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Neurelis, Inc. v. Aquestive Therapeutics, Inc.
Citation: Not availableDocket: D077984
Court: California Court of Appeal; November 16, 2021; California; State Appellate Court
Original Court Document: View Document
Neurelis, Inc. and Aquestive Therapeutics, Inc., both pharmaceutical companies, are engaged in developing treatments for acute repetitive seizures using diazepam. Neurelis alleges that Aquestive conducted a multi-year anti-competitive campaign to prevent FDA approval of Neurelis's drug, leading to a lawsuit for defamation, malicious prosecution, and violation of California's unfair competition law (UCL). Aquestive responded with an anti-SLAPP motion to strike Neurelis's complaint, which the superior court partially granted, dismissing the defamation claim but denying it for the other two causes of action. Aquestive appealed the denial of its motion regarding malicious prosecution and UCL claims, while Neurelis cross-appealed concerning the defamation claim. The appellate court concluded that some of the conduct relevant to the defamation claim fell under the commercial speech exception to the anti-SLAPP statute, thus reversing the superior court's ruling on this issue. However, the court upheld the dismissal of the malicious prosecution claim, finding Neurelis did not demonstrate a likelihood of success on the merits. The appellate court affirmed in part and reversed in part, remanding the case with instructions to strike allegations related to Aquestive's protected petitioning activities and the malicious prosecution claim while allowing the UCL and defamation claims to proceed based on unprotected conduct. Neurelis is incorporated in Delaware and based in San Diego, while Aquestive is based in New Jersey. For over two decades, Diastat® was the sole approved treatment for Acute Repetitive Seizures (ARS), necessitating rectal administration. In 2007, Neurelis was established to develop an intranasal delivery system for diazepam. By 2008, Neurelis created Valtoco, a novel formulation for nasal delivery, and initiated discussions with the FDA in 2011 after successful nonclinical studies. A Phase 1 human proof-of-concept study demonstrated a 96% bioavailability of Valtoco compared to intravenous diazepam, leading to a pre-investigational new drug application with the FDA in November 2011. The FDA accepted the investigational new drug application for Valtoco on February 6, 2012, and Neurelis continued development through 2014. On December 22, 2015, Valtoco received orphan drug designation from the FDA, providing Neurelis with development incentives but not confirming the drug's safety or efficacy. On January 5, 2017, Valtoco received fast track designation for expedited review. Neurelis filed a new drug application for Valtoco on September 24, 2018, with the FDA still reviewing it as of December 9, 2019. During Neurelis's development, Aquestive was also working on its own ARS treatment, Libervant, which used a buccal delivery system of fast-melt strips instead of nasal administration. Although Aquestive expressed interest in partnering with Neurelis, Neurelis declined. In June 2017, during a meeting to discuss potential collaboration, Neurelis's CEO presented his commitment to developing Valtoco for the epilepsy community. However, Aquestive's CEO dismissed these concerns, emphasizing the company's focus on investor returns rather than patient care. Kendall and Barber sought a meeting with Chambliss in January 2018 to discuss potential proposals about products, as the disparity in progress between their diazepam programs posed challenges for partnership. During the meeting, Chambliss perceived Kendall and Barber’s intentions as attempts to gain competitive intelligence on Neurelis and its product, Valtoco. Kendall aimed to involve Aquestive in a strategic partnership with Neurelis, but Chambliss countered that Aquestive was not a suitable partner. Aquestive went public with an IPO on July 24, 2018, filing a Form S-1 with the SEC, prominently featuring Libervant. Although its development was behind Valtoco, Aquestive claimed it was further ahead than others pursuing alternative diazepam delivery methods. They acknowledged that if competitors received FDA approval for their diazepam formulations first, it would prevent Aquestive from marketing Libervant for seven years. Neurelis contended that when Aquestive filed its Form S-1, it had not conducted any clinical trials for Libervant and alleged that Aquestive's representations were misleading, particularly in light of Neurelis's advanced development of Valtoco. Facing development challenges and a decline in stock value, Aquestive threatened to file three inter partes review (IPR) petitions against Neurelis’s patent unless Neurelis waived its orphan drug exclusivity. This prompted Chambliss to meet with Kendall and Barber on January 9, 2019, where Kendall refused to disclose petition details unless Neurelis agreed to collaborate. Despite the presence of a Neurelis board member and an intellectual property attorney, no agreement was achieved. Subsequent discussions revealed that Aquestive would not share petition details without the exclusivity waiver, leading Chambliss to dismiss the proposal as unreasonable. A week later, after receiving partial details about the petitions, Neurelis’s legal counsel deemed them