[00:00:00] Speaker 00:
1918, Beckton Dickinson and Company against Baxter International.

[00:00:19] Speaker 00:
Mr. Breen, whenever you're ready.

[00:00:20] Speaker 00:
I think everybody is set except for your colleagues.

[00:00:29] Speaker 00:
He settled enough.

[00:00:30] Speaker 04:
Yes.

[00:00:31] Speaker 04:
Thank you very much, your honor, and may it please the court.

[00:00:34] Speaker 04:
The methods claimed in the 809 patented issue here are not fundamental building blocks of science and technology.

[00:00:40] Speaker 04:
They are not merely computerizing some business method or financial process, nor are they merely automating or somehow accelerating any existing known method.

[00:00:49] Speaker 04:
Rather, these methods claim the use of a new infrastructure for practicing pharmacy.

[00:00:55] Speaker 04:
What's new?

[00:00:56] Speaker 04:
What's new?

[00:00:56] Speaker 04:
The arrangement of the hardware and the way in which it is used.

[00:00:59] Speaker 03:
But there's no new hardware, right?

[00:01:01] Speaker 03:
You're using a computer over some kind of internet or computer network with a camera.

[00:01:06] Speaker 04:
Well, the camera is not new.

[00:01:08] Speaker 04:
The computers, the workstations themselves are not new.

[00:01:10] Speaker 04:
And we don't presume to have invented the internet.

[00:01:13] Speaker 04:
There is some custom verification software in there.

[00:01:15] Speaker 04:
But we do submit that we... But that's not what you're claiming.

[00:01:17] Speaker 04:
What we're claiming is a specific arrangement of that hardware with verification software

[00:01:22] Speaker 04:
that's notably distributed and quite specific in that the verification software is hosted at the institutional pharmacy workstations accessible from via a website in claim one and via other means and other claims from a remote site and a workstation there.

[00:01:37] Speaker 04:
When we submit, we should not have to reinvent a computer in order to have a usage of a computer that's somehow patent eligible.

[00:01:44] Speaker 03:
I think that's been clear since Diamond vs. Deere.

[00:01:46] Speaker 03:
Well, it's also been pretty clear since Alice and other more recent cases that if you

[00:01:51] Speaker 03:
have a business method and you automate it on a computer, even if it's a good automation, doesn't make it patent-eligible.

[00:01:57] Speaker 03:
Why isn't this just a business method for looking for a remote verification of pharmacists?

[00:02:06] Speaker 04:
Well, the business method case law of Post-Alice have found those types of claims to be patent-eligible essentially because they are merely automating or accelerating via the use of standard computer technology.

[00:02:19] Speaker 04:
practices that were known routine and conventional in the field.

[00:02:24] Speaker 04:
This is not such a case.

[00:02:25] Speaker 04:
We have overwhelming evidence that these practices were not known at all.

[00:02:30] Speaker 03:
The practice of having a pharmacist certify the work of a non-pharmacist wasn't a known business method?

[00:02:37] Speaker 03:
I mean, it sounds like it was not only known, but it was required by state law in most jurisdictions.

[00:02:43] Speaker 04:
Well, I would disagree with most jurisdictions.

[00:02:45] Speaker 04:
We only have evidence of the Texas Code here.

[00:02:47] Speaker 04:
But as far as

[00:02:48] Speaker 04:
what was required in that regulation, it was direct supervision and verification, which from the declaration of Dr. Anderson, the president of the Texas Pharmacy Board, he explains that is on-site, in-person direct supervision.

[00:03:05] Speaker 04:
The idea of remotely supervising that process when the pharmacist is unavailable is a new concept.

[00:03:12] Speaker 04:
It was deemed innovative by the Texas Pharmacy Board, caused a rule change as a result of that.

[00:03:17] Speaker 04:
So this is not simply taking the idea of supervision and verification and automating it.

[00:03:22] Speaker 04:
This is creating an entirely new infrastructure that hadn't been done before.

[00:03:27] Speaker 03:
You keep saying entirely new infrastructure, but the infrastructure you're talking about is completely conventional pieces.

[00:03:35] Speaker 03:
It's a camera, it's the internet, it's a computer.

