Fed Circuit Watch: Hyperlinked Material in Federal Register Notice is Prior Art

103 fed circuit watch IPR motivation to combine obviousness POSITA prior art SAS

What constitutes prior art is not as easy as it may seem.  While it may be uncontroverted that a Federal Register notice is prior art, the hyperlinked materials in that notice is what was at issue in Jazz Pharm., Inc. v. Amneal Pharm., Inc.,[1] decided by the Court of Appeals for the Federal Circuit on July 13, 2018.

The facts are as follows.

Source: U.S. Patent No. 7,668,730 B2, Feb. 23, 2010, to Dayton T. Reardan, Patti Engle, and Bob Gagne (JPI Commercial, LLC, Assignee)

Jazz Pharmaceuticals owns U.S. Patent Nos. 7,668,730 (‘730), 7,765,106, 7,765,107, 7,895,059, 8,589,182, 8,457,988 (‘988), and 8,731,963 (‘963).  All of these patents are family members related to drug distribution system for tracking prescriptions of one sensitive drug owned by Jazz.  That drug is marketed as XYREM®, and is used to treat narcolepsy.  However, the active ingredient is gamma-hydroxybutyrate, or GHB, aka the “date-rape” drug.  Because GHB is a Schedule III drug, the FDA approved Xyrem only with restricted distribution regulations under 21 C.F.R. §314.500.  During the regulatory approval process, the FDA held meetings with Jazz to discuss risk management issues surrounding Xyrem.  The meeting was public, and notice made through the Federal Register (66 Fed. Reg. 24,391, May 14, 2001).   Background information was made available through a hyperlink in the notice.  These materials, including meeting minutes, transcripts, and slides, were collectively called Advisory Committee Art (“ACA materials”).  Because the PTAB relied heavily on these ACA materials as prior art for the obviousness determinations in the IPR decisions of the above-referenced patents, the main issue in the case is whether these ACA materials constitute prior art.

Amneal filed seven IPRs involving these patents.  The PTAB instituted review in fewer grounds than were raised in the petitions.  A preliminary jurisdictional issue arose since the PTAB decisions were pre-SAS on whether the Fed Circuit could hear the case on the fewer grounds than were raised in the petitions.

Claim 1 of the ‘730 patent was deemed representative:

  1. A computerized method of distributing a prescription drug under exclusive control of an exclusive central pharmacy, the method comprising:

receiving in a computer processor all prescription requests, for any and all patients being prescribed the prescription drug, only at the exclusive central pharmacy from any and all medical doctors allowed to prescribe the prescription drug, the prescription requests containing information identifying patients, the prescription drug, and various credentials of the any and all medical doctors;

requiring entering of the information into an exclusive central computer database associated with the exclusive central pharmacy for analysis of potential abuse situations, such that all prescriptions for the prescription drug are processed only by the exclusive central pharmacy using only the exclusive computer database;

checking with the computer processor the credentials of the any and all doctors to determine the eligibility of the doctors to prescribe the prescription drug;

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

checking the exclusive computer database for potential abuse of the prescription drug;

mailing the prescription drug to the patient only if no potential abuse is found by the patient to whom the prescription drug is prescribed and the doctor prescribing the prescription drug;

confirming receipt by the patient of the prescription drug; and

generating with the computer processor periodic reports via the exclusive computer database to evaluate potential diversion patterns.[2]

“Exclusive computer database,” “information identifying,” and “periodic reports” were terms at-issue.  The specification describes “exclusive central database” as data relevant to distribution of a sensitive drug, including patient, physician and prescription information.  Several types of information are illustrated in Figure 2.  Although the specification discusses “sample reports” and specific-type reports, like an early refill report, the term “periodic report” does not appear anywhere in the written description.

The PTAB issued six final decisions in the IPRs.  Specifically, the claims were unpatentable as obvious over a combination of the ACA materials and a second reference, Korfhage.  The ACA materials consisted of 1) FDA advisory meeting transcript and slides; 2) FDA’s clinical safety review of XYREM®; 3) XYREM® briefing booklet; and 4) video and transcript on a proposed distribution system for XYREM®.  The ACA materials were publicly accessible on the FDA website, as a hyperlink in the Notice on October 4, 2001, two months before the critical date of December 17, 2001.  Also, the PTAB determined that a POSITA exercising reasonable due diligence would have located the ACA materials because that POSITA would probably have been motivated to seek out information on drug safety, distribution, and abuse prevention.  Therefore, the PTAB held that both publication and access made the ACA materials prior art for purposes of their obviousness determinations.

The Fed Circuit panel, composed of Newman, Lourie, and Reyna, with Judge Lourie writing for the panel, first determined the SAS jurisdiction issue.  In light of the U.S. Supreme Court’s SAS decision, the PTAB must institute IPRs on all claims raised in a petition.[3]  Because the PTAB instituted review on less than all claims in the seven IPR petitions, SAS was implicated.  However, on appeal, no parties requested remand to consider the non-instituted claims.  Further, Judge Lourie noted that in PGS, no party requested further proceedings in post-SAS appeal, and that case was determined to have a final decision with a waiver of partial institution review, similar to this case.[4]  Consequently, the panel held that the Fed Circuit could hear the case and render an opinion without reopening non-instituted claims or grounds.

As to whether the ACA materials constituted prior art, Judge Lourie observed that the purpose of 35 U.S.C. §102(b) (pre-AIA)[5] is to prevent an inventor from withdrawing art that was already in the public domain.[6]  Jazz had argued that the ACA materials were of substantial length, which would mean a POSITA would have difficulty locating the documents when conducting a reasonable online search.  Amneal countered by noting the ACA materials were widely disseminated.

