[00:00:00] Speaker 04: We have four argued cases this morning. [00:00:02] Speaker 04: The first is number 14-1469, Medicine's Company versus Haspera, Inc. [00:00:09] Speaker 04: Mr. Hawke. [00:00:15] Speaker 01: Good morning, Your Honors. [00:00:18] Speaker 01: I would like to [00:00:23] Speaker 01: start by pointing out that we already had an oral argument on appellants' issues before, and then on remand from the Ambong panel and the direction of this court, we were instructed not to be redundant to anything. [00:00:38] Speaker 01: So in our briefing, the briefing is the same on our appellate issues. [00:00:43] Speaker 01: We did respond to the cross-appellant on the on-sale bar issue, which is different in the briefing. [00:00:48] Speaker 01: But I just wanted to point that out, and so I didn't want to be presumptuous and just re-argue [00:00:52] Speaker 01: what was argued or some of the issues that we addressed. [00:00:56] Speaker 04: You better re-argue anything you want us to think about, because we don't remember. [00:01:00] Speaker 01: Okay. [00:01:01] Speaker 01: Thank you, Your Honor. [00:01:07] Speaker 01: On this appeal, the appellate issue really is a claim construction issue, right? [00:01:12] Speaker 01: The medicines company believes that the district court [00:01:15] Speaker 01: aired in the legal, in the claim construction of both the 727 patent, which is directed to a product only, and the 343 patent, which is directed to a product by process. [00:01:29] Speaker 04: Let me ask you about the 727. [00:01:31] Speaker 04: Correct. [00:01:31] Speaker 04: Because what the district court, of course, said here is that efficient mixing has to be viewed as a claim limitation of the 727 patent. [00:01:41] Speaker 04: You say, no, that's not appropriate. [00:01:43] Speaker 04: I take it that your distinction from the prior art of the 727 is based on the notion that you get consistent batches as a result of following the patent and that that's what distinguishes it from the prior art. [00:02:04] Speaker 04: Is that fair? [00:02:05] Speaker 01: I think that's a fair characterization. [00:02:07] Speaker 01: I think it's consistent. [00:02:09] Speaker 01: I'm not quite sure what your honor might mean by consistent, but [00:02:12] Speaker 01: The claim says that the maximum Asp9 level, which is the impurity, is not above about 0.6. [00:02:22] Speaker 04: That alone would not distinguish it from the prior art, correct? [00:02:26] Speaker 04: No, I don't think that is correct. [00:02:27] Speaker 04: Because there were certainly batches that were below 0.6 in the prior art. [00:02:32] Speaker 04: The question is consistency. [00:02:35] Speaker 01: Yes, but when you are saying prior art, there was no prior art. [00:02:38] Speaker 01: other than what the medicines company was doing in the earlier versions of Andrew Maxx. [00:02:44] Speaker 04: Sure, but that's prior art. [00:02:45] Speaker 04: So you were making batches under 0.6. [00:02:48] Speaker 04: So you can't say that 0.6 is a distinguishing feature, right? [00:02:53] Speaker 01: They were making some batches below 0.6. [00:02:56] Speaker 01: However, you have to go to the claim in the 727 patent. [00:02:59] Speaker 01: The claim says pharmaceutical batches, which is a specifically defined term in the patent that's critical to this case. [00:03:06] Speaker 01: Well, that's why I asked you about the consistency. [00:03:08] Speaker 01: And it's either one single batch, which is representative of all batches. [00:03:12] Speaker 01: So for example, in the ANDA, they have one batch. [00:03:14] Speaker 04: OK, but just to be clear, the fact that there's 0.6 limitation is not enough to distinguish the prior audit, right? [00:03:24] Speaker 01: It would have to be all batches that are made. [00:03:27] Speaker 04: It's the consistency limitation, right? [00:03:29] Speaker 01: Yes, all batches have to be below 0.6, about 0.6. [00:03:34] Speaker ?: OK. [00:03:34] Speaker 04: in addition to the other claim limitations. [00:03:36] Speaker 04: How under the Hospira-Glaxo-Ferrin line of cases is that a limitation in the ANDA? [00:03:46] Speaker 04: And I'm having difficulty seeing how the 727 patent is infringed even under your theory of how it should be construed by the filing of the ANDA. [00:04:01] Speaker 01: The filing of the ANDA here [00:04:02] Speaker 01: There's a specification in that ANDA that embraces, covers the 0.6, up to 0.6. [00:04:10] Speaker 01: The spec actually goes beyond that. [00:04:12] Speaker 01: This now brings us to... That's clear enough. [00:04:14] Speaker 04: I mean, to the extent that there's a 0.6 limitation in there, you're under hospira. [00:04:20] Speaker 04: I mean, that's clear enough. [00:04:22] Speaker 04: I'm not talking about the 0.6 limitation. [00:04:23] Speaker 04: I'm talking about the consistency limitation. [00:04:26] Speaker 04: The consistency limitation, as you interpret it, [00:04:32] Speaker 04: is not part of the ANDA. [00:04:35] Speaker 01: Well, I would disagree. [00:04:37] Speaker 01: They have only one exhibit batch. [00:04:39] Speaker 01: They only made one batch. [00:04:40] Speaker 01: And they set forth how they made the batch. [00:04:42] Speaker 01: They have a compounding process that they use. [00:04:45] Speaker 01: And it resulted in an asinine level well below 0.6. [00:04:50] Speaker 01: And I think they represent it to the FDA. [00:04:54] Speaker 04: That's not my question. [00:04:55] Speaker 04: My question is, where in the ANDA is the consistency limitation? [00:05:00] Speaker 01: It is in the end where they are telling the FDA what their manufacturing process will be and you have to assume, I think the FDA assumes that they will use the manufacturing process they represent, they did use to make the exhibit batch and that they will continue to use it. [00:05:17] Speaker 03: Sorry, you're going to have to compare with me. [00:05:19] Speaker 03: I had oral surgery. [00:05:22] Speaker 03: There's nothing in the ANDAs that suggests that that process will always result in the 0.6 or below. [00:05:29] Speaker 03: It happens to be for the batch they produced to the FDA, but it did. [00:05:34] Speaker 03: And I thought the whole point of your patent is that the prior ART methods resulted in bad batches sometimes. [00:05:43] Speaker 03: So I don't see anything in the ANDA itself that says our process will always result in a 0.6 or below. [00:05:52] Speaker 01: They don't use those words, of course. [00:05:54] Speaker 01: That would be irrelevant to the ANDA from that standpoint. [00:05:57] Speaker 01: But the process that Cospera uses, and that was at trial, and there were fact findings by Judge Andrews that it was efficient mixing. [00:06:06] Speaker 01: And that's why, but for the other limitations that the court also put into efficient mixing. [00:06:13] Speaker 04: But you're saying that's not a claim limitation in the 727. [00:06:15] Speaker 01: Well, I think the district court thinks it is. [00:06:19] Speaker 01: The district court said [00:06:21] Speaker 04: The district court did, but the questions are directed to where we go under your theory of how the 727 should be construed. [00:06:29] Speaker 01: Haspera uses, first of all, Haspera made one batch and it is representative of all batches. [00:06:35] Speaker 01: Therefore, they satisfy the claim limitation for a pharmaceutical batch. [00:06:38] Speaker 01: The Asp9 level is below 0.6. [00:06:41] Speaker 01: They satisfy that. [00:06:42] Speaker 01: It was adjusted by a base. [00:06:44] Speaker 01: The pH was