[00:03:39] Speaker 04:
Well, again, we do also have custom verification software, but your honor is referring to these elements

[00:03:43] Speaker 03:
individually well let let me ask you that you keep saying custom verification software too is that what your claims are directed towards custom verification software not entirely that is one significant element point that to me with your claims software may it seems to be patent eligible if it's a specific improvement in computer technology

[00:04:10] Speaker 03:
But I didn't see that that's what you're claiming.

[00:04:12] Speaker 03:
It seems what you're claiming is simply this remote verification system.

[00:04:19] Speaker 04:
Well, we're claiming the system as a whole.

[00:04:21] Speaker 04:
And again, we don't purport that we invented the individual components.

[00:04:24] Speaker 04:
But the ordered combination and usage of these elements as a range, there is nothing in this record to suggest that that ordered combination, that series of steps, reflects a practice that was known at all.

[00:04:36] Speaker 04:
Even the Texas Code doesn't suggest that.

[00:04:38] Speaker 04:
but certainly doesn't meet the level under Alice Prong, too, of being a routine, well-known conventional practice.

[00:04:45] Speaker 04:
And really, I think that's one of the most fundamental problems we have with the judgment here.

[00:04:49] Speaker 04:
The procedural posture of this case was resolved on summary judgment.

[00:04:58] Speaker 04:
The only evidence offered by Baxter to show what was known in this field, what was done in this field, is the Texas Code.

[00:05:06] Speaker 04:
At best, the Texas Code shows that in 2001, for the first time, certain limited telepharmacy activities were permitted.

[00:05:16] Speaker 04:
Those limited telepharmacy activities did.

[00:05:17] Speaker 03:
Can I, before you go on, because it doesn't seem like you're taking me up on my invitation to show where you're claiming software, can I just assume you're not, don't have claims limited specifically to this new verification software that you're talking about?

[00:05:32] Speaker 03:
You're claiming the whole ordered method.

[00:05:36] Speaker 03:
Is that right?

[00:05:37] Speaker 04:
We are, but the software is an integral part of that, because we claim the verifications.

[00:05:40] Speaker 03:
Are there any claims that are specifically directed only to the software?

[00:05:44] Speaker 04:
Only to the software?

[00:05:45] Speaker 04:
No.

[00:05:46] Speaker 04:
The software is only ever claimed in the context of this distributed network system between the institutional pharmacy and the remote.

[00:05:53] Speaker 00:
And I don't remember.

[00:05:55] Speaker 00:
Was there showing in your brief or in the specification or in the district court about the content of the verification software?

[00:06:05] Speaker 00:
element of the claim?

[00:06:08] Speaker 00:
The content in terms of... What is this verification software doing?

[00:06:14] Speaker 00:
Well, the verification software does a number of things... I know it's verifying, but I need something a little... the next level of granularity.

[00:06:20] Speaker 04:
Well, I mean, the next level of granularity is, essentially, if you look at claim one, for example, all of the steps after the implementing verification software clause are facilitated by that verification software.

[00:06:33] Speaker 04:
And the verification software has noted that it's via one or more computers at the institutional pharmacy.

[00:06:38] Speaker 04:
So we have sort of a hosted software system there that is facilitating the rest of the entire method.

[00:06:46] Speaker 04:
So the transmission of the images, the storing of the images on the website, the ability for the remote pharmacist to access those images, all of those, and then eventually to verify and send the indication.

[00:06:58] Speaker 01:
Mr. Briebe, is there anything new about this software?

[00:07:03] Speaker 01:
I see what it's doing, but is that, I mean, hasn't there been software that's been doing that in the past?

[00:07:11] Speaker 01:
Maybe in a different setting, but conveying these items.

[00:07:16] Speaker 04:
Well, there's no evidence in the record of any software that was doing all of these particular steps.

[00:07:21] Speaker 04:
Again, the only evidence that we have offered by Baxter, and again, this is summary judgment, Baxter's burden.

[00:07:26] Speaker 04:
The only evidence that we have is what the 2001 code contemplated, which didn't include

[00:07:32] Speaker 04:
All of the steps here weren't directed to the context and the specific types of infrastructure to capture the information about sterile compounding, didn't involve the indication from the pharmacist and the corresponding indication at the institutional pharmacy.

[00:07:48] Speaker 04:
So I wouldn't say that on this record there's anything to show that this software is somehow old or conventional.

