[00:00:00] Speaker 03: our fourth case, which is number 161284, health and health care versus T with pharmaceuticals. [00:00:09] Speaker 03: And I think our inclination, unless Judge Mayer has a different view, is we'd like to hear from the government, Mr. Havenman, before Mr. O'Malley, rather than the other way around. [00:00:24] Speaker 03: So why don't we start with Mr. Lombardi. [00:00:38] Speaker 02: Thank you, Your Honor. [00:00:39] Speaker 02: May it please the Court? [00:00:40] Speaker 02: The District Court erred in its consideration of the on-sale bar in this case, and I'd like to start by addressing two issues. [00:00:48] Speaker 02: First, the ready for patenting issue, which I hope to address briefly, where the District Court failed to consider one of the alternative means of establishing ready for patenting. [00:00:59] Speaker 02: And then the AIA issue, where the District Court erroneously eliminated decades' worth of law related to the on-sale bar. [00:01:08] Speaker 02: by giving meaning to a clause that was put at the end of the section that contained the relevant language. [00:01:16] Speaker 01: On your first point, if we agreed with you that there is the other prong of path that the court just didn't consider, because there are underlying factual issues, shouldn't we have to remand for that determination? [00:01:29] Speaker 02: You certainly could, Your Honor, but I don't believe that that's necessary in this case for this reason. [00:01:34] Speaker 02: The facts that underlie the findings related to ready for patenting are admitted by the other side are clear. [00:01:43] Speaker 02: It's just a matter of applying the law to those facts. [00:01:46] Speaker 02: And our position is that the application of the law to those facts is clear under the facts of this case where the ready for patenting finding demanded by the district judge was well beyond anything that this court has ever required for an enablement showing. [00:02:04] Speaker 02: So in this case where my opponent's own clients admitted from the witness stand that there was efficacy shown at the time of the phase two testing and at the time of the phase three testing. [00:02:19] Speaker 02: And they actually had results in the phase three testing that showed that this drug worked for its intended purpose [00:02:27] Speaker 02: That is sufficient by a long shot to get over any standard of enablement that's been established in this court. [00:02:33] Speaker 02: So because those facts are admitted, Your Honor, yes, this court can make a decision based on the record that's before it. [00:02:41] Speaker 03: So there's sort of a ripening theory here that the offer for sale [00:02:51] Speaker 03: took place in April, but the facts that are necessary to determine enablement or reduction to practice took place later. [00:03:00] Speaker 03: And I guess both sides agree that treating the offer to sell as ripening, if it was an offer to sell, as ripening into a bar can take account of later events that happen after the actual contract, right? [00:03:19] Speaker 02: Yes, both parties agree on that, Your Honor. [00:03:21] Speaker 02: And the fact is that in this case, there are events that we say satisfy the ready for patenting showing that were before the actual sale took place. [00:03:30] Speaker 02: But we do argue all of the actions, including actions after the sale actually took place, do count. [00:03:39] Speaker 02: And that is not disputed by the parties in this case. [00:03:43] Speaker 02: So the lead argument that my opponents make on this issue is waiver. [00:03:50] Speaker 02: Your Honor. [00:03:51] Speaker 02: There simply was no waiver. [00:03:54] Speaker 02: In the closing argument at A26462, which is page 37 of the closing argument, the point was made to the court that there were two alternative ways to prove ready for patenting. [00:04:08] Speaker 02: The court actually asked confirming questions. [00:04:11] Speaker 02: The court's questions were confirmed. [00:04:13] Speaker 02: And then the assertion was made that that had been shown. [00:04:19] Speaker 02: We do not have a closing brief to cite for you, Your Honor, because the district court didn't permit briefing at the end of the case. [00:04:26] Speaker 02: So the closing argument was the last opportunity to address the issue. [00:04:30] Speaker 02: And it was clearly addressed there, as it was in the pretrial briefs, as it was in the testimony of our experts. [00:04:36] Speaker 02: And so there is no possibility of waiver in this case. [00:04:40] Speaker 02: And for that reason alone, the ready for patenting alternative was wrongly decided by the district court. [00:04:49] Speaker 03: Could we turn to the question of whether this was a public offer for sale? [00:04:55] Speaker 03: I mean, there were various amicus briefs. [00:04:58] Speaker 03: The government acts as though this was a secret sale. [00:05:01] Speaker 03: But it really wasn't, in fact, a secret sale. [00:05:04] Speaker 03: There were press releases that were issued when this contract was entered into. [00:05:10] Speaker 03: And they described the active ingredient. [00:05:13] Speaker 03: They had described what it was designed to do. [00:05:16] Speaker 03: The only thing that was missing, I guess, in the public [00:05:19] Speaker 03: releases was the dosage formulation of .25, right? [00:05:25] Speaker 02: Yeah, that's exactly right, Your Honor. [00:05:27] Speaker 02: And Your Honor points to exactly what's in the record. [00:05:30] Speaker 02: There were press releases that announced this sale. [00:05:33] Speaker 02: The only thing that wasn't described publicly was the details of the formulation. [00:05:39] Speaker 03: Were the details of the formulation disclosed in the Phase 3 trials? [00:05:44] Speaker 02: They were [00:05:45] Speaker 02: They were disclosed, obviously, to the people who were conducting the Phase III trials, Your Honor, if that's your question. [00:05:52] Speaker 03: And to the patients in the trials? [00:05:56] Speaker 02: Your Honor, I don't believe that there is anything in the record on whether the patients were familiar with the, or provided the information about the formulation. [00:06:05] Speaker 03: Or the people who are administering the trials subject to an obligation of secrecy? [00:06:11] Speaker 02: Yes, they were, Your Honor. [00:06:12] Speaker 02: So there was no disclosure [00:06:14] Speaker 02: in that sense during the trials. [00:06:16] Speaker 02: But the point about the public nature of the disclosures in this case is that this court and medicines company went through a careful analysis of what's important about the on-sale bar. [00:06:31] Speaker 02: And what's important is that commercial marketing not start, that the activity of commercial marketing not start in advance of filing for a patent. [00:06:40] Speaker 02: That was made very clear through the review of the precedent in this case and through what the medicines company case actually decided. [00:06:48] Speaker 01: That clearly- But that was a pre-AIA case. [00:06:50] Speaker 01: So if, in fact, there is some public component to this, the question is, what was publicly disclosed? [00:06:57] Speaker 01: And the critical piece of the public component has to be the formulation, right? [00:07:03] Speaker 02: Well, that is the invention in this case. [00:07:05] Speaker 