[00:00:01] Speaker 03:
And that is what causes it to pass step two.

[00:00:17] Speaker 03:
I also think that if it would pass both steps

[00:00:38] Speaker 00:
Okay, the next argued case is number 171694, Memento Pharmaceuticals Incorporated against Crystal Myers Squibb Company.

[00:00:54] Speaker 00:
Ms.

[00:00:54] Speaker 00:
Maynard.

[00:00:55] Speaker 02:
May it please the court?

[00:00:57] Speaker 02:
Deanne Maynard for Memento Pharmaceuticals.

[00:01:00] Speaker 02:
The patent at issue here claims nothing more than the textbook recipe

[00:01:06] Speaker 04:
Can we talk about appealability first?

[00:01:09] Speaker 02:
Yes, sir.

[00:01:10] Speaker 04:
Which is sort of a predicate question.

[00:01:13] Speaker 02:
It is, Your Honor.

[00:01:16] Speaker 04:
Tell me if I'm mistaken about this, because the record's not entirely clear.

[00:01:22] Speaker 04:
Do you agree that the product that your client has in clinical trials would infringe the claims of the 239 patent?

[00:01:33] Speaker 02:
Yes, Your Honor.

[00:01:35] Speaker 04:
And as I understand it, your client has said there's a substantial risk that they'd have to abandon the pursuit of that product if the board's decision here stood, right?

[00:01:50] Speaker 02:
Right.

[00:01:50] Speaker 02:
We would have to change the formulation.

[00:01:52] Speaker 01:
Can you explain how we're supposed to understand the May 2, 2017 earnings call?

[00:02:00] Speaker 01:
I'm not sure who this is.

[00:02:02] Speaker 01:
a representative from the company who said, based on the court's decision, this is a quote at A3845, and when it says court's decision, it was referring to the patent board.

[00:02:22] Speaker 01:
Based on the patent board's decision, we have adjusted our strategy to allow us to proceed independent of the outcome.

[00:02:32] Speaker 01:
One, I think, fair reading of that statement is, from Momenta's point of view, it doesn't matter whether this patent here is valid or not, because they are going to be able to proceed independent of the validity of this patent.

[00:02:51] Speaker 01:
Am I misreading that?

[00:02:53] Speaker 02:
Yes, Your Honor.

[00:02:55] Speaker 02:
As the declaration from Mr. Wheeler explains,

[00:02:59] Speaker 02:
What that means is if the Patent Office's refusal to cancel the patent stands, Momentum will be forced to spend more money changing its plans and lose some cost that it's already spent, which it's already spent millions of dollars developing the current formulation.

[00:03:21] Speaker 02:
And now it's faced with the Patent Office's erroneous refusal to cancel this patent and its

[00:03:28] Speaker 02:
it's at a fork in the roads as a result of that agency decision.

[00:03:32] Speaker 02:
And that's the decision that harms us and it harms Momenta now, today.

[00:03:36] Speaker 02:
And so the fact, in fact, Judge Chan, I would suggest that the fact that Momenta is forced to adjust its business strategy as a result of this erroneous board decision is itself proof of immediate harm, concrete harm to Momenta that it will suffer today if it's not able to bring this challenge and get this decision reversed

[00:03:57] Speaker 02:
And that would be true regardless of whether when it files its application it ultimately gets approved.

[00:04:03] Speaker 02:
The harm is from the agency's refusal to cancel a patent.

[00:04:07] Speaker 02:
And Momenta being forced now.

[00:04:09] Speaker 01:
Well, I guess what I'm also wondering is about what the November 1 press release indicating that something went wrong with the Phase 1 trial.

[00:04:18] Speaker 01:
And maybe it's the problematic Phase 1 trial that, if anything, might cause Momenta to somehow pivot with its

[00:04:27] Speaker 01:
development of a formulation.

[00:04:30] Speaker 01:
And so could you describe what, how are we supposed to understand the content of that press release?

[00:04:39] Speaker 01:
It was a little technical about endpoints and pharmacokinetics and I don't really understand what that means, but can you nevertheless try to explain to me where is Momentum now?

[00:04:49] Speaker 01:
All I could tell was it was bad news.

[00:04:52] Speaker 01:
So where are they in the face of that

[00:04:55] Speaker 01:
bad news.

[00:04:56] Speaker 01:
It has nothing to do with the patent.

[00:04:57] Speaker 01:
It has everything to do with the formulation development.

[00:05:00] Speaker 02:
But the point you just made, Your Honor, is the key one for present purposes.

[00:05:04] Speaker 02:
It has nothing to do with this patent.

[00:05:06] Speaker 02:
And Momenta, my understanding of what it means to fail to meet the end points of the PK study is that when it was doing a comparison of its product to the Orencia product,

[00:05:25] Speaker 02:
PKs were not identical.

[00:05:28] Speaker 02:
But that has nothing to do with this patent.

[00:05:30] Speaker 04:
This patent claims no.

[00:05:31] Speaker 04:
Let me ask you a question.

[00:05:33] Speaker 04:
Hypothetically, and I know that this isn't necessarily the case here, suppose that you started clinical trials.

[00:05:40] Speaker 04:
It was a failure.

[00:05:41] Speaker 04:
The company announced that it was abandoning this effort because it just didn't work.

[00:05:46] Speaker 04:
I mean, that would deprive you of standing, wouldn't it?

[00:05:50] Speaker 02:
I think, respectfully, that would make the case moot.

[00:05:52] Speaker 02:
We had standing when we noted our appeal.

[00:05:55] Speaker 04:
OK, well, it would make it move.

[00:05:56] Speaker 04:
There wouldn't be anything more to complain about, even though you might choose in the future some other formulation which also might infringe.

[00:06:08] Speaker 02:
Well, I think everything depends on its facts, Judge Dyke, its fact-specific inquiry.

[00:06:13] Speaker 02:
If there were, I mean, we're speaking hypothetically now because MOMENTA has not banned the program.

[00:06:19] Speaker 00:
OK, let me raise another question.

[00:06:21] Speaker 00:
Is it clear that you're not

[00:06:24] Speaker 00:
arguing or disputing that you could not bring a declaratory judgment action in the district court under Article 3, that there would not be Article 3 standing in the district court.

[00:06:39] Speaker 00:
Is that something that you are disputing?

[00:06:42] Speaker 02:
I would dispute that, Judge Newman, but I think that would be a different, you would be asking different questions.

[00:06:47] Speaker 02:
This court's decision in AMJB... Let's answer the question.

[00:06:51] Speaker 00:
Your position is that

[00:06:54] Speaker 00:
you would be in a position to bring a declaratory judgment action.

[00:06:59] Speaker 00:
That is, that there would be Article III standing in the district court.

[00:07:04] Speaker 02:
I think it would be a different question.

[00:07:07] Speaker 00:
So I'm not conceding it because this court's decision... But Article III, the precedent that we are trying to figure out and to apply, raised the question of Article III.

[00:07:20] Speaker 00:
And so it's something that I think you can.

[00:07:23] Speaker 00:
should not ignore, and I'm not sure that we can ignore.

[00:07:27] Speaker 00:
That's why I asked for your position.

[00:07:29] Speaker 02:
Thank you.

[00:07:30] Speaker 02:
And I want to explain the difference.

[00:07:32] Speaker 02:
So I think that would be a harder case because we would have to meet the immediacy and rightness concern that concerned this court in Amgen.

[00:07:39] Speaker 00:
Would it be a hard... I would think it would be a very easy case.

[00:07:42] Speaker 00:
Precedent is against you strongly.

[00:07:46] Speaker 02:
The difference would be between this and Sandoz v. Amgen would be this court made the point in Sandoz v. Amgen that Sandoz there had put forth no proof that it needed a decision now, that it was suffering harm in the absence of judicial ruling at that point in time.

[00:08:07] Speaker 02:
if it didn't get a ruling on the merits of the patent.

[00:08:10] Speaker 02:
And that's the distinguishing factor here.

[00:08:12] Speaker 02:
We've put in ample evidence that we are harmed right now by this decision by the Patent Office.

[00:08:17] Speaker 02:
So I think it would be a harder question, Judge Newman.

[00:08:19] Speaker 02:
It's a different question, though, than the one that you're presenting with me.

