[00:00:02] Speaker 03:
The first case for argument this morning is 161346 Regeneron Pharmaceuticals versus Marist.

[00:00:09] Speaker 03:
Mr. Katia.

[00:00:13] Speaker 00:
Thank you, Chief Judge Prowster.

[00:00:14] Speaker 00:
May I please the court?

[00:00:15] Speaker 00:
The district court made a series of errors in this case, many of which stemmed from a basic misunderstanding of what the patented issue, the 018 patent claims.

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At the time of the patent in 2001, the conventional wisdom was that antibodies produced by mice should be as human as possible, and mouse genes were manipulated accordingly.

[00:00:34] Speaker 00:
Regeneron had a counterintuitive approach.

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They realized that when mice were too human, the antibodies that the mice would produce would be fewer and weaker.

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So instead of pursuing the trend of the more human the better, it sought to produce a mouse that would produce antibodies that were part human and part mouse, and specifically that had a human variable region and a mouse constant one.

[00:00:55] Speaker 00:
Those antibodies, of course, wouldn't be directly put into humans.

[00:00:59] Speaker 02:
Did your client

[00:01:02] Speaker 02:
assert that the claims cover only reverse chimeric mice?

[00:01:08] Speaker 00:
They did.

[00:01:08] Speaker 00:
In both in... Where in the record is that stated?

[00:01:11] Speaker 00:
So starting with the prosecution history, Your Honor, if I turn to A443, the examiner understood these claims to be directed at the mouse.

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That's, quote, directed to a mouse with an unrearranged chimeric heavy and or light chain locus.

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And then A385, directed to a mouse with an unrearranged chimeric locus.

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And here's what we said.

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At A554, we said during the prosecution, these are not antibodies mowed in a mouse of claim one or a mouse recited in claim one.

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A454, the mice of the pending claims, A456, similar, A457, and so on.

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So that's the prosecution.

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And then I understand Maris has also made the argument that we said something different in claim construction.

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Our reply brief at page 10 quotes the Markman brief.

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And if you look at pages two to nine of the Markman brief,

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It's very clear.

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Regeneron had a whole section called, quote, brief summary of Regeneron's pioneering technology.

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And not once does it refer to Litvek or any other method.

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Here's the important point, Judge Wallach, about this.

[00:02:14] Speaker 00:
The district court found that the patent was about a method, not amounts.

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We think that was wrong on claim construction.

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But we also think if you agree with that, which is what the district court found at page A118,

[00:02:27] Speaker 00:
of the broadest reasonable construction, that mandates clear reversal of what the district court did.

[00:02:33] Speaker 00:
Because if the broadest reasonable construction is this Litvek method, which is what the district court says at that page, none of these four asserted references have anything to do with the Litvek method.

[00:02:44] Speaker 03:
Let's assume we reject that notion.

[00:02:46] Speaker 03:
Why don't you tell us about the specific intent question.

[00:02:49] Speaker 00:
Great.

[00:02:49] Speaker 00:
So there are two prongs.

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They have to show them both by clear and convincing evidence.

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We don't think they met but for on the district court's own reasoning.

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On specific intent, Chief Judge Prowse, we think the district court got it absolutely wrong here.

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That is, she canceled the trial altogether on this key element

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of what is inequitable conduct, which is one of the most grave things for patent prosecutors, and for the PTO, and indeed for a company, as there is since recognized.

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And here, we weren't even allowed to have a trial at all.

[00:03:20] Speaker 00:
The district court's reasoning on this was, well, there was some abuses of attorney-client, the scope of the waiver for attorney-client privilege.

[00:03:29] Speaker 00:
And I'm not here to disagree with that at this point.

[00:03:31] Speaker 03:
That standard review is too... So at what point would... So you agree that there were some problems in the conduct with respect to discovery and disclosure, right?

[00:03:39] Speaker 00:
It's too hard for us to argue.

[00:03:40] Speaker 00:
We do disagree with them, but it's too hard on the standard review for us to raise those.

[00:03:44] Speaker 03:
But what we do think is... So if we accept everything she said in regard to that, then your argument is that therefore, I mean, what she described as at this juncture of the trial,

[00:03:55] Speaker 03:
she would have to have a special master overlooking all of the disclosures and going through all of the disclosures and that within her discretion that was not the appropriate way to proceed.

[00:04:06] Speaker 00:
Why is that an error?

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Because under controlling Second Circuit precedent in the relevant cases are Shing Kong,

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and the Saladin case.

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When you're doing something that is, a district court does something so grave as to dismiss an action altogether on one of two elements, which is exactly what Xin Kong was about.

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At that point, you have to show bad faith.

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That's the finding.