02: There's no question. [00:07:06] Speaker 02: But what I'm speaking to, Your Honor, is [00:07:09] Speaker 02: the statement in the medicines company opinion that confidentiality is a point to be considered. [00:07:15] Speaker 02: And if it's a point to be considered, then the ranges of confidentiality are relevant as well. [00:07:20] Speaker 02: And here, there's no argument, I concede, that the actual formulation was not disclosed. [00:07:26] Speaker 02: But as Judge Dyke points out, there was publicity surrounding this formulation, this testing that was being done, this contract that was out there. [00:07:38] Speaker 02: And the significance of that, Your Honor, is they are trying to benefit commercially by having a press release, by announcing the fact that they have this agreement in place with MGI to sell the product. [00:07:52] Speaker 02: They have that out there. [00:07:53] Speaker 02: Now, in the overall scheme of things, what does that tell us? [00:07:56] Speaker 02: That tells us that the confidentiality here of the formulation itself is of limited help to my opponents. [00:08:06] Speaker 02: So Your Honor, let me with that turn to the AIA and what the AIA does to the on sale bar. [00:08:15] Speaker 02: The real issue here is, does the otherwise available to the public clause change the meaning of on sale that has been established in this court [00:08:26] Speaker 02: over decades, literally decades, or is a district court correct that the addition of the otherwise available clause at the end of 102A changes the law of on-sale bar? [00:08:40] Speaker 02: And our position is clearly it does not. [00:08:43] Speaker 03: And in having difficulty in seeing why either the last antecedent or serious qualifier can and has anything to do with this, because once you take away available to the public, you're not left [00:08:55] Speaker 03: with a category. [00:08:56] Speaker 03: It just would be the word otherwise. [00:09:00] Speaker 02: Well, we would say that it's otherwise available is what is being modified by to the public. [00:09:05] Speaker 02: So it would be the four categories of prior art or otherwise available and then to the public. [00:09:10] Speaker 03: But transposing to the public to the other categories in itself doesn't make sense. [00:09:14] Speaker 03: You'd have to say available to the public is the [00:09:17] Speaker 03: phrase that you bring and apply to the others? [00:09:19] Speaker 02: Well, I would submit, Your Honor, that the proper reading of this is the reading that we get from the Barnhart case, the Supreme Court case in Barnhart. [00:09:27] Speaker 02: And that's the case where the Supreme Court... Wait, wait, wait. [00:09:30] Speaker 03: I don't think you've really addressed my point. [00:09:31] Speaker 03: Why isn't available to the public the phrase that we're dealing with that people are saying ought to apply to the earlier items in the series? [00:09:42] Speaker 03: Well, it has to be available to the public. [00:09:44] Speaker 03: It can't just be to the public, right? [00:09:46] Speaker 02: Well, if it's available to the public, you have the same problem that you would have otherwise, Your Honor, and that is that available to the public... Well, the trouble you have is that you're left with the word otherwise, which doesn't mean anything as an item in the series. [00:10:03] Speaker 02: But what you're left with as a matter of statutory construction, Your Honor, is you're left with a clause at the end of [00:10:10] Speaker 02: the section, the otherwise available clause that doesn't apply equally to all the categories of prior art that come first, come before it. [00:10:19] Speaker 02: And by that I mean otherwise available to the public seeks to add a public component. [00:10:24] Speaker 03: If you were to apply that... I understand all that, but I don't think you're understanding my point that if you slice that off, the last category is otherwise, which doesn't make any sense. [00:10:35] Speaker 03: So it seems to me that neither the series qualifier cannon nor the last antecedent cannon can apply here because you're left by slicing off this thing with a word that isn't a category. [00:10:49] Speaker 02: Well, if that were true, Your Honor, if that is true, what you have still is a category of art. [00:10:56] Speaker 02: that is separate and distinct from the art that's set forth in the four categories that existed prior to the AIA and are adopted into the AIA by using the exact same language. [00:11:07] Speaker 02: It's a separate category that addresses other events, other items that are public. [00:11:13] Speaker 03: What might be an example or two of those? [00:11:18] Speaker 02: That would fall into that category, Your Honor. [00:11:20] Speaker 02: So for instance, back [00:11:21] Speaker 02: When this was first drafted, this section was first drafted, the predecessor section in the fifties, we didn't have social media, we didn't have computers, we didn't have tweets, and we didn't have videotapes. [00:11:34] Speaker 02: All of those things are now potentially within the publicly available clause because it just reaches anything that is otherwise publicly available. [00:11:44] Speaker 02: And so that is what a fair reading of the statute is, is that [00:11:49] Speaker 02: all of the categories of prior art that are set forth in new 102A, in AIA 102A, are categories that existed previously and were defined by this court and others over the decades. [00:12:03] Speaker 02: Then you get to the last category and it clearly is intended to expand prior art. [00:12:09] Speaker 02: It's intended to meet new prior art and look into the future [00:12:13] Speaker 02: about things that we can't foresee right now and say that if those things amount to something being publicly available, that's going to be prior art as well. [00:12:22] Speaker 01: So you don't have to have a use, you don't have to have a sale, you could have something available to the public even in the absence of those activities? [00:12:32] Speaker 02: You could have something in the absence of those activities. [00:12:35] Speaker 02: Now those activities, like an oral description at a conference or something like that, [00:12:40] Speaker 02: I would assume something like that would fall within publicly available, Your Honor. [00:12:44] Speaker 02: So what you have is the four categories that always existed. [00:12:49] Speaker 02: And no change was made in the wording related to those four categories. [00:12:55] Speaker 02: And it would have been an easy matter for the Congress to put the word public or some form thereof around the words on sale if it had intended to change the decades of precedent that existed with respect to on sale. [00:13:10] Speaker 02: But it did not do that. [00:13:12] Speaker 02: And it's presumed, Congress is presumed to be aware of and to accept the existing well-established definitions of the law that are in existence at the time that the statute is passed. [00:13:26] Speaker 02: They could have done it, and they didn't do it. [00:13:29] Speaker 02: And they did make changes. [00:13:31] Speaker 02: They did make changes relevant to this prior art. [00:13:34] Speaker 02: For instance, they eliminate the geographical restriction. [00:13:38] Speaker 02: So they took out the geographical restriction when they wanted to make a change