[00:00:01] Speaker 01: Nippon Shinjuku Company against Therapeutics Incorporated. [00:00:09] Speaker 01: Mr. Peterson. [00:00:13] Speaker 04: Thank you. [00:00:13] Speaker 04: May it please the court, William Peterson on behalf of the appellant in Nippon Shinjuku. [00:00:19] Speaker 04: The parties agreed that for a two-year period after the end of the company term, [00:00:23] Speaker 04: All potential actions arising under U.S. [00:00:26] Speaker 04: law relating to patent invalidity would be filed only in the District of Delaware. [00:00:31] Speaker 04: The IPRs filed by Surepta fit squarely within this provision. [00:00:35] Speaker 04: The District Court erred in interpreting the Foreign Selection Clause, and as a result, erred in denying a preliminary injunction. [00:00:43] Speaker 04: In the initial matter, neither party has argued that the mutual confidentiality agreement is ambiguous [00:00:50] Speaker 04: and is an unambiguous agreement, its interpretation is a question of law, reviewed de novo by this court. [00:00:57] Speaker 04: And when contract language is clear and unequivocal, Delaware law requires a court to give that language its plain meaning. [00:01:06] Speaker 04: Here there are two requirements potentially in dispute for the application of the form selection laws. [00:01:12] Speaker 04: One, the IPRs must be potential actions as defined in the MCA. [00:01:17] Speaker 04: The other is that the IPRs must arise under US law [00:01:20] Speaker 04: relating to patent infidelity. [00:01:23] Speaker 04: Both of these are satisfied. [00:01:26] Speaker 04: Potential actions as it's used in section 10, the foreign selection clause, is capitalized. [00:01:32] Speaker 04: It is a defined term in the agreement. [00:01:35] Speaker 04: And that definition includes any patent or other intellectual property disputes between Nippon Shinjuku and Surepta filed with a court or administrative agency in the United States [00:01:48] Speaker 04: in connection with the development and commercialization of therapies for Duchenne muscular dystrophy. [00:01:54] Speaker 04: Is this report correct? [00:01:55] Speaker 03: Is it your view that that precludes the filing of an IPR? [00:02:03] Speaker 04: Not on its own, but inspection 10. [00:02:06] Speaker 04: Yes, Your Honor, that is our view, that the IPRs fit within this definition of potential actions as it's defined. [00:02:15] Speaker 04: If you look at section 10, it doesn't limit potential actions. [00:02:18] Speaker 04: It actually says all potential actions. [00:02:21] Speaker 04: The district court correctly recognized the definition of potential actions literally encompasses IPRs. [00:02:28] Speaker 04: And that plain language should have been enforced. [00:02:31] Speaker 04: And then I don't think there's any serious dispute that IPRs arise under US law relating to patent envelope. [00:02:38] Speaker 04: IPRs are required to include assertions. [00:02:41] Speaker 04: challenging patents would be under 35 USC sections 102 or section 103. [00:02:45] Speaker 04: And as we pointed out in the briefing, in this court's decision in Milam Labs versus Jensen Pharmaceuticals, the court already noted, with reference to 28 USC 1338A, that no state court shall have jurisdiction over any claim for relief arising under any act of Congress relating to patents in reference to IP. [00:03:06] Speaker 03: The district court, as I read its opinion, thought this [00:03:11] Speaker 03: That didn't make sense, that it would create tension, Section 10 would create tension with Section 6 and it would be odd if they deferred, if it deferred filing of IPRs and impliedly delayed them for two years. [00:03:36] Speaker 03: Is it your view that these were improper, [00:03:41] Speaker 03: grounds for the court's decision? [00:03:46] Speaker 04: I wouldn't say improper, Your Honor, but I would say incorrect. [00:03:50] Speaker 04: I will say if there were some ambiguity in the language of Section 10, if there were some dispute about the meaning of the words the parties used, then it might be appropriate to look to Section 6. [00:04:04] Speaker 04: But failing that, absent some kind of conflict between Section 6 and Section 10, [00:04:10] Speaker 04: You need to enforce section 10 according to its plain language. [00:04:15] Speaker 04: So there's obviously no conflict between the two provisions. [00:04:18] Speaker 04: Section 10. [00:04:19] Speaker 03: You're saying Surrepta just contracted out the right to file IPRs. [00:04:30] Speaker 04: Yes, Your Honor. [00:04:31] Speaker 04: That's what Surrepta agreed to. [00:04:34] Speaker 04: that all potential actions arising under U.S. [00:04:37] Speaker 04: law relating to patent infringement or validity shall be filed in the United States District Court for the District of Delaware. [00:04:44] Speaker 04: Potential actions obviously includes filings before an administrative agency. [00:04:49] Speaker 04: I think if you ask an objective third party what kind of intellectual property disputes