[00:00:20] Speaker 05:
Our final case this morning is number 161544 Phigenix Inc.

[00:00:25] Speaker 05:
versus Immunogen Inc.

[00:00:29] Speaker 01:
Mr. Porter.

[00:00:30] Speaker 01:
May it please the Court.

[00:00:31] Speaker 01:
The Board's non-obviousness finding here should be reversed for two reasons.

[00:00:36] Speaker 05:
Let's start with standing, okay, which is a problem because under the Supreme Court's decision in Massachusetts, even if the statute gives you the right to appeal, there still has to be injury in the facts.

[00:00:50] Speaker 05:
And where is the injury in fact here, given the fact that, as I understand it, your patent has never been licensed.

[00:00:59] Speaker 05:
And this whole royalty stacking argument, which is really your only argument for standing, has no application where there's no interest in anybody's licensing your patent.

[00:01:10] Speaker 05:
Why would that change if the other patent that's involved here, the 856, isn't validated?

[00:01:18] Speaker 01:
First, Your Honor, the royalty stacking wasn't the only argument that was raised.

[00:01:23] Speaker 01:
The concrete and particularized injury that was discussed was the devaluation of the patent portfolio of Phigenics due to the overlapping 856 patent that we have here.

[00:01:37] Speaker 01:
And this case is very different.

[00:01:38] Speaker 01:
Isn't that the same as royalty stacking?

[00:01:42] Speaker 01:
Well, because the patent is being devalued due to

[00:01:48] Speaker 01:
the overlapping subject matter.

[00:01:50] Speaker 01:
It's not only the fact that Genentech is paying royalties to immunogen, it's the fact that there is this overlapping subject matter which has to do with patents on the same drug, Cansilla.

[00:02:10] Speaker 03:
How do we know that?

[00:02:12] Speaker 03:
How do we, as an appellate court, since this wasn't really raised below,

[00:02:16] Speaker 03:
know that your patent actually does cover this drug and it upset their patent, somebody was licensed yours.

[00:02:25] Speaker 01:
Well, actually there was three months of negotiations between Phigenics and Genentech leading up to a litigation that's currently going on with Genentech involving the Phigenics patent.

[00:02:42] Speaker 03:
I don't think that answers my question.

[00:02:45] Speaker 03:
I mean, the fact that they may have negotiated with you doesn't mean that they think they're proud to cover their product.

[00:02:52] Speaker 03:
They may have just entered into negotiations to see if they had any risk of infringement.

[00:02:58] Speaker 02:
And where is that in the record?

[00:02:59] Speaker 01:
That is in the record, Your Honor, at Docket Entry 26 and Exhibits 1 and 2.

[00:03:08] Speaker 02:
There are... Now, give me an appendix number and I want you to show me where the

[00:03:14] Speaker 02:
But the content of the negotiations shows what you're saying.

[00:03:22] Speaker 01:
There is an appendix number 6530, which is a June 2013.

[00:03:26] Speaker 01:
Which volume is this?

[00:03:28] Speaker 01:
That's volume three, Your Honor.

[00:03:45] Speaker 02:
No, you're referring to a letter which follows.

[00:03:49] Speaker 01:
Right.

[00:03:50] Speaker 01:
There is a letter at that appendix 6530, which was the beginning of the negotiations between Phigenics and Genentech, which carried on.

[00:04:01] Speaker 03:
But this is just your letter saying we think you should license our code.

[00:04:06] Speaker 03:
It doesn't show anything about whether you have any interest whatsoever in licensing your code.

[00:04:11] Speaker 01:
Well, the negotiations went back and forth.

[00:04:13] Speaker 03:
Where is that in the record?

[00:04:15] Speaker 01:
that the record continues on at 6543, where the negotiations finally ended.

[00:04:26] Speaker 02:
In the first place, we'll use the word self-serving.

[00:04:38] Speaker 02:
In the second place, we'll say it lacks any foundation.

[00:04:42] Speaker 02:
How on earth are we supposed to

[00:04:44] Speaker 02:
consider this as cognizable evidence of the assertion you just made?