in that. [00:13:42] Speaker 02: They made no such change with respect to on sale. [00:13:47] Speaker 02: And so it's an odd way, to say the least, to go about making a drastic change in the law by retaining the exact language that exists previously, not only for on sale, but for the other three categories of prior art. [00:14:02] Speaker 01: I do think, Your Honor... Do we even need to reach this question if we conclude that it wasn't a sale otherwise? [00:14:09] Speaker 02: I need to win on the sale question and I need to win on this question. [00:14:14] Speaker 02: So if I lose on the sale, I lose, Your Honor. [00:14:19] Speaker 02: I won on the sale on three of the patents below, but it's the post-AIA patent that I lost on the sale for. [00:14:26] Speaker 03: So yes, in response to your Honor's question. [00:14:29] Speaker 03: Why don't you address the question of whether this was an offered sale? [00:14:33] Speaker 03: I mean, there's been an argument that because the contract was subject to FDA approval and because there were two different formulations, the 0.25 and the 0.75, [00:14:47] Speaker 03: that this was not an offer to sell? [00:14:52] Speaker 02: Yes, Your Honor. [00:14:52] Speaker 02: I think this is clearly an offer to sell and very different from the contract that was considered in the Medicines Company. [00:14:58] Speaker 02: I'll start with the recognition in the Medicines Company case that while the UCC is not of talismanic significance, it is of significance. [00:15:07] Speaker 02: And the UCC makes very clear that future or contingent contracts are still contracts for sale. [00:15:14] Speaker 02: are still contracts for the sales. [00:15:15] Speaker 01: Can you cite me to any UCC case where the contingency was determining what the product would be as opposed to something like shareholder approval or some other outside aspect? [00:15:29] Speaker 01: In other words, you still had the product defined, you still had the price defined, and your contingency was something totally different. [00:15:35] Speaker 01: I've seen a lot of those cases. [00:15:37] Speaker 01: But have you ever seen a case where the contingency was what is the product we're even going to sell? [00:15:42] Speaker 02: And all I have to cite for you, Your Honor, is the UCC itself, where it says that contingent contracts are still contracts for the sale of goods. [00:15:51] Speaker 02: And I don't think it makes a difference whether it's a contingency for what the actual product was or a contingency for something else. [00:15:59] Speaker 02: Because in this case, there were only two alternatives, two possibilities, and they were specifically laid out there. [00:16:06] Speaker 01: The important point when you look at... Was also the possibility there never would be a product. [00:16:10] Speaker 01: I mean, people have busted phase three trials before, right? [00:16:13] Speaker 02: That's possible. [00:16:14] Speaker 02: That's possible with any contract for future goods. [00:16:16] Speaker 02: It's possible that it will never happen. [00:16:18] Speaker 02: The point is that the contract was entered into. [00:16:22] Speaker 02: And in entering into the contract, what Helson did was start the commercial marketing process. [00:16:28] Speaker 02: And they started the commercial marketing process by lining up exactly how they're going to profit from their sale of the product. [00:16:37] Speaker 02: And once they start the commercial marketing process, [00:16:40] Speaker 02: That's when the on-sale implications begin. [00:16:44] Speaker 01: Well, but you say once they start the commercial marketing process. [00:16:47] Speaker 01: In medicines, we said that commercial benefit in and of itself is not enough. [00:16:52] Speaker 01: That's true. [00:16:53] Speaker 01: And really, you have to have a sale or an offer per sale. [00:16:56] Speaker 02: Yes, that's true. [00:16:58] Speaker 02: And I think the context in which you said commercial benefit is not enough is in distinguishing the situation where there's a manufacturing agreement. [00:17:05] Speaker 02: And a manufacturing agreement is [00:17:08] Speaker 02: can be said to offer commercial benefit because you're stockpiling or doing whatever to get ready to market the product. [00:17:15] Speaker 02: But with the distribution agreement, and this distribution agreement in particular, we're talking about the way in which Helcin profited from this drug. [00:17:24] Speaker 02: It sold to the distributor, MGI. [00:17:28] Speaker 02: And when it sold to the distributor, it gave up title. [00:17:32] Speaker 01: Well, what did it sell to the distributor? [00:17:34] Speaker 01: If all you had was the licensing agreement, [00:17:37] Speaker 01: which is the only place that the money comes in. [00:17:39] Speaker 01: You wouldn't argue that was a sale, would you? [00:17:42] Speaker 02: No, but we have a separate contract called specifically- But the money was in exchange for the licensing agreement. [00:17:49] Speaker 02: At that juncture? [00:17:51] Speaker 02: No, not at that juncture, I don't believe, Your Honor. [00:17:54] Speaker 01: The record is pretty clear. [00:17:57] Speaker 01: There's both testimony and in the agreement itself that the money exchanged hands in connection with the licensing agreement. [00:18:04] Speaker 01: Not with the distribution agreement. [00:18:06] Speaker 02: But it is one agreement. [00:18:09] Speaker 02: They couldn't distribute without having the license, Your Honor. [00:18:13] Speaker 02: And so it's called a purchase and sale agreement. [00:18:16] Speaker 02: It's specifically laid out as a purchase and a sale. [00:18:20] Speaker 01: Well, a contemplated future purchase and sale, right? [00:18:25] Speaker 02: Yes. [00:18:26] Speaker 01: And for that agreement, there was no exchange of money. [00:18:28] Speaker 01: They contemplated the exchange of money in the future. [00:18:32] Speaker 02: Yes, Your Honor. [00:18:33] Speaker 02: That's correct. [00:18:34] Speaker 02: It was going to be a future exchange of money. [00:18:36] Speaker 01: Purchase orders, acceptance of those purchase orders, and then ultimately exchange of money. [00:18:42] Speaker 01: So I'm not saying I necessarily disagree with you with respect to the purchase and sale agreement, but I think we need to differentiate between where the money actually changed hands and where it didn't, or where it was only contemplated to change. [00:18:55] Speaker 02: Well, and I don't disagree, Your Honor, that the purchase and sale agreement [00:19:00] Speaker 02: is an agreement that's going to happen in the future. [00:19:03] Speaker 02: It is an agreement for the future sale. [00:19:06] Speaker 02: And so that is true, but under the precedent in this case, in this court and under the UCC, future sales are still sales. [00:19:16] Speaker 03: Could you help me by telling me what the status of the FDA approval process was in April, at the time the agreement was signed, and then also what the status of the FDA approval process was [00:19:29] Speaker 03: at the critical date which, I forget, was January 30th or something like that? [00:19:34] Speaker 02: FDA approval had not occurred by the critical date. [00:19:37] Speaker 02: What had happened was... So let's take April first. [00:19:40] Speaker 02: What was the situation? [00:19:42] Speaker 02: And, Your Honor, I'm going to have to check to make sure I have this precisely. [00:19:46] Speaker 02: But I believe what the evidence was was that phase two testing had been completed, that the protocol for phase three testing [00:19:56] Speaker 02: was being approved and I believe the phase three testing actually started in August and then the initial test results were revealed in January of 2002 before the critical date. [00:20:09] Speaker 03: What is the approval rate of products by the FDA once they go through a successful phase three trial? [00:20:18] Speaker 02: And your honor that's not information that's of record in this case but the [00:20:23] Speaker 02: phase three trials and FDA approval really isn't the relevant consideration for purposes of ready for patenting. [00:20:30] Speaker 02: This court has made clear... No, I understand that. [00:20:33] Speaker 03: I think the question is coming back to what Judge O'Malley was raising as to whether this affects the question of whether there was an offer for sale, given the contingent nature of this, that it was subject to FDA approval. [00:20:49] Speaker 02: Our position has always been, Your Honor... Did people understand that FDA approval was likely to be forthcoming? [00:20:56] Speaker 02: Absolutely, Your Honor, because what happened was that they had gotten approval to go forward with Phase 3 testing. [00:21:04] Speaker 02: To get to Phase 3 testing, they had to do testing. [00:21:08] Speaker 02: And they did testing on humans, which showed a reduction of emesis in people who were administered the drug. [00:21:14] Speaker 02: they told the FDA that that was a clear demonstration of efficacy. [00:21:20] Speaker 02: And so when it went into phase three, the expectation was clearly that it would work. [00:21:25] Speaker 02: And when it came out of phase three, before the critical date, there was confirmation of that fact as well. [00:21:31] Speaker 01: What if you didn't even have that? [00:21:33] Speaker 01: What if you hadn't even gotten through phase two and you had an agreement like this looking forward? [00:21:38] Speaker 01: In other words, you're putting in place the possibility that you're actually going to have [00:21:42] Speaker 01: a marketing stream. [00:21:44] Speaker 01: You're not selling anything yet. [00:21:45] Speaker 01: There's no public user, no end user yet. [00:21:50] Speaker 01: And you have no idea whether or not you're actually going to get passed to the FDA. [00:21:55] Speaker 01: Would that change the analysis? [00:21:57] Speaker 02: I don't think so, Your Honor, because under this court's precedent on enablement, ready for patenting can... And talking about the sale. [00:22:04] Speaker 02: I understand, but I think that the two come together because we're talking about ready for patenting [00:22:09] Speaker 02: and a sale, and when did the two come together? [00:22:12] Speaker 02: And my point, Your Honor, on this is that this court has never required that there be actual testing of a pharmaceutical in order to have enablement. [00:22:23] Speaker 02: And I refer to the Lilly case, where the court cited the MPEP for the proposition that you can even not have any clinical data, but just have a protocol for clinical data. [00:22:35] Speaker 02: And that's sufficient to conclude that enablement has been satisfied. [00:22:39] Speaker 02: So using that standard, going back to April or whenever, at the time that the phase two testing was done in the phase three, the phase two was the basis for the phase three here, obviously, going back to the time the phase two testing was done, they were ready for patenting. [00:22:56] Speaker 01: And so the sale is... You're saying once it's ready for patenting that any promise for a [00:23:03] Speaker 01: future distribution stream becomes a invalidating sale. [00:23:08] Speaker 02: Yes, and I don't think it has to be before, that the ready for patenting has to be before the sale. [00:23:15] Speaker 02: It can be after, but certainly if it's before the sale, it can be as well. [00:23:21] Speaker 03: Okay. [00:23:24] Speaker 03: Thank you, Mr. Wombori. [00:23:25] Speaker 03: We'll give you four minutes for a rebuttal. [00:23:29] Speaker 03: Mr. Haven. [00:23:37] Speaker 00: May it please the court, Will Havman on behalf of the United States. [00:23:41] Speaker 00: The government has participated in this case to address one issue, that is whether a transaction must make an invention available to the public to trigger the on-sale bar as Congress revised it in the AIA. [00:23:52] Speaker 03: So you rely on all this legislative history, but aside from I think one statement by Senator Kyle, it's all kind of ambiguous as to what they're talking about in terms of a public sale. [00:24:04] Speaker 03: In other words, here we have [00:24:07] Speaker 03: a sale which was public the only thing that wasn't known was the exact formulation and it's not at all clear that that kind of distinction was something that was apparent to the to the senators and representatives who were speaking about that's right well i think that it's clear from the language that congress actually enacted which is that it requires us to stick with me on the legislative history to agree that the legislative history doesn't uh... [00:24:36] Speaker 03: with the exception of one of the Kyle statements, doesn't make clear whether it's dealing with a situation in which the sale is public or whether it's dealing with a situation in which the sale and all the characteristics of the invention are made public. [00:24:52] Speaker 00: I don't think that I do agree, Your Honor. [00:24:54] Speaker 00: So the language that became the residual clause was introduced in the Senate Judiciary Committee in 2007. [00:25:00] Speaker 00: And that committee report said that [00:25:03] Speaker 00: The residual clause would emphasize the fact that prior art must be publicly available. [00:25:08] Speaker 00: So the question is whether the invention is publicly available. [00:25:11] Speaker 00: Now the Senate passed that bill in 2011 and Senator Kyle and Senators Hatch and Leahy made comments on the floor suggesting that that was their understanding of the residual clause as well. [00:25:22] Speaker 00: Now the House then, three weeks later, three weeks after the Senate passed that bill, the House introduced a new bill that adopted the residual clause verbatim. [00:25:32] Speaker 00: And if there are any doubts, [00:25:33] Speaker 00: House meant to adopt the meaning that the Senate had imposed on that residual clause, that's eliminated in the committee report of the House, which again says it uses the same language, that it emphasizes the fact that prior art must be publicly available, and it cites to the statements that Senators Hatch, Leahy, and Kyle made on the floor. [00:25:52] Speaker 00: So I think that although we don't need to rely on the legislative history here, I think the legislative history is absolutely clear. [00:25:59] Speaker 00: And this is what Congress intended when it passed the residual clause. [00:26:03] Speaker 03: So in your view, if there were a sale, let's say, to 20 people, which was confidential, didn't tell, or offered a sale to 20 people, which was confidential, didn't tell them what the formulation was, that that could still [00:26:21] Speaker 03: not be an on-sale bar? [00:26:23] Speaker 