get filed with U.S. [00:04:56] Speaker 04: administrative agencies, these days any practitioner [00:05:00] Speaker 04: inter-parties review proceedings would be the very first thing that would come to mind. [00:05:04] Speaker 04: And I don't think there's any way of saying that an IPR does not arise under U.S. [00:05:11] Speaker 04: law relating to patent validity. [00:05:15] Speaker 04: Delaware law, consistent with general principles of contract law, holds parties to their bargains and enforces contracts according to their plain language. [00:05:24] Speaker 04: So let me turn briefly back. [00:05:26] Speaker 04: Section 6 governs what happens during the contract term. [00:05:29] Speaker 04: And Section 6 doesn't say we're going to defer or delay IPR proceedings. [00:05:35] Speaker 04: Section 6 just says broadly, during the contract term, no one is going to file any intellectual property disputes at all. [00:05:44] Speaker 04: I'm simplifying somewhat. [00:05:46] Speaker 04: But Section 6 is what happens during the contract term. [00:05:50] Speaker 04: Section 10 is about what happens after the contract term. [00:05:53] Speaker 00: And counsel, this is Judge Stoll. [00:05:56] Speaker 00: Section 6 has an express exception [00:05:59] Speaker 00: for IPRs that would be time barged, right? [00:06:04] Speaker 00: Whereas Section 10 does not include that kind of express exception, right? [00:06:10] Speaker 04: Yes, Your Honor. [00:06:10] Speaker 04: We believe that's correct. [00:06:11] Speaker 04: There might be some dispute about the precise scope of the exception in Section 6, but there's certainly no exception whatsoever in Section 10. [00:06:20] Speaker 04: And my friend has argued that this is a waiver that Sarepta is, I think, losing an impliedly substantive right to this. [00:06:28] Speaker 04: To be perfectly clear, we are not saying that SREPTA cannot assert any validity challenge that it wants to make. [00:06:35] Speaker 04: It just needs to do so in its chosen form. [00:06:38] Speaker 04: It needs to make those assertions in the District of Delaware. [00:06:42] Speaker 04: Another part of district court's reasoning was the references in Section 10 to forum nonconvenience, personal jurisdiction, and venue. [00:06:51] Speaker 04: And we agree, of course, you see those references in Section 10, but in context, [00:06:57] Speaker 04: They're referring to what happens after a potential action is filed in the District of Delaware. [00:07:02] Speaker 04: Neither party will contest personal jurisdiction or venue in the District of Delaware. [00:07:07] Speaker 04: It's just not a plausible way of saying that that somehow restricts the scope of what must be filed in the District of Delaware in the first instance. [00:07:18] Speaker 04: The last argument that I think you'll hear from my friend is going to be in reference to the county decision. [00:07:23] Speaker 04: There's an argument that Sorefta raised in the briefing that there needs to be a connection between the NCA and the form selection clause for it to be enforceable. [00:07:33] Speaker 04: And that's a misreading of the Cano case. [00:07:36] Speaker 04: A more typical form selection clause like the one in Cano might be limited to disputes that arise out of or relate to the agreement or the transactions contemplated thereby. [00:07:47] Speaker 04: So what this court did in Cano [00:07:50] Speaker 04: was look for a connection to see whether the dispute arose out of or related to the agreement. [00:07:56] Speaker 04: So Repton misreads that as being a general proposition that applies to all foreign selection clauses, regardless of their language. [00:08:03] Speaker 04: But that's not the case. [00:08:05] Speaker 04: This court enforces foreign selection clauses according to their terms. [00:08:09] Speaker 04: The terms here are broad. [00:08:11] Speaker 04: All potential actions arising under US law relating to patent infringement or invalidity. [00:08:18] Speaker 00: I just wanted to ask you one quick question. [00:08:23] Speaker 00: In your blue brief, you argue that if this court agrees with your interpretation of the agreement, that you're entitled to reversal. [00:08:39] Speaker 00: I realize that you asked for reversal before you saw Judge Sterk's decision. [00:08:47] Speaker 00: And my question is, the decision says that the court need not reach balance of the equities of the public interest. [00:08:56] Speaker 00: I mean, how could this court possibly reverse in that scenario when there's factors that weren't considered? [00:09:03] Speaker 04: Well, certainly reversing the denial, the question would be the right remedy, whether this court would reverse and render reverse with an instruction to enter the preliminary injunction. [00:09:13] Speaker 00: Would it be a vacate? [00:09:14] Speaker 00: It would be vacating the denial with instructions to consider knowing this court's views on the factors that, in fact, the district court addressed. [00:09:26] Speaker 00: But we can't address factors