[00:00:03] Speaker 02:
Okay.

[00:00:03] Speaker 02:
Good morning.

[00:00:05] Speaker 02:
The first argued case this morning is number 172587 in Divior against Dr. Reddy's Laboratories.

[00:00:13] Speaker 02:
Mr. Martin, you are splitting your argument in chief with Mr. Smerick.

[00:00:18] Speaker 00:
I am, Your Honor.

[00:00:18] Speaker 02:
Okay.

[00:00:19] Speaker 02:
The light will go on.

[00:00:20] Speaker 00:
Okay.

[00:00:21] Speaker 00:
Good morning, Your Honors, and may it please the Court.

[00:00:23] Speaker 00:
Kevin Martin for Dr. Reddy's.

[00:00:25] Speaker 00:
As Judge Newman mentioned, I'll be splitting my time.

[00:00:27] Speaker 00:
I'll be addressing

[00:00:28] Speaker 00:
The common issues, and then Mr. Smarrick has some issues that are particular to his client Watson that he will be addressing.

[00:00:34] Speaker 00:
Your Honor, as we see it, the elephant in the room today is the Indivier 1 specification disclaimer ruling.

[00:00:40] Speaker 00:
So even though we prevailed on the question of specification disclaimer in the district court, with Your Honor's permission, I would like to address that first before moving on to our appeal on the invalidity question.

[00:00:52] Speaker 00:
When it comes to the Indivier 1 decision, there's just a few points I'd like to emphasize.

[00:00:56] Speaker 00:
The first is that while the Indivior 1 decision addressed the continuation 305 patent, at page 20 in the panel's decision, it specifically addressed the 514 patent, which is at issue in this case, and found a specification disclaimer.

[00:01:11] Speaker 00:
The panel did that not as dicta, but because it was directly relevant and integral to the panel's claim preclusion ruling.

[00:01:19] Speaker 00:
Second, the arguments that the plaintiffs are making with respect to specification disclaimer in this case

[00:01:25] Speaker 00:
are the very same arguments that they made with respect to specification disclaimer in Endivier 1.

[00:01:30] Speaker 00:
In fact, that case was being briefed at the preliminary injunction stage while the parties were in the middle of briefing this appeal.

[00:01:37] Speaker 00:
And it was a year and a half after the trial in this case.

[00:01:40] Speaker 00:
So when the Endivier 1 case arose, plaintiffs had available to them all of the evidence that had been developed at the trial in this case and all of the arguments which had been developed in this case.

[00:01:50] Speaker 00:
In fact, there were arguments that they made in the Endevrier 1 case that they failed to preserve in this case because they hadn't come up with them yet.

[00:01:56] Speaker 00:
For example, their zone drawing argument.

[00:01:58] Speaker 01:
Are you basically providing a response to the cross appeal?

[00:02:03] Speaker 00:
In a sense, Your Honor, just because it seemed like the biggest issue.

[00:02:06] Speaker 00:
But I can move on to invalidity if you'd prefer.

[00:02:09] Speaker 01:
One would think you'd raise the issue you're appealing.

[00:02:12] Speaker 00:
So I will move there, Your Honor.

[00:02:15] Speaker 00:
With respect to the question of invalidity,

[00:02:18] Speaker 00:
We think that the principal mistake the district court made was to conclude that a person of skill in the art, despite having worked for one to three years in the coating and drying field, would not have either knowledge or access to knowledge, or even access to knowledge of drying techniques.

[00:02:35] Speaker 00:
That mistake about what we view as a methodological mistake, almost a mistake of law, infected the district court's analysis when it came to things such as motivation to combine.

[00:02:45] Speaker 00:
In fact, if you look at the district court's

[00:02:48] Speaker 00:
reasoning, and this appears at page 178 in the appendix, what the district court said was, a posa would not be motivated to combine the prior art to achieve drug content uniformity, primarily because the posa would have limited knowledge and access to knowledge of drying techniques.

[00:03:05] Speaker 00:
That was the reason why, for example, the district court found that a person of skill in the art would not think to combine the Schmidt prior art reference with the Strober's prior art reference

[00:03:14] Speaker 00:
There was no finding that the Strobish prior art reference.

[00:03:17] Speaker 01:
Why don't you argue the references rather than the skill of the?

[00:03:21] Speaker 00:
So when you move to the references, Your Honor, and you start with the Schmidt prior art reference, there's really little dispute for purposes of this appeal that the Schmidt prior art reference gets you all the way up to the drawing step.

[00:03:31] Speaker 00:
In fact, if you look at pages 57 to 58 of the cross appellant's opening brief, and if you look at the district court's treatment of Schmidt below,

[00:03:44] Speaker 00:
They more or less acknowledge that Schmidt will get you a uniform, wet matrix.

[00:03:49] Speaker 00:
And the only basis on which both the district court and the cross-appellants, the plaintiffs, distinguish Schmidt is that it doesn't get you a uniform film after the drawing step.

[00:03:59] Speaker 01:
That's important.

[00:04:00] Speaker 01:
That's important.

[00:04:00] Speaker 01:
And the district court looked at the references.

[00:04:04] Speaker 01:
And that's a question of fact, what the references disclose.

[00:04:08] Speaker 00:
It is a question of fact, Your Honor.

[00:04:10] Speaker 00:
And so we're not arguing that Schmidt is anticipatory, given the specifications.

[00:04:14] Speaker 01:
No, but all the references fell short, according to the district court.