meritless, interpreting them as an extortion attempt for the waiver. Chambliss informed Kendall on January 23, 2019, that Neurelis would not sign the waiver, advocating that funds for litigation would be better spent on the epilepsy community. Despite this, Kendall indicated that Aquestive would proceed with the petitions, which were filed on January 29, 2019, challenging Neurelis’s U.S. Patent No. 9,763,876. The Board denied one petition due to a lack of reasonable likelihood of success on invalidity claims. The Board denied the institution of a review for one petition under 35 U.S.C. § 325(d) because it presented the same or substantially similar prior art and arguments already addressed during the original prosecution of the '876 Patent. A review was instituted on a third petition on August 13, 2019, which remained pending at the time of the operative complaint. Additionally, Aquestive submitted a citizen petition to the FDA on November 1, 2019, requesting a stay on the approval of Neurelis’s new drug application for Valtoco until further clinical studies were completed and asserting that Valtoco was not clinically superior or a major contribution to patient care, which Neurelis argued would negate orphan drug exclusivity. Neurelis countered that Aquestive's claims were based on misleading data, responding to the FDA on November 22, 2019, to label the petition as meritless. A subsequent supplemental petition from Aquestive requested Neurelis to reformulate Valtoco due to the inclusion of Vitamin E, which Neurelis again claimed was based on inaccurate information. During a November 6, 2019 investors call, Kendall stated that Libervant was preferred by over 80% of patients compared to nasal sprays, and upon FDA approval, Libervant would provide a consistent dosage for most patients. In response to Aquestive’s actions, Neurelis filed suit for violations of the UCL, defamation, and malicious prosecution. In reaction, Aquestive filed an anti-SLAPP motion, claiming the causes of action were based on protected speech. Neurelis opposed this, asserting that threats and statements made to investors were not protected under the anti-SLAPP statute and fell under the commercial speech exemption, arguing it had a likelihood of success on the merits. The superior court requested supplemental briefing on two issues: the commercial speech exemption for investor statements and whether the denial of the Board petitions could support a malicious prosecution claim. After reviewing the briefs and hearing oral arguments, the court partially granted and denied the anti-SLAPP motion, striking the defamation claim but allowing the UCL and malicious prosecution claims to proceed. The court found the investor comments did not qualify for the commercial speech exemption and that the denial of the petitions could support a malicious prosecution claim. Ultimately, the court concluded Neurelis did not meet its burden regarding the defamation claim but did for the UCL and malicious prosecution claims. Aquestive is appealing the ruling concerning the UCL and malicious prosecution claims. Neurelis is appealing the order that granted a motion related to a defamation claim, and the court has consolidated this appeal with another. The anti-SLAPP statute, enacted in 1992, aims to protect defendants from frivolous lawsuits that could inhibit their rights to free speech and petition on public issues. The statute allows defendants to file a special motion to strike claims arising from activities that are in furtherance of these constitutional rights. The court evaluates anti-SLAPP motions in two steps: 1. The defendant must demonstrate that the claims arise from protected activity. If successful, the burden shifts to the plaintiff to show that their claims have at least minimal merit. A claim can be struck only if the speech or activities themselves are the basis for the claim, not merely evidence of liability. 2. The court assesses whether the plaintiff has made a legally sufficient claim supported by competent evidence. The plaintiff cannot rely solely on their complaint; they must provide admissible evidence to sustain a favorable judgment. The court accepts the plaintiff’s evidence as true while evaluating the defendant’s evidence solely to see if it defeats the claim as a matter of law. Neurelis has three claims against Aquestive: violation of the UCL, defamation, and malicious prosecution. The malicious prosecution claim is considered protected under the anti-SLAPP statute, as established by case law. The analysis will focus next on the UCL and defamation claims, with the UCL claim being a mixed claim based on both protected and unprotected conduct. The UCL claim against Aquestive is based on allegations of "extortionist behavior" in litigation to coerce Neurelis into waiving orphan drug exclusivity, alongside statements made by Aquestive in a citizen petition and to investors. While Aquestive's anti-SLAPP motion does not address its threats to Neurelis, this aspect of the UCL claim survives the appeal. The focus narrows to Aquestive’s statements in the citizen petition and to investors, which Neurelis argues violate the UCL and constitute defamation. Aquestive contends these statements are protected under the anti-SLAPP statute, while Neurelis claims they fall under the commercial speech exception outlined in section 425.17(c), which was enacted to