Takeaway: It is the petitioner’s burden to show standing to institute a covered business method patent review, which includes providing a detailed analysis and explanation of how the claim language recites method steps involving the movement of money or extension of credit in exchange for a product or service.

In its Decision, the Board denied institution of covered business method patent review of all of the challenged claims (claims 1-11) of the ’730 Patent, because Petitioner had not demonstrated that the ’730 Patent is a “covered business method patent” pursuant to the statutory definition in § 18(d)(1) of the AIA. Petitioner had challenged claims 1-11 of the ’730 Patent as unpatentable under 35 U.S.C. §§ 101, 102(b), and 103(a).  The ’730 Patent relates to a method for controlling access to sensitive prescription drug prone to potential abuse or diversion, by utilizing a central pharmacy and database to track all prescriptions for the sensitive drug.

The Board began by discussing Section 18 of the AIA. The Board determined that both parties agreed that Petitioner had been sued for infringement of the ’730 Patent, and thus met the first requirement.  Then, the Board discussed the second requirement under Section 18(a)(1)(E) that CBM review is instituted only for a “covered business method patent,” which is “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.”  A patent needs only one claim directed to a covered business method to be eligible for review.

The Board then analyzed the claims, and determined that claim 1 as a whole recites a method for controlling access to a prescription drug to guard against potential abuse and unauthorized diversion. Petitioner argued that the claimed method of distributing a prescription drug “is financial in nature; and it is also incidental and complementary to financial activities,” and emphasized the ’730 Patent’s description of the steps for verifying insurance coverage or a patient’s ability to pay for the prescription.  Petitioner relied on the Declaration testimony of a doctor as evidence that filling a prescription necessarily involves checking a patient’s insurance coverage or ability to pay.  However, the Board was not persuaded because Petitioner failed to explain how the claim language recites method steps involving the movement of money or extension of credit in exchange for a product or service.  For example, the claim language does not require the sale of a prescription drug, processing of payments, benefits, or insurance claims related to the sale, a method of insuring a patient or determining the cost of insurance, a method of determining the cost of prescription benefits, a method facilitating payment of health care benefits, or the extension of credit for the purchase of a prescription drug.  The Board agreed with Patent Owner that the activities recited in the claim language constitutes checks (“checking”) and controls (“confirming”) on “shipping,” “mailing,” or “providing” a prescription drug to an authorized “patient” to prevent “potential abuse” and “evaluate potential diversion patterns.”

The Board acknowledged that in other cases the Board relied on the written description of the respective patents to support the “financial product or service” requirement, but this was done in those cases because the claim limitations recited method steps used in the embodiments described in the relied-upon portions of the specifications. In contrast, Petitioner failed to make a comparable or persuasive argument based on a close analysis of the claim language in view of the embodiments described in the ’730 Patent.  Accordingly, the Board was not persuaded by the argument that written description of method steps for verifying insurance coverage or a patient’s ability to pay are recited or required by the ’730 Patent claims.

The Board was also not persuaded by Petitioner’s argument that the claims are eligible for CBM review because it is “used in commerce.” Contrary to Petitioner’s argument, Congress did not expand CBM review to a business method patent “used in commerce” or covering “core activities” of running a business.

Petitioner also argued that the claims of the ’730 Patent are eligible for CBM review because the patent was classified in Class 705, subclass 2, which includes “billing systems based on entered medical codes.” Petitioner also argued that the Examiner relied on citation of prior art billing systems during examination.  However, the Board determined that absent a more detailed analysis and explanation of how the claim language and prior art recite method steps used in billing systems, mere classification fails to support the inference that the patent claims satisfy the “financial product or service” requirement of AIA § 18(d)(1).  Therefore, for at least the reason provided above, the Board determined that the information presented in the Petition failed to establish that any claim qualified as a covered business method patent under Section 18 of the AIA, and the CBM review was not instituted.

Par Pharmaceutical, Inc., Roxane Laboratories, Inc., and Amneal Pharmaceuticals, LLC v. Jazz Pharmaceuticals, Inc., CBM2014-00149, CBM2014-00150, CBM2014-00151, CBM2014-00153 
Paper 12: Decision Denying Institution of Covered Business Method Patent Review 
Dated: January 13, 2015 
Patent: 7,895,059 B2; 8,457,988 B1; 7,668,730 B2; 8,589,182 B1 
Before: Lora M. Green, Brian P. Murphy, and Jon B. Tornquist 
Written by: Murphy
Related Proceedings: Jazz Pharmaceuticals, Inc. v. Roxane Laboratories, Inc., 2:10-cv-6108 (D.N.J.); Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals, LLC and Par Pharmaceutical, Inc., 2:13-cv-391 (consolidated with 2:13-cv-7884) (D.N.J.); and Jazz Pharmaceuticals, Inc. v. Ranbaxy Laboratories Ltd, et al., 2:14-cv-4467 (D.N.J.); U.S. Appl. No. 14/196,603; U.S. Appl. No. 14/219,904; U.S. Appl. 14/219,941