[00:04:18] Speaker 01:
And why don't we give some deference to those findings if they're not clearly erroneous?

[00:04:26] Speaker 00:
And clearly, we respect the clearly erroneous standard.

[00:04:29] Speaker 00:
And when I stand up again to talk about the question of infringement, I'll be pounding the table on the clearly erroneous standard.

[00:04:37] Speaker 00:
But that's why I began this discussion with what we view as a methodological error by the district court, finding that a person of skill in the art would not even have access to knowledge of some of the prior art, such as the strobish reference.

[00:04:51] Speaker 00:
So that strikes us as more of a legal error than a factual error.

[00:04:55] Speaker 00:
Now, and again, when you look at the, let's take the Schmidt reference.

[00:04:59] Speaker 00:
So if the Schmidt reference gets you all the way up to the drawing step, and the Schmidt reference stays on its base,

[00:05:06] Speaker 00:
that there's a 10% requirement set by regulators if you want to have a film product, then a person with skill in the art, let's say a person with skill in the art starts with Schmidt, gets all the way up to the drawing step, and is now banging their head against the wall at the drawing step with Schmidt.

[00:05:23] Speaker 00:
That person being told by Schmidt there's a 10% uniformity requirement would go out and look for prior art, which teaches you how to get over the hump with drawing.

[00:05:33] Speaker 00:
What can I do to maintain uniformity?

[00:05:36] Speaker 00:
And what we argued below was that that person of skill in the art, stumped at the drawing step, would look to prior art, such as Strobusch, which on its face states that it's directed toward addressing what is a uniformity defect with films.

[00:05:51] Speaker 00:
And this is where, again, we think the district court made an error.

[00:05:55] Speaker 00:
The district court at page 178 in the appendix stated that, quote, Strobusch is not directed to drug content uniformity.

[00:06:03] Speaker 00:
It is directed to a surface defect called model,

[00:06:06] Speaker 00:
And model is, to be sure, a surface defect.

[00:06:09] Speaker 00:
But what kind of surface defect is it?

[00:06:11] Speaker 00:
Well, what the evidence at trial showed was that, and what Strobusch on its face says, is that it's a surface defect caused by a lack of uniformity.

[00:06:20] Speaker 00:
And so you can look at page 70237 in the appendix.

[00:06:25] Speaker 00:
That's Strobusch itself stating that model is a, quote, non-uniform density defect.

[00:06:32] Speaker 00:
You can look at the textbooks that were put in at trial.

[00:06:35] Speaker 00:
There's one, for example, at page 28698 to 99 in the appendix.

[00:06:40] Speaker 00:
This is a textbook in the coding and drawing field.

[00:06:45] Speaker 00:
I'm sorry, it's 70588 is where this textbook appears.

[00:06:50] Speaker 00:
It describes model as a gross non-uniform disturbance.

[00:06:54] Speaker 00:
And what our expert, Dr. Amiji, testified at trial was that to a person of skill in the art, and this is the 26

[00:07:02] Speaker 00:
28698 reference I gave you.

[00:07:05] Speaker 00:
Dr. Imigi testified that to a person of skill in the art, they would recognize that model is a defect caused by a lack of uniformity in the film.

[00:07:12] Speaker 00:
So a person of skill in the art who knows they have to get a uniform film to satisfy regulators, who knows they're being stumped at the drawing step, would look to prior art such as strobush, which is designed to get you a uniform final film after the drawing step and have a motivation to combine.

[00:07:28] Speaker 00:
And if you don't believe us, you can also look at what

[00:07:32] Speaker 00:
applicants and the plaintiffs argued, both to the PTO and to the trial court.

[00:07:40] Speaker 00:
Column 41, lines 37 to 44 in the 514 patent teaches to look at the surface of the film to tell whether it's uniform.

[00:07:50] Speaker 00:
And at page 21162 in the appendix, this is the plaintiff's post-trial brief, they argued to the district court that one of the ways you could tell that the defendant's films were uniform

[00:08:01] Speaker 00:
was that it was just by looking at the surface and seeing if there were any visual defects on the surface.

[00:08:05] Speaker 00:
So the idea that the district court's conclusion that you could disregard strobush because it was directed to surface defects, and that's unrelated to uniformity, was contrary to all of the evidence at trial, which shows that surface defects are a symptom of a lack of uniformity.

[00:08:24] Speaker 00:
So we believe that's our strongest argument for why there was clear error below.

[00:08:29] Speaker 00:
We also made an invalidity argument with respect to the 150 patent, which is an issue in this case.

[00:08:35] Speaker 00:
There, the question is whether the 150 patent is entitled to an earlier priority date, the priority date of the 902 application.

[00:08:44] Speaker 00:
And what we argued was that the 902 application does not, on its face, disclose one of the key limitations of the asserted claim of the 150 patent.

[00:08:56] Speaker 00:
which is having a low molecular weight PEO be 60% or more of the polymer component.

[00:09:03] Speaker 00:
And this is a case where we just think the district court misread the 902 application on its face.

[00:09:09] Speaker 00:
If you look at page 70035 of the appendix, which is the relevant portion of the 902 application, there it talks about having low molecular weight PEO

[00:09:25] Speaker 00:
be 60% or more of the composition when you're talking about just low molecular weight PEO and high molecular weight PEO.

[00:09:33] Speaker 00:
But then the very next paragraph goes on to discuss low molecular weight PEO being as low as 50% of the composition once you've added this other component, HPC.