that the district court didn't even address, right? [00:09:31] Speaker 04: Well, I do think there's an exception to that, which we highlighted in the red brief. [00:09:37] Speaker 04: And that is, I'm sorry, the reply brief. [00:09:39] Speaker 04: And that is when there's only one possible resolution of the facts [00:09:44] Speaker 04: It is permissible for a court of appeals to touch on issues that were unaddressed in the first instance. [00:09:49] Speaker 04: And with respect to those factors, this court has discussed them in the general protect decision. [00:09:55] Speaker 04: The backwoodies, this court talked about a different forms selection clause, but they're having contracted for a specific form. [00:10:02] Speaker 04: A plaintiff should not be heard to argue that the enforcement of the contract into which it's really entered would cause hardship. [00:10:08] Speaker 04: And then on public interest, there is no public interest served by excusing a party violation of its previously negotiated contractual undertaking to litigate in a particular form. [00:10:19] Speaker 04: I'll also note to its credit, Sarepta has never said that if Nipon Shinjaku is right about the interpretation of the form selection clause, that it still is entitled to go forward with the IPRs. [00:10:31] Speaker 04: All of Sarepta's arguments, both in the district court and on appeal, have been premised on its interpretation [00:10:37] Speaker 04: of the forum selection jobs. [00:10:39] Speaker 04: So we've just never seen that sort of alternative raised at any stage of the proceedings. [00:10:46] Speaker 04: Look, we think certainly we have confidence the district court will get this right, regardless of the level of guidance this court gives on remand. [00:10:52] Speaker 04: But obviously, as our recent 28-J letter notes, there have already been institutional decisions in two of the seven IPRs. [00:10:59] Speaker 04: We have decisions coming up very quickly, and there are many ones, and we're [00:11:03] Speaker 04: to have this enforced as soon as possible so we can start getting those IPRs withdrawn and have the parties litigate these issues in their chosen form. [00:11:14] Speaker 00: I have one other question. [00:11:15] Speaker 00: We've received a Rule 28J letter yesterday, I believe. [00:11:21] Speaker 00: Can you tell me, do you know what the timeline is for the other IPRs and how does this, the fact that the PTAB is [00:11:32] Speaker 00: the statutory deadline is passed or on some of these IPRs, how does that, or that it's been granted institution in two of the IPRs, how does that impact the case before us? [00:11:49] Speaker 04: Let me take that in order. [00:11:50] Speaker 04: First, there are two that have deadlines on January 21st, two with deadlines on January 24th, and the last has a deadline on the 17th. [00:11:59] Speaker 04: There were two that were instituted on January 7th. [00:12:03] Speaker 04: I'll note that it doesn't preclude relief. [00:12:07] Speaker 04: If you look at the Dodo case VR versus Merch source decision, that was a case in which this court enforced a form of selection clause that barred IPRs that had already [00:12:18] Speaker 04: been instituted. [00:12:19] Speaker 04: If you look on page 936 of that decision, you can look at the injunction that was entered there, which required the party that had filed the IPRs to send an email to the PTAB quickly requesting a conference call to facilitate withdrawal and if the PTAB grants permission to file motions to file the motions [00:12:38] Speaker 04: essentially very quickly to withdraw them. [00:12:40] Speaker 04: So that's the same relief we'd be looking for here. [00:12:43] Speaker 04: Now, obviously, our goal is to have these withdrawn before institution. [00:12:47] Speaker 04: We think that post-institution withdrawal may be more difficult. [00:12:51] Speaker 04: So we're hoping to get as much as we can out of our quorum selection clause. [00:12:55] Speaker 04: And that's why we'd ask this court to issue decision as quickly as possible and, frankly, issue the mandate along with the decision rather than waiting the typical time for the rehearing period. [00:13:11] Speaker 01: Okay. [00:13:12] Speaker 01: Any more questions at the moment for Mr. Peterson? [00:13:15] Speaker 02: No. [00:13:16] Speaker 01: And then we'll hear from the other side, Mr. Flippert. [00:13:20] Speaker 02: Thank you, Your Honor. [00:13:22] Speaker 02: In interpreting the MCA as a whole, as required under Delaware law, the District Court first examined Section 6, which specifically addresses the timing of patent validity challenges before the U.S. [00:13:33] Speaker 02: Patent and Trademark Office. [00:13:35] Speaker 01: The Court gave effect... Does any administrative proceeding [00:13:41] Speaker 01: Is it not Section 6? [00:13:43] Speaker 02: It does, Your Honor, and it refers to validity challenges before the U.S. [00:13:47] Speaker 02: Patent and Trademark Office. [00:13:49] Speaker 01: Okay. [00:13:51] Speaker 