[00:00:00] Speaker 02:
Before we get started, we have an administrative type matter that we'd like to address.

[00:00:07] Speaker 02:
And this is the admission to the bar of Diane E. Griss.

[00:00:12] Speaker 02:
Diane, can you stand?

[00:00:20] Speaker 02:
Colleagues of the court, I move for the admission of Diane E. Griss as a member of the bar.

[00:00:28] Speaker 02:
She's a member of the bar and is good standing with the highest courts of California and the District of Columbia.

[00:00:35] Speaker 02:
I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications.

[00:00:43] Speaker 02:
Diane, they say that time flies when you're working hard.

[00:00:47] Speaker 02:
I certainly believe that.

[00:00:49] Speaker 02:
And if that is true, then this past year must have been nothing but a blur for you because you certainly have been working hard.

[00:00:59] Speaker 02:
If you represent the quality of the bar in your age group, then I feel secure that the meaningful development of the law and the endurance of our legal system is in good hands.

[00:01:23] Speaker 02:
Dr. Bryson?

[00:01:28] Speaker 00:
Judge Raina, your motion is granted and the applicant will be admitted.

[00:01:32] Speaker 00:
She will now face the clerk to administer the oath.

[00:01:36] Speaker 02:
Please raise your right hand.

[00:01:38] Speaker 02:
Do you solemnly swear or affirm that you will comport yourself as an attorney and counsel of this court, upright and according to law, and that you will support the Constitution of the United States of America?

[00:01:50] Speaker 02:
I do.

[00:01:50] Speaker 02:
Welcome to the bar of the United States Court of Appeals.

[00:01:58] Speaker 02:
Okay.

[00:02:03] Speaker 02:
We have four cases before the court today.

[00:02:05] Speaker 02:
One case is on the briefs.

[00:02:08] Speaker 02:
The other cases are set for argument this morning.

[00:02:11] Speaker 02:
Our first case is 17-1947, Anacore Pharmaceuticals versus Iancu.

[00:02:19] Speaker 02:
Mr. Kennedy?

[00:02:21] Speaker 02:
And you reserve five minutes of your time?

[00:02:23] Speaker 01:
That's correct, Your Honor.

[00:02:25] Speaker 02:
Let me point something out.

[00:02:29] Speaker 02:
Most or a lot of the record is more confidential, and portions of the brief is more confidential.

[00:02:37] Speaker 02:
I'm sorry, this is another case.

[00:02:40] Speaker 02:
OK, let's go forward then.

[00:02:45] Speaker 01:
May it please the court.

[00:02:47] Speaker 01:
Anacor was deprived of its due process and APA guarantees in this case because the board invalidated claim six based on an argument that appears nowhere in the petition.

[00:02:57] Speaker 01:
Specifically, the theory on which the board found a reasonable expectation of success in arriving at claim 6 was advanced by petitioner for the first time on reply.

[00:03:06] Speaker 01:
The reference common to both grounds, the Austin reference, is the one that discloses tababorol, the compound at issue for claim 6.

[00:03:14] Speaker 01:
But Austin contains in vitro data only for treating a yeast called C. albicans.

[00:03:21] Speaker 01:
Claim 6 is limited to treating onychomycosis caused by a certain dermatophyte.

[00:03:28] Speaker 01:
So the petition needed to create a link between Austin and the secondary references, Brayhove and Freeman, that would give rise to a reasonable expectation of success in using Taviboral to treat onychomycosis caused by a dermatophyte.

[00:03:42] Speaker 01:
The petition attempted to do this by arguing that the compounds in Austin and the compounds disclosed by the secondary references would be combined because those compounds had structural similarity with each other

[00:03:54] Speaker 01:
and they also had allegedly overlapping functional activity.

[00:03:59] Speaker 01:
Austin had in vitro data for C. albicans, Brehove had in vitro data for C. albicans, and Freeman had in vitro data for dermatophytes.

[00:04:09] Speaker 01:
And so the original theory was that you would combine those references and you would assume that because Austin had overlapping functional activity, Austin's compounds would also work against dermatophytes.

[00:04:22] Speaker 00:
Mr. Kennedy,

[00:04:24] Speaker 00:
interrupt in your presentation because as I read the petition and then ultimately comparing it with the decision of the board, it looked to me as if the theory was exactly the same.

[00:04:40] Speaker 00:
There was not total reliance on structure, structure was alluded to, but function was very important and the factor of low molecular weight of the Tavropol

[00:04:52] Speaker 00:
was a factor that was considered.

[00:04:56] Speaker 00:
But if you read the petition and you read the decision, they look quite similar in what they say.

[00:05:02] Speaker 00:
Now, it is true that there was additional evidence that was relied on by the board, the Merton and Siegel references, for example, but that's different, it seems to me, from saying that they adopted a new theory.

[00:05:16] Speaker 00:
So as I take it, you're

[00:05:19] Speaker 00:
The thrust of your argument really is a challenge to the admission of Merton and Siegel, is it not?

[00:05:25] Speaker 01:
Well, Merton and Siegel are certainly new references, but I would direct your honor to appendix 30 and 31, which is the board's findings on whether there would be a reasonable expectation of success in combining Austin and Brayhove.

[00:05:38] Speaker 01:
And then they carried over those findings to ground two.

[00:05:41] Speaker 01:
But structural similarity was the basis for motivation to combine a reasonable expectation of success

[00:05:48] Speaker 01:
Structural similarity had nothing to do with the ultimate outcome for that issue.

[00:05:53] Speaker 00:
Well, you say it was the basis.

