Trials@uspto.gov Paper 17

Tel: 571-272-7822 Entered: October 15, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

COALITION FOR AFFORDABLE DRUGS III LLC,

Petitioner,

v.

JAZZ PHARMACEUTICALS, INC.,

Patent Owner.

Case IPR2015-01018

Patent No. 7,895,059 B2

Before JACQUELINE WRIGHT BONILLA, SUSAN L. C. MITCHELL,

and BRIAN P. MURPHY, Administrative Patent Judges.

MITCHELL, Administrative Patent Judge.

DECISION

Denying Institution of Inter Partes Review

37 C.F.R. § 42.108

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I. INTRODUCTION

A. Background

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

requesting an inter partes review of claims 1–16 (all claims) of U.S. Patent

No. 7,895,059 B2 (Ex. 1001, “the ’059 patent”). Paper 1 (“Petition” or

“Pet.”). Jazz Pharmaceuticals, Inc. (“Patent Owner”) filed a Preliminary

Response to the Petition. Paper 11 (“Prelim. Resp.”). We have statutory

authority under 35 U.S.C. § 314(a), which provides that an inter partes

review may not be instituted “unless . . . there is a reasonable likelihood that

the petitioner would prevail with respect to at least 1 of the claims

challenged in the petition.” For the reasons that follow, we do not institute

an inter partes review.

B. Related Proceedings

The parties identify the following as related district court proceedings

regarding the ’059 patent: Jazz Pharms, Inc. v. Par Pharm., Inc., 2:13-cv-

07884 (D.N.J. Dec. 27, 2013); Jazz Pharms, Inc. v. Amneal Pharms., LLC,

2:13-cv-00391 (consolidated) (D.N.J. Jan. 18, 2013); Jazz Pharms, Inc. v.

Roxane Labs., Inc., 2:10-cv-06108 (consolidated) (D.N.J. Nov. 22, 2010);

Jazz Pharms., Inc. v. Ranbaxy Labs. Ltd., 2:14-cv-4467 (D.N.J. July 15,

2014); Jazz Pharms., Inc. v. Watson Labs., Inc., 2:14-cv-7757 (D.N.J). Pet.

3–4; Paper 7, 1–2.

As noted by Patent Owner (Paper 7), different petitioners previously

filed Petitions for a covered business method review (CBM2014-00149) and

an inter partes review (IPR2015-00548) that challenged the claims of the

’059 patent. The Board declined to institute review in CBM2014-00149, but

instituted review of claims 1–16 of the ’059 patent in IPR2015-00548 on

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July 28, 1015. Par Pharma, Inc. v. Jazz Pharms., Inc., Case IPR2015-00548

(PTAB July 28, 2015) (Paper 19) (“Dec.”).

C. The ’059 Patent

The ’059 patent, titled “Sensitive Drug Distribution System and

Method,” is directed to a method for controlling access to a sensitive

prescription drug prone to potential abuse or diversion, by utilizing a central

pharmacy and database to track all prescriptions for the sensitive drug.

Ex. 1001, Abstract, 1:44–50. Information regarding all physicians

authorized to prescribe the drug and all patients receiving the drug is

maintained in the database. Id. Abuses are identified by monitoring the

database for prescription patterns by physicians and prescriptions obtained

by patients. Id. at Abstract, 1:48–50.

Figures 2A, 2B, and 2C comprise flow charts representing “an initial

prescription order entry process for a sensitive drug.” Id. at 4:13–14. In

overview, a physician submits prescriber, patient, and prescription

information for the sensitive drug to a pharmacy team, which enters the

information into a computer database. Id. at 4:13–31, Fig. 2A (steps 202–

210). The pharmacy team then engages in “intake reimbursement” (Fig.

2A), which includes verification of insurance coverage or the patient’s

willingness and ability to pay for the prescription drug. Id. at 4:32–34.

