[00:00:00] Speaker 03:
The next object case is number 192418 by Health Care LLC against Bacalca, Incorporated.

[00:00:09] Speaker 03:
Mr. Haug.

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

[00:00:12] Speaker 00:
If it pleases the Court, this is Ed Haug for the Appellant Bax Falta.

[00:00:16] Speaker 00:
And we are asking for the judgment of infringement of the 520 patent to be reversed because of the claim construction, which was

[00:00:26] Speaker 00:
claim construction of claim one, which was wrong as a matter of law for at least two reasons.

[00:00:32] Speaker 00:
We also ask that if the claim construction survives this appeal, then the 520 patent is invalid for lack of enablement as to non-random lysine conjugation.

[00:00:45] Speaker 00:
And if the court were not to disturb the infringement or validity rulings, then we also are appealing the damage award, which we think as a matter of law

[00:00:56] Speaker 00:
was erroneous and should be vacated.

[00:01:00] Speaker 00:
So with that, I'd like to start, of course, with the claim construction, which, as I said, I think is wrong for at least two reasons.

[00:01:07] Speaker 00:
The district court construed the claim, the operative element of the claim, to require a polypeptide conjugate where the conjugation was not random.

[00:01:20] Speaker 00:
The word random does not appear in the claim.

[00:01:22] Speaker 00:
It only appears in the claim construction.

[00:01:25] Speaker 00:
However,

[00:01:26] Speaker 00:
That was the result of the specification which we believe clearly teaches away from random pegulation by lysines and also a disclaimer during the file history in which the patentee or the applicant clearly disclaimed any conjugation with reactive groups where it is of random, namely amine or lysines.

[00:01:54] Speaker 00:
and does not ensure that attachment occurs at the B domain, and I'm referring to their appeal brief, which is cited throughout our brief.

[00:02:05] Speaker 00:
And so the disclaimer was found by the court.

[00:02:08] Speaker 00:
That was not appealed by Bayer here, so there is a disclaimer.

[00:02:12] Speaker 00:
And between the disclaimer and the specification itself,

[00:02:17] Speaker 00:
we believe that the claim's instruction should have been so as to exclude conjugation at amines and lysines.

[00:02:27] Speaker 00:
And then further, what also happened here is because the parties did not agree on what random might mean, and this is in response to direct questions from the court during Markman, Bayer said it's susceptible to many meanings,

[00:02:43] Speaker 00:
We gave our definition of random, which was excluding conjugation at amines or lysines.

[00:02:51] Speaker 00:
The court did not adopt either one of those or any of those definitions, but just used the words not random in its claim construction.

[00:03:00] Speaker 00:
And later in the case, before trial, we asked the court to clarify or construe what it meant by not random.

[00:03:09] Speaker 00:
It was clear that there was a dispute between the parties going into trial and the court refrained and declined our request to construe what it meant by not random.

[00:03:23] Speaker 00:
And as a result, we went to trial where both sides were arguing to a jury whether the adinavate, the accused product here, was random or not in its conjugation.

[00:03:38] Speaker 00:
Each side had a different version of what it believed not random meant.

[00:03:43] Speaker 00:
And the court was clear in its claim construction during trial that the only construction is the construction that it gave in its order of July 5th, 2018.

[00:03:54] Speaker 00:
And that was the sole extent of the construction.

[00:03:59] Speaker 00:
And so it's a classic case, I believe, of pre-Markman, where the litigants went to the jury and each argued

[00:04:07] Speaker 00:
what an important key feature of the claim meant, and they left it up to the jury to make its decision on whether or not there was infringement or validity.

[00:04:20] Speaker 02:
Mr. Howe?

[00:04:21] Speaker 02:
This is Judge Lynn.

[00:04:24] Speaker 02:
I understand from the prosecution history where the disclaimer of random conjugation originated, but I don't find anywhere

[00:04:38] Speaker 02:
that suggests that the disclaimer goes as far as you would request for a disclaimer of amine or lysine conjugation.

[00:04:48] Speaker 02:
Can you help me on that?

[00:04:50] Speaker 00:
Certainly, yes.

[00:04:51] Speaker 00:
Yes, Judge Lane.

[00:04:52] Speaker 00:
So in the disclaimer, which appears at appendix 4599, that's the appeal brief excerpt, where it talks about claim 58, which becomes claim one in the patent,

[00:05:05] Speaker 00:
They're distinguishing over the prior R, which is the Bossard patent, which has lysines both in the B domain and outside the B domain.

[00:05:15] Speaker 00:
And they're distinguishing over that by saying much of the patent office's prior arguments relied upon possible conjugation at amines or coboxy sites, which are present not only in the B domain, but in other domains.

