[00:00:22] Speaker 07:
All right.

[00:00:52] Speaker 07:
Good morning, please be seated.

[00:01:05] Speaker 05:
Okay.

[00:01:09] Speaker 05:
We have three cases this morning, two for oral argument.

[00:01:12] Speaker 05:
Before we begin hearing oral argument, we have a motion pending here from Judge Hughes.

[00:01:23] Speaker 05:
Applicant for the bar, please rise.

[00:01:33] Speaker 04:
I have an admission this morning.

[00:01:34] Speaker 04:
I'm very happy to move the admission of my law clerk, Kristin Cobb, who's been with me over two years.

[00:01:40] Speaker 04:
I think my longest serving clerk.

[00:01:42] Speaker 04:
I'm sorry to see her leave.

[00:01:43] Speaker 04:
But I know that she is excited to move on and progress in her legal career.

[00:01:49] Speaker 04:
And I wish her well.

[00:01:51] Speaker 04:
So I move the admission of Kristin Cobb, who is a member of the bar and is in good standing with the highest courts of Virginia and the District of Columbia.

[00:01:58] Speaker 04:
I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications.

[00:02:05] Speaker 05:
OK.

[00:02:06] Speaker 05:
Thank you.

[00:02:07] Speaker 05:
Your bench will now confer.

[00:02:15] Speaker 05:
Very good.

[00:02:16] Speaker 05:
I also know about Ms.

[00:02:18] Speaker 05:
Cobb's

[00:02:19] Speaker 05:
credentials and I'm very confident she's going to be an excellent member of our bar and I wish Judge Hughes the best without Ms.

[00:02:26] Speaker 05:
Cobb.

[00:02:27] Speaker 05:
He's going to need it.

[00:02:27] Speaker 07:
The motion is granted.

[00:02:51] Speaker 05:
All right.

[00:02:54] Speaker 05:
We'll now hear the first argument of the morning, Eli Lillian Company versus Perigo Company, appeal number 16-2555.

[00:03:04] Speaker 05:
Mr. Lipsy, whenever you're ready.

[00:03:09] Speaker 01:
Thank you, Your Honor.

[00:03:10] Speaker 01:
May it please the Court, I'd like to focus my argument this morning on the obviousness issue in the 944 axilla patent.

[00:03:18] Speaker 01:
We are content, barring something very unusual, to rely on our beliefs on the other issues that are in the case.

[00:03:25] Speaker 01:
We contend that the judgment of obviousness in the 944 patent has to be reversed for at least two reasons.

[00:03:32] Speaker 01:
The first is a clearly erroneous factual error in concluding that the Qatar 2001 reference determined that DHT levels were normal following application of testosterone to the adult male axilla.

[00:03:48] Speaker 01:
at A80 and other places.

[00:03:50] Speaker 01:
The publication is unambiguous in the protocol, indicating that the DHT data was gathered by administering testosterone to the inside of the upper arm or the chest below the axilla, neither of which is the axilla itself.

[00:04:08] Speaker 05:
If we conclude that there's just we don't have a clear and definite conviction that the judge below misread the cutter references and, in fact,

[00:04:18] Speaker 05:
we defer to her finding that the CUTR references do in fact teach applying testosterone to the axilla, then in fact it does teach with a reasonable expectation of success of applying testosterone to the axilla with normal DHT levels.

[00:04:36] Speaker 05:
Is that right?

[00:04:38] Speaker 01:
That if the court so concluded, the court would be with respect clearly airing in the same way that the district judge did.

[00:04:47] Speaker 05:
Okay, but if we disagree with you on that, then CUTR does teach and suggest the notion of applying testosterone to the axilla with a reasonable expectation of success of getting a good testosterone level with a normal DHT level.

[00:05:06] Speaker 05:
Am I being fair and accurate in that assessment?

[00:05:10] Speaker 05:
Assuming my premise that the CUTR references

[00:05:16] Speaker 05:
can fairly be read as applying testosterone to the axilla.

[00:05:20] Speaker 01:
The critical missing piece of information from the whole body of prior art, including Cutter, is whether the application of testosterone directly to the male axilla would not raise DHT levels in the same way that application to the scrotum had since both areas were described in the literature.

[00:05:43] Speaker 01:
as having high levels of the enzyme involved, 5-alpha reductase.

[00:05:48] Speaker 01:
That critical piece of evidence is integrally tied to Cutter's statement of his protocol where he gathered that evidence in 10 patients and he said explicitly where it was applied.

[00:06:01] Speaker 01:
Inner arm, chest below the axilla.

[00:06:05] Speaker 01:
And neither of those is the axilla.

[00:06:08] Speaker 05:
OK.

[00:06:09] Speaker 05:
That's where the data came from.

[00:06:12] Speaker 05:
Right, that's your view of where the data came from.

[00:06:14] Speaker 05:
I understand that.

[00:06:15] Speaker 05:
But now, can you explain to me where in the literature that you mentioned is there a report that the axilla and scrotal skin have, in fact, shared the same comparably high 5-alpha reductase activity?

[00:06:33] Speaker 01:
The Takayatsu publication, which we've cited in our brief.

[00:06:37] Speaker 05:
Right, but Takayatsu doesn't

[00:06:39] Speaker 05:
report any 5-alpha reductase activity for the scrotal skin area, does it?

[00:06:44] Speaker 01:
It has a statement in the text that it is high in genital areas and in the axilla, citing references in literature.

[00:06:53] Speaker 01:
That was the state of the art at the time.