Steps 226–230, 234–238 of Figure 2A are reproduced below:

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Figure 2A, above, depicts steps for verifying insurance coverage or

ability to pay. Id. at 2:28–30, 4:51–67. The “pharmacy” workflow includes

verification of the prescribing physician’s credentials. Id. at 5:15–31, Fig.

2B (steps 274–280). Filling the prescription includes confirming the patient

has read educational materials regarding the sensitive drug, confirming the

patient’s receipt of the sensitive drug, and daily cycle counting and

inventory reconciliation. Id. at 5:31–6:4. Figure 2C, a flowchart describing

a method for sensitive drug distribution, is reproduced below. Id. at 2:28–

30.

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Figure 2C, above, depicts a prescription fulfillment flow diagram. Id.

at Fig. 2C. The “CHiPS” system, referenced in steps 260 and 266, is an

application database “used to maintain a record of a client home infusion

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program (CHIP) for Xyrem®.”

1 Id. at 4:34–39. If a patient requests an early

prescription refill, for example, the pharmacist generates a report evaluating

“the patient’s compliance with therapy or possible product diversion, misuse

or over-use.” Id. at 6:37–41, Fig. 4B (step 436).

C. Illustrative Claims

The ’059 patent contains six independent claims (1, 6, 9, 12, 13, 14)

and ten dependent claims (2–5, 7, 8, 10, 11, 15, 16), of which claim 1 is

illustrative and reproduced below:

1. A computerized method of distributing a prescription drug

under exclusive control of an exclusive central pharmacy, the

method comprising:

receiving in a computer processor all prescription requests, for

any and all patients being prescribed the prescription drug,

only at the exclusive central pharmacy from any and all

medical doctors allowed to prescribe the prescription drug,

the prescription requests containing information identifying

patients, the prescription drug, and various credentials of the

any and all medical doctors;

requiring entering of the information into an exclusive

computer database associated with the exclusive central

pharmacy for analysis of potential abuse situations, such

that all prescriptions for the prescription drug are processed

only by the exclusive central pharmacy using only the

exclusive computer database;

checking with the computer processor the credentials of the any

and all doctors to determine the eligibility of the doctors to

prescribe the prescription drug;

1 Xyrem

® is the brand name for gamma hydroxy butyrate (“GBH”),

indicated for the treatment of cataplexy (excessive daytime sleepiness) in

narcoleptic patients. Ex. 1001, 3:20–27. Xyrem® is a sensitive prescription

drug prone to potential abuse or diversion. Id.

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confirming with a patient that educational material has been

received and/or read prior to shipping the prescription drug;

checking the exclusive computer database for potential abuse

of the prescription drug;

mailing or sending by courier the prescription drug to the

patient only if no potential abuse is found by the patient to

whom the prescription drug is prescribed and the doctor

prescribing the prescription drug;

confirming receipt by the patient of the prescription drug; and

generating with the computer processor periodic reports via the

exclusive computer database to evaluate potential diversion

patterns.

Ex. 1001, 8:37–9:3 (emphases added). Dependent claims 7, 10, and 15,

which depend from independent claims 6, 9, and 14, respectively (which are

similar to claim 1), recite that providing the prescription drug to the patient

“comprises the central pharmacy authorizing the prescription drug to be

dispensed to the patient by another pharmacy.” See, e.g., id. at 9:52–54

(claim 6). Dependent claims 8, 11, and 16 of the ’059 patent recite certain

“controls,” such as “confirming with the patient that the educational material

has been received and/or read by the patient, confirming receipt of the

prescription drug by the patient.” See, e.g., id. at 9:56–66 (claim 8).