[00:04:50] Speaker 01:
Well, the evidence was part of the Motion to Dismiss record, which was that docket entry 26.

[00:04:57] Speaker 01:
There were two declarations submitted as part of the Motion to Dismiss that was passed to the... And where is that in the appendix, please?

[00:05:08] Speaker 03:
That's in the Motion to Dismiss.

[00:05:09] Speaker 03:
That is in the Motion to Dismiss.

[00:05:14] Speaker 03:
And one of those, I don't have that before me all.

[00:05:17] Speaker 03:
I have the appendix.

[00:05:18] Speaker 03:
What is that evidence?

[00:05:20] Speaker 03:
Is it their evidence?

[00:05:21] Speaker 03:
Because this is just your recharacterization of your patent profile.

[00:05:26] Speaker 01:
That evidence is a declaration from the CEO of Phigenics, which was.

[00:05:33] Speaker 03:
How does anything from you help?

[00:05:37] Speaker 03:
I think what we're looking for is any suggestion beyond your assertion

[00:05:44] Speaker 03:
that they would have a licensure fund, or whoever they were licensing their fund to.

[00:05:52] Speaker 03:
You keep pointing to your characterization, but your mere assertion doesn't seem to be enough.

[00:06:01] Speaker 01:
Well, the parties, the Genentech and Phigenics, are in litigation.

[00:06:06] Speaker 01:
That may well result in the end of

[00:06:09] Speaker 01:
of Genentech having to take a license.

[00:06:12] Speaker 05:
That's often how licenses... That's totally speculative.

[00:06:16] Speaker 05:
We're supposed to say you have injury because you might win this litigation and then if you do win the litigation they have to license your patent and if they license your patent they might give you less if the 856 patent is still valid.

[00:06:32] Speaker 05:
It's all this whole string of assumptions.

[00:06:35] Speaker 02:
I use the word non-cognizable.

[00:06:38] Speaker 02:
One of the reasons a court can't

[00:06:40] Speaker 02:
take into account something as evidence is because it's speculative.

[00:06:46] Speaker 02:
That's an objection.

[00:06:49] Speaker 02:
And this is, as Judge Dyck says, this is speculative.

[00:06:54] Speaker 01:
Under the Spokio Supreme Court case, the harm can be intangible or a risk of real harm.

[00:07:00] Speaker 01:
And here, since we have a statutory right to- But it can't be speculative, right?

[00:07:07] Speaker 01:
It cannot be speculative.

[00:07:09] Speaker 01:
But a risk of harm certainly exists here, certainly to the same extent.

[00:07:17] Speaker 02:
You mean like a possibility of success is the equivalent of a risk of harm, even if it's infinitely infinitesimal?

[00:07:28] Speaker 01:
I guess it's not infinitesimal.

[00:07:32] Speaker 01:
It's a significant enough risk that a for-profit company that competes directly with

[00:07:39] Speaker 01:
immunogen for licensing patents in the same area.

[00:07:44] Speaker 03:
I'm sorry.

[00:07:44] Speaker 03:
I mean, I get it.

[00:07:46] Speaker 03:
If what you're saying is true, then maybe you have standing.

[00:07:51] Speaker 03:
But there's no evidence in here.

[00:07:53] Speaker 03:
And I understand it's an odd situation, because you're not coming up from a district court.

[00:07:58] Speaker 03:
But the DC circuit does this all the time.

[00:08:01] Speaker 03:
And they look at this, and they let people make standing arguments.

[00:08:05] Speaker 03:
And you've made standing arguments, but you can't point any evidence.

[00:08:08] Speaker 01:
Well, the evidence that I can point to was in the opposition to the motion to dismiss, which were the two declarations.

[00:08:17] Speaker 01:
Not only from the CEO of Phigenics, but also Exhibit 2 at Docket Entry 26 was an economic expert who opined as to the economic harm that Phigenics has with respect to the devaluation.

[00:08:34] Speaker 03:
Look, there's no doubt that if you're frightened

[00:08:38] Speaker 03:
actually covers the same drug and that perhaps they would be forced to take a license to it that you have heard.

