Trials@uspto.gov Paper 25
`Tel: 571-272-7822
`
`Entered: July 28, 2015
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`PAR PHARMACEUTICAL, INC. and AMNEAL PHARMACEUTICALS,
`LLC,
`Petitioner,
`
`v.
`
`JAZZ PHARMACEUTICALS, INC.,
`Patent Owner.
`_____________
`
`Case IPR2015-00547
`Patent 7,765,107 B2
`______________
`
`
`
`
`
`Before JACQUELINE WRIGHT BONILLA, SUSAN L. C. MITCHELL,
`and BRIAN P. MURPHY, Administrative Patent Judges.
`
`BONILLA, Administrative Patent Judge.
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
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`IPR2015-00547
`Patent 7,765,107 B1
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`I.
`
`INTRODUCTION
`Amneal Pharmaceuticals, LLC, and Par Pharmaceutical, Inc. (“Par
`Inc.”) (together, “Petitioner”), filed a Petition requesting an inter partes
`review of claims 1–6 (all claims) of U.S. Patent No. 7,765,107 B2 (Ex.
`1001, “the ’107 patent”). Paper 4 (“Petition” or “Pet.”). Jazz
`Pharmaceuticals, Inc. (“Patent Owner”) filed a Preliminary Response to the
`Petition. Paper 10 (“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.”
`Petitioner challenges claims 1–6 of the ’107 patent as unpatentable
`under 35 U.S.C. § 103(a). Pet. 9. Based on the information presented in the
`Petition and Preliminary Response, we are persuaded there is a reasonable
`likelihood Petitioner would prevail with respect to the claims challenged in
`the Petition. Thus, we institute inter partes review of claims 1–6 of the ’107
`patent.
`A. Related Proceedings
`The parties identify the following as related district court proceedings
`regarding the ’107 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.
`59–59; Paper 8, 1–2.
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`The parties also identify the following as Petitions for inter partes
`review of patents related to the ’107 patent: IPR2015-00545 (Patent
`8,589,182); IPR2015-00546 (Patent 7,765,106); IPR2015-00548 (Patent
`7,895,059); IPR2015-00551 (Patent 8,457,988); and IPR2015-00554 (Patent
`7,668,730). Pet. 59; Paper 8, 2. The parties also identify the following as
`Petitions for covered business method patent review (“CBM”) regarding the
`’106 patent and related patents: CBM2014-00149 (Patent 7,895,059);
`CBM2014-00150 (Patent 8,457,988); CBM2014-00151 (Patent 7,668,730,
`“the ’730 patent”); CBM2014-00153 (Patent 8,589,182); CBM2014-00161
`(Patent 7,765,106); and CBM2014-00175 (the ’107 patent). Pet. 59; Paper
`8, 2.
`
`We note that the Board has denied institution in all six of the above-
`mentioned CBM cases. In addition, a different petitioner has filed a Petition
`for inter partes review of related Patent 7,895,059 in IPR2015-01018.
`Patent Owner identifies the following pending U.S. patent
`applications claiming priority benefit from U.S. Patent Application No.
`10/322,348—the application from which the ’107 patent issued, U.S. Patent
`Application No. 14/196,603, filed March 4, 2014; U.S. Patent Application
`No. 14/219,904, filed March 19, 2014; and U.S. Patent Application No.
`14/219,941, filed March 19, 2014. Paper 8, 3.
`B. Proposed Grounds of Unpatentability
`Petitioner advances two grounds of unpatentability under 35 U.S.C.
`§ 103(a) in relation to all challenged claims in the ’107 patent (Pet. 9–10):
`
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` Reference[s]
`
`Advisory Committee Art (Exs. 1003–1006),
`including FDA Advisory Committee
`Transcript and Slides (Ex. 1003),1 Preclinical
`Safety Review (Ex. 1004),2 Briefing Booklet
`(Ex. 1005),3 and Xyrem Video and Transcript
`(Ex. 1006)4
`Talk About Sleep (Ex.1033)5 in view of
`Honigfeld (Ex. 1034),6 Elsayed (Ex. 1035),7
`and Lilly (Ex. 1010)8
`
`Statutory
`Basis
`§ 103(a)
`
`Challenged
`Claims
`1–6
`
`
`
`§ 103(a)
`
`1–6
`
`In addition, Petitioner supports its challenges with a Declaration by Robert J.