counteract the misuse of the anti-SLAPP statute. Section 425.17(c) excludes claims related to commercial speech if: 1) the defendant is primarily engaged in selling goods or services; 2) the claim arises from factual representations about the defendant's or a competitor's business; 3) the statements were made to promote or secure sales; and 4) the audience meets specific criteria. The burden of proving this exemption lies with the party asserting it. The legislative intent behind section 425.17 aligns with constitutional principles governing commercial speech, as discussed in Kasky v. Nike, Inc., which identifies distinguishing factors between commercial and noncommercial speech. The applicability of the commercial speech exemption is assessed independently, without considering the likelihood of the plaintiff's success on the merits. In examining whether Aquestive’s comments to investors qualify for this exemption, Neurelis asserts that the first requirement is met since Aquestive is primarily engaged in selling pharmaceuticals and securities, a point that Aquestive does not dispute. Neurelis asserts that section 425.17, subdivision (c)(1) is applicable because investor statements pertain to both Neurelis and Aquestive and their respective ARS drugs, thereby relating to business operations and products of either a business competitor or the company itself. For instance, in a 2018 SEC Form S-1, Aquestive claimed that its product Libervant was further along in development than competitors' diazepam versions. Additionally, a November 6, 2019 investor call highlighted that Libervant was preferred by over 80% of surveyed patients compared to nasal sprays. These statements implicitly reference Neurelis's product, Valtoco, despite not naming it directly. Neurelis rebuts Aquestive's argument that the lack of direct mention of Neurelis or Valtoco negates the applicability of subdivision (c)(1), asserting that reference to a competitor is not a requirement. Furthermore, Neurelis emphasizes that the investor statements were aimed at an audience of potential buyers or customers of Aquestive’s pharmaceuticals and securities, citing statements made at industry conferences and investor calls, which were acknowledged as public forums. Despite this, Aquestive contends that the intended audience does not include medical professionals interested in its products, but rather investors focused on stock purchases, arguing this limits the applicability of the commercial speech exception. Moreover, Aquestive claims that the commercial speech exception pertains only to comparative advertising and relies on three federal district court cases to support its position that statements made to investors should not be classified as commercial speech. However, Neurelis points out that these cases do not address the specific commercial speech exception defined in section 425.17, subdivision (c), as they pertain to the definition of actionable commercial speech under the Lanham Act, which focuses solely on "commercial advertising or promotion." Federal courts have defined 'advertising' as speech aimed at 'consumers,' while Section 425.17, subdivision (c) specifically addresses commercial speech exceptions without using the term 'advertising,' explicitly including 'securities' among the 'goods or services' covered. The case of Neuralstem, Inc. v. StemCells, Inc. serves as a reference, where Neuralstem's statements regarding StemCells' patents were deemed to fall under the commercial speech exception, as they were directed at actual or potential investors. Neurelis argues that its situation is similar, as both it and Aquestive are business competitors and made statements to investors about their products. However, Aquestive contends that the commercial speech exception applies only to communications made to customers of its drugs, not to investors buying stocks, arguing that this would improperly broaden the scope of the exemption. Despite this distinction, the court notes that subdivision (c)(2) of Section 425.17 identifies the audience for the commercial speech exception broadly, including anyone likely to influence potential buyers. Neurelis highlights that some statements were directed at industry executives and institutional investors, reinforcing the applicability of the commercial speech exception in this context. Neurelis contends that the audience receiving statements about Libervant could be expected to share this information with the medical community, potentially influencing purchasing decisions. However, the legal interpretation requires no assumptions about this influence. The statements pertain to Aquestive’s development of Libervant, highlighting its advanced status compared to competitors and noting that over 80% of patients prefer Libervant over nasal sprays. There is an emphasis on the urgency of obtaining FDA approval to avoid a seven-year marketing barrier against competing drugs. Although Aquestive aimed to attract investment for funding its pharmaceutical sales, Libervant was not yet on the market when these comments were made. The audience, consisting of investors, could still impact potential buyers by supporting the company's market entry. Therefore, the statements are classified as commercial speech and fall under the anti-SLAPP statute's exception. This case involves two competing pharmaceutical firms rather than a plaintiff