[00:00:01] Speaker 03:
Our next case is Xylex Pharmaceuticals, Inc. v. Aviva Drug Delivery Systems, Inc., 25-1002. Counselor Davies, you have reserved four minutes of time for rebuttal.

[00:00:15] Speaker 01:
Is that correct? That's correct, Your Honor. Okay. We're ready for more.

[00:00:20] Speaker 01:
Good morning, Your Honors, and may it please the court. During my time today, I'd like to focus on the claim construction issue that is before this court because all of the district court's additional rulings with respect to vitiation, estoppel, and infringement are based on the district court's flawed claim construction of the term dissolving agent. The term dissolving agent means a two-component combination that maintains lidocaine in a dissolved state in the plaster of the patch. And at trial, the parties' experts agreed that the dissolving agent must maintain lidocaine in a dissolved state in the patch.

[00:00:56] Speaker 01:
So the dispute between the parties is then whether you can read in an additional manufacturing step into the product claims at issue, and we believe that you should not.

[00:01:08] Speaker 01:
AVEVA is essentially saying that the dissolving agent has two functions, and we say it has one function. The district court explained this extra manufacturing step in its opinion at paragraph 65. It stated the asserted claims cover a patch where lidocaine is dissolved in a combination of isosteric acid and dipropylene glycol before mixing that lidocaine solution in a plaster. That is a clear manufacturing limitation that was read into what is otherwise a product claim directed to a patch.

[00:01:38] Speaker 01:
AVEVA also explains this manufacturing step in its brief at page 1.

[00:01:43] Speaker 01:
The dissolving agent functions as a co-solvent for dissolving lidocaine drug substance before mixing with adhesives. Again, this is a clear manufacturing step that is being read in. And the district court improperly read in this manufacturing step into, again, what are purely product claims when we look at the claims.

[00:02:01] Speaker 01:
Another point, Your Honors, AVAVA's construction and the District Court's construction is actually taken directly from extrinsic evidence, and that is a statement that was made to the Patent Office during the prosecution of what is the 640 patent. And that's wrong because the 640 patent bears no family relationship to any of the asserted patents. The 640 patent has a very different specification than the asserted patents. And the 640 patent at the time that statement was made had very different claims that were pending before the patent office at that time.

[00:02:38] Speaker 01:
So AVEVA is essentially taking the statement from extrinsic evidence out of context and applying it to the construction of an unrelated patent and a claim term in this case. So appellant's construction inappropriately limits the function of the dissolving agent to the finished patch and does not include this extra manufacturing step that Avav and the district court are attempting to read in. If we turn first to the claims, the claims are unequivocally directed to products, and those are specifically finished patches, and the dissolving agents that are in those patches.

[00:03:10] Speaker 01:
If we look at claim four, which is the only claim that is asserted in this case that is clearly directed to a non-aqueous patch, that contains a dissolving agent consisting of isosteric acid and dipropylene glycol. So a product claim with a dissolving agent in the patch. Claim one, from which claim four depends, is also directed to a patch and a dissolving agent which are contained in that plaster. Again, and there's no dispute that the plaster is a component of the finished patch. So again, clearly a product claim without any mention of manufacturing limitations at all.

[00:03:42] Speaker 03:
It's an apparatus claim.

[00:03:45] Speaker 01:
I would refer to it as a product claim, Your Honor, but it could be an apparatus claim, yes. But it is definitely not a manufacturing claim in any way. It contains no manufacturing or process limitations. It is directed to a finished patch.

[00:04:02] Speaker 01:
The claims are clearly directed to products, or in your words, Your Honor, an apparatus, and they make no mention of any manufacturing steps. And in these claims, the function of the dissolving agent, therefore, must occur in the patch itself, in the finished patch, and that function is to maintain lidocaine in a dissolved, non-crystalline state in the patch. And how do we know that? If we turn to the specification, the specification talks about a problem and then the way in which the claims and the invention of this patent solve that problem. Specifically, the problem identified in the specification was the development of crystalline lidocaine in patches.

[00:04:40] Speaker 01:
And the problem with that is when you develop crystalline lidocaine in the patches, if the lidocaine is not completely dissolved in those patches, the drug can't get out of the patch. So you've got a patch with lidocaine in it, but the lidocaine is crystalline and it can't move from the patch into the skin. So you're not getting any of the benefits of putting the patch on. And then the specification does not talk about any problem with dissolving that lidocaine before it's in the patch. The relevant problem is what is the status of lidocaine in the patch?