[00:07:54] Speaker 00:
Can you point to something in the specification that describes the content

[00:08:01] Speaker 00:
anything about the content of the verification software?

[00:08:05] Speaker 04:
Sure, Your Honor.

[00:08:05] Speaker 04:
There are a handful of places.

[00:08:07] Speaker 04:
First, column nine, lines 38 through 43.

[00:08:11] Speaker 04:
What page?

[00:08:14] Speaker 04:
What page of the record?

[00:08:16] Speaker 00:
839.

[00:08:18] Speaker 04:
I believe that's right, Your Honor.

[00:08:19] Speaker 04:
I'm looking at it.

[00:08:20] Speaker 00:
Oh, you're looking at it.

[00:08:21] Speaker 04:
Okay, 839.

[00:08:24] Speaker 04:
which reads, the institutional pharmacy site and the remote pharmacist site may be connected over the internet via a custom protocol for viewing remote pharmacy work, such as may be implemented by remote verification software.

[00:08:35] Speaker 04:
So that's one example.

[00:08:37] Speaker 04:
A second example occurs, I believe it's a few pages later, at column 14, line 66, through column 15, line 5.

[00:08:50] Speaker 04:
We have a description.

[00:08:51] Speaker 00:
It's just a column what?

[00:08:52] Speaker 00:
Sorry.

[00:08:53] Speaker 04:
Column 14, line 66, through the first five lines of column 15, which reads, quote, custom software, such as remote verification software configured specifically for communication and data exchange as part of remote verification of pharmacy functions may provide a user interface for uploading, downloading, and or reviewing images stored.

[00:09:12] Speaker 00:
Right, but so far the two things that you've pointed out sure read to me as though it's pointing to something old.

[00:09:19] Speaker 00:
It's a reference to used verification software.

[00:09:22] Speaker 00:
The skilled reader would know what that is.

[00:09:24] Speaker 00:
It must be in existence.

[00:09:26] Speaker 00:
We haven't created something new, some new piece of software yet.

[00:09:31] Speaker 04:
Well, I think the specification refers to it as custom verification software because there was no specific software that you could buy off the shelf that would facilitate this specific type of transaction of information and verifications.

[00:09:44] Speaker 04:
It was something that would have to be implemented so that the system could function

[00:09:47] Speaker 04:
as the claims require.

[00:09:49] Speaker 01:
But you directed our attention to the bottom of column 14, the top of column 15.

[00:09:56] Speaker 01:
It says, remote verification software configured specifically for communication and data exchange as part of remote verification of pharmacy functions, et cetera.

[00:10:08] Speaker 01:
And sort of picking up maybe on what Judge Serrano was saying, what is new about that?

[00:10:17] Speaker 01:
software in the familiar communication internet scenario?

[00:10:23] Speaker 04:
Well, I guess if we're taking each thing that this software can accomplish, transmitting information, we're not purporting to have invented transmitting information.

[00:10:32] Speaker 04:
We're not purporting to have invented receiving information.

[00:10:36] Speaker 04:
But the verification software does a lot of steps altogether that are a custom protocol so that these actions can all be captured and verified and indicated in the way claimed.

[00:10:46] Speaker 01:
But to get over the, I guess we're talking about the second prong of Alice, the inventive concept question, don't we have to do more than what is described and what you've been talking about?

[00:10:59] Speaker 04:
Well, yes.

[00:10:59] Speaker 04:
And I'm in my rebuttal time, so I'd like to be brief about this.

[00:11:02] Speaker 04:
But I think what has to be done that's more is to essentially direct the claims to something other than a purported abstract idea.

[00:11:10] Speaker 04:
Here, the district court concluded that supervision and verification was the direction of the claims, or the focus of the claims.

[00:11:16] Speaker 04:
What we have here is a method.

[00:11:17] Speaker 03:
Well, isn't that pretty reasonable?

[00:11:19] Speaker 03:
Considering in claim one, it says a method for remote supervision and verification of pharmacy functions.

[00:11:25] Speaker 04:
Well, but the remote aspect is really the crux of the matter.

[00:11:28] Speaker 04:
That is the entire purpose of this invention.

[00:11:30] Speaker 04:
It's what makes it a solution to a problem.