D. Prior Art Relied Upon

Petitioner challenges the patentability of claims 1–16 on the basis of

the following prior art references:

Lilly US 2004/0176985 A1 Sept. 9, 2004 (Ex. 1002)

FDA Peripheral & Central Nervous System Drugs (Ex. 1003)

Advisory Committee, Transcript and Slides

(“DAC Transcript”)

Camarda US 6,587,829 B1 July 1, 2003 (Ex. 1004)

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FDA Peripheral & Central Nervous System (Ex. 1005)

Drugs Advisory Committee, Briefing Information,

Division of Neuropharmacological Drug Products

Preliminary Clinical Safety Review of NDA 21-196

(“CSR”)

E. The Asserted Grounds of Unpatentability

Petitioner contends that the challenged claims are unpatentable based

on the following grounds (Pet. 20–21):

References Basis Claims challenged

Lilly, DAC Transcript, and Camarda § 103(a) 1–6, 9, and 12–14

Lilly, DAC Transcript, Camarda, and

CSR

§ 103(a) 7–8, 10–11, and 15–16

II. ANALYSIS

A. Real Parties-in-Interest

Patent Owner contends that Petitioner fails to identify individuals or

entities who have invested in the Hayman funds allegedly responsible for

filing the Petition. Prelim. Resp. 46. Patent Owner asserts that the

“unnamed investors are RPI not only because they fund the Petition, but also

because [the Petitioner] is merely a proxy for the unnamed investors who . . .

stand to gain or lose financially from the Petition.” Id. at 46–47. Patent

Owner points to where our Trial Practice Guide states: “[A]t a general level,

the ‘real party-in-interest’ is the party that desires review of the patent.” Id.

at 47 (quoting Zoll Life Corp. v. Philips Elecs. N.A. Corp., IPR2013-00607,

2014 WL 1253105, at *5 (PTAB Mar. 20, 2014)); see Office Patent Trial

Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (“Trial Practice

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Guide”) (emphasis added)). We consider multiple factors, however, when

assessing whether a party is a RPI who desires review.

As stated in our Trial Practice Guide, the RPI inquiry “is a highly fact

dependent question”—there is no “bright line test.” 77 Fed. Reg. at 48,759.

Although “rarely will one fact, standing alone, be determinative of the

inquiry” (id. at 48,760), “[a] common consideration is whether the non-party

exercised or could have exercised control over a party’s participation in a

proceeding.” Id. at 48,759 (citations omitted); Reflectix, Inc. v. Promethean

Insulation Tech. LLC, Case IPR2015-00039, slip op. at 12 (PTAB April 24,

2015) (Paper 18). Along those lines, the RPI requirement exists to ensure

that a non-party is not “litigating through a proxy.” Aruze Gaming Macau,

Ltd. v. MGT Gaming, Inc., Case IPR2014-01288, slip op. at 12 (PTAB Feb.

20, 2015) (Paper 13). Thus, when assessing RPI, we inquire into the

“relationship between a party and a proceeding,” and consider “the degree of

control the nonparty could exert over the inter partes review, not the

petitioner.” Id. at 11.

Additional considerations may include whether a non-party “funds

and directs and controls” an IPR petition or proceeding; the non-party’s

relationship with the petitioner; the non-party’s relationship to the petition

itself, including the nature and/or degree of involvement in the filing; and

the nature of the entity filing the petition. Trial Practice Guide, 77 Fed. Reg.

at 48,760. A party does not become a RPI merely through association with

another party in an endeavor unrelated to the AIA2 proceeding. Id.

2 The Leahy-Smith America Invents Act, Pub. L. No. 11229, 125 Stat. 284

(2011) (“AIA”).

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The record before us does not persuade us sufficiently that any

individual or entity who has invested in the listed RPIs has or could have

exerted control over the filing of the Petition in this case. Likewise,

insufficient evidence exists as to whether any unnamed investor funded or

otherwise paid for expenses associated with the Petition, or if an unnamed

investor in its own capacity (or via its legal counsel) controlled or

participated in the filing of the Petition here. See Prelim. Resp. 48

(providing only generalized statements from Hayman investment materials

stating investors “will generally bear costs” of the investments, including

“outside professional fees and expenses, including those of attorneys,” and

“litigation expenses”). This record presents little to no information as to

how any unnamed investor relates to, or could have participated in, this

proceeding in particular.