[00:08:22] Speaker 01:
My understanding is that the opinion did recognize that Sandoz had put in a lot of time, and it was very costly to get all the way up to phase three, which, whatever that is, it sounds like it's further along than phase one.

[00:08:35] Speaker 01:
But the focus of the opinion was there just wasn't enough of an immediacy or reality to suggest that at that point in time, at phase three, Sandoz had something that could be called a concrete harm that translates to a justiciable case or controversy.

[00:08:56] Speaker 01:
And so that's why Sandoz didn't get its DJ action to go forward.

[00:09:03] Speaker 02:
To be clear, it was that that case turned on rightness concerns.

[00:09:06] Speaker 02:
This court was concerned that it wasn't sufficiently right.

[00:09:10] Speaker 02:
I don't want to fight that case because I'm not here trying to win that case.

[00:09:13] Speaker 02:
We haven't brought a DJI action.

[00:09:15] Speaker 02:
We're challenging wrongful agency action.

[00:09:16] Speaker 02:
I think that's crucial.

[00:09:17] Speaker 02:
But the point I'm making is based on Sandoz v. Amgen at pages 1281 to 1282, where the court says, at the same time, Sandoz has not shown that it will suffer an immediate and substantial adverse impact

[00:09:32] Speaker 02:
from not being able to seek or secure a patent adjudication before filing an application for FDA approval.

[00:09:38] Speaker 02:
And in contrast, we have shown that here.

[00:09:41] Speaker 02:
We have facts in the record, a declaration from the CEO backed up by public filings subject to the SEC laws that we've spent lots and lots of money developing.

[00:09:52] Speaker 01:
So the point you're making is because your moment is years further behind in the development process than Sando's.

[00:10:02] Speaker 01:
it has a more significant harm that it is currently suffering than what Sandoz was suffering, even though Sandoz was at phase three and not phase one?

[00:10:12] Speaker 02:
The point I'm making is what the court's decision says, is that Sandoz did not put forward the record that it was going to make a business decision, as we are here, based on whether or not the patent stands after

[00:10:26] Speaker 02:
the agency action that were challenging.

[00:10:28] Speaker 04:
Well, the sand out there was that they didn't provide any evidence as to how the product mapped onto the patent claims.

[00:10:34] Speaker 02:
That too, Your Honor.

[00:10:35] Speaker 02:
And so that was it.

[00:10:36] Speaker 04:
And they didn't say that they were going to be affected by the decision one way or the other in their planning.

[00:10:41] Speaker 02:
And I think they were claiming non-infringement, at least the opinion states that.

[00:10:46] Speaker 02:
But we are not trying to bring a declaratory judgment action, Judge Newman.

[00:10:50] Speaker 02:
I think that would present different and harder questions.

[00:10:53] Speaker 02:
under the Supreme Court's precedent, we don't have to meet, and this court has noticed, we don't have to meet the rightness and immediacy concerns of the DJI action.

[00:11:01] Speaker 02:
In a DJI action, you can decide as a court, we're going to decide this later.

[00:11:04] Speaker 02:
This is now or never for Momenta.

[00:11:07] Speaker 02:
We brought a petition to the agency to cancel these claims.

[00:11:10] Speaker 02:
That's a distinction from a DJI.

[00:11:13] Speaker 02:
Agency action.

[00:11:14] Speaker 02:
And I should note, the agency granted this patent in 2013.

[00:11:19] Speaker 02:
Momenta started spending money developing this biosimilar before that.

[00:11:23] Speaker 02:
And then Momenta took advantage here of the IPR process, which Congress created precisely for this situation, to go to the patent office and say, you've made a mistake.

[00:11:32] Speaker 02:
You've granted a patent that shouldn't have been granted.

[00:11:35] Speaker 02:
And then we're telling this court, it's causing us immediate harm that the PTO has failed.

[00:11:41] Speaker 01:
But at the same time, yes, Congress created these new administrative proceedings, but didn't in hand also turn over the keys to the federal court system.

[00:11:51] Speaker 01:
And so, therefore, that's why consumer watchdogs wasn't able to come here.

[00:11:55] Speaker 01:
Neither was Phigenics.

[00:11:56] Speaker 01:
I'm not saying that Momenta is like those two.

[00:11:59] Speaker 01:
Obviously, Momenta here is an aspiring competitor.

[00:12:05] Speaker 01:
It's not a competitor yet.

[00:12:06] Speaker 01:
And it's years away from being a true competitor.

[00:12:10] Speaker 01:
And as we observed in DeSando's opinion, there's a lot of speculation to have to be made through a chain of

[00:12:20] Speaker 01:
contingencies to know whether or not you and your product that you say you've selected and think would infringe actually is going to make it all the way through to even filing an FDA application, let alone having it approved for you to enter the market.

[00:12:39] Speaker 01:
So I think that's the concern that we have.

[00:12:41] Speaker 01:
If it is true that you have to have a concrete harm, despite the fact that immediacy

[00:12:49] Speaker 01:
and redressability concerns are somewhat relaxed, you still have to have a concrete harm.

[00:12:55] Speaker 01:
That's the concern that we have, or at least I have, right now.

[00:12:59] Speaker 02:
And under established agency administrative review case law, Judge Chen, we have immediate harm.

[00:13:05] Speaker 02:
We have that harm regardless of whether we ever file an application.

[00:13:09] Speaker 02:
Mr. Wheeler attests that Appendix 3524, paragraph 32,

[00:13:15] Speaker 02:
Momenta is at a fork in the road in the development program as a result of the Patent Office's wrongful action.

[00:13:22] Speaker 02:
And that's the action that causes Momenta harm.

[00:13:24] Speaker 02:
We've spent millions of dollars developing a biosimilar that practices this patent.

[00:13:30] Speaker 02:
And if this patent is allowed to stand now, Momenta is going to have to decide to abandon sunk costs, spend millions more changing direction

[00:13:39] Speaker 01:
or to forge ahead in the face of certain... But expenditure of money, even large amounts of money, to deal with a possible harm down the road, that's what the Supreme Court held and Clapper is not necessarily alone good enough.

[00:13:57] Speaker 02:
This is not Clapper, because what was...

[00:14:01] Speaker 02:
Hypothetical in Clapper was whether or not the agency there was ever going to act against the people who were petitioning the court.

[00:14:08] Speaker 04:
Well, the agency regulation didn't apply directly to the people before the court.

[00:14:12] Speaker 04:
Whereas here, the agency regulation, that is the imposition of infringement liability, applies directly to Monsanto, to Memento.

[00:14:23] Speaker 02:
Exactly, Judge Steig.

[00:14:24] Speaker 02:
But even more than that, not just the final infringement, this ruling applies to us in two ways.

[00:14:31] Speaker 02:
We want to practice this subject matter.

[00:14:32] Speaker 02:
We're currently practicing subject matter.

[00:14:34] Speaker 02:
We have concrete development plans.

[00:14:37] Speaker 02:
This is what distinguishes us from Clapper.

[00:14:39] Speaker 02:
We're much like the farmers in Masanto, Judge Chen, the alfalfa growers, who wanted to plant and wanted to keep their seed untainted and had to spend monies because of the fear of taint.

[00:14:50] Speaker 02:
And we've proven the facts that are harming us here.

[00:14:52] Speaker 02:
The board has acted.

[00:14:54] Speaker 02:
And because of its decision, we're at a fork in the road.

[00:14:57] Speaker 02:
We're going to have to spend more money

[00:15:00] Speaker 02:
And that's true.

[00:15:01] Speaker 02:
This court has held that having to spend more money, even in the face of maybe not enforcement, so that was this court's holding in bio.

[00:15:09] Speaker 02:
This court held that pre-enforcement challenge to a DC statute to the pharma industry, that bio could challenge that.

[00:15:17] Speaker 02:
The companies there were spending money to avoid potentially having this law enforced against them under a reasonable fear.

[00:15:25] Speaker 02:
That unlike in Clapper.

[00:15:27] Speaker 01:
What if, hypothetically,

[00:15:29] Speaker 01:
There was some scientific study that conclusively and definitively found, and everybody agreed, that any would-be biosimilar applicant, after they spend $20 million trying to develop something that's a biosimilar, there's only a 1% chance that that formulation will actually ever enter the market.