[00:09:42] Speaker 01:
Discuss low molecular weight and then optionally combine with a small amount of a higher molecular weight.

[00:09:49] Speaker 01:
So wasn't that reasonably a disclosure entitling them to the

[00:09:55] Speaker 01:
Effective date?

[00:09:56] Speaker 00:
If the claims were limited only to low molecular weight and high molecular weight PEO, then when you go on to the next paragraph, it discusses the low molecular weight PEO percentage dropping to 50% once you've added that HPC.

[00:10:09] Speaker 00:
And these claims have as a limitation HPC.

[00:10:13] Speaker 00:
So we think that the district court just misread this portion of the specification.

[00:10:18] Speaker 00:
And it does not actually support having a 60% or higher percentage of low molecular weight PEO

[00:10:24] Speaker 00:
Once you've added that, HPC is required by these particular asserted claims.

[00:10:30] Speaker 00:
And I see my time's about to expire.

[00:10:31] Speaker 00:
So if there are no further questions, I'll yield.

[00:10:34] Speaker 00:
Thank you, Your Honors.

[00:10:35] Speaker 02:
Thank you.

[00:10:36] Speaker 02:
We'll hear from Mr. Schumer.

[00:10:42] Speaker 04:
Good morning, Your Honors.

[00:10:43] Speaker 04:
May it please the court

[00:10:44] Speaker 04:
I will address why the district court decision to deny Watson's Rule 59 motion, based on the new facts surrounding Watson's amended ANDA, was an abuse of discretion that here has led to a manifestly unjust result.

[00:11:00] Speaker 04:
In the present case, Watson stands enjoined from entering the market with its non-infringing amended ANDA product.

[00:11:10] Speaker 04:
That's a product that the district court found in the second trial utilized a drying process that had been disclaimed.

[00:11:19] Speaker 01:
But the court said, I am far from sympathetic to Watson, given that they knew of Tiv's construction well before my judgment.

[00:11:28] Speaker 01:
At no time did they request a different construction.

[00:11:31] Speaker 04:
And Your Honor, the issue in the first trial addressed Watson's original ANDA manufacturing process and the batches made using that original process.

[00:11:44] Speaker 04:
And that used a different drying technique.

[00:11:48] Speaker 04:
The original process had a heated coating roll that separately applied heat from below the web.

[00:11:56] Speaker 02:
But was the court told that Watson was experimenting or planning

[00:12:01] Speaker 02:
to change or had changed?

[00:12:04] Speaker 04:
At the time of the initial trial, that work was not going on.

[00:12:10] Speaker 04:
It was after the initial trial in the context of the development of a commercialization process.

[00:12:16] Speaker 02:
But before the decision.

[00:12:18] Speaker 04:
It was before the decision, Your Honor.

[00:12:20] Speaker 04:
That is correct.

[00:12:22] Speaker 04:
But the amendment did not occur until after, and here

[00:12:29] Speaker 04:
There was nothing to be done except for a new trial on the question, which has been in dispute, as to whether or not this new process was a conventional convection process that was disclaimed in the patents.

[00:12:45] Speaker 04:
Until that process was developed and until the ammenda was filed, that issue was not ripe for the court.

[00:12:56] Speaker 04:
Whether or not the court was told before the judgment or after the judgment, Rule 59 clearly provides the ability to modify after.

[00:13:04] Speaker 04:
And the result is the same.

[00:13:07] Speaker 04:
There was no strategic litigation decision here.

[00:13:11] Speaker 04:
There was simply a commercial manufacturing process.

[00:13:15] Speaker 02:
Well, if it wasn't right, what are you complaining about?

[00:13:18] Speaker 04:
Well, at the time the Rule 59 motion was filed after judgment,

[00:13:24] Speaker 04:
At that point in time, the decision had been made to move forward with the commercial process.

[00:13:30] Speaker 04:
And in the context of an ANDA, where the court is instructed to look at the product that's likely to be brought to market, we believe at that point it was right in front of the court.

[00:13:43] Speaker 04:
And here, in fact, the judge believed that as well, because the judge held the Rule 59 motion for over a year.

[00:13:51] Speaker 04:
This is a very unique set of circumstances.

[00:13:54] Speaker 04:
not likely to reoccur.

[00:13:56] Speaker 04:
The district court below took the motion under advisement, held a second trial, took additional evidence, and made additional findings of fact and conclusions of law.

[00:14:11] Speaker 04:
Finding that process was a non-infringing process.

[00:14:14] Speaker 01:
So the first trial did not involve the process.

[00:14:22] Speaker 01:
and complimented you by calling you sophisticated, sophisticated repeat litigants.

[00:14:31] Speaker 01:
You should be bound by the litigation's decisions you made.

[00:14:36] Speaker 04:
And Your Honor, what I would say here again is it's a different process.

[00:14:39] Speaker 04:
But more importantly, that clearly doesn't make sense in the context specifically presented here.

[00:14:46] Speaker 04:
The court found that the strong public policy in bringing a generic to market was offset by finality in judicial economy, but that's just not the case here.

[00:14:56] Speaker 04:
The judgment didn't become final for over a year.

[00:15:00] Speaker 04:
The district court specifically held it after its initial decision to take new evidence about the amended process.

[00:15:09] Speaker 04:
In addition,

[00:15:10] Speaker 04:
Nothing in the judgment would prevent Watson from going back and filing a new ANDA with a new product that utilized a non-infringing, a non-infringing drying technique, which would provoke yet a new set of litigation about a process that has already been found in the second trial to be non-infringing.

