7.9%–15.8% w/v. Ex. 1011, ¶¶ 167–169.

Freeman discloses phenyl boronic acid and related boronic acid

compounds that are used for treating fungal infections such as

onychomycosis. Ex. 1003, Abstract, ¶ 1. Freeman identifies Trichophyton

rubrum (“T. rubrum”) as one of the most common dermatophyte causes of

onychomycosis. Id. ¶ 8. Freeman also identifies non-dermatophytes,

“especially Candida Sp.,” as another cause of onychomycosis. Id.

According to Freeman, phenyl boronic acids “have been found to be

particularly useful in treating nail fungal infections.” Id. ¶ 22.

Freeman also discloses results of in vitro testing of the fungicidal

activity of phenyl boronic acid. Id. ¶¶ 31–34. In particular, Freeman notes

that phenyl boronic acid exhibited fungicidal effect on T. rubrum. Id. ¶ 34.

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Freeman also notes that the compounds tested had a fungicidal effect on

Candida parapsylosis at 10 mg/ml. Id.

Freeman teaches that its water-soluble phenyl boronic acid can be

administered topically in the form of a buffered solution, lotion or ointment.

Id. at ¶ 30. Suitable carriers include, among other things, water, alcohols

and polyethylene glycols. Id. at ¶ 38. The amount of the acid in the overall

formulation will depend on the type of application but ranges from 2% to

50% are most preferred. Id. at ¶ 64.

a. Analysis

Petitioner argues that claims 1–2, 4–5, 10–16 and 18–24 are

unpatentable as obvious over the combination of Austin and Freeman.

Through claim charts and its declarant’s testimony, Petitioner asserts that the

combination teaches each limitation of the claims. Pet. 22–35; Ex. 1009,

1011. For example, Petitioner relies upon Austin’s teaching that tavaborole

is a compound that is effective in inhibiting Candida albicans and boron

compositions for topical application directly to the nails of humans to

effectively treat onychomycosis. Pet. 22–32, Ex. 1002, 37 (Table 9) and Ex.

1003, ¶¶ 1, 8, 22, 30, 37, 64, and 68.

Having reviewed the arguments and evidence, we are persuaded that

Petitioner has shown sufficiently that each limitation of the challenged

claims is taught by the combination of Austin and Freeman.

Petitioner then provides a detailed explanation supported by the

testimony of its two declarants as to why a person of ordinary skill in the art

would have employed Austin’s tavaborole with Freeman’s topical

formulations for treating onychomycosis with a reasonable expectation of

success. Pet. 32–35. Dr. Murthy testifies in support of Petitioner and

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testifies that a person of ordinary skill in the art would have had reason to

combine Austin’s tavaborole with Freeman’s topical formulations as both

Austin and Freeman describe boron-based compounds for inhibiting

Candida albicans, and as Freeman teaches topical formulations that deliver a

boron-based compound for treating onychomycosis, which is predominantly

caused by Candida albicans. Ex. 1011 ¶¶ 147–148.

Patent Owner disagrees with Petitioner’s analysis of the prior art. In

its Preliminary Response, Patent Owner does not appear to challenge that the

combination of references teaches each limitation of the claims. Instead,

Patent Owner argues that Petitioner has failed to meet its burden to show

that a person of ordinary skill in the art would have combined Austin and

Freeman in the manner recited in the claims with a reasonable expectation of

success. Patent Owner argues that Petitioner has failed to explain why a

person of ordinary skill in the art would have chosen any compound from

Austin as a starting point for further investigation. Prelim. Resp. 22.

According to Patent Owner, a person of ordinary skill in the art would have

understood that biocides, such as taught by Austin, are designed to kill living

organisms. Id. at 23. Patent Owner states that nothing in Austin discloses or

suggests that its industrial biocides may be used for therapeutic purposes in

or on humans or animals. Id. at 24.

Austin teaches that tavaborole, as well as other biocides, inhibit

Candida albicans, which is the most common pathogen causing

onychomycosis. Freeman teaches that a phenyl boronic acid, a boron based

compound, was effective in inhibiting onychomycosis of the fingernail and

toenail and the boron-based compound into a topical composition for

treatment of nail infections.