attempting to suppress free speech, aligning with the legislative intent behind the commercial speech exemption. Neurelis also briefly argues that a citizen petition filed by Aquestive should be considered under the same commercial speech exception, citing factors such as Aquestive’s business focus, factual representations in the petition, and its context within a regulatory process. Neurelis draws a parallel to a prior case involving false statements made by a pharmaceutical company before regulatory bodies, asserting that the current situation is analogous. Aquestive argues that the commercial speech exception does not apply to its citizen petition since the petition addresses Neurelis's drug rather than its own, thus failing to constitute advertising. It asserts that the petition is not part of the regulatory approval process as it only discusses Valtoco and does not mention Libervant, which aligns with the requirements of subdivision (c)(2) of section 425.17. The excerpt explains that a citizen petition allows individuals to raise concerns regarding FDA-reviewed products and can request regulatory actions. It must include a description of the requested FDA action and a certification affirming that all relevant information, including unfavorable data, is included. Neurelis does not present an argument suggesting that the commercial speech exception can override the First Amendment right to petition the government. Although Neurelis cites the DuPont case, the excerpt clarifies that DuPont involved false statements related to pharmaceutical marketing and does not provide a basis for applying the commercial speech exception to a citizen petition. The citizen petition is characterized as protected activity under the anti-SLAPP statute, which safeguards statements made in connection with issues under review by governmental bodies. The right to petition is described as fundamental to the governance process, allowing citizens to advocate for changes. Additionally, statements made in citizen petitions are generally immune from civil liability under the Noerr-Pennington doctrine. The anti-SLAPP statute protects citizen petitions, which apply to various tort claims, including unfair competition and interference with contract. Neurelis's claims involve both protected (the citizen petition) and unprotected conduct (private threats and investor statements). In analyzing these claims under the anti-SLAPP framework, it is determined that only the citizen petition and related protected conduct are relevant for the second prong of the analysis. Neurelis concedes that the challenged statements relate to a public interest issue but argues against their protection under the commercial speech exception in section 425.17, subdivision (c). This section was enacted to prevent misuse of the anti-SLAPP statute and defines a commercial speech exception that applies when claims are about businesses primarily engaged in selling goods or services and arise from factual representations about those businesses made for commercial purposes. The burden of proving applicability of this exception lies with the party invoking it. The legislative history aims to align with constitutional principles regarding commercial speech, as established in Kasky v. Nike, which differentiates commercial from noncommercial speech based on the speaker, audience, and content. Section 425.17 must be interpreted narrowly, in line with the precedents set in Simpson Strong-Tie Co. Inc. v. Gore and JAMS, Inc. v. Superior Court. The applicability of the section 425.17 exemption is the first prong of the two-pronged test under section 425.16, with no consideration of the plaintiff's likelihood of prevailing on the merits. The court independently reviews whether the commercial speech exemption applies. In assessing whether Aquestive’s comments to investors qualify for this exemption, Neurelis argues that the first requirement is met since Aquestive is engaged in selling pharmaceuticals and securities, a point Aquestive does not dispute. Neurelis further asserts that the investor statements pertain to Aquestive and its products, fulfilling the criteria that they relate to business operations or goods, as outlined in section 425.17, subdivision (c)(1). Specific examples include statements made by Aquestive in a 2018 SEC filing and a November 2019 investor call, which reference its product Libervant and implicitly compare it to Valtoco, a competing product. Although Aquestive claims that the statements do not explicitly mention Neurelis or Valtoco, the requirement does not necessitate direct mention of competitors; it suffices that they relate to Aquestive's products. Thus, the court dismisses Aquestive’s argument regarding this factor. Neurelis also contends that the statements were directed at an audience of potential buyers or influencers of Aquestive’s pharmaceuticals and securities, satisfying section 425.17, subdivision (c)(2). They highlight the context in which these statements were made, targeting industry executives and investors, and admit that these representations were part of a public forum. In contrast, Aquestive argues that the intended audience was not the medical community, but rather investors interested in stock, claiming this limits the applicability of the commercial speech exception. Additionally, Aquestive posits that the exemption applies solely to comparative