[00:00:00] Speaker 01:
is 2015-2021, Endo versus Teva.

[00:00:06] Speaker 01:
Mr. O'Quinn, please proceed.

[00:00:13] Speaker 03:
Thank you, Judge Warren.

[00:00:14] Speaker 03:
May it please the court, John O'Quinn, on behalf of the defendants.

[00:00:18] Speaker 03:
The district court's decisions on both written description and obviousness cannot be sustained because each depends on a misunderstanding or misapplication of this court's precedence.

[00:00:26] Speaker 03:
Starting with written description, the district court reasoned backwards

[00:00:30] Speaker 03:
that inventors must be allowed to claim broadly because, quote, had the claims been more restrictively drawn, they would have invited infringement, end quote.

[00:00:38] Speaker 03:
That's appendix 128.

[00:00:40] Speaker 03:
But it is simply not the law that an inventor can claim a zone of protection that is broader than what he actually invented.

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And that alone requires a remand here.

[00:00:51] Speaker 02:
Mr. Hoquin, in this case,

[00:00:54] Speaker 02:
Of course, you bear the burden here of establishing invalidity on each of the grounds asserted.

[00:01:01] Speaker 02:
And when I looked at the record, I saw that you had testimony that the range was too broad.

[00:01:11] Speaker 02:
The other side had testimony that the range was suitable.

[00:01:14] Speaker 02:
But other than an assertion from Dr. Kibbe that the range was too broad, what did you have by way of evidences to show either A,

[00:01:24] Speaker 02:
What would have been broad enough, but not too broad, or B, why this range was too broad?

[00:01:30] Speaker 03:
Sure, Judge Bryson.

[00:01:31] Speaker 03:
Well, I think that the most critical evidence here is by his own admission, the inventor who was responsible for efficacy, Dr. Lee, testified that he had, quote, no idea, end quote, whether compositions throughout the claimed ranges would be efficacious for 12 hours.

[00:01:49] Speaker 03:
That's an appendix 719 to 720.

[00:01:51] Speaker 03:
He said it would just be a guess.

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And he admitted that he didn't come up with the claimed ranges.

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He pointed to Dr. Kao.

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Dr. Kao did.

[00:02:00] Speaker 03:
Dr. Kao said he didn't remember whether he had come up with the claimed ranges.

[00:02:04] Speaker 03:
It was possible that he did.

[00:02:06] Speaker 02:
But he asserted that he thought they were suitable.

[00:02:09] Speaker 02:
And your witness testified that they weren't suitable.

[00:02:13] Speaker 02:
But no one, so far as I can see, said, obviously, they weren't limited to exactly 28 to 33, or 32.8, or whatever it was.

[00:02:22] Speaker 02:
So there was some room, presumably, around in the cartilage for there to be an extra range.

[00:02:30] Speaker 02:
What evidence do you have that this would have been a permissible range, some smaller range, but that the range that was claimed was too much?

[00:02:40] Speaker 02:
Other than, I grant you Dr. Lee was confused, but Dr. Kao came in and said that we thought this was suitable.

[00:02:46] Speaker 03:
Well, respectfully, Judge Bryson, I don't think that Judge Kao

[00:02:51] Speaker 03:
provided any basis for that other than his own conclusion?

[00:02:55] Speaker 03:
You're right, but he did assert it to be the case.

[00:02:57] Speaker 03:
He did assert it, and of course the question here, as Ariadne and Novozymes teach, is whether a person of ordinary skill in the art, looking at the four corners of the specification, would know that the inventors possessed the full range.

[00:03:10] Speaker 03:
And when you have Dr. Lee, who is the inventor responsible for advocacy,

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telling you that he can't say whether a given formulation that would meet the dissolution limitations, for example, would have the requisite efficacy, I think that that is telling evidence that they did not have possession over the full range.

[00:03:27] Speaker 03:
I think you also, Judge Bryson, have the situation here where we're not claiming that a patent owner must test all formulations across a claimed range in the normal course, but Enda was caught between a rock and a hard place.

[00:03:40] Speaker 03:
They had an on-sale bar problem in addition to their written description problem.

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And to avoid the on-sale bar, Endo had to argue that unpredictability and complexity made it such that the invention was not ready for patenting until they had the final, not preliminary, but final results from human clinical testing.

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And they also argued in response to obviousness that, quote, oxymorphone

[00:04:04] Speaker 03:
had unique properties and behavior so that the dissolution profile had to be specifically, quote, tailored.

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And that's in their red brief at pages 43 and 44.

[00:04:13] Speaker 03:
And our simple argument is that if it's a situation where the complexity of the art, that's obviously a factor under Ariad at page 1351, if the complexity of the art is such that you can't know, it can't be ready for patenting until you've completed human clinical trials

[00:04:30] Speaker 03:
and not just gotten preliminary results that show it would be efficacious across the claimed range, but that you've got to wait for the final results.

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And if the ARC is so unpredictable that you can't know which of the formulations are going to work until they are tested.

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And that's the arguments that they make at pages 43 to 45 of their red brief in response to obviousness.

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It's not reasonable for a person of ordinary skill in the ARC to assume

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that they have possession of the claim of the range, particularly when the inventor is saying, with the specification in hand, I don't know.

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And Dr. Cowell, with the specification in hand, can give no reason why a person of skill in the art would make the extrapolations that he says are reasonable.

