[00:00:00] Speaker 03:
This morning is number 17, 1265, fire delivery sciences against Monosol Rx.

[00:00:10] Speaker 03:
Mr. Bromberg.

[00:00:12] Speaker 05:
Good morning, your honor.

[00:00:13] Speaker 05:
Thank you.

[00:00:13] Speaker 05:
May it please the court?

[00:00:15] Speaker 05:
This case poses the question, can you get more than one bite at the apple?

[00:00:20] Speaker 05:
Monosol, now called Equestive, says you get at least four.

[00:00:23] Speaker 05:
The patent office intervener says there's no limit.

[00:00:27] Speaker 05:
But to the contrary, the law provides that collateral estoppel issue of preclusion applies to proceedings in the patent office, including the board proceedings below.

[00:00:38] Speaker 05:
So I'd like to address two points.

[00:00:40] Speaker 05:
The first is the law showing collateral estoppel applies on the circumstances of this case.

[00:00:46] Speaker 05:
And secondly, that in any event, the board decision was wrong on the facts, that BDSI bio-delivery actually proved its case.

[00:00:55] Speaker 05:
to some extent through Monosol's own witness.

[00:01:00] Speaker 05:
So first, a brief factual background.

[00:01:03] Speaker 04:
Well, the earlier proceedings didn't provide for cross-examination.

[00:01:09] Speaker 04:
And wouldn't we especially recognize that the Patent Office ought to have a good feeling for how much of a difference that makes in their proceedings?

[00:01:21] Speaker 05:
Your Honor, you are correct that the

[00:01:24] Speaker 05:
The re-exam proceedings did not provide for cross-examination, but they did provide several rounds of back and forth between the parties, examiners below aboard on review, and opportunities to contradict the evidence given by any witness, including, for example, by a counter declaration, by citing references, or by putting in a paper that explained why there was something wrong with what the expert put forward.

[00:01:54] Speaker 05:
So while it is a difference, it is not a difference that matters here.

[00:01:59] Speaker 05:
And under the B&B Hargis case that the Supreme Court handed down in 2015, that involved TTAB proceedings where there are no live witnesses and a district court proceeding where there are live witnesses.

[00:02:14] Speaker 05:
And the court said that doesn't matter.

[00:02:20] Speaker 05:
The question is, while there are differences,

[00:02:23] Speaker 05:
The question is whether the procedures used in the first proceeding were fundamentally poor, cursory, or unfair.

[00:02:34] Speaker 05:
And neither the appellee or the intervener argues that that's the case here, because in re-exam proceedings, as the court knows, you have several steps, several back and forths between the parties, involvement of an examiner, in fact, even the right to

[00:02:51] Speaker 05:
to amend your claims, which is frequently exercised and less exercised here.

[00:02:56] Speaker 05:
So there's plenty of procedural safeguards involved in the re-exam proceeding.

[00:03:03] Speaker 05:
And it definitely meets the standard in the B&B Hargis case for a proceeding that ought to have collateral.

[00:03:10] Speaker 04:
And two of the earlier cases were not final at the time of the decision.

[00:03:13] Speaker 04:
Isn't that correct?

[00:03:14] Speaker 05:
That is correct, Your Honor.

[00:03:17] Speaker 05:
And so we think that on the one hand, you have

[00:03:22] Speaker 05:
the 588 case, which was final before these proceedings below started.

[00:03:27] Speaker 05:
And on the other hand, you had two that were in process, the 337 and the 080.

[00:03:33] Speaker 05:
All three are actually final now.

[00:03:36] Speaker 02:
But before we get to that, I mean, the overall question is whether collateral will stop what even applies to IPRs or re-examinations and IPRs, correct?

[00:03:47] Speaker 02:
Yes, Your Honor.

[00:03:48] Speaker 02:
And this is a question of first instance.

[00:03:50] Speaker 05:
Well, it's a question that this court addressed a couple of weeks ago in the Max Linear case in finding that in an IPR proceeding, collateral estoppel does apply.

[00:04:02] Speaker 05:
So we believe that that was the correct ruling.

[00:04:06] Speaker 02:
IPR to IPR or reexam to IPR?

[00:04:09] Speaker 05:
That was IPR to IPR, Your Honor.

[00:04:13] Speaker 02:
What do we have by way of congressional intent?

[00:04:16] Speaker 02:
What has Congress said as to whether collateral estoppel should apply in this instance or not?

[00:04:21] Speaker 05:
Your honor, I believe that it's really a blank slate as far as Congress is concerned.

[00:04:27] Speaker 05:
There are provisions in the America Invents Act that talk about estoppeling court proceedings after you've had an IPR, but there's nothing else that would address the question of whether an old style re-examination proceeding would have collateral estoppel impact on an IPR proceeding.

