[00:00:02] Speaker 01:
Thank you, Judge Friedland.

[00:00:03] Speaker 01:
May it please the court.

[00:00:04] Speaker 01:
I'm Thijinder Singh for the appellant.

[00:00:07] Speaker 01:
I'm going to try to hang on to four minutes for rebuttal if I can.

[00:00:11] Speaker 01:
Under this court's binding precedents, as well as the plain text of the False Claims Act

[00:00:15] Speaker 01:
the public disclosure bar does not compel dismissal of this case.

[00:00:19] Speaker 01:
I'll start with this court's precedence, most significantly its very recent decision in Silbershire versus Valiant Pharmaceuticals.

[00:00:26] Speaker 01:
That case is indistinguishable from this one.

[00:00:29] Speaker 01:
It involved the same plaintiff alleging a similar theory of fraud and the identical theory of public disclosure.

[00:00:35] Speaker 01:
That is, that contradictory statements scattered across multiple patent prosecution dockets gave rise to a triggering public disclosure that compelled dismissal.

[00:00:44] Speaker 01:
The court in Valiant held that the answer was no, that actually when you have facially innocuous statements in different patent prosecution dockets and a plaintiff supplements those disclosures with his own analysis and knowledge, that the fraud is not disclosed and the public disclosure bar isn't triggered.

[00:01:01] Speaker 04:
Well, so if the cases are identical, why didn't you make the substantially not the same argument in this case?

[00:01:08] Speaker 01:
Your Honor, we did make the argument in this case.

[00:01:10] Speaker 01:
It's true that in 2019, when the first motion to dismiss was being argued, we did not advance this argument.

[00:01:18] Speaker 01:
But subsequent to that, both in the appeal from that decision, which we won, then from in the subsequent remands, we have advanced this argument.

[00:01:29] Speaker 01:
We have advanced it three times, including below in this case and in this appeal.

[00:01:34] Speaker 01:
And of course, the valiant decision was only

[00:01:37] Speaker 01:
decided several months ago after the notice of appeal in this case.

[00:01:40] Speaker 04:
Yeah, but it didn't change the law.

[00:01:41] Speaker 04:
It was just an interpretation of the same statute, right?

[00:01:44] Speaker 01:
Your Honor, I think that what's important to recognize about valiant is I think it did substantially clarify how the law works in this area.

[00:01:52] Speaker 01:
Because there's an ambiguous term in the statute, which is, what is a transaction?

[00:01:58] Speaker 01:
What does it mean for a transaction to be publicly disclosed?

[00:02:01] Speaker 01:
And courts, including this court in the Metesky case, have kind of wrestled with that a bit.

[00:02:06] Speaker 01:
And what we are grappling with is the question of, look, I will admit that the historic facts about what the defendants did were in these materials.

[00:02:16] Speaker 01:
That is not something we're denying.

[00:02:19] Speaker 01:
However, that information itself is basically raw clay.

[00:02:25] Speaker 01:
in the classic formulation, this X plus Y equals Z formulation of when a public disclosure occurs, what we have here is not really Y. What we have is like X plus Q, where Q is stuff that an expert could look at and infer Y and then from there combine with X to then infer Z. And so when we did this before, it was really unclear how specific the disclosures had to be

[00:02:52] Speaker 01:
in order to trigger the public disclosure bar.

[00:02:54] Speaker 01:
And so we thought our argument lived better under the original source analysis.

[00:02:59] Speaker 01:
But Valiant clarifies that it really works under substantially the same analysis under this court's precedence.

[00:03:05] Speaker 01:
And so we've advanced the argument multiple times because we agree with it.

[00:03:10] Speaker 04:
But what really did you add?

[00:03:11] Speaker 04:
I mean, your client found, in one case, the patent said no incident.

[00:03:16] Speaker 04:
And then in the next case, he found that it said little incident.

[00:03:20] Speaker 04:
that didn't take rocket science.

[00:03:22] Speaker 01:
So, Your Honor, I disagree.

[00:03:23] Speaker 01:
I think the way you're describing it requires a lot of hindsight bias, I guess is the way I would describe it.

[00:03:31] Speaker 01:
That is to say, once my client laid it bare,

[00:03:34] Speaker 01:
it seems to look more obvious.

[00:03:36] Speaker 01:
But until that happens.

[00:03:38] Speaker 01:
That's one word.

[00:03:39] Speaker 01:
But Your Honor, it's not even clear that these documents are going to be relevant to each other.

[00:03:43] Speaker 01:
When we talk about patent prosecution dockets, there are thousands and thousands of them, each containing thousands and thousands of pages.

[00:03:51] Speaker 01:
To know where to look, what to look for, is not an easy thing.

[00:03:56] Speaker 01:
Even to see that the summary results of the ME 110 study and the C 106 study over here

[00:04:02] Speaker 01:
are actually describing the same study that's over there requires a bit of expertise because they're not called out quite so specifically.

[00:04:10] Speaker 01:
And I would just add that the allegations about the WENT patents are only one part of this case.

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Separate from that, there's the allegations about the 009 patent.

[00:04:20] Speaker 01:
Separate from that, there are allegations about how all of this is then used downstream.

[00:04:24] Speaker 01:
to actually cause overcharging to the government.

[00:04:26] Speaker 01:
And all of those are additional steps that you don't find in any of the public disclosures in the patent files.

[00:04:33] Speaker 01:
And so I think that there is a lot of work being done and a lot of analysis being done.

[00:04:37] Speaker 01:
If the question is what do you add, the principal source of evidence I would point you to

[00:04:42] Speaker 01:
is this statement from the state of California in this case.

[00:04:46] Speaker 01:
We block quoted it in our opening brief where they say, we are not conducting these investigations.

[00:04:51] Speaker 01:
We do not have the resources or expertise to do so.

[00:04:54] Speaker 01:
We welcome the efforts of relators like Mr. Silvershire to do exactly this.

[00:04:59] Speaker 01:
I think that statement speaks volumes because you are hearing there from people who are responsible for fraud enforcement that this is not the type of thing they can do on their own.

[00:05:09] Speaker 01:
And so when you ask the question that I think

[00:05:11] Speaker 01:
at the heart of the public disclosure bar.

[00:05:13] Speaker 01:
Is this a parasitic, opportunistic relator who's just trying to get a piece without adding any value to the government's enforcement efforts?

[00:05:21] Speaker 01:
The answer has to be an emphatic no in cases like this one.