[00:05:54] Speaker 00:
Structural similarity was never the sole basis on which the petition was predicated or the petitioners proceeded, as I read the record.

[00:06:05] Speaker 00:
Function was, it seems to me, as I read the record, more important than structure.

[00:06:10] Speaker 00:
And the board referred to the fact that both of the compounds in Austin and Briehove were boron

[00:06:17] Speaker 00:
heterocycles.

[00:06:18] Speaker 00:
So there were similar structure, but they didn't put neither the board nor the petition seemed to put great weight on that.

[00:06:26] Speaker 01:
Well, here's how we know that reasonable expectation of success did not turn at all on structural similarity.

[00:06:33] Speaker 01:
The board at pages 30 and 31 of its decision cited the new evidence, Siegel, Nomura, and Merton, and said because those references show

[00:06:45] Speaker 01:
that a given compound against C. albicans would be even more effective against dermatophytes.

[00:06:52] Speaker 01:
Therefore, there's a reasonable expectation of success.

[00:06:55] Speaker 01:
Siegel, Merton, and Namura don't even concern boron-based compounds.

[00:06:59] Speaker 01:
At that point, the board has completely stopped looking at the structural similarity between the Austin compounds and any other sets of compounds.

[00:07:09] Speaker 01:
In other words, let me put it a different way, in the petition,

[00:07:14] Speaker 01:
relevance of the C. albicans data in Austin is only because Brayhove also shows activity against C. albicans.

[00:07:24] Speaker 01:
Therefore, that's an overlapping functional activity that gives rise to an inference that Taviborol will also work against dermatophytes.

[00:07:34] Speaker 01:
Now in the way the petition or the way the final written decision played out, you don't need to know anything about anything except that Taviborol

[00:07:43] Speaker 01:
has activity against Cialbicans, because then what the board did was it combined it with all the new evidence that came in after the petition to say, well, if this compound works against Cialbicans, it will work even better against the dramatic fight.

[00:07:55] Speaker 03:
What about how on page 29 of the board's decision, it's talking about the references that were in the petition, Austin and Briehove, and it relies on Dr. Murthy's

[00:08:09] Speaker 03:
testimony.

[00:08:10] Speaker 03:
And then at the end, it says, patent owner responds that a person of ordinary skill and the art could not have predicted.

[00:08:16] Speaker 03:
And it's not until it mentions that the patent owner responds that the board actually then discusses Siegel, Nemora, and Merton on the following page at page 30.

[00:08:28] Speaker 01:
Well, first there's an important clarification about appendix 29.

[00:08:31] Speaker 01:
The Murphy citation here is actually to his reply declaration.

[00:08:35] Speaker 01:
The citation to Murphy is not from the petition.

[00:08:39] Speaker 01:
That's Exhibit 1044, I think it's Appendix 1726.

[00:08:43] Speaker 01:
And the intervener places a lot of emphasis on this aspect of Murphy, but this wasn't even part of the petition.

[00:08:51] Speaker 01:
But more to the point, the reasonable expectation of success, the way it was found at Appendix 30 and 31, you don't even have to look at Brayhove under the board's logic to find a reasonable expectation of success.

[00:09:08] Speaker 01:
In 29, it's reciting the party's arguments.

[00:09:11] Speaker 00:
Well, but it ultimately says we accept the petitioner's argument.

[00:09:15] Speaker 00:
It recites the argument.

[00:09:16] Speaker 00:
It's true.

[00:09:17] Speaker 00:
But then at the end, it says we accept it.

[00:09:19] Speaker 00:
Yes.

[00:09:20] Speaker 00:
So it seems to me you have to view what the board is saying as incorporating as its own the arguments made by the petitioner.

[00:09:26] Speaker 01:
Well, it's reciting the party's arguments, including the key argument in 29, which didn't come in into the reply.

[00:09:32] Speaker 00:
Well, but on this business of the reply, it does strike me

[00:09:37] Speaker 00:
that several of the references you've talked about, Siegel and Numera, and I guess Uluski, which is also- Merton.

[00:09:47] Speaker 00:
Well, I know.

[00:09:47] Speaker 00:
But Uluski is another reference.

[00:09:49] Speaker 00:
And these all came in.

[00:09:51] Speaker 00:
They were introduced in the patent owner's response.

[00:09:56] Speaker 00:
The only one of the references that was not, as I understand it, in the patent owner's response was Merton.

[00:10:03] Speaker 00:
And that was a reference which Dr. Lane

[00:10:06] Speaker 00:
acknowledged in her deposition that she was aware of.

[00:10:09] Speaker 00:
And in her declaration, I believe, she referred to two other Merton references, which were part of a three-part article that was done by Merton and Lippold.

[00:10:20] Speaker 00:
So the notion that you were somehow blindsided by these references, you had an opportunity to discuss those references.

[00:10:32] Speaker 00:
Why aren't they legitimate reply to the various arguments that you made in the course of the patent owner's response and the declarations of your experts?

[00:10:45] Speaker 01:
Well, first of all, this is a clarification.

[00:10:47] Speaker 01:
I'm not sure about Dr. Lane, but I think what Your Honor might be referring to is petitioners expert Dr. Murphy testified

[00:10:54] Speaker 01:
He knew about the Merton reference the whole time.

[00:10:56] Speaker 00:
He did.

[00:10:57] Speaker 00:
And then Dr. Lane subsequently acknowledged that she was aware of the Merton reference, and in fact testified at some length about two of the other related Merton references.

[00:11:08] Speaker 00:
And she said, well, I didn't cite the third one, but yeah, I was aware of it.