[00:15:34] Speaker 04:
And indeed,

[00:15:36] Speaker 04:
The Federal Circuit has recognized that ANDA applicants, like anyone accused of patent infringement, can design around.

[00:15:46] Speaker 04:
And those are the fairing cases that we cited in our brief.

[00:15:51] Speaker 01:
So here, the fact that it's an ANDA, you're basically copying the approved product.

[00:15:59] Speaker 01:
There's only so much design around you can do.

[00:16:02] Speaker 04:
But here is a situation, as was in fairing, where there is a design around where the drying limitation and the specification disclaimer give rise to the ability to bring a non-infringing generic product to market.

[00:16:20] Speaker 04:
And it would simply be a manifest injustice where the issue was not tried.

[00:16:25] Speaker 04:
It's clear it was not tried in the original trial.

[00:16:28] Speaker 04:
It was raised to the district court after it had been determined valid for a commercialization process.

[00:16:35] Speaker 04:
It clearly was not waived.

[00:16:38] Speaker 04:
And in fact, in the new trial, the judge found that that process would not infringe the drawing limitation, which the court found was the same as between the 514 and the 497.

[00:16:50] Speaker 04:
And the last thing I would say is this situation will not reoccur.

[00:16:54] Speaker 04:
It's been clarified in the regulations, as noted in our brief.

[00:16:58] Speaker 04:
Within a week after the amendment was filed, the FDA issued new regulations which made clear that any new, any amendment such as this one would require a recertification.

[00:17:13] Speaker 04:
So we would have, we, Watson, in that scenario, had that regulation been in effect, which it is now,

[00:17:20] Speaker 04:
Watson would have had to recertify to infringement of the 514 patent.

[00:17:25] Speaker 04:
That would have provoked a new case, and that new case would have been consolidated into the existing proceedings.

[00:17:32] Speaker 04:
The end result would have been a consolidated trial exactly the same as the issues presented in the actual second case.

[00:17:39] Speaker 04:
So we think here, in order to avoid the manifest injustice of blocking a non-infringing generic product from the market and treating different litigants differently,

[00:17:50] Speaker 04:
the decision should be reversed in entry of nine.

[00:17:54] Speaker 02:
Even though that ANDA wasn't filed on the new process?

[00:17:59] Speaker 04:
The amended ANDA was submitted in September prior to the second trial.

[00:18:07] Speaker 04:
And actually the second trial specifically addressed the amended ANDA process.

[00:18:14] Speaker 04:
And it was the amended ANDA process.

[00:18:16] Speaker 02:
But the ANDA has to have been approved before this entire

[00:18:19] Speaker 02:
system can take effect, doesn't it?

[00:18:21] Speaker 04:
I'm, I'm sorry, Your Honor.

[00:18:23] Speaker 02:
Well, the ANDA filing and applying isn't what triggers this entire Hatch-Waxman procedure.

[00:18:30] Speaker 02:
It's the approval of the ANDA.

[00:18:32] Speaker 04:
It's actually the certification.

[00:18:34] Speaker 04:
When, when the ANDA is filed or now when an amended ANDA is filed, we would have to provide a certification of invalidity or non-infringement and give notice to

[00:18:47] Speaker 02:
uh... indivior and that would provoke the lawsuit okay let's hear from the other side thank you you're going to respond to both of these issues I am but additionally we have our own appeal across appeal points on infringement issues

[00:19:16] Speaker 03:
So I'll proceed as the court wishes.

[00:19:18] Speaker 03:
I was hoping to spend most of my time on our own issues that are on appeal.

[00:19:24] Speaker 01:
Well, the cross-appeal is pretty much decided, right?

[00:19:29] Speaker 01:
In the earlier case.

[00:19:30] Speaker 01:
I don't believe so.

[00:19:32] Speaker 03:
Your Honor, the earlier decision didn't address most of the infringement issues.

[00:19:38] Speaker 03:
For example, that of zone drawing.

[00:19:41] Speaker 03:
That wasn't presented because the central issue was, were the claims essentially the same

[00:19:47] Speaker 03:
in the 305 patent as in the 514 patent.

[00:19:50] Speaker 03:
Additionally, under the law, and this comes from the Supreme Court and the Kamenish case and a variety of decisions of this court outside the box, Gillette and others, that was a tentative ruling.

[00:20:05] Speaker 03:
It was on a preliminary injunction, a limited record.

[00:20:09] Speaker 03:
And there's no reason why this court cannot

[00:20:15] Speaker 03:
look at the issue afresh.

[00:20:16] Speaker 03:
Indeed, we're entitled to that, because the fact that we had already lost the Delaware court was a consideration.

[00:20:24] Speaker 03:
It's addressed in the decision making, the P.I.

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

[00:20:28] Speaker 03:
I even received a question about, doesn't the fact that we lost in Delaware undermine our position here today?

[00:20:37] Speaker 03:
We're entitled to our day in court.

[00:20:39] Speaker 03:
This is the day in which this Court should hear the appeal of the Delaware judgment.

[00:20:44] Speaker 03:
The issue hasn't been decided.

[00:20:46] Speaker 01:
The majority... On the 305 pattern...

[00:20:52] Speaker 01:
the interpretation that the disclaimer was not couched in any tentative manner as if to say for purposes of the preliminary injunction only.

[00:21:08] Speaker 01:
It was a pretty forthright statement that the panel made.

[00:21:13] Speaker 01:
The specification makes clear that a film produced using only conventional top air drawing cannot satisfy the fame limitation.