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The district court never, ever made a bad faith finding.

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And so under Second Circuit precedent, she couldn't go so far as to cancel the trial altogether.

[00:04:40] Speaker 02:
She found affirmative egregious misconduct.

[00:04:42] Speaker 00:
So affirmative egregious misconduct's back on the first element about but for materiality.

[00:04:47] Speaker 02:
And I definitely want to deal with that.

[00:04:49] Speaker 02:
And she also found an intent to deceive the PTO.

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But on affirmative egregious misconduct, I don't think that she made a finding of deliberate intent to deceive the PTO.

[00:05:01] Speaker 00:
And indeed, I think, you know, but even if, and I'll talk about that in a moment, Judge Walke, but even at most, all that would get is the exception to but for a materiality.

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It wouldn't deal with Chief Judge

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Krauss point about specific intent, because these are two separate elements.

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Therosense is very clear.

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You can't kind of mix and match from one to the other.

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Now, here's the problem with what she had to find on affirmative egregious materiality, which is a narrow exception.

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It has to be shown by clear and convincing evidence.

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The only thing Maris is defending here is these slides in 2013.

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And I think it's very important to drill down and see what happened with those slides.

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Those slides were introduced

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in the context of a PTO proceeding that was always about a debate about obviousness.

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There was no question whatsoever about enablement in 2001 or 2013.

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Indeed, the brief when we attach the slides, the brief that we attach them to, this is at page A457, makes very clear why we're attaching these slides, which is to show unexpected results to defeat any argument about obviousness.

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So there was no risk when those slides were introduced

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that there was going to be some sort of misleading of the PTO, particularly not a deliberate one, because enablement was just never at issue one in one way, shape, or form at any point in the case.

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And in addition, in 2001, when the patent, the 018 patent, was written, as our brief says, it was put in the present tense as a prophetic example.

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And the sharing case from this court is very clear.

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When you use present tense, you can use a prophetic example.

[00:06:33] Speaker 00:
There's no intent to deceive the PTO.

[00:06:35] Speaker 00:
These slides were introduced simply to say exactly what I said at the outset of this argument, which is Regeneron came up with something new and innovative, something counterintuitive.

[00:06:45] Speaker 02:
What about her alternative, rule 37B?

[00:06:49] Speaker 02:
Yes.

[00:06:49] Speaker 00:
So now back on the specific intent prong.

[00:06:52] Speaker 00:
Rule 37 does permit a district court to do that and to dismiss, but you've got to show bad faith.

[00:07:00] Speaker 00:
And there's no bad faith finding here.

[00:07:02] Speaker 00:
That's the problem.

[00:07:03] Speaker 00:
As I was saying to Chief Judge Press, we don't disagree for purposes of this appeal that there were problems that were made.

[00:07:10] Speaker 00:
But to go so far as to say that this was the bad faith of the attorneys and that you could eliminate one of two elements.

[00:07:17] Speaker 02:
In the Second Circuit,

[00:07:19] Speaker 02:
For a 37B sanction, you have to show willfulness of the non-compliant party.

[00:07:27] Speaker 02:
You have to show the efficacy of lesser sanctions.

[00:07:32] Speaker 02:
The duration of non-compliance and whether the

[00:07:36] Speaker 02:
willful party has been warned of noncompliance.

[00:07:39] Speaker 02:
That's their forecast.

[00:07:41] Speaker 00:
So it does require, as our brief explains, when it's dealing with cancelling an element or something like that, you do have to show what you call willfulness but is translated in the Second Circuit as to bad faith.

[00:07:53] Speaker 00:
And that was a finding she didn't make.

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And so she could have done all sorts of other things.

[00:07:58] Speaker 00:
We don't disagree that she could have barred these two witnesses, Smeeland and Jones, from testifying, or perhaps even said that these documents couldn't be introduced, or something like that.

[00:08:10] Speaker 02:
You say she could have barred the witnesses.

[00:08:12] Speaker 02:
That's under 37B2, I think, right?

[00:08:18] Speaker 02:
But there's a menu.

[00:08:19] Speaker 02:
So she could have, for example, made findings of fact.

[00:08:25] Speaker 02:
She could have made findings of fact and entered a judgment based on those findings of fact.

[00:08:29] Speaker 02:
Do you agree with that?

[00:08:31] Speaker 00:
We certainly agree that she has the raw power to do that if she does the correct steps.

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And those steps weren't done here, which is to show bad faith.

[00:08:40] Speaker 00:
We're not saying that she lacks the raw power altogether, but she's got to do that.

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And here, she had other things available to him.

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She called this an adverse inference.

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So this is not like she's talking about something else.