[00:15:54] Speaker 01:
Because of all the vagaries of difficulties and uncertainty of the science,

[00:15:59] Speaker 01:
and then also getting through the FDA approval process.

[00:16:03] Speaker 01:
There's a study that says you only have a 1% chance of making it.

[00:16:07] Speaker 01:
Would that be enough?

[00:16:09] Speaker 02:
If you had facts like we do here, where we've asserted because of this wrongful... I'm just saying this is my hypothetical.

[00:16:15] Speaker 02:
It could be.

[00:16:16] Speaker 02:
Yes, it could be.

[00:16:16] Speaker 02:
I'm answering.

[00:16:17] Speaker 02:
I'm sorry.

[00:16:17] Speaker 02:
I just wanted to give a running lead to you.

[00:16:19] Speaker 02:
Okay, take your running lead.

[00:16:21] Speaker 02:
If you had facts like we have here, which is that we've spent

[00:16:24] Speaker 02:
all this money developing this biosimilar, and because of the board's action, which is what harms us now, we are forced to change paths, that is harm, even if there's a 1% chance we might ever get, because the harm is today.

[00:16:41] Speaker 02:
And that, in Clinton, the line item veto case from the Supreme Court, there the court expressly rejected the government's argument that they couldn't show they were ever going to get a deal.

[00:16:51] Speaker 02:
So that case involved a farmer's cooperative,

[00:16:54] Speaker 02:
who was complaining about President Clinton's line item veto of a tax credit that would benefit the kind of sales they were making.

[00:17:05] Speaker 02:
And the tax credit didn't go to them.

[00:17:07] Speaker 02:
The tax credit went to the would-be purchasers.

[00:17:09] Speaker 02:
But the Supreme Court held that because that took away, currently, took away a negotiating bargaining chip for the cooperative, they had injury, in fact, now, even though they could not show they would ever

[00:17:24] Speaker 02:
make a sale.

[00:17:25] Speaker 02:
And they rejected the government's argument that they couldn't show that as relevant.

[00:17:29] Speaker 02:
So the harm to Memento is from the agency action.

[00:17:33] Speaker 02:
This is not a DJ action.

[00:17:36] Speaker 02:
It's not an action really between us and Bristol-Myers Squibb.

[00:17:40] Speaker 02:
This is a petition to the Patent Office to cancel an invalid patent.

[00:17:44] Speaker 02:
They've refused to cancel that patent.

[00:17:46] Speaker 02:
We've come here on APA review.

[00:17:48] Speaker 00:
Well, no one's saying, at least at this stage in this case,

[00:17:53] Speaker 00:
that you could not bring the IPR action, right?

[00:17:57] Speaker 00:
The only question is whether it's appealable to us.

[00:18:01] Speaker 00:
That's right.

[00:18:02] Speaker 02:
OK.

[00:18:03] Speaker 02:
But the perversity of it is that we would be able to bring the IPR action but not appeal it despite its current concrete harm to us, placing us in this fork in the road where we'll have to make a decision one way or the other.

[00:18:18] Speaker 02:
And add to that, we're going to be a stop in the future.

[00:18:22] Speaker 02:
by this order.

[00:18:23] Speaker 02:
That order triggers us another way.

[00:18:24] Speaker 02:
This is another way we're directly regulated.

[00:18:26] Speaker 00:
Your theory is that even if it's not appealable, if we feel bound to apply cases like consumer watchdog and so on, that the estoppel would take effect?

[00:18:39] Speaker 01:
If there's no injury in fact, and there's no standing to appeal, then would the estoppel really for certain apply in such a certain

[00:18:52] Speaker 01:
situation because you never had a right to appeal that.

[00:18:55] Speaker 00:
I guess we don't know.

[00:18:56] Speaker 00:
I don't want to put you on the spot to hypothesize something that really is not an issue in this case.

[00:19:04] Speaker 02:
But the way around that problem is to recognize that moment it is being currently harmed today by the agency action that's... No, the way around is not to accept Article 3 standing if you don't have it.

[00:19:16] Speaker 00:
That's clear.

[00:19:18] Speaker 00:
This is what we have to decide.

[00:19:20] Speaker 00:
Let's hear from the other side.

[00:19:21] Speaker 00:
And we'll save you rebuttal time.

[00:19:24] Speaker 02:
May I make one quick point about the vacatur?

[00:19:26] Speaker 00:
Do you want a final word?

[00:19:27] Speaker 02:
About the vacatur.

[00:19:28] Speaker 02:
OK.

[00:19:29] Speaker 02:
We would request that if the court does decide that moment of lack, seeing that you vacate the board's decision, to take away any question that we would have to stop it.

[00:19:36] Speaker 00:
OK.

[00:19:37] Speaker 00:
Thank you.

[00:19:45] Speaker 05:
Mr. Sykes.

[00:19:48] Speaker 05:
Good afternoon, Your Honors.

[00:19:49] Speaker 05:
It's Christopher Sipes.

[00:19:50] Speaker 01:
Could you start with that last point that Chris Maynard just said?

[00:19:55] Speaker 05:
I'd be happy to, Your Honor.

[00:19:56] Speaker 05:
And I'll take up two parts about it.

[00:19:58] Speaker 05:
The first is whether vacature is appropriate here.

[00:20:01] Speaker 05:
And the guiding principle is actually of the Supreme Court's US Bancor case.

[00:20:06] Speaker 05:
Vacature is an extraordinary remedy.

[00:20:09] Speaker 05:
It requires momentum to show, not even merely that it's not dealing with a settlement situation.

[00:20:14] Speaker 05:
But it's dealing with when it's appropriate to vacate a decision below.

[00:20:17] Speaker 05:
We think, in fact, the standard is tougher here, because we're talking about an Article III court that lacks standing.

[00:20:23] Speaker 04:
Do we have any cases where there's an agency proceeding, which was ongoing, but the person complaining about it is found to lack standing on appeal, and the vacator question came up?

[00:20:35] Speaker 04:
Has this ever come up before?

[00:20:36] Speaker 05:
I'm not aware of a case.

[00:20:39] Speaker 05:
I'm not aware of a case in these circumstances.

[00:20:42] Speaker 05:
I will acknowledge, Your Honor, that this court in PPG v. Valspar, where it was the prevailing party which rendered the case moot, that the court there was willing to vacate the Lord Road.

[00:20:55] Speaker 05:
But that's following the Bancor approach.

[00:21:00] Speaker 05:
And the Bancor approach is that vacature is extraordinary and occurs

[00:21:06] Speaker 05:
only where it is the prevailing party that renders, that deprives the reviewing court of power.

[00:21:12] Speaker 01:
So the party in Valspar, if I recall, the party that received the adverse board decision wanted to undo that board decision on appeal.

[00:21:25] Speaker 01:
They had the right to appeal that.

[00:21:27] Speaker 01:
Correct.

[00:21:28] Speaker 01:
And then that was taken away from them by the other side who issued a

[00:21:34] Speaker 05:
Covenant not to sue.

[00:21:35] Speaker 01:
Broad covenant not to sue.

[00:21:36] Speaker 05:
Correct, Your Honor.

[00:21:37] Speaker 05:
And that's exactly Bancor.

[00:21:39] Speaker 05:
Under Bancor, if it's the prevailing party that deprives the party of its right to appeal, then vacate your... They haven't done anything to deprive the right to appeal.

[00:21:49] Speaker 04:
The question is whether they had standing in the first place.

[00:21:51] Speaker 04:
It's not as though they've taken some voluntary act, which has mooted the case.

[00:21:55] Speaker 05:
Your Honor, what I would say they've done here is they have taken the deliberate strategic action of coming in early.

[00:22:01] Speaker 05:
And I would note

[00:22:02] Speaker 05:
When they filed their petition in 2015, they hadn't started phase one trials.

[00:22:06] Speaker 05:
They knew, because there's statutory timing, that this IPR would be resolved.

[00:22:11] Speaker 04:
So let's talk about the appealability.

[00:22:13] Speaker 04:
It strikes me that your position is just inconsistent with, like, decades of the Supreme Court law about what injury is sufficient to allow somebody to challenge agency action, and that this is very unlike Phigenix consumer watchdog, where there wasn't really any.