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So I think when you add all of that together, Judge Bryson, given the state of the art, given the arguments that were made here,

[00:05:25] Speaker 03:
And given the fundamental error, legal error that the district court made, it requires at least a remand, if not a outright reversal.

[00:05:34] Speaker 03:
To be clear, even if you want to say, well, there is a battle of evidence or a battle of experts to be had here, that battle is nowhere to be found in the operative pages of the district court's opinion.

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His opinion consists of three paragraphs and analyzing written description.

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And his analysis on page appendix 128

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turns on the idea that if the claims had been more restrictively drawn, they would have invited infringement.

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That's not the test for written description.

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So even if you want to say that the evidence is a toss-up and that the district court could have reasonably come to a conclusion in favor of ENDO, and I don't think that's the case, the district court didn't do that analysis.

[00:06:18] Speaker 03:
And that, at a minimum, requires remia.

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Now, if the court has further questions on written description, I'm happy to take those.

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Otherwise, I'm also happy to turn to the issue of obviousness.

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So with respect to obviousness, Your Honors, this court in Enriqueau already found that the, quote, administration of controlled release oxymorphone is squarely presented in the prior art.

[00:06:39] Speaker 01:
With all due respect, this court doesn't find anything, do we?

[00:06:44] Speaker 03:
Judge Moore, to be precise, the court affirmed and found that there was substantial evidence.

[00:06:50] Speaker 01:
We held that there was substantial evidence.

[00:06:52] Speaker 03:
We held that there was substantial evidence.

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The court observed, and this is a 1071 of its opinion, it is undisputed that Maloney discloses a method of providing extended pain relief by provision of a therapeutically effective amount.

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But I understand that this court is not in the fact-finding business, of course.

[00:07:08] Speaker 01:
And my argument is not... And in that case, it was undisputed.

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In this case, it is disputed.

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There's a different standard of review and a different fact finder, correct?

[00:07:18] Speaker 03:
That's absolutely right, Judge Moore.

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And I am not arguing that this court's decision in Enrique Cal is binding on the district court here.

[00:07:27] Speaker 03:
Our argument is that the district court made a number of legal errors.

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And it is telling that the district court did not even acknowledge, did not even address this court's decision in Enrique Cal.

[00:07:37] Speaker 03:
And if it had, it may not have made the legal errors that it did.

[00:07:41] Speaker 03:
Well, that leads into my questions.

[00:07:43] Speaker 02:
What role do you think that Cal plays in this case?

[00:07:48] Speaker 02:
I mean, it is a different standard, and yet your briefs suggest that there's a legal error on the part of the district court in not addressing Cal.

[00:08:01] Speaker 02:
What should the district court have said that was the proper role for Cal to play in this case?

[00:08:08] Speaker 03:
Well, Judge Bryce, I think at a minimum,

[00:08:10] Speaker 03:
Given that this is an opinion by a district court on the legal issue of obviousness, and the legal issue of obviousness was before this court previously in Enrique Cal, it certainly would have been a useful check for the district court to have considered, to have looked at, to have acknowledged that this court had addressed the legal issue.

[00:08:29] Speaker 02:
Well, a useful check.

[00:08:30] Speaker 02:
It would have been a nice thing to do, but does that constitute legal error?

[00:08:35] Speaker 02:
Let me put it this way.

[00:08:37] Speaker 02:
The district court had said exactly what Judge Moore just said about Cal and then stopped and then said, for that reason, Cal has no effect on this proceeding.

[00:08:48] Speaker 02:
Would you think that would satisfy your sense that the district court should have at least addressed Cal?

[00:08:53] Speaker 03:
Well, I think that would have shown that it at least acknowledged that it exists.

[00:08:57] Speaker 03:
And let me be clear.

[00:08:57] Speaker 03:
I'm not arguing that it erred as a matter of law because it didn't talk about this court's opinion in Cal.

[00:09:04] Speaker 03:
I'm not saying that it had to.

[00:09:05] Speaker 03:
But it did err, as a matter of law, in a number of ways.

[00:09:08] Speaker 03:
It rejected prior art references like Maloney, which was before this court in Cal, and Oschlack on the theory that they included oxymorphone on a long list of compounds.

[00:09:17] Speaker 03:
That's wrong on the facts, and it's inconsistent with Merck versus BioCraft.

[00:09:22] Speaker 03:
It rejected prior art references like PennWest because they were not technical documents.

[00:09:28] Speaker 03:
That's contrary to KSR.

[00:09:30] Speaker 03:
It required interchangeability.

[00:09:31] Speaker 03:
PennWest is DS1.

[00:09:33] Speaker 03:
DS1.

[00:09:33] Speaker 03:
That's right, Your Honor.

[00:09:34] Speaker 03:
It required interchangeability between oxymorphone and other active ingredient opioids, rather than just a reasonable expectation of success.

[00:09:42] Speaker 03:
That's contrary to Bayer versus Barr.

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And it required that the prior art expressly disclose inherent properties, or that there be evidence that those inherent properties were known in the prior art.

[00:09:52] Speaker 03:
That's contrary to Abbott versus Baxter, or Santeros, or Cuban, and Parr.

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And if the district court had looked at this court's opinion in Enrique Cal and addressed it

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there's a good chance it would not have made those legal errors.

[00:10:05] Speaker 03:
But those legal errors permeate the opinion.