[00:11:12] Speaker 01:
Well, Your Honor, let me get to the broader point, which is that this case is like an invasive, which is a situation where there were new arguments based on references that were already known about.

[00:11:22] Speaker 01:
In nuvasive, one of the key prior art references, the petition argued that one claim element was in that reference.

[00:11:30] Speaker 01:
I think this is an implant case.

[00:11:33] Speaker 01:
And then they got another claim element from a different reference.

[00:11:36] Speaker 01:
Then on reply, they switched to getting both of those claim elements from the same figure of the same reference.

[00:11:43] Speaker 00:
But nuvasive makes clear that the prohibition against introducing a new theory or new evidence did not apply

[00:11:52] Speaker 00:
when the new evidence is introduced as legitimate reply response to an argument made by the patent owner.

[00:12:01] Speaker 00:
Why is this not a case of legitimate reply?

[00:12:04] Speaker 01:
For a couple of reasons.

[00:12:05] Speaker 01:
Because first of all, if you look at the patent owner response, both parties spent a great deal of time arguing about structural similarity.

[00:12:13] Speaker 01:
We argued that you would not have combined Austin with either of the other references because the boron-containing compounds have no meaningful structural similarity.

[00:12:22] Speaker 01:
In the reply, there was a new argument, like in nuvasive, with even granting your honor's point that a couple of the references came in before the reply based on a completely different theory.

[00:12:34] Speaker 01:
Structural similarity is essentially out the window when it comes to reasonable expectation of success.

[00:12:40] Speaker 01:
In order to show reasonable expectation of success for treating dermatophytes, all you need to know is that compounds activity against yeasts.

[00:12:50] Speaker 01:
That came in with the reply.

[00:12:51] Speaker 01:
It was just shown pretty starkly in the reply.

[00:12:54] Speaker 01:
I would show your honor 757, 771, 72, and 778.

[00:12:59] Speaker 01:
Petitioner completely abandoned the idea that structural similarity was the link between the references.

[00:13:07] Speaker 01:
It just pointed to Merton.

[00:13:09] Speaker 00:
But why wasn't that legitimate reply to Dr. Ghanoum?

[00:13:14] Speaker 00:
who in his declaration and then ultimately in his deposition at great length, he talked about how you could not anticipate effectiveness against dermatophytes based on effectiveness against Candida albicans because he says, here's an example, ketoconazole.

[00:13:33] Speaker 00:
And he says, ketoconazole has high activity against the albicans, low activity against dermatophytes.

[00:13:39] Speaker 00:
And then

[00:13:40] Speaker 00:
Merton is used to cross-examine him about why it is that Merton, for example, shows that a number of antimicotics are more effective against dermatophytes than C. albicans.

[00:13:55] Speaker 00:
That seems like a legitimate reply.

[00:13:57] Speaker 01:
Well, the context of Dr. Ghanoum's testimony was more attacking Brayhove because the issue that... We didn't think it was particularly controversial that Austin by itself did not

[00:14:09] Speaker 01:
give rise to a reasonable expectation of success.

[00:14:12] Speaker 01:
The petition, if you look at the claim charts, located that disclosure in Brayhove.

[00:14:17] Speaker 01:
So the issue we were attacking with Dr. Ghanoum was whether Austin and Brayhove combined or Brayhove gave rise to a reasonable expectation of success.

[00:14:26] Speaker 01:
And in any event, under the statute 312A3, it's in any case the petitioner's burden to show a prima facie case of obviousness.

[00:14:36] Speaker 01:
And the basis of their prima facie case

[00:14:39] Speaker 01:
which includes reasonable expectation success, completely changed from petition to reply.

[00:14:44] Speaker 01:
And I think Intervenor tries to argue that we somehow opened the door to this new argument with Dr. Ghanoum, but I don't think that's how the IPR statute contemplates these proceedings going.

[00:14:56] Speaker 01:
The fact remains, Anacor was sandbagged by a completely new argument, just like Henry Nubasev.

[00:15:02] Speaker 02:
What's the structure of similarity

[00:15:04] Speaker 02:
Beyond that, both compounds contain boron and heterosexual ring structure.

[00:15:10] Speaker 01:
We don't know, Your Honor.

[00:15:11] Speaker 01:
And that's part of our appeal, is that there's no substantial evidence to show the structural similarity link.

[00:15:17] Speaker 02:
Was there any evidence presented on that particular issue beyond what I read at appendix 1225?

[00:15:24] Speaker 02:
If you look at that, paragraph 100, it says the compounds

[00:15:32] Speaker 02:
Brehove are also boron heterocycles.

[00:15:34] Speaker 02:
That's the only statement I found as to any type of structural similarity.

[00:15:40] Speaker 01:
That's correct, Your Honor.

[00:15:41] Speaker 01:
We agree that petitioner never identified a meaningful structural similarity.

[00:15:48] Speaker 01:
They started out by calling all of these compounds boron-based compounds.

[00:15:52] Speaker 01:
And we asked their chemistry expert, well, what does that mean to be boron-based?

[00:15:56] Speaker 01:
And he said, well, maybe that was a poor choice of words.

[00:15:58] Speaker 01:
What I really meant was boron-containing.

[00:16:01] Speaker 01:
But there's literally millions and millions of compounds that have boron in them.

[00:16:07] Speaker 01:
And the board, in its ruling, sort of pivoted.

[00:16:10] Speaker 01:
They said, well, we acknowledge that there are structural differences, but there are some similarities.

[00:16:17] Speaker 01:
And it didn't really articulate what those were beyond boron heteros.

