Filed on behalf of Petitioner COALITION FOR AFFORDABLE DRUGS III LLC

By: Daniel W. McDonald, Esq. MERCHANT & GOULD P.C.

3200 IDS Center 80 South 8th Street Minneapolis, MN 55402-2215 dmcdonald@merchantgould.com Main Telephone: (612) 332-5300

Main Facsimile: (612) 332-9081

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 No. To Be Assigned Patent No. 7,895,059

_____________________

PETITION FOR INTER PARTES REVIEW OF U.S. PATENT NO. 7,895,059 UNDER 35 U.S.C. § 311–319 AND 37 C.F.R. § 42.100

i

TABLE OF CONTENTS

  INTRODUCTION ........................................................................................... 1 I.

  MANDATORY NOTICES ............................................................................. 2 II.

  The Real Party-In-Interest (37 C.F.R. § 42.8(b)(1)) ................................. 2 A.

  Notice of Related Matters (37 C.F.R. § 42.8(b)(2)) .................................. 3 B.

  Designation of Lead and Back-Up Counsel .............................................. 5 C.

  Notice of Service Information (37 C.F.R. § 42.8(b)(4)) ........................... 6 D.

  PAYMENT OF FEES ..................................................................................... 6 III.

  REQUIREMENTS UNDER 37 C.F.R. § 42.104 ............................................ 6 IV.

  Grounds for Standing ................................................................................ 6 A.

  Identification of Challenge and Precise Relief Requested ........................ 7 B.

  Specific Art and Statutory Ground on Which the Challenge is 1.Based ................................................................................................. 7 

  Evidence Relied Upon to Support the Challenge .............................. 8 2.

  OVERVIEW .................................................................................................... 8 V.

  Person of Ordinary Skill In The Art .......................................................... 8 A.

  Overview of the ’059 Patent ..................................................................... 9 B.

  State of the Prior Art ............................................................................... 11 C.

  Claim Construction ........................................................................................ 18 VI.

  CLAIMS 1-16 ARE INVALID AS OBVIOUS OVER VII.COMBINATIONS OF LILLY, THE DAC TRANSCRIPT AND THE CSR ................................................................................................................ 20 

  Each Of The References Cited Is Available Prior Art. ........................... 21 A.

  Lilly and Camarda are § 102(e) prior art. ........................................ 21 1.

ii

  The DAC Transcript and the CSR are “printed publications” 2.that qualify as § 102(b) prior art. ..................................................... 23 

  Ground 1: Claims 1-6, 9 and 12-14 are obvious over Lilly in view B.of the DAC Transcript and Camarda. ..................................................... 27 

  The Combination of Lilly, the DAC Transcript and Camarda 1.Discloses All of the Elements of claims 1-6, 9 and 12-14 of the ’059 Patent ................................................................................. 29 

  Ground 2: Claims 7-8, 10-11 and 15-16 are obvious over Lilly in C.view of the DAC Transcript, Camarda and the CSR. ............................. 55 

  There is a motivation to combine Lilly, the DAC Transcript, 1.Camarda and the CSR ..................................................................... 55 

  The Combination of Lilly, the DAC Transcript, Camarda and 2.the CSR discloses all of the elements of claims 7-8, 10-11 and 15-16 ................................................................................................ 56 

  No evidence of secondary considerations rebuts the showing that D.claims 1-16 are obvious .......................................................................... 60 

  CONCLUSION .............................................................................................. 60 VIII.

iii

TABLE OF AUTHORITIES

Cases

Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955 (Fed. Cir. 1986) ...................................................................... 8

EMC Corp. v. Personal Web Techs., LLC, IPR2013-00084 (P.T.A.B.) ....... 23

Graham v. John Deere Co., 383 U.S. 1 (1966) ............................................. 21

In re Giacomini, 612 F.3d 1380 (Fed. Cir. 2010) .................................... 21, 22

In re GPAC, 57 F.3d 1573 (Fed. Cir. 1995) .................................................... 8

In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004) ................................ 23, 24

In re Wyer, 655 F.2d 221 (CCPA 1981) ........................................................ 25

KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007) ................................. 8, 21

Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346 (Fed. Cir. 2013) ................. 60

SRI Int’l, Inc. v. Internet Sec. Sys., Inc.,

511 F.3d 1186 (Fed. Cir. 2008) .................................................................. 23

Veeam Software Corp. v. Symantec Corp., IPR2013-00142 (P.T.A.B.) ....... 25

Voter Verified, Inc. v. Premier Election Solutions, Inc., 698 F.3d 1374 (Fed. Cir. 2012) .................................................................. 23

Statutes

35 U.S.C. § 102 ............................................................................ 23, 26, 27, 29

35 U.S.C. § 103 .......................................................................................... 7, 21

35 U.S.C. § 315 ................................................................................................ 7

35 U.S.C. § 318 ................................................................................................ 6

35 U.S.C. §§ 311-319 ...................................................................................... 1

Rules

37 C.F.R. § 42.6 ............................................................................................... 8

37 C.F.R. § 42.8 ................................................................................... 2, 3, 5, 6

37 C.F.R. § 42.10 ............................................................................................. 8

iv

37 C.F.R. § 42.63 ............................................................................................. 8

37 C.F.R. § 42.100 ..................................................................................... 1, 18

37 C.F.R. § 42.102 ....................................................................................... 6, 7

37 C.F.R. § 42.104 ....................................................................................... 6, 7

Other Authorities

M.P.E.P. § 2141.03 .......................................................................................... 8

The Federal Advisory Committee Act, 5 U.S.C. App 2 §10(b) .................... 25

1

INTRODUCTION I.

The Coalition for Affordable Drugs III LLC (“Petitioner” or “CFAD”)

respectfully requests inter partes review (“IPR”) of claims 1-16 of U.S. Patent No.

7,895,059 (“the ’059 Patent”) (Ex. 1001) in accordance with 35 U.S.C. §§ 311-319

and 37 C.F.R. § 42.100. Claims 1-16 of the ’059 Patent, which is assigned to Jazz

Pharmaceuticals, Inc. (the “Patent Owner”), are directed to “[a] computerized

method of distributing a prescription drug under exclusive control of an exclusive

central pharmacy.” (See, e.g., Ex. 1001, col. 8:37-9:3.) The specific prescription

drug identified in certain claims of the ’059 Patent is gamma hydroxyl butyrate

(GHB), which is marketed under the trade name Xyrem® by the Patent Owner.

The claims of the ’059 Patent are unpatentable because they would have

been obvious to a person of ordinary skill in the art (“POSA”) as of the time of

filing of the patent. Specifically, the combination of U.S. Published Application

No. 2004/0176985 to Lilly et al. (“Lilly”) (Ex. 1002), the published transcript of an

FDA Drug Advisory Committee Meeting relating to Xyrem® (“the DAC

Transcript”) (Ex. 1003), and U.S. Patent No. 6,587,829 (“Camarda”) renders

obvious to a POSA the limitations of claims 1-6, 9 and 12-14 of the ’059 Patent, as

set forth below in Ground 1. Further, a published Preliminary Clinical Safety

Review of the NDA for Xyrem® (the “CSR”) (Ex. 1004), in combination with

2

Lilly, the DAC Transcript and Camarda, renders obvious the limitations of

challenged claims 7-8, 10-11 and 15-16 obvious, as set forth below in Ground 2.

For the reasons explained herein, Petitioner is likely to prevail on the

asserted Grounds 1 and/or 2 with respect to the challenged claims. Petitioner

requests that this Board institute an IPR and cancel claims 1-16 of the ’059 Patent.

MANDATORY NOTICES II.

The Real Party-In-Interest (37 C.F.R. § 42.8(b)(1) A.

Pursuant to 37 C.F.R. § 42.8(b)(1), Petitioner certifies that Coalition For

Affordable Drugs III LLC (“CFAD”), Hayman Credes Master Fund, L.P.

(“Credes”), Hayman Orange Fund SPC – Portfolio A (“HOF”), Hayman Capital

Master Fund, L.P. (“HCMF”), Hayman Capital Management, L.P. (“HCM”),

Hayman Offshore Management, Inc. (“HOM”), Hayman Investments, L.L.C.

(“HI”), nXn Partners, LLC (“nXnP”), IP Navigation Group, LLC (“IPNav”), J

Kyle Bass, and Erich Spangenberg are the real parties in interest (collectively,

“RPI”). The RPI hereby certify the following information: CFAD is a wholly

owned subsidiary of Credes. Credes is a limited partnership. HOF is a segregated

portfolio company. HCMF is a limited partnership. HCM is the general partner and

investment manager of Credes and HCMF. HCM is the investment manager of

HOF. HOM is the administrative general partner of Credes and HCMF. HI is the

general partner of HCM. J Kyle Bass is the sole member of HI and sole

3

shareholder of HOM. CFAD, Credes, HOF and HCMF act, directly or indirectly,

through HCM as the general partner and/or investment manager of Credes, HOF

and HCMF. nXnP is a paid consultant to HCM. Erich Spangenberg is 98.5%

member of nXnP. IPNav is a paid consultant to nXnP. Erich Spangenberg is the

98.5% member of IPNav. Other than HCM and J Kyle Bass in his capacity as the

Chief Investment Officer of HCM and nXnP and Erich Spangenberg in his

capacity as the Manager/CEO of nXnP, no other person (including any investor,

limited partner, or member or any other person in any of CFAD, Credes, HOF,

HCMF, HCM, HOM, HI, nXnP or IPNav) has authority to direct or control (i) the

timing of, filing of, content of, or any decisions or other activities relating to this

Petition or (ii) any timing, future filings, content of, or any decisions or other

activities relating to the future proceedings related to this Petition. All of the costs

associated with this Petition are expected to be borne by HCM, CFAD, Credes,

HOF and/or HCMF.

Notice of Related Matters (37 C.F.R. § 42.8(b)(2) B.

Petitioner has knowledge that the ’059 Patent is subject matter in the

following litigations that could affect, or be affected by, a decision in this

proceeding: Jazz Pharms, Inc. v. Watson Labs., Inc., 2:14-cv-07757 (D.N.J. Dec.

11, 2014); Jazz Pharms, Inc. v. Ranbaxy Labs., Ltd., 2:14-cv-04467 (D.N.J. July

15, 2014); Jazz Pharms., Inc. v. Amneal Pharms., LLC, 2:13-cv-00391 (D.N.J.

4

Dec. 27, 2013) (consolidated with Jazz Pharms., Inc. v. Amneal Pharms., LLC,

2:13-cv-5450 (D.N.J.) and Jazz Pharms, Inc. v. Par Pharm., Inc., 2:13-cv-07884

(D.N.J.)); and Jazz Pharms, Inc. v. Roxane Laboratories, Inc., 2:10-cv-06108

(D.N.J. Nov. 22, 2010) (consolidated with Jazz Pharms, Inc. v. Roxane

Laboratories, Inc., 2:11-cv-00660 (D.N.J.); Jazz Pharms, Inc. v. Roxane

Laboratories, Inc., 2:11-cv-02523 (D.N.J.); Jazz Pharms, Inc. v. Roxane

Laboratories, Inc., 2:12-cv-06761 (D.N.J.); Jazz Pharms, Inc. v. Roxane

Laboratories, Inc., 2:11-cv-07459 (D.N.J.)).