[00:10:08] Speaker 03:
And they, for that reason alone, claim one of the 216 patents, which had no dissolution limitations and which, in that sense, is indistinguishable from the kinds of claims that this court affirmed were not patentable in recalculation.

[00:10:24] Speaker 03:
For that reason alone, claim one should be reversed.

[00:10:27] Speaker 03:
If not, they're at a minimum remand.

[00:10:30] Speaker 02:
What would be the effect on the judgment in this case if claim one were reversed?

[00:10:37] Speaker 02:
If the judgment on claim one were reversed.

[00:10:40] Speaker 03:
So Judge Bryson, if the judgment were to reverse with respect to claim one and only claim one, I don't know that that would have any practical effect in the context of this case.

[00:10:52] Speaker 03:
Obviously, some of the defendants have argued that the written description arguments apply to all of the claims, including claim one.

[00:10:58] Speaker 03:
Activists had argued that the written description argument applied to all of the claims except for claim one.

[00:11:05] Speaker 03:
And so with respect to activists' arguments, if the court were to agree on written description and were to agree that claim one was obvious, then that would have a very significant effect because it would render all of the claims invalid.

[00:11:16] Speaker 03:
Now, that leaves the dissolution limitations.

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And with respect to those, I do recognize that that issue

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albeit in different postures on different records, have been before this court twice before.

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But to that end, the appeal does involve references that have not been before this court before, and references that the district court largely ignored.

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And those are, first and foremost, the Madden reference.

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Madden teaches dissolution ranges for the basket method at 100 RPM, which was used in the Maloney and Oschlak references.

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were indistinguishable from the paddle method at 50 RPM, which is, of course, what the claims require with respect to highly soluble drugs like the one it issued.

[00:11:58] Speaker 03:
And this is Appendix 6429, quote, hydrodynamics had no effect on the release of a highly soluble drug from a hydrophilic matrix system.

[00:12:06] Speaker 03:
And that means it doesn't matter what apparatus you used or what speed it was working at.

[00:12:11] Speaker 03:
And in those own submissions to the FDA confirmed

[00:12:15] Speaker 03:
in order to get its crush-resistant formulation approved, it confirmed what Madden predicts, that oxymorphone was insensitive to hydrodynamics.

[00:12:24] Speaker 01:
You're into your rebuttal time.

[00:12:27] Speaker 01:
Can I ask you just to spend about 30 seconds and talk about the appeal of the injunction, please?

[00:12:32] Speaker 03:
Yes.

[00:12:33] Speaker 03:
So with respect, there are two issues relating to the injunction, as it applies specifically to activists.

[00:12:41] Speaker 03:
One is with the 271A through C analysis and whether or not the eBay factors were satisfied.

[00:12:50] Speaker 03:
For the reasons submitted in our brief, we submit that they were not.

[00:12:53] Speaker 03:
If the court disagrees, I think that then makes the issues with respect to 271E moot.

[00:12:58] Speaker 03:
We do think the district court got the 271E issue correct as a matter of statutory interpretation.

[00:13:04] Speaker 03:
If the court has no further questions, I'll reserve the balance of my time for rebuttal.

[00:13:08] Speaker 01:
Okay.

[00:13:09] Speaker 01:
Thank you very much.

[00:13:15] Speaker 01:
Mr. Black, please proceed.

[00:13:24] Speaker 00:
May it please the court.

[00:13:28] Speaker 00:
Both written description and obviousness turn on questions of fact.

[00:13:33] Speaker 00:
And the findings of the district court after a five-week trial cannot be overturned unless they are clearly erroneous.

[00:13:41] Speaker 00:
What do the appellants offer in support of their burden below of clear convincing evidence and on appeal that the factual findings of the district court were clearly erroneous?

[00:13:50] Speaker 00:
Very little.

[00:13:51] Speaker 00:
On obviousness, the district court reached the same result as the Patent Trial Appeal Board.

[00:13:57] Speaker 00:
that the claims of the 216 were not obviousness in the face of the principal prior art relied upon a trial, Maloney and Oschlack.

[00:14:04] Speaker 00:
The court affirmed the PTAP decision and should be the same thing here.

[00:14:07] Speaker 00:
There's been no assertion made on appeal.

[00:14:11] Speaker 02:
Was Oschlack before the PTO or was it just Maloney?

[00:14:17] Speaker 00:
Oschlack was before.

[00:14:18] Speaker 02:
Because I remember the Cow case itself.

[00:14:21] Speaker 00:
That's correct.

[00:14:22] Speaker 02:
It was only involved Maloney.

[00:14:24] Speaker 02:
Yes, Cow.

[00:14:25] Speaker 00:
That's right.

[00:14:26] Speaker 02:
Back, ushlock, appeared?

[00:14:27] Speaker 02:
Yes, that's correct.

[00:14:28] Speaker 00:
What happened?

[00:14:29] Speaker 00:
Okay.

[00:14:29] Speaker 00:
Callagall-Meloni, and the issue there, in every obviousness case, the first thing you need to do is identify the prior art, identify the combination of prior art that the challenger believes in combination would teach the claim, and then show why it would be, there would be a reasonable expectation of success, motivation combined.

[00:14:51] Speaker 00:
But not that many obvious in this case has turned on what does the prior art teach.

[00:14:54] Speaker 00:
Usually you can find the elements in the prior art in the question.

[00:14:58] Speaker 00:
It's mostly about the combination.