[00:16:21] Speaker 02:
But assuming that, let's take that statement as true, and that that's a statement of similarity.

[00:16:28] Speaker 02:
What does that do to the reasonable expectation of success when you got that type of structural similarity, this specific structure?

[00:16:37] Speaker 02:
You have compounds that share boron heterocycles.

[00:16:41] Speaker 01:
Well, I mean, under Petitioner's theory, or their original theory that they abandoned.

[00:16:45] Speaker 02:
We're still talking about millions of different types of compounds involved, correct?

[00:16:50] Speaker 01:
Yeah, yeah.

[00:16:50] Speaker 01:
They pick one compound out of Austin's millions and say that would have been the preferred compound.

[00:16:56] Speaker 01:
The original theory is you would plop that compound into a method of treating a human being like allegedly would come out of Brayhover Freeman.

[00:17:05] Speaker 02:
So in terms of substantial evidence, other than this statement here, in your view, is there any type of evidence submitted that would indicate some sort of structural similarity between the two compounds?

[00:17:19] Speaker 01:
No.

[00:17:20] Speaker 01:
No, we agree.

[00:17:21] Speaker 01:
There is no substantial evidence to support any finding that there is

[00:17:26] Speaker 01:
structural similarity between any of these compounds.

[00:17:30] Speaker 01:
Other than that they have boron in them, and that they have hetero... that Brejov is a heterocycle compound, we don't know what the meaningful similarity is.

[00:17:39] Speaker 01:
And I would point in particular to the Merck case at intervener sites, where there was a one-atom difference giving rise to structural similarity.

[00:17:48] Speaker 01:
Here, there's a lot... I mean, the different structures, some are not planar, some are non-planar.

[00:17:54] Speaker 01:
So we

[00:17:56] Speaker 01:
Agree, there's no substantial evidence.

[00:17:58] Speaker 02:
We drove you past your time.

[00:18:00] Speaker 01:
Yeah, I completely burned my rebuttal time, I apologize.

[00:18:02] Speaker 02:
No, we'll restore you back to five minutes.

[00:18:05] Speaker 01:
Thank you, your honor.

[00:18:15] Speaker 02:
So other than this statement that I read out of 1225, what's the

[00:18:21] Speaker 02:
What's the evidence that shows that structural similarity between the two compounds we're looking at?

[00:18:27] Speaker 04:
Yes, Your Honor.

[00:18:28] Speaker 04:
So the structural similarity, I don't think is disputed.

[00:18:30] Speaker 04:
It is that they're boron heterocycles, that the Briehove and Taviboro are both boron heterocycles.

[00:18:36] Speaker 04:
I think, though, in the context, then, of what the biocide

[00:18:41] Speaker 04:
science and the state of the art, that was a sufficient structural similarity for the board to align.

[00:18:47] Speaker 02:
But just to be clear, there's no other evidence in the record as to structural similarity.

[00:18:52] Speaker 04:
There's evidence in the record that one of Skill in the Art would have thought that that structure was important.

[00:18:58] Speaker 04:
So, Briehove... No, no, I know that.

[00:19:01] Speaker 04:
Okay.

[00:19:01] Speaker 02:
That's not what I'm asking.

[00:19:02] Speaker 02:
Is there any other evidence other than this particular point in the record?

[00:19:09] Speaker 04:
There, I mean, that is the structural similarity.

[00:19:11] Speaker 04:
The structural similarity is that that's the evidence.

[00:19:14] Speaker 02:
That's the entire evidence in this case on structural similarity.

[00:19:17] Speaker 04:
Right.

[00:19:17] Speaker 03:
Do you think there's other evidence that's relied on for purposes of showing that one of ordinary scale in the art would have been motivated to combine the references in the original petition, for example, functional similarity?

[00:19:28] Speaker 04:
Right.

[00:19:28] Speaker 04:
So the motivation to combine and the reasonable expectation of success is premised on the structural similarity as well as

[00:19:35] Speaker 04:
that Briehove compounds and Taviboral have this identical activity, the biocidal or fungicidal activity against C. albicans.

[00:19:45] Speaker 04:
And not only that, Taviboral had activity against five different yeast species.

[00:19:50] Speaker 04:
Only one of them was the C. albicans, and they were all different genuses of yeast.

[00:19:54] Speaker 04:
So one of the responses from Antigua is that actually Taviboral has quite a broad spectrum, and that was their response about toxicity, the worry about toxicity, because Taviboral

[00:20:05] Speaker 04:
in Austin's teaching actually shows quite by having inhibitory effect against five different genus of yeast, of our fungi, that it would in fact be toxic.

[00:20:17] Speaker 04:
And I think going back to the similar, the structural similarity too, Briehove, which has the boron containing compounds, generally teaches that organoboron compounds are known to be biocidal.

[00:20:29] Speaker 04:
And so you have this teaching in the art that the boron compound, that structural,

[00:20:33] Speaker 04:
similarity is important for one of the skill in the art to understand their function.

[00:20:38] Speaker 04:
And then it's not that we just have that structure.

[00:20:40] Speaker 04:
We in fact know that Taviboral is acting as a fungicide quite broadly.

[00:20:45] Speaker 04:
And the Briehove compounds, it shares a similar activity.

[00:20:49] Speaker 04:
And then Briehove compounds have this in vivo activity.

[00:20:52] Speaker 04:
And that is the evidence that the board's relying on for the reasonable expectation of success.

[00:20:58] Speaker 00:
That's really the heart of the case, isn't it?