[00:08:48] Speaker 03:
Is there evidence that we can rely on that your patent actually covers this drug?

[00:08:57] Speaker 03:
There is one mere argument in these negotiations letters.

[00:09:01] Speaker 01:
There is, Your Honor, and I'll come back to that and give you that appendix site in my rebuttal.

[00:09:07] Speaker 03:
And is that going to be from some kind of expert witness or something like that, rather than just attorneys asserting it?

[00:09:15] Speaker 01:
That was evidence of why the drugs overlap, and specifically the mechanisms of action and how the claims of the patent overlap and cover the same drug.

[00:09:30] Speaker 01:
From a photo?

[00:09:32] Speaker 01:
That is in a letter from Phigenics to Genentech explaining the mechanism of the action.

[00:09:42] Speaker 03:
Is it going to be a letter signed by an attorney?

[00:09:46] Speaker 01:
No, Your Honor.

[00:09:48] Speaker 02:
So the evidence you're offering includes a declaration by a

[00:09:58] Speaker 02:
I would guess an economist, somebody specialized in any case in investment banking, in which he says, it is my understanding that phygenics has developed and is developing and so on.

[00:10:11] Speaker 02:
He doesn't know.

[00:10:12] Speaker 02:
I mean, what kind of evidence is that for?

[00:10:14] Speaker 02:
Sure, it's maybe the basis for expert testimony about valuation or damages.

[00:10:27] Speaker 02:
It's not evidence supporting your assertion of the validity of your claim, right?

[00:10:35] Speaker 01:
At paragraph four of Dr. Gold's declaration, he opines that phygenics has suffered economic harm due to the existence of the 856 patent.

[00:10:46] Speaker 01:
And he goes on and states that that's because the value of the phygenics portfolio is diminished.

[00:10:52] Speaker 05:
Under the assumption... We haven't gotten a dime yet from your patent, right?

[00:10:56] Speaker 05:
Nobody's paid any money to license it, right?

[00:11:00] Speaker 01:
That is correct, Your Honor.

[00:11:02] Speaker 01:
But part of the reason for that is the direct interference with the 856 patent.

[00:11:08] Speaker 05:
That I don't understand.

[00:11:10] Speaker 05:
Why would the existence of the 856 patent cause somebody not to license your patent?

[00:11:15] Speaker 05:
They've got to consider whether your patent covers the product they're producing or not without regard to the other patent, don't they?

[00:11:21] Speaker 01:
They do, and there is a lawsuit that's going on right now to determine that.

[00:11:32] Speaker 02:
I can ask the same questions different ways.

[00:11:38] Speaker 01:
On the non-obviousness finding, the board basically used the wrong reasonable expectation of success here.

[00:11:48] Speaker 01:
In its institution decision,

[00:11:51] Speaker 01:
said that one would have a reasonable expectation to make the compounds.

[00:11:57] Speaker 01:
And that's at appendix 187.

[00:12:00] Speaker 01:
But in the final decision, they reversed course, deviated, and said, looked at the toxicity instead of whether the immunoconjugates would be

[00:12:17] Speaker 01:
reasonably expected to be able to be made, which was the test they set out in the institution decision.

[00:12:25] Speaker 01:
Here, the prior art uses two of the same three linkers, two of the same three precise compounds, and only deviates with the antibody.

[00:12:37] Speaker 01:
And there was an express teaching in the Chari reference to use the same antibody.

[00:12:43] Speaker 01:
And had the board used the proper test,

[00:12:46] Speaker 01:
they should have found that the claims were obvious.

[00:12:55] Speaker 01:
I'll reserve my time for a moment.

[00:12:56] Speaker 01:
Thank you.

[00:13:03] Speaker 04:
Ms.

[00:13:03] Speaker 04:
Allison?

[00:13:05] Speaker 00:
Good morning, Your Honor.

[00:13:06] Speaker 00:
May it please the Court, Patent Owner, Munigen respectfully submits that this Court should dismiss Bigenix's appeal under Consumer Watchdog.