[00:15:00] Speaker 00:
This case was founded on the first step, which is what does the prior art teach?

[00:15:06] Speaker 00:
And in requeo, the court said, well, patent office, you cannot assume that the paddle and the basket method are the same without evidence.

[00:15:13] Speaker 00:
And the patent office eventually issued the claim.

[00:15:16] Speaker 00:
The same issue played out at the PTAB, albeit with experts,

[00:15:20] Speaker 00:
trial of the PTAB and all of the due process that's involved there.

[00:15:25] Speaker 00:
And our trial at district court, where, of course, the standard was clear and convincing evidence, we had days and days of testimony on this issue of the correspondence between the paddle and the basket and the paddle at different speeds.

[00:15:35] Speaker 00:
And the judge made factual findings, which were well supported.

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They were not clearly erroneous.

[00:15:40] Speaker 00:
The written description case, Your Honor, we had more argument today from counsel for the appeal

[00:15:47] Speaker 00:
on written description than we did at the closing arguments at the trial.

[00:15:51] Speaker 00:
We had a five-week trial, which was mostly about obviousness.

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They submitted evidence from Dr. Kibbe.

[00:15:57] Speaker 00:
But when they closed the case, there was only six pages of the transcript in their closing where they addressed written description.

[00:16:04] Speaker 00:
Dr. Kibbe was not credible.

[00:16:06] Speaker 00:
They did not rely on his testimony.

[00:16:08] Speaker 00:
And they made the argument they made here that they were basing their case on the statement of Dr. Lee.

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Dr. Lee

[00:16:15] Speaker 00:
was one of the inventors.

[00:16:17] Speaker 00:
He'd been out of the business for a long time.

[00:16:19] Speaker 00:
He was not working for Endo at the time.

[00:16:21] Speaker 00:
And most importantly, he's an MD who was involved in running clinical studies.

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He takes care of patients.

[00:16:27] Speaker 00:
The people who make the decision about how wide that range can be around a drug that's been proved to be effective, what the reasonable range is, those are pharmacokineticists.

[00:16:38] Speaker 02:
But we don't seem to have any

[00:16:40] Speaker 02:
Well, there are two problems that I see that I'd like you to address.

[00:16:43] Speaker 02:
The first is we don't seem to have any evidence going to why the range was reasonable, other than the assertion of Dr. Kao that it was.

[00:16:54] Speaker 00:
Ah, no, Your Honor.

[00:16:55] Speaker 00:
We have much evidence.

[00:16:55] Speaker 00:
We presented, first of all, of course, it's not our burden.

[00:16:58] Speaker 02:
I understand that, but I'm interested in what evidence you did have, because that's all I saw was Dr. Kao.

[00:17:03] Speaker 00:
We had Dr. Fasihi, who was an expert in pharmacokinetics.

[00:17:06] Speaker 00:
He testified.

[00:17:08] Speaker 00:
He testified that formulators make these judgments all the time.

[00:17:11] Speaker 00:
He testified that he reviewed the ranges in the patent and the data that was available, and in his opinion they were reasonable.

[00:17:20] Speaker 00:
that generics use this process in order to run the entire generics industry.

[00:17:25] Speaker 02:
But that all sounds ipsy-dixy to me.

[00:17:27] Speaker 02:
I mean, he says they're reasonable because I'm an expert in this field, and I think it's reasonable.

[00:17:32] Speaker 02:
Is that the case?

[00:17:33] Speaker 00:
No, Your Honor.

[00:17:34] Speaker 00:
He relied on the ranges that the FDA permits generics to use to establish bioequivalence.

[00:17:39] Speaker 00:
That was part of his testimony.

[00:17:41] Speaker 00:
Now, what happens in the industry is that once somebody like Endo goes along and spends $100 million taking a path that no one else traveled,

[00:17:49] Speaker 00:
and develops a drug and proves that it works.

[00:17:51] Speaker 00:
You have two things.

[00:17:52] Speaker 00:
You have a dissolution profile.

[00:17:54] Speaker 00:
That's an in-vitro, in-the-lab test that can be done to determine what the dissolution rate is.

[00:18:00] Speaker 00:
And you have pharmacokinetic data on blood levels.

[00:18:03] Speaker 00:
And what the generics do, what they say is they don't have to do a clinical trial to prove efficacy, right?

[00:18:09] Speaker 00:
They take a pill.

[00:18:10] Speaker 00:
They dissolve it.

[00:18:11] Speaker 00:
They get the dissolution profile.

[00:18:13] Speaker 00:
They filed with the FDA saying that they're within a particular range, and their mathematical constructs were determining how close is close enough.

[00:18:20] Speaker 02:
But those ranges tend to be pretty small, if my recollection is that, don't they?

[00:18:24] Speaker 02:
I mean, I think 5% or 10% is the typical.

[00:18:27] Speaker 00:
No, Your Honor, the evidence in the case was undisputed that the range that Endo used in the case was the same range that the generics have used to make their drugs.

[00:18:38] Speaker 00:
In fact, we charted, we took the ranges,

[00:18:41] Speaker 00:
And we charted all of the generics dissolution profiles.

[00:18:46] Speaker 00:
And they filled the entire range and didn't go beyond the range that I had claimed.

[00:18:50] Speaker 00:
That was the so-called rainbow chart, which was produced as a district court.

[00:18:55] Speaker 00:
We also had evidence from Dr. Fasihi on what the ranges were that are used by the FDA and how the industry works.