advertising, suggesting a narrower interpretation of commercial speech. The excerpt examines the legal context surrounding the commercial speech exception under California's anti-SLAPP statute, specifically section 425.17, subdivision (c). It highlights that previous cases have primarily focused on false or misleading advertising but have not addressed situations where a defendant makes allegedly false statements about itself or its competitors to investors and the public. In the absence of relevant California cases, Aquestive relies on three federal district court cases to argue that statements made to investors do not qualify as commercial speech. However, these cases have not addressed the specific commercial speech exception under section 425.17, subdivision (c), which explicitly includes “securities” among the goods or services it covers. The excerpt further notes that the California Supreme Court has indicated that only a subset of commercial speech is exempt under this statute, primarily comparative advertising. The only relevant case addressing the commercial speech exception related to investor communications is Neuralstem, Inc. v. StemCells, Inc., where false statements regarding patent value were alleged to harm a competitor's intellectual property. The analysis underscores that the federal cases cited do not provide guidance on the application of the commercial speech exception in this context. Neuralstem claimed its statements were protected under the anti-SLAPP statute, but the court applied California law and found the commercial speech exemption in subdivision (c) of section 425.17 applicable. The court noted that Neuralstem's public statements were aimed at actual and potential investors, highlighting that the company is publicly traded and targeted a specific audience. Neurelis argued that its situation was similar to Neuralstem's, as both Neurelis and Aquestive are business competitors, and that Aquestive made factual statements about its product and Neurelis’s product to investors. However, Aquestive contended that the commercial speech exception only applies to communications directed at customers or potential customers of its products and not to investors. It argued that it is primarily in the business of selling pharmaceuticals, not securities, and thus, any application of the commercial speech exception to investor communications would improperly broaden the exemption. The court disagreed with Aquestive's distinction, asserting that subdivision (c)(2) of section 425.17 defines the intended audience as actual or potential buyers or customers. Neurelis noted that some investor statements were made to industry executives and investors who could influence potential buyers, suggesting that this audience might share information about the products with the medical community. Under the statute's plain language, no assumptions are required regarding the investor comments related to Aquestive’s Libervant development. Aquestive highlights that Libervant is further along in development compared to competing drugs and notes that over 80 percent of patients prefer it over nasal sprays. The comments stress the urgency of obtaining FDA approval for Libervant to avoid being barred from marketing for seven years. Aquestive acknowledges that these statements were made to attract investment to fund its pharmaceutical sales, specifically to gain FDA approval and market Libervant for acute rescue seizures (ARS). At the time of the statements, Libervant was not yet on the market, and there were no consumers able to purchase it. However, the audience was in a position to influence potential buyers by investing in Aquestive to facilitate Libervant's market entry before competitors, such as Valtoco. Given these circumstances, the investor statements are classified as commercial speech, falling under the exception to the anti-SLAPP statute in section 425.17, subdivision (c). This classification aligns with the intent of the legislation to exclude purely commercial disputes from anti-SLAPP protections, as established in case law. The current case involves two rival pharmaceutical companies competing for FDA approval, with Neurelis suing Aquestive for alleged extortion and false statements regarding their drugs. This situation does not pertain to protecting constitutional free speech rights, but rather involves commercial speech, thus justifying the application of the commercial speech exception in section 425.17, subdivision (c). Additionally, Neurelis briefly claims that the citizen petition also falls under this commercial speech exception. Neurelis asserts that Aquestive is engaged in the business of selling goods and that the citizen petition it filed contains factual representations within a regulatory approval context. Neurelis argues that section 425.17, subdivision (c) aims to overturn DuPont Merck Pharmaceutical Co. v. Superior Court, which involved false statements made by a pharmaceutical company to regulatory agencies. Neurelis claims the citizen petition is similar to the defendant's actions in DuPont, as it pertains to making false statements to regulatory bodies and the public about its pharmaceutical products. In contrast, Aquestive argues that the commercial speech exception does not apply to the citizen petition, as it addresses Neurelis’s drug rather than its own. It contends that the petition is not