[00:00:50] Speaker 04:
Our next case is Dacell Corporation versus Salonese International.

[00:00:54] Speaker 04:
2018-2130, Mr. Murphy.

[00:01:00] Speaker 04:
Morning.

[00:01:06] Speaker 01:
I'll get a cup of water first before I walk up.

[00:01:08] Speaker 04:
Well, that's important.

[00:01:14] Speaker 02:
You're a brave man.

[00:01:15] Speaker 02:
I never let water near my stuff.

[00:01:19] Speaker 01:
May it please the court.

[00:01:21] Speaker 01:
In our view, there's three issues I'd like to discuss today.

[00:01:24] Speaker 01:
The first one is a legal issue regarding anticipation.

[00:01:27] Speaker 01:
It's fully briefed.

[00:01:28] Speaker 01:
Second one is evidentiary or factual issues related to anticipation.

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And the third one is obviousness.

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And starting with the first issue, the issue is whether the specific subject matter in a prior art reference

[00:01:47] Speaker 01:
that's being relied on for anticipation must be disclosed and enabled.

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In this case, the specific predicted methyl acetate and water concentrations that are disclosed in the PAT reference, it's undisputed they're disclosed.

[00:02:09] Speaker 01:
The question is, are they enabled?

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Do you argue that claim five

[00:02:13] Speaker 02:
can't be obvious over PET, because PET is only prior for what it teaches and enables.

[00:02:19] Speaker 02:
Even if we assume that it's not enabled under 102, how's that relevant to our 103 analysis?

[00:02:27] Speaker 01:
For claim five?

[00:02:37] Speaker 01:
Well, if something's not there relying on, the petitioner relied on,

[00:02:43] Speaker 01:
the tables for teaching certain limitations.

[00:02:47] Speaker 01:
And they relied on other prior art or another argument, routine optimization, to get the concentration of the catalyst, I believe, is what claim five is.

[00:02:59] Speaker 01:
So that doesn't cure the defects of what's wrong with PAT, with the PAT reference.

[00:03:06] Speaker 01:
If PAT doesn't enable the subject matter, those two limitations,

[00:03:11] Speaker 01:
There's nothing in routine optimization that would get you to the concentrations recited in Claim 5.

[00:03:19] Speaker 04:
Wasn't Pat based on actual data, evidence, experimentation?

[00:03:28] Speaker 01:
So Pat was based on a semi-empirical simulator.

[00:03:33] Speaker 01:
Nobody knows what was in that semi-empirical simulator except for Selenese.

[00:03:39] Speaker 01:
They didn't identify it by trademark, by how it operates.

[00:03:47] Speaker 01:
It's just sort of a naked statement, three words, semi-empirical simulator.

[00:03:51] Speaker 04:
Well, you want to sustain a patent based on a very old patent, based on concentrations which are recited in another reference on essentially the same process

[00:04:09] Speaker 04:
And I repeat with the same concentrations of compounds.

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Reactive materials.

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Methyl acetate and water.

[00:04:28] Speaker 01:
Could you repeat the question again?

[00:04:29] Speaker 04:
This is an old process.

[00:04:31] Speaker 04:
It's a very old process.

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The old process is combining

[00:04:37] Speaker 04:
methanol with carbon monoxide.

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And you've got a flash evaporation step.

[00:04:48] Speaker 04:
And you're focusing on the concentrations of methyl acetate and water, which are in reference.

[00:04:56] Speaker 04:
There's nothing really new.

[00:04:59] Speaker 01:
Well, there is something new.

[00:05:00] Speaker 01:
First of all, the process in a very general sense is what maybe 30 years old.

[00:05:05] Speaker 01:
We agree to that in a very general sense.

[00:05:08] Speaker 01:
But there are improvements made constantly in this field.

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And the reference being relied on was a relatively new reference, not filed that much before the patented issue.

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And the reference was just a prediction.

[00:05:24] Speaker 01:
It was based on a semi-empirical simulator.

[00:05:26] Speaker 01:
There's no proof as to what that simulator was.

[00:05:31] Speaker 01:
The only evidence as to what that simulator was came from our witness, because he tried to figure it out.

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And he was very knowledgeable in computer simulation.

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And what he did was he took the process or the simulator that was most well known in the industry, most widely used, and he said, I'm going to try to figure out how they got these numbers.

[00:05:53] Speaker 04:
But what is different in the reference from what is claimed?