[00:06:55] Speaker 01:
The perception in the field was it was high in both places, because both places have these apocrine sweat glands, which is

[00:07:06] Speaker 01:
the organ or structure that comes into being at puberty in these secondary sex characteristic areas, and which is responsible for producing this enzyme.

[00:07:17] Speaker 01:
And it is for that reason that there was and should have been legitimate concern that you would have the same problem if you applied directly in the axle as you did with the scrotum.

[00:07:30] Speaker 01:
And nobody had done that experiment, Your Honor.

[00:07:32] Speaker 01:
It had been known since 1967.

[00:07:35] Speaker 01:
that the axilla, which was studied by Feldman as a special kind of skin, not the chest, not the arm, the axilla, was more permeable than the arm.

[00:07:46] Speaker 01:
And it had been known since 1983 that there were topical formulations of testosterone.

[00:07:52] Speaker 01:
And nobody, nobody ever attempted to put testosterone directly in the axilla until E. crux did it in 2005.

[00:08:00] Speaker 01:
And there's a good reason for that.

[00:08:02] Speaker 05:
Well, what about cutter?

[00:08:04] Speaker 05:
Cutter 2000, Cutter 2001, Ashkenazi, they all teach, I mean, if the words say what they say, we can't ignore the words, can we?

[00:08:14] Speaker 01:
Words say what they say.

[00:08:16] Speaker 01:
These are not anticipations.

[00:08:18] Speaker 01:
None of them is an anticipation.

[00:08:20] Speaker 05:
That's because of the formulation of testosterone.

[00:08:22] Speaker 01:
I understand that.

[00:08:23] Speaker 01:
The only evidence in this record, and indeed the only evidence I'm aware of, of a formulation that actually satisfactorily works in this regard,

[00:08:31] Speaker 01:
is that formulation, which is a crux's product, in which a who's who of the generic drug industry is here wanting to copy for application in the axon.

[00:08:41] Speaker 01:
And that being the case, the question is, even reading that, would a person skilled in the art be dissuaded from going there?

[00:08:51] Speaker 01:
People skilled in the art were dissuaded from going to the axilla for anything.

[00:08:55] Speaker 01:
There was no commercial product from 1967 to 2005.

[00:08:59] Speaker 01:
No commercial product, not just testosterone, for anything.

[00:09:02] Speaker 01:
And why?

[00:09:02] Speaker 01:
The axilla, the adult male axilla, was a cesspool of sweat, hair, bacteria, antiperspirants, deodorants, and five-alpha-beta-test.

[00:09:14] Speaker 06:
You don't need to be quite so nasty.

[00:09:17] Speaker 06:
What about Ashkenazi?

[00:09:18] Speaker 06:
What do we get from Ashkenazi?

[00:09:19] Speaker 01:
Good question.

[00:09:20] Speaker 01:
One of the errors here, we contend, is that the trial court found this preliminary notion of a prima facie case and then evaluated all the rebuttal evidence for its not-denial.

[00:09:32] Speaker 01:
And I think we pointed out in our response to the letter on supplemental authority, you know, the cycle Benzogreen case, and even going back to where this issue first came up in the CCPA, the Henry Reinhart case we cite there, which is binding on this court.

[00:09:46] Speaker 01:
The danger there is that your judgment on these things is shaped by this preliminary conclusion.

[00:09:53] Speaker 01:
And Reinhart says there's only one way out.

[00:09:56] Speaker 01:
And that is you have to retrace the path to decision.

[00:09:59] Speaker 01:
Retrace the whole path to decision with all the evidence.

[00:10:02] Speaker 01:
And indeed, in a federal district court, that's the only issue.

[00:10:06] Speaker 05:
Before we get to that, could you respond to Judge Plager's actual question about Ashkenazi?

[00:10:11] Speaker 01:
Yes.

[00:10:12] Speaker 01:
And one of the errors, that was a long way of getting exactly there, one of the errors is the court's thinking that Cutter had resolved this issue caused her to greatly over-read Ashkenazi.

[00:10:27] Speaker 01:
Ashkenazi is a garden variety formulation patent.

[00:10:31] Speaker 01:
It's got myriad possibilities, all of which have one unifying concept, using urea.

[00:10:37] Speaker 01:
And he describes using all kinds of hormones,

[00:10:40] Speaker 01:
for all kinds of conditions.

[00:10:42] Speaker 05:
Including testosterone.

[00:10:43] Speaker 01:
Including, but all kinds.

[00:10:46] Speaker 01:
Patients, male and female, and all kinds of surfaces.

[00:10:49] Speaker 06:
As long as it's included, what else you get is immaterial.

[00:10:55] Speaker 01:
Not true.

[00:10:57] Speaker 01:
That patent cannot be read as saying that every drug can be applied to every patient.

[00:11:04] Speaker 01:
for every condition on every surface.

[00:11:07] Speaker 01:
That's just not the way these things are written.

[00:11:09] Speaker 01:
And nobody thinks that's what it means.

[00:11:13] Speaker 01:
It is required to have an element of common sense in realizing, for example, to use the trivial example, you're obviously not going to apply to the scrotum for a female patient.

[00:11:24] Speaker 01:
But the danger, the health danger in the prostate only arises with a special drug, testosterone.

[00:11:32] Speaker 01:
in a special class of patient, adult males, not juvenile males, as we saw in Ben Galen, and application only to a special surface, one high and five alpha reductives.