Based on the particular facts of this case, in view of the evidence

before us on the present record, we are not persuaded that Patent Owner has

provided sufficient evidence to show that Petitioner’s disclosure of real

parties-in-interest is inadequate in relation to individuals or entities who

have invested in the listed real parties-in-interest.

B. Alleged Abuse of Process

Patent Owner asserts that we should exercise our discretion under

35 U.S.C. §§ 314(a) and 315(b) to deny the Petition because it is presented

for an improper purpose contrary to the purpose of the AIA. Prelim. Resp.

11–13. Patent Owner asserts that Petitioner is a non-practicing entity who is

“abusing and misusing the IPR process to initiate their investment strategy

aimed at affecting stock prices of targeted innovator pharmaceutical

companies.” Id. at 11; Paper 15, 2.

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The purpose of the AIA, however, was not limited to providing only a

less costly alternative to litigation. Rather, the AIA sought to establish a

more efficient and streamlined patent system that improved patent quality,

while at the same time, limiting unnecessary and counterproductive

litigation costs. The AIA was designed to encourage the filing of

meritorious patentability challenges,3 by any person who is not the patent

owner, in an effort to improve patent quality. H.R. Rep. No. 112-98, pt. 1, at

85 (2011); see 35 U.S.C. § 311. Accordingly, consistent with the

proposition that Article III standing is not a requirement to appear before

this administrative agency, we hold that Congress did not limit inter partes

reviews to parties having a specific competitive interest in the technology

covered by the patents. See Sierra Club v. E.P.A., 292 F.3d 895, 899 (D.C.

Cir. 2002) (stating that an administrative agency is not subject to Article III

of the Constitution of the United States, so a petitioner would have no need

to establish standing to participate in proceedings before the agency); see

also Consumer Watchdog v. Wis. Alumni Res. Found., 753 F.3d 1258, 1261

(Fed. Cir. 2014) (citing Sierra Club).

Patent Owner’s assertion that that the profit motive behind the filing

of this Petition is an improper purpose is equally unavailing. Prelim. Resp.

11, Paper 15, 2. Profit is at the heart of seeking patent protection in almost

all inter partes reviews. As such, an economic motive for challenging a

patent claim alone does not raise abuse of process issues. We take no

position on the merits of short-selling as an investment strategy other than it

is legal and regulated.

3 In its Preliminary Response, Patent Owner does not allege that Petitioner

filed a non-meritorious patentability challenge. Prelim. Resp. 11–13.

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For the above reasons, we decline to exercise our discretion to deny

the Petition because of any alleged abuse or misuse of the inter partes

review process.

C. Public Accessibility of the DAC Transcript and the CSR

The priority date of the ’059 patent is December 17, 2002. Ex. 1001.

Petitioner asserts that the DAC Transcript and the CSR are “printed

publications” that qualify as § 102(b) prior art because the DAC Transcript

was published no later than July 13, 2001, and the CSR was published no

later than June 5, 2001. Pet. 25–26. Patent Owner counters that Petitioner’s

evidence of public availability of the two documents does not show public

availability of the DAC Transcript at all, and the webpage offered by

Petitioner in support of the public availability of the CSR was first archived

by the Wayback Machine November 21, 2011, well after the priority date of

the ’059 patent. Prelim. Resp. 15–18. Because we find that Petitioner has

not shown that the DAC Transcript was publicly available and Petitioner

relies on this reference for both grounds presented, we need not determine

the public accessibility of the CSR.