adjusted by a base. [00:06:47] Speaker 01: They satisfy that limitation. [00:06:49] Speaker 01: And they also measure the astenine level by HPLC. [00:06:52] Speaker 01: So they measure, they meet all the limitations of claim one. [00:06:56] Speaker 02: Tell me where Jaspierre's mixing doesn't share the characteristics of example four. [00:07:08] Speaker 01: As was found by the court, they did not have rapid mixing. [00:07:12] Speaker 01: In other words, in example four, they had rapidly mixed, they added [00:07:18] Speaker 01: the pH adjusting solution rapidly. [00:07:20] Speaker 01: Hespera did not do that. [00:07:22] Speaker 01: And in fact, the court made fact-finding saying that's how he distinguished, how the court distinguished what they were doing from... Inefficient mixing. [00:07:32] Speaker 01: Well, actually, let me rephrase that. [00:07:35] Speaker 01: Hespera didn't follow example four exactly, but it did follow example four so far as the court found it to be inefficient mixing, right? [00:07:42] Speaker 01: Inefficient mixing because they did certain of the steps too quickly. [00:07:47] Speaker 01: basically what the court found. [00:07:48] Speaker 01: And therefore made those fact findings and because there was a limitation in the claim requiring efficient mixing, the court found no infringement. [00:07:56] Speaker 01: And our position here is there should not have been that requirement in claim one of the 727 requiring efficient mixing. [00:08:04] Speaker 01: That's example five. [00:08:05] Speaker 01: It's an embodiment [00:08:06] Speaker 01: But in addition, the court went further and said what efficient mixing had to be, and took out part of example five. [00:08:13] Speaker 01: Took out the high shear mixing, for example, and slow and controlled addition, which is in example five. [00:08:20] Speaker 01: That's an embodiment of what efficient mixing is. [00:08:22] Speaker 01: It's not, according to this invention, the only way you can efficiently mix. [00:08:27] Speaker 01: In any event, the court below found that what Haspera did was close enough to example four that it was inefficient and therefore not infringing. [00:08:36] Speaker 01: And hence, the appeal here in that one, we think it was legal error to put that limitation into the claim one of the 727. [00:08:44] Speaker 01: It was also legal error to put into claim one of the 343 patent, which does use the phrase efficiently mixing, and to make that even narrower by putting in high shear mixing and an RPM of about 1,000. [00:08:58] Speaker 04: What do you think the construction of efficient mixing ought to be? [00:09:00] Speaker 04: Minimizing impurities? [00:09:03] Speaker 04: Yes, in addition to- Why wouldn't that be indefinite? [00:09:08] Speaker 01: Because I think a person with a skill in the art on the Nautilus case and other cases would clearly see the scope of the claim here. [00:09:15] Speaker 02: As I just went through- You want to apply the New Jersey courts? [00:09:19] Speaker 01: Well, the New Jersey court did not incorporate that limitation. [00:09:23] Speaker 01: Neither did the Chicago court, Judge St. [00:09:25] Speaker 01: Eve, which you're going to hear about in a little while. [00:09:28] Speaker 01: That judge didn't put in that limitation into the 727 patent. [00:09:32] Speaker 01: either and did find infringement. [00:09:34] Speaker 01: But that's the next appeal. [00:09:36] Speaker 02: Let me just say this. [00:09:37] Speaker 02: I'm going to say this to both of you. [00:09:39] Speaker 02: But when I read Hespera's red brief, they say because a PASIDA couldn't determine with reasonable certainty on an ongoing commercial basis the 0.6 ASP, the claims are indefinite. [00:09:58] Speaker 02: My immediate marginal note on that was that it was like Schrodinger's cat, and that we were shifting over to quantum physics. [00:10:11] Speaker 02: But as soon as it happened, you knew what it was. [00:10:14] Speaker 02: And I just found that problematic, and I want you to discuss it a little bit. [00:10:18] Speaker 01: Certainly. [00:10:19] Speaker 01: I think maybe there's some confusion here, as I understand the Jaspiro argument. [00:10:24] Speaker 01: They're saying, because we can't really determine if we're infringing or not. [00:10:28] Speaker 01: It's indefinite. [00:10:29] Speaker 01: And that's not the legal test. [00:10:31] Speaker 02: Until it comes out. [00:10:32] Speaker 01: Until it comes out. [00:10:34] Speaker 01: Until it comes out, right. [00:10:36] Speaker 01: And so you will know then. [00:10:38] Speaker 01: And I don't think a person with a skill in the art has any problem with definiteness in determining the scope of this claim. [00:10:43] Speaker 01: You know what all those claim limitations are. [00:10:46] Speaker 01: If the alleged infringer is making batches, if they make one batch like Haspira did, and that batch is representative of all batches, which they say to the FDA, it is, that's all you have to look at. [00:10:58] Speaker 01: And that's what we did look at. [00:10:59] Speaker 04: I guess what they're saying is that they can't tell whether batch 16 infringed until they produce batch 31, if batch 31 is outside of the parameters. [00:11:13] Speaker 01: Well, there's nothing in the claim that requires more than 16 batches or any number of batches. [00:11:18] Speaker 01: It's either one batch that's representative or all batches that are made by the same compounding process. [00:11:25] Speaker 04: Well, so under my hypothetical, [00:11:28] Speaker 04: 31 batches are made by the compounding process. [00:11:32] Speaker 04: And when you make batch 16, you can't tell whether there's infringement until you know what happens with batches 17 to 31, right? [00:11:42] Speaker 01: If you make 16 batches and then you look at all those 16, you can tell if you infringed. [00:11:48] Speaker 01: If you now make a 17th batch, you have to look at 17. [00:11:50] Speaker 04: How can you tell if you infringe without knowing about batches 17 to 31? [00:11:54] Speaker 01: Well, I don't know why you would have to make batch 17 or 31. [00:11:58] Speaker 01: In other words, that's a hypothetical. [00:12:01] Speaker 04: The hypothetical is you're making 31 batches, and you can't tell about batch 16 until you've made the rest of the batches and know that all the batches were within spec. [00:12:11] Speaker 01: I think a person who is skilling or reading this patent would understand that if you're using [00:12:16] Speaker 01: the same compounding process, to make batch after batch after batch, and you're using efficient mixing, the way the patent teaches it. [00:12:26] Speaker 01: The person with the skill in there is going to say, you infringe. [00:12:28] Speaker 01: And if they somehow make those batches and they get to batch 31, and it's outside the claim, well, maybe it doesn't infringe at that point. [00:12:36] Speaker 01: But I think that's a fact question. [00:12:37] Speaker 01: You'd have to look at what they did. [00:12:39] Speaker 01: How did they do it? [00:12:40] Speaker 02: It's more a question whether they botched the process. [00:12:42] Speaker 01: It could be. [00:12:43] Speaker 01: It could be. [00:12:44] Speaker 01: It would be a fact question. [00:12:46] Speaker 01: Absolute fact question. [00:12:47] Speaker 03: So in the hypothetical, I can't... But isn't it true that the prior ARC method resulted in OK purity levels most of the time, and only some of the time resulted in impurity levels above the desirable amount? [00:13:00] Speaker 03: That is true. [00:13:01] Speaker 