01: All right. [00:13:52] Speaker 01: Now, that's the problem, isn't it? [00:13:54] Speaker 02: Yes. [00:13:55] Speaker 02: So the Court gave effect to this express provision in Section 6 where the parties agreed to defer any validity challenges, including IPRs, for a period of no more than one year and 20 days [00:14:09] Speaker 02: ending on June 21, 2021, when the covenant term ended. [00:14:15] Speaker 02: And as the court held in its second order, Section 6 shows the party's intent to allow IPRs to proceed after the covenant term. [00:14:24] Speaker 02: And that finding of intent is found at Appendix 1230. [00:14:29] Speaker 02: And it's quite important because on appeal, Nippon Shinjuku fails to address or challenge [00:14:36] Speaker 02: the district court's interpretation of Section 6, as showing that the parties intended to allow IPRs after the covenant term expired. [00:14:46] Speaker 03: But Mr. Clibbert, how about Section 10, which says that all actions filed within two years, which these are, shall be filed in the District of Delaware, and potential actions are defined as including [00:15:07] Speaker 03: of those before an administrative agency. [00:15:10] Speaker 03: So, why doesn't that include the IPRs that your client files? [00:15:17] Speaker 02: Yes, Your Honor. [00:15:18] Speaker 02: Well, first, as I said, the court made this finding of intent that the parties did intend, as shown in Section 6, to allow IPRs after the covenant term expired. [00:15:28] Speaker 02: And that's a defined period that expired on June 21, 2021. [00:15:33] Speaker 02: And then under the Cardinal rule of contract interpretation in Delaware, the court interpreted Section 10 in light of that intent in Section 6. [00:15:44] Speaker 02: And that was consistent with the Delaware Supreme Court's decisions in sanitoral holding and Elliott Associates, which the court cited and which Nipanchanyaku doesn't respond to. [00:15:54] Speaker 02: And then the court, when it looked at Section 10, it identified [00:15:59] Speaker 02: a number of features of the language that are fully supportive of the court's interpretation of that section as only referring to district court actions. [00:16:10] Speaker 03: These provisions are all in plain English. [00:16:13] Speaker 03: We don't have to infer intent beyond what the words themselves express. [00:16:20] Speaker 02: We do agree that the term potential actions, Your Honor, is a defined term. [00:16:24] Speaker 02: But the provision in Section 10 does not say [00:16:27] Speaker 02: all potential actions shall be filed in the District of Delaware. [00:16:32] Speaker 02: It says all potential actions arising under US law relating to patent infringement or invalidity shall be filed there. [00:16:41] Speaker 02: So there's a limiting phrase which modifies the definition. [00:16:45] Speaker 02: It's simply referring to a subset of the more broadly defined potential actions on page two. [00:16:53] Speaker 00: Counsel, this is Judge Dole. [00:16:55] Speaker 00: A quick question. [00:16:56] Speaker 00: Do you dispute the district court's conclusion that the definition of potential action in Section 1 literally encompasses IPRs? [00:17:06] Speaker 02: No, we don't dispute that at all. [00:17:08] Speaker 02: What the judge then said was that read in full context, it states [00:17:14] Speaker 02: quote, all potential actions arising under US law relating to patent infringement or invalidity. [00:17:21] Speaker 00: What about the or language, or invalidity? [00:17:25] Speaker 02: Right, Your Honor. [00:17:26] Speaker 02: Well, it does say or, but that's where you have to look at the entire sentence. [00:17:30] Speaker 02: Everything in that sentence refers to district court actions. [00:17:34] Speaker 02: It refers to subject matter jurisdiction, personal jurisdiction, venue, and transfer. [00:17:38] Speaker 02: And also, as the court pointed out, [00:17:42] Speaker 02: That term, potential actions, appears twice in the sentence that we're looking at. [00:17:48] Speaker 02: And in the second use, the sentence states that neither party will seek to transfer the potential actions on the ground to form nonconvenience. [00:17:58] Speaker 02: And of course, only court cases can be transferred. [00:18:02] Speaker 02: That phrase, the potential actions, which must refer to court cases, [00:18:08] Speaker 02: most logically refers back to its antecedent basis at the beginning of the sentence, which refers to potential actions arising under US law relating to patent infringement or invalidity. [00:18:20] Speaker 02: So we submit it should have the same meaning in both parts of the sentence, not different meanings, as Nippon Shinjuku argues. [00:18:28] Speaker 02: We submit the plain language supports the court's interpretation when one looks at and reads the entire sentence. [00:18:38] Speaker 02: It's also this sentence refers to and states that the potential actions shall be filed in the district of Delaware. [00:18:45] Speaker 02: And of course, IPRs