In Par Pharm., Inc., et al. v. Jazz Pharm., Inc., CBM2014-00149, 00140, 00151, and 00153, three generic drug companies challenged four Orange Book listed patents – 7,895,059 (“the ʼ059 patent”), 8,457,988 (“the ʼ988 patent), 7,668,730 (the ʼ730 patent), and 8,589,182 (“the ʼ182 patent”) – in a Covered Business Method (CBM) Review.  These patents are listed in the Orange Book under NDA 021196 for Xyrem®, which contains the API sodium oxybate.

Without reaching the merits of the petitioners’ contentions, the PTAB held that it lacked jurisdiction to hear the challenge because the patents at issue are not business method patents.  As background, a covered business method patent is (under 35 U.S.C. § 321(a)(1)(B)) one 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.”  The PTAB reached its decision by analyzing claim 1 of the ʼ730 patent, which it deemed to be representative of the other claims at issue.

According to the Board, claim 1 is directed to “a computerized method of controlling the distribution of a drug by receiving prescription request containing identifying elements, requiring the information to be entered so that it can be analyzed for abuse situations, checking the credentials of the prescribing physicians, confirming that educational material has been read by the patient, checking for potential abuse, mailing the prescription drug to the patient if no abuse potential is found, confirming receipt by the patient of the prescription drug; and generating periodic reports to evaluation potential drug diversion patterns.”

In the Board’s opinion, claim 1 “as a whole” is directed to a method of controlling access to prescription drugs to guard against abuse potential, rather than to a financial product or service.  Although the claimed steps do involve regulating and controlling the shipping and mailing of prescription drugs, which typically means there was a sale of the drug, such a sale is not a requirement of the claim.  The Board rejected petitioners’ reliance on the written description to provide the necessary financial elements because fulfillment of the definition “is based on what the patent claims.”  Prior decisions that relied on portions of the specification were distinguished based on arguments in those prior cases that the claimed method steps were the same as those disclosed in the specification.

Additionally, while several other challenged claims recited steps of contacting the insurance company and flagging that the patient paid with cash, the PTAB did not view them as business method claims.  This is because these steps, when read in the context of the claim as a whole, are not directed to verification of insurance or payment.  In context, these claim elements do not require payment or insurance verification.