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The United States Court of Appeals for the Federal Circuit is now open to any questions.

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I thank the United States and the federal court.

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Please be seated, ladies and gentlemen.

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Good morning.

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We have five cases this morning, four patent cases, two of them being combined for argument and a government employee case which is being submitted on the briefs and will therefore not be

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Argued.

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Our first case is the Novartis Watson case, 1214, 1799, 1800.

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We'll hear from Mr. Lombardi.

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May it please the court, counsel.

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The district court erred in dismissing

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the plain language of two prior art references, which plainly taught the combination of the two elements that are at issue on this appeal.

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Not only did it teach that combination, but it actually showed that that combination had been used in those prior art references.

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The district court's sole reason for rejecting the obviousness defense in this case was its finding that the problem had to be expressly identified in the art.

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The district court arrived at its conclusions by misstating the law and misunderstanding the law of obviousness, which does not require an express teaching in the prior art of a problem.

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It requires that there be a motivation to combine.

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It requires that that motivation to combine be at least implicitly available in the art, available to the person of ordinary skill in the art, but it does not require an express teaching.

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The district court also erred in

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its application of its factual findings, the clear error rule.

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Which references are you talking about?

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I'm talking about the 040 patent.

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I'm talking about the 040 patent, Your Honor, is the base patent, I would say.

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That discloses rivastigmine in a transdermal patch.

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But the two patents where the key errors were made, or the two references, were the 807 patent and the Allalman reference.

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Those two are where the key errors were made.

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And if you look at the 807, turn to the 807 patent, Your Honor, you can see that on its face, that patent discloses rivastigmine RA7, as well as the use of the... As the racemate.

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Excuse me?

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As the racemate.

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As the racemate.

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That is correct, Your Honor.

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But the racemate, the issue between the racemate and the disclosure of rivastigmine, which is one of the enantiomers,

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was conceded by the plaintiff's expert and also found by the court not to make a difference in the resolution of the obvious decision.

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The court said there may be an antioxidant as required.

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And Your Honor, it does say in the 807 patent that the antioxidant can be used as required.

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But the point, Your Honor, our point and our point that we made below is that the as required merely indicate

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as everybody knows and as was found by the district court below, that you don't always use an antioxidant.

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You don't always have an oxidation problem.

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The oxidation problem arises based on the environment in which the compound is placed.

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And when you have an oxidation problem,

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then you use this antioxidant.

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So there is a teaching here, as the district court found... Well, the district court made findings of facts, said that weaver's stigming was not known to be susceptible to oxidative degradation, and neither the 807 nor the El Malum article teach one of skill in the art that it's susceptible, that it is susceptible to oxidative degradation.

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Those are the findings of fact.

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And I don't disagree that those are findings of fact, Your Honor, and they are subject to the clearly erroneous standard.

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But when you look at the record as a whole and you look at those references as a whole, the conclusion is that those references teach that there is a problem with oxidation and the solution to the problem is the addition of an antioxidant.

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So in LLALMAN, for instance, Your Honor, there's a specific statement that all drugs that are being tested in that reference, which includes RA7,

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which also includes ribostigmine by the analysis that we talked about before.

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RA7 should be tested with an antioxidant, and it gives the purpose, it says, to prevent oxidation.

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That is stated on the plain language of the allowment reference.

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And so there... Is this different from the sentence that ends to prevent oxidation, which doesn't refer specifically to RA7.

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It says all drugs work.

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were tested along with a saline solution to prevent oxidation.

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That is the sentence that I'm referring to.

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Right.

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But I thought that what the district court said, or at least what, that the response to that is it's perfectly clear that

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One, in fact, the featured one of the drugs needed the antioxidants.

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And then if you were doing an experiment, you really had to make all variables the same.

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And so you needed to use the, the antioxidant in the saline solution for everything, not necessarily because you need it for the other ones.

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And so there was missing from El Malam any.

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teaching that for this particular drug, you needed an antioxidant.

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Yes.

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I agree and disagree, Your Honor.

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Let me point out the sentence that is referred to, the sentence that precedes the sentence that you referred to, Your Honor, states the agents tested were a list of four drugs, including RA7.

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The next sentence says that all the drugs were made up in freshly sterile solution and had an antioxidant to prevent oxidation.

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Right.

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There are two possible explanations for having the antioxidant including in the solution for all of them.

