[00:00:00] Speaker 01: Vera versus Fresenius Cabe, 2019, 1329, and 1367. [00:00:06] Speaker 01: Mr. Unikowski. [00:00:12] Speaker 04: Thank you, Your Honors. [00:00:13] Speaker 04: May it please the Court. [00:00:15] Speaker 04: The District Court erred in holding that Fresenius Cabe had proven by clear and convincing evidence that the about 2% decrease limitation was inherent in the allegedly obvious combination. [00:00:26] Speaker 01: The district court examined data taken from... Council, Council, Claim 6 is obviously dependent from Claim 1. [00:00:35] Speaker 01: Claim 1 claims a compound that's in the prior art gets metatomidine in a sealed glass container wherein, wherein [00:00:50] Speaker 01: The composition, when stored for at least five months, degrades no more than 2%. [00:00:57] Speaker 01: There is nothing in that claim to inhibit decomposition. [00:01:04] Speaker 01: Therefore, it is obviously inherent in the compound, which is the little structure. [00:01:09] Speaker 01: It's a very simple compound. [00:01:12] Speaker 01: And when we get to claim six, [00:01:16] Speaker 01: Dividing it by a factor of 25 is hardly invented. [00:01:24] Speaker 01: So why wasn't it clear that the district court was correct? [00:01:28] Speaker 04: So, I mean, the precise question that the district court resolved was whether or not this particular numerical stability property was inherent in this very low concentration. [00:01:36] Speaker 04: So the prior art involved the 100 microgram per milliliter Presodex concentrate, and there's evidence in the record, which we're not disputing, that that was stable at the relevant period. [00:01:46] Speaker 04: But this was a much lower concentration version of Presodex. [00:01:51] Speaker 04: And in fact, there's testimony at trial that's the lowest concentration anyone had ever worked with. [00:01:55] Speaker 04: And so there is a question of whether or not that would meet the stability property. [00:01:59] Speaker 04: At five months, I mean, four micrograms per milliliter was a very low concentration. [00:02:03] Speaker 04: 2% of that is obviously even lower. [00:02:06] Speaker 04: And so the question was, how can you show at five months that would have inherently achieved that property? [00:02:10] Speaker 04: There is no evidence in the prior art, no actual data in the prior art showing it would meet that property. [00:02:16] Speaker 04: And so to prove its obviousness case, Presenius cabi relied on the doctrine of inherency. [00:02:20] Speaker 04: And we don't think that on the record before the court, first of all, we think there's a legal error and a factual error. [00:02:25] Speaker 04: We think that the district court didn't conduct the correct legal analysis to find inherency, which was the premise of Fresenius-Cabney's case. [00:02:32] Speaker 02: And we think that it seems to me your problem is you have testimony from the Fresenius expert witness. [00:02:38] Speaker 02: that it's inherent, that it will always meet the degradation standard if you store it in a glass bottle with a rubber stopper. [00:02:47] Speaker 02: And the district court credited that testimony. [00:02:52] Speaker 02: And so you got a problem. [00:02:55] Speaker 02: You say, well, the district court didn't consider filters or particular brands of filters or impurities. [00:03:03] Speaker 02: But in fact, you never raised those issues at the district court level. [00:03:07] Speaker 02: So I don't see any reason for the district court to address those particular features. [00:03:11] Speaker 02: So you have testimony that says it's inherent. [00:03:14] Speaker 02: The district court believed it. [00:03:16] Speaker 02: So why isn't that the end of it under a clear error standard? [00:03:20] Speaker 04: Well, so we think there's a legal and a factual component to argument. [00:03:23] Speaker 04: So let me start with the law. [00:03:24] Speaker 04: So I think what the district court ultimately did was it examined the data from the non-priority embodiments, either made by the inventor or with the teachings of the inventor's own work. [00:03:35] Speaker 04: And based on its examination of that data, it drew the conclusion that this property was inherent in the allegedly obvious combination. [00:03:42] Speaker 00: So to be clear, you're talking about 21 batches, the 18 and then the 3. [00:03:48] Speaker 04: That's right. [00:03:48] Speaker 00: And from that, the district court, since there were 21 batches and there was testimony about them that all 21 met the 2% limitation, the district court from that included that inherency had been proven. [00:04:02] Speaker 00: Is that correct? [00:04:03] Speaker 04: That's what the district court held, yes. [00:04:04] Speaker 00: So then why I don't understand how we could possibly find clear error in that. [00:04:08] Speaker 00: This is not a small batch problem. [00:04:09] Speaker 00: This is not one batch. [00:04:10] Speaker 00: This is 21 batches. [00:04:12] Speaker 00: And I understand that a different district court, based on the exact same data, reached a different conclusion, but there's no collateral estoppel here. [00:04:18] Speaker 00: It's different defendants are entitled to make this challenge. [00:04:21] Speaker 00: And