[00:04:47] Speaker 02:
So that is a question of first impression.

[00:04:49] Speaker 02:
OK, and if that's true, then is there a presumption that collateral estoppel would apply?

[00:04:55] Speaker 05:
I think there is a presumption that collateral estoppel would apply, Your Honor, based upon the case law and the congressional record.

[00:05:05] Speaker 05:
So we think that that should be applicable here.

[00:05:10] Speaker 05:
And we think that the B&B case is very informative because

[00:05:17] Speaker 05:
It involved the TTAB, which has procedures quite analogous to what we have in an IPR, or even in a re-exam, versus a district court proceeding.

[00:05:32] Speaker 05:
So those procedures are different, but they're close enough to permit collateral estoppel to apply.

[00:05:39] Speaker 04:
Why don't you lose on the merits?

[00:05:43] Speaker 04:
Because Chen

[00:05:45] Speaker 04:
doesn't disclose the 10% uniformity aspect of the claims.

[00:05:51] Speaker 05:
OK.

[00:05:51] Speaker 05:
That's an excellent question, Your Honor.

[00:05:53] Speaker 05:
And we believe that- Most questions from the bench are excellent questions.

[00:06:00] Speaker 05:
I would agree, Your Honor.

[00:06:02] Speaker 05:
The Goldberg Declaration, which is sort of like the linchpin for the proposition that Chen does not disclose uniformity,

[00:06:12] Speaker 05:
is flawed in many ways as we discuss in our brief.

[00:06:14] Speaker 05:
But let me just point out two ways in which it actually demonstrates that the less than 10% variation standard is met.

[00:06:23] Speaker 05:
The first way is that, and this is all, you can see this all in the record on page A1356.

[00:06:35] Speaker 05:
That's where she has her chart.

[00:06:39] Speaker 05:
She chose the hypothetical values that she plugged in for her statistical analysis.

[00:06:46] Speaker 05:
So they're not actually out of Chen.

[00:06:49] Speaker 05:
And what she did was she chose values that ended up producing a standard deviation of 35% to 44% greater than Chen required.

[00:07:01] Speaker 05:
Chen says 1 milligram, plus or minus.

[00:07:04] Speaker 05:
She chose values that gave her 1.

[00:07:07] Speaker 05:
379 milligram, 1.439 milligram, or 1.350 milligram as a standard deviation.

[00:07:15] Speaker 05:
If you actually met the Chen requirement that it's a 1 milligram standard deviation, then you would choose lower values than the ones that she put in.

[00:07:30] Speaker 05:
And if you did, you'd get below 10%.

[00:07:33] Speaker 05:
Because even though she chose

[00:07:35] Speaker 05:
these higher values that gave her a higher standard deviation than Chen specifies, she also rounded down.

[00:07:43] Speaker 05:
She said, OK, 1.439 is rounded down to 1, a standard deviation of 1.

[00:07:51] Speaker 05:
So just as a statistical analysis, this declaration is not only wrong, but it also proves that Chen discloses less than a 10% variation.

[00:08:03] Speaker 05:
Here's the second way.

[00:08:05] Speaker 05:
that it does that.

[00:08:07] Speaker 05:
The board in its decision, and this is at appendix 22, 23, says, values that differ by more than 10% from the mean lie outside the variance allowed by claim one of the 167 patent.

[00:08:23] Speaker 05:
That's a direct quote.

[00:08:24] Speaker 05:
That's what they determined.

[00:08:26] Speaker 05:
That would mean a range from 90% to 110%.

[00:08:31] Speaker 05:
But what Goldberg calculates is not that.

[00:08:34] Speaker 05:
And she says in her declaration, here's how I did it, and I was told to do this by the lawyers, basically is what she says.

[00:08:42] Speaker 05:
What she did is she determined the difference from the highest value sample to the lowest value sample.

[00:08:51] Speaker 05:
In other words, not measuring from the mean, but measuring from the biggest sample to the littlest sample, again with values that she herself chose and put in the table.

[00:09:02] Speaker 05:
What she came up with at the highest was a range of 12%.

[00:09:07] Speaker 05:
But that's from one value to the other.

[00:09:09] Speaker 05:
If you think of that as a 6% collar around the mean, you've now got a range from 94% up to 106%.

[00:09:19] Speaker 05:
This proves that Chen discloses values that differ by less than 10% from the mean, well within the variance allowed by the claim.

[00:09:32] Speaker 05:
So we think that the Goldberg Declaration actually proves BDSI's point.

[00:09:37] Speaker 05:
In addition, your honor, of course, BDSI put in evidence from its own experts showing that by a visual test, a weight test, and a dissolution test, the values come out within that 10% range.

[00:09:51] Speaker 05:
So we believe that on the merits, those matters were demonstrated.

[00:09:58] Speaker 05:
So that's what I would say on that.