03: So they could very well be using the old method, and the first batch they produced was OK. [00:13:08] Speaker 03: I mean, if they're using the old method, they don't infringe a patent, do they? [00:13:12] Speaker 01: That's correct. [00:13:13] Speaker 01: They could follow example four, for example. [00:13:15] Speaker 03: And how do we know just because one batch might have been an acceptable level? [00:13:22] Speaker 01: Well, I think you're making an assumption, Your Honor, that if they're using the same compounding process in the same way, that they're going to get variable results above and below 0.6. [00:13:33] Speaker 03: Isn't that what happened in the prior art? [00:13:36] Speaker 01: Yes, it did. [00:13:37] Speaker 01: And that's why. [00:13:38] Speaker 03: Well, so how do we know that theirs doesn't operate in a similar way? [00:13:42] Speaker 01: Because when it happened in the prior art, which is example [00:13:45] Speaker 01: for what was recognized by the inventors is that was the whole problem that they had to solve. [00:13:51] Speaker 01: What was going on here? [00:13:52] Speaker 01: What's wrong with what we're doing here with these 89 batches? [00:13:56] Speaker 01: And they figured out what was wrong with it. [00:13:58] Speaker 01: It was the process and the overall whatever. [00:14:01] Speaker 01: And they wanted to lower the impurities and they changed the process. [00:14:06] Speaker 03: But then isn't it the case that in order to know whether they in French 727 [00:14:13] Speaker 03: It has to include some notion of what the process is, not just the purity level. [00:14:19] Speaker 01: Not to determine infringement of claim one of the 727. [00:14:21] Speaker 01: I think all you have to do there is go through the claim, as we always do, and look for every single claim. [00:14:28] Speaker 03: I don't understand that at all, because it seems to me that if you produced something under the prior art, in your view, if you produced something under the prior art that resulted in something below this purity level, it would violate your patent. [00:14:42] Speaker 03: And that can't be the case. [00:14:44] Speaker 01: I have not taken that position. [00:14:45] Speaker 01: We do not take that position. [00:14:46] Speaker 03: And you're not putting any limitations in it that would exclude the prior art producing below the purity level. [00:14:54] Speaker 02: But you are. [00:14:55] Speaker 02: Yes, we are. [00:14:56] Speaker 02: We at least have to understand what the process isn't. [00:15:01] Speaker 02: It isn't example four, for example. [00:15:03] Speaker 01: Correct. [00:15:05] Speaker 01: That's right. [00:15:05] Speaker 01: It's not example four. [00:15:06] Speaker 01: Example four is clearly an example of the prior art, as you're referring to it, Your Honor, which was the prior batches they were making. [00:15:14] Speaker 01: And that's the actual data. [00:15:15] Speaker 01: That's the actual data that they had. [00:15:17] Speaker 01: So they put it in the patent as they should. [00:15:18] Speaker 01: And then they conceived and they came up with their invention with the new compounding process, if you will, efficiently mixing. [00:15:28] Speaker 01: And that is what's exemplified in example five. [00:15:32] Speaker 01: But that doesn't mean the claim has to be limited to what they did in claim five. [00:15:36] Speaker 01: If someone today follows example four, they don't infringe. [00:15:39] Speaker 01: Clearly not. [00:15:40] Speaker 04: They don't infringe which path? [00:15:42] Speaker 04: They don't infringe the 727? [00:15:43] Speaker 01: Well, I don't think they would infringe either one, because the 343 has a limitation in it for efficiently mixing. [00:15:51] Speaker 01: While I don't think it has all those other subservient, narrower limitations, it does say efficiently mixing. [00:15:57] Speaker 01: So if they're not efficiently mixing, meaning they're following example four, then they're outside the path. [00:16:02] Speaker 04: They're outside the 727 too? [00:16:07] Speaker 01: Well, no, that would depend. [00:16:09] Speaker 01: It would depend on the facts there and what they're doing. [00:16:11] Speaker 01: If, for example, they meet all the other limitations in claim one, then they would be infringing. [00:16:17] Speaker 02: In other words... Because it doesn't mention efficiently mixing. [00:16:20] Speaker 01: Correct. [00:16:21] Speaker 01: Correct. [00:16:22] Speaker 01: And if inefficient mixing is not a defined term in the patent, it's a described term in the patent, but it's not defined. [00:16:29] Speaker 01: And so when your honor says... That's your problem. [00:16:32] Speaker 01: Well, I don't think it's a problem. [00:16:33] Speaker 01: I don't think it has to be. [00:16:34] Speaker 01: It's described. [00:16:34] Speaker 01: It's amply described. [00:16:36] Speaker 01: The efficient mixing is described from, I think it's column eight, line 50 or so, for about the next three or four columns. [00:16:42] Speaker 01: There's a lot of disclosure about examples of what efficiently mixing is. [00:16:48] Speaker 04: Yeah, but those don't provide any standards. [00:16:51] Speaker 04: Aren't the district courts here right? [00:16:53] Speaker 04: Do you have to look to the examples to figure out what efficient mixing is? [00:16:58] Speaker 01: No. [00:16:59] Speaker 01: You should look at the example for sure, but you don't have to. [00:17:02] Speaker 01: There are five examples that go through [00:17:04] Speaker 01: very laboriously, all the testing they did and the analysis they did, and they changed different parameters, they changed slow conditions, whether you mix quickly, slowly, whatever it is, there are a lot of different parameters I'm using up my time. [00:17:21] Speaker 01: So I come back to the limitation for efficiently mixing should not be in claim one. [00:17:32] Speaker 04: That's enough for the moment. [00:17:33] Speaker 04: We'll restore your rebuttal time. [00:17:42] Speaker 00: Thank you. [00:17:43] Speaker 00: Mr. Leary. [00:17:43] Speaker 00: Thank you, Your Honor. [00:17:44] Speaker 00: May it please the Court. [00:17:46] Speaker 02: Why don't you start with Schrodinger's cat for me? [00:17:50] Speaker 00: Oh, it's a good place to start. [00:17:51] Speaker 00: Well, I think Your Honor has captured the essence of our argument. [00:17:55] Speaker 00: Namely, one of ordinary skill can't tell by making, after he's made one batch or even two batches or three batches, [00:18:02] Speaker 00: One ordinary skilled cannot tell if he's infringing or not infringing. [00:18:06] Speaker 00: He has to make the complete set of batches. [00:18:09] Speaker 00: It has to be a closed set and then he examines the outcomes in this entire set. [00:18:14] Speaker 00: And if he finds or she finds that the maximum has been met by the entire set of batches made using the process, then you can make a determination. [00:18:24] Speaker 00: But that is an indefinite limitation [00:18:28] Speaker 00: in its very essence, because the essence of definiteness is to be able to know if you're infringing in real time, as opposed to finding out a year and a half from now, oh I never was infringing because now I've exceeded the maximum. [00:18:44] Speaker 02: Supposing we think you're efficiently mixing, and supposing your results always come out below six, [00:18:58] Speaker 02: But you say they might not. [00:19:02] Speaker 02: Your expert says they might not come out below 6. [00:19:07] Speaker 02: What are we to do with that? [00:19:08] Speaker 