part of the regulatory approval process for its drug since it only references Valtoco and not Libervant. Neither party explains the citizen petition process, which allows individuals to raise concerns about FDA-reviewed products. A citizen petition can request FDA action and must include a certification of completeness from the petitioner. Neurelis does not provide an argument suggesting that the commercial speech exception can override the First Amendment right to petition the government. Although Neurelis claims the exception was intended to address the DuPont case, no grounds are provided to apply this exception to their citizen petition. The DuPont case involved allegations of false statements, which the court found protected under the anti-SLAPP statute, categorizing the alleged false statements into two groups. Lobbying and activities aimed at influencing regulatory and legislative bodies, along with advertising and public relations targeted at the medical field and the public, are recognized. The plaintiffs in DuPont did not base their claims on the defendant's citizen petition, and the commercial speech exception is not applicable to that petition. The citizen petition is protected under California's anti-SLAPP statute, defined as any communication related to issues under consideration by governmental bodies, and is considered an essential democratic right. The Noerr-Pennington doctrine further protects statements made in citizen petitions from civil liability. As such, if claims are founded on the citizen petition, the analysis must proceed to the second prong of the anti-SLAPP evaluation. Two of Neurelis's claims incorporate both protected and unprotected conduct, as the unfair competition claim involves private threats, investor statements, and the citizen petition, while the defamation claim also involves investor statements and the citizen petition. The second prong requires determining if Neurelis has established a probability of prevailing on the merits. A claim must meet both prongs of the anti-SLAPP statute—arising from protected speech and lacking minimal merit—to be dismissed under the statute. The evaluation resembles a summary judgment process to ascertain if Neurelis's showing is sufficient for a favorable judgment, with the threshold for minimal merit being low, allowing claims with even slight merit to proceed. The superior court determined that statements made in a citizen petition were protected under the litigation privilege, which Neurelis contested, arguing the court incorrectly placed the burden on it to demonstrate that the statements were not privileged, rather than requiring Aquestive to prove the privilege applied. Neurelis asserted it only needed to show a probability of success on its unfair competition law (UCL) and defamation claims regarding the citizen petition. If unsuccessful, the allegations must be dismissed. The court clarified that Neurelis does not need to prove success for claims based on other conduct, such as private threats or investor statements. Aquestive contended that it had sufficiently demonstrated the applicability of the litigation privilege merely by presenting the citizen petition, which it claimed was filed as part of a federal proceeding. However, the court emphasized that Neurelis had the stronger argument regarding the burden of proof, stating that the defendant must demonstrate the privilege's applicability during the anti-SLAPP analysis. Though Aquestive argued it met this burden, the court found it had not adequately done so. The litigation privilege, according to Civil Code section 47, subdivision (b), protects communications made in judicial or quasi-judicial proceedings when they are related to the litigation, allowing for freedom of access to courts without the fear of subsequent litigation for those communications. Aquestive has failed to assert that the citizen petition is part of any judicial or quasi-judicial proceeding, providing only that it was filed under federal law without detailing the process. Its reference to Pacific Lumber is unhelpful, as that case involved CEQA proceedings, and Aquestive has not justified why this is comparable to the FDA’s citizen petition process. The company has not sufficiently argued that its statements in the citizen petition are protected by the litigation privilege under Civil Code section 47, merely assuming that such protection exists without providing evidence. Moreover, Aquestive contends that even if the litigation privilege is inapplicable, Neurelis cannot counter the Noerr-Pennington doctrine, which protects petitioning the government from antitrust liability. This doctrine has been extended beyond antitrust law to cover various government petitioning activities. However, an exception exists for sham efforts to influence government actions, which are not protected. A two-part test determines if petitioning actions fall outside this doctrine: first, the activity must be objectively baseless, and second, the intent must aim to interfere with a competitor's business through government processes rather than the outcomes of those processes. Neurelis claims that Aquestive has not met its burden to prove the Noerr-Pennington doctrine's applicability. The court notes that it is not ruling out the possibility of the litigation privilege covering statements made in a citizen petition to the FDA, but rather that