[00:05:25] Speaker 01:
And I would also say just precedent-wise, it's quite telling that in both the Valiant case, this court found that that was effectively true

[00:05:32] Speaker 01:
And in the only other case my client has brought, which is currently pending in the District of New Jersey, the public disclosure defense was rejected.

[00:05:40] Speaker 01:
The case is now deep into discovery.

[00:05:42] Speaker 02:
So I'd like to go back to Judge Bumate's, I think, original question.

[00:05:45] Speaker 02:
So in this case, you basically waived the subsubstantially similar issue in the first go around in the district court, and you waived it again on appeal.

[00:05:56] Speaker 01:
Not on appeal.

[00:05:56] Speaker 02:
But you answered a question on appeal saying, no, that's not an issue.

[00:05:59] Speaker 01:
Not on appeal to your honor, no.

[00:06:01] Speaker 01:
So in the appeal, I just want to be clear what happened in the first go around.

[00:06:05] Speaker 02:
In this case?

[00:06:06] Speaker 01:
Yes, in this case.

[00:06:07] Speaker 01:
So the first time the question was asked, the way Judge Spiro asked the question was, the fraud on the PTO, is that all contained in the patent files?

[00:06:16] Speaker 01:
And the concession was, the facts that we're relying on to infer fraud on the PTO are in the patent files.

[00:06:22] Speaker 01:
That was the concession.

[00:06:24] Speaker 01:
On appeal, we made the argument as an alternative ground for affirmance, because we won in the district court the first time.

[00:06:30] Speaker 01:
And so when answering the appeal, we made the argument that actually substantially the same transactions were not disclosed.

[00:06:35] Speaker 02:
What's the difference between the way you answered the question before Judge Spiro and the way you're answering it now?

[00:06:41] Speaker 01:
Yeah.

[00:06:41] Speaker 01:
So I think two things.

[00:06:43] Speaker 01:
The way we answered it before Judge Spiro's, we admitted that the relevant historical facts from which you infer fraud on the PTO are in the files.

[00:06:50] Speaker 01:
And I'm not actually saying anything different about that.

[00:06:54] Speaker 01:
What I am saying is that valiant shows that that alone is not sufficient to show that substantially the same transactions.

[00:07:01] Speaker 02:
So your argument isn't that there's a waiver that we should overlook.

[00:07:03] Speaker 02:
Your argument is that there wasn't any waiver to point period.

[00:07:07] Speaker 01:
I think what I'm saying is that the degree to which we've sort of waived everything is overstated.

[00:07:11] Speaker 01:
What we said was the fraud on the PTO is disclosed.

[00:07:14] Speaker 01:
We didn't say all the false claim stuff is also publicly disclosed.

[00:07:18] Speaker 01:
We never said that.

[00:07:19] Speaker 01:
And so in the original appeal, we emphasized that point.

[00:07:21] Speaker 01:
Then on remand, we said, look, you know,

[00:07:24] Speaker 01:
Substantially, the same transactions are not disclosed.

[00:07:27] Speaker 01:
And then Valiant makes it quite clear that even our original concession was ill-advised.

[00:07:33] Speaker 01:
We should not have done that.

[00:07:34] Speaker 04:
Do you have a record site for when, off the remand, where you retracted essentially the substantial similar?

[00:07:42] Speaker 01:
I can find the citation in the briefing.

[00:07:44] Speaker 01:
I don't have it in my head.

[00:07:45] Speaker 01:
But I do know we have a subject heading in the motion papers that says substantially the same is on our side.

[00:07:54] Speaker 01:
And of course, we made the argument on appeal that this court did not reach it because it deemed it waived in the district court.

[00:08:01] Speaker 01:
But I think that was an overstatement of the waiver.

[00:08:04] Speaker 01:
In other words, what we conceded was fraud on the PTO.

[00:08:08] Speaker 01:
Those facts are there.

[00:08:10] Speaker 04:
Does it become law in the case?

[00:08:11] Speaker 04:
if you waived it initially?

[00:08:14] Speaker 01:
Perhaps, but even if it does, law of the case is not a limitation on this court's power.

[00:08:18] Speaker 01:
We have identified multiple reasons why the court should reach this argument, even if it's law of the case, even if you take our concession to be a broad concession at face value in 2019.

[00:08:27] Speaker 01:
The intervening changes in the law are one factor that I think is very important.

[00:08:31] Speaker 01:
The fact that this is a pure question of law, the fact that the other side has had multiple chances to brief the argument fully,

[00:08:38] Speaker 01:
The fact that this court's presidential decisions, including Patron and Brown versus Arizona, strongly say that you can reach arguments, even ones that have been affirmatively disavowed.

[00:08:47] Speaker 01:
And then perhaps most importantly, it's not only our interests that are at stake here.

[00:08:52] Speaker 01:
If we are right and the district court held that we do state a claim on the merits of the False Claims Act, these folks took billions of dollars from the government and Medicare beneficiaries that they shouldn't have been taking.

[00:09:04] Speaker 01:
And if that's true, then the public interest strongly favors reaching this argument and deciding it in our favor.

[00:09:10] Speaker 01:
Because I don't think anyone has a good argument that valiant is somehow distinguishable.

[00:09:15] Speaker 01:
Really, the only thing holding us back from just ruling in our favor on that ground, I think, is this waiver argument, which I think we should be able to get past in the unusual circumstances of this case.

[00:09:26] Speaker 06:
So if we were to agree with you and you could get past this bar and get to the merits, we still have to figure out if it states a claim, right?

[00:09:33] Speaker 06:
tell us that it states a claim just to get past this threshold.

[00:09:36] Speaker 06:
That's correct, Your Honor.

[00:09:37] Speaker 06:
And so can you tell me what you think your best argument is for Cienter against Allergan on the WENT patents?

[00:09:47] Speaker 01:
Yes, Your Honor.

[00:09:48] Speaker 01:
So the WENT patents were obtained by Ademus, but then they were licensed to Allergan's predecessor in Interest Forest.

[00:09:55] Speaker 01:
And then Allergan was the one also asserting those patents against generic competitors.

[00:10:00] Speaker 01:
And our argument is that the fraudulent scheme encompasses not only the obtaining of the patents, but also their subsequent weaponization against generic competition for the purpose of overcharging the government.

[00:10:10] Speaker 01:
Allergan, of course, is one of the entities getting a lot of this money from the government.