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One is that some needed, and as long as some needed, you needed to equalize.

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And the other is all needed, and it doesn't really say all needed.

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And so why is it not within the realm of reasonable finding as a fact to say, as I guess the other side's expert did actually say,

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that would not teach somebody that this particular one, even the RA7, let alone their pristigmine needed.

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The only evidence in this entire case that you would not have, you would not be adding the antioxidant for purposes of preventing oxidation in all of those drugs was the testimony of plaintiff's experts.

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The plaintiff's expert clearly provided a gloss to this article that said that there is variability, there's a problem of oxidative stability with physostigmine.

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And for that reason, all of these drugs were going to be mixed in with an antioxidant.

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But there is absolutely nothing in this article that says that.

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That is a statement by the plaintiff's expert that is not supported in the record.

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And in fact, when you look at the entirety of the record, the entirety of the article,

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What plaintiff-expert argues for leads to contradictions and nonsensical statements in the allowment reference, which, in fact, the district court recognized in its opinion.

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And so, for instance, in order to accept the plaintiff-expert's position in this case, you would have to accept, as the district court did, that saline is a drug.

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And saline, the testimony at trial, was clear and unambiguous, that saline is salt in water.

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There is nothing in the article that indicates that saline is a drug.

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And in fact, in every section of this article, the statement is the drugs are things like RA7, not saline, but you would have to accept it.

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So these all seem like arguments to suggest the district court was clearly erroneous in its factual findings.

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But I think you're making a legal argument, too, but I can't quite figure out what it is.

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And you're right.

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With respect to LLALMAN, Your Honor, it is a clearly erroneous argument.

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On the part of the 807 patent, there is also a legal argument.

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And our legal argument is this, that the district court required more than the law requires from an obvious misinquiry, from an obvious misreference.

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with respect to that patent.

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Well, can you explain that?

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What does obviousness require?

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I mean, is this a motivation to combine issue, right?

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Yes.

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So what does KSR require, and what more do you think the district court improperly requires?

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Well, here's what the district court improperly requires.

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After stating that it saw reason in Watson's position below that the 807 patent disclosed a problem with oxidation, it went on to say, to point out

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elements that it thought cut against a finding of obviousness here.

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So it pointed out that there was a long laundry risk of compounds that were included in the 807 patent.

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That is not sufficient to defeat an obviousness claim.

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There are cases which we cite in our brief, like Allergan and Merck, that make clear that even if you have thousands or millions of compounds that are listed, that does not take away from the obviousness of the particular compound.

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In addition, the court- Doesn't even take away from it?

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Now, it doesn't take away from it.

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It may not be conclusive.

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Excuse me, I'm sorry.

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It may not be conclusive, but it surely takes away from it.

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Well, not in this instance, Your Honor, where RA7 was one of seven compounds that were called out as preferred compounds in this case.

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So you have RA7, which was a preferred compound, one of seven, not one of the millions.

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And you also have specific antioxidants that are called out as preferred in this case as well.

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But in addition, Your Honor, there were other things that the court required.

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It looked for an example in which there was something done to show oxidative degradation or to show the effects of a antioxidant on this compound.

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That's not required by the law.

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What's required is a suggestion, a motivation to combine.

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And there's no rigid requirement for what that needs to be.

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And by the mere fact that this reference is teaching the use of an antioxidant

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So is your position that because there's a prior art reference that already combines the drug and the antioxidant, that that's enough?

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That's enough, particularly in this case, Your Honor, where there's something more, which is the disclosure of the combination inherently teaches the problem that's involved.

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So when you teach a solution in the 807 pattern of using antioxidant, the reason you use an antioxidant is to

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is to deal with an oxidation problem.

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That's the problem.

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It wasn't clear that there was a problem with Reva stigmine.

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Isn't that the basis for the trial court's decision?

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It was not known to be susceptible to oxidative degradation.

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And our position, Judge, is that when you take the two references together, that's not true.

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That is not a fair reading of the record.

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But that's a factual conclusion, right?

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So that has to be clear error.

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Let's assume we don't find that actual conclusion clear error and that we agree that there's nothing in the prior art that shows the drug is susceptible to oxidation.

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Is that the end of the story for you then?

[00:11:47] Speaker 01:
No, it's not because of the legal problem with the 807 and the problem with the analysis of the 807 is the requirement of things like it can't be in a laundry list.