00: Well, our expert did say, one of our experts did say they might exceed 0.6. [00:19:12] Speaker 00: There's no way to know until you've completed the set. [00:19:16] Speaker 00: Well, I think the outcome is that the 727 claims, well, in fact, this would apply to both because the maximum limitation is in both patents. [00:19:26] Speaker 00: I think the outcome is that the patents are indefinite. [00:19:29] Speaker 00: And that's the argument we have consistently. [00:19:31] Speaker 00: And we made that in the district court. [00:19:34] Speaker 00: Judge Andrews did not agree with us. [00:19:35] Speaker 00: We made that when we argued to this panel originally. [00:19:39] Speaker 00: And I think that's the necessary outcome because of the very unusual nature of the claims. [00:19:44] Speaker 00: Now, it was complicated by the fact that the district court found that efficient mixing is part of 727. [00:19:51] Speaker 00: I think it's helpful to [00:19:55] Speaker 00: understand how that happened. [00:19:57] Speaker 04: But would that eliminate the indefiniteness question that you raised? [00:20:00] Speaker 00: Well, I don't think it would. [00:20:01] Speaker 00: I don't think it would. [00:20:02] Speaker 00: I think it kind of confuses the analysis because it shifts the focus to efficient mixing. [00:20:08] Speaker 00: And of course, Judge Andrews found that hospera does not efficiently mix. [00:20:11] Speaker 00: If you look at what hospera does, it really isn't an example of example four. [00:20:18] Speaker 00: There was no high shear mixing. [00:20:20] Speaker 00: There was no slow and controlled mixing. [00:20:22] Speaker 02: It really is an example of example four? [00:20:24] Speaker 00: It is. [00:20:26] Speaker 00: Yes. [00:20:27] Speaker 00: So the batch made by Jaspiro would be included in example four, not in example five. [00:20:33] Speaker 00: Therefore, it would be an example of an inefficiently mixed batch, not an example of an efficiently mixed batch. [00:20:38] Speaker 00: And therefore, it would not infringe. [00:20:39] Speaker 00: And I think that was Judge Andrew's analysis. [00:20:45] Speaker 00: But let me return to the point about how did efficiently mixing get into claim one of the 727. [00:20:52] Speaker 00: That wasn't Judge Andrew's. [00:20:54] Speaker 00: That happened during prosecution. [00:20:57] Speaker 00: Claim one of the 727 patent as originally written, as originally drafted, did not include the wherein the batches, excuse me, wherein the pH is adjusted by a base limitation. [00:21:13] Speaker 00: That was added at the insistence of the examiner during prosecution. [00:21:19] Speaker 00: Medco responded to that. [00:21:22] Speaker 00: by putting in an inventor affidavit. [00:21:24] Speaker 00: And in the inventor affidavit, the inventors talked a lot about the process, how the process changed and therefore the invention is different from the, the new batches are different from the old batches. [00:21:34] Speaker 00: And the examiner said, ah-ha, I understand that, but 727 claim one doesn't refer to the process. [00:21:40] Speaker 00: You have to put something in the claim that refers to the process because it's the process that distinguishes the new batches from the old batches. [00:21:47] Speaker 00: So the language that was agreed upon was the wherein clause, [00:21:51] Speaker 00: And that's why Judge Andrews was right to read that clause as distinguishing, as being, that's the language, at least in the mind of the examiner, as agreed with by Judge Andrews. [00:22:02] Speaker 00: That's the language that distinguishes new batches from old batches. [00:22:06] Speaker 00: And so what does that mean? [00:22:07] Speaker 00: So we look, we go to the specifications, try to understand what this wherein clause means. [00:22:11] Speaker 00: And what we find in the specification is that the old batches are disclaimed, to put that in Phillips, post Phillips language. [00:22:19] Speaker 00: There's a disclaimer, there's a clear disclaimer. [00:22:21] Speaker 00: The inventors say a couple of different times that the old batches are not our invention, but the new batches aren't. [00:22:27] Speaker 00: So there's a disclaimer. [00:22:28] Speaker 00: And so when you look at the specification, what you find and unavoidably find is that the wherein clause must mean that whatever the process is, it can't be the old process. [00:22:41] Speaker 00: It can't be inefficient mixing. [00:22:43] Speaker 00: And so I think Judge Andrews was absolutely right, given the prosecution history, [00:22:49] Speaker 00: was absolutely right to read the claim the way he did and to include efficient mixing in his construction of the claim. [00:22:57] Speaker 00: But there are other clues, too. [00:22:58] Speaker 00: It's not just this disclaimer. [00:23:01] Speaker 00: I mean, that alone is enough. [00:23:03] Speaker 00: But if you take out the wherein clause, if you remove that from claim one of the 727 pet, what you wind up with is essentially a functional claim. [00:23:15] Speaker 00: It's an aspirational claim. [00:23:18] Speaker 00: We claim any way of making batches where the maximum is never exceeded. [00:23:25] Speaker 00: But we're not going to tell you how to do that. [00:23:27] Speaker 00: You're going to have to go invent that yourself. [00:23:29] Speaker 00: We've shown you one way, but we're claiming all the ways that you can avoid exceeding the maximum. [00:23:36] Speaker 00: A functional type claim, which I think there's a consensus now those are not good claims. [00:23:43] Speaker 02: You don't really mean that. [00:23:45] Speaker 02: You don't mean always. [00:23:46] Speaker 02: You mean always using [00:23:48] Speaker 02: Efficient mixing. [00:23:49] Speaker 00: Well, if efficient mixing is in the claim, I'm saying imagine their claim construction has been adopted. [00:23:58] Speaker 00: Then, anyway, avoiding the maximum would be something that they would say would fall within the scope of their claim, even though they don't disclose these other ways of achieving that. [00:24:08] Speaker 00: That's the problem with the way that that claim was drafted before the examiner required that the wherein language be added to the claim. [00:24:15] Speaker 00: That would be our argument. [00:24:17] Speaker 00: That's why I think the trial judge was right. [00:24:20] Speaker 00: But there's more. [00:24:21] Speaker 00: The pharmaceutical batches limitation requires efficient mixing. [00:24:28] Speaker 00: If you look at the definition of pharmaceutical batches in column five, you'll see the pharmaceutical batches are only those batches made using an embodiment of the invention. [00:24:40] Speaker 00: The language is right. [00:24:43] Speaker 00: lexicography by the inventors. [00:24:44] Speaker 00: And so if you don't use an embodiment of the invention, you're not making pharmaceutical batches per this lexicography. [00:24:52] Speaker 00: Well, what's an embodiment of the invention? [00:24:54] Speaker 00: Well, all of the embodiments of the invention are in fission mixing. [00:24:58] Speaker 00: So that's another way that you reach the same outcome that Judge Andrews reached. [00:25:03] Speaker 00: And finally, the inventor testimony. [00:25:04] Speaker 00: For whatever weight that deserves in claim construction, Dr. Musso testified [00:25:11] Speaker 00: This is on page 16 of our red brief, that efficient mixing is always required by the 727 patent. [00:25:17] Speaker 00: Always. [00:25:19] Speaker 00: So everything lines up with what Judge Andrews