The ’059 Patent also is subject of an inter partes review petition: Par

Pharmaceutical, Inc. et al. v. Jazz Pharms., Inc, (IPR2015-00548, filed January 8,

2015. Additionally, the following patents related to the ’059 Patent are subject to

inter partes review petitions: U.S. Patent No. 7,765,107 is the subject of IPR 2015-

00547 (Amneal Pharms., LLC v. Jazz Pharms, Inc.), filed January 8, 2015, which

is pending (no decision on institution yet). U.S. Patent No. 7,668,730 is the subject

of IPR 2015-00554 (Par Pharms., Inc. v. Jazz Pharms, Inc.), filed January 8, 2015,

which is pending (no decision on institution yet). U.S. Patent No. 7,765,106 is the

subject of IPR 2015-00546 (Amneal Pharms., LLC v. Jazz Pharms, Inc.), filed

January 8, 2015, which is pending (no decision on institution yet). U.S. Patent No.

8,457,988 is the subject of IPR 2015-00551 (Par Pharms., Inc. v. Jazz Pharms,

Inc.), filed January 8, 2015, which is pending (no decision on institution yet). U.S.

5

Patent No. 8,589,182 is the subject of IPR 2015-00545 (Amneal Pharms., LLC v.

Jazz Pharms., Inc.), filed January 8, 2015, which is pending (no decision on

institution yet).

Designation of Lead and Back-Up Counsel C.

Pursuant to 37 C.F.R. §§ 42.8(b)(3) and 42.10(a), Petitioner hereby

identifies its lead and backup counsel as shown below. A Power of Attorney is

being filed concurrently herewith in accordance with 37 C.F.R. § 42.10(b).

Lead Counsel Back-Up Counsel Daniel W. McDonald, Esq. Registration No. 32,044 MERCHANT & GOULD P.C. 3200 IDS Center 80 South 8th Street Minneapolis, MN 55402-2215 dmcdonald@merchantgould.com Main Telephone: 612.332.5300 Main Facsimile: 612.332.9081

Jeffrey D. Blake, Esq. Registration No. 58,884 MERCHANT & GOULD P.C. 191 Peachtree Street N.E., Suite 4300 Atlanta, GA 30303 jblake@merchantgould.com Main Telephone: 404.954.5100 Main Facsimile: 404.954.5099 jblake@merchantgould.com Thomas J. Leach, Esq. Registration No. 53,188 Brent E. Routman (Pro Hac Vice) MERCHANT & GOULD P.C. 3200 IDS Center 80 South 8th Street Minneapolis, MN 55402-2215 tleach@merchantgould.com Main Telephone: 612.332.5300 Main Facsimile: 612.332.9081

6

Notice of Service Information (37 C.F.R. § 42.8(b)(4)) D.

Please direct all correspondence to counsel at the above address. CFAD

consents to email service at: jblake@merchantgould.com and

XyremIPR@merchantgould.com.

PAYMENT OF FEES III.

Payment of $26,200.00 for the fees set forth in 37 C.F.R. § 42.15(a) (1-4) for

this Petition For Inter Partes Review accompanies this request by way of credit

card payment. Sixteen claims are challenged, so no excess claim fees are included.

The undersigned further authorizes payment for any additional fees that might be

due in connection with this Petition to be charged to Deposit Account No. 13-2725.

REQUIREMENTS UNDER 37 C.F.R. § 42.104 IV.

Grounds for Standing A.

Pursuant to 37 C.F.R. § 42.104(a), Petitioner hereby certifies that the ’059

Patent is available for inter partes review under 37 C.F.R. § 42.102(a)(2), and that

the Petitioner is not barred or estopped from requesting inter partes review

challenging the claims of the ’059 Patent on the grounds identified in this Petition.

None of Petitioner, any real party in interest, or any privy of Petitioner has

received a final written decision under 35 U.S.C. § 318(a) with respect to any

claim of the ’059 Patent on any ground that was raised or could have been raised

by Petitioner, any real party in interest, or any privy of Petitioner in any inter

partes review, post grant review, or covered business method patent review.

7

Further, Petitioner certifies that: (1) Petitioner has not filed a civil action

challenging the validity of a claim of the ’059 Patent; (2) none of the Petitioner, the

Petitioner’s real party-in-interest, or a privy of the Petitioner was served with a

complaint alleging infringement of the ’059 Patent; (3) the estoppel provisions of

35 U.S.C. § 315(e)(1) do not prohibit this inter partes review; and (4) the ’059

Patent is not a patent described in section 3(n)(1) of the Leahy-Smith America

Invents Act and so is available for this inter partes review, per 37 C.F.R. § 42.102

(a)(2).

Identification of Challenge and Precise Relief Requested B.

Specific Art and Statutory Ground on Which the Challenge 1.is Based

Pursuant to 37 C.F.R. § 42.104 (b), Petitioner challenges Claims 1-16 of the

’059 Patent. Claims 1-16 of the ’059 Patent are unpatentable because they would

have been obvious under 35 U.S.C. § 103(a) in view of the combined teachings of

Lilly, the DAC Transcript, Camarda and the CSR. Specifically, Claims 1-6, 9 and

12-14 of the ’059 Patent are invalid as obvious over Lilly in view of the DAC

Transcript and Camarda. (See Exs. 1002-1004, 1006.) Claims 7-8, 10-11 and 15-16

of the ’059 Patent are invalid as obvious over Lilly in view of the DAC Transcript,

Camarda and the CSR. (See Exs. 1002-1006.)

8

Evidence Relied Upon to Support the Challenge 2.

Petitioner relies upon each of exhibits cited herein. Petitioner also relies

upon the Declaration of Dr. Jeffrey Fudin (Ex. 1006), and the documents cited

therein. Attached are a Power of Attorney, an Exhibit List, and copies of the

references per 37 C.F.R. § 42.10(b), § 42.63(e), and § 42.6 (c).

OVERVIEW V.

Person of Ordinary Skill In The Art A.

A POSA is a hypothetical person who is presumed to be aware of all

pertinent art. M.P.E.P. § 2141.03. Factors that may be considered in determining

the level of ordinary skill in the art include: (A) the “type of problems encountered

in the art;” (B) “prior art solutions to those problems;” (C) “rapidity with which

innovations are made;” (D) “sophistication of the technology;” and (E)

“educational level of active workers in the field.” In re GPAC, 57 F.3d 1573, 1579

(Fed. Cir. 1995); Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d

955, 962, (Fed. Cir. 1986). “A person of ordinary skill in the art is also a person of

ordinary creativity, not an automaton.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,

421, 82 USPQ2d 1385, 1397 (2007).

As explained in the Declaration of Dr. Fudin, a POSA as of the earliest

effective filing date of ’059 Patent would hold a Bachelor’s or Doctor of Pharmacy

(Pharm.D.) degree and a license as a registered pharmacist with 3-5 years of

9

relevant work experience. (Ex. 1006 at ¶¶ 38-41.) A POSA, as a practicing

pharmacist, would also have extensive experience using computer systems and

databases to order drug and medical supplies, dispense drugs, and search for

information regarding drugs. (Id.) Moreover, a POSA would also have experience

receiving prescriptions by fax or telephone. (Id.) A POSA would also be generally

aware of all Federal and State regulations regarding the acquisition and distribution

of pharmaceuticals. (Id. at ¶ 4.) A POSA would be familiar with New Drug

Applications (“NDA”), the various Federal Drug Administration’s (“FDA”)

regulations, the general process for obtaining FDA approval for a drug, and where

to locate such information. (Id. at ¶ 41.)

Overview of the ’059 Patent B.

The ’059 Patent relates to “[a] drug distribution system and method [that]

utilizes a central pharmacy and database to track all prescriptions for a sensitive

drug.” (Ex. 1001, Abstract and col. 1:44-46; see also Ex. 1006 at ¶¶ 89-101.) The

central pharmacy stores data about the prescription patterns of physicians and

patients. (Id. at Abstract and col. 2:16-18.) The stored data may include a

physician’s “contact information as well as license number, DEA number and

physician specialty.” (Id. at col. 4:24-26; see also id. at col. 2:16-21.) The data

also may include a patient’s “name, social security number, date of birth, contact

information, drug identification, [the] patient’s appropriate dosage, and number of

10

refills allowed.” (Id. at col. 4:26-29.) The data is entered “into an application/

database referred to as CHIPS, which is used to maintain a record of a client home

infusion program (CHIP)” for drug products such as Xyrem®. (Id. at col. 4:34-39.)

This central database is used to monitor for patterns of abuse of drug products such

as Xyrem® by verifying that (1) a physician should be allowed to prescribe a drug

product and (2) a patient receiving a drug product does not have a history of abuse.

(Id. at col. 1:46-58.)

The ’059 Patent also describes that education material is provided to both

the patient and the physician. For example, the patent discloses that “[p]rior to

shipping the drug for the first time, the patient is contacted to ensure that product

and abuse related education materials have been received and/or read.” (Id. at col.

1:59-62.) Once the patient confirms that the educational materials have been

reviewed, the drug product is shipped from the central pharmacy to the patient. (Id.

at col. 1:62-2:3.) Alternatively, the drug product may be shipped by the central

pharmacy to another pharmacy for the patient to pick it up there. (Id. at col. 2:4-8.)

Finally, the ’059 Patent discloses that reports and queries can be run from

the database to provide information that might reveal potential abuse or misuse of

the drug. (Id. at col. 2:19-21.)

11

State of the Prior Art C.

Risk management programs to help control the distribution of prescription

drug products with the potential for abuse or potentially dangerous side effects

were developed in the 1980s and 1990s. (Ex. 1006 at ¶ 43.) During that time,

pharmacies began using computerized systems for the distribution of controlled

substances, i.e., drugs with potential for abuse. (Id.) Pharmacies implemented these

computerized systems to help them prevent the abuse of controlled substances,

notify patients of side effects experienced when taking prescription medications,

reduce the time necessary for dispensing drug products, and improve accuracy and

accountability in the dispensing process. (Id.) Automation was the order of the day

as computers became more prevalent in pharmacies around the country.

These computerized systems were particularly helpful in generating reports

tracking patients who were receiving excessive supplies of controlled substances.

(Id., ¶ 45.) Distribution of controlled substances could be associated with

information identifying the patient, the prescribing doctor, the quantity of the drug

dispensed, and the hospital inventory of a drug. (Id.) And, the systems could be

queried to provide data, such as prescriptions by doctor and patient. (Id.) These

systems allowed for detecting patterns of abuse, as described in more detail below.

(Id. at ¶¶ 52-55.)

12

Lilly – Lilly is one example of a prior art computerized system that was used

to track prescription data to prevent misuse and abuse of controlled substances.

(Ex. 1002 at Abstract; see also Ex. 1006 at ¶¶ 46-48, 57-62.) Specifically, Lilly

discloses a computerized method for tracking prescriptive medications that stores

the information in a central location. (Id.; see also id. at ¶¶ 0050-0051.) The

“stored data for each prescriptive medication transaction includes searchable data

such as the patient’s name, address, doctor, pharmacy, aberrant use flag, and the

like.” (Id. at Abstract.)