[00:05:31] Speaker 00:
That is the Bossard reference.

[00:05:33] Speaker 00:
Any conjugation with these reactive groups, namely the amine or carboxy sites, is random and does not ensure that attachment occurs at the B domain.

[00:05:45] Speaker 00:
I think the language is very, very clear that they are here disclaiming conjugation with reactive groups such as amines or carboxy sites, which are random.

[00:05:57] Speaker 00:
And that's what they're distinguishing over here in the disclaimer portion of the file history.

[00:06:03] Speaker 00:
And that is entirely consistent with the disclosure in the patent such as that column three to column four where they talk about random modification of factor eight and they talk about the problems associated with lysine conjugation of factor eight, which has to be random because there are 158 sites in factor eight, 158 lysine sites both within the B domain and outside the B domain.

[00:06:32] Speaker 00:
And there is no way to peggalate to any one particular site.

[00:06:37] Speaker 00:
And that's why it's random.

[00:06:39] Speaker 00:
And what they distinguished over was what is disclosed in the patent, which is cysteine peggalation, which is site-specific, meaning that the conjugation will always be at that particular site, which is in the B domain, only one site.

[00:06:55] Speaker 00:
And that's the only way to retain functional factor 8 activity, which is another

[00:07:01] Speaker 00:
requirement in the claim as part of the claim construction.

[00:07:06] Speaker 00:
And so this whole argument about the disclaimer and the disclosure and the patent also goes to the non-enablement issue, to the non-enablement issue because there's simply nothing in the disclosure here in the intrinsic record that tells a person of ordinary skill and the art how you could possibly conjugate

[00:07:28] Speaker 00:
amines or lysines in a non-random way.

[00:07:32] Speaker 00:
Indeed, it teaches away from that and says you can't.

[00:07:35] Speaker 00:
And that's what they're distinguishing over.

[00:07:37] Speaker 00:
It's the point of novelty really to this whole patent.

[00:07:40] Speaker 00:
And so if the claim construction as it sits now, putting aside the problem of not even really knowing what is meant by not random in the court's claim construction, if that claim construction is left to be so broad

[00:07:55] Speaker 00:
as to include lysine conjugation, it's invalid for lack of enablement.

[00:08:02] Speaker 00:
There's nothing, the examples are all to cysteine pegalation.

[00:08:07] Speaker 00:
There's nothing in the description other than as I pointed out in the background where they're teaching away from lysine conjugation.

[00:08:16] Speaker 00:
And that's the, and as I go back to my original point on where we were left with with the jury is

[00:08:23] Speaker 00:
The whole trial became whether we're talking about a random process or a non-random process.

[00:08:30] Speaker 00:
But we were using different views of what random and not random meant.

[00:08:35] Speaker 00:
And that's legal error.

[00:08:36] Speaker 00:
The court, I think, was obligated to make that clear to the parties, but more importantly, to the jury.

[00:08:44] Speaker 00:
And that didn't happen in this case.

[00:08:47] Speaker 00:
And I also point to the spec again at column 3, line 50 to column 4 lines, I think line

[00:08:53] Speaker 00:
20, lysine conjugation is much more problematical.

[00:08:59] Speaker 00:
That is what they were distinguishing over in the prior art, in their disclaimer, and in the rest of the intrinsic record.

[00:09:09] Speaker 00:
And as I said, unfortunately, we saw this problem brewing before the trial and asked the court to help and construe

[00:09:21] Speaker 00:
what it meant by its construction, effectively, and we were unable to get that clarification.

[00:09:28] Speaker 00:
And that carried through the trial.

[00:09:33] Speaker 00:
I hope I answered your question, Jeswin.

[00:09:36] Speaker 02:
Yes, although I have a follow-up.

[00:09:38] Speaker 02:
Is there any way to assure conjugation focused on the B domain

[00:09:47] Speaker 02:
other than to restrict lysine conjugation?

[00:09:52] Speaker 02:
In other words, does conjugation have to be focused on cysteines in order to focus on or target the B domain?

[00:10:03] Speaker 00:
I think the answer is yes, based on the intrinsic record, based on what this patent says in its descriptions and all of the examples in the patent.

[00:10:15] Speaker 00:
There are other, obviously there are other amino acids that are in factor eight, but this patent is only really talking about site-specific cysteine, which is the only one that is shown to work.

[00:10:26] Speaker 04:
Council, this is Judge Stoll.

[00:10:28] Speaker 04:
Did the jury hear any expert testimony that would be contrary to what you just said?

