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All rise.

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The United States Court of Appeals for the Federal Circuit is now open and in session.

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God save the United States from this honorable court.

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Please be seated.

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Good morning, ladies and gentlemen.

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We have five cases on the calendar this morning.

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Two from the PTAB.

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Two from the veterans court and one from a district court.

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One of the veterans cases is being submitted on the briefs and not argued.

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First case is 2020, 1184, Moderna versus Arbutus.

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Ms.

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Wigmore?

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I don't want to tell you how to argue your case, but I assume you'll begin with standing.

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which you are doing in front of us right now.

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Good morning, Your Honor, and may it please the court.

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My name is Amy Waigmore, and together with my colleague, Katherine Kiekhafer, I represent the appellate and cross-appellee Moderna TX Inc.

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This case involves an inter-parties review proceeding addressing our Bouddhists' 435 patent on lipid formulations for nucleic acid delivery.

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Now, there are a number of legal errors that infected that proceeding, but given the court statement, I will begin with the issue of standing.

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Moderna had and continues to have standing to pursue this appeal.

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At the outset, when this appeal was filed in November of 2019, there was a series of sublicenses that Moderna had from ACUITAS, which had sublicensed

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these patents, including the 435 from Arbutus' predecessor.

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Those sublicenses applied to four different targets, and at the time that the appeal was filed, there was active development going on with respect to one of those targets, RSV.

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Now, this court has recognized that standing can be established in a number of ways.

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One of those ways, of course, is the concrete activity leading to a possible infringement suit.

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That was not the basis for standing at the time this appeal was filed.

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The basis was contractual rights that are affected by a determination of patent validity.

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And the JTAC case by this court recognizes that basis for standing.

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As of November 19th, 2019, Moderna had these sublicenses in place and it had already paid milestone payments under the licenses.

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How much time had, my recollection is there, it had been about five years since a milestone payment had been made, right?

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It had been several years since the original milestone payments had been made, but at the time... But any milestone payments.

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The last milestone payment that was made prior to the filing of the complaint was when?

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I don't have that specific date, but it is correct that it was not within a year of the appeal being filed.

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That said, there was an active development program with a third party for this RSV target.

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And the license was very much still in place.

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All four sublicenses were still in place.

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These programs had not been abandoned.

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Well, if you're licensed, what's the threat of infringement?

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There does not need to be a threat of infringement under this court's precedent in the JTEC case.

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contractual rights that are implicated by patent validity.

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And the issue here was there were potential future milestone and other royalty payment obligations in connection with those programs, the four viral targets that had been sub-licensed.

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In addition, Moderna had the right to sub-license these programs to third parties.

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And the impact of having to pay these royalty obligations

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was something that would impact their ability to sub-license them.

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Kind of the problem is the weak evidence that you submitted with respect to the likelihood of these payments being affected.

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So you've got testimony that says if and when there's a phase two clinical trial, but no testimony that says we're anticipating it within some period of time or working toward that.

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And in this case, there are multiple patents, and there's nothing that says this particular patent is what was driving the milestone payments.

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And so how do you fill that gap?

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Your Honor, this is a case that is very much distinguishable from the Apple versus Qualcomm case, which was cited by Arbutus in their briefing.

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In that case, Apple had attempt to argue standing based on the possibility of some future royalty payment.

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They had a license, but they had settled two infringement cases with a global settlement.

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They also submitted what the court referred to as an incredibly sparse declaration.

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And the only issue there was whether within six or eight years after this license agreement, settling all the infringement litigation expired, could there be potentially some financial obligation.

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This case is much different.

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There's a detailed set of declarations that were submitted by Sean Ryan, Vice President and General Counsel of Moderna.

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Can I interrupt you for a minute?

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I think the problem here is immediacy.

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How do you show the immediacy specifically?

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Just forget about the other cases for a minute.

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With respect to standing in IPR proceedings, it is true that the injury in fact requirement remains.

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But because there's statutory right to appeal under 35 USC

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141C.

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The requirements for immediacy or traceability and redressability are more relaxed in this context due to the statutory ability to appeal.

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And in this case, there was an ongoing development program at the time the appeal was filed with another party to the extent that development program led to a phase two

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trial, there would be further obligations owed.

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That is concrete.

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And that is the type of activity.

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The court has recognized it can be current or even future activity that can implicate standing.

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Well, I understand that there was probably some concerns about confidentiality and not giving too much information.

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But my concern is still with the too little information.

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You said there's a detailed affidavit, but it's pretty vague.

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The affidavit describes the existence of this development program.

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The development program, if successful, would have led to further royalty payments.

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That was the situation in November of 2019 when this appeal was filed.

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Now, the situation has evolved.

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And it's this court's obligation not just to look at standing at the time the appeal is filed, but whether there's an ongoing live case or controversy.