[00:08:52] Speaker 00:
She called this an adverse inference.

[00:08:53] Speaker 00:
This is way more than adverse, and it's way more than an inference.

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She canceled the trial.

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all together on one of the two elements.

[00:09:01] Speaker 00:
This court in Theresson's has said, this is the atomic bomb of patent law.

[00:09:05] Speaker 00:
It has such grave consequences, not just to this company, and not just to patent prosecutors who would then have to kind of flood the PTO with all sorts of, you know, possibly immaterial evidence, possibly or largely relevant evidence, but it also has consequences for the system as a whole.

[00:09:22] Speaker 00:
And so that's really, I think, the problem.

[00:09:24] Speaker 00:
That's why this court, you know, in Theresson said,

[00:09:27] Speaker 00:
you know, specific intent, and the court was unanimous on that.

[00:09:30] Speaker 00:
I understand different folks were on different sides.

[00:09:32] Speaker 02:
You're sort of leaving, I hate to mix elephants and mice, but you're leaving aside the elephant in the room.

[00:09:37] Speaker 02:
And that is that there was a direct misrepresentation about what had been done in relation to these mice.

[00:09:45] Speaker 00:
So again, Judge Wallach, I don't feel that that is accurate.

[00:09:49] Speaker 00:
So I think that those slides, in most, even under the so-called smoking gun document that they have,

[00:09:57] Speaker 00:
says that the slides were, quote, correct, but perhaps could be a little misleading.

[00:10:01] Speaker 00:
And to the extent they were misleading, they were misleading on an element, enablement, which was just not an issue in 2001 or 2013.

[00:10:09] Speaker 00:
I don't think that gets close to affirmative egregious misconduct

[00:10:13] Speaker 00:
which is the exception to but-for materiality, and it certainly doesn't answer the specific, intense question.

[00:10:18] Speaker 03:
Well, let's assume we conclude there is but-for materiality with respect to those one of the three or four references.

[00:10:24] Speaker 03:
Then what's your response to the conduct that occurred or failed to occur between the time that this T, what is it called, the TPS,

[00:10:32] Speaker 03:
discloses these references and your client files the fee and the patent application issues.

[00:10:38] Speaker 03:
So why wasn't there a requirement of disclosure and why is there not a circumstantial evidence that there was a specific intent to deceive by they're not disclosing those references to the PDF?

[00:10:51] Speaker 00:
So two things.

[00:10:51] Speaker 00:
One is I would like to get to these four references because I do think that case for materiality is really weak.

[00:10:56] Speaker 00:
Well, take it as a given.

[00:10:58] Speaker 00:
But then for that, I don't even think Maris is relying on that.

[00:11:01] Speaker 00:
I think Maris is

[00:11:02] Speaker 00:
brief is really focusing on just the slides now and whether or not those were misleading and the district court made no finding that this fee or anything like that was deliberate you know deception of the PTO and so I don't think that can get you to the specific intent that is required.

[00:11:20] Speaker 00:
If I could spend a minute on the but for materiality in these four references

[00:11:24] Speaker 00:
There are three different ways of understanding the broadest reasonable construction here.

[00:11:28] Speaker 00:
One is the district courts, which I was saying to Chief Judge Proust at page A118, which is that it includes mice produced by the Litvek method.

[00:11:36] Speaker 00:
None of the four references have anything whatsoever to do with that.

[00:11:40] Speaker 00:
If you take her BRC, you've got to reverse the decision.

[00:11:43] Speaker 00:
The second is our version of the BRC, which is a reverse chimeric mouse that is a human variable in mouse constant genes.

[00:11:54] Speaker 00:
There's no reference of these four that discloses anything like that.

[00:11:58] Speaker 00:
The only way Marist can win is by persuading you that the district court's BRC is wrong and that their BRC is right, which is that the claim, claim one, is only about the targeted insertion of human variable DNA.

[00:12:11] Speaker 00:
And when you drill down and look at the references,

[00:12:14] Speaker 00:
there's only one possible reference that goes to that, that discloses the targeted insertion of human DNA.

[00:12:22] Speaker 00:
And that is one sentence in Brugman, which is speculative.

[00:12:25] Speaker 00:
And if you look at that one sentence, and our brief at pages 38 lays out that sentence and compares it to what we did disclose, Kuchalapati, in opening brief page 39, they're almost exactly the same sentence.

[00:12:39] Speaker 00:
The only difference that the district court pointed to

[00:12:42] Speaker 00:
was that Kutralapati, our disclosed source, was not enabled.

[00:12:46] Speaker 00:
And she ignored the fact that Brugman, on the very page she cites, this is A3917 in the record, says that it's not enabled either.

