Prescription Tracking Patents Confirmed as Unpatentable After IPR Appeal

Jazz Pharmaceuticals, Inc. (“Jazz”) appeal to the United States Court of Appeals for the Federal Circuit from six inter partes review (“IPR”) decisions of the Patent Trial and Appeal Board (the “Board”).[1] Collectively, the decisions of the PTAB held certain claims of Jazz’s U.S. Patents 7,668,730, 7,765,106, 7,765,107, 7,895,059, 8,589,182, 8,457,988 and 8,731,963 invalid as obvious. Because the Board did not err in its conclusions of obviousness, the Federal Circuit affirmed. See Jazz Pharm., Inc. v. Amneal Pharm., LLC, No. 2017-1671,  (Fed. Cir. July 13, 2018) (before Newman, Lourie, and Reyna, J.)(opinion by Lourie, J.).

The patents at issue, owned by Jazz, related to a drug distribution system for tracking prescriptions of a “sensitive drug.” Using a database, the method requires, inter alia, receiving specific information by a computer processor, entering specific information into “an exclusive computer database,” and checking for credentials and for abuse of the drug. On appeal, Jazz challenged the Board’s holding that materials used as prior art were in fact prior art, its claim construction, and its obviousness analysis.

The Federal Circuit first determined, under its recent precedent in PGS, that it had jurisdiction over the appeal, given “a lack of any request by either party for SAS-based action.” The Court saw “no reason to exercise any discretion to remand the non-instituted claims or grounds sua sponte.”

The Federal Circuit reviewed whether certain prior art was “publicly accessible,” because Jazz alleged the material was not a “printed publication” under Section 102(b). Jazz argued that the material, meeting minutes, transcripts, and slides pertinent to an FDA advisory meeting scheduled during the review process for a particular “sensitive drug” (Xyrem), failed to meet a “searchability or indexing” requirement and that the Board erred by “equating the constructive notice provided by the Federal Register with the legal standard for prior art.” The Court rejected both arguments, relying on three precedents, MIT, Klopfenstein, and Medtronic, to analogize and proceed on a “case-by-case” analysis of the facts and circumstances surrounding the disclosure to the public – the proper inquiry for determining if a reference is a “printed publication.” The Court looked at three factors: the breadth of the dissemination; the amount of time the materials were available before the critical date; and, the presence or absence of an expectation of confidentiality. Comparing the facts to its three precedents, the Court found that each of the three factors supported the conclusion that the materials were printed publications and thus prior art.

First, the availability of the materials was noticed in the Federal Register and directed to the interests of a person of skill. Second, the materials were available online for a substantial time before the critical date. Third, the materials were distributed via “public domain sources with no possible expectation that the materials would remain confidential or not be copied.”

Regarding claim construction, Jazz argued “periodic reports” should have been construed as reports generated “at regular frequencies.” The Board’s construction included reports generated at “irregular frequencies.” The Court agreed with the Board, pointing to dictionary definitions, the specification, and the prosecution history, all of which disclosed reports at irregular intervals. The Court also rejected Jazz’s argument that “information identifying” required a minimum set of identifying information, which would have inappropriately imported a limitation from the specification.

Finally, the Federal Circuit reviewed Jazz’s argument that a person of skill would not have been motivated to combine the prior art. The Board’s decision explained a well-reasoned motivation to combine and addressed Jazz’s erroneous interpretation of the Supreme Court’s KSR decision. Jazz erroneously attempted to argue that KSR imposed a “rigid requirement to identify both a problem to be solved in the art and a finite universe of potential options.” [which Jazz had pointed to as purportedly introducing an unmet requirement.]

Take Away

Parties who would like the Federal Circuit to remand Board decisions that failed to institute on all claims or grounds under SAS will likely need to explicitly ask the Court to do so; they will likely not do so under its own discretion. Whether materials are a “printed publication” is determined on a case-by-case basis, and the relevant factors are the breadth of the disclosure; the amount of time the material(s) were available prior to the critical date; and, the presence or absence of an expectation of confidentiality. These requirements are met by publically accessible documents posted to the FDA website during its review for marketing approval of a drug, particularly when interested parties are put on notice by the Federal Register.

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[1] Amneal Pharm., LLC v. Jazz Pharm., Inc., No. IPR2015-01903, 2017 WL 1096638 (P.T.A.B. Mar. 22, 2017) (“‘963 Decision“); Amneal Pharm., LLC v. Jazz Pharm., Inc., No. IPR2015-00545, 2016 WL 7985452 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., No. IPR2015-00546, 2016 WL 7985429 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., No. IPR2015-00547, 2016 WL 7985454 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., No. IPR2015-00548, 2016 WL 7985430 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., Nos. IPR2015-00551, IPR2015-00554, 2016 WL 7985458 (P.T.A.B. July 27, 2016) (“‘730/’988 Decision“).

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