[00:10:14] Speaker 06:
But Allergan comes into the scene once the patent is granted.

[00:10:17] Speaker 06:
Why can't they just assume it was a valid patent?

[00:10:20] Speaker 01:
Because that is not how patent law works, Your Honor.

[00:10:22] Speaker 01:
So we cited a case, the N. Ray Rembrandt Technologies case, which specifically stands, Rembrandt was an IP investor.

[00:10:29] Speaker 01:
So they took patents that were issued, they would invest in them and use them to bring cases, infringement cases.

[00:10:37] Speaker 01:
And they were held liable for huge sanctions because their patents that they got were invalid and they should have known it.

[00:10:47] Speaker 01:
In the world of patent law, if you were... That was no fraud case, right?

[00:10:50] Speaker 01:
That's correct your honor.

[00:10:51] Speaker 01:
It's not a fraud case.

[00:10:52] Speaker 04:
This is different.

[00:10:53] Speaker 01:
It's a little heightened leading standard and all those I would actually say with fraud so I would actually say that it's If anything this goes in our favor because the c-inter standard under the false claims act encompasses things like recklessness Whereas the standard for the inequitable conduct which had to be proved in the Rembrandt case is like specific intent

[00:11:12] Speaker 01:
And so I think when you can be held vicariously liable for that, it's not far from safe.

[00:11:17] Speaker 04:
The argument is that they had a duty to inspect the prior patents, and then by failing to do that, they've recklessly committed a false claim?

[00:11:26] Speaker 01:
Well, that could be true, but our actual argument is that they knew.

[00:11:29] Speaker 01:
That is to say, our actual argument is that

[00:11:31] Speaker 01:
it would have been apparent to a company in Allergan's position that these patents were not valid and that they were asserting them simply to delay generic competition and not to pursue any valid interest under the patent laws.

[00:11:45] Speaker 06:
So there's so much litigation about brands and generics delaying generic entry.

[00:11:51] Speaker 06:
How is there no False Claims Act case that's been litigated to the appellate courts about this issue?

[00:11:55] Speaker 06:
I mean, is there some problem?

[00:11:56] Speaker 06:
They're saying it's too attenuated.

[00:11:58] Speaker 06:
What is your response to why there aren't more of these cases?

[00:12:01] Speaker 01:
So I think the short answer is that because they're not easy to bring.

[00:12:07] Speaker 01:
You're right that there's a lot of litigation about brands and generics, but I wanna home in on what we think is the key issue here.

[00:12:12] Speaker 01:
This is not just a case, it's not like, in the bad old days of securities litigation, it used to be anytime the stock dropped, there would be a lawsuit, right?

[00:12:20] Speaker 01:
Those cases are terrible.

[00:12:22] Speaker 01:
The analogy in this case would be anytime a patent is deemed invalid, there's a false claims act suit.

[00:12:28] Speaker 01:
No, we emphatically say no.

[00:12:30] Speaker 01:
So one thing that we haven't talked about that much in this case is that although my client has brought three cases, he's investigated dozens and dozens and dozens and decided most of them

[00:12:42] Speaker 01:
are meritless.

[00:12:43] Speaker 01:
And that's because in many, many cases, patents will be deemed invalid.

[00:12:47] Speaker 01:
But the patent holder was proceeding in good faith.

[00:12:50] Speaker 01:
They disclosed the relevant information.

[00:12:51] Speaker 01:
They didn't do anything fraudulent.

[00:12:53] Speaker 01:
These are the exceptional cases where you have not just invalid patents, but a fraud to get them and then to weaponize them.

[00:13:01] Speaker 04:
Actually, I don't know.

[00:13:02] Speaker 04:
Are the patents here, were they invalidated?

[00:13:04] Speaker 01:
So the went patents were invalidated.

[00:13:07] Speaker 01:
That decision was affirmed on appeal in February of 2018.

[00:13:10] Speaker 04:
Because of the fraud that you allege here?

[00:13:12] Speaker 01:
No, on separate grounds, Your Honor.

[00:13:15] Speaker 01:
So the thing is you don't reach fraud questions often when you're getting to invalidity.

[00:13:21] Speaker 01:
There are often grounds short of fraud.

[00:13:23] Speaker 01:
that will suffice to establish invalidity.

[00:13:25] Speaker 01:
And so if you're like a generic manufacturer trying to invalidate a patent or you're going through the PTAB or whatever, you're generally not going to try to bite off more than you need to chew.

[00:13:35] Speaker 01:
So we don't think it's disparaging of our claims that those weren't the grounds.

[00:13:39] Speaker 04:
What about the other one, the 99, is that what you call the 99 patent?

[00:13:42] Speaker 01:
The 009 patent.

[00:13:43] Speaker 01:
So that patent has a slightly different history.

[00:13:46] Speaker 01:
That's still there, but it doesn't apply to all of the generics.

[00:13:50] Speaker 01:
And so it blocks some of the generics and not others.

[00:13:55] Speaker 01:
So that has a slightly different story.

[00:13:58] Speaker 04:
And I guess how would we presume that this really was a fraud if that patent is still valid?

[00:14:03] Speaker 04:
So that when everything came to light and you use it of being a fraud?

[00:14:06] Speaker 01:
Yeah, we have explained why it's invalid.

[00:14:08] Speaker 01:
That is that the 553 patent clearly anticipates the only limitation, the once daily limitation, in the 009 patent.

[00:14:15] Speaker 01:
And you can just evaluate that allegation on its face.

[00:14:18] Speaker 01:
I don't think you need to look to any external source to tell you whether we have a valid argument there or not.

[00:14:24] Speaker 01:
I see that I've run quite a bit over the time that I want to, as I do want to answer any questions.

[00:14:29] Speaker 06:
I'll give you a couple extra minutes for rebuttal since we took over.

[00:14:32] Speaker 06:
Thank you.

[00:14:44] Speaker 05:
Good morning, Your Honors, and may it please the Court.

[00:14:46] Speaker 05:
Erin Murphy on behalf of the Allergan defendants.

[00:14:50] Speaker 05:
This court has long held that a relator who merely uses his or her unique experience or training to conclude that the material elements already in the public domain constitute a false claim does not qualify as an original source.

[00:15:03] Speaker 05:
That suffices to resolve this case, because there's no dispute here that Mr. Silberscher did not provide any historical facts beyond what was already in the public record.