can't be filed in the district of Delaware. [00:18:49] Speaker 02: So, we don't believe the plain language requires or supports that interpretation. [00:18:55] Speaker 02: In addition, what Nippon Shinjuku is doing here is they're trying to say there are two separate questions. [00:19:03] Speaker 02: You know, do IPRs meet the definition of potential actions, and then do they meet the arising underlanguage? [00:19:10] Speaker 02: But that's not the question. [00:19:12] Speaker 02: This term has to be considered overall as a whole, which is exactly what the judge did, Judge Stark did. [00:19:19] Speaker 02: And he gave effect to the modifying language. [00:19:24] Speaker 02: Another example of that is that it's clear that this modifying language has effect [00:19:30] Speaker 02: when one looks at the definition of potential actions on page 2 of the agreement. [00:19:35] Speaker 02: And the court will see that the broader unmodified definition of potential actions at page 2 also includes, for example, non-patent IP disputes, as well as potential cases filed in Europe, Japan, or other countries. [00:19:52] Speaker 02: But, of course, those potential actions are also excluded from section 10 by the modifying language. [00:20:00] Speaker 02: And so we submit that the, we don't dispute the definition of potential actions as it's provided on page two, but the fact is this section, section 10, is more narrowly written and there is modifying language that is referring to a subset of these cases that are filed in district court. [00:20:20] Speaker 02: And everything that the district court identified here is supportive of that more narrow reading. [00:20:27] Speaker 02: And moreover, again, [00:20:29] Speaker 02: because the cardinal rule of contract interpretation in Delaware is to provide a harmonious interpretation so that both sections 6 and 10 can be given effect, that is exactly what Judge Stark did after finding the intent to allow IPRs to proceed after the covenant term, which again is unchallenged on appeal. [00:20:52] Speaker 02: And when I say unchallenged, if the court looks for example at pages 15 to 16 of the reply brief, [00:20:59] Speaker 02: where Nippon Shinjuku mentions Section 6, it does not address the district court's analysis of Section 6 or argue that the court's finding of intent is erroneous. [00:21:10] Speaker 02: And given the narrow standard of review that applies to this appeal, we submit that Nippon Shinjuku has failed to dispute or challenge in any way the district court's determination that the parties intended to allow IPRs to proceed after the covenant term expired. [00:21:29] Speaker 02: And that intent is relevant to Section 10. [00:21:33] Speaker 02: Because there is, of course, a conflict. [00:21:36] Speaker 02: Because if one accepts the court's finding that the parties intended to allow IPRs to proceed after the covenant term expired, that covenant, that is exactly what Sarepta did. [00:21:49] Speaker 02: And that covenant term expired on June 21, 2021. [00:21:53] Speaker 02: But Nippon Shinjuku is arguing that no. [00:21:57] Speaker 02: that parties, you know, that Surrupta was not permitted to file IPRs on that date even though it is contemplated and permitted under Section 6. [00:22:08] Speaker 02: So there is a conflict and Judge Stark recognized that conflict and he found that the better reading of these two provisions together is to interpret Section 10 as limited to federal district court cases. [00:22:24] Speaker 02: And again, we believe the plain language does fully support that. [00:22:28] Speaker 02: And for example, Judge Stark did identify this provision about transfer and the fact that, you know, that is, that can only refer to district court cases. [00:22:41] Speaker 02: And we submit that that second use eliminates really any question about what the first use of potential actions is referring to. [00:22:51] Speaker 00: Should I? [00:22:52] Speaker 00: I would have just pressed you a little bit on that. [00:22:54] Speaker 00: This is Judge Stoll. [00:22:56] Speaker 00: So it's all one sentence and it says all potential actions must be filed in the District of Delaware and neither party will seek to transfer the potential actions on the ground to form nonconvenience. [00:23:09] Speaker 00: Why can't, why does that not mean when they talk about the potential actions in the second sentence, they're talking about the actions that must be filed or shall be filed in Delaware, and so therefore it makes sense. [00:23:24] Speaker 02: Right, but it also makes sense, we think it makes more sense the way that Judge Stark has construed it. [00:23:30] Speaker 02: And as I mentioned, it refers to the potential actions, that second use. [00:23:35] Speaker 02: We think the best reading of that is that it's referring to its antecedent basis at the beginning of the sentence. [00:23:42] Speaker 00: The antecedent basis was the... The all potential actions arising under US law relating to patent infringement or invalidity