[00:21:00] Speaker 00:
The functional as opposed to, I mean, it strikes me

[00:21:03] Speaker 00:
reading this case that structure was a starting point, but really no more than a starting point.

[00:21:09] Speaker 00:
You never would have been able to sustain this case if all you had was structure.

[00:21:14] Speaker 00:
I assume you would agree.

[00:21:15] Speaker 04:
I absolutely agree.

[00:21:16] Speaker 00:
So what really matters is the function.

[00:21:18] Speaker 00:
And there you have the Briehove with the in vivo, in particular, against onycomycosis being

[00:21:29] Speaker 00:
which is mostly dermatophytes, about 90%.

[00:21:32] Speaker 00:
So presumably the individuals that were successfully treated in Briehove had, the odds are very high that they had dermatophytes.

[00:21:44] Speaker 04:
That's correct.

[00:21:44] Speaker 00:
And so you've got Briehove showing activity against dermatophytes.

[00:21:50] Speaker 00:
And then the question is functional comparison between Briehove, which treats C. albicans and

[00:21:57] Speaker 00:
Austin, which treats C. albicans.

[00:22:00] Speaker 00:
And then you're there, right?

[00:22:01] Speaker 04:
Right.

[00:22:01] Speaker 04:
That was the basis of the petition.

[00:22:03] Speaker 04:
And of course, they had many responses.

[00:22:06] Speaker 04:
And one of the arguments they teased out was that one of Skill in the Art wouldn't have then been able to predict this activity against dermatocytes based on activity against C. albicans.

[00:22:16] Speaker 04:
And so the petition had there all the evidence we discussed about for the reasonable expectation of success.

[00:22:22] Speaker 04:
And a court came back with their response that you wouldn't have been able to predict this activity based on Seattle.

[00:22:28] Speaker 04:
And the board then addresses that dispute between the parties in determining a reasonable expectation of success.

[00:22:35] Speaker 02:
Let's look at this issue of effectiveness of the function.

[00:22:41] Speaker 02:
And I refer you to J6219.

[00:22:43] Speaker 02:
Sorry, say again?

[00:22:45] Speaker 02:
J6219 is table one.

[00:22:49] Speaker 02:
This is Anacore's expert that presented this table that shows, for example, in the first compound, which is taverborally, and then we go down to A, and there's just a very minor change in the structure, extremely minor.

[00:23:14] Speaker 02:
An untrained eye would look at the structure of these two compounds and say they're very similar, but there's been a change, a very small one, and look at the effective rate.

[00:23:24] Speaker 04:
Yes.

[00:23:24] Speaker 02:
And it's much, much less effective.

[00:23:27] Speaker 02:
And when you go down the line here, you're changing the different structure, making minute changes, then you see dramatic shifts in effectiveness of the drug.

[00:23:42] Speaker 04:
That's correct.

[00:23:44] Speaker 04:
The point there, and I, you know, structural differences do matter.

[00:23:49] Speaker 04:
And when you have a compound, starting with Tavibrolol, and you're going to change it, I absolutely agree that you wouldn't be able to predict, based on that structural change alone, whether you were going to have a compound that was fungicidal, that had activity against the albicans.

[00:24:04] Speaker 04:
But that's not the situation here.

[00:24:06] Speaker 04:
We know Tavibrolol is the one.

[00:24:08] Speaker 02:
So does function in terms of reasonable expectation of success

[00:24:12] Speaker 02:
dissimilarity of function trump dissimilarity of structures?

[00:24:18] Speaker 04:
Well, I think it does in this case.

[00:24:20] Speaker 04:
I mean, I think there's background information about boron-containing compounds having similar activities just based on that structure.

[00:24:27] Speaker 04:
But once you look at the evidence that was introduced on the reasonable expectation of success, you have very different compounds in seagull, nemora, and merton.

[00:24:38] Speaker 04:
having activity based on yeast and having activity then on dermatocytes.

[00:24:43] Speaker 04:
So it tends to show you that once you know a compound is fungicidal against yeast, you have a reasonable expectation that would also be fungicidal against dermatocytes, regardless of the structure.

[00:24:56] Speaker 04:
But if you don't know anything about the compound's activity, like the different compounds in that chart, when you change the structure and you don't know anything about that compound's function,

[00:25:06] Speaker 04:
I agree, you can't predict what that function is.

[00:25:08] Speaker 02:
But what does that do when we look at the similarity of function or the activity?

[00:25:15] Speaker 02:
Similarity of activity of two compounds.

[00:25:20] Speaker 02:
And we say that's enough.

[00:25:22] Speaker 02:
When there's similarity in function, that's enough to have a motivation to combine.

[00:25:27] Speaker 02:
But let's say that happens where you have two compounds that are structurally very dissimilar.

[00:25:33] Speaker 02:
And what does that do to the reasonable?

[00:25:36] Speaker 02:
Aren't we talking about a reasonable expectation of success here?

[00:25:40] Speaker 04:
Right, we are.

[00:25:41] Speaker 04:
So I'm not quite sure I understand your honor's question, but let me see.

[00:25:46] Speaker 02:
It seems like that we- It seems to me you're arguing that a reasonable expectation of success doesn't matter in situations where you have similarity of function.

[00:25:57] Speaker 04:
Well, reasonable expectation of success absolutely

[00:26:01] Speaker 02:
matters, the reason you have... When would you look at it in a situation, even here, where you say, well, we have two compounds, forget about their structural similarities or differences, there's a similarity in activity or in function, that should be enough.

[00:26:19] Speaker 02:
We don't have to go to the question of reasonable expectation of success.

[00:26:26] Speaker 02:
Because you succeeded.