[00:22:32] Speaker 04:
economic consequences to it.

[00:22:34] Speaker 04:
I mean, what Supreme Court case, in your view, supports the notion that with this kind of injury, that there's no right to seek judicial review?

[00:22:43] Speaker 05:
You want to believe Clapper is on all fours with this case?

[00:22:46] Speaker 04:
That's ridiculous.

[00:22:47] Speaker 04:
Clapper is a situation in which the party in question wasn't even regulated by the federal government.

[00:22:57] Speaker 04:
There is government regulation in the form of creating infringement liability against Momenta.

[00:23:04] Speaker 04:
This is not a sort of a third party who's standing aside from the federal regulation.

[00:23:09] Speaker 05:
Your Honor, I would point out that Momenta here is a third party to the PTO's action.

[00:23:14] Speaker 05:
The question is whether or not the PTO should revoke our patent rights as the patent.

[00:23:18] Speaker 04:
No, no, no, but they suffer legal consequences if the patent is upheld.

[00:23:22] Speaker 04:
There's a regulation directed to them.

[00:23:24] Speaker 04:
You cannot infringe this patent.

[00:23:26] Speaker 04:
as it's valid, right?

[00:23:29] Speaker 05:
Well, no, Your Honor, they would suffer injury if down the road they get approval and we sue them for infringement.

[00:23:35] Speaker 05:
They don't suffer harm from the PTO's action directly.

[00:23:38] Speaker 04:
I'm not talking about harm now.

[00:23:39] Speaker 04:
I'm saying there's a legal restriction on them imposed by the Patent Office granting and sustainability of this patent that they cannot infringe.

[00:23:50] Speaker 04:
Right?

[00:23:51] Speaker 05:
Well, Your Honor, it's not quite that, but there is an estoppel that arises as there was in consumer watch law.

[00:23:56] Speaker 04:
If there's a valid patent out there, they're regulated, right?

[00:23:59] Speaker 04:
They can't infringe.

[00:24:00] Speaker 05:
They cannot infringe if that is correct.

[00:24:03] Speaker 05:
They would infringe if we assert infringement down the road, if they're ever able to obtain approval.

[00:24:08] Speaker 04:
So the agency action question imposes a legal obligation on them, and that's not the case in Clapper, right?

[00:24:14] Speaker 05:
I don't believe that's the right analysis, Your Honor, because what they are complaining about here is

[00:24:20] Speaker 05:
The PTO's refusal to counsel our patent, that just, you know, what Lujan said, when a plaintiff's asserted injury arises from the government's allegedly unlawful regulation or lack of regulation of someone else, our patent, and this court, in both consumer watch log and phytonics, cited that language from Lujan as the proper standing test for purposes of appealing an IPR by a petitioner.

[00:24:42] Speaker 05:
And that is correct.

[00:24:43] Speaker 05:
Their harm, and we think this is important, their harm

[00:24:47] Speaker 05:
is whether or not down the road they will ever face infringement liability.

[00:24:51] Speaker 04:
What case, other than Clapper, in your views, what Supreme Court case supports the notion that there's no standing to challenge agency action under these circumstances?

[00:25:01] Speaker 05:
Lujan, we believe, is also relevant, Your Honor.

[00:25:04] Speaker 05:
And we think both of those cases make it clear.

[00:25:06] Speaker 05:
I mean, Clapper is absolutely clear that it says, when you're complaining about costs, that what they have to show is that they incurred

[00:25:16] Speaker 05:
certain costs as reasonable reaction to a risk of harm, because unless the harm it seeks to avoid is not certainly impending, the harm that they seek to avoid is being found to infringe down the road.

[00:25:29] Speaker 04:
That is a case, is it not, in which the parties seeking standing were not regulated by the federal government, right?

[00:25:36] Speaker 05:
That's true, isn't it?

[00:25:37] Speaker 05:
Because it was surveillance of the public.

[00:25:39] Speaker 04:
That is true, correct?

[00:25:41] Speaker 05:
They weren't regulated.

[00:25:42] Speaker 05:
Not exactly, Your Honor.

[00:25:43] Speaker 05:
That's not true?

[00:25:44] Speaker 04:
Well, the Supreme Court seemed to think it was true.

[00:25:47] Speaker 05:
Actually, Your Honor, the government, they were citizens.

[00:25:51] Speaker 05:
And the allegation there was that the government was unlawfully surveilling citizens.

[00:25:55] Speaker 05:
So they were potentially subject, but there was no evidence that they were actually subject.

[00:26:00] Speaker 05:
And it was too uncertain.

[00:26:02] Speaker 04:
The government action that they complained about was not directed to them.

[00:26:08] Speaker 04:
It was directed against people that they communicated with, right?

[00:26:12] Speaker 05:
Correct.

[00:26:13] Speaker 04:
So it wasn't a situation in which they were being regulated.

[00:26:17] Speaker 05:
Well, in that sense, Your Honor, the PTO is not regulating momentum.

[00:26:21] Speaker 05:
It is granting or revoking our patent.

[00:26:24] Speaker 05:
Just like the Court recognized in consumer watchdog and phytonics, this Court recognized these as third-party standing cases.

[00:26:31] Speaker 05:
And that's critical to the standing.

[00:26:32] Speaker 00:
Well, the difference, the critical difference in these PTO proceedings is the estoppel aspect.

[00:26:40] Speaker 00:
Is your view that

[00:26:43] Speaker 00:
assuming, like consumer watchdog and his concerns raised here, that there can be, at this stage, no appeal to this court, that the estoppel nonetheless takes effect?

[00:26:57] Speaker 05:
Yes, Your Honor.

[00:26:58] Speaker 05:
We think that's important to the Congress's commission.

[00:27:00] Speaker 00:
Do you take that from the statute?

[00:27:02] Speaker 00:
The statute doesn't say.

[00:27:03] Speaker 05:
The statute, we believe, does say, Your Honor.

[00:27:06] Speaker 00:
The statute says that this is appealable to the Federal Circuit.

[00:27:10] Speaker 00:
Is there not an implication that

[00:27:13] Speaker 00:
the estoppel takes effect based on the decision on appeal?

[00:27:17] Speaker 05:
I don't believe so, Your Honor, because the provision that governs estoppel here is 35 U.S.C.

[00:27:22] Speaker 05:
section 315E2 that estops a petition in an IPR that results in a final written decision under section 318A.

[00:27:32] Speaker 05:
So the estoppel is tied to the final written decision from the board.

[00:27:36] Speaker 05:
There is a separate provision concerning appeal, which is 319E2.

[00:27:40] Speaker 05:
that has not made a condition of estoppel.

[00:27:42] Speaker 00:
Then why isn't this an additional powerful argument on their side in terms of immediacy and reality, which otherwise we're having trouble with?

[00:27:55] Speaker 05:
So one, we do believe estoppel applies here so that you can't file repetitive, for example, IPRs.

[00:28:00] Speaker 05:
or just take a free shot at PR.

[00:28:03] Speaker 05:
The estoppel is important to cabinets to one shot.

[00:28:05] Speaker 04:
It would apply in a district court infringement.

[00:28:08] Speaker 05:
That is section 315 E2, Your Honor.

[00:28:10] Speaker 05:
It would.

[00:28:11] Speaker 05:
But the reason is because the harm, everything they're talking about, all of their alleged harm, ties to a fear of infringement.

[00:28:22] Speaker 05:
And they cannot infringe now.

[00:28:25] Speaker 05:
They are protected now.

[00:28:26] Speaker 05:
There is no infringement now.

[00:28:28] Speaker 05:
unless and until they can obtain approval for a product within the claims.

[00:28:32] Speaker 05:
And one thing I would note, Your Honor, just to be clear on the record, although Ms.

[00:28:36] Speaker 05:
Maynard says that their product infringes the 230-ounce patent, that's not in the record.

[00:28:40] Speaker 05:
This is new information we've just been given.

[00:28:43] Speaker 05:
If you look, for example, in Mr. Wheeler's declaration that was submitted in support of their position, which is in Appendix 3513, for example, Paragraph 29, though it's throughout on page 3523, she says, if BMS is right,

[00:28:58] Speaker 05:
And the 239 patent covers Orencia.

