[00:00:02] Speaker 05:
Our next case is Estella's Pharma versus Sandoz et al.

[00:00:07] Speaker 05:
2023, 2032, 63, and 89.

[00:00:14] Speaker 05:
Good morning, Mr. Hughes.

[00:00:18] Speaker 00:
Good morning.

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

[00:00:20] Speaker 00:
May it please the court.

[00:00:21] Speaker 00:
There are two principal issues in this case.

[00:00:24] Speaker 00:
The first is the district court's violation of the party presentation principle.

[00:00:29] Speaker 00:
in its disregard of the forfeiture of the Section 101 argument.

[00:00:33] Speaker 00:
The second issue is the substantive results of the Section 101 argument were the court to reach that.

[00:00:38] Speaker 00:
I'd be happy to take those in either order.

[00:00:40] Speaker 00:
I'll begin with the forfeiture party presentation, unless the court has other direction.

[00:00:45] Speaker 03:
Well, can I just ask you about that?

[00:00:46] Speaker 03:
Do we need to find that 282 sets forth a pleading requirement that each defendant has to affirmably plead, da, da, da?

[00:00:54] Speaker 03:
Or is the party presentation rule and the forfeiture rule sufficient?

[00:00:58] Speaker 03:
The latter is sufficient, Your Honor.

[00:01:00] Speaker 00:
I think all the court needs to identify is the usual order that parties need to present to the court, which issues they wish the court to resolve, and that when you go through a trial, you have 250 pages of post-trial briefing.

[00:01:15] Speaker 00:
At that point, it's not proper to inject an entirely

[00:01:18] Speaker 00:
new defense that the patent holder never had an opportunity to present evidence on.

[00:01:24] Speaker 03:
In other words, this isn't just a due process violation while we send it back for additional briefing and oral argument on this 101 question.

[00:01:31] Speaker 03:
The 101 question is out.

[00:01:33] Speaker 00:
Yes, I think 101 is out of the case, Your Honor, because of party presentation and forfeiture.

[00:01:39] Speaker 00:
The parties had their opportunity to select which invalidity grounds they wish to present to the court.

[00:01:45] Speaker 03:
It's too late to amend complaints and do stuff like that, right?

[00:01:48] Speaker 00:
I think it is too late, Your Honor, at this point, at this late development of this case.

[00:01:53] Speaker 00:
Now, on remand, of course, you know, whatever happens on remand will be up to the district court at that point.

[00:02:00] Speaker 00:
You know, there will be changes to the case, I imagine.

[00:02:03] Speaker 00:
The product is now launched, so there will be damages and other issues in this case.

[00:02:07] Speaker 00:
that will be appropriate upon remand.

[00:02:10] Speaker 00:
So I think those issues will be left to the district court.

[00:02:12] Speaker 00:
But it is certainly our view that the parties have presented it.

[00:02:16] Speaker 03:
I understand.

[00:02:16] Speaker 03:
Not remand on the 101.

[00:02:17] Speaker 03:
I mean, the case is still pending.

[00:02:20] Speaker 03:
He hasn't decided it.

[00:02:21] Speaker 03:
So of course there's more for him to do.

[00:02:23] Speaker 03:
Exactly.

[00:02:23] Speaker 03:
But nothing related to this appeal if we were to

[00:02:26] Speaker 03:
if you were to prevail, right?

[00:02:28] Speaker 00:
Oh, yes, of course, Your Honor.

[00:02:29] Speaker 00:
The issues about 112, for example, are certainly still live before the court.

[00:02:34] Speaker 00:
So if the court remands, there are many issues to be resolved.

[00:02:38] Speaker 00:
Just 101 would not be part of this case.

[00:02:40] Speaker 00:
We think that issue has been forfeited in the course of this litigation, and it was improper for the district court, under party presentation principles, to resurrect an argument that- What about your reassignment question?

[00:02:54] Speaker 03:
You know reassignment is viewed

[00:02:57] Speaker 03:
unbelievably sparingly by this appellate court.

[00:03:00] Speaker 03:
I think I've done it once in 22 years.

[00:03:02] Speaker 03:
So what justifies?

[00:03:06] Speaker 03:
And third circuit law is pretty tight too.

[00:03:09] Speaker 03:
So what on earth would justify the assignment in this case?

[00:03:13] Speaker 00:
I appreciate all of that, Your Honor, and I want to be clear at the outset.

[00:03:16] Speaker 00:
The third circuit standard does not require us to show actual bias and argument is not sounding an actual bias.

[00:03:22] Speaker 00:
It's sounding in the appearance when an objective observer would view.

