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Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals, LLC

United States Court of Appeals, Federal Circuit

July 13, 2018

JAZZ PHARMACEUTICALS, INC., Appellant
v.
AMNEAL PHARMACEUTICALS, LLC, Appellee

          Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2015-00545, IPR2015-00546, IPR2015-00547, IPR2015-00548, IPR2015-00551, IPR2015-00554, IPR2015-01903.

          Kathleen M. Sullivan, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for appellant. Also represented by F. Dominic Cerrito, Gabriel P. Brier, Frank Charles Calvosa, Evangeline Shih, Eric C. Stops; David B. Cochran, Jones Day, Cleveland, OH.

          Steven Arthur Maddox, Maddox Edwards, PLLC, Washington, DC, argued for appellee Also represented by Matthew C. Ruedy.

          Before Newman, Lourie, and Reyna, Circuit Judges.

          Lourie, Circuit Judge.

         Jazz Pharmaceuticals, Inc. ("Jazz") appeals from six inter partes review ("IPR") decisions of the United States Patent and Trademark Office Patent Trial and Appeal Board (the "Board").[1] Collectively, the decisions held certain claims of Jazz's U.S. Patents 7, 668, 730 ("'730 patent"), 7, 765, 106, 7, 765, 107, 7, 895, 059, 8, 589, 182, 8, 457, 988 ("'988 patent"), and 8, 731, 963 ("'963 patent") (together, the "patents in suit") invalid as obvious. Because the Board did not err in its conclusions of obviousness, we affirm.

         Background

         The patents in suit are members of a family of patents owned by Jazz relating to a drug distribution system for tracking prescriptions of a "sensitive drug." '730 patent Abstract.[2] "A sensitive drug is one which can be abused, or has addiction properties or other properties that render the drug sensitive." '730 patent col. 3 ll. 14-16.

         One such sensitive drug is Xyrem®. Jazz exclusively markets Xyrem®, which the U.S. Food and Drug Administration ("FDA") has approved to treat symptoms associated with narcolepsy. However, the active ingredient in Xyrem®, gamma-hydroxybutyrate ("GHB"), may also be illicitly used as a "date-rape drug." See Hillory J. Farias and Samantha Reid Date-Rape Drug Prohibition Act of 2000, Pub. L. No. 106-172, 114 Stat. 7 (2000). Accordingly, under the Controlled Substances Act any approved drug product containing GHB is classified as a Schedule III depressant. 21 C.F.R. § 1308.13. Because of its potential for abuse, the FDA approved Xyrem® under "restricted distribution regulations contained in [21 C.F.R. § 314.500] (Subpart H) to assure safe use of the product." J.A. 11055; see 21 C.F.R. § 314.520.

         During the regulatory review process for Xyrem®, the FDA scheduled an advisory committee meeting for June 6, 2001. The meeting was announced in a May 14, 2001 Federal Register Notice, which stated that the meeting was open to the public and that "[a] main focus of the deliberations will be on risk management issues" associated with Xyrem®. Meeting Notice, 66 Fed. Reg. 24, 391 (May 14, 2001) ("Notice"). The Notice also provided a hyperlink to an FDA website where background material would be posted before the meeting, and the meeting minutes, transcript, and slides would be posted after the meeting. Id. Collectively, the Board referred to the background materials and the meeting minutes, transcript, and slides on the FDA website as the Advisory Committee Art ("ACA materials"). Each of the Board's obviousness determinations relied on the ACA materials as prior art. The primary issue on appeal is whether the ACA materials were sufficiently accessible to the public to constitute prior art.

         I

         The claimed invention of the patents in suit involves tracking prescriptions of a sensitive drug through a database. '730 patent Abstract. Claim 1 of the '730 patent is illustrative, and recites:

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; confirming with a patient that educational material has been read prior to shipping the prescription drug; checking the exclusive computer database for potential abuse of the prescription drug;
mailing 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.

Id. col. 8 l. 37-col. 9 l. 3 (emphases added).

         Of particular relevance to this appeal are the "exclusive computer database," "information identifying," and "periodic reports" terms, italicized above. The specification describes an "exclusive central database" as including all data relevant to distribution of a sensitive drug, "including patient, physician and prescription information." Id. col. 2 ll. 10-12. Several types of such information are listed in the description of figure 2. "The prescriber information contains standard contact information as well as license number, DEA number and physician specialty. Patient and prescription information includes name, social security number, date of birth, gender, contact information, drug identification, patient's appropriate dosage, and number of refills allowed . . . ." Id. col. 4 ll. 18-23.