00: So I think it would depend on the facts of the case. [00:26:26] Speaker 03: What does that mean? [00:26:27] Speaker 00: Well, with 20 people, that would certainly be relevant to the on-sale questions. [00:26:31] Speaker 00: The question whether this was a sale that made the invention available to the public. [00:26:36] Speaker 00: I just re-emphasize that I don't at least believe that that's in dispute in this case. [00:26:40] Speaker 00: That is, I don't believe that Teva has made an argument that this was a sale that made the invention available to the public. [00:26:45] Speaker 00: Take my hypothetical. [00:26:45] Speaker 03: There are 20 people whom they offer to sell it to. [00:26:49] Speaker 03: Let's start with an offer first. [00:26:50] Speaker 03: And this is all on condition that the sale be kept confidential. [00:26:58] Speaker 00: Does that qualify for the on-sale bar or not? [00:27:00] Speaker 00: So I think it well might. [00:27:02] Speaker 00: It well might. [00:27:03] Speaker 00: And the question that the court would be faced with in that case is whether or not an interested member of the public would be able to learn about the invention as a result of those offers for sale. [00:27:13] Speaker 01: That's part of my problem. [00:27:16] Speaker 01: The question here is not for you, is not so much what [00:27:20] Speaker 01: they're arguing, but the workability of your proposal. [00:27:24] Speaker 01: So what if the member of the public to which it was sold, and to which it was sold confidentially, was somebody who wanted to use it in connection with their chemotherapy treatments? [00:27:37] Speaker 01: And they did. [00:27:37] Speaker 01: Now, is that an interested member of the public? [00:27:41] Speaker 01: But it's a confidential sale. [00:27:43] Speaker 00: So we believe [00:27:44] Speaker 00: I'll do my best to answer Your Honor's question. [00:27:46] Speaker 00: We believe that the existence of a confidentiality agreement is certainly relevant to the question of whether or not it makes the invention available to the public, but it's not dispositive. [00:27:55] Speaker 00: And I can imagine cases where the offer... That's not really what you argued in your briefs. [00:27:59] Speaker 01: I mean, you argued in your briefs that secrecy, secret sales simply should be excluded. [00:28:03] Speaker 00: Well, sure, Your Honor, and I apologize if our briefing on that point was imprecise. [00:28:09] Speaker 00: We use the term secret sale, I think, in the way that this Court had used it in the past, which is to refer to a sale [00:28:14] Speaker 00: that does not make the invention available to the public. [00:28:17] Speaker 00: And to step back, this is an inquiry that this court already applies. [00:28:21] Speaker 00: It already applies it with respect to the categories of prior art of printed publications and many public uses. [00:28:27] Speaker 00: So the court is well accustomed, and the lower courts are well accustomed, to determining whether or not an invention is made accessible or available to the relevant public. [00:28:36] Speaker 01: So who is the public? [00:28:37] Speaker 01: The public writ large or [00:28:40] Speaker 01: Or what? [00:28:41] Speaker 01: I guess I really don't understand who the public is in your formulation. [00:28:44] Speaker 00: So the question, as this court has applied it, is whether or not an interested member of the public, so someone interested in the invention, could learn about it as a result of the transaction. [00:28:54] Speaker 00: So what one non-confidential sale makes it publicly available? [00:28:58] Speaker 00: It could well, and we point, Your Honor, to the decision in fact. [00:29:03] Speaker 00: could well depending on what so i think it depends on a number of factors and i think that depends on if there's confidentiality agreement that is relevant if there any conditions on resale that may be relevant if the offer was extended even if it was confidential it was extended to many potential buyers that may be relevant and so i point your honor to that supreme court's decision in fact uh... to underscore uh... i think modesty [00:29:28] Speaker 00: of our argument here, FAF was a single transaction between an inventor of a computer chip socket and Texas Instruments. [00:29:35] Speaker 00: And there it was single sale or offer for sale. [00:29:39] Speaker 00: But because there were no conditions on resale, the inventor was or the buyer was not under any obligation of secrecy, the Supreme Court determined that that was sale. [00:29:47] Speaker 03: So why isn't the answer to my question that a single sale would be sufficient? [00:29:52] Speaker 03: Under existing law anyway. [00:29:54] Speaker 00: I certainly don't want to resist Your Honor's hypothetical. [00:29:56] Speaker 00: I think that it is a fact-intensive inquiry. [00:30:01] Speaker 03: It leaves us with a completely unworkable standard. [00:30:05] Speaker 03: People trying to make important decisions as to when to file their patent application, when to enter into these agreements, are asked to consider a multiplicity of factors. [00:30:16] Speaker 03: I mean, if I were [00:30:18] Speaker 03: a lawyer advising them, I would say, I don't know what to tell you. [00:30:22] Speaker 03: It's a multiplicity of factors and you really can't tell whether it's a sale or not until you get into litigation and the court gives the final word on it. [00:30:30] Speaker 00: Well, I do want to reassure the court that this is a standard that the court already applies with respect to printed publications, with respect to whether or not the invention is in public use. [00:30:42] Speaker 00: The court is accustomed to determining whether or not this is an invention [00:30:45] Speaker 00: that is accessible or available to the public. [00:30:48] Speaker 00: And I don't think that the rule that we're suggesting here is any less workable than those rules have proven. [00:30:54] Speaker 03: But under existing law, under PATH, as you yourself pointed out, a single sale, at least if it's not confidential, qualifies as for the on-sale bar. [00:31:06] Speaker 00: Right. [00:31:06] Speaker 00: And again, I do not want to resist Your Honor's question. [00:31:09] Speaker 00: And I think that it sounds like that would be an invalidating sale. [00:31:14] Speaker 01: Are you contending that the sale has to be to an end user as it was in PEP? [00:31:19] Speaker 00: It does not need to be to an end user. [00:31:23] Speaker 00: We can imagine a sale to a wholesaler or retailer that might make the invention available to the public if the wholesaler or retailer was under no obligation of secrecy, if there were no conditions on resale. [00:31:36] Speaker 00: We think that that sounds at least like a sale that makes the invention available to the public in that an interested member of the public could learn about the invention by virtue of the sale. [00:31:46] Speaker 01: So do you think the sale in this case was an invalidating sale? [00:31:50] Speaker 00: So we do not believe that the sale in this case was an invalidating sale. [00:31:57] Speaker 00: Because the formulation was not disclosed? [00:31:59] Speaker 00: That's right. [00:32:00] Speaker 00: The formulation was not disclosed. [00:32:02] Speaker 00: And the buyer was under a condition of secrecy. [00:32:05] Speaker 