so maybe it wasn't clearly erroneous in the other case, and it's not clearly erroneous here, even though there are different standards. [00:04:27] Speaker 04: So the problem is not the number of batches. [00:04:29] Speaker 04: I agree there's lots of batches. [00:04:30] Speaker 04: But the problem is not the number of batches, it's which batches. [00:04:32] Speaker 04: Because all these batches were non-prior art, and they may have been made under particular conditions that may or may not have existed in the allegedly obvious combination. [00:04:40] Speaker 04: Look, I think it's useful to note. [00:04:41] Speaker 00: Did you make that argument below? [00:04:43] Speaker 04: I think, well, here's what we made. [00:04:44] Speaker 04: I don't want to give the misimpression. [00:04:45] Speaker 00: No, did you make that argument below? [00:04:46] Speaker 00: You didn't. [00:04:48] Speaker 00: So if you have a reason now why you think these batches were deficient and shouldn't have been good enough, [00:04:56] Speaker 00: for the district court to reach its conclusion. [00:04:57] Speaker 00: It was inherent on your burden for you to have raised that to the district court. [00:05:02] Speaker 00: It's like the points Judge Steick raised. [00:05:04] Speaker 00: You're making a lot of arguments now why the district court should have rejected those 21 batches. [00:05:09] Speaker 00: But the district court either didn't have those arguments in front of it at all, or if it did, it found against you, and you know what? [00:05:16] Speaker 00: That's just weighing of the evidence. [00:05:18] Speaker 00: We don't redo that. [00:05:19] Speaker 04: I don't want to give a misimpression of what arguments we raised and what we didn't raise below. [00:05:22] Speaker 04: So here's what I think we did raise below. [00:05:23] Speaker 04: I think that we clearly said that the inventor's own work wasn't enough to prove inherency. [00:05:28] Speaker 04: That's an argument that I think everyone agrees we made. [00:05:30] Speaker 04: And then in the opening statement, which I know is not evidence, but in the opening statement, I think we laid down the gauntlet and we said, look, if they're going to prove inherently, they're just going to rely on the inventor's own work. [00:05:39] Speaker 04: That's not enough because there can be many differences between the inventor's own work and the allegedly obvious combination. [00:05:45] Speaker 04: And they decided strategically not to argue that the specific manufacturing conditions [00:05:49] Speaker 04: that are disclosed in the patent are obvious. [00:05:51] Speaker 04: They could have done that. [00:05:52] Speaker 04: They could have said all these measures that are in the patent were obvious, but they elected to construct this generic, allegedly obvious combination without those features. [00:06:00] Speaker 04: And so we had very general testimony. [00:06:03] Speaker 04: I'm not saying we proved or even tried to prove that nitrogen specifically affected the outcome and all those other things. [00:06:08] Speaker 04: We just had general testimony in the record that there's these specific manufacturing conditions under which the inventor's own work was made, and that may have affected stability. [00:06:17] Speaker 04: That's the record that we showed, and I think it was incumbent on Fresenius Cabbie, which after all bears the burden of proof, to prove this link, this extrapolation between the inventor's work. [00:06:27] Speaker 02: I had testimony that it was always the case, that it would always meet, that it was stored in a glass bottle in the rubber stopper, that it would always meet. [00:06:35] Speaker 02: the degradation limitation? [00:06:37] Speaker 02: And does the district court believe that? [00:06:39] Speaker 04: So I think just two things about the testimony. [00:06:42] Speaker 04: First of all, the district court discusses this testimony that's rock stable in the portion of its opinion addressing reasonable expectation of success. [00:06:49] Speaker 04: We're not just criticizing how the district court wrote its opinion. [00:06:51] Speaker 04: I think it's more substantive than that, because the district court's analysis, if I could just direct the court to where the court talks about it, it's at page 44. [00:07:01] Speaker 04: So the district court talks about the testimony. [00:07:04] Speaker 04: It says, quote, the court therefore adopts Dr. Kipp's testimony that oxidation affects dexametatomidine only under very stringent conditions. [00:07:11] Speaker 04: And then, and this is, I think, the key language, a POSA would not have expected a lot of chemical change to occur in room temperature storage conditions for five months. [00:07:20] Speaker 04: And then the district court quotes case law saying that the expectation of success, excuse me, [00:07:24] Speaker 04: need only be reasonable, not absolute. [00:07:26] Speaker 04: So it's clearly evaluating this evidence under the very different standard of reasonable expectation of success versus clear and convincing evidence that a property necessarily exists. [00:07:36] Speaker 00: And I think that if the district court... Okay, but first step, just as a matter of process, can I ask you just to slow