[00:11:32] Speaker 04:
It's why the Texas board said it was innovative.

[00:11:35] Speaker 03:
And when we're looking at individual elements, as the district court did... You can have a lot of computerization of real-world things that are innovative and useful and can make a lot of money that still aren't patent eligible because they're computerizing a business method.

[00:11:50] Speaker 04:
Well, but again, Your Honor, I think the computerizing of a business method, the idea of something like that failing under prong, too, has been because the practice itself was just a routine, well-known conventional function.

[00:12:01] Speaker 04:
Looking at the ordered combination of all of these steps together, it's very clear on this record that it had never been done, that this was the first time that this inventor essentially created this infrastructure for it to be done.

[00:12:15] Speaker 04:
And between the evidence in the code itself, the evidence from Dr. Anderson, at a bare, bare minimum, with this factual question of what was well-known, what was conventional, what was routine, we think the district court could not possibly properly grant summary judgment.

[00:12:28] Speaker 01:
Are you saying, Mr. Green, that what takes this out of the abstract area, the first prong of the Alice test, is that you would say, yes, review and verification is an abstract known concept.

[00:12:39] Speaker 01:
But what makes it not abstract here is that it's being applied in this

[00:12:45] Speaker 01:
pharmacist review situation.

[00:12:49] Speaker 04:
Well, it's more than that, Your Honor.

[00:12:51] Speaker 04:
These claims reflect a very specific, to the extent they're directed to supervision and verification, this is a very specific application of that idea and an implementation of it to solve a specific problem.

[00:13:02] Speaker 04:
It's not just that it's limited to sterile compounding.

[00:13:05] Speaker 04:
It's limited to reviewing non-pharmacist work of sterile compounding in an institution of pharmacy.

[00:13:11] Speaker 03:
But what kind of problem is it solving?

[00:13:13] Speaker 04:
It's solving the problem that these types of sterile compounded medications need to be available to patients when they're necessary.

[00:13:20] Speaker 04:
Pharmacists are required to supervise that process and verify the drug, but pharmacists are not always going to be available.

[00:13:25] Speaker 03:
Why are pharmacists required to supervise that process?

[00:13:28] Speaker 04:
Well, there are regulations in place.

[00:13:30] Speaker 04:
So it's solving the legal problem.

[00:13:33] Speaker 04:
It is solving, well, it's solving a legal problem in the sense that the code requires it.

[00:13:36] Speaker 04:
But there is also, there's a difference between the process of just sterile compounding and the process of making a sterile compounded drug that's acceptable for being given to a patient.

[00:13:46] Speaker 04:
And the result of this process is not just a drug, but a verified drug that's appropriate to be placed into pharmacy stock.

[00:13:52] Speaker 04:
And I claim to even mention that that is the purpose of this method.

[00:13:56] Speaker 04:
And well into my rebuttal time, if there are no questions, I'd like to reserve some of that.

[00:14:01] Speaker 04:
Thank you.

[00:14:01] Speaker 04:
Thank you, Your Honor.

[00:14:16] Speaker 02:
Mr. Abernathy.

[00:14:18] Speaker 02:
Yes, Your Honor.

[00:14:19] Speaker 02:
May it please the court.

[00:14:21] Speaker 02:
This is a simple case presenting a straightforward application of ALICE.

[00:14:26] Speaker 02:
And the element of verification software, I think, proves the point.

[00:14:31] Speaker 02:
The specification in column 9, line 46, specifically refers to off-the-shelf software that can be used to perform the claim functions.

[00:14:44] Speaker 02:
There is nothing in the claims or in the specification indicating that the inventor came up with a new form of software to perform any type of pharmacy functions.

[00:14:57] Speaker 00:
So you, I think, were quoting or paraphrasing column nine, is it?

[00:15:03] Speaker 00:
Line what?

[00:15:04] Speaker 02:
I think it's line 46, Your Honor.

[00:15:08] Speaker 02:
Line 45, to be more specific.

[00:15:11] Speaker 00:
Is that the same?

[00:15:12] Speaker 00:
It says off the shelf video conferencing and or collaboration software.

[00:15:16] Speaker 00:
Is that the same thing as verification software?

[00:15:19] Speaker 02:
Correct, Your Honor.