Dr. Murthy testifies one skilled in the art would have understood that

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Austin’s industrial biocides are effective in treating Candida albicans, and

that boron-based compounds were well known in the art as biocides. Ex.

1011, e.g., ¶¶ 161–162. Dr. Murthy further testifies that Freeman

demonstrated to one of ordinary skill in the art topical applications of a

boron-based compound to a human was effective in treating onychomycosis.

Id. at ¶ 153. We credit Dr. Murthy’s testimony at this stage of the

proceeding as it is consistent with the cited prior art. Based on the current

record, we hold that one of ordinary skill in the art would have had sufficient

reason to select a compound from Austin for therapeutic purposes.

Patent Owner contends that one skilled in the art would have expected

the following of boron-containing compounds:

Given Austin’s focus on effective industrial biocides, it is not surprising that the reference provides no information at all about the toxicity or therapeutic efficacy of its boron-containing compounds in humans or animals. To a POSA in 2005 considering compounds for use in humans and animals, this would have been a glaring omission, especially when the art, including Dr. Kahl’s article, taught a POSA to expect boron-containing compounds to be toxic. See, e.g., Exs. 2002, 2005-2013, 2017 & 2028.

Prelim. Resp. 24. Patent Owner, at this stage of the proceeding, does not

provide a sufficient explanation for why one skilled in the art would have

been led to expect that “boron-containing compounds” are toxic, and would

not have been led to use such compounds. Additionally, Patent Owner’s

allegations of a “glaring omission” of toxicity appear to be inconsistent with

Patent Owner’s ’657 specification and prosecution history, which described

and claimed millions of boron-containing compounds for pharmaceutical

formulations but as to toxicity merely stated that “[t]oxicity to cultured

hepatocyctes may be used to predict compound toxicity.” Ex. 1001 at

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166:9–10, Ex. 1013 at 102–104. Further, Petitioner’s declarant, Dr. Kahl,

testifies that “[b]oron-containing compounds are generally considered safe.”

Ex. 1006 ¶ 31. Thus, at this stage of the proceeding, we are persuaded that

Petitioner has made a sufficient showing that a person of ordinary skill in the

art would not have been dissuaded from Austin’s boron-containing

compounds.

Patent Owner also argues that a person of ordinary skill in the art

would not have selected tavaborole from the millions of compounds

disclosed in Austin. Prelim. Resp. 25–31. It is well settled that a reference

may be relied upon for all that it would have reasonably suggested to one

having ordinary skill in the art. Merck & Co., Inc. v. Biocraft Labs., Inc.,

874 F.2d 804, 807 (Fed. Cir. 1989). Here, Austin discloses 5-fluoro

benzoxaboroles as preferred fungicides in the Abstract and tavaborole is one

of three preferred compounds tested that effectively inhibits Candida

albicans, which is a cause of onychomycosis. Pet. 23, Ex. 1011, ¶¶ 189–

190. Accordingly, evaluating Austin for all that it teaches, we conclude on

the present record that one skilled in the art would have recognized that

tavaborole is a preferred fungicide for inhibiting Candida albicans, which is

a cause of onychomycosis.

Patent Owner argues that Freeman would not supply a reasonable

expectation of success because a skilled artisan would not have been

convinced that phenyl boronic acids are not toxic, given an alleged lack of

data in Freeman. Id. at 32–34, 38–39. Patent Owner also argues that a

skilled artisan would not have combined the references given the structural

differences between tavaborole and phenyl boronic acids. Id. at 33–36.

Petitioner, however, offers the testimony of its declarant, Dr. Murthy, who

states that both Austin and Freeman disclose boron-based cyclic compounds

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and that a person of ordinary skill in the art would have expected that

compounds that share sufficient similar structural features would likely share

similar functional features, such as the inhibition of additional fungi

responsible for onychomycosis. Ex. 1011 ¶¶ 155–156. Further, Patent

Owner’s ’657 specification and prosecution history described and claimed

millions of boron-containing compounds for pharmaceutical formulations

but likewise did not provide in vivo testing for each of the compounds

falling within the scope of its claimed pharmaceutical formulations. Ex.