[00:12:56] Speaker 00:
Quote, the ambitions have not been realized.

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And our fundamental problem on BRC is that the judge read the four asserted references so broadly to encompass so much

[00:13:09] Speaker 00:
but then read what we did disclose, Kutralapati and Lahnberg, so narrowly.

[00:13:13] Speaker 00:
And what's sauce for the goose is sauce for the gander.

[00:13:15] Speaker 00:
If you're going to read these forest-rated references really broadly, as the judge did, then I think you've got to read the disclosed references just as broadly.

[00:13:24] Speaker 00:
And Lahnberg and Kutralapati do disclose everything.

[00:13:27] Speaker 00:
And when Miss Carson comes up, I think a key question will have to be, what did these references disclose that weren't in Kutralapati or Lahnberg?

[00:13:36] Speaker 00:
and I don't think the district court ever made that fundamental key thing.

[00:13:40] Speaker 00:
We think that's the most important point for purposes of this appeal, that specific intent is lacking and under any version of broadest reasonable construction we win.

[00:13:49] Speaker 00:
We do think that the judge made some other errors on claim construction and indefiniteness.

[00:13:53] Speaker 00:
On claim construction, the most important error we think the judge made was that she found it as a method.

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And again, if you do view it as a method, then I think that kicks out the inequitable conduct finding because there's nothing in these four references about that.

[00:14:09] Speaker 00:
But I think it's just wrong on claim construction.

[00:14:11] Speaker 00:
We've said all through this, the text of the claim is very clear.

[00:14:15] Speaker 00:
The text of the claim disclosed a patent on a mouse.

[00:14:18] Speaker 00:
It's not a pen on a method.

[00:14:19] Speaker 00:
There's no word method in there.

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and that really that text settles the question.

[00:14:27] Speaker 00:
And then the last-ish set of issues is about indefiniteness.

[00:14:31] Speaker 00:
And there, Maris's own expert, I think, gave up the store, because the Maris's expert said, all you really need to know is the front end, the three-prime part, not the end, the five-part prime.

[00:14:43] Speaker 00:
And that's enough to allow someone to know the scope of the invention.

[00:14:48] Speaker 03:
You're almost exhausted your rebuttal, so why don't you sit down and we'll restore two minutes of rebuttal.

[00:15:05] Speaker 04:
Good morning, Your Honors.

[00:15:06] Speaker 04:
May it please the Court.

[00:15:09] Speaker 04:
I think it's important for the Court to recognize that the judgment of non-infringement in this case rests on three separate individual claim constructions.

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Affirming any one of those claim constructions will result in an affirmance of the finding of non-infringement.

[00:15:26] Speaker 04:
Now, the finding of invalidity

[00:15:29] Speaker 04:
based on indefiniteness.

[00:15:30] Speaker 03:
That stands apart from the three claim constructions, although Mr. Katyal would have... Well, why don't you talk to us about the elephant in the room, which is the inequitable conduct conclusion here.

[00:15:40] Speaker 03:
Absolutely.

[00:15:41] Speaker 03:
Firstly, why don't you respond to Mr. Katyal's major point, which is that the BRC doesn't support the conclusions here if you apply the gross reasonable construction.

[00:15:51] Speaker 04:
Your Honor, the district court specifically found that even under

[00:15:57] Speaker 04:
Regeneron's BRC that the references were but for material.

[00:16:03] Speaker 04:
That was a finding of fact that the court made after hearing testimony crediting Dr. Davis, our witness, finding Dr. Ottinger, who was Regeneron's witness, to have shifting explanations and to be less credible.

[00:16:21] Speaker 04:
So she made a specific finding that

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Even under Regeneron's broadest reasonable construction, the references were but for material.

[00:16:32] Speaker 04:
And I would direct the court's attention to the wood reference, which absolutely, under the fact findings of the district court, does disclose what they want to call reverse chimeric antibodies.

[00:16:47] Speaker 01:
How are you defining material when you say the references are material?

[00:16:53] Speaker 01:
Certainly they're in the same field, but it didn't look as if they were invalidating.

[00:16:58] Speaker 04:
They certainly were invalidating, and how do we know that the claims of the 018 patent would not have issued had Regeneron disclosed them?

[00:17:09] Speaker 04:
Well, they were submitted

[00:17:12] Speaker 04:
in 11 other applications.

[00:17:15] Speaker 04:
Now, Regeneron makes the statement in their brief that those 11 other applications had different specifications.

[00:17:24] Speaker 04:
That's absolutely false.

[00:17:26] Speaker 04:
They did not have different specifications.

[00:17:30] Speaker 04:
The claims the district court found were very, very similar.