In discussing the background of the pharmaceutical industry, Lilly describes

estimates that show “more than four million people a year in the U.S. misuse or

abuse prescription drugs.” (Id. at ¶ 0004.) Further, according to Lilly, “[t]he AMA

estimates that 5% of physicians are grossly negligent and 1-1.5% are dishonest in

their prescribing of pharmaceuticals,” which amounted to a cost of about $2.5

billion annually in the early 2000s. (Id. at ¶ 0005.) Lilly describes its goal as

reducing the misuse and abuse of prescription drug products:

It would be desirable to provide a healthcare utility that can

assist substantially in reducing these misused and abused

prescriptions. It would be desirable to provide major changes in

the delivery of prescription drug products that produce

measureable social and economic impacts on spending within

the healthcare value chain including less abuse-related

healthcare costs, fewer erroneous prescriptions, more

13

accountability, and better tracking and management of

prescriptions.

(Id. at ¶ 0012 (emphasis added); see also id. at ¶¶ 0009, 0054 and 0057.)

Lilly maintains patients’ prescription medication information in a central

database accessible through a secure computer connection that allows health care

providers to access a “complete prescriptive medication history of the patient

including prescriptive medications by other doctors.” (Id. at ¶¶ 0037, 0050.) The

Lilly system uses a “pharmaceutical information control organization” as a central

location or database for storing the prescription history of patients. (Id. at ¶¶ 0051,

0061.) Using that pharmaceutical information control organization, a physician or

other medical provider can search the Lilly system to see if the patient has been

prescribed a certain drug by another doctor or whether the patient has attempted to

fill a prescription more than once. (Id. at ¶ 0054.) Likewise, the Lilly system

allows a pharmacist to use the database to determine whether the purchaser of the

prescription should receive the prescription. (Id. at ¶ 0039.) Based on a search of

the database, the pharmacist can accept or decline filling the prescription. (Id.)

Lilly specifically discloses that the pharmaceutical computer data for each

prescription medication purchaser (i.e., a patient) includes a name of the patient,

the patient’s address, the drug prescribed, the quantity of the drug prescribed, the

dosage, the name of the physician that prescribed the drug, and the name of the

14

pharmacist that filled the prescription. (Id. at ¶ 0041.) This information allows

users of the system to identify and track patterns of abuse or misuse, including by

generating reports tracking patients who were receiving excessive supplies of

controlled substances. (Id. at ¶ 0072.)

Camarda – Camarda discloses a method and apparatus for “improving

patient compliance with prescriptions” using a computerized system to “convert

prescription information into electronic form as records for each patient.” (Ex.

1004 at Abstract; see also id. at col. 4:49-55 and Figures 1-3.) “Each such patient

record includes information about the patient from the prescription and the

prescription itself.” (Id. at Abstract; see also Ex. 1006 at ¶¶ 75-78.) “In addition,

demographic information about the patient is obtained from other commercial

databases and added to the patient record.”(Id.)

The information in the patient’s record is analyzed to determine which

patients are most likely to fail to comply with their prescription. (Id. at col. 2:55-

60; Fig. 5.) A pharmacist, physician or some other party can then provide

intervention for the patients that are likely to have trouble with compliance. (Id. at

col. 15:48-16:21.) Intervention by a pharmacist or someone else has been shown to

improve patient compliance with their prescription, which improves health

outcomes and consequently lowers health costs. (Id. at col. 2:6-8.)

15

The intervention may come in several forms, including providing

educational materials that warn of the consequences of not taking a medication or

remind a patient to get a refill of the medication. (Id. at col. 5:22-38, 8:56-62, 9:60-

65.) The educational materials, like other forms of intervention, may be provided at

various times, including before a prescription is filled. (Id. at col. 9:65-67, 15:48-

53, Fig. 5.) In other words, if it is determined that intervention is required,

Camarda teaches that education materials may be provided to a patient before they

are given prescription drugs.

The DAC Transcript – The computerized system disclosed in Lilly has a

particular application for drugs such Xyrem®, a drug covered by the ’059 Patent.

The active ingredient in Xyrem®—sodium oxybate, the sodium salt of gamma

hydroxybuyrate (“GHB”)—was well-known in the prior art as being susceptible to

diversion and abuse. (Ex. 1003 at pp. 9:18-10:3; see also Ex. 1006 at ¶¶ 49-51, 63-

74.) Given the potential for diversion or abuse of GHB, the FDA held advisory

committee meetings to discuss granting approval to the Xyrem® New Drug

Application (“NDA”). (Id. at pp. 5:23-6:3.)

Orphan Medical, Inc. (the sponsor of Xyrem® and predecessor in interest to

Patent Owner) appeared before the FDA’s Advisory Committee on June 6, 2001,

to address methods for preventing abuse of Xyrem®. (Id. at p. 9:12-17.) As a result

of that Advisory Committee meeting, Orphan Medical, Inc. proposed to employ a

16

centralized distribution program to attempt to reduce abusive and illicit uses of

Xyrem®. (Id. at p. 176:3-13.) That program is known as the Xyrem® Success

Program. (Id.) The DAC Transcript discloses that the Xyrem® Success Program is

designed to inform patients and physicians about the risks of GHB and minimize

the risk to patients or others that may get access to it. (Id. at p. 15:1-6.)

The risk management method disclosed in the DAC Transcript was

implemented as a “closed distribution system.” (Id. at p. 400.) That system makes

the product available through a central pharmacy that approves the prescription and

ships the drug product to the patient, as shown in the slide below:

(Id.) As part of the Xyrem® Success Program, physicians and patients receive

detailed educational materials about the risks and the appropriate use of Xyrem®.

The DAC Transcript discloses a patient could be required to sign an informed

consent form or a registry form indicating that the patient received and/or read

these educational materials prior to receiving the first shipment of the drug. (Id. at

17

pp. 371:8-372:15, 374:7-375:23, 376:4-18.) As shown in the DAC Transcript slide

below, the requirement that patients receive and/or read educational materials

allows an opportunity for intervention by a physician or pharmacist if a potential

for abuse is detected. (Id. at pp. 18:15-18, 184:24-185:7, slide on p. 539.)

The DAC Transcript specifically discloses that the drug product is

manufactured in one place, sent to a single national specialty pharmacy, and

eventually shipped to the patient. (Id. at pp. 15:14-16:5.) The benefits of this

program are that not only is the product distributed from a central location, but all

of the controls and all of the records are in one place. (Id. at p. 178:1-11.)

The CSR – An additional aspect of the FDA’s approval process for Xyrem®

was a Preliminary Clinical Safety Review (“CSR”) of Orphan Medical’s NDA.

The review was completed on May 3, 2001, and the CSR reference shows the

outcome of the review. The CSR is related to the DAC Transcript as it concerns

the same drug by the same company. A POSA would have understood to look to

18

the teaching of both the DAC Transcript and the CSR to address the issues

regarding misuse and abuse of Xyrem®. (Ex. 1006 at ¶¶ 79-81.)

The CSR reference discloses a “Risk Management Program” for Xyrem®.

(Ex. 1005 at p. 108.) As part of the Risk Management Program, a patient’s

prescription of Xyrem® may be shipped to another pharmacy for patient pick-up,

rather than shipping it directly to the patient. (Id. at p. 110.) The central pharmacy

verifies that the second pharmacy has controls in place on the distribution of the

prescription drug to protect against diversion of Xyrem® before shipping the drug

there. (Id.) The CSR discloses that the second pharmacy will employ the same

safety checks as the first pharmacy, such as providing educational material to the

patient, handling insurance information, flagging lost, stolen, destroyed, or spilled

prescriptions, etc. (Id.)

As discussed below in Section VII.B-C, the combined teachings of Lilly,

Camarda, the DAC Transcript and the CSR would have instructed a POSA how to

implement the methods of drug distribution claimed in the ’059 Patent to minimize

the risks associated with hazardous prescription drugs. (Ex. 1006 at ¶¶ 52-55.)

Claim Construction VI.

The terms of claims 1-16 are to be given their broadest reasonable

interpretation, as understood by one of ordinary skill in the art. See 37 C.F.R. §

42.100 (b). The terms recited in claims 1-16 generally do not require construction

19

and can be interpreted according to their plain and ordinary meaning. The

exceptions are the terms “exclusive central pharmacy” and “exclusive computer

database,” which appear as limitations in each of claims 1-16.

Consistent with the broadest reasonable interpretation, the term “exclusive”

should be construed to mean “single or sole.” The terms “exclusive central

pharmacy” and “exclusive computer database” thus should be construed,

consistent with their plain meaning in the context of the ’059 Patent, to mean a

“single or sole controlling pharmacy” and a “single or sole computer database,”

respectively. (Ex. 1006 at ¶¶ 82-88.)

The ’059 Patent discloses that a “central pharmacy and database” is used to

control the tracking of all prescriptions for a sensitive drug. (Ex. 1001 at Abstract

and 1:44-46.) The Summary of the Invention, states that the “exclusive central

database contains all relevant data related to distribution of the drug and process of

distributing it ...” (Id. at col. 2:16-18 (emphasis added).) An embodiment of the

invention is described where “Xyrem® is distributed and dispensed through a

primary and exclusive central pharmacy, and is not stocked in retail pharmacy

outlets.” (Id. at col. 3:46-48 (emphasis added).) In this embodiment, “bulk sodium

oxybate is manufactured at a single site, as is the finished drug product.” (Id. at col.

3:40-41.) Following manufacture of the drug product, it is stored at a facility

compliant with FDA Schedule III regulations, where it is dispensed only through a

20

single pharmacy. (Id. at col. 3:44-46.) This would have demonstrated to a POSA

that there is a single or sole pharmacy controlling all aspects of the drug and its

distribution, including a single database containing all the relevant information

concerning prescriptions for the drug and filling such prescriptions. (Ex. 1006 at ¶

85.)

The prosecution history of U.S. Patent No. 7,668,730 also supports these

constructions. (Id. at ¶ 86.) The ’059 Patent is a continuation of the ’730 Patent. As

a result, statements made during the prosecution of the ‘730 Patent are relevant to

the construction of the claim terms in the ’059 Patent. During the prosecution of

the ’730 Patent, the applicants explicitly defined the term “exclusive” as “single or

sole.” (Ex. 1008 at p. 2.)

Further, the dictionary defines “exclusive” as “limiting or limited to

possession, control, or use (as by a single individual or organization or by a special

group or class)” . . . “single, sole.” Webster’s Third New Intern’l Dictionary, 793

(3rd ed. 2002) (Ex. 1009.)

CLAIMS 1-16 ARE INVALID AS OBVIOUS OVER VII.COMBINATIONS OF LILLY, THE DAC TRANSCRIPT, CAMARDA AND THE CSR

The challenged claims of the ’059 Patent are invalid as obvious based on the

proposed grounds set forth below:

21

Ground Claim Nos. Proposed Statutory Rejections 1 1-6, 9 and 12-

14 Claims 1-6, 9 and 12-14 are obvious under 35 U.S.C § 103(a) over Lilly in view of the DAC Transcript and Camarda

2 7-8, 10-11 and 15-16

Claims 7-8, 10-11 and 15-16 are obvious under 35 U.S.C § 103(a) over Lilly in view of the DAC Transcript, Camarda and the CSR

For each asserted ground, Petitioner demonstrates below where each

limitation either exists in the prior art or is rendered obvious by evaluating the

scope and contents of the prior art, any differences between the art and the

challenged claims, the knowledge of person of ordinary skill in the art, and any

available objective indicia of nonobviousness in accordance with Graham v. John

Deere Co., 383 U.S. 1 (1966) and KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398

(2007). This Petition, supported by the Fudin Declaration, demonstrates that the

Board should institute inter partes review and cancel claims 1-16 of the ’059

Patent as unpatentable under 35 U.S.C. § 103.