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It has to have an example.

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It has to have some showing of oxidative degradation, which is not a requirement of the art, of the law.

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The law requires that you use, you look at the art as a whole and you see whether there's a suggestion for this combination.

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And if there is, then assuming you meet the other elements.

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The problem here is there's a suggestion for the combination when required.

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So I'm having a hard time.

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That then leads to a factual question.

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Is it your position that

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that oxidation is a common problem.

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So when it suggests a drug with an antioxidant, that it's always obvious for a person to combine a drug with an antioxidant.

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I'm a little hesitant to say always, but certainly in this instance where we're... I think that's a problem because that seems to go a little too far then and it would seem to suggest that anytime somebody adds an antioxidant that that's not patentable.

[00:12:53] Speaker 01:
Well, it depends how antioxidant is disclosed, I would say.

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But antioxidant is a description of a type of compound that has a specific purpose.

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It's there to prevent oxidation.

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You could have an antioxidant, say, as absorbic acid, which is one of the antioxidants at issue here.

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It could have another purpose.

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But when it's specifically identified as having the purpose of an antioxidant, it teaches, just by disclosing that solution, it teaches the problem itself, which is that there's an oxidation problem with

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with rivet stigmata.

[00:13:25] Speaker 02:
Mr. Lombardi, you wanted to save some rebuttal time.

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You're into it.

[00:13:29] Speaker 01:
Yeah, I will save my time for rebuttal.

[00:13:32] Speaker 01:
Thank you, Your Honor.

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All right.

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Ms.

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Jacobson.

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May it please the Court.

[00:13:42] Speaker 00:
On this appeal, Watson seeks to manufacture an error of law by claiming that the District Court required an explicit motivation to combine the prior

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Watson is wrong.

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The district court did not hold that an implicit motivation was insufficient as a matter of law.

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Instead, the district court found as a factual matter that no motivation to combine existed.

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And specifically, the district court found that there was no motivation to add an antioxidant to river stigmine in the transdermal devices in GB 040.

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Of course, it has been disclosed that

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Similar compound, physostigmine, had an oxidative problem and antioxidants had been recommended with it and disclosed with it.

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This patent isn't a model of coming out of the blue.

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I mean, it's fairly close prior off here.

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The problem with physostigmine was quite different.

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What was known about physostignin was in an aqueous solution, it underwent hydrolysis, and then the hydrolytic degradant underwent oxidation.

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And that was the reason why an antioxidant was required in aqueous solution.

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Now, the known chemistry of carbamate compounds... Aqueous, but not saline?

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Aqueous, including saline compounds.

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That wasn't a distinction.

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But the known chemistry of carbamate compounds like RA7 and physostigmine indicated that by converting the drug from a monomethyl carbamate like physostigmine to a dialkyl carbamate like RA7 would have solved the hydrolysis problem.

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And so there was no suggestion in the art that ribostigmine or RA7 would undergo the same type of degradation, would have the same stability problem

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as phycostigny.

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So there was no suggestion that it required an antioxidant for the same reason as phycostigny.

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And that's why the disclosure said, if needed?

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That's certainly one reason.

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But as required in the 807 patent, it's important to note that that teaching is not specific to RA7.

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In fact, it's not specific to any of the 8 million plus compounds disclosed in the 807 patent.

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And in fact, when it comes to RE7, the 807 patent says that it has greater chemical stability, and it prepared RE7 without an antioxidant.

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And indeed, that's true of all of the references that discuss RE7 or ribostigni.

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Mr. Lombardi talked about seven compounds.

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Well, there's seven, or it's actually eight, but there is a limited number of preferred compounds of the invention in the 807 patent.

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That's correct.

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That's correct.

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But there's nothing to tie the preferred compounds of the invention from a therapeutic point to the disclosure of antioxidants on the other hand.

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And in fact, as I was saying, the opposite is true.

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Because those eight preferred compounds of the invention

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from a therapeutic standpoint, were the ones that the 807 patent expressly disclosed as having greater chemical stability than the prior art, and that they prepared without an antioxidant.

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Is there almost a teaching away, or is it simply lack of motivation to combine?

[00:17:23] Speaker 00:
This is a case where there was no motivation to combine.