[00:10:02] Speaker 05:
And we think that the jurisprudence of the Supreme Court and of this court is clear that collateral estoppel should apply.

[00:10:13] Speaker 05:
We believe that given the relatively robust nature of the re-examination proceedings below, which took place over a period of five or six years for all three of these,

[00:10:26] Speaker 05:
that you have a very solid reason, policy reasons, with a congressional presumption that collateral estoppel should apply unless there's some specific reason why it shouldn't.

[00:10:40] Speaker 05:
We think you have a very solid basis for applying collateral estoppel to these re-examination results that involve the same uniformity limitation that was

[00:10:55] Speaker 05:
that was found to be disclosed three times before in three prior re-examination proceedings in which a total of 520 claims were invalidated because Chen discloses that very uniformity limitation that was at issue.

[00:11:15] Speaker 05:
And so that's what we would ask the court to reverse the outcome here.

[00:11:20] Speaker 05:
and that the claims at issue we found to be invalid over the Chen reference because of its disclosure of the uniformity limitation that appears in these 167 claims, just as it appeared in the claims of the three previous patents that were invalidated.

[00:11:46] Speaker 05:
So if there are not further questions, Your Honors, I will reserve the remainder of my time.

[00:11:50] Speaker 03:
Thank you.

[00:11:50] Speaker 03:
You have rebuttal time.

[00:11:51] Speaker 03:
And thank you, Mr. Brombert.

[00:11:53] Speaker 05:
Thank you, Your Honor.

[00:11:58] Speaker 03:
Mr. Brombert.

[00:12:00] Speaker 00:
May it please the Court, and good morning.

[00:12:02] Speaker 00:
The first issue I'd like to address, Your Honors, is the weight test.

[00:12:06] Speaker 03:
And what my... Can we divert your attention to collateral estoppel?

[00:12:11] Speaker 00:
Sure.

[00:12:12] Speaker 03:
On the theory that if collateral estoppel

[00:12:15] Speaker 03:
applies, we do have a somewhat different platform to work from.

[00:12:20] Speaker 00:
Absolutely, absolutely.

[00:12:21] Speaker 00:
I will address collateral estoppel, and the weight test is important for that, and that's what I will get to right now.

[00:12:27] Speaker 00:
We believe there are several reasons why collateral estoppel should not apply, but what I would like to address is the lack of identity, because we believe there was a lack of identity versus the re-exams and the IPR proceedings.

[00:12:41] Speaker 03:
Is your theory that

[00:12:42] Speaker 03:
It doesn't apply at all, just as a matter of the overall construction of these relationships and actions, or that there are a whole bunch of exceptions to collateral estoppel, and that the exceptions might apply in your case.

[00:12:59] Speaker 00:
Our argument is that collateral estoppel does not apply at all because collateral estoppel could not be proved because there was a lack of identity.

[00:13:10] Speaker 00:
We have several other arguments, but that is what I would like to focus on.

[00:13:13] Speaker 02:
That goes to the argument whether it applies in this case.

[00:13:17] Speaker 02:
That's assuming that collateral estoppel applies at all.

[00:13:20] Speaker 00:
That's correct.

[00:13:20] Speaker 02:
Assuming... Does it apply at all?

[00:13:25] Speaker 00:
We haven't made that argument.

[00:13:26] Speaker 00:
That is the government's argument.

[00:13:27] Speaker 00:
We support that argument.

[00:13:29] Speaker 00:
But our argument is that if it does apply, it doesn't apply, if it does apply at all to the board,

[00:13:34] Speaker 00:
It doesn't apply in this case because there was a lack of identity.

[00:13:37] Speaker 02:
Well, in the board decision, they did consider arguments on collateral estoppel, correct?

[00:13:43] Speaker 00:
The board did consider arguments on collateral estoppel.

[00:13:45] Speaker 02:
Right.

[00:13:45] Speaker 02:
So why do you say that you haven't addressed that issue?

[00:13:48] Speaker 02:
It's been addressed.

[00:13:49] Speaker 02:
It's already been addressed.

[00:13:51] Speaker 00:
Yes, the issue has been addressed and we are saying that the board got it correct in saying that collateral estoppel does not apply.

[00:13:57] Speaker 00:
But they say they didn't apply in that instance.

[00:13:59] Speaker 00:
Yes, in that instance.

[00:14:01] Speaker 00:
That's what our argument is.

[00:14:02] Speaker 02:
OK.

[00:14:02] Speaker 02:
Well, if the board addresses collateral estoppel in that instance, then isn't it the case that collateral estoppel, but the board is saying collateral estoppel does apply in a general sense in these proceedings.

[00:14:15] Speaker 02:
But in this particular case, we find that it doesn't.

[00:14:17] Speaker 00:
Right.