[00:17:35] Speaker 04:
The district court walked through those, and in every single one of those cases,

[00:17:40] Speaker 04:
those references that Regeneron withheld in the 018 were the subject of a rejection.

[00:17:49] Speaker 01:
Was there a double patenting?

[00:17:51] Speaker 04:
There were also double patenting rejections which were in the record that was before the district court.

[00:17:56] Speaker 01:
So they'd be resolved by a terminal disclaimer and that would end the problem, would it?

[00:18:01] Speaker 04:
I think that Your Honor's putting two concepts together.

[00:18:07] Speaker 01:
Well, I'm trying to understand

[00:18:09] Speaker 01:
why the points that you're making are inequitable conduct.

[00:18:16] Speaker 04:
If you're asking how do we know that the claims were close?

[00:18:20] Speaker 01:
We have materiality and intent.

[00:18:22] Speaker 01:
We have a history of what this court has called a plague because it's very hard to find any patent, any specification, any prosecution where you can't retrospectively find something to complain about.

[00:18:38] Speaker 04:
And that's not the case here.

[00:18:39] Speaker 04:
Here, we had four references.

[00:18:42] Speaker 04:
And I think that Mr. Katyal is overstating the adverse inference here.

[00:18:47] Speaker 04:
Because under TheraSense, in order to demonstrate inequitable conduct, we had to demonstrate that Dr. Smeland and Murphy knew of the references.

[00:18:57] Speaker 01:
So how are you defining materiality?

[00:19:00] Speaker 04:
The materiality, the way the court looked at it, was that she knew that those references taught

[00:19:09] Speaker 04:
the very element that Regeneron told the Patent Office was missing, and that's insertion at the endogenous mouse locus.

[00:19:17] Speaker 04:
That's what they told the Patent Office was missing.

[00:19:21] Speaker 04:
And that was what they told the Patent Office was missing for claims one through five.

[00:19:26] Speaker 04:
Now, in their reply brief,

[00:19:27] Speaker 04:
They talk about how, well, we were talking about reverse chimeric.

[00:19:31] Speaker 04:
They were talking about a different claim, claim 20, not claims 1 through 5, because claims 1 through 5 are not limited to a reverse chimeric antibody.

[00:19:39] Speaker 04:
They're just some insertion of human DNA at the endogenous mouse locus.

[00:19:45] Speaker 04:
And your honors will look at the record in the very same response and amendment that Regeneron points to.

[00:19:54] Speaker 04:
It's clear that it's Claim 20 that's being discussed about the reverse chimeric.

[00:19:59] Speaker 04:
The claims 1 through 5, which were anticipated over in Lundberg, there they said, what's important here and what's different about us is that we have insertion at the endogenous mouse locus.

[00:20:11] Speaker 04:
And that's what every single one of those withheld references taught.

[00:20:16] Speaker 04:
So they were but for material, because if you read what the examiner said when she allowed the application, that was what she found was missing in the art, the insertion at the endogenous mouse locus.

[00:20:32] Speaker 03:
And with regard to specific intent?

[00:20:35] Speaker 04:
With regard to specific intent, as I said, Mr. Katyal is really overstating where the adverse inference went, because we had a trial,

[00:20:47] Speaker 04:
They had a trial on materiality.

[00:20:49] Speaker 04:
At the same time, we had to demonstrate that Dr. Smealand and Murphy knew of the references, that they made the affirmative decision to withhold the references.

[00:21:01] Speaker 04:
So the adverse inference was only drawn to the question of whether at the time that they made that affirmative decision to withhold the references, did they know the references were material?

[00:21:11] Speaker 01:
Did they testify as to that action?

[00:21:15] Speaker 01:
Your Honor, this was an unusual case.

[00:21:20] Speaker 04:
The district court, similar to the way it's done in the ITC, she took the direct testimony in a written form.

[00:21:28] Speaker 04:
So it was a written trial declaration that was given.

[00:21:33] Speaker 04:
And Drs.

[00:21:34] Speaker 04:
Murphy and Dr. Smeland offered their direct testimony, sworn testimony.

[00:21:44] Speaker 04:
At the same time, though, they waived privilege extensively.

[00:21:48] Speaker 04:
And so this was just the latest in a litany of misconduct.

[00:21:54] Speaker 04:
This was the second time that they had waived privilege.

[00:21:57] Speaker 04:
There were multiple motions to compel that involved the first waiver of privilege.

[00:22:03] Speaker 04:
And they never produced the documents, and that's in the record.

[00:22:06] Speaker 04:
But now the court is faced, on the eve of trial, with all the witnesses there, my clients flown in from the Netherlands.

[00:22:14] Speaker 04:
And she's faced with extensive waivers.