[00:03:26] Speaker 00:
I think there are four components that together combined to make this a rather extraordinary case.

[00:03:32] Speaker 00:
The first is

[00:03:33] Speaker 00:
We think it was rather unusual conduct that the district court very clearly took over the proceedings in this case and injected a one-on-one defense that had been long ago forfeited and explicitly said that Estella's wouldn't even have the right to present argument or evidence on that issue.

[00:03:50] Speaker 00:
We think that's extraordinary.

[00:03:52] Speaker 03:
The Third Circuit has said, you know, areas of law.

[00:03:54] Speaker 03:
I mean, that's where this issue comes up.

[00:03:57] Speaker 03:
If we side with you,

[00:03:59] Speaker 03:
It was an error.

[00:04:01] Speaker 03:
And it was an error of law.

[00:04:03] Speaker 03:
And he didn't have the ability to raise a new issue at this stage of the proceedings.

[00:04:06] Speaker 03:
But the Third Circuit has clearly said those kinds of things don't constitute sufficient basis for reassignment.

[00:04:12] Speaker 00:
Well, two responses, Your Honor.

[00:04:13] Speaker 00:
First, I think this is the whole panoply of these four features I'm going to look to.

[00:04:18] Speaker 00:
But second, the United States, if you whack the Third Circuit, did say that very unusual course of proceedings before a district court

[00:04:25] Speaker 00:
is a factor that the courts consider for reassignment.

[00:04:28] Speaker 00:
And I want to be clear, I'm not sure if any one of these standing alone work, but when you look at them holistically, I think this makes a very unusual case.

[00:04:35] Speaker 00:
So the second after the takeover was the district court in response to defendant's Rule 52B motion expressed frustration that they were not picking up on what he said were the hints that he provided during litigation.

[00:04:49] Speaker 00:
I think it's unusual for a district court to say,

[00:04:52] Speaker 00:
that he was actively providing hints to a party as to what he thinks the arguments that they should have made.

[00:04:57] Speaker 00:
I think that combines to enhance the unusual nature.

[00:05:01] Speaker 00:
The third component here is that there are rather unusual comments about the pharmaceutical industry colluding over patent protection and challenges to the PTO and disparagement of broad categories of pharmaceutical claims.

[00:05:19] Speaker 00:
that I think could lead an objective observer just to have a question as to if there is an open-mindedness and a neutrality as to... You're saying he was trying the industry rather than just the case.

[00:05:33] Speaker 00:
Your Honor, the fact that he cited a piece of litigation that has nothing to do with my clients and nothing to do with this product for a disparagement of the industry suggesting that there is... Well, does that suggest that he couldn't try any of these cases?

[00:05:47] Speaker 02:
He's got a docket full of pharma cases.

[00:05:49] Speaker 00:
Well, Your Honor, he's sitting by designation, and we are focused on this particular case where these comments arose.

[00:05:55] Speaker 03:
And they weren't his own comments.

[00:05:58] Speaker 03:
I mean, he was citing, I mean, it wasn't a direct quote, but he was citing to another district court's opinion in a case, right?

[00:06:07] Speaker 00:
Citing to a decision that is about the industry that has no tie to my client,

[00:06:13] Speaker 00:
no tie to the product at issue, no tie to any conduct alleged, but just saying there has been other litigation about this industry.

[00:06:22] Speaker 00:
And that informs why it is that I am invalidating these patent claims because I think there has been collusion and he claims the PTO is turning a blind eye in approving these claims.

[00:06:34] Speaker 00:
Those are powerful statements that I think from our perspective lead an objective observer to wonder is there

[00:06:42] Speaker 00:
If the court has concerns about this industry and these claims, is there neutrality and open-mindedness on remand?

[00:06:50] Speaker 04:
What's the standard again that applies in the Third Circuit in this regard?

[00:06:55] Speaker 00:
So in the Alexander case, the court explained

[00:06:58] Speaker 00:
The key issue is the appearance of neutral, impartial administrator of justice.

[00:07:03] Speaker 04:
From whose perspective?

[00:07:04] Speaker 04:
The public, I assume.

[00:07:05] Speaker 00:
Yes, Your Honor, from an objective observer.

[00:07:07] Speaker 00:
And the court was very clear that it does not require actual bias or prejudice.

[00:07:12] Speaker 00:
The court decisively said is not the test.

[00:07:15] Speaker 00:
It's the appearance of neutrality.

[00:07:17] Speaker 00:
Does the public have an objective appearance that there is a neutral arbiter who will look to the party's arguments and just decide them on the merits of the party's arguments without bringing in

[00:07:27] Speaker 00:
perspectives about the industry more broadly or other issues that could lead to a question of that neutrality or that impartiality.