[00:19:03] Speaker 00:
He also looked at other patents in the field to see what do people think is reasonable as far as making claims with respect to ranges.

[00:19:10] Speaker 00:
And he concluded that our range was reasonable.

[00:19:12] Speaker 00:
In fact, it was much narrower than in Oshlak or some of the other courts.

[00:19:15] Speaker 00:
So there was substantial evidence at the trial about the reasonableness of the ranges, even though it was not our burden.

[00:19:22] Speaker 02:
My second question is, you don't defend, do you, the district court's avoidance of infringement rationale for rejecting the written description?

[00:19:32] Speaker 00:
I think they're overreading that, and that's not what the district court was saying.

[00:19:36] Speaker 00:
We made the argument.

[00:19:37] Speaker 00:
from a policy perspective, you can't be limited just to the exact line of the dissolution profile.

[00:19:45] Speaker 00:
And the defendants ultimately admitted, yes, you're entitled to a reasonable range.

[00:19:49] Speaker 00:
And we said we're entitled to a reasonable range.

[00:19:52] Speaker 00:
And that's because you can possess the invention and you can claim it.

[00:19:56] Speaker 00:
And it's important that you claim it properly.

[00:19:58] Speaker 00:
But it's also important under the policy of the patent law that the inventor get to claim the full scope of his or her invention.

[00:20:06] Speaker 00:
And that's what we were talking about.

[00:20:07] Speaker 00:
And that's what I believe the district judge was referring to.

[00:20:10] Speaker 00:
But again, I want to stress that the written description point made here and the way they've argued it, they all but abandoned the argument at trial.

[00:20:18] Speaker 00:
There was only six pages of argument and a full day of closings on written description.

[00:20:22] Speaker 00:
Now on appeal, it's been elevated into a significant issue.

[00:20:26] Speaker 00:
But in their brief, where they're trying to demonstrate that the district court was clearly erroneous, all they rely on is Dr. Lee's testimony.

[00:20:34] Speaker 00:
who was not a qualified expert in the area.

[00:20:36] Speaker 00:
We had another inventor who was an expert, and we had Dr. Fasihi's testimony.

[00:20:41] Speaker 00:
So it is clearly not erroneous for the district court to have concluded that they failed to meet the burden.

[00:20:49] Speaker 02:
Could I ask a question about the pharmacokinetic limitations?

[00:20:54] Speaker 02:
Yes, sir.

[00:20:55] Speaker 02:
The argument is made that those are inherent and therefore do not add anything of patentable significance.

[00:21:01] Speaker 00:
Could you address that?

[00:21:02] Speaker 00:
Certainly, Your Honor.

[00:21:03] Speaker 00:
It goes back to the first point.

[00:21:05] Speaker 00:
When you're proving an obviousness case, you have to establish that the elements are in the prior arm, and then we go to the next question, combinations.

[00:21:12] Speaker 00:
So they needed to deal with the problem that there are a lot of pharmacokinetic limitations, including fed and fasted data, which meant that when you gave the drug to the patient, a pool of patients, that you'd have no more than a 20% difference between fed and fasted, which is highly desirable.

[00:21:31] Speaker 00:
Because it means you don't have to give the kind of food warnings that you might need with some drugs where you say, you must take this with food, et cetera, et cetera.

[00:21:38] Speaker 00:
So they needed to establish that the food effect, for instance, was inherent in all formulations.

[00:21:45] Speaker 00:
Otherwise, they have a problem.

[00:21:47] Speaker 00:
But they didn't present any evidence on that point.

[00:21:49] Speaker 00:
In fact, their expert, Dr. Elmquist, admitted that that element was not inherent.

[00:21:55] Speaker 00:
So it goes to how you build an obviousness case.

[00:21:58] Speaker 00:
You identify the claim.

[00:22:00] Speaker 00:
Then you say, here are the elements.

[00:22:01] Speaker 00:
Here are why the elements would be combined.

[00:22:03] Speaker 00:
You look at secondary considerations.

[00:22:06] Speaker 00:
They failed at the first step on obviousness.

[00:22:08] Speaker 00:
They failed to demonstrate that these elements were in the prior argument.

[00:22:12] Speaker 00:
And it's similar to what happened at the PTAB, which held that the multiple peaks were not inherent.

[00:22:16] Speaker 00:
And that was after expert testimony from one of the experts in our case for the defense.

[00:22:20] Speaker 00:
And obviously, the standard is more difficult to reach for a challenger in the district court.

[00:22:26] Speaker 00:
So I want to address.

[00:22:30] Speaker 00:
Briefly, the cross appeal.

[00:22:33] Speaker 01:
Before you go on to the cross appeal, I'd like you to address the injunction issue.

[00:22:37] Speaker 01:
And in particular, I'd like you to focus on the district court's suggestion that ENDO lost 11% of its market share to Actavis alone.

[00:22:48] Speaker 01:
I am struggling to find the substantial evidence to support a conclusion that Actavis' 11% market share would have

[00:22:59] Speaker 01:
entirely to endo as opposed to largely to impacts as opposed to endo.

[00:23:04] Speaker 01:
So I'd like to address the issue, but in particular, maybe your co-counsel at the table could find the evidence that I'm going to ask you to present to me that supports that view.

[00:23:17] Speaker 01:
In particular, in the appendices, I want to see the evidence that supports

[00:23:21] Speaker 01:
this finding by the district court.