`Valuck, Ph.D., R.Ph. (“Valuck Decl.”) (Ex. 1007). Pet. 9.
`
`1 FDA Peripheral & Central Nervous System Drugs Advisory Committee,
`Transcript and Slides (“Advisory Committee Transcript and Slides”) (July
`13, 2001) (Ex. 1003).
`2 FDA Peripheral & Central Nervous System Drugs Advisory Committee,
`Briefing Information, Division of Neuropharmacological Drug Products
`Preliminary Clinical Safety Review of NDA 21-196 (“Preclinical Safety
`Review”) (July 13, 2001) (Ex. 1004).
`3 FDA Peripheral & Central Nervous System Drugs Advisory Committee,
`Briefing Information, Briefing Booklet (“Briefing Booklet”) (July 13, 2001)
`(Ex. 1005).
`4 FDA Peripheral & Central Nervous System Drugs Advisory Committee,
`Briefing Information, Xyrem Prescription and Distribution Process Video
`and Transcript (“Xyrem Video and Transcript”) (July 13, 2001) (Ex. 1006)
`5 Talk About Sleep, “An Interview with Orphan Medical about Xyrem®,”
`available at http://www.talkaboutsleep.com/an-interview-with-orphan-
`medical-about-xyrem/ (“Talk About Sleep”) (Feb. 12, 2001) (Ex. 1033).
`6 Honigfeld et al., “Reducing Clozapine-Related Morbidity and Mortality: 5
`Years of Experience with the Clozaril National Registry,” J. Clin. Psych. 59
`(suppl. 3): 3-7 (1998) (“Honigfeld”) (Ex. 1034).
`7 Elsayed et al., U.S. Patent No. 6,045,501, filed Aug. 28, 1998, issued Apr.
`4, 2000) (“Elsayed”) (Ex. 1035).
`8 Lilly et al., U.S. Patent Appl. Pub. No. 2004/0176985, filed Mar. 18, 2004,
`published Sept. 9, 2004 (“Lilly”) (Ex. 1010).
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`C. The ’107 Patent
`The ’107 patent, titled “Sensitive Drug Distribution System and
`Method,” issued July 27, 2010, from an application of a divisional
`application filed December 17, 2002. Ex. 1001. The ’107 patent 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. Id. at 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. Steps 240, 242, 246, and 258–266
`of Figure 2C, are reproduced below.
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`. . .
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`Figure 2C, above, depicts a portion of 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
`
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`infusion program (CHIP) for Xyrem®.”9 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).
`D. Illustrative Claims
` The ’107 patent contains two independent claims (1 and 4) and four
`dependent claims (2, 3, 5, and 6), of which claim 1 is illustrative and
`reproduced below:
`1. A computerized method to control abuse of a prescription
`drug comprising:
`controlling with a computer processor the distribution of said
`prescription drug via an exclusive central pharmacy that
`maintains a central database that tracks all prescriptions of
`said prescription drug and analyzes for potential abuse
`situations;
`receiving in the 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;
`processing with the computer processor all prescriptions for
`the prescription drug only by the exclusive central pharmacy
`using only the central database;
`determining with the computer processor current and
`anticipated patterns of potential prescription abuse of said
`prescription drug from periodic reports generated only by
`the central database based on prescription request data from
`a particular medical doctor and further based on filling of
`
`
`9 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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`prescriptions by a particular patient, wherein said request
`data contain information identifying the patient, the drug
`prescribed, and credentials of the medical doctor; and
`selecting with the computer processor multiple controls for
`distribution by said exclusive central pharmacy, the controls
`comprising communicating prescriptions from a physician to
`the central pharmacy; identifying the physician’s name,
`license, and DEA (Drug Enforcement Agency) registration
`information; verifying the prescription; obtaining patient
`information; verifying the physician is eligible to prescribe
`the prescription drug by consulting the National Technical
`Information Services to determine whether the physician has
`an active DEA number and to check on whether any actions
`are pending against the physician; providing comprehensive
`printed materials to the physician; contacting the patient's
`insurance company if any; verifying patient registry
`information; providing comprehensive education
`information to the patient; verifying the patient has reviewed
`the educational materials; verifying the home address of the
`patient; shipping via US postal service or a commercial
`shipping service; receiving the name of an at least 18 year
`old designee to receive the drug; confirming receipt of an
`initial shipment of the drug to the patient returning the drug
`to the pharmacy after two attempts to deliver; launching an
`investigation when a shipment is lost; shipping to another
`pharmacy for delivery; requiring manufacture at a single
`location; releasing inventory in a controlled manner to the
`central pharmacy; questioning early refills; flagging repeat
`instances of lost, stolen, destroyed, or spilled prescriptions;
`limiting the prescription to a one month supply; requiring
`rewriting of the prescription periodically; and making the
`database available to the DEA for checking for abuse
`patterns in the data, for cash payments, and for inappropriate
`questions.