[00:14:18] Speaker 00:
I agree with your assessment, and we agree with the board's reasoning.

[00:14:22] Speaker 00:
And the reason why.

[00:14:23] Speaker 02:
Just to make sure you do agree that collateral estoppel applies

[00:14:27] Speaker 02:
and re-examine IPR hearings, cases.

[00:14:32] Speaker 00:
We don't agree with that, Your Honor, but we don't have to agree with that because in this instance... Sounds like you just did.

[00:14:38] Speaker 04:
You just did agree with that.

[00:14:41] Speaker 04:
Let's rephrase the question.

[00:14:42] Speaker 04:
Can it apply in such a proceeding?

[00:14:47] Speaker 00:
Yes, but it can't apply in this instance because there was a lack of identity.

[00:14:51] Speaker 02:
So collateral staple applies in IPR proceedings and in proceedings where you're looking at a result from a re-exam and you're looking at it from the viewpoint of an IPR.

[00:15:05] Speaker 02:
Your position and what you're telling us, in a general sense, collateral staple applies.

[00:15:12] Speaker 02:
The doctrine of collateral staple applies in that situation.

[00:15:16] Speaker 00:
We believe that if the doctrine of collateral staple can apply,

[00:15:20] Speaker 00:
It can't be applied in this instance.

[00:15:23] Speaker 03:
We're not trying to tie you down to some sort of admission, but to be clear, because we know that there are a whole bunch of exceptions to collateral estoppel.

[00:15:35] Speaker 00:
Sure.

[00:15:35] Speaker 03:
They're in the restatement.

[00:15:36] Speaker 03:
It's an equitable doctrine.

[00:15:38] Speaker 03:
And if your argument, your primary argument, is that in any case, assuming that it applies in principle, as in

[00:15:49] Speaker 03:
any other litigation, if it's already decided it's over, that you're subject to the exceptions, whether there's a change of law or a change of fact or new authority.

[00:16:01] Speaker 03:
I don't remember what they all are.

[00:16:03] Speaker 00:
That is correct.

[00:16:04] Speaker 03:
Is that where we are?

[00:16:05] Speaker 02:
Yes, Your Honor.

[00:16:06] Speaker 03:
Okay.

[00:16:07] Speaker 02:
So collateral estoppel applies and it's

[00:16:10] Speaker 02:
It applies on a case-by-case basis, depending on if the issue's been litigated before, if the result depends on that issue.

[00:16:22] Speaker 00:
Is that correct?

[00:16:23] Speaker 00:
Yes, Your Honor.

[00:16:24] Speaker 00:
And in this case, the claims require a measurement of an actual amount of active and comparing it against a desired amount.

[00:16:34] Speaker 00:
And the point about the weight test is you can't get a measurement

[00:16:38] Speaker 00:
of an actual amount of active from a weight test.

[00:16:42] Speaker 00:
The weight test isn't good enough.

[00:16:44] Speaker 00:
Now going to the issue of identity, in all three re-examinations, what the board found was, one, we are not going to construe these claims to require an actual amount of active as compared to a dosage amount or a desired amount, a reference amount, and two,

[00:17:07] Speaker 00:
that it was the weight test that was the reason why they were rejecting the claims.

[00:17:13] Speaker 00:
And this is very succinctly pointed out in a paragraph in the 337 re-exam on appendix page 284 and that is quoted in our brief and I'll point out in the other re-exams where you can find it.

[00:17:27] Speaker 00:
That exact same paragraph is found at appendix page 329 and that's in the 080 re-exam.

[00:17:34] Speaker 00:
I point out 329 because that one's not cited in our brief.

[00:17:37] Speaker 02:
What exactly are you arguing that the, whether the issue, the weight issue was actually litigated or not in the cases?

[00:17:45] Speaker 00:
What we're arguing is that there was a separate issue of patentability at issue in the re-exams than there was in the IPR.

[00:17:52] Speaker 02:
In the re-exams... So you're arguing that's why collateral sample does not apply?

[00:17:57] Speaker 00:
That is one of the reasons why we are arguing.

[00:17:59] Speaker 00:
arguing why collateral estoppel doesn't apply.

[00:18:01] Speaker 00:
We also believe it should not apply because of the difference in the natures of the proceedings, lack of cross-examination, the examinational nature of inter-parties re-exams.

[00:18:13] Speaker 00:
But at its core, the collateral estoppel issue can be decided on identity alone.

[00:18:19] Speaker 00:
In order to apply collateral estoppel, the issues have to have been identical.

[00:18:24] Speaker 00:
If there is a difference in patentability, even if you have the same claim language, and we cited cases on this, and Ray Herr is one of them in our brief, even if you have the same claim language, if there's a different issue of patentability, collateral estoppel cannot apply.

