UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________________
`
`ROXANE LABORATORIES, INC. and PAR PHARMACEUTICAL, INC.
`Petitioners
`
`v.
`
`JAZZ PHARMACEUTICALS, INC.
`Patent Owner
`
`_____________________
`
`Case CBM: Unassigned
`_____________________
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`U.S. PATENT NO. 7,765,106 UNDER 35 U.S.C. § 321 AND § 18 OF THE
`LEAHY-SMITH AMERICA INVENTS ACT
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`

`

`I.
`
`II.
`
`B.
`
`V.
`
`VI.
`
`INTRODUCTION AND STATEMENT OF RELIEF REQUESTED
`(37 C.F.R. § 42.22(a)).................................................................................1
`OVERVIEW...............................................................................................1
`A.
`Background.......................................................................................4
`B.
`The ’106 patent.................................................................................7
`C.
`Summary of Argument ...................................................................13
`III. GROUNDS FOR STANDING (37 C.F.R. § 42.104(a))............................14
`A.
`Roxane and Par have standing and are not estopped (37 C.F.R. §
`42.302)............................................................................................14
`The ’106 patent is directed to a covered business method. ..............15
`1.
`The Patent Claims Cover a “Financial Product or Service”...16
`2.
`The Patent Does Not Claim a “Technological Invention” .....19
`IV. Claim Construction...................................................................................27
`A.
`“Exclusive Central Computer System” and “Exclusive
`Computer Database” .......................................................................27
`“Periodic reports generated” ...........................................................27
`B.
`EACH OF THE REFERENCES CITED IS AVAILABLE PRIOR
`ART..........................................................................................................28
`A.
`The ACA (ROX1003–ROX1006) qualifies as a “printed
`publication” ....................................................................................28
`PERSON OF SKILL IN THE ART (“POSA”) & STATE OF THE
`ART..........................................................................................................33
`IDENTIFICATION OF CHALLENGE ....................................................34
`A.
`Ground 1: Claims 1-8 are more likely than not unpatentable
`under 35 U.S.C. § 101 because they recite mere abstract ideas .......35
`1.
`Claims 1-8 are not statutory subject matter under § 101,
`because they recite mere abstract ideas. ................................36
`Even Assuming these Method Claims Apply to a
`Computer System, They Only Reference a General
`Purpose Computer ................................................................42
`The Method Claims Do Not Include Meaningful
`Limitations Beyond the Abstract Idea Itself ..........................45
`
`VII.
`
`TABLE OF CONTENTS
`
`2.
`
`3.
`
`-i-
`
`

`

`B.
`
`Ground 2: Claims 1-8 are anticipated by the ACA..........................50
`1.
`Claim 1 .................................................................................53
`2.
`Claims 2, 4, 6 and 8 ..............................................................65
`3.
`Claim 3 .................................................................................67
`4.
`Claim 5 .................................................................................68
`5.
`Claim 7 .................................................................................68
`Ground 3: Claims 1-8 would have been obvious over the ACA ......69
`C.
`Secondary considerations do not rebut the prima facie case............74
`D.
`VIII. PETITIONER WILL MORE LIKELY THAN NOT PREVAIL WITH
`RESPECT TO AT LEAST ONE CHALLENGED CLAIM .....................79
`IX. MANDATORY NOTICES (37 C.F.R. § 42.8(a)(1)).................................79
`X.
`CONCLUSION ........................................................................................80
`
`-ii-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`I.
`
`INTRODUCTION AND STATEMENT OF RELIEF REQUESTED (37
`C.F.R. § 42.22(a))
`
`Roxane Laboratories,
`
`Inc. and Par Pharmaceutical,
`
`Inc.
`
`(collectively,
`
`“Petitioners”) petition for covered business method patent (“CBM”) review and
`
`seek cancellation of claims 1-8 of U.S. Patent No. 7,765,106 (“the ’106 patent”)
`
`(ROX1001). According to Office records, the ’106 patent is assigned to Jazz
`
`Pharmaceuticals, Inc. Jazz is currently asserting the ’106 patent against Petitioners.
`
`(ROX1024-ROX1025.)
`
`II. OVERVIEW
`
`Claims 1-8 of the ’106 patent are unpatentable because they: (i) claim
`
`ineligible subject matter under 35 U.S.C. § 101; (ii) are anticipated in the prior art
`
`under 35 U.S.C. § 102(b); and (iii) are obvious over the prior art under 35 U.S.C.