Under 35 U.S.C. § 311(b), a petitioner in an inter partes review may

challenge only the claims of a patent based on “prior art consisting of patents

or printed publications.” 35 U.S.C. § 311(b). Here, Petitioner has the

ultimate burden of persuasion in a review, if instituted, to prove

unpatentability by a preponderance of the evidence. Dynamic Drinkware,

LLC v. Nat’l Graphics, Inc., No. 2015-01214, 2015 WL 5166366, at *4

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(Fed. Cir. Sept. 4, 2015).4 Petitioner also has the initial burden of

production to establish that there is prior art that renders the claims

unpatentable. Id. To satisfy this initial burden, we often have required

Petitioner to come forward with sufficient evidence to make a threshold

showing, at the institution stage, that the reference relied upon is available

prior art. See, e.g., Coalition For Affordable Drugs (ADROCA) LLC v.

Acorda Therapeutics, Inc., IPR2015-00720, slip op. at 3–5 (PTAB Aug. 24,

2015) (Paper 15); Symantec Corp. v. Trs. of Columbia Univ., IPR2015-

00371, slip op. at 5–9 (PTAB June 17, 2015); Temporal Power, Ltd. v.

Beacon Power, LLC, IPR2015-00146, slip op. at 8–11 (PTAB Apr. 27,

2015) (Paper 10); Dell, Inc. v. Selene Comm’n Techs., LLC, IPR2014-01411,

slip op. at 21–22 (PTAB Feb. 26, 2015) (Paper 23).

The key inquiry is whether a reference was made “sufficiently

accessible to the public interested in the art” before the critical date. In re

Cronyn, 890 F.2d 1158, 1160 (Fed. Cir. 1989). Indexing of a reference is

not “a necessary condition for a reference to be publicly accessible,” but it is

one among various factors that may bear on public accessibility. In re

Lister, 583 F.3d 1307, 1312 (Fed. Cir. 2009). “A given reference is

‘publicly accessible’ upon a satisfactory showing that such document has

been disseminated or otherwise made available to the extent that persons

interested and ordinarily skilled in the subject matter or art exercising

4 In Dynamic Drinkware, the Petitioner relied on a prior art patent to

challenge the claims of the involved patent. 2015 WL 5166366, at *2.

Based on the earlier filing date of the prior art patent, Petitioner satisfied its

initial burden of production by arguing that the prior art patent anticipated

the asserted claims under 35 U.S.C. § 102(e)(2). Id. at *7. In contrast, here,

Petitioner does not rely on a filing date recorded on the face of a patent.

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reasonable diligence, can locate it.” Bruckelmyer v. Ground Heaters, Inc.,

445 F.3d 1374, 1378 (Fed. Cir. 2006) (quoting In re Wyer, 655 F.2d 221,

226 (CCPA 1981)). With these principles in mind, we consider the parties’

arguments below.

Petitioner relies on the Federal Register notice announcing the FDA’s

Advisory Committee meeting on Xyrem® for its statement that the transcript

and slides of the FDA Peripheral & Central Nervous System Drugs Advisory

Committee meeting “is generally posted about 3 weeks after the meeting.”

Pet. 24 (quoting Ex. 1015). Petitioner concludes that “[b]ased on the stated

timeline, the DAC Transcript thus was publicly accessible to a POSA [, i.e.,

a person of ordinary skill in the art,] exercising reasonable diligence as of

June 27, 2001.” Id. Petitioner also points to another webpage to support

that the DAC Transcript was available no later than July 13, 2001, (id. at 25

(citing Ex. 1016)), which Petitioner asserts is supported by the Wayback

Machine (id. (citing Ex. 1017)).

Patent Owner asserts that the DAC Transcript is not a linked

document on Petitioner’s Exhibit 1017, and that “[b]y scouring the web

pages that are linked to that archived web page, only the CSR—not the DAC

transcript—can be found as an indirectly-lined web page.” Prelim. Resp. 14.

Patent Owner concludes that “[b]ecause at least one reference in the

combination of references relied on by [Petitioner] in both Grounds 1 and 2

is not prior art, the Petition should be denied.” Id. at 15. We agree.