[00:18:40] Speaker 00:
And the board construed the claims in the re-exam differently and relied on evidence in the re-exams that cannot establish unpatentability in the 167 case.

[00:18:52] Speaker 04:
Yeah.

[00:18:54] Speaker 04:
Well, the lack of cross-examination in the prior proceeding, you think that's not significant?

[00:18:59] Speaker 00:
No, we do think it is significant, Your Honor.

[00:19:02] Speaker 00:
Cross-examination is a fundamental tool in the kit of litigants.

[00:19:06] Speaker 00:
And cross-examination was a significant reason why the board below found that appellants had failed to establish unpatentability on the merits.

[00:19:17] Speaker 02:
I'm not sure that that's an element of collateral stoppage.

[00:19:22] Speaker 00:
Cross-examination is not an element of collateral estoppel, but whether or not the parties had a full and fair opportunity to litigate is an element of collateral estoppel.

[00:19:29] Speaker 02:
No, it's whether the issue was actually litigated at all.

[00:19:33] Speaker 00:
Different courts will kind of use this analysis of cross-examination for different factors, but certainly the lack of cross-examination is front and center in many decisions on whether or not the prior decision should be carried forward into future actions.

[00:19:49] Speaker 04:
What about the merits?

[00:19:51] Speaker 04:
The Chen reference.

[00:19:53] Speaker 00:
Sure.

[00:19:53] Speaker 00:
On the merits and your honor stated correctly that Chen, there is no disclosure in Chen of an actual amount of active in the individual dosage units.

[00:20:05] Speaker 00:
And that's what's needed to do this comparison in order to invalidate the claim.

[00:20:09] Speaker 00:
You need an actual amount of active as compared against a desired amount.

[00:20:14] Speaker 00:
I've already explained that the weight test isn't good enough to establish

[00:20:18] Speaker 00:
All of the arguments that were made were about the weight test.

[00:20:21] Speaker 00:
We dispute that Chen even passed the weight test, but it doesn't matter because the weight test doesn't give you that actual amount of active.

[00:20:28] Speaker 00:
Now, the only other issue on the merits was that knowing that the weight test wasn't good enough, appellants actually tried to do the only test that will give you that actual amount of active, and that's a chemical assay.

[00:20:42] Speaker 00:
And what they tried to do is recreate the films from Chen, in example seven,

[00:20:47] Speaker 00:
But they failed to recreate those films.

[00:20:49] Speaker 00:
They weren't reproducible.

[00:20:51] Speaker 00:
And when they measured the films that they tried to recreate, they did not measure the thickness.

[00:21:00] Speaker 00:
And so they were not able to prove that they measured films that were substantially equally the same size.

[00:21:07] Speaker 00:
And that is required explicitly by the claims.

[00:21:11] Speaker 00:
And so there was a failure on the merits.

[00:21:13] Speaker 00:
And we would ask for the board to affirm on the merits for those reasons.

[00:21:17] Speaker 02:
Just one quick question on the cross-examination issue.

[00:21:20] Speaker 02:
Sure.

[00:21:20] Speaker 02:
How did the lack of cross-examination affect the outcome of the 588 patent re-exam?

[00:21:27] Speaker 00:
Well, there were certainly declarations that were submitted in the prior re-exams.

[00:21:34] Speaker 00:
And the testimony in this IPR highlighted the fact that the thickness was an issue and that you had to get an actual amount of active for those claims.

[00:21:45] Speaker 00:
And if the board had actually construed the claims in the re-exam to be similar to the claims in the 167 patent, that cross-examination would have been significant in determining patentability, or at the very least it would have highlighted to the board below what the real and true issue was in the 167 IPR.

[00:22:07] Speaker 00:
But as I mentioned, the issues in the re-exams were completely different because the claims were construed differently.

[00:22:14] Speaker 00:
And I see my time is running out.

[00:22:16] Speaker 03:
Well, you're sharing your time with Ms.

[00:22:18] Speaker 03:
Silver.

[00:22:20] Speaker 03:
Is that right?

[00:22:21] Speaker 00:
Yes.

[00:22:21] Speaker 03:
OK.

[00:22:22] Speaker 00:
Thank you.

[00:22:31] Speaker 01:
Thank you.

[00:22:32] Speaker 01:
May I please the court?

[00:22:35] Speaker 01:
Congress's intent controls in deciding whether common law issue preclusion applies.

[00:22:40] Speaker 01:
And the way the America Invents Act statutory provisions work together

[00:22:44] Speaker 01:
envisions a non-common law scheme.

[00:22:48] Speaker 01:
In particular, the statute provides for some mandatory estoppels, and it also explicitly gives the agency a lot of discretion to decide how different proceedings relate to each other.

[00:22:58] Speaker 04:
It is a trial and appeal for it, purporting to have some aspects of litigation.