`Ex. 1001, 8:36–9:25 (emphases added). Dependent claim 2 (and claim 5,
`which depends from independent claim 4) of the ’107 patent recite certain
`“initially selected controls.” Id. at 9:26–44, 10:39–59. Dependent claim 3
`
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`(and claim 6, which depends from independent claim 4) of the ’107 patent
`“further comprises consulting a separate database to verify that the medical
`doctor is eligible to prescribe the drug.” Id. at 9:45–47, 10:60–62.
`
`II. ANALYSIS
`A. Real Parties-in-Interest
`Patent Owner asserts that the Petition incorrectly identifies Amneal
`and Par Inc. as the only real parties-in-interest. Prelim. Resp. 8. Patent
`Owner argues that to comply with statutory requirements under 35 U.S.C.
`§ 312(a)(2), the Petition also should have identified all parent companies of
`Par Inc., i.e., Par Pharmaceutical Companies, Inc. (“Par Co.”), Par
`Pharmaceutical Holdings, Inc. (“Par Holdings”), Sky Growth Intermediate
`Holdings I Corporation (“Sky I”), and Sky Growth Intermediate Holdings II
`Corporation (“Sky II”), collectively “Par parents” or “parent” companies.
`Id. at 10–22. Patent Owner contends that because the Petition fails to name
`all real parties-in-interest, the Petition’s filing date should be vacated. Id. at
`8–9, 20–21. Patent Owner requests, therefore, that we dismiss the Petition
`as untimely under 35 U.S.C. § 315(b), which states that we may not institute
`an inter partes review if the Petition is filed more than one year after the
`Petitioner or any real party-in-interest is served with a complaint alleging
`infringement of the patent. Id. at 9, 21–22.
`1. Patent Owner’s Contentions
`Patent Owner asserts, in particular, that “Par Inc.’s parent companies
`exercise control over Par Inc.’s business, including control over this IPR
`proceeding.” Id. at 8–9, 16–20. Patent Owner contends the evidence
`establishes that Par Inc. and its parent companies do not maintain well-
`defined corporate boundaries and act as a single unit, controlled by a single
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`master. Id. at 12–13. Patent Owner points to financial disclosure documents
`indicating that Par Inc. and its parents refer to themselves and act
`collectively as “we,” that the companies undertake acquisitions as a single
`unit, and that the companies operate from a single website that does not
`differentiate among them. Id. at 12–15 (citing Ex. 2016, 8–9, 12, 38–40; Ex.
`2015, 5, 22, 32, 225 207, 209, 224; Exs. 2017–2019); id. at 18–20 (citing
`Ex. 2015, 122, 127; Ex. 2016, 33, 36). Patent Owner provides further
`evidence that Par Holdings has “no independent operations or material assets
`other than [Par Holdings’] ownership of equity interest in [its] subsidiaries,”
`and depends on its subsidiaries “to distribute funds to use so that [Par
`Holdings] may pay [its] obligations and expenses.” Id. at 14–15, 18 (citing
`Ex. 2015, 45; see also id. at 51 (“[O]ur ability to pay dividends . . . will be
`dependent upon cash dividends and distributions or other transfer from our
`subsidiaries, including from [Par Inc.]”)).