[00:07:37] Speaker 00:
And also point in C.R.

[00:07:38] Speaker 00:
Bard, this court had previously reversed the district court for injecting a section 101 argument that the parties had not raised.

[00:07:45] Speaker 00:
So we also do have a pattern of conduct of a court

[00:07:48] Speaker 03:
Well, let me ask you about that.

[00:07:49] Speaker 03:
I mean, in this case, you already had a five-day trial with this judge, and I assume there was pleadings, and there was lots of back and forth.

[00:07:58] Speaker 03:
And I didn't see any reference to anything that district court said or did other than the one where you say he pushed them to do this.

[00:08:06] Speaker 03:
He gave them a hint.

[00:08:07] Speaker 03:
But anything in his conduct is rulings on anything that suggests anything problematic.

[00:08:13] Speaker 03:
I mean, having it, right?

[00:08:15] Speaker 03:
Am I right about that?

[00:08:16] Speaker 00:
Your Honor, I think we are principally focused on

[00:08:19] Speaker 00:
the really extraordinary nature of this post-trial ruling that from out of nowhere injects an issue in the courts.

[00:08:26] Speaker 03:
OK, so I'm right.

[00:08:27] Speaker 00:
Yes, you are.

[00:08:28] Speaker 00:
And to be clear, we recognize this is an extraordinary request of asking for reassignment.

[00:08:32] Speaker 03:
We wanted to- Speaking of reassignment, I'm sorry to interrupt, but conceivably, reassignment would require a whole new trial.

[00:08:40] Speaker 03:
I mean, you've already had a trial here.

[00:08:42] Speaker 03:
So this district court, and you've filed motions in the district court,

[00:08:46] Speaker 03:
Conceivably, a reassignment might require a whole new trial, right?

[00:08:50] Speaker 00:
Well, Your Honor, and that was the point that I was getting at earlier.

[00:08:52] Speaker 00:
That concern about efficiency is a bit mitigated in this case because when this was tried at the time, it was purely a bench trial because it was pre-launch.

[00:09:02] Speaker 00:
As the court is aware from some of the motions practiced, the product has now launched and is on the market, so there will additionally be claims for damages which could invoke a jury trial right on remand.

[00:09:15] Speaker 00:
there is a likelihood that there will be significant additional proceedings occasioned by the launch of the product and a claim for damages.

[00:09:22] Speaker 05:
If there were a remand, it would be only on 112, wouldn't it?

[00:09:26] Speaker 00:
I think that's right.

[00:09:27] Speaker 00:
Yes, your honor.

[00:09:27] Speaker 03:
What about infringement?

[00:09:28] Speaker 03:
Was a trial on infringement and 112?

[00:09:32] Speaker 00:
I apologize, your honor.

[00:09:33] Speaker 00:
Infringement would also be an issue.

[00:09:35] Speaker 00:
There are developments in the case, though, since then.

[00:09:37] Speaker 00:
At the time of the trial, one of the key infringement proofs was that the product that had been produced by defendants was expired.

[00:09:44] Speaker 00:
And so one key issue was the use of expired product to demonstrate infringement.

[00:09:49] Speaker 00:
In related litigation, unexpired samples have since been produced.

[00:09:53] Speaker 00:
So there will be discussion with the district court, I imagine, as to

[00:09:56] Speaker 00:
that evidence that now is available that was not available during the... Were there fact witnesses and expert witnesses at the trial?

[00:10:03] Speaker 00:
There were, yes, Your Honor.

[00:10:04] Speaker 00:
So there might be credibility determining... But to that point, Your Honor, I think some of those questions are now going to change because there has been production between the parties of unexpired samples.

[00:10:14] Speaker 00:
So the key infringement dispute, the complexion of that, I think, on remand is going to look very different.

[00:10:20] Speaker 00:
And factual disputes now, because we have a damages component and a jury trial right,

[00:10:25] Speaker 00:
will likely be resolved by a jury rather than the district court sitting in a bench trial.

[00:10:30] Speaker 00:
So the complexion of the case does look different.

[00:10:32] Speaker 00:
I think that just substantially mitigates against efficiency concerns on reassignment.

[00:10:37] Speaker 00:
In addition, though, we do believe that our client has a right to have a neutral objective observer.

[00:10:43] Speaker 00:
And even if there are efficiency concerns, we still think that ensuring the fair process is necessary.

[00:10:50] Speaker 04:
Are there any options other than just reassignment

[00:10:55] Speaker 00:
Your Honor, as we read this court's cases, if it thinks the circumstances are warrant reassignment would be appropriate, I don't think there would be other remedial options available.