[00:11:44] Speaker 01:
And Ashkenazi does not specifically suggest applying testosterone to the axilla of an adult male patient.

[00:11:52] Speaker 01:
I'm not contending it's not broadly encompassed, but the disclosure is a blender bus.

[00:11:59] Speaker 01:
And the trial judge pointed to a series of claims thinking that they taught that.

[00:12:03] Speaker 01:
They don't.

[00:12:04] Speaker 01:
If you look at those, there are two kinds of claims.

[00:12:06] Speaker 01:
There are claims that mention the seven surfaces, not even preferential honor, exemplary.

[00:12:12] Speaker 01:
And all of those depend from claims that have the whole laundry list of drugs.

[00:12:16] Speaker 06:
You're not suggesting, though, that in order for the trial judge to find obviousness, the prior art needs to be specific about

[00:12:28] Speaker 06:
the exact invention, are you?

[00:12:30] Speaker 01:
I am suggesting that there is nothing in Ashkenazi, since he doesn't apply testosterone to the axilla of any male patient, nor does any of the other prior art in an amount sufficient for systemic absorption.

[00:12:45] Speaker 01:
He doesn't apply it, and there's nothing in there that would ameliorate the concern about applying testosterone to a 5-alpha reductase-rich tissue like the axilla.

[00:12:56] Speaker 01:
Because, for example, the judge said, well, you do it to differentiate your product, or you do it to avoid transference.

[00:13:05] Speaker 01:
But the need to avoid transference was in the literature since 1986.

[00:13:08] Speaker 01:
We pointed that out in our papers.

[00:13:11] Speaker 01:
And their Distar case, they cite, says the desire to reap commercial benefit from improving a product is universal, even commonsensical, and therefore, your honor, age old.

[00:13:24] Speaker 01:
But nobody did it, and nobody did it even when the problem arose with scrotal testosterone.

[00:13:30] Speaker 05:
So going back to Cutter, if we agree with the lower court's finding that Cutter 2000-2001 teach the notion of applying testosterone to the axilla, and you end up getting, according to Cutter, no elevated DHT level, then where does that leave us?

[00:13:55] Speaker 01:
It leaves you in error with respect.

[00:13:59] Speaker 05:
OK.

[00:13:59] Speaker 05:
OK.

[00:14:00] Speaker 05:
I get it.

[00:14:01] Speaker 05:
I understand.

[00:14:01] Speaker 05:
And again, what I want to... Going back to Takayasu, all the measurements for the axilla, those were with females, right?

[00:14:13] Speaker 05:
None of them were with males.

[00:14:16] Speaker 01:
I don't recall the glands.

[00:14:17] Speaker 05:
OK, I'll recall for you.

[00:14:19] Speaker 05:
It's with females.

[00:14:20] Speaker 01:
Well, that's fine.

[00:14:20] Speaker 01:
That's exactly the point.

[00:14:21] Speaker 01:
So that's very peculiar, isn't it?

[00:14:22] Speaker 01:
No, not at all.

[00:14:23] Speaker 01:
because you can determine whether there's a DHT risk, whether it goes up by doing a test in females.

[00:14:29] Speaker 01:
There's just no health issue with females, because the health issue is the prostate issue, which only applies to the men.

[00:14:35] Speaker 01:
That's kind of exactly the point, is that there may, you might read Ashkenazi to say, well, some of these might be applied to some patients in the axilla, I think.

[00:14:45] Speaker 01:
You might read it that way, but there's no specific suggestion, or there's no specific disclosure of doing testosterone in the adult male axilla.

[00:14:53] Speaker 01:
And why is that important?

[00:14:55] Speaker 01:
And I hate to keep harping on this.

[00:14:57] Speaker 01:
What stopped everybody we contend is the recognition that that tissue, when you're talking about the real axilla, not some little hairless periphery around the edge, which Dr. Hadcraft said was small and wasn't enough to apply the drug to, and is not what Cutter was describing.

[00:15:17] Speaker 01:
If you're applying it to the axilla,

[00:15:19] Speaker 01:
there is a very substantial risk that you're going to have exactly the same problem you had with the scrotal.

[00:15:25] Speaker 01:
And nobody, in the absence of something that answered that concern, the trial judge even found it was a concern, get her exact language, a particular concern, the potential for increased risk.

[00:15:41] Speaker 05:
Mr. Lipsy, you're into your rebuttal.

[00:15:43] Speaker 05:
Do you want to save it?

[00:15:46] Speaker 01:
Your honor, from the questioning, I think I'd better use it up unless... Well, I'll say thank you.

[00:15:53] Speaker 06:
Okay.

[00:15:55] Speaker 06:
We have three.

[00:15:57] Speaker 01:
Yes, thank you.

[00:16:00] Speaker 05:
Okay.

[00:16:03] Speaker 05:
Mr. Nutter, is that right?

[00:16:05] Speaker 05:
That's correct.

[00:16:06] Speaker 05:
Okay.

[00:16:11] Speaker 02:
May it please the court.

[00:16:13] Speaker 02:
I'll follow counsel's lead and start with the

[00:16:15] Speaker 02:
factual issue about lack of motivation.

[00:16:18] Speaker 02:
The lower court found unpersuasive Lilly's evidence that a person with skill in the yard would be discouraged from applying testosterone to the exilla because of the concerns of DHT.

[00:16:28] Speaker 02:
That's not surprising because the court found at least six prior references that specifically expressly taught application of testosterone to the exilla for specific purposes.