down a little? [00:07:42] Speaker 00: Because you talk really, really fast. [00:07:43] Speaker 04: I'm sorry. [00:07:44] Speaker 00: That's okay. [00:07:46] Speaker 00: But the other problem you have is... [00:07:49] Speaker 00: I actually agree with you. [00:07:51] Speaker 00: It's unfortunate that after reaching the conclusion at the bottom of page 40, wherein the court made an express fact-finding regarding inherency, it then morphed into some sort of reasonable expectation of success combined with inherency. [00:08:07] Speaker 00: Now, of course, reasonable expectation of success [00:08:10] Speaker 00: a factor in obviousness, I get that, but it has no place in inherency analysis. [00:08:14] Speaker 00: The problem I have, and so I think to the extent you're complaining that it seems like the district court messed up the test from page 41-41, I actually agree with you, but on page 40 she made a fact finding based on the data and the testimony of Mr. Kipp, which is discussed on page 35. [00:08:31] Speaker 00: And that's the problem for you. [00:08:33] Speaker 00: I don't see that there's clear error in that fact-finding on inherency. [00:08:36] Speaker 00: When she morphed into this reasonable expectation of success based on chemical properties, I'm not sure I actually understand that portion of her opinion. [00:08:43] Speaker 00: But she had already made a very clear fact-finding based on the batches and the testimony in advance of that. [00:08:50] Speaker 04: Well, two things about that. [00:08:51] Speaker 04: First of all, I think that the fact finding was based, I mean, I've gone through that inherency portion of her opinion many, many times. [00:08:58] Speaker 04: And as far as I can tell, it's based on the non-prior art data. [00:09:02] Speaker 04: This issue of the compound being rock stable, that is testimony that's in the record. [00:09:06] Speaker 04: But that is testimony that was discussed later. [00:09:08] Speaker 04: And I don't think that just the qualitative statement of something being rock stable is enough to show an inherent property of something. [00:09:13] Speaker 04: So to the extent the district court did rely on this rock stable, yes. [00:09:17] Speaker 00: Oh, what they said, but no, that's not allowed? [00:09:19] Speaker 00: There were 21 separate batches. [00:09:22] Speaker 00: Every single batch met the test. [00:09:26] Speaker 00: So you have that in combination with the testimony. [00:09:30] Speaker 00: It's not like some batches met it and some didn't, and there was a question. [00:09:34] Speaker 04: Yes, but I think that what has to be shown is that those batches, it could be a thousand batches. [00:09:38] Speaker 04: The step that's crucial is to show that they're relevantly similar to the allegedly obvious combination, okay? [00:09:44] Speaker 04: And the record is clear on the face of the patent that all these batches were made under these particular conditions. [00:09:50] Speaker 04: So I'm not saying we put on a case about those conditions and exactly how they affected the outcome. [00:09:55] Speaker 04: All we're saying is that it was incumbent on Fresenius Cabi to present a case [00:09:59] Speaker 02: that because these batches were not prior art... Did you respond to a case that you didn't make at all in a district court? [00:10:05] Speaker 02: You didn't... I've read your response brief that you didn't raise these manufacturing differences in connection with inherency and to the extent that the district court went on and discussed reasonable expectation of success, that's because you argued it separately. [00:10:21] Speaker 04: I think this was a considerable portion of our case at the trial. [00:10:24] Speaker 04: I think that when the trial started we made clear to the court [00:10:27] Speaker 04: that it wasn't enough just to show from the inventor's own work that you can get to the generic allegedly obvious combination, because the inventor's own work may well have been made on particular conditions. [00:10:38] Speaker 04: You've got to draw that link as part of their affirmative case. [00:10:41] Speaker 04: And then there's certainly testimony in the record that the inventor's own work was made under particular conditions. [00:10:46] Speaker 04: I mean, that's the case that we presented. [00:10:48] Speaker 04: And so I think it's now incumbent to show either that those conditions were obvious, which I think they made the strategic decision not to show, [00:10:55] Speaker 04: Or that you can draw the link that even when those conditions aren't there you can achieve the same outcome and I think that the reason that There it's a somewhat unorthodox Inherency case and I'll say one more point and I'll sit down It's a somewhat unorthodox Inherency case for seniors can be raised because they're trying to prove this very particular numerical property of prior art based on Embodiments that don't come from the private. [00:11:19] Speaker 01: Yes, they're trying trying to prove a property that is a [00:11:23] Speaker 01: apparently inherent in the compound because there's nothing in the claim, otherwise, that produces that property. [00:11:32] Speaker 01: It has to be inherent. [00:11:34] Speaker 04: I don't think it has to be