[00:15:15] Speaker 05:
And that's the ground on which the district court ruled below.

[00:15:17] Speaker 05:
And by his own telling here, he has simply used the kind of experience that doesn't qualify someone as an original source.

[00:15:24] Speaker 06:
Since the most recent amendment to the statute, though, what is your case that says that expertise is not enough to add?

[00:15:30] Speaker 05:
This court has held that in a couple of unpublished opinions, the Hastings and the Rowe case that we cite.

[00:15:35] Speaker 05:
It's been held by a couple of other circuits.

[00:15:37] Speaker 05:
And I think it's correct, because there's just not any material change in the statutory language when it comes to this concept.

[00:15:44] Speaker 05:
I think if you look at the text of the statute, it's really using knowledge and information interchangeably.

[00:15:50] Speaker 05:
And it continues to require that to be knowledge that's independent of and knowledge and information that materially adds to what's in the public record.

[00:15:58] Speaker 06:
So what was the purpose for the amendment then?

[00:16:01] Speaker 05:
Oh, the amendment changed.

[00:16:02] Speaker 05:
It got rid of the requirement that you had to have direct knowledge.

[00:16:05] Speaker 05:
So the statute used to say it had to be direct knowledge of the information.

[00:16:09] Speaker 05:
So somebody who got it secondhand couldn't qualify as an original source.

[00:16:13] Speaker 05:
And Congress got rid of that.

[00:16:14] Speaker 05:
And it added, at the same time, the materially adds to requirement that wasn't in the original source before.

[00:16:21] Speaker 05:
So in one respect, they broadened it.

[00:16:24] Speaker 05:
And in another respect, they actually narrowed it a little.

[00:16:27] Speaker 05:
And I think the materially adds to language is really best understood as reflecting the case law that was out there that says,

[00:16:34] Speaker 05:
you materially add by having materially different facts, not just by bringing expertise to bear on facts that are already in the public record.

[00:16:42] Speaker 06:
So if there is a bridge or a monument that the government is building, say the federal government wants to build a monument, and they have a request for proposal.

[00:16:52] Speaker 06:
They set out how you're supposed to build this monument.

[00:16:55] Speaker 06:
It's public what those requirements are.

[00:16:57] Speaker 06:
The monument gets built.

[00:16:58] Speaker 06:
It's public.

[00:16:59] Speaker 06:
Everyone can see it.

[00:17:00] Speaker 06:
But some expert can look at it and say, those are cheaper materials, and they didn't build it right.

[00:17:05] Speaker 06:
It's all public, but some expert figures out this does not match.

[00:17:08] Speaker 06:
You're saying that that expert can't bring the case?

[00:17:10] Speaker 05:
Yeah, and that was the very clearly settled law of this circuit before the 2010 amendments.

[00:17:16] Speaker 05:
I mean, that is the square holding of A1 ambulance and many cases afterward, that if you are not bringing historical facts to bear but are instead just using your expertise, your background experience to look at the facts that are already there, you are not an original source.

[00:17:35] Speaker 05:
What he has to identify is some change in 2010 that abrogated that law.

[00:17:40] Speaker 05:
That was not just the law of this circuit.

[00:17:42] Speaker 05:
That was basically the uniform law of all the circuits that had looked at this question.

[00:17:46] Speaker 05:
And I just don't think there's anything that gets you there.

[00:17:48] Speaker 05:
The statute continues to use the same words, knowledge and information.

[00:17:52] Speaker 05:
And if anything, by adding this requirement that it has to be knowledge that materially adds to what's in the public record seems to be saying, we think the courts were getting it right.

[00:18:02] Speaker 05:
in saying you have to have something more than just some knowledge or some information.

[00:18:07] Speaker 05:
It has to be materially adding to what's already out there.

[00:18:10] Speaker 02:
So you only get to original source if the plaintiff can't, if it's substantially the same.

[00:18:19] Speaker 02:
So how do you deal with Mr. Singh's argument about waiver on that?

[00:18:22] Speaker 05:
Sure.

[00:18:22] Speaker 05:
First, it is absolutely waived.

[00:18:24] Speaker 05:
I would urge the court to look at the full exchange at page 131 of the excerpts of record.

[00:18:31] Speaker 05:
It's not just that he responded to the judge back then by saying, when asked point blank, is everything in the patent prosecution files, he said,

[00:18:40] Speaker 05:
Yes, we agree.

[00:18:42] Speaker 05:
But when he was actually asked, is there anything that's not in them, and he said no, and then said, we concede that everything's in them.

[00:18:48] Speaker 05:
But then the next question from the judge is, so he says, basically, is the only thing I now need to focus on these questions of, at the time, it was a debate about what is and is not covered by the public disclosure bar.

[00:19:02] Speaker 05:
So the judge didn't just say, I have a question for you about whether the fraud's out there, then said,

[00:19:08] Speaker 05:
what's left for me to decide.

[00:19:09] Speaker 05:
And he agreed that the questions that were left to decide did not include this question about substantially the same.

[00:19:16] Speaker 05:
So there's clearly waiver.

[00:19:17] Speaker 05:
And I had read his brief to agree there was a waiver.

[00:19:20] Speaker 04:
Do you agree that this is a purely legal question, because that's one of the exceptions to waiver?

[00:19:24] Speaker 04:
Or is there facts that need to be developed?

[00:19:26] Speaker 05:
I think the way the courts have described this question is its application of law to the factual allegations.

[00:19:32] Speaker 05:
So it's kind of a bit of a mixed

[00:19:33] Speaker 05:
Obviously, we're at the motion to dismiss stage, but it's not like a pure legal question in the sense of what the standard is.

[00:19:40] Speaker 05:
It's taking the standard and applying it to the factual allegations in this complaint.

[00:19:45] Speaker 05:
And I would say to the extent there's discretion to overlook a waiver, this just is like the very last case, I think, in which a court should do it.

[00:19:56] Speaker 05:
He cannot claim to not have anticipated the Valiant decision, because he's the relator in Valiant.

[00:20:01] Speaker 05:
He's the party who procured the decision.

[00:20:03] Speaker 05:
The two cases were brought the same time at the same year.

[00:20:07] Speaker 05:
He made an argument there that he chose to affirmatively concede in this case.

[00:20:11] Speaker 05:
And then, just to kind of make matters worse for him, when Valiant sought rehearing before this court, he defended against rehearing by saying this decision didn't affect any change in the law.