[00:05:58] Speaker 01:
You mean different in terms of what they actually did?

[00:06:01] Speaker 04:
What is different in terms of what is claimed?

[00:06:06] Speaker 04:
You're questioning whether the enablement

[00:06:12] Speaker 04:
of the reference that led to that disclosure.

[00:06:15] Speaker 04:
These are actual data.

[00:06:18] Speaker 01:
So the data is not actual data in the reference.

[00:06:22] Speaker 01:
It's predicted data, 100%, not disputed.

[00:06:25] Speaker 01:
It's predicted data.

[00:06:26] Speaker 01:
There are witnesses I can point to in their petition.

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I mean, the petitioner

[00:06:32] Speaker 01:
Admitted that the data in tables one through four which are really the tables issue, but really all the tables was predicted data predicted results predicted data So that data was predicted our witness came in and said why the prediction was wrong?

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unreliable and not enabled you can't reproduce that data without undue experimentation if at all and

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It may be impossible, extremely difficult.

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So you're looking at data that may be on its face.

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You're looking at a patent or a reference on its face.

[00:07:06] Speaker 01:
That looks like a pretty good reference.

[00:07:08] Speaker 01:
But all of the evidence as to how good it really is was submitted by our witnesses, Bizet and Rockstraw.

[00:07:17] Speaker 01:
And all the evidence, when you're looking at the critical data points, the concentration of water and the concentration of methyl acetate,

[00:07:26] Speaker 01:
Those data points were generated, they were predicted, and they were predicted using a faulty semi-empirical simulator.

[00:07:36] Speaker 04:
But aside from the point you're raising, do they constitute a 102 disclosure?

[00:07:41] Speaker 01:
No, because they're not enabled.

[00:07:44] Speaker 04:
Otherwise, they would be a 102 disclosure.

[00:07:47] Speaker 01:
Otherwise, for claim one, it would be a 102 disclosure if it was enabled.

[00:07:53] Speaker 01:
All the evidence.

[00:07:54] Speaker 01:
basically submitted by the patent owner is that it was done, the predictions were improper, they were unreliable, and they were not enabled because it wasn't even sure if it could ever be reproduced in real life.

[00:08:08] Speaker 01:
You can't just put something out there and then block everybody else who has a real invention later.

[00:08:14] Speaker 01:
Say, hey, I think this is going to work, especially when the evidence shows it's a faulty prediction.

[00:08:23] Speaker 01:
OK.

[00:08:25] Speaker 01:
Turning to the case law, I think it's pretty well briefed.

[00:08:30] Speaker 01:
But in our view, and especially we summarize the case law, I believe, in our reply brief, in our view, the case law says you have to look at the disclosure being relied on for anticipation.

[00:08:45] Speaker 01:
That disclosure has to be enabled.

[00:08:47] Speaker 02:
Speaking of the law, on page 42 of the blue brief,

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Ask us to consider our lead compound analysis to avoid the use of an proper hindsight as you note the lead compound analysis applies to new chemical compound, right?

[00:09:08] Speaker 02:
The 843 patent discloses a process from producing acetic acid How's the lead compound?

[00:09:15] Speaker 01:
So the lead compound analysis doesn't directly apply.

[00:09:18] Speaker 01:
I agree with that.

[00:09:20] Speaker 01:
I think what the principle behind it is that when you're trying to get a patent, when you're trying to advance the art, you look at what's best and what's good.

[00:09:29] Speaker 01:
And so in our obviousness context, and our witnesses testified, and the arguments were that Pat, the reference at issue, consistently points to the best tables as being tables six and seven.

[00:09:44] Speaker 01:
That was argued.

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over and over, and it was never contradicted by the petitioner.

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So when you step back and you try to avoid hindsight, you need to look at what is best in the prior art and then try to improve on it.

[00:09:58] Speaker 01:
Why would you take the poor quote or the less desirable tables of one to four and then try to put a certain nickel alloy, for example, in the flasher?

[00:10:11] Speaker 01:
If you want to make a better process, you start with tables six and seven.

[00:10:15] Speaker 01:
That's basically our argument.

[00:10:16] Speaker 01:
But yes, the lead compound analysis doesn't directly apply.

[00:10:19] Speaker 01:
But we believe the principle behind it helps to avoid hindsight, which we believe is present here.

[00:10:29] Speaker 03:
It seems to me that your argument is that enablement means that a skilled artisan has to be able to recreate everything.