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And the district court made express findings of fact that one,

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You're saying there's no motivation to combine the patch form of the drug with an antioxidant.

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But why is that the right question?

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Because the 807 patent certainly discloses RA7 with an antioxidant as needed.

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So why isn't RA7 already combined with an antioxidant in that reference?

[00:17:55] Speaker 00:
Well, the reason that the right question is whether the motivation would have been to combine

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rivastigmine with an antioxidant in a transdermal patch is because the starting point for Watson's obviousness analysis is the rivastigmine transdermal devices in GV040.

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And so the question is, would a person of ordinary skill in the art have been motivated to modify those formulations by adding an antioxidant?

[00:18:23] Speaker 04:
But if the 807 already taught that rivastigmine might need an antioxidant,

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then why doesn't that in itself suggest a motivation to combine the drug with an antioxidant?

[00:18:36] Speaker 00:
It doesn't suggest that their motivation existed because it was undisputed that degradation is formulation-specific.

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And the stability of a drug in a formulation cannot be predicted in advance, and instead testing is required.

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And indeed, by testing you...

[00:18:56] Speaker 04:
Sorry, does your legal argument lead to the conclusion that any time somebody adds an antioxidant to a previous formulation of a compound or some kind of method, that that is a patentable advancement?

[00:19:13] Speaker 00:
Well, in this case, it was a patentable advancement because the problem was not known or suggested in the firewall.

[00:19:19] Speaker 04:
OK, but hypothetically, suppose we have a drug that

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There may prior shows there's a compound that even like here, you could use it with an antioxidant, but it doesn't say it's subject to degradation or doesn't say it's required.

[00:19:37] Speaker 04:
It says it may be required.

[00:19:38] Speaker 04:
And then you come up using that drug in some kind of new delivery system and you add an antioxidant is every single instance where all you do is take something that's known in the art and add an antioxidant to it, a patentable improvement.

[00:19:53] Speaker 00:
Your Honor, I think that's a question of fact and it depends on the evidence in the case.

[00:19:58] Speaker 04:
And in this case, the problem was not known or suggested and the district court made that... So your view is any time somebody hasn't specifically found that a drug is subject to oxidation in a particular format, that adding an antioxidant is patentable.

[00:20:14] Speaker 00:
It would depend on the facts of the case and... Well, those are the facts.

[00:20:18] Speaker 04:
The facts are there's a finding that there's no

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teaching in the prior art that the specific formulation is subject to oxidation and you bound it in the antioxidant.

[00:20:31] Speaker 00:
Well then, I think, similar to the facts of this case, the conclusion would be that the invention is not obvious.

[00:20:37] Speaker 00:
And this court has already addressed the issue in, for example, Omeprazole and in Leo, where the court found that because the problem was not known or suggested in the prior art, there was no motivation to modify the prior art

[00:20:50] Speaker 00:
to address that stability problem.

[00:20:53] Speaker 04:
And indeed, just as in Imeprazole and in Leo, in this case... And by saying that the problem wasn't known in the prior art here, you're saying that nobody specifically said the drug was subject to oxidation, even though they said it may be used with an antioxidant as required.

[00:21:10] Speaker 00:
Well, the prior art doesn't say that it may be used with an antioxidant.

[00:21:13] Speaker 00:
The 807 pattern says that an antioxidant

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may be added to the 8 million plus compounds of the invention in sterile compositions for injection as required.

[00:21:25] Speaker 00:
And so that as required language indicates that an antioxidant may not be required.

[00:21:31] Speaker 00:
And indeed, when formulating the RA7 into compositions, the inventors of the 807 did not add an antioxidant to RA7.

[00:21:43] Speaker 00:
suggesting that in the case of RA7, the antioxidant was not required.

[00:21:48] Speaker 00:
And that's consistent with the prior art as a whole, where every reference that mentions RA7 and ribostigmine indicates that it has greater chemical stability and formulates it without an antioxidant.

[00:22:01] Speaker 02:
Now, which findings of fact of the district court do you think most strongly support your case that are not clearly erroneous?

[00:22:12] Speaker 00:
Well, the district court found that one, a person of ordinary skill would not have added an antioxidant unless one was required.

[00:22:21] Speaker 00:
That is, unless there was evidence.

[00:22:22] Speaker 02:
In other words, we don't do an unnecessary thing.