00: or confidentiality such that they could not disclose the formulation to any other party. [00:32:10] Speaker 03: Even though there were press releases and touting this substance as a solution to the vomiting problem and chemotherapy, all that, unless the exact formulation was disclosed, it doesn't qualify. [00:32:24] Speaker 00: So based on my understanding of the record, this was not an invalidating sale. [00:32:31] Speaker 00: And although it is true that there were press releases, those press releases did not make the invention available to the public. [00:32:37] Speaker 00: They may have announced the fact of a sale, but that did not announce the existence or the fact of an invention to the public. [00:32:45] Speaker 00: And that is the relevant inquiry under the AIA. [00:32:48] Speaker 00: But we do not want to, if this court concludes otherwise, if this court concludes that this was in fact a sale that made the invention available to the public, [00:32:57] Speaker 00: that will not cause us any heartburn. [00:32:59] Speaker 00: Our primary concern in this case is to make sure that the court recognizes that under the AIA, there is a requirement that a sale make or offer for sale make the invention available to the public. [00:33:12] Speaker 03: Thank you, Mr. Hayden. [00:33:12] Speaker 03: Thank you. [00:33:18] Speaker 04: Mr. O'Malley. [00:33:20] Speaker 04: Thank you. [00:33:20] Speaker 04: May it please the court. [00:33:22] Speaker 04: I really want to address the ready for patenting argument and the MGI contract. [00:33:27] Speaker 04: My opponent now is relying on the enabling description prong of fat, and his theory is that the disorder... Well, he's relying on both. [00:33:39] Speaker 04: He's relying on both, ready for pathing. [00:33:41] Speaker 04: Well, I would argue that's correct. [00:33:42] Speaker 04: He seems to be conflating the two and introducing the human clinical data and arguing whether efficacy was shown. [00:33:50] Speaker 03: But I mean that the phase three trial results were available to the extent that it was known that 81% of the people benefited from this, right? [00:33:59] Speaker 04: Yes. [00:33:59] Speaker 04: And let me address that data, but let me lead up to it with what the healths in new prior to that. [00:34:09] Speaker 04: And again, you know, the background is we have a... I'm sorry. [00:34:12] Speaker 03: Let me just ask you one question so we can make sure we're all on the same page. [00:34:15] Speaker 03: You agree with the ripening theory. [00:34:18] Speaker 03: In other words, [00:34:19] Speaker 03: The contract existed in April, but you have to consider the events that happened after the contract up to the point of the bar date, right? [00:34:29] Speaker 04: Your Honor, that's FAB footnote 14. [00:34:32] Speaker 04: And they say, you know, an offer for sale may not be an offer for sale if there's further development work that had to be done after that alleged offer for sale in the space systems. [00:34:43] Speaker 04: cites FATH for that footnote for that exact proposition. [00:34:46] Speaker 03: It's a little different point. [00:34:47] Speaker 03: I just want to make sure that we're not differing about the fact that when you have a, let's assume that there is an offer for sale here in April, but at that time it's not ready for patenting, that the fact that it becomes ready for patenting makes the offer for sale ripen into a bar at the time that it is ready for patenting, if that happens later. [00:35:08] Speaker 03: I think it can under the facts of this case. [00:35:11] Speaker 03: I understand. [00:35:12] Speaker 03: You don't agree with the hypothetical. [00:35:14] Speaker 03: But the fact that at the time of the contract that it wasn't ready for patenting is irrelevant as long as it becomes ready for patenting before the bar date. [00:35:24] Speaker 04: I bicker with irrelevant. [00:35:27] Speaker 04: I think it can be the case. [00:35:29] Speaker 04: I think, again, it's a factual analysis. [00:35:32] Speaker 04: And here, the critical. [00:35:33] Speaker 03: I'm sorry. [00:35:34] Speaker 03: I don't understand that. [00:35:35] Speaker 03: I understand it's a factual issue as to whether something's ready for patenting. [00:35:41] Speaker 03: I understand it's a factual issue as to whether the contract was an offer. [00:35:44] Speaker 03: I'm asking you to assume that the contract was an offer and that after the offer there was an eventuality that was ready for patenting before the bar date. [00:35:55] Speaker 03: Yes. [00:35:56] Speaker 03: That's sufficient to create a bar, right? [00:35:57] Speaker 04: Correct. [00:35:58] Speaker 04: Okay. [00:35:59] Speaker 04: Now, why is that not the case here? [00:36:01] Speaker 04: Well, we submit it's because how the contract was structured. [00:36:05] Speaker 04: The definition of product is registered product, which means approved by the FDA or the Canadian equivalent. [00:36:14] Speaker 04: In this case, they said, well, our currently registered products for review are the .25 or the .75. [00:36:21] Speaker 04: Now, what could have been a registered product? [00:36:24] Speaker 04: No registered product existed in April 2001. [00:36:28] Speaker 04: Could have been either of those. [00:36:30] Speaker 04: It could have been neither of those. [00:36:31] Speaker 04: The license agreement clearly [00:36:33] Speaker 04: sets forth the probability that no product gets registered and both parties accept that fact and walk away. [00:36:40] Speaker 04: Or it could have been some other product that they took after a failure in phase three and then became registered. [00:36:47] Speaker 04: So are you suggesting that the contract that was entered into here wasn't binding under the UCC? [00:36:53] Speaker 04: I have no opinion on the UCC application. [00:36:57] Speaker 04: I'm merely talking about the certainly future contracts can be binding under these facts. [00:37:03] Speaker 04: I look at it like, was the 0.75 milligram product the subject of an offer for sale? [00:37:10] Speaker 03: You don't have a view on whether the agreement was binding? [00:37:12] Speaker 04: I mean, surely you must think it was binding, right? [00:37:15] Speaker 04: It was binding, but at the time it was entered into, there was no entity that met the definition of product. [00:37:20] Speaker 04: 0.75, which was listed as a currently registered product or future registered product, never was approved. [00:37:30] Speaker 04: So was it the subject of an offer for sale? [00:37:32] Speaker 04: the definition of product and we submit that the 0.25 only met the definition of product once it became FDA approved. [00:37:42] Speaker 04: I want to go back to your question. [00:37:43] Speaker 04: I don't think I addressed it fully about the phase three data. [00:37:46] Speaker 04: I want to briefly sort of go back and look at the history leading up to that. [00:37:52] Speaker 04: We had the phase two trial, study 2203. [00:37:56] Speaker 04: The result of that was a signal of efficacy generally. [00:38:00] Speaker 04: Remember there were five doses tested. [00:38:02] Speaker 04: with respect to the 0.25 milligram dose, there was no statistical significance showing that there was actual efficacy for that dose. [00:38:13] Speaker 04: And the standard applied was not FDA standards, as my opponent