[00:15:20] Speaker 02:
It says so in column nine, line 28 through 30.

[00:15:28] Speaker 02:
In some embodiments, the pharmacist may remotely verify pharmacy work via a real time collaboration tool.

[00:15:36] Speaker 02:
And then it talks about that tool being the software.

[00:15:39] Speaker 02:
Moreover, Your Honor, in the district court, when the lower court asked what was it that the software did that was inventive, counsel for BD said, the software in this case facilitates the review of the images as they are transmitted.

[00:15:59] Speaker 02:
In other words, the software transmits data, in this case, digital data, and that, Your Honor, is not new or inventive, certainly not transformative.

[00:16:10] Speaker 00:
Moreover, at the Clank construction... Just to try to be concrete about one of the things that, for example, verification software doesn't do.

[00:16:21] Speaker 00:
It's not performing any mathematical algorithms or checking any chemical or pharmaceutical resource to confirm that the things that were captured in the images and sent

[00:16:40] Speaker 00:
meet some sort of proper standards.

[00:16:43] Speaker 00:
Correct.

[00:16:43] Speaker 00:
There's no indication in the patent that it's doing that.

[00:16:47] Speaker 02:
Those functions are nowhere described in the claims or the specification.

[00:16:52] Speaker 03:
So again, I think what the software does based on the claims is... So what if you hypothetically had software that you had a specific kind of table set up where the software could determine how much of a certain ingredient, how much of a certain

[00:17:10] Speaker 03:
thing you took out or how many pills or something like that.

[00:17:13] Speaker 03:
And it independently, apart from the video stream, would let the pharmacist know that they're putting these pills together or making proper compositions.

[00:17:24] Speaker 03:
And it describes specifically the software will weigh the amount or measure the liquid amount and go through and verify that all the proper measurement steps and stuff is taken.

[00:17:38] Speaker 03:
Would that software be patent eligible?

[00:17:40] Speaker 02:
Under that, hypothetically, honor, I think, depending on how the claim was presented and the support and specification, it sounds like it would be, but that's not found in the specification or the claims.

[00:17:53] Speaker 02:
At the district court during claim construction, PD argued that the algorithm for the software was found in the claims themselves, referring to claim one.

[00:18:06] Speaker 02:
The software functions in claim one essentially

[00:18:09] Speaker 02:
relate to transmitting a picture and then transmitting data of verification.

[00:18:19] Speaker 02:
That's the algorithm.

[00:18:20] Speaker 02:
That's what they said the software does.

[00:18:23] Speaker 02:
They also said the software was simple and not complex or not complex and straightforward.

[00:18:30] Speaker 02:
But there's nothing in the claim that shows that any new software was invented as opposed to simply software

[00:18:38] Speaker 02:
that transmits data.

[00:18:40] Speaker 02:
Now, council referred to the customized software, but the customized software, disclose for instance in column nine, simply transmits data.

[00:18:51] Speaker 02:
It may be customized, but it doesn't do anything new or innovative.

[00:18:57] Speaker 00:
In what way could it be customized?

[00:19:00] Speaker 00:
What do you understand?

[00:19:02] Speaker 00:
You just made a distinction, so you must understand something about the term customized.

[00:19:06] Speaker 00:
What's in your mind about that?

[00:19:09] Speaker 02:
We should probably look at what's in the specification, Your Honor.

[00:19:11] Speaker 02:
So the specification in that column, in that paragraph around line 45, 46, refers to off-the-shelf software and a customized interface relating to the software.

[00:19:25] Speaker 02:
The specification does not explain what that means.

[00:19:28] Speaker 02:
It does not describe any additional functionality that that software does.

[00:19:34] Speaker 02:
It simply says you can have off-the-shelf software,

[00:19:37] Speaker 02:
and custom software.

[00:19:39] Speaker 02:
But interestingly, in column 9, the functions are the same.

[00:19:45] Speaker 02:
The software transmits data.

[00:19:48] Speaker 02:
The data is either digital data, a picture or video, or some sort of verification data that the pharmacist had in fact approved the process.

[00:19:59] Speaker 02:
But there is no improvement on the software.

[00:20:05] Speaker 02:
The fact that the software is custom or customized takes this nowhere in terms of Alice.