[00:20:23] Speaker 05:
This decision just took the law and applied it to the complex factual allegations

[00:20:28] Speaker 05:
in the Valiant case.

[00:20:29] Speaker 05:
And then for good measure, when there was a cert petition in Valiant, he told the Supreme Court, it's not just that I brought specialized expertise.

[00:20:36] Speaker 05:
The court concluded that I had facts to bear that were not in the public record.

[00:20:41] Speaker 05:
So he took a bunch of positions in Valiant that this was not some intervening change in the law.

[00:20:47] Speaker 05:
And so I don't think he gets a second bite at the apple here just because he won on an argument there that he chose not to press originally in this case.

[00:20:55] Speaker 05:
And it is an independent problem for him that this court did conclude in the last appeal that he waived this argument.

[00:21:02] Speaker 05:
So he's got a waiver.

[00:21:03] Speaker 05:
And we do have a law of the case and all of these things to overcome here.

[00:21:06] Speaker 05:
And I just don't think you get there.

[00:21:08] Speaker 06:
It just seems that Valiant, even if it is application of law to fact, it tells us how to apply the law to the facts in this type of case.

[00:21:14] Speaker 06:
And so it's hard to see how it didn't add something.

[00:21:17] Speaker 06:
Like, why did they publish if it's not adding something?

[00:21:20] Speaker 05:
I think, at most, it's just kind of how you apply it in the particular context.

[00:21:25] Speaker 05:
But the facts here and the facts there are not the same.

[00:21:28] Speaker 05:
Yes, he has the same ultimate theory that somebody committed fraud on the PTO and, by virtue of that, ended up submitting a false claim.

[00:21:38] Speaker 05:
But the theory of fraud on the PTO is not the same.

[00:21:42] Speaker 05:
You had different parties who had submitted the patent applications.

[00:21:46] Speaker 05:
You had to kind of tie all of that together through some studies that showed that these two seemingly different parties were related to each other.

[00:21:53] Speaker 05:
And if you look at the district court opinion in Valiant, the principal source that had tied all of that together was an IPR proceeding.

[00:22:00] Speaker 05:
And this court on the appeal reversed the district court on the conclusion that an IPR proceeding is covered by the public disclosure bar.

[00:22:08] Speaker 05:
So the documents that had really tied all of this together and laid out exactly the same theory were the one thing that this court held was not covered by the public disclosure bar.

[00:22:20] Speaker 05:
And so I think the best understanding, if you take the panel at face value in what it said, which is it found that he had facts to bring to bear on the case that were not part of the public record,

[00:22:31] Speaker 05:
That's my best explanation for what the court was thinking there.

[00:22:34] Speaker 05:
Because otherwise, I mean, if you look at what he's saying in his brief, he basically admits his argument is substantially the same.

[00:22:40] Speaker 05:
It's the same argument that he's making on original source, that any time you bring your expertise to bear, you get out of the public disclosure bar.

[00:22:48] Speaker 05:
And again, that would be at odds with a decade or two of this court's case law, as well as the case law of many other circuits that had addressed these issues.

[00:22:57] Speaker 05:
Unless you have anything else?

[00:22:58] Speaker 05:
Thank you very much.

[00:23:11] Speaker 00:
Good morning, Your Honors.

[00:23:12] Speaker 00:
Andrew Hoffman on behalf of Defendant Apalee's Adamas Pharma LLC and Adamas Pharmaceuticals Inc.

[00:23:17] Speaker 00:
May it please the court.

[00:23:19] Speaker 00:
I would like to pick up right where you just left off, Judge Friedland, and it really seems like we need to talk about the Valiant case.

[00:23:27] Speaker 00:
And Mr. Singh said that the cases are indistinguishable, they're identical.

[00:23:34] Speaker 00:
They're exactly the same and that Valiant necessarily dictates the result here that's an intervening controlling authority.

[00:23:40] Speaker 00:
That's actually not true.

[00:23:41] Speaker 00:
Our brief actually goes into great detail about why the two cases are not exactly the same on the facts.

[00:23:48] Speaker 00:
I'd like to address that.

[00:23:49] Speaker 00:
Mr. Silbisher's position is that Valiant stands for the idea that a Ketam complaint can survive the public disclosure bar even though it relies entirely on public facts because the whistleblower, the Ketam relator,

[00:24:04] Speaker 00:
brought his expertise to bear, and just pieced together the otherwise public information.

[00:24:09] Speaker 00:
That is not what Valiant says at all.

[00:24:13] Speaker 00:
What Valiant does is it applies to those complicated facts the established Miteski framework, x plus y equals z, to an unusually complex set of facts that are meaningfully different from the ones here.

[00:24:24] Speaker 00:
And Ms.

[00:24:25] Speaker 00:
Murphy got to this.

[00:24:26] Speaker 00:
And while I agree with everything she said about waiver, this issue's waived.

[00:24:29] Speaker 00:
But if you're going to talk about the facts,

[00:24:32] Speaker 00:
What's critically important in Valiant is that it's a multi-party scheme to defraud the PTO.

[00:24:38] Speaker 00:
There are two different companies.

[00:24:40] Speaker 00:
One who made a false statement to the PTO, allegedly.

[00:24:44] Speaker 00:
That's Dr. Falk Pharma.

[00:24:46] Speaker 00:
Still to this day, not a part of Valiant.

[00:24:48] Speaker 00:
There's a second company in a separate patent application called Salix that allegedly presents the true facts.

[00:24:54] Speaker 00:
That's now part of Valiant.

[00:24:57] Speaker 00:
And what the Valiant opinion says

[00:25:00] Speaker 00:
It never uses the word expertise once.

[00:25:02] Speaker 00:
It never says talent.

[00:25:03] Speaker 00:
It never says insights.

[00:25:05] Speaker 00:
It says facts seven times.

[00:25:07] Speaker 00:
It says Mr. Silvershire provided missing critical facts.

[00:25:10] Speaker 00:
I'd really encourage the court to go read pages 1167 and 1168 of the revised Valiant opinion, the operative Valiant opinion, because it talks about facts seven different times.

[00:25:22] Speaker 00:
And the facts that he provided went to Sienta.

[00:25:24] Speaker 00:
And those facts are, yeah, you have these seemingly two independent companies that

[00:25:30] Speaker 00:
made inconsistent statements to the PTO.