[00:10:41] Speaker 01:
Has to be able to, yes.

[00:10:43] Speaker 01:
Our argument is that a person of ordinary skill in the art.

[00:10:46] Speaker 01:
But what is that enablement means to practice?

[00:10:50] Speaker 03:
Not to recreate.

[00:10:52] Speaker 01:
Well, you have to practice what's disclosed.

[00:10:54] Speaker 03:
So you start, in our view, and I think the case.

[00:10:56] Speaker 03:
So if you have the simulation tables, and that's one through four, and they show the composition of the flasher stream and the concentration data,

[00:11:06] Speaker 03:
the expressly disclosed the claim ranges of temperature and pressure in the claim concentrations of methyl acetate and water.

[00:11:13] Speaker 03:
That's what the tables disclose.

[00:11:16] Speaker 03:
Why couldn't a skilled artisan practice what's disclosed?

[00:11:23] Speaker 01:
In the tables of Pat?

[00:11:27] Speaker 01:
Because the tables of Pat are predicting that something's going to happen.

[00:11:33] Speaker 01:
And that doesn't happen when you

[00:11:35] Speaker 01:
when you follow those, and when you follow the teachings of the patent.

[00:11:39] Speaker 03:
Pat says if you... They're simulation tables.

[00:11:41] Speaker 03:
They're addictive in nature.

[00:11:43] Speaker 03:
Right.

[00:11:43] Speaker 03:
But they give you the data points by which to recreate or to practice that simulation table.

[00:11:52] Speaker 03:
You mean reproduce in real life?

[00:11:54] Speaker 03:
Yes, you are going to recreate.

[00:11:57] Speaker 01:
Right, right, recreate, right.

[00:11:58] Speaker 03:
It has to enable a... But our law requires only that you be able to practice.

[00:12:02] Speaker 01:
practice the disclosure being relied on for anticipation.

[00:12:10] Speaker 01:
The disclosure being relied on for anticipation, and it was all through the petition, and it's been all along, the disclosure relied on is those data points.

[00:12:20] Speaker 01:
It's sort of like if you have a big, broad claim to a bunch of chemical compounds, and you teach how to make some of them.

[00:12:27] Speaker 01:
And somebody comes along later and they say, we found this great compound.

[00:12:32] Speaker 01:
And here it's not disclosed in the patent.

[00:12:33] Speaker 04:
That's quite a different story.

[00:12:36] Speaker 04:
OK.

[00:12:36] Speaker 04:
Here you have a process consisting of methanol plus carbon monoxide to produce acetic acid.

[00:12:44] Speaker 04:
You've got all the reaction conditions.

[00:12:51] Speaker 04:
And PATH discloses the concentration of methyl acetate in water from the same process.

[00:13:03] Speaker 04:
And that's not enabled?

[00:13:05] Speaker 01:
No, it's not enabled because you can't get to those data points.

[00:13:12] Speaker 01:
In order to get to those data points, you either have to have a really good, really strong disclosure that tells exactly what to do, and you have a prediction that gets you there.

[00:13:26] Speaker 01:
Part of our testimony or our witnesses was that in any of these processes, both of our witnesses testified to this.

[00:13:32] Speaker 01:
In order if you're what a person of already skill in the art and you see a simulation you say oh, that's interesting I wonder whether it's going to work so then you dig down into it you shouldn't be able to just throw a prediction out there and assume it's it's going to prevent somebody else from getting a patent later when your predictions wrong if the prediction wasn't flawed or if the

[00:13:55] Speaker 01:
process had been described in full detail on how to do it, it would be a totally different case.

[00:14:01] Speaker 04:
Well, you're into your rebuttal time.

[00:14:04] Speaker 04:
Why don't we hear from the other side?

[00:14:05] Speaker 04:
OK.

[00:14:06] Speaker 04:
We'll give you three minutes rebuttal.

[00:14:08] Speaker 04:
OK.

[00:14:10] Speaker 01:
Mr. Cohn, Mr. Chase.

[00:14:11] Speaker 04:
Thank you very much.

[00:14:22] Speaker 00:
May I please record?

[00:14:25] Speaker 00:
Daiso concedes that Pat discloses what would be anticipatory disclosures, four separate sets of anticipatory concentration data, and challenges only the board's factual findings that a skilled artisan would have found Pat's disclosures to be reliable.