[00:22:16] Speaker 04:
So she does an in-camera review of the documents that they've now waived privilege on.

[00:22:23] Speaker 01:
So the answer to my question is no.

[00:22:26] Speaker 04:
I'm sorry.

[00:22:28] Speaker 04:
I'm sorry, Your Honor, if I missed your question.

[00:22:30] Speaker 01:
I asked you if they testified as to the things they told us.

[00:22:32] Speaker 04:
They absolutely testified because they put in their direct testimony.

[00:22:36] Speaker 04:
And that direct testimony, when the court looked at the documents on Regeneron's privilege log, she found three categories of documents that shouldn't have been there.

[00:22:45] Speaker 04:
But the third category were documents that directly contradicted what Dr. Smeeland and Dr. Murphy said.

[00:22:51] Speaker 04:
This is in the record.

[00:22:53] Speaker 04:
So yes, they offered their testimony.

[00:22:56] Speaker 04:
And yes, she found out that what they were saying was directly contradicted by the documents.

[00:23:02] Speaker 04:
She couldn't have allowed them to testify under the circumstances.

[00:23:06] Speaker 04:
So why not?

[00:23:09] Speaker 04:
Because she would have been allowing them to perjure themselves, basically.

[00:23:16] Speaker 04:
They had put in testimony.

[00:23:17] Speaker 04:
She doesn't say that.

[00:23:18] Speaker 03:
She doesn't call that out, does she?

[00:23:20] Speaker 03:
It certainly, I mean, I thought her analysis was that the other side, if this had been disclosed fairly and timely, then the other side, the other side has not had an opportunity, one, to review all of the documents, two, to conduct depositions and other expert stuff.

[00:23:38] Speaker 03:
I don't think she said, I can't let them testify because they would curge it themselves.

[00:23:45] Speaker 02:
I don't know why, I mean,

[00:23:47] Speaker 02:
I suppose a, a Fifth Amendment warning might be appropriate, but I don't know why a district court wouldn't allow someone to testify in order to protect them.

[00:23:59] Speaker 04:
I think that it's important, first of all, as I said, the court did conduct an in-camera review.

[00:24:08] Speaker 04:
And if there's a concern about whether or not Dr. Smeeland and Murphy have the opportunity.

[00:24:12] Speaker 02:
She said she engaged in sanctioning.

[00:24:16] Speaker 02:
as opposed to protection.

[00:24:20] Speaker 04:
She engaged in sanctioning because at that point, and with all due respect to Mr. Katyal, he was not there.

[00:24:30] Speaker 04:
I was there.

[00:24:31] Speaker 04:
And the court has broad discretion in determining what's an appropriate sanction.

[00:24:38] Speaker 04:
Now, this was not

[00:24:39] Speaker 04:
the broad sanction that Mr. Katyal says it was, but it was certainly merited under the circumstances.

[00:24:46] Speaker 04:
We started with the very beginning of the case, Regeneron refusing to obey the patent local rules and saying rather than breaking their claims down into elements for literal infringement, they said it's all one element.

[00:24:59] Speaker 04:
Then for claim construction, they decide to wait and see rather than coming out and affirmatively saying what the claim terms meant, they said it's plain meaning.

[00:25:08] Speaker 04:
They waive privilege on the eve of the Jones deposition.

[00:25:11] Speaker 04:
They're ordered to produce documents.

[00:25:12] Speaker 04:
They fail to produce those documents.

[00:25:15] Speaker 04:
They withhold a critical conception reduction to practice document and refuse and claim it's privileged when it's not.

[00:25:24] Speaker 04:
We get

[00:25:24] Speaker 04:
through to the eve of trial, and again, they waive privilege.

[00:25:28] Speaker 04:
And it turns out that not only have they withheld a series of non-privilege documents on their privilege log, they've also withheld a series of documents that were within the scope of the court's earlier waiver order, plus they've withheld all sorts of documents that contradict the testimony, the sworn testimony of their two witnesses.

[00:25:49] Speaker 04:
And under those circumstances, the court didn't know

[00:25:53] Speaker 04:
was stuck.

[00:25:54] Speaker 04:
She was in a place where what to do with this type of information.

[00:25:59] Speaker 04:
And it was well within her discretion to draw this adverse influence.

[00:26:02] Speaker 03:
Because she concluded what was her only alternative.

[00:26:05] Speaker 03:
If she decided to, in the alternative, if she decided to go forward, what would that have been?

[00:26:11] Speaker 04:
I think that to have gone forward, as she states in her opinion, would have required her to reopen Discovery, to allow documents to then be produced, to order the production of all the WAVE documents.