[00:05:11] Speaker 01:
If it's crystalline, that's a problem. And that's the problem that they set out to solve. The way they solve the problem, for example, at column two, line 17 to 19 of the 174 patent, it refers to a non-aqueous patch in which the lidocaine is completely dissolved and which is effective to relieve various muscle pains over a long period of time. Again, the solution is a patch that has lidocaine completely dissolved in a non-crystalline state. The solution is not some manufacturing step.

[00:05:43] Speaker 01:
And the way this is achieved is the use of a dissolving agent that is able to maintain lidocaine in that dissolved state over a long period of time. So it's able to prevent that recrystallization in the patch over a long period of time. And that's discussed, for example, at specification at column two, lines 42 to 46.

[00:06:04] Speaker 01:
So again, what is required for release of the drug, release of the lidocaine from this patch, is that it remains dissolved in a non-crystalline state on the patch and not any particular manufacturing steps that were used to achieve that patch. And in fact, the specification expressly says, and this is a column three, lines 40 to 42, that the claimed patches are not limited to any particular manufacturing method and they can be produced by any conventional method. If we look at the examples, each of the examples in the patents has three parts.

[00:06:39] Speaker 01:
The first part, the formulation components, and I'm looking at, for example, example one of the patent, which for your reference is at column four, lines six through 46. So turning back to the examples, they have three parts. The first part of the formulation components of the patch. The second part of the example describes a production method that could be used to make the patches. And then the third thing that's discussed is the finished patch itself. And here the claims are directed to one part of the examples. They're directed to the finished patch.

[00:07:09] Speaker 01:
They're not directed to the manufacturing method that is also part of the examples. The specification goes on to say that when these patches in examples one and six were tested, they showed generally good results with respect to the amount of lidocaine that's released from the patch into the skin. And we know the reason that is from the other parts of the specification is that the dissolving agent is maintaining the lidocaine in a non-crystalline state in the patch.

[00:07:39] Speaker 01:
Excuse me. So for all these reasons, this court, we believe, should construe the term dissolving agent as a two-component combination that maintains lidocaine in a dissolved state in the plaster of the patch, and as a result, vacate the district court's claim construction, adopt appellant's claim construction, and vacate and remand all the other issues in this case, which applied this faulty claim construction, including vitiation, estoppel, and infringement.

[00:08:10] Speaker 01:
You have no further questions? I'm sorry.

[00:08:12] Speaker 03:
Could you reference the prosecution history argument?

[00:08:16] Speaker 01:
Absolutely, Your Honor. So with respect to the prosecution history, the court, in its opinion, and this is at paragraph 182 and also at 111, it claims that there is a clear and unmistakable disclaimer that would allow it to read in this manufacturing step, and we disagree completely. We believe that the court read those statements out of their context. Most importantly, that the claims at issue during the prosecution were always directed to product claims, never included manufacturing steps, and they should be read in that manner.

[00:08:53] Speaker 01:
For example, when patentee made statements responding to the rejection over the Hanma reference that's discussed in the prosecution of the 174, it was talking about the invention. There they're talking about the invention, which is the patch. not any invention which is a product, not any invention that is a manufacturing step. And we believe that AVEVA and the district court ignored the context that those claims were made in. And AVEVA actually went so far as to both in its trial presentation and in its briefing actually remove the context from the arguments that were made in Hanma, and that clearly is not the proper analysis that should be done.

[00:09:34] Speaker 01:
Without getting into the minutia of each of the statements that were made, the parties dispute what those statements meant in the context of the prosecution history, but they are at most ambiguous. And it's our position that none of them rise to a clear and unmistakable disclaimer that would allow you to read in what is clearly a manufacturing step that finds no support in either the claims or the specifications.

[00:10:05] Speaker 01:
Thank you, Your Honor.

[00:10:18] Speaker 03:
Thank you. Counselor Jarros?

[00:10:21] Speaker 00:
Jarros, yes.

[00:10:23] Speaker 00:
Good morning, Your Honors. May it please the Court.