`
`§ 103, even in view of secondary considerations of nonobviousness.
`
`Because the compound sodium oxybate has been known since the 1970s,
`
`and is not the subject of patent protection, Jazz has sought to patent a broad and
`
`abstract method of distributing the drug. The challenged claims simply recite
`
`methods
`
`regarding the abstract
`
`idea of centralized distribution of
`
`retail
`
`goods(drugs) using an exclusive central computer system that encompasses the
`
`non-technical steps of interfacing with financial businesses (patient’s insurance
`
`company), rendering them incidental to a financial product or service. The claim
`
`preambles reciting a method for treating a patient with a drug does not change their
`
`-1-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`abstract nature.
`
`There is no claim step requiring a patient
`
`to take or be
`
`administered the drug. At most,
`
`the claim language teaches “delivering the
`
`prescription drug to the patient.” In fact, the patentees deleted a “treating the
`
`patient with the drug [GHB]” step from application claims 33 and 35, which claims
`
`ultimately issued as claims 1 and 3, respectively. (See ROX1002, Amendment
`
`dated March 11, 2010; pages 148-159 of the file history.) All the claim steps are
`
`directed to non-technical drug distribution steps. Thus, the preamble does not
`
`change the basic characteristic that the claims are directed to the abstract idea of
`
`centralizing drug distribution. Additionally, for reasons set forth below,
`
`the
`
`preamble does not qualify as a claim limitation.
`
`Further, the claims are not directed to any technological invention. The
`
`claims’ recitation of a generic computer system and computer database do not
`
`change this conclusion. Moreover, the claimed distribution methods are not novel
`
`or nonobvious and do not solve a technological problem with any technological
`
`solution. CBM review is, therefore, appropriate.
`
`By law, no patent should issue if it claims: “A prior art method X,” which is
`
`simply an abstract idea, and nothing more. Yet the ’106 patent claims are just that.
`
`At best, the claims are drawn to abstract ideas, and nothing more, artfully drafted
`
`in an effort designed to monopolize the abstract idea itself, as warned against in
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1297
`
`-2-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`(2012). Challenged claims 1-8 are directed to the abstract idea of centralizing
`
`distribution of hazardous or abuse-prone drugs to reduce the abuse risks associated
`
`with the drug without any meaningful
`
`limitations. The claimed steps can be
`
`performed by a human intermediary without any computer operation. (ROX1007,
`
`¶¶ 47-48.)
`
`The challenged claims are also unpatentable as anticipated by and obvious in
`
`view of the relevant prior art. For example, published materials that were used in
`
`an FDA Advisory Committee Meeting (the “Advisory Committee Art” or “ACA”)
`
`disclose every limitation of the challenged claims more than a year before the ’106
`
`patent’s earliest effective filing date. Accordingly,
`
`the challenged claims are
`
`anticipated. Alternatively, the challenged claims would also have been obvious to a
`
`person of ordinary skill in the art (“POSA”) over the same art, even in the view of
`
`any available objective indicia of nonobviousness.
`
`The grounds raised in this Petition demonstrate that it is more likely than not
`
`that Petitioners will prevail with respect to at least one of the challenged claims,
`
`and CBM review of the ’106 patent
`
`is warranted. To find otherwise and to
`
`maintain the ’106 patent would be to allow for patenting of an abstract idea, and
`
`would withdraw that which was in the public domain. The Board should institute
`
`CBM review and cancel each of challenged claims 1-8.
`
`-3-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`A.
`
`Background
`
`The ’106 patent generally pertains to centralizing the distribution of
`
`hazardous or abuse-prone drugs. The ’106 patent is listed in the United States Food
`
`and Drug Administration’s electronic publication known as the “Orange Book”
`
`(“OB”) in connection with the prescription drug product Xyrem®. The active
`
`ingredient in Xyrem®—sodium oxybate (GHB)—was well-known in the prior art
`
`as being susceptible to diversion and abuse. (ROX1007, ¶49.) So, as a prerequisite
`
`to FDA approval, the sponsor of Xyrem®, with assistance and direction from an
`
`FDA advisory committee, agreed to employ a centralized distribution program to
`
`thwart abusive and illicit uses of Xyrem®, now known as the Xyrem® Success
`
`Program. By listing the ’106 patent in the FDA’s OB for Xyrem®, Jazz is asserting
`
`that the Xyrem® Success Program is an embodiment of at least one claim of the
`
`’106 patent. In the FDA advisory committee meetings held as a prerequisite to
`
`approving the Xyrem® New Drug Application (“NDA”), the ACA materials were
`
`used. These ACA materials, published more than one year prior to the earliest
`
`effective filing date of the ’106 patent, disclose each and every limitation of the
`
`challenged claims.