[00:25:32] Speaker 00:
Well, we know that Dr. Falk was speaking falsely, was giving knowingly false information, because Dr. Falk was working with Salix.

[00:25:40] Speaker 00:
They had the same personnel, the same outside counsel who were working on the patent applications, prosecuting the patents.

[00:25:46] Speaker 00:
They were both financially interested in building up this Otterbeck patent.

[00:25:50] Speaker 04:
Sorry.

[00:25:51] Speaker 04:
Can I talk about the text of the publication disclosure bar?

[00:25:56] Speaker 04:
I think it is somewhat difficult to read.

[00:25:58] Speaker 04:
I mean, it seems like, is your argument that in B2, that knowledge is the same as the information to the government at the end of the sentence?

[00:26:11] Speaker 00:
Judge Bumate, yes.

[00:26:12] Speaker 00:
That is our position that when the statute says that the original source must provide the information to the government, that use of the definite article is important.

[00:26:24] Speaker 00:
And it's referring back to the knowledge.

[00:26:26] Speaker 04:
Because if it didn't have that last clause about providing the information to the government, I think it's quite ambiguous what knowledge can mean.

[00:26:33] Speaker 04:
Would you agree with that?

[00:26:36] Speaker 00:
I agree that knowledge plucked out of its context in the original source rule is perhaps a word that could encompass something like expertise.

[00:26:43] Speaker 04:
That's the theory.

[00:26:44] Speaker 04:
Is there anything else besides the information to the government that really cabins what the word knowledge means in the first phrase?

[00:26:52] Speaker 00:
I think a few things.

[00:26:53] Speaker 00:
One is also that it doesn't just say the knowledge.

[00:26:56] Speaker 00:
It says, provide the knowledge.

[00:26:58] Speaker 00:
Provide the information.

[00:26:59] Speaker 00:
Pardon me.

[00:27:00] Speaker 00:
Provide the information.

[00:27:02] Speaker 04:
Why don't we just apply the simple canon that if Congress uses different words in the same statute, they mean something different?

[00:27:10] Speaker 00:
The reason is the statute that was inherited here, the 2010 amendments,

[00:27:15] Speaker 00:
was a modest adjustment to a statute that existed since 1986.

[00:27:21] Speaker 00:
And every single court to reach this question in every circuit, including this one, looked at the use of the words knowledge and information in this statute and held that it referred to historical factual knowledge, historical factual information.

[00:27:34] Speaker 04:
You're using the soil.

[00:27:36] Speaker 04:
The statute brings the soil with it.

[00:27:38] Speaker 00:
The fact that Congress legislates that background.

[00:27:41] Speaker 00:
Congress legislates knowing

[00:27:43] Speaker 00:
how these words have been interpreted by the courts.

[00:27:44] Speaker 00:
And this wasn't like one or two cases.

[00:27:47] Speaker 00:
We're talking about decades of precedents that talked about this exact question.

[00:27:51] Speaker 00:
And I would also say that every circuit to reach the question in the intervening years since 2010 has also landed on exactly this interpretation and rejected the idea that your subject matter expertise can make you an original source.

[00:28:04] Speaker 00:
We submitted a Rule 28j letter about a recent circuit decision from the 10th Circuit rejecting Mr. Silbisher's argument.

[00:28:10] Speaker 00:
Different case.

[00:28:10] Speaker 00:
He's not the plaintiff there.

[00:28:12] Speaker 00:
rejecting the expertise argument.

[00:28:14] Speaker 00:
And even since that opinion came out in August of 2024, the 11th Circuit has joined the chorus.

[00:28:21] Speaker 00:
And we can submit another 28-J letter if it would be helpful.

[00:28:25] Speaker 00:
But it's the Jacobs v. JP Morgan case.

[00:28:28] Speaker 00:
at 113F41294, where they reject the notion that there, a key tamer later who is an expert in foreclosure law, it's another lawyer who reviewed some court documents, they rejected the idea that his legal expertise was enough to make him an original source.

[00:28:49] Speaker 04:
So you're saying we would be an outlier if we were to hold that sort of specialized expertise as knowledge or the information?

[00:28:58] Speaker 00:
You would not just be an outlier, you would be the only court to ever hold them.

[00:29:02] Speaker 00:
If you look at Mr. Silbertsch's brief, I think their leading case in the opposite direction is an unpublished trial court decision from Illinois State Court.

[00:29:13] Speaker 00:
on wildly different facts, and it's a different statute, Illinois state law.

[00:29:17] Speaker 00:
That's their leading case.

[00:29:18] Speaker 00:
We've got a mountain of precedent on our sides before and after 2010.

[00:29:21] Speaker 06:
I think when we went this way, you were talking about Valiant.

[00:29:26] Speaker 06:
And I think you were about to say what the facts were rather than the expertise in Valiant, because I'm not sure I see it.

[00:29:32] Speaker 06:
I mean, looking at I'm on 1168, and it seems like the court says,

[00:29:39] Speaker 06:
The critical fact necessary for Cienter is that Falk and Valiant took conflicting positions in their patent prosecutions.

[00:29:44] Speaker 06:
But why isn't that just evident?

[00:29:47] Speaker 00:
So it's not.

[00:29:48] Speaker 00:
So I think what's going on with the Valiant case, you'll notice in that sentence you just read, they refer to Falk and Valiant.

[00:29:57] Speaker 00:
That's actually the only place in that opinion where they separately identify two different companies and talk about Cienter.

[00:30:05] Speaker 00:
Every other place in that opinion refers to the companies collectively as valiant.

[00:30:10] Speaker 00:
I think that was an unfortunate choice by the valiant panel because it obscures more than it illuminates.

[00:30:15] Speaker 00:
I think they were doing that for the sake of simplicity.

[00:30:17] Speaker 00:
You can look at footnote one in the valiant opinion.

[00:30:19] Speaker 00:
The reality is you have two different companies and the facts that he brought to bear.

[00:30:25] Speaker 00:
The fact that two different companies brought two mutually inconsistent patent applications doesn't tell you anything about Santa.

[00:30:31] Speaker 00:
In context, if you look at,

[00:30:33] Speaker 00:
the Valiant decision.

[00:30:34] Speaker 00:
If you look at the record, we describe it in detail on our brief at pages 16 and 17.

[00:30:39] Speaker 00:
And if you read the Valiant opinion with the previously redacted, rescinded opinion.