did, and I would urge the court to use his construction and affirm his construction, which leads, I think, inevitably to the outcome that this hospital does not infringe. [00:25:33] Speaker 04: Now with the time... Suppose you're right about that, hypothetically. [00:25:37] Speaker 04: Suppose you're right that [00:25:42] Speaker 04: Judge Andrews was correct in that you don't infringe. [00:25:45] Speaker 04: Does that resolve the case? [00:25:46] Speaker 04: You have these counterclaims of invalidity. [00:25:50] Speaker 04: Does the court have to reach those if it finds non-infringement? [00:25:53] Speaker 04: What's your position on that? [00:25:55] Speaker 00: Well, my position is if the court found, if this court agrees that there's no infringement, my client would be thrilled. [00:26:03] Speaker 00: But I think the court does have an obligation to address the rest of the arguments. [00:26:07] Speaker 00: And so I'm prepared to talk about on-sale bar or answer any other questions the court might have. [00:26:12] Speaker 00: But my thought was with the time that I have, I would speak about on-sale bar where I carry the burden. [00:26:18] Speaker 00: But I don't want to move too quickly if the court has more questions about these issues relating to the claim construction. [00:26:24] Speaker 04: Well, on the on-sale bar question, what about the footnote in Judge Andrew's opinion that, I don't know, footnote 15, I'm not sure, in which he says, I'm not going to reach the question of whether this [00:26:37] Speaker 04: requirements contract or whatever it is, covered the old product or the new product? [00:26:43] Speaker 00: Well, I think it's clear. [00:26:47] Speaker 00: Shifting away from the argument that we had before the end of the bank court where we were talking about the validation batches and the focus was on the validation batches, shifting to what was the subject of the distribution agreement, it's clear that what was being offered for sale in the distribution agreement [00:27:06] Speaker 00: was all of the angiomacs, not the three validation batches, but all of the angiomacs that ICS could buy over the next three years to be resold in the United States. [00:27:17] Speaker 00: How do we know that that's the new product as opposed to the old product? [00:27:21] Speaker 00: Because that's all that there was at that point, Your Honor. [00:27:23] Speaker 04: After October 25th, they never used the old... Was there anything in the agreement that specifies what the product is in terms of old versus new? [00:27:33] Speaker 00: Well, no, because they're identical. [00:27:35] Speaker 00: The batches are identical and the label did not change. [00:27:40] Speaker 00: So the old batches and the new batches are indistinguishable from the standpoint of the marketplace. [00:27:44] Speaker 00: But what we do know is that there were 11 batches at least that were embodiments of the invention that were offered for sale as part of the agreement with ICS. [00:27:54] Speaker 00: Because it was going to be all of the angiomacs for the next three years. [00:27:59] Speaker 00: Certainly not limited in any way to the old angiomacs. [00:28:02] Speaker 00: That would have been completely counterintuitive. [00:28:05] Speaker 00: Whatever was the current commercial product, that's what was being offered. [00:28:09] Speaker 00: And as of February, when this agreement was... Well, does the agreement say that? [00:28:14] Speaker 00: No, but that would be the natural reading of any commercial contract. [00:28:17] Speaker 04: Well, I guess so, yeah. [00:28:18] Speaker 04: But there's a contract construction issue here, which wasn't resolved by Judge Andrews, correct? [00:28:25] Speaker 00: Well, I think that's right. [00:28:28] Speaker 00: And I will say I am not 100% clear on whether contract construction constitutes a fact finding or a legal finding, but some interpretation of a legal document. [00:28:36] Speaker 00: So I think it's something that this court is capable of doing de novo. [00:28:41] Speaker 00: I wouldn't think you'd have to send it back for him just on that particular point. [00:28:45] Speaker 00: And I would urge this court that the normal, natural reading of the contract is whatever the current commercial product is, that's what's being offered for sale. [00:28:54] Speaker 00: And as of February of 2007, when the agreement became effective, the current commercial product in the pipeline were the new batches. [00:29:01] Speaker 00: And in fact, the old batches, the old way of making batches was never used again by stipulation of the parties in the trial after October 25th of 2006. [00:29:10] Speaker 00: They knew it worked. [00:29:12] Speaker 00: And they changed their process. [00:29:14] Speaker 00: And they documented the change. [00:29:16] Speaker 00: And they began making the new batches. [00:29:19] Speaker 00: And so the argument about [00:29:22] Speaker 00: This is before the contract was signed. [00:29:26] Speaker 00: The three validation batches were made in October, November, and December of 2006. [00:29:31] Speaker 00: The contract, I don't know when it was signed. [00:29:34] Speaker 00: I know that it recites that it became effective in February of 2008. [00:29:38] Speaker 00: So those batches were made before the contract was signed. [00:29:43] Speaker 00: The next eight batches, I'm unclear when they were made. [00:29:45] Speaker 00: The record doesn't reflect, is what I should say. [00:29:47] Speaker 00: The record doesn't reflect exactly when they were made. [00:29:49] Speaker 00: But they were made clearly before the critical date. [00:29:52] Speaker 00: So they were made during the spring and they were part of what was offered for sale. [00:29:56] Speaker 00: And the fact that they didn't sell them, they didn't actually deliver the batches using the new process until after the critical date is of no moment. [00:30:05] Speaker 00: That's exactly what happened in Phillips. [00:30:07] Speaker 00: In Phillips the offer was made and the, what were they, chip connectors, whatever they were, the connectors that were the object of the invention in the Phillips case [00:30:19] Speaker 00: They weren't delivered until many months after the critical date had lapsed. [00:30:24] Speaker 00: So the fact that they were not actually sold and delivered until after the critical date doesn't mean they weren't a subject of the contract or the offer for sale. [00:30:36] Speaker 00: So let me speak about a couple of other arguments that Medco raises in connection with this. [00:30:44] Speaker 00: They say it doesn't qualify as a commercial offer [00:30:48] Speaker 00: Because it's not like the group one case where a simple acceptance would form an enforceable contract. [00:30:57] Speaker 00: But that's just not right. [00:30:58] Speaker 00: I mean, what happens under this ICS agreement, which has all of the elaborate terminology that one would expect of a uniform commercial code Article II contract for sale, everything is in this agreement. [00:31:12] Speaker 00: And one of the things is that when a purchase order is submitted, [00:31:18] Speaker 00: It automatically becomes effective if it's not rejected in 48 hours. [00:31:22] Speaker 00: Recall there's this little term in the ICS about being able to reject purchase orders. [00:31:29] Speaker 00: This is not an unusual thing. [00:31:31] Speaker 00: The contract doesn't say this, but that's usually, when it's in a contract, it's usually for supply chain reasons. [00:31:37] Speaker 00: You know, if you send me a purchase order, I