[00:29:01] Speaker 05:
Memento expects BMS to sue Memento or its partner for infringing when Memento receives FDA approval.

[00:29:08] Speaker 05:
They don't acknowledge.

[00:29:09] Speaker 05:
In fact, we have no information about their product.

[00:29:12] Speaker 05:
There's nothing in the record that says it infringes.

[00:29:15] Speaker 04:
The record shows that their product is the same as yours, as they say.

[00:29:21] Speaker 05:
Your Honor, I'm not.

[00:29:22] Speaker 05:
is that I think what they are saying is that they're developing a product that is to be similar as a formatter.

[00:29:28] Speaker 05:
Although we don't know anything about the product, it's certainly not the same.

[00:29:31] Speaker 05:
And in fact, I think the failure of phase one shows that it's not the same.

[00:29:34] Speaker 05:
With the same purposes of whether it comes within the claims of the patent.

[00:29:38] Speaker 05:
We just don't know.

[00:29:39] Speaker 05:
There is nothing in the record that says whether or not their product is within the patent or not.

[00:29:43] Speaker 05:
Nothing in the record except Ms.

[00:29:45] Speaker 05:
Maynard's statement today in court that it infringes.

[00:29:48] Speaker 05:
But more importantly, we're at phase one here.

[00:29:52] Speaker 05:
We are exactly the situation that this court acknowledged in Sandoz.

[00:29:56] Speaker 05:
In Sandoz, this court stated on page 1279 of 773 F3rd, we are aware of no decision in which we have found a case or controversy where the only activity that would create exposure to potential infringement liability was a future activity requiring an FDA approval that had not yet been sought.

[00:30:15] Speaker 05:
That is this case.

[00:30:16] Speaker 05:
In fact, it is.

[00:30:18] Speaker 01:
What about Ms.

[00:30:19] Speaker 01:
Maynard's argument or reading of Sandoz

[00:30:22] Speaker 01:
pointing out that there's a section in the Sandoz opinion that perhaps was carefully written.

[00:30:27] Speaker 01:
I can't be sure.

[00:30:28] Speaker 01:
I need to go back and look.

[00:30:30] Speaker 01:
That points out that Sandoz did not actually allege any kind of harm in the way that Momenta is currently now alleging.

[00:30:44] Speaker 05:
Your Honor, I believe that is a misreading of the Sandoz case, and I would point out that

[00:30:49] Speaker 05:
In finding it not justiciable, this court at page 1291, citing to Texas v. US, said, in the pre-application context presented here, we conclude that the events exposing Sandoz to infringement liability, quote, may not occur as anticipated, or indeed may not occur at all.

[00:31:05] Speaker 05:
That's exactly here.

[00:31:06] Speaker 05:
And there's a bigger problem that's worth noting here, which is if Ms.

[00:31:10] Speaker 05:
Maynard were right that, for example, the earlier Momento somehow has standing and the later Sandoz does not,

[00:31:15] Speaker 05:
And certainly, it's very clear that anyone that's in phase three trials for a biological product has invested substantial resources.

[00:31:22] Speaker 05:
Then every case, every case where the patent owner prevails is going to present this exact same fight.

[00:31:30] Speaker 05:
And in every case, this court's going to have to resolve, is this particular petitioner over the line or under the line?

[00:31:38] Speaker 05:
And where is the line?

[00:31:40] Speaker 05:
This court recognized in Sandoz, there's a bright line here, as there should be for jurisdiction.

[00:31:46] Speaker 05:
And that is the filing of the marketing application.

[00:31:49] Speaker 04:
Keep in mind.

[00:31:50] Speaker 04:
Sandoz is not a case involving review of agency action.

[00:31:54] Speaker 04:
And our cases have said that the Article III requirements are less stringent in that context.

[00:32:01] Speaker 05:
You're under a hard floor for all cases, which is this concrete injury, which Clyburn described as showing.

[00:32:07] Speaker 04:
Well, that's what your problem is, because the Supreme Court cases seem to say that this kind of injury is sufficient to challenge agency action.

[00:32:15] Speaker 05:
Your Honor, with all due respect, we read the cases and we think Clapper here is very clear.

[00:32:21] Speaker 05:
What's being alleged is a threat of future injury.

[00:32:24] Speaker 05:
And that's the case here, right?

[00:32:26] Speaker 05:
It's the threat of infringement liability that they say has forced them to take costs now.

[00:32:31] Speaker 04:
You're suggesting that the Supreme Court's standing cases say that you can't have standing based on future injury?

[00:32:36] Speaker 05:
They can, so long as the risk is certainly impending.

[00:32:40] Speaker 04:
In fact... Well, they say the risk here is certainly impending.

[00:32:44] Speaker 04:
In paragraph

[00:32:45] Speaker 04:
23 of their affidavit that they say, this is on 3521 of the record, they say Momenta considered multiple options for developing a biosimilar.

[00:32:56] Speaker 04:
One was to make a biosimilar version similar to branded Orencia as possible.

[00:33:01] Speaker 04:
We chose that option in part based on our continued belief that the 239 patent is invalid, allowing Momenta to launch its product without a serious threat of patent infringement.

[00:33:15] Speaker 05:
The harm is if they get sued in the future.

[00:33:17] Speaker 05:
As that paragraph goes on to say, their worry is down the road.

[00:33:21] Speaker 05:
If they get approval, they may get sued.

[00:33:24] Speaker 04:
But think about- You mean they have to show that they're going to be sued for infringement right now?

[00:33:30] Speaker 04:
I mean, the Supreme Court has, even in the declaratory judgment context, said that that's not the test for a declaratory.

[00:33:40] Speaker 04:
It doesn't have to be a risk of imminent suit.

[00:33:43] Speaker 04:
They specifically

[00:33:44] Speaker 04:
It overruled our line of cases on that.

[00:33:48] Speaker 05:
Your Honor, it's not a time issue.

[00:33:50] Speaker 05:
It's a certainly impending issue.

[00:33:52] Speaker 05:
And think about the uncertainties which this court recognized in Sandoz.

[00:33:55] Speaker 05:
They have to succeed in phase one and succeed and move forward with one that's within the ambit of the patent.

[00:34:01] Speaker 05:
Then they have to move into phase three with that product, not this alternative they admit they have.

[00:34:06] Speaker 05:
That has succeeded.

[00:34:07] Speaker 05:
Then they have to file a similar application.

[00:34:09] Speaker 05:
And notice not only are those highly uncertain, as we've seen, phase one failed here,

[00:34:14] Speaker 05:
But much of that is within Momenta's own control.

[00:34:18] Speaker 05:
What they choose, they've acknowledged.

[00:34:20] Speaker 05:
They have different pathways.

[00:34:21] Speaker 05:
It's their choice.

[00:34:23] Speaker 05:
As the court said in Rujong, this is at 504 US 564, note too, that this requirement that the asserted injury be certainly impending has been stretched beyond the breaking point when, as here, the plaintiff alleges only an injury at some indefinite future time, and the acts necessary to make the injury happen are at least partly

[00:34:43] Speaker 05:
within the plaintiff's own control.

[00:34:45] Speaker 05:
This is all choice of momentum.

[00:34:47] Speaker 05:
Will they proceed with one within the ambit of 239 or a different one?

[00:34:51] Speaker 05:
We don't know.

[00:34:51] Speaker 05:
Will they finally succeed in phase one?

[00:34:54] Speaker 05:
We don't know.

[00:34:55] Speaker 05:
Will they then choose to move to phase three?

[00:34:57] Speaker 05:
That's up to them.

[00:34:58] Speaker 05:
Which formulation will they move into phase three?

[00:35:01] Speaker 05:
That's up to them.

[00:35:02] Speaker 05:
Will that succeed?

[00:35:03] Speaker 05:
Highly speculative.

[00:35:04] Speaker 05:
Will they then choose to file a biosimilar application?

[00:35:07] Speaker 05:
That's up to them.

[00:35:08] Speaker 05:
This is exactly what the court in Clapper and Lujan said is not

[00:35:13] Speaker 05:
concrete injury sufficient to give.

[00:35:15] Speaker 05:
How about Monsanto?

[00:35:17] Speaker 05:
Well, interesting, Your Honor.