[00:26:26] Speaker 04:
And under the circumstances, in her discretion, she found that the adverse inference was more appropriate.

[00:26:35] Speaker 01:
So here we have four references that you tell us are material that were not cited in this case.

[00:26:43] Speaker 01:
They weren't cited by the examiner.

[00:26:46] Speaker 01:
You tell us in the record shows that there were a large number of related cases.

[00:26:51] Speaker 01:
We've been told that these references were cited.

[00:26:54] Speaker 01:
Maybe the wrongdoer was

[00:26:58] Speaker 01:
an incompetent examiner who didn't cite references that you tell us are relevant that were cited in related cases.

[00:27:08] Speaker 04:
But the evidence here is that Dr. Smeeland was aware of a rejection in a copending application.

[00:27:19] Speaker 04:
The 018 patent was the issue fee had not yet been paid.

[00:27:24] Speaker 04:
This is in the record that he was aware of the rejection

[00:27:27] Speaker 04:
And he made the affirmative decision not to disclose it because he was afraid that it would delay issuance.

[00:27:35] Speaker 01:
Who knows what the reason, but this is an extraordinarily crowded field of technology.

[00:27:42] Speaker 01:
When you look at the list to search, there are hundreds of references.

[00:27:46] Speaker 01:
Wherever you draw the line, there's something to criticize.

[00:27:50] Speaker 01:
That's why I asked for your definition of materiality.

[00:27:54] Speaker 01:
If it's but for materiality, that's

[00:27:58] Speaker 01:
really a different situation than something in the field that's of interest.

[00:28:05] Speaker 01:
And yet that distinction doesn't appear.

[00:28:09] Speaker 04:
Well, Dr. Smeeland knew what the point of distinction over the prior art that was being alleged by, what he was alleging to the Patent Office because he was the prosecutor.

[00:28:23] Speaker 04:
So he knows that they're saying that what's missing in the prior art is insertion at the endogenous mouse locus.

[00:28:30] Speaker 04:
And that's exactly what is taught in all four of these references.

[00:28:33] Speaker 04:
So these aren't just the litany of references that may or may not be relevant.

[00:28:37] Speaker 04:
These are but for relevant.

[00:28:39] Speaker 01:
And this is what the... They're obviously not invalidating references because these claims were not invalidated on those grounds.

[00:28:47] Speaker 04:
Well, that wasn't an issue in this court because the patent wasn't validated.

[00:28:51] Speaker 01:
Well, I kind of understand the materiality.

[00:28:53] Speaker 01:
We have a career destroying an extraordinarily serious charge going far beyond loss of the patent or anything else.

[00:29:02] Speaker 01:
And we have been looking at this court for standards almost from the beginning because of the extraordinary potential for

[00:29:14] Speaker 01:
abuse.

[00:29:15] Speaker 01:
You put the lawyers on the defensive and it's a diversion.

[00:29:20] Speaker 01:
And again, I don't think anyone can ever find a case in which the issue can't be raised.

[00:29:27] Speaker 01:
And I'm trying to understand the strength of that argument here.

[00:29:35] Speaker 04:
So in this situation, the district court found after hearing testimony from Dr. Davis

[00:29:44] Speaker 04:
which she found credible, that these references, had they been disclosed to the Patent Office.

[00:29:50] Speaker 01:
But they were known to the Patent Office.

[00:29:52] Speaker 01:
They've been cited in related cases.

[00:29:54] Speaker 04:
They weren't necessarily known to this examiner.

[00:29:57] Speaker 04:
And since this was not a case where we were asserting, we invalidated the patent based on indefiniteness.

[00:30:06] Speaker 04:
And the patent is certainly invalid for indefiniteness since there is absolutely no objective boundaries to the endogenous mouse immunoglobulin locus to which the DNA has to be inserted.

[00:30:20] Speaker 04:
So we never got to the prior art to then assert these references and invalidate the patent based on those references.

[00:30:28] Speaker 04:
But that's significant, is it not?

[00:30:30] Speaker 04:
You never got to it.

[00:30:33] Speaker 04:
We never got to it because we had already invalidated the patent.

[00:30:37] Speaker 04:
However, had we gotten to it, these references would have invalidated at least claims 135.

[00:30:43] Speaker 01:
Do you want us to guess that that would have happened?

[00:30:46] Speaker 01:
If this trial judge never got to it, but nonetheless sanctioned?

[00:30:52] Speaker 04:
I don't think we have to guess because

[00:30:56] Speaker 04:
Regeneron points out that in some of those copending applications after they filed their appeal brief that they received notices of allowance.