`
`Aside from the explicit disclosure of the claimed methods in the prior art,
`
`the mitigation of risks associated with the distributing potentially hazardous drugs
`
`was well-established in the art before the earliest effective filing date of the ’106
`
`-4-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`patent. For example, in 1982, Hoffman-La Roche (“Roche”) gained approval for
`
`Accutane® (isotretinoin), which became known to be a potent teratogen that was
`
`responsible for birth defects. (ROX1007, ¶23.) Under pressure to respond, Roche
`
`developed a Pregnancy Prevention Program for Accutane®. (Id.) The program
`
`included informed consent forms to be completed by the patient and prescriber,
`
`along with patient counseling on the teratogenic risk of Accutane®, the need to
`
`avoid pregnancy, and the use of proper birth control methods. Finally, this program
`
`required that women of childbearing potential must test serum negative for a
`
`pregnancy before beginning treatment. (Id.)
`
`Following in the footsteps of Accutane®, in 1990, Clozaril® (clozapine)
`
`entered the United States market for use with treatment-resistant schizophrenia.
`
`(ROX1007, ¶24.) However, Clozaril® use was associated with agranulocytosis, a
`
`potentially fatal blood disorder resulting in white blood cell loss. (Id.) To mitigate
`
`these risks and control the distribution of Clozaril®, the manufacturer implemented
`
`a national registry system that limited the distribution of the drug. (Id.) The
`
`distribution system required registration in an integrated computerized database—
`
`collecting information identifying the patient and the physician—and measuring
`
`the patient’s white blood cell count before filling a prescription. (Id.) If a patient or
`
`physician was non-compliant, the national registry took corrective action, such as
`
`contacting and re-educating the prescribing physician and/or discontinuing
`
`-5-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`supplying of the prescription to the patient. (Id.) Overall, the Clozaril® distribution
`
`system resulted in 97% patient/physician compliance over its first five years of
`
`implementation. (Id.) While the use of a computer differentiated the Clozaril®
`
`system from the Accutane® system,
`
`the use of computers was not novel to
`
`prescription drug distribution, because by 1990 pharmacies had long been using
`
`computers to aid in filling prescriptions. (Id., ¶25.)
`
`Based on the experiences with Accutane® and Clozaril®, in 1999, the
`
`manufacturers of prescription thalidomide—a known teratogen—developed a
`
`hybrid system, combining the Clozaril® computerized registry system with the
`
`Accutane® pregnancy monitoring/prevention, and informed consent requirements.
`
`(Id., ¶26.) This combination served to monitor and control the distribution of the
`
`drug. (Id.)
`
`Thus, by 1999, at
`
`least three systems for the restricted distribution of
`
`effective, yet hazardous prescription drugs were known in the art and implemented
`
`across the industry. Moreover, while risk management programs were developing
`
`during the 1980s through 1990s, pharmacies had already been making use of
`
`computerized systems for the distribution of controlled substances, i.e., drugs with
`
`potential for abuse. (Id., ¶¶27-28.) Aiming to reduce dispensing time, improve
`
`accuracy and accountability, and streamline recordkeeping, controlled substance
`
`distribution veered toward automation via the implementation of computerized
`
`-6-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`distribution systems. (Id., ¶28.) Computerized systems were helpful in generating
`
`reports tracking patients who were receiving excessive supplies of controlled
`
`substances. (Id.) Controlled substance distribution could be tied to information
`
`identifying the patient, prescribing doctor, quantity of the drug dispensed, and
`
`hospital drug inventory. (Id.) The systems could be queried to provide data, such
`
`as, prescriptions by doctor and patient. (Id.) These systems allowed for detecting
`
`patterns of abuse and delivering medication to the patients. (Id.)
`
`Given the proclivity for diversion and abuse of GHB, the FDA held advisory
`
`committee meetings as a prerequisite to approving the Xyrem® New Drug
`
`Application (“NDA”). The ACA materials used in that meeting were all published
`
`more than one year prior to the earliest effective filing date of the ’106 patent and
`
`disclose each and every limitation of the challenged claims.