`Patent Owner also cites evidence indicating that Par Inc. and its parent
`companies share the same corporate officers, and that Par Holdings and Par
`Inc. share the same principal place of business. Id. at 15 (citing Ex. 2020;
`Ex. 2015, 13, 133, 143, 154–55; Ex. 2021, 28; Paper 3, 2). Patent Owner
`further contends that an in-house attorney participating in the case is
`employed by Par Co., not Par Inc., as evidenced by a printed page from
`LinkedIn, and that Par Inc.’s outside counsel in this IPR proceeding also acts
`as outside counsel for Par Co. in unrelated district court litigation. Id. at 19–
`20 (citing Ex. 2025; Ex. 2026, 16; Ex. 2027, 19).
`Patent Owner argues that because “Par Inc. and its parent companies
`blur the lines of corporate separation, such that the entities operate as a
`
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`single unit,” “[e]ach has the ability to control (and does control) this IPR.”
`Id. at 16.
`
`2. Petitioner’s Response
`In its response addressing the real-parties-in-interest (“RPI”) issue
`(Paper 12, “Pet. RPI Resp.”), Petitioner relies on the Declaration of Mr.
`Barry Gilman, Deputy General Counsel and Secretary for Par Inc. (Ex. 1039
`¶ 1). Petitioner confirms that Par Inc. is a wholly-owned subsidiary of a
`series of holding companies, i.e., the Par parents discussed above. Pet. RPI
`Resp. 2 (citing Ex. 1039 ¶ 2). Petitioner states that Par Inc. makes, sells, and
`distributes pharmaceuticals, and that Par Inc. prepared and filed the
`abbreviated new drug application (“ANDA”) for a generic form of Xyrem®
`that led to the co-pending district court action filed by Patent Owner against
`Par Inc. Id. at 2–4 (citing Ex. 1039 ¶¶ 2–5). By contrast, the Par parents “do
`not conduct any such operations.” Id. at 2 (citing Ex. 1039 ¶¶ 2–4).
`Consistently, Patent Owner has not sued any of Par Inc.’s parent companies
`for infringement of the challenged patent. Id. at 3–4 (citing Ex. 1039 ¶ 6;
`Ex. 1038).
`In response to Patent Owner’s contention that Par Inc. and its parent
`companies “hold themselves out as a single unit” based on statements in
`financial disclosure documents, Petitioner argues that “using these generic
`descriptors in such documents is commonplace.” Id. at 5 (citing Prelim.
`Resp. 13). In addition, even assuming Par Inc. and its parents act as a single
`unit, Petitioner argues that such parent/subsidiary relationships are
`inadequate to show sufficient opportunity to control this IPR proceeding. Id.
`at 6. Petitioner contends that Par Inc. was the only party responsible for
`directing, controlling, and funding the preparation and filing of the Petition,
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`and none of the Par parents participated in any of those activities. Id. at 4
`(citing Ex. 1039 ¶ 6), 7 (citing Ex. 1039 ¶ 7). According to Petitioner, the
`“opportunity for control was simply not present.” Id. at 7.
`3. Analysis
`A patent owner challenging a petitioner’s RPI disclosure must provide
`sufficient evidence to show the disclosure is inadequate. Intellectual
`Ventures Mgmt., LLC v. Xilinx, Inc., Case IPR2012-00018, slip op. at 3
`(PTAB Jan. 24, 2013) (Paper 12). When a patent owner provides sufficient
`evidence prior to institution that reasonably brings into question the
`accuracy of a petitioner’s identification of real parties-in-interest, the overall
`burden remains with the petitioner to establish that it has complied with the
`statutory requirement to identify all real parties-in-interest. Zerto, Inc. v.
`EMC Corp., Case IPR2014-01254, slip op. at 6–7 (PTAB Feb 12, 2015)
`(Paper 32) (“Zerto”).