[00:30:45] Speaker 06:
But you're saying we can't just look at the face of the Valiant opinion, it seems like.

[00:30:48] Speaker 06:
Because the face of the Valiant opinion seems to me to say, expertise is enough.

[00:30:52] Speaker 06:
Because I don't know how else to read that sentence.

[00:30:53] Speaker 00:
It doesn't use the word expertise anywhere.

[00:30:55] Speaker 06:
Well, it doesn't say.

[00:30:56] Speaker 06:
But I mean, what is the fact that's added other than understanding what these public documents mean?

[00:31:00] Speaker 00:
The fact that's added is that

[00:31:02] Speaker 00:
It's not spelled out as clearly as it could be because the valiant plan refers to these different companies all under the word valiant.

[00:31:10] Speaker 00:
But if you look at the, you have to put the two opinions side by side.

[00:31:13] Speaker 00:
They take out the language that Mr. Silvershire relies on in his principal brief.

[00:31:16] Speaker 00:
The facts are the facts that show, and you have to go into the record, and we cite to the record, Mr. Silvershire explained the reason that Dr. Falk's statement was not just false but knowingly false is because the same people, the same patent lawyers, the same outside counsel,

[00:31:30] Speaker 00:
We're also working on the Salix unrelated patent application, this other company's patent application.

[00:31:35] Speaker 02:
You're basically saying we can't take Valiant at face value.

[00:31:38] Speaker 02:
I'm saying you can take- I mean, the quote, the full quote that Judge Friedland read was, Silver Shore's allegations provide a critical fact necessary for C. Enter.

[00:31:47] Speaker 02:
Falk and Valiant took conflicting positions in their patent prosecutions of the two patents.

[00:31:51] Speaker 02:
Neither of these patent prosecutions or any other disclosure reveals that fact full stop, just comparing two public disclosures.

[00:31:56] Speaker 00:
But how is that relevant?

[00:31:58] Speaker 00:
How does that reveal C. Enter?

[00:32:00] Speaker 00:
Judge, how does that, respectfully, how does that show anything about CNTER that they took conflicting positions?

[00:32:06] Speaker 00:
What you have to show is that the party that made the false statement knew it was false.

[00:32:12] Speaker 00:
And that's what Silbersher adds.

[00:32:13] Speaker 00:
He explains, if you look at his complaint, he explains how we know Dr. Faulk, which is to this day not part of Valiant, knew the false statements.

[00:32:23] Speaker 00:
They knew their statements were false because they knew the truth because they and their patent lawyers, their outside counsel,

[00:32:28] Speaker 00:
worked on the Salix patent application.

[00:32:30] Speaker 06:
And that information was also public.

[00:32:34] Speaker 00:
Those are not public facts identified by the Valiant Court as public facts.

[00:32:38] Speaker 02:
It would be in the prosecution history, wouldn't it, who worked on it?

[00:32:42] Speaker 03:
The prosecution history is going to identify the lawyers.

[00:32:45] Speaker 03:
It's going to do all that.

[00:32:46] Speaker 03:
It's perfectly familiar with that.

[00:32:48] Speaker 03:
It may.

[00:32:48] Speaker 03:
Because I try patent cases.

[00:32:51] Speaker 00:
So then, of course, Your Honor.

[00:32:53] Speaker 00:
But the facts that are identified as publicly disclosed, the ones that were litigated as the public facts and valiant, doesn't say anything about those facts that were connecting Salix and Falk because they gloss over it by just labeling all of the companies valiant.

[00:33:08] Speaker 06:
Do you have any case that tells us that the way we should interpret our opinions is to read a whole bunch of other things?

[00:33:14] Speaker 00:
I don't, Your Honor.

[00:33:17] Speaker 06:
OK, I think we've taken you over your time.

[00:33:18] Speaker 06:
Thank you, counsel.

[00:33:21] Speaker 06:
Let's put three minutes on the clock for rebuttal, please.

[00:33:28] Speaker 01:
Thank you.

[00:33:29] Speaker 01:
I'd like to start where you just left off.

[00:33:31] Speaker 01:
I think page 1168 of the valiant opinion is very, very good for us.

[00:33:36] Speaker 01:
There, what the court says is that the essential fact is

[00:33:40] Speaker 01:
a factual allegation based on analysis of publicly disclosed other facts.

[00:33:45] Speaker 01:
And that's really what you have here.

[00:33:47] Speaker 01:
In that case, there was a declaration that said, wow, you can not take this without food.

[00:33:54] Speaker 01:
And another one said, oh, you can't take it with food.

[00:33:56] Speaker 01:
And it was the analysis of those two publicly disclosed pieces of information that allowed my client to say, aha,

[00:34:04] Speaker 01:
False statements are being made here in the prosecution of these patents, and then to go from there down the further analysis, getting you to how generics are excluded, how the government is overcharged.

[00:34:13] Speaker 01:
The same is happening here.

[00:34:15] Speaker 01:
Dr. Wen's first declaration makes representations in summary form about these studies.

[00:34:20] Speaker 01:
A later declaration, years later, in a totally different patent prosecution, says the actual results of the study.

[00:34:28] Speaker 01:
My client is the one.

[00:34:29] Speaker 01:
who is able to consider these sources, recognize what they mean, perform the analysis, allege the same fact necessary for C-Enter that Dr. Wendt made knowingly false statements the first time around, and explain why that's true, and so on.

[00:34:44] Speaker 01:
And so I value it as well.

[00:34:45] Speaker 06:
Can you speak to the language of the statute?

[00:34:46] Speaker 06:
What is your response to the questions about what the language of the statute means?

[00:34:50] Speaker 01:
Yeah.

[00:34:50] Speaker 01:
So I think it is quite clear that when Congress amended the statute, it was trying to bring in cases like this one.

[00:34:58] Speaker 01:
We have cited multiple sources from Senator Grassley kind of explaining this.

[00:35:02] Speaker 01:
He is the person who wrote the text that is in the statute, and it has been his position since essentially 1986 that

[00:35:09] Speaker 01:
People who are using their expertise to help the government are not parasites and opportunists.

[00:35:13] Speaker 01:
They are exactly who we want to recruit into the fight against fraud.

[00:35:17] Speaker 01:
They are honest citizens who are trying to make our country better.

[00:35:20] Speaker 01:
And we should not stop them from helping the government when they have valuable expertise to share.

[00:35:24] Speaker 01:
But what about the text?