1001 at 166:9–10, Ex. 1013 at 102–104. Thus, although we acknowledge

Patent Owner’s arguments, on this record and at this stage of the proceeding,

we determine that Petitioner has set forth sufficient evidence to show that a

person of ordinary skill in the art would have had a reason to employ

Austin’s tavaborole in Freeman’s topical formulations with a reasonable

expectation of success in treating onychomycosis caused by Candida

albicans. See Pet. 29–35.

Claims 13, 18, 19 and 22 are dependent claims directed to

pharmaceutical formulations where the formulation is for a topical

administration to skin, nail or hair (claim 13), to an animal suffering from a

dermatophyte (claim 18) or Tinea unguium, Trichophyton rubrum and

Trichophyton mentagrophytes (claim 19) and where the infection is

onychomycosis (claim 22). Patent Owner contends that Petitioner has failed

to demonstrate that one of ordinary skill in the art following the teachings of

Austin and Freeman would have treated onychomycosis and other infections

requiring nail infection such as recited in claims 13, 18, 19, and 22. Prelim.

Resp. 41–47. Patent Owner alleges that one of ordinary skill in the art

would have understood that 90–95% of onychomycosis infections are caused

by dermatophytes. Id. at 41. Patent Owner contends that Austin does not

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suggest, or provide data to support, that the boron-containing compounds it

discloses would be effective against dermatophytes as Austin presents data

on Candida albicans and other non-dermatophytes and Freeman fails to

remedy this deficiency. Id. at 42.

Claims 13, 18, 19, and 22 are composition claims, as opposed to

method claims. On this record, Patent Owner does not provide a sufficient

explanation as to how its composition claims for treating dermatophytes,

Tinea unguium, Trichophyton rubrum and Trichophyton mentagrophytes,

which can cause onychomycosis, differ from a composition arrived at from

the teachings of Austin and Freeman for treating onychomycosis. See Pet.

29–36. Additionally, Freeman describes its invention as curing or

preventing the spread of nail infections, such as onychomycosis, and fungal

infections by treating with a boron-containing compound. Ex. 1003, ¶¶ 19–

20 and 22. Dr. Murthy testifies that a person of ordinary skill in the art

would have expected that compounds that share sufficient similar structural

features, such as the boron cyclic compounds of Austin and Freeman, would

likely share similar functional features. Ex. 1011 ¶ 155.

Patent Owner also contends that a person of ordinary skill in the art

would have expected compounds to exhibit poor nail penetration absent data

evidencing low keratin binding. Prelim. Resp. 43–44. Dr. Murthy testifies

that one skilled in the art would have recognized that tavaborole has a

similar molecular weight to the boron-containing compounds of Freeman

and would have been expected to have better penetration of the nail plate.

Ex. 1011 ¶ 153. Further, Freeman teaches that its boron-containing active

ingredient was effective in treating onychomycosis and Freeman states

explicitly that its composition was for treating onychomycosis of the

fingernail and toenail. Ex. 1003 ¶¶ 1 and 34–37. Based upon the evidence

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of record, we conclude at this stage that one skilled in the art would have

understood that a composition containing tavaborole in combination with the

nail treatment ingredients of Freeman would have had a reasonable

expectation of success of treating onychomycosis.

Accordingly, we determine that Petitioner has established a

reasonable likelihood that it would prevail in showing claims 1–2, 4–5, 10–

16 and 18–24 are unpatentable as obvious over Austin and Freeman.

3. Austin, Freeman, and Chaudhuri: Claim 6

Claim 6 depends from claim 1 and requires that the pharmaceutical

composition of claim 1 comprise propylene glycol and ethanol in a ratio of

about 1:4 and about 1:10 weight per volume of tavaborole.