`The RPI requirement exists to ensure that a non-party is not “litigating
`through a proxy.” See Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc.,
`Case IPR2014-01288, slip op. at 12 (PTAB Feb. 20, 2015) (Paper 13). The
`RPI analysis, moreover, is an inquiry into the “relationship between a party
`and a proceeding;” not “the relationship between parties.” Id. at 11. Thus,
`our focus “is on the degree of control the nonparty could exert over the inter
`partes review, not the petitioner.” Id.
`As stated in the Office Patent Trial Practice Guide, whether a party
`who is not a named participant in a given proceeding is a “real party-in-
`interest” to that proceeding “is a highly fact-dependent question.” 77 Fed.
`Reg. 48,756, 48,759 (Aug. 14, 2012) (Trial Practice Guide). There is no
`“bright line test.” Id. Considerations may include whether a non-party
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`“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. Id. at 48,760. A party
`does not become a “real party-in-interest” merely through association with
`another party in an endeavor unrelated to the AIA proceeding. Id.
`A non-party’s participation with a petitioner may be overt or covert,
`and the evidence may be direct or circumstantial, but the evidence as a
`whole must show that the non-party possessed effective control over the
`inter partes review (“IPR”) proceeding. Zoll Lifecor Corp. v. Philips Elec.
`N. Am. Corp., Case IPR2013-00609, slip op. at 10 (PTAB Mar. 20, 2014)
`(Paper 15).
`With regard to the funding, direction, and control of the Petition and
`this IPR proceeding, we begin with Petitioner’s evidence that Par Inc.: (i) is
`the only operating company among the asserted real parties-in-interest, (ii)
`“solely prepared and filed” the ANDA that precipitated the co-pending
`patent infringement action filed by Patent Owner against Par Inc., (iii) was
`“the sole Par entity responsible for directing, controlling, and funding” the
`preparation and filing of the Petition in this IPR proceeding, and (iv) “was
`the only Par entity that paid any filing or legal fees associated with . . . the
`instant Petitions.” Ex. 1039 ¶¶ 2–8; Pet. RPI Resp. 2–4, 7. Evidence also
`indicates that none of the Par parents “participated in the decision to file” the
`Petition, or “exercise[d] any control over the filing or content” of the
`Petition. Id. at 7 (citing Ex. 1039 ¶ 7). The evidence further indicates that
`Patent Owner has not filed suit alleging infringement of the challenged
`patent against any of the Par parents and that none of the Par parents has
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`intervened in the co-pending patent infringement action or sought a
`declaratory judgment of invalidity of the challenged patent. Id. (citing Ex.
`1039 ¶ 8). Patent Owner does not cite contradictory or inconsistent
`evidence. Papers 17, 18, Patent Owner Reply to Pet. RPI Resp. (“PO RPI
`Reply”) 1–5.
`With regard to the relationship among Par Inc. and the Par parents, we
`accept Patent Owner’s evidence that Par Inc. and its parents, in certain
`capacities, act as a single unit. Such a parent-subsidiary relationship where
`“it is difficult for both insiders and outsiders to determine precisely where
`one ends and another begins,” however, is only one factor that weighs in
`favor of finding a parent company to be a real party-in-interest. Atlanta Gas
`Light Co. v. Bennett Regulator Guards, Inc., Case IPR2013-00453, slip op.
`at 11 (PTAB January 6, 2015) (Paper 88). Here, moreover, Petitioner
`provides evidence establishing that all Par parent companies are non-
`operational holding companies that do not engage in the manufacture,
`distribution, or sale of drugs. Ex. 1039 ¶¶ 2–4, 8.
`The evidence also indicates that the holding companies do not
`generate any revenues themselves (outside of revenues generated by Par
`Inc.), nor have legal departments of their own. Ex. 2033 (deposition
`transcript of Mr. Gilman), 52:16–53:3, 39:2–8, 40:11–18; see also Prelim.
`Resp. 14–15 (noting that Par Holdings describes itself publicly as having
`“no independent operations or material assets other than our ownership of
`equity interest in our subsidiaries”), 18 (stating that Par Holding admits that
`it “will depend on our subsidiaries to distribute funds” to pay dividends); PO
`RPI Reply 4 (stating that “Mr. Gilman admitted the Par Parents do not have
`independent legal departments”).