[00:22:25] Speaker 02:
We don't load up a formulation with something not necessary.

[00:22:29] Speaker 00:
Exactly, Your Honor, because as the district court recognized, there are many different types of degradation.

[00:22:35] Speaker 00:
And not all drugs undergo all types of degradation in all formulations.

[00:22:40] Speaker 02:
There can be hydrolysis as well as oxidation.

[00:22:43] Speaker 00:
Right.

[00:22:43] Speaker 00:
Erasmization, pyrolysis.

[00:22:46] Speaker 00:
There was a long list of different types of degradation that can occur.

[00:22:50] Speaker 00:
And so a person of ordinary skill in the art doesn't try to solve an unknown stability problem.

[00:22:56] Speaker 00:
Instead, they only set out to solve known stability problems.

[00:23:01] Speaker 00:
And then two, the district court found

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as a factual matter, that none of the prior art taught or reasonably suggested that rivastigmine undergoes oxidative degradation or requires an antioxidant in those transdermal devices in GV04L.

[00:23:18] Speaker 03:
Can I ask you, do you disagree with the district court's statement that the 807 patent does disclose the addition of an antioxidant to RA7?

[00:23:30] Speaker 00:
Well, the district court's opinion has to be read as a whole, and as the district court went on to discuss, the teaching is limited to sterile compositions for injection, and it is only as required.

[00:23:44] Speaker 00:
And as the district court also recognized, that teaching is not specific to RA7.

[00:23:49] Speaker 00:
It applies to the millions of compounds of the invention disclosed in the 807 patent.

[00:23:56] Speaker 00:
And so the district court's ultimate conclusion was based on the reading of the 807 patent as a whole.

[00:24:04] Speaker 00:
And that's legally the correct approach.

[00:24:14] Speaker 00:
And Your Honor, just to pick up on a couple of points raised by Mr. Lombardi, he alluded to cases such as Merck,

[00:24:25] Speaker 00:
What sets this case apart from Merck or from Perricot or other cases of that nature that Watson cites is the as-required language.

[00:24:34] Speaker 00:
You see, in those cases, the prior art required the claimed ingredient to be present in the prior art composition.

[00:24:42] Speaker 00:
And as such, the issue in those cases is whether it would have been obvious to select the claimed species of the ingredient from the genus disclosed in the prior art.

[00:24:53] Speaker 00:
That's not the issue here.

[00:24:56] Speaker 00:
Here, the issue is whether there would have been a motivation to combine the ingredients in the first place, and specifically whether there would have been a motivation to combine an antioxidant with rivastigmine in a transdermal device.

[00:25:13] Speaker 00:
And counsel also raised that the teaching of the solution suggested the problem.

[00:25:20] Speaker 00:
And I think he's alluding to the scientific plastic products case.

[00:25:25] Speaker 00:
And this case is also different from scientific plastic products.

[00:25:29] Speaker 00:
Because in that case, the leaking problem that was addressed by the patent at issue was suggested in the prior art because the prior art disclosed the claimed cartridge actually combined with an O-ring seal for the purposes of ensuring liquid tightness.

[00:25:48] Speaker 00:
And that was enough to suggest that the leaking problem actually existed with the claims cartridge.

[00:25:54] Speaker 00:
Here, the disclosure that antioxidants could be incorporated as required with the millions of compounds in the 807 patent in sterile compositions for injection would not have suggested to a person of ordinary skill in the art the oxidative degradation problem with RA7 or ribostigmine in a transdermal device.

[00:26:18] Speaker 00:
And likewise, the addition of an antioxidant to RA7 in elmalem was not sufficient to suggest to a person of ordinary skill that oxidative degradation existed as a problem with RA7 in the transdermal.

[00:26:34] Speaker 00:
Because a person of ordinary skill reading elmalem and the prior art as a whole, including the subsequent paper by the authors of elmalem in which they did not add an antioxidant

[00:26:47] Speaker 00:
to river stigmine would have indicated to a person of ordinary scale that the antioxidant was indeed added as a control and not to solve a known stability problem with RA7.

[00:27:00] Speaker 00:
And that wasn't the case in scientific plastic products.

[00:27:04] Speaker 00:
There was no other explanation for the O-ring seal than to ensure liquid tightness.

[00:27:10] Speaker 00:
And that's why the disclosure of the solution suggested

[00:27:14] Speaker 00:
suggested the existence of the problem in that case.