Chaudhuri is directed to topical formulations for treating nail fungal

diseases. Ex. 1004. Chaudhuri states that treating onychomycosis can be

difficult and that it would be advantageous to have a topical formulation

capable of penetrating the nail barrier and treating nail fungal diseases. Id.

at 1:55–65. Chaudhuri states that suitable solvents for its composition

include lower alkanols, such as ethanol, and dihyxdroxyalcohols, such as

propylene glycol. Id. at 6:2–7. In particular, Chaudhuri provides an

example containing 5–20% weight propylene glycol and 20–80% weight

ethanol and 0.5 to 15% weight antifungal. Id. at 8:57–9:10, Table B. One

skilled in the art would have understood Chaudhuri’s Table B proportions as

equating to a ratio of 1:4 propylene glycol to ethanol and 1:10 wt/volume of

antifungal. Ex. 1011, ¶¶ 100, 193.

Petitioner cites Austin for its description of organic solvents, such as

ethanol and propylene glycol in combination with a biocide, with preferably

10 to 20% by weight concentration of biocide. Pet. 37. Petitioner relies

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upon Chaudhuri for its teaching that an effective nail treatment formulation

for onychomycosis would employ a 1:4 ratio of propylene glycol to ethanol

and 1:10 wt/volume antifungal. Pet. 37–38.

Patent Owner contends that one skilled in the art would have

recognized that Chaudhuri does not describe compounds that are structurally

similar to the boron-containing compounds of Austin and Freeman. Prelim.

Resp. 50–51. Patent Owner also contends that one of ordinary skill in the art

would not have combined the teachings of Austin, Freeman and Chaudhuri

as Chaudhuri does not report on antifungal activity for its compounds in the

same manner as Austin. Id. at 51.

Based on the record presented, we credit the testimony of Dr. Murthy

as it is consistent with the teachings of the prior art of record and find that

Petitioner has shown sufficiently that nail treatment formulations containing

ethanol, propylene glycol and antifungal compounds in the claim

proportions were known in the art and effective in treating onychomycosis.

We conclude, on this record, that Petitioner has provided sufficient and

credible evidence to demonstrate that one skilled in the art would have

combined the known antifungal tavaborole with the known nail treatment

formulations for their known use (treating nail onychomycosis) to achieve a

predictable result (an antifungal nail treatment composition for treating

onychomycosis).

4. Austin, Freeman, and Samour: Claims 3 and 7

Claim 3 depends from claim 1 and requires the formulation be a

lacquer. Claim 7 depends from claim 1 and requires that the pharmaceutical

composition of claim 1 comprises 70% ethanol, about 20% poly(vinyl

methyl ether-alt-maleic acid monobutyl ester) and about 10% tavaborole.

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Samour describes a nail lacquer formulation that is effective for the

treatment or prevention of fungal infections, such as onychomycosis.

Samour’s nail lacquer formulation incorporates an antifungal agent and,

when applied to nails, yields a hard, durable, substantially clear, long lasting

film that is effective in treating fungal infestations associated with nails. Ex.

1005, 3:5–13. Samour teaches that an effective amount of active antifungal

agent preferably ranges from 1 to 10% by weight of the composition. Id. at

12:9–14. Suitable film forming polymers for the composition include

acrylic polymers such as Gantrez ES-425 (poly(vinyl methyl ether-alt-

maleic acid monobutyl ester)). Id. at 7:54–62, Ex. 1011 ¶¶ 103, 208 and Ex.

1035 at 5. Samour teaches that an effective amount of film-forming polymer

is preferably 15 to about 50%, and especially from 20 to 40% by weight of

composition. Id. at 8:38–44, Ex. 1011, ¶ 101, 208. Samour exemplifies a

number of lacquer formulations including a formulation having 71%

ethanol, 24% film-forming polymer and 5% antifungal. Ex. 1005, 9:31–49,

22:20–36.