inherent. [00:11:35] Speaker 04: I mean, so just, it's interesting to note that the prior art version of the compound, Presadex Concentrate at 100 micrograms per milliliter, Dr. Kitt, which was Fresenius Cavie's expert, attempted to construct a model [00:11:48] Speaker 04: based on that. [00:11:49] Speaker 04: And this is all discussed in the district court's opinion. [00:11:51] Speaker 04: We cross-examined Dr. Kipp and made clear that at least one version of the kinetics model he said was possible [00:11:58] Speaker 04: would spit out a result in which the property wasn't inherent. [00:12:02] Speaker 04: So in response, Dr. Kipp argued, and the district court credited this testimony, that you shouldn't look to the data. [00:12:08] Speaker 01: If it's not inherent, what is there in the claim to bring about that stability? [00:12:13] Speaker 01: And if it's not inherent and there's nothing in the claim to bring it about, the claim is inoperative. [00:12:20] Speaker 04: I don't think that's true, Your Honor, because, I mean, the specification describes these various steps that exist. [00:12:25] Speaker 04: So I think it's enabled in that the specification describes steps that were taken in order to achieve what we're claiming as the result, which is the stable compound. [00:12:34] Speaker 01: But you're not in the claim. [00:12:34] Speaker 04: It's not in the claim, I know it. [00:12:36] Speaker 04: But I think enablement is determined based on the specification. [00:12:38] Speaker 04: And so I think that we've given the steps necessary to produce. [00:12:42] Speaker 04: So I think that we had developed it. [00:12:44] Speaker 04: We had it. [00:12:44] Speaker 04: We developed this product. [00:12:45] Speaker 04: So I think we're entitled to try to patent it and the specification describes all the steps that we needed to take in order to get to where we wanted to go. [00:13:05] Speaker 03: May please the court. [00:13:07] Speaker 03: Tacking on a property to an obvious invention does not make it patentable. [00:13:11] Speaker 03: This case is about taking the prior commercial product, the drug, and water in a glass bottle and adding more water. [00:13:17] Speaker 03: Nothing else was added to help stability. [00:13:20] Speaker 03: Nothing was changed. [00:13:21] Speaker 03: That's the invention, and that's what the district court found. [00:13:23] Speaker 01: Well, is it possible that something at a different dilution degrades differently? [00:13:32] Speaker 03: In theory, it is possible. [00:13:33] Speaker 03: The district court here, though, found that for dexmedetomidine, in view of all the data at different concentrations, concentration did not make a difference to stability. [00:13:41] Speaker 03: And that was supported by expert testimony that further added, there's no reason to think that concentration would change for this particular drug, given its properties. [00:13:49] Speaker 03: So as to the 2% decreased property, therefore, Haspera now argues something that it didn't argue before. [00:13:55] Speaker 03: It has these factors listed A through F in its briefing that it speculates may have had a change in the outcome, but that's if they had argued it and if they had evidence to that effect. [00:14:06] Speaker 03: And in this case, what we have shown both through the briefing and the district court's findings [00:14:10] Speaker 03: is the 2% analysis was supported completely by all of the data, universally, and the expert testimony. [00:14:17] Speaker 03: And these A through F factors, actually, if we looked at the evidence now, which we do not suggest we should, but even if that happened, still only supports Fresenius-Cabe. [00:14:26] Speaker 03: It does not support any question that there could be a stability issue even after taking into account all of the new arguments as A through F. [00:14:36] Speaker 00: Do you agree with the question, the way I framed it, to your opponent, which is, by the bottom of page 40, the district court had made its finding of inherency based on the testimony that it cited and the batches, and that everything thereafter, even if I find a problem with it, it's harmless error because this is a fact finding that is [00:14:56] Speaker 00: supported in the record and is not clearly erroneous based on what she cited. [00:15:00] Speaker 03: Yes, Your Honor. [00:15:01] Speaker 00: And I believe what the district court was doing to help with that is addressing the arguments Hespera did present, because in the post-trial briefing, under a reasonable expectation of success section... Yeah, but she seemed to sort of weave the reasonable expectation of success in with the inherency discussion in a way that made me uncomfortable in pages 42 and 43. [00:15:19] Speaker 00: because we all know it's not a reasonable expectation, it's certainty. [00:15:23] Speaker 00: It's not a possibility of it's always when it comes to inheritance. [00:15:26] Speaker 03: That's right, Your Honor. [00:15:27] Speaker 00: And so that made me uncomfortable that she was morphing together two legal concepts that had no business being morphed. [00:15:33] Speaker 03: Well, candidly, it seems the district judge, Chief Judge Palmer, was also confused because that section starts with it's not