Articles Posted in Hedge fund challenges patents

Kyle Bass, head of Hayman Capital Management LP is utilizing a newly created patent petition process to seek to invalidate various pharmaceutical patents, ostensibly to make pharmaceuticals less costly. However, according to the Wall Street Journal (April 8, 2015 B1), Mr. Bass’s fund bets against companies it believes are spurious and invests in those that would profit if the patents are invalidated.

One of the pharmaceutical companies under challenge is Jazz Pharmaceuticals and its patent for Xyrem, a narcolepsy drug which showed sales in excess of $779 million last year.

Bass is the creator of the Coalition for Affordable Drugs. This group filed the patent challenges with the U.S. Patent and TradeMark Office under an administrative process called Inter Parties Review (IPR) which allows petitions to strike down patents and was created by Congress in 2011. The reason Congress made this law was to help companies battle patent trolls, non-operating companies which file patents and collect moneys from companies they say are infringing on their patent rights.