[00:35:26] Speaker 01:
That's just one senator.

[00:35:28] Speaker 04:
I know an important senator who is in this field, but that's not what the text says.

[00:35:32] Speaker 01:
Oh, but I think the text is polluted.

[00:35:34] Speaker 01:
So the knowledge that is independent of and materially adds.

[00:35:38] Speaker 01:
The word knowledge is not qualified in any way.

[00:35:40] Speaker 01:
It's not factual knowledge.

[00:35:42] Speaker 01:
I agree.

[00:35:42] Speaker 01:
I think, Judge Boumete, if they wanted the information provided to the government to be the same as the knowledge, they wouldn't have used knowledge.

[00:35:48] Speaker 01:
They would have used information.

[00:35:50] Speaker 01:
They would have said the original source has to have information that is independent of and materialized.

[00:35:55] Speaker 01:
That's a very strong argument.

[00:35:56] Speaker 01:
It must provide the information.

[00:35:57] Speaker 04:
They've used different words.

[00:35:58] Speaker 04:
But what about the response that, well, Congress legislated and amended the statute in light of the judicial interpretations that all required some historical fact?

[00:36:08] Speaker 01:
Yeah, it's the opposite.

[00:36:10] Speaker 01:
I mean, so Congress was trying to change the rule of those decisions is our argument.

[00:36:15] Speaker 01:
When the Supreme Court has routinely interpreted a statute language one way and Congress uses the same language or consensus of circuit courts, then the strong inferences, they want to keep it the same.

[00:36:27] Speaker 01:
But they didn't keep it the same.

[00:36:29] Speaker 01:
They changed the language.

[00:36:30] Speaker 01:
And we know from Senator Grassley's comments repeatedly that the target of the changes was those decisions.

[00:36:36] Speaker 01:
I thought it was about indirect versus direct knowledge.

[00:36:39] Speaker 01:
So that is one of the changes they made, because that, of course, would have excluded these relators as well.

[00:36:44] Speaker 01:
But it is not the only change they made.

[00:36:46] Speaker 01:
The other change was it used to say direct and independent knowledge of the information on which the allegations are based.

[00:36:53] Speaker 01:
That qualification of the information on which the allegations were based is also removed.

[00:36:57] Speaker 01:
There's a subject matter limitation of the relevant knowledge.

[00:37:01] Speaker 01:
The subject matter limitation is gone.

[00:37:03] Speaker 01:
which broadens the scope of qualifying knowledge.

[00:37:05] Speaker 01:
It broadens it to things like patent law, science, materials used in monuments.

[00:37:11] Speaker 01:
There are any number of things that could be knowledge.

[00:37:13] Speaker 01:
Now, we are not, I want to be super clear about this.

[00:37:16] Speaker 01:
We are not saying kick open the door to any self-professed expert.

[00:37:20] Speaker 01:
There is an important requirement.

[00:37:22] Speaker 01:
The knowledge must materially add to the publicly disclosed transactions.

[00:37:27] Speaker 01:
And so this has to be.

[00:37:29] Speaker 04:
So how is that a limitation in any way?

[00:37:31] Speaker 04:
So a lawyer,

[00:37:33] Speaker 04:
adds knowledge whenever, aren't they using some knowledge there?

[00:37:38] Speaker 04:
If any lawyer tries to bring a claim, they're saying, well, I just used my legal skills.

[00:37:43] Speaker 01:
Yeah.

[00:37:43] Speaker 01:
But the question is, is that a material addition?

[00:37:46] Speaker 01:
Yeah.

[00:37:46] Speaker 01:
That, I think, is an inquiry that you would make in context of the False Claims Act.

[00:37:50] Speaker 01:
So for example, if what you have, I'll just give you a really easy example.

[00:37:54] Speaker 01:
Let's say there was, in Judge Friedland's example, let's say there's a New York Times article that says, new government monument uses cheap, degrading materials.

[00:38:03] Speaker 01:
And then what you have is a lawyer who says, aha, False Claims Act, and just brings a False Claims Act case based on that.

[00:38:09] Speaker 04:
He will say, well, using my knowledge of what False Claims Act are, that this seems like a fraud, and so therefore I added knowledge there.

[00:38:18] Speaker 01:
Yes, and you should hold in that case that they did not materially add.

[00:38:21] Speaker 01:
Why not?

[00:38:22] Speaker 01:
Because there is nothing in the lawyer's knowledge that is not the knowledge that most members of the public, and it's certainly everybody doing fraud.

[00:38:31] Speaker 04:
Not everyone knows what, like, the CNTER is and, like, how to establish the CNTER.

[00:38:35] Speaker 04:
I mean, why is that not legal?

[00:38:37] Speaker 04:
Why doesn't that materially add?

[00:38:38] Speaker 01:
Certainly everybody enforcing the False Claims Act inside the government does know.

[00:38:43] Speaker 01:
And that's- So that's the standard?

[00:38:46] Speaker 01:
government lawyers would know?

[00:38:48] Speaker 01:
Oh, absolutely.

[00:38:48] Speaker 01:
So Your Honor, if you look at the cases that they want to point you to, look at cases from the 10th Circuit, like Reed, for example, Rahimi from the Sixth Circuit, what they all say is, are you materially adding something to the person, the audience?

[00:39:01] Speaker 01:
And in this case, the audience is the government's fraud enforcement apparatus.

[00:39:05] Speaker 01:
And our statement from the state of California shows why we are materially adding in this case, because the government is not undertaking these sorts of reviews of patent prosecution dockets,

[00:39:16] Speaker 01:
It doesn't have the expertise, it doesn't have the resources to do that in its fraud enforcement apparatus.

[00:39:21] Speaker 01:
Quite the other story in the hypothetical about the monument or any of the other scary examples the other side wants to steer you toward.

[00:39:29] Speaker 01:
I would also say that even if I'm wrong about this,

[00:39:33] Speaker 01:
I think if you're, so you can avoid all of it by just ruling in our favor on the valiant point.

[00:39:39] Speaker 01:
You do not have to decide any original source questions to the extent you find that inquiry thorny or ambiguous after the amendments.

[00:39:47] Speaker 01:
You can avoid all of it by simply applying binding precedent from this court on indistinguishable facts that came out this year.

[00:39:55] Speaker 06:
Thank you, taking you over your time.

[00:39:57] Speaker 06:
Thank you both sides for the very helpful arguments this case has submitted.