[00:10:34] Speaker 04:
That is, did the jury hear any expert testimony about how lysine pegalation could be targeted to the

[00:10:43] Speaker 04:
to the B area.

[00:10:45] Speaker 04:
Sorry, I'm forgetting the name of it.

[00:10:47] Speaker 04:
I apologize.

[00:10:48] Speaker 00:
The B domain, the B domain, Joseph.

[00:10:51] Speaker 00:
Well, the experts were not permitted to talk at all about plant construction.

[00:10:55] Speaker 00:
There was an explicit direction from

[00:10:58] Speaker 00:
the trial judge not to allow the witnesses to talk about... But this is a factual issue, isn't it?

[00:11:03] Speaker 04:
I mean, this is like an underlying factual issue that might go to enablement as well.

[00:11:09] Speaker 04:
And so, could you just answer my question before you tell me why it doesn't matter?

[00:11:15] Speaker 04:
It was a yes or no question.

[00:11:16] Speaker 04:
Expert testimony or not?

[00:11:19] Speaker 00:
I think the answer is no.

[00:11:21] Speaker 04:
Okay.

[00:11:22] Speaker 04:
Thank you.

[00:11:23] Speaker 03:
All right.

[00:11:25] Speaker 03:
Let's hear from the other side.

[00:11:26] Speaker 03:
In fact, I'd like to hear Mr. Badke's view on this same question.

[00:11:35] Speaker 03:
Mr. Badke.

[00:11:35] Speaker 01:
Thank you, Your Honor.

[00:11:37] Speaker 01:
May it please the Court?

[00:11:38] Speaker 01:
In answer to, I think, the Judge Stoll's question, there was extensive expert testimony on peggalation of life-threatening

[00:11:48] Speaker 01:
And in addition to that, there was extensive evidence or the experts and fact-witnesses talked about numerous admissions to the FDA, including testimony that went to controlled targeted pegalation at the B-domain, predominantly their product adenovate pegalated at the B-domain, 73% of factor 8 adenovate pegalated in the B-domain.

[00:12:15] Speaker 01:
Um, Judge Andrews found this, uh, on the J-Mall.

[00:12:17] Speaker 01:
He said that there was substantial evidence, um, in the record, including the FDA admissions.

[00:12:24] Speaker 01:
And so the experts spoke about this.

[00:12:26] Speaker 01:
Um, it is a fact question.

[00:12:28] Speaker 01:
The jury came out squarely against them.

[00:12:31] Speaker 01:
So Judge, so I don't know if that answers your question, but the evidence was extensive.

[00:12:36] Speaker 04:
Do you have any particular sites you'd like to share with the court?

[00:12:40] Speaker 03:
All right.

[00:12:42] Speaker 03:
So Mr. Badki, I only heard the first

[00:12:43] Speaker 03:
half of the first part of what you were saying.

[00:12:50] Speaker 01:
I'm sorry, Your Honor.

[00:12:51] Speaker 01:
I'm not sure where you dropped off.

[00:12:53] Speaker 01:
What I was going to say, what I was saying is that there was extensive expert testimony about the pegelation of lysines at the B domain, which was supported in substantial part by FDA admissions.

[00:13:06] Speaker 01:
And there were numerous FDA admissions

[00:13:10] Speaker 01:
to that effect, including they told the FDA that the B domain was a hot spot, that there was controlled targeted addition of PEG, which is the opposite of random pegalation.

[00:13:24] Speaker 01:
There was an FDA document that 73% of factor VIII and adenovated pegalated in the B domain.

[00:13:30] Speaker 01:
The pegalation was predominantly in the B domain, and in fact, the FDA,

[00:13:35] Speaker 01:
in an early meeting in 2009 with Baxalta, actually told Baxalta that your active molecules are those that are pegalated in the B domain.

[00:13:46] Speaker 01:
We give those sites extensively.

[00:13:48] Speaker 01:
We cite to all of those instances in our brief, including, I can tell you, the 73% of PEG attachment sites in the B domain is at appendix 37076.

[00:14:03] Speaker 01:
The control targeted chemical addition in the B domain is at 36937 and so forth.

[00:14:15] Speaker 01:
I mean, it's on page 43 of our brief for the sites.

[00:14:19] Speaker 01:
So there was extensive evidence to that effect and there was really no question.

[00:14:24] Speaker 01:
The evidence at trial was really rather overwhelming with respect to the amount

[00:14:31] Speaker 01:
of pegelation in the B domain.

[00:14:32] Speaker 01:
The jury also heard from one of our experts, Dr. Pla, and we do cite this in our brief about how all they needed to do was optimize some pegelation conditions to favor pegelation at the B domain.