`
`Consequently, prior to the earliest effective filing date of the ’106 patent,
`
`prior art existed that would have led a person of ordinary skill in the art (“POSA”)
`
`to develop the centralized distribution methods claimed in the ’106 patent to
`
`minimize
`
`the
`
`risks
`
`associated with the distribution of hazardous, but
`
`therapeutically beneficial, prescription drugs. (Id., ¶29.)
`
`B.
`
`The ’106 patent
`
`Against this backdrop, Jazz obtained the ’106 patent. The ’106 patent relates
`
`to “[a] drug distribution system and method [that] utilizes a central pharmacy and
`
`-7-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`database to track all prescriptions for a sensitive drug.” (ROX1001, Abstract.)
`
`According to the ’106 specification, multiple controls are imposed on the
`
`distribution of
`
`the prescription drug.
`
`(Id., 1:55-58.) Physician and patient
`
`prescription patterns are monitored for abuse using an exclusive central database.
`
`Physician eligibility to prescribe the drug is verified via a database, including
`
`determining whether disciplinary actions have been brought against the physician.
`
`(Id., 1:48-56.) Prior to shipping the prescription drug,
`
`the central pharmacy
`
`confirms whether the patient has been educated about the prescription, and only
`
`ships the prescription drug when no abuse is found related to the patient and
`
`prescribing doctor. (Id., 1:59-67.) The prescription drug is then delivered to the
`
`patient. (Id., 1:59-67, 2:1-3.)
`
`The ’106 patent claims are directed to a method of distributing a prescription
`
`drug using an exclusive central computer system that comprises: (1) receiving all
`
`prescriptions for any and all patients being prescribed the prescription drug and
`
`from any and all doctors allowed to prescribe the prescription drug only into the
`
`exclusive computer
`
`system,
`
`the prescriptions
`
`identifying the patient,
`
`the
`
`prescription drug and the medical doctors’ various credentials; (2) requiring
`
`entering of the information into an exclusive computer database associated with the
`
`exclusive computer system to analyze the potential for abuse, misuse or diversion
`
`(hereinafter, collectively, “abuse”) of
`
`the prescription drug, such that all
`
`-8-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`prescriptions for the prescription drug are processed for authorization only using
`
`the exclusive central computer system and the exclusive computer database; (3)
`
`controlling the distribution of the prescription drug using the exclusive computer
`
`system by determining current and anticipated patterns of potential prescription
`
`abuse from periodic reports generated by the exclusive central computer system
`
`and the exclusive computer database and selecting multiple controls
`
`for
`
`distribution, such as verifying the prescription and obtaining patient information;
`
`(4) authorizing the filling using the exclusive computer system of a prescription for
`
`the prescription drug that has been subjected to multiple controls and has been
`
`approved for shipment to the patient; (5) noting, based on one or more of the
`
`analysis of the potential abuse of the prescription drug and the periodic report, that
`
`there is a potential for abuse by the patient to whom the prescription drug is
`
`prescribed; and (6) delivering the prescription drug to the patient.
`
`Although the ‘106 patent claims’ preambles recite a method of treatment, the
`
`preamble is not a limitation, or does not change the basic characteristic of the claim
`
`as an abstract computerized and centralized drug distribution method. “Recitations
`
`in the preamble generally are not afforded patentable weight unless they actually
`
`limit the scope of the claim, when read in the context of the entire claim. Any
`
`terminology in the preamble that limits the structure of the claimed invention must
`
`be treated as a claim limitation. However, if the body of a claim fully and
`
`-9-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`intrinsically sets forth all of the limitations of the claimed invention, and the
`
`preamble merely states the purpose or intended use of the invention, rather than
`
`any distinct definition of any of the claimed invention's limitations, then the
`
`preamble is not considered a limitation and is of no significance to claim
`
`construction. Furthermore, a preamble is not a limitation where the claim is
`
`directed to a product and the preamble merely recites a property inherent in an old
`
`product defined by the remainder of the claim.”
`
`(See MPEP §2111.02.) The
`
`preamble may limit a claim, “but only if the applicant clearly and unmistakably
`
`relied on those uses or benefits to distinguish prior art.” Catalina Marketing Int’l v.