[00:21:23] Speaker 01:
We conclude that the 305 claims exclude conventional top air drive.

[00:21:28] Speaker 01:
Those are pretty forthright statements, unqualified by the nature of the proceeding.

[00:21:34] Speaker 03:
Absolutely, but they're qualified by the posture of the case.

[00:21:38] Speaker 03:
This was an appeal from a preliminary injunction ruling.

[00:21:42] Speaker 03:
There hadn't even been a claim construction hearing or briefing in the proceeding below in New Jersey.

[00:21:50] Speaker 03:
We do have that in Delaware.

[00:21:52] Speaker 03:
So the court, with time constraints, with limited briefing focused on the issues of preclusion, we believe reached the wrong decision and is free to look at it again.

[00:22:05] Speaker 03:
In Gillette, this court said that the district court is not bound by what the federal circuit did in reviewing an earlier

[00:22:16] Speaker 03:
application for a preliminary injunction.

[00:22:18] Speaker 03:
So we believe the decision's wrong.

[00:22:21] Speaker 03:
I want to set that aside for a moment.

[00:22:23] Speaker 03:
Focus on zone drying.

[00:22:25] Speaker 03:
We haven't waived that issue.

[00:22:29] Speaker 03:
In fact, the preliminary injunction appeal decision distinguishes, as the patent does, between, on the one hand, conventional drying techniques using drying ovens, tunnels, and the like.

[00:22:43] Speaker 03:
You'll find references to that in column 3 of the 514 patent.

[00:22:48] Speaker 03:
And control drying methods.

[00:22:51] Speaker 03:
One of those control drying methods is bottom drying.

[00:22:55] Speaker 03:
And that's very clear from the discussion in column 4.

[00:22:59] Speaker 03:
I'm happy to walk through this chapter and verse.

[00:23:02] Speaker 03:
But if we then move ahead to column 28 of the patent, this is where there's an embodiment that's discussed, figure 6.

[00:23:12] Speaker 03:
which the panel quoted in its decision vacating the preliminary injunction.

[00:23:18] Speaker 03:
It's a discussion of a single embodiment, figure six.

[00:23:22] Speaker 03:
This court recognized that in its decision.

[00:23:26] Speaker 03:
And the law is clear.

[00:23:28] Speaker 03:
What's said about one embodiment, it doesn't apply to every other embodiment in the patent.

[00:23:33] Speaker 03:
And when we look forward and we see other embodiments discussed, figure six and seven are restricted to bottom drawing.

[00:23:41] Speaker 03:
Figure eight, the drawing shows bottom drying, but it's not required.

[00:23:47] Speaker 03:
Then we have a reference to the Magoon teaching.

[00:23:51] Speaker 03:
And then we come to columns 32 and 33.

[00:23:55] Speaker 03:
And that's the description of zone drying.

[00:23:57] Speaker 03:
No mention of top air or bottom air.

[00:24:00] Speaker 03:
And that's what DRL uses.

[00:24:03] Speaker 03:
They're using the exact zone drying described in the patent, a stepped up drying effect with the temperature

[00:24:11] Speaker 03:
increased from zone to zone, it follows that teaching of the patent.

[00:24:17] Speaker 03:
That's not subject, can't be subject to any disclaimer.

[00:24:20] Speaker 03:
There's no way that Column 28 in its description of the embodiment of Figure 6 or Column 3 with its discussion of conventional drying technology can disclaim other embodiments.

[00:24:33] Speaker 03:
The question is, read as a whole, is there a disclaimer of anything?

[00:24:38] Speaker 03:
There certainly can't be of

[00:24:40] Speaker 03:
solely conventional convection air drying from the top, that's a statement about one embodiment, Figure 6 in Column 28.

[00:24:49] Speaker 03:
So we think that the panel got it wrong before, but additionally, it didn't address the issue of zone drying.

[00:24:58] Speaker 03:
Zone drying is something that's a separate controlled drying element.

[00:25:02] Speaker 03:
It's one, a controlled drying method.

[00:25:05] Speaker 03:
It's the method that the DRL follows, exactly as it's taught in the patent

[00:25:10] Speaker 03:
The patent even says that this is a method that will avoid skinning, which the patent elsewhere uses interchangeably with Ripley.

[00:25:22] Speaker 03:
So the decision of the, the, in the context of the preliminary injunction, not only is it not binding, it's wrong, and it doesn't address fundamental issues of infringement.

[00:25:34] Speaker 03:
It couldn't have the issues then at hand.

[00:25:37] Speaker 03:
We had to accept what the Delaware court did.

[00:25:40] Speaker 03:
and then argue whether the claims were essentially the same.

[00:25:44] Speaker 03:
So for all those reasons, we don't see how the preliminary injunction appeal could possibly bind litigants in this proceeding on a different patent and bound by a decision that's labeled non-precedential.

[00:26:00] Speaker 03:
So it's non-binding, non-precedential, and we encourage the Court to look closely at that.

[00:26:05] Speaker 03:
I think read closely.

[00:26:07] Speaker 03:
It doesn't look like any dissimilar case.

[00:26:09] Speaker 01:
The non-presidential aspect of it doesn't affect what this panel should do with respect to that clamp construction issue.

[00:26:21] Speaker 01:
There's no rule of law that's stated there that isn't binding by virtue of it being non-presidential.

[00:26:33] Speaker 01:
That's not your best argument.

[00:26:34] Speaker 03:
I'm sorry?