[00:27:19] Speaker 02:
Now, is only claim seven, at least in the 03-1 patent at issue, that's transdermal.

[00:27:26] Speaker 02:
Claim one is more generic to a pharmaceutical composition.

[00:27:31] Speaker 02:
I don't think that has a transdermal limitation.

[00:27:35] Speaker 00:
That's correct, Your Honor.

[00:27:37] Speaker 00:
The issue here is whether a person of ordinary skill in the art would have been motivated to modify the starting point of Watson's obviousness analysis, which is a transdermal device.

[00:27:49] Speaker 00:
And so the question is whether there was a motivation to modify a transdermal, not whether there was a question to modify any other formulation.

[00:27:59] Speaker 00:
But saying that, there was no indication that rivastigmine or RE7 underwent oxidative degradation in any formulation.

[00:28:08] Speaker 00:
Unless you have any more questions, I say I'm almost out of time.

[00:28:13] Speaker 02:
Thank you, Ms.

[00:28:14] Speaker 02:
Jacobson.

[00:28:14] Speaker 02:
I appreciate your argument.

[00:28:16] Speaker 02:
Mr. Lombardi has two and a half minutes of rebuttal time.

[00:28:20] Speaker 01:
Thank you, Your Honor.

[00:28:22] Speaker 01:
With respect to the 807 patent and the as required, both the court and plaintiffs at trial stated that the person of ordinary skill in the art would not have added an antioxidant unless required to do so.

[00:28:34] Speaker 01:
And Your Honor made reference to that.

[00:28:36] Speaker 01:
And I think your question about

[00:28:37] Speaker 01:
not loading up a compound with something that's not necessary.

[00:28:41] Speaker 01:
That's the context in which the 807 patent needs to be read, because they wouldn't be talking about an antioxidant being used as required unless there was a need for an antioxidant to be used.

[00:28:54] Speaker 01:
And when they say as required, all that means, Your Honor, is that it's required not in every situation.

[00:29:00] Speaker 01:
You have to determine the particular situation.

[00:29:02] Speaker 02:
In other words, maybe.

[00:29:04] Speaker 01:
It depends on the particular situation, Your Honor.

[00:29:07] Speaker 01:
And it's a recognition and a suggestion, and a suggestion is required.

[00:29:11] Speaker 01:
And if there's any doubt about the 807 patent, it's cleared up by L. Almond, which specifically states that RA7 will be used with an antioxidant.

[00:29:21] Speaker 01:
For what reason?

[00:29:22] Speaker 01:
It specifically says to prevent oxidation.

[00:29:25] Speaker 01:
And when you put these two references together, you put the two reference together, there is a very clear teaching by the prior art on the face of the prior art.

[00:29:35] Speaker 01:
that there is a need for an antioxidant to address the problem of oxidation.

[00:29:40] Speaker 01:
And that is, in sum, the reason that we say that there is clear error here.

[00:29:46] Speaker 01:
And a note about clear error, obviously, Your Honor, we don't deny that there was an expert on the other side that the district court found to be credible.

[00:29:55] Speaker 01:
But the credibility finding here was very limited.

[00:29:58] Speaker 01:
And I suggest a very limited use for the court in resolving this issue.

[00:30:03] Speaker 01:
A district court can't hide behind a finding of credibility to avoid a clear error review.

[00:30:08] Speaker 01:
And ultimately, this case comes down to whether what the district court found is actually supported in the references here.

[00:30:15] Speaker 01:
And the district court's findings here are not supported by the references.

[00:30:20] Speaker 01:
They are reliant on and without really any explanation and by the concession of the district court, no scientific explanation.

[00:30:29] Speaker 01:
of the testimony of the expert witness.

[00:30:34] Speaker 01:
So what you are left with in this case, Your Honors, is a situation where there is a clear disclosure of the use of rivistigmin and an antioxidant.

[00:30:45] Speaker 01:
And the only issue is, is there something lacking in the way of motivation?

[00:30:50] Speaker 01:
But the question of motivation is specifically answered by the use of an antioxidant in the 807 patent

[00:30:56] Speaker 01:
and is specifically and expressly stated in El Alman when it says that the use of the antioxidant is for purposes of preventing oxidation.

[00:31:06] Speaker 02:
Thank you very much.