[00:14:48] Speaker 01:
And that testimony would be from Dr. Pla.

[00:14:51] Speaker 01:
It's appendix 654 to 71.

[00:14:55] Speaker 01:
They did very little.

[00:14:57] Speaker 01:
Once they learned the novel aspect of the claims, which was non-random pegalation at the B-domain, it was very easy for them to proceed and to center pegalation in the B-domain.

[00:15:12] Speaker 01:
If there's no other questions on that, I'll turn next to claim construction.

[00:15:17] Speaker 02:
Okay.

[00:15:17] Speaker 02:
Mr. Basquez, this is Judge Lynn.

[00:15:19] Speaker 01:
Yes.

[00:15:20] Speaker 02:
How would you isolate or target the B-domain without

[00:15:25] Speaker 02:
eliminating conjugation of lysine?

[00:15:32] Speaker 01:
Well, what you do is if your honor takes a look at appendix 654 to 71, that's the testimony of Dr. Plough, there are certain reaction conditions that are performed in every pegalation reaction.

[00:15:47] Speaker 01:
One of them is the inclusion of calcium.

[00:15:49] Speaker 01:
Another one is you adjust pH.

[00:15:51] Speaker 01:
Another one is you consider the ratio of PEG to factor 8.

[00:15:55] Speaker 01:
And then the fourth one is plunging.

[00:15:57] Speaker 01:
In other words, when do you stop the reaction?

[00:15:59] Speaker 01:
And so if you take a look at his testimony, he references an exhibit that was before the jury, PTX446.

[00:16:07] Speaker 01:
That was a document submitted to the FDA.

[00:16:10] Speaker 01:
And there, Baxalta told the FDA what they had to do with respect to those four specific reaction conditions.

[00:16:18] Speaker 01:
to achieve B-domain pegalation.

[00:16:21] Speaker 01:
And I'll take one as an example, calcium.

[00:16:23] Speaker 01:
They just increase the number of calcium.

[00:16:25] Speaker 01:
And what that does, and this was known as early as 1990, 15 years before the application was filed, what calcium does with factor VIII is it exposes the tail-like structure of factor of the B-domain so that it's more available for pegalation.

[00:16:42] Speaker 01:
They adjust the pH so that lysines are more reactive, and then they just

[00:16:47] Speaker 01:
had a couple of runs in their optimizing of the amount of PEG to factor 8.

[00:16:54] Speaker 01:
And then they just quenched it after the B domain was relatively full of the PEGs.

[00:17:01] Speaker 01:
And so that's all they did.

[00:17:02] Speaker 01:
I would put that in the category of optimizing rather than experimenting.

[00:17:09] Speaker 02:
So in other words, it's not just the

[00:17:12] Speaker 02:
amino acids, it's the overall conditions under which the conjugation takes place that affects the ultimate result, right?

[00:17:24] Speaker 01:
Well, I would say that's partially true.

[00:17:27] Speaker 01:
The conditions that are present in a lysine reaction are the same

[00:17:33] Speaker 01:
conditions, category of conditions that are available in a cysteine reaction.

[00:17:38] Speaker 01:
It's just you may need to optimize them with a lysine in order to direct the PEG to the factor VIII.

[00:17:47] Speaker 01:
So the reaction conditions are the same.

[00:17:48] Speaker 01:
It's not like they needed to introduce some new type of reaction condition.

[00:17:53] Speaker 01:
It's the same reaction conditions.

[00:17:55] Speaker 01:
The processes, they're substantially similar.

[00:18:00] Speaker 02:
All right, what I'm trying to get at is the extent to which the prosecution history we discussed a minute ago at appendix page 4599 in clearly disavowing random peggalation is or is not also a disclaimer of lysine peggalation.

[00:18:24] Speaker 01:
Well, I mean, one reason, Your Honor, is that the prior art that was distinguished Beaux-Arts disclosed not just lysine but also cysteine pegalation and pegalation at arginine.

[00:18:39] Speaker 01:
And you can take a look at Bayer's appeal brief, which was on page 3507, where Bayer was responding to the examiner's rejection.

[00:18:49] Speaker 01:
And there was a reference there to the fact that lysine, cysteine, and arginine were in the prior art.

[00:18:54] Speaker 01:
So it could not have been the case that Bayer also disclaimed lysine pegalation.

[00:19:01] Speaker 01:
But if you take a look throughout the prosecution history, you can see that consistently, Bayer was distinguishing random pegalation and not lysine pegalation.

[00:19:18] Speaker 02:
What's your understanding of random?