[00:11:06] Speaker 00:
And given the case will take on a new chapter with damages, I do think it would not be substantially disruptive for a reassignment in these circumstances.

[00:11:15] Speaker 00:
And we do think, we recognize it's an extraordinary ask, but we think these are extraordinary circumstances when you factor together the panoply of statements and conduct that occurred here.

[00:11:25] Speaker 05:
What's the relevance of the compound being expired?

[00:11:31] Speaker 05:
Is it that it might be great and therefore no longer be infringing?

[00:11:37] Speaker 05:
Or is that otherwise an FDA issue?

[00:11:40] Speaker 00:
It was the first thing you said, Your Honor, was because the samples were expired, there was a question of how you do that, what the expiration does to the dissolution testing, and how you can use expired samples to demonstrate that they have

[00:11:52] Speaker 00:
the claim dissolution performance when they were expired versus when they were active.

[00:11:56] Speaker 00:
And there was a big expert dispute about that.

[00:11:58] Speaker 00:
But now that they're unexpired samples, that will be obviated.

[00:12:02] Speaker 04:
Do we have any authority in your view to address the Section 101 issue or any part of it?

[00:12:08] Speaker 00:
Your honor, we think that that issue is not in this case, and the court need not resolve it.

[00:12:12] Speaker 00:
If the court does resolve this, these are pharmaceutical compositions.

[00:12:16] Speaker 00:
They're synthetic, non-made human compounds.

[00:12:19] Speaker 00:
We think the court's decision, natural alternatives, clearly states this is patent-eligible subject matter, and it would be extraordinary for the court to say a synthetic, non-natural composition of matter claim is outside patent eligibility.

[00:12:32] Speaker 00:
No court case has remotely held that besides the district court here.

[00:12:36] Speaker 00:
And we think this is a, if the court reaches it, that is a straightforward question.

[00:12:42] Speaker 03:
But the court would only reach it if it found what the judge did here was correct.

[00:12:46] Speaker 00:
I don't think the court need reach the question.

[00:12:48] Speaker 05:
Yes, Your Honor.

[00:12:51] Speaker 05:
And we'll save the remainder of your time.

[00:12:53] Speaker 05:
Thank you, Your Honor.

[00:12:54] Speaker 05:
Mr. Zimmerman.

[00:13:02] Speaker 01:
Good morning, Your Honor.

[00:13:03] Speaker 01:
Bill Zimmerman of Kenobi Martins.

[00:13:05] Speaker 01:
May it please the court.

[00:13:06] Speaker 01:
In this unusual case, Astellas made repeating, striking, unexpected admissions regarding the scope of its invention that led the district court to address 101.

[00:13:19] Speaker 01:
The district court did not err either in addressing it or in its rulings.

[00:13:23] Speaker 01:
So first I'd like to start with the procedural issue.

[00:13:27] Speaker 01:
There are three Supreme Court cases, Slauson, Dunbar, Brown.

[00:13:32] Speaker 01:
Yes, they're from the late 1800s, but they all say the court has the authority to address validity when the patent is void on its face.

[00:13:42] Speaker 01:
They haven't been abrogated.

[00:13:44] Speaker 01:
They've never been called into question.

[00:13:47] Speaker 01:
There's no legislative history that says they're not good law.

[00:13:50] Speaker 04:
So under the Supreme Court precedent... What do those cases say or what's their context with respect to party presentation?

[00:13:58] Speaker 04:
They didn't address party presentation, but in all of them... Can I assume that in those cases the parties were able to present their views?

[00:14:06] Speaker 01:
They were decided on issues that hadn't been raised, hadn't been briefed.

[00:14:12] Speaker 01:
So no due process concern was raised, no party presentation issue was raised.

[00:14:18] Speaker 01:
And plaintiffs say that this was abrogated by the 1952 Act.

[00:14:23] Speaker 01:
I'd like to point the court to the Howes case.

[00:14:27] Speaker 01:
It is a 1982 Second Circuit case directly on point.

[00:14:33] Speaker 01:
The intervener pled 101.

[00:14:35] Speaker 01:
101 was not addressed during the trial.

[00:14:39] Speaker 01:
It was not briefed by any of the parties.

[00:14:43] Speaker 01:
The court decided the 101 issue post trial on a judgment notwithstanding the verdict ruling.

[00:14:53] Speaker 01:
And the plaintiff, the patentee, on appeal said this was procedurally improper.

[00:15:00] Speaker 01:
The Second Circuit said Section 101 deals with the subject matter of patents, and as such, it is always open to consideration of the court whether the point is raised in the answer or not.