that shall be filed in the United States District Court. [00:23:52] Speaker 02: Those. [00:23:54] Speaker 02: Right. [00:23:54] Speaker 02: It's referring to the initial reference to potential actions at the beginning of the sentence. [00:23:58] Speaker 02: We know that the second reference must refer only to court cases because no one disputes that only court cases can be transferred. [00:24:08] Speaker 00: Mike, I'm going to push again. [00:24:10] Speaker 00: It says there shall be filed in Delaware. [00:24:13] Speaker 00: And then when it says no one shall seek transfer, why is that not referring to, you know, again, I'm going to read all potential actions or anything under US law relating to patent infringement or invalidity that shall be filed in Delaware? [00:24:28] Speaker 00: Why shouldn't it mean that? [00:24:31] Speaker 02: Well, we think the better reading is in context, as Judge Stark said, is that it's referring to district court cases. [00:24:38] Speaker 02: And essentially, there is no reference to IPRs in Section 10. [00:24:44] Speaker 02: What Section 10 was intended is simply a selection of which district court any patent infringement or invalidity district court cases would be litigated in for two years. [00:24:55] Speaker 02: It is a narrower form selection clause [00:24:57] Speaker 02: And it should be interpreted that way, consistent with Section 6, because Section 6 does expressly address the timing of IPR challenges before the board of patent validity challenges. [00:25:12] Speaker 03: Yes, Robert. [00:25:13] Speaker 03: Invalidity certainly includes IPRs. [00:25:18] Speaker 03: And the expressed definition of potential actions does include administrative agency. [00:25:26] Speaker 03: And so when you talk about the forum non-convenience sentence and focus on the word the, the potential actions, putting that meaning on the seems to me weighs a lot less than the expressed definition of potential actions and the fact that invalidity does include IPRs. [00:25:54] Speaker 02: Well, Your Honor, as I mentioned, the express definition also includes, for example, cases in Japan and cases in Europe. [00:26:03] Speaker 02: And plainly, those were not contemplated here. [00:26:05] Speaker 02: So Section 10 does not simply apply the broad definition of potential actions. [00:26:12] Speaker 02: It is a subset of the potential actions. [00:26:16] Speaker 02: And it's referring to cases in district court. [00:26:19] Speaker 02: It's an affirmative statement about the cases relating to patent infringement, which we know are district court cases, or invalidity that will be filed in district court. [00:26:31] Speaker 02: And it is not referring to IPRs. [00:26:33] Speaker 02: There's no mention of IPRs. [00:26:35] Speaker 02: And one has to read the agreement as a whole, as the district court did, to see that it's Section 6, not Section 10, that deals with the timing of any IPR filings. [00:26:51] Speaker 02: And I did want to just briefly respond to the point that the argument that Sarepta has never disagreed that a preliminary injunction should be granted if the court agrees with Nipanchanyaku's interpretation. [00:27:05] Speaker 02: That's incorrect. [00:27:07] Speaker 02: As we argued, for example, on page 19 of the red brief, we argued that Nipanchanyaku has disregarded the narrow standard of review that applies in this appeal. [00:27:20] Speaker 02: And under controlling Third Circuit law, for example, the Riley case and the Spartacus case, even if Nippon Shinjuku could show legal error in the district court's contract interpretation, it still hasn't shown that the district court abused its discretion in finding no irreparable harm. [00:27:37] Speaker 02: Under the Third Circuit practice, Nippon Shinjuku would have to show harmful error in both gateway factors to even reach the balance of equities and public interest factors, and it has not done so here. [00:27:49] Speaker 02: So we certainly disagree with the assertion that we have conceded that an injunction would have to be entered in this case if the court agreed with Nippon Shinjuku's construction. [00:28:02] Speaker 02: We don't agree with that and we argued that on page 19 of the red brief. [00:28:09] Speaker 01: You're saying, if I hear you correctly, [00:28:12] Speaker 01: that all of these proceedings, even if we should decide in favor of your opponent, that we should allow all of these proceedings to take the time and expense of the parties and of the board to proceed until we get around to writing an opinion? [00:28:34] Speaker 02: Well, Your Honor, Nippon Shinoyaku has cited no case [00:28:37] Speaker 02: that supported their position that this court could simply reverse the preliminary injunction and direct another injunction to be entered. [00:28:46] Speaker 02: The case law does not support that. [00:28:49] Speaker 02: The four factors would have to be considered by the district court under a different construction and rebalanced. [00:28:55] Speaker 02: The district court