[00:13:14] Speaker 00:
Bigenics lacks standing in this case because it does indeed lack an injury in fact.

[00:13:18] Speaker 00:
I will also turn to the merits of the Appeal of Petition.

[00:13:21] Speaker 05:
On the standing issues, suppose they had established that people had licensed their patent, the 554 patent, and that those people had also licensed the 856.

[00:13:36] Speaker 05:
And they said, if we can get rid of the 856, they'll pay us more for the licenses on our patent.

[00:13:43] Speaker 05:
Would that

[00:13:44] Speaker 05:
be injury and facts sufficient to allow them to appeal?

[00:13:47] Speaker 00:
It certainly would get them a lot closer to having standing in this case.

[00:13:52] Speaker 00:
But of course, the facts are nowhere near that.

[00:13:54] Speaker 05:
I understand that.

[00:13:55] Speaker 05:
But what's the answer?

[00:13:56] Speaker 05:
Do you have a position on whether that would give them standing or not?

[00:14:01] Speaker 00:
It would get them a lot closer, Your Honor, of course, looking at- That's all we're going to get from you.

[00:14:06] Speaker 00:
Well, I think this Court recognizes that each case should be considered on its own merits and look at the facts of each case.

[00:14:11] Speaker 00:
And so as the facts of your hypothetical suggested, it suggests that there's an economic injury.

[00:14:17] Speaker 00:
And I recognize that the Supreme Court.

[00:14:19] Speaker 03:
It suggests that there's an economic injury directly related to your patent being viable.

[00:14:28] Speaker 03:
It seems to me that that's enough for injury and fact.

[00:14:31] Speaker 03:
That may be their theory.

[00:14:32] Speaker 03:
Their problem is they have no proof of their theory, and it's too speculative.

[00:14:36] Speaker 03:
But if they actually had, as my colleague says,

[00:14:41] Speaker 03:
licensing activity with other people and suggestions that, you know, their licenses aren't as much because of your problem, then it seems to me to be concrete and particularized.

[00:14:55] Speaker 00:
I agree that that would get them much closer to having standing.

[00:14:59] Speaker 00:
And perhaps even would.

[00:15:00] Speaker 02:
You're looking for other facts in the hypothetical that we haven't discussed, is that right?

[00:15:05] Speaker 00:
But what's clear based on the facts here is that phigenics lack standing.

[00:15:09] Speaker 00:
They haven't produced these potential licensees who expressed any interest whatsoever in their IP, let alone a potential licensee who has concerns about the 856 patent.

[00:15:20] Speaker 00:
They claim that the claims are overlapping, yet they've produced no evidence in this case to demonstrate that.

[00:15:25] Speaker 00:
So their pleadings are full of assertions, but those assertions are not supported by actual underlying proof and evidence.

[00:15:31] Speaker 00:
They rely upon the declaration of Dr. Donald, which, of course, is self-serving, as he's the CEO of Phigenics.

[00:15:40] Speaker 03:
kind of procedural and standard review question about this.

[00:15:45] Speaker 03:
Given that there's no standing requirement at the board, and that this is all presented to us on appeal for the first time, are we essentially being asked to make some kind of de novo factual determination of whether there is an injury or not?

[00:16:02] Speaker 00:
Well, it's always a court's duty, frankly, to consider whether an appellant has standing.

[00:16:07] Speaker 00:
And the burden lies with the appellant.

[00:16:09] Speaker 00:
to demonstrate that they have standing.

[00:16:11] Speaker 00:
And it's the court's part of, I submit with respect, it's part of your job to assess whether an appellate has standing.

[00:16:17] Speaker 05:
But then I think the question is where should the record be made?

[00:16:21] Speaker 00:
Here.

[00:16:22] Speaker 05:
Here?

[00:16:23] Speaker 05:
And they don't have to make the record with both time and office?

[00:16:25] Speaker 00:
That's correct.

[00:16:26] Speaker 00:
And even the Supreme Court has alluded to this in the Cuozzo case, where the Supreme Court noted that IPRs are more like an administrative agency proceeding than a judicial proceeding.