Aquestive has not substantiated its claim to that effect. Defendants must demonstrate a likelihood of success on their defenses as part of the anti-SLAPP analysis. However, Aquestive faces a low burden in this context, as Neurelis's claims partially rely on statements made by Aquestive in a citizen petition to the FDA, a process allowing private entities to request government action. The Noerr-Pennington doctrine applies here, protecting Aquestive’s petition unless proven to be a sham. Neurelis has not met this burden, arguing that Aquestive's petition aimed to delay the approval of Valtoco and was therefore anticompetitive. Although the FDA suggested that the petition might have been intended to delay approval, it did not deem the petition objectively baseless. Neurelis cited FDA comments indicating that publicly available information about nasal sprays undermined the validity of Aquestive's complaints. However, the FDA noted that the omission of this information did not prove a lack of merit in all of Aquestive's claims, particularly regarding requests for studies on Valtoco and comparisons with Diastat. Ultimately, the FDA found that it could not deny the citizen petition as it raised valid scientific or regulatory issues. Neurelis argues that a citizen petition, potentially not needing to be summarily denied to be deemed “objectively unreasonable” under the Noerr-Pennington doctrine, lacks sufficient support for such a claim as Neurelis has not provided arguments addressing additional requests within the petition. The court notes that it is not responsible for identifying arguments on Neurelis's behalf. Neurelis's malicious prosecution claim is based on three Inter Partes Review (IPR) petitions initiated by Aquestive, which Neurelis contends lacked reasonable grounds, especially after being informed by Neurelis itself. The Board rejected two of these petitions, and Neurelis anticipates a favorable outcome for the third. Neurelis asserts that Aquestive's motives were malicious, aimed at coercing Neurelis to relinquish orphan exclusivity for Valtoco, and that Neurelis incurred significant costs and lost resources in responding to these petitions. The IPR process, established under the Leahy-Smith America Invents Act, serves as a more efficient alternative to the previous inter partes reexamination system, promoting improved patent quality and reduced litigation costs. It allows any party, except the patent owner, to request the cancellation of patent claims based on specific grounds related to prior art. A petition must detail the claims challenged, the grounds for those challenges, and supporting evidence. Following the filing of the petition, the patent owner can submit a preliminary response, and the Board must determine if there is a reasonable likelihood of the petitioner succeeding on at least one claim; if not, the petition is denied. Under 35 U.S.C. § 314, the Patent Trial and Appeal Board (PTAB) must decide whether to institute an inter partes review (IPR) within three months after a patent owner's preliminary response or by the deadline for such a response. The PTAB's determination regarding institution is final and nonappealable. If instituted, the IPR is conducted by three administrative patent judges, with a final determination required within one year, extendable by six months for good cause. The final decisions are appealable to the Federal Circuit. In this case, Aquestive filed three IPR petitions against the '876 Patent on the same day. The first (IPR2019-00449) challenged a subset of claims on anticipation and obviousness grounds, while the second (IPR2019-00450) challenged all claims solely on obviousness using different prior art combinations. The third petition (IPR2019-00451) also challenged all claims based on another combination of prior art. Each petition was extensive, accompanied by numerous expert declarations and exhibits. The Board declined to institute reviews for the first two petitions on August 1, 2019, finding no reasonable likelihood of success for Aquestive. The Board based its decision on § 325(d), noting that the prior art had already been considered and rejected during the patent's prosecution. The Board instituted review of the third petition on August 13, 2019, which ultimately led to the invalidation of the '876 Patent on August 6, 2020. This decision was affirmed by the Federal Circuit. Regarding malicious prosecution, three elements must be proven: 1) the defendant pursued a claim without objective probable cause; 2) the claim was pursued with subjective malice; and 3) the underlying action was resolved in favor of the plaintiff. The superior court ruled that Neurelis demonstrated a probability of success on three elements related to its malicious prosecution claim, resulting in the denial of Aquestive's anti-SLAPP motion. Aquestive contends this conclusion is erroneous for three reasons: (1) the denial of an Inter Partes Review (IPR) petition cannot serve as a basis for malicious prosecution; (2) the IPR petitions did not conclude favorably for Neurelis; and (3) Neurelis failed to provide sufficient evidence that Aquestive filed the IPR petitions without probable cause. The court indicated that an action is considered pursued without probable cause if it was not legally tenable at the time it was initiated or prosecuted. Simply lacking merit in the end does not imply