[00:19:22] Speaker 01:
Well, I think that Mr. Howe doesn't point out that in his opening, he actually gave the jury what that means.

[00:19:32] Speaker 01:
He said random means you don't know where it's going.

[00:19:35] Speaker 01:
And if you can't find a target or can't hit a target, it's random.

[00:19:39] Speaker 01:
The jury here heard plenty of evidence about the target being hit.

[00:19:43] Speaker 01:
And in fact, that's a word that was in their FDA documents.

[00:19:46] Speaker 01:
But that meaning was known throughout the trial.

[00:19:49] Speaker 01:
The experts and the witnesses basically had all of the same understanding.

[00:19:54] Speaker 01:
One of their star witnesses, Dr. Bosard, said, pegs just go everywhere.

[00:19:59] Speaker 01:
One of our inventors, Dr. Murphy, said, you're not sure where peg is going.

[00:20:02] Speaker 01:
Dr. Pla, one of our experts, said, pegalation without regard to location.

[00:20:07] Speaker 01:
There was no confusion as to what the word random meant.

[00:20:11] Speaker 01:
And indeed, Baxalta.

[00:20:15] Speaker 01:
They were pushing this construction of amine pegalation.

[00:20:21] Speaker 01:
Amine, if you pegalate with amines, it means that it is random.

[00:20:26] Speaker 01:
But they dropped that before they got to trial.

[00:20:32] Speaker 01:
And then Mr. Haug gave this new definition, which was random means you don't know where it's going.

[00:20:36] Speaker 01:
And now on appeal, they're now arguing a different meaning for the term, which is that conjugation occurs at multiple amino acid sites.

[00:20:46] Speaker 01:
So they've been inconsistent in what they've been urging the district court to do, but now they're blaming the district court for not adopting a definition of random.

[00:20:58] Speaker 01:
And in fact, the district court

[00:21:00] Speaker 01:
specifically opened the door to define that term at the charge conference.

[00:21:07] Speaker 01:
And this is on Appendix 1594 to 1598.

[00:21:12] Speaker 01:
Mr. Haug told the district court three times that he did not want to add anything to the claim construction.

[00:21:19] Speaker 01:
And so it's too late at this point for Bax Alta to be coming in now and seeking to

[00:21:28] Speaker 01:
reverse a jury determination and send it back to the district court after he told the district court before the case went to the jury that no more claim construction is necessary.

[00:21:39] Speaker 01:
So obviously, they made a strategic decision on that, and they should be required to live with it.

[00:21:50] Speaker 01:
So if there's any other questions on that, I think I have a couple more minutes

[00:21:55] Speaker 01:
One thing I wanted to add about enablement because Mr. Howard brought up enablement is that there really was no case put on enablement and clearly we did not have an obligation

[00:22:10] Speaker 01:
to respond to a case that was not made a trial.

[00:22:13] Speaker 01:
There was some conclusory testimony.

[00:22:17] Speaker 01:
But as we know, that can't carry the burden under ALKON, Amgen, HERX, Cephalon, and STREC.

[00:22:26] Speaker 01:
And in fact, they didn't even make a threshold showing that any experimentation is needed.

[00:22:31] Speaker 01:
So we don't even get to the WANS factors.

[00:22:34] Speaker 01:
And not that the

[00:22:37] Speaker 01:
Optimizing of the conditions, as I just explained, even suggests that experimentation was necessary because that does not rise to the level of experimentation.

[00:22:48] Speaker 01:
But in any event, they did not carry their burden.

[00:22:51] Speaker 01:
I just want to say one thing.

[00:22:54] Speaker 01:
I guess I should move on to willfulness.

[00:22:56] Speaker 01:
We did cross appeal on willfulness.

[00:23:00] Speaker 01:
And that's a classic willfulness story.

[00:23:03] Speaker 01:
It should have been permitted to go to the jury.

[00:23:06] Speaker 01:
The jury was aware that Nectar knew that Bayer was developing the factory products, so there were prior business dealings.

[00:23:14] Speaker 01:
Their random peggalation project when they later worked for Bexalt was failing.

[00:23:25] Speaker 01:
They knew of their patent application, both Bexalta and Nectar.

[00:23:29] Speaker 01:
They knew about the patent when it issued.

[00:23:32] Speaker 01:
And in fact, as early as 2011, that the claim that was pending in the patent office was substantially the same claim as in the patent.

[00:23:45] Speaker 01:
Significantly, what the district court did is it excluded a poster, which was a description of the B domain

[00:23:53] Speaker 01:
peggalated invention by Bayer, which was made at a public gathering.