According to Dr. Murthy, formulating a pharmaceutical composition,

such as that recited in claim 7, requires nothing more than routine

experimentation. Ex. 1011, ¶ 212. Petitioner cites Austin for its description

of organic solvents, such as ethanol and propylene glycol in combination

with a biocide, with preferably 10 to 20% by weight concentration of

biocide. Pet. 40–41. Petitioner relies upon Freeman for its teaching that

onychomycosis treatments can be formulated with evaporating solvents,

such as alcohols. Pet. 40. Petition cites Samour for teaching one skilled in

the art that an effective nail treatment formulation for onychomycosis can be

formulated using 20 to 40% film-forming polymer such as Gantrez ES-425,

a solvent such as ethanol in an amount of about 71% and an antifungal agent

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in an amount of from 1 to 10% of the composition. Id. at 40–44. Based on

the teachings of Austin, Freeman and Samour, Dr. Murthy concludes that

one skilled in the art would have had a reasonable expectation of success of

formulating an effective onychomycosis treatment using tavaborole with the

improved nail lacquer formulation described in Samour. Ex. 1011 ¶¶ 211–

216.

Patent Owner contends that Samour fails to describe a boron-

containing compound and does not provide the effectiveness or toxicity of

any antifungal compound. Prelim. Resp. 53. Patent Owner further contends

that Samour describes the use of skin penetration enhancers but does not

provide data on penetration data containing tavaborole. Id. at 54.

Based on the record presented, we credit the testimony of Dr. Murthy

as it is consistent with the teachings of the prior art of record. We conclude,

on this record, that Petitioner has provided sufficient and credible evidence

to demonstrate that one skilled in the art would have combined the known

antifungal tavaborole with the known nail treatment formulations for their

known use (treating nail onychomycosis) to achieve a predictable result

(penetrating a nail with an antifungal compound to treat onychomycosis).

5. Austin, Freeman, Friedman, and Atlas: Claim 8

Claim 8 depends from claim 1 and requires that the pharmaceutical

composition comprises about 56% ethanol; about 14% water; about 15%

poly(2-hydroxyethyl methacrylate); about 5% dibutyl sebacate and about

10% of tavaborole.

Friedman describes a topical sustained release composition for

delivery of antifungal agents to nails. Friedman describes a number of

methacrylic polymers for use as a film-forming polymer and describes

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plasticizers, such as dibutyl sebacate, with a preferable weight ratio of

plasticizer to polymer of about 0.4:1 to about 0.3:1. Ex. 1006, 5:51–64.

Friedman teaches that a suitable solvent includes ethanol, preferably about

60 to 90% w/w of the composition. Id. at 6:1–9. Dr. Murthy testifies that

60% to about 90% w/w ethanol corresponds to 47.4% to about 71.1% w/v

ethanol. Ex. 1011 ¶ 225 n.7.

Atlas describes the use of hydrogel polymers as excellent carriers for

the release of drugs. Ex. 1007 at 1:5–14. Atlas states that poly(2-

hydroxyethyl methacrylate) (“P-HEMA”) was the most widely used

hydrogel. Id. at Abstract. Atlas teaches that P-HEMA hollow fibers act as a

reservoir and matrix for diffusion-controlled delivery to skin and nails. Id.

at 2:58–64. Atlas Example 4 describes a cosmetic nail polish composition

having P-HEMA. Id. at 3:57–4:7.

Dr. Murthy testifies that one of ordinary skill in the art would have

understood that the composition of claim 8 represents nothing more than

routine experimentation using well known pharmaceutical components. Ex.

1011 ¶¶ 230–234. Dr. Murthy further testifies that one of ordinary skill in

the art would have had a reasonable expectation of success of combining the

known components given that it was known that high-swelling polymers

were preferred for pharmaceutical lacquer formulations and that the use of

P-HEMA was a well-known high-swelling hydrogel. Id. at 235–236.

Patent Owner contends that one would not have combined the

teachings of the cited references due, among other things, to the structural

differences between Austin and Freeman and that Friedman fails to teach a

boron-containing compound. Prelim. Resp. 55–57.

Based on the record presented, we credit the testimony of Dr. Murthy

as it is consistent with the teachings of the prior art of record. We conclude,

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on this record, that Petitioner has provided sufficient and credible evidence

to demonstrate that one skilled in the art would have combined the known

antifungal tavaborole with the known nail treatment formulations for their

known use (nail drug delivery systems and treating nail onychomycosis) to

achieve a predictable result (forming an effective nail lacquer delivery

composition with an antifungal compound to treat onychomycosis).

