ChromaDex Corp. (CDXC)

[Milarepa]

@JFK, I'm not really sure how to think about the "worst case scenario," without factoring in likelihoods that are themselves uncertain.

So it would SEEM straight-forward right now that the "worst case scenario" would be if the '807 patent and Claim 2 of the '086 patent were preserved, and claims 1 and 3-5 of the '086 Patent were invalidated.

If that occurred, and if there were no other patents protecting ChromaDex's IP on NR, then it would seem that NR formulations would be protected in concentrations above 25%, and not below 25%. Which means (if there were no other ChromaDex IP implicated), that competitors could produce full-size pills at one-quarter the strength and avoid patent infringement liability.

That's obviously a worse product -- with giant pills or a multitude of them -- but not necessarily a non-viable product.

But it just feels like a nonsensical outcome. I would have thought that the more intelligent construction of the term "isolated" for the PTAB would have been "a primary ingredient in the product, as opposed to something incidentally present." That would distinguish milk and fit with people's normal understanding of what happens when something has been isolated, and it doesn't contain any completely arbitrary elements.

I predict that at the IPR trial Steptoe will take issue with the 25% construction as I indicated, or assert something much smarter than that. And if the PTAB doesn't accept Steptoe's argument, then the USCA for the Federal Circuit will have a chance to weigh in.

But before we go way down that road, there are all kinds of other wacky interpretations in the PTAB's arguments against Claims 1, 3, 4 and 5 of the '086 Patent that don't at all seem self-evident to me, and are likely to be aggressively challenged.

And besides that, ChromaDex has additional patents in play.

And although I haven't seen a chemical assay of Elysium Basis, I ASSUME that it originally contained and continues to contain NR at levels above 25%, so even in the worst-case-scenario it would seem that the PTAB has already determined that Elysium's re-formulated Basis infringes both patents, which would appear to be a MAJOR liability for ChromaDex's only known competitor.

So if you sum that up and say, "What's the worst case scenario?"

I honestly don't know.