[00:23:07] Speaker 01:
That's true.

[00:23:08] Speaker 01:
And Your Honor, just so I understand, are you talking about inter-parties re-examination or

[00:23:14] Speaker 01:
IPRs.

[00:23:15] Speaker 04:
IPR.

[00:23:16] Speaker 01:
IPR is certainly a trial and has a lot of aspects of litigation.

[00:23:21] Speaker 01:
And there are more stopples baked into the statute under IPR than there are under the former re-examination statutes.

[00:23:31] Speaker 01:
So that is to give both parties, the agency is bound to apply the statute.

[00:23:39] Speaker 01:
And there's sort of an asymmetry that

[00:23:44] Speaker 01:
at the agency, because one party stands to lose a property right, the other does not.

[00:23:50] Speaker 01:
And so the estoppels built into the statute are designed to account for that asymmetry more than the common law.

[00:23:59] Speaker 03:
But where is the estoppel in the statute?

[00:24:01] Speaker 03:
I'm sorry, what was that?

[00:24:02] Speaker 03:
You say the estoppel is built into the statute?

[00:24:04] Speaker 03:
Yes.

[00:24:05] Speaker 03:
Where?

[00:24:06] Speaker 03:
There are several provisions.

[00:24:08] Speaker 03:
There's an estoppel that takes effect in the district court.

[00:24:11] Speaker 03:
Is that what you're talking about?

[00:24:13] Speaker 01:
No, Your Honor.

[00:24:14] Speaker 01:
I'm talking about under Section 315E, there's an estoppel that says that the petitioner may not request or maintain a proceeding before the office with respect to that claim, the claim that was already at issue, on any ground that the petitioner raised or reasonably could have raised in the earlier IPR proceedings.

[00:24:34] Speaker 01:
So that's one of the statutory estoppels that addresses other

[00:24:40] Speaker 01:
proceedings at the agency.

[00:24:42] Speaker 02:
Well, what's your argument?

[00:24:45] Speaker 02:
I don't quite understand where you're headed.

[00:24:47] Speaker 02:
Are you arguing that just as a general proposition that the doctrine of collateral estoppel does not apply with respect to re-exams?

[00:24:57] Speaker 01:
Yes.

[00:24:57] Speaker 02:
As a general proposition... So you're taking a position different from what we heard just now.

[00:25:03] Speaker 01:
That's correct.

[00:25:04] Speaker 01:
As a general proposition, the common law doctrine of collateral estoppel is

[00:25:09] Speaker 02:
What does Congress say?

[00:25:11] Speaker 02:
Show me where Congress supports your position.

[00:25:15] Speaker 01:
Sure.

[00:25:16] Speaker 01:
So there's section 315E that I was just talking about that bakes in one particular estoppel, which would be superfluous if the common law doctrine necessarily applied.

[00:25:29] Speaker 01:
Also, there is the provision under section 315D that talks about multiple proceedings and it gives

[00:25:38] Speaker 01:
the agency the discretion to, for example, consolidate or stay multiple proceedings on related issues or not.

[00:25:47] Speaker 01:
And implicit in that is the assumption that if these proceedings are not consolidated, they could have different outcomes and the agency is going to have to deal with the different outcomes.

[00:25:59] Speaker 03:
So you say by silence we should infer that not only the statement where Estable has mentioned applies,

[00:26:06] Speaker 03:
but in other provisions where it is not stated?

[00:26:10] Speaker 01:
It's not by silence, Your Honor.

[00:26:12] Speaker 01:
It is explicitly talking about the ways these different proceedings interact with each other.

[00:26:18] Speaker 03:
It doesn't use the word estoppel.

[00:26:19] Speaker 03:
The estoppel appears just once in the statute, and it's explicit, and it is not the common law doctrine.

[00:26:26] Speaker 03:
It is a much more rigorous doctrine than the common law.

[00:26:32] Speaker 03:
The common law would not, I think, cannot be assumed to say

[00:26:37] Speaker 03:
that an agency decision can dominate and overrule and prevent a federal court from reviewing the merits of an issue.

[00:26:47] Speaker 03:
So it overturns the common law doctrine.

[00:26:49] Speaker 03:
Now, you're asking us to assume that something that drastic is inferred by silence as to other statutory provisions?

[00:27:00] Speaker 01:
Your Honor, I don't think there's a silence.

[00:27:02] Speaker 01:
There is that provision that talks about estoppel.

[00:27:06] Speaker 01:
There's also other provisions that another example is section 316A4, which allows the agency to establish regulations governing the relationship of a given review to other proceedings in the office.

[00:27:26] Speaker 01:
So it's another example of the agency sort of being entitled to decide how

[00:27:33] Speaker 01:
estoppel will or will not apply by prescribing regulations.