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And it is true that facts have evolved.

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Well, you still have to have standing as of the time the case is filed.

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Absolutely.

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What extent do you believe there's authority for the proposition that subsequent events can reflect on the nature of standing when it's filed?

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The initial existence of this sublicense is sufficient.

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It was a concrete program.

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There was a concrete development effort being undergone, at least with respect to RSVP.

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And that was something that was actually actively being worked on that is a concrete plan that the company had at the time.

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And that development program was subject to royalty payments.

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In addition, there is this ability to sub-license, which was burdened as set forth in the Ryan Declaration by these royalty payments.

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Now, Your Honor, I'll interrupt you for a minute.

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So do I understand you to be saying that the initial basis for standing would be based on those

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plans that would end the license, the plans to develop something.

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Maybe that kind of fell to the wayside at some point.

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But that at least provided the initial basis for standing.

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And then at some point, it evolved.

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I guess as your client created the vaccine, it evolved to a different basis for standing?

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I wouldn't say a different basis for standing.

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I would say that that evolution keeps this controversy alive.

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Standing is assessed at the time

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the appeal was filed.

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And at that time, there was this active program under the sublicense that had a royalty burden.

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Over time, as set forth in our supplemental declaration, that particular RSV program was not pursued.

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The sublicense is still in place.

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There's potential future development.

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But that particular program, which is very concrete at the time the appeal was filed, did change.

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Now, that said, at the same time, the COVID vaccine was developed and ultimately

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delivered to the market and commercialized.

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But those are all after the date.

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That activity is after the date on which the appeal was filed.

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That is correct.

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And in the Momenta case, this court recognized that it need not only look at standing at the time the appeal was filed, which here we're relying on the license and the active development program for standing as of November 2019,

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But we still need to evaluate whether there's a lot of controversy moving forward as the appeal is still pending.

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And there, we do have this kind of vaccine.

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If you're concerned about royalty obligations, financial burdens under a license that you don't need, you could have terminated the license, couldn't you?

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There are two different situations here with respect to the four targets of the sublicense.

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It's not disputed that those targets as they were being developed at the time were practicing the patents at issue.

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So there would have been a royalty burden had those patents not been invalidated.

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And that's what Mr. Ryan's declaration makes clear.

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As to the COVID vaccine, certainly is a case that Moderna does not concede any infringement.

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And the case law makes clear that for standing based on potential litigation,

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you need not concede infringement, nor need there be a specific threat of an infringement case.

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There needs to be concrete plans and activity that could lead to a possible infringement action.

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But it can't be so remote.

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I mean, you can't say that we had a license to do a bicycle, and then we later did a car.

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And so therefore, we're concerned about an infringement claim.

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So that is part of your problem.

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You're not arguing that the RSV program that you said was live

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somehow morphed into where we are now.

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You're arguing that they are completely separate and that the patents don't cover what's going on now.

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And so that's part of the problem.

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I understand what you're saying, but I think you're taking it too far.

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Now, in the Momenta case, this court recognized that the basis for standing and case or controversy are not necessarily coextensive.

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The court recognized that situations evolve even after appeals are filed.

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There's no question at the time this appeal was filed, there was an active licensing program that had royalty implications.

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Since that time, it's been a couple of years, there has been some change to that program.

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That license is still in place, but there's no more development of that one particular RSV vaccine under that license.

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But there has been this change in the circumstances where the COVID vaccine, COVID didn't even exist at the time this appeal was filed as far as anyone knew.

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And at that time, we were not relying on the risk of infringement, but now it's a concrete- But you really only discussed those activities in connection with the other appeal, right?

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There's nothing in this first appeal where I see that discussion of the development of the COVID vaccine as something you were relying upon.

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We did supplement the record, Your Honor.

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It's docket number, I think it's 118.

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where we put in the Ryan Declaration that was filed in the 069 appeal.

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We put it into this appeal not only to advise the court of this ongoing lie of controversy, but also to advise the court that the development program we had been discussing in the original declaration at the time of the appeal being filed

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that that program had changed.

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And so it was a problem.

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Council, do you want to spend a few minutes on the merits?

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Absolutely.

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And we'll make sure you get some rebuttal to them.

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OK.

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Thank you.

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So in terms of the merits, there's a fundamental legal flaw of the IPR decision.

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And that is the court failed to apply the proper framework and shift the burden of production to Arbutus.

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There are overlapping ranges in the prior art that the board failed to recognize.

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In addition, the board failed to adequately explain its decision.

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It had a little over two pages of a 51-page opinion addressing the issue of obviousness.

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It did not properly analyze this legal framework or apply it, nor did it adequately explain its decision.

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Now, in terms of the ranges that were disclosed in the prior art, these patents, this 435 patent addresses a composition containing four categories of lipids.