[00:16:39] Speaker 05:
Why is it that the district court considered Lilly's teaching away argument in the context

[00:16:46] Speaker 05:
secondary considerations rather than in what I understand to be the more customary way, which is in the motivation to combine analysis?

[00:16:58] Speaker 02:
Well, I would submit that the court considered it in both contexts.

[00:17:01] Speaker 02:
It was proffered at trial as a teaching away secondary consideration.

[00:17:05] Speaker 02:
But the court, in its opinion, prior to conducting any legal analysis, had at least 50 pages of detailed factual findings.

[00:17:13] Speaker 02:
It collectively considered

[00:17:15] Speaker 02:
all the evidence of all four gram factors.

[00:17:18] Speaker 02:
It collectively considered them, I think it's appendix page 40 to 93.

[00:17:22] Speaker 02:
It considered all the evidence collectively before it conducted any of its obviousness analysis.

[00:17:28] Speaker 02:
Therefore, by definition, it took into consideration the teaching away references before concluding anything about motivation or secondary considerations.

[00:17:36] Speaker 02:
Now, I'd like to specifically address Qatar.

[00:17:39] Speaker 02:
Now, the courts

[00:17:40] Speaker 02:
held that Cutter 2000 and 2001 expressly taught application of testosterone to the axilla.

[00:17:48] Speaker 02:
The line that counsel points to in Cutter that defines the axilla as near the chest, that was expressly asked to our expert at trial what was meant by that.

[00:17:59] Speaker 02:
And he replied that that includes the axilla.

[00:18:02] Speaker 02:
And the court found that credible.

[00:18:04] Speaker 02:
Near the axilla includes the axilla?

[00:18:07] Speaker 02:
The chest near the axilla includes the axilla.

[00:18:09] Speaker 02:
That's how the expert replied.

[00:18:11] Speaker 02:
And that's exactly the court found that credible.

[00:18:13] Speaker 02:
But she found it credible for multiple reasons, because she looked at Cutter 2000 and 2001 and exactly what they said.

[00:18:20] Speaker 02:
Now, Cutter 2000, this is Appendix 22155, the third column under application site, says, the choice of the application site is quite important when the gel is applied to the trunk or axillary area, resulting balance of testosterone, DHT,

[00:18:37] Speaker 02:
and E2 will be very much in the normal physiologic range.

[00:18:41] Speaker 02:
Cutter understood that the application site was very important.

[00:18:44] Speaker 02:
He was going to be careful to define it, exactly how it needed to be defined.

[00:18:48] Speaker 02:
In Cutter 2001, specifically, he includes the data that he relied upon to reach those conclusions.

[00:18:54] Speaker 02:
And there's Table 2, this is Appendix 22161, where he identified the 10 patients he'd applied the testosterone to.

[00:19:01] Speaker 02:
And he identified how much was applied and the exact location of where it was applied.

[00:19:06] Speaker 02:
five, six, and seven, he identified the location as the axilla.

[00:19:11] Speaker 02:
Now, Lilly's expert testified that he was using axilla as a shorthand to mean something other than the axilla.

[00:19:17] Speaker 02:
The court did not find that credible.

[00:19:19] Speaker 02:
In fact, the court said that that made no sense, because it does not make sense.

[00:19:23] Speaker 02:
Cutter was teaching application of testosterone to the axilla, and he was also teaching that application of testosterone to the axilla resulted in normal DHT levels.

[00:19:35] Speaker 02:
Now, moving from a cutter is Ashkenazi.

[00:19:38] Speaker 02:
Ashkenazi absolutely teaches application of testosterone.

[00:19:42] Speaker 05:
Can you talk a little bit about Takayasu?

[00:19:44] Speaker 05:
Sure.

[00:19:45] Speaker 05:
Your opposing counsel talks about how, OK, maybe Takayasu didn't actually do any studies on the scrotal skin to compare against the results for the axilla gland.

[00:19:57] Speaker 05:
But your opposing counsel mentions that Takayasu itself, somewhere in the narrative, talks about how

[00:20:05] Speaker 05:
Both the axilla and the scrotum have high five-alpha reductase activity.

[00:20:10] Speaker 02:
Takayasu is at best neutral on the issue of increased DHT.

[00:20:15] Speaker 02:
All Takayasu did was take biopsy samples of small portions of female cadaver skin.

[00:20:21] Speaker 05:
Yeah, but could you address the specific question I have, which is the point that was raised by your opposing counsel?

[00:20:29] Speaker 02:
Sure.

[00:20:30] Speaker 02:
So Takayasu concludes, in his conclusion, he states, you cannot take my findings.

[00:20:35] Speaker 02:
and apply them to scrotum skin.

[00:20:37] Speaker 02:
He doesn't say specifically to scrotum skin, but what he says is, however, this is appendix 22798, second column under discussion.

[00:20:46] Speaker 02:
However, in addition to complexity of the skin's constituents, different experimental conditions used in these studies, which may possibly have affected the in vitro testosterone metabolism, does not permit us to draw a parallel between various components of the skin

[00:21:01] Speaker 02:
from different regions or those in a diseased state in terms of five alpha reductase activity.

[00:21:06] Speaker 02:
He's saying that whatever his findings were, you can't draw a parallelism between his axilla findings and those of the scrotum skin.

[00:21:14] Speaker 02:
That's what Lilly was asking the court to do.

[00:21:16] Speaker 02:
The court rejected that notion, relying on Takayasu's own words to do that.

[00:21:22] Speaker 05:
Okay.

[00:21:22] Speaker 05:
Mr. Nutter, I think we have your argument.