Each Of The References Cited Is Available Prior Art. A.

Lilly and Camarda are § 102(e) prior art. 1.

Lilly qualifies as prior art under 35 U.S.C. § 102(e). Lilly is a published

continuation of application No. 10/062,251 (“the ’251 Application”), which was

filed on January 31, 2002. (Ex. 1002.) The ’251 Application claims priority to

Provisional Patent Application No. 60/332,807, which was filed on November 14,

2001. (Id.) Thus, Lilly is entitled to a § 102(e) prior art date of November 14, 2001,

22

the filing date of its earliest provisional application. See In re Giacomini, 612 F.3d

1380 (Fed. Cir. 2010).

By contrast, the earliest effective filing date of the ’059 Patent (which has

different inventors than Lilly) is December 17, 2002. This is considered the date of

invention for the claimed subject matter of the ’059 Patent under § 102(e). Lilly

thus qualifies as “an application for patent, published under section 122(b), by

another filed in the United States before the invention by the applicant for [the

’059] patent,” and is considered § 102(e) prior art to the ’059 Patent.

Camarda likewise qualifies as prior art under 35 U.S.C. § 102(e). The

application for Camarda was filed on July 30, 1998, and it claims priority to

Provisional Patent Application Nos. 60/054,384 (filed on July 31, 1997) and

60/082, 172 (filed on April 16, 1998). (Ex. 1004.) Thus, Camarda is entitled to a §

102(e) prior art date of July 31, 1997, the filing date of its earliest provisional

application. See Giacomini, 612 F.3d 1380. Camarda issued as a patent on July 1,

2003, and names different inventors than the ’059 Patent. Given that the ’059

Patent has a date of invention § 102(e) of December 17, 2002, Camarda qualifies

as “a patent granted on an application for patent by another filed in the United

States before the invention by the applicant for patent.” 35 U.S.C. § 102(e) (2).

23

The DAC Transcript and the CSR are “printed 2.publications” that qualify as § 102(b) prior art.

The DAC Transcript and the CSR qualify as prior art printed publications

under 35 U.S.C. § 102(b). “When considering whether a given reference qualifies

as a prior art “printed publication,” the key inquiry is whether the reference was

made ‘sufficiently accessible to the public interested in the art’ before the critical

date.” Voter Verified, Inc. v. Premier Election Solutions, Inc., 698 F.3d 1374, 1380

(Fed. Cir. 2012). “[T]he ultimate question is whether the reference was ‘available

to the extent that persons interested and ordinarily skilled in the subject matter or

art[,] exercising reasonable diligence, can locate it.’” Voter Verified, 698 F.3d at

1380 (quoting SRI Int’l, Inc. v. Internet Sec. Sys., Inc., 511 F.3d 1186, 1194 (Fed.

Cir. 2008); see also EMC Corp. v. Personal Web Techs., LLC, IPR2013-00084,

Paper 14, at 20-21 (P.T.A.B. May 17, 2013) (“An electronic publication can

qualify as ‘publicly accessible printed publication’ if sufficient evidence is

provided demonstrating that the publication was disseminated publicly or

otherwise made available to a POSA exercising reasonable diligence.”)

“[T]he determination of whether a given reference qualifies as a prior art

‘printed publication’ involves a case-by-case inquiry into the facts and

circumstances surrounding the reference’s disclosure to members of the public.”

EMC, IPR2013-00084, Paper 14, at 19 (citing In re Klopfenstein, 380 F.3d 1345,

1350 (Fed. Cir. 2004)). In Klopfenstein, the court described a four-factor balancing

24

test to determine if a reference is a “printed publication”: (1) the length of time the

display was exhibited; (2) the expertise of the target audience; (3) the existence (or

lack thereof) of reasonable expectations that the material displayed would not be

copied; and (4) the simplicity or ease with which the material displayed could have

been copied. 380 F.3d at 1350.

There is ample evidence that the DAC Transcript qualifies as a publicly

available prior art printed publication. According to the Federal Register notice

announcing the FDA’s Advisory Committee meeting on Xyrem®, the transcript of

the meeting was posted on the internet approximately three weeks after the June 6,

2001 meeting:

Background material from the sponsor and FDA will be posted 24

hours before the meeting at the Peripheral and Central Nervous

System Drugs Advisory Committee docket site at http://www.fda.gov/

ohrms /dockets/ac/acmenu.htm (Click on the year 2001 and scroll

down to the Peripheral and Central Nervous Systems Drugs

meetings.) This is the same website where you can find the minutes,

transcript, and slides from the meeting. This material is generally

posted about 3 weeks after the meeting.

(Ex.1015) (emphasis added). Based on the stated timeline, the DAC Transcript

thus was publicly accessible to a POSA exercising reasonable diligence as of June

27, 2001. Such “competent evidence of the [FDA’s] general [] practice may be

relied upon to establish an approximate time” the DAC Transcript became publicly

25

accessible. See The Federal Advisory Committee Act, 5 U.S.C. App 2 §10(b)

(2001). The FDA website further states the DAC Transcript was available no later

than July 13, 2001. (Ex. 1016.) This is confirmed by the Internet Archive:

Wayback Machine (https://archive.org/web/web.php), which indicates that the

DAC Transcript was publicly accessible on the Internet in July 2001.1 (Ex. 1017.)

The DAC Transcript qualifies as a printed publication under the

Klopfenstein test. The DAC Transcript was posted online on the FDA’s website,

the FDA website was well known to those interested in the art (pharmacists with

an understanding of the FDA’s drug approval process), a POSA exercising

reasonable diligence would have found the DAC Transcript on the website, and the

document could have been printed (or copied) from the website without restriction.

The DAC Transcript thus is similar to the Kantor reference in EMC, which was

found to be prior art because “the reference was posted on a publicly accessible

site well known to those interested in the art – the electronic Bulletin Board

Systems – and could be downloaded and retrieved from that site.” IPR2013-00084,

Paper 14, at pp. 20-21 (citing In re Wyer, 655 F.2d 221, 226 (CCPA 1981)

(holding that an electronic publication, including an on-line database or Internet

1 The Board previously has considered information from the Wayback Machine as part of the determination of whether to institute inter partes review. See Veeam Software Corp. v. Symantec Corp., IPR2013-00142, Paper 11, at pp. 9-10. (P.T.A.B. Aug. 7, 2013

26

publication, is considered to be a “printed publication” upon a satisfactory showing

of public accessibility to persons of ordinary skill in the art even without evidence

concerning actual viewing or dissemination of the reference.) The DAC Transcript

thus qualifies as § 102(b) prior art.

Likewise, the CSR qualifies as a publicly accessible prior art printed

publication. Orphan Medical submitted the CSR, along with other supporting

documents, as background materials to the FDA before the Advisory Committee

met on June 6, 2001. (Ex.1005.) As the quote above explains, “[b]ackground

material from the sponsor and FDA [was] posted 24 hours before the meeting at

the Peripheral and Central Nervous System Drugs Advisory Committee docket site

at http://www.fda.gov/ohrms/dockets/ac/ acmenu.htm.” (Ex. 1015.) Thus, the CSR

was publicly accessible on the Internet no later than June 5, 2001. Moreover, the

CSR contains redactions of the name of the proposed specialty pharmacy for

distribution of Xyrem®. This is further evidence that the unredacted portion of the

CSR was available to the public. Additional evidence of public accessibility of the

CSR comes from the Internet Archive: Wayback Machine (https://archive.org/web/

web.php), which shows the CSR was publicly available as of July 1, 2001. (Ex.

1017.)

As with the DAC Transcript, the CSR was posted online on the FDA’s

website, the FDA website was well known to those interested in the art, a POSA

27

exercising reasonable diligence would have found the CSR on the website, and the

document could have been be printed (or copied) from the website without

restriction. The CSR thus qualifies as § 102(b) prior art.

Ground 1: Claims 1-6, 9 and 12-14 are obvious over Lilly in view B.of the DAC Transcript and Camarda.

Claims 1-6, 9 and 12-14 were obvious over Lilly in view of the DAC

Transcript and Camarda. (Ex. 1006 at ¶¶ 102-204.) 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 Xyrem® and thus improve the healthcare

system while reducing healthcare costs. (Id. at ¶¶ 102-114.) It was well-known to a

POSA that it was desirable to “reduce spiraling costs structures, mitigate health

risks, provide more efficient billing, eliminate redundancy, and improve

informational flow.” (Ex. 1002, ¶ 0009 (emphasis added).) “It would be desirable

to provide a healthcare utility that can assist substantially in reducing these

misused and abused prescriptions.” (Id. at ¶ 0012 (emphasis added); see id. at ¶¶

0003-0005, 0035.)

In Lilly, the disclosed “[p]harmaceutical information control organization []

provides the pharmaceutical industry with a vehicle to help them track and access

appropriate information about prescriptive drugs” by maintaining prescription

information in a central database. (Id. at ¶ 0055.) This allows pharmacies to “check

28

to personally verify the drug usage of each purchaser to immediately detect

problems related to abuse, fraud, and misuse of medications.” (Id. at ¶ 0057; see

also id. at ¶¶ 0051-0054, 0056.)

Similarly, the Xyrem® Success Program disclosed in the DAC Transcript “is

a comprehensive program which is designed to responsibly distribute this

important medication in order that patients who need it have it available, and it is

inaccessible for those who might abuse it. (Ex. 1003, p. 185:9-14;) (emphasis

added). The DAC Transcript teaches a closed loop distribution system having a

central repository [or database] of prescription information that identifies potential

patterns of abuse such as duplicate prescriptions, over-prescribing or patient over-

use. (Id. at pp. 177:24-178:11, 184:24-185:4.) This helps prevent abuse by

providing the information necessary for pharmacist intervention before filling a

Xyrem® prescription. (Id. at p. 185:4-7.)

Camarda likewise discloses a computerized system to improve patient health

care by disclosing a system for improving patient compliance with prescriptions.

(Ex. 1004 at col. 2:55-67; Fig. 2.) The system allows pharmacists and physicians to

monitor patients most likely to have poor compliance and provide intervention

(including educational materials) to improve that compliance. (Id. at col. 5:34-37

and 9:60-67.) This includes intervention for patients may be guilty of abuse of the

prescription. A POSA would look to modify Lilly with the teachings of the DAC

29

Transcript and Camarda to reduce abuse, improve efficiency and achieve the

results desired in Lilly. (Ex. 1006 at ¶¶ 102-114.) A POSA also would know those

teachings could be readily combined using known and predictable methods with no

unexpected results.

The Combination of Lilly, the DAC Transcript and 1.Camarda Discloses All of the Elements of claims 1-6, 9 and 12-14 of the ’059 Patent

Claim 1 a)

The combination of the Lilly and the DAC Transcript discloses the

“computerized method of distributing a prescription drug under exclusive control

of an exclusive central pharmacy” claimed in claim 1 of the ’059 Patent. (Ex. 1001,

col. 8:37-39.) A POSA would understand that Lilly teaches a computerized method

of managing prescription drug information in a centralized database to minimize

abuse of drug products, and the DAC Transcript teaches distributing prescription

drug products using an exclusive central pharmacy, again to minimize the

possibility of abuse. (Ex. 1006 at ¶ 109.)

Lilly discloses a computerized method utilizing a “pharmaceutical

information control organization” to gather prescription drug information so it can

be used to “detect problems related to abuse, fraud, and misuse of medications.”