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conjugated lipids, cationic lipids, and two non-cationic lipids, cholesterol and phospholipid.

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Ranges of the three categories.

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Just to make sure I'm being clear here, are you addressing primarily the claims other than claims seven and claim eight?

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We are addressing all of the claims because the error was fundamental when the court turned from anticipation, which it found for some of the claims, to obviousness.

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with respect to all the claims it was analyzing for obviousness that had not been anticipated, it failed to apply this burden shifting framework.

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And these ranges... And there are some claims that are, if I remember correctly, there are some claims that don't have the phospholipid in them, right?

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They have cholesterol, and the court made the same error with respect to cholesterol.

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In fact, even greater error because it said in its opinion that the cholesterol range was not disclosed when even Arbutus conceived

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that the prior art discloses a 20% to 45% range of cholesterol.

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So is it your view that what we should do if we reach the merits is not reverse, but to vacate and remand so that the burden shifting can apply and the board can consider it under that standard?

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That's correct.

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It was the fundamental error not to shift the burden and to impose upon Moderna the obligation to prove motivation to optimize.

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Motivation to optimize is presumed

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when there's an overlapping range.

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And based on the description we provided in our brief, there was a clear overlap.

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That overlapping range need not be stated in Hake-Verba or verbatim in the prior art here.

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It was with respect to three of the four lipids at issue.

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Those ranges were explicitly described, and there can be no question they overlap with what's in the claims.

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case law on this says it can be either overlapping or encompass.

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That is, the prior arrangers can either overlap with the claim range or encompass the claim range.

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That's correct.

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The presumption applies.

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All you need is a slight overlap.

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The Enrique Peterson case makes that clear as do other cases.

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This case is squarely on point with the DuPont case that this court decided.

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It was also an IPR where a non-obviousness finding was reversed.

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Here, there are multiple variables, but the DuPont case recognized that those can form the basis of an overlapping range presumption.

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The fundamental error here- Was there anything in the record, putting aside whether they should have formally shifted the burden, is there anything in the record that would indicate that the narrower range or the specific range was somehow surprising or somehow different from what the prior art showed?

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The basis for their patent, they allege, is this amount of cationic lipid above 50%.

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But the prior art, including the 554 publication and the 189 publication, both expressly disclose a cationic lipid range of up to 60%.

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So that's the fundamental issue here.

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60% cationic lipid is in the prior art.

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And so it cannot be the basis for distinguishing this patent from the prior art.

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So let's hear from the other side, and we'll give you three minutes for a bottle.

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Mr. Burrell.

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Good morning, Your Honors.

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David Burrell for Arbutus.

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I'll start where my opponent started with regard to the issue of standing.

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And what's missing here are multiple things.

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First, any notion of immediacy is entirely absent from the evidence that Moderna has presented to this court.

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It is speculative, and today we've heard for the first time that they admit that this RSV vaccine program, which was the basis for their standing as of notice of appeal, November 2019 has been abandoned.

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So they've now shifted.

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But we need to look at November 2019.

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Indeed.

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So why is the

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is the fact that it was at least ongoing at that point.

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And there was an intention.

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to move forward with it at that point.

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Why isn't that enough?

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Here's what's missing.

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And the key cases here are the Samsung case, in which multiple patents were licensed and standing was found, and the Apple versus Qualcomm case, where multiple patents were licensed and standing was not found.

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And the difference is crucial here.

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In Samsung, this court found that the invalidation of the patent at issue in that case would have changed the royalty obligation because of the way the patent pool worked.

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If you eliminate one patent,

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more money would be paid on other patents, so Samsung would have profited.

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That was missing in Apple versus Qualcomm, where this court found that Apple presented no evidence that the invalidation of the particular patents it was challenging would change its royalty obligations.

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That evidence is missing here, too.

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If you look at Mr. Ryan's declaration, he addresses this at A5745 through 46, and he acknowledges that Moderna here has licensed numerous patents, not just the 435 and 069, numerous patents,

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Those patents are found at Exhibit D to his declaration at A58-28-69.

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It's actually in the other appendix because they supplemented it.

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And what you see there are 40 pages of patents.

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These are two of them, only one at issue in this appeal.

[00:18:52] Speaker 03:
Well, patent portfolio licensing is pretty normal.

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So assuming that patent portfolio license is normal, can't a

[00:19:01] Speaker 00:
clinical trial or ultimately a product read on a number of patents in the portfolio it could but the crucial question under the apple all-con case is whether the requested relief here the validation of the four three five pat would affect the payment obligation for modem and there's no evidence from the sir ryan that it would there's no evidence unlike out unlike all are the samsung case that says if the four three five happens invalidated and we have continued this forestry program

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we would have owed Arbutus less money.

[00:19:32] Speaker 03:
We've said you don't have to admit infringement in order to establish standing.