[00:23:58] Speaker 01:
Baxalta scientists were present.

[00:24:01] Speaker 01:
On this poster was significant information, including some charts showing the retention of activity if you peggalate in the bee domain, which was a revolutionary concept at the time.

[00:24:14] Speaker 01:
And within a very short period of time, that information was circulated

[00:24:18] Speaker 01:
to scientists at Baxalta.

[00:24:20] Speaker 01:
Shortly thereafter, they dropped their random pegalation program with Nectar and turned to pegalating B domain.

[00:24:28] Speaker 01:
And within a very short time after that, they were at the FDA already with work having been done on pegalating B domain.

[00:24:35] Speaker 01:
So that evidence that was excluded was significant.

[00:24:40] Speaker 01:
And it should have been, we should have been able to run with it.

[00:24:43] Speaker 01:
And the case should not have been taken from the jury.

[00:24:50] Speaker 01:
So with that, I'll ask the panel if it has any questions.

[00:24:55] Speaker 03:
Okay, any questions from the panel at the moment?

[00:24:59] Speaker 02:
No, thank you.

[00:25:00] Speaker 03:
All right, thank you.

[00:25:01] Speaker 03:
Then we'll hear from Mr. Haag.

[00:25:18] Speaker 03:
Dr. Haug, are you ready?

[00:25:23] Speaker 00:
Yes, Your Honor, sorry.

[00:25:24] Speaker 00:
I think we had a problem with the communication.

[00:25:28] Speaker 00:
I would like to start.

[00:25:29] Speaker 00:
Mr. Bakke talked about the reaction conditions in the being similar between cysteine and lysine conjugation.

[00:25:38] Speaker 00:
There's absolutely nothing in the patent about reaction conditions, certainly not as to lysine pegulation.

[00:25:45] Speaker 00:
And so we have to stay with the patent.

[00:25:49] Speaker 00:
That goes both to claim construction as well as to the enablement issues.

[00:25:53] Speaker 00:
The processes are in no way the same or even close to being similar.

[00:25:57] Speaker 00:
15-pegulation allows site-specific non-random conjugation, whereas lysine does not, as they disclaimed in that prosecution.

[00:26:07] Speaker 00:
In response to the question from Judge Lynn,

[00:26:11] Speaker 00:
A relevant portion from Appendix 4599, the appeal brief by Bayer, it's not talking about cysteines or arginines or anything else.

[00:26:21] Speaker 00:
It's very clearly talking about possible conjugation at amines or carboxy sites.

[00:26:27] Speaker 00:
And these reactive groups result in random conjugation and cannot or does not ensure attachment at the B domain.

[00:26:36] Speaker 00:
It couldn't be clearer.

[00:26:37] Speaker 00:
It is very clear, and as I said earlier, completely consistent with the specification.

[00:26:43] Speaker 00:
Mr. Bakke also talked about some of the expert testimony here.

[00:26:48] Speaker 00:
The expert for Baxolta, Dr. Zalipski, said it was not possible to peggulate lysine non-randomly.

[00:26:58] Speaker 00:
Full stop.

[00:26:59] Speaker 00:
It's just not possible to do.

[00:27:02] Speaker 00:
But more than that,

[00:27:03] Speaker 00:
The inventors, and this goes to enablement as well as claim construction, but really enablement, the inventors themselves, there were two inventors who testified at this trial.

[00:27:12] Speaker 00:
It was Dr. Murphy and Dr. Pan who was the lead inventor and also he wrote the patent application.

[00:27:21] Speaker 00:
And this is in our brief at 54, Dr. Pan was asked, did you ever consider lysine pegulation as an option for meeting the goals of the KGM project?

[00:27:32] Speaker 00:
Answer, I didn't think it was possible.

[00:27:35] Speaker 00:
Question, why is it you never used lysine pegalation?

[00:27:38] Speaker 00:
Answer, well, if you look at a lot of what I wrote in the proposal background and also a lot of that in the patent application, I really never thought, especially for factor A, such a complex protein with so many lysines, it would not be a feasible way to make that work.

[00:27:57] Speaker 00:
And then Dr. Murphy was also asked,

[00:28:00] Speaker 00:
Question, there is no data in here, the patent, that shows lysine pegalation at the B domain.

[00:28:06] Speaker 00:
Is there?

[00:28:07] Speaker 00:
Answer, there is no data in this patent.

[00:28:10] Speaker 00:
Right.

[00:28:10] Speaker 00:
So yes, we do not have data that shows lysine pegalation in this patent.

[00:28:16] Speaker 00:
It goes on.