`
`Coolsavings.com, Inc., 289 F.3d 801, 809 (Fed. Cir. 2002). If an applicant does
`
`“not rely on the preamble to define its invention nor is the phrase essential to
`
`understand limitations or terms in the claim body”, then the preamble is not a claim
`
`limitation. Id. at 810. See also, Digitech Image Technologies, LLC v. Electronics
`
`for Imaging, Inc., 2014 WL 3377201 (Fed. Cir. July 11, 2014) (holding preamble
`
`does not limit claim scope if it merely states the purpose or intended use of an
`
`invention).
`
`Here, the claims’ preamble recites a “therapeutic method for treating a
`
`patient with a prescription drug that is effective for therapeutic purposes, but is
`
`also a drug that has potential to be abused, misused, or diverted.” There is,
`
`however, no step in the claim requiring a patient to take or be administered the
`
`-10-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`drug. All the claim steps are directed to non-technical drug distribution steps. The
`
`steps in the body of the claims describe the entire claimed method of distributing a
`
`drug with a potential for abuse. Nor does the preamble set forth any patentability
`
`conferring limitation. Thus, the preamble does not limit the scope of the claims,
`
`but merely states the purpose or intended use of the invention and should not be
`
`given any patentable weight.
`
`In the ‘106 patent background section, applicants acknowledge that GHB
`
`was well known for use in treating narcolepsy and daytime cataplexy.
`
`In
`
`particular, the Applicants state that “[c]ertain agents, such as gamma hydroxy
`
`butyrate (GHB) are also abused, yet also are effective for therapeutic purposes
`
`such as treatment of daytime cataplexy in patients with narcolepsy.” (ROX1001,
`
`Background of the Invention section of ‘106 patent.)
`
`During prosecution of the ’106 patent’s parent application, the independent
`
`claims were amended to add the following limitations to overcome prior art
`
`rejections: (1) “all prescriptions for the sensitive drug are processed only by the
`
`exclusive central pharmacy using only the exclusive computer database;” and (2)
`
`“mailing the sensitive drug to the patient only if no potential abuse is found by the
`
`patient to whom the sensitive drug is prescribed and the doctor prescribing the
`
`sensitive drug.”1 (ROX1016, 241-248, Amdt. & Reply, filed Aug. 8, 2006; 303-
`
`1 Emphasis added throughout unless otherwise noted.
`
`-11-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`334, Appeal Brief, filed July 18, 2007; 442, Amdt. & Reply, filed Nov. 2, 2009.)
`
`Applicants argued that the prior art did not teach these limitations. (ROX1016,
`
`449, Amdt. & Reply, filed Nov. 2, 2009.) Applicants also argued that “checking
`
`the exclusive computer database for potential abuse of the sensitive drug” was not
`
`taught in the prior art. (Id.) All other limitations of the claims were found to have
`
`been taught by the cited prior art. (Id., at 258-262, Final Rejection, Oct. 18, 2006;
`
`and at 420-433, Decision on Appeal, Aug. 31, 2009.)
`
`Subsequently,
`
`in the Notice of Allowance for the ’106 patent’s parent
`
`application,
`
`the Examiner
`
`relied on the above-noted limitations to confer
`
`patentability, stating: “the closest prior art of record does not teach or fairly
`
`suggest that all prescriptions for GHB are processed only by the exclusive central
`
`pharmacy using only the exclusive computer database. The exclusive computer
`
`database is checked for potential GHB abuse and GHB is provided/mailed only if
`
`no potential abuse is found by the patient to whom GHB is prescribed and the
`
`doctor/authorized prescriber of the GHB.” (Id., at 475-476, Notice of Allowance,
`
`p. 11.) The ’106 patent claims rely on similar limitations for patentability. In the
`
`‘106 patent Notice of Allowance, the Examiner stated “the closest prior art of
`
`record does not teach or fairly suggest receiving, only into an exclusive central
`
`computer system/exclusive computer database, all prescriptions for any and all
`
`patients being prescribed the prescription drug, controlling the distribution of said
`
`-12-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`prescription drug using the exclusive central computer system that tracks all
`
`prescriptions of said prescription drug and analyzes for the potential abuse of the
`
`prescription drug by determining current and anticipated patterns of potential
`
`prescription abuse and authorizing the filling, using the exclusive central computer
`
`system/exclusive computer database, of a prescription for the prescription drug that
`
`has been subjected to multiple controls.” (ROX1002, Allowable Subject Matter
`
`section of the Notice of Allowance dated April 30, 2010.) Thus, neither the
`
`patentees nor the Patent Office considered the preamble as conferring patentability.