[00:35:18] Speaker 05:
The court in Clapper discussed Monsanto at length.

[00:35:21] Speaker 05:
In Monsanto, as the court in Clapper noted, there, all of the, and I'm just reading from Clapper, 133 Supreme Court, 1153 to 54.

[00:35:34] Speaker 05:
There, in that case, it hinged on evidence that the genetically engineered alfalfa seeds were currently being planted in all the major alfalfa seed production

[00:35:42] Speaker 05:
that bees pollinate alfalfa have a range of at least 2 to 10 miles, and that the alfalfa seed farms were concentrated in the area well within the bees' pollination range.

[00:35:51] Speaker 05:
The risk of harm was at that moment existing, real, and impending.

[00:35:56] Speaker 05:
And the court expressly, in clapper, noted that about Monsanto.

[00:36:01] Speaker 05:
There was no control by the plaintiff alfalfa growers there, choosing whether or not their fields would be contaminated by bees

[00:36:08] Speaker 05:
coming from the other fields.

[00:36:09] Speaker 05:
That was happening then and there.

[00:36:11] Speaker 04:
But they're saying here that the risk of harm is real and immediate because they are spending millions of dollars to develop a product which may be off the market because it's infringing.

[00:36:25] Speaker 04:
It's not as though they're saying, we're going to spend some money in the future.

[00:36:29] Speaker 04:
They're spending the money now, right?

[00:36:32] Speaker 05:
They have no product now.

[00:36:33] Speaker 04:
They are spending money now, right?

[00:36:37] Speaker 01:
Maybe the pivot point here is just the nature of the science in trying to develop these highly complex biologic products.

[00:36:48] Speaker 01:
This isn't like momentous in the business of manufacturing and selling bikes, and it needs to know whether it can make a 10-speed bike or a cruiser bike.

[00:36:59] Speaker 01:
These biologics seem to be very complicated and very hard to

[00:37:04] Speaker 01:
to make for whatever reason.

[00:37:06] Speaker 01:
And it's uncertain whether they'll actually be able to successfully navigate the very difficult, uncertain path to arriving at a product that actually is ready for filing at the FDA.

[00:37:20] Speaker 05:
Your Honor, you're absolutely right to think technology really matters.

[00:37:23] Speaker 05:
And of course, it was reviewed as well in the sentence.

[00:37:25] Speaker 05:
It's highly uncertain.

[00:37:27] Speaker 05:
But the problem is Article III standing is one that turns on concrete injury.

[00:37:32] Speaker 05:
speculative injury, uncertainty about the future, cuts against momentous standing.

[00:37:37] Speaker 05:
They're seeking advice as to how they should proceed with a product that may never get to the finish line anyway.

[00:37:43] Speaker 04:
So it's particularly advantageous for your client that these people have no way, in your view, to challenge the validity of a patent without running the risk of spending millions of dollars that they could lose.

[00:37:54] Speaker 04:
They have no way of getting a determination as to whether what they're doing is permissible under the patent or not.

[00:38:02] Speaker 05:
Your Honor, actually, there's two answers.

[00:38:05] Speaker 05:
The first one is they remain free, as they did, to go to the IPR early.

[00:38:09] Speaker 05:
But more importantly, Congress considered all of this and came up with what it viewed as an early adjudication system for these patents.

[00:38:17] Speaker 05:
And that was the filing of the biosimilar application well in advance of its possible approval.

[00:38:22] Speaker 04:
But that's only after the filing of the application.

[00:38:24] Speaker 05:
After the filing of the application.

[00:38:25] Speaker 05:
But they were pushing justiciability back and doing that like Hatch Waxman.

[00:38:29] Speaker 05:
under the law before Hatch-Waxman, under the law that applies to, for example, device products.

[00:38:33] Speaker 04:
Are you suggesting that in the Biosimilars Act they were restricting standing?

[00:38:37] Speaker 05:
To the contrary, Your Honor.

[00:38:38] Speaker 05:
I would say they were pushing it possibly to its limits, going from marketing a product that infringed, which is the law, for example, with device products.

[00:38:47] Speaker 04:
Okay, but come back to the point.

[00:38:48] Speaker 04:
There is no way that somebody who wants to compete with your client and thinks that the patent is invalid can enter the market

[00:38:58] Speaker 04:
without putting at risk millions of dollars.

[00:39:01] Speaker 04:
There's no way in your view of securing a determination of patent invalidity.

[00:39:08] Speaker 00:
Or is your way, I didn't mean to interrupt.

[00:39:12] Speaker 00:
Go ahead.

[00:39:15] Speaker 00:
You mentioned Hatch-Waxman and it seems to me that this fits right into the subject that we're exploring because Hatch-Waxman does permit

[00:39:28] Speaker 00:
suits for artificial acts after the ANDA is filed.

[00:39:34] Speaker 00:
But it can't be more than a year before marketing is planned for.

[00:39:41] Speaker 00:
Isn't that correct?

[00:39:43] Speaker 00:
So what would your position be if, in fact, on these same facts, well, they would have had to have succeeded on the phase three trials, I suppose, before the ANDA could have been filed, but there's still

[00:39:56] Speaker 00:
would not have been commercial marketing.

[00:39:59] Speaker 00:
They would have been in the Hatch-Waxman phase.

[00:40:01] Speaker 00:
Would that, in your view, change the Article III situation?

[00:40:06] Speaker 05:
Of course, Your Honor, because the key time at which Article III standing must arise is not the filing of the IPR petition, but the filing of the notice of appeal.

[00:40:15] Speaker 05:
That's when this Court judges its Article III standing.

[00:40:18] Speaker 05:
And of course, all these timeframes are spelled out.

[00:40:20] Speaker 05:
They know how long the trial is.

[00:40:22] Speaker 05:
You know, the results, how long it takes them to put the application together.

[00:40:25] Speaker 05:
And of course, they know how long an IPR takes.

[00:40:26] Speaker 05:
That's statutory.

[00:40:28] Speaker 05:
They could have filed.

[00:40:28] Speaker 05:
They could have waited.

[00:40:29] Speaker 05:
They decided to jump in early.

[00:40:32] Speaker 05:
But they could have waited and filed during their Phase 3 trial or before their Phase 3 trial, knowing the timeline, knowing that at that point, they have Article 3.

[00:40:40] Speaker 05:
Of course, nothing prevents them from doing it.

[00:40:42] Speaker 01:
So would Phase 3 be enough in your view for them to permit them to review an adverse agency action?

[00:40:47] Speaker 05:
No, Your Honor, because by filing the IPR petition at that point,

[00:40:51] Speaker 05:
By the time they get their written decision and potentially need to appeal, they'll have their biosimilar application on file.

[00:40:57] Speaker 01:
Right.

[00:40:58] Speaker 01:
So that's what we're trying to figure out here.

[00:41:00] Speaker 01:
Is there a gap?

[00:41:04] Speaker 01:
Is there a delta between what the Biosimilar Act provides, which is once someone files an FDA application, they're now considered to be infringing, right?

[00:41:18] Speaker 01:
And at some point before that,

[00:41:20] Speaker 01:
Can someone have the right to appeal an adverse patent board decision here, given that the requirements for just a disabled case or controversy are at least somewhat relaxed?

[00:41:34] Speaker 05:
I don't believe so, because I think it's the artificial act of infringement that creates the potential risk of harm that's the necessary injury in fact.

[00:41:45] Speaker 05:
And that's a nice clear line as well.

[00:41:48] Speaker 05:
And keep in mind, that line is pushed back.

[00:41:50] Speaker 05:
Traditionally, litigation is created upon marketing.

[00:41:55] Speaker 04:
It's a great situation for your client because you can have an invalid patent and nobody can even get to the point of challenging it without filing an application.

[00:42:05] Speaker 04:
And that requires millions and millions of dollars that they have to put at risk even before they can get a determination of whether they're barred by the patent.

[00:42:15] Speaker 05:
They were free to file their APR.

[00:42:17] Speaker 05:
The key, what created this situation is that the patent, far from being invalid, was found by the board to be valid.

[00:42:24] Speaker 04:
That's the question.

[00:42:25] Speaker 04:
I mean, how can it be that somebody can't, before investing enormous amounts of money, secure some sort of determination as to whether it's all for NAR or not, because the patent covers them?