(Ex.1002, Abstract, ¶ 0037, ¶ 0051, ¶ 0057.) The information maintained by

pharmaceutical information control organization may be “selectively retrieved

30

through a secure computer connection by entities such as hospitals, doctors,

pharmacies, insurance companies, government agencies and the like” (Id. at

Abstract, ¶¶ 0038-0039.) Lilly teaches the pharmaceutical information control

organization can be implemented “as an independent information utility that acts as

the central service center for the management of prescriptive medication drugs.”

(Id. at ¶ 0051.) This central service center can use a “composite data storage” or

centralized database. (Id. at ¶ 0061.)

Further, the DAC Transcript describes a closed loop pharmaceutical

distribution system which “consists of a couple of major components. One is that

the product will be made available through a central pharmacy and will be shipped

directly to the patient at home.” (Ex. 1003, Tr. at 15:14-19; see also Ex. 1006 at

¶ 113.) This closed loop systems likewise identifies potential patterns of abuse

such as duplicate prescriptions, over-prescribing or patient over-use. (Id. at pp.

184:24-185:4; see also id. at pp. 177:24-178:11.)

(1) The “receiving in a computer processor all prescription requests . . .” element is met.

The combination of Lilly and the DAC Transcript discloses the “receiving in

a computer processor all prescription requests” element of claim 1. (Ex. 1006 at ¶¶

115-127.) Lilly teaches a computer processor that receives prescription requests

when it describes sending data “either to or from the computer system of

pharmaceutical information control organization, and chang[ing] the format of the

31

data as needed between that used by the computer software of pharmaceutical

information control organization (central organization) and the user software.”

(Ex. 1002 at ¶ 0067(emphasis added).)

The DAC Transcript similarly teaches a computer receiving “all”

prescription requests for “all” patients: “Once the physician decides to prescribe

Xyrem the physician faxes this special prescription to the specialty pharmacy.”

(Ex. 1003 at p. 180:14-16; see also p. 391.) The prescriptions are received from

doctors allowed to prescribe the drug. (Id. at p. 181:1-14.) All prescription requests

are maintained at the “exclusive central pharmacy:” “[D]istribution of Xyrem

would best be accomplished in a closed distribution system…the benefits of this

program are that not only is the product distributed from a central location, but all

the controls and all the records are in one place. (Ex. 1003 at pp. 177:24-178:11)

(emphasis added). The DAC transcript also teaches that the requests come from

“any and all medical doctors allowed to prescribe the drug” as claimed: “All

patients and physicians will be entered into a registry.” (Id. at p. 16:4-5)(emphasis

added).

Further, both Lilly and the DAC Transcript teach that the prescription

requests include information identifying the patient, prescription drug and medical

doctor credentials, as recited in this element. Lilly discloses that “[v]arious types of

data may be stored and/or obtained such as the doctor name, the doctor DEA

32

number, patient name, patient ID (e.g. SS#, passport #, driver's license, etc.),

patient address, city, state, zip, patient phone number, drugs prescribed, dosage,

frequency, start/end date, duration, quantity, number refills, whether substitution is

allowed, generic allowed, notes, aberrant use flag, date prescription filed, place

prescription filled, pharmacist name, pharmacist phone number, pharmacist DEA

number, and application programming interfaces utilized” (Ex. 1002 at ¶ 0068.)

The DAC Transcript discloses that the doctors provide prescription requests

using kits that “contain a number of unique prescribing forms for Xyrem which

will be necessary in order for the prescription to be filled.” (Ex. 1003 at p. 180:6-

24.) The DAC Transcript further discloses that the credentials of the doctor are

provided with the prescription, and the DEA’s National Technical Information

Services database is used to ensure that each physician has an active valid medical

license, and to ensure the physician has current prescribing privileges to prescribe

Schedule III medications (such as Xyrem®). (Id. at p. 181:4-14.) The references

teach all limitations of this element.

(2) The “requiring entering of the information into an exclusive computer database . . . “ element is met.

The combination of the Lilly and the DAC Transcript discloses each of the

limitations of the “requiring entering of the information into an exclusive computer

database” element of claim 1. (Ex. 1006 at ¶¶ 115, 128-136.) Specifically, a POSA

would look at the teachings of Lilly and the DAC Transcript and be directed to a

33

distribution system that requires 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.

For example, Lilly teaches the pharmaceutical information control

organization can be implemented “as an independent information utility that acts as

the central service center for the management of prescriptive medication drugs.”

(Id. at ¶ 0051.) This central service center can use a “composite data storage” or

centralized database. (Id. at ¶ 0061.) Various types of information about a patient

or prescribing physician are stored in the pharmaceutical information control

organization. (Id. at ¶ 0068.) The stored information can be analyzed to evaluate

potential abuse situations for a drug. (Ex.1002, Abstract, ¶ 0037, ¶ 0051, ¶ 0057.)

The DAC Transcript discloses that the Xyrem® distribution system will be

set up such that the product is manufactured in a single manufacturing facility, the

product is sent to a single national specialty pharmacy, and all controls and records

are maintained in one place. (Ex. 1003 at p. 177:24-178:1.) “Once the physician

decides to prescribe Xyrem the physician faxes this special prescription to the

specialty pharmacy.” (Id. at p. 180:14-16). The relevant information about the

patient and physician associated with the prescription request is entered into a

34

central registry (or database). (Id. at p. 15:14-16:5.) If the patient and physician are

cleared, the Xyrem is “made available through [the] central pharmacy and will be

shipped directly to the patient at home.” (Id. at p. 15:17-19.) “The benefits of this

program are that not only is the product distributed from a central location, but all

the controls and all the records are in one place. (Id. at pp. 177:24-178:11

(emphasis added).)

(3) The “checking with the computer processor the credentials of the any and all doctors” element is met.

The DAC Transcript discloses the element “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” of claim 1. (Ex. 1006 at ¶¶ 115, 137-

140.) For example, the DAC Transcript discloses a system that when “the

prescription comes to the specialty pharmacy there will be a number of checks to

determine if the physician is, in fact, eligible to prescribe Xyrem.” (Ex. 1003 at p.

181:1-4)(emphasis added.) “We will be utilizing the DEA’s NTIS or National

Technical Information Services database to ensure that each physician has an

active valid medical license, and also to ensure that the physician has current

prescribing privileges which allow him or her to prescribe Schedule III

medications in this country.” (Id. at p. 181:4-10.) “As a backup check, the specialty

pharmacy will also be checking with the appropriate state medical board to

35

determine that there are no pending actions on the behalf of the state for that given

physician.” (Id. at p. 181:10-14.)

Further, Lilly discloses storing data including the name of a patient’s doctor

in addition to other data about the prescription. (Ex. 1002, Abstract, ¶ 0041, ¶

0068.) Lilly further discloses “searching the stored pharmaceutical computer data

based on … the doctor name.” (Id. at ¶ 0042.) A POSA would understand that the

doctor’s name would be stored and searched to check the credentials of the doctor

to determine eligibility to prescribe the drug product. (Ex. 1006 at ¶¶ 139-140.)

(4) The “confirming with a patient that educational material has been received and/or read prior to shipping the prescription drug” element is met.

The DAC Transcript and Camarda disclose the element “confirming with a

patient that educational material has been received and/or read prior to shipping the

prescription drug” of claim 1. (Ex. 1006 at ¶¶ 115, 141-147.) As part of the

Xyrem® Success Program, a patient receives detailed written educational materials

about the risks and the appropriate use of Xyrem®, as well as a phone call

explaining, among other things, the risks of a drug such as Xyrem®. (Ex. 1006 at ¶¶

68-70; see also Ex. 1003 at pp. 182:3-12, 184:24-185:7.) A patient may be required

to sign an informed consent form or a registry form indicating that the patient

received and/or read these educational materials prior to receiving the first

shipment of the drug. (Ex. 1003 at pp. 371:8-372:15, 374:7-375:23, 376:4-18.)

36

Alternatively, the educational materials can be sent with the first shipment of the

drug product, and the patient may be required to review them prior to getting

additional shipments. (Id. at p. 182:6-12.) The requirement that patients receive

and/or read educational material allows an opportunity for intervention by a

physician or pharmacist if a potential for abuse is detected. (Id. at pp. 15:20-16:3,

18:15-18, 184:24-185:7.)

Camarda teaches that educational materials are provided to patients who are

having trouble with their compliance with prescriptions. (Ex. 1004 at col. 2:55-62,

5:34-37, Figures 1 and 3.) A pharmacist or physician may intervene with a patient

who is believed to have poor compliance with a prescription by providing

educational materials to the patient before providing a refill of a prescription. (Id.

at col. 9:60-67.) In the embodiments of Camarda, there is a disclosure of a method

to confirm the patient receives the educational materials before getting the

prescription drug. For example, a pharmacist may give the educational materials to

the patient before the patient leaves the pharmacy. (Id. at col. 15:64-16:3.) A

physician also may provide intervention (which includes educational materials)

before a patient leaves the physician’s office to go fill a prescription. (Id. at col.

16:9-21.) It would be obvious to a POSA that Camarda teaches the claimed way to

confirm that educational materials have been received and/or read by a patient

prior to shipping a prescription drug to the patient.

37

(5) The art teaches “checking the exclusive computer database for potential abuse of the prescription drug.”

Lilly and the DAC Transcript both disclose the element “checking the

exclusive computer database for potential abuse of the prescription drug.” (Ex.

1006 at ¶¶ 115, 148-151.) Lilly teaches that “[p]harmacies 26 may check to

personally verify the drug usage of each purchaser to immediately detect problems

related to abuse, fraud, and misuse of medications.” (Ex. 1002 at ¶ 0057; see also

id. at ¶ 0051, ¶ 0053-0054.)

The DAC Transcript teaches that “[t]he central data repository designed for

Xyrem really allows for identification of a number of unusual types of behavior,

including any duplicate prescriptions, any attempts of over-prescribing, or any

attempts to over-use by patients. The benefit here is that [] information is available

prior to filling the prescription so appropriate pharmacist intervention can occur.”

(Ex. 1003, Tr. at 184:24-185:7.) Thus this limitation is met.

(6) The “mailing or sending by courier the prescription drug to the patient” element is met.

The DAC Transcript discloses each of the limitations of the element

“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” of claim 1. (Ex. 1006 at ¶¶ 115,

152-156.) The DAC Transcript describes a risk management program with a

38

“major” component being that “the product will be made available through a

central pharmacy and will be shipped directly to the patient at home.” (Ex. 1003 at

p. 15:14-19) (emphasis added). “[Xyrem] is sent to one single national specialty

pharmacy. Eventually, it goes by courier to patients with narcolepsy.” (Id. at p.

178:4-6). A shipment “is sent by a special system that has a special, unique

tracking system called a Rapid Trac System. [T]his system will allow detailed real-

time tracking of that package which is delivered only by the authorized signature.”

(Id. at p. 182:17-22). The drugs are sent only after the system checks for abuse-

indicative activity and clearance is provided. (Id. at 181:1-22.) The system has “a

number of checks to determine if the physician is, in fact, eligible to prescribe

Xyrem.” (Id. at 181:1-14.) The specialty pharmacy also checks for indications of

abuse by the patients, including a call to the physician’s office to make sure the

patient is real and a prescription has been written for the patient. (Id. at p. 181:16-

22.) A POSA would understand that checking for abuse would obviously occur

before the drug is sent to the patient, as this sequence of events is how the check

would prevent abuse by the patient. Thus, the art teaches and suggests mailing or

sending by courier the prescription drug only if no potential abuse is found by the

patient to whom the prescription drug is prescribed and the doctor prescribing the

prescription drug. (Ex. 1006 at ¶ 156.)