[00:14:40] Speaker 00:
Substantial evidence supports the board's findings on reliability, and it's for three primary reasons.

[00:14:46] Speaker 00:
First, the board credited Dr. Haynes' testimony that the skilled artisan would understand the term semi-empirical simulation to mean that it was based, at least in part, on actual data.

[00:14:58] Speaker 00:
Actual data went in to inform the simulation that was performed.

[00:15:02] Speaker 03:
Is that because that was well known in the art at the time?

[00:15:05] Speaker 00:
That's correct, Your Honor.

[00:15:06] Speaker 00:
That's another point that Dr. Haynes raised in his testimony.

[00:15:09] Speaker 00:
Incremental improvements are made in the field to this very old, mature process and the way they're customarily done.

[00:15:16] Speaker 00:
is that someone runs a simulation so that they don't have to tweak it on the ground in an actual plant and then they implement those simulation data or the computer modeling data in an actual facility and they're readily able to do so because that's what's customarily done.

[00:15:32] Speaker 00:
Dr. Haynes additionally testified here that in addition to being based on actual data, the data were what you would expect to see.

[00:15:39] Speaker 00:
He based this in part on references he cited and in part on his 20 plus years of experience in the acetic acid field.

[00:15:46] Speaker 00:
He said that a skilled artisan would understand the flasher to be representative of actual real-world streams.

[00:15:53] Speaker 00:
That's appendix page 2437 from his declaration.

[00:15:57] Speaker 00:
The third point that he made

[00:15:59] Speaker 00:
was the one that I just mentioned that it was commonplace in routine and based on all of that almost high school science fair routine it and perhaps your honor it's a there's complicated chemistry involved but at the end of the day this is a very mature process and people know how to make changes here implement them

[00:16:17] Speaker 00:
And that's exactly what Dr. Haynes said.

[00:16:21] Speaker 00:
Just one brief point on the legal standard.

[00:16:23] Speaker 00:
Judge Raina, you asked about what PAT needs to do to enable in terms of its data points.

[00:16:28] Speaker 00:
And I think that you were correct.

[00:16:30] Speaker 00:
PAT gives you the data to use.

[00:16:31] Speaker 00:
And what you use those data to do is to modify the process on the ground.

[00:16:36] Speaker 00:
You don't have to achieve a data table that has the same exact points as PAT.

[00:16:41] Speaker 00:
And that's exactly what the board found.

[00:16:42] Speaker 00:
The board said you don't have to reproduce PAT with 100% accuracy.

[00:16:47] Speaker 00:
Instead, you need only to have a skilled artisan be able to take Pat's disclosures and practice the claims, which, of course, are broad ranges of concentration.

[00:16:56] Speaker 03:
Practice the claims of the patent.

[00:16:58] Speaker 03:
You're not looking at practicing the prior art.

[00:17:01] Speaker 00:
That's exactly right, Your Honor.

[00:17:02] Speaker 00:
Enablement is viewed as whether the disclosure enables you to practice a claim.

[00:17:06] Speaker 00:
Here, the claim is the claims of the patent in suit.

[00:17:09] Speaker 00:
And the testimony from Dr. Haynes that the board relied on and credited was that

[00:17:12] Speaker 00:
a skilled artisan could take Pat reference, could look at those anticipatory data sets, the four tables, and could apply that to a real-world process without undue experimentation.

[00:17:22] Speaker 00:
And his conclusion?

[00:17:23] Speaker 04:
The process being methanol plus CO and ending up not only with acetic acid, but with a particular concentration of methyl acetate and water in this mix.

[00:17:37] Speaker 00:
That's exactly right, Your Honor.

[00:17:39] Speaker 04:
And what's important about those concentrations?

[00:17:42] Speaker 04:
Those concentrations- Those aren't intended products of reaction.

[00:17:46] Speaker 00:
No, they're not.

[00:17:47] Speaker 00:
Acetic acid is the intended product.

[00:17:49] Speaker 00:
The concentration of methyl acetate in water affect various things in the system, including removal of impurities.

[00:17:56] Speaker 00:
And so when you carry these components down into the system, they have an effect.

[00:18:00] Speaker 00:
But it has effect on reaction and also on removal of impurities.

[00:18:04] Speaker 00:
And so they're desirable ranges.

[00:18:06] Speaker 04:
Are they almost incidental byproducts of the claimed reaction?