[00:42:38] Speaker 05:
Well, you're wrong.

[00:42:39] Speaker 05:
Of course, they can get a determination from the board, which they got.

[00:42:43] Speaker 05:
What you're asking is, why isn't there Article III standing earlier?

[00:42:48] Speaker 05:
But Congress weighed all of this and created the artificial active infringement, which is the touchstone for Article III standing.

[00:42:55] Speaker 04:
They can go to the board, and there's going to be an estoppel if they go to the board and lose, and they have no right to get judicial review of an adverse board decision.

[00:43:04] Speaker 04:
It's a pretty good situation for your client, isn't it?

[00:43:06] Speaker 05:
Well, Your Honor, it's only a good situation here because, as it happened, we prevailed at the board because we have a strong patent.

[00:43:12] Speaker 05:
But the fact is the IPR remains there.

[00:43:15] Speaker 05:
It serves its function.

[00:43:17] Speaker 05:
What they are asking is one of two things, either give them standing so they can get into an Article III court well before what would ordinarily be available, which we think is forbidden by Article III, or somehow give them a mulligan and a second bite of the apple by vacating so they can do early IPRs and suffer no consequences.

[00:43:36] Speaker 05:
You know, the only one at risk then is us, who had our patent challenge, which doesn't make sense either.

[00:43:41] Speaker 04:
It doesn't make sense that your patent could be challenged?

[00:43:45] Speaker 05:
No, it was challenged, and we prevail.

[00:43:47] Speaker 05:
It doesn't make sense to give them multiple bites of the apple to challenge our patent.

[00:43:51] Speaker 04:
But I thought that Congress contemplated there'd be judicial review of IPRs.

[00:43:55] Speaker 05:
I think based on consumer watchdog and phygenics, they created an avenue for appeal, but it requires Article III standing, and there's all sorts of cases.

[00:44:05] Speaker 05:
in which people can be heard before an agency but not have Article III standing.

[00:44:08] Speaker 05:
Phigenics is one, consumer watchdog is another, and we believe this is a third, because they jumped in early.

[00:44:15] Speaker 05:
They jumped in early.

[00:44:17] Speaker 05:
They didn't wait to a point where they were going to have a biosome application on file and injury in fact.

[00:44:23] Speaker 05:
This court in Sandoz went through all of the contingencies between being in development and actually facing

[00:44:31] Speaker 05:
a real threat of infringement liability.

[00:44:34] Speaker 05:
That's the touchstone under Clapper and Lujan for them to have Article III standing, which is necessary to this Court.

[00:44:41] Speaker 05:
Now, Your Honor, I know I'm wrong.

[00:44:42] Speaker 05:
I can touch briefly on the merits if this Court is interested in discussing the merits that wasn't before.

[00:44:50] Speaker 00:
OK, very briefly.

[00:44:51] Speaker 05:
Very briefly.

[00:44:52] Speaker 00:
And actually, that wasn't raised by Ms.

[00:44:55] Speaker 00:
Maynard, so I think perhaps

[00:44:58] Speaker 00:
It's inappropriate on rebuttal.

[00:45:00] Speaker 05:
Fair enough, Your Honor.

[00:45:01] Speaker 00:
Do you have any more questions?

[00:45:03] Speaker 00:
Any more questions?

[00:45:05] Speaker 00:
Thank you.

[00:45:05] Speaker 00:
OK.

[00:45:06] Speaker 00:
Ms.

[00:45:06] Speaker 00:
Bader, do you have a few minutes?

[00:45:11] Speaker 02:
Judge Newman, I did start my argument of the obviousness.

[00:45:13] Speaker 02:
And of course, we want the court to reach the obviousness question.

[00:45:15] Speaker 02:
So if the court wants to hear about those issues, that's, of course, our preference would be to get to those issues, because this is an exceptionally weak patent.

[00:45:26] Speaker 02:
We are, I agree with all of the sentiments of Judge Dyke's questions, which is it would be inconsistent with Supreme Court precedent, DC Circuit precedent, and years and years of agency administrative review law to hold that under these circumstances, Memento is not presently harmed by the adverse board decision here.

[00:45:44] Speaker 02:
The board refused to cancel a patent, and that's going to cause us harm in at least two ways.

[00:45:49] Speaker 00:
No, I think you need to tell us why the general thrust of Article III standing

[00:45:56] Speaker 00:
And the particular exception that's already been crafted into the Hatch-Waxman Act don't apply, particularly Hatch-Waxman.

[00:46:07] Speaker 00:
It's not before us, but I do think you'd have quite a different situation if you were in the Hatch-Waxman phase.

[00:46:14] Speaker 02:
With respect to Your Honor, it would be the biosimilar statute here, but there is an artificial act of infringement.

[00:46:19] Speaker 02:
The same one applies there.

[00:46:21] Speaker 02:
And that's a question about getting into court.

[00:46:24] Speaker 02:
And the artificial act of infringement ripens.

[00:46:26] Speaker 02:
It takes care of the eminence and rightness question.

[00:46:29] Speaker 00:
Yes, Article 3 is standing in the court.

[00:46:31] Speaker 00:
Here we are in the court.

[00:46:33] Speaker 00:
Whether, in fact, Congress should have considered a little more carefully when they provided for an appeal and an estoppel and these uncertainties that are now before us.

[00:46:47] Speaker 02:
The two schemes are different.

[00:46:51] Speaker 02:
The biosimilar statute allows artificial infringement, which advances the rightness and eminence for a district court action.

[00:46:56] Speaker 02:
You don't have to consider rightness and eminence in this context because we're talking about an agency appeal.

[00:47:01] Speaker 02:
The Congress also created a different avenue if parties in the legislative history suggest biosimilar applicants were parties that were in the district court.

[00:47:09] Speaker 00:
No one's challenging the right to go to the agency.

[00:47:12] Speaker 02:
But the harm, Your Honor, is exactly the harm Congress envisioned, which is having to be placed in the choice

[00:47:20] Speaker 02:
of spending millions of dollars, you know, copying, you know, practicing an invalid patent, or having to spend millions of dollars designing around it.

[00:47:31] Speaker 00:
That's what every generic or would-be copier, and therefore we have the Hatch-Waxman Act, which balances all of the interests on all sides and says, yes, you can, we will create an artificial act of infringement that will get us around Article 3, and you can

[00:47:50] Speaker 00:
challenge the patent under Hatch Waxman, even though you are not infringing.

[00:47:55] Speaker 02:
That is one avenue.

[00:47:56] Speaker 00:
So why doesn't that apply here?

[00:48:02] Speaker 02:
Because the harm here is caused by the adverse agency.

[00:48:05] Speaker 00:
That applies under Hatch Waxman as well.

[00:48:07] Speaker 00:
For a generic to get through Article 3 or Phase 3 trials without an opportunity to challenge the patent,

[00:48:15] Speaker 00:
certainly involves the millions of dollars that you've been telling us about.

[00:48:21] Speaker 02:
So the safe harbor scheme of Hatch-Waxman, Your Honor, is for valid patents, and the idea is to let people... Well, you're in a safe harbor phase now.

[00:48:29] Speaker 00:
That's why you're not being sued.

[00:48:31] Speaker 00:
It can't be sued.

[00:48:33] Speaker 02:
But we're being forced to spend dollars as a result of this erroneous agency action.

[00:48:40] Speaker 02:
And that itself is a concrete harm facing momenta now, regardless of whether we ever make it to phase three, regardless of whether we ever file an application.

[00:48:49] Speaker 00:
So you're saying Hatch-Waxman is wrong?

[00:48:52] Speaker 02:
It's just different.

[00:48:53] Speaker 02:
Judge Newman, it applies in a different situation.

[00:48:54] Speaker 04:
You're saying it's not exclusive, that the mechanisms that are provided in Hatch-Waxman are not the exclusive method for challenging patents.

[00:49:01] Speaker 04:
And Congress in the AIA provided another method for challenging patents, which presents a different set of circumstances.

[00:49:09] Speaker 02:
That's right, Your Honor, and neither answers the Article 3 question before this Court, which is, does this agency adverse agency action harm Momenta today?

[00:49:17] Speaker 02:
And it does.