The DAC Transcript (Ex. 1003) is a written transcript, including

presentation slides, of the Peripheral and Central Nervous System Drugs

Advisory Committee meeting held June 6, 2001, in Bethesda, MD (“the

Advisory Committee Meeting”). The Advisory Committee Meeting was

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convened to discuss Xyrem®, with the “main focus of the deliberations . . .

on risk management issues.” Ex. 1003, 5:23–6:3. A Federal Register Notice

dated May 14, 2001, provided public notice of the Advisory Committee

Meeting. Ex. 1015. The notice further identified a website for providing

“[b]ackground material from the sponsor and FDA” and stated that “the

minutes, transcript, and slides from the meeting” are “generally posted about

3 weeks after the meeting.” Pet. 14 (citing Ex. 1015). This statement, by

itself, however, is not sufficient under the circumstances to show that the

DAC Transcript actually was made available to the extent that interested,

ordinarily skilled persons, exercising reasonable diligence, could have

located it as of June 27, 2001, three weeks after the date of the Advisory

Committee meeting.

Petitioner’s reliance on Exhibit 1016 is equally unavailing. The face

of Exhibit 1016 allegedly shows 2001 meeting documents organized by a

“Center” within the Food and Drug Administration (“FDA”). Under the

Center for Drug Evaluation and Research (CDER), a link to the Peripheral

and Central Nervous System Drugs Advisory Committee states “(Updated

07/13/01),” but there is no indication as to which documents are associated

with the July 13, 2001 update, if any. Ex. 1016. Therefore, we do not agree

with Petitioner that Exhibit 1016 shows that the DAC Transcript was

available no later than July 13, 2001, nor do we agree that the Wayback

Machine archived page confirms this availability date for the DAC

Transcript. As Patent Owner notes, the DAC Transcript does not appear to

be one of the linked documents on the Wayback Machine archived page.

See Ex. 1017, 5. In fact, the columns titled “Transcript PDF ID (size in kb)”

and “Transcript Text ID (size in kb)” next to the June 6th

date for the

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Advisory Committee meeting are empty. Id. We agree with Patent Owner

that Ex. 1017 indicates that the DAC Transcript was not publicly available

as of the Wayback Machine archive date. Prelim. Resp. 16.

We, therefore, determine that Petitioner has not satisfied its initial

burden of coming forward with sufficient evidence to make a threshold

showing that the DAC Transcript is a prior art printed publication. Because

Petitioner relies on this reference for both asserted grounds to challenge the

patentability of the claims, we also determine that Petitioner has failed to

establish a reasonable likelihood that it would prevail in asserting that

claims 1 through 16 of the ’059 patent are unpatentable. Furthermore, even

if Petitioner were able to establish that both the DAC Transcript and the

CSR were prior art, Petitioner’s substantive challenge to claims 1–16 of the

’059 patent also fails, for the reasons discussed below.

D. Claim Construction—“exclusive central pharmacy” and

“exclusive computer database”

In an inter partes review, claim terms in an unexpired patent are given

their broadest reasonable construction in light of the specification of the

patent in which they appear. 37 C.F.R. § 42.100(b); see also In re Cuozzo

Speed Techs., LLC, 793 F.3d 1268, 1279 (Fed. Cir. 2015) (“Congress

implicitly approved the broadest reasonable interpretation standard in

enacting the AIA,” and “the standard was properly adopted by PTO

regulation.”). Significantly, claims are not interpreted in a vacuum but are

part of, and read in light of, the specification. United States v. Adams,

383 U.S. 39, 49 (1966) (“[I]t is fundamental that claims are to be construed

in the light of the specifications and both are to be read with a view to

ascertaining the invention . . . .”). Claim terms are given their ordinary and

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customary meaning as would be understood by one of ordinary skill in the

art in the context of the entire disclosure. In re Translogic Tech., Inc., 504

F.3d 1249, 1257 (Fed. Cir. 2007). An inventor may rebut that presumption

by providing a definition of the term in the specification with reasonable

clarity, deliberateness, and precision. In re Paulsen, 30 F.3d 1475, 1480

(Fed. Cir. 1994). In the absence of such a definition, limitations are not to

be read from the specification into the claims. In re Van Geuns, 988 F.2d

1181, 1184 (Fed. Cir. 1993).