[00:18:13] Speaker 00:
I'm not sure if they're byproducts, Your Honor, but certainly what you get out of the flasher reflects what you put in in the conditions so that the flasher liquid stream would result.

[00:18:22] Speaker 04:
But your purpose isn't to get methyl acetate in water.

[00:18:24] Speaker 00:
That's exactly right.

[00:18:25] Speaker 04:
Or any particular concentration of it.

[00:18:27] Speaker 00:
That's correct, Your Honor.

[00:18:28] Speaker 00:
And ultimately, this is all in service of producing acetic acid, which is the ultimate product that you're trying to produce at a high level of purity.

[00:18:37] Speaker 00:
I'm happy to answer questions about the obviousness questions.

[00:18:41] Speaker 00:
If the court has any questions, I believe, Judge Wallach, you had it right that even if it were not enabling, which we believe it is, that wouldn't be relevant for the obviousness inquiry.

[00:18:50] Speaker 00:
And so I think that that pretty much resolves the question on claim five.

[00:18:54] Speaker 00:
But if the court has additional questions, I'd be happy to take them.

[00:18:58] Speaker 00:
Otherwise, we would ask the court to affirm based on the substantial evidence that's Dr. Haynes' testimony and the board's thorough consideration of the prior

[00:19:06] Speaker 04:
Thank you, counsel.

[00:19:07] Speaker 04:
We'll hear more from you in a few moments.

[00:19:10] Speaker 04:
Mr. Murphy has some rebuttal time.

[00:19:12] Speaker 04:
Three minutes.

[00:19:18] Speaker 01:
So one of the questions that just came up was, are the methyl acetate and water important?

[00:19:23] Speaker 01:
And yes, they're very important.

[00:19:24] Speaker 01:
In fact, especially controlling water, water is a very important part of the process.

[00:19:31] Speaker 01:
And there are

[00:19:33] Speaker 01:
Over the years, there have been high water processes, low water processes, and this particular claim is on the low water end of the process.

[00:19:42] Speaker 01:
And there's reasons, there's technical reasons to do that.

[00:19:44] Speaker 01:
So these aren't just incidental impurities.

[00:19:46] Speaker 01:
They're critical components that are intentionally part of the process and controlled to get good results.

[00:19:56] Speaker 01:
They also affect the equilibrium in the system one of the other Products that's in the process stream, and it's there's a lot of discussion about as an iodide species Methyl iodide and that turns into an acid

[00:20:17] Speaker 01:
at iodine in acid form and that corrodes the reactors, corrodes whatever vessel it happens to be in.

[00:20:24] Speaker 01:
And one of the things that our client, Dicell, found was that by controlling all of these parameters, water and methyl acetate, you can get, you can actually keep the hydrogen iodide concentration very low and use a nickel alloy material.

[00:20:42] Speaker 01:
And we get to claims 11 and 13, the,

[00:20:47] Speaker 01:
Those are only rejected for obviousness.

[00:20:50] Speaker 01:
And there's a section in our brief where we talk about, Pat talks about the conditions being less corrosive downstream.

[00:21:00] Speaker 01:
But that's far downstream from where the flasher is.

[00:21:03] Speaker 01:
Our client found out and claimed in claims 11 and 13 that they can use a nickel alloy in the flasher.

[00:21:10] Speaker 01:
The main rebuttal is to that is, oh, people have been using nickel alloy.

[00:21:14] Speaker 01:
It's kind of known that you can use it in the Monsanto process.

[00:21:17] Speaker 01:
Well, there's so many variations of the Monsanto process, hundreds, thousands possibly of patents, articles.

[00:21:23] Speaker 01:
look at Pat and say, oh, use nickel alloy in the flasher.

[00:21:27] Speaker 01:
There's no suggestion.

[00:21:28] Speaker 01:
If you look at the documentary evidence that was cited by Dicell, those are strongly pointing towards a more corrosion-resistant material in the flasher.

[00:21:39] Speaker 01:
It's right in the references.

[00:21:40] Speaker 01:
It's cited in the briefs.

[00:21:42] Speaker 01:
And the response by Selenese to that is, you know, nickel alloy is out there.

[00:21:48] Speaker 01:
People have been using it in different vessels over the years.

[00:21:52] Speaker 01:
And we think that's clearly hindsight also.

[00:21:58] Speaker 04:
Thank you, counsel.

[00:21:59] Speaker 04:
We will take the case under advisement.