[00:27:39] Speaker 01:
There is also the section 325D, the second sentence of that section, has another element of estoppel where it says the agency may take into account... Does it say that?

[00:27:53] Speaker 01:
You said they're dealing with estoppel?

[00:27:54] Speaker 01:
It says the agency may take into account whether the same or prior art or arguments previously were presented to the office.

[00:28:02] Speaker 03:
It's taken into account.

[00:28:03] Speaker 03:
Estoppel's inequitable doctrine.

[00:28:05] Speaker 03:
So a lot of things are taken into account.

[00:28:08] Speaker 03:
So this says you should take into account the particular facts.

[00:28:12] Speaker 01:
That's correct.

[00:28:15] Speaker 01:
But the point here is that layering on the common law doctrine on top of the agency's statutory requirements is

[00:28:24] Speaker 01:
could result in anomalous outcomes.

[00:28:27] Speaker 01:
So for example, if the agency has to apply common law estoppel, it may be that in a certain situation, it cannot take into account whether that prior work was previously before the office.

[00:28:43] Speaker 02:
So it's... Well, that doesn't mean that estoppel doesn't apply.

[00:28:48] Speaker 02:
It just means it didn't apply in that instance, if that's the case.

[00:28:52] Speaker 02:
Right, well...

[00:28:53] Speaker 02:
You're arguing it doesn't apply at all.

[00:28:55] Speaker 02:
Four, it seems to me that you're also arguing that it applies only on the discretion of the director.

[00:29:01] Speaker 02:
Whenever the director wants it to apply, it will.

[00:29:04] Speaker 02:
And if it doesn't, it won't.

[00:29:06] Speaker 01:
No, well, that's not true.

[00:29:07] Speaker 01:
The way the statute sets up a scheme includes estoppels within it.

[00:29:13] Speaker 01:
And some of them are mandatory.

[00:29:15] Speaker 01:
And some of them are within the director's discretion.

[00:29:17] Speaker 01:
But when the agency has not adopted any rules

[00:29:23] Speaker 01:
establishing anything beyond what the statute mandates, there isn't anything beyond what the statute mandates.

[00:29:30] Speaker 01:
And so in this case, we think there is not anything.

[00:29:34] Speaker 02:
There's no presumption that estoppel would apply to an IPR proceeding absent the director's discretion?

[00:29:41] Speaker 01:
Well, there's a general presumption under the law that collateral estoppel applies to an agency unless the

[00:29:51] Speaker 01:
unless the statute makes clear either implicitly or explicitly that it does not.

[00:29:56] Speaker 02:
And here the statute is silent, right?

[00:29:58] Speaker 01:
No, I don't think the statute is silent.

[00:29:59] Speaker 01:
I think all of these sections that work together are not silent on how estoppel should be applying in the agency.

[00:30:06] Speaker 01:
So there is the provision that talks about estoppel explicitly.

[00:30:09] Speaker 02:
There's also the... Where in the statute does it say that whether or not estoppel applies is at the discretion of the director.

[00:30:18] Speaker 01:
Oh, there's nothing that says that.

[00:30:19] Speaker 01:
But there are particular points at which there is discretion.

[00:30:24] Speaker 01:
And so for example, the director's discretion whether to institute or not includes under section 325D in the second sentence, which I want to mention applies to IPRs by its reference to chapter 31.

[00:30:40] Speaker 01:
That section is at the institution stage

[00:30:47] Speaker 01:
saying the director can decide to not institute based on the agency having already seen that prior art with those same arguments.

[00:30:58] Speaker 01:
So that's one instance in which the agency has the discretion to make a rule saying, or maybe not even under a rule.

[00:31:08] Speaker 01:
Maybe it just has the discretion inherently under that statute to say, we're not going to institute this case because we've seen this prior art before.

[00:31:17] Speaker 01:
That didn't happen at the institution stage in this particular case.

[00:31:23] Speaker 02:
I think a collection of instances or piecing together arguments, I just don't see that that arises.

[00:31:30] Speaker 02:
And to suggest that there's discretion, I don't see that that rises to any clear expression of congressional intent or how they address it in this point.

[00:31:41] Speaker 02:
I don't have any other questions to do.

[00:31:44] Speaker 01:
Jodrina, I wanted to quickly address something that you raised earlier in the argument about the board having applied estoppel here.

[00:31:54] Speaker 01:
And in this case, what happened was neither party argued to the board to question the premise.

[00:32:03] Speaker 01:
And so the board just started with the premise that both parties started with, that collateral estoppel applies in these proceedings, and then looked at whether or not it applies.

[00:32:13] Speaker 01:
And so, the agency would like the chance to address that premise in the first instance.

[00:32:20] Speaker 03:
Okay, thank you, Ms.

[00:32:21] Speaker 03:
Seifert.