[00:10:26] Speaker 00:
I believe Counsel just referred to the minutia of the prosecution history, but that's what this trial was about. During the prosecution of the asserted patents, they specifically described defined dissolving agent and then distinguished the prior art and obtained their patent because they were able to identify this dissolving function.

[00:10:50] Speaker 00:
I do want to step back and also address what the infringement theories were at trial.

[00:10:56] Speaker 00:
Silex had two theories at trial. The first was that my client's product, which contains allele alcohol, allele alcohol is equivalent to the claimed dipropylene glycol. There was no dispute as to literal infringement my client designed around.

[00:11:13] Speaker 00:
So Silex's theory at trial was the allele alcohol was equivalent to dipropylene glycol because it's an alcohol.

[00:11:24] Speaker 00:
The trial court rejected that theory and it rejected it with detailed fact findings that allele alcohol is a different molecular structure different physicochemical properties. It's hydrophobic, it's a surfactant, and it's actually a mixture of mono-alcohols, not the poly-alcohols that were claimed.

[00:11:47] Speaker 00:
Council had an extended argument on claim construction. Did I identify a single error in any of those fact findings which support vitiation? Vitiation was an independent basis for the court's decision, and this court can affirm solely on that basis. This separate question of dissolving agent does not involve the question of vitiation. The question of vitiation is, would finding of the alcohol equivalent to dipropylene glycol vitiate the poly alcohol and dipropylene glycol limitations?

[00:12:23] Speaker 03:
So would I be correct to say that the district court's construction required that the lidocaine be dissolved in the dissolving agent?

[00:12:34] Speaker 00:
That is correct, Your Honor.

[00:12:37] Speaker 00:
That is a separate question from vitiation because the limitation there is only dipropylene glycol. We never reached this separate question of whether or not the district court correctly construed the dissolving agent. until we get to Silex's second theory. So in our view, this court may affirm on vitiation alone. That ends the case.

[00:12:59] Speaker 00:
If the court were to reach Silex's separate theory, what the trial court called the co-solubilizer or the solubilizer theory, on that basis, the court also rejected their equivalence theory. Under that theory, Silex argued that the dipropylene glycol and isosteric acid in the claimed patch was equivalent to the isosteric acid and the allele alcohol in Aviva's patch.

[00:13:26] Speaker 00:
The district court specifically addressed that theory and rejected it. And it did so because at the essence of what was called a minutia, the prosecution history of this case, they claimed a patch. They claimed a patch with lidocaine, isosteric acid, and dipropylene glycol. The prior art had all of those elements, and the examiner rejected multiple times the claim patch, finding that Hanma, Takata, and Terahara all included those elements.

[00:13:59] Speaker 00:
So this patentee, Oishi, was compelled to not only describe its function of the dissolving agent, to dissolve in an organic acid and a poly alcohol, But they then had to distinguish that prior art to obtain the patent. And they made very clear statements that what they are claiming is a dissolving agent that dissolves lidocaine in only the organic acid and the poly alcohol. And they directed the examiner to the example in their patent where that dissolution occurs.

[00:14:31] Speaker 00:
Based on detailed findings of the prosecution history, the district court ultimately concluded The dissolving function is necessary. That is what distinguished this claimed invention from the prior art.

[00:14:46] Speaker 00:
With that, Your Honor, unless there are questions, I'd be happy to address the claim construction points raised by counsel.

[00:14:55] Speaker 00:
With respect to claim construction, I do want to start with the word dissolving. Counsel used that word dissolving in the conventional way. That's to break apart a solid.

[00:15:05] Speaker 00:
but their theory of claim construction takes the dissolving out of dissolving agent. So if we start with the claims themselves, the word dissolving is right there in the term dissolving agent. There's nothing to import. There's nothing to go find. The claims themselves describe the function of dissolving using the word dissolving.

[00:15:29] Speaker 00:
If we then turn to the written description to further evaluate that claim term, looking at the 174 patent in column two, we see the word dissolve, column two, line 43, and then the word continuous and reliable dissolution of lidocaine, lines 45 and 46.

[00:15:52] Speaker 00:
There the patent is using dissolution in the sense that council used it, that second function, to maintain dissolution in the patch.