says. [00:38:18] Speaker 04: As the court pointed out, and the court points this out, at A148, the standards Dr. Peck applied, our expert for Helsing, former head of CDER, [00:38:31] Speaker 04: were, quote, scientific standards that he thinks a POSA, as defined by plaintiffs, would embrace. [00:38:37] Speaker 04: And the court further said, the court found that the lack of efficacy for 0.25 milligram in 2330, and this is at A154 to 5, was, quote, a scientifically valid observation a POSA would make when viewing that documentation. [00:38:54] Speaker 04: When there's an end of phase two meeting with the FDA subsequent to that, [00:38:59] Speaker 04: The FDA says, quote, and this is at A10910, it's, quote, questionable whether the appropriate HALO dose has been identified. [00:39:11] Speaker 04: And with that as background, Helsing decides what are we going to do for phase three. [00:39:15] Speaker 04: They decide at one point that they have to take three doses in the phase three, .25, .75, and 2.0. [00:39:24] Speaker 04: The lower doses were known to be more stable, but they were worried about the efficacy of the 0.25. [00:39:30] Speaker 04: So they thought they had to bring higher doses into phase three. [00:39:35] Speaker 04: The district court at A156 said this was more cumbersome and expensive endeavor, taking two doses into phase three. [00:39:43] Speaker 01: If they had confidence about 0.25, they would have... Is the level of efficacy, it's certainly relevant to the FDA approval, but is the level of efficacy relevant to the actual claims? [00:39:54] Speaker 01: And the claims simply say there'd be a reduction. [00:39:57] Speaker 01: So isn't any efficacy enough for purposes of the claims? [00:40:02] Speaker 04: Right, but the court found as a factual matter and our exhaustive opinion [00:40:08] Speaker 04: that it had to be efficacy according to what POSA would accept as scientifically valid analyses, including well-developed and complete statistical analyses of the data. [00:40:22] Speaker 04: And that's what brings me to the preliminary Phase III data that they had in early January. [00:40:28] Speaker 04: As the court observed, preliminary means preliminary. [00:40:32] Speaker 04: At A157, [00:40:34] Speaker 04: She found that, as a factual matter, having listened to all the testimony and viewed the changes in methodology that were entirely possible, as both sides' experts agreed, Poser would not have been surprised to see those values change. [00:40:49] Speaker 04: And they could change to knock that study from a showing of efficacy out of a showing of efficacy. [00:40:55] Speaker 04: And that was the standard both experts applied. [00:41:00] Speaker 04: In talking about the enabling description standard, [00:41:03] Speaker 04: My opponent talked about how it was mentioned in closing. [00:41:06] Speaker 04: Well, in that section of closing, he refers to Dr. Fruhoff's testimony. [00:41:13] Speaker 04: When Dr. Fruhoff discusses the phase three preliminary data, he's very much talking on the same page as Dr. Peck. [00:41:20] Speaker 04: Specifically, he's talking, and I'll give you a citation. [00:41:24] Speaker 04: It's A, 57 and 58, transcript 61, line three to 62, line two. [00:41:32] Speaker 04: He's very much talking about the statistical analysis of that data and what was that statistical analysis. [00:41:40] Speaker 04: He talked about the package they used. [00:41:42] Speaker 04: He used it in graduate school, trying to paint the story that this was just statistically significant finding. [00:41:51] Speaker 04: But the court found, and at other places, Dr. Fruhoff agreed, that the analysis could change. [00:41:57] Speaker 04: That number could change. [00:41:59] Speaker 01: But your phase three proposal to the FDA did say that [00:42:02] Speaker 01: phase two clearly demonstrated that .25 was the minimal effective dose. [00:42:09] Speaker 04: That is an isolated statement from our health and phase three protocol. [00:42:14] Speaker 04: But elsewhere, as the district court found, there were much less certain statements, that it was mere hypotheses that there would be efficacy found in phase three. [00:42:25] Speaker 04: So she took the protocol as a whole and found that it did not show it was known to work for its intended purpose. [00:42:32] Speaker 04: And remember, there's all this doubt. [00:42:34] Speaker 04: Dr. Calderari testifies about all the debates within Helson about what doses to take further into phase three. [00:42:43] Speaker 04: And, of course, the FDA saying, we don't think you, Helson, have found the right dose yet. [00:42:50] Speaker 04: And so that's why they had to do this cumbersome trial where they took two doses to all these different centers to try both doses [00:43:00] Speaker 04: in each of the patients. [00:43:01] Speaker 03: The .25 and the .75? [00:43:04] Speaker 03: Yes. [00:43:05] Speaker 03: So was the .75 also covered by claims of these patents? [00:43:10] Speaker 03: No. [00:43:10] Speaker 03: Were all the claims that both parties have focused on are limited to... That was my question. [00:43:15] Speaker 03: My question was, is the .75 covered by claims of these patents? [00:43:20] Speaker 03: Not covered by any claims we've asserted. [00:43:23] Speaker 04: And I don't know the answer beyond that. [00:43:24] Speaker 03: You don't know the answer to the question of whether .75 is covered by other claims of the patents? [00:43:30] Speaker 04: I'm told that some of the broader claims covered it, non-asserted claims. [00:43:36] Speaker 04: So I want to turn to the MGI agreement. [00:43:40] Speaker 04: And you asked... What was the status of the FDA approval as of the bar date here? [00:43:48] Speaker 04: As of the bar date, there was this preliminary data that existed. [00:43:54] Speaker 04: It was another six months until the final report on study 9903 [00:43:59] Speaker 04: came out at that point in time, as the court noted. [00:44:01] Speaker 04: It occupied 17 volumes in the NDA with dependencies. [00:44:07] Speaker 04: And then that was in July of 2002, bar date being late January of 2002. [00:44:13] Speaker 04: And then approval follows in September of 2002. [00:44:16] Speaker 04: And of course, there was a second phase three trial that was also being analyzed that was behind 9903 in the timeline. [00:44:29] Speaker 04: So turning to the MGI agreement, again, it's confidential and as... But it's not confidential. [00:44:39] Speaker 03: You issued press releases about it. [00:44:41] Speaker 03: The only thing that's not confidential is the exact dosage, right? [00:44:45] Speaker 03: Well, the press releases just announced that this contract exists. [00:44:50] Speaker 03: Well, the contract exists. [00:44:51] Speaker 03: It identifies the active ingredient. [00:44:53] Speaker 03: It identifies what the purpose of the active ingredient is. [00:44:57] Speaker 03: Right. [00:44:57] Speaker 04: does not make, as the AIA says, the claimed invention available to the public. [00:45:04] Speaker 04: Our claimed invention is a very specific formulation at a specific dose that reduces the likelihood of emesis or CINB. [00:45:15] Speaker 04: And with respect to likelihood of emesis or CINB, my opponent cites the one press release that said, [00:45:23] Speaker 04: You know, there's some showing of efficacy in phase two, but clearly