6. Austin, Freeman, Friedman, and Samour: Claim 9

Claim 9 depends from claim 1 and requires that the pharmaceutical

composition comprises about 56% ethanol; about 14% water; about 15%

poly(2-hydroxyethyl methacrylate); about 5% dibutyl sebacate and about

10% of tavaborole.

Regarding claim 9, Petitioner and Patent Owner present essentially the

same reasons as provided above with respect to claims 7 and 8. For the

reasons stated above regarding the challenges with respect to claims 7 and 8,

we likewise determine that Petitioner has made a sufficient showing as to

why a person of ordinary skill in the art would have combined the teachings

of Austin, Freeman, Friedman and Samour and arrived at the composition of

claim 9.

7. Austin, Freeman, and Shapiro: Claim 17

Claim 17 depends from claim 14, which depends from claim 1. Claim

17 requires the fungus or yeast be selected from Trichophyton concentricum,

Trichophyton violaceum, Trichophyton schoenleinii, Trichophyton

verrucosum, Trichophyton soudanense, Microsporum gypseum,

Microsporum equinum, Candida guilliermondii, Malassezia globosa,

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Malassezia obtuse, Malassezia restricta, Malassezia slooffiae and

Aspergillus flavus.

Shapiro describes antifungal compounds for treating fungal infections.

Ex. 1008, 1:15–16. Shapiro teaches that its antifungal compounds are

effective against fungi including Trichophyton rubrum, Trichophyton

mentagrophytes, Trichophyton verrucosum, and Microsporum gypseum. Id.

at 2:3–14.

Petitioner states that one skilled in the art would have combined the

teachings of Austin, Freeman and Shapiro because Freeman and Shapiro

teach treating or inhibiting onychomycosis in humans with pharmaceutical

drug formulations and Shapiro describes antifungal compounds that have

cross-activity against a number of different fungi linked to onychomycosis.

Pet. 60.

Patent Owner contends that Shapiro’s compounds are structurally

different than those of Austin and Freeman. Prelim. Resp. 59–60. Patent

Owner states that one skilled in the art would not have expected a

formulation of tavaborole for topical application would succeed. Id. at 60.

Claims 17 is a composition claim, as opposed to a method claim. On

this record, Patent Owner does not provide a sufficient explanation as to how

its composition claims for treating the recited fungi differs from a

composition arrived at from the teachings of Austin and Freeman for treating

onychomycosis caused by Candida albicans. See Pet. 29–36. Further,

Shapiro teaches one skilled in the art that antifungal drugs may exhibit

cross-activity between fungi linked to onychomycosis and fungi linked to

other fungal infections. Ex. 1011, ¶ 272.

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III. CONCLUSION

For the foregoing reasons, we determine that the information presented

in the Petition, notwithstanding the Preliminary Response, establishes that

there is a reasonable likelihood that Petitioner would prevail in

demonstrating unpatentability of claims 1–24. The Board has not yet made a

final determination of the patentability of any of claims 1–24 of the ’657

patent.

IV. ORDER

Accordingly, it is

ORDERED that pursuant to 35 U.S.C. § 314, an inter partes review is

hereby instituted as to claims 1–24 of the ’657 patent on the following

grounds:

References Basis Claims challenged

Austin and Freeman § 103 1–2, 4–5, 10–16 and 18–24

Austin, Freeman, and Chaudhuri § 103 6 Austin, Freeman, and Samour § 103 3, 7 Austin, Freeman, Friedman, and Atlas § 103 8 Austin, Freeman, Friedman, and Samour § 103 9 Austin, Freeman, and Shapiro § 103 17

FURTHER ORDERED that pursuant to 35 U.S.C. § 314(c) and 37

C.F.R. § 42.4, notice is hereby given of the institution of a trial commencing

on the entry date of this decision.

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PETITIONER:

Jeffrey Blake jblake@merchantgould.com

Kathleen Ott kott@merchantgould.com

PATENT OWNER:

Andrea Reister areister@cov.com

Enrique Longton elongton@cov.com