         Reports may be run against information in the database to "reveal potential abuse of the sensitive drug, such as early refills." Id. col. 2 ll. 14-15. An early refill report is made when a specific event occurs: a patient requests a prescription refill prior to the scheduled refill date. Id. col. 6 ll. 36-42. If the physician does not approve the early refill, the patient must wait until the next scheduled refill date. Id. col. 6 ll. 43-44. Other types of reports are created at set time points, for example, at "a predetermined number of days or product remaining." Id. col. 6 ll. 12-13. Likewise, the specification discusses "sample reports" that have "an associated frequency or frequencies." Id. col. 8 ll. 22-29. While claim 1 refers to "periodic reports," that specific term does not appear elsewhere in the written description.

         II

         Amneal Pharmaceuticals, LLC ("Amneal") petitioned for IPR of the seven patents in suit.[3] The Board instituted review of all petitioned claims for each patent except for the '963 patent, where the Board partially instituted review of a subset of the petitioned claims, see Amneal Pharm., LLC v. Jazz Pharm., Inc., IPR2015-01903, slip op. at 2 (P.T.A.B. Mar. 25, 2016), Paper No. 10. Also, in several of its institution decisions, the Board instituted review on fewer than all grounds raised in the petition. E.g., Amneal Pharm., LLC v. Jazz Pharm., Inc., IPR2015-00551, IPR2015-00554, slip op. at 42 (P.T.A.B. July 28, 2015), Paper No. 20.

          The Board issued six final written decisions regarding the patents in suit.[4] The parties' current dispute centers on the Board's determination that the ACA materials were publicly accessible. The ACA materials consist of four documents associated with the public meeting held by the Xyrem® advisory committee: (1) the FDA advisory committee meeting transcript and slides; (2) an FDA preliminary clinical safety review of Xyrem®; (3) a Xyrem®briefing booklet; and (4) a video and transcript regarding a proposed distribution system for Xyrem®. '730/'988 Decision, 2016 WL 7985458, at *2; Appellant Br. 9. The Board determined that the ACA materials were publicly accessible on an FDA website listed in the Notice no later than October 4, 2001, over two months prior to the critical date of December 17, 2001. '730/'988 Decision, 2016 WL 7985458, at *11, *14.

         Next, the Board turned to whether a person of ordinary skill exercising reasonable diligence would have been able to locate the ACA materials. Id. at *14-16. It found that a person of ordinary skill in the art was a pharmacist or computer scientist having familiarity with computerized drug distribution procedures. Id. at *4-5. Furthermore, the Board agreed with Amneal that a person of ordinary skill "would have been familiar with the Federal Register and motivated to look for notices related to drug distribution, safety, or abuse prevention," and that a skilled artisan would have known that Xyrem®contained an active ingredient susceptible to abuse. Id.; see also id. at *15. According to the Board, this provided a person of ordinary skill with "sufficient motivation to have located the Federal Register Notice and FDA web- site for Xyrem." Id. at *15. Given that motivation, the Board found that a person of ordinary skill would have been capable of locating the Notice, as the Notice expressly stated that a "main focus of the deliberations will be on risk management issues" related to Xyrem®, and the basic purpose of the Federal Register is to provide "notice to interested individuals of the actions of federal agencies." Id. (internal quotation marks omitted).

         The parties also dispute two of the Board's claim constructions and its obviousness analysis. First, the Board construed "periodic reports" to "refer to reports that are generated at regular intervals or intermittently," id. at *8, rejecting Jazz's argument that the term only included reports generated at regular frequencies, id. at *7. Second, the Board construed "information identifying patients" as "information identifying a patient," and not limited to the information listed in the specification or requiring all listed types of information. Id. at *8. Similarly, the Board construed "information identifying . . . various credentials of the any and all medical doctors" as "information identifying various credentials, i.e., at least two different types of credentials, of the prescribing doctor," and not limited to the information listed in the specification or requiring all listed types of information. Id. at *9.

         Applying the above constructions, the Board held all instituted claims of the patents in suit unpatentable as obvious over the ACA materials alone or in combination with Robert R. Korfhage, Information Storage and Retrieval (1997) ("Korfhage"). The Board found that a person of ordinary skill would have been motivated to combine the ACA materials, id. at *16, and that the ACA materials collectively taught or suggested all limitations of the claims, e.g., id. at *22, except for claims 2 and 10 of the '988 patent and claims 24, 26, and 27 of the '963 patent. The ...


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