Hedge fund manager aims to profit by contesting patents and shorting stock in targeted company
A process created in 2011 to help companies fight patent trolls is being used by a hedge fund manager who contests patents and bets against the targeted company’s stock through short sales.
The hedge fund manager is Kyle Bass, head of Hayman Capital Management, who made money through short sales of subprime securities in advance of the housing bust, the Wall Street Journal reports.
Bass relies on an administrative process called Inter Partes Review to challenge drug patents through a group he founded called the Coalition for Affordable Drugs. Petitions filed through this process are heard by a panel of administrative patent judges, offering a quicker and cheaper alternative to federal courts.
Bass’ latest challenge seeks to invalidate a patent for the narcolepsy drug Xyrem, held by Jazz Pharmaceuticals. Previously he challenged a drug patent owned by biotech company Acorda Therapeutics, the New York Times DealBook blog reported in February.