would have to be given an opportunity to balance the four factors. [00:29:00] Speaker 02: This is not a one factor analysis. [00:29:03] Speaker 02: It's a four factor analysis. [00:29:05] Speaker 02: And the district court only made very brief preliminary comments about the third and fourth factors and has not had an opportunity to fully consider all of the factors. [00:29:17] Speaker 02: The public interest, for example, I understand that a third IPR was granted this morning and there is a public interest in removing patents that should not have issued that are unpatentable. [00:29:30] Speaker 02: So there are countervailing public interests [00:29:34] Speaker 02: There is the harm to Surepta if Surepta's statutory right to file IPRs, to pursue these IPRs is going to be taken away. [00:29:43] Speaker 02: That would be severe harm to Surepta, irreparable harm, as the district court found. [00:29:50] Speaker 02: And if the court were to disagree on the contract interpretation, it would be appropriate to vacate and remand this case to Judge Stark, not to reverse. [00:30:01] Speaker 02: And there's been no case cited [00:30:03] Speaker 02: Biden had punched in Yakuts that would support simply reversing and directing the district court to enter a preliminary injunction. [00:30:12] Speaker 00: Mr. Fudges, this is Judge Stoll. [00:30:14] Speaker 00: I have a quick question. [00:30:16] Speaker 00: I understand you're saying you're preserved in argument on page 19 of your red brief about irreparable harm. [00:30:23] Speaker 00: But one of the concerns I have is I look at the district court's opinion in paragraph five on pages [00:30:31] Speaker 00: six and seven of the district court's opinion. [00:30:34] Speaker 00: And that whole discussion of irreparable harm is premised on the contract conclusion, that is interpreting the contract to say that an IPR could be filed. [00:30:49] Speaker 00: So don't those two prongs and the preliminary injection rise and fall together? [00:30:56] Speaker 02: Well, thank you, Your Honor. [00:30:57] Speaker 02: The court was responding to the only argument that Nippon Shinjuku presented. [00:31:02] Speaker 02: And so that was the only argument Nippon Shinjuku presented for irreparable harm. [00:31:07] Speaker 02: That doesn't strengthen its position. [00:31:09] Speaker 02: In Dodo case, for example, the chairman of Dodo case put in a declaration, there was testimony that Dodo case was a small company that only had four employees, that it would be financially harmed by the parallel proceedings. [00:31:24] Speaker 02: There's no such evidence of irreparable harm in this case that was entered. [00:31:29] Speaker 02: And so this is a situation where Dipanchanyaku chose to put in no evidence whatsoever on irreparable harm beyond its argument on the contract interpretation. [00:31:39] Speaker 02: So that doesn't make their position stronger. [00:31:41] Speaker 02: And the court was simply responding to the argument that was presented. [00:31:47] Speaker 00: You're saying that there needs to be a remand so the court can reconsider it in light of [00:31:53] Speaker 00: in light of new determinations on contract interpretation. [00:31:57] Speaker 00: Now, do you agree that the district court didn't reach the balance of the equities or the public interest? [00:32:04] Speaker 00: Even though, there's a little bit of inconsistency. [00:32:07] Speaker 00: And paragraph six, it says given the court's conclusions on the first two factors, the court need not reach the balance of the equities or public interest. [00:32:14] Speaker 00: But then in paragraph seven on the next page, it says Nippon does not meet its burden [00:32:19] Speaker 00: on any of the factors that must establish in order to obtain a preliminary injunction. [00:32:24] Speaker 00: So, I think it didn't address the other, the balance of the equities in the public interest, but there is that sentence on, that someone might cite on, in paragraph seven. [00:32:36] Speaker 02: Yes, Your Honor. [00:32:36] Speaker 02: The court addressed it only in a brief, in a brief way, primarily to point out that Nippon Shinoyaki's arguments on the third and fourth factors, again, [00:32:45] Speaker 02: really simply were repeating the same argument on the contract interpretation. [00:32:50] Speaker 02: And the court disagreed with those arguments and found them unpersuasive. [00:32:56] Speaker 02: But the court has not had an opportunity to balance all of these four factors if there is a different contract interpretation. [00:33:06] Speaker 02: That is certainly something that the district court should have an opportunity to reconsider and weigh these four factors. [00:33:15] Speaker 01: Any more questions for Mr. Peterson? [00:33:19] Speaker 01: No. [00:33:21] Speaker 01: All right. [00:33:22] Speaker 01: Thank you. [00:33:22] Speaker 01: And Mr. Peterson, you have your rebuttal. [00:33:28] Speaker 04: Thank you, Your Honor. [00:33:28] Speaker 04: Let me start where my friend left off with the