[00:19:36] Speaker 00:
That's not a question of admitting infringement.

[00:19:38] Speaker 00:
It's a question of whether the requested relief would affect their payments under the license.

[00:19:43] Speaker 00:
So whether they infringe or not, let's assume for a moment that they would.

[00:19:47] Speaker 00:
Best case scenario for their standing case.

[00:19:49] Speaker 00:
There's no evidence that if you take out the 435 patent that they owe one red cent less.

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if they would have progressed their RSV program, because they have to pay on all of the patents.

[00:20:00] Speaker 00:
So the elimination of one or two of them doesn't change their royalty obligation.

[00:20:04] Speaker 00:
They have to show evidence under the Apple Qualcomm case that it does.

[00:20:08] Speaker 04:
Modernism.

[00:20:09] Speaker 04:
Your point, I think the point of your argument, is that that makes it less concrete, less likely to occur, combined with the fact that it was also there had been a lot of times since any milestone payments had been made anyway.

[00:20:21] Speaker 04:
So it was a little bit less concrete that they would even

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this product would come to fruition and they would have to pay any milestone payment.

[00:20:28] Speaker 00:
Absolutely.

[00:20:28] Speaker 00:
And even if they did have to pay milestones, which again is not concrete and speculative, there's no evidence that the request of relief would have redressed in any way their obligations.

[00:20:38] Speaker 00:
They would have paid exactly the same amount under the evidence that they have advanced.

[00:20:42] Speaker 00:
And the Apple Qualcomm case says this defeats injury in fact under the metamune analysis.

[00:20:48] Speaker 00:
And so you can't have a situation where you have a

[00:20:50] Speaker 00:
bunch of licenses that that are to forty pages of licenses forty pages of patents without any evidence and they have an absence of proof here you can read the ryan declaration front to back you won't see any evidence that the invalidation of the four three five patent or for that matter the o six nine patent in the next case affects their payment obligations and the apple call com case said that are you saying that

[00:21:14] Speaker 03:
Are you saying that they need, where you have those multiple patents, that they essentially would need to establish that infringement would occur based on the ongoing program?

[00:21:27] Speaker 03:
Or are you saying they need to establish that not only would infringement likely occur,

[00:21:32] Speaker 03:
but that it wouldn't occur with respect to the other patents.

[00:21:36] Speaker 00:
That would be one way of solving the Apple versus Qualcomm problem, if they had advanced that sort of evidence that said, we don't infringe the other 40 pages of patents.

[00:21:45] Speaker 00:
So therefore, invalidation of the 435 would mean we don't have to pay any royalties if we progress this RSV vaccine.

[00:21:51] Speaker 00:
That sort of evidence would have been sufficient under Apple Qualcomm.

[00:21:54] Speaker 00:
They don't say that.

[00:21:55] Speaker 00:
What Moderna says in reply, they cite the Shen Yang case for the proposition that

[00:22:00] Speaker 00:
eliminating the 435 would eliminate a major obstacle for them, consistent with their payment obligations, but that was addressed also in the Apple versus Qualcomm case.

[00:22:11] Speaker 00:
Footnote 4 of that case says that Apple doesn't present any evidence as to why invalidation of this one patent

[00:22:17] Speaker 00:
would present eight would would group a major obstacle for example they could have said it before three five happens invalidated that would be all these other patents also would be invalid so we wouldn't have to pay or we don't infringe the other pat so that's really the major obstacle but they have no

[00:22:33] Speaker 00:
of any of that.

[00:22:34] Speaker 00:
And so just like Apple Qualcomm, which I would submit is on all fours with this case, with respect to the pool of patents and the absence of evidence that the payment obligations would be affected by the requested relief, I would say respectfully resolves the standing issue here.

[00:22:49] Speaker 03:
Isn't it a bit of a catch-22, though?

[00:22:51] Speaker 03:
I mean, you have to basically

[00:22:53] Speaker 03:
say that you're liable in order to have standing?

[00:22:56] Speaker 00:
No, you could have said exactly what your honor suggested.

[00:23:00] Speaker 00:
They could have said, we challenge the 435 patent.

[00:23:04] Speaker 00:
We don't infringe the other 39 pages of patents.

[00:23:06] Speaker 00:
So therefore, invalidation of the 435 patent would remove any payment obligations, even if we did infringe.

[00:23:12] Speaker 00:
We agree.

[00:23:12] Speaker 00:
They don't have to admit infringement, but they do have to show some imminent threat here.

[00:23:17] Speaker 00:
of having to pay their royalty for their activities.

[00:23:22] Speaker 00:
They admit that they had no threat when they filed this notice of appeal with respect to COVID.

[00:23:28] Speaker 00:
They admit that at some point after their last payment obligation, which was back in 2016,

[00:23:33] Speaker 00:
was made that they abandon their RSV program that's relevant to this patent.