[00:26:35] Speaker 01:
That's not your best argument.

[00:26:36] Speaker 03:
Okay.

[00:26:37] Speaker 03:
Well, then our best argument is it's tentative based on a limited record.

[00:26:43] Speaker 03:
The Court didn't have the district courts ever changing claim constructions before it then.

[00:26:50] Speaker 03:
So we have claim constructions that morph from case to case.

[00:26:55] Speaker 03:
Now, and we've detailed this in the brief.

[00:26:58] Speaker 03:
The first go-round, there is no disclaimer that attaches, presumably because

[00:27:04] Speaker 03:
I think that was the phrase, they didn't see this clear and unmistakable disclaimer.

[00:27:13] Speaker 03:
Then in the next case, there is a disclaimer, and it's found to be solely conventional convection air drawing from the top.

[00:27:22] Speaker 03:
And the district court inserted the word solely because there were embodiments using top air.

[00:27:29] Speaker 03:
And then it came to rippling.

[00:27:31] Speaker 03:
Rippling is the touchstone.

[00:27:33] Speaker 03:
for whether or not something is disclaimed.

[00:27:36] Speaker 03:
That's in the alvagen opinion, which was applied, purportedly applied, in the trial decision here.

[00:27:43] Speaker 03:
And then in the trial decision, we have yet what is in effect a new claim construction, where the focus is on, is the convention, is the process used as a whole conventional?

[00:27:56] Speaker 03:
This is where the original disclaimer was in terms of, is the top drying used?

[00:28:03] Speaker 03:
by itself to dry, and is it conventional?

[00:28:06] Speaker 03:
And now it's about the process as a whole, including the bottom drying, which the district court said was done in such a way that the drawing from the bottom approached that of the top.

[00:28:21] Speaker 01:
I want to ask you about the 150 patent and its entitlement to the filing date of the earlier application.

[00:28:37] Speaker 01:
Your opponent said the earlier application adequately discloses high molecular weight and low molecular weight, PEO.

[00:28:52] Speaker 03:
I'm sorry, Your Honor.

[00:28:52] Speaker 03:
I missed the last bit.

[00:28:54] Speaker 01:
PEO, high molecular weight and low molecular weight.

[00:28:58] Speaker 03:
So there are factual findings made based on testimony received.

[00:29:03] Speaker 03:
This is an issue of fact, the entitlement to the

[00:29:07] Speaker 03:
to the priority date.

[00:29:11] Speaker 03:
And the 902 application is very clear.

[00:29:15] Speaker 03:
It gives direction about how much of the low molecular weight PO to be used.

[00:29:21] Speaker 03:
It's up to 60% of the PO blend.

[00:29:27] Speaker 03:
It says the PO blend polymer component.

[00:29:31] Speaker 03:
But the court understood that based on the testimony to be the entirety

[00:29:36] Speaker 03:
of the polymer component.

[00:29:38] Speaker 03:
Right below that, you have a reference to HCP being part of this embodiment.

[00:29:44] Speaker 03:
And all of this is in a description in the 902 application of a particular embodiment with special properties.

[00:29:54] Speaker 03:
So we think it's clearly here.

[00:29:57] Speaker 03:
And it says right below that, to balance these properties, this is the appendix at 70035.

[00:30:06] Speaker 03:
Desirable film compositions may include about 50% to 75% low molecular weight PO.

[00:30:13] Speaker 03:
And then it's optionally combined with the HCP.

[00:30:18] Speaker 01:
Earlier in the 902 application.

[00:30:20] Speaker 01:
Another point to your cross appeal regarding the 832 patent.

[00:30:25] Speaker 03:
I'm sorry?

[00:30:25] Speaker 03:
The 832 patent.

[00:30:27] Speaker 03:
So that doesn't seem to be contested.

[00:30:29] Speaker 03:
They have a joint issue on it.

[00:30:31] Speaker 03:
The 832 patent.

[00:30:34] Speaker 03:
The claims were invalidated on the specific ground of obviousness.

[00:30:39] Speaker 03:
The Delaware court rejected the contention that it was anticipated by Lab Tech.

[00:30:48] Speaker 03:
And in the intervening period, the PTAB invalidated the same claims, claims 15 through 19, because they were anticipated by Lab Tech.

[00:31:02] Speaker 03:
Under Fresenius, the proper procedure should be that the decision of the district court on those issues should be vacated.

[00:31:12] Speaker 03:
We don't have an ability to appeal anymore because those claims don't exist.

[00:31:18] Speaker 03:
They've been canceled as a result of the PTAP proceeding.

[00:31:24] Speaker 03:
I see that I'm over my time.

[00:31:27] Speaker 02:
Yes, we will save you rebuttal.

[00:31:30] Speaker 02:
Let's proceed with the other side.

[00:31:31] Speaker 03:
Thank you.

[00:31:38] Speaker 02:
The three minutes that we have saved.

[00:31:40] Speaker 00:
Thank you, Your Honor.

[00:31:42] Speaker 00:
OK, so Your Honors, turning to the cross-appeal, we think it's fairly clear if you look at the decision in Endivier 1 that the question of specification disclaimer was clearly joined.

[00:31:56] Speaker 00:
That was not just a case about claim preclusion.

[00:31:59] Speaker 00:
And in fact, when you look at the slip opinion, the majority slip opinion from pages 8 to 19, that is all about specification disclaimer.

[00:32:06] Speaker 01:
What about the zone grind?