that a prior action lacked probable cause; it must be shown that all reasonable lawyers would agree the suit was completely meritless based on the facts available to the defendant at the time of filing. The court concluded that Aquestive did not demonstrate a reasonable likelihood of success on the IPR petitions, indicating they were meritless and filed without probable cause. Aquestive argues that the court conflated two elements of malicious prosecution and asserts that a favorable termination does not preclude a finding of probable cause. Neurelis maintains that the court did not err and that its finding of lack of probable cause was based solely on the denial of the petitions, without any additional evidence cited by Neurelis to support this lack of probable cause. Neurelis's argument that it demonstrated a lack of probable cause relies solely on the Board's written decisions denying the ‘449 and ‘450 Petitions without review. For the ‘449 Petition, Neurelis claims the denial indicates that Aquestive did not show a reasonable likelihood of prevailing, yet it fails to explain how this denial proves a lack of probable cause. Aquestive counters that the standard of "no reasonable likelihood of prevailing" is more stringent than "probable cause," asserting that the Board's finding does not equate to a lack of probable cause for bringing the petition. Neurelis focuses on proving that Aquestive lacked probable cause for the ‘450 Petition, suggesting that failure to show probable cause in this instance suffices for its claims. Citing Cuevas-Martinez v. Sun Salt Sand, Inc., Neurelis argues that demonstrating a lack of probable cause for any claim in the prior action meets its burden under anti-SLAPP. However, Neurelis also references comments from the Board’s denial of the ‘449 Petition, claiming they suggest a lack of probable cause. Although the Board criticized Aquestive for making "bald assertions" lacking sufficient evidence, Neurelis does not address the other challenges in the ‘449 Petition or how their rejection affects the probable cause argument. Neurelis’s argument is weakened by its failure to discuss the entirety of the Board's decision and its evolution during the anti-SLAPP motion opposition, particularly in light of the ‘451 Petition, which invalidated the ‘876 Patent. Consequently, Neurelis admits it lacks evidence showing that Aquestive lacked probable cause for the ‘449 Petition, undermining its claim that the petitions were filed merely to extort Neurelis regarding orphan drug exclusivity for Valtoco. The Board's conclusions do not align with Neurelis's assertions regarding the validity of the petitions. Aquestive's petition for inter partes review was denied by the Board based on the determination that the same prior art arguments had already been considered and rejected during the prosecution of the ‘876 Patent. The Board stated that revisiting these arguments would be a misuse of its resources. Neurelis argued that this denial demonstrated that Aquestive lacked probable cause for filing the ‘450 Petition. However, the Board issued a comprehensive 22-page decision explaining its discretionary authority under 35 U.S.C. § 325(d) to reject petitions based on previously presented arguments or prior art. The Board evaluated several factors to decide whether to exercise its discretion, including the similarities and differences between the asserted and prior art, cumulative nature, evaluation extent, overlap of arguments, and whether the petitioner highlighted any errors in the prior evaluation. Ultimately, the Board found that factors favoring denial were significant, particularly regarding the similarities between the current and previously examined art. While acknowledging that Aquestive provided additional expert testimony, the Board concluded it was insufficient to warrant reconsideration of previously reviewed arguments. Therefore, the Board found no indication that Aquestive lacked probable cause to file the petition. The Board exercised its discretion to deny the petition based on 35 U.S.C. § 325(d), which allows for denial if the same prior art or arguments have been previously presented. However, while the statute grants the Board the discretion to deny such petitions, it does not mandate denial. The Board could still grant a petition even if it invokes previously made claims. The text argues that concluding a denial under this statute indicates a lack of probable cause for malicious prosecution is speculative. Relevant case law emphasizes that inferences used as substantial evidence must be reasonable and not based on conjecture. For a malicious prosecution claim to stand, the actions must be shown to be completely without merit, which requires evidence that no reasonable attorney would consider the petitions tenable. Neurelis failed to present such evidence, relying instead on claims that the petitions were meritless without supporting documentation. As a result, the malicious prosecution claim could not withstand the anti-SLAPP motion. The court affirmed in part and reversed in part the previous order, instructing the superior court to deny the anti-SLAPP motion regarding UCL and defamation claims linked to unprotected conduct, while granting it for the malicious prosecution claim. All allegations related to the citizen petition were to be stricken, with each party bearing its own appeal costs.