Petitioner generally relies on the ordinary meaning of the claim terms,

but offers an explicit construction of “exclusive central pharmacy” and

“exclusive computer database.” Pet. 18–20. Petitioner relies on the

prosecution history and the specification of the ’059 patent to support its

assertion that the broadest reasonable interpretation of the term “exclusive”

means “single or sole.” Id.

The claim language is consistent with Petitioner’s proposed claim

constructions. The claims recite “receiving, only into an exclusive central

computer system, all prescriptions” in an effort to control distribution of a

prescription drug and guard against potential abuse and unauthorized

diversion. Ex. 1001, 8:40–50, 9:1–3 (emphasis added). The ’059 patent

specification does not elaborate on the definition of the exclusive central

pharmacy and exclusive computer database, but the prosecution history cited

by Petitioner is consistent with the claim constructions proposed by

Petitioner. See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1298

(Fed. Cir. 2015) (“The PTO should also consult the patent’s prosecution

history in proceedings in which the patent has been brought back to the

agency for a second review.”).

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Thus, we construe “exclusive central pharmacy” to mean “single or

sole pharmacy,” and we construe “exclusive computer database” to mean

“single or sole computer database.”

E. Obviousness of Claims 1–6, 9, and 12–14 of the ’059 Patent over

Lilly in View of the DAC Transcript and Camarda

Petitioner contends that claims 1–6, 9, and 12– 14 of the ’059 patent

would have been obvious over Lilly in view of the DAC Transcript and

Camarda. Pet. 27–55.

Lilly discloses a method for tracking prescription medications where

computer data information, such as drug, doctor, pharmacist, and patient

data, is “stored for a plurality of patients utilizing a plurality of pharmacies,

wherein the pharmacies may be affiliated or unaffiliated.” Ex. 1002,

Abstract, ¶¶ 37, 41, 68. Lilly discloses that “at least one of the plurality of

entities comprises a pharmacy with a pharmacist, such that when the . . .

purchaser requests that the pharmacist fill a new prescriptive medication

then the pharmacist utilizes the pharmaceutical computer data to compare

the new prescriptive medication with respect to the medication history” of

the patient. Id. ¶ 39.

Camarda discloses a system for improving patient compliance with

prescriptions by converting prescription information into electronic form as

records for each patient, and running a regression analysis on these patient

records to create a model of likelihood of prescription compliance in general

by the patient. Ex. 1004, Abs. If the regression analysis shows that a patient

may not be compliant, intervention may be used to encourage compliance.

Id.

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The DAC Transcript discloses a closed distribution system where

Xyrem® is manufactured at a single manufacturing facility and is distributed

from a single national specialty pharmacy. Ex. 1003, 177:24–178:6, 527

(slide depicting “Xyrem Closed Distribution System”), 528 (slide describing

single specialty pharmacy as single location for controls and records), 539

(slide describing benefits of central data repository). Therefore, the DAC

Transcript teaches that the product is distributed from a central location with

all the controls and all the records in one place. Id. at 178:8–11. The DAC

Transcript describes that a shipment of Xyrem® is sent by a system that

allows real-time tracking of the shipment and will be returned to the

specialty pharmacy after one delivery reattempt if the patient or the designee

is not available for receipt of the shipment at the agreed upon time with the

specialty pharmacy. Id. 182:17–183:6, 536.