[00:20:16] Speaker 02:
So, Your Honors, the bottom line in this case is, in the background of the invention, the patentee indicated that supervision and verification of pharmacy functions, including sterile compounding, were required and long required.

[00:20:36] Speaker 02:
The remote aspect is implemented through, as the specification says, off-the-shelf computers, off-the-shelf computer networks, and off-the-shelf conventional software, all performing their expected functions.

[00:20:55] Speaker 02:
This is a classic case where Alice would apply.

[00:20:59] Speaker 02:
Your Honor, if you have no other questions, that's my presentation.

[00:21:03] Speaker 00:
Thank you.

[00:21:04] Speaker 02:
Thank you, Your Honor.

[00:21:14] Speaker 00:
I'm going to take three minutes for rebuttal.

[00:21:17] Speaker 00:
Thank you very much, Your Honor.

[00:21:19] Speaker 04:
The first point, Mr. Abernathy had said that column nine indicates that all of this verification software is off the shelf.

[00:21:25] Speaker 04:
As we pointed out in the gray brief on page 16, that reference to off-the-shelf software refers to video conferencing and or collaboration software.

[00:21:33] Speaker 04:
That is referenced very separately and apart from what's described elsewhere in the specification as the custom verification software for facilitating other of the claimed functions.

[00:21:44] Speaker 04:
And overall, Mr. Rabinati focused on, like the district court did, individual steps, which is only one part of Alice step two.

[00:21:52] Speaker 04:
The ordered combination of all of this together is a process that was not done in pharmacy.

[00:21:59] Speaker 04:
It was actually not done.

[00:22:00] Speaker 04:
There's nothing in the record that this kind of remote supervision and verification was done in any other field.

[00:22:05] Speaker 04:
There are some examples of lawyers need to be supervising their subordinates.

[00:22:09] Speaker 04:
Teachers need to be supervised.

[00:22:11] Speaker 04:
and so forth, none of that shows any remote supervision or verification of any kind.

[00:22:16] Speaker 04:
So on this record, there really is a dearth of evidence on the part of Baxter, despite it being its burden.

[00:22:23] Speaker 04:
And furthermore, as I mentioned before, the 2001 code was the first time that certain limited non-sterile compounding functions were even permitted in that state.

[00:22:31] Speaker 04:
But let's take a step back and look at what the quality of this evidence is.

[00:22:35] Speaker 04:
We are talking about one statute from one state

[00:22:39] Speaker 04:
only a few years before this application was filed.

[00:22:43] Speaker 04:
Now that one statute doesn't even teach or suggest or indicate what is in these claims, but even if it did, that cannot rise to the level of showing a well-known routine and understood practice.

[00:22:57] Speaker 04:
When the courts have considered what is a well-known routine understood, we're looking for something

[00:23:03] Speaker 04:
some sort of proof that it's been done for a long time, some sort of proof from an authoritative source of what's been done in a widespread way.

[00:23:10] Speaker 04:
Here, the 2001 code shows a few limited telepharmacy activities that have nothing to do with the actual process of sterile compounding, but only looking at the finished drug and seeing if it's the right medication being handed out to the patient.

[00:23:23] Speaker 04:
That's a far cry from what these claims cover.

[00:23:26] Speaker 04:
And again, on this posture, the district court was supposed to give Beckton Dickinson

[00:23:31] Speaker 04:
the benefit of viewing all the evidence in the light most favorable to Beckton Dickinson.

[00:23:36] Speaker 04:
On that factual question, what was well known, what was routine, the ordered combination of all of these steps together, of all the components put together, of all the verification software does, of all the human interaction on both sides with this system, that was not shown to be conventional.

[00:23:52] Speaker 04:
It was Baxter's burden to show it, and the district court was supposed to credit our evidence with any benefits of the doubt.

[00:23:58] Speaker 04:
At a bare minimum,

[00:23:59] Speaker 04:
We ask that this court would remand the case so that these factual issues of dimensionality can be resolved by a jury.

[00:24:09] Speaker 04:
If there are no further questions, I'll yield the rest of my time.

[00:24:12] Speaker 00:
Thank you.

[00:24:13] Speaker 04:
Thank you, Your Honor.

[00:24:16] Speaker 00:
And the case is submitted.