[00:23:23] Speaker 01:
So you want to start with the argument and get him started on finding the evidence?

[00:23:32] Speaker 00:
Yes, Your Honor.

[00:23:36] Speaker 00:
So we have a situation here which is a little bit unusual.

[00:23:41] Speaker 00:
We have a branded product, and then we have a generic entrant, and then we have a second generic entrant.

[00:23:48] Speaker 00:
And the question is, does the second generic entrant

[00:23:52] Speaker 01:
damage the branded company or does the... And at trial, unless I'm mistaken, most of the testimony and evidence actually went to whether additional generics like Roxanne, not even just Impacts and Actavis, but whether the permission of additional entrants into the generic market would harm Endo.

[00:24:10] Speaker 01:
That's what I read in terms of the expert discussion.

[00:24:13] Speaker 01:
Most of his testimony, it seemed to me,

[00:24:15] Speaker 01:
went to not just Actavis, but whether or not Roxanne or others should be allowed into the market and what effect they would have for Endo on the market.

[00:24:25] Speaker 01:
Is that right?

[00:24:26] Speaker 01:
Is that what was going on at the time?

[00:24:27] Speaker 00:
At the time of the trial, of course, Actavis had launched.

[00:24:31] Speaker 00:
So the testimony was about what would happen if you had generics on the market.

[00:24:35] Speaker 00:
If you were one, two, three, they all harmed the branded company.

[00:24:40] Speaker 00:
They had a theory that all of their sales were coming from impacts.

[00:24:45] Speaker 00:
There was no support for that whatsoever.

[00:24:48] Speaker 00:
We submitted evidence from Dr. Bell.

[00:24:52] Speaker 01:
OK, why don't you direct me right to that evidence.

[00:24:56] Speaker 00:
In the 36,627.

[00:24:59] Speaker 01:
What volume of the appendix are you looking at?

[00:25:01] Speaker 00:
That is in volume.

[00:25:02] Speaker 00:
Three.

[00:25:03] Speaker 00:
Four.

[00:25:04] Speaker 00:
Oh, four?

[00:25:05] Speaker 00:
36?

[00:25:05] Speaker 02:
Oh, 36,000.

[00:25:06] Speaker 00:
36,000, yes.

[00:25:07] Speaker 00:
36,627.

[00:25:09] Speaker 00:
That's a long try.

[00:25:11] Speaker 00:
Hold on.

[00:25:11] Speaker 01:
Give me a sec.

[00:25:15] Speaker 01:
I'll give you time.

[00:25:15] Speaker 01:
You're a minute to dress your cross appeal.

[00:25:17] Speaker 01:
Don't worry about that.

[00:25:18] Speaker 01:
Thirty six thousand what?

[00:25:20] Speaker 00:
Six hundred and twenty seven.

[00:25:29] Speaker 01:
Okay.

[00:25:29] Speaker 01:
What is this document you directed me to?

[00:25:35] Speaker 01:
This is the one with the yellow pages, right?

[00:25:37] Speaker 00:
This is the yellow pages.

[00:25:38] Speaker 01:
This doesn't look like testimony.

[00:25:40] Speaker 01:
This looks like a brief.

[00:25:40] Speaker 00:
It's a declaration of Brian Lordy submitted in the post-trial.

[00:25:43] Speaker 00:
And 36-27 to 36-630 addresses these issues, as well as some of Dr. Lordy's, not Dr. Lordy, Mr. Lordy's testimony at trial relating to the inability to promote

[00:26:02] Speaker 01:
Yeah, but the header, unless I'm mistaken, says, if multiple generics are allowed on the market, the drastic price erosion will be permanent.

[00:26:10] Speaker 00:
So this... No, no, but we had multiple generics on.

[00:26:13] Speaker 00:
The question that was being addressed at the district court was whether or not all these generics should be barred.

[00:26:18] Speaker 01:
Okay, show me where in here.

[00:26:20] Speaker 01:
The district court has found that ENDO would have gotten the entire 11 percent of the Nectangos lost.

[00:26:27] Speaker 01:
That's what the district court expressly found.

[00:26:29] Speaker 01:
Where is the support for that fact-finding?

[00:26:32] Speaker 01:
Show me precisely what sentence in this expert declaration supports the idea that ENDO lost 11%.

[00:26:39] Speaker 01:
The entire activist market would have been earned to ENDO.

[00:26:44] Speaker 00:
I'm unable to do that right now, Your Honor.

[00:26:46] Speaker 01:
I posit you're unable to do it because it doesn't exist in the record.

[00:26:52] Speaker 01:
Where is it?

[00:26:53] Speaker 00:
The testimony on this came from

[00:26:56] Speaker 00:
Mr. Bell, a trial, and this statement.

[00:27:00] Speaker 00:
If you feel that's inadequate to support the finding of Mr. Gordon.

[00:27:02] Speaker 01:
Well, show me what in the statement does it.

[00:27:04] Speaker 01:
I'll give you extra time.

[00:27:05] Speaker 01:
Stand there and read it.

[00:27:15] Speaker 00:
I'm unable to find it, Your Honor.

[00:27:17] Speaker 00:
Your Honor has read this more recently and perhaps more carefully than I have recently.

[00:27:22] Speaker 00:
The question, though, our preliminary injunction finding, though, did not rest entirely on this.