[00:28:17] Speaker 00:
Question, is there anything in this patent that you're aware of that talks about pegalating lysines in a non-random way?

[00:28:24] Speaker 00:
Answer, not in this patent.

[00:28:27] Speaker 00:
The testimony could not have been clearer from the two inventors of this patent.

[00:28:32] Speaker 00:
The expert, at least on the Baxalta side, said it was consistent.

[00:28:36] Speaker 00:
It wasn't even possible to do.

[00:28:38] Speaker 00:
And I also would point to the argument from Mr. Batke about a Dynavate, which is the accused product again, and what a Dynavate did or didn't do as far as targeting the B domain, for example.

[00:28:53] Speaker 00:
There was legal error here in the judge's Jamal decision.

[00:28:56] Speaker 00:
where when he denied the J-Mall on lack of enablement, he relied on a Dynavate itself as showing you could do lysine non-random peggalation based on what the jury had found.

[00:29:11] Speaker 00:
However, a Dynavate only came into existence many years after the critical date of the patent should not even have been, it's not legally relevant and shouldn't have been considered at all.

[00:29:26] Speaker 00:
That was also legal error, I believe, in trying to find a basis for the enablement finding.

[00:29:34] Speaker 00:
And I would like to at least mention in the one minute or so I have left on the damages, our brief, I think the brief very, very clearly goes through what happened in the damages.

[00:29:45] Speaker 00:
However, I would summarize our position in part to say what happened here is the expert had an opinion before trial

[00:29:55] Speaker 00:
of one reasonable royalty, a single reasonable royalty.

[00:29:59] Speaker 00:
That opinion was excluded on a Daubert motion.

[00:30:03] Speaker 00:
But the rest of his analysis was allowed to come in, and the opinion went from one reasonable royalty, which the expert was not allowed to testify about, to saying that the jury could just pick, speculate, pick any royalty between 5% and 42%.

[00:30:22] Speaker 00:
And it was

[00:30:24] Speaker 00:
clear legal error to permit the jury to speculate in that regard.

[00:30:29] Speaker 00:
And as I said, I think our briefing goes through that in much detail and cites to the record.

[00:30:35] Speaker 00:
And I'm sure, Your Honors, we'll appreciate the argument from reading those briefs.

[00:30:45] Speaker 03:
You've raised a new issue and I'm going to give Mr. Badke a couple of minutes to respond since you hadn't mentioned the damages aspect in your argument.

[00:30:59] Speaker 03:
Does the panel have any more questions for Mr. Haug?

[00:31:03] Speaker 02:
No, thank you.

[00:31:05] Speaker 03:
No, thank you.

[00:31:06] Speaker 03:
Okay, Mr. Badke, three minutes for some of the new points that Mr. Haug mentioned.

[00:31:12] Speaker 01:
OK, thank you, Your Honor.

[00:31:14] Speaker 01:
I'll start with damages.

[00:31:18] Speaker 01:
If you take a look at the 17.78% returned by the jury, applying the right height standard, it was not so outrageously high as to be unsupportable.

[00:31:29] Speaker 01:
Clearly, what the jury got, and the district court recognized this, is that our expert, Dr. Adonke, performed a substantial analysis to determine the end point.

[00:31:40] Speaker 04:
Counsel, is this your rebuttal argument?

[00:31:42] Speaker 03:
No, I gave him a few more minutes because we allowed Mr. Howard to raise his point on his rebuttal.

[00:31:55] Speaker 04:
I understand.

[00:31:55] Speaker 04:
Thank you.

[00:31:59] Speaker 01:
I'm sorry.

[00:31:59] Speaker 01:
So what I was saying is that the district court recognized that Dr. Rudonke performed a substantial analysis to determine the end point.

[00:32:06] Speaker 01:
And when you look at what the facts are that came in here and their

[00:32:12] Speaker 01:
set out on page 59 of our brief in detail, but you had two parties who were fierce competitors.

[00:32:17] Speaker 01:
Bayer did not give licenses to competitors.

[00:32:20] Speaker 01:
Bayer was trying to market its own extended half-life product.

[00:32:24] Speaker 01:
In fact, Salta was desperate to launch a DynaVate, a product that called its flagship.

[00:32:29] Speaker 01:
So if you look at that 17.78, which is at the low end of Dr. Idonky's range, you can see that the jury did the hard work of assessing all of the evidence

[00:32:40] Speaker 01:
Which is all it really needs to do.

[00:32:42] Speaker 01:
Indeed, under the Powell case, this court has determined that a range, giving the jury a range is just fine.