have this obligation to honor it, use my best efforts to honor it in 48 hours, which this agreement requires. [00:31:45] Speaker 00: I have this obligation, well, if I don't have any bivalrutin and it's coming from Italy or I think they've, I think they may have sourced it from Italy at that time. [00:31:53] Speaker 00: If it's coming from Italy, I can't get it in 48 hours. [00:31:55] Speaker 00: I'm not going to be able to honor this purchase order. [00:31:57] Speaker 00: So this one I'm going to have to not honor. [00:31:59] Speaker 00: But clearly the sense of this agreement is that purchase orders are going to be honored. [00:32:03] Speaker 00: It would be nonsensical for the medicines company not to honor these purchase orders because this is the only way they can sell angiomext during this three year period in the United States. [00:32:15] Speaker 00: This is an exclusive arrangement. [00:32:16] Speaker 00: They can't sell to anybody else for resale in the United States. [00:32:19] Speaker 00: So they're going to honor the purchase orders. [00:32:21] Speaker 00: It's 90% of their revenue back in that time period. [00:32:26] Speaker 00: And there was never any idea that they would dishonor purchase orders except when they needed to. [00:32:32] Speaker 00: And the contract limits their ability to dishonor a purchase order to when it's commercially reasonable, or maybe the language is commercially necessary. [00:32:40] Speaker 00: But the concept is if I can't, probably because of supply chain reasons, [00:32:44] Speaker 00: I'm going to honor these purchasers. [00:32:47] Speaker 00: So it is like Group 1. [00:32:50] Speaker 00: It's just like Group 1. [00:32:51] Speaker 00: It automatically becomes enforceable. [00:32:53] Speaker 00: If the purchaser arrives, then it's not dishonored under this specific language within 48 hours. [00:33:00] Speaker 00: OK. [00:33:00] Speaker 00: Well, I think your time has expired. [00:33:02] Speaker 04: We'll restore your rebuttal time. [00:33:04] Speaker 00: Thank you. [00:33:10] Speaker 01: A few comments further. [00:33:12] Speaker 01: Judge Andrews. [00:33:13] Speaker 01: made fact findings that Haspira, number one, did have a pharmaceutical batch as required by claim one of the 727, because they had a representative batch. [00:33:22] Speaker 01: Judge Andrews had no problem with definiteness in determining how to find whether or not they met that limitation. [00:33:28] Speaker 01: He also found that Haspira had, as I said, an S9 level below .6. [00:33:36] Speaker 01: What he also found was they didn't efficiently mix, which was the limitation he was reading into the claim. [00:33:42] Speaker 01: And he found that they followed. [00:33:44] Speaker 01: example four more closely, and they added it too fast, okay? [00:33:48] Speaker 01: And therefore, it wasn't efficiently mixing as Judge Andrews was construing the term, and that's what we think the legal error was. [00:33:55] Speaker 01: Okay, but he had no problem with definiteness or indefiniteness, I should say. [00:33:58] Speaker 01: Hospira never challenged what a pharmaceutical batch is. [00:34:01] Speaker 01: That was not a claim construction term that was being challenged at any time in this case. [00:34:06] Speaker 01: I heard something today from Mr. Oehler about it should require efficient mixing. [00:34:10] Speaker 01: That was never argued to my knowledge or my recollection, [00:34:13] Speaker 01: And I don't think that's an issue. [00:34:15] Speaker 01: I'd like to move to the on sale with the ICS agreement. [00:34:18] Speaker 04: As to the on sale, do you agree that a requirements contract is an offer for sale? [00:34:23] Speaker 01: It could be, like in the Enzo case that was found by this court. [00:34:26] Speaker 01: However, in this case, the distribution agreement was found by Judge Andrews not to be a requirements contract. [00:34:33] Speaker 01: And as a matter of law, I think reading... So why isn't it a requirements contract? [00:34:36] Speaker 01: Because there was no obligation on the part of the medicines company to supply the requirements of [00:34:42] Speaker 01: ICS, period. [00:34:44] Speaker 01: There's nothing in this agreement that says they have to do that. [00:34:47] Speaker 01: What it says in the agreement is ICS is a distributor, exclusive distributor, for sure, and they were being paid for that. [00:34:53] Speaker 01: And then they could issue a purchase order, and the medicines company had two days, it's paragraph 3.1 in the agreement, they had two days to reject the purchase order. [00:35:03] Speaker 04: Until they do that... But there's a best efforts obligation, isn't there? [00:35:06] Speaker 01: The best efforts is Trump, Your Honor. [00:35:08] Speaker 01: I didn't mean to speak... It's Trump. [00:35:09] Speaker 01: I think there's best efforts. [00:35:11] Speaker 01: is superseded by the language of the contract itself. [00:35:17] Speaker 01: The contract tells you how you can purchase product. [00:35:20] Speaker 01: It says ICS has to issue a purchase order. [00:35:22] Speaker 03: It doesn't just mean that the contract doesn't constitute a sale, but it's still an offer to sell. [00:35:29] Speaker 03: You just don't have to follow through on every single one. [00:35:33] Speaker 01: I think to have an offer to sell, you have to make an offer that can be accepted as is. [00:35:38] Speaker 01: It's a simple offer that can be [00:35:40] Speaker 03: consummated with a simple... Can I ask you the factual question that we asked your friend? [00:35:46] Speaker 03: Let's just assume we disagree with you and find this distribution agreement could legally constitute an offer for sale. [00:35:54] Speaker 03: Do we still need to send it back to the district court for fact-finding on whether this distribution agreement covered the old products or the new products or is it true that this is contemplating [00:36:10] Speaker 03: product produced under the new method? [00:36:12] Speaker 01: The answer is yes. [00:36:12] Speaker 01: You would have to send it back because that was not a fact finding by the court, as is explicitly set forth in his opinion. [00:36:18] Speaker 03: But is there any real dispute there? [00:36:20] Speaker 01: Yes. [00:36:21] Speaker 01: At the time of this contract, which was February 27, 2007 is when it was executed, they hadn't even come up with the invention yet. [00:36:29] Speaker 01: They hadn't even made the invention yet. [00:36:31] Speaker 01: And so they didn't have improved angiomax as it's being called. [00:36:35] Speaker 03: And in fact, I think the first batch... You hadn't produced any batches? [00:36:38] Speaker 01: They had produced batches, but they had produced less than 25 batches. [00:36:44] Speaker 01: And they didn't realize they had an invention until after they made 25 batches. [00:36:49] Speaker 01: That didn't happen until the middle of 2007, well after the critical date and well after this contract was entered into. [00:36:58] Speaker 01: In other words, until the medicines company, until the inventors made 25 batches and looked at the compounding process and the fact that it had [00:37:08] Speaker 01: it maintained or resulted in an S9 level consistently below 0.6. [00:37:15] Speaker 01: They didn't know they had made that invention. [00:37:17] Speaker 01: They didn't have appreciation. [00:37:18] Speaker 01: And this is the issue we have appealed also, which is ready for patenting. [00:37:22] Speaker 01: Judge Andrews found that in February or before February of 07, the invention was ready for