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`Thus, this case is distinguishable from other cases where the Board
`has found that “Petitioner’s actions have blurred sufficiently the lines of
`corporate separation with its parent, [] such that [the parent] could have
`controlled the filing and participation of the IPRs.” Zoll Lifecor Corp. v.
`Philips Elec. N. Am. Corp., Case IPR2013-00606, slip op. at 10 (PTAB Mar.
`20, 2014) (Paper 13) (“Zoll”). For example, in Zoll, the absence of
`Petitioner’s management team and presence of the parent company’s
`management team at a relevant, court-ordered mediation “suggest[ed] an
`involved and controlling parent corporation representing the unified interests
`of itself and Petitioner.” Id. In other words, evidence in Zoll indicated that
`the parent company had an opportunity to exert control over the inter partes
`review.
`Here, in contrast to Zoll, the evidence indicates that Par Inc. calls the
`shots as it pertains to the inter partes review and related litigations. If
`anything, Par Inc. (rather than any parent) represents its own interests in this
`IPR proceeding, even though those interests may inure, ultimately, to the
`benefit of one or more of its parent companies. The evidence here indicates
`that no parent company has the ability itself (e.g., via a legal department or
`operations) to exert control over the IPR. Cf. GEA Process Eng’g. Inc. v.
`Steuben Foods, Inc., Case IPR2014-00041 (PTAB Feb. 11, 2015) (Paper
`140) (finding a nonparty that paid petitioner’s legal fees for an IPR to be a
`real party-in-interest).
`In Atlanta Gas, a panel of the Board addressed whether a parent
`“holding company that . . . conducts substantially all of its operations
`through its subsidiaries” was a real party-in-interest. Atlanta Gas, Case
`IPR2013-00453, slip op. at 2–3, 9 (Paper 88). In that case, however, a sister
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`subsidiary company provided support services, such as legal services, to
`subsidiaries of the parent, such as the petitioner. Id. at 2–3. In addition, a
`corporate officer of the petitioner (and parent and other subsidiaries)
`engaged in negotiations regarding indemnification on behalf of the parent
`company and its subsidiaries, and worked with counsel for the parent
`company when preparing for a deposition in the IPR. Id. at 3–6, 9–10. It
`also was unclear who paid the filing fees and legal expenses associated with
`the proceeding. Id. at 10–11. The panel found “the demonstrated
`participation of officers and employees of [the parent] and [sister subsidiary]
`and the lack of clarity over who actually financed filing fees and attorney
`costs” to be significant when determining that the parent should have been
`named as a real party-in-interest. Id. at 12–13.
`In Zerto, evidence indicated a parent and wholly own subsidiary had
`“not maintained well-defined corporate boundaries,” and it was again
`“unclear who paid the filing fees and legal expenses” associated with the
`IPR. Zerto, Case IPR2014-01254, slip op. at 13 (Paper 32). Moreover,
`evidence in that case included an inter-company agreement with an
`indemnification clause indicating that the parent would pay expenses for any
`action brought against the petitioner, as well as equivocal testimony by the
`CEO of both companies on the issue of which company controlled or funded
`the proceeding. Id. at 11–13; see also Galderma S.A. v. Allergan Industrie,
`SAS, Case IPR2014-01422, slip op. at 12, 8–13 (PTAB Mar. 5, 2015) (Paper
`14) (stating that “historical evidence for a pattern of control by” the parent
`over a subsidiary distributor acquired by the parent indicated that the parent
`had effective control over the subsidiary).
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`Here, by contrast, evidence indicates that Petitioner Par Inc. is the
`only Par company with a legal department and the only Par company paying
`relevant legal fees and expenses, such as those associated with this
`proceeding. Prelim. Resp. 14–15 (citing Ex. 2015, 45); PO RPI Reply 4
`(citing Ex. 2033, 52:16–53:3); Ex. 1039 ¶¶ 4, 7. Again, the evidence
`indicates that no parent company of Par Inc. has had the ability itself (e.g.,
`via a legal department or operations) to control this IPR proceeding.