[00:26:27] Speaker 02:
You have a right.

[00:26:29] Speaker 02:
You have two compounds that basically are functioning alike.

[00:26:33] Speaker 04:
So... But here we don't... That's true.

[00:26:36] Speaker 04:
We know that they have a similar function in terms of acting against the albicans.

[00:26:41] Speaker 04:
But we don't have direct proof for the tavaborol acting against dermatocytes.

[00:26:46] Speaker 04:
And that's why we need the evidence about whether we would have a reasonable expectation of success.

[00:26:49] Speaker 00:
So your argument, as I understand it, is that in the area, at least, of fungicides,

[00:26:55] Speaker 00:
which Dr. Call described as simple organisms, you expect to have broad spectrum effectiveness.

[00:27:03] Speaker 00:
And there's evidence of that.

[00:27:04] Speaker 00:
And the broad spectrum effectiveness means that if you have a compound which is effective against the albicans,

[00:27:10] Speaker 00:
you can infer that it's likely to be effective against Dermatophytes.

[00:27:14] Speaker 00:
That's your argument in a nutshell, is it not?

[00:27:16] Speaker 04:
Well, I think, and that's what the board essentially deciding the dispute between the parties said, that is true.

[00:27:22] Speaker 04:
You would have a reasonable expectation of success once you knew that a compound had activity of C. albicans.

[00:27:27] Speaker 04:
But you also, this is still determining that reasonable expectation of success based on the teachings of Austin and Brevov.

[00:27:34] Speaker 00:
It's still based on the same.

[00:27:36] Speaker 00:
I understand that.

[00:27:37] Speaker 00:
Let me ask you a question about Merton, the Merton reference.

[00:27:41] Speaker 00:
Now, Merton was not, of course, in the petition.

[00:27:44] Speaker 00:
It popped up, I guess... The reply.

[00:27:48] Speaker 00:
Well, before that, in the course of the depositions.

[00:27:51] Speaker 00:
I think it was... Was that in Ghanoum's deposition?

[00:27:56] Speaker 00:
I think so.

[00:27:58] Speaker 00:
It may also have been in Dr. Lane's deposition.

[00:28:05] Speaker 00:
Explain why it is that that is not a problem and that that reference came in belatedly, not in the petition in any event.

[00:28:14] Speaker 04:
The petitioner relied on Merton to directly respond to the patent owner's response.

[00:28:19] Speaker 04:
And the patent owner's response had the Seagull and the Nomura reference to support an argument that one wouldn't have predicted activity based on C. albicans to get to dramaticites.

[00:28:30] Speaker 04:
And the Merton reference then was a direct response as the board

[00:28:34] Speaker 04:
found to that argument made in the patent owner's response.

[00:28:39] Speaker 04:
So in general, the evidence that you've put in supports our position, but also we have the Merton reference that shows in general a compound that has activity against yeast also has a low inhibitory concentration against dermatocytes.

[00:28:57] Speaker 04:
And that answers the dispute between the parties during the IPR

[00:29:01] Speaker 04:
that was raised by the patent owner about whether there would be a reasonable expectation of success based on the obviousness ground asserted in the petition.

[00:29:11] Speaker 02:
Would it proceed to expect an industrial biocide to be safe for humans?

[00:29:18] Speaker 04:
Well, the Briehove compounds are an industrial biocide, and they were used on patients safely.

[00:29:24] Speaker 04:
Anacor made that argument to the board that you would expect these compounds to be toxic.

[00:29:29] Speaker 04:
I don't read their brief as

[00:29:31] Speaker 04:
making that argument here.

[00:29:33] Speaker 04:
I think it actually, their argument about toxicity also was quite, it relied on the same structural similarity.

[00:29:40] Speaker 04:
Their argument was boron containing compounds are toxic without any regard for the rest of the structure.

[00:29:47] Speaker 04:
And so the evidence before the board was both parties were relying on this similar boron structure.

[00:29:54] Speaker 04:
to determine function.

[00:29:55] Speaker 02:
Would toxicity on human beings affect the argument of reasonable expectation of success?

[00:30:04] Speaker 04:
They raised that argument to the board, and yes, it can affect whether there's a reasonable expectation of success.

[00:30:09] Speaker 04:
But the board found that their evidence was insufficient because it relied on a discredited article.

[00:30:15] Speaker 02:
It relied on studies that were... So let's say, what if I found out that there is a certain

[00:30:22] Speaker 02:
model of Roundup, the weed killer, that also kills this fungicide, would have proceeded to look at that and go, well, this Roundup I use on my lawn also kills this particular fungus.

[00:30:34] Speaker 02:
Let me combine with that.

[00:30:36] Speaker 04:
I mean, on that hypothetical, if you knew, if you had a compound that was acting against a yeast, the C. albicans, that's a cause of onychomycosis, that seems

[00:30:46] Speaker 04:
I mean, I don't know anything about the structure of Roundup.

[00:30:48] Speaker 04:
I don't know anything else about it.

[00:30:50] Speaker 02:
Well, that's just the point.

[00:30:51] Speaker 02:
Wyndham-Pasida have to, at that point, look at the structure of the two compounds in order to determine whether there's similarity.

[00:30:59] Speaker 04:
Yeah, and their structure is playing a role in this because they do have a similar relevant structure.

[00:31:06] Speaker 04:
And for an unknown common, we just pull it.

[00:31:08] Speaker 02:
But under your argument, structure plays no role.

[00:31:10] Speaker 04:
No, I think it does.

[00:31:11] Speaker 02:
I mean, you can't say that these are structurally similar.