[00:31:07] Speaker 04:
Obviously that's not in the record, but it's telling that they did not submit the claims that were issued in those cases because if the court, and we would be happy to submit the claims, because what the court's going to see is they don't look anything like claims one through five.

[00:31:23] Speaker 04:
which those references were but for material to.

[00:31:27] Speaker 04:
They have all sorts of limitations.

[00:31:30] Speaker 04:
The district court's already decided that they're but for material after listening to six days of testimony.

[00:31:39] Speaker 04:
She determined that they would be invalidating because they're but for material.

[00:31:48] Speaker 04:
Because that wasn't something that was in the case at the time.

[00:31:52] Speaker 01:
As I say, you want us to assume or presume that that's what would have happened.

[00:31:58] Speaker 01:
I think that this court should... Because there was no explanation by the district judge.

[00:32:03] Speaker 04:
There is no clear error in the district court's finding that these are but for material references.

[00:32:10] Speaker 04:
The evidence in the record below demonstrates that they are but for material references.

[00:32:16] Speaker 01:
You say you want us to make those findings a fact.

[00:32:19] Speaker 04:
The district court's already made the findings a fact.

[00:32:22] Speaker 04:
that the references are but for material and her findings of fact are due deference by this court.

[00:32:48] Speaker 00:
Thank you.

[00:32:49] Speaker 00:
There are two elements to the inequitable conduct.

[00:32:51] Speaker 00:
And they have a high standard for reasons that Judge Newman was explaining.

[00:32:55] Speaker 00:
The consequences are grave to prosecutors, to the PTO, and to the company itself.

[00:33:00] Speaker 00:
On that sprung about specific intent, this is not an adverse inference.

[00:33:04] Speaker 00:
There's no finding of bad faith by the lawyers here.

[00:33:08] Speaker 00:
And this canceled the trial altogether on one of the key elements.

[00:33:12] Speaker 00:
On but four materiality, four points, the first is the most important.

[00:33:16] Speaker 00:
I said this in my opening.

[00:33:17] Speaker 00:
I said, she's got to come and explain what in those four references she asserts was not already disclosed by the ones we had disclosed, Kuchalarpati and Lomborg in particular.

[00:33:30] Speaker 00:
She gave you two answers.

[00:33:32] Speaker 00:
The first answer, she said, was that Wood taught about reverse chimeric antibodies.

[00:33:37] Speaker 00:
So did Lomborg.

[00:33:38] Speaker 00:
And we were very clear on this.

[00:33:40] Speaker 00:
That's, in fact, in the patent itself and the specification.

[00:33:42] Speaker 00:
And then all through the PTO, we have disclosed Lahnberg.

[00:33:45] Speaker 00:
Indeed, the whole debate was, in the PTO, was Lahnberg's already talking about reverse chimeric antibodies.

[00:33:52] Speaker 00:
What's new about your invention?

[00:33:54] Speaker 00:
Her other point was she said these other references, four of them, I guess, taken together, teach insertion into the locus.

[00:34:01] Speaker 00:
But there's several problems with that.

[00:34:04] Speaker 00:
You know, Lomborg and Kutrupati both teach insertion of human DNA into genetically modified mouse.

[00:34:10] Speaker 00:
Indeed, Lomborg discloses targeting into the mouse using the same technique we are, the homology arms.

[00:34:16] Speaker 00:
And that's our brief at page 44.

[00:34:18] Speaker 00:
It provides all the citations to this.

[00:34:20] Speaker 00:
We gave that to the PTO.

[00:34:22] Speaker 00:
There is nothing that is in these references that we hadn't already disclosed to the PTO.

[00:34:27] Speaker 00:
It's cumulative.

[00:34:28] Speaker 00:
There could be a debate about whether or not our patent was obvious.

[00:34:31] Speaker 00:
We understand that.

[00:34:32] Speaker 00:
But this is inequitable conduct, that grave thing, not the kind of more modest thing.

[00:34:38] Speaker 00:
The second thing, I don't think Ms.

[00:34:40] Speaker 00:
Carson explains why these four references just taken on their own terms matter.

[00:34:44] Speaker 00:
Our brief explains lots of errors the district court makes with respect to these errors.

[00:34:48] Speaker 00:
For example, she called Taki something about human DNA, when it's really all about mice DNA, and so on.

[00:34:55] Speaker 00:
And then she had said something about claim 20, and our brief only claimed 20, and our claims weren't drawn to claim one.

[00:35:02] Speaker 00:
Our reply brief at page 13 makes very clear that when we talked about reverse chimeric mice, we were talking about claim one, and the citations are there.

[00:35:12] Speaker 03:
Thank you.

[00:35:12] Speaker 03:
We thank both sides.

[00:35:13] Speaker 03:
The case is suspended.