[00:21:24] Speaker 05:
We need to move on to one of your other co-counsel.

[00:21:30] Speaker 05:
Thank you.

[00:21:34] Speaker 05:
Which one is this?

[00:21:37] Speaker 03:
Thank you, Your Honor.

[00:21:38] Speaker 03:
Wilcozzi on behalf of Parago.

[00:21:39] Speaker 03:
Wilcozzi, okay.

[00:21:41] Speaker 03:
On behalf of who?

[00:21:41] Speaker 03:
Parago.

[00:21:42] Speaker 05:
Parago, okay.

[00:21:43] Speaker 03:
A couple quick points on 103 and some of Your Honor's questions.

[00:21:48] Speaker 03:
Number one, my co-counsel wasn't able to get to it.

[00:21:51] Speaker 03:
Ashnikazi clearly taught treatment of hypogonadal metalic testosterone.

[00:21:58] Speaker 03:
Their expert, Dr. Hadgraff, admitted that.

[00:22:01] Speaker 03:
Number two, the Takeyasu.

[00:22:03] Speaker 03:
Before you even get to the Takeyasu issue, Lilly's whole theory is based on the fact that scrotal application is like axilla application, and that there were actually DHT concerns with scrotal application.

[00:22:16] Speaker 03:
But with Cutter, Cutter has a very few, a couple important points in there, even beyond teaching to the axilla.

[00:22:23] Speaker 03:
Cutter reports that even with scrotal application, there were no DHT concerns.

[00:22:28] Speaker 03:
that with the Testoderm Scrotopatch clinical trials, there were no prostate issues over placebo.

[00:22:34] Speaker 03:
In fact, if you go back to all of the Lilly literature that they cite back to the 1980s, even before the Scrotopatch was approved, that literature recommends the Scrotopatch is safe and effective.

[00:22:47] Speaker 03:
FDA then approved it as safe and effective.

[00:22:50] Speaker 03:
And then all the literature after that recommends it as safe and effective and identifies no DHT or prostate

[00:22:56] Speaker 03:
issues or concerns.

[00:22:58] Speaker 03:
And that's Lilly's own cited literature, like McClure, like Finley, doesn't identify any issues with scrotal application.

[00:23:05] Speaker 03:
And as a district court found, if there's no issues with scrotal application, then clearly that's not going to teach away from the axilla, even if the tissue was comparable.

[00:23:15] Speaker 03:
And we submit the district court's findings on Takeyasu were correct.

[00:23:19] Speaker 03:
They could not have been error because the tissue is not comparable.

[00:23:22] Speaker 03:
Takeyasu was not comparing scrotal versus axilla tissue.

[00:23:27] Speaker 03:
He was studying a isolated sweat gland, not the entire whole intact axilla.

[00:23:33] Speaker 05:
Can you remind me, did Takayasu say anything about the axilla and the scrotal skin sharing some properties?

[00:23:42] Speaker 03:
He cited two different studies saying, generally speaking, that they're both considered to have high five alpha activity.

[00:23:49] Speaker 03:
But then he issued his cautionary statement that you should not compare these components of skin from different

[00:23:56] Speaker 03:
regional or anatomic regions of the body.

[00:23:59] Speaker 03:
And so the only testimony in this record from Dr. Potts and is found by the district court is that Takeyasu is not directing or not designed to study scrotal versus axilla skin.

[00:24:11] Speaker 03:
But again, before we even get to that alleged connection, there were no concerns over the scrotal application.

[00:24:17] Speaker 03:
Their own patent, the 944, teaches scrotal application.

[00:24:20] Speaker 03:
Ashkenazi teaches scrotal application.

[00:24:23] Speaker 03:
Every piece of art here continues.

[00:24:25] Speaker 03:
to mention scrotal application as safe and effective for increasing testosterone.

[00:24:29] Speaker 03:
So there were no safety issues.

[00:24:31] Speaker 05:
Are you saying there's no literature talking about the concerns of elevated DHT levels?

[00:24:38] Speaker 03:
It mentions elevated DHT, and it says the clinical significance at best is unknown.

[00:24:43] Speaker 03:
Lillie's own counsel said that in opening statements, that clinical significance is unknown.

[00:24:49] Speaker 03:
I think he used the words, there's evidence both ways on that.

[00:24:53] Speaker 03:
There's a debate.

[00:24:54] Speaker 03:
At best, that's what it shows.

[00:24:56] Speaker 03:
But CUTR, even if you don't read CUTR for the axilla, CUTR reports after applying it to the scrotum that there's no safety issues regarding scrotal application.

[00:25:06] Speaker 03:
So we think both of their assumptions fall here.

[00:25:10] Speaker 03:
Their assumption that somehow DHG was a concern of the scrotum, which it wasn't because every reference was teaching to use it in the scrotum.

[00:25:17] Speaker 03:
And number two, they didn't establish any comparison between the axilla and squirrel skin.

[00:25:23] Speaker 06:
But there clearly was a concern with DHT, wasn't there?

[00:25:29] Speaker 03:
There was the issue or signal in the art, Your Honor, of elevated DHT levels.

[00:25:33] Speaker 03:
And questions asked, does this have clinical significance?

[00:25:37] Speaker 03:
And as the expert of the defendants, Dr. Snyder, testified, it did not have clinical significance.

[00:25:44] Speaker 03:
And we can look at Cutter for that again.

[00:25:46] Speaker 03:
And we can look at Lilly's own literature, which I believe McClure said less credence is given to that theory.