Petitioner glosses over the differences between the DAC Transcript

and Lilly or Camarda, and does not address the specific language of the

steps in the independent claims, in context, to explain why it would have

been obvious for one of ordinary skill to combine the prior art references in

the manner recited. See Pet. 29–54. As argued by Patent Owner, Lilly

discloses the use of a plurality of pharmacies that may be affiliated or

unaffiliated with one another, rather than the use of an “an exclusive

computer database associated with the exclusive central pharmacy” to

receive, process, and dispense prescriptions. Prelim. Resp. 24 (citing Ex.

1002, Abstract).

Petitioner relies on Dr. Fudin’s Declaration testimony in support of its

argument that a person of ordinary skill in the art would have had “ample

reason to combine the teachings of Lilly with the teachings in the DAC

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Transcript and Camarda” to arrive at the claimed invention. Ex. 1006 ¶ 102,

cited in Pet. 27. Specifically, Petitioner asserts:

A POSA at the time of the alleged invention of the ’059 Patent

would have been motivated to combine the teachings of Lilly,

the DAC Transcript and Camarda to arrive at a method for

reducing the abuse of drug products such [as] Xyrem® and thus

improve the healthcare system while reducing healthcare costs.

It was well-known to a POSA that it was desirable to “reduce

spiraling costs structure, mitigate health risks, provide more

efficient billing, eliminate redundancy, and improve

informational flow.” “It would be desirable to provide a

healthcare utility that can assist substantially in reducing these

misused and abused prescriptions.”

Pet. 27 (citing Ex. 1006 ¶¶ 102–114, Ex. 1002 ¶¶ 3-5, 35) (quoting Ex. 1002,

¶¶ 9, 12, respectively).

Patent Owner asserts Petitioner does not offer reasons why a POSA

would “cobble together disclosures from the[se] disparate references” that

are not related to the same endeavor. Prelim. Resp. 22, 24. Patent Owner

states that Petitioner

ignores that the DAC Transcript is the only reference in

Ground 1 that refers to a sensitive prescription drug like GHB,

or the need to control access to GHB to minimize its potential

abuse, misuse, and diversion. Neither Camarda nor Lilly are

directed to a centralized system of controlling access to a drug

substance like GHB, which has a unique history of being

misused to harm innocent third parties. . . . Neither Camarda

nor Lilly is directed to the safe, secure, and comprehensive

controlled access to pharmaceuticals with the potential to harm

patients and third parties, and a POSA would not look to these

references for guidance in addressing any such need.

Pet. 23–24. We agree with Patent Owner.

Petitioner does not provide adequate reasoning based on rational

underpinnings to persuade us, in the absence of hindsight, that one of

IPR2015-01018

Patent 7,895,059 B2

21

ordinary skill would have modified the Lilly system to incorporate the DAC

Transcript and Camarda to achieve, for example, “an exclusive computer

database associated with the exclusive central pharmacy for analysis of

potential abuse situations, such that all prescriptions for the prescription drug

are processed only by the exclusive central pharmacy using only the

exclusive computer database,” as required by the claims of the ’059 patent.5

For the reasons given above, we are not persuaded Petitioner has

shown a reasonable likelihood of prevailing in its assertion of

unpatentability of claims 1–16 of the ’059 patent.

III. ORDER

Accordingly, it is

ORDERED that the Petition is denied as to all challenged claims of

the ’059 patent.

5 We need not address Petitioner’s second ground as it applies only to

dependent claims.

IPR2015-01018

Patent 7,895,059 B2

22

PETITIONER:

Daniel W. McDonald

Jeffrey D. Blake

Thomas J. Leach

MERCHANT & GOULD P.C.

dmcdonald@merchantgould.com

jblake@merchantgould.com

tleach@merchantgould.com

PATENT OWNER:

Francis Dominic Cerrito

QUINN EMANUEL URQUHART & SULLIVAN, LLP

nickcerrito@quinnemanuel.com

John V. Biernacki

JONES DAY

jvbiernacki@jonesday.com