39

(7) The art teaches “confirming receipt by the patient of the prescription drug.”

The DAC Transcript discloses the element “confirming receipt by the patient

of the prescription drug” from claim 1. (Ex. 1006 at ¶¶ 115, 157-159.) The DAC

Transcript teaches that the system will confirm receipt of the prescription drug by

the patient: “After the Rapid Trac System shows that the package had been

received by the patient, the specialty pharmacist will call the patient within 24

hours not only to confirm receipt of that package . . . .” (Ex. 1003 at p. 184:10-15)

(emphasis added).

(8) The “generating with the computer processor periodic reports” element is met.

The combination of the Lilly and the DAC Transcript discloses the

“requiring entering of the information into an exclusive computer database”

element of claim 1. (Ex. 1006 at ¶¶ 115, 160-165.) A purpose taught by Lilly is

that the system detects and evaluates “problems related to abuse, fraud, and misuse

of medications.” (Ex. 1002 at ¶ 0057.) A POSA would understand that these

problems are the “potential diversion patterns” referenced in claim 1 of the ’059

Patent. (Ex. 1006 at ¶¶ 161-162.) One way Lilly addresses these problems is by

generating reports through the use of the data in the database associated with

Lilly’s pharmaceutical information control organization. “Such

reporting/informational access can include up-to-date patient prescriptive

40

medication information to their primary care physician or pharmacy, comparisons

for potential drug interactions, and/or emergency information access.”

(Ex. 1002 at ¶ 0072) (emphasis added).

Camarda teaches the generation of reports by a computer processor to

monitor for lack of patient compliance with prescriptions. (Ex. 1004 at col. 17:35-

48.) “The reports can, for example, compare the behavior of patients who

participated in the intervention program with those of a control group of non-

participating patients.” (Id. at col. 17:40-42.) In this way, a POSA would use the

report to track lack of patient compliance. A POSA would understand that these

reports generated in Lilly and Camarda can be used to evaluate potential diversion

(i.e. abuse) patterns for prescriptive medications. (Ex. 1006 at ¶¶ 161-165.)

The following claim chart demonstrates how each limitation of claim 1 was

known in the prior art:

Claim Proposed Grounds of Challenge 1. A computerized method of distributing a prescription drug under exclusive control of an exclusive central pharmacy, the method comprising

Lilly discloses a computerized system to assist pharmacies to distribute prescription drugs to patients. “The information [patient’s prescription drug use] may be selectively retrieved through a secure computer connection by entities such as hospitals, doctors, pharmacies, insurance companies, government agencies and the like.” (Ex. 1002 at Abstract.)

Lilly teaches a computer processor when it describes that, “the various programs discussed above and/or others may be used to select specific types of data for transfer as indicated at information access filter, and to send data either to or from the computer system of pharmaceutical

41

Claim Proposed Grounds of Challenge information control organization, and change the format of the data as needed between that used by the computer software of pharmaceutical information control organization (central organization) and the user software” (Ex. 1002 at ¶ 0067 (emphasis added); see also id. at Figure 1.)

Lilly teaches that “Pharmaceutical information control organization 21 may be implemented as an independent information utility that acts as the central service center for the management of prescriptive medication drugs.” (Id. at ¶ 0051; see also id. at ¶ 0039.)

The DAC Transcript describes the risk management program which “consists of a couple of major components. One is that the product will be made available through a central pharmacy and will be shipped directly to the patient at home.” (Ex. 1003 at p. 15:14-19.)

The DAC Transcripts states, “[Xyrem] is sent to one single national specialty pharmacy.” (Ex. 1003 at p. 178:4-5.)

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,

Lilly teaches a computer processor when it describes that, “the various programs discussed above and/or others may be used to select specific types of data for transfer as indicated at information access filter, and to send data either to or from the computer system of pharmaceutical information control organization, and change the format of the data as needed between that used by the computer software of pharmaceutical information control organization (central organization) and the user software” (Ex. 1002 at ¶ 0067 (emphasis added); see also id. at Figure 1.)

Lilly teaches that “Pharmaceutical information control organization 21 may be implemented as an independent information utility that acts as the central service center for the management of prescriptive medication drugs.”

42

Claim Proposed Grounds of Challenge the prescription drug, and various credentials of the any and all medical doctors;

(Id. at ¶ 0051.)

Further, Lilly teaches, “various types of data may be stored and/or obtained such as the doctor name, the doctor DEA number, patient name, patient ID (e.g. SS#, passport #, driver's license, etc.), patient address, city, state, zip, patient phone number, drugs prescribed, dosage, frequency, start/end date, duration, quantity, number refills, whether substitution is allowed, generic allowed, notes, aberrant use flag, date prescription filed, place prescription filled, pharmacist name, pharmacist phone number, pharmacist DEA number, and application programming interfaces utilized” (Id. at ¶ 0068 (emphasis added).)

The DAC Transcript describes the risk management program which “consists of a couple of major components. One is that the product will be made available through a central pharmacy and will be shipped directly to the patient at home.” (Ex. 1003 at p. 15:14-19.)

The DAC Transcript states, “Once the physician decides to prescribe Xyrem the physician faxes this special prescription to the specialty pharmacy.” (Id. at p. 180:14-16; see also id. at p. 391.)

The DAC Transcript describes “distribution of Xyrem would best be accomplished in a closed distribution system…the benefits of this program are that not only is the product distributed from a central location, but all the controls and all the records are in one place. (Id. at pp. 177:24-178:11 (emphasis added).) “All patients and physicians will be entered into a registry.” (Id. at p. 16:4-5 (emphasis added).)

The DAC Transcript further states that “as the prescription comes to the specialty pharmacy there will be a number of checks to determine if the physician is, in fact, eligible to prescribe Xyrem,” including review of the DEA’s NTIS or National Technical Information Services

43

Claim Proposed Grounds of Challenge database to ensure that each physician has an active valid medical license, and to ensure the physician has current prescribing privileges to prescribe Schedule III medications. (Id. at p. 181:1-14; see also id. at p. 180:6-24.)

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;

Lilly teaches a computer processor when it describes that, “the various programs discussed above and/or others may be used to select specific types of data for transfer as indicated at information access filter, and to send data either to or from the computer system of pharmaceutical information control organization, and change the format of the data as needed between that used by the computer software of pharmaceutical information control organization (central organization) and the user software” (Ex. 1002 at ¶ 0067 (emphasis added); see also id. at Figure 1, ¶ 0037 and ¶ 0051.)

Lilly teaches that “Pharmaceutical information control organization 21 may be implemented as an independent information utility that acts as the central service center for the management of prescriptive medication drugs.” (Id. at ¶ 0051.) This central service center can use a “composite data storage 122 that is external with respect to the databases of the above entities but includes the relevant pharmaceutical data within each of the above entity’s database(s).” (Id. at ¶ 0061.)

Lilly also discloses that “one of the plurality of entities comprises a pharmacy with a pharmacist, such that when the selected prescriptive medication purchaser request 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 selected prescriptive medication purchaser. The method may further comprise the pharmacist accepting or declining to fill the new prescriptive medication based on the medical history.” (Id. at ¶ 0039.)

44

Claim Proposed Grounds of Challenge The DAC Transcript states, “Once the physician decides to prescribe Xyrem the physician faxes this special prescription to the specialty pharmacy.” (Ex. 10003 at p. 180:14-16.)

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;

Lilly teaches “various types of data may be stored and/or obtained such as the doctor name, the doctor DEA number, patient name, patient ID (e.g. SS#, passport #, driver's license, etc.), patient address, city, state, zip, patient phone number, drugs prescribed, dosage, frequency, start/end date, duration, quantity, number refills, whether substitution is allowed, generic allowed, notes, aberrant use flag, date prescription filed, place prescription filled, pharmacist name, pharmacist phone number, pharmacist DEA number, and application programming interfaces utilized” (Id. at ¶ 0068 (emphasis added).)

The DAC Transcript further states that “as the prescription comes to the specialty pharmacy there will be a number of checks to determine if the physician is, in fact, eligible to prescribe Xyrem,” including review of the DEA’s NTIS or National Technical Information Services database to ensure that each physician has an active valid medical license, and to ensure the physician has current prescribing privileges to prescribe Schedule III medications. (Id. at p. 181:1-14; see also id. at p. 180:6-24.)

confirming with a patient that educational material has been received and/or read prior to shipping the prescription drug;

The DAC Transcript teaches that “each patient, when they get their first prescription of Xyrem will receive multi-faceted education program called the Xyrem patient Success Program.” (Ex. 1003 at p. 182:5-8.) Moreover, the slides presented in the DAC Transcript disclose that the patients are explained the contents of the shipment, which includes the educational material, before shipment. (Id. at p. 394.)

The DAC Transcript also teaches that “[p]hysicians and patients will also receive detailed materials about the

45

Claim Proposed Grounds of Challenge risks and the appropriate use of the drug after the first prescription is filled. Actually they will receive those materials initially and all subsequent refills of prescriptions will be contingent upon patients and physicians documenting that they have read these materials, and they understand the risks and how to take the drug appropriately” at (Id. at pp. 15:20-16:3).

The DAC Transcript teaches, “the benefit here is that [] information is available prior to filling the prescription so appropriate pharmacist intervention can occur.” (Id. at p. 185:4-7) “[T]he plan calls for such a form to be submitted after the first prescription is filled, that they have read materials, they have received them and they have read them.” (Id. at pp. 374:14-17).

Camarda teaches that “one aspect of the invention is directed to predicting which patients are most likely to fail to comply with their prescription, so that intervention can be directed at these patients that are at high risk of non-compliance at the time the prescription is given. The intervention may be in the form of educational information, reminders, etc.” (Ex. 1004 at col. 2:55-62.)

Camarda further teaches “[t]he intervention information may be educational, e.g., warning of the consequences of not strictly following the prescription, and/or a notice that the medication needs to be taken or the prescription refilled.” (Id. at col. 5:34-37.)

Camarda further teaches “[v]arious interventions are proposed for the patient population in step 35. These may take the form of various letters worded in various different ways, e-mail or phone calls. They may encourage the taking of the medication as a means to achieve better health, warn of the dangers of not taking it, or merely provide general educational information. The intervention may occur at various times, e.g., before the refill is due or after.” (Id. at col. 9:60-67.)

46

Claim Proposed Grounds of Challenge checking the exclusive computer database for potential abuse of the prescription drug;

Lilly teaches that “[p]harmacies 26 may check to personally verify the drug usage of each purchaser to immediately detect problems related to abuse, fraud, and misuse of medications.” (Ex. 1002 at ¶ 0057.)

Lilly further discloses, “It would be desirable to provide a healthcare utility that can assist substantially in reducing these misused and abused prescription.” (Ex. 1002 at ¶ 0012).

The DAC Transcript states, “The central data repository designed for Xyrem really allows for identification of a number of unusual types of behavior, including any duplicate prescriptions, any attempts of over-prescribing, or any attempts to over-use by patients. The benefit here is that [] information is available prior to filling the prescription so appropriate pharmacist intervention can occur.” (Ex. 1003 at pp. 184:24-185:7.)

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;

Lilly discloses, “It would be desirable to provide a healthcare utility that can assist substantially in reducing these misused and abused prescription.” (Ex. 1002 at ¶ 0012).