[00:23:38] Speaker 00:
We have no evidence of when that happened versus when their COVID vaccine came into being and recreated in their mind that imminent threat.

[00:23:46] Speaker 00:
There's no timeline that indicates that at all times they had an imminent threat of suit and that they had standing.

[00:23:53] Speaker 00:
They have no evidence of that.

[00:23:54] Speaker 00:
They're just saying, well, at some point the RSV program went away and at some point the COVID vaccine program came up, so we probably had standing somewhere

[00:24:02] Speaker 00:
in that, and it's good enough for government work.

[00:24:04] Speaker 03:
What do you make of the argument, and this goes to the question of the supplemental authority, that post-filing activities are relevant?

[00:24:13] Speaker 03:
I thought post-filing activities are relevant not because they help to establish standing, but because even withstanding,

[00:24:22] Speaker 03:
there might not be any case of controversy.

[00:24:24] Speaker 00:
Absolutely.

[00:24:25] Speaker 00:
And I agree with Your Honor's interpretation.

[00:24:27] Speaker 00:
It is a fundamental tenet of standing and frankly jurisdictional Article III case law that at all points, at every point, including the filing of the notice of appeal and all points thereafter, standing must be present.

[00:24:39] Speaker 00:
Any gap, one minute.

[00:24:41] Speaker 02:
Counsel, do you want to address the merits?

[00:24:43] Speaker 00:
happy to address the merits, your honor.

[00:24:45] Speaker 00:
This is a case in which the board made numerous factual findings that are explicitly relevant under this court's range case law that resolve this case conclusively.

[00:24:56] Speaker 00:
For example, the board found that the various components disclosed in the prior art interrelate with each other in an unpredictable way.

[00:25:06] Speaker 00:
That is explicitly relevant under this court's applied materials case, under this court's case law, for example, in the Horizon case, where the court said it's important to distinguish in these cases between systems, like the one in DuPont, like the one in applied materials.

[00:25:21] Speaker 04:
Why isn't that something that would be considered after the presumptions applied?

[00:25:25] Speaker 04:
It seems to me that once you have a prior reference that discloses the mold percentages for the ingredients in the claim, that at that point the presumption applies and there should be some shifting.

[00:25:38] Speaker 04:
That seems to be the problem here.

[00:25:41] Speaker 00:
So let me address that in two ways.

[00:25:42] Speaker 00:
First, the Horizon case does not stand for that proposition.

[00:25:45] Speaker 00:
In that case, where the various components interacted unpredictably with each other, as the board found here in an unchallenged factual finding, no presumption was applied by the district.

[00:25:55] Speaker 00:
None.

[00:25:56] Speaker 00:
And this court affirmed that finding.

[00:25:58] Speaker 00:
And Moderna's only response to that is that Horizon isn't a range case, and somehow the active ingredient was not disclosed in the prior art as a range.

[00:26:06] Speaker 00:
That's not true.

[00:26:07] Speaker 00:
If you look at the district court case at star five, it makes clear that the Kazai reference disclosed an overlapping range of diclofenate sodium, the active ingredient.

[00:26:16] Speaker 04:
Even if that's true, there's plenty of other cases that take a different approach.

[00:26:19] Speaker 00:
Well, none of them suggest that in a situation where the various components of the prior interact unpredictably with each other, a presumption is invoked.

[00:26:28] Speaker 00:
And I would suggest the applied materials case suggests exactly the opposite.

[00:26:32] Speaker 03:
Are you saying we should say that even though there is a clear overlap in the ranges, that just because there appears to be an interaction between the ingredients, that we

[00:26:45] Speaker 00:
we don't we ignore those over and so so first of all i don't think there's a clear disclosure of an overlap there's no disclosure of how how can twenty to forty five percent not overlap at least somewhat with thirty to forty it does of course but there's no disclosure of a fossil lipid range anywhere in the prior that's not in all the claims know that includes seven of the case of sex and seven aside if we set claim seven if we set and seven aside what i would observe your honor

[00:27:14] Speaker 00:
The range case law, whether it's DuPont or Applied Materials or any of the others, does not exist separate and apart from this court's obviousness jurisprudence and the KSR obviousness jurisprudence.

[00:27:25] Speaker 00:
They're trying to get at the same thing, and they can't be applied in a way that is abjectly defying KSR and all of the principles of obviousness.

[00:27:35] Speaker 00:
To take one example,

[00:27:36] Speaker 00:
in the book in the dupont case as well as the peterson case the site the court observed that the issue here is do we have routine experimentation which leads to obvious miss because you experiment routinely within the ranges or do we have not obvious invention

[00:27:52] Speaker 00:
That's the crucial distinction here, and the court said the exact same thing in the Genetics Institute case.