[00:15:15] Speaker 01:
And so the court that has addressed this issue directly on point.

[00:15:20] Speaker 03:
OK, well, that court did it.

[00:15:21] Speaker 03:
And you refer to the cases at the Supreme Court that are over 150 years old.

[00:15:26] Speaker 03:
And I think I'm characterizing your friend's answer to those assertions, which is the 1952 Patent Act.

[00:15:34] Speaker 03:
which followed those Supreme Court cases and says very clearly, on this point of law, the following shall be defenses in any action involving the validity of the patent and shall be pleaded.

[00:15:47] Speaker 03:
And that includes all the invalidity.

[00:15:49] Speaker 03:
That statute was not in effect 150 years ago.

[00:15:53] Speaker 01:
It was in effect in 1982 when the Second Circuit House case was decided and cited back to those Supreme Court cases.

[00:16:02] Speaker 03:
Did it cite to this 1952 statute?

[00:16:04] Speaker 01:
It didn't directly cite to it, but it cited 101, which was a product of

[00:16:10] Speaker 01:
that.

[00:16:11] Speaker 01:
And so there.

[00:16:12] Speaker 03:
But the statute is sort of a centerpiece of what we do here.

[00:16:16] Speaker 01:
Exactly.

[00:16:17] Speaker 01:
And so there's no indication in house that the 1952 Act changed Slauson Brown Dunbar.

[00:16:25] Speaker 03:
Well, do you disagree that the 1952 Act says that these defenses and any action involving validity of a patent shall be pleaded?

[00:16:35] Speaker 01:
And they were pled in this case, Your Honor.

[00:16:37] Speaker 01:
The answers

[00:16:39] Speaker 01:
contain affirmative defenses under 101.

[00:16:42] Speaker 01:
And Lupin's answer, entry 49 in the docket, paragraph 21 of the counterclaim, has an express statement under 101.

[00:16:51] Speaker 01:
They weren't pursued at trial.

[00:16:53] Speaker 01:
But once they're pled, the district court has the authority to address 101.

[00:16:59] Speaker 01:
And here, there were stunning admissions.

[00:17:03] Speaker 01:
Astellas didn't.

[00:17:05] Speaker 03:
So they were pled as a defense?

[00:17:08] Speaker 01:
They were pled as an affirmative defense in Zidas' answer.

[00:17:14] Speaker 01:
The answers are not in the record.

[00:17:18] Speaker 01:
But I can tell you, it's DI-60, which is Zidas.

[00:17:22] Speaker 01:
It's the second affirmative defense.

[00:17:24] Speaker 01:
And I'm happy to send copies of the answers to the court.

[00:17:27] Speaker 01:
And for Lupin, it's entry 47.

[00:17:29] Speaker 03:
Well, was it cited in the red brief?

[00:17:32] Speaker 03:
Did you make this point?

[00:17:33] Speaker 01:
It was not, Your Honor.

[00:17:35] Speaker 03:
So you didn't tell us that this was pled?

[00:17:37] Speaker 01:
We didn't believe that pleading it in any way affected the district court's ability to raise it under Slauson Dunbar Brown and the subsequent Hughes case.

[00:17:47] Speaker 01:
It would exalt form over substance.

[00:17:49] Speaker 01:
If the court has the power to address it, whether it's pled or not shouldn't make a difference.

[00:17:55] Speaker 01:
But here it is pled.

[00:17:57] Speaker 01:
So that shouldn't be in dispute.

[00:18:00] Speaker 01:
It just seems odd.

[00:18:02] Speaker 01:
I would like to turn to the admissions we actually have from- Mr. Zimmerman, you mentioned this so-called admission.

[00:18:10] Speaker 05:
That seems to be a loose comment relating to the underlying nature of the invention, but what counts is the claim, the claims.

[00:18:21] Speaker 05:
The claims are to a pharmaceutical composition, which is very clearly a statutory subject matter.

[00:18:29] Speaker 01:
Your Honor, the first step is the directed to inquiry.

[00:18:33] Speaker 01:
Here's what Estella's told the district court.

[00:18:35] Speaker 01:
It's at page 7452.

[00:18:38] Speaker 01:
The invention is directed to the use of a well-known, well-established, sustained hydrogel formulation that, with the claimed dissolution profile, overcomes the food effect.

[00:18:52] Speaker 01:
They have told the court that the advance over the prior arc

[00:18:57] Speaker 01:
is the dissolution limitation.

[00:18:59] Speaker 01:
They've gone so far as to tell the district court at page 74, 15, and 16 that the sustained release systems are mere background art.