[00:16:37] Speaker 00:
and that one could seek an IPR, yet lack Article III standing.

[00:16:41] Speaker 00:
The Supreme Court says that in their COSA decision, which I can quote for you.

[00:16:46] Speaker 05:
Well, that seems to me to be putting quite a burden on this court.

[00:16:49] Speaker 05:
We don't usually engage in fact-finding.

[00:16:52] Speaker 05:
Why shouldn't the petitioner be required to make the record on standing before the Patent Office as opposed to coming in here and asking us for the opportunity to have

[00:17:06] Speaker 05:
an evidentiary submission and evidentiary findings?

[00:17:09] Speaker 00:
Well, a party need not have Article III standing to initiate an IPR.

[00:17:14] Speaker 00:
But as this court acknowledged in Consumer Watchdog, once that party seeks the review by a federal court like this court, Article III standing requirements kick in.

[00:17:25] Speaker 00:
And it was Phigenics, of course, that chose when to file its IPR.

[00:17:28] Speaker 00:
They could have chosen to file their IPR later when, in theory,

[00:17:32] Speaker 00:
They might actually have suffered an injury or might be an imminent danger of suffering an injury, but they just... Or might have evidence.

[00:17:39] Speaker 00:
Sorry?

[00:17:40] Speaker 02:
Or might have evidence.

[00:17:41] Speaker 00:
Or might have evidence, which is severely lacking in this case.

[00:17:45] Speaker 00:
And of course, you know, this requirement for an injury in fact, or an imminent injury in fact, it's a hard floor of Article III.

[00:17:52] Speaker 00:
That's what the Supreme Court has explained in cases like, I think it was the Summers case, the Massachusetts v. DPA case,

[00:17:59] Speaker 00:
And even though other requirements of Article 3, like immediacy and redressability, can be relaxed, an injury in fact is a hard floor that cannot be removed by Congress.

[00:18:10] Speaker 02:
I want you to further scrutinize Dr. Donald's statement, because you simply say it's self-serving.

[00:18:22] Speaker 02:
And I look at it, and while I agree with you it's self-serving, I also

[00:18:26] Speaker 02:
found that it lacked an awful lot of evidentiary requirements.

[00:18:30] Speaker 02:
And I want you to go through that.

[00:18:32] Speaker 00:
Sure.

[00:18:33] Speaker 00:
So for instance, Phigenics has not presented any third party, not identified any third party that might have an interest in licensing their 534 patent, let alone have a need to license the 856 patent.

[00:18:47] Speaker 02:
The magic word for me is in paragraph 9, in which Dr. Donald says, thus.

[00:19:01] Speaker 02:
And work backwards from there.

[00:19:04] Speaker 00:
Certainly.

[00:19:08] Speaker 00:
He says, thus, phigenics directly competes with immunogen with respect to those... And work backwards from there.

[00:19:13] Speaker 00:
Okay.

[00:19:13] Speaker 02:
Because he's basing that on the prior statements, which do nothing for me.

[00:19:20] Speaker 00:
Right.

[00:19:21] Speaker 00:
So, phigenics presents itself as though it were an early-stage biotechnology company.

[00:19:28] Speaker 00:
But if you look at, for instance, the declaration of Dr. Christine Meyer that we submitted, which is in the record.

[00:19:35] Speaker 00:
I'll get you that site in just one second.

[00:19:39] Speaker 00:
We've assessed Phigenix's activities.

[00:19:42] Speaker 00:
And what it shows is that Phigenix is not engaged in any of the kind of activities that you would expect from an early stage biotechnology company that is seeking to market a biosimilar of Kitsilah.

[00:19:51] Speaker 00:
It's not engaged in clinical trials.

[00:19:53] Speaker 00:
It poses no infringement risk, as they've essentially conceded

[00:19:56] Speaker 00:
in their response to our motion to dismiss.

[00:19:59] Speaker 00:
They don't allege that they face any infringement risk, which, of course, was an issue for this court and the consumer watchdog case.