[00:27:26] Speaker 01:
Look, I'm sensitive to the idea that this is a big case with a lot of issues, and you're dealing with a shotgun-style appeal and cross-appeal.

[00:27:34] Speaker 00:
Right.

[00:27:34] Speaker 01:
You added to the mass, so you're not immune from it.

[00:27:39] Speaker 00:
But let me put it this way.

[00:27:42] Speaker 01:
I don't see evidence that supports this conclusion by the district court, which is critical to the injunction.

[00:27:47] Speaker 01:
The injunction requires irreparable harm.

[00:27:49] Speaker 01:
The irreparable harm, he found, it seems,

[00:27:52] Speaker 01:
is the lost sales.

[00:27:54] Speaker 01:
And I'm having trouble finding support for the idea that Endo lost the sales that Octavius made as opposed to impacts.

[00:28:04] Speaker 00:
Your Honor, one of the difficulties in the case from an injunctive relief is designed to prevent irreparable harm.

[00:28:12] Speaker 00:
It's difficult to compensate with monetary damages.

[00:28:16] Speaker 00:
Whenever you have competition, and we have competition here, there is going to be some lost sales

[00:28:22] Speaker 00:
to endow, there may also be lost sales to impacts.

[00:28:26] Speaker 00:
The question is if you can't determine

[00:28:28] Speaker 00:
where the sales are coming from definitively.

[00:28:31] Speaker 00:
But it's highly likely in the circumstance that some of the sales were coming from end-out.

[00:28:35] Speaker 01:
And that if they stay on the market... But where is the evidence that says that?

[00:28:39] Speaker 01:
Because you've got two generics, one of which is a licensed generic, and those two are substitutable for each other.

[00:28:45] Speaker 01:
You've got a competitive product in the brand which is not substitutable for the two generics or vice versa.

[00:28:52] Speaker 00:
They're substitutable, but they're not automatically... Only at the prescription level.

[00:28:57] Speaker 00:
They're not automatically substitutable, but they are substitutable.

[00:29:00] Speaker 00:
And we had testimony from Mr. Lordy.

[00:29:03] Speaker 01:
But you're the one asking for the injunction.

[00:29:05] Speaker 01:
So you have to show the irreparable harm.

[00:29:08] Speaker 01:
So where is the irreparable harm?

[00:29:10] Speaker 01:
Where is the proof that Endo lost sales?

[00:29:12] Speaker 01:
What person testified?

[00:29:15] Speaker 00:
Mr. Lordy testified to it at trial that the generics on the market

[00:29:22] Speaker 00:
which were both a combination of products like activist and the CRF product, that those would cause harm to Endo through loss of ability to promote products, that's an appendix 36630, loss of ability to conduct R&D 36630, market share, and there was testimony about irreparable harm at the appendix at 1243, 1262 to 64, 71, 72,

[00:29:50] Speaker 00:
75 to 77.

[00:29:51] Speaker 01:
So I'm on several of the pages that you cited, and I see nothing that supports what you're claiming.

[00:29:56] Speaker 01:
So how about this?

[00:29:57] Speaker 01:
Why don't you, is close-up business tomorrow unreasonable?

[00:30:01] Speaker 01:
Submit to me two pages.

[00:30:03] Speaker 00:
Certainly, Your Honor.

[00:30:04] Speaker 01:
We can do that.

[00:30:04] Speaker 01:
Along with specific sites to whatever it is that you say, do you have any objections to me requesting this?

[00:30:12] Speaker 01:
No.

[00:30:12] Speaker 01:
Two pages, singles-based, letter brief, with sites to the pages in the JA, which you believe

[00:30:18] Speaker 01:
demonstrate substantial evidence for the district court's fact findings related to irreparable harm and in particular you understand that what I'm asking you to justify is where is the proof that he could have relied on for his conclusion that quote specifically Endo lost 11 percent of its market share to Actavis alone.

[00:30:39] Speaker 01:
You see that's his fact finding and I find that to be bewitching.

[00:30:44] Speaker 00:
I understand your honor we will address that I also point out

[00:30:47] Speaker 00:
that even if that fact went away, that even if there was 1% of the sales or some percent of the sales, that would still be irreparable harm.

[00:30:55] Speaker 00:
Because how are we to calculate?

[00:30:57] Speaker 00:
How are we to know what it is?

[00:30:58] Speaker 00:
And how are we to know what it's going to be three years from now if they had stayed on the market with continued erosion of our product?

[00:31:06] Speaker 00:
The fact that we can't identify with absolute precision exactly where the sales came from

[00:31:13] Speaker 00:
supports a finding of irreparable harm because we can't compensate it with money damages because we don't know exactly what it is.

[00:31:19] Speaker 00:
Let me just address our cross appeal which becomes relevant as the injunction goes away.

[00:31:25] Speaker 00:
So there's a, in this case, 271E4 of course provides for mandatory

[00:31:34] Speaker 00:
Injunctions in the case of a defendant which infringes under the Hatch-Waxman regime.

[00:31:43] Speaker 00:
In this case, some of the defendants, the patents at issue were issued after the applications had been filed, but before they had been completed.

[00:31:55] Speaker 00:
Activists says that their application was approved.

[00:31:59] Speaker 01:
Can I ask you a quick question?

[00:32:01] Speaker 01:
You said this issue becomes relevant if we take away the injunction.