patenting, which is another element that has to be satisfied to find an on-sale bar here. [00:37:33] Speaker 01: And we challenged that also because it couldn't possibly be ready for patenting. [00:37:38] Speaker 01: They didn't even know they hadn't made an invention yet. [00:37:41] Speaker 01: And what Judge Andrews was looking at for that is he relied on the master batch record, which set forth the process. [00:37:47] Speaker 01: And because Judge Andrews was thinking the invention is only the process, that's an enabling disclosure and therefore a reduction to practice and therefore ready for patenting. [00:37:58] Speaker 01: If the claim construction falls, clearly that can't be the case. [00:38:02] Speaker 01: And even, as I said, the conception here by the inventors was not until much later, after they made 25 batches. [00:38:10] Speaker 01: So it can't be ready for patenting. [00:38:12] Speaker 01: You couldn't even write a patent application. [00:38:13] Speaker 01: How would you satisfy 112 at that time? [00:38:15] Speaker 01: You don't know what the boundaries are of your invention before you know what it is. [00:38:20] Speaker 01: And so in February of 2007, when this distribution agreement was entered into, you wouldn't know that you had the invention until you'd produced all the batches. [00:38:30] Speaker 04: 25. [00:38:30] Speaker 04: Sounds similar to that. [00:38:32] Speaker 04: indefiniteness problem we were talking about for the infringer. [00:38:36] Speaker 02: Was there an articulated hypothesis using the scientific method? [00:38:47] Speaker 01: Not really. [00:38:47] Speaker 01: I mean, I think there was a master batch record, and there were some internal [00:38:59] Speaker 01: analyses that the inventors were doing, but I don't think, there certainly wasn't an articulation that the ASC-9 level, the maximum ASC-9 level would be 0.6. [00:39:07] Speaker 01: It definitely didn't exist. [00:39:10] Speaker 01: And again, it was 25 batches, because that's when they looked at it and they conceived of what they had done, and then they reduced it to practice by filing a patent application shortly thereafter. [00:39:21] Speaker 01: But it wasn't back in 2007, and as I said, Judge Andrews found that it was ready for patenting to satisfy the first part [00:39:29] Speaker 01: of the FAF test, but I think he did so erroneously because he was just looking at the process. [00:39:36] Speaker 04: Before you sit down, I just want to bring you back to the distribution agreement in section 4.2, which says that medicines will use its commercially reasonable efforts to fill the awards. [00:39:52] Speaker 04: Why isn't that a requirements [00:39:59] Speaker 01: Well, it's commercially reasonable efforts to fill orders. [00:40:02] Speaker 01: The order has to be made first. [00:40:03] Speaker 01: There's no order. [00:40:04] Speaker 01: This contract doesn't specify it's true. [00:40:07] Speaker 04: That's true of every requirements contract, that it contemplates future orders saying here's how much we want and that the contracting party has to use reasonable efforts to fill the orders. [00:40:21] Speaker 04: Why isn't that just a standard requirements contract? [00:40:23] Speaker 01: I think in a standard requirements contract, there's some kind of provision that says, [00:40:27] Speaker 01: You're going to supply us with up to 70% of our requirements. [00:40:31] Speaker 01: That's a contractual obligation that the other party has to satisfy that demand when it's made. [00:40:37] Speaker 01: If they don't, they have a contractual problem. [00:40:40] Speaker 01: Here, ICS, they could say, you know, we're intending to sell tons of stuff, but there's no legal obligation on the part of the medicines company to supply it. [00:40:49] Speaker 04: There's a legal obligation to use reasonable efforts, isn't there? [00:40:52] Speaker 01: To satisfy orders which are made and accepted. [00:40:54] Speaker 01: The order has to be accepted by the medicines company. [00:40:57] Speaker 01: It's in 3.1. [00:40:58] Speaker 01: They can reject it for any reason. [00:41:03] Speaker 02: So they can unreasonably reject? [00:41:08] Speaker 01: I don't know what unreasonable. [00:41:09] Speaker 01: What if the medicine company decided that this market is not worth making the product anymore? [00:41:14] Speaker 01: It costs a lot of money to make the product. [00:41:16] Speaker 01: The market is done because of generic competition or because of some other reason, whatever it may be. [00:41:21] Speaker 01: And they say, we're out of this business. [00:41:23] Speaker 01: It doesn't make sense for us to make this product. [00:41:25] Speaker 04: So reasonable efforts is meaningless because they can reject it for any reason. [00:41:31] Speaker 01: I think we're talking about two different things. [00:41:32] Speaker 01: You were referring to paragraph 4.1, I think. [00:41:35] Speaker 04: But you said, I think I understood you to say that reasonable efforts only applies once they've accepted the order. [00:41:43] Speaker 04: and that there's no obligation to fill the order unless they accept it. [00:41:48] Speaker 04: And no obligation to use reasonable efforts unless they accept the order and that they can reject the order for any reason they want it. [00:41:56] Speaker 01: I think they don't have an obligation to use reasonable commercial efforts to satisfy an order until they get the order and accept it, yes. [00:42:02] Speaker 01: I'm not saying they can be unreasonable in anything. [00:42:06] Speaker 01: That's a hard description. [00:42:06] Speaker 01: I'm saying that they don't have an offer of sale here of a specific product. [00:42:13] Speaker 01: by virtue of the existence of this distribution agreement. [00:42:19] Speaker 04: Okay. [00:42:19] Speaker 04: Thank you, Mr. Haag. [00:42:20] Speaker 01: Thank you. [00:42:22] Speaker 00: Mr. Leary, you've got five minutes of rebuttal time if you need it. [00:42:27] Speaker 00: Thank you. [00:42:28] Speaker 00: Let me pick up right where Mr. Haag left off. [00:42:31] Speaker 00: So the contract does require ICS to place words. [00:42:35] Speaker 00: In fact, the contract specifies that ICS is obligated [00:42:38] Speaker 00: to maintain inventory at levels that were commensurate with historical levels. [00:42:44] Speaker 00: They had been doing business together for a long time. [00:42:48] Speaker 00: Before this distribution agreement, ICS was merely a distributor. [00:42:53] Speaker 00: After the distribution agreement, ICS became effectively a distributor outside the U.S., but a reseller within the U.S., and so it began buying [00:43:01] Speaker 00: angiomax and owning the angiomax, taking title to the angiomax and reselling the angiomax. [00:43:07] Speaker 00: The distribution agreement required ICS to order at specific levels. [00:43:14] Speaker 00: It required them to submit purchase orders on Mondays or if that was a business holiday. [00:43:20] Speaker 00: Give me an appendix reference. [00:43:22] Speaker 00: I think the correct reference is paragraph 3.1 in the distribution agreement. [00:43:30] Speaker 00: And to effectuate that, ICS was required to submit orders. [00:43:38] Speaker 00: That's in paragraph 3.12. [00:43:40] Speaker 00: And so of course there were going to be orders and of course they were going to be satisfied. [00:43:45] Speaker 00: This, because there was a requirement for a specific quantity to be purchased by ICS, in fact the way it's phrased I think in the agreement is that ICS shall mean inventory commensurate, but that