[00:20:06] Speaker 00:
They're not partnering with any other large companies to bring a drug to market.

[00:20:14] Speaker 00:
And so this idea that they compete is based solely upon their theory that they compete in licensing.

[00:20:21] Speaker 00:
But even that there's no proof of.

[00:20:23] Speaker 00:
So for instance,

[00:20:24] Speaker 00:
They have, again, not identified any party that is considering licenses to both patents.

[00:20:30] Speaker 00:
And the 856 patent of Immunogen has been exclusively licensed to Genentech since 2000.

[00:20:35] Speaker 00:
And so there is no competition for a license to both patents.

[00:20:39] Speaker 00:
It's simply wishful thinking on the part of Phigenics.

[00:20:45] Speaker 00:
And they presented no proof thereof.

[00:20:48] Speaker 00:
That docket entry that I was trying to refer to earlier is docket 23, exhibit G. And I apologize that certain documents weren't introduced into the joint appendix.

[00:20:59] Speaker 00:
And we'd be happy to fix that if you'd like afterwards.

[00:21:05] Speaker 00:
So Dr. Donald alleges that Phigenics and Genentech have engaged in multiple discussions about the 534 patent.

[00:21:13] Speaker 00:
But what the record shows is that

[00:21:15] Speaker 00:
Genentech refused to license Phigenics' 534 patent because Genentech thinks that patent is invalid.

[00:21:22] Speaker 00:
It has nothing to do with the 856 patent.

[00:21:25] Speaker 00:
Genentech refused to license that patent on completely other grounds.

[00:21:29] Speaker 00:
So this notion that the 856 is standing in the way of Phigenics gaining royalties or having Genentech pay money to Phigenics is just frankly wishful thinking on their part, and it's not supported by

[00:21:45] Speaker 00:
any documentary evidence or any evidence from third parties?

[00:21:51] Speaker 00:
Does that adequately address your question?

[00:21:53] Speaker 02:
Yes, it does.

[00:21:54] Speaker 00:
OK.

[00:21:55] Speaker 00:
Thank you.

[00:22:01] Speaker 00:
So phigenics alleged certain theories for harm, none of which is viable.

[00:22:07] Speaker 00:
They didn't allege an infringement risk, which is something that this court again looked at under consumer watchdog.

[00:22:13] Speaker 00:
They made this allegation about Genentech paying immunogen millions of dollars as opposed to paying fees in Phigenics.

[00:22:18] Speaker 00:
But as I just discussed, that allegation is without support.

[00:22:23] Speaker 00:
They alleged that invalidating the 856 patent would immediately increase the license value of Phigenics' IP portfolio.

[00:22:31] Speaker 00:
But again, that's unsupported.

[00:22:32] Speaker 00:
They put in testimony from Dr. Gold, an economist, who makes these generalized theories.

[00:22:38] Speaker 00:
But he provides no valuation whatsoever

[00:22:41] Speaker 00:
of the market.

[00:22:42] Speaker 00:
They've shown no interest whatsoever in a market for a license to the 534 patent, and let alone any interest that's affected by the existence of the 856 patent.

[00:22:57] Speaker 00:
So their royalty stacking theory also lacks concreteness.

[00:23:01] Speaker 00:
It's merely hypothetical and conjectural, which courts have over and over again say is insufficient to demonstrate harm.

[00:23:08] Speaker 00:
And then they also make an argument based on estoppel.

[00:23:12] Speaker 00:
They argue that they can no longer provide a full warranty that practicing Phigenix's 534 patent will not infringe Immunogen's 856 patent.

[00:23:21] Speaker 00:
But again, they have failed to identify even a single entity that has an interest in licensing the 534 patent and who would also need a warranty to the 856 patent.

[00:23:33] Speaker 00:
So this supposed harm, again, is just purely conjectural and hypothetical on their part.

[00:23:38] Speaker 00:
and it's not concrete, and it doesn't meet Article III's requirements.

[00:23:43] Speaker 00:
As this court noted in Consumer Watchdog, an estoppel without an estoppel effect does no harm.