[00:31:14] Speaker 04:
They're structurally similar in the relevant part.

[00:31:17] Speaker 04:
As the art tells, Briehove talks about, and there's references that talk, one of the references that Petitioner has in the record, it's at 8PPX 1546.

[00:31:29] Speaker 04:
And it's thought of boron therapeutics on the horizon.

[00:31:32] Speaker 04:
People are interested in boron in general.

[00:31:35] Speaker 04:
And it says that agents including boronic acids, which are in Freeman, and boron heterocyclics are potential proteome inhibitors and other things.

[00:31:44] Speaker 04:
So the references in the art are saying, this is the relevant structural similarity that you need to look for if you're looking for a fungicide or a therapeutic activity.

[00:31:56] Speaker 04:
And I'd just like to point out, so Anacor did not

[00:32:00] Speaker 04:
Anacor's argument for Freeman does not encompass the lack of notice, the APA challenge.

[00:32:07] Speaker 04:
The board found that Anacor did not argue claim six separately.

[00:32:12] Speaker 04:
And claim six then, the determination from claim six was based on the board's findings for the independent claims, claim one, 11, and 12 alone.

[00:32:21] Speaker 04:
So every time Anacor says that the board made a similar decision, they're not pointing to a decision in the board's decision based on claim six.

[00:32:29] Speaker 04:
but a similar decision based on the independent claims.

[00:32:32] Speaker 04:
And so they did not preserve that argument, the APA argument for claim six.

[00:32:37] Speaker 04:
And their argument.

[00:32:38] Speaker 02:
So I understand your argument well.

[00:32:40] Speaker 02:
I'll get to the point what concerns me here with the argument.

[00:32:46] Speaker 02:
In cases involving pharmaceutical compounds, I mean, we would repeatedly have held and we recognize that a prior compound and a claim compound

[00:32:57] Speaker 02:
have a sufficiently close relationship turns on their structural similarities or differences.

[00:33:03] Speaker 02:
And we said that in Diachi, in Ray Dillon.

[00:33:09] Speaker 02:
And basically, that's almost a rule of thumb.

[00:33:12] Speaker 04:
And I point out to Your Honor, those cases.

[00:33:14] Speaker 02:
Or a rule of law.

[00:33:16] Speaker 04:
Yes, Your Honor.

[00:33:17] Speaker 04:
I would point out those cases are claims to new compounds.

[00:33:20] Speaker 04:
So when you know nothing about a compound and you're claiming a new compound and the activity a new compound,

[00:33:27] Speaker 04:
then you're absolutely right.

[00:33:28] Speaker 04:
Once you have a new compound, you don't know what that function is going to be.

[00:33:33] Speaker 02:
What authority can you cite to me to support that position that you have, that when we're dealing with new compounds, structural similarities doesn't matter?

[00:33:41] Speaker 04:
Well, it's not that it doesn't.

[00:33:42] Speaker 04:
It's not that it doesn't matter.

[00:33:43] Speaker 02:
You don't have a legal authority to back that up, right?

[00:33:46] Speaker 04:
Well, Merck is the closest, and it's not necessarily a great case because it is about compounds that are structurally similar, though they did look at function.

[00:33:56] Speaker 04:
I mean, I think the, there's not, the NineQuest case, it's not Prac, it's sort of the closest, but it's not chemical compounds, it's two different cell lines, and basing, I mean, the cell lines, the arguments were that they have different receptors, they have different functions and all this, but they both had a relevant similar function, the lysis in vitro of cancer cells.

[00:34:18] Speaker 04:
The unclaimed cell line also worked in vivo, and the court found, it's again, unprecedented,

[00:34:25] Speaker 04:
you would have had a reasonable expectation that that now claimed cell line would also have in-vital activity.

[00:34:32] Speaker 04:
So with that, unless there's any other questions, we'd ask for support to affirm.

[00:34:36] Speaker 02:
Thank you.

[00:34:36] Speaker 02:
Thank you very much.

[00:34:46] Speaker 01:
I'd like to first very briefly address the waiver point that the intervener made.

[00:34:51] Speaker 01:
We did argue claim six separately for Freeman,

[00:34:55] Speaker 01:
We had an argument, I believe, is at appendix 424 to 426, where we said there was no evidence in Freeman that Taviboral would have been effective against dermatophytes.

[00:35:09] Speaker 01:
The only claim in the patent to which that argument is relevant is claim 6.

[00:35:13] Speaker 01:
So when the board said that we didn't separately argue claim 6 for Freeman, they were simply mistaken.

[00:35:21] Speaker 01:
And similarly, our opening.

[00:35:22] Speaker 03:
So just to make clear, in this part that you're relying on, there's no reference to claim six.

[00:35:29] Speaker 03:
But you're saying that because this limitation is only found in claim six, the board should have inferred or understood that you are arguing claim six separately.

[00:35:40] Speaker 01:
Correct.

[00:35:41] Speaker 01:
This is from our patent owner response.

[00:35:43] Speaker 01:
And Your Honor doesn't have the entire patent owner response, but I think in context of what we were arguing, it should have been clear that

[00:35:50] Speaker 01:
Dermatophyte discussions are relevant to claim six.

[00:35:55] Speaker 01:
And in our opening brief, we did argue there was an APA violation with respect to both grounds.

[00:36:01] Speaker 03:
And the board addressed that in a footnote.

[00:36:04] Speaker 03:
Is that right?

[00:36:07] Speaker 01:
Yeah, in footnote one of the opinion, the board disagreed with our contention that the petitioner had raised a bunch of new arguments.