[00:27:57] Speaker 00:
It's getting at the same thing as KSR in all the obviousness cases.

[00:28:01] Speaker 00:
It's not some separate doctrine that can exist hermetically sealed from everything else in Section 103.

[00:28:07] Speaker 00:
And here, the board found repeatedly in an unchallenged factual finding that it would not be routine experimentation, that it would be difficult.

[00:28:14] Speaker 00:
experimentation.

[00:28:15] Speaker 00:
Their own expert agrees that it would be difficult experimentation.

[00:28:18] Speaker 00:
So which side of the ledger are we on?

[00:28:21] Speaker 00:
Routine experimentation, as in DuPont, as in Peterson, or not routine experimentation, as in Genetics Institute and Horizon?

[00:28:28] Speaker 00:
The board answered that question repeatedly and said that... Do you want to deal with claim one?

[00:28:33] Speaker 00:
sure if i think they want is exactly the same principle the board out that there would not have that those ranges would not have been achieved by routine experimentation therefore precluding any finding of obvious there's no finding in any of the range cases whether step on duplaut peterson or any of the others that where you have not only cases aside the l o five four formulation is right within the claim

[00:29:02] Speaker 00:
uh... of claim one sure i'm sorry i might have misunderstood your honor's question your honor's asking about anticipation of claim one rather than the obvious issue and i'll apologize your honor i didn't i didn't understand your question i'd happily move to anticipation the problem with moderna's anticipation argument in the board's finding is that it has the right numbers but it's about the wrong thing

[00:29:22] Speaker 00:
The LO54 formulation provides the numbers for the inputs into the formulation, not the outputs.

[00:29:30] Speaker 00:
And Moderna admits that at A4651.

[00:29:33] Speaker 00:
They say that those are the inputs, and their expert admits.

[00:29:40] Speaker 00:
that the inputs and the outputs are not the same.

[00:29:44] Speaker 00:
They change.

[00:29:45] Speaker 00:
And our expert provides a careful explanation of why that is as a result of the detergent process used in the 554.

[00:29:51] Speaker 00:
Our expert explains, at A4924 through 25, that it removes some of the cholesterol lipid.

[00:30:00] Speaker 00:
And so the amount of conjugated lipid increases.

[00:30:03] Speaker 00:
It goes up, he explained, there and in his opposition.

[00:30:06] Speaker 03:
A lot of this is interesting, but the problem is it's not in the claim.

[00:30:09] Speaker 00:
Well, it is in the claims.

[00:30:11] Speaker 00:
The claims were construed and everyone agrees that they address the final formulation percentages.

[00:30:17] Speaker 00:
Moderna agrees with that.

[00:30:19] Speaker 00:
and we agree with that too.

[00:30:20] Speaker 00:
This claim is directed to a particle, a final particle, not the inputs of what you put in before you manufacture the particle.

[00:30:27] Speaker 00:
So that is in the claim.

[00:30:29] Speaker 00:
And the prior art is addressing something different.

[00:30:32] Speaker 00:
The prior art is addressing what you put in, not what you get out.

[00:30:35] Speaker 00:
And Moderna knows that it has a problem here.

[00:30:38] Speaker 00:
They don't try to defend the proposition that there's no difference between inputs and outputs.

[00:30:42] Speaker 00:
They respectfully try to manufacture a finding from the board that doesn't exist, that somehow the inputs are indicative of the outputs.

[00:30:50] Speaker 00:
That's their response.

[00:30:52] Speaker 00:
And they cite to A20 and 21 of the board's opinion.

[00:30:56] Speaker 00:
That finding is not there.

[00:30:58] Speaker 03:
Did Moderna rely on the entirety of the 554 publication and not just on the L054

[00:31:06] Speaker 03:
It was.

[00:31:07] Speaker 00:
The board found their argument with respect to the rest of the 554 unpersuasive, and I don't think that's being refuted here on appeal, that the ranges are not enough to anticipate the claims.

[00:31:18] Speaker 00:
So the board relied only on that particular example, the L054 example, as being anticipatory.

[00:31:23] Speaker 03:
Well, isn't that an overly narrow view of the priority?

[00:31:26] Speaker 00:
Well, the board addressed the rest of the 554.

[00:31:31] Speaker 00:
It addressed the ranges.

[00:31:32] Speaker 00:
It explained that the ranges

[00:31:34] Speaker 00:
were not the sort of ranges that can anticipate the claim.

[00:31:37] Speaker 00:
And Moderna doesn't argue otherwise.

[00:31:39] Speaker 00:
It doesn't quibble with the board's rejection of their anticipation argument on that basis.

[00:31:43] Speaker 00:
It simply tries to defend the anticipation argument on the basis of the L054 formulation.

[00:31:48] Speaker 00:
But again, that

[00:31:49] Speaker 00:
addressed the wrong thing.