[00:23:49] Speaker 00:
And unless there are any further questions on this standing issue, I'll turn to the merits just briefly if you even want to hear that.

[00:23:58] Speaker 00:
It's important to note that the board below found our claims or upheld the patentability of our claims for multiple reasons.

[00:24:07] Speaker 00:
based on a well-developed record that was full of evidence, and it's full of the kind of substantial evidence that this court looks at the record for.

[00:24:17] Speaker 00:
So below, phigenics failed to demonstrate that there was a reason to combine to arrive to claim the invention.

[00:24:22] Speaker 00:
The board found that.

[00:24:23] Speaker 00:
They failed to demonstrate that one would have had a reasonable expectation of success.

[00:24:27] Speaker 00:
Claims six and eight, which are directed to immunoconjugates that include a non-cleavable linker, the board found for additional reasons that those claims

[00:24:36] Speaker 00:
were not shown to be unpatentable.

[00:24:39] Speaker 00:
And then also with respect to claim eight, we submitted objective evidence of non-obviousness, which the board also considered substantial evidence of non-obviousness.

[00:24:47] Speaker 00:
And each of the board's fact findings was supported by substantial evidence, including declarations of multiple experts.

[00:24:53] Speaker 00:
We submitted four expert declarations, three of whom phygenics didn't even oppose or submit rebuttal expert testimony against.

[00:25:04] Speaker 00:
Their reply was based purely on attorney argument.

[00:25:06] Speaker 00:
and was not supported by any expert testimony.

[00:25:09] Speaker 00:
And so the board weighing these facts understandably found that phigenics had failed to meet its burden.

[00:25:15] Speaker 00:
And I submit that this court, reviewing the board's decision, will see that the board's decision is supported by substantial evidence.

[00:25:23] Speaker 00:
Of course, questions of motivation and reasonable expectation of success are reviewed for substantial evidence by this court.

[00:25:31] Speaker 00:
I would also like to note that phigenics' appeal

[00:25:33] Speaker 00:
makes numerous new arguments that we submit this court should not consider on appeal.

[00:25:39] Speaker 00:
So for instance, Phigenics now argues that there are multiple non-clinical reasons to combine the elements of the prior art to arrive at the claim invention.

[00:25:47] Speaker 00:
And they do this on page 27 of their blue brief.

[00:25:50] Speaker 00:
Yet these arguments were not advanced below.

[00:25:52] Speaker 00:
They're new arguments that should not be considered here.

[00:25:55] Speaker 00:
And as this court has recognized in cases like Magnum Oil or even in red line detection,

[00:26:01] Speaker 00:
You should not consider such new arguments, but you should consider whether the board properly based its decision on the arguments that were made below.

[00:26:10] Speaker 00:
And that's what happened here.

[00:26:12] Speaker 00:
In the underlying IPR, Phigenics argued solely clinical reasons to combine the elements of the prior art to arrive at the claimed invention.

[00:26:20] Speaker 00:
And they did as much the same with reasonable expectation of success.

[00:26:26] Speaker 00:
I'll also note that on appeal, phigenics, in addition to making new arguments about non-clinical uses, makes new arguments improperly about whether the prior art would have thought that a non-cleavable linker would release an atansinoid in the cell.

[00:26:41] Speaker 00:
And that's a new argument that should not be considered here.

[00:26:44] Speaker 00:
And then additionally, I'd like to note that on appeal, phigenics argues something that shows a fundamental misunderstanding of the science at issue here.

[00:26:52] Speaker 00:
So for instance, at page 14 of their blue brief,

[00:26:55] Speaker 00:
They say that the TA1 antibody, which was an Achari reference discussed below, is just like Trastuzumab, which is an alternative name for Herceptin.

[00:27:04] Speaker 00:
And they go on to say, except that TA1 is a mouse antibody, while Trastuzumab is the humanized antibody.

[00:27:10] Speaker 00:
And their arguments here are premised on this, but that's just fundamentally incorrect.

[00:27:14] Speaker 00:
Trastuzumab is not the humanized version of the TA1 antibody.