[00:32:29] Speaker 03:
Okay, Mr. Bromberg.

[00:32:31] Speaker 05:
Thank you, Your Honors.

[00:32:33] Speaker 05:
On the patent office intervention, we believe that that's

[00:32:37] Speaker 05:
really fundamentally unfair to seize upon this appeal as a place where they're going to make this policy argument.

[00:32:45] Speaker 05:
We believe, as the Court's questions suggested, there's nothing in the AIA statute that abrogates the rule that collateral estoppel, common law collateral estoppel, applies in an IPR proceeding.

[00:33:04] Speaker 05:
But we think that the Patent Office, which was, after all, the decision-maker below, waived their right to argue that inter-parties re-exam cannot give rise to collateral estoppel because they applied it below.

[00:33:18] Speaker 05:
They said, OK, let's look at collateral estoppel.

[00:33:21] Speaker 05:
It doesn't work on the particular facts of this case.

[00:33:24] Speaker 03:
Let's, for the sake of our argument here, assume that estoppel in principle applies.

[00:33:32] Speaker 03:
There are still problems.

[00:33:34] Speaker 03:
with the merits of the application.

[00:33:37] Speaker 03:
Are there not?

[00:33:38] Speaker 03:
Or is your view that that answers everything?

[00:33:42] Speaker 05:
Well, we think that even if, you mean if collateral estoppel does apply, whether it fits here.

[00:33:50] Speaker 05:
Yes, we think that... Because there are exceptions.

[00:33:54] Speaker 05:
There are exceptions, yes.

[00:33:56] Speaker 05:
And the board below took the Freeman case as a

[00:33:59] Speaker 05:
saying, oh, we have discretion to ignore it even if we think it does apply.

[00:34:03] Speaker 05:
We think they went way far too broad from that case.

[00:34:07] Speaker 05:
And in that case, they actually applied collateral estoppel with respect to a claim construction from a court proceeding into a re-examination review.

[00:34:20] Speaker 05:
So we don't think that case supports that.

[00:34:22] Speaker 05:
But on the facts here, my brother at the bar argued that there was not an identity of issue.

[00:34:29] Speaker 05:
Well, there certainly was.

[00:34:30] Speaker 05:
And in fact, the easiest way to see that is that the board in its decision relied upon Dr. Goldberg for contradicting the very thing that the board had found in the 588 re-exam and then subsequently in the others, that uniformity of... I think you may have a problem in this regard with respect to whether some of the other

[00:34:55] Speaker 02:
re-exams are not final at the time that the board made its decision here, and query whether, in that instance, collateral supple can apply.

[00:35:05] Speaker 05:
OK, well, Your Honor, I think in the max linear case, this court established that it does apply in an IPR, IPR to IPR, as we discussed earlier, and that the application would be dependent upon

[00:35:25] Speaker 05:
meeting the criteria for collateral estoppel.

[00:35:29] Speaker 05:
One of them is the finality of judgment, but where the judgment has gotten to the final stage at the time that the issue is presented, there's an issue.

[00:35:37] Speaker 05:
So in the proceedings below, which went on for several years... Those cases had been fully decided.

[00:35:42] Speaker 05:
That's correct, Your Honor.

[00:35:43] Speaker 05:
And so we rely upon the 588, which was final before these proceedings started.

[00:35:50] Speaker 05:
And then we rely upon the others.

[00:35:52] Speaker 02:
And the 588 pen has, I think, a built-in problem with whether the issue was actually litigated.

[00:36:01] Speaker 05:
I believe the issue was actually litigated, Your Honor, because the question was, does Chen disclose that 10% limitation on active?

[00:36:12] Speaker 05:
And the board in the 588 proceedings held that it was.

[00:36:18] Speaker 05:
And no other claims were raised by a monosol.

[00:36:24] Speaker 05:
No other issues in the claims were raised by monosol other than that uniformity limitation.

[00:36:29] Speaker 05:
So there's at least a waiver, even if they could get traction with respect to other claims, which we don't think they could get.

[00:36:37] Speaker 05:
So we think that issue was actually litigated.

[00:36:40] Speaker 05:
It does Chen disclose the uniformity.

[00:36:43] Speaker 05:
In 588, the board said yes.

[00:36:45] Speaker 05:
In the proceedings below, the board said no, resting on the Goldberg Declaration, which I addressed earlier, which we think actually does show that the uniformity limitation is met, just as it was in the earlier one.

[00:37:01] Speaker 05:
So we think that that establishes that collateral estoppel should have been applied here by the board below.

[00:37:13] Speaker 05:
Thank you, Your Honors.

[00:37:14] Speaker 03:
Okay.

[00:37:15] Speaker 03:
Thank you.

[00:37:15] Speaker 03:
Thank you all.

[00:37:16] Speaker 03:
The case is taken under submission.