[00:16:00] Speaker 00:
But then when we turn to the examples, example three, In column five, we see the word dissolution again in the context of the making of the patch and specifically the dissolving of the lidocaine. So column five, example three, line 43, refers to a dissolution mixer and dissolving certain ingredients. And then specifically, as they pointed the examiner to, a solution separately prepared by mixing the isosteric acid, lidocaine, and dipropylene glycol, followed by dissolution at 80 degrees Celsius.

[00:16:42] Speaker 00:
So we have in the written description both dissolution functions, one describing maintaining dissolution, the other the breaking apart of that solid lidocaine.

[00:16:54] Speaker 00:
And then finally, your honors, I'll just direct this court to the district court's extensive detailed findings about the prosecution history. None of those have been disputed. Instead, the briefing argued about what various prior art references mean, but there's not a single error that has been identified with respect to any fact finding by the district court with respect to any of the patents.

[00:17:24] Speaker 00:
And unless there are questions on that, I would like to simply turn to the clear and unmistakable disclaimer.

[00:17:33] Speaker 00:
So following the examiner's rejection, finding that Hanma and Takata had disclosed lidocaine, isosteric acid, and dipropylene glycol, as we set forth in the briefing at Appendix 6242, four separate times as the district court found.

[00:17:57] Speaker 00:
Oishi repeatedly and clearly distinguished their invention, quote, in the present invention, lidocaine is dissolved in an organic acid and a poly alcohol. They said that four times to distinguish Hanma because Hanma claimed dissolving a lidocaine salt in an alcohol solvent. So they had a big problem to overcome that the examiner presented to them and they were required to identify the dissolving function of their dissolving agent to distinguish those references.

[00:18:33] Speaker 00:
And then finally, Your Honors, I'd like to address the Tarahara distinction.

[00:18:39] Speaker 00:
Here we have at Appendix 6262, the examiner rejecting the claim patch based on Tarahara. And again, this prior art had all of the components in Oishi's claim patch, isosteric acid, dipropylene glycol, and lidocaine.

[00:18:59] Speaker 00:
It was directly on point. And to distinguish that, Oishi was required to narrow its claims to consisting of, so limit its dissolving agent to a two-component dissolving agent.

[00:19:15] Speaker 00:
And then also, and I'll find the appendix site here, as I mentioned earlier, Oishi directed the examiner at Appendix 6295 to Example 3.

[00:19:28] Speaker 00:
where Oishi explained the support for the narrowing to consisting of can be found in example three. And then they directed the examiner to the dissolving function using the dissolving agent to dissolve the lidocaine.

[00:19:44] Speaker 00:
And then to, as the district court correctly found, clearly and unmistakably at Appendix 6297, Oishi stated, quote, claim one has been amended to provide that the dissolving agent consists only of an organic acid and a polyalcohol. This is not taught in Tarahara. In fact, Tarahara uses toluene in all of its examples to solubilize the plaster. So time after time, Oishi was compelled to distinguish the prior art based on its dissolving function, and that's exactly what the district court concluded, and there have been no errors presented to this court with respect to any of those findings.

[00:20:28] Speaker 03:
Did...

[00:20:30] Speaker 03:
Did Silex propose an alternative construction to the court?

[00:20:35] Speaker 00:
They did.

[00:20:36] Speaker 03:
They did not?

[00:20:39] Speaker 00:
Silex did propose an alternative construction at trial, and it's the construction very similar to what was presented here today.

[00:20:48] Speaker 00:
And on that point, Your Honor, I will close with what I started with. The question of vitiation is only a question of that dipropylene glycol limitation. We never reach the question of how do we construe a dissolving agent, how clear and unmistakable is that disclaimer, because vitiation alone is supported by fact findings by the trial court that have not been challenged.

[00:21:13] Speaker 03:
Okay.

[00:21:13] Speaker 00:
Thank you.

[00:21:15] Speaker 03:
Thank you.

[00:21:23] Speaker 03:
Mr. Davies, you had a little over five minutes left of rebuttal, if you need that much.

[00:21:29] Speaker 01:
Thank you, Your Honor. Your Honor, I'd like to start with counsel's reference to the use of the term dissolution in the specification. Counsel acknowledged... that at column two, lines 40 to 43, which is the passage I referenced, that indeed does refer to the function of the dissolving agent in the patch to maintain lidocaine dissolved in the patch. He then pointed to another meaning of the term dissolution, but he pointed to a portion of the spec that is part of the manufacturing step in those examples.