`
`However, as this petition demonstrates, none of even these alleged “novel”
`
`limitations were novel. Use of an “exclusive central computer system” and
`
`“exclusive computer database,” and their claimed uses, were well-known in the
`
`prior art. (See § VII.B.1.) For example, the same art also discloses authorizing the
`
`filling, using the exclusive central computer system/exclusive computer database,
`
`of a prescription that has been subjected to multiple controls. (See § VII.B.1.)
`
`C.
`
`Summary of Argument
`
`Petitioners, individually and collectively, have standing to seek CBM review
`
`of the ’106 patent, and the ’106 patent is eligible for CBM review. Supported by
`
`the Declaration of Dr. Robert Valuck, Ph.D., R.Ph. (“Valuck Dec.”) (ROX1007),
`
`an expert in the fields of drug safety, drug abuse prevention, and prescription drug
`
`distribution, this petition asserts three different grounds of unpatentability: Claims
`
`-13-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`1-8 are (1) unpatentable under 35 U.S.C. § 101 because they recite mere abstract
`
`ideas; (2) anticipated by the ACA; and (3) obviousness over the ACA. In support
`
`of these grounds, this petition proposes terms for construction, identifies each prior
`
`art reference relied upon, and provides required mandatory notices.
`
`III. GROUNDS FOR STANDING (37 C.F.R. § 42.104(a))
`
`The undersigned, Roxane and Par certify that the ’106 patent is available for
`
`post-grant review as a covered business method patent under § 18 of the Leahy–
`
`Smith America Invents Act (“AIA”). AIA, § 18(a)(1)(A). A covered business
`
`method patent, as the AIA defines, must claim a method or corresponding
`
`apparatus for performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service, except for patents
`
`for technological inventions. AIA § 18(d)(1). Because the ’106 patent satisfies
`
`these requirements, it is eligible for CBM post-grant review under § 18.
`
`A.
`
`Roxane and Par have standing and are not estopped (37 C.F.R. §
`42.302)
`
`Roxane and Par are eligible to make this petition. “A petitioner may not file
`
`… a petition to institute a covered business method patent review of the patent …
`
`unless the petitioner … has been sued for infringement of the patent or has been
`
`charged with infringement under that patent.” 37 C.F.R. § 42.302(a). Patent Owner
`
`Jazz has sued each of Roxane and Par in the District of New Jersey and has
`
`accused the Petitioners of infringing claims 1-8 of the ’106 patent. As a result,
`
`-14-
`
`

`

`CBM Petition of U.S. Patent No. 7,765,106
`
`Roxane and Par have standing to file this petition under 37 C.F.R. § 42.302(a).
`
`Also, because neither Roxane nor Par have been party to any other decided post-
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`grant or inter partes review of the challenged ’106 patent claims under 37 C.F.R. §
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`42.302(b), Petitioners are not estopped from bringing this challenge.
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`B.
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`The ’106 patent is directed to a covered business method.
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`The AIA defines a CBM patent as “a patent that claims a method or
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`corresponding apparatus for performing data processing or other operations used in
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`the practice, administration, or management of a financial product or service….”
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`See AIA § 18(d)(1); see also 37 C.F.R. § 42.301. As the Office has recognized, the
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`AIA’s legislative history establishes that “financial product or service” should be
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`“interpreted broadly,” encompassing patents “claiming activities that are financial
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`in nature,
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`incidental
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`to a financial activity or complementary to a financial
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`activity.” See 77 Fed. Reg. 157, p. 48735. Of particular applicability to the ’106
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`patent, Sen. Schumer, co-author of § 18, stated that “[t]o meet this [eligibility]
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`requirement, the patent need not recite a specific financial product or service.
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`Rather, the patent claims must only be broad enough to cover a financial product
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`or service.” See 157 Cong. Rec. S1365 (daily ed. Mar. 8, 2011) (Sen. Schumer).
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`Moreover, the language “practice, administration, or management” is “intended to
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`cover any ancillary activities related to a financial product or service, including
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`CBM Petition of U.S. Patent No. 7,765,106
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`… customer interfaces, Web site management and functionality, transmission or
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`management of data, [and] customer communications….” Id.
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`1.
