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Paper 17
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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Patent 7,895,059 B2
I. INTRODUCTION
A. Background
Coalition for Affordable Drugs III LLC (Petitioner) filed a Petition
requesting an inter partes review of claims 116 (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-cv07884 (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.
34; Paper 7, 12.
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 116 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, 1:4450. 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, 1:4850.
Figures 2A, 2B, and 2C comprise flow charts representing an initial
prescription order entry process for a sensitive drug. Id. at 4:1314. 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 4:1331, Fig. 2A (steps 202
210). The pharmacy team then engages in intake reimbursement (Fig.
2A), which includes verification of insurance coverage or the patients
willingness and ability to pay for the prescription drug. Id. at 4:3234.
Steps 226230, 234238 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 2:2830, 4:5167. The pharmacy workflow includes
verification of the prescribing physicians credentials. Id. at 5:1531, Fig.
2B (steps 274280). Filling the prescription includes confirming the patient
has read educational materials regarding the sensitive drug, confirming the
patients receipt of the sensitive drug, and daily cycle counting and
inventory reconciliation. Id. at 5:316:4. 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 4:3439. If a patient requests an early
prescription refill, for example, the pharmacist generates a report evaluating
the patients compliance with therapy or possible product diversion, misuse
or over-use. Id. at 6:3741, Fig. 4B (step 436).
C. Illustrative Claims
The 059 patent contains six independent claims (1, 6, 9, 12, 13, 14)
and ten dependent claims (25, 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;

Xyrem is the brand name for gamma hydroxy butyrate (GBH),


indicated for the treatment of cataplexy (excessive daytime sleepiness) in
narcoleptic patients. Ex. 1001, 3:2027. 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, 8:379:3 (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 9:5254
(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 9:5666 (claim 8).
D. Prior Art Relied Upon
Petitioner challenges the patentability of claims 116 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


Advisory Committee, Transcript and Slides
(DAC Transcript)

(Ex. 1003)

Camarda

(Ex. 1004)

US 6,587,829 B1

July 1, 2003

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FDA Peripheral & Central Nervous System
Drugs Advisory Committee, Briefing Information,
Division of Neuropharmacological Drug Products
Preliminary Clinical Safety Review of NDA 21-196
(CSR)

(Ex. 1005)

E. The Asserted Grounds of Unpatentability


Petitioner contends that the challenged claims are unpatentable based
on the following grounds (Pet. 2021):
References

Basis

Claims challenged

Lilly, DAC Transcript, and Camarda

103(a)

16, 9, and 1214

Lilly, DAC Transcript, Camarda, and


CSR

103(a)

78, 1011, and 1516

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 4647. 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 questionthere 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 partys 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-partys
relationship with the petitioner; the non-partys 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.

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 Petitioners 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.
1113. 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 Owners 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. 1113.
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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. 2526. Patent Owner counters that Petitioners
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. 1518. 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. Natl 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 35 (PTAB Aug. 24,
2015) (Paper 15); Symantec Corp. v. Trs. of Columbia Univ., IPR201500371, slip op. at 59 (PTAB June 17, 2015); Temporal Power, Ltd. v.
Beacon Power, LLC, IPR2015-00146, slip op. at 811 (PTAB Apr. 27,
2015) (Paper 10); Dell, Inc. v. Selene Commn Techs., LLC, IPR2014-01411,
slip op. at 2122 (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

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 FDAs
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 Petitioners Exhibit 1017, and that [b]y scouring the web
pages that are linked to that archived web page, only the CSRnot the DAC
transcriptcan 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, 5:236:3. 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.
Petitioners 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, Petitioners substantive challenge to claims 116 of the
059 patent also fails, for the reasons discussed below.
D. Claim Constructionexclusive 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. 1820. 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 Petitioners 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, 8:4050, 9:13 (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 patents 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 16, 9, and 1214 of the 059 Patent over
Lilly in View of the DAC Transcript and Camarda
Petitioner contends that claims 16, 9, and 12 14 of the 059 patent
would have been obvious over Lilly in view of the DAC Transcript and
Camarda. Pet. 2755.
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, 177:24178:6, 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 178:811. 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. 182:17183:6, 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. 2954. 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. Fudins 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 102114, 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. 2324. 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
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IPR2015-01018
Patent 7,895,059 B2
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 116 of the 059 patent.
III. ORDER
Accordingly, it is
ORDERED that the Petition is denied as to all challenged claims of
the 059 patent.

We need not address Petitioners second ground as it applies only to


dependent claims.
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IPR2015-01018
Patent 7,895,059 B2
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

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