[00:32:49] Speaker 01:
And in fact, in other cases such as Apple, Smith Klein, and Fuji photo, this court has determined

[00:32:55] Speaker 01:
that a jury can come to a reasonable royalty on their own based on the record as a whole and even reject both experts' rates.

[00:33:05] Speaker 01:
So that's exactly what the jury did here.

[00:33:08] Speaker 01:
Dr. Adonke testified for some 60 pages of transcript as opposed to their expert, Dr. Rauser, who gave very brief testimony, some 20 pages.

[00:33:18] Speaker 01:
And so it's very clear that this was, that there was substantial evidence supporting

[00:33:24] Speaker 01:
the jury's damages verdict.

[00:33:33] Speaker 01:
If I could just mention something about enablement, because Mr. Haug went into great detail on enablement, which he didn't get into in his earlier remarks.

[00:33:46] Speaker 01:
This was a time trial.

[00:33:47] Speaker 01:
And they decided that they were not going to emphasize or put in much evidence at all on enablement.

[00:33:55] Speaker 01:
I have to make decisions on how to allocate my time in a jury trial.

[00:34:00] Speaker 01:
We had 14 hours.

[00:34:02] Speaker 01:
And I don't have to address an issue like your enablement that they did not put any evidence in that was all conclusory in nature.

[00:34:13] Speaker 01:
Uh, we did anyway, uh, and I referenced Dr. Pluss testimony and there was other testimony from our experts saying this is really optimizing.

[00:34:20] Speaker 01:
So I'm just saying that they failed in their burden.

[00:34:23] Speaker 01:
Uh, and, um, and so they, um, I urge the court to reject their appeal on that basis alone.

[00:34:32] Speaker 03:
Okay.

[00:34:34] Speaker 03:
Thank you, Mr. Radke.

[00:34:37] Speaker 03:
Now, Mr. Howe, can you use one minute, can you use one minute limited to the damages aspect?

[00:34:43] Speaker 00:
Yes, thank you, Your Honor.

[00:34:47] Speaker 00:
Once again, what happened is Mr. Donkey gave an opinion that the reasonable royalty would be 23.75%, which was the midpoint between what he said was the bargaining range, which went from 5% to 42.4%.

[00:35:03] Speaker 00:
But that's not what the jury selected.

[00:35:08] Speaker 00:
Correct.

[00:35:10] Speaker 00:
That's not what the jury did.

[00:35:11] Speaker 00:
And so what happened was in a Daubert, his 23.75% royalty was kicked out.

[00:35:19] Speaker 00:
He was not allowed to testify to that because it didn't have any proper basis in the record.

[00:35:24] Speaker 00:
But the important thing is the bargaining range was not a range of reasonable royalties.

[00:35:29] Speaker 00:
And in his deposition, which is in the record here, he clearly said that it would not be a reasonable royalty to go to 42%, for example.

[00:35:38] Speaker 00:
It was a bargaining range.

[00:35:39] Speaker 00:
And he said, you go in the middle.

[00:35:41] Speaker 00:
What then happened when that got excluded, he then said to the jury, this bargaining range is a feasible range to pick any reasonable royalty you want.

[00:35:52] Speaker 00:
And that's what was argued to the jury.

[00:35:54] Speaker 00:
And they were given no basis for what they came up with, which was 17.78.

[00:35:58] Speaker 00:
That number appears nowhere.

[00:36:00] Speaker 00:
And we were not allowed to cross-examine Dr. Odenke about the opinion he gave in his report, namely the midpoint being the reasonable royalty.

[00:36:11] Speaker 00:
We could not cross-examine him on that.

[00:36:13] Speaker 00:
So we couldn't go to his credit.

[00:36:15] Speaker 00:
We couldn't show his credibility or attest his credibility on the basis of giving an opinion in his report, which was completely different from what he gave at trial.

[00:36:25] Speaker 00:
And we were not able to get into what really happened here.

[00:36:29] Speaker 03:
All right.

[00:36:29] Speaker 03:
I think we've exceeded some of the issues.

[00:36:33] Speaker 03:
Any more questions from the panel?

[00:36:37] Speaker 02:
No, thank you.

[00:36:38] Speaker 03:
No, thank you.

[00:36:39] Speaker 03:
All right.

[00:36:40] Speaker 02:
Thank you, Your Honor.

[00:36:41] Speaker 03:
Thanks to counsel.

[00:36:42] Speaker 03:
This case is taken under submission.

[00:36:45] Speaker 03:
And that concludes this panel's argued cases for this morning.

[00:36:52] Speaker 04:
The honorable court is adjourned until tomorrow morning at 10 a.m.