[00:27:18] Speaker 00:
Trastuzumab is a humanized version of an antibody known as 4D5.

[00:27:22] Speaker 00:
And so even Phigenix's new arguments that they submit here on appeal are flawed.

[00:27:29] Speaker 00:
In contrast, looking at the board's decision below, the board did apply the correct legal standard.

[00:27:34] Speaker 00:
And they did this in the final written decision, which is that Appendix 20 going on 21, where they asked whether a skilled artisan would have had a reason to combine the teachings of the prior art to achieve the claimed invention, and whether they would have had a reasonable expectation of success from doing so.

[00:27:50] Speaker 00:
And then the board's decision,

[00:27:52] Speaker 00:
both for its reasons to combine and its reasonable expectation of success, looked at the arguments that phygenics advance.

[00:27:58] Speaker 00:
And the board, throughout its final written decision, repeatedly cites underlying evidence that supports the factual conclusions that the board has drawn there.

[00:28:07] Speaker 00:
And unless there are any further questions, I see that I'm out of time, and I'll leave it at that.

[00:28:12] Speaker 04:
Thank you, Ms.

[00:28:13] Speaker 00:
Allison.

[00:28:13] Speaker 00:
Thank you.

[00:28:15] Speaker 04:
Mr. Porter, you have some rebuttal time.

[00:28:26] Speaker 01:
Your Honor, on the standing issue, there is no procedure to make a record of that at the PTO.

[00:28:32] Speaker 01:
The record was made here at the Docket Entry 26, Exhibits 1 and 2.

[00:28:39] Speaker 01:
There wasn't any rebuttal declarations submitted.

[00:28:42] Speaker 01:
So really the only evidence that's in the record are the two declarations that I discussed earlier.

[00:28:50] Speaker 01:
In regard to the obviousness and the

[00:28:54] Speaker 01:
mistakes made by the PTAB.

[00:28:57] Speaker 01:
The key mistake was on the expectation of success.

[00:29:03] Speaker 01:
The original petition did not set it up as clinical reasons only.

[00:29:09] Speaker 01:
Throughout the petition at appendix 5999, 6000, and 6001, the rationale... Wait, wait, wait a minute.

[00:29:19] Speaker 02:
Your statement's not correct.

[00:29:21] Speaker 02:
You said the only evidence

[00:29:24] Speaker 02:
is the two declarations you discussed, but there are also declarations, I just looked, attached to the motion to dismiss as well.

[00:29:33] Speaker 01:
Those declarations, I'm sorry if I misspoke, do not directly address the economic harm that phigenics, the injury in fact, of phigenics economic harm.

[00:29:48] Speaker 01:
Somebody might think they do.

[00:29:51] Speaker 01:
Coming back to

[00:29:53] Speaker 01:
The mistake that the board made was that they made a reason to expect clinical success or non-toxicity.

[00:30:03] Speaker 01:
And that wasn't what the petition was based on, nor was it what the institution decision was based on.

[00:30:10] Speaker 01:
It's a compound claim.

[00:30:12] Speaker 01:
And therefore, for the composition, toxicity is not an element of the claim, yet the board

[00:30:20] Speaker 01:
used references referencing toxicity to say that there wouldn't be a reasonable expectation of success to make the compounds, which isn't true.

[00:30:31] Speaker 01:
They conflated the method of use or method of treatment standard where you would look at clinical effectiveness and toxicity with the standard for a compound claim of obviousness, which is simply would one have an expectation of success in making the compounds?

[00:30:49] Speaker 01:
And here, there clearly was an expectation of success in making the compounds.

[00:30:55] Speaker 01:
Their expert admitted that at Appendix 878, that the type of process to make the compound is well known.

[00:31:04] Speaker 01:
And that's why it's obvious, and that's why it should be reversed.

[00:31:07] Speaker 05:
OK.

[00:31:08] Speaker 05:
Thank you, Mr. Court.

[00:31:08] Speaker 05:
Thank both counsel.

[00:31:09] Speaker 05:
The case is submitted, and that concludes our session for today.