there was. [00:45:27] Speaker 04: The much higher dose, two milligrams, showed statistical significance versus control in that phase two study. [00:45:37] Speaker 04: With respect to phase three, even after receipt of the preliminary data, if you want to look at press releases, Helsing issues a press release in January 16th of 2002 and says we're analyzing the results of phase three [00:45:52] Speaker 04: And we're hopeful, quote, hopeful that that efficacy will be found. [00:45:58] Speaker 04: Now, with respect to MGI, I think you're correct, Judge O'Malley, that under Henry Kohler, the fact that they receive monies in connections with the separate license agreement does not make that constitute an offer for sale. [00:46:15] Speaker 04: We think, under Medco, this is analogous to what happened. [00:46:19] Speaker 04: You don't have to have received money to have an offer for sale, right? [00:46:23] Speaker 04: No, that's correct. [00:46:24] Speaker 04: But to the extent my opponent uses the license royalty and milestone payments, I just want to set them aside before I talk about the rest of the agreement. [00:46:36] Speaker 04: So with respect to the other part of the agreement, the purchase agreement, we think under Medco these are mere preparations for commercial sales. [00:46:49] Speaker 04: They're confidential, which under Medco is not a talisman. [00:46:52] Speaker 04: but is in issue of it not being a commercial offer for sale. [00:46:57] Speaker 04: But more to the point of the policy of Medco, my client, Helson, at that time had never sold a product in the United States. [00:47:06] Speaker 04: They had no marketing and distribution capabilities in the United States. [00:47:12] Speaker 04: So in that regard, they're analogous to Medco, who just doesn't have the right resources to do contract manual. [00:47:18] Speaker 03: There's no question that there was a binding agreement here. [00:47:21] Speaker 03: There's no question that at the FDA approved a particular product that Helsan was obligated to sell it to them, right? [00:47:29] Speaker 03: I agree with that. [00:47:32] Speaker 04: However, under Medco, there seems to be no principal reason to apply an on-sale bar rule differently to Helsan. [00:47:41] Speaker 04: than to say a Pfizer who has in-house marketing and distribution capabilities. [00:47:46] Speaker 04: And similar or analogous to a contract manufacturing agreement at Medco, I don't think we should apply a different set of on-sale rules to this smaller client. [00:48:01] Speaker 04: I've got 23 seconds if the panel has any questions. [00:48:07] Speaker 03: OK. [00:48:08] Speaker 03: Thank you very much. [00:48:12] Speaker 03: Mr. Lombardi, you've got four minutes here. [00:48:15] Speaker 02: Thank you, Your Honor. [00:48:17] Speaker 02: On the ready for patenting point, the answer to your question, Your Honor, is yes. [00:48:22] Speaker 02: There just has to be some showing of efficacy, not a showing that FDA standards are met. [00:48:29] Speaker 02: 81% of the people in testing that had been done and completed prior to the critical date here were shown to have successfully received this drug. [00:48:41] Speaker 02: beyond sufficient for the enablement standard that we have in this case. [00:48:45] Speaker 02: With respect to the government's argument about the legislative history, I would just point out that in 2007, the bill that the government was talking about there, the on-sale language had not yet been put back into the bill. [00:49:01] Speaker 02: And if you look at the drafting history of this section, on-sale gets added because Representative Lofgren said, [00:49:09] Speaker 02: you're eliminating some important areas of prior art. [00:49:12] Speaker 02: Then on sale went back in. [00:49:14] Speaker 02: And the legislative history after that point is a perfect example of what the Supreme Court talked about in the Exxon case, where there were strategic manipulations by senators who were interested in getting particular language into the bill, into the law, and failed. [00:49:30] Speaker 02: So they strategically manipulated the legislative history to do that. [00:49:33] Speaker 02: And Exxon, I submit, is [00:49:35] Speaker 02: is applicable here and the legislative history is not of much use to this court in resolving the dispute. [00:49:43] Speaker 02: The MGI sale, this was far beyond a mere preparation for sale. [00:49:47] Speaker 02: The distinction between the manufacturing agreement in medicines company and the distribution agreement here is that the manufacturing agreement in medicines company [00:49:58] Speaker 02: The medicines company was paying to have it manufactured. [00:50:02] Speaker 02: They weren't profiting from that. [00:50:04] Speaker 02: They were certainly getting ready to profit. [00:50:06] Speaker 02: That was a preparation for sale. [00:50:08] Speaker 02: But this distribution agreement was about actually selling the product and making a profit. [00:50:14] Speaker 01: Getting ready to make. [00:50:16] Speaker 02: Well, only because it was a sale that had not happened yet and because it fell into the category of something that would happen in the future. [00:50:24] Speaker 01: How is that different? [00:50:26] Speaker 01: How is setting up a distribution channel different than getting your distribution channels ready if you have in-house distribution functions? [00:50:34] Speaker 02: The difference is that, presumably, in the example of Pfizer, the in-house distribution network is not something that makes money by transferring the product to that in-house distribution center. [00:50:46] Speaker 02: What's different about this case is that Helson sold to a third party, sold it, and actually started the process of commercial marketing and making a profit off of its product. [00:50:57] Speaker 01: But there was nothing that the third party could at that point transfer to an end user, correct? [00:51:02] Speaker 02: Not to an end user, but that's not the inquiry here. [00:51:05] Speaker 02: The inquiry is whether there was a sale or an offer for sale. [00:51:08] Speaker 02: This was clearly [00:51:09] Speaker 02: a sales contract that was entered into, it was binding, and it was for the future transfer of the product. [00:51:15] Speaker 02: That's sufficient under the UCC and under the precedent of this case. [00:51:22] Speaker 02: And Your Honor, I would just, as I close here, I would come back to the important policies that underlie the on-sale bar as developed in this court and other courts over the years. [00:51:34] Speaker 02: As articulated in the medicines company, it is to prevent somebody from commercially marketing before the patenting process begins. [00:51:43] Speaker 02: And here it's a perfect example of a situation where Helson started this commercial marketing product before it filed this patent application. [00:51:53] Speaker 02: It is a case that exemplifies what the on-sale bar is about and exemplifies the policies behind the on-sale bar. [00:52:01] Speaker 02: Thank you very much. [00:52:02] Speaker 03: Thank you, Mr. Lombardi. [00:52:03] Speaker 03: I thank all counsel. [00:52:04] Speaker 03: The case is submitted and that concludes our session for this morning. [00:52:10] Speaker 01: All rise. [00:52:11] Speaker 05: The Honorable Court is adjourned until tomorrow morning at 10 o'clock.