Lilly also discloses that “the method may further comprise the pharmacist accepting or declining to fill the new prescriptive medication based on the medication history.” (Id. at ¶ 0039.)

Lilly further discloses that “[p]harmacies 26 may check to personally verify the drug usage of each purchaser to immediately detect problems related to abuse, fraud, and misuse of medications.” (Ex. 1002 at ¶ 0057.)

The DAC Transcript describes the risk management program which “consists of a couple of major components. One is that the product will be made available through a central pharmacy and will be shipped directly to the patient at home.” (Ex. 1003 at p. 15:14-19.)

47

Claim Proposed Grounds of Challenge The DAC Transcripts states, “[Xyrem] is sent to one single national specialty pharmacy. Eventually, it goes by courier to patients with narcolepsy.” (Id. at p. 178:4-6; see also id. at pp. 182:17-22.)

confirming receipt by the patient of the prescription drug; and

“After the Rapid Trac System shows that the package has been received by the patient, the specialty pharmacist will call the patient within 24 hours not only to confirm receipt of that package but also to again reiterate certain important points with the patient.” (Ex. 1003 at p. 184:10-15 (emphasis added).)

generating with the computer processor periodic reports via the exclusive computer database to evaluate potential diversion patterns.

Lilly teaches that “[p]harmacies 26 may check to personally verify the drug usage of each purchaser to immediately detect problems related to abuse, fraud, and misuse of medications.” (Ex. 1002 at ¶ 0057.)

Lilly further teaches, “Pharmaceutical information control organization [ ] will provide appropriate levels of reporting, as desired, to any selected oversight body or committee, as well as other healthcare members as appropriate and necessary. Such reporting/informational access can include up-to-date patient prescriptive medication information to their primary care physician or pharmacy, comparisons for potential drug interactions, and/or emergency information access.” (Id. at ¶ 0072.)

Camarda teaches, “The system can provide reports to the pharmacy on the scores of each patient, together with other information gathered from the patient data. This information can be in the form of written reports, generated on printer 28 or displays on display 27, or one or more of the terminals 21. The reports can, for example, compare the behavior of patients who participated in the intervention program with those of a control group of non-participating patients. Comparisons are made between the two groups over a defined period of time with regard to prescription units sold, prescription refill pick-up percentage, days of medication purchased, and

48

Claim Proposed Grounds of Challenge persistence percentage over a defined period of time. Thus, the reports can indicate the effectiveness of the intervention program.” (Ex. 1004 at col. 17:35-47.)

Claim 2 b)

Claims 2 depends from claim 1. Claim 2 recites that “the exclusive central

pharmacy controls the exclusive computer database.” (Ex. 1001, col. 9:4-5.) Lilly

similarly teaches “a secure, private, independent, network-based, centralized

method operable for tracking and managing prescriptive medication information in

aggregate is provided which allows electronic querying and real-time notification

of patients' prescriptive medication history at the time of prescriptive medication

creation. . . . . [T]his information is accessible within a controlled and appropriate

context for use by healthcare professionals involved in the delivery of care to that

patient.” (Ex. 1002 at ¶ 0050)(emphasis added). The DAC Transcript also teaches,

“The benefits of this program are that not only is the product distributed from a

central location, but all the controls and all the records are in one place.” (Ex. 1003

at p. 178:8-11) (emphasis added). It would have been obvious to a POSA to have

the central pharmacy control the database, otherwise the purpose of a central

pharmacy—controlling the collection and analysis of information that may indicate

abuse—would be undermined. (Ex. 1006 at ¶¶ 167-171.) The following claim chart

demonstrates how each limitation of claim 2 was known in the prior art:

49

Claim Proposed Grounds of Challenge 2. The method of claim 1, wherein the exclusive central pharmacy controls the exclusive computer database.

Lilly discloses, “[A] secure, private, independent, network-based, centralized method operable for tracking and managing prescriptive medication information in aggregate is provided which allows electronic querying and real-time notification of patients’ prescriptive medication history at the time of prescriptive medication creation. According to the method of the invention, this information is accessible within a controlled and appropriate context for use by healthcare professionals involved in the delivery of care to that patient.” (Ex. 1002 at ¶ 0050.) The DAC Transcript discloses, “The benefits of this program are that not only is the product distributed from a central location, but all the controls and all the records are in one place.” (Ex. 1003 at p. 178:8-11 (emphasis added).)

Claim 3 c)

Claims 3 depends from claim 1. Claim 3 recites selectively blocking

shipment of the prescription drug to a patient. (Ex. 1001, col. 9:6-7.) As in claim 3,

the DAC Transcript describes intervening in the shipment of a prescribed drug to

the patient. (Ex. 1003, Tr. at 184:24 – 185:7). A POSA would understand that the

intervention would include the blocking shipment to a patient, as that would be a

known and readily understood mechanism for intervening to reduce abuse by

patients. (Ex. 1006 at ¶¶ 172-176.) The following claim chart demonstrates how

each limitation of claim 3 was known in the prior art:

Claim Proposed Grounds of Challenge 3. The method of The DAC Transcript states, “The central data repository

50

Claim Proposed Grounds of Challenge claim 1, comprising selectively blocking shipment of the prescription drug to a patient.

designed for Xyrem really allows for identification of a number of unusual types of behavior, including any duplicate prescriptions, any attempts of over-prescribing, or any attempts at over-use by patients. The benefit here is that [ ] information is available to filling the prescription so appropriate pharmacist intervention can occur.” (Ex. 1003 at pp. 184:24-185:7 (emphasis added).)

Claim 4 d)

Claims 4 depends from claim 1. Claim 4 recites “wherein an abuse pattern is

associated with a patient, and shipment is blocked upon such association.” (Ex.

1001, col. 9:8-10). The DAC Transcript teaches that the “central data repository

designed for Xyrem really allows for identification of a number of unusual types of

behavior, including any duplicate prescriptions, any attempts of over-prescribing,

or any attempts at over-use by patients. The benefit here is that [ ] information is

available to filling the prescription so appropriate pharmacist intervention can

occur.” (Ex. 1003, Tr. at 184:24-185:7) (emphasis added). This is further supported

by the declaration of Dr. Fudin. (Ex. 1006 at ¶¶ 177-181.)

The following claim chart demonstrates how each limitation of claim 4 was

known in the prior art:

Claim Proposed Grounds of Challenge 4. The method of claim 1, wherein an abuse pattern is associated with a

Lilly teaches, “The present invention removes many of the management limitations that affect such efficiencies and will help control costs of program delivery. All of these entities can have immediate access to potential medication abuse by

51

Claim Proposed Grounds of Challenge patient, and shipment is blocked upon such association.

identification of needless prescription duplications, potential drug interactions, and multi-source interstate prescriptive medication abuse.” (Ex. 1002 at ¶ 0054; see also id. ¶ 0058.) The DAC Transcript states, “The central data repository designed for Xyrem really allows for identification of a number of unusual types of behavior, including any duplicate prescriptions, any attempts of over-prescribing, or any attempts at over-use by patients. The benefit here is that [ ] information is available to filling the prescription so appropriate pharmacist intervention can occur.” (Ex. 1003 at pp. 184:24-185:7 (emphasis added).)

Claim 5 e)

Claim 5 depends from claim 1. Claim 5 recites, “wherein the prescription

drug comprises gamma hydroxy butyrate (GHB).” (Ex. 1001, col. 9:11-12.) The

inclusion of GHB in a prescription drug distribution system was known. (Ex. 1006

at ¶¶ 182-184.) The specific drug disclosed in the DAC Transcript was directed to

Xyrem®. “[T]oday we will ask you to discuss NDA 21-196…for the use of Xyrem,

gamma hydroxybuturate or better known as GHB, for the treatment of cataplexy

and excessive daytime sleepiness in patients with narcolepsy.” (Ex. 1003, Tr. at

9:12-17). Thus, claim 5 was disclosed in the prior art DAC Transcript reference.

The following claim chart demonstrates how each limitation of claim 5 was

known in the prior art:

Claim Proposed Grounds of Challenge 5. The method of The specific drug disclosed in the DAC Transcript was

52

Claim Proposed Grounds of Challenge claim 1, wherein the prescription drug comprises gamma hydroxy butyrate (GHB).

directed to Xyrem®. “[T]oday we will ask you to discuss NDA 21-196, … for the use of Xyrem, gamma hydroxybuturate or better known as GHB, for the treatment of cataplexy and excessive daytime sleepiness in patients with narcolepsy.” (Ex. 1003 at p. 9:12-17).

Claims 6, 9 and 12-14 f)

Claims 6, 9, 12, 13 and 14 are each independent claims, and they each

contain substantially similar claim language to claim 1. The differences between

the aforementioned claims in relation to claim 1 will be discussed in more detail

below. However, where claim limitations are substantially identical, the analysis

provided above pertaining to claim 1, including the claim chart, should be applied

to each of the other independent claims of the ’059 Patent. (Ex. 1006 at ¶¶ 185-

204.)

Claim 6 is an independent claim with similar limitations to those recited in

claim 1. The differences between claim 6 and claim 1 are: the term “medical

doctors” in “any and all medical doctors allowed to prescribe a prescription drug”

in claim 1 is replaced with “authorized prescribers;” the “exclusive computer

database” is “under exclusive control of the central pharmacy,” instead of

“associated with the exclusive central pharmacy”; and instead of “mailing or

sending by courier the prescription drug,” as in claim 1, claim 6 requires

“providing the prescription drug.” (Ex. 1001 at col. 9:42-46.) These differences do

53

not change how Lilly in view of the DAC Transcript render the claims obvious.

(Ex. 1006 at ¶¶ 185-192.) Indeed, claim 6 is broader than claim 1 in some ways. As

explained above, Lilly in view of the DAC Transcript discloses all of the features

of claim 1. Accordingly, the DAC Transcript also discloses and renders obvious all

steps of claim 6.

The limitations of independent claim 9 are similar to those in claim 6. The

only difference is that claim 9 recites GHB as the prescription drug. (Ex. 1001 at

col. 10:1-34.) As explained above for claim 5, the specific drug disclosed in the

DAC Transcript was directed to Xyrem®. “[T]oday we will ask you to discuss

NDA 21-196…for the use of Xyrem, gamma hydroxybuturate or better known as

GHB, for the treatment of cataplexy and excessive daytime sleepiness in patients

with narcolepsy.” (Ex. 1003 at p. 9:12-17). Thus, Lilly in view of the DAC

Transcript teaches or renders obvious each and every limitation of claim 9. (Ex.

1006 at ¶¶ 185, 193-194.)

The limitations recited in claim 12 are substantially similar to claim 9. The

only difference is that instead of “providing GHB to the patient,” as recited by

claim 9, claim 12 requires “mailing or sending by courier GHB to the patient...”

(Ex. 1001 at col. 11:9-13.) This step was known in the prior art. (Ex. 1006 at ¶¶

185, 195-198.) For example, the DAC Transcript states, “[Xyrem] is sent to one

54

single national specialty pharmacy. Eventually, it goes by courier to patients with

narcolepsy.” (Ex. 1003 at p. 178:4-6.) Thus, claim 12 is obvious.