preliminary injunction factors. [00:33:35] Speaker 04: First, I would like you to look at Sarepta's briefing in the trial court on the preliminary injunction. [00:33:43] Speaker 04: It's Appendix Pages 897 through 901. [00:33:47] Speaker 04: And what you will see there is essentially the same argument that was adopted by the district court. [00:33:54] Speaker 04: And that is that Nipon Chinakyu has not satisfied the second, third, and fourth elements because its contract interpretation is wrong. [00:34:04] Speaker 04: The very second sentence on its irreparable harm is [00:34:09] Speaker 04: As established, Section 10 relates only to potential district court's actions, not IPR petitions. [00:34:15] Speaker 04: So, disruptive arguments against a preliminary injunction have always been premised on its contract interpretation and on the argument that the Forum Selection Clause does not apply to IPR petitions. [00:34:29] Speaker 04: I'm not aware of any case in which this court has held that a Forum Selection Clause does apply and yet nonetheless allowed it to be nullified [00:34:38] Speaker 04: and not enforced by preliminary injunction. [00:34:41] Speaker 04: And that's what this court noted in general protect was if you don't enforce these form selection clauses through injunctive relief, the form selection clauses are reduced to a nullity. [00:34:53] Speaker 04: You see the same thing with the balance of equities both in general protect and I think Dodo case comments on this as well. [00:35:01] Speaker 04: My friend talked a little bit about public interest in challenging patent validity well as it notes [00:35:07] Speaker 04: So, in that case, MEX source would still be able to challenge the validity of the patents. [00:35:12] Speaker 04: It would just have to do so in the chosen form. [00:35:14] Speaker 04: And, of course, independent third parties could initiate separate PTAB proceedings if there were any true public interest and not just a dispute between the parties. [00:35:24] Speaker 04: And then, with respect to the public interest, again, you see what it's consistently saying. [00:35:28] Speaker 04: that there is a public interest in enforcing these contractual agreements to select a form and not a public interest in excusing violations of agreements. [00:35:41] Speaker 04: With respect briefly on Section 6, I'll just note that it doesn't say anything expressly about what will happen after the contract form. [00:35:50] Speaker 04: Section 6 does not say inter-parties review proceedings can be filed at a certain point in time. [00:35:57] Speaker 04: just says, here's what's going to happen during the contract term. [00:36:01] Speaker 04: It's silent about what's going to happen afterwards. [00:36:03] Speaker 04: After the contract term, Section 10 takes over and says, all of your invalidity arguments need to be raised in the District of Delaware. [00:36:11] Speaker 04: And Judge Florian just told you're absolutely correct. [00:36:14] Speaker 04: The reference with the definite article, the potential actions, and that last sentence is Section 10. [00:36:20] Speaker 04: I think in context, [00:36:21] Speaker 04: is very much a reference to the potential actions that as the form selection clause requires are filed in the district of Delaware. [00:36:29] Speaker 04: notice immediately preceded by the reference to neither party contesting personal jurisdiction or venue in the District of Delaware, it would be very odd to read that last piece as somehow referring to not contesting venue or, I'm sorry, not seeking to transfer potential actions on foreign nonconvenience if they're filed in the Eastern District of Texas, for example. [00:36:51] Speaker 04: In context, it's very much referring to what will happen after [00:36:55] Speaker 04: a potential action is followed in the district of Delaware. [00:36:58] Speaker 04: Particularly with the additional institution's decision this morning, we would just urge that the court move as quickly as possible, whether or not they remand them for guidance from the district court or more of a full reversal instructing the district court to enter the preliminary injunction. [00:37:16] Speaker 04: The plain language of this agreement is clear. [00:37:19] Speaker 04: Courts enforce phone selection clauses according to their plain language. [00:37:25] Speaker 04: and precedent supports the application or the imposition of a preliminary injunction in this context. [00:37:32] Speaker 04: And let's go to the next question. [00:37:35] Speaker 04: That is my time. [00:37:36] Speaker 01: We'll see. [00:37:37] Speaker 01: Any more questions for counsel? [00:37:39] Speaker 03: No. [00:37:40] Speaker 03: No. [00:37:41] Speaker 01: All right. [00:37:41] Speaker 01: In that case, thanks to both counsel. [00:37:44] Speaker 01: The case is taken under submission. [00:37:46] Speaker 01: That concludes the court's argument calendar for this morning. [00:37:53] Speaker 04: The Honorable Court is adjourned until tomorrow morning at 10am.