[00:31:51] Speaker 00:
Everyone agrees that the LO54 is about the inputs, not the outputs.

[00:31:55] Speaker 00:
And there's a difference.

[00:31:57] Speaker 00:
And the conjugated lipid goes up.

[00:31:59] Speaker 00:
And contrary to what Moderna said, our expert did not say otherwise.

[00:32:02] Speaker 00:
His testimony is at A44, 47 through 50.

[00:32:05] Speaker 00:
He never said.

[00:32:06] Speaker 00:
He never said that there would be particles that have less than 2% conjugated lipid.

[00:32:12] Speaker 00:
They try to suggest that he did, but if you read the testimony, he didn't say that.

[00:32:15] Speaker 00:
On the contrary, he said the amount of conjugated lipid will go up.

[00:32:19] Speaker 00:
And it's 2% already in the L054 example.

[00:32:23] Speaker 00:
And our claim ends.

[00:32:25] Speaker 02:
You consumed your time, but we'll give you two minutes to rebuttal on the cross appeal if there's something to rebut.

[00:32:34] Speaker 00:
I appreciate that.

[00:32:34] Speaker 00:
Thank you very much, Your Honor.

[00:32:47] Speaker 02:
We'll give you three minutes.

[00:32:49] Speaker 01:
Thank you, Your Honor.

[00:32:51] Speaker 01:
In terms of anticipation, there was a factual finding by the board that should be reviewed under a substantial evidence standard.

[00:32:58] Speaker 01:
The L054 species, there's no dispute that it contains all the components that can be found in the claimed ranges.

[00:33:05] Speaker 01:
The only dispute is about whether you can take the formulation molar concentrations

[00:33:12] Speaker 01:
to mean what's in the claims.

[00:33:14] Speaker 01:
And that's exactly what Arbutus did in both the 554 publication and in the 435 patent.

[00:33:22] Speaker 01:
They described the formulation and the molar concentrations, and they claim them.

[00:33:27] Speaker 01:
There's absolutely no evidence in the 435 patent, the patent here at issue, of what the amount would be in the composition if different.

[00:33:37] Speaker 04:
Do you support the board's finding that when you

[00:33:41] Speaker 04:
make the particle at least some will fall within the claim ranges even if some are outside and so therefore there's anticipation?

[00:33:50] Speaker 01:
That's certainly a supportable finding and I think what the board found is there's no evidence to the contrary.

[00:33:56] Speaker 01:
There's no evidence that anything would be outside the range other than pure speculation in this case by their expert Dr. Thompson.

[00:34:02] Speaker 01:
That was a credibility finding.

[00:34:04] Speaker 01:
He alleged but did not support that the numbers would be different in the final

[00:34:09] Speaker 01:
composition and, importantly, the disclosure of the 4-3-5 patent, all it has is the formulation concentration.

[00:34:16] Speaker 01:
It contains no information about any different, if they would be different, concentrations in the final composition.

[00:34:22] Speaker 01:
So it's exactly the same disclosure in both

[00:34:25] Speaker 01:
the 554 publication, and in the patented issue here.

[00:34:29] Speaker 01:
And this is a factual finding that is entitled to deference.

[00:34:33] Speaker 01:
In terms of standing, I just want to point out paragraph 8 of Mr. Ryan's declaration that can be found in the appendix at page 6397 and 98.

[00:34:44] Speaker 01:
In that paragraph, unlike in the Apple case, he expressly said that there would be financial implications with respect to the 435 patent if this patent

[00:34:55] Speaker 01:
What's the site?

[00:34:57] Speaker 01:
It's 6397 and 6398.

[00:35:01] Speaker 01:
That's paragraph 8 of the Ryan Declaration.

[00:35:04] Speaker 01:
So there's a lot more evidence in this record than in the Apple case.

[00:35:08] Speaker 01:
And from a practical standpoint, it cannot be the case that if you have a portfolio

[00:35:14] Speaker 01:
You can never appeal an IPR because you have to challenge the patent sequentially.

[00:35:17] Speaker 01:
That's going on here.

[00:35:18] Speaker 01:
We have a separate appeal we're about to argue on the 069.

[00:35:22] Speaker 01:
We can't take them all together in the same appeal.

[00:35:25] Speaker 01:
The key is to remove an obstacle.

[00:35:27] Speaker 01:
And that's what this IPR is designed to do.

[00:35:29] Speaker 03:
Is there any evidence that the 435 relates in any way to the vaccine efforts?

[00:35:35] Speaker 01:
There are broad statements by Arbutus that are in the record in the appendix that they think they cover the whole landscape of lipid nanoparticles.

[00:35:43] Speaker 03:
Those broad statements being in the press articles?

[00:35:48] Speaker 01:
Yes.

[00:35:48] Speaker 01:
And these are not just press articles.