[00:32:05] Speaker 01:
I thought we had to reach the 271E2 issue either way, no matter how we resolved the appeal.

[00:32:11] Speaker 01:
Are you suggesting that the 271E2 issue, in particular the statutory interpretation of the submission language, is that only something this court reaches if we don't otherwise affirm the case?

[00:32:23] Speaker 00:
I think that's right, Your Honor.

[00:32:25] Speaker 00:
Under 271A, the judge found that we were entitled to injunctive relief.

[00:32:31] Speaker 00:
The injunction that we would get under 271E would be coextensive, I think, with the 271A injunction.

[00:32:39] Speaker 00:
So it's only if the 271A injunction goes away that we then have to face the issue of whether or not there's an automatic right to injunctive relief under the Hatch-Waxman Act.

[00:32:47] Speaker 00:
And that's why we filed the cross appeal.

[00:32:49] Speaker 01:
Okay, so your appeal is sort of a conditional cross appeal.

[00:32:52] Speaker 01:
Yes, Your Honor.

[00:32:53] Speaker 00:
Okay.

[00:32:53] Speaker 00:
Yes, Your Honor.

[00:32:55] Speaker 00:
I'm way past my time.

[00:32:56] Speaker 01:
Why don't you sit down and we'll hear from Mr. Aquinn and if he touches upon your cross appeal, we'll give you a little time.

[00:33:08] Speaker 03:
Thank you Judge Moore.

[00:33:16] Speaker 03:
Judge Bryson, to come back to one of the first questions that you asked, there were a number of references

[00:33:20] Speaker 03:
that were at issue here that were not in the IPR, including the combination of Webster and Penn West, which was addressed by Dr. Kiddich.

[00:33:29] Speaker 03:
Mr. Black suggested that we're raising the profile of the written description argument on appeal.

[00:33:36] Speaker 03:
I don't think that's a fair characterization.

[00:33:37] Speaker 03:
First, we specifically asked to brief the written description issue to the district court.

[00:33:43] Speaker 03:
But, frankly, the district court seemed confused at trial, and I think that confusion is reflected in the opinion.

[00:33:48] Speaker 03:
The district court denied the opportunity for that briefing.

[00:33:51] Speaker 03:
The district court had no post-trial briefing at all, despite us requesting it.

[00:33:56] Speaker 03:
So I don't think that characterization is fair.

[00:33:59] Speaker 03:
And I think if you look at the transcript excerpts that we've provided, you see that the written description issue was certainly vetted with the district court.

[00:34:06] Speaker 03:
We've heard a lot about Dr. Fasihi's opinions today.

[00:34:10] Speaker 03:
Again, the district court doesn't mention those at all in his opinion.

[00:34:17] Speaker 03:
Also, none of what Dr. Fasihi says goes to anything in the specification on why this extrapolation is reasonable.

[00:34:27] Speaker 03:
His opinion is essentially just the general proposition that scientists can extrapolate.

[00:34:31] Speaker 03:
But again, you have them making arguments about the unique properties of oxymorphone, the need to specifically tailor oxymorphone's dissolution profile, and that's the red brief pages 43 to 45,

[00:34:43] Speaker 03:
Given all that, I don't see how they can rely on Dr. Fasihi's generic statements.

[00:34:48] Speaker 03:
With regard to pharmacokinetics, the multiple peaks point is inconsistent with what they argued in NRECAL.

[00:34:56] Speaker 03:
At page 1069, you see this court actually reversing on secondary considerations because they argued that multiple peaks were inherent to the entire range.

[00:35:05] Speaker 03:
And of course, in Santeros, this court held that an obvious formulation cannot become non-obvious by administering the patent and claiming

[00:35:11] Speaker 03:
the result.

[00:35:12] Speaker 03:
Finally, with respect to the issue of the injunction, as the court has observed, we don't think that they presented evidence to show that there was irreparable harm.

[00:35:25] Speaker 03:
The fact that you have a license generic on the market and it's the license generic that would be automatically substitutable, not their product,

[00:35:34] Speaker 03:
cuts against the notion that there is irreparable harm, and the court should, at a minimum, reverse with respect to the injunction.

[00:35:40] Speaker 01:
Did the court, though, the court, without going into detail, though, also said they would lose goodwill?

[00:35:48] Speaker 01:
He named other stuff, which could stand alone and justify an irreparable harm conclusion, even if the evidence doesn't justify the lost sales in particular?

[00:36:01] Speaker 01:
What about that?

[00:36:02] Speaker 03:
Well, Judge Moore, again, I think

[00:36:03] Speaker 03:
There's a lot of conclusory assertions about irreparable harm that the district court's opinion make.

[00:36:09] Speaker 03:
And I think that even with respect to those, it's very difficult to reconcile that with the evidence of record and particularly the fact that you had a generic that was already on the market.

[00:36:20] Speaker 03:
Any sort of harm to goodwill because there's somebody else who's already out there marketing a competing product already exists, I think is belied by the posture that this case arises.

[00:36:30] Speaker 03:
I mean, this is the unique case where you don't have the situation

[00:36:33] Speaker 03:
where you have a brand and generics are looking to enter the market, you have a license generic, and there was no AB substitutability unless it was done specifically at the prescription level.

[00:36:46] Speaker 01:
OK.

[00:36:47] Speaker 01:
Thank you, Mr. Quinn.

[00:36:48] Speaker 01:
Thank you, Judge.