[00:22:03] Speaker 01:
And again, that is part of the example that we did not claim. So the use of it in the manufacturing step is not relevant to the product claims, to the apparatus claims that we have before us. With respect to vitiation, this court cannot affirm...

[00:22:24] Speaker 01:
I'm sorry, Judge Hughes, I missed the first part of what you said.

[00:22:26] Speaker 02:
Do the manufacturing claims not produce the product that's claimed?

[00:22:30] Speaker 01:
There are no manufacturing claims in the patent or that are asserted in this case. The patent in the specification describes... There are manufacturing things in the specification. There are, Your Honor. There are various methods that are described in the specification.

[00:22:42] Speaker 02:
Are those used to produce the claim products?

[00:22:46] Speaker 01:
They are examples of ways to make the accused products, Your Honor, yes.

[00:22:49] Speaker 02:
Are there other examples that don't use those methods?

[00:22:55] Speaker 01:
All the examples in the patent use what is called a hot melt method. Again, that's one type of manufacturing method that could be used. And again, the patent says expressly that the patches can be made by any conventional method. And I can pull that slide up again, but I address that.

[00:23:13] Speaker 02:
Do any of those conventional methods not use a dissolving agent to dissolve the lidocaine into the patch?

[00:23:21] Speaker 01:
Certainly, Your Honor. You could use something else to dissolve the lidocaine.

[00:23:24] Speaker 02:
Where does it say that in the patent?

[00:23:28] Speaker 01:
Where does it say that you could use something other than the dissolving agent to dissolve them? It says it could be used by any conventional method. For example, you could have a situation... Every method you have uses the dissolving agent. I'm sorry, Your Honor.

[00:23:40] Speaker 02:
Every specific method you describe in the specification uses a dissolving agent.

[00:23:45] Speaker 01:
In the examples, in the specification, that is correct. They use the dissolving agent to dissolve in that method. But again, that's an example method, and we do not believe that that is sufficient to read that express manufacturing limitation into a claim which doesn't otherwise contain any limitations like that.

[00:24:06] Speaker 01:
Turning back to vitiation again, the court cannot affirm on vitiation alone.

[00:24:10] Speaker 02:
I mean, if we disagree with you on the claim construction, we don't have to reach any of these other arguments about vitiation, do we?

[00:24:19] Speaker 01:
Your Honor, we agree that this case rises or falls on the claim construction issue, and that's why we believe that if you adopt our claim construction, that it falls in terms of all the other issues.

[00:24:28] Speaker 02:
And if we agree with the district court in claim construction, it's an affirm.

[00:24:32] Speaker 01:
We agree with that, Your Honor, yes.

[00:24:34] Speaker 02:
I appreciate the candor.

[00:24:35] Speaker 01:
Yes.

[00:24:37] Speaker 01:
With respect to vitiation, you cannot affirm on vitiation alone. If you look at the court's opinion with respect to vitiation, and that's at paragraph 176 of the order, and at 176 of the order... Sorry. Sorry.

[00:25:06] Speaker 01:
The court states, in light of the facts found by the court in this case, finding a mono-alcohol to be equivalent to the specifically claimed poly-alcohol would vitiate the poly-alcohol limitation and render it meaningless. And then if you looked at the facts that appear, the findings that appear before that, paragraphs 164 and 165, the court states, Aveva's oleal alcohol component of mono-alcohol is substantially different than the claimed poly-alcohol. And then 165, AVEVA's oleal alcohol component does not provide substantially the same function way result. So what the court is doing here is it is relying on an insubstantial differences test, a function way result test, and in order to conduct that, it must have applied its claim construction.

[00:25:46] Speaker 01:
And that's why you cannot affirm on vitiation alone because the – Poly alcohol limitation and the dipropylene glycol limitation that are the subjects of the equivalent analysis are part of the dissolving agent and their function can only be understood in the proper construction of that dissolving agent.

[00:26:09] Speaker 01:
If the court has no further questions.

[00:26:12] Speaker 03:
No, we thank you for your arguments. We thank all the parties for your arguments this morning. We'll take this case under submission.