[00:36:14] Speaker 01:
We made a motion to strike.

[00:36:16] Speaker 01:
And the board allowed us to identify the new arguments, but then, as part of the final written decision, decided that they weren't new arguments.

[00:36:25] Speaker 00:
But this board decided they were legitimate reply, if I recall the footnote.

[00:36:30] Speaker 01:
That's correct.

[00:36:32] Speaker 01:
Yeah.

[00:36:33] Speaker 01:
So let me just, in the context of the discussion, you just had an intervener's counsel.

[00:36:38] Speaker 01:
These claims aren't drawn to fungicides.

[00:36:40] Speaker 01:
They're drawn to methods of treating human beings.

[00:36:43] Speaker 01:
And so comments to the effect that a given compound has broad spectrum activity, or it has good in vitro activity, we would submit doesn't really show reasonable expectation of success.

[00:36:54] Speaker 00:
But Briehove shows an in vivo test whether it's successful with human beings directed to onychomycosis.

[00:37:05] Speaker 01:
It does.

[00:37:06] Speaker 01:
It has a few patient examples.

[00:37:08] Speaker 00:
It doesn't say what- Doesn't that kind of trump the problem of toxicity, for example?

[00:37:14] Speaker 01:
No, for a few reasons.

[00:37:15] Speaker 00:
You haven't argued toxicity as I understand it.

[00:37:17] Speaker 01:
Yeah, not on appeal.

[00:37:19] Speaker 01:
Just to have a narrow appeal, we focused on claim six.

[00:37:23] Speaker 01:
But let me make a couple points about Brayhove.

[00:37:25] Speaker 01:
First of all, the patient examples in Brayhove don't identify what caused their onychomycosis.

[00:37:31] Speaker 01:
So I think Your Honor alluded to, well, playing the percentages.

[00:37:35] Speaker 01:
Maybe some of them had dermatophytes.

[00:37:38] Speaker 00:
It's a pretty good assumption, statistically, isn't it?

[00:37:41] Speaker 01:
Not exactly because Brayhove also says that C. albicans is the primary cause of onychomycosis, which is incorrect, but it seems to be what the Brayhove inventors thought.

[00:37:50] Speaker 01:
And their only in vitro data was for C. albicans.

[00:37:54] Speaker 01:
So I do think it's a little ambitious to simply assume that Brayhove shows a reasonable expectation of success.

[00:38:01] Speaker 01:
In any event,

[00:38:03] Speaker 00:
Those were very- But there's no indication that the patients in Briehove were selected as the albicans sufferers as opposed to dermatophytes.

[00:38:11] Speaker 00:
Well, we don't know- They were just- Yeah, there's not a lot of detail.

[00:38:15] Speaker 00:
Onycholankrosis patients.

[00:38:16] Speaker 01:
Yeah, they don't say, they don't affirmatively say what they had either way.

[00:38:20] Speaker 01:
But in any event, Briehove has very different boron-containing compounds than Austin, and you need Austin because that's the only disclosure of Taviboral, and that takes us back to the point of

[00:38:32] Speaker 01:
How do you link Austin and either of the other two references?

[00:38:36] Speaker 01:
So the petition tried to do that with structural similarity and overlapping functional activity.

[00:38:45] Speaker 01:
We still don't know what the structural similarity is.

[00:38:47] Speaker 01:
And boron can't be enough to establish structural similarity.

[00:38:53] Speaker 01:
And we know that from Austin and Freeman themselves.

[00:38:57] Speaker 01:
The Austin reference, for example,

[00:39:07] Speaker 01:
at 1067.

[00:39:12] Speaker 01:
So this is the in vitro data at issue.

[00:39:17] Speaker 01:
Compound 64 is tabiboral.

[00:39:21] Speaker 01:
And just to navigate around a little bit, the column that says CA, that's C. albicans.

[00:39:27] Speaker 01:
And the five indicates that compound 64 had activity against C. albicans.

[00:39:34] Speaker 00:
against an extremely good activity against all five of the fungi, right?

[00:39:39] Speaker 01:
Well, that's fine.

[00:39:39] Speaker 01:
But then look at compound 72, which is the same as tavaborol, except it adds, I believe, a methyl group.

[00:39:46] Speaker 01:
That compound didn't do anything.

[00:39:48] Speaker 01:
So you change one substituent on this class of boron-based compounds from which tavaborol comes from, and you have no activity.

[00:39:57] Speaker 01:
I think that really goes by itself.

[00:39:59] Speaker 01:
That goes a long way to defeating any notion

[00:40:02] Speaker 01:
that structural similarity here can give rise to any sort of reasonable expectation of arriving at claim six.

[00:40:09] Speaker 01:
I would also note Freeman at 1099, the in vitro data.

[00:40:15] Speaker 02:
I'm going to ask you to wind up.

[00:40:17] Speaker 02:
You're out of time, but you can make a conclusion.

[00:40:20] Speaker 01:
Freeman is to the same effect, a very different activity depending on which compound you're talking about.

[00:40:29] Speaker 01:
So for these reasons,

[00:40:31] Speaker 01:
And this is just to wrap up very briefly.

[00:40:34] Speaker 01:
Because of these problems in the structural similarity case, petitioner abandoned structural similarity and instead just said, forget about Brayhove, forget about Freeman, just look at Austin's data against the yeast, and then based on all this other evidence that was in our petition, just assume that a compound that works against the yeast will work even better against the dermatophyte.

[00:40:55] Speaker 01:
That's a new argument that should not have been permitted.

[00:40:57] Speaker 01:
Thank you, Your Honor.