implies orders up to a certain level. [00:44:01] Speaker 00: over the three-year period of the agreement. [00:44:04] Speaker 00: And it requires, obviously, the submission of purchase orders in order to maintain that level. [00:44:11] Speaker 00: The agreement also imposes on the medicines company a commercially reasonable obligation to fill those orders. [00:44:18] Speaker 00: And the exception where a purchase order is, for some reason, not accepted isn't dealt with with any [00:44:28] Speaker 00: long discussion in the agreement because it's not something that's contemplated as going to happen very often. [00:44:33] Speaker 00: Why in the world would they reject purchase orders unless they absolutely had to when rejecting a purchase order meant that they weren't making any sales in their biggest and best territory, namely the United States of America and some other, I think perhaps Puerto Rico was also included in the definition of territory. [00:44:51] Speaker 00: Why would they reject those purchase orders? [00:44:53] Speaker 00: Because the agreement also forbade [00:44:56] Speaker 00: the medicines company from selling Angiomax to anybody else who might resell it into that area. [00:45:01] Speaker 00: So it was an exclusive dealing arrangement. [00:45:04] Speaker 00: It was a sales agreement to supply a reseller for exclusive resale in the most important territory for three years. [00:45:13] Speaker 00: So these were serious obligations. [00:45:15] Speaker 00: It's a very sophisticated document that no doubt was negotiated by sophisticated people. [00:45:21] Speaker 00: They knew what they were doing. [00:45:22] Speaker 00: And the idea that they would just willy nilly [00:45:25] Speaker 00: not sell to the only person they could contractually sell to, the only entity they could contractually sell to, seems to me to be sort of fantastic. [00:45:34] Speaker 00: And so I don't think that's a serious counter argument. [00:45:39] Speaker 00: Now, I'd also like to speak for a moment about this idea that they didn't have the invention. [00:45:45] Speaker 00: So this is just an incorrect recitation of the law. [00:45:52] Speaker 00: It has never been the case that an inventor must appreciate all of the inherent qualities of his or her invention in order for it to be ready for patenting for on sale purposes. [00:46:03] Speaker 00: And we can see why. [00:46:05] Speaker 00: Because there would be no end to new patents on old things if that were the case. [00:46:10] Speaker 00: Because we are forever figuring out new things about something we've been doing for a long time. [00:46:14] Speaker 00: And so what they did know is this. [00:46:17] Speaker 00: They knew in October of 2006, [00:46:21] Speaker 00: They knew that they had a better method for mixing. [00:46:24] Speaker 00: And they never used the old method again. [00:46:26] Speaker 00: They knew that. [00:46:26] Speaker 00: And they could have written patent claims on that right then. [00:46:29] Speaker 00: It would have been a product by process claim. [00:46:33] Speaker 00: If you use this efficient mixing, we claimed that. [00:46:37] Speaker 00: And we claimed the batches that are the result of that. [00:46:40] Speaker 00: We don't know what the maximum will be at that point in time. [00:46:43] Speaker 00: But we still can write a claim. [00:46:45] Speaker 00: And therefore, it's on sale. [00:46:47] Speaker 00: The batches were on sale from that moment forward as they went into the product pipeline. [00:46:52] Speaker 00: And this idea that we need to appreciate all of the inherent limitations, it's just never been the law. [00:46:57] Speaker 03: But they might not have known that all the batches would come under the point six. [00:47:01] Speaker 00: But that doesn't matter, Your Honor. [00:47:03] Speaker 00: That doesn't matter. [00:47:04] Speaker 00: There are things we don't know about... Well, why doesn't it? [00:47:08] Speaker 03: Because that's part of the claims and the limitations, at least as you're incurring them. [00:47:14] Speaker 03: don't they have to at least appreciate that when they're making an offer to sell the product produced by this process? [00:47:20] Speaker 00: Well, I would suggest the court should look at Skeltek and the Avid Geneva case and the Cargill case. [00:47:31] Speaker 00: I mean, this question comes up all the time. [00:47:34] Speaker 00: We've invented something new. [00:47:36] Speaker 00: We know it works. [00:47:37] Speaker 00: We know it reduces variability. [00:47:39] Speaker 00: We know it reduces variability. [00:47:40] Speaker 00: It's better than the old way of doing it. [00:47:42] Speaker 00: But we don't know for sure everything there is to know about it. [00:47:45] Speaker 00: We might figure out some things years from now. [00:47:47] Speaker 00: But in the meantime, it's been on sale. [00:47:49] Speaker 00: And those sales count as prior art. [00:47:51] Speaker 00: And they invalidate if that happens more than a year before the patent application is filed. [00:47:59] Speaker 00: It's happened here. [00:48:00] Speaker 00: And this court has dealt with that question many, many, many times. [00:48:03] Speaker 00: Because it's not uncommon. [00:48:05] Speaker 00: But the Scaltech case, the Cargill case, the Abbott versus Geneva case all deal with this. [00:48:10] Speaker 00: And there's no requirement that the inventors have to appreciate all of the inherent properties and benefits of their invention if they're selling it. [00:48:19] Speaker 00: Because if that were true, Coca-Cola could go get a patent on, the Coke company could go get a patent on the Coca-Cola formula today. [00:48:28] Speaker 00: And that's not permitted. [00:48:29] Speaker 00: That's not permitted. [00:48:30] Speaker 04: Because they could find something new. [00:48:32] Speaker 04: Do we have to construe the claims of these patents as requiring batch consistency into the future? [00:48:39] Speaker 00: Well, certainly one of ordinary skill would understand that the real invention here is the reduction of variability. [00:48:52] Speaker 00: That's really... Well, you could say that the real invention here is efficient mixing. [00:48:57] Speaker 00: Well, so they chose to disclose it as efficient mixing. [00:49:03] Speaker 00: But when we see the discussion, the comparison between the batches of example four and the batches of example five, the discussion is really about the reduction of variability. [00:49:15] Speaker 00: Then they say, now our way of reducing variability is to use efficient mixing. [00:49:21] Speaker 00: That's what they tell one of ordinary skill. [00:49:23] Speaker 00: Our way of reducing variability is efficient mixing. [00:49:26] Speaker 00: Somebody else might find another way, another new way of reducing variability. [00:49:30] Speaker 00: But our invention, at the end of the day, [00:49:33] Speaker 00: is efficient mixing. [00:49:34] Speaker 00: And that's the message that comes through. [00:49:36] Speaker 00: And that's what the patent examiner found. [00:49:39] Speaker 00: That's what he was worried about, or she was worried about, when, I think it's a she, required that the language referring to the process be put back in claim one of the 727 patent, in order to distinguish it over the old batches. [00:49:53] Speaker 00: I know I'm not supposed to be talking about claim construction under a bottle, but that's my response to your question. [00:50:00] Speaker 00: And if there are no other questions, [00:50:01] Speaker 00: I'll rely on our briefs for the rest of our arguments.