[00:19:10] Speaker 01:
They went on to say the inventive concept of the 780 patent was discovering the dissolution rate that would address the food effect and achieving it using previously known formulation technology.

[00:19:23] Speaker 05:
Did they file an oath of declaration when they filed it?

[00:19:26] Speaker 05:
patent application saying, this is our invention.

[00:19:31] Speaker 05:
We made this invention.

[00:19:32] Speaker 05:
They did.

[00:19:33] Speaker 05:
And they claimed it as a pharmaceutical composition?

[00:19:35] Speaker 01:
They did.

[00:19:36] Speaker 01:
But a party shouldn't be allowed to go to a district court.

[00:19:40] Speaker 01:
And for purposes of avoiding the 112 problems with the patent, tell the court that the sustained release piece is background art.

[00:19:50] Speaker 01:
You don't have to worry about that.

[00:19:51] Speaker 01:
It was well-known, routine, conventional.

[00:19:54] Speaker 01:
The drug mirror background was known in the art.

[00:19:57] Speaker 01:
It was known to treat overactive bladder.

[00:20:00] Speaker 01:
The only piece of our claim left is the dissolution limitation.

[00:20:04] Speaker 01:
But for 112 purposes, you can assume all of this is known, but we can ignore it for 101 purposes.

[00:20:12] Speaker 01:
The district court was led by Astellas' statements that were specifically couched in 101 language to this conclusion.

[00:20:22] Speaker 01:
And Astellas, throughout its brief, never addresses any of those admissions.

[00:20:29] Speaker 03:
But aren't the admissions equally relevant to an obviousness case?

[00:20:33] Speaker 01:
They would be.

[00:20:33] Speaker 03:
And you dropped your obviousness.

[00:20:35] Speaker 01:
We did.

[00:20:36] Speaker 01:
Given the limited amount of time for trial, the parties narrowed it to 112 defenses and non-infringement issues.

[00:20:45] Speaker 03:
So you officially dropped.

[00:20:46] Speaker 03:
I mean, it came as a surprise to me when you said that you had pled 101 as an affirmative defense.

[00:20:51] Speaker 03:
Did you officially drop that too?

[00:20:53] Speaker 01:
It was never officially dropped at any point.

[00:20:56] Speaker 01:
There's no document that says 101 is dropped.

[00:20:59] Speaker 01:
There's no document memorializing it.

[00:21:01] Speaker 01:
101 was not presented at trial, and it's not in the pretrial order.

[00:21:07] Speaker 01:
But there's a stipulation dropping the obviousness defense.

[00:21:12] Speaker 01:
But that's why this case is so unusual.

[00:21:15] Speaker 01:
Once the obviousness case went away, Astellas made stunning admissions at trial that everything in their claim was known.

[00:21:23] Speaker 01:
They even go so far as to say, the invention is directed to technology that was well characterized and routine.

[00:21:30] Speaker 05:
And why wasn't the case decided on 103?

[00:21:34] Speaker 01:
Because 103 had been dropped.

[00:21:38] Speaker 01:
Why?

[00:21:39] Speaker 03:
You dropped 103.

[00:21:40] Speaker 01:
103 was dropped by the parties via stipulation when the judge... It wasn't dropped.

[00:21:45] Speaker 03:
It was your assertion.

[00:21:47] Speaker 03:
So you were the ones that pulled it, right?

[00:21:49] Speaker 04:
Yes.

[00:21:50] Speaker 04:
Yeah.

[00:21:50] Speaker 04:
But what does it matter at this point when we look at the decision on 101?

[00:21:57] Speaker 04:
And in my view, at least, it's clearly erroneous on its face on many points.

[00:22:03] Speaker 04:
But what do we do about that?

[00:22:05] Speaker 01:
If the court were to say the 101 ruling can't withstand scrutiny.

[00:22:11] Speaker 04:
Why couldn't we look at what the claims are directed to and say that they're not directed to patent-ineligible subject matter?

[00:22:26] Speaker 01:
You would have to have the threshold issue of the issue being before the court.

[00:22:34] Speaker 01:
And so if you're going to say it was procedurally proper, then you could get to the substance, which is what happened in the House case.

[00:22:43] Speaker 01:
The other alternative would be to say it's procedurally improper, which would lead to a remand for trial.

[00:22:50] Speaker 01:
Well, it doesn't have to be a trial for the court to address infringement and the 112 defenses.

[00:22:57] Speaker 01:
We disagree that there would be a need for a new trial.

[00:23:00] Speaker 01:
The evidence has all been presented.

[00:23:02] Speaker 01:
The district court could simply rule.