Judge Lourie observed that this is not a case of first impression.  In MIT, the prior art was an orally presented paper attended by no more than 500 at a scientific conference.  The paper was distributed to six people without restrictions who requested a copy.  The paper was prior art because a POSITA was given notice, informed about its contents, and disseminated without restriction to at least six people.[7]  In Klopfenstein, researchers presented slides at two scientific meetings for three days, although the slides were never distributed formally and were never indexed.  The Fed Circuit held that because the slides were widely disseminated, and there was no expectation that the slides would not be copied and it was fairly easy to reproduce, the slides were deemed prior art.[8]  However, in Cordis Corp., a medical resident presented a scientific monograph to several colleagues, and gave copies to six teachers.  However, there was clear evidence in the record that academic norms give rise to an expectation of confidentiality of documentation passed among colleagues.  Because dissemination was limited, and given the academic context and norms, the monograph was deemed not a prior art publication.[9]

Against this continuum of precedence, Judge Lourie compared it to the present case.

[T]he ACA materials were disseminated more broadly and for a longer duration to persons of ordinary skill than the materials disclosed at individual meetings in those cases [i.e., MIT, Klopfenstein].  In addition, unlike Cordis, disclosure through public domain sources such as the Federal Register and a public federal agency website plainly indicates that there was no reasonable expectation that the ACA materials would remain confidential.[10]

Wide dissemination in a public domain registry (e.g., Federal Register) militates towards public accessibility where a POSITA would be motivated to examine those documents.  Further, publication period was long prior to the critical date, making the reference more likely to be a printed publication for purposes under §102(b).  Finally, the ACA materials were distributed on a public domain site where no expectation of confidentiality existed.  As a result, the panel concluded that the ACA materials were effectively, and technically, printed publications for purposes of §102(b) prior art.

On the claim construction issue, there were two terms that were at-issue: “periodic reports,” and “information identifying.”  As to “periodic reports,” Judge Lourie agreed with Amneal that the term covered reports generated at both regular and irregular intervals, and not just limited to regular frequencies, as Jazz argued.  Jazz did not draft its claim to define “periodic,” nor did it define it in the specification.  Because the patent applicant acts as his own lexicographer, he can define terms to his liking in the disclosure (see MPEP 2111.01(IV)).  However, when the applicant fails to do so, the PTAB may give the term their plain and ordinary meaning, unless inconsistent with the specification (see MPEP 2111.01; MPEP 2173).  Here, there was no specific definition of “periodic report,” and as such, the Fed Circuit panel found the PTAB did not err in its claim construction of that term.

As to “information identifying,” Judge Lourie found that the claim language only referred to “prescription requests containing information identifying patients, the prescription drug, and various credentials of the any and all medical doctors.”[11]  There was no specific type of information recited.  As such, the panel also found the PTAB did not err in its claim construction of this term.

On the obviousness issue, Jazz argued that a POSITA would not have been motivated to modify the ACA documents with the distributed system disclosed in Korfhage to support invalidation of claims 2 and 10 of the ‘988 patent and claims 24, 26, and 27 of the ‘963 patent.  In effect, Jazz argued that the PTAB’s ruling in the two cases contradict each other.  However, Judge Lourie was having none of that.  He compared the ‘730/’988 Decision, which was worded as:

One of ordinary skill would have been motivated to modify the [ACA materials’] distribution system to include multiple computers in a distributed database system for reasons of cost, efficiency, and the anticipated volume of prescription-related information to be received, entered, and queried.

with the ‘963 Decision:

[A] ]person of ordinary skill] would have been motivated to distributed the ACA’s single, centralized computer database over multiple computers, for reasons of cost, efficiency, and the anticipated volume of prescription-related information to be received, entered, and queried.

The PTAB’s decisions, in fact, were not only non-contradictory, but both were near-identical when discussing the motivation analysis within an obviousness inquiry.

This was a fascinating case because of the many areas of patent law that it touched.  Judge Lourie’s opinion was also fairly straightforward with his analysis.  The Fed Circuit panel affirmed the PTAB’s decisions with respect to both cases, and it is not certain yet Jazz will file a petition for writ of certiorari given that the issues are fairly settled and the opinion unanimous among the panel.


[1] ___F.3d___ (Fed. Cir. 2018) (slip op.), aff’g Amneal Pharm., LLC v. Jazz Pharm., Inc., No. IPR2015-01903, 2017 WL 1096638 (P.T.A.B. Mar. 22, 2017) (‘963 Decision); Amneal Pharm., LLC, v. Jazz Pharm., Inc., No. IPR2015-00545, 2016 WL 7985452 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., No. IPR2015-00547, 2016 WL 7985454 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., No. IPR2015-00548, 2016 WL 7985430 (P.T.A.B. Dec. 22, 2016); Par Pharm., Inc. v. Jazz Pharm., Inc., No. IPR2015-00551, IPR 2015-00554, 2016 WL 7985458 (P.T.A.B. Jul. 27, 2016) (‘730/’988 Decision).

[2] Id. (slip op. at 4-5).

[3] See SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1353 (2018).

[4] See PGS Geophysical AS v. Iancu, 891 F.3d 1354, 1362-63 (Fed. Cir. 2018).

[5] Pre-AIA rules govern in this case because the filing dates of all seven patents is before March 16, 2013.

[6] See Medtronic, Inc. v. Barry, 891 F.3d 1368, 1380 (Fed. Cir. 2018).

[7] See Mass. Inst. of Tech. v. AB Fortia, 774 F.2d 1104, 1108 (Fed. Cir. 1985).

[8] See In re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004).

[9] See Cordis Corp. v. Boston Scientific Corp., 561 F.3d 1319, 1333 (Fed. Cir. 2009).

[10] Jazz Pharm., supra (slip op. at 16).

[11] Jazz Pharm., supra (slip op. at 24).