`Moreover, there is insufficient evidence that Par Inc. has acted as a proxy for
`any Par parent in this proceeding. See TRW Automotive U.S., LLC, v.
`Magna Elect. Inc., Case IPR2014-01346, slip op. at 8 (PTAB Feb. 20, 2015)
`(Paper 7) (citing RPX Corp. v. Virnetx, Inc., Case IPR2014-00171, slip op. at
`6–10 (PTAB June 23, 2014) (Paper 49)).
`As noted in TRW Automotive, evidence that a parent “ʻconduct[s]
`substantially all of [its] operations through subsidiaries’ is not persuasive or
`sufficient evidence by itself to establish ʻan involved and controlling parent
`corporation representing the unified interests of itself and Petitioner.’” TRW
`Automotive, Case IPR2014-01346, slip op. at 7–8 (Paper 7) (internal citation
`omitted) (quoting Zoll, Case IPR2013-00609, slip op. at 12 (Paper 15)); see
`also Galderma, Case IPR2014-01422, slip op. at 12 (Paper 14) (noting “the
`Board has not found the existence of a parent-subsidiary relationship alone
`sufficient to justify a parent’s status as a real party-in-interest”). Similarly,
`the fact that in-house counsel and corporate officers in this case may hold
`themselves out in some instances as employees of Par Co., rather than Par
`Inc., does not persuade us to find RPI status for the Par parents in this IPR
`proceeding in view of the totality of the evidence before us. Prelim. Resp.
`
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`20; PO RPI Reply 3–5 (citing Ex. 2033, 48:17–51:13, 53:4–60:18; Ex. 2025;
`Ex. 2037).
`Thus, we are persuaded that the evidence of record sufficiently
`establishes that none of the Par parent companies have had the ability to
`exert control over Par Inc. in relation to this IPR, notwithstanding the
`“parent” status of those companies. Petitioner has established that it has
`complied with the statutory requirement to identify all real parties-in-
`interest.
`B. Claim Construction
`For inter partes review, claim terms in an unexpired patent are given
`their broadest reasonable interpretation in light of the patent specification.
`37 C.F.R. § 42.100(b); In re Cuozzo Speed Techs., LLC, No. 2014-1301,
`2015 WL 4097949, at *6–8 (Fed. Cir. July 8, 2015). Claim terms are given
`their ordinary and 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). Any special
`definition for a claim term must be set forth in the specification with
`reasonable clarity, deliberateness, and precision. In re Paulsen, 30 F.3d
`1475, 1480 (Fed. Cir. 1994).
`Claim 1 of the ’107 patent recites a “computerized method to control
`abuse of a prescription drug” by: (1.1) “controlling with a computer
`processor the distribution of said prescription drug via an exclusive central
`pharmacy that maintains a central database that tracks all prescriptions . . .
`and analyzes for potential abuse situations;” (1.2) “receiving in the computer
`processor all prescription requests . . . only at the exclusive central
`pharmacy;” (1.3) “processing with the computer processor all prescriptions
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`for the prescription drug only by the exclusive central pharmacy using only
`the central database;” (1.4) “determining with the computer processor
`current and anticipated patterns of potential prescription abuse of said
`prescription drug from periodic reports generated only by the central
`database;” and (1.5) “selecting with the computer processor multiple
`controls for distribution by said exclusive central pharmacy.” Ex. 1001,
`8:36–9:25. The claim as a whole recites controlling distribution of a
`prescription drug to patients to guard against potential abuse.
`1. “exclusive central pharmacy”
`Petitioner emphasizes that, during prosecution of the application
`leading to the ’107 patent, applicants defined the term “exclusive” as “single
`or sole.” Pet. 8 (citing Ex. 1016, 402). Petitioner, therefore, argues
`“exclusive central pharmacy” should be construed to mean a “single or sole
`pharmacy,” respectively. Id. Patent Owner does not address Petitioner’s
`argument.
`The claim language is consistent with Petitioner’s proposed claim
`construction. The claims recite “processing with the computer processor all
`prescriptions for the prescription drug only by the exclusive central
`pharmacy using only the central database” in an effort to control
`distribution of a prescription drug and guard