[00:23:04] Speaker 03:
Well, that's up to the district court.

[00:23:07] Speaker 03:
It is.

[00:23:09] Speaker 01:
I just wanted to point out that there is a dispute about the characterization that there's new evidence and there would have to be a jury trial and damages.

[00:23:17] Speaker 01:
All of that would be in the discretion of the district court, given that the defenses have already been presented and he's had a trial.

[00:23:23] Speaker 01:
I would like to talk briefly about reassignment.

[00:23:27] Speaker 01:
Even if the court were to say the judge was substantively wrong in its 101 analysis, and we don't believe that to be the fact given the admissions that Estelle has made, this is not the type of egregious trial that leads to reassignment.

[00:23:43] Speaker 01:
It's a remedy that's granted very sparingly.

[00:23:47] Speaker 01:
The only thing that Astellas points to is the decision.

[00:23:51] Speaker 01:
And that decision in view of the admissions made by Astellas is not outside of the bounds.

[00:23:59] Speaker 05:
But if the judge has shown that he's biased against the pharmaceutical industry because what he believes to be their behavior, isn't that grounds for reassignment?

[00:24:11] Speaker 01:
I would say no, Your Honor.

[00:24:13] Speaker 01:
If you read that in context, that was not directed at Estellas.

[00:24:17] Speaker 01:
What's the point?

[00:24:21] Speaker 01:
There was a ruling under 101.

[00:24:23] Speaker 01:
We went to the district court and said, we would like you to address all of the other issues so that we can have a full appeal.

[00:24:31] Speaker 01:
And we aren't sure that the 101 issue is properly raised.

[00:24:36] Speaker 01:
We'd like you to clarify that.

[00:24:38] Speaker 01:
Any ire in that opinion was directed at the defendants for failing to raise what he thought was a clear issue in view of the trial presentation, as well as are asking him to revisit all of these other issues.

[00:24:56] Speaker 04:
Good, go ahead.

[00:24:58] Speaker 04:
Part of that most comments that we're looking at, they were not limited to within the four walls of the courtroom.

[00:25:08] Speaker 04:
I mean, they're limited to the general public, to the pharmaceutical industry as a whole.

[00:25:18] Speaker 01:
There was a site to one antitrust case and some discussion of patenting sustained release systems.

[00:25:27] Speaker 01:
But the court did not rule based on any of those.

[00:25:30] Speaker 01:
He cited the Mayo case.

[00:25:31] Speaker 01:
He cited the Alice case.

[00:25:33] Speaker 01:
He showed he had a clear understanding of the claims and addressed the patent law issues very clearly.

[00:25:40] Speaker 01:
And then in the C.R.

[00:25:40] Speaker 01:
Bard case that was referenced where he raised 101,

[00:25:44] Speaker 01:
On remand, he addressed every issue presented in a full, well-reasoned opinion.

[00:25:50] Speaker 01:
There's nothing to suggest he has any bias toward either party or that he can't address the defenses sufficiently on remand.

[00:26:00] Speaker 01:
And as for the need

[00:26:03] Speaker 01:
judicial economy, he not only has this case, he has a subsequent case that was brought on another patent by Estellas with respect to the Lupin and Zydus defendants.

[00:26:17] Speaker 01:
He's got the 780 patent cases asserted against Ascent, MSN, and other defendants, and presumably the 451 cases, another patent that will be filed.

[00:26:29] Speaker 05:
All on a low basis for thinking there may be a problem.

[00:26:33] Speaker 01:
No, he has spent years with these cases and heard all of the testimony, has a number of them.

[00:26:41] Speaker 01:
A reassignment would disrupt not only our cases, but a string of cases.

[00:26:47] Speaker 01:
And it would automatically necessitate another trial in this matter, where a trial wouldn't be necessary because the evidence is already before the court.

[00:27:01] Speaker 01:
Does the panel have any further questions?

[00:27:02] Speaker 04:
There's no doubt that this is not a pleasant matter or that there may be a clear answer.

[00:27:13] Speaker 04:
Doesn't this court have an obligation as well to address the demeanor of the judiciary, especially with respect to the cases that we hear?

[00:27:23] Speaker 01:
He has tried a number of cases sitting by designation in Delaware.

[00:27:28] Speaker 01:
He's ruled for branded companies.

[00:27:30] Speaker 01:
He's ruled for generic companies.

[00:27:32] Speaker 01:
The isolated statement doesn't suggest he can't rule without bias.

[00:27:41] Speaker 03:
Well, I'm not defending the statement, but the statement equally

[00:27:45] Speaker 03:
was adverse to both grand and to both parties.