[00:35:49] Speaker 01:
These are quotes from Arbutus' CEO.

[00:35:53] Speaker 03:
But it wasn't a deposition testimony or anything.

[00:35:56] Speaker 03:
It's just generally saying, I've got a lot of facts.

[00:36:00] Speaker 01:
No deposition testimony.

[00:36:01] Speaker 03:
Is there a reference in that specifically to the 435?

[00:36:07] Speaker 01:
Not with respect to the vaccine specifically.

[00:36:09] Speaker 01:
They have not made a specific threat, nor need they under the case law.

[00:36:13] Speaker 01:
There needs to be a risk of possible infringement based on Moderna's activities.

[00:36:18] Speaker 01:
And there clearly is, because the vaccine is being widely distributed.

[00:36:21] Speaker 01:
There has been no covenant not to sue.

[00:36:23] Speaker 01:
That's set forth in the Ryan Declaration.

[00:36:25] Speaker 01:
And there have been broader discussions

[00:36:27] Speaker 01:
between Moderna and Arbutus about a broader license.

[00:36:31] Speaker 01:
And this will all come up in the next case, right?

[00:36:33] Speaker 01:
That will come out again.

[00:36:34] Speaker 01:
Yes, thank you.

[00:36:35] Speaker 02:
Thank you, counsel.

[00:36:37] Speaker 02:
Mr. Borough, you do have a little time on the cross-appeal.

[00:36:48] Speaker 00:
Thank you, Your Honor.

[00:36:49] Speaker 00:
My opponent referred to a factual finding by the board that did not find persuasive our expert's testimony that all of the particles would fall outside the ranges.

[00:36:59] Speaker 00:
Respectfully, the board got it wrong.

[00:37:01] Speaker 00:
That has it backwards.

[00:37:03] Speaker 00:
We don't have to come forward with evidence of non-anticipation and of non-inherency in order to prevail.

[00:37:09] Speaker 00:
The burden falls on Moderna and remains with Moderna the whole time.

[00:37:14] Speaker 00:
The board cited not a shred of evidence in the record.

[00:37:18] Speaker 00:
that the amounts would be the same and on the contrary their expert admitted that they wouldn't be at eight fifty fifty two forty two through fifty two forty four he says it can change during manufacture so even if the board rejected our experts testimony as non persuasive for whatever reason that would leave an absence of proof what about the patent itself why doesn't the patent itself provide some proof of what the board is asserting based on the fact that

[00:37:46] Speaker 04:
The specification written description, that is, refers to the formulation percentages and the claims refer to the particle percentages.

[00:37:55] Speaker 04:
Why would someone think they'd be different based on the fact that the particle percentages aren't disclosed in the written

[00:38:01] Speaker 00:
So our expert addresses that question in explaining that the 554 manufacturing process is a particular process that uses detergent that would change substantially the lipid percentage.

[00:38:13] Speaker 04:
I understand what you're saying, but what about what do we do at the board finding that not credible, not thinking that it makes sense technically?

[00:38:21] Speaker 04:
based on the reading of the specification.

[00:38:23] Speaker 04:
What did we do with that?

[00:38:24] Speaker 00:
Well, based on the reading of our specification, and the board did rely on our specification in suggesting that that's what we did, too.

[00:38:31] Speaker 00:
The problem with that evidence is that our process is different.

[00:38:36] Speaker 00:
There was no finding that in our process you would have substantial changes.

[00:38:39] Speaker 00:
We had a very different process in our specification than the 554 manufacturing process in its specifications.

[00:38:45] Speaker 00:
So the evidence, and this is the only evidence, it's not as if there's evidence that Moderna brought forward that says,

[00:38:49] Speaker 00:
It doesn't change.

[00:38:50] Speaker 00:
It's all the same.

[00:38:51] Speaker 00:
Moderna agrees that the percentages change when you use the 554 process.

[00:38:56] Speaker 00:
So there can be no credibility determination that sort of rejects all that evidence.

[00:39:00] Speaker 00:
That's the only evidence there was.

[00:39:02] Speaker 00:
Their expert didn't dispute it.

[00:39:03] Speaker 00:
Our specification, which of course is not prior art and is an entirely different matter,

[00:39:07] Speaker 00:
doesn't have the same manufacturing process.

[00:39:09] Speaker 00:
It has an entirely different manufacturing process.

[00:39:12] Speaker 00:
No detergent.

[00:39:13] Speaker 00:
It doesn't lose all that phospholipid, thereby increasing, or sorry, cholesterol, thereby increasing the other components, and most importantly here, for present purposes, the conjugated lipid.

[00:39:24] Speaker 02:
Thank you.

[00:39:25] Speaker 02:
The case is submitted.

[00:39:28] Speaker 02:
And when Ms.

[00:39:30] Speaker 02:
Wigmore