[00:32:08] Speaker 00:
So the zone drying, Your Honor, was extensively briefed in the Indivudor 1 case.

[00:32:12] Speaker 00:
I was kind of surprised to hear that zone drying wasn't before the court.

[00:32:16] Speaker 00:
If you look at plaintiffs brief in that case, from pages 9 to 10, 45 to 46, and 49 to 50, you will see them arguing about zone drying.

[00:32:26] Speaker 00:
Now was zone drying preserved in this case?

[00:32:29] Speaker 00:
It wasn't.

[00:32:30] Speaker 00:
We made the point in our response to their cross appeal that it wasn't preserved.

[00:32:35] Speaker 00:
And what did they come back with in their reply brief?

[00:32:37] Speaker 00:
They said it was preserved in two ways.

[00:32:39] Speaker 00:
First, they said they argued zone drying in their post-trial brief.

[00:32:44] Speaker 00:
You can't preserve what is effectively a claim construction argument in your post-trial brief.

[00:32:48] Speaker 00:
If they had made this argument earlier in the case, obviously questions like validity and infringement would have been developed very differently by the experts in a trial.

[00:32:56] Speaker 01:
In any event, how does the discussion in the patent relating to zone drying relate to the construction of drying that we've made in the earlier case?

[00:33:10] Speaker 00:
Well, so the discussion and the specification of zone drying says nothing about where the air is coming from.

[00:33:15] Speaker 00:
It certainly does not say that the air is coming from the top in a conventional manner.

[00:33:19] Speaker 00:
What it does say is that when you're using a zone dryer,

[00:33:22] Speaker 00:
drying must be performed in accordance with the invention and in a controlled manner in accordance with the invention.

[00:33:28] Speaker 00:
And the invention only discusses three types of drying, controlled bottom drying, microwave drying, or some mix of top and bottom drying where the bottom drying is doing most of the work.

[00:33:39] Speaker 00:
And now this brings us to the district court's factual finding that as construed, Dr. Reddy's does not infringe the patent.

[00:33:47] Speaker 00:
Because what the district court found was that plaintiffs, in many ways, dropped the ball in trial and during their development of the evidence, because they did not take measurements within the oven to see what amount of heat was above the matrix or below the matrix.

[00:34:02] Speaker 00:
They didn't measure the air flow.

[00:34:04] Speaker 00:
So the plaintiffs simply did not meet any kind of burden of production or proof to show that the majority of the drying was occurring below the film.

[00:34:14] Speaker 00:
What the district court did find, and this is a factual finding, which we do not see a challenge to on this in their briefing.

[00:34:20] Speaker 00:
This is at page 150 in the appendix.

[00:34:23] Speaker 00:
The district court found that looking at the way we operate our dryer, it's conventional.

[00:34:29] Speaker 00:
In a quote, in a conventional coating and drying equipment, a person of skill in the art could control the temperature, the line speed, the air velocity, the direction of the air nozzles, in order to produce a desired product.

[00:34:42] Speaker 00:
plaintiffs do not argue that the district court's factual finding that a conventional oven would have all of these controls and that a person of skill in the art as of 2001 could use those controls in the way we do to come up with a uniform product was wrong.

[00:34:59] Speaker 00:
And they couldn't argue that because there was plenty of evidence at trial, including from their own expert.

[00:35:04] Speaker 00:
I would suggest, for example, pages 27, 887 to 88 in the appendix.

[00:35:10] Speaker 00:
Their expert testified that these were conventional controls.

[00:35:13] Speaker 00:
Our expert certainly testified that these were conventional controls.

[00:35:16] Speaker 00:
And so based on that finding, the district court found that we're not doing anything that wasn't known in the art as of 2001 when it comes to drawing films.

[00:35:26] Speaker 00:
You know, there's the issue.

[00:35:27] Speaker 00:
You know, one of the arguments that they often make is that, well, we have a uniform film at the end of the day, so we must be doing something unconventionally.

[00:35:34] Speaker 00:
The district court's claim construction was very clear.

[00:35:38] Speaker 00:
that while our method of drying may be associated with the rippling effect and with a lack of uniformity, there are ways, for example, using these various controls for somebody through an, you know, iterative experimentation with various parameters to obtain the desired level of, of uniformity.

[00:35:55] Speaker 00:
That's what we did.

[00:35:55] Speaker 00:
It was, it was nothing novel.

[00:35:56] Speaker 00:
It was nothing that they can obtain a monopoly to.

[00:36:00] Speaker 00:
Okay.

[00:36:01] Speaker 00:
So.

[00:36:01] Speaker 00:
Thank you.

[00:36:01] Speaker 00:
Thank you.

[00:36:04] Speaker 02:
Mr. Smith, you have one minute.

[00:36:06] Speaker 02:
You'll have to talk fast.

[00:36:08] Speaker 04:
Thank you, Your Honors.

[00:36:11] Speaker 04:
A statement that was made was that in the initial trial, there was no specification disclaimer, no claim construction proffered with respect to the drying limitation.

[00:36:26] Speaker 04:
And I think what's clear here is, again, Watson's original and described a drying process that utilized a heated coating rule.

[00:36:38] Speaker 04:
And that's not in dispute.

[00:36:40] Speaker 04:
And Watson's experts have consistently said that that heated coating rule was there to specifically apply heat from below the web in order to set the film at the time that it was cast.

[00:36:53] Speaker 04:
That was in the original trial, Dr. McConville.

[00:36:56] Speaker 04:
And that's in the trial opinion in the record at 111.