[00:27:49] Speaker 03:
Right.

[00:27:49] Speaker 03:
It didn't distinguish between the two.

[00:27:51] Speaker 03:
It went after both of them based on the antitrust collusion in the other case.

[00:27:55] Speaker 01:
And this is not a case where there have been repeated rulings that are outside the norm.

[00:28:01] Speaker 01:
There is no pattern of conduct.

[00:28:03] Speaker 01:
There were no heated moments at trial.

[00:28:05] Speaker 01:
It doesn't meet any of the standards set forth in the Third Circuit's case law for reassignment.

[00:28:11] Speaker 01:
Thank you.

[00:28:12] Speaker 05:
Thank you, Mr. Zimmerman.

[00:28:13] Speaker 05:
Mr. Hughes has two and a half minutes for a bottle.

[00:28:19] Speaker 00:
Thank you, Your Honor.

[00:28:20] Speaker 00:
I think that the case can be resolved on the procedural issue.

[00:28:24] Speaker 00:
Nothing overcomes the usual workings of party presentation or forfeiture.

[00:28:29] Speaker 00:
Defendants just mentioned their answer.

[00:28:31] Speaker 00:
They didn't argue it in their brief and for good reason.

[00:28:33] Speaker 00:
It's boilerplate in their answer.

[00:28:35] Speaker 00:
When you look at the answer, it just says,

[00:28:37] Speaker 00:
defense under Section 101, 102, 103, 112.

[00:28:40] Speaker 00:
There's no development of that.

[00:28:42] Speaker 03:
And do you agree that Rule 16 controls the course of action?

[00:28:46] Speaker 03:
It says the pretrial order controls the course of action.

[00:28:50] Speaker 03:
So even if they hadn't withdrawn the defense, if it wasn't in the pretrial order, it would not... Yes, Your Honor.

[00:28:56] Speaker 00:
It was clearly out of this case, and it would be quite damaging to patent law if every patentee

[00:29:01] Speaker 00:
has to take prophylactic efforts to defend against the boogeyman in the closet of a one-on-one argument that's never been invoked by the defendant.

[00:29:09] Speaker 00:
That's just not how it operates.

[00:29:11] Speaker 00:
I don't think the court should reach the issue, but on the substantive point, there's an argument about concessions, just a few points about that.

[00:29:17] Speaker 00:
First, defendants never argued this at trial.

[00:29:20] Speaker 00:
They never argued this in their post-trial.

[00:29:22] Speaker 00:
They only think there's clarity around these concessions now after the district court's decision.

[00:29:27] Speaker 00:
Rather, when the district court issued this decision, instead of defending it,

[00:29:31] Speaker 00:
Defendants asked the district court to change the decision and to actually decide the 112 issues.

[00:29:36] Speaker 00:
They had it right then and saying the 112 issues were what the focal point of the case should be, not the 101 issue.

[00:29:42] Speaker 00:
But on the substance of it, there's no getting around.

[00:29:44] Speaker 00:
These are composition of matter claims.

[00:29:46] Speaker 00:
These have to be within patent-eligible subject matter.

[00:29:50] Speaker 00:
Further, as to those admissions, I think if the court looks, there's some mischaracterization going on here.

[00:29:56] Speaker 00:
Because what Estellas is talking about is not the invention as a whole.

[00:29:59] Speaker 00:
It's talking about using known techniques applied to a very novel discovery.

[00:30:04] Speaker 00:
And then that discovery combined with techniques creates novel, useful pharmaceutical compositions.

[00:30:11] Speaker 00:
And when the court looks at the decision in rapid litigation management, that's precisely the fact pattern there.

[00:30:16] Speaker 00:
And those are more challenging claims because those were method claims, not the composition of matter and pharmaceutical claim.

[00:30:22] Speaker 00:
One just final point about the district courts

[00:30:24] Speaker 00:
It's true that the district court said that there was collusion in his view among Brandon and generic, but the upshot of that statement was to be adverse to patent protection.

[00:30:36] Speaker 00:
What he says in very clear terms, so he thinks even the PTO is issuing patents that there should not be.

[00:30:41] Speaker 00:
So although there is, he didn't say that he did assert that the PTO he made a challenge to the PTO in his decision.

[00:30:49] Speaker 00:
So the PTO is swept within his criticism and the upshot of the criticism is that is

[00:30:55] Speaker 00:
markedly a thumb on the scale against patents in this space.

[00:30:59] Speaker 00:
And that's what we think leads to at least an appearance of concern here.

[00:31:04] Speaker 05:
Thank you both counsel, the case is submitted.