[00:25:52] Speaker 03:
Cutter said, again, no prostate issues using the scrotal patch over placebo, and that there's no practical support for that theory.

[00:26:03] Speaker 03:
That's what Dr. Cutter reported, even beyond his axilla findings.

[00:26:08] Speaker 03:
Lastly, Your Honor, I want to put it one point on section 102.

[00:26:13] Speaker 03:
I want to point to a statement Lilly's counsel just said here.

[00:26:15] Speaker 03:
We believe the claim is not just obvious, it's also anticipated, because a skilled person would understand

[00:26:22] Speaker 03:
the skin to be a teaching and a disclosure of the axilla as well.

[00:26:26] Speaker 03:
The council himself just said for Lilly that the axilla was known since 1967 to be a special area of skin.

[00:26:33] Speaker 03:
If it was known in Europe.

[00:26:34] Speaker 06:
What's the significance of it being held anticipated as against it being held obvious?

[00:26:42] Speaker 03:
Well, if it's obvious, invalid is invalid.

[00:26:45] Speaker 03:
But our point is that it would be anticipated.

[00:26:48] Speaker 06:
I thought that was the law, that you could only be invalid

[00:26:51] Speaker 06:
Once, so what correct?

[00:26:54] Speaker 03:
Why do you make a point of the anticipation issue?

[00:26:58] Speaker 03:
We just want to make the point, Your Honor, that the judgment could be sustained on either ground, anticipation or obviousness, based on the Morgan 725.

[00:27:05] Speaker 05:
OK.

[00:27:06] Speaker 05:
We have your argument.

[00:27:07] Speaker 05:
Thank you.

[00:27:07] Speaker 05:
Thank you, Your Honor.

[00:27:08] Speaker 05:
Let's hear from the last of your side.

[00:27:16] Speaker 00:
Good morning, Your Honor.

[00:27:25] Speaker 00:
It may have pleased the Court.

[00:27:27] Speaker 00:
John Battaglia on behalf of Ann Neal, the cross-appellant.

[00:27:31] Speaker 00:
And on the issue of the simple 861 applicator patent, the District Court, by contrast, relied on a series of fundamental legal and clearly erroneous findings of facts.

[00:27:46] Speaker 00:
including the express violations of KSR and this court's Amgen precedents.

[00:27:51] Speaker 00:
But most fundamentally, and most simply, the court erred, both legally and factually, in finding that there was

[00:28:01] Speaker 00:
no double wall structure disclosed by the Gray 187 reference.

[00:28:06] Speaker 00:
And this is the simplest way to resolve this issue, this side of the case.

[00:28:11] Speaker 00:
If Your Honor would turn to page six of the reply brief, or otherwise page 34, it all boils down to whether the only limitation that was disputed for Gray 187 and whether there are two walls, a double wall structure, shown.

[00:28:27] Speaker 05:
Are we talking about walls 201 and 204?

[00:28:29] Speaker 00:
201 and 204, exactly.

[00:28:31] Speaker 05:
I didn't see your side raising this particular theory below.

[00:28:36] Speaker 05:
It was raised, and in fact... The only theory I saw below, supported by Dr. Singh, was the theory of removing the annular rib 204, and then just relying exclusively on peripheral wall 201.

[00:28:54] Speaker 00:
That was an alternative theory, and as Lily's own...

[00:28:58] Speaker 05:
What would be an alternative to?

[00:29:00] Speaker 05:
For the sake of argument, assume right now that I only saw one theory presented below and also assume that your now exclusive theory that you're raising to me, I believe is a brand new theory that wasn't raised below anywhere.

[00:29:14] Speaker 05:
Where would I find it?

[00:29:16] Speaker 00:
It would be in a few different spaces.

[00:29:18] Speaker 00:
Most importantly, A129 of the district courts express findings

[00:29:23] Speaker 00:
adopted verbatim from Lilly's proposed findings at A7071 of the record, and also from Lilly at A31027.

[00:29:34] Speaker 00:
So it wasn't like there were any... I'm sorry, where did you raise it?

[00:29:37] Speaker 00:
Our expert addressed it in testimony, in the context of addressing lots of different limitations, identified... Right, and where did he raise it?

[00:29:56] Speaker 00:
It's 1579, 1582, 2194, and 95, and 2071 and 72.

[00:30:13] Speaker 00:
OK.

[00:30:13] Speaker 05:
So if I don't find it there, then I have to conclude that this was waived.

[00:30:22] Speaker 00:
It's not, Your Honor, because this court's precedence, such as in

[00:30:26] Speaker 00:
O2 micro, that if the court reaches the issue, there's no waiver.

[00:30:31] Speaker 00:
That's this case, at minimum, because on A129, the district court expressly addressed this very issue.

[00:30:38] Speaker 00:
And tellingly, it didn't find that there was no double wall because the structures weren't tall enough as their expert testified and argued at 1582 addressing this very issue and described it expressly as an alternate anticipation theory.

[00:30:54] Speaker 00:
The district court had said,

[00:30:55] Speaker 00:
erroneously adopted the legal requirement that those double walls had to fold over to form a double wall.

[00:31:04] Speaker 00:
That doesn't make any sense.

[00:31:05] Speaker 00:
It was legally erroneous because there already is a double wall structure.

[00:31:09] Speaker 00:
There's already a double wall structure right there.

[00:31:12] Speaker 00:
What the court got confused about was the other single wall theory and how on the infringement theory and conversely the anticipation theory.