Claim 13 includes the additional limitation of “manufacturing GHB” and

“providing manufactured GHB only to the exclusive central pharmacy.” (Ex. 1001

at col. 11:23.) The DAC Transcript explicitly discloses that Xyrem®, known to

contain the active pharmaceutical ingredient GHB, is manufactured at one single

manufacturing facility and sent to one single national specialty pharmacy for

distribution. (Ex. 1003 at p. 178:3-8.). Therefore there the limitations of claim 13

are taught by Lilly in view of the DAC Transcript. (Ex. 1006 at ¶¶ 185, 199-201.)

Therefore claim 13 is obvious.

Claim 14 recites similar limitations as claim 6, but it does not require the

step of “generating with the computer processor periodic reports via the exclusive

computer database to evaluate potential diversion patterns.” (Ex. 1001 at col. 12:1-

36.) Thus claim 14 would be obvious over Lilly in view of the DAC Transcript for

the reasons discussed above for narrower claim 6. (Ex. 1006 at ¶¶ 185, 202-204.)

In sum, following the teachings of Lilly in view of the DAC Transcript and

Camarda, a POSA would have combined the disclosed limitations as claimed with

no change to their respective functions. The claimed method steps were discussed

in detail in the prior art and were explicitly described in Lilly in combination with

55

the DAC Transcript. For all of these reasons, claims 1-6, 9 and 12-14 are obvious

over Lilly in view of the DAC Transcript.

Ground 2: Claims 7-8, 10-11 and 15-16 are obvious over Lilly in C.view of the DAC Transcript, Camarda and the CSR.

Dependent claims 7-8, 10-11 and 15-16 of the ’059 Patent add limitations

concerning the dispensation of the prescription drugs. Lilly in combination with

the DAC Transcript, Camarda and the CSR teach these limitations.

There is a motivation to combine Lilly, the DAC Transcript, 1.Camarda and the CSR

As discussed in Section VII.B above, a POSA would have had more than

ample reason to combine Lilly, Camarda and the DAC Transcript. (Ex. 1006 at ¶¶

205-218.) Lilly teaches a prior art computerized system that was used to track

prescription data to prevent misuse and abuse of controlled substances. (Ex. 1002

at Abstract and ¶ 0002.) Camarda in turn teaches a method for encouraging patient

compliance with prescriptions by, in part, allowing for pharmacist intervention

where non-compliance is detected and giving patient’s educational materials as one

aspect of the intervention. (Ex. 1004 at pp. 108-110.)

A POSA would apply the teachings of Lilly and Camarda in the real-world

scenario of prescribing Xyrem® that is addressed in the DAC Transcript in order to

prevent misuse of Xyrem® and making sure the proper patients take it in the proper

way. (Ex. 1006 at ¶¶ 215-216.) Similarly, a POSA would be motivated to combine

56

Lilly, the DAC Transcript and Camarda with the CSR. (Id. at ¶ 217; Ex. 1003 at p.

176:3-6.) Like the DAC Transcript, the CSR is directed to “a concern that

medically prescribed Xyrem® may be diverted for illegal use, or may be consumed

accidentally (e.g., by small children), the sponsor has proposed a risk management

program.” (Ex. 1005 at p. 108, sec. 14.1). As such, a POSA would be motivated to

look to the teachings of the CSR and Camarda to modify the teachings of Lilly,

which shares this concern, as Lilly and Camarda taught a method for implementing

the system disclosed in the DAC Transcript. (Ex. 1006 at ¶ 218.)

The Combination of Lilly, the DAC Transcript, Camarda 2.and the CSR discloses all of the elements of claims 7-8, 10-11 and 15-16

Claims 7, 10 and 15 a)

Each of claims 7, 10, and 15, which depend from independent claims 6, 9

and 14 respectively, require that when “providing the prescription drug to the

patient comprises the central pharmacy authorizing the prescription drug to be

dispensed to the patient by another pharmacy.” (Ex. 1001 at col. 9:52-55, 10:35-38,

12:37-40.) The CSR explicitly discloses “If required by the patient’s insurance

company the product may be shipped…to another pharmacy for pick-up. The

sponsor anticipates [that this will] be an unusual occurrence, and has a mechanism

for verifying the second pharmacy’s ability to protect against diversion of GHB

before shipping the drug there.” (Ex. 1005 at p. 110 (emphasis added).) Thus, the

57

CSR explicitly discloses situations that involve having another pharmacy make

available the medication. (Id.; see also Ex. 1004 at col. 13:48-50.) This option is

readily combinable with the other claimed features by a POSA and would not

create any unexpected results or technological hurdles. (Ex. 1006 at ¶¶ 219-222.)

The following claim chart demonstrates how each limitation of claims 7, 10

and 15 was known in the prior art:

Claim Proposed Grounds of Challenge [7., 10., 15.] The computerized method of [claim 6] [claim 9] [claim 14], wherein providing [the prescription drug] [GHB] to the patient comprises the central pharmacy authorizing the prescription drug to be dispensed to the patient by another pharmacy.

The CSR reference states, “If required by the patient’s insurance company the product may be shipped…to another pharmacy for pick-up. The sponsor anticipates [that this will] be an unusual occurrence, and has a mechanism for verifying the second pharmacy’s ability to protect against diversion of GHB before shipping the drug there.” (Ex. 1005 at p. 110). For claim 10: “[T]oday we will ask you to discuss NDA 21-196,…for the use of Xyrem, gamma hydroxybuturate or better known as GHB, for the treatment of cataplexy and excessive daytime sleepiness in patients with narcolepsy.” (Ex. 1003 at p. 9:12-17).

Claims 8, 11 and 16 b)

Claims 8, 11, and 16 depend from claims 7, 10, and 15, respectively, and

further recite that “the another pharmacy places controls on the distribution of the

prescription drug.” (Ex. 1001 at col. 9:56-67, 10:39-50, 12:41-53.) Claims 8, 11

and 16 identify specific controls that may be put in place.

58

Lilly guides a POSA towards a scenario where controls are placed by

another pharmacy. (Ex. 1006 at ¶ 225.) For example, “[p]harmacists are constantly

challenged to circumvent duplication, abuse, fraud, and misuse of these

medications while providing a cost effective medication delivery system. In the

present health system the wide availability of pharmaceuticals from different

pharmacies raises the risks of negative drug interactions and its associated

destructive medical outcome. Pharmaceutical information control organization [ ]

can flag these issues in real time, thereby completely preventing or at least

minimizing their occurrences. Pharmaceutical information control organization [ ]

reduces or eliminates reliance on poorly trained pharmacy technicians or assistants

in ensuring compliance with the regulatory agency demands in the accurate

delivery of pharmaceuticals.” (Ex. 1002 at ¶ 0057 (emphasis added).)

Further, the CSR teaches that “the product may be shipped…to another

pharmacy for pick-up. The sponsor anticipates [that this will] be an unusual

occurrence, and has a mechanism for verifying the second pharmacy’s ability to

protect against diversion of GHB before shipping the drug there.” (Ex. 1005 at p.

110 (emphasis added).) Therefore, a POSA would have understood Lilly and the

CSR render obvious the elements of claims 8, 11 and 16. (Ex. 1006 at ¶¶ 223-228.)

The following claim chart demonstrates how each limitation of claims 8, 11

and 16 was known in the prior art:

59

Claim Proposed Grounds of Challenge [8., 11., 16.] The computerized method of [claim 8] [claim 11] [claim 16], wherein the another pharmacy places controls on the distribution of [the prescription drug] [GHB], the controls selected from the group consisting of confirming with the patient that the educational material has been received and/or read by the patient, confirming receipt of [the prescription drug] [GHB] by the patient, contacting the patient's insurance company, questioning early refill requests by the patient, flagging repeat instances of lost, stolen, destroyed or spilled prescriptions, flagging that the patient paid cash for [the prescription drug] [GHB], flagging early requests to refill [the prescription drug][GHB], and

“If required by the patient’s insurance company the product may be shipped…to another pharmacy for pick-up. The sponsor anticipates [that this will] be an unusual occurrence, and has a mechanism for verifying the second pharmacy’s ability to protect against diversion of GHB before shipping the drug there. (Ex. 1005 at p. 110). “Pharmacists are constantly challenged to circumvent duplication, abuse, fraud, and misuse of these medications while providing a cost effective medication delivery system. In the present health system the wide availability of pharmaceuticals from different pharmacies raises the risks of negative drug interactions and its associated destructive medical outcome. Pharmaceutical information control organization [ ] can flag these issues in real time, thereby completely preventing or at least minimizing their occurrences. Pharmaceutical information control organization [ ] reduces or eliminates reliance on poorly trained pharmacy technicians or assistants in ensuring compliance with the regulatory agency demands in the accurate delivery of pharmaceuticals.” (Ex. 1002 at ¶ 0057.) Claim 11: The specific drug disclosed in DAC was directed to Xyrem®. “[T]oday we will ask you to discuss NDA 21-196, … for the use of Xyrem, gamma hydroxybuturate or better known as GHB, for the treatment of cataplexy and excessive daytime sleepiness in patients with narcolepsy.” (Ex. 1003 at p. 9:12-17.)

60

Claim Proposed Grounds of Challenge limiting the prescription to a supply of limited duration.

No evidence of secondary considerations rebuts the showing that D.claims 1-16 are obvious

Evidence of secondary considerations should be considered and weighed as

part of the obviousness analysis, if it exists and has a nexus to the patent claims.

Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346, 1358 (Fed. Cir. 2013). Here, there

is no such evidence. (Ex. 1006 at ¶¶ 229-231.) Prior art pharmaceutical distribution

systems, such as Lilly, and patient compliance systems, such as Camarda, were

known to reduce misuse of regulated prescription drugs. (Id. at ¶ 230.) Likewise,

methods of distributing prescription drugs, such as Xyrem®, were known in the

prior art as prone to abuse. (Id.) For instance, the DAC Transcript recorded a

meeting during which a controlled distribution program for Xyrem® was

specifically discussed, and thus there are no unexpected results.

CONCLUSION VIII.

For at least the reason given above, claims 1-16 of the ’059 Patent are

unpatentable because they would have been obvious over the cited prior art.

Respectfully submitted,

Date: April 6, 2015 By: Daniel W. McDonald Daniel W. McDonald, Esq. MERCHANT & GOULD P.C. 3200 IDS Center

61

80 South 8th Street Minneapolis, MN 55402-2215 dmcdonald@merchantgould.com Main Telephone: (612) 332-5300 Main Facsimile: (612) 332-9081 Counsel for Petitioner

CERTIFICATE OF SERVICE ON PATENT OWNER

Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies that on the 6th

day of April, 2015, a complete and entire copy of this Petition for Inter Partes

Review Under 37 C.F.R. §42.100, alongside an accompanying Power of Attorney,

Petitioner’s Exhibit List, and Exhibits 1001-1017, were provided via electronic

mail and UPS, postage prepaid, to the Patent Owner by serving the correspondence

address of record for the ’059 patent.

Attorney of Record Attn: David D’Zurilla Schwegman Lundberg & Woessner 1600 TCF Tower 121 South Eighth Street Minneapolis, MN 55402-2815 Tel: 612-373-6900 Email: ddzurilla@slwip.com

Respectfully submitted, MERCHANT & GOULD P.C.

BY: /Daniel W. McDonald/ Daniel W. McDonald, Reg. No. 32,044

MERCHANT & GOULD P.C. 3200 IDS Center 80 South 8th Street Minneapolis, MN 55402-2215 dmcdonald@merchantgould.com Main Telephone: (612) 332-5300

Main Facsimile: (612) 332-9081