[00:36:59] Speaker 04:
And as well, Mr. Goglin, who testified in the second trial,

[00:37:07] Speaker 04:
He was asked at his deposition about that process.

[00:37:11] Speaker 04:
And he specifically conceded that it was used to set or freeze the film.

[00:37:19] Speaker 04:
And when asked how that was accomplished, he said by applying heat from below the web.

[00:37:25] Speaker 04:
So at no point in time did Watson use a solely top-air drying in connection with the original ANDA.

[00:37:34] Speaker 04:
So there was no reason to proffer a claim construction at that time.

[00:37:41] Speaker 04:
And for that reason, there is no preclusive effect.

[00:37:47] Speaker 04:
And Watson's amended ANDA, which does not make use of a heated coating rule,

[00:37:54] Speaker 04:
was found not to infringe the drawing limitation of the 497 patent as properly construed, which the court found was the same as the 514.

[00:38:04] Speaker 04:
And again, we think it would be a manifest injustice to block a generic from the market where the court actually took the time to have a second trial that, in the rare circumstances presented here, was already on calendar at the time.

[00:38:19] Speaker 04:
the Rule 59 motion was presented, and yet still block the product from the market.

[00:38:27] Speaker 02:
Thank you.

[00:38:28] Speaker 04:
Thank you.

[00:38:28] Speaker 02:
Mr. Ellicott, you had the last word on the cross appeal.

[00:38:32] Speaker 03:
Thank you.

[00:38:34] Speaker 03:
I believe that when you check the briefs below, you'll see that the discussion of zone drawing was in the context of, I believe, the written description issue.

[00:38:45] Speaker 03:
In any event, that's a different appeal

[00:38:48] Speaker 03:
We're here on the 5-1-4 patent, and the law is clear that we're entitled to our day in court.

[00:38:55] Speaker 03:
And I think, as well, the decision of reached by the panel in the preliminary injunction is wrong.

[00:39:01] Speaker 03:
Let me give a couple of examples.

[00:39:03] Speaker 03:
Column 4, line 61 through 62, states that there is an alternative to any control drawing method, and that's selecting

[00:39:15] Speaker 03:
polymers that will themselves provide a viscosity so that drying, it's an alternative to control drying entirely.

[00:39:25] Speaker 03:
We don't, we haven't heard anything about that in the briefing or anywhere else.

[00:39:31] Speaker 03:
That's part of this patent.

[00:39:32] Speaker 03:
It can't be the case that the drying methods are then restricted in some way.

[00:39:38] Speaker 03:
I want to also point to column 23,

[00:39:43] Speaker 03:
And this is at the appendix at 344.

[00:39:47] Speaker 03:
And what you'll see at 21 through 24 is a reference to interaction of the different steps.

[00:39:55] Speaker 03:
Okay.

[00:39:55] Speaker 03:
Obviously, as a matter of science, what drawing methods will work and what won't work will depend upon other steps in the process.

[00:40:04] Speaker 03:
That's what the patent's explaining here.

[00:40:06] Speaker 03:
It explains it elsewhere, too, detailing the best ways to mix, to cast,

[00:40:12] Speaker 03:
There is no statement here that could possibly amount under this Court's precedent to clear an unmistakable disclaimer.

[00:40:22] Speaker 03:
We were told that the issue of zone drying was waived.

[00:40:25] Speaker 03:
We've provided three sites, I believe, three arguments as to why there can't be any waiver here.

[00:40:32] Speaker 03:
First, we were arguing for the plain meaning.

[00:40:34] Speaker 03:
initially.

[00:40:35] Speaker 03:
That was our position.

[00:40:37] Speaker 03:
So we can't be weaving arguments about what is or isn't included in the disclaimer that the court eventually reached.

[00:40:46] Speaker 03:
The second is, in the Alvagen proceedings, and the Delaware District Court took the claim construction results and applied them in the DRL case, we argue about zone drying there.

[00:40:56] Speaker 03:
Whatever conventional convection air drying from the top means, it doesn't mean zone drying.

[00:41:01] Speaker 03:
We just heard Mr. Martin say,

[00:41:04] Speaker 03:
example is does not restrict where the air comes from, and that's clear not only from the description, but from the figures to which it refers, figures 35 and 36.

[00:41:15] Speaker 03:
So whatever could possibly have been disclaimed in this ever-changing scope of disclaimer, it doesn't include zone drying, which this Court, in its decision vacating the preliminary injunction,

[00:41:32] Speaker 03:
would have described as a controlled drying method.

[00:41:36] Speaker 03:
It distinguished between controlled drying methods and conventional drying techniques solely from the top, with the latter of which it said was disclaimed.

[00:41:45] Speaker 03:
It distinguished those from controlled drying methods.

[00:41:48] Speaker 03:
Column 32 identifies zone drying as another method of controlled drying a little later in the column.

[00:41:55] Speaker 03:
It specifically says that it's of the present invention.

[00:41:59] Speaker 03:
So the judgment of non-infringement here should be reversed.

[00:42:04] Speaker 03:
This was the only element purportedly not met.

[00:42:08] Speaker 03:
We don't believe there's any basis for a disclaimer.

[00:42:11] Speaker 03:
But if there is, zone drawing can't possibly fit within.

[00:42:16] Speaker 03:
Do Your Honor have further questions about any of this, sir?

[00:42:19] Speaker 02:
I think that's for this case.

[00:42:23] Speaker 02:
raised to all the issues.