[00:31:21] Speaker 05:
Your current theory

[00:31:22] Speaker 05:
Was it anywhere in your proposed findings of fact, or post-trial findings of fact, conclusions of law?

[00:31:28] Speaker 00:
It was reflected in the proposed findings of fact.

[00:31:31] Speaker 05:
Okay, you're telling me it's in there.

[00:31:33] Speaker 00:
It's in there in the sense it's described gray, that figure.

[00:31:37] Speaker 00:
It's described as being strikingly similar to the applicator disclosed in the 861.

[00:31:44] Speaker 05:
Where in those briefings did you point to Annular Rib 204

[00:31:49] Speaker 05:
as being part of the double wall structure.

[00:31:52] Speaker 00:
Well, for the findings, I'll point the court to, I think it's 6857.

[00:32:00] Speaker 00:
And also, the demonstrative exhibit that was presented as part of Dr. Singh's trial presentation as well that's on our reply brief at page six, where they're identifying

[00:32:13] Speaker 00:
those walls as being the double wall structure.

[00:32:16] Speaker 05:
Identifying both walls?

[00:32:17] Speaker 05:
I only saw it highlighting wall 204 and not highlighting wall 201.

[00:32:22] Speaker 00:
No, I think it was referring to both.

[00:32:23] Speaker 00:
But the fact that the district court itself expressly addressed this issue, Your Honor, disposes of any kind of waiver argument.

[00:32:30] Speaker 00:
And that's consistent with this court's precedent and, indeed, rule 52A5 itself.

[00:32:34] Speaker 05:
You're into your time now.

[00:32:37] Speaker 05:
We'll save you your minute for rebuttal.

[00:32:39] Speaker 00:
Thank you, Your Honor.

[00:32:40] Speaker 00:
Let's restore three minutes for Mr. Lipsy.

[00:32:50] Speaker 01:
Thank you.

[00:32:51] Speaker 05:
Can you answer the question on the 861 patent?

[00:32:55] Speaker 05:
Amniel is suggesting that the district court actually reached and passed on the question of whether the annular rib 204 can be part of the double wall limitation.

[00:33:08] Speaker 05:
And so therefore, that issue, even though maybe they didn't clearly advance it, nevertheless was preserved for appeal.

[00:33:15] Speaker 05:
What do you think about that?

[00:33:16] Speaker 01:
I don't recall the trial court passing on that.

[00:33:19] Speaker 01:
My perception is that the argument is not only new argument.

[00:33:24] Speaker 01:
It is not the argument they advanced at trial.

[00:33:28] Speaker 01:
If I may, Your Honor.

[00:33:30] Speaker 01:
Were you there for the trial?

[00:33:32] Speaker 01:
I wasn't.

[00:33:32] Speaker 01:
OK.

[00:33:36] Speaker 01:
Although my colleague, Mr. Burwell, carried the water on that pad.

[00:33:43] Speaker 01:
Just to answer a couple of questions.

[00:33:44] Speaker 01:
On Takayatsu, which is plaintiff's trial exhibit 583, it's misnumbered in the appendix.

[00:33:49] Speaker 01:
I think it's 582.

[00:33:52] Speaker 05:
Where is it in the appendix?

[00:33:54] Speaker 01:
It starts at page 2279-7.

[00:33:56] Speaker 01:
And there are two important parts of it.

[00:34:03] Speaker 01:
The part that I had been citing is on 22798 in the right-hand column.

[00:34:10] Speaker 01:
And it says, our knowledge of the localization of 5-alpha reductase activity in the skin largely depends on indirect evidence obtainable from a study with whole skin.

[00:34:21] Speaker 01:
The activity is high in genital and axillary skin.

[00:34:27] Speaker 01:
And then Takiyatsu added that because he found

[00:34:31] Speaker 01:
The source of it is in the apricot sweat glands.

[00:34:35] Speaker 01:
And the Flynn publication, which is at A22275, points out that apricot sweat glands are exceptionally localized in the genital area, in the axilla, and around the nipples.

[00:34:49] Speaker 01:
And those two together are what create the perception in the field that there is a high risk, not only in the scrotum, but also in the axilla.

[00:34:59] Speaker 01:
Moreover, the Cutter 2001 publication, talking about the testaderm data, was in 2001.

[00:35:06] Speaker 01:
There are similar publications in 2001.

[00:35:09] Speaker 01:
Those statements were greatly undercut by the withdrawal of that product in 2002, in part because of the five of the DHT issue.

[00:35:20] Speaker 01:
And indeed, the replacement product, which the trial court actually mentions in a footnote, testaderm 2 TTS, is shown in

[00:35:30] Speaker 01:
The FDA filings Planus Trial Exhibit 92 and 93 was specifically designed to be placed elsewhere to avoid the high 5-alpha reductase.

[00:35:41] Speaker 01:
And indeed, in the actual field of treating testosterone deficiency, the scrotum was not a favorite place.

[00:35:50] Speaker 01:
It was off limits after 2002.

[00:35:53] Speaker 01:
You can see the products that were there all went somewhere else, arms, shoulder,

[00:35:59] Speaker 01:
stomach.

[00:36:01] Speaker 01:
And it's more than that.

[00:36:03] Speaker 01:
If you look at the package inserts for androderm, androgel, and testum that are in the record back in the prescribing information, they're not agnostic about it.

[00:36:11] Speaker 01:
They say never apply it to the genitals.

[00:36:14] Speaker 05:
Final point?