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`The Patent Claims Cover a “Financial Product or Service”
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`The ’106 patent is directed to a “drug distribution system and [that] utilizes a
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`central pharmacy and database to track all prescriptions for a sensitive drug.”
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`(ROX1001, Abstract.) The claimed system is used in commerce. Claim 1 of the
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`’106 patent, calls for controls on the distribution of the prescription drug, “the
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`controls [including] … contacting the patient’s insurance company; … shipping
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`via US postal service or a commercial shipping service; . . . requiring manufacture
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`at a single location; authorizing release of inventory in a controlled manner; [and]
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`checking . . . for cash payments” (Id., 8:67-9:32, (emphasis added).) Only one
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`CBM-eligible claim is needed to deem an entire patent eligible for CBM review.2
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`Here, at least claim 1 is CBM-eligible expressly covering incidental activities
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`related to a financial product or service—verifying insurance coverage and patient
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`payment. Moreover, the ’106 patent specification also supports CBM-eligibility,
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`explaining how the claimed activities are incidental to a financial activity. Prior
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`Board decisions have looked to the specification,
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`in light of the claims,
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`to
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`determine that a patent is CBM-eligible even though the claims may not map
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`2 Transitional Program for Covered Business Method Patents—Definitions
`of Covered Business Method Patent and Technological Invention; Final Rule, 77
`Fed. Reg. 48734, 48736 (Aug. 14, 2012) (Response to Comment 8).
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`

`CBM Petition of U.S. Patent No. 7,765,106
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`directly or explicitly to a financial product or service.3 The Board determined that
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`the specification revealing that the claims encompassed activities incidental to
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`financial activity was sufficient to deem the patent eligible for CBM review.4
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`Likewise, the ’106 patent specification demonstrates how the ’106 patent is
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`at least incidental to financial activities. For example, for an early prescription
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`refill, “cash payers are also identified … [and] if the physician approves … the
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`pharmacist notifies an intake reimbursement specialist to contact the patient’s
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`insurance provider to verify coverage for the early refill … If the insurance
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`provider will pay … the specialist submits the coverage approval form as
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`notification that the refill may be processed.” (ROX1001, 6:41-55.) Moreover, the
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`’106 patent provides “[i]f the insurance provider will not pay ... it is determined
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`whether the patient is willing and/or able to pay … If it was determined…that the
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`patient was willing and able to pay, the patient is informed of the cost of the
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`product and is given payment options … Once payment is received … the
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`specialist submits a coverage approval form to the pharmacy team as notification
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`that the refill request can be processed.” (ROX1001, 6:59-7:1.) The ’106 patent has
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`additional examples which demonstrate that its system is used in commerce, such
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`as the “NORD” process, which is “used to determine whether donated, third party
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`3 See CBM2012-00005, Paper No. 17, January 23, 2013.
`4 See CBM2014-00002, Paper No. 16, April 1, 2014; See also CBM2014-
`00003, Paper No. 12, April 1, 2014.
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`CBM Petition of U.S. Patent No. 7,765,106
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`funds are available for paying for prescriptions where neither insurance will, nor
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`the patient can pay.” (ROX1001, 7:4-7.)
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`Other ‘106 patent claims cover direct or ancillary financial product or
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`service activities. Claims 1, 3, 5 and 7 all recite activities such as “receiving . . . all
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`prescriptions …”; “identifying the physician's name,
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`license, and DEA (Drug
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`Enforcement Agency) registration information”; “contacting the patient's insurance
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`company if any;” “confirming receipt of an initial shipment of the drug to the
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`patient.” (ROX1001, 8:36-14:8.) These claimed steps comprise the core activities
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`of running the business of an exclusive (single) mail order pharmacy that direct
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`ships to patients. (ROX1007, ¶¶ 45-46.)
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`The ’106 patent’s support for claiming activities incidental to a financial
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`activity is not at all surprising in view of the Office’s classification of the ’106
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`patent within Class 705,
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`titled “Data processing: financial, business practice,
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`management, or cost/price determination.” Though this alone might not be
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`dispositive, it is highly relevant given that the Office itself anticipated that patents
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`subject to CBM would be “typically classifiable in Class 705.” 77 Fed. Reg. 157,
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`p. 48711 (Aug. 14, 2012). Further, the ’106 patent was specifically classified under
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`subclass 2,
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`titled “Health care management (e.g., record management, ICDA
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`billing).” Part of the