clear whether inherency requires consideration of reasonable expectation of success as a threshold issue, morphing those two in the same sentence. [00:15:45] Speaker 03: But that confusion was expressly discussed, and reasonable expectation of success in any event, Your Honor's question, was treated completely separately. [00:15:53] Speaker 03: So the inherency question was completed, including both the test data and the evidence that the expert Dr. Kipp had offered at trial. [00:16:01] Speaker 03: I would just add some additional points based on what counsel had argued. [00:16:06] Speaker 03: One is that there was no strategic decision to present some issues and not others. [00:16:10] Speaker 03: The issue was presenting the case, which was the data and the expert testimony, and responding to any arguments that Haspera made through the trial and through its post-trial briefing. [00:16:18] Speaker 03: Of note, they did have a formulation expert that they could have asked any of these questions to, but they only asked [00:16:24] Speaker 03: One topic, one subject matter arose in that testimony about this rock stable issue, and that was theoretical and nothing else, no questioning of the data. [00:16:33] Speaker 03: In fact, the data was further augmented and supported by another of Haspera's own witnesses, Dr. Ogenstad, who did a statistical analysis, and the judge found below that all of that also helped Fresenius Cabe in support of the data that was presented here. [00:16:49] Speaker 03: And I would finally add that if it's not in the claim, these variables that are not in the claim do present some issues because that is making it what's a product claim into potentially a process claim or a product by process claim. [00:17:03] Speaker 03: And if Haspera wanted to add other variables or do other things to improve stability, they could have and should have done that. [00:17:08] Speaker 03: Here, they did not. [00:17:09] Speaker 03: And instead, what they're trying to do on appeal is read example five and find variables that are in example five of the patent specification [00:17:18] Speaker 03: even though that was not even the example that supported the stability claim at issue here. [00:17:23] Speaker 03: Claim six is supported by example six. [00:17:26] Speaker 03: There was one experiment that was done. [00:17:28] Speaker 03: That one experiment resulted in the 2.3% of loss of dexmedetomidine at five months. [00:17:34] Speaker 03: And that, we all agree, was the outer boundary. [00:17:37] Speaker 03: Aspera calls that the outer boundary. [00:17:39] Speaker 03: So doing nothing at all, and that's what the evidence showed, that there's nothing that was specifically done for example six. [00:17:44] Speaker 03: Nothing is said about that. [00:17:46] Speaker 03: still only gets to the 2.3% with the district court made another finding factually that that was about 2% and in fact credited Haspera's inventor testimony that 2.3% is within 2% in the context of the patent. [00:18:01] Speaker 03: So even before reaching this about that added additional room and breadth to the scope of the claim. [00:18:06] Speaker 03: There was no clear error that Haspera has identified and for all of those reasons the decision should be affirmed. [00:18:13] Speaker 01: Thank you, counsel. [00:18:14] Speaker 01: Mr. Unikowsky has a little more than two minutes. [00:18:21] Speaker 04: Thank you, your honor. [00:18:22] Speaker 04: I'd just like to address the question from Judge Moore about the potential harmlessness of what we view as the error in the district court's discussion of reasonable expectation of success. [00:18:30] Speaker 04: I don't think that that could be regarded as harmless error, because as counsel described, a very important portion of the inherency case by Fresenius Cabe was not just the data from the non-prior art, [00:18:43] Speaker 04: but this argument that this was rock stable and therefore we would expect to see it in any embodiment and not just the non-priority embodiments that were studied. [00:18:51] Speaker 04: The problem is first of all, of course, as we explained in our brief, that kind of qualitative statement is not enough to achieve this particular quantitative threshold [00:18:59] Speaker 04: of about two percent decrease at five months, and to the extent the district court analyzed that under the wrong standard, the reasonable expectation of success standard, I don't think the court can just sort of separate that from the portion of the opinion addressing inherency. [00:19:12] Speaker 04: So if the district court understood that rock-stable analysis to satisfy a burden under a lower standard, then I think that the inherency analysis is flawed, and if you take that out and you're just relying on the non-priority embodiments that may or may not have been the same as the generic [00:19:26] Speaker 04: allegedly obvious combination, I don't think that's enough evidence to show inherency, or at the very least, I think the district court should have another chance to make that extrapolation that we believe is necessary. [00:19:36] Speaker 04: There's no further questions from the court. [00:19:39] Speaker 01: Thank you, counsel. [00:19:40] Speaker 01: The case is submitted.