[00:49:18] Speaker 02:
And Judge Newman, the estoppel provision harms us now.

[00:49:21] Speaker 02:
And the United States filed a brief in Consumer Watchdog where it said,

[00:49:25] Speaker 02:
Unlike that case where that party was not practicing the subject matter as we are, where that party didn't have concrete plans as we do to practice the subject matter, and where that party would never face an infringement suit and therefore never face the estoppel, the estoppel provision didn't matter.

[00:49:40] Speaker 02:
But the government suggested that the estoppel provision for someone who was in our shoes would advance the harm and make it now or never for Article III review.

[00:49:51] Speaker 02:
And so the United States government suggested in its brief and consumer watchdog to this court

[00:49:54] Speaker 02:
that the estoppel provision would advance a harm and make it now.

[00:49:59] Speaker 02:
If we are stopped now by this ruling, and even if we have to, even if we have to, that is harm now.

[00:50:06] Speaker 02:
That's kicking in now.

[00:50:07] Speaker 02:
And now is our chance to get court review about whether or not we're going to be estoppel.

[00:50:11] Speaker 00:
We've never decided whether the estoppel would take effect under circumstances such as non-appealability.

[00:50:19] Speaker 00:
I believe.

[00:50:20] Speaker 00:
Do you know of such a case?

[00:50:21] Speaker 02:
I don't, Your Honor.

[00:50:22] Speaker 02:
And again, as I said before, if you're going to hold that momenta can't appeal, then we would request that you vacate.

[00:50:28] Speaker 02:
And you have the authority to do that in your equal discretion, as this Court has recognized, and so does the Supreme Court.

[00:50:33] Speaker 02:
But more importantly, even if, and Judge Chin, even if you think that we need to establish that we're at a threat, we have a certainly impending threat of being sued in the Clapper way, right?

[00:50:45] Speaker 02:
And Clapper is a very different case, and Clapper is about

[00:50:48] Speaker 02:
imagined government action that might hurt them.

[00:50:51] Speaker 02:
And that's not what we have.

[00:50:53] Speaker 02:
We have a government that refused to cancel a patent that we think is invalid, that is blocking our freedom to operate.

[00:51:00] Speaker 02:
And we think it's taken from Momenta, who is part of the public domain, subject matter that ought to be in the public domain, and it's hurting us right now.

[00:51:08] Speaker 02:
And we have concrete declaration to this court saying we're harmed right now.

[00:51:12] Speaker 02:
And that's enough.

[00:51:13] Speaker 02:
But even if you thought.

[00:51:14] Speaker 01:
But what if it's really the failure of the phase one that's really blocking your choices to operate?

[00:51:21] Speaker 02:
The failure in phase one has nothing to do with whether or not we're at the same fork in the road as we were when we appealed.

[00:51:32] Speaker 02:
The PK study has nothing to do with the claims of this patent.

[00:51:36] Speaker 02:
It's got no therapeutic value.

[00:51:37] Speaker 01:
Has MoMenta announced what it's going to do?

[00:51:39] Speaker 01:
I mean, what are its choices right now?

[00:51:41] Speaker 01:
Phase one didn't work.

[00:51:44] Speaker 01:
So where does that leave them?

[00:51:47] Speaker 01:
They can't move on to phase three now.

[00:51:49] Speaker 01:
We know that.

[00:51:50] Speaker 02:
Momenta is analyzing results, but Momenta is committed to the program.

[00:51:54] Speaker 02:
So it's a bump in the road.

[00:51:56] Speaker 02:
But the fork in the road was still at the fork.

[00:51:58] Speaker 01:
What form is the program going to manifest itself next?

[00:52:03] Speaker 01:
I guess that's really the question.

[00:52:05] Speaker 02:
So the PK study, which has to do with the effect of the drug in the body,

[00:52:11] Speaker 02:
This patent is about a stable liquid formulation that goes into a syringe.

[00:52:15] Speaker 02:
It doesn't have anything to do with the PK.

[00:52:18] Speaker 02:
And the momenta is proceeding with the program.

[00:52:22] Speaker 02:
And in some ways, we need to know the answer now more than before.

[00:52:25] Speaker 02:
Because if we do adjust the program at all, we have to know whether we can practice this patent or not.

[00:52:34] Speaker 01:
Wow.

[00:52:34] Speaker 01:
The failure of phase one makes you more of a concrete harm than the success of the phase one?

[00:52:41] Speaker 01:
not make sense to me.

[00:52:43] Speaker 02:
Because with respect, Your Honor, you're looking at the wrong thing that harms us.

[00:52:48] Speaker 02:
The thing that harms us is the agency's refusal to cancel this patent, which is a roadblock in the program as planned.

[00:52:57] Speaker 02:
And so that is a current harm under DC Circuit precedent, under this court's precedent, under the Supreme Court's precedent.

[00:53:03] Speaker 02:
Having to alter business plans as a result of government action gives you standing to appeal.

[00:53:11] Speaker 01:
So I'm just trying to understand the logical extension of your position.

[00:53:16] Speaker 01:
Five years ago, they hadn't spent any money yet, but they were very interested in the potential of pursuing a biosimilar for the orencia.

[00:53:32] Speaker 01:
And it filed an IPR, and then it lost the IPR.

[00:53:37] Speaker 01:
Would you say that you would still have standing?

[00:53:40] Speaker 01:
You're on the cusp of spending a lot of money and then ultimately pursuing a phase one and then a phase three and then an FDA application.

[00:53:49] Speaker 01:
Would that be enough in your view for standing?

[00:53:53] Speaker 01:
Because in the end, what's happening here is choices that need to be made for a business to organize its affairs, to spend a lot of money either this way or that way.

[00:54:04] Speaker 01:
And so without having spent any money yet, that's still enough of a concrete arm.

[00:54:09] Speaker 02:
That would be a much tougher case, and that might put you more in a Lujan situation.

[00:54:13] Speaker 02:
Some day, intentions are not enough.

[00:54:15] Speaker 01:
But Lujan also says... Well, what if we had a declaration from Mr. Whoever Wheeler that said, we will spend money, but we need to know which way to spend the money.

[00:54:26] Speaker 01:
We haven't spent any money yet.

[00:54:28] Speaker 01:
If we can successfully invalidate this patent, then we will spend it pursuing that patented invention.

[00:54:35] Speaker 02:
That would be a harder case.

[00:54:37] Speaker 02:
And each, as the courts have made clear...

[00:54:39] Speaker 02:
It would be a harder case because what we have here is monies that vary concrete plans that are not only concrete, but they're in place.

[00:54:47] Speaker 02:
Money has been spent.

[00:54:49] Speaker 02:
The declaration is that some costs will be lost as a result of this action if we can't challenge it, and the plans will have to be changed, and millions more will have to be spent that wouldn't have to be spent.

[00:55:00] Speaker 02:
We have easily cleared the hurdle of injury and fact under all precedent of which I'm aware.

[00:55:07] Speaker 02:
it would be a harder case.

[00:55:09] Speaker 02:
But the court in Lujan suggests, and the dissents in that case and the concurrences suggest, if those parties had bought plane tickets, plane tickets, to visit the areas where the endangered species were, the case might come out differently.

[00:55:24] Speaker 02:
We have millions of dollars of plane tickets proceeding along this path.

[00:55:30] Speaker 02:
And it's not our choice that the Patent Office granted this invalid patent in 2013 after we had already invested lots of money in this program.

[00:55:39] Speaker 02:
And then we took the remedy that Congress gave us, which was to go to the Patent Office and to say, you've made a mistake.

[00:55:46] Speaker 02:
And the Patent Office has now made another mistake by saying, no, this patent actually is some kind of invention, even though it's a combination of nothing but everything people of skill and the art know.

[00:55:59] Speaker 02:
We are harmed by that decision, and we should be able to challenge it in this court.

[00:56:05] Speaker 00:
I think we have the argument.

[00:56:07] Speaker 00:
Anything else that you need to raise?

[00:56:10] Speaker 00:
Thank you.

[00:56:11] Speaker 00:
I appreciate your indulgence.

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

[00:56:13] Speaker 00:
The case is taken under submission.

[00:56:15] Speaker 00:
And that concludes this morning and afternoon's arguments for this panel.