[00:36:15] Speaker 01:
Final point, Your Honor, is that the trial court specifically found that

[00:36:26] Speaker 01:
The clinical significance of elevated DHT levels was uncertain in June of 2005.

[00:36:31] Speaker 01:
That's at A172.

[00:36:35] Speaker 01:
And an unassertainable health risk in this business would normally say, you should not do it.

[00:36:42] Speaker 01:
And she made exactly the opposite conclusion and said, because it's uncertain, they wouldn't have been dissuaded.

[00:36:49] Speaker 01:
And that is clearly wrong, and it highlights

[00:36:51] Speaker 01:
the prejudgment of the objective indications based on the provocation case.

[00:36:56] Speaker 01:
Thank you very much.

[00:36:57] Speaker 01:
You've been very patient.

[00:36:57] Speaker 05:
Thank you.

[00:36:59] Speaker 05:
The case is submitted.

[00:37:04] Speaker 05:
Oh, the case is not submitted.

[00:37:07] Speaker 00:
Yes.

[00:37:08] Speaker 05:
We have one more minute.

[00:37:12] Speaker 06:
Make good use of it.

[00:37:16] Speaker 00:
So the court principle, of course, on a belt review has gotten me to know what the record must show

[00:37:22] Speaker 00:
A129 and the other sites I just provided, of course, that shows that this issue was preserved and held on expressly.

[00:37:27] Speaker 00:
And the errors that I want to emphasize are not only the error with respect to the foldover, where no foldovers were required by this, but also the express errors in finding that the device here would be rendered inoperable for its intended purpose of absorbing cosmetics.

[00:37:42] Speaker 00:
That's directly contrary to Goray 187 itself, which time and again discloses that it can be elastomeric, elastically deformable.

[00:37:50] Speaker 00:
That point's not in dispute.

[00:37:52] Speaker 00:
And also it discloses it can be applied to the skin.

[00:37:55] Speaker 00:
It's not limited to absorbing cosmetics.

[00:37:57] Speaker 00:
And when they point, for example, to testimony saying that Dr. Singh, the defendant's expert, made an admission about inoperability, that didn't have anything to do with this Goray reference.

[00:38:09] Speaker 00:
It was referring to figures one, two, and three.

[00:38:12] Speaker 00:
different structure.

[00:38:13] Speaker 00:
And so those are two core legal errors.

[00:38:16] Speaker 00:
Hypothetical question here.

[00:38:18] Speaker 05:
If we defer to all the fact findings the judge made with respect to the 861, then we affirm the finding of non-infringement, or finding of infringement, sorry.

[00:38:30] Speaker 05:
And we also affirm the finding that you failed to prove that the patent is invalid.

[00:38:37] Speaker 05:
Then you still have the

[00:38:41] Speaker 05:
view that the case needs to go back to address some other invalidity challenges?

[00:38:47] Speaker 00:
Correct.

[00:38:48] Speaker 00:
There are two issues in particular.

[00:38:50] Speaker 00:
The obviousness issue and further view of the D-Piatro reference, which taught, in addition, using applicators to apply testosterone to a sensitive part of the skin, like the axilla.

[00:39:03] Speaker 00:
Right.

[00:39:03] Speaker 05:
But I guess what I'm wondering is, why wouldn't it be utterly futile to send that question back

[00:39:10] Speaker 05:
if we've already concluded that neither GERA 187 nor GERA 986 nor a combination of those two references teaches the double wall limitation, then what's the point of sending back the question of whether DPATRO in fact teaches applying testosterone to the axilla with an applicator?

[00:39:29] Speaker 05:
That doesn't seem to have any utility to do that.

[00:39:33] Speaker 00:
Well, if you're addressing the district court's analysis, that turned on motivation and combined.

[00:39:39] Speaker 00:
And the motivation to combine, in turn, is buttressed further by the Di Pietro reference in showing.

[00:39:47] Speaker 05:
But if we conclude that Di Pietro was only relied on below by co-counsel for teaching the idea of using an applicator to the axilla, then that has no relevance at all to modifying either of the Garay references for purposes of the double wall limitation.

[00:40:09] Speaker 00:
Well, Your Honor, stepping back, I think there would have to be a determination made by the district court in the first reference on the motivation of combined issue.

[00:40:16] Speaker 00:
And the other issue is with respect to 112.1 in the written description.

[00:40:20] Speaker 05:
And I will emphasize, if I could, that... Which was based on a contingency, as I understand it from the briefing, that the court accepted a certain understanding of the claim.

[00:40:32] Speaker 05:
to cover a single wall being folded over to be a double wall, which the court ultimately rejected.

[00:40:37] Speaker 00:
Okay, that's the important point.

[00:40:38] Speaker 00:
And if you look at the court's decision at A181, and again, I think it's at 193, it didn't, as a matter of law, reject the notion that the 861 wall here could be met by a single wall applicator.

[00:40:53] Speaker 00:
it found as a matter of the burden of proof, as a matter of fact, that plaintiffs hadn't shown that they met their burden of proof in showing that the accused was to do it.

[00:41:03] Speaker 00:
So that's still a wide open issue about the claims here are able to cover that.

[00:41:09] Speaker 00:
And because of that, that is still a viable defense for amnesty of the only one found to infringe on this.

[00:41:15] Speaker 00:
OK, very good.

[00:41:16] Speaker 00:
Thank you very much.

